G.R. No.

129792 December 21, 1999

JARCO MARKETING CORPORATION, LEONARDO KONG, JOSE TIOPE and ELISA

PANELO, petitioners,
vs.
HONORABLE COURT OF APPEALS, CONRADO C. AGUILAR and CRISELDA R.
AGUILAR, respondents.

DAVIDE, JR., J.:

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners seek the reversal
of the 17 June 1996 decision   of the Court of Appeals in C.A. G.R. No. CV 37937 and the
1

resolution   denying their motion for reconsideration. The assailed decision set aside the 15 January
2

1992 judgment of the Regional Trial Court (RTC), Makati City, Branch 60 in Civil Case No. 7119 and
ordered petitioners to pay damages and attorney's fees to private respondents Conrado and Criselda
(CRISELDA) Aguilar.

Petitioner Jarco Marketing Corporation is the owner of Syvel's Department Store, Makati City.
Petitioners Leonardo Kong, Jose Tiope and Elisa Panelo are the store's branch manager, operations
manager, and supervisor, respectively. Private respondents are spouses and the parents of Zhieneth
Aguilar (ZHIENETH).

In the afternoon of 9 May 1983, CRISELDA and ZHIENETH were at the 2nd floor of Syvel's
Department Store, Makati City. CRISELDA was signing her credit card slip at the payment and
verification counter when she felt a sudden gust of wind and heard a loud thud. She looked behind
her. She then beheld her daughter ZHIENETH on the floor, her young body pinned by the bulk of the
store's gift-wrapping counter/structure. ZHIENETH was crying and screaming for help. Although
shocked, CRISELDA was quick to ask the assistance of the people around in lifting the counter and
retrieving ZHIENETH from the floor.  3

ZHIENETH was quickly rushed to the Makati Medical Center where she was operated on. The next
day ZHIENETH lost her speech and thereafter communicated with CRISELDA by writing on a magic
slate. The injuries she sustained took their toil on her young body. She died fourteen (14) days after
the accident or on 22 May 1983, on the hospital bed. She was six years old.  4

The cause of her death was attributed to the injuries she sustained. The provisional medical
certificate   issued by ZHIENETH's attending doctor described the extent of her injuries:
5

Diagnoses:

1. Shock, severe, sec. to intra-abdominal injuries due to blunt injury

2. Hemorrhage, massive, intraperitoneal sec. to laceration, (L) lobe liver

3. Rupture, stomach, anterior & posterior walls

4. Complete transection, 4th position, duodenum

5. Hematoma, extensive, retroperitoneal

1
 6. Contusion, lungs, severe

CRITICAL

After the burial of their daughter, private respondents demanded upon petitioners the reimbursement
of the hospitalization, medical bills and wake and funeral expenses   which they had incurred.
6

Petitioners refused to pay. Consequently, private respondents filed a complaint for damages, docketed
as Civil Case No. 7119 wherein they sought the payment of P157,522.86 for actual damages,
P300,000 for moral damages, P20,000 for attorney's fees and an unspecified amount for loss of
income and exemplary damages.

In their answer with counterclaim, petitioners denied any liability for the injuries and consequent death
of ZHIENETH. They claimed that CRISELDA was negligent in exercising care and diligence over her
daughter by allowing her to freely roam around in a store filled with glassware and appliances.
ZHIENETH too, was guilty of contributory negligence since she climbed the counter, triggering its
eventual collapse on her. Petitioners also emphasized that the counter was made of sturdy wood with
a strong support; it never fell nor collapsed for the past fifteen years since its construction.

Additionally, petitioner Jarco Marketing Corporation maintained that it observed the diligence of a good
father of a family in the selection, supervision and control of its employees. The other petitioners
likewise raised due care and diligence in the performance of their duties and countered that the
complaint was malicious for which they suffered besmirched reputation and mental anguish. They
sought the dismissal of the complaint and an award of moral and exemplary damages and attorney's
fees in their favor.

In its decision   the trial court dismissed the complaint and counterclaim after finding that the
7

preponderance of the evidence favored petitioners. It ruled that the proximate cause of the fall of the
counter on ZHIENETH was her act of clinging to it. It believed petitioners' witnesses who testified that
ZHIENETH clung to the counter, afterwhich the structure and the girl fell with the structure falling on
top of her, pinning her stomach. In contrast, none of private respondents' witnesses testified on how
the counter fell. The trial court also held that CRISELDA's negligence contributed to ZHIENETH's
accident.

In absolving petitioners from any liability, the trial court reasoned that the counter was situated at the
end or corner of the 2nd floor as a precautionary measure hence, it could not be considered as an
attractive nuisance.   The counter was higher than ZHIENETH. It has been in existence for fifteen
8

years. Its structure was safe and well-balanced. ZHIENETH, therefore, had no business climbing on
and clinging to it.

Private respondents appealed the decision, attributing as errors of the trial court its findings that: (1)
the proximate cause of the fall of the counter was ZHIENETH's misbehavior; (2) CRISELDA was
negligent in her care of ZHIENETH; (3) petitioners were not negligent in the maintenance of the
counter; and (4) petitioners were not liable for the death of ZHIENETH.

Further, private respondents asserted that ZHIENETH should be entitled to the conclusive
presumption that a child below nine (9) years is incapable of contributory negligence. And even if
ZHIENETH, at six (6) years old, was already capable of contributory negligence, still it was physically
impossible for her to have propped herself on the counter. She had a small frame (four feet high and
seventy pounds) and the counter was much higher and heavier than she was. Also, the testimony of
one of the store's former employees, Gerardo Gonzales, who accompanied ZHIENETH when she was
brought to the emergency room of the Makati Medical Center belied petitioners' theory that ZHIENETH
climbed the counter. Gonzales claimed that when ZHIENETH was asked by the doctor what she did,

2
ZHIENETH replied, "[N]othing, I did not come near the counter and the counter just fell on
me."   Accordingly, Gonzales' testimony on ZHIENETH's spontaneous declaration should not only be
9

considered as part of res gestae but also accorded credit.

Moreover, negligence could not be imputed to CRISELDA for it was reasonable for her to have let go
of ZHIENETH at the precise moment that she was signing the credit card slip.

Finally, private respondents vigorously maintained that the proximate cause of ZHIENETH's death,
was petitioners' negligence in failing to institute measures to have the counter permanently nailed.

On the other hand, petitioners argued that private respondents raised purely factual issues which
could no longer be disturbed. They explained that ZHIENETH's death while unfortunate and tragic,
was an accident for which neither CRISELDA nor even ZHIENETH could entirely be held faultless and
blameless. Further, petitioners adverted to the trial court's rejection of Gonzales' testimony as
unworthy of credence.

As to private respondent's claim that the counter should have been nailed to the ground, petitioners
justified that it was not necessary. The counter had been in existence for several years without any
prior accident and was deliberately placed at a corner to avoid such accidents. Truth to tell, they acted
without fault or negligence for they had exercised due diligence on the matter. In fact, the criminal
case   for homicide through simple negligence filed by private respondents against the individual
10

petitioners was dismissed; a verdict of acquittal was rendered in their favor.

The Court of Appeals, however, decided in favor of private respondents and reversed the appealed
judgment. It found that petitioners were negligent in maintaining a structurally dangerous counter. The
counter was shaped like an inverted "L"   with a top wider than the base. It was top heavy and the
11

weight of the upper portion was neither evenly distributed nor supported by its narrow base. Thus, the
counter was defective, unstable and dangerous; a downward pressure on the overhanging portion or a
push from the front could cause the counter to fall. Two former employees of petitioners had already
previously brought to the attention of the management the danger the counter could cause. But the
latter ignored their concern. The Court of Appeals faulted the petitioners for this omission, and
concluded that the incident that befell ZHIENETH could have been avoided had petitioners repaired
the defective counter. It was inconsequential that the counter had been in use for some time without a
prior incident.

The Court of Appeals declared that ZHIENETH, who was below seven (7) years old at the time of the
incident, was absolutely incapable of negligence or other tort. It reasoned that since a child under nine
(9) years could not be held liable even for an intentional wrong, then the six-year old ZHIENETH could
not be made to account for a mere mischief or reckless act. It also absolved CRISELDA of any
negligence, finding nothing wrong or out of the ordinary in momentarily allowing ZHIENETH to walk
while she signed the document at the nearby counter.

The Court of Appeals also rejected the testimonies of the witnesses of petitioners. It found them
biased and prejudiced. It instead gave credit to the testimony of disinterested witness Gonzales. The
Court of Appeals then awarded P99,420.86 as actual damages, the amount representing the
hospitalization expenses incurred by private respondents as evidenced by the hospital's statement of
account.   It denied an award for funeral expenses for lack of proof to substantiate the same. Instead,
12

a compensatory damage of P50,000 was awarded for the death of ZHIENETH.

We quote the dispositive portion of the assailed decision,   thus:

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3
 WHEREFORE, premises considered, the judgment of the lower court is SET ASIDE and another
one is entered against [petitioners], ordering them to pay jointly and severally unto [private
respondents] the following:

1. P50,000.00 by way of compensatory damages for the death of Zhieneth Aguilar, with legal
interest (6% p.a.) from 27 April 1984;

2. P99,420.86 as reimbursement for hospitalization expenses incurred; with legal interest (6%
p.a.) from 27 April 1984;

3. P100,000.00 as moral and exemplary damages;

4. P20,000.00 in the concept of attorney's fees; and

5. Costs.

Private respondents sought a reconsideration of the decision but the same was denied in the Court of
Appeals' resolution   of 16 July 1997.
14

Petitioners now seek the reversal of the Court of Appeals' decision and the reinstatement of the
judgment of the trial court. Petitioners primarily argue that the Court of Appeals erred in disregarding
the factual findings and conclusions of the trial court. They stress that since the action was based on
tort, any finding of negligence on the part of the private respondents would necessarily negate their
claim for damages, where said negligence was the proximate cause of the injury sustained. The injury
in the instant case was the death of ZHIENETH. The proximate cause was ZHIENETH's act of clinging
to the counter. This act in turn caused the counter to fall on her. This and CRISELDA's contributory
negligence, through her failure to provide the proper care and attention to her child while inside the
store, nullified private respondents' claim for damages. It is also for these reasons that parents are
made accountable for the damage or injury inflicted on others by their minor children. Under these
circumstances, petitioners could not be held responsible for the accident that befell ZHIENETH.

Petitioners also assail the credibility of Gonzales who was already separated from Syvel's at the time
he testified; hence, his testimony might have been tarnished by ill-feelings against them.

For their part, private respondents principally reiterated their arguments that neither ZHIENETH nor
CRISELDA was negligent at any time while inside the store; the findings and conclusions of the Court
of Appeals are substantiated by the evidence on record; the testimony of Gonzales, who heard
ZHIENETH comment on the incident while she was in the hospital's emergency room should receive
credence; and finally, ZHIENETH's part of the res gestae declaration "that she did nothing to cause the
heavy structure to fall on her" should be considered as the correct version of the gruesome events.

We deny the petition.

The two issues to be resolved are: (1) whether the death of ZHIENETH was accidental or attributable
to negligence; and (2) in case of a finding of negligence, whether the same was attributable to private
respondents for maintaining a defective counter or to CRISELDA and ZHIENETH for failing to exercise
due and reasonable care while inside the store premises.

An accident pertains to an unforeseen event in which no fault or negligence attaches to the

defendant.   It is "a fortuitous circumstance, event or happening; an event happening without any
15

4
human agency, or if happening wholly or partly through human agency, an event which under the
circumstances is unusual or unexpected by the person to whom it happens."  16

On the other hand, negligence is the omission to do something which a reasonable man, guided by
those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would not do.   Negligence is "the failure to observe,
17

for the protection of the interest of another person, that degree of care, precaution and vigilance which
the circumstances justly demand, whereby such other person suffers injury."  18

Accident and negligence are intrinsically contradictory; one cannot exist with the other. Accident
occurs when the person concerned is exercising ordinary care, which is not caused by fault of any
person and which could not have been prevented by any means suggested by common prudence.  19

The test in determining the existence of negligence is enunciated in the landmark case of Plicart v.
Smith,   thus: Did the defendant in doing the alleged negligent act use that reasonable care and
20

caution which an ordinarily prudent person would have used in the same situation? If not, then he is
guilty of negligence. 
21

We rule that the tragedy which befell ZHIENETH was no accident and that ZHIENETH's death could
only be attributed to negligence.

We quote the testimony of Gerardo Gonzales who was at the scene of the incident and accompanied
CRISELDA and ZHIENETH to the hospital:

Q While at the Makati Medical Center, did you hear or notice anything while the child
was being treated?

A At the emergency room we were all surrounding the child. And when the doctor
asked the child "what did you do," the child said "nothing, I did not come near the
counter and the counter just fell on me."

Q (COURT TO ATTY. BELTRAN)

You want the words in Tagalog to be translated?

ATTY. BELTRAN

Yes, your Honor.

COURT

Granted. Intercalate "wala po, hindi po ako lumapit doon. Basta bumagsak." 22

This testimony of Gonzales pertaining to ZHIENETH's statement formed (and should be admitted as)
part of the res gestae under Section 42, Rule 130 of the Rules of Court, thus:

Part of res gestae. Statements made by a person while a startling occurrence is taking
place or immediately prior or subsequent thereto with respect to the circumstances
thereof, may be given in evidence as part of the res gestae. So, also, statements
accompanying an equivocal act material to the issue, and giving it a legal significance,
may be received as part of the res gestae.

5
It is axiomatic that matters relating to declarations of pain or suffering and statements made to a
physician are generally considered declarations and admissions.   All that is required for their
23

admissibility as part of the res gestae is that they be made or uttered under the influence of a startling
event before the declarant had the time to think and concoct a falsehood as witnessed by the person
who testified in court. Under the circumstances thus described, it is unthinkable for ZHIENETH, a child
of such tender age and in extreme pain, to have lied to a doctor whom she trusted with her life. We
therefore accord credence to Gonzales' testimony on the matter, i.e., ZHIENETH performed no act
that facilitated her tragic death. Sadly, petitioners did, through their negligence or omission to secure
or make stable the counter's base.

Gonzales' earlier testimony on petitioners' insistence to keep and maintain the structurally unstable
gift-wrapping counter proved their negligence, thus:

Q When you assumed the position as gift wrapper at the second floor, will you please
describe the gift wrapping counter, were you able to examine?

A Because every morning before I start working I used to clean that counter and since not
nailed and it was only standing on the floor, it was shaky.

x x x           x x x          x x x

Q Will you please describe the counter at 5:00 o'clock [sic] in the afternoon on [sic] May 9
1983?

A At that hour on May 9, 1983, that counter was standing beside the verification counter.
And since the top of it was heavy and considering that it was not nailed, it can collapse at
anytime, since the top is heavy.

x x x           x x x          x x x

Q And what did you do?

A I informed Mr. Maat about that counter which is [sic] shaky and since Mr. Maat is fond
of putting display decorations on tables, he even told me that I would put some
decorations. But since I told him that it not [sic] nailed and it is shaky he told me "better
inform also the company about it." And since the company did not do anything about the
counter, so I also did not do anything about the counter.   [Emphasis supplied]
24

Ramon Guevarra, another former employee, corroborated the testimony of Gonzales, thus:

Q Will you please described [sic] to the honorable Court the counter where you were
assigned in January 1983?

x x x           x x x          x x x

A That counter assigned to me was when my supervisor ordered me to carry that counter
to another place. I told him that the counter needs nailing and it has to be nailed because it
might cause injury or accident to another since it was shaky.

