SAN BEDA UNIVERSITY

COLLEGE OF LAW

CIVIL LAW REVIEW II

CASE DIGESTS
 Part Six – Torts and Damages

I. Torts
A. Elements
• Cases:
(1) Elcano v. Hill, 77 SCRA 98
(2) Taylor v. Manila Electric Co., 16 Phil. 8
(3) Algarra v. Sandejas, 27 Phil. 284
B. Culpa Aquiliana v. Culpa Contractual v. Culpa Criminal
• Cases:
(4) Singson v. Bank of the Philippine Islands, G.R. No. L-24932, June 27, 1968
(5) Rafael Reyes Trucking Corp. v. People, G.R. No. 129029, April 3, 2000
(6) Air France v. Carrascoso, 18 SCRA 155
(7) Padua v. Robles, 66 SCRA 485
(8) Mendoza v. Arrieta, 91 SCRA 113
(9) Jocson v. Glorioso, 22 SCRA 316
C. Vicarious Liability
• Cases:
(10) People v. Fabro, 93 SCRA 200
(11) Professional Services, Inc. v. Agana, G.R. No. 126297, January 31, 2007
(12) GSIS v. Spouses Deang, G.R. No. 135644, September 17, 2001
(13) Libi v. Intermediate Appellate Court, G.R. No. 70880, September 18, 1992
(14) Caravan Travel & Tours Int’l, Inc. v. Abejar, G.R. No. 170631, February 10, 2016
(15) Merritt v. Government of the Philippines, 34 Phil. 311
(16) Republic v. Palacio, 23 SCRA 899
(17) Ramos v. Pepsi-Cola, G.R. No. L-22533, February 9, 1967
(18) Ylarde v. Aquino, G.R. No. L33722, July 29, 1988
(19) Pasco v. Court of First Instance, G.R. No. 54357, April 25, 1987
D. Res Ipsa Loquitur
• Cases:
(20) Africa v. Caltex, 16 SCRA 448
(21) Republic v. Luzon Stevedoring Corp., G.R. No. L-21749, September 29, 1967
(22) Cantre v. Spouses Go, G.R. No. 160889, April 7, 2007
E. Last Clear Chance
• Cases:
(23) Picart v. Smith, 37 Phil. 809
(24) De Roy v. Court of Appeals, G.R. No. L-80718, January 29, 1988
(25) Consolidated Bank & Trust Corp. v. Court of Appeals, 410 SCRA 562, 203
(26) Phoenix Construction, Inc. v. Intermediate Appellate Court, G.R. No. L-65295, March 10, 198
F. Damnum Absque Injuria
G. Other Topics
• Cases:
(27) People’s Bank & Trust Co. v. Dahican Lumber Co., G.R. No. L-17500, May 16, 1967
(28) Barredo v. Garcia, 73 Phil. 607
(29) Pajarito v. Seneris, 87 SCRA 277
(30) Manalo v. Robles Transportation Co., Inc., G.R. No. L-8171, August 16, 1956
(31) Gan v. Court of Appeals, G.R. No. L-44264, September 19, 1988

II. Proximate Cause

• Cases:
(32) Phoenix Construction, Inc. v. Intermediate Appellate Court, G.R. No. 65295, March 10, 1987

III. Negligence
• Cases:
(33) Picart v. Smith, 37 Phil. 809
(34) Cangco v. Manila Railroad Co., 38 Phil 768
(35) Manliclic v. Calaunan, G.R. No. 150157, January 25, 2007
(36) Rakes v. Atlantic Gulf Pacific Co., 7 Phil. 359
(37) Caedo v. Yu Khe Thai, 26 SCRA 381

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 (38) Vestil v. Intermediate Appellate Court, November 6, 1986
(39) City of Manila v. Teotico, 22 SCRA 267
(40) Gutierrez v. Gutierrez, 56 Phil. 177
(41) Cruz v. Gangan, 395 SCRA 711, 2003
(42) Tres Reyes v. Maxim’s Tea House, 398 SCRA 288, 2003
A. Standard of Care
• Cases:
(43) Ylarde v. Aquino, G.R. No. L33722, July 29, 1988
B. Presumptions

IV. Damages
A. General Provisions
• Cases:
(44) Bago v. Feraren, 410 SCRA 282, 2003
(45) Cathay Pacific Airways, Ltd. v. Vasquez, 399 SCRA 207, 2003
(46) People v. Caraig, 400 SCRA 67, 2003
B. Kinds of Damages
• Cases:
(47) Fuentes v. Court of Appeals, 253 SCRA 430
(48) People v. Cuenco, G.R. No. 143819, January 19, 2002
(49) Batong Buhay Gold Mines, Inc. v. Court of Appeals, G.R. No. 45048, January 7, 1987
(50) Carriaga v. Laguna Tayabas Bus Co., 110 Phil. 346
(51) Reformina v. Tomol, 139 SCRA 260
(52) Ines v. Court of Appeals, August 14, 1995
(53) Lopez v. Pan American World Airways, 16 SCRA 431
(54) Malonzo v. Galang, 100 Phil. 18
(55) People v. Fontanilla, G.R. No. L-25354, June 28, 1968
(56) Rubio v. Court of Appeals, G.R. No. 50911, March 12, 1986
(57) Mahinay v. Velasquez, Jr., G.R. No. 152753, January 13, 2004
(58) People v. Marahay, 396 SCRA 129, 2003
(59) People v. Caraig, 400 SCRA 67, 2003
(60) Araneta v. Bank of America, 40 SCRA 144
(61) Negros Navigation Co., Inc. v. Court of Appeals, 281 SCRA 534
(62) People v. Villanueva, 302 SCRA 380
(63) Ventura v. Bernabe, 38 SCRA 587
(64) Necesito v. Paras, 104 Phil. 75
(65) City Trust Banking Corp. v. Intermediate Appellate Court, 232 SCRA 559
(66) Munsayac v. De Lara, 23 SCRA 1086
(67) Philippine National Bank v. Court of Appeals, G.R. No. 45770, March 30, 1988
(68) Abrogar v. Intermediate Appellate Court, G.R. No. 67970, January 15, 1988
(69) Rayos v. Reyes, 398 SCRA 4, 2003
(70) Singson v. Aragon, 92 Phil. 514
(71) People v. Legaspo, 397 SCRA 531, 2003
(72) Dee Hua Ling Electrical Equipment Corp. v. Reyes, G.R. No. 72182, November 25, 1986
(73) People v. Buayaban, 400 SCRA 48, 2003
(74) J Plus Asia Development Corp. v. Utility Assurance Corp., 700 SCRA 134
C. In Case of Death
• Cases:
(75) People v. Pantoja, 25 SCRA 468
(76) People v. Sazon, 189 SCRA 900
(77) Heirs of Castro v. Bustos, 27 SCA 327, 334-335
(78) Receiver for North Negros Sugar Co. v. Ibañez, 24 SCRA 797
(79) Villa Rey Transit, Inc. v. Court of Appeals, 31 SCRA 511

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 Part Seven – January 2017 to December 2019

VI. Torts and Damages

• Cases:
(1) Kabisig Real Wealth Development, Inc. v. Young Builders Corp., G.R. No. 212375, January 25, 2017
(2) Buisan v. Commission on Audit, G.R. No. 212376, January 31, 2017
(3) Osmena-Jalandoni v. Encomienda, G.R. No. 205578, March 1, 2017
(4) Abrogar v. Cosmos Bottling Co., G.R. No. 164749, March 15, 2017
(5) Our Lady of Lourdes Hospital v. Spouses Capanzana, G.R. No. 189218, March 22, 2017
(6) Spouses Carbonel v. Metropolitan Bank & Trust Co., G.R. No. 178467, April 26, 2017
(7) Spouses Latonio v. McGeorge Food Industries, G.R. No. 206184, December 6, 2017
(8) St. Martin Polyclinic, Inc. v. LWV Construction Corp., G.R. No. 217426, December 4, 2017
(9) Cacho v. Manahan, G.R. No. 203081, January 17, 2018
(10) Paman v. People, G.R. No. 210129, July 5, 2017
(11) Manila Electric Co. v. Nordec Philippines and/or Marvex Industrial Corp., G.R. No. 196020, April
18, 2018
(12) F.F. Cruz & Co., Inc. v. Philippine Iron Construction & Marine Works, Inc., G.R. Nos. 188144 &
1288301, August 30, 2017
(13) Dela Cruz v. Octaviano, G.R. No. 219649, July 26, 2017
(14) Yamauchi v. Suñiga, G.R. No. 199513, April 18, 2018
(15) Ka Kuen Chua v. Colorite Marketing Corp., G.R. Nos. 193969-70 & 194027-28, July 5, 2017
(16) Ong Bun v. Bank of the Philippine Islands, G.R. No. 212362, March 14, 2018
(17) Coca-Cola Bottlers Philippines, Inc. v. Meñez, G.R. No. 209906, November 22, 2017
(18) Spouses Estrada v. Philippine Rabbit Bus Lines, Inc., G.R. No. 203902, July 19, 2017
(19) Darines v. Quinones, G.R. No. 206468, August 2, 2017
(20) Torreon v. Aparra, Jr., G.R. No. 188493, December 13, 2017
(21) People v. Racal, G.R. No. 224886, September 4, 2017
(22) People v. Bacyaan y Sabaniya, G.R. No. 238457, September 18, 2019
(23) CICL XXX v. People, G.R. No. 237334, August 14, 2019
(24) Yulo v. Celo, G.R. No. 208787 (Notice), July 30, 2019
(25) Spouses Dalen v. Mitsui O.S.K. Lines, G.R. No. 194403, July 24, 2019
(26) Jebsen Maritime, Inc. v. Gavina, G.R. No. 199052, June 26, 2019
(27) Chevron Philippines, Inc. v. Mendoza, G.R. Nos. 211533 & 212071, June 19, 2019
(28) People v. Sayo y Reyes, G.R. No. 227704, April 10, 2019
(29) Guy v. Tulfo, G.R. No. 213023, April 10, 2019
(30) Heirs of Asis, Jr. v. G.G. Sportswear Manufacturing Corp., G.R. No. 225052, March 27, 2019
(31) Interphil Laboratories, Inc. v. OEP Philippines, Inc., G.R. No. 203697, March 20, 2019
(32) Padillo v. Magnaye, G.R. No. 195692 (Notice), March 06, 2019
(33) VDM Trading, Inc. v. Carungcong, G.R. No. 206709, February 06, 2019
(34) Callang v. Commission on Audit, G.R. No. 210683, January 08, 2019
(35) People v. Magbuhos y Diola, G.R. No. 227865, November 07, 2018
(36) Metroheights Subdivision Homeowners Association, Inc. v. CMS Construction and Development
Corp., G.R. No. 209359, October 17, 2018
(37) Sulpicio Lines, Inc. v. Karaan, G.R. No. 208590, October 03, 2018
(38) Imperial v. Heirs of Spouses Bayaban, G.R. No. 197626, October 03, 2018
(39) Horlador v. Philippine Transmarine Carriers, Inc., G.R. No. 236576 (Resolution), September 05,
2018
(40) Supreme Transportation Liner, Inc. v. San Andres, G.R. No. 200444, August 15, 2018
(41) Rodriguez v. Your Own Home Development Corp., G.R. No. 199451, August 15, 2018
(42) Spouses Ermino v. Golden Village Homeowners Association, Inc., G.R. No. 180808, August 15,
2018
(43) Anuat v. Pacific Ocean Manning, Inc., G.R. No. 220898, July 23, 2018
(44) Tabuada v. Tabuada, G.R. No. 196510, September 12, 2018

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 TORTS
Elements

A CIVIL ACTION FOR DAMAGES IS NOT BARRED BY THE ACQUITTAL OF THE ACCUSED IN THE
CRIMINAL CASE.

1. Pedro Elcano and Patricia Elcano, in their capacity as ascendants of Agapito Elcano, deceased v.
Reginald Hill, minor, and Marvin Hill, as father and natural guardian of said minor
G.R. No. L-24803, May 26, 1977
Barredo, J.

FACTS:
This is an appeal from the order of the CFI of Quezon City dismissing, upon motion to dismiss of defendants Hill,
the complaint of plaintiffs Pedro and Patricia Elcano for the recovery of damages.

Reginald Hill, a minor, married at the time of the occurrence, killed the son of the plaintiffs named Agapito Elcano.
A criminal complaint was instituted against him but was acquitted on the ground that his act was not criminal
because of lack of intent to kill, coupled with mistake. Plaintiffs filed a complaint for recovery of damages against
defendant Reginald Hill and his father Marvin Hill. Defendants filed a motion to dismiss on the ground that the
action is barred by a prior judgment and that plaintiffs had no cause of action against Marvin Hill, because he
was relieved as guardian of Reginald through emancipation by marriage. The motion was first denied by the CFI
of QC. It was only upon motion for reconsideration that the case was dismissed. Hence, this appeal.

ISSUES:
1. Is the civil action effectively dismissed by the acquittal in the criminal action?
2. Should Article 2180 (2nd and last paragraphs) of the Civil Code apply against Atty. Hill, notwithstanding the
undisputed fact that at the time of the occurrence complained of, Reginald, though a minor, living with and getting
subsistence from his father, was already legally married.

HELD:
1. No, the present civil action for damages is not barred by the acquittal of Reginald in the criminal case. Firstly,
there is a distinction as regards the proof required in a criminal case and a civil case. To find the accused guilty
in a criminal case, proof of guilt beyond reasonable doubt is required, while in a civil case, preponderance of
evidence is sufficient to make the defendant pay in damages. Furthermore, a civil case for damages on the basis
of quasi-delict is independently instituted from a criminal act. As such the acquittal of Reginald Hill in the criminal
case has not extinguished his liability for quasi-delict, hence that acquittal is not a bar to the instant action against
him.
2. Yes, the above mentioned provision may still be applied against Atty Marvin Hill. Although parental authority
is terminated upon emancipation of the child, emancipation by marriage is not absolute, i.e. he can sue and be
sued in court only with the assistance of his father, mother or guardian. As in the present case, killing someone
else contemplated judicial litigation, thus, making Article 2180 apply to Atty. Hill. However, inasmuch as it is
evident that Reginald is now of age, as a matter of equity, the liability of Atty. Hill has become milling, subsidiary
to that of his son.

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 TORTS
Elements

NEGLIGENCE MUST BE THE PROXIMATE CAUSE OF THE INJURY

2. Taylor v. Manila Electric Co.

G.R. No. L-4977, March 22, 1910
Carson, J.

FACTS:
David Taylor was at the time when he received the injuries complained of, 15 years of age, the son of a
mechanical engineer, more mature than the average boy of his age, and having considerable aptitude and
training in mechanics. On September 30, 1905, David Taylor and Manuel Claparols crossed the footbridge to
Isla del Provisor to visit Murphy, an employee of Manila Electric, who promised to make them a cylinder for a
miniature engine. After leaving the power house where they had asked for Mr. Murphy, they walked across the
open space in the neighborhood of the place where the company dumped in the cinders and ashes from its
furnaces. They found some twenty or thirty brass fulminating caps scattered on the ground. They are intended
for use in the explosion of blasting charges of dynamite, and have in themselves a considerable explosive power.
The boys picked up all they could find, hung them on stick, of which each took end, and carried them home. The
boys then made a series of experiments with the caps. Opened one of the caps with a knife, and finding that it
was filled with a yellowish substance they got matches. An explosion followed, causing more or less serious
injuries to all three.

David Taylor, by his father, instituted an action to recover damages for the loss of an eye and other injuries. The
trial court rendered its decision in plaintiff’s favor.

ISSUE:
Is the negligence of the defendant the proximate cause of the injury which would make it liable for damages?

HELD:
No, the negligence of the defendant is not the proximate cause.

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.

While we hold that the entry of the plaintiff upon defendant's property without defendant's express invitation or
permission would not have relieved defendant from responsibility for injuries incurred there by plaintiff, without
other fault on his part, if such injury were attributable to the negligence of the defendant, we are of opinion that
under all the circumstances of this case the negligence of the defendant in leaving the caps exposed on its
premises was not the proximate cause of the injury received by the plaintiff, which therefore was not, properly
speaking, "attributable to the negligence of the defendant," and, on the other hand, we are satisfied that plaintiff's
action in cutting open the detonating cap and putting a match to its contents was the proximate cause of the
explosion and of the resultant injuries inflicted upon the plaintiff, and that the defendant, therefore, is not civilly
responsible for the injuries thus incurred.

We are satisfied that the plaintiff in this case had sufficient capacity and understanding to be sensible of the"
danger to which he exposed himself when he put the match to the contents of the cap; that he was sui juris in
the sense that his age and his experience qualified him to understand and appreciate the necessity for the
exercise of that degree of caution which would have avoided the injury which resulted from his own deliberate
act; and that the injury incurred by him must be held to have been the direct and immediate result of his own
willful and reckless act, so that while it may be true that these injuries would not have been incurred but for the
negligent act of the defendant in leaving the caps exposed on its premises, nevertheless" plaintiff's own act was
the proximate and principal cause of the accident which inflicted the injury.

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 TORTS
Elements

THERE IS ACTUAL DAMAGES OR COMPENSATORY DAMAGES DESPITE ABSENCE OF MALICIOUS

INTENT

3. Algarra v. Sandejas
G.R. No. L-8385, March 24, 1914
Trent, J.

FACTS:
This is a civil action for personal injuries received from a collision with the defendant's automobile due to the
negligence of the defendant, who was driving the car. The negligence of the defendant is not questioned and this
case involves only the amount of damages which should be allowed.

Lucio Algarra filed a civil action for personal injuries received from a car collision due to the negligence of Sixto
Sandejas causing him to be hospitalized for 10 days, four of five days of which he could not leave his bed. After
being discharged, he still continued to receive medical treatment and that he had done no work since he was not
yet entirely recovered. He also spent to pay the doctor P8 and medicine P2, the expense totalling to P110. Since
his accident, his wife tried to keep up with their business but only 4 regular customers remained. The Lower court
refused to allow him anything for his injury on the ground that the doctrine of Marcelo vs. Velasco is opposed to
such allowance and Viada which does not pertain to personal injuries

ISSUE:
Is there actual or compensatory damage despite absence of malicious intent?

HELD:

YES, there is actual or compensatory damage despite the absence of malicious intent. In order that an act
omission may be the proximate cause of an injury, the injury must be the natural and probable consequence of
the act or omission and such as might have been foreseen by an ordinarily responsible and prudent man, in the
light of the attendant circumstances, as likely to result therefrom. 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; and (3) The connection of cause and effect between the negligence and the damages.

"Actual damages" for purpose of the law in awarding actual damages is to repair the wrong that has been done,
to compensate for the injury inflicted, and not to impose a penalty not dependent on nor graded by the intent with
which the wrongful act is done. It shall be construed to include all damages that the plaintiff may he has suffered
in respect to his property, business, trade, profession, or occupation, and no other damages whatever." Proceed
from a sense of natural justice. Indemnity comprises, not only the value of loss suffered, but also that of the
prospective profit that was not realized, and the obligation of the debtor in good faith is limited to such losses and
damages as were foreseen or might have been foreseen at the time the obligation was incurred and which are a
necessary consequence of his failure of fulfillment.

In the present case, we not only have the value of plaintiff's business to him just prior to the accident, but we also
have its value to him after the accident. The value of such a business depends mainly on the ordinary profits
derived from it. Such value cannot be ascertained without showing what the usual profits are; nor are the ordinary
profits incident to such a business contingent or speculative, in the sense that excludes profits from consideration
as an element of damages. What they would have been, in the ordinary course of the business, for a period
during which it was interrupted, may be shown with reasonable certainty.

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 TORTS
Culpa Aquiliana v. Culpa Contractual v. Culpa Criminal

THE ACT THAT BREAKS THE CONTRACT MAY ALSO BE TORT

4. Singson v. Bank of the Philippine Islands

G.R. No. L-24837. 29 June 1968
Concepcion, C.J.

FACTS:
Singson was one of the defendants in a civil case filed before the CFI Manila. Judgment was rendered sentencing
him and his co-defendants Celso Lobregat and Villa-Abrille & Co. to pay the sum of P105,539.56 to Philippine
Milling Co. Singson and Lobregat appealed, while the decision became final and executory as to Villa-Abrille. A
writ of garnishment was issued to BPI against the Villa-Abrille’s account.

The clerk of BPI who received the writ saw the petitioner’s name and, without reading the full text, wrote a letter
for the signature of the bank President, informing Singson of the garnishment. Subsequently, Singson issued two
checks. The one issued in favor of B.M. Glass Service was dishonoured, and so petitioner’s account with the
latter was closed. Singson wrote a letter to the bank, claiming that his account is not included in the writ of
garnishment. Having confirmed so, the bank President Santiago Friexas apologized to Singson and rectified the
mistake. Singson filed a claim for damages. The lower court ruled that damages for quasi-delict cannot be
sustained because the relationship between the parties is contractual. Petitioner and his wife appealed the case.

Issue:
Can damages based on torts be awarded when there is a contract?

Held:
Yes. The existence of a contract between the parties does not bar the commission of a tort by the one against
the order and the consequent recovery of damages therefor. The act that breaks the contract may also be a tort.
Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs.
Carrascoso, involving an airplane passenger who, despite his first-class ticket, had been illegally ousted from his
first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover
damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between a
passenger and a carrier is "contractual both in origin and nature ... the act that breaks the contract may also be
a tort".

In view, however, of the facts obtaining in the case at bar, and considering, particularly, the circumstance, that
the wrong done to the plaintiff was remedied as soon as the President of the bank realized the mistake he and
his subordinate employee had committed, the Court finds that an award of nominal damages — the amount of
which need not be proven — in the sum of P1,000, in addition to attorney's fees in the sum of P500, would suffice
to vindicate plaintiff's rights.

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 TORTS
Culpa Aquiliana v. Culpa Contractual v. Culpa Criminal

RULE AGAINST DOUBLE RECOVERY: THE SAME ACT OR OMISSION CAN CREATE TWO KINDS OF
LIABILITY ON THE PART OF THE OFFENDER, THAT IS, CIVIL LIABILITY EX DELICTO AND CIVIL
LIABILITY QUASI DELICTO

5. Rafael Reyes Trucking Corp. v. People

G.R. No. 129029, April 3, 2000
PARDO, J.:

FACTS:
This is an appeal via certiorari from the decision of the Court of Appeals affirming the decision and supplemental
decision of the trial court.

In the early morning of June 20, 1989, the White Truck driven by Dunca left Tuguegarao, Cagayan bound to San
Fernando, Pampanga loaded with 2,000 cases of empty beer “Grande” bottles. Seated at the front right seat
beside him was Ferdinand Domingo, his truck helper. At around 4:00 o’clock that same morning while the truck
was descending at a slight downgrade along the national road at Tagaran, Cauayan, Isabela, it approached a
damaged portion of the road covering the full width of the truck’s right lane going south and about six meters in
length. These made the surface of the road uneven because the potholes were about five to six inches deep.
The left lane parallel to this damaged portion is smooth. As narrated by Ferdinand Domingo, before approaching
the potholes, he and Dunca saw the Nissan with its headlights on coming from the opposite direction. They used
to evade this damaged road by taking the left lance but at that particular moment, because of the incoming
vehicle, they had to run over it. This caused the truck to bounce wildly. Dunca lost control of the wheels and the
truck swerved to the left invading the lane of the Nissan. As a result, Dunca’s vehicle rammed the incoming
Nissan dragging it to the left shoulder of the road and climbed a ridge above said shoulder where it finally stopped.
The Nissan was severely damaged and its two passengers, namely, Feliciano Balcita and Francisco Dy, Jr. died
instantly.

On October 10, 1989, Provincial Prosecutor Durian filed with the RTC an amended information charging Dunca
with reckless imprudence resulting in double homicide and damage to property. On November 29, 1989, the
offended parties filed with the RTC a complaint against petitioner Rafael Reyes Trucking Corporation, as
employer of driver Dunca, based on quasi delict.

Respondents opted to pursue the criminal action but did not withdraw the civil case quasi ex delicto they filed
against petitioner. On December 15, 1989, respondents withdrew the reservation to file a separate civil action
against the accused and manifested that they would prosecute the civil aspect ex delicto in the criminal action.
However, they did not withdraw the separate civil action based on quasi delict against petitioner as employer
arising from the same act or omission of the accused driver.

The trial court rendered a joint decision finding Dunca guilty beyond reasonable doubt of the crime of Double
Homicide through Reckless Imprudence. The trial court later rendered a supplemental decision amending the
dispositive portion by ordering Rafael Reyes Trucking Corporation subsidiarily liable for all the damages awarded.

ISSUES:
(1) May the petitioner as owner of the truck involved in the accident be held subsidiarily liable for the
damages awarded to the offended parties in the criminal action against the truck driver despite the filing
of a separate civil action by the offended parties against the employer of the truck driver?

(2) May the Court award damages to the offended parties in the criminal case despite the filing of a civil
action against the employer of the truck driver?

Held:

(1) No. In negligence cases, the aggrieved party has the choice between (1) an action to enforce civil liability
arising from crime under Article 100 of the Revised Penal Code; and (2) a separate action for quasi delict
under Article 2176 of the Civil Code of the Philippines. Once the choice is made, the injured party can
not avail himself of any other remedy because he may not recover damages twice for the same negligent

8
 act or omission of the accused. This is the rule against double recovery. In other words, “the same act
or omission can create two kinds of liability on the part of the offender, that is, civil liability ex delicto, and
civil liability quasi delicto” either of which “may be enforced against the culprit, subject to the caveat
under Article 2177 of the Civil Code that the offended party can not recover damages under both types
of liability.” In the instant case, the offended parties elected to file a separate civil action for damages
against petitioner as employer of the accused, based on quasi delict, under Article 2176 of the Civil Code
of the Philippines. Petitioner, as employer of the accused who has been adjudged guilty in the criminal
case for reckless imprudence, cannot be held subsidiarily liable because of the filing of the separate civil
action based on quasi delict against it. In view of the reservation to file, and the
(2) subsequent filing of the civil action for recovery of civil liability, the same was not instituted with the
criminal action. Such separate civil action was for recovery of damages under Article 2176 of the Civil
Code, arising from the same act or omission of the accused.


(2) No. The award of damages in the criminal case was improper because the civil action for the recovery of civil
liability was waived in the criminal action by the filing of a separate civil action against the employer. The only
issue brought before the trial court in the criminal action is whether accused Dunca is guilty of reckless
imprudence resulting in homicide and damage to property. The action for recovery of civil liability is not included
therein, but is covered by the separate civil action filed against the petitioner as employer of the accused truck-
driver. The policy against double recovery requires that only one action be maintained for the same act or
omission whether the action is brought against the employee or against his employer. The injured party must
choose which of the available causes of action for damages he will bring.

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 TORTS
Culpa Aquiliana v. Culpa Contractual v. Culpa Criminal

BAD FAITH IS A STATE OF MIND AFFIRMATIVELY OPERATING WITH FURTIVE DESIGN OR WITH SOME
MOTIVE OF SELF-INTEREST

6. Air France v. Carrascoso

G.R. No. L-21438. September 28, 1966.
Sanchez, J.

FACTS:
This is a Petition for review on certiorari of decision of the Court of Appeals which affirmed the decision of the
Court of First Instance sentencing the Air France to pay Carrascoso for damages.

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March
30, 1958. On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc.,
issued to plaintiff a 'first class' round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff
travelled in 'first class', but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the 'first
class' seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a 'white
man', who, the Manager alleged, had a 'better right' to the seat. When asked to vacate his 'first class' seat, the
plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken over his
dead body; a commotion ensued, and, according to said Ernesto G, Cuento, 'many of the Filipino passengers
got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot discussion with the
white man [manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the
white man' and plaintiff reluctantly gave his 'first class' seat. in the plane.

Issue:
Is there bad faith on the part of the petitioner airline making it liable for damages?

HELD:
Yes, there is bad faith on the part of Air France.

The manager not only prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his
arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of having to go to the tourist
class compartment - just to give way to another passenger whose right thereto has not been established.
Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is understood
in law. For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with some
motive of self-interest or will or for ulterior purpose."

A contract to transport passengers is quite different in kind and degree from any other contractual relation. And
this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore,
generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally,
could give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees
with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or
discourteous conduct on the part of employees towards a passenger gives the latter an action for damages
against the carrier.

Thus, "Where a steamship company had accepted a passenger's check, it was a breach of contract and a tort,
giving a right of action for its agent in the presence of third persons to falsely notify her that the check was
worthless and demand payment under threat of ejection, though the language used was not insulting and she
was not ejected." And this, because, although the relation of passenger and carrier is "contractual both in origin
and nature" nevertheless "the act that breaks the contract may be also a tort". And in another case, "Where a
passenger on a railroad train, when the conductor came to collect his fare tendered him the cash fare to a point
where the train was scheduled not to stop, and told him that as soon as the train reached such point he would

10
pay the cash fare from that point to destination, there was nothing in the conduct of the passenger which justified
the conductor in using insulting language to him, as by calling him a lunatic," and the Supreme Court of South
Carolina there held the carrier liable for the mental suffering of said passenger.

Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we
have said, is placed upon his wrongful expulsion. This is a violation of public duty by the petitioner air carrier —
a case of quasi-delict. Damages are proper.

11
 TORTS
Culpa Aquiliana v. Culpa Contractual v. Culpa Criminal

CIVIL LIABILITY COEXISTS WITH CRIMINAL RESPONSIBILITY

7. Padua v. Robles
No. L-40486. August 29, 1975.
Castro, J.

FACTS:
In the early morning of New Year’s Day of 1969 a taxicab (bearing 1968 plate no. TX-9395 and driven by Romeo
N. Punzalan but operated by the Bay Taxi Cab owned by Gregorio N. Robles) struck ten-year old Normandy
Padua on the national road in barrio Barretto, Olongapo City. The impact hurled Normandy about forty meters
away from the point where the taxicab struck him, as a result of which he died.

Subsequently, Normandy’s parents (Paulino and Lucena Bebin Padua), by complaint filed with the Court of First
Instance of Zambales (civil case 427-O), sought damages from Punzalan and the Bay Taxi Cab; likewise, the
city Fiscal of Olongapo, by information filed with the same court (criminal case 1158-O), charged Punzalan with
homicide through reckless imprudence.

The court a quo in Civil Case 427-0 adjudge for the Paduas ordering Punzalan to pay the plaintiffs damages.
Almost a year later, the court a quo, in Criminal Case 1158-0, convicted Punzalan for the crime of homicide
through reckless imprudence. After the judgment in the civil case became final, Paduas sought execution but the
writ of execution was not satisfied. Paduas instituted an action in the same court against Robles to enforce the
latter’s subsidiary liability under Art. 103 of the RPC. The court a quo dismissed the action on the ground that it
states no cause of action.

Issue:

Did the negligent act of Punzalan give rise to the two separate and independent liabilities?

HELD:

Civil liability coexists with criminal responsibility. In negligence cases, the offended party (or his heirs) has the
option between an action for enforcement of civil liability based on culpa criminal under article 100 of the Revised
Penal Code and an action for recovery of damages based on culpa aquiliana under article 2177 of the Civil Code.
The action for enforcement of civil liability based on culpa criminal section 1 of Rule 111 of the Rules of Court
deems simultaneously instituted with the criminal action, unless expressly waived or reserved for a separate
application by the offended party. Article 2177 of the Civil Code, however, precludes recovery of damages twice
for the same negligent act or omission.

In the case at bar, the Court finds it immaterial that the Paduas chose, in the first instance, an action for recovery
of damages based on culpa aquiliana under articles 2176, 2177, and 2180 of the Civil Code, which action proved
ineffectual. The Court also takes note of the absence of any inconsistency between the aforementioned action
priorly availed of by the Paduas and their subsequent application for enforcement of civil liability arising from the
offense committed by Punzalan and, consequently, for exaction of Robles' subsidiary responsibility. Allowance
of the latter application involves no violation of the proscription against double recovery of damages for the same
negligent act or omission. For, as hereinbefore stated, the corresponding officer of the court a quo returned
unsatisfied the writ of execution issued against Punzalan to satisfy the amount of indemnity awarded to the
Paduas in civil case 427-0. Article 2177 of the Civil Code forbids actual double recovery of damages for the same
negligent act or omission. Finally, the Court notes that the same judge * tried, heard, and determined both civil
case 427-0 and criminal case 1158-0. Knowledge of an familiarity with all the facts and circumstances relevant
and relative to the civil liability of Punzalan may thus be readily attributed to the judge when he rendered judgment
in the criminal action.

12
 TORTS
Culpa Aquiliana v. Culpa Contractual v. Culpa Criminal

AN ACTION BASED ON QUASI-DELICT MAY PROCEED INDEPENDENTLY OF THE CRIMINAL

PROCEEDINGS AND REGARDLESS OF THE RESULT OF THE LATTER

8. Mendoza v. Arrieta
G.R. No. L-32599. June 29, 1979
Melencio-Herrera, J.:

FACTS:
This is a petition for review on certiorari of the orders of respondent Judge in Civil Case No. 80803 dismissing
the complaint for damages based on quasi delict against respondents Felino Timbol and Rodolfo Salazar.

A three- way vehicular accident involving a Mercedes Benz owned and driven by petitioner; a private jeep owned
and driven by respondent Rodolfo Salazar; and a gravel and sand truck owned by respondent Felipino Timbol
and driven by Freddie Montoya. As a consequence of said mishap, two separate Informations for Reckless
Imprudence Causing Damage to Property were filed against Rodolfo Salazar and Freddie Montoya. The trial
Court absolved jeep-owner-driver Salazar of any liability, civil and criminal, in view of its findings that the collision
between Salazar’s jeep and petitioner’s car was the result of the former having been bumped from behind by the
truck driven by Montoya. Neither was petitioner awarded damages as he was not a complainant against truck-
driver Montoya but only against jeep- owner-driver Salazar. After the termination of the criminal cases, petitioner
filed a civil case against respondents jeep-owner-driver Salazar and Felino Timbol, the latter being the owner of
the gravel and sand truck driven by Montoya, for indemnification for the damages sustained by his car as a result
of the collision involving their vehicles. Jeep-owner-driver Salazar and truck- owner Timbol were joined as
defendants, either in the alternative or in solidum allegedly for the reason that petitioner was uncertain as to
whether he was entitled to relief against both on only one of them. Respondent Judge dismissed the Complaint
against truck-owner Timbol and jeep- owner-driver Salazar.

Issue:

Whether or not Respondent Timbol and Salazar are liable for damages to Petitioner despite the previous
judgment in a criminal case.

HELD:
Respondent Timbol is liable but Respondent Salazar is not.

As to the complaint against truck-owner Timbol, petitioner's cause of action against Timbol in the civil case is
based on quasi-delict is evident from the recitals in the complaint, to wit: that while petitioner was driving his car
along MacArthur Highway at Marilao, Bulacan, a jeep owned and driven by Salazar suddenly swerved to his
(petitioner's) lane and collided with his car; That the sudden swerving of Salazar's jeep was caused either by the
negligence and lack of skill of Freddie Montoya, Timbol's employee, who was then driving a gravel and sand
truck in the same direction as Salazar's jeep; and that as a consequence of the collision, petitioner's car suffered
extensive damage amounting to P12,248.20 and that he likewise incurred actual and moral damages, litigation
expenses and attorney's fees. Clearly, therefore, the two factors that a cause of action must consist of, namely:
(1) plaintiff's primary right, i.e., that he is the owner of a Mercedes Benz, and (2) defendant's delict or wrongful
act or omission which violated plaintiff's primary right, i.e., the negligence or lack of skill either of jeep-owner
Salazar or of Timbol's employee, Montoya, in driving the truck, causing Salazar's jeep to swerve and collide with
petitioner's car, were alleged in the Complaint.

Consequently, petitioner's cause of action being based on quasi-delict, respondent Judge committed reversible
error when he dismissed the civil suit against the truck-owner, as said case may proceed independently of the
criminal proceedings and regardless of the result of the latter.

As to the suit against jeep-owner-driver Salazar, who was acquitted in Criminal Case No. SM-228, the case
presents a different picture altogether.

13
At the outset it should be clarified that inasmuch as civil liability coexists with criminal responsibility in negligence
cases, the offended party has the option between an action for enforcement of civil liability based on culpa
criminal under Article 100 of the Revised Penal Code, and an action for recovery of damages based on culpa
aquiliana under Article 2177 of the Civil Code. The action for enforcement of civil liability based on culpa
criminal under section 1 of Rule 111 of the Rules of Court is deemed simultaneously instituted with the criminal
action, unless expressly waived or reserved for separate application by the offended party.

The circumstances attendant to the criminal case yields the conclusion that petitioner had opted to base his
cause of action against jeep-owner-driver Salazar on culpa criminal and not on culpa aquiliana, as evidenced by
his active participation and intervention in the prosecution of the criminal suit against said Salazar. The latter's
civil liability continued to be involved in the criminal action until its termination. Such being the case, there was
no need for petitioner to have reserved his right to file a separate civil action as his action for civil liability was
deemed impliedly instituted in Criminal Case No. SM-228. Neither would an independent civil action be.

Crystal clear is the trial Court's pronouncement that under the facts of the case, jeep-owner driver Salazar cannot
be held liable for the damages sustained by petitioner's car. In other words, "the fact from which the civil might
arise did not exist." Accordingly, inasmuch as petitioner's cause of action as against jeep-owner-driver Salazar
is ex-delictu, founded on Article 100 of the Revised Penal Code, the civil action must be held to have been
extinguished in consonance with Section 3(c), Rule 111 of the Rules of Court. And even if petitioner's cause of
action as against jeep-owner-driver Salazar were not ex-delictu, the end result would be the same, it being clear
from the judgment in the criminal case that Salazar's acquittal was not based upon reasonable doubt,
consequently, a civil action for damages can no longer be instituted.

14
 TORTS
Culpa Aquiliana v. Culpa Contractual v. Culpa Criminal

JUDGMENT OF CONVICTION OF THE EMPLOYEE IS ALSO BINDING AND CONCLUSIVE AS TO THE

EMPLOYER’S SUBSIDIARY LIABILITY

9. Jocson vs. Glorioso

GR No. L-22686, January 30, 1968.
Fernando, J.

FACTS:
For the death of a three-year-old boy who was run over by a passenger jeepney, two actions were filed by the
parents, the first, against its owner and the driver for culpa aquiliana, and the other, against the driver for homicide
thru reckless imprudence, the criminal action having been instituted while the civil case was pending trial. The
civil case was dismissed, the lower court being of the opinion that "in conscience" it could not "hold the . . .
defendant driver guilty of negligence or lack of care resulting in or contributory to, the said accident." 1 There was
an appeal, but it did not prosper, the Court of Appeals dismissing it for failure of appellants to pay the docketing
fees.

The criminal case against the driver had a different outcome. He was convicted by the trial court of homicide
through reckless imprudence.

The accused driver appealed raising as one of the issues "the propriety of sentencing the driver to pay indemnity
to the parents of the deceased child, considering the fact that the civil action for damages brought by the parents
of the child against the driver and the owner of the vehicle was dismissed." The CA modified the decision as to
duration of the prison sentence, but insofar as the civil indemnity was concerned, was affirmed. The judgment
became final but the writ of execution of the civil liability was returned unsatisfied.

The parents, now plaintiffs-appellees, in an action with the Court of First Instance of Manila against defendant,
now appellant, sought to enforce such civil liability against her as owner of the jeepney, pursuant to Article 103
of the Revised Penal Code. Judgment was rendered finding defendant liable for subsidiary liability under Art. 103
of the RPC.

Issue:
Is the dismissal of an action based on culpa aquiliana precludes the application of the plain and explicit command
of Article 103 of the Revised Penal Code?

HELD:
No. Article 103 is quite explicit. For a felony committed by servants, pupils, workmen, apprentices, or employees
in the discharge of their duties, the employers, teachers, persons, and corporations are made subsidiarily liable.
As authoritatively interpreted by this Court in Martinez v. Barredo, "judgment of conviction, in the absence of any
collusion between the defendant and the offended party, should bind the person subsidiarily liable." Such a
decision is of a "conclusive nature,” it is "binding and conclusive upon defendant not only with regard to its civil
liability but also with regard to its amount because the liability of an employer cannot be separated but follows
that of his employee."

These two cases involve two different remedies. Considering the distinguishing characteristics of the two cases,
which involve two different remedies, it can hardly be said that there is identity of reliefs in both actions as to
make the present case fall under the operation of Rule 8, section 1 (d) of the Rules of Court. What clearly emerges
then is the controlling force of the principle that once there is a conviction for a felony, final in character, the
employer, according to the command of Article 103 of the Revised Penal Code, is subsidiarily liable, if it shown
that the commission thereof was in the discharge of the duties of such employee.

15
 TORTS
Vicarious Liability

ACTION FOR QUASI-DELICT AGAINST THE EMPLOYER ENFORCES THE LATTER’S SOLIDARY, NOT
SUBSIDIARY LIABILITY

10. Poblete v. Fabros

G.R. No. L-29803, September 14, 1979
De Castro, J.

FACTS:
This is an action for damages, arising from a vehicular accident, filed by the plaintiff Godofredo Poblete as owner
of the damaged taxicab against the driver and owner of the allegedly offending vehicle, Donato Fabros and
Godofredo de la Cruz.

The RTC dismissed the case on the ground that from the allegation of the complaint, the action is one to hold
Donato Fabros, as the employer of the allegedly negligent driver, Godofredo de la Cruz, subsidiarily liable for the
damage caused the plaintiff, and is, therefore, premature, there having been no criminal action filed against the
driver who had died during the pendency of the case at bar, and, in effect, states no cause of action.

The complaint expressly and clearly alleges that the accident was "due solely to the gross negligence,
carelessness and unskillful driving of defendant Godofredo de la Cruz"

ISSUE:
Whether on the basis of the allegation of the complaint, the action is one to enforce the subsidiary liability of the
employer of the negligent driver as provided in Article 103 of the Revised Penal Code, as held by the court a
quo, or it is an action based on quasi-delict?

HELD:
It is based on quasi delict and it should not have been dismissed.

Difference of actions for delict and quasi-delict in the case of employer’s liability
In the first case, the action would be premature and would, accordingly, be wanting in a cause of action before a
judgment of conviction has been rendered against the negligent driver, for, while a separate civil action may be
filed for damages arising from the criminal offense of the accused for negligence, upon proper reservation of said
action (Section 2, Rule III, Rules of Court), the same may not be heard separately in advance or ahead of the
criminal action. While in the second case, the action not for liability arising from crime, may proceed independently
from the criminal action. It is also for a different purpose, the liability sought to be imposed on the employer being
a primary and direct liability, not merely subsidiary.

Characteristics of a quasi-delict action on vicarious liability

What needs only to be alleged under the law is that the employee (driver) has, by his negligence (quasi-delict)
caused damage to make the employer, likewise, responsible for the tortious act of the employee, and his liability
is, as earlier observed, primary and solidary. 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 the
employee. The theory of presumed negligence, in contrast with the American doctrine of respondent 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

Resulting error of the court

How the court concluded that the action is to enforce the subsidiary liability of Donato Fabros as the employer of
the negligent driver Godofredo de la Cruz is inconceivable, with the plain and explicit prayer of the complaint to
declare the defendants "jointly and severally" liable for damages, a concept antagonistic to that of subsidiary
liability. The death of defendant, Godofredo de la Cruz, the driver, is therefore, no hindrance to the present action,
at least as against the employer.

16
 TORTS
Vicarious Liability

HOSPITALS ARE SOLIDARILLY LIABLE WITH THE ERRING PHYSICIAN UNDER THREE APPLICABLE
DOCTRINES

11. Professional Services, Inc. v. Agana

G.R. No. 126297, January 31, 2007
Sandoval Gutierrez, J.

FACTS:
Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals’ Decision, affirming
with modification the Decision of the RTC and nullifying its Order.

On April 11, 1984, Dr. Ampil, assisted by the medical staff of the Medical City Hospital, performed an anterior
resection surgery on Natividad. He found that the malignancy in her sigmoid area had spread on her left ovary,
necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained the consent of Natividad’s husband,
Enrique Agana, to permit Dr. Juan Fuentes, to perform hysterectomy on her. After Dr. Fuentes had completed
the hysterectomy, Dr. Ampil took over, completed the operation and closed the incision. However, the operation
appeared to be flawed as 2 sponges were missing even after searching. After a couple of days, Natividad
complained of excruciating pain in her anal region. She consulted both Dr. Ampil and Dr. Fuentes about it. They
told her that the pain was the natural consequence of the surgery. Dr. Ampil then recommended that she consult
an oncologist to examine the cancerous nodes which were not removed during the operation, but no cancers
were found.

On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two weeks thereafter, her
daughter found a piece of gauze protruding from her vagina. Upon being informed about it, Dr. Ampil proceeded
to her house where he managed to extract by hand a piece of gauze measuring 1.5 inches in width. He then
assured her that the pains would soon vanish.

The pains intensified, prompting Natividad to seek treatment at the Polymedic General Hospital. While confined
there, Dr. Ramon Gutierrez detected the presence of another foreign object in her vagina -- a foul-smelling gauze
measuring 1.5 inches in width which badly infected her vaginal vault. A recto-vaginal fistula had formed in her
reproductive organs which forced stool to excrete through the vagina. Another surgical operation was needed to
remedy the damage. Hence, this case against Professional Services, Inc. (PSI), owner of the Medical City
Hospital, Dr. Ampil, and Dr. Fuentes for negligence for leaving two pieces of gauze inside Natividad’s body and
malpractice for concealing their acts of negligence.

ISSUE:
Should PSI be held solidarily liable with Dr. Ampil?

HELD: Yes, it should be held solidarily liable

Employer-employee relationship
In our shores, the nature of the relationship between the hospital and the physicians is rendered inconsequential
in view of our categorical pronouncement in Ramos v. Court of Appeal8 that for purposes of apportioning
responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals
and their attending and visiting physicians since, private hospitals, hire, fire and exercise real control over their
attending and visiting ‘consultant’ staff. While ‘consultants’ are not, technically employees, the control exercised,
the hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-employee
relationship, with the exception of the payment of wages. In assessing whether such a relationship in fact exists,
the control test is determining.

But the Ramos pronouncement is not our only basis in sustaining PSI’s liability. Its liability is also anchored upon
the agency principle of apparent authority or agency by estoppel and the doctrine of corporate negligence which
have gained acceptance in the determination of a hospital’s liability for negligent acts of health professionals.
The present case serves as a perfect platform to test the applicability of these doctrines, thus, enriching our
jurisprudence.

17
Apparent Authority
Apparent authority, or what is sometimes referred to as the "holding out" theory, or doctrine of ostensible agency
or agency by estoppel, has its origin from the law of agency. Thus, in cases where it can be shown that a hospital,
by its actions, has held out a particular physician as its agent and/or employee and that a patient has accepted
treatment from that physician in the reasonable belief that it is being rendered in behalf of the hospital, then the
hospital will be liable for the physician’s negligence.

In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and specializations of the
physicians associated or accredited by it, including those of Dr. Ampil and Dr. Fuentes. We concur with the Court
of Appeals’ conclusion that it "is now estopped from passing all the blame to the physicians whose names it
proudly paraded in the public directory leading the public to believe that it vouched for their skill and competence."
Indeed, PSI’s act is tantamount to holding out to the public that Medical City Hospital, through its accredited
physicians, offers quality health care services. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising
their qualifications, the hospital created the impression that they were its agents, authorized to perform medical
or surgical services for its patients. As expected, these patients, Natividad being one of them, accepted the
services on the reasonable belief that such were being rendered by the hospital or its employees, agents, or
servants.

Doctrine of Corporate Negligence

A hospital’s corporate negligence extends to permitting a physician known to be incompetent to practice at the
hospital. With the passage of time, more duties were expected from hospitals, among them: (1) the use of
reasonable care in the maintenance of safe and adequate facilities and equipment; (2) the selection and retention
of competent physicians; (3) the overseeing or supervision of all persons who practice medicine within its walls;
and (4) the formulation, adoption and enforcement of adequate rules and policies that ensure quality care for its
patients.

In the present case, it was duly established that PSI operates the Medical City Hospital for the purpose and under
the concept of providing comprehensive medical services to the public. Accordingly, it has the duty to exercise
reasonable care to protect from harm all patients admitted into its facility for medical treatment. Unfortunately,
PSI failed to perform such duty. PSI’s liability is traceable to its failure to conduct an investigation of the matter
reported in the nota bene of the count nurse. Such failure established PSI’s part in the dark conspiracy of silence
and concealment about the gauzes. Ethical considerations, if not also legal, dictated the holding of an immediate
inquiry into the events, if not for the benefit of the patient to whom the duty is primarily owed, then in the interest
of arriving at the truth.

