G.R. No.

70493 May 18, 1989

GLAN PEOPLE’S LUMBER AND HARDWARE, GEORGE LIM, FABIO S. AGAD, FELIX LIM and PAUL ZACARIAS y INFANTE, Petitioners, v.
INTERMEDIATE APPELLATE COURT, CECILIA ALFEREZ VDA. DE CALIBO, Minors ROYCE STEPHEN, JOYCE JOAN, JANISE MARIE,
JACQUELINE BRIGITTE, JOCELINE CORAZON, JULIET GERALDINE, JENNIFER JILL, all surnamed CALIBO, represented by their mother,
CECILIA A. VDA. DE CALIBO, Respondents.

Rufino Mayor and Isidro M. Ampig, for Petitioners.

Manuel L. Hontanosas for Private Respondents.

SYLLABUS

1. TORTS AND DAMAGES; DOCTRINE OF LAST CLEAR CHANCE. — The law is that the person who has the last fair chance to avoid the
impending harm and fails to do so is chargeable with the consequences.

2. ID.; ID.; FAILURE TO OBSERVE THE DOCTRINE. — Considering that both drivers had a full view of each other’s vehicle from a
distance of one hundred fifty meters, with both vehicles traveling at a speed of approximately thirty kilometers per hour and that
the truck had been brought to a stop while the jeep was still thirty meters away, it is logical to conclude that the driver of the jeep
had the last clear chance to avoid the accident by stopping in his turn or swerving the jeep away from the truck.

3. CIVIL PROCEDURE; AUTHORITY OF THE SUPREME COURT TO REVIEW FINDINGS OF THE APPELLATE COURT DIRECTLY IN CONFLICT
WITH THOSE OF THE TRIAL COURT. — The Supreme Court may review the findings of facts of the Court of Appeals if they are in
conflict with those of the trial court.

There is a two-fold message in this judgment that bears stating at the outset. The first, an obvious one, is that it is the objective facts
established by proofs presented in a controversy that determine the verdict, not the plight of the persons involved, no matter how
deserving of sympathy and commiseration because, for example, an accident of which they are the innocent victims has brought
them to reduced circumstances or otherwise tragically altered their lives. The second is that the doctrine laid done many, many
years ago in Picart v. Smith, 1 continues to be good law to this day.

The facts giving rise to the controversy at bar are tersely and quite accurately recounted by the Trial Court as follows: 2

"Engineer Orlando T. Calibo, Agripino Roranes, and Maximo Patos were on the jeep owned by the Bacnotan Consolidated Industries,
Inc., with Calibo at the wheel, as it approached from the South Lizada Bridge going towards the direction of Davao City at about 1:45
in the afternoon of July 4, 1979. At about that time, the cargo truck, loaded with cement bags, GI sheets, plywood, driven by
defendant Paul Zacarias y Infante, coming from the opposite direction of Davao City and bound for Glan, South Cotabato, had just
crossed said bridge. At about 59 yards after crossing the bridge, the cargo truck and the jeep collided as a consequence of which
Engineer Calibo died while Roranes and Patos sustained physical injuries. Zacarias was unhurt. As a result of the impact, the left side
of the truck wag slightly damaged while the left side of the jeep, including its fender and hood, was extensively damaged. After the
impact, the jeep fell and rested on its right side on the asphalted road a few meters to the rear of the truck, while the truck stopped
on its wheels on the road.

On November 27, 1979, the instant case for damages was filed by the surviving spouse and children of the late Engineer Calibo who
are residents of Tagbilaran City against the driver and owners of the cargo truck.

For failure to file its answer to the third party complaint, third party defendant, which insured the cargo truck involved, was declared
in default."cralaw virtua1aw library

The case filed by the heirs of Engineer Calibo — his widow and minor children, private respondents herein — was docketed as Civil
Case No. 3283 of the Court of First Instance of Bohol. 3 Named defendants in the complaint were "Felix S. Agad, George Lim and
Felix Lim . . . (who) appear to be the co-owners of the Glan People’s Lumber and Hardware . . . (and) Paul Zacarias y Infante." 4 The
defendants’ answer however alleged that the lumber and hardware business was exclusively owned by George Y. Lim, this being
evidenced by the Certificate of Registration issued by the Bureau of Domestic Trade; Fabio S. Agad was not a co-owner thereof but
"merely employed by . . . George Y. Lim as bookkeeper" ; and Felix Lim had no connection whatever with said business, "he being a
child only eight (8) years of age." 5

"After (trial, and) a careful evaluation of the evidence, both testimonial and documentary," the Court reached the conclusion "that
the plaintiffs failed to establish by preponderance of evidence the negligence, and thus the liability, of the defendants." Accordingly,
the Court dismissed the complaint (and defendants’ counterclaim) "for insufficiency of evidence." Likewise dismissed was third-party
complaint presented by the defendants against the insurer of the truck. The circumstances leading to the Court’s conclusion just
mentioned, are detailed in the Court’s decision, as follows:chanrob1es virtual 1aw library

1. Moments before its collision with the truck being operated by Zacarias, the jeep of the deceased Calibo was "zigzagging." 6

2. Unlike Zacarias who readily submitted himself to investigation by the police, Calibo’s companions, Roranes (an accountant), and
Patos, who suffered injuries on account of the collision, refused to be so investigated or give statements to the police officers. This,
plus Roranes’ waiver of the right to institute criminal proceedings against Zacarias, and the fact that indeed no criminal case was
ever instituted in Court against Zacarias, were "telling indications that they did not attribute the happening to defendant Zacarias’
negligence or fault." 7

3. Roranes’ testimony, given in plaintiffs’ behalf, was "not as clear and detailed as that of . . . Zacarias," and was "uncertain and even
contradicted by the physical facts and the police investigators Dimaano and Esparcia." 8

4. That there were skid marks left by the truck’s tires at the scene, and none by the jeep, demonstrates that the driver of the truck
had applied the brakes and the jeep’s driver had not; and that the jeep had on impact fallen on its right side is indication that it was
running at high speed. Under the circumstances, according to the Court, given "the curvature of the road and the descending grade
of the jeep’s lane, it was negligence on the part of the driver of the jeep, Engr. Calibo, for not reducing his speed upon sight of the
truck and failing to apply the brakes as he got within collision range with the truck."cralaw virtua1aw library

5. Even if it be considered that there was some antecedent negligence on the part of Zacarias shortly before the collision, in that he
had caused his truck to run some 25 centimeters to the left of the center of the road, Engr. Calibo had the last clear chance of
avoiding the accident because he still had ample room in his own lane to steer clear of the truck, or he could simply have braked to a
full stop.

The Court of Appeals saw things differently. It rendered judgment 9 on the plaintiffs’ appeal, 10 reversing the decision of the Trial
Court. It found Zacarias to be negligent on the basis of the following circumstances, to wit:chanrob1es virtual 1aw library

1) "the truck driven by defendant Zacarias occupied the lane of the jeep when the collision occurred," and although Zacarias saw the
jeep from a distance of about 150 meters, he "did not drive his truck back to his lane in order to avoid collision with the oncoming
jeep . . .;" 11 what is worse, "the truck driver suddenly applied his brakes even as he knew that he was still within the lane of the
jeep;" 12 had both vehicles stayed in their respective lanes, the collision would never have occurred, they would have passed
"alongside each other safely;" 13

2) Zacarias had no license at the time; what he handed to Pfc. Esparcia, on the latter’s demand, was the "driver’s license of his co-
driver Leonardo Baricuatro;" 14

3) the waiver of the right to file criminal charges against Zacarias should not be taken against "plaintiffs" Roranes and Patos who had
the right, under the law, to opt merely to bring a civil suit. 15

The Appellate Court opined that Zacarias’ negligence "gave rise to the presumption of negligence on the part of his employer, and
their liability is both primary and solidary." It therefore ordered "the defendants jointly and solidarily to indemnify the plaintiffs the
following amounts:chanrob1es virtual 1aw library

(1) P30,000.00 for the death of Orlando Calibo;

(2) P378,000.00 for the loss of earning capacity of the deceased

(3) P15,000.00 for attorney’s fees;

(4) Cost of suit." 16

The defendants George Lim, Felix Lim, Fabio S. Agad and Paul Zacarias have appealed to this Court on certiorari and pray for a
reversal of the judgment of the Intermediate Appellate Court which, it is claimed, ignored or ran counter to the established facts. A
review of the record confirms the merit of this assertion and persuades this Court that said judgment indeed disregarded facts
clearly and undisputably demonstrated by the proofs. The appealed judgment, consequently, will have to be reversed.

The finding that "the truck driven by defendant Paul Zacarias occupied the lane of the jeep when the collision occurred" is a loose
one, based on nothing more than the showing that at the time of the accident, the truck driven by Zacarias had edged over the
painted center line of the road into the opposite lane by a width of twenty-five (25) centimeters. It ignores the fact that by the
uncontradicted evidence, the actual center line of the road was not that indicated by the painted stripe but, according to
measurements made and testified by Patrolman Juanito Dimaano, one of the two officers who investigated the accident, correctly
lay thirty-six (36) centimeters farther to the left of the truck’s side of said stripe.chanrobles.com:cralaw:red

The unimpugned testimony of Patrolman Dimaano, a witness for the private respondents, is to the effect that the jeep’s lane was
three (3) meters and seventy-five (75) centimeters wide, and that of the truck three (3) meters and three (3) centimeters, measured
from the center stripe to the corresponding side lines or outer edges of the road. 17 The total width of the road being, therefore, six
(6) meters and seventy-eight (78) centimeters, the true center line equidistant from both side lines would divide the road into two
lanes each three (meters) and thirty-nine (39) centimeters wide. Thus, although it was not disputed that the truck overrode the
painted stripe by twenty-five (25) centimeters, it was still at least eleven (11) centimeters away from its side of the true center line
of the road and well inside its own lane when the accident occurred. By this same reckoning, since it was unquestionably the jeep
that rammed into the stopped truck, it may also be deduced that it (the jeep) was at the time travelling beyond its own lane and
intruding into the lane of the truck by at least the same 11-centimeter width of space.

Not only was the truck’s lane, measured from the incorrectly located center stripe uncomfortably narrow, given that vehicle’s width
of two (2) meters and forty-six (46) centimeters; the adjacent road shoulder was also virtually impassable, being about three (3)
inches lower than the paved surface of the road and "soft" — not firm enough to offer traction for safe passage — besides which, it
sloped gradually down to a three foot-deep ravine with a river below. 18 The truck’s lane as erroneously demarcated by the center
stripe gave said vehicle barely half a meter of clearance from the edge of the road and the dangerous shoulder and little room for
maneuver, in case this was made necessary by traffic contingencies or road conditions, if it always kept to said lane. It being also
shown that the accident happened at or near the point of the truck’s approach to a curve, 19 which called for extra precautions
against driving too near the shoulder, it could hardly be accounted negligent on the part of its driver to intrude temporarily, and by
only as small as a twenty-five centimeter-wide space (less than ten inches), into the opposite lane in order to insure his vehicle’s
safety. This, even supposing that said maneuver was in fact an intrusion into the opposite lane, which was not the case at all as just
pointed out.

Nor was the Appellate Court correct in finding that Paulino Zacarias had acted negligently in applying his brakes instead of getting
back inside his lane upon espying the approaching jeep. Being well within his own lane, as has already been explained, he had no
duty to swerve out of the jeep’s way as said Court would have had him do. And even supposing that he was in fact partly inside the
opposite lane, coming to a full stop with the jeep still thirty (30) meters away cannot be considered an unsafe or imprudent action,
there also being uncontradicted evidence that the jeep was "zigzagging" 20 and hence no way of telling in which direction it would
go as it approached the truck.

Also clearly erroneous is the finding of the Intermediate Appellate Court that Zacarias had no driver’s license at the time. The traffic
accident report attests to the proven fact that Zacarias voluntarily surrendered to the investigating officers his driver’s license, valid
for 1979, that had been renewed just the day before the accident, on July 3, 1979. 21 The Court was apparently misled by the
circumstance that when said driver was first asked to show his license by the investigators at the scene of the collision, he had first
inadvertently produced the license of a fellow driver, Leonardo Baricuatro, who had left said license in Davao City and had asked
Zacarias to bring it back to him in Glan, Cotabato. 22

The evidence not only acquits Zacarias of any negligence in the matter; there are also quite a few significant indicators that it was
rather Engineer Calibo’s negligence that was the proximate cause of the accident. Zacarias had told Patrolman Dimaano at the scene
of the collision and later confirmed in his written statement at the police headquarters 23 that the jeep had been "zigzagging," which
is to say that it was travelling or being driven erratically at the time. The other investigator, Patrolman Jose Esparcia, also testified
that eyewitnesses to the accident had remarked on the jeep’s "zigzagging." 24 There is moreover more than a suggestion that Calibo
had been drinking shortly before the accident. The decision of the Trial Court adverts to further testimony of Esparcia to the effect
that three of Calibo’s companions at the beach party he was driving home from when the collision occurred, who, having left ahead
of him went to the scene when they heard about the accident, had said that there had been a drinking spree at the party and,
referring to Calibo, had remarked: "Sabi na huag nang mag drive . . . pumipilit," (loosely translated, "He was advised not to drive, but
he insisted.")

It was Calibo whose driver’s license could not be found on his person at the scene of the accident, and was reported by his
companions in the jeep as having been lost with his wallet at said scene, according to the traffic accident report, Exhibit "J." Said
license unexplainedly found its way into the record some two years later.chanrobles virtual lawlibrary

Reference has already been made to the finding of the Trial Court that while Zacarias readily submitted to interrogation and gave a
detailed statement to the police investigators immediately after the accident, Calibo’s two companions in the jeep and supposed
eyewitnesses, Agripino Roranes and Maximo Patos, refused to give any statements. Furthermore, Roranes who, together with Patos,
had sustained injuries as a result of the collision, waived his right to file a criminal case against Zacarias.25cralaw:red

Even, however, ignoring these telltale indicia of negligence on the part of Calibo, and assuming some antecedent negligence on the
part of Zacarias in failing to keep within his designated lane, incorrectly demarcated as it was, the physical facts, either expressly
found by the Intermediate Appellate Court or which may be deemed conceded for lack of any dispute, would still absolve the latter
of any actionable responsibility for the accident under the rule of the last clear chance.

Both drivers, as the Appellate Court found, had a full view of each other’s vehicle from a distance of one hundred fifty meters. Both
vehicles were travelling at a speed of approximately thirty kilometers per hour. 26 The private respondents have admitted that the
truck was already at a full stop when the jeep plowed into it. And they have not seen fit to deny or impugn petitioners’ imputation
that they also admitted the truck had been brought to a stop while the jeep was still thirty meters away. 27 From these facts the
logical conclusion emerges that the driver of the jeep had what judicial doctrine has appropriately called the last clear chance to
avoid the accident, while still at that distance of thirty meters from the truck, by stopping in his turn or swerving his jeep away from
the truck, either of which he had sufficient time to do while running at a speed of only thirty kilometers per hour. In those
circumstances, his duty was to seize that opportunity of avoidance, not merely rely on a supposed right to expect, as the Appellate
Court would have it, the truck to swerve and leave him a clear path.

The doctrine of the last clear chance provides as valid and complete a defense to accident liability today as it did when invoked and
applied in the 1918 case of Picart v. Smith, supra, which involved a similar state of facts. Of those facts, which should be familiar to
every student of law, it is only necessary to recall the summary made in the syllabus of this Court’s decision that:chanrobles
lawlibrary : rednad

"(t)he plaintiff was riding a pony on a bridge. Seeing an automobile ahead he improperly pulled his horse over to the railing on the
right. The driver of the automobile, however guided his car toward the plaintiff without diminution of speed until he was only few
feet away. He then turned to the right but passed so closely to the horse that the latter being frightened, jumped around and was
killed by the passing car. . . . ."cralaw virtua1aw library

Plaintiff Picart was thrown off his horse and suffered contusions which required several days of medical attention. He sued the
defendant Smith for the value of his animal, medical expenses and damage to his apparel and obtained judgment from this Court
which, while finding that there was negligence on the part of both parties, held that of the defendant was the immediate and
determining cause of the accident and that of the plaintiff." . . the more remote factor in the case" :jgc:chanrobles.com.ph

"It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent negligence in planting
himself on the wrong side of the road. But as we have already stated, the defendant was also negligent; and in such case the
problem always is to discover which agent is immediately and directly responsible. It will be noted that the negligent acts of the two
parties were not contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by an
appreciable interval. Under these circumstances the law is that the person who has the last fair chance to avoid the impending harm
and fails to do so is chargeable with the consequences, without reference to the prior negligence of the other party."cralaw
virtua1aw library

Since said ruling clearly applies to exonerate petitioner Zacarias and his employer (and co-petitioner) George Lim, an inquiry into
whether or not the evidence support the latter’s additional defense of due diligence in the selection and supervision of said driver is
no longer necessary and will not be undertaken. The fact is that there is such evidence in the record which has not been
controverted.

It must be pointed out, however, that the Intermediate Appellate Court also seriously erred in holding the petitioners Pablo S. Agad
and Felix Lim solidarily liable for the damages awarded in its appealed decision, as alleged owners, with petitioner George Lim, of
Glan People’s Lumber and Hardware, employer of petitioner Zacarias. This manifestly disregarded, not only the certificate of
registration issued by the Bureau of Domestic Trade identifying Glan People’s Lumber and Hardware as a business name registered
by George Lim, 28 but also unimpugned allegations into the petitioners’ answer to the complaint that Pablo S. Agad was only an
employee of George Lim and that Felix Lim, then a child of only eight (8) years, was in no way connected with the
business.chanrobles law library : red

In conclusion, it must also be stated that there is no doubt of this Court’s power to review the assailed decision of the Intermediate
Appellate Court under the authority of precedents recognizing exceptions to the familiar rule binding it to observe and respect the
latter’s findings of fact. Many of those exceptions may be cited to support the review here undertaken, but only the most obvious —
that said findings directly conflict with those of the Trial Court — will suffice. 29 In the opinion of this Court and after a careful review
of the record, the evidence singularly fails to support the findings of the Intermediate Appellate Court which, for all that appears,
seem to have been prompted rather by sympathy for the heirs of the deceased Engineer Calibo than by an objective appraisal of the
proofs and a correct application of the law to the established facts. Compassion for the plight of those whom an accident has robbed
of the love and support of a husband and father is an entirely natural and understandable sentiment. It should not, however, be
allowed to stand in the way of, much less to influence, a just verdict in a suit at law.

WHEREFORE, the appealed judgment of the Intermediate Appellate Court is hereby REVERSED, and the complaint against herein
petitioners in Civil Case No. 3283 of the Court of First Instance of Bohol, Branch IV, is DISMISSED. No pronouncement as to costs.

SO ORDERED.
G.R. Nos. 79050-51 November 14, 1989

PANTRANCO NORTH EXPRESS, INC., Petitioner, v. MARICAR BASCOS BAESA, thru her personal guardian FRANCISCA O. BASCOS, FE
O. ICO, in her behalf and in behalf of her minor children, namely ERWIN, OLIVE, EDMUNDO and SHARON ICO, Respondents.

Efren N. Ambrosio & Associates for petitioner PNEI.

Emiliano S. Micu for Respondents.

SYLLABUS

1. CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE; WHEN APPLICABLE. — The doctrine of last clear chance applies only in a
situation where the defendant, having the last fair chance to avoid the impending harm and failed to do so, becomes liable for all the
consequences of the accident notwithstanding the prior negligence of the plaintiff.

2. ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE. — In order that the doctrine of last clear chance may be applied, it must
be shown that the person who allegedly had the last opportunity to avert the accident was aware of the existence of the peril or
with exercise of due care should have been aware of it.

3. ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING INSTANTANEOUSLY OR BY AVAILABLE MEANS. — This doctrine of last chance
has no application to a case where a person is to act instantaneously, and if the injury cannot be avoided by using all means available
after the peril is or should have been discovered.

4. ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE ENTERING A THROUGH HIGHWAY OR A STOP INTERSECTION. — Section 43 (c),
Article III, Chapter IV of Republic Act No. 1436 cannot apply to case a bar where at the time of the accident, the jeepney had already
crossed the intersection.

5. ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON THE EMPLOYER. — A finding of negligence on the part of the driver establishes
a presumption that the employer has been negligent and the latter has the burden of proof that it has exercised due negligence not
only in the selection of its employees but also in adequately supervising their work.

6. ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT CLAIM FOR DAMAGES. — Plaintiff’s failure to present documentary evidence
to support their claim for damages for loss of earning capacity of the deceased victim does not bar recovery of the damages, if such
loss may be based sufficiently on their testimonies.

7. ID.; ID.; INDEMNITY FIXED AT P30,000. — The indemnity for the death of a person was fixed by this Court at (P30,000.00).

In this Petition, Pantranco North Express Inc. (PANTRANCO), asks the Court to review the decision of the Court of Appeals in CA-G.R.
No. 05494-95 which affirmed the decisions of the Court of First Instance of Rosales, Pangasinan in Civil Case No. 561-R and Civil Case
No. 589-R wherein PANTRANCO was ordered to pay damages and attorney’s fees to herein private respondents.chanrobles virtual
lawlibrary

DECISION

The pertinent fact are as follows:chanrob1es virtual 1aw library

At about 7:00 o’clock in the morning of June 12, 1981, the spouses Ceasar and Marilyn Baesa and their children Harold Jim,
Marcelino and Maricar, together with spouses David Ico and Fe O. Ico with their son Erwin Ico and seven other persons, were aboard
a passenger jeepney on their way to a picnic at Malalam River, Ilagan, Isabela, to celebrate the fifth wedding anniversary of Ceasar
and Marilyn Baesa.

The group, numbering fifteen (15) persons, rode in the passenger jeepney driven by David Ico, who was also the registered owner
thereof. From Ilagan, Isabela, they proceeded to Barrio Capayacan to deliver some viands to one Mrs. Bascos and thenceforth to San
Felipe, taking the highway going to Malalam River. Upon reaching the highway, the jeepney turned right and proceeded to Malalam
River at a speed of about 20 kph. While they were proceeding towards Malalam River, a speeding PANTRANCO bus from Aparri, on
its regular route to Manila, encroached on the jeepney’s lane while negotiating a curve, and collided with it.

As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa and their children, Harold Jim and Marcelino Baesa,
died while the rest of the passengers suffered injuries. The jeepney was extensively damaged. After the accident the driver of the
PANTRANCO Bus, Ambrosio Ramirez, boarded a car and proceeded to Santiago, Isabela. From that time on up to the present,
Ramirez has never been seen and has apparently remained in hiding.

All the victims and/or their surviving heirs except herein private respondents settled the case amicably under the "No Fault"
insurance coverage of PANTRANCO.

Maricar Baesa through her guardian Francisca O. Bascos and Fe O. Ico for herself and for her minor children, filed separate actions
for damages arising from quasi-delict against PANTRANCO, respectively docketed as Civil Case No. 561-R and 589-R of the Court of
First Instance of Pangasinan.

In its answer, PANTRANCO, aside from pointing to the late David Ico’s alleged negligence as the proximate cause of the accident,
invoked the defense of due diligence in the selection and supervision of its driver, Ambrosio Ramirez.chanroblesvirtualawlibrary

On July 3, 1984, the CFI of Pangasinan rendered a decision against PANTRANCO awarding the total amount of Two Million Three
Hundred Four Thousand Six Hundred Forty-Seven (P2,304,647.00) as damages, plus 10% thereof as attorney’s fees and costs to
Maricar Baesa in Civil Case No. 561-R, and the total amount of Six Hundred Fifty Two Thousand Six Hundred Seventy-Two Pesos
(P652,672.00) as damages, plus 10% thereof as attorney’s fees and costs to Fe Ico and her children in Civil Case No. 589-R. On
appeal, the cases were consolidated and the Court of Appeals modified the decision of the trial court by ordering PANTRANCO to
pay the total amount of One Million One Hundred Eighty-Nine Thousand Nine Hundred Twenty Seven Pesos (P1,189,927.00) as
damages, plus Twenty Thousand Pesos (P20,000.00) as attorney’s fees to Maricar Baesa, and the total amount of Three Hundred
Forty-Four Thousand Pesos (P344,000.00) plus Ten Thousand Pesos (P10,000.00) as attorney’s fees to Fe Ico and her children, and to
pay the costs in both cases. The dispositive portion of the assailed decision reads as follows:chanrob1es virtual 1aw library

WHEREFORE, the decision appealed from is hereby modified by ordering the defendant PANTRANCO North Express, Inc. to
pay:chanrob1es virtual 1aw library

I. The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the following damages:chanrob1es virtual 1aw library

A) As compensatory damages for the death of Ceasar Baesa — P30,000.00;

B) As compensatory damages for the death of Marilyn Baesa — P30,000.00;

C) As compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa — P30,000.00;

D) For the loss of earnings of Ceasar Baesa — P630,000.00;

E) For the loss of earnings of Marilyn Bascos Baesa — P375,000.00;

F) For the burial expenses of the deceased Ceasar and Marilyn Baesa — P41,200.00;

G) For hospitalization expenses of Maricar Baesa — P3,727.00;

H) As moral damages — P50,000.00;

I) As attorney’s fees — P20,000.00;

II. The plaintiffs in Civil Case No. 589-R, the following damages:chanrob1es virtual 1aw library

A) As compensatory damages for the death of David Ico — P30,000.00;

B) For loss of earning capacity of David Ico — P252,000.00;

C) As moral damages for the death of David Ico and the injury of Fe Ico — P30,000.00

D) As payment for the jeepney — P20,000.00;

E) For the hospitalization of Fe Ico — P12,000.000;

F) And for attorney’s fees — P10,000.00;

and to pay the costs in both cases.

The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in Civil Case No. 561-R, and the medical expenses in the sum of
P3,273.55, should be deducted from the award in her favor.chanrobles virtual lawlibrary

All the foregoing amounts herein awarded except the costs shall earn interest at the legal rate from date of this decision until fully
paid. [CA Decision, pp. 14-15; Rollo, pp. 57-58.]

PANTRANCO filed a motion for reconsideration of the Court of Appeal’s decision, but on June 26, 1987, it denied the same for lack of
merit. PANTRANCO then filed the instant petition for review.

Petitioner faults the Court of Appeals for not applying the doctrine of the "last clear chance" against the jeepney driver. Petitioner
claims that under the circumstances of the case, it was the driver of the passenger jeepney who had the last clear chance to avoid
the collision and was therefore negligent in failing to utilize with reasonable care and competence his then existing opportunity to
avoid the harm.
The doctrine of the last clear chance was defined by this Court in the case of Ong v. Metropolitan Water District, 104 Phil. 397
(1958), in this wise:chanrob1es virtual 1aw library

The doctrine of the last clear chance simply, means that the negligence of a claimant does not preclude a recovery for the negligence
of defendant where it appears that the latter, by exercising reasonable care and prudence, might have avoided injurious
consequences to claimant notwithstanding his negligence.

The doctrine applies only in a situation where the plaintiff was guilty of prior or antecedent negligence but the defendant, who had
the last fair chance to avoid the impending harm and failed to do so, is made liable for all the consequences of the accident
notwithstanding the prior negligence of the plaintiff [Picart v. Smith, 37 Phil. 809 (1918); Glan People’s Lumber and Hardware, Et. Al.
v. Intermediate Appellate Court, Cecilia Alferez Vda. de Calibo, Et Al., G.R. No. 70493, May 18, 1989]. The subsequent negligence of
the defendant in failing to exercise ordinary care to avoid injury to plaintiff becomes the immediate or proximate cause of the
accident which intervenes between the accident and the more remote negligence of the plaintiff, thus making the defendant liable
to the plaintiff [Picart v. Smith, supra].

Generally, the last clear chance doctrine is invoked for the purpose of making a defendant liable to a plaintiff who was guilty of prior
or antecedent negligence, although it may also be raised as a defense to defeat claim for damages.chanrobles lawlibrary : rednad

To avoid liability for the negligence of its driver, petitioner claims that the original negligence of its driver was not the proximate
cause of the accident and that the sole proximate cause was the supervening negligence of the jeepney driver David Ico in failing to
avoid the accident. It is petitioner’s position that even assuming arguendo, that the bus encroached into the lane of the jeepney, the
driver of the latter could have swerved the jeepney towards the spacious dirt shoulder on his right without danger to himself or his
passengers.

The above contention of petitioner is manifestly devoid of merit.