Q When that gift wrapping counter was transferred at the second floor on February 12,
1983, will you please describe that to the honorable Court?

6
 A I told her that the counter wrapper [sic] is really in good [sic] condition; it was shaky. I
told her that we had to nail it.

Q When you said she, to whom are you referring to [sic]?

A I am referring to Ms. Panelo, sir.

Q And what was the answer of Ms. Panelo when you told her that the counter was shaky?

A She told me "Why do you have to teach me. You are only my subordinate and you are to
teach me?" And she even got angry at me when I told her that.

x x x           x x x          x x x

Q From February 12, 1983 up to May 9, 1983, what if any, did Ms. Panelo or any
employee of the management do to that (sic)

x x x           x x x          x x x

Witness:

None, sir. They never nailed the counter. They only nailed the counter after the accident
happened.   [Emphasis supplied]
25

Without doubt, petitioner Panelo and another store supervisor were personally informed of the danger
posed by the unstable counter. Yet, neither initiated any concrete action to remedy the situation nor
ensure the safety of the store's employees and patrons as a reasonable and ordinary prudent man
would have done. Thus, as confronted by the situation petitioners miserably failed to discharge the due
diligence required of a good father of a family.

On the issue of the credibility of Gonzales and Guevarra, petitioners failed to establish that the
former's testimonies were biased and tainted with partiality. Therefore, the allegation that Gonzales
and Guevarra's testimonies were blemished by "ill feelings" against petitioners — since they
(Gonzales and Guevarra) were already separated from the company at the time their testimonies were
offered in court — was but mere speculation and deserved scant consideration.

It is settled that when the issue concerns the credibility of witnesses, the appellate courts will not as a
general rule disturb the findings of the trial court, which is in a better position to determine the same.
The trial court has the distinct advantage of actually hearing the testimony of and observing the
deportment of the witnesses.   However, the rule admits of exceptions such as when its evaluation
26

was reached arbitrarily or it overlooked or failed to appreciate some facts or circumstances of weight
and substance which could affect the result of the case.   In the instant case, petitioners failed to bring
27

their claim within the exception.

Anent the negligence imputed to ZHIENETH, we apply the conclusive presumption that favors children
below nine (9) years old in that they are incapable of contributory negligence. In his book,   former
28

Judge Cezar S. Sangco stated:

In our jurisdiction, a person under nine years of age is conclusively presumed to have
acted without discernment, and is, on that account, exempt from criminal liability. The
same presumption and a like exemption from criminal liability obtains in a case of a

7
 person over nine and under fifteen years of age, unless it is shown that he has acted
with discernment. Since negligence may be a felony and a quasi-delict and required
discernment as a condition of liability, either criminal or civil, a child under nine years of
age is, by analogy, conclusively presumed to be incapable of negligence; and that the
presumption of lack of discernment or incapacity for negligence in the case of a child
over nine but under fifteen years of age is a rebuttable one, under our law. The rule,
therefore, is that a child under nine years of age must be conclusively presumed
incapable of contributory negligence as a matter of law. [Emphasis supplied]

Even if we attribute contributory negligence to ZHIENETH and assume that she climbed over the
counter, no injury should have occurred if we accept petitioners' theory that the counter was stable and
sturdy. For if that was the truth, a frail six-year old could not have caused the counter to collapse. The
physical analysis of the counter by both the trial court and Court of Appeals and a scrutiny of the
evidence   on record reveal otherwise, i.e., it was not durable after all. Shaped like an inverted "L," the
29

counter was heavy, huge, and its top laden with formica. It protruded towards the customer waiting
area and its base was not secured.  30

CRISELDA too, should be absolved from any contributory negligence. Initially, ZHIENETH held on to
CRISELDA's waist, later to the latter's hand.   CRISELDA momentarily released the child's hand from
31

her clutch when she signed her credit card slip. At this precise moment, it was reasonable and usual
for CRISELDA to let go of her child. Further, at the time ZHIENETH was pinned down by the counter,
she was just a foot away from her mother; and the gift-wrapping counter was just four meters away
from CRISELDA.   The time and distance were both significant. ZHIENETH was near her mother and
32

did not loiter as petitioners would want to impress upon us. She even admitted to the doctor who
treated her at the hospital that she did not do anything; the counter just fell on her.

WHEREFORE, in view of all the foregoing, the instant petition is DENIED and the challenged decision
of the Court of Appeals of 17 June 1996 in C.A. G.R. No. CV 37937 is hereby AFFIRMED.

Costs against petitioners.

SO ORDERED.

Puno, Kapunan, Pardo and Ynares-Santiago, JJ., concur

8
G.R. No. 150920 November 25, 2005

CHILD LEARNING CENTER, INC. and SPOUSES EDGARDO L. LIMON and SYLVIA S.
LIMON, Petitioners,
vs.
TIMOTHY TAGARIO, assisted by his parents BASILIO TAGORIO and HERMINIA
TAGORIO, Respondents.

DECISION

AZCUNA, J.:

This petition started with a tort case filed with the Regional Trial Court of Makati by Timothy Tagorio
and his parents, Basilio R. Tagorio and Herminia Tagorio, docketed as Civil Case No. 91-1389. The
complaint1 alleged that during the school year 1990-1991, Timothy was a Grade IV student at
Marymount School, an academic institution operated and maintained by Child Learning Center, Inc.
(CLC). In the afternoon of March 5, 1991, between 1 and 2 p.m., Timothy entered the boy’s comfort
room at the third floor of the Marymount building to answer the call of nature. He, however, found
himself locked inside and unable to get out. Timothy started to panic and so he banged and kicked the
door and yelled several times for help. When no help arrived he decided to open the window to call for
help. In the process of opening the window, Timothy went right through and fell down three stories.
Timothy was hospitalized and given medical treatment for serious multiple physical injuries.

An action under Article 2176 of the Civil Code was filed by respondents against the CLC, the members
of its Board of Directors, namely Spouses Edgardo and Sylvia Limon, Alfonso Cruz, Carmelo Narciso
and Luningning Salvador, and the Administrative Officer of Marymount School, Ricardo Pilao. In its
defense,2 CLC maintained that there was nothing defective about the locking mechanism of the door
and that the fall of Timothy was not due to its fault or negligence. CLC further maintained that it had
exercised the due care and diligence of a good father of a family to ensure the safety, well-being and
convenience of its students.

After trial, the court a quo found in favor of respondents and ordered petitioners CLC and Spouses
Limon to pay respondents, jointly and severally, ₱200,253.12 as actual and compensatory damages,
₱200,000 as moral damages, ₱50,000 as exemplary damages, ₱100,000 as attorney’s fees and the
costs of the suit. The trial court disregarded the corporate fiction of CLC and held the Spouses Limon
personally liable because they were the ones who actually managed the affairs of the CLC.

Petitioners CLC and the Spouses Limon appealed the decision to the Court of Appeals.

On September 28, 2001, the Court of Appeals3 affirmed the decision in toto. Petitioners elevated the
case to this Court under Rule 45 of the Rules of Court, after their motion for reconsideration was
denied by Resolution of November 23, 2001.4

Petitioners question several factual findings of the trial court, which were affirmed by the Court of
Appeals, namely:5

1. That respondent was allegedly trapped inside the boy’s comfort room located at the third floor of the
school building on March 5, 1991;

9
2. That respondent allegedly banged and kicked the door of said comfort room several times to attract
attention and that he allegedly yelled thereat for help which never came;

3. That respondent was allegedly forced to open the window of said comfort room to seek help;

4. That the lock set installed at the boy’s comfort room located in the third floor of the school building
on March 5, 1991 was allegedly defective and that the same lock set was involved in previous
incidents of alleged malfunctioning;

5. That petitioner Child Learning Center, Inc. allegedly failed to install iron grills in the window of the
boy’s comfort room at the third floor of the school building;

6. That petitioner Child Learning Center, Inc. allegedly failed to exercise the due care of a good father
of a family in the selection and supervision of its employees;

7. That the proximate cause of respondent’s accident was allegedly not due to his own contributory
negligence;

8. That there was an alleged basis to apply the legal principle of "piercing the veil of corporate entity"
in resolving the issue of alleged liability of petitioners Edgardo L. Limon and Sylvia S. Limon;

9. That there was alleged basis for petitioners to pay respondent actual, moral and exemplary
damages, plus attorney’s fees;

10. That there was an alleged basis in not awarding petitioners’ prayer for moral and exemplary
damages, including attorney’s fees.

Generally, factual findings of the trial court, affirmed by the Court of Appeals, are final and conclusive
and may not be reviewed on appeal. The established exceptions are: (1) when the inference made is
manifestly mistaken, absurd or impossible; (2) when there is grave abuse of discretion; (3) when the
findings are grounded entirely on speculations, surmises or conjectures; (4) when the judgment of the
Court of Appeals is based on misapprehension of facts; (5) when the findings of fact are conflicting; (6)
when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee; (7) when the findings of fact are conclusions
without citation of specific evidence on which they are based; (8) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties and which, if properly considered, would
justify a different conclusion; and (9) when the findings of fact of the Court of Appeals are premised on
the absence of evidence and are contradicted by the evidence on record.6

On the basis of the records of this case, this Court finds no justification to reverse the factual findings
and consider this case as an exception to the general rule.

In every tort case filed under Article 2176 of the Civil Code, plaintiff has to prove by a preponderance
of evidence: (1) the damages suffered by the plaintiff; (2) the fault or negligence of the defendant or
some other person for whose act he must respond; and (3) the connection of cause and effect
between the fault or negligence and the damages incurred.7

Fault, in general, signifies a voluntary act or omission which causes damage to the right of another
giving rise to an obligation on the part of the actor to repair such damage. Negligence is the failure to
observe for the protection of the interest of another person that degree of care, precaution and
vigilance which the circumstances justly demand. Fault requires the execution of a positive act which

10
causes damage to another while negligence consists of the omission to do acts which result in
damage to another.8

In this tort case, respondents contend that CLC failed to provide precautionary measures to avoid
harm and injury to its students in two instances: (1) failure to fix a defective door knob despite having
been notified of the problem; and (2) failure to install safety grills on the window where Timothy fell
from.

The trial court found that the lock was defective on March 5, 1991:9

The door knob was defective. After the incident of March 5, 1991, said door knob was taken off the
door of the toilet where Timothy was in. The architect who testified during the trial declared that
although there were standard specifications for door knobs for comfort room[s], and he designed them
according to that requirement, he did not investigate whether the door knob specified in his plans
during the construction [was] actually put in place. This is so because he did not verify whether the
door knob he specified w[as] actually put in place at the particular comfort room where Timothy was
barred from getting outside. (TSN, pp. 19-20, December 8, 1994).

The Court of Appeals held that there was no reason to disturb the factual assessment:10

After having perused the records, We fail to see any indication of whim or arbitrariness on the part of
the trial magistrate in his assessment of the facts of the case. That said, We deem it not to be within
Our business to recast the factual conclusions reached by the court below.

Petitioners would make much of the point that no direct evidence was presented to prove that the door
knob was indeed defective on the date in question.

The fact, however, that Timothy fell out through the window shows that the door could not be opened
from the inside. That sufficiently points to the fact that something was wrong with the door, if not the
door knob, under the principle of res ipsa loquitor. The doctrine of res ipsa loquitor applies where (1)
the accident was of such character as to warrant an inference that it would not have happened except
for the defendant’s negligence; (2) the accident must have been caused by an agency or
instrumentality within the exclusive management or control of the person charged with the negligence
complained of; and (3) the accident must not have been due to any voluntary action or contribution on
the part of the person injured.11 Petitioners are clearly answerable for failure to see to it that the doors
of their school toilets are at all times in working condition. The fact that a student had to go through the
window, instead of the door, shows that something was wrong with the door.

As to the absence of grills on the window, petitioners contend that there was no such requirement
under the Building Code. Nevertheless, the fact is that such window, as petitioners themselves point
out, was approximately 1.5 meters from the floor, so that it was within reach of a student who finds the
regular exit, the door, not functioning. Petitioners, with the due diligence of a good father of the family,
should have anticipated that a student, locked in the toilet by a non-working door, would attempt to use
the window to call for help or even to get out. Considering all the circumstances, therefore, there is
sufficient basis to sustain a finding of liability on petitioners’ part.

Petitioners’ argument that CLC exercised the due diligence of a good father of a family in the selection
and supervision of its employees is not decisive. Due diligence in the selection and supervision of
employees is applicable where the employer is being held responsible for the acts or omissions of
others under Article 2180 of the Civil Code.12 In this case, CLC’s liability is under Article 2176 of the
Civil Code, premised on the fact of its own negligence in not ensuring that all its doors are properly
maintained.

11
Our pronouncement that Timothy climbed out of the window because he could not get out using the
door, negates petitioners’ other contention that the proximate cause of the accident was Timothy’s own
negligence. The injuries he sustained from the fall were the product of a natural and continuous
sequence, unbroken by any intervening cause, that originated from CLC’s own negligence.

We, however, agree with petitioners that there was no basis to pierce CLC’s separate corporate
personality. To disregard the corporate existence, the plaintiff must prove: (1) Control by the individual
owners, not mere majority or complete stock ownership, resulting in complete domination not only of
finances but of policy and business practice in respect to a transaction so that the corporate entity as
to this transaction had at the time no separate mind, will or existence of its own; (2) such control must
have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory
or other positive legal duty, or a dishonest and unjust act in contravention of the plaintiff’s legal right;
and (3) the control and breach of duty must proximately cause the injury or unjust loss complained of.
The absence of these elements prevents piercing the corporate veil.13 The evidence on record fails to
show that these elements are present, especially given the fact that plaintiffs’ complaint had pleaded
that CLC is a corporation duly organized and existing under the laws of the Philippines.

On 9th and 10th points raised concerning the award of damages, the resolution would rest on factual
determinations by the trial court, affirmed by the Court of Appeals, and no legal issue warrants our
intervention.

WHEREFORE, the petition is partly granted and the Decision and Resolution of the Court of Appeals
in CA-G.R. CV No. 50961 dated September 28, 2001 and November 23, 2001, respectively,
are MODIFIED in that petitioners Spouses Edgardo and Sylvia Limon are absolved from personal
liability. The Decision and Resolution are AFFIRMED in all other respects. No pronouncement as to
costs.

SO ORDERED.

G.R. No. 179337             April 30, 2008

JOSEPH SALUDAGA, petitioner,
vs.

12
FAR EASTERN UNIVERSITY and EDILBERTO C. DE JESUS in his capacity as President of
FEU, respondents.

DECISION

YNARES-SANTIAGO, J.:

This Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assails the June 29, 2007
Decision2 of the Court of Appeals in CA-G.R. CV No. 87050, nullifying and setting aside the November
10, 2004 Decision3 of the Regional Trial Court of Manila, Branch 2, in Civil Case No. 98-89483 and
dismissing the complaint filed by petitioner; as well as its August 23, 2007 Resolution4 denying the
Motion for Reconsideration.5

The antecedent facts are as follows:

Petitioner Joseph Saludaga was a sophomore law student of respondent Far Eastern University (FEU)
when he was shot by Alejandro Rosete (Rosete), one of the security guards on duty at the school
premises on August 18, 1996. Petitioner was rushed to FEU-Dr. Nicanor Reyes Medical Foundation
(FEU-NRMF) due to the wound he sustained.6 Meanwhile, Rosete was brought to the police station
where he explained that the shooting was accidental. He was eventually released considering that no
formal complaint was filed against him.