18
 TORTS
Vicarious Liability

GSIS VICARIOUS LIABILITY IS A NON-ISSUE WHEN THE CASE INVOLVES A BREACH OF CONTRACT

12. GSIS v. Spouses Deang

G.R. No. 135644, September 17, 2001
Pardo, J.

FACTS:
This is a petition 2 for review on certiorari of the decision of the Court of Appeals 3 affirming the decision of the
Regional Trial Court ordering GSIS to pay Sps. Deang Damages.

Sometime in December 1969, the spouses Deang obtained a housing loan from the GSIS in the amount of eight
thousand five hundred pesos (P8,500.00). Under the agreement, the loan was to mature on December 23, 1979.
The loan was secured by a real estate mortgage. Eleven (11) months before the maturity of the loan, the spouses
Deang settled their debt with the GSIS and requested for the release of the owners duplicate copy of the title
since they intended to secure a loan from a private lender and use the land covered by it as collateral security.

However, personnel of the GSIS were not able to release the owners duplicate of the title as it could not be found
despite diligent search. As stated earlier, the spouses as mortgagors deposited the owners duplicate copy of the
title with the GSIS located at its office in San Fernando, Pampanga. GSIS reconstituted a copy on June 1979.
Hence, they filed a complaint against GSIS for damages, claiming that as result of the delay in releasing the
duplicate copy of the owners title, they were unable to secure a loan the proceeds of which could have been
used in defraying the estimated cost of the renovation of their residential house and which could have been
invested in some profitable business undertaking.

GSIS counters that it is not liable for the acts of its employees as a government body.

ISSUE:
Is the GSIS, as a GOCC primarily performing governmental functions, liable for a negligent act of its employee
acting within the scope of his assigned tasks?

HELD:
Yes, it is liable.

According to Article 2180, 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
of industry.

The State is responsible in like manner when it acts though a special agent, but not when the damage has been
caused by the official to whom the task was done properly pertains, in which case what is provided in Article
2176 shall be applicable.

The second paragraph is not applicable in the case at bar since the case does not involve a quasi-delict. Under
the facts, there was a pre-existing contract between the parties. GSIS and the spouses Deang had a loan
agreement secured by a real estate mortgage. The duty to return the owners duplicate copy of title arose as soon
as the mortgage was released. GSIS insists that it was under no obligation to return the owners duplicate copy
of the title immediately. This insistence is not warranted. Negligence is obvious as the owners duplicate copy
could not be returned to the owners.

Thus, the more applicable provisions of the Civil Code are: Article 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof
are liable for damages

19
 TORTS
Vicarious Liability

LIABILITY OF PARENTS OVER ACTS OF THEIR CHILDREN IS PRIMARY

13. Libi v. Intermediate Appellate Court

G.R. No. 70880, September 18, 1992
Ponente, J.

FACTS:
This is a petition for review on certiorari assailing the decision of the CA reversing the RTC decision and holding
the petitioners solidarily liable for damages.

For more than two (2) years before their deaths, Julie Ann Gotiong and Wendell Libi were sweethearts until
December, 1978 when Julie Ann broke up her relationship with Wendell after she supposedly found him to be
sadistic and irresponsible. During the first and second weeks of January, 1979, Wendell kept pestering Julie Ann
with demands for reconciliation but the latter persisted in her refusal, prompting the former to resort to threats
against her. In order to avoid him, Julie Ann stayed in the house of her best friend. On January 14, 1979, Julie
Ann and Wendell died, each from a single gunshot wound inflicted with the same firearm, a Smith and Wesson
revolver licensed in the name of petitioner Cresencio Libi.

Private respondents, bereaved over the death of their daughter, submitted that Wendell caused her death by
shooting her with the aforesaid firearm and, thereafter, turning the gun on himself to commit suicide. On the other
hand, Petitioners, puzzled and likewise distressed over the death of their son, rejected the imputation and
contended that an unknown third party, whom Wendell may have displeased or antagonized by reason of his
work as a narcotics informer of the Constabulary Anti-Narcotics Unit (CANU), must have caused Wendell’s death
and then shot Julie Ann to eliminate any witness and thereby avoid identification.

ISSUE:
What is the nature of the liability of parents on the acts of their children?

HELD:
It is primary.

The Court found the findings of fact leaning towards the theory of private respondents.

The civil liability of parents for quasi-delicts of their minor children, as contemplated in Article 2180 of the Civil
Code, is primary and not subsidiary. In fact, if we apply Article 2194 of said code which provides for solidary
liability of joint tortfeasors, the persons responsible for the act or omission, in this case the minor and the father
and, in case of his death of incapacity, the mother, are solidarily liable. Accordingly, such parental liability is
primary and not subsidiary, hence the last paragraph of Article 2180 provides that" (t)he responsibility treated of
in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good
father of a family to prevent damage.

We are also persuaded that the liability of the parents for felonies committed by their minor children is likewise
primary, not subsidiary since Art. 101 of the RPC provides that the child, who has acted without discernment,
shall devolve upon those having such person under their legal authority or control, unless it appears that there
was no fault or negligence on their part.

Also in both quasi-delicts and crimes the parents primarily respond for such damages is buttressed by the
corresponding provisions in both codes that the minor transgressor shall be answerable or shall respond with his
own property only in the absence or in case of insolvency of the former. Thus, for civil liability ex quasi delicto of
minors, Article 2182 of the Civil Code states that" (i)f the minor causing damage has no parents or guardian, the
minor . . . shall be answerable with his own property in an action against him where a guardian ad litem shall be
appointed." For civil liability ex delicto of minors, an equivalent provision is found in the third paragraph of Article
101 of the Revised Penal Code.

20
As to crimes committed by their minor children over 9 but under 15 years of age, who acted with discernment,
and also of minors 15 years of aye or over, since these situations are not covered by Article 101, Revised Penal
Code, should be resolved in accordance with the provisions of Article 2180 for the reasons well expressed in
Salen and adopted in the cases hereinbefore enumerated that to hold that the civil liability under Article 2180
would apply only to quasi-delicts and not to criminal offenses would result in the absurdity that in an act involving
mere negligence the parents would be liable but not where the damage is caused with criminal intent.

Under the foregoing considerations, therefore, we hereby rule that the parents are and should be held primarily
liable for the civil liability arising from criminal offenses committed by their minor children under their legal
authority or control, or who live in their company, unless it is proven that the former acted with the diligence of a
good father of a family to prevent such damages. That primary liability is premised on the provisions of Article
101 of the Revised Penal Code with respect to damages ex delicto caused by their children 9 years of age or
under, or over 9 but under 15 years of age who acted without discernment; and, with regard to their children over
9 but under 15 years of age who acted with discernment, or 15 years or over but under 21 years of age, such
primary liability shall be imposed pursuant to Article 2180 of the Civil Code.

Under said Article 2180, the enforcement of such liability shall be effected against the father and, in case of his
death or incapacity, the mother. This was amplified by the Child and Youth Welfare Code which provides that the
same shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case of her
death or incapacity, upon the guardian, but the liability may also be voluntarily assumed by a relative or family
friend of the youthful offender. However, under the Family Code, this civil liability is now, without such alternative
qualification, the responsibility of the parents and those who exercise parental authority over the minor offender.
For civil liability arising from quasi-delicts committed by minors, the same rules shall apply in accordance with
Articles 2180 and 2182 of the Civil Code, as so modified.

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 TORTS
Vicarious Liability

THE REGISTERED OWNER RULE MUST BE HARMONIZED WITH ARTICLE 2180

14. Caravan Travel and Tours International v. Abejar

G.R. No. 170631, February 10, 2016
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari filed by petitioner Caravan Travel and Tours International Inc. seeking
to reverse the decision of the CA finding it solidarily liable with its employee for the death of Jesmarie Reyes
(Reyes).

While walking along the street, Reyes was hit by a van driven by Jimmy Bautista whose registered owner was
petitioner. Reyes died two (2) days after the accident. Respondent, aunt of the victim, filed a complaint for
damages against petitioner and Bautista. Both the RTC and CA found Bautista grossly negligent, hence, liable
for damages.

Petitioner argues that Abejar has no personality to bring this suit because she is not a real party in interest, that
Abejar offered no documentary or testimonial evidence to prove that Bautista, the driver, acted "within the scope
of his assigned tasks" when the accident occurred, and that it exercised the diligence of a good father of a family
in the selection and supervision of its employees.

Respondent, on the other hand, argues that petitioner failed to provide proof that it exercised the requisite
diligence in the selection and supervision of Bautista and that since Caravan is the registered owner of the van,
it is directly, primarily, and solidarity liable for the tortious acts of its driver.

ISSUE:
Is petitioner solidarily liable for the tortious acts of its employee?

HELD:
YES, petitioner is solidarily liable. Article 2180 requires proof of two things: first, an employment relationship
between the driver and the owner; and second, that the driver acted within the scope of his or her assigned tasks.
On the other hand, applying the registered-owner rule only requires the plaintiff to prove that the defendant-
employer is the registered owner of the vehicle.

The Court harmonized the seeming conflict between these two. The Court ruled that the appropriate approach is
that in cases where both the registered-owner rule and Article 2180 apply, the plaintiff must first establish that
the employer is the registered owner of the vehicle in question. Once the plaintiff successfully proves ownership,
there arises a disputable presumption that the requirements of Article 2180 have been proven. As a
consequence, the burden of proof shifts to the defendant to show that no liability under Article 2180 has arisen.

In this case, respondent sufficiently proved that petitioner was the registered owner of the van by presenting copy
of the Certificate of Registration of the van. The burden, thus, shifted to petitioner to establish that it incurred no
liability under Article 2180. This it can do by presenting proof of any of the following: first, that it had no
employment relationship with Bautista; second, that Bautista acted outside the scope of his assigned tasks; or
third, that it exercised the diligence of a good father of a family in the selection and supervision of Bautista.
Petitioner failed to prove all these; hence, it is solidarily liable to respondent.

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 TORTS
Vicarious Liability

GOVERNMENT LIABLE ONLY WHEN IT ACTS THROUGH A SPECIAL AGENT

15. Meritt v. Government of the Philippine Islands

G.R. No. L-11154, March 21, 1916
Trent, J.

FACTS:
This is an appeal by both parties from a judgment of the Court of First Instance of Manila in favor of the plaintiff.
Petitioner was going toward the western part of Calle Padre Faura. upon crossing Taft Avenue the General
Hospital ambulance, upon reaching said avenue, instead of turning toward the south turned suddenly and
unexpectedly, by which movement it struck the petitioner. As a result of the accident, his physical condition had
undergone a noticeable depreciation, for he had lost the agility, energy, and ability that he had constantly
displayed before the accident as one of the best constructors of wooden buildings and he could not now earn
even a half of the income that he had secured for his work. Act No. 2457 was enacted authorizing petitioner to
bring suit against the respondent and authorized the Attorney-General of said Islands to appear in said suit.

ISSUE:
Is the Government of the Philippine Islands liable for the tortious acts committed by the driver of the ambulance?

HELD:
NO, respondent is liable. It being quite clear that Act No. 2457 does not operate to extend the Government's
liability to any cause not previously recognized, we will now examine the substantive law touching the defendant's
liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of article 1903 of the Civil Code
holds the State liable when it acts through a special agent but not when the damage should have been caused
by the official to whom properly it pertained to do the act performed.
A special agent, in the sense in which these words are employed, is one who receives a definite and fixed order
or commission, foreign to the exercise of the duties of his office if he is a special official. This concept does not
apply to any executive agent who is an employee of the acting administration and who on his own responsibility
performs the functions which are inherent in and naturally pertain to his office and which are regulated by law
and the regulations.
It is, therefore, evident that the State (the Government of the Philippine Islands) is only liable, according to the
above quoted decisions of the Supreme Court of Spain, for the acts of its agents, officers and employees when
they act as special agents within the meaning of paragraph 5 of article 1903, supra, and that the chauffeur of the
ambulance of the General Hospital was not such an agent.
Therefore, in this case, since the government did not act through a special agent, it cannot be held liable.

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 TORTS
Vicarious Liability

THE STATE IS LIABLE ONLY FOR TORTS CAUSED BY ITS SPECIAL AGENT

16. Republic v. Palacio

G.R. No. L-20322, May 29, 1968
Reyes, J.B.L., J.

FACTS
This is a petition for review of the decision of the CA, dismissing the original action for certiorari and prohibition
filed with said Court by herein petitioner Republic of the Philippines, to restrain the enforcement of a writ of
execution on the trust fund in the account of the Irrigation Service Unit with the Philippine National Bank.

Ildefonso Ortiz instituted before the CFI a civil case against the Handong Irrigation Association, Inc. and the
Irrigation Service Unit (ISU) an office or agency under the Department of Public Works and Communications, to
recover possession, with damages, of a 958 square meter-lot. A motion to dismiss was filed by the Republic of
the Philippines but it was denied on the ground that the Irrigation Service Unit is engaged in the private business
of selling irrigation pumps and construction materials on installment plan. Thereafter, a writ of execution was
issued against the deposits and/or pump irrigation trust fund in the account of the Irrigation Service Unit at the
Philippine National Bank, Manila. The trial court denied the Government’s motion to lift the order of garnishment.

ISSUE
Can the state be held liable for tort caused by ISU?

HELD:

No, the state cannot be held liable for a tort.

ISU is not only an office in the Government of the Republic of the Philippines, created to promote a specific
economic policy of said government, but also that its activity (of selling irrigation pumps to farmers on installment
basis) is not intended to earn profit or financial gain to its operator. The mere fact that interests are being collected
on the balance of the unpaid cost of the purchased pumps does not convert this economic project of the
government into a corporate activity.

The ISU’s liability arose from tort and not from contract; and it is a well-entrenched rule in this jurisdiction,
embodied in Article 2180 of the Civil Code of the Philippines, that the State is liable only for torts caused by its
special agents, specially commissioned to carry out the acts complained of outside of such agent's regular duties.
There being no proof that the making of the tortious inducement was authorized, neither the State nor its funds
can be made liable therefor.

24
 TORTS
Vicarious Liability

PROOF OF EXERCISE OF DUE DILIGENCE IN THE SELECTION OF EMPLOYEES OVERCOMES

PRESUMPTION OF NEGLIGENCE OF THE EMPLOYER

17. Ramos vs. Pepsi Cola Bottling Co.

G.R. No. L-22533, February 9, 1967
Bengzon, J.

FACTS:
Petitioner Ramos filed a petition for review assailing the judgment of the CA, which exculpated respondent Pepsi
Cola from solidary liability for damages sustained by petitioner brought about by a vehicle collision.

There was a collision between Ramos’ Petitioner’s car and Pepsi-Cola’s tractor-truck driven by its employee
Bonifacio. As a consequence of the damages sustained by Ramos due to the negligence of its driver, Ramos
filed a complaint against Bonifacio and respondent before the CFI. The respondent denies liability, arguing that
it exercised due diligence in the selection of its employee. Accordingly, Bonfiacio was first hired as a member of
the bottle crop in the production department; that when he was hired as a driver, he was sized up by looking into
his background, asking him to submit clearances, previous experience, physical examination and later on, he
was sent to the pool house to take the usual driver’s examination, among other requirements.

ISSUE:
Was respondent able to prove its diligence in the selection of its driver Bonifacio to exculpate it from liability?

HELD:
Yes, respondent was able to prove its diligence in the selection of its driver Bonifacio to exculpate it from liability.
The responsibility treated of in Article 2180 shall cease when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to prevent damage.

Two things are apparent from this provision: (1) That when an injury is caused by the negligence of a servant or
employee there instantly arises a presumption of law that there was negligence on the part of the master or
employer either in the selection of the servant or employee, or in supervision over him after the selection, or both;
and (2) that the presumption is juris tantum and not juris et de jure, and consequently may be rebutted. It
necessarily follows that if the employer shows to the satisfaction of the court that he exercised the diligence of a
good father of a family in the selection and supervision of his employees, the presumption is overcome and he
is thereby relieved from liability.

In this case, it was proven that respondent had carefully examined the erring driver as to his qualifications,
experience and record of service, such evidence is sufficient to show that the respondent exercised the diligence
of a good father of a family in the selection of the driver and rebuts the juris tantum presumption that the
respondent was negligent in selecting said driver

Therefore, respondent was able to prove its diligence in the selection of its driver Bonifacio hence, exculpates
him from liability.

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 TORTS
Vicarious Liability

LIABILITY OF TEACHERS FOR TORTS COMMITTED BY THEIR STUDENTS

18. Ylarde vs. Aquino and Soriano

G.R. No. L-33722, July 29, 1988
Gancayco, J.

FACTS:
Petitioner parents of student Novelito Ylarde filed a petition for review on certiorari assailing the judgment of the
CA, which affirmed the lower court’s decision in exculpating respondent teacher Edgardo Aquino and principal
Mauro Soriano from liability on damages for the injuries sustained and death of their child.

Aquino instructed four (4) of his students, including Novelito, to dig a pit hole in order to bury the large boulder
debris of one of the school buildings destroyed during the World War II. After completing the excavation, Aquino
left the students, who then played inside the pit and on the pile of boulders beside it. The boulders suddenly slide
down towards the pit and left Novelito trapped therein. Novelito sustained severe injuries and eventually died.
Thereafter, petitioners filed a claim for damages against respondents but was dismissed by the CFI and was
affirmed by the CA.

ISSUE:
Can both respondent teacher and principal be held liable for damages?

HELD:
No, the teacher and principal cannot both be held liable for damages.

Under the last paragraph of Article 2180 of the Civil Code, teachers or heads of establishments of arts and trades
shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their
custody. In Amadora vs. CA, it was ruled that it is only the teachers and not the principal or head of an academic
school who should be answerable for torts committed by their students. Where the school is academic rather
than technical or vocational in nature, responsibility for the tort committed by the student will attach to the teacher
in charge of such student. In a school of arts and trades, it is only the head of the school who can be held liable.
In other words, the teachers in general shall be liable for the acts of their students, except where the school is
technical in nature, in which case it is the head thereof who shall be answerable.

Applying the said doctrine to this case, Aquino, as the teacher-in-charge of school children, should be held liable
for negligence in his supervision over them and his failure to take the necessary precautions to prevent any injury
on their persons. Besides, as clearly admitted by private respondent Aquino, private respondent Soriano did not
give any instruction regarding the digging. However, as regards the principal Soriano, he cannot be held liable
for the reason that the school he heads is an academic school and not a school of arts and trades.

Therefore, it is respondent teacher Aquino should be held liable, but not respondent principal Soriano.

26
 TORTS
Vicarious Liability

THE SCHOOL ITSELF CANNOT BE HELD LIABLE UNDER ARTICLE 2180

19. Pasco vs. Court of First Instance and Araneta University

G.R. No. L-54357, April 25, 1988
Paras, J.

FACTS:
Petitioner Reynaldo Pasco filed a petition for certiorari assailing the judgment of the CA, which affirmed the CFI’s
dismissal of the complaint for damages against private respondent Araneta University for the injuries sustained
in an incident inside respondent’s premises.

Petitioner, a student of private respondent Araneta University, was mauled by a group of students while inside
the campus premises. Due to the injuries sustained by petitioner, he filed a complaint for damages under Article
2180 of the New Civil Code against private respondent. Private respondent moved to dismiss the complaint
arguing that the penultimate paragraph of Article 2180 of the New Civil Code under which it was sued applies
only to vocational schools and not to academic institutions. The motion was granted and was affirmed by the CA.

ISSUE:
Can private respondent be held liable for the injuries sustained by petitioner under Article 2180?

HELD:
No, private respondent cannot be held liable for the injuries sustained by petitioner.

The provision of the penultimate paragraph of Article 2180 of the New Civil Code which states that, “Lastly,
teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and
students or apprentices, so long as they remain in their custody.”, is equally applicable to academic institutions.
However, the Court found no necessity of discussing the applicability of the Article to educational institutions
(which are not schools of arts and trades) for the issue in this petition is actually whether or not, under the article,
the school or the university itself (as distinguished from the teachers or heads) is liable. The Court ruled in the
negative, as the provision speaks only of “teachers or heads.”

In this case, it was private respondent Araneta University which was sued by petitioner, and not its teachers or
heads, thus making it outside the purview of Article 2180.

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 TORTS
Res Ipsa Loquitur

FAILURE ON THE PART OF THE DEFENDANT TO EXPLAIN THE CAUSE OF THE EVENT CAUSING
DAMAGE TO THE PLAINTIFF RENDERS HIM LIABLE FOR DAMAGES UNDER THE DOCTRINE OF RES
IPSA LOQUITUR

20. Spouses Africa vs. Caltex (Phil.) Inc.

G.R. No. L-12986, March 31, 1966
Makalintal, J.

FACTS:
Petitioner Spouses Africa filed a petition for review assailing the decision of the CA, affirming that of the CFI’s,
which dismissed the complaint for damages against respondent Caltex (Phil.) Inc.

A fire broke out from respondent’s gas station while refilling one of the underground oil tankers. The fire razed
on the neighboring houses, including that of petitioner’s. Due to the losses sustained by petitioner, they filed a
complaint for damages against. They attributed negligence on its part which caused the fire. Respondent
disclaims liability, arguing that there was no proof as to the specific cause and origin of the fire. Petitioner invoked
the doctrine of res ipsa loquitur against the respondent, claiming that it failed to sufficiently explain the cause of
the fire. The CFI ruled in favor of respondent by dismissing the case, and was later affirmed by the CA.

ISSUE:
Does respondent’s failure to explain the cause of fire warrant its liability under the principle of res ipsa loquitur?

HELD:
Yes, respondent’s failure to explain the cause of fire warrants its liability under the principle of res ipsa loquitur.

Where the thing which caused the injury complained of is shown to be under the management of the defendant
or his servants and the accident is such as in the ordinary course of things does not happen if those who have
its management or control use proper care, it affords reasonable evidence, in the absence of explanation by the
defendant, that the accident arose from want of care. This statement of the rule of res ipsa loquitur has been
widely approved and adopted by the courts of last resort.

In this case, the gasoline station, with all its appliances, equipment and employees, was under the control of
appellees. A fire occurred therein and spread to and burned the neighboring houses. The persons who knew or
could have known how the fire started were appellees and their employees, but they gave no explanation thereof
whatsoever. It is a fair and reasonable inference that the incident happened because of want of care.

Therefore, respondent’s failure to explain the cause of fire warrants its liability under the principle of res ipsa
loquitur.

28
 TORTS
Res Ipsa Loquitur

THE DOCTRINE OF RES IPSA LOQUITUR APPLIES IN CASES OF DAMAGE TO AN IMMOVABLE AND
STATIONARY OBJECT BY A THING EXCLUSIVELY CONTROLLED BY THE DEFENDANT

21. Republic v. Luzon Stevedoring Corp.

G.R. No. L-21749, September 29, 1967
Reyes, J.B.L., J.

FACTS:
This is a direct appeal from the decision of the Court of First Instance of Manila adjudging the defendant-
appellant, Luzon Stevedoring Corporation, liable for damages to the plaintiff-appellee Republic of the Philippines.

A barge owned by the Luzon Stevedoring Corporation was being towed down the Pasig river by tugboats
"Bangus" and "Barbero"1 also belonging to the same corporation, when the barge rammed against one of the
wooden piles of the Nagtahan bailey bridge, smashing the posts and causing the bridge to list. The river, at the
time, was swollen and the current swift, on account of the heavy downpour of Manila and the surrounding
provinces.

The Republic sued Luzon Stevedoring for actual and consequential damage caused by the latter’s employees.
Luzon Stevedoring Corporation disclaimed liability, on the grounds that it had exercised due diligence in the
selection and supervision of its employees; that the damages to the bridge were caused by force majeure; that
plaintiff has no capacity to sue; and that the Nagtahan bailey bridge is an obstruction to navigation.

ISSUE:
Whether or not Luzon Stevedoring should be held liable for the damage caused by the ramming of its barge to
the supports of Nagtahan Bridge.

HELD:
Yes, Luzon Stevedoring should be held liable.

It is undeniable that the unusual event that the barge, exclusively controlled by appellant, rammed the bridge
supports raises a presumption of negligence on the part of appellant or its employees manning the barge or the
tugs that towed it. For in the ordinary course of events, such a thing does not happen if proper care is used. In
Anglo American Jurisprudence, the inference arises by what is known as the "res ipsa loquitur" rule.

Otherwise stated, the appellant, Luzon Stevedoring Corporation, knowing and appreciating the perils posed by
the swollen stream and its swift current, voluntarily entered into a situation involving obvious danger; it therefore
assured the risk, and cannot shed responsibility merely because the precautions it adopted turned out to be
insufficient. The appellant whose barges and tugs travel up and down the river everyday, could not safely ignore
the danger posed by these allegedly improper constructions that had been erected, and in place, for years.

29
 TORTS
Res Ipsa Loquitur

THE CAPTAIN OF THE SHIP DOCTRINE RENDERS THE DOCTOR LIABLE FOR THE INJURIES BROUGHT
ABOUT BY THE NEGLIGENCE OF HIS ASSISTANTS

22. Cantre v. Spouses Go

G.R. No. 160889, April 27, 2007
Quisumbing, J.

FACTS:
For review on certiorari are the Decision of the Court of Appeals, which affirmed with modification the Decision
of the Regional Trial Court of Quezon City, holding Dr. Cantre liable for damages.

Petitioner was the attending physician of respondent Nora S. Go when the latter gave birth. Nora suffered profuse
bleeding inside her womb due to some parts of the placenta which were not completely expelled from her womb
after delivery. Consequently, Nora suffered hypovolemic shock, resulting in a drop in her blood pressure. While
in the recovery room, her husband noticed a fresh gaping wound in the inner portion of her left arm close to the
armpit. Her injury was referred to a plastic surgeon. Unfortunately, Nora’s arm would never be the same. Aside
from the unsightly mark, the pain in her left arm remains. Her movements now are also restricted. The medico-
legal officer of the NBI testified that Nora’s injury appeared to be a burn and that a droplight when placed near
the skin for about 10 minutes could cause such burn.

Respondent spouses filed a complaint for damages. Petitioner insists the droplight could not have touched Nora’s
body. She maintains the injury was due to the constant taking of Nora’s blood pressure.

ISSUE:
Whether or not Dr. Cantre is liable for the injury suffered by respondent Nora Go?

HELD:
Yes, Dr. Cantre is liable.

Whether the injury was caused by the droplight or by the blood pressure cuff is of no moment. Both instruments
are deemed within the exclusive control of the physician in charge under the "captain of the ship" doctrine. This
doctrine holds the surgeon in charge of an operation liable for the negligence of his assistants during the time
when those assistants are under the surgeon’s control. In this particular case, it can be logically inferred that
petitioner, the senior consultant in charge during the delivery of Nora’s baby, exercised control over the assistants
assigned to both the use of the droplight and the taking of Nora’s blood pressure. Hence, the use of the droplight
and the blood pressure cuff is also within petitioner’s exclusive control.

The gaping wound on Nora’s left arm, by its very nature and considering her condition, could only be caused by
something external to her and outside her control as she was unconscious while in hypovolemic shock. Hence,
Nora could not, by any stretch of the imagination, have contributed to her own injury.

30
 TORTS
Last Clear Chance

THE PERSON WHO HAS THE LAST FAIR CHANCE TO AVOID THE IMPENDING HARM AND FAILS TO DO
SO IS LIABLE, DESPITE ANTECEDENT NEGLIGENCE OF THE PARTY INJURED

23. Picart v. Smith

G.R. No. L-12219, March 15, 1918
Street, J.

FACTS:
This is an appeal from a judgment of the Court of First Instance of the Province of La Union absolving the
defendant from liability.

The plaintiff was riding on his pony over Carlatan Bridge at San Fernando, La Union. Before he had gotten half
way across, the defendant approached from the opposite direction in an automobile, going at the rate of about
ten or twelve miles per hour. As the automobile approached, the defendant guided it toward his left, that being
the proper side of the road for the machine. In so doing the defendant assumed that the horseman would move
to the other side. The pony had not as yet exhibited fright, and the rider had made no sign for the automobile to
stop. Seeing that the pony was apparently quiet, the defendant, instead of veering to the right while yet some
distance away or slowing down, continued to approach directly toward the horse without diminution of speed.

When defendant had gotten quite near, there being then no possibility of the horse getting across to the other
side, the defendant quickly turned his car sufficiently to the right to escape hitting the horse alongside of the
railing where it as then standing; but in so doing the automobile passed in such close proximity to the animal that
it became frightened and turned its body across the bridge with its head toward the railing. In so doing, it struck
on the hock of the left hind leg by the flange of the car and the limb was broken.

Petitioner then filed a complaint to recover damages for the injuries sustained. Respondent avers that it is
petitioner who should bear his own injury because he was on the wrong side of the road.

ISSUE:
Was the defendant negligent in the manner of maneuvering his car?

HELD:
Yes, the defendant was negligent in maneuvering his car.

A prudent man placed in the position of the defendant would have recognized that the course which he was
pursuing was fraught with risk, and would therefore have foreseen harm to the horse and the rider as reasonable
consequence of that course. Under these circumstances the law imposed on the defendant the duty to guard
against the threatened harm.

Both parties were 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. It is
enough to say that the negligence of the defendant was in this case the immediate and determining cause of the
accident and that the antecedent negligence of the plaintiff was a more remote factor in the case.

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 TORTS
Last Clear Chance

THE DOCTRINE OF LAST CLEAR CHANCE ONLY APPLIES TO VEHICULAR ACCIDENTS

24. De Roy v. CA
G.R. No. 80718, January 29, 1988
Cortes, J.

This special civil action for certiorari seeks to nullify two resolutions of the CA. The first resolution denied
petitioners' motion for extension of time to file a motion for reconsideration and directed entry of judgment since
the decision in said case had become final; and the second Resolution denied petitioners' motion for
reconsideration for having been filed out of time.

The firewall of a burned-out building owned by petitioners collapsed and destroyed the tailoring shop occupied
by the family of private respondents, resulting in injuries to private respondents and the death their daughter
Marissa Bernal. Private respondents had been warned by petitioners to vacate their shop in view of its proximity
to the weakened wall but the former failed to do so. The RTC held petitioners guilty of gross negligence. The CA
affirmed the same.

Petitioner argued that the private respondents had the "last clear chance" to avoid the accident if only they
heeded the warning to vacate the tailoring shop and, therefore, petitioners prior negligence should be
disregarded.

ISSUE
Should the petitioner be absolved from liability as the respondent had the last clear chance to avoid the accident
by vacating the tailoring shop?

HELD
No, the petitioner should not be absolved from liability.

The Court found that the Court of Appeals committed no grave abuse of discretion in affirming the trial court's
decision holding petitioner liable under Article 2190 of the Civil Code, which provides that "the proprietor of a
building or structure is responsible for the damage resulting from its total or partial collapse, if it should be due to
the lack of necessary repairs.

Nor was there error in rejecting petitioners argument that private respondents had the "last clear chance" to avoid
the accident if only they heeded the warning to vacate the tailoring shop and, therefore, petitioners prior
negligence should be disregarded, since the doctrine of "last clear chance," which has been applied to vehicular
accidents, is inapplicable to this case.

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 TORTS
Last Clear Chance

THE DOCTRINE OF LAST CLEAR CHANCE DOES NOT APPLY TO CONTRACTUAL NEGLIGENCE

25. The Consolidated Bank & Trust Corp. vs. CA

G.R. No. 138569, September 11, 2003.
Carpio, J.

FACTS:
This is a petition for review of the Decision of the Court of Appeals which reversed the Decision of the RTC of
Manila, absolving petitioner Solidbank Corporation from any liability.

Sometime in March 1976, L.C. Diaz opened a savings account with Solidbank. LC Diaz’s cashier instructed the
messenger of L.C. Diaz, Ismael Calapre to deposit the money with Solidbank who had in its possession its
passbook and two deposit slips. The teller acknowledged receipt of the deposit by returning to the messenger
the duplicate copies of the two deposit slips. Since the transaction took time and the messenger had to make
another deposit for L.C. Diaz with Allied Bank, he left the passbook with Solidbank. When he returned to
Solidbank to retrieve the passbook, the teller informed him that somebody got the passbook. The messenger
went back to L.C. Diaz and reported the incident to its cashier. It was subsequently found that a stranger was
able to withdraw P300,000.

This led L.C. Diaz to file a Complaint for Recovery of a Sum of Money against Solidbank.

The trial court ruled that L.C. Diaz’s negligence in not securing its passbook under lock and key was the proximate
cause that allowed the impostor to withdraw the P300,000. The CA ruled that while L.C. Diaz was also negligent
in entrusting its deposits to its messenger and its messenger in leaving the passbook with the teller, Solidbank
could not escape liability because of the doctrine of "last clear chance." Solidbank could have averted the injury
suffered by L.C. Diaz had it called up L.C. Diaz to verify the withdrawal.

ISSUE:
Was the CA correct in ruling against Solidbank on the basis of the Doctrine of Last Clear Chance?

HELD:

No, the CA was not correct as the doctrine does not apply to this case.

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.

The doctrine is inapplicable to this case.. Solidbank is liable for breach of contract due to negligence in the
performance of its contractual obligation to L.C. Diaz. This is a case of culpa contractual, where neither the
contributory negligence of the plaintiff nor his last clear chance to avoid the loss, would exonerate the defendant
from liability. Such contributory negligence or last clear chance by the plaintiff merely serves to reduce the
recovery of damages by the plaintiff but does not exculpate the defendant from his breach of contract.

33
 TORTS
Last Clear Chance

THE NATURE OF HE NEGLIGENT ACT OR OMISSION AND THE CHARACTER AND GRAVITY OF THE
RISKS ARE THE PRINCIPAL CONSIDERATIONS IN APPLYING THE DOCTRINE OF LAST CLEAR CHANCE

26. Phoenix Construction, Inc. v. Intermediate Appellate Court

G.R. No. L-65295, March 10, 1987
Feliciano, J.

FACTS:
At about 1:30 AM, Leonardo Dionisio was on his way home from a cocktails-and-dinner meeting with his boss.
During the cocktails phase of the evening, Dionisio had taken "a shot or two" of liquor. Dionisio was driving his
car when his car headlights allegedly suddenly failed. The dump truck, owned by and registered in the name of
petitioner, was parked on the right hand side of the street, facing the oncoming traffic. The dump truck had earlier
that evening been driven home by petitioner Armando Carbonel, its regular driver, with the permission of his
employer Phoenix, in view of work scheduled to be carried out early the following morning, Dionisio claimed that
he tried to avoid a collision by swerving his car to the left but it was too late and his car smashed into the dump
truck. As a result of the collision, Dionisio suffered some physical injuries.

Dionisio commenced an action for damages claiming that the legal and proximate cause of his injuries was the
negligent manner in which Carbonel had parked the dump truck entrusted to him by his employer Phoenix. The
theory here of petitioners is that while the petitioner truck driver was negligent, private respondent Dionisio had
the "last clear chance" of avoiding the accident and hence his injuries, and that Dionisio having failed to take that
"last clear chance" must bear his own injuries alone.

ISSUE:
Is the Doctrine of Last Clear Chance applicable so as to exculpate Phoenix and Carbonel from liability?

HELD:

No, the Doctrine of Last Clear Chance cannot serve to exculpate Phoenix and Carbonel.

The relative location in the continuum of time of the plaintiff's and the defendant's negligent acts or omissions, is
only one of the relevant factors that may be taken into account. Of more fundamental importance are the nature
of the negligent act or omission of each party and the character and gravity of the risks created by such act or
omission for the rest of the community.

The petitioners urge that the truck driver (and therefore his employer) should be absolved from responsibility for
his own prior negligence because the unfortunate plaintiff failed to act with that increased diligence which had
become necessary to avoid the peril precisely created by the truck driver's own wrongful act or omission. To
accept this proposition is to come too close to wiping out the fundamental principle of law that a man must
respond for the forseeable consequences of his own negligent act or omission. Our law on quasi-delicts seeks
to reduce the risks and burdens of living in society and to allocate them among the members of society. To accept
the petitioners' pro-position must tend to weaken the very bonds of society.

34
 TORTS
Other Topics

DAMAGES ARE RECOVERABLE BY DEFRAUDED CREDITORS

27. People’s Bank & Trust Co. v. Dahican Lumber Co.

G.R. No. L-17500, May 16, 1967
Dizon, J.

FACTS:
Atlantic Gulf & Pacific Company of Manila sold and assigned all its rights in the Dahican Lumber concession to
Dahican Lumber Company (DALCO). Thereafter, to develop the concession, DALCO obtained various loans
from the Petitioner. In addition, DALCO obtained loans from the petitioner. As security for the payment of the
loans, DALCO executed in favor of the a deed of mortgage covering five parcels of land together with all the
buildings and other improvements existing thereon. DALCO executed a second mortgage on the same properties
in favor of ATLANTIC to secure payment of the unpaid balance of the sale price of the lumber concession. These
deeds extended to subsequently-acquired properties of the mortgagor (“after acquired properties”).

Upon DALCO's and DAMCO's failure to pay the fifth promissory note upon its maturity, the petitioner paid the
same to the Export-Import Bank of Washington D.C., and the latter assigned to the former its credit and the first
mortgage securing it.

Thereafter, DALCO purchased various machineries, equipment, spare parts and supplies in addition to, or in
replacement of some of those already owned and used by it. These said after-acquired properties were sold to
CONNWELL and DAMCO. Thereafter, the Board of Directors of DALCO, in a special meeting called for the
purpose, passed a resolution agreeing to rescind the alleged sales of equipment, spare parts and supplies by
CONNELL and DAMCO to it.

This led petitioner to commence foreclosure proceedings. It argued that damages should have been awarded to
plaintiffs against defendants, all of them being guilty of an attempt to defraud the former when they sought to
rescind the sales already mentioned for the purpose of defeating their mortgage lien.

ISSUE:
Are respondents liable for damages after having sold the after-acquired properties to persons other than its
creditors?

HELD:
Yes, they are liable for damages for such sale.

On the question of plaintiffs' right to recover damages from the defendants, Articles 1313 and 1314 of the New
Civil Code provides that creditors are protected in cases of contracts intended to defraud them; and that any third
person who induces another to violate his contract shall be liable for damages to the other contracting party.
Similar liability is demandable under Arts. 20 and 21 — which may be given retroactive effect (Arts. 2252) or
under Articles. 1902 and 2176 of the Old Civil Code.

The facts of this case clearly show that DALCO and DAMCO, after failing to pay the fifth promissory note upon
its maturity, conspired jointly with CONNELL to violate the provisions of the fourth paragraph of the mortgages
under foreclosure by attempting to defeat plaintiffs' mortgage lien on the "after acquired properties". As a result,
the plaintiffs had to go to court to protect their rights thus jeopardized. Defendants' liability for damages is
therefore clear.

35
 TORTS
Other Topics

CULPA CRIMINAL AND CULPA AQUILIANA ARE DISTINCT BASES FOR LIABILITY

28. Barredo vs. Garcia

G.R. No. L-48006, July 8, 1942
Bocobo, J.

FACTS:
This is an appeal from the decision of the CA which held the petitioner Fausto Barredo liable in damages for the
death of Faustino Garcia caused by the negligence of Pedro Fontanilla, his employee.

At about half past one in the morning, there was a head-on collision between a taxicab driven by Pedro Fontanilla
and a carretela guided by Pedro Dimapalis. The carretela was overturned, and one of its passengers, 16-year-
old boy Faustino Garcia, suffered injuries from which he died two days later. A criminal action was filed against
Fontanilla and he was convicted. The court in the criminal case granted the petition that the right to bring a
separate civil action be reserved. The parents of the deceased brought an action against Fausto Barredo as the
sole proprietor of the Malate Taxicab and employer of Pedro Fontanilla.

The main theory of the defense is that the liability of Fausto Barredo is governed by the Revised Penal Code;
hence, his liability is only subsidiary, and as there has been no civil action against Pedro Fontanilla, the person
criminally liable, Barredo cannot be held responsible in the case.

ISSUE:
Can the plaintiffs bring this separate civil action against Fausto Barredo, thus making him primarily and directly,
responsible under article 1903 of the Civil Code as an employer of Pedro Fontanilla?

HELD:
Yes, plaintiffs may bring the separate civil action against Barredo and in effect make him primarily liable.

Authorities support the proposition that a quasi-delict or "culpa aquiliana " is a separate legal institution under the
Civil Code with a substantivity all its own, and individuality that is entirely apart and independent from delict or
crime. Upon this principle and on the wording and spirit article 1903 of the Civil Code, the primary and direct
responsibility of employers may be safely anchored.

To hold that there is only one way to make defendant's liability effective, and that is, to sue the driver and exhaust
his (the latter's) property first, would be tantamount to compelling the plaintiff to follow a devious and cumbersome
method of obtaining relief. True, there is such a remedy under our laws, but there is also a more expeditious way,
which is based on the primary and direct responsibility of the defendant under article 1903 of the Civil Code. Our
view of the law is more likely to facilitate remedy for civil wrongs, because the procedure indicated by the
defendant is wasteful and productive of delay, it being a matter of common knowledge that professional drivers
of taxis and similar public conveyance usually do not have sufficient means with which to pay damages. In
construing the laws, courts have endeavored to shorten and facilitate the pathways of right and justice.

At this juncture, it should be said that the primary and direct responsibility of employers and their presumed
negligence are principles calculated to protect society.

36
 TORTS
Other Topics

THE EMPLOYER’S SUBSIDIARY LIABILITY MAY BE ENFORCED IN THE SAME CRIMINAL CASE

29. Pajarito v. Señeris

G.R. No. L-44627
December 14, 1978
ANTONIO, J.:

FACTS
This is a petition for review which seeks to annul the Order of the Court of First Instance denying petitioner’s
motion for reconsideration of the Order denying the petitioner’s motion for the issuance of subsidiary writ of
execution.

Private respondent Joselito Aizon was charged before the Court of First Instance with Double Homicide through
Reckless Imprudence. After the judgment of conviction had become final and executory, a Writ of Execution was
issued against Aizon, but the same was returned unsatisfied because of his insolvency. Whereupon petitioner,
filed with the trial court a motion for the issuance of Subsidiary Writ of Execution and served a copy thereof to
private respondent Felipe Aizon, employer of Joselito.

Petitioner contends that the enforcement of subsidiary liability under Article 103 of the Revised Penal Code may
be filled under the same criminal case, under which the subsidiary liability was granted. On the other hand,
respondents maintain that to enforce the subsidiary liability under Article 103 of the Revised Penal Code, a
separate civil action must be filed against the employer.

ISSUE
May the subsidiary civil liability established in Articles 102 and 103 of the Revised Penal Code be enforced in the
same criminal case where the award was made, or in a separate civil action?

HELD
Yes, it may be enforced in the same criminal case where the award was made, and not in a separate civil action.

Pursuant to Article 103, in relation to Article 102, of the Revised Penal Code, an employer may be subsidiary
liable for the employee's civil liability in a criminal action when: (1) the employer is engaged in any kind of industry;
(2) the employee committed the offense in the discharge of his duties; and (3) he is insolvent and has not satisfied
his civil liability. The subsidiary civil liability of the employer, however, arises only after conviction of the employee
in the criminal case.

This Court further amplified the rule that the decision convicting the employee is binding and conclusive upon the
employer, "not only with regard to (the latter's) civil liability but also with regard to its amount because the liability
of an employer cannot be separated but follows that of his employee. That is why the law says that his liability is
subsidiary (Article 103, Revised Penal Code). To allow an employer to dispute the civil liability fixed in the criminal
case would be to amend, nullify, or defeat a final judgment rendered by a competent court.

It is true that an employer, strictly speaking, is not a party to the criminal case instituted against his employee,
but in substance and in effect he is considering the subsidiary liability imposed upon him by law. It is his concern,
as well as of his employee, to see to it that his interest be protected in the criminal case by taking virtual
participation in the defense of his employee.

37
 TORTS
Other Topics

CIVIL LIABILITIES ARISING FROM RECKLESS IMPRUDENCE UNDE THE REVISED PENAL CODE MAY
BE AWARDED, SUBJECT TO THE RULE AGAINST DOUBLE RECOVERY

30. Manalo v. Robles Transportation Company, Inc.

G.R. No. L-8171,
August 16, 1956
MONTEMAYOR, J.:

FACTS
Respondent is appealing from the decision of the Court of First Instance of Rizal which held him subsidiarily liable
for the fault of his employee.

A taxicab owned and operated by defendant appellant Company and driven by its employee Edgardo Hernandez
collided with a passenger truck at Parañaque, Rizal. In the course of and a result of the accident, the taxicab ran
over Armando Manalo, an eleven year old, causing him physical injuries which resulted in his death several days
later. Edgardo Hernandez was prosecuted for homicide through reckless imprudence and after trial was found
guilty of the charge and sentenced to prision correccional. Two writs of execution were issued against him to
satisfy the amount of the indemnity.

The appellant contends that Article 102 and 103 of the Revised Penal Code were repealed by the New Civil
Code, promulgated in 1950, particularly, by the repealing clause under which comes Article 2270 of the said
code.

ISSUE
Did Article 2270 of the Civil Code repeal Articles 102 and 103 of the Revised Penal Code?

HELD
No, the Civil Code did not repeal Articles 102 and 103 of the Revised Penal Code.

Article 2177 of the New Civil Code expressly recognizes civil liabilities arising from negligence under the Penal
Code, only that it provides that plaintiff cannot recover damages twice for the same act of omission of the
defendant.

38
 TORTS
Other Topics

THE EMERGENCY RULE ABSOLVES THE DEFENDANT FROM LIABILITY DUE TO HIS NEGLIGENCE

31. Gan v. Court of Appeals

G.R. No. L-44264
September 19, 1988
FERNAN, J.:

FACTS
This is a petition for review on certiorari which seeks to annul the decision of the Court of Appeals affirming the
Decision of the Court of First Instance of Manila convicting the accused of Homicide thru Reckless Imprudence.
In the morning of July 4, 1972 at about 8:00 o'clock, the accused Hedy Gan was driving a Toyota car along North
Bay Boulevard, Tondo, Manila. As the car driven by the accused approached the place where two vehicles were
parked, a vehicle suddenly came from the opposite direction, followed by another which tried to overtake and
bypass the one in front of it and thereby encroached the lane of the car driven by the accused. To avoid a head-
on collision with the oncoming vehicle, the defendant swerved to the right and as a consequence, the front
bumper of the car hit an old man who was about to cross the boulevard, pinning him against the rear end of a
parked jeepney. The force of the impact caused the parked jeepney to move forward hitting the rear of the parts
truck ahead of it. The pedestrian was injured, the Toyota Sedan was damaged on its front, the jeep suffered
damages on its rear and front paints, and the truck sustained scratches at the wooden portion of its rear.

ISSUE
Should the petitioner have stepped on the brakes immediately, or in swerving her vehicle to the right should she
have also stepped on the brakes or lessened her speed, to avoid the death of a pedestrian?

HELD
No, such course of action was not reasonable. The test for determining whether or not a person is negligent in
doing an act whereby injury or damage results to the person or property of another is this: Would a prudent man
in the position of the person to whom negligence is attributed foresee harm to the person injured as a reasonable
consequence of the course about to be pursued? If so, the law imposes the duty oil the doer to take precaution
against its mischievous results and the failure to do so constitutes negligence.

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

The course of action suggested by the appellate court would seem reasonable were it not for the fact that such
suggestion did not take into account the amount of time afforded petitioner to react to the situation she was in.
For it is undeniable that the suggested course of action presupposes sufficient time for appellant to analyze the
situation confronting her. Also, the respondent court itself pronounced that the petitioner was driving her car
within the legal limits. Hence, the "emergency rule" enunciated above applies with full force to the case at bar
and consequently absolve petitioner from any criminal negligence in connection with the incident under
consideration.

39
 PROXIMATE CAUSE
Proximate Cause

IF THE NEGLIGENCE OF THE PLAINTIFF IS NOT OF INDEPENDENT AND OVERPOWERING NATURE AS

TO CUT, AS IT WERE, THE CHAIN OF CAUSATION IN FACT BETWEEN THE NEGLIGENCE OF THE
DEFENDANT AND THE ACCIDENT, THE SAME IS NOT AN EFFICIENT INTERVENING CAUSE

32. Phoenix Construction v. IAC

GR No. 65295, March 10, 1987
Feliciano, J.:

FACTS:
This is a petition for review of the decision of the IAC which affirmed the decision of the trial court rendered in
favor of private respondent Leonardo Dionisio (Dionisio) finding Phoenix Construction Inc. (Phoenix), and
Armando U. Carbonel (Carbonel) negligent.

