Civil Law Review 2 Cases CDAsia

Civil Law Review 2
S.Y. 2020-2021
Atty. Joseph Ferdinand De Chavez
1st set
Case G.R. No. Date Page in PDF Pages

Macasaet v. CoA 83748 May 12, 1989 2 4
Locsin II v. Mekeni 192105 December 9, 2013 6 9
Food Corp.
Dy v. People 189081 August 10, 2016 15 14
Carpio v. Doroja 84516 December 5, 1989 29 5
Dela Llana v. Biong 182356 December 4, 2013 34 10
Abrogar v. Cosmos 164749 March 15, 2017 44 33
Bottling Corp.
Valenzuela v. CA 115024 February 7, 1996 77 15
Orient Freight v. 191937 August 9, 2017 92 18
Everett
EN BANC
[G.R. No. 83748. May 12, 1989.]
FLAVIO K. MACASAET & ASSOCIATES, INC. , petitioner, vs.

COMMISSION ON AUDIT and PHILIPPINE TOURISM AUTHORITY ,
respondents.
F. Sumulong & Associates Law Offices for petitioner.
SYLLABUS
1. CIVIL LAW; CONTRACTS; INTERPRETATION OF CONTRACTS; LITERAL

MEANING OF TERMINOLOGIES OF CONTRACT CONTROL WHEN THEY ARE CLEAR. —
The terminologies in the contract being clear, leaving no doubt as to the intention of the
contracting parties, their literal meaning control (Article 1370, Civil Code).
2. ID.; OBLIGATIONS; HAVE FORCE OF LAW BETWEEN CONTRACTING
PARTIES AND SHOULD BE COMPLIED WITH IN GOOD FAITH WHEN ARISING FROM
CONTRACT. — The price escalation cost must be deemed included in the nal actual
project cost and petitioner held entitled to the payment of its additional professional
fees. Obligations arising from contract have the force of law between the contracting
parties and should be complied with in good faith (Article 1159, Civil Code).
DECISION
MELENCIO-HERRERA , J : p
In this Petition for Certiorari, pursuant to Section 7, Article IX of the 1987

Constitution, 1 petitioner, Flavio K. Macasaet & Associates, Inc., prays that the ruling of
public respondent Commission on Audit (COA) denying its claim for completion of
payment of professional fees be overturned.
The facts follow:
On 15 September 1977 respondent Philippine Tourism Authority (PTA) entered
into a Contract for "Project Design and Management Services for the development of
the proposed Zamboanga Golf and Country Club, Calarian, Zamboanga City" with
petitioner company, but originally with Flavio K. Macasaet alone (hereinafter referred to
simply as the "Contract").
Under the Contract, PTA obligated itself to pay petitioner a professional fee of
seven (7%) of the actual construction cost, as follows:
"ARTICLE IV — PROFESSIONAL FEE
"In consideration for the professional services to be performed by Designer
under Article I of this Agreement, the Authority shall pay seven percent (7%) of the
actual construction cost."
In addition, a Schedule of Payments was provided for while the construction was
CD Technologies Asia, Inc. 2019 cdasiaonline.com
in progress and up to its final completion, thus:
"ARTICLE V — SCHEDULE OF PAYMENTS
"1. Upon the execution of the Agreement but not more than fteen (15)
days, a minimum payment equivalent to 10 percent of the professional fee as
provided in Art. IV computed upon a reasonable estimated construction cost of
the project.
"2. Upon the completion of the schematic design services, but not
more than 15 days after the submission of the schematic design to the Authority,
a sum equivalent to 15% of the professional fee as stated in Art. IV computed
upon the reasonable estimated construction cost of the project.
"3. Upon completion of the design development services, but not more
than 15 days after submission of the design development to the authority, a sum
equivalent to 20% of the professional fee as stated in Art. IV, computed upon the
reasonable estimated construction cost.
"4. Upon completion of the contract document services but not more
than 15 days after submission of the contract document to the Authority, a sum
equivalent to 25% of the professional fee as stated in Art. IV, shall be paid
computed on the same basis as above.
"5. Upon completion of the work and acceptance thereof by the
Authority, the balance of the professional fee, computed on the nal actual
project cost shall be paid." (Emphasis supplied)
Pursuant to the foregoing Schedule, the PTA made periodic payments of the
stipulated professional fees to petitioner. And, upon completion of the project, PTA
paid petitioners what it perceived to be the balance of the latter's professional fees.
It turned out, however, that after the project was completed, PTA paid Supra
Construction Company, the main contractor, the additional sum of P3,148,198.26
representing the escalation cost of the contract price due to the increase in the price of
construction materials.
Upon learning of the price escalation, petitioner requested payment of
P219,302.47 additional professional fee representing seven (7%) percent of
P3,148,198.26.
On 3 July 1985 PTA denied payment on the ground that "the subject price
escalation referred to increased cost of construction materials and did not entail
additional work on the part of petitioner as to entitle it to additional compensation
under Article VI of the contract" 2
Reconsiderations sought by the petitioner, up to respondent COA, were to no
avail. The latter expressed the opinion that "to allow subject claim in the absence of a
showing that extra or additional services had been rendered by claimant would certainly
result in overpayment to him to the prejudice of the Government" (1st Indorsement, July
10, 1987, p. 3, Rollo, p. 42).
Hence this Petition, to which we gave due course.
The basic issue for resolution is petitioner's entitlement to additional
professional fees, which, in turn, hinges on whether or not the price escalation should
be included in the "final actual project cost."
Public respondents, through the Solicitor General, maintain that petitioner had
been paid its professional fee upon completion of the project and that its claim for
additional payment is without any legal and factual basis for, after all, no additional
architectural services were rendered other than the ones under the terms of the
Contract. LLphil
On the other hand, petitioner anchors its claim to additional professional fees,
not on any change in services rendered, but on Article IV, and paragraph 5 of Article V,
of the Contract, supra.
The very terminologies used in the Contract call for a rmative relief in
petitioner's favor.
Under Article IV of said Contract, petitioner was to be entitled to seven (7%) of
the "actual construction cost." Under paragraphs 1, 2, 3, and 4, Article V, periodic
payments were to be based on a "reasonable estimated construction cost." Ultimately,
under paragraph 5, Article V, the balance of the professional fee was to be computed
on the basis of "the final actual project cost."
The use of the terms "actual construction cost", gradating into " nal actual
project cost" is not without signi cance. The real intendment of the parties, as shown
by paragraph 5, Article V, of their Contract was to base the ultimate balance of
petitioner's professional fees not on "actual construction cost" alone but on the nal
actual project cost; not on "construction cost" alone but on " project cost." By so
providing, the Contract allowed for exibility based on actuality and as a matter of
equity for the contracting parties. For evidently, the nal actual project cost would not
necessarily tally with the actual construction cost initially computed. The nal actual
project cost" covers the totality of all costs as actually and nally determined, and
logically includes the escalation cost of the contract price.
It matters not that the price escalation awarded to the construction company did
not entail additional work for petitioner. As a matter of fact, neither did it for the main
contractor. The increased cost of materials was not the doing of either contracting
party.
That an escalation clause was not speci cally provided for in the Contract is of
no moment either for it may be considered as already "built-in" and understood from
the very terms "actual construction cost," and eventually "final actual project cost."
Article VI of the Contract, supra, has no bearing on the present controversy
either. It speaks of any major change in the planning and engineering aspects
necessitating the award and payment of additional compensation. Admittedly, there
was no additional work by petitioner, which required additional compensation. Rather,
petitioner's claim is for payment of the balance of its professional fees based on the
"final actual project cost" and not for additional compensation based on Article VI.
The terminologies in the contract being clear, leaving no doubt as to the intention
of the contracting parties, their literal meaning control (Article 1370, Civil Code). The
price escalation cost must be deemed included in the nal actual project cost and
petitioner held entitled to the payment of its additional professional fees. Obligations
arising from contract have the force of law between the contracting parties and should
be complied with in good faith (Article 1159, Civil Code).LLphil
WHEREFORE, the ruling of respondent Commission on Audit is hereby SET ASIDE

and respondent Philippine Tourism Authority is hereby ordered to pay petitioner the
additional amount of P219,302.47 to complete the payment of its professional fee
under their Contract for Project Design and Management Services.
SO ORDERED.
Fernan (C.J.), Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla,
Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.
Footnotes
1. Section 7. . . . Unless otherwise provided by this Constitution or by law, any decision,
order, or ruling of each Commission may be brought to the Supreme Court on certiorari
by the aggrieved party within thirty days from receipt of a copy thereof.
2. Article VI — CHANGE OF ORDERS .

Should the Authority order any major change on the planning and engineering
aspects after definite designs have been previously agreed upon and computation,
designing, and drafting works completed resulting in additional work, additional
compensation shall be equitably paid for such additional work as mutually agreed upon
by both parties.

SECOND DIVISION
[G.R. No. 192105. December 9, 2013.]
ANTONIO LOCSIN II , petitioner, vs . MEKENI FOOD CORPORATION ,

respondent.
DECISION
DEL CASTILLO , J : p
In the absence of speci c terms and conditions governing a car plan agreement
between the employer and employee, the former may not retain the installment payments
made by the latter on the car plan and treat them as rents for the use of the service vehicle,
in the event that the employee ceases his employment and is unable to complete the
installment payments on the vehicle. The underlying reason is that the service vehicle was
precisely used in the former's business; any personal bene t obtained by the employee
from its use is merely incidental.
This Petition for Review on Certiorari 1 assails the January 27, 2010 Decision 2 of the
Court of Appeals (CA) in CA-G.R. SP No. 109550, as well as its April 23, 2010 Resolution 3
denying Petitioner's Motion for Partial Reconsideration. 4
Factual Antecedents
In February 2004, respondent Mekeni Food Corporation (Mekeni) — a Philippine
company engaged in food manufacturing and meat processing — offered petitioner
Antonio Locsin II the position of Regional Sales Manager to oversee Mekeni's National
Capital Region Supermarket/Food Service and South Luzon operations. In addition to a
compensation and bene t package, Mekeni offered petitioner a car plan, under which one-
half of the cost of the vehicle is to be paid by the company and the other half to be
deducted from petitioner's salary. Mekeni's offer was contained in an Offer Sheet 5 which
was presented to petitioner. EHCcIT
Petitioner began his stint as Mekeni Regional Sales Manager on March 17, 2004. To
be able to effectively cover his appointed sales territory, Mekeni furnished petitioner with a
used Honda Civic car valued at P280,000.00, which used to be the service vehicle of
petitioner's immediate supervisor. Petitioner paid for his 50% share through salary
deductions of P5,000.00 each month.
Subsequently, Locsin resigned effective February 25, 2006. By then, a total of
P112,500.00 had been deducted from his monthly salary and applied as part of the
employee's share in the car plan. Mekeni supposedly put in an equivalent amount as its
share under the car plan. In his resignation letter, petitioner made an offer to purchase his
service vehicle by paying the outstanding balance thereon. The parties negotiated, but
could not agree on the terms of the proposed purchase. Petitioner thus returned the
vehicle to Mekeni on May 2, 2006.
Petitioner made personal and written follow-ups regarding his unpaid salaries,
commissions, bene ts, and offer to purchase his service vehicle. Mekeni replied that the
company car plan bene t applied only to employees who have been with the company for
ve years; for this reason, the balance that petitioner should pay on his service vehicle
stood at P116,380.00 if he opts to purchase the same.
On May 3, 2007, petitioner led against Mekeni and/or its President, Prudencio S.
Garcia, a Complaint 6 for the recovery of monetary claims consisting of unpaid salaries,
commissions, sick/vacation leave bene ts, and recovery of monthly salary deductions
which were earmarked for his cost-sharing in the car plan. The case was docketed in the
National Labor Relations Commission (NLRC), National Capital Region (NCR), Quezon City
as NLRC NCR CASE NO. 00-05-04139-07.
On October 30, 2007, Labor Arbiter Cresencio G. Ramos rendered a Decision, 7
decreeing as follows:
WHEREFORE, in the light of the foregoing premises, judgment is hereby
rendered directing respondents to turn-over to complainant . . . the subject vehicle
upon the said complainant's payment to them of the sum of P100,435.84.
SO ORDERED. 8
Ruling of the National Labor Relations Commission

On appeal, 9 the Labor Arbiter's Decision was reversed in a February 27, 2009
Decision 1 0 of the NLRC, thus:
WHEREFORE, premises considered, the appeal is hereby Granted. The
assailed Decision dated October 30, 2007 is hereby REVERSED and SET ASIDE
and a new one entered ordering respondent-appellee Mekeni Food Corporation to
pay complainant-appellee the following:
1. Unpaid Salary in the amount of P12,511.45; TaCDAH
2. Unpaid sick leave/vacation leave pay in the amount of P14,789.15;
3. Unpaid commission in the amount of P9,780.00; and

4. Reimbursement of complainant's payment under the car plan
agreement in the amount of P112,500.00; and
5. The equivalent share of the company as part of the complainant's

benefit under the car plan 50/50 sharing amounting to P112,500.00.
Respondent-Appellee Mekeni Food Corporation is hereby authorized to

deduct the sum of P4,736.50 representing complainant-appellant's cash advance
from his total monetary award.
All other claims are dismissed for lack of merit.

SO ORDERED. 1 1
The NLRC held that petitioner's amortization payments on his service vehicle
amounting to P112,500.00 should be reimbursed; if not, unjust enrichment would result, as
the vehicle remained in the possession and ownership of Mekeni. In addition, the
employer's share in the monthly car plan payments should likewise be awarded to
petitioner because it forms part of the latter's bene ts under the car plan. It held further
that Mekeni's claim that the company car plan bene t applied only to employees who have
been with the company for ve years has not been substantiated by its evidence, in which
case the car plan agreement should be construed in petitioner's favor.
Mekeni moved to reconsider, but in an April 30, 2009 Resolution, 1 2 the NLRC
sustained its original findings.
Ruling of the Court of Appeals
Mekeni led a Petition for Certiorari 1 3 with the CA assailing the NLRC's February 27,
2009 Decision, saying that the NLRC committed grave abuse of discretion in holding it
liable to petitioner as it had no jurisdiction to resolve petitioner's claims, which are civil in
nature. AIcECS
On January 27, 2010, the CA issued the assailed Decision, decreeing as follows:
WHEREFORE, the petition for certiorari is GRANTED . The Decision of the
National Labor Relations Commission dated 27 February 2009, in NLRC NCR
Case No. 00-05-04139-07, and its Resolution dated 30 April 2009 denying
reconsideration thereof, are MODIFIED in that the reimbursement of Locsin's
payment under the car plan in the amount of P112,500.00, and the payment to
him of Mekeni's 50% share in the amount of P112,500.00 are DELETED . The rest
of the decision is AFFIRMED .
SO ORDERED. 1 4
In arriving at the above conclusion, the CA held that the NLRC possessed jurisdiction
over petitioner's claims, including the amounts he paid under the car plan, since his
Complaint against Mekeni is one for the payment of salaries and employee bene ts. With
regard to the car plan arrangement, the CA applied the ruling in Elisco Tool Manufacturing
Corporation v. Court of Appeals, 1 5 where it was held that —
First. Petitioner does not deny that private respondent Rolando Lantan
acquired the vehicle in question under a car plan for executives of the Elizalde
group of companies. Under a typical car plan, the company advances the
purchase price of a car to be paid back by the employee through monthly
deductions from his salary. The company retains ownership of the motor vehicle
until it shall have been fully paid for. However, retention of registration of the car
in the company's name is only a form of a lien on the vehicle in the event that the
employee would abscond before he has fully paid for it, There are also
stipulations in car plan agreements to the effect that should the employment of
the employee concerned be terminated before all installments are fully paid, the
vehicle will be taken by the employer and all installments paid shall be considered
rentals per agreement. 1 6 cSITDa
In the absence of evidence as to the stipulations of the car plan arrangement

between Mekeni and petitioner, the CA treated petitioner's monthly contributions in the
total amount of P112,500.00 as rentals for the use of his service vehicle for the duration of
his employment with Mekeni. The appellate court applied Articles 1484-1486 of the Civil
Code, 1 7 and added that the installments paid by petitioner should not be returned to him
inasmuch as the amounts are not unconscionable. It made the following pronouncement:
Having used the car in question for the duration of his employment, it is
but fair that all of Locsin's payments be considered as rentals therefor which may
be forfeited by Mekeni. Therefore, Mekeni has no obligation to return these
payments to Locsin. Conversely, Mekeni has no right to demand the payment of
the balance of the purchase price from Locsin since the latter has already
surrendered possession of the vehicle. 1 8
Moreover, the CA held that petitioner cannot recover Mekeni's corresponding share
in the purchase price of the service vehicle, as this would constitute unjust enrichment on
the part of petitioner at Mekeni's expense.
The CA a rmed the NLRC judgment in all other respects. Petitioner led his Motion
for Partial Reconsideration, 1 9 but the CA denied the same in its April 23, 2010 Resolution.
Thus, petitioner led the instant Petition; Mekeni, on the other hand, took no further
action.
Issue
Petitioner raises the following solitary issue:
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS
ERRED IN NOT CONSIDERING THE CAR PLAN PRIVILEGE AS PART OF
THE COMPENSATION PACKAGE OFFERED TO PETITIONER AT THE
INCEPTION OF HIS EMPLOYMENT AND INSTEAD LIKENED IT TO A
CAR LOAN ON INSTALLMENT, IN SPITE OF THE ABSENCE OF
EVIDENCE ON RECORD. 2 0 HTASIa
Petitioner's Arguments
In his Petition and Reply, 2 1 petitioner mainly argues that the CA erred in treating his
monthly contributions to the car plan, totaling P112,500.00, as rentals for the use of his
service vehicle during his employment; the car plan which he availed of was a bene t and it
formed part of the package of economic bene ts granted to him when he was hired as
Regional Sales Manager. Petitioner submits that this is shown by the Offer Sheet which
was shown to him and which became the basis for his decision to accept the offer and
work for Mekeni.
Petitioner adds that the absence of documentary or other evidence showing the
terms and conditions of the Mekeni company car plan cannot justify a reliance on Mekeni's
self-serving claims that the full terms thereof applied only to employees who have been
with the company for at least ve years; in the absence of evidence, doubts should be
resolved in his favor pursuant to the policy of the law that affords protection to labor, as
well as the principle that all doubts should be construed to its benefit.
Finally, petitioner submits that the ruling in the Elisco Tool case cannot apply to his
case because the car plan subject of the said case involved a car loan, which his car plan
bene t was not; it was part of his compensation package, and the vehicle was an
important component of his work which required constant and uninterrupted mobility.
Petitioner claims that the car plan was in fact more bene cial to Mekeni than to him;
besides, he did not choose to avail of it, as it was simply imposed upon him. He concludes
that it is only just that his payments should be refunded and returned to him.
Petitioner thus prays for the reversal of the assailed CA Decision and Resolution, and
that the Court reinstate the NLRC's February 27, 2009 Decision.
Respondent's Arguments
In its Comment, 2 2 Mekeni argues that the Petition does not raise questions of law,
but merely of fact, which thus requires the Court to review anew issues already passed
upon by the CA — an unauthorized exercise given that the Supreme Court is not a trier of
facts, nor is it its function to analyze or weigh the evidence of the parties all over again. 2 3
It adds that the issue regarding the car plan and the conclusions of the CA drawn from the
evidence on record are questions of fact.
Mekeni asserts further that the service vehicle was merely a loan which had to be
paid through the monthly salary deductions. If it is not allowed to recover on the loan, this
would constitute unjust enrichment on the part of petitioner.
Our Ruling
The Petition is partially granted. ECaITc
To begin with, the Court notes that Mekeni did not le a similar petition questioning
the CA Decision; thus, it is deemed to have accepted what was decreed. The only issue
that must be resolved in this Petition, then, is whether petitioner is entitled to a refund of all
the amounts applied to the cost of the service vehicle under the car plan.
When the conclusions of the CA are grounded entirely on speculation, surmises and
conjectures, or when the inferences made by it are manifestly mistaken or absurd, its
findings are subject to review by this Court. 2 4
From the evidence on record, it is seen that the Mekeni car plan offered to petitioner
was subject to no other term or condition than that Mekeni shall cover one-half of its value,
and petitioner shall in turn pay the other half through deductions from his monthly salary.
Mekeni has not shown, by documentary evidence or otherwise, that there are other terms
and conditions governing its car plan agreement with petitioner. There is no evidence to
suggest that if petitioner failed to completely cover one-half of the cost of the vehicle, then
all the deductions from his salary going to the cost of the vehicle will be treated as rentals
for his use thereof while working with Mekeni, and shall not be refunded. Indeed, there is
no such stipulation or arrangement between them. Thus, the CA's reliance on Elisco Tool is
without basis, and its conclusions arrived at in the questioned decision are manifestly
mistaken. To repeat what was said in Elisco Tool —
First. Petitioner does not deny that private respondent Rolando Lantan
acquired the vehicle in question under a car plan for executives of the Elizalde
group of companies. Under a typical car plan, the company advances the
purchase price of a car to be paid back by the employee through monthly
deductions from his salary. The company retains ownership of the motor vehicle
until it shall have been fully paid for. However, retention of registration of the car
in the company's name is only a form of a lien on the vehicle in the event that the
employee would abscond before he has fully paid for it. There are also
stipulations in car plan agreements to the effect that should the
employment of the employee concerned be terminated before all
installments are fully paid, the vehicle will be taken by the employer
and all installments paid shall be considered rentals per agreement . 2 5
(Emphasis supplied)
It was made clear in the above pronouncement that installments made on the car plan
may be treated as rentals only when there is an express stipulation in the car plan
agreement to such effect. It was therefore patent error for the appellate court to
assume that, even in the absence of express stipulation, petitioner's payments on the
car plan may be considered as rentals which need not be returned.

Indeed, the Court cannot allow that payments made on the car plan should be
forfeited by Mekeni and treated simply as rentals for petitioner's use of the company
service vehicle. Nor may they be retained by it as purported loan payments, as it would
have this Court believe. In the rst place, there is precisely no stipulation to such effect in
their agreement. Secondly, it may not be said that the car plan arrangement between the
parties was a bene t that the petitioner enjoyed; on the contrary, it was an absolute
necessity in Mekeni's business operations, which bene ted it to the fullest extent: without
the service vehicle, petitioner would have been unable to rapidly cover the vast sales
territory assigned to him, and sales or marketing of Mekeni's products could not have
been booked or made fast enough to move Mekeni's inventory. Poor sales, inability to
market Mekeni's products, a high rate of product spoilage resulting from stagnant
inventory, and poor monitoring of the sales territory are the necessary consequences of
lack of mobility. Without a service vehicle, petitioner would have been placed at the mercy
of ine cient and unreliable public transportation; his o cial schedule would have been
dependent on the arrival and departure times of buses or jeeps, not to mention the
availability of seats in them. Clearly, without a service vehicle, Mekeni's business could only
prosper at a snail's pace, if not completely paralyzed. Its cost of doing business would be
higher as well. The Court expressed just such a view in the past. Thus —
In the case at bar, the disallowance of the subject car plan bene ts
would hamper the o cials in the performance of their functions to
promote and develop trade which requires mobility in the performance of
o cial business . Indeed, the car plan bene ts are supportive of the
implementation of the objectives and mission of the agency relative to
the nature of its operation and responsive to the exigencies of the service .
26 (Emphasis supplied)
Any bene t or privilege enjoyed by petitioner from using the service vehicle was
merely incidental and insigni cant, because for the most part the vehicle was under
Mekeni's control and supervision. Free and complete disposal is given to the petitioner
only after the vehicle's cost is covered or paid in full. Until then, the vehicle remains at the
beck and call of Mekeni. Given the vast territory petitioner had to cover to be able to
perform his work effectively and generate business for his employer, the service vehicle
was an absolute necessity, or else Mekeni's business would suffer adversely. Thus, it is
clear that while petitioner was paying for half of the vehicle's value, Mekeni was reaping the
full benefits from the use thereof.
In light of the foregoing, it is unfair to deny petitioner a refund of all his contributions
to the car plan. Under Article 22 of the Civil Code, "[e]very person who through an act of
performance by another, or any other means, acquires or comes into possession of
something at the expense of the latter without just or legal ground, shall return the same to
him." Article 2142 2 7 of the same Code likewise clari es that there are certain lawful,
voluntary and unilateral acts which give rise to the juridical relation of quasi-contract, to the
end that no one shall be unjustly enriched or bene ted at the expense of another. In the
absence of speci c terms and conditions governing the car plan arrangement between the
petitioner and Mekeni, a quasi-contractual relation was created between them.
Consequently, Mekeni may not enrich itself by charging petitioner for the use of its vehicle
which is otherwise absolutely necessary to the full and effective promotion of its business.
It may not, under the claim that petitioner's payments constitute rents for the use of the
company vehicle, refuse to refund what petitioner had paid, for the reasons that the car
plan did not carry such a condition; the subject vehicle is an old car that is substantially, if
not fully, depreciated; the car plan arrangement bene ted Mekeni for the most part; and
any personal benefit obtained by petitioner from using the vehicle was merely incidental.
Conversely, petitioner cannot recover the monetary value of Mekeni's counterpart
contribution to the cost of the vehicle; that is not property or money that belongs to him,
nor was it intended to be given to him in lieu of the car plan. In other words, Mekeni's share
of the vehicle's cost was not part of petitioner's compensation package. To start with, the
vehicle is an asset that belonged to Mekeni. Just as Mekeni is unjustly enriched by failing
to refund petitioner's payments, so should petitioner not be awarded the value of Mekeni's
counterpart contribution to the car plan, as this would unjustly enrich him at Mekeni's
expense. CcHDaA
There is unjust enrichment "when a person unjustly retains a bene t to the

loss of another, or when a person retains money or property of another against
the fundamental principles of justice, equity and good conscience." The principle
of unjust enrichment requires two conditions: (1) that a person is bene ted
without a valid basis or justi cation, and (2) that such bene t is derived at the
expense of another.
The main objective of the principle against unjust enrichment is to prevent
one from enriching himself at the expense of another without just cause or
consideration. . . . 2 8
WHEREFORE , the Petition is GRANTED IN PART . The assailed January 27, 2010
Decision and April 23, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 109550
a r e MODIFIED , in that respondent Mekeni Food Corporation is hereby ordered to
REFUND petitioner Antonio Locsin II's payments under the car plan agreement in the total
amount of P112,500.00.
Thus, except for the counterpart or equivalent share of Mekeni Food Corporation in
the car plan agreement amounting to P112,500.00, which is DELETED , the February 27,
2009 Decision of the National Labor Relations Commission is affirmed in all respects.
SO ORDERED.
Carpio, Brion, Perlas-Bernabe and Leonen, * JJ., concur.
Footnotes
*Per Special Order No. 1627 dated December 6, 2013.
1.Rollo, pp. 10-27.

2.C A rollo, pp. 210-218; penned by Associate Justice Ricardo R. Rosario and concurred in by
Associate Justices Jose C. Reyes, Jr. and Amy C. Lazaro-Javier.
3.Id. at 250-251.
4.Id. at 226-232.
5.Rollo, p. 39.
6.Records, p. 2.
7.Id. at 96-105.
8.Id. at 105.
9.Docketed as NLRC LAC No. 01-000047-08.
10.Records, pp. 184-191; penned by Commissioner Isabel G. Panganiban-Ortiguerra and
concurred in by Presiding Commissioner Benedicto R. Palacol and Commissioner Nieves
Vivar-de Castro.
11.Id. at 190-191.
12.Id. at 209-211.
13.CA rollo, pp. 3-28.
14.Id. at 217.
15.367 Phil. 242 (1999).
16.Id. at 252.
17.Art. 1484. In a contract of sale of personal property the price of which is payable in
installments, the vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should
the vendee's failure to pay cover two or more installments. In this case, he shall have no
further action against the purchaser to recover any unpaid balance of the price. Any
agreement to the contrary shall be void.
Art. 1485. The preceding article shall be applied to contracts purporting to be leases of
personal property with option to buy, when the lessor has deprived the lessee of the
possession or enjoyment of the thing.
Art 1486. In the cases referred to in the two preceding articles, a stipulation that the
installments or rents paid shall not be returned to the vendee or lessee shall be valid
insofar as the same may not be unconscionable under the circumstances.
18.CA rollo, p. 216.
19.Id. at 226-232.
20.Rollo, p. 19.
21.Id. at 197-203.
22.Id. at 185-195.
23.Citing Nicolas v. Court of Appeals, 238 Phil. 622 (1987).
24.Vda. de Dayao v. Heirs of Gavino Robles , G.R. No. 174830, July 31, 2009, 594 SCRA 620,
627.
25.Elisco Tool Manufacturing Corporation v. Court of Appeals, supra note 15 at 252.

26.Philippine International Trading Corporation v. Commission on Audit , 368 Phil. 478, 491
(1999).
27.Art. 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical relation of
quasi-contract to the end that no one shall be unjustly enriched or bene ted at the
expense of another.
28.Flores v. Lindo, Jr., G.R. No. 183984, April 13, 2011, 648 SCRA 772, 782-783.

THIRD DIVISION
[G.R. No. 189081. August 10, 2016.]
GLORIA S. DY , petitioner, vs. PEOPLE OF THE PHILIPPINES, MANDY

COMMODITIES CO., INC., represented by its President, WILLIAM
MANDY , respondents.
DECISION
JARDELEZA , J : p
Our law states that every person criminally liable for a felony is also civilly liable.
This civil liability ex delicto may be recovered through a civil action which, under our
Rules of Court, is deemed instituted with the criminal action. While they are actions
mandatorily fused, 1 they are, in truth, separate actions whose existences are not
dependent on each other. Thus, civil liability ex delicto survives an acquittal in a criminal
case for failure to prove guilt beyond reasonable doubt. However, the Rules of Court
limits this mandatory fusion to a civil action for the recovery of civil liability ex delicto. It,
by no means, includes a civil liability arising from a different source of obligation, as in
the case of a contract. Where the civil liability is ex contractu, the court hearing the
criminal case has no authority to award damages.
The Case
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
Petitioner Gloria S. Dy (petitioner) seeks the reversal of the decision of the Court of
Appeals (CA) dated February 25, 2009 (Assailed Decision) 2 ordering her to pay Mandy
Commodities Company, Inc. (MCCI) in the amount of P21,706,281.00. 3
The Facts
Petitioner was the former General Manager of MCCI. In the course of her
employment, petitioner assisted MCCI in its business involving several properties. One
such business pertained to the construction of warehouses over a property (Numancia
Property) that MCCI leased from the Philippine National Bank (PNB). Sometime in May
1996, in pursuit of MCCI's business, petitioner proposed to William Mandy (Mandy),
President of MCCI, the purchase of a property owned by Pantranco. As the transaction
involved a large amount of money, Mandy agreed to obtain a loan from the International
China Bank of Commerce (ICBC). Petitioner represented that she could facilitate the
approval of the loan. True enough, ICBC granted a loan to MCCI in the amount of
P20,000,000.00, evidenced by a promissory note. As security, MCCI also executed a
chattel mortgage over the warehouses in the Numancia Property. Mandy entrusted
petitioner with the obligation to manage the payment of the loan. 4
In February 1999, MCCI received a notice of foreclosure over the mortgaged
property due to its default in paying the loan obligation. 5 In order to prevent the
foreclosure, Mandy instructed petitioner to facilitate the payment of the loan. MCCI,
through Mandy, issued 13 Allied Bank checks and 12 AsiaTrust Bank checks in varying
amounts and in different dates covering the period from May 18, 1999 to April 4, 2000.
6 The total amount of the checks, which were all payable to cash, was P21,706,281.00.