Contrary to the petitioner’s contention, the doctrine of "last clear chance" finds no application in this case. For the doctrine to be
applicable, it is necessary to show that the person who allegedly had the last opportunity to avert the accident was aware of the
existence of the peril or should, with exercise of due care, have been aware of it. One cannot be expected to avoid an accident or
injury if he does not know or could not have known the existence of the peril. In this case, there is nothing to show that the jeepney
driver David Ico knew of the impending danger. When he saw at a distance that the approaching bus was encroaching on his lane, he
did not immediately swerve the jeepney to the dirt shoulder on his right since he must have assumed that the bus driver will return
the bus to its own lane upon seeing the jeepney approaching from the opposite direction. As held by this Court in the case of Vda.
De Bonifacio v. BLTB, G.R. No. L-26810, August 31, 1970, 34 SCRA 618, a motorist who is properly proceeding on his own side of the
highway is generally entitled to assume that an approaching vehicle coming towards him on the wrong side, will return to his proper
lane of traffic. There was nothing to indicate to David Ico that the bus could not return to its own lane or was prevented from
returning to the proper lane by anything beyond the control of its driver. Leo Marantan, an alternate driver of the Pantranco bus
who was seated beside the driver Ramirez at the time of the accident, testified that Ramirez had no choice but to swerve the
steering wheel to the left and encroach on the jeepney’s lane because there was a steep precipice on the right [CA Decision, p. 2;
Rollo, p. 45]. However, this is belied by the evidence on record which clearly shows that there was enough space to swerve the bus
back to its own lane without any danger [CA Decision, p. 7; Rollo, p. 50].

Moreover, both the trial court and the Court of Appeals found that at the time of the accident the Pantranco bus was speeding
towards Manila [CA Decision, p. 2; Rollo, p. 45]. By the time David Ico must have realized that the bus was not returning to its own
lane, it was already too late to swerve the jeepney to his right to prevent an accident. The speed at which the approaching bus was
running prevented David Ico from swerving the jeepney to the right shoulder of the road in time to avoid the collision. Thus, even
assuming that the jeepney driver perceived the danger a few seconds before the actual collision, he had no opportunity to avoid it.
This Court has held that the last clear chance doctrine "can never apply where the party charged is required to act instantaneously,
and if the injury cannot be avoided by the application of all means at hand after the peril is or should have been discovered" [Ong v.
Metropolitan Water District, supra].chanrobles.com : virtual law library

Petitioner likewise insists that David Ico was negligent in failing to observe Section 43 (c), Article III Chapter IV of Republic Act No.
4136 * which provides that the driver of a vehicle entering a through highway or a stop intersection shall yield the right of way to all
vehicles approaching in either direction on such through highway.

Petitioner’s misplaced reliance on the aforesaid law is readily apparent in this case. The cited law itself provides that it applies only
to vehicles entering a through highway or a stop intersection. At the time of the accident, the jeepney had already crossed the
intersection and was on its way to Malalam River. Petitioner itself cited Fe Ico’s testimony that the accident occurred after the
jeepney had travelled a distance of about two (2) meters from the point of intersection [Petition p. 10; Rollo, p. 27]. In fact, even the
witness for the petitioner, Leo Marantan, testified that both vehicles were coming from opposite directions [CA Decision, p. 7; Rollo,
p. 50], clearly indicating that the jeepney had already crossed the intersection.

Considering the foregoing, the Court finds that the negligence of petitioner’s driver in encroaching into the lane of the incoming
jeepney and in failing to return the bus to its own lane immediately upon seeing the jeepney coming from the opposite direction was
the sole and proximate cause of the accident without which the collision would not have occurred. There was no supervening or
intervening negligence on the part of the jeepney driver which would have made the prior negligence of petitioner’s driver a mere
remote cause of the accident.

II
On the issue of its liability as an employer, petitioner claims that it had observed the diligence of a good father of a family to prevent
damage, conformably to the last paragraph of Article 2180 of the Civil Code. Petitioner adduced evidence to show that in hiring its
drivers, the latter are required to have professional driver’s license and police clearance. The drivers must also pass written
examinations, interviews and practical driving tests, and are required to undergo a six-month training period. Rodrigo San Pedro,
petitioner’s Training Coordinator, testified on petitioner’s policy of conducting regular and continuing training programs and safety
seminars for its drivers, conductors, inspectors and supervisors at a frequency rate of at least two (2) seminars a month.

On this point, the Court quotes with approval the following findings of the trial court which was adopted by the Court of Appeals in
its challenged decision:chanrob1es virtual 1aw library

When an injury is caused by the negligence of an employee, there instantly arises a presumption that the employer has been
negligent either in the selection of his employees or in the supervision over their acts. Although this presumption is only a disputable
presumption which could be overcome by proof of diligence of a good father of a family, this Court believes that the evidence
submitted by the defendant to show that it exercised the diligence of a good father of a family in the case of Ramirez, as a company
driver is far from sufficient. No support evidence has been adduced. The professional driver’s license of Ramirez has not been
produced. There is no proof that he is between 25 to 38 years old. There is also no proof as to his educational attainment, his age,
his weight and the fact that he is married or not. Neither are the result of the written test, psychological and physical test, among
other tests, have been submitted in evidence [sic]. His NBI or police clearances and clearances from previous employment were not
marked in evidence. No evidence was presented that Ramirez actually and really attended the seminars. Vital evidence should have
been the certificate of attendance or certificate of participation or evidence of such participation like a logbook signed by the
trainees when they attended the seminars. If such records are not available, the testimony of the classmates that Ramirez was their
classmate in said seminar (should have been presented) [CA Decision, pp. 8-9; Rollo, pp. 51-52].chanrobles law library

Petitioner contends that the fact that Ambrosio Ramirez was employed and remained as its driver only means that he underwent
the same rigid selection process and was subjected to the same strict supervision imposed by petitioner on all applicants and
employees. It is argued by the petitioner that unless proven otherwise, it is presumed that petitioner observed its usual recruitment
procedure and company polices on safety and efficiency [Petition, p. 20; Rollo, p. 37].

The Court finds the above contention unmeritorious.

The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to the presumption of negligence on the part of
petitioner and the burden of proving that it exercised due diligence not only in the selection of its employees but also in adequately
supervising their work rests with the petitioner [Lilius v. Manila Railroad Company, 59 Phil. 758 (1934); Umali v. Bacani, G.R. No. L-
40570, June 30, 1976, 69 SCRA 623]. Contrary to petitioner’s claim, there is no presumption that the usual recruitment procedures
and safety standards were observed. The mere issuance of rules and regulations and the formulation of various company policies on
safety, without showing that they are being complied with, are not sufficient to exempt petitioner from liability arising from the
negligence of its employee. It is incumbent upon petitioner to show that in recruiting and employing the erring driver, the
recruitment procedures and company policies on efficiency and safety were followed. Petitioner failed to do this. Hence, the Court
finds no cogent reason to disturb the finding of both the trial court and the Court of Appeals that the evidence presented by the
petitioner, which consists mainly of the uncorroborated testimony of its Training Coordinator, is insufficient to overcome the
presumption of negligence against petitioner.cralawnad

III

On the question of damages, petitioner claims that the Court of Appeals erred in fixing the damages for the loss of earning capacity
of the deceased victims. Petitioner assails respondent court’s findings because no documentary evidence in support thereof, such as
income tax returns, pay-rolls, pay slips or invoices obtained in the usual course of business, were presented [Petition, p. 22; Rollo, p.
39]. Petitioner argues that the "bare and self-serving testimonies of the wife of the deceased David Ico and the mother of the
deceased Marilyn Baesa . . . have no probative value to sustain in law the Court of Appeals’ conclusion on the respective earnings of
the deceased victims." [Petition, pp. 21-22; Rollo, pp. 38-39.] It is petitioner’s contention that the evidence presented by the private
respondent does not meet the requirements of clear and satisfactory evidence to prove actual and compensatory damages.

The Court finds that the Court of Appeals committed no reversible error in fixing the amount of damages for the loss of earning
capacity of the deceased victims. While it is true that private respondents should have presented documentary evidence to support
their claim for damages for loss of earning capacity of the deceased victims, the absence thereof does not necessarily bar the
recovery of the damages in question. The testimony of Fe Ico and Francisca Bascos as to the earning capacity of David Ico, and the
spouses Baesa, respectively, are sufficient to establish a basis from which the court can make a fair and reasonable estimate of the
damages for the loss of earning capacity of the three deceased victims. Moreover, in fixing the damages for loss of earning capacity
of a deceased victim, the court can consider the nature of his occupation, his educational attainment and the state of his health at
the time of death.

In the instant case, David Ico was thirty eight (38) years old at the time of his death in 1981 and was driving his own passenger
jeepney. The spouses Ceasar and Marilyn Baesa were both thirty (30) years old at the time of their death. Ceasar Baesa was a
commerce degree holder and the proprietor of the Cauayan Press, printer of the Cauayan Valley Newspaper and the Valley Times at
Cauayan, Isabela. Marilyn Baesa graduated as a nurse in 1976 and at the time of her death, was the company nurse, personnel
manager, treasurer and cashier of the Ilagan Press at Ilagan, Isabela. Respondent court duly considered these factors, together with
the uncontradicted testimonies of Fe Ico and Francisca Bascos, in fixing the amount of damages for the loss of earning capacity of
David Ico and the spouses Baesa.chanrobles.com:cralaw:red
However, it should be pointed out that the Court of Appeals committed error in fixing the compensatory damages for the death of
Harold Jim Baesa and Marcelino Baesa. Respondent court awarded to plaintiff (private respondent) Maricar Baesa Thirty Thousand
Pesos (P30,000.00) as "compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa." [CA Decision, p. 14; Rollo,
57]. In other words, the Court of Appeals awarded only Fifteen Thousand Pesos (P15,000.00) as indemnity for the death of Harold
Jim Baesa and another Fifteen Thousand Pesos (P15,000.00) for the death of Marcelino Baesa. This is clearly erroneous. In the case
of People v. de la Fuente, G.R. Nos. 63251-52, December 29, 1983, 126 SCRA 518, the indemnity for the death of a person was fixed
by this Court at Thirty Thousand Pesos (P30,000.00). Plaintiff Maricar Baesa should therefore be awarded Sixty Thousand Pesos
(P60,000.00) as indemnity for the death of her brothers, Harold Jim Baesa and Marcelino Baesa or Thirty Thousand Pesos
(P30,000.00) for the death of each brother.

The other items of damages awarded by respondent court which were not challenged by the petitioner are hereby affirmed.

WHEREFORE, premises considered, the petition is DENIED, and the decision of respondent Court of Appeals is hereby AFFIRMED
with the modification that the amount of compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa are
increased to Thirty Thousand Pesos (P30,000.00) each.chanrobles law libra

SO ORDERED.
G.R. No. 97626 March 14, 1997

PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE COMMERCIAL INTERNATIONAL BANK, ROGELIO LACSON, DIGNA
DE LEON, MARIA ANGELITA PASCUAL, Et Al., Petitioners, v. THE COURT OF APPEALS, ROMMEL’S MARKETING CORP., represented
by ROMEO LIPANA, its President & General Manager, Respondents.

Carpio Villarza & Cruz, for Petitioners.

Roberto C . Bermejo for Private Respondents.

SYLLABUS

1. CIVIL LAW; ELEMENTS OF QUASI-DELICT. — There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b)
fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and
effect between the fault or negligence of the defendant and the damages incurred by the plaintiff.

2. ID,; ID.; NEGLIGENCE; DEFINED AND CONSTRUED. — Negligence is the omission to do something which a reasonable man, guided
by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would do. The seventy-eight (78)-year-old, yet still relevant, case of Picart v. Smith, 37 Phil. 809 [1918],
provides the test by which to determine the existence of negligence in a particular case which 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.

3. ID.; ID.; ID.; WHEN PRESENT; CASE AT BAR. — The fact that the duplicate slip was not compulsorily required by the bank in
accepting deposits should not relieve the petitioner bank of responsibility. The odd circumstance alone that such duplicate copy
lacked one vital information — that of the name of the account holder — should have already put Ms. Mabayad on guard. Rather
than readily validating the incomplete duplicate copy, she should have proceeded more cautiously by being more probing as to the
true reason why the name of the account holder in the duplicate slip was left blank while that in the original was filled up. She
should not have been so naive in accepting hook, line and sinker the too shallow excuse of Ms. Irene Yabut to the effect that since
the duplicate copy was only for her personal record, she would simply fill up the blank space later on. A "reasonable man of ordinary
prudence" would not have given credence to such explanation and would have insisted that the space left blank be filled up as a
condition for validation. It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner bank in the
selection and supervision of its bank teller, which was the proximate cause of the loss suffered by the private respondent, and not
the latter’s act of entrusting cash to a dishonest employee, as insisted by the petitioners.

4. ID.; DAMAGES; PROXIMATE CAUSE; DEFINED; CASE AT BAR. — Proximate cause is determined on the facts of each case upon
mixed considerations of logic, common sense, policy and precedent. Vda. de Bataclan v. Medina, 102 Phil. 181, 186 [1957],
reiterated in the case of Bank of the Phil. Islands v. Court of Appeals, 216 SCRA 51, 75 [1992], defines proximate cause as "that
cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without
which the result would not have occurred. . . ." In this case, absent the act of Ms. Mabayad in negligently validating the incomplete
duplicate copy of the deposit slip, Ms. Irene Yabut would not have the facility with which to perpetrate her fraudulent scheme with
impunity.

5. ID.; ID.; ID.; DOCTRINE OF "LAST CLEAR CHANCE" ; CONSTRUED. — Under the doctrine of "last clear chance" (also referred to, at
times as "supervening negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This doctrine, in essence,
states that where both parties are negligent, but the negligent act of one is appreciably later in time than that of the other, or when
it is impossible to determine whose fault or negligence should be attributed to the incident, the one who had the last clear
opportunity to avoid the impending harm and failed to do so is chargeable with the consequences thereof. Stated differently, the
rule would also mean that an antecedent negligence of a person does not preclude the recovery of damages for the supervening
negligence of, or bar a defense against liability sought by another, if the latter, who had the lastfair chance, could have avoided the
impending harm by the exercise of due diligence.

6. ID.; ID.; MORE THAN THAT OF A GOOD FATHER OF A FAMILY; DEGREE OF DILIGENCE REQUIRED FROM A BANK. — In the case of
banks, the degree of diligence required is more than that of a good father of a family. Considering the fiduciary nature of their
relationship with their depositors, banks are duty bound to treat the accounts of their clients with the highest degree of care. As
elucidated in Simex International (Manila), Inc. v. Court of Appeals, 183 SCRA 360, 367 [1990], in every case, the depositor expects
the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The
bank must record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if
the account is to reflect at any given time the amount of money the depositor can dispose as he sees fit, confident that the bank will
deliver it as and to whomever he directs. A blunder on the part of the bank, such as the failure to duly credit him his deposits as soon
as they are made, can cause the depositor not a little embarrassment if not financial loss and perhaps even civil and criminal
litigation.

7. ID.; ID.; AWARD THEREOF; WHEN MITIGATED BY CONTRIBUTORY NEGLIGENCE; CASE AT BAR. — The damage would definitely not
have ballooned to such an amount if only RMC, particularly Romeo Lipana, had exercised even a little vigilance in their financial
affairs. This omission by RMC amounts to contributory negligence which shall mitigate the damages that may be awarded to the
private respondent under Article 2179 of the New Civil Code, to wit: ". . . When the plaintiff’s own negligence was the immediate
and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and
proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate
the damages to be awarded." In view of this, we believe that the demands of substantial justice are satisfied by allocating the
damage on a 60-40 ratio. Thus, 40% of the damage awarded by the respondent appellate court, except the award of P25,000.00
attorney’s fees, shall be borne by private respondent RMC; only the balance of 60% needs to be paid by the petitioners. The award
of attorney’s fees shall be borne exclusively by the petitioners.

PADILLA, J., dissenting:chanrob1es virtual 1aw library

1. CIVIL LAW; DAMAGES; DOCTRINE OF "LAST CLEAR CHANCE" ; CONSTRUED. — Coming to the doctrine of "last clear chance" it is
Justice Padilla’s considered view that the doctrine assumes that the negligence of the defendant was subsequent to the negligence
of the plaintiff and the same must be the proximate cause of the injury. In short, there must be a last and a clear chance, not a last
possible chance, to avoid the accident or injury. It must have been a chance as would have enabled a reasonably prudent man in like
position to have acted effectively to avoid the injury and the resulting damage to himself.

2. ID.; ID.; ID.; APPLICABLE WHEN THE PRIVATE RESPONDENT FAILED TO EXAMINE ITS MONTHLY BANK STATEMENT. — In the case at
bar, the bank was not remiss in its duty of sending monthly bank statements to private respondent RMC so that any error or
discrepancy in the entries therein could be brought to the bank’s attention at the earliest opportunity. Private respondent failed to
examine these bank statements not because it was prevented by some cause in not doing so, but because it was purposely negligent
as it admitted that it does not normally check bank statements given by banks. It was private respondent who had the last and clear
chance to prevent any further misappropriation by Yabut had it only reviewed the status of its current accounts on the bank
statement sent to it monthly or regularly. Since a sizable amount of cash was entrusted to Yabut, private respondent should, at least,
have taken care of its concerns, as what the law presumes. Its negligence, therefore, is not contributory but the immediate and
proximate cause of its injury.

DECISION

Challenged in this petition for review is the Decision dated February 28, 1991 1 rendered by public respondent Court of Appeals
which affirmed the Decision dated November 15, 1985 of the Regional Trial Court, National Capital Judicial Region, Branch CLX (160),
Pasig City, in Civil Case No. 27288 entitled Rommel’s Marketing Corporation, etc. v. Philippine Bank of Commerce, now absorbed by
Philippine Commercial and Industrial Bank.

The case stemmed from a complaint filed by the private respondent Rommel’s Marketing Corporation (RMC for brevity),
represented by its President and General Manager Romeo Lipana, to recover from the former Philippine Bank of Commerce (PBC for
brevity), now absorbed by the Philippine Commercial International Bank, the sum of P304,979.74 representing various deposits it
had made in its current account with said bank but which were not credited to its account, and were instead deposited to the
account of one Bienvenido Cotas, allegedly due to the gross and inexcusable negligence of the petitioner bank.

RMC maintained two (2) separate current accounts, Current Account Nos. 53-01980-3 and 53-01748-7, with the Pasig Branch of PBC
in connection with its business of selling appliances.

In the ordinary and usual course of banking operations, current account deposits are accepted by the bank on the basis of deposit
slips prepared and signed by the depositor, or the latter’s agent or representative, who indicates therein the current account
number to which the deposit is to be credited, the name of the depositor or current account holder, the date of the deposit, and the
amount of the deposit either in cash or checks. The deposit slip has an upper portion or stub, which is detached and given to the
depositor or his agent; the lower portion is retained by the bank. In some instances, however, the deposit slips are prepared in
duplicate by the depositor. The original of the deposit slip is retained by the bank, while the, duplicate copy is returned or given to
the depositor.

From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana claims to have entrusted RMC funds in the form of cash totalling
P304,979.74 to his secretary, Irene Yabut, for the purpose of depositing said funds in the current accounts of RMC with PBC. It
turned out, however, that these deposits, on all occasions, were not credited to RMC’s account but were instead deposited to
Account No. 53-01734-7 of Yabut’s husband, Bienvenido Cotas who likewise maintains an account with the same bank. During this
period, petitioner bank had, however, been regularly furnishing private respondent with monthly statements showing its current
accounts balances. Unfortunately, it had never been the practice of Romeo Lipana to check these monthly statements of account
reposing complete trust and confidence on petitioner bank.

Irene Yabut’s modus operandi is far from complicated. She would accomplish two (2) copies of the deposit slip, an original and a
duplicate. The original showed the name of her husband as depositor and his current account number. On the duplicate copy was
written the account number of her husband but the name of the account holder was left blank. PBC’s teller, Azucena Mabayad,
would, however, validate and stamp both the original and the duplicate of these deposit slips retaining only the original copy despite
the lack of information on the duplicate slip. The second copy was kept by Irene Yabut allegedly for record purposes. After
validation, Yabut would then fill up the name of RMC in the space left blank in the duplicate copy and change the account number
written thereon, which is that of her husband’s, and make it appear to be RMC’s account number, i.e., C.A. No. 53-01980-3. With the
daily remittance records also prepared by Ms. Yabut and submitted to private respondent RMC together with the validated duplicate
slips with the latter’s name and account number, she made her company believe that all the while the amounts she deposited were
being credited to its account when, in truth and in fact, they were being deposited by her and credited by the petitioner bank in the
account of Cotas. This went on in a span of more than one (1) year without private respondent’s knowledge.
Upon discovery of the loss of its funds, RMC demanded from petitioner bank the return of its money, but as its demand went
unheeded, it filed a collection suit before the Regional Trial Court of Pasig, Branch 160. The trial court found petitioner bank
negligent and ruled as follows:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered sentencing defendant Philippine Bank of Commerce, now absorbed by defendant
Philippine Commercial & Industrial Bank, and defendant Azucena Mabayad to pay the plaintiff, jointly and severally, and without
prejudice to any criminal action which may be instituted if found warranted:chanrob1es virtual 1aw library

1. The sum of P304,979.72, representing plaintiff’s lost deposit, plus interest thereon at the legal rate from the filing of the
complaint;

2. A sum equivalent to 14% thereof, as exemplary damages;

3. A sum equivalent to 25% of the total amount due, as and for attorney’s fees; and

4. Costs.

Defendants’ counterclaim is hereby dismissed for lack of merit." 2

On appeal, the appellate court affirmed the foregoing decision with modifications, viz:jgc:chanrobles.com.ph

"WHEREFORE, the decision appealed from herein is MODIFIED in the sense that the awards of exemplary damages and attorney’s
fees specified therein are eliminated and instead, appellants are ordered to pay plaintiff, in addition to the principal sum of
P304,979.74 representing plaintiff’s lost deposit plus legal interest thereon from the filing of the complaint, P25,000.00 attorney’s
fees and costs in the lower court as well as in this Court." 3

Hence, this petition anchored on the following grounds:chanrob1es virtual 1aw library

1) The proximate cause of the loss is the negligence of respondent Rommel Marketing Corporation and Romeo Lipana in entrusting
cash to a dishonest employee.

2) The failure of respondent Rommel Marketing Corporation to cross-check the bank’s statements of account with its own records
during the entire period of more than one (1) year is the proximate cause of the commission of subsequent frauds and
misappropriation committed by Ms. Irene Yabut.

3) The duplicate copies of the deposit slips presented by respondent Rommel Marketing Corporation are falsified and are not proof
that the amounts appearing thereon were deposited to respondent Rommel Marketing Corporation’s account with the bank.

4) The duplicate copies of the deposit slips were used by Ms. Irene Yabut to cover up her fraudulent acts against respondent
Rommel Marketing Corporation, and not as records of deposits she made with the bank. 4

The petition has no merit.

Simply put, the main issue posited before us is: What is the proximate cause of the loss, to the tune of P304,979.74, suffered by the
private respondent RMC — petitioner bank’s negligence or that of private respondent’s?

Petitioners submit that the proximate cause of the loss is the negligence of respondent RMC and Romeo Lipana in entrusting cash to
a dishonest employee in the person of Ms. Irene Yabut. 5 According to them, it was impossible for the bank to know that the money
deposited by Ms. Irene Yabut belong to RMC; neither was the bank forewarned by RMC that Yabut will be depositing cash to its
account. Thus, it was impossible for the bank to know the fraudulent design of Yabut considering that her husband, Bienvenido
Cotas, also maintained an account with the bank For the bank to inquire into the ownership of the cash deposited by Ms. Irene
Yabut would be irregular. Otherwise stated, it was RMC’s negligence in entrusting cash to a dishonest employee which provided Ms.
Irene Yabut the opportunity to defraud RMC. 6

Private respondent, on the other hand, maintains that the proximate cause of the loss was the negligent act of the bank, thru its
teller Ms. Azucena Mabayad, in validating the deposit slips, both original and duplicate, presented by Ms. Yabut to Ms. Mabayad,
notwithstanding the fact that one of the deposit slips was not completely accomplished.

We sustain the private Respondent.

Our law on quasi-delicts states:jgc:chanrobles.com.ph

"Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter."cralaw virtua1aw library

There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some
other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the
defendant and the damages incurred by the plaintiff. 7
In the case at bench, there is no dispute as to the damage suffered by the private respondent (plaintiff in the trial court) RMC in the
amount of P304,979.74. It is in ascribing fault or negligence which caused the damage where the parties point to each other as the
culprit.

Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would do. The seventy-eight
(78)-year-old, yet still relevant, case of Picart v. Smith, 8 provides the test by which to determine the existence of negligence in a
particular case which 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.

Applying the above test, it appears that the bank’s teller, Ms. Azucena Mabayad, was negligent in validating, officially stamping and
signing all the deposit slips prepared and presented by Ms. Yabut, despite the glaring fact that the duplicate copy was not
completely accomplished contrary to the self-imposed procedure of the bank with respect to the proper validation of deposit slips,
original or duplicate, as testified to by Ms. Mabayad herself, thus:jgc:chanrobles.com.ph

"Q: Now, as teller of PCIB, Pasig Branch, will you please tell us Mrs. Mabayad your important duties and functions?

A: I accept current and savings deposits from depositors and encashments.

Q: Now in the handling of current account deposits of bank clients, could you tell us the procedure you follow?

A: The client or depositor or the authorized representative prepares a deposit slip by filling up the deposit slip with the name, the
account number, the date, the cash breakdown, if it is deposited for cash, and the check number, the amount and then he signs the
deposit slip.

Q: Now, how many deposit slips do you normally require in accomplishing current account deposit, Mrs. Mabayad?

A: The bank requires only one copy of the deposit although some of our clients prepare the deposit slip in duplicate.

Q: Now in accomplishing current account deposits from your clients, what do you issue to the depositor to evidence the deposit
made?

A: We issue or we give to the clients the depositor’s stub as a receipt of the deposit.

Q: And who prepares the deposit slip?

A: The depositor or the authorized representative sir.

Q: Where does the depositor’s stub comes (sic) from Mrs. Mabayad, is it with the deposit slip?

A: The depositor’s stub is connected with the deposit slip or the bank’s copy. In a deposit slip, the upper portion is the depositor’s
stub and the lower portion is the bank’s copy, and you can detach the bank’s copy from the depositor’s stub by tearing it sir.

Q: Now what do you do upon presentment of the deposit slip by the depositor or the depositor’s authorized representative?

A: We see to it that the deposit slip 9 is properly accomplished and then we count the money and then we tally it with the deposit
slip sir.

Q: Now is the depositor’s stub which you issued to your clients validated?

A: Yes, sir." 10 [Emphasis ours.]

Clearly, Ms. Mabayad failed to observe this very important procedure. The fact that the duplicate slip was not compulsorily required
by the bank in accepting deposits should not relieve the petitioner bank of responsibility. The odd circumstance alone that such
duplicate copy lacked one vital information — that of the name of the account holder — should have already put Ms. Mabayad on
guard. Rather than readily validating the incomplete duplicate copy, she should have proceeded more cautiously by being more
probing as to the true reason why the name of the account holder in the duplicate slip was left blank while that in the original was
filled up. She should not have been so naive in accepting hook, line and sinker the too shallow excuse of Ms. Irene Yabut to the
effect that since the duplicate copy was only for her personal record, she would simply fill up the blank space later on. 11 A
"reasonable man of ordinary prudence" 12 would not have given credence to such explanation and would have insisted that the
space left blank be filled up as a condition for validation. Unfortunately, this was not how bank teller Mabayad proceeded thus
resulting in huge losses to the private Respondent.

Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself in its lackadaisical selection and
supervision of Ms. Mabayad. This was exemplified in the testimony of Mr. Romeo Bonifacio, then Manager of the Pasig Branch of
the petitioner bank and now its Vice-President, to the effect that, while he ordered the investigation of the incident, he never came
to know that blank deposit slips were validated in total disregard of the bank’s validation procedures, viz:jgc:chanrobles.com.ph

"Q: Did he ever tell you that one of your cashiers affixed the stamp mark of the bank on the deposit slips and they validated the
same with the machine, the fact that those deposit slips were unfilled up, is there any report similar to that?

A: No, it was not the cashier but the teller.

Q: The teller validated the blank deposit slip?

A: No it was not reported.

Q: You did not know that any one in the bank tellers or cashiers validated the blank deposit slip?

A: I am not aware of that.

Q: It is only now that you are aware of that?

A: Yes, sir." 13

Prescinding from the above, public respondent Court of Appeals aptly observed:jgc:chanrobles.com.ph

"x       x       x

It was in fact only when he testified in this case in February, 1983, or after the lapse of more than seven (7) years counted from the
period when the funds in question were deposited in plaintiffs accounts (May, 1975 to July, 1976) that bank manager Bonifacio
admittedly became aware of the practice of his teller Mabayad of validating blank deposit slips. Undoubtedly, this is gross, wanton,
and inexcusable negligence in the appellant bank’s supervision of its employees." 14

It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner bank in the selection and supervision of
its bank teller, which was the proximate cause of the loss suffered by the private respondent, and not the latter’s act of entrusting
cash to a dishonest employee, as insisted by the petitioners.

