G.R. No.

76093 March 21, 1989

AIR FRANCE, petitioner,
vs.
THE COURT OF APPEALS AND NARCISO O. MORALES, respondents.

Siguion Reyna, Montecillo & Ongsiako for petitioner.

Morales & Joyas Law Office for private respondent.



PADILLA, J.:

This is a petition for review on certiorari of the decision ** of the Court of Appeals, dated 1986, in CA-
G.R. CV No. 69875, entitled "Narciso Morales vs. Air France," dismissing herein petitioner's appeal from
the adverse ruling of the trial court (Branch 33, CFI of Rizal, Kalookan City) *** and the latter's denial of
its motion for reconsideration. The respondent Court of Appeals likewise denied petitioner's motion for
reconsideration of its decision in a resolution dated 25 September 1986.

In reviewing the records, we find:

Sometime in October 1977, private respondent Narciso Morales thru his representative, Ms. Janet
Tolentino, purchased an airline ticket from Aspac Management Corporation, petitioner's General Sales
Agent in Makati, for P 9,426.00 plus P 1,413.90 travel tax, of which P 413.90 were later refunded to Ms.
Tolentino.

The itinerary covered by the ticket included several cities, with certain segments thereof restricted by
markings of "non endorsable' and 'valid on AF (meaning Air France) only', as herein specified:

CARRIER EXPRESS

ITINERARY SPECIFIED RESTRICTIONS

New York/Paris Air France NONENDORSABLE VALID ON AF ONLY

Paris/Stockholm Air France NONENDORSABLE VALID ON AF ONLY

Stockholm/Copenhagen None

Copenhagen/London None

London/Amsterdam None

Amsterdam/Hamburg None

Humburg/Frankfurt None

Frankfurt/Paris Air France NONENDORSABLE VALID ON AF ONLY

Paris/Geneva Air France NONENDORSABLE VALID ON AF ONLY

Geneva/Madrid None

Madrid/Nice Air France NONENDORSABLE VALID ON AF ONLY

Nice/Rome Air France NONENDORSABLE VALID ON AF ONLY

Rome/Athens None

Athens/Tel Aviv None

Tel Avive/Bangkok Air France NONENDORSABLE VALID ON AF ONLY

Bangkok/Manila Air France NONENDORSABLE VALID ON AF ONLY 1

While in New York, U.S.A. on 3 November 1977, private respondent Morales obtained three (3) medical
certificates (Exhibits G, G-1, G-2) attesting to ear an infection which necessitated medical treatment.
From New York, he flew to Paris, Stockholm and then Copenhagen where he made representations with
petitioner's office to shorten his trip by deleting some of the cities in the itinerary. Respondent Morales
was informed that, as a matter of procedure, confirmation of petitioner's office in Manila (as ticketing
office) must be secured before shortening of the route (already paid for). Air France in Amsterdam
telexed AF Manila requesting for rerouting of the passenger to Amsterdam, Hamburg, Geneva, Rome,
Hongkong, Manila. 2

As there was no immediate response to the telex, respondent proceeded to Hamburg where he was
informed of AF Manila's negative reply. After reiterating his need to flying home on a shorter route due
to his ear infection, and presentation of supporting medical certificates, again, the airline office made
the necessary request to Manila on 23 November 1977 for a Hamburg, Paris, Geneva, Rome, Paris,
Hongkong and Manila route. Still, the request was denied. Despite respondent as protest and offer to
pay any fare difference, petitioner did not relent in its position. Respondent, therefore, had to buy an
entirely new set of tickets, paying 1,914 German marks for the homeward route, namely:

Itinerary Carrier Date Reservation

Hamburg/Frankfurt LH 26 Nov. OK (Lufthansa)

Frankfurt/Geneva SR 26 Nov. OK (Swissair)

Geneva/Rome AZ 29 Nov. OK (Alitalia)

Rome/Hongkong BA 02 Dec. OK (British Airways)

Hongkong/Manila PR Open Open (Philippine Airlines) 3

Upon arrival in Manila, respondent sent a letter-complaint to Air France dated 20 December 1977 thru
Aspac Management Corporation. Respondent Morales was advised to surrender the unused flight
coupons for a refund of its value, but he kept the same and, instead, filed a complaint for breach of
contract of carriage and damages.

CFI Judge Marcelino Sayo found Air France in evident bad faith for violation of the contract of carriage,
aggravated by the threatening attitude of its employees in Hamburg. Considering the social and
economic standing of respondent, who is chairman of the board of directors of a multi-million
corporation and a member of several civic and business organizations, an award of moral and exemplary
damages, in addition to the actual damages incurred, was deemed proper under the circumstances. The
dispositive part of the CFI decision states:

WHEREFORE, this Court hereby renders judgment for the plaintiff and orders the defendant to pay to
the plaintiff the sum of 1,914 German Marks, in its equivalent in Philippine Peso, as actual damages, the
sum of P 1,000,000.00 as moral damages, and the further sum of P 800,000.00 as exemplary damages,
with legal interest thereon from date of the filing of the complaint until fully paid, plus the sum equal to
20% thereof as attorney's fees, with costs against the plaintiff. 4

On appeal to the Court of Appeals, the award of damages was modified as follows:

ACCORDINGLY, the judgment appealed from is hereby modified so that it will read as follows: Judgment
is hereby rendered in favor of the plaintiff against the defendant ordering ther defendant to pay to said
plaintiff the following.

(1) 1,914 German Marks in its equivalent in Philippine peso at prevailing rate of exchange as actual
damages, with legal interest thereon from the date of the filing of the complaint until fully paid;

(2) P 500,000.00, as moral damages;

(3) P 150,000.00, as exemplary damages; and

(4) 5% of the amount of actual, moral and exemplary damages which are recoverable, as attorney's fees.
5

Questioning the factual findings of the respondent court, petitioner comes to this court for review citing
three (3) errors:

1. The conclusion that there is a breach of contract is premised on a misapprehension of facts.

2. Failure to apply the doctrine of avoidable consequence in the present case.

3. Award of exorbitant damages and attorney's fees.

After considering respondent's comment, the Court resolved to give due courses to the petition, and
required the parties to file their respective memoranda. Complying with the resolution of 26 October
1987, private respondent filed his reply memorandum on 17 December 1987. This is the last pleading on
record.

While this Court is not a trier of facts, yet, when the findings of respondent court are without citation of
specific evidence on which they are based, there is sufficient reason for the Court to review the
appellate court's decision. 6

The respondent court's ruling that there was breach of contract of carriage is premised on petitioner's
refusal to re-route respondent and, in effect, requiring him to purchase a new set of tickets. Petitioner
refutes this conclusion, claiming that the original ticket was discounted and non-endorsable on certain
segments. Eventually respondent flew on his chosen route with different airlines.

Under the factual milieu, was there really a breach of contract of carriage on the part of the petitioner,
as to justify the award to private respondent of actual, moral and exemplary damages? We find none.

International Air Transportation Association (IATA) Resolution No. 275 e, 2., special note reads: "Where
a fare is restricted and such restrictions are not clearly evident from the required entries on the ticket,
such restrictions may be written, stamped or reprinted in plain language in the
Endorsement/Restrictions" box of the applicable flight coupon(s); or attached thereto by use of an
appropriate notice." 7 Voluntary changes to tickets, 8 while allowable, are also covered by (IATA)
Resolution No. 1013, Art. II, which provides: "1. changes to the ticket requested by the passenger will be
subject to carriers regulations.

Private respondent wanted a rerouting to Hamburg, Geneva, Rome, Hongkong and Manilas 9 which
shortened the original itinerary on the ticket issued by AF Manila through ASPAC, its general sales agent.
Considering the original restrictions on the ticket, it was not unreasonable for Air France to deny the
request.

Besides, a recurring ear infection was pleaded as reason necessitating urgent return to Manila.
Assuming arguendo a worsening pain or discomfort, private respondent appears to have still proceeded
to four (4) other cities covering a period of at least six (6) days and leaving open his date of departure
from Hongkong to Manila.10 And, even if he claimed to have undergone medical examination upon
arrival in Manila, no medical certificate was presented. He failed to even remember his date of arrival in
Manila.

With a claim for a large amount of damages, the Court finds it unsual for respondent, a lawyer, to easily
forget vital information to substantiate his plea. It is also essential before an award of damages that the
claimant must satisfactorily prove during the trial the existence of the factual basis of the damages and
its causal connection to defendant's acts.11

In KLM Royal Dutch Airlines v. CA, 12 the Court observed-

.... As noted by the Court of Appeals that condition was printed in letters so small that one would have
to use a magnifying glass to read the words. Under the circumstances, it would be unfair and inequitable
to charge the respondents with automatic knowledge or notice of the said condition so as to preclude
any doubt that it was fairly and freely agreed upon by the respondents when they accepted the passage
tickets issued to them by the KLM. As the airline which issued those tickets with the knowledge that the
respondents would be flown on the various legs of their journey by different air carriers, the KLM was
chargeable with the duty and responsibility of specifically informing the respondents of conditions
prescribed in their tickets or in the very least, to ascertain that the respondent read them before they
accepted their passage tickets. A thorough search of the records, however, inexplicably fails to show
that any effort was exerted by the KLM officials or employees to discharge in a proper manner this
responsibility to the respondents. Consequently, We hold that the respondents cannot be bound by the
provision in question by which KLM unilaterally assumed the role of a mere ticket-issuing agent for other
airlines and limited its liability only to untoward occurrences on its own lines. (Emphasis supplied)

Unlike in the KLM case where the breach of contract was aggravated by the discourteous and arbitrary
conduct of an official of the Aer Lingus which the KLM had engaged to transport the respondents, here.
Air France employees in Hamburg informed private respondent that his tickets were partly stamped
"non-endorsable" and "valid on Air France only."13 Mere refusal to accede to the passenger's wishes
does not necessarily translate into damages in the absence of bad faith.14 To our mind, respondent has
failed to show wanton, malevolent or reckless misconduct imputable to petitioner in its refusal to re-
route.

Air France Manila acted upon the advise of ASPAC in denying private respondent's request. There was
no evident bad faith when it followed the advise not to authorize rerouting.15 At worst, the situation
can be considered a case of inadvertence on the part of ASPAC in not explaining the non-endorsable
character of the ticket. Of importance, however, is the fact that private respondent is a lawyer, and the
restriction box 16 clearly indicated the non-endorsable character of the ticket.

Omissions by ordinary passengers may be condoned but more is expected of members of the bar who
cannot feign ignorance of such limitations and restrictions. An award of moral and exemplary damages
cannot be sustained under the circumstances, but petitioner has to refund the unused coupons in the
Air France ticket to the private respondent.

WHEREFORE, the judgement appealed from is REVERSED and SET ASIDE. Petitioner is ordered, however,
to refund to private respondent the value of the unused coupons in the passenger's ticket issued to him
by the petitioner. No costs.

SO ORDERED.

Melencio-Herrera, (Chairperson), Paras, Sarmiento and Regalado JJ., concur:



Footnotes

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

AIR FRANCE, petitioner,
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.

Lichauco, Picazo and Agcaoili for petitioner.
Bengzon Villegas and Zarraga for respondent R. Carrascoso.



SANCHEZ, J.:

The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael Carrascoso
P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20 representing the
difference in fare between first class and tourist class for the portion of the trip Bangkok-Rome, these
various amounts with interest at the legal rate, from the date of the filing of the complaint until paid;
plus P3,000.00 for attorneys' fees; and the costs of suit.

On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket
from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects", with costs
against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on
March 30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc.,
issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok,
plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to
vacate the "first class" seat that he was occupying because, in the words of the witness Ernesto G.
Cuento, there was a "white man", who, the Manager alleged, had a "better right" to the seat. When
asked to vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's
Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said
Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class; when they found
out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all across
to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12,
Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane.3

1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent Court
of Appeals. Petitioner charges that respondent court failed to make complete findings of fact on all the
issues properly laid before it. We are asked to consider facts favorable to petitioner, and then, to
overturn the appellate court's decision.

Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of
record without expressing therein clearly and distinctly the facts and the law on which it is based". 5 This
is echoed in the statutory demand that a judgment determining the merits of the case shall state
"clearly and distinctly the facts and the law on which it is based"; 6 and that "Every decision of the Court
of Appeals shall contain complete findings of fact on all issues properly raised before it". 7

A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 The law,
however, solely insists that a decision state the "essential ultimate facts" upon which the court's
conclusion is drawn. 9 A court of justice is not hidebound to write in its decision every bit and piece of
evidence 10 presented by one party and the other upon the issues raised. Neither is it to be burdened
with the obligation "to specify in the sentence the facts" which a party "considered as proved". 11 This is
but a part of the mental process from which the Court draws the essential ultimate facts. A decision is
not to be so clogged with details such that prolixity, if not confusion, may result. So long as the decision
of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said
court to withhold therefrom "any specific finding of facts with respect to the evidence for the defense".
Because as this Court well observed, "There is no law that so requires". 12 Indeed, "the mere failure to
specify (in the decision) the contentions of the appellant and the reasons for refusing to believe them is
not sufficient to hold the same contrary to the requirements of the provisions of law and the
Constitution". It is in this setting that in Manigque, it was held that the mere fact that the findings "were
based entirely on the evidence for the prosecution without taking into consideration or even mentioning
the appellant's side in the controversy as shown by his own testimony", would not vitiate the judgment.
13 If the court did not recite in the decision the testimony of each witness for, or each item of evidence
presented by, the defeated party, it does not mean that the court has overlooked such testimony or
such item of evidence. 14 At any rate, the legal presumptions are that official duty has been regularly
performed, and that all the matters within an issue in a case were laid before the court and passed upon
by it. 15

Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written
statement of the ultimate facts as found by the court ... and essential to support the decision and
judgment rendered thereon". 16 They consist of the court's "conclusions" with respect to the
determinative facts in issue". 17 A question of law, upon the other hand, has been declared as "one
which does not call for an examination of the probative value of the evidence presented by the parties."
18

2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the
Court of Appeals. 19 That judgment is conclusive as to the facts. It is not appropriately the business of
this Court to alter the facts or to review the questions of fact. 20

With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals
support its judgment.

3. Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class
ticket. But petitioner asserts that said ticket did not represent the true and complete intent and
agreement of the parties; that said respondent knew that he did not have confirmed reservations for
first class on any specific flight, although he had tourist class protection; that, accordingly, the issuance
of a first class ticket was no guarantee that he would have a first class ride, but that such would depend
upon the availability of first class seats.

These are matters which petitioner has thoroughly presented and discussed in its brief before the Court
of Appeals under its third assignment of error, which reads: "The trial court erred in finding that plaintiff
had confirmed reservations for, and a right to, first class seats on the "definite" segments of his journey,
particularly that from Saigon to Beirut". 21

And, the Court of Appeals disposed of this contention thus:

Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no guarantee
that the passenger to whom the same had been issued, would be accommodated in the first-class
compartment, for as in the case of plaintiff he had yet to make arrangements upon arrival at every
station for the necessary first-class reservation. We are not impressed by such a reasoning. We cannot
understand how a reputable firm like defendant airplane company could have the indiscretion to give
out tickets it never meant to honor at all. It received the corresponding amount in payment of first-class
tickets and yet it allowed the passenger to be at the mercy of its employees. It is more in keeping with
the ordinary course of business that the company should know whether or riot the tickets it issues are
to be honored or not.22

Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus:

On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart
from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and defendant's
own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as follows:

Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?

A. That the space is confirmed.

Q. Confirmed for first class?

A. Yes, "first class". (Transcript, p. 169)

x x x x x x x x x

Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that
although plaintiff paid for, and was issued a "first class" airplane ticket, the ticket was subject to
confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses. Oral
evidence cannot prevail over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1"
belie the testimony of said witnesses, and clearly show that the plaintiff was issued, and paid for, a first
class ticket without any reservation whatever.

Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the
reservation for a "first class" accommodation for the plaintiff was confirmed. The court cannot believe
that after such confirmation defendant had a verbal understanding with plaintiff that the "first class"
ticket issued to him by defendant would be subject to confirmation in Hongkong. 23

We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount
refunded on Carrascoso's ticket, the decision of the Court of First Instance was affirmed by the Court of
Appeals in all other respects. We hold the view that such a judgment of affirmance has merged the
judgment of the lower court. 24 Implicit in that affirmance is a determination by the Court of Appeals
that the proceeding in the Court of First Instance was free from prejudicial error and "all questions
raised by the assignments of error and all questions that might have been raised are to be regarded as
finally adjudicated against the appellant". So also, the judgment affirmed "must be regarded as free
from all error". 25 We reached this policy construction because nothing in the decision of the Court of
Appeals on this point would suggest that its findings of fact are in any way at war with those of the trial
court. Nor was said affirmance by the Court of Appeals upon a ground or grounds different from those
which were made the basis of the conclusions of the trial court. 26

If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat,
notwithstanding the fact that seat availability in specific flights is therein confirmed, then an air
passenger is placed in the hollow of the hands of an airline. What security then can a passenger have? It
will always be an easy matter for an airline aided by its employees, to strike out the very stipulations in
the ticket, and say that there was a verbal agreement to the contrary. What if the passenger had a
schedule to fulfill? We have long learned that, as a rule, a written document speaks a uniform language;
that spoken word could be notoriously unreliable. If only to achieve stability in the relations between
passenger and air carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower
courts refused to believe the oral evidence intended to defeat the covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are facts upon which the
Court of Appeals predicated the finding that respondent Carrascoso had a first class ticket and was
entitled to a first class seat at Bangkok, which is a stopover in the Saigon to Beirut leg of the flight. 27
We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its position",
as charged by petitioner. 28 Nor do we subscribe to petitioner's accusation that respondent Carrascoso
"surreptitiously took a first class seat to provoke an issue". 29 And this because, as petitioner states,
Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat and because from
Saigon I was told again to see the Manager". 30 Why, then, was he allowed to take a first class seat in
the plane at Bangkok, if he had no seat? Or, if another had a better right to the seat?

4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that
Carrascoso's action is planted upon breach of contract; that to authorize an award for moral damages
there must be an averment of fraud or bad faith;31 and that the decision of the Court of Appeals fails to
make a finding of bad faith. The pivotal allegations in the complaint bearing on this issue are:

3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a valuable
consideration, the latter acting as general agents for and in behalf of the defendant, under which said
contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff, First Class passage on
defendant's plane during the entire duration of plaintiff's tour of Europe with Hongkong as starting point
up to and until plaintiff's return trip to Manila, ... .

4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok,
defendant furnished to the plaintiff First Class accommodation but only after protestations, arguments
and/or insistence were made by the plaintiff with defendant's employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff only Tourist
Class accommodations from Bangkok to Teheran and/or Casablanca, ... the plaintiff has been compelled
by defendant's employees to leave the First Class accommodation berths at Bangkok after he was
already seated.

6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments
brought by defendant's breach of contract was forced to take a Pan American World Airways plane on
his return trip from Madrid to Manila.32

x x x x x x x x x

2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid,
plaintiff suffered inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental
anguish, serious anxiety, wounded feelings, social humiliation, and the like injury, resulting in moral
damages in the amount of P30,000.00. 33

x x x x x x x x x

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a
first class passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was
breached when petitioner failed to furnish first class transportation at Bangkok; and Third, that there
was bad faith when petitioner's employee compelled Carrascoso to leave his first class accommodation
berth "after he was already, seated" and to take a seat in the tourist class, by reason of which he
suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish, serious
anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true that there is no
specific mention of the term bad faith in the complaint. But, the inference of bad faith is there, it may be
drawn from the facts and circumstances set forth therein. 34 The contract was averred to establish the
relation between the parties. But the stress of the action is put on wrongful expulsion.

Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed
petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in Bangkok,
Carrascoso was ousted by petitioner's manager who gave his seat to a white man; 35 and (b) evidence of
bad faith in the fulfillment of the contract was presented without objection on the part of the petitioner.
It is, therefore, unnecessary to inquire as to whether or not there is sufficient averment in the complaint
to justify an award for moral damages. Deficiency in the complaint, if any, was cured by the evidence. An
amendment thereof to conform to the evidence is not even required. 36 On the question of bad faith,
the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the
defendant Air France while at Bangkok, and was transferred to the tourist class not only without his
consent but against his will, has been sufficiently established by plaintiff in his testimony before the
court, corroborated by the corresponding entry made by the purser of the plane in his notebook which
notation reads as follows:

"First-class passenger was forced to go to the tourist class against his will, and that the captain refused
to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of the
plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do
so. It is noteworthy that no one on behalf of defendant ever contradicted or denied this evidence for the
plaintiff. It could have been easy for defendant to present its manager at Bangkok to testify at the trial
of the case, or yet to secure his disposition; but defendant did neither. 37

The Court of appeals further stated

Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if
the employees of the defendant at Bangkok sold a first-class ticket to him when all the seats had already
been taken, surely the plaintiff should not have been picked out as the one to suffer the consequences
and to be subjected to the humiliation and indignity of being ejected from his seat in the presence of
others. Instead of explaining to the white man the improvidence committed by defendant's employees,
the manager adopted the more drastic step of ousting the plaintiff who was then safely ensconsced in
his rightful seat. We are strengthened in our belief that this probably was what happened there, by the
testimony of defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters
"O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for first class. Likewise,
Zenaida Faustino, another witness for defendant, who was the chief of the Reservation Office of
defendant, testified as follows:

"Q How does the person in the ticket-issuing office know what reservation the passenger has arranged
with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)

In this connection, we quote with approval what the trial Judge has said on this point:

Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to the
seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not prove "any better",
nay, any right on the part of the "white man" to the "First class" seat that the plaintiff was occupying
and for which he paid and was issued a corresponding "first class" ticket.

If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant
could have easily proven it by having taken the testimony of the said Manager by deposition, but
defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if
produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is constrained to
find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat because
the said Manager wanted to accommodate, using the words of the witness Ernesto G. Cuento, the
"white man".38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the
term "bad faith". But can it be doubted that the recital of facts therein points to bad faith? The manager
not only prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his
arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of having to go to
the tourist class compartment - just to give way to another passenger whose right thereto has not been
established. Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different
from what is understood in law. For, "bad faith" contemplates a "state of mind affirmatively operating
with furtive design or with some motive of self-interest or will or for ulterior purpose." 39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment of
the Court of First Instance, thus:

The evidence shows that the defendant violated its contract of transportation with plaintiff in bad faith,
with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of
threatening the plaintiff in the presence of many passengers to have him thrown out of the airplane to
give the "first class" seat that he was occupying to, again using the words of the witness Ernesto G.
Cuento, a "white man" whom he (defendant's Manager) wished to accommodate, and the defendant
has not proven that this "white man" had any "better right" to occupy the "first class" seat that the
plaintiff was occupying, duly paid for, and for which the corresponding "first class" ticket was issued by
the defendant to him.40

5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well
settled in law. 41 For the willful malevolent act of petitioner's manager, petitioner, his employer, must
answer. Article 21 of the Civil Code says:

ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damage.

In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions
of Article 2219 (10), Civil Code, moral damages are recoverable. 42

6. A contract to transport passengers is quite different in kind and degree from any other contractual
relation. 43 And this, because of the relation which an air-carrier sustains with the public. Its business is
mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The
contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees, naturally, could give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected
against personal misconduct, injurious language, indignities and abuses from such employees. So it is,
that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an
action for damages against the carrier. 44

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract
and a tort, giving a right of action for its agent in the presence of third persons to falsely notify her that
the check was worthless and demand payment under threat of ejection, though the language used was
not insulting and she was not ejected." 46 And this, because, although the relation of passenger and
carrier is "contractual both in origin and nature" nevertheless "the act that breaks the contract may be
also a tort". 47 And in another case, "Where a passenger on a railroad train, when the conductor came
to collect his fare tendered him the cash fare to a point where the train was scheduled not to stop, and
told him that as soon as the train reached such point he would pay the cash fare from that point to
destination, there was nothing in the conduct of the passenger which justified the conductor in using
insulting language to him, as by calling him a lunatic," 48 and the Supreme Court of South Carolina there
held the carrier liable for the mental suffering of said passenger.1awphl.nt

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

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus

Q You mentioned about an attendant. Who is that attendant and purser?

A When we left already that was already in the trip I could not help it. So one of the flight
attendants approached me and requested from me my ticket and I said, What for? and she said, "We
will note that you transferred to the tourist class". I said, "Nothing of that kind. That is tantamount to
accepting my transfer." And I also said, "You are not going to note anything there because I am
protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I
stood up and I went to the pantry that was next to me and the purser was there. He told me, "I have
recorded the incident in my notebook." He read it and translated it to me because it was recorded in
French "First class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene."

Mr. VALTE

I move to strike out the last part of the testimony of the witness because the best evidence would be
the notes. Your Honor.

COURT

I will allow that as part of his testimony. 49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his
notebook reading "First class passenger was forced to go to the tourist class against his will, and that the
captain refused to intervene" is predicated upon evidence [Carrascoso's testimony above] which is
incompetent. We do not think so. The subject of inquiry is not the entry, but the ouster incident.
Testimony on the entry does not come within the proscription of the best evidence rule. Such testimony
is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the
startling occurrence was still fresh and continued to be felt. The excitement had not as yet died down.
Statements then, in this environment, are admissible as part of the res gestae. 50 For, they grow "out of
the nervous excitement and mental and physical condition of the declarant". 51 The utterance of the
purser regarding his entry in the notebook was spontaneous, and related to the circumstances of the
ouster incident. Its trustworthiness has been guaranteed. 52 It thus escapes the operation of the
hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would
have been an easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really
true that no such entry was made, the deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary
damages in contracts and quasi- contracts. The only condition is that defendant should have "acted in
a wanton, fraudulent, reckless, oppressive, or malevolent manner." 53 The manner of ejectment of
respondent Carrascoso from his first class seat fits into this legal precept. And this, in addition to moral
damages.54

9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar
judgment for attorneys' fees. The least that can be said is that the courts below felt that it is but just and
equitable that attorneys' fees be given. 55 We do not intend to break faith with the tradition that
discretion well exercised as it was here should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals,
thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as
attorneys' fees. The task of fixing these amounts is primarily with the trial court. 56 The Court of Appeals
did not interfere with the same. The dictates of good sense suggest that we give our imprimatur
thereto. Because, the facts and circumstances point to the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We
accordingly vote to affirm the same. Costs against petitioner. So ordered.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro, JJ., concur.
Bengzon, J.P., J., took no part.

G.R. No. L-51806 November 8, 1988

CIVIL AERONAUTICS ADMINISTRATION, petitioner,
vs.
COURT OF APPEALS and ERNEST E. SIMKE, respondents.

The Solicitor General for petitioner.

Ledesma, Guytingco, Veleasco & Associates for respondent Ernest E. Simke.



CORTES, J.:

Assailed in this petition for review on certiorari is the decision of the Court of Appeals affirming the trial
court decision which reads as follows:

WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff the amount of
P15,589.55 as full reimbursement of his actual medical and hospital expenses, with interest at the legal
rate from the commencement of the suit; the amount of P20,200.00 as consequential damages; the
amount of P30,000.00 as moral damages; the amount of P40,000.00 as exemplary damages; the further
amount of P20,000.00 as attorney's fees and the costs [Rollo, p. 24].

The facts of the case are as follows:

Private respondent is a naturalized Filipino citizen and at the time of the incident was the Honorary
Consul Geileral of Israel in the Philippines.

In the afternoon of December 13, 1968, private respondent with several other persons went to the
Manila International Airport to meet his future son-in-law. In order to get a better view of the incoming
passengers, he and his group proceeded to the viewing deck or terrace of the airport.

While walking on the terrace, then filled with other people, private respondent slipped over an elevation
about four (4) inches high at the far end of the terrace. As a result, private respondent fell on his back
and broke his thigh bone.

The next day, December 14, 1968, private respondent was operated on for about three hours.

Private respondent then filed an action for damages based on quasi-delict with the Court of First
Instance of Rizal, Branch VII against petitioner Civil Aeronautics Administration or CAA as the entity
empowered "to administer, operate, manage, control, maintain and develop the Manila International
Airport ... ." [Sec. 32 (24), R.A. 776].

Said claim for damages included, aside from the medical and hospital bills, consequential damages for
the expenses of two lawyers who had to go abroad in private respondent's stead to finalize certain
business transactions and for the publication of notices announcing the postponement of private
respondent's daughter's wedding which had to be cancelled because of his accident [Record on Appeal,
p. 5].

Judgment was rendered in private respondent's favor prompting petitioner to appeal to the Court of
Appeals. The latter affirmed the trial court's decision. Petitioner then filed with the same court a Motion
for, Reconsideration but this was denied.

Petitioner now comes before this Court raising the following assignment of errors:

1. The Court of Appeals gravely erred in not holding that the present the CAA is really a suit against
the Republic of the Philippines which cannot be sued without its consent, which was not given in this
case.

2. The Court of Appeals gravely erred in finding that the injuries of respondent Ernest E. Simke
were due to petitioner's negligence although there was no substantial evidence to support such
finding; and that the inference that the hump or elevation the surface of the floor area of the terrace of
the fold) MIA building is dangerous just because said respondent tripped over it is manifestly mistaken
circumstances that justify a review by this Honorable Court of the said finding of fact of respondent
appellate court (Garcia v. Court of Appeals, 33 SCRA 622; Ramos v. CA, 63 SCRA 331.)

3. The Court of Appeals gravely erred in ordering petitioner to pay actual, consequential, moral
and exemplary damages, as well as attorney's fees to respondent Simke although there was no
substantial and competent proof to support said awards I Rollo, pp. 93-94 1.

I

Invoking the rule that the State cannot be sued without its consent, petitioner contends that being an
agency of the government, it cannot be made a party-defendant in this case.

This Court has already held otherwise in the case of National Airports Corporation v. Teodoro, Sr. [91
Phil. 203 (1952)]. Petitioner contends that the said ruling does not apply in this case because: First, in
the Teodoro case, the CAA was sued only in a substituted capacity, the National Airports Corporation
being the original party. Second, in the Teodoro case, the cause of action was contractual in nature
while here, the cause of action is based on a quasi-delict. Third, there is no specific provision in Republic
Act No. 776, the law governing the CAA, which would justify the conclusion that petitioner was
organized for business and not for governmental purposes. [Rollo, pp. 94-97].

Such arguments are untenable.

First, the Teodoro case, far from stressing the point that the CAA was only substituted for the National
Airports Corporation, in fact treated the CAA as the real party in interest when it stated that:

xxx xxx xxx

... To all legal intents and practical purposes, the National Airports Corporation is dead and the Civil
Aeronautics Administration is its heir or legal representative, acting by the law of its creation upon its
own rights and in its own name. The better practice there should have been to make the Civil
Aeronautics Administration the third party defendant instead of the National Airports Corporation.
[National Airports Corp. v. Teodoro, supra, p. 208.]

xxx xxx xxx

Second, the Teodoro case did not make any qualification or limitation as to whether or not the CAA's
power to sue and be sued applies only to contractual obligations. The Court in the Teodoro case ruled
that Sections 3 and 4 of Executive Order 365 confer upon the CAA, without any qualification, the power
to sue and be sued, albeit only by implication. Accordingly, this Court's pronouncement that where such
power to sue and be sued has been granted without any qualification, it can include a claim based on
tort or quasi-delict [Rayo v. Court of First Instance of Bulacan, G.R. Nos. 55273-83, December 19,1981, 1
1 0 SCRA 4561 finds relevance and applicability to the present case.

Third, it has already been settled in the Teodoro case that the CAA as an agency is not immune from
suit, it being engaged in functions pertaining to a private entity.

xxx xxx xxx

The Civil Aeronautics Administration comes under the category of a private entity. Although not a body
corporate it was created, like the National Airports Corporation, not to maintain a necessary function of
government, but to run what is essentially a business, even if revenues be not its prime objective but
rather the promotion of travel and the convenience of the travelling public. It is engaged in an
enterprise which, far from being the exclusive prerogative of state, may, more than the construction of
public roads, be undertaken by private concerns. [National Airports Corp. v. Teodoro, supra, p. 207.]

xxx xxx xxx

True, the law prevailing in 1952 when the Teodoro case was promulgated was Exec. Order 365
(Reorganizing the Civil Aeronautics Administration and Abolishing the National Airports Corporation).
Republic Act No. 776 (Civil Aeronautics Act of the Philippines), subsequently enacted on June 20, 1952,
did not alter the character of the CAA's objectives under Exec, Order 365. The pertinent provisions cited
in the Teodoro case, particularly Secs. 3 and 4 of Exec. Order 365, which led the Court to consider the
CAA in the category of a private entity were retained substantially in Republic Act 776, Sec. 32 (24) and
(25).<re||an1w> Said Act provides:

Sec. 32. Powers and Duties of the Administrator. Subject to the general control and supervision of the
Department Head, the Administrator shall have among others, the following powers and duties:

xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila International Airport
and all government-owned aerodromes except those controlled or operated by the Armed Forces of the
Philippines including such powers and duties as: (a) to plan, design, construct, equip, expand, improve,
repair or alter aerodromes or such structures, improvement or air navigation facilities; (b) to enter into,
make and execute contracts of any kind with any person, firm, or public or private corporation or entity;
... .

(25) To determine, fix, impose, collect and receive landing fees, parking space fees, royalties on sales
or deliveries, direct or indirect, to any aircraft for its use of aviation gasoline, oil and lubricants, spare
parts, accessories and supplies, tools, other royalties, fees or rentals for the use of any of the property
under its management and control.

xxx xxx xxx

From the foregoing, it can be seen that the CAA is tasked with private or non-governmental functions
which operate to remove it from the purview of the rule on State immunity from suit. For the correct
rule as set forth in the Tedoro case states:

xxx xxx xxx

Not all government entities, whether corporate or non-corporate, are immune from suits. Immunity
functions suits is determined by the character of the objects for which the entity was organized. The rule
is thus stated in Corpus Juris:

Suits against State agencies with relation to matters in which they have assumed to act in private or
non-governmental capacity, and various suits against certain corporations created by the state for public
purposes, but to engage in matters partaking more of the nature of ordinary business rather than
functions of a governmental or political character, are not regarded as suits against the state. The latter
is true, although the state may own stock or property of such a corporation for by engaging in business
operations through a corporation, the state divests itself so far of its sovereign character, and by
implication consents to suits against the corporation. (59 C.J., 313) [National Airport Corporation v.
Teodoro, supra, pp. 206-207; Emphasis supplied.]

This doctrine has been reaffirmed in the recent case of Malong v. Philippine National Railways [G.R. No.
L-49930, August 7, 1985, 138 SCRA 631, where it was held that the Philippine National Railways,
although owned and operated by the government, was not immune from suit as it does not exercise
sovereign but purely proprietary and business functions. Accordingly, as the CAA was created to
undertake the management of airport operations which primarily involve proprietary functions, it
cannot avail of the immunity from suit accorded to government agencies performing strictly
governmental functions.

II

Petitioner tries to escape liability on the ground that there was no basis for a finding of negligence.
There can be no negligence on its part, it alleged, because the elevation in question "had a legitimate
purpose for being on the terrace and was never intended to trip down people and injure them. It was
there for no other purpose but to drain water on the floor area of the terrace" [Rollo, P. 99].

To determine whether or not the construction of the elevation was done in a negligent manner, the trial
court conducted an ocular inspection of the premises.

xxx xxx xxx

... This Court after its ocular inspection found the elevation shown in Exhs. A or 6-A where plaintiff
slipped to be a step, a dangerous sliding step, and the proximate cause of plaintiffs injury...

xxx xxx xxx

This Court during its ocular inspection also observed the dangerous and defective condition of the open
terrace which has remained unrepaired through the years. It has observed the lack of maintenance and
upkeep of the MIA terrace, typical of many government buildings and offices. Aside from the litter
allowed to accumulate in the terrace, pot holes cause by missing tiles remained unrepaired and
unattented. The several elevations shown in the exhibits presented were verified by this Court during
the ocular inspection it undertook. Among these elevations is the one (Exh. A) where plaintiff slipped.
This Court also observed the other hazard, the slanting or sliding step (Exh. B) as one passes the
entrance door leading to the terrace [Record on Appeal, U.S., pp. 56 and 59; Emphasis supplied.]

The Court of Appeals further noted that:

The inclination itself is an architectural anomaly for as stated by the said witness, it is neither a ramp
because a ramp is an inclined surface in such a way that it will prevent people or pedestrians from
sliding. But if, it is a step then it will not serve its purpose, for pedestrian purposes. (tsn, p. 35, Id.) [rollo,
p. 29.]

These factual findings are binding and conclusive upon this Court. Hence, the CAA cannot disclaim its
liability for the negligent construction of the elevation since under Republic Act No. 776, it was charged
with the duty of planning, designing, constructing, equipping, expanding, improving, repairing or altering
aerodromes or such structures, improvements or air navigation facilities [Section 32, supra, R.A. 776]. In
the discharge of this obligation, the CAA is duty-bound to exercise due diligence in overseeing the
construction and maintenance of the viewing deck or terrace of the airport.

It must be borne in mind that pursuant to Article 1173 of the Civil Code, "(t)he fault or negligence of the
obligor consists in the omission of that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the person, of the time and of the place." Here, the obligation of
the CAA in maintaining the viewing deck, a facility open to the public, requires that CAA insure the
safety of the viewers using it. As these people come to the viewing deck to watch the planes and
passengers, their tendency would be to look to where the planes and the incoming passengers are and
not to look down on the floor or pavement of the viewing deck. The CAA should have thus made sure
that no dangerous obstructions or elevations exist on the floor of the deck to prevent any undue harm
to the public.

The legal foundation of CAA's liability for quasi-delict can be found in Article 2176 of the Civil Code
which provides that "(w)hoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done... As the CAA knew of the existence of the dangerous
elevation which it claims though, was made precisely in accordance with the plans and specifications of
the building for proper drainage of the open terrace [See Record on Appeal, pp. 13 and 57; Rollo, p. 391,
its failure to have it repaired or altered in order to eliminate the existing hazard constitutes such
negligence as to warrant a finding of liability based on quasi-delict upon CAA.

The Court finds the contention that private respondent was, at the very least, guilty of contributory
negligence, thus reducing the damages that plaintiff may recover, unmeritorious. Contributory
negligence under Article 2179 of the Civil Code contemplates a negligent act or omission on the part of
the plaintiff, which although not the proximate cause of his injury, contributed to his own damage, the
proximate cause of the plaintiffs own injury being the defendant's lack of due care. In the instant case,
no contributory negligence can be imputed to the private respondent, considering the following test
formulated in the early case of Picart v. Smith, 37 Phil. 809 (1918):

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 man 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 the negligence in a given case is not
determined by reference to the personal judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in the
particular case. Abstract speculations cannot be here of much value but this much can be profitably said:
Reasonable men-overn their conduct by the circumstances which are before them or known to them.
They are not, and are not supposed to be omniscient of the future. Hence they can be expected to take
care only when there is something before them to suggest or warn of danger. Could a prudent man, in
the case under consideration, foresee harm as a result of the course actually pursued' If so, it was the
duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm, followed
by the ignoring of the suggestion born of this prevision, is always necessary before negligence can be
held to exist.... [Picart v. Smith, supra, p. 813; Emphasis supplied.]

The private respondent, who was the plaintiff in the case before the lower court, could not have
reasonably foreseen the harm that would befall him, considering the attendant factual circumstances.
Even if the private respondent had been looking where he was going, the step in question could not
easily be noticed because of its construction. As the trial court found:

In connection with the incident testified to, a sketch, Exhibit O, shows a section of the floorings oil which
plaintiff had tripped, This sketch reveals two pavements adjoining each other, one being elevated by
four and one-fourth inches than the other. From the architectural standpoint the higher, pavement is a
step. However, unlike a step commonly seen around, the edge of the elevated pavement slanted
outward as one walks to one interior of the terrace. The length of the inclination between the edges of
the two pavements is three inches. Obviously, plaintiff had stepped on the inclination because had his
foot landed on the lower pavement he would not have lost his balance. The same sketch shows that
both pavements including the inclined portion are tiled in red cement, and as shown by the photograph
Exhibit A, the lines of the tilings are continuous. It would therefore be difficult for a pedestrian to see
the inclination especially where there are plenty of persons in the terrace as was the situation when
plaintiff fell down. There was no warning sign to direct one's attention to the change in the elevation of
the floorings. [Rollo, pp. 2829.]

III

Finally, petitioner appeals to this Court the award of damages to private respondent. The liability of CAA
to answer for damages, whether actual, moral or exemplary, cannot be seriously doubted in view of one
conferment of the power to sue and be sued upon it, which, as held in the case of Rayo v. Court of First
Instance, supra, includes liability on a claim for quasi-dilict. In the aforestated case, the liability of the
National Power Corporation to answer for damages resulting from its act of sudden, precipitate and
simultaneous opening of the Angat Dam, which caused the death of several residents of the area and
the destruction of properties, was upheld since the o,rant of the power to sue and be sued upon it
necessarily implies that it can be held answerable for its tortious acts or any wrongful act for that
matter.

With respect to actual or compensatory damages, the law mandates that the same be proven.

Art. 2199. Except as provided by law or by stipulation, one are 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 on compensatory damages [New Civil Code].

Private respondent claims P15,589.55 representing medical and hospitalization bills. This Court finds the
same to have been duly proven through the testimony of Dr. Ambrosio Tangco, the physician who
attended to private respondent (Rollo, p. 26) and who Identified Exh. "H" which was his bill for
professional services [Rollo, p. 31].

Concerning the P20,200.00 alleged to have been spent for other expenses such as the transportation of
the two lawyers who had to represent private respondent abroad and the publication of the
postponement notices of the wedding, the Court holds that the same had also been duly proven. Private
respondent had adequately shown the existence of such losses and the amount thereof in the
testimonies before the trial court [CA decision, p. 81. At any rate, the findings of the Court of Appeals
with respect to this are findings of facts [One Heart Sporting Club, Inc. v. Court of Appeals, G.R. Nos.
5379053972, Oct. 23, 1981, 108 SCRA 4161 which, as had been held time and again, are, as a general
rule, conclusive before this Court [Sese v. Intermediate Appellate Court, G.R. No. 66186, July 31,
1987,152 SCRA 585].

With respect to the P30,000.00 awarded as moral damages, the Court holds private respondent entitled
thereto because of the physical suffering and physical injuries caused by the negligence of the CAA [Arts.
2217 and 2219 (2), New Civil Code].

With respect to the award of exemplary damages, the Civil Code explicitly, states:

Art. 2229. Exemplary or corrective damages, are imposed, by way of example or correction for the
public good, in addition to the moral, liquidated or compensatory

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.

Gross negligence which, according to the Court, is equivalent to the term "notorious negligence" and
consists in the failure to exercise even slight care [Caunan v. Compania General de Tabacos, 56 Phil. 542
(1932)] can be attributed to the CAA for its failure to remedy the dangerous condition of the questioned
elevation or to even post a warning sign directing the attention of the viewers to the change in the
elevation of the floorings notwithstanding its knowledge of the hazard posed by such elevation [Rollo,
pp. 28-29; Record oil Appeal, p. 57]. The wanton disregard by the CAA of the safety of the people using
the viewing deck, who are charged an admission fee, including the petitioner who paid the entrance
fees to get inside the vantage place [CA decision, p. 2; Rollo, p. 25] and are, therefore, entitled to expect
a facility that is properly and safely maintained justifies the award of exemplary damages against the
CAA, as a deterrent and by way of example or correction for the public good. The award of P40,000.00
by the trial court as exemplary damages appropriately underscores the point that as an entity changed
with providing service to the public, the CAA. like all other entities serving the public. has the obligation
to provide the public with reasonably safe service.

Finally, the award of attorney's fees is also upheld considering that under Art. 2208 (1) of the Civil Code,
the same may be awarded whenever exemplary damages are awarded, as in this case, and,at any rate,
under Art. 2208 (11), the Court has the discretion to grant the same when it is just and equitable.

However, since the Manila International Airport Authority (MIAA) has taken over the management and
operations of the Manila International Airport [renamed Ninoy Aquino International Airport under
Republic Act No. 6639] pursuant to Executive Order No. 778 as amended by executive Orders Nos. 903
(1983), 909 (1983) and 298 (1987) and under Section 24 of the said Exec. Order 778, the MIAA has
assumed all the debts, liabilities and obligations of the now defunct Civil Aeronautics Administration
(CAA), the liabilities of the CAA have now been transferred to the MIAA.

WHEREFORE, finding no reversible error, the Petition for review on certiorari is DENIED and the decision
of the Court of Appeals in CA-G.R. No. 51172-R is AFFIRMED.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.


The Lawphil Project - Arellano Law Foundation

[G.R. No. 119602. October 6, 2000]

WILDVALLEY SHIPPING CO., LTD. petitioner, vs. COURT OF APPEALS and PHILIPPINE PRESIDENT LINES
INC., respondents.
D E C I S I O N
BUENA, J.:

This is a petition for review on certiorari seeking to set aside the decision of the Court of Appeals which
reversed the decision of the lower court in CA-G.R. CV No. 36821, entitled "Wildvalley Shipping Co., Ltd.,
plaintiff-appellant, versus Philippine President Lines, Inc., defendant-appellant."

The antecedent facts of the case are as follows:

Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine President Lines, Inc.,
private respondent herein, arrived in Puerto Ordaz, Venezuela, to load iron ore. Upon the completion of
the loading and when the vessel was ready to leave port, Mr. Ezzar del Valle Solarzano Vasquez, an
official pilot of Venezuela, was designated by the harbour authorities in Puerto Ordaz to navigate the
Philippine Roxas through the Orinoco River.[1] He was asked to pilot the said vessel on February 11,
1988[2] boarding it that night at 11:00 p.m.[3]

The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge together with
the pilot (Vasquez), the vessel's third mate (then the officer on watch), and a helmsman when the vessel
left the port[4] at 1:40 a.m. on February 12, 1988.[5] Captain Colon left the bridge when the vessel was
under way.[6]

The Philippine Roxas experienced some vibrations when it entered the San Roque Channel at mile
172.[7] The vessel proceeded on its way, with the pilot assuring the watch officer that the vibration was
a result of the shallowness of the channel.[8]

Between mile 158 and 157, the vessel again experienced some vibrations.[9] These occurred at 4:12
a.m.[10] It was then that the watch officer called the master to the bridge.[11]

The master (captain) checked the position of the vessel[12] and verified that it was in the centre of the
channel.[13] He then went to confirm, or set down, the position of the vessel on the chart.[14] He
ordered Simplicio A. Monis, Chief Officer of the President Roxas, to check all the double bottom
tanks.[15]

At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River,[16] thus obstructing the
ingress and egress of vessels.

As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner Wildvalley Shipping
Company, Ltd., was unable to sail out of Puerto Ordaz on that day.

Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial Court of Manila,
Branch III against Philippine President Lines, Inc. and Pioneer Insurance Company (the
underwriter/insurer of Philippine Roxas) for damages in the form of unearned profits, and interest
thereon amounting to US $400,000.00 plus attorney's fees, costs, and expenses of litigation. The
complaint against Pioneer Insurance Company was dismissed in an Order dated November 7, 1988.[17]

At the pre-trial conference, the parties agreed on the following facts:

"1. The jurisdictional facts, as specified in their respective pleadings;

"2. That defendant PPL was the owner of the vessel Philippine Roxas at the time of the incident;

"3. That defendant Pioneer Insurance was the insurance underwriter for defendant PPL;

"4. That plaintiff Wildvalley Shipping Co., Inc. is the owner of the vessel Malandrinon, whose passage
was obstructed by the vessel Philippine Roxas at Puerto Ordaz, Venezuela, as specified in par. 4, page 2
of the complaint;

"5. That on February 12, 1988, while the Philippine Roxas was navigating the channel at Puerto Ordaz,
the said vessel grounded and as a result, obstructed navigation at the channel;

"6. That the Orinoco River in Puerto Ordaz is a compulsory pilotage channel;

"7. That at the time of the incident, the vessel, Philippine Roxas, was under the command of the pilot
Ezzar Solarzano, assigned by the government thereat, but plaintiff claims that it is under the command
of the master;

"8. The plaintiff filed a case in Middleburg, Holland which is related to the present case;

"9. The plaintiff caused the arrest of the Philippine Collier, a vessel owned by the defendant PPL;

"10. The Orinoco River is 150 miles long and it takes approximately 12 hours to navigate out of the said
river;

"11. That no security for the plaintiff's claim was given until after the Philippine Collier was arrested; and

"12. That a letter of guarantee, dated 12-May-88 was issued by the Steamship Mutual Underwriters
Ltd."[18]

The trial court rendered its decision on October 16, 1991 in favor of the petitioner, Wildvalley Shipping
Co., Ltd. The dispositive portion thereof reads as follows:

"WHEREFORE, judgment is rendered for the plaintiff, ordering defendant Philippine President Lines, Inc.
to pay to the plaintiff the sum of U.S. $259,243.43, as actual and compensatory damages, and U.S.
$162,031.53, as expenses incurred abroad for its foreign lawyers, plus additional sum of U.S. $22,000.00,
as and for attorney's fees of plaintiff's local lawyer, and to pay the cost of this suit.