Petitioner thereafter filed a complaint for damages against respondents on the ground that they
breached their obligation to provide students with a safe and secure environment and an atmosphere
conducive to learning. Respondents, in turn, filed a Third-Party Complaint7 against Galaxy
Development and Management Corporation (Galaxy), the agency contracted by respondent FEU to
provide security services within its premises and Mariano D. Imperial (Imperial), Galaxy's President, to
indemnify them for whatever would be adjudged in favor of petitioner, if any; and to pay attorney's fees
and cost of the suit. On the other hand, Galaxy and Imperial filed a Fourth-Party Complaint against
AFP General Insurance.8

On November 10, 2004, the trial court rendered a decision in favor of petitioner, the dispositive portion
of which reads:

WHEREFORE, from the foregoing, judgment is hereby rendered ordering:

1. FEU and Edilberto de Jesus, in his capacity as president of FEU to pay jointly and
severally Joseph Saludaga the amount of P35,298.25 for actual damages with 12%
interest per annum from the filing of the complaint until fully paid; moral damages of
P300,000.00, exemplary damages of P500,000.00, attorney's fees of P100,000.00 and
cost of the suit;

2. Galaxy Management and Development Corp. and its president, Col. Mariano
Imperial to indemnify jointly and severally 3rd party plaintiffs (FEU and Edilberto de
Jesus in his capacity as President of FEU) for the above-mentioned amounts;

3. And the 4th party complaint is dismissed for lack of cause of action. No
pronouncement as to costs.

SO ORDERED.9

13
Respondents appealed to the Court of Appeals which rendered the assailed Decision, the decretal
portion of which provides, viz:

WHEREFORE, the appeal is hereby GRANTED. The Decision dated November 10, 2004 is
hereby REVERSED and SET ASIDE. The complaint filed by Joseph Saludaga against
appellant Far Eastern University and its President in Civil Case No. 98-89483 is DISMISSED.

SO ORDERED.10

Petitioner filed a Motion for Reconsideration which was denied; hence, the instant petition based on
the following grounds:

THE COURT OF APPEALS SERIOUSLY ERRED IN MANNER CONTRARY TO LAW AND

JURISPRUDENCE IN RULING THAT:

5.1. THE SHOOTING INCIDENT IS A FORTUITOUS EVENT;

5.2. RESPONDENTS ARE NOT LIABLE FOR DAMAGES FOR THE INJURY RESULTING
FROM A GUNSHOT WOUND SUFFERED BY THE PETITIONER FROM THE HANDS OF NO
LESS THAN THEIR OWN SECURITY GUARD IN VIOLATION OF THEIR BUILT-IN
CONTRACTUAL OBLIGATION TO PETITIONER, BEING THEIR LAW STUDENT AT THAT
TIME, TO PROVIDE HIM WITH A SAFE AND SECURE EDUCATIONAL ENVIRONMENT;

5.3. SECURITY GAURD, ALEJANDRO ROSETE, WHO SHOT PETITIONER WHILE HE WAS
WALKING ON HIS WAY TO THE LAW LIBRARY OF RESPONDENT FEU IS NOT THEIR
EMPLOYEE BY VIRTUE OF THE CONTRACT FOR SECURITY SERVICES BETWEEN
GALAXY AND FEU NOTWITHSTANDING THE FACT THAT PETITIONER, NOT BEING A
PARTY TO IT, IS NOT BOUND BY THE SAME UNDER THE PRINCIPLE OF RELATIVITY OF
CONTRACTS; and

5.4. RESPONDENT EXERCISED DUE DILIGENCE IN SELECTING GALAXY AS THE

AGENCY WHICH WOULD PROVIDE SECURITY SERVICES WITHIN THE PREMISES OF
RESPONDENT FEU.11

Petitioner is suing respondents for damages based on the alleged breach of student-school contract
for a safe learning environment. The pertinent portions of petitioner's Complaint read:

6.0. At the time of plaintiff's confinement, the defendants or any of their representative did not
bother to visit and inquire about his condition. This abject indifference on the part of the
defendants continued even after plaintiff was discharged from the hospital when not even a
word of consolation was heard from them. Plaintiff waited for more than one (1) year for the
defendants to perform their moral obligation but the wait was fruitless. This indifference and
total lack of concern of defendants served to exacerbate plaintiff's miserable condition.

xxxx

11.0. Defendants are responsible for ensuring the safety of its students while the latter are
within the University premises. And that should anything untoward happens to any of its
students while they are within the University's premises shall be the responsibility of the
defendants. In this case, defendants, despite being legally and morally bound, miserably failed
to protect plaintiff from injury and thereafter, to mitigate and compensate plaintiff for said injury;

14
 12.0. When plaintiff enrolled with defendant FEU, a contract was entered into between them.
Under this contract, defendants are supposed to ensure that adequate steps are taken to
provide an atmosphere conducive to study and ensure the safety of the plaintiff while inside
defendant FEU's premises. In the instant case, the latter breached this contract when
defendant allowed harm to befall upon the plaintiff when he was shot at by, of all people, their
security guard who was tasked to maintain peace inside the campus.12

In Philippine School of Business Administration v. Court of Appeals,13 we held that:

When an academic institution accepts students for enrollment, there is established a contract
between them, resulting in bilateral obligations which both parties are bound to comply with.
For its part, the school undertakes to provide the student with an education that would
presumably suffice to equip him with the necessary tools and skills to pursue higher education
or a profession. On the other hand, the student covenants to abide by the school's academic
requirements and observe its rules and regulations.

Institutions of learning must also meet the implicit or "built-in" obligation of providing their
students with an atmosphere that promotes or assists in attaining its primary undertaking of
imparting knowledge. Certainly, no student can absorb the intricacies of physics or higher
mathematics or explore the realm of the arts and other sciences when bullets are flying or
grenades exploding in the air or where there looms around the school premises a constant
threat to life and limb. Necessarily, the school must ensure that adequate steps are taken to
maintain peace and order within the campus premises and to prevent the breakdown thereof.14

It is undisputed that petitioner was enrolled as a sophomore law student in respondent FEU. As such,
there was created a contractual obligation between the two parties. On petitioner's part, he was
obliged to comply with the rules and regulations of the school. On the other hand, respondent FEU, as
a learning institution is mandated to impart knowledge and equip its students with the necessary skills
to pursue higher education or a profession. At the same time, it is obliged to ensure and take adequate
steps to maintain peace and order within the campus.

It is settled that in culpa contractual, the mere proof of the existence of the contract and the failure of
its compliance justify, prima facie, a corresponding right of relief.15 In the instant case, we find that,
when petitioner was shot inside the campus by no less the security guard who was hired to maintain
peace and secure the premises, there is a prima facie showing that respondents failed to comply with
its obligation to provide a safe and secure environment to its students.

In order to avoid liability, however, respondents aver that the shooting incident was a fortuitous event
because they could not have reasonably foreseen nor avoided the accident caused by Rosete as he
was not their employee;16 and that they complied with their obligation to ensure a safe learning
environment for their students by having exercised due diligence in selecting the security services of
Galaxy.

After a thorough review of the records, we find that respondents failed to discharge the burden of
proving that they exercised due diligence in providing a safe learning environment for their students.
They failed to prove that they ensured that the guards assigned in the campus met the requirements
stipulated in the Security Service Agreement. Indeed, certain documents about Galaxy were presented
during trial; however, no evidence as to the qualifications of Rosete as a security guard for the
university was offered.

Respondents also failed to show that they undertook steps to ascertain and confirm that the security
guards assigned to them actually possess the qualifications required in the Security Service

15
Agreement. It was not proven that they examined the clearances, psychiatric test results, 201 files,
and other vital documents enumerated in its contract with Galaxy. Total reliance on the security
agency about these matters or failure to check the papers stating the qualifications of the guards is
negligence on the part of respondents. A learning institution should not be allowed to completely
relinquish or abdicate security matters in its premises to the security agency it hired. To do so would
result to contracting away its inherent obligation to ensure a safe learning environment for its students.

Consequently, respondents' defense of force majeure must fail. In order for force majeure to be

considered, respondents must show that no negligence or misconduct was committed that may have
occasioned the loss. An act of God cannot be invoked to protect a person who has failed to take steps
to forestall the possible adverse consequences of such a loss. One's negligence may have concurred
with an act of God in producing damage and injury to another; nonetheless, showing that the
immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one
from liability. When the effect is found to be partly the result of a person's participation - whether by
active intervention, neglect or failure to act - the whole occurrence is humanized and removed from the
rules applicable to acts of God.17

Article 1170 of the Civil Code provides that those who are negligent in the performance of their
obligations are liable for damages. Accordingly, for breach of contract due to negligence in providing a
safe learning environment, respondent FEU is liable to petitioner for damages. It is essential in the
award of damages that the claimant must have satisfactorily proven during the trial the existence of the
factual basis of the damages and its causal connection to defendant's acts.18

In the instant case, it was established that petitioner spent P35,298.25 for his hospitalization and other
medical expenses.19 While the trial court correctly imposed interest on said amount, however, the case
at bar involves an obligation arising from a contract and not a loan or forbearance of money. As such,
the proper rate of legal interest is six percent (6%) per annum of the amount demanded. Such interest
shall continue to run from the filing of the complaint until the finality of this Decision.20 After this
Decision becomes final and executory, the applicable rate shall be twelve percent (12%) per annum
until its satisfaction.

The other expenses being claimed by petitioner, such as transportation expenses and those incurred
in hiring a personal assistant while recuperating were however not duly supported by receipts.21 In the
absence thereof, no actual damages may be awarded. Nonetheless, temperate damages under Art.
2224 of the Civil Code may be recovered where it has been shown that the claimant suffered some
pecuniary loss but the amount thereof cannot be proved with certainty. Hence, the amount of
P20,000.00 as temperate damages is awarded to petitioner.

As regards the award of moral damages, there is no hard and fast rule in the determination of what
would be a fair amount of moral damages since each case must be governed by its own peculiar
circumstances.22 The testimony of petitioner about his physical suffering, mental anguish, fright,
serious anxiety, and moral shock resulting from the shooting incident23 justify the award of moral
damages. However, 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. The award is not
meant to enrich the complainant at the expense of the defendant, but to enable the injured party to
obtain means, diversion, or amusements that will serve to obviate the moral suffering he has
undergone. It is aimed at the restoration, within the limits of the possible, of the spiritual status quo
ante, and should be proportionate to the suffering inflicted. Trial courts must then guard against the
award of exorbitant damages; they should exercise balanced restrained and measured objectivity to
avoid suspicion that it was due to passion, prejudice, or corruption on the part of the trial court.24 We
deem it just and reasonable under the circumstances to award petitioner moral damages in the
amount of P100,000.00.

16
Likewise, attorney's fees and litigation expenses in the amount of P50,000.00 as part of damages is
reasonable in view of Article 2208 of the Civil Code.25 However, the award of exemplary damages is
deleted considering the absence of proof that respondents acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.

We note that the trial court held respondent De Jesus solidarily liable with respondent FEU. In Powton
Conglomerate, Inc. v. Agcolicol,26 we held that:

[A] corporation is invested by law with a personality separate and distinct from those of the
persons composing it, such that, save for certain exceptions, corporate officers who entered
into contracts in behalf of the corporation cannot be held personally liable for the liabilities of
the latter. Personal liability of a corporate director, trustee or officer along (although not
necessarily) with the corporation may so validly attach, as a rule, only when - (1) he assents to
a patently unlawful act of the corporation, or when he is guilty of bad faith or gross negligence
in directing its affairs, or when there is a conflict of interest resulting in damages to the
corporation, its stockholders or other persons; (2) he consents to the issuance of watered
down stocks or who, having knowledge thereof, does not forthwith file with the corporate
secretary his written objection thereto; (3) he agrees to hold himself personally and solidarily
liable with the corporation; or (4) he is made by a specific provision of law personally
answerable for his corporate action.27

None of the foregoing exceptions was established in the instant case; hence, respondent De Jesus
should not be held solidarily liable with respondent FEU.

Incidentally, although the main cause of action in the instant case is the breach of the school-student
contract, petitioner, in the alternative, also holds respondents vicariously liable under Article 2180 of
the Civil Code, which provides:

Art. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.

xxxx

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

xxxx

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

We agree with the findings of the Court of Appeals that respondents cannot be held liable for damages
under Art. 2180 of the Civil Code because respondents are not the employers of Rosete. The latter
was employed by Galaxy. The instructions issued by respondents' Security Consultant to Galaxy and
its security guards are ordinarily no more than requests commonly envisaged in the contract for
services entered into by a principal and a security agency. They cannot be construed as the element
of control as to treat respondents as the employers of Rosete.28

As held in Mercury Drug Corporation v. Libunao:29

17
 In Soliman, Jr. v. Tuazon,30 we held that where the security agency recruits, hires and assigns
the works of its watchmen or security guards to a client, the employer of such guards or
watchmen is such agency, and not the client, since the latter has no hand in selecting the
security guards. Thus, the duty to observe the diligence of a good father of a family cannot be
demanded from the said client:

… [I]t is settled in our jurisdiction that where the security agency, as here, recruits,
hires and assigns the work of its watchmen or security guards, the agency is the
employer of such guards or watchmen. Liability for illegal or harmful acts committed by
the security guards attaches to the employer agency, and not to the clients or
customers of such agency. As a general rule, a client or customer of a security agency
has no hand in selecting who among the pool of security guards or watchmen
employed by the agency shall be assigned to it; the duty to observe the diligence of a
good father of a family in the selection of the guards cannot, in the ordinary course of
events, be demanded from the client whose premises or property are protected by the
security guards.

xxxx

The fact that a client company may give instructions or directions to the security guards
assigned to it, does not, by itself, render the client responsible as an employer of the security
guards concerned and liable for their wrongful acts or omissions.31

We now come to respondents' Third Party Claim against Galaxy. In Firestone Tire and Rubber
Company of the Philippines v. Tempengko,32 we held that:

The third-party complaint is, therefore, a procedural device whereby a 'third party' who is
neither a party nor privy to the act or deed complained of by the plaintiff, may be brought into
the case with leave of court, by the defendant, who acts as third-party plaintiff to enforce
against such third-party defendant a right for contribution, indemnity, subrogation or any other
relief, in respect of the plaintiff's claim. The third-party complaint is actually independent of and
separate and distinct from the plaintiff's complaint. Were it not for this provision of the Rules of
Court, it would have to be filed independently and separately from the original complaint by the
defendant against the third-party. But the Rules permit defendant to bring in a third-party
defendant or so to speak, to litigate his separate cause of action in respect of plaintiff's claim
against a third-party in the original and principal case with the object of avoiding circuitry of
action and unnecessary proliferation of law suits and of disposing expeditiously in one litigation
the entire subject matter arising from one particular set of facts.33

Respondents and Galaxy were able to litigate their respective claims and defenses in the course of the
trial of petitioner's complaint. Evidence duly supports the findings of the trial court that Galaxy is
negligent not only in the selection of its employees but also in their supervision. Indeed, no
administrative sanction was imposed against Rosete despite the shooting incident; moreover, he was
even allowed to go on leave of absence which led eventually to his disappearance.34 Galaxy also failed
to monitor petitioner's condition or extend the necessary assistance, other than the P5,000.00 initially
given to petitioner. Galaxy and Imperial failed to make good their pledge to reimburse petitioner's
medical expenses.