Proximate cause is determined on the facts of each case upon mixed considerations of logic, common sense, policy and precedent.
15 Vda. de Bataclan v. Medina, 16 reiterated in the case of Bank of the Phil. Islands v. Court of Appeals, 17 defines proximate cause
as "that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and
without which the result would not have occurred. . . ." In this case, absent the act of Ms. Mabayad in negligently validating the
incomplete duplicate copy of the deposit slip, Ms. Irene Yabut would not have the facility with which to perpetrate her fraudulent
scheme with impunity. Apropos, once again, is the pronouncement made by the respondent appellate court, to
wit:jgc:chanrobles.com.ph

". . . Even if Yabut had the fraudulent intention to misappropriate the funds entrusted to her by plaintiff, she would not have been
able to deposit those funds in her husband’s current account, and then make plaintiff believe that it was in the latter’s accounts
wherein she had deposited them, had it not been for bank teller Mabayad’s aforesaid gross and reckless negligence. The latter’s
negligence was thus the proximate, immediate and efficient cause that brought about the loss claimed by plaintiff in this case, and
the failure of plaintiff to discover the same soon enough by failing to scrutinize the monthly statements of account being sent to it by
appellant bank could not have prevented the fraud and misappropriation which Irene Yabut had already completed when she
deposited plaintiff’s money to the account of her husband instead of to the latter’s. accounts." 18

Furthermore, under the doctrine of "last clear chance" (also referred to, at times as "supervening negligence" or as "discovered
peril"), petitioner bank was indeed the culpable party. This doctrine, in essence, states that where both parties are negligent, but the
negligent act of one is appreciably later in time than that of the other, or when it is impossible to determine whose fault or
negligence should be attributed to the incident, the one who had the last clear opportunity to avoid the impending harm and failed
to do so is chargeable with the consequences thereof. 19 Stated differently, the rule would also mean that an antecedent negligence
of a person does not preclude the recovery of damages for the supervening negligence of, or bar a defense against liability sought by
another, if the latter, who had the last fair chance, could have avoided the impending harm by the exercise of due diligence. 20 Here,
assuming that private respondent RMC was negligent in entrusting cash to a dishonest employee, thus providing the latter with the
opportunity to defraud the company, as advanced by the petitioner, yet it cannot be denied that the petitioner bank, thru its teller,
had the last clear opportunity to avert the injury incurred by its client, simply by faithfully observing their self-imposed validation
procedure.

At this juncture, it is worth to discuss the degree of diligence ought to be exercised by banks in dealing with their clients.

The New Civil Code provides:jgc:chanrobles.com.ph

"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 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. (1104a)"
In the case of banks, however, the degree of diligence required is more than that of a good father of a family. Considering the
fiduciary nature of their relationship with their depositors, banks are duty bound to treat the accounts of their clients with the
highest degree of care. 21

As elucidated in Simex International (Manila), Inc. v. Court of Appeals, 22 in every case, the depositor expects the bank to treat his
account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must record
every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to
reflect at any given time the amount of money the depositor can dispose as he sees fit, confident that the bank will deliver it as and
to whomever he directs. A blunder on the part of the bank, such as the failure to duly credit him his deposits as soon as they are
made, can cause the depositor not a little embarrassment if not financial loss and perhaps even civil and criminal litigation.

The point is that as a business affected with public interest and because of the nature of its functions, the bank is under obligation to
treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. In the case
before us, it is apparent that the petitioner bank was remiss in that duty and violated that relationship.cralawnad

Petitioners nevertheless aver that the failure of respondent RMC to cross-check the bank’s statements of account with its own
records during the entire period of more than one (1) year is the proximate cause of the commission of subsequent frauds and
misappropriation committed by Ms. Irene Yabut.

We do not agree.

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

The foregoing notwithstanding, it cannot be denied that, indeed, private respondent was likewise negligent in not checking its
monthly statements of account. Had it done so, the company would have been alerted to the series of frauds being committed
against RMC by its secretary. The damage would definitely not have ballooned to such an amount if only RMC, particularly Romeo
Lipana, had exercised even a little vigilance in their financial affairs. This omission by RMC amounts to contributory negligence which
shall mitigate the damages that may be awarded to the private respondent 23 under Article 2179 of the New Civil Code, to
wit:jgc:chanrobles.com.ph

". . . When the plaintiff’s own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his
negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be awarded."cralaw virtua1aw library

In view of this, we believe that the demands of substantial justice are satisfied by allocating the damage on a 60-40 ratio. Thus, 40%
of the damage awarded by the respondent appellate court, except the award of P25,000.00 attorney’s fees, shall be borne by private
respondent RMC; only the balance of 60% needs to be paid by the petitioners. The award of attorney’s fees shall be borne
exclusively by the petitioners.

WHEREFORE, the decision of the respondent Court of Appeals is modified by reducing the amount of actual damages private
respondent is entitled to by 40%. Petitioners may recover from Ms. Azucena Mabayad the amount they would pay the
private Respondent. Private respondent shall have recourse against Ms. Irene Yabut. In all other respects, the appellate court’s
decision is AFFIRMED.

Proportionate costs.

SO ORDERED.
G.R. No. 138060             September 1, 2004

WILLIAM TIU, doing business under the name and style of "D’ Rough Riders," and VIRGILIO TE LAS PIÑAS petitioners,
vs.
PEDRO A. ARRIESGADO, BENJAMIN CONDOR, SERGIO PEDRANO and PHILIPPINE PHOENIX SURETY AND INSURANCE,
INC., respondents.

DECISION

CALLEJO, SR., J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court from the Decision 1 of the Court of Appeals in CA-G.R. CV
No. 54354 affirming with modification the Decision 2 of the Regional Trial Court, 7th Judicial Region, Cebu City, Branch 20, in Civil
Case No. CEB-5963 for breach of contract of carriage, damages and attorney’s fees, and the Resolution dated February 26, 1999
denying the motion for reconsideration thereof.

The following facts are undisputed:

At about 10:00 p.m. of March 15, 1987, the cargo truck marked "Condor Hollow Blocks and General Merchandise" bearing
plate number GBP-675 was loaded with firewood in Bogo, Cebu and left for Cebu City. Upon reaching Sitio Aggies,
Poblacion, Compostela, Cebu, just as the truck passed over a bridge, one of its rear tires exploded. The driver, Sergio
Pedrano, then parked along the right side of the national highway and removed the damaged tire to have it vulcanized at a
nearby shop, about 700 meters away.3 Pedrano left his helper, Jose Mitante, Jr. to keep watch over the stalled vehicle, and
instructed the latter to place a spare tire six fathoms away 4 behind the stalled truck to serve as a warning for oncoming
vehicles. The truck’s tail lights were also left on. It was about 12:00 a.m., March 16, 1987.

At about 4:45 a.m., D’ Rough Riders passenger bus with plate number PBP-724 driven by Virgilio Te Laspiñas was cruising along the
national highway of Sitio Aggies, Poblacion, Compostela, Cebu. The passenger bus was also bound for Cebu City, and had come from
Maya, Daanbantayan, Cebu. Among its passengers were the Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado, who were
seated at the right side of the bus, about three (3) or four (4) places from the front seat.

As the bus was approaching the bridge, Laspiñas saw the stalled truck, which was then about 25 meters away. 5 He applied the breaks
and tried to swerve to the left to avoid hitting the truck. But it was too late; the bus rammed into the truck’s left rear. The impact
damaged the right side of the bus and left several passengers injured. Pedro Arriesgado lost consciousness and suffered a fracture in
his right colles.6 His wife, Felisa, was brought to the Danao City Hospital. She was later transferred to the Southern Island Medical
Center where she died shortly thereafter. 7

Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of carriage, damages and attorney’s fees before the
Regional Trial Court of Cebu City, Branch 20, against the petitioners, D’ Rough Riders bus operator William Tiu and his driver, Virgilio
Te Laspiñas on May 27, 1987. The respondent alleged that the passenger bus in question was cruising at a fast and high speed along
the national road, and that petitioner Laspiñas did not take precautionary measures to avoid the accident. 8 Thus:

6. That the accident resulted to the death of the plaintiff’s wife, Felisa Pepito Arriesgado, as evidenced by a Certificate of
Death, a xerox copy of which is hereto attached as integral part hereof and marked as ANNEX – "A", and physical injuries to
several of its passengers, including plaintiff himself who suffered a "COLLES FRACTURE RIGHT," per Medical Certificate, a
xerox copy of which is hereto attached as integral part hereof and marked as ANNEX – "B" hereof.

7. That due to the reckless and imprudent driving by defendant Virgilio Te Laspiñas of the said Rough Riders passenger bus,
plaintiff and his wife, Felisa Pepito Arriesgado, failed to safely reach their destination which was Cebu City, the proximate
cause of which was defendant-driver’s failure to observe utmost diligence required of a very cautious person under all
circumstances.

8. That defendant William Tiu, being the owner and operator of the said Rough Riders passenger bus which figured in the
said accident, wherein plaintiff and his wife were riding at the time of the accident, is therefore directly liable for the breach
of contract of carriage for his failure to transport plaintiff and his wife safely to their place of destination which was Cebu
City, and which failure in his obligation to transport safely his passengers was due to and in consequence of his failure to
exercise the diligence of a good father of the family in the selection and supervision of his employees, particularly
defendant-driver Virgilio Te Laspiñas. 9

The respondent prayed that judgment be rendered in his favor and that the petitioners be condemned to pay the following
damages:

1). To pay to plaintiff, jointly and severally, the amount of ₱30,000.00 for the death and untimely demise of plaintiff’s wife,
Felisa Pepito Arriesgado;

2). To pay to plaintiff, jointly and severally, the amount of ₱38,441.50, representing actual expenses incurred by the plaintiff
in connection with the death/burial of plaintiff’s wife;
 3). To pay to plaintiff, jointly and severally, the amount of ₱1,113.80, representing medical/hospitalization expenses
incurred by plaintiff for the injuries sustained by him;

4). To pay to plaintiff, jointly and severally, the amount of ₱50,000.00 for moral damages;

5). To pay to plaintiff, jointly and severally, the amount of ₱50,000.00 by way of exemplary damages;

6). To pay to plaintiff, jointly and severally, the amount of ₱20,000.00 for attorney’s fees;

7). To pay to plaintiff, jointly and severally, the amount of ₱5,000.00 for litigation expenses.

PLAINTIFF FURTHER PRAYS FOR SUCH OTHER RELIEFS AND REMEDIES IN LAW AND EQUITY. 10

The petitioners, for their part, filed a Third-Party Complaint 11 on August 21, 1987 against the following: respondent Philippine
Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tiu’s insurer; respondent Benjamin Condor, the registered owner of the cargo
truck; and respondent Sergio Pedrano, the driver of the truck. They alleged that petitioner Laspiñas was negotiating the uphill climb
along the national highway of Sitio Aggies, Poblacion, Compostela, in a moderate and normal speed. It was further alleged that the
truck was parked in a slanted manner, its rear portion almost in the middle of the highway, and that no early warning device was
displayed. Petitioner Laspiñas promptly applied the brakes and swerved to the left to avoid hitting the truck head-on, but despite his
efforts to avoid damage to property and physical injuries on the passengers, the right side portion of the bus hit the cargo truck’s left
rear. The petitioners further alleged, thus:

5. That the cargo truck mentioned in the aforequoted paragraph is owned and registered in the name of the third-party
defendant Benjamin Condor and was left unattended by its driver Sergio Pedrano, one of the third-party defendants, at the
time of the incident;

6. That third-party defendant Sergio Pedrano, as driver of the cargo truck with marked (sic) "Condor Hollow Blocks &
General Merchandise," with Plate No. GBP-675 which was recklessly and imprudently parked along the national highway of
Compostela, Cebu during the vehicular accident in question, and third-party defendant Benjamin Condor, as the registered
owner of the cargo truck who failed to exercise due diligence in the selection and supervision of third-party defendant
Sergio Pedrano, are jointly and severally liable to the third-party plaintiffs for whatever liability that may be adjudged
against said third-party plaintiffs or are directly liable of (sic) the alleged death of plaintiff’s wife;

7. That in addition to all that are stated above and in the answer which are intended to show reckless imprudence on the
part of the third-party defendants, the third-party plaintiffs hereby declare that during the vehicular accident in question,
third-party defendant was clearly violating Section 34, par. (g) of the Land Transportation and Traffic Code…

10. That the aforesaid passenger bus, owned and operated by third-party plaintiff William Tiu, is covered by a common
carrier liability insurance with Certificate of Cover No. 054940 issued by Philippine Phoenix Surety and Insurance, Inc., Cebu
City Branch, in favor of third-party plaintiff William Tiu which covers the period from July 22, 1986 to July 22, 1987 and that
the said insurance coverage was valid, binding and subsisting during the time of the aforementioned incident (Annex "A" as
part hereof);

11. That after the aforesaid alleged incident, third-party plaintiff notified third-party defendant Philippine Phoenix Surety
and Insurance, Inc., of the alleged incident hereto mentioned, but to no avail;

12. That granting, et arguendo et arguendi, if herein third-party plaintiffs will be adversely adjudged, they stand to pay
damages sought by the plaintiff and therefore could also look up to the Philippine Phoenix Surety and Insurance, Inc., for
contribution, indemnification and/or reimbursement of any liability or obligation that they might [be] adjudged per
insurance coverage duly entered into by and between third-party plaintiff William Tiu and third-party defendant Philippine
Phoenix Surety and Insurance, Inc.;…12

The respondent PPSII, for its part, admitted that it had an existing contract with petitioner Tiu, but averred that it had already
attended to and settled the claims of those who were injured during the incident. 13 It could not accede to the claim of respondent
Arriesgado, as such claim was way beyond the scheduled indemnity as contained in the contract of insurance. 14

After the parties presented their respective evidence, the trial court ruled in favor of respondent Arriesgado. The dispositive portion
of the decision reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff as against defendant William Tiu
ordering the latter to pay the plaintiff the following amounts:

1 - The sum of FIFTY THOUSAND PESOS (₱50,000.00) as moral damages;

2 - The sum of FIFTY THOUSAND PESOS (₱50,000.00) as exemplary damages;

 3 - The sum of THIRTY-EIGHT THOUSAND FOUR HUNDRED FORTY-ONE PESOS (₱38,441.00) as actual damages;

4 - The sum of TWENTY THOUSAND PESOS (₱20,000.00) as attorney’s fees;

5 - The sum of FIVE THOUSAND PESOS (₱5,000.00) as costs of suit;

SO ORDERED.15

According to the trial court, there was no dispute that petitioner William Tiu was engaged in business as a common carrier, in view
of his admission that D’ Rough Rider passenger bus which figured in the accident was owned by him; that he had been engaged in
the transportation business for 25 years with a sole proprietorship; and that he owned 34 buses. The trial court ruled that if
petitioner Laspiñas had not been driving at a fast pace, he could have easily swerved to the left to avoid hitting the truck, thus,
averting the unfortunate incident. It then concluded that petitioner Laspiñas was negligent.

The trial court also ruled that the absence of an early warning device near the place where the truck was parked was not sufficient to
impute negligence on the part of respondent Pedrano, since the tail lights of the truck were fully on, and the vicinity was well lighted
by street lamps.16 It also found that the testimony of petitioner Tiu, that he based the selection of his driver Laspiñas on efficiency
and in-service training, and that the latter had been so far an efficient and good driver for the past six years of his employment, was
insufficient to prove that he observed the diligence of a good father of a family in the selection and supervision of his employees.

After the petitioner’s motion for reconsideration of the said decision was denied, the petitioners elevated the case to the Court of
Appeals on the following issues:

I WHETHER THIRD PARTY DEFENDANT SERGIO PEDRANO WAS RECKLESS AND IMPRUDENT WHEN HE PARKED THE CARGO
TRUCK IN AN OBLIQUE MANNER;

II WHETHER THE THIRD PARTY DEFENDANTS ARE JOINTLY AND SEVERALLY LIABLE DIRECTLY TO PLAINTIFF-APPELLEE OR TO
DEFENDANTS-APPELLANTS FOR WHATEVER LIABILITY THAT MAY BE ADJUDGED TO THE SAID DEFENDANTS-APPELLANTS;

III WHETHER DEFENDANT-APPELLANT VIRGILIO TE LASPIÑAS WAS GUILTY OF GROSS NEGLIGENCE;

IV WHETHER DEFENDANT-APPELLANT WILLIAM TIU HAD EXERCISED THE DUE DILIGENCE OF A GOOD FATHER OF A FAMILY
IN THE SELECTION AND SUPERVISION OF HIS DRIVERS;

V GRANTING FOR THE SAKE OF ARGUMENT THAT DEFENDANT-APPELLANT WILLIAM TIU IS LIABLE TO PLAINTIFF-APPELLEE,
WHETHER THERE IS LEGAL AND FACTUAL BASIS IN AWARDING EXCESSIVE MORAL DAMAGES, EX[E]MPLARY DAMAGES,
ATTORNEY’S FEES AND LITIGATION EXPENSES TO PLAINTIFF-APPELLEE;

VI WHETHER THIRD PARTY DEFENDANT PHILIPPINE PHOENIX SURETY AND INSURANCE, INC. IS LIABLE TO DEFENDANT-
APPELLANT WILLIAM TIU.17

The appellate court rendered judgment affirming the trial court’s decision with the modification that the awards for moral and
exemplary damages were reduced to ₱25,000. The dispositive portion reads:

WHEREFORE, the appealed Decision dated November 6, 1995 is hereby MODIFIED such that the awards for moral and
exemplary damages are each reduced to ₱25,000.00 or a total of ₱50,000.00 for both. The judgment is AFFIRMED in all
other respects.

SO ORDERED.18

According to the appellate court, the action of respondent Arriesgado was based not on quasi-delict but on breach of contract of
carriage. As a common carrier, it was incumbent upon petitioner Tiu to prove that extraordinary diligence was observed in ensuring
the safety of passengers during transportation. Since the latter failed to do so, he should be held liable for respondent Arriesgado’s
claim. The CA also ruled that no evidence was presented against the respondent PPSII, and as such, it could not be held liable for
respondent Arriesgado’s claim, nor for contribution, indemnification and/or reimbursement in case the petitioners were adjudged
liable.

The petitioners now come to this Court and ascribe the following errors committed by the appellate court:

I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING RESPONDENTS BENJAMIN CONDOR AND SERGIO
PEDRANO GUILTY OF NEGLIGENCE AND HENCE, LIABLE TO RESPONDENT PEDRO A. ARRIESGADO OR TO PETITIONERS FOR
WHATEVER LIABILITY THAT MAY BE ADJUDGED AGAINST THEM.

II. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONERS GUILTY OF NEGLIGENCE AND HENCE, LIABLE TO
RESPONDENT PEDRO A. ARRIESGADO.
 III. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONER WILLIAM TIU LIABLE FOR EXEMPLARY DAMAGES,
ATTORNEY’S FEES AND LITIGATION EXPENSES.

IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING RESPONDENT PHILIPPINE PHOENIX SURETY AND
INSURANCE, INC. LIABLE TO RESPONDENT PEDRO A. ARRIESGADO OR TO PETITIONER WILLIAM TIU. 19

According to the petitioners, the appellate court erred in failing to appreciate the absence of an early warning device and/or built-in
reflectors at the front and back of the cargo truck, in clear violation of Section 34, par. (g) of the Land Transportation and Traffic
Code. They aver that such violation is only a proof of respondent Pedrano’s negligence, as provided under Article 2185 of the New
Civil Code. They also question the appellate court’s failure to take into account that the truck was parked in an oblique manner, its
rear portion almost at the center of the road. As such, the proximate cause of the incident was the gross recklessness and
imprudence of respondent Pedrano, creating the presumption of negligence on the part of respondent Condor in supervising his
employees, which presumption was not rebutted. The petitioners then contend that respondents Condor and Pedrano should be
held jointly and severally liable to respondent Arriesgado for the payment of the latter’s claim.

The petitioners, likewise, aver that expert evidence should have been presented to prove that petitioner Laspiñas was driving at a
very fast speed, and that the CA could not reach such conclusion by merely considering the damages on the cargo truck. It was also
pointed out that petitioner Tiu presented evidence that he had exercised the diligence of a good father of a family in the selection
and supervision of his drivers.

The petitioners further allege that there is no legal and factual basis to require petitioner Tiu to pay exemplary damages as no
evidence was presented to show that the latter acted in a fraudulent, reckless and oppressive manner, or that he had an active
participation in the negligent act of petitioner Laspiñas.

Finally, the petitioners contend that respondent PPSII admitted in its answer that while it had attended to and settled the claims of
the other injured passengers, respondent Arriesgado’s claim remained unsettled as it was beyond the scheduled indemnity under
the insurance contract. The petitioners argue that said respondent PPSII should have settled the said claim in accordance with the
scheduled indemnity instead of just denying the same.

On the other hand, respondent Arriesgado argues that two of the issues raised by the petitioners involved questions of fact, not
reviewable by the Supreme Court: the finding of negligence on the part of the petitioners and their liability to him; and the award of
exemplary damages, attorney’s fees and litigation expenses in his favor. Invoking the principle of equity and justice, respondent
Arriesgado pointed out that if there was an error to be reviewed in the CA decision, it should be geared towards the restoration of
the moral and exemplary damages to ₱50,000 each, or a total of ₱100,000 which was reduced by the Court of Appeals to ₱25,000
each, or a total of only ₱50,000.

Respondent Arriesgado also alleged that respondents Condor and Pedrano, and respondent Phoenix Surety, are parties with whom
he had no contract of carriage, and had no cause of action against. It was pointed out that only the petitioners needed to be sued, as
driver and operator of the ill-fated bus, on account of their failure to bring the Arriesgado Spouses to their place of destination as
agreed upon in the contract of carriage, using the utmost diligence of very cautious persons with due regard for all circumstances.

Respondents Condor and Pedrano point out that, as correctly ruled by the Court of Appeals, the proximate cause of the unfortunate
incident was the fast speed at which petitioner Laspiñas was driving the bus owned by petitioner Tiu. According to the respondents,
the allegation that the truck was not equipped with an early warning device could not in any way have prevented the incident from
happening. It was also pointed out that respondent Condor had always exercised the due diligence required in the selection and
supervision of his employees, and that he was not a party to the contract of carriage between the petitioners and respondent
Arriesgado.

Respondent PPSII, for its part, alleges that contrary to the allegation of petitioner Tiu, it settled all the claims of those injured in
accordance with the insurance contract. It further avers that it did not deny respondent Arriesgado’s claim, and emphasizes that its
liability should be within the scheduled limits of indemnity under the said contract. The respondent concludes that while it is true
that insurance contracts are contracts of indemnity, the measure of the insurer’s liability is determined by the insured’s compliance
with the terms thereof.

The Court’s Ruling

At the outset, it must be stressed that this Court is not a trier of facts. 20 Factual findings of the Court of Appeals are final and may not
be reviewed on appeal by this Court, except when the lower court and the CA arrived at diverse factual findings. 21 The petitioners in
this case assail the finding of both the trial and the appellate courts that petitioner Laspiñas was driving at a very fast speed before
the bus owned by petitioner Tiu collided with respondent Condor’s stalled truck. This is clearly one of fact, not reviewable by the
Court in a petition for review under Rule 45.22

On this ground alone, the petition is destined to fail.

However, considering that novel questions of law are likewise involved, the Court resolves to examine and rule on the merits of the
case.
Petitioner Laspiñas
Was negligent in driving
The Ill-fated bus

In his testimony before the trial court, petitioner Laspiñas claimed that he was traversing the two-lane road at Compostela, Cebu at a
speed of only forty (40) to fifty (50) kilometers per hour before the incident occurred. 23 He also admitted that he saw the truck which
was parked in an "oblique position" at about 25 meters before impact, 24 and tried to avoid hitting it by swerving to the left. However,
even in the absence of expert evidence, the damage sustained by the truck 25 itself supports the finding of both the trial court and the
appellate court, that the D’ Rough Rider bus driven by petitioner Laspiñas was traveling at a fast pace. Since he saw the stalled truck
at a distance of 25 meters, petitioner Laspiñas had more than enough time to swerve to his left to avoid hitting it; that is, if the speed
of the bus was only 40 to 50 kilometers per hour as he claimed. As found by the Court of Appeals, it is easier to believe that
petitioner Laspiñas was driving at a very fast speed, since at 4:45 a.m., the hour of the accident, there were no oncoming vehicles at
the opposite direction. Petitioner Laspiñas could have swerved to the left lane with proper clearance, and, thus, could have avoided
the truck.26 Instinct, at the very least, would have prompted him to apply the breaks to avert the impending disaster which he must
have foreseen when he caught sight of the stalled truck. As we had occasion to reiterate:

A man must use common sense, and exercise due reflection in all his acts; it is his duty to be cautious, careful and prudent,
if not from instinct, then through fear of recurring punishment. He is responsible for such results as anyone might foresee
and for acts which no one would have performed except through culpable abandon. Otherwise, his own person, rights and
property, and those of his fellow beings, would ever be exposed to all manner of danger and injury. 27

We agree with the following findings of the trial court, which were affirmed by the CA on appeal:

A close study and evaluation of the testimonies and the documentary proofs submitted by the parties which have direct
bearing on the issue of negligence, this Court as shown by preponderance of evidence that defendant Virgilio Te Laspiñas
failed to observe extraordinary diligence as a driver of the common carrier in this case. It is quite hard to accept his version
of the incident that he did not see at a reasonable distance ahead the cargo truck that was parked when the Rough Rider
[Bus] just came out of the bridge which is on an (sic) [more] elevated position than the place where the cargo truck was
parked. With its headlights fully on, defendant driver of the Rough Rider was in a vantage position to see the cargo truck
ahead which was parked and he could just easily have avoided hitting and bumping the same by maneuvering to the left
without hitting the said cargo truck. Besides, it is (sic) shown that there was still much room or space for the Rough Rider to
pass at the left lane of the said national highway even if the cargo truck had occupied the entire right lane thereof. It is not
true that if the Rough Rider would proceed to pass through the left lane it would fall into a canal considering that there was
much space for it to pass without hitting and bumping the cargo truck at the left lane of said national highway. The records,
further, showed that there was no incoming vehicle at the opposite lane of the national highway which would have
prevented the Rough Rider from not swerving to its left in order to avoid hitting and bumping the parked cargo truck. But
the evidence showed that the Rough Rider instead of swerving to the still spacious left lane of the national highway plowed
directly into the parked cargo truck hitting the latter at its rear portion; and thus, the (sic) causing damages not only to
herein plaintiff but to the cargo truck as well.28

Indeed, petitioner Laspiñas’ negligence in driving the bus is apparent in the records. By his own admission, he had just passed a
bridge and was traversing the highway of Compostela, Cebu at a speed of 40 to 50 kilometers per hour before the collision occurred.
The maximum speed allowed by law on a bridge is only 30 kilometers per hour. 29 And, as correctly pointed out by the trial court,
petitioner Laspiñas also violated Section 35 of the Land Transportation and Traffic Code, Republic Act No. 4136, as
amended:1avvphil.net

Sec. 35. Restriction as to speed. – (a) Any person driving a motor vehicle on a highway shall drive the same at a careful and
prudent speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the width of the
highway, and or any other condition then and there existing; and no person shall drive any motor vehicle upon a highway at
such speed as to endanger the life, limb and property of any person, nor at a speed greater than will permit him to bring the
vehicle to a stop within the assured clear distance ahead. 30

Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating
any traffic regulation.31

Petitioner Tiu failed to

Overcome the presumption
Of negligence against him as
One engaged in the business
Of common carriage

The rules which common carriers should observe as to the safety of their passengers are set forth in the Civil Code, Articles
1733,32 175533 and 1756.34 In this case, respondent Arriesgado and his deceased wife contracted with petitioner Tiu, as owner and
operator of D’ Rough Riders bus service, for transportation from Maya, Daanbantayan, Cebu, to Cebu City for the price of ₱18.00. 35 It
is undisputed that the respondent and his wife were not safely transported to the destination agreed upon. In actions for breach of
contract, only the existence of such contract, and the fact that the obligor, in this case the common carrier, failed to transport his
passenger safely to his destination are the matters that need to be proved. 36 This is because under the said contract of carriage, the
petitioners assumed the express obligation to transport the respondent and his wife to their destination safely and to observe
extraordinary diligence with due regard for all circumstances. 37 Any injury suffered by the passengers in the course thereof is
immediately attributable to the negligence of the carrier. 38 Upon the happening of the accident, the presumption of negligence at
once arises, and it becomes the duty of a common carrier to prove that he observed extraordinary diligence in the care of his
passengers.39 It must be stressed that in requiring the highest possible degree of diligence from common carriers and in creating a
presumption of negligence against them, the law compels them to curb the recklessness of their drivers. 40

While evidence may be submitted to overcome such presumption of negligence, it must be shown that the carrier observed the
required extraordinary diligence, which means that the carrier must show the utmost diligence of very cautious persons as far as
human care and foresight can provide, or that the accident was caused by fortuitous event. 41 As correctly found by the trial court,
petitioner Tiu failed to conclusively rebut such presumption. The negligence of petitioner Laspiñas as driver of the passenger bus is,
thus, binding against petitioner Tiu, as the owner of the passenger bus engaged as a common carrier. 42

The Doctrine of
Last Clear Chance
Is Inapplicable in the
Case at Bar

Contrary to the petitioner’s contention, the principle of last clear chance is inapplicable in the instant case, as it only applies in a suit
between the owners and drivers of two colliding vehicles. It does not arise where a passenger demands responsibility from the
carrier to enforce its contractual obligations, for it would be inequitable to exempt the negligent driver and its owner on the ground
that the other driver was likewise guilty of negligence. 43 The common law notion of last clear chance permitted courts to grant
recovery to a plaintiff who has also been negligent provided that the defendant had the last clear chance to avoid the casualty and
failed to do so. Accordingly, it is difficult to see what role, if any, the common law of last clear chance doctrine has to play in a
jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been
rejected, as it has been in Article 2179 of the Civil Code. 44

Thus, petitioner Tiu cannot escape liability for the death of respondent Arriesgado’s wife due to the negligence of petitioner
Laspiñas, his employee, on this score.