"Defendant's counterclaim is dismissed for lack of merit.

"SO ORDERED."[19]

Both parties appealed: the petitioner appealing the non-award of interest with the private respondent
questioning the decision on the merits of the case.

After the requisite pleadings had been filed, the Court of Appeals came out with its questioned decision
dated June 14, 1994,[20] the dispositive portion of which reads as follows:

"WHEREFORE, finding defendant-appellant's appeal to be meritorious, judgment is hereby rendered
reversing the Decision of the lower court. Plaintiff-appellant's Complaint is dismissed and it is ordered to
pay defendant-appellant the amount of Three Hundred Twenty-three Thousand, Forty-two Pesos and
Fifty-three Centavos (P323,042.53) as and for attorney's fees plus cost of suit. Plaintiff-appellant's
appeal is DISMISSED.

"SO ORDERED."[21]

Petitioner filed a motion for reconsideration[22] but the same was denied for lack of merit in the
resolution dated March 29, 1995.[23]

Hence, this petition.

The petitioner assigns the following errors to the court a quo:

1. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT UNDER PHILIPPINE LAW NO
FAULT OR NEGLIGENCE CAN BE ATTRIBUTED TO THE MASTER NOR THE OWNER OF THE "PHILIPPINE
ROXAS" FOR THE GROUNDING OF SAID VESSEL RESULTING IN THE BLOCKAGE OF THE RIO ORINOCO;

2. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE FINDINGS OF FACTS OF THE
TRIAL COURT CONTRARY TO EVIDENCE;

3. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE "PHILIPPINE ROXAS" IS
SEAWORTHY;

4. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING VENEZUELAN LAW DESPITE
THE FACT THAT THE SAME HAS BEEN SUBSTANTIALLY PROVED IN THE TRIAL COURT WITHOUT ANY
OBJECTION FROM PRIVATE RESPONDENT, AND WHOSE OBJECTION WAS INTERPOSED BELATEDLY ON
APPEAL;

5. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN AWARDING ATTORNEY'S FEES AND COSTS TO
PRIVATE RESPONDENT WITHOUT ANY FAIR OR REASONABLE BASIS WHATSOEVER;

6. RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN NOT FINDING THAT PETITIONER'S CAUSE IS
MERITORIOUS HENCE, PETITIONER SHOULD BE ENTITLED TO ATTORNEY'S FEES, COSTS AND INTEREST.

The petition is without merit.

The primary issue to be determined is whether or not Venezuelan law is applicable to the case at bar.

It is well-settled that foreign laws do not prove themselves in our jurisdiction and our courts are not
authorized to take judicial notice of them. Like any other fact, they must be alleged and proved.[24]

A distinction is to be made as to the manner of proving a written and an unwritten law. The former falls
under Section 24, Rule 132 of the Rules of Court, as amended, the entire provision of which is quoted
hereunder. Where the foreign law sought to be proved is "unwritten," the oral testimony of expert
witnesses is admissible, as are printed and published books of reports of decisions of the courts of the
country concerned if proved to be commonly admitted in such courts.[25]

Section 24 of Rule 132 of the Rules of Court, as amended, provides:

"Sec. 24. Proof of official record. -- The record of public documents referred to in paragraph (a) of
Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a
copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if
the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office
in which the record is kept is in a foreign country, the certificate may be made by a secretary of the
embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the
foreign service of the Philippines stationed in the foreign country in which the record is kept, and
authenticated by the seal of his office." (Underscoring supplied)

The court has interpreted Section 25 (now Section 24) to include competent evidence like the testimony
of a witness to prove the existence of a written foreign law.[26]

In the noted case of Willamette Iron & Steel Works vs. Muzzal,[27] it was held that:

" Mr. Arthur W. Bolton, an attorney-at-law of San Francisco, California, since the year 1918 under oath,
quoted verbatim section 322 of the California Civil Code and stated that said section was in force at the
time the obligations of defendant to the plaintiff were incurred, i.e. on November 5, 1928 and
December 22, 1928. This evidence sufficiently established the fact that the section in question was the
law of the State of California on the above dates. A reading of sections 300 and 301 of our Code of Civil
Procedure will convince one that these sections do not exclude the presentation of other competent
evidence to prove the existence of a foreign law.

"`The foreign law is a matter of fact You ask the witness what the law is; he may, from his recollection,
or on producing and referring to books, say what it is.' (Lord Campbell concurring in an opinion of Lord
Chief Justice Denman in a well-known English case where a witness was called upon to prove the Roman
laws of marriage and was permitted to testify, though he referred to a book containing the decrees of
the Council of Trent as controlling, Jones on Evidence, Second Edition, Volume 4, pages 3148-3152.) x x
x.

We do not dispute the competency of Capt. Oscar Leon Monzon, the Assistant Harbor Master and Chief
of Pilots at Puerto Ordaz, Venezuela,[28] to testify on the existence of the Reglamento General de la Ley
de Pilotaje (pilotage law of Venezuela)[29] and the Reglamento Para la Zona de Pilotaje No 1 del Orinoco
(rules governing the navigation of the Orinoco River). Captain Monzon has held the aforementioned
posts for eight years.[30] As such he is in charge of designating the pilots for maneuvering and
navigating the Orinoco River. He is also in charge of the documents that come into the office of the
harbour masters.[31]

Nevertheless, we take note that these written laws were not proven in the manner provided by Section
24 of Rule 132 of the Rules of Court.

The Reglamento General de la Ley de Pilotaje was published in the Gaceta Oficial[32]of the Republic of
Venezuela. A photocopy of the Gaceta Oficial was presented in evidence as an official publication of the
Republic of Venezuela.

The Reglamento Para la Zona de Pilotaje No 1 del Orinoco is published in a book issued by the Ministerio
de Comunicaciones of Venezuela.[33] Only a photocopy of the said rules was likewise presented as
evidence.

Both of these documents are considered in Philippine jurisprudence to be public documents for they are
the written official acts, or records of the official acts of the sovereign authority, official bodies and
tribunals, and public officers of Venezuela.[34]

For a copy of a foreign public document to be admissible, the following requisites are mandatory: (1) It
must be attested by the officer having legal custody of the records or by his deputy; and (2) It must be
accompanied by a certificate by a secretary of the embassy or legation, consul general, consul, vice
consular or consular agent or foreign service officer, and with the seal of his office.[35] The latter
requirement is not a mere technicality but is intended to justify the giving of full faith and credit to the
genuineness of a document in a foreign country.[36]

It is not enough that the Gaceta Oficial, or a book published by the Ministerio de Comunicaciones of
Venezuela, was presented as evidence with Captain Monzon attesting it. It is also required by Section 24
of Rule 132 of the Rules of Court that a certificate that Captain Monzon, who attested the documents, is
the officer who had legal custody of those records made by a secretary of the embassy or legation,
consul general, consul, vice consul or consular agent or by any officer in the foreign service of the
Philippines stationed in Venezuela, and authenticated by the seal of his office accompanying the copy of
the public document. No such certificate could be found in the records of the case.

With respect to proof of written laws, parol proof is objectionable, for the written law itself is the best
evidence. According to the weight of authority, when a foreign statute is involved, the best evidence
rule requires that it be proved by a duly authenticated copy of the statute.[37]

At this juncture, we have to point out that the Venezuelan law was not pleaded before the lower court.

A foreign law is considered to be pleaded if there is an allegation in the pleading about the existence of
the foreign law, its import and legal consequence on the event or transaction in issue.[38]

A review of the Complaint[39] revealed that it was never alleged or invoked despite the fact that the
grounding of the M/V Philippine Roxas occurred within the territorial jurisdiction of Venezuela.

We reiterate that under the rules of private international law, a foreign law must be properly pleaded
and proved as a fact. In the absence of pleading and proof, the laws of a foreign country, or state, will be
presumed to be the same as our own local or domestic law and this is known as processual
presumption.[40]

Having cleared this point, we now proceed to a thorough study of the errors assigned by the petitioner.

Petitioner alleges that there was negligence on the part of the private respondent that would warrant
the award of damages.

There being no contractual obligation, the private respondent is obliged to give only the diligence
required of a good father of a family in accordance with the provisions of Article 1173 of the New Civil
Code, thus:

Art. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is
required by the nature of the obligation and corresponds with the circumstances of the persons, of the
time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2201,
paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that
which is expected of a good father of a family shall be required.

The diligence of a good father of a family requires only that diligence which an ordinary prudent man
would exercise with regard to his own property. This we have found private respondent to have
exercised when the vessel sailed only after the "main engine, machineries, and other auxiliaries" were
checked and found to be in good running condition;[41] when the master left a competent officer, the
officer on watch on the bridge with a pilot who is experienced in navigating the Orinoco River; when the
master ordered the inspection of the vessel's double bottom tanks when the vibrations occurred
anew.[42]

The Philippine rules on pilotage, embodied in Philippine Ports Authority Administrative Order No. 03-85,
otherwise known as the Rules and Regulations Governing Pilotage Services, the Conduct of Pilots and
Pilotage Fees in Philippine Ports enunciate the duties and responsibilities of a master of a vessel and its
pilot, among other things.

The pertinent provisions of the said administrative order governing these persons are quoted
hereunder:

Sec. 11. Control of Vessels and Liability for Damage. -- On compulsory pilotage grounds, the Harbor
Pilot providing the service to a vessel shall be responsible for the damage caused to a vessel or to life
and property at ports due to his negligence or fault. He can be absolved from liability if the accident is
caused by force majeure or natural calamities provided he has exercised prudence and extra diligence to
prevent or minimize the damage.

The Master shall retain overall command of the vessel even on pilotage grounds whereby he can
countermand or overrule the order or command of the Harbor Pilot on board. In such event, any
damage caused to a vessel or to life and property at ports by reason of the fault or negligence of the
Master shall be the responsibility and liability of the registered owner of the vessel concerned without
prejudice to recourse against said Master.

Such liability of the owner or Master of the vessel or its pilots shall be determined by competent
authority in appropriate proceedings in the light of the facts and circumstances of each particular case.

x x x

Sec. 32. Duties and Responsibilities of the Pilots or Pilots Association. -- The duties and responsibilities
of the Harbor Pilot shall be as follows:

x x x

f) A pilot shall be held responsible for the direction of a vessel from the time he assumes his work as a
pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his responsibility
shall cease at the moment the Master neglects or refuses to carry out his order."

The Code of Commerce likewise provides for the obligations expected of a captain of a vessel, to wit:

Art. 612. The following obligations shall be inherent in the office of captain:

x x x

"7. To be on deck on reaching land and to take command on entering and leaving ports, canals,
roadsteads, and rivers, unless there is a pilot on board discharging his duties. x x x.

The law is very explicit. The master remains the overall commander of the vessel even when there is a
pilot on board. He remains in control of the ship as he can still perform the duties conferred upon him
by law[43] despite the presence of a pilot who is temporarily in charge of the vessel. It is not required of
him to be on the bridge while the vessel is being navigated by a pilot.

However, Section 8 of PPA Administrative Order No. 03-85, provides:

Sec. 8. Compulsory Pilotage Service - For entering a harbor and anchoring thereat, or passing through
rivers or straits within a pilotage district, as well as docking and undocking at any pier/wharf, or shifting
from one berth or another, every vessel engaged in coastwise and foreign trade shall be under
compulsory pilotage.

xxx.

The Orinoco River being a compulsory pilotage channel necessitated the engaging of a pilot who was
presumed to be knowledgeable of every shoal, bank, deep and shallow ends of the river. In his
deposition, pilot Ezzar Solarzano Vasquez testified that he is an official pilot in the Harbour at Port
Ordaz, Venezuela,[44] and that he had been a pilot for twelve (12) years.[45] He also had experience in
navigating the waters of the Orinoco River.[46]

The law does provide that the master can countermand or overrule the order or command of the harbor
pilot on board. The master of the Philippine Roxas deemed it best not to order him (the pilot) to stop
the vessel,[47] mayhap, because the latter had assured him that they were navigating normally before
the grounding of the vessel.[48] Moreover, the pilot had admitted that on account of his experience he
was very familiar with the configuration of the river as well as the course headings, and that he does not
even refer to river charts when navigating the Orinoco River.[49]

Based on these declarations, it comes as no surprise to us that the master chose not to regain control of
the ship. Admitting his limited knowledge of the Orinoco River, Captain Colon relied on the knowledge
and experience of pilot Vasquez to guide the vessel safely.

Licensed pilots, enjoying the emoluments of compulsory pilotage, are in a different class from ordinary
employees, for they assume to have a skill and a knowledge of navigation in the particular waters over
which their licenses extend superior to that of the master; pilots are bound to use due diligence and
reasonable care and skill. A pilot's ordinary skill is in proportion to the pilot's responsibilities, and implies
a knowledge and observance of the usual rules of navigation, acquaintance with the waters piloted in
their ordinary condition, and nautical skill in avoiding all known obstructions. The character of the skill
and knowledge required of a pilot in charge of a vessel on the rivers of a country is very different from
that which enables a navigator to carry a vessel safely in the ocean. On the ocean, a knowledge of the
rules of navigation, with charts that disclose the places of hidden rocks, dangerous shores, or other
dangers of the way, are the main elements of a pilot's knowledge and skill. But the pilot of a river vessel,
like the harbor pilot, is selected for the individual's personal knowledge of the topography through
which the vessel is steered."[50]

We find that the grounding of the vessel is attributable to the pilot. When the vibrations were first felt
the watch officer asked him what was going on, and pilot Vasquez replied that "(they) were in the
middle of the channel and that the vibration was as (sic) a result of the shallowness of the channel."[51]

Pilot Ezzar Solarzano Vasquez was assigned to pilot the vessel Philippine Roxas as well as other vessels
on the Orinoco River due to his knowledge of the same. In his experience as a pilot, he should have been
aware of the portions which are shallow and which are not. His failure to determine the depth of the
said river and his decision to plod on his set course, in all probability, caused damage to the vessel. Thus,
we hold him as negligent and liable for its grounding.

In the case of Homer Ramsdell Transportation Company vs. La Compagnie Generale Transatlantique, 182
U.S. 406, it was held that:

x x x The master of a ship, and the owner also, is liable for any injury done by the negligence of the
crew employed in the ship. The same doctrine will apply to the case of a pilot employed by the master
or owner, by whose negligence any injury happens to a third person or his property: as, for example, by
a collision with another ship, occasioned by his negligence. And it will make no difference in the case
that the pilot, if any is employed, is required to be a licensed pilot; provided the master is at liberty to
take a pilot, or not, at his pleasure, for in such a case the master acts voluntarily, although he is
necessarily required to select from a particular class. On the other hand, if it is compulsive upon the
master to take a pilot, and, a fortiori, if he is bound to do so under penalty, then, and in such case,
neither he nor the owner will be liable for injuries occasioned by the negligence of the pilot; for in such a
case the pilot cannot be deemed properly the servant of the master or the owner, but is forced upon
them, and the maxim Qui facit per alium facit per se does not apply." (Underscoring supplied)

Anent the river passage plan, we find that, while there was none,[52] the voyage has been sufficiently
planned and monitored as shown by the following actions undertaken by the pilot, Ezzar Solarzano
Vasquez, to wit: contacting the radio marina via VHF for information regarding the channel, river
traffic,[53] soundings of the river, depth of the river, bulletin on the buoys.[54] The officer on watch also
monitored the voyage.[55]

We, therefore, do not find the absence of a river passage plan to be the cause for the grounding of the
vessel.

The doctrine of res ipsa loquitur does not apply to the case at bar because the circumstances
surrounding the injury do not clearly indicate negligence on the part of the private respondent. For the
said doctrine to apply, the following conditions must be met: (1) the accident was of such character as to
warrant an inference that it would not have happened except for 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.[56]

As has already been held above, there was a temporary shift of control over the ship from the master of
the vessel to the pilot on a compulsory pilotage channel. Thus, two of the requisites necessary for the
doctrine to apply, i.e., negligence and control, to render the respondent liable, are absent.

As to the claim that the ship was unseaworthy, we hold that it is not.

The Lloyds Register of Shipping confirmed the vessels seaworthiness in a Confirmation of Class issued
on February 16, 1988 by finding that "the above named ship (Philippine Roxas) maintained the class
"+100A1 Strengthened for Ore Cargoes, Nos. 2 and 8 Holds may be empty (CC) and +LMC" from
31/12/87 up until the time of casualty on or about 12/2/88."[57] The same would not have been issued
had not the vessel been built according to the standards set by Lloyd's.

Samuel Lim, a marine surveyor, at Lloyd's Register of Shipping testified thus:

"Q Now, in your opinion, as a surveyor, did top side tank have any bearing at all to the seaworthiness of
the vessel?

"A Well, judging on this particular vessel, and also basing on the class record of the vessel, wherein
recommendations were made on the top side tank, and it was given sufficient time to be repaired, it
means that the vessel is fit to travel even with those defects on the ship.

"COURT

What do you mean by that? You explain. The vessel is fit to travel even with defects? Is that what you
mean? Explain.

"WITNESS

"A Yes, your Honor. Because the class society which register (sic) is the third party looking into the
condition of the vessel and as far as their record states, the vessel was class or maintained, and she is fit
to travel during that voyage."

x x x

"ATTY. MISA

Before we proceed to other matter, will you kindly tell us what is (sic) the 'class +100A1 Strengthened
for Ore Cargoes', mean?

"WITNESS

"A Plus 100A1 means that the vessel was built according to Lloyd's rules and she is capable of carrying
ore bulk cargoes, but she is particularly capable of carrying Ore Cargoes with No. 2 and No. 8 holds
empty.

x x x

"COURT

The vessel is classed, meaning?

"A Meaning she is fit to travel, your Honor, or seaworthy."[58]

It is not required that the vessel must be perfect. To be seaworthy, a ship must be reasonably fit to
perform the services, and to encounter the ordinary perils of the voyage, contemplated by the parties to
the policy.[59]

As further evidence that the vessel was seaworthy, we quote the deposition of pilot Vasquez:

"Q Was there any instance when your orders or directions were not complied with because of the
inability of the vessel to do so?

"A No.

"Q. Was the vessel able to respond to all your commands and orders?

"A. The vessel was navigating normally.*60+

Eduardo P. Mata, Second Engineer of the Philippine Roxas submitted an accident report wherein he
stated that on February 11, 1988, he checked and prepared the main engine, machineries and all other
auxiliaries and found them all to be in good running condition and ready for maneuvering. That same
day the main engine, bridge and engine telegraph and steering gear motor were also tested.[61]
Engineer Mata also prepared the fuel for consumption for maneuvering and checked the engine
generators.[62]

Finally, we find the award of attorneys fee justified.

Article 2208 of the New Civil Code provides that:

"Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial
costs, cannot be recovered, except:

x x x

"(11) In any other case where the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered.

x x x

Due to the unfounded filing of this case, the private respondent was unjustifiably forced to litigate, thus
the award of attorneys fees was proper.

WHEREFORE, IN VIEW OF THE FOREGOING, the petition is DENIED and the decision of the Court of
Appeals in CA G.R. CV No. 36821 is AFFIRMED.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and De leon, Jr., JJ., concur.

[G.R. No. 115024. February 7, 1996]

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

RICHARD LI, petitioner, vs. COURT OF APPEALS and MA. LOURDES VALENZUELA, respondents.
D E C I S I O N
KAPUNAN, J.:

These two petitions for review on certiorari under Rule 45 of the Revised Rules of Court stem from an
action to recover damages by petitioner Lourdes Valenzuela in the Regional Trial Court of Quezon City
for injuries sustained by her in a vehicular accident in the early morning of June 24, 1990. The facts
found by the trial court are succinctly summarized by the Court of Appeals below:

This is an action to recover damages based on quasi-delict, for serious physical injuries sustained in a
vehicular accident.

Plaintiffs version of the accident is as follows: At around 2:00 in the morning of June 24, 1990, plaintiff
Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer with Plate No. FFU 542 from her restaurant
at Marcos highway to her home at Palanza Street, Araneta Avenue. She was travelling along Aurora
Blvd. with a companion, Cecilia Ramon, heading towards the direction of Manila. Before reaching A.
Lake Street, she noticed something wrong with her tires; she stopped at a lighted place where there
were people, to verify whether she had a flat tire and to solicit help if needed. Having been told by the
people present that her rear right tire was flat and that she cannot reach her home in that cars
condition, she parked along the sidewalk, about 1 feet away, put on her emergency lights, alighted
from the car, and went to the rear to open the trunk. She was standing at the left side of the rear of her
car pointing to the tools to a man who will help her fix the tire when she was suddenly bumped by a
1987 Mitsubishi Lancer driven by defendant Richard Li and registered in the name of defendant
Alexander Commercial, Inc. Because of the impact plaintiff was thrown against the windshield of the car
of the defendant, which was destroyed, and then fell to the ground. She was pulled out from under
defendants car. Plaintiffs left leg was severed up to the middle of her thigh, with only some skin and
sucle connected to the rest of the body. She was brought to the UERM Medical Memorial Center where
she was found to have a traumatic amputation, leg, left up to distal thigh (above knee). She was
confined in the hospital for twenty (20) days and was eventually fitted with an artificial leg. The
expenses for the hospital confinement (P 120,000.00) and the cost of the artificial leg (P27,000.00) were
paid by defendants from the car insurance.

In her complaint, plaintiff prayed for moral damages in the amount of P1 million, exemplary damages in
the amount of P100,000.00 and other medical and related expenses amounting to a total of
P180,000.00, including loss of expected earnings.

Defendant Richard Li denied that he was negligent. He was on his way home, travelling at 55 kph;
considering that it was raining, visibility was affected and the road was wet. Traffic was light. He testified
that he was driving along the inner portion of the right lane of Aurora Blvd. towards the direction of
Araneta Avenue, when he was suddenly confronted, in the vicinity of A. Lake Street, San Juan, with a car
coming from the opposite direction, travelling at 80 kph, with full bright lights. Temporarily blinded,
he instinctively swerved to the right to avoid colliding with the oncoming vehicle, and bumped plaintiffs
car, which he did not see because it was midnight blue in color, with no parking lights or early warning
device, and the area was poorly lighted. He alleged in his defense that the left rear portion of plaintiffs
car was protruding as it was then at a standstill diagonally on the outer portion of the right lane
towards Araneta Avenue (par. 18, Answer). He confirmed the testimony of plaintiffs witness that after
being bumped the car of the plaintiff swerved to the right and hit another car parked on the sidewalk.
Defendants counterclaimed for damages, alleging that plaintiff was reckless or negligent, as she was not
a licensed driver.

The police investigator, Pfc. Felic Ramos, who prepared the vehicular accident report and the sketch of
the three cars involved in the accident, testified that the plaintiffs car was near the sidewalk; this
witness did not remember whether the hazard lights of plaintiffs car were on, and did not notice if there
was an early warning device; there was a street light at the corner of Aurora Blvd. and F. Roman, about
100 meters away. It was not mostly dark, i.e. things can be seen (p. 16, tsn, Oct. 28, 1991).

A witness for the plaintiff, Rogelio Rodriguez, testified that after plaintiff alighted from her car and
opened the trunk compartment, defendants car came approaching very fast ten meters from the scene;
the car was zigzagging. The rear left side of plaintiffs car was bumped by the front right portion of
defendants car; as a consequence, the plaintiffs car swerved to the right and hit the parked car on the
sidewalk. Plaintiff was thrown to the windshield of defendants car, which was destroyed, and landed
under the car. He stated that defendant was under the influence of liquor as he could smell it very
well (pp. 43, 79, tsn., June 17, 1991).

After trial, the lower court sustained the plaintiffs submissions and found defendant Richard Li guilty of
gross negligence and liable for damages under Article 2176 of the Civil Code. The trial court likewise held
Alexander Commercial, Inc., Lis employer, jointly and severally liable for damages pursuant to Article
2180. It ordered the defendants to jointly and severally pay the following amounts:

1. P41,840.00, as actual damages, representing the miscellaneous expenses of the plaintiff as a result
of her severed left leg;

2. The sums of (a) P37,500.00, for the unrealized profits because of the stoppage of plaintiffs Bistro
La Conga restaurant three (3) weeks after the accident on June 24, 1990; (b) P20,000.00, a month, as
unrealized profits of the plaintiff in her Bistro La Conga restaurant, from August, 1990 until the date of
this judgment; and (c) P30,000.00, a month, for unrealized profits in plaintiffs two (2) beauty salons from
July, 1990 until the date of this decision;

3. P1,000,000.00, in moral damages;

4. P50,000.00, as exemplary damages,

5. P60,000.00, as reasonable attorneys fees; and

6. Costs.

As a result of the trial courts decision, defendants filed an Omnibus Motion for New Trial and for
Reconsideration, citing testimony in Criminal Case O.C. No. 804367 (People vs. Richard Li), tending to
show that the point of impact, as depicted by the pieces of glass/debris from the parties cars, appeared
to be at the center of the right lane of Aurora Blvd. The trial court denied the motion. Defendants
forthwith filed an appeal with the respondent Court of Appeals. In a Decision rendered March 30, 1994,
the Court of Appeals found that there was ample basis from the evidence of record for the trial courts
finding that the plaintiffs car was properly parked at the right, beside the sidewalk when it was bumped
by defendants car.*1+ Dismissing the defendants argument that the plaintiffs car was improperly
parked, almost at the center of the road, the respondent court noted that evidence which was supposed
to prove that the car was at or near center of the right lane was never presented during the trial of the
case.[2] The respondent court furthermore observed that:

Defendant Lis testimony that he was driving at a safe speed of 55 km./hour is self serving; it was not
corroborated. It was in fact contradicted by eyewitness Rodriguez who stated that he was outside his
beerhouse located at Aurora Boulevard after A. Lake Street, at or about 2:00 a.m. of June 24, 1990 when
his attention was caught by a beautiful lady (referring to the plaintiff) alighting from her car and opening
the trunk compartment; he noticed the car of Richard Li approaching very fast ten (10) meters away
from the scene; defendants car was zigzagging, although there were no holes and hazards on the
street, and bumped the leg of the plaintiff who was thrown against the windshield of defendants car,
causing its destruction. He came to the rescue of the plaintiff, who was pulled out from under
defendants car and was able to say hurting words to Richard Li because he noticed that the latter was
under the influence of liquor, because he could smell it very well (p. 36, et. seq., tsn, June 17, 1991).
He knew that plaintiff owned a beerhouse in Sta. Mesa in the 1970s, but did not know either plaintiff or
defendant Li before the accident.

In agreeing with the trial court that the defendant Li was liable for the injuries sustained by the plaintiff,
the Court of Appeals, in its decision, however, absolved the Lis employer, Alexander Commercial, Inc.
from any liability towards petitioner Lourdes Valenzuela and reduced the amount of moral damages to
P500,000.00. Finding justification for exemplary damages, the respondent court allowed an award of
P50,000.00 for the same, in addition to costs, attorneys fees and the other damages. The Court of
Appeals, likewise, dismissed the defendants counterclaims.*3+

Consequently, both parties assail the respondent courts decision by filing two separate petitions before
this Court. Richard Li, in G.R. No. 117944, contends that he should not be held liable for damages
because the proximate cause of the accident was Ma. Lourdes Valenzuelas own negligence.
Alternatively, he argues that in the event that this Court finds him negligent, such negligence ought to
be mitigated by the contributory negligence of Valenzuela.

On the other hand, in G.R. No. 115024, Ma. Lourdes Valenzuela assails the respondent courts decision
insofar as it absolves Alexander Commercial, Inc. from liability as the owner of the car driven by Richard
Li and insofar as it reduces the amount of the actual and moral damages awarded by the trial court.[4]

As the issues are intimately related, both petitions are hereby consolidated. It is plainly evident that the
petition for review in G.R. No. 117944 raises no substantial questions of law. What it, in effect, attempts
to have this Court review are factual findings of the trial court, as sustained by the Court of Appeals
finding Richard Li grossly negligent in driving the Mitsubishi Lancer provided by his company in the early
morning hours of June 24, 1990. This we will not do. As a general rule, findings of fact of the Court of
Appeals are binding and conclusive upon us, and this Court will not normally disturb such factual
findings unless the findings of fact of the said court are palpably unsupported by the evidence on record
or unless the judgment itself is based on a misapprehension of facts.[5]

In the first place, Valenzuelas version of the incident was fully corroborated by an uninterested witness,
Rogelio Rodriguez, the owner-operator of an establishment located just across the scene of the
accident. On trial, he testified that he observed a car being driven at a very fast speed, racing towards
the general direction of Araneta Avenue.[6] Rodriguez further added that he was standing in front of his
establishment, just ten to twenty feet away from the scene of the accident, when he saw the car hit
Valenzuela, hurtling her against the windshield of the defendants Mitsubishi Lancer, from where she
eventually fell under the defendants car. Spontaneously reacting to the incident, he crossed the street,
noting that a man reeking with the smell of liquor had alighted from the offending vehicle in order to
survey the incident.*7+ Equally important, Rodriguez declared that he observed Valenzuelas car parked
parallel and very near the sidewalk,*8+ contrary to Lis allegation that Valenzuelas car was close to the
center of the right lane. We agree that as between Lis self-serving asseverations and the observations
of a witness who did not even know the accident victim personally and who immediately gave a
statement of the incident similar to his testimony to the investigator immediately after the incident, the
latters testimony deserves greater weight. As the court emphasized:

The issue is one of credibility and from Our own examination of the transcript, We are not prepared to
set aside the trial courts reliance on the testimony of Rodriguez negating defendants assertion that he
was driving at a safe speed. While Rodriguez drives only a motorcycle, his perception of speed is not
necessarily impaired. He was subjected to cross-examination and no attempt was made to question his
competence or the accuracy of his statement that defendant was driving very fast. This was the same
statement he gave to the police investigator after the incident, as told to a newspaper report (Exh. P).
We see no compelling basis for disregarding his testimony.

The alleged inconsistencies in Rodriguez testimony are not borne out by an examination of the
testimony. Rodriguez testified that the scene of the accident was across the street where his beerhouse
is located about ten to twenty feet away (pp. 35-36, tsn, June 17, 1991). He did not state that the
accident transpired immediately in front of his establishment. The ownership of the Lambingan sa
Kambingan is not material; the business is registered in the name of his mother, but he explained that
he owns the establishment (p. 5, tsn., June 20, 1991).

Moreover, the testimony that the streetlights on his side of Aurora Boulevard were on the night the
accident transpired (p. 8) is not necessarily contradictory to the testimony of Pfc. Ramos that there was
a streetlight at the corner of Aurora Boulevard and F. Roman Street (p. 45, tsn., Oct. 20, 1991).

With respect to the weather condition, Rodriguez testified that there was only a drizzle, not a heavy rain
and the rain has stopped and he was outside his establishment at the time the accident transpired (pp.
64-65, tsn., June 17, 1991). This was consistent with plaintiffs testimony that it was no longer raining
when she left Bistro La Conga (pp. 10-11, tsn., April 29, 1991). It was defendant Li who stated that it was
raining all the way in an attempt to explain why he was travelling at only 50-55 kph. (p. 11, tsn., Oct. 14,
1991). As to the testimony of Pfc. Ramos that it was raining, he arrived at the scene only in response to a
telephone call after the accident had transpired (pp. 9-10, tsn, Oct. 28, 1991). We find no substantial
inconsistencies in Rodriguezs testimony that would impair the essential integrity of his testimony or
reflect on his honesty. We are compelled to affirm the trial courts acceptance of the testimony of said
eyewitness.

Against the unassailable testimony of witness Rodriguez we note that Lis testimony was peppered with
so many inconsistencies leading us to conclude that his version of the accident was merely adroitly
crafted to provide a version, obviously self-serving, which would exculpate him from any and all liability
in the incident. Against Valenzuelas corroborated claims, his allegations were neither backed up by
other witnesses nor by the circumstances proven in the course of trial. He claimed that he was driving
merely at a speed of 55 kph. when out of nowhere he saw a dark maroon lancer right in front of him,
which was (the) plaintiffs car. He alleged that upon seeing this sudden apparition he put on his
brakes to no avail as the road was slippery.[9]

One will have to suspend disbelief in order to give credence to Lis disingenuous and patently self-
serving asseverations. The average motorist alert to road conditions will have no difficulty applying the
brakes to a car traveling at the speed claimed by Li. Given a light rainfall, the visibility of the street, and
the road conditions on a principal metropolitan thoroughfare like Aurora Boulevard, Li would have had
ample time to react to the changing conditions of the road if he were alert - as every driver should be -
to those conditions. Driving exacts a more than usual toll on the senses. Physiological fight or
flight*10+ mechanisms are at work, provided such mechanisms were not dulled by drugs, alcohol,
exhaustion, drowsiness, etc.*11+ Lis failure to react in a manner which would have avoided the accident
could therefore have been only due to either or both of the two factors: 1) that he was driving at a very
fast speed as testified by Rodriquez; and 2) that he was under the influence of alcohol.[12] Either factor
working independently would have diminished his responsiveness to road conditions, since normally he
would have slowed down prior to reaching Valenzuelas car, rather than be in a situation forcing him to
suddenly apply his brakes. As the trial court noted (quoted with approval by respondent court):

Secondly, as narrated by defendant Richard Li to the San Juan Police immediately after the incident, he
said that while driving along Aurora Blvd., out of nowhere he saw a dark maroon lancer right in front of
him, which was plaintiffs car, indicating, again, thereby that, indeed, he was driving very fast, oblivious
of his surroundings and the road ahead of him, because if he was not, then he could not have missed
noticing at a still far distance the parked car of the plaintiff at the right side near the sidewalk which had
its emergency lights on, thereby avoiding forcefully bumping at the plaintiff who was then standing at
the left rear edge of her car.

Since, according to him, in his narration to the San Juan Police, he put on his brakes when he saw the
plaintiffs car in front of him, but that it failed as the road was wet and slippery, this goes to show again,
that, contrary to his claim, he was, indeed, running very fast. For, were it otherwise, he could have easily
completely stopped his car, thereby avoiding the bumping of the plaintiff, notwithstanding that the road
was wet and slippery. Verily, since, if, indeed, he was running slow, as he claimed, at only about 55
kilometers per hour, then, inspite of the wet and slippery road, he could have avoided hitting the
plaintiff by the mere expedient or applying his brakes at the proper time and distance.

It could not be true, therefore, as he now claims during his testimony, which is contrary to what he told
the police immediately after the accident and is, therefore, more believable, that he did not actually
step on his brakes, but simply swerved a little to the right when he saw the on-coming car with glaring
headlights, from the opposite direction, in order to avoid it.

For, had this been what he did, he would not have bumped the car of the plaintiff which was properly
parked at the right beside the sidewalk. And, it was not even necessary for him to swerve a little to the
right in order to safely avoid a collision with the on-coming car, considering that Aurora Blvd. is a double
lane avenue separated at the center by a dotted white paint, and there is plenty of space for both cars,
since her car was running at the right lane going towards Manila and the on-coming car was also on its
right lane going to Cubao.*13+

Having come to the conclusion that Li was negligent in driving his company-issued Mitsubishi Lancer, the
next question for us to determine is whether or not Valenzuela was likewise guilty of contributory
negligence in parking her car alongside Aurora Boulevard, which entire area Li points out, is a no parking
zone.

We agree with the respondent court that Valenzuela was not guilty of contributory negligence.

Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the
harm he has suffered, which falls below the standard to which he is required to conform for his own
protection. [14] Based on the foregoing definition, the standard or act to which, according to petitioner
Li, Valenzuela ought to have conformed for her own protection was not to park at all at any point of
Aurora Boulevard, a no parking zone. We cannot agree.

Courts have traditionally been compelled to recognize that an actor who is confronted with an
emergency is not to be held up to the standard of conduct normally applied to an individual who is in no
such situation. The law takes stock of impulses of humanity when placed in threatening or dangerous
situations and does not require the same standard of thoughtful and reflective care from persons
confronted by unusual and oftentimes threatening conditions.*15+ Under the emergency rule adopted
by this Court in Gan vs Court of Appeals,[16] an individual who suddenly finds himself in a situation of
danger and is required to act without much time to consider the best means that may be adopted to
avoid the impending danger, is not guilty of negligence if he fails to undertake what subsequently and
upon reflection may appear to be a better solution, unless the emergency was brought by his own
negligence.[17]

Applying this principle to a case in which the victims in a vehicular accident swerved to the wrong lane
to avoid hitting two children suddenly darting into the street, we held, in Mc Kee vs. Intermediate
Appellate Court,*18+ that the driver therein, Jose Koh, adopted the best means possible in the given
situation to avoid hitting the children. Using the emergency rule the court concluded that Koh, in
spite of the fact that he was in the wrong lane when the collision with an oncoming truck occurred, was
not guilty of negligence.[19]

While the emergency rule applies to those cases in which reflective thought, or the opportunity to
adequately weigh a threatening situation is absent, the conduct which is required of an individual in
such cases is dictated not exclusively by the suddenness of the event which absolutely negates
thoughtful care, but by the over-all nature of the circumstances. A woman driving a vehicle suddenly
crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both convenient
for her to do so and which is not a hazard to other motorists. She is not expected to run the entire
boulevard in search for a parking zone or turn on a dark Street or alley where she would likely find no
one to help her. It would be hazardous for her not to stop and assess the emergency (simply because
the entire length of Aurora Boulevard is a no-parking zone) because the hobbling vehicle would be both
a threat to her safety and to other motorists. In the instant case, Valenzuela, upon reaching that portion
of Aurora Boulevard close to A. Lake St., noticed that she had a flat tire. To avoid putting herself and
other motorists in danger, she did what was best under the situation. As narrated by respondent court:

She stopped at a lighted place where there were people, to verify whether she had a flat tire and to
solicit help if needed. Having been told by the people present that her rear right tire was flat and that
she cannot reach her home she parked along the sidewalk, about 1 feet away, behind a Toyota Corona
Car.*20+ In fact, respondent court noted, Pfc. Felix Ramos, the investigator on the scene of the accident
confirmed that Valenzuelas car was parked very close to the sidewalk.*21+ The sketch which he
prepared after the incident showed Valenzuelas car partly straddling the sidewalk, clear and at a
convenient distance from motorists passing the right lane of Aurora Boulevard. This fact was itself
corroborated by the testimony of witness Rodriguez.[22]

Under the circumstances described, Valenzuela did exercise the standard reasonably dictated by the
emergency and could not be considered to have contributed to the unfortunate circumstances which
eventually led to the amputation of one of her lower extremities. The emergency which led her to park
her car on a sidewalk in Aurora Boulevard was not of her own making, and it was evident that she had
taken all reasonable precautions.

Obviously in the case at bench, the only negligence ascribable was the negligence of Li on the night of
the accident. Negligence, as it is commonly understood is conduct which creates an undue risk of harm
to others.*23+ It is the failure to observe that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury.[24] We stressed, in Corliss vs.
Manila Railroad Company,[25] that negligence is the want of care required by the circumstances.

The circumstances established by the evidence adduced in the court below plainly demonstrate that Li
was grossly negligent in driving his Mitsubishi Lancer. It bears emphasis that he was driving at a fast
speed at about 2:00 A.M. after a heavy downpour had settled into a drizzle rendering the street slippery.
There is ample testimonial evidence on record to show that he was under the influence of liquor. Under
these conditions, his chances of effectively dealing with changing conditions on the road were
significantly lessened. As Prosser and Keaton emphasize:

[U]nder present day traffic conditions, any driver of an automobile must be prepared for the sudden
appearance of obstacles and persons on the highway, and of other vehicles at intersections, such as one
who sees a child on the curb may be required to anticipate its sudden dash into the street, and his
failure to act properly when they appear may be found to amount to negligence. [26]

Lis obvious unpreparedness to cope with the situation confronting him on the night of the accident was
clearly of his own making.

We now come to the question of the liability of Alexander Commercial, Inc. Lis employer. In denying
liability on the part of Alexander Commercial, the respondent court held that:

There is no evidence, not even defendant Lis testimony, that the visit was in connection with official
matters. His functions as assistant manager sometimes required him to perform work outside the office
as he has to visit buyers and company clients, but he admitted that on the night of the accident he came
from BF Homes Paraaque he did not have business from the company (pp. 25-26, tsn, Sept. 23, 1991).
The use ofthe company car was partly required by the nature of his work, but the privilege of using it for
non-official business is a benefit, apparently referring to the fringe benefits attaching to his position.

Under the civil law, an employer is liable for the negligence of his employees in the discharge of their
respective duties, the basis of which liability is not respondeat superior, but the relationship of pater
familias, which theory bases the liability of the master ultimately on his own negligence and not on that
of his servant (Cuison v. Norton and Harrison Co., 55 Phil. 18). Before an employer may be held liable for
the negligence of his employee, the act or omission which caused damage must have occurred while an
employee was in the actual performance of his assigned tasks or duties (Francis High School vs. Court of
Appeals, 194 SCRA 341). In defining an employers liability for the acts done within the scope of the
employees assigned tasks, the Supreme Court has held that this includes any act done by an employee,
in furtherance of the interests of the employer or for the account of the employer at the time of the
infliction of the injury or damage (Filamer Christian Institute vs. Intermediate Appellate Court, 212 SCRA
637). An employer is expected to impose upon its employees the necessary discipline called for in the
performance of any act indispensable to the business and beneficial to their employer (at p. 645).

In light of the foregoing, We are unable to sustain the trial courts finding that since defendant Li was
authorized by the company to use the company car either officially or socially or even bring it home, he
can be considered as using the company car in the service of his employer or on the occasion of his
functions. Driving the company car was not among his functions as assistant manager; using it for non-
official purposes would appear to be a fringe benefit, one of the perks attached to his position. But to
impose liability upon the employer under Article 2180 of the Civil Code, earlier quoted, there must be a
showing that the damage was caused by their employees in the service of the employer or on the
occasion of their functions. There is no evidence that Richard Li was at the time of the accident
performing any act in furtherance of the companys business or its interests, or at least for its benefit.
The imposition of solidary liability against defendant Alexander Commercial Corporation must therefore
fail.[27]

We agree with the respondent court that the relationship in question is not based on the principle of
respondeat superior, which holds the master liable for acts of the servant, but that of pater familias, in
which the liability ultimately falls upon the employer, for his failure to exercise the diligence of a good
father of the family in the selection and supervision of his employees. It is up to this point, however, that
our agreement with the respondent court ends. Utilizing the bonus pater familias standard expressed in
Article 2180 of the Civil Code,*28+ we are of the opinion that Lis employer, Alexander Commercial, Inc.
is jointly and solidarily liable for the damage caused by the accident of June 24, 1990.

First, the case of St. Francis High School vs. Court of Appeals[29] upon which respondent court has
placed undue reliance, dealt with the subject of a school and its teachers supervision of students during
an extracurricular activity. These cases now fall under the provision on special parental authority found
in Art. 218 of the Family Code which generally encompasses all authorized school activities, whether
inside or outside school premises.

Second, the employers primary liability under the concept of pater familias embodied by Art. 2180 (in
relation to Art. 2176) of the Civil Code is quasi-delictual or tortious in character. His liability is relieved on
a showing that he exercised the diligence of a good father of the family in the selection and supervision
of its employees. Once evidence is introduced showing that the employer exercised the required
amount of care in selecting its employees, half of the employers burden is overcome. The question of
diligent supervision, however, depends on the circumstances of employment.

Ordinarily, evidence demonstrating that the employer has exercised diligent supervision of its employee
during the performance of the latters assigned tasks would be enough to relieve him of the liability
imposed by Article 2180 in relation to Article 2176 of the Civil Code. The employer is not expected to
exercise supervision over either the employees private activities or during the performance of tasks
either unsanctioned by the former or unrelated to the employees tasks. The case at bench presents a
situation of a different character, involving a practice utilized by large companies with either their
employees of managerial rank or their representatives.

It is customary for large companies to provide certain classes of their employees with courtesy vehicles.
These company cars are either wholly owned and maintained by the company itself or are subject to
various plans through which employees eventually acquire their vehicles after a given period of service,
or after paying a token amount. Many companies provide liberal car plans to enable their managerial
or other employees of rank to purchase cars, which, given the cost of vehicles these days, they would
not otherwise be able to purchase on their own.

Under the first example, the company actually owns and maintains the car up to the point of turnover of
ownership to the employee; in the second example, the car is really owned and maintained by the
employee himself. In furnishing vehicles to such employees, are companies totally absolved of
responsibility when an accident involving a company-issued car occurs during private use after normal
office hours?

Most pharmaceutical companies, for instance, which provide cars under the first plan, require rigorous
tests of road worthiness from their agents prior to turning over the car (subject of company
maintenance) to their representatives. In other words, like a good father of a family, they entrust the
company vehicle only after they are satisfied that the employee to whom the car has been given full use
of the said company car for company or private purposes will not be a threat or menace to himself, the
company or to others. When a company gives full use and enjoyment of a company car to its employee,
it in effect guarantees that it is, like every good father, satisfied that its employee will use the privilege
reasonably and responsively.

In the ordinary course of business, not all company employees are given the privilege of using a
company-issued car. For large companies other than those cited in the example of the preceding
paragraph, the privilege serves important business purposes either related to the image of success an
entity intends to present to its clients and to the public in general, or for practical and utilitarian reasons
- to enable its managerial and other employees of rank or its sales agents to reach clients conveniently.
In most cases, providing a company car serves both purposes. Since important business transactions and
decisions may occur at all hours in all sorts of situations and under all kinds of guises, the provision for
the unlimited use of a company car therefore principally serves the business and goodwill of a company
and only incidentally the private purposes of the individual who actually uses the car, the managerial
employee or company sales agent. As such, in providing for a company car for business use and/or for
the purpose of furthering the companys image, a company owes a responsibility to the public to see to
it that the managerial or other employees to whom it entrusts virtually unlimited use of a company
issued car are able to use the company issue capably and responsibly.

In the instant case, Li was an Assistant Manager of Alexander Commercial, Inc. In his testimony before
the trial court, he admitted that his functions as Assistant Manager did not require him to scrupulously
keep normal office hours as he was required quite often to perform work outside the office, visiting
prospective buyers and contacting and meeting with company clients.[30] These meetings, clearly, were
not strictly confined to routine hours because, as a managerial employee tasked with the job of
representing his company with its clients, meetings with clients were both social as well as work-related
functions. The service car assigned to Li by Alexander Commercial, Inc. therefore enabled both Li - as
well as the corporation - to put up the front of a highly successful entity, increasing the latters goodwill
before its clientele. It also facilitated meeting between Li and its clients by providing the former with a
convenient mode of travel.

Moreover, Lis claim that he happened to be on the road on the night of the accident because he was
coming from a social visit with an officemate in Paraaque was a bare allegation which was never
corroborated in the court below. It was obviously self-serving. Assuming he really came from his
officemates place, the same could give rise to speculation that he and his officemate had just been from
a work-related function, or they were together to discuss sales and other work related strategies.

In fine, Alexander Commercial, Inc. has not demonstrated, to our satisfaction, that it exercised the care
and diligence of a good father of the family in entrusting its company car to Li. No allegations were
made as to whether or not the company took the steps necessary to determine or ascertain the driving
proficiency and history of Li, to whom it gave full and unlimited use of a company car.[31] Not having
been able to overcome the burden of demonstrating that it should be absolved of liability for entrusting
its company car to Li, said company, based on the principle of bonus pater familias, ought to be jointly
and severally liable with the former for the injuries sustained by Ma. Lourdes Valenzuela during the
accident.

Finally, we find no reason to overturn the amount of damages awarded by the respondent court, except
as to the amount of moral damages. In the case of moral damages, while the said damages are not
intended to enrich the plaintiff at the expense of a defendant, the award should nonetheless be
commensurate to the suffering inflicted. In the instant case we are of the opinion that the reduction in
moral damages from an amount of P 1,000,000.00 to P500,000.00 by the Court of Appeals was not
justified considering the nature of the resulting damage and the predictable sequelae of the injury.

As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her left lower
extremity at the distal left thigh just above the knee. Because of this, Valenzuela will forever be deprived
of the full ambulatory functions of her left extremity, even with the use of state of the art prosthetic
technology. Well beyond the period of hospitalization (which was paid for by Li), she will be required to
undergo adjustments in her prosthetic devise due to the shrinkage of the stump from the process of
healing.

These adjustments entail costs, prosthetic replacements and months of physical and occupational
rehabilitation and therapy. During her lifetime, the prosthetic devise will have to be replaced and re-
adjusted to changes in the size of her lower limb effected by the biological changes of middle-age,
menopause and aging. Assuming she reaches menopause, for example, the prosthetic will have to be
adjusted to respond to the changes in bone resulting from a precipitate decrease in calcium levels
observed in the bones of all post-menopausal women. In other words, the damage done to her would
not only be permanent and lasting, it would also be permanently changing and adjusting to the
physiologic changes which her body would normally undergo through the years. The replacements,
changes, and adjustments will require corresponding adjustive physical and occupational therapy. All of
these adjustments, it has been documented, are painful.