For these acts of negligence and for having supplied respondent FEU with an unqualified security
guard, which resulted to the latter's breach of obligation to petitioner, it is proper to hold Galaxy liable
to respondent FEU for such damages equivalent to the above-mentioned amounts awarded to
petitioner.

18
Unlike respondent De Jesus, we deem Imperial to be solidarily liable with Galaxy for being grossly
negligent in directing the affairs of the security agency. It was Imperial who assured petitioner that his
medical expenses will be shouldered by Galaxy but said representations were not fulfilled because
they presumed that petitioner and his family were no longer interested in filing a formal complaint
against them.35

WHEREFORE, the petition is GRANTED. The June 29, 2007 Decision of the Court of Appeals in CA-
G.R. CV No. 87050 nullifying the Decision of the trial court and dismissing the complaint as well as the
August 23, 2007 Resolution denying the Motion for Reconsideration are REVERSED and SET ASIDE.
The Decision of the Regional Trial Court of Manila, Branch 2, in Civil Case No. 98-89483 finding
respondent FEU liable for damages for breach of its obligation to provide students with a safe and
secure learning atmosphere, is AFFIRMED with the following MODIFICATIONS:

a. respondent Far Eastern University (FEU) is ORDERED to pay petitioner actual damages in the
amount of P35,298.25, plus 6% interest per annum from the filing of the complaint until the finality of
this Decision. After this decision becomes final and executory, the applicable rate shall be twelve
percent (12%) per annum until its satisfaction;

b. respondent FEU is also ORDERED to pay petitioner temperate damages in the amount of

P20,000.00; moral damages in the amount of P100,000.00; and attorney's fees and litigation expenses
in the amount of P50,000.00;

c. the award of exemplary damages is DELETED.

The Complaint against respondent Edilberto C. De Jesus is DISMISSED. The counterclaims of

respondents are likewise DISMISSED.

Galaxy Development and Management Corporation (Galaxy) and its president, Mariano D. Imperial
are ORDERED to jointly and severally pay respondent FEU damages equivalent to the above-
mentioned amounts awarded to petitioner.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

G.R. No. 143951 October 25, 2005

Norma Mangaliag and Narciso Solano, Petitioners,

vs.
Hon. Edelwina Catubig-Pastoral, Judge of the Regional Trial Court, 1st Judicial Region, San
Carlos City, (Pangasinan), Branch 56 and Apolinario Serquina, Jr., Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

19
Before us is a petition for certiorari, with a prayer for the issuance of a temporary restraining order, to
set aside the Order dated April 17, 2000 of the Regional Trial Court (RTC), Branch 56, San Carlos City
in Civil Case No. SCC-2240, which denied petitioners’ motion to dismiss; and the Order dated June
13, 2000, which denied petitioners’ motion for reconsideration.

The factual background of the case is as follows:

On May 10, 1999, private respondent Apolinario Serquina, Jr. filed before the RTC a complaint for
damages against petitioners Norma Mangaliag and Narciso Solano. The complaint alleges that: on
January 21, 1999, from 9:00 to 10:00 a.m., private respondent, together with Marco de Leon, Abner
Mandapat and Manuel de Guzman, was on board a tricycle driven by Jayson Laforte; while in Pagal,
San Carlos City, a dump truck owned by petitioner Mangaliag and driven by her employee, petitioner
Solano, coming from the opposite direction, tried to overtake and bypass a tricycle in front of it and
thereby encroached the left lane and sideswiped the tricycle ridden by private respondent; due to the
gross negligence, carelessness and imprudence of petitioner Solano in driving the truck, private
respondent and his co-passengers sustained serious injuries and permanent deformities; petitioner
Mangaliag failed to exercise due diligence required by law in the selection and supervision of her
employee; private respondent was hospitalized and spent ₱71,392.00 as medical expenses; private
respondent sustained a permanent facial deformity due to a fractured nose and suffers from severe
depression as a result thereof, for which he should be compensated in the amount of ₱500,000.00 by
way of moral damages; as a further result of his hospitalization, private respondent lost income of
₱25,000.00; private respondent engaged the services of counsel on a contingent basis equal to 25%
of the total award.1

On July 21, 1999, petitioners filed their answer with counterclaim denying that private respondent has
a cause of action against them. They attributed fault or negligence in the vehicular accident on the
tricycle driver, Jayson Laforte, who was allegedly driving without license.2

Following pre-trial conference, trial on the merits ensued. When private respondent rested his case,
petitioner Solano testified in his defense.

Subsequently, on March 8, 2000, petitioners, assisted by a new counsel, filed a motion to dismiss on
the ground of lack of jurisdiction over the subject matter of the claim, alleging that the Municipal Trial
Court (MTC) has jurisdiction over the case since the principal amount prayed for, in the amount of
₱71,392.00, falls within its jurisdiction.3 Private respondent opposed petitioners’ motion to dismiss.4 On
March 24, 2000, petitioners filed a supplement in support of their motion to dismiss.5

On April 17, 2000, the respondent RTC Judge, Edelwina Catubig-Pastoral, issued the first assailed
Order denying petitioners’ motion to dismiss,6 relying upon the mandate of Administrative Circular No.
09-94, paragraph 2 of which reads:

2. The exclusion of the term "damages of whatever kind in determining the jurisdictional amount under
Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applied to cases
where the damages are merely incidental to or a consequence of the main cause of action. However,
in cases where the claim for damages is the main cause of action, or one of the causes of action, the
amount of such claim shall be considered in determining the jurisdiction of the court.

The respondent RTC Judge also cited the 1999 case of Ong vs. Court of Appeals,7 where an action for
damages due to a vehicular accident, with prayer for actual damages of ₱10,000.00 and moral
damages of ₱1,000,000.00, was tried in a RTC.

20
On May 19, 2000, petitioners filed a motion for reconsideration8 but it was denied by the respondent
RTC Judge in her second assailed Order, dated June 13, 2000.9

Hence, the present petition for certiorari, with prayer for the issuance of a temporary restraining
order.10

On August 9, 2000, the Court resolved to issue the temporary restraining order prayed for by
petitioners. Consequently, the respondent RTC Judge desisted from hearing further Civil Case No.
SCC-2240.11

Petitioners propound this issue for consideration: In an action for recovery of damages, does the
amount of actual damages prayed for in the complaint provide the sole test for determining the court’s
jurisdiction, or is the total amount of all the damages claimed, regardless of kind and nature, such as
moral, exemplary, nominal damages, and attorney’s fees, etc., to be computed collectively with the
actual damages to determine what court – whether the MTC or the RTC – has jurisdiction over the
action?

Petitioners maintain that the court’s jurisdiction should be based exclusively on the amount of actual
damages, excluding therefrom the amounts claimed as moral, exemplary, nominal damages and
attorney’s fee, etc. They submit that the specification in Administrative Circular No. 09-94 that "in
cases where the claim for damages is the main cause of action. . . the amount of such claim shall be
considered in determining the jurisdiction of the court" signifies that the court’s jurisdiction must be
tested solely by the amount of that damage which is principally and primarily demanded, and not the
totality of all the damages sought to be recovered.

Petitioners insist that private respondent’s claim for actual damages in the amount of ₱71,392.00 is the
principal and primary demand, the same being the direct result of the alleged negligence of petitioners,
while the moral damages for ₱500,000.00 and attorney’s fee, being the consequent effects thereof,
may prosper only upon a prior finding by the court of the existence of petitioners’ negligence that
caused the actual damages. Considering that the amount of actual damages claimed by private
respondent in Civil Case No. SCC-2240 does not exceed ₱200,000.00, which was then the
jurisdictional amount of the MTC, the jurisdiction over the case clearly pertains to the MTC, and not to
the RTC. Therefore, the RTC should have dismissed the case for lack of jurisdiction. Petitioners cite as
relevant the case of Movers-Baseco Integrated Port Services, Inc. vs. Cyborg Leasing
Corporation12 wherein the Court, in disposing of the jurisdictional issue, limited its consideration only to
the actual or compensatory damages.

Furthermore, while admitting that the defense of lack of jurisdiction was only raised during the trial,
petitioners nevertheless contend that jurisdiction may be raised anytime, even after judgment, but
before it is barred by laches or estoppel. They submit that they seasonably presented the objection to
the RTC’s lack of jurisdiction, i.e., during the trial stage where no decision had as yet been rendered,
must less one unfavorable to them.

At any rate, they argue that when the jurisdictional flaw is evident from the record of the case, the court
may, even without the urgings of the parties, take judicial notice of such fact, and thereupon dismiss
the case motu proprio. Thus, even if lack of jurisdiction was not initially raised in a motion to dismiss or
in the answer, no waiver may be imputed to them.

Private respondent, on the other hand, submits that in an action for recovery of damages arising from
a tortious act, the claim of moral damages is not merely an incidental or consequential claim but must
be considered in the amount of demand which will determine the court’s jurisdiction. He argues that
the position taken by petitioners is a misreading of paragraph 2 of Administrative Circular No. 09-94.

21
The clear and explicit language of said circular leaves no room for doubt; hence, needs no
interpretation.

He further submits that petitioners’ reliance on Movers-Baseco Integrated Port Services, Inc. is
misplaced since that case is for recovery of the value of vehicle and unpaid rentals on the lease of the
same. He contends that Section 18, paragraph 8 of Batas Pambansa Blg. 129, as amended by
Republic Act No. 7691, upon which petitioners anchor their stand, refers to all the demands involving
collection of sums of money based on obligations arising from contract, express or implied, where the
claim for damages is just incidental thereto and it does not apply to actions for damages based on
obligations arising from quasi-delict where the claim for damages of whatever kind is the main action.

Private respondent also contends that, being incapable of pecuniary computation, the amount of moral
damages that he may be awarded depends on the sound discretion of the trial court, not restrained by
the limitation of the jurisdictional amount. Should the Court follow petitioners’ line of reasoning, private
respondent argues that it will result in an absurd situation where he can only be awarded moral
damages of not more than ₱200,000.00 although he deserves more than this amount, taking into
consideration his physical suffering, as well as social and financial standing, simply because his claim
for actual damages does not exceed ₱200,000.00 which amount falls under the jurisdiction of the
MTC.

Lastly, he asserts that it is too late in the day for petitioners to question the jurisdiction of the RTC
since they are estopped from invoking this ground. He contends that after actively taking part in the
trial proceedings and presenting a witness to seek exoneration, it would be unfair and legally improper
for petitioners to seek the dismissal of the case.

At the outset, it is necessary to stress that generally a direct recourse to this Court is highly improper,
for it violates the established policy of strict observance of the judicial hierarchy of courts. Although this
Court, the RTCs and the Court of Appeals (CA) have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give
the petitioner unrestricted freedom of choice of court forum. This Court is a court of last resort, and
must so remain if it is to satisfactorily perform the functions assigned to it by the Constitution and
immemorial tradition.13

Thus, this Court, as a rule, will not entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of
national interest and of serious implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction.14 Such exceptional and compelling
circumstances were present in the following cases: (a) Chavez vs. Romulo15 on the citizens’ right to
bear arms; (b) Government of the United States of America vs. Purganan 16 on bail in extradition
proceedings; (c) Commission on Elections vs. Quijano-Padilla17 on a government contract on the
modernization and computerization of the voters’ registration list; (d) Buklod ng Kawaning EIIB vs.
Zamora[18] on the status and existence of a public office; and (e) Fortich vs. Corona19 on the so-called
"Win-Win Resolution" of the Office of the President which modified the approval of the conversion to
agro-industrial area of a 144-hectare land.

Be that as it may, the judicial hierarchy of courts is not an iron-clad rule. It generally applies to cases
involving warring factual allegations. For this reason, litigants are required to repair to the trial courts at
the first instance to determine the truth or falsity of these contending allegations on the basis of the
evidence of the parties. Cases which depend on disputed facts for decision cannot be brought
immediately before appellate courts as they are not triers of facts.20 Therefore, a strict application of
the rule of hierarchy of courts is not necessary when the cases brought before the appellate courts do
not involve factual but legal questions.

22
In the present case, petitioners submit a pure question of law involving the interpretation and
application of paragraph 2 of Administrative Circular No. 09-94. This legal question and in order to
avoid further delay are compelling enough reasons to allow petitioners’ invocation of this Court’s
jurisdiction in the first instance.

Before resolving this issue, the Court shall deal first on the question of estoppel posed by private
respondent. Private respondent argues that the defense of lack of jurisdiction may be waived by
estoppel through active participation in the trial. Such, however, is not the general rule but an
exception, best characterized by the peculiar circumstances in Tijam vs.
Sibonghanoy.21 In Sibonghanoy, the party invoking lack of jurisdiction did so only after fifteen years
and at a stage when the proceedings had already been elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of laches, which was defined therein as failure or neglect
for an unreasonable and unexplained length of time to do that which, by exercising due diligence,
could or should have been done earlier; it is the negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert has abandoned it or
declined to assert it.22

As enunciated in Calimlim vs. Ramirez,23 this Court held:

A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite
is that the jurisdiction of a court over the subject matter of the action is a matter of law and may not be
conferred by consent or agreement of the parties. The lack of jurisdiction of a court may be raised at
any stage of the proceedings, even on appeal. This doctrine has been qualified by recent
pronouncements which stemmed principally from the ruling in the cited case of Sibonghanoy. It is to be
regretted, however, that the holding in said case had been applied to situations which were obviously
not contemplated therein. The exceptional circumstances involved in Sibonghanoy which justified the
departure from the accepted concept of non-waivability of objection to jurisdiction has been ignored
and, instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in
Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether the
time honored principle that the issue of jurisdiction is not lost by waiver or by estoppel.

...