Dionisio was on his way home from a cocktails-and-dinner meeting with his boss where he had taken "a shot or
two" of liquor. Dionisio was driving his Volkswagen car, when his car headlights (in his allegation) suddenly failed.
The dump truck, owned by and registered in the name of petitioner Phoenix, was parked on the right-hand side
of the street, facing the oncoming traffic and was parked askew in such a manner as to stick out onto the street,
partly blocking the way of oncoming traffic. There were no lights nor any so-called "early warning" reflector
devices set anywhere near the dump truck. The dump truck had been driven home by Carbonel, its regular driver.
Dionisio claimed that he tried to avoid a collision by swerving his car to the left but it was too late and his car
smashed into the dump truck. As a result of the collision, Dionisio suffered some physical injuries including some
permanent facial scars, a "nervous breakdown" and loss of two gold bridge dentures.

Dionisio commenced an action for damages claiming that the legal and proximate cause of his injuries was the
negligent manner in the dump truck was parked. Phoenix and Carbonel, on the other hand, countered that the
proximate cause of Dionisio's injuries was his own recklessness in driving fast at the time of the accident, while
under the influence of liquor, without his headlights on and without a curfew pass. As stated, the trial court and
IAC ruled in favor of Dionisio.

ISSUE:
If the accident is caused by unreasonable risk due to the negligence of the defendant, is the contributory
negligence of plaintiff an efficient intervening cause?

HELD:
No. While ruling that Dionisio is guilty of contributory negligence, the Court stated that there was a reasonable
relationship between petitioner Carbonel's negligence on the one hand and the accident and respondent's injuries
on the other hand. The truck driver's negligence far from being a "passive and static condition" was rather an
indispensable and efficient cause.

If the intervening cause is one which in ordinary human experience is reasonably to be anticipated, or one which
the defendant has reason to anticipate under the particular circumstances, the defendant may be negligent,
among other reasons, because of failure to guard against it; or the defendant may be negligent only for that
reason.

In this case, the improper parking of the dump truck created an unreasonable risk of injury for anyone driving
down General Lacuna Street and for having so created this risk, the truck driver must be held responsible.
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 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.

40
Therefore, the defendant cannot be relieved from liability by the fact that the risk or a substantial and important
part of the risk, to which the defendant has subjected the plaintiff has indeed come to pass. Foreseeable
intervening forces are within the scope of the original risk, and hence of the defendant's negligence.

41
 NEGLIGENCE
Negligence

DOCTRINE OF LAST CLEAR CHANCE BARS REFERENCE TO PRIOR NEGLIGENCE OF PLAINTIFF

33. Amado Picart v. Frank Smith, Jr.

G.R. No. L-12219, March 15, 1918
Street, J.

FACTS:
From the CFI judgment absolving Frank Smith, Jr. (defendant) from liability, Amado Picart (plaintiff) appeals.

Plaintiff was riding on his pony over Carlatan Bridge, at San Fernando, La Union. Before he had gotten halfway
across, the defendant approached from the opposite direction in an automobile, going at the rate of about 10 or
12 miles per hour. As the defendant neared the bridge he saw a horseman on it and blew his horn to give warning
of his approach. He continued his course and after he had taken the bridge he gave two more successive blasts,
as it appeared to him that the man on horseback before him was not observing the rule of the road.

The plaintiff saw the car coming and heard the warning signals. However, being flustered by the rapidity of the
approach, he pulled the pony closely up against the railing on the right side of the bridge instead of going to the
left. He says that the reason he did this was that he thought he did not have sufficient time to get over to the
other side. As the car approached, the defendant guided it toward his left, being the proper side of the road for
the machine. The defendant assumed that the horseman would move to the other side. The pony had not as yet
exhibited fright, and the rider had made no sign for the automobile to stop. However, when he had gotten quite
near, the defendant quickly turned his car sufficiently to the right to escape hitting the horse, but in so doing the
car passed in such close proximity to the animal that it became frightened and turned its body across the bridge
with its head toward the railing. The horse fell and its rider was thrown off with some violence. As a result of its
injuries the horse died. On the other hand, the plaintiff received contusions which caused temporary
unconsciousness and required medical attention for several days.

ISSUE:
Is the defendant in maneuvering his car in the manner above described guilty of negligence such as gives rise
to a civil obligation to repair the damage done?

HELD:
Yes, the defendant is negligent in maneuvering his car.

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 speculations 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. 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 conduct or guarding against its consequences.

Applying this test defendant’s conduct, negligence is clearly established. A prudent man, placed in the position
of the defendant, would have recognized that the course which he was pursuing was fraught with risk, and would
therefore have foreseen harm to the horse and the rider as reasonable consequence of that course. Under these
circumstances the law imposed on the defendant the duty to guard against the threatened harm.

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. 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. It is enough to say that the negligence of the defendant was in this case the
immediate and determining cause of the accident and that the antecedent negligence of the plaintiff was a more
remote factor in the case.

42
 NEGLIGENCE
Negligence

FINDING OF CONTRIBUTORY NEGLIGENCE REQUIRES DETERMINATION OF CERTAIN FACTORS

34. Jose Cangco v. Manila Railroad Co.

G.R. No. L-12191, October 14, 1918
Fisher, J.

FACTS:
Plaintiff, Jose Cangco, was in the employment of Manila Railroad Company in the capacity of clerk. He lived in
the pueblo of San Mateo, in the province of Rizal, which is located upon the line of the defendant railroad
company; and in coming daily by train to the company's office in the city of Manila where he worked.

On the side of the train where passengers alight at the San Mateo station there is a cement platform. As the train
slowed down, a passenger, got off the same car, alighting safely at the point where the platform begins to rise
from the level of the ground. When the train had proceeded a little farther, Cangco stepped off also, but one or
both of his feet came in contact with a sack of watermelons with the result that his feet slipped from under him
and he fell violently on the platform. His body at once rolled from the platform and was drawn under the moving
car, where his right arm was badly crushed and lacerated. The plaintiff’s right arm was amputated.

Plaintiff then instituted in CFI an action to recover damages, founding his action upon the negligence of the
servants and employees of the defendant in placing the sacks of melons upon the platform and leaving them so
placed as to be a menace to the security of passenger alighting from the company's trains.The CFI ruled that,
although negligence was attributable to the defendant by reason of the fact that the sacks of melons were so
placed as to obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself had failed to
use due caution in alighting from the coach and was therefore precluded form recovering.

ISSUE:
Is the act of a passenger in failing to wait until the train had come to a complete stop before alighting considered
contributory negligence?

HELD:
No. It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular
injury suffered by him could not have occurred. Defendant contends that it is negligence per se for a passenger
to alight from a moving train. We are not disposed to subscribe to this doctrine in its absolute form.

In determining the question of contributory negligence in performing such act — that is to say, whether the
passenger acted prudently or recklessly — the age, sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the passenger and should be considered.

In this case, that the train was barely moving when plaintiff alighted is shown conclusively by the fact that it came
to stop within six meters from the place where he stepped from it. Thousands of person alight from trains under
these conditions every day of the year, and sustain no injury where the company has kept its platform free from
dangerous obstructions. There is no reason to believe that plaintiff would have suffered any injury whatever in
alighting as he did had it not been for defendant's negligent failure to perform its duty to provide a safe alighting
place. The test by which to determine whether the passenger has been guilty of negligence in attempting to alight
from a moving railway train, is that of ordinary or reasonable care. This care has been defined to be, not the care
which may or should be used by the prudent man generally, but the care which a man of ordinary prudence would
use under similar circumstances, to avoid injury.

It may be noted that the place was perfectly familiar to the plaintiff as it was his daily custom to get on and off the
train at this station. There could, therefore, be no uncertainty in his mind with regard either to the length of the
step which he was required to take or the character of the platform where he was alighting. Our conclusion is
that the conduct of the plaintiff in undertaking to alight while the train was yet slightly under way was not
characterized by imprudence and that therefore he was not guilty of contributory negligence.

43
 NEGLIGENCE
Negligence

CIVIL LIABILITY ARISING FROM QUASI-DELICT NOT DEPENDENT ON FINDING OF NEGLIGENCE IN

THE CRIMINAL CASE

35. Mauricio Manliclic and Philippine Rabbit Bus Lines, Inc. v. Modesto Calaunan
G.R. No. 150157, January 25, 2007
Chico-Nazario, J.

FACTS:
Assailed is the decision of the CA which affirmed in toto the decision of the RTC, finding petitioners Mauricio
Manliclic and Philippine Rabbit Bus Lines, Inc. (PRBLI) solidarily liable to pay damages and attorney’s fees to
respondent Modesto Calaunan.

Calaunan was on his way to Manila from Pangasinan on board his owner-type jeep. The Philippine Rabbit Bus,
driven by Manliclic, was likewise bound for Manila from Concepcion, Tarlac. The two vehicles collided. By reason
of such collision, a criminal case was filed charging petitioner Manliclic with Reckless Imprudence Resulting in
Damage to Property with Physical Injuries. Subsequently, respondent filed a complaint for damages against
petitioners Manliclic and PRBLI. The criminal case was tried ahead of the civil case.

In the criminal case, the court absolved Manliclic ruling that the swerving of Calaunan’s jeep when it tried to
overtake the vehicle in front of it was beyond the control of the former. Absent evidence of negligence, therefore,
Maniliclic cannot be held liable for Reckless Imprudence Resulting in Damage to Property with Physical Injuries
as defined in Article 365 of the RPC. Subsequently, the civil case was decided in favor of Calaunan. Hence, this
appeal anchored on the fact that petitioner Manliclic was acquitted by the CA of the charge of Reckless
Imprudence Resulting in Damage to Property with Physical Injuries.

ISSUE:
Can a person still be held liable for the collision and be found negligent notwithstanding the declaration of the CA
that there was an absence of negligence on his part?

HELD:
Yes, a person can still be held liable notwithstanding the declaration that there was an absence of negligence on
his part.

A quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code with a substantivity all its own,
and individuality that is entirely apart and independent from a delict or crime – a distinction exists between the
civil liability arising from a crime and the responsibility for quasi-delicts or culpa extra-contractual. The same
negligence causing damages may produce civil liability arising from a crime under the Penal Code, or create an
action for quasi-delicts or culpa extra-contractual under the Civil Code. It is now settled that acquittal of the
accused, even if based on a finding that he is not guilty, does not carry with it the extinction of the civil liability
based on quasi delict.

In other words, if an accused is acquitted based on reasonable doubt on his guilt, his civil liability arising from the
crime may be proved by preponderance of evidence only. However, if an accused is acquitted on the basis that
he was not the author of the act or omission complained of, said acquittal closes the door to civil liability based
on the crime or ex delicto. In this second instance, there being no crime or delict to speak of, civil liability based
thereon, or ex delicto is not possible. In this case, a civil action, if any, may be instituted on grounds other than
the delict complained of.

In the present case, Manliclic was acquitted not on reasonable doubt, but on the ground that he is not the author
of the act complained of. The provision applies only to a civil action arising from crime or ex delicto and not to a
civil action arising from quasi-delict or culpa aquiliana. Hence, Manaliclic can still be held liable for the collision
despite his acquittal before the CA.

44
 NEGLIGENCE
Negligence

CONTRIBUTORY NEGLIGENCE DOES NOT OPERATE AS A BAR TO RECOVERY BUT IT ONLY

REDUCES CLAIM FOR DAMAGES

36. M. H. Rakes v. The Atlantic, Gulf and Pacific Company

G.R. No. 1719, January 23, 1907
Tracey, J.

FACTS:
This is an action for damages filed by M.H. Rakes (plaintiff) against The Atlantic, Gulf and Pacific Company
(defendant).

The plaintiff is composed of eight laborers in the employment of the defendant company. They were
transporting iron rails from a harbor to the company yard by hand car. Some laborers would push the hand car
while some would assist by pulling the hand car by a rope. The plaintiff was walking alongside the hand car. At
a certain spot at or near the water's edge, the track which guided the hand car had sagged, the tie broke, the
car either canted or upset, the rails slid off and caught the plaintiff, breaking his leg, which was afterwards
amputated at about the knee.

The plaintiff sought for damages against the defendant alleging that the accident happened through the
negligence of the defendant.
The courts found the defendant liable. It ruled that implied by the relation between the parties, the employer is
bound to provide safe appliances for the use of the employee, and that it was the duty of the defendant to build
and to maintain its track in reasonably sound condition, so as to protect its workingmen from unnecessary
danger; that defendant failed in its duty, otherwise the accident could not have occurred and, consequently, the
negligence of the defendant is established.

The most controverted question in the case was whether the plaintiff committed contributed negligence on the
grounds that (1) he noticed the depression in the track he continued his work, and (2) he walked on the ends of
the ties at the side of the car instead of along the boards, either before or behind it.

ISSUE:
Is plaintiff guilty of contributory negligence based on his alleged act of walking on the ends of the ties at the
side of the car?

HELD:
Yes, the plaintiff is guilty of contributory negligence.

Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered immediate
causes of the accident. The test is simple. Distinction must be between the accident and the injury, between
the event itself, without which there could have been no accident, and those acts of the victim not entering into
it, independent of it, but contributing under review was the displacement of the crosspiece or the failure to
replace it. This produced the event giving occasion for damages. Where he contributes to the principal
occurrence, as one of its determining factors, he cannot recover. Where, in conjunction with the occurrence, he
contributes only to his own injury, he may recover the amount that the defendant responsible for the event
should pay for such injury, less a sum deemed a suitable equivalent for his own imprudence.

In this case, the shinking of the track and the sliding of the iron rails produce the event which gave occasion for
damages. To this event, the act of the plaintiff in walking by the side of the car did not contribute, although it
was an element of the damage which came to himself. Had the crosspiece been out of place wholly or partly
thorough his act of omission of duty, the last would have been one of the determining causes of the event or
accident, for which he would have been responsible. The Court ruled in favor of the plaintiff, but deducted from
the award the amount fairly attributable to the plaintiff’s negligence.

45
 NEGLIGENCE
Negligence

TEST OF IMPUTED NEGLIGENCE UNDER ARTICLE 2184 OF THE CIVIL CODE IS NECESSARILY
SUBJECTIVE

37. Caedo v. Yu Khe Thai and Bernardo

G.R. No. L-20392, December 18, 1968
Makalintal, J.

FACTS:
The case is one certified to the SC from the CA which involved an appeal for the judgment of the CFI of Rizal to
include an additional award of damages in favor of the plaintiffs. The case stemmed from a vehicular accident
in which Marcial Caedo (plaintiff) and the members of his family involved.

The accident occurred along Highway 54 with plaintiff and his family on their way to the airport where his son
was scheduled to take a plane to Mindoro. Coming from the opposite direction was the Cadillac of Yu Khe Thai
(defendant), driven by his driver Bernardo, and both were moving at fairly moderate speeds with the absence of
traffic. Their headlights were mutually noticeable from a distance. Ahead of the Cadillac, going in the same
direction, was a caretella owned by a certain Bautista. The carretela was towing another horse by means of a
short rope coiled around the rig's vertical post on the right side and held at the other end by Pedro's son. The
defendant’s driver did not see the carretela until it was only eight meters away. Bernardo, instead of slowing
down or stopping altogether behind the carretela until that lane was clear, veered to the left in order to pass. As
he did so the curved end of his car's right rear bumper caught the forward rim of the rig's left wheel, wrenching
it off and carrying it along as the car skidded obliquely to the other lane, where it collided with the oncoming
vehicle.

Plaintiff and his family were injured. They then filed a suit for recovery of damages from defendants The CFI
ruled in favor of the plaintiffs and held Yu Khe Thai and his driver jointly and severally liable to the plaintiffs for
damages.

ISSUE:
Should the defendant be held solidarily liable with his negligent driver for the payment of damages?

HELD:
No, defendant should not be held solidarily liable with his driver.

Under the Article 2184 of the Civil code, if the causative factor was the driver's negligence, the owner of the
vehicle who was present is likewise held liable if he could have prevented the mishap by the exercise of due
diligence. The basis of the master's liability in civil law is not respondent superior but rather the relationship of
pater familias. The theory is that ultimately the negligence of the servant, if known to the master and
susceptible of timely correction by him, reflects his own negligence if he fails to correct it in order to prevent
injury or damage. The test of his negligence, within the meaning of Article 2184, is his omission to do that
which the evidence of his own senses tells him he should do in order to avoid the accident. And as far as
perception is concerned, absent a minimum level imposed by law, a maneuver that appears to be fraught with
danger to one passenger may appear to be entirely safe and commonplace to another.

In the present case, the car was not running at an unreasonable speed. The road was wide and open, and
devoid of traffic that early morning. There was no reason for the car owner to be in any special state of alert. He
had reason to rely on the skill and experience of his driver. He became aware of the presence of the carretela
when his car was only twelve meters behind it, but then his failure to see it earlier did not constitute negligence,
for he was not himself at the wheel. And even when he did see it, he could not have anticipated his driver's
sudden decision to pass the carretela on its left side although another car was approaching from the opposite
direction. The time element was such that there was no reasonable opportunity for defendant to assess the
risks involved and warn the driver accordingly. The thought that entered his mind, he said, was that if he
sounded a sudden warning it might only make the other man nervous and make the situation worse. It was a
thought that, wise or not, connotes no absence of that due diligence required by law to prevent the misfortune.
Hence, defendant should not be held solidarily liable with his driver.

46
 NEGLIGENCE
Negligence

POSSESSORS OF ANIMALS ARE LIABLE FOR THE DAMAGE WHICH SUCH ANIMAL MAY CAUSE,
EVEN IF SUCH ANIMAL SHOULD ESCAPE OR BE LOST

38. Purita Vestil and Agustin Vestil v. Intermediate Appellate Court, David Uy and Teresita Uy
G.R. No. 74431, November 6, 1989
Cruz, J.

FACTS:
This is a petition seeking to set aside the decision of the IAC declaring petitioners liable for the Death of Theness
Tan Uy (Theness) who died because she was bitten by a dog.

Theness was bitten by a dog while she was playing with a child of the petitioners in the house of the late Vicente
Miranda, the father of Purita. She was rushed to the Cebu General Hospital, where she was treated. She was
discharged after nine days but was readmitted one week later due to "vomiting of saliva." The following day the
child died. The cause of death was certified as broncho-pneumonia.

Seven months later, the private respondents sued for damages, alleging that the Vestils were liable to them as
the possessors of "Andoy," the dog that bit and eventually killed their daughter. The Vestils denied the charge,
insisting that the dog belonged to his deceased father, that the dog was a tame animal, and that in any case no
one had witnessed it bite Theness. IAC rendered a decision finding Vestils liable. Purita Vestil insists that she is
not the owner of the house or of the dog left by her father as his estate has not yet been partitioned and there
are other heirs to the property. Petitioners also argue that even assuming they were the possessors of the dog
there was no clear showing that she died as a result thereof.

ISSUE:
Is ownership of the animal material in determining liability for the injuries caused by an animal?

HELD:
No, the ownership of the animal is not material in determining liability for the injuries caused by an animal.

Article 2183 of the Civil Code holds the possessor liable even if the animal should "escape or be lost" and so be
removed from his control. And it does not matter either that as the petitioners also contend, the dog was tame
and was merely provoked by the child into biting her. The law does not speak only of vicious animals but covers
even tame ones as long as they cause injury. The obligation imposed by Article 2183 of the Civil Code is not
based on the negligence or on the presumed lack of vigilance of the possessor or user of the animal causing the
damage. It is based on natural equity and on the principle of social interest that he who possesses animals for
his utility, pleasure or service must answer for the damage which such animal may cause.

In the present case, while it is true that she is not really the owner of the house, there is no doubt that she and
her husband were its possessors at the time of the incident in question. The petitioner's contention that they
could not be expected to exercise remote control of the dog is not acceptable. As for the alleged provocation, the
petitioners forget that Theness was only three years old at the time she was attacked and can hardly be faulted
for whatever she might have done to the animal. Hence, petitioners, as possessors of the dog, are liable for the
death of Theness.

47
 NEGLIGENCE
Negligence

CONTROL OR SUPERVISION OF THE CITY OVER STREET OR ROAD IS NECESSARY TO HOLD IT

LIABLE FOR DEFECTS

39. City of Manila v. Teotico and CA

G.R. No. L-23052, January 29, 1968
Concepcion, C.J.

FACTS:
This is an Appeal by Certiorari from the decision of the CA absolving defendants from liability except the City of
Manila for the injuries suffered by Genaro Teotico (respondent).

Respondent fell inside an uncovered and unlighted catch basin or manhole on P. Burgos Avenue as he
was stepping down from the curb to board a jeepney. Due to the fall, he suffered injuries to his eyes, head and
other parts of his body. He was brought to the Philippine General Hospital. These injuries and the allergic
eruptions caused by anti-tetanus injections administered to him in the hospital required further medical
treatment by a private practitioner. He filed with the CFI Manila a complaint for damages against the City
of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police.

The City of Manila contends that it cannot be held liable to respondent for damages: 1) because the accident
involving him took place in a national highway; and 2) because the City of Manila has not been negligent in
connection therewith. It also argues that the present case shall be governed by Section 4 of R.A. No. 409 which
reads that, “the city shall not be liable or held for damages or injuries to persons or property from the failure of
the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any other
law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing or
attempting to enforce said provisions”.

ISSUE:
May the respondent, a pedestrian, claim for damages for injuries suffered due to defective condition of the road
against the City of Manila?

HELD:
Yes, the respondent may claim for damages for the injuries suffered due to the defective condition of the road.

Section 4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila. On the
other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and
municipalities . . . liable for damages for the death of, or injury suffered by any person by reason specifically "of
the defective condition of roads, streets, bridges, public buildings, and other-public works under their control or
supervision." In other words, said section 4 refers to liability arising from negligence, in general, regardless of
the object thereof, whereas Article 2189 governs liability due to "defective streets," in particular. Since the
present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.

Under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the
defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What
said article requires is that the province, city or municipality have either "control or supervision" over said street
or road.
In the present case, even if P. Burgos Avenue were a national highway, this circumstance would not
necessarily detract from its "control or supervision" by the City of Manila. Hence, pedestrian can claim for the
damages he suffered due to the defective condition of the road against the City of Manila.

48
 NEGLIGENCE
Negligence

THE FATHER ALONE IS LIABLE FOR THE DAMAGES CAUSED BY HIS CHILD

41. Narciso Gutierrez v. Bonifacio Gutierrez, et al.

G.R. No. 34840, September 23, 1931
Malcolm, J.

FACTS:
This is an appeal involving an action filed by Narciso Gutierrez (Plaintiff) against Bonifacio Gutierrez, Maria De
Gutierrez, Manuel Gutierrez, Abelardo Velasco and Saturnino Cortez (defendants)
A passenger truck of the defendant Cortez, driven by defendant Velasco, and an automobile of the defendants
spouses Gutierrez, driven by their son Bonifacio collided while they were attempting to pass each other on the
Talon bridge on the Manila South Road in the municipality of Las Piñas, At the time of the collision, the father,
Mr. Manuel Gutierrez was not in the automobile. The automobile also collided with a bus in which the plaintiff
Narciso was a passenger. Narciso sustained a fracture on his right leg due to the said collision.
While Narciso blames both sets of defendants, the Cortez blames the automobile, and the spouses Gutierrez, in
turn, blames the truck. The defendants Velasco and Cortez further contend that there existed contributory
negligence on the part of Narciso because he kept his foot outside the truck, which occasioned his injury.
ISSUE:
Should defendant Bonifacio, as the driver of the automobile, and Mrs. Gutierrez, as the mother, be also held
liable for the payment of the damages to plaintiff?
HELD:
No, both should not be held liable for the payment of the damages to plaintiff Narciso.

The guaranty given by the father at the time the son was granted a license to operate motor vehicles made the
father responsible for the acts of his son. Based on these facts, pursuant to the provisions of article 1903 of the
Civil Code, the father alone and not the minor or the mother, would be liable for the damages caused by the
minor. In the United States, it is uniformly held that the head of a house, the owner of an automobile, who
maintains it for the general use of his family is liable for its negligent operation by one of his children, whom he
designates or permits to run it, where the car is occupied and being used at the time of the injury for the pleasure
of other members of the owner's family than the child driving it. The theory of the law is that the running of the
machine by a child to carry other members of the family is within the scope of the owner's business, so that he
is liable for the negligence of the child because of the relationship of master and servant.
Therefore, it is the father, Manuel Gutierrez, should be held liable for the payment of the damages to Plaintiff
Narciso, and not defendants Maria and Bonifacio Gutierrez.

49
 NEGLIGENCE
Negligence

NO NEGLIGENCE WHEN ANY PRUDENT OR RATIONAL PERSON UNDER SIMILAR CIRCUMSTANCES

CAN REASONABLY BE EXPECTED TO DO THE SAME

41. Filonia Cruz vs. Hon. Celso Gangan, Dir. Hanopol, Auditor Manlapaz, and COA
G.R. No. 143403. January 22, 2003
Panganiban, J.

FACTS:
This is a review on certiorari under Rule 64 of COA’s decision requiring petitioner Dr. Filonila Cruz (petitioner) to
pay the book value of a lost government-issued Nokia 909 analog cellular phone.

Petitioner boarded the LRT to go back to her official station in Caloocan City after her meeting with the regional
director of the TESDA in Taguig, Metro Manila. On board the LRT, her handbag was slashed and among the
items stolen was the government-issued Nokia 909 analog cellular phone. When the phone could not be
retrieved, Cruz reported the theft to the regional director of TESDA-NCR through a Memorandum, in which she
requested relief from accountability of phone. The resident auditor, however, denied her request on the ground
that she lacked the diligence required in the custody of government properties. Thus, Cruz was ordered to pay
the purchase value of the cell phone and that of its case.

The auditor’s action was sustained by the director of the National Government Audit Office II (NGAO II). The
matter was then elevated to the Commission on Audit, and the latter found no sufficient justification to grant the
request for relief from accountability.

ISSUE:
Was the petitioner, a government employee, negligent in the care of her government-issued cellular phone?

HELD:
No, petitioner, a government employee, was not negligent in the care of the government-issued cellular phone.

Negligence is the omission to do something which a reasonable man, guided upon those considerations which
ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent man and
reasonable man would not do. Riding the LRT cannot per se be denounced as a negligent act; more so under
the circumstances in this case, in which petitioner’s mode of transit was influenced by time and money
considerations. Any prudent or rational person under similar circumstances can reasonably be expected to do
the same.

In this case, possession of a cellular phone would not and should not hinder one from boarding an LRT coach
as petitioner did. After all, whether she took a bus or a jeepney, the risk of theft would have also been present.
The Rules provide that property for official use and purpose shall be utilized with the diligence of a good father
of a family. Extraordinary measures are not called for in taking care of a cellular phone while in transit. Placing it
in a bag away from covetous eyes and holding on to that bag, as done by petitioner, is ordinarily sufficient care
of a cellular phone while travelling on board the LRT. The records do not show any specific act of negligence on
her part. It is a settled rule that negligence cannot be presumed; it has to be proven. While we commend the
Commission on Audit for its diligence in safeguarding State properties, we nonetheless hold that a government
employee who has not been proven to be culpable or negligent should not be held accountable for the loss of a
cellular phone, which was stolen from her while she was riding on the LRT. Necessarily, in the absence of
evidence showing negligence on her part, credit for the loss of the cellular phone is proper, under the law.

Therefore, Cruz was not negligent and should not be made to pay the value of the stolen government phone.

50
 NEGLIGENCE
Negligence

TEST TO DETERMINE EXISTENCE OF NEGLIGENCE

42. Ariel Tres Reyes v. Maxims Tea House and Jocelyn Poon
G.R. No. 140853, February 27, 2003
Quisumbing, J.:

FACTS:
This is a petition for review of the decision of the CA which reversed the decision of NLRC ordering the
respondent Maxims Tea House (respondent) to reinstate Ariel Tres Reyes (petitioner) to his former position or,
should reinstatement no longer prove feasible, to petitioner his separation pay and backwages.

Petitioner is the driver of respondent. One morning, petitioner was driving a Mitsubishi L300 van and was sent to
fetch some employees of Savannah Moon, a ballroom dancing establishment in Libis, Quezon City. Petitioner
complied and took his usual route along Julia Vargas Street in Pasig City. He was headed towards Meralco
Avenue at a speed of 50 to 60 kilometers per hour, when he noticed a ten-wheeler truck coming his way at full
speed despite the fact that the latter’s lane had a red signal light on. Ariel maneuvered to avoid a collision, but
still the van he was driving struck the truck. As a result, he and seven of his passengers sustained physical
injuries and both vehicles were damaged. Ariel was preventively suspended 30 days, and eventually, he was
terminated from employment.

Petitioner filed a complaint for illegal dismissal. The LA ruled in favor of respondents. The NLRC reversed the
same on the ground that there was no negligence on petitioner’s part. Respondents then filed a special civil
action for certiorari with the CA, to which the latter ruled in their favor. Petitioner contended that the CA ignored
substantial evidence, showing that there was no gross negligence on his part because the vehicular accident
was entirely due to the fault of the truck driver who was speeding on the wrong lane.

ISSUE:
Was petitioner grossly negligent in driving the car?

HELD:
No, petitioner was not grossly negligent in driving the car as there was not substantial evidence to support the
same.

Under the Labor Code, gross negligence is a valid ground for an employer to terminate an employee. Gross
negligence is negligence characterized by want of even slight care, acting or omitting to act in a situation where
there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to consequences
insofar as other persons may be affected. The test to determine the existence of negligence is as follows: Did
petitioner in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent
person would use in the same situation?

In the present case, it is not disputed that petitioner tried to turn left to avoid a collision. To put it otherwise,
petitioner did not insist on his right of way, notwithstanding the green light in his lane. Still, the collision took place
as the ten-wheeler careened on the wrong lane. Clearly, petitioner exerted reasonable effort under the
circumstances to avoid injury not only to himself but also to his passengers and the van he was driving. To hold
that petitioner was grossly negligent under the circumstances goes against the factual circumstances shown.
Hence, there being no clear showing that petitioner was culpable for gross negligence, petitioners dismissal is
illegal.

51
 NEGLIGENCE
Standard of Care

DEGREE OF CARE REQUIRED OF A MINOR IS THAT ORDINARILY EXERCISED BY CHILDREN OF THE

SAME AGE, DISCRETION, KNOWLEDGE AND EXPERIENCE UNDER SAME CIRCUMSTANCES

43. Federico Ylarde and Adelaida Doronio v. Edgardo Aquino, Mauro Soriano and CA
G.R. No. L-33722, July 29, 1988
Gancayco, J.

FACTS:
This is a petition for review on certiorari which seeks to reverse the CA decision affirming RTC’s dismissal of the
suit of petitioners’ complaint for damages against private respondents Aquino and Soriano. Aquino was the
teacher of petitioner’s son, while Soriano was the principal of the school.

As part of the clearing of the old school shop’s remnants from World War II, respondent Aquino gathered his
male pupils, including petitioner’s son Novelito, and ordered them to dig beside a one-ton concrete block to make
a hole wherein the stone can be buried. When the depth of the hole was right enough, Aquino and his pupils got
out of the hole. Then, Aquino left the children to level the loose soil around the hole. Before he left, Aquino
allegedly told his pupils not to touch the stone. However, without any supervision, the pupils playfully jumped into
the pit and one of them jumped on top of the concrete block causing it to slide down towards the hole.
Unfortunately, Novelito failed to get out as the concrete block caught him, pinning him to the wall. As a result,
Novelito sustained injuries. Three days after, he died.

Thereafter, petitioners filed a suit for damages against Aquino and Soriano. They based their action against
Aquino on Article 2176 of the Civil Code for his alleged negligence that caused their son’s death, while the
complaint against Soriano, as the head of school, is based on Article 2180. The RTC dismissed the same
because Aquino exercised the utmost diligence of a very cautious person and that the demise of Novelito was
due to his own reckless imprudence.

ISSUE:
Was Novelito’s death due to his own reckless imprudence when he was playing inside the hole without
supervision?

HELD:
No, Novelito’s death was not due to his own reckless imprudence.

The degree of care required to be exercised must vary with the capacity of the person endangered to care for
himself. A minor should not be held to the same degree of care as an adult, but his conduct should be judged
according to the average conduct of persons of his age and experience. The standard of conduct to which a child
must conform for his own protection is that degree of care ordinarily exercised by children of the same age,
capacity, discretion, knowledge and experience under the same or similar circumstances.

In this case, it should be remembered that Novelito was only ten years old at the time of the incident. As such,
he is expected to be playful and daring. His actuations were natural to a boy his age. Going back to the facts, it
was not only him but the three of them who jumped into the hole while the remaining boy jumped on the block.
From this, he only did what any other ten-year old child would do in the same situation. In ruling that the child
Ylarde was imprudent, it is evident that the lower court did not consider his age and maturity. This should not be
the case.

52
 DAMAGES
General Provisions

CIVIL INDEMNITY CANNOT BE GRANTED IN ADMINISTRATIVE CASES

44. Eduardo Bago v. Joel Feraren

AM No. P-01-1466, September 3, 2003
Austria-Martinez, J.

FACTS:
This is a complaint of Eduardo Bago (Bago) against Sheriff Joel Fararen (Fararen) for non-payment of a just
debt.

In this complaint, Bago alleged that Feraren borrowed from him the amount of P4,500.00. However, Feraren was
unable to pay his indebtedness. He contends that Feraren is guilty of violating the provisions of Section 4 (A), (c)
of R.A. No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees. Moreover,
he included a prayer for civil indemnity.

For his part, Feraren did not dispute that he owes Bago. However, he claims that he cannot be held liable under
R.A. No. 6713. He contends that said provision of law speaks of justness and sincerity in the discharge of the
official function of the employees of the government. Respondent argues that he cannot be held administratively
liable under the above-quoted section since his act of borrowing money is not in any way connected with the
discharge of his official function as sheriff.

ISSUE:
Can Bago’s prayer for civil indemnity be granted in the administrative case?

HELD:
No, Bago’s prayer for civil indemnity cannot be granted in administrative case.

Despite finding Fararen administratively liable for his willful failure to pay his debt to Bago, the prayer for the
payment of civil indemnity cannot be granted because this is an administrative case. Moreover, the Court is not
a collection agency.

Hence, Bago’s prayer for civil indemnity cannot be granted by the court.

53
 DAMAGES
General Provisions

THE AWARDS OF MORAL AND EXEMPLARY DAMAGES APPLY ONLY WHEN THE CARRIER ACTED
FRADULENTLY OR IN BAD FAITH
45. Cathay Pacific Airways, Ltd., v. Spouses Daniel and Maria Luisa Vasquez
G.R. No. 150843, March 14, 2003
Davide, Jr., C.J.

FACTS:
This is a petition filed by the Spouses Dr. Daniel and Maria Luisa Vasquez (respondents) concerning the alleged
breach of contract committed by Cathay Pacific Airways (petitioner).

The respondents, together with their maid and two friends, went to Hongkong. For their return flight to Manila,
they booked on petitioner’s business class section. However, when boarding time was announced, a ground
attendant approached Dr. Vasquez that they were upgraded to first class. They refused the upgrade because it
would not look nice for them as hosts to travel in first class and their guests in the business class, and they have
business matters to discuss during the flight. They continued to refuse so the ground attendant told them that if
they would not avail themselves of the privilege, they would not be allowed to take the flight. Eventually, after
talking to his friends, Dr. Vasquez gave in. They then took the first class cabins.

Upon return in Manila, respondent filed a suit for damages against petitioner, praying for the payment to each of
them of temperate, moral, and exemplary or corrective damages. In its answer, petitioner alleged that the
upgrading of respondents was in good faith as it is a practice among commercial airlines to upgrade passengers
to the next better class of accommodation, whenever an opportunity arises, such as when a certain section is
fully booked. The RTC ruled in favor of the respondent and awarded damages. On appeal, the CA deleted the
award of exemplary damages and reduced the awards for moral and nominal damages for each of the spouses.

ISSUE:
Are the awards of moral damages and exemplary damages in favor of Sps. Vasquez proper despite finding the
carrier’s act was not attended by fraud or bad faith?

HELD:
No, the awards of moral and exemplary damages are not proper because the carrier’s act was not attended by
fraud or bad faith.

Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Although incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act
or omission. Thus, jurisprudence establishes the following requisites for the award of moral damages: (1) there
must be an injury clearly sustained by the claimant, whether physical, mental or psychological; (2) there must be
a culpable act or omission factually established; (3) the wrongful act or omission of the defendant is the proximate
cause of the injury sustained by the claimant; and (4) the award for damages is predicated on any of the cases
stated in Article 2219 of the Civil Code. Moral damages predicated upon a breach of contract of carriage may
only be recoverable in instances where the carrier is guilty of fraud or bad faith or where the mishap resulted in
the death of a passenger. Where in breaching the contract of carriage the airline is not shown to have acted
fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach
of the obligation which the parties had foreseen or could have reasonably foreseen. In such a case, the liability
does not include moral and exemplary damages.

In this case, the SC ruled that the breach of contract of carriage, which consisted in the involuntary upgrading of
the respondents' seat accommodation, was not attended by fraud or bad faith. The most that can be adjudged in
favor of the respondents for petitioner's breach of contract is an award for nominal damages.

Hence, the awards of moral and exemplary damages in favor of Sps. Vasquez are not proper.

54
 DAMAGES
General Provisions

PRODUCTION OF COMPETENT PROOF OR THE BEST EVIDENCE OBTAINED IS REQUIRED TO JUSTIFY

THE AWARD OF ACTUAL DAMAGES

AWARD FOR MORAL DAMAGES DOES NOT REQUIRE ALLEGATION AND PROOF OTHER THAN THE
DEATH OF THE VICTIM

CLAIM FOR DAMAGES FOR LOSS OF EARNING CAPACITY MAY BE AWARDED DESPITE ABSENCE OF
DOCUMENTARY EVIDENCE IN CERTAIN INSTANCES

46. People v. Donato Caraig

G.R. Nos. 116224-27, March 28, 2003
Davide, Jr., C.J.

FACTS:
This is an appeal from the judgment of conviction filed by Donato Caraig (appellant).

Several separate information for multiple murders were filed against appellant, and his co-accused. Edmundo
Diaz was the sole survivor in the incident. He testified that he, together with his friends went to the Orchids
Beerhouse. As they were leaving the beerhouse, the appellant confronted them whether they were military men.
They did not answer. Hence, a rumble or fight suddenly ensued between them. Apellant then ran back to the
Orchids Beerhouse. Thereafter, Edmundo and his companions rode on a taxi. However, they were chased by an
old 1976 model white Galant car, which eventually blocked the taxi, about 100 meters from the Orchids
Beerhouse. Caraig, and his friends alighted from the Galant car. Each of them held a .45 caliber gun, which they
simultaneously fired upon Edmundo and his companions. While the hail of bullets went on, Edmundo played
dead. He then heard somebody utter: Pare, tama na yan. Patay na lahat ang mga iyan. When the car left, he
asked the people who gathered around the scene to bring him to a hospital, where he underwent treatment for
eighteen days. All his companions died due to the gunshot wounds.

The accused were convicted by the RTC. The damages awarded were as follows:1) to pay the heirs of Castro
Jr. the sum of P19,900 for burial expenses, P50,000 for indemnity and P100,000 for moral damages; 2) to pay
the heirs of Raagas the sum of P140,000 for burial expenses, P50,000 for indemnity and P500,000 for moral
damages; [and] 3) to pay the heirs Agustin the sum of P150,000 for burial expense, P50,000 for indemnity and
P300,000 for moral damages.

ISSUE:
1) Were the actual and moral damages awarded by the RTC in favor of the heirs proper?
3) Were the claims for damages for loss of earning capacity properly substantiated?

HELD:
1) No, the award of actual damages were not properly substantiated, and the moral damages must be reduced.

It is necessary for a party seeking the award of actual damages to produce competent proof or the best evidence
obtainable to justify such award. Only substantiated and proven expenses, or those that appear to have been
genuinely incurred in connection with the death, wake, or burial of the victim will be recognized in court.

For the heirs of Ragaas, the amount of P140, 000 for burial expenses were supported by mere lists of expenses
written on a PCIBank check booklet. For the heirs of Castro Jr., the amount of P19,900 for burial expenses were
supported by a receipt issued by Memorial Homes, a list of expenses, and an Affidavit of Adjudication. A list of
expenses cannot replace receipts when the latter should have been issued as a matter of course in business
transactions. Neither can the mere testimonies of the victims widows Ruth Agustin, Rhodora Raagas, and Merle
Castro in the consolidated cases against Caraig justify the awards for funeral or burial expenses. Further, the
receipt issued by Memorial homes cannot be admitted as evidence because it was not formally offered.

55
Nonetheless, Nominal damages in the amount of P10,000 for each group of heirs of the victims must be awarded,
since they clearly incurred funeral expenses.

The amounts of moral damages awarded for each group of the deceased's heirs are, however, reduced to
P50,000 in accordance with current jurisprudence.

2) No, the claims were not properly substantiated because no documentary evidence was presented to
substantiate the claim for damages for loss of earning capacity.

As a rule, whoever prays for such damages must substantiate the same. The exceptions are: (1) the deceased
was self-employed earning less than the minimum wage under current labor laws, and judicial notice may be
taken of the fact that in the victims line of work no documentary evidence is available; or (2) he was employed
as a daily-wage worker earning less than the minimum wage under current labor laws.
y
The testimonial evidence shows that all of the deceased were not self-employed or employed as daily-wage
workers earning less than the minimum wage under the labor laws existing at the time of their death. Therefore,
for lack of documentary proof, no indemnity for loss of earning capacity can be given in these cases.

56
 DAMAGES
Kinds of Damages

INJURED PARTY MUST PROVE THE ACTUAL AMOUNT OF LOSS WITH REASONABLE DEGREE OF
CERTAINTY PREMISED UPON COMPETENT PROOF AND ON THE BEST EVIDENCE AVAILABLE

47. ALEJANDRO FUENTES, JR. vs. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES
G.R. No. 111692, February 9 1996.

FACTS:
During a benefit dance at Dump Site, Petitioner was witnessed by Alberto Toling and Honorio Osok who knew
him for quite some time to have stabbed Malaspina in the abdomen with a hunting knife.

Petitioner and his uncle Felicisimo contends that it was Zoilo Fuentes, Jr. a.k.a "Jonie" who did it and fleed.

The RTC found Petitioner guilty of murder qualified by treachery and imposed on him an indeterminate prison
term of ten (10) years and one (1) day of prision mayor as minimum to seventeen (17) years and four (4) months
of reclusion temporal as maximum, and to indemnify the heirs of Malaspina the amount of P50,000.00 and to pay
P8,300.00 as actual damages plus costs.

The RTC ruling was affirmed by the CA.

Petitioner maintains that assuming that he committed the crime it is error to hold him answerable for P8,300.00
as actual damages on the basis of the mere testimony of the victim's sister, Angelina Serrano, without any
tangible document to support such claim.

ISSUE: Whether the heirs of Malaspina should be awarded with actual damages despite the absence of any
evidence to prove the amount of damages incurred.

HELD:
NO. In crimes and quasi-delicts, the defendant is liable for all damages which are the natural and probable
consequences of the act or omission complained of. To seek recovery for actual damages it is essential that the
injured party proves the actual amount of loss with reasonable degree of certainty premised upon competent
proof and on the best evidence available. Courts cannot simply, rely on speculation, conjecture or guesswork in
determining the fact and amount of damages.

The award of P8,300.00 as actual damages is not supported by the evidence on record. Only the testimony of
the victim's elder sister stating that she incurred expenses of P8,300.00 in connection with the death of Malaspina
was presented. However, no proof of the actual damages was ever presented in court. Of the expenses alleged
to have been incurred, the Court can only give credence to those supported by receipts and which appear to
have been genuinely expended in connection with the death of the victim. Since the actual amount was not
substantiated, the same cannot be granted.

57
 DAMAGES
Kinds of Damages

INDEMNIFICATION FOR LOSS OF EARNING CAPACITY MUST BE DULY PROVEN

48. PEOPLE VS. CUENCA

G.R. No. 143819, January 29, 2002

FACTS:
Accused Gerry Cuenca and Crisanto Agon were charged with the crime of Murder of a certain Wilfredo Castillo.
The RTC of Lipa, Batangas convicted the Accused and found them guilty of murder beyond reasonable doubt
sentencing each of them to suffer the penalty of RECLUSION PERPETUA, to pay the heirs of Wilfredo Castillo
the sum of ₱50,000.00 as indemnity for his death, the sum of ₱38,800.00, as actual damages, the sum of
₱4,800,000.00 for loss of earning capacity, the sum of ₱20,000.00, as moral damages and to pay their
proportionate share of the costs.

Aggrieved, the Accused filed an appeal to the CA.

ISSUE:
Were the award of ₱38,800.00 for actual damages and ₱4,800,000.00 for loss of earning capacity proper in this
case despite the fact that portions of the amount claimed were unsubstantiated by evidence?

HELD:
NO. The actual damages granted is improper and should be reduced from ₱38,800 to ₱7,300 considering that
only the latter amount, representing burial expenses, was duly supported by receipts. The unsubstantiated
balance of ₱31,500 should be deleted.

The RTC’s award of ₱4,800,000 for loss of earning capacity is also improper. True, in People v. Verde, the
Supreme Court granted an award for the loss of earning capacity to the heirs of the deceased despite the absence
of documentary evidence to substantiate such claim. The SC deemed the testimony of the victim's wife sufficient
to establish the basis for the grant.

However, the new ruling in People v. Panabang modifies this principle and now precludes an award for loss of
earning capacity without adequate proof. The bare testimony of the brother of the deceased Felicisimo Castillo
that, at the time of his death, Wilfredo Castillo was earning ₱250.00 daily as carpenter is not sufficient proof.

Indemnification for loss of earning capacity partakes of the nature of actual damages which must be duly proven.
A self-serving statement, being unreliable, is not enough. For lost income to be recovered, there must likewise
be an unbiased proof of the deceased's average, not just gross, income. An award for lost of earning capacity
refers to the net income of the deceased, i.e., his total income net of expenses.

58
 DAMAGES
Kinds of Damages

SPECULATIVE DAMAGES CANNOT BE RECOVERED

49. BATONG BUHAY GOLD MINES, INC. vs. CA and INC. MINING CORP.
G.R. No. L-45048, January 7, 1987

FACTS:
This is a Petition for Review assailing the Decision of the CA which modified the decision of the CFI of Manila by
adding to the latter an order to Petitioner to pay the Respondent the sum of P5,625.55 with legal interest.

Petitioner issued Stock Certificate No. 16807 covering 62,495 shares with a par value of P0.01 per share to
Francisco Aguac who was then legally married to Paula G. Aguac, but the said spouses had lived separately for
more than fourteen (14) years prior to the said date. Francisco Aguac sold his shares covered by Stock Certificate
No. 16807 for the sum of P9,374.70 in favor of the Respondent. Said sale was made by Francisco Aguac without
the knowledge or consent of his wife Paula G. Aguac.

Paula G. Aguac wrote a letter to the president of Petitioner asking that the transfer of the shares sold by her
husband be withheld, inasmuch as the same constituted conjugal property and her share of proceeds of the sale
was not given to her.

Respondent presented Stock Certificate No. 16807 for registration and transfer of the said stock certificate in
their name. Petitioner justify their refusal to transfer the shares of stock of Francisco Aguac in the name of
Respondent in view of their apprehension that they might he held liable for damages under Article 173 of the
Civil Code and the ruling of the Supreme Court in Bucoy vs. Paulino.

On March 5, 1970, in view of the defendant's inaction on the request for the transfer of the stock certificate in its
name, Respondent commenced a civil action before the CFI of Manila, praying that the Petitioners be ordered to
issue and release the transfer stock certificate covering 62,495 shares of Petitionersy, formerly registered in the
name of Francisco Aguac, in favor of the Respondent, and for the recovery of compensatory, exemplary and
corrective damages and attorney's fees.

The CFI of Manila ordered the Petitioner to effect the transfer of the shares covered by Stock Certificate No.
16807 in the name of Respondent.

Respondent seasonably appealed arguing the alleged failure on the part of CFI Manila to award damages for the
wrongful refusal of petitioner to transfer the subject shares of stock and alleged failure to award attorney's fees,
cost of injunction bond and expenses of litigation.

ISSUE:
Should petitioner be liable for damages on unrealized profit when such claims are based merely on speculations?

HELD:
NO. The stipulation of facts of the parties does not at all show that private respondent intended to sell, or would
sell or would have sold the stocks in question on specified dates. While it is true that shares of stock may go up
or down in value, still whatever profits could have been made are purely SPECULATIVE, for it was difficult to
predict with any degree of certainty the rise and fall in the value of the shares. Thus, speculative damages cannot
be recovered.