The foregoing discussion does not even scratch the surface of the nature of the resulting damage
because it would be highly speculative to estimate the amount of psychological pain, damage and injury
which goes with the sudden severing of a vital portion of the human body. A prosthetic device, however
technologically advanced, will only allow a reasonable amount of functional restoration of the motor
functions of the lower limb. The sensory functions are forever lost. The resultant anxiety, sleeplessness,
psychological injury, mental and physical pain are inestimable.

As the amount of moral damages are subject to this Courts discretion, we are of the opinion that the
amount of P1,000,000.00 granted by the trial court is in greater accord with the extent and nature of the
injury -. physical and psychological - suffered by Valenzuela as a result of Lis grossly negligent driving of
his Mitsubishi Lancer in the early morning hours of the accident.

WHEREFORE, PREMISES CONSIDERED, the decision of the court of Appeals is modified with the effect of
REINSTATING the judgment of the Regional Trial Court.

SO ORDERED.

Padilla, Bellosillo, and Hermosisima, Jr., JJ., concur.
Vitug., J., see concurring opinion.

[G.R. No. 153591. February 23, 2004]

PEOPLE OF THE PHILIPPINES, appellee, vs. RENATO GARCIA y ROMANO, appellant.
D E C I S I O N
YNARES-SANTIAGO, J.:

Appellant Renato Garcia y Romano was charged with Murder before the Regional Trial Court of Quezon
City, Branch 87, in Criminal Case No. Q-98-79961 in an Information[1] which reads:

That on or about the 22nd day of May, 1998, in Quezon City, Philippines, the said accused, being then
the driver and/or person in charge of an Isuzu Jitney bearing Plate No. NPJ-948 did then and there
unlawfully and feloniously drive, manage and operate the same along Zabarte Road in said City, in a
careless, reckless, negligent and impudent manner, by then and there making the said vehicle run at a
speed greater than was reasonable and proper without taking the necessary precaution to avoid
accident to person/s of the traffic at said place at the time, causing as consequence of his said
carelessness, negligence, impudence and lack of precaution, the said vehicle so driven, managed and
operated by him to hit and bump, as in fact it hit and bumped Sanily Billon y Trinidad, a pedestrian,
thereafter, with intent to kill, qualified by evident premeditation and use of motor vehicle, did then and
there willfully, unlawfully and feloniously ran said vehicle over the victim thereby causing her serious
and mortal wounds which were the direct and immediate cause of her untimely death, to the damage
and prejudice of the heirs of the said Sanily Billon y Trinidad.

CONTRARY TO LAW.

On arraignment, appellant pleaded not guilty. Thereafter, trial on the merits followed.

The prosecution alleged that at around 12:00 noon of May 22, 1998, Bentley Billon and his younger
sister, Sanily, boarded a passenger jeepney on their way to Sacred Heart School in Barangay
Kaligayahan, Novaliches, Quezon City to attend remedial classes. They alighted on Zabarte Road in front
of the school. Bentley crossed the street and waited on the center island for Sanily to cross. While Sanily
was crossing the street, a passenger jeepney driven by appellant, coming from Camarin and heading
towards Quirino Highway, hit her on the left side of the body. Sanily fell and was thrown to the ground
a meter away from the vehicle. The jeepney stopped. But as Bentley was running towards his sister, the
vehicle suddenly accelerated with its front tire running over Sanilys stomach. Bentley and appellant
pulled Sanily, who was writhing in excruciating pain, from underneath the vehicle and brought her to the
Sta. Lucia Hospital but due to lack of medical facilities, she was transferred to the Quezon City General
Hospital (QCGH) where she was operated. However, she died four days later.

Dr. Emmanuel Reyes,[2] Medico-legal of the Southern Police District, Fort Bonifacio, testified that the
attending physician, Dr. Santiago C. Sagad, noted lacerations in Sanilys liver and spleen which was
caused by a blunt/strong force on the victims body, resulting to her death due to internal bleeding. He
opined that the blunt force may have also caused lacerations in the victims intestine and the abrasions
on the arm, from the elbow to the shoulder could be the result of the skins contact with a rough
surface.

Appellant admitted having ran over the victim, but claimed that it was an accident. He narrated that at
around noon on May 22, 1998, while driving his passenger jeepney along Zabarte Road, he saw a boy
crossing the street followed by the victim. While the vehicle was running, he heard a thud. He
immediately applied his breaks and alighted to check what it was. He saw to his horror a girl sprawled
underneath his vehicle between the front and the rear tires. He and the victims brother rushed the girl
to the Sta. Lucia Hospital, but they transferred her to the Quezon City General Hospital which has better
facilities. A week later, he learned that the victim died.

On May 2, 2002, the trial court rendered judgment,[3] finding appellant guilty beyond reasonable doubt
of Murder and sentenced him to suffer the penalty of reclusion perpetua, the dispositive portion of
which reads:[4]

WHEREFORE, judgment is hereby rendered finding accused guilty beyond reasonable doubt of the crime
of Murder, for which, said RENATO GARCIA y ROMANO is hereby sentenced to suffer the penalty of
reclusion perpetua and to indemnify the heirs of Sanily Billon the sum of One Hundred and Twenty
Three Thousand and Five Hundred Pesos (P123,500.00) as actual damages including attorneys fees;
Fifty Thousand Pesos (P50,000.00) as civil indemnity for the death of Sanily and Five Hundred Thousand
Pesos (P500,000.00) as moral damages.

Cost against the accused.

SO ORDERED.

The trial court held that appellant is guilty of murder qualified by evident premeditation because he
deliberately ran over the slumped body of the victim.

Hence this appeal, raising the following errors, to wit:

I

THE TRIAL COURT GRAVELY ERRED IN APPRECIATING AGAINST ACCUSED-APPELLANT THE QUALIFYING
CIRCUMSTANCE OF EVIDENT PREMEDITAION

II

THE TRIAL COURT GRAVELY ERRED IN FINDING ACCUSED GUILTY BEYOND REASONABLE BEYOND
REASONABLE DOUBT OF THE CRIME OF MURDER AS CHARGED.

The issue to be resolved is whether or not appellant is guilty of murder or reckless imprudence resulting
in homicide.

Appellant argues that the trial court gravely erred in finding that the qualifying circumstance of evident
premeditation attended the commission of the offense. He contends that the mere allegation by the
prosecution that he bumped the victim and intentionally ran over her body is not sufficient to establish
evident premeditation. He claims that he did not intentionally run over the victim when his vehicle
bumped her because he was rattled and was no longer aware of what he was doing.

We find from a careful review of the facts on record that the unfortunate incident was more the result
of reckless imprudence than of malicious intent. Therefore, the trial court erred in convicting appellant
of the crime of murder qualified by evident premeditation.

The elements of evident premeditation are: (1) a previous decision by the appellant to commit the
crime; (2) an overt act/acts manifestly indicating that the appellant clung to his determination; and (3) a
lapse of time between the decision to commit the crime and its actual execution sufficient to allow
appellant to reflect upon the consequences of his acts.

The victims brother, Bentley, testified that the vehicle stopped after it bumped the victim, but it moved
forward and ran over the prostrate body of her sister. From his narration, we find that no sufficient
time elapsed for appellant to decide to commit the crime and reflect on its consequences. Moreover,
there was no showing that appellant performed other overt acts to show that he was determined to
commit murder. The essence of evident premeditation is that the execution of the criminal act must be
preceded by cool thought and reflection upon the resolution to carry out the criminal intent, during the
space of time sufficient to arrive at a calm judgment.[5] These circumstances do not obtain in the case at
bar.

Appellant could have reacted on instinct and relied on sheer impulse to respond to the situation at
hand. While it is possible that appellant deliberately ran over the victim, it is equally possible, if not
more probable, that the vehicle moved forward because appellant failed to control its momentum.
Indeed, this is more consistent with the unrebutted evidence that the jeepney, which had no handbrake,
was moving fast and that appellant became confused when the accident occurred. Furthermore,
appellants act of bringing the victim to the hospital despite numerous opportunities to flee from the
scene is more compatible with a state of mind devoid of criminal intent.

In view of the gravity of the offense involved, the trial court should have been more circumspect in
weighing the evidence of both parties. Our own evaluation of the evidence reveals that appellant had
no intention to kill the victim. As such, he cannot be held liable for an intentional felony. All reasonable
doubt intended to demonstrate negligence, and not criminal intent, must be resolved in favor of
appellant.[6]

Thus, appellant is guilty of reckless imprudence resulting in homicide defined in Article 365 of the
Revised Penal Code, as amended. In U.S. v. Maleza,[7] we explained the rationale behind this crime as
follows:

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

In intentional crimes, the act itself is punished; in negligence or imprudence, what is principally
penalized is the mental attitude or condition behind the act, the dangerous recklessness, lack of care or
foresight, the imprudencia punible.[8] Article 365 of the Revised Penal Code, as amended, states that
reckless imprudence consists in voluntarily, but without malice, doing or failing to do an act from which
material damage results by reason of inexcusable lack of precaution on the part of the person
performing such act. Compared to intentional felonies, such as homicide or murder, what takes the
place of the element of malice or intention to commit a wrong or evil is the failure of the offender to
take precautions due to lack of skill taking into account his employment, or occupation, degree of
intelligence, physical condition, and other circumstances regarding persons, time, and place.[9]

Appellant showed an inexcusable lack of precaution when he disregarded a traffic sign cautioning
motorists to slow down[10] and drove his vehicle in full speed despite being aware that he was
traversing a school zone and pedestrians were crossing the street. He should have observed due
diligence of a reasonably prudent man by slackening his speed and proceeding cautiously while passing
the area.

The imposable penalty, under Art. 365 (2)[11] of the Revised Penal Code, homicide resulting from
reckless imprudence in the use of motor vehicle is prision correccional in its medium and maximum
periods, which ranges from two (2) years, four (4) months and one (1) day to six (6) years. Under Article
65 of the Revised Penal Code, the penalty shall be divided into three equal portions of time, each of
which shall form one period. There being no aggravating or mitigating circumstance, the proper penalty
shall be within the medium period, which is three (3) years, six (6) months and twenty-one (21) days to
four (4) years, nine (9) months and ten (10) days. Applying the provisions of the Indeterminate Sentence
Law, appellant is entitled to a minimum term to be taken from the penalty next lower in degree, which
is arresto mayor, maximum to prision correccional, minimum. Accordingly, appellant should be
sentenced to an indeterminate penalty of four (4) months and one (1) day of arresto mayor, as
minimum, to four (4) years and two (2) months of prision correccional, as maximum.[12]

The trial court correctly awarded P50,000.00 as civil indemnity. However, the award of moral damages
in the amount of P500,000.00 should be reduced to P50,000.00.[13] The award of P30,000.00 as actual
damages must likewise be modified. The mother of the victim presented receipts that they, in fact,
spent P58,257.90[14] for hospital bills and funeral expenses. The fact that she received P40,000.00 from
insurance will not affect the award of actual damages.[15] The award of exemplary damages is deleted
for lack of factual basis.

WHEREFORE, in view of the foregoing, the Decision of the Regional Trial Court of Quezon City, Branch
87, in Civil Case No. Q-98-79961, convicting appellant of the crime of murder is REVERSED and SET
ASIDE. Appellant Renato Garcia y Romano is found guilty beyond reasonable doubt of the crime reckless
imprudence resulting in homicide, and he is sentenced to suffer an indeterminate prison term of four (4)
months and one (1) day of arresto mayor, as minimum, to four (4) years and two (2) months of prision
correccional, as maximum. Appellant is ordered to pay the heirs of the victim, P50,000.00 as civil
indemnity, P58,257.90 as actual damages and P50,000.00 as moral damages.

Costs de oficio.

SO ORDERED.

Davide, Jr., C.J. (Chairman), Panganiban, Carpio and Azcuna, JJ., concur.
G.R. No. 160795 June 27, 2008

CORINTHIAN GARDENS ASSOCIATION, INC., petitioner,
vs.
SPOUSES REYNALDO and MARIA LUISA TANJANGCO, and SPOUSES FRANK and TERESITA CUASO,
respondent.

D E C I S I O N

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure
seeking the reversal of the Court of Appeals (CA) Decision2 dated January 31, 2003 in CA-G.R. CV No.
43217, which reversed and set aside the Decision3 of the Regional Trial Court (RTC) of Quezon City,
dated March 30, 1993.

The Antecedents:

Respondents-spouses Reynaldo and Maria Luisa Tanjangco (the Tanjangcos) own Lots 68 and 69 covered
by Transfer Certificates of Title (TCT) No. 2422454 and 2829615 respectively, located at Corinthian
Gardens Subdivision, Quezon City, which is managed by petitioner Corinthian Gardens Association, Inc.
(Corinthian). On the other hand, respondents-spouses Frank and Teresita Cuaso (the Cuasos) own Lot 65
which is adjacent to the Tanjangcos lots.

Before the Cuasos constructed their house on Lot 65, a relocation survey was necessary. As Geodetic
Engineer Democrito De Dios (Engr. De Dios), operating under the business name D.M. De Dios Realty
and Surveying, conducted all the previous surveys for the subdivision's developer, Corinthian referred
Engr. De Dios to the Cuasos. Before, during and after the construction of the said house, Corinthian
conducted periodic ocular inspections in order to determine compliance with the approved plans
pursuant to the Manual of Rules and Regulations of Corinthian.6 Unfortunately, after the Cuasos
constructed their house employing the services of C.B. Paraz & Construction Co., Inc. (C.B. Paraz) as
builder, their perimeter fence encroached on the Tanjangcos Lot 69 by 87 square meters.

No amicable settlement was reached between the parties. Thus, the Tanjangcos demanded that the
Cuasos demolish the perimeter fence but the latter failed and refused, prompting the Tanjangcos to file
with the RTC a suit against the Cuasos for Recovery of Possession with Damages.7

Eventually, the Cuasos filed a Third-Party Complaint8 against Corinthian, C.B. Paraz and Engr. De Dios.
The Cuasos ascribed negligence to C.B. Paraz for its failure to ascertain the proper specifications of their
house, and to Engr. De Dios for his failure to undertake an accurate relocation survey, thereby, exposing
them to litigation. The Cuasos also faulted Corinthian for approving their relocation survey and building
plans without verifying their accuracy and in making representations as to Engr. De Dios' integrity and
competence. The Cuasos alleged that had Corinthian exercised diligence in performing its duty, they
would not have been involved in a boundary dispute with the Tanjangcos. Thus, the Cuasos opined that
Corinthian should also be held answerable for any damages that they might incur as a result of such
construction.

On March 30, 1993, the RTC rendered a Decision in favor of the Tanjangcos. It ruled that the Cuasos
perimeter wall encroached on the land of the Tanjangos by 87 square meters. It, however, ruled that the
Cuasos were builders in good faith, and gave the Tanjangcos the option to sell and the Cuasos the option
to buy the encroaching portion of the land, at a price to be agreed upon by the parties within sixty (60)
days from receipt of the said Decision. In the event that the Cuasos were unable and unwilling to
purchase the said portion, the perimeter wall should be demolished at the latters expense. The RTC also
ordered the Cuasos to pay monthly rentals of P2,000.00 commencing from the time of the filing of the
complaint. The RTC likewise held that C.B. Paraz was grossly negligent in not taking into account the
correct boundaries of Cuasos lot when it constructed the house. It, thus, ordered C.B. Paraz to pay
moral and exemplary damages as well as attorneys fees to the Tanjangcos and the Cuasos. The third-
party complaint against Corinthian and Engr. De Dios, on the other hand, was dismissed for lack of cause
of action.

The Tanjangcos filed a Motion for Reconsideration9 of the said RTC Decision which the RTC, however,
denied in its Order10 dated June 28, 1993.

Dissatisfied with the RTC ruling, the Tanjangcos, the Cuasos, and C.B. Paraz all appealed to the CA.

On appeal, the CA reversed and set aside the RTC Decision. It held that the Cuasos acted in bad faith in
land-grabbing the 87 square meter-portion of Lot 69 as of April 5, 1989. Correlatively, the CA allowed
the Tanjangcos to exercise the rights granted under Articles 449, 450, 451 and 549 of the New Civil
Code, which include the right to demand the demolition of the offending perimeter wall after
reimbursing the Cuasos the necessary expenses for the preservation of the encroached area. The Cuasos
were ordered to pay monthly rentals of P10,000.00 for the use, enjoyment and occupancy of the lot
from 1989 up to the time they vacate the property considering the location and category of the same.
They were, likewise, ordered to pay the Tanjangcos P100,000.00, as moral damages, P50,000.00 as
exemplary damages, and P150,000.00 as attorneys fees. The CA also imposed six percent (6%) interest
per annum on all the awards. The Cuasos appeal against the Tanjangcos, on the other hand, was
dismissed for lack of merit. On the third-party complaints, Corinthian, C.B. Paraz and Engr. De Dios were
all found negligent in performing their respective duties and so they were ordered to contribute five
percent (5%) each, or a total of fifteen percent (15%) to all judgment sums and amounts that the Cuasos
shall eventually pay under the decision, also with interest of six percent (6%) per annum.

Only Corinthian filed a Motion for Reconsideration11 of the CA Decision within the 15-day reglementary
period. No motion for reconsideration was filed by the Cuasos, C.B. Paraz and/or Engr. De Dios.

About six (6) months later, or on August 12, 2003, the Cuasos filed a Comment/Manifestation12 praying
that they be allowed to adopt Corinthians Motion for Reconsideration.

In its Resolution13 dated November 14, 2003, the CA denied Corinthians Motion for Reconsideration.

Hence, Corinthian filed the instant Petition for Review on Certiorari assailing the CA Decision and
Resolution, and impleading the Cuasos as one of the respondents being the third-party plaintiffs in the
RTC.

This Court gave due course to Corinthians petition and required the parties to submit their respective
memorandum.14 In compliance, the Cuasos submitted their Memorandum15 and Supplement to
Memorandum,16 which were both noted by this Court in its Resolutions dated January 10, 200517 and
February 2, 2005, 18 respectively.

In the meantime, the Tanjangcos moved for partial entry of judgment of the CA Decision which was
granted by the CA in its Resolution19 dated May 26, 2006, directing the issuance of an Entry of
Judgment and a Certification that its Decision dated January 31 2003 has become final and executory
with respect to the Cuasos, C.B. Paraz and Engr. De Dios for their failure to file an appeal assailing the
said Decision before this Court.

The Tanjangcos then moved for the execution of the judgment against the Cuasos, specifically the
demolition of the perimeter fence,20 which was also granted by the RTC in its Order21 dated December
18, 2006.

Other than the filing of an Opposition22 and a Motion for Reconsideration23 before the RTC, the Cuasos
prayed for the issuance of a temporary restraining order (TRO) and/or preliminary injunction before this
Court to enjoin the demolition of the perimeter fence. They averred that the premature demolition of
the alleged encroaching perimeter wall and other improvements will cause grave and irreparable
damage to them, because what is sought to be demolished is part of their residence. They claimed that
no amount of money will compensate for the damage they stand to suffer should any demolition
subsequently prove to be wrongful. They argued that before any execution can be carried out, it is
necessary to first determine whether or not Corinthian was negligent in approving the building plan and
whether or not it acted in good faith in doing so. Such determination, according to the Cuasos, will in
turn determine whether or not they were in good faith in constructing the house.24

The Tanjangcos opposed the Cuasos' application for TRO. They countered that the only pending matter
with this Court is the appeal by Corinthian; hence, the implementation of the January 31, 2003 Decision
of the CA against the Cuasos will not preempt the outcome of the said pending incidents. Also, any
action taken by this Court on Corinthians petition would not benefit the Cuasos for they did not appeal
the adverse decision against them. Accordingly, they cannot obtain affirmative relief from this Court by
reason or on account of the appeal taken by Corinthian. The appeal, they added, is personal to
Corinthian. Finally, they argued that the Cuasos are now estopped from questioning the enforcement of
the CA Decision since they issued a managers check to pay the money judgment.25

In this Court's Resolution dated July 18, 2007, we denied the Cuasos' application for TRO and/or writ of
preliminary injunction for lack of merit.

The denial was based on sound legal principles. It is axiomatic that to be entitled to the injunctive writ,
one must show that there exists a right to be protected which is directly threatened by the act sought to
be enjoined. Furthermore, there must be a showing that the invasion of the right is material and
substantial, that the right of complainant is clear and unmistakable, and that there is an urgent and
paramount necessity for the writ to issue in order to prevent serious damage.26

In the Cuasos case, their right to injunctive relief had not been clearly and unmistakably demonstrated.
They failed to show proof that there is material and substantial invasion of their right to warrant the
issuance of an injunctive writ. Indeed, the enforcement of the writ of execution, which would demolish
the Cuasos perimeter fence, is manifestly prejudicial to their interest. However, they possess no clear
and unmistakable legal right that merits protection through the writ of preliminary injunction.27 Their
right to maintain the said fence had been declared inferior to the Tanjangcos right to the demolition of
the fence, after the CA judgment had become final and executory as to the Cuasos.

It bears stressing that the Cuasos failed to appeal the ruling of the CA. This failure to contest the CA
decision before this Court was fatal to their cause. It had the effect of an admission that they indeed
acted in bad faith, as they accepted the CA ruling. The decision of the CA, therefore, became binding and
final as to them.28 As a matter of fact, the CA already issued a partial entry of judgment against the
Cuasos.

An injunction to stay a final and executory decision is unavailing except only after a showing that facts
and circumstances exist which would render execution unjust or inequitable, or that a change in the
situation of the parties occurred. Here, no such exception exists as shown by the facts earlier
narrated.29

While it is true that this Court noted the Memorandum and Supplemental Memorandum filed by the
Cuasos, such notation was made only insofar as Corinthian made them respondents in this petition. This
Court cannot grant to the Cuasos any affirmative relief as they did not file a petition questioning the CA
ruling. Consequently, the Decision of the CA holding that the Cuasos acted in bad faith and that the
perimeter fence may now be demolished cannot be put in issue by the Cuasos. It is a fundamental
principle that a party who does not appeal, or file a petition for certiorari, is not entitled to any
affirmative relief.30 An appellee who is not an appellant may assign errors in his brief where his purpose
is to maintain the judgment, but he cannot seek modification or reversal of the judgment or claim
affirmative relief unless he has also appealed.31 This applies to C.B. Paraz and Engr. De Dios who
likewise failed to assail the aforementioned CA Decision.

With this matter put to rest, we now go to the main issues raised by Corinthian, the sole petitioner in
this case, to wit:

a) Whether or not there is legal basis for the Court of Appeals to hold petitioner Corinthian Gardens
Association, Inc. liable to pay 5% of the judgment money to Sps. Tanjangco on account of the
encroachment made by Sps. Cuaso[; and]

b) Whether or not the Court of Appeals has legal basis to increase unilaterally and without proof the
amount prayed for in the Complaint, i.e., P2,000.00, as reasonable compensation for the use and
enjoyment of the portion of the lot encroached upon, to P10,000.00.32

Corinthian claims that the approval of the building plan of the Cuasos was not tainted with negligence as
it did not approve the survey relocation plan but merely the architectural, structural and sanitary plans
for Cuasos' house; that the purpose of the said approval is not to ensure that the house to be erected on
a particular lot is constructed within its boundaries but only to ensure compliance with the Manual of
Rules and Regulations; that while Corinthian conducts actual site inspections, the inspection and
approval of the building plans are limited to "table inspection" only; that the survey relocation plan was
never submitted for Corinthian's approval; that the acceptance of the builder's bond did not make
Corinthian automatically liable for the encroachment and for damages; and that Corinthian approved
the building plan with the good faith and due diligence required under the circumstances. It, thus,
concludes that it cannot be held liable to pay five

percent (5%) of the money judgment to the Tanjangcos on account of the encroachment made by the
Cuasos. Likewise, it finds no legal basis for the CA to unilaterally increase the amount of the adjudged
rent from P2,000.00 to P10,000.00 which was not prayed for by the Tanjangcos in their complaint and in
the absence of evidence adduced by the parties.33

On the other hand, the Tanjangcos stand by the ruling of the CA and opine that Corinthian was negligent
in approving the building plan of the Cuasos. They submit that Corinthian's claim that it merely conducts
"table inspections" of buildings further bolsters their argument that Corinthian was negligent in
conveniently and unilaterally restricting and limiting the coverage of its approval, contrary to its own
Manual of Rules and Regulations; that the acceptance of a builder's bond does not automatically make
Corinthian liable but the same affirms the fact that a homeowner can hold it liable for the consequences
of the approval of a building plan; and that Corinthian, by regularly demanding and accepting
membership dues, must be wary of its responsibility to protect the rights and interests of its members.
Lastly, the Tanjangcos contend that a court can take judicial notice of the general increase in the rentals
of real estate, as in this case, where the CA considered the value of their lot in the "posh-and-swank"
Corinthian Gardens Subdivision and the fact that they were deprived of it for almost two decades. The
Tanjangcos pray that this Court sustain the ruling of the CA.34

The instant case is obviously one for tort, as governed by Article 2176 of the Civil Code, which provides:

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.

In every tort case filed under this provision, 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.35

Undeniably, the perimeter fence of the Cuasos encroached on Lot 69 owned by the Tanjangcos by 87
square meters as duly found by both the RTC and the CA in accordance with the evidence on record. As
a result, the Tanjangcos suffered damage in having been deprived of the use of that portion of their lot
encroached upon. Thus, the primordial issue to be resolved in this case is whether Corinthian was
negligent under the circumstances and, if so, whether such negligence contributed to the injury suffered
by the Tanjangcos.

A negligent act is an inadvertent act; it may be merely carelessly done from a lack of ordinary prudence
and may be one which creates a situation involving an unreasonable risk to another because of the
expectable action of the other, a third person, an animal, or a force of nature. A negligent act is one
from which an ordinary prudent person in the actor's position, in the same or similar circumstances,
would foresee such an appreciable risk of harm to others as to cause him not to do the act or to do it in
a more careful manner.36

The test to determine the existence of negligence in a particular case may be stated as follows: Did the
defendant in committing the alleged negligent act use that reasonable care and caution which an
ordinary person would have used in the same situation? If not, then he is guilty of negligence. The law,
in effect, adopts the standard supplied by the imaginary conduct of the discreet paterfamilias in 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 a man of ordinary intelligence and prudence, and determines liability
according to that standard.37

By this test, we find Corinthian negligent.

While the issue of Corinthian's alleged negligence is factual in character,38 a review by this Court is
proper because the CA's factual findings differ from those of the RTC's.39 Thus, after a meticulous
review of the evidence on record, we hold that the CA committed no reversible error when it deviated
from the findings of fact of the RTC. The CA's findings and conclusions are substantiated by the evidence
on record and are more in accord with law and reason. Indeed, it is clear that Corinthian failed to
exercise the requisite diligence in insuring that the Cuasos abide by its Manual of Rules and Regulations,
thereby resulting in the encroachment on the Tanjangcos property.

We agree with the CA when it aptly held:

Corinthian cannot and should not be allowed to justify or excuse its negligence by claiming that its
approval of the Cuasos building plans was only limited to a so-called "table inspection;" and not actual
site measurement. To accept some such postulate is to put a premium on negligence. Corinthian was
not organized solely for the defendants Cuasos. It is also the subdivision of the plaintiffs-spouses
Tanjangcos - and of all others who have their dwelling units or abodes therein. Pertinently, its Manual of
Rules and Regulations stipulates in Section 3 thereof (under the heading Construction), thus:

A. Rules and Regulations

No new construction can be started unless the building plans are approved by the Association and the
appropriate Builders cash bond and pre-construction fees are paid. The Association will not allow the
entry of construction materials and process identification cards for workers if the above conditions are
not complied with. Likewise, all renovations, repairs, additions and improvements to a finished house
except electrical wiring, will have to be approved by the Association. Water service connection of a
homeowner who undertakes construction work without prior approval of the Association will be cut-off
in addition to the sanctions previously mentioned.

It goes without saying that this Manual of Rules and Regulations applies to all - or it does not apply at all.
To borrow a popular expression, what is sauce for the gander is sauce for the goose - or ought to be. To
put it matter-of-factly and bluntly, thus, its so-called "table inspection" approval of the Cuasos building
plans is no less of an approval, as approvals come and go. And since it is an approval tainted with
negligence, the necessary and inevitable consequences which law and justice attach to such negligence
must, as a matter of law and justice, also necessarily attach to Corinthian.

And then again third party defendant-appellee Corinthian Garden required the posting of a builders
cash bond (Exh. 5-Corinthian) from the defendants-appellants Cuasos and the third-party defendant C.B.
Paraz Construction to secure the performance of their undertaking. Surely, Corinthian does not imply
that while it may take the benefits from the Builders cash bond, it may, Pilate-like, wash its hands of any
responsibility or liability that would or might arise from the construction or building of the structure for
which the cash bond was in the first place posted. That is not only unjust and immoral, but downright
unchristian and iniquitous.

Under the same parity of reasoning, the payment by the appellants-Cuasos to the appellee Corinthian of
pre-construction and membership fees in the Association must necessarily entail the creation of certain
obligations on the part of Corinthian. For duties and responsibilities always go hand in hand with rights
and privileges. That is the law of life - and that is the law of every civilized society. It is an axiom of
equity that he who receives the benefits must share the burdens.40

By its Manual of Rules and Regulations, it is reasonable to assume that Corinthian, through its
representative, in the approval of building plans, and in the conduct of periodic inspections of on-going
construction projects within the subdivision, is responsible in insuring compliance with the approved
plans, inclusive of the construction of perimeter walls, which in this case is the subject of dispute
between the Tanjangcos and the Cuasos.41 It is not just or equitable to relieve Corinthian of any liability
when, by its very own rules, it imposes its authority over all its members to the end that "no new
construction can be started unless the plans are approved by the Association and the appropriate cash
bond and pre-construction fees are paid." Moreover, Corinthian can impose sanctions for violating these
rules. Thus, the proposition that the inspection is merely a "table inspection" and, therefore, should
exempt Corinthian from liability, is unacceptable. After all, if the supposed inspection is merely a "table
inspection" and the approval granted to every member is a mere formality, then the purpose of the
rules would be defeated. Compliance therewith would not be mandatory, and sanctions imposed for
violations could be disregarded. Corinthian's imprimatur on the construction of the Cuasos' perimeter
wall over the property of the Tanjangcos assured the Cuasos that everything was in order.

In sum, Corinthians failure to prevent the encroachment of the Cuasos perimeter wall into Tanjangcos
property despite the inspection conducted constitutes negligence and, at the very least, contributed
to the injury suffered by the Tanjangcos.

On the second issue, our ruling in Spouses Badillo v. Tayag42 is instructive:

Citing Sia v. Court of Appeals [272 SCRA 141, May 5, 1997], petitioners argue that the MTC may take
judicial notice of the reasonable rental or the general price increase of land in order to determine the
amount of rent that may be awarded to them. In that case, however, this Court relied on the CA's
factual findings, which were based on the evidence presented before the trial court. In determining
reasonable rent,

the RTC therein took account of the following factors: 1) the realty assessment of the land, 2) the
increase in realty taxes, and 3) the prevailing rate of rentals in the vicinity. Clearly, the trial court relied,
not on mere judicial notice, but on the evidence presented before it.

Indeed, courts may fix the reasonable amount of rent for the use and occupation of a disputed property.
However, petitioners herein erred in assuming that courts, in determining the amount of rent, could
simply rely on their own appreciation of land values without considering any evidence. As we have said
earlier, a court may fix the reasonable amount of rent, but it must still base its action on the evidence
adduced by the parties.

In Herrera v. Bollos [G.R. No. 138258, January 18, 2002], the trial court awarded rent to the defendants
in a forcible entry case. Reversing the RTC, this Court declared that the reasonable amount of rent could
be determined not by mere judicial notice, but by supporting evidence:

x x x A court cannot take judicial notice of a factual matter in controversy. The court may take judicial
notice of matters of public knowledge, or which are capable of unquestionable demonstration, or ought
to be known to judges because of their judicial functions. Before taking such judicial notice, the court
must "allow the parties to be heard thereon." Hence, there can be no judicial notice on the rental value
of the premises in question without supporting evidence.

Truly, mere judicial notice is inadequate, because evidence is required for a court to determine the
proper rental value. But contrary to Corinthian's arguments, both the RTC and the CA found that indeed
rent was due the Tanjangcos because they were deprived of possession and use of their property. This
uniform factual finding of the RTC and the CA was based on the evidence presented below. Moreover, in
Spouses Catungal v. Hao,43 we considered the increase in the award of rentals as reasonable given the
particular circumstances of each case. We noted therein that the respondent denied the petitioners the
benefits, including rightful possession, of their property for almost a decade.

Similarly, in the instant case, the Tanjangcos were deprived of possession and use of their property for
more than two decades through no fault of their own. Thus, we find no cogent reason to disturb the
monthly rental fixed by the CA.

All told, the CA committed no reversible error.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED. Costs against
petitioner.

SO ORDERED.

G.R. No. L-10126 October 22, 1957

SALUD VILLANUEVA VDA. DE BATACLAN and the minors NORMA, LUZVIMINDA, ELENITA, OSCAR and
ALFREDO BATACLAN, represented by their Natural guardian, SALUD VILLANUEVA VDA. DE BATACLAN,
plaintiffs-appellants,
vs.
MARIANO MEDINA, defendant-appellant.

Lope E. Adriano, Emmanuel Andamo and Jose R. Francisco for plaintiffs-appellants.
Fortunato Jose for defendant and appellant.

MONTEMAYOR, J.:

Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation, operated by its
owner defendant Mariano Medina under a certificate of public convenience, left the town of Amadeo,
Cavite, on its way to Pasay City, driven by its regular chauffeur, Conrado Saylon. There were about
eighteen passengers, including the driver and conductor. Among the passengers were Juan Bataclan,
seated beside and to the right of the driver, Felipe Lara, sated to the right of Bataclan, another
passenger apparently from the Visayan Islands whom the witnesses just called Visaya, apparently not
knowing his name, seated in the left side of the driver, and a woman named Natalia Villanueva, seated
just behind the four last mentioned. At about 2:00 o'clock that same morning, while the bus was running
within the jurisdiction of Imus, Cavite, one of the front tires burst and the vehicle began to zig-zag until it
fell into a canal or ditch on the right side of the road and turned turtle. Some of the passengers managed
to leave the bus the best way they could, others had to be helped or pulled out, while the three
passengers seated beside the driver, named Bataclan, Lara and the Visayan and the woman behind them
named Natalia Villanueva, could not get out of the overturned bus. Some of the passengers, after they
had clambered up to the road, heard groans and moans from inside the bus, particularly, shouts for help
from Bataclan and Lara, who said they could not get out of the bus. There is nothing in the evidence to
show whether or not the passengers already free from the wreck, including the driver and the
conductor, made any attempt to pull out or extricate and rescue the four passengers trapped inside the
vehicle, but calls or shouts for help were made to the houses in the neighborhood. After half an hour,
came about ten men, one of them carrying a lighted torch made of bamboo with a wick on one end,
evidently fueled with petroleum. These men presumably approach the overturned bus, and almost
immediately, a fierce fire started, burning and all but consuming the bus, including the four passengers
trapped inside it. It would appear that as the bus overturned, gasoline began to leak and escape from
the gasoline tank on the side of the chassis, spreading over and permeating the body of the bus and the
ground under and around it, and that the lighted torch brought by one of the men who answered the
call for help set it on fire.

That same day, the charred bodies of the four deemed passengers inside the bus were removed and
duly identified that of Juan Bataclan. By reason of his death, his widow, Salud Villanueva, in her name
and in behalf of her five minor children, brought the present suit to recover from Mariano Medina
compensatory, moral, and exemplary damages and attorney's fees in the total amount of P87,150. After
trial, the Court of First Instance of Cavite awarded P1,000 to the plaintiffs plus P600 as attorney's fee,
plus P100, the value of the merchandise being carried by Bataclan to Pasay City for sale and which was
lost in the fire. The plaintiffs and the defendants appealed the decision to the Court of Appeals, but the
latter endorsed the appeal to us because of the value involved in the claim in the complaint.

Our new Civil Code amply provides for the responsibility of common carrier to its passengers and their
goods. For purposes of reference, we are reproducing the pertinent codal provisions:

ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735,
and 1745, Nos. 5, 6, and 7, while the extra ordinary diligence for the safety of the passengers is further
set forth in articles 1755 and 1756.

ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.

ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755

ART. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence
or willful acts of the former's employees, although such employees may have acted beyond the scope of
their authority or in violation of the order of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of a
good father of a family in the selection and supervision of their employees.

ART. 1763. A common carrier responsible for injuries suffered by a passenger on account of the willful
acts or negligence of other passengers or of strangers, if the common carrier's employees through the
exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission.

We agree with the trial court that the case involves a breach of contract of transportation for hire, the
Medina Transportation having undertaken to carry Bataclan safely to his destination, Pasay City. We also
agree with the trial court that there was negligence on the part of the defendant, through his agent, the
driver Saylon. There is evidence to show that at the time of the blow out, the bus was speeding, as
testified to by one of the passengers, and as shown by the fact that according to the testimony of the
witnesses, including that of the defense, from the point where one of the front tires burst up to the
canal where the bus overturned after zig-zaging, there was a distance of about 150 meters. The
chauffeur, after the blow-out, must have applied the brakes in order to stop the bus, but because of the
velocity at which the bus must have been running, its momentum carried it over a distance of 150
meters before it fell into the canal and turned turtle.

There is no question that under the circumstances, the defendant carrier is liable. The only question is to
what degree. The trial court was of the opinion that the proximate cause of the death of Bataclan was
not the overturning of the bus, but rather, the fire that burned the bus, including himself and his co-
passengers who were unable to leave it; that at the time the fire started, Bataclan, though he must have
suffered physical injuries, perhaps serious, was still alive, and so damages were awarded, not for his
death, but for the physical injuries suffered by him. We disagree. A satisfactory definition of proximate
cause is found in Volume 38, pages 695-696 of American jurisprudence, cited by plaintiffs-appellants in
their brief. It is as follows:

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

It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely causing
him physical injuries, if through some event, unexpected and extraordinary, the overturned bus is set on
fire, say, by lightning, or if some highwaymen after looting the vehicle sets it on fire, and the passenger
is burned to death, one might still contend that the proximate cause of his death was the fire and not
the overturning of the vehicle. But in the present case under the circumstances obtaining in the same,
we do not hesitate to hold that the proximate cause was the overturning of the bus, this for the reason
that when the vehicle turned not only on its side but completely on its back, the leaking of the gasoline
from the tank was not unnatural or unexpected; that the coming of the men with a lighted torch was in
response to the call for help, made not only by the passengers, but most probably, by the driver and the
conductor themselves, and that because it was dark (about 2:30 in the morning), the rescuers had to
carry a light with them, and coming as they did from a rural area where lanterns and flashlights were not
available; and what was more natural than that said rescuers should innocently approach the vehicle to
extend the aid and effect the rescue requested from them. In other words, the coming of the men with
a torch was to be expected and was a natural sequence of the overturning of the bus, the trapping of
some of its passengers and the call for outside help. What is more, the burning of the bus can also in
part be attributed to the negligence of the carrier, through is driver and its conductor. According to the
witness, the driver and the conductor were on the road walking back and forth. They, or at least, the
driver should and must have known that in the position in which the overturned bus was, gasoline could
and must have leaked from the gasoline tank and soaked the area in and around the bus, this aside from
the fact that gasoline when spilled, specially over a large area, can be smelt and directed even from a
distance, and yet neither the driver nor the conductor would appear to have cautioned or taken steps to
warn the rescuers not to bring the lighted torch too near the bus. Said negligence on the part of the
agents of the carrier come under the codal provisions above-reproduced, particularly, Articles 1733,
1759 and 1763.

As regard the damages to which plaintiffs are entitled, considering the earning capacity of the deceased,
as well as the other elements entering into a damage award, we are satisfied that the amount of SIX
THOUSAND (P6,000) PESOS would constitute satisfactory compensation, this to include compensatory,
moral, and other damages. We also believe that plaintiffs are entitled to attorney's fees, and assessing
the legal services rendered by plaintiffs' attorneys not only in the trial court, but also in the course of the
appeal, and not losing sight of the able briefs prepared by them, the attorney's fees may well be fixed at
EIGHT HUNDRED (P800) PESOS for the loss of merchandise carried by the deceased in the bus, is
adequate and will not be disturbed.

There is one phase of this case which disturbs if it does not shock us. According to the evidence, one of
the passengers who, because of the injuries suffered by her, was hospitalized, and while in the hospital,
she was visited by the defendant Mariano Medina, and in the course of his visit, she overheard him
speaking to one of his bus inspectors, telling said inspector to have the tires of the bus changed
immediately because they were already old, and that as a matter of fact, he had been telling the driver
to change the said tires, but that the driver did not follow his instructions. If this be true, it goes to prove
that the driver had not been diligent and had not taken the necessary precautions to insure the safety of
his passengers. Had he changed the tires, specially those in front, with new ones, as he had been
instructed to do, probably, despite his speeding, as we have already stated, the blow out would not have
occurred. All in all, there is reason to believe that the driver operated and drove his vehicle negligently,
resulting in the death of four of his passengers, physical injuries to others, and the complete loss and
destruction of their goods, and yet the criminal case against him, on motion of the fiscal and with his
consent, was provisionally dismissed, because according to the fiscal, the witnesses on whose testimony
he was banking to support the complaint, either failed or appear or were reluctant to testify. But the
record of the case before us shows the several witnesses, passengers, in that bus, willingly and
unhesitatingly testified in court to the effect of the said driver was negligent. In the public interest the
prosecution of said erring driver should be pursued, this, not only as a matter of justice, but for the
promotion of the safety of passengers on public utility buses. Let a copy of this decision be furnished the
Department of Justice and the Provincial Fiscal of Cavite.

In view of the foregoing, with the modification that the damages awarded by the trial court are
increased from ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND (P6,000) PESOS, and from SIX
HUNDRED PESOS TO EIGHT HUNDRED (P800) PESOS, for the death of Bataclan and for the attorney's
fees, respectively, the decision appealed is from hereby affirmed, with costs.

Paras, C. J., Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia,
and Felix, JJ., concur.
G.R. No. L-13541 January 28, 1961

EDUARDO TUASON, plaintiff-appellant,
vs.
LUZON STEVEDORING; CO., INC. and JULIAN RAMOS, defendants-appellees.

M. H. de Joya for plaintiff-appellant.
E. R. Tiongson and H. San Luis for defendant-appellee.

GUTIERREZ DAVID, J.:

Early in the morning of April 13, 1953, Eduardo Tuason left Baguio City in a 1952 model Packard car, with
three passengers, namely, Olivia de Leon, Francisco de Leon and Manuel de Leon. He passed the Kennon
Road Checkpoint at 3:00 o'clock and winged on his way passing the National Toll Road, Camp 6 Toll
Gate, 24 minutes later. After paying the toll, he continued slashing through the early morning air so that
by 5: 00 o'clock of that same morning he arrived at a town in Tarlac. There he stopped at a gasoline
station to fill up his car's gasoline tank. This took about 15 to 20 minutes. Thereafter, he continued his
drive for Manila.

At about the same time Eduardo Tuason left Baguio City, Julian Ramos, an employee of the Luzon
Stevedoring Co., Inc., together with a mechanic, Graciano Bautista, and a laborer, Zoilo Tolentino, left
the company's compound at Guagua, Pampanga, driving one of its truck-trailers for Manaoag,
Pangasinan. They passed through the towns of Bacolor, San Fernando, Angeles, Mabalacat, of the
province of Pampanga. When they reached the municipality of Bamban, Tarlac, the truck developed
some engine trouble. The mechanic, Graciano Bautista, had to clean the carburetor and the gasoline
line, which took him about 25 to 30 minutes to finish. Afterwards, they proceeded on their way.

At around 5:10 o'clock that same morning at about 75 meters south of the bridge at barrio Cut-Cut of
the municipality of Capas, Tarlac, the Packard car driven by Eduardo Tuason and the truck-trailer driven
by Julian Ramos collided. As a result of the collision, Eduardo Tuason's left leg was pinned down by the
door of his car. After he was extricated from his seat, he was taken to the clinic of Dr. Pineda at Capas,
and later, on that same day, brought to the National Orthopedic Hospital in Manila. His companions in
the car, who were also injured were, likewise, taken to the clinic at Capas.

On February 22, 1956, or after almost three years from the date of the collision, Eduardo Tuason filed
with the Court of First Instance of Manila a complaint against the Luzon Stevedoring Co., Inc., and Julian
Ramos for the recovery of damages suffered by him as a result of the collision above referred to. The
complaint alleges, among other things, that plaintiff was driving at a moderate speed 35 to 40
kilometers per hour with headlights on, when the truck-trailer driven by the defendant Julian Ramos
struck his car; that the collision completely wrecked plaintiff's car and caused serious physical injuries to
him and his companions; and that defendant Julian Ramos was then driving recklessly and negligently at
a high rate of speed. Plaintiff, therefore, claims and prays for actual and compensatory damages in the
sum of P200,000, moral damages in the amount of P25,000, and exemplary or corrective damages in the
sum of P25,000, plus attorney's fees.

The defendants, in their separate answers, denied any liability for damages, alleging by way of special
defenses that the truck trailer driven by the defendant Julian Ramos was traveling at low-speed, with
lights on, along the right side of the road when it was hit by the Packard car driven by plaintiff recklessly
and negligently at a high speed; that after the accident, both plaintiff and defendant Julian Ramos were
charged criminally before the Justice of the Peace Court of Capas, Tarlac, and upon the case being
forwarded to the Court of First Instance of the same province, the information as against the defendant
Julian Ramos was dismissed; and that the collision was due to the fault and negligence of plaintiff as
defendant Julian Ramos exercised due care and diligence in the performance of his duties as driver of
the truck-trailer. The defendant company, in addition, alleged that it exercised the care and diligence of
a good father of a family in the selection and supervision of Julian Ramos as its driver.

At the trial, both parties presented testimonial and documentary evidence. Finding the evidence
adduced by plaintiff and his witnesses to he contradictory and unworthy of belief, and holding that
plaintiff was traveling at a very high speed and on the wrong side of the road, that it to say, on the left
lane facing south, while the truck-trailer driven by the defendant Julian Ramos was traveling at a
moderate speed and was almost at a stop before the collision, the trial court, on January 9, 1958,
rendered decision, the dispositive part of which reads:

"WHEREFORE, the court finds the plaintiff Eduardo Tuason, solely and wholly responsible for the
collision which occurred on April 13, 1953, subject matter of the present case, and absolves the
defendants Julian Ramos and Luzon Stevedoring Co., Inc., from any liability or responsibility in
connection therewith. The court hereby orders plaintiffs claims against the defendants dismissed with
costs against the plaintiff."

From this decision, the plaintiff appealed directly to this Court.

After going over the record, we find no reason for rejecting the findings of fact below, justifying the
dismissal of plaintiff's claim for damages. The issue being one of credibility, the question of which
testimony should be given more credence is best left to the trial judge, who had the advantage of
hearing the parties testify and of observing their demeanor on the witness stand.

Briefly stated, plaintiff's version is that while he was driving his new Packard car along the right lane of
the road, with lights on and blowing his horn, at a curve, about 75 meters south of the bridge in Barrio
Cut-Cut, of the municipality of Capas, Tarlac, his car collided with the truck-trailer of the Luzon
Stevedoring Company driven without any lights by defendant Julian Ramos; that the collision took place
at the middle of the road; that as a result thereof, the two vehicles became attached to and entangled
with one another; that the people who were attracted to the scene of the collision had to separate the
automobile from the truck-trailer before they could extricate plaintiff from the driver's seat of his car;
and that to separate the two vehicles the truck-trailer had to move backwards, with the use of its own
power, dragging the automobile, which after being separated from the truck-trailer, was also moved
backwards.

In support of his complaint, plaintiff himself testified. He contradicted himself, however, in some
particulars, admitted that he was in extreme pain after the collision and, indeed, must have been
unconscious so that he could not have observed the details of the accident. Considering the other
circumstances of the case, which shall hereafter be discussed, we think the trial court was justified in
resolving his testimony against him.

Manuel de Leon, one of plaintiff's companions in the car, in an effort to corroborate plaintiff's version
and theory of the case, also took the witness stand. The lower court, however, noted from his testimony
and demeanor that he was not at all clear about the special circumstances and important details of the
accident which an eyewitness would normally notice, recall and remember. He could not, for instance,
tell "who moved the trailer nor whether it was moved on its own power or pushed by the people
around; he could not even tell or recall on what part of the road the Packard car was. Moreover, this
witness could not even recall how wide Cut-Cut bridge is or whether two vehicles could meet and pass
each other, safely, over the bridge; he could, likewise, not recall whether there were shoulders and
ditches on both sides of the road at the scene of the collision." Explaining his unreliability as a witness,
the trial court made the following observations:

"In the mind of the court, this witness was in a state of shock and light-headed after he recovered
consciousness and, as he admitted that he was unconscious for 30 minutes after the collision, he could
not have seen anything that was done during his state of unconsciousness nor afterwards. The court is
convinced that Manuel de Leon was merely accommodating the plaintiff, his friend, when he testified
for the reason that he was neither clear nor positive as to his testimony."