It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken
cognizance of in a court which lacks jurisdiction over the same irrespective of the attendant
circumstances. The equitable defense of estoppel requires knowledge or consciousness of the facts
upon which it is based. The same thing is true with estoppel by conduct which may be asserted only
when it is shown, among others, that the representation must have been made with knowledge of the
facts and that the party to whom it was made is ignorant of the truth of the matter (De Castro vs.
Gineta, 27 SCRA 623). The filing of an action or suit in a court that does not possess jurisdiction to
entertain the same may not be presumed to be deliberate and intended to secure a ruling which could
later be annulled if not favorable to the party who filed such suit or proceeding. Instituting such an
action is not a one-sided affair. It can just as well be prejudicial to the one who file the action or suit in
the event that he obtains a favorable judgment therein which could also be attacked for having been
rendered without jurisdiction. The determination of the correct jurisdiction of a court is not a simple
matter. It can raise highly debatable issues of such importance that the highest tribunal of the land is
given the exclusive appellate jurisdiction to entertain the same. The point simply is that when a party
commits error in filing his suit or proceeding in a court that lacks jurisdiction to take cognizance of the
same, such act may not at once be deemed sufficient basis of estoppel. It could have been the result
of an honest mistake or of divergent interpretations of doubtful legal provisions. If any fault is to be
imputed to a party taking such course of action, part of the blame should be placed on the court which
shall entertain the suit, thereby lulling the parties into believing that they pursued their remedies in the

23
correct forum. Under the rules, it is the duty of the court to dismiss an action "whenever it appears that
court has no jurisdiction over the subject matter." (Section 2, Rule 9, Rules of Court) Should the Court
render a judgment without jurisdiction, such judgment may be impeached or annulled for lack of
jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years from the finality of the same (Art. 1144, par.
3, Civil Code).24

In the present case, no judgment has yet been rendered by the RTC.25 As a matter of fact, as soon as
the petitioners discovered the alleged jurisdictional defect, they did not fail or neglect to file the
appropriate motion to dismiss. Hence, finding the pivotal element of laches to be absent,
the Sibonghanoy doctrine does not control the present controversy. Instead, the general rule that the
question of jurisdiction of a court may be raised at any stage of the proceedings must apply. Therefore,
petitioners are not estopped from questioning the jurisdiction of the RTC.

In any event, the petition for certiorari is bereft of merit.

Section 1 of Republic Act (R.A.) No. 7691, which took effect on April 15, 1994, provides inter alia that
where the amount of the demand in civil cases exceeds ₱100,000.00,26 exclusive of interest, damages
of whatever kind, attorney’s fees, litigation expenses, and costs, the exclusive jurisdiction thereof is
lodged with in the RTC. Under Section 3 of the same law, where the amount of the demand in the
complaint does not exceed ₱100,000.00, exclusive of interest, damages of whatever kind, attorney’s
fees, litigation expenses, and costs, the exclusive jurisdiction over the same is vested in the
Metropolitan Trial Court, MTC and Municipal Circuit Trial Court. The jurisdictional amount was
increased to ₱200,000.00,27 effective March 20, 1999, pursuant to Section 528 of R.A. No. 7691 and
Administrative Circular No. 21-99.

In Administrative Circular No. 09-94 dated March 14, 1994, the Court specified the guidelines in the
implementation of R.A. No. 7691. Paragraph 2 of the Circular provides:

2. The exclusion of the term "damages of whatever kind in determining the jurisdictional amount under
Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applied to cases
where the damages are merely incidental to or a consequence of the main cause of action.
However, in cases where the claim for damages is the main cause of action, or one of the
causes of action, the amount of such claim shall be considered in determining the jurisdiction
of the court. (Emphasis supplied)

The well-entrenched principle is that the jurisdiction of the court over the subject matter of the action is
determined by the material allegations of the complaint and the law, irrespective of whether or not the
plaintiff is entitled to recover all or some of the claims or reliefs sought therein.29 In the present case,
the allegations in the complaint plainly show that private respondent seeks to recover not only his
medical expenses, lost income but also damages for physical suffering and mental anguish due to
permanent facial deformity from injuries sustained in the vehicular accident. Viewed as an action for
quasi-delict, the present case falls squarely within the purview of Article 2219 (2),30 which provides for
the payment of moral damages in cases of quasi-delict causing physical injuries.

Private respondent’s claim for moral damages of ₱500,000.00 cannot be considered as merely
incidental to or a consequence of the claim for actual damages. It is a separate and distinct cause of
action or an independent actionable tort. It springs from the right of a person to the physical integrity of
his or her body, and if that integrity is violated, damages are due and assessable.31 Hence, the
demand for moral damages must be considered as a separate cause of action, independent of the
claim for actual damages and must be included in determining the jurisdictional amount, in clear
consonance with paragraph 2 of Administrative Circular No. 09-94.

24
If the rule were otherwise, i.e., the court’s jurisdiction in a case of quasi-delict causing physical injuries
would only be based on the claim for actual damages and the complaint is filed in the MTC, it can only
award moral damages in an amount within its jurisdictional limitations, a situation not intended by the
framers of the law.

It must be remembered that moral damages, though incapable of pecuniary estimation, are designed
to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury
unjustly caused a person.32 Moral damages are awarded to enable the injured party to obtain means,
diversions or amusements that will serve to alleviate the moral suffering he/she has undergone, by
reason of the defendant’s culpable action. Its award is aimed at restoration, as much as possible, of
the spiritual status quo ante; thus, it must be proportionate to the suffering inflicted. Since each case
must be governed by its own peculiar circumstances, there is no hard and fast rule in determining the
proper amount.33

The petitioners’ reliance in the case of Movers-Baseco Integrated Port Services, Inc. vs. Cyborg
Leasing Corporation34 is misplaced. The claim for damages therein was based on a breach of a
contract of lease, not a quasi-delict causing physical injuries, as in this case. Besides, there was no
claim therein for moral damages. Furthermore, moral damages are generally not recoverable in
damage actions predicated on a breach of contract in view of the provisions of Article 222035 of the
Civil Code.

In view of the foregoing, the Court is convinced that the respondent RTC Judge committed no grave
abuse of discretion in issuing the assailed Orders dated April 17, 2000 and June 13, 2000.

WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit. The temporary
restraining order issued by this Court on August 9, 2000 is LIFTED.

The Regional Trial Court, Branch 56, San Carlos City is DIRECTED to continue with the trial
proceedings in Civil Case No. SCC-2240 and resolve the case with dispatch.

Costs against petitioners.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

G.R. No. 170813             April 16, 2008

B.F. METAL (CORPORATION), petitioners,

vs.
SPS. ROLANDO M. LOMOTAN and LINAFLOR LOMOTAN and RICO UMUYON, respondents.

DECISION

TINGA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, assailing the award of damages against petitioner in the Decision1 and Resolution2 of the

25
Court of Appeals in CA-G.R. CV No. 58655. The Court of Appeals affirmed with modification the
Decision of the Regional Trial Court (RTC), Branch 72, Antipolo, Rizal in Civil Case No. 1567-A, which
found petitioner corporation and its driver, Onofre V. Rivera, solidarily liable to respondents for
damages.

The following factual antecedents are not disputed.

In the morning of 03 May 1989, respondent Rico Umuyon ("Umuyon") was driving the owner-type jeep
owned by respondents, Spouses Rolando and Linaflor Lomotan ("Spouses Lomotan"). The jeep was
cruising along Felix Avenue in Cainta, Rizal at a moderate speed of 20 to 30 kilometers per hour.
Suddenly, at the opposite lane, the speeding ten-wheeler truck driven by Onofre Rivera overtook a car
by invading the lane being traversed by the jeep and rammed into the jeep. The jeep was a total wreck
while Umuyon suffered "blunt thoracic injury with multiple rib fracture, fractured scapula (L), with
pneumohemothorax," which entailed his hospitalization for 19 days. Also in view of the injuries he
sustained, Umuyon could no longer drive, reducing his daily income from P150.00 to P100.00.

On 27 October 1989, respondents instituted a separate and independent civil action for damages
against petitioner BF Metal Corporation ("petitioner") and Rivera before the Regional Trial Court (RTC)
of Antipolo, Rizal. The complaint essentially alleged that defendant Rivera’s gross negligence and
recklessness was the immediate and proximate cause of the vehicular accident and that petitioner
failed to exercise the required diligence in the selection and supervision of Rivera. The complaint
prayed for the award of actual, exemplary and moral damages and attorney’s fees in favor of
respondents.

In the Answer, petitioner and Rivera denied the allegations in the complaint and averred that
respondents were not the proper parties-in-interest to prosecute the action, not being the registered
owner of the jeep; that the sole and proximate cause of the accident was the fault and negligence of
Umuyon; and that petitioner exercised due diligence in the selection and supervision of its employees.

During the trial, respondents offered the testimonies of Umuyon, SPO1 Rico Canaria, SPO4 Theodore
Cadaweg and Nicanor Fajardo, the auto-repair shop owner who gave a cost estimate for the repair of
the wrecked jeep. Among the documentary evidence presented were the 1989 cost estimate of
Pagawaan Motors, Inc.,3 which pegged the repair cost of the jeep at P96,000.00, and the cost estimate
of Fajardo Motor Works4 done in 1993, which reflected an increased repair cost at P130,655.00. They
also presented in evidence a copy of the Decision of the RTC, Assisting Branch 74, Cainta, Rizal in
Criminal Case No. 4742, entitled People of the Philippines v. Onofre V. Rivera, finding Rivera guilty of
reckless imprudence resulting in damage to property with physical injuries.

For its part, petitioner presented at the hearing Rivera himself and Habner Revarez, petitioner’s
production control superintendent. Included in its documentary evidence were written guidelines in
preventive maintenance of vehicles and safety driving rules for drivers.

On 21 April 1997, the trial court rendered its Decision, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering defendants to pay

jointly and severally to herein plaintiffs the following sums:

(a) Actual Damages --- i. P96,700.00 for cost of the owner-type jeep
ii. P15,000.00 medical expenses
iii. P50,000.00 for loss of earnings

26
 (b) Moral Damages --- P100,000.00
(c) Exemplary Damages --- P100,000.00
(d) Attorney’s Fees --- P25,000.00 plus P1,000.00 for every Court appearance

Costs of Suit.

SO ORDERED.5

The trial court declared Rivera negligent when he failed to determine with certainty that the opposite
lane was clear before overtaking the vehicle in front of the truck he was driving. It also found petitioner
negligent in the selection and supervision of its employees when it failed to prove the proper
dissemination of safety driving instructions to its drivers.

Petitioner and Rivera appealed the decision to the Court of Appeals.

On 13 April 2005, the Court of Appeals rendered the assailed Decision. It affirmed the trial court’s
finding that Rivera’s negligence was the proximate cause of the accident and that petitioner was liable
under Article 21806 of the Civil Code for its negligence in the selection and supervision of its
employees. However, the appellate court modified the amount of damages awarded to respondents.
The dispositive portion of the Decision reads:

WHEREFORE, the decision appealed from is AFFIRMED with MODIFICATION to read as

follows:

"WHEREFORE, premises considered, judgment is hereby rendered ordering defendants to pay jointly and
severally to herein plaintiffs the following sums:

(a) Actual Damages i. P130,655.00, for cost of repairing the owner-type jeep.
ii. P10,167.99 in medical expenses.
iii. P2,850.00 for lost earnings during medical treatment.
(b) Moral Damages P100,000.00
(c) Exemplary P100,000.00
Damages
(d) Attorney’s Fees P25,000.00

Costs of suit."

SO ORDERED.7

On 12 December 2005, the Court of Appeals denied the motion for reconsideration of its Decision.
Only petitioner filed the instant petition, expressly stating that it is assailing only the damages awarded
by the appellate court.

The instant petition raises the following issues: (1) whether the amount of actual damages based only
on a job estimate should be lowered; (2) whether Spouses Lomotan are also entitled to moral
damages; and (3) whether the award of exemplary damages and attorneys is warranted. For their part,
respondents contend that the aforementioned issues are factual in nature and therefore beyond the
province of a petitioner for review under Rule 45.

27
This is not the first instance where the Court has given due course to a Rule 45 petition seeking solely
the review of the award of damages.8 A party’s entitlement to damages is ultimately a question of law
because not only must it be proved factually but also its legal justification must be shown. In any case,
the trial court and the appellate court have different findings as to the amount of damages to which
respondents are entitled. When the factual findings of the trial and appellate courts are conflicting, the
Court is constrained to look into the evidence presented before the trial court so as to resolve the
herein appeal.9

The trial court split the award of actual damages into three items, namely, the cost of the wrecked
jeep, the medical expenses incurred by respondent Umuyon and the monetary value of his earning
capacity. On appeal, the Court of Appeals reduced the amount of medical expenses and loss of
earning capacity to which respondent Umuyon is entitled but increased from P96,700.00
to P130,655.00 the award in favor of Spouses Lomotan for the cost of repairing the wrecked jeep.

The instant petition assails only the modified valuation of the wrecked jeep. Petitioner points out that
the alleged cost of repairing the jeep pegged at P130,655.00 has not been incurred but is only a job
estimate or a sum total of the expenses yet to be incurred for its repair. It argues that the best
evidence obtainable to prove with a reasonable degree of certainty the value of the jeep is the
acquisition cost or the purchase price of the jeep minus depreciation for one year of use equivalent to
10% of the purchase price.

Petitioner’s argument is partly meritorious.

Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or
compensatory damages.10 Actual damages are such compensation or damages for an injury that will
put the injured party in the position in which he had been before he was injured. They pertain to such
injuries or losses that are actually sustained and susceptible of measurement. To justify an award of
actual damages, there must be competent proof of the actual amount of loss. Credence can be given
only to claims which are duly supported by receipts.11

In People v. Gopio,12 the Court allowed the reimbursement of only the laboratory fee that was duly
receipted as "the rest of the documents, which the prosecution presented to prove the actual expenses
incurred by the victim, were merely a doctor’s prescription and a handwritten list of food
expenses."13 In Viron Transportation Co., Inc. v. Delos Santos,14 the Court particularly disallowed the
award of actual damages, considering that the actual damages suffered by private respondents therein
were based only on a job estimate and a photo showing the damage to the truck and no competent
proof on the specific amounts of actual damages suffered was presented.

In the instant case, no evidence was submitted to show the amount actually spent for the repair or
replacement of the wrecked jeep. Spouses Lomotan presented two different cost estimates to prove
the alleged actual damage of the wrecked jeep. Exhibit "B," is a job estimate by Pagawaan Motors,
Inc., which pegged the repair cost of the jeep at P96,000.00, while Exhibit "M," estimated the cost of
repair at P130,655.00. Following Viron, neither estimate is competent to prove actual damages. Courts
cannot simply rely on speculation, conjecture or guesswork in determining the fact and amount of
damages.15

As correctly pointed out by petitioner, the best evidence to prove the value of the wrecked jeep is
reflected in Exhibit "I," the Deed of Sale showing the jeep’s acquisition cost at P72,000.00. However,
the depreciation value of equivalent to 10% of the acquisition cost cannot be deducted from it in the
absence of proof in support thereof.

28
Petitioner also questions the award of moral and exemplary damages in favor of Spouses Lomotan. It
argues that the award of moral damages was premised on the resulting physical injuries arising from
the quasi-delict; since only respondent Umuyon suffered physical injuries, the award should pertain
solely to him. Correspondingly, the award of exemplary damages should pertain only to respondent
Umuyon since only the latter is entitled to moral damages, petitioner adds.

In the case of moral damages, recovery is more an exception rather than the rule. Moral damages are
not punitive in nature but are designed to compensate and alleviate the physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar harm unjustly caused to a person. In order that an award of moral damages
can be aptly justified, the claimant must be able to satisfactorily prove that he has suffered such
damages and that the injury causing it has sprung from any of the cases listed in Articles 221916 and
222017 of the Civil Code. Then, too, the damages must be shown to be the proximate result of a
wrongful act or omission. The claimant must establish the factual basis of the damages and its causal
tie with the acts of the defendant. In fine, an award of moral damages would require, firstly, evidence
of besmirched reputation or physical, mental or psychological suffering sustained by the claimant;
secondly, a culpable act or omission factually established; thirdly, proof that the wrongful act or
omission of the defendant is the proximate cause of the damages sustained by the claimant; and
fourthly, that the case is predicated on any of the instances expressed or envisioned by Article 2219
and Article 2220 of the Civil Code.18

In culpa aquiliana, or quasi-delict, (a) when an act or omission causes physical injuries, or (b) where
the defendant is guilty of intentional tort, moral damages may aptly be recovered. This rule also
applies, as aforestated, to breaches of contract where the defendant acted fraudulently or in bad faith.
In culpa criminal, moral damages could be lawfully due when the accused is found guilty of physical
injuries, lascivious acts, adultery or concubinage, illegal or arbitrary detention, illegal arrest, illegal
search, or defamation.19

Undoubtedly, petitioner is liable for the moral damages suffered by respondent Umuyon. Its liability is
based on a quasi-delict or on its negligence in the supervision and selection of its driver, causing the
vehicular accident and physical injuries to respondent Umuyon. Rivera is also liable for moral
damages to respondent Umuyon based on either culpa criminal or quasi-delict. Since the decision in
the criminal case, which found Rivera guilty of criminal negligence, did not award moral damages, the
same may be awarded in the instant civil action for damages.

Jurisprudence show that in criminal offenses resulting to the death of the victim, an award within the
range of P50,000.00 to P100,000.00 as moral damages has become the trend.20 Under the
circumstances, because respondent Umuyon did not die but had become permanently incapacitated to
drive as a result of the accident, the award of P30,000.00 for moral damages in his favor is justified.21

However, there is no legal basis in awarding moral damages to Spouses Lomotan whether arising
from the criminal negligence committed by Rivera or based on the negligence of petitioner under
Article 2180.22 Article 221923 speaks of recovery of moral damages in case of a criminal offense
resulting in physical injuries or quasi-delicts causing physical injuries, the two instances where Rivera
and petitioner are liable for moral damages to respondent Umuyon. Article 222024 does speak of
awarding moral damages where there is injury to property, but the injury must be willful and the
circumstances show that such damages are justly due. There being no proof that the accident was
willful, Article 2220 does not apply.

Exemplary or corrective damages are imposed, by way of example or correction for the public good, in
addition to moral, temperate, liquidated or compensatory damages.25 Exemplary damages cannot be
recovered as a matter of right; the court will decide whether or not they should be

29
adjudicated.26 In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.27 While the amount of the exemplary damages need not be proved, 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.28

As correctly pointed out by the Court of Appeals, Spouses Lomotan have shown that they are entitled
to compensatory damages while respondent Umuyon can recover both compensatory and moral
damages. To serve as an example for the public good, the Court affirms the award of exemplary
damages in the amount of P100,000.00 to respondents. Because exemplary damages are awarded,
attorney’s fees may also be awarded in consonance with Article 2208 (1).29 The Court affirms the
appellate court’s award of attorney’s fees in the amount of P25,000.00.

WHEREFORE, the instant petition for certiorari is PARTIALLY GRANTED. The Decision of the Court
of Appeals in CA-G.R. CV No. 58655 is AFFIRMED with MODIFICATION. The award of actual
damages for the cost of repairing the owner-type jeep is hereby REDUCED to P72,000.00 while the
moral damages of P30,000.00 is awarded solely to respondent Umuyon. All other awards of the Court
of Appeals are AFFIRMED. Following jurisprudence,30 petitioner is ordered to PAY legal interest of 6%
per annum from the date of promulgation of the Decision dated 21 April 1997 of the Regional Trial
Court, Branch 72, Antipolo, Rizal and 12% per annum from the time the Decision of this Court attains
finality, on all sums awarded until their full satisfaction.

SO ORDERED.

DANTE O. TINGA
Associate Justice

G.R. No. 175587               September 21, 2007

PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Petitioner,

vs.
JOSEPH ANTHONY M. ALEJANDRO, Respondent.

DECISION

YNARES-SANTIAGO, J.:

This petition for review assails the May 31, 2006 Decision1 of the Court of Appeals in CA-G.R. CV No.
78200 affirming the August 30, 2000 Decision2 of the Regional Trial Court of Makati, which granted
respondent Joseph Anthony M. Alejandro’s claim for damages arising from petitioner Philippine
Commercial International Bank’s (PCIB) invalid garnishment of respondent’s deposits.

On October 23, 1997, petitioner filed against respondent a complaint3 for sum of money with prayer for
the issuance of a writ of preliminary attachment. Said complaint alleged that on September 10, 1997,
respondent, a resident of Hong Kong, executed in favor of petitioner a promissory note obligating
himself to pay ₱249,828,588.90 plus interest. In view of the fluctuations in the foreign exchange rates
which resulted in the insufficiency of the deposits assigned by respondent as security for the loan,
petitioner requested the latter to put up additional security for the loan. Respondent, however, sought a
reconsideration of said request pointing out petitioner’s alleged mishandling of his account due to its
failure to carry out his instruction to close his account as early as April 1997, when the prevailing rate

30
of exchange of the US Dollar to Japanese yen was US$1.00:JPY127.50.4 It appears that the amount of
₱249,828,588.90 was the consolidated amount of a series of yen loans granted by petitioner to
respondent during the months of February and April 1997.5

In praying for the issuance of a writ of preliminary attachment under Section 1 paragraphs (e) and (f) of
Rule 57 of the Rules of Court, petitioner alleged that (1) respondent fraudulently withdrew his
unassigned deposits notwithstanding his verbal promise to PCIB Assistant Vice President Corazon B.
Nepomuceno not to withdraw the same prior to their assignment as security for the loan; and (2) that
respondent is not a resident of the Philippines. The application for the issuance of a writ was
supported with the affidavit of Nepomuceno.6

On October 24, 1997, the trial court granted the application and issued the writ ex parte7 after
petitioner posted a bond in the amount of ₱18,798,734.69, issued by Prudential Guarantee &
Assurance Inc., under Bond No. HO-46764-97. On the same date, the bank deposits of respondent
with Rizal Commercial Banking Corporation (RCBC) were garnished. On October 27, 1997,
respondent, through counsel, filed a manifestation informing the court that he is voluntarily submitting
to its jurisdiction.8

Subsequently, respondent filed a motion to quash9 the writ contending that the withdrawal of his
unassigned deposits was not fraudulent as it was approved by petitioner. He also alleged that
petitioner knew that he maintains a permanent residence at Calle Victoria, Ciudad Regina, Batasan
Hills, Quezon City, and an office address in Makati City at the Law Firm Romulo Mabanta
Buenaventura Sayoc & De los Angeles, 10 where he is a partner. In both addresses, petitioner regularly
communicated with him through its representatives. Respondent added that he is the managing
partner of the Hong Kong branch of said Law Firm; that his stay in Hong Kong is only temporary; and
that he frequently travels back to the Philippines.

On December 24, 1997, the trial court issued an order quashing the writ and holding that the
withdrawal of respondent’s unassigned deposits was not intended to defraud petitioner. It also found
that the representatives of petitioner personally transacted with respondent through his home address
in Quezon City and/or his office in Makati City. It thus concluded that petitioner misrepresented and
suppressed the facts regarding respondent’s residence considering that it has personal and official
knowledge that for purposes of service of summons, respondent’s residence and office addresses are
located in the Philippines. The dispositive portion of the court’s decision is as follows:

WHEREFORE, the URGENT MOTION TO QUASH, being meritorious, is hereby GRANTED, and the
ORDER of 24 October 1997 is hereby RECONSIDERED and SET ASIDE and the WRIT OF
attachment of the same is hereby DISCHARGED.

SO ORDERED.11

With the denial12 of petitioner’s motion for reconsideration, it elevated the case to the Court of Appeals
(CA-G.R. SP No. 50748) via a petition for certiorari. On May 10, 1999, the petition was dismissed for
failure to prove that the trial court abused its discretion in issuing the aforesaid order.13 Petitioner filed a
motion for reconsideration but was denied on October 28, 1999.14 On petition with this Court, the case
was dismissed for late filing in a minute resolution (G.R. No. 140605) dated January 19,
2000.15 Petitioner filed a motion for reconsideration but was likewise denied with finality on March 6,
2000.16

Meanwhile, on May 20, 1998, respondent filed a claim for damages in the amount of P25 Million17 on
the attachment bond (posted by Prudential Guarantee & Assurance, Inc., under JCL(4) No. 01081,
Bond No. HO-46764-97) on account of the wrongful garnishment of his deposits. He presented

31
evidence showing that his ₱150,000.00 RCBC check payable to his counsel as attorney’s fees, was
dishonored by reason of the garnishment of his deposits. He also testified that he is a graduate of the
Ateneo de Manila University in 1982 with a double degree of Economics and Management
Engineering and of the University of the Philippines in 1987 with the degree of Bachelor of Laws.
Respondent likewise presented witnesses to prove that he is a well known lawyer in the business
community both in the Philippines and in Hong Kong.18 For its part, the lone witness presented by
petitioner was Nepomuceno who claimed that she acted in good faith in alleging that respondent is a
resident of Hong Kong.19

On August 30, 2000, the trial court awarded damages to respondent in the amount of P25 Million
without specifying the basis thereof, thus:

WHEREFORE, premises above considered, and defendant having duly established his claim in the
amount of ₱25,000,000.00, judgment is hereby rendered ordering Prudential Guarantee & [Assurance]
Co., which is solidarily liable with plaintiff to pay defendant the full amount of bond under Prudential
Guarantee & Assurance, Inc. JCL(4) No. 01081, [Bond No. HO-46764-97], dated 24 October 1997 in
the amount of ₱18,798,734.69. And, considering that the amount of the bond is insufficient to fully
satisfy the award for damages, plaintiff is hereby ordered to pay defendant the amount of
₱6,201,265.31.

SO ORDERED.20

The trial court denied petitioner’s motion for reconsideration on October 24, 2000.21

Petitioner elevated the case to the Court of Appeals which affirmed the findings of the trial court. It held
that in claiming that respondent was not a resident of the Philippines, petitioner cannot be said to have
been in good faith considering that its knowledge of respondent’s Philippine residence and office
address goes into the very issue of the trial court’s jurisdiction which would have been defective had
respondent not voluntarily appeared before it.

The Court of Appeals, however, reduced the amount of damages awarded to petitioner and specified
their basis. The dispositive portion of the decision of the Court of Appeals states:

WHEREFORE, the appeal is PARTIALLY GRANTED and the decision appealed from is hereby
MODIFIED. The award of damages in the amount of ₱25,000,000.00 is deleted. In lieu thereof,
Prudential Guarantee & [Assurance, Inc.], which is solidarily liable with appellant [herein petitioner], is
ORDERED to pay appellee [herein respondent] ₱2,000,000.00 as nominal damages; ₱5,000,000.00
as moral damages; and ₱1,000,000.00 as attorney’s fees, to be satisfied against the attachment bond
under Prudential Guarantee & Assurance, Inc. JCL (4) No. 01081.

SO ORDERED.22

Both parties moved for reconsideration. On November 21, 2006, the Court of Appeals denied
petitioner’s motion for reconsideration but granted that of respondent’s by ordering petitioner to pay
additional ₱5Million as exemplary damages.23

Hence, the instant petition.

At the outset, it must be noted that the ruling of the trial court that petitioner is not entitled to a writ of
attachment because respondent is a resident of the Philippines and that his act of withdrawing his
deposits with petitioner was without intent to defraud, can no longer be passed upon by this Court.

32
More importantly, the conclusions of the court that petitioner bank misrepresented that respondent was
residing out of the Philippines and suppressed the fact that respondent has a permanent residence in
Metro Manila where he may be served with summons, are now beyond the power of this Court to
review having been the subject of a final and executory order. Said findings were sustained by the
Court of Appeals in CA-G.R. SP No. 50784 and by this Court in G.R. No. 140605. The rule on
conclusiveness of judgment, which obtains under the premises, precludes the relitigation of a
particular fact or issue in another action between the same parties even if based on a different claim or
cause of action. The judgment in the prior action operates as estoppel as to those matters in issue or
points controverted, upon the determination of which the finding or judgment was rendered. The
previous judgment is conclusive in the second case, as to those matters actually and directly
controverted and determined.24 Hence, the issues of misrepresentation by petitioner and the residence
of respondent for purposes of service of summons can no longer be questioned by petitioner in this
case.

The core issue for resolution is whether petitioner bank is liable for damages for the improper issuance
of the writ of attachment against respondent.

We rule in the affirmative.

Notwithstanding the final judgment that petitioner is guilty of misrepresentation and suppression of a
material fact, the latter contends that it acted in good faith. Petitioner also contends that even if
respondent is considered a resident of the Philippines, attachment is still proper under Section 1,
paragraph (f), Rule 57 of the Rules of Court since he (respondent) is a resident who is temporarily out
of the Philippines upon whom service of summons may be effected by publication.

Petitioner’s contentions are without merit.

While the final order of the trial court which quashed the writ did not categorically use the word "bad
faith" in characterizing the representations of petitioner, the tenor of said order evidently considers the
latter to have acted in bad faith by resorting to a deliberate strategy to mislead the court. Thus –

In the hearings of the motion, and oral arguments of counsels before the Court, it appears that plaintiff
BANK through its contracting officers Vice President Corazon B. Nepomuceno and Executive Vice
President Jose Ramon F. Revilla, personally transacted with defendant mainly through defendant’s
permanent residence in METRO-MANILA, either in defendant’s home address in Quezon City or his
main business address at the Romulo Mabanta Buenaventura Sayoc & Delos Angeles in MAKATI and
while at times follow ups were made through defendant’s temporary home and business addresses in
Hongkong. It is therefore clear that plaintiff could not deny their personal and official knowledge that
defendant’s permanent and official residence for purposes of service of summons is in the Philippines.
In fact, this finding is further confirmed by the letter of Mr. JOHN GOKONGWEI, JR. Chairman,
Executive Committee of plaintiff BANK, in his letter dated 6 October 1997 on the subject loan to
defendant of the same law firm was addressed to the ROMULO LAW FIRM in MAKATI.

[Anent the] second ground of attachment x x x [t]he Court finds that the amount withdrawn was not
part of defendant’s peso deposits assigned with the bank to secure the loan and as proof that the
withdrawal was not intended to defraud plaintiff as creditor is that plaintiff approved and allowed said
withdrawals. It is even noted that when the Court granted the prayer for attachment it was mainly on
the first ground under Section 1(f) of Rule 57 of the 1997 Rules of Civil Procedure, that defendant
resides out of the Philippines.

On the above findings, it is obvious that plaintiff already knew from the beginning the deficiency of its
second ground for attachment [i.e.,] disposing properties with intent to defraud his creditors, and

33
therefore plaintiff had to resort to this misrepresentation that defendant was residing out of the
Philippines and suppressed the fact that defendant’s permanent residence is in METRO MANILA
where he could be served with summons.

On the above findings, and mainly on the misrepresentations made by plaintiff on the grounds for the
issuance of the attachment in the verified complaint, the Court concludes that defendant has duly
proven its grounds in the MOTION and that plaintiff is not entitled to the attachment.25

Petitioner is therefore barred by the principle of conclusiveness of judgment from again invoking good
faith in the application for the issuance of the writ. Similarly, in the case of Hanil Development Co., Ltd.
v. Court of Appeals,26 the Court debunked the claim of good faith by a party who maliciously sought the
issuance of a writ of attachment, the bad faith of said party having been previously determined in a
final decision which voided the assailed writ. Thus –

Apropos the Application for Judgment on the Attachment Bond, Escobar claims in its petition that the
award of attorney’s fees and injunction bond premium in favor of Hanil is [contrary] to law and
jurisprudence. It contends that no malice or bad faith may be imputed to it in procuring the writ.

Escobar’s protestation is now too late in the day. The question of the illegality of the attachment and
Escobar’s bad faith in obtaining it has long been settled in one of the earlier incidents of this case. The
Court of Appeals, in its decision rendered on February 3, 1983 in C.A.-G.R. No. SP-14512, voided the
challenged writ, having been issued with grave abuse of discretion. Escobar’s bad faith in procuring
the writ cannot be doubted. Its Petition for the Issuance of Preliminary Attachment made such damning
allegations that: Hanil was already able to secure a complete release of its final collection from the
MPWH; it has moved out some of its heavy equipments for unknown destination, and it may leave the
country anytime. Worse, its Ex Parte Motion to Resolve Petition alleged that "after personal verification
by (Escobar) of (Hanil’s) equipment in Cagayan de Oro City, it appears that the equipments were no
longer existing from their compound." All these allegations of Escobar were found to be totally
baseless and untrue.

Even assuming that the trial court did not make a categorical pronouncement of misrepresentation and
suppression of material facts on the part of petitioner, the factual backdrop of this case does not
support petitioner’s claim of good faith. The facts and circumstances omitted are highly material and
relevant to the grant or denial of writ of attachment applied for.

Finally, there is no merit in petitioner’s contention that respondent can be considered a resident who is
temporarily out of the Philippines upon whom service of summons may be effected by publication, and
therefore qualifies as among those against whom a writ of attachment may be issued under Section 1,
paragraph (f), Rule 57 of the Rules of Court which provides:

(f) In an action against a party x x x on whom summons may be served by publication.

In so arguing, petitioner attempts to give the impression that although it erroneously invoked the
ground that respondent does not reside in the Philippines, it should not be made to pay damages
because it is in fact entitled to a writ of attachment had it invoked the proper ground under Rule 57.
However, even on this alternative ground, petitioner is still not entitled to the issuance of a writ of
attachment.

The circumstances under which a writ of preliminary attachment may be issued are set forth in Section
1, Rule 57 of the Rules of Court, to wit:

34
SEC. 1. Grounds upon which attachment may issue. — At the commencement of the action or at any
time before entry of judgment, a plaintiff or any proper party may have the property of the adverse
party attached as security for the satisfaction of any judgment that may be recovered in the following
cases:

(a) In an action for the recovery of a specified amount of money or damages, other than moral
and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or quasi-
delict against a party who is about to depart from the Philippines with intent to defraud his
creditors;

(b) In an action for money or property embezzled or fraudulently misapplied or converted to his
own use by a public officer, or an officer of a corporation or an attorney, factor, broker, agent,
or clerk, in the course of his employment as such, or by any other person in a fiduciary
capacity, or for a willful violation of duty;

(c) In an action to recover the possession of personal property unjustly or fraudulently taken,
detained, or converted, when the property, or any part thereof, has been concealed, removed,
or disposed of to prevent its being found or taken by the applicant or an authorized person;

(d) In an action against a party who has been guilty of a fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in the performance thereof;

(e) In an action against a party who has removed or disposed of his property, or is about to do
so, with intent to defraud his creditors;

(f) In an action against a party who resides out of the Philippines, or on whom summons may
be served by publication.

The purposes of preliminary attachment are: (1) to seize the property of the debtor in advance of final
judgment and to hold it for purposes of satisfying said judgment, as in the grounds stated in
paragraphs (a) to (e) of Section 1, Rule 57 of the Rules of Court; or (2) to acquire jurisdiction over the
action by actual or constructive seizure of the property in those instances where personal or
substituted service of summons on the defendant cannot be effected, as in paragraph (f) of the same
provision.27

Corollarily, in actions in personam, such as the instant case for collection of sum of money,28 summons
must be served by personal or substituted service, otherwise the court will not acquire jurisdiction over
the defendant. In case the defendant does not reside and is not found in the Philippines (and hence
personal and substituted service cannot be effected), the remedy of the plaintiff in order for the court to
acquire jurisdiction to try the case is to convert the action into a proceeding in rem or quasi in rem by
attaching the property of the defendant.29 Thus, in order to acquire jurisdiction in actions in personam
where defendant resides out of and is not found in the Philippines, it becomes a matter of course for
the court to convert the action into a proceeding in rem or quasi in rem by attaching the defendant’s
property. The service of summons in this case (which may be by publication coupled with the sending
by registered mail of the copy of the summons and the court order to the last known address of the
defendant), is no longer for the purpose of acquiring jurisdiction but for compliance with the
requirements of due process.30

However, where the defendant is a resident who is temporarily out of the Philippines, attachment of
his/her property in an action in personam, is not always necessary in order for the court to acquire
jurisdiction to hear the case.

35
Section 16, Rule 14 of the Rules of Court reads:

Sec. 16. Residents temporarily out of the Philippines. – When an action is commenced against a
defendant who ordinarily resides within the Philippines, but who is temporarily out of it, service may, by
leave of court, be also effected out of the Philippines, as under the preceding section.

The preceding section referred to in the above provision is Section 15 which provides for
extraterritorial service – (a) personal service out of the Philippines, (b) publication coupled with the
sending by registered mail of the copy of the summons and the court order to the last known address
of the defendant; or (c) in any other manner which the court may deem sufficient.

In Montalban v. Maximo,31 however, the Court held that substituted service of summons (under the
present Section 7, Rule 14 of the Rules of Court) is the normal mode of service of summons that will
confer jurisdiction on the court over the person of residents temporarily out of the Philippines.
Meaning, service of summons may be effected by (a) leaving copies of the summons at the
defendant’s residence with some person of suitable discretion residing therein, or (b) by leaving copies
at the defendant’s office or regular place of business with some competent person in charge
thereof.32 Hence, the court may acquire jurisdiction over an action in personam by mere substituted
service without need of attaching the property of the defendant.

The rationale in providing for substituted service as the normal mode of service for residents
temporarily out of the Philippines, was expounded in Montalban v. Maximo,33 in this wise:

A man temporarily absent from this country leaves a definite place of residence, a dwelling where he
lives, a local base, so to speak, to which any inquiry about him may be directed and where he is bound
to return. Where one temporarily absents himself, he leaves his affairs in the hands of one who may
be reasonably expected to act in his place and stead; to do all that is necessary to protect his
interests; and to communicate with him from time to time any incident of importance that may affect
him or his business or his affairs. It is usual for such a man to leave at his home or with his business
associates information as to where he may be contacted in the event a question that affects him crops
up.

Thus, in actions in personam against residents temporarily out of the Philippines, the court need not
always attach the defendant’s property in order to have authority to try the case. Where the plaintiff
seeks to attach the defendant’s property and to resort to the concomitant service of summons by
publication, the same must be with prior leave, precisely because, if the sole purpose of the
attachment is for the court to acquire jurisdiction, the latter must determine whether from the
allegations in the complaint, substituted service (to persons of suitable discretion at the defendant’s
residence or to a competent person in charge of his office or regular place of business) will suffice, or
whether there is a need to attach the property of the defendant and resort to service of summons by
publication in order for the court to acquire jurisdiction over the case and to comply with the
requirements of due process.

In the instant case, it must be stressed that the writ was issued by the trial court mainly on the
representation of petitioner that respondent is not a resident of the Philippines.34 Obviously, the trial
court’s issuance of the writ was for the sole purpose of acquiring jurisdiction to hear and decide the
case. Had the allegations in the complaint disclosed that respondent has a residence in Quezon City
and an office in Makati City, the trial court, if only for the purpose of acquiring jurisdiction, could have
served summons by substituted service on the said addresses, instead of attaching the property of the
defendant. The rules on the application of a writ of attachment must be strictly construed in favor of the
defendant. For attachment is harsh, extraordinary, and summary in nature; it is a rigorous remedy

36
which exposes the debtor to humiliation and annoyance.35 It should be resorted to only when
necessary and as a last remedy.

It is clear from the foregoing that even on the allegation that respondent is a resident temporarily out of
the Philippines, petitioner is still not entitled to a writ of attachment because the trial court could
acquire jurisdiction over the case by substituted service instead of attaching the property of the
defendant. The misrepresentation of petitioner that respondent does not reside in the Philippines and
its omission of his local addresses was thus a deliberate move to ensure that the application for the
writ will be granted.

In light of the foregoing, the Court of Appeals properly sustained the finding of the trial court that
petitioner is liable for damages for the wrongful issuance of a writ of attachment against respondent.

Anent the actual damages, the Court of Appeals is correct in not awarding the same inasmuch as the
respondent failed to establish the amount garnished by petitioner. It is a well settled rule that one who
has been injured by a wrongful attachment can recover damages for the actual loss resulting
therefrom. But for such losses to be recoverable, they must constitute actual damages duly
established by competent proofs, which are, however, wanting in the present case.36

Nevertheless, nominal damages may be awarded to a plaintiff whose right has been violated or
invaded by the defendant, for the purpose of vindicating or recognizing that right, and not for
indemnifying the plaintiff for any loss suffered by him. Its award is thus not for the purpose of
indemnification for a loss but for the recognition and vindication of a right. Indeed, nominal damages
are damages in name only and not in fact.37 They are recoverable where some injury has been done
but the pecuniary value of the damage is not shown by evidence and are thus subject to the discretion
of the court according to the circumstances of the case.38

In this case, the award of nominal damages is proper considering that the right of respondent to use
his money has been violated by its garnishment. The amount of nominal damages must, however, be
reduced from ₱2 million to ₱50,000.00 considering the short period of 2 months during which the writ
was in effect as well as the lack of evidence as to the amount garnished. 1âwphi1

Likewise, the award of attorney’s fees is proper when a party is compelled to incur expenses to lift a
wrongfully issued writ of attachment. The basis of the award thereof is also the amount of money
garnished, and the length of time respondents have been deprived of the use of their money by reason
of the wrongful attachment.39 It may also be based upon (1) the amount and the character of the
services rendered; (2) the labor, time and trouble involved; (3) the nature and importance of the
litigation and business in which the services were rendered; (4) the responsibility imposed; (5) the
amount of money and the value of the property affected by the controversy or involved in the
employment; (6) the skill and the experience called for in the performance of the services; (7) the
professional character and the social standing of the attorney; (8) the results secured, it being a
recognized rule that an attorney may properly charge a much larger fee when it is contingent than
when it is not.40

All the aforementioned weighed, and considering the short period of time it took to have the writ lifted,
the favorable decisions of the courts below, the absence of evidence as to the professional character
and the social standing of the attorney handling the case and the amount garnished, the award of
attorney’s fees should be fixed not at ₱1 Million, but only at ₱200,000.00.

The courts below correctly awarded moral damages on account of petitioner’s misrepresentation and
bad faith; however, we find the award in the amount of ₱5 Million excessive. Moral damages are to be
fixed upon the discretion of the court taking into consideration the educational, social and financial

37
standing of the parties.41 Moral damages are not intended to enrich a complainant at the expense of a
defendant.42 They are awarded only to enable the injured party to obtain means, diversion or
amusements that will serve to obviate the moral suffering he has undergone, by reason of petitioner’s
culpable action. Moral damages must be commensurate with the loss or injury suffered. Hence, the
award of moral damages is reduced to ₱500,000.00.

Considering petitioner’s bad faith in securing the writ of attachment, we sustain the award of
exemplary damages by way of example or correction for public good. This should deter parties in
litigations from resorting to baseless and preposterous allegations to obtain writs of attachments. While
as a general rule, the liability on the attachment bond is limited to actual (or in some cases, temperate
or nominal) damages, exemplary damages may be recovered where the attachment was established
to be maliciously sued out.43 Nevertheless, the award of exemplary damages in this case should be
reduced from ₱5M to ₱500,000.00.

Finally, contrary to the claim of petitioner, the instant case for damages by reason of the invalid
issuance of the writ, survives the dismissal of the main case for sum of money. Suffice it to state that
the claim for damages arising from such wrongful attachment may arise and be decided separately
from the merits of the main action.44

WHEREFORE, the petition is PARTIALLY GRANTED. The May 31, 2006 Decision of the Court of
Appeals in CA-G.R. CV No. 78200 is AFFIRMED with MODIFICATIONS. As modified, petitioner
Philippine Commercial International Bank is ordered to pay respondent Joseph Anthony M. Alejandro
the following amounts: ₱50,000.00 as nominal damages, ₱200,000.00 as attorney’s fees; and
₱500,000.00 as moral damages, and ₱500,000.00 as exemplary damages, to be satisfied against the
attachment bond issued by Prudential Guarantee & Assurance Inc.,45 under JCL (4) No. 01081, Bond
No. HO-46764-97.

No pronouncement as to costs.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

38
G.R. No. 159270. August 22, 2005

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, Petitioners,

vs.
HON. COURT OF APPEALS, RODRIGO ARNAIZ, REGINA LATAGAN, RICARDO GENERALAO
and PAMPANGA SUGAR DEVELOPMENT COMPANY, INC., CORPORATION, Respondent.

DECISION

CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision of the Court of Appeals (CA) in CA-G.R. CV
1 

No. 47699 affirming, with modification, the decision of the Regional Trial Court (RTC) of Manila in Civil
Case No. 93-64803.

The Antecedents

Pampanga Sugar Development Company, Inc. (PASUDECO) transports sugarcane from Mabalacat
and Magalang, Pampanga. When the Mount Pinatubo eruption of 1991 heavily damaged the national
bridges along Abacan-Angeles and Sapang Maragul via Magalang, Pampanga, it requested
permission from the Toll Regulatory Board (TRB) for its trucks to enter and pass through the North
Luzon Expressway (NLEX) via Dau-Sta. Ines from Mabalacat, and via Angeles from Magalang, and
exit at San Fernando going to its milling factory. The TRB furnished the Philippine National
2 

Construction Corporation (PNCC) (the franchisee that operates and maintains the toll facilities in the
North and South Luzon Toll Expressways) with a copy of the said request for it to comment thereon. 3

On November 5, 1991, TRB and PASUDECO entered into a Memorandum of Agreement (MOA), 4 

where the latter was allowed to enter and pass through the NLEX on the following terms and
conditions:

1. PASUDECO trucks should move in convoy;

2. Said trucks will stay on the right lane;

3. A vehicle with blinking lights should be assigned at the rear end of the convoy with a sign which
should read as follows: Caution: CONVOY AHEAD!!!;

4. Tollway safety measures should be properly observed;

5. Accidents or damages to the toll facilities arising out of any activity related to this approval shall be
the responsibility of PASUDECO;

6. PASUDECO shall be responsible in towing their stalled trucks immediately to avoid any
inconvenience to the other motorists;

7. This request will be in force only while the national bridges along Abacan-Angeles and Sapang
Maragul via Magalang remain impassable.

PASUDECO furnished the PNCC with a copy of the MOA. In a Letter dated October 22, 1992, the
5  6 

PNCC informed PASUDECO that it interposed no objection to the MOA.

39
At around 2:30 a.m. on January 23, 1993, Alex Sendin, the PNCC security supervisor, and his co-
employees Eduardo Ducusin and Vicente Pascual were patrolling Km. 72 going north of the NLEX.
They saw a pile of sugarcane in the middle portion of the north and southbound lanes of the
road. They placed lit cans with diesel oil in the north and southbound lanes, including lane dividers
7 

with reflectorized markings, to warn motorists of the obstruction. Sendin, Ducusin and Pascual
proceeded to the PASUDECO office, believing that the pile of sugarcane belonged to it since it was
the only milling company in the area. They requested for a payloader or grader to clear the area.
However, Engineer Oscar Mallari, PASUDECO’s equipment supervisor and transportation
superintendent, told them that no equipment operator was available as it was still very
early. Nonetheless, Mallari told them that he would send someone to clear the affected area.
8 

Thereafter, Sendin and company went back to Km. 72 and manned the traffic. At around 4:00 a.m.,
five (5) PASUDECO men arrived, and started clearing the highway of the sugarcane. They stacked the
sugarcane at the side of the road. The men left the area at around 5:40 a.m., leaving a few flattened
sugarcanes scattered on the road. As the bulk of the sugarcanes had been piled and transferred along
the roadside, Sendin thought there was no longer a need to man the traffic. As dawn was already
approaching, Sendin and company removed the lighted cans and lane dividers. Sendin went to his
9 

office in Sta. Rita, Guiguinto, Bulacan, and made the necessary report. 10

At about 6:30 a.m., Rodrigo S. Arnaiz, a certified mechanic and marketing manager of JETTY
Marketing, Inc., was driving his two-door Toyota Corolla with plate number FAG 961 along the NLEX
11 

at about 65 kilometers per hour. He was with his sister Regina Latagan, and his friend Ricardo
12 

Generalao; they were on their way to Baguio to attend their grandmother’s first death anniversary. As13 

the vehicle ran over the scattered sugarcane, it flew out of control and turned turtle several times. The
accident threw the car about fifteen paces away from the scattered sugarcane.

Police Investigator Demetrio Arcilla investigated the matter and saw black and white sugarcanes on
the road, on both lanes, which appeared to be flattened. 14

On March 4, 1993, Arnaiz, Latagan and Generalao filed a complaint for damages against
15 

PASUDECO and PNCC in the RTC of Manila, Branch 16. The case was docketed as Civil Case No.
93-64803. They alleged, inter alia, that through its negligence, PNCC failed to keep and maintain the
NLEX safe for motorists when it allowed PASUDECO trucks with uncovered and unsecured sugarcane
to pass through it; that PASUDECO negligently spilled sugarcanes on the NLEX, and PNCC failed to
put up emergency devices to sufficiently warn approaching motorists of the existence of such spillage;
and that the combined gross negligence of PASUDECO and PNCC was the direct and proximate
cause of the injuries sustained by Latagan and the damage to Arnaiz’s car. They prayed, thus:

WHEREFORE, it is respectfully prayed that, after due hearing, judgment be rendered for the plaintiffs,
ordering the defendants jointly and severally:

(a) To pay unto plaintiff Rodrigo Arnaiz the sum of ₱100,000.00 representing the value of his car which
was totally wrecked;

(b) to pay unto plaintiff Regina Latagan the sum of ₱100,000.00 by way of reimbursement for medical
expenses, the sum of ₱50,000.00 by way of moral damages, and the sum of ₱30,000.00 by way of
exemplary damages;

(c) To pay unto plaintiffs Rodrigo Arnaiz and Ricardo Generalao the sum of ₱5,000.00 by way of
reimbursement for medical expenses; and

(d) To pay unto the plaintiffs the sum of ₱30,000.00 by way of attorney’s fees; plus the costs of suit.

40
Plaintiffs pray for other reliefs which the Honorable Court may find due them in the premises. 16

In its Answer, PNCC admitted that it was under contract to manage the North Luzon Expressway, to
17 

keep it safe for motorists. It averred that the mishap was due to the "unreasonable speed" at which
Arnaiz’s car was running, causing it to turn turtle when it passed over some pieces of flattened
sugarcane. It claimed that the proximate cause of the mishap was PASUDECO’s gross negligence in
spilling the sugarcane, and its failure to clear and mop up the area completely. It also alleged that
Arnaiz was guilty of contributory negligence in driving his car at such speed.

The PNCC interposed a compulsory counterclaim against the plaintiffs and cross-claim against its co-
18  19 

defendant PASUDECO.

PASUDECO adduced evidence that aside from it, there were other sugarcane mills in the area, like
the ARCAM Sugar Central (formerly known as Pampanga Sugar Mills) and the Central Azucarrera de
Tarlac; it was only through the expressway that a vehicle could access these three (3) sugar
20 

centrals; and PASUDECO was obligated to clear spillages whether the planters’ truck which caused
21 

the spillage was bound for PASUDECO, ARCAM or Central Azucarera. 22

On rebuttal, PNCC adduced evidence that only planters’ trucks with "PSD" markings were allowed to
use the tollway; that all such trucks would surely enter the PASUDECO compound. Thus, the truck
23 

which spilled sugarcane in January 1993 in Km. 72 was on its way to the PASUDECO compound. 24

On November 11, 1994, the RTC rendered its decision in favor of Latagan, dismissing that of Arnaiz
25 

and Generalao for insufficiency of evidence. The case as against the PNCC was, likewise, dismissed.
The decretal portion of the decision reads:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:

I. ORDERING defendant PASUDECO:

1. To pay plaintiff Regina Latagan:

a. ₱25,000 = for actual damages

b. ₱15,000 = for moral damages

c. ₱10,000 = for attorney’s fees

₱50,000

2. To pay costs of suit.

II. The case is DISMISSED as to defendant PNCC. No pronouncement as to costs. Its counterclaim is,
likewise, DISMISSED.

III. The claims for damages of plaintiffs Rodrigo Arnaiz and Ricardo Generalao are hereby
DISMISSED for insufficiency of evidence.

SO ORDERED. 26

41
Both the plaintiffs Arnaiz, Latagan and Generalao and defendant PASUDECO appealed the decision
to the CA. Since the plaintiffs failed to file their brief, the CA dismissed their appeal.
27

Resolving PASUDECO’s appeal, the CA rendered judgment on April 29, 2003, affirming the RTC
decision with modification. The appellate court ruled that Arnaiz was negligent in driving his car, but
that such negligence was merely contributory to the cause of the mishap, i.e., PASUDECO’s failure to
properly supervise its men in clearing the affected area. Its supervisor, Mallari, admitted that he was at
his house while their men were clearing Km. 72. Thus, the appellate court held both PASUDECO and
PNCC, jointly and severally, liable to Latagan. The decretal portion of the decision reads:

WHEREFORE, premises considered, the assailed DECISION is hereby MODIFIED and judgment is
hereby rendered declaring PASUDECO and PNCC, jointly and solidarily, liable:

1. To pay plaintiff Regina Latagan:

a. ₱25,000 = for actual damages

b. ₱15,000 = for moral damages

c. ₱10,000 = for attorney’s fees

2. To pay costs of suit.

SO ORDERED.  28

The PNCC, now the petitioner, filed a petition for review on certiorari under Rule 45 of the Revised
Rules of Court, alleging that:

THE HONORABLE COURT OF APPEALS ERRED IN MODIFYING THE DECISION OF THE TRIAL
COURT AND MAKING PETITIONER PNCC, JOINTLY AND [SOLIDARILY], LIABLE WITH PRIVATE
RESPONDENT PASUDECO. 29

The petitioner asserts that the trial court was correct when it held that PASUDECO should be held
liable for the mishap, since it had assumed such responsibility based on the MOA between it and the
TRB. The petitioner relies on the trial court’s finding that only PASUDECO was given a permit to pass
through the route.

The petitioner insists that the respondents failed to prove that it was negligent in the operation and
maintenance of the NLEX. It maintains that it had done its part in clearing the expressway of
sugarcane piles, and that there were no more piles of sugarcane along the road when its men left Km.
72; only a few scattered sugarcanes flattened by the passing motorists were left. Any liability arising
from any mishap related to the spilled sugarcanes should be borne by PASUDECO, in accordance
with the MOA which provides that "accidents or damages to the toll facilities arising out of any activity
related to this approval shall be the responsibility of PASUDECO."

The petitioner also argues that the respondents should bear the consequences of their own fault or
negligence, and that the proximate and immediate cause of the mishap in question was respondent
Arnaiz’s reckless imprudence or gross negligence.

The Court notes that the issues raised in the petition are factual in nature. Under Rule 45 of the Rules
of Court, only questions of law may be raised in this Court, and while there are exceptions to the rule,

42
no such exception is present in this case. On this ground alone, the petition is destined to fail. The
Court, however, has reviewed the records of the case, and finds that the petition is bereft of merit.

The petitioner is the grantee of a franchise, giving it the right, privilege and authority to construct,
operate and maintain toll facilities covering the expressways, collectively known as the
NLEX. Concomitant thereto is its right to collect toll fees for the use of the said expressways and its
30 

obligation to keep it safe for motorists.

There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or negligence
of the defendant, or some other person for whose acts he must respond; and (c) the connection of
cause and effect between the fault or negligence of the defendant and the damages incurred by the
plaintiff. Article 2176 of the New Civil Code provides:
31 

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

Negligence is the omission to do something which a reasonable man, guided by those considerations
which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would do. It also refers to the conduct which creates undue risk of harm
32 

to another, the failure to observe that degree of care, precaution and vigilance that the circumstance
justly demand, whereby that other person suffers injury. The Court declared the test by which to
33 

determine the existence of negligence in Picart v. Smith, viz:

34 

The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution
which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case is
not determined by reference to the personal judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.

The test for determining whether a person is negligent in doing an act whereby injury or damage
results to the person or property of another is this: could a prudent man, in the position of the person to
whom negligence is attributed, foresee harm to the person injured as a reasonable consequence of
the course actually pursued? If so, the law imposes a duty on the actor to refrain from that course or to
take precautions to guard against its mischievous results, and the failure to do so constitutes
negligence. Reasonable foresight of harm, followed by the ignoring of the admonition born of this
provision, is always necessary before negligence can be held to exist. 35

In the case at bar, it is clear that the petitioner failed to exercise the requisite diligence in maintaining
the NLEX safe for motorists. The lighted cans and lane dividers on the highway were removed even as
flattened sugarcanes lay scattered on the ground. The highway was still wet from the juice and sap of
36 

the flattened sugarcanes. The petitioner should have foreseen that the wet condition of the highway
37 

would endanger motorists passing by at night or in the wee hours of the morning.

The petitioner cannot escape liability under the MOA between PASUDECO and TRB, since
respondent Latagan was not a party thereto. We agree with the following ruling of the CA:

43
Both defendants, appellant PASUDECO and appellee PNCC, should be held liable. PNCC, in charge
of the maintenance of the expressway, has been negligent in the performance of its duties. The
obligation of PNCC should not be relegated to, by virtue of a private agreement, to other parties.

PNCC declared the area free from obstruction since there were no piles of sugarcane, but evidence
shows there were still pieces of sugarcane stalks left flattened by motorists. There must be an
observance of that degree of care, precaution, and vigilance which the situation demands. There
should have been sufficient warning devices considering that there were scattered sugarcane stalks
still left along the tollway.

The records show, and as admitted by the parties, that Arnaiz’s car ran over scattered sugarcanes
spilled from a hauler truck.
38

Moreover, the MOA refers to accidents or damages to the toll facilities. It does not cover damages to
property or injuries caused to motorists on the NLEX who are not privies to the MOA.

PASUDECO’s negligence in transporting sugarcanes without proper harness/straps, and that of PNCC
in removing the emergency warning devices, were two successive negligent acts which were the direct
and proximate cause of Latagan’s injuries. As such, PASUDECO and PNCC are jointly and severally
liable. As the Court held in the vintage case of Sabido v. Custodio: 39

According to the great weight of authority, where the concurrent or successive negligent acts or
omission of two or more persons, although acting independently of each other, are, in combination, the
direct and proximate cause of a single injury to a third person and it is impossible to determine in what
proportion each contributed to the injury, either is responsible for the whole injury, even though his act
alone might not have caused the entire injury, or the same damage might have resulted from the acts
of the other tort-feasor. ...

In Far Eastern Shipping Company v. Court of Appeals, the Court declared that the liability of joint
40 

tortfeasors is joint and solidary, to wit:

It may be said, as a general rule, that negligence in order to render a person liable need not be the
sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient causes
other than plaintiff's, is the proximate cause of the injury. Accordingly, where several causes combine
to produce injuries, a person is not relieved from liability because he is responsible for only one of
them, it being sufficient that the negligence of the person charged with injury is an efficient cause
without which the injury would not have resulted to as great an extent, and that such cause is not
attributable to the person injured. It is no defense to one of the concurrent tortfeasors that the injury
would not have resulted from his negligence alone, without the negligence or wrongful acts of the other
concurrent tortfeasors. Where several causes producing an injury are concurrent and each is an
efficient cause without which the injury would not have happened, the injury may be attributed to all or
any of the causes and recovery may be had against any or all of the responsible persons although
under the circumstances of the case, it may appear that one of them was more culpable, and that the
duty owed by them to the injured person was not the same. No actor's negligence ceases to be a
proximate cause merely because it does not exceed the negligence of other actors. Each wrongdoer is
responsible for the entire result and is liable as though his acts were the sole cause of the injury.

There is no contribution between joint tortfeasors whose liability is solidary since both of them are
liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or
more persons, although acting independently, are in combination with the direct and proximate cause
of a single injury to a third person, it is impossible to determine in what proportion each contributed to
the injury and either of them is responsible for the whole injury. Where their concurring negligence

44
resulted in injury or damage to a third party, they become joint tortfeasors and are solidarily liable for
the resulting damage under Article 2194 of the Civil Code.

Thus, with PASUDECO’s and the petitioner’s successive negligent acts, they are joint tortfeasors who
are solidarily liable for the resulting damage under Article 2194 of the New Civil Code. 41

Anent respondent Arnaiz’s negligence in driving his car, both the trial court and the CA agreed that it
was only contributory, and considered the same in mitigating the award of damages in his favor as
provided under Article 2179 of the New Civil Code. Contributory negligence is conduct on the part of
42 

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. Even the petitioner itself described
43 

Arnaiz’s negligence as contributory. In its Answer to the complaint filed with the trial court, the
petitioner asserted that "the direct and proximate cause of the accident was the gross negligence of
PASUDECO personnel which resulted in the spillage of sugarcane and the apparent failure of the
PASUDECO workers to clear and mop up the area completely, coupled with the contributory
negligence of Arnaiz in driving his car at an unreasonable speed." However, the petitioner changed its
44 

theory in the present recourse, and now claims that the proximate and immediate cause of the mishap
in question was the reckless imprudence or gross negligence of respondent Arnaiz. Such a change of
45 

theory cannot be allowed. When a party adopts a certain theory in the trial court, he will not be
permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the
other party but it would also be offensive to the basic rules of fair play, justice and due process.46

IN LIGHT OF ALL THE FOREGOING, the present petition is hereby DENIED for lack of merit. The
Decision of the Court of Appeals in CA-G.R. CV No. 47699, dated April 29, 2003, is AFFIRMED. Costs
against the petitioner.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

45