G.R. No.
166250               July 26, 2010 On October 23 and 28, 1992, the same independent surveyor
UNSWORTH TRANSPORT INTERNATIONAL (PHILS.),
INC., Petitioner,
vs.
COURT OF APPEALS and PIONEER INSURANCE AND SURETY
CORPORATION, Respondents.
DECISION
NACHURA, J.:
For review is the Court of Appeals (CA) Decision1 dated April 29,
2004 and Resolution2 dated November 26, 2004. The assailed
Decision affirmed the Regional Trial Court (RTC) decision3 dated
February 22, 2001; while the assailed Resolution denied petitioner
Unsworth Transport International (Philippines), Inc., American
President Lines, Ltd. (APL), and Unsworth Transport International,
Inc.’s (UTI’s) motion for reconsideration.
The facts of the case are:
On August 31, 1992, the shipper Sylvex Purchasing Corporation
delivered to UTI a shipment of 27 drums of various raw materials
for pharmaceutical manufacturing, consisting of: "1) 3 drums (of)
extracts, flavoring liquid, flammable liquid x x x banana flavoring;
2) 2 drums (of) flammable liquids x x x turpentine oil; 2 pallets.
STC: 40 bags dried yeast; and 3) 20 drums (of) Vitabs: Vitamin B
Complex Extract."4 UTI issued Bill of Lading No. C320/C15991-
2,5 covering the aforesaid shipment. The subject shipment was
insured with private respondent Pioneer Insurance and Surety
Corporation in favor of Unilab against all risks in the amount of
₱1,779,664.77 under and by virtue of Marine Risk Note Number MC
RM UL 0627 926 and Open Cargo Policy No. HO-022-RIU.7
On the same day that the bill of lading was issued, the shipment
was loaded in a sealed 1x40 container van, with no. APLU-982012,
boarded on APL’s vessel M/V "Pres. Jackson," Voyage 42, and
transshipped to APL’s M/V "Pres. Taft"8 for delivery to petitioner in
favor of the consignee United Laboratories, Inc. (Unilab).
On September 30, 1992, the shipment arrived at the port of Manila.
On October 6, 1992, petitioner received the said shipment in its
warehouse after it stamped the Permit to Deliver Imported
Goods9 procured by the Champs Customs Brokerage.10 Three days
thereafter, or on October 9, 1992, Oceanica Cargo Marine
Surveyors Corporation (OCMSC) conducted a stripping survey of
the shipment located in petitioner’s warehouse. The survey results
stated:
2-pallets STC 40 bags Dried Yeast, both in good order condition and
properly sealed
19- steel drums STC Vitamin B Complex Extract, all in good order
condition and properly sealed
1-steel drum STC Vitamin B Complex Extra[ct] with cut/hole on
side, with approx. spilling of 1%11
On October 15, 1992, the arrastre Jardine Davies Transport
Services, Inc. (Jardine) issued Gate Pass No. 7614 12 which stated
that "22 drums13 Raw Materials for Pharmaceutical Mfg." were
loaded on a truck with Plate No. PCK-434 facilitated by Champs for
delivery to Unilab’s warehouse. The materials were noted to be
complete and in good order in the gate pass. 14 On the same day, the
shipment arrived in Unilab’s warehouse and was immediately
surveyed by an independent surveyor, J.G. Bernas Adjusters &
Surveyors, Inc. (J.G. Bernas). The Report stated:
1-p/bag torn on side contents partly spilled
1-s/drum #7 punctured and retaped on bottom side content
lacking
5-drums shortship/short delivery 15
conducted final inspection surveys which yielded the same results.
Consequently, Unilab’s quality control representative rejected one
paper bag containing dried yeast and one steel drum containing
Vitamin B Complex as unfit for the intended purpose.16
On November 7, 1992, Unilab filed a formal claim17 for the damage
against private respondent and UTI. On November 20, 1992, UTI
denied liability on the basis of the gate pass issued by Jardine that
the goods were in complete and good condition; while private
respondent paid the claimed amount on March 23, 1993. By virtue
of the Loss and Subrogation Receipt 18 issued by Unilab in favor of
private respondent, the latter filed a complaint for Damages against
APL, UTI and petitioner with the RTC of Makati. 19 The case was
docketed as Civil Case No. 93-3473 and was raffled to Branch 134.
After the termination of the pre-trial conference, trial on the merits
ensued. On February 22, 2001, the RTC decided in favor of private
respondent and against APL, UTI and petitioner, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintif
PIONEER INSURANCE & SURETY CORPORATION and against the
defendants AMERICAN PRESIDENT LINES and UNSWORTH
TRANSPORT INTERNATIONAL (PHILS.), INC. (now known as
JUGRO TRANSPORT INT’L., PHILS.), ordering the latter to pay,
jointly and severally, the former the following amounts:
1. The sum of SEVENTY SIX THOUSAND TWO HUNDRED THIRTY
ONE and 27/100 (Php76,231.27) with interest at the legal rate of
6% per annum to be computed starting from September 30, 1993
until fully paid, for and as actual damages;
2. The amount equivalent to 25% of the total sum as attorney’s
fees;
3. Cost of this litigation.
SO ORDERED.20
On appeal, the CA affirmed the RTC decision on April 29, 2004. The
CA rejected UTI’s defense that it was merely a forwarder, declaring
instead that it was a common carrier. The appellate court added
that by issuing the Bill of Lading, UTI acknowledged receipt of the
goods and agreed to transport and deliver them at a specific place
to a person named or his order. The court further concluded that
upon the delivery of the subject shipment to petitioner’s
warehouse, its liability became similar to that of a depositary. As
such, it ought to have exercised ordinary diligence in the care of the
goods. And as found by the RTC, the CA agreed that petitioner failed
to exercise the required diligence. The CA also rejected petitioner’s
claim that its liability should be limited to $500 per package
pursuant to the Carriage of Goods by Sea Act (COGSA) considering
that the value of the shipment was declared pursuant to the letter
of credit and the pro forma invoice. As to APL, the court considered
it as a common carrier notwithstanding the non-issuance of a bill of
lading inasmuch as a bill of lading is not indispensable for the
execution of a contract of carriage.21
Unsatisfied, petitioner comes to us in this petition for review on
certiorari, raising the following issues:
1. WHETHER OR NOT THE HONORABLE COURT
OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN UPHOLDING THE
DECISION OF THE REGIONAL TRIAL COURT
DATED 22 FEBRUARY 2001, AWARDING THE
SUM OF SEVENTY SIX THOUSAND TWO
HUNDRED THIRTY ONE AND 27/100 PESOS
(PHP76,231.27) WITH LEGAL INTEREST AT 6%
PER ANNUM AS ACTUAL DAMAGES AND 25%
AS ATTORNEY’S FEES.
2. WHETHER OR NOT PETITIONER UTI IS A
COMMON CARRIER.
 3. WHETHER OR NOT PETITIONER UTI
EXERCISED THE REQUIRED ORDINARY
DILIGENCE.
4. WHETHER OR NOT THE PRIVATE
RESPONDENT SUFFICIENTLY ESTABLISHED
THE ALLEGED DAMAGE TO ITS CARGO.22
Petitioner admits that it is a forwarder but disagrees with the CA’s
conclusion that it is a common carrier. It also questions the
appellate court’s findings that it failed to establish that it exercised
extraordinary or ordinary diligence in the vigilance over the
subject shipment. As to the damages allegedly suffered by private
respondent, petitioner counters that they were not sufficiently
proven. Lastly, it insists that its liability, in any event, should be
limited to $500 pursuant to the package limitation rule. Indeed,
petitioner wants us to review the factual findings of the RTC and
the CA and to evaluate anew the evidence presented by the parties.
The petition is partly meritorious.
Well established is the rule that factual questions may not be raised
in a petition for review on certiorari as clearly stated in Section 1,
Rule 45 of the Rules of Court, viz.:
Section 1. Filing of petition with Supreme Court. – A party desiring
to appeal by certiorari from a judgment or final order or resolution
of the Court of Appeals, the Sandiganbayan, the Regional Trial
Court or other courts whenever authorized by law, may file with
the Supreme Court a verified petition for review on certiorari. The
petition shall raise only questions of law which must be distinctly
set forth.
Admittedly, petitioner is a freight forwarder. The term "freight
forwarder" refers to a firm holding itself out to the general public
(other than as a pipeline, rail, motor, or water carrier) to provide
transportation of property for compensation and, in the ordinary
course of its business, (1) to assemble and consolidate, or to
provide for assembling and consolidating, shipments, and to
perform or provide for break-bulk and distribution operations of
the shipments; (2) to assume responsibility for the transportation
of goods from the place of receipt to the place of destination; and
(3) to use for any part of the transportation a carrier subject to the
federal law pertaining to common carriers.231avvphi1
A freight forwarder’s liability is limited to damages arising from its
own negligence, including negligence in choosing the carrier;
however, where the forwarder contracts to deliver goods to their
destination instead of merely arranging for their transportation, it
becomes liable as a common carrier for loss or damage to goods. A
freight forwarder assumes the responsibility of a carrier, which
actually executes the transport, even though the forwarder does
not carry the merchandise itself.24
It is undisputed that UTI issued a bill of lading in favor of Unilab.
Pursuant thereto, petitioner undertook to transport, ship, and
deliver the 27 drums of raw materials for pharmaceutical
manufacturing to the consignee.
A bill of lading is a written acknowledgement of the receipt of
goods and an agreement to transport and to deliver them at a
specified place to a person named or on his or her order.25 It
operates both as a receipt and as a contract. It is a receipt for the
goods shipped and a contract to transport and
deliver the same as therein stipulated. As a receipt, it recites the
date and place of shipment, describes the goods as to quantity,
weight, dimensions, identification marks, condition, quality, and
value. As a contract, it names the contracting parties, which include
the consignee; fixes the route, destination, and freight rate or
charges; and stipulates the rights and obligations assumed by the
parties.26
Undoubtedly, UTI is liable as a common carrier. Common carriers,
as a general rule, are presumed to have been at fault or negligent if
the goods they transported deteriorated or got lost or destroyed.
That is, unless they prove that they exercised extraordinary
diligence in transporting the goods. In order to avoid responsibility
for any loss or damage, therefore, they have the burden of proving
that they observed such diligence.27 Mere proof of delivery of the
goods in good order to a common carrier and of their arrival in bad
order at their destination constitutes a prima facie case of fault or
negligence against the carrier. If no adequate explanation is given
as to how the deterioration, loss, or destruction of the goods
happened, the transporter shall be held responsible.28
Though it is not our function to evaluate anew the evidence
presented, we refer to the records of the case to show that, as
correctly found by the RTC and the CA, petitioner failed to rebut the
prima facie presumption of negligence in the carriage of the subject
shipment.
First, as stated in the bill of lading, the subject shipment was
received by UTI in apparent good order and condition in New York,
United States of America. Second, the OCMSC Survey Report stated
that one steel drum STC Vitamin B Complex Extract was discovered
to be with a cut/hole on the side, with approximate spilling of 1%.
Third, though Gate Pass No. 7614, issued by Jardine, noted that the
subject shipment was in good order and condition, it was
specifically stated that there were 22 (should be 27 drums per Bill
of Lading No. C320/C15991-2) drums of raw materials for
pharmaceutical manufacturing. Last, J.G. Bernas’ Survey Report
stated that "1-s/drum was punctured and retaped on the bottom
side and the content was lacking, and there was a short delivery of
5-drums."
All these conclusively prove the fact of shipment in good order and
condition, and the consequent damage to one steel drum of Vitamin
B Complex Extract while in the possession of petitioner which
failed to explain the reason for the damage. Further, petitioner
failed to prove that it observed the extraordinary diligence and
precaution which the law requires a common carrier to exercise
and to follow in order to avoid damage to or destruction of the
goods entrusted to it for safe carriage and delivery.29
However, we affirm the applicability of the Package Limitation Rule
under the COGSA, contrary to the RTC and the CA’s findings.
It is to be noted that the Civil Code does not limit the liability of the
common carrier to a fixed amount per package. In all matters not
regulated by the Civil Code, the rights and obligations of common
carriers are governed by the Code of Commerce and special laws.
Thus, the COGSA supplements the Civil Code by establishing a
provision limiting the carrier’s liability in the absence of a shipper’s
declaration of a higher value in the bill of lading. 30 Section 4(5) of
the COGSA provides:
(5) Neither the carrier nor the ship shall in any event be or become
liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package
of lawful money of the United States, or in case of goods not
shipped in packages, per customary freight unit, or the equivalent
of that sum in other currency, unless the nature and value of such
goods have been declared by the shipper before shipment and
inserted in the bill of lading. This declaration, if embodied in the bill
of lading, shall be prima facie evidence, but shall not be conclusive
on the carrier.
In the present case, the shipper did not declare a higher valuation
of the goods to be shipped. Contrary to the CA’s conclusion, the
insertion of the words "L/C No. LC No. 1-187-008394/ NY 69867
covering shipment of raw materials for pharmaceutical Mfg. x x x"
cannot be the basis of petitioner’s liability.31 Furthermore, the
insertion of an invoice number does not in itself sufficiently and
convincingly show that petitioner had knowledge of the value of
the cargo.32
In light of the foregoing, petitioner’s liability should be limited to
$500 per steel drum. In this case, as there was only one drum lost,
private respondent is entitled to receive only $500 as damages for
the loss. In addition to said amount, as aptly held by the trial court,
an interest rate of 6% per annum should also be imposed, plus 25%
of the total sum as attorney’s fees.
WHEREFORE, premises considered, the petition is PARTIALLY
GRANTED. The Court of Appeals Decision dated April 29, 2004 and
Resolution dated November 26, 2004 are AFFIRMED with
MODIFICATION by reducing the principal amount due private
respondent Pioneer Insurance and Surety Corporation from
₱76,231.27 to $500, with interest of 6% per annum from date of
demand, and 25% of the amount due as attorney’s fees.
The other aspects of the assailed Decision and Resolution STAND.
SO ORDERED.
G.R. No. 149038            April 9, 2003
PHILIPPINE AMERICAN GENERAL INSURANCE
COMPANY, petitioner,
vs.
PKS SHIPPING COMPANY, respondent.
VITUG, J.:
The petition before the Court seeks a review of the decision of the
Court of Appeals in C.A. G.R. CV No. 56470, promulgated on 25 June
2001, which has affirmed in toto the judgment of the Regional Trial
Court (RTC), Branch 65, of Makati, dismissing the complaint for
damages filed by petitioner insurance corporation against
respondent shipping company.
Davao Union Marketing Corporation (DUMC) contracted the
services of respondent PKS Shipping Company (PKS Shipping) for
the shipment to Tacloban City of seventy-five thousand (75,000)
bags of cement worth Three Million Three Hundred Seventy-Five
Thousand Pesos (P3,375,000.00). DUMC insured the goods for its
full value with petitioner Philippine American General Insurance
Company (Philamgen). The goods were loaded aboard the dumb
barge Limar I belonging to PKS Shipping. On the evening of 22
December 1988, about nine o’clock, while Limar I was being towed
by respondent’s tugboat, MT Iron Eagle, the barge sank a couple of
miles off the coast of Dumagasa Point, in Zamboanga del Sur,
bringing down with it the entire cargo of 75,000 bags of cement.
DUMC filed a formal claim with Philamgen for the full amount of
the insurance. Philamgen promptly made payment; it then sought
reimbursement from PKS Shipping of the sum paid to DUMC but
the shipping company refused to pay, prompting Philamgen to file
suit against PKS Shipping with the Makati RTC.
The RTC dismissed the complaint after finding that the total loss of
the cargo could have been caused either by a fortuitous event, in
which case the ship owner was not liable, or through the negligence
of the captain and crew of the vessel and that, under Article 587 of
the Code of Commerce adopting the "Limited Liability Rule," the
ship owner could free itself of liability by abandoning, as it
apparently so did, the vessel with all her equipment and earned
freightage.