It is easy to say now that had private respondent gained legal title to the shares, it could have sold the same and
reaped a profit of P5,624.95 but it could not do so because of petitioner's refusal to transfer the stocks in the
former's name at the time demand was made, but then it is also true that human nature, being what it is, private
respondent's officials could also have refused to sell and instead wait for expected further increases in value.

59
 DAMAGES
Kinds of Damages

INCOME HAD A PERSON FINISHED HIS STUDIES SHOULD BE CONSIDERED IN DETERMINING

COMPENSATORY DAMAGES

50. CARRIAGA vs. LAGUNA TAYABAS BUS COMPANY and MANILA RAILROAD COMPANY
G.R. No. L-11037, December 26, 1990.

FACTS:
Bus No. 133 of Laguna Tayabas Bus Company (LTB) bound for Lilio Laguna, departing from Manila, collided
with the engine of a train then passing by the national railroad tracks of the poblacion of Bay, Laguna. Petitioner
was one of the injured passengers of LTB. Petitioner was a 4 th year medical student from University of Sto.
Tomas who sustained grave injuries. Petitioner was unconscious for 35 days, and his right forehead was fractured
in such a way that it necessitated the removal of practically all of the right frontal lobe of his brain. According to
the psychiatrist, Petitioner’s mental capacity has been reduced to that he can no longer finish his studies.
Petitioner became invalid after the accident. Respondent LTB paid for the expenses in the hospitalization of
Petitioner.

Petitioner filed a case against LTB and Manila Railroad Company (MRR Co.) for the recovery of P312,000 worth
of actual, compensatory, moral, and exemplary damages.

The lower court sentenced Respondent to pay Petitioner P10,490 as payment for compensatory damages. Both
Petitioner and Respondent appealed. Petitioner appealed questioning the lower court’s decision in awarding only
P10,490 in compensatory damages and not awarding them actual and moral damages. Respondent LTB, on the
other hand, appealed claiming that only the actual damages suffered by Petitioner consisting of medical, hospital
and other expenses in the total sum of P17,719.75 should be included.

ISSUE:
Was the award of P10,491 as compensatory damages insufficient?

HELD:
YES. A a result of the physical injuries suffered by Petitioner, he is now in a helpless condition, virtually an invalid,
both physically and mentally.

Under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of contract but who acted
in good faith, is liable to those that are the natural and probable consequences of the breach and which the
parties had foreseen or could have reasonably foreseen at the time the obligation was constituted, provided such
damages, according to Art. 2199 of the same Code, have been duly proved.

Here, the income which Petitioner could earn if he should finish the medical course and pass the corresponding
board examinations must be deemed to be within the same category because they could have reasonably been
foreseen by the parties at the time he boarded the bus No. 133 owned and operated by the LTB. At that time he
was already a fourth-year student in medicine in a reputable university. While his scholastic record may not be
first rate, it is, nevertheless, sufficient to justify the assumption that he could have finished the course and would
have passed the board test in due time.

As regards the income that he could possibly earn as a medical practitioner, it appears that, according to Dr.
Amado Doria, a witness for the LTB, the amount of P300.00 could easily be expected as the minimum monthly
income of Edgardo had he finished his studies.

Upon consideration of all the facts mentioned heretofore, the compensatory damages awarded to Petitioner
should be increased to P25,000.00.

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 DAMAGES
Kinds of Damages

THE INTEREST RATE IN ARTICLE ARTICLE 2209 OF THE CIVIL CODE REFERS TO MONETARY
OBLIGATIONS IN GENERAL WHILE THE USURY LAW REFERS TO (1) LOANS; (2) FORBEARANCES OF
ANY MONEY, GOODS, OR CREDITS; AND (3) RATE ALLOWED IN JUDGMENTS.

51. PACITA F. REFORMINA and HEIRS OF FRANCISCO REFORMINA vs.

THE HONORABLE VALERIANO P. TOMOL, JR., as Judge of the Court of First Instance, Branch XI, CEBU
CITY, SHELL REFINING COMPANY (PHILS.), INC., and MICHAEL, INCORPORATED
G.R. No. L-59096 October 11, 1985
CUEVAS, J

FACTS:
This is a Petition for Review on certiorari of the Resolution of the respondent Judge Tomol, Jr. in an action for
Recovery of Damages for injury to Person and Loss of Property, praying for a declaration that the judgment in
their favor should bear legal interest at the rate of twelve (12%) percent per annum pursuant to Central Bank
Circular No. 416 otherwise known as the “Usury Law.”

The Court of Appeals modified the trial court’s judgment directing the two defendants- appellants to also pay
P100,000.00 with legal interests from the filing of the complaint until paid as compensatory and moral damages.
Petitioners claim that the "legal interest" should be at the rate of twelve (12%) percent per annum, invoking in
support of their aforesaid submission, Central Bank of the Philippines Circular No. 416. Upon the other hand,
private respondents insist that said legal interest should be at the rate of six (6%) percent per annum only,
pursuant to and by authority of Article 2209 of the New Civil Code in relation to Articles 2210 and 2211 thereof.

ISSUE:
Whether or not the legal interest of 6% per annum as provided for under Arrticle 2209 of the Civil Code applies
to the judgement award in an action for damages.

HELD: Yes. Article 2209 of the Civil Code is applicable in the case at bar.

Article 2209 of the Civil Code refers to monetary obligations in general while the Usury Law refers to (1) loans;
(2) forbearances of any money, goods, or credits; and (3) rate allowed in judgments. The judgments spoken of
and referred to are judgments in litigations involving loans or forbearance of any 'money, goods or credits. Any
other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any money,
goods or credits does not fall within the coverage of the said law for it is not within the ambit of the authority
granted to the Central Bank. The Monetary Board may not tread on forbidden grounds.

The decision herein sought to be executed is one rendered in an Action for Damages for injury to persons and
loss of property and does not involve any loan, much less forbearances of any money, goods or credits. As
correctly argued by the private respondents, the law applicable to the said case is Article 2209 of the New Civil
Code which reads—“Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs
in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of interest
agreed upon, and in the absence of stipulation, the legal interest which is six percent per annum.”

61
 DAMAGES
Kinds of Damages

ON THE GROUNDS OF EQUITY, LEGAL INTEREST MAY BE AWARDED EVEN IF NOT EVEN IF NOT
ASSIGNED AS AN ERROR ON APPEAL

52. DAVID INES and HORTENCIA CASTRO-INES v. COURT OF APPEALS and DIONISIO GERONIMO
G.R. No. 114051. August 14, 1995
FRANCISCO, J.

FACTS:

Petitioners spouses David Ines and Hortencia Castro-Ines filed an action before the Regional Trial Court to annul
a deed of sale over their conjugal residential house and lot in favor of private respondent spouses Geronimo.
The trial court declared the deed of sale void as to the one-half conjugal share of David Ines in the subject
property due to the forgery of his signature and the other half belonging to his wife as equitable mortgage.
Petitioners appealed to the Court of Appeals on the ground that the husband’s forged signature did not bind the
conjugal partnership, hence the entire contract is voidable as the consent of the husband, was lacking. Public
respondent Court of Appeals declared the deed of sale void in its entirety and ordered private respondents to
reconvey the subject property to the petitioners who were ordered to return the P150,000.00 consideration they
received from the sale, but with legal interest from April 15, 1982 until fully paid. Petitioners’ motion for the partial
reconsideration of the decision to delete the imposition of legal interest was subsequently denied. Hence this
petition to delete the award of interest in favor of the private respondents for the reason that they never appealed
from the trial court’s decision which did not award such interest.

ISSUE:
Whether or on the Court may award legal interest even if it was not assigned as an error on appeal?

HELD:
YES. Respondent court correctly explained that the imposition of legal interest on the amount due was made not
because the appellees sought affirmative relief but because the award of legal interest on the amount due is a
necessary consequence of the finding that the Contract of Sale is void in its entirety, and in the exercise of its
appellate jurisdiction the court may resolve or consider errors not assigned in the appellant’s brief when it is
necessary for a just, fair and equitable resolution of the case. The award of legal interest is based on equitable
grounds duly sanctioned by the Civil Code under Article 2210 which provides: "Interest may, in the discretion of
the court, be allowed upon damages awarded for breach of contract."

62
 DAMAGES
Kinds of Damages

POLITICAL, SOCIAL, AND FINANCIAL STANDING, AND BUSINESS OR FINANCIAL POSITION MAY BE
CONSIDERED IN DETERMINING THE AMOUNT OF DAMAGES

53. FERNANDO LOPEZ, ET AL. vs. PAN AMERICAN WORLD AIRWAYS

G.R. No. L-22415 March 30, 1966
BENGZON, J.P., J

FACTS:
Respondent Pan American World Airways (PAN-AM) issued first class tickets for Tokyo-San Francisco flights
dated on May 24, 1960 in favor of the Petitioner Senator Lopez and his party. A total fare of P9,444.00 for all of
them was fully paid before the tickets were issued. Upon arrival of said date, the petitioners were informed that
the first class seats were all booked up and that they could not go in that flight unless they took the tourist class
therein. Senator Lopez and party were constrained to take PAN-AM's flight as tourist passengers. Senator Lopez
however made it clear, as indicated in his letter to PAN-AM's Tokyo office on that date that they did so "under
protest" and without prejudice to further action against the airline.

The petitioners filed a suit for damages against PAN-AM in the Court of First Instance of Rizal. The trial court in
ruled in favor of the plaintiffs. It is from said judgment, as thus reconsidered, that both parties have appealed.
According to plaintiffs, defendant acted in bad faith because it deliberately refused to comply with its contract to
provide first class accommodations to plaintiffs, out of racial prejudice against Orientals. And in support of its
contention evidence was adduced relating to two previous instances of alleged racial discrimination by defendant
against Filipinos in favor of "white" passengers. Defendant has from the start admitted that it breached its
contracts with plaintiffs to provide them with first class accommodations, however, it was only due to an honest
mistake and not because it had acted in bad faith. Plaintiffs, on the other hand, sought that the moral damages
be increased to a total of P650,000.

ISSUE:
Whether or not political, social, and financial standing, and business or financial position may be considered in
determining the amount of damages.

HELD:
Yes. As a proximate result of defendant's breach in bad faith of its contracts with plaintiffs, the latter suffered
social humiliation, wounded feelings, serious anxiety and mental anguish. Given the Senator Lopez background
and positions as Senate President Pro Tempore and former Vice-President of the Philippines, adding to the fact
that he was going to the United States to attend a private business conference of the Binalbagan-Isabela Sugar
Company and a banquet tendered by Filipino friends in his honor as Senate President Pro Tempore, the award
of moral damages is only rightfully proper. Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige
and therefore his humiliation. In addition she suffered physical discomfort during the 13-hour trip which may well
be considered a physical suffering.

The Court further stressed that the amount of damages awarded has been determined by adequately considering
the official, political, social, and financial standing of the offended parties on one hand, and the business and
financial position of the offender on the other. And further considering the present rate of exchange and the terms
at which the amount of damages awarded would approximately be in U.S. dollars.

63
 DAMAGES
Kinds of Damages

EXISTENCE OF FACTUAL BASIS MUST BE PROVED FOR AN AWARD OF MORAL DAMAGES

54. DEOGRACIAS F. MALONZO v. GREGORIA T. GALANG and FRANCISCO GALANG

G.R. No. L-13851. July 27, 1960
REYES, J. B. L., J.

FACTS:
On October 5, 1946, Gregoria T. Galang received from the petitioner, Deogracias T. Malonzo a loan of P5,000.00
under a check which Gregoria cashed at the drawee bank National City Bank of New York, Manila. When the
Rehabilitation Finance Corporation loaned to Francisco G. Galang a check in the sum of P14,968.00 drawn
against the Philippine National Bank, Galang endorsed the check to the petitioner who cashed it on April 25,
1947. Out of the proceeds of the check, P10,000.00 was applied to the payment of the share and participation of
Francisco Galang in a fishing venture with the petitioner; and the balance delivered in cash to Malonzo to pay
the loan of P5,000.00 extended by the petitioner to Galang’s wife on October 5, 1946. However, the petitioner
alleged that he returned said loan amount to Galang, partly in cash (P1,000.00) and partly in a check for
P3,968.00 dated May 19, 1947, made payable to Gregoria T. Galang and drawn against the Philippine Trust Co.

Claiming that the P5,000.00 loan obtained from him by Gregoria T. Galang on October 5, 1946, had remained
unpaid, petitioner sued the Galang spouses for the payment thereof, plus interests and attorney’s fees. The trial
court held that the loan had already been paid as claimed by the defendant spouses; and found that the check
delivered by Malonzo to Gregorio T. Galang on May 19, 1947 had nothing to do with said loan and was in payment
of another loan which she extended to Malonzo just a few days before the check was issued. The lower court
dismissed the complaint and sentenced Malonzo to pay the Galang spouses under their counterclaim P500.00
compensatory and moral damages, and P1,000.00 attorney’s fees. The decision was affirmed by the Court of
Appeals. In this appeal, the petitioner is urging that there was no legal basis for the award to respondents of
compensatory and moral damages, and of attorney’s fees.

ISSUE:
Whether moral damages may be awarded despite lack of proof as to its factual basis.

HELD: No. Moral damages are not recoverable herein, notwithstanding the finding the complaint was clearly
unfounded or unreasonable.

While no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of
indemnity being left to the discretion of the court (Art. 2216), it is, nevertheless, essential that the claimant
satisfactorily prove the existence of the factual basis of the damage (Art. 2217) and its causal relation to
defendant’s acts. This is so because moral damages, though incapable of pecuniary estimation, are in the
category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty
on the wrongdoer.

The trial court and the Court of Appeals both seem to be of the opinion that the mere fact that respondent were
sued without any legal foundation entitled them to an award of moral damages, hence they made no definite
finding as to what the supposed moral damages suffered consist of. Such a conclusion would make of moral
damages a penalty, which they are not, rather than a compensation for actual injury suffered, which they are
intended to be. Moral damages, in other words, are not corrective or exemplary damages.

64
 DAMAGES
Kinds of Damages

MORAL DAMAGES ARE RECOVERABE IN CASES OF SEDUCTION, ABDUCTION, RAPE, OR ACTS OF

LASCIVIOUSNESS NOT ONLY BY THE VICTIM BUT HIS OR HER PARENTS AS WELL

55. People v. Fontanilla

G.R. No. L-25354, June 28, 1968
Castro,J.:

FACTS:
The appellant Mariano Fontanilla was prosecuted in the justice of the peace court (now municipal court) of San
Fernando, La Union for qualified seduction. The criminal complaint, signed by the offended woman Fe Castro
and filed on February 28, 1961, charged.

After trial, the court, on November 27, 1962, found that "the guilt of the accused has been proved beyond
reasonable doubt," and accordingly sentenced him to "an indeterminate prison term from four (4) months of
arresto mayor as maximum to two (2) years and four (4) months of prision correccional and to pay the costs."
The accused was further ordered "to pay the sum of Five Hundred Pesos (P500.00) as moral damages to the
offended party or to her parents."cralaw virtua1aw library

ISSUE:
Is the victim of qualified seduction and/or her parents entitled to moral damages?

HELD:
Yes.

We have heretofore stated that the complainant was a virgin, there being no proof to the contrary, and that she
was deflowered by the appellant. The loss of her virginity, at the hands of the appellant, together with the
attendant shame and scandal, entitles her, in the view of this Court, to the sum of P2,500 in moral damages. Her
future as a woman is definitely impaired, and the resultant prejudice against her engendered in the male
population of the barrio where she resides cannot be blinked away.

The second error of the lower court is in making the award payable to the offended party or to her parents, which
award is, by the very wording of the judgment, in the alternative. Article 2219 of the New Civil Code provides that
moral damages are recoverable by the offended party in the cases of "seduction, abduction, rape, or other
lascivious acts" and that the "parents of the female seduced, abducted, raped, or abused ... may also recover
moral damages." (Emphasis supplied). The conviction of the accused suffices as a basis to adjudge him, in the
same action, liable for an award of moral damages, without independent proof thereof, to the victim and her
parents, because the law presumes that not only the woman who was seduced, abducted, raped or abused, but
as well her parents, naturally suffer besmirched reputation, social humiliation, mental anguish, and wounded
feelings. In the case at bar, moral damages must be awarded to the offended woman and her parents, not to
either of them, as ordered by the court a quo.

65
 DAMAGES
Kinds of Damages

MORAL DAMAGES MAY NOT BE AWARDED IN THE ABSENCE OF A WRONGFUL ACT OR OMMISION,
FRAUD OR BAD FAITH

56. Rubio vs. Court of Appeals

G.R. No. L-50911
March 12, 1986

FACTS:
This is a petition to review the decision of the Court of Appeals, now the Intermediate Appellate Court, in CA-
G.R. No. 60896-R, which affirmed the trial court's decision ordering Robert O. Phillips & Sons, Inc., and the
plaintiff-spouses to pay Miguel Perez Rubio the sum of P4,250,000.00 but ordered Perez Rubio to pay Robert
O. Phillips & Sons, Inc. and the other plaintiffs damages in the amount of P4,404,510.76.

Perez Rubio filed a petition for certiorari against Robert O. Phillips in G.R. No. L- 24581 alleging that in taking
cognizance of Civil Case No. 8632 and in issuing the writ of preliminary injunction ex parte, the respondent court
committed a grave abuse of discretion The petitioner prayed that the respondent court be restrained from in any
way proceeding with the case, and that, respondent Phillips be enjoined from proceeding with the sale of the
shares of stock of Hacienda Benito, Inc. or any of its assets to Alfonso Yuchengco or to any other person, or from
performing any act which would diminish the value of said shares of stock or deplete the assets of the company.
The lower court rendered a decision holding the plaintiffs liable.

ISSUE:
Whether the award of moral damages is proper despite the absence of any showing of bad faith or fraud.

HELD:
No. In the absence of a wrongful act or omission or of fraud or bad faith, moral damages cannot be awarded and
that the adverse result of an action does not per se make the action wrongful and subject the actor to the payment
of damages, for the law could not have meant to impose a penalty on the right to litigate.

We have stated that the petitioner had valid reasons to implead Manufacturers Bank and Hacienda Benito in his
cases against Phillips and Sons and the Phillips spouses. An assessment of the evidence in record shows that
the filing of the complaint may likewise be characterized as a sincere attempt on the part of Phillips and Sons
and the Phillips spouses to find means or to buy time to pay their debt to the petitioner. In the case of
Manufacturers Bank, the record shows that its active participation in the transaction involving the properties of
Hacienda was legitimate. While no damages are due the Bank, neither is it liable for damages. As far as Victoria
Valley is concerned, we find no reason to conclude that it was really organized or actively participated to prejudice
the interests of the petitioner. The record shows that Victoria Valley withdrew from the transaction involving the
properties of Hacienda Benito even before the filing of the third party complaint.

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 DAMAGES
Kinds of Damages

IN ORDER THAT MORAL DAMAGES MAY BE AWARDED, THERE MUST BE PLEADING AND PROOF OF
MORAL SUFFERING, MENTAL ANGUISH, FRIGHT AND THE LIKE

57. Mahinay v. Velasquez

G.R. No. 152753 January 13, 2004
Corona,J.:

FACTS:
The instant case arose from the alleged defamatory remarks of petitioner Iglecerio Mahinay against respondent
Gabino A. Velasquez, Jr.

According to Olipio Machete, overseer of respondent, petitioner uttered the following malicious and insulting
statement against respondent: "Your master, a candidate for Congressman, Ben Velasquez, is a land grabber."
Machete informed respondent of what petitioner said about him. This impelled respondent to file a complaint for
damages against petitioner, claiming that his utterances besmirched his and his family’s reputation and caused
him anxiety, mental anguish and sleepless nights.

As no amicable settlement could be reached by the parties, trial on the merits ensued. The trial court eventually
ruled in favor of respondent on the basis of the sole testimony of Machete and awarded to respondent moral
damages in the amount of P100,000 and exemplary damages in the amount of P50,000.2 No other evidence was
adduced by either party.

ISSUE:
Whether the award of moral damages to respondent is proper despite absence of proof of moral suffering, mental
anguish, fright and the like.

HELD:
No. In order that moral damages may be awarded, there must be pleading and proof of moral suffering, mental
anguish, fright and the like. While respondent alleged in his complaint that he suffered mental anguish, serious
anxiety, wounded feelings and moral shock, he failed to prove them during the trial. Indeed, respondent should
have taken the witness stand and should have testified on the mental anguish, serious anxiety, wounded feelings
and other emotional and mental suffering he purportedly suffered to sustain his claim for moral damages. Mere
allegations do not suffice; they must be substantiated by clear and convincing proof. No other person could have
proven such damages except the respondent himself as they were extremely personal to him. "While no proof of
pecuniary loss is necessary in order that moral damages may be awarded, the amount of indemnity being left to
the discretion of the court, it is nevertheless essential that the claimant should satisfactorily show the existence
of the factual basis of damages and its causal connection to defendant’s acts. This is so because moral damages,
though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant
for actual injury suffered and not to impose a penalty on the wrongdoer.

Neither is respondent entitled to exemplary damages. "If the court has no proof or evidence upon which the claim
for moral damages could be based, such indemnity could not be outrightly awarded. The same holds true with
respect to the award of exemplary damages where it must be shown that the party acted in a wanton, oppressive
or malevolent manner."

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 DAMAGES
Kinds of Damages

CIVIL LIABILITIES TO BE AWARDED FOR A RAPE VICTIM WITH A CHILD ARE 1) INDEMNIFICATION, 2)
ACKNOWLEDGMENT AND 3) FULL SUPPORT

58. PEOPLE VS MARAHAY

G.R. No. 142985 August 6, 2002
J. Ynares-Santiago

FACTS:
The accused-appellant was found guilty of rape and was sentenced for reclusion perpetua. Eventually, the victim
became pregnant which only further confirmed the commission of the crime of rape. The trial court awarded the
victim P50,000 as indemnity.

ISSUE:
Was the award for indemnity of P50,000 proper for a rape victim who bore a child?

HELD:
No. The award of damages by the trial court must be modified. The trial court ordered the payment of indemnity
in the amount of P50,000.00, but failed to take into consideration the prevailing jurisprudence regarding the award
of moral damages in the amount of P50,000.00 to a rape victim. Moral damages are awarded in rape cases
involving young girls between 13 and 19 years of age, taking into account the immeasurable havoc wrought on
their youthful feminine psyche. It may be awarded without need of showing that the victim suffered mental
anguish, fright, serious anxiety and the like.

Concerning the acknowledgment and support of the offspring of rape, Article 345 of the Revised Penal Code
provides for three kinds of civil liability that may be imposed on the offender: a) indemnification, b)
acknowledgment of the offspring, unless the law should prevent him from so doing, and c) in every case to
support the offspring. With the passage of the Family Code, the classification of acknowledged natural children
and natural children by legal fiction was eliminated and they now fall under the specie of illegitimate children.
Since parental authority is vested by Article 176 of the Family Code upon the mother and considering that an
offender sentenced to reclusion perpetua automatically loses parental authority over his children, no "further
positive act is required of the parent as the law itself provides for the child’s status." Hence, accused-appellant
should only be ordered to indemnify and support the victim’s child. However, the amount and terms of support
shall be determined by the trial court after due notice and hearing in accordance with Article 201 of the Family
Code.

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 DAMAGES
Kinds of Damages

IN MURDER CASES, COMPETENT EVIDENCE IS REQUIRED TO AWARD ACTUAL DAMAGES AND LOSS
OF EARNING CAPACITY; BUT AWARD FOR MORAL DAMAGES IS MANDATORY EVEN WITHOUT
ALLEGATION AND PROOF

59. PEOPLE VS CARAIG

G.R. Nos. 116224-27. March 28, 2003
J. Davide Jr.

FACTS:
Appellant Donato Caraig was found guilty beyond reasonable doubt of three counts of murder for the death of
Melencio Castro, Jr., Roberto Raagas, and Placido Agustin; and of frustrated murder for the mortal wounding of
Edmundo Diaz. The trial court awarded the heirs of Roberto Raagas actual damages amounting to P140, 000
for burial expenses based on exhibits such as list of expenses, official receipts and affidavit of adjudication that
were not offered as evidence during trial. It also awarded Melencio’s heirs moral damages despite lack of
allegations and proof of their emotional sufferings. The trial court, however, was silent on the indemnity for loss
of earning capacity under Article 2206 of the Civil Code.

ISSUES:
1. Whether or not the awards for burial and funeral expenses as actual damages can be awarded based
on exhibits not offered as evidence during trial?
2. Whether or not moral damages can be awarded to the heirs of the victims of murder worhout allegations
and proof?
3. Whether or not loss of earning capacity can be awarded in the case?

HELD:
1. No. The exhibits such as written expense, receipts and affidavit of adjudication were not among the
documentary evidence offered in evidence during the trial of the consolidated cases against Caraig.
Hence, they cannot be considered as evidence against him.

It is necessary for a party seeking the award of actual damages to produce competent proof or the best
evidence obtainable to justify such award. Only substantiated and proven expenses, or those that appear
to have been genuinely incurred in connection with the death, wake, or burial of the victim will be
recognized in court. Nonetheless, in line with People v. Carillo, reiterated in People v. Bonifacio,48 we
shall award nominal damages in the amount of P10,000 for each group of heirs of the victims, since they
clearly incurred funeral expenses.

2. Yes. The Court noted that the award of moral damages is mandatory and does not require allegation
and proof other than the death of the victim. The Court mentioned that as borne out by human nature
and experience, a violent death invariably and necessarily brings about emotional pain and anguish on
the part of the victims family. Thus, moral damages must be awarded even in the absence of any
allegation and proof of the heirs emotional suffering.

3. No. The rule is that documentary evidence should be presented to substantiate a claim for damages for
loss of earning capacity. By way of exception, damages therefor may be awarded despite the absence
of documentary evidence, provided that there is testimony that the victim was either (1) self-employed
earning less than the minimum wage under current labor laws, and judicial notice may be taken of the
fact that in the victims line of work no documentary evidence is available; or (2) employed as a daily-
wage worker earning less than the minimum wage under current labor laws.

The testimonial evidence shows that Placido Agustin, Roberto Raagas, and Melencio Castro Jr. were
not self-employed or employed as daily-wage workers earning less than the minimum wage under the
labor laws existing at the time of their death. Hence, for lack of documentary proof, no indemnity for loss
of earning capacity can be given in these cases.

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 DAMAGES
Kinds of Damages

TEMPERATE DAMAGES APPLY IN CASES WHERE DEFINITE PROOF OF PECUNIARY LOSS CANNOT
BE OFFERED BUT THE COURT IS CONVINCED OF THE EXISTENCE OF SUCH LOSS

60. ARANETA v BANK OF AMERICA

G.R. No. L-25414; July 30, 1971
Makalintal, J.

FACTS:
This case stemmed from several instances where Araneta issued checks payable to case and drawn against
Bank of America (BOA) but were dishonored and stamped “Account closed” despite the sufficiency of the
drawer’s fund. Araneta thus sent a letter to BOA demanding damages in the sum of $20,000. The bank, while
admitting responsibility offered to pay only P2,000.

Araneta then filed a complaint against bank of America for damages totalling P120,000 composed Actual or
compensatory Damages – P30,000; Moral damages – P20,000; Temperate damages – P50,000; Exemplary
Damages – P10,000; Atty’s fees –P10,000. The Trial Court awarded all items prayed for, but CA eliminated the
award of compensatory and temperate damages and reduce moral damages to P8,000, exemplary damages to
P1,000 and atty’s fees to P1,000.

ISSUE:
Whether or not temperate damages can be awarded without proof of actual pecuniary loss?

HELD:
Yes. In rejecting the claim for temperate damages, the CA referred specifically to Araneta’s failure to prove “the
existence of a supposed contract for him to buy jewels at a profit,” in connection with which he issued the two
checks which were dishonored. This may be true with particular reference to the alleged loss in that particular
transaction. But it does not detract from the finding of the same court that actual damages have been suffered
such as the adverse reflection against the credit of Araneta with said banks. The Court noted that the financial
credit of a businessman is a prized and valuable asset, it being a significant part of the foundation of his business.
And it can hardly be possible that a customer’s check can be wrongfully refused payment without some
impeachment of his credit, which must in fact be an actual injury, though he cannot furnish distinct proof thereof.
The code commission in explaining Temperate damages under Art 2224 comments that temperate damages
apply in “cases where definite proof of pecuniary loss cannot be offered, although the court is convinced that
there is such loss.” As found by the CA, Araneta is a merchant of long standing and good reputation in the
Philippines. His claim for temperate damages is justified.

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 DAMAGES
Kinds of Damages

AWARD OF DAMAGES TO VICTIMS NOT BARRED BY STARE DECISIS AND CAN VARY DEPENDING ON
THEIR INDIVIDUAL CIRCUMSTANCES

61. Negros Navigation Co., Inc. v. Court of Appeals

G.R. No. 110398, 7 November 1997
J. Mendoza

FACTS:
In April of 1980, private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four special
cabin ticketsfor his wife, daughter, son and niece who were going to Bacolod City to attend a family reunion. The
ship sailed from the port of Manila on schedule. At about 10:30 in the evening of April 22, 1980, the Don Juan
collided off the Tablas Strait in Mindoro, with the M/T Tacloban City, an oil tanker owned by the Philippine National
Oil Company (PNOC) and the PNOC Shipping and Transport Corporation (PNOC/STC). As a result, the M/V
Don Juan sank. Several of her passengers perished in the sea tragedy. The bodies of some of the victims were
found and brought to shore, but the four members of private respondents’ families were never found.

Private respondents filed a complaint on July 16, 1980 in the Regional Trial Court of Manila, Branch 34, against
the Negros Navigation. It must be noted that prior to this case, a case was brought for the death of other
passengers. Said case is entitled Mecenas v. Intermediate Appellate Court .In that case it was found that although
the proximate cause of the mishap was the negligence of the crew of the M/Tacloban City, the crew of the Don
Juan was equally negligent as it found that the latter’s master, Capt. Rogelio Santisteban, was playing mahjong
at the time of collision, and the officer on watch, Senior Third Mate Rogelio De Vera, admitted that he failed to
call the attention of Santisteban to the imminent danger facing them. This Court found that Capt. Santisteban
and the crew of the M/VDon Juan failed to take steps to prevent the collision or at least delay the sinking of the
ship and supervise the abandoning of the ship. Petitioner Negros Navigation was found equally negligent in
tolerating the playing of mahjong by the shipcaptain and other crew members while on board the ship and failing
to keep the M/VDon Juan seaworthy so much so that the ship sank within 10 to 15 minutes of its impact with the
M/TTacloban City. The RTC relying on the earlier ruling in Mecina ruled in favor of the complainants and ordered
petitioner to pay for the damages.

ISSUE:
Whether or not the amount of damages awarded in the Mecenas ruling should be the same amount to be awarded
in this case?

HELD:
No. The Court held that in relations to award for damages, the principle of stare decisis does not apply in view of
differences in the personal circumstances of the victims. For that matter, differentiation would be justified even if
private respondents had joined the private respondents in the Mecenas case. The doctrine of stare decisis works
as a bar only against issues litigated in a previous case. Where the issue involved was not raised nor presented
to the court and not passed upon by the court in the previous case, the decision in the previous case is not stare
decisis of the question presently presented. The decision in the Mecenas case relates to damages for which
petitioner was liable to the claimants in that case. The Court further held that the Mecenas case cannot be a
basis for the award of the attorney’s fee noting that such award would naturally vary or differ in each case.

71
 DAMAGES
Kinds of Damages

THE COMPENSATION FOR LOST INCOME IS IN THE NATURE OF DAMAGES, AND AS SUCH REQUIRES
DUE PROOF OF THE DAMAGE SUFFERED

62. People v. Villanueva

G.R. No. 122746, January 29, 1999
Davide, Jr., C.J.

FACTS:
This is an appeal assailing the decision of the RTC finding accused Villanueva guilty beyond reasonable doubt
of murder and sentencing him to suffer reclusion perpetua and to pay death indemnity, actual damages, loss of
earning capacity, moral damages and costs of the suit.

Accused Mario Villanueva was charged with murder for shooting Joaquin Nacional with an unknown caliber
revolver hitting him at the back of his right ear. Adelfa alleged that she spent P32,000.00 for her husband's coffin
and P5,000.00 during the wake. Other expenses related to her husband's funeral were paid for by her mother-
in-law. Adelfa further testified that her husband earned about P2,500.00 a week from selling fish, and that
because of his death, she suffered grief and wounded feelings, which could not "be paid in terms of money."
Moreover, she also lost someone who could help her. The prosecution wanted to present Yolanda Nacional, the
victim's mother, to prove the amount spent for funeral, but the defense stipulated that the victim's heirs spent
P53,800.00 for the purpose.

ISSUE:
Is Adelfa, the wife of the victim, entitled to the loss of earning capacity of her husband?

HELD:
No, Adelfa is not entitled to the loss of earning capacity of her husband. As to the matter of lost income awarded
by the trial court in favor of the heirs of the victim. Although the award was not objected to by Mario, we feel the
same is unjustified, hence must be deleted. In fixing the award, the trial court relied on the unsubstantiated and
incomplete testimony of Adelfa Nacional that her husband helps her in selling fish, who earns P2500 a week.

The compensation for lost income is in the nature of damages, and as such requires due proof of the damage
suffered. For lost income due to death, there must be unbiased proof of the deceased's average income. Adelfa
gave only a self-serving, hence unreliable, statement of her husband's income. Also, the award for lost income
refers to the net income of the deceased, that is, his total income less his average expenses. In the instant case,
no proof of the victim's expenses was presented, thus there can be no reliable estimate of his lost income.

72
 DAMAGES
Kinds of Damages

TO BE HELD LIABLE FOR MORAL DAMAGES, THE CIVIL ACTION NEED NOT BE BASED ON THE
EXISTENCE OF A CRIME OF MALICIOUS PROSECUTION IN THE REVISED PENAL CODE

63. Ventura v. Bernabe

G.R. No. L-26760, April 30, 1971
Barredo, J.

FACTS:
This is an appeal from the order of the Court of First Instance dismissing on the ground that the complaint states
no cause of action , an action for damages based upon an alleged malicious prosecution.

Appellant Joaquina Ventura stood trial for the crime of falsification of a private document allegedly committed
against appellee Eusebio Bernabe. It was alleged that the appellant presented to appellee a supposed letter of
Cmdr. Calinawan, Jr. addressed to Bernabe asking for a loan and with the instruction to hand to her the money
for delivery to Cmdr. Calinawan which Bernabe did by issuing a check. Upon verification, it has been found out
that the letter above referred to was never and has never been made by Cmdr. Calinawan and that the signature
is not the signature of Cmdr. Calinawan). After trial, the appellant was aquitted. Subsequently appellant filed a
civil case against appellee Bernabe for moral, exemplary, actual damages by reason of appellee’s malicious and
unjustifiable filing of the criminal action. The filed a Motion to Dismiss alleging that the complaint states no cause
of action since no civil action for damages on account of malicious prosecution can be maintained unless the
court in acquitting the defendant of the criminal charge orders a criminal prosecution to be commenced against
the complaining witness for false prosecution.

ISSUE:
Is a civil action for damages on account of malicious prosecution dependent upon the existence of a crime for
malicious prosecution under the Revised Penal Code?

HELD:
No, civil action for damages on account of malicious prosecution is not dependent upon the existence of a crime
for malicious prosecution under the Revised Penal Code. To be sure, for the purposes of the present civil case,
it is of no moment that there is no such crime of malicious prosecution in the Revised Penal Code. The present
civil action need not be based on the existence of such a crime Article 2219 of the Civil Code which provides that
"moral damages may be recovered in the following cases: (8) Malicious prosecution" would more than sufficiently
serve as a basis for relief in court against a party who has maliciously caused another to baselessly and
unjustifiably undergo a criminal prosecution for an offense he knows the latter has not committed. Related
provisions like Article 21 and Article 2176 of the same code on torts or quasi-delict may also serve the purpose.
Thus, all that the aggrieved party in a case of malicious prosecution has to prove to merit the award of damages
is that he has been denounced or charged falsely of an offense by the defendant, that the latter knows that the
charge was false, that the said defendant acted with malice and, of course, the damages he has suffered.

The findings of the court that the "testimony of the accused is more credible" and that the testimony of said
accused that "Bernabe filed the instant case because of a series of misunderstanding that the said Bernabe had
with her husband, Maj. Ventura — was not even rebutted by the prosecution", indicates the appellee’ malicious
and unjustifiable filing of the criminal action, and that the exculpatory version of the accused was the true one.

73
 DAMAGES
Kinds of Damages

THE HEIRS OF A DECEASED PASSENGER MAY RECOVER MORAL DAMAGES FOR A BREACH OF
CONTRACT DESPITE THE ABSENCE OF FRAUD, MALICE AND BAD FAITH

64. Necesito, etc. v. Paras, et al.

G.R. No. L-10605; June 30, 1958
Reyes, J.B.L.,J.

FACTS:
This is an appeal assailing the order of the trial court in ruling that the accident was exclusively due to a fortuitous
event, dismissing both actions for damages.

Severina Garces and her one-year old son, Precillano Necesito, boarded Philippine Rabbit Bus Lines at Agno,
Pangasinan. After passing Mangatarem Pangasinan, it entered a wooden bridge, but the front wheels swerved
to the right. The driver lost control, and after wrecking the bridge's wooden rails, the truck fell on its right side into
a creek where water was breast deep. The mother Garces drowned and the son Precillano was injured, suffering
abrasions and fracture of the left femur. The money, wrist watch and cargo of vegetables were lost. The plaintiffs
filed two action for damages and attorney’s fees totalling over P85,000 against the carrier. The latter pleaded
that the accident was due to "engine or mechanical trouble" independent or beyond the control of the defendants
or of the driver.

ISSUE:
Can moral damages for breach of contract be recovered by the heirs of Garces despite the absence of fraud,
malice and bad faith?

HELD:
Yes, moral damages for breach of contract can be recovered by the heirs of Garces despite the absence of fraud,
malice and bad faith. The court held that the accident was not due to a fortuitous event, but was due to the
reduced strength of the steering knuckle of the vehicle caused by defects in casting it. The periodical visual
inspection of the steering knuckle as practiced by the carrier's agents did not measure up to the required legal
standard of "utmost diligence of very cautious persons" — "as far as human care and foresight can provide", and
therefore that the knuckle's failure cannot be considered a fortuitous event that exempts the carrier from
responsibility.

As to the damages suffered by the plaintiffs, we agree with appellee that no allowance may be made for moral
damages, since under Article 2220 of the new Civil Code, in case of suits for breach of contract, moral damages
are recoverable only where the defendant acted fraudulently or in bad faith, and there is none in the case before
us. As to exemplary damages, the carrier has not acted in a "wanton, fraudulent, reckless, oppressive or
malevolent manner" to warrant their award. Hence, the minor Precillano Necesito is entitled to an indemnity of
P5,000 for the abrasions and fracture of the femur. As for the death of Severina Garces who was 33 years old,
with seven minor children when she died, her heirs are obviously entitled to indemnity not only for the incidental
losses of property (cash, wrist watch and merchandise) worth P394 that she carried at the time of the accident
and for the burial expenses of P490, but also for the loss of her earnings (shown to average P120 a month) and
for the deprivation of her protection, guidance and company. In our judgment, an award of P15,000 would be
adequate.

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 DAMAGES
Kinds of Damages

THE TEMPERATE AND MODORATE DAMAGES CANNOT BE GRANTED WITH NOMINAL DAMAGES
SINCE THEY ARE INCOMPATIBLE WITH EACH OTHER.

65. CITYTRUST BANKING CORPORATION v INTERMEDIATE APPELLATE COURT

G.R. No. 84281 May 27, 1994
VITUG, J.

FACTS:
Depositor Emme Herrero, a business woman, filed complaint for damages against Citytrust Banking Corp. On
15 May 1980, Herrero deposited with the Burgos branch, Calamba City of said bank the amount of P31,500 to
cover 6 postdated checks she issued. When presented for encashment upon maturity, all the checks were
dishonored due to "insufficient funds."

Citytrust asserted that it was due to Herrero’s fault that the checks were dishonored. Instead of stating her correct
account number, i.e., 29000823, in her deposit slip, she inaccurately wrote 2900823. Citytrust contends that she
has the duty to use her account in accordance with bank rules to which she has contractually acceded. Among
such rules, contained in "brochures" governing current account deposits is the printed provision: “In making a
deposit . . . kindly insure accuracy in filing said deposit slip forms as we hold ourselves free of any liability for loss
due to an incorrect account number indicated in the deposit slip although the name of the depositor is correctly
written.”

CA reversed the RTC decision, in favor of Herrero. CA ordered the bank to pay Herrero nominal damages of
P2,000, temperate and moderate damages of P5,000, and attorney's fees of P4,000.

ISSUE:
Is the award of damages in favor of Herrero proper? Is the bank liable?

HELD:
YES. Citytrust is liable and not free from blame for the fiasco. Bank teller should not have accepted plaintiff's
deposit without correcting the account number on the deposit slip which, obviously, was erroneous because it
contained only 7 digits instead of 8. Herrero’s complete name also appears in bold letters thereon. The teller
should not have fed her deposit slip to the computer knowing that her account number was erroneous and would
be rejected by the computer. It was easily detectible and should be part of the training and standard operating
procedure of the bank's employees.

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 every case, the depositor expects the bank to treat his account with 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.

HOWEVER, IT IS WRONG TO AWARD, ALONG WITH NOMINAL DAMAGES, TEMPERATE OR MODERATE

DAMAGES. THE TWO AWARDS ARE INCOMPATIBLE AND CANNOT BE GRANTED CONCURRENTLY.
Nominal damages are given in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him (Art. 2221, New Civil Code). Temperate or moderate damages, which are more than nominal but
less than compensatory damages, on the other hand, may be recovered when the court finds that some pecuniary
loss has been suffered but its amount cannot, from the nature of the case, be proved with reasonable certainty
(Art. 2224, New Civil Code). Appealed decision is MODIFIED by deleting the award of temperate or moderate
damages.

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 DAMAGES
Kinds of Damages

66. LOURDES MUNSAYAC v BENEDICTA DE LARA and COURT OF APPEALS

G.R. No. L-2115, June 26, 1968
MAKALINTAL, J.

FACTS:
Munsayac suffered injuries riding as passenger on a jeepney owned and operated by De Lara; hence she filed
an action for recovery of damages. RTC Rizal found the driver recklessly negligent; driving at an excessive speed
despite the road being under repair and heedless of passengers' pleas that he go more slowly. RTC awarded
compensatory damages for actual expenses incurred and loss of income. De Lara was also ordered to pay
P1,000 exemplary damages and P500 attorney's fees.

Defendant appealed to CA regarding these last two items, while the CA affirmed the RTC. The courts a quo
justified the award for damages: Defendant's admission that the accident happened and the plaintiff's extensive
injuries as a result thereof, despite which the defendant failed, or even refused, to placate the sufferings of
plaintiff, necessitating the filing of this action, entitled plaintiff to exemplary damages — to set an example to
others — and attorney's fees.

ISSUE:
Must the act referred to in NCC 2232 be coetaneous with and characterize the breach of the contract on which
the suit is based, or can it be subsequent to such breach and therefore have no causal relation thereto (i.e.,
herein defendant's failure to placate the sufferings of the plaintiff)?

HELD:
YES. Civil Code provides that "exemplary or corrective damages are imposed, by way of example or correction
for the public good" (Act 2229); and that in contracts "the Court may award exemplary damages if the defendant
acted in wanton, fraudulent, reckless, oppressive or malevolent manner" (Art. 2232).

Rotea vs. Halili provides: A principal or master can be held liable for exemplary or punitive damages based upon
the wrongful act of his agent or servant only where he participated in the doing of such wrongful act or has
previously authorized or subsequently ratified it with full knowledge of the facts. Since damages are penal in
character, the motive authorizing their infliction will not be imputed by presumption to the principal when
the act is committed by an agent or servant, and that since they are awarded not by way of compensation,
but as a warning to others, they can only be awarded against one who has participated in the offense,
and the principal therefore cannot be held liable for them merely by reason of wanton, oppressive or
malicious intent on the part of the agent.

It is difficult to conceive how the defendant in a breach of contract case could be held to have acted in a wanton,
fraudulent, reckless, oppressive or violent manner within the meaning of Article 2232 for something he did or did
not do after the breach, which had no causal connection therewith. The law does not contemplate a vicarious
liability on his part: the breach is his as party to the contract, and so if he is to be held liable at all for exemplary
damages by reason of the wrongful act of his agent, it must be shown that he had previously authorized or
knowingly ratified it thereafter, in effect making him a co-participant. Otherwise there would be practically no
difference between their liability for exemplary damages and their liability for compensatory damages, which
needs no proof of their negligence since the suit is predicated on breach of contract and due diligence on their
part does not constitute a defense.

76
 DAMAGES
Kinds of Damages

FILING A COMPLAINT, NOT DONE MALICIOUSLY OR IN A WANTON MANNER, DOES NOT ENTITLE THE
OPPONENT TO MORAL AND EXEMPLARY DAMAGES.

67. PHILIPPINE NATIONAL BANK v COURT OF APPEALS, NAPOLEON NAVARO, PATRICIA CRUZ
VICENTE B. MEDINA and LETICIA LOPEZ
G.R. No. L-45770; March 30, 1988
FERNAN, J.

FACTS:
Napoleon Navarro, branch accountant of PNB Cabanatuan City, misappropriated depositors’ money totaling
P28,683.77. PNB filed a case against him for recovery of the defalcated sums, with prayer for a writ of preliminary
attachment against Navarro’s properties.

Pending issuance of the writ, Navarro and his wife executed a Deed of Sale of Real Property and Dwelling House
in favor of spouses Vicente Medina and Leticia Lopez over properties situated in Cabanatuan City. Sps Medina
and Lopez caused the registration of the a new TCT under their names.

PNB filed a complaint for annulment of the Deed of Sale. Sps Medina and Lopez alleged good faith in
the acquisition of the property; and filed counterclaim seeking attorney’s fees and damages—claiming that the
PNB complaint was without legal factual basis and that it besmirched their reputation.

CA ruled that PNB did not act maliciously and in a wanton manner in filing the complaint, but no doubt that the
sps Medina and Lopez suffered mental anguish for having been made defendants in said case. CA awarded Php
10,000 moral and exemplary damages and Php 5,000 in attorney’s fees.

ISSUE:
Is the award of moral damages and attorney’s fees proper in this case?

HELD:
NO. Article 2217 of the Civil Code recognizes that moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar
injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate
result of the defendant's wrongful act or omission.

Article 2229 of the Civil Code provides that exemplary damages may be imposed by way of example or correction
for the public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved,
although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the Court
may consider the question of whether or not exemplary damages should be awarded.

While no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of
indemnity being left to the discretion of the court, it is nevertheless essential that the claimant satisfactorily proves
the existence of the factual basis of the damages and its causal relation to defendant's acts. Moral damages are
in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a
penalty on the wrongdoer. Moral damages, in other words, are not corrective or exemplary damages.

In Boysaw v. Interphil Promotions, Inc. we held: In order that a person may be made liable to the payment
of moral damages, the law requires that his act be wrongful. The adverse result of an action does not per
se make the act wrongful and subject the actor to the payment of moral damages. The law could not have
meant to impose a penalty on the right to litigate such right is so precious that moral damages may not
be charged on those who may exercise it erroneously.

We find the conclusion of CA that filing by PNB was not made maliciously and in a wanton manner—
therefore inconsistent with the CA’s award of moral and exemplary damages. In the absence of malice
and bad faith, the mental anguish suffered by respondents spouses Medina and Lopez for having been
made defendants in the Civil Case is not that kind of anxiety which would warrant the award of moral

77
damages. The worries and anxieties suffered by respondents spouses Medina and Lopez were only such
as are usually, caused to a party haled into court as a defendant in a litigation. Therefore, there is no
sufficient justification for the award of moral damages, more so, exemplary damages.

PNB is also not liable for attorney's fees. It is not sound public policy to place a penalty on the right to
litigate. To compel the defeated party to pay the fees of counsel for his successful opponent would throw
wide open the door of temptation to the opposing party and his counsel to swell the fees to undue
proportions. To sentence litigant to pay his adversary's lawyer's fees would be imposing a penalty on
his right to litigate. Even under the New Civil Code 11 a litigant would not be entitled to recover the fees
paid to his attorney as damages where no bad faith on the part of his adversary was shown. Needless to
say, award of attorney's fees is the exception rather than the general rule.