Alberto Yandan, a resident of Barrio Cut-Cut, Capas, Tarlac, at the time of the accident, testifying for the
plaintiff, claims that he saw the collision. He declared, among other things, that he ordered the truck to
be moved backward; and that it took thirty minutes to take plaintiff out of the car. He disclaimed
knowledge, however, of the identity of the person who moved the truck. It also appears that he was
investigated by the police of Capas at 10:00 a.m. of the day of the collision in the presence of the chief
of police and the Justice of the Peace. In that investigation, which was later reduced to writing, sworn to
and signed by him before the Justice of the Peace, he declared contrary to his testimony in court
that he was in his house when he heard a crash; that he immediately went downstairs and found that
the crash was caused by a collision between a truck and a car; that the driver of the car was badly
injured; and its three occupants suffered minor injuries; that the car was wrecked while the truck was
only slightly damaged; and that he brought one of the injured to the clinic of Dr. Pineda at Capas. He
was asked three times in the course of the investigation whether or not he had anything more to say in
connection with the collision and in like number of times the answered, "no more, sir." For this reason,
the trial court found it difficult to believe his testimony and opines that his participation in the matter of
the collision was merely to bring one of the injured to the clinic of Dr. Pineda at Capas and nothing else.
We are inclined to agree with the lower court, for it has not been explained why he did not, at the time
he was investigated, tell the matters he testified to in court, when he admittedly was aware that he was
being investigated to bring out everything that he knew of the accident.

Pedro Mallari, another resident of Barrio Cut-Cut, Capas, likewise, testified for plaintiff. This witness
admitted on direct and cross-examination that he stayed at the scene of the accident only for five
minutes, yet he sought to convince the court of facts which could not have happened, and which he
could not have seen, during that period. Thus, he said that when he arrived at the scene of the collision,
He saw Alberto Yandan, carrying plaintiff Eduardo Tuason while the three car passengers were still
inside the automobile. This statement is contrary to the testimonies of plaintiff's other witnesses,
namely, Alberto Yandan and Manuel de Leon, who declared that, the last person taken out of the car
was plaintiff and that it took them some 30 minutes to extricate him from the driver's seat. Witness
Mallari also declared that plaintiff's left leg was pinned down by the left bumper of the truck and that
when the truck was moved back, the leg was still pinned by the bumper. If such were the case, plaintiff's
leg would have been crushed or severed and he would not now have possession and use of both legs.
Considering these contradictions and observing that the witness, while testifying, was restless, nervous
and uncomfortable and that he was shifting around and could not keep his eyes fixed, the trial court
entertained grave doubts concerning the veracity of his testimony. The lower court, we think, was
justified in doing so. Evidence, to be worthy of credit, must not only proceed from a credible source, but
must, in addition, be credible itself. And by this is meant that it shall be natural, reasonable and
probable as to make it easy to believe.

Examining further Pedro Mallari's testimony, we find that there is, indeed, good reason to believe this
witness was never at the scene of the collision. He stated that he returned from work around 12 noon to
take his lunch; that thereafter he went to the police station of Capas and when he peeped inside he saw
the police investigating Alberto Yandan; that he did not listen to the investigation but he knew that it
concerned the accident which occurred in Barrio Cut-Cut, Capas, that morning; that he did not volunteer
to testify nor made known his presence at the scene of the collision. His declarations are directly
contradicted by those of Alberto Yandan who testified that he was investigated at 10:00 a.m. and that
he (Mallari) was inside the police station and present during the investigation. And had Mallari really
been present then, whether inside or outside the police station, he would certainly have volunteered his
testimony, having taken the trouble of going to the police station at the town proper and knowing as he
did the subject matter of the police investigation. But he did not do this and instead admitted that he
testified in this case after he was approached by Alberto Yandan to do so for plaintiff.

Salvador Baun, chief of police of the municipality of Capas another witness for the plaintiff. The trial
court, however, from his demeanor on the witness stand and from the long delayed and often evasive
answers, he gave, was convinced that he was suppressing and hiding the true facts of the case. He
admitted that he conducted an investigation of the collision and he testified that in the course of that
investigation, he saw evidence that the Packard car driven by plaintiff swerved from the middle of the
road to the left lane facing south, thus hitting the truck-trailer. He made such statement in his official
report of the accident (Exh. "I"), and the proof of the swerving of the car as reported by him were the
skid marks of the tires of the car at the scene of the collision. The record also shows that it was on the
basis of his report that the criminal case for physical injuries and damage to property thru reckless
imprudence filed against both plaintiff and defendant Julian Ramos was dismissed as against the latter.
The dismissal was made upon motion of the Provincial Fiscal on the ground that "during a
reinvestigation of the case, and as can be seen from the sketch attached to the record prepared by the
Chief of Police of Capas, Tarlac, the driver of the truck-trailer, Julian Ramos, the accused, tried his best to
avoid the incident; that it is the other driver, Eduardo Tuason, who was at fault in causing the collision;
and that the prosecution has no evidence to sustain any criminal action against Julian Ramos." .

The evidence for the defendants, on the other hand, showed that the truck-trailer driven by Julian
Ramos covered the distance of 50.89 kilometers between Guagua, Pampanga, and Cut-Cut bridge,
Capas, Tarlac, in 2 hours and 10 minutes. Subtracting the 30 minutes consumed in fixing the engine
trouble that developed on the way, the traveling time was, therefore, 1 hour and 40 minutes. This
shows that the truck-trailer ran at an average speed of 30 kilometers per hour on the national highway
from Guagua, Pampanga, to Cut-Cut bridge, Capas, Tarlac. Upon the other hand, plaintiff drove his car
from Baguio City to Cut-Cut bridge in Capas, a distance of 144.22 kilometers, in 2 hours and 10 minutes.
Deducting the maximum of 20 minutes it took him to load up gasoline, that leaves a traveling time of 1
hour and 50 minutes. As correctly found by the court below, it is evident from the above facts, which are
not disputed, that plaintiff drove his car at great speed and in excess of the speed limits along the
national highway.

Plaintiff claims that the truck-trailer, which weighed 10 tons, was traveling at the rate of 60 kilometers
per hour when the collision occurred, but if such were the case, the car he was driving would have been
sent flying, or, at least, carried and pushed back by virtue of the truck's momentum and weight. There
were, however, no indications on the surface of the road at the scene of the collision showing that the
Packard car was carried and dragged by the truck-trailer. Indeed, none of the witnesses testified to this
fact. On the contrary, Salvador Baun, chief of police, and Jesus Baluyot, patrolman, both of Capas, and
other witnesses for the defendants testified that the skid marks present at the scene of the collision
were those made by the tires of the Packard car. No skid marks made by the tires of the truck-trailer
existed or were present at the scene of the collision.

The evidence for the defendants also showed that at the time of the collision, the truck-trailer was on
the right lane of the road facing north with the right front wheel of the truck on the shoulder of the road
about six inches from the ditch on the right side and that the Packard car was on the left lane of the
road going south towards Pampanga. These facts were testified to by the defendant Julian Ramos, his
mechanic, Graciano Bautista, Jesus Baluyot and Pagano Atienza, both members of the police force of
Capas, Mariano Nacpil, a farmer and civilian guard residing in Barrio Cut-Cut, and others. Policeman
Jesus Baluyot, at the time of the collision, drew a sketch (Exh. 1.A) showing the relative positions of the
vehicles, which piece of evidence became the basis of the chief of police's report but which he tried to
suppress at the trial of the case. Regarding the testimony of defendants' witnesses, the trial court said..

"The court has observed the conduct and demeanor of the witnesses, for the defendants, and noted
that they testified in a straight-forward manner indicating that they know the subject matter of their
testimonies and that they were testifying on facts and circumstances of their own personal knowledge.
Defendant Julian was lengthily cross-examined and there was no divergence in his, testimony. Likewise,
the mechanic, Graciano Bautista, was clear and explicit in his narration of facts. The witnesses for the
defendants, Jesus Baluyot and Paciano Atienza are members of the police force of the Municipality of
Capas and they testified on facts and circumstances surrounding the collision between the two vehicles,
which they gathered in the course of their official investigation. There is no reason for the court to
doubt the testimony of these police officers considering the official positions and the fact that they
testified on matters gathered in the performance of their official duties. Moreover, they submitted a
report of their investigation to their Chief of Police. Arturo Cabrera, another witness for the defendants
is a government employee who testified in regard to his own personal knowledge of the collision in
question. He stated that after viewing the scene of the collision and noting that the Packard car involved
therein was a hazard to traffic, he telephoned a report to his superior, the District Engineer of Tarlac
that he was able to talk to Mr. Epifanio Panopio, Maintenance Engineer who personally viewed the
scene of the collision; that after the investigation being conducted by the Police was through he caused
the Packard car to be removed upon the instruction of Engineer Panopio. Again, there is no reason for
the court to doubt the testimony of this witness. Mariano Nacpil is an old man and a farmer. His
demeanor in court was that of a witness testifying to the truth. As a matter of fact, Mariano Nacpil
signed a sworn statement, Exh. '8' before the Chief of Police and Justice of the Peace of Capas, Tarlac, on
the same day, April 13, 1953, when the collision occurred. His testimony during the trial conforms with
his sworn statement appearing on Exhibit '8'."

Plaintiff claims that the truck-trailer and the Packard car were linked together and in order to give room
to take plaintiff out of the car, the truck-trailer was moved back, on its own power, across the line at the
center of the road and stopped on the right lane facing north carrying the car along with it. The trial
court, however, after a close scrutiny of the evidence adduced, rejected the claim, defendant shaving
shown to its satisfaction that the truck's battery and front axle were damaged, the U-bolt broken, and
mudguard stuck to the left front wheel. The truck-trailer's weight of ten tons eliminated the possibility
of its having been pushed by the people gathered at the scene of the collision, so that the trial court
believed that it was the Packard car which was moved back about three feet in order to extricate
plaintiff from his seat, some persons stepping on the bumper of the automobile while others pushed it
away. The defendant Julian Ramos, whose testimony was found by the court to be credible and straight
forward, testified in this regard. This testimony of defendant Julian Ramos, contrary to plaintiff's claim,
does not necessarily contradict those of policemen Jesus Baluyot and Pagano Atienza, who declared that
the vehicles were not moved during their investigation. Apparently, the vehicles were disengaged
before the arrival of the aforenamed policeman, who had to come yet from the town proper. It would
certainly have been unnatural and cruel for the people who were there to have waited for them or other
authorities before doing anything, considering that plaintiff was painfully pinned by the door of his car
and could not be extricated without disconnecting the vehicles.

It might not be amiss to mention here that plaintiff's complaint was filed only after the lapse of almost
three years from the date of the accident. This, in itself, is indicative of the weakness of plaintiff's cause
of action. And considering the established fact that said plaintiff was really the proximate cause of the
accident, we find no valid reason to disturb the decision complained of denying his claim for damages.

IN VIEW OF THE FOREGOING, the decision appealed from is hereby affirmed, with costs against plaintiff-
appellant.

Bengzon, Bautista Angelo, Labrador, Concepcion, Reyes , J.B.L, Barrera, Paredes and Dizon, JJ., concur.
Padilla, J., took no part.


The Lawphil Project - Arellano Law Foundation

G.R. No. 72827 July 18, 1989

LUCIA EUROPA (Mother of Deceased Lucrecia Europa), petitioner,
vs.
HUNTER GARMENTS MFG. (PHIL.) INC. and INTERMEDIATE APPELLATE COURT, respondents.



PARAS, J.:

This is a petition for certiorari to annul the Court of Appeals decision which set aside the order of default
and judgment by default rendered by the Court of First Instance of Rizal Branch XIII in Civil Case No.
37848 for Damages.

The facts of the case are briefly as follows:

In 1973, the petitioner's daughter, Lucrecia Europa, was employed as sample maker by the private
respondent Hunter Garments Manufacturing (Philippines) Incorporated. Sometime during the course of
her employment, or on March 9, 1978, Lucrecia got electrocuted by the high speed sewing machine
which had been assigned to her by the private respondent.

Thus, on July 18, 1980, the petitioner filed an action for damages against private respondent based on
quasi-delict.

Summons, together with a copy of the complaint, was served on its production manager, Mr. Simplicio
A. Garcia.

No answer to the complaint was ever filed. Thus, private respondent was declared in default and the
petitioner was allowed to present evidence ex parte.

On April 8, 1981, the trial court rendered judgment, the dispositive portion of which reads;

WHEREFORE, the plaintiff having established her cause of action, judgment is rendered against the
defendant corporation ordering the latter to pay the plaintiff the following:

a) for the death of Lucrecia, the sum of P12,000.00;

b) for actual expenses for the wake, the funeral and burial expenses and other miscellaneous expenses,
the sum of P5,580.00;

c) for loss of income, the sum of P30,000.00;

d) for moral damages, the sum of P10,000.00;

e) for attorney's fees, the sum of P5,000.00; and pay the costs. (p. 39, Rollo)

Private respondent filed a motion for reconsideration of the aforesaid decision and a motion to admit
answer, alleging its failure to seasonably file an answer was due to the excusable negligence of Ms. Lilia
Jimenez, the production manager's secretary, who failed to forward the summons and the copy of the
complaint to the company president, despite instructions to do so by her superior. The trial court denied
both motions.

Thus, private respondent appealed to the Court of Appeals, assigning the following errors:

The Honorable Court, a quo, erred in not ruling that defendant-appellant's failure to seasonably file its
Answer was due to excusable negligence;

The Honorable Court, a quo, erred in declaring defendant-appellant in default and in allowing plaintiff-
appellee to present her evidence ex parte despite the fact that summons had not been properly served;
and

Assuming, arguendo, that the Honorable Court, a quo, had validly acquired jurisdiction over the person
of defendant-appellant, it erred in rendering a decision which is not supported by law and the facts of
the case. (p. 42, Rollo)

Finding that the trial court never acquired jurisdiction over the person of private respondent as
summons was improperly served (the production manager not being the same "manager" referred to in
Section 13 Rule 14 of the Revised Rules of Court for purposes of service of summons upon a domestic
private corporation), the Court of Appeals set aside the default order and judgment by default and
directed the trial court to conduct further proceedings for the adjudication of the case. (p. 22, Rollo)

The petitioner filed a motion for reconsideration of the aforesaid decision but the same was denied.

Hence, the instant petition for certiorari.

There is merit in this petition. Assuming arguendo that the court below originally did not acquire
jurisdiction over the private respondent, the latter certainly submitted to it when private respondent
filed a motion for reconsideration of the judgment by default and a motion to admit answer on the
ground of excusable negligence. Therefore, the lower court's denial of both motions is binding on
private respondent. (Soriano vs. Palacio, 12 SCRA 449).

Private respondent likewise appealed from the judgment by default, thus, We shall proceed to review
the evidence presented and the propriety of damages awarded by the lower court.

The evidence on record discloses that on March 9, 1978, Lucrecia Europa was electrocuted by the
sewing machine owned by private respondent. The autopsy conducted by Dr. Nieto M. Salvador
confirmed that Lucrecia died from "shock probably secondary to electrocution" (Annex "A" of the
complaint).

The facts and circumstances of the case point to the reasonableness of the damages awarded. There is
an express finding of gross negligence on the part of private respondent in the judgment of the lower
court, thus:

... There are at least two incidents, according to De la Cruz, where high speed sewing machines of the
defendant corporation were grounded. These incidents were brought to the attention of the
management of the defendant corporation. Apparently, nothing was done by way of checking these
grounded machines.

At one time, Fornoza claimed that when her machine was grounded and she complained about it, she
was told by the management to get out of there.' The defendant corporation does not employ a duly-
licensed electrical engineer but only has three (3) electricians whose services clearly proved inadequate
for maintaining the safety of the machines in the factory.

There is no indication that the management had ever shown any serious concern for the safety of those
operating said machines. As it was, the defendant corporation even tended to be apathetic to the plight
of its employees manning the factory sewing machines....

If the machines were frequently and regularly checked or properly maintained, the death of Lucrecia by
electrocution would surely not have come to pass, ... (p. 2, Decision).

In actions based on quasi-delict as in this case, all damages for the natural and probable consequences
of the act or omission complained of are recoverable. (Article 2202 of the New Civil Code).

WHEREFORE, the decision of the Court of Appeals is hereby set aside and the decision of the lower court
is hereby reinstated except that the indemnity for the death itself is increased to Thirty Thousand
(P30,000.00) Pesos.

SO ORDERED.

Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

G.R. No. L-57079 September 29, 1989

PHILIPPINE LONG DISTANCE TELEPHONE CO., INC., petitioner,
vs.
COURT OF APPEALS and SPOUSES ANTONIO ESTEBAN and GLORIA ESTEBAN, respondents.



REGALADO, J.:

This case had its inception in an action for damages instituted in the former Court of First Instance of
Negros Occidental 1 by private respondent spouses against petitioner Philippine Long Distance
Telephone Company (PLDT, for brevity) for the injuries they sustained in the evening of July 30, 1968
when their jeep ran over a mound of earth and fell into an open trench, an excavation allegedly
undertaken by PLDT for the installation of its underground conduit system. The complaint alleged that
respondent Antonio Esteban failed to notice the open trench which was left uncovered because of the
creeping darkness and the lack of any warning light or signs. As a result of the accident, respondent
Gloria Esteban allegedly sustained injuries on her arms, legs and face, leaving a permanent scar on her
cheek, while the respondent husband suffered cut lips. In addition, the windshield of the jeep was
shattered. 2

PLDT, in its answer, denies liability on the contention that the injuries sustained by respondent spouses
were the result of their own negligence and that the entity which should be held responsible, if at all, is
L.R. Barte and Company (Barte, for short), an independent contractor which undertook the construction
of the manhole and the conduit system. 3 Accordingly, PLDT filed a third-party complaint against Barte
alleging that, under the terms of their agreement, PLDT should in no manner be answerable for any
accident or injuries arising from the negligence or carelessness of Barte or any of its employees. 4 In
answer thereto, Barte claimed that it was not aware nor was it notified of the accident involving
respondent spouses and that it had complied with the terms of its contract with PLDT by installing the
necessary and appropriate standard signs in the vicinity of the work site, with barricades at both ends of
the excavation and with red lights at night along the excavated area to warn the traveling public of the
presence of excavations. 5

On October 1, 1974, the trial court rendered a decision in favor of private respondents, the decretal part
of which reads:

IN VIEW OF THE FOREGOING considerations the defendant Philippine Long Distance Telephone
Company is hereby ordered (A) to pay the plaintiff Gloria Esteban the sum of P20,000.00 as moral
damages and P5,000.00 exemplary damages; to plaintiff Antonio Esteban the sum of P2,000.00 as moral
damages and P500.00 as exemplary damages, with legal rate of interest from the date of the filing of the
complaint until fully paid. The defendant is hereby ordered to pay the plaintiff the sum of P3,000.00 as
attorney's fees.

(B) The third-party defendant is hereby ordered to reimburse whatever amount the defendant-third
party plaintiff has paid to the plaintiff. With costs against the defendant. 6

From this decision both PLDT and private respondents appealed, the latter appealing only as to the
amount of damages. Third-party defendant Barte did not appeal.

On September 25, 1979, the Special Second Division of the Court of Appeals rendered a decision in said
appealed case, with Justice Corazon Juliano Agrava as ponente, reversing the decision of the lower court
and dismissing the complaint of respondent spouses. It held that respondent Esteban spouses were
negligent and consequently absolved petitioner PLDT from the claim for damages. 7 A copy of this
decision was received by private respondents on October 10, 1979. 8 On October 25, 1979, said
respondents filed a motion for reconsideration dated October 24, 1979. 9 On January 24, 1980, the
Special Ninth Division of the Court of Appeals denied said motion for reconsideration. 10 This resolution
was received by respondent spouses on February 22, 1980. 11

On February 29, 1980, respondent Court of Appeals received private respondents' motion for leave of
court to file a second motion for reconsideration, dated February 27, 1980. 12 On March 11, 1980,
respondent court, in a resolution likewise penned by Justice Agrava, allowed respondents to file a
second motion for reconsideration, within ten (10) days from notice thereof. 13 Said resolution was
received by private respondents on April 1, 1980 but prior thereto, private respondents had already filed
their second motion for reconsideration on March 7, 1980. 14

On April 30,1980 petitioner PLDT filed an opposition to and/or motion to dismiss said second motion for
reconsideration. 15 The Court of Appeals, in view of the divergent opinions on the resolution of the
second motion for reconsideration, designated two additional justices to form a division of five. 16 On
September 3, 1980, said division of five promulgated its resolution, penned by Justice Mariano A. Zosa,
setting aside the decision dated September 25, 1979, as well as the resolution dated, January 24,1980,
and affirming in toto the decision of the lower court. 17

On September 19, 1980, petitioner PLDT filed a motion to set aside and/or for reconsideration of the
resolution of September 3, 1980, contending that the second motion for reconsideration of private
respondent spouses was filed out of time and that the decision of September 25, 1979 penned by
Justice Agrava was already final. It further submitted therein that the relationship of Barte and
petitioner PLDT should be viewed in the light of the contract between them and, under the independent
contractor rule, PLDT is not liable for the acts of an independent contractor. 18 On May 11, 1981,
respondent Court of Appeals promulgated its resolution denying said motion to set aside and/or for
reconsideration and affirming in toto the decision of the lower court dated October 1, 1974. 19

Coming to this Court on a petition for review on certiorari, petitioner assigns the following errors:

1. Respondent Court of Appeals erred in not denying private respondents' second motion for
reconsideration on the ground that the decision of the Special Second Division, dated September 25,
1979, and the resolution of the Special Ninth Division, dated January 24, 1980, are already final, and on
the additional ground that said second motion for reconsideration is pro forma.

2. Respondent court erred in reversing the aforesaid decision and resolution and in misapplying
the independent contractor rule in holding PLDT liable to respondent Esteban spouses.

A convenient resume of the relevant proceedings in the respondent court, as shown by the records and
admitted by both parties, may be graphically presented as follows:

(a) September 25, 1979, a decision was rendered by the Court of Appeals with Justice Agrava as
ponente;

(b) October 10, 1979, a copy of said decision was received by private respondents;

(c) October 25, 1979, a motion for reconsideration was filed by private respondents;

(d) January 24, 1980, a resolution was issued denying said motion for reconsideration;

(e) February 22, 1980, a copy of said denial resolution was received by private respondents;

(f) February 29, 1980, a motion for leave to file a second motion for reconsideration was filed by
private respondents

(g) March 7, 1980, a second motion for reconsideration was filed by private respondents;

(h) March 11, 1980, a resolution was issued allowing respondents to file a second motion for
reconsideration within ten (10) days from receipt; and

(i) September 3, 1980, a resolution was issued, penned by Justice Zosa, reversing the original
decision dated September 25, 1979 and setting aside the resolution dated January 24, 1980.

From the foregoing chronology, we are convinced that both the motion for leave to file a second motion
for reconsideration and, consequently, said second motion for reconsideration itself were filed out of
time.

Section 1, Rule 52 of the Rules of Court, which had procedural governance at the time, provided that a
second motion for reconsideration may be presented within fifteen (15) days from notice of the order or
judgment deducting the time in which the first motion has been pending. 20 Private respondents having
filed their first motion for reconsideration on the last day of the reglementary period of fifteen (15) days
within which to do so, they had only one (1) day from receipt of the order denying said motion to file,
with leave of court, a second motion for reconsideration. 21 In the present case, after their receipt on
February 22, 1980 of the resolution denying their first motion for reconsideration, private respondents
had two remedial options. On February 23, 1980, the remaining one (1) day of the aforesaid
reglementary period, they could have filed a motion for leave of court to file a second motion for
reconsideration, conceivably with a prayer for the extension of the period within which to do so. On the
other hand, they could have appealed through a petition for review on certiorari to this Court within
fifteen (15) days from February 23, 1980. 22 Instead, they filed a motion for leave to file a second
motion 'for reconsideration on February 29, 1980, and said second motion for reconsideration on March
7, 1980, both of which motions were by then time-barred.

Consequently, after the expiration on February 24, 1980 of the original fifteen (15) day period, the
running of which was suspended during the pendency of the first motion for reconsideration, the Court
of Appeals could no longer validly take further proceedings on the merits of the case, much less to alter,
modify or reconsider its aforesaid decision and/or resolution. The filing of the motion for leave to file a
second motion for reconsideration by herein respondents on February 29, 1980 and the subsequent
filing of the motion itself on March 7, 1980, after the expiration of the reglementary period to file the
same, produced no legal effects. Only a motion for re-hearing or reconsideration filed in time shall stay
the final order or judgment sought to be re-examined. 23

The consequential result is that the resolution of respondent court of March 11, 1980 granting private
respondents' aforesaid motion for leave and, giving them an extension of ten (10) days to file a second
motion for reconsideration, is null and void. The period for filing a second motion for reconsideration
had already expired when private respondents sought leave to file the same, and respondent court no
longer had the power to entertain or grant the said motion. The aforesaid extension of ten (10) days for
private respondents to file their second motion for reconsideration was of no legal consequence since it
was given when there was no more period to extend. It is an elementary rule that an application for
extension of time must be filed prior to the expiration of the period sought to be extended. 24
Necessarily, the discretion of respondent court to grant said extension for filing a second motion for
reconsideration is conditioned upon the timeliness of the motion seeking the same.

No appeal having been taken seasonably, the respondent court's decision, dated September 25, 1979,
became final and executory on March 9, 1980. The subsequent resolutions of respondent court, dated
March 11, 1980 and September 3, 1980, allowing private respondents to file a second motion for
reconsideration and reversing the original decision are null and void and cannot disturb the finality of
the judgment nor restore jurisdiction to respondent court. This is but in line with the accepted rule that
once a decision has become final and executory it is removed from the power and jurisdiction of the
court which rendered it to further alter or amend, much less revoke it. 25 The decision rendered anew is
null and void. 26 The court's inherent power to correct its own errors should be exercised before the
finality of the decision or order sought to be corrected, otherwise litigation will be endless and no
question could be considered finally settled. Although the granting or denial of a motion for
reconsideration involves the exercise of discretion, 27 the same should not be exercised whimsically,
capriciously or arbitrarily, but prudently in conformity with law, justice, reason and equity. 28

Prescinding from the aforesaid procedural lapses into the substantive merits of the case, we find no
error in the findings of the respondent court in its original decision that the accident which befell private
respondents was due to the lack of diligence of respondent Antonio Esteban and was not imputable to
negligent omission on the part of petitioner PLDT. Such findings were reached after an exhaustive
assessment and evaluation of the evidence on record, as evidenced by the respondent court's resolution
of January 24, 1980 which we quote with approval:

First. Plaintiff's jeep was running along the inside lane of Lacson Street. If it had remained on that inside
lane, it would not have hit the ACCIDENT MOUND.

Exhibit B shows, through the tiremarks, that the ACCIDENT MOUND was hit by the jeep swerving from
the left that is, swerving from the inside lane. What caused the swerving is not disclosed; but, as the
cause of the accident, defendant cannot be made liable for the damages suffered by plaintiffs. The
accident was not due to the absence of warning signs, but to the unexplained abrupt swerving of the
jeep from the inside lane. That may explain plaintiff-husband's insistence that he did not see the
ACCIDENT MOUND for which reason he ran into it.

Second. That plaintiff's jeep was on the inside lane before it swerved to hit the ACCIDENT MOUND could
have been corroborated by a picture showing Lacson Street to the south of the ACCIDENT MOUND.

It has been stated that the ditches along Lacson Street had already been covered except the 3 or 4
meters where the ACCIDENT MOUND was located. Exhibit B-1 shows that the ditches on Lacson Street
north of the ACCIDENT MOUND had already been covered, but not in such a way as to allow the outer
lane to be freely and conveniently passable to vehicles. The situation could have been worse to the
south of the ACCIDENT MOUND for which reason no picture of the ACCIDENT MOUND facing south was
taken.

Third. Plaintiff's jeep was not running at 25 kilometers an hour as plaintiff-husband claimed. At that
speed, he could have braked the vehicle the moment it struck the ACCIDENT MOUND. The jeep would
not have climbed the ACCIDENT MOUND several feet as indicated by the tiremarks in Exhibit B. The jeep
must have been running quite fast. If the jeep had been braked at 25 kilometers an hour, plaintiff's
would not have been thrown against the windshield and they would not have suffered their injuries.

Fourth. If the accident did not happen because the jeep was running quite fast on the inside lane and for
some reason or other it had to swerve suddenly to the right and had to climb over the ACCIDENT
MOUND, then plaintiff-husband had not exercised the diligence of a good father of a family to avoid the
accident. With the drizzle, he should not have run on dim lights, but should have put on his regular lights
which should have made him see the ACCIDENT MOUND in time. If he was running on the outside lane
at 25 kilometers an hour, even on dim lights, his failure to see the ACCIDENT MOUND in time to brake
the car was negligence on his part. The ACCIDENT MOUND was relatively big and visible, being 2 to 3
feet high and 1-1/2 feet wide. If he did not see the ACCIDENT MOUND in time, he would not have seen
any warning sign either. He knew of the existence and location of the ACCIDENT MOUND, having seen it
many previous times. With ordinary precaution, he should have driven his jeep on the night of the
accident so as to avoid hitting the ACCIDENT MOUND. 29

The above findings clearly show that the negligence of respondent Antonio Esteban was not only
contributory to his injuries and those of his wife but goes to the very cause of the occurrence of the
accident, as one of its determining factors, and thereby precludes their right to recover damages. 30 The
perils of the road were known to, hence appreciated and assumed by, private respondents. By
exercising reasonable care and prudence, respondent Antonio Esteban could have avoided the injurious
consequences of his act, even assuming arguendo that there was some alleged negligence on the part of
petitioner.

The presence of warning signs could not have completely prevented the accident; the only purpose of
said signs was to inform and warn the public of the presence of excavations on the site. The private
respondents already knew of the presence of said excavations. It was not the lack of knowledge of these
excavations which caused the jeep of respondents to fall into the excavation but the unexplained
sudden swerving of the jeep from the inside lane towards the accident mound. As opined in some
quarters, the omission to perform a duty, such as the placing of warning signs on the site of the
excavation, constitutes the proximate cause only when the doing of the said omitted act would have
prevented the injury. 31 It is basic that private respondents cannot charge PLDT for their injuries where
their own failure to exercise due and reasonable care was the cause thereof. It is both a societal norm
and necessity that one should exercise a reasonable degree of caution for his own protection.
Furthermore, respondent Antonio Esteban had the last clear chance or opportunity to avoid the
accident, notwithstanding the negligence he imputes to petitioner PLDT. As a resident of Lacson Street,
he passed on that street almost everyday and had knowledge of the presence and location of the
excavations there. It was his negligence that exposed him and his wife to danger, hence he is solely
responsible for the consequences of his imprudence.

Moreover, we also sustain the findings of respondent Court of Appeals in its original decision that there
was insufficient evidence to prove any negligence on the part of PLDT. We have for consideration only
the self-serving testimony of respondent Antonio Esteban and the unverified photograph of merely a
portion of the scene of the accident. The absence of a police report of the incident and the non-
submission of a medical report from the hospital where private respondents were allegedly treated have
not even been satisfactorily explained.

As aptly observed by respondent court in its aforecited extended resolution of January 24, 1980

(a) There was no third party eyewitness of the accident. As to how the accident occurred, the Court
can only rely on the testimonial evidence of plaintiffs themselves, and such evidence should be very
carefully evaluated, with defendant, as the party being charged, being given the benefit of any doubt.
Definitely without ascribing the same motivation to plaintiffs, another person could have deliberately
engineered a similar accident in the hope and expectation that the Court can grant him substantial
moral and exemplary damages from the big corporation that defendant is. The statement is made only
to stress the disadvantageous position of defendant which would have extreme difficulty in contesting
such person's claim. If there were no witness or record available from the police department of Bacolod,
defendant would not be able to determine for itself which of the conflicting testimonies of plaintiffs is
correct as to the report or non-report of the accident to the police department. 32

A person claiming damages for the negligence of another has the burden of proving the existence of
such fault or negligence causative thereof. The facts constitutive of negligence must be affirmatively
established by competent evidence. 33 Whosoever relies on negligence for his cause of action has the
burden in the first instance of proving the existence of the same if contested, otherwise his action must
fail.

WHEREFORE, the resolutions of respondent Court of Appeals, dated March 11, 1980 and September
3,1980, are hereby SET ASIDE. Its original decision, promulgated on September 25,1979, is hereby
REINSTATED and AFFIRMED.

SO ORDERED.

.R. No. L-39309 November 24, 1933

TEH LE KIM, plaintiff-appellant,
vs.
PHILIPPINE AERIAL TAXI CO., INC., defendant-appellee.

Marcelo Nubla, G.E. Campbell and W.A. Caldwell for appellant.
L.D. Lockwood for appellee.



VILLA-REAL, J.:

This is an appeal taken by the plaintiff Teh Le Kim from the judgment rendered by the Court of First
Instance of Manila, absolving the defendant Philippine Aerial Taxi Co., Inc., from the complaint, which
was dismissed, without special pronouncement as to costs.

In support of his appeal, the appellant assigns five alleged errors as committed by the trail court, which
we shall discuss in the course of this decision.

The following facts have been proven by a preponderance of evidence presented during the trial, to wit:

On the Morning of September 4, 1931, the plaintiff herein bought, in Manila, a passenger ticket for a
flight to Iloilo in one of the defendant company's hydroplanes starting from Madrigal Field in Pasay.
Inasmuch as the engine of the plane Mabuhay, in which he was to take the flight, was not working
satisfactorily, the said plaintiff had to wait for some time. While the engine was being tested, the
plaintiff saw how it was started by turning the propeller repeatedly and how the man who did it ran
away from it each time in order not to be caught by the said propeller. Before the plane Mabuhay was
put in condition for the flight, the plane Taal arrived and it was decided to have the plaintiff make the
flight therein. The plaintiff and his companion were carefully carried from the beach to the plane,
entering the same by the rear or tail end, and were placed in their seats to which they were strapped.
Later, they were shown how the straps could be tightened or loosened in case of accident and were
instructed further not to touch anything in the plane. After an uneventful flight, the plane landed on the
waters of Guimaras Strait, in front of Iloilo, and taxied toward the beach until its pontoons struck
bottom, when the plane stopped. the pilot shut off the gasoline feed pipe, permitting the engine,
however, to continue to function until all the gasoline was drained from the feed pipe and carburetor.
This operation was necessary in accordance with the established practice of aviation in order to avoid
danger of fire which would exist if the pipes and carburetor remained full of gasoline, and to prevent the
sudden cooling of the engine which might cause serious damage, especially to the valves.

When the pilot observed that a banca was approaching rapidly on the right hand side of the plane, he
arose signalled and shouted to the boatman to keep his banca at a distance from the plane, inasmuch as
there were waves and quite a strong current, and he feared that the banca, which had a high prow,
might collide with the plane and damage either the wing or the pontoon thereof. While he was doing
this, he heard the propeller strike something. He immediately turned off the switch and, looking on the
other side, he saw Bohn picking up the plaintiff out of the water.

What really happened was that at the moment the pontoons touched bottom and while the pilot was
signalling to the banca, the plaintiff unfastened the straps around him and, not even waiting to put on
his hat, climbed over the door to the lower wing, went down the ladder to the pontoon and walked
along the pontoon toward the revolving propeller. The propeller first grazed his forehead and, as he
threw up his arm, it was caught by the revolving blades thereof and so injured that it had be
amputated.lawphil.net

Bohn and Garrett of Warner, Barnes & Co., consignees of the defendant in Iloilo, were on the beach to
meet the plane and to make arrangements for the disembarking of the passengers. Upon seeing the
plaintiff walking toward the propeller, they shouted frantically and motioned to him to keep away from
it, but the said plaintiff took no heed of them.

The usual procedure in discharging passengers from a hydroplane is to wait until the propeller stops,
then turn the plane around by hand so as to have the rear or tail and thereof towards the beach, and
then take the passengers to shore in a banca. The pilot in charge of the plane has had fourteen years
experience, having first learned to fly during the World War. He is duly licensed by the Department of
Commerce of the United States and by the Department of Commerce and Communications of the
Government of the Philippine Islands.

The only question to decide in this appeal, which is raised in the first assignment of error, is whether or
not the defendant entity has complied with its contractual obligation to carry the plaintiff-appellant Teh
Le Kim safe and sound to his destination.

The contract entered into by the plaintiff Teh Le Kim and the defendant entity Philippine Aerial Taxi Co.,
Inc., was that upon payment of the price of the passage, which the carrier had received, the latter would
carry the former by air in one of its hydroplanes and put him, safe and sound, on the beach at Iloilo.
After an uneventful flight, the hydroplane, which carried the plaintiff and his companion, arrived at the
Iloilo beach, as usual, with nothing more left to do but to take the plaintiff and his companion, safe and
sound, ashore. In order to do this, it was necessary to wait for the propeller to stop, turn the rear or tail
end of the plane towards the shore, take the passengers out by the aforesaid rear or tail end thereof,
place them in a banca and take them ashore. By sheer common sense, the plaintiff ought to know that a
propeller, be it that of a ship or of an aeroplane, is dangerous while in motion and that to approach it is
to run the risk of being caught and injured thereby. He ought to know furthermore that inasmuch as the
plane was on the water, he had to wait for a banca to take him ashore. Notwithstanding the shouts and
warning signals given him from the shore by the representatives of the consignee firm, the plaintiff
herein, not being a man of ordinary prudence, hastily left the cabin of the plane, walked along one of
the pontoons and directly into the revolving propeller, while the banca which was to take him ashore
was still some distance away and the pilot was instructing the boatman to keep it at a safe distance from
the plane. Under such circumstances, it is not difficult to understand that the plaintiff-appellant acted
with reckless negligence in approaching the propeller while it was still in motion, and when the banca
was not yet in a position to take him. That the plaintiff-appellant's negligence alone was the direct cause
of the accident, is so clear that it is not necessary to cite authoritative opinions to support the
conclusion that the injury to his right arm and the subsequent amputation thereof were due entirely and
exclusively to his own imprudence and not to the slightest negligence attributable to the defendant
entity or to its agents. Therefore, he alone should suffer the consequences of his act.

Wherefore, not finding any error in the judgment appealed from, it is hereby affirmed in toto, with the
costs against the appellant. So ordered.

Avancea, C.J., Malcolm, Hull, and Imperial, JJ., concur.

[G.R. No. 125018. April 6, 2000]

REMMAN ENTERPRISES, INC., petitioner, vs. COURT OF APPEALS and CRISPIN E. LAT, respondents.
francis

D E C I S I O N

BELLOSILLO, J.:

REMMAN ENTERPRISES, INC. (REMMAN), and CRISPIN E. LAT are adjoining landowners in Barangay
Bugtong Na Pulo, Lipa City. The land of Lat containing an area of 1.8 hectares is agricultural and planted
mostly with fruit trees while REMMAN occupies a land area of fifteen (15) hectares six (6) hectares of
which are devoted to its piggery business. REMMAN's land is one and a half (1) meters higher in
elevation than that of respondent Lat.

Sometime in July 1984 Lat noticed that REMMAN's waste disposal lagoon was already overflowing and
inundating one-fourth (1/4) of Lat's plantation. He made several representations with REMMAN but
they fell on deaf ears. On 14 March 1985, after almost one (1) hectare of Lat's plantation was already
inundated with water containing pig manure, as a result of which the trees growing on the flooded
portion started to wither and die, Lat filed a complaint for damages with preliminary mandatory
injunction against REMMAN. Lat alleged that the acidity of the soil in his plantation increased because of
the overflow of the water heavy with pig manure from REMMAN's piggery farm.

REMMAN denied all the allegations of Lat and raised as an affirmative defense that measures such as
the construction of additional lagoons were already adopted to contain the waste water coming from its
piggery to prevent any damage to the adjoining estates.

After conducting an ocular inspection and evaluating the evidence of both parties the Regional Trial
Court found that indeed REMMANs waste disposal lagoon overflowed with the contaminated water
flooding one (1) hectare of Lat's plantation. The waste water was ankle-deep and caused death and
destruction to one (1) jackfruit tree, fifteen (15) coconut trees, one hundred twenty-two (122) coffee
trees, and an unspecified number of mango trees, bananas and vegetables. As a consequence, the trial
court ordered REMMAN to indemnify Lat P186,975.00 for lost profits for three (3) crop years and
P30,000.00 as attorney's fees.[1] marie

The decision of the court a quo was affirmed in toto by the Court of Appeals.[2]

In this Petition for Review on Certiorari REMMAN prays that we pass upon the findings of the trial court
as well as of the appellate court. REMMAN insists that factual findings of lower courts may be passed
upon, reviewed and reversed: (a) when the conclusion is a finding grounded entirely on speculation,
surmises or conjectures; (b) when the inference made is manifestly mistaken, absurd or impossible; (c)
when there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts;
(e) 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; (f) when the conclusions of the
Court of Appeals are not supported by the evidence on record; (g) when facts of substance were
overlooked which, if correctly considered, might have changed the outcome of the case; and, (h) when
the findings of the Court of Appeals are not in accord with what reasonable men would readily accept
are the correct inferences from the evidence extant in the records.[3]

Indeed, in the abovementioned instances, the factual milieu of a particular case may be passed upon,
reversed or modified by this Court. But examination of the record reveals that all the above instances
are unavailing. From this point of view alone the instant petition is dismissible. Nevertheless, we shall
discuss them hereunder to dispose finally of the contentions of REMMAN.

First, REMMAN argues that its liability for the damages suffered by Lat was not clearly established.

We disagree. During the ocular inspection conducted by the lower court where representatives of both
parties were present, it was established that the waste water containing pig manure was continuously
flowing from REMMAN's piggery farm to Lat's plantation. The water was ankle-deep and flooded one (1)
hectare of Lat's plantation. The overflow of the "acidic, malodorous and polluted water" continued from
June 1984 to March 1985 thus destroying one (1) jackfruit tree, fifteen (15) coconut trees, one hundred
an twenty-two (122) coffee trees, and an unspecified number of mango trees, bananas and
vegetables.[4]

In addition, the appellate court found that there was indeed negligence on the part of REMMAN which
directly caused the damage to the plantation of Lat. Thus -novero

x x x Negligence was clearly established. It is uncontroverted that the land of appellee was flooded on
account of the overflow of acidic, malodorous and polluted water coming from the adjacent piggery
farm of appellant sometime in May 1984. This resulted in the impairment of the productivity of
appellee's land as well as the eventual destruction and death of several fruit trees, such as coconuts,
coffee, jackfruits, bananas and other plants x x x x Appellant cannot avoid liability because their
negligence was the proximate cause of the damage. Appellee's property was practically made a catch-
basin of polluted water and other noxious substances emptying from appellant's piggery which could
have been prevented had it not been for the negligence of appellant arising from its: (a) failure to
monitor the increases in the level of water in the lagoons before, during and after the heavy downpours
which occurred during the rainy months of 1984; (b) failure to augment the existing lagoons prior to the
incident, notwithstanding the fact that at the time of the flooding, the piggery had grown to a capacity
of 11,000 heads, and considering that it was reasonably forseeable that the existing waste disposal
facilities were no longer adequate to accomodate the increasing volume of waste matters in such a big
farm; and more importantly, (c) the repeated failure to comply with their promise to appellee.[5]

Second, REMMAN argues that the trial court as well as the Court of Appeals should not have rejected its
request for the production of Lat's income tax returns. According to REMMAN had Lat's income tax
returns been produced, the issue of the alleged damages suffered by Lat would have been settled.

This argument is moot, if not trite. For this matter has been laid to rest when we affirmed the Court of
Appeals' decision in an earlier case involving the same parties.[6] In sustaining the trial court's quashal
of the subpoena duces tecum previously issued compelling Lat to produce his income tax returns for the
years 1982-1986, the appellate court explained that the production of the income tax returns would not
necessarily serve to prove the special and affirmative defenses set up by REMMAN nor rebut Lat's
testimony regarding the losses he sustained due to the piggery. The tax returns per se could not reflect
the total amount of damages suffered by Lat, as income losses from a portion of the plantation could be
offset by any profit derived from the rest of the plantation or from other sources of income. Conversely,
losses incurred from other sources of income would be totally unrelated to the income from the
particular portion of the plantation flooded with waste matter coming from REMMAN's piggery.[7]

Third, REMMAN contends that the damages allegedly sustained by Lat have not been satisfactorily
established. nigel

We a not convinced. The factual findings of the court a quo rightly support its conclusions on this
respect -

Coming now to the issue of damages, We find appellant's allegations not well-taken. Appellant contends
that actual and compensatory damages require evidentiary proof, and there being no evidence
presented as to the necessity of the award for damages, it was erroneous for the lower court to have
made such award. It must be remembered that after the ocular inspection, the court a quo rendered an
inventory of dead and rotten trees and plants found in appellee's property. Appellee also testified on
the approximate annual harvest and fair market value thereof. Significantly, no opposition or
controverting evidence was presented by appellant on the matter. Hence, appellant is bound thereby
and cannot now be heard to complain. As correctly held by the court a quo:

An ocular inspection has been conducted by the trial court. The inventory of the trees damaged and the
itemized valuation placed therein by private respondent after the ocular inspection which is not
rebutted by the petitioner, is the more accurate indicator of the said amount prayed for as damages. If
the valuation is indeed unreasonable, petitioner should present controverting evidence of the fair
market value of the crops involved. The trial court held that the private respondent himself had been
subjected to extensive cross and re-cross examination by the counsel for the petitioner on the amount
of damages.[8]

Finally, REMMAN complains that the damages, if any, were due to a fortuitous event.

Again cannot agree with petitioner. We defer instead to the findings opinions expressed by the lower
courts -

Even assuming that the heavy rains constituted an act of God, by reason of their negligence, the
fortuitous event became humanized, rendering appellants liable for the ensuing damages. In National
Power Corporation v. Court of Appeals, 233 SCRA 649 (1993), the Supreme Court held: ella

Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to escape liability for
the loss or damage sustained by private respondents since they, the petitioners, were guilty of
negligence. This event then was not occasioned exclusively by an act of God or force majeure; a human
factor - negligence or imprudence - had intervened. The effect then of the force majeure in question
may be deemed to have, even if only partly, resulted from the participation of man. Thus, the whole
occurrence was thereby humanized, as it were, and removed from the rules applicable to acts of God.

As regards the alleged natural easement imposed upon the property of appellee, resort to pertinent
provisions of applicable law is imperative. Under the Civil Code, it is provided:

Art. 637. Lower estates are obliged to receive the waters which naturally and without the intervention
of man descend from the higher estates, as well as the stones or earth which they carry with them.

The owner of the lower estate cannot construct works which will impede this easement; neither can the
owner of the higher estate make works which will increase the burden.

A similar provision is found in the Water Code of the Philippines (P.D. No.1067), which provides:

Art. 50. Lower estates are obliged to receive the water which naturally and without the intervention of
man flow from the higher estates, as well as the stone or earth which they carry with them.

The owner of the lower estate cannot construct works which will impede this natural flow, unless he
provides an alternative method of drainage; neither can the owner of the higher estate make works
which will increase this natural flow. marinella

As worded, the two (2) aforecited provisions impose a natural easement upon the lower estate to
receive the waters which naturally and without the intervention of man descend from higher states.
However, where the waters which flow from a higher state are those which are artificially collected in
man-made lagoons, any damage occasioned thereby entitles the owner of the lower or servient estate
to compensation.[9]

On the basis of the foregoing discussion, it is crystal clear that REMMAN is directly accountable to Lat for
the damages sustained by him. The negligence of REMMAN in maintaining the level of waste water in its
lagoons has been satisfactorily established. The extent of damages suffered by Lat remains unrebutted;
in fact, has been proved.

WHEREFORE, the petition is DENIED. The 19 October 1995 Decision of the Court of Appeals affirming
that of the Regional Trial Court-Br. 16, Lipa City, holding petitioner Remman Enterprises, Inc. (REMMAN)
liable to private respondent Crispin E. Lat for damages and to indemnify the latter P186,975.00 for lost
profits for three (3) crop years and P30,000.00 as attorneys fees, is AFFIRMED. Costs against petitioner.

SO ORDERED.

Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur. Alonzo

[G.R. No. 112392. February 29, 2000]

BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. COURT OF APPEALS and BENJAMIN C. NAPIZA,
respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This is a petition for review on certiorari of the Decision[1] of the Court of Appeals in CA-G.R. CV No.
37392 affirming in toto that of the Regional Trial Court of Makati, Branch 139,[2] which dismissed the
complaint filed by petitioner Bank of the Philippine Islands against private respondent Benjamin C.
Napiza for sum of money. Sdaad

On September 3, 1987, private respondent deposited in Foreign Currency Deposit Unit (FCDU) Savings
Account No. 028-187*3+ which he maintained in petitioner banks Buendia Avenue Extension Branch,
Continental Bank Managers Check No. 00014757*4+ dated August 17, 1984, payable to "cash" in the
amount of Two Thousand Five Hundred Dollars ($2,500.00) and duly endorsed by private respondent on
its dorsal side.[5] It appears that the check belonged to a certain Henry Chan who went to the office of
private respondent and requested him to deposit the check in his dollar account by way of
accommodation and for the purpose of clearing the same. Private respondent acceded, and agreed to
deliver to Chan a signed blank withdrawal slip, with the understanding that as soon as the check is
cleared, both of them would go to the bank to withdraw the amount of the check upon private
respondents presentation to the bank of his passbook.

Using the blank withdrawal slip given by private respondent to Chan, on October 23, 1984, one Ruben
Gayon, Jr. was able to withdraw the amount of $2,541.67 from FCDU Savings Account No. 028-187.
Notably, the withdrawal slip shows that the amount was payable to Ramon A. de Guzman and Agnes C.
de Guzman and was duly initialed by the branch assistant manager, Teresita Lindo.[6]

On November 20, 1984, petitioner received communication from the Wells Fargo Bank International of
New York that the said check deposited by private respondent was a counterfeit check[7] because it was
"not of the type or style of checks issued by Continental Bank International."[8] Consequently, Mr. Ariel
Reyes, the manager of petitioners Buendia Avenue Extension Branch, instructed one of its employees,
Benjamin D. Napiza IV, who is private respondents son, to inform his father that the check bounced.*9+
Reyes himself sent a telegram to private respondent regarding the dishonor of the check. In turn, private
respondents son wrote to Reyes stating that the check had been assigned "for encashment" to Ramon
A. de Guzman and/or Agnes C. de Guzman after it shall have been cleared upon instruction of Chan. He
also said that upon learning of the dishonor of the check, his father immediately tried to contact Chan
but the latter was out of town.[10]

Private respondents son undertook to return the amount of $2,500.00 to petitioner bank. On December
18, 1984, Reyes reminded private respondent of his sons promise and warned that should he fail to
return that amount within seven (7) days, the matter would be referred to the banks lawyers for
appropriate action to protect the banks interest.*11+ This was followed by a letter of the banks lawyer
dated April 8, 1985 demanding the return of the $2,500.00.[12]

In reply, private respondent wrote petitioners counsel on April 20, 1985*13+ stating that he deposited
the check "for clearing purposes" only to accommodate Chan. He added:

"Further, please take notice that said check was deposited on September 3, 1984 and withdrawn on
October 23, 1984, or a total period of fifty (50) days had elapsed at the time of withdrawal. Also, it may
not be amiss to mention here that I merely signed an authority to withdraw said deposit subject to its
clearing, the reason why the transaction is not reflected in the passbook of the account. Besides, I did
not receive its proceeds as may be gleaned from the withdrawal slip under the captioned signature of
recipient.

If at all, my obligation on the transaction is moral in nature, which (sic) I have been and is (sic) still
exerting utmost and maximum efforts to collect from Mr. Henry Chan who is directly liable under the
circumstances. Scsdaad

xxx......xxx......xxx."

On August 12, 1986, petitioner filed a complaint against private respondent, praying for the return of
the amount of $2,500.00 or the prevailing peso equivalent plus legal interest from date of demand to
date of full payment, a sum equivalent to 20% of the total amount due as attorney's fees, and litigation
and/or costs of suit.

Private respondent filed his answer, admitting that he indeed signed a "blank" withdrawal slip with the
understanding that the amount deposited would be withdrawn only after the check in question has
been cleared. He likewise alleged that he instructed the party to whom he issued the signed blank
withdrawal slip to return it to him after the bank drafts clearance so that he could lend that party his
passbook for the purpose of withdrawing the amount of $2,500.00. However, without his knowledge,
said party was able to withdraw the amount of $2,541.67 from his dollar savings account through
collusion with one of petitioners employees. Private respondent added that he had "given the Plaintiff
fifty one (51) days with which to clear the bank draft in question." Petitioner should have disallowed the
withdrawal because his passbook was not presented. He claimed that petitioner had no one to blame
except itself "for being grossly negligent;" in fact, it had allegedly admitted having paid the amount in
the check "by mistake" x x x "if not altogether due to collusion and/or bad faith on the part of (its)
employees." Charging petitioner with "apparent ignorance of routine bank procedures," by way of
counterclaim, private respondent prayed for moral damages of P100,000.00, exemplary damages of
P50,000.00 and attorneys fees of 30% of whatever amount that would be awarded to him plus an
honorarium of P500.00 per appearance in court.

Private respondent also filed a motion for admission of a third party complaint against Chan. He alleged
that "thru strategem and/or manipulation," Chan was able to withdraw the amount of $2,500.00 even
without private respondents passbook. Thus, private respondent prayed that third party defendant
Chan be made to refund to him the amount withdrawn and to pay attorneys fees of P5,000.00 plus
P300.00 honorarium per appearance.

Petitioner filed a comment on the motion for leave of court to admit the third party complaint, wherein
it asserted that per paragraph 2 of the Rules and Regulations governing BPI savings accounts, private
respondent alone was liable "for the value of the credit given on account of the draft or check
deposited." It contended that private respondent was estopped from disclaiming liability because he
himself authorized the withdrawal of the amount by signing the withdrawal slip. Petitioner prayed for
the denial of the said motion so as not to unduly delay the disposition of the main case asserting that
private respondents claim could be ventilated in another case.

Private respondent replied that for the parties to obtain complete relief and to avoid multiplicity of
suits, the motion to admit third party complaint should be granted. Meanwhile, the trial court issued
orders on August 25, 1987 and October 28, 1987 directing private respondent to actively participate in
locating Chan. After private respondent failed to comply, the trial court, on May 18, 1988, dismissed the
third party complaint without prejudice.

On November 4, 1991, a decision was rendered dismissing the complaint. The lower court held that
petitioner could not hold private respondent liable based on the checks face value alone. To so hold
him liable "would render inutile the requirement of clearance from the drawee bank before the value
of a particular foreign check or draft can be credited to the account of a depositor making such deposit."
The lower court further held that "it was incumbent upon the petitioner to credit the value of the check
in question to the account of the private respondent only upon receipt of the notice of final payment
and should not have authorized the withdrawal from the latters account of the value or proceeds of the
check." Having admitted that it committed a "mistake" in not waiting for the clearance of the check
before authorizing the withdrawal of its value or proceeds, petitioner should suffer the resultant loss.
Supremax

On appeal, the Court of Appeals affirmed the lower courts decision. The appellate court held that
petitioner committed "clear gross negligence" in allowing Ruben Gayon, Jr. to withdraw the money
without presenting private respondents passbook and, before the check was cleared and in crediting
the amount indicated therein in private respondents account. It stressed that the mere deposit of a
check in private respondents account did not mean that the check was already private respondents
property. The check still had to be cleared and its proceeds can only be withdrawn upon presentation of
a passbook in accordance with the banks rules and regulations. Furthermore, petitioners contention
that private respondent warranted the checks genuineness by endorsing it is untenable for it would
render useless the clearance requirement. Likewise, the requirement of presentation of a passbook to
ascertain the propriety of the accounting reflected would be a meaningless exercise. After all, these
requirements are designed to protect the bank from deception or fraud.

The Court of Appeals cited the case of Roman Catholic Bishop of Malolos, Inc. v. IAC,[14] where this
Court stated that a personal check is not legal tender or money, and held that the check deposited in
this case must be cleared before its value could be properly transferred to private respondent's account.

Without filing a motion for the reconsideration of the Court of Appeals Decision, petitioner filed this
petition for review on certiorari, raising the following issues:

1.......WHETHER OR NOT RESPONDENT NAPIZA IS LIABLE UNDER HIS WARRANTIES AS A GENERAL
INDORSER.

2.......WHETHER OR NOT A CONTRACT OF AGENCY WAS CREATED BETWEEN RESPONDENT NAPIZA AND
RUBEN GAYON.

3.......WHETHER OR NOT PETITIONER WAS GROSSLY NEGLIGENT IN ALLOWING THE WITHDRAWAL.

Petitioner claims that private respondent, having affixed his signature at the dorsal side of the check,
should be liable for the amount stated therein in accordance with the following provision of the
Negotiable Instruments Law (Act No. 2031):

"SEC. 66. Liability of general indorser. Every indorser who indorses without qualification, warrants to
all subsequent holders in due course

(a)......The matters and things mentioned in subdivisions (a), (b), and (c) of the next preceding section;
and

(b)......That the instrument is at the time of his indorsement, valid and subsisting.

And, in addition, he engages that on due presentment, it shall be accepted or paid, or both, as the case
may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor
be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be
compelled to pay it."

Section 65, on the other hand, provides for the following warranties of a person negotiating an
instrument by delivery or by qualified indorsement: (a) that the instrument is genuine and in all respects
what it purports to be; (b) that he has a good title to it, and (c) that all prior parties had capacity to
contract.[15] In People v. Maniego,[16] this Court described the liabilities of an indorser as follows: Juris

"Appellants contention that as mere indorser, she may not be liable on account of the dishonor of the
checks indorsed by her, is likewise untenable. Under the law, the holder or last indorsee of a negotiable
instrument has the right to enforce payment of the instrument for the full amount thereof against all
parties liable thereon. Among the parties liable thereon is an indorser of the instrument, i.e., a person
placing his signature upon an instrument otherwise than as a maker, drawer or acceptor * * unless he
clearly indicated by appropriate words his intention to be bound in some other capacity. Such an
indorser who indorses without qualification, inter alia engages that on due presentment, * * (the
instrument) shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it
be dishonored, and the necessary proceedings on dishonor be duly taken, he will pay the amount
thereof to the holder, or any subsequent indorser who may be compelled to pay it. Maniego may also
be deemed an accommodation party in the light of the facts, i.e., a person who has signed the
instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the
purpose of lending his name to some other person. As such, she is under the law liable on the
instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew
* * (her) to be only an accommodation party, although she has the right, after paying the holder, to
obtain reimbursement from the party accommodated, since the relation between them is in effect that
of principal and surety, the accommodation party being the surety."

It is thus clear that ordinarily private respondent may be held liable as an indorser of the check or even
as an accommodation party.[17] However, to hold private respondent liable for the amount of the check
he deposited by the strict application of the law and without considering the attending circumstances in
the case would result in an injustice and in the erosion of the public trust in the banking system. The
interest of justice thus demands looking into the events that led to the encashment of the check.

Petitioner asserts that by signing the withdrawal slip, private respondent "presented the opportunity for
the withdrawal of the amount in question." Petitioner relied "on the genuine signature on the
withdrawal slip, the personality of private respondents son and the lapse of more than fifty (50) days
from date of deposit of the Continental Bank draft, without the same being returned yet."[18] We hold,
however, that the propriety of the withdrawal should be gauged by compliance with the rules thereon
that both petitioner bank and its depositors are duty-bound to observe.

In the passbook that petitioner issued to private respondent, the following rules on withdrawal of
deposits appear:

"4.......Withdrawals must be made by the depositor personally but in some exceptional circumstances,
the Bank may allow withdrawal by another upon the depositors written authority duly authenticated;
and neither a deposit nor a withdrawal will be permitted except upon the presentation of the
depositors savings passbook, in which the amount deposited withdrawn shall be entered only by the
Bank.

5.......Withdrawals may be made by draft, mail or telegraphic transfer in currency of the account at the
request of the depositor in writing on the withdrawal slip or by authenticated cable. Such request must
indicate the name of the payee/s, amount and the place where the funds are to be paid. Any stamp,
transmission and other charges related to such withdrawals shall be for the account of the depositor
and shall be paid by him/her upon demand. Withdrawals may also be made in the form of travellers
checks and in pesos. Withdrawals in the form of notes/bills are allowed subject however, to their
(availability).

6.......Deposits shall not be subject to withdrawal by check, and may be withdrawn only in the manner
above provided, upon presentation of the depositors savings passbook and with the withdrawal form
supplied by the Bank at the counter."[19] Scjuris

Under these rules, to be able to withdraw from the savings account deposit under the Philippine foreign
currency deposit system, two requisites must be presented to petitioner bank by the person
withdrawing an amount: (a) a duly filled-up withdrawal slip, and (b) the depositors passbook. Private
respondent admits that he signed a blank withdrawal slip ostensibly in violation of Rule No. 6 requiring
that the request for withdrawal must name the payee, the amount to be withdrawn and the place
where such withdrawal should be made. That the withdrawal slip was in fact a blank one with only
private respondents two signatures affixed on the proper spaces is buttressed by petitioners allegation
in the instant petition that had private respondent indicated therein the person authorized to receive
the money, then Ruben Gayon, Jr. could not have withdrawn any amount. Petitioner contends that "(i)n
failing to do so (i.e., naming his authorized agent), he practically authorized any possessor thereof to
write any amount and to collect the same."[20]

Such contention would have been valid if not for the fact that the withdrawal slip itself indicates a
special instruction that the amount is payable to "Ramon A. de Guzman &/or Agnes C. de Guzman."
Such being the case, petitioners personnel should have been duly warned that Gayon, who was also
employed in petitioners Buendia Ave. Extension branch,*21+ was not the proper payee of the proceeds
of the check. Otherwise, either Ramon or Agnes de Guzman should have issued another authority to
Gayon for such withdrawal. Of course, at the dorsal side of the withdrawal slip is an "authority to
withdraw" naming Gayon the person who can withdraw the amount indicated in the check. Private
respondent does not deny having signed such authority. However, considering petitioners clear
admission that the withdrawal slip was a blank one except for private respondents signature, the
unavoidable conclusion is that the typewritten name of "Ruben C. Gayon, Jr." was intercalated and
thereafter it was signed by Gayon or whoever was allowed by petitioner to withdraw the amount. Under
these facts, there could not have been a principal-agent relationship between private respondent and
Gayon so as to render the former liable for the amount withdrawn.

Moreover, the withdrawal slip contains a boxed warning that states: "This receipt must be signed and
presented with the corresponding foreign currency savings passbook by the depositor in person. For
withdrawals thru a representative, depositor should accomplish the authority at the back." The
requirement of presentation of the passbook when withdrawing an amount cannot be given mere lip
service even though the person making the withdrawal is authorized by the depositor to do so. This is
clear from Rule No. 6 set out by petitioner so that, for the protection of the banks interest and as a
reminder to the depositor, the withdrawal shall be entered in the depositors passbook. The fact that
private respondents passbook was not presented during the withdrawal is evidenced by the entries
therein showing that the last transaction that he made with the bank was on September 3, 1984, the
date he deposited the controversial check in the amount of $2,500.00.[22]

In allowing the withdrawal, petitioner likewise overlooked another rule that is printed in the passbook.
Thus:

"2.......All deposits will be received as current funds and will be repaid in the same manner; provided,
however, that deposits of drafts, checks, money orders, etc. will be accepted as subject to collection
only and credited to the account only upon receipt of the notice of final payment. Collection charges by
the Banks foreign correspondent in effecting such collection shall be for the account of the depositor. If
the account has sufficient balance, the collection shall be debited by the Bank against the account. If, for
any reason, the proceeds of the deposited checks, drafts, money orders, etc., cannot be collected or if
the Bank is required to return such proceeds, the provisional entry therefor made by the Bank in the
savings passbook and its records shall be deemed automatically cancelled regardless of the time that
has elapsed, and whether or not the defective items can be returned to the depositor; and the Bank is
hereby authorized to execute immediately the necessary corrections, amendments or changes in its
record, as well as on the savings passbook at the first opportunity to reflect such cancellation." (Italics
and underlining supplied.) Jurissc

As correctly held by the Court of Appeals, in depositing the check in his name, private respondent did
not become the outright owner of the amount stated therein. Under the above rule, by depositing the
check with petitioner, private respondent was, in a way, merely designating petitioner as the collecting
bank. This is in consonance with the rule that a negotiable instrument, such as a check, whether a
managers check or ordinary check, is not legal tender.*23+ As such, after receiving the deposit, under its
own rules, petitioner shall credit the amount in private respondents account or infuse value thereon
only after the drawee bank shall have paid the amount of the check or the check has been cleared for
deposit. Again, this is in accordance with ordinary banking practices and with this Courts
pronouncement that "the collecting bank or last endorser generally suffers the loss because it has the
duty to ascertain the genuineness of all prior endorsements considering that the act of presenting the
check for payment to the drawee is an assertion that the party making the presentment has done its
duty to ascertain the genuineness of the endorsements."[24] The rule finds more meaning in this case
where the check involved is drawn on a foreign bank and therefore collection is more difficult than
when the drawee bank is a local one even though the check in question is a managers check.[25]
Misjuris

In Banco Atlantico v. Auditor General,[26] Banco Atlantico, a commercial bank in Madrid, Spain, paid the
amounts represented in three (3) checks to Virginia Boncan, the finance officer of the Philippine
Embassy in Madrid. The bank did so without previously clearing the checks with the drawee bank, the
Philippine National Bank in New York, on account of the "special treatment" that Boncan received from
the personnel of Banco Atlanticos foreign department. The Court held that the encashment of the
checks without prior clearance is "contrary to normal or ordinary banking practice specially so where the
drawee bank is a foreign bank and the amounts involved were large." Accordingly, the Court approved
the Auditor Generals denial of Banco Atlanticos claim for payment of the value of the checks that was
withdrawn by Boncan.

Said ruling brings to light the fact that the banking business is affected with public interest. By the
nature of its functions, a bank is under obligation to treat the accounts of its depositors "with
meticulous care, always having in mind the fiduciary nature of their relationship."[27] As such, in dealing
with its depositors, a bank should exercise its functions not only with the diligence of a good father of a
family but it should do so with the highest degree of care.[28]

In the case at bar, petitioner, in allowing the withdrawal of private respondents deposit, failed to
exercise the diligence of a good father of a family. In total disregard of its own rules, petitioners
personnel negligently handled private respondents account to petitioners detriment. As this Court
once said on this matter:

"Negligence is the omission to do something which a reasonable man, guided by those considerations
which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a
prudent and reasonable man would do. The seventy-eight (78)-year-old, yet still relevant, case of Picart
v. Smith, provides the test by which to determine the existence of negligence in a particular case which
may be stated as follows: Did the defendant in doing the alleged negligent act use that reasonable care
and caution which an ordinarily prudent person would have used in the same situation? If not, then he is
guilty of negligence. The law here in effect adopts the standard supposed to be supplied by the
imaginary conduct of the discreet pater-familias 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."[29]

Petitioner violated its own rules by allowing the withdrawal of an amount that is definitely over and
above the aggregate amount of private respondents dollar deposits that had yet to be cleared. The
banks ledger on private respondents account shows that before he deposited $2,500.00, private
respondent had a balance of only $750.00.*30+ Upon private respondents deposit of $2,500.00 on
September 3, 1984, that amount was credited in his ledger as a deposit resulting in the corresponding
total balance of $3,250.00.[31] On September 10, 1984, the amount of $600.00 and the additional
charges of $10.00 were indicated therein as withdrawn thereby leaving a balance of $2,640.00. On
September 30, 1984, an interest of $11.59 was reflected in the ledger and on October 23, 1984, the
amount of $2,541.67 was entered as withdrawn with a balance of $109.92.[32] On November 19, 1984
the word "hold" was written beside the balance of $109.92.[33] That must have been the time when
Reyes, petitioners branch manager, was informed unofficially of the fact that the check deposited was a
counterfeit, but petitioners Buendia Ave. Extension Branch received a copy of the communication
thereon from Wells Fargo Bank International in New York the following day, November 20, 1984.[34]
According to Reyes, Wells Fargo Bank International handled the clearing of checks drawn against U.S.
banks that were deposited with petitioner.[35] Jjlex

From these facts on record, it is at once apparent that petitioners personnel allowed the withdrawal of
an amount bigger than the original deposit of $750.00 and the value of the check deposited in the
amount of $2,500.00 although they had not yet received notice from the clearing bank in the United
States on whether or not the check was funded. Reyes contention that after the lapse of the 35-day
period the amount of a deposited check could be withdrawn even in the absence of a clearance thereon,
otherwise it could take a long time before a depositor could make a withdrawal,[36] is untenable. Said
practice amounts to a disregard of the clearance requirement of the banking system.

While it is true that private respondents having signed a blank withdrawal slip set in motion the events
that resulted in the withdrawal and encashment of the counterfeit check, the negligence of petitioners
personnel was the proximate cause of the loss that petitioner sustained. Proximate cause, which is
determined by a mixed consideration of logic, common sense, policy and precedent, is "that cause,
which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the
injury, and without which the result would not have occurred."[37] The proximate cause of the
withdrawal and eventual loss of the amount of $2,500.00 on petitioners part was its personnels
negligence in allowing such withdrawal in disregard of its own rules and the clearing requirement in the
banking system. In so doing, petitioner assumed the risk of incurring a loss on account of a forged or
counterfeit foreign check and hence, it should suffer the resulting damage.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision of the Court of Appeals in CA-
G.R. CV No. 37392 is AFFIRMED.

SO ORDERED. Newmiso
G.R. No. L-65295 March 10, 1987

PHOENIX CONSTRUCTION, INC. and ARMANDO U. CARBONEL, petitioners,
vs.
THE INTERMEDIATE APPELLATE COURT and LEONARDO DIONISIO, respondents.



FELICIANO, J:

In the early morning of 15 November 1975 at about 1:30 a.m. private respondent Leonardo
Dionisio was on his way home he lived in 1214-B Zamora Street, Bangkal, Makati from a cocktails-
and-dinner meeting with his boss, the general manager of a marketing corporation. During the cocktails
phase of the evening, Dionisio had taken "a shot or two" of liquor. Dionisio was driving his Volkswagen
car and had just crossed the intersection of General Lacuna and General Santos Streets at Bangkal,
Makati, not far from his home, and was proceeding down General Lacuna Street, when his car
headlights (in his allegation) suddenly failed. He switched his headlights on "bright" and thereupon he
saw a Ford dump truck looming some 2-1/2 meters away from his car. The dump truck, owned by and
registered in the name of petitioner Phoenix Construction Inc. ("Phoenix"), was parked on the right hand
side of General Lacuna Street (i.e., on the right hand side of a person facing in the same direction toward
which Dionisio's car was proceeding), facing the oncoming traffic. The dump truck was parked askew
(not parallel to the street curb) in such a manner as to stick out onto the street, partly blocking the way
of oncoming traffic. There were no lights nor any so-called "early warning" reflector devices set
anywhere near the dump truck, front or rear. The dump truck had earlier that evening been driven
home by petitioner Armando U. Carbonel, its regular driver, with the permission of his employer
Phoenix, in view of work scheduled to be carried out early the following morning, Dionisio claimed that
he tried to avoid a collision by swerving his car to the left but it was too late and his car smashed into
the dump truck. As a result of the collision, Dionisio suffered some physical injuries including some
permanent facial scars, a "nervous breakdown" and loss of two gold bridge dentures.

Dionisio commenced an action for damages in the Court of First Instance of Pampanga basically claiming
that the legal and proximate cause of his injuries was the negligent manner in which Carbonel had
parked the dump truck entrusted to him by his employer Phoenix. Phoenix and Carbonel, on the other
hand, countered that the proximate cause of Dionisio's injuries was his own recklessness in driving fast
at the time of the accident, while under the influence of liquor, without his headlights on and without a
curfew pass. Phoenix also sought to establish that it had exercised due rare in the selection and
supervision of the dump truck driver.

The trial court rendered judgment in favor of Dionisio and against Phoenix and Carbonel and ordered
the latter:

(1) To pay plaintiff jointly and severally the sum of P 15,000.00 for hospital bills and the
replacement of the lost dentures of plaintiff;

(2) To pay plaintiff jointly and severally the sum of P 1,50,000.-00 as loss of expected income for
plaintiff brought about the accident in controversy and which is the result of the negligence of the
defendants;

(3) To pay the plaintiff jointly and severally the sum of P 10,000. as moral damages for the
unexpected and sudden withdrawal of plaintiff from his lifetime career as a marketing man; mental
anguish, wounded feeling, serious anxiety, social humiliation, besmirched reputation, feeling of
economic insecurity, and the untold sorrows and frustration in life experienced by plaintiff and his
family since the accident in controversy up to the present time;

(4) To pay plaintiff jointly and severally the sum of P 10,000.00 as damages for the wanton
disregard of defendants to settle amicably this case with the plaintiff before the filing of this case in
court for a smaller amount.

(5) To pay the plaintiff jointly and severally the sum of P 4,500.00 due as and for attorney's fees;
and

(6) The cost of suit. (Emphasis supplied)

Phoenix and Carbonel appealed to the Intermediate Appellate Court. That court in CA-G.R. No. 65476
affirmed the decision of the trial court but modified the award of damages to the following extent:

1. The award of P15,000.00 as compensatory damages was reduced to P6,460.71, the latter being
the only amount that the appellate court found the plaintiff to have proved as actually sustained by him;

2. The award of P150,000.00 as loss of expected income was reduced to P100,000.00, basically
because Dionisio had voluntarily resigned his job such that, in the opinion of the appellate court, his loss
of income "was not solely attributable to the accident in question;" and

3. The award of P100,000.00 as moral damages was held by the appellate court as excessive and
unconscionable and hence reduced to P50,000.00.

The award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and costs remained
untouched.

This decision of the Intermediate Appellate Court is now before us on a petition for review.

Both the trial court and the appellate court had made fairly explicit findings of fact relating to the
manner in which the dump truck was parked along General Lacuna Street on the basis of which both
courts drew the inference that there was negligence on the part of Carbonel, the dump truck driver, and
that this negligence was the proximate cause of the accident and Dionisio's injuries. We note, however,
that both courts failed to pass upon the defense raised by Carbonel and Phoenix that the true legal and
proximate cause of the accident was not the way in which the dump truck had been parked but rather
the reckless way in which Dionisio had driven his car that night when he smashed into the dump truck.
The Intermediate Appellate Court in its questioned decision casually conceded that Dionisio was "in
some way, negligent" but apparently failed to see the relevance of Dionisio's negligence and made no
further mention of it. We have examined the record both before the trial court and the Intermediate
Appellate Court and we find that both parties had placed into the record sufficient evidence on the basis
of which the trial court and the appellate court could have and should have made findings of fact
relating to the alleged reckless manner in which Dionisio drove his car that night. The petitioners
Phoenix and Carbonel contend that if there was negligence in the manner in which the dump truck was
parked, that negligence was merely a "passive and static condition" and that private respondent
Dionisio's recklessness constituted an intervening, efficient cause determinative of the accident and the
injuries he sustained. The need to administer substantial justice as between the parties in this case,
without having to remand it back to the trial court after eleven years, compels us to address directly the
contention put forward by the petitioners and to examine for ourselves the record pertaining to
Dionisio's alleged negligence which must bear upon the liability, or extent of liability, of Phoenix and
Carbonel.

There are four factual issues that need to be looked into: (a) whether or not private respondent Dionisio
had a curfew pass valid and effective for that eventful night; (b) whether Dionisio was driving fast or
speeding just before the collision with the dump truck; (c) whether Dionisio had purposely turned off his
car's headlights before contact with the dump truck or whether those headlights accidentally
malfunctioned moments before the collision; and (d) whether Dionisio was intoxicated at the time of
the accident.

As to the first issue relating to the curfew pass, it is clear that no curfew pass was found on the person of
Dionisio immediately after the accident nor was any found in his car. Phoenix's evidence here consisted
of the testimony of Patrolman Cuyno who had taken Dionisio, unconscious, to the Makati Medical
Center for emergency treatment immediately after the accident. At the Makati Medical Center, a nurse
took off Dionisio's clothes and examined them along with the contents of pockets together with
Patrolman Cuyno. 1 Private respondent Dionisio was not able to produce any curfew pass during the
trial. Instead, he offered the explanation that his family may have misplaced his curfew pass. He also
offered a certification (dated two years after the accident) issued by one Major Benjamin N. Libarnes of
the Zone Integrated Police Intelligence Unit of Camp Olivas, San Fernando, Pampanga, which was said to
have authority to issue curfew passes for Pampanga and Metro Manila. This certification was to the
effect that private respondent Dionisio had a valid curfew pass. This certification did not, however,
specify any pass serial number or date or period of effectivity of the supposed curfew pass. We find that
private respondent Dionisio was unable to prove possession of a valid curfew pass during the night of
the accident and that the preponderance of evidence shows that he did not have such a pass during that
night. The relevance of possession or non-possession of a curfew pass that night lies in the light it tends
to shed on the other related issues: whether Dionisio was speeding home and whether he had indeed
purposely put out his headlights before the accident, in order to avoid detection and possibly arrest by
the police in the nearby police station for travelling after the onset of curfew without a valid curfew
pass.

On the second issue whether or not Dionisio was speeding home that night both the trial court and
the appellate court were completely silent.

The defendants in the trial court introduced the testimony of Patrolman Cuyno who was at the scene of
the accident almost immediately after it occurred, the police station where he was based being barely
200 meters away. Patrolman Cuyno testified that people who had gathered at the scene of the accident
told him that Dionisio's car was "moving fast" and did not have its headlights on. 2 Dionisio, on the other
hand, claimed that he was travelling at a moderate speed at 30 kilometers per hour and had just crossed
the intersection of General Santos and General Lacuna Streets and had started to accelerate when his
headlights failed just before the collision took place. 3

Private respondent Dionisio asserts that Patrolman Cuyno's testimony was hearsay and did not fag
within any of the recognized exceptions to the hearsay rule since the facts he testified to were not
acquired by him through official information and had not been given by the informants pursuant to any
duty to do so. Private respondent's objection fails to take account of the fact that the testimony of
Patrolman Cuyno is admissible not under the official records exception to the hearsay rule 4 but rather
as part of the res gestae. 5 Testimonial evidence under this exception to the hearsay rule consists of
excited utterances made on the occasion of an occurrence or event sufficiently startling in nature so as
to render inoperative the normal reflective thought processes of the observer and hence made as a
spontaneous reaction to the occurrence or event, and not the result of reflective thought. 6

We think that an automobile speeding down a street and suddenly smashing into a stationary object in
the dead of night is a sufficiently startling event as to evoke spontaneous, rather than reflective,
reactions from observers who happened to be around at that time. The testimony of Patrolman Cuyno
was therefore admissible as part of the res gestae and should have been considered by the trial court.
Clearly, substantial weight should have been ascribed to such testimony, even though it did not, as it
could not, have purported to describe quantitatively the precise velocity at winch Dionisio was travelling
just before impact with the Phoenix dump truck.

A third related issue is whether Dionisio purposely turned off his headlights, or whether his headlights
accidentally malfunctioned, just moments before the accident. The Intermediate Appellate Court
expressly found that the headlights of Dionisio's car went off as he crossed the intersection but was non-
committal as to why they did so. It is the petitioners' contention that Dionisio purposely shut off his
headlights even before he reached the intersection so as not to be detected by the police in the police
precinct which he (being a resident in the area) knew was not far away from the intersection. We
believe that the petitioners' theory is a more credible explanation than that offered by private
respondent Dionisio i.e., that he had his headlights on but that, at the crucial moment, these had in
some mysterious if convenient way malfunctioned and gone off, although he succeeded in switching his
lights on again at "bright" split seconds before contact with the dump truck.

A fourth and final issue relates to whether Dionisio was intoxicated at the time of the accident. The
evidence here consisted of the testimony of Patrolman Cuyno to the effect that private respondent
Dionisio smelled of liquor at the time he was taken from his smashed car and brought to the Makati
Medical Center in an unconscious condition. 7 This testimony has to be taken in conjunction with the
admission of Dionisio that he had taken "a shot or two" of liquor before dinner with his boss that night.
We do not believe that this evidence is sufficient to show that Dionisio was so heavily under the
influence of liquor as to constitute his driving a motor vehicle per se an act of reckless imprudence. 8
There simply is not enough evidence to show how much liquor he had in fact taken and the effects of
that upon his physical faculties or upon his judgment or mental alertness. We are also aware that "one
shot or two" of hard liquor may affect different people differently.

The conclusion we draw from the factual circumstances outlined above is that private respondent
Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster
than he should have been. Worse, he extinguished his headlights at or near the intersection of General
Lacuna and General Santos Streets and thus did not see the dump truck that was parked askew and
sticking out onto the road lane.

Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the
legal and proximate cause of the accident and of Dionisio's injuries was the wrongful or negligent
manner in which the dump truck was parked in other words, the negligence of petitioner Carbonel. That
there was a reasonable relationship between petitioner Carbonel's negligence on the one hand and the
accident and respondent's injuries on the other hand, is quite clear. Put in a slightly different manner,
the collision of Dionisio's car with the dump truck was a natural and foreseeable consequence of the
truck driver's negligence.

The petitioners, however, urge that the truck driver's negligence was merely a "passive and static
condition" and that private respondent Dionisio's negligence was an "efficient intervening cause and
that consequently Dionisio's negligence must be regarded as the legal and proximate cause of the
accident rather than the earlier negligence of Carbonel. We note that the petitioners' arguments are
drawn from a reading of some of the older cases in various jurisdictions in the United States but we are
unable to persuade ourselves that these arguments have any validity for our jurisdiction. We note,
firstly, that even in the United States, the distinctions between "cause" and "condition" which the
'petitioners would have us adopt have already been "almost entirely discredited." Professors and Keeton
make this quite clear:

Cause and condition. Many courts have sought to distinguish between the active "cause" of the harm
and the existing "conditions" upon which that cause operated. If the defendant has created only a
passive static condition which made the damage possible, the defendant is said not to be liable. But so
far as the fact of causation is concerned, in the sense of necessary antecedents which have played an
important part in producing the result it is quite impossible to distinguish between active forces and
passive situations, particularly since, as is invariably the case, the latter are the result of other active
forces which have gone before. The defendant who spills gasoline about the premises creates a
"condition," but the act may be culpable because of the danger of fire. When a spark ignites the
gasoline, the condition has done quite as much to bring about the fire as the spark; and since that is the
very risk which the defendant has created, the defendant will not escape responsibility. Even the lapse
of a considerable time during which the "condition" remains static will not necessarily affect liability;
one who digs a trench in the highway may still be liable to another who fans into it a month afterward.
"Cause" and "condition" still find occasional mention in the decisions; but the distinction is now almost
entirely discredited. So far as it has any validity at all, it must refer to the type of case where the forces
set in operation by the defendant have come to rest in a position of apparent safety, and some new
force intervenes. But even in such cases, it is not the distinction between "cause" and "condition" which
is important but the nature of the risk and the character of the intervening cause. 9

We believe, secondly, that the truck driver's negligence far from being a "passive and static condition"
was rather an indispensable and efficient cause. The collision between the dump truck and the private
respondent's car would in an probability not have occurred had the dump truck not been parked askew
without any warning lights or reflector devices. The improper parking of the dump truck created an
unreasonable risk of injury for anyone driving down General Lacuna Street and for having so created this
risk, the truck driver must be held responsible. In our view, Dionisio's negligence, although later in point
of time than the truck driver's negligence and therefore closer to the accident, was not an efficient
intervening or independent cause. What the Petitioners describe as an "intervening cause" was no more
than a foreseeable consequent manner which the truck driver had parked the dump truck. In other
words, the petitioner truck driver owed a duty to private respondent Dionisio and others similarly
situated not to impose upon them the very risk the truck driver had created. Dionisio's negligence was
not of an independent and overpowering nature as to cut, as it were, the chain of causation in fact
between the improper parking of the dump truck and the accident, nor to sever the juris vinculum of
liability. It is helpful to quote once more from Professor and Keeton:

Foreseeable Intervening Causes. If the intervening cause is one which in ordinary human experience is
reasonably to be anticipated or one which the defendant has reason to anticipate under the particular
circumstances, the defendant may be negligence among other reasons, because of failure to guard
against it; or the defendant may be negligent only for that reason. Thus one who sets a fire may be
required to foresee that an ordinary, usual and customary wind arising later wig spread it beyond the
defendant's own property, and therefore to take precautions to prevent that event. The person who
leaves the combustible or explosive material exposed in a public place may foresee the risk of fire from
some independent source. ... In all of these cases there is an intervening cause combining with the
defendant's conduct to produce the result and in each case the defendant's negligence consists in
failure to protect the plaintiff against that very risk.

Obviously the defendant cannot be relieved from liability by the fact that the risk or a substantial and
important part of the risk, to which the defendant has subjected the plaintiff has indeed come to pass.
Foreseeable intervening forces are within the scope original risk, and hence of the defendant's
negligence. The courts are quite generally agreed that intervening causes which fall fairly in this
category will not supersede the defendant's responsibility.

Thus it has been held that a defendant will be required to anticipate the usual weather of the vicinity,
including all ordinary forces of nature such as usual wind or rain, or snow or frost or fog or even
lightning; that one who leaves an obstruction on the road or a railroad track should foresee that a
vehicle or a train will run into it; ...

The risk created by the defendant may include the intervention of the foreseeable negligence of others.
... [The standard of reasonable conduct may require the defendant to protect the plaintiff against 'that
occasional negligence which is one of the ordinary incidents of human life, and therefore to be
anticipated.' Thus, a defendant who blocks the sidewalk and forces the plaintiff to walk in a street where
the plaintiff will be exposed to the risks of heavy traffic becomes liable when the plaintiff is run down by
a car, even though the car is negligently driven; and one who parks an automobile on the highway
without lights at night is not relieved of responsibility when another negligently drives into it. --- 10

We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and
proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently
respondent Dionisio may recover damages though such damages are subject to mitigation by the courts
(Article 2179, Civil Code of the Philippines).

Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The theory here of
petitioners is that while the petitioner truck driver was negligent, private respondent Dionisio had the
"last clear chance" of avoiding the accident and hence his injuries, and that Dionisio having failed to take
that "last clear chance" must bear his own injuries alone. The last clear chance doctrine of the common
law was imported into our jurisdiction by Picart vs. Smith 11 but it is a matter for debate whether, or to
what extent, it has found its way into the Civil Code of the Philippines. The historical function of that
doctrine in the common law was to mitigate the harshness of another common law doctrine or rule that
of contributory negligence. 12 The common law rule of contributory negligence prevented any recovery
at all by a plaintiff who was also negligent, even if the plaintiff's negligence was relatively minor as
compared with the wrongful act or omission of the defendant. 13 The common law notion of last clear
chance permitted courts to grant recovery to a plaintiff who had also been negligent provided that the
defendant had the last clear chance to avoid the casualty and failed to do so. 14 Accordingly, it is
difficult to see what role, if any, the common law last clear chance doctrine has to play in a jurisdiction
where the common law concept of contributory negligence as an absolute bar to recovery by the
plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code of the Philippines. 15

Is there perhaps a general concept of "last clear chance" that may be extracted from its common law
matrix and utilized as a general rule in negligence cases in a civil law jurisdiction like ours? We do not
believe so. Under Article 2179, the task of a court, in technical terms, is to determine whose negligence
the plaintiff's or the defendant's was the legal or proximate cause of the injury. That task is not
simply or even primarily an exercise in chronology or physics, as the petitioners seem to imply by the
use of terms like "last" or "intervening" or "immediate." The relative location in the continuum of time
of the plaintiff's and the defendant's negligent acts or omissions, is only one of the relevant factors that
may be taken into account. Of more fundamental importance are the nature of the negligent act or
omission of each party and the character and gravity of the risks created by such act or omission for the
rest of the community. The petitioners urge that the truck driver (and therefore his employer) should be
absolved from responsibility for his own prior negligence because the unfortunate plaintiff failed to act
with that increased diligence which had become necessary to avoid the peril precisely created by the
truck driver's own wrongful act or omission. To accept this proposition is to come too close to wiping
out the fundamental principle of law that a man must respond for the forseeable consequences of his
own negligent act or omission. Our law on quasi-delicts seeks to reduce the risks and burdens of living in
society and to allocate them among the members of society. To accept the petitioners' pro-position
must tend to weaken the very bonds of society.

Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his
employer Phoenix 16 in supervising its employees properly and adequately. The respondent appellate
court in effect found, correctly in our opinion, that Phoenix was not able to overcome this presumption
of negligence. The circumstance that Phoenix had allowed its truck driver to bring the dump truck to his
home whenever there was work to be done early the following morning, when coupled with the failure
to show any effort on the part of Phoenix to supervise the manner in which the dump truck is parked
when away from company premises, is an affirmative showing of culpa in vigilando on the part of
Phoenix.

Turning to the award of damages and taking into account the comparative negligence of private
respondent Dionisio on one hand and petitioners Carbonel and Phoenix upon the other hand, 17 we
believe that the demands of substantial justice are satisfied by allocating most of the damages on a 20-
80 ratio. Thus, 20% of the damages awarded by the respondent appellate court, except the award of
P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by private
respondent Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and Phoenix who
shall be solidarity liable therefor to the former. The award of exemplary damages and attorney's fees
and costs shall be borne exclusively by the petitioners. Phoenix is of course entitled to reimbursement
from Carbonel. 18 We see no sufficient reason for disturbing the reduced award of damages made by
the respondent appellate court.

WHEREFORE, the decision of the respondent appellate court is modified by reducing the aggregate
amount of compensatory damages, loss of expected income and moral damages private respondent
Dionisio is entitled to by 20% of such amount. Costs against the petitioners.

SO ORDERED.

G.R. No. 83491 August 27, 1990

MA-AO SUGAR CENTRAL CO., INC. and GUILLERMO ARANETA, petitioners,
vs.
HON. COURT OF APPEALS and HERMINIA FAMOSO, respondents.

Jalandoni, Herrera, Del Castillo & Associates for petitioners.

Napoleon Corral for private respondent.



CRUZ, J.:

To say the least, the Court views with regret the adamant refusal of petitioner Ma-ao Sugar Central to
recompense the private respondent for the death of Julio Famoso, their main source of support, who
was killed in line of duty while in its employ. It is not only a matter of law but also of compassion on
which we are called upon to rule today. We shall state at the outset that on both counts the petition
must fail.

On March 22, 1980, Famoso was riding with a co-employee in the caboose or "carbonera" of Plymouth
No. 12, a cargo train of the petitioner, when the locomotive was suddenly derailed. He and his
companion jumped off to escape injury, but the train fell on its side, caught his legs by its wheels and
pinned him down. He was declared dead on the spot. 1

The claims for death and other benefits having been denied by the petitioner, the herein private
respondent filed suit in the Regional Trial Court of Bago City. Judge Marietta Hobilla-Alinio ruled in her
favor but deducted from the total damages awarded 25% thereof for the decedent's contributory
negligence and the total pension of P41,367.60 private respondent and her children would be receiving
from the SSS for the next five years. The dispositive portion of the decision read:

WHEREFORE, in view of the foregoing facts and circumstances present in this case, the Court order, as it
does hereby order the defendant Ma-ao Sugar Central thru its Manager Mr. Guillermo Y. Araneta to pay
plaintiff the following amount:

P30,000.00 for the death of plaintiff's husband, the late
Julio Famoso

P30,000.00 for actual, exemplary and moral damages

P10,000.00 loss of earnings for twenty (20) years

P3,000.00 funeral expenses



P73,000.00 Total Damages

Less: P18,250.00 25% for the deceased's contributory
negligence

Less: P41,367.60 pension plaintiff and her minor children would


be receiving for five (5) years from the SSS

Pl3,382.40

Plus: P3,000.00 Attorney's fees and cost of this suit



Pl6,382.40 Total amount payable to the plaintiff.



SO ORDERED.

The widow appealed, claiming that the deductions were illegal. So did the petitioner, but on the ground
that it was not negligent and therefore not liable at all.

In its own decision, the Court of Appeals 2 sustained the rulings of the trial court except as to the
contributory negligence of the deceased and disallowed the deductions protested by the private
respondent. Thus, the respondent court declared:

WHEREFORE, the decision appealed from is MODIFIED by ordering the defendant-appellant to pay the
plaintiff-appellee the following amounts:

P30,000.00, for the death of Julio Famoso

P30,000.00, for actual, exemplary and moral damages

P10,000.00, for loss of earnings for twenty (20) years

P3,000.00, for funeral expenses

P3,000.00, for attorney's fees



P76,000.00 Total Amount

========

In this petition, the respondent court is faulted for finding the petitioner guilty of negligence
notwithstanding its defense of due diligence under Article 2176 of the Civil Code and for disallowing the
deductions made by the trial court.

Investigation of the accident revealed that the derailment of the locomotive was caused by protruding
rails which had come loose because they were not connected and fixed in place by fish plates. Fish
plates are described as strips of iron 8" to 12" long and 3 1/2" thick which are attached to the rails by 4
bolts, two on each side, to keep the rails aligned. Although they could be removed only with special
equipment, the fish plates that should have kept the rails aligned could not be found at the scene of the
accident.

There is no question that the maintenance of the rails, for the purpose inter alia of preventing
derailments, was the responsibility of the petitioner, and that this responsibility was not discharged.
According to Jose Treyes, its own witness, who was in charge of the control and supervision of its train
operations, cases of derailment in the milling district were frequent and there were even times when
such derailments were reported every hour. 3 The petitioner should therefore have taken more prudent
steps to prevent such accidents instead of waiting until a life was finally lost because of its negligence.

The argument that no one had been hurt before because of such derailments is of course not
acceptable. And neither are we impressed by the claim that the brakemen and the conductors were
required to report any defect in the condition of the railways and to fill out prescribed forms for the
purpose. For what is important is that the petitioner should act on these reports and not merely receive
and file them. The fact that it is not easy to detect if the fish plates are missing is no excuse either.
Indeed, it should stress all the more the need for the responsible employees of the petitioner to make
periodic checks and actually go down to the railroad tracks and see if the fish plates were in place.

It is argued that the locomotive that was derailed was on its way back and that it had passed the same
rails earlier without accident. The suggestion is that the rails were properly aligned then, but that does
not necessarily mean they were still aligned afterwards. It is possible that the fish plates were loosened
and detached during its first trip and the rails were as a result already mis-aligned during the return trip.
But the Court feels that even this was unlikely, for, as earlier noted, the fish plates were supposed to
have been bolted to the rails and could be removed only with special tools. The fact that the fish plates
were not found later at the scene of the mishap may show they were never there at all to begin with or
had been removed long before.

At any rate, the absence of the fish plates whatever the cause or reason is by itself alone proof of the
negligence of the petitioner. Res ipsa loquitur. The doctrine was described recently in Layugan v.
Intermediate Appellate Court, 4 thus:

Where the thing which causes injury is shown to be under the management of the defendant, and the
accident is such as in the ordinary course of things does not happen if those who have the management
use proper care, it affords reasonable evidence, in the absence of an explanation by the defendant, that
the accident arose from want of care.

The petitioner also disclaims liability on the ground of Article 2176 of the Civil Code, contending it has
exercised due diligence in the selection and supervision of its employees. The Court cannot agree. The
record shows it was in fact lax in requiring them to exercise the necessary vigilance in maintaining the
rails in good condition to prevent the derailments that sometimes happened "every hour." Obviously,
merely ordering the brakemen and conductors to fill out prescribed forms reporting derailments-which
reports have not been acted upon as shown by the hourly derailments is-not the kind of supervision
envisioned by the Civil Code.

We also do not see how the decedent can be held guilty of contributory negligence from the mere fact
that he was not at his assigned station when the train was derailed. That might have been a violation of
company rules but could not have directly contributed to his injury, as the petitioner suggests. It is pure
speculation to suppose that he would not have been injured if he had stayed in the front car rather than
at the back and that he had been killed because he chose to ride in the caboose.

Contributory negligence has been defined as "the act or omission amounting to want of ordinary care on
the part of the person injured which, concurring with the defendant's negligence, is the proximate cause
of the
injury." 5 It has been held that "to hold a person as having contributed to his injuries, it must be shown
that he performed an act that brought about his injuries in disregard of warnings or signs of an
impending danger to health and body." 6 There is no showing that the caboose where Famoso was
riding was a dangerous place and that he recklessly dared to stay there despite warnings or signs of
impending danger.

The last point raised by the petitioner is easily resolved. Citing the case of Floresca v. Philex Mining
Corporation, 7 it argues that the respondent court erred in disauthorizing the deduction from the total
damages awarded the private respondent of the amount of P41,367.60, representing the pension to be
received by the private respondent from the Social Security System for a period of five years. The
argument is that such deduction was quite proper because of Art. 173 of the Labor Code, as amended.
This article provides that any amount received by the heirs of a deceased employee from the Employees
Compensation Commission, whose funds are administered by the SSS, shall be exclusive of all other
amounts that may otherwise be claimed under the Civil Code and other pertinent laws.

The amount to be paid by the SSS represents the usual pension received by the heirs of a deceased
employee who was a member of the SSS at the time of his death and had regularly contributed his
premiums as required by the System. The pension is the benefit derivable from such contributions. It
does not represent the death benefits payable under the Workmen's Compensation Act to an employee
who dies as a result of a work-connected injury. Indeed, the certification from the SSS 8 submitted by
the petitioner is simply to the effect that:

TO WHOM IT MAY CONCERN:

This is to certify that Mrs. Herminia Vda. de Famoso is a recipient of a monthly pension from the Social
Security System arising from the death of her late husband, Julio Famoso, an SSS member with SSS No.
07-018173-1.