Philamgen interposed an appeal to the Court of Appeals which
affirmed in toto the decision of the trial court. The appellate court
ruled that evidence to establish that PKS Shipping was a common
carrier at the time it undertook to transport the bags of cement was
wanting because the peculiar method of the shipping company’s
carrying goods for others was not generally held out as a business
but as a casual occupation. It then concluded that PKS Shipping, not
being a common carrier, was not expected to observe the stringent
extraordinary diligence required of common carriers in the care of
goods. The appellate court, moreover, found that the loss of the
goods was sufficiently established as having been due to fortuitous
event, negating any liability on the part of PKS Shipping to the
shipper.
In the instant appeal, Philamgen contends that the appellate court
has committed a patent error in ruling that PKS Shipping is not a
common carrier and that it is not liable for the loss of the subject
cargo. The fact that respondent has a limited clientele, petitioner
argues, does not militate against respondent’s being a common
carrier and that the only way by which such carrier can be held
exempt for the loss of the cargo would be if the loss were caused by
natural disaster or calamity. Petitioner avers that typhoon
"APIANG" has not entered the Philippine area of responsibility and
that, even if it did, respondent would not be exempt from liability
because its employees, particularly the tugmaster, have failed to
exercise due diligence to prevent or minimize the loss.
PKS Shipping, in its comment, urges that the petition should be
denied because what Philamgen seeks is not a review on points or
errors of law but a review of the undisputed factual findings of the
RTC and the appellate court. In any event, PKS Shipping points out,
the findings and conclusions of both courts find support from the
evidence and applicable jurisprudence.
The determination of possible liability on the part of PKS Shipping
boils down to the question of whether it is a private carrier or a
common carrier and, in either case, to the other question of
whether or not it has observed the proper diligence (ordinary, if a
private carrier, or extraordinary, if a common carrier) required of it
given the circumstances.
The findings of fact made by the Court of Appeals, particularly
when such findings are consistent with those of the trial court, may
not at liberty be reviewed by this Court in a petition for review
under Rule 45 of the Rules of Court.1 The conclusions derived from
those factual findings, however, are not necessarily just matters of
fact as when they are so linked to, or inextricably intertwined with,
a requisite appreciation of the applicable law. In such instances, the
conclusions made could well be raised as being appropriate issues
in a petition for review before this Court. Thus, an issue whether a
carrier is private or common on the basis of the facts found by a
trial court or the appellate court can be a valid and reviewable
question of law.
The Civil Code defines "common carriers" in the following terms:
"Article 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for
compensation, offering their services to the public."
Complementary to the codal definition is Section 13, paragraph (b),
of the Public Service Act; it defines "public service" to be –
"x x x every person that now or hereafter may own, operate,
manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any
common carrier, railroad, street railway, subway motor vehicle,
either for freight or passenger, or both, with or without fixed route
and whatever may be its classification, freight or carrier service of
any class, express service, steamboat, or steamship, or steamship
line, pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both, shipyard, marine
repair shop, wharf or dock, ice plant, ice refrigeration plant, canal,
irrigation system, gas, electric light, heat and power, water supply
and power petroleum, sewerage system, wire or wireless
communication systems, wire or wireless broadcasting stations
and other similar public services. x x x. (Underscoring supplied)."
The prevailing doctrine on the question is that enunciated in the
leading case of De Guzman vs. Court of Appeals.2 Applying Article
1732 of the Code, in conjunction with Section 13(b) of the Public
Service Act, this Court has held:
"The above article makes no distinction between one
whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as
an ancillary activity (in local idiom, as `a sideline’). Article 1732
also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled
basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a
carrier offering its services to the `general public,’ i.e., the general
community or population, and one who offers services or solicits
business only from a narrow segment of the general population. We
think that Article 1732 deliberately refrained from making such
distinctions.
"So understood, the concept of `common carrier’ under Article
1732 may be seen to coincide neatly with the notion of `public
service,’ under the Public Service Act (Commonwealth Act No.
1416, as amended) which at least partially supplements the law on
common carriers set forth in the Civil Code."
Much of the distinction between a "common or public carrier" and
a "private or special carrier" lies in the character of the business,
such that if the undertaking is an isolated transaction, not a part of
the business or occupation, and the carrier does not hold itself out
to carry the goods for the general public or to a limited clientele,
although involving the carriage of goods for a fee, 3 the person or
corporation providing such service could very well be just a private
carrier. A typical case is that of a charter party which includes both
the vessel and its crew, such as in a bareboat or demise, where the
charterer obtains the use and service of all or some part of a ship
for a period of time or a voyage or voyages4 and gets the control of
the vessel and its crew.5 Contrary to the conclusion made by the
appellate court, its factual findings indicate that PKS Shipping has
engaged itself in the business of carrying goods for others, although
for a limited clientele, undertaking to carry such goods for a fee.
The regularity of its activities in this area indicates more than just a
casual activity on its part.6 Neither can the concept of a common
carrier change merely because individual contracts are executed or
entered into with patrons of the carrier. Such restrictive
interpretation would make it easy for a common carrier to escape
liability by the simple expedient of entering into those distinct
agreements with clients.
Addressing now the issue of whether or not PKS Shipping has
exercised the proper diligence demanded of common carriers,
Article 1733 of the Civil Code requires common carriers to observe
extraordinary diligence in the vigilance over the goods they carry.
In case of loss, destruction or deterioration of goods, common
carriers are presumed to have been at fault or to have acted
negligently, and the burden of proving otherwise rests on
them.7 The provisions of Article 1733, notwithstanding, common
carriers are exempt from liability for loss, destruction, or
deterioration of the goods due to any of the following causes:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers; and
(5) Order or act of competent public authority.8
The appellate court ruled, gathered from the testimonies and
sworn marine protests of the respective vessel masters of Limar
I and MT Iron Eagle, that there was no way by which the barge’s or
the tugboat’s crew could have prevented the sinking of Limar I. The
vessel was suddenly tossed by waves of extraordinary height of six
(6) to eight (8) feet and buffeted by strong winds of 1.5 knots
resulting in the entry of water into the barge’s hatches. The official
Certificate of Inspection of the barge issued by the Philippine
Coastguard and the Coastwise Load Line Certificate would attest to
the seaworthiness of Limar I and should strengthen the factual
findings of the appellate court.
Findings of fact of the Court of Appeals generally conclude this
Court; none of the recognized exceptions from the rule - (1) when
the factual findings of the Court of Appeals and the trial court are
contradictory; (2) when the conclusion is a finding grounded
entirely on speculation, surmises, or conjectures; (3) when the
inference made by the Court of Appeals from its findings of fact is
manifestly mistaken, absurd, or impossible; (4) when there is a
grave abuse of discretion in the appreciation of facts; (5) when the
appellate court, in making its findings, went beyond the issues of
the case and such findings are contrary to the admissions of both
appellant and appellee; (6) when the judgment of the Court of
Appeals is premised on a misapprehension of facts; (7) when the
Court of Appeals failed to notice certain relevant facts which, if
properly considered, would justify a different conclusion; (8) when
the findings of fact are themselves conflicting; (9) when the
findings of fact are conclusions without citation of the specific
evidence on which they are based; and (10) when the findings of
fact of the Court of Appeals are premised on the absence of
evidence but such findings are contradicted by the evidence on
record – would appear to be clearly extant in this instance.
All given then, the appellate court did not err in its judgment
absolving PKS Shipping from liability for the loss of the DUMC
cargo.
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.
[ GR No. 194121, Jul 11, 2016 ]
TORRES-MADRID BROKERAGE v. FEB MITSUI MARINE
INSURANCE CO. +
DECISION
BRION, J.:
We resolve the petition for review on certiorari  challenging the
Court of Appeals' (CA) October 14, 2010 decision in CA-G.R. CV No.
91829. [1]
The CA affirmed the Regional Trial Court's (RTC)  decision
in Civil Case No. 01-1596, and found petitioner Torres-Madrid
Brokerage, Inc. (TMBI) and respondent Benjamin P. Manalastas
jointly and solidarily liable to respondent FEB Mitsui Marine
Insurance Co., Inc. (Mitsui) for damages from the loss of
transported cargo.
Antecedents
On October 7, 2000, a shipment of various electronic goods from
Thailand and Malaysia arrived at the Port of Manila for Sony
Philippines, Inc. (Sony). Previous to the arrival, Sony had engaged
the services of TMBI to facilitate, process, withdraw, and deliver  the
shipment from the port to its warehouse in Binan, Laguna.[2]
TMBI - who did not own any delivery trucks - subcontracted the
services of Benjamin Manalastas' company, BMT Trucking
Services (BMT),  to transport the shipment from the port to the
Binan warehouse.[3] Incidentally, TMBI notified Sony who had no
objections to the arrangement.[4]
Four BMT trucks picked up the shipment from the port at about
11:00 a.m. of October 7, 2000. However, BMT could not
immediately undertake the delivery because of the truck ban and
because the following day was a Sunday. Thus, BMT scheduled the
delivery on October 9, 2000.
In the early morning of October 9, 2000, the four trucks left BMT's
garage for Laguna.[5] However, only three trucks arrived at Sony's
Binan warehouse.
At around 12:00 noon, the truck driven by Rufo Reynaldo
Lapesura (NSF-391) was found abandoned along the Diversion
Road in Filinvest, Alabang, Muntinlupa City.[6] Both the driver and
the shipment were missing.
Later that evening, BMT's Operations Manager Melchor Manalastas
informed Victor Torres, TMBI's General Manager, of the
development.[7] They went to Muntinlupa together to inspect the
truck and to report the matter to the police.[8]
Victor Torres also filed a complaint with the National Bureau of
Investigation (NBI) against Lapesura for "hijacking." [9] The
complaint resulted in a recommendation by the NBI to the Manila
City Prosecutor's Office to prosecute Lapesura for qualified theft.
[10]
TMBI notified Sony of the loss through a letter dated October 10,
2000,[11] It also sent BMT a letter dated March 29, 2001,
demanding payment for the lost shipment. BMT refused to pay,
insisting that the goods were "hijacked."
In the meantime, Sony filed an insurance claim with the Mitsui, the
insurer of the goods. After evaluating the merits of the claim, Mitsui
paid Sony PHP7,293,386.23 corresponding to the value of the lost
goods.[12]
After being subrogated to Sony's rights, Mitsui sent TMBI a demand
letter dated August 30, 2001 for payment of the lost goods. TMBI
refused to pay Mitsui's claim. As a result, Mitsui filed a complaint
against TMBI on November 6, 2001,
TMBI, in turn, impleaded Benjamin Manalastas, the proprietor of
BMT, as a third-party defendant. TMBI alleged that BMT's driver,
Lapesura, was responsible for the theft/hijacking of the lost cargo
and claimed BMT's negligence as the proximate cause of the loss.
TMBI prayed that in the event it is held liable to Mitsui for the loss,
it should be reimbursed by BMT,
At the trial, it was revealed that BMT and TMBI have been doing
business with each other since the early 80's. It also came out that
there had been a previous hijacking incident involving Sony's cargo
in 1997, but neither Sony nor its insurer filed a complaint against
BMT or TMBI.[13]
On August 5, 2008, the RTC found TMBI and Benjamin Manalastas
jointly and solidarity liable to pay Mitsui PHP 7,293,386.23 as
actual damages, attorney's fees equivalent to 25% of the amount
claimed, and the costs of the suit.[14] The RTC held that TMBI and
Manalastas were common carriers and had acted negligently.
Both TMBI and BMT appealed the RTC's verdict.
TMBI denied that it was a common carrier required to
exercise extraordinary  diligence. It maintains that it exercised the
diligence of a good father of a family and should be absolved of
liability because the truck was "hijacked" and this was a fortuitous
event.
BMT claimed that it had exercised extraordinary diligence over the
lost shipment, and argued as well that the loss resulted from a
fortuitous event.
On October 14, 2010, the CA affirmed the RTC's decision but
reduced the award of attorney's fees to PHP 200,000.
The CA held: (1) that "hijacking" is not necessarily a fortuitous
event because the term refers to the general stealing of cargo
during transit;[15] (2) that TMBI is a common carrier engaged in
the business of transporting goods for the general public for a
fee; [16] (3) even if the "hijacking" were a fortuitous event, TMBI's
failure to observe extraordinary diligence in overseeing the cargo
and adopting security measures rendered it liable for the
loss; [17] and (4) even if TMBI had not been negligent in the
handling, transport and the delivery of the shipment, TMBI still
breached its contractual obligation to Sony when it failed to deliver
the shipment.[18]
TMBI disagreed with the CA's ruling and filed the present petition
on December 3, 2010.
The Arguments
TMBI's Petition
TMBI insists that the hijacking  of the truck was a fortuitous event.
It contests the CA's finding that neither force nor intimidation was
used in the taking of the cargo. Considering Lapesura was never
found, the Court should not discount the possibility that he was a
victim rather than a perpetrator.[19]
TMBI denies being a common carrier because it does not own a
single truck to transport its shipment and it does not offer
transport services to the public for compensation.[20] It
emphasizes that Sony knew TMBI did not have its own vehicles and
would subcontract the delivery to a third-party.
Further, TMBI now insists that the service it offered was limited to
the processing of paperwork attendant to the entry of Sony's goods.
It denies that delivery of the shipment was a part of its obligation.
[21]
TMBI solely blames BMT as it had full control and custody of the
cargo when it was lost.[22] BMT, as a common carrier, is presumed
negligent and should be responsible for the loss.
BhtT's Comment
BMT insists that it observed the required standard of care.[23] Like
the petitioner, BMT maintains that the hijacking was a fortuitous
event - a force majeure  - that exonerates it from liability.[24] It
points out that Lapesura has never been seen again and his fate
remains a mystery. BMT likewise argues that the loss of the cargo
necessarily showed that the taking was with the use of force or
intimidation.[25]
If there was any attendant negligence, BMT points the finger on
TMBI who failed to send a representative to accompany the
shipment.[26] BMT further blamed TMBI for the latter's failure to
adopt security measures to protect Sony's cargo.[27]
Mitsui's Comment
Mitsui counters that neither TMBI nor BMT alleged or proved
during the trial that the taking of the cargo was accompanied with
grave or irresistible threat, violence, or force.[28] Hence, the
incident cannot be considered "force majeure" and TMBI remains
liable for breach of contract.
Mitsui emphasizes that TMBI's theory - that force or intimidation
must have been used because Lapesura was never found - was only
raised for the first time before this Court.[29] It also discredits the
theory as a mere conjecture for lack of supporting evidence.
Mitsui adopts the CA's reasons to conclude that TMBI is a common
carrier. It also points out Victor Torres' admission during the trial
that TMBI's brokerage service includes the eventual delivery of the
cargo to the consignee.[30]
Mitsui invokes as well the legal presumption of negligence against
TMBI, pointing out that TMBI simply entrusted the cargo to BMT
without adopting any security measures despite: (1) a previous
hijacking incident, when TMBI lost Sony's cargo; and (2) TMBI's
knowledge that the cargo was worth more than 10 million pesos.
[31]
Mitsui affirms that TMBI breached the contract of carriage through
its negligent handling of the cargo, resulting in its loss.
The Court's Ruling
A brokerage may be considered a  common
carrier if it also undertakes to  deliver the
goods for its customers
Common carriers are persons, corporations, firms or associations
engaged in the business of transporting passengers or goods or
both, by land, water, or air, for compensation, offering their
services to the public.[32] By the nature of their business and for
reasons of public policy, they are bound to observe extraordinary
diligence in the vigilance over the goods and in the safety of their
passengers.[33]
In A.F. Sanchez Brokerage Inc.  v. Court of Appeals,[34]we held that a
customs broker - whose principal business is the preparation of the
correct customs declaration and the proper shipping documents -
is still considered a common carrier if it also undertakes to deliver
the goods for its customers. The law does not distinguish between
one whose principal business activity is the carrying of goods and
one who undertakes this task only as an ancillary activity.[35] This
ruling has been reiterated in Schmitz Transport &  Brokerage
Corp.  v. Transport Venture, Inc.,[36]  Loadmasters Customs Services,
Inc. v. Glodel Brokerage Corporation,[37] and Wesrwind
Shipping  Corporation v. UCPB General Insurance Co., Inc.[38]
Despite TMBI's present denials, we find that the delivery of the
goods is an integral, albeit ancillary, part of its brokerage services.