78
 DAMAGES
Kinds of Damages

AWARD OF ATTORNEY’S FEES MUST BE STATED IN THE TEXT OF COURT’S DECISION AND NOT IN
DISPOSITIVE PORTION FOR IT TO BE GRANTED

68. JOSE ABROGAR and JUANA DESEAR v INTERMEDIATE APPELLATE COURT,

SOCORRO DESEAR and BRIGIDA DESEAR
G.R. No. L-67970; January 15, 1988
SARMIENTO, J.

FACTS:
Respondents Socorro and Brigida Deasar failed to satisfy a final and executory judgment amounting to P2,553
in a previous civil case where Abrogar is the plaintiffs and the Deasars, defendants. For such failure to pay, two
parcels of land belonging to respondents with a combined market value of P75,000 were levied on execution.
The lis mota of the case was whether the public auction was validly postponed. An ancillary issue is the award
by the IAC of attorney’s fees (P2,000) in favor of respondents; despite the absence of any prayer and legal bases
therefor.

ISSUE:
Was the award of attorney’s fees proper, despite the absence of any prayer and legal bases therefor?

HELD:
NO. There is neither an allegation nor evidence to support the award of P2,000 by way of attorney's fees in favor
of private respondents. The complaint does not pray for attorney's fees. Even the transcript of stenographic notes
in the trial does not contain any testimony to support an award of attorney's fees.

As succinctly put, the claim for attorney's fees was neither pleaded nor proved! The exercise of judicial discretion
in the award of attorney's fees under Article 2208 (ii) of the New Civil Code demands a factual, legal, and
equitable justification. Without such justification, the award is a conclusion without a premise, its basis being
improperly left to speculation and conjecture.

Attorney's fees are recoverable not as a matter of right. It is the import of Article 2208 that the award of attorney's
fees is an exception and that the decision must contain an express finding of fact to bring the case within the
exception and justify the grant of attorney's fees. "Just and equitable" under paragraph 11, Article 2208, New
Civil Code is not a matter of feelings, but demonstration. The reason for the award of attorney's fees must be
stated in the text of the court's decision, otherwise, if it is stated only in the dispositive portion of the decision, the
same must be disallowed on appeal.

In the light of all the foregoing, the award of attorney's fees in favor of the private respondents in the case before
us has no basis. Hence, attorney's fees must be disallowed.

79
 DAMAGES
Kinds of Damages

DAMAGES MUST BE BASED ON EVIDENCE PRESENTED IN COURT AND NOT BASED ON THE PARTIES’
MEMORANDA

69. SPOUSES TEOFILO and SIMEONA RAYOS, and GEORGE RAYOS, petitioners, vs. DONATO REYES,
SATURNINO REYES, TOMASA R. BUSTAMANTE and TORIBIA R. CAMELO, Respondents.
G.R. No. 150913: February 20, 2003
BELLOSILLO, J.:

FACTS: 3 parcels of unregistered land in Pangasinan were formerly owned by the spouses Tazal who on 1
September 1957 sold them to respondents’ predecessor-in-interest, Reyes, with right to repurchase within two 2
years from date thereof by paying to the vendee the purchase price and all expenses incident to their
reconveyance. After the sale the vendee a retro took physical possession of the properties and paid the taxes
thereon. The otherwise inconsequential sale became controversial when 2 of the 3 parcels were again sold by
Tazal in favor of petitioners’ predecessor-in-interest Rayos without first availing of his right to repurchase the
properties. In the meantime, the conventional right of redemption in favor of spouses Tazal expired without the
right being exercised by either the Tazal spouses or the vendee Rayos.

On 9 May 1960 Francisco Tazal filed a complaint with the CFI Reyes for the declaration of the 1 September 1957
transaction as a contract of equitable mortgage. The trial court in the Civil Case rejected the contention of Tazal
but held that Tazal could nonetheless redeem the three (3) parcels of land within thirty (30) days from finality of
judgment by paying to Reyes the purchase price and all expenses to execute the reconveyance. Reyes appealed
the Decision to the CA which in turn elevated the appeal to this Court since only questions of law were involved.
Respondents filed a complaint for damages and recovery of ownership and possession of the 3 parcels of land
in dispute against herein petitioner-spouses Rayos and the administrator thereof before the RTC. It was
respondents’ theory that neither petitioners nor their predecessors-in-interest Tazal and Rayos repurchased the
properties before buying them or when the judgment in the Civil Case became final and executory, hence the
sale of the three (3) parcels of land to petitioner-spouses did not transfer ownership thereof to them.

ISSUE:
Are the respondents entitled to damages prayed for in the case at bar?

HELD:
No, respondents failed to prove their entitlement to actual damages for litigation expenses of P20,000.00,
attorneys fees of P10,000.00 and exemplary damages of P50,000.00 plus costs. No evidence to prove actual
damages was offered in Civil Case No. A-2032 since the parties therein submitted the case for decision on the
basis of their respective memoranda, hence no actual damages can be awarded.

In the same manner, there is no clear and convincing showing that petitioners acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner to warrant the imposition of exemplary damages in respondents
favor. In any event, exemplary damages cannot be adjudicated in the instant case since there is no award of
moral, temperate or compensatory damages.

80
 DAMAGES
Kinds of Damages

THE AMOUNT OF EXEMPLARY DAMAGES NEED NOT BE PROVEN NOR ALLEGED BECAUSE IT IS
DEPENDENT UPON THE COURT’S DISCRETION

70. CONRADO V. SINGSON, CAROLINA CRISOSTOMO, and FLORENTINO DE LIMA, petitioner-appellant,

vs. CRISANTO ARAGON and MIGUEL L. LORZA, respondent-appellees.
G.R. No. L-5164: January 27, 1953
BAUTISTA ANGELO, J.:

FACTS:
On January 24, 1951, Miguel L. Lorza filed in the complaint in the Municipal Court of Manila against Conrado V.
Singson, Carolina Crisostomo and Florentino de Lima, petitioners herein, to recover the sum of P1,321.80 as
actual damages, and P500 as attorney's fees, and praying at the same time that he be awarded such exemplary
damages as the court may deem proper, plus the costs of the action. The complaint was amended following a
motion for bills of particulars filed by petitioners by itemizing the claim for actual damages in the amount of
P1,321.80.

As no specification has been made with regards to the exemplary damages prayed for, petitioner's moved for
such specification, but the same was denied. Petitioners filed a motion to dismiss contending that the court has
no jurisdiction of the case because it involves a prayer for an unspecified amount of exemplary damages which
is beyond its limited jurisdiction. The court denied both motions and so petitioners sued out the present petition
for certiorari.

ISSUE:
Is the amount of Exemplary Damages need to be alleged in the complaint?

HELD:
No, from the above legal provisions it appears that exemplary damages may be imposed by way of example or
correction only in addition, among others, to compensatory damages, but they could not be recovered as a matter
of right, their determination depending upon the discretion of the court. It further appears that the amount of
exemplary damages need not be proven, because its determination depends upon the amount of compensatory
damages that may be awarded to the claimant. If the amount of exemplary damages need not be proven, it need
not also be alleged, and the reason is obvious because it is merely incidental or dependent upon what the court
may award as compensatory damages.

81
 DAMAGES
Kinds of Damages

EXEMPLARY DAMAGES MAYBE GRANTED EVEN IF NOT ALLEGED IF PROVEN.

71. PEOPLE OF THE PHILIPPINES, vs. RODERICK LEGASPI,
G.R. No. 137283. February 17, 2003
Carpio-Morales, J.

FACTS:
On July 3, 1997, at around 6:00 p.m., accused-appellant, together with his father Rogelio and two others, had a
drinking spree at their family house in Panumpunan, Tarlac, Tarlac. At around 8:00 p.m., he asked the more than
6-year old Cristina Castaneda, the niece of his father's common law wife Brigida Pagsibagan, to go out with him
for a few minutes. Cristina, who was wearing a pair of short pants and a shirt, obliged and the two left the house.
As two hours had elapsed and accused-appellant and Cristina had not yet returned, Brigida started looking for
them. She later went to the barangay hall to report the matter. About past 11:00 p.m. also of July 3, 1997,
accused-appellant and Cristina returned home. When Brigida asked them where they came from, Cristina replied
that they came from the river, about a kilometer away from their house. And when she was asked what accused-
appellant did to her, Cristina said that he kissed her, boxed the left portion of her stomach, and let her drink dirty
water. While Cristina did not say that she was sexually abused, given her appearance, Brigida brought her and
accused-appellant, who tried to 􏰂ee but was overtaken, to the barangay hall.

The accused-appellant was charged for qualified rape of the six-year old Cristina although Villanueva declared
that accused-appellant "admitted that he was raping Cristina but he was not able to insert his penis." Later, he
was convicted and sentenced “sentences you to die by lethal injection and to indemnify the offended party in the
amount of P150,000.00 as consequential, exemplary and moral damages.” He was sentenced to suffer the
penalty of death and, hence, this automatic review.

ISSUE:
Is the grant of exemplary damages albeit failure to allege the aggravating circumstances tenable

HELD:
YES. The failure to allege the aggravating circumstances notwithstanding, the proven presence thereof is still
material in the determination of exemplary damages to be awarded to private complainant under Article 2230 of
the Civil Code which provides: Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability
may be imposed when the crime was committed with one or more aggravating circumstances. Such damages
are separate and distinct from 􏰂nes and shall be paid to the offended party. As held in People v. Catubig, the
retroactive application of procedural rules cannot adversely affect the rights of the private offended party that
have become vested prior to the effectivity thereof.

82
 DAMAGES
Kinds of Damages

ACTUAL DAMAGES CANNOT BE PRESUMED, BUT MUST BE DULY PROVED

72. Dee Hua Ling Electrical Equipment Corp. v. Romeo Reyes, et.al.
G.R. No. 72182, November 25, 1986
Narvasa J.

FACTS:
Romeo Reyes operated "the once thriving and prosperous Excelite Electronic Center in San Miguel, Bulacan.
But from September 1981, he began "receiving complaints of irate and dissatisfied customers who complained
over the defective repairs done on their television and stereo units; Although he repeated the repair jobs over
and over, and despite his best efforts, repairs remained defective and he lost his customer patronage. Later, he
discovered that "the root cause of all these troubles" was the "low grade electronic filter capacitor(s) which he is
buying from petitioner.He "opened one of the capacitors discovered the actual label of 22 micro farad was
superimposed by a fake label making it appear to be 2200 micro farad. He filed a case for damages. The findings
of fact were based solely on the testimony of private respondent and his wife. No evidence was presented in
behalf of petitioner because it was declared in default for failure of its counsel or other representative to appear

Court of First Instance sentenced petitioner to pay to private respondents P50,000.00 as actual damages;
P50,000.00 as moral damages; P50,000.00 as exemplary damages; and P10,000.00 as attomey's fees, as well
as to pay treble Cost. The Intermediate Appellate Court, on appeal, affirmed petitioner's liability but reduced the
award for moral and exemplary damages to P10,000.00 and P5,000.00, respectively.

ISSUE:
Is the award of damages made to rest on nothing more substantial than the sworn declarations of the private
respondents proper

HELD:
NO. The award of damages to private respondent must, therefore, be struck down for want of adequate
foundation. Actual or compensatory damages cannot be presumed, but must be duly proved, and proved with a
reasonable degree of certainty. A court cannot rely on speculation, conjecture or guesswork as to the fact and
amount of damages, but must depend upon competent proof that they have suffered and on evidence of the
actual amount thereof. If the proof is flimsy and unsubstantial, no damages will be awarded.

83
 DAMAGES
Kinds of Damages

NO EXEMPLARY DAMAGES, IF NO AGGAVATING CIRCUMSTANCE

73. PEOPLE OF THE PHILIPPINES vs. PAULINO BUAYABAN, LARRY BETACHE, MARCIANO TOÑACAO
(at large), YOYONG BUAYABAN (at large) and PEDRO TUMULAK,
PEDRO TUMULAK
G.R. No. 112459, March 28, 2003
Corona, J.

FACTS:
Pedro Tumulak, together with his co-accused, Paulino Buayaban and Larry Betache entered the house of
Dioscoro Abonales. Pedro Tumulak and Paulino Buayaban immediately poked their guns at Rolando Verdida
who was sitting near the balcony with his fiancee Elizabeth Abonales, the daughter of Dioscoro. They were
ordered to lie flat on the floor. Marciano Toñacao and Yoyong Buayaban then proceeded to the room where
Dioscoro was sleeping. Yoyong kicked Dioscoro in the face and when the latter stood up, Marciano shot him in
the neck. Dioscoro died instantly. Later, trial ensued and consequently, they were found guilty beyond reasonable
doubt of the crime of robbery with homicide and sentencing them: ACCORDINGLY, the court finds the accused
guilty beyond reasonable doubt of the crime of robbery with homicide, and hereby sentences Paulino Buayaban
and Pedro Tumulak each to suffer imprisonment of reclusion perpetua and Larry Betache to suffer an
indeterminate penalty of 6 yrs. and 1 day of prision mayor, as minimum, to 12 yrs and 1 day of reclusion temporal,
as maximum, shall return the sum of P30,000.00 to the legal heirs of Dioscoro Abonales and P10,000.00 to
Rolando Verdida and shall indemnify the said legal heirs the sum of P50,000.00 for the death of Dioscoro
Abonales, P20,000.00 as moral damages and P20,000 as exemplary damages.

ISSUE:
Are the damages granted by the court in the criminal case of Robbery with homicide,

HELD:
As to the civil liability of the appellant, we affirm the award of damages by the trial court except the grant of
exemplary damages in the amount of P20,000 which we hereby delete and the amount of moral damages which
we hereby increase from P20,000 to P50,000.

The award of exemplary damages is deleted because the crime was not committed with any aggravating
circumstance. Under Article 2230 of the Civil Code, exemplary damages can only be awarded in criminal actions
if the crime was committed with aggravating circumstances.

As to the award of moral damages which the trial court properly awarded to the wife and family of Dioscoro
Abonales for the pain and anguish they suffered, we increase it to P50,000 in conformity with existing
jurisprudence.

The trial court did not award actual damages for the funeral and burial of the victim because no receipts were
presented by the prosecution. This is correct. However, we recently ruled in the case People vs. Abrazaldo, G.R.
No. 124392, February 4, 2003, that temperate damages in the amount of P25,000 shall be awarded where no
documentary evidence of actual damages (e.g. receipts of funeral and burial expenses) were presented in the
trial court because it is reasonable to presume that, when death occurs, the family of the victim necessarily
incurred expenses for his wake and funeral. Accordingly, in the present case, in addition to the damages already
awarded by the trial court, we add temperate damages in the amount of P25,000.

84
 DAMAGES
Kinds of Damages

A STIPULATION ALLOWING THE CONFISCATION OF THE CONTRACTOR’S PERFORMANCE BOND

PARTAKES OF THE NATURE OF A PENALTY CLAUSE

74. J Plus Asia Development Corporation vs. Utility Assurance Corporation

G.R. No. 199650; June 26, 2013
Villarama, Jr., J.

FACTS:
J Plus Asia and Martin Mabunay, entered into a Construction Agreement whereby Mabunay undertook to build
the former’s Condominium/hotel in Boracay. The project was to be completed within 1 year from the signing of
the notice of award and notice to proceed and the receipt of 20% down payment or P8.4 milllion. The down
payment was fully paid on January 14, 2008. The completion date of the project was December 2008. Mabunay
also submitted the required Performance Bond issued by Utility Assurance Corporation (UTASSCO) in the
amount equivalent to 20% down payment or P8.4 million.

Mabunay commenced work on January 7, 2008. However, as evidenced by the Joint Construction Evaluation
Result and Status signed by both parties, the project was only 31.39 % complete as of November 14, 2008. Thus,
J Plus Asia terminated the contract and sent demand letters to Mabunay and the surety. J Plus Asia filed a
request for arbitration before the Construction Industry Arbitration Commission (CIAC) and prayed that Mabunay
and the surety be ordered to pay 8.9 Million as liquidated damages and 2.3 Million to the unrecouped down
payment or overpayment made to Mabunay.

Mabunay’s answer alleged that the delay was caused by retrofitting and other revision works ordered by Joo Han
Lee, the Chairman of J Plus Asia. The CIAC ruled in favor of J Plus Asia. The CA ruled that Mabunay has not
yet incurred delay and that obligation was not yet demandable because the contract was terminated prior to
completion date.

ISSUE:
Whether or not J Plus Asia is entitled to liquidated damages.

HELD:
Yes. A stipulation for liquidated damages is attached to an obligation in order to ensure performance and has a
double function: (1) to provide for liquidated damages, and (2) to strengthen the coercive force of the obligation
by the threat of greater responsibility in the event of breach. The amount agreed upon answers for damages
suffered by the owner due to delays in the completion of the project. As a precondition to such award, however,
there must be proof of the fact of delay in the performance of the obligation.

In this case, Mabunay was clearly in default considering the dismal percentage of his accomplishment (32.38%)
of the work he contracted on account of delays in executing the scheduled work activities and repeated failure to
provide sufficient manpower to expedite construction works. The contractor’s default pertains to his failure to
substantially perform the work on account of tremendous delays in executing the scheduled work activities.
Where a party to a building construction contract fails to comply with the duty imposed by the terms of the
contract, a breach results for which an action may be maintained to recover the damages sustained thereby, and
of course, a breach occurs where the contractor inexcusably fails to perform substantially in accordance with the
terms of the contract.

The plain and unambiguous terms of the Construction Agreement authorize petitioner to confiscate the
Performance Bond to answer for all kinds of damages it may suffer as a result of the contractor’s failure to
complete the building. Having elected to terminate the contract and expel the contractor from the project site
under Article 13 of the said Agreement, petitioner is clearly entitled to the proceeds of the bond as indemnification
for damages it sustained due to the breach committed by Mabunay. Such stipulation allowing the confiscation of

85
the contractor’s performance bond partakes of the nature of a penalty clause. A penalty clause, expressly
recognized by law, is an accessory undertaking to assume greater liability on the part of the obligor in case of
breach of an obligation. It functions to strengthen the coercive force of obligation and to provide, in effect, for
what could be the liquidated damages resulting from such a breach. The obligor would then be bound to pay the
stipulated indemnity without the necessity of proof on the existence and on the measure of damages caused by
the breach. It is well-settled that so long as such stipulation does not contravene law, morals, or public order, it
is strictly binding upon the obligor.

86
 DAMAGES
In Case of Death

THE AMOUNT OF THE AWARD OF COMPENSATORY DAMAGES FOR DEATH CAUSED BY CRIME OR
QUASI-DELICT SHOULD BE P12,000.00

75. The People of the Philippines vs. Getulio Pantoja

G.R. No. L-18793; October 11, 1968
Capistrano, J.

FACTS:
Late in the night of June 28, 1957, in the Barrio of Malinao, Atimonan, Quezon, a group of young men serenaded
the house where Estelita Erotes lived. When Wenceslao Hernandez was seated beside Estelita, an uninvited
Philippine Army Sergeant, Getulio Pantoja, came up and asked Hernandez to allow him to sit beside Estelita but
Hernandez refused the request. Pantoja immediately left, went to his camp, and got a rifle. Pantoja followed the
group and when they turned their heads back they saw Pantoja raise the garand rifle and aim at them. Pantoja
fired two shots in rapid succession which resulted to the death of Angel Marasigan and Wenceslao Hernandez.

ISSUE:
Whether or not the award of compensatory damages in the amout of P6,000 is proper.

HELD:
No. That part of the judgment below awarding compensatory damages in the amounts of P6,000 to the heirs of
Angel Marasigan and P6,000 to the heirs of Wenceslao Hernandez should be modified. In 1950, when the New
Civil Code took effect, the minimum amount of compensatory damages for death caused by a crime or quasi-
delict was fixed in Article 2206 of the Code at P3,000. The article repealed by implication Commonwealth Act
No.284. Hence, from the time the New Civil Code took effect, the Courts could properly have awarded P9,000
as compensatory damages for death caused by a crime or quasi-delict. It is common knowledge that from 1948
to the present (1968), due to economic circumstances beyond governmental control, the purchasing power of
the Philippine peso has declined further such that the rate of exchange now in the free market is U.S.$1.00 to
almost P4.00 Philippine pesos. This means that the present purchasing power of the Philippine peso is one-
fourth of its pre-war purchasing power. We are, therefore, of the considered opinion that the amount of award of
compensatory damages for death caused by a crime or quasi-delict should now be P12,000.

Parenthetically, we should point out that, in proper cases, besides compensatory damages in the sum of P12,000,
the courts may also award additional sums as further compensatory damages for loss of earnings and for
support. The courts may likewise award additional sums as moral damages and as exemplary damages. (Arts.
2206 and 2230, New Civil Code).

87
 DAMAGES
In Case of Death

THE AWARD OF DEATH INDEMNITY IS P50,000

76. People of the Philippines v. Gerardo Sazon

G.R. No. 89684, September 18, 1990
Regalado, J.:

FACTS:
Ernesto Romualdez was accosted by appellant for allegedly circulating the rumor that appellant and his
companions were engaged in stealing. Upon confrontation, appellant boxed Romualdez which caused the latter
to fall. Wilfredo Longo, who was then present at the scene, approached and helped the fallen Romualdez and
pushed appellant away. Two days later, appellant and his cousin, Cornelio Altejos, saw Longno passed by.
Thereupon, appellant and Altejos followed Longno. Thereafter, appellant accosted and pointed a gun at Longno,
saying, "What are you going to do?". Longno then faced appellant and said, "Brod, just shoot." Apparently irked
by the response, appellant fired the gun, hitting Longno in the left forearm. Appellant and Longno grappled for
the gun. It was while the two were thus struggling that Altejos stabbed Longno in the chest, after which both
appellant and Altejos ran away. Eventually, Longno died. Appellant, on the other hand, admitted having shot
Longno but pleaded self-defense.

After trial, appellant was found guilty and sentenced to serve the penalty of reclusion perpetua. He was further
ordered to pay the heirs of the deceased the amount of P16,628.40 representing hospital bills, expenses for the
coffin, tomb, wake and attorney's fees, and P30,000.00 as indemnity for the death of the victim.

ISSUE:
Was the award of the death indemnity in the amount of 30,000 proper?

HELD:
No, the award of death indemnity in the amount of P30,000.00 was not proper. The judgment of the trial court
was, thus, modified. Accused-appellant Gerardo Sazon is declared guilty beyond reasonable doubt of the crime
of homicide and is hereby sentenced to suffer the indeterminate penalty of 8 years and 1 day of prision mayor to
14 years, 8 months and 1 day of reclusion temporal.

The award by the lower court of the items of civil liability to be paid by accused-appellant to the heirs of the
deceased is also modified by disallowing the grant of attorney's fees for lack of basis, and increasing the death
indemnity to P50,000.00 in accordance with the policy adopted by the Court en banc on August 30,1990.

88
 DAMAGES
In Case of Death

INDEMNITIES FOR LOSS OF EARNING CAPACITY OF THE DECEASED AND FOR MORAL DAMAGES
ARE RECOVERABLE SEPARATELY FROM AND IN ADDITION TO THE FIXED SUM

77. Heirs of Castro v. Bustos

G.R. No. L-25913, February 29, 1969
Barredo, J.

FACTS:
This is an appeal from the Decision of the Court of Appeals, praying for its reversal and, thus, reinstating the
original decision be affirmed in toto regarding the award of indemnity and damages.

Respondent Apolonio Bustos was charged in the CFI – Pampanga with the crime of murder for the killing of
Raymundo Castro, whose heirs are now the petitioners. In finding Bustos guilty for the said charge, two mitigating
circumstances were credited to him: passion or obfuscation, and voluntary surrender. He is sentenced to a prison
term of 2 years, 4 months, and 1 day to 8 years and 1 day. He is also ordered to pay P6,000.00, without prejudice
to any amount he will receive from the GSIS for his 26 year service as a public school teacher. Both Bustos and
Castro’s heirs appealed to the decision to the CA; for Bustos, to be acquitted, and in the case of Castro’s heirs,
to order Bustos to pay them P50,764.00 as indemnity and damages. The CA initially ruled to uphold the conviction
with the modification of appreciating the mitigating circumstance of vindication of a grave offense, instead of
obfuscation. The appellate court also ruled that the award of P6,000.00 indemnity ordered by the trial court as
well as the P13,380.00 to compensate the decdent’s loss of earning, plus another P6,000.00 as moral damages,
all of which will be given to the petitioners. However, upon motion of the respondent, the CA amended its original
decision; it ruled that the P6,000.00 moral damages and the P13,380.00 it originally awarded be eliminated.
Hence, this appeal.

ISSUE:
Was it proper for the CA to eliminate the following sums representing the moral damages and decedent’s loss of
earnings?

HELD:
No, it was improper for the CA to eliminate the following sums representing the moral damages and decedent’s
loss of earnings. When death occurs as a result of a crime, the heirs of the deceased are entitled to the following
items of damages: (1) as indemnity for the death of the victim of the offense — P12,000.00; (2) as indemnity for
loss of earning capacity of the deceased; (3) as moral damages for mental anguish; (4) as exemplary damages;
(5) as attorney's fees and expresses of litigation; (6) interests in the proper cases. It must be emphasized that
the indemnities for loss of earning capacity of the deceased and for moral damages are recoverable separately
from and in addition to the fixed sum of P12,000.00 corresponding to the indemnity for the sole fact of death, and
that these damages may, however, be respectively increased or lessened according to the mitigating or
aggravating circumstances, except items 1 and 4 above, for obvious reasons. In the light of the foregoing, it is
clear that the CA erred in eliminating in its amended Decision, the items of moral damages and compensation
for loss of earning capacity of the deceased. On the basis of the facts not questioned by respondent, they are
entitled only to the P6,000.00 as moral damages and the P13,380.00 as compensatory damages for the loss of
earning capacity of the deceased awarded in the original decision of the CA in addition, of course, to the indemnity
for death fixed also by said court.

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 DAMAGES
In Case of Death

SIBLINGS NOT ENTITLED TO MORAL DAMAGES

78. Receiver for North Negros Sugar Co. v. Ybañez

G.R. No. L-22183, August 30, 1968
Zaldivar, J.

FACTS:
A Petition for Review was filed to review the decision of the CA against the appellees, North Negros Sugar Co.,
Primitivo Gustillo, and Loreto Perez.

Plaintiff-appellants Pedro and Rosaio Ybañez are the immediate heirs of Cesar Ybañez, who died as a result of
a car accident involving him, his driver Gil Dominguez, and Train No. 5 owned by North Negros in the railroad
intersection in Hacienda Santa Teresa in Manapla, Negros Occidental as the car was on its way to Cadiz. A
criminal case for double homicide and serious physical injuries through reckless imprudence was commenced
against Dominguez, the operator and brakeman of the train. The offended parties reserved their right to institute
separate civil actions for damages. All the accused, however, were acquitted in the criminal case. A civil action
for culpa aquiliana was thereafter filed against same defendants along with North Negros as their employer to
recover damages. As a result of the pre-trial, defendants filed a motion for summary judgment which was granted.
On appeal, the CA reversed the trial court ruling, holding North Negros liable for the death of Cesar Ybañez,
ordering them to pay Pedro damages consisting of compensatory damages, death indemnity, funeral expenses,
moral damages, and attorney’s fees.

In the present petition, North Negros questioned the correctness of the decision of the CA citing par. 3 of Article
2206 of the Civil Code, that Pedro and Rosario, the brother and sister of deceased Cesar Ybañez, are not among
those entitled to receive moral damages under the law. Pedro, on the other hand, contends that the law applicable
in this case in the old Civil Code because the accident happened in 1937 and the case was instituted in 1940.

ISSUE:
Is Pedro Ybañez, brother of the deceased, entitled to receive the award of moral damages?

HELD:
No, Pedro is not entitled to receive the award of moral damages. Article 2257 of the new Civil Code, one of the
transitional provisions, provides: “Provisions of this Code which attach a civil sanction or penalty or a deprivation
of rights to acts or omissions which were not penalized by the former laws, are not applicable to those who, when
said laws were in force, may have executed the act or incurred in the omission forbidden or condemned by this
Code. If the fault is also punished by the previous legislation, the less severe sanction shall be applied.” It may
well be said that culpa aquiliana, or quasi-delict, is punished both by the old Civil Code and by the new Civil
Code. But, as this Court has pointed out, a less severe sanction, or penalty, for culpa aquiliana is provided for in
the new Civil Code. It follows, therefore, that Article 2206 of the new Civil Code, which provides that only the
spouse, legitimate and illegitimate descendants and ascendants may demand moral damages for mental anguish
by reason of the death of the deceased caused by quasi-delict, should be applied in the instant case. Hence,
Pedro Ybañez, who claims moral damages for the death of his brother Cesar caused by quasi-delict, is not
entitled to, and should not have been awarded, moral damages by the CA.

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 DAMAGES
In Case of Death

LIFE EXPECTANCY AN IMPORTANT FACTOR FOR DETERMINATION OF INDEMNITY

Villa Rey Transit, Inc. v. Court of Appeals

G.R. No. L-25499, February 18, 1970
Concepcion, C.J.

FACTS:
Petitioner Villa Rey Transit, Inc. filed a Petition for Review by Certiorari, seeking to review the decision of the
Court of Appeals in affirming the decision rendered by the Court of First Instance of Pangasinan.

In the early morning of March 17, 1960, a car accident occurred that led to the injury and/or death of passengers
of an Izuzu First Class passenger bus, owned by petitioner. One of the deaths therein was Policronio Quintos,
Jr., the brother of private respondents Trinidad, Prima, and Julita, all surnamed Quintos. As such, private
respondents instituted a case against petitioner for breach of contract of carriage between petitioner and the
decased as well as for the recovery of damages. Rejecting petitioner’s contention of fortutous event, the CFI
ruled in respondents favor. This was affirmed by the Court of Appeals. Hence, this Petition.

ISSUE:
How much can private respondents recover for damages?

HELD:
The determination of such amount depends, mainly upon two (2) factors, namely: (1) the number of years on the
basis of which the damages shall be computed and (2) the rate at which the losses sustained by said respondents
should be fixed.

The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis.
Much is left to the discretion of the court considering the moral and material damages involved, and so it has
been said that there can be no exact or uniform rule for measuring the value of a human life and the measure of
damages cannot be arrived at by precise mathematical calculation, but the amount recoverable depends on the
particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiary,
whichever is shorter, is an important factor. Other factors that are usually considered are: (1) pecuniary loss to
plaintiff or beneficiary; (2) loss of support; (3) loss of service; (4) loss of society; (5) mental suffering of
beneficiaries; and (6) medical and funeral expenses. Thus, life expectancy is, not only relevant, but, also,
an important element in fixing the amount recoverable by private respondents herein. Although it is not
the sole element determinative of said amount, no cogent reason has been given to warrant its disregard and
the adoption, in the case at bar, of a purely arbitrary standard, such as a four-year rule. In short, the Court of
Appeals has not erred in basing the computation of petitioner's liability upon the life expectancy of Policronio
Quintos, Jr.

91
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

COURTS ALLOW AWARD OF TEMPERATE DAMAGES EVEN IN THE ABSENCE OF COMPETENT PROOF
ON THE AMOUNT OF ACTUAL DAMAGES

1. Kabisig Real Wealth Development, Inc. v. Young Builders Corp.

G.R. No. 212375, January 25, 2017
Peralta, J.

FACTS:
This is a Petition for Review which petitioner and Fernando C. Tio filed, assailing the CA decision which affirmed
the RTC. Petitioner through Ferdinand Tio (Tio), contracted the services of respondent to supply labor and
materials for the renovation of its building. Respondent then finished the work and billed petitioner for
P4,123,320.95. Petitioner failed to pay despite numerous demands. It contended that no written contract was
ever entered into between the parties and it was never informed of the estimated cost of the renovation. Thus,
respondent filed an action for Collection of Sum of Money against petitioner

The RTC rendered a decision finding for respondent, ordering them to pay ₱4,123,320.95 representing the value
of services rendered and materials used in the renovation. CA affirmed the RTC Decision, with modification,
ordering herein petitioner to pay ₱2,400,000.00 as temperate damages for the value of services, rendered and
materials used.

ISSUE:
Is petitioner liable to pay temperate damages?

HELD:
Yes, petitioner is liable to pay temperate damages.

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. For an injured party to recover actual
damages, however, 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. Here, the evidence reveals that respondent
failed to submit any competent proof of the specific amount of actual damages being claimed. The documents
submitted by them either do not bear the name of Kabisig or Tio, their conformity, or signature, or do not indicate
in any way that the amount reflected on its face actually refers to the renovation project.

Notwithstanding the absence of sufficient proof, respondent still deserves to be recompensed for actually
completing the work. In the absence of competent proof on the amount of actual damages, the courts allow the
party to receive temperate damages. Temperate or moderate damages, which are more than nominal but less
than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered
but its amount cannot, from the nature of the case, be proved with certainty.

Now, to determine the compensation due and to avoid unjust enrichment from resulting out of a fulfilled contract,
the principle of quantum meruit may be used. Under this principle, a contractor is allowed to recover the
reasonable value of the services rendered despite the lack of a written contract. The measure of recovery under
the principle should relate to the reasonable value of the services performed. Being predicated on equity, said
principle should only be applied if no express contract was entered into, and no specific statutory provision was
applicable. The total amount of ₱2,400,000.00 which the CA awarded is deemed to be a reasonable
compensation under the principle of quantum meruit since the renovation of Kabisig’s building had already been
completed in 2001.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

NON-SUABILITY OF STATE INSULATES A GOVERNMENTAL ENTITY FROM CLAIMS OF DAMAGES

UNLESS IT GIVES CONSENT

2. Buisan v. Commission on Audit

G.R. No. 212376, January 31, 2017
Reyes, J.

FACTS:
This is a Petition for Review on Certiorari assailing the Decision of the COA which denied the money claims of
petitioners against the DPWH.

In 1989, the DPWH undertook the construction of the Liguasan Cut-off Channel (Project) in Maguindanao, to
minimize the perennial problem of flooding in the area. In April 2001, the DPWH received various claims from
land owners for damages allegedly caused to their properties, crops and improvements by the premature opening
of the Project. Hence, the Regional Director (RD) of DPWH, Cotabato City, investigated the claims. The
investigating bodies recommended in 2004 to pay just compensation to the claimants. However, due to the
considerable lapse of time and the insufficiency of evidence, no final resolution was made by the DPWH. The
claims were forwarded to the RD of the DPWH R.O. No. XII, as such being under the jurisdiction of the COA

In 2010, the petitioners, represented by Mayor Bai Annie C. Montawal, filed a petition with the COA, praying that
the DPWH be ordered to pay the petitioners compensation for their damaged crops, properties and
improvements. DPWH averred that the petitioners failed to establish said fact, and that the damage was caused
by the construction of the Project. In 2012, the COA denied the money claims of the petitioners. The petitioners
filed a motion for reconsideration, but the same was denied by the COA for lack of merit.

ISSUE:
Was it proper for COA to deny the money claims of the petitioners?

HELD:
Yes, it was proper for COA to deny the money claims of the petitioners.

Under the Doctrine of Non-Suability of State insulates the DPWH, a governmental entity, from claims of damages.
The fundamental law of the land provides that the State cannot be sued without its consent. The rule, in any
case, is not absolute. Suits filed against government agencies may either be against incorporated or
unincorporated agencies. In case of incorporated agencies, its suability depends upon whether its own organic
act specifically provides that it can sue and be sued in Court. As the State's engineering and construction arm,
the DPWH exercises governmental functions that effectively insulate it from any suit, much less from any
monetary liability. The construction of the Project which was for the purpose of minimizing the perennial problem
of flood in the area of Tunggol, Montawal, Maguindanao, is well within the powers and functions of the DPWH as
mandated by the Administrative Code of 1997. Hence, the Doctrine of Non-Suability clothes the DPWH from
being held responsible for alleged damages it performed in consonance with its mandated duty. Nowhere does
it appear in the petition that the State has given its consent, expressly or impliedly, to be sued before the courts.

Moreover, the Court finds no grave abuse of discretion on the part of COA in denying the petitioners' money
claims for failure to present substantial evidence to prove that their properties were damaged by floods due to
the premature opening of the Project of the DPWH. Without a doubt, because of the inconsistencies and
discrepancies in the evidence presented by the petitioners, there is no substantial evidence to prove the
petitioners' claims that would render the DPWH or the State liable for the amount claimed.

93
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

UNJUST ENRICHMENT CONTEMPLATES PAYMENT WHEN THERE IS NO DUTY TO PAY, AND THE
PERSON WHO RECEIVES THE PAYMENT HAS NO RIGHT TO RECEIVE IT

3. Osmena-Jalandoni v. Encomienda
G.R. No. 205578, March 1, 2017
Peralta, J.

FACTS:
This is an appeal from the Decision of the CA which set aside the Decision of the RTC, dismissing respondent's
claim for sum of money.

Encomienda narrated that she met petitioner Georgia Jalandoni in Cebu when the former was purchasing a
condominium unit and the latter was the real estate broker. Thereafter, Jalandoni called Encomienda to ask if
she could borrow money for the search and rescue operation of her children in Manila, who were allegedly taken
by their father, Luis Jalandoni. Encomienda then went to Jalandoni's house and handed the ₱100,000.00. While
in Manila, Jalandoni again borrowed lots of sums of money Encomienda still acceded, albeit already feeling
annoyed. All in all, Encomienda spent around ₱3,245,836.02 and $6,638.20 for Jalandoni. Encomienda then
later gave Jalandoni 6 weeks to settle her debts. Despite several demands, no payment was made. Jalandoni
insisted that the amounts given were not in the form of loans. No settlement was reached despite undergoing
barangay conciliation. Hence, Encomienda filed a complaint.

For her defense, Jalandoni claimed that there was never a discussion or even just an allusion about a loan. She
confirmed that Encomienda would indeed deposit money in her bank account and pay her bills in Cebu. But when
asked, Encomienda would tell her that she just wanted to extend some help and that it was not a loan. When
Jalandoni returned to Cebu, Encomienda wanted to fetch her at the airport but the former refused. This allegedly
made Encomienda upset, causing her to eventually demand payment for the amounts originally intended to be
gratuitous.

ISSUE:
Is Encomienda entitled to the reimbursement of the amounts she defrayed for Jalandoni?

HELD:
Yes, Encomienda is entitled to the reimbursement of the amounts she defrayed for Jalandoni.

The principle of unjust enrichment finds application in this case. Unjust enrichment exists when a person unfairly
retains a benefit to the loss of another, or when a person retains money or property of another against the
fundamental principles of justice, equity, and good conscience. There is unjust enrichment under Article 22 of
the Civil Code when (1) a person is unjustly benefited, and (2) such benefit is derived at the expense of or with
damages to another. The principle of unjust enrichment essentially contemplates payment when there is no duty
to pay, and the person who receives the payment has no right to receive it.

Clearly, petitioner greatly benefited from the purportedly unauthorized payments. Thus, even if she asseverates
that respondent's payment of her household bills was without her knowledge or against her will, she cannot deny
the fact that the same still inured to her benefit and respondent must therefore be consequently reimbursed for
it. Also, when petitioner learned about the payments, she did nothing to express her objection to or repudiation
of the same, within a reasonable time. She cannot, therefore, deny the benefits she reaped from said acts now
that the time for restitution has come. The debtor who knows that another has paid his obligation for him and who
does not repudiate it at any time, must corollarily pay the amount advanced by such third person.

94
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

CONCURRENCE OF THE ELEMENTS, DOCTRINE OF ASSUMPTION OF RISKS IS A DEFENSE FOR

NEGLIGENCE CASES

4. Abrogar v. Cosmos Bottling Co.

G.R. No. 164749, March 15, 2017
Bersamin, J.

FACTS:
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.

Respondent Cosmos, jointly with Intergames, organized an endurance running contest billed as the "1st Pop
Cola Junior Marathon". The organizers plotted a 10-kilometer course. Petitioner’s son, Rommel, applied to be
allowed to participate in the contest and after due compliance, his application was accepted and he was given
an official number. Consequently, at the designated time of the marathon, Rommel joined the other participants
and ran the course plotted by the defendants. As it turned out, respondents 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. In staging the event, Intergames had no employees of its own to man the race, and relied
only on the "cooperating agencies" and volunteers who had worked with it in previous races. It held no briefings
of any kind on the actual duties to be performed by each group of volunteers. It did not instruct the volunteers on
how to minimize, if not avert, the risks of the race. 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. Rommel was bumped
by a jeepney that was then running along the route of the marathon and in spite of medical treatment given to
him, he died later that same day due to severe head injuries.

ISSUE:
Does the Doctrine of Assumption of Risk apply in this case?

HELD:
No, the Doctrine of Assumption of Risk does not apply in this case.

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. It is based on voluntary consent, express
or implied, to accept danger of a known and appreciated risk; but one does not ordinarily assume risk of any
negligence which he does not know and appreciate. 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.

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. 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 to the effect that
a person does not comprehend the risk involved in a known situation because of his youth, 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.

95
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

IMPLEMENTATION AND MONITORING OF COMPLIANCE OF RULES IMPORTANT IN EXERCISING DUE

DILIGENCE IN THE SUPERVISION OF EMPLOYEES

5. Our Lady of Lourdes Hospital v. Spouses Capanzana

G.R. No. 189218, March 22, 2017
Sereno, CJ.

FACTS:
A week before Regina Capanzana’s scheduled caesarean section (C-section), she went into active labor and
was brought to Our Lady of Lourdes Hospital for an emergency C-section. She went into a pre-operative
examination done by Dr. Ramos and Dr. Santos. Thirteen hours after her operation, Regina complained of a
headache, a chilly sensation, restlessness and shortness of breath. She asked for oxygen and later became
cyanotic. After undergoing x-ray, she was found to be suffering from pulmonary edema. Showing no
improvement, she was transferred to the Cardinal Santos Hospital and there she suffered from cardio-pulmonary
arrest and, subsequently, brain damage. Due to this, spouses Capanzana filed a complaint for damages against
Our Lady of Lourdes Hospital along with Dr. Ramos, Dr. Santos and the nurses on duty stationed on the second
floor. During the course of the proceedings, Regina died and was substituted by her heirs.

The RTC ruled that it found no negligence on the part of Dr. Ramos and Dr. Santos. The trial court, however,
found the nurses on duty liable for their failure to immediately administer the oxygen. It also held that the Our
Lady of Lourdes Hospital is free from liability. The CA affirmed the ruling of the RTC except as to the liability of
the midwife and the hospital. It was found that while petitioner showed diligence in its selection and hiring
processes, there was no evidence to prove that it exercised the required diligence in the supervision of its nurses.

ISSUE:
Was Our Lady of Lourdes Hospital liable for damages due to its failure to exercise due diligence in the supervision
of its nurses?

HELD:
Yes, Our Lady of Lourdes Hospital is liable for damages due to its failure to exercise due diligence in the
supervision of its nurses.

Under Article 2180, an employer may be held liable for the negligence of its employees based on its responsibility
under a relationship of patria potestas. The liability of the employer under this provision is “direct and immediate.
The employer may only be relieved of responsibility upon a showing that it exercised the diligence of a good
father of a family in the selection and supervision of its employees.

The SC held that the hospital failed to prove due diligence in their supervision albeit it was observed in the
selection of the nurses. The formulation of a supervisory hierarchy, company rules and regulations, and
disciplinary measures upon employees in case of breach, is indispensable. However, to prove due diligence in
the supervision of employees, it is not enough for an employer such as petitioner to emptily invoke the existence
of such a formulation. What is more important is the actual implementation and monitoring of consistent
compliance with the rules. In this case, it was found that there is failure on the part of the hospital to sanction the
tardiness of the nurses. Also, on the nights subject of the present controversy, there is failure to show who were
the actual nurses on duty and who was supervising these nurses due to the conflicting accounts on the
documents of the hospital. All these negate the due diligence on the part of the nurses, their supervisors, and
ultimately, the hospital. Thus, petitioner was held liable for damages.

96
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

DAMAGE OR INJURY REQUIRES THAT THERE BE A LOSS OR HARM RESULTING FROM A VIOLATION
OF A LEGAL DUTY

6. Spouses Carbonel v. Metropolitan Bank & Trust Co.

G.R. No. 178467, April 26, 2017
Sereno, CJ.

FACTS:
The spouses withdrew US$l,000.00 in US$100 notes from their dollar account at the respondent's Pateros
branch. While they were in Bangkok, they had exchanged five US$100 bills into Baht, but only four of the US$100
bills had been accepted by the foreign exchange dealer because the fifth one was "no good." Because of
currency’s rejection, they had asked a companion to exchange the same bill at Norkthon Bank in Bangkok,
thereat the dollar bill was declared “fake, and was confiscated by the bank teller. On the next day, they had been
confronted by the shop owner at the hotel lobby because their four US$ 100 bills had turned out to be counterfeit.

Upon the petitioners’ return to the Philippines, they had confronted the manager of the respondent's Pateros
branch on the fake dollar bills, but the latter had insisted that the same were genuine. They had demanded moral
damages of ₱10 Million and exemplary damages. The petitioners alleged that they had experienced emotional
shock, mental anguish, public ridicule, humiliation, insults and embarrassment during their trip.

Prior to the filing of the suit in the RTC, the petitioners had two meetings with the respondent's representatives.
The latter's representatives reiterated their sympathy and regret over petitioners’ troublesome experience that,
and offered to reinstate US$500 in their dollar account, and, in addition, to underwrite a round-trip all-expense-
paid trip to Hong Kong, but they were adamant and staged a walk-out. The RTC ruled in favor of the respondent.
The petitioners appealed, but the CA ultimately promulgated its assailed decision affirming the judgment of the
RTC with the modification of deleting the award of attorney's fees.

ISSUE:
Did the spouses suffer an injury which would entitle them to the award of damages?

HELD:
No, the spouses did not suffer an injury that would entitle them to the award of damages.

Injury is the illegal invasion of a legal right, damage is the loss, hurt, or harm which results from the injury; and
damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These
situations are often called danmum absque injuria. In every situation of damnum absque injuria, therefore, the
injured person alone bears the consequences because the law affords no remedy for damages resulting from an
act that does not amount to a legal injury or wrong. For instance, in BPI Express Card Corporation v. CA, the
Court turned down the claim for damages of a cardholder whose credit card had been cancelled after several
defaults in payment. In such situation, the injured person alone should bear the consequences because the law
afforded no remedy for damages resulting from an act that did not amount to a legal injury or wrong.

Here, although the petitioners suffered humiliation resulting from their unwitting use of the counterfeit US dollar
bills, the respondent, by virtue of its having observed the proper protocols and procedure in handling the US
dollar bills involved, did not violate any legal duty towards them. Being neither guilty of negligence nor remiss in
its exercise of the degree of diligence required by law or the nature of its obligation as a banking institution, the
latter was not liable for damages. Given the situation being one of damnum absque injuria, they could not be
compensated for the damage sustained.

97
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

FOOD ESTABLISHMENT AS WELL AS ITS MANAGEMENT AND STAFF CANNOT BE HELD LIABLE FOR
AN INJURY SUSTAINED BY A CHILD PLACED IN THEIR CUSTODY IF THE PROXIMATE CAUSE WAS THE
NEGLIGENCE OF THE PARENT

7. Spouses Latonio v. McGeorge Food Industries, Inc

G.R. No. 206184, December 6, 2017
Peralta, J.

FACTS:
The petitioners, spouses Ed and Mary Ann Latonio accompanied their eight-month-old child Ed Christian to a
birthday party at the McDonald’s Restaurant, Ayala Center, Cebu City. During the party and as part of the birthday
package, McDonald’s presented two mascots, Birdie and Grimace, to entertain and dance for the guests.
Respondent Tyke Philip Lomibao was the person inside the “Birdie” mascot suit. After the mascots danced,
guests had their pictures taken with them. Intending to have her child’s photo taken with the mascots, Mary Ann
placed Ed Christian on a chair in front of the mascot “Birdie.” The mascot positioned itself behind the child and
extended its “wings” to give a good pose for the camera.
As photos were about to be taken, Mary Ann released her hold of Ed Christian. Seconds later, the child fell head
first from the chair onto the floor. Several guests attended to Ed Christian. Meanwhile, the employees of
respondent Cebu Golden Food assisted petitioners in giving first aid treatment to Ed Christian. Petitioners,
nevertheless, remained and continued with the party and left only after the party was over.

Respondent corporation assured the Latonios that they were ready to assist in whatever medical attention would
be required of Ed Christian. However, instead of giving respondent Cebu Golden Food copies of the medical
records of Ed Christian, the Latonios demanded compensation in the amount of P15 million.