Mandy delivered the checks to petitioner. Mandy claims that he delivered the checks
with the instruction that petitioner use the checks to pay the loan. 7 Petitioner, on the
other hand, testi ed that she encashed the checks and returned the money to Mandy. 8
ICBC eventually foreclosed the mortgaged property as MCCI continued to default in its
obligation to pay. Mandy claims that it was only at this point in time that he discovered
that not a check was paid to ICBC. 9
Thus, on October 7, 2002, MCCI, represented by Mandy, led a Complaint-
Af davit for Estafa 10 before the Of ce of the City Prosecutor of Manila. On March 3,
2004, an Information 11 was led against petitioner before the Regional Trial Court
(RTC) Manila.
After a full-blown trial, the RTC Manila rendered a decision 12 dated November
11, 2005 (RTC Decision) acquitting petitioner. The RTC Manila found that while
petitioner admitted that she received the checks, the prosecution failed to establish
that she was under any obligation to deliver them to ICBC in payment of MCCI's loan.
The trial court made this nding on the strength of Mandy's admission that he gave the
checks to petitioner with the agreement that she would encash them. Petitioner would
then pay ICBC using her own checks. The trial court further made a nding that Mandy
and petitioner entered into a contract of loan. 13 Thus, it held that the prosecution failed
to establish an important element of the crime of estafa — misappropriation or
conversion. However, while the RTC Manila acquitted petitioner, it ordered her to pay
the amount of the checks. The dispositive portion of the RTC Decision states —
WHEREFORE, the prosecution having failed to establish the guilt of the
accused beyond reasonable doubt, judgment is hereby rendered ACQUITTING
the accused of the offense charged. With costs de officio.
The accused is however civilly liable to the complainant for the amount
of P21,706,281.00.
SO ORDERED. 14
Petitioner filed an appeal 15 of the civil aspect of the RTC Decision with the CA. In
the Assailed Decision, 16 the CA found the appeal without merit. It held that the
acquittal of petitioner does not necessarily absolve her of civil liability. The CA said that
it is settled that when an accused is acquitted on the basis of reasonable doubt, courts
may still nd him or her civilly liable if the evidence so warrant. The CA explained that
the evidence on record adequately prove that petitioner received the checks as a loan
from MCCI. Thus, preventing the latter from recovering the amount of the checks would
constitute unjust enrichment. Hence, the Assailed Decision ruled —
WHEREFORE, in view of the foregoing, the appeal is DENIED. The
Decision dated November 11, 2005 of the Regional Trial Court, Manila, Branch
33 in Criminal Case No. 04-224294 which found Gloria Dy civilly liable to
William Mandy is AFFIRMED.
SO ORDERED . 17
The CA also denied petitioner's motion for reconsideration in a resolution 18
dated August 3, 2009.
Hence, this Petition for Review on Certiorari (Petition). Petitioner argues that
since she was acquitted for failure of the prosecution to prove all the elements of the
crime charged, there was therefore no crime committed. 19 As there was no crime, any
civil liability ex delicto cannot be awarded.
The Issues
The central issue is the propriety of making a nding of civil liability in a criminal
case for estafa when the accused is acquitted for failure of the prosecution to prove all
the elements of the crime charged.
The Ruling of the Court
We grant the petition.
Civil Liability Arising from Crime
Our laws recognize a bright line distinction between criminal and civil liabilities. A
crime is a liability against the state. It is prosecuted by and for the state. Acts
considered criminal are penalized by law as a means to protect the society from
dangerous transgressions. As criminal liability involves a penalty affecting a person's
liberty, acts are only treated criminal when the law clearly says so. On the other hand,
civil liabilities take a less public and more private nature. Civil liabilities are claimed
through civil actions as a means to enforce or protect a right or prevent or redress a
wrong. 20 They do not carry with them the imposition of imprisonment as a penalty.
Instead, civil liabilities are compensated in the form of damages.
Nevertheless, our jurisdiction recognizes that a crime has a private civil
component. Thus, while an act considered criminal is a breach of law against the State,
our legal system allows for the recovery of civil damages where there is a private
person injured by a criminal act. It is in recognition of this dual nature of a criminal act
that our Revised Penal Code provides that every person criminally liable is also civilly
liable. 21 This is the concept of civil liability ex delicto.
This is echoed by the New Civil Code when it recognizes acts or omissions
punished by law as a separate source of obligation. 22 This is reinforced by Article 30
of the same code which refers to the ling of a separate civil action to demand civil
liability arising from a criminal offense. 23
The Revised Penal Code eshes out this civil liability in Article 104 24 which
states that it includes restitution, reparation of damage caused and indemni cation for
consequential damages.
Rules of procedure for criminal
and civil actions involving the
same act or omission
The law and the rules of procedure provide for a precise mechanism in instituting
a civil action pertaining to an act or omission which is also subject of a criminal case.
Our Rules of Court prescribes a kind of fusion such that, subject to certain de ned
quali cations, when a criminal action is instituted, the civil action for the recovery of the
civil liability arising from the offense is deemed instituted as well. 25
However, there is an important difference between civil and criminal proceedings
that require a ne distinction as to how these twin actions shall proceed. These two
proceedings involve two different standards of proof. A criminal action requires proof
of guilt beyond reasonable doubt while a civil action requires a lesser quantum of proof,
that of preponderance of evidence. This distinction also agrees with the essential
principle in our legal system that while a criminal liability carries with it a corresponding
civil liability, they are nevertheless separate and distinct. In other words, these two
liabilities may co-exist but their existence is not dependent on each other. 26
The Civil Code states that when an accused in a criminal prosecution is acquitted
on the ground that his guilt has not been proven beyond reasonable doubt, a civil action
for damages for the same act or omission may be led. In the latter case, only
preponderance of evidence is required. 27 This is supported by the Rules of Court which
provides that the extinction of the criminal action does not result in the extinction of the
corresponding civil action. 28 The latter may only be extinguished when there is a
"finding in a final judgment in the criminal action that the act or omission from which the
civil liability may arise did not exist." 29 Consistent with this, the Rules of Court requires
that in judgments of acquittal, the court must state whether "the evidence of the
prosecution absolutely failed to prove the guilt of the accused or merely failed to prove
his guilt beyond reasonable doubt. In either case, the judgment shall determine if the
act or omission from which the civil liability might arise did not exist." 30
Thus, whether an exoneration from the criminal action should affect the
corresponding civil action depends on the varying kinds of acquittal. In Manantan v.
Court of Appeals, 31 we explained —
Our law recognizes two kinds of acquittal, with different effects on the
civil liability of the accused. First is an acquittal on the ground that the accused
is not the author of the act or omission complained of. This instance closes the
door to civil liability, for a person who has been found to be not the perpetrator
of any act or omission cannot and can never be held liable for such act or
omission. There being no delict, civil liability ex delicto is out of the question,
and the civil action, if any, which may be instituted must be based on grounds
other than the delict complained of. This is the situation contemplated in Rule
111 of the Rules of Court. The second instance is an acquittal based on
reasonable doubt on the guilt of the accused. In this case, even if the guilt of the
accused has not been satisfactorily established, he is not exempt from civil
liability which may be proved by preponderance of evidence only. This is the
situation contemplated in Article 29 of the Civil Code, where the civil action for
damages is "for the same act or omission." Although the two actions have
different purposes, the matters discussed in the civil case are similar to those
discussed in the criminal case. However, the judgment in the criminal
proceeding cannot be read in evidence in the civil action to establish any fact
there determined, even though both actions involve the same act or omission.
The reason for this rule is that the parties are not the same and secondarily,
different rules of evidence are applicable. Hence, notwithstanding herein
petitioner's acquittal, the Court of Appeals in determining whether Article 29
applied, was not precluded from looking into the question of petitioner's
negligence or reckless imprudence. 32
In Dayap v. Sendiong , 33 we further said —
The acquittal of the accused does not automatically preclude a judgment
against him on the civil aspect of the case. The extinction of the penal action
does not carry with it the extinction of the civil liability where: (a) the acquittal is
based on reasonable doubt as only preponderance of evidence is required; (b)
the court declares that the liability of the accused is only civil; and (c) the civil
liability of the accused does not arise from or is not based upon the crime of
which the accused is acquitted. However, the civil action based on delict may be
deemed extinguished if there is a nding on the nal judgment in the criminal
action that the act or omission from which the civil liability may arise did not
exist or where the accused did not commit the acts or omission imputed to him.
34
Hence, a civil action filed for the purpose of enforcing civil liability ex delicto, even
if mandatorily instituted with the corresponding criminal action, survives an acquittal
when it is based on the presence of reasonable doubt. In these instances, while the
evidence presented does not establish the fact of the crime with moral certainty, the
civil action still prevails for as long as the greater weight of evidence tilts in favor of a
nding of liability. This means that while the mind of the court cannot rest easy in
penalizing the accused for the commission of a crime, it nevertheless nds that he or
she committed or omitted to perform acts which serve as a separate source of
obligation. There is no suf cient proof that the act or omission is criminal beyond
reasonable doubt, but there is a preponderance of evidence to show that the act or
omission caused injury which demands compensation.
Civil Liability Ex Delicto in Estafa Cases
Our laws penalize criminal fraud which causes damage capable of pecuniary
estimation through estafa under Article 315 of the Revised Penal Code. In general, the
elements of estafa are:
(1) That the accused defrauded another (a) by abuse of con dence, or (b) by
means of deceit; and
(2) That damage or prejudice capable of pecuniary estimation is caused to
the offended party or third person.
The essence of the crime is the unlawful abuse of con dence or deceit in order
to cause damage. As this Court previously held, "the element of fraud or bad faith is
indispensable." 35 Our law abhors the act of defrauding another person by abusing his
trust or deceiving him, such that, it criminalizes this kind of fraud.
Article 315 of the Revised Penal Code identi es the circumstances which
constitute estafa. Article 315, paragraph 1 (b) states that estafa is committed by abuse
of confidence —
Art. 315. Swindling (estafa) . — . . . (b) By misappropriating or converting,
to the prejudice of another, money, goods, or any other personal property
received by the offender in trust or on commission, or for administration, or
under any other obligation involving the duty to make delivery of or to return the
same, even though such obligation be totally or partially guaranteed by a bond;
or by denying having received such money, goods, or other property.
In this kind of estafa, the fraud which the law considers as criminal is the act of
misappropriation or conversion. When the element of misappropriation or conversion is
missing, there can be no estafa. In such case, applying the foregoing discussions on
civil liability ex delicto, there can be no civil liability as there is no act or omission from
which any civil liability may be sourced. However, when an accused is acquitted
because a reasonable doubt exists as to the existence of misappropriation or
conversion, then civil liability may still be awarded. This means that, while there is
evidence to prove fraud, such evidence does not suf ce to convince the court to the
point of moral certainty that the act of fraud amounts to estafa. As the act was
nevertheless proven, albeit without suf cient proof justifying the imposition of any
criminal penalty, civil liability exists.
In this case, the RTC Manila acquitted petitioner because the prosecution failed
to establish by suf cient evidence the element of misappropriation or conversion.
There was no adequate evidence to prove that Mandy gave the checks to petitioner
with the instruction that she will use them to pay the ICBC loan. Citing Mandy's own
testimony in open court, the RTC Manila held that when Mandy delivered the checks to
petitioner, their agreement was that it was a "sort of loan." 36 In the dispositive portion
of the RTC Decision, the RTC Manila ruled that the prosecution "failed to establish the
guilt of the accused beyond reasonable doubt." 37 It then proceeded to order petitioner
to pay the amount of the loan.
The ruling of the RTC Manila was af rmed by the CA. It said that "[t]he acquittal
of Gloria Dy is anchored on the ground that her guilt was not proved beyond reasonable
doubt — not because she is not the author of the act or omission complained of. . . . The
trial court found no trickery nor deceit in obtaining money from the private complainant;
instead, it concluded that the money obtained was undoubtedly a loan." 38
Our jurisprudence on this matter diverges.
Earlier cases ordered the dismissal of the civil action for recovery of civil liability
ex delicto whenever there is a nding that there was no estafa but rather an obligation
to pay under a contract. In People v. Pantig , 39 this Court af rmed the ruling of the
lower court acquitting Pantig, but revoked the portion sentencing him to pay the
offended party the amount of money alleged to have been obtained through false and
fraudulent representations, thus —
The trial court found as a fact that the sum of P1,200, ordered to be paid
in the judgment of acquittal, was received by the defendant-appellant as loan.
This nding is inconsistent with the existence of the criminal act charged in the
information. The liability of the defendant for the return of the amount
so received arises from a civil contract, not from a criminal act, and
may not be enforced in the criminal case .
The portion of the judgment appealed from, which orders the defendant-
appellant to pay the sum of P1,200 to the offended party, is hereby revoked,
without prejudice to the ling of a civil action for the recovery of the said
amount. 40
This was also the import of the ruling in People v. Singson. 41 In that case, this
Court found that "the evidence [was] not suf cient to establish the existence of fraud or
deceit on the part of the accused. . . . And when there is no proven deceit or fraud, there
is no crime of estafa." 42 While we also said that the established facts may prove
Singson's civil liability (obligation to pay under a contract of sale), we nevertheless
made no nding of civil liability because "our mind cannot rest easy on the certainty of
guilt" 43 considering the above nding. The dispositive portion stated that Singson is
acquitted "without prejudice to any civil liability which may be established in a civil case
against her." 44
However, our jurisprudence on the matter appears to have changed in later years.
In Eusebio-Calderon v. People , 45 this Court af rmed the nding of the CA that
Calderon "did not employ trickery or deceit in obtaining money from the private
complainants, instead, it concluded that the money obtained was undoubtedly loans for
which [Calderon] paid interest." 46 Thus, this Court upheld Calderon's acquittal of estafa,
but found her civilly liable for the principal amount borrowed from the private
complainants. 47
The ruling was similar in People v. Cuyugan. 48 In that case, we acquitted
Cuyugan of estafa for failure of the prosecution to prove fraud. We held that the
transaction between Cuyugan and private complainants was a loan to be used by
Cuyugan in her business. Thus, this Court ruled that Cuyugan has the obligation, which is
civil in character, to pay the amount borrowed. 49
We hold that the better rule in ascertaining civil liability in estafa cases is that
pronounced in Pantig and Singson. The rulings in these cases are more in accord with
the relevant provisions of the Civil Code, and the Rules of Court. They are also logically
consistent with this Court's pronouncement in Manantan.
Under Pantig and Singson, whenever the elements of estafa are not established,
and that the delivery of any personal property was made pursuant to a contract, any
civil liability arising from the estafa cannot be awarded in the criminal case. This is
because the civil liability arising from the contract is not civil liability ex delicto, which
arises from the same act or omission constituting the crime. Civil liability ex delicto is
the liability sought to be recovered in a civil action deemed instituted with the criminal
case.
The situation envisioned in the foregoing cases, as in this case, is civil liability ex
contractu where the civil liability arises from an entirely different source of obligation.
Therefore, it is not the type of civil action deemed instituted in the criminal case, and
consequently must be led separately. This is necessarily so because whenever the
court makes a nding that the elements of estafa do not exist, it effectively says that
there is no crime. There is no act or omission that constitutes criminal fraud. Civil
liability ex delicto cannot be awarded as it cannot be sourced from something that
does not exist.
When the court nds that the source of obligation is in fact, a contract, as in a
contract of loan, it takes a position completely inconsistent with the presence of
estafa. In estafa, a person parts with his money because of abuse of con dence or
deceit. In a contract, a person willingly binds himself or herself to give something or to
render some service. 50 In estafa, the accused's failure to account for the property
received amounts to criminal fraud. In a contract, a party's failure to comply with his
obligation is only a contractual breach. Thus, any nding that the source of obligation is
a contract negates estafa. The nding, in turn, means that there is no civil liability ex
delicto. Thus, the rulings in the foregoing cases are consistent with the concept of
fused civil and criminal actions, and the different sources of obligations under our laws.
We apply this doctrine to the facts of this case. Petitioner was acquitted by the
RTC Manila because of the absence of the element of misappropriation or conversion.
The RTC Manila, as af rmed by the CA, found that Mandy delivered the checks to
petitioner pursuant to a loan agreement. Clearly, there is no crime of estafa. There is no
proof of the presence of any act or omission constituting criminal fraud. Thus, civil
liability ex delicto cannot be awarded because there is no act or omission punished by
law which can serve as the source of obligation. Any civil liability arising from the loan
takes the nature of a civil liability ex contractu. It does not pertain to the civil action
deemed instituted with the criminal case.
I n Manantan, this Court explained the effects of this result on the civil liability
deemed instituted with the criminal case. At the risk of repetition, Manantan held that
when there is no delict, "civil liability ex delicto is out of the question, and the civil action,
if any, which may be instituted must be based on grounds other than the delict
complained of." 51 In Dy's case, the civil liability arises out of contract — a different
source of obligation apart from an act or omission punished by law — and must be
claimed in a separate civil action.
Violation of Due Process
We further note that the evidence on record never fully established the terms of
this loan contract. As the trial before the RTC Manila was focused on proving estafa, the
loan contract was, as a consequence, only tangentially considered. This provides
another compelling reason why the civil liability arising from the loan should be
instituted in a separate civil case. A civil action for collection of sum of money led
before the proper court will provide for a better venue where the terms of the loan and
other relevant details may be received. While this may postpone a warranted recovery
of the civil liability, this Court deems it more important to uphold the principles
underlying the inherent differences in the various sources of obligations under our law,
and the rule that fused actions only refer to criminal and civil actions involving the same
act or omission. These legal tenets play a central role in this legal system. A confusion
of these principles will ultimately jeopardize the interests of the parties involved.
Actions focused on proving estafa is not the proper vehicle to thresh out civil liability
arising from a contract. 52 The Due Process Clause of the Constitution dictates that a
civil liability arising from a contract must be litigated in a separate civil action.
Section 1 of the Bill of Rights states that no person shall be deprived of property
without due process of law. This provision protects a person's right to both substantive
and procedural due process. Substantive due process looks into the validity of a law
and protects against arbitrariness. 53 Procedural due process, on the other hand,
guarantees procedural fairness. 54 It requires an ascertainment of "what process is due,
when it is due, and the degree of what is due." 55 This aspect of due process is at the
heart of this case.
In general terms, procedural due process means the right to notice and hearing.
56 More speci cally, our Rules of Court provides for a set of procedures through which
a person may be noti ed of the claims against him or her as well as methods through
which he or she may be given the adequate opportunity to be heard.
The Rules of Court requires that any person invoking the power of the judiciary to
protect or enforce a right or prevent or redress a wrong 57 must le an initiatory
pleading which embodies a cause of action, 58 which is de ned as the act or omission
by which a party violates a right of another. 59 The contents of an initiatory pleading
alleging a cause of action will vary depending on the source of the obligation involved.
In the case of an obligation arising from a contract, as in this case, the cause of action
in an initiatory pleading will involve the duties of the parties to the contract, and what
particular obligation was breached. On the other hand, when the obligation arises from
an act or omission constituting a crime, the cause of action must necessarily be
different. In such a case, the initiatory pleading will assert as a cause of action the act
or omission of respondent, and the speci c criminal statute he or she violated. Where
the initiatory pleading fails to state a cause of action, the respondent may le a motion
to dismiss even before trial. 60 These rules embody the fundamental right to notice
under the Due Process Clause of the Constitution.
In a situation where a court (in a fused action for the enforcement of criminal and
civil liability) may validly order an accused-respondent to pay an obligation arising from
a contract, a person's right to be noti ed of the complaint, and the right to have the
complaint dismissed if there is no cause of action, are completely defeated. In this
event, the accused-respondent is completely unaware of the nature of the liability
claimed against him or her at the onset of the case. The accused-respondent will not
have read any complaint stating the cause of action of an obligation arising from a
contract. All throughout the trial, the accused-respondent is made to believe that
should there be any civil liability awarded against him or her, this liability is rooted from
the act or omission constituting the crime. The accused-respondent is also deprived of
the remedy of having the complaint dismissed through a motion to dismiss before trial.
In a fused action, the accused-respondent could not have availed of this remedy
because he or she was not even given an opportunity to ascertain what cause of action
to look for in the initiatory pleading. In such a case, the accused-respondent is
blindsided. He or she could not even have prepared the appropriate defenses and
evidence to protect his or her interest. This is not the concept of fair play embodied in
the Due Process Clause. It is a clear violation of a person's right to due process.
The Rules of Court also allows a party to a civil action certain remedies that
enable him or her to effectively present his or her case. A party may le a cross-claim, a
counterclaim or a third-party complaint. 61 The Rules of Court prohibits these remedies
in a fused civil and criminal case. 62 The Rules of Court requires that any cross-claim,
counterclaim or third-party complaint must be instituted in a separate civil action. 63 In
a legal regime where a court may order an accused in a fused action to pay civil liability
arising from a contract, the accused-respondent is completely deprived of the remedy
to le a cross-claim, a counterclaim or a third-party complaint. This — coupled with an
accused-respondent's inability to adequately prepare his or her defense because of
lack of adequate notice of the claims against him or her — prevents the accused-
respondent from having any right to a meaningful hearing. The right to be heard under
the Due Process Clause requires not just any kind of an opportunity to be heard. It
mandates that a party to a case must have the chance to be heard in a real and
meaningful sense. It does not require a perfunctory hearing, but a court proceeding
where the party may adequately avail of the procedural remedies granted to him or her.
A court decision resulting from this falls short of the mandate of the Due Process
Clause.
Indeed, the language of the Constitution is clear. No person shall be deprived of
property without due process of law. Due Process, in its procedural sense, requires, in
essence, the right to notice and hearing. These rights are further fleshed out in the Rules
of Court. The Rules of Court enforces procedural due process because, to repeat the
words of this Court in Secretary of Justice v. Lantion, it provides for "what process is
due, when it is due, and the degree of what is due." 64 A court ordering an accused in a
fused action to pay his or her contractual liability deprives him or her of his or her
property without the right to notice and hearing as expressed in the procedures and
remedies under the Rules of Court. Thus, any court ruling directing an accused in a
fused action to pay civil liability arising from a contract is one that completely
disregards the Due Process Clause. This ruling must be reversed and the Constitution
upheld.
Conclusion
The lower courts erred when they ordered petitioner to pay her civil obligation
arising from a contract of loan in the same criminal case where she was acquitted on
the ground that there was no crime. Any contractual obligation she may have must be
litigated in a separate civil action involving the contract of loan. We clarify that in cases
where the accused is acquitted on the ground that there is no crime, the civil action
deemed instituted with the criminal case cannot prosper precisely because there is no
delict from which any civil obligation may be sourced. The peculiarity of this case is the
nding that petitioner, in fact, has an obligation arising from a contract. This civil action
arising from the contract is not necessarily extinguished. It can be instituted in the
proper court through the proper civil action.
We note that while there is no written contract of loan in this case, there is an oral
contract of loan which must be brought within six years. 65 Under the facts of the case,
it appears that any breach in the obligation to pay the loan may have happened between
1996 and 1999, or more than six years since this case has been instituted. This
notwithstanding, we nd that the civil action arising from the contract of loan has not
yet prescribed. Article 1150 of the Civil Code states —
Art. 1150. The time for prescription for all kinds of actions, when
there is no special provision which ordains otherwise, shall be counted from the
day they may be brought.
We held in numerous cases that it is the legal possibility of bringing the action
that determines the starting point for the computation of the period of prescription. 67
We highlight the unique circumstances surrounding this case. As discussed in this
decision, there has been diverse jurisprudence as to the propriety of ordering an
accused to pay an obligation arising from a contract in the criminal case where the
accused was acquitted on the ground that there is no crime. Litigants, such as MCCI,
cannot be blamed for relying on prior rulings where the recovery on a contract of loan in
a criminal case for estafa was allowed. We have found the opportunity to clarify this
matter through this decision. As it is only now that we delineate the rules governing the
fusion of criminal and civil actions pertaining to estafa, it is only upon the promulgation
of this judgment that litigants have a clear understanding of the proper recourse in
similar cases. We therefore rule that insofar as MCCI is concerned, the ling of an
action, if any (that may be sourced from the contract of loan), becomes a legal
possibility only upon the nality of this decision which de nitively ruled upon the
principles on fused actions.
We add, however, that upon nality of this decision, prospective litigants should
become more circumspect in ascertaining their course of action in similar cases.
Whenever a litigant erroneously pursues an estafa case, and the accused is
subsequently acquitted because the obligation arose out of a contract, the prescriptive
period will still be counted from the time the cause of action arose. In this eventuality, it
is probable that the action has already prescribed by the time the criminal case shall
have been completed. This possibility demands that prospective litigants do not
haphazardly pursue the ling of an estafa case in order to force an obligor to pay his or
her obligation with the threat of criminal conviction. It compels litigants to be honest
and fair in their judgment as to the proper action to be led. This ruling should deter
litigants from turning to criminal courts as their collection agents, and should provide a
disincentive to the practice of ling of criminal cases based on unfounded grounds in
order to provide a litigant a bargaining chip in enforcing contracts.
WHEREFORE , in view of the foregoing, the Petition is GRANTED . The Decision
of the CA dated February 25, 2009 is REVERSED . This is however, without prejudice to
any civil action which may be filed to claim civil liability arising from the contract.
SO ORDERED.
Velasco, Jr., Peralta, Perez and Reyes, JJ., concur.
Footnotes
1. Bautista, The Confusing Fusion of A Civil Claim in a Criminal Proceeding, Phil. L.J 640
(2004), pp. 361-401.
2. Penned by Arcangelita M. Romilla-Lontok and concurred in by Associate Justices Jose na
Guevara-Salonga and Romeo F. Barza, rollo, pp. 39-48.
3. Id. at 41, 48.
4. Records, pp. 407-409.
5. Id. at 409.
6. Id. at 452-476.
7. TSN, July 12, 2004, p. 44.
8. TSN, May 4, 2005, p. 32.
9. Records, pp. 409-410.
10. Id. at 13-23.
11. Id. at 1-3.
12. Id. at 406-417.

13. Id. at 415-416.
14. Id. at 417.
15. Rollo, pp. 68-259.
16. Supra note 2.
17. Rollo, p. 48, emphasis in the original.

18. Id. at 67.
19. Id. at 21-27.
20. RULES OF COURT, Rule 1, Sec. 3, par. (a).
21. REVISED PENAL CODE, Art. 100.
22. CIVIL CODE, Art. 1157. Obligations arise from:

1. Law;
2. Contracts;
3. Quasi-contracts;
4. Acts or omission punished by law; and
5. Quasi-delicts.
23. CIVIL CODE, Art. 30. When a separate civil action is brought to demand civil liability
arising from a criminal offense, and no criminal proceedings are instituted during the
pendency of the civil case, a preponderance of evidence shall likewise be sufficient to
prove the act complained of.
24. REVISED PENAL CODE, Art. 104. What is included in civil liability . — The civil liability
established in articles 100, 101, 102 and 103 of this Code includes:
1. Restitution;
2. Reparation of the damage caused;

3. Indemnification for consequential damages.
25. RULES OF COURT, Rule 111, Sec. 1, par. (a). See also footnote 1.
26. Supra note 1.

27. CIVIL CODE, Art. 29. When the accused in a criminal prosecution is acquitted on the
ground that his guilt has not been proved beyond reasonable doubt, a civil action for
damages for the same act or omission may be instituted. Such action requires only a
preponderance of evidence. Upon motion of the defendant, the court may require the
plaintiff to le a bond to answer for damages in case the complaint should be found
to be malicious.
If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court
shall so declare. In the absence of any declaration to that effect, it may be inferred
from the text of the decision whether or not the acquittal is due to that ground.
28. RULES OF COURT, Rule 111, Sec. 2. When separate civil action is suspended. — After the
criminal action has been commenced, the separate civil action arising therefrom
cannot be instituted until final judgment has been entered in the criminal action.
If the criminal action is led after the said civil action has already been instituted, the latter
shall be suspended in whatever stage it may be found before judgment on the merits.
The suspension shall last until nal judgment is rendered in the criminal action.
Nevertheless, before judgment on the merits is rendered in the civil action, the same
may, upon motion of the offended party, be consolidated with the criminal action in
the court trying the criminal action. In case of consolidation, the evidence already
adduced in the civil action shall be deemed automatically reproduced in the criminal
action without prejudice to the right of the prosecution to cross-examine the
witnesses presented by the offended party in the criminal case and of the parties to
present additional evidence. The consolidated criminal and civil actions shall be tried
and decided jointly.
During the pendency of the criminal action, the running of the period of prescription of the
civil action which cannot be instituted separately or whose proceeding has been
suspended shall be tolled.
The extinction of the penal action does not carry with it extinction of the civil action.
However, the civil action based on delict may be deemed extinguished if there is a
nding in a nal judgment in the criminal action that the act or omission from which
the civil liability may arise did not exist.
29. Id.
30. RULES OF COURT, Rule 120, Sec. 2.
31. G.R. No. 107125, January 29, 2001, 350 SCRA 387.
32. Id. at 397-398.

33. G.R. No. 177960, January 29, 2009, 577 SCRA 134.
34. Id. at 148.

35. People v. Singson, G.R. No. 75920, November 12, 1992, 215 SCRA 534, 538.
36. Records, pp. 415-416.
37. Id. at 417.

38. Rollo, p. 45.
39. 97 Phil. 748 (1955).

40. Id. at 750, emphasis supplied.
41. G.R. No. 75920, November 12, 1992, 215 SCRA 534.
42. Id. at 538-539.
43. Id. at 539.
44. Id; See also United States v. Ador Dionisio , 35 Phil. 141, 143-144 (1916). In this case,
while this Court convicted the accused for estafa, it refused to order him to pay the
civil liabilities claimed by private complainant, explaining that —
But the amount of the hire cannot be recovered by way of civil damages in these
proceedings. The amount due under the rental contract may properly be recovered in
a separate civil action; but it cannot be held to be included in the civil damages
(perjuicios) arising out of the crime of estafa of which the accused is convicted in
this criminal action. (Art. 119, Penal Code.)
xxx xxx xxx
. . . The indebtedness under the rental contract was and is a thing wholly apart
from and independent of the crime of estafa committed by the accused. No
direct causal relation can be traced between them, and in the absence of such a
relation, a judgment for the amount of the indebtedness, with subsidiary
imprisonment in case of insolvency and failure to pay the amount of the judgment,
cannot properly be included in a judgment in the criminal action for the civil damages
(perjuicios) arising from or consequent upon the commission of the crime of which
the accused is convicted. (Emphasis supplied.)
45. G.R. No. 158495, October 21, 2004, 441 SCRA 137.
46. Id. at 147.
47. Id. at 149, with modification on the amount of the civil liability.
48. G.R. Nos. 146641-43, November 18, 2002, 392 SCRA 140.
49. Id. at 151.

50. CIVIL CODE, Art. 1305.
51. Supra note 31 at 397.
52. See the dissenting opinion of Justice Johns in Wise & Co. v. Larion, 45 Phil. 314 (1923).
53. Gamboa v. Teves, G.R. No. 176579, June 28, 2011, 652 SCRA 690.
54. Id.
55. Secretary of Justice v. Lantion, G.R. No. 139465, October 17, 2000, 343 SCRA 377, 392.
56. Secretary of Justice v. Lantion, G.R. No. 139465, January 18, 2000, 322 SCRA 160.

58. RULES OF COURT, Rule 1, Sec. 5; Rule 2, Sec. 1.
59. RULES OF COURT, Rule 2, Sec. 1.
60. RULES OF COURT, Rule 16, Sec. 1, par. (g).

61. RULES OF COURT, Rule 6, Secs. 8, 9 & 11.

63. Id.
64. Supra note 55.

65. CIVIL CODE, Art. 1145. The following actions must be commenced within six years:
1. Upon an oral contract;

xxx xxx xxx
66. Note from the Publisher: Copied verbatim from the of cial copy. Missing footnote
reference and footnote text.
67. Espanol v. Chairman, Philippine Veterans Administration, G.R. No. L-44616, June 29,
1985, 137 SCRA 314; Tolentino v. Court of Appeals , G.R. No. L-41427, June 10, 1988,
162 SCRA 66; Khe Hong Cheng v. Court of Appeals , G.R. No. 144169, March 28, 2001,
355 SCRA 701.

SECOND DIVISION
[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.
SYLLABUS
1. CRIMINAL LAW; SUBSIDIARY CIVIL LIABILITY OF AN EMPLOYER;

REQUISITES. — 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 satis es all these
requirements.
2. ID.; ID.; MAY BE DETERMINED AND ENFORCED IN THE CRIMINAL CASE AS
PART OF THE EXECUTION PROCEEDINGS. — 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.
3. ID.; ID.; ID.; GRANT OF A MOTION FOR A SUBSIDIARY WRIT OF EXECUTION
INCUMBENT UPON THE COURT UPON CONVICTION OF THE EMPLOYEE. — 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
nal 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 unsatis ed due to the
employee's insolvency.
4. REMEDIAL LAW; EXECUTION AND SATISFACTION OF JUDGMENTS;
GENERAL SUPERVISION OF COURTS OVER ITS PROCESS OF EXECUTION; CARRIES
WITH IT THE RIGHT DETERMINE TO EVERY QUESTION OF FACT AND LAW. — This
Court held in the earlier case of Pajarito v. Señeris, 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."
5. CRIMINAL LAW; SUBSIDIARY LIABILITY OF THE EMPLOYEE; SEPARATE
COMPLAINT AGAINST THE EMPLOYER NOT NECESSARY. — The ling 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. Señeris, 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."
DECISION
PARAS , J : p
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 gured 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 re ected in the medico-legal certi cate and
sustained injuries which required medical attention for a period of (3) three months. LLjur
An information for Reckless Imprudence Resulting to Serious Physical Injuries

was led 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, nding 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 P1,500.00 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 P10,000.00, compensatory damages at P6,186.40, and attorney's fees
of P5,000.00. The appellate court, on January 20, 1988, modi ed the trial court's
decision, granting the appellant moral damages in the amount of Five Thousand Pesos
(P5,000.00), 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 unsatis ed due to the insolvency of the accused as
shown by the sheriff's 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 nal 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. Señeris, 87 SCRA 275, which
enunciates that "the subsidiary liability of the owner-operator is xed by the judgment,
because if a case were to be led 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. LibLex

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. Señeris, 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,
modi ed, 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 net 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. Señeris 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.
Señeris, 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 ling 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. Señeris, 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 nal 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. cdrep
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera, J., On leave.