TMBI admitted that it was contracted to facilitate, process, and
clear the shipments from the customs authorities, withdraw them
from the pier, then transport and deliver them to Sony's warehouse
in Laguna.[39]
Further, TMBI's General Manager Victor Torres described the
nature of its services as follows:
ATTY. VIRTUDAZO: Could you please tell the
court what is the nature of the business of
[TMBI]?
Witness MR. Victor Torres of Torres
Madrid: We are engaged in customs brokerage
business. We acquire the release documents
from the Bureau of Customs and eventually
deliver the cargoes to the consignee's
warehouse and we are engaged in that kind of
business, sir. [40]
That TMBI does not own trucks and has to subcontract the delivery
of its clients' goods, is immaterial. As long as an entity holds itself
to the public for the transport of goods as a business, it is
considered a common carrier regardless of whether it owns the
vehicle used or has to actually hire one.[41]
Lastly, TMBI's customs brokerage services - including the
transport/delivery of the cargo - are available to anyone willing to
pay its fees. Given these circumstances, we find it undeniable that
TMBI is a common carrier.
Consequently, TMBI should be held responsible for the loss,
destruction, or deterioration of the goods it transports unless it
results from:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act of omission of the shipper or owner of
the goods;
(4) The character of the goods or defects in the
packing or in the containers;
(5) Order or act of competent public authority.
[42]
For all other cases - such as theft or robbery - a common carrier is
presumed to have been at fault or to have acted negligently, unless
it can prove that it observed extraordinary diligence.[43]
Simply put, the theft or the robbery of the goods is not considered a
fortuitous event or a force majeure. Nevertheless, a common
carrier may absolve itself of liability for a resulting loss: (1) if it
proves that it exercised extraordinary  diligence in transporting and
safekeeping the goods;[44] or (2) if it stipulated with the
shipper/owner of the goods to limit its liability for the loss,
destruction, or deterioration of the goods to a degree less than
extraordinary diligence.[45]
However, a stipulation diminishing or dispensing with the common
carrier's liability for acts committed by thieves or robbers who do
not act with grave or irresistible threat, violence, or force is void
under Article 1745 of the Civil Code for being contrary to public
policy. [46]Jurisprudence, too, has expanded Article 1734's five
exemptions. De Guzman v. Court of  Appeals[47] interpreted Article
1745 to mean that a robbery attended by "grave or irresistible
threat, violence or force" is a fortuitous event that absolves the
common carrier from liability.
In the present case, the shipper, Sony, engaged the services of
TMBI, a common carrier, to facilitate the release of its shipment
and deliver the goods to its warehouse. In turn, TMBI
subcontracted a portion of its obligation - the delivery of the cargo -
to another common carrier, BMT.
Despite the subcontract, TMBI remained responsible for the cargo.
Under Article 1736, a common carrier's extraordinary
responsibility over the shipper's goods lasts from the time these
goods are unconditionally placed in the possession of, and received
by, the carrier for transportation, until they are delivered,
actually or constructively, by the carrier to the consignee. [48]
That the cargo disappeared during transit while under the custody
of BMT - TMBI's subcontractor - did not diminish nor terminate
TMBFs responsibility over the cargo. Article 1735 of the Civil Code
presumes that it was at fault.
Instead of showing that it had acted with extraordinary
diligence, TMBI simply argued that it was not a common carrier
bound to observe extraordinary diligence. Its failure to successfully
establish this premise carries with it the presumption of fault or
negligence, thus rendering it liable to Sony/Mitsui for breach of
contract.
Specifically, TMBI's current theory - that the hijacking was
attended by force or intimidation - is untenable.
First,  TMBI alleged in its Third Party Complaint against BMT that
Lapesura was responsible for hijacking the shipment.[49] Further,
Victor Torres filed a criminal complaint against Lapesura with the
NBI.[50] These actions constitute direct and binding admissions
that Lapesura stole the cargo. Justice and fair play dictate that TMBI
should not be allowed to change its legal theory on appeal.
Second, neither TMBI nor BMT succeeded in substantiating this
theory through evidence. Thus, the theory remained an
unsupported allegation no better than speculations and
conjectures. The CA therefore correctly disregarded the defense
of force majeure.
TMBI and BMT are not solidarity liable
to Mitsui 
We disagree with the lower courts" ruling that TMBI and BMT are
solidarity liable to Mitsui for the loss as joint tortfeasors. The ruling
was based on Article 2194 of the Civil Code:
Art. 2194. The responsibility of two or more
persons who are liable for quasi-delict is
solidary.
Notably, TMBI's liability to Mitsui does not stem from a quasi-
delict (culpa aquiliana)  but from its breach of contract (culpa
contractual).  The tie that binds TMBI with Mitsui is contractual,
albeit one that passed on to Mitsui as a result of TMBI's contract of
carriage with Sony to which Mitsui had been subrogated as an
insurer who had paid Sony's insurance claim. The legal reality that
results from this contractual tie precludes the application of quasi-
delict based Article 2194.
A third party may recover from a
common carrier for quasi-delict
but must prove actual n  egligence
We likewise disagree with the finding that BMT is directly liable to
Sony/Mitsui for the loss of the cargo. While it is undisputed that the
cargo was lost under the actual custody of BMT (whose employee is
the primary suspect in the hijacking or robbery of the shipment),
no direct contractual relationship existed between Sony/Mitsui and
BMT. If at all, Sony/Mitsui's cause of action against BMT could only
arise from quasi-delict, as a third party suffering damage from the
action of another due to the latter's fault or negligence, pursuant to
Article 2176 of the Civil Code.[51]
We have repeatedly distinguished between an action for breach of
contract {culpa contractual)  and an action for quasi-delict (culpa
aquiliana).
In culpa contractual,  the plaintiff only needs to establish the
existence of the contract and the obligor's failure to perform his
obligation. It is not necessary for the plaintiff to prove or even
allege that the obligor's non- compliance was due to fault or
negligence because Article 1735 already presumes that the
common carrier is negligent. The common carrier can only free
itself from liability by proving that it
observed extraordinary  diligence.  It cannot discharge this liability
by shifting the blame on its agents or servants.[52]
On the other hand, the plaintiff in culpa aquiliana must clearly
establish the defendant's fault or negligence because this is the
very basis of the action.[53] Moreover, if the injury to the plaintiff
resulted from the act or omission of the defendant's employee or
servant, the defendant may absolve himself by proving that he
observed the diligence of a good father of a family to prevent the
damage,[54]
In the present case, Mitsui's action is solely premised on TMBl's
breach of contract. Mitsui did not even sue BMT, much less prove
any  negligence on its part.  If BMT has entered the picture at all, it
'is because TMBI sued it for reimbursement for the liability that
TMBI might incur from its contract of carriage with Sony/Mitsui.
Accordingly, there is no basis to directly hold BMT liable to Mitsui
for quasi-delict.
BMT is liable to TMBI for breach
of their  contract of carriage
We do not hereby say that TMBI must absorb the loss. By
subcontracting the cargo delivery to BMT, TMBI entered into its
own contract of carriage with a fellow common carrier.
The cargo was lost after its transfer to BMT's custody based on its
contract of carriage with TMBI. Following Article 1735, BMT is
presumed to be at fault. Since BMT failed to prove that it
observed extraordinary  diligence  in the performance of its
obligation to TMBI, it is liable to TMBI for breach of their contract
of carriage.
In these lights, TMBI is liable to Sony (subrogated by Mitsui) for
breaching the contract of carriage. In turn, TMBI is entitled to
reimbursement from BMT due to the latter's own breach of its
contract of carriage with TMBI. The proverbial buck stops with
BMT who may either: (a) absorb the loss, or (b) proceed after its
missing driver, the suspected culprit, pursuant to Article 2181,[55]
WHEREFORE, the Court hereby ORDERS petitioner Torres-
Madrid Brokerage, Inc. to pay the respondent FEB Mitsui Marine
Insurance Co., Inc. the following:
1. Actual damages in the amount of PHP 7,293,386.23 plus
legal interest from the time the complaint was filed until
it is fully paid;
2. Attorney's fees in the amount of PHP 200,000.00; and
3. Costs of suit.
Respondent Benjamin P. Manalastas is in
turn ORDERED to REIMBURSE Torres-Madrid Brokerage, Inc. of
the above-mentioned amounts.
SO ORDERED
G.R. No. 150157             January 25, 2007
MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES,
INC., Petitioners,
vs.
MODESTO CALAUNAN, Respondent.
DECISION
CHICO-NAZARIO, J.:
Assailed before Us is the decision 1 of the Court of Appeals in CA-
G.R. CV No. 55909 which affirmed in toto the decision 2 of the
Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case
No. D-10086, finding petitioners Mauricio Manliclic and Philippine
Rabbit Bus Lines, Inc. (PRBLI) solidarily liable to pay damages and
attorney’s fees to respondent Modesto Calaunan.
The factual antecedents are as follows:
The vehicles involved in this case are: (1) Philippine Rabbit Bus No.
353 with plate number CVD-478, owned by petitioner PRBLI and
driven by petitioner Mauricio Manliclic; and (2) owner-type jeep
with plate number PER-290, owned by respondent Modesto
Calaunan and driven by Marcelo Mendoza.
At around 6:00 to 7:00 o’clock in the morning of 12 July 1988,
respondent Calaunan, together with Marcelo Mendoza, was on his
way to Manila from Pangasinan on board his owner-type jeep. The
Philippine Rabbit Bus was likewise bound for Manila from
Concepcion, Tarlac. At approximately Kilometer 40 of the North
Luzon Expressway in Barangay Lalangan, Plaridel, Bulacan, the two
vehicles collided. The front right side of the Philippine Rabbit Bus
hit the rear left side of the jeep causing the latter to move to the
shoulder on the right and then fall on a ditch with water resulting
to further extensive damage. The bus veered to the left and stopped
7 to 8 meters from point of collision.
Respondent suffered minor injuries while his driver was unhurt.
He was first brought for treatment to the Manila Central University
Hospital in Kalookan City by Oscar Buan, the conductor of the
Philippine Rabbit Bus, and was later transferred to the Veterans
Memorial Medical Center.
By reason of such collision, a criminal case was filed before the RTC
of Malolos, Bulacan, charging petitioner Manliclic with Reckless
Imprudence Resulting in Damage to Property with Physical
Injuries, docketed as Crim. Case No. 684-M-89. Subsequently on 2
December 1991, respondent filed a complaint for damages against
petitioners Manliclic and PRBLI before the RTC of Dagupan City,
docketed as Civil Case No. D-10086. The criminal case was tried
ahead of the civil case. Among those who testified in the criminal
case were respondent Calaunan, Marcelo Mendoza and Fernando
Ramos.
In the civil case (now before this Court), the parties admitted the
following:
1. The parties agreed on the capacity of the parties to sue and be
sued as well as the venue and the identities of the vehicles
involved;
2. The identity of the drivers and the fact that they are duly
licensed;
3. The date and place of the vehicular collision;
4. The extent of the injuries suffered by plaintiff Modesto Calaunan
and the existence of the medical certificate;
5. That both vehicles were going towards the south; the private
jeep being ahead of the bus;
6. That the weather was fair and the road was well paved and
straight, although there was a ditch on the right side where the jeep
fell into.3
When the civil case was heard, counsel for respondent prayed that
the transcripts of stenographic notes (TSNs)4 of the testimonies of
respondent Calaunan, Marcelo Mendoza and Fernando Ramos in
the criminal case be received in evidence in the civil case in as
much as these witnesses are not available to testify in the civil case.
Francisco Tuliao testified that his brother-in-law, respondent
Calaunan, left for abroad sometime in November, 1989 and has not
returned since then. Rogelio Ramos took the stand and said that his
brother, Fernando Ramos, left for Amman, Jordan, to work. Rosalia
Mendoza testified that her husband, Marcelo Mendoza, left their
residence to look for a job. She narrated that she thought her
husband went to his hometown in Panique, Tarlac, when he did not
return after one month. She went to her husband’s hometown to
look for him but she was informed that he did not go
there.1awphil.net
The trial court subpoenaed the Clerk of Court of Branch 8, RTC,
Malolos, Bulacan, the court where Criminal Case No. 684-M-89 was
tried, to bring the TSNs of the testimonies of respondent
Calaunan,5 Marcelo Mendoza6 and Fernando Ramos7 in said case,
together with other documentary evidence marked therein. Instead
of the Branch Clerk of Court, it was Enrique Santos Guevara, Court
Interpreter, who appeared before the court and identified the TSNs
of the three afore-named witnesses and other pertinent documents
he had brought.8 Counsel for respondent wanted to mark other
TSNs and documents from the said criminal case to be adopted in
the instant case, but since the same were not brought to the trial
court, counsel for petitioners compromised that said TSNs and
documents could be offered by counsel for respondent as rebuttal
evidence.
For the defendants, petitioner Manliclic and bus conductor Oscar
Buan testified. The TSN9 of the testimony of Donato Ganiban,
investigator of the PRBLI, in Criminal Case No. 684-M-89 was
marked and allowed to be adopted in the civil case on the ground
that he was already dead.
Respondent further marked, among other documents, as rebuttal
evidence, the TSNs10 of the testimonies of Donato Ganiban, Oscar
Buan and petitioner Manliclic in Criminal Case No. 684-M-89.
The disagreement arises from the question: Who is to be held liable
for the collision?
Respondent insists it was petitioner Manliclic who should be liable
while the latter is resolute in saying it was the former who caused
the smash up.
The versions of the parties are summarized by the trial court as
follows:
The parties differed only on the manner the collision between the
two (2) vehicles took place. According to the plaintiff and his
driver, the jeep was cruising at the speed of 60 to 70 kilometers per
hour on the slow lane of the expressway when the Philippine
Rabbit Bus overtook the jeep and in the process of overtaking the
jeep, the Philippine Rabbit Bus hit the rear of the jeep on the left
side. At the time the Philippine Rabbit Bus hit the jeep, it was about
to overtake the jeep. In other words, the Philippine Rabbit Bus was
still at the back of the jeep when the jeep was hit. Fernando Ramos
corroborated the testimony of the plaintiff and Marcelo Mendoza.
He said that he was on another jeep following the Philippine Rabbit
Bus and the jeep of plaintiff when the incident took place. He said,
the jeep of the plaintiff overtook them and the said jeep of the
plaintiff was followed by the Philippine Rabbit Bus which was
running very fast. The bus also overtook the jeep in which he was
riding. After that, he heard a loud sound. He saw the jeep of the
plaintiff swerved to the right on a grassy portion of the road. The
Philippine Rabbit Bus stopped and they overtook the Philippine
Rabbit Bus so that it could not moved (sic), meaning they stopped
in front of the Philippine Rabbit Bus. He testified that the jeep of
plaintiff swerved to the right because it was bumped by the
Philippine Rabbit bus from behind.
Both Mauricio Manliclic and his driver, Oscar Buan admitted that
the Philippine Rabbit Bus bumped the jeep in question. However,
they explained that when the Philippine Rabbit bus was about to go
to the left lane to overtake the jeep, the latter jeep swerved to the
left because it was to overtake another jeep in front of it. Such was
their testimony before the RTC in Malolos in the criminal case and
before this Court in the instant case. [Thus, which of the two
versions of the manner how the collision took place was correct,
would be determinative of who between the two drivers was
negligent in the operation of their respective vehicles.]11
Petitioner PRBLI maintained that it observed and exercised the
diligence of a good father of a family in the selection and
supervision of its employee, specifically petitioner Manliclic.
On 22 July 1996, the trial court rendered its decision in favor of
respondent Calaunan and against petitioners Manliclic and PRBLI.