Respondents Pedrano and

Condor were likewise
Negligent

In Phoenix Construction, Inc. v. Intermediate Appellate Court, 45 where therein respondent Dionisio sustained injuries when his
vehicle rammed against a dump truck parked askew, the Court ruled that the improper parking of a dump truck without any warning
lights or reflector devices created an unreasonable risk for anyone driving within the vicinity, and for having created such risk, the
truck driver must be held responsible. In ruling against the petitioner therein, the Court elucidated, thus:

… In our view, Dionisio’s negligence, although later in point of time than the truck driver’s negligence, and therefore closer
to the accident, was not an efficient intervening or independent cause. What the petitioners describe as an "intervening
cause" was no more than a foreseeable consequence of the risk created by the negligent manner in which the truck driver
had parked the dump truck. In other words, the petitioner truck driver owed a duty to private respondent Dionisio and
others similarly situated not to impose upon them the very risk the truck driver had created. Dionisio’s negligence was not
that of an independent and overpowering nature as to cut, as it were, the chain of causation in fact between the improper
parking of the dump truck and the accident, nor to sever the juris vinculum of liability. …

We hold that private respondent Dionisio’s negligence was "only contributory," that the "immediate and proximate cause"
of the injury remained the truck driver’s "lack of due care."… 46

In this case, both the trial and the appellate courts failed to consider that respondent Pedrano was also negligent in leaving the truck
parked askew without any warning lights or reflector devices to alert oncoming vehicles, and that such failure created the
presumption of negligence on the part of his employer, respondent Condor, in supervising his employees properly and adequately.
As we ruled in Poblete v. Fabros:47

It is such a firmly established principle, as to have virtually formed part of the law itself, that the negligence of the employee
gives rise to the presumption of negligence on the part of the employer. This is the presumed negligence in the selection
and supervision of employee. The theory of presumed negligence, in contrast with the American doctrine of respondeat
superior, where the negligence of the employee is conclusively presumed to be the negligence of the employer, is clearly
deducible from the last paragraph of Article 2180 of the Civil Code which provides that the responsibility therein mentioned
shall cease if the employers prove that they observed all the diligence of a good father of a family to prevent damages. … 48

The petitioners were correct in invoking respondent Pedrano’s failure to observe Article IV, Section 34(g) of the Rep. Act No. 4136,
which provides:1avvphil.net

(g) Lights when parked or disabled. – Appropriate parking lights or flares visible one hundred meters away shall be displayed
at a corner of the vehicle whenever such vehicle is parked on highways or in places that are not well-lighted or is placed in
such manner as to endanger passing traffic.
The manner in which the truck was parked clearly endangered oncoming traffic on both sides, considering that the tire blowout
which stalled the truck in the first place occurred in the wee hours of the morning. The Court can only now surmise that the
unfortunate incident could have been averted had respondent Condor, the owner of the truck, equipped the said vehicle with lights,
flares, or, at the very least, an early warning device. 49 Hence, we cannot subscribe to respondents Condor and Pedrano’s claim that
they should be absolved from liability because, as found by the trial and appellate courts, the proximate cause of the collision was
the fast speed at which petitioner Laspiñas drove the bus. To accept this proposition would be to come too close to wiping out the
fundamental principle of law that a man must respond for the foreseeable consequences of his own negligent act or omission.
Indeed, our law on quasi-delicts seeks to reduce the risks and burdens of living in society and to allocate them among its members.
To accept this proposition would be to weaken the very bonds of society. 50

The Liability of
Respondent PPSII
as Insurer

The trial court in this case did not rule on the liability of respondent PPSII, while the appellate court ruled that, as no evidence was
presented against it, the insurance company is not liable.

A perusal of the records will show that when the petitioners filed the Third-Party Complaint against respondent PPSII, they failed to
attach a copy of the terms of the insurance contract itself. Only Certificate of Cover No. 054940 51 issued in favor of "Mr. William Tiu,
Lahug, Cebu City" signed by Cosme H. Boniel was appended to the third-party complaint. The date of issuance, July 22, 1986, the
period of insurance, from July 22, 1986 to July 22, 1987, as well as the following items, were also indicated therein:

SCHEDULED VEHICLE
MODEL MAKE TYPE OF BODY COLOR BLT FILE NO.
Isuzu Forward Bus blue mixed
PLATE NO. SERIAL/CHASSIS NO. MOTOR NO. AUTHORIZED CAPACITY UNLADEN WEIGHT
PBP-724 SER450-1584124 677836 50 6 Cyls. Kgs.
SECTION 1/11 *LIMITS OF LIABILITY PREMIUMS PAID
₱50,000.00 ₱540.0052
A. THIRD PARTY LIABILITY
B. PASSENGER LIABILITY Per Person Per Accident
₱12,000.00 ₱50,000

In its Answer53 to the Third-Party Complaint, the respondent PPSII admitted the existence of the contract of insurance, in view of its
failure to specifically deny the same as required under then Section 8(a), Rule 8 of the Rules of Court, 54 which reads:

Sec. 8. How to contest genuineness of such documents. When an action or defense is founded upon a written instrument
copied in or attached to the corresponding pleading as provided in the preceding section, the genuineness and due
execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and
sets forth what he claims to be the facts; but the requirement of an oath does not apply when the adverse party does not
appear to be a party to the instrument or when compliance with an order for inspection of the original instrument is
refused.

In fact, respondent PPSII did not dispute the existence of such contract, and admitted that it was liable thereon. It claimed, however,
that it had attended to and settled the claims of those injured during the incident, and set up the following as special affirmative
defenses:

Third party defendant Philippine Phoenix Surety and Insurance, Inc. hereby reiterates and incorporates by way of reference
the preceding paragraphs and further states THAT:-

8. It has attended to the claims of Vincent Canales, Asuncion Batiancila and Neptali Palces who sustained injuries
during the incident in question. In fact, it settled financially their claims per vouchers duly signed by them and they
duly executed Affidavit[s] of Desistance to that effect, xerox copies of which are hereto attached as Annexes 1, 2, 3,
4, 5, and 6 respectively;

9. With respect to the claim of plaintiff, herein answering third party defendant through its authorized insurance
adjuster attended to said claim. In fact, there were negotiations to that effect. Only that it cannot accede to the
demand of said claimant considering that the claim was way beyond the scheduled indemnity as per contract
entered into with third party plaintiff William Tiu and third party defendant (Philippine Phoenix Surety and
Insurance, Inc.). Third party Plaintiff William Tiu knew all along the limitation as earlier stated, he being an old hand
in the transportation business;55…

Considering the admissions made by respondent PPSII, the existence of the insurance contract and the salient terms thereof cannot
be dispatched. It must be noted that after filing its answer, respondent PPSII no longer objected to the presentation of evidence by
respondent Arriesgado and the insured petitioner Tiu. Even in its Memorandum 56 before the Court, respondent PPSII admitted the
existence of the contract, but averred as follows:
 Petitioner Tiu is insisting that PPSII is liable to him for contribution, indemnification and/or reimbursement. This has no
basis under the contract. Under the contract, PPSII will pay all sums necessary to discharge liability of the insured subject to
the limits of liability but not to exceed the limits of liability as so stated in the contract. Also, it is stated in the contract that
in the event of accident involving indemnity to more than one person, the limits of liability shall not exceed the aggregate
amount so specified by law to all persons to be indemnified. 57

As can be gleaned from the Certificate of Cover, such insurance contract was issued pursuant to the Compulsory Motor Vehicle
Liability Insurance Law. It was expressly provided therein that the limit of the insurer’s liability for each person was ₱12,000, while
the limit per accident was pegged at ₱50,000. An insurer in an indemnity contract for third party liability is directly liable to the
injured party up to the extent specified in the agreement but it cannot be held solidarily liable beyond that amount. 58 The
respondent PPSII could not then just deny petitioner Tiu’s claim; it should have paid ₱12,000 for the death of Felisa Arriesgado, 59 and
respondent Arriesgado’s hospitalization expenses of ₱1,113.80, which the trial court found to have been duly supported by receipts.
The total amount of the claims, even when added to that of the other injured passengers which the respondent PPSII claimed to
have settled,60 would not exceed the ₱50,000 limit under the insurance agreement.

Indeed, the nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily intended to provide compensation for
the death or bodily injuries suffered by innocent third parties or passengers as a result of the negligent operation and use of motor
vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless of the financial capacity of
motor vehicle owners.61 As the Court, speaking through Associate Justice Leonardo A. Quisumbing, explained in Government Service
Insurance System v. Court of Appeals:62

However, although the victim may proceed directly against the insurer for indemnity, the third party liability is only up to
the extent of the insurance policy and those required by law. While it is true that where the insurance contract provides for
indemnity against liability to third persons, and such persons can directly sue the insurer, the direct liability of the insurer
under indemnity contracts against third party liability does not mean that the insurer can be held liable in solidum with the
insured and/or the other parties found at fault. For the liability of the insurer is based on contract; that of the insured
carrier or vehicle owner is based on tort. …

Obviously, the insurer could be held liable only up to the extent of what was provided for by the contract of insurance, in
accordance with the CMVLI law. At the time of the incident, the schedule of indemnities for death and bodily injuries,
professional fees and other charges payable under a CMVLI coverage was provided for under the Insurance Memorandum
Circular (IMC) No. 5-78 which was approved on November 10, 1978. As therein provided, the maximum indemnity for death
was twelve thousand (₱12,000.00) pesos per victim. The schedules for medical expenses were also provided by said IMC,
specifically in paragraphs (C) to (G).63

Damages to be
Awarded

The trial court correctly awarded moral damages in the amount of ₱50,000 in favor of respondent Arriesgado. The award of
exemplary damages by way of example or correction of the public good, 64 is likewise in order. As the Court ratiocinated in Kapalaran
Bus Line v. Coronado:65

…While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the passengers and owners of
cargo carried by a common carrier, they are not the only persons that the law seeks to benefit. For if common carriers
carefully observed the statutory standard of extraordinary diligence in respect of their own passengers, they cannot help
but simultaneously benefit pedestrians and the passengers of other vehicles who are equally entitled to the safe and
convenient use of our roads and highways. The law seeks to stop and prevent the slaughter and maiming of people
(whether passengers or not) on our highways and buses, the very size and power of which seem to inflame the minds of
their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages in cases of quasi-
delicts "if the defendant acted with gross negligence."… 66

The respondent Pedro A. Arriesgado, as the surviving spouse and heir of Felisa Arriesgado, is entitled to indemnity in the amount of
₱50,000.00.67

The petitioners, as well as the respondents Benjamin Condor and Sergio Pedrano are jointly and severally liable for said amount,
conformably with the following pronouncement of the Court in Fabre, Jr. vs. Court of Appeals: 68

The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was riding
concurred with the negligence of a third party who was the driver of another vehicle, thus causing an accident. In Anuran v.
Buño, Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court, and Metro Manila Transit Corporation v. Court of
Appeals, the bus company, its driver, the operator of the other vehicle and the driver of the vehicle were jointly and
severally held liable to the injured passenger or the latter’s heirs. The basis of this allocation of liability was explained in
Viluan v. Court of Appeals, thus:

"Nor should it make difference that the liability of petitioner [bus owner] springs from contract while that of
respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already ruled in
Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence of the driver of the
bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two
 vehicles are jointly and severally liable for damages. Some members of the Court, though, are of the view that
under the circumstances they are liable on quasi-delict." 69

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals
is AFFIRMED with MODIFICATIONS:

(1) Respondent Philippine Phoenix Surety and Insurance, Inc. and petitioner William Tiu are ORDERED to pay, jointly and
severally, respondent Pedro A. Arriesgado the total amount of ₱13,113.80;

(2) The petitioners and the respondents Benjamin Condor and Sergio Pedrano are ORDERED to pay, jointly and severally,
respondent Pedro A. Arriesgado ₱50,000.00 as indemnity; ₱26,441.50 as actual damages; ₱50,000.00 as moral damages;
₱50,000.00 as exemplary damages; and ₱20,000.00 as attorney’s fees.

SO ORDERED.
G.R. No. 153076             June 21, 2007

LAPANDAY AGRICULTURAL and DEVELOPMENT CORPORATION (LADECO), HENRY BERENGUEL, and APOLONIO R.
DEOCAMPO, petitioners,
vs.
MICHAEL RAYMOND ANGALA, respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review1 assailing the 25 July 2001 Decision2 and 11 March 2002 Resolution3 of the Court of Appeals
in CA-G.R. CV No. 51134.

The Antecedent Facts

On 4 May 1993, at about 2:45 p.m., a Datsun crewcab with plate no. PEC-903 driven by Apolonio Deocampo (Deocampo) bumped
into a 1958 Chevy pick-up with plate no. MAM-475 owned by Michael Raymond Angala (respondent) and driven by Bernulfo Borres
(Borres). Lapanday Agricultural and Development Corporation (LADECO) owned the crewcab which was assigned to its manager
Manuel Mendez (Mendez). Deocampo was the driver and bodyguard of Mendez. Both vehicles were running along Rafael Castillo
St., Agdao, Davao City heading north towards Lanang, Davao City. The left door, front left fender, and part of the front bumper of the
pick-up were damaged.

Respondent filed an action for Quasi-Delict, Damages, and Attorney’s Fees against LADECO, its administrative officer Henry
Berenguel4 (Berenguel) and Deocampo. Respondent alleged that his pick-up was slowing down to about five to ten kilometers per
hour (kph) and was making a left turn preparatory to turning south when it was bumped from behind by the crewcab which was
running at around 60 to 70 kph. The crewcab stopped 21 meters from the point of impact. Respondent alleged that he heard a
screeching sound before the impact. Respondent was seated beside the driver and was looking at the speedometer when the
accident took place. Respondent testified that Borres made a signal because he noticed a blinking light while looking at the
speedometer.5

Respondent sent a demand letter to LADECO for the payment of the damages he incurred because of the accident but he did not
receive any reply. Thus, respondent filed the case against LADECO, Berenguel, and Deocampo.

Deocampo alleged that the pick-up and the crewcab he was driving were both running at about 40 kph. The pick-up was running
along the outer lane. The pick-up was about 10 meters away when it made a U-turn towards the left. Deocampo testified that he did
not see any signal from the pick-up.6 Deocampo alleged that he tried to avoid the pick-up but he was unable to avoid the collision.
Deocampo stated that he did not apply the brakes because he knew the collision was unavoidable. Deocampo admitted that he
stepped on the brakes only after the collision.

The Ruling of the Trial Court

In its 3 March 1995 Decision,7 the Regional Trial Court of Davao City, Branch 15 (trial court) ruled:

WHEREFORE, judgment is hereby rendered ordering the defendants LADECO and Apolonio Deocampo to solidarily pay the
plaintiffs the following sums:

1. Twenty three thousand two hundred (P23,200.00) pesos as actual damages.

2. Ten thousand (P10,000.00) pesos as moral damages.

3. Ten thousand (P10,000.00) pesos as attorney’s fees.

4. Costs of suit.

SO ORDERED.8

The trial court found that the crewcab was running very fast while following the pick-up and that the crewcab’s speed was the
proximate cause of the accident. The trial court observed that the crewcab stopped 21 meters away from the point of impact
despite Deocampo’s claim that he stepped on the brakes moments after the collision. The trial court ruled that Deocampo had the
last opportunity to avoid the accident.

The trial court found that Berenguel was not liable because he was not the owner of the crewcab.
LADECO and Deocampo (petitioners)9 filed a motion for reconsideration. The trial court denied petitioners’ motion in its 13 June
1995 Order.10

Petitioners filed an appeal before the Court of Appeals.

The Ruling of the Court of Appeals

The Court of Appeals affirmed in toto the trial court’s decision.

The Court of Appeals sustained the finding of the trial court that Deocampo was negligent. The Court of Appeals applied the doctrine
of last clear chance and ruled that Deocampo had the responsibility of avoiding the pick-up.

The Court of Appeals also sustained the solidary liability of LADECO and Deocampo. The Court of Appeals ruled that under Article
2180 of the Civil Code, the negligence of the driver is presumed to be the negligence of the owner of the vehicle.

The dispositive portion of the Court of Appeals’ Decision reads:

WHEREFORE, premises considered, the appeal is DISMISSED for lack of merit, and the assailed Decision of the Court a
quo in Civil Case No. 22067-93 is AFFIRMED in toto. Costs against defendants-appellants.

SO ORDERED.11

Petitioners filed a motion for reconsideration. In its 11 March 2002 Resolution, the Court of Appeals denied the motion for lack of
merit.

Hence, the petition before this Court.

The Issues

The issues before the Court are the following:

1. Whether the provisions of Section 45(b) of Republic Act No. 4136 12 (RA 4136) and Article 2185 of the Civil Code apply to
this case; and

2. Whether respondent is entitled to the damages awarded.

The Ruling of this Court

The petition is partly meritorious.

Both Drivers are Negligent

Both the trial court and the Court of Appeals found that Deocampo was at fault because he was driving very fast prior to the
collision. The Court of Appeals sustained the trial court’s finding that Deocampo was running more than the normal cruising speed.
Both the trial court and the Court of Appeals noted that the crewcab stopped 21 meters away from the point of impact. Deocampo
admitted that he stepped on the brakes only after the collision.

Petitioners allege that Borres did not take the proper lane before executing the U-turn. Petitioners allege that Borres violated
Section 45(b) of RA 4136 and it was his recklessness that was the proximate cause of the accident.

Section 45(b) of RA 4136 states:

Sec. 45. Turning at intersections. x x x

(b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for traffic to the right of
and nearest to the center line of the highway, and, in turning, shall pass to the left of the center of the intersection, except
that, upon highways laned for traffic and upon one-way highways, a left turn shall be made from the left lane of traffic in
the direction in which the vehicle is proceeding.

Petitioners further allege that since Borres was violating a traffic rule at the time of the accident, respondent and Borres were the
parties at fault. Petitioners cite Article 2185 of the Civil Code, thus:

Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at
the time of the mishap, he was violating any traffic regulation.

We rule that both parties were negligent in this case. Borres was at the outer lane when he executed a U-turn. Following Section
45(b) of RA 4136, Borres should have stayed at the inner lane which is the lane nearest to the center of the highway. However,
Deocampo was equally negligent. Borres slowed down the pick-up preparatory to executing the U-turn. Deocampo should have also
slowed down when the pick-up slowed down. Deocampo admitted that he noticed the pick-up when it was still about 20 meters
away from him.13 Vehicular traffic was light at the time of the incident. The pick-up and the crewcab were the only vehicles on the
road.14 Deocampo could have avoided the crewcab if he was not driving very fast before the collision, as found by both the trial court
and the Court of Appeals. We sustain this finding since factual findings of the Court of Appeals affirming those of the trial court are
conclusive and binding on this Court.15 Further, the crewcab stopped 21 meters from the point of impact. It would not have
happened if Deocampo was not driving very fast.

Doctrine of Last Clear Chance Applies

Since both parties are at fault in this case, the doctrine of last clear chance applies.

The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably later than
that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear
opportunity to avoid the loss but failed to do so is chargeable with the loss. 16 In this case, Deocampo had the last clear chance to
avoid the collision. Since Deocampo was driving the rear vehicle, he had full control of the situation since he was in a position to
observe the vehicle in front of him.17 Deocampo had the responsibility of avoiding bumping the vehicle in front of him. 18 A U-turn is
done at a much slower speed to avoid skidding and overturning, compared to running straight ahead. 19 Deocampo could have
avoided the vehicle if he was not driving very fast while following the pick-up. Deocampo was not only driving fast, he also admitted
that he did not step on the brakes even upon seeing the pick-up. He only stepped on the brakes after the collision.

Petitioners are Solidarily Liable

LADECO alleges that it should not be held jointly and severally liable with Deocampo because it exercised due diligence in the
supervision and selection of its employees. Aside from this statement, LADECO did not proffer any proof to show how it exercised
due diligence in the supervision and selection of its employees. LADECO did not show its policy in hiring its drivers, or the manner in
which it supervised its drivers. LADECO failed to substantiate its allegation that it exercised due diligence in the supervision and
selection of its employees.

Hence, we hold LADECO solidarily liable with Deocampo.

Respondent is Entitled to Moral Damages

We sustain the award of moral damages. Moral damages are awarded to allow a plaintiff to obtain means, diversion, or amusement
that will serve to alleviate the moral suffering he has undergone due to the defendant’s culpable action. 20 The trial court found that
respondent, who was on board the pick-up when the collision took place, suffered shock, serious anxiety, and fright when the
crewcab bumped his pick-up. We sustain the trial court and the Court of Appeals in ruling that respondent sufficiently showed that
he suffered shock, serious anxiety, and fright which entitle him to moral damages.

Both the trial court and the Court of Appeals failed to give any justification for the award of attorney’s fees. Awards of attorney’s
fees must be based on findings of fact and of law and stated in the decision of the trial court. 21 Further, no premium should be
placed on the right to litigate.22 Hence, we delete the award of attorney’s fees.

WHEREFORE, we AFFIRM the 25 July 2001 Decision and 11 March 2002 Resolution of the Court of Appeals in CA-G.R. CV No. 51134
with MODIFICATION by deleting the award of attorney’s fees. SO ORDERED.

G.R. No. L-68102 July 16, 1992

GEORGE MCKEE and ARACELI KOH MCKEE, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA MANALO, respondents.

G.R. No. L-68103 July 16, 1992

CARMEN DAYRIT KOH, LETICIA KOH, JULIETA KOH TUQUERO, ARACELI KOH MCKEE, ANTONIO KOH and ELIZABETH KOH
TURLA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA MANALO, respondents.

DAVIDE, JR., J.:

Petitioners urge this Court to review and reverse the Resolution of the Court of Appeals in C.A.-G.R. CV Nos. 69040-41, promulgated
on 3 April 1984, which set aside its previous Decision dated 29 November 1983 reversing the Decision of the trial court which
dismissed petitioners' complaints in Civil Case No. 4477 and Civil Case No. 4478 of the then Court of First Instance (now Regional
Trial Court) of Pampanga entitled "Carmen Dayrit Koh, Leticia Koh, Julieta Koh Tuquero, Araceli Koh McKee and Elizabeth Koh Turla
vs. Jaime Tayag and Rosalinda Manalo," and "George McKee and Araceli Koh McKee vs. Jaime Tayag and Rosalinda Manalo,"
respectively, and granted the private respondents' counterclaim for moral damages, attorney's fees and litigation expenses.
The said civil cases for damages based on quasi-delict were filed as a result of a vehicular accident which led to the deaths of Jose
Koh, Kim Koh McKee and Loida Bondoc and caused physical injuries to George Koh McKee, Christopher Koh McKee and petitioner
Araceli Koh McKee.

Petitioners in G.R. No. 68102, parents of the minors George Koh McKee, Christopher Koh McKee and the deceased Kim Koh McKee,
were the plaintiffs in Civil Case No. 4478, while petitioner Carmen Dayrit Koh and her co-petitioners in G.R. No. 68103, who are the
wife and children, respectively, of the late Jose Koh, were the plaintiffs in Civil Case No. 4477. Upon the other hand, private
respondents are the owners of the cargo truck which figured in the mishap; a certain Ruben Galang was the driver of the truck at the
time of the accident.

The antecedent facts are not disputed.

Between nine and ten o'clock in the morning of 8 January 1977, in Pulong Pulo Bridge along MacArthur Highway, between Angeles
City and San Fernando, Pampanga, a head-on-collision took place between an International cargo truck, Loadstar, with Plate No.
RF912-T Philippines '76 owned by private respondents, and driven by Ruben Galang, and a Ford Escort car bearing Plate No. S2-850
Pampanga '76 driven by Jose Koh. The collision resulted in the deaths of Jose Koh, Kim Koh McKee and Loida Bondoc, and physical
injuries to George Koh McKee, Christopher Koh McKee and Araceli Koh McKee, all passengers of the Ford Escort.

Jose Koh was the father of petitioner Araceli Koh McKee, the mother of minors George, Christopher and Kim Koh McKee. Loida
Bondoc, on the other hand, was the baby sitter of one and a half year old Kim. At the time of the collision, Kim was seated on the lap
of Loida Bondoc who was at the front passenger's seat of the car while Araceli and her two (2) sons were seated at the car's back
seat.

Immediately before the collision, the cargo truck, which was loaded with two hundred (200) cavans of rice weighing about 10,000
kilos, was traveling southward from Angeles City to San Fernando Pampanga, and was bound for Manila. The Ford Escort, on the
other hand, was on its way to Angeles City from San Fernando. When the northbound car was about (10) meters away from the
southern approach of the bridge, two (2) boys suddenly darted from the right side of the road and into the lane of the car. The boys
were moving back and forth, unsure of whether to cross all the way to the other side or turn back. Jose Koh blew the horn of the car,
swerved to the left and entered the lane of the truck; he then switched on the headlights of the car, applied the brakes and
thereafter attempted to return to his lane. Before he could do so, his car collided with the truck. The collision occurred in the lane of
the truck, which was the opposite lane, on the said bridge.

The incident was immediately reported to the police station in Angeles City; consequently, a team of police officers was forthwith
dispatched to conduct an on the spot investigation. In the sketch 1 prepared by the investigating officers, the bridge is described to
be sixty (60) "footsteps" long and fourteen (14) "footsteps" wide — seven (7) "footsteps" from the center line to the inner edge of
the side walk on both sides. 2 Pulong Pulo Bridge, which spans a dry brook, is made of concrete with soft shoulders and concrete
railings on both sides about three (3) feet high.

The sketch of the investigating officer discloses that the right rear portion of the cargo truck was two (2) "footsteps" from the edge
of the right sidewalk, while its left front portion was touching the center line of the bridge, with the smashed front side of the car
resting on its front bumper. The truck was about sixteen (16) "footsteps" away from the northern end of the bridge while the car
was about thirty-six (36) "footsteps" from the opposite end. Skid marks produced by the right front tire of the truck measured nine
(9) "footsteps", while skid marks produced by the left front tire measured five (5) "footsteps." The two (2) rear tires of the truck,
however, produced no skid marks.

In his statement to the investigating police officers immediately after the accident, Galang admitted that he was traveling at thirty
(30) miles (48 kilometers) per hour.

As a consequence of the collision, two (2) cases, Civil Case No. 4477 and No. 4478, were filed on 31 January 1977 before the then
Court of First Instance of Pampanga and were raffled to Branch III and Branch V of the said court, respectively. In the first, herein
petitioners in G.R. No. 68103 prayed for the award of P12,000.00 as indemnity for the death of Jose Koh, P150,000.00 as moral
damages, P60,000.00 as exemplary damages, P10,000.00 for litigation expenses, P6,000.00 for burial expenses, P3,650.00 for the
burial lot and P9,500.00 for the tomb, plus attorney's fees. 3 In the second case, petitioners in G.R. No. 68102 prayed for the
following: (a) in connection with the death of Kim McKee, the sum of P12,000.00 as death benefit, P3,150.00 for funeral services,
P3,650.00 for the cemetery lot, P3,000.00 for the tomb, P50,000.00 as moral damages, P10,000.00 as exemplary damages and
P2,000.00 as miscellaneous damages; (b) in the case of Araceli Koh McKee, in connection with the serious physical injuries suffered,
the sum of P100,000.00 as moral damages, P20,000.00 as exemplary damages, P12,000.00 for loss of earnings, P5,000.00 for the
hospitalization expenses up to the date of the filing of the complaint; and (c) with respect to George McKee, Jr., in connection with
the serious physical injuries suffered, the sum of P50,000.00 as moral damages, P20,000.00 as exemplary damages and the following
medical expenses: P3,400 payable to the Medical Center, P3,500.00 payable to the St. Francis Medical Center, P5,175.00 payable to
the Clark Air Base Hospital, and miscellaneous expenses amounting to P5,000.00. They also sought an award of attorney's fees
amounting to 25% of the total award plus traveling and hotel expenses, with costs. 4

On 1 March 1977, an Information charging Ruben Galang with the crime of "Reckless Imprudence Resulting to (sic) Multiple
Homicide and Physical Injuries and Damage to Property" was filed with the trial court. It was docketed as Criminal Case No. 3751 and
was raffled to Branch V of the court, the same Branch where Civil Case No. 4478 was assigned. 5

In their Answer with Counterclaim in Civil Case No. 4477, private respondents asserted that it was the Ford Escort car which
"invaded and bumped (sic) the lane of the truck driven by Ruben Galang and, as counterclaim, prayed for the award of P15,000.00 as
attorney's fees, P20,000.00 as actual and liquidated damages, P100,000.00 as moral damages and P30,000.00 as business losses. 6 In
Civil Case No. 4478, private respondents first filed a motion to dismiss on grounds of pendency of another action (Civil Case No.
4477) and failure to implead an indispensable party, Ruben Galang, the truck driver; they also filed a motion to consolidate the case
with Civil Case No. 4477 pending before Branch III of the same court, which was opposed by the plaintiffs. 7 Both motions were
denied by Branch V, then presided over by Judge Ignacio Capulong. Thereupon, private respondents filed their Answer with Counter-
claim 8 wherein they alleged that Jose Koh was the person "at fault having approached the lane of the truck driven by Ruben Galang,
. . . which was on the right lane going towards Manila and at a moderate speed observing all traffic rules and regulations applicable
under the circumstances then prevailing;" in their counterclaim, they prayed for an award of damages as may be determined by the
court after due hearing, and the sums of P10,000.00 as attorney's fees and P5,000.00 as expenses of litigation.

Petitioners filed their Answers to the Counterclaims in both cases.

To expedite the proceedings, the plaintiffs in Civil Case No. 4478 filed on 27 March 1978 a motion to adopt the testimonies of
witnesses taken during the hearing of Criminal Case No. 3751, which private respondents opposed and which the court
denied. 9 Petitioners subsequently moved to reconsider the order denying the motion for consolidation, 10 which Judge Capulong
granted in the Order of 5 September 1978; he then directed that Civil Case No. 4478 be consolidated with Civil Case No. 4477 in
Branch III of the court then presided over by Judge Mario Castañeda, Jr.

Left then with Branch V of the trial court was Criminal Case No. 3751.

In the civil cases, the plaintiffs presented as witnesses Araceli Koh McKee, Fernando Nuñag, Col. Robert Fitzgerald, Primitivo Parel,
Eugenio Tanhueco, Carmen Koh and Antonio Koh, 11 and offered several documentary exhibits. Upon the other hand, private
respondents presented as witnesses Ruben Galang, Zenaida Soliman, Jaime Tayag and Roman Dayrit. 12

In the criminal case, the prosecution presented as witnesses Mrs. Araceli McKee, Salud Samia, Pfc. Fernando Nuñag, Dr. Ramon
Panlilio, Dr. Robert Fitzgerald, Dr. Roberto Yuson, Dr. Hector, Ulanday, Pfc. Benigno de Leon, Marina Bolos, Primitivo Parel, Rogelio
Pineda, Benito Caraan and Eugenio Tanhueco, and offered several documentary exhibits. 13 Upon the other hand, the defense
presented the accused Ruben Galang, Luciano Punzalan, Zenaida Soliman and Roman Dayrit, and offered documentary exhibits. 14

On 1 October 1980, Judge Capulong rendered a decision against the accused Ruben Galang in the aforesaid criminal case. The
dispositive portion of the decision reads as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered finding the accused Ruben Galang guilty
beyond reasonable doubt of the crime charged in the information and after applying the provisions of Article 365
of the Revised Penal Code and indeterminate sentence law, this Court, imposes upon said accused Ruben Galang
the penalty of six (6) months of arresto mayor as minimum to two (2) years, four (4) months and one (1) day
of prision correccional as maximum; the accused is further sentenced to pay and indemnify the heirs of Loida
Bondoc the amount of P12,000.00 as indemnity for her death; to reimburse the heirs of Loida Bondoc the amount
of P2,000.00 representing the funeral expenses; to pay the heirs of Loida Bondoc the amount of P20,000.00
representing her loss of income; to indemnify and pay the heirs of the deceased Jose Koh the value of the car in
the amount of P53,910.95, and to pay the costs. 15

The aforecited decision was promulgated only on 17 November 1980; on the same day, counsel for petitioners filed with Branch III
of the court — where the two (2) civil cases were pending — a manifestation to that effect and attached thereto a copy of the
decision. 16

Upon the other hand, Judge Mario Castañeda, Jr. dismissed the two (2) civil cases on 12 November 1980 and awarded the private
respondents moral damages, exemplary damages and attorney's fees. 17 The dispositive portion of the said decision reads as follows:

WHEREFORE, finding the preponderance of evidence to be in favor of the defendants and against the plaintiffs,
these cases are hereby ordered DISMISSED with costs against the plaintiffs. The defendants had proven their
counter-claim, thru evidences (sic) presented and unrebutted. Hence, they are hereby awarded moral and
exemplary damages in the amount of P100,000.00 plus attorney's fee of P15,000.00 and litigation expenses for
(sic) P2,000.00. The actual damages claimed for (sic) by the defendants is (sic) hereby dismissing for lack of proof to
that effect (sic). 18

A copy of the decision was sent by registered mail to the petitioners on 28 November 1980 and was received on 2 December 1980. 19

Accused Ruben Galang appealed the judgment of conviction to the Court of Appeals. The appeal was docketed as C.A.-G.R. Blg.
24764-CR and was assigned to the court's Third Division. Plaintiffs in Civil Cases Nos. 4477 and 4478 likewise separately appealed the
12 November 1980 decision to the appellate court. The appeals were docketed as C.A.-G.R. No. 69041-R and C.A.-G.R. No. 69040-R,
respectively, and were assigned to the Fourth Civil Cases Division.

On 4 October 1982, the respondent Court promulgated its decision 20 in C.A.-G.R. Blg. 24764-CR affirming the conviction of
Galang. 21 The dispositive portion of the decision reads:

DAHIL DITO, ang hatol na paksa ng naritong paghahabol ay Aming pinagtitibay sa kanyang kabuuan. Ang
naghahabol pa rin ang pinagbabayad ng gugol ng paghahabol.
A motion for reconsideration of the decision was denied by the respondent Court in its Kapasiyahan promulgated on 25 November
1982. 22 A petition for its review 23 was filed with this Court; said petition was subsequently denied. A motion for its reconsideration
was denied with finality in the Resolution of 20 April 1983. 24

On 29 November 1983, respondent Court, by then known as the Intermediate Appellate Court, promulgated its consolidated
decision in A.C.-G.R. CV Nos. 69040 and 69041, 25 the dispositive portion of which reads:

WHEREFORE, the decision appealed from it hereby reversed and set aside and another one is rendered, ordering
defendants-appellees to pay plaintiffs-appellants as follows:

For the death of Jose Koh:

P 50,000.00 as moral damages

P 12,000.00 as death indemnity
P 16,000.00 for the lot and tomb (Exhs. U and U-1)
P 4,000.00 expenses for holding a wake (p. 9, tsn April 19, 1979)
P 950.00 for the casket (Exh. M)
P 375.00 for the vault services (Exhs. V and V-1)

For the death of Kim Koh McKee:

P 50,000.00 as moral damages

P 12,000.00 as death indemnity
P 1,000.00 for the purchase of the burial lot (Exh. M)
P 950.00 for funeral services (Exh. M-1)
P 375.00 for vault services (Exhs. V and V-1)

For the physical injuries suffered by George Koh McKee:

P 25,000.00 as moral damages

P 672.00 for Clark Field Hospital (Exh. E)
P 4,384.00 paid to Angeles Medical Clinic (Exhs. D, D-1 and
D-2)
P 1,555.00 paid to St. Francis Medical Center (Exhs. B and B-1)

For the physical injuries suffered by Araceli Koh McKee:

P 25,000.00 as moral damages

P 1,055.00 paid to St. Francis Medical Center (Exhs. G and
G-1)
P 75.00 paid to St. Francis Medical Center (Exhs. G-2 and G-3)
P 428.00 to Carmelite General Hospital (Exh. F)
P 114.20 to Muñoz Clinic (Exh. MM)

For the physical injuries suffered by Christopher Koh McKee:

P 10,000.00 as moral damages

P 1,231.10 to St. Francis Medical Center (Exhs. L and L-1)
P 321.95 to F.C.E.A. Hospital (Exhs. G and D-1)

In addition, We award P10,000.00 as counsel (sic) fees in Civil Case No. 4477 and another P10,000.00; as counsel
(sic) fees in Civil Case No. 4478.

No pronouncement as to costs.

SO ORDERED. 26

The decision is anchored principally on the respondent Court's findings that it was Ruben Galang's inattentiveness or reckless
imprudence which caused the accident. The appellate court further said that the law presumes negligence on the part of the
defendants (private respondents), as employers of Galang, in the selection and supervision of the latter; it was further asserted that
these defendants did not allege in their Answers the defense of having exercised the diligence of a good father of a family in
selecting and supervising the said employee. 27 This conclusion of reckless imprudence is based on the following findings of fact:

In the face of these diametrically opposed judicial positions, the determinative issue in this appeal is posited in the
fourth assigned error as follows:

IV
 THE TRIAL COURT ERRED WHEN IT HELD THE (sic) DRIVER OF THE TRUCK STOPPED HIS TRUCK BLEW HIS HORN
SWITCHED ON HIS HEADLIGHTS AND COULD NOT SWERVE TO THE RIGHT.

Supportive of plaintiffs' version, principal witness Araceli Koh McKee testified thus:

Q What happened after that, as you approached the bridge?

A When we were approaching the bridge, two (2) boys tried to cross the right lane on the right
side of the highway going to San Fernando. My father, who is (sic) the driver of the car tried to
avoid the two (2) boys who were crossing, he blew his horn and swerved to the left to avoid
hitting the two (2) boys. We noticed the truck, he switched on the headlights to warn the truck
driver, to slow down to give us the right of way to come back to our right lane.

Q Did the truck slow down?

A No, sir, it did not, just (sic) continued on its way.

Q What happened after that?

A After avoiding the two (2) boys, the car tried to go back to the right lane since the truck is (sic)
coming, my father stepped on the brakes and all what (sic) I heard is the sound of impact (sic),
sir. (tsn, pp. 5-6, July 22, 1977); or (Exhibit "O" in these Civil Cases).

x x x           x x x          x x x

Q Mrs. how did you know that the truck driven by the herein accused, Ruben Galang did not
reduce its speed before the actual impact of collision (sic) as you narrated in this Exhibit "1," how
did you know (sic)?

A It just kept on coming, sir. If only he reduced his speed, we could have got (sic) back to our
right lane on side (sic) of the highway, sir. (tsn. pp. 33-34 July 22, 1977) or (Exhibit "O" in these
Civil Cases) (pp. 30-31, Appellants' Brief).

Plaintiffs' version was successfully corroborated to Our satisfaction by the following facts and circumstances:

1. An impartial eye-witness to the mishap, Eugenio Tanhueco, declared that the truck stopped only when it had
already collided with the car:

xxx xxx xxx

Tanhueco repeated the same testimony during the hearing in the criminal case:

xxx xxx xxx

Tanhueco could (sic) not be tagged as an accommodation witness because he was one of the first to arrive at the
scene of the accident. As a matter of fact, he brought one of the injured passengers to the hospital.

We are not prepared to accord faith and credit to defendants' witnesses, Zenaida Soliman, a passenger of the
truck, and Roman Dayrit, who supposedly lived across the street.

Regarding Soliman, experience has shown that in the ordinary course of events people usually take the side of the
person with whom they are associated at the time of the accident, because, as a general rule, they do not wish to
be identified with the person who was at fault. Thus an imaginary bond is unconsciously created among the several
persons within the same group (People vs. Vivencio, CA-G.R. No. 00310-CR, Jan. 31, 1962).

With respect to Dayrit, We can not help suspecting (sic) that he is an accommodation witness. He did not go to the
succor of the injured persons. He said he wanted to call the police authorities about the mishap, but his phone had
no dial tone. Be this (sic) as it may, the trial court in the criminal case acted correctly in refusing to believe Dayrit.

2. Exhibit 2, the statement of Galang, does not include the claim that Galang stopped his truck at a safe distance
from the car, according to plaintiffs (p. 25, Appellants' Brief). This contention of appellants was completely
passed sub-silencio or was not refuted by appellees in their brief. Exhibit 2 is one of the exhibits not included in the
record. According to the Table of Contents submitted by the court below, said Exhibit 2 was not submitted by
defendants-appellees. In this light, it is not far-fetched to surmise that Galang's claim that he stopped was an
eleventh-hour desperate attempt to exculpate himself from imprisonment and damages.

3. Galang divulged that he stopped after seeing the car about 10 meters away:
 ATTY. SOTTO:

Q Do I understand from your testimony that inspite of the fact that you admitted that the road is
straight and you may be able to (sic) see 500-1000 meters away from you any vehicle, you first
saw that car only about ten (10) meters away from you for the first time?

x x x           x x x          x x x

A I noticed it, sir, that it was about ten (10) meters away.

ATTY. SOTTO:

Q So, for clarification, you clarify and state under your oath that you have (sic) not noticed it
before that ten (10) meters? (Tsn. 3 to 5, Sept. 18, 1979). (p. 16, Appellants' Brief)

Galang's testimony substantiate (sic) Tanhueco's statement that Galang stopped only because of the impact. At ten
(10) meters away, with the truck running at 30 miles per hour, as revealed in Galang's affidavit (Exh. 2; p. 25,
Appellants' brief), it is well-nigh impossible to avoid a collision on a bridge.

5. Galang's truck stopped because of the collision, and not because he waited for Jose Koh to return to his proper
lane. The police investigator, Pfc. Fernando L. Nuñag, stated that he found skid marks under the truck but there
were not (sic) skid marks behind the truck (pp. 19-20, t.s.n., Nov. 3, 1978). The presence of skid marks show (sic)
that the truck was speeding. Since the skid marks were found under the truck and none were found at the rear of
the truck, the reasonable conclusion is that the skid marks under the truck were caused by the truck's front wheels
when the trucks (sic) suddenly stopped seconds before the mishap in an endeavor to avoid the same. But, as
aforesaid, Galang saw the car at barely 10 meters away, a very short distance to avoid a collision, and in his futile
endeavor to avoid the collision he abruptly stepped on his brakes but the smashup happened just the same.

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

On the question of damages, the claims of appellants were amply proven, but the items must be reduced. 28

A motion for reconsideration alleging improper appreciation of the facts was subsequently filed by private respondents on the basis
of which the respondent Court, in its Resolution of 3 April 1984, 29 reconsidered and set aside its 29 November 1983 decision and
affirmed in toto the trial court's judgment of 12 November 1980. A motion to reconsider this Resolution was denied by the
respondent Court on 4 July 1984.30

Hence, this petition.

Petitioners allege that respondent Court:

. . . COMMITTED A VERY SERIOUS AND GRAVE ERROR WHEN IT TOTALLY REVERSED ITS DECISION BY MERELY
BASING IT FROM (sic) A MERE "PRESUMPTION," TOTALLY DISREGARDING THE PRIVATE RESPONDENTS' DRIVER'S
ADMISSIONS AND CONFESSIONS, WHO EXCLUSIVELY COMMITTED THE PROXIMATE CAUSE OF THE ACCIDENT (sic),
FURTHER, IT ALSO DISREGARDED THE EVIDENCE ADDUCED AND FOUND IN THE RECORDS; THEREFORE,
RESPONDENT COURT'S RESOLUTIONS (ANNEXES A and B, PETITION) ARE CLEARLY ERRONEOUS, PURELY BASED ON
SPECULATIONS, CONJECTURES AND WITHOUT SURE FOUNDATION IN THE EVIDENCE.

II

. . . GRAVELY ABUSED ITS DISCRETION AND ERRED WHEN IN EFFECT IT DISREGARDED A DOCTRINE LAID DOWN BY
THIS HONORABLE COURT BY STATING AMONG OTHERS, "IT CANNOT CATEGORICALLY ADOPT THE FINDINGS OF
GUILT IN THE CRIMINAL CASE WHERE THE DRIVER OF THE TRUCK INVOLVED IN THE ACCIDENT WAS INDICTED.

III

. . . PATENTLY COMMITTED GRAVE ABUSE OF DISCRETION AND MADE A MISLEADING PRONOUNCEMENT, WHEN IT
HELD: "IT IS THUS INCUMBENT UPON THE PLAINTIFFS-APPELLANTS (APPELLEES WRONGLY MENTIONED IN THE
 RESOLUTION) TO PROVE THEIR ALLEGATIONS THAT THE PROXIMATE CAUSE OF THE ACCIDENT WAS THE
NEGLIGENCE OF PRIVATE RESPONDENTS' DRIVER.

IV

. . . COMMITTED ANOTHER GRIEVIOUS (sic) ERROR; COMMITTED GRAVE ABUSE OF DISCRETION AND CITED
ANOTHER CASE WHICH IS CLEARLY INAPPLICABLE TO THESE CASES.

. . . COMMITTED A PATENT ERROR AND GRAVELY ABUSED ITS DISCRETION IN ADOPTING THE FINDINGS OF THE
TRIAL COURT WHICH ARE CLEARLY ERRONEOUS AND CONTRARY TO THE EVIDENCE FOUND IN THE RECORDS,
SPECIALLY THEY (sic) ARE CONTRARY TO THE ADMITTED FACTS AND JUDICIAL ADMISSIONS MADE BY THE PRIVATE
RESPONDENTS' DRIVER.

VI

. . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE OF DISCRETION AND GRAVELY ERRED WHEN IT
AWARDED DAMAGES TO THE PRIVATE RESPONDENTS WHEN SAID AWARD IS NOT SUPPORTED BY EVIDENCE, IN
THE RECORDS, AND SAID AWARD IS NOT ALLOWED BY LAW AND THE CONSISTENT DECISIONS OF THIS HONORABLE
COURT.

VII

. . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE OF DISCRETION AND GRAVELY ERRED WHEN IT
ERRONEOUSLY SET ASIDE ITS DECISION AWARDING DAMAGES TO PETITIONERS WHICH IS CLEARLY IN
ACCORDANCE WITH THE EVIDENCE, THE LAW AND JURISPRUDENCE RELATIVE TO THE AWARD OF DAMAGES. 31

In the Resolution of 12 September 1984, We required private respondents to Comment on the petition. 32 After the said
Comment 33 was filed, petitioners submitted a Reply 34 thereto; this Court then gave due course to the instant petitions and required
petitioners to file their Brief, 35 which they accordingly complied with.

There is merit in the petition. Before We take on the main task of dissecting the arguments and counter-arguments, some
observations on the procedural vicissitudes of these cases are in order.

Civil Cases Nos. 4477 and 4478, which were for the recovery of civil liability arising from a quasi-delict under Article 2176 in relation
to Article 2180 of the Civil Code, were filed ahead of Criminal Case No. 3751. Civil Case No. 4478 was eventually consolidated with
Civil Case No. 4477 for joint trial in Branch III of the trial court. The records do not indicate any attempt on the part of the parties,
and it may therefore be reasonably concluded that none was made, to consolidate Criminal Case No. 3751 with the civil cases,
or vice-versa. The parties may have then believed, and understandably so, since by then no specific provision of law or ruling of this
Court expressly allowed such a consolidation, that an independent civil action, authorized under Article 33 in relation to Article 2177
of the Civil Code, such as the civil cases in this case, cannot be consolidated with the criminal case. Indeed, such consolidation could
have been farthest from their minds as Article 33 itself expressly provides that the "civil action shall proceed independently of the
criminal prosecution, and shall require only a preponderance of evidence." Be that as it may, there was then no legal impediment
against such consolidation. Section 1, Rule 31 of the Rules of Court, which seeks to avoid a multiplicity of suits, guard against
oppression and abuse, prevent delays, clear congested dockets to simplify the work of the trial court, or in short, attain justice with
the least expense to the parties litigants, 36 would have easily sustained a consolidation, thereby preventing the unseeming, if no
ludicrous, spectacle of two (2) judges appreciating, according to their respective orientation, perception and perhaps even prejudice,
the same facts differently, and thereafter rendering conflicting decisions. Such was what happened in this case. It should not,
hopefully, happen anymore. In the recent case of Cojuangco vs. Court or Appeals, 37 this Court held that the present provisions of
Rule 111 of the Revised Rules of Court allow a consolidation of an independent civil action for the recovery of civil liability authorized
under Articles 32, 33, 34 or 2176 of the Civil Code with the criminal action subject, however, to the condition that no final judgment
has been rendered in that criminal case.

Let it be stressed, however, that the judgment in Criminal Case No. 3751 finding Galang guilty of reckless imprudence, although
already final by virtue of the denial by no less than this Court of his last attempt to set aside the respondent Court's affirmance of the
verdict of conviction, has no relevance or importance to this case.

As We held in Dionisio vs. Alvendia,  38 the responsibility arising from fault or negligence in a quasi-delict is entirely separate and
distinct from the civil liability arising from negligence under the Penal Code. And, as more concretely stated in the concurring
opinion of Justice J.B.L. Reyes, "in the case of independent civil actions under the new Civil Code, the result of the criminal case,
whether acquittal or conviction, would be entirely irrelevant to the civil action." 39 In Salta vs. De Veyra and PNB vs. Purisima, 40 this
Court stated:

. . . It seems perfectly reasonable to conclude that the civil actions mentioned in Article 33, permitted in the same
manner to be filed separately from the criminal case, may proceed similarly regardless of the result of the criminal
case.
 Indeed, when the law has allowed a civil case related to a criminal case, to be filed separately and to proceed
independently even during the pendency of the latter case, the intention is patent to make the court's disposition
of the criminal case of no effect whatsoever on the separate civil case. This must be so because the offenses
specified in Article 33 are of such a nature, unlike other offenses not mentioned, that they may be made the
subject of a separate civil action because of the distinct separability of their respective juridical cause or basis of
action . . . .

What remains to be the most important consideration as to why the decision in the criminal case should not be considered in this
appeal is the fact that private respondents were not parties therein. It would have been entirely different if the petitioners' cause of
action was for damages arising from a delict, in which case private respondents' liability could only be subsidiary pursuant to Article
103 of the Revised Penal Code. In the absence of any collusion, the judgment of conviction in the criminal case against Galang would
have been conclusive in the civil cases for the subsidiary liability of the private respondents. 41

And now to the merits of the petition.

It is readily apparent from the pleadings that the principal issue raised in this petition is whether or not respondent Court's findings
in its challenged resolution are supported by evidence or are based on mere speculations, conjectures and presumptions.

The principle is well-established that this Court is not a trier of facts. Therefore, in an appeal by certiorari under Rule 45 of the
Revised Rules of Court, only questions of law may be raised. The resolution of factual issues is the function of the lower courts
whose findings on these matters are received with respect and are, as a rule, binding on this Court. 42

The foregoing rule, however, is not without exceptions. Findings of facts of the trial courts and the Court of Appeals may be set aside
when such findings are not supported by the evidence or when the trial court failed to consider the material facts which would have
led to a conclusion different from what was stated in its judgment. 43 The same is true where the appellate court's conclusions are
grounded entirely on conjectures, speculations and surmises 44 or where the conclusions of the lower courts are based on a
misapprehension of facts. 45

It is at once obvious to this Court that the instant case qualifies as one of the aforementioned exceptions as the findings and
conclusions of the trial court and the respondent Court in its challenged resolution are not supported by the evidence, are based on
an misapprehension of facts and the inferences made therefrom are manifestly mistaken. The respondent Court's decision of 29
November 1983 makes the correct findings of fact.

In the assailed resolution, the respondent Court held that the fact that the car improperly invaded the lane of the truck and that the
collision occurred in said lane gave rise to the presumption that the driver of the car, Jose Koh, was negligent. On the basis of this
presumed negligence, the appellate court immediately concluded that it was Jose Koh's negligence that was the immediate and
proximate cause of the collision. This is an unwarranted deduction as the evidence for the petitioners convincingly shows that the
car swerved into the truck's lane because as it approached the southern end of the bridge, two (2) boys darted across the road from
the right sidewalk into the lane of the car. As testified to by petitioner Araceli Koh McKee:

Q What happened after that, as you approached the bridge?

A When we were approaching the bridge, two (2) boys tried to cross the right lane on the right
side of the highway going to San Fernando. My father, who is (sic) the driver of the car tried to
avoid the two (2) boys who were crossing, he blew his horn and swerved to the left to avoid
hitting the two (2) boys. We noticed the truck, he switched on the headlights to warn the truck
driver, to slow down to give us the right of way to come back to our right lane.

Q Did the truck slow down?

A No sir, it did not, just (sic) continued on its way.

Q What happened after that?

A After avoiding the two (2) boys, the car tried to go back to the right lane since the truck is (sic)
coming, my father stepped on the brakes and all what (sic) I heard is the sound of impact (sic),
sir. 46

Her credibility and testimony remained intact even during cross examination. Jose Koh's entry into the lane of the truck was
necessary in order to avoid what was, in his mind at that time, a greater peril — death or injury to the two (2) boys. Such act can
hardly be classified as negligent.

Negligence was defined and described by this Court in Layugan vs. Intermediate Appellate Court,  47 thus:

. . . Negligence is the omission to do something which a reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and
reasonable man would not do (Black's Law Dictionary, Fifth Edition, 930), or as Judge Cooley defines it, "(T)he
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." (Cooley on Torts,
Fourth Edition, vol. 3, 265)

In Picart vs. Smith (37 Phil 809, 813), decided more than seventy years ago but still a sound rule, (W)e held:

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. . . .

In Corliss vs. Manila Railroad Company,  48 We held:

. . . Negligence is want of the care required by the circumstances. It is a relative or comparative, not an absolute,
term and its application depends upon the situation of the parties and the degree of care and vigilance which the
circumstances reasonably require. 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. (citing Ahern v. Oregon Telephone Co., 35 Pac. 549
(1894).

On the basis of the foregoing definition, the test of negligence and the facts obtaining in this case, it is manifest that no negligence
could be imputed to Jose Koh. Any reasonable and ordinary prudent man would have tried to avoid running over the two boys by
swerving the car away from where they were even if this would mean entering the opposite lane. Avoiding such immediate peril
would be the natural course to take particularly where the vehicle in the opposite lane would be several meters away and could very
well slow down, move to the side of the road and give way to the oncoming car. Moreover, under what is known as the emergency
rule, "one who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may
be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection
may appear to have been a better method, unless the emergency in which he finds himself is brought about by his own
negligence." 49

Considering the sudden intrusion of the two (2) boys into the lane of the car, We find that Jose Koh adopted the best means possible
in the given situation to avoid hitting them. Applying the above test, therefore, it is clear that he was not guilty of negligence.

In any case, assuming, arguendo that Jose Koh is negligent, it cannot be said that his negligence was the proximate cause of the
collision. Proximate cause has been defined as:

. . . that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces
the injury, and without which the result would not have occurred. And more comprehensively, the proximate legal
cause is that acting first and producing the injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each having a close causal connection with its immediate
predecessor, the final event in the chain immediately effecting the injury as a natural and probable result of the
cause which first acted, under such circumstances that the person responsible for the first event should, as an
ordinary 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. 50

Applying the above definition, although it may be said that the act of Jose Koh, if at all negligent, was the initial act in the chain of
events, it cannot be said that the same caused the eventual injuries and deaths because of the occurrence of a sufficient intervening
event, the negligent act of the truck driver, which was the actual cause of the tragedy. The entry of the car into the lane of the truck
would not have resulted in the collision had the latter heeded the emergency signals given by the former to slow down and give the
car an opportunity to go back into its proper lane. Instead of slowing down and swerving to the far right of the road, which was the
proper precautionary measure under the given circumstances, the truck driver continued at full speed towards the car. The truck
driver's negligence becomes more apparent in view of the fact that the road is 7.50 meters wide while the car measures 1.598
meters and the truck, 2.286 meters, in width. This would mean that both car and truck could pass side by side with a clearance of
3.661 meters to spare. 51 Furthermore, the bridge has a level sidewalk which could have partially accommodated the truck. Any
reasonable man finding himself in the given situation would have tried to avoid the car instead of meeting it head-on.

The truck driver's negligence is apparent in the records. He himself said that his truck was running at 30 miles (48 kilometers) per
hour along the bridge while the maximum speed allowed by law on a bridge 52 is only 30 kilometers per hour. Under Article 2185 of
the Civil Code, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation.
We cannot give credence to private respondents' claim that there was an error in the translation by the investigating officer of the
truck driver's response in Pampango as to whether the speed cited was in kilometers per hour or miles per hour. The law presumes
that official duty has been regularly performed; 53 unless there is proof to the contrary, this presumption holds. In the instant case,
private respondents' claim is based on mere conjecture.

The truck driver's negligence was likewise duly established through the earlier quoted testimony of petitioner Araceli Koh McKee
which was duly corroborated by the testimony of Eugenio Tanhueco, an impartial eyewitness to the mishap.

Araceli Koh McKee testified further, thus:

 x x x           x x x          x x x

Q Mrs. how did you know that the truck driven by the herein accused, Ruben Galang did not
reduce its speed before the actual impact of collision as you narrated in this Exhibit "1," how did
you know?

A It just kept on coming, sir. If only he reduced his speed, we could have got (sic) back to our
right lane on side (sic) of the highway, sir. (tsn, pp. 33-34, July 22, 1977) or (Exhibit; "O" in these
Civil Cases) (pp. 30-31, Appellants' Brief)54

while Eugenio Tanhueco testified thus:

Q When you saw the truck, how was it moving?

A  It was moving 50 to 60 kilometers per hour, sir.

Q Immediately after you saw this truck, do you know what happened?

A I saw the truck and a car collided (sic), sir, and I went to the place to help the victims. (tsn. 28,
April 19, 1979)

x x x           x x x          x x x

Q From the time you saw the truck to the time of the impact, will you tell us if the said truck ever
stopped?