SECOND DIVISION
[G.R. No. 182356. December 4, 2013.]
DRA. LEILA A. DELA LLANA , petitioner, vs . REBECCA BIONG, doing

business under the name and style of Pongkay Trading ,respondent.
DECISION
BRION , J : p
Every case essentially turns on two basic questions: questions of fact and questions
of law. Questions of fact are for the parties and their counsels to respond to, based on
what supporting facts the legal questions require; the court can only draw conclusion from
the facts or evidence adduced. When the facts are lacking because of the de ciency of
presented evidence, then the court can only draw one conclusion: that the case must fail
for lack of evidentiary support.
The present case is one such case as Dra. Leila A. dela Llana's (petitioner) petition
for review on certiorari 1 challenging the February 11, 2008 decision 2 and the March 31,
2008 resolution 3 of the Court of Appeals (CA) in CA-G.R. CV No. 89163.
The Factual Antecedents
On March 30, 2000, at around 11:00 p.m., Juan dela Llana was driving a 1997 Toyota
Corolla car along North Avenue, Quezon City. 4 His sister, Dra. dela Llana, was seated at the
front passenger seat while a certain Calimlim was at the backseat. 5 Juan stopped the car
across the Veterans Memorial Hospital when the signal light turned red. A few seconds
after the car halted, a dump truck containing gravel and sand suddenly rammed the car's
rear end, violently pushing the car forward. Due to the impact, the car's rear end collapsed
and its rear windshield was shattered. Glass splinters ew, puncturing Dra. dela Llana.
Apart from these minor wounds, Dra. dela Llana did not appear to have suffered from any
other visible physical injuries. 6 ACIEaH
The tra c investigation report dated March 30, 2000 identi ed the truck driver as
Joel Primero. It stated that Joel was recklessly imprudent in driving the truck. 7 Joel later
revealed that his employer was respondent Rebecca Biong, doing business under the
name and style of "Pongkay Trading" and was engaged in a gravel and sand business. 8
In the rst week of May 2000, Dra. dela Llana began to feel mild to moderate pain on
the left side of her neck and shoulder. The pain became more intense as days passed by.
Her injury became more severe. Her health deteriorated to the extent that she could no
longer move her left arm. On June 9, 2000, she consulted with Dr. Rosalinda Milla, a
rehabilitation medicine specialist, to examine her condition. Dr. Milla told her that she
suffered from a whiplash injury, an injury caused by the compression of the nerve running
to her left arm and hand. Dr. Milla required her to undergo physical therapy to alleviate her
condition.
Dra. dela Llana's condition did not improve despite three months of extensive
physical therapy. 9 She then consulted other doctors, namely, Drs. Willie Lopez, Leonor
Cabral-Lim and Eric Flores, in search for a cure. Dr. Flores, a neuro-surgeon, nally
suggested that she undergo a cervical spine surgery to release the compression of her
nerve. On October 19, 2000, Dr. Flores operated on her spine and neck, between the C5 and
the C6 vertebrae. 1 0 The operation released the impingement of the nerve, but
incapacitated Dra. dela Llana from the practice of her profession since June 2000 despite
the surgery. 1 1
Dra. dela Llana, on October 16, 2000, demanded from Rebecca compensation for
her injuries, but Rebecca refused to pay. 1 2 Thus, on May 8, 2001, Dra. dela Llana sued
Rebecca for damages before the Regional Trial Court of Quezon City (RTC). She alleged
that she lost the mobility of her arm as a result of the vehicular accident and claimed
P150,000.00 for her medical expenses (as of the ling of the complaint) and an average
monthly income of P30,000.00 since June 2000. She further prayed for actual, moral, and
exemplary damages as well as attorney's fees. 1 3
In defense, Rebecca maintained that Dra. dela Llana had no cause of action against
her as no reasonable relation existed between the vehicular accident and Dra. dela Llana's
injury. She pointed out that Dra. dela Llana's illness became manifest one month and one
week from the date of the vehicular accident. As a counterclaim, she demanded the
payment of attorney's fees and costs of the suit. 1 4
At the trial, Dra. dela Llana presented herself as an ordinary witness 1 5 and Joel as
a hostile witness. 1 6 Dra. dela Llana reiterated that she lost the mobility of her arm because
of the vehicular accident. To prove her claim, she identi ed and authenticated a medical
certi cate dated November 20, 2000 issued by Dr. Milla. The medical certi cate
stated that Dra. dela Llana suffered from a whiplash injury. It also chronicled her clinical
history and physical examinations. 1 7 Meanwhile, Joel testi ed that his truck hit the car
because the truck's brakes got stuck. 1 8
In defense, Rebecca testi ed that Dra. dela Llana was physically t and strong when
they met several days after the vehicular accident. She also asserted that she observed the
diligence of a good father of a family in the selection and supervision of Joel. She pointed
out that she required Joel to submit a certi cation of good moral character as well as
barangay, police, and NBI clearances prior to his employment. She also stressed that she
only hired Primero after he successfully passed the driving skills test conducted by
Alberto Marcelo, a licensed driver-mechanic. 1 9
Alberto also took the witness stand. He testi ed that he checked the truck in the
morning of March 30, 2000. He a rmed that the truck was in good condition prior to the
vehicular accident. He opined that the cause of the vehicular accident was a damaged
compressor. According to him, the absence of air inside the tank damaged the
compressor. 2 0 cDTHIE
RTC Ruling
The RTC ruled in favor of Dra. dela Llana and held that the proximate cause of Dra.
dela Llana's whiplash injury to be Joel's reckless driving. 2 1 It found that a whiplash injury is
an injury caused by the sudden jerking of the spine in the neck area. It pointed out that the
massive damage the car suffered only meant that the truck was over-speeding. It
maintained that Joel should have driven at a slower pace because road visibility diminishes
at night. He should have blown his horn and warned the car that his brake was stuck and
could have prevented the collision by swerving the truck off the road. It also concluded
that Joel was probably sleeping when the collision occurred as Joel had been driving for
fifteen hours on that fateful day.
The RTC further declared that Joel's negligence gave rise to the presumption that
Rebecca did not exercise the diligence of a good father of a family in Joel's selection and
supervision of Joel. Rebecca was vicariously liable because she was the employer and she
personally chose him to drive the truck. On the day of the collision, she ordered him to
deliver gravel and sand to Muñoz Market, Quezon City. The Court concluded that the three
elements necessary to establish Rebecca's liability were present: (1) that the employee
was chosen by the employer, personally or through another; (2) that the services were to
be rendered in accordance with orders which the employer had the authority to give at all
times; and (3) that the illicit act of the employee was on the occasion or by reason of the
functions entrusted to him.
The RTC thus awarded Dra. dela Llana the amounts of P570,000.00 as actual
damages, P250,000.00 as moral damages, and the cost of the suit. 2 2
CA Ruling
In a decision dated February 11, 2008, the CA reversed the RTC ruling. It held that
Dra. dela Llana failed to establish a reasonable connection between the vehicular accident
and her whiplash injury by preponderance of evidence. Citing Nutrimix Feeds Corp. v. Court
of Appeals, 2 3 it declared that courts will not hesitate to rule in favor of the other party if
there is no evidence or the evidence is too slight to warrant an inference establishing the
fact in issue. It noted that the interval between the date of the collision and the date when
Dra. dela Llana began to suffer the symptoms of her illness was lengthy. It concluded that
this interval raised doubts on whether Joel's reckless driving and the resulting collision in
fact caused Dra. dela Llana's injury.
It also declared that courts cannot take judicial notice that vehicular accidents
cause whiplash injuries. It observed that Dra. dela Llana did not immediately visit a hospital
to check if she sustained internal injuries after the accident. Moreover, her failure to
present expert witnesses was fatal to her claim. It also gave no weight to the medical
certi cate. The medical certi cate did not explain how and why the vehicular accident
caused the injury. 2 4
The Petition
Dra. dela Llana points out in her petition before this Court that Nutrimix is
inapplicable in the present case. She stresses that Nutrimix involved the application of
Articles 1561 and 1566 of the Civil Code, provisions governing hidden defects.
Furthermore, there was absolutely no evidence in Nutrimix that showed that poisonous
animal feeds were sold to the respondents in that case. acIHDA
As opposed to the respondents in Nutrimix, Dra. dela Llana asserts that she has
established by preponderance of evidence that Joel's negligent act was the proximate
cause of her whiplash injury. First , pictures of her damaged car show that the collision
was strong. She posits that it can be reasonably inferred from these pictures that the
massive impact resulted in her whiplash injury. Second, Dr. Milla categorically stated in
the medical certi cate that Dra. dela Llana suffered from whiplash injury. Third, her
testimony that the vehicular accident caused the injury is credible because she was a
surgeon.
Dra. dela Llana further asserts that the medical certi cate has probative value. Citing
several cases, she posits that an uncorroborated medical certi cate is credible if
uncontroverted. 2 5 She points out that expert opinion is unnecessary if the opinion merely
relates to matters of common knowledge. She maintains that a judge is quali ed as an
expert to determine the causation between Joel's reckless driving and her whiplash injury.
Trial judges are aware of the fact that whiplash injuries are common in vehicular collisions.
The Respondent's Position
In her Comment, 2 6 Rebecca points out that Dra. dela Llana raises a factual issue
which is beyond the scope of a petition for review on certiorari under Rule 45 of the Rules
of Court. She maintains that the CA's ndings of fact are nal and conclusive. Moreover,
she stresses that Dra. dela Llana's arguments are not substantial to merit this Court's
consideration.
The Issue
The sole issue for our consideration in this case is whether Joel's reckless driving is
the proximate cause of Dra. dela Llana's whiplash injury.
Our Ruling
We find the petition unmeritorious.
The Supreme Court may review
questions of fact in a petition for
review on certiorari when the
findings of fact by the lower courts
are conflicting
The issue before us involves a question of fact and this Court is not a trier of facts.
As a general rule, the CA's ndings of fact are nal and conclusive and this Court will not
review them on appeal. It is not the function of this Court to examine, review or evaluate
the evidence in a petition for review on certiorari under Rule 45 of the Rules of Court. We
can only review the presented evidence, by way of exception, when the con ict exists in
ndings of the RTC and the CA. 2 7 We see this exceptional situation here and thus
accordingly examine the relevant evidence presented before the trial court.
Dra. dela Llana failed to establish
her case by preponderance of
evidence
Article 2176 of the Civil Code provides that "[w]hoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation between the parties,
is a quasi-delict." Under this provision, the elements necessary to establish a quasi-delict
case are: (1) damages to the plaintiff; (2) negligence, by act or omission, of the defendant
or by some person for whose acts the defendant must respond, was guilty; and (3) the
connection of cause and effect between such negligence and the damages. 2 8
These elements show that the source of obligation in a quasi-delict case is the breach or
omission of mutual duties that civilized society imposes upon its members, or which arise
from non-contractual relations of certain members of society to others. 2 9 AHcDEI
Based on these requisites, Dra. dela Llana must rst establish by

preponderance of evidence the three elements of quasi-delict before we
determine Rebecca's liability as Joel's employer. She should show the chain of
causation between Joel's reckless driving and her whiplash injury. Only after she has laid
this foundation can the presumption — that Rebecca did not exercise the diligence of a
good father of a family in the selection and supervision of Joel — arise. 3 0 Once negligence,
the damages and the proximate causation are established, this Court can then proceed
with the application and the interpretation of the fth paragraph of Article 2180 of the Civil
Code. 3 1 Under Article 2176 of the Civil Code, in relation with the fth paragraph of Article
2180, "an action predicated on an employee's act or omission may be instituted against
the employer who is held liable for the negligent act or omission committed by his
employee." 3 2 The rationale for these graduated levels of analyses is that it is essentially
the wrongful or negligent act or omission itself which creates the vinculum juris in extra-
contractual obligations. 3 3
In civil cases, a party who alleges a fact has the burden of proving it. He who
alleges has the burden of proving his allegation by preponderance of evidence
or greater weight of credible evidence. 3 4 The reason for this rule is that bare
allegations, unsubstantiated by evidence, are not equivalent to proof. In short, mere
allegations are not evidence. 3 5
In the present case, the burden of proving the proximate causation between Joel's
negligence and Dra. dela Llana's whiplash injury rests on Dra. dela Llana. She must
establish by preponderance of evidence that Joel's negligence, in its natural and
continuous sequence, unbroken by any e cient intervening cause, produced her whiplash
injury, and without which her whiplash injury would not have occurred. 3 6
Notably, Dra. dela Llana anchors her claim mainly on three pieces of evidence: (1)
the pictures of her damaged car, (2) the medical certificate dated November 20, 2000, and
(3) her testimonial evidence. However, none of these pieces of evidence show the causal
relation between the vehicular accident and the whiplash injury. In other words, Dra. dela
Llana, during trial, did not adduce the factum probans or the evidentiary facts by
which the factum probandum or the ultimate fact can be established , as fully
discussed below. 3 7
A. The pictures of the
damaged car only
demonstrate the impact of
the collision
Dra. dela Llana contends that the pictures of the damaged car show that the
massive impact of the collision caused her whiplash injury. We are not persuaded by this
bare claim. Her insistence that these pictures show the causation grossly belies common
logic. These pictures indeed demonstrate the impact of the collision. However, it is a far-
fetched assumption that the whiplash injury can also be inferred from these pictures. HaIATC
B. The medical certificate

cannot be considered
because it was not admitted
in evidence
Furthermore, the medical certi cate, marked as Exhibit "H" during trial, should not be
considered in resolving this case for the reason that it was not admitted in evidence by the
RTC in an order dated September 23, 2004. 3 8 Thus, the CA erred in even considering this
documentary evidence in its resolution of the case. It is a basic rule that evidence which
has not been admitted cannot be validly considered by the courts in arriving at their
judgments.
However, even if we consider the medical certi cate in the disposition of this case,
the medical certi cate has no probative value for being hearsay. It is a basic rule that
evidence, whether oral or documentary, is hearsay if its probative value is not based on the
personal knowledge of the witness but on the knowledge of another person who is not on
the witness stand. 3 9 Hearsay evidence, whether objected to or not, cannot be given
credence 4 0 except in very unusual circumstance that is not found in the present case.
Furthermore, admissibility of evidence should not be equated with weight of evidence. The
admissibility of evidence depends on its relevance and competence, while the weight of
evidence pertains to evidence already admitted and its tendency to convince and
persuade. Thus, a particular item of evidence may be admissible, but its evidentiary weight
depends on judicial evaluation within the guidelines provided by the Rules of Court. 4 1
During trial, Dra. dela Llana testified:
"Q: Did your physician tell you, more or less, what was the reason why you
were feeling that pain in your left arm?
A: Well, I got a certi cate from her and in that certi cate, she
stated that my condition was due to a compression of the nerve,
which supplied my left arm and my left hand.
Court:
By the way, what is the name of this physician, Dra.?
Witness:
Her name is Dra. Rosalinda Milla. She is a Rehabilitation Medicine Specialist.
Atty. Yusingco:
You mentioned that this Dra. Rosalinda Milla made or issued a medical
certi cate. What relation does this medical certi cate, marked as
Exhibit H have to do with that certi cate, you said was made by
Dra. Milla?
Witness:
This is the medical certificate that Dra. Milla made out for me.
Atty. Yusingco:
Your Honor, this has been marked as Exhibit H.

Atty. Yusingco:
What other medical services were done on you, Dra. dela Llana, as a result of that
feeling, that pain that you felt in your left arm?
Witness:
Well, aside from the medications and physical therapy, a re-evaluation of my
condition after three months indicated that I needed surgery. ISHCcT
Atty. Yusingco:
Did you undergo this surgery?
Witness:
So, on October 19, I underwent surgery on my neck, on my spine.

Atty. Yusingco:
And, what was the result of that surgical operation?
Witness:
Well, the operation was to relieve the compression on my nerve, which did not
resolve by the extensive and prolonged physical therapy that I underwent
for more than three months." 4 2 (emphasis ours)
Evidently, it was Dr. Milla who had personal knowledge of the contents of the medical
certi cate. However, she was not presented to testify in court and was not even able to
identify and a rm the contents of the medical certi cate. Furthermore, Rebecca was
deprived of the opportunity to cross-examine Dr. Milla on the accuracy and veracity of
her findings.
We also point out in this respect that the medical certi cate nonetheless did not
explain the chain of causation in fact between Joel's reckless driving and Dra. dela Llana's
whiplash injury. It did not categorically state that the whiplash injury was a result of the
vehicular accident. A perusal of the medical certi cate shows that it only attested to her
medical condition, i.e., that she was suffering from whiplash injury. However, the medical
certi cate failed to substantially relate the vehicular accident to Dra. dela Llana's whiplash
injury. Rather, the medical certi cate only chronicled her medical history and physical
examinations.
C. Dra. dela Llana's opinion
that Joel's negligence
caused her whiplash injury
has no probative value
Interestingly, the present case is peculiar in the sense that Dra. dela Llana, as the
plaintiff in this quasi-delict case, was the lone physician-witness during trial. Signi cantly,
she merely testi ed as an ordinary witness before the trial court. Dra. dela Llana
essentially claimed in her testimony that Joel's reckless driving caused her whiplash injury.
Despite the fact that Dra. dela Llana is a physician and even assuming that she is an
expert in neurology, we cannot give weight to her opinion that Joel's reckless driving
caused her whiplash injury without violating the rules on evidence.
Under the Rules of Court, there is a substantial difference between an ordinary
witness and an expert witness. The opinion of an ordinary witness may be received in
evidence regarding: (a) the identity of a person about whom he has adequate knowledge;
(b) a handwriting with which he has su cient familiarity; and (c) the mental sanity of a
person with whom he is su ciently acquainted. Furthermore, the witness may also testify
on his impressions of the emotion, behavior, condition or appearance of a person. 4 3 On
the other hand, the opinion of an expert witness may be received in evidence on a matter
requiring special knowledge, skill, experience or training which he shown to possess. 4 4
However, courts do not immediately accord probative value to an admitted expert
testimony, much less to an unobjected ordinary testimony respecting special knowledge.
The reason is that the probative value of an expert testimony does not lie in a simple
exposition of the expert's opinion. Rather, its weight lies in the assistance that the expert
witness may afford the courts by demonstrating the facts which serve as a basis for his
opinion and the reasons on which the logic of his conclusions is founded. 4 5
In the present case, Dra. dela Llana's medical opinion cannot be given probative
value for the reason that she was not presented as an expert witness. As an ordinary
witness, she was not competent to testify on the nature, and the cause and effects of
whiplash injury. Furthermore, we emphasize that Dra. dela Llana, during trial, nonetheless
did not provide a medical explanation on the nature as well as the cause and effects of
whiplash injury in her testimony.
The Supreme Court cannot take
judicial notice that vehicular
accidents cause whiplash injuries
Indeed, a perusal of the pieces of evidence presented by the parties before the trial
court shows that Dra. dela Llana did not present any testimonial or documentary
evidence that directly shows the causal relation between the vehicular accident
and Dra. dela Llana's injury . Her claim that Joel's negligence caused her whiplash injury
was not established because of the de ciency of the presented evidence during trial. We
point out in this respect that courts cannot take judicial notice that vehicular accidents
cause whiplash injuries. This proposition is not public knowledge, or is capable of
unquestionable demonstration, or ought to be known to judges because of their judicial
functions. 4 6 We have no expertise in the eld of medicine. Justices and judges are only
tasked to apply and interpret the law on the basis of the parties' pieces of evidence and
their corresponding legal arguments. ITSaHC
In sum, Dra. dela Llana miserably failed to establish her case by preponderance of
evidence. While we commiserate with her, our solemn duty to independently and
impartially assess the merits of the case binds us to rule against Dra. dela Llana's favor.
Her claim, unsupported by preponderance of evidence, is merely a bare assertion and has
no leg to stand on.
WHEREFORE , premises considered, the assailed Decision dated February 11, 2008
and Resolution dated March 31, 2008 of the Court of Appeals are hereby AFFIRMED and
the petition is hereby DENIED for lack of merit.
SO ORDERED.
Carpio, Del Castillo, Perez and Perla-Bernabe, JJ., concur.
Footnotes
1.Dated May 20, 2008 and filed under Rule 45 of the Rules of Court; rollo, pp. 8-30.
2.Id. at 39-55; penned by Associate Justice Remedios A. Salazar-Fernando, and concurred in by

Associate Justices Rosalinda Asuncion-Vicente and Enrico A. Lanzanas.
3.Id. at 56-59.
4.Id. at 40.
5.Id. at 42-43.
6.Id. at 43.
7.RTC rollo, p. 117.
8.Rollo, p. 43.
9.Id. at 44-45.
10.RTC rollo, pp. 121-122.

11.Rollo, p. 45.
13.Id. at 2-4.
14.Id. at 10-14.
15.Id. at 254.
16.Id. at 640.
17.Id. at 121-123.
18.Rollo, p. 47.
19.Id. at 47-49.
20.Id. at 49-50.
21.Dated April 19, 2007; id. at 36.
22.Id. at 31-37.
23.484 Phil. 330-349 (2004).
24.Supra note 2.
25.Citing GSIS v. Ibarra , 562 Phil. 924-938 (2009); Ijares v. Court of Appeals , 372 Phil. 9-21
(1999); and Loot v. GSIS , G.R. No. 86994, June 30, 1993, 224 SCRA 54-61.
26.Rollo, pp. 102-109.
27.Carvajal v. Luzon Development Bank and/or Ramirez , G.R. No. 186169, August 1, 2012, 678
SCRA 132, 140-141.
28.Vergara v. CA, 238 Phil. 566, 568 (1987).
29.Cangco v. Manila Railroad Co., 38 Phil. 775 (1918).
30.Syki v. Begasa, 460 Phil. 386 (2003).
31.The fifth paragraph of Article 2180 of the Civil Code provides:

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.
32.Filcar Transport Services v. Espinas, G.R. No. 174156, June 20, 2012, 674 SCRA 118, 128.
33.Supra note 29.

34.Eulogio v. Spouses Apeles , G.R. No. 167884, January 20, 2009, 576 SCRA 562, 571-572,
citing Go v. Court of Appeals, 403 Phil. 883, 890-891 (2001).
35.Real v. Belo, 542 Phil. 111, 122 (2007), citing Domingo v. Robles, G.R. No. 153743, March 18,
2005, 453 SCRA 812, 818; and Ongpauco v. CA , G.R. No. 134039, December 21, 2004,
447 SCRA 395, 400.
36.Vda. de Bataclan v. Medina, 102 Phil. 186 (1957).
37.Gomez v. Gomez-Samson, 543 Phil. 468 (2007).

39.RULES OF COURT, Rule 130, Section 36.
40.Benguet Exploration, Inc. v. CA , 404 Phil. 287 (2001), citing PNOC Shipping and Transport
Corp. v. CA, 358 Phil. 41, 60 (1998).
41.Tating v. Marcela, 548 Phil. 19, 28 (2007).
42.RTC rollo, pp. 277 -281.

45.People of the Philippines v. Florendo , 68 Phil. 619, 624 (1939), citing United States v. Kosel,
24 Phil. 594 (1913).

THIRD DIVISION
[G.R. No. 164749. March 15, 2017.]
ROMULO ABROGAR and ERLINDA ABROGAR , petitioners, vs. COSMOS