The dispositive portion of its decision reads:
WHEREFORE, judgment is rendered in favor of the plaintiff and
against the defendants ordering the said defendants to pay plaintiff
jointly and solidarily the amount of P40,838.00 as actual damages
for the towing as well as the repair and the materials used for the
repair of the jeep in question; P100,000.00 as moral damages and
another P100,000.00 as exemplary damages and P15,000.00 as
attorney’s fees, including appearance fees of the lawyer. In
addition, the defendants are also to pay costs.12
Petitioners appealed the decision via Notice of Appeal to the Court
of Appeals.13
In a decision dated 28 September 2001, the Court of Appeals,
finding no reversible error in the decision of the trial court,
affirmed it in all respects.14
Petitioners are now before us by way of petition for review
assailing the decision of the Court of Appeals. They assign as errors
the following:
I
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S QUESTIONABLE ADMISSION IN
EVIDENCE OF THE TSN’s AND OTHER
DOCUMENTS PRESENTED IN THE CRIMINAL
CASE.
II
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S RELIANCE ON THE VERSION OF THE
RESPONDENT ON HOW THE ACCIDENT
SUPPOSEDLY OCCURRED.
III
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S UNFAIR DISREGARD OF HEREIN
PETITIONER PRBL’s DEFENSE OF EXERCISE OF
DUE DILIGENCE IN THE SELECTION AND
SUPERVISION OF ITS EMPLOYEES.
IV
THE COURT OF APPEALS ERRED ON A
QUESTION OF LAW IN AFFIRMING THE TRIAL
COURT’S QUESTIONABLE AWARD OF DAMAGES
AND ATTORNEY’S FEE.
With the passing away of respondent Calaunan during the
pendency of this appeal with this Court, we granted the Motion for
the Substitution of Respondent filed by his wife, Mrs. Precila Zarate
Vda. De Calaunan, and children, Virgilio Calaunan, Carmelita
Honeycomb, Evelyn Calaunan, Marko Calaunan and Liwayway
Calaunan.15
In their Reply to respondent’s Comment, petitioners informed this
Court of a Decision16 of the Court of Appeals acquitting petitioner
Manliclic of the charge17 of Reckless Imprudence Resulting in
Damage to Property with Physical Injuries attaching thereto a
photocopy thereof.
On the first assigned error, petitioners argue that the TSNs
containing the testimonies of respondent Calaunan, 18 Marcelo
Mendoza19 and Fernando Ramos20 should not be admitted in
evidence for failure of respondent to comply with the requisites of
Section 47, Rule 130 of the Rules of Court.
For Section 47, Rule 13021 to apply, the following requisites must
be satisfied: (a) the witness is dead or unable to testify; (b) his
testimony or deposition was given in a former case or proceeding,
judicial or administrative, between the same parties or those
representing the same interests; (c) the former case involved the
same subject as that in the present case, although on different
causes of action; (d) the issue testified to by the witness in the
former trial is the same issue involved in the present case; and (e)
the adverse party had an opportunity to cross-examine the witness
in the former case.22
Admittedly, respondent failed to show the concurrence of all the
requisites set forth by the Rules for a testimony given in a former
case or proceeding to be admissible as an exception to the hearsay
rule. Petitioner PRBLI, not being a party in Criminal Case No. 684-
M-89, had no opportunity to cross-examine the three witnesses in
said case. The criminal case was filed exclusively against petitioner
Manliclic, petitioner PRBLI’s employee. The cases dealing with the
subsidiary liability of employers uniformly declare that, strictly
speaking, they are not parties to the criminal cases instituted
against their employees.23
Notwithstanding the fact that petitioner PRBLI was not a party in
said criminal case, the testimonies of the three witnesses are still
admissible on the ground that petitioner PRBLI failed to object on
their admissibility.
It is elementary that an objection shall be made at the time when an
alleged inadmissible document is offered in evidence; otherwise,
the objection shall be treated as waived, since the right to object is
merely a privilege which the party may waive. Thus, a failure to
except to the evidence because it does not conform to the statute is
a waiver of the provisions of the law. Even assuming ex gratia
argumenti that these documents are inadmissible for being
hearsay, but on account of failure to object thereto, the same may
be admitted and considered as sufficient to prove the facts therein
asserted.24 Hearsay evidence alone may be insufficient to establish
a fact in a suit but, when no objection is made thereto, it is, like any
other evidence, to be considered and given the importance it
deserves.25
In the case at bar, petitioner PRBLI did not object to the TSNs
containing the testimonies of respondent Calaunan, Marcelo
Mendoza and Fernando Ramos in the criminal case when the same
were offered in evidence in the trial court. In fact, the TSNs of the
testimonies of Calaunan and Mendoza were admitted by both
petitioners.26 Moreover, petitioner PRBLI even offered in evidence
the TSN containing the testimony of Donato Ganiban in the criminal
case. If petitioner PRBLI argues that the TSNs of the testimonies of
plaintiff’s witnesses in the criminal case should not be admitted in
the instant case, why then did it offer the TSN of the testimony of
Ganiban which was given in the criminal case? It appears that
petitioner PRBLI wants to have its cake and eat it too. It cannot
argue that the TSNs of the testimonies of the witnesses of the
adverse party in the criminal case should not be admitted and at
the same time insist that the TSN of the testimony of the witness
for the accused be admitted in its favor. To disallow admission in
evidence of the TSNs of the testimonies of Calaunan, Marcelo
Mendoza and Fernando Ramos in the criminal case and to admit
the TSN of the testimony of Ganiban would be unfair.
We do not subscribe to petitioner PRBLI’s argument that it will be
denied due process when the TSNs of the testimonies of Calaunan,
Marcelo Mendoza and Fernando Ramos in the criminal case are to
be admitted in the civil case. It is too late for petitioner PRBLI to
raise denial of due process in relation to Section 47, Rule 130 of the
Rules of Court, as a ground for objecting to the admissibility of the
TSNs. For failure to object at the proper time, it waived its right to
object that the TSNs did not comply with Section 47.
27
In Mangio v. Court of Appeals,  this Court, through Associate Justice
Reynato S. Puno,28 admitted in evidence a TSN of the testimony of a
witness in another case despite therein petitioner’s assertion that
he would be denied due process. In admitting the TSN, the Court
ruled that the raising of denial of due process in relation to Section
47, Rule 130 of the Rules of Court, as a ground for objecting to the
admissibility of the TSN was belatedly done. In so doing, therein
petitioner waived his right to object based on said ground.
Petitioners contend that the documents in the criminal case should
not have been admitted in the instant civil case because Section 47
of Rule 130 refers only to "testimony or deposition." We find such
contention to be untenable. Though said section speaks only of
testimony and deposition, it does not mean that documents from a
former case or proceeding cannot be admitted. Said documents can
be admitted they being part of the testimonies of witnesses that
have been admitted. Accordingly, they shall be given the same
weight as that to which the testimony may be entitled.29
On the second assigned error, petitioners contend that the version
of petitioner Manliclic as to how the accident occurred is more
credible than respondent’s version. They anchor their contention
on the fact that petitioner Manliclic was acquitted by the Court of
Appeals of the charge of Reckless Imprudence Resulting in Damage
to Property with Physical Injuries.
To be resolved by the Court is the effect of petitioner Manliclic’s
acquittal in the civil case.
From the complaint, it can be gathered that the civil case for
damages was one arising from, or based on, quasi-
delict.30 Petitioner Manliclic was sued for his negligence or reckless
imprudence in causing the collision, while petitioner PRBLI was
sued for its failure to exercise the diligence of a good father in the
selection and supervision of its employees, particularly petitioner
Manliclic. The allegations read:
"4. That sometime on July 12, 1988 at around 6:20 A.M. plaintiff
was on board the above-described motor vehicle travelling at a
moderate speed along the North Luzon Expressway heading South
towards Manila together with MARCELO MENDOZA, who was then
driving the same;
"5. That approximately at kilometer 40 of the North Luzon Express
Way, the above-described motor vehicle was suddenly bumped
from behind by a Philippine Rabbit Bus with Body No. 353 and with
plate No. CVD 478 then being driven by one Mauricio Manliclic of
San Jose, Concepcion, Tarlac, who was then travelling recklessly at
a very fast speed and had apparently lost control of his vehicle;
"6. That as a result of the impact of the collision the above-
described motor vehicle was forced off the North Luzon Express
Way towards the rightside where it fell on its driver’s side on a
ditch, and that as a consequence, the above-described motor
vehicle which maybe valued at EIGHTY THOUSAND PESOS
(P80,000) was rendered a total wreck as shown by pictures to be
presented during the pre-trial and trial of this case;
"7. That also as a result of said incident, plaintiff sustained bodily
injuries which compounded plaintiff’s frail physical condition and
required his hospitalization from July 12, 1988 up to and until July
22, 1988, copy of the medical certificate is hereto attached as
Annex "A" and made an integral part hereof;
"8. That the vehicular collision resulting in the total wreckage of
the above-described motor vehicle as well as bodily (sic) sustained
by plaintiff, was solely due to the reckless imprudence of the
defendant driver Mauricio Manliclic who drove his Philippine
Rabbit Bus No. 353 at a fast speed without due regard or
observance of existing traffic rules and regulations;
"9. That defendant Philippine Rabbit Bus Line Corporation failed to
exercise the diligence of a good father of (sic) family in the
selection and supervision of its drivers; x x x"31
Can Manliclic still be held liable for the collision and be found
negligent notwithstanding the declaration of the Court of Appeals
that there was an absence of negligence on his part?
In exonerating petitioner Manliclic in the criminal case, the Court of
Appeals said:
To the following findings of the court a quo, to wit: that accused-
appellant was negligent "when the bus he was driving bumped the
jeep from behind"; that "the proximate cause of the accident was
his having driven the bus at a great speed while closely following
the jeep"; x x x
We do not agree.
The swerving of Calaunan’s jeep when it tried to overtake the
vehicle in front of it was beyond the control of accused-appellant.
 xxxx
Absent evidence of negligence, therefore, accused-appellant cannot
be held liable for Reckless Imprudence Resulting in Damage to
Property with Physical Injuries as defined in Article 365 of the
Revised Penal Code.32
From the foregoing declaration of the Court of Appeals, it appears
that petitioner Manliclic was acquitted not on reasonable doubt,
but on the ground that he is not the author of the act complained of
which is based on Section 2(b) of Rule 111 of the Rules of Criminal
Procedure which reads:
(b) Extinction of the penal action does not carry with it extinction
of the civil, unless the extinction proceeds from a declaration in a
final judgment that the fact from which the civil might arise did not
exist.
In spite of said ruling, petitioner Manliclic can still be held liable for
the mishap. The afore-quoted section applies only to a civil action
arising from crime or ex delicto and not to a civil action arising
from quasi-delict or culpa aquiliana. The extinction of civil liability
referred to in Par. (e) of Section 3, Rule 111 [now Section 2 (b) of
Rule 111], refers exclusively to civil liability founded on Article 100
of the Revised Penal Code, whereas the civil liability for the same
act considered as a quasi-delict only and not as a crime is not
extinguished even by a declaration in the criminal case that the
criminal act charged has not happened or has not been committed
by the accused.33
A quasi-delict or culpa aquiliana is a separate legal institution
under the Civil Code with a substantivity all its own, and
individuality that is entirely apart and independent from a delict or
crime – a distinction exists between the civil liability arising from a
crime and the responsibility for quasi-delicts or culpa extra-
contractual. The same negligence causing damages may produce
civil liability arising from a crime under the Penal Code, or create
an action for quasi-delicts or culpa extra-contractual under the
Civil Code.34 It is now settled that acquittal of the accused, even if
based on a finding that he is not guilty, does not carry with it the
extinction of the civil liability based on quasi delict.35
In other words, if an accused is acquitted based on reasonable
doubt on his guilt, his civil liability arising from the crime may be
proved by preponderance of evidence only. However, if an accused
is acquitted on the basis that he was not the author of the act or
omission complained of (or that there is declaration in a final
judgment that the fact from which the civil might arise did not
exist), said acquittal closes the door to civil liability based on the
crime or ex delicto. In this second instance, there being no crime or
delict to speak of, civil liability based thereon or ex delicto is not
possible. In this case, a civil action, if any, may be instituted on
grounds other than the delict complained of.
As regards civil liability arising from quasi-delict or culpa aquiliana,
same will not be extinguished by an acquittal, whether it be on
ground of reasonable doubt or that accused was not the author of
the act or omission complained of (or that there is declaration in a
final judgment that the fact from which the civil liability might arise
did not exist). The responsibility arising from fault or negligence in
a quasi-delict is entirely separate and distinct from the civil liability
arising from negligence under the Penal Code.36 An acquittal or
conviction in the criminal case is entirely irrelevant in the civil
case37 based on quasi-delict or culpa aquiliana.
Petitioners ask us to give credence to their version of how the
collision occurred and to disregard that of respondent’s. Petitioners
insist that while the PRBLI bus was in the process of overtaking
respondent’s jeep, the latter, without warning, suddenly swerved
to the left (fast) lane in order to overtake another jeep ahead of it,
thus causing the collision.
As a general rule, questions of fact may not be raised in a petition
for review. The factual findings of the trial court, especially when
affirmed by the appellate court, are binding and conclusive on the
Supreme Court.38 Not being a trier of facts, this Court will not allow
a review thereof unless:
(1) the conclusion is a finding grounded entirely on speculation,
surmise and conjecture; (2) the inference made is manifestly
mistaken; (3) there is grave abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) the Court of Appeals went beyond the issues of the
case and its findings are contrary to the admissions of both
appellant and appellees; (7) the findings of fact of the Court of
Appeals are contrary to those of the trial court; (8) said findings of
fact are conclusions without citation of specific evidence on which
they are based; (9) the facts set forth in the petition as well as in
the petitioner's main and reply briefs are not disputed by the
respondents; and (10) the findings of fact of the Court of Appeals
are premised on the supposed absence of evidence and
contradicted by the evidence on record.39
After going over the evidence on record, we do not find any of the
exceptions that would warrant our departure from the general
rule. We fully agree in the finding of the trial court, as affirmed by
the Court of Appeals, that it was petitioner Manliclic who was
negligent in driving the PRBLI bus which was the cause of the
collision. In giving credence to the version of the respondent, the
trial court has this say:
x x x Thus, which of the two versions of the manner how the
collision took place was correct, would be determinative of who
between the two drivers was negligent in the operation of their
respective vehicle.
In this regard, it should be noted that in the statement of Mauricio
Manliclic (Exh. 15) given to the Philippine Rabbit Investigator CV
Cabading no mention was made by him about the fact that the
driver of the jeep was overtaking another jeep when the collision
took place. The allegation that another jeep was being overtaken by
the jeep of Calaunan was testified to by him only in Crim. Case No.
684-M-89 before the Regional Trial Court in Malolos, Bulacan and
before this Court. Evidently, it was a product of an afterthought on
the part of Mauricio Manliclic so that he could explain why he
should not be held responsible for the incident. His attempt to veer
away from the truth was also apparent when it would be
considered that in his statement given to the Philippine Rabbit
Investigator CV Cabading (Exh. 15), he alleged that the Philippine
Rabbit Bus bumped the jeep of Calaunan while the Philippine
Rabbit Bus was behind the said jeep. In his testimony before the
Regional Trial Court in Malolos, Bulacan as well as in this Court, he
alleged that the Philippine Rabbit Bus was already on the left side
of the jeep when the collision took place. For this inconsistency
between his statement and testimony, his explanation regarding
the manner of how the collision between the jeep and the bus took
place should be taken with caution. It might be true that in the
statement of Oscar Buan given to the Philippine Rabbit Investigator
CV Cabading, it was mentioned by the former that the jeep of
plaintiff was in the act of overtaking another jeep when the
collision between the latter jeep and the Philippine Rabbit Bus took
place. But the fact, however, that his statement was given on July
15, 1988, one day after Mauricio Manliclic gave his statement
should not escape attention. The one-day difference between the
giving of the two statements would be significant enough to
entertain the possibility of Oscar Buan having received legal advise
before giving his statement. Apart from that, as between his
statement and the statement of Manliclic himself, the statement of
the latter should prevail. Besides, in his Affidavit of March 10, 1989,
(Exh. 14), the unreliability of the statement of Oscar Buan (Exh. 13)
given to CV Cabading rear its "ugly head" when he did not mention
in said affidavit that the jeep of Calaunan was trying to overtake
another jeep when the collision between the jeep in question and
the Philippine Rabbit bus took place.
xxxx
If one would believe the testimony of the defendant, Mauricio
Manliclic, and his conductor, Oscar Buan, that the Philippine Rabbit
Bus was already somewhat parallel to the jeep when the collision
took place, the point of collision on the jeep should have been
somewhat on the left side thereof rather than on its rear.