RTC found respondents Cebu Golden Foods and Lomibao to be liable of moral damages, exemplary damages
and attorney’s fees. CA reversed RTC’s decision.

ISSUE:
Was Mary Ann Latonio’s negligence was the proximate cause of Ed Christian’s fall?

HELD:
Yes, Mary Ann Latonio’s negligence was the proximate cause of her son’s fall.

The Supreme Court agreed with CA that despite Mary Ann’s insistence that she made sure that her baby was
safe and secured before she released her grasp on Ed Christian, her own testimony revealed that she had, in
fact, acted negligently and carelessly.

The Court also ruled that it is irresponsible for a mother to entrust the safety, even momentarily, of her eight-
month-old child to a mascot, not to mention a bird mascot in thick leather suit that had no arms to hold the child
and whose diminished ability to see, hear, feel, and move freely was readily apparent. Moreover, by merely
tapping the mascot and saying “pa-picture ta”, Mary Ann Latonio cannot be said to have “told, informed and
instructed the mascot that she was letting the mascot hold the baby momentarily.” Releasing her grasp of the
baby without waiting for any indication that the mascot heard and understood her is just plain negligence on the
part of Mary Ann.

Clearly, based on the foregoing, Mary Ann’s negligence was the proximate cause of Ed Christian’s fall which
caused him injury. The Court added that the cause of Ed Christian’s fall is traceable to the negligent act of Mary
Ann of leaving him in the “hands” of Lomibao who was wearing the Birdie mascot suit. The Court noted that
“hands” and “wings” were used interchangeably during the testimonies of the witnesses, thus, causing confusion.
However, it must be stressed that while indeed Lomibao has hands of his own, at the time of the incident he was
wearing the Birdie mascot suit. Suffice it to say that the Birdie mascot suit have no hands but instead have wings.
Lomibao cannot possibly hold or grasp anything while wearing the thick Birdie mascot suit. In fact, even if he
wanted to hold Ed Christian or anything, he could not possibly do so.

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Thus, all the aforementioned circumstances lead us to no other conclusion than that the proximate cause of the
injury sustained by Ed Christian was due to Mary Ann’s own negligence. In the absence of negligence on the
part of respondents Cebu Golden Foods and Lomibao, as well as their management and staff, they cannot be
made liable to pay for the damages prayed for by the petitioners.

99
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

ARTICLE 20 OF THE CIVIL CODE CONCERNS "VIOLATIONS OF EXISTING LAW AS BASIS FOR AN
INJURY", WHEREAS ARTICLE 2176 APPLIES WHEN THE NEGLIGENT ACT CAUSING DAMAGE TO
ANOTHER DOES NOT CONSTITUTE "A BREACH OF AN EXISTING LAW OR A PRE-EXISTING
CONTRACTUAL OBLIGATION.

8. St. Martin Polyclinic vs. LWV Construction Corp.

G.R. No. 217426, December 4, 2017
Perlas-Bernabe, J.

FACTS: This is a petition for review on certiorari of the CA decision which affirmed with modification the RTC
decision which ordered herein petitioner St. Martin Polyclinic, Inc. (petitioner) to pay respondent LWV
Construction Corporation (respondent) temperate damages in the amount of P50,000.00.

Respondent is engaged in the business of recruiting Filipino workers for deployment to Saudi Arabia. On the
other hand, petitioner is an accredited member of the Gulf Cooperative Council Approved Medical Centers
Association (GAMCA) and as such, authorized to conduct medical examinations of prospective applicants for
overseas employment. R espondent referred prospective applicant Jonathan V. Raguindin (Raguindin) to
petitioner for a pre-deployment medical examination in accordance with the instructions from GAMCA. After
undergoing the required examinations, petitioner cleared Raguindin and found him "fit for employment," as
evidenced by a Medical Report8 dated January 11, 2008. Based on the foregoing, respondent deployed
Raguindin to Saudi Arabia, allegedly incurring expenses in the amount of P84,373.41. Unfortunately, when
Raguindin underwent another medical examination with the General Care Dispensary of Saudi Arabia on March
24, 2008, he purportedly tested positive for HCV or the hepatitis C virus. The Ministry of Health of the Kingdom
of Saudi Arabia (Ministry of Health) required a re-examination of Raguindin, which the General Care Dispensary
conducted on April 28, 2008. However, the results of the re-examination remained the same, i.e., Raguindin was
positive for HCV, which results were reflected in a Certification12 dated April 28, 2008 (Certification). An undated
HCV Confirmatory Test Report likewise conducted by the Ministry of Health affirmed such finding, thereby leading
to Raguindin's repatriation to the Philippines.

Claiming that petitioner was reckless in issuing its Medical Report stating that Raguindin is "fit for employment"
when a subsequent finding in Saudi Arabia revealed that he was positive for HCV, respondent filed a Complaint
for sum of money and damages against petitioner before the Metropolitan Trial Court. Petitioner denied liability
and claimed that: first, respondent was not a proper party in interest for lack of privity of contract between them;
second, the MeTC had no jurisdiction over the case as it involves the interpretation and implementation of a
contract of employment; third, the action is premature as Raguindin has yet to undergo a post-employment
medical examination following his repatriation; and fourth, the complaint failed to state a cause of action as the
Medical Report issued by petitioner had already expired on April 11, 2008, or three (3) months after its issuance
on January 11, 2008. MeTC rendered decision in favor of respondent. Petitioner appealed to RTC. The RTC
rendered decision affirming the MeTC decision. Petitioner elevated the case to the CA. CA affirmed the RTC
Decision.

ISSUE:
Whether or not petitioner was negligent in issuing the Medical Report declaring Raguindin "fit for employment"
and hence, should be held liable for damages.

HELD:
No. With respect to negligent acts or omissions, it should therefore be discerned that Article 20 of the Civil Code
concerns "violations of existing law as basis for an injury", whereas Article 2176 applies when the negligent act
causing damage to another does not constitute "a breach of an existing law or a pre-existing contractual
obligation." In this case, the courts a quo erroneously anchored their respective rulings on the provisions of
Articles 19, 20, and 21 of the Civil Code. This is because respondent did not proffer (nor have these courts
mentioned) any law as basis for which damages may be recovered due to petitioner's alleged negligent act. In
its amended complaint, respondent mainly avers that had petitioner not issue a "fit for employment" Medical
Report to Raguindin, respondent would not have processed his documents, deployed him to Saudi Arabia, and
later on - in view of the subsequent findings that Raguindin was positive for HCV and hence, unfit to work -

100
suffered actual damages in the amount of P84,373.41.52 Thus, as the claimed negligent act of petitioner was
not premised on the breach of any law, and not to mention the incontestable fact that no pre-existing contractual
relation was averred to exist between the parties, Article 2176 - instead of Articles 19, 20 and 21 - of the Civil
Code should govern.

Under our Rules of Evidence, it is disputably presumed that a person takes ordinary care of his concerns and
that private transactions have been fair and regular. In effect, negligence cannot be presumed, and thus, must
be proven by him who alleges it. The records of this case show that the pieces of evidence mainly relied upon
by respondent to establish petitioner's negligence are: (a) the Certification61 dated April 28, 2008; and (b) the
HCV Confirmatory Test Report.62 However, these issuances only indicate the results of the General Care
Dispensary and Ministry of Health's own medical examination of Raguindin finding him to be positive for HCV.
Notably, the examination conducted by the General Care Dispensary, which was later affirmed by the Ministry of
Health, was conducted only on March 24, 2008, or at least two (2) months after petitioner issued its Medical
Report on January 11, 2008. Hence, even assuming that Raguindin's diagnosis for HCV was correct, the fact
that he later tested positive for the same does not convincingly prove that he was already under the same medical
state at the time petitioner issued the Medical Report on January 11, 2008. In this regard, it was therefore
incumbent upon respondent to show that there was already negligence at the time the Medical Report was
issued, may it be through evidence that show that standard medical procedures were not carefully observed or
that there were already palpable signs that exhibited Raguindin's unfitness for deployment at that time. This is
hardly the case when respondent only proffered evidence which demonstrate that months after petitioner's
Medical Report was issued, Raguindin, who had already been deployed to Saudi Arabia, tested positive for HCV
and as such, was no longer "fit for employment".

101
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

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 CONDUCT OR GUARDING AGAINST ITS CONSEQUENCES.

9. Cacho vs. Manahan

G.R. No. 203081, January 17, 2018
Martires, J.

FACTS: This is a petition for review of the decision of the CA reversing the decision of the RTC and dismissed
the complaint for damages. The present case arose from a complaint for damages filed by the petitioners, the
wife and children of Bismark Cacho (Cacho), against Gerardo Manahan (Manahan), Dagupan Bus Co., Inc.
(Dagupan Bus), and Renato de Vera (De Vera), the owner of R.M. De Vera Construction (De Vera Construction).

On June 30, 1999, a vehicular accident occurred along the national highway at Pogo, Alaminos, Pangasinan,
near the Embarcadero Bridge. At around 5:00 A.M. on the said date, Cacho was driving a Nissan Sentra with
Plate No. UAM 778 from Alaminos, Pangasinan to Bani, Pangasinan, when it collided with a Dagupan Bus, with
Plate No. AVD 548, traversing on the opposite lane. The car had already crossed the bridge when it collided with
the bus which was just about to enter the bridge. The collision caused heavy damage to the front of the bus, the
total wreckage of the Nissan Sentra, Cacho's instant death, and multiple injuries to three (3) passengers inside
the car. The complaint alleged that Cacho's car was hit by the bus because the latter swerved to the left lane as
it tried to avoid a pile of boulders placed on the shoulder of the road. These boulders were negligently placed by
De Vera Construction contracted by the local government to do some work on the Embarcadero Bridge.

Dagupan Bus, the owner and operator of the bus, and Manahan, the bus driver, jointly filed their answer with
counterclaim and cross-claims. They claimed that it was Cacho who drove fast coming from the bridge and
bumped into the bus that was on full stop; and that Cacho had to swerve to the left because there were boulders
of rocks scattered on his lane. In his answer with counterclaim, De Vera maintained that he ensured the safety
of the road by piling the boulders in a safe place to make sure they did not encroach upon the road. He presented
the municipality's local civil engineer to testify that he inspected the road and found that De Vera Construction
had complied with the safety measures. Like his co-defendants, De Vera blamed Cacho for driving recklessly
and causing the collision with the bus.

The RTC held Dagupan Bus, Manahan, and De Vera jointly and severally liable to pay the petitioners. The RTC
explained that Manahan was negligent in driving the bus because it was traversing at the speed of 80-100 KM/H
and was about to enter a very narrow bridge. In the end, the trial court held that the proximate cause of the
incident was the negligence of Manahan in driving the bus as well as the negligence on the part of De Vera for
allowing his employees to place boulders near the bridge. The CA reversed the trial court’s ruling effectively
dismissing the complaint for damages against Manahan, Dagupan Bus, and De Vera. Contrary to the trial court's
findings, the CA did not believe that the bus was running very fast and that it suddenly swerved to the left to avoid
the boulders. After denial of the motion for reconsideration, this petition was filed.

ISSUE:
Was Manahan negligent?

HELD: Yes. From these circumstances, therefore, we find that Manahan was clearly negligent because the bus
he was driving already occupied a portion of the opposite lane, and he was driving at a high speed while
approaching the bridge. In Picart v. Smith, we laid down the test by which we determine the existence of
negligence, viz: 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
ordinary prudent person would have used in the same situation? If not, then he is guilty of negligence.

Using this test, Manahan was clearly negligent when he was relatively driving fast on a narrow highway and
approaching a similarly narrow bridge. We must bear in mind that a bus is a significantly large vehicle which
would be difficult to maneuver and stop if it were travelling at a high speed. On top of this, the time of the accident
was on or about sunrise when visibility on the road was compromised. Manahan should have been more prudent

102
and careful in his driving the bus especially considering that Dagupan Bus is a common carrier. Given the nature
of the business and for reasons of public policy, the common carrier is bound "to observe extraordinary diligence
in the vigilance over the goods and for the safety of the passengers transported by them, according to all the
circumstances of each case." Moreover, we can also say that Manahan was legally presumed negligent under
Article 2185 of the Civil Code, which provides: "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 [in violation of] any traffic
regulation."[24 Based on the place and time of the accident, Manahan was actually violating a traffic rule found
in R.A. No. 4136, otherwise known as the Land Transportation and Traffic Code.

Having established Manahan's negligence, he is liable with Dagupan Bus to indemnify Cacho's heirs. Article
2180, in relation to Article 2176, of the Civil Code provides that the employer of a negligent employee is liable for
the damages caused by the latter. When an injury is caused by the negligence of an employee there instantly
arises a presumption of the law that there was negligence on the part of the employer either in the selection of
his employee or in the supervision over him after such selection. The presumption, however, may be rebutted by
a clear showing on the part of the employer that it had exercised the care and diligence of a good father of a
family in the selection and supervision of his employee. On this point, we are surprised at how prompt Dagupan
Bus had allowed Manahan to drive one of its buses considering he had no prior experience driving one. The only
time he was actually able to drive a bus was probably during his driving examination and a few more times while
undergoing apprenticeship. We cannot simply brush aside and ignore Dagupan Bus haste to hire Manahan; to
our mind, this is negligence on its part.

103
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

IT IS A SETTLED RULE THAT A DRIVER ABANDONING HIS PROPER LANE FOR THE PURPOSE OF
OVERTAKING ANOTHER VEHICLE IN AN ORDINARY SITUATION HAS THE DUTY TO SEE TO IT THAT
THE ROAD IS CLEAR AND HE SHOULD NOT PROCEED IF HE CANNOT DO SO IN SAFETY.

10. SGT. CORNELIO PAMAN vs. PEOPLE OF THE PHILIPPINES

G.R. No. 210129, July 5, 2017
Reyes, J.

FACTS:
This is a petition for review under Rule 45 of the Rules of Court seeking to annul and set aside the
decision of the CA which held Paman guilty of reckless imprudence resulting in serious physical injuries.

On October 14, 2004, at about 1:20 p.m., Ursicio Arambala was on board a motorcycle traversing Roxas
Street, Pagadian City towards the direction of the Southern Mindanao Colleges Main Campus. When he was
nearing the intersection of Roxas and Broca Streets in Pagadian City, a multicab driven by S/Sgt. Cornelio
Paman, a military personnel, crossed his path and collided with his motorcycle. Arambala was thrown from his
motorcycle thus hitting his head on the road pavement. Emilda Salabit, who was then standing beside the road,
saw Arambala being thrown away after the collision; she went to Arambala and hailed a tricycle and rushed him
to the hospital. A Computed Tomography Scan report shows that Arambala suffered hematoma at the cerebral
portion of his brain. After his confinement at the Mercy Community Hospital on October 15, 2004, Arambala was
again admitted on October 24, 2004 at the Zamboanga del Sur Provincial Hospital due to erratic blood pressure
and slurring speech caused by the hematoma.

On February 21, 2005, an Information for the crime of reckless imprudence resulting in serious physical
injuries, docketed as Criminal Case No. 14034, was filed with the Municipal Trial Court in Cities (MTCC) of
Pagadian City against Paman. Paman pleaded not guilty to the offense charged. The MTCC rendered a
Judgment finding Paman guilty beyond reasonable doubt of reckless imprudence resulting in serious physical
injuries. The RTC reversed the MTCC decision. RTC pointed out that Arambala was the cause of the collision
since he already saw the multicab driven by Paman ahead of time; that he had the opportunity to take precaution
to avoid the accident, but he failed to do so. The CA then rendered the decision finding Paman guilty. Hence,
this petition.

ISSUE:
Whether or not Paman should be guilty of reckless imprudence.

HELD: Yes. Paman's act of driving on the wrong side of the road, in an attempt to overtake the motorcycle driven
by Arambala, and suddenly crossing the path which is being traversed by the latter, is sheer negligence. It is a
settled rule that a driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and he should not proceed if he cannot do so in safety. If,
after attempting to pass, the driver of the overtaking vehicle finds that he cannot make the passage in safety, the
latter must slacken his speed so as to avoid the danger of a collision, even bringing his car to a stop if
necessary.20 This rule is consistent with Section 41(a) of Republic Act No. 4136, as amended, otherwise known
as the Land Transportation and Traffic Code, which provides:

Sec. 41. Restrictions on overtaking and passing. (a) The driver of a vehicle shall not drive to the left side of the
center line of a highway in overtaking or passing another vehicle proceeding in the same direction, unless such
left side is clearly visible, and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking
or passing to be made in safety.

Under Article 2185 of the Civil Code, unless there is proof to the contrary, a person driving a vehicle is presumed
negligent if, at the time of the mishap, he was violating any traffic regulation. Here, Paman was violating a traffic
regulation, i.e., driving on the wrong side of the road, at the time of the collision. He is thus presumed to be
negligent at the time of the incident, which presumption he failed to overcome. For failing to observe the duty of
diligence and care imposed on drivers of vehicles abandoning their lane, Paman, as correctly held by the CA,
must be held liable.

104
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

DISTRIBUTION UTILITIES ARE PUBLIC UTILITIES VESTED WITH PUBLIC INTEREST AND THUS ARE
HELD TO A HIGHER DEGREE OF DILIGENCE

11. Manila Electric Company et al. vs. Nordec Philippines and/or Marvex Industrial Corp.
G.R. No. 196020 & 196116, April 18, 2018
Leonen, J.

FACTS:
Meralco was contracted to supply electricity to Marvex Industrial Corporation under an Agreement for Sale of
Electric Energy. Marvex was billed according to the monthly electric consumption recorded in its meter. Later,
Meralco service inspectors found that the main meter terminal and cover seals of Marvex's electric metering
facilities had been tampered with. Meralco assessed Marvex a differential billing, and sent demand letters
therefor. With its demands unheeded, Meralco disconnected Marvex's electric service

Nordec, the new owner of Marvex, sued Meralco for damages. It alleged that Meralco's service inspectors
conducted the 1985 inspections without its consent or approval. Following the inspections, Meralco's inspectors
gave an unnamed Nordec employee a Power Field Order that did not mention the alleged defects in the metering
devices. Nordec claimed that Meralco disconnected its service without prior notice, resulting to loss of income
and cancellation of other business opportunities

The RTC dismissed Nordec’s complaint. It found that there was sufficient evidence to prove that the electric
meter and metering installation at Marvex premises had been tampered with. The trial court ruled that Nordec
did not dispute that the inspections of its premises were conducted with the consent and in the presence of its
representatives. It held Nordec liable for violating its Terms 1.

The CA reversed the decision of RTC. It found Meralco was negligent in discovering the alleged tampering only
4 months after it first found irregularities in the metering devices, despite the monthly meter readings. It awarded
Nordec exemplary damages and attorney’s fees, but not actual damages. As to actual damages, Nordec failed
to prove that it actually sustained pecuniary losses due to Meralco’s disconnection.

Meralco argues that the degree of diligence imposed upon it was beyond the prevailing law at the time of
inspection, namely, Commonwealth Act No. 349. It claims that under this law, it is only required to test metering
devices once every two years. Thus, for it to be penalized for taking four (4) months to rectify and repair the
defective meter, was tantamount to judicial legislation. Meralco avers that it exercised due diligence in
maintaining its electric meters, which was the standard set by law. By applying Ridjo Tape v. Court of Appeals,
the Court of Appeals imposed a degree of diligence beyond what Commonwealth Act No. 349 provided. Meralco
asserts that the imposition of a degree of diligence beyond what the law provides its judicial legislation.

ISSUES:
1. Whether Meralco was inexcusably negligent when it disconnected Nordec Philippines' electric supply.
2. Whether Nordec Philippines is entitled to actual, temperate, moral or exemplary damages, attorney's
fees, and legal interest.

HELD:
1. YES

It is well-settled that electricity distribution utilities, which rely on mechanical devices and equipment for the
orderly undertaking of their business, are duty-bound to make reasonable and proper periodic inspections of their
equipment. If they are remiss in carrying out this duty due to their own negligence, they risk forfeiting the amounts
owed by the customers affected.

The two-year period prescribed under Commonwealth Act No. 34979 is for the testing required of meters and
appliances for measurements used by all public services by a standardized meter laboratory under the control of
the then Public Service Commission. It does not pertain to distribution utilities inspections of the metering devices
installed in their consumers' premises.

105
Contrary to Meralco's claim, the duty imposed upon it pursuant to Ridjo is not beyond the standard of care
imposed by law. Distribution utilities are public utilities vested with public interest, and thus, are held to a higher
degree of diligence. In Ridjo:

It is worth emphasizing that it is not our intention to impede or diminish the business viability of
MERALCO, or any public utility company for that matter. On the contrary, we would like to stress that,
being a public utility vested with vital public interest, MERALCO is impressed with certain obligations
towards its customers and any omission on its part to perform such duties would be prejudicial to its
interest. For in the final analysis, the bottom line is that those who do not exercise such prudence in the
discharge of their duties shall be made to bear the consequences of such oversight.

The distribution utility's negligence is all the more apparent when it had made prior findings of tampering, and yet
still failed to correct these defects. Here, as observed by the CA, Meralco itself claimed that the irregularities in
the electricity consumption recorded in Nordec's metering devices started on January 18, 1985, as evidenced by
their August 7, 1985 demand letter, covering January 18, 1985 to May 29, 1985. However, the alleged tampering
was only discovered during the May 29, 1985 inspection. Considering that Nordec's meters were read monthly,
Meralco's belated discovery of the cause of the alleged irregularities, or four months after they purportedly
started, can only lead to a conclusion of negligence. Notice of a defect may be constructive when it has
conspicuously existed for a considerable length of time. It is also worth noting that during a third inspection on
November 23, 1987, further irregularities in Nordec's metering devices were observed, showing electricity
consumption even when Nordec's entire power supply equipment was switched off. Clearly, Meralco had been
remiss in its duty as required by law and jurisprudence of a public utility.

Finally, Meralco failed to comply with the 48-hour disconnection notice rule. Meralco claims that the statements
in its demand letters, that failure to pay would result in disconnection, were sufficient notice. However, pursuant
to Section 97 of Revised General Order No. 1, the governing rule when the disconnection occurred, disconnection
due to non-payment of bills requires that a 48-hour written notice be given to the customer.

2. NO. Nordec is only entitled to the refund of overbilling, nominal damages, and costs of suit.

In this case, the CA declined to award actual damages to Nordec as it failed to prove its pecuniary losses due to
Meralco’s disconnection. However, the CA then proceeded to award exemplary damages to Nordec by way of
example or correction for the public good. This is contrary to the requirement in Article 2234 of the Civil Code,
which requires proof of entitlement to moral, temperate or compensatory damages before exemplary damages
may be awarded. Exemplary damages, which cannot be recovered as a matter of right, may not be awarded if
no moral, temperate, or compensatory damages have been granted. Since exemplary damages cannot be
awarded, the award of attorney's fees should likewise be deleted.

Moral damages are also not proper. As a rule, a corporation is not entitled to moral damages because, not being
a natural person, it cannot experience physical suffering or sentiments like wounded feelings, serious anxiety,
mental anguish and moral shock. The only exception to this rule is when the corporation has a reputation that is
debased, resulting in its humiliation in the business realm. Here, the records are bereft of evidence that would
show that Nordec's name or reputation suffered due to the disconnection of its electric supply.

Moreover, contrary to Nordec's claim, it cannot be awarded temperate or moderate damages. When the court
finds that a party fails to prove the fact of pecuniary loss, and not just the amount of this loss, then Article 2224
on temperate or moderate damages does not apply.

Nominal damages are awarded to vindicate the violation of a right suffered by a party, in an amount considered
by the courts reasonable under the circumstances. Meralco's negligence in not providing Nordec sufficient notice
of disconnection of its electric supply, especially when there was an ongoing dispute between them concerning
the recomputation of the electricity bill to be paid, violated Nordec's rights. Because of this, Nordec is entitled to
nominal damages in the amount of P30,000.00.

106
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

EXONERATION OF VESSEL’S OFFICERS AND CREW FROM ADMINISTRATIVE LIABILITIES DOES NOT
OPERATE TO ABSOLVE THE COMMON CARRIER FROM ITS CIVIL LIABILITIES

12. F.F. Cruz & Company, Inc. vs. Philippine Iron Construction and Marine Works, Inc., and/or Anchor
Metals Corp.
G.R. Nos.188144 & 188301, August 30, 2017
Jardeleza, J.

FACTS:

The DPWH engaged the services of F.F. Cruz to construct the government pier located in Brooke's Point,
Palawan. F.F Cruz brought its tugboat M/T Imma, Barge 609, Barge 1001, and Barge Piling Rig Pilipino to the
site.

Tugboat M/T Jasaan docked at Brooke's Point for the purpose of towing Barge Florida. Achor Metal Corp. (AMC)
owned Florida and leased Jasaan from Philippine Iron Construction & Marine Works, Inc. (PICMW) through a
bareboat charter agreement. In the evening of November 4, 1988, typhoon Welpring hit Brooke's Point. F.F.
Cruz's Barge 609 and Pilipino sank, while Barge 1001 collided with the driven piles at the construction site. That
same evening, Jasaan towed Florida to a safer place because the latter's anchor line was cut off. In the process,
however, the rudder cable snapped and both Jasaan and Florida drifted towards the seashore.

The following day, the master of Imma, Antonio Bundal, filed a marine protest alleging that Jasaan and Florida
were responsible for the damage to F.F. Cruz's vessels and the driven piles. He alleged that there was an allision
between Jasaan and Barge 1001, which caused the latter to hit the driven piles. In tum, Florida bumped Barge
609 causing the latter to eventually sink. Pilipino likewise hit the concrete piles as a result of the allision. The
master of Jasaan, Capt. Daniel Pino, also filed a marine protest, reporting that both Jasaan and Florida were
pushed ashore as a result of the typhoon, causing damages to both vessels.

The Board of Marine Inquiry (BMI) absolved PICMW and AMC of any administrative liability. It found that Jasaan
and Florida maintained a safe distance from F.F Cruz’s vessels. Instead, the BMI recommended that Bundal and
patrons of Barge 609, 1001, and Pilipino be faulted for their failure to transfer their barges to a safe distance from
driven piles. The Philippine Coast Guard affirmed the recommendations of the BMI.

F.F. Cruz filed a complaint for damages with the RTC against both AMC and PICMW. The RTC found that
evidence clearly established the fact that Jasaan and Florida bumped and hit the vessels of F.F. Cruz. It held
PICMW solidarily liable because Jasaan was not seaworthy.

The CA found AMC liable to F.F. Cruz for damage caused by AMC’s vessels to the barges owned by F.F. Cruz.
However, the appellate court mitigated AMC’s liability due to F.F. Cruz’s contributory negligence in failing to
properly secure Barge 609 and Barge 1001 at the time of the typhoon. It absolved PICMW from any liability
because the contract it entered into with AMC was a bareboat charter, which means that AMC is effectively
considered the owner for the duration of the voyage.

ISSUE:
Whether F.F. Cruz is guilty of contributory negligence.

HELD:
YES.

In this case, the CA partially relied on the report when it held F.F. Cruz liable for contributory negligence, but
disagreed with the BMI's findings that AMC was without any fault. We find that the CA properly considered the
BMI report in line with prevailing jurisprudence.

In Aboitiz Shipping Corporation v. New India Assurance Company, Ltd., we held that the "findings of BMI are not
deemed always binding on the courts." The BMI's exoneration of the vessel's officers and crew merely concerns

107
their respective administrative liabilities. It does not in any way operate to absolve the common carrier from its
civil liabilities arising from its failure to exercise extraordinary diligence, the determination of which properly
belongs to the courts.

The rule is that the BMI's findings are binding and conclusive on the courts when it is supported by substantial
evidence. This is consistent with the elementary principle in administrative law that findings of fact by
administrative tribunals are conclusive when supported by substantial evidence.

In finding that F.F. Cruz was negligent, the BMI clearly identified the evidentiary basis in support of its conclusion.
The CA cannot thus be faulted for relying on the BMI's factual findings to support its own conclusion that F.F.
Cruz was guilty of contributory negligence because such findings are supported by substantial evidence. With
regard to the exoneration of AMC, however, the CA correctly disregarded certain portions of the BMI report
because they were based entirely on conjecture instead of being grounded on substantial evidence. In absolving
AMC, the BMI merely stated that:

The Board cannot believe the foregoing version of F.F. Cruz & Co. because no master/captain with vast
experience as mariner, like Captain Pino of M/T Jasaan, would maneuver his vessel to go a longer travel
with more resistance by the forces of wind and waves, when in fact there is a shorter distance that his
vessels could travel with less effort and no possibility at all that they would hit another vessel in the
recess of maneuvering towards the beach for safety. x x x

Such presumption is unwarranted given the consistent testimonies of F.F. Cruz's witnesses that they saw Jasaan,
with Florida in tow, heading towards the direction of their vessels at the height of typhoon Welpring. In contrast,
the CA's conclusion that AMC's vessels were responsible for the allision were based on the positive testimonies
of F.F. Cruz's witnesses and the admissions of Jasaan's captain and Florida's patron that they indeed moved
during the typhoon. On this score, the findings of the CA are consistent with the trial court.

108
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

REQUISITES FOR THE RIGHT TO RECOVER MUST BE ESTABLISHED BY COMPETENT EVIDENCE

TO HOLD A PERSON AS HAVING CONTRIBUTED TO HIS INJURIES, IT MUST BE SHOWN THAT HE

DISREGARDED WARNINGS OR SIGNS OF IMPENDING DANGER

13. Al Dela Cruz vs. Capt. Renato Octaviano and Wilma Octaviano
G.R. No. 219649, July 26, 2017
Peralta, J.

FACTS:
Before this Court is the Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to reverse
and set aside the Decision of the Court of Appeals (CA) which reversed the Decision of the Regional Trial Court
(RTC) in a civil case for damages.

Capt. Renato Octaviano, together with his mother Wilma and his sister Janet, rode a tricycle driven by Eduardo
Padilla. Wilma and Janet were inside the sidecar of the vehicle, while Renato rode at the back of the tricycle.
Renato was paying Padilla when the car driven by petitioner Al Dela Cruz hit the back portion of the tricycle
where Renato was riding. The force of the impact caused the tricycle to turn around and land on the pavement
near the gutter. By reason of the accident, Renato’s leg was amputated and he spent a total of P623,268.00 for
his medical bills and prosthetics. Thus, Renato and his mother Wilma filed with the RTC a civil case for damages
against Dela Cruz and the owner of the vehicle.

The RTC dismissed the claim of respondents. It also ruled that the liability rests on the tricycle driver who drove
without license and petitioner's contributory negligence in riding at the back of the driver in violation of a Municipal
Ordinance that limits the passengers of a tricycle to three persons including the driver. The CA reversed the RTC.
According to the CA, petitioner was negligent as shown in the police report. It found that petitioner was positive
for alcoholic breath.

ISSUES:
1. Was the car driver Dela Cruz negligent in driving his car at the time of the accident giving the respondents
the right to recover?
2. Was the tricycle driver’s alleged negligence the proximate cause of the accident?

HELD:
1. Yes. After reviewing the records of the case, this Court affirms the findings of the CA. In ruling that
petitioner was negligent, the CA correctly appreciated the pieces of evidence presented by the respondents,
thus:
a. First, there is no question that the plaintiffs suffered damage due to the incident. Renato’s right leg was
crushed and Wilma suffered traumatic injuries/hematoma on different parts of her body.
b. Second, defendant Dela Cruz was guilty of negligence. Two witnesses testified that Dela Cruz appeared
to be drunk on that fateful night. It is established by plaintiffs’ evidence that defendant Dela Cruz drove
the Honda Civic while under the influence of alcohol thus proving his negligence.
c. Third, the direct relation of cause and effect between the damage or injury and the fault or negligence is
clearly present. Had defendant Dela Cruz exercised caution, his Honda Civic would not have collided
with the tricycle and plaintiff’s leg would not be crushed necessitating its amputation. The cause of the
injury or damage to the plaintiff’s leg is the negligent act of defendant Dela Cruz.
d. The last requisite is that there be no pre-existing contractual relation between the parties. It is undeniable
that defendant and plaintiffs had no prior contractual relation, that they were strangers to each other
before the incident happened.

Thus, the four requisites that must concur under Article 2176 are clearly established in the present case. Plaintiffs
are entitled to claim damages.

2. No, it is not correct to impute contributory negligence on the part of the tricycle driver and respondent
Renato when the latter had violated a municipal ordinance that limits the number of passengers for each tricycle

109
for hire to three persons including the driver. Contributory negligence is conduct on the part of the injured party,
contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required
to conform for his own protection. To hold a person as having contributed to his injuries, it must be shown that
he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to
health and body. To prove contributory negligence, it is still necessary to establish a causal link, although not
proximate, between the negligence of the party and the succeeding injury. In a legal sense, negligence is
contributory only when it contributes proximately to the injury, and not simply a condition for its occurrence. In
this case, the causal link between the alleged negligence of the tricycle driver and respondent Renato was not
established. This court has appreciated that negligence per se, arising from the mere violation of a traffic statute,
need not be sufficient in itself in establishing liability for damages.

Even granting that the tricycle driver was proved negligent, his negligence cannot cancel out the negligence of
defendant Dela Cruz, because their liabilities arose from different sources. The obligation or liability of the tricycle
driver arose out of the contract of carriage between him and petitioners whereas defendant Dela Cruz is liable
under Article 2176 of the Civil Code or under quasi-delicts. There is ample evidence to show that defendant Dela
Cruz was negligent within the purview of Article 2176 of the Civil Code, hence, he cannot escape liability.

110
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

ACTUAL OR COMPENSATORY DAMAGES ARE AWARDED PROVIDED THE PECUNIARY LOSS HAS
BEEN DULY PROVEN

14. Teresa Yamauchi vs. Romeo Suniga

G.R. No. 199513, April 18, 2018
Samuel Martires, J.

FACTS:
This is a Petition for Review on Certiorari on the Decision of CA modifying the award of damages by the RTC
granting Yamauchi’s action for Rescission of Contract and Payment of Damages against Suniga.

Sometime in September of 2000, Teresa Yamauchi consulted the husband of her cousin Romeo Suniga, for the
renovation of her house. Believing that Suniga was a licensed architect, Yamauchi agreed to the statement of
estimated cost given by Suniga to her. The renovation of the house started shortly thereafter. Yamauchi initially
gave Suniga P300,000 out of the more than P900,000 estimated cost. Then, Yamauchi followed it with another
P100,000.

In March 2001, Yamauchi inquired to Suniga as to when the project will be completed. In turn, Suniga asked that
additional funds be given. Yamauchi asked Suniga to advance the funds and that the former shall just pay the
latter. Suniga then replied that he had no money and his own house was under construction. Suniga told
Yamauchi that he will just resume the project after the construction of his own house and that the funds should
be available by that time. Before the suspension of the renovation, the completion was at 47.2%.

In the interim, Yamauchi consulted an engineer neighbor. The latter advised her that the cost she has already
spent could already build one house. Thus, Yamauchi sent a letter to Suniga terminating the contract and
demanding payment of P400,000. In turn, Suniga countered that the stoppage of the project was due to
unavailability of funds and that Yamauchi still owes Suniga as he advances some of the costs.

Yamauchi filed a complaint in RTC for Rescission of Contract and Payment of Damages. The trial court adjudged
Suniga liable for breach and ordered him to pay actual damages, exemplary damages, moral damages, and
attorney’s fees.

ISSUE:
Was Yamauchi able to prove that she is entitled to actual damages?

HELD:
No, however, she is entitled to temperate damages. Actual or compensatory damages are those which the injured
party is entitled to recover for the wrong done and injuries received when none were intended. Since it is intended
to compensate for pecuniary loss, two elements must be proven: 1) the fact of injury or loss; and 2) the actual
amount of loss with reasonable degree of certainty premised upon competent proof and the best evidence
available.

In this case, Yamauchi was able to prove that after nine months of the renovation, the project ran at only 47.2%
of completion. However, the partial renovation rendered the house inhabitable to the point that as if it has no
value. The problem here, however, is that, the actual loss suffered by Yamauchi cannot be ascertained as he did
not present any evidence as to the value of the house before and after the renovation. The amount of renovation
which may have benefited Yamauchi are also not determined which may be deducted from the total award.
Nonetheless, in the absence of competent proof on the amount of actual damages suffered, a party is entitled to
temperate damages. The amount of loss of Yamauchi cannot be proved with certainty, but the fact that there has
been loss on her part was established. Thus, we find it proper to award temperate damages in lieu of actual or
compensatory damages. Such amount is usually left to the discretion of the courts but the same should be
reasonable, bearing in mind that temperate damages should be more than nominal but less than compensatory.
To our mind, and in view of the circumstances obtaining in this case, an award of temperate damages equivalent
to P500,000.00 is just and reasonable.

111
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

IN THE ABSENCE OF PROOF THAT THE BREACH WAS ATTENDED BY DELIBERATE INTENT, IT CAN
ONLY BE REGARDED AS SIMPLE NEGLIGENCE

PARTY SUFFERING LOSS OR INJURY MUST EXERCISE THE DILIGENCE OF A GOOD FATHER TO
MINIMIZE THE DAMAGES FROM THE ACT OR OMISSION

15. Ka Kuen Chua vs. Colorite Marketing Corporation

G.R. No. 194027-194028, July 5, 2017
Reyes, J.

FACTS:
These are consolidated petitions for review on certiorari assailing the Decision and Resolution of CA affirming
with modifications the Final Award of the Construction Industry Arbitration Commission (CIAC).

On November 15, 2003, Colorite Marketing Corp. (Colorite) and Ka Kuen Chua Architectural (KKCA) signed a
construction contact whereby the latter undertook to build a four-storey residential/commercial building for the
former on a parcel of land located in Makati City. The parties agreed to full contract price of P33,000,000 subject
among others, to the following stipulations: a) project will commence in seven days from the time KKCA received
a notice to proceed from Calorite and will be completed within 365 days reckoned from the 7 th day after the
release of the down payment; b) in the event that the project is not completed on time, the amount of P10,000
for each calendar days of delayed is allowed; c) only a maximum of 20% of slippage, or 73 calendar days of
delay is allowed; and d) Calorite has the right to take over and complete construction of the project, and all costs
incurred thereby will be deducted from the amount due to KKCA.

To undertake excavation work, Calorite engaged the services of WE Construction Company (WCC). On January
10, 2004, full-blast excavation began. However the excavation resulted in erosion which caused damage to
adjacent property owned by the Hontiveros family. Hold Order was issued directing KKCA to stop immediately
all its excavation activities. The incident resulted in the delay of the project because the Hontiveros family refused
to sign a waiver. After 878 days of delay, Colorite demanded from KKCA to pay damages pursuant to the contract.

ISSUES:
1. Is KKCA liable for the delay caused by the erosion?
2. Is there a contributory negligence on the part of Colorite on the cause of the delay?

HELD:
1. Yes. KKCA is at fault for the erosion, which damaged the Hontiveros property. It is beyond dispute that
the parties expressly agreed that all excavation works are included in KKCA's scope of work, as the general
contractor of the project. In view of the said stipulation, WCC was placed under KKCA's supervision and control.
Note that KKCA commenced performance of its undertakings seven days after the signing of the contract on
December 15, 2003. Therefore, by January 10, 2004, KKCA was already in full control of the project for 19 days.
Within such period, KKCA should have already installed, or was in the process of installing soil protection
measures to ensure safe excavation pursuant to its contractual obligation.

The Court cannot find any justification behind KKCA's failure to insure that damages shall not arise as a result of
the excavation. KKCA employed soil protection only after erosion had already taken place. Indeed, KKCA's failure
to provide sufficient soil protection measures caused the erosion and was the proximate cause which set in
motion the chain of events resulting to the project's delay. KKCA represented itself as capable, competent and
duly licensed to undertake the project. Thus, it is but reasonable to assume that KKCA knows the importance of
soil protection in excavations and the degree of the risks involved in the absence of such protective measures.
However, considering that Colorite never imputed bad faith on the part of KKCA, and in the absence of proof that
the breach was attended by deliberate intent, the same can only be regarded as simple negligence.

2. Yes. While all the foregoing easily points to the conclusion that KKCA is solely to be blamed for the delay
of the project, the Court, however, finds that Colorite is also at fault. From the moment it became apparent that
KKCA paid no heed to Colorite's demand to complete the project, the latter also began contributing to its delay.

112
The law, under Article 19 of the Civil Code, provides that "[e]very 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."

Article 19 of the Civil Code prescribes a primordial limitation on all rights by setting certain standards that must
be observed in the exercise thereof. Accordingly, when it becomes manifest that one's right is exercised in bad
faith for the sole intent of prejudicing another, an abuse of a right exists. However, abuse of a right must, of
course, be proven since bad faith cannot be presumed, and nothing was presented here to establish the same.

The Court finds that in continuing to bind KKCA in the contract, Colorite was not impelled by good intentions.
Article 2203 of the Civil Code is explicit that “The party suffering loss or injury must exercise the diligence of a
good father of a family to minimize the damages resulting from the act or omission in question.” This codal rule
clearly obligates the injured party to undertake measures that will alleviate and not aggravate his condition after
the infliction of the injury, and places upon him the burden of explaining why he could not do so.

113
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

PERSON CLAIMING MORAL DAMAGES MUST PROVE BAD FAITH BY CLEAR AND CONVINCING
EVIDENCE

16. Ong Bun vs. Bank of the Philippine Island

G.R. No. 212362, March 14, 2018
Peralta, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court of petitioner Jose Ong Bun, that
seeks to reverse and set aside the Decision and Resolution of CA dismissing petitioner’s complaint for collection
of sum of money and damages against respondent BPI.

In 1989, Ma. Lourdes Ong, the wife of petitioner, purchased 3 silver custodian certificates (CC) in the Spouses’
name from the Far East Bank and Trust Company (FEBTC). The three CCs have the following common
provisions: 1) This instrument is transferable only in the books of the Custodian by the holder, or in the event of
transfer, by the transferee or buyer thereof in person or by duly authorized attorney-in-fact upon surrender of this
instrument together with acceptable deed of assignment; 2) the holder hereof or transferee can withdraw at
anytime during office hours his/her Silver Certificate of Deposit herein held in custody; and 3)This instrument
shall not be valid unless duly signed by the authorized signatories of the bank and shall cease to have force and
effect upon payment under the terms hereof.

Thereafter, FEBTC merged with BPI about eleven years since the said CCs were purchased. After Ong’s death,
petitioner discovered that the 3 CCs bought from FEBTC were still in safety vault of his deceased wife and were
not surrendered to FEBTC. As such, petitioner sent a letter to BPI to advise him on the procedure for the claim
of the said certificates. BPI replied and informed the latter that upon merger, there were no Silver Certificates of
Deposit outstanding which meant that the certificates were fully paid. BPI further refused to pay petitioner’s claim.

About three years from discovery of the certificates, petitioner filed a complaint for collection of sum of money
and damages against BPI with the RTC of Iloilo which ordered the defendant to pay the plaintiff moral damages,
exemplary damages, attorney’s fees plus cost of suit.

ISSUE:
Was there bad faith on the part of BPI which entitles the petitioner to moral and exemplary damages?

HELD:
No. The award of moral and exemplary damages must be deleted for failure of petitioner to show that respondent
was in bad faith or acted in any wanton, fraudulent, reckless, oppressive or malevolent manner in dealing with
petitioner. “The person claiming moral damages must prove the existence of bad faith by clear and convincing
evidence for the law always presumes good faith. It is not enough that one merely suffered sleepless nights,
mental anguish, serious anxiety, as the result of the actuation of the other party. Invariably, such action must be
shown to have been willfully done in bad faith or with ill motive. Also in contracts and quasi contracts, the Court
has the discretion to award exemplary damages if the defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner. In this case, it appears that respondent had an honest belief that before its
merger with FEBTC, the subject CCs were already paid and cleared from its books, hence, belying any claim
that it acted in any manner that would warrant the grant of moral or exemplary damages.

Award of attorney’s fees must also be omitted. We have consistently held that an award of attorney’s fees under
Article 2208 of the Civil Code demands factual, legal, and equitable justification to avoid speculation and
conjecture surrounding the grant thereof. It is imperative that they are clearly and distinctly set forth in their
decision the basis for the award thereof. It bears reiteration that the award of attorney’s fees is an exception
rather than the general rule, thus, there must be compelling legal reason to bring the case within the exceptions
provided under Article 2208. In this case, RTC merely justified the grant on the reasoning that petitioner was
forced to litigate. It does not fall within the exception under Article 2208.
Thus, even if BPI was held liable for the amount of the CCs, the awards of moral and exemplary damages must
be deleted, as well as the attorney’s fees.

114
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES IS NOT APPLICABLE IN QUASI DELICT

EXEMPLARY OR CORRECTIVE DAMAGES IN QUASI-DELICTS THERE MUST BE GROSS NEGLIGENCE

17. Coca-Cola Bottlers Phils. v. Ernani Guingonia Meñez

G.R. No. 209906; November 22, 2017
Caguioa, J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision of the CA
and the Resolution denying the motion for reconsideration filed by petitioner, Coca-Cola Bottlers Phils., Inc.
(CCBPI).

Respondent Meñez was a frequent customer of Rosante bar and restaurant in Dumaguete City. Meñez went to
Rosante and ordered 2 bottles of beer, pizza and Sprite. As he drank Sprite, the taste was of a different substance
and smelled of kerosene. He then felt a burning sensation in his throat and vomited on the floor. Respondent
then returned the Sprite to the waitresses were and angrily told them that he was served kerosene. Meñez then
immediately reported the incident to the nearby police and requested the latter to accompany him to the Silliman
Medical Center. Meñez had to be confined in the hospital for 3 days. The bottle of Sprite was examined by a
licensed chemist of Siliman University and was later confirmed that the liquid was indeed pure kerosene. As a
result of Meñez filed a complaint against CCBPI and Rosante and prayed for actual moral, exemplary damages
and attorney’s fees.

The RTC Ruling dismissed the complaint for insufficiency of evidence. The CA reversed the decision and ruled
that the RTC erred in dismissing the case for failing to comply with an administrative remedy because it is not a
condition precedent in pursuing a case for damages under Article 2187 of the Civil Code. It also awarded moral,
exemplary damages and attorney’s fees.

ISSUES:
1. Is prior resort to Bureau of Food and Drugs (BFD) necessary for a suit for damages under Art 2187 to
prosper?
2. Is Meñez entitled to moral and exemplary damages, as well as attorney’s fees?

HELD:
1. No. The CA correctly ruled that prior resort to BFD is not necessary for a suit for damages under Article
2187 of the Civil Code to prosper. Article 2187 unambiguously provides that “Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar goods shall be liable for death or injuries caused by any noxious or
harmful substances used, although no contractual relation exists between them and the consumers.”

Quasi-delict being the source of obligation upon which Meñez bases his cause of action for damages against
CCBPI, the doctrine of exhaustion of administrative remedies is not applicable. Such is not a condition precedent
required in a complaint for damages with respect to obligations arising from quasi-delict.

2. No. However, the CA erred in ruling that Meñez is entitled to moral damages, exemplary damages and
attorney's fees. The cases when moral damages may be awarded are specific. Unless the case falls under the
enumeration as provided in Article 2219, which is exclusive, and Article 2220 of the Civil Code, moral damages
may not be awarded.

Apparently, the only ground which could sustain an award of moral damages in favor of Meñez and against
CCBPI is Article 2219 (2) — quasi-delict under Article 2187 causing physical injuries but Meñez has not presented
competent, credible and preponderant evidence to prove that he suffered physical injuries when he allegedly
ingested kerosene from the "Sprite" bottle in question. "Physical effects on the body" and "adverse effect on his
body" are not very clear and definite as to whether or not Meñez suffered physical injuries and if these statements
indicate that he did, what their nature was or how extensive they were. Consequently, in the absence of sufficient
evidence on physical injuries that Meñez sustained, he is not entitled to moral damages.

115
As to exemplary or corrective damages, these may be granted in quasi-delicts if the defendant acted with gross
negligence pursuant to Article 2231 of the Civil Code. Meñez has failed to establish that CCBPI acted with gross
negligence. The Court agrees with the RTC's finding that there was failure on the part of Meñez to categorically
establish the chain of custody of the "Sprite" bottle which was the very core of the evidence in his complaint for
damages and that, considering that the "Sprite" bottle allegedly contained pure kerosene, it was quite surprising
why the employees of Rosante did not notice its distinct, characteristic smell. Thus, Meñez is not entitled to
exemplary damages absent the required evidence. In any event, based on Article 2208 of the Civil Code, Meñez
is not entitled to attorney's fees and expenses of litigation because, as with his claim for exemplary damages, he
has not established any other ground that would justify this award.