A  I saw it stopped (sic) when it has (sic) already collided with the car and it was already
motionless. (tsn. 31, April 19, 1979; Emphasis Supplied). (p. 27, Appellants' Brief). 55

Clearly, therefore, it was the truck driver's subsequent  negligence in failing to take the proper measures and degree of care
necessary to avoid the collision which was the proximate cause of the resulting accident.

Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds application here. Last clear chance is a doctrine in the
law of torts which states that the contributory negligence of the party injured will not defeat the claim for damages if it is shown
that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the negligence of the
injured party. In such cases, the person who had the last clear chance to avoid the mishap is considered in law solely responsible for
the consequences thereof.56

In Bustamante vs. Court of Appeals, 57 We held:

The respondent court adopted the doctrine of "last clear chance." The doctrine, stated broadly, is that the
negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears that
the defendant, by exercising reasonable care and prudence, might have avoided injurious consequences to the
plaintiff notwithstanding the plaintiff's negligence. In other words, the doctrine of last clear chance means that
even though a person's own acts may have placed him in a position of peril, and an injury results, the injured
person is entitled to recovery (sic). As the doctrine is usually stated, a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or that of a third person
imputed to the opponent is considered in law solely responsible for the consequences of the accident. (Sangco,
Torts and Damages, 4th Ed., 1986, p. 165).

The practical import of the doctrine is that a negligent defendant is held liable to a negligent plaintiff, or even to a
plaintiff who has been grossly negligent in placing himself in peril, if he, aware of the plaintiff's peril, or according
to some authorities, should have been aware of it in the reasonable exercise of due care, had in fact an
opportunity later than that of the plaintiff to avoid an accident (57 Am. Jur., 2d, pp. 798-799).

In Pantranco North Express, Inc., vs. Baesa, 58 We ruled:

The doctrine of last clear chance was defined by this Court in the case of Ong v. Metropolitan Water District, 104
Phil. 397 (1958), in this wise:

The doctrine of the last clear chance simply, means that the negligence of a claimant does not
preclude a recovery for the negligence of defendant where it appears that the latter, by
exercising reasonable care and prudence, might have avoided injurious consequences to
claimant notwithstanding his negligence.

The doctrine applies only in a situation where the plaintiff was guilty of prior or antecedent negligence but the
defendant, who had the last fair chance to avoid the impending harm and failed to do so, is made liable for all the
consequences of the accident notwithstanding the prior negligence of the plaintiff [Picart v. Smith, 37 Phil. 809
 (1918); Glan People's Lumber and Hardware, et al. vs. Intermediate Appellate Court, Cecilia Alferez Vda. de Calibo,
et al., G.R. No. 70493, May, 18, 1989]. The subsequent negligence of the defendant in failing to exercise ordinary
care to avoid injury to plaintiff becomes the immediate or proximate cause of the accident which intervenes
between the accident and the more remote negligence of the plaintiff, thus making the defendant liable to the
plaintiff [Picart v. Smith, supra].

Generally, the last clear chance doctrine is invoked for the purpose of making a defendant liable to a plaintiff who
was guilty of prior or antecedent negligence, although it may also be raised as a defense to defeat claim (sic) for
damages.

Applying the foregoing doctrine, it is not difficult to rule, as We now rule, that it was the truck driver's negligence in failing to exert
ordinary care to avoid the collision which was, in law, the proximate cause of the collision. As employers of the truck driver, the
private respondents are, under Article 2180 of the Civil Code, directly and primarily liable for the resulting damages. The
presumption that they are negligent flows from the negligence of their employee. That presumption, however, is only juris
tantum, not  juris et de jure. 59 Their  only possible defense is that they exercised all the diligence of a good father of a family to
prevent the damage. Article 2180 reads as follows:

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.

xxx xxx xxx

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

xxx xxx xxx

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to prevent damage.

The diligence of a good father referred to means the diligence in the selection and supervision of employees. 60 The answers of the
private respondents in Civil Cases Nos. 4477 and 4478 did not interpose this defense. Neither did they attempt to prove it.

The respondent Court was then correct in its Decision of 29 November 1983 in reversing the decision of the trial court which
dismissed Civil Cases Nos. 4477 and 4478. Its assailed Resolution of 3 April 1984 finds no sufficient legal and factual moorings.

In the light of recent decisions of this Court, 61 the indemnity for death must, however, be increased from P12,000.00 to P50,000.00.

WHEREFORE, the instant petition is GRANTED. The assailed Resolution of the respondent Court of 3 April 1984 is SET ASIDE while its
Decision of 29 November 1983 in C.A.-G.R. CV Nos. 69040-41 is REINSTATED, subject to the modification that the indemnity for
death is increased from P12,000.00 to P50,000.00 each for the death of Jose Koh and Kim Koh McKee.

Costs against private respondents.

SO ORDERED.
G.R. No. 152040             March 31, 2006

MARIKINA AUTO LINE TRANSPORT CORPORATION and FREDDIE L. SUELTO, Petitioners,

vs.
PEOPLE OF THE PHILIPPINES and ERLINDA V. VALDELLON, Respondents.

DECISION

CALLEJO, SR., J.:

Before the Court is a Petition for Review on Certiorari of the Decision 1 of the Court of Appeals (CA) in CA-G.R. CR No. 16739 affirming
the Joint Decision of the Regional Trial Court (RTC) in Criminal Case No. Q-93-42629 and Civil Case No. Q-93-16051, where Freddie
Suelto was convicted of reckless imprudence resulting in damages to property.

Erlinda V. Valdellon is the owner of a two-door commercial apartment located at No. 31 Kamias Road, Quezon City. The Marikina
Auto Line Transport Corporation (MALTC) is the owner-operator of a passenger bus with Plate Number NCV-849. Suelto, its
employee, was assigned as the regular driver of the bus. 2

At around 2:00 p.m. on October 3, 1992, Suelto was driving the aforementioned passenger bus along Kamias Road, Kamuning,
Quezon City, going towards Epifanio de los Santos Avenue (EDSA). The bus suddenly swerved to the right and struck the terrace of
the commercial apartment owned by Valdellon located along Kamuning Road. 3 Upon Valdellon’s request, the court ordered Sergio
Pontiveros, the Senior Building Inspection Officer of the City Engineer’s Office, to inspect the damaged terrace. Pontiveros submitted
a report enumerating and describing the damages:

(1) The front exterior and the right side concrete columns of the covered terrace were vertically displaced from its original
position causing exposure of the vertical reinforcement.

(2) The beams supporting the roof and parapet walls are found with cracks on top of the displaced columns.

(3) The 6″ CHB walls at [the] right side of the covered terrace were found with cracks caused by this accident.

(4) The front iron grills and concrete balusters were found totally damaged and the later [sic] beyond repair. 4

He recommended that since the structural members made of concrete had been displaced, the terrace would have to be
demolished "to keep its monolithicness, and to insure the safety and stability of the building." 5

Photographs6 of the damaged terrace were taken. Valdellon commissioned Engr. Jesus R. Regal, Jr. to estimate the cost of repairs,
inclusive of labor and painting, and the latter pegged the cost at P171,088.46.7

In a letter dated October 19, 1992 addressed to the bus company and Suelto, Valdellon demanded payment of P148,440.00, within
10 days from receipt thereof, to cover the cost of the damage to the terrace. 8 The bus company and Suelto offered a P30,000.00
settlement which Valdellon refused.9

Valdellon filed a criminal complaint for reckless imprudence resulting in damage to property against Suelto. After the requisite
preliminary investigation, an Information was filed with the RTC of Quezon City. The accusatory portion of the Information reads:

That on or about the 3rd day of October 1992, in Quezon City, Philippines, the said accused, being then the driver and/or person in
charge of a Marikina Auto Line bus bearing Plate No. NVC-849, did then and there unlawfully, and feloniously drive, manage, and
operate the same along Kamias Road, in said City, in a careless, reckless, negligent, and imprudent manner, by then and there
making the said vehicle run at a speed greater than was reasonable and proper without taking the necessary precaution to avoid
accident to person/s and damage to property, and considering the condition of the traffic at said place at the time, causing as a
consequence of his said carelessness, negligence, imprudence and lack of precaution, the said vehicle so driven, managed and
operated by him to hit and bump, as in fact it hit and bump a commercial apartment belonging to ERLINDA V. VALDELLON located at
No. 31 Kamias Road, this City, thereby causing damages to said apartment in the total amount of P171,088.46, Philippine Currency,
to her damage and prejudice in the total amount aforementioned.

CONTRARY TO LAW.10

Valdellon also filed a separate civil complaint against Suelto and the bus company for damages. She prayed that after due
proceedings, judgment be rendered in her favor, thus:

WHEREFORE, it is respectfully prayed of this Honorable Court to issue a writ of preliminary attachment against the defendants upon
approval of plaintiff’s bond, and after trial on the merits, to render a decision in favor of the plaintiff, ordering the defendants, jointly
and severally, to pay –
 a) the total sum of P171,088.46 constituting the expenses for the repair of the damaged apartment of plaintiff, with
interests to be charged thereon at the legal rate from the date of the formal demand until the whole obligation is fully paid;

b) the sum of not less than P20,000.00 each as compensatory and exemplary damages;

c) the sum of P20,000.00 as attorney’s fees and the sum of P1,000.00 for each appearance of plaintiff’s counsel; and costs of
suit;

PLAINTIFF further prays for such other reliefs as may be just and equitable in the premises. 11

A joint trial of the two cases was ordered by the trial court. 12

The trial court conducted an ocular inspection of the damaged terrace, where defendants offered to have it repaired and restored to
its original state. Valdellon, however, disagreed because she wanted the building demolished to give way for the construction of a
new one.13

During the trial, Valdellon testified on the damage caused to the terrace of her apartment, and, in support thereof, adduced in
evidence a receipt for P35,000.00, dated October 20, 1993, issued by the BB Construction and Steel Fabricator for "carpentry,
masonry, welding job and electrical [work]." 14

Pontiveros of the Office of the City Engineer testified that there was a need to change the column of the terrace, but that the
building should also be demolished because "if concrete is destroyed, [one] cannot have it restored to its original position." 15

Engr. Jesus Regal, Jr., the proprietor of the SSP Construction, declared that he inspected the terrace and estimated the cost of
repairs, including labor, at P171,088.46.

Suelto testified that at 2:00 p.m. on October 3, 1992, he was driving the bus on its way to Ayala Avenue, Makati, Metro Manila.
When he reached the corner of K-H Street at Kamias Road, Quezon City, a passenger jeepney suddenly crossed from EDSA going to
V. Luna and swerved to the lane occupied by the bus. Suelto had to swerve the bus to the right upon which it hit the side front of the
terrace of Valdellon’s two-door apartment.16 Based on his estimate, the cost to the damage on the terrace of the apartment
amounted to P40,000.00.17 On cross-examination, Suelto declared that he saw the passenger jeepney when it was a meter away
from the bus. Before then, he had seen some passenger jeepneys on the right trying to overtake one another. 18

Architect Arnulfo Galapate testified that the cost of the repair of the damaged terrace amounted to P55,000.00.19

On April 28, 1994, the trial court rendered judgment finding Suelto guilty beyond reasonable doubt of reckless imprudence resulting
in damage to property, and ordered MALTC and Suelto to pay, jointly and severally, P150,000.00 to Valdellon, by way of actual and
compensatory damages, as well as attorney’s fees and costs of suit. The fallo of the decision reads:

WHEREFORE, finding the accused FREDDIE SUELTO Y LIWAG guilty beyond reasonable doubt of the crime of Reckless Imprudence
Resulting in Damage to Property, said accused is hereby sentenced to suffer imprisonment of ONE (1) YEAR.

With respect to the civil liability, judgment is hereby rendered in favor of plaintiff Erlinda Valdellon and against defendant Marikina
Auto Line Transport Corporation and accused Freddie Suelto, where both are ordered, jointly and severally, to pay plaintiff:

a. the sum of P150,000.00, as reasonable compensation sustained by plaintiff for her damaged apartment;

b. the sum of P20,000.00, as compensatory and exemplary damages;

c. the sum of P20,000.00, as attorney’s fees; and,

d. the costs of suit.

SO ORDERED.20

MALTC and Suelto, now appellants, appealed the decision to the CA, alleging that the prosecution failed to prove Suelto’s guilt
beyond reasonable doubt. They averred that the prosecution merely relied on Valdellon, who testified only on the damage caused to
the terrace of her apartment which appellants also alleged was excessive. Appellant Suelto further alleged that he should be
acquitted in the criminal case for the prosecution’s failure to prove his guilt beyond reasonable doubt. He maintained that, in an
emergency case, he was not, in law, negligent. Even if the appellate court affirmed his conviction, the penalty of imprisonment
imposed on him by the trial court is contrary to law.

In its Brief for the People of the Philippines, the Office of the Solicitor General (OSG) submitted that the appealed decision should be
affirmed with modification. On Suelto’s claim that the prosecution failed to prove his guilt for the crime of reckless imprudence
resulting in damage to property, the OSG contended that, applying the principle of res ipsa loquitur, the prosecution was able to
prove that he drove the bus with negligence and recklessness. The OSG averred that the prosecution was able to prove that Suelto’s
act of swerving the bus to the right was the cause of damage to the terrace of Valdellon’s apartment, and in the absence of an
explanation to the contrary, the accident was evidently due to appellant’s want of care. Consequently, the OSG posited, the burden
was on the appellant to prove that, in swerving the bus to the right, he acted on an emergency, and failed to discharge this burden.
However, the OSG averred that the trial court erred in sentencing appellant to a straight penalty of one year, and recommended a
penalty of fine.

On June 20, 2000, the CA rendered judgment affirming the decision of the trial court, but the award for actual damages was reduced
to P100,000.00. The fallo of the decision reads:

WHEREFORE, premises considered, the decision dated April 28, 1994, rendered by the court a quo is AFFIRMED with the
modification that the sum of P150,000.00 as compensation sustained by the plaintiff-appellee for her damaged apartment be
reduced to P100,000.00 without pronouncement as to costs.

SO ORDERED.21

Appellants filed a Motion for Reconsideration, but the CA denied the same. 22

MALTC and Suelto, now petitioners, filed the instant petition reiterating its submissions in the CA: (a) the prosecution failed to prove
the crime charged against petitioner Suelto; (b) the prosecution failed to adduce evidence to prove that respondent suffered actual
damages in the amount of P100,000.00; and (c) the trial court erred in sentencing petitioner Suelto to one (1) year prison term.

On the first issue, petitioners aver that the prosecution was mandated to prove that petitioner Suelto acted with recklessness in
swerving the bus to the right thereby hitting the terrace of private respondent’s apartment. However, the prosecution failed to
discharge its burden. On the other hand, petitioner Suelto was able to prove that he acted in an emergency when a passenger
jeepney coming from EDSA towards the direction of the bus overtook another vehicle and, in the process, intruded into the lane of
the bus.

On the second issue, petitioners insist that private respondent was able to prove only the amount of P35,000.00 by way of actual
damages; hence, the award of P100,000.00 is barren of factual basis.

On the third issue, petitioner Suelto posits that the straight penalty of imprisonment recommended by the trial court, and affirmed
by the CA, is contrary to Article 365 of the Revised Penal Code.

The petition is partially granted.

On the first issue, we find and so resolve that respondent People of the Philippines was able to prove beyond reasonable doubt that
petitioner Suelto swerved the bus to the right with recklessness, thereby causing damage to the terrace of private respondent’s
apartment. Although she did not testify to seeing the incident as it happened, petitioner Suelto himself admitted this in his answer
to the complaint in Civil Case No. Q-93-16051, and when he testified in the trial court.

Suelto narrated that he suddenly swerved the bus to the right of the road causing it to hit the column of the terrace of private
respondent. Petitioners were burdened to prove that the damage to the terrace of private respondent was not the fault of
petitioner Suelto.

We have reviewed the evidence on record and find that, as ruled by the trial court and the appellate court, petitioners failed to
prove that petitioner acted on an emergency caused by the sudden intrusion of a passenger jeepney into the lane of the bus he was
driving.

It was the burden of petitioners herein to prove petitioner Suelto’s defense that he acted on an emergency, that is, he had to swerve
the bus to the right to avoid colliding with a passenger jeep coming from EDSA that had overtaken another vehicle and intruded into
the lane of the bus. The sudden emergency rule was enunciated by this Court in Gan v. Court of Appeals, 23 thus:

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

Under Section 37 of Republic Act No. 4136, as amended, otherwise known as the Land Transportation and Traffic Code, motorists
are mandated to drive and operate vehicles on the right side of the road or highway:

SEC. 37. Driving on right side of highway. – Unless a different course of action is required in the interest of the safety and the security
of life, person or property, or because of unreasonable difficulty of operation in compliance herewith, every person operating a
motor vehicle or an animal-drawn vehicle on a highway shall pass to the right when meeting persons or vehicles coming toward him,
and to the left when overtaking persons or vehicles going the same direction, and when turning to the left in going from one
highway to another, every vehicle shall be conducted to the right of the center of the intersection of the highway.

Section 35 of the law provides, thus:

Sec. 35. Restriction as to speed.—(a) Any person driving a motor vehicle on a highway shall drive the same at a careful and prudent
speed, not greater nor less than is reasonable and proper, having due regard for the traffic, the width of the highway, and of any
other condition then and there existing; and no person shall drive any motor vehicle upon a highway at such a speed as to endanger
the life, limb and property of any person, nor at a speed greater than will permit him to bring the vehicle to a stop within the assured
clear distance ahead (emphasis supplied).

In relation thereto, Article 2185 of the New Civil Code provides that "unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent, if at the time of mishap, he was violating any traffic regulation." By his own
admission, petitioner Suelto violated the Land Transportation and Traffic Code when he suddenly swerved the bus to the right,
thereby causing damage to the property of private respondent.

However, the trial court correctly rejected petitioner Suelto’s defense, in light of his contradictory testimony vis-à-vis his Counter-
Affidavit submitted during the preliminary investigation:

It is clear from the photographs submitted by the prosecution (Exhs. C, D, G, H & I) that the commercial apartment of Dr. Valdellon
sustained heavy damage caused by the bus being driven by Suelto. "It seems highly improbable that the said damages were not
caused by a strong impact. And, it is quite reasonable to conclude that, at the time of the impact, the bus was traveling at a high
speed when Suelto tried to avoid the passenger jeepney." Such a conclusion finds support in the decision of the Supreme Court in
People vs. Ison, 173 SCRA 118, where the Court stated that "physical evidence is of the highest order. It speaks more eloquently than
a hundred witnesses." The pictures submitted do not lie, having been taken immediately after the incident. The damages could not
have been caused except by a speeding bus. Had the accused not been speeding, he could have easily reduced his speed and come
to a full stop when he noticed the jeep. Were he more prudent in driving, he could have avoided the incident or even if he could not
avoid the incident, the damages would have been less severe.

In addition to this, the accused has made conflicting statements in his counter-affidavit and his testimony in court. In the former, he
stated that the reason why he swerved to the right was because he wanted to avoid the passenger jeepney in front of him that
made a sudden stop. But, in his testimony in court, he said that it was to avoid a passenger jeepney coming from EDSA that was
overtaking by occupying his lane. Such glaring inconsistencies on material points render the testimony of the witness doubtful and
shatter his credibility. Furthermore, the variance between testimony and prior statements renders the witness unreliable. Such
inconsistency results in the loss in the credibility of the witness and his testimony as to his prudence and diligence.

As already maintained and concluded, the severe damages sustained could not have resulted had the accused acted as a reasonable
and prudent man would. The accused was not diligent as he claims to be. What is more probable is that the accused had to swerve
to the right and hit the commercial apartment of the plaintiff because he could not make a full stop as he was driving too fast in a
usually crowded street.24

Moreover, if the claim of petitioners were true, they should have filed a third-party complaint against the driver of the offending
passenger jeepney and the owner/operator thereof.

Petitioner Suelto’s reliance on the sudden emergency rule to escape conviction for the crime charged and his civil liabilities based
thereon is, thus, futile.

On the second issue, we agree with the contention of petitioners that respondents failed to prove that the damages to the terrace
caused by the incident amounted to P100,000.00. The only evidence adduced by respondents to prove actual damages claimed by
private respondent were the summary computation of damage made by Engr. Jesus R. Regal, Jr. amounting to P171,088.46 and the
receipt issued by the BB Construction and Steel Fabricator to private respondent for P35,000.00 representing cost for carpentry
works, masonry, welding, and electrical works. Respondents failed to present Regal to testify on his estimation. In its five-page
decision, the trial court awarded P150,000.00 as actual damages to private respondent but failed to state the factual basis for such
award. Indeed, the trial court merely declared in the decretal portion of its decision that the "sum of P150,000.00 as reasonable
compensation sustained by plaintiff for her damaged apartment." The appellate court, for its part, failed to explain how it arrived at
the amount of P100,000.00 in its three-page decision. Thus, the appellate court merely declared:

With respect to the civil liability of the appellants, they contend that there was no urgent necessity to completely demolish the
apartment in question considering the nature of the damages sustained as a result of the accident. Consequently, appellants
continue, the award of P150,000.00 as compensation sustained by the plaintiff-appellee for her damaged apartment is an
unconscionable amount.

The damaged portions of the apartment in question are not disputed.

Considering the aforesaid damages which are the direct result of the accident, the reasonable, and adequate compensation due is
hereby fixed at P100,000.00.25

Under Article 2199 of the New Civil Code, actual damages include all the natural and probable consequences of the act or omission
complained of, classified as one for the loss of what a person already possesses (daño emergente) and the other, for the failure to
receive, as a benefit, that which would have pertained to him (lucro cesante). As expostulated by the Court in PNOC Shipping and
Transport Corporation v. Court of Appeals:26

Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or in recompense for,
loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done, to
compensate for the injury inflicted and not to impose a penalty. In actions based on torts or quasi-delicts, actual damages include all
the natural and probable consequences of the act or omission complained of. There are two kinds of actual or compensatory
damages: one is the loss of what a person already possesses (daño emergente), and the other is the failure to receive as a benefit
that which would have pertained to him (lucro cesante). 27

The burden of proof is on the party who would be defeated if no evidence would be presented on either side. The burden is to
establish one’s case by a preponderance of evidence which means that the evidence, as a whole, adduced by one side, is superior to
that of the other. Actual damages are not presumed. The claimant must prove the actual amount of loss with a reasonable degree of
certainty premised upon competent proof and on the best evidence obtainable. Specific facts that could afford a basis for measuring
whatever compensatory or actual damages are borne must be pointed out. Actual damages cannot be anchored on mere surmises,
speculations or conjectures. As the Court declared:

As stated at the outset, to enable an injured party to recover actual or compensatory damages, he is required to prove the actual
amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available. The burden
of proof is on the party who would be defeated if no evidence would be presented on either side. He must establish his case by a
preponderance of evidence which means that the evidence, as a whole, adduced by one side is superior to that of the other. In other
words, damages cannot be presumed and courts, in making an award, must point out specific facts that could afford a basis for
measuring whatever compensatory or actual damages are borne. 28

The Court further declared that "where goods are destroyed by the wrongful act of defendant, the plaintiff is entitled to their value
at the time of the destruction, that is, normally, the sum of money which he would have to pay in the market for identical or
essentially similar goods, plus in a proper case, damages for the loss of the use during the period before replacement. 29

While claimants’ bare testimonial assertions in support of their claims for damages should not be discarded altogether, however, the
same should be admitted with extreme caution. Their testimonies should be viewed in light of claimants’ self-interest, hence, should
not be taken as gospel truth. Such assertion should be buttressed by independent evidence. In the language of the Court:

For this reason, Del Rosario’s claim that private respondent incurred losses in the total amount of P6,438,048.00 should be admitted
with extreme caution considering that, because it was a bare assertion, it should be supported by independent evidence. Moreover,
because he was the owner of private respondent corporation whatever testimony he would give with regard to the value of the lost
vessel, its equipment and cargoes should be viewed in the light of his self-interest therein. We agree with the Court of Appeals that
his testimony as to the equipment installed and the cargoes loaded on the vessel should be given credence considering his
familiarity thereto. However, we do not subscribe to the conclusion that his valuation of such equipment, cargo, and the vessel itself
should be accepted as gospel truth. We must, therefore, examine the documentary evidence presented to support Del Rosario’s
claim as regards the amount of losses.30

An estimate of the damage cost will not suffice:

Private respondents failed to adduce adequate and competent proof of the pecuniary loss they actually incurred. It is not enough
that the damage be capable of proof but must be actually proved with a reasonable degree of certainty, pointing out specific facts
that afford a basis for measuring whatever compensatory damages are borne. Private respondents merely sustained an estimated
amount needed for the repair of the roof of their subject building. What is more, whether the necessary repairs were caused only by
petitioner’s alleged negligence in the maintenance of its school building, or included the ordinary wear and tear of the house itself, is
an essential question that remains indeterminable.31

We note, however, that petitioners adduced evidence that, in their view, the cost of the damage to the terrace of private
respondent would amount to P55,000.00.32 Accordingly, private respondent is entitled to P55,000.00 actual damages.

We also agree with petitioner Suelto’s contention that the trial court erred in sentencing him to suffer a straight penalty of one (1)
year. This is so because under the third paragraph of Article 365 of the Revised Penal Code, the offender must be sentenced to pay a
fine when the execution of the act shall have only resulted in damage to property. The said provision reads in full:

ART. 365. Imprudence and negligence. – Any person who, by reckless imprudence, shall commit any act which, had it been
intentional, would constitute a grave felony, shall suffer the penalty of arresto mayor in its maximum period, to prision correccional
in its medium period; if it would have constituted a less grave felony, the penalty of arresto mayor in its minimum and medium
periods shall be imposed; if it would have constituted a light felony, the penalty of arresto menor in its maximum period shall be
imposed.

Any person who, by simple imprudence or negligence, shall commit an act which would, otherwise, constitute a grave felony, shall
suffer the penalty of arresto mayor in its medium and maximum periods; if it would have constituted a less serious felony, the
penalty of arresto mayor in its minimum period shall be imposed.

When the execution of the act covered by this article shall have only resulted in damage to the property of another, the offender
shall be punished by a fine ranging from an amount equal to the value of said damages to three times such value, but which shall in
no case be less than 25 pesos.

A fine not exceeding two hundred pesos and censure shall be imposed upon any person who, by simple imprudence or negligence,
shall cause some wrong which, if done maliciously, would have constituted a light felony.
In the imposition of these penalties, the courts shall exercise their sound discretion, without regard to the rules prescribed in Article
64 (Emphasis supplied).

In the present case, the only damage caused by petitioner Suelto’s act was to the terrace of private respondent’s apartment,
costing P55,000.00. Consequently, petitioner’s contention that the CA erred in awarding P100,000.00 by way of actual damages to
private respondent is correct. We agree that private respondent is entitled to exemplary damages, and find that the award given by
the trial court, as affirmed by the CA, is reasonable. Considering the attendant circumstances, we rule that private respondent
Valdellon is entitled to only P20,000.00 by way of exemplary damages.

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The joint decision of the Regional Trial Court of Quezon City is
AFFIRMED WITH THE MODIFICATION that petitioner Suelto is sentenced to pay a fine of P55,000.00 with subsidiary imprisonment in
case of insolvency. Petitioners are ORDERED to pay to Erlinda V. Valdellon, jointly and severally, the total amount of P55,000.00 by
way of actual damages, and P20,000.00 by way of exemplary damages.

No pronouncement as to costs.

SO ORDERED.
G.R. No. L-2075 November 29, 1949

MARGARITA AFIALDA, Plaintiff-Appellant, v.
BASILIO HISOLE and FRANCISCO HISOLE, Defendants-Appellees.

SYLLABUS
1. DAMAGES; LIABILITY OF OWNER OF ANIMAL FOR DAMAGE CAUSED TO ITS CARETAKER. — Under article 1905 of the Civil Code,
the owner of an animal is not liable for injury caused by it to its caretaker.

This is an action for damages arising from injury caused by an animal. The complaint alleges that the now deceased, Loreto Afialda,
was employed by the defendant spouses as caretaker of their carabaos at a fixed compensation; that while tending the animals he
was, on March 21, 1947, gored by one of them and later died as a consequence of his injuries; that the mishap was due neither to
his own fault nor to force majeure; and that plaintiff is his elder sister and heir depending upon him for support.

Before filing their answer, defendants moved for the dismissal of the complaint for lack of a cause of action, and the motion having
been granted by the lower court, plaintiff has taken this appeal.

Plaintiff seeks to hold defendants liable under article 1905 of the Civil Code, which reads:jgc:chanrobles.com.ph

"The possessor of an animal, or the one who uses the same, is liable for any damages it may cause, even if such animal should
escape from him or stray away.

"This liability shall cease only in case the damage should arise from force majeure or from the fault of the person who may have
suffered it."cralaw virtua1aw library

The question presented is whether the owner of the animal is liable when the damage is caused to its caretaker.