Furthermore, the jeep should have fallen on the road itself rather
than having been forced off the road. Useless, likewise to
emphasize that the Philippine Rabbit was running very fast as
testified to by Ramos which was not controverted by the
defendants.40
Having ruled that it was petitioner Manliclic’s negligence that
caused the smash up, 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. 41 Under
Article 218042 of the New Civil Code, when an injury is caused by
the negligence of the employee, there instantly arises a
presumption of law that there was negligence on the part of the
master or employer either in the selection of the servant or
employee, or in supervision over him after selection or both. The
liability of the employer under Article 2180 is direct and
immediate; it is not conditioned upon prior recourse against the
negligent employee and a prior showing of the insolvency of such
employee. Therefore, it is incumbent upon the private respondents
to prove that they exercised the diligence of a good father of a
family in the selection and supervision of their employee.43
In the case at bar, petitioner PRBLI maintains that it had shown
that it exercised the required diligence in the selection and
supervision of its employees, particularly petitioner Manliclic. In
the matter of selection, it showed the screening process that
petitioner Manliclic underwent before he became a regular driver.
As to the exercise of due diligence in the supervision of its
employees, it argues that presence of ready investigators (Ganiban
and Cabading) is sufficient proof that it exercised the required due
diligence in the supervision of its employees.
In the selection of prospective employees, employers are required
to examine them as to their qualifications, experience and service
records. In the supervision of employees, the employer must
formulate standard operating procedures, monitor their
implementation and impose disciplinary measures for the breach
thereof. To fend off vicarious liability, employers must submit
concrete proof, including documentary evidence, that they
complied with everything that was incumbent on them.44
In Metro Manila Transit Corporation v. Court of Appeals, 45 it was
explained that:
Due diligence in the supervision of employees on the other hand,
includes the formulation of suitable rules and regulations for the
guidance of employees and the issuance of proper instructions
intended for the protection of the public and persons with whom
the employer has relations through his or its employees and the
imposition of necessary disciplinary measures upon employees in
case of breach or as may be warranted to ensure the performance
of acts indispensable to the business of and beneficial to their
employer. To this, we add that actual implementation and
monitoring of consistent compliance with said rules should be the
constant concern of the employer, acting through dependable
supervisors who should regularly report on their supervisory
functions.
In order that the defense of due diligence in the selection and
supervision of employees may be deemed sufficient and plausible,
it is not enough to emptily invoke the existence of said company
guidelines and policies on hiring and supervision. As the negligence
of the employee gives rise to the presumption of negligence on the
part of the employer, the latter has the burden of proving that it has
been diligent not only in the selection of employees but also in the
actual supervision of their work. The mere allegation of the
existence of hiring procedures and supervisory policies, without
anything more, is decidedly not sufficient to overcome such
presumption.
We emphatically reiterate our holding, as a warning to all
employers, that "the formulation of various company policies on
safety without showing that they were being complied with is not
sufficient to exempt petitioner from liability arising from
negligence of its employees. It is incumbent upon petitioner to
show that in recruiting and employing the erring driver the
recruitment procedures and company policies on efficiency and
safety were followed." x x x.
The trial court found that petitioner PRBLI exercised the diligence
of a good father of a family in the selection but not in the
supervision of its employees. It expounded as follows:
From the evidence of the defendants, it seems that the Philippine
Rabbit Bus Lines has a very good procedure of recruiting its driver
as well as in the maintenance of its vehicles. There is no evidence
though that it is as good in the supervision of its personnel. There
has been no iota of evidence introduced by it that there are rules
promulgated by the bus company regarding the safe operation of
its vehicle and in the way its driver should manage and operate the
vehicles assigned to them. There is no showing that somebody in
the bus company has been employed to oversee how its driver
should behave while operating their vehicles without courting
incidents similar to the herein case. In regard to supervision, it is
not difficult to observe that the Philippine Rabbit Bus Lines, Inc. has
been negligent as an employer and it should be made responsible
for the acts of its employees, particularly the driver involved in this
case.
We agree. The presence of ready investigators after the occurrence
of the accident is not enough to exempt petitioner PRBLI from
liability arising from the negligence of petitioner Manliclic. Same
does not comply with the guidelines set forth in the cases above-
mentioned. The presence of the investigators after the accident is
not enough supervision. Regular supervision of employees, that is,
prior to any accident, should have been shown and established.
This, petitioner failed to do. The lack of supervision can further be
seen by the fact that there is only one set of manual containing the
rules and regulations for all the drivers of PRBLI. 46 How then can
all the drivers of petitioner PRBLI know and be continually
informed of the rules and regulations when only one manual is
being lent to all the drivers?
For failure to adduce proof that it exercised the diligence of a good
father of a family in the selection and supervision of its employees,
petitioner PRBLI is held solidarily responsible for the damages
caused by petitioner Manliclic’s negligence.
We now go to the award of damages. The trial court correctly
awarded the amount of P40,838.00 as actual damages representing
the amount paid by respondent for the towing and repair of his
jeep.47 As regards the awards for moral and exemplary damages,
same, under the circumstances, must be modified. The P100,000.00
awarded by the trial court as moral damages must be reduced
to P50,000.00.48 Exemplary damages are imposed by way of
example or correction for the public good.49 The amount awarded
by the trial court must, likewise, be lowered to P50,000.00.50 The
award of P15,000.00 for attorney’s fees and expenses of litigation is
in order and authorized by law.51
WHEREFORE, premises considered, the instant petition for review
is DENIED. The decision of the Court of Appeals in CA-G.R. CV No.
55909 is AFFIRMED with the MODIFICATION that (1) the award of
moral damages shall be reduced to P50,000.00; and (2) the award
of exemplary damages shall be lowered to P50,000.00. Costs
against petitioners.
SO ORDERED.
G.R. No. 166640               July 31, 2009
HERMINIO MARIANO, JR., Petitioner,
vs.
ILDEFONSO C. CALLEJAS and EDGAR DE BORJA, Respondents.
DECISION
PUNO, C.J.:
On appeal are the Decision1 and Resolution2 of the Court of Appeals
in CA-G.R. CV No. 66891, dated May 21, 2004 and January 7, 2005
respectively, which reversed the Decision3 of the Regional Trial
Court (RTC) of Quezon City, dated September 13, 1999, which
found respondents jointly and severally liable to pay petitioner
damages for the death of his wife.
First, the facts:
Petitioner Herminio Mariano, Jr. is the surviving spouse of Dr.
Frelinda Mariano who was a passenger of a Celyrosa Express bus
bound for Tagaytay when she met her death. Respondent Ildefonso
C. Callejas is the registered owner of Celyrosa Express, while
respondent Edgar de Borja was the driver of the bus on which the
deceased was a passenger.
At around 6:30 p.m. on November 12, 1991, along Aguinaldo
Highway, San Agustin, Dasmariñ as, Cavite, the Celyrosa Express
bus, carrying Dr. Mariano as its passenger, collided with an Isuzu
truck with trailer bearing plate numbers PJH 906 and TRH 531. The
passenger bus was bound for Tagaytay while the trailer truck came
from the opposite direction, bound for Manila. The trailer truck
bumped the passenger bus on its left middle portion. Due to the
impact, the passenger bus fell on its right side on the right shoulder
of the highway and caused the death of Dr. Mariano and physical
injuries to four other passengers. Dr. Mariano was 36 years old at
the time of her death. She left behind three minor children, aged
four, three and two years.
Petitioner filed a complaint for breach of contract of carriage and
damages against respondents for their failure to transport his wife
and mother of his three minor children safely to her destination.
Respondents denied liability for the death of Dr. Mariano. They
claimed that the proximate cause of the accident was the
recklessness of the driver of the trailer truck which bumped their
bus while allegedly at a halt on the shoulder of the road in its
rightful lane. Thus, respondent Callejas filed a third-party
complaint against Liong Chio Chang, doing business under the
name and style of La Perla Sugar Supply, the owner of the trailer
truck, for indemnity in the event that he would be held liable for
damages to petitioner.lavvph!l
4
Other cases were filed. Callejas filed a complaint,  docketed as Civil
Case No. NC-397 before the RTC of Naic, Cavite, against La Perla
Sugar Supply and Arcadio Arcilla, the truck driver, for damages he
incurred due to the vehicular accident. On September 24, 1992, the
said court dismissed the complaint against La Perla Sugar Supply
for lack of evidence. It, however, found Arcilla liable to pay Callejas
the cost of the repairs of his passenger bus, his lost earnings,
exemplary damages and attorney’s fees.5
A criminal case, Criminal Case No. 2223-92, was also filed against
truck driver Arcilla in the RTC of Imus, Cavite. On May 3, 1994, the
said court convicted truck driver Arcadio Arcilla of the crime of
reckless imprudence resulting to homicide, multiple slight physical
injuries and damage to property.6
In the case at bar, the trial court, in its Decision dated September
13, 1999, found respondents Ildefonso Callejas and Edgar de Borja,
together with Liong Chio Chang, jointly and severally liable to pay
petitioner damages and costs of suit. The dispositive portion of the
Decision reads:
ACCORDINGLY, the defendants are ordered to pay as follows:
1. The sum of ₱50,000.00 as civil indemnity for the loss of life;
2. The sum of ₱40,000.00 as actual and compensatory damages;
3. The sum of ₱1,829,200.00 as foregone income;
4. The sum of ₱30,000.00 as moral damages;
5. The sum of ₱20,000.00 as exemplary damages;
6. The costs of suit.
SO ORDERED.7
Respondents Callejas and De Borja appealed to the Court of
Appeals, contending that the trial court erred in holding them
guilty of breach of contract of carriage.
On May 21, 2004, the Court of Appeals reversed the decision of the
trial court. It reasoned:
. . . the presumption of fault or negligence against the carrier is only
a disputable presumption. It gives in where contrary facts are
established proving either that the carrier had exercised the degree
of diligence required by law or the injury suffered by the passenger
was due to a fortuitous event. Where, as in the instant case, the
injury sustained by the petitioner was in no way due to any defect
in the means of transport or in the method of transporting or to the
negligent or wilful acts of private respondent's employees, and
therefore involving no issue of negligence in its duty to provide safe
and suitable cars as well as competent employees, with the injury
arising wholly from causes created by strangers over which the
carrier had no control or even knowledge or could not have
prevented, the presumption is rebutted and the carrier is not and
ought not to be held liable. To rule otherwise would make the
common carrier the insurer of the absolute safety of its passengers
which is not the intention of the lawmakers.8
The dispositive portion of the Decision reads:
WHEREFORE, the decision appealed from, insofar as it found
defendants-appellants Ildefonso Callejas and Edgar de Borja liable
for damages to plaintiff-appellee Herminio E. Mariano, Jr., is
REVERSED and SET ASIDE and another one entered absolving
them from any liability for the death of Dr. Frelinda Cargo
Mariano.9
The appellate court also denied the motion for reconsideration
filed by petitioner.
Hence, this appeal, relying on the following ground:
THE DECISION OF THE HONORABLE COURT OF APPEALS, SPECIAL
FOURTEENTH DIVISION IS NOT IN ACCORD WITH THE FACTUAL
BASIS OF THE CASE.10
The following are the provisions of the Civil Code pertinent to the
case at bar:
ART. 1733. Common carriers, from the nature of
their business and for reasons of public policy,
are bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of
the passengers transported by them, according
to all the circumstances of each case.
ART. 1755. 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 a due regard for
all the circumstances.
ART. 1756. In case of death of or injuries to
passengers, common carriers are presumed to
have been at fault or to have acted negligently,
unless they prove that they observed
extraordinary diligence as prescribed in articles
1733 and 1755.
In accord with the above provisions, Celyrosa Express, a common
carrier, through its driver, respondent De Borja, and its registered
owner, respondent Callejas, has the express obligation "to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with a due
regard for all the circumstances,"11 and to observe extraordinary
diligence in the discharge of its duty. The death of the wife of the
petitioner in the course of transporting her to her destination gave
rise to the presumption of negligence of the carrier. To overcome
the presumption, respondents have to show that they observed
extraordinary diligence in the discharge of their duty, or that the
accident was caused by a fortuitous event.
This Court interpreted the above quoted provisions in Pilapil v.
Court of Appeals.12 We elucidated:
While the law requires the highest degree of diligence from
common carriers in the safe transport of their passengers and
creates a presumption of negligence against them, it does not,
however, make the carrier an insurer of the absolute safety of its
passengers.
Article 1755 of the Civil Code qualifies the duty of extraordinary
care, vigilance and precaution in the carriage of passengers by
common carriers to only such as human care and foresight can
provide. What constitutes compliance with said duty is adjudged
with due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or
negligence on the part of the common carrier when its passenger is
injured, merely relieves the latter, for the time being, from
introducing evidence to fasten the negligence on the former,
because the presumption stands in the place of evidence. Being a
mere presumption, however, the same is rebuttable by proof that
the common carrier had exercised extraordinary diligence as
required by law in the performance of its contractual obligation, or
that the injury suffered by the passenger was solely due to a
fortuitous event.
In fine, we can only infer from the law the intention of the Code
Commission and Congress to curb the recklessness of drivers and
operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business
of a transportation company makes it an insurer of the passenger's
safety, but that its liability for personal injuries sustained by its
passenger rests upon its negligence, its failure to exercise the
degree of diligence that the law requires.
In the case at bar, petitioner cannot succeed in his contention that
respondents failed to overcome the presumption of negligence
against them. The totality of evidence shows that the death of
petitioner’s spouse was caused by the reckless negligence of the
driver of the Isuzu trailer truck which lost its brakes and bumped
the Celyrosa Express bus, owned and operated by respondents.
First, we advert to the sketch prepared by PO3 Magno S. de Villa,
who investigated the accident. The sketch13 shows the passenger
bus facing the direction of Tagaytay City and lying on its right side
on the shoulder of the road, about five meters away from the point
of impact. On the other hand, the trailer truck was on the opposite
direction, about 500 meters away from the point of impact. PO3 De
Villa stated that he interviewed De Borja, respondent driver of the
passenger bus, who said that he was about to unload some
passengers when his bus was bumped by the driver of the trailer
truck that lost its brakes. PO3 De Villa checked out the trailer truck
and found that its brakes really failed. He testified before the trial
court, as follows:
ATTY. ESTELYDIZ:
q You pointed to the Isuzu truck beyond the point of impact. Did
you investigate why did (sic) the Isuzu truck is beyond the point of
impact?
a Because the truck has no brakes.
COURT:
q What is the distance between that circle which is marked as Exh.
1-c to the place where you found the same?
a More or less 500 meters.
q Why did you say that the truck has no brakes?
a I tested it.
q And you found no brakes?
a Yes, sir.
xxx
q When you went to the scene of accident, what was the position of
Celyrosa bus?
a It was lying on its side.
COURT:
q Right side or left side?
a Right side.
ATTY. ESTELYDIZ:
q On what part of the road was it lying?
a On the shoulder of the road.
COURT:
q How many meters from the point of impact?
a Near, about 5 meters.14
His police report bolsters his testimony and states:
Said vehicle 1 [passenger bus] was running from Manila toward
south direction when, in the course of its travel, it was hit and
bumped by vehicle 2 [truck with trailer] then running fast from
opposite direction, causing said vehicle 1 to fall on its side on the
road shoulder, causing the death of one and injuries of some
passengers thereof, and its damage, after collission (sic), vehicle 2
continiously (sic) ran and stopped at approximately 500 meters
away from the piont (sic) of impact.15
In fine, the evidence shows that before the collision, the passenger
bus was cruising on its rightful lane along the Aguinaldo Highway
when the trailer truck coming from the opposite direction, on full
speed, suddenly swerved and encroached on its lane, and bumped
the passenger bus on its left middle portion. Respondent driver De
Borja had every right to expect that the trailer truck coming from
the opposite direction would stay on its proper lane. He was not
expected to know that the trailer truck had lost its brakes. The
swerving of the trailer truck was abrupt and it was running on a
fast speed as it was found 500 meters away from the point of
collision. Secondly, any doubt as to the culpability of the driver of
the trailer truck ought to vanish when he pleaded guilty to the
charge of reckless imprudence resulting to multiple slight physical
injuries and damage to property in Criminal Case No. 2223-92,
involving the same incident.1avvph!1
IN VIEW WHEREOF, the petition is DENIED. The Decision dated
May 21, 2004 and the Resolution dated January 7, 2005 of the
Court of Appeals in CA-G.R. CV No. 66891 are AFFIRMED.
SO ORDERED.
G.R. No. 71137 October 5, 1989
SPOUSES FEDERICO FRANCO and FELICISIMA R.
FRANCO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, ANTONIO REYES, MRS.
SUSAN CHUAY and LOLITA LUGUE respondents.
FERNAN, C.J.:
The instant petition for review of a decision of the Court of Appeals
deals mainly with the nature of an employer's liability for his
employee's negligent act.
At about 7:30 in the evening of October 18, 1974, Macario Yuro
swerved the northbound Franco Bus with Plate No. XY320-PUB he
was driving to the left to avoid hitting a truck with a trailer parked
facing north along the cemented pavement of the MacArthur
Highway at Barrio Talaga, Capas Tarlac, thereby taking the lane of
an incoming Isuzu Mini Bus bearing Plate No. YL-735 being driven
by one Magdaleno Lugue and making a collision between the two
(2) vehicles an unavoidable and disastrous eventuality.
Dragged fifteen (15) meters from the point of impact (midway the
length of the parked truck with trailer), the mini bus landed right
side down facing south in the canal of the highway, a total wreck.
The Franco Bus was also damaged but not as severely. The collision
resulted in the deaths of the two (2) drivers, Macario Yuro and
Magdaleno Lugue, and two (2) passengers of the mini bus, Romeo
Bue and Fernando Chuay.
Consequently, Antonio Reyes, the registered owner of the Isuzu
Mini Bus, Mrs. Susan Chuay, the wife of victim Fernando Chuay, and
Mrs. Lolita Lugue, the wife of driver-victim Magdaleno Lugue, filed
an action for damages through reckless imprudence before the
Court of First Instance of Pampanga in Angeles City, Branch IV,
docketed as Civil Case No. 2154 against Mr. & Mrs. Federico Franco,
the owners and operators of the Franco Transportation Company.
The complaint alleged that: (a) the recklessness and imprudence of
the Franco Bus driver caused the collision which resulted in his
own death and that of the mini bus driver and two (2) other
passengers thereof; (b) that as a consequence of the vehicular
mishap, the Isuzu Mini Bus became a total wreck resulting in actual
damages amounting to P50,000.00 and the loss of an average net
income of P120.00 daily or P3,600.00 monthly multiplied by a
minimum of one more year of serviceability of said mini bus or
P40,200.00; and, (c) that in view of the death of the three (3)
passengers aforementioned, the heirs of each should be awarded a
minimum of P12,000.00 and the expected average income of
P6,000.00 each of the driver and one of the passengers and
P12,000.00 of the Chinese businessman passenger.
In answer to the complaint, defendants set up, among others, the
affirmative defense that as owners and operators of the Franco
Transportation Company, they exercised due diligence in the
selection and supervision of all their employees, including the
deceased driver Macario Yuro.
Said defense was, however, rejected by the trial court in its
decision 1 dated May 17, 1978, for the reason that the act of the
Franco Bus driver was a negligent act punishable by law resulting
in a civil obligation arising from Article 103 of the Revised Penal
Code and not from Article 2180 of the Civil Code. It said: "This is a
case of criminal negligence out of which civil liability arises, and
not a case of civil negligence and the defense of having acted like a
good father of a family or having trained or selected the drivers of
his truck is no defense to avoid civil liability." 2 On this premise, the
trial court ruled as follows:
WHEREFORE, premises considered, judgment is hereby rendered
in favor of the plaintiffs, Antonio Reyes, Lolita Lugue, and Susan
Chuay, and against the defendants Mr. and Mrs. Federico Franco,
ordering the latter:
(1) To pay Antonio Reyes, actual and compensatory damages in the
amount of P90,000.00 for the Isuzu Mini Bus;
(2) To pay Lolita Lugue, the widow of Magdaleno Lugue, actual and
compensatory damages in the total sum of P18,000.00;
(3) To pay Susan Chuay, the widow of Fernando Chuay, actual and
compensatory damages in the total sum of P24,000.00; and
(4) To pay attorney's fee in the amount of P5.000.00;
All with legal interests from the filing of this suit on November 11,
1974 until paid; and the costs of this suit.
SO ORDERED. 3
On appeal by herein petitioners as defendants-appellants,
respondent appellate court, agreeing with the lower court, held
that defendants-appellants' driver who died instantly in the
vehicular collision, was guilty of reckless or criminal imprudence
punishable by law in driving appellants' bus; that the civil
obligation of the appellants arises from Article 103 of the Revised
Penal Code resulting in the subsidiary liability of the appellants
under the said provisions, 4 that the case subject of appeal is one
involving culpable negligence out of which civil liability arises and
is not one of civil negligence; 5 and that there is nothing in Articles
102 and 103 of the Revised Penal Code which requires a prior
judgment of conviction of the erring vehicle driver and his
obligation to pay his civil liability before the said provisions can be
applied. 6 Respondent appellate court increased the award of
damages granted by the lower court as follows:
WHEREFORE, the decision appealed from is hereby modified as
follows:
1. To pay Susan Chuay, widow of Fernando Chuay, the sum of
P30,000.00 for the latter's death and P112,000.00 for loss of
earning capacity;
2. To pay Lolita Lugue, widow of Magdaleno Lugue, the sum of
P30,000.00 for the latter's death and P62,000.00 for loss of earning
capacity. The rest of the judgment appealed from is affirmed. Costs
against defendants-appellants.
SO ORDERED. 7
On April 1, 1985, petitioners filed a motion for reconsideration of
the aforesaid respondent appellate court's decision dated January
2, 1985 but the same was denied on May 13, 1985.
Hence, the instant petition raising two (2) legal questions: first,
whether the action for recovery of damages instituted by herein
private respondents was predicated upon crime or quasi-delict;
and second, whether respondent appellate court in an appeal filed
by the defeated parties, herein petitioners, may properly increase
the award of damages in favor of the private respondents Chuay
and Lugue, prevailing parties in the lower court, who did not
appeal said court's decision.
Petitioners contend that the allegations in paragraph 9 of the
Amended Complaint 8 of herein private respondents as plaintiffs in
Civil Case No. 2154 unequivocally claim that the former as the
employers of Macario Yuro, the driver of the Franco Bus who
caused the vehicular mishap, are jointly and severally liable to the
latter for the damages suffered by them which thus makes Civil
Case No. 2154 an action predicated upon a quasi-delict under the
Civil Code subject to the defense that the employer exercised all the
diligence of a good father of a family in the selection and
supervision of their employees.
We find merit in this contention. Distinction should be made
between the subsidiary liability of the employer under the Revised
Penal Code and the employer's primary liability under the Civil
Code which is quasi-delictual or tortious in character. The first type
of liability is governed by Articles 102 and 103 of the Revised Penal
Code which provide as follows:
Art. 102. Subsidiary civil liability of innkeepers, tavern-keepers and
proprietors of establishments. — In default of the persons criminally
liable, innkeepers, tavern-keepers, and any other persons or
corporations shall be civilly liable for crimes committed in their
establishments, in all cases where a violation of municipal
ordinances or some general or special police regulations shall have
been committed by them or their employees.
Innkeepers are also subsidiarily liable for the restitution of goods
taken by robbery or theft within their houses from guests lodging
therein, or for the payment of the value thereof, provided that such
guests shall have notified in advance the innkeeper himself, or the
person representing him, of the deposits of such goods within the
inn; and shall furthermore have followed the directions which such
innkeeper or his representative may have given them with respect
to the care and vigilance over such goods. No liability shall attach in
case of robbery with violence against or intimidation of persons
unless committed by the innkeeper's employees.
Art. 103. Subsidiary civil liability of other persons. — 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 the servants, pupils,
workmen, apprentices, or employees in the discharge of their
duties;
while the second kind is governed by the following provisions of
the Civil Code:
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.
Art. 2177. 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.
Art. 2180. The obligations imposed by article 2176 is demandable
not only for one's own acts or omissions, but also for those of
persons for whom one is responsible.
xxx xxx xxx
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,
xxx xxx xxx
The responsibility treated of in this article shall cease when the
persons herein mentioned prove that they observed all the
diligence of a good father of a family to prevent damage.
Under Article 103 of the Revised Penal Code, liability originates
from a delict committed by the employee who is primarily liable
therefor and upon whose primary liability his employer's
subsidiary liability is to be based. Before the employer's subsidiary
liability may be proceeded against, it is imperative that there
should be a criminal action whereby the employee's criminal
negligence or delict and corresponding liability therefor are
proved. If no criminal action was instituted, the employer's liability
would not be predicated under Article 103. 9
In the case at bar, no criminal action was instituted because the
person who should stand as the accused and the party supposed to
be primarily liable for the damages suffered by private respondents
as a consequence of the vehicular mishap died. Thus, petitioners'
subsidiary liability has no leg to stand on considering that their
liability is merely secondary to their employee's primary liability.
Logically therefore, recourse under this remedy is not possible.
On the other hand, under Articles 2176 and 2180 of the Civil Code,
liability is based on culpa aquiliana which holds the employer
primarily liable for tortious acts of its employees subject, however,
to the defense that the former exercised all the diligence of a good
father of a family in the selection and supervision of his employees.
Respondent appellate court relies on the case of Arambulo, supra,
where it was held that the defense of observance of due diligence of
a good father of a family in the selection and supervision of
employees is not applicable to the subsidiary liability provided in
Article 20 of the Penal Code (now Article 103 of the Revised Penal
Code). By such reliance, it would seem that respondent appellate
court seeks to enforce the subsidiary civil liability of the employer
without a criminal conviction of the party primarily liable therefor.
This is not only erroneous and absurd but is also fraught with
dangerous consequences. It is erroneous because the conviction of
the employee primarily liable is a condition sine qua non for the
employer's subsidiary liability 10 and, at the same time, absurd
because we will be faced with a situation where the employer is
held subsidiarily liable even without a primary liability being
previously established. It is likewise dangerous because, in effect,
the employer's subsidiary liability would partake of a solidary
obligation resulting in the law's amendment without legislative
sanction.
The Court in the aforecited M.D. Transit case went further to say
that there can be no automatic subsidiary liability of defendant
employer under Article 103 of the Revised Penal Code where his
employee has not been previously criminally convicted.
Having thus established that Civil Case No. 2154 is a civil action to
impose the primary liability of the employer as a result of the
tortious act of its alleged reckless driver, we confront ourselves
with the plausibility of defendants-petitioners' defense that they
observed due diligence of a good father of a family in the selection
and supervision of their employees.
On this point, the appellate court has unequivocally spoken in
affirmation of the lower court's findings, to wit:
Anyway, a perusal of the record shows that the appellants were not
able to establish the defense of a good father of a family in the
supervision of their bus driver. The evidence presented by the
appellants in this regard is purely self-serving. No independent
evidence was presented as to the alleged supervision of appellants'
bus drivers, especially with regard to driving habits and reaction to
actual traffic conditions. The appellants in fact admitted that the
only kind of supervision given the drivers referred to the running
time between the terminal points of the line (t.s.n., September 16,
1976, p. 21). Moreover, the appellants who ran a fleet of 12 buses
plying the Manila-Laoag line, have only two inspectors whose
duties were only ticket inspection. There is no evidence that they
are really safety inspectors. 11
Basically, the Court finds that these determinations are factual in
nature. As a painstaking review of the evidence presented in the
case at bar fails to disclose any evidence or circumstance of note
sufficient to overrule said factual findings and conclusions, the
Court is inclined to likewise reject petitioners' affirmative defense
of due diligence. The wisdom of this stance is made more apparent
by the fact that the appellate court's conclusions are based on the
findings of the lower court which is in a better position to evaluate
the testimonies of the witnesses during trial. As a rule, this Court
respects the factual findings of the appellate and trial courts and
accord them a certain measure of finality. 12 Consequently,
therefore, we find petitioners liable for the damages claimed
pursuant to their primary liability under the Civil Code.
On the second legal issue raised in the instant petition, we agree
with petitioners' contention that the Intermediate Appellate Court
(later Court of Appeals) is without jurisdiction to increase the
amount of damages awarded to private respondents Chuay and
Lugue, neither of whom appealed the decision of the lower court.
While an appellee who is not also an appellant may assign error in
his brief if his purpose is to maintain the judgment on other
grounds, he cannot ask for modification or reversal of the judgment
or affirmative relief unless he has also appealed. 13 For failure of
plaintiffs-appellees, herein private respondents, to appeal the
lower court's judgment, the amount of actual damages cannot
exceed that awarded by it. 14
Furthermore, the records 15 show that plaintiffs-private
respondents limited their claim for actual and compensatory
damages to the supposed average income for a period of one (1)
year of P6,000.00 for the driver Magdaleno Lugue and P12,000.00
for the Chinese businessman Fernando Chuay. We feel that our
award should not exceed the said amounts .16
However, the increase in awards for indemnity arising from death
to P30,000.00 each remains, the same having been made in
accordance with prevailing jurisprudence decreeing such increase
in view of the depreciated Philippine currency. 17
WHEREFORE, the decision of the Court of Appeals is hereby
modified decreasing the award to private respondents of actual
and compensatory damages for loss of average income for the
period of one year to P6,000.00 for the deceased Magdaleno Lugue
and P12,000.00 for the deceased Fernando Chuay. The rest of the
judgment appealed from is hereby affirmed. Costs against the
private respondents. This decision is immediately executory.
SO ORDERED.
G.R. No. 84516 December 5, 1989
DIONISIO CARPIO, petitioner,
vs.
HON. SERGIO DOROJA, (Presiding Judge, MTC, Branch IV,
Zamboanga City) and EDWIN RAMIREZ Y WEE, respondents.
PARAS, J.:
Before us is a petition to review by certiorari the decision of the
Municipal Trial Court of Zamboanga City, Branch IV, which denied
petitioner's motion for subsidiary writ of execution against the
owner-operator of the vehicle which figured in the accident.
The facts of the case are undisputed.
Sometime on October 23, 1985, accused-respondent Edwin
Ramirez, while driving a passenger Fuso Jitney owned and
operated by Eduardo Toribio, bumped Dionisio Carpio, a
pedestrian crossing the street, as a consequence of which the latter
suffered from a fractured left clavicle as reflected in the medico-
legal certificate and sustained injuries which required medical
attention for a period of (3) three months.
An information for Reckless Imprudence Resulting to Serious
Physical Injuries was filed against Edwin Ramirez with the
Municipal Trial Court of Zamboanga City, Branch IV. On January 14,
1987, the accused voluntarily pleaded guilty to a lesser offense and
was accordingly convicted for Reckless Imprudence Resulting to
Less Serious Physical Injuries under an amended information
punishable under Article 365 of the Revised Penal Code. The
dispositive portion of the decision handed down on May 27, 1987
reads as follows:
WHEREFORE, finding the accused EDWIN RAMIREZ y WEE guilty
as a principal beyond reasonable doubt of the Amended
Information to which he voluntarily pleaded guilty and
appreciating this mitigating circumstance in his favor, hereby
sentences him to suffer the penalty of One (1) month and One (1)
day to Two (2) months of Arresto Mayor in its minimum period.
The accused is likewise ordered to indemnify the complainant
Dionisio A. Carpio the amount of P45.00 representing the value of
the 1/2 can of tomatoes lost; the amount of P200.00 which
complainant paid to the Zamboanga General Hospital, to pay
complainant the amount of Pl,500.00 as attorney's fees and to pay
the cost of this suit. SO ORDERED. (p. 7, Rollo)
Thereafter, the accused filed an application for probation.
At the early stage of the trial, the private prosecutor manifested his
desire to present evidence to establish the civil liability of either
the accused driver or the owner-operator of the vehicle. Accused's
counsel moved that the court summon the owner of the vehicle to
afford the latter a day in court, on the ground that the accused is
not only indigent but also jobless and thus cannot answer any civil
liability that may be imposed upon him by the court. The private
prosecutor, however, did not move for the appearance of Eduardo
Toribio.
The civil aspect of the above-quoted decision was appealed by the
private prosecutor to the Regional Trial Court Branch XVI,
appellant praying for moral damages in the amount of P 10,000.00,
compensatory damages at P6,186.40, and attorney's fees of P
5,000.00. The appellate court, on January 20, 1988, modified the
trial court's decision, granting the appellant moral damages in the
amount of Five Thousand Pesos (P 5,000.00), while affirming all
other civil liabilities.
Thereafter, a writ of execution dated March 10, 1988 was duly
served upon the accused but was, however, returned unsatisfied
due to the insolvency of the accused as shown by the sheriffs
return. Thus, complainant moved for a subsidiary writ of execution
against the subsidiary liability of the owner-operator of the vehicle.
The same was denied by the trial court on two grounds, namely, the
decision of the appellate court made no mention of the subsidiary
liability of Eduardo Toribio, and the nature of the accident falls
under "culpa-aquiliana" and not culpa-contractual." A motion for
reconsideration of the said order was disallowed for the reason
that complainant having failed to raise the matter of subsidiary
liability with the appellate court, said court rendered its decision
which has become final and executory and the trial court has no
power to alter or modify such decision.
Hence, the instant petition.
Petitioner relies heavily on the case of Pajarito v. Seneris, 87 SCRA
275, which enunciates that "the subsidiary liability of the owner-
operator is fixed by the judgment, because if a case were to be filed
against said operator, the court called upon to act thereto has no
other function than to render a decision based on the indemnity
award in the criminal case without power to amend or modify it
even if in his opinion an error has been committed in the decision."
Petitioner maintains that the tenor of the aforesaid decision implies
that the subsidiary liability of the owner-operator may be enforced
in the same proceeding and a separate action is no longer
necessary in order to avoid undue delay, notwithstanding the fact
that said employer was not made a party in the criminal action.
It is the theory of respondent that the owner-operator cannot be
validly held subsidiarily liable for the following reasons, namely:
(a) the matter of subsidiary liability was not raised on appeal; (b)
contrary to the case of Pajarito v. Seneris, the injuries sustained by
the complainant did not arise from the so-called "culpa-
contractual" but from "culpa-aquiliana"; (c) the judgments of
appellate courts may not be altered, modified, or changed by the
court of origin; and (d) said owner was never made a party to the
criminal proceedings.
Thus, the underlying issue raised in this case is; whether or not the
subsidiary liability of the owner-operator may be enforced in the
same criminal proceeding against the driver where the award was
given, or in a separate civil action.
The law involved in the instant case is Article 103 in relation to
Article 100, both of the Revised Penal Code, which reads thus:
Art. 103. Subsidiary civil liability of other persons. The subsidiary
liability established in the next preceding article shall 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.
Respondent contends that the case of Pajarito v. Seneris cannot be
applied to the present case, the former being an action involving
culpa-contractual, while the latter being one of culpa-aquiliana.
Such a declaration is erroneous. The subsidiary liability in Art. 103
should be distinguished from the primary liability of employers,
which is quasi-delictual in character as provided in Art. 2180 of the
New Civil Code. Under Art. 103, the liability emanated from a delict.
On the other hand, the liability under Art. 2180 is founded on
culpa-aquiliana. The present case is neither an action for culpa-
contractual nor for culpa-aquiliana. This is basically an action to
enforce the civil liability arising from crime under Art. 100 of the
Revised Penal Code. In no case can this be regarded as a civil action
for the primary liability of the employer under Art. 2180 of the New
Civil Code, i.e., action for culpa-aquiliana.
In order that an employer may be held subsidiarily liable for the
employee's civil liability in the criminal action, it should be shown
(1) that the employer, etc. is engaged in any kind of industry, (2)
that the employee committed the offense in the discharge of his
duties and (3) that he is insolvent (Basa Marketing Corp. v. Bolinao,
117 SCRA 156). The subsidiary liability of the employer, however,
arises only after conviction of the employee in the criminal action.
All these requisites present, the employer becomes ipso facto
subsidiarily liable upon the employee's conviction and upon proof
of the latter's insolvency. Needless to say, the case at bar satisfies
all these requirements.
Furthermore, we are not convinced that the owner-operator has
been deprived of his day in court, because the case before us is not
one wherein the operator is sued for a primary liability under the
Civil Code but one in which the subsidiary civil liability incident to
and dependent upon his employee's criminal negligence is sought
to be enforced. Considering the subsidiary liability imposed upon
the employer by law, he is in substance and in effect a party to the
criminal case. Ergo, the employer's subsidiary liability may be
determined and enforced in the criminal case as part of the
execution proceedings against the employee. This Court held in the
earlier case of Pajarito v. Seneris, supra, that "The proceeding for
the enforcement of the subsidiary civil liability may be considered
as part of the proceeding for the execution of the judgment. A case
in which an execution has been issued is regarded as still pending
so that all proceedings on the execution are proceedings in the suit.
There is no question that the court which rendered the judgment
has a general supervisory control over its process of execution, and
this power carries with it the right to determine every question of
fact and law which may be involved in the execution."
The argument that the owner-operator cannot be held subsidiarily
liable because the matter of subsidiary liability was not raised on
appeal and in like manner, the appellate court's decision made no
mention of such subsidiary liability is of no moment. As already
discussed, the filing of a separate complaint against the operator
for recovery of subsidiary liability is not necessary since his
liability is clear from the decision against the accused. Such being
the case, it is not indispensable for the question of subsidiary
liability to be passed upon by the appellate court. Such subsidiary
liability is already implied from the appellate court's decision. In
the recent case of Vda. de Paman v. Seneris, 115 SCRA 709, this
Court reiterated the following pronouncement: "A judgment of
conviction sentencing a defendant employer to pay an indemnity in
the absence of any collusion between the defendant and the
offended party, is conclusive upon the employer in an action for the
enforcement of the latter's subsidiary liability not only with regard
to the civil liability, but also with regard to its amount." This being
the case, this Court stated in Rotea v. Halili, 109 Phil. 495, "that the
court has no other function than to render decision based upon the
indemnity awarded in the criminal case and has no power to
amend or modify it even if in its opinion an error has been
committed in the decision. A separate and independent action is,
therefore, unnecessary and would only unduly prolong the agony
of the heirs of the victim."
Finally, the position taken by the respondent appellate court that to
grant the motion for subsidiary writ of execution would in effect be
to amend its decision which has already become final and
executory cannot be sustained. Compelling the owner-operator to
pay on the basis of his subsidiary liability does not constitute an
amendment of the judgment because in an action under Art. 103 of
the Revised Penal Code, once all the requisites as earlier discussed
are met, the employer becomes ipso facto subsidiarily liable,
without need of a separate action. Such being the case, the
subsidiary liability can be enforced in the same case where the
award was given, and this does not constitute an act of amending
the decision. It becomes incumbent upon the court to grant a
motion for subsidiary writ of execution (but only after the
employer has been heard), upon conviction of the employee and
after execution is returned unsatisfied due to the employee's
insolvency.
WHEREFORE, the order of respondent court disallowing the
motion for subsidiary writ of execution is hereby SET ASIDE. The
Court a quo is directed to hear and decide in the same proceeding
the subsidiary liability of the alleged owner-operator of the
passenger jitney. Costs against private respondent.
SO ORDERED.
G.R. No. 169498             December 11, 2008
OSCAR DELOS SANTOS and ELIZA DELOS SANTOS, petitioners,
vs.
COURT OF APPEALS, respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Special Civil Action for Certiorari,  Prohibition
and Mandamusunder Rule 65 of the Revised Rules of Court filed by
petitioners spouses Oscar and Eliza delos Santos (spouses Delos
Santos), seeking to reverse and set aside the Decision1 dated 28
June 2005 of the Court of Appeals in CA-G.R. SP No. 83234 for
having been rendered with grave abuse of discretion amounting to
lack or excess of jurisdiction. In its assailed Decision, the Court of
Appeals reversed the Orders dated 10 February 2004 and 1 March
2004 of the Regional Trial Court (RTC) of Valenzuela, Branch 172,
in Criminal Case No. 1116-V-99, declaring Saturnino Dy, also
known as Juanito Dy (Dy), and Dyson Surface and Coating
Corporation (Dyson Corporation) as joint employers of the accused
Antonio Sagosoy (Sagosoy), who should both be held liable
solidarily with Sagosoy for the injury caused to Ferdinand delos
Santos (Ferdinand).
The factual and procedural antecedents of this case are as follows:
On 18 March 1998, at around 7:00 o’clock in the morning, the Isuzu
forward van driven by Sagosoy collided with a horse-drawn
carriage steered by Oscar delos Santos. Oscar delos Santos was
with his four-year-old son Ferdinand who was seated in the
carriage. The collision left the horse dead and Ferdinand seriously
injured with a broken spinal cord. A surgical operation to repair the
broken spinal cord could not be performed on Ferdinand because
of his tender age. Thus, Ferdinand’s broken spinal cord further
caused irreversible damage to his vision, speech, and motor skills.
The van driven by Sagosoy bears plate number ULP 725 registered
under the name of Dy of Dyson Corporation.
An Information2 charging Sagosoy with the crime of Reckless
Imprudence Resulting in Serious Physical Injuries and Damage to
Property was eventually filed before the RTC, which reads:
That on or about the 18th day of March, 1998, in Valenzuela, Metro
Manila and within the jurisdiction of this Honorable Court, the
above-named accused, being then the driver of an Isuzu Forward
Van bearing Plate No. 725, did then and there unlawfully and
feloniously drive, manage and operate the same along Tatalon,
Ugong, this municipality, in a reckless, negligent and imprudent
manner, without taking the necessary precautions to avoid
accident to person and damage to property, and so, as a result of
such carelessness, negligence and imprudence, said vehicle driven
by the accused, hit and collide with Horse-Drawn Vehicle
(Tiburine) causing said Tiburine to be damaged in the amount
of P9,200.00 and causing further the death of the horse valued
at P75,000.00 to the damage and prejudice of the owner thereof,
and as further consequence, Ferdinand delos Santos sustained
physical injuries which requires medical attendance for a period of
more than 30 days and incapacitated said Ferdinand delos Santos
from performing his habitual work for the same period of time.
The case was docketed as Criminal Case No. 1116-V-99.
When arraigned, Sagosoy pleaded not guilty.3
After trial on the merits, the RTC rendered a Decision 4 on 27
September 2002 in Criminal Case No. 1116-V-99 finding Sagosoy
guilty of the crime charged, thereby sentencing him to a straight
penalty of four (4) months imprisonment and to indemnify the
spouses Delos Santos for actual and moral damages resulting from
Ferdinand’s injury. The fallo of the said RTC Decision reads:
WHEREFORE, judgment is hereby rendered finding accused
ANTONIO SAGOSOY y NAMALATA guilty beyond reasonable doubt
and as principal of the crime of reckless imprudence resulting to
serious physical injuries and damage to property, without any
attending mitigating or aggravating circumstance and hereby
sentences him to a straight penalty of FOUR (4) MONTHS of arresto
mayor. The accused is further sentenced to pay [the Spouses Delos
Santos] the amount of P85,000.00 representing the medical
expenses after deducting the amount of P150,000.00 contributed
by the employer of the accused, the amount of P9,200.00
representing the cost of repair of the damaged tiburine, the amount
of P75,000.00 representing the value of the horse, and the amount
of P300,000.00 representing the cost of the operation to be
performed on Ferdinand upon reaching the age of 18. Finally, the
accused is sentenced to pay [the Spouses Delos Santos] the amount
of P500,000.00 as moral damages, to pay Ferdinand delos Santos,
through his parents [the Spouses Delos Santos], the amount
of P200,000.00 as indemnity, to pay the amount equivalent to 10%
of the amount to be collected as reasonable attorney’s fees, and to
pay the costs of suit, all without subsidiary imprisonment in case of
insolvency.
The spouses Delos Santos filed a Motion for the Issuance of Writ of
Execution,5 which was favorably acted upon by the RTC. The First
Writ of Execution6 was issued on 3 January 2003 commanding the
Sheriff to execute and make effective its 27 September 2002
Decision in Criminal Case No. 1116-V-99.
An attempt to satisfy the judgment was made by the Sheriff, but he
found no real or personal properties of Sagosoy to answer for the
latter’s civil liability to the spouses Delos Santos. The unsatisfied
Sheriff’s Return7 prompted the spouses Delos Santos to file a
Motion for the Issuance of Alias Writ of Execution8 against the
properties and income of Dy in light of his subsidiary liability as the
employer of Sagosoy. The motion was opposed by Dy who denied
that he was the employer of Sagosoy. According to Dy, at the time
the accident occured, Sagoysoy was merely doing an isolated and
non-business related driving task for him.
After weighing the arguments of the parties, the RTC issued on 30
May 2003 an Order directing the issuance of an Alias Writ of
Execution, not just against the income and properties of Sagosoy,
but also those of Dy.9 The Alias Writ of Execution10 was issued on 3
June 2003.
Subsequently, the RTC, in an Order dated 23 June 2003, denied Dy’s
Motion for Reconsideration of its Order dated 30 May 2003.
Dy filed a Petition for Certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 78005, averring that the RTC committed
grave abuse of discretion in issuing its Orders dated 30 May 2003
and 23 June 2003. The appellate court, however, in a
Decision11 dated 28 September 2004, dismissed Dy’s Petition and
affirmed the questioned RTC Orders. Said Decision of the Court of
Appeals in CA-G.R. SP No. 78005 became final and executory on 20
October 2004 as evidenced by the Entry of Judgment already made
therein.12
In the interregnum, per the Sheriff’s Return dated 6 October 2003,
the Alias Writ of Execution was again returned unsatisfied due to
the failure of the Sheriff to locate any real or personal property
registered in the name of Dy.13
Unrelenting, the spouses Delos Santos filed a Motion for the
Issuance of a Second Writ of Execution before the RTC, identifying
Dyson Corporation as the co-employer of Sagosoy, together with
Dy. The spouses Delos Santos called the attention of the trial court
to particular pieces of evidence to establish that Sagosoy, at the
time of the accident, worked for both Dy and Dyson Corporation,
namely: (1) Sagosoy’s testimony that Dy was doing business in the
name of Dyson Corporation; (2) Sagosoy’s Social Security System
(SSS) record showing that Dyson Corporation was his registered
employer; and (3) the Articles of Incorporation of Dyson
Corporation establishing that Dy was one of the majority
stockholders of Dyson Corporation.14 The spouses Delos Santos
also propounded that the accident which caused serious physical
injuries to Ferdinand took place while Sagosoy was undertaking an
activity in furtherance of the business operations of Dyson
Corporation.15
Dyson Corporation timely opposed the spouses Delos Santos’s
latest Motion, underscoring the inconsistencies in the spouses
Delos Santos’s stand on the crucial issue of who was the real
employer of Sagosoy. Dyson Corporation averred that the spouses
Delos Santos should not be allowed to conveniently shift their
position on the said issue, and now joined Dyson Corporation with
Dy as Sagosoy’s employers after it turned out that Dy alone was
financially incapable of satisfying the civil liability under the RTC
judgment in Criminal Case No. 1116-V-99.16
In an Order17 dated 10 February 2004, the RTC granted the spouses
Delos Santos’s Motion and declared Dy and Dyson Corporation as
co-employers of Sagosoy. In its Order, the RTC explained that while
the van driven by Sagosoy was owned by Dy, it was being used by
Dyson Corporation in its business operations. The RTC further
justified that the initial confusion as to the identity of Sagosoy’s
employer was understandable and did not render impossible the
conclusion that both Dy and Dyson Corporation were Sagosoy’s
employers who should both accordingly be held liable for the civil
liability arising from the crime of which Sagosoy was adjudged
guilty.