116
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

MORAL DAMAGES NOT RECOVERABLE FOR BREACH OF CONTRACTTEMPERATE DAMAGES CAN BE

RECOVERED UPON CLEAR PROOF OF LOSS OF EARNING CAPACITY

18. Spouses Dionisio and Jovita Estrada v. Philippine Rabbit Bus Lines, Inc. & Eduardo Saylan
G.R. No. 203902; July 19, 2017
Del Castillo, J.

FACTS:
This Petition for Review on Certiorari assails the Decision and Resolution of the CA which partially granted the
appeal filed therewith by respondent Philippine Rabbit Bus Lines, Inc. (Philippine Rabbit) and denied petitioners
spouses Dionisio C. Estrada (Dionisio) and Jovita R. Estrada's motion for reconsideration thereto.

A mishap occurred along the national highway in Pangasinan, between the passenger bus driven by Saylan and
owned by Philippine Rabbit Bus, Lines, and the Isuzu truck driven by Urez and registered under Rogelio Cuyton,
Jr. The collision happened at the left lane or the lane properly belonging to the Isuzu truck. The right front portion
of the Isuzu Truck appears to have collided with the right-side portion of the body of the Philippine Rabbit bus.
Dionisio, one of the passengers of the Philippine Rabbit bus, was injured on the right arm. His injured right arm
was amputated and incurred expenses. Estrada argued that pursuant to the contract of carriage between him
and Philippine Rabbit, respondents were duty-bound to carry him safely as far as human care and foresight can
provide from the point of his origin to his destination. Dionisio filed the said complaint wherein he prayed for the
following awards: moral damages, actual damages and attorney's fees. While it did not contest that its bus figured
in an accident, Philippine Rabbit nevertheless argued that the cause thereof was an extraordinary circumstance
or a fortuitous event. Hence, it claimed to be exempt from any liability arising therefrom.

The RTC ruled that there was a breach on contract of carriage and thus entitled to damages. The CA modified
the RTC Decision in that it declared Philippine Rabbit as solely and exclusively liable to Estrada for actual
damages and deleted the award of moral damages and attorney's fees.

ISSUES:
1. Was there evidence presented to prove Philippine Rabbit’s bad faith as to make it liable for moral damages?
2. Are actual damages for loss/impairment of earning capacity recoverable?

HELD:
1. None. Under Art. 2219 of the Civil Code, Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate
result of the defendant's wrongful act or omission. Case law establishes the following requisites for the award of
moral damages: (1) there must be an injury clearly sustained by the claimant, whether physical, mental or
psychological; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission
of the defendant is the proximate cause of the injury sustained by the claimant; and (4) the award for damages
is predicated on any of the cases stated in Article 2219 of the Civil Code.

Since breach of contract is not one of the items enumerated under Article 2219, moral damages, as a general
rule, are not recoverable in actions for damages predicated on breach of contract. As an exception, such
damages are recoverable in an action for breach of contract: (1) in cases in which the mishap results in the death
of a passenger, as provided in Article 1764 in relation to Article 2206(3) of the Civil Code; and (2) in cases in
which the carrier is guilty of fraud or bad faith, as provided in Article 2220.

Moral damages are not recoverable in this case. It is obvious that this case does not come under the first of the
abovementioned exceptions since Dionisio did not die in the mishap but merely suffered an injury. Nevertheless,
petitioners contend that it falls under the second category since they aver that Philippine Rabbit is guilty of fraud
or bad faith. It has been held, however, that "allegations of bad faith and fraud must be proved by clear and
convincing evidence." Unfortunately for petitioners, the Court finds no persuasive proof of such fraud or bad faith.
Clearly, moral damages are not recoverable in this case.

117
2. No. Actual damages for loss/impairment of earning capacity are also not recoverable. In lieu thereof, the
Court awards temperate damages.

Actual or compensatory damages are those awarded in order to compensate a party for an injury or loss he
suffered. They arise out of a sense of natural justice, aimed at repairing the wrong done. To be recoverable, they
must be duly proved with a reasonable degree of certainty. A court cannot rely on speculation, conjecture, or
guesswork as to the fact and amount of damages, but must depend upon competent proof that they have
suffered, and on evidence of the actual amount thereof.

Here, it is unlikely that petitioners presented evidence to prove a claim for actual damages based on
loss/impairment of earning capacity since what they were claiming at the outset was an award for moral damages.
The Court has nonetheless gone over the records to find out if they have sufficiently shown during trial that they
are entitled to such compensatory damages that they are now claiming. Unfortunately, no documentary evidence
supporting Dionisio's actual income is extant on the records.

Nonetheless, since it was established that Dionisio lost his right arm, temperate damages in lieu of actual
damages for loss/impairment of earning capacity may be awarded in his favor.

118
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

MORAL DAMAGES MAY BE RECOVERED ONLY WHEN DEATH OCCURS OR THAT THE CARRIER WAS
GUILTY OF FRAUD AND BAD FAITH

19. Judith and Joyce Darines v. Eduardo Quiñones & Rolando Quitan
G.R. No. 206468; August 2, 2017
Del Castillo, J.

FACTS:
This Petition for Review on Certiorari assails the decision of the CA which reversed and set aside the Decision
RTC of Baguio City for "Breach of Contract of Carriage & Damages."

Judith Darines and her daughter Joyce boarded the Amianan Bus Line from Pangasinan to Baguio City.
Respondent Quitan was driving the bus at that time. While along Kennon Road, the bus crashed into a truck
which was parked on the shoulder of Kennon Road. As a result, both vehicles were damaged; two passengers
of the bus died; and the other passengers, including petitioners, were injured. In particular, Joyce suffered
cerebral concussion while Judith had an eye wound which required an operation. Petitioners argued that
Respondents including the operator of Amianan Bus Line, breached their contract of carriage as they failed to
bring them safely to their destination. Consequently, they prayed for actual, moral, exemplary and temperate
damages, and costs of suit.

The RTC ordered the Respondents to pay moral and exemplary damages and attorney’s fees. The CA reversed
and set aside the RTC Decision and deleted the award of moral damages because petitioners failed to prove
that respondents acted fraudulently or in bad faith, as shown by the fact that respondents paid petitioners' medical
and hospitalization expenses.

ISSUES:
Are petitioners entitled to moral and exemplary damages, as well as attorney’s fees?

HELD:
No. The Court fully agrees with the CA ruling that in an action for breach of contract, moral damages may be
recovered only when a) death of a passenger results; or b) the carrier was guilty of fraud and bad faith even if
death does not result; and that neither of these circumstances were present in the case at bar. The CA correctly
held that, since no moral damages was awarded then, there is no basis to grant exemplary damages and
attorney's fees to petitioners.

To stress, this case is one for breach of contract of carriage (culpa contractual) where it is necessary to show the
existence of the contract between the parties, and the failure of the common carrier to transport its passenger
safely to his or her destination. An action for breach of contract differs from quasi-delicts (also referred as culpa
aquiliana or culpa extra contractual) as the latter emanate from the negligence of the tort feasor including such
instance where a person is injured in a vehicular accident by a party other than the carrier where he is a
passenger.

Clearly, unless it is fully established that negligence in an action for breach of contract is so gross as to amount
to malice, then the claim of moral damages is without merit. Here, petitioners impute negligence on the part of
respondents when, as paying passengers, they sustained injuries when the bus owned and operated by
respondent Quiñones, and driven by respondent Quitan, collided with another vehicle. There being neither
allegation nor proof that respondents acted in fraud or in bad faith in performing their duties arising from their
contract of carriage, they are then not liable for moral damages.

The Court also sustains the CA's finding that petitioners are not entitled to exemplary damages as it may be
awarded only in addition to moral, temperate, liquidated, or compensatory damages. Since petitioners are not
entitled to either moral, temperate, liquidated, or compensatory damages, then their claim for exemplary
damages is bereft of merit. Finally, considering the absence of any of the circumstances under Article 2208 of
the Civil Code where attorney's fees may be awarded, the same cannot be granted to petitioners.Therefore, CA
correctly ruled that petitioners are not entitled to moral and exemplary damages as well as attorney's fees.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

LACK OF DOCUMENTARY EVIDENCE IS NOT FATAL TO A CLAIM FOR THE DECEASED'S LOST EARNING
CAPACITY

20. Vivian Torreon & Felomina Abellana v. Generoso Aparra, et. al.
G.R. No. 188493, December 13, 2017
Leonen, J.

FACTS:
This is a petition for review on certiorari under Rule 45 filed by petitioner Vivian Torreon to modify the CA Decision
wherein the award of actual damages for loss of earning capacity of her deceased husband Rodolfo was deleted.

Petitioner Vivian Torreon and her family disembarked from the motor boat at the municipal wharf of Jetafe, Bohol.
While looking for a vehicle to transport them to the Poblacion of Jetafe, a cargo truck entered the wharf and their
fellow passengers boarded it. Despite being overloaded with passengers, Vivian et. al, had no choice but to
board the truck as they were told that no other vehicle is available to bring them to the población. While
passengers were getting on the truck, Simolde (the owner of the truck) called Felix Caballes (Caballes), the
official truck driver. Caballes approached Simolde but left the engine running. While Simolde and Caballes were
talking, Generoso Aparra, Jr. (Aparra), Simolde's chief diesel mechanic, started driving the truck. However,
instead of taking control of the vehicle, Caballes allowed Aparra to drive. Shortly thereafter, Aparra maneuvered
the truck to avoid hitting a parked bicycle. But as he turned, Aparra had to swerve to the left to avoid hitting
Marcelo Subiano, who was allegedly standing on the side of the road. Because the road was only four (4) meters
and 24 inches wide, rough, and full of potholes, Aparra lost control of the truck and they fell off the wharf.
Consequently, the husband and daughter of Vivian died while Vivian and her other daughter got injured. Vivian
and Abellana filed a criminal complaint for Reckless Imprudence resulting to Double Homicide, Multiple Serious
Physical Injuries and Damage to Property against Aparra and Caballes.

The RTC ruled that Caballes and Aparra committed acts constituting a quasi-delict. Since these acts were the
proximate cause of the deaths of Rodolfo and Monalisa and the injuries sustained by Abellana and Johanna,
Simolde, Caballes, and Aparra were held liable for damages. On appeal, the CA promulgated a Decision holding
Simolde solidarity liable with Caballes and Aparra.

ISSUE:
Should actual damages for loss of earning capacity be awarded to petitioner Vivian even if there is lack of
documentary evidence?

HELD:
Yes. In Pestaño v. Spouses Sumayang, the Court applied Article 2206 of the Civil Code and awarded
compensation for the deceased’s lost earning capacity in addition to the award of civil indemnity. The indemnity
for the deceased’s lost earning capacity is meant to compensate the heirs for the income they would have
received had the deceased continued to live. Pleyto v. Lomboy, 432 SCRA 329 (2004), provided the formula to
compute a deceased’s earning capacity: It is well-settled in jurisprudence that the factors that should be taken
into account in determining the compensable amount of lost earnings are: (1) the number of years for which the
victim would otherwise have lived; and (2) the rate of loss sustained by the heirs of the deceased. Thus, the
formula used by this Court in computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80 - age at
time of death) x (gross annual income - reasonable and necessary living expenses)]. The formula provided in
these cases is presumptive, it should be applied in the absence of proof in terms of statistics and actuarial
presented by the plaintiff.

In civil cases, Vivian is only required to establish her claim by a preponderance of evidence. Allowing testimonial
evidence to prove loss of earning capacity is consistent with the nature of civil actions. In determining if this
quantum of proof is met, this Court is not required to exclusively consider documentary evidence. If coworkers
were deemed competent to testify on the compensation that the deceased was receiving, all the more should an
employer be allowed to testify on the amount she was paying her deceased employee. Abellana, the employer
testified that at the time of his death, deceased Rodolfo was earning P15,000.00 per month. Therefore,
respondent, are ordered to pay solidarily petitioner Vivian B. Torreon the amounts of: a. P50,000.00 as civil

120
indemnity for the death of Rodolfo Torreon; b.P50,000.00 as civil indemnity for the death of Monalisa Torreon; c.
P1,919,700.00 as actual damages for Rodolfo Torreon’s lost earning capacity; d.P100,000.00 as moral
damages composed of P50,000.00 for Rodolfo Torreon’s heirs and P50,000.00 for Monalisa Torreon’s heirs; e.
P10,000.00 as exemplary damages; f.P100,000.00 as attorney’s fees; and g. P50,000.00 as litigation expenses.
An interest at thelegal rate of six percent (6%) per annum shall also be imposed on the total judgment award
computed from the finality of this decision until its actual payment.

121
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

APPELLANT IS CIVILLY LIABLE IN CASES WHEN CIRCUMSTANCES SURROUNDING THE CRIME CALL
FOR THE IMPOSITION OF RECLUSION PERPETUA ONLY

21. People vs. Racal

G.R. No.224886, September 4, 2017
Peralta, J.

FACTS:
This is an ordinary appeal filed by accused-appellant,Roger Racal (Racal), assailing the Decision of the CA which
affirmed, with modification, the Decision of the RTC finding appellant guilty of the crime of murder and imposing
upon him the penalty of reclusion perpetua.

In an Information, Racal was charged with the crime of murder when the said accused, armed with a knife, with
treachery, unexpectedly, attack and use personal violence upon the person of one Jose Francisco by stabbing
the latter, at his body, thereby inflicting a fatal wound and as a consequence of which he died. The prosecution
established that while the “trisikad” drivers were waiting for passengers, Racal told the group of drivers not to
trust Francisco because he is a traitor. Francisco asked Racal why the latter called him a traitor. Without warning,
Racal approached Francisco and stabbed him several times with a knife, hitting him in the chest and other parts
of his body. Racal did not deny having stabbed Francisco but he raised the defense of insanity contending that
he has a predisposition to snap into an episode where he loses his reason and thereby acts outside his conscious
control.

The RTC convicted Racal of murder and sentenced him to the penalty of reclusion perpetua with all its accessory
penalties. He is likewise directed to pay the heirs of the late Jose “Joe” Francisco the amount of Thirty Thousand
Pesos (P30,000.00) as actual damages, Seventy-Five Thousand Pesos (P75,000.00) as civil indemnity, and Fifty
Thousand Pesos (P50,000.00) as moral damages. On appeal, the CA affirmed the conviction but modified the
judgment of the RTC by imposing interest on the damages awarded. Hence, this appeal.

ISSUE:
Is the accused guilty of murder? If yes, what are the civil liabilities of the accused?

HELD:
Yes. The prosecution was able to clearly establish that (1) Francisco was stabbed and killed; (2) appellant
stabbed and killed him; (3) Francisco’s killing was attended by the qualifying circumstance of treachery as testified
to by prosecution eyewitnesses; and, (4) the killing of Francisco was neither parricide nor infanticide.

With respect to appellant’s civil liability, the prevailing rule is that when the circumstances surrounding the crime
call for the imposition of reclusion perpetua only, there being no ordinary aggravating circumstance, as in this
case, the proper amounts should be P75,000.00 as civil indemnity, P75,000.00 as moral damages and
P75,000.00 as exemplary damages, regardless of the number of qualifying aggravating circumstances present.
In conformity with the foregoing rule, the awards granted by the lower courts must, therefore, be modified. Thus,
the award of moral damages should be increased from P50,000.00 to P75,000.00. Appellant should also pay the
victim’s heirs exemplary damages in the amount of P75,000.00. The award of P75,000.00, as civil indemnity, is
sustained. As regards the trial court’s award of actual damages in the amount of P30,000.00, the same must,
likewise, be modified. The settled rule is that when actual damages proven by receipts during the trial amount to
less than the sum allowed by the Court as temperate damages, the award of temperate damages is justified in
lieu of actual damages which is of a lesser amount. Conversely, if the amount of actual damages proven exceeds,
then temperate damages may no longer be awarded; actual damages based on the receipts presented during
trial should instead be granted. The rationale for this rule is that it would be anomalous and unfair for the victim’s
heirs, who tried and succeeded in presenting receipts and other evidence to prove actual damages, to receive
an amount which is less than that given as temperate damages to those who are not able to present any evidence
at all. In the present case, Francisco’s heirs were able to prove, and were awarded, actual damages in the amount
of P30,000.00. Since, prevailing jurisprudence now fixes the amount of P50,000.00 as temperate damages in
murder cases, the Court finds it proper o award temperate damages to Francisco’s heirs, in lieu of actual
damages.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

IN ROBBERY WITH HOMICIDE, CIVIL INDEMNITY AND MORAL DAMAGES ARE AWARDED
AUTOMATICALLY

22. People vs. Bacyaan y Sabaniya

G.R. No. 238457, September 18, 2019
Inting, J.

FACTS:
This is an appeal from the Decision of the CA which affirmed with modification the Decision of the RTC finding
appellants Jojo Bacyaan y Sabaniya (Bacyaan), Ronnie Fernandez (Fernandez), and Ryan Guevarra (Guevarra),
guilty beyond reasonable doubt of the special complex crime of robbery.

The appellants were charged with the crimes of robbery with homicide and serious illegal detention. It was alleged
that when the JMK Bus reached EDSA, the appellants brought out their hidden firearms and announced a hold-
up, and thereafter, robbed and divested the passengers of the bus of their cash, money, cellphones and other
personal belongings. On the occasion of the robbery the appellants pursuant to their conspiracy with intent to
kill, evident premeditation, treachery, and abuse of superior strength, attack, assault, an employ personal
violence upon the driver of the bus and one passenger by shooting them with firearms resulting to the death of
said victims. The appellants likewise seized and detained some passengers both female, in a Mitsubishi
adventure under threats to kill them, thereby depriving them of their liberty.

In their defense, appellants denied that they were participants in the robbery and invoked alibi as defense.

The RTC found the appellants guilty of the crime lodged and they were sentenced to suffer, maximum penalty of
reclusion perpetua for serious illegal detention same with the crime of robbery with homicide and all of them
appellants are ordered to pay the heirs of the 2 victims who were killed the amount of P75K as civil indemnity,
P50,836 as actual damages supported with credible receipts, P50K as moral damages and P30K as exemplary
damages, respectively. On appeal, the CA affirmed the conviction but dismissed the case for serious illegal
detention. Hence, this appeal.

ISSUE:
Are the appellants guilty of the crime charged? If yes, what are the award of damages?

HELD:
Yes. There is robbery with homicide under Art. 294 paragraph 1 of the RPC, when a homicide is committed by
reason of or on occasion of a robbery. In order to sustain a conviction for robbery with homicide, the following
elements must be proven by the prosecution: (1) the taking of personal property belonging to another; (2) with
intent to gain or animus lucrandi; (3) with the use of violence or intimidation against a person; and (4) on the
occasion or by reason of the robbery, the crime of homicide, as used in its generic, sense was committed. In the
present case, there is no doubt, that the above-mentioned elements are present. The candid testimony of one of
the passengers of the bus, held-up by appellants, unmistakably produces a conviction beyond reasonable doubt.

The special complex crime of robbery with homicide under the RPC is penalized with reclusion perpetua to death.
The Court resolves, at this point, to modify the damages awarded by the CA. In robbery with homicide, civil
indemnity and moral damages are awarded automatically without need of allegation, and evidence other than
the death of the victim owing to the crime. Both the RTC and CA were correct in granting these awards, except
that the award should be P100K each. Recent jurisprudence provides that when the penalty to be imposed is
death, civil indemnity and moral damages shall be awarded at P100K each. Apart from civil indemnity and moral
damages, the lower courts likewise properly awarded exemplary damages under Art. 2230 of the Civil Code
because of the presence of an aggravating circumstances and to serve as a deterrent to others similarly inclined.
The Court, however increased the awarded amount from P30K to P100K to conform to prevailing jurisprudence.
The Court likewise increases the amount of temperate damages awarded to the heirs of the passenger who died
from P25K to P50K. In addition, interest at the rate of 6% per annum shal be imposed on all monetary awards
from the date of finality of its Decision until fully paid. Finally, the Court orders appellants to restitute the stolen
items or to pay their monetary value, if restitution is no longer possible.

123
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

GENERALLY, PARENTS ARE PRIMARILY LIABLE FOR THE CIVIL LIABILITY ARISING FROM CRIMINAL
OFFENSES COMMITTED BY THEIR CHILDREN UNDER THEIR LEGAL AUTHORITY

23. CICL XXX vs. People of the Philippines and Glenn Redoquerio
G.R. No. 237334, August 14, 2019
Caguioa, J.

FACTS:
Before the Court is a Petition for Review on Certiorari filed by the accused-appellant CICL XXX assailing the
Decision of the Court of Appeals (CA) which affirmed the Decision RTC in Criminal Case finding CICL XXX guilty
beyond reasonable doubt of the crime of Frustrated Homicide.

The mauling incident took place around 12:30 in the morning when private complainant Glenn Redoquerio
(Redoquerio) was sent by his mother Lolita Redoquerio to buy iced tea powder at a nearby store. There the
accused CICL XXX saw Redoquerio and poked a gun at the latter’s face. However, the gun did not fire. CICL
XXX (minor, 17 years old), Christopher Puyo (Puyo) and Jayjay Narag (Narag) then mauled private complainant
Redoquerio which resulted in the latter’s coma for 7 days.

Accused CICL XXX denied the allegations against him. He stated that at the time of the incident, he and his
family were having a celebration for the New Year in their residence in Quezon City. CICL XXX further argues
that because he was only 17 years old at the time he supposedly committed the crime, then he is presumed to
have acted without discernment, and that it was the burden of the prosecution to prove otherwise.

RTC convicted CICL XXX of the crime of Frustrated Murder. the CA affirmed the RTC's conviction of CICL XXX.

ISSUE:
If CICL XXX is acquitted of the criminal liability of Frustrated Murder, will there still be civil liability?

HELD:
Yes. While CICL XXX is not criminally liable for his acts because the presumption that he acted without
discernment was not overcome, he is still civilly liable for the injuries sustained by Redoquerio. It is well-settled
that "[e]very person criminally liable is also civilly liable. However, it does not follow that a person who is not
criminally liable is also free from civil liability. Exemption from criminal liability does not always include exemption
from civil liability." The foregoing liability is imposed upon CICL XXX's parents because Article 101 of the Revised
Penal Code.

In Libi v. Intermediate Appellate Court, the Court en banc interpreted the above provision to mean that the civil
liability of parents for criminal offenses committed by their minor children is direct and primary. The Court said:
“Accordingly, just like the rule in Article 2180 of the Civil Code, under the foregoing provision the civil
liability of the parents for crimes committed by their minor children is likewise direct and primary, and also subject
to the defense of lack of fault or negligence on their part, that is, the exercise of the diligence of a good father of
a family.”

Under the foregoing considerations, therefore, we hereby rule that the parents are and should be held primarily
liable for the civil liability arising from criminal offenses committed by their minor children under their legal
authority or control, or who live in their company, unless it is proven that the former acted with the diligence of a
good father of a family to prevent such damages. That primary liability is premised on the provisions of Article
101 of the Revised Penal Code with respect to damages ex delicto caused by their children 9 years of age or
under, or over 9 but under 15 years of age who acted without discernment; and, with regard to their children over
9 but under 15 years of age who acted with discernment, or 15 years or over but under 21 years of age, such
primary liability shall be imposed pursuant to Article 2180 of the Civil Code.

Article 101 of the RPC, however, provides that the foregoing liability of CICL XXX's parents is subject to the
defense that they acted without fault or negligence. Thus, the civil aspect of this case is remanded to the trial
court, and it is ordered to implead CICL XXX's parents for reception of evidence on their fault or negligence.

124
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

ACQUITTAL FROM A CRIME DOES NOT NECESSARILY MEAN ABSOLUTION FROM CIVIL LIABILITY

24. Jose Luis Yulo v. Arsenia Celo

G.R. No. 208787; July 30, 2019
Resolution

FACTS:
Sometime in March 1996, Jose Luis G. Yulo (Yulo) was approached by Arsenia Javier Celo (Celo) who presented
herself as the authorized broker/agent of the owners of three parcels of land located in Calamba City. Celo
claimed that the lots were for sale and free from any liens and encumbrances. Having dealt with Celo in the past,
Yulo agreed to purchase the properties. Several months after the issuance and encashment of the checks, Celo
failed to comply with her representations and undertakings. An inquiry with the Register of Deeds of Calamba,
Laguna revealed that the lands were still in the name of the vendors. Moreover, the land was mortgaged to
Express Savings Bank contrary to Celo’s representation that it was free from liens and encumbrances. Yulo
made a final demand upon Celo to comply but the same was unheeded. Hence, Yulo filed a complaint against
Celo. The RTC, after trial, convicted Celo in Criminal Case No. 7310-00-C and ordered her to pay P60,000.00
representing the face value of the check, with interest at the legal rate of 12% reckoned from the date of demand
until full payment. The RTC acquitted Celo in Criminal Case No. 8915-01-C for insufficiency of evidence. Yulo
appealed to the CA on the civil aspect of the case. The CA, however, found the appeal devoid of merit.

Yulo argues that respondent's acquittal based on insufficiency of evidence is an acquittal based on reasonable
doubt which does not extinguish Celo's civil liability. There was no finding at all that the act or omission from
which the civil liability of Celo may arise did not exist. In fact, the CA affirmed the finding of the RTC that while
not all the elements of the crime of estafa with abuse of confidence have been proven by clear and convincing
evidence, the totality of the evidence established estafa through deceit.

ISSUE:
Whether or not Celo remains civilly liable to Yulo despite her acquittal

HELD:
Yes, Celo remains civilly liable to Yulo despite her acquittal.

The consequences of an acquittal on the civil liability of the accused depend on the kind of acquittal ruled by the
trial court. We discussed this in Sanchez v. Far East Bank and Trust Company. The Court explained:

Our law recognizes two kinds of acquittal, with different effects on the civil liability of the accused. First
is an acquittal on the ground that the accused is not the author of the act or omission complained of.
This instance closes the door to civil liability, for a person who has been found to be not the perpetrator
of any act or omission cannot and can never be held liable for such act or omission. There being no
delict, civil liability ex delicto is out of the question, and the civil action, if any, which may be instituted
must be based on grounds other than the delict complained of. This is the situation contemplated in Rule
111 of the Rules of Court. The second instance is an acquittal based on reasonable doubt on the guilt
of the accused. In this case, even if the guilt of the accused has not been satisfactorily established, he
is not exempt from civil liability which may be proved by preponderance of evidence only. (Manatan v.
CA)

Here, Celo was acquitted in Criminal Case No. 8915-01-C due to insufficiency of evidence. There was no
pronouncement by the trial court that the act or omission from which the civil liability may arise did not exist or
that Celo did not commit the acts imputed on her. While the prosecution failed to prove the elements of estafa
under Article 315(1)(b) of the RPC, this does not mean that Celo did not receive the proceeds of the checks and
that she is not liable to return them to Yulo. Her civil liability may therefore still be proven and it would only require
preponderance of evidence.

125
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

NOT ALL WAIVERS AND QUITCLAIMS ARE INVALID AS AGAINST PUBLIC POLICY

25. Spouses Dalen v. Mitsui O.S.K. Lines

G.R. No. 194403, July 24, 2019
Carandang, J.

FACTS:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision
and Resolution of the Court of Appeals filed by Sps. Hipolito Dalen, Sr. and Fe G. Dalen.

Petitioners are heirs and beneficiaries of the missing seafarers of MV Sea Prospect, the vessel which sank and
was chartered by respondent Mitsui O.S.K. Lines (Mitsui) a non-resident corporation not doing business in the
Philippines and owned by Diamond Camellia, S.A., another non-resident corporation not doing business in the
Philippines. Petitioners received full payment of death benefits based on the employment contract as well as the
Collective Bargaining Agreement (CBA). Respondent Mitsui claims that petitioners were accompanied by their
counsel in signing the settlement agreements, affidavits of heirship and receipts of payment before the Overseas
Workers Welfare Association (OWWA). Petitioners then allegedly demanded in writing further compensation in
connection with the sinking of the vessel and threatened that an action arising from tort would be commenced.
After failing to heed petitioner’s demands, Spouses Dalen filed an action for damages. The Labor Arbiter (LA)
however dismissed the complaint on the ground of lack of jurisdiction. Moreover, the LA found that the action
filed by petitioners has already prescribed. Petitioner’s appealed to the National Labor Relations Commission
(NLRC) but it was dismissed. Still aggrieved, petitioners filed a Petition for Certiorari to the CA which was
dismissed. The appellate court reiterated the ruling of the LA and NLRC that the complaint for damages was filed
out of time and that the claim filed with the Admiralty Court of Panama did not toll the prescriptive period for filing
a claim here in the Philippines.

ISSUE:
Are petitioners entitled to damages despite signing quitclaims and waivers?

HELD:
No, the petitioners are not entitled to damages. It is true that quitclaims and waivers are oftentimes frowned upon
and are considered as ineffective in barring recovery for the full measure of the worker's rights and that
acceptance of the benefits therefrom does not amount to estoppel. The reason is plain. The employer and
employee, obviously, do not stand on the same footing. However, not all waivers and quitclaims are invalid as
against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is
binding on the parties and may not later be disowned simply because of change of mind. It is only where there
is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of the settlement
are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is
shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and
binding undertaking.

In this case, petitioners failed to substantiate their claim that they received less of what they are really entitled
based on said Settlement Agreements. They wanted the Court to believe that since their cause of action is for
damages and what they received in accordance with the Settlement Agreement was only those under the POEA
Standard Employment Contract and the overriding CBA, then they are not barred from filing the instant complaint.
Petitioners are misled. As discussed above, the Settlement Agreement signed by petitioners are comprehensive
enough to include even causes of action arising from quasi-delict.

Having settled that petitioners may no longer pursue their claim for quasi-delict based on the grounds discussed
above, it is not necessary to consider herein the issue on prescription of action.

126
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

AWARD FOR DAMAGES AND ATTORNEY’S FEES ARE PROPER WHEN EMPLOYER FAILS TO EXTEND
DISABILITY BENEFITS TO DECEASED SEAMAN

26. Jebsen Maritime Inc. & Estanislao Santiago v. Timoteo Gavina

G.R. No. 199052, June 26, 2019
Carandang, J.

FACTS:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision
and Resolution of the Court of Appeals (CA) filed by Jebsen Maritime, Inc., Van Oord Ship Management B.V.
and/or Estanislao Santiago (petitioners).

Timoteo embarked on vessel M/V Volvos Terranova as a fitter for a four-month employment contract. This was
his 17th employment term after having been a seafarer for 34 years. However, his employment contract was cut
short as he was repatriated due to persistent cough and difficulty in breathing. The initial results of the check-up
showed him having pneumonia and bronchiectasis. The attending physician certified him to be unfit for sea
service with disability grade I. This prompted Timoteo to file the instant complaint to the Labor Arbiter (LA). After
a series of further tests, he was diagnosed of having lung cancer. During the pendency of the case, Timoteo
died.

For their part, petitioners alleged that while it was true that Timoteo embarked the vessel as a fitter, nevertheless,
he disembarked and signed off due to the end of his employment term and was not medically repatriated. Timoteo
never consulted with the company-designated physician in compliance with the three-day mandatory reportorial
requirement under POEA Standard Employment Contract. Petitioners argued that lung cancer is not work-
related, hence, the complaint should be dismissed.

LA rendered its Decision dismissing the complaint. Respondent filed an appeal to the National Labor Relations
Commission (NLRC) which overturned the LA Decision, holding petitioners liable to pay respondent
US$50,000.00 as death benefits, US$2,526.00 as sickness allowance, reimbursement of hospital expenses and
ten percent (10%) of the judgment award as attorney's fees. Both parties moved for reconsideration, hence, on
February 26, 2010, the NLRC issued a Resolution specifying the medical expenses to be paid to respondent
in the amount of P564,099. The NLRC also awarded moral damages amounting to P50,000.00; exemplary
damages amounting to P50,000.00 and ten percent (10%) attorney's fees. CA affirmed the Decision and
Resolution of the NLRC.

ISSUE:
1. Was the award of medical reimbursement proper?
2. Were the award of damages and medical fees proper?

HELD:
(1) Yes. The award of medical expenses is proper, however, there is a need to recompute the amount
actually expended. Under Section 20-A-2 of the POEA-SEC, "if after repatriation, the seafarer still requires
medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time
he is declared fit or the degree of his disability has been established by the company-designated physician."
Petitioners, not having been able to provide the necessary medical attention to Timoteo, and respondent
shouldering the expenses in connection with Timoteo's illness, the amount of laboratory procedures,
hospitalization bills, doctors' professional fees, medicines and medical apparatus should be reimbursed to
respondents. However, upon checking the receipts presented by respondent, it is proper to recompute the same,
hence, the correct medical expenses to be reimbursed to respondent should be P309,156.93.

(2) Yes. The award of moral damages, exemplary damages and attorney's fees are proper.
As stated by the NLRC in its Decision, "After the check-up, disability benefits (sic) was not extended to the
deceased seaman. This to us (sic) evinced is bad faith on the part of the respondent."

127
Bad faith is not simply bad judgment or negligence. "It imports a dishonest purpose or some moral obliquity and
conscious doing of wrong. It means a breach of a known duty through some motive or interest or ill will that
partakes of the nature of fraud." Verily, since petitioners are in bad faith, the award of moral damages amounting
to fifty thousand pesos (P50,000.00) is proper.

As to the award of exemplary damages, the New Civil Code provides that, "exemplary or corrective damages
are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated
or compensatory damages." To discourage other employers who may be emboldened to follow the example of
petitioners in trying to evade liability, the award of exemplary damages amounting to fifty thousand pesos
(P50,000.00) is proper.

Lastly, as to the attorney's fees, the Supreme Court provides that, "The Court also holds that [respondent] is
entitled to attorney's fees in the concept of damages and expenses of litigation. Attorney's fees are recoverable
when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest."
Moreover, under Article 2208 of the New Civil Code, attorney's fees may be recovered in actions for indemnity
under workmen's compensation and employer's liability laws. Hence, the award of attorney's fees ten percent
(10%) of the aggregate monetary awards is warranted.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

AS A GENERAL RULE, CORPORATIONS ARE NOT ENTITLED TO MORAL DAMAGES

27. Chevron Philippines, Inc. (Formerly Known As Caltex Philippines, Inc.) vs. Leo Z. Mendoza
G.R. Nos. 211533 & 212071, June 19, 2019
Caguioa, J.

FACTS: Mendoza applied with Caltex for dealership of a company-owned service station in Virac, Catanduanes
and was able to pass the necessary requisites and examinations. The dealer selection board of Caltex, however,
awarded the Virac dealership to the Spouses Francisco as the husband happened to be the grandson of the
owner/lessor of the lot occupied by the Virac service station. Dissatisfied with the result of his application,
Mendoza wrote the President of Caltex a letter of protest, stating that there was indeed an internal arrangement
between the good company and the fortunate lot owner and the same was given priority not based on the
disclosed criteria and qualifications.

Mendoza re-applied for dealership of a dealer-owned service station either in Virac or San Andres, however the
said dealerships were awarded to Mendoza's brother-in-law. Caltex explained to Mendoza that although he is
indeed a member of our dealer pool in the area, this does not, by any means guarantee that he will be chosen
dealer, nor does it create a 'Partnership Inchoate’ and cleared to him that the dealership selection is a highly
competitive process, and that owing to the very limited number of stations available, less than half of the
applicants would ultimately be awarded dealerships.

Discontented with the explanation of Caltex, Mendoza filed his Complaint for damages before the Regional Trial
Court. The however court held in favour of Chervron. Furthermore, considering its stature and prestige in the oil
industry, the RTC deemed reasonable the award moral damages and exemplary damages to Chevron. The RTC
also deemed just and equitable the award of attorney's fees to Chevron since Mendoza's Complaint against it
was unfounded. CA affirmed RTC, but held that Chevron is not entitled to moral and exemplary damages.

ISSUE:
Is Chevron entitled to moral and exemplary damages?

HELD:
NO. Chevron is not entitled to moral and exemplary damages, but the award of attorney’s fees is proper.

A corporation is not as a rule entitled to moral damages because, not being a natural person, it cannot experience
physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish and moral shock.
The only exception to this rule is where the corporation has a good reputation that is debased, resulting in its
social humiliation.

Thus, considering that Chevron is not entitled to moral damages, necessarily, it is likewise not entitled to
exemplary damages. As made clear under Article 2234 of the Civil Code, the plaintiff must show that he is entitled
to moral, temperate or compensatory damages before the court may consider the question of whether or not
exemplary damages should be awarded. Hence, exemplary damages are merely ancillary with respect to moral,
temperate, or compensatory damages. Jurisprudence has held that "this specie of damages is allowed only in
addition to moral damages such that no exemplary damages can be awarded unless the claimant first establishes
his clear right to moral damages."

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

PERSONS GUILTY OF TRAFFICKING ARE LIABLE FOR MORAL AND EXEMPLARY DAMAGES

28. People of the Philippines vs. Susan Sayo and Alfredo Roxas
G.R. No. 227704, April 10, 2019
Caguioa, J.

FACTS: AAA, BBB, and CCC known as the "plaza girls" disclosed that several months prior to November 15,
2005, these "plaza girls" have been under the control and supervision of Sayo as commercial sex workers. AAA
and BBB were minors. Whenever they have customers, Sayo would bring them either to a motel or to Alfredo
Roxas’ house who provides them a room for One Hundred Pesos (P100.00) for thirty (30) minutes use of the
room. Roxas also provides condom for the male customers at Thirty Pesos (P30.00).The Criminal Investigation
and Detection Group-Women and Children Complaint Division (CIDG-WCCD) conceptualized an entrapment
operation called "Oplan Sagip Angel” from which both Sayo and Roxas were arrested.

For his part, Alfredo Roxas, claimed that on the night of November 15, 2005, he was sleeping in his house in
Baltazar Street, Sto. Tomas. He was awakened by the barks of the dogs. He went outside to see for himself what
was that commotion all about. One of the men asked him if they could rent his room since it was the birthday of
CCC's compadre, but he refused. After rejecting their request for several times, the male persons forced him to
accept the money which turned out to be dusted with ultra violet powder. RTC found Roxas guilty for Qualified
Trafficking in Persons under Section 5 (a) and Section 6 (a) of R.A. 9208, insofar as minors AAA and BBB are
concerned, and is sentenced to suffer life imprisonment and to pay a fine of Two Million Pesos ([P]2,000,000.00).

On appeal, the CA affirmed the RTC Decision with modification, by adding an award of moral and exemplary
damages, but only to AAA and BBB.

ISSUE:
Is a person guilty of Qualified Trafficking in Persons liable for moral and exemplary damages?

HELD:
YES. Roxas is liable for moral and exemplary damages to AAA, BBB, and CCC

Moral damages are prescribed under Articles 2217 and 2219 of the Civil Code while exemplary damages are
prescribed in Article 2229 and 2230 of the same code:

ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act
or omission.

ART. 2219. Moral damages may be recovered in the following and analogous cases
xxx
(3) Seduction, abduction, rape, or other lascivious acts;
xxx

ART. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good,
in addition to the moral, temperate, liquidated or compensatory damages.

ART. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed when the
crime was committed with one or more aggravating circumstances. Such damages are separate and distinct from
fines and shall be paid to the offended party.

Moral and exemplary damages of P500,000.00 and P100,000.00, respectively, are ordinarily awarded in cases
of Trafficking in Persons as a prostitute. The ratio for the award of damages in said cases was explained in
People v. Lalli:

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 The criminal case of Trafficking in Persons as a Prostitute is an analogous case to the crimes of seduction,
abduction, rape, or other lascivious acts. In fact, it is worse. To be trafficked as a prostitute without one's
consent and to be sexually violated four to five times a day by different strangers is horrendous and atrocious.
There is no doubt that Lolita experienced physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, and social humiliation when she was trafficked as a
prostitute in Malaysia. Since the crime of Trafficking in Persons was aggravated, being committed by a
syndicate, the award of exemplary damages is likewise justified.

In the instant case, while the Information alleged that Roxas "received and harbored" AAA, BBB, and CCC, it
was not proven during the trial that Roxas directly participated in their prostitution or solicited or assigned
customers for them. However, his act of renting out a room in his house promoted and facilitated their prostitution.
Roxas profited from the rental of the room and his actions are just as deplorable.

Thus, Roxas is liable to pay moral and exemplary damages to AAA, BBB, and CCC of P100,000.00 and
P50,000.00 each. The monetary awards due to the victims shall earn legal interest of six percent (6%) per annum
from finality of judgment until full payment.

131
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

AWARD OF EXEMPLARY DAMAGES IN THE ABSENCE OF AGGRAVATING CIRCUMSTANCES

29. GUY vs TULFO

G.R. No. 213023, April 10, 2019
Leonen, J.

FACTS:
An article was written by respondent Tulfo, which was published in Abante Tonite, alleging that while
petitioner Guy was being investigated for tax fraud by the Revenue Integrity Protection Service; he sought the
help of the former Department of Finance Secretary Amatong to suppress evidence against him. Upon knowledge
of the article, petitioner filed a libel case against respondents. RTC found respondents guilty of libel, hence
ordered them to pay petitioner: (1) ₱5,000,000.00 as actual damages; (2) ₱5,000,000.00 as moral damages; and
(3) ₱211,200.00 as attorney's fees. Upon appeal, the CA affirmed the decision, however, the award of actual
damages for lack of factual basis.
Petitioner claims that contrary to the CA’s findings, there is factual and legal basis for the award of actual
damages since it had been established in the trial court proceedings that he may be able to earn ₱50,000,000.00
in 10 years. In addition, even if no sufficient basis for the award of actual damages, he asserts that he is still
entitled to temperate damages since temperate damages may be awarded even without competent proof, as
long as the court finds that the victim has incurred some pecuniary loss.
Respondent Tulfo avers that the CA correctly deleted the award of actual damages for lack of sufficient
legal basis. Maintaining further that the petitioner is not entitled to exemplary damages since it may only be
awarded when the crime was committed with one or more aggravating circumstances. Respondents insist that
the amount of moral damages should also be deleted.

ISSUES:
Whether or not there is sufficient factual basis for an award of actual damages;
Whether or not petitioner Michael C. Guy is entitled to moral damages;
Whether or not he is entitled to exemplary damages.

HELD:

No, there is no sufficient factual basis for an award of actual damages. Actual damages are
"compensation for an injury that will put the injured party in the position where it was before the injury. They
pertain to such injuries or losses that are actually sustained and susceptible of measurement." Actual damages
constitute compensation for sustained pecuniary loss. Nevertheless, a party may only be awarded actual
damages when the pecuniary loss he or she had suffered was duly proven. In the case at bar, save for his
testimony in court, he presented no evidence to support his claim. His allegation of possibly earning
₱50,000,000.00 in 10 years is a mere assumption without any foundation. This bare allegation is insufficient to
prove that he has indeed lost ₱5,000,000.00 as earnings. As held in jurisprudence, the award of unrealized profits
cannot be based on the sole testimony of the party claiming it.

Yes, petitioner is entitled to moral damages. Moral damages are compensatory damages awarded for
mental pain and suffering or mental anguish resulting from a wrong. Under Article 2219 of the Civil Code, moral
damages may be recovered in cases of libel, slander, or defamation. While no proof of pecuniary loss is
necessary in order that moral damages may be awarded, the amount of indemnity being left to the discretion of
the court, it is nevertheless essential that the claimant should satisfactorily show the existence of the factual basis
of damages and its causal connection to defendant's acts. In the case at bar, petitioner‘s family were displeased
with him for being accused of committing illegal and corrupt acts. He was berated by his mother Tor having
humiliated their family. His children were questioned at school. Hence, the award is proper.

Yes, petitioner is entitled to exemplary damages. Exemplary damages may be awarded even in the
absence of aggravating circumstances. It may be awarded where the circumstances of the case show the highly
reprehensible or outrageous conduct of the offender. Jurisprudence sets certain requirements before exemplary
damages may be awarded, to wit:

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(1) They may be imposed by way of example or correction only in addition, among others, to compensatory
damages, and cannot be recovered as a matter of right, their determination depending upon the amount of
compensatory damages that may be awarded to the claimant;
(2) the claimant must first establish his right to moral, temperate, liquidated or compensatory damages; and
(3) the wrongful act must be accompanied by bad faith, and the award would be allowed only if the guilty party
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

In the case at bar, respondents published the libelous article without verifying the truth of the allegations
against petitioner. As the CA found, the Revenue Integrity Protection Service only investigates officials of the
Department of Finance and its attached agencies who are accused of corruption. Petitioner, on the other hand,
is no government official and, therefore, beyond the Revenue Integrity Protection Service's jurisdiction. It only
goes to show that respondents did not verify the information on which the article was based.

133
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

A RESCINDED CONTRACT CANNOT BE THE BASIS FOR AN AWARD OF ACTUAL DAMAGES

30. Heirs of Asis, Jr. v. G.G. Sportswear Manufacturing Corp.,

G.R. No. 225052, March 27, 2019
Reyes, J. Jr.

FACTS:
This case is a Petition for Review on Certiorari under Rule 45 assailing the decision of the CA in so far
as it deleted the amount of actual damages and attorney's fees. The petitioners are the heirs of Dominador S.
Asis, Jr. while the respondent is G.G. Sportswear Manufacturing Corporation and Nari K. Gidwani.
April 2, 1996, respondents G.G. Sportswear Manufacturing Corporation and Nari K. Gidwani signified
their intent to purchase Filipinas Washing Company, Inc. (FWC) through a letter addressed to the latter's
President, Dominador S. Asis, Jr. The petitioners were also stockholders of FWC. After more than two months
of negotiations, the parties entered into a Letter-Agreement, whereby the respondents undertook to purchase
FWC under the terms and conditions set forth in the contract. Respondent failed to comply with its undertaking
of paying FWC obligations with Westmont Bank and Equitable Banking Corporation. This prompted petitioner to
file an action for rescission and damages against respondent. The case was first raffled to RTC of Pasig, Branch
263, however, pursuant to the Order of the former Court, it was re raffled to Branch 268 which found respondent
to have breached the Letter-Agreement. Hence, the contact was rescinded and award of actual damages and
attorney’s fees were made in favour of petitioners. Upon appeal, CA deleted the award of actual damages and
attorney’s fees.
Petitioners claims that it is entitled to actual damages due to the fact that by reason of respondent’s
default, they were constrained to place FWC under rehabilitation, for which they suffered consequential damages
in the amount of Pl2,568,493.18. On the other hand, CA argues that petitioners are not entitled to award of actual
damages for failure to find basis therefor, since there were no receipts or any competent evidence on record to
prove the alleged cost and the RTC Decision did not explain how it arrived with the said figures. In addition, the
award of attorney’s fees is also not proper since RTC failed such award in the decision.

ISSUE:
Whether or not actual damages may be awarded based on a rescinded contract.

HELD:
No, petitioners are not entitled to the award of actual damages for lack of evidentiary basis. This Court
has, time and again, ruled in no uncertain terms that actual or compensatory damages cannot be presumed but
must be proved with reasonable degree of certainty. In the case at bar, petitioners argue that the basis of RTC’s
award for actual damages were based on exhibits “E to BB”. However, these exhibits were presented before
Branch 263 and were not transmitted to Branch 268 for examination to aid it in its decision, hence, leaving clouds
of doubts as to how the latter court arrived at said figures. Further, even a careful reading of the transcript of
stenographic of the hearings before Branch 263 on the matter would show that no such amount of actual
damages was proven with the reasonable certainty contemplated by our jurisprudential rules on the matter.
In addition, it was erroneous to include petitioners’ outstanding loan obligation as part of consequential
damages since the agreement has been rescinded. Mutual restitution is required in cases involving rescission.
This means the parties are brought back to their original status prior to the inception of the contract. Since
petitioners are originally liable for the loan obligations, then by virtue rescission, these obligations are still their
liability. Rescission is not merely to terminate the contract and release the parties from further obligations to each
other, but to abrogate it from the beginning and restore the parties to their relative positions as if no contract has
been made. Hence, petitioners' outstanding loan obligations with the banks cannot be made part of the
consequential damages it suffered due to the rescission of the Letter-Agreement.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

RES IPSA LOQUITOR

EXEMPLARY DAMAGES MAYBE AWARDED EVENT IF THE ACT WAS NOT DONE IN A WILLFUL,
MALICIOUS, OR WANTON MANNER.

31. Interphil Laboratories, Inc. v. OEP Philippines, Inc.,

G.R. No. 203697, March 20, 2019
Reyes, A, Jr..