The lower court took the view that under the above-quoted provision of the Civil Code, the owner of an animal is answerable only
for damages caused to a stranger, and that for damage caused to the caretaker of the animal the owner would be liable only if he
had been negligent or at fault under article 1902 of the same code. Claiming that the lower court was in error, counsel for plaintiff
contends that article 1905 does not distinguish between damage caused to a stranger and damage caused to the caretaker and
makes the owner liable whether or not he has been negligent or at fault. For authority counsel cites the following opinion which
Manresa quotes from a decision of the Spanish Supreme Court:jgc:chanrobles.com.ph

"El articulo 1905 del Codigo Civil no consiente otra interpretacion que la que, clara y evidentemente, se deriva de sus terminos
literales, bastando, segun el mismo, que un animal cause perjuicio para que nazca la responsibilidad del dueño, aun no imputandose
a este ninguna clase de culpa o negligencia, habida, sin duda, cuenta por el legislador de que tal concepto de dueño es suficiente
para que arrastre las consecuencias favorables o adversas de esta clase de propiedad, salvo la excepcion en el mismo contenida." (12
Manresa, Commentaries on the Spanish Civil Code, 573.)

This opinion, however, appears to have been rendered in a case where an animal caused injury to a stranger or third person. It is
therefore no authority for a case like the present where the person injured was the caretaker of the animal. The distinction is
important. For the statute names the possessor or user of the animal as the person liable for "any damages it may cause," and this
for the obvious reason that the possessor or user has the custody and control of the animal and is therefore the one in a position to
prevent it from causing damage.

In the present case, the animal was in the custody and under the control of the caretaker, who was paid for his work as such.
Obviously, it was the caretaker’s business to try to prevent the animal from causing injury or damage to anyone, including himself.
And being injured by the animal under those circumstances, was one of the risks of the occupation which he had voluntarily
assumed and for which he must take the consequences.

In a decision of the Spanish Supreme Court, cited by Manresa in his Commentaries (Vol. 12, p. 578), the death of an employee who
was bitten by a feline which his master had asked him to take to his establishment was by said tribunal declared to be "a veritable
accident of labor" which should come under the labor laws rather than under article 1905 of the Civil Code. The present action,
however, is not brought under the Workmen’s Compensation Act, there being no allegation that, among other things, defendants’
business, whatever that might be, had a gross income of P20,000. As already stated, defendants’ liability is made to rest on article
1905 of the Civil Code. But action under that article is not tenable for the reasons already stated. On the other hand, if action is to be
based on article 1902 of the Civil Code, it is essential that there be fault or negligence on the part of the defendants as owners of the
animal that caused the damage. But the complaint contains no allegation on those points.

There being no reversible error in the order appealed from, the same is hereby affirmed, but without costs in view of the financial
situation of the Appellant.
G.R. No. 164749

ROMULO ABROGAR and ERLINDA ABROGAR, Petitioners

vs
COSMOS BOTTLING COMPANY and INTERGAMES, INC., Respondents

DECISION
BERSAMIN, J.:

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 efficient 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 l 0, 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 finding 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 official 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 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 A venue (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.

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 oflitigation). 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 financial assistance to Intergames; 6 that the financial 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 fitness;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.10

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; 11 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;12 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;13 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 flow of traffic, instead of against it; that Intergames did not provide adequate traffic
marshals to secure the safety and protection of the participants; 14 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; 15 that their
complaint sufficiently 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.16

At the pre-trial held on April 12, 1981, the parties agreed that the principal issue was whether or not Cosmos and lntergames were
liable for the death of Rommel because of negligence in conducting the marathon. 17

Judgment of the RTC

In its decision dated May 10, 1991,18 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 (₱28,061.63) as actual damages;
One Hundred Thousand Pesos (₱100,000.00) as moral damages; Fifty Thousand Pesos (₱50,000.00) as exemplary damages and Ten
Percent (10%) of the total amount of One Hundred Seventy Eight Thousand Sixty One Pesos and Sixty Three Centavos (₱178,061,63)
or Seventeen Thousand Eight Hundred Six Pesos and Sixteen Centavos (₱17,806.16) 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.

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; 19 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 a:s stumbling, heat stroke, heart attack during the race,
severe exhaustion and similar occurrences;20 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 benefits
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. 21

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 finished his schooling; and that it would be
premature to award such damages upon the assumption that he would finish college and be gainfully employed. 22

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 finding 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.23

The CA reduced the issues to four, namely:

1. Whether or not appellant Intergames was negligent in its conduct of the "1 st 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.24

In its assailed judgment promulgated on March 10, 2004, 25 the CA ruled as follows:

As to the first issue, this Court finds 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 finding 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 traffic, instead of allowing the runners to run together with the flow of traffic. 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 finds 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 traffic 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.

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 traffic. 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 testified 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 officers 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 officers, and personnel because
they failed to prove what number is considered adequate.

This court considers that seven (7) traffic operatives, five (5) motorcycle policemen, fifteen (15) patrolmen deployed along the route,
fifteen (15) boyscouts, twelve (12) CA Ts, twenty (20) barangay tanods, three (3) ambulances and three (3) medical teams were
sufficient 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 Traffic Action (CTA) testified
in court that CTA fielded five units on June 15, 1980, assigned as follows: (1) at the sphere head; (2) at the finish 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 traffic policemen assigned at the
marathon, that he showed up only at the finish 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 finds that the precautionary measures and preparations adopted by appellant Intergames were sufficient
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 traffic; 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 A venue, which constituted the main stretch of the route. Appellant Intergames scheduled
the marathon on a Sunday morning, when traffic 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 finish line. Police
assistance was also obtained to control and supervise the traffic. The Quezon City Traffic Detachment took charge of traffic control
by assigning policemen to the traffic 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 Traffic Action Group tasked with the monitoring of the race, which assigned five units
consisting of ten operatives, to provide communication and assistance were likewise obtained. Finally, medical equipments and
personnel were also requested from Camp Aguinaldo, the Philippine Red Cross and the Hospital ng Bagong Lipunan.

Neither does this Court find the appellant Intergames' conduct of the marathon the proximate cause of the death of Rommel
Abrogar. Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces injury, and without which the result would not have occurred.

It appears that Rommel Abrogar, while running on Don Mariano Marcos A venue 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 filed against the jeepney driver by reason of his having killed Rommel Abrogar.

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 officials
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 traffic, 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 plaintiffs
damage if that damage would have occurred just the same even though the defendant's tort had not been committed.

This Court also finds 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.

xxxx

"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 qualification
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.

xxxx

"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 flow. 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 specific 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 briefing 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 traffic. 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 traffic 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 certificate
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 traffic. 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 McLeod 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 finds that appellant Cosmos must also be absolved from any liability in the instant case.

This Court finds 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 benefits 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 (₱55,000.00) representing
full sponsorship fee and in consideration thereof, INTERGAMES shall organize and stage a marathon race to be called '1st POP COLA
JUNIOR MARATHON.

xxxx

3. INTER GAMES 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.

xxxx

5. INTERGAMES shall secure all the necessary permits, clearances, traffic 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 financial assistance in the form
of sponsorship. Appellant Cosmos' sponsorship was merely in pursuance to the company's commitment for spo1is 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.

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 financial sponsorship and the death of Rommel Abrogar. The
singular act of providing financial 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 finds 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 m 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. 27

Ruling of the Court

The appeal is partly meritorious.

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 byblocking the route of the race
from vehicular traffic 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;28 hence, for such omission, Intergames was negligent. 29

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."30

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 findings 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 findings of fact of the CA are conclusive and binding
in the following instances: (1) when the findings 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 conflicting; (6) when in making its findings the CA went
beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the
findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific 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 findings 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.31 Considering that the CA arrived at factual findings 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. 32 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."33 The Civil Code makes liability for negligence clear under Article 2176, 34 and Article 20.35

To determine the existence of negligence, the following time-honored test has been set in Picart v. Smith:36

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 profitably 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 sufficiently probable to warrant his foregoing the conduct or guarding against its consequences. 37 (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, 38 then going towards the Batasang Pambansa, and on to the circular
route towards the Don Mariano Marcos Highway, 39 and then all the way back to the Quezon City Hall compound where the finish
line had been set.40 In staging the event, Intergames had no employees of its own to man the race, 41 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 Traffic
Action Group, and the medical teams of doctors and nurses coming from the Office of the Surgeon General and the Ospital ng
Bagong Lipunan.43 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,44 sending out letters to the various cooperating agencies, 45 securing permits from
proper authorities,46 putting up directional signs,47 and setting up the water stations.48
We consider the "safeguards" employed and adopted by Intergames not adequate to meet the requirement of due diligence.

For one, the police authorities specifically prohibited Intergames from blocking Don Mariano Marcos Highway in order not to impair
road accessibility to the residential villages located beyond the IBP Lanc. 49

However, contrary to the findings of the CA,50 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."51 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 specific reason from ... Was there any specific 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.52

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. 53 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 traffic 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 traffic than when you run against the traffic to a certain level, it is correct but most of the races in Manila or elsewhere
are being run in accordance with the flow of the traffic.

xxxx

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.54

xxxx

COURT:

xxxx
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 traffic 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.

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. 55

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 56 were not in themselves sufficient
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)
traffic operatives, five (5) motorcycle policemen, fifteen (15) patrolmen deployed along the route, fifteen (15) boy scouts, twelve
(12) CATs, twenty (20) barangay tanods, three (3) ambulances and three (3) medical teams"57 to ensure the safety of the young
runners who would be running alongside moving vehicular traffic, 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 sufficient 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:

xxxx

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 traffic 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 notified 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 specifically
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?

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 Traffic Action Group, your honor, had been with me m previous races.

COURT

q I am asking you a specific question. I am not interested in the Citizen Traffic 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

g 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.

g 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.
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.

A TTY. 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.59

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 CT A, 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.60

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.

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 briefings 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 traffic 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 sufficient 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 first 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 sufficient discretion. 61 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,62  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. 63

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 traffic 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 traffic, 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 A venue 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 ommel 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:64

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.65 (Emphasis supplied)

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."66 In Vda. de Bataclan, et al. v. Medina,67 the Court, borrowing from American
Jurisprudence, has more extensively defined proximate cause thusly:

"* * * 'that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury and
without which the result would not have occurred.' And more comprehensively, 'the proximate legal cause is that acting first and
producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of
events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the
injury as a natural and probable result of the cause which first acted, under such circumstances that the person responsible for the
first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the moment of his act or
default that an injury to some person might probably result therefrom." 68

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.69 According to an authority on civil law: 70"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 efficient 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 efficient 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.71

xxxx

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 first 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 arc 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 first 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
final injurious consequence could not have happened, then such injurious consequence must be deemed too remote; x x x. 72 (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 traffic, 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." 73

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 efficient 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 efficient, 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 first wrongful cause and the final injury which might reasonably have been
foreseen or anticipated by the original wrongdoer is not such an efficient intervening cause as will relieve the original wrong of its
character as the proximate cause of the final injury." 74

In fine, 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 R TC, 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 briefing 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 traffic. 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 traffic 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 certificate
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 traffic. 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 comi 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. 75

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. 76 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.77 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.78 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. 79 According to Prosser:80 "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 traffic, such knowledge of the general danger was not enough, for some authorities have required that the
knowledge must be of the specific risk that caused the harm to him. 81 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.82 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.

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, 83 to the effect that a person does not comprehend the risk involved in
a known situation because of his youth,84 or lack of information or experience,85 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 financing 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 confirmed 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 finding 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 benefit of the runners, we cannot but conclude that the requirement for the direct or
immediate causal connection between the financial 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 efficient and proximate cause of the injurious
consequences.

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 ₱28,061.65 (Exhibits "D'', "D-1" and "D-2"). In instituting this case, they have paid their lawyer ₱5,000 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 ₱l00,00.00 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 ₱50,000.00

as reasonable.87

Although we will not disturb the foregoing findings and determinations, we need to add to the justification 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,88 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.89 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 (l) 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,90  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 specific 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 sufficient 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 specific profession if sufficient evidence is presented to establish the amount thereor. 91 (bold
underscoring supplied for emphasis)
In People v. Sanchez,92  damages for loss of earning capacity was also allowed to the heirs of the victims of rape with homicide
despite the lack of sufficient 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.1âwphi1 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 fix the monthly income that the two would have earned in 1993 at ₱8,000.000 per
month (or ₱96,000.00/year) and their deductible living and other incidental expenses at ₱3,000.00 per month (or
₱36,000.00/year).93 (bold underscoring supplied for emphasis)

In Perena v. Zarate,94 the Court fixed 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 indemnification 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 sufficiently 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. 95 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:

Net Earning Capacity = Life Expectancy x [Gross Annual Income less Necessary Living Expenses ] 96

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, 97 then fixed at ₱l4.00/day, is ₱5,535.83. Allowing
for necessary living expenses of 50% of his projected gross annual income, his total net earning capacity is ₱l13,484.52.

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. 98 Moreover, pursuant to Article 221299 of the Civil
Code, the legal interest rate of 6o/o per annum is to be further imposed on the interest earned up to the time this judgment of the
Court becomes final and executory until its full satisfaction. 100

Article 2208 of the Civil Code expressly allows the recovery of attorney's fees and expenses of litigation when exemplary damages
have been awarded.1âwphi1 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 aw3:rds thereby allowed: (a)
the sum of ₱l13,484.52 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 finality of this decision until full payment; and (d) costs of suit.

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

THE ILOCOS NORTE ELECTRIC COMPANY, petitioner,

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

Sought to be reversed in this petition is the Decision * of the respondent Court of Appeals' First Division, setting aside the judgment
of the then Court of First Instance (CFI) of Ilocos Norte, with the following dispositive portion:

WHEREFORE, the appealed judgment is hereby set aside and another rendered in its stead whereby defendant is
hereby sentenced to pay plaintiffs actual damages of P30,229.45; compensatory damages of P50,000.00;
exemplary damages of P10,000.00; attorney's fees of P3,000.00; plus the costs of suit in both instances. (p. 27
Rollo)

Basically, this case involves a clash of evidence whereby both patties strive for the recognition of their respective versions of the
scenario from which the disputed claims originate. The respondent Court of Appeals (CA) summarized the evidence of the parties as
follows:

From the evidence of plaintiffs it appears that in the evening of June 28 until the early morning of June 29, 1967 a
strong typhoon by the code name "Gening" buffeted the province of Ilocos Norte, bringing heavy rains and
consequent flooding in its wake. Between 5:30 and 6:00 A.M. on June 29, 1967, after the typhoon had abated and
when the floodwaters were beginning to recede the deceased Isabel Lao Juan, fondly called Nana Belen, ventured
out of the house of her son-in-law, Antonio Yabes, on No. 19 Guerrero Street, Laoag City, and proceeded
northward towards the direction of the Five Sisters Emporium, of which she was the owner and proprietress, to
look after the merchandise therein that might have been damaged. Wading in waist-deep flood on Guerrero, the
deceased was followed by Aida Bulong, a Salesgirl at the Five Sisters Grocery, also owned by the deceased, and by
Linda Alonzo Estavillo, a ticket seller at the YJ Cinema, which was partly owned by the deceased. Aida and Linda
walked side by side at a distance of between 5 and 6 meters behind the deceased, Suddenly, the deceased
screamed "Ay" and quickly sank into the water. The two girls attempted to help, but fear dissuaded them from
doing so because on the spot where the deceased sank they saw an electric wire dangling from a post and moving
in snake-like fashion in the water. Upon their shouts for help, Ernesto dela Cruz came out of the house of Antonio
Yabes. Ernesto tried to go to the deceased, but at four meters away from her he turned back shouting that the
water was grounded. Aida and Linda prodded Ernesto to seek help from Antonio Yabes at the YJ Cinema building
which was four or five blocks away.

When Antonio Yabes was informed by Ernesto that his mother-in law had been electrocuted, he acted
immediately. With his wife Jane, together with Ernesto and one Joe Ros, Yabes passed by the City Hall of Laoag to
request the police to ask the people of defendant Ilocos Norte Electric Company or INELCO to cut off the electric
current. Then the party waded to the house on Guerrero Street. The floodwater was receding and the lights inside
the house were out indicating that the electric current had been cut off in Guerrero. Yabes instructed his boys to
fish for the body of the deceased. The body was recovered about two meters from an electric post.

In another place, at about 4:00 A.M. on that fateful date, June 29, 1967, Engineer Antonio Juan, Power Plant
Engineer of the National Power Corporation at the Laoag Diesel-Electric Plant, noticed certain fluctuations in their
electric meter which indicated such abnormalities as grounded or short-circuited lines. Between 6:00 and 6:30
A.M., he set out of the Laoag NPC Compound on an inspection. On the way, he saw grounded and disconnected
lines. Electric lines were hanging from the posts to the ground. Since he could not see any INELCO lineman, he
decided to go to the INELCO Office at the Life Theatre on Rizal Street by way of Guerrero. As he turned right at the
intersection of Guerrero and Rizal, he saw an electric wire about 30 meters long strung across the street "and the
other end was seeming to play with the current of the water." (p. 64, TSN, Oct. 24, 1972) Finding the Office of the
INELCO still closed, and seeing no lineman therein, he returned to the NPC Compound.

At about 8:10 A.M., Engr. Juan went out of the compound again on another inspection trip. Having learned of the
death of Isabel Lao Juan, he passed by the house of the deceased at the corner of Guerrero and M.H. del Pilar
streets to which the body had been taken. Using the resuscitator which was a standard equipment in his jeep and
employing the skill he acquired from an in service training on resuscitation, he tried to revive the deceased. His
efforts proved futile. Rigor mortis was setting in. On the left palm of the deceased, Engr. Juan noticed a hollow
wound. Proceeding to the INELCO Office, he met two linemen on the way. He told them about the grounded lines
of the INELCO In the afternoon of the same day, he went on a third inspection trip preparatory to the restoration
of power. The dangling wire he saw on Guerrero early in the morning of June 29, 1967 was no longer there.

Many people came to the house at the corner of Guerrero and M.H. del Pilar after learning that the deceased had
been electrocuted. Among the sympathizers was Dr. Jovencio Castro, Municipal Health Officer of Sarrat, Ilocos
Norte. Upon the request of the relatives of the deceased, Dr. Castro examined the body at about 8:00 A.M. on June
29, 1967. The skin was grayish or, in medical parlance, cyanotic, which indicated death by electrocution. On the left
palm, the doctor found an "electrically charged wound" (Exh. C-1: p. 101, TSN, Nov. 28, 1972) or a first degree
burn. About the base of the thumb on the left hand was a burned wound. (Exh. C-2, pp. 102-103, Ibid.) The
 certificate of death prepared by Dr. Castro stated the cause of' death as ,'circulatory shock electrocution" (Exh. I; p.
103, Ibid.).

In defense and exculpation, defendant presented the testimonies of its officers and employees, namely, Conrado
Asis, electric engineer; Loreto Abijero, collector-inspector; Fabico Abijero, lineman; and Julio Agcaoili, president-
manager of INELCO Through the testimonies of these witnesses, defendant sought to prove that on and even
before June 29, 1967 the electric service system of the INELCO in the whole franchise area, including Area No. 9
which covered the residence of Antonio Yabes at No. 18 Guerrero Street, did not suffer from any defect that might
constitute a hazard to life and property. The service lines, devices and other INELCO equipment in Area No. 9 had
been newly-installed prior to the date in question. As a public service operator and in line with its business of
supplying electric current to the public, defendant had installed safety devices to prevent and avoid injuries to
persons and damage to property in case of natural calamities such as floods, typhoons, fire and others. Defendant
had 12 linesmen charged with the duty of making a round-the-clock check-up of the areas respectively assigned to
them.

Defendant asserts that although a strong typhoon struck the province of Ilocos Norte on June 29, 1967, putting to
streets of Laoag City under water, only a few known places in Laoag were reported to have suffered damaged
electric lines, namely, at the southern approach of the Marcos Bridge which was washed away and where the
INELCO lines and posts collapsed; in the eastern part near the residence of the late Governor Simeon Mandac; in
the far north near the defendant's power plant at the corner of Segundo and Castro Streets, Laoag City and at the
far northwest side, near the premises of the Ilocos Norte National High School. Fabico Abijero, testified that in the
early morning before 6 o'clock on June 29, 1967 he passed by the intersection of Rizal and Guerrero Streets to
switch off the street lights in Area No. 9. He did not see any cut or broken wires in or near the vicinity. What he
saw were many people fishing out the body of Isabel Lao Juan.

A witness in the person of Dr. Antonio Briones was presented by the defense to show that the deceased could not
have died of electrocution Substantially, the testimony of the doctor is as follows: Without an autopsy on the
cadaver of the victim, no doctor, not even a medicolegal expert, can speculate as to the real cause of death.
Cyanosis could not have been found in the body of the deceased three hours after her death, because cyanosis
which means lack of oxygen circulating in the blood and rendering the color of the skin purplish, appears only in a
live person. The presence of the elongated burn in the left palm of the deceased (Exhibits C-1 and C-2) is not
sufficient to establish her death by electrocution; since burns caused by electricity are more or less round in shape
and with points of entry and exit. Had the deceased held the lethal wire for a long time, the laceration in her palm
would have been bigger and the injury more massive. (CA Decision, pp. 18-21, Rollo)

An action for damages in the aggregate amount of P250,000 was instituted by the heirs of the deceased with the aforesaid CFI on
June 24, 1968. In its Answer (Vide, Record on Appeal, p. 55, Rollo), petitioner advanced the theory, as a special defense, that the
deceased could have died simply either by drowning or by electrocution due to negligence attributable only to herself and not to
petitioner. In this regard, it was pointed out that the deceased, without petitioner's knowledge, caused the installation of a burglar
deterrent by connecting a wire from the main house to the iron gate and fence of steel matting, thus, charging the latter with
electric current whenever the switch is on. Petitioner then conjectures that the switch to said burglar deterrent must have been left
on, hence, causing the deceased's electrocution when she tried to open her gate that early morning of June 29, 1967. After due trial,
the CFI found the facts in favor of petitioner and dismissed the complaint but awarded to the latter P25,000 in moral damages and
attorney's fees of P45,000. An appeal was filed with the CA which issued the controverted decision.

In this petition for review the petitioner assigns the following errors committed by the respondent CA:

1. The respondent Court of Appeals committed grave abuse of discretion and error in considering the purely hearsay alleged
declarations of Ernesto de la Cruz as part of the res gestae.

2. The respondent Court of Appeals committed grave abuse of discretion and error in holding that the strong typhoon
"Gening" which struck Laoag City and Ilocos Norte on June 29, 1967 and the flood and deluge it brought in its wake were
not fortuitous events and did not exonerate petitioner-company from liability for the death of Isabel Lao Juan.

3. The respondent Court of Appeals gravely abused its discretion and erred in not applying the legal principle of
"assumption of risk" in the present case to bar private respondents from collecting damages from petitioner company.

4. That the respondent Court of Appeals gravely erred and abused its discretion in completely reversing the findings of fact
of the trial court.

5. The findings of fact of the respondent Court of Appeals are reversible under the recognized exceptions.

6. The trial court did not err in awarding moral damages and attorney's fees to defendant corporation, now petitioner
company.

7. Assuming arguendo that petitioner company may be held liable from the death of the late Isabel Lao Juan, the damages
granted by respondent Court of Appeals are improper and exhorbitant. (Petitioners Memorandum, p. 133, Rollo)
Basically, three main issues are apparent: (1) whether or not the deceased died of electrocution; (2) whether or not petitioner may
be held liable for the deceased's death; and (3) whether or not the respondent CA's substitution of the trial court's factual findings
for its own was proper.

In considering the first issue, it is Our view that the same be resolved in the affirmative. By a preponderance of evidence, private
respondents were able to show that the deceased died of electrocution, a conclusion which can be primarily derived from the
photographed burnt wounds (Exhibits "C", "C-1", "C-2") on the left palm of the former. Such wounds undoubtedly point to the fact
that the deceased had clutched a live wire of the petitioner. This was corroborated by the testimony of Dr. Jovencio Castro who
actually examined the body of the deceased a few hours after the death and described the said burnt wounds as a "first degree
burn" (p. 144, TSN, December 11, 1972) and that they were "electrically charged" (p. 102, TSN, November 28, 1972). Furthermore,
witnesses Linda Alonzo Estavillo and Aida Bulong added that after the deceased screamed "Ay" and sank into the water, they tried to
render some help but were overcome with fear by the sight of an electric wire dangling from an electric post, moving in the water in
a snake-like fashion (supra). The foregoing therefore justifies the respondent CA in concluding that "(t)he nature of the wounds as
described by the witnesses who saw them can lead to no other conclusion than that they were "burns," and there was nothing else
in the street where the victim was wading thru which could cause a burn except the dangling live wire of defendant company" (CA
Decision, p. 22, Rollo).

But in order to escape liability, petitioner ventures into the theory that the deceased was electrocuted, if such was really the case
when she tried to open her steel gate, which was electrically charged by an electric wire she herself caused to install to serve as a
burglar deterrent. Petitioner suggests that the switch to said burglar alarm was left on. But this is mere speculation, not backed up
with evidence. As required by the Rules, "each party must prove his own affirmative allegations." (Rule 131, Sec. 1). Nevertheless,
the CA significantly noted that "during the trial, this theory was abandoned" by the petitioner (CA Decision, p. 23, Rollo).

Furthermore the CA properly applied the principle of res gestae. The CA said:

Linda Alonzo Estavillo, a ticket seller, and Aida Bulong, a salesgirl, were with the deceased during that fateful
morning of June 29, 1967. This Court has not been offered any sufficient reason to discredit the testimonies of
these two young ladies. They were one in the affirmation that the deceased, while wading in the waist-deep flood
on Guerrero Street five or six meters ahead of them, suddenly screamed "Ay" and quickly sank into the water.
When they approached the deceased to help, they were stopped by the sight of an electric wire dangling from a
post and moving in snake-like fashion in the water. Ernesto dela Cruz also tried to approach the deceased, but he
turned back shouting that the water was grounded. These bits of evidence carry much weight. For the subject of
the testimonies was a startling occurrence, and the declarations may be considered part of the res gestae. (CA
Decision, p. 21, Rollo)

For the admission of the res gestae in evidence, the following requisites must be present: (1) that the principal act, the res gestae, be
a startling occurrence; (2) that the statements were made before the declarant had time to contrive or devise; (3) that the
statements made must concern the occurrence in question and its immediately attending circumstances (People vs. Ner, 28 SCRA
1151; People vs. Balbas, 122 SCRA 959). We do not find any abuse of discretion on the CA' part in view of the satisfaction of said
requisites in the case at bar.

The statements made relative to the startling occurrence are admitted in evidence precisely as an exception to the hearsay rule on
the grounds of trustworthiness and necessity. "Trustworthiness" because the statements are made instinctively (Wesley vs. State, 53
Ala. 182), and "necessity" because such natural and spontaneous utterances are more convincing than the testimony of the same
person on the stand (Mobile vs. Ascraft 48 Ala. 31). Therefore, the fact that the declarant, Ernesto de la Cruz, was not presented to
testify does not make the testimony of Linda Alonzo Estavillo and Aida Bulong hearsay since the said declaration is part of the res
gestae. Similarly, We considered part of the res gestae a conversation between two accused immediately after commission of the
crime as overheard by a prosecution witness (People vs. Reyes, 82 Phil. 563).

While it may be true that, as petitioner argues (vide petitioner's Memorandum, p. 135, Rollo), Ernesto de la Cruz was not an actual
witness to the instant when the deceased sank into the waist-deep water, he acted upon the call of help of Aida Bulong and Linda
Alonzo Estavillo with the knowledge of, and immediately after, the sinking of the deceased. In fact the startling event had not yet
ceased when Ernesto de la Cruz entered the scene considering that the victim remained submerged. Under such a circumstance, it is
undeniable that a state of mind characterized by nervous excitement had been triggered in Ernesto de la Cruz's being as anybody
under the same contingency could have experienced. As such, We cannot honestly exclude his shouts that the water was grounded
from the res gestae just because he did not actually see the sinking of the deceased nor hear her scream "Ay."

Neither can We dismiss the said declaration as a mere opinion of Ernesto de la Cruz. While We concede to the submission that the
statement must be one of facts rather than opinion, We cannot agree to the proposition that the one made by him was a mere
opinion. On the contrary, his shout was a translation of an actuality as perceived by him through his sense of touch.

Finally, We do not agree that the taking of Ernesto de la Cruz' testimony was suppressed by the private respondents, thus, is
presumed to be adverse to them pursuant to Section 5(e), Rule 131. For the application of said Rule as against a party to a case, it is
necessary that the evidence alleged to be suppressed is available only to said party (People vs. Tulale, L-7233, 18 May 1955, 97 Phil.
953). The presumption does not operate if the evidence in question is equally available to both parties (StaplesHowe Printing Co. vs.
Bldg. and Loan Assn., 36 Phil. 421). It is clear from the records that petitioner could have called Ernesto de la Cruz to the witness
stand. This, precisely, was Linda Alonzo Estavillo's suggestion to petitioner's counsel when she testified on cross examination:

Q. And that Erning de la Cruz, how far did he reach from the gate of the house?
 A. Well, you can ask that matter from him sir because he is here. (TSN, p. 30, 26 Sept. 1972)

The foregoing shows that petitioner had the opportunity to verify the declarations of Ernesto de la Cruz which, if truly adverse to
private respondent, would have helped its case. However, due to reasons known only to petitioner, the opportunity was not taken.