In an Order18 dated 1 March 2004, the RTC denied the Motion for
Reconsideration of Dyson Corporation for no sufficient merit.
For allegedly having been issued with grave abuse of discretion, the
RTC Orders dated 10 February 2004 and 1 March 2004 were
challenged by Dyson Corporation before the Court of Appeals
through a Special Civil Action for Certiorari, docketed as CA-G.R. SP
No. 83234.
On 28 June 2005, the Court of Appeals promulgated a Decision in
CA-G.R. SP No. 83234, finding therein that the issuance by the RTC
of its 10 February 2004 and 1 March 2004 Orders was tainted with
grave abuse of discretion. The appellate court reasoned that Dy and
Dyson Corporation could only be treated as joint employers of
Sagosoy upon the piercing of the veil of corporate fiction, which
was not warranted in the instant case since it had not been shown
that Dy was hiding behind the cloak of Dyson Corporation in order
to evade liability. Thus, the fallo of the Decision of the Court of
Appeals reads:
WHEREFORE, premises considered, the petition is
hereby GRANTED. We hereby ANNUL and SET ASIDE the assailed
orders. Costa against [the spouses Delos Santos].19
The spouses Delos Santos filed a Motion for Reconsideration on 10
August 2005 explaining that the delay was caused by their counsel
who did not notify them of the receipt of the Court of Appeals
Decision dated 28 June 2005. It was only upon inquiry with the RTC
on 26 July 2005 that they learned of the appellate court’s decision.
The Court of Appeals, in a Resolution 20 dated 30 August 2005,
refused to give due course to the spouses Delos Santos’s Motion for
Reconsideration since it was not filed within the reglementary
period. According to the appellate court, the spouses Delos Santos
thru counsel received a copy of their 28 June 2005 Decision on 26
July 2005. Hence, the spouses Delos Santos had only until 29 July
2005 to move for the reconsideration of the judgment or to appeal
it. The Motion for Reconsideration was filed only on 10 August
2005. Resultantly, the Court of Appeals Decision in CA-G.R. SP No.
83234 became final and executory on 19 September 2005.
The spouses Delos Santos are now before this Court seeking the
reversal of the Court of Appeals disquisition on the ground of grave
abuse of discretion. For the resolution of this Court are the
following issues:
I.
WHETHER OR NOT THE FILING OF THE INSTANT SPECIAL CIVIL
ACTION FOR CERTIORARI, IS PROPER IN THE INSTANT CASE.
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSED
ITS DISCRETION IN DENYING THE SPOUSES DELOS SANTOS’
MOTION FOR RECONSIDERATION.
 III.
WHETHER OR NOT DY AND DYSON CORPORATION ARE JOINT
EMPLOYERS OF SAGOSOY AND SHOULD THEREFORE BE HELD
SUBSIDIARILY LIABLE FOR THE CIVIL LIABILITY ARISING FROM
THE CRIME COMMITTED BY SAGOSOY.
The Court first dispenses with the procedural issues raised by the
parties, particularly the propriety of the remedy they chose to avail
herein.
The spouses Delos Santos justify their present Petition
for Certiorari, Prohibition and Mandamus by averring the lack of
any other plain, speedy or adequate remedy available in the
ordinary course of law that could compensate them for the injury
caused to their son. On the other hand, Dyson Corporation counters
by highlighting the failure of the spouses Delos Santos to timely file
their Motion for Reconsideration before the Court of Appeals in CA-
G.R. SP No. 83234. Dyson Corporation argues that the special civil
action of certiorari cannot be invoked as a substitute for the
remedy of appeal that was already lost, less so, when the requisites
for certiorari were not faithfully complied with.
According to Section 1, Rule 65 of the Revised Rules of Court, a
petition for certiorari may be filed under the following
circumstances:
SEC. 1. Petition for certiorari -- When any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or
in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal,
nor any plain, speedy, and adequate remedy in the ordinary course
of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such incidental reliefs
as law and justice may require.
A writ of certiorari may be issued only for the correction of errors
of jurisdiction or grave abuse of discretion amounting to lack or
excess of jurisdiction. The writ cannot be used for any other
purpose, as its function is limited to keeping the inferior court
within the bounds of its jurisdiction. 21
For certiorari to prosper, the following requisites must concur: (1)
the writ is directed against a tribunal, a board or any officer
exercising judicial or quasi-judicial functions; (2) such tribunal,
board or officer has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.22
"Without jurisdiction" means that the court acted with absolute
lack of authority. There is "excess of jurisdiction" when the court
transcends its power or acts without any statutory authority.
"Grave abuse of discretion" implies such capricious and whimsical
exercise of judgment as to be equivalent to lack or excess of
jurisdiction; in other words, power is exercised in an arbitrary or
despotic manner by reason of passion, prejudice, or personal
hostility; and such exercise is so patent or so gross as to amount to
an evasion of a positive duty or to a virtual refusal either to
perform the duty enjoined or to act at all in contemplation of law. 23
Although the court has absolute discretion to reject and dismiss a
petition for certiorari, in general, it does so only (1) when the
petition fails to demonstrate grave abuse of discretion by any court,
agency, or branch of the government; or (2) when there are
procedural errors, like violations of the Rules of Court or Supreme
Court Circulars. One of the procedural errors for which the court
could dismiss a petition for certiorari is the failure of the petitioner
to file a motion for reconsideration of the assailed order or
decision.24 A motion for reconsideration must first be filed with the
lower court prior to resorting to the extraordinary writ
of certiorari since a motion for reconsideration is still considered
an adequate remedy in the ordinary course of law. The rationale for
the filing of a motion for reconsideration is to give an opportunity
to the lower court to correct its imputed errors.25
In the present case, the spouses Delos Santos did file a Motion for
Reconsideration but they were only able to do so beyond the
reglementary period.
Moreover, since the case at bar resonates with a piercing and
urgent call for justice for a four-year-old boy seriously crippled by
the accident caused by the negligence of Sagosoy, the Court is
persuaded to excuse the procedural flaw so it could fully heed the
call. Laws and rules should be interpreted and applied not in a
vacuum or in isolated abstraction, but in light of surrounding
circumstances and attendant facts in order to afford justice to all.
This Court is not impervious to instances when rules of procedure
must yield to the loftier demands of substantial justice and equity.
Procedural rules are mere tools designed to facilitate the
attainment of justice; their application must be liberalized to
promote public interest.26
In this instance, the Court has no doubt that substantial justice will
be served and patent injustice will be obviated by giving due course
to this Petition in the presence of compelling reasons to disregard
the spouses Delos Santos’s procedural mistake. Just as we had
ruled in Aguam v. Court of Appeals27:
The court has discretion to dismiss or not to dismiss an appellant's
appeal. It is a power conferred on the court, not a duty. The
"discretion must be a sound one, to be exercised in accordance with
the tenets of justice and fair play, having in mind the circumstances
obtaining in each case." Technicalities, however, must be avoided.
The law abhors technicalities that impede the cause of justice. The
court's primary duty is to render or dispense justice. "A litigation is
not a game of technicalities." "Law suits, unlike duels are not to be
won by a rapier's thrust. Technicality, when it deserts its proper
office as an aid to justice and becomes its great hindrance and chief
enemy, deserves scant consideration from courts." Litigations must
be decided on their merits and not on technicality. Every party
litigant must be afforded the amplest opportunity for the proper
and just determination of his cause, free from the unacceptable
plea of technicalities. Thus, dismissal of appeals purely on technical
grounds is frowned upon where the policy of the court is to
encourage hearings of appeals on their merits and the rules of
procedure ought not to be applied in a very rigid, technical sense;
rules of procedure are used only to help secure, not override
substantial justice. It is a far better and more prudent course of
action for the court to excuse a technical lapse and afford the
parties a review of the case on appeal to attain the ends of justice
rather than dispose of the case on technicality and cause a grave
injustice to the parties, giving a false impression of speedy disposal
of cases while actually resulting in more delay, if not a miscarriage
of justice.
What should guide judicial action is the principle that a party-
litigant is to be given the fullest opportunity to establish the merits
of his complaint or defense rather than for him to lose life, liberty,
honor or property on technicalities. The rules of procedure should
be viewed as mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial
justice, must always be eschewed.28
The relaxation of procedural rules is even more imperative in the
instant Petition where there is an undeniable need for this Court to
settle threshold factual issues to finally give justice to the parties. It
is true that this Court is not a trier of facts, but there are recognized
exceptions to this general rule such as when the appellate court
had ignored, misunderstood, or misinterpreted cogent facts and
circumstances which, if considered, would change the outcome of
the case; or when its findings were totally devoid of support; or
when its judgment was based on a misapprehension of facts.29
The Court now proceeds to the crucial substantive issue raised in
this Petition: whether Dy and the Dyson Corporation are co-
employers of Sagosoy who are subsidiarily liable for the civil
liabilities arising from the crime committed by Sagosoy.
The Court of Appeals did not find Dyson Corporation as the co-
employer of Sagosoy, relying on the Decision dated 28 September
2004 of the same court in CA-G.R. SP No. 78005 which sustained
the subsidiary liability of Dy as the employer of Sagosoy and which
had already attained finality. The appellate court also refused to
adjudge Dyson Corporation to be solidarily liable with Dy unless
the veil of corporate fiction was pierced.
The Court does not agree.
The spouses Delos Santos do not controvert the pronouncement of
the Court of Appeals in its 28 September 2004 Decision in CA-G.R.
SP No. 78005 that Dy, as the employer of Sagosoy, was subsidiarily
liable for the civil obligations of his insolvent employee who caused
injury to third persons in the course of the latter’s employment.
Indeed, the spouses Delos Santos agree with the appellate court
that Dy should not be allowed to run scot-free from his liability in
light of the fact that he was the owner of the van Sagosoy was
driving at the time of the accident. What the spouses Delos Santos
are seeking from this Court is the affirmation that in addition to Dy,
Dyson Corporation is also the employer of Sagosoy, as several
pieces of evidence would show, which should likewise be made
answerable for the civil liabilities incurred by Sagosoy.
The Court notes that there was no way for the Court of Appeals in
CA-G.R. SP No. 78005 to already deduce from the pleadings and
evidence presented therein that Sagosoy was employed not just by
Dy, but also by Dyson Corporation. The Petition in CA-G.R. SP No.
78005 was filed by Dy and all arguments and evidence necessarily
revolved only around his liability as an employer. Moreover, the
finding of the Court of Appeals in CA-G.R. SP No. 78005, that
Sagosoy was working for Dy, is not necessarily in conflict with a
subsequent ruling in another case that Sagosoy was employed not
just by Dy, but also by Dyson Corporation. It bears to emphasize
that Dy remains to be considered an employer of Sagosoy and still
subsidiarily liable for the latter’s civil obligations arising from the
crime. However, if Dyson Corporation is declared a co-employer of
Sagosoy together with Dy, then Dyson Corporation and Dy must
now solidarily bear the subsidiary liability.
Justice and fairness dictate that the spouses Delos Santos should be
compensated for the tragic fate of their son, and the rule of law
should be enforced against those persons who may be adjudged
liable, brushing aside hornbook procedural principles which
unduly delay the dispensation of justice to an innocent and hapless
boy who practically lost his life to an accident due to the negligence
of another.
Since it was duly proven that Sagosoy had no real or personal
properties to satisfy the judgment, then Sagosoy’s employer must
answer for damages Sagosoy caused. The statutory basis for an
employer’s subsidiary liability is found in Articles 102 and 103 of
the Revised Penal Code, which read:
Art. 102. Subsidiary civil liability of innkeepers, tavernkeepers, and
proprietors of establishments. - In default of the persons criminally
liable, innkeepers, tavernkeepers, and any other persons or
corporations shall be civilly liable for crimes committed in their
establishments, in all cases where a violation of municipal
ordinances or some general or special police regulation shall have
been committed by them or their employees.
Innkeepers are also subsidiarily liable for restitution of goods
taken by robbery or theft within their houses from guests lodging
therein, or for the payment of the value thereof, provided that such
guests shall have notified in advance the innkeeper himself, or the
person representing him, of the deposit of such goods within the
inn; and shall furthermore have followed the directions which such
innkeeper or his representative may have given them with respect
to the care of and vigilance over such goods. No liability shall attach
in case of robbery with violence against or intimidation of persons
unless committed by the innkeeper’s employees.
Art. 103. Subsidiary civil liability of other persons. – 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.
This liability is enforceable in the same criminal proceeding in
which the award is made. This liability attaches when the
employees who are convicted of crimes committed in the
performance of their work are found to be insolvent and are thus
unable to satisfy the civil liability adjudged.30
The Court has scrupulously examined the records of this case and
concluded that Sagosoy was working for both Dy and Dyson
Corporation when the van he was driving collided with the horse-
drawn carriage carrying Ferdinand. In his testimony before the
RTC, Sagosoy narrated that he was employed by Dy who was doing
business under the name of Dyson Corporation. Sagosoy’s
testimony is validated by the Certificate of Incorporation of Dyson
Corporation showing that Dy is one of the major stockholders of
Dyson Corporation. Also, the SSS records of Sagosoy state that his
employer is Dyson Corporation. These pieces of evidence strongly
prove that Sagosoy is also deemed an employee of Dyson
Corporation. In contrast, Dyson Corporation does not at all offer
any controverting evidence, and vainly centers its defense on
procedural rhetoric.31
In addition, the records are bereft of information on any other
business or industry that Dy is engaged in and for which he
personally employs Sagosoy. Sagosoy could not be the mere private
driver of Dy because when the accident occurred, Sagosoy was
driving an Isuzu Forward van, which is primarily used for the
delivery of goods and effects. Taking note of the fact that Dy is the
Chief Executive Officer of Dyson Corporation, it would appear that
the van being driven by Sagosoy was only registered in Dy’s name,
but was actually being used by Dyson Corporation in the conduct of
its business. Given these circumstances, both Dy and Dyson
Corporation should be declared the employers of Sagosoy who are
both subsidiarily liable for Sagosoy’s liabilities ex delicto.
Finally, contrary to the ruling of the Court of Appeals, there is no
need to pierce the veil of corporate fiction in this case, considering
that Dy and Dyson Corporation are precisely being treated as
separate entities, which is the reason why they are being declared
"co-employers" of Sagosoy. That Dy is hiding behind the
personality of Dyson Corporation in order to escape liability is not
even relevant herein. The evidence and the circumstances establish
that Dy is the registered owner of the van driven by Sagosoy in
furtherance of the business of Dyson Corporation; and that Dyson
Corporation uses the van driven by Sagosoy in its business
operation and recognizes Sagosoy as one of its employees per the
latter’s SSS records. Hence, both Dy and Dyson Corporation can be
deemed the employers of Sagosoy.
With the pronouncement that both Dy and Dyson Corporation are
subsidiarily liable for the damages caused to the spouses Delos
Santos, let this much prolonged litigation be put to an end. The
counsels of the parties are herby warned not to employ any
procedural tactics that would further delay the execution of the
RTC Decision dated 27 September 2002 in Criminal Case No. 1116-
V-99. Litigation is not a game of technicalities in which one, more
deeply schooled and skilled in the subtle art of movement and
position, entraps and destroys the other.32 In the words of Mr.
Justice Malcolm, "More important than anything else, is that the
court should be right and to render justice where justice is due."33
WHEREFORE, in view of the foregoing, the instant Petition
is GRANTED. The Decision dated 28 June 2005 and Resolution
dated 30 August 2005 of the Court of Appeals in CA-G.R. SP No.
83234 are REVERSED and SET ASIDE. The Orders dated 10
February 2004 and 1 March 2004 of the Regional Trial Court of
Valenzuela, Branch 172, in Criminal Case No. 1116-V-99 are
hereby REINSTATED. No costs.
SO ORDERED.