FACTS:
Sometime in 1998, respondent and petitioner entered into two agreements. The first is a Manufacturing
Agreement whereby petitioner undertook to process and package 90- and 120-mg Diltelan capsules for
respondent under the terms and conditions stated in the Agreement. The other one is where, for the payment of
a packaging materials inspection fee, petitioner agreed to inspect the type and quality of the packaging supplies
delivered to its plant. Consequently, the parties arrangement is that after the delivery of the capsules and the
necessary materials for packaging, petitioner would first conduct an inspection. Thereafter, it would sort, wrap
and box the capsules, and subsequently deliver the same to respondent. In turn, respondent would deliver the
capsules to its client Elan Taiwan.
The conflict arose when respondent received calls from Taiwan regarding a defect in the packaging of
several 90-mg Diltelan capsules .It was further reported that several 90-mg Diltelan capsules were inadvertently
wrapped in foils meant and labeled for 120-mg Diltelan capsules and then placed in boxes meant and labeled for
90-mg Diltelan capsules. Upon knowledge, respondent informed petitioner and recalled and destroyed the
defective capsules. Due to the cost of the recall, respondent demanded reimbursement from petitioner. Petitioner
refused to pay respondent, which prompted the latter filed a complaint in the RTC. The lower court ruled in favour
of respondent finding petitioner liable on the basis of the doctrine of res ipsa loquitor,
In this appeal, petitioner averred that requisites of res ipsa loquitor are not applicable. It asserted that
while it had the exclusive control over the plant where the packaging was effected, it, nevertheless, had no
exclusive control over the packaging materials supplied by respondent. Petitioner argues that the cause of the
injury was the mis-splicing of the foil and, therefore, the defects in the packaging materials supplied by OEP.

ISSUE:

Whether or not petitioner is negligent on the basis of res ipsa loquitor.

Whether or not petitioner is liable for exemplary damages even if it did not act in any willful, malicious, or wanton
manner in bringing about the injury caused by the defective product.

HELD:
Yes, petitioner is liable. Under the doctrine of res ipsa loquitor, where it is shown that the thing or
instrumentality which caused the injury complained of was under the control or management of the defendant,
and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if
those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated,
reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused
by the defendant's want of care.
In the case at bar, the elements of res ipsa loquitor have been clearly established by the facts on record.
First, it is uncontroverted that petitioner had exclusive control in the packaging of the materials since respondent
would receive the packaged in sealed boxes ready for delivery to the latter’s client. Second, petitioner had
exclusive management and control at the time of the packaging, and as to all the processes appurtenant to the
same. It even charged OEP for "packaging materials inspection fees" in consideration of the former's commitment
to properly inspect the materials delivered to them, which means that any argument on the part of petitioner as
to the quality of the goods received before their faulty packaging goes contrary to their own manifestations. Third,
there is no contributory fault on the part of respondent. Even though it can be argued that the foils delivered by

135
respondent were similar and not distinctly labelled, it is only an immediate cause, the proximate cause of the loss
is still the erroneous packaging performed by petitioner.

Yes. Under Article 2232 of the Civil Code, the court may award exemplary damages if the defendant in
a contract or a quasi-contract acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. The
purpose of exemplary damages is to serve as a deterrent to future and subsequent parties from the commission
of a similar offense. In the case at bar, While Interphil did not necessarily act in a willful, malicious, or wanton
manner, it is clear that it was grossly negligent in its defective packaging. This gross negligence not only
prejudiced the contractual relationship between the parties, but also endangered the health of the end consumers
who received the packages, seen in the fact that the hospitals themselves sent notice of the infirmity after
receiving the defective items. Therefore, the Court adheres to the findings of the lower courts that Interphil is also
liable for exemplary damages to serve as a warning to the public to be more circumspect when it comes to
product handling, particularly those involving the health and safety of the consumers.

136
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

PROXIMATE CAUSE IS THAT CAUSE, WITHOUT WHICH, THE RESULT WOULD NOT HAVE OCCURRED

A DRIVER WHO CAUSES DAMAGE TO ANOTHER THROUGH NEGLIGENCE IN THE PERFORMANCE OF

HIS DUTIES CREATES A REBUTTABLE PRESUMPTION THAT HIS EMPLOYER HAS BEEN NEGLIGENT

32. Padillo v. Magnaye (Notice)

G.R. No. 195692, March 6, 2019
(Mere Resolution issued by SC third division)

FACTS:
This is a Petition for Review on Certiorari1 assailing the September 17, 2010 Decision and February 15,
2011 Resolution of the Court of Appeals which upheld the Regional Trial Court decision finding Gloria Padillo
liable to Christopher Magnaye and Jesus Fernandez for damages.
On December 10, 2002, at around 5:30 p.m., Magnaye parked Nissan Exalta sedan in front of Auto Fix
Shop at the shoulder of Ortigas Avenue Extension, Cainta, Rizal. He left the engine running as he ran to the shop
to grab some documents from his father-in-law, Gaspar San Buenaventura.A few minutes after entering the shop,
Magnaye heard a loud crash. He later discovered that a Hino Bus, driven by Ramon Lojo, crashed into the rear
portion of a passenger jeepney, driven by Guidofredo Soiamillo, Jr., which had stopped behind Magnaye's car.
Due to the impact, the jeepney rear-ended Magnaye's car, pushing it forward to hit a nearby electric post. San
Buenaventura witnessed the entire collision since he had been standing outside the shop. Magnaye filed a
Complaint for Damages against Gloria Padillo, the owner of the Hino Bus, and Jesus Fernandez, the jeepney
owner. He sought the payment of actual damages, transportation expenses, moral damages, and attorney's fees.
In his Answer,Fernandez contended that the proximate cause of the damages to Magnaye's car was the
Hino Bus driver's negligence, since the impact of the collision propelled the jeepney forward, hitting Magnaye's
car. Meanwhile, Padillo, in her Answer, asserted that she exercised diligence in selecting and supervising her
employees. She added that the proximate cause of the incident was Magnaye's and Fernandez's negligence in
failing to park their vehicles properly.
The Regional Trial Court held Padillo liable to Magnaye and Fernandez for damages. It found that Padillo
failed to exercise the diligence required in the selection and supervision of the driver of her Hino Bus.It explained
that while the registered owner of the Hino Bus was Ventures Tour & Transport Services, of which Padillo was
only an incorporator, she did categorically admit in her Answer that she was the owner.

ISSUE:
(1) Whether or not the Hino bus was the proximate cause of the damages to the vehicles.
(2) Whether or not Gloria Padillo can be held liable as owner of the Hino bus.

HELD:
(1) Yes. Vda. de Bataclan v. Medina 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.' 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.
In Raynera v. Hiceta, It has been said that drivers of vehicles "who bump the rear of another vehicle"
are presumed to be "the cause of the accident, unless contradicted by other evidence.The rationale behind the
presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to observe
the vehicle in front ofhim.
Respondent Femandez' s jeepney was in full stop behind respondent Magnaye's Nissan Exalta
sedan.Respondent Magnaye's car only sustained damage because respondent Fernandez's jeepney was
propelled forward by petitioner's Hino Bus. Had the Hino Bus not rear-ended respondent Fernandez's jeepney,
there would have been no damage caused to respondent Magnaye's car.

137
 (2) Yes.When a driver causes damage to another through negligence in the performance of duties, there
arises a rebuttable presumption that the driver's employer has been negligent. To overcome this presumption,
the employer must prove that he or she exercised the diligence of a bonus pater familias in the selection and
supervision of the driver. Absent this, the presumption of negligence becomes conclusive. Here, petitioner failed
to present any evidence that she exercised the required degree of diligence. Thus, she is conclusively presumed
to be negligent, and is liable under Article 2176 and 2180 of the Civil Code.

138
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

WHOEVER BY ACT OR OMISSION CAUSES DAMAGE TO ANOTHER, THERE BEING FAULT OR

NEGLIGENCE, IS OBLIGED TO PAY FOR THE DAMAGE DONE

33. VDM Trading, Inc. v. Carungcong

G.R. No. 206709, February 06, 2019
Caguioa, J.

FACTS:
In December 1998, while the petitioners Sps. Domingo were in the United States, petitioner Nena's
sister, Nancy Lagman-Castillo , discovered that soapy water was heavily penetrating through the ceiling of their
Unit at Wack Wack Twin Towers Condominium. Wack Wack's Acting Property Manager, Arlene Cruz, who
supposedly revealed that she previously conducted an inspection on the Unit and found that the strong leak
apparently came from Unit 2308B-1, which is located directly above the Unit. It is owned by the Carungcongs but
leased by Tan at that time. Cruz allegedly explained that Unit 2308B-1's balcony, which was being utilized as a
laundry area, had unauthorized piping and plumbing works installed therein, which were in violation of respondent
Wack Wack's rules and regulations, as well as the building's original plans. For this reason, on behalf of the
petitioners Sps. Domingo, Atty. Villareal sent a letter dated December 16, 1998, demanding that respondents
Wack Wack and Carungcong make restoration works and/or pay for the damages caused upon Unit 2208B-
1which amounted to P490,635.00. Several demand letters were sent by the counsel of the petitioners Sps.
Domingo to respondents Wack Wack, Carungcong, Tan, and Golden Dragon for the payment of the amount
quoted but to no avail. Hence, the petitioners Sps. Domingo were constrained to file their Complaint.
The cause of action against Tan is based on the supposed "unauthorized installation of plumbing in the
balcony of Unit 2308-B1 and x x x unauthorized conversion of said balcony into a laundry/wash area" undertaken
by Tan. As regards, respondent Carungcong, she was being held solidarity liable with respondent Tan as the
registered owner of Unit 2308-B1, allegedly failing in her responsibility of ensuring that Tan is complying with all
of the rules and regulations of respondent Wack Wack. With respect to respondent Wack Wack, the cause of
action was based on the latter's alleged act of being "utterly negligent in failing to enforce and implement the
Association's Rules and Regulations prohibiting illegal or unauthorized constructions, additions, or alteration by
tenants to their units."
Respondent Wack Wack alleged that if there was indeed any damage caused on the Unit, it would have
been due to Tan's wrongdoing and the failure of respondent Carungcong to diligently and regularly monitor the
former's activities.
Respondent Carungcong, on the other hand, argued that the soapy water which seeped through the
ceiling of the Unit did not come from the balcony of her unit, Unit 2308B-1. Also, the installation of piping and
plumbing works done by Stalwart was done with the permission and approval of Golden Dragon. She countered
that if there was any defect in the plumbing works, the damages on the Unit should be assessed against Golden
Dragon and Stalwart.
ISSUE:
Whether or not Carungcong and Wackwack are liable for damages caused to the unit of Spouses Domingo.

HELD:
No. By alleging that damage was caused to their property by virtue of the respondents' individual and
collective fault and/or negligence, the petitioners' cause of action is anchored on quasi-delict. According to Article
2176 of the Civil Code, 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.A quasi-delict has the following elements: a) the damage suffered by
the plaintiff; b) the act or omission of the defendant supposedly constituting fault or negligence; and c) the causal
connection between the act and the damage sustained by the plaintiff, or proximate cause.
A perusal of the evidence on record shows that the foregoing elements of a quasi-delict are absent
insofar as respondents Carungcong and Wack Wack are concerned. Aside from the purely self-serving testimony
of Atty. Villareal, the sole witness of the petitioners who is also the petitioners' counsel, there was no sufficient
evidence presented to show the extent of the damage caused to the Unit.As correctly found by the CA, the
photographs offered into evidence by the petitioners merely depict a wet bed, wet floor, and wet cabinet
apparently taken from one room only, i.e., the master bedroom. The CA was correct in its assessment that "[n]o
photographs were presented to prove that the other rooms of Unit 2208B-1 were also damaged by the leak."

139
 Fault or negligence on the part of respondents Carungcong and Wack Wack was also not proven. The
Court has held that in a cause of action based on quasi-delict, the negligence or fault should be clearly
established as it is the basis of the action. As to the supposed fault or negligence of respondent Carungcong,
while it is undisputed that plumbing works were done on the balcony of the unit owned by respondent
Carungcong, there is no evidence presented that suggests that such plumbing works were illegally or negligently
made. The petitioners could not even point out what specific rule or regulation was supposedly violated by
respondent Carungcong or her lessee, Tan, in undertaking the plumbing works. There was no proof offered
showing that such plumbing works were even prohibited, disallowed, or undertaken in a negligent manner. With
respect to the supposed negligence on the part of respondent Wack Wack, the petitioners do not even dispute
that under the Amended Master Deed, respondent Wack Wack holds title over and exercises maintenance and
supervision only with respect to the common areas.
Proximate cause between the supposed damage caused and the plumbing works undertaken was not
established. The claim that a supposed leak in the plumbing works located in the balcony of Unit 2308B-1 caused
the leakage of soapy water in various parts of the Unit, including the various bedrooms inside the Unit, is highly
doubtful and illogical. No witness or document establishing a causal link between the plumbing works and the
damage to the Unit was offered. The petitioners could have utilized assessors or technical experts on building
and plumbing works to personally examine and assess the damage caused to the Unit to provide some
substantiation to the claim of proximate cause.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

NEGLIGENCE IS A RELATIVE OR COMPARATIVE CONCEPT. ITS APPLICATION DEPENDS UPON THE

SITUATION THE PARTIES ARE IN AND THE DEGREE OF CARE AND VIGILANCE WHICH THE
PREVAILING CIRCUMSTANCES REASONALY REQUIRE

34. DR. CONSOLACION S. CALLANG, petitioner, vs. COMMISSION ON AUDIT, respondent

G.R. No. 210683. January 8, 2019
J.C. REYES, JR., J

FACTS:
This is a petition for certiorari under Rule 64 of the Revised Rules of Court which seeks to reverse and set aside
the Decision of the Commission on Audit (COA) finding petitioner Dr. Consolacion S. Callang (Callang) negligent
in the loss of the amount of P537,454.50 through robbery.

Petitioner, who was then a District Supervisor of Bambang District I, Nueva Vizcaya, DepEd, encashed various
checks for the payment of the 2005 Year-End Bonus and Cash Gift of the teaching and non-teaching personnel
of said District. After her transaction with the bank, petitioner had lunch together with other principals from
Bambang District Schools at a nearby fast-food restaurant. Then, she returned to her office to personally
distribute the bonuses to the concerned personnel — P537,454.50 out of the total amount remained because not
all personnel were present. Petitioner wanted to entrust the remaining cash to Lubong, the District Statistician,
for safekeeping, but the latter refused prompting petitioner to bring the money home instead. The next day,
petitioner first went to her granddaughter before heading for her office. While she was on board a jeepney, one
of her co-passengers declared a robbery. The robber took the bag of money petitioner was carrying as well as
her personal belongings.

In ascribing negligence on Callang, the COA noted that she: (1) opted to have her lunch at a fast-food restaurant
instead of going back directly to her school; (2) brought home the money in spite of the existence of a safety
cabinet in her office; and (3) stopped by her granddaughter's school before going to her office the following day.
The COA finds Callang's choice to bring home the money to be negligent falling below the standard of diligence
to be observed on such occasion. Its conclusion that Callang was negligent is primarily due to the fact that she
was aware of the presence of a safety deposit box inside the office and still decided to bring the money home.

On the other hand, Callang insisted that she had no choice but to bring the money home because Lubong, who
had custody of the safety cabinet, did not want the money to be deposited therein. Further, she explained that it
was unsafe to leave the money inside the office because there was only a steel cabinet, not a safety vault, and
it had been subject to numerous burglaries in the past.

ISSUE:
Is petitioner negligent for bringing home the money intended for the payment of their personnel instead of leaving
it in her office?

HELD:
NO. Petitioner is not negligent for bringing home the money instead of leaving it in her office. Negligence depends
on the factual circumstances of the case. In Bintudan v. Commission on Audit , the Court expounded that
negligence is a fluid concept highly dependent on the surrounding circumstances, to wit: Negligence is the
omission to do something that a reasonable man, guided upon those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something which a prudent man and a reasonable man could
not do. Stated otherwise, negligence is want of care required by the circumstances. Negligence is, therefore, a
relative or comparative concept. Its application depends upon the situation the parties are in, and the degree of
care and vigilance which the prevailing circumstances reasonably require. Conformably with this
understanding of negligence, the diligence the law requires of an individual to observe and exercise varies
according to the nature of the situation in which she happens to be, and the importance of the act that she has
to perform.

Based on the circumstances, petitioner cannot be faulted when she believed that it was safer to bring the money
home where she could always keep a vigilant eye in safekeeping. It can be reasonably seen that she was

141
dissuaded to leave the money in the o office because of the past break-ins and the apprehension of his colleague
to place a substantial amount of money in the safety cabinet. To emphasize, petitioner’s choice of bringing the
money home was not fraught with negligence. In fact, it is not hard to fathom that a reasonable and diligent
person would have acted the same way as petitioner did under the present circumstances. Her office had been
subjected to numerous burglaries in the past and it was not equipped with an adequate compartment where the
money can be safely stored until the following day. Without a safety vault, a would-be intruder would not find it
difficult to force open the steel cabinet and steal the money deposited therein. Consequently, petitioner’s decision
to bring the money home was the reasonable and responsible choice given the situation. Hence, a thorough
review of the records yields no other conclusion but that petitioner exercised sufficient diligence in deciding to
bring the money home instead of leaving it in the office.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

IN VIEW OF THE COURT’S RULING IN PEOPLE VS. JUGUETA, THE DAMAGES AWARDED TO THE HEIRS
OF THE VICTIM IN THE CRIME OF HOMICIDE SHOULD BE P50,000.00 AS CIVIL INDEMNITY AND
P50,000.00 AS MORAL DAMAGES

35. PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. RODEL MAGBUHOS * y DIOLA alias "BODIL",
accused-appellant.
G.R. No. 227865. November 7, 2018.
CAGUIOA, J

FACTS:
This is an appeal from the Decision of the Court of Appeals 5th Division which affirmed with modification as to
the award of damages, the Decision of the RTC finding accused-appellant Rodel Magbuhos y Diola alias "Bodil"
(Rodel) guilty beyond reasonable doubt of the crime of Murder.

It was alleged in the Information the two qualifying circumstances of treachery and evident premeditation. Rodel,
on the other hand, raised self-defense. The RTC rejected Rodel's claim of self-defense for failing to substantiate
it with clear and convincing proof. The RTC did not discuss the presence of the qualifying circumstances and yet
found Rodel guilty of the crime of Murder. The CA, on the other hand, found that the qualifying circumstance of
treachery was established. Further, the CA agreed with the RTC that Rodel fell short of proving his claim that he
acted in self-defense. Thus, the CA found no reason for disturbing the factual findings of the trial court as to the
guilt of the accused. The CA ordered Accused-appellant to pay the heirs of the victim, the amount of: (a)
P75,000.00 as civil indemnity for the death of said victim; (b) P50,000.00 as moral damages; and (c) P30,000.00
exemplary damages provided by the Civil Code in line with recent jurisprudence, with cost. In addition, all award
for damages, shall bear legal interest at the rate of (6%) per annum from the date of finality of judgment until fully
paid, in consonance with the case of People v. Lucero.

ISSUE:
Whether the CA gravely erred in qualifying the crime to Murder despite the absence of clear and convincing
evidence supporting the presence of treachery or evident premeditation as alleged in the information, hence, the
award of exemplary damages should be modified to conform with prevailing jurisprudence.

HELD:
YES. It is established that qualifying circumstances must be proved with the same quantum of evidence as the
crime itself, that is, beyond reasonable doubt. Thus, for Rodel to be convicted of Murder, the prosecution must
not only establish that he killed Enrique; it must also prove, beyond reasonable doubt, that the killing was attended
by treachery or evident premeditation. These, however were not established in this case. With the removal of the
qualifying circumstances of treachery and evident premeditation, the crime is therefore Homicide and not Murder.
In view of the Court's ruling in People v. Jugueta, the damages awarded in the questioned Decision are hereby
modified that Rodel is ordered to pay the heirs of the victim P50,000.00 as civil indemnity and P50,000.00 as
moral damages.

143
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

THE ABSENCE OF GOOD FAITH IS ESSENTIAL TO ABUSE OF RIGHT. THE EXERCISE OF A RIGHT ENDS
WHE THE RIGHT DISAPPEARS AND IT DISAPPEARS WHEN IT IS ABUSED, ESPECIALLY TO THE
PREJUDICE OF OTHERS

36. METROHEIGHTS SUBDIVISION HOMEOWNERS ASSOCIATION, INC., petitioner, vs. CMS

CONSTRUCTION AND DEVELOPMENT CORPORATION, TOMASITO T. CRUZ, TITA F. CRUZ, SIMONETTE
F. CRUZ, ANGEL T. CRUZ, ERNESTO T. CRUZ and METROPOLITAN WATERWORKS AND SEWERAGE
SYSTEM (MWSS), respondents.
G.R. No. 209359. October 17, 2018
PERALTA, J

FACTS:
This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to reverse and set aside
the Decision and the Resolution of the Court of Appeals (CA) absolving respondents of any liability.

To address the perennial problem of insufficient supply of water in Metroheights Subdivision, petitioner had filed
its application for transfer location of tapping/change size of the water service connection on Visayas Avenue
with respondent MWSS, which the latter approved and implemented; thus, petitioner had uninterrupted water
supply. In 1991, respondent MWSS entered into a contract with respondent CMS Construction for the mainlaying
and rehabilitation of existing water main and appurtenances, and the installation/replacement of water service
connection at Sanville Subdivision, Quezon City. In the process, petitioner's existing water service connection on
Visayas Avenue was cut-off, disconnected and transferred by respondents, and petitioner's homeowners
experienced loss of water supply for three (3) days.

The RTC found respondents liable for damages on the basis of abuse of right under Article 19 of the New Civil
Code, giving credence to petitioner's claim that there was no notice to it prior to the implementation of
respondents' project. The CA reversed the RTC and found that there was no abuse of right committed by the
respondents, as the project was not undertaken without notice to petitioner; that respondents' actions were
merely consequential to the exercise of their rights and obligations to manage and maintain the water supply
system, an exercise which includes water rehabilitation and improvement within the area, pursuant to a prior
agreement for the water supply system.

ISSUE:
Whether the respondents should be held liable for damages for the cutting off, disconnection and transfer of
petitioner's existing separate water service connection on Visayas Avenue without the latter's knowledge and
consent which also resulted in petitioner's subdivision being waterless

HELD:
YES. The respondents should be held liable for damages for the cutting off, disconnection and transfer of
petitioner's existing separate water service connection on Visayas Avenue without the latter's knowledge and
consent which also resulted in petitioner's subdivision being waterless. Article 19 of the New Civil Code deals
with the principle of abuse of rights, thus: 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."The
principle of abuse of rights departs from the classical theory that 'he who uses a right injures no one.' The modern
tendency is to depart from the classical and traditional theory, and to grant indemnity for damages in cases where
there is an abuse of rights, even when the act is not illicit." "Article 19 of the New Civil Code was intended to
expand the concept of torts by granting adequate legal remedy for the untold number of moral wrongs which is
impossible for human foresight to provide, specifically in statutory law. If mere fault or negligence in one's acts
can make him liable for damages for injury caused thereby, with more reason should abuse or bad faith make
him liable. The absence of good faith is essential to abuse of right. Good faith is an honest intention to abstain
from taking any unconscientious advantage of another, even through the forms or technicalities of the law,
together with an absence of all information or belief of fact which would render the transaction unconscientious.
In business relations, it means good faith as understood by men of affairs." "While Article 19 of the New Civil
Code may have been intended as a mere declaration of principle, the 'cardinal law on human conduct' expressed

144
in said article has given rise to certain rules, e.g., that where a person exercises his rights but does so arbitrarily
or unjustly or performs his duties in a manner that is not in keeping with honesty and good faith, he opens himself
to liability. The elements of an abuse of rights under Article 19 are: (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." Considering that respondents
would disconnect and change petitioner's existing water line tapped from Visayas Avenue to another tapping
source, good faith and prudence dictate that petitioner should be informed or notified of such actions, as
respondents admitted that prior notice to affected areas is a standard operating procedure. "Having the right
should not be confused with the manner by which such right is to be exercised." Article 19 of the New Civil Code
sets the standard in the exercise of one's rights and in the performance of one's duties, i.e., he must act with
justice, give everyone his due, and observe honesty and good faith. "The exercise of a right ends when the right
disappears, and it disappears when it is abused, especially to the prejudice of others. The mask of a right without
the spirit of justice which gives it life is repugnant to the modern concept of social law. Here it was established
that respondents indeed abused their right. Hence, respondents are jointly and severally liable to pay the
petitioner.

145
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

TEMPERATE DAMAGES CANNOT BE AWARDED IF THERE WAS PROOF OF ACTUAL DAMAGES

EXEMPLARY DAMAGES CANNOT BE AWARDED ABSENT THE REQUISITES UNDER ARTICLE 2232

37. Sulpicio Lines, Inc. vs. Karaan

G.R. No. 208590, October 3, 2018
Tijam, J.

FACTS:
This is a petition for review on certiorari under Rule 45 assailing the Decision of the CA which modified the
amounts of damages awarded by the RTC to herein respondents.

Respondents Major Karaan, et al. were passengers of M/V Princess of the Orient which is owned by petitioner
Sulpicio Lines, Inc. Said vessel sank on September 1998 somewhere between Cavite and Batangas, near
Fortune Island. Respondents thus lodged a complaint based on breach of contract of carriage against petitioner
and prayed for various amounts of damages as passenger/survivors of the petitioner’s vessel. The RTC awarded
moral, temperate and exemplary damages to respondents. Upon appeal, the CA modified the decision by
removing the award of actual damages and instead awarded temperate damages.

Petitioner contests the award of temperate damages in lieu of actual damages, which were purportedly testified
to and duly proven by the respondents. It also objected to the CA’s award of exemplary damages claiming that
the court did not find any specific acts of negligence or "wanton, fraudulent, reckless, oppressive or malevolent
conduct."

ISSUE:
1. May temperate damages be awarded when the claim for actual damages was proven?
2. May exemplary damages be awarded when the requisite for awarding it under Article 2232 of the Civil
Code is absent?

HELD:
1. No, temperate damages cannot be awarded if there was proof as to the actual damages claimed. Under
Article 2224 of the Civil Code, the law sanctions the award of temperate damages in case of insufficiency
of evidence of actual loss suffered. The records of the case, undoubtedly established that respondents
suffered loss during the unfortunate sinking of M/V Princess of the Orient. However, no independent
proof, other than respondents' bare claims, were presented to provide a numerical value to their loss.
Sans the receipts and the documents supporting the respondent’s claim for actual damages, the same
cannot be awarded. Therefore, the award of temperate damages is proper.

2. No, exemplary damages cannot be awarded absent the requisites under Article 2232 of the Civil Code.
In contracts and quasi-contracts, the Court has the discretion to award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. Exemplary
damages did not have to be specifically pleaded or proved, because the courts had the discretion to
award them for as long as the evidence so warranted. Wanton and reckless are virtually synonymous in
meaning as respects liability for conduct towards others. Wanton means characterized by extreme
recklessness and utter disregard for the rights of others; or marked by or manifesting arrogant
recklessness of justice or of rights or feelings of others. Conduct is reckless when it is an extreme
departure from ordinary care, in a situation in which a high degree of danger is apparent.

However, the records of the case support the conclusion that petitioner was extremely remiss before
and during the time of the vessel's sinking and acted wantonly and recklessly. Petitioner did not endeavor
to dispute the CA's finding that the vessel's Captain erroneously navigated the ship, and failed to reduce
its speed considering the ship's size and the weather conditions. "Exemplary damages are designed by
our civil law to permit the courts to reshape behavior that is socially deleterious in its consequence by
creating negative incentives or deterrents against such behavior." Thus, the captain and crew of a
common carriers should be corrected.

146
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

PLAINTIFF HAS THE BURDEN OF PROOF THAT NEGLIGENT ACT OF EMPLOYEE WAS WITHIN THE
SCOPE OF HIS ASSIGNED TASKS

38. Imperial vs. Heirs of Spouses Bayaban

G.R. No. 197626, October 3, 2018
Leonen, J.

FACTS:
This is a petition for review on certiorari assailing the decision of the CA which affirmed the ruling of the RTC
finding petitioner Raul Imperial solidarily liable with his employee and driver, William Laraga, for damages
suffered by spouses Neil and Mary Lou Bayaban, as a result of Laraga’s negligent operation of the van owned
by Imperial.

The van owned and registered under petitioner Imperial’s name and was driven by Laraga, and the tricycle
boarded by the spouses figured in an accident along Sumulong Highway in Antipolo City. For the injuries they
sustained, the Bayaban spouses had to undergo therapy and post-medical treatment. They demanded
compensation from Imperial, Laraga and the tricycle driver for the hospital bills and loss of income the sustained.
When their demand remained unheeded, they filed a complaint for damages impleading the aforementioned as
defendants. Before the case proceeded to trial, Neil Imperial died and was thus substituted by herein respondent
heirs.

Petitioner maintains that he is not liable because respondents failed to discharge their burden proof that Laraga
was acting within the scope of his assigned tasks at the time of the accident. Respondent heirs, on the other
hand, maintain that Laraga was acting within such scope and that petitioner failed to prove that he exercise due
diligence in the selection and supervision of Laraga.

ISSUE:
Did the respondent heirs sufficiently discharge their burden of proof necessary to hold Imperial vicariously liable
under Article 2180 of the Civil Code?

HELD:
Yes, respondent heirs have discharged the burden of proof that petitioner’s employee, William Laraga, was acting
within the scope of his assigned tasks at the time of the accident. Employers are deemed liable or morally
responsible for the fault or negligence of their employees but only if the employees are acting within the scope
of their assigned tasks. An act is deemed an assigned task if it is "done by an employee, in furtherance of the
interests of the employer or for the account of the employer at the time of the infliction of the injury or damage.”
The burden of proving the existence of an employer-employee relationship and that the employee was acting
within the scope of his or her assigned tasks rests with the plaintiff under the Latin maxim "ei incumbit probatio
qui dicit, non qui negat" or "he who asserts, not he who denies, must prove." Therefore, it is not incumbent on
the employer to prove that the employee was not acting within the scope of his assigned tasks. Once the plaintiff
establishes the requisite facts, the presumption that the employer was negligent in the selection and supervision
of the employee arises, disputable with evidence that the employer has observed all the diligence of a good
father of a family to prevent damage.

With respondents having discharged their burden of proof, the disputable presumption that petitioner Imperial
was negligent in the selection and supervision of Laraga arises. Petitioner had to put forward evidence that he
had exercised due diligence in the selection and supervision of Laraga as his driver to be relieved of liability.
Considering that petitioner failed to dispute the presumption of negligence on his part, he was correctly deemed
liable for the damages incurred by the Bayaban Spouses when the tricycle they were riding collided with the van
driven by petitioner's employee, Laraga.

147
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

EMPLOYEE IS ENTITLED TO ATTORNEY’S FEES UPON AWARD OF BENEFITS PRAYED FOR

39. Horlador vs. Philippine Transmarine Carriers, Inc.

G.R. No. 236576, September 5, 2018
Perlas-Bernabe, J.

FACTS:
This is a petition for review on certiorari assailing the decision of the CA which affirmed the decision of the NLRC
finding petitioner Ariel Horlador entitled to permanent and total disability benefits from respondent Philippine
Transmarine Carriers, Inc. (PTCI), with modification deleting the award of attorney’s fees in his favor.

Respondent PTCI, for and on behalf of its foreign principal respondent Marine Shipmanagement Ltd., hired
petitioner Horlador as a Chief Cook on board the vessel PRAIA. While on board the vessel, petitioner suddenly
felt severe pain on his waist, abdomen and down to his left scrotum. He was advised to undergo repatriation.
Upon arrival in the Philippines, petitioner claimed that he immediately reported to PTCI and asked for referral for
further treatment, but was ignored. He consulted with two other physicians who similarly concluded that the
nature and extent of his illness permanently and totally prohibited him from further working as a seaman. Thus,
he filed a complaint for permanent and total disability benefits against respondent PTCI.

The LA dismissed petitioner’s complaint for lack of merit. Upon appeal to the NLRC, respondent PTCI was
ordered to pay petitioner said benefits along with attorney’s fees. However, upon respondent’s appeal to the CA,
it deleted the award of attorney’s fees.

ISSUE:
Is the award of attorney’s fees proper?

HELD:
Yes, the award of attorney’s fees was proper.

There are two commonly accepted concepts of attorney's fees - the ordinary and extraordinary. In its ordinary
concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal services the
former renders; compensation is paid for the cost and/or results of legal services per agreement or as may be
assessed. In its extraordinary concept, attorney's fees are deemed indemnity for damages ordered by the court
to be paid by the losing party to the winning party. The instances when these may be awarded are enumerated
in Article 2208 of the Civil Code and is payable not to the lawyer but to the client, unless the client and his lawyer
have agreed that the award shall accrue to the lawyer as additional or part of compensation. In labor cases
involving employees' wages and other benefits, the Court has consistently held that when the concerned
employee is entitled to the wages/benefits prayed for, he/she is also entitled to attorney's fees amounting to ten
percent (10%) of the total monetary award due him/her. In this case, the CA erred in deleting the award of
attorney's fees, considering that petitioner was found to be entitled to permanent and total disability benefits and
was forced to litigate to protect his valid claim.

Thus, the reinstatement of such award is in order.

148
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

INDEPENDENT CIVIL ACTIONS REQUIRE NO PRIOR RESERVATION

40. Supreme Transportation Liner, Inc., v. Antonio San Andres

G.R. No. 200444, August 15, 2018
Bersamin, J.

FACTS:
Petitioners Supreme Transportation Liner Inc (Supreme) and Felix Ruz (Ruz) assail the decision of the CA
affirming the judgment of RTC which dismissed their counterclaim on the ground that it would be tantamount to
double recovery of damages.

On Nov. 5, 2002, at around 5:00 AM, Ernesto Belchez was driving a passenger bus, Mabel Tours Bus owned by
Antonio San Andres (San Andres) along Maharlika Highway, Brgy. Malabanban Norte, Candelaria, Quezon.
While traversing the highway, the Mabel Tours Bus sideswiped a Toyota Revo and immediately swerved to the
left but in the process, hit head-on the bus owned by petitioner Supreme which was driven by Ruz.

San Andres filed a complaint for damages against herein petitioners alleging actual damage to Mabel Tour Bus
and unrealized profits. Subsequently, petitioners filed their Answer with Counterclaim, they alleged that San
Andres has no cause of action against them since the vehicular accident was caused by the driver of San Andres
operating the Mabel Tours Bus. By way of counterclaim, Supreme alleged that it suffered damages.

In the course of trial, Jessi Alvarez, Assistant for Operations of Supreme Transportation Liner, Inc., filed a criminal
complaint for reckless imprudence resulting to damage to property against Ernesto Belchez. Belchez was
convicted.

Both the RTC and the CA dismissed San Andres’ complaint as well as petitioners’ counterclaim. CA pointed out
that the petitioners' failure to reserve the civil aspect of the criminal case proscribed them from instituting a
separate civil action based on Article 2176 of the Civil Code

ISSUE:
Did the petitioner’s failure to reserve the civil aspect of the criminal case proscribe them from instituting a separate
civil action based on Article 2176 of the Civil Code?

HELD:
No. As clarified in Casupanan v. Laroya: Under Section 1 of the present Rule 111, what is "deemed instituted"
with the criminal action is only the action to recover civil liability arising from the crime or ex-delicto. All the other
civil actions under Articles 32, 33, 34 and 2176 of the Civil Code are no longer "deemed instituted," and may be
filed separately and prosecuted independently even without any reservation in the criminal action. The failure to
make a reservation in the criminal action is not a waiver of the right to file a separate and independent civil action
based on these articles of the Civil Code.
Nonetheless, we are constrained not to award outright the damages prayed for by the petitioners in their
counterclaim. Article 2177 of the Civil Code and the present version of Section 3, Rule 111 of the Rules of Court,
which is the applicable rule of procedure, expressly prohibit double recovery of damages arising from the same
act or omission. The petitioners' allegation that they had not yet recovered damages from the respondent was
not controlling considering that the criminal case against the respondent's driver had already been concluded.

149
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

UNJUSTLY RETAINING A BENEFIT, MONEY OR PROPERTY MUST BE PRESENT IN UNJUST

ENRICHMENT

41. Iris Rodriguez v. Your Own Home Development Corporation (YOHDC)

G.R. No. 199451, August 15, 2018
Leonen, J.

FACTS:
The petition for review assails the CA decision which overturned the RTC decision ordering Your Own Home
Development Corporation (YOHDC) to pay Iris Rodriguez (Iris) P424,000.00.

Iris’ husband, Tarcisius Rodriguez was the project coordinator of a low-cost housing project which YOHDC was
a part of. Tarcisius was tasked to find and deal with the land needed for the project. Tarcisius found the property
of Rosa Rosillas (Rosillas) for P1,200,000.00. He also used the services of Engineer Senen Delos Reyes (Delos
Reyes) in surveying the property for a fee. Tarcisius misrepresented the amounts payable to YOHDC, which
issued 4 more checks which were deposited in the personal accounts of Sps. Rodriguez.YOHDC discovered the
irregularities, and after failure of Tarcisius to pay, pursued its claim against the banks. Spouses Rodriguez
requested BPI to suspend its action on YOHDC’s claim but BPI denied this request and sent Metrobank Special
Clearing Receipt to reimburse the amounts of the 4 checks totalling P1,508,00.00 to be transferred to YOHDC
account.

Sps. Rodriguez filed a complaint for damages against YOHDC, BPI, Metrobank, Rosillas and Delos Reyes. RTC
dismissed the case. However, it noted that in Delos Reyes’ Answer, he admitted receiving portions of the
proceeds in the amount of P424,000.00. Thus, based on the principle against unjust enrichment, it ordered
YOHDC to reimburse the P424,000.00 to Sps. Rodriguez.

On appeal, CA modified the decision and held that the principle against unjust enrichment did not apply and lent
credence on the affidavit of Delos Reyes which stated that he never received the checks. Thus, CA found that
YOHDC was not liable to the Spouses for the P424,000.00.

ISSUE:
Was YOHDC unjustly enriched due to Sps. Rodriguez’s payment of P424,000.00 to Delos Reyes at their
expense.

HELD:
NO, YODHC was not unjustly enriched. Article 22 of the Civil Code of the Philippines states: Every person who
through an act of performance by another, or any other means, acquires or comes into possession of something
at the expense of the latter without just or legal ground, shall return the same to him. Unjust enrichment has two
(2) elements: a person benefited without a real or valid basis or justification, and the benefit was at another
person's expense or damage

In the case at bar, it is argued that YOHDC unjustly retained benefit at the expense of the Rodriguez Spouses
when the amounts of Delos Reyes' Checks were reimbursed to it. This Court finds that it did not. Metrobank
rightfully returned to YOHDC the amounts in Delos Reyes' and Rosillas' Checks. Considering that Metrobank is
the drawee bank, it is obligated to return the full amounts of the checks upon discovering that they were not paid
to the correct payees. Likewise, it cannot be said that the amounts returned were at the expense of Iris,
considering that the amounts were not meant for the Rodriguez Spouses but for Delos Reyes and Rosillas.
Furthermore, Iris has not proven that Delos Reyes released YOHDC from the payment of its obligation to him.
Hence, this Court cannot assume that YOHDC is no longer obligated to pay Delos Reyes for his services on the
premise that the Rodriguez Spouses paid him a particular amount.For Iris to claim any right to the amounts
returned to YOHDC, she must prove her claim with the required quantum of evidence. As established,
considering there was a previous duly notarized affidavit stating that Delos Reyes did not receive any proceeds
from his Checks, it was incumbent upon Iris to prove by clear and convincing evidence that he indeed had been
paid and that he had released YOHDC from paying him its obligation. However, Iris failed in this respect; thus,
she cannot claim any reimbursement for the returned amount

150
 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

MALICE OR BAD FAITH IMPLIES A CONSCIOUS AND INTENTIONAL DESIGN TO DO A WRONGFUL ACT

42. Spouses Abraham and Melchora Ermino v. Golden Villagae Homeowners Association, Inc.
G.R. No. 180808, August 15, 2018
Caguioa, J.

FACTS:
This petition for review on certiorari filed by petitioners, Spouses Abraham and Melchora Ermino (Sps. Ermino)
assails the CA decision modifying the RTC decision which found both E.B. Villarosa & Partners Co., Ltd. (E.B.
Villarosa) and Golden Villagae Homeowners Association, Inc. (GVHAI) liable for damages by absolving GVHAI
of any laibility.

Sps Ermino are residents of Alco Homes, a subdivision located beside Golden Village Subdivision in Brgy.
Carmen, Cagayan de Oro City. On days prior to August 12, 1995 and September 10, 1995, there was continuous
rain which caused a large volume of water to fall from the higher estate of Hilltop Subdivision, to Alco Homes and
Golden Village. The volume of water directly hit Spouses Ermino's house and damaged their fence, furniture,
appliances and car.

Sps. Ermino filed a complaint for damages against E.B. Villarosa, the developer of Hilltop Subdivision and GVHAI.
Sps Ermino blamed E.B. Villarosa for negligently failing to observe DENR rules and regulations and to provide
retaining walls and other flood control devices. They likewise claimed that GVHAI committed a wrongful act in
constructing the concrete fence which diverted the flow of water to Alco Homes, hence, making it equally liable
to Sps Ermino. E.B. Villarosa averred that the location of the petitioner’s house is at the lower portion of a creek
and that the damage was due to fortuitous event. GVHAI on the other hand, averred that the construction of the
concrete fence was in exercise of its proprietary rights and was done to prevent outsiders from using the steel
grille gate in entering the subdivision.

RTC found E.B. Villarosa and GVHAI jointly and severally liable for damages to Sps Ermino. GVHAI appealed.
CA ruled that there was no liability on the part of GVHAI and that it only exercised its proprietary right and was
also not negligent in doing so.

ISSUE:
Is the act of GHVAI in constructing concrete fence to replace the steel grille gate a proper exercise of proprietary
right not amounting to bad faith?

HELD:
Yes. The Court held that there was a lack of malice or bad faith in GVHAI’s exercise of its proprietary right.

Malice or bad faith, at the core of Articles 20 and 21, implies a conscious and intentional design to do a wrongful
act for a dishonest purpose or moral obliquity. Records of the case reveal that while GVHAI replaced the steel
grille gate with a concrete fence, the construction was not intended to obstruct whatever waters that may naturally
flow from the higher estates. The concrete fence was made to ward off undesirable elements from entering the
subdivision. Thus, for purposes of Articles 20 and 21, the construction of the concrete fence is not contrary to
any law, morals, good customs, or public policy

As correctly found by the CA, when GVHAI decided to construct the concrete fence, it could not have reasonably
foreseen any harm that could occur to Spouses Ermino. Any prudent person exercising reasonable care and
caution could not have envisaged such an outcome from the mere exercise of a proprietary act. Indeed, the act
of replacing the steel grille gate with a concrete fence was within the legitimate exercise of GVHAI's proprietary
rights over its property.

The law recognizes in the owner the right to enjoy and dispose of a thing, without other limitations than those
established by law. Article 430 of the Civil Code provides that "(e)very owner may enclose or fence his land or
tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes
constituted thereon.

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

CLAIM FOR ATTORNEY’S FEES MUST BE SUPPORTED BY EVIDENCE OF BAD FAITH

43. Mon Anuat v. Pacific Ocean Manning Inc.

G.R. No. 220898, July 23, 2018
Carpio, J.

FACTS:
This petition for review on certiorari assails the CA decision in CA-G.R. SP No. 130102.

Petitoner Mon Anuat (Anuat) was hired as a seaman by Pacific Ocean Manning Inc. On 19 May 2011. He had
an accident during unloading operations in the port of Cabello, Venezuela. He suffered injuries on his neck, back
and knee after he fell down the vessel's deck while he was connecting the crane hook to the vessel's grab which
was located at a high position. Thus, Anuat was medically repatriated to the Philippines on 22 May 2011. Upon
arrival, Anuat was referred to Pacific's company-designated physician. In a medical report dated 22 September
2011, the physician recommended that Anuat undergo surgery to repair his left knee and was advised to come
back on 30 September 2011. Anuat no longer went back to Pacific's company-designated physician on 30
September 2011. Instead, on 26 October 2011, he filed a claim against Pacific for total and permanent disability,
reimbursement of medical expenses, sickness allowance, damages and attorney's fees against Pacific.

The Labor Arbiter, while granting total and permanent disability benefits to Anuat, denied the latter’s claim for
moral and exemplary damages and attorney's fees on the ground that there was no evidence showing bad faith
or malice on the part of Pacific. The NLRC modified the LA’s decision and ordered respondents herein to pay
Anuat attorney’s fees. Subsequently, CA granted Pacific's petition for certiorari. Hence, this appeal.
ISSUE:
Is Anuat entitled to attorney’s fees?

HELD:
No, Anuat is not entitled to attorney’s fees.

In Development Bank of the Philippines v. Traverse Development Corp., this Court held that a claim for attorney's
fees must be supported by evidence of bad faith. The mere fact that a party was compelled to litigate is insufficient
to justify an award of attorney's fees. The pertinent part of the decision states: “The general rule is that attorney's
fees cannot be recovered as part of damages because of the policy that no premium should be placed on the
right to litigate. They are not to be awarded every time a party wins a suit.” The power of the court to award
attorney's fees under Article 2208 demands factual, legal, and equitable justification. Even when a claimant is
compelled to litigate with third persons or to incur expenses to protect his rights, still attorney's fees may not be
awarded where no sufficient showing of bad faith could be reflected in a party's persistence in a case other than
an erroneous conviction of the righteousness of his cause.

In the present case, Anuat did not present sufficient evidence that Pacific acted in bad faith. As discussed, Anuat
was still legally under extended medical treatment when he prematurely filed his total and permanent disability
claim on 26 October 2011. Pacific is not guilty of any act or omission constituting bad faith since Pacific's
company-designated physician continued giving Anuat medical care and even advised Anuat to return on 30
September 2011, and it was Anuat who chose not to return and instead filed his disability claim. Hence, Anuat's
claim for attorney's fees must be denied

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 CASES DECIDED WITHIN JANUARY 2017 TO DECEMBER 2019
Torts and Damages

ART. 309 OF THE CIVIL CODE ENVISIONS DISRESPECT OF THE DECEASED ON THE OCCASION OF A
FUNERAL

44. Tabuada v. Tabuada,

G.R. No. 196510, September 12, 2018
Bersamin, J.

FACTS:
This appeal seeks to undo the decision promulgated by the Court of Appeals which reversed and set aside the
judgment rendered in favor of petitioners by the Regional trial court. Petitioners herein are the wife (Sofia) and
children of the deceased Simeon Tabadua (Simeon), the son of deceased Loreta Tabuadua (Loreta). Defendant
Eleanor Tabuada (Eleanor) is the sister in law of Simeon, while Defendant Julieta Trabuco (Trabuco) is the
former’s daughter. Defendant Spouses Certeza are the mortgagee of the property subject of the litigation.

Sofia commenced a civil action against herein defendants which included a prayer for a temporary restraining
order (TRO) and for the issuance of the writ of preliminary injunction. During trial, petitioner Sofia testified that
she received a notice sent by the Spouses Certeza regarding their land where Sofia and her daughters were
residing. The land was inherited by Sofia’s deceased husband from his mother. Sofia testified that she was
puzzled to see the signature purportedly of Loreta Tabuada on top of the name Loreta Tabuada printed on
the Mortgage of Real Rights dated July 1, 1994 and the Promissory Note dated July 4, 1994 despite Loreta
Tabuada having died on April 16, 1990. Sofia confirmed the same from Eleanor and Trabuco, and both admitted
that they had mortgaged the property to spouses Certeza. Sofia alleged that the notice caused her to lose her
appetite and sleepless nights, and she suffered hypertension, which entitled her to moral damages of
P100,000.00; that she engaged her counsel to pursue the case against the defendants, paying counsel
P40,000.00; and that she further incurred litigation expenses of P5,000.00.

The RTC ruled in favor of petitioners, granting moral damages under Art. 309 of the Civil Code. On appeal, CA
reversed the same.

ISSUE:
Is the award of moral damages based on disrespect to the dead legally proper?

HELD:
NO, the award of moral damages based on disrespect to the dead is not legally proper.

The Civil Code provision under Article 309 on showing "disrespect to the dead" as a ground for the family of the
deceased to recover moral and material damages, being under the title of Funerals, obviously envisions the
commission of the disrespect during the period of mourning over the demise of the deceased or on the occasion
of the funeral of the mortal remains of the deceased. Neither was true herein.

Hence, the act of Eleanor Tabuada of fraudulently representing the late Loreta Tabuada did not amount to
disrespect to the dead as basis for the recovery of moral damages.

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