This certification is issued to Ma-ao Sugar Central for whatever legal purpose it may serve best.

Issued this 8th day of April 1983 in Bacolod City, Philippines.

GODOFREDO S. SISON

Regional Manager

By: (SGD.) COSME Q. BERMEO, JR.

Chief, Benefits Branch

It does not indicate that the pension is to be taken from the funds of the ECC. The certification would
have said so if the pension represented the death benefits accruing to the heirs under the Workmen's
Compensation Act.

This conclusion is supported by the express provision of Art. 173 as amended, which categorically states
that:

Art. 173. Exclusiveness of liability. Unless otherwise provided, the liability of the State Insurance Fund
under this Title shall be exclusive and in place of all other liabilities of the employer to the employee, his
dependents or anyone otherwise entitled to receive damages on behalf of the employee or his
dependents. The payment of compensation under this Title shall not bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred
sixty-one, as amended, Commonwealth Act Numbered One hundred eighty-six, as amended, Republic
Act Numbered Six hundred ten, as amended, Republic Act Numbered Forty-eight hundred sixty-four, as
amended and other laws whose benefits are administered by the System or by other agencies of the
government. (Emphasis supplied).

Rep. Act No. 1161, as amended, is the Social Security Law.

As observed by Justice J.B.L. Reyes in the case of Valencia v. Manila Yacht Club, 9 which is still
controlling:

. . . By their nature and purpose, the sickness or disability benefits to which a member of the System
may be entitled under the Social Security law (Rep. Act No. 1161, as amended by Rep. Acts Nos. 1792
and 2658) are not the same as the compensation that may be claimed against the employer under the
Workmen's Compensation Act or the Civil Code, so that payment to the member employee of social
security benefits would not wipe out or extinguish the employer's liability for the injury or illness
contracted by his employee in the course of or during the employment. It must be realized that, under
the Workmen's Compensation Act (or the Civil Code, in a proper case), the employer is required to
compensate the employee for the sickness or injury arising in the course of the employment because
the industry is supposed to be responsible therefore; whereas, under the Social Security Act, payment is
being made because the hazard specifically covered by the membership, and for which the employee
had put up his own money, had taken place. As this Court had said:

. . . To deny payment of social security benefits because the death or injury or confinement is
compensable under the Workmen's Compensation Act would be to deprive the employees members of
the System of the statutory benefits bought and paid for by them, since they contributed their money to
the general common fund out of which benefits are paid. In other words, the benefits provided for in
the Workmen's Compensation Act accrues to the employees concerned due to the hazards involved in
their employment and is made a burden on the employment itself However, social security benefits are
paid to the System's members, by reason of their membership therein for which they contribute their
money to a general common fund . . . .

It may be added that whereas social security benefits are intended to provide insurance or protection
against the hazards or risks for which they are established, e.g., disability, sickness, old age or death,
irrespective of whether they arose from or in the course of the employment or not, the compensation
receivable under the Workmen's Compensation law is in the nature of indemnity for the injury or
damage suffered by the employee or his dependents on account of the employment. (Rural Transit
Employees Asso. vs. Bachrach Trans. Co., 21 SCRA 1263 [19671])

And according to Justice Jesus G. Barrera in Benguet Consolidated, Inc. v. Social Security System:" 10

The philosophy underlying the Workmen's Compensation Act is to make the payment of the benefits
provided for therein as a responsibility of the industry, on the ground that it is industry which should
bear the resulting death or injury to employees engaged in the said industry. On the other hand, social
security sickness benefits are not paid as a burden on the industry, but are paid to the members of the
System as a matter of right, whenever the hazards provided for in the law occurs. To deny payment of
social security benefits because the death or injury or confinement is compensable under the
Workmen's Compensation Act would be to deprive the employees-members of the System of the
statutory benefits bought and paid for by them, since they contribute their money to the general
common fund out of which benefits are paid. In other words, the benefits provided for in the
Workmen's Compensation Act accrues to the employees concerned, due to the hazards involved in their
employment and is made a burden on the employment itself However, social security benefits are paid
to the System's members, by reason of their membership therein for which they contributed their
money to a general common fund.

Famoso's widow and nine minor children have since his death sought to recover the just recompense
they need for their support. Instead of lending a sympathetic hand, the petitioner has sought to
frustrate their efforts and has even come to this Court to seek our assistance in defeating their claim.
That relief-and we are happy to say this must be withheld.

WHEREFORE, the appealed decision is AFFIRMED in toto. The petition is DENIED, with costs against the
petitioner.

SO ORDERED.

G.R. No. 124354 December 29, 1999

ROGELIO E. RAMOS and ERLINDA RAMOS, in their own behalf and as natural guardians of the minors,
ROMMEL RAMOS, ROY RODERICK RAMOS and RON RAYMOND RAMOS, petitioners,
vs.
COURT OF APPEALS, DELOS SANTOS MEDICAL CENTER, DR. ORLINO HOSAKA and DRA. PERFECTA
GUTIERREZ, respondents.



KAPUNAN, J.:

The Hippocratic Oath mandates physicians to give primordial consideration to the health and welfare of
their patients. If a doctor fails to live up to this precept, he is made accountable for his acts. A mistake,
through gross negligence or incompetence or plain human error, may spell the difference between life
and death. In this sense, the doctor plays God on his patient's fate. 1

In the case at bar, the Court is called upon to rule whether a surgeon, an anesthesiologist and a hospital
should be made liable for the unfortunate comatose condition of a patient scheduled for
cholecystectomy. 2

Petitioners seek the reversal of the decision 3 of the Court of Appeals, dated 29 May 1995, which
overturned the decision 4 of the Regional Trial Court, dated 30 January 1992, finding private
respondents liable for damages arising from negligence in the performance of their professional duties
towards petitioner Erlinda Ramos resulting in her comatose condition.

The antecedent facts as summarized by the trial court are reproduced hereunder:

Plaintiff Erlinda Ramos was, until the afternoon of June 17, 1985, a 47-year old (Exh. "A") robust woman
(TSN, October 19, 1989, p. 10). Except for occasional complaints of discomfort due to pains allegedly
caused by the presence of a stone in her gall bladder (TSN, January 13, 1988, pp. 4-5), she was as normal
as any other woman. Married to Rogelio E. Ramos, an executive of Philippine Long Distance Telephone
Company, she has three children whose names are Rommel Ramos, Roy Roderick Ramos and Ron
Raymond Ramos (TSN, October 19, 1989, pp. 5-6).

Because the discomforts somehow interfered with her normal ways, she sought professional advice. She
was advised to undergo an operation for the removal of a stone in her gall bladder (TSN, January 13,
1988, p. 5). She underwent a series of examinations which included blood and urine tests (Exhs. "A" and
"C") which indicated she was fit for surgery.

Through the intercession of a mutual friend, Dr. Buenviaje (TSN, January 13, 1988, p. 7), she and her
husband Rogelio met for the first time Dr. Orlino Hozaka (should be Hosaka; see TSN, February 20, 1990,
p. 3), one of the defendants in this case, on June 10, 1985. They agreed that their date at the operating
table at the DLSMC (another defendant), would be on June 17, 1985 at 9:00 A.M.. Dr. Hosaka decided
that she should undergo a "cholecystectomy" operation after examining the documents (findings from
the Capitol Medical Center, FEU Hospital and DLSMC) presented to him. Rogelio E. Ramos, however,
asked Dr. Hosaka to look for a good anesthesiologist. Dr. Hosaka, in turn, assured Rogelio that he will get
a good anesthesiologist. Dr. Hosaka charged a fee of P16,000.00, which was to include the
anesthesiologist's fee and which was to be paid after the operation (TSN, October 19, 1989, pp. 14-15,
22-23, 31-33; TSN, February 27, 1990, p. 13; and TSN, November 9, 1989, pp. 3-4, 10, 17).

A day before the scheduled date of operation, she was admitted at one of the rooms of the DLSMC,
located along E. Rodriguez Avenue, Quezon City (TSN, October 19,1989, p. 11).

At around 7:30 A.M. of June 17, 1985 and while still in her room, she was prepared for the operation by
the hospital staff. Her sister-in-law, Herminda Cruz, who was the Dean of the College of Nursing at the
Capitol Medical Center, was also there for moral support. She reiterated her previous request for
Herminda to be with her even during the operation. After praying, she was given injections. Her hands
were held by Herminda as they went down from her room to the operating room (TSN, January 13,
1988, pp. 9-11). Her husband, Rogelio, was also with her (TSN, October 19, 1989, p. 18). At the operating
room, Herminda saw about two or three nurses and Dr. Perfecta Gutierrez, the other defendant, who
was to administer anesthesia. Although not a member of the hospital staff, Herminda introduced herself
as Dean of the College of Nursing at the Capitol Medical Center who was to provide moral support to the
patient, to them. Herminda was allowed to stay inside the operating room.

At around 9:30 A.M., Dr. Gutierrez reached a nearby phone to look for Dr. Hosaka who was not yet in
(TSN, January 13, 1988, pp. 11-12). Dr. Gutierrez thereafter informed Herminda Cruz about the prospect
of a delay in the arrival of Dr. Hosaka. Herminda then went back to the patient who asked, "Mindy, wala
pa ba ang Doctor"? The former replied, "Huwag kang mag-alaala, darating na iyon" (Ibid.).

Thereafter, Herminda went out of the operating room and informed the patient's husband, Rogelio, that
the doctor was not yet around (id., p. 13). When she returned to the operating room, the patient told
her, "Mindy, inip na inip na ako, ikuha mo ako ng ibang Doctor." So, she went out again and told Rogelio
about what the patient said (id., p. 15). Thereafter, she returned to the operating room.

At around 10:00 A.M., Rogelio E. Ramos was "already dying [and] waiting for the arrival of the doctor"
even as he did his best to find somebody who will allow him to pull out his wife from the operating room
(TSN, October 19, 1989, pp. 19-20). He also thought of the feeling of his wife, who was inside the
operating room waiting for the doctor to arrive (ibid.). At almost 12:00 noon, he met Dr. Garcia who
remarked that he (Dr. Garcia) was also tired of waiting for Dr. Hosaka to arrive (id., p. 21). While talking
to Dr. Garcia at around 12:10 P.M., he came to know that Dr. Hosaka arrived as a nurse remarked,
"Nandiyan na si Dr. Hosaka, dumating na raw." Upon hearing those words, he went down to the lobby
and waited for the operation to be completed (id., pp. 16, 29-30).

At about 12:15 P.M., Herminda Cruz, who was inside the operating room with the patient, heard
somebody say that "Dr. Hosaka is already here." She then saw people inside the operating room
"moving, doing this and that, [and] preparing the patient for the operation" (TSN, January 13, 1988, p.
16). As she held the hand of Erlinda Ramos, she then saw Dr. Gutierrez intubating the hapless patient.
She thereafter heard Dr. Gutierrez say, "ang hirap ma-intubate nito, mali yata ang pagkakapasok. O
lumalaki ang tiyan" (id., p. 17). Because of the remarks of Dra. Gutierrez, she focused her attention on
what Dr. Gutierrez was doing. She thereafter noticed bluish discoloration of the nailbeds of the left hand
of the hapless Erlinda even as Dr. Hosaka approached her. She then heard Dr. Hosaka issue an order for
someone to call Dr. Calderon, another anesthesiologist (id., p. 19). After Dr. Calderon arrived at the
operating room, she saw this anesthesiologist trying to intubate the patient. The patient's nailbed
became bluish and the patient was placed in a trendelenburg position a position where the head of
the patient is placed in a position lower than her feet which is an indication that there is a decrease of
blood supply to the patient's brain (Id., pp. 19-20). Immediately thereafter, she went out of the
operating room, and she told Rogelio E. Ramos "that something wrong was . . . happening" (Ibid.). Dr.
Calderon was then able to intubate the patient (TSN, July 25, 1991, p. 9).

Meanwhile, Rogelio, who was outside the operating room, saw a respiratory machine being rushed
towards the door of the operating room. He also saw several doctors rushing towards the operating
room. When informed by Herminda Cruz that something wrong was happening, he told her (Herminda)
to be back with the patient inside the operating room (TSN, October 19, 1989, pp. 25-28).

Herminda Cruz immediately rushed back, and saw that the patient was still in trendelenburg position
(TSN, January 13, 1988, p. 20). At almost 3:00 P.M. of that fateful day, she saw the patient taken to the
Intensive Care Unit (ICU).

About two days thereafter, Rogelio E. Ramos was able to talk to Dr. Hosaka. The latter informed the
former that something went wrong during the intubation. Reacting to what was told to him, Rogelio
reminded the doctor that the condition of his wife would not have happened, had he (Dr. Hosaka)
looked for a good anesthesiologist (TSN, October 19, 1989, p. 31).

Doctors Gutierrez and Hosaka were also asked by the hospital to explain what happened to the patient.
The doctors explained that the patient had bronchospasm (TSN, November 15, 1990, pp. 26-27).

Erlinda Ramos stayed at the ICU for a month. About four months thereafter or on November 15, 1985,
the patient was released from the hospital.

During the whole period of her confinement, she incurred hospital bills amounting to P93,542.25 which
is the subject of a promissory note and affidavit of undertaking executed by Rogelio E. Ramos in favor of
DLSMC. Since that fateful afternoon of June 17, 1985, she has been in a comatose condition. She cannot
do anything. She cannot move any part of her body. She cannot see or hear. She is living on mechanical
means. She suffered brain damage as a result of the absence of oxygen in her brain for four to five
minutes (TSN, November 9, 1989, pp. 21-22). After being discharged from the hospital, she has been
staying in their residence, still needing constant medical attention, with her husband Rogelio incurring a
monthly expense ranging from P8,000.00 to P10,000.00 (TSN, October 19, 1989, pp. 32-34). She was
also diagnosed to be suffering from "diffuse cerebral parenchymal damage" (Exh. "G"; see also TSN,
December 21, 1989,
p. 6). 5

Thus, on 8 January 1986, petitioners filed a civil case 6 for damages with the Regional Trial Court of
Quezon City against herein private respondents alleging negligence in the management and care of
Erlinda Ramos.

During the trial, both parties presented evidence as to the possible cause of Erlinda's injury. Plaintiff
presented the testimonies of Dean Herminda Cruz and Dr. Mariano Gavino to prove that the sustained
by Erlinda was due to lack of oxygen in her brain caused by the faulty management of her airway by
private respondents during the anesthesia phase. On the other hand, private respondents primarily
relied on the expert testimony of Dr. Eduardo Jamora, a pulmonologist, to the effect that the cause of
brain damage was Erlinda's allergic reaction to the anesthetic agent, Thiopental Sodium (Pentothal).

After considering the evidence from both sides, the Regional Trial Court rendered judgment in favor of
petitioners, to wit:

After evaluating the evidence as shown in the finding of facts set forth earlier, and applying the
aforecited provisions of law and jurisprudence to the case at bar, this Court finds and so holds that
defendants are liable to plaintiffs for damages. The defendants were guilty of, at the very least,
negligence in the performance of their duty to plaintiff-patient Erlinda Ramos.

On the part of Dr. Perfecta Gutierrez, this Court finds that she omitted to exercise reasonable care in not
only intubating the patient, but also in not repeating the administration of atropine (TSN, August 20,
1991, pp. 5-10), without due regard to the fact that the patient was inside the operating room for
almost three (3) hours. For after she committed a mistake in intubating [the] patient, the patient's
nailbed became bluish and the patient, thereafter, was placed in trendelenburg position, because of the
decrease of blood supply to the patient's brain. The evidence further shows that the hapless patient
suffered brain damage because of the absence of oxygen in her (patient's) brain for approximately four
to five minutes which, in turn, caused the patient to become comatose.

On the part of Dr. Orlino Hosaka, this Court finds that he is liable for the acts of Dr. Perfecta Gutierrez
whom he had chosen to administer anesthesia on the patient as part of his obligation to provide the
patient a good anesthesiologist', and for arriving for the scheduled operation almost three (3) hours
late.

On the part of DLSMC (the hospital), this Court finds that it is liable for the acts of negligence of the
doctors in their "practice of medicine" in the operating room. Moreover, the hospital is liable for failing
through its responsible officials, to cancel the scheduled operation after Dr. Hosaka inexcusably failed to
arrive on time.

In having held thus, this Court rejects the defense raised by defendants that they have acted with due
care and prudence in rendering medical services to plaintiff-patient. For if the patient was properly
intubated as claimed by them, the patient would not have become comatose. And, the fact that another
anesthesiologist was called to try to intubate the patient after her (the patient's) nailbed turned bluish,
belie their claim. Furthermore, the defendants should have rescheduled the operation to a later date.
This, they should have done, if defendants acted with due care and prudence as the patient's case was
an elective, not an emergency case.

xxx xxx xxx

WHEREFORE, and in view of the foregoing, judgment is rendered in favor of the plaintiffs and against the
defendants. Accordingly, the latter are ordered to pay, jointly and severally, the former the following
sums of money, to wit:

1) the sum of P8,000.00 as actual monthly expenses for the plaintiff Erlinda Ramos reckoned from
November 15, 1985 or in the total sum of P632,000.00 as of April 15, 1992, subject to its being updated;

2) the sum of P100,000.00 as reasonable attorney's fees;

3) the sum of P800,000.00 by way of moral damages and the further sum of P200,000,00 by way of
exemplary damages; and,

4) the costs of the suit.

SO ORDERED. 7

Private respondents seasonably interposed an appeal to the Court of Appeals. The appellate court
rendered a Decision, dated 29 May 1995, reversing the findings of the trial court. The decretal portion of
the decision of the appellate court reads:

WHEREFORE, for the foregoing premises the appealed decision is hereby REVERSED, and the complaint
below against the appellants is hereby ordered DISMISSED. The counterclaim of appellant De Los Santos
Medical Center is GRANTED but only insofar as appellees are hereby ordered to pay the unpaid hospital
bills amounting to P93,542.25, plus legal interest for justice must be tempered with mercy.

SO ORDERED. 8

The decision of the Court of Appeals was received on 9 June 1995 by petitioner Rogelio Ramos who was
mistakenly addressed as "Atty. Rogelio Ramos." No copy of the decision, however, was sent nor received
by the Coronel Law Office, then counsel on record of petitioners. Rogelio referred the decision of the
appellate court to a new lawyer, Atty. Ligsay, only on 20 June 1995, or four (4) days before the
expiration of the reglementary period for filing a motion for reconsideration. On the same day, Atty.
Ligsay, filed with the appellate court a motion for extension of time to file a motion for reconsideration.
The motion for reconsideration was submitted on 4 July 1995. However, the appellate court denied the
motion for extension of time in its Resolution dated 25 July 1995. 9 Meanwhile, petitioners engaged the
services of another counsel, Atty. Sillano, to replace Atty. Ligsay. Atty. Sillano filed on 7 August 1995 a
motion to admit the motion for reconsideration contending that the period to file the appropriate
pleading on the assailed decision had not yet commenced to run as the Division Clerk of Court of the
Court of Appeals had not yet served a copy thereof to the counsel on record. Despite this explanation,
the appellate court still denied the motion to admit the motion for reconsideration of petitioners in its
Resolution, dated 29 March 1996, primarily on the ground that the fifteen-day (15) period for filing a
motion for reconsideration had already expired, to wit:

We said in our Resolution on July 25, 1995, that the filing of a Motion for Reconsideration cannot be
extended; precisely, the Motion for Extension (Rollo, p. 12) was denied. It is, on the other hand,
admitted in the latter Motion that plaintiffs/appellees received a copy of the decision as early as June 9,
1995. Computation wise, the period to file a Motion for Reconsideration expired on June 24. The Motion
for Reconsideration, in turn, was received by the Court of Appeals already on July 4, necessarily, the 15-
day period already passed. For that alone, the latter should be denied.

Even assuming admissibility of the Motion for the Reconsideration, but after considering the
Comment/Opposition, the former, for lack of merit, is hereby DENIED.

SO ORDERED. 10

A copy of the above resolution was received by Atty. Sillano on 11 April 1996. The next day, or on 12
April 1996, Atty. Sillano filed before this Court a motion for extension of time to file the present petition
for certiorari under Rule 45. The Court granted the motion for extension of time and gave petitioners
additional thirty (30) days after the expiration of the fifteen-day (15) period counted from the receipt of
the resolution of the Court of Appeals within which to submit the petition. The due date fell on 27 May
1996. The petition was filed on 9 May 1996, well within the extended period given by the Court.

Petitioners assail the decision of the Court of Appeals on the following grounds:

I

IN PUTTING MUCH RELIANCE ON THE TESTIMONIES OF RESPONDENTS DRA. GUTIERREZ, DRA.
CALDERON AND DR. JAMORA;

II

IN FINDING THAT THE NEGLIGENCE OF THE RESPONDENTS DID NOT CAUSE THE UNFORTUNATE
COMATOSE CONDITION OF PETITIONER ERLINDA RAMOS;

III

IN NOT APPLYING THE DOCTRINE OF RES IPSA LOQUITUR. 11

Before we discuss the merits of the case, we shall first dispose of the procedural issue on the timeliness
of the petition in relation to the motion for reconsideration filed by petitioners with the Court of
Appeals. In their
Comment, 12 private respondents contend that the petition should not be given due course since the
motion for reconsideration of the petitioners on the decision of the Court of Appeals was validly
dismissed by the appellate court for having been filed beyond the reglementary period. We do not
agree.

A careful review of the records reveals that the reason behind the delay in filing the motion for
reconsideration is attributable to the fact that the decision of the Court of Appeals was not sent to then
counsel on record of petitioners, the Coronel Law Office. In fact, a copy of the decision of the appellate
court was instead sent to and received by petitioner Rogelio Ramos on 9 June 1995 wherein he was
mistakenly addressed as Atty. Rogelio Ramos. Based on the other communications received by
petitioner Rogelio Ramos, the appellate court apparently mistook him for the counsel on record. Thus,
no copy of the decision of the counsel on record. Petitioner, not being a lawyer and unaware of the
prescriptive period for filing a motion for reconsideration, referred the same to a legal counsel only on
20 June 1995.

It is elementary that when a party is represented by counsel, all notices should be sent to the party's
lawyer at his given address. With a few exceptions, notice to a litigant without notice to his counsel on
record is no notice at all. In the present case, since a copy of the decision of the appellate court was not
sent to the counsel on record of petitioner, there can be no sufficient notice to speak of. Hence, the
delay in the filing of the motion for reconsideration cannot be taken against petitioner. Moreover, since
the Court of Appeals already issued a second Resolution, dated 29 March 1996, which superseded the
earlier resolution issued on 25 July 1995, and denied the motion for reconsideration of petitioner, we
believed that the receipt of the former should be considered in determining the timeliness of the filing
of the present petition. Based on this, the petition before us was submitted on time.

After resolving the foregoing procedural issue, we shall now look into the merits of the case. For a more
logical presentation of the discussion we shall first consider the issue on the applicability of the doctrine
of res ipsa loquitur to the instant case. Thereafter, the first two assigned errors shall be tackled in
relation to the res ipsa loquitur doctrine.

Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks for itself."
The phrase "res ipsa loquitur'' is a maxim for the rule that the fact of the occurrence of an injury, taken
with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or
make out a plaintiff's prima facie case, and present a question of fact for defendant to meet with an
explanation. 13 Where the thing which caused the injury complained of is shown to be under the
management of the defendant or his servants and the accident is such as in ordinary course of things
does not happen if those who have its management or control use proper care, it affords reasonable
evidence, in the absence of explanation by the defendant, that the accident arose from or was caused
by the defendant's want of care. 14

The doctrine of res ipsa loquitur is simply a recognition of the postulate that, as a matter of common
knowledge and experience, the very nature of certain types of occurrences may justify an inference of
negligence on the part of the person who controls the instrumentality causing the injury in the absence
of some explanation by the defendant who is charged with negligence. 15 It is grounded in the superior
logic of ordinary human experience and on the basis of such experience or common knowledge,
negligence may be deduced from the mere occurrence of the accident itself. 16 Hence, res ipsa loquitur
is applied in conjunction with the doctrine of common knowledge.

However, much has been said that res ipsa loquitur is not a rule of substantive law and, as such, does
not create or constitute an independent or separate ground of liability. 17 Instead, it is considered as
merely evidentiary or in the nature of a procedural rule. 18 It is regarded as a mode of proof, or a mere
procedural of convenience since it furnishes a substitute for, and relieves a plaintiff of, the burden of
producing specific proof of negligence. 19 In other words, mere invocation and application of the
doctrine does not dispense with the requirement of proof of negligence. It is simply a step in the process
of such proof, permitting the plaintiff to present along with the proof of the accident, enough of the
attending circumstances to invoke the doctrine, creating an inference or presumption of negligence, and
to thereby place on the defendant the burden of going forward with the proof. 20 Still, before resort to
the doctrine may be allowed, the following requisites must be satisfactorily shown:

1. The accident is of a kind which ordinarily does not occur in the absence of someone's
negligence;

2. It is caused by an instrumentality within the exclusive control of the defendant or defendants;
and

3. The possibility of contributing conduct which would make the plaintiff responsible is eliminated.
21

In the above requisites, the fundamental element is the "control of instrumentality" which caused the
damage. 22 Such element of control must be shown to be within the dominion of the defendant. In
order to have the benefit of the rule, a plaintiff, in addition to proving injury or damage, must show a
situation where it is applicable, and must establish that the essential elements of the doctrine were
present in a particular incident. 23

Medical malpractice 24 cases do not escape the application of this doctrine. Thus, res ipsa loquitur has
been applied when the circumstances attendant upon the harm are themselves of such a character as to
justify an inference of negligence as the cause of that harm. 25 The application of res ipsa loquitur in
medical negligence cases presents a question of law since it is a judicial function to determine whether a
certain set of circumstances does, as a matter of law, permit a given inference. 26

Although generally, expert medical testimony is relied upon in malpractice suits to prove that a
physician has done a negligent act or that he has deviated from the standard medical procedure, when
the doctrine of res ipsa loquitur is availed by the plaintiff, the need for expert medical testimony is
dispensed with because the injury itself provides the proof of negligence. 27 The reason is that the
general rule on the necessity of expert testimony applies only to such matters clearly within the domain
of medical science, and not to matters that are within the common knowledge of mankind which may
be testified to by anyone familiar with the facts. 28 Ordinarily, only physicians and surgeons of skill and
experience are competent to testify as to whether a patient has been treated or operated upon with a
reasonable degree of skill and care. However, testimony as to the statements and acts of physicians and
surgeons, external appearances, and manifest conditions which are observable by any one may be given
by non-expert witnesses. 29 Hence, in cases where the res ipsa loquitur is applicable, the court is
permitted to find a physician negligent upon proper proof of injury to the patient, without the aid of
expert testimony, where the court from its fund of common knowledge can determine the proper
standard of care. 30 Where common knowledge and experience teach that a resulting injury would not
have occurred to the patient if due care had been exercised, an inference of negligence may be drawn
giving rise to an application of the doctrine of res ipsa loquitur without medical evidence, which is
ordinarily required to show not only what occurred but how and why it occurred. 31 When the doctrine
is appropriate, all that the patient must do is prove a nexus between the particular act or omission
complained of and the injury sustained while under the custody and management of the defendant
without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa
loquitur is allowed because there is no other way, under usual and ordinary conditions, by which the
patient can obtain redress for injury suffered by him.

Thus, courts of other jurisdictions have applied the doctrine in the following situations: leaving of a
foreign object in the body of the patient after an operation, 32 injuries sustained on a healthy part of
the body which was not under, or in the area, of treatment, 33 removal of the wrong part of the body
when another part was intended, 34 knocking out a tooth while a patient's jaw was under anesthetic for
the removal of his tonsils, 35 and loss of an eye while the patient plaintiff was under the influence of
anesthetic, during or following an operation for appendicitis, 36 among others.

Nevertheless, despite the fact that the scope of res ipsa loquitur has been measurably enlarged, it does
not automatically apply to all cases of medical negligence as to mechanically shift the burden of proof to
the defendant to show that he is not guilty of the ascribed negligence. Res ipsa loquitur is not a rigid or
ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the
circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is
able to say, as a matter of common knowledge and observation, that the consequences of professional
care were not as such as would ordinarily have followed if due care had been
exercised. 37 A distinction must be made between the failure to secure results, and the occurrence of
something more unusual and not ordinarily found if the service or treatment rendered followed the
usual procedure of those skilled in that particular practice. It must be conceded that the doctrine of res
ipsa loquitur can have no application in a suit against a physician or surgeon which involves the merits of
a diagnosis or of a scientific treatment. 38 The physician or surgeon is not required at his peril to explain
why any particular diagnosis was not correct, or why any particular scientific treatment did not produce
the desired result. 39 Thus, res ipsa loquitur is not available in a malpractice suit if the only showing is
that the desired result of an operation or treatment was not accomplished. 40 The real question,
therefore, is whether or not in the process of the operation any extraordinary incident or unusual event
outside of the routine performance occurred which is beyond the regular scope of customary
professional activity in such operations, which, if unexplained would themselves reasonably speak to the
average man as the negligent cause or causes of the untoward consequence. 41 If there was such
extraneous interventions, the doctrine of res ipsa loquitur may be utilized and the defendant is called
upon to explain the matter, by evidence of exculpation, if he could. 42

We find the doctrine of res ipsa loquitur appropriate in the case at bar. As will hereinafter be explained,
the damage sustained by Erlinda in her brain prior to a scheduled gall bladder operation presents a case
for the application of res ipsa loquitur.

A case strikingly similar to the one before us is Voss vs. Bridwell, 43 where the Kansas Supreme Court in
applying the res ipsa loquitur stated:

The plaintiff herein submitted himself for a mastoid operation and delivered his person over to the care,
custody and control of his physician who had complete and exclusive control over him, but the
operation was never performed. At the time of submission he was neurologically sound and physically
fit in mind and body, but he suffered irreparable damage and injury rendering him decerebrate and
totally incapacitated. The injury was one which does not ordinarily occur in the process of a mastoid
operation or in the absence of negligence in the administration of an anesthetic, and in the use and
employment of an endoctracheal tube. Ordinarily a person being put under anesthesia is not rendered
decerebrate as a consequence of administering such anesthesia in the absence of negligence. Upon
these facts and under these circumstances a layman would be able to say, as a matter of common
knowledge and observation, that the consequences of professional treatment were not as such as would
ordinarily have followed if due care had been exercised.

Here the plaintiff could not have been guilty of contributory negligence because he was under the
influence of anesthetics and unconscious, and the circumstances are such that the true explanation of
event is more accessible to the defendants than to the plaintiff for they had the exclusive control of the
instrumentalities of anesthesia.

Upon all the facts, conditions and circumstances alleged in Count II it is held that a cause of action is
stated under the doctrine of res ipsa loquitur. 44

Indeed, the principles enunciated in the aforequoted case apply with equal force here. In the present
case, Erlinda submitted herself for cholecystectomy and expected a routine general surgery to be
performed on her gall bladder. On that fateful day she delivered her person over to the care, custody
and control of private respondents who exercised complete and exclusive control over her. At the time
of submission, Erlinda was neurologically sound and, except for a few minor discomforts, was likewise
physically fit in mind and body. However, during the administration of anesthesia and prior to the
performance of cholecystectomy she suffered irreparable damage to her brain. Thus, without
undergoing surgery, she went out of the operating room already decerebrate and totally incapacitated.
Obviously, brain damage, which Erlinda sustained, is an injury which does not normally occur in the
process of a gall bladder operation. In fact, this kind of situation does not in the absence of negligence of
someone in the administration of anesthesia and in the use of endotracheal tube. Normally, a person
being put under anesthesia is not rendered decerebrate as a consequence of administering such
anesthesia if the proper procedure was followed. Furthermore, the instruments used in the
administration of anesthesia, including the endotracheal tube, were all under the exclusive control of
private respondents, who are the physicians-in-charge. Likewise, petitioner Erlinda could not have been
guilty of contributory negligence because she was under the influence of anesthetics which rendered
her unconscious.

Considering that a sound and unaffected member of the body (the brain) is injured or destroyed while
the patient is unconscious and under the immediate and exclusive control of the physicians, we hold
that a practical administration of justice dictates the application of res ipsa loquitur. Upon these facts
and under these circumstances the Court would be able to say, as a matter of common knowledge and
observation, if negligence attended the management and care of the patient. Moreover, the liability of
the physicians and the hospital in this case is not predicated upon an alleged failure to secure the
desired results of an operation nor on an alleged lack of skill in the diagnosis or treatment as in fact no
operation or treatment was ever performed on Erlinda. Thus, upon all these initial determination a case
is made out for the application of the doctrine of res ipsa loquitur.

Nonetheless, in holding that res ipsa loquitur is available to the present case we are not saying that the
doctrine is applicable in any and all cases where injury occurs to a patient while under anesthesia, or to
any and all anesthesia cases. Each case must be viewed in its own light and scrutinized in order to be
within the res ipsa loquitur coverage.

Having in mind the applicability of the res ipsa loquitur doctrine and the presumption of negligence
allowed therein, the Court now comes to the issue of whether the Court of Appeals erred in finding that
private respondents were not negligent in the care of Erlinda during the anesthesia phase of the
operation and, if in the affirmative, whether the alleged negligence was the proximate cause of Erlinda's
comatose condition. Corollary thereto, we shall also determine if the Court of Appeals erred in relying
on the testimonies of the witnesses for the private respondents.

In sustaining the position of private respondents, the Court of Appeals relied on the testimonies of Dra.
Gutierrez, Dra. Calderon and Dr. Jamora. In giving weight to the testimony of Dra. Gutierrez, the Court of
Appeals rationalized that she was candid enough to admit that she experienced some difficulty in the
endotracheal intubation 45 of the patient and thus, cannot be said to be covering her negligence with
falsehood. The appellate court likewise opined that private respondents were able to show that the
brain damage sustained by Erlinda was not caused by the alleged faulty intubation but was due to the
allergic reaction of the patient to the drug Thiopental Sodium (Pentothal), a short-acting barbiturate, as
testified on by their expert witness, Dr. Jamora. On the other hand, the appellate court rejected the
testimony of Dean Herminda Cruz offered in favor of petitioners that the cause of the brain injury was
traceable to the wrongful insertion of the tube since the latter, being a nurse, was allegedly not
knowledgeable in the process of intubation. In so holding, the appellate court returned a verdict in favor
of respondents physicians and hospital and absolved them of any liability towards Erlinda and her
family.

We disagree with the findings of the Court of Appeals. We hold that private respondents were unable to
disprove the presumption of negligence on their part in the care of Erlinda and their negligence was the
proximate cause of her piteous condition.

In the instant case, the records are helpful in furnishing not only the logical scientific evidence of the
pathogenesis of the injury but also in providing the Court the legal nexus upon which liability is based.
As will be shown hereinafter, private respondents' own testimonies which are reflected in the transcript
of stenographic notes are replete of signposts indicative of their negligence in the care and management
of Erlinda.

With regard to Dra. Gutierrez, we find her negligent in the care of Erlinda during the anesthesia phase.
As borne by the records, respondent Dra. Gutierrez failed to properly intubate the patient. This fact was
attested to by Prof. Herminda Cruz, Dean of the Capitol Medical Center School of Nursing and
petitioner's sister-in-law, who was in the operating room right beside the patient when the tragic event
occurred. Witness Cruz testified to this effect:

ATTY. PAJARES:

Q: In particular, what did Dra. Perfecta Gutierrez do, if any on the patient?

A: In particular, I could see that she was intubating the patient.

Q: Do you know what happened to that intubation process administered by Dra. Gutierrez?

ATTY. ALCERA:

She will be incompetent Your Honor.

COURT:

Witness may answer if she knows.

A: As have said, I was with the patient, I was beside the stretcher holding the left hand of the
patient and all of a sudden heard some remarks coming from Dra. Perfecta Gutierrez herself. She was
saying "Ang hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan.

xxx xxx xxx

ATTY. PAJARES:

Q: From whom did you hear those words "lumalaki ang tiyan"?

A: From Dra. Perfecta Gutierrez.

xxx xxx xxx

Q: After hearing the phrase "lumalaki ang tiyan," what did you notice on the person of the patient?

A: I notice (sic) some bluish discoloration on the nailbeds of the left hand where I was at.

Q: Where was Dr. Orlino Ho[s]aka then at that particular time?

A: I saw him approaching the patient during that time.

Q: When he approached the patient, what did he do, if any?

A: He made an order to call on the anesthesiologist in the person of Dr. Calderon.

Q: Did Dr. Calderon, upon being called, arrive inside the operating room?

A: Yes sir.

Q: What did [s]he do, if any?

A: [S]he tried to intubate the patient.

Q: What happened to the patient?

A: When Dr. Calderon try (sic) to intubate the patient, after a while the patient's nailbed became
bluish and I saw the patient was placed in trendelenburg position.

xxx xxx xxx

Q: Do you know the reason why the patient was placed in that trendelenburg position?

A: As far as I know, when a patient is in that position, there is a decrease of blood supply to the
brain. 46

xxx xxx xxx

The appellate court, however, disbelieved Dean Cruz's testimony in the trial court by declaring that:

A perusal of the standard nursing curriculum in our country will show that intubation is not taught as
part of nursing procedures and techniques. Indeed, we take judicial notice of the fact that nurses do not,
and cannot, intubate. Even on the assumption that she is fully capable of determining whether or not a
patient is properly intubated, witness Herminda Cruz, admittedly, did not peep into the throat of the
patient. (TSN, July 25, 1991, p. 13). More importantly, there is no evidence that she ever auscultated the
patient or that she conducted any type of examination to check if the endotracheal tube was in its
proper place, and to determine the condition of the heart, lungs, and other organs. Thus, witness Cruz's
categorical statements that appellant Dra. Gutierrez failed to intubate the appellee Erlinda Ramos and
that it was Dra. Calderon who succeeded in doing so clearly suffer from lack of sufficient factual bases.
47

In other words, what the Court of Appeals is trying to impress is that being a nurse, and considered a
layman in the process of intubation, witness Cruz is not competent to testify on whether or not the
intubation was a success.

We do not agree with the above reasoning of the appellate court. Although witness Cruz is not an
anesthesiologist, she can very well testify upon matters on which she is capable of observing such as,
the statements and acts of the physician and surgeon, external appearances, and manifest conditions
which are observable by any one. 48 This is precisely allowed under the doctrine of res ipsa loquitur
where the testimony of expert witnesses is not required. It is the accepted rule that expert testimony is
not necessary for the proof of negligence in non-technical matters or those of which an ordinary person
may be expected to have knowledge, or where the lack of skill or want of care is so obvious as to render
expert testimony unnecessary. 49 We take judicial notice of the fact that anesthesia procedures have
become so common, that even an ordinary person can tell if it was administered properly. As such, it
would not be too difficult to tell if the tube was properly inserted. This kind of observation, we believe,
does not require a medical degree to be acceptable.

At any rate, without doubt, petitioner's witness, an experienced clinical nurse whose long experience
and scholarship led to her appointment as Dean of the Capitol Medical Center School at Nursing, was
fully capable of determining whether or not the intubation was a success. She had extensive clinical
experience starting as a staff nurse in Chicago, Illinois; staff nurse and clinical instructor in a teaching
hospital, the FEU-NRMF; Dean of the Laguna College of Nursing in San Pablo City; and then Dean of the
Capitol Medical Center School of Nursing. 50 Reviewing witness Cruz' statements, we find that the same
were delivered in a straightforward manner, with the kind of detail, clarity, consistency and spontaneity
which would have been difficult to fabricate. With her clinical background as a nurse, the Court is
satisfied that she was able to demonstrate through her testimony what truly transpired on that fateful
day.

Most of all, her testimony was affirmed by no less than respondent Dra. Gutierrez who admitted that
she experienced difficulty in inserting the tube into Erlinda's trachea, to wit:

ATTY. LIGSAY:

Q: In this particular case, Doctora, while you were intubating at your first attempt (sic), you did not
immediately see the trachea?

DRA. GUTIERREZ:

A: Yes sir.

Q: Did you pull away the tube immediately?

A: You do not pull the . . .

Q: Did you or did you not?

A: I did not pull the tube.

Q: When you said "mahirap yata ito," what were you referring to?

A: "Mahirap yata itong i-intubate," that was the patient.

Q: So, you found some difficulty in inserting the tube?

A: Yes, because of (sic) my first attempt, I did not see right away. 51

Curiously in the case at bar, respondent Dra. Gutierrez made the haphazard defense that she
encountered hardship in the insertion of the tube in the trachea of Erlinda because it was positioned
more anteriorly (slightly deviated from the normal anatomy of a person) 52 making it harder to locate
and, since Erlinda is obese and has a short neck and protruding teeth, it made intubation even more
difficult.

The argument does not convince us. If this was indeed observed, private respondents adduced no
evidence demonstrating that they proceeded to make a thorough assessment of Erlinda's airway, prior
to the induction of anesthesia, even if this would mean postponing the procedure. From their
testimonies, it appears that the observation was made only as an afterthought, as a means of defense.

The pre-operative evaluation of a patient prior to the administration of anesthesia is universally
observed to lessen the possibility of anesthetic accidents. Pre-operative evaluation and preparation for
anesthesia begins when the anesthesiologist reviews the patient's medical records and visits with the
patient, traditionally, the day before elective surgery. 53 It includes taking the patient's medical history,
review of current drug therapy, physical examination and interpretation of laboratory data. 54 The
physical examination performed by the anesthesiologist is directed primarily toward the central nervous
system, cardiovascular system, lungs and upper airway. 55 A thorough analysis of the patient's airway
normally involves investigating the following: cervical spine mobility, temporomandibular mobility,
prominent central incisors, diseased or artificial teeth, ability to visualize uvula and the thyromental
distance. 56 Thus, physical characteristics of the patient's upper airway that could make tracheal
intubation difficult should be studied. 57 Where the need arises, as when initial assessment indicates
possible problems (such as the alleged short neck and protruding teeth of Erlinda) a thorough
examination of the patient's airway would go a long way towards decreasing patient morbidity and
mortality.

In the case at bar, respondent Dra. Gutierrez admitted that she saw Erlinda for the first time on the day
of the operation itself, on 17 June 1985. Before this date, no prior consultations with, or pre-operative
evaluation of Erlinda was done by her. Until the day of the operation, respondent Dra. Gutierrez was
unaware of the physiological make-up and needs of Erlinda. She was likewise not properly informed of
the possible difficulties she would face during the administration of anesthesia to Erlinda. Respondent
Dra. Gutierrez' act of seeing her patient for the first time only an hour before the scheduled operative
procedure was, therefore, an act of exceptional negligence and professional irresponsibility. The
measures cautioning prudence and vigilance in dealing with human lives lie at the core of the physician's
centuries-old Hippocratic Oath. Her failure to follow this medical procedure is, therefore, a clear indicia
of her negligence.

Respondent Dra. Gutierrez, however, attempts to gloss over this omission by playing around with the
trial court's ignorance of clinical procedure, hoping that she could get away with it. Respondent Dra.
Gutierrez tried to muddle the difference between an elective surgery and an emergency surgery just so
her failure to perform the required pre-operative evaluation would escape unnoticed. In her testimony
she asserted:

ATTY. LIGSAY:

Q: Would you agree, Doctor, that it is good medical practice to see the patient a day before so you
can introduce yourself to establish good doctor-patient relationship and gain the trust and confidence of
the patient?

DRA. GUTIERREZ:

A: As I said in my previous statement, it depends on the operative procedure of the
anesthesiologist and in my case, with elective cases and normal cardio-pulmonary clearance like that, I
usually don't do it except on emergency and on cases that have an abnormalities (sic). 58

However, the exact opposite is true. In an emergency procedure, there is hardly enough time available
for the fastidious demands of pre-operative procedure so that an anesthesiologist is able to see the
patient only a few minutes before surgery, if at all. Elective procedures, on the other hand, are operative
procedures that can wait for days, weeks or even months. Hence, in these cases, the anesthesiologist
possesses the luxury of time to be at the patient's beside to do a proper interview and clinical
evaluation. There is ample time to explain the method of anesthesia, the drugs to be used, and their
possible hazards for purposes of informed consent. Usually, the pre-operative assessment is conducted
at least one day before the intended surgery, when the patient is relaxed and cooperative.

Erlinda's case was elective and this was known to respondent Dra. Gutierrez. Thus, she had all the time
to make a thorough evaluation of Erlinda's case prior to the operation and prepare her for anesthesia.
However, she never saw the patient at the bedside. She herself admitted that she had seen petitioner
only in the operating room, and only on the actual date of the cholecystectomy. She negligently failed to
take advantage of this important opportunity. As such, her attempt to exculpate herself must fail.

Having established that respondent Dra. Gutierrez failed to perform pre-operative evaluation of the
patient which, in turn, resulted to a wrongful intubation, we now determine if the faulty intubation is
truly the proximate cause of Erlinda's comatose condition.

Private respondents repeatedly hammered the view that the cerebral anoxia which led to Erlinda's coma
was due to bronchospasm 59 mediated by her allergic response to the drug, Thiopental Sodium,
introduced into her system. Towards this end, they presented Dr. Jamora, a Fellow of the Philippine
College of Physicians and Diplomate of the Philippine Specialty Board of Internal Medicine, who
advanced private respondents' theory that the oxygen deprivation which led to anoxic encephalopathy,
60 was due to an unpredictable drug reaction to the short-acting barbiturate. We find the theory of
private respondents unacceptable.

First of all, Dr. Jamora cannot be considered an authority in the field of anesthesiology simply because
he is not an anesthesiologist. Since Dr. Jamora is a pulmonologist, he could not have been capable of
properly enlightening the court about anesthesia practice and procedure and their complications. Dr.
Jamora is likewise not an allergologist and could not therefore properly advance expert opinion on
allergic-mediated processes. Moreover, he is not a pharmacologist and, as such, could not have been
capable, as an expert would, of explaining to the court the pharmacologic and toxic effects of the
supposed culprit, Thiopental Sodium (Pentothal).

The inappropriateness and absurdity of accepting Dr. Jamora's testimony as an expert witness in the
anesthetic practice of Pentothal administration is further supported by his own admission that he
formulated his opinions on the drug not from the practical experience gained by a specialist or expert in
the administration and use of Sodium Pentothal on patients, but only from reading certain references,
to wit:

ATTY. LIGSAY:

Q: In your line of expertise on pulmonology, did you have any occasion to use pentothal as a
method of management?

DR. JAMORA:

A: We do it in conjunction with the anesthesiologist when they have to intubate our patient.

Q: But not in particular when you practice pulmonology?

A: No.

Q: In other words, your knowledge about pentothal is based only on what you have read from
books and not by your own personal application of the medicine pentothal?

A: Based on my personal experience also on pentothal.

Q: How many times have you used pentothal?

A: They used it on me. I went into bronchospasm during my appendectomy.

Q: And because they have used it on you and on account of your own personal experience you feel
that you can testify on pentothal here with medical authority?

A: No. That is why I used references to support my claims. 61

An anesthetic accident caused by a rare drug-induced bronchospasm properly falls within the fields of
anesthesia, internal medicine-allergy, and clinical pharmacology. The resulting anoxic encephalopathy
belongs to the field of neurology. While admittedly, many bronchospastic-mediated pulmonary diseases
are within the expertise of pulmonary medicine, Dr. Jamora's field, the anesthetic drug-induced, allergic
mediated bronchospasm alleged in this case is within the disciplines of anesthesiology, allergology and
pharmacology. On the basis of the foregoing transcript, in which the pulmonologist himself admitted
that he could not testify about the drug with medical authority, it is clear that the appellate court erred
in giving weight to Dr. Jamora's testimony as an expert in the administration of Thiopental Sodium.

The provision in the rules of evidence 62 regarding expert witnesses states:

Sec. 49. Opinion of expert witness. The opinion of a witness on a matter requiring special knowledge,
skill, experience or training which he is shown to possess, may be received in evidence.

Generally, to qualify as an expert witness, one must have acquired special knowledge of the subject
matter about which he or she is to testify, either by the study of recognized authorities on the subject or
by practical experience. 63 Clearly, Dr. Jamora does not qualify as an expert witness based on the above
standard since he lacks the necessary knowledge, skill, and training in the field of anesthesiology. Oddly,
apart from submitting testimony from a specialist in the wrong field, private respondents' intentionally
avoided providing testimony by competent and independent experts in the proper areas.

Moreover, private respondents' theory, that Thiopental Sodium may have produced Erlinda's coma by
triggering an allergic mediated response, has no support in evidence. No evidence of stridor, skin
reactions, or wheezing some of the more common accompanying signs of an allergic reaction
appears on record. No laboratory data were ever presented to the court.

In any case, private respondents themselves admit that Thiopental induced, allergic-mediated
bronchospasm happens only very rarely. If courts were to accept private respondents' hypothesis
without supporting medical proof, and against the weight of available evidence, then every anesthetic
accident would be an act of God. Evidently, the Thiopental-allergy theory vigorously asserted by private
respondents was a mere afterthought. Such an explanation was advanced in order to advanced in order
to absolve them of any and all responsibility for the patient's condition.