Coming now to the second issue, We tip the scales in the private respondents' favor. The respondent CA acted correctly in disposing
the argument that petitioner be exonerated from liability since typhoons and floods are fortuitous events. While it is true that
typhoons and floods are considered Acts of God for which no person may be held responsible, it was not said eventuality which
directly caused the victim's death. It was through the intervention of petitioner's negligence that death took place. We subscribe to
the conclusions of the respondent CA when it found:

On the issue whether or not the defendant incurred liability for the electrocution and consequent death of the late Isabel
Lao Juan, defendant called to the witness-stand its electrical engineer, chief lineman, and lineman to show exercise of
extraordinary diligence and to negate the charge of negligence. The witnesses testified in a general way about their duties
and the measures which defendant usually adopts to prevent hazards to life and limb. From these testimonies, the lower
court found "that the electric lines and other equipment of defendant corporation were properly maintained by a well-
trained team of lineman, technicians and engineers working around the clock to insure that these equipments were in
excellent condition at all times." (P. 40, Record on Appeal) The finding of the lower court, however, was based on what the
defendant's employees were supposed to do, not on what they actually did or failed to do on the date  in question, and not
on the occasion of the emergency situation brought about by the typhoon.

The lower court made a mistake in assuming that defendant's employees worked around the clock during the occurrence of
the typhoon on the night of June 28 and until the early morning of June 29, 1967, Engr. Antonio Juan of the National Power
Corporation affirmed that when he first set out on an inspection trip between 6:00 and 6:30 A.M. on June 29, 1967, he saw
grounded and disconnected electric lines of the defendant but he saw no INELCO lineman. The INELCO Office at the Life
theatre on Rizal Street was still closed. (pp. 63-64, TSN, Oct. 24, 1972) Even the witnesses of defendant contradict the
finding of the lower court. Conrado Asis, defendant's electrical engineer, testified that he conducted a general inspection of
the franchise area of the INELCO only on June 30, 1967, the day following the typhoon. The reason he gave for the delay
was that all their vehicles were submerged. (p. 337, TSN, July 20, 1973) According to Asis, he arrived at his office at 8:00
A.M. on June 30 and after briefing his men on what to do they started out. (p. 338, lbid) One or two days after the typhoon,
the INELCO people heard "rumors that someone was electrocuted" so he sent one of his men to the place but his man
reported back that there was no damaged wire. (p. 385, Id.) Loreto Abijero, chief lineman of defendant, corroborated Engr.
Juan. He testified that at about 8:00 A.M. on June 29, 1967 Engr. Juan came to the INELCO plant and asked the INELCO
people to inspect their lines. He went with Engr. Juan and their inspection lasted from 8:00 A.M. to 12:00 noon. (pp. 460,
465, TSN, Jan. 28, 1975) Fabico Abijero lineman of defendant, testified that at about 6:00 on June 29, 1967 the typhoon
ceased. At that time, he was at the main building of the Divine Word College of Laoag where he had taken his family for
refuge. (pp. 510-511, Ibid.)

In times of calamities such as the one which occurred in Laoag City on the night of June 28 until the early hours of June 29,
1967, extraordinary diligence requires a supplier of electricity  to be in constant vigil to prevent or avoid any probable
incident that might imperil life or limb. The evidence does not show that defendant did that. On the contrary, evidence
discloses that there were no men (linemen or otherwise) policing the area, nor even manning its office. (CA Decision, pp.
24-25, Rollo)

Indeed, under the circumstances of the case, petitioner was negligent in seeing to it that no harm is done to the general public"...
considering that electricity is an agency, subtle and deadly, the measure of care required of electric companies must be
commensurate with or proportionate to the danger. The duty of exercising this high degree of diligence and care extends to every
place where persons have a right to be" (Astudillo vs. Manila Electric, 55 Phil. 427). The negligence of petitioner having been shown,
it may not now absolve itself from liability by arguing that the victim's death was solely due to a fortuitous event. "When an act of
God combines or concurs with the negligence of the defendant to produce an injury, the defendant is liable if the injury would not
have resulted but for his own negligent conduct or omission" (38 Am. Jur., p. 649).

Likewise, the maxim "volenti non fit injuria" relied upon by petitioner finds no application in the case at bar. It is imperative to note
the surrounding circumstances which impelled the deceased to leave the comforts of a roof and brave the subsiding typhoon. As
testified by Linda Alonzo Estavillo (see TSN, p. 5, 26 Sept. 1972) and Aida Bulong (see TSN, p. 43, 26 Sept. 1972), the deceased,
accompanied by the former two, were on their way to the latter's grocery store "to see to it that the goods were not flooded." As
such, shall We punish her for exercising her right to protect her property from the floods by imputing upon her the unfavorable
presumption that she assumed the risk of personal injury? Definitely not. For it has been held that a person is excused from the
force of the rule, that when he voluntarily assents to a known danger he must abide by the consequences, if an emergency is found
to exist or if the life or property of another is in peril (65A C.S.C. Negligence(174(5), p. 301), or when he seeks to rescue his
endangered property (Harper and James, "The Law of Torts." Little, Brown and Co., 1956, v. 2, p. 1167). Clearly, an emergency was at
hand as the deceased's property, a source of her livelihood, was faced with an impending loss. Furthermore, the deceased, at the
time the fatal incident occurred, was at a place where she had a right to be without regard to petitioner's consent as she was on her
way to protect her merchandise. Hence, private respondents, as heirs, may not be barred from recovering damages as a result of the
death caused by petitioner's negligence (ibid., p. 1165, 1166).

But petitioner assails the CA for having abused its discretion in completely reversing the trial court's findings of fact, pointing to the
testimonies of three of its employees its electrical engineer, collector-inspector, lineman, and president-manager to the effect that it
had exercised the degree of diligence required of it in keeping its electric lines free from defects that may imperil life and limb.
Likewise, the said employees of petitioner categorically disowned the fatal wires as they appear in two photographs taken on the
afternoon of June 29, 1967 (Exhs. "D" and "E"), suggesting that said wires were just hooked to the electric post (petitioner's
Memorandum, p. 170, Rollo). However, as the CA properly held, "(t)he finding of the lower court ... was based on what the
defendant's employees were supposed to do, not on what they actually did or failed to do on the date  in question, and not on the
occasion of the emergency situation brought about by the typhoon" (CA Decision, p. 25, Rollo). And as found by the CA, which We
have already reiterated above, petitioner was in fact negligent. In a like manner, petitioner's denial of ownership of the several wires
cannot stand the logical conclusion reached by the CA when it held that "(t)he nature of the wounds as described by the witnesses
who saw them can lead to no other conclusion than that they were 'burns', and there was nothing else in the street where the victim
was wading thru which could cause a burn except the dangling live wire of defendant company" (supra).

"When a storm occurs that is liable to prostrate the wires, due care requires prompt efforts to discover and repair broken lines"
(Cooley on Torts, 4th ed., v. 3, p. 474). The fact is that when Engineer Antonio Juan of the National Power Corporation set out in the
early morning of June 29, 1967 on an inspection tour, he saw grounded and disconnected lines hanging from posts to the ground but
did not see any INELCO lineman either in the streets or at the INELCO office (vide, CA Decision, supra). The foregoing shows that
petitioner's duty to exercise extraordinary diligence under the circumstance was not observed, confirming the negligence of
petitioner. To aggravate matters, the CA found:

. . .even before June 28 the people in Laoag were already alerted about the impending typhoon, through radio
announcements. Even the fire department of the city announced the coming of the big flood. (pp. 532-534, TSN,
March 13, 1975) At the INELCO irregularities in the flow of electric current were noted because "amperes of the
switch volts were moving". And yet, despite these danger signals, INELCO had to wait for Engr. Juan to request that
defendant's switch be cut off but the harm was done. Asked why the delay, Loreto Abijero answered that he "was
not the machine tender of the electric plant to switch off the current." (pp. 467-468, Ibid.) How very characteristic
of gross inefficiency! (CA Decision, p. 26, Rollo)

From the preceding, We find that the CA did not abuse its discretion in reversing the trial court's findings but tediously considered
the factual circumstances at hand pursuant to its power to review questions of fact raised from the decision of the Regional Trial
Court, formerly the Court of First Instance (see sec. 9, BP 129).

In considering the liability of petitioner, the respondent CA awarded the following in private respondent's favor: P30,229.45 in actual
damages (i.e., P12,000 for the victim's death and P18,229.45 for funeral expenses); P50,000 in compensatory damages, computed in
accordance with the formula set in the Villa-Rey Transit case (31 SCRA 511) with the base of P15,000 as average annual income of
the deceased; P10,000 in exemplary damages; P3,000 attorney's fees; and costs of suit. Except for the award of P12,000 as
compensation for the victim's death, We affirm the respondent CA's award for damages and attorney's fees. Pusuant to recent
jurisprudence (People vs. Mananquil, 132 SCRA 196; People vs. Traya, 147 SCRA 381), We increase the said award of P12,000 to
P30,000, thus, increasing the total actual damages to P48,229.45.

The exclusion of moral damages and attorney's fees awarded by the lower court was properly made by the respondent CA, the
charge of malice and bad faith on the part of respondents in instituting his case being a mere product of wishful thinking and
speculation. Award of damages and attorney's fees is unwarranted where the action was filed in good faith; there should be no
penalty on the right to litigate (Espiritu vs. CA, 137 SCRA 50). If damage results from a person's exercising his legal rights, it
is damnum absque injuria (Auyong Hian vs. CTA, 59 SCRA 110).

WHEREFORE, the questioned decision of the respondent, except for the slight modification that actual damages be increased to
P48,229.45 is hereby AFFIRMED.

SO ORDERED.
G.R. No. 154259             February 28, 2005

NIKKO HOTEL MANILA GARDEN and RUBY LIM, petitioners,

vs.
ROBERTO REYES, a.k.a. "AMAY BISAYA," respondent.

DECISION

In this petition for review on certiorari, petitioners Nikko Hotel Manila Garden (Hotel Nikko) 1 and Ruby Lim assail the Decision2 of the
Court of Appeals dated 26 November 2001 reversing the Decision 3 of the Regional Trial Court (RTC) of Quezon City, Branch 104, as
well as the Resolution4 of the Court of Appeals dated 09 July 2002 which denied petitioners’ motion for reconsideration.

The cause of action before the trial court was one for damages brought under the human relations provisions of the New Civil Code.
Plaintiff thereat (respondent herein) Roberto Reyes, more popularly known by the screen name "Amay Bisaya," alleged that at
around 6:00 o’clock in the evening of 13 October 1994, while he was having coffee at the lobby of Hotel Nikko, 5 he was spotted by
his friend of several years, Dr. Violeta Filart, who then approached him. 6 Mrs. Filart invited him to join her in a party at the hotel’s
penthouse in celebration of the natal day of the hotel’s manager, Mr. Masakazu Tsuruoka. 7 Mr. Reyes asked if she could vouch for
him for which she replied: "of course."8 Mr. Reyes then went up with the party of Dr. Filart carrying the basket of fruits which was
the latter’s present for the celebrant. 9 At the penthouse, they first had their picture taken with the celebrant after which Mr. Reyes
sat with the party of Dr. Filart.10 After a couple of hours, when the buffet dinner was ready, Mr. Reyes lined-up at the buffet table
but, to his great shock, shame and embarrassment, he was stopped by petitioner herein, Ruby Lim, who claimed to speak for Hotel
Nikko as Executive Secretary thereof.11 In a loud voice and within the presence and hearing of the other guests who were making a
queue at the buffet table, Ruby Lim told him to leave the party ("huwag ka nang kumain, hindi ka imbitado, bumaba ka na
lang").12 Mr. Reyes tried to explain that he was invited by Dr. Filart. 13 Dr. Filart, who was within hearing distance, however,
completely ignored him thus adding to his shame and humiliation. 14 Not long after, while he was still recovering from the traumatic
experience, a Makati policeman approached and asked him to step out of the hotel. 15 Like a common criminal, he was escorted out
of the party by the policeman.16 Claiming damages, Mr. Reyes asked for One Million Pesos actual damages, One Million Pesos moral
and/or exemplary damages and Two Hundred Thousand Pesos attorney’s fees. 17

Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but not under the ignominious circumstance painted by
the latter. Ms. Lim narrated that she was the Hotel’s Executive Secretary for the past twenty (20) years. 18 One of her functions
included organizing the birthday party of the hotel’s former General Manager, Mr. Tsuruoka. 19 The year 1994 was no different. For
Mr. Tsuruoka’s party, Ms. Lim generated an exclusive guest list and extended invitations accordingly. 20 The guest list was limited to
approximately sixty (60) of Mr. Tsuruoka’s closest friends and some hotel employees and that Mr. Reyes was not one of those
invited.21 At the party, Ms. Lim first noticed Mr. Reyes at the bar counter ordering a drink. 22 Mindful of Mr. Tsuruoka’s wishes to keep
the party intimate, Ms. Lim approached Mr. Boy Miller, the "captain waiter," to inquire as to the presence of Mr. Reyes who was not
invited.23 Mr. Miller replied that he saw Mr. Reyes with the group of Dr. Filart. 24 As Dr. Filart was engaged in conversation with
another guest and as Ms. Lim did not want to interrupt, she inquired instead from the sister of Dr. Filart, Ms. Zenaida Fruto, who told
her that Dr. Filart did not invite Mr. Reyes.25 Ms. Lim then requested Ms. Fruto to tell Mr. Reyes to leave the party as he was not
invited.26 Mr. Reyes, however, lingered prompting Ms. Lim to inquire from Ms. Fruto who said that Mr. Reyes did not want to
leave.27 When Ms. Lim turned around, she saw Mr. Reyes conversing with a Captain Batung whom she later approached. 28 Believing
that Captain Batung and Mr. Reyes knew each other, Ms. Lim requested from him the same favor from Ms. Fruto, i.e., for Captain
Batung to tell Mr. Reyes to leave the party as he was not invited. 29 Still, Mr. Reyes lingered. When Ms. Lim spotted Mr. Reyes by the
buffet table, she decided to speak to him herself as there were no other guests in the immediate vicinity. 30 However, as Mr. Reyes
was already helping himself to the food, she decided to wait. 31 When Mr. Reyes went to a corner and started to eat, Ms. Lim
approached him and said: "alam ninyo, hindo ho kayo dapat nandito. Pero total nakakuha na ho kayo ng pagkain, ubusin na lang
ninyo at pagkatapos kung pwede lang po umalis na kayo."32 She then turned around trusting that Mr. Reyes would show enough
decency to leave, but to her surprise, he began screaming and making a big scene, and even threatened to dump food on
her.33 1awphi1.nét

Dr. Violeta Filart, the third defendant in the complaint before the lower court, also gave her version of the story to the effect that
she never invited Mr. Reyes to the party. 34 According to her, it was Mr. Reyes who volunteered to carry the basket of fruits intended
for the celebrant as he was likewise going to take the elevator, not to the penthouse but to Altitude 49. 35 When they reached the
penthouse, she reminded Mr. Reyes to go down as he was not properly dressed and was not invited. 36 All the while, she thought that
Mr. Reyes already left the place, but she later saw him at the bar talking to Col. Batung. 37 Then there was a commotion and she saw
Mr. Reyes shouting.38 She ignored Mr. Reyes.39 She was embarrassed and did not want the celebrant to think that she invited him. 40

After trial on the merits, the court a quo dismissed the complaint,41 giving more credence to the testimony of Ms. Lim that she was
discreet in asking Mr. Reyes to leave the party. The trial court likewise ratiocinated that Mr. Reyes assumed the risk of being thrown
out of the party as he was uninvited:

Plaintiff had no business being at the party because he was not a guest of Mr. Tsuruoka, the birthday celebrant. He assumed the risk
of being asked to leave for attending a party to which he was not invited by the host. Damages are pecuniary consequences which
the law imposes for the breach of some duty or the violation of some right. Thus, no recovery can be had against defendants Nikko
Hotel and Ruby Lim because he himself was at fault (Garciano v. Court of Appeals, 212 SCRA 436). He knew that it was not the party
of defendant Violeta Filart even if she allowed him to join her and took responsibility for his attendance at the party. His action
against defendants Nikko Hotel and Ruby Lim must therefore fail. 42
On appeal, the Court of Appeals reversed the ruling of the trial court as it found more commanding of belief the testimony of Mr.
Reyes that Ms. Lim ordered him to leave in a loud voice within hearing distance of several guests:

In putting appellant in a very embarrassing situation, telling him that he should not finish his food and to leave the place within the
hearing distance of other guests is an act which is contrary to morals, good customs . . ., for which appellees should compensate the
appellant for the damage suffered by the latter as a consequence therefore (Art. 21, New Civil Code). The liability arises from the
acts which are in themselves legal or not prohibited, but contrary to morals or good customs. Conversely, even in the exercise of a
formal right, [one] cannot with impunity intentionally cause damage to another in a manner contrary to morals or good customs. 43

The Court of Appeals likewise ruled that the actuation of Ms. Lim in approaching several people to inquire into the presence of Mr.
Reyes exposed the latter to ridicule and was uncalled for as she should have approached Dr. Filart first and both of them should have
talked to Mr. Reyes in private:

Said acts of appellee Lim are uncalled for. What should have been done by appellee Lim was to approach appellee Mrs. Filart and
together they should have told appellant Reyes in private that the latter should leave the party as the celebrant only wanted close
friends around. It is necessary that Mrs. Filart be the one to approach appellant because it was she who invited appellant in that
occasion. Were it not for Mrs. Filart’s invitation, appellant could not have suffered such humiliation. For that, appellee Filart is
equally liable.

...

The acts of [appellee] Lim are causes of action which are predicated upon mere rudeness or lack of consideration of one person,
which calls not only protection of human dignity but respect of such dignity. Under Article 20 of the Civil Code, every person who
violates this duty becomes liable for damages, especially if said acts were attended by malice or bad faith. Bad faith does not simply
connote bad judgment or simple negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong,
a breach of a known duty to some motive or interest or ill-will that partakes of the nature of fraud (Cojuangco, Jr. v. CA, et al., 309
SCRA 603).44

Consequently, the Court of Appeals imposed upon Hotel Nikko, Ruby Lim and Dr. Violeta Filart the solidary obligation to pay Mr.
Reyes (1) exemplary damages in the amount of Two Hundred Thousand Pesos (P200,000); (2) moral damages in the amount of Two
Hundred Thousand Pesos (P200,000); and (3) attorney’s fees in the amount of Ten Thousand Pesos (P10,000). 45 On motion for
reconsideration, the Court of Appeals affirmed its earlier decision as the argument raised in the motion had "been amply discussed
and passed upon in the decision sought to be reconsidered." 46

Thus, the instant petition for review. Hotel Nikko and Ruby Lim contend that the Court of Appeals seriously erred in –

I.

… NOT APPLYING THE DOCTRINE OF VOLENTI NON FIT INJURIA CONSIDERING THAT BY ITS OWN FINDINGS, AMAY BISAYA WAS A
GATE-CRASHER

II.

… HOLDING HOTEL NIKKO AND RUBY LIM JOINTLY AND SEVERALLY LIABLE WITH DR. FILART FOR DAMAGES SINCE BY ITS OWN
RULING, AMAY BISAYA "COULD NOT HAVE SUFFERED SUCH HUMILIATION," "WERE IT NOT FOR DR. FILART’S INVITATION"

III.

… DEPARTING FROM THE FINDINGS OF FACT OF THE TRIAL COURT AS REGARDS THE CIRCUMSTANCES THAT ALLEGEDLY CAUSED THE
HUMILIATION OF AMAY BISAYA

IV.

… IN CONCLUDING THAT AMAY BISAYA WAS TREATED UNJUSTLY BECAUSE OF HIS POVERTY, CONSIDERING THAT THIS WAS NEVER
AN ISSUE AND NO EVIDENCE WAS PRESENTED IN THIS REGARD

V.

… IN FAILING TO PASS UPON THE ISSUE ON THE DEFECTS OF THE APPELLANT’S BRIEF, THEREBY DEPARTING FROM THE ACCEPTED
AND USUAL COURSE OF JUDICIAL PROCEEDINGS

Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria, they cannot be made liable for
damages as respondent Reyes assumed the risk of being asked to leave (and being embarrassed and humiliated in the process) as he
was a "gate-crasher."

The doctrine of volenti non fit injuria ("to which a person assents is not esteemed in law as injury" 47 ) refers to self-inflicted injury48 or
to the consent to injury49 which precludes the recovery of damages by one who has knowingly and voluntarily exposed himself to
danger, even if he is not negligent in doing so.50 As formulated by petitioners, however, this doctrine does not find application to the
case at bar because even if respondent Reyes assumed the risk of being asked to leave the party, petitioners, under Articles 19 and
21 of the New Civil Code, were still under obligation to treat him fairly in order not to expose him to unnecessary ridicule and shame.

Thus, the threshold issue is whether or not Ruby Lim acted abusively in asking Roberto Reyes, a.k.a. "Amay Bisaya," to leave the
party where he was not invited by the celebrant thereof thereby becoming liable under Articles 19 and 21 of the Civil Code.
Parenthetically, and if Ruby Lim were so liable, whether or not Hotel Nikko, as her employer, is solidarily liable with her.

As the trial court and the appellate court reached divergent and irreconcilable conclusions concerning the same facts and evidence
of the case, this Court is left without choice but to use its latent power to review such findings of facts. Indeed, the general rule is
that we are not a trier of facts as our jurisdiction is limited to reviewing and revising errors of law. 51 One of the exceptions to this
general rule, however, obtains herein as the findings of the Court of Appeals are contrary to those of the trial court. 52 The lower
court ruled that Ms. Lim did not abuse her right to ask Mr. Reyes to leave the party as she talked to him politely and discreetly. The
appellate court, on the other hand, held that Ms. Lim is liable for damages as she needlessly embarrassed Mr. Reyes by telling him
not to finish his food and to leave the place within hearing distance of the other guests. Both courts, however, were in agreement
that it was Dr. Filart’s invitation that brought Mr. Reyes to the party.

The consequential question then is: Which version is credible?

From an in depth review of the evidence, we find more credible the lower court’s findings of fact.

First, let us put things in the proper perspective.

We are dealing with a formal party in a posh, five-star hotel, 53 for-invitation-only, thrown for the hotel’s former Manager, a Japanese
national. Then came a person who was clearly uninvited (by the celebrant) 54 and who could not just disappear into the crowd as his
face is known by many, being an actor. While he was already spotted by the organizer of the party, Ms. Lim, the very person who
generated the guest list, it did not yet appear that the celebrant was aware of his presence. Ms. Lim, mindful of the celebrant’s
instruction to keep the party intimate, would naturally want to get rid of the "gate-crasher" in the most hush-hush manner in order
not to call attention to a glitch in an otherwise seamless affair and, in the process, risk the displeasure of the celebrant, her former
boss. To unnecessarily call attention to the presence of Mr. Reyes would certainly reflect badly on Ms. Lim’s ability to follow the
instructions of the celebrant to invite only his close friends and some of the hotel’s personnel. Mr. Reyes, upon whom the burden
rests to prove that indeed Ms. Lim loudly and rudely ordered him to leave, could not offer any satisfactory explanation why Ms. Lim
would do that and risk ruining a formal and intimate affair. On the contrary, Mr. Reyes, on cross-examination, had unwittingly sealed
his fate by admitting that when Ms. Lim talked to him, she was very close. Close enough for him to kiss:

Q: And, Mr. Reyes, you testified that Miss Lim approached you while you were at the buffet table? How close was she when
she approached you?

A: Very close because we nearly kissed each other.

Q: And yet, she shouted for you to go down? She was that close and she shouted?

A: Yes. She said, "wag kang kumain, hindi ka imbitado dito, bumaba ka na lang."

Q: So, you are testifying that she did this in a loud voice?

...

A: Yes. If it is not loud, it will not be heard by many. 55

In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and shame, it is
highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in the hotel business for twenty years
wherein being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes that she acted to the contrary does not
inspire belief and is indeed incredible. Thus, the lower court was correct in observing that –

Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave the party was made such that they
nearly kissed each other, the request was meant to be heard by him only and there could have been no intention on her part to
cause embarrassment to him. It was plaintiff’s reaction to the request that must have made the other guests aware of what
transpired between them. . .

Had plaintiff simply left the party as requested, there was no need for the police to take him out. 56

Moreover, another problem with Mr. Reyes’s version of the story is that it is unsupported. It is a basic rule in civil cases that he who
alleges proves. Mr. Reyes, however, had not presented any witness to back his story up. All his witnesses – Danny Rodinas, Pepito
Guerrero and Alexander Silva - proved only that it was Dr. Filart who invited him to the party. 57

Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be made liable to pay
for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its
liability springs from that of its employee. 58
Article 19, known to contain what is commonly referred to as the principle of abuse of rights, 59 is not a panacea for all human hurts
and social grievances. Article 19 states:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith.1awphi1.nét

Elsewhere, we explained that when "a right is exercised in a manner which does not conform with the norms enshrined in Article 19
and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible." 60 The object of
this article, therefore, is to set certain standards which must be observed not only in the exercise of one’s rights but also in the
performance of one’s duties.61 These standards are the following: act with justice, give everyone his due and observe honesty and
good faith.62 Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the following: (1) There is a
legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. 63 When Article 19 is
violated, an action for damages is proper under Articles 20 or 21 of the Civil Code. Article 20 pertains to damages arising from a
violation of law64 which does not obtain herein as Ms. Lim was perfectly within her right to ask Mr. Reyes to leave. Article 21, on the
other hand, 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 2165 refers to acts contra bonus mores and has the following elements: (1) There is an act which is legal; (2) but which is
contrary to morals, good custom, public order, or public policy; and (3) it is done with intent to injure.66

A common theme runs through Articles 19 and 21,67 and that is, the act complained of must be intentional. 68

As applied to herein case and as earlier discussed, Mr. Reyes has not shown that Ms. Lim was driven by animosity against him. These
two people did not know each other personally before the evening of 13 October 1994, thus, Mr. Reyes had nothing to offer for an
explanation for Ms. Lim’s alleged abusive conduct except the statement that Ms. Lim, being "single at 44 years old," had a "very
strong bias and prejudice against (Mr. Reyes) possibly influenced by her associates in her work at the hotel with foreign
businessmen."69 The lameness of this argument need not be belabored. Suffice it to say that a complaint based on Articles 19 and 21
of the Civil Code must necessarily fail if it has nothing to recommend it but innuendos and conjectures.

Parenthetically, the manner by which Ms. Lim asked Mr. Reyes to leave was likewise acceptable and humane under the
circumstances. In this regard, we cannot put our imprimatur on the appellate court’s declaration that Ms. Lim’s act of personally
approaching Mr. Reyes (without first verifying from Mrs. Filart if indeed she invited Mr. Reyes) gave rise to a cause of action
"predicated upon mere rudeness or lack of consideration of one person, which calls not only protection of human dignity but respect
of such dignity."70 Without proof of any ill-motive on her part, Ms. Lim’s act of by-passing Mrs. Filart cannot amount to abusive
conduct especially because she did inquire from Mrs. Filart’s companion who told her that Mrs. Filart did not invite Mr. Reyes. 71 If at
all, Ms. Lim is guilty only of bad judgment which, if done with good intentions, cannot amount to bad faith.

Not being liable for both actual and moral damages, neither can petitioners Lim and Hotel Nikko be made answerable for exemplary
damages72 especially for the reason stated by the Court of Appeals. The Court of Appeals held –

Not a few of the rich people treat the poor with contempt because of the latter’s lowly station in life.l^vvphi1.net This has to be
limited somewhere. In a democracy, such a limit must be established. Social equality is not sought by the legal provisions under
consideration, but due regard for decency and propriety (Code Commission, pp. 33-34). And by way of example or correction for
public good and to avert further commission of such acts, exemplary damages should be imposed upon appellees. 73

The fundamental fallacy in the above-quoted findings is that it runs counter with the very facts of the case and the evidence on
hand.l^vvphi1.net It is not disputed that at the time of the incident in question, Mr. Reyes was "an actor of long standing; a co-host
of a radio program over DZRH; a Board Member of the Music Singer Composer (MUSICO) chaired by popular singer Imelda Papin; a
showbiz Coordinator of Citizen Crime Watch; and 1992 official candidate of the KBL Party for Governor of Bohol; and an awardee of
a number of humanitarian organizations of the Philippines." 74 During his direct examination on rebuttal, Mr. Reyes stressed that he
had income75 and nowhere did he say otherwise. On the other hand, the records are bereft of any information as to the social and
economic standing of petitioner Ruby Lim. Consequently, the conclusion reached by the appellate court cannot withstand scrutiny as
it is without basis.

All told, and as far as Ms. Lim and Hotel Nikko are concerned, any damage which Mr. Reyes might have suffered through Ms. Lim’s
exercise of a legitimate right done within the bounds of propriety and good faith, must be his to bear alone.

WHEREFORE, premises considered, the petition filed by Ruby Lim and Nikko Hotel Manila Garden is GRANTED. The Decision of the
Court of Appeals dated 26 November 2001 and its Resolution dated 09 July 2002 are hereby REVERSED and SET ASIDE. The Decision
of the Regional Trial Court of Quezon City, Branch 104, dated 26 April 1999 is hereby AFFIRMED. No costs.

SO ORDERED.