BOTTLING COMPANY and INTERGAMES, INC. , respondents.
DECISION
BERSAMIN , J : p
This case involves a claim for damages arising from the negligence causing the
death of a participant in an organized marathon bumped by a passenger jeepney on the
route of the race. The issues revolve on whether the organizer and the sponsor of the
marathon were guilty of negligence, and, if so, was their negligence the proximate cause
of the death of the participant; on whether the negligence of the driver of the passenger
jeepney was an e cient intervening cause; on whether the doctrine of assumption of
risk was applicable to the fatality; and on whether the heirs of the fatality can recover
damages for loss of earning capacity of the latter who, being then a minor, had no
gainful employment.
The Case
By this appeal, the parents of the late Rommel Abrogar (Rommel), a marathon
runner, seek the review and reversal of the decision promulgated on March 10, 2004, 1
whereby the Court of Appeals (CA) reversed and set aside the judgment rendered in
their favor on May 10, 1991 by the Regional Trial Court (RTC), Branch 83, in Quezon City
2 nding and declaring respondents Cosmos Bottling Company (Cosmos), a domestic
soft-drinks company whose products included Pop Cola, and Intergames, Inc.
(Intergames), also a domestic corporation organizing and supervising the "1st Pop
Cola Junior Marathon" held on June 15, 1980 in Quezon City, solidarily liable for
damages arising from the untimely death of Rommel, then a minor 18 years of age, 3
after being bumped by a recklessly driven passenger jeepney along the route of the
marathon.
Antecedents
The CA narrated the antecedents in the assailed judgment, 4 viz.:
[T]o promote the sales of "Pop Cola", defendant Cosmos, jointly with
Intergames, organized an endurance running contest billed as the "1st Pop Cola
Junior Marathon" scheduled to be held on June 15, 1980. The organizers plotted
a 10-kilometer course starting from the premises of the Interim Batasang
Pambansa (IBP for brevity), through public roads and streets, to end at the
Quezon Memorial Circle. Plaintiffs' son Rommel applied with the defendants to
be allowed to participate in the contest and after complying with defendants'
requirements, his application was accepted and he was given an o cial
number. Consequently, on June 15, 1980 at the designated time of the
marathon, Rommel joined the other participants and ran the course plotted by
the defendants. As it turned out, the plaintiffs' (sic) further alleged, the
defendants failed to provide adequate safety and precautionary measures and
to exercise the diligence required of them by the nature of their undertaking, in
CD Technologies Asia, Inc. © 2017 cdasiaonline.com
that they failed to insulate and protect the participants of the marathon from the
vehicular and other dangers along the marathon route. Rommel was bumped by
a jeepney that was then running along the route of the marathon on Don
Mariano Marcos Avenue (DMMA for brevity), and in spite of medical treatment
given to him at the Ospital ng Bagong Lipunan, he died later that same day due
to severe head injuries.
CAIHTE
On October 28, 1980, the petitioners sued the respondents in the then Court of
First Instance of Rizal (Quezon City) to recover various damages for the untimely death
of Rommel (i.e., actual and compensatory damages, loss of earning capacity, moral
damages, exemplary damages, attorney's fees and expenses of litigation). 5
Cosmos denied liability, insisting that it had not been the organizer of the
marathon, but only its sponsor; that its participation had been limited to providing
nancial assistance to Intergames; 6 that the nancial assistance it had extended to
Intergames, the sole organizer of the marathon, had been in answer to the
Government's call to the private sector to help promote sports development and
physical tness; 7 that the petitioners had no cause of action against it because there
was no privity of contract between the participants in the marathon and Cosmos; and
that it had nothing to do with the organization, operation and running of the event. 8
As counterclaim, Cosmos sought attorney's fees and expenses of litigation from
the petitioners for their being unwarrantedly included as a defendant in the case. It
averred a cross-claim against Intergames, stating that the latter had guaranteed to hold
Cosmos "completely free and harmless from any claim or action for liability for any
injuries or bodily harm which may be sustained by any of the entries in the '1st Pop Cola
Junior Marathon' or for any damage to the property or properties of third parties, which
may likewise arise in the course of the race." 9 Thus, Cosmos sought to hold
Intergames solely liable should the claim of the petitioners prosper. 1 0
On its part, Intergames asserted that Rommel's death had been an accident
exclusively caused by the negligence of the jeepney driver; that it was not responsible
for the accident; that as the marathon organizer, it did not assume the responsibilities
of an insurer of the safety of the participants; that it nevertheless caused the
participants to be covered with accident insurance, but the petitioners refused to
accept the proceeds thereof; 1 1 that there could be no cause of action against it
because the acceptance and approval of Rommel's application to join the marathon
had been conditioned on his waiver of all rights and causes of action arising from his
participation in the marathon; 1 2 that it exercised due diligence in the conduct of the
race that the circumstances called for and was appropriate, it having availed of all its
know-how and expertise, including the adoption and implementation of all known and
possible safety and precautionary measures in order to protect the participants from
injuries arising from vehicular and other forms of accidents; 1 3 and, accordingly, the
complaint should be dismissed.
In their reply and answer to counterclaim, the petitioners averred that contrary to
its claims, Intergames did not provide adequate measures for the safety and protection
of the race participants, considering that motor vehicles were traversing the race route
and the participants were made to run along the ow of tra c, instead of against it;
that Intergames did not provide adequate tra c marshals to secure the safety and
protection of the participants; 1 4 that Intergames could not limit its liability on the basis
of the accident insurance policies it had secured to cover the race participants; that the
waiver signed by Rommel could not be a basis for denying liability because the same
was null and void for being contrary to law, morals, customs and public policy; 1 5 that
their complaint su ciently stated a cause of action because in no way could they be
held liable for attorney's fees, litigation expenses or any other relief due to their having
abided by the law and having acted honestly, fairly, in good faith by according to
Intergames its due, as demanded by the facts and circumstances. 1 6
At the pre-trial held on April 12, 1981, the parties agreed that the principal issue
was whether or not Cosmos and Intergames were liable for the death of Rommel
because of negligence in conducting the marathon. 1 7
Judgment of the RTC
In its decision dated May 10, 1991, 1 8 the RTC ruled as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs-spouses
Romulo Abrogar and Erlinda Abrogar and against defendants Cosmos Bottling
Company, Inc. and Intergames, Inc., ordering both defendants, jointly and
severally, to pay and deliver to the plaintiffs the amounts of Twenty Eight
Thousand Sixty One Pesos and Sixty Three Centavos (P28,061.63) as actual
damages; One Hundred Thousand Pesos (P100,000.00) as moral damages;
Fifty Thousand Pesos (P50,000.00) as exemplary damages and Ten Percent
(10%) of the total amount of One Hundred Seventy Eight Thousand Sixty One
Pesos and Sixty Three Centavos (P178,061.63) or Seventeen Thousand Eight
Hundred Six Pesos and Sixteen Centavos (P17,806.16) as attorney's fees.
On the cross-claim of defendant Cosmos Bottling Company, Inc.,
defendant Intergames, Inc., is hereby ordered to reimburse to the former any and
all amounts which may be recovered by the plaintiffs from it by virtue of this
Decision. DETACa
SO ORDERED.
The RTC observed that the safeguards allegedly instituted by Intergames in
conducting the marathon had fallen short of the yardstick to satisfy the requirements
of due diligence as called for by and appropriate under the circumstances; that the
accident had happened because of inadequate preparation and Intergames' failure to
exercise due diligence; 1 9 that the respondents could not be excused from liability by
hiding behind the waiver executed by Rommel and the permission given to him by his
parents because the waiver could only be effective for risks inherent in the marathon,
such as stumbling, heat stroke, heart attack during the race, severe exhaustion and
similar occurrences; 2 0 that the liability of the respondents towards the participants
and third persons was solidary, because Cosmos, the sponsor of the event, had been
the principal mover of the event, and, as such, had derived bene ts from the marathon
that in turn had carried responsibilities towards the participants and the public; that the
respondents' agreement to free Cosmos from any liability had been an agreement
binding only between them, and did not bind third persons; and that Cosmos had a
cause of action against Intergames for whatever could be recovered by the petitioners
from Cosmos. 2 1
Decision of the CA
All the parties appealed to the CA.
The petitioners contended that the RTC erred in not awarding damages for loss
of earning capacity on the part of Rommel for the reason that such damages were not
recoverable due to Rommel not yet having nished his schooling; and that it would be
premature to award such damages upon the assumption that he would nish college
and be gainfully employed. 2 2
On their part, Cosmos and Intergames separately raised essentially similar errors
on the part of the RTC, to wit: (1) in holding them liable for the death of Rommel; (2) in
nding them negligent in conducting the marathon; (3) in holding that Rommel and his
parents did not assume the risks of the marathon; (4) in not holding that the sole and
proximate cause of the death of Rommel was the negligence of the jeepney driver; and
(5) in making them liable, jointly and solidarily, for damages, attorney's fees and
expenses of litigation. 2 3
The CA reduced the issues to four, namely:
1. Whether or not appellant Intergames was negligent in its conduct
of the "1st Pop Cola Junior Marathon" held on June 15, 1980 and if so, whether
its negligence was the proximate cause of the death of Rommel Abrogar.
2. Whether or not appellant Cosmos can be held jointly and solidarily
liable with appellant Intergames for the death of Rommel Abrogar, assuming
that appellant Intergames is found to have been negligent in the conduct of the
Pop Cola marathon and such negligence was the proximate cause of the death
of Rommel Abrogar.
3. Whether or not the appellants Abrogar are entitled to be
compensated for the "loss of earning capacity" of their son Rommel.
4. Whether or not the appellants Abrogar are entitled to the actual, moral,
and exemplary damages granted to them by the Trial Court. 2 4
In its assailed judgment promulgated on March 10, 2004, 2 5 the CA ruled as
follows:
As to the rst issue, this Court nds that appellant Intergames was not
negligent in organizing the said marathon.
Negligence is the omission to do something which a reasonable man,
guided upon those considerations which ordinarily regulate the conduct to
human affairs, would do, or doing something which a prudent and reasonable
man would not do.
The whole theory of negligence presuppose some uniform standard of
behavior which must be an external and objective one, rather than the individual
judgment good or bad, of the particular actor; it must be, as far as possible, the
same for all persons; and at the same time make proper allowance for the risk
apparent to the actor for his capacity to meet it, and for the circumstances
under which he must act.
The question as to what would constitute the conduct of a prudent man
in a given situation must of course be always determined in the light of human
experience and of the acts involved in the particular case.
In the case at bar, the trial court erred in nding that the appellant
Intergames failed to satisfy the requirements of due diligence in the conduct of
the race.
The trial court in its decision said that the accident in question could
have been avoided if the route of the marathon was blocked off from the regular
tra c, instead of allowing the runners to run together with the ow of tra c.
Thus, the said court considered the appellant Intergames at fault for proceeding
with the marathon despite the fact that the Northern Police District, MPF,
Quezon City did not allow the road to be blocked off from traffic.
This Court nds that the standard of conduct used by the trial court is
not the ordinary conduct of a prudent man in such a given situation. According
to the said court, the only way to conduct a safe road race is to block off the
tra c for the duration of the event and direct the cars and public utilities to take
alternative routes in the meantime that the marathon event is being held. Such
standard is too high and is even inapplicable in the case at bar because, there is
no alternative route from IBP to Don Mariano Marcos to Quezon City Hall. aDSIHc
The Civil Code provides that if the law or contract does not state the
diligence which is to be observed in the performance of an obligation that which
is expected of a good father of the family shall only be required. Accordingly,
appellant Intergames is only bound to exercise the degree of care that would be
exercised by an ordinarily careful and prudent man in the same position and
circumstances and not that of the cautious man of more than average
prudence. Hence, appellant Intergames is only expected to observe ordinary
diligence and not extraordinary diligence.
In this case, the marathon was allowed by the Northern Police District,
MPF, Quezon City on the condition that the road should not be blocked off from
tra c. Appellant Intergames had no choice. It had to comply with it or else the
said marathon would not be allowed at all.
The trial court erred in contending that appellant Intergames should have
looked for alternative places in Metro Manila given the condition set by the
Northern Police District, MPF, Quezon City; precisely because as Mr. Jose Castro
has testi ed the said route was found to be the best route after a careful study
and consideration of all the factors involved. Having conducted several
marathon events in said route, appellant Intergames as well as the volunteer
groups and the other agencies involved were in fact familiar with the said route.
And assuming that there was an alternative place suitable for the said race, the
question is would they be allowed to block off the said road from traffic?
Also, the trial court erred in stating that there was no adequate number of
marshals, police o cers and personnel to man the race so as to prevent injury
to the participants.
The general rule is that the party who relies on negligence for his cause
of action has the burden of proving the existence of the same, otherwise his
action fails.
Here, the appellants-spouses failed to prove that there was inadequate
number of marshals, police o cers, and personnel because they failed to prove
what number is considered adequate.
This court considers that seven (7) tra c operatives, ve (5) motorcycle
policemen, fteen (15) patrolmen deployed along the route, fteen (15)
boyscouts, twelve (12) CATs, twenty (20) barangay tanods, three (3)
ambulances and three (3) medical teams were su cient to stage a safe
marathon.
Moreover, the failure of Mr. Jose R. Castro, Jr. to produce records of the
lists of those constituting the volunteer help during the marathon is not fatal to
the case considering that one of the volunteers, Victor Landingin of the Citizens
Tra c Action (CTA) testi ed in court that CTA elded ve units on June 15,
1980, assigned as follows: (1) at the sphere head; (2) at the nish line; (3) tail
ender; (4) & (5) roving.
The trial court again erred in concluding that the admission of P/Lt.
Jesus Lipana, head of the tra c policemen assigned at the marathon, that he
showed up only at the nish line means that he did not bother to check on his
men and did not give them appropriate instructions. P/Lt. Lipana in his
testimony explained that he did not need to be in the start of the race because
he had predesignated another capable police officer to start the race.
In addition, this Court nds that the precautionary measures and
preparations adopted by appellant Intergames were su cient considering the
circumstances surrounding the case.
Appellant Intergames, using its previous experiences in conducting safe
and successful road races, took all the necessary precautions and made all the
preparations for the race. The initial preparations included: determination of the
route to be taken; and an ocular inspection of the same to see if it was well-
paved, whether it had less corners for easy communication and coordination,
and whether it was wide enough to accommodate runners and transportation.
Appellant Intergames choose the Don Mariano Marcos Avenue primarily
because it was well-paved; had wide lanes to accommodate runners and
vehicular tra c; had less corners thus facilitating easy communication and
coordination among the organizers and cooperating agencies; and was familiar
to the race organizers and operating agencies. The race covered a ten-kilometer
course from the IBP lane to the Quezon City Hall Compound passing through
the Don Mariano Marcos Avenue, which constituted the main stretch of the
route. Appellant Intergames scheduled the marathon on a Sunday morning,
when tra c along the route was at its lightest. Permission was sought from the
then Quezon City Mayor Adelina Rodriguez for the use of the Quezon City Hall
Grandstand and the street fronting it as the nish line. Police assistance was
also obtained to control and supervise the tra c. The Quezon City Tra c
Detachment took charge of tra c control by assigning policemen to the tra c
route. The particular unit assigned during the race underwent extensive training
and had been involved in past marathons, including marathons in highly
crowded areas. The Philippine Boy Scouts tasked to assist the police and
monitor the progress of the race; and Citizens Tra c Action Group tasked with
the monitoring of the race, which assigned ve units consisting of ten
operatives, to provide communication and assistance were likewise obtained.
Finally, medical equipment and personnel were also requested from Camp
Aguinaldo, the Philippine Red Cross and the Hospital ng Bagong Lipunan.
Neither does this Court nd the appellant Intergames' conduct of the
marathon the proximate cause of the death of Rommel Abrogar. Proximate
cause has been de ned as that which, in natural and continuous sequence,
unbroken by any e cient intervening cause, produces injury, and without which
the result would not have occurred.
It appears that Rommel Abrogar, while running on Don Mariano Marcos
Avenue and after passing the Philippine Atomic Energy Commission Building,
was bumped by a jeepney which apparently was racing against a minibus and
the two vehicles were trying to crowd each other. In fact, a criminal case was
led against the jeepney driver by reason of his having killed Rommel Abrogar.
ETHIDa
This proves that the death of Rommel Abrogar was caused by the
negligence of the jeepney driver. Rommel Abrogar cannot be faulted because he
was performing a legal act; the marathon was conducted with the permission
and approval of all the city o cials involved. He had the right to be there.
Neither can the appellant Intergames be faulted, as the organizer of the said
marathon, because it was not negligent in conducting the marathon.
Given the facts of this case, We believe that no amount of precaution can
prevent such an accident. Even if there were fences or barriers to separate the
lanes for the runners and for the vehicles, it would not prevent such an accident
in the event that a negligent driver loses control of his vehicle. And even if the
road was blocked off from tra c, it would still not prevent such an accident, if a
jeepney driver on the other side of the road races with another vehicle loses
control of his wheel and as a result hits a person on the other side of the road.
Another way of saying this is: A defendant's tort cannot be considered a legal
cause of plaintiff's damage if that damage would have occurred just the same
even though the defendant's tort had not been committed.
This Court also nds the doctrine of assumption of risk applicable in the
case at bar. As explained by a well-known authority on torts:
"The general principle underlying the defense of
assumption of risk is that a plaintiff who voluntarily assumes a
risk of harm arising from the negligent or reckless conduct of the
defendant cannot recover for such harm. The defense may arise
where a plaintiff, by contract or otherwise, expressly agrees to
accept a risk or harm arising from the defendant's conduct, or
where a plaintiff who fully understands a risk or harm caused by
the defendant's conduct, or by a condition created by the
defendant, voluntarily chooses to enter or remain, or to permit his
property to enter or remain, within the area of such risk, under
circumstances manifesting his willingness to accept the risk.
xxx xxx xxx
"Assumption of the risk in its primary sense arises by
assuming through contract, which may be implied, the risk of a
known danger. Its essence is venturousness. It implies intentional
exposure to a known danger; It embraces a mental state of
willingness; It pertains to the preliminary conduct of getting into a
dangerous employment or relationship, it means voluntary
incurring the risk of an accident, which may or may not occur, and
which the person assuming the risk may be careful to avoid; and it
defeats recovery because it is a previous abandonment of the
right to complain if an accident occurs.
"Of course, if the defense is predicated upon an express
agreement the agreement must be valid, and in the light of this
quali cation the rule has been stated that a plaintiff who, by
contract or otherwise, expressly agreed to accept a risk of harm
arising from the defendant's negligent or reckless conduct, cannot
recover for such harm unless the agreement is invalid as contrary
to public policy.
xxx xxx xxx
"The defense of assumption of risk presupposes: (1) that
the plaintiff had actual knowledge of the danger; (2) that he
understood and appreciated the risk from the danger; and (3) that
he voluntarily exposed himself to such risk. x x x
"The term 'risk' as used in this connection applies to known
dangers, and not to things from which danger may possibly ow.
The risk referred to is the particular risk, or one of the risks, which
the plaintiff accepted within the context of the situation in which
he placed himself and the question is whether the speci c
conduct or condition which caused the injury was such a risk."
In this case, appellant Romulo Abrogar himself admitted that his son,
Rommel Abrogar, surveyed the route of the marathon and even attended a
brie ng before the race. Consequently, he was aware that the marathon would
pass through a national road and that the said road would not be blocked off
from tra c. And considering that he was already eighteen years of age, had
voluntarily participated in the marathon, with his parents' consent, and was well
aware of the tra c hazards along the route, he thereby assumed all the risks of
the race. This is precisely why permission from the participant's parents,
submission of a medical certi cate and a waiver of all rights and causes of
action arising from the participation in the marathon which the participant or his
heirs may have against appellant Intergames were required as conditions in
joining the marathon.
In the decision of the trial court, it stated that the risk mentioned in the
waiver signed by Rommel Abrogar only involved risks such as stumbling,
suffering heatstroke, heart attack and other similar risks. It did not consider
vehicular accident as one of the risks included in the said waiver.
This Court does not agree. With respect to voluntary participation in a
sport, the doctrine of assumption of risk applies to any facet of the activity
inherent in it and to any open and obvious condition of the place where it is
carried on. We believe that the waiver included vehicular accidents for the
simple reason that it was a road race run on public roads used by vehicles.
Thus, it cannot be denied that vehicular accidents are involved. It was not a
track race which is held on an oval and insulated from vehicular tra c. In a
road race, there is always the risk of runners being hit by motor vehicles while
they train or compete. That risk is inherent in the sport and known to runners. It
is a risk they assume every time they voluntarily engage in their sport. cSEDTC
Furthermore, where a person voluntarily participates in a lawful game or

contest, he assumes the ordinary risks of such game or contest so as to
preclude recovery from the promoter or operator of the game or contest for
injury or death resulting therefrom. Proprietors of amusements or of places
where sports and games are played are not insurers of safety of the public nor
of their patrons.
In Mc Leod Store v. Vinson 213 Ky 667, 281 SW 799 (1926),
it was held that a boy, seventeen years of age, of ordinary
intelligence and physique, who entered a race conducted by a
department store, the purpose of which was to secure guinea fowl
which could be turned in for cash prizes, had assumed the
ordinary risks incident thereto and was barred from recovering
against the department store for injuries suffered when, within
catching distance, he stopped to catch a guinea, and was tripped
or stumbled and fell to the pavement, six or eight others falling
upon him. The court further said: "In this (the race) he was a
voluntary participant. xxx The anticipated danger was as obvious
to him as it was to appellant (the department store). While not an
adult, he was practically 17 years of age, of ordinary intelligence,
and perfectly able to determine the risks ordinarily incident to such
games. An ordinary boy of that age is practically as well advised
as to the hazards of baseball, basketball, football, foot races and
other games of skill and endurance as is an adult x x x."
In the case at bar, the "1st Pop Cola Junior Marathon" held
on June 15, 1980 was a race the winner of which was to represent
the country in the annual Spirit of Pheidippides Marathon Classic
in Greece, if he equals or breaks the 29-minute mark for the 10-km.
race. Thus, Rommel Abrogar having voluntarily participated in the
race, with his parents' consent, assumed all the risks of the race.
Anent the second issue, this Court nds that appellant
Cosmos must also be absolved from any liability in the instant
case.
This Court nds that the trial court erred in holding
appellant Cosmos liable for being the principal mover and
resultant beneficiary of the event.
In its decision it said that in view of the fact that appellant
Cosmos will be deriving certain bene ts from the marathon event,
it has the responsibility to ensure the safety of all the participants
and the public. It further said that the stipulations in the contract
entered into by the two appellants, Cosmos and Intergames,
relieving the former from any liability does not bind third persons.
This Court does not agree with the reasoning of the trial
court. The sponsorship contract entered between appellant
Cosmos and appellant Intergames specifically states that:
1. COSMOS BOTTLING CORPORATION shall
pay INTERGAMES the amount of FIFTY FIVE THOUSAND
PESOS (P55,000.00) representing full sponsorship fee and
in consideration thereof, INTERGAMES shall organize and
stage a marathon race to be called '1st POP COLA JUNIOR
MARATHON.'
xxx xxx xxx
3. INTERGAMES shall draw up all the rules of
the marathon race, eligibility requirements of participants
as well as provide all the staff required in the organization
and actual staging of the race. It is understood that all said
staff shall be considered under the direct employ of
INTERGAMES which shall have full control over them.
xxx xxx xxx
5. INTERGAMES shall secure all the necessary
permits, clearances, tra c and police assistance in all the
areas covered by the entire route of the '1ST POP COLA
JUNIOR MARATHON.'
12. INTERGAMES shall hold COSMOS
BOTTLING CORPORATION, completely free and harmless
from any claim or action for liability for any injuries or
bodily harm which may be sustained by any of the entries
in the '1st POP COLA JUNIOR MARATHON,' or for any
damages to the property or properties of third parties, which
may likewise arise in the course of the race.
From the foregoing, it is crystal clear that the role of the appellant
Cosmos was limited to providing nancial assistance in the form of
sponsorship. Appellant Cosmos' sponsorship was merely in pursuance to the
company's commitment for sports development of the youth as well as for
advertising purposes. The use of the name Cosmos was done for advertising
purposes only; it did not mean that it was an organizer of the said marathon. As
pointed out by Intergames' President, Jose Castro Jr., appellant Cosmos did not
even have the right to suggest the location and the number of runners.SDAaTC
To hold a defendant liable for torts, it must be clearly shown that he is

the proximate cause of the harm done to the plaintiff. The nexus or connection
of the cause and effect, between a negligent act and the damage done, must be
established by competent evidence.
In this case, appellant Cosmos was not negligent in entering into a
contract with the appellant Intergames considering that the record of the latter
was clean and that it has conducted at least thirty (30) road races.
Also there is no direct or immediate causal connection between the
nancial sponsorship and the death of Rommel Abrogar. The singular act of
providing nancial assistance without participating in any manner in the
conduct of the marathon cannot be palmed off as such proximate cause. In
fact, the appellant spouses never relied on any representation that Cosmos
organized the race. It was not even a factor considered by the appellants-
spouses in allowing their son to join said marathon.
In view of the fact that both defendants are not liable for the death of
Rommel Abrogar, appellants-spouses are not entitled to actual, moral,
exemplary damages as well as for the "loss of earning capacity" of their son.
The third and fourth issues are thus moot and academic.
UPON THE VIEW WE TAKE OF THIS CASE, THUS , the judgment
appealed from must be, as it hereby is, REVERSED and SET ASIDE , and
another entered DISMISSING the complaint a quo. The appellants shall bear
their respective costs.
SO ORDERED. 26
Issues
In this appeal, the petitioners submit that the CA gravely erred:
A.
x x x in reversing the RTC Decision, (and) in holding that respondent Intergames
was not negligent considering that:
1. Respondent Intergames failed to exercise the diligence of a good father
of the family in the conduct of the marathon in that it did not block off from
traffic the marathon route; and
2. Respondent Intergames' preparations for the race, including the number
of marshal during the marathon, were glaringly inadequate to prevent the
happening of the injury to its participants.
B.
x x x in reversing the RTC Decision, (and) in holding that the doctrine of
assumption of risk nds application to the case at bar even though getting hit
or run over by a vehicle is not an inherent risk in a marathon race. Even
assuming arguendo that deceased Abrogar made such waiver as claimed, still
there can be no valid waiver of one's right to life and limb for being against
public policy.
C.

x x x in reversing the RTC Decision, (and) in absolving respondent Cosmos from
liability to petitioners on the sole ground that respondent Cosmos' contract with
respondent Intergames contained a stipulation exempting the former from
liability.
D.
x x x in reversing the RTC Decision and consequently holding respondents free
from liability, (and) in not awarding petitioners with actual, moral and exemplary
damages for the death of their child, Rommel Abrogar. 2 7
Ruling of the Court
The appeal is partly meritorious.
I
Review of factual issues is allowed because of
the conflict between the findings of fact
by the RTC and the CA on the issue of negligence
The petitioners contend that Intergames was negligent; that Cosmos as the
sponsor and Intergames as the organizer of the marathon both had the obligation to
provide a reasonably safe place for the conduct of the race by blocking the route of the
race from vehicular tra c and by providing adequate manpower and personnel to
ensure the safety of the participants; and that Intergames had foreseen the harm posed
by the situation but had not exercised the diligence of a good father of a family to avoid
the risk; 2 8 hence, for such omission, Intergames was negligent. 2 9
Refuting, Cosmos and Intergames submit that the latter as the organizer was not
negligent because it had undertaken all the precautionary measures to ensure the
safety of the race; and that there was no duty on the part of the latter as the organizer
to keep a racecourse "free and clear from reasonably avoidable elements that would
[occasion] or have the probable tendency, to occasion injury." 3 0 acEHCD
The issue of whether one or both defendants were negligent is a mixed issue of
fact and law. Does this not restrict the Court against reviewing the records in this
appeal on certiorari in order to settle the issue?
The Court can proceed to review the factual ndings of the CA as an exception to
the general rule that it should not review issues of fact on appeal on certiorari. We have
recognized exceptions to the rule that the ndings of fact of the CA are conclusive and
binding in the following instances: (1) when the ndings are grounded entirely on
speculation, surmises or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when
the judgment is based on a misapprehension of facts; (5) when the findings of facts are
con icting; (6) when in making its ndings the CA went beyond the issues of the case,
or its ndings are contrary to the admissions of both the appellant and the appellee; (7)
when the ndings are contrary to the trial court; (8) when the ndings are conclusions
without citation of speci c evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioner's main and reply briefs are not disputed
by the respondent; (10) when the ndings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (11) when the CA
manifestly overlooked certain relevant facts not disputed by the parties, which, if
properly considered, would justify a different conclusion. 3 1 Considering that the CA
arrived at factual ndings contrary to those of the trial court, our review of the records
in this appeal should have to be made.
Negligence is the failure to observe for the protection of the interests of another
person that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury. 3 2 Under Article 1173 of the Civil
Code, it consists of the "omission of that diligence which is required by the nature of
the obligation and corresponds with the circumstances of the person, of the time and
of the place." 3 3 The Civil Code makes liability for negligence clear under Article 2176,
3 4 and Article 20. 3 5
To determine the existence of negligence, the following time-honored test has

been set in Picart v. Smith: 3 6
The test by which to determine the existence of negligence in a particular
case may be stated as follows: Did the defendant in doing the alleged
negligent act use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation? If not, then he
is guilty of negligence. The law here in effect adopts the standard supposed
to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by
reference to the personal judgment of the actor in the situation before him. The
law considers what would be reckless, blameworthy, or negligent in the man of
ordinary intelligence and prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man
in a given situation must of course be always determined in the light of human
experience and in view of the facts involved in the particular case. Abstract
speculation cannot here be of much value but this much can be pro tably said:
Reasonable men govern their conduct by the circumstances which are before
them or known to them. They are not, and are not supposed to be, omniscient of
the future. Hence they can be expected to take care only when there is
something before them to suggest or warn of danger. Could a prudent man,
in the case under consideration, foresee harm as a result of the course
actually pursued? If so, it was the duty of the actor to take
precautions to guard against that harm. Reasonable foresight of
harm, followed by the ignoring of the suggestion born of this
prevision, is always necessary before negligence can be held to exist.
Stated in these terms, the proper criterion for determining the
existence of negligence in a given case is this: Conduct is said to be
negligent when a prudent man in the position of the tortfeasor would
have foreseen that an effect harmful to another was su ciently
probable to warrant his foregoing the conduct or guarding against its
consequences. 3 7 (bold underscoring supplied for emphasis)
A careful review of the evidence presented, particularly the testimonies of the
relevant witnesses, in accordance with the foregoing guidelines reasonably leads to the
conclusion that the safety and precautionary measures undertaken by Intergames were
short of the diligence demanded by the circumstances of persons, time and place
under consideration. Hence, Intergames as the organizer was guilty of negligence.
The race organized by Intergames was a junior marathon participated in by
young persons aged 14 to 18 years. It was plotted to cover a distance of 10 kilometers,
starting from the IBP Lane, 3 8 then going towards the Batasang Pambansa, and on to
the circular route towards the Don Mariano Marcos Highway, 3 9 and then all the way
back to the Quezon City Hall compound where the nish line had been set. 4 0 In staging
the event, Intergames had no employees of its own to man the race, 4 1 and relied only
on the "cooperating agencies" and volunteers who had worked with it in previous races.
42 The cooperating agencies included the Quezon City police, barangay tanods,
volunteers from the Boy Scouts of the Philippines, the Philippine National Red Cross,
the Citizens Tra c Action Group, and the medical teams of doctors and nurses coming
from the O ce of the Surgeon General and the Ospital ng Bagong Lipunan. 4 3
According to Jose R. Castro, Jr., the President of Intergames, the preparations for the
event included conducting an ocular inspection of the route of the race, 4 4 sending out
letters to the various cooperating agencies, 4 5 securing permits from proper
authorities, 4 6 putting up directional signs, 4 7 and setting up the water stations. 4 8
We consider the "safeguards" employed and adopted by Intergames not
adequate to meet the requirement of due diligence. SDHTEC
For one, the police authorities speci cally prohibited Intergames from blocking
Don Mariano Marcos Highway in order not to impair road accessibility to the residential
villages located beyond the IBP Lane. 4 9 However, contrary to the ndings of the CA, 5 0
Intergames had a choice on where to stage the marathon, considering its admission of
the sole responsibility for the conduct of the event, including the choice of location.
Moreover, the CA had no basis for holding that "the said route was found to be
the best route after a careful study and consideration of all the factors involved." 5 1
Castro, Jr. himself attested that the route had been the best one only within the vicinity
of the Batasan Pambansa, to wit:
COURT
q Was there any speci c reason from . . . Was there any speci c reason why
you used this route from Batasan to City Hall? Was there any special
reason?
a We have, your Honor, conducted for example the Milo Marathon in that area
in the Batasan Pambansa and we found it to be relatively safer than
any other areas within the vicinity. As a matter of fact, we had more
runners in the Milo Marathon at that time and nothing happened, your
Honor. 5 2
The chosen route (IBP Lane, on to Don Mariano Marcos Highway, and then to
Quezon City Hall) was not the only route appropriate for the marathon. In fact,
Intergames came under no obligation to use such route especially considering that the
participants, who were young and inexperienced runners, would be running alongside
moving vehicles.
Intergames further conceded that the marathon could have been staged on a
blocked-off route like Roxas Boulevard in Manila where runners could run against the
flow of vehicular traffic. 5 3 Castro, Jr. stated in that regard:
COURT TO WITNESS
q What law are you talking about when you say I cannot violate the law?
a The police authority, your Honor, would not grant us permit because that is
one of the conditions that if we are to conduct a race we should run the
race in accordance with the flow of traffic.
q Did you not inform the police this is in accordance with the standard safety
measures for a marathon race?
a I believed we argued along that line but but (sic) again, if we insist the
police again would not grant us any permit like . . . except in the case of
Roxas Boulevard when it is normally closed from 8 a.m. when you
can run against the flow of traffic.
q You were aware for a runner to run on the same route of the tra c would
be risky because he would not know what is coming behind him?
a I believed we talked of the risk, your Honor when the risk has been
minimized to a certain level. Yes, there is greater risk when you run with the
tra c than when you run against the tra c to a certain level, it is correct
but most of the races in Manila or else-where are being run in accordance
with the flow of the traffic.
xxx xxx xxx
ATTY. VINLUAN
q Following the observation of the Court, considering the local condition, you
will agree with me the risks here are greater than in the United States where
drivers on the whole follow traffic rules?
a That is correct.
q And because of that fact, it is with all the more reason that you should take
all necessary precautions to insure the safety of the runners?
a That is correct. 5 4
xxx xxx xxx
COURT:
xxx xxx xxx
Q In your case in all the marathons that you had managed, how many cases
have you encountered where the routes are blocked off for vehicular
traffic?
A These are the International Marathon, Philippines Third World Marathon
and the Milo Marathon. We are blocking them to a certain length of time.
Q What was the purpose of blocking the routes? Is it for the safety of the
runners or just a matter of convenience?
A In blocking off the route, Your Honor, it is light easier for the runners to run
without impediments to be rendered by the people or by vehicles and at the
same time it would be also advantageous if the road will be blocked off for
vehicle traffic permitted to us by the traffic authorities.
Q So, in this case, you actually requested for the tra c authorities to block
off the route?
A As far as I remember we asked Sgt. Pascual to block off the route but
considering that it is the main artery to Fairview Village, it would not be
possible to block off the route since it will cause a lot of inconvenience for
the other people in those areas and jeepney drivers.
Q In other words, if you have your way you would have opted to block off the
route. AScHCD
A Yes, Your Honor.

Q But the fact is that the people did not agree.
A Yes, Your Honor, and it is stated in the permit given to us. 5 5
Based on the foregoing testimony of Castro, Jr., Intergames had full awareness
of the higher risks involved in staging the race alongside running vehicles, and had the
option to hold the race in a route where such risks could be minimized, if not eliminated.
But it did not heed the danger already foreseen, if not expected, and went ahead with
staging the race along the plotted route on Don Mariano Marcos Highway on the basis
of its supposedly familiarity with the route. Such familiarity of the organizer with the
route and the fact that previous races had been conducted therein without any
untoward incident 5 6 were not in themselves su cient safeguards. The standards for
avoidance of injury through negligence further required Intergames to establish that it
did take adequate measures to avert the foreseen danger, but it failed to do so.
Another failing on the part of Intergames was the patent inadequacy of the
personnel to man the route. As borne by the records, Intergames had no personnel of
its own for that purpose, and relied exclusively on the assistance of volunteers, that is,
"seven (7) tra c operatives, ve (5) motorcycle policemen, fteen (15) patrolmen
deployed along the route, fteen (15) boy scouts, twelve (12) CATs, twenty (20)
barangay tanods, three (3) ambulances and three (3) medical teams" 5 7 to ensure the
safety of the young runners who would be running alongside moving vehicular tra c, to
make the event safe and well coordinated.
Although the party relying on negligence as his cause of action had the burden of
proving the existence of the same, Intergames' coordination and supervision of the
personnel sourced from the cooperating agencies did not satisfy the diligence required
by the relevant circumstances. In this regard, it can be pointed out that the number of
deployed personnel, albeit su cient to stage the marathon, did not per se ensure the
safe conduct of the race without proof that such deployed volunteers had been
properly coordinated and instructed on their tasks.
That the proper coordination and instruction were crucial elements for the safe
conduct of the race was well known to Intergames. Castro, Jr. stated as much, to wit:
ATTY. LOMBOS:
xxx xxx xxx
Q You also said that if you block off one side of the road, it is possible that it
would be more convenient to hold the race in that matter. Will you tell the
Honorable Court if it is possible also to hold a race safely if the road is not
blocked off?
A Yes, sir.
Q How is it done?
A You can still run a race safely even if it is partially blocked off as
long as you have the necessary cooperation with the police
authorities, and the police assigned along the route of the race
and the police assigned would be there, this will contribute the
safety of the participants, and also the vehicular division , as long
as there are substantial publicities in the newspapers, normally they will
take the precautions in the use of the particular route of the race.
Q Let me clarify this. Did you say that it is possible to hold a marathon safely
if you have this tra c assistance or coordination even if the route is
blocked or not blocked?
A It is preferable to have the route blocked but in some cases, it would be
impossible for the portions of the road to be blocked totally. The route of
the race could still be safe for runners if a proper coordination or
the agencies are noti ed especially police detailees to man the
particular stage. 58
Sadly, Intergames' own evidence did not establish the conduct of proper
coordination and instruction. Castro, Jr. described the action plan adopted by
Intergames in the preparation for the race, as follows:
COURT
a Did you have any rehearsal let us say the race was conducted on June 15,
now before June 15 you call a meeting of all these runners so you can
have more or less a map-up and you would indicate or who will be
stationed in their places etc. Did you have such a rehearsal?
WITNESS
a It is not being done, your honor, but you have to specify them. You meet
with the group and you tell them that you wanted them to be placed in their
particular areas which we pointed out to them for example in the case of
the Barangay Tanod, I speci cally assigned them in the areas and we sat
down and we met.
COURT
q Did you have any action, plan or brochure which would indicate the
assignment of each of the participating group?
WITNESS
a Normally, sir, many of the races don't have that except when they called
them to meeting either as a whole group or the entire cooperating agency
or meet them per group.
COURT
q Did you have a check list of the activities that would have to be entered
before the actual marathon some kind of system where you will indicate
this particular activity has to be checked etc. You did not have that? AcICHD
WITNESS
q Are you asking, your honor, as a race director of I will check this because if I
do that, I won't have a race because that is not being done by any race
director anywhere in the world?
COURT
I am interested in your planning activities.
q In other words, what planning activities did you perform before the actual
marathon?
a The planning activities we had, your honor, was to coordinate with the
different agencies involved informing them where they would be more or
less placed.
COURT
q Let us go to . . . Who was supposed to be coordinating with you as to the
citizens action group who was your . . . you were referring to a person who
was supposed to be manning these people and who was the person whom
you coordinate with the Traffic Action Group?
WITNESS
a I can only remember his name . . . his family name is Esguerra.
q How about with the Tanods?
a With the Tanods his name is Pedring Serrano.
q And with the Boys Scouts? (sic)
a And with the Boys Scouts of the Phils. (sic) it is Mr. Greg Panelo.
COURT
q When did you last meet rather how many times did you meet with Esguerra
before the marathon on June 15?
WITNESS
a The Citizens Tra c Action Group, your honor, had been with me in previous
races.
COURT
q I am asking you a speci c question. I am not interested in the Citizen
Tra c Action Group. The marathon was on June 15, did you meet with
him on June 14, June 13 or June 12?
a We met once, your honor, I cannot remember the date.
q You don't recall how many days before?
a I cannot recall at the moment.
q How about with Mr. Serrano, how many times did you meet with him before
the race?
a If my mind does not fail me, your honor, I met him twice because he lives
just within our area and we always see each other.
q How about with Panelo, how many times did you meet him?
a With Mr. Panelo, I did not meet with them, your honor.
q Was there an occasion where before the race you met with these three
people together since you did not meet with Panelo anytime? Was there
anytime where you met with Serrano and Esguerra together?
WITNESS
a No, your honor.
COURT
q When you met once with Esguerra, where did you meet? What place?
a I cannot recall at the moment, your honor, since it was already been almost
six years ago.
q How about Serrano, where did you meet him?
a We met in my place.
q From your house? He went in your house?
a Yes, your honor.
q So you did not have let us say a . . . you don't have records of your
meetings with these people?
WITNESS
a With the Citizens Traffic Action, your honor?
COURT
a Yes.
WITNESS
a I don't have, your honor.
COURT
q Because you are familiar, I was just thinking this is an activity which
requires planning etc., what I was thinking when you said this was never
done in any part of the world but all activities it has to be planned. There
must be some planning, now are you saying that in this particular case you
had no written plan or check list of activities what activities have to be
implemented on a certain point and time, who are the persons whom you
must meet in a certain point and time. TAIaHE
WITNESS
a Normally, we did not have that, your honor, except the check list of all the
things that should be ready at a particular time prior to the race and the
people to be involved and we have a check list to see to it that everything
would be in order before the start of the race.
COURT
Proceed.
ATTY. VINLUAN
q Following the question of the Court Mr. Castro, did you meet with Lt.
Depano of the Police Department who were supposed to supervise the
police officers assigned to help during the race?
a I did not meet with him, sir.
q You did not meet with him?
a I did not meet with him.
q In fact, ever before or during the race you had no occasion to talk to Lt.
Depano. Is that correct?
a That is correct, sir.
ATTY. VINLUAN
Based on the question of the Court and your answer to the question of the Court,
are you trying to say that this planning before any race of all these groups
who have committed to help in the race, this is not done in any part of the
world?
WITNESS
a In the latter years when your race became bigger and bigger, this is being
done now slowly.
ATTY. VINLUAN
q But for this particular race you will admit that you failed to do it when you
have to coordinate and even have a dry run of the race you failed to do all
of that in this particular race, yes or no?
a Because there was . . .
COURT
It was already answered by him when I asked him. The Court has . . . Everybody
has a copy how of this time planner. Any activity or even meeting a
girlfriend or most people plan.
ATTY. F.M. LOMBOS
If your honor please, before we proceed . . .
WITNESS
In the latter years, your honor, when your race became bigger and bigger, this is
being done now slowly.
q For this particular race you will admit that you failed to do it?
a Because there was no need, sir. 5 9
Probably sensing that he might have thereby contradicted himself, Castro, Jr.
clarified on re-direct examination:
ATTY. LOMBOS
Q Now, you also responded to a question during the same hearing and this
appears on page 26 of the transcript that you did not hold any rehearsal or
dry run for this particular marathon. Could you tell the Court why you did
not hold any such rehearsal or dry run?
A Because I believe there was no need for us to do that since we have been
doing this for many years and we have been the same people, same
organization with us for so many years conducting several races including
some races in that area consisting of longer distances and consisting of
more runners, a lot more runners in that areay (sic) so these people, they
know exactly what to do and there was no need for us to have a rehearsal.
I believe this rehearsal would only be applicable if I am new and these
people are new then, we have to rehearse.
ATTY. LOMBOS
q You also stated Mr. Castro that you did not have any action plan or
brochure which you would indicate, an assignment of each of the
participating group as to what to do during the race. Will you please
explain what you meant when you said you have no action plan or
brochure?
WITNESS
a What I mean of action plan, I did not have any written action plan but I was
fully aware of what to do. I mean, those people did not just go there out of
nowhere. Obviously, there was an action on my part because I have to
communicate with them previously and to tell them exactly what the race
is all about; where to start; where it would end, and that is the reason why
we have the ambulances, we have the Boy Scouts, we have the CTA, we
have the police, so it was very obvious that there was a plan of action but
not written because I know pretty well exactly what to do. I was dealing
with people who have been doing this for a long period of time. 6 0
While the level of trust Intergames had on its volunteers was admirable, the
coordination among the cooperating agencies was predicated on circumstances
unilaterally assumed by Intergames. It was obvious that Intergames' inaction had been
impelled by its belief that it did not need any action plan because it had been dealing
with people who had been manning similar races for a long period of time. cDHAES
The evidence presented undoubtedly established that Intergames' notion of

coordination only involved informing the cooperating agencies of the date of the race,
the starting and ending points of the route, and the places along the route to man.
Intergames did not conduct any general assembly with all of them, being content with
holding a few sporadic meetings with the leaders of the coordinating agencies. It held
no brie ngs of any kind on the actual duties to be performed by each group of
volunteers prior to the race. It did not instruct the volunteers on how to minimize, if not
avert, the risks of danger in manning the race, despite such being precisely why their
assistance had been obtained in the first place.
Intergames had no right to assume that the volunteers had already been aware of
what exactly they would be doing during the race. It had the responsibility and duty to
give to them the proper instructions despite their experience from the past races it had
organized considering that the particular race related to runners of a different level of
experience, and involved different weather and environmental conditions, and tra c
situations. It should have remembered that the personnel manning the race were not its
own employees paid to perform their tasks, but volunteers whose nature of work was
remotely associated with the safe conduct of road races. Verily, that the volunteers
showed up and assumed their proper places or that they were su cient in number was
not really enough. It is worthy to stress that proper coordination in the context of the
event did not consist in the mere presence of the volunteers, but included making sure
that they had been properly instructed on their duties and tasks in order to ensure the
safety of the young runners.
It is relevant to note that the participants of the 1st Pop Cola Junior Marathon
were mostly minors aged 14 to 18 years joining a race of that kind for the rst time.
The combined factors of their youth, eagerness and inexperience ought to have put a
reasonably prudent organizer on higher guard as to their safety and security needs
during the race, especially considering Intergames' awareness of the risks already
foreseen and of other risks already known to it as of similar events in the past
organizer. There was no question at all that a higher degree of diligence was required
given that practically all of the participants were children or minors like Rommel; and
that the law imposes a duty of care towards children and minors even if ordinarily there
was no such duty under the same circumstances had the persons involved been adults
of su cient discretion. 6 1 In that respect, Intergames did not observe the degree of
care necessary as the organizer, rendering it liable for negligence. As the Court has
emphasized in Corliss v. The Manila Railroad Company , 6 2 where the danger is great, a
high degree of care is necessary, and the failure to observe it is a want of ordinary care
under the circumstances. 6 3
The circumstances of the persons, time and place required far more than what
Intergames undertook in staging the race. Due diligence would have made a reasonably
prudent organizer of the race participated in by young, inexperienced or beginner
runners to conduct the race in a route suitably blocked off from vehicular tra c for the
safety and security not only of the participants but the motoring public as well. Since
the marathon would be run alongside moving vehicular tra c, at the very least,
Intergames ought to have seen to the constant and closer coordination among the
personnel manning the route to prevent the foreseen risks from befalling the
participants. But this it sadly failed to do.
II
The negligence of Intergames as the organizer
was the proximate cause of the death of Rommel
As earlier mentioned, the CA found that Rommel, while running the marathon on
Don Mariano Marcos Avenue and after passing the Philippine Atomic Energy
Commission Building, was bumped by a passenger jeepney that was racing with a
minibus and two other vehicles as if trying to crowd each other out. As such, the death
of Rommel was caused by the negligence of the jeepney driver.
Intergames staunchly insists that it was not liable, maintaining that even
assuming arguendo that it was negligent, the negligence of the jeepney driver was the
proximate cause of the death of Rommel; hence, it should not be held liable.
Did the negligence of Intergames give rise to its liability for the death of Rommel
notwithstanding the negligence of the jeepney driver?
In order for liability from negligence to arise, there must be not only proof of
damage and negligence, but also proof that the damage was the consequence of the
negligence. The Court has said in Vda. de Gregorio v. Go Chong Bing : 6 4
x x x Negligence as a source of obligation both under the civil law and in
American cases was carefully considered and it was held:
We agree with counsel for appellant that under the Civil
Code, as under the generally accepted doctrine in the United
States, the plaintiff in an action such as that under consideration,
in order to establish his right to a recovery, must establish by
competent evidence:
(1) Damages to the plaintiff.
(2) Negligence by act or omission of which defendant
personally or some person for whose acts it must respond, was
guilty.
(3) The connection of cause and effect between
the negligence and the damage. (Taylor vs. Manila Electric
Railroad and Light Co., supra, p. 15.)
In accordance with the decision of the Supreme Court of
Spain, in order that a person may be held guilty for damage
through negligence, it is necessary that there be an act or
omission on the part of the person who is to be charged with the
liability and that damage is produced by the said act or omission.
6 5 (Emphasis supplied) ASEcHI
We hold that the negligence of Intergames was the proximate cause despite the
intervening negligence of the jeepney driver.
Proximate cause is "that which, in natural and continuous sequence, unbroken by
any new cause, produces an event, and without which the event would not have
occurred." 6 6 In Vda. de Bataclan, et al. v. Medina , 6 7 the Court, borrowing from
American Jurisprudence, has more extensively defined proximate cause thusly:
"* * * 'that cause, which, in natural and continuous sequence, unbroken
by any e cient intervening cause, produces the injury and without which the
result would not have occurred.' And more comprehensively, 'the proximate legal
cause is that acting rst and producing the injury, either immediately or by
setting other events in motion, all constituting a natural and continuous chain of
events, each having a close causal connection with its immediate predecessor,
the nal event in the chain immediately effecting the injury as a natural and
probable result of the cause which rst acted, under such circumstances that
the person responsible for the rst event should, as an ordinarily prudent and
intelligent person, have reasonable ground to expect at the moment of his act or
default that an injury to some person might probably result therefrom." 6 8
To be considered the proximate cause of the injury, the negligence need not be
the event closest in time to the injury; a cause is still proximate, although farther in time
in relation to the injury, if the happening of it set other foreseeable events into motion
resulting ultimately in the damage. 6 9 According to an authority on civil law: 7 0 "A prior
and remote cause cannot be made the basis of an action, if such remote cause did
nothing more than furnish the condition or give rise to the occasion by which the injury
was made possible, if there intervened between such prior or remote cause and the
injury a distinct, successive, unrelated and e cient cause, even though such injury
would not have happened but for such condition or occasion. If no damage exists in the
condition except because of the independent cause, such condition was not the
proximate cause. And if an independent negligent act or defective condition sets into
operation the circumstances which result in injury because of the prior defective
condition, such act or condition is the proximate cause."
Bouvier adds:
In many cases important questions arise as to which, in the chain of acts
tending to the production of a given state of things, is to be considered the
responsible cause. It is not merely distance of place or of causation that renders
a cause remote. The cause nearest in the order of causation, without any
e cient concurring cause to produce the result, may be considered the direct
cause. In the course of decisions of cases in which it is necessary to
determine which of several causes is so far responsible for the
happening of the act or injury complained of, what is known as the
doctrine of proximate cause is constantly resorted to in order to
ascertain whether the act, omission, or negligence of the person whom
it is sought to hold liable was in law and in fact responsible for the
result which is the foundation of the action. 7 1
xxx xxx xxx
The question of proximate cause is said to be determined, not
by the existence or non-existence of intervening events, but by their
character and the natural connection between the original act or
omission and the injurious consequences. When the intervening cause
is set in operation by the original negligence, such negligence is still
the proximate cause; x x x If the party guilty of the rst act of
negligence might have anticipated the intervening cause, the
connection is not broken; x x x. Any number of causes and effects
may intervene, and if they are such as might with reasonable diligence
have been foreseen, the last result is to be considered as the
proximate result. But whenever a new cause intervenes, which is not a
consequence of the rst wrongful cause, which is not under control of
the wrongdoer, which could not have been foreseen by the exercise of
reasonable diligence, and except for which the nal injurious
consequence could not have happened, then such injurious
consequence must be deemed too remote; x x x. 7 2 (bold underscoring
supplied for emphasis)
An examination of the records in accordance with the foregoing concepts
supports the conclusions that the negligence of Intergames was the proximate cause
of the death of Rommel; and that the negligence of the jeepney driver was not an
efficient intervening cause.
First of all, Intergames' negligence in not conducting the race in a road blocked
off from vehicular tra c, and in not properly coordinating the volunteer personnel
manning the marathon route effectively set the stage for the injury complained of. The
submission that Intergames had previously conducted numerous safe races did not
persuasively demonstrate that it had exercised due diligence because, as the trial court
pointedly observed, "[t]hey were only lucky that no accident occurred during the
previous marathon races but still the danger was there." 7 3
Secondly, injury to the participants arising from an unfortunate vehicular accident
on the route was an event known to and foreseeable by Intergames, which could then
have been avoided if only Intergames had acted with due diligence by undertaking the
race on a blocked-off road, and if only Intergames had enforced and adopted more
efficient supervision of the race through its volunteers.
And, thirdly, the negligence of the jeepney driver, albeit an intervening cause, was
not e cient enough to break the chain of connection between the negligence of
Intergames and the injurious consequence suffered by Rommel. An intervening cause,
to be considered e cient, must be "one not produced by a wrongful act or omission,
but independent of it, and adequate to bring the injurious results. Any cause intervening
between the rst wrongful cause and the nal injury which might reasonably have been
foreseen or anticipated by the original wrongdoer is not such an e cient intervening
cause as will relieve the original wrong of its character as the proximate cause of the
final injury." 7 4 ITAaHc
In ne, it was the duty of Intergames to guard Rommel against the foreseen risk,
but it failed to do so.
III
The doctrine of assumption of risk
had no application to Rommel
Unlike the RTC, the CA ruled that the doctrine of assumption of risk applied
herein; hence, it declared Intergames and Cosmos not liable. The CA rendered the
following rationalization to buttress its ruling, to wit:
In this case, appellant Romulo Abrogar himself admitted that his son,
Rommel Abrogar, surveyed the route of the marathon and even attended a
brie ng before the race. Consequently, he was aware that the marathon would
pass through a national road and that the said road would not be blocked off
from tra c. And considering that he was already eighteen years of age, had
voluntarily participated in the marathon, with his parents' consent, and was well
aware of the tra c hazards along the route, he thereby assumed all the risks of
the race. This is precisely why permission from the participant's parents,
submission of a medical certi cate and a waiver of all rights and causes of
action arising from the participation in the marathon which the participant or his
heirs may have against appellant Intergames were required as conditions in
joining the marathon.
In the decision of the trial court, it stated that the risk mentioned in the
waiver signed by Rommel Abrogar only involved risks such as stumbling,
suffering heatstroke, heart attack and other similar risks. It did not consider
vehicular accident as one of the risks included in the said waiver.
This Court does not agree. With respect to voluntary participation in a
sport, the doctrine of assumption of risk applies to any facet of the activity
inherent in it and to any open and obvious condition of the place where it is
carried on. We believe that the waiver included vehicular accidents for the
simple reason that it was a road race run on public roads used by vehicles.
Thus, it cannot be denied that vehicular accidents are involved. It was not a
track race which is held on an oval and insulated from vehicular tra c. In a
road race, there is always the risk of runners being hit by motor vehicles while
they train or compete. That risk is inherent in the sport and known to runners. It
is a risk they assume every time they voluntarily engage in their sport.
Furthermore, where a person voluntarily participates in a lawful game or
contest, he assumes the ordinary risks of such game or contest so as to
preclude recovery from the promoter or operator of the game or contest for
injury or death resulting therefrom. Proprietors of amusements or of places
where sports and games are played are not insurers of safety of the public nor
of their patrons.
In Mc Leod Store v. Vinson 213 Ky 667, 281 SW 799 (1926), it was held
that a boy, seventeen years of age, of ordinary intelligence and physique, who
entered a race conducted by a department store, the purpose of which was to
secure guinea fowl which could be turned in for cash prizes, had assumed the
ordinary risks incident thereto and was barred from recovering against the
department store for injuries suffered when, within catching distance, he
stopped to catch a guinea, and was tripped or stumbled and fell to the
pavement, six or eight others falling upon him. The court further said: "In this
(the race) he was a voluntary participant. x x x The anticipated danger was as
obvious to him as it was to appellant (the department store). While not an adult,
he was practically 17 years of age, of ordinary intelligence, and perfectly able to
determine the risks ordinarily incident to such games. An ordinary boy of that
age is practically as well advised as to the hazards of baseball, basketball,
football, foot races and other games of skill and endurance as is an adult x x x."
In the case at bar, the "1st Pop Cola Junior Marathon" held on June 15,
1980 was a race the winner of which was to represent the country in the annual
Spirit of Pheidippides Marathon Classic in Greece, if he equals or breaks the 29-
minute mark for the 19-km. race. Thus, Rommel Abrogar having voluntarily
participated in the race, with his parents' consent, assumed all the risks of the
race. 7 5
The doctrine of assumption of risk means that one who voluntarily exposes
himself to an obvious, known and appreciated danger assumes the risk of injury that
may result therefrom. 7 6 It rests on the fact that the person injured has consented to
relieve the defendant of an obligation of conduct toward him and to take his chance of
injury from a known risk, and whether the former has exercised proper caution or not is
immaterial. 7 7 In other words, it is based on voluntary consent, express or implied, to
accept danger of a known and appreciated risk; it may sometimes include acceptance
of risk arising from the defendant's negligence, but one does not ordinarily assume risk
of any negligence which he does not know and appreciate. 7 8 As a defense in
negligence cases, therefore, the doctrine requires the concurrence of three elements,
namely: (1) the plaintiff must know that the risk is present; (2) he must further
understand its nature; and (3) his choice to incur it must be free and voluntary. 7 9
According to Prosser: 8 0 "Knowledge of the risk is the watchword of assumption of
risk."
Contrary to the notion of the CA, the concurrence of the three elements was not
shown to exist. Rommel could not have assumed the risk of death when he participated
in the race because death was neither a known nor normal risk incident to running a
race. Although he had surveyed the route prior to the race and should be presumed to
know that he would be running the race alongside moving vehicular tra c, such
knowledge of the general danger was not enough, for some authorities have required
that the knowledge must be of the speci c risk that caused the harm to him. 8 1 In
theory, the standard to be applied is a subjective one, and should be geared to the
particular plaintiff and his situation, rather than that of the reasonable person of
ordinary prudence who appears in contributory negligence. 8 2 He could not have
appreciated the risk of being fatally struck by any moving vehicle while running the race.
Instead, he had every reason to believe that the organizer had taken adequate measures
to guard all participants against any danger from the fact that he was participating in an
organized marathon. Stated differently, nobody in his right mind, including minors like
him, would have joined the marathon if he had known of or appreciated the risk of harm
or even death from vehicular accident while running in the organized running event.
Without question, a marathon route safe and free from foreseeable risks was the
reasonable expectation of every runner participating in an organized running event. CHTAIc
Neither was the waiver by Rommel, then a minor, an effective form of express or
implied consent in the context of the doctrine of assumption of risk. There is ample
authority, cited in Prosser, 8 3 to the effect that a person does not comprehend the risk
involved in a known situation because of his youth, 8 4 or lack of information or
experience, 8 5 and thus will not be taken to consent to assume the risk.
Clearly, the doctrine of assumption of risk does not apply to bar recovery by the
petitioners.
IV
Cosmos is not liable for the negligence
of Intergames as the organizer
Nonetheless, the CA did not err in absolving Cosmos from liability.
The sponsorship of the marathon by Cosmos was limited to nancing the race.
Cosmos did nothing beyond that, and did not involve itself at all in the preparations for
the actual conduct of the race. This verity was expressly con rmed by Intergames,
through Castro, Jr., who declared as follows:
COURT
q Do you discuss all your preparation with Cosmos Bottling Company?
a As far as the Cosmos Bottling Company (sic) was a sponsor as to
the actual conduct of the race, it is my responsibility. The
conduct of the race is my responsibility. The sponsor has nothing
to do as well as its code of the race because they are not the
ones running. I was the one running. The responsibility of
Cosmos was just to provide the sponsor's money.
COURT
q They have no right to who (sic) suggest the location, the number
of runners, you decide these yourself without consulting them?
a Yes, your honor. 86
We uphold the nding by the CA that the role of Cosmos was to pursue its
corporate commitment to sports development of the youth as well as to serve the need
for advertising its business. In the absence of evidence showing that Cosmos had a
hand in the organization of the race, and took part in the determination of the route for
the race and the adoption of the action plan, including the safety and security measures
for the bene t of the runners, we cannot but conclude that the requirement for the
direct or immediate causal connection between the nancial sponsorship of Cosmos
and the death of Rommel simply did not exist. Indeed, Cosmos' mere sponsorship of
the race was, legally speaking, too remote to be the e cient and proximate cause of
the injurious consequences.
V
Damages
Article 2202 of the Civil Code lists the damages that the plaintiffs in a suit upon
crimes and quasi-delicts can recover from the defendant, viz.:
Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all
damages which are the natural and probable consequences of the act or
omission complained of. It is not necessary that such damages have been
foreseen or could have reasonably been foreseen by the defendant.
Accordingly, Intergames was liable for all damages that were the natural and
probable consequences of its negligence. In its judgment, the RTC explained the award
of damages in favor of the petitioners, as follows:
As borne by the evidence on record, the plaintiffs incurred medical,
hospitalization and burial expenses for their son in this aggregate amount of
P28,061.65 (Exhibits "D", "D-1" and "D-2"). In instituting this case, they have paid
their lawyer P5,000 as initial deposit, their arrangement being that they would
pay attorney's fees to the extent of 10% of whatever amount would be awarded
to them in this case.
For the loss of a son, it is unquestionable that plaintiffs suffered untold
grief which should entitle them to recover moral damages, and this Court
believes that if only to assuage somehow their untold grief but not necessarily
to compensate them to the fullest, the nominal amount of P100,00.00 n should
be paid by the defendants.
For failure to adopt elementary and basic precautionary measure to
insure the safety of the participants so that sponsors and organizers of sports
events should exercise utmost diligence in preventing injury to the participants
and the public as well, exemplary damages should also be paid by the
defendants and this Court considers the amount of P50,000.00 as reasonable.
87 EATCcI
Although we will not disturb the foregoing ndings and determinations, we need
to add to the justi cation for the grant of exemplary damages. Article 2231 of the Civil
Code stipulates that exemplary damages are to be awarded in cases of quasi-delict if
the defendant acted with gross negligence. The foregoing characterization by the RTC
indicated that Intergames' negligence was gross. We agree with the characterization.
Gross negligence, according to Mendoza v. Spouses Gomez , 8 8 is the absence of care
or diligence as to amount to a reckless disregard of the safety of persons or property;
it evinces a thoughtless disregard of consequences without exerting any effort to avoid
them. Indeed, the failure of Intergames to adopt the basic precautionary measures for
the safety of the minor participants like Rommel was in reckless disregard of their
safety. Conduct is reckless when it is an extreme departure from ordinary care, in a
situation in which a high degree of danger is apparent; it must be more than any mere
mistake resulting from inexperience, excitement, or confusion, and more than mere
thoughtlessness or inadvertence, or simple inattention. 8 9
The RTC did not recognize the right of the petitioners to recover the loss of
earning capacity of Rommel. It should have, for doing so would have conformed to
jurisprudence whereby the Court has unhesitatingly allowed such recovery in respect of
children, students and other non-working or still unemployed victims. The legal basis
for doing so is Article 2206 (1) of the Civil Code, which stipulates that the defendant
"shall be liable for the loss of the earning capacity of the deceased, and the indemnity
shall be paid to the heirs of the latter; such indemnity shall in every case be assessed
and awarded by the court, unless the deceased on account of permanent physical
disability not caused by the defendant, had no earning capacity at the time of his death."
Indeed, damages for loss of earning capacity may be awarded to the heirs of a
deceased non-working victim simply because earning capacity, not necessarily actual
earning, may be lost.
In Metro Manila Transit Corporation v. Court of Appeals , 9 0 damages for loss of
earning capacity were granted to the heirs of a third-year high school student of the
University of the Philippines Integrated School who had been killed when she was hit
and run over by the petitioner's passenger bus as she crossed Katipunan Avenue in
Quezon City. The Court justified the grant in this wise:
Compensation of this nature is awarded not for loss of earnings
but for loss of capacity to earn money. Evidence must be presented
that the victim, if not yet employed at the time of death, was
reasonably certain to complete training for a speci c profession. In
People v. Teehankee , no award of compensation for loss of earning capacity
was granted to the heirs of a college freshman because there was no su cient
evidence on record to show that the victim would eventually become a
professional pilot. But compensation should be allowed for loss of
earning capacity resulting from the death of a minor who has not yet
commenced employment or training for a speci c profession if
su cient evidence is presented to establish the amount thereof. 9 1
(bold underscoring supplied for emphasis)
In People v. Sanchez , 9 2 damages for loss of earning capacity was also allowed
to the heirs of the victims of rape with homicide despite the lack of su cient evidence
to establish what they would have earned had they not been killed. The Court
rationalized its judgment with the following observations:
Both Sarmenta and Gomez were senior agriculture students at UPLB, the
country's leading educational institution in agriculture. As reasonably assumed
by the trial court, both victims would have graduated in due course.
Undeniably, their untimely death deprived them of their future time
and earning capacity. For these deprivation, their heirs are entitled to
compensation. xxxx. However, considering that Sarmenta and Gomez
would have graduated in due time from a reputable university, it
would not be unreasonable to assume that in 1993 they would have
earned more than the minimum wage. All factors considered, the Court
believes that it is fair and reasonable to x the monthly income that
the two would have earned in 1993 at P8,000.00 n 9 3 (bold underscoring
supplied for emphasis)
In Pereña v. Zarate, 9 4 the Court xed damages for loss of earning capacity to be
paid to the heirs of the 15-year-old high school student of Don Bosco Technical
Institute killed when a moving train hit the school van ferrying him to school while it was
traversing the railroad tracks. The RTC and the CA had awarded damages for loss of
earning capacity computed on the basis of the minimum wage in effect at the time of
his death. Upholding said findings, the Court opined:
x x x, the fact that Aaron was then without a history of earnings should
not be taken against his parents and in favor of the defendants whose
negligence not only cost Aaron his life and his right to work and earn money, but
also deprived his parents of their right to his presence and his services as well. x
x x. Accordingly, we emphatically hold in favor of the indemni cation
for Aaron's loss of earning capacity despite him having been
unemployed, because compensation of this nature is awarded not for
loss of time or earnings but for loss of the deceased's power or ability
to earn money.
The petitioners su ciently showed that Rommel was, at the time of his untimely
but much lamented death, able-bodied, in good physical and mental state, and a
student in good standing. 9 5 It should be reasonable to assume that Rommel would
have finished his schooling and would turn out to be a useful and productive person had
he not died. Under the foregoing jurisprudence, the petitioners should be compensated
for losing Rommel's power or ability to earn. The basis for the computation of earning
capacity is not what he would have become or what he would have wanted to be if not
for his untimely death, but the minimum wage in effect at the time of his death. The
formula for this purpose is: DHITCc
Net Earning Capacity = Life Expectancy x [Gross Annual Income less Necessary Living
Expenses] 9 6
Life expectancy is equivalent to 2/3 multiplied by the difference of 80 and the
age of the deceased. Since Rommel was 18 years of age at the time of his death, his life
expectancy was 41 years. His projected gross annual income, computed based on the
minimum wage for workers in the non-agricultural sector in effect at the time of his
death, 9 7 then xed at P14.00/day, is P5,535.83. Allowing for necessary living expenses
of 50% of his projected gross annual income, his total net earning capacity is
P113,484.52.
Article 2211 of the Civil Code expressly provides that interest, as a part of
damages, may be awarded in crimes and quasi-delicts at the discretion of the court.
The rate of interest provided under Article 2209 of the Civil Code is 6% per annum in the
absence of stipulation to the contrary. The legal interest rate of 6% per annum is to be
imposed upon the total amounts herein awarded from the time of the judgment of the
RTC on May 10, 1991 until finality of judgment. 9 8 Moreover, pursuant to Article 2212 9 9
of the Civil Code, the legal interest rate of 6% per annum is to be further imposed on the
interest earned up to the time this judgment of the Court becomes nal and executory
until its full satisfaction. 1 0 0
Article 2208 of the Civil Code expressly allows the recovery of attorney's fees
and expenses of litigation when exemplary damages have been awarded. Thus, we
uphold the RTC's allocation of attorney's fees in favor of the petitioners equivalent to
10% of the total amount to be recovered, inclusive of the damages for loss of earning
capacity and interests, which we consider to be reasonable under the circumstances.
WHEREFORE , the Court PARTLY AFFIRMS the decision promulgated on March
10, 2004 to the extent that it absolved COSMOS BOTTLING COMPANY, INC. from
liability; REVERSES and SETS ASIDE the decision as to INTERGAMES, INC. , and
REINSTATES as to it the judgment rendered on May 10, 1991 by the Regional Trial
Court, Branch 83, in Quezon City subject to the MODIFICATIONS that INTERGAMES,
INC. is ORDERED TO PAY to the petitioners, in addition to the awards thereby
allowed: (a) the sum of P113,484.52 as damages for the loss of Rommel Abrogar's
earning capacity; (b) interest of 6% per annum on the actual damages, moral damages,
exemplary damages and loss of earning capacity reckoned from May 10, 1991 until full
payment; (c) compounded interest of 6% per annum from the nality of this decision
until full payment; and (d) costs of suit.
SO ORDERED.
Velasco, Jr., Reyes, Jardeleza and Tijam, JJ., concur.
Footnotes
1. Rollo, pp. 49-78; penned by Associate Justice Renato C. Dacudao (retired), with the
concurrence of Presiding Justice Cancio C. Garcia (later a Member of the Court) and
Associate Justice Danilo B. Pine (retired).
2. Id. at 169-179; penned by Presiding Judge Estrella T. Estrada.
3. Note that the incident subject of this case occurred prior to the enactment of Republic Act No.
6809 (An Act Lowering the Age of Majority from Twenty One to Eighteen Years,
Amending for the Purpose Executive Order Numbered Two Hundred Nine, and for Other
Purposes). Effective on December 13, 1989.
4. Rollo, p. 50.
5. Records, Vol. I, pp. 1-6.

6. Id. at 17-18.
7. Id. at 18.
8. Id.
9. Id. at 19-20.
10. Id.
11. Id. at 33-34.
12. Id.
13. Id.
14. Id. at 42-43.
15. Id.
16. Id. at 44.
17. Records, Vol. I, p. 58.
18. Supra note 2, at 178-179.

19. Id. at 175-177.
20. Id. at 177.
21. Id.

22. CA rollo, p. 30.
23. Id. at 59-60.
24. Rollo, pp. 70-71.
25. Supra note 1.

26. Rollo, pp. 71-77.
27. Id. at 27.
28. Id. at 32.

29. Id. at 31, 33.
30. Id. at 513.
31. Pilipinas Shell Petroleum Corporation v. Gobonseng, Jr., G.R. No. 163562, July 21, 2006,
496 SCRA 305, 316; Sta. Maria v. Court of Appeals, G.R. No. 127549, January 28, 1998,
285 SCRA 351, 357-358; Fuentes v. Court of Appeals, G.R. No. 109849, February 26,
1997, 268 SCRA 703, 708-709; Reyes v. Court of Appeals, G.R. No. 110207, July 11, 1996,
258 SCRA 651, 659; Floro v. Llenado, G.R. No. 75723, June 2, 1995, 244 SCRA 713, 720;
Remalante v. Tibe, No. L-59514, February 25, 1988, 158 SCRA 138, 145-146.
32. Philippine National Railways v. Vizcara, G.R. No. 190022, February 15, 2012, 666 SCRA 363,
374; citing Layugan v. Intermediate Appellate Court, No. L-73998, November 14, 1988,
167 SCRA 363, 372-373.
33. Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the circumstances
of the person, of the time and of the place. When negligence shows bad faith, the
provision of Articles 1171 and 2201, paragraph 2, shall apply.
34. 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 quasi-delict and is
governed by the provisions of this Chapter.
35. Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.
36. 37 Phil. 809 (1918).
37. Id. at 813.
38. Now called Batasan Road.

39. Now called Commonwealth Avenue.
40. TSN, September 4, 1984, p. 5.
41. According to Castro, Jr., Intergames had only two employees: himself as President (TSN,
September 4, 1984, pp. 13-14); and his wife as the Project Coordinator (TSN, April 12,
1985, p. 4).
42. Id.
43. TSN, March 15, 1985, pp. 5-16.

44. TSN, April 12, 1985, p. 12.
45. TSN, September 4, 1984, pp. 9-11.
46. Id. at 7-8.
47. TSN, September 10, 1985, p. 6.

48. TSN, March 15, 1985, p. 7.
49. TSN, January 30, 1986, pp. 15-16.
50. Supra note 1, at 72.

51. TSN, January 30, 1986, p. 58.
52. Id. at 59.
53. TSN, September 10, 1985, p. 11.

54. Id. at 11, 13-14.
55. TSN, April 15, 1986, p. 7.
56. Id. at 10.

57. Supra note 1.
58. TSN, April 15, 1986, pp. 8-9.
59. TSN, January 30, 1986, pp. 26-31.
60. TSN, June 23, 1986, pp. 12-13.

61. Aquino, Torts and Damages, 2013, p. 64.
62. No. L-21291, March 28, 1969, 27 SCRA 674.
63. Id. at 681.

64. 102 Phil. 556 (1957).
65. Id. at 560.
66. II Bouvier's Law Dictionary and Concise Encyclopedia, Third Edition (1914), citing Butcher v.
R. Co., 37 W.Va. 180, 16 S.E. 457, 18 L.R.A. 519; Lutz v. R. Co., 6 N.M. 496, 30 Pac. 912,
16 L.R.A. 819.
67. 102 Phil. 181 (1957).

68. Id. at 186.
69. See Pullman Palace Car Co. v. Laack, 143 Ill. 242, 32 N.E. 285, 18 L.R.A. 215.
70. VI Caguioa, E. P., Comments and Cases on Civil Law, 1970 First Edition, Central Book
Supply, Inc., Quezon City, pp. 402-403.
71. I Bouvier's Law Dictionary and Concise Encyclopedia, Third Edition (1914), p. 432.
72. Id. at 433.
73. Rollo, p. 176.
74. 14 Words and Phrases, Efficient Intervening Cause, p. 172; citing State v. Des Champs, 120
S.E. 491, 493; 126 S.C. 416.
75. Supra note 1, at 75-76.
76. McGeary v. Reed, 151 N.E. 2d 789, 794, 105 Ohio App. 111.
77. Bull S.S. Line v. Fisher, 77 A. 2d 142, 145, 196 Md. 519.
78. Turpin v. Shoemaker, Mo., 427 S.W. 2d 485, 489.
79. Prosser and Keeton, The Law of Torts, Fifth Edition, Hornbook Series (Student Edition), West
Group, p. 487.
80. Id., citing Cincinnati, New Orleans & Texas Paci c Railway Co. v. Thompson , 8th Cir., 1916,
236 F. 1, 9.
81. Id., citing Garcia v. City of South Tucson , App. 1981, 131 Ariz. 315, 640 P.2d 1117, 1121;
Maxey v. Freightliner, 5th Cir., 1982, 665 F.2d 1367; Heil Co. v. Grant, Tex. Civ. App. 1976,
534 S.W.2d 916; Klein v. R.D. Werner Co., 1982, 98 Wn.2d 316, 654 P.2d 94.
82. Id.
83. Id., citing Rutter v. Northeastern Beaver Country School District , 1981, 496 Pa. 590, 437 A.2d
1198; Campbell v. Nordco Products , 7th Cir. 1980, 629 F.2d 1258; Zrust v. Spencer
Foods, Inc., 8th Cir. 1982, 667 F.2d 760; Scoggins v. Jude , D.C. App. 1980, 419 A.2d 999;
Shahrokhfar v. State Farm Mutual Automobile Insurance Co. , 1981, 634 P.2d 653;
Antcliff v. Datzman, 1982, 436 N.E.2d 114.
84. Id., citing Aldes v. St. Paul Baseball Club , 1958, 251 Minn. 440, 88 N.W.2d 94; Freedman v.
Hurwitz, 1933, 116 Conn. 283, 164 A. 647; Everton Silica Sand Co. v. Hicks , 1939, 197
Ark. 980, 125 S.W.2d 793; Rutter v. Northeastern Beaver Country School District , 1981,
496 Pa. 590, 437 A.2d 1198 (involving a 16-year old high school football player).
85. Id., citing Dee v. Parish , 1959, 160 Tex. 171, 327 S.W.2d 449, on remand, 1960, 332 S.W.2d
764; Hanley v. California Bridge & Construction Co., 1899, 127 Cal. 232, 59 P. 577.
86. TSN, January 30, 1986, p. 20.
87. Rollo, pp. 177-178.
88. G.R. No. 160110, June 18, 2014, 726 SCRA 505, 526.
89. 36A Works and Phrases, 322; citing Schick v. Ferolito, 767 A. 2d 962, 167 N.J.7.
90. G.R. No. 116617, November 16, 1998, 298 SCRA 495.
91. Id. at 510-511.
92. G.R. Nos. 121039-121045, October 18, 2001, 367 SCRA 520.
93. Id. at 531.
94. G.R. No. 157917, August 29, 2012, 679 SCRA 208, 234.
95. TSN, June 22, 1981, pp. 3-6.

96. Villa Rey Transit, Inc. v. Court of Appeals, No. L-25499, February 18, 1970, 31 SCRA 511,
515-518.
97. Presidential Decree No. 1713 dated August 18, 1980.
98. Rollo, p. 179.
99. Article 2212. Interest due shall earn legal interest from the time it is judicially demanded,
although the obligation may be silent upon this point. (1109a)
100. Nacar v. Gallery Frames and/or Bordey, Jr., G.R. No. 189871, August 13, 2013, 703 SCRA
439, modifying the ruling in Eastern Shipping Lines, Inc. v. Court of Appeals (G.R. No.
97412, July 12, 1994, 234 SCRA 78) embodying BSP-MB Circular No. 799.
n Note from the Publisher: Copied verbatim from the official copy.
n Note from the Publisher: Written as "P8,000.000" in the original document.

FIRST DIVISION
[G.R. No. 115024. February 7, 1996.]
MA. LOURDES VALENZUELA , petitioner, vs . COURT OF APPEALS,

RICHARD LI and ALEXANDER COMMERCIAL, INC. , respondents.
[G.R. No. 117944. February 7, 1996.]
RICHARD LI , petitioner, vs. COURT OF APPEALS and MA. LOURDES

VALENZUELA , respondents.
Tan & Venturanza Law Offices for Alexander Commercial, Inc. and Richard Li.
Cortes & Reyna Law Firm for Ma. Lourdes Valenzuela. RBR
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE COURT OF

APPEALS; NOT NORMALLY DISTURBED AS A GENERAL RULE; EXCEPTION. — As a general
rule, ndings of fact of the Court of Appeals are binding and conclusive upon us, and this
Court will not normally disturb such factual ndings unless the ndings of fact of the said
court are palpably unsupported by the evidence on record or unless the judgment itself is
based on a misapprehension of facts.
2. CIVIL LAW; QUASI-DELICT; CONTRIBUTORY NEGLIGENCE, DEFINED. —
Contributory negligence is conduct on the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls below the standard to which he is required
to conform for his own protection. (Keeton and Dobbs, et al., Prosser and Keaton On Torts,
451 [1984] citing Second Restatement Of Torts, Sec. 463.) ELC
3. ID.; ID.; PRINCIPLE OF "EMERGENCY RULE," CONSTRUED; APPLICATION

THEREOF DEPENDS ON THE OVER-ALL NATURE OF THE CIRCUMSTANCES. — Courts have
traditionally been compelled to recognize that an actor who is confronted with an
emergency is not to be held up to the standard of conduct normally applied to an individual
who is in no such situation. The law takes stock of impulses of humanity when placed in
threatening or dangerous situations and does not require the same standard of thoughtful
and re ective care from persons confronted by unusual and oftentimes threatening
conditions. Under the "emergency rule" adopted by this Court in Gan vs. Court of Appeals,
165 SCRA 378 (1988) cf. Siegl vs. Watson, 195 NW 867, an individual who suddenly nds
himself in a situation of danger and is required to act without much time to consider the
best means that may be adopted to avoid the impending danger, is not guilty of negligence
if he fails to undertake what subsequently and upon re ection may appear to be a better
solution, unless the emergency was brought by his own negligence. While the emergency
rule applies to those cases in which re ective thought, or the opportunity to adequately
weigh a threatening situation is absent, the conduct which is required of an individual in
such cases is dictated not exclusively by the suddenness of the event which absolutely
negates thoughtful care, but by the over-all nature of the circumstances. A woman driving a
vehicle suddenly crippled by a at tire on a rainy night will not be faulted for stopping at a
point which is both convenient for her to do so and which is not a hazard to other
motorists.
4. ID.; ID.; NEGLIGENCE, DEFINED. — "Negligence, as it is commonly understood
is conduct which creates an undue risk of harm to others." It is the failure to observe that
degree of care, precaution, and vigilance which the circumstances justly demand, whereby
such other person suffers injury. We stressed, in Corliss vs. Manila Railroad Company, 27
SCRA 674 (1969), that negligence is the want of care required by the circumstances.
5. ID.; ID.; CAR OWNER IS JOINTLY AND SEVERALLY LIABLE BASED ON THE
PRINCIPLE OF "BONUS PATER FAMILIAS." — In ne, Alexander Commercial, Inc. has not
demonstrated, to our satisfaction, that it exercised the care and diligence of a good father
of the family in entrusting its company car to Li. No allegations were made as to whether
or not the company took the steps necessary to determine or ascertain the driving
pro ciency and history of Li, to whom it gave full and unlimited use of a company car. Not
having been able to overcome the burden of demonstrating that it should be absolved of
liability for entrusting its company car to Li, said company, based on the principle of bonus
pater familias, ought to be jointly and severally liable with the former for the injuries
sustained by Ma. Lourdes Valenzuela during the accident.
VITUG, J. , concurring:
CIVIL CODE; QUASI-DELICT; LIABILITY OF A PERSON UNDER A RELATIONSHIP OF
PATRIA POTESTAS. — Pursuant to Article 2180 of the Civil Code that acknowledges
responsibility under a relationship of patria potestas, a person may be held accountable
not only for his own direct culpable act or negligence but also for those of others albeit
predicated on his own supposed failure to exercise due care in his supervisory authority
and functions. In the case of an employer, that vicarious liability attaches only when the
tortious conduct of the employee relates to, or is in the course of, his employment. The
question to ask should be whether, at the time of the damage or injury, the employee is
engaged in the affairs or concerns of the employer or, independently, in that of his own.
While an employer incurs no liability when an employee's conduct, act or omission is
beyond the range of employment, a minor deviation from the assigned task of an
employee, however, does not affect the liability of an employer.
DECISION
KAPUNAN , J : p
These two petitions for review on certiorari under Rule 45 of the Revised Rules of
Court stem from an action to recover damages by petitioner Lourdes Valenzuela in the
Regional Trial Court of Quezon City for injuries sustained by her in a vehicular accident in
the early morning of June 24, 1990. The facts found by the trial court are succinctly
summarized by the Court of Appeals below:
This is an action to recover damages based on quasi-delict, for serious
physical injuries sustained in a vehicular accident.
Plaintiff's version of the accident is as follows: At around 2:00 in the

morning of June 24, 1990, plaintiff Ma. Lourdes Valenzuela was driving a blue
Mitsubishi lancer with Plate No. FFU 542 from her restaurant at Marcos highway
to her home at Palanza Street, Araneta Avenue. She was travelling along Aurora
Blvd. with a companion, Cecilia Ramon, heading towards the direction of Manila.
Before reaching A. Lake Street, she noticed something wrong with her tires; she
stopped at a lighted place where there were people, to verify whether she had a
at tire and to solicit help if needed. Having been told by the people present that
her rear right tire was at and that she cannot reach her home in that car's
condition, she parked along the sidewalk, about 1-1/2 feet away, put on her
emergency lights, alighted from the car, and went to the rear to open the trunk.
She was standing at the left side of the rear of her car pointing to the tools to a
man who will help her x the tire when she was suddenly bumped by a 1987
Mitsubishi Lancer driven by defendant Richard Li and registered in the name of
defendant Alexander Commercial, Inc. Because of the impact plaintiff was thrown
against the windshield of the car of the defendant, which was destroyed, and then
fell to the ground. She was pulled out from under defendant's car. Plaintiff's left
leg was severed up to the middle of her thigh, with only some skin and sucle
connected to the rest of the body. She was brought to the UERM Medical
Memorial Center where she was found to have a "traumatic amputation, leg, left
up to distal thigh (above knee)." She was con ned in the hospital for twenty (20)
days and was eventually tted with an arti cial leg. The expenses for the hospital
con nement (P120,000.00) and the cost of the arti cial leg (P27,000.00) were
paid by defendants from the car insurance.
In her complaint, plaintiff prayed for moral damages in the amount of P1

million, exemplary damages in the amount of P100,000.00 and other medical and
related expenses amounting to a total of P180,000.00, including loss of expected
earnings. cdll
Defendant Richard Li denied that he was negligent. He was on his way

home, travelling at 55 kph; considering that it was raining, visibility was affected
and the road was wet. Tra c was light. He testi ed that he was driving along the
inner portion of the right lane of Aurora Blvd. towards the direction of Araneta
Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street, San
Juan, with a car coming from the opposite direction, travelling at 80 kph, with "full
bright lights." Temporarily blinded, he instinctively swerved to the right to avoid
colliding with the oncoming vehicle, and bumped plaintiff's car, which he did not
see because it was midnight blue in color, with no parking lights or early warning
device, and the area was poorly lighted. He alleged in his defense that the left rear
portion of plaintiff's car was protruding as it was then "at a standstill diagonally"
on the outer portion of the right lane towards Araneta Avenue (par. 18, Answer).
He con rmed the testimony of plaintiff's witness that after being bumped the car
of the plaintiff swerved to the right and hit another car parked on the sidewalk.
Defendants counterclaimed for damages, alleging that plaintiff was reckless or
negligent, as she was not a licensed driver.
The police investigator, Pfc. Felic Ramos, who prepared the vehicular
accident report and the sketch of the three cars involved in the accident, testi ed
that the plaintiff's car was "near the sidewalk"; this witness did not remember
whether the hazard lights of plaintiff's car were on, and did not notice if there was
an early warning device; there was a street light at the corner of Aurora Blvd. and
F. Roman, about 100 meters away. It was not mostly dark, i.e. "things can be
seen" (p. 16, tsn, Oct. 28, 1991).
A witness for the plaintiff, Rogelio Rodriguez, testi ed that after plaintiff
alighted from her car and opened the trunk compartment, defendant's car came
approaching very fast ten meters from the scene; the car was "zigzagging." The
rear left side of plaintiff's car was bumped by the front right portion of
defendant's car; as a consequence, the plaintiff's car swerved to the right and hit
the parked car on the sidewalk. Plaintiff was thrown to the windshield of
defendant's car, which was destroyed, and landed under the car. He stated that
defendant was under the in uence of liquor as he could "smell it very well" (pp.
43, 79, tsn, June 17, 1991).
After trial, the lower court sustained the plaintiff's submissions and found defendant
Richard Li guilty of gross negligence and liable for damages under Article 2176 of the Civil
Code. The trial court likewise held Alexander Commercial, Inc., Li's employer, jointly and
severally liable for damages pursuant to Article 2180. It ordered the defendants to jointly
and severally pay the following amounts:
1. P41,840.00, as actual damages, representing the miscellaneous
expenses of the plaintiff as a result of her severed left leg;
2. The sums of (a) P37,500.00, for the unrealized pro ts because of
the stoppage of plaintiff's Bistro La Conga restaurant three (3) weeks after the
accident on June 24, 1990; (b) P20,000.00, a month, as unrealized pro ts of the
plaintiff in her Bistro La Conga restaurant, from August, 1990 until the date of this
judgment; and (c) P30,000.00, a month, for unrealized pro ts in plaintiff's two (2)
beauty salons from July, 1990 until the date of this decision;
3. P1,000,000.00, in moral damages;

4. P50,000.00, as exemplary damages;
5. P60,000.00, as reasonable attorney's fees; and

6. Costs.
As a result of the trial court's decision, defendants led an Omnibus Motion for New
Trial and for Reconsideration, citing testimony in Criminal Case O.C. No. 804367 ( People
vs. Richard Li), tending to show that the point of impact, as depicted by the pieces of
glass/debris from the parties' cars, appeared to be at the center of the right lane of Aurora
Blvd. The trial court denied the motion. Defendants forthwith led an appeal with the
respondent Court of Appeals. In a Decision rendered March 30, 1994, the Court of Appeals
found that there was "ample basis from the evidence of record for the trial court's nding
that the plaintiff's car was properly parked at the right, beside the sidewalk when it was
bumped by defendant's car." 1 Dismissing the defendants' argument that the plaintiff's car
was improperly parked, almost at the center of the road, the respondent court noted that
evidence which was supposed to prove that the car was at or near center of the right lane
was never presented during the trial of the case. 2 The respondent court furthermore
observed that:
Defendant Li's testimony that he was driving at a safe speed of 55
km./hour is self serving; it was not corroborated. It was in fact contradicted by
eyewitness Rodriguez who stated that he was outside his beerhouse located at
Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of June 24, 1990
when his attention was caught by a beautiful lady (referring to the plaintiff)
alighting from her car and opening the trunk compartment; he noticed the car of
Richard Li "approaching very fast ten (10) meters away from the scene";
defendant's car was zigzagging, although there were no holes and hazards on the
street, and "bumped the leg of the plaintiff" who was thrown against the
windshield of defendant's car, causing its destruction. He came to the rescue of
the plaintiff, who was pulled out from under defendant's car and was able to say
"hurting words" to Richard Li because he noticed that the latter was under the
in uence of liquor, because he "could smell it very well" (p. 36, et. seq., tsn, June
17, 1991). He knew that plaintiff owned a beerhouse in Sta. Mesa in the 1970's,
but did not know either plaintiff or defendant Li before the accident.
In agreeing with the trial court that the defendant Li was liable for the injuries
sustained by the plaintiff, the Court of Appeals, in its decision, however, absolved the Li's
employer, Alexander Commercial, Inc. from any liability towards petitioner Lourdes
Valenzuela and reduced the amount of moral damages to P500,000.00. Finding
justi cation for exemplary damages, the respondent court allowed an award of
P50,000.00 for the same, in addition to costs, attorney's fees and the other damages. The
Court of Appeals, likewise, dismissed the defendants' counterclaims. 3
Consequently, both parties assail the respondent court's decision by ling two
separate petitions before this court. Richard Li, in G.R. No. 117944, contends that he
should not be held liable for damages because the proximate cause of the accident was
Ma. Lourdes Valenzuela's own negligence. Alternatively, he argues that in the event that
this Court nds him negligent, such negligence ought to be mitigated by the contributory
negligence of Valenzuela.
On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the
respondent court's decision insofar as it absolves Alexander Commercial, Inc. from liability
as the owner of the car driven by Richard Li and insofar as it reduces the amount of the
actual and moral damages awarded by the trial court. 4
As the issues are intimately related, both petitions are hereby consolidated.
It is plainly evident that the petition for review in G.R. No. 117944 raises no
substantial questions of law. What it, in effect, attempts to have this Court review are
factual ndings of the trial court, as sustained by the Court of Appeals nding Richard Li
grossly negligent in driving the Mitsubishi Lancer provided by his company in the early
morning hours of June 24, 1990. This we will not do. As a general rule, ndings of fact of
the Court of Appeals are binding and conclusive upon us, and this Court will not normally
disturb such factual ndings unless the ndings of fact of the said court are palpably
unsupported by the evidence on record or unless the judgment itself is based on a
misapprehension of facts. 5
In the rst place, Valenzuela's version of the incident was fully corroborated by an
uninterested witness, Rogelio Rodriguez, the owner-operator of an establishment located
just across the scene of the accident. On trial, he testi ed that he observed a car being
driven at a "very fast" speed, racing towards the general direction of Araneta Avenue. 6
Rodriguez further added that he was standing in front of his establishment, just ten to
twenty feet away from the scene of the accident, when he saw the car hit Valenzuela,
hurtling her against the windshield of the defendant's Mitsubishi Lancer, from where she
eventually fell under the defendant's car. Spontaneously reacting to the incident, he
crossed the street, noting that a man reeking with the smell of liquor had alighted from the
offending vehicle in order to survey the incident. 7 Equally important, Rodriguez declared
that he observed Valenzuela's car parked parallel and very near the sidewalk, 8 contrary to
Li's allegation that Valenzuela's car was close to the center of the right lane. We agree that
as between Li's "self-serving" asseverations and the observations of a witness who did not
even know the accident victim personally and who immediately gave a statement of the
incident similar to his testimony to the investigator immediately after the incident, the
latter's testimony deserves greater weight. As the court emphasized:
The issue is one of credibility and from Our own examination of the
transcript, We are not prepared to set aside the trial court's reliance on the
testimony of Rodriguez negating defendant's assertion that he was driving at a
safe speed. While Rodriguez drives only a motorcycle, his perception of speed is
not necessarily impaired. He was subjected to cross-examination and no attempt
was made to question his competence or the accuracy of his statement that
defendant was driving "very fast." This was the same statement he gave to the
police investigator after the incident, as told to a newspaper report (Exh. "P"). We
see no compelling basis for disregarding his testimony.
The alleged inconsistencies in Rodriguez' testimony are not borne out by

an examination of the testimony. Rodriguez testi ed that the scene of the
accident was across the street where his beerhouse is located about ten to twenty
feet away (pp. 35–36, tsn, June 17, 1991). He did not state that the accident
transpired immediately in front of his establishment. The ownership of the
Lambingan sa Kambingan is not material; the business is registered in the name
of his mother, but he explained that he owns the establishment (p. 5, tsn, June 20,
1991). Moreover, the testimony that the streetlights on his side of Aurora
Boulevard were on the night the accident transpired (p. 8) is not necessarily
contradictory to the testimony of Pfc. Ramos that there was a streetlight at the
corner of Aurora Boulevard and F. Roman Street (p. 45, tsn, Oct. 20, 1991).
With respect to the weather condition, Rodriguez testi ed that there was
only a drizzle, not a heavy rain and the rain has stopped and he was outside his
establishment at the time the accident transpired (pp. 64–65, tsn, June 17, 1991).
This was consistent with plaintiff's testimony that it was no longer raining when
she left Bistro La Conga (pp. 10–11, tsn, April 29, 1991). It was defendant Li who
stated that it was raining all the way in an attempt to explain why he was
travelling at only 50-55 kph. (p. 11, tsn, Oct. 14, 1991). As to the testimony of Pfc.
Ramos that it was raining, he arrived at the scene only in response to a telephone
call after the accident had transpired (pp. 9–10, tsn, Oct. 28, 1991). We nd no
substantial inconsistencies in Rodriguez's testimony that would impair the
essential integrity of his testimony or re ect on his honesty. We are compelled to
affirm the trial court's acceptance of the testimony of said eyewitness.
Against the unassailable testimony of witness Rodriguez we note that Li's testimony
was peppered with so many inconsistencies leading us to conclude that his version of the
accident was merely adroitly crafted to provide a version, obviously self-serving, which
would exculpate him from any and all liability in the incident. Against Valenzuela's
corroborated claims, his allegations were neither backed up by other witnesses nor by the
circumstances proven in the course of trial. He claimed that he was driving merely at a
speed of 55 kph. when "out of nowhere he saw a dark maroon lancer right in front of him,
which was (the) plaintiff's car." He alleged that upon seeing this sudden "apparition" he put
on his brakes to no avail as the road was slippery. 9
One will have to suspend disbelief in order to give credence to Li's disingenuous and
patently self-serving asseverations. The average motorist alert to road conditions will have
no di culty applying the brakes to a car traveling at the speed claimed by Li. Given a light
rainfall, the visibility of the street, and the road conditions on a principal metropolitan
thoroughfare like Aurora Boulevard, Li would have had ample time to react to the changing
conditions of the road if he were alert — as every driver should be — to those conditions.
Driving exacts a more than usual toll on the senses. Physiological " ght or ight" 10
mechanisms are at work, provided such mechanisms were not dulled by drugs, alcohol,
exhaustion, drowsiness, etc. 1 1 Li's failure to react in a manner which would have avoided
the accident could therefore have been only due to either or both of the two factors: 1) that
he was driving at a "very fast" speed as testi ed by Rodriguez; and 2) that he was under the
in uence of alcohol. 1 2 Either factor working independently would have diminished his
responsiveness to road conditions, since normally he would have slowed down prior to
reaching Valenzuela's car, rather than be in a situation forcing him to suddenly apply his
brakes. As the trial court noted (quoted with approval by respondent court):
Secondly, as narrated by defendant Richard Li to the San Juan Police
immediately after the incident, he said that while driving along Aurora Blvd., out of
nowhere he saw a dark maroon lancer right in front of him, which was plaintiff's
car, indicating, again, thereby that, indeed, he was driving very fast, oblivious of
his surroundings and the road ahead of him, because if he was not, then he could
not have missed noticing at a still far distance the parked car of the plaintiff at
the right side near the sidewalk which had its emergency lights on, thereby
avoiding forcefully bumping at the plaintiff who was then standing at the left rear
edge of her car.
Since, according to him, in his narration to the San Juan Police, he put on
his brakes when he saw the plaintiff's car in front of him, but that it failed as the
road was wet and slippery, this goes to show again, that, contrary to his claim, he
was, indeed, running very fast. For, were it otherwise, he could have easily
completely stopped his car, thereby avoiding the bumping of the plaintiff,
notwithstanding that the road was wet and slippery. Verily, since, if, indeed, he
was running slow, as he claimed, at only about 55 kilometers per hour, then,
inspite of the wet and slippery road, he could have avoided hitting the plaintiff by
the mere expedient or applying his brakes at the proper time and distance.
It could not be true, therefore, as he now claims during his testimony, which
is contrary to what he told the police immediately after the accident and is,
therefore, more believable, that he did not actually step on his brakes, but simply
swerved a little to the right when he saw the on-coming car with glaring
headlights, from the opposite direction, in order to avoid it.
For, had this been what he did, he would not have bumped the car of the
plaintiff which was properly parked at the right beside the sidewalk. And, it was
not even necessary for him to swerve a little to the right in order to safely avoid a
collision with the on-coming car, considering that Aurora Blvd. is a double lane
avenue separated at the center by a dotted white paint, and there is plenty of
space for both cars, since her car was running at the right lane going towards
Manila and the on-coming car was also on its right lane going to Cubao." 1 3
Having come to the conclusion that Li was negligent in driving his company-issued
Mitsubishi Lancer, the next question for us to determine is whether or not Valenzuela was
likewise guilty of contributory negligence in parking her car alongside Aurora Boulevard,
which entire area Li points out, is a no parking zone.
We agree with the respondent court that Valenzuela was not guilty of contributory
negligence.
Contributory negligence is conduct on the part of the injured party, contributing as a
legal cause to the harm he has suffered, which falls below the standard to which he is
required to conform for his own protection. 1 4 Based on the foregoing de nition, the
standard or act to which, according to petitioner Li, Valenzuela ought to have conformed
for her own protection was not to park at all at any point of Aurora Boulevard, a no parking
zone. We cannot agree.
Courts have traditionally been compelled to recognize that an actor who is
confronted with an emergency is not to be held up to the standard of conduct normally
applied to an individual who is in no such situation. The law takes stock of impulses of
humanity when placed in threatening or dangerous situations and does not require the
same standard of thoughtful and re ective care from persons confronted by unusual and
oftentimes threatening conditions. 1 5 Under the "emergency rule" adopted by this court in
Gan vs. Court of Appeals, 1 6 an individual who suddenly nds himself in a situation of
danger and is required to act without much time to consider the best means that may be
adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake
what subsequently and upon re ection may appear to be a better solution, unless the
emergency was brought by his own negligence. 1 7
Applying this principle to a case in which the victims in a vehicular accident swerved
to the wrong lane to avoid hitting two children suddenly darting into the street, we held, in
Mc Kee vs. Intermediate Appellate Court, 1 8 that the driver therein, Jose Koh, "adopted the
best means possible in the given situation" to avoid hitting the children. Using the
"emergency rule" the court concluded that Koh, in spite of the fact that he was in the wrong
lane when the collision with an oncoming truck occurred, was not guilty of negligence. 1 9
While the emergency rule applies to those cases in which re ective thought, or the
opportunity to adequately weigh a threatening situation is absent, the conduct which is
required of an individual in such cases is dictated not exclusively by the suddenness of the
event which absolutely negates thoughtful care, but by the over-all nature of the
circumstances. A woman driving a vehicle suddenly crippled by a at tire on a rainy night
will not be faulted for stopping at a point which is both convenient for her to do so and
which is not a hazard to other motorists. She is not expected to run the entire boulevard in
search for a parking zone or turn on a dark street or alley where she would likely nd no
one to help her. It would be hazardous for her not to stop and assess the emergency
(simply because the entire length of Aurora Boulevard is a no-parking zone) because the
hobbling vehicle would be both a threat to her safety and to other motorists. In the instant
case, Valenzuela, upon reaching that portion of Aurora Boulevard close to A. Lake St.,
noticed that she had a at tire. To avoid putting herself and other motorists in danger, she
did what was best under the situation. As narrated by respondent court: "She stopped at a
lighted place where there are people, to verify whether she had a at tire and to solicit help
if needed. Having been told by the people present that her rear right tire was at and that
she cannot reach her home she parked along the sidewalk, about 1 1/2 feet away, behind a
Toyota Corona Car." 2 0 In fact, respondent court noted, Pfc. Felix Ramos, the investigator
on the scene of the accident con rmed that Valenzuela's car was parked very close to the
sidewalk. 2 1 The sketch which he prepared after the incident showed Valenzuela's car
partly straddling the sidewalk, clear and at a convenient distance from motorists passing
the right lane of Aurora Boulevard. This fact was itself corroborated by the testimony of
witness Rodriguez. 2 2
Under the circumstances described, Valenzuela did exercise the standard
reasonably dictated by the emergency and could not be considered to have contributed to
the unfortunate circumstances which eventually led to the amputation of one of her lower
extremities. The emergency which led her to park her car on a sidewalk in Aurora
Boulevard was not of her own making, and it was evident that she had taken all reasonable
precautions. RBR

Obviously in the case at bench, the only negligence ascribable was the negligence of
Li on the night of the accident. "Negligence, as it is commonly understood is conduct which
creates an undue risk of harm to others." 2 3 It is the failure to observe that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury. 2 4 We stressed, in Corliss vs. Manila Railroad Company, 2 5 that
negligence is the want of care required by the circumstances.
The circumstances established by the evidence adduced in the court below plainly
demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer. It bears
emphasis that he was driving at a fast speed at about 2:00 A.M. after a heavy downpour
had settled into a drizzle rendering the street slippery. There is ample testimonial evidence
on record to show that he was under the in uence of liquor. Under these conditions, his
chances of effectively dealing with changing conditions on the road were signi cantly
lessened. As Prosser and Keaton emphasize:
[U]nder present day tra c conditions, any driver of an automobile must be
prepared for the sudden appearance of obstacles and persons on the highway,
and of other vehicles at intersections, such as one who sees a child on the curb
may be required to anticipate its sudden dash into the street, and his failure to act
properly when they appear may be found to amount to negligence. 2 6
Li's obvious unpreparedness to cope with the situation confronting him on the night
of the accident was clearly of his own making.
We now come to the question of the liability of Alexander Commercial, Inc., Li's
employer. In denying liability on the part of Alexander Commercial, the respondent court
held that:
There is no evidence, not even defendant Li's testimony, that the visit was
in connection with o cial matters. His functions as assistant manager
sometimes required him to perform work outside the o ce as he has to visit
buyers and company clients, but he admitted that on the night of the accident he
came from BF Homes Parañaque he did not have 'business from the company'
(pp. 25–26, tsn, Sept. 23, 1991). The use of the company car was partly required
by the nature of his work, but the privilege of using it for non-o cial business is a
'benefit,' apparently referring to the fringe benefits attaching to his position.
Under the civil law, an employer is liable for the negligence of his
employees in the discharge of their respective duties, the basis of which liability is
not respondeat superior, but the relationship of pater familias, which theory bases
the liability of the master ultimately on his own negligence and not on that of his
servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer may
be held liable for the negligence of his employee, the act or omission which
caused damage must have occurred while an employee was in the actual
performance of his assigned tasks or duties (St. Francis High School vs. Court of
Appeals, 194 SCRA 341). In de ning an employer's liability for the acts done
within the scope of the employee's assigned tasks, the Supreme Court has held
that this includes any act done by an employee, in furtherance of the interests of
the employer or for the account of the employer at the time of the in iction of the
injury or damage (Filamer Christian Institute vs. Intermediate Appellate Court, 212
SCRA 637). An employer is expected to impose upon its employees the necessary
discipline called for in the performance of any act 'indispensable to the business
and beneficial to their employer' (at p. 645).
In light of the foregoing, We are unable to sustain the trial court's nding
that since defendant Li was authorized by the company to use the company car
'either o cially or socially or even bring it home,' he can be considered as using
the company car in the service of his employer or on the occasion of his
functions. Driving the company car was not among his functions as assistant
manager; using it for non-o cial purposes would appear to be a fringe bene t,
one of the perks attached to his position. But to impose liability upon the
employer under Article 2180 of the Civil Code, earlier quoted, there must be a
showing that the damage was caused by their employees in the service of the
employer or on the occasion of their functions. There is no evidence that Richard
Li was at the time of the accident performing any act in furtherance of the
company's business or its interests, or at least for its bene t. The imposition of
solidary liability against defendant Alexander Commercial Corporation must
therefore fail. 2 7
We agree with the respondent court that the relationship in question is not based on
the principle of respondeat superior, which holds the master liable for acts of the servant,
but that of pater familias, in which the liability ultimately falls upon the employer, for his
failure to exercise the diligence of a good father of the family in the selection and
supervision of his employees. It is up to this point, however, that our agreement with the
respondent court ends. Utilizing the bonus pater familias standard expressed in Article
2180 of the Civil Code, 2 8 we are of the opinion that Li's employer, Alexander Commercial,
Inc. is jointly and solidarily liable for the damage caused by the accident of June 24, 1990.
First, the case of St. Francis High School vs. Court of Appeals 2 9 upon which
respondent court has placed undue reliance, dealt with the subject of a school and its
teacher's supervision of students during an extracurricular activity. These cases now fall
under the provision on special parental authority found in Art. 218 of the Family Code
which generally encompasses all authorized school activities, whether inside or outside
school premises.
Second, the employer's primary liability under the concept of pater familias
embodied by Art. 2180 (in relation to Art. 2176) of the Civil Code is quasi-delictual or
tortious in character. His liability is relieved on a showing that he exercised the diligence of
a good father of the family in the selection and supervision of its employees. Once
evidence is introduced showing that the employer exercised the required amount of care in
selecting its employees, half of the employer's burden is overcome. The question of
diligent supervision, however, depends on the circumstances of employment.
Ordinarily, evidence demonstrating that the employer has exercised diligent
supervision of its employee during the performance of the latter's assigned tasks would
be enough to relieve him of the liability imposed by Article 2180 in relation to Article 2176
of the Civil Code. The employer is not expected to exercise supervision over either the
employee's private activities or during the performance of tasks either unsanctioned by
the former or unrelated to the employee's tasks. The case at bench presents a situation of
a different character, involving a practice utilized by large companies with either their
employees of managerial rank or their representatives. Llibris
It is customary for large companies to provide certain classes of their employees

with courtesy vehicles. These company cars are either wholly owned and maintained by the
company itself or are subject to various plans through which employees eventually acquire
their vehicles after a given period of service, or after paying a token amount. Many
companies provide liberal "car plans" to enable their managerial or other employees of
rank to purchase cars, which, given the cost of vehicles these days, they would not
otherwise be able to purchase on their own.
Under the rst example, the company actually owns and maintains the car up to the
point of turnover of ownership to the employee; in the second example, the car is really
owned and maintained by the employee himself. In furnishing vehicles to such employees,
are companies totally absolved of responsibility when an accident involving a company-
issued car occurs during private use after normal office hours?
Most pharmaceutical companies, for instance, which provide cars under the rst
plan, require rigorous tests of road worthiness from their agents prior to turning over the
car (subject of company maintenance) to their representatives. In other words, like a good
father of a family, they entrust the company vehicle only after they are satis ed that the
employee to whom the car has been given full use of the said company car for company or
private purposes will not be a threat or menace to himself, the company or to others. When
a company gives full use and enjoyment of a company car to its employee, it in effect
guarantees that it is, like every good father, satisfied that its employee will use the privilege
reasonably and responsively.
In the ordinary course of business, not all company employees are given the
privilege of using a company-issued car. For large companies other than those cited in the
example of the preceding paragraph, the privilege serves important business purposes
either related to the image of success an entity intends to present to its clients and to the
public in general, or — for practical and utilitarian reasons — to enable its managerial and
other employees of rank or its sales agents to reach clients conveniently. In most cases,
providing a company car serves both purposes. Since important business transactions
and decisions may occur at all hours in all sorts of situations and under all kinds of guises,
the provision for the unlimited use of a company car therefore principally serves the
business and goodwill of a company and only incidentally the private purposes of the
individual who actually uses the car, the managerial employee or company sales agent. As
such, in providing for a company car for business use and/or for the purpose of furthering
the company's image, a company owes a responsibility to the public to see to it that the
managerial or other employees to whom it entrusts virtually unlimited use of a company
issued car are able to use the company issue capably and responsibly.
In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his
testimony before the trial court, he admitted that his functions as Assistant Manager did
not require him to scrupulously keep normal o ce hours as he was required quite often to
perform work outside the o ce, visiting prospective buyers and contacting and meeting
with company clients. 3 0 These meetings, clearly, were not strictly con ned to routine
hours because, as a managerial employee tasked with the job of representing his company
with its clients, meetings with clients were both social as well as work-related functions.
The service car assigned to Li by Alexander Commercial, Inc. therefore enabled both Li —
as well as the corporation — to put up the front of a highly successful entity, increasing the
latter's goodwill before its clientele. It also facilitated meeting between Li and its clients by
providing the former with a convenient mode of travel.
Moreover, Li's claim that he happened to be on the road on the night of the accident
because he was coming from a social visit with an o cemate in Parañaque was a bare
allegation which was never corroborated in the court below. It was obviously self-serving.
Assuming he really came from his o cemate's place, the same could give rise to
speculation that he and his o cemate had just been from a work-related function, or they
were together to discuss sales and other work related strategies.
In ne, Alexander Commercial, Inc. has not demonstrated, to our satisfaction that it
exercised the care and diligence of a good father of the family in entrusting its company
car to Li. No allegations were made as to whether or not the company took the steps
necessary to determine or ascertain the driving pro ciency and history of Li, to whom it
gave full and unlimited use of a company car. 3 1 Not having been able to overcome the
burden of demonstrating that it should be absolved of liability for entrusting its company
car to Li, said company, based on the principle of bonus pater familias, ought to be jointly
and severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela
during the accident.
Finally, we nd no reason to overturn the amount of damages awarded by the
respondent court, except as to the amount of moral damages. In the case of moral
damages, while the said damages are not intended to enrich the plaintiff at the expense of
a defendant, the award should nonetheless be commensurate to the suffering in icted. In
the instant case we are of the opinion that the reduction in moral damages from an
amount of P1,000,000.00 to P500,000.00 by the Court of Appeals was not justi ed
considering the nature of the resulting damage and the predictable sequelae of the injury.
As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic
amputation of her left lower extremity at the distal left thigh just above the knee. Because
of this, Valenzuela will forever be deprived of the full ambulatory functions of her left
extremity, even with the use of state of the art prosthetic technology. Well beyond the
period of hospitalization (which was paid for by Li), she will be required to undergo
adjustments in her prosthetic devise due to the shrinkage of the stump from the process
of healing.
These adjustments entail costs, prosthetic replacements and months of physical
and occupational rehabilitation and therapy. During her lifetime, the prosthetic devise will
have to be replaced and re-adjusted to changes in the size of her lower limb effected by
the biological changes of middle-age, menopause and aging. Assuming she reaches
menopause, for example, the prosthetic will have to be adjusted to respond to the changes
in bone resulting from a precipitate decrease in calcium levels observed in the bones of all
post-menopausal women. In other words, the damage done to her would not only be
permanent and lasting, it would also be permanently changing and adjusting to the
physiologic changes which her body would normally undergo through the years. The
replacements, changes, and adjustments will require corresponding adjustive physical and
occupational therapy. All of these adjustments, it has been documented, are painful.
The foregoing discussion does not even scratch the surface of the nature of the
resulting damage because it would be highly speculative to estimate the amount of
psychological pain, damage and injury which goes with the sudden severing of a vital
portion of the human body. A prosthetic device, however technologically advanced, will
only allow a reasonable amount of functional restoration of the motor functions of the
lower limb. The sensory functions are forever lost. The resultant anxiety, sleeplessness,
psychological injury, mental and physical pain are inestimable.
As the amount of moral damages are subject to this Court's discretion, we are of the
opinion that the amount of P1,000,000.00 granted by the trial court is in greater accord
with the extent and nature of the injury — physical and psychological — suffered by
Valenzuela as a result of Li's grossly negligent driving of his Mitsubishi Lancer in the early
morning hours of the accident.
WHEREFORE, PREMISES CONSIDERED, the decision of the court of Appeals is
modified with the effect of REINSTATING the judgment of the Regional Trial Court.
SO ORDERED.
Padilla, Bellosillo, and Hermosisima, Jr., JJ., concur.
Separate Opinions
VITUG , J., concurring :
Pursuant to Article 2180 1 of the Civil Code that acknowledges responsibility under
a relationship of patria potestas, a person may be held accountable not only for his own
direct culpable act or negligence but also for those of others albeit predicated on his own
supposed failure to exercise due care in his supervisory authority and functions. In the
case of an employer, that vicarious liability attaches only when the tortious conduct of the
employee relates to, or is in the course of, his employment. The question to ask should be
whether, at the time of the damage or injury, the employee is engaged in the affairs or
concerns of the employer or, independently, in that of his own. While an employer incurs no
liability when an employee's conduct, act or omission is beyond the range of employment,
2 a minor deviation from the assigned task of an employee, however, does not affect the
liability of an employer. 3
Footnotes
1. Rollo, p. 31.
2. Id.
3. Rollo, pp. 45–47.
4. Rollo, pp. 5–22.
5. De la Serna vs. Court of Appeals, 233 SCRA 325.
6. Rollo, p. 37.
7. Rollo, pp. 31–33.
8. Rollo, p. 31.
9. Rollo, pp. 33–34.
10. The body releases catecholamines in response to "alerting" or threatening conditions
(called "fight or flight" conditions by physiologists) rendering the individual, through his
reflexes, senses and other alerting mechanisms responsive to these conditions. Alcohol,
drugs, illness, exhaustion and drowsiness dull these normal bodily responses. BEST AND
TAYLOR, PHYSIOLOGICAL BASIS OF MEDICAL PRACTICE, 81 (1993).
11. Id.
12. There is no allegation on record that the blood alcohol levels of petitioner Li were taken
by the police. As this was a lapse on the part of the investigators, not petitioner
Valenzuela, Rodriguez's testimony as to the fact that Li was smelling of alcohol should
have been given greater weight by the courts below.
13. Rollo, pp. 33–34.
14 KEETON AND DOBBS, ET AL., PROSSER AND KEATON ON TORTS, 451, (1984) citing
SECOND RESTATEMENT OF TORTS, Sec. 463.
15. Elmore v. Des Moines City Railway Co., 224 N.W. 28 (1929).
16 165 SCRA 378 (1988) cf. Siegl vs. Watson, 195 NW 867.
17. Id.
18. 211 SCRA 517 (1992).
19. Id., at 540.
20. Rollo, p. 37.
21. Rollo, p. 31.
22. Id.
23. KEATON, supra, note 14.
24. McKee, supra, note 17, at 539, citing 3 COOLEY ON TORTS, 265 (Fourth Ed.)
25. 27 SCRA 674 (1969).
26. KEATON, supra, note 14, at 197, citing Stanek v. Sweizerk, 201 Neb., 357 (1981); Lutz v.
Shelby Mutual Insurance Co., 70 Wis 2d 743 (1975); Potts v. Krey, 362 S.W. 2d 726
(1975); Ennis v. Dupree 128 S.E. 2d 231 (1962).
27. Rollo, pp. 36–37.

28. The provision reads:
Art. 2180. The obligation 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.
The father and, in case of his death or incapacity, the mother , are responsible for the
damages caused by the minor children who live in their company.
Guardians are liable for damages caused by minors or incapacitated persons who are
under their authority and live in their company.
The owners and managers of an establishment or enterprises in the service of the

branches in which the latter are employed or on the occasion of their functions.
Employers are liable for the damages caused by their employees and house helpers
acting within the scope of their assigned tasks, even though the former are not engaged
in business or industry.
The State is responsible in like manner when it acts through a special agent; but not
when the damage has been caused by the official to whom the task properly pertains, in
which case what is provided by Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, as long as they remain in
their custody.
The responsibility treated in this article shall cease when the persons herein mentioned
proved that they observed all the diligence of a good father of a family to prevent
damage.
29. 194 SCRA 241 (1991).
30. Rollo, p. 36.

31. Rollo, p. 35.
VITUG, J., concurring:
1. "Art. 2180. The obligation 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.
"(1) The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the minor children who live in their company.
"(2) Guardians are liable for damages caused by the minors or incapacitated persons
who are under their authority and live in their company.
"(3) The owners and managers of an establishment or enterprise are likewise responsible
for damages caused by their employees in the service of the branches in which the latter
are employed or on the occasion of their functions.
"(4) Employers shall be liable for the damage caused by their employees and household
helps acting within the scope of their assigned task, even though the former are not
engaged in any business or industry.
"(5) The State is responsible in like manner when it acts through a special agent; but not
when the damage has been caused by the official to whom the task done properly
pertains, in which case what is provided in Article 2176 shall be applicable.
"(6) Lastly, teachers or heads of establishments of arts and trades shall be liable for
damages caused by their pupils and students or apprentices, so long as they remain in
their custody.
"The responsibility treated of in this article shall be when the persons herein mentioned
prove that they observed all the diligence of a good father of a family to prevent
damage. "(Emphasis supplied.)
2. See Marquez vs. Castillo, 68 Phil. 568.
3. See De Leon Brokerage Co., Inc. vs. Court of Appeals, et al., (4 SCRA 517); see also J.C.S.
Sangco, Philippine Law on Torts and Damages, Vol. II, 1994 Revised ed., pp. 572–573.

SECOND DIVISION
[G.R. No. 191937. August 9, 2017.]
ORIENT FREIGHT INTERNATIONAL, INC. , petitioner, vs . KEIHIN-

EVERETT FORWARDING COMPANY, INC. , respondent.
DECISION
LEONEN , J : p
Article 2176 of the Civil Code does not apply when the party's negligence occurs
in the performance of an obligation. The negligent act would give rise to a quasi-delict
only when it may be the basis for an independent action were the parties not otherwise
bound by a contract.
This resolves a Petition for Review 1 on Certiorari under Rule 45 of the Rules of
Court, assailing the January 21, 2010 Decision 2 and April 21, 2010 Resolution 3 of the
Court of Appeals, which a rmed the Regional Trial Court February 27, 2008 Decision. 4
The Regional Trial Court found that petitioner Orient Freight International, Inc.'s (Orient
Freight) negligence caused the cancellation of Keihin-Everett Forwarding Company,
Inc.'s (Keihin-Everett) contract with Matsushita Communication Industrial Corporation
of the Philippines (Matsushita). 5
On October 16, 2001, Keihin-Everett entered into a Trucking Service Agreement
with Matsushita. Under the Trucking Service Agreement, Keihin-Everett would provide
services for Matsushita's trucking requirements. These services were subcontracted by
Keihin-Everett to Orient Freight, through their own Trucking Service Agreement
executed on the same day. 6
When the Trucking Service Agreement between Keihin-Everett and Matsushita
expired on December 31, 2001, Keihin-Everett executed an In-House Brokerage Service
Agreement for Matsushita's Philippine Economic Zone Authority export operations.
Keihin-Everett continued to retain the services of Orient Freight, which sub-contracted
its work to Schmitz Transport and Brokerage Corporation. 7
In April 2002, Matsushita called Keihin-Everett's Sales Manager, Salud Rizada,
about a column in the April 19, 2002 issue of the tabloid newspaper Tempo. This news
narrated the April 17, 2002 interception by Caloocan City police of a stolen truck lled
with shipment of video monitors and CCTV systems owned by Matsushita. 8
When contacted by Keihin-Everett about this news, Orient Freight stated that the
tabloid report had blown the incident out of proportion. They claimed that the incident
simply involved the breakdown and towing of the truck, which was driven by Ricky
Cudas (Cudas), with truck helper, Rubelito Aquino 9 (Aquino). The truck was promptly
released and did not miss the closing time of the vessel intended for the shipment. 1 0
Keihin-Everett directed Orient Freight to investigate the matter. During its April
20, 2002 meeting with Keihin-Everett and Matsushita, as well as in its April 22, 2002
letter addressed to Matsushita, Orient Freight reiterated that the truck merely broke
down and had to be towed. 1 1 AaCTcI

However, when the shipment arrived in Yokohama, Japan on May 8, 2002, it was
discovered that 10 pallets of the shipment's 218 cartons, worth US$34,226.14, were
missing. 1 2
Keihin-Everett independently investigated the incident. During its investigation, it
obtained a police report from the Caloocan City Police Station. The report stated,
among others, that at around 2:00 p.m. on April 17, 2002, somewhere in Plaza Dilao,
Paco Street, Manila, Cudas told Aquino to report engine trouble to Orient Freight. After
Aquino made the phone call, he informed Orient Freight that the truck had gone
missing. When the truck was intercepted by the police along C3 Road near the corner of
Dagat-Dagatan Avenue in Caloocan City, Cudas escaped and became the subject of a
manhunt. 1 3
When confronted with Keihin-Everett's ndings, Orient Freight wrote back on May
15, 2002 to admit that its previous report was erroneous and that pilferage was
apparently proven. 1 4
In its June 6, 2002 letter, Matsushita terminated its In-House Brokerage Service
Agreement with Keihin-Everett, effective July 1, 2002. Matsushita cited loss of
con dence for terminating the contract, stating that Keihin-Everett's way of handling
the April 17, 2002 incident and its nondisclosure of this incident's relevant facts
"amounted to fraud and signified an utter disregard of the rule of law." 1 5
Keihin-Everett, by counsel, sent a letter dated September 16, 2002 to Orient
Freight, demanding P2,500,000.00 as indemnity for lost income. It argued that Orient
Freight's mishandling of the situation caused the termination of Keihin-Everett's
contract with Matsushita. 1 6
When Orient Freight refused to pay, Keihin-Everett led a complaint dated
October 24, 2002 for damages with Branch 10, Regional Trial Court, Manila. The case
was docketed as Civil Case No. 02-105018. 1 7 In its complaint, Keihin-Everett alleged
that Orient Freight's "misrepresentation, malice, negligence and fraud" caused the
termination of its In-House Brokerage Service Agreement with Matsushita. Keihin-
Everett prayed for compensation for lost income, with legal interest, exemplary
damages, attorney's fees, litigation expenses, and the costs of the suit. 1 8
In its December 20, 2002 Answer, Orient Freight claimed, among others, that its
initial ruling of pilferage was in good faith as manifested by the information from its
employees and the good condition and the timely shipment of the cargo. It also alleged
that the contractual termination was a prerogative of Matsushita. Further, by its own
Audited Financial Statements on le with the Securities and Exchange Commission,
Keihin-Everett derived income substantially less than what it sued for. Along with the
dismissal of the complaint, Orient Freight also asserted counterclaims for
compensatory and exemplary damages, attorney's fees, litigation expenses, and the
costs of the suit. 1 9
The Regional Trial Court rendered its February 27, 2008 Decision, 2 0 in favor of
Keihin-Everett. It found that Orient Freight was "negligent in failing to investigate
properly the incident and make a factual report to Keihin[-Everett] an Matsushita,"
despite having enough time to properly investigate the incident. 2 1
The trial court also ruled that Orient Freight's failure to exercise due diligence in
disclosing the true facts of the incident to Keihin-Everett and Matsushita caused Keihin-
Everett to suffer income losses due to Matsushita's cancellation of their contract. 2 2
The trial court ordered Orient Freight "to pay [Keihin-Everett] the amount of
[P]1,666,667.00 as actual damages representing net pro t loss incurred" and
P50,000.00 in attorney's fees. 2 3 However, it denied respondent's prayer for exemplary
damages, finding that petitioner did not act with gross negligence. 2 4
Orient Freight appealed the Regional Trial Court Decision to the Court of Appeals.
On January 21, 2010, the Court of Appeals issued its Decision 2 5 a rming the trial
court's decision. It ruled that Orient Freight "not only had knowledge of the foiled
hijacking of the truck carrying the . . . shipment but, more importantly, withheld [this]
information from [Keihin-Everett]." 2 6
The Court of Appeals ruled that the oral and documentary evidence has
established both the damage suffered by Keihin-Everett and Orient Freight's fault or
negligence. Orient Freight was negligent in not reporting and not thoroughly
investigating the April 17, 2002 incident despite Keihin-Everett's instruction to do so. 2 7
It further ruled that while Keihin-Everett sought to establish its claim for lost income of
P2,500,000.00 by submitting its January 2002 to June 2002 net income statement, 2 8
this was refuted by Orient Freight by presenting Keihin-Everett's own audited nancial
statements. The Court of Appeals held that the trial court correctly arrived at the
amount of P1,666,667.00 as the award of lost income. 2 9
The Court of Appeals denied Orient Freight's Motion for Reconsideration in its
April 21, 2010 Resolution. 3 0
On June 9, 2010, Orient Freight led this Petition for Review on Certiorari under
Rule 45 with this Court, arguing that the Court of Appeals incorrectly found it negligent
under Article 2176 of the Civil Code. 3 1 As there was a subsisting Trucking Service
Agreement between Orient Freight itself and Keihin-Everett, petitioner avers that there
was a pre-existing contractual relation between them, which would preclude the
application of the laws on quasi-delicts. 3 2
Applying the test in Far East Bank and Trust Company v. Court of Appeals , 3 3
petitioner claims that its failure to inform respondent Keihin-Everett about the hijacking
incident could not give rise to a quasi-delict since the Trucking Service Agreement
between the parties did not include this obligation. It argues that there being no
obligation under the Trucking Service Agreement to inform Keihin-Everett of the
hijacking incident, its report to Keihin-Everett was done in good faith and did not
constitute negligence. Its representations regarding the hijacking incident were a sound
business judgment and not a negligent act. 3 4 Finally, it claims that the Court of Appeals
incorrectly upheld the award of damages, as the trial court had based its computation
on, among others, Keihin-Everett's profit and loss statement. 3 5 EcTCAD
On August 2, 2010, Keihin-Everett led its Comment, 3 6 arguing that the petition
does not contain the names of the parties in violation of Rule 45, Section 4 of the Rules
of Court. It contends that the issues and the arguments raised in this petition are the
same issues it raised in the Regional Trial Court and the Court of Appeals. 3 7 It claims
that the ndings of fact and law of the Court of Appeals are in accord with this Court's
decisions. 3 8
On October 7, 2010, Orient Freight led its Reply. 3 9 It notes that a cursory
reading of the petition would readily show the parties to the case. It claims that what is
being contested and appealed is the application of the law on negligence by lower
courts and, while the ndings of fact by the lower courts are entitled to great weight,
the exceptions granted by jurisprudence apply to this case. It reiterates that the pre-
existing contractual relation between the parties should bar the application of the
principles of quasi-delict. Because of this, the terms and conditions of the contract
between the parties must be applied. It also claimed that the Regional Trial Court's
computation of the award included gures from respondent's Pro t and Loss
Statement, which the trial court had allegedly rejected. It rendered the computation
unreliable. 4 0
This Court issued a Resolution 4 1 dated February 16, 2011, requiring petitioner to
submit a certified true copy of the Regional Trial Court February 27, 2008 Decision.
On March 31, 2011, petitioner led its Compliance, 4 2 submitting a certi ed true
copy of the Regional Trial Court Decision.
The issues for this Court's resolution are:
First, whether the failure to state the names of the parties in this Petition for
Review, in accordance with Rule 45, Section 4 of the Rules of Court, is a fatal defect;
Second, whether the Court of Appeals, considering the existing contracts in this
case, erred in applying Article 2176 of the Civil Code;
Third, whether Orient Freight, Inc. was negligent for failing to disclose the facts
surrounding the hijacking incident on April 17, 2002, which led to the termination of the
Trucking Service Agreement between Keihin-Everett Forwarding Co., Inc. and
Matsushita Communication Industrial Corporation of the Philippines; and
Finally, whether the trial court erred in the computation of the awarded actual and
pecuniary loss by basing it on, among others, the Pro t and Loss Statement submitted
by Keihin-Everett Forwarding Co., Inc.
The petition is denied.
I
The petition does not violate Rule 45, Section 4 of the Rules of Court 4 3 for failing
to state the names of the parties in the body. The names of the parties are readily
discernable from the caption of the petition, clearly showing the appealing party as the
petitioner and the adverse party as the respondent.
The Court of Appeals had also been erroneously impleaded in the petition.
However, this Court in Aguilar v. Court of Appeals, et al ., 4 4 ruled that inappropriately
impleading the lower court as respondent does not automatically mean the dismissal
of the appeal. This is a mere formal defect. 4 5
II
Negligence may either result in culpa aquiliana or culpa contractual. 4 6 Culpa

aquiliana is the "the wrongful or negligent act or omission which creates a vinculum
juris and gives rise to an obligation between two persons not formally bound by any
other obligation," 4 7 and is governed by Article 2176 of the Civil Code:
Article 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.
Negligence in culpa contractual, on the other hand, is "the fault or negligence
incident in the performance of an obligation which already existed, and which increases
the liability from such already existing obligation." 4 8 This is governed by Articles 1170
to 1174 of the Civil Code: 4 9
Article 1170. Those who in the performance of their obligations are
guilty of fraud, negligence, or delay, and those who in any manner contravene
the tenor thereof, are liable for damages.
Article 1171. Responsibility arising from fraud is demandable in all
obligations. Any waiver of an action for future fraud is void.
Article 1172. Responsibility arising from negligence in the
performance of every kind of obligation is also demandable, but such liability
may be regulated by the courts, according to the circumstances.
Article 1173. The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the place.
When negligence shows bad faith, the provisions of articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed
in the performance, that which is expected of a good father of a family shall be
required. HSAcaE
Article 1174. Except in cases expressly speci ed by the law, or when

it is otherwise declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for those events
which could not be foreseen, or which, though foreseen, were inevitable.
Actions based on contractual negligence and actions based on quasi-delicts
differ in terms of conditions, defenses, and proof. They generally cannot co-exist. 5 0
Once a breach of contract is proved, the defendant is presumed negligent and must
prove not being at fault. In a quasi-delict, however, the complaining party has the burden
of proving the other party's negligence. 5 1 In Huang v. Phil. Hoteliers, Inc.: 5 2
[T]his Court nds it signi cant to take note of the following differences between
quasi-delict (culpa aquilina) and breach of contract (culpa contractual) . In
quasi-delict, negligence is direct, substantive and independent, while in breach
of contract, negligence is merely incidental to the performance of the
contractual obligation; there is a pre-existing contract or obligation, In quasi-
delict, the defense of "good father of a family" is a complete and proper defense
insofar as parents, guardians and employers are concerned, while in breach of
contract, such is not a complete and proper defense in the selection and
supervision of employees. In quasi-delict, there is no presumption of negligence
and it is incumbent upon the injured party to prove the negligence of the
defendant, otherwise, the former's complaint will be dismissed, while in breach
of contract, negligence is presumed so long as it can be proved that there was
breach of the contract and the burden is on the defendant to prove that there
was no negligence in the carrying out of the terms of the contract; the rule of
respondeat superior is followed. 5 3 (Emphasis in the original, citations omitted)
In Government Service Insurance System v. Spouses Labung-Deang , 5 4 since the
petitioner's obligation arose from a contract, this Court applied the Civil Code
provisions on contracts, instead of those of Article 2176:
The trial court and the Court of Appeals treated the obligation of GSIS as
one springing from quasi-delict. We do not agree. Article 2176 of the Civil Code
defines quasi-delict as follows:
"Whoever by act or omission causes damages 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 (italics ours) ."
Under the facts, there was a pre-existing contract between the parties.
GSIS and the spouses Deang had a loan agreement secured by a real estate
mortgage. The duty to return the owner's duplicate copy of title arose as soon
as the mortgage was released. GSIS insists that it was under no obligation to
return the owner's duplicate copy of the title immediately. This insistence is not
warranted. Negligence is obvious as the owners' duplicate copy could not be
returned to the owners. Thus, the more applicable provisions of the Civil Code
are:
"Article 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay and those who
in any manner contravene the tenor thereof are liable for
damages."
"Article 2201. In contracts and quasi-contracts, the
damages for which the obligor who acted in good faith is liable
shall be those that are the natural and probable consequences of
the breach of the obligation, and which the parties have foreseen
or could have reasonably foreseen at the time the obligation was
constituted . . ."
Since good faith is presumed and bad faith is a matter of fact which
should be proved, we shall treat GSIS as a party who defaulted in its obligation
to return the owners' duplicate copy of the title. As an obligor in good faith, GSIS
is liable for all the "natural and probable consequences of the breach of the
obligation." The inability of the spouses Deang to secure another loan and the
damages they suffered thereby has its roots in the failure of the GSIS to return
the owners' duplicate copy of the title. 5 5 (Citations omitted)
Similarly, in Syquia v. Court of Appeals, 5 6 this Court ruled that private respondent
would have been held liable for a breach of its contract with the petitioners, and not for
quasi-delict, had it been found negligent:
With respect to herein petitioners' averment that private respondent has
committed culpa aquiliana, the Court of Appeals found no negligent act on the
part of private respondent to justify an award of damages against it. Although a
pre-existing contractual relation between the parties does not preclude the
existence of a culpa aquiliana, We nd no reason to disregard the respondent's
Court finding that there was no negligence.
xxx xxx xxx
In this case, it has been established that the Syquias and the Manila Memorial
Park Cemetery, Inc., entered into a contract entitled "Deed of Sale and Certi cate
of Perpetual Care" on August 27, 1969. That agreement governed the relations
of the parties and de ned their respective rights and obligations. Hence, had
there been actual negligence on the part of the Manila Memorial Park Cemetery,
Inc., it would be held liable not for a quasi-delict or culpa aquiliana, but for culpa
contractual as provided by Article 1170 of the Civil Code[.] 5 7
However, there are instances when Article 2176 may apply even when there is a
pre-existing contractual relation. A party may still commit a tort or quasi-delict against
another, despite the existence of a contract between them. 5 8 HESIcT
I n Cangco v. Manila Railroad , 59 this Court explained why a party may be held
liable for either a breach of contract or an extra-contractual obligation for a negligence
act:
It is evident, therefore, that in its decision in the Yamada case, the court
treated plaintiff's action as though founded in tort rather than as based upon
the breach of the contract of carriage, and an examination of the pleadings and
of the briefs shows that the questions of law were in fact discussed upon this
theory. Viewed from the standpoint of the defendant the practical result must
have been the same in any event. The proof disclosed beyond doubt that the
defendant's servant was grossly negligent and that his negligence was the
proximate cause of plaintiff's injury. It also a rmatively appeared that
defendant had been guilty of negligence in its failure to exercise proper
discretion in the direction of the servant. Defendant was, therefore, liable for the
injury suffered by plaintiff, whether the breach of the duty were to be regarded
as constituting culpa aquilina or culpa contractual. As Manresa points out . . .
whether negligence occurs as an incident in the course of the performance of a
contractual undertaking or is itself the source of an extra-contractual obligation,
its essential characteristics are identical. There is always an act or omission
productive of damage due to carelessness or inattention on the part of the
defendant. Consequently, when the court holds that a defendant is liable in
damages for having failed to exercise due care, either directly, or in failing to
exercise proper care in the selection and direction of his servants, the practical
result is identical in either case . . .
The true explanation of such cases is to be found by directing the
attention to the relative spheres of contractual and extra-contractual
obligations. The eld of non-contractual obligation is much more broader [sic]
than that of contractual obligation, comprising, as it does, the whole extent of
juridical human relations. These two elds, guratively speaking, concentric;
that is to say, the mere fact that a person is bound to another by contract does
not relieve him from extra-contractual liability to such person. When such a
contractual relation exists the obligor may break the contract under such
conditions that the same act which constitutes a breach of the contract would
have constituted the source of an extra-contractual obligation had no contract
existed between the parties. 6 0 (Emphasis supplied, citation omitted)
If a contracting party's act that breaches the contract would have given rise to an
extra-contractual liability had there been no contract, the contract would be deemed
breached by a tort, 6 1 and the party may be held liable under Article 2176 and its related
provisions. 6 2
In Singson v. Bank of the Philippine Islands , 6 3 this Court upheld the petitioners'
claim for damages based on a quasi-delict, despite the parties' relationship being
contractual in nature:
After appropriate proceedings, the Court of First Instance of Manila
rendered judgment dismissing the complaint upon the ground that plaintiffs
cannot recover from the defendants upon the basis of a quasi-delict, because
the relation between the parties is contractual in nature; because this case does
not fall under Article 2219 of our Civil Code, upon which plaintiffs rely; and
because plaintiffs have not established the amount of damages allegedly
sustained by them.
The lower court held that plaintiffs' claim for damages cannot be based
upon a tort or quasi-delict, their relation with the defendants being contractual in
nature. We have repeatedly held, however, that the existence of a contract
between the parties does not bar the commission of a tort by the one against
the order and the consequent recovery of damages therefor. Indeed, this view
has been in effect, reiterated in a comparatively recent case. Thus, in Air France
vs. Carrascoso, involving an airplane passenger who, despite his rst-class
ticket, had been illegally ousted from his rst-class accommodation, and
compelled to take a seat in the tourist compartment, was held entitled to recover
damages from the air-carrier, upon the ground of tort on the latter's part, for,
although the relation between a passenger and the carrier is "contractual both in
origin and nature . . . the act that breaks the contract may also be a tort." 6 4
(Citations omitted)
However, if the act complained of would not give rise to a cause of action for a
quasi-delict independent of the contract, then the provisions on quasi-delict or tort
would be inapplicable. 6 5
I n Philippine School of Business Administration v. Court of Appeals , 6 6
petitioner's obligation to maintain peace and order on campus was based on a contract
with its students. Without this contract, the obligation does not exist. Therefore, the
private respondents' cause of action must be founded on the breach of contract and
cannot be based on Article 2176:
Because the circumstances of the present case evince a contractual
relation between the PSBA and Carlitos Bautista, the rules on quasi-delict do not
really govern. A perusal of Article 2176 shows that obligations arising from
quasi-delicts or tort, also known as extra-contractual obligations, arise only
between parties not otherwise bound by contract, whether express or implied.
However, this impression has not prevented this Court from determining the
existence of a tort even when there obtains a contract. In Air France vs.
Carrascoso (124 Phil. 722), the private respondent was awarded damages for
his unwarranted expulsion from a rst-class seat aboard the petitioner airline. It
is noted, however, that the Court referred to the petitioner-airline's liability as one
arising from tort, not one arising from a contract of carriage. In effect, Air France
is authority for the view that liability from tort may exist even if there is a
contract, for the act that breaks the contract may be also a tort. (Austro-America
S.S. Co. vs. Thomas, 248 Fed. 231). caITAC
This view was not all that revolutionary, for even as early as 1918, this
Court was already of a similar mind. In Cangco vs. Manila Railroad (38 Phil.
780), Mr. Justice Fisher elucidated thus:
"The eld of non-contractual obligation is much more
broader [sic] than that of contractual obligation, comprising, as it
does, the whole extent of juridical human relations. These two
elds, guratively speaking, concentric; that is to say, the mere
fact that a person is bound to another by contract does not relieve
him from extra-contractual liability to such person. When such a
contractual relation exists the obligor may break the contract
under such conditions that the same act which constitutes a
breach of the contract would have constituted the source of an
extra-contractual obligation had no contract existed between the
parties."
Immediately what comes to mind is the chapter of the Civil Code on
Human Relations, particularly Article 21, which provides:
"Any person who wilfully causes loss or injury to another in
a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage." (Italics supplied)
Air France penalized the racist policy of the airline which emboldened the
petitioner's employee to forcibly oust the private respondent to cater to the
comfort of a white man who allegedly "had a better right to the seat." In Austro-
American, supra, the public embarrassment caused to the passenger was the
justification for the Circuit Court of Appeals, (Second Circuit), to award damages
to the latter. From the foregoing, it can be concluded that should the act which
breaches a contract be done in bad faith and be violative of Article 21, then
there is a cause to view the act as constituting a quasi-delict.
In the circumstances obtaining in the case at bar, however, there is, as
yet, no nding that the contract between the school and Bautista had been
breached thru the former's negligence in providing proper security measures.
This would be for the trial court to determine. And, even if there be a nding of
negligence, the same could give rise generally to a breach of contractual
obligation only. Using the test of Cangco, supra, the negligence of the school
would not be relevant absent a contract. In fact, that negligence becomes
material only because of the contractual relation between PSBA and Bautista. In
other words, a contractual relation is a condition sine qua non to the school's
liability. The negligence of the school cannot exist independently on the
contract, unless the negligence occurs under the circumstances set out in Article
21 of the Civil Code. 6 7 (Citations omitted)
In situations where the contractual relation is indispensable to hold a party liable,
there must be a nding that the act or omission complained of was done in bad faith
and in violation of Article 21 of the Civil Code to give rise to an action based on tort. 6 8
In Far East Bank and Trust Company v. Court of Appeals, 6 9 as the party's claim
for damages was based on a contractual relationship, the provisions on quasi-delict
generally did not apply. In this case, this Court did not award moral damages to the
private respondent because the applicable Civil Code provision was Article 2220, 7 0 not
Article 21, and neither fraud nor bad faith was proved:
We are not unaware of the previous rulings of this Court, such as in
American Express International, Inc. vs. Intermediate Appellate Court (167 SCRA
209) and Bank of [the] Philippine Islands vs. Intermediate Appellate Court (206
SCRA 408), sanctioning the application of Article 21, in relation to Article 2217
and Article 2219 of the Civil Code to a contractual breach similar to the case at
bench. Article 21 states:
"Art. 21. Any person who willfully causes loss or injury
to another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage."
Article 21 of the Code, it should be observed, contemplates a conscious act to
cause harm. Thus, even if we are to assume that the provision could properly
relate to a breach of contract, its application can be warranted only when the
defendant's disregard of his contractual obligation is so deliberate as to
approximate a degree of misconduct certainly no less worse [sic] than fraud or
bad faith. Most importantly, Article 21 is a mere declaration of a general
principle in human relations that clearly must, in any case, give way to the
speci c provision of Article 2220 of the Civil Code authorizing the grant of
moral damages in culpa contractual solely when the breach is due to fraud or
bad faith.
xxx xxx xxx
The Court has not in the process overlooked another rule that a quasi-
delict can be the cause for breaching a contract that might thereby permit the
application of applicable principles on tort even where there is a pre-existing
contract between the plaintiff and the defendant (Phil. Airlines vs. Court of
Appeals, 106 SCRA 143; Singson vs. Bank of the Phil. Islands, 23 SCRA 1117;
a n d Air France vs. Carrascoso, 18 SCRA 155). This doctrine, unfortunately,
cannot improve private respondents' case for it can aptly govern only where the
act or omission complained of would constitute an actionable tort
independently of the contract. The test (whether a quasi-delict can be deemed to
underlie the breach of a contract) can be stated thusly: Where, without a pre-
existing contract between two parties, an act or omission can nonetheless
amount to an actionable tort by itself, the fact that the parties are contractually
bound is no bar to the application of quasi-delict provisions to the case. Here,
private respondents' damage claim is predicated solely on their contractual
relationship; without such agreement, the act or omission complained of cannot
by itself be held to stand as a separate cause of action or as an independent
actionable tort. 7 1 (Citations omitted)
ICHDca
Here, petitioner denies that it was obliged to disclose the facts regarding the
hijacking incident since this was not among the provisions of its Trucking Service
Agreement with respondent. There being no contractual obligation, respondent had no
cause of action against petitioner:
Applying said test, assuming for the sake of argument that petitioner
indeed failed to inform respondent of the incident where the truck was later
found at the Caloocan Police station, would an independent action prosper
based on such omission? Assuming that there is no contractual relation
between the parties herein, would petitioner's omission of not informing
respondent that the truck was impounded gives [sic] rise to a quasi-delict?
Obviously not, because the obligation, if there is any in the contract, that is to
inform plaintiff of said incident, could have been spelled out in the very contract
itself duly executed by the parties herein speci cally in the Trucking Service
Agreement. It is a fact that no such obligation or provision existed in the
contract. Absent said terms and obligations, applying the principles on tort as a
cause for breaching a contract would therefore miserably fail as the lower Court
erroneously did in this case. 7 2
The obligation to report what happened during the hijacking incident, admittedly,
does not appear on the plain text of the Trucking Service Agreement. Petitioner argues
that it is nowhere in the agreement. Respondent does not dispute this claim. Neither the
Regional Trial Court nor the Court of Appeals relied on the provisions of the Trucking
Service Agreement to arrive at their respective conclusions. Breach of the Trucking
Service Agreement was neither alleged nor proved.
While petitioner and respondent were contractually bound under the Trucking
Service Agreement and the events at the crux of this controversy occurred during the
performance of this contract, it is apparent that the duty to investigate and report arose
subsequent to the Trucking Service Agreement. When respondent discovered the news
report on the hijacking incident, it contacted petitioner, requesting information on the
incident. 7 3 Respondent then requested petitioner to investigate and report on the
veracity of the news report. Pursuant to respondent's request, petitioner met with
respondent and Matsushita on April 20, 2002 and issued a letter dated April 22, 2002,
addressed to Matsushita. 7 4 Respondent's claim was based on petitioner's negligent
conduct when it was required to investigate and report on the incident:
The defendant claimed that it should not be held liable for damages suffered by
the plaintiff considering that the proximate cause of the damage done to
plaintiff is the negligence by employees of Schmitz trucking. This argument is
untenable because the defendant is being sued in this case not for the
negligence of the employees of Schmitz trucking but based on defendant's own
negligence in failing to disclose the true facts of the hijacking incident to
plaintiff Keihin and Matsushita. 7 5
Both the Regional Trial Court and Court of Appeals erred in nding petitioner's
negligence of its obligation to report to be an action based on a quasi-delict.
Petitioner's negligence did not create the vinculum juris or legal relationship with the
respondent, which would have otherwise given rise to a quasi-delict. Petitioner's duty to
respondent existed prior to its negligent act. When respondent contacted petitioner
regarding the news report and asked it to investigate the incident, petitioner's
obligation was created. Thereafter, petitioner was alleged to have performed its
obligation negligently, causing damage to respondent.
The doctrine "the act that breaks the contract may also be a tort," on which the
lower courts relied, is inapplicable here. Petitioner's negligence, arising as it does from
its performance of its obligation to respondent, is dependent on this obligation. Neither
do the facts show that Article 21 of the Civil Code applies, there being no nding that
petitioner's act was a conscious one to cause harm, or be of such a degree as to
approximate fraud or bad faith:
To be sure, there was inaction on the part of the defendant which caused
damage to the plaintiff, but there is nothing to show that the defendant intended
to conceal the truth or to avoid liability. When the facts became apparent to
defendant, the latter readily apologized to Keihin and Matsushita for their
mistake. 7 6
Consequently, Articles 1170, 1172, and 1173 of the Civil Code on negligence in
the performance of an obligation should apply.
III
Under Article 1170 of the Civil Code, liability for damages arises when those in
the performance of their obligations are guilty of negligence, among others. Negligence
here has been de ned as "the failure to observe that degree of care, precaution and
vigilance that the circumstances just demand, whereby that other person suffers injury."
7 7 If the law or contract does not provide for the degree of diligence to be exercised,
then the required diligence is that of a good father of a family. 7 8 The test to determine
a party's negligence is if the party used "the reasonable care and caution which an
ordinarily prudent person would have used in the same situation" 7 9 when it performed
the negligent act. If the party did not exercise reasonable care and caution, then it is
guilty of negligence.
In this case, both the Regional Trial Court and the Court of Appeals found that
petitioner was negligent in failing to adequately report the April 17, 2002 hijacking
incident to respondent and not conducting a thorough investigation despite being
directed to do so. The trial court's factual ndings, when a rmed by the Court of
Appeals, are binding on this Court and are generally conclusive. 8 0
The Regional Trial Court found that petitioner's conduct showed its negligent
handling of the investigation and its failure to timely disclose the facts of the incident to
respondent and Matsushita: TCAScE
[Orient Freight] was clearly negligent in failing to investigate properly the

incident and make a factual report to Keihin and Matsushita. [Orient Freight]
claimed that it was pressed for time considering that they were given only about
one hour and a half to investigate the incident before making the initial report.
They claimed that their employees had no reason to suspect that the robbery
occurred considering that the seal of the van remained intact. Moreover, the
priority they had at that time was to load the cargo to the carrying vessel on
time for shipment on April 19, 200[2]. They claimed that they made arrangement
with the Caloocan Police Station for the release of the truck and the cargo and
they were able to do that and the objective was achieved. This may be true but
the Court thinks that [Orient Freight] had enough time to investigate properly the
incident. The hijacking incident happened on April 17, 200[2] and the tabloid
Tempo published the hijacking incident only on April 19, 200[2]. This means
that [Orient Freight] had about two (2) days to conduct a diligent inquiry about
the incident. It took them until May 15, 200[2] to discover that a robbery indeed
occurred resulting in the loss of ten pallets or 218 cartons valued at US
$34,226.14. They even denied that there was no police report only to nd out
that on May 15, 200[2] that there was such a report. It was [Orient Freight]'s duty
to inquire from the Caloocan Police Station and to nd out if they issued a
police report. Yet, it was plaintiff Keihin which furnished them a copy of the
police report. The failure of [Orient Freight] to investigate properly the incident
and make a timely report constitutes negligence. Evidently, [Orient Freight] failed
to exercise due diligence in disclosing the true facts of the incident to plaintiff
Keihin and Matsushita. As a result, plaintiff Keihin suffered income losses by
reason of Matsushita's cancellation of their contract which primarily was
caused by the negligence of [Orient Freight]. 8 1
The Court of Appeals affirmed the trial court's finding of negligence:
From the foregoing account, it is evident that [Orient Freight] not only had
knowledge of the foiled hijacking of the truck carrying the subject shipment but,
more importantly, withheld said information from [Keihin-Everett]. Confronted
with the April 19, 2002 tabloid account thereof, [Orient Freight] appears to have
further compounded its omission by misleading [Keihin-Everett] and
Matsu[s]hita into believing that the subject incident was irresponsibly reported
and merely involved a stalled vehicle which was towed to avoid obstruction of
tra c. Given that the police report subsequently obtained by [Keihin-Everett]
was also dated April 17, 2002, [Orient Freight]'s insistence on its good faith on
the strength of the information it gathered from its employees as well as the
timely shipment and supposed good condition of the cargo clearly deserve
scant consideration. 8 2
Petitioner's argument that its acts were a "sound business judgment which the
court cannot supplant or question nor can it declare as a negligent act" 8 3 lacks merit.
The Regional Trial Court found that the circumstances should have alerted petitioner to
investigate the incident in a more circumspect and careful manner:
On this score, [Orient Freight] itself presented the circumstances which should
have alerted [Orient Freight] that there was more to the incident than simply a
case of mechanical breakdown or towing of the container truck to the police
station. [Orient Freight] pointed to speci c facts that would naturally arouse
suspicion that something was wrong when the container was found in the
premises of the Caloocan Police Station and that driver Ricky Cudas was
nowhere to be found. The police does [sic] not ordinarily impound a motor
vehicle if the problem is merely a tra c violation. More important, driver Ricky
Cudas disappeared and was reported missing. When the Caloocan Police
chanced upon the container van, it was found straying at C-3 which is outside
its usual route. All these circumstances should have been enough for [Orient
Freight] to inquire deeper on the real circumstances of the incident.
xxx xxx xxx
[Orient Freight] talked to Rubelito Aquino and apparently failed to listen
closely to the statement given by their truck helper to the Caloocan Police. The
truck helper recounted how the engine of the truck stalled and the driver was
able to start the engine but thereafter, he was nowhere to be seen. By this
circumstance alone, it should have become apparent to [Orient Freight] that the
truck driver gypped the truck helper into calling the company and had a different
intention which was to run away with the container van. It readily shows that
Ricky Cudas intended to hijack the vehicle by feigning or giving the false
appearance of an engine breakdown. Yet, [Orient Freight] dismissed the incident
as a simple case of a unit breakdown and towing of vehicle allegedly due to
tra c violation. Under the circumstances, therefore, the defendant failed to
exercise the degree of care, precaution and vigilance which the situation
demands. 8 4
Despite the circumstances which would have cautioned petitioner to act with
care while investigating and reporting the hijacking incident, petitioner failed to do so.
Petitioner is responsible for the damages that respondent incurred due to the former's
negligent performance of its obligation.
IV
Articles 2200 and 2201 of the Civil Code provide for the liability for damages in
contractual obligations:
Article 2200. Indemni cation for damages shall comprehend not only the
value of the loss suffered, but also that of the pro ts which the obligee failed to
obtain.
Article 2201. In contracts and quasi-contracts, the damages for
which the obligor who acted in good faith is liable shall be those that are the
natural and probable consequences of the breach of the obligation, and which
the parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted. cTDaEH
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the non-
performance of the obligation.
In Central Bank of the Philippines v. Court of Appeals , 8 5 this Court explained the
principles underlying Articles 2200 and 2201:
Construing these provisions, the following is what this Court held in
Cerrano vs. Tan Chuco, 38 Phil. 392:
". . . Article 1106 (now 2200) of the Civil Code establishes
the rule that prospective pro ts may be recovered as damages,
while article 1107 (now 2201) of the same Code provides that the
damages recoverable for the breach of obligations not originating
in fraud (dolo) are those which were or might have been foreseen
at the time the contract was entered into. Applying these principles
to the facts in this case, we think that it is unquestionable that
defendant must be deemed to have foreseen at the time he made
the contract that in the event of his failure to perform it, the
plaintiff would be damaged by the loss of the pro t he might
reasonably have expected to derive from its use.
"When the existence of a loss is established, absolute
certainty as to its amount is not required. The bene t to be derived
from a contract which one of the parties has absolutely failed to
perform is of necessity to some extent, a matter of speculation,
but the injured party is not to be denied all remedy for that reason
alone. He must produce the best evidence of which his case is
susceptible and if that evidence warrants the inference that he has
been damaged by the loss of pro ts which he might with
reasonable certainty have anticipated but for the defendant's
wrongful act, he is entitled to recover. As stated in Sedgwick on
Damages (Ninth Ed., par. 177):
'The general rule is, then, that a plaintiff may recover
compensation for any gain which he can make it appear
with reasonable certainty the defendant's wrongful act
prevented him from acquiring, . . .' (See also Algarra vs.
Sandejas, 27 Phil. Rep., 284, 289; Hicks vs. Manila Hotel
Co., 28 Phil. Rep., 325.)" (At pp. 398-399.) 8 6
The lower courts established that petitioner's negligence resulted in Matsushita's
cancellation of its contract with respondent. The Regional Trial Court found:
In the letter dated June 6, 2002, Matsushita pre-terminated its In-House
Brokerage Service Agreement with plaintiff Keihin for violation of the terms of
said contract. Its President, KenGo Toda, stated that because of the incident
that happened on April 17, 2002 involving properties which the plaintiff failed to
inform them, Matsushita has lost con dence in plaintiff's capability to handle
its brokerage and forwarding requirements. There was clearly a breach of trust
as manifested by plaintiff's failure to disclose facts was when it had the duty to
reveal them and it constitutes fraud. Moreover, the negligence of plaintiff
personnel cannot be tolerated as Matsushita is bound to protect the integrity of
the company. 8 7
It could be reasonably foreseen that the failure to disclose the true facts of an
incident, especially when it turned out that a crime might have been committed, would
lead to a loss of trust and con dence in the party which was bound to disclose these
facts. Petitioner caused the loss of trust and confidence when it misled respondent and
Matsushita into believing that the incident had been irresponsibly reported and merely
involved a stalled truck. 8 8 Thus, petitioner is liable to respondent for the loss of pro t
sustained due to Matsushita's termination of the In-House Brokerage Service
Agreement.
As regards the amount of damages, this Court cannot rule on whether the
Regional Trial Court erred in using the Pro t and Loss Statement submitted by
respondent for its computation. The amount of the award of damages is a factual
matter generally not reviewable in a Rule 45 petition. 8 9 The damages awarded by the
Regional Trial Court, as a rmed by the Court of Appeals, were supported by
documentary evidence such as respondent's audited nancial statement. The trial court
clearly explained how it reduced the respondent's claimed loss of pro t and arrived at
the damages to be awarded:
The difference between the total gross revenue of plaintiff for 2002 as
reported in the monthly pro t and loss statement of [P]14,801,744.00 and the
audited pro t and loss statement of the amount of [P]10,434,144.00 represents
1/3 of the total gross revenues of the plaintiff for the six months period.
Accordingly, the net pro t loss of [P]2.5 million pesos as reported in the monthly
pro t and loss statement of the plaintiff should be reduced by 1/3 or the
amount of [P]833,333.33. Therefore, the net pro t loss of the plaintiff for the
remaining period of six months should only be the amount of [P]1,666,667.70
and not [P]2.5 million as claimed. 9 0
Petitioner has not sufficiently shown why the computation made by the trial court
should be disturbed.
WHEREFORE, the petition is DENIED. The January 21, 2010 Decision and April
21, 2010 Resolution of the Court of Appeals in CA-G.R. CV No. 91889 are AFFIRMED.
SO ORDERED. cSaATC
Carpio, Peralta, Mendoza and Martires, JJ., concur.

Footnotes
1. Rollo, pp. 8-30.
2. Id. at 32-43. The Decision, docketed as CA-G.R. CV No. 91889, was penned by Associate
Justice Rebecca De Guia-Salvador and concurred in by Associate Justices Estela M.
Perlas-Bernabe (now an Associate Justice of this Court) and Jane Aurora C. Lantion of
the Sixth Division, Court of Appeals, Manila.
3. Id. at 45-46. The Resolution was penned by Associate Justice Rebecca De Guia-Salvador and
concurred in by Associate Justices Estela M. Perlas-Bernabe (now an Associate Justice
of this Court) and Jane Aurora C. Lantion of the Former Sixth Division, Court of Appeals,
Manila.
4. Id. at 70-92. The Decision, docketed as Civil Case No. 02-105018, was rendered by Judge
Virgilio M. Alameda of Branch 10, Regional Trial Court, Manila.
5. The Court of Appeals Decision refers to it as "Matsuhita."

6. Rollo, p. 33.
7. Id.
8. Id.
9. Referred to as "Rudelito Aquino" in the Court of Appeals Decision.
10. Id. at 33.

11. Id. at 34.
12. Id.
13. Id.
14. Id.
15. Id. at 34-35.

16. Id. at 35.
17. Id. at 70.
18. Id. at 35.
19. Id.
20. Id. at 70-92.
21. Id. at 86.

22. Id. at 89.
23. Id. at 92.
24. Id. at 91.

25. Id. at 32-43.
26. Id. at 38.

27. Id. at 39. The Court of Appeals Decision mentioned "August 17, 2002" but meant "April 17,
2002."
28. Id. at 41.
29. Id.
30. Id. at 45-46.
31. Id. at 15.

32. Id. at 17-18.
33. 311 Phil. 783 (1995) [Per J. Vitug, En Banc].
34. Rollo, pp. 19-20.

35. Id. at 23-24.
36. Id. at 53-57.

37. Id. at 53.
38. Id. at 55.
39. Id. at 59-62.

40. Id. at 60.
41. Id. at 65.

42. Id. at 67-68.
43. Section 4 of Rule 45 of the Rules of Court states, in part:
Section 4. Contents of petition. — The petition shall be led in eighteen (18) copies, with
the original copy intended for the court being indicated as such by the petitioner, and
shall (a) state the full name of the appealing party as the petitioner and the adverse
party as respondent, without impleading the lower courts or judges thereof either as
petitioners or respondents[.] (Emphasis supplied)
44. 617 Phil. 543 (2009) [Per J. Brion, En Banc].
45. Id. at 552-553.

46. Spouses Batal v. Spouses Tominaga , 534 Phil. 798, 804 (2006) [Per J. Austria-Martinez,
First Division].
47. Id.
48. Id.
49. Id. at 804-805.
50. Fores v. Miranda, 105 Phil. 266, 275 (1959) [Per J. Reyes, J.B.L., En Banc].
51. Consolidated Bank and Trust Corp. v. Court of Appeals , 457 Phil. 688, 708 (2003) [Per J.
Carpio, First Division].
52. 700 Phil. 327 (2012) [Per J. Perez, Second Division].

53. Id. at 357-358.
54. 417 Phil. 662 (2001) [Per J. Pardo, First Division].
55. Id. at 670-671.

56. 291 Phil. 653 (1993) [Per J. Campos, Jr., Second Division].
57. Id. at 659-660.

58. Singson v. Bank of the Philippine Islands , 132 Phil. 597, 599-600 (1968) [Per J. Concepcion,
En Banc].
59. 38 Phil. 768 (1918) [Per J. Fisher, En Banc].

60. Id. at 779-781.
61. The general formulation of this principle is "the act that breaks the contract may also be a
tort" (Air France v. Carrascoso , 124 Phil. 722, 739 (1966) [Per J. Sanchez, En Banc]). The
use of the word "tort" instead of "quasi-delict" is signi cant since this Court has noted
that a "quasi-delict, as de ned in Article 2176 of the Civil Code . . . is homologous but not
identical to tort under the common law, which includes not only negligence, but also
intentional criminal acts, such as assault and battery, false imprisonment, and deceit."
(Coca-Cola Bottlers Philippines, Inc. v. Court of Appeals , 298 Phil. 52, 61 (1993) [Per J.
Davide, Jr., First Division], citing the Report of the Code Commission on the Proposed
Civil Code of the Philippines).
62. See American Express International, Inc. v. Cordero , 509 Phil. 619 (2005) [Per J. Sandoval-
Gutierrez, Third Division]; Singson v. Bank of the Philippine Islands , 132 Phil. 597 (1968)
[Per J. Concepcion, En Banc]; Coca-Cola Bottlers Philippines, Inc. v. Court of Appeals, 298
Phil. 52 (1993) [Per J. Davide, Jr., First Division]; Light Rail Transit Authority v. Navidad ,
445 Phil. 31 (2003) [Per J. Vitug, First Division].
63. 132 Phil. 597 (1968) [Per J. Concepcion, En Banc].

64. Id. at 599-600.
65. Far East Bank and Trust Company v. Court of Appeals , 311 Phil. 783, 792-793 (1995) [Per J.
Vitug, En Banc].

66. 282 Phil. 759 (1992) [Per J. Padilla, Second Division].
67. Id. at 765-766.
68. Id.
69. 311 Phil. 783 (1995) [Per J. Vitug, En Banc].
70. CIVIL CODE, art. 2220 states:
Article 2220. Willful injury to property may be a legal ground for awarding moral
damages if the court should nd that, under the circumstances, such damages are justly
due. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith.
71. Far East Bank and Trust Company v. Court of Appeals , 311 Phil. 783, 788-793 (1995) [Per J.
Vitug, En Banc].
72. Rollo, pp. 17-18.
73. Id. at 76.

74. Id. at 33-34.
75. Id. at 88.
76. Id. at 91.

77. Filinvest Land, Inc. v. Flood-Affected Homeowners of Meritville Alliance , 556 Phil. 622, 628
(2007) [Per J. Sandoval-Gutierrez, First Division].
78. CIVIL CODE, art. 1173.

79. United Coconut Planters Bank v. Ramos , 461 Phil. 277, 295 (2003) [Per J. Callejo, Second
Division].
8 0 . Garcia, Jr. v. Salvador , 547 Phil. 463, 469-470 (2007) [Per J. Ynares-Santiago, Third
Division].
81. Rollo, p. 86. While this paragraph stated that the year was 2001, the trial court indicated
2002 throughout the Decision.
82. Id. at 38-39.

83. Id. at 20.
84. Id. at 84-86.
85. 159-A Phil. 21 (1975) [Per J. Barredo, Second Division].

86. Id. at 50-51.
87. Rollo, p. 83.

88. Id. at 38.
89. Spouses Lam v. Kodak Philippines, Ltd ., G.R. No. 167615, January 11, 2016, 778 SCRA 96,
126 [Per J. Leonen, Second Division].
90. Rollo, p. 90.

Civil Law Review 2 Cases CDAsia

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Civil Law Review 2 Cases CDAsia

Uploaded by

Copyright:

Available Formats

Civil Law Review 2

Case G.R. No. Date Page in PDF Pages

[G.R. No. 83748. May 12, 1989.]

FLAVIO K. MACASAET & ASSOCIATES, INC. , petitioner, vs.

F. Sumulong & Associates Law Offices for petitioner.

1. CIVIL LAW; CONTRACTS; INTERPRETATION OF CONTRACTS; LITERAL

In this Petition for Certiorari, pursuant to Section 7, Article IX of the 1987

WHEREFORE, the ruling of respondent Commission on Audit is hereby SET ASIDE

2. Article VI — CHANGE OF ORDERS .

CD Technologies Asia, Inc. 2019 cdasiaonline.com

[G.R. No. 192105. December 9, 2013.]

ANTONIO LOCSIN II , petitioner, vs . MEKENI FOOD CORPORATION ,

Ruling of the National Labor Relations Commission

1. Unpaid Salary in the amount of P12,511.45; TaCDAH

2. Unpaid sick leave/vacation leave pay in the amount of P14,789.15;

3. Unpaid commission in the amount of P9,780.00; and

5. The equivalent share of the company as part of the complainant's

Respondent-Appellee Mekeni Food Corporation is hereby authorized to

All other claims are dismissed for lack of merit.

In the absence of evidence as to the stipulations of the car plan arrangement

CD Technologies Asia, Inc. 2018 cdasiaonline.com

There is unjust enrichment "when a person unjustly retains a bene t to the

1.Rollo, pp. 10-27.

25.Elisco Tool Manufacturing Corporation v. Court of Appeals, supra note 15 at 252.

CD Technologies Asia, Inc. 2018 cdasiaonline.com

[G.R. No. 189081. August 10, 2016.]

GLORIA S. DY , petitioner, vs. PEOPLE OF THE PHILIPPINES, MANDY

CD Technologies Asia, Inc. 2016 cdasiaonline.com

12. Id. at 406-417.

17. Rollo, p. 48, emphasis in the original.

22. CIVIL CODE, Art. 1157. Obligations arise from:

2. Reparation of the damage caused;

26. Supra note 1.

32. Id. at 397-398.

34. Id. at 148.

36. Records, pp. 415-416.

37. Id. at 417.

39. 97 Phil. 748 (1955).

46. Id. at 147.

49. Id. at 151.

51. Supra note 31 at 397.

57. RULES OF COURT, Rule 1, Sec. 3, par. (a).

59. RULES OF COURT, Rule 2, Sec. 1.

60. RULES OF COURT, Rule 16, Sec. 1, par. (g).

62. RULES OF COURT, Rule 111, Sec. 1, par. (a).

64. Supra note 55.

1. Upon an oral contract;

CD Technologies Asia, Inc. 2016 cdasiaonline.com

[G.R. No. 84516. December 5, 1989.]

DIONISIO CARPIO , petitioner, vs. HON. SERGIO DOROJA, (Presiding

1. CRIMINAL LAW; SUBSIDIARY CIVIL LIABILITY OF AN EMPLOYER;

Before Us is a petition to review by certiorari the decision of the Municipal Trial

An information for Reckless Imprudence Resulting to Serious Physical Injuries

Thereafter, the accused filed an application for probation.

CD Technologies Asia, Inc. 2019 cdasiaonline.com

CD Technologies Asia, Inc. 2019 cdasiaonline.com

[G.R. No. 182356. December 4, 2013.]

DRA. LEILA A. DELA LLANA , petitioner, vs . REBECCA BIONG, doing

Based on these requisites, Dra. dela Llana must rst establish by

B. The medical certificate

Your Honor, this has been marked as Exhibit H.

So, on October 19, I underwent surgery on my neck, on my spine.

2.Id. at 39-55; penned by Associate Justice Remedios A. Salazar-Fernando, and concurred in by

10.RTC rollo, pp. 121-122.