In view of the evidence at hand, we are inclined to believe petitioners' stand that it was the faulty
intubation which was the proximate cause of Erlinda's comatose condition.

Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces injury, and without which the result would not have occurred. 64
An injury or damage is proximately caused by an act or a failure to act, whenever it appears from the
evidence in the case, that the act or omission played a substantial part in bringing about or actually
causing the injury or damage; and that the injury or damage was either a direct result or a reasonably
probable consequence of the act or omission. 65 It is the dominant, moving or producing cause.

Applying the above definition in relation to the evidence at hand, faulty intubation is undeniably the
proximate cause which triggered the chain of events leading to Erlinda's brain damage and, ultimately,
her comatosed condition.

Private respondents themselves admitted in their testimony that the first intubation was a failure. This
fact was likewise observed by witness Cruz when she heard respondent Dra. Gutierrez remarked, "Ang
hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan." Thereafter, witness Cruz
noticed abdominal distention on the body of Erlinda. The development of abdominal distention,
together with respiratory embarrassment indicates that the endotracheal tube entered the esophagus
instead of the respiratory tree. In other words, instead of the intended endotracheal intubation what
actually took place was an esophageal intubation. During intubation, such distention indicates that air
has entered the gastrointestinal tract through the esophagus instead of the lungs through the trachea.
Entry into the esophagus would certainly cause some delay in oxygen delivery into the lungs as the tube
which carries oxygen is in the wrong place. That abdominal distention had been observed during the
first intubation suggests that the length of time utilized in inserting the endotracheal tube (up to the
time the tube was withdrawn for the second attempt) was fairly significant. Due to the delay in the
delivery of oxygen in her lungs Erlinda showed signs of cyanosis. 66 As stated in the testimony of Dr.
Hosaka, the lack of oxygen became apparent only after he noticed that the nailbeds of Erlinda were
already blue. 67 However, private respondents contend that a second intubation was executed on
Erlinda and this one was successfully done. We do not think so. No evidence exists on record, beyond
private respondents' bare claims, which supports the contention that the second intubation was
successful. Assuming that the endotracheal tube finally found its way into the proper orifice of the
trachea, the same gave no guarantee of oxygen delivery, the hallmark of a successful intubation. In fact,
cyanosis was again observed immediately after the second intubation. Proceeding from this event
(cyanosis), it could not be claimed, as private respondents insist, that the second intubation was
accomplished. Even granting that the tube was successfully inserted during the second attempt, it was
obviously too late. As aptly explained by the trial court, Erlinda already suffered brain damage as a result
of the inadequate oxygenation of her brain for about four to five minutes. 68

The above conclusion is not without basis. Scientific studies point out that intubation problems are
responsible for one-third (1/3) of deaths and serious injuries associated with anesthesia. 69
Nevertheless, ninety-eight percent (98%) or the vast majority of difficult intubations may be anticipated
by performing a thorough evaluation of the patient's airway prior to the operation. 70 As stated
beforehand, respondent Dra. Gutierrez failed to observe the proper pre-operative protocol which could
have prevented this unfortunate incident. Had appropriate diligence and reasonable care been used in
the pre-operative evaluation, respondent physician could have been much more prepared to meet the
contingency brought about by the perceived anatomic variations in the patient's neck and oral area,
defects which would have been easily overcome by a prior knowledge of those variations together with
a change in technique. 71 In other words, an experienced anesthesiologist, adequately alerted by a
thorough pre-operative evaluation, would have had little difficulty going around the short neck and
protruding teeth. 72 Having failed to observe common medical standards in pre-operative management
and intubation, respondent Dra. Gutierrez' negligence resulted in cerebral anoxia and eventual coma of
Erlinda.

We now determine the responsibility of respondent Dr. Orlino Hosaka as the head of the surgical team.
As the so-called "captain of the ship," 73 it is the surgeon's responsibility to see to it that those under
him perform their task in the proper manner. Respondent Dr. Hosaka's negligence can be found in his
failure to exercise the proper authority (as the "captain" of the operative team) in not determining if his
anesthesiologist observed proper anesthesia protocols. In fact, no evidence on record exists to show
that respondent Dr. Hosaka verified if respondent Dra. Gutierrez properly intubated the patient.
Furthermore, it does not escape us that respondent Dr. Hosaka had scheduled another procedure in a
different hospital at the same time as Erlinda's cholecystectomy, and was in fact over three hours late
for the latter's operation. Because of this, he had little or no time to confer with his anesthesiologist
regarding the anesthesia delivery. This indicates that he was remiss in his professional duties towards his
patient. Thus, he shares equal responsibility for the events which resulted in Erlinda's condition.

We now discuss the responsibility of the hospital in this particular incident. The unique practice (among
private hospitals) of filling up specialist staff with attending and visiting "consultants," 74 who are
allegedly not hospital employees, presents problems in apportioning responsibility for negligence in
medical malpractice cases. However, the difficulty is only more apparent than real.

In the first place, hospitals exercise significant control in the hiring and firing of consultants and in the
conduct of their work within the hospital premises. Doctors who apply for "consultant" slots, visiting or
attending, are required to submit proof of completion of residency, their educational qualifications;
generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in
most cases, and references. These requirements are carefully scrutinized by members of the hospital
administration or by a review committee set up by the hospital who either accept or reject the
application. 75 This is particularly true with respondent hospital.

After a physician is accepted, either as a visiting or attending consultant, he is normally required to
attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and responsibilities, for the privilege
of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients into the
hospital. In addition to these, the physician's performance as a specialist is generally evaluated by a peer
review committee on the basis of mortality and morbidity statistics, and feedback from patients, nurses,
interns and residents. A consultant remiss in his duties, or a consultant who regularly falls short of the
minimum standards acceptable to the hospital or its peer review committee, is normally politely
terminated.

In other words, private hospitals, hire, fire and exercise real control over their attending and visiting
"consultant" staff. While "consultants" are not, technically employees, a point which respondent
hospital asserts in denying all responsibility for the patient's condition, the control exercised, the hiring,
and the right to terminate consultants all fulfill the important hallmarks of an employer-employee
relationship, with the exception of the payment of wages. In assessing whether such a relationship in
fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for
the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship
in effect exists between hospitals and their attending and visiting physicians. This being the case, the
question now arises as to whether or not respondent hospital is solidarily liable with respondent doctors
for petitioner's condition. 76

The basis for holding an employer solidarily responsible for the negligence of its employee is found in
Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for
those of others based on the former's responsibility under a relationship of patria potestas. 77 Such
responsibility ceases when the persons or entity concerned prove that they have observed the diligence
of a good father of the family to prevent damage. 78 In other words, while the burden of proving
negligence rests on the plaintiffs, once negligence is shown, the burden shifts to the respondents
(parent, guardian, teacher or employer) who should prove that they observed the diligence of a good
father of a family to prevent damage.

In the instant case, respondent hospital, apart from a general denial of its responsibility over respondent
physicians, failed to adduce evidence showing that it exercised the diligence of a good father of a family
in the hiring and supervision of the latter. It failed to adduce evidence with regard to the degree of
supervision which it exercised over its physicians. In neglecting to offer such proof, or proof of a similar
nature, respondent hospital thereby failed to discharge its burden under the last paragraph of Article
2180. Having failed to do this, respondent hospital is consequently solidarily responsible with its
physicians for Erlinda's condition.

Based on the foregoing, we hold that the Court of Appeals erred in accepting and relying on the
testimonies of the witnesses for the private respondents. Indeed, as shown by the above discussions,
private respondents were unable to rebut the presumption of negligence. Upon these disquisitions we
hold that private respondents are solidarily liable for damages under Article 2176 79 of the Civil Code.

We now come to the amount of damages due petitioners. The trial court awarded a total of P632,000.00
pesos (should be P616,000.00) in compensatory damages to the plaintiff, "subject to its being updated"
covering the period from 15 November 1985 up to 15 April 1992, based on monthly expenses for the
care of the patient estimated at P8,000.00.

At current levels, the P8000/monthly amount established by the trial court at the time of its decision
would be grossly inadequate to cover the actual costs of home-based care for a comatose individual.
The calculated amount was not even arrived at by looking at the actual cost of proper hospice care for
the patient. What it reflected were the actual expenses incurred and proved by the petitioners after
they were forced to bring home the patient to avoid mounting hospital bills.

And yet ideally, a comatose patient should remain in a hospital or be transferred to a hospice
specializing in the care of the chronically ill for the purpose of providing a proper milieu adequate to
meet minimum standards of care. In the instant case for instance, Erlinda has to be constantly turned
from side to side to prevent bedsores and hypostatic pneumonia. Feeding is done by nasogastric tube.
Food preparation should be normally made by a dietitian to provide her with the correct daily caloric
requirements and vitamin supplements. Furthermore, she has to be seen on a regular basis by a physical
therapist to avoid muscle atrophy, and by a pulmonary therapist to prevent the accumulation of
secretions which can lead to respiratory complications.

Given these considerations, the amount of actual damages recoverable in suits arising from negligence
should at least reflect the correct minimum cost of proper care, not the cost of the care the family is
usually compelled to undertake at home to avoid bankruptcy. However, the provisions of the Civil Code
on actual or compensatory damages present us with some difficulties.

Well-settled is the rule that actual damages which may be claimed by the plaintiff are those suffered by
him as he has duly proved. The Civil Code provides:

Art. 2199. 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.

Our rules on actual or compensatory damages generally assume that at the time of litigation, the injury
suffered as a consequence of an act of negligence has been completed and that the cost can be
liquidated. However, these provisions neglect to take into account those situations, as in this case,
where the resulting injury might be continuing and possible future complications directly arising from
the injury, while certain to occur, are difficult to predict.

In these cases, the amount of damages which should be awarded, if they are to adequately and correctly
respond to the injury caused, should be one which compensates for pecuniary loss incurred and proved,
up to the time of trial; and one which would meet pecuniary loss certain to be suffered but which could
not, from the nature of the case, be made with certainty. 80 In other words, temperate damages can
and should be awarded on top of actual or compensatory damages in instances where the injury is
chronic and continuing. And because of the unique nature of such cases, no incompatibility arises when
both actual and temperate damages are provided for. The reason is that these damages cover two
distinct phases.

As it would not be equitable and certainly not in the best interests of the administration of justice
for the victim in such cases to constantly come before the courts and invoke their aid in seeking
adjustments to the compensatory damages previously awarded temperate damages are appropriate.
The amount given as temperate damages, though to a certain extent speculative, should take into
account the cost of proper care.

In the instant case, petitioners were able to provide only home-based nursing care for a comatose
patient who has remained in that condition for over a decade. Having premised our award for
compensatory damages on the amount provided by petitioners at the onset of litigation, it would be
now much more in step with the interests of justice if the value awarded for temperate damages would
allow petitioners to provide optimal care for their loved one in a facility which generally specializes in
such care. They should not be compelled by dire circumstances to provide substandard care at home
without the aid of professionals, for anything less would be grossly inadequate. Under the
circumstances, an award of P1,500,000.00 in temperate damages would therefore be reasonable. 81

In Valenzuela vs. Court of Appeals, 82 this Court was confronted with a situation where the injury
suffered by the plaintiff would have led to expenses which were difficult to estimate because while they
would have been a direct result of the injury (amputation), and were certain to be incurred by the
plaintiff, they were likely to arise only in the future. We awarded P1,000,000.00 in moral damages in
that case.

Describing the nature of the injury, the Court therein stated:

As a result of the accident, Ma. Lourdes Valenzuela underwent a traumatic amputation of her left lower
extremity at the distal left thigh just above the knee. Because of this, Valenzuela will forever be deprived
of the full ambulatory functions of her left extremity, even with the use of state of the art prosthetic
technology. Well beyond the period of hospitalization (which was paid for by Li), she will be required to
undergo adjustments in her prosthetic devise due to the shrinkage of the stump from the process of
healing.

These adjustments entail costs, prosthetic replacements and months of physical and occupational
rehabilitation and therapy. During the lifetime, the prosthetic devise will have to be replaced and
readjusted to changes in the size of her lower limb effected by the biological changes of middle-age,
menopause and aging. Assuming she reaches menopause, for example, the prosthetic will have to be
adjusted to respond to the changes in bone resulting from a precipitate decrease in calcium levels
observed in the bones of all post-menopausal women. In other words, the damage done to her would
not only be permanent and lasting, it would also be permanently changing and adjusting to the
physiologic changes which her body would normally undergo through the years. The replacements,
changes, and adjustments will require corresponding adjustive physical and occupational therapy. All of
these adjustments, it has been documented, are painful.

xxx xxx xxx

A prosthetic devise, however technologically advanced, will only allow a reasonable amount of
functional restoration of the motor functions of the lower limb. The sensory functions are forever lost.
The resultant anxiety, sleeplessness, psychological injury, mental and physical pain are inestimable. 83

The injury suffered by Erlinda as a consequence of private respondents' negligence is certainly much
more serious than the amputation in the Valenzuela case.

Petitioner Erlinda Ramos was in her mid-forties when the incident occurred. She has been in a comatose
state for over fourteen years now. The burden of care has so far been heroically shouldered by her
husband and children, who, in the intervening years have been deprived of the love of a wife and a
mother.

Meanwhile, the actual physical, emotional and financial cost of the care of petitioner would be virtually
impossible to quantify. Even the temperate damages herein awarded would be inadequate if
petitioner's condition remains unchanged for the next ten years.

We recognized, in Valenzuela that a discussion of the victim's actual injury would not even scratch the
surface of the resulting moral damage because it would be highly speculative to estimate the amount of
emotional and moral pain, psychological damage and injury suffered by the victim or those actually
affected by the victim's condition. 84 The husband and the children, all petitioners in this case, will have
to live with the day to day uncertainty of the patient's illness, knowing any hope of recovery is close to
nil. They have fashioned their daily lives around the nursing care of petitioner, altering their long term
goals to take into account their life with a comatose patient. They, not the respondents, are charged
with the moral responsibility of the care of the victim. The family's moral injury and suffering in this case
is clearly a real one. For the foregoing reasons, an award of P2,000,000.00 in moral damages would be
appropriate.

Finally, by way of example, exemplary damages in the amount of P100,000.00 are hereby awarded.
Considering the length and nature of the instant suit we are of the opinion that attorney's fees valued at
P100,000.00 are likewise proper.

Our courts face unique difficulty in adjudicating medical negligence cases because physicians are not
insurers of life and, they rarely set out to intentionally cause injury or death to their patients. However,
intent is immaterial in negligence cases because where negligence exists and is proven, the same
automatically gives the injured a right to reparation for the damage caused.

Established medical procedures and practices, though in constant flux are devised for the purpose of
preventing complications. A physician's experience with his patients would sometimes tempt him to
deviate from established community practices, and he may end a distinguished career using unorthodox
methods without incident. However, when failure to follow established procedure results in the evil
precisely sought to be averted by observance of the procedure and a nexus is made between the
deviation and the injury or damage, the physician would necessarily be called to account for it. In the
case at bar, the failure to observe pre-operative assessment protocol which would have influenced the
intubation in a salutary way was fatal to private respondents' case.

WHEREFORE, the decision and resolution of the appellate court appealed from are hereby modified so
as to award in favor of petitioners, and solidarily against private respondents the following: 1)
P1,352,000.00 as actual damages computed as of the date of promulgation of this decision plus a
monthly payment of P8,000.00 up to the time that petitioner Erlinda Ramos expires or miraculously
survives; 2) P2,000,000.00 as moral damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00
each as exemplary damages and attorney's fees; and, 5) the costs of the suit.

SO ORDERED.

DR. RUBI LI,
Petitioner,










- versus -
G.R. No. 165279

Present:

CORONA, C.J.,
CARPIO,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,*
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.

SPOUSES REYNALDO and LINA SOLIMAN, as parents/heirs of deceased Angelica Soliman,
Respondents.

Promulgated:

June 7, 2011
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

VILLARAMA, JR., J.:

Challenged in this petition for review on certiorari is the Decision[1] dated June 15, 2004 as well as
the Resolution[2] dated September 1, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 58013 which
modified the Decision[3] dated September 5, 1997 of the Regional Trial Court of Legazpi City, Branch 8 in
Civil Case No. 8904.
The factual antecedents:
On July 7, 1993, respondents 11-year old daughter, Angelica Soliman, underwent a biopsy of the
mass located in her lower extremity at the St. Lukes Medical Center (SLMC). Results showed that
Angelica was suffering from osteosarcoma, osteoblastic type,[4] a high-grade (highly malignant) cancer
of the bone which usually afflicts teenage children. Following this diagnosis and as primary intervention,
Angelicas right leg was amputated by Dr. Jaime Tamayo in order to remove the tumor. As adjuvant
treatment to eliminate any remaining cancer cells, and hence minimize the chances of recurrence and
prevent the disease from spreading to other parts of the patients body (metastasis), chemotherapy was
suggested by Dr. Tamayo. Dr. Tamayo referred Angelica to another doctor at SLMC, herein petitioner
Dr. Rubi Li, a medical oncologist.
On August 18, 1993, Angelica was admitted to SLMC. However, she died on September 1, 1993,
just eleven (11) days after the (intravenous) administration of the first cycle of the chemotherapy
regimen. Because SLMC refused to release a death certificate without full payment of their hospital bill,
respondents brought the cadaver of Angelica to the Philippine National Police (PNP) Crime Laboratory at
Camp Crame for post-mortem examination. The Medico-Legal Report issued by said institution
indicated the cause of death as Hypovolemic shock secondary to multiple organ hemorrhages and
Disseminated Intravascular Coagulation.*5+
On the other hand, the Certificate of Death[6] issued by SLMC stated the cause of death as follows:
Immediate cause : a. Osteosarcoma, Status Post AKA
Antecedent cause : b. (above knee amputation)
Underlying cause : c. Status Post Chemotherapy
On February 21, 1994, respondents filed a damage suit[7] against petitioner, Dr. Leo Marbella, Mr.
Jose Ledesma, a certain Dr. Arriete and SLMC. Respondents charged them with negligence and disregard
of Angelicas safety, health and welfare by their careless administration of the chemotherapy drugs,
their failure to observe the essential precautions in detecting early the symptoms of fatal blood platelet
decrease and stopping early on the chemotherapy, which bleeding led to hypovolemic shock that
caused Angelicas untimely demise. Further, it was specifically averred that petitioner assured the
respondents that Angelica would recover in view of 95% chance of healing with chemotherapy
(Magiging normal na ang anak nyo basta ma-chemo. 95% ang healing) and when asked regarding the
side effects, petitioner mentioned only slight vomiting, hair loss and weakness (Magsusuka ng kaunti.
Malulugas ang buhok. Manghihina). Respondents thus claimed that they would not have given their
consent to chemotherapy had petitioner not falsely assured them of its side effects.
In her answer,[8] petitioner denied having been negligent in administering the chemotherapy
drugs to Angelica and asserted that she had fully explained to respondents how the chemotherapy will
affect not only the cancer cells but also the patients normal body parts, including the lowering of white
and red blood cells and platelets. She claimed that what happened to Angelica can be attributed to
malignant tumor cells possibly left behind after surgery. Few as they may be, these have the capacity to
compete for nutrients such that the body becomes so weak structurally (cachexia) and functionally in
the form of lower resistance of the body to combat infection. Such infection becomes uncontrollable
and triggers a chain of events (sepsis or septicemia) that may lead to bleeding in the form of
Disseminated Intravascular Coagulation (DIC), as what the autopsy report showed in the case of
Angelica.
Since the medical records of Angelica were not produced in court, the trial and appellate courts
had to rely on testimonial evidence, principally the declarations of petitioner and respondents
themselves. The following chronology of events was gathered:
On July 23, 1993, petitioner saw the respondents at the hospital after Angelicas surgery and
discussed with them Angelicas condition. Petitioner told respondents that Angelica should be given
two to three weeks to recover from the operation before starting chemotherapy. Respondents were
apprehensive due to financial constraints as Reynaldo earns only from P70,000.00 to P150,000.00 a year
from his jewelry and watch repairing business.[9] Petitioner, however, assured them not to worry about
her professional fee and told them to just save up for the medicines to be used.
Petitioner claimed that she explained to respondents that even when a tumor is removed, there are still
small lesions undetectable to the naked eye, and that adjuvant chemotherapy is needed to clean out the
small lesions in order to lessen the chance of the cancer to recur. She did not give the respondents any
assurance that chemotherapy will cure Angelicas cancer. During these consultations with respondents,
she explained the following side effects of chemotherapy treatment to respondents: (1) falling hair; (2)
nausea and vomiting; (3) loss of appetite; (4) low count of white blood cells [WBC], red blood cells [RBC]
and platelets; (5) possible sterility due to the effects on Angelicas ovary; (6) damage to the heart and
kidneys; and (7) darkening of the skin especially when exposed to sunlight. She actually talked with
respondents four times, once at the hospital after the surgery, twice at her clinic and the fourth time
when Angelicas mother called her through long distance.*10+ This was disputed by respondents who
countered that petitioner gave them assurance that there is 95% chance of healing for Angelica if she
undergoes chemotherapy and that the only side effects were nausea, vomiting and hair loss.[11] Those
were the only side-effects of chemotherapy treatment mentioned by petitioner.[12]
On July 27, 1993, SLMC discharged Angelica, with instruction from petitioner that she be
readmitted after two or three weeks for the chemotherapy.
On August 18, 1993, respondents brought Angelica to SLMC for chemotherapy, bringing with them the
results of the laboratory tests requested by petitioner: Angelicas chest x-ray, ultrasound of the liver,
creatinine and complete liver function tests.[13] Petitioner proceeded with the chemotherapy by first
administering hydration fluids to Angelica.[14]
The following day, August 19, petitioner began administering three chemotherapy drugs Cisplatin,[15]
Doxorubicin[16] and Cosmegen[17] intravenously. Petitioner was supposedly assisted by her trainees
Dr. Leo Marbella[18] and Dr. Grace Arriete.[19] In his testimony, Dr. Marbella denied having any
participation in administering the said chemotherapy drugs.[20]
On the second day of chemotherapy, August 20, respondents noticed reddish discoloration on
Angelicas face.*21+ They asked petitioner about it, but she merely quipped, Wala yan. Epekto ng
gamot.*22+ Petitioner recalled noticing the skin rashes on the nose and cheek area of Angelica. At that
moment, she entertained the possibility that Angelica also had systemic lupus and consulted Dr. Victoria
Abesamis on the matter.[23]
On the third day of chemotherapy, August 21, Angelica had difficulty breathing and was thus provided
with oxygen inhalation apparatus. This time, the reddish discoloration on Angelicas face had extended
to her neck, but petitioner dismissed it again as merely the effect of medicines.[24] Petitioner testified
that she did not see any discoloration on Angelicas face, nor did she notice any difficulty in the childs
breathing. She claimed that Angelica merely complained of nausea and was given ice chips.[25]
On August 22, 1993, at around ten oclock in the morning, upon seeing that their child could not
anymore bear the pain, respondents pleaded with petitioner to stop the chemotherapy. Petitioner
supposedly replied: Dapat 15 Cosmegen pa iyan. Okay, lets observe. If pwede na, bigyan uli ng
chemo. At this point, respondents asked petitioners permission to bring their child home. Later in the
evening, Angelica passed black stool and reddish urine.[26] Petitioner countered that there was no
record of blackening of stools but only an episode of loose bowel movement (LBM). Petitioner also
testified that what Angelica complained of was carpo-pedal spasm, not convulsion or epileptic attack, as
respondents call it (petitioner described it in the vernacular as naninigas ang kamay at paa). She then
requested for a serum calcium determination and stopped the chemotherapy. When Angelica was given
calcium gluconate, the spasm and numbness subsided.[27]
The following day, August 23, petitioner yielded to respondents request to take Angelica home. But
prior to discharging Angelica, petitioner requested for a repeat serum calcium determination and
explained to respondents that the chemotherapy will be temporarily stopped while she observes
Angelicas muscle twitching and serum calcium level. Take-home medicines were also prescribed for
Angelica, with instructions to respondents that the serum calcium test will have to be repeated after
seven days. Petitioner told respondents that she will see Angelica again after two weeks, but
respondents can see her anytime if any immediate problem arises.[28]
However, Angelica remained in confinement because while still in the premises of SLMC, her
convulsions returned and she also had LBM. Angelica was given oxygen and administration of calcium
continued.[29]
The next day, August 24, respondents claimed that Angelica still suffered from convulsions. They also
noticed that she had a fever and had difficulty breathing.[30] Petitioner insisted it was carpo-pedal
spasm, not convulsions. She verified that at around 4:50 that afternoon, Angelica developed difficulty in
breathing and had fever. She then requested for an electrocardiogram analysis, and infused calcium
gluconate on the patient at a stat dose. She further ordered that Angelica be given Bactrim,[31] a
synthetic antibacterial combination drug,*32+ to combat any infection on the childs body.*33+
By August 26, Angelica was bleeding through the mouth. Respondents also saw blood on her anus and
urine. When Lina asked petitioner what was happening to her daughter, petitioner replied, Bagsak ang
platelets ng anak mo. Four units of platelet concentrates were then transfused to Angelica. Petitioner
prescribed Solucortef. Considering that Angelicas fever was high and her white blood cell count was
low, petitioner prescribed Leucomax. About four to eight bags of blood, consisting of packed red blood
cells, fresh whole blood, or platelet concentrate, were transfused to Angelica. For two days (August 27
to 28), Angelica continued bleeding, but petitioner claimed it was lesser in amount and in frequency.
Petitioner also denied that there were gadgets attached to Angelica at that time.[34]
On August 29, Angelica developed ulcers in her mouth, which petitioner said were blood clots that
should not be removed. Respondents claimed that Angelica passed about half a liter of blood through
her anus at around seven oclock that evening, which petitioner likewise denied.
On August 30, Angelica continued bleeding. She was restless as endotracheal and nasogastric tubes
were inserted into her weakened body. An aspiration of the nasogastric tube inserted to Angelica also
revealed a bloody content. Angelica was given more platelet concentrate and fresh whole blood, which
petitioner claimed improved her condition. Petitioner told Angelica not to remove the endotracheal
tube because this may induce further bleeding.[35] She was also transferred to the intensive care unit
to avoid infection.
The next day, respondents claimed that Angelica became hysterical, vomited blood and her body turned
black. Part of Angelicas skin was also noted to be shredding by just rubbing cotton on it. Angelica was
so restless she removed those gadgets attached to her, saying Ayaw ko na; there were tears in her
eyes and she kept turning her head. Observing her daughter to be at the point of death, Lina asked for a
doctor but the latter could not answer her anymore.[36] At this time, the attending physician was Dr.
Marbella who was shaking his head saying that Angelicas platelets were down and respondents should
pray for their daughter. Reynaldo claimed that he was introduced to a pediatrician who took over his
daughters case, Dr. Abesamis who also told him to pray for his daughter. Angelica continued to have
difficulty in her breathing and blood was being suctioned from her stomach. A nurse was posted inside
Angelicas room to assist her breathing and at one point they had to revive Angelica by pumping her
chest. Thereafter, Reynaldo claimed that Angelica already experienced difficulty in urinating and her
bowel consisted of blood-like fluid. Angelica requested for an electric fan as she was in pain. Hospital
staff attempted to take blood samples from Angelica but were unsuccessful because they could not
even locate her vein. Angelica asked for a fruit but when it was given to her, she only smelled it. At this
time, Reynaldo claimed he could not find either petitioner or Dr. Marbella. That night, Angelica became
hysterical and started removing those gadgets attached to her. At three oclock in the morning of
September 1, a priest came and they prayed before Angelica expired. Petitioner finally came back and
supposedly told respondents that there was malfunction or bogged-down machine.[37]
By petitioners own account, Angelica was merely irritable that day (August 31). Petitioner noted
though that Angelicas skin was indeed sloughing off.*38+ She stressed that at 9:30 in the evening,
Angelica pulled out her endotracheal tube.[39] On September 1, exactly two weeks after being
admitted at SLMC for chemotherapy, Angelica died.[40] The cause of death, according to petitioner,
was septicemia, or overwhelming infection, which caused Angelicas other organs to fail.*41+ Petitioner
attributed this to the patients poor defense mechanism brought about by the cancer itself.[42]
While he was seeking the release of Angelicas cadaver from SLMC, Reynaldo claimed that petitioner
acted arrogantly and called him names. He was asked to sign a promissory note as he did not have cash
to pay the hospital bill.[43]
Respondents also presented as witnesses Dr. Jesusa Nieves-Vergara, Medico-Legal Officer of the PNP-
Crime Laboratory who conducted the autopsy on Angelicas cadaver, and Dr. Melinda Vergara
Balmaceda who is a Medical Specialist employed at the Department of Health (DOH) Operations and
Management Services.
Testifying on the findings stated in her medico-legal report, Dr. Vergara noted the following: (1) there
were fluids recovered from the abdominal cavity, which is not normal, and was due to hemorrhagic
shock secondary to bleeding; (2) there was hemorrhage at the left side of the heart; (3) bleeding at the
upper portion of and areas adjacent to, the esophagus; (4) lungs were heavy with bleeding at the back
and lower portion, due to accumulation of fluids; (4) yellowish discoloration of the liver; (5) kidneys
showed appearance of facial shock on account of hemorrhages; and (6) reddishness on external surface
of the spleen. All these were the end result of hypovolemic shock secondary to multiple organ
hemorrhages and disseminated intravascular coagulation. Dr. Vergara opined that this can be
attributed to the chemical agents in the drugs given to the victim, which caused platelet reduction
resulting to bleeding sufficient to cause the victims death. The time lapse for the production of DIC in
the case of Angelica (from the time of diagnosis of sarcoma) was too short, considering the survival rate
of about 3 years. The witness conceded that the victim will also die of osteosarcoma even with
amputation or chemotherapy, but in this case Angelicas death was not caused by osteosarcoma. Dr.
Vergara admitted that she is not a pathologist but her statements were based on the opinion of an
oncologist whom she had interviewed. This oncologist supposedly said that if the victim already had DIC
prior to the chemotherapy, the hospital staff could have detected it.[44]
On her part, Dr. Balmaceda declared that it is the physicians duty to inform and explain to the patient or
his relatives every known side effect of the procedure or therapeutic agents to be administered, before
securing the consent of the patient or his relatives to such procedure or therapy. The physician thus
bases his assurance to the patient on his personal assessment of the patients condition and his
knowledge of the general effects of the agents or procedure that will be allowed on the patient. Dr.
Balmaceda stressed that the patient or relatives must be informed of all known side effects based on
studies and observations, even if such will aggravate the patients condition.*45+
Dr. Jaime Tamayo, the orthopaedic surgeon who operated on Angelicas lower extremity, testified for
the defendants. He explained that in case of malignant tumors, there is no guarantee that the ablation
or removal of the amputated part will completely cure the cancer. Thus, surgery is not enough. The
mortality rate of osteosarcoma at the time of modern chemotherapy and early diagnosis still remains at
80% to 90%. Usually, deaths occur from metastasis, or spread of the cancer to other vital organs like the
liver, causing systemic complications. The modes of therapy available are the removal of the primary
source of the cancerous growth and then the residual cancer cells or metastasis should be treated with
chemotherapy. Dr. Tamayo further explained that patients with osteosarcoma have poor defense
mechanism due to the cancer cells in the blood stream. In the case of Angelica, he had previously
explained to her parents that after the surgical procedure, chemotherapy is imperative so that
metastasis of these cancer cells will hopefully be addressed. He referred the patient to petitioner
because he felt that petitioner is a competent oncologist. Considering that this type of cancer is very
aggressive and will metastasize early, it will cause the demise of the patient should there be no early
intervention (in this case, the patient developed sepsis which caused her death). Cancer cells in the
blood cannot be seen by the naked eye nor detected through bone scan. On cross-examination, Dr.
Tamayo stated that of the more than 50 child patients who had osteogenic sarcoma he had handled, he
thought that probably all of them died within six months from amputation because he did not see them
anymore after follow-up; it is either they died or had seen another doctor.[46]
In dismissing the complaint, the trial court held that petitioner was not liable for damages as she
observed the best known procedures and employed her highest skill and knowledge in the
administration of chemotherapy drugs on Angelica but despite all efforts said patient died. It cited the
testimony of Dr. Tamayo who testified that he considered petitioner one of the most proficient in the
treatment of cancer and that the patient in this case was afflicted with a very aggressive type of cancer
necessitating chemotherapy as adjuvant treatment. Using the standard of negligence laid down in Picart
v. Smith,[47] the trial court declared that petitioner has taken the necessary precaution against the
adverse effect of chemotherapy on the patient, adding that a wrong decision is not by itself negligence.
Respondents were ordered to pay their unpaid hospital bill in the amount of P139,064.43.[48]
Respondents appealed to the CA which, while concurring with the trial courts finding that there
was no negligence committed by the petitioner in the administration of chemotherapy treatment to
Angelica, found that petitioner as her attending physician failed to fully explain to the respondents all
the known side effects of chemotherapy. The appellate court stressed that since the respondents have
been told of only three side effects of chemotherapy, they readily consented thereto. Had petitioner
made known to respondents those other side effects which gravely affected their child -- such as carpo-
pedal spasm, sepsis, decrease in the blood platelet count, bleeding, infections and eventual death --
respondents could have decided differently or adopted a different course of action which could have
delayed or prevented the early death of their child.
The CA thus declared:
Plaintiffs-appellants child was suffering from a malignant disease. The attending physician
recommended that she undergo chemotherapy treatment after surgery in order to increase her chances
of survival. Appellants consented to the chemotherapy treatment because they believed in Dr. Rubi Lis
representation that the deceased would have a strong chance of survival after chemotherapy and also
because of the representation of appellee Dr. Rubi Li that there were only three possible side-effects of
the treatment. However, all sorts of painful side-effects resulted from the treatment including the
premature death of Angelica. The appellants were clearly and totally unaware of these other side-
effects which manifested only during the chemotherapy treatment. This was shown by the fact that
every time a problem would take place regarding Angelicas condition (like an unexpected side-effect
manifesting itself), they would immediately seek explanation from Dr. Rubi Li. Surely, those unexpected
side-effects culminating in the loss of a love[d] one caused the appellants so much trouble, pain and
suffering.
On this point therefore, [w]e find defendant-appellee Dr. Rubi Li negligent which would entitle plaintiffs-
appellants to their claim for damages.
x x x x
WHEREFORE, the instant appeal is hereby GRANTED. Accordingly, the assailed decision is hereby
modified to the extent that defendant-appellee Dr. Rubi Li is ordered to pay the plaintiffs-appellants the
following amounts:
1. Actual damages of P139,064.43, plus P9,828.00 for funeral expenses;
2. Moral damages of P200,000.00;
3. Exemplary damages of P50,000.00;
4. Attorneys fee of P30,000.00.
SO ORDERED.[49] (Emphasis supplied.)
Petitioner filed a motion for partial reconsideration which the appellate court denied.
Hence, this petition.
Petitioner assails the CA in finding her guilty of negligence in not explaining to the respondents all the
possible side effects of the chemotherapy on their child, and in holding her liable for actual, moral and
exemplary damages and attorneys fees. Petitioner emphasized that she was not negligent in the pre-
chemotherapy procedures and in the administration of chemotherapy treatment to Angelica.
On her supposed non-disclosure of all possible side effects of chemotherapy, including death,
petitioner argues that it was foolhardy to imagine her to be all-knowing/omnipotent. While the
theoretical side effects of chemotherapy were explained by her to the respondents, as these should be
known to a competent doctor, petitioner cannot possibly predict how a particular patients genetic
make-up, state of mind, general health and body constitution would respond to the treatment. These
are obviously dependent on too many known, unknown and immeasurable variables, thus requiring that
Angelica be, as she was, constantly and closely monitored during the treatment. Petitioner asserts that
she did everything within her professional competence to attend to the medical needs of Angelica.
Citing numerous trainings, distinctions and achievements in her field and her current position as co-
director for clinical affairs of the Medical Oncology, Department of Medicine of SLMC, petitioner
contends that in the absence of any clear showing or proof, she cannot be charged with negligence in
not informing the respondents all the side effects of chemotherapy or in the pre-treatment procedures
done on Angelica.
As to the cause of death, petitioner insists that Angelica did not die of platelet depletion but of
sepsis which is a complication of the cancer itself. Sepsis itself leads to bleeding and death. She explains
that the response rate to chemotherapy of patients with osteosarcoma is high, so much so that survival
rate is favorable to the patient. Petitioner then points to some probable consequences if Angelica had
not undergone chemotherapy. Thus, without chemotherapy, other medicines and supportive treatment,
the patient might have died the next day because of massive infection, or the cancer cells might have
spread to the brain and brought the patient into a coma, or into the lungs that the patient could have
been hooked to a respirator, or into her kidneys that she would have to undergo dialysis. Indeed,
respondents could have spent as much because of these complications. The patient would have been
deprived of the chance to survive the ailment, of any hope for life and her quality of life surely
compromised. Since she had not been shown to be at fault, petitioner maintains that the CA erred in
holding her liable for the damages suffered by the respondents.[50]
The issue to be resolved is whether the petitioner can be held liable for failure to fully disclose
serious side effects to the parents of the child patient who died while undergoing chemotherapy,
despite the absence of finding that petitioner was negligent in administering the said treatment.
The petition is meritorious.
The type of lawsuit which has been called medical malpractice or, more appropriately, medical
negligence, is that type of claim which a victim has available to him or her to redress a wrong committed
by a medical professional which has caused bodily harm. In order to successfully pursue such a claim, a
patient must prove that a health care provider, in most cases a physician, either failed to do something
which a reasonably prudent health care provider would have done, or that he or she did something that
a reasonably prudent provider would not have done; and that that failure or action caused injury to the
patient.[51]
This Court has recognized that medical negligence cases are best proved by opinions of expert
witnesses belonging in the same general neighborhood and in the same general line of practice as
defendant physician or surgeon. The deference of courts to the expert opinion of qualified physicians
stems from the formers realization that the latter possess unusual technical skills which laymen in most
instances are incapable of intelligently evaluating, hence the indispensability of expert testimonies.[52]
In this case, both the trial and appellate courts concurred in finding that the alleged negligence of
petitioner in the administration of chemotherapy drugs to respondents child was not proven
considering that Drs. Vergara and Balmaceda, not being oncologists or cancer specialists, were not
qualified to give expert opinion as to whether petitioners lack of skill, knowledge and professional
competence in failing to observe the standard of care in her line of practice was the proximate cause of
the patients death. Furthermore, respondents case was not at all helped by the non-production of
medical records by the hospital (only the biopsy result and medical bills were submitted to the court).
Nevertheless, the CA found petitioner liable for her failure to inform the respondents on all possible side
effects of chemotherapy before securing their consent to the said treatment.
The doctrine of informed consent within the context of physician-patient relationships goes far
back into English common law. As early as 1767, doctors were charged with the tort of battery (i.e.,
an unauthorized physical contact with a patient) if they had not gained the consent of their patients
prior to performing a surgery or procedure. In the United States, the seminal case was Schoendorff v.
Society of New York Hospital[53] which involved unwanted treatment performed by a doctor. Justice
Benjamin Cardozos oft-quoted opinion upheld the basic right of a patient to give consent to any
medical procedure or treatment: Every human being of adult years and sound mind has a right to
determine what shall be done with his own body; and a surgeon who performs an operation without his
patients consent, commits an assault, for which he is liable in damages.*54+ From a purely ethical
norm, informed consent evolved into a general principle of law that a physician has a duty to disclose
what a reasonably prudent physician in the medical community in the exercise of reasonable care would
disclose to his patient as to whatever grave risks of injury might be incurred from a proposed course of
treatment, so that a patient, exercising ordinary care for his own welfare, and faced with a choice of
undergoing the proposed treatment, or alternative treatment, or none at all, may intelligently exercise
his judgment by reasonably balancing the probable risks against the probable benefits.[55]
Subsequently, in Canterbury v. Spence[56] the court observed that the duty to disclose should not
be limited to medical usage as to arrogate the decision on revelation to the physician alone. Thus,
respect for the patients right of self-determination on particular therapy demands a standard set by law
for physicians rather than one which physicians may or may not impose upon themselves.[57] The
scope of disclosure is premised on the fact that patients ordinarily are persons unlearned in the medical
sciences. Proficiency in diagnosis and therapy is not the full measure of a physicians responsibility. It is
also his duty to warn of the dangers lurking in the proposed treatment and to impart information which
the patient has every right to expect. Indeed, the patients reliance upon the physician is a trust of the
kind which traditionally has exacted obligations beyond those associated with armslength
transactions.[58] The physician is not expected to give the patient a short medical education, the
disclosure rule only requires of him a reasonable explanation, which means generally informing the
patient in nontechnical terms as to what is at stake; the therapy alternatives open to him, the goals
expectably to be achieved, and the risks that may ensue from particular treatment or no treatment.[59]
As to the issue of demonstrating what risks are considered material necessitating disclosure, it was held
that experts are unnecessary to a showing of the materiality of a risk to a patients decision on
treatment, or to the reasonably, expectable effect of risk disclosure on the decision. Such unrevealed
risk that should have been made known must further materialize, for otherwise the omission, however
unpardonable, is without legal consequence. And, as in malpractice actions generally, there must be a
causal relationship between the physicians failure to divulge and damage to the patient.*60+
Reiterating the foregoing considerations, Cobbs v. Grant[61] deemed it as integral part of
physicians overall obligation to patient, the duty of reasonable disclosure of available choices with
respect to proposed therapy and of dangers inherently and potentially involved in each. However, the
physician is not obliged to discuss relatively minor risks inherent in common procedures when it is
common knowledge that such risks inherent in procedure of very low incidence. Cited as exceptions to
the rule that the patient should not be denied the opportunity to weigh the risks of surgery or treatment
are emergency cases where it is evident he cannot evaluate data, and where the patient is a child or
incompetent.[62] The court thus concluded that the patients right of self-decision can only be
effectively exercised if the patient possesses adequate information to enable him in making an
intelligent choice. The scope of the physicians communications to the patient, then must be measured
by the patients need, and that need is whatever information is material to the decision. The test
therefore for determining whether a potential peril must be divulged is its materiality to the patients
decision.[63]
Cobbs v. Grant further reiterated the pronouncement in Canterbury v. Spence that for liability of
the physician for failure to inform patient, there must be causal relationship between physicians failure
to inform and the injury to patient and such connection arises only if it is established that, had
revelation been made, consent to treatment would not have been given.
There are four essential elements a plaintiff must prove in a malpractice action based upon the
doctrine of informed consent: (1) the physician had a duty to disclose material risks; (2) he failed to
disclose or inadequately disclosed those risks; (3) as a direct and proximate result of the failure to
disclose, the patient consented to treatment she otherwise would not have consented to; and (4)
plaintiff was injured by the proposed treatment. The gravamen in an informed consent case requires
the plaintiff to point to significant undisclosed information relating to the treatment which would have
altered her decision to undergo it.[64]
Examining the evidence on record, we hold that there was adequate disclosure of material risks inherent
in the chemotherapy procedure performed with the consent of Angelicas parents. Respondents could
not have been unaware in the course of initial treatment and amputation of Angelicas lower extremity,
that her immune system was already weak on account of the malignant tumor in her knee. When
petitioner informed the respondents beforehand of the side effects of chemotherapy which includes
lowered counts of white and red blood cells, decrease in blood platelets, possible kidney or heart
damage and skin darkening, there is reasonable expectation on the part of the doctor that the
respondents understood very well that the severity of these side effects will not be the same for all
patients undergoing the procedure. In other words, by the nature of the disease itself, each patients
reaction to the chemical agents even with pre-treatment laboratory tests cannot be precisely
determined by the physician. That death can possibly result from complications of the treatment or the
underlying cancer itself, immediately or sometime after the administration of chemotherapy drugs, is a
risk that cannot be ruled out, as with most other major medical procedures, but such conclusion can be
reasonably drawn from the general side effects of chemotherapy already disclosed.
As a physician, petitioner can reasonably expect the respondents to have considered the variables in the
recommended treatment for their daughter afflicted with a life-threatening illness. On the other hand,
it is difficult to give credence to respondents claim that petitioner told them of 95% chance of recovery
for their daughter, as it was unlikely for doctors like petitioner who were dealing with grave conditions
such as cancer to have falsely assured patients of chemotherapys success rate. Besides, informed
consent laws in other countries generally require only a reasonable explanation of potential harms, so
specific disclosures such as statistical data, may not be legally necessary.[65]
The element of ethical duty to disclose material risks in the proposed medical treatment cannot
thus be reduced to one simplistic formula applicable in all instances. Further, in a medical malpractice
action based on lack of informed consent, the plaintiff must prove both the duty and the breach of that
duty through expert testimony.[66] Such expert testimony must show the customary standard of care
of physicians in the same practice as that of the defendant doctor.[67]
In this case, the testimony of Dr. Balmaceda who is not an oncologist but a Medical Specialist of
the DOHs Operational and Management Services charged with receiving complaints against hospitals,
does not qualify as expert testimony to establish the standard of care in obtaining consent for
chemotherapy treatment. In the absence of expert testimony in this regard, the Court feels hesitant in
defining the scope of mandatory disclosure in cases of malpractice based on lack of informed consent,
much less set a standard of disclosure that, even in foreign jurisdictions, has been noted to be an
evolving one.
As society has grappled with the juxtaposition between personal autonomy and the medical profession's
intrinsic impetus to cure, the law defining adequate disclosure has undergone a dynamic evolution. A
standard once guided solely by the ruminations of physicians is now dependent on what a reasonable
person in the patients position regards as significant. This change in perspective is especially important
as medical breakthroughs move practitioners to the cutting edge of technology, ever encountering new
and heretofore unimagined treatments for currently incurable diseases or ailments. An adaptable
standard is needed to account for this constant progression. Reasonableness analyses permeate our
legal system for the very reason that they are determined by social norms, expanding and contracting
with the ebb and flow of societal evolution.

As we progress toward the twenty-first century, we now realize that the legal standard of disclosure is
not subject to construction as a categorical imperative. Whatever formulae or processes we adopt are
only useful as a foundational starting point; the particular quality or quantity of disclosure will remain
inextricably bound by the facts of each case. Nevertheless, juries that ultimately determine whether a
physician properly informed a patient are inevitably guided by what they perceive as the common
expectation of the medical consumera reasonable person in the patients position when deciding to
accept or reject a recommended medical procedure.*68+ (Emphasis supplied.)

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated June 15, 2004
and the Resolution dated September 1, 2004 of the Court of Appeals in CA-G.R. CV No. 58013 are SET
ASIDE.
The Decision dated September 5, 1997 of the Regional Trial Court of Legazpi City, Branch 8, in Civil Case
No. 8904 is REINSTATED and UPHELD.
No costs.
SO ORDERED.

G.R. No. 156037 May 28, 2007

MERCURY DRUG CORPORATION, Petitioner,
vs.
SEBASTIAN M. BAKING, Respondent.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari1 assailing the Decision2 dated May 30,
2002 and Resolution dated November 5, 2002 of the Court of Appeals in CA-G.R. CV No. 57435, entitled
"Sebastian M. Baking, plaintiff-appellee, versus Mercury Drug Co. Inc., defendant-appellant."

The facts are:

On November 25, 1993, Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy for a medical
check-up. On the following day, after undergoing an ECG, blood, and hematology examinations and
urinalysis, Dr. Sy found that respondents blood sugar and triglyceride were above normal levels. Dr. Sy
then gave respondent two medical prescriptions Diamicron for his blood sugar and Benalize tablets for
his triglyceride.

Respondent then proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to buy the
prescribed medicines. However, the saleslady misread the prescription for Diamicron as a prescription
for Dormicum. Thus, what was sold to respondent was Dormicum, a potent sleeping tablet.

Unaware that what was given to him was the wrong medicine, respondent took one pill of Dormicum on
three consecutive days November 6, 1993 at 9:00 p.m., November 7 at 6:00 a.m., and November 8 at
7:30 a.m.

On November 8 or on the third day he took the medicine, respondent figured in a vehicular accident.
The car he was driving collided with the car of one Josie Peralta. Respondent fell asleep while driving. He
could not remember anything about the collision nor felt its impact.

Suspecting that the tablet he took may have a bearing on his physical and mental state at the time of
the collision, respondent returned to Dr. Sys clinic. Upon being shown the medicine, Dr. Sy was shocked
to find that what was sold to respondent was Dormicum, instead of the prescribed Diamicron.

Thus, on April 14, 1994, respondent filed with the Regional Trial Court (RTC), Branch 80 of Quezon City a
complaint for damages against petitioner, docketed as Civil Case No. Q-94-20193.

After hearing, the trial court rendered its Decision dated March 18, 1997 in favor of respondent, thus:

WHEREFORE, premises considered, by preponderance of evidence, the Court hereby renders judgment
in favor of the plaintiff and against the defendant ordering the latter to pay mitigated damages as
follows:

1. P250,000.00 as moral damages;

2. P20,000.00 as attorneys fees and litigation expenses;

3. plus % of the cost of the suit.

SO ORDERED.

On appeal, the Court of Appeals, in its Decision, affirmed in toto the RTC judgment. Petitioner filed a
motion for reconsideration but it was denied in a Resolution dated November 5, 2002.

Hence, this petition.

Petitioner contends that the Decision of the Court of Appeals is not in accord with law or prevailing
jurisprudence.

Respondent, on the other hand, maintains that the petition lacks merit and, therefore, should be
denied.

The issues for our resolution are:

1. Whether petitioner was negligent, and if so, whether such negligence was the proximate cause of
respondents accident; and

2. Whether the award of moral damages, attorneys fees, litigation expenses, and cost of the suit is
justified.

Article 2176 of the New Civil Code provides:

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.

To sustain a claim based on the above provision, the following requisites must concur: (a) damage
suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect
between the fault or negligence of the defendant and the damage incurred by the plaintiff.3

There is no dispute that respondent suffered damages.

It is generally recognized that the drugstore business is imbued with public interest. The health and
safety of the people will be put into jeopardy if drugstore employees will not exercise the highest degree
of care and diligence in selling medicines. Inasmuch as the matter of negligence is a question of fact, we
defer to the findings of the trial court affirmed by the Court of Appeals.

Obviously, petitioners employee was grossly negligent in selling to respondent Dormicum, instead of
the prescribed Diamicron. Considering that a fatal mistake could be a matter of life and death for a
buying patient, the said employee should have been very cautious in dispensing medicines. She should
have verified whether the medicine she gave respondent was indeed the one prescribed by his
physician. The care required must be commensurate with the danger involved, and the skill employed
must correspond with the superior knowledge of the business which the law demands.41awphi1.nt

Petitioner contends that the proximate cause of the accident was respondents negligence in driving his
car.

We disagree.

Proximate cause is defined as any cause that produces injury in a natural and continuous sequence,
unbroken by any efficient intervening cause, such that the result would not have occurred otherwise.
Proximate cause is determined from the facts of each case, upon a combined consideration of logic,
common sense, policy, and precedent.5

Here, the vehicular accident could not have occurred had petitioners employee been careful in reading
Dr. Sys prescription. Without the potent effects of Dormicum, a sleeping tablet, it was unlikely that
respondent would fall asleep while driving his car, resulting in a collision.

Complementing Article 2176 is Article 2180 of the same Code which states:

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

x x x

The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.

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.

x x x

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

It is thus clear that the employer of a negligent employee is liable for the damages caused by the latter.
When an injury is caused by the negligence of an employee, there instantly arises a presumption of the
law that there has been negligence on the part of the employer, either in the selection of his employee
or in the supervision over him, after such selection. The presumption, however, may be rebutted by a
clear showing on the part of the employer that he has exercised the care and diligence of a good father
of a family in the selection and supervision of his employee.6 Here, petitioner's failure to prove that it
exercised the due diligence of a good father of a family in the selection and supervision of its employee
will make it solidarily liable for damages caused by the latter.

As regards the award of moral damages, we hold the same to be in order. Moral damages may be
awarded whenever the defendants wrongful act or omission is the proximate cause of the plaintiffs
physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury in the cases specified or analogous to those provided
in Article 2219 of the Civil Code.7

Respondent has adequately established the factual basis for the award of moral damages when he
testified that he suffered mental anguish and anxiety as a result of the accident caused by the
negligence of petitioners employee.

There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral
damages, since each case must be governed by its own peculiar facts. However, it must be
commensurate to the loss or injury suffered.8 Taking into consideration the attending circumstances
here, we are convinced that the amount awarded by the trial court is exorbitant. Thus, we reduce the
amount of moral damages from P250,000.00 to P50,000.00 only.

In addition, we also deem it necessary to award exemplary damages. Article 2229 allows the grant of
exemplary damages by way of example or correction for the public good. As mentioned earlier, the
drugstore business is affected with public interest. Petitioner should have exerted utmost diligence in
the selection and supervision of its employees. On the part of the employee concerned, she should have
been extremely cautious in dispensing pharmaceutical products. Due to the sensitive nature of its
business, petitioner must at all times maintain a high level of meticulousness. Therefore, an award of
exemplary damages in the amount of P25,000.00 is in order.1awphi1.nt

On the matter of attorneys fees and expenses of litigation, it is settled that the reasons or grounds for
the award thereof must be set forth in the decision of the court.9 Since the trial courts decision did not
give the basis of the award, the same must be deleted. In Vibram Manufacturing Corporation v. Manila
Electric Company,10 we held:

Likewise, the award for attorneys fees and litigation expenses should be deleted. Well-enshrined is that
"an award for attorneys fees must be stated in the text of the courts decision and not in the dispositive
portion only" (Consolidated Bank and Trust Corporation (Solidbank) v. Court of Appeals, 246 SCRA 193
[1995] and Keng Hua Paper Products, Inc. v. Court of Appeals, 286 SCRA 257 [1998]). This is also true
with the litigation expenses where the body of the decision discussed nothing for its basis.

WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 57435 are AFFIRMED with modification in the sense that (a) the award of moral damages
to respondent is reduced from P250,000.00 to P50,000.00; (b) petitioner is likewise ordered to pay said
respondent exemplary damages in the amount of P25,000.00; and (c) the award of attorneys fees and
litigation expenses is deleted.

Costs against petitioner.

SO ORDERED.

G.R. No. 154469 December 6, 2006

METROPOLITAN BANK AND TRUST COMPANY, petitioners,
vs.
RENATO D. CABILZO, respondent.


D E C I S I O N


CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari, filed by petitioner Metropolitan Bank and Trust
Company (Metrobank) seeking to reverse and set aside the Decision1 of the Court of Appeals dated 8
March 2002 and its Resolution dated 26 July 2002 affirming the Decision of the Regional Trial Court
(RTC) of Manila, Branch 13 dated 4 September 1998. The dispositive portion of the Court of Appeals
Decision reads:

WHEREFORE, the assailed decision dated September 4, 1998 is AFFIRMED with modifications (sic) that
the awards for exemplary damages and attorneys fees are hereby deleted.

Petitioner Metrobank is a banking institution duly organized and existing as such under Philippine laws.2

Respondent Renato D. Cabilzo (Cabilzo) was one of Metrobanks clients who maintained a current
account with Metrobank Pasong Tamo Branch.3

On 12 November 1994, Cabilzo issued a Metrobank Check No. 985988, payable to "CASH" and postdated
on 24 November 1994 in the amount of One Thousand Pesos (P1,000.00). The check was drawn against
Cabilzos Account with Metrobank Pasong Tamo Branch under Current Account No. 618044873-3 and
was paid by Cabilzo to a certain Mr. Marquez, as his sales commission.4

Subsequently, the check was presented to Westmont Bank for payment. Westmont Bank, in turn,
indorsed the check to Metrobank for appropriate clearing. After the entries thereon were examined,
including the availability of funds and the authenticity of the signature of the drawer, Metrobank
cleared the check for encashment in accordance with the Philippine Clearing House Corporation (PCHC)
Rules.

On 16 November 1994, Cabilzos representative was at Metrobank Pasong Tamo Branch to make some
transaction when he was asked by a bank personnel if Cabilzo had issued a check in the amount of
P91,000.00 to which the former replied in the negative. On the afternoon of the same date, Cabilzo
himself called Metrobank to reiterate that he did not issue a check in the amount of P91,000.00 and
requested that the questioned check be returned to him for verification, to which Metrobank
complied.5

Upon receipt of the check, Cabilzo discovered that Metrobank Check No. 985988 which he issued on 12
November 1994 in the amount of P1,000.00 was altered to P91,000.00 and the date 24 November 1994
was changed to 14 November 1994.6

Hence, Cabilzo demanded that Metrobank re-credit the amount of P91,000.00 to his account.
Metrobank, however, refused reasoning that it has to refer the matter first to its Legal Division for
appropriate action. Repeated verbal demands followed but Metrobank still failed to re-credit the
amount of P91,000.00 to Cabilzos account.7

On 30 June 1995, Cabilzo, thru counsel, finally sent a letter-demand8 to Metrobank for the payment of
P90,000.00, after deducting the original value of the check in the amount of P1,000.00. Such written
demand notwithstanding, Metrobank still failed or refused to comply with its obligation.

Consequently, Cabilzo instituted a civil action for damages against Metrobank before the RTC of Manila,
Branch 13. In his Complaint docketed as Civil Case No. 95-75651, Renato D. Cabilzo v. Metropolitan Bank
and Trust Company, Cabilzo prayed that in addition to his claim for reimbursement, actual and moral
damages plus costs of the suit be awarded in his favor.9

For its part, Metrobank countered that upon the receipt of the said check through the PCHC on 14
November 1994, it examined the genuineness and the authenticity of the drawers signature appearing
thereon and the technical entries on the check including the amount in figures and in words to
determine if there were alterations, erasures, superimpositions or intercalations thereon, but none was
noted. After verifying the authenticity and propriety of the aforesaid entries, including the indorsement
of the collecting bank located at the dorsal side of the check which stated that, "all prior indorsements
and lack of indorsement guaranteed," Metrobank cleared the check.10

Anent thereto, Metrobank claimed that as a collecting bank and the last indorser, Westmont Bank
should be held liable for the value of the check. Westmont Bank indorsed the check as the an
unqualified indorser, by virtue of which it assumed the liability of a general indorser, and thus, among
others, warranted that the instrument is genuine and in all respect what it purports to be.

In addition, Metrobank, in turn, claimed that Cabilzo was partly responsible in leaving spaces on the
check, which, made the fraudulent insertion of the amount and figures thereon, possible. On account of
his negligence in the preparation and issuance of the check, which according to Metrobank, was the
proximate cause of the loss, Cabilzo cannot thereafter claim indemnity by virtue of the doctrine of
equitable estoppel.

Thus, Metrobank demanded from Cabilzo, for payment in the amount of P100,000.00 which represents
the cost of litigation and attorneys fees, for allegedly bringing a frivolous and baseless suit. 11

On 19 April 1996, Metrobank filed a Third-Party Complaint12 against Westmont Bank on account of its
unqualified indorsement stamped at the dorsal side of the check which the former relied upon in
clearing what turned out to be a materially altered check.

Subsequently, a Motion to Dismiss13 the Third-Party Complaint was then filed by Westmont bank
because another case involving the same cause of action was pending before a different court. The said
case arose from an action for reimbursement filed by Metrobank before the Arbitration Committee of
the PCHC against Westmont Bank, and now the subject of a Petition for Review before the RTC of
Manila, Branch 19.

In an Order14 dated 4 February 1997, the trial court granted the Motion to Dismiss the Third-Party
Complaint on the ground of litis pendentia.

On 4 September 1998, the RTC rendered a Decision15 in favor of Cabilzo and thereby ordered
Metrobank to pay the sum of P90,000.00, the amount of the check. In stressing the fiduciary nature of
the relationship between the bank and its clients and the negligence of the drawee bank in failing to
detect an apparent alteration on the check, the trial court ordered for the payment of exemplary
damages, attorneys fees and cost of litigation. The dispositive portion of the Decision reads:

WHEREFORE, judgment is rendered ordering defendant Metropolitan Bank and Trust Company to pay
plaintiff Renato Cabilzo the sum of P90,000 with legal interest of 6 percent per annum from November
16, 1994 until payment is made plus P20,000 attorneys fees, exemplary damages of P50,000, and costs
of the suit.16

Aggrieved, Metrobank appealed the adverse decision to the Court of Appeals reiterating its previous
argument that as the last indorser, Westmont Bank shall bear the loss occasioned by the fraudulent
alteration of the check. Elaborating, Metrobank maintained that by reason of its unqualified
indorsement, Westmont Bank warranted that the check in question is genuine, valid and subsisting and
that upon presentment the check shall be accepted according to its tenor.

Even more, Metrobank argued that in clearing the check, it was not remiss in the performance of its
duty as the drawee bank, but rather, it exercised the highest degree of diligence in accordance with the
generally accepted banking practice. It further insisted that the entries in the check were regular and
authentic and alteration could not be determined even upon close examination.

In a Decision17 dated 8 March 2002, the Court of Appeals affirmed with modification the Decision of the
court a quo, similarly finding Metrobank liable for the amount of the check, without prejudice, however,
to the outcome of the case between Metrobank and Westmont Bank which was pending before another
tribunal. The decretal portion of the Decision reads:

WHEREFORE, the assailed decision dated September 4, 1998 is AFFIRMED with the modifications (sic)
that the awards for exemplary damages and attorneys fees are hereby deleted.18

Similarly ill-fated was Metrobanks Motion for Reconsideration which was also denied by the appellate
court in its Resolution19 issued on 26 July 2002, for lack of merit.

Metrobank now poses before this Court this sole issue:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING METROBANK, AS DRAWEE BANK,
LIABLE FOR THE ALTERATIONS ON THE SUBJECT CHECK BEARING THE AUTHENTIC SIGNATURE OF THE
DRAWER THEREOF.

We resolve to deny the petition.

An alteration is said to be material if it changes the effect of the instrument. It means that an
unauthorized change in an instrument that purports to modify in any respect the obligation of a party or
an unauthorized addition of words or numbers or other change to an incomplete instrument relating to
the obligation of a party.20 In other words, a material alteration is one which changes the items which
are required to be stated under Section 1 of the Negotiable Instruments Law.

Section 1 of the Negotiable Instruments Law provides:

Section 1. Form of negotiable instruments. - An instrument to be negotiable must conform to the
following requirements:

(a) It must be in writing and signed by the maker or drawer;

(b) Must contain an unconditional promise or order to pay a sum certain in money;

(c) Must be payable on demand or at a fixed determinable future time;

(d) Must be payable to order or to bearer; and

(e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein
with reasonable certainty.

Also pertinent is the following provision in the Negotiable Instrument Law which states:

Section 125. What constitutes material alteration. Any alteration which changes:

(a) The date;

(b) The sum payable, either for principal or interest;

(c) The time or place of payment;

(d) The number or the relation of the parties;

(e) The medium or currency in which payment is to be made;

Or which adds a place of payment where no place of payment is specified, or any other change or
addition which alters the effect of the instrument in any respect is a material alteration.

In the case at bar, the check was altered so that the amount was increased from P1,000.00 to
P91,000.00 and the date was changed from 24 November 1994 to 14 November 1994. Apparently, since
the entries altered were among those enumerated under Section 1 and 125, namely, the sum of money
payable and the date of the check, the instant controversy therefore squarely falls within the purview of
material alteration.

Now, having laid the premise that the present petition is a case of material alteration, it is now
necessary for us to determine the effect of a materially altered instrument, as well as the rights and
obligations of the parties thereunder. The following provision of the Negotiable Instrument Law will
shed us some light in threshing out this issue:

Section 124. Alteration of instrument; effect of. Where a negotiable instrument is materially altered
without the assent of all parties liable thereon, it is avoided, except as against a party who has himself
made, authorized, and assented to the alteration and subsequent indorsers.

But when the instrument has been materially altered and is in the hands of a holder in due course not a
party to the alteration, he may enforce the payment thereof according to its original tenor. (Emphasis
ours.)

Indubitably, Cabilzo was not the one who made nor authorized the alteration. Neither did he assent to
the alteration by his express or implied acts. There is no showing that he failed to exercise such
reasonable degree of diligence required of a prudent man which could have otherwise prevented the
loss. As correctly ruled by the appellate court, Cabilzo was never remiss in the preparation and issuance
of the check, and there were no indicia of evidence that would prove otherwise. Indeed, Cabilzo placed
asterisks before and after the amount in words and figures in order to forewarn the subsequent holders
that nothing follows before and after the amount indicated other than the one specified between the
asterisks.

The degree of diligence required of a reasonable man in the exercise of his tasks and the performance of
his duties has been faithfully complied with by Cabilzo. In fact, he was wary enough that he filled with
asterisks the spaces between and after the amounts, not only those stated in words, but also those in
numerical figures, in order to prevent any fraudulent insertion, but unfortunately, the check was still
successfully altered, indorsed by the collecting bank, and cleared by the drawee bank, and encashed by
the perpetrator of the fraud, to the damage and prejudice of Cabilzo.

Verily, Metrobank cannot lightly impute that Cabilzo was negligent and is therefore prevented from
asserting his rights under the doctrine of equitable estoppel when the facts on record are bare of
evidence to support such conclusion. The doctrine of equitable estoppel states that when one of the
two innocent persons, each guiltless of any intentional or moral wrong, must suffer a loss, it must be
borne by the one whose erroneous conduct, either by omission or commission, was the cause of
injury.21 Metrobanks reliance on this dictum, is misplaced. For one, Metrobanks representation that it
is an innocent party is flimsy and evidently, misleading. At the same time, Metrobank cannot asseverate
that Cabilzo was negligent and this negligence was the proximate cause22 of the loss in the absence of
even a scintilla proof to buttress such claim. Negligence is not presumed but must be proven by the one
who alleges it.23

Undoubtedly, Cabilzo was an innocent party in this instant controversy. He was just an ordinary
businessman who, in order to facilitate his business transactions, entrusted his money with a bank, not
knowing that the latter would yield a substantial amount of his deposit to fraud, for which Cabilzo can
never be faulted.

We never fail to stress the remarkable significance of a banking institution to commercial transactions,
in particular, and to the countrys economy in general. The banking system is an indispensable
institution in the modern world and plays a vital role in the economic life of every civilized nation.
Whether as mere passive entities for the safekeeping and saving of money or as active instruments of
business and commerce, banks have become an ubiquitous presence among the people, who have
come to regard them with respect and even gratitude and, most of all, confidence.24

Thus, even the humble wage-earner does not hesitate to entrust his life's savings to the bank of his
choice, knowing that they will be safe in its custody and will even earn some interest for him. The
ordinary person, with equal faith, usually maintains a modest checking account for security and
convenience in the settling of his monthly bills and the payment of ordinary expenses. As for a
businessman like the respondent, the bank is a trusted and active associate that can help in the running
of his affairs, not only in the form of loans when needed but more often in the conduct of their day-to-
day transactions like the issuance or encashment of checks.25

In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such
account consists only of a few hundred pesos or of millions. The bank must record every single
transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the
account is to reflect at any given time the amount of money the depositor can dispose of as he sees fit,
confident that the bank will deliver it as and to whomever he directs.26

The point is that as a business affected with public interest and because of the nature of its functions,
the bank is under obligation to treat the accounts of its depositors with meticulous care, always having
in mind the fiduciary nature of their relationship. The appropriate degree of diligence required of a bank
must be a high degree of diligence, if not the utmost diligence.27

In the present case, it is obvious that Metrobank was remiss in that duty and violated that relationship.
As observed by the Court of Appeals, there are material alterations on the check that are visible to the
naked eye. Thus:

x x x The number "1" in the date is clearly imposed on a white figure in the shape of the number "2". The
appellants employees who examined the said check should have likewise been put on guard as to why
at the end of the amount in words, i.e., after the word "ONLY", there are 4 asterisks, while at the
beginning of the line or before said phrase, there is none, even as 4 asterisks have been placed before
and after the word "CASH" in the space for payee. In addition, the 4 asterisks before the words "ONE
THOUSAND PESOS ONLY" have noticeably been erased with typing correction paper, leaving white
marks, over which the word "NINETY" was superimposed. The same can be said of the numeral "9" in
the amount "91,000", which is superimposed over a whitish mark, obviously an erasure, in lieu of the
asterisk which was deleted to insert the said figure. The appellants employees should have again
noticed why only 2 asterisks were placed before the amount in figures, while 3 asterisks were placed
after such amount. The word "NINETY" is also typed differently and with a lighter ink, when compared
with the words "ONE THOUSAND PESOS ONLY." The letters of the word "NINETY" are likewise a little
bigger when compared with the letters of the words "ONE THOUSAND PESOS ONLY".28

Surprisingly, however, Metrobank failed to detect the above alterations which could not escape the
attention of even an ordinary person. This negligence was exacerbated by the fact that, as found by the
trial court, the check in question was examined by the cash custodian whose functions do not include
the examinations of checks indorsed for payment against drawers accounts.29 Obviously, the employee
allowed by Metrobank to examine the check was not verse and competent to handle such duty. These
factual findings of the trial court is conclusive upon this court especially when such findings was affirmed
the appellate court.30

Apropos thereto, we need to reiterate that by the very nature of their work the degree of responsibility,
care and trustworthiness expected of their employees and officials is far better than those of ordinary
clerks and employees. Banks are expected to exercise the highest degree of diligence in the selection
and supervision of their employees.31

In addition, the bank on which the check is drawn, known as the drawee bank, is under strict liability to
pay to the order of the payee in accordance with the drawers instructions as reflected on the face and
by the terms of the check. Payment made under materially altered instrument is not payment done in
accordance with the instruction of the drawer.

When the drawee bank pays a materially altered check, it violates the terms of the check, as well as its
duty to charge its clients account only for bona fide disbursements he had made. Since the drawee
bank, in the instant case, did not pay according to the original tenor of the instrument, as directed by
the drawer, then it has no right to claim reimbursement from the drawer, much less, the right to deduct
the erroneous payment it made from the drawers account which it was expected to treat with utmost
fidelity.

Metrobank vigorously asserts that the entries in the check were carefully examined: The date of the
instrument, the amount in words and figures, as well as the drawers signature, which after verification,
were found to be proper and authentic and was thus cleared. We are not persuaded. Metrobanks
negligence consisted in the omission of that degree of diligence required of a bank owing to the
fiduciary nature of its relationship with its client. Article 1173 of the Civil Code provides:

The fault or negligence of the obligor consists in the omission of that diligence which is required by the
nature of the obligation and corresponds with the circumstances of the persons, of the time and of the
place. x x x.

Beyond question, Metrobank failed to comply with the degree required by the nature of its business as
provided by law and jurisprudence. If indeed it was not remiss in its obligation, then it would be
inconceivable for it not to detect an evident alteration considering its vast knowledge and technical
expertise in the intricacies of the banking business. This Court is not completely unaware of banks
practices of employing devices and techniques in order to detect forgeries, insertions, intercalations,
superimpositions and alterations in checks and other negotiable instruments so as to safeguard their
authenticity and negotiability. Metrobank cannot now feign ignorance nor claim diligence; neither can it
point its finger at the collecting bank, in order to evade liability.

Metrobank argues that Westmont Bank, as the collecting bank and the last indorser, shall bear the loss.
Without ruling on the matter between the drawee bank and the collecting bank, which is already under
the jurisdiction of another tribunal, we find that Metrobank cannot rely on such indorsement, in clearing
the questioned check. The corollary liability of such indorsement, if any, is separate and independent
from the liability of Metrobank to Cabilzo.

The reliance made by Metrobank on Westmont Banks indorsement is clearly inconsistent, if not totally
offensive to the dictum that being impressed with public interest, banks should exercise the highest
degree of diligence, if not utmost diligence in dealing with the accounts of its own clients. It owes the
highest degree fidelity to its clients and should not therefore lightly rely on the judgment of other banks
on occasions where its clients money were involve, no matter how small or substantial the amount at
stake.

Metrobanks contention that it relied on the strength of collecting banks indorsement may be merely a
lame excuse to evade liability, or may be indeed an actual banking practice. In either case, such act
constitutes a deplorable banking practice and could not be allowed by this Court bearing in mind that
the confidence of public in general is of paramount importance in banking business.

What is even more deplorable is that, having been informed of the alteration, Metrobank did not
immediately re-credit the amount that was erroneously debited from Cabilzos account but permitted a
full blown litigation to push through, to the prejudice of its client. Anyway, Metrobank is not left with no
recourse for it can still run after the one who made the alteration or with the collecting bank, which it
had already done. It bears repeating that the records are bare of evidence to prove that Cabilzo was
negligent. We find no justifiable reason therefore why Metrobank did not immediately reimburse his
account. Such ineptness comes within the concept of wanton manner contemplated under the Civil
Code which warrants the imposition of exemplary damages, "by way of example or correction for the
public good," in the words of the law. It is expected that this ruling will serve as a stern warning in order
to deter the repetition of similar acts of negligence, lest the confidence of the public in the banking
system be further eroded. 32

WHEREFORE, premises considered, the instant Petition is DENIED. The Decision dated 8 March 2002 and
the Resolution dated 26 July 2002 of the Court of Appeals are AFFIRMED with modification that
exemplary damages in the amount of P50,000.00 be awarded. Costs against the petitioner.

SO ORDERED.
SECOND DIVISION

DELSAN TRANSPORT LINES, INC.,
Petitioner,



- versus -



AMERICAN HOME ASSURANCE CORPORATION,
Respondent.
G.R. No. 149019

Present:

PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.

Promulgated:

August 15, 2006
x------------------------------------------------------------------------------------x



D E C I S I O N

GARCIA, J.:





By this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Delsan
Transport Lines, Inc. (Delsan hereafter) assails and seeks to set aside the Decision,[1] dated July 16,
2001, of the Court of Appeals (CA) in CA-G.R. CV No. 40951 affirming an earlier decision of the Regional
Trial Court (RTC) of Manila, Branch IX, in two separate complaints for damages docketed as Civil Case
No. 85-29357 and Civil Case No. 85-30559.

The facts:

Delsan is a domestic corporation which owns and operates the vessel MT Larusan. On the other
hand, respondent American Home Assurance Corporation (AHAC for brevity) is a foreign insurance
company duly licensed to do business in the Philippines through its agent, the American-International
Underwriters, Inc. (Phils.). It is engaged, among others, in insuring cargoes for transportation within the
Philippines.

On August 5, 1984, Delsan received on board MT Larusan a shipment consisting of 1,986.627 k/l
Automotive Diesel Oil (diesel oil) at the Bataan Refinery Corporation for transportation and delivery to
the bulk depot in Bacolod City of Caltex Phils., Inc. (Caltex), pursuant to a Contract of Afreightment. The
shipment was insured by respondent AHAC against all risks under Inland Floater Policy No. AH-IF64-
1011549P and Marine Risk Note No. 34-5093-6.

On August 7, 1984, the shipment arrived in Bacolod City. Immediately thereafter, unloading
operations commenced. The discharging of the diesel oil started at about 1:30 PM of the same day.
However, at about 10:30 PM, the discharging had to be stopped on account of the discovery that the
port bow mooring of the vessel was intentionally cut or stolen by unknown persons. Because there was
nothing holding it, the vessel drifted westward, dragged and stretched the flexible rubber hose attached
to the riser, broke the elbow into pieces, severed completely the rubber hose connected to the tanker
from the main delivery line at sea bed level and ultimately caused the diesel oil to spill into the sea. To
avoid further spillage, the vessels crew tried water flushing to clear the line of the diesel oil but to no
avail. In the meantime, the shore tender, who was waiting for the completion of the water flushing, was
surprised when the tanker signaled a red light which meant stop pumping. Unaware of what
happened, the shore tender, thinking that the vessel would, at any time, resume pumping, did not shut
the storage tank gate valve. As all the gate valves remained open, the diesel oil that was earlier
discharged from the vessel into the shore tank backflowed. Due to non-availability of a pump boat, the
vessel could not send somebody ashore to inform the people at the depot about what happened. After
almost an hour, a gauger and an assistant surveyor from the Caltexs Bulk Depot Office boarded the
vessel. It was only then that they found out what had happened. Thereafter, the duo immediately went
ashore to see to it that the shore tank gate valve was closed. The loss of diesel oil due to spillage was
placed at 113.788 k/l while some 435,081 k/l thereof backflowed from the shore tank.

As a result of spillage and backflow of diesel oil, Caltex sought recovery of the loss from Delsan, but
the latter refused to pay. As insurer, AHAC paid Caltex the sum of P479,262.57 for spillage, pursuant to
Marine Risk Note No. 34-5093-6, and P1,939,575.37 for backflow of the diesel oil pursuant to Inland
Floater Policy No. AH-1F64-1011549P.

On February 19, 1985, AHAC, as Caltexs subrogee, instituted Civil Case No. 85-29357 against
Delsan before the Manila RTC, Branch 9, for loss caused by the spillage. It likewise prayed that it be
indemnified for damages suffered in the amount of P652,432.57 plus legal interest thereon.

Also, on May 5, 1985, in the Manila RTC, Branch 31, AHAC instituted Civil Case No. 85-30559
against Delsan for the loss caused by the backflow. It likewise prayed that it be awarded the amount of
P1,939,575.37 for damages and reasonable attorneys fees. As counterclaim in both cases, AHAC prayed
for attorneys fees in the amount of P200,000.00 and P500.00 for every court appearance.

Since the cause of action in both cases arose out of the same incident and involved the same
issues, the two were consolidated and assigned to Branch 9 of the court.

On August 31, 1989, the trial court rendered its decision[2] in favor of AHAC holding Delsan liable
for the loss of the cargo for its negligence in its duty as a common carrier. Dispositively, the decision
reads:

WHEREFORE, judgment is hereby rendered:

A). In Civil Case No. 85-30559:

(1) Ordering the defendant (petitioner Delsan) to pay plaintiff (respondent AHAC) the sum of
P1,939,575.37 with interest thereon at the legal rate from November 21, 1984 until fully paid and
satisfied; and

(2) Ordering defendant to pay plaintiff the sum of P10,000.00 as and for attorneys fees.

For lack of merit, the counterclaim is hereby dismissed.

B). In Civil Case No. 85-29357:

(1) Ordering defendant to pay plaintiff the sum of P479,262.57 with interest thereon at the legal
rate from February 6, 1985 until fully paid and satisfied;

(2) Ordering defendant to pay plaintiff the sum of P5,000.00 as and for attorneys fees.

For lack of merit, the counterclaim is hereby dismissed.

Costs against the defendant.

SO ORDERED.

In time, Delsan appealed to the CA whereat its recourse was docketed as CA-G.R. CV No. 40951.

In the herein challenged decision,[3] the CA affirmed the findings of the trial court. In so ruling, the
CA declared that Delsan failed to exercise the extraordinary diligence of a good father of a family in the
handling of its cargo. Applying Article 1736[4] of the Civil Code, the CA ruled that since the discharging of
the diesel oil into Caltex bulk depot had not been completed at the time the losses occurred, there was
no reason to imply that there was actual delivery of the cargo to Caltex, the consignee. We quote the
fallo of the CA decision:

WHEREFORE, premises considered, the appealed Decision of the Regional Trial Court of Manila,
Branch 09 in Civil Case Nos. 85-29357 and 85-30559 is hereby AFFIRMED with a modification that
attorneys fees awarded in Civil Case Nos. 85-29357 and 85-30559 are hereby DELETED.

SO ORDERED.


Delsan is now before the Court raising substantially the same issues proffered before the CA.

Principally, Delsan insists that the CA committed reversible error in ruling that Article 1734 of the
Civil Code cannot exculpate it from liability for the loss of the subject cargo and in not applying the rule
on contributory negligence against Caltex, the shipper-owner of the cargo, and in not taking into
consideration the fact that the loss due to backflow occurred when the diesel oil was already completely
delivered to Caltex.

We are not persuaded.

In resolving this appeal, the Court reiterates the oft-stated doctrine that factual findings of the CA,
affirmatory of those of the trial court, are binding on the Court unless there is a clear showing that such
findings are tainted with arbitrariness, capriciousness or palpable error.[5]

Delsan would have the Court absolve it from liability for the loss of its cargo on two grounds. First, the
loss through spillage was partly due to the contributory negligence of Caltex; and Second, the loss
through backflow should not be borne by Delsan because it was already delivered to Caltexs shore tank.

Common carriers are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. They are presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated.[6] To overcome the presumption of negligence in case of loss,
destruction or deterioration of the goods, the common carrier must prove that it exercised
extraordinary diligence. There are, however, exceptions to this rule. Article 1734 of the Civil Code
enumerates the instances when the presumption of negligence does not attach:

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of
the goods, unless the same is due to any of the following causes only:

1) Flood storm, earthquake, lightning, or other natural disaster or calamity;

2) Act of the public enemy in war, whether international or civil;

3) Act or omission of the shipper or owner of the goods;
4) The character of the goods or defects in the packing or in the containers;

5) Order or act of competent public authority.


Both the trial court and the CA uniformly ruled that Delsan failed to prove its claim that there
was a contributory negligence on the part of the owner of the goods Caltex. We see no reason to
depart therefrom. As aptly pointed out by the CA, it had been established that the proximate cause of
the spillage and backflow of the diesel oil was due to the severance of the port bow mooring line of the
vessel and the failure of the shore tender to close the storage tank gate valve even as a check on the
drain cock showed that there was still a product on the pipeline. To the two courts below, the actuation
of the gauger and the escort surveyor, both personnel from the Caltex Bulk Depot, negates the
allegation that Caltex was remiss in its duties. As we see it, the crew of the vessel should have promptly
informed the shore tender that the port mooring line was cut off. However, Delsan did not do so on the
lame excuse that there was no available banca. As it is, Delsans personnel signaled a red light which
was not a sufficient warning because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of more than 2 kilometers
between the vessel and the Caltex Bulk Depot, aside from the fact that it was not the agreed signal. Had
the gauger and the escort surveyor from Caltex Bulk Depot not gone aboard the vessel to make
inquiries, the shore tender would have not known what really happened. The crew of the vessel should
have exerted utmost effort to immediately inform the shore tender that the port bow mooring line was
severed.

To be sure, Delsan, as the owner of the vessel, was obliged to prove that the loss was caused by
one of the excepted causes if it were to seek exemption from responsibility.[7] Unfortunately, it
miserably failed to discharge this burden by the required quantum of proof.


Delsans argument that it should not be held liable for the loss of diesel oil due to backflow
because the same had already been actually and legally delivered to Caltex at the time it entered the
shore tank holds no water. It had been settled that the subject cargo was still in the custody of Delsan
because the discharging thereof has not yet been finished when the backflow occurred. Since the
discharging of the cargo into the depot has not yet been completed at the time of the spillage when
the backflow occurred, there is no reason to imply that there was actual delivery of the cargo to
the consignee. Delsan is straining the issue by insisting that when the diesel oil entered into the tank of
Caltex on shore, there was legally, at that moment, a complete delivery thereof to Caltex. To be sure,
the extraordinary responsibility of common carrier lasts from the time the goods are unconditionally
placed in the possession of, and received by, the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to a person who has the right to
receive them.[8] The discharging of oil products to Caltex Bulk Depot has not yet been finished,
Delsan still has the duty to guard and to preserve the cargo. The carrier still has in it the responsibility to
guard and preserve the goods, a duty incident to its having the goods transported.

To recapitulate, common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.[9] The mere proof
of delivery of goods in good order to the carrier, and their arrival in the place of destination in bad
order, make out a prima facie case against the carrier, so that if no explanation is given as to how the
injury occurred, the carrier must be held responsible. It is incumbent upon the carrier to prove that the
loss was due to accident or some other circumstances inconsistent with its liability.[10]

All told, Delsan, being a common carrier, should have exercised extraordinary diligence in
the performance of its duties. Consequently, it is obliged to prove that the damage to its cargo
was caused by one of the excepted causes if it were to seek exemption from responsibility.[11]
Having failed to do so, Delsan must bear the consequences.

WHEREFORE, petition is DENIED and the assailed decision of the CA is AFFIRMED in toto.

Cost against petitioner.

SO ORDERED.


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

AMADO PICART, plaintiff-appellant,
vs.
FRANK SMITH, JR., defendant-appellee.

Alejo Mabanag for appellant.
G. E. Campbell for appellee.

STREET, J.:

In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith, jr., the sum of
P31,000, as damages alleged to have been caused by an automobile driven by the defendant. From a
judgment of the Court of First Instance of the Province of La Union absolving the defendant from liability
the plaintiff has appealed.

The occurrence which gave rise to the institution of this action took place on December 12, 1912, on the
Carlatan Bridge, at San Fernando, La Union. It appears that upon the occasion in question the plaintiff
was riding on his pony over said bridge. Before he had gotten half way across, the defendant
approached from the opposite direction in an automobile, going at the rate of about ten or twelve miles
per hour. As the defendant neared the bridge he saw a horseman on it and blew his horn to give
warning of his approach. He continued his course and after he had taken the bridge he gave two more
successive blasts, as it appeared to him that the man on horseback before him was not observing the
rule of the road.

The plaintiff, it appears, saw the automobile coming and heard the warning signals. However, being
perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the pony closely up
against the railing on the right side of the bridge instead of going to the left. He says that the reason he
did this was that he thought he did not have sufficient time to get over to the other side. The bridge is
shown to have a length of about 75 meters and a width of 4.80 meters. As the automobile approached,
the defendant guided it toward his left, that being the proper side of the road for the machine. In so
doing the defendant assumed that the horseman would move to the other side. The pony had not as yet
exhibited fright, and the rider had made no sign for the automobile to stop. Seeing that the pony was
apparently quiet, the defendant, instead of veering to the right while yet some distance away or slowing
down, continued to approach directly toward the horse without diminution of speed. When he had
gotten quite near, there being then no possibility of the horse getting across to the other side, the
defendant quickly turned his car sufficiently to the right to escape hitting the horse alongside of the
railing where it as then standing; but in so doing the automobile passed in such close proximity to the
animal that it became frightened and turned its body across the bridge with its head toward the railing.
In so doing, it as struck on the hock of the left hind leg by the flange of the car and the limb was broken.
The horse fell and its rider was thrown off with some violence. From the evidence adduced in the case
we believe that when the accident occurred the free space where the pony stood between the
automobile and the railing of the bridge was probably less than one and one half meters. As a result of
its injuries the horse died. The plaintiff received contusions which caused temporary unconsciousness
and required medical attention for several days.

The question presented for decision is whether or not the defendant in maneuvering his car in the
manner above described was guilty of negligence such as gives rise to a civil obligation to repair the
damage done; and we are of the opinion that he is so liable. As the defendant started across the bridge,
he had the right to assume that the horse and the rider would pass over to the proper side; but as he
moved toward the center of the bridge it was demonstrated to his eyes that this would not be done; and
he must in a moment have perceived that it was too late for the horse to cross with safety in front of the
moving vehicle. In the nature of things this change of situation occurred while the automobile was yet
some distance away; and from this moment it was not longer within the power of the plaintiff to escape
being run down by going to a place of greater safety. The control of the situation had then passed
entirely to the defendant; and it was his duty either to bring his car to an immediate stop or, seeing that
there were no other persons on the bridge, to take the other side and pass sufficiently far away from the
horse to avoid the danger of collision. Instead of doing this, the defendant ran straight on until he was
almost upon the horse. He was, we think, deceived into doing this by the fact that the horse had not yet
exhibited fright. But in view of the known nature of horses, there was an appreciable risk that, if the
animal in question was unacquainted with automobiles, he might get exited and jump under the
conditions which here confronted him. When the defendant exposed the horse and rider to this danger
he was, in our opinion, negligent in the eye of the law.

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 person would have used in the same
situation? If not, then he is guilty of negligence. The law here in effect adopts the standard supposed to
be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The existence of
negligence in a given case is not determined by reference to the personal judgment of the actor in the
situation before him. The law considers what would be reckless, blameworthy, or negligent in the man
of ordinary intelligence and prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in the
particular case. Abstract speculations cannot here be of much value but this much can be profitably said:
Reasonable men govern their conduct by the circumstances which are before them or known to them.
They are not, and are not supposed to be, omniscient of the future. Hence they can be expected to take
care only when there is something before them to suggest or warn of danger. Could a prudent man, in
the case under consideration, foresee harm as a result of the course actually pursued? If so, it was the
duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm, followed
by ignoring of the suggestion born of this prevision, is always necessary before negligence can be held to
exist. Stated in these terms, the proper criterion for determining the existence of negligence in a given
case is this: Conduct is said to be negligent when a prudent man in the position of the tortfeasor would
have foreseen that an effect harmful to another was sufficiently probable to warrant his foregoing
conduct or guarding against its consequences.

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

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

The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should perhaps be
mentioned in this connection. This Court there held that while contributory negligence on the part of
the person injured did not constitute a bar to recovery, it could be received in evidence to reduce the
damages which would otherwise have been assessed wholly against the other party. The defendant
company had there employed the plaintiff, as a laborer, to assist in transporting iron rails from a barge
in Manila harbor to the company's yards located not far away. The rails were conveyed upon cars which
were hauled along a narrow track. At certain spot near the water's edge the track gave way by reason of
the combined effect of the weight of the car and the insecurity of the road bed. The car was in
consequence upset; the rails slid off; and the plaintiff's leg was caught and broken. It appeared in
evidence that the accident was due to the effects of the typhoon which had dislodged one of the
supports of the track. The court found that the defendant company was negligent in having failed to
repair the bed of the track and also that the plaintiff was, at the moment of the accident, guilty of
contributory negligence in walking at the side of the car instead of being in front or behind. It was held
that while the defendant was liable to the plaintiff by reason of its negligence in having failed to keep
the track in proper repair nevertheless the amount of the damages should be reduced on account of the
contributory negligence in the plaintiff. As will be seen the defendant's negligence in that case consisted
in an omission only. The liability of the company arose from its responsibility for the dangerous
condition of its track. In a case like the one now before us, where the defendant was actually present
and operating the automobile which caused the damage, we do not feel constrained to attempt to
weigh the negligence of the respective parties in order to apportion the damage according to the degree
of their relative fault. It is enough to say that the negligence of the defendant was in this case the
immediate and determining cause of the accident and that the antecedent negligence of the plaintiff
was a more remote factor in the case.

A point of minor importance in the case is indicated in the special defense pleaded in the defendant's
answer, to the effect that the subject matter of the action had been previously adjudicated in the court
of a justice of the peace. In this connection it appears that soon after the accident in question occurred,
the plaintiff caused criminal proceedings to be instituted before a justice of the peace charging the
defendant with the infliction of serious injuries (lesiones graves). At the preliminary investigation the
defendant was discharged by the magistrate and the proceedings were dismissed. Conceding that the
acquittal of the defendant at the trial upon the merits in a criminal prosecution for the offense
mentioned would be res adjudicata upon the question of his civil liability arising from negligence -- a
point upon which it is unnecessary to express an opinion -- the action of the justice of the peace in
dismissing the criminal proceeding upon the preliminary hearing can have no effect. (See U. S. vs.
Banzuela and Banzuela, 31 Phil. Rep., 564.)

From what has been said it results that the judgment of the lower court must be reversed, and
judgment is her rendered that the plaintiff recover of the defendant the sum of two hundred pesos
(P200), with costs of other instances. The sum here awarded is estimated to include the value of the
horse, medical expenses of the plaintiff, the loss or damage occasioned to articles of his apparel, and
lawful interest on the whole to the date of this recovery. The other damages claimed by the plaintiff are
remote or otherwise of such character as not to be recoverable. So ordered.

Arellano, C.J., Torres, Carson, Araullo, Avancea, and Fisher, JJ., concur.
Johnson, J., reserves his vote.
G.R. No. 70493 May 18, 1989

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

Rufino Mayor and Isidro M. Ampig for petitioners.

Manuel L. Hontanosas for private respondents.



NARVASA, J.:

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

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

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

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

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

The case filed by the heirs of Engineer Calibo his widow and minor children, private respondents herein
was docketed as

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

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

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

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

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

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

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

The Court of Appeals saw things differently. It rendered judgment 9 on the plaintiffs' appeal, l0 reversing
the decision of the Trial Court. It found Zacarias to be negligent on the basis of the following
circumstances, to wit:

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

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

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

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

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

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

(3) P15,000.00 for attorney's fees;

(4) Cost of suit. 16

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SO ORDERED.

Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

G.R. No. 112160 February 28, 2000

OSMUNDO S. CANLAS and ANGELINA CANLAS, petitioner,
vs.
COURT OF APPEALS, ASIAN SAVINGS BANK, MAXIMO C. CONTRARES and VICENTE MAOSCA,
respondents.

PURISIMA, J.:

At bar is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to review and
set aside the Decision1 of the Court of Appeals in CA-G.R. CV No. 25242, which reversed the Decision2 of
Branch 59 of the Regional Trial Court of Makati City in Civil Case No. M-028; the dispositive portion of
which reads:

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE and a new one is hereby
entered DISMISSING the complaint of the spouses Osmundo and Angelina Canlas. On the counterclaim
of defendant Asian Savings Bank, the plaintiffs Canlas spouses are hereby ordered to pay the defendant
Asian Savings Bank the amount of P50,000.00 as moral and exemplary damages, plus P15,000.00 as and
for attorney's fees.

With costs against appellees.

SO ORDERED.3

The facts that matter:

Sometime in August, 1982, the petitioner, Osmundo S. Canlas, and private respondent, Vicente
Maosca, decided to venture in business and to raise the capital needed therefor. The former then
executed a Special Power of Attorney authorizing the latter to mortgage two parcels of land situated in
San Dionisio, (BF Homes) Paranaque, Metro Manila, each lot with semi-concrete residential house
existing thereon, and respectively covered by Transfer Certificate of Title No. 54366 in his (Osmundo's)
name and Transfer Certificate of Title No. S-78498 in the name of his wife Angelina Canlas.

Subsequently, Osmundo Canlas agreed to sell the said parcels of land to Vicente Maosca, for and in
consideration of P850,000.00, P500,000.00 of which payable within one week, and the balance of
P350,000.00 to serve as his (Osmundo's) investment in the business. Thus, Osmundo Canlas delivered to
Vicente Maosca the transfer certificates of title of the parcels of land involved. Vicente Maosca, as his
part of the transaction, issued two postdated checks in favor of Osmundo Canlas in the amounts of
P40,000.00 and P460,000.00, respectively, but it turned out that the check covering the bigger amount
was not sufficiently funded.4

On September 3, 1982, Vicente Maosca was able to mortgage the same parcels of land for P100,000.00
to a certain Attorney Manuel Magno, with the help of impostors who misrepresented themselves as the
spouses, Osmundo Canlas and Angelina Canlas.5

On September 29, 1982, private respondent Vicente Maosca was granted a loan by the respondent
Asian Savings Bank (ASB) in the amount of P500,000.00, with the use of subject parcels of land as
security, and with the involvement of the same impostors who again introduced themselves as the
Canlas spouses.6 When the loan it extended was not paid, respondent bank extrajudicially foreclosed
the mortgage.

On January 15, 1983, Osmundo Canlas wrote a letter informing the respondent bank that the execution
of subject mortgage over the two parcels of land in question was without their (Canlas spouses)
authority, and request that steps be taken to annul and/or revoke the questioned mortgage. On January
18, 1983, petitioner Osmundo Canlas also wrote the office of Sheriff Maximo O. Contreras, asking that
the auction sale scheduled on February 3, 1983 be cancelled or held in abeyance. But respondents
Maximo C. Contreras and Asian Savings Bank refused to heed petitioner Canlas' stance and proceeded
with the scheduled auction sale.7

Consequently, on February 3, 1983 the herein petitioners instituted the present case for annulment of
deed of real estate mortgage with prayer for the issuance of a writ of preliminary injunction; and on
May 23, 1983, the trial court issued an Order restraining the respondent sheriff from issuing the
corresponding Certificate of Sheriff's Sale.8

For failure to file his answer, despite several motions for extension of time for the filing thereof, Vicente
Maosca was declared in default.9

On June 1, 1989, the lower court a quo came out with a decision annulling subject deed of mortgage and
disposing, thus:

Premises considered, judgment is hereby rendered as follows.1wphi1.nt

1. Declaring the deed of real estate mortgage (Exhibit "L") involving the properties of the plaintiffs as
null and void;

2. Declaring the public auction sale conducted by the defendant Sheriff, involving the same properties as
illegal and without binding effect;

3. Ordering the defendants, jointly and severally, to pay the plaintiffs the sum of P20,000.00
representing attorney's fees;

4. On defendant ASB's crossclaim: ordering the cross-defendant Vicente Maosca to pay the defendant
ASB the sum of P350,000.00, representing the amount which he received as proceeds of the loan
secured by the void mortgage, plus interest at the legal rate, starting February 3, 1983, the date when
the original complaint was filed, until the amount is fully paid;

5. With costs against the defendants.

SO ORDERED.10

From such Decision below, Asian Savings Bank appealed to the Court of Appeals, which handed down
the assailed judgment of reversal, dated September 30, 1983, in CA-G.R. CV No. 25242. Dissatisfied
therewith, the petitioners found their way to this Court via the present Petition; theorizing that:

I

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT THE MORTGAGE OF THE PROPERTIES
SUBJECT OF THIS CASE WAS VALID.

II

RESPONDENT COURT OF APPEALS ERRED IN HIOLDING THAT PETITIONERS ARE NOT ENTITLED TO RELIEF
BECAUSE THEY WERE NEGLIGENT AND THEREFORE MUST BEAR THE LOSS.

III

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT ASB EXERCISED DUE
DILIGENCE IN GRANTING THE LOAN APPLICATION OF RESPONDENT.

IV

RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT ASB DID NOT ACT WITH BAD
FAITH IN PROCEEDING WITH THE FORECLOSURE SALE OF THE PROPERTIES.

V

RESPONDENT COURT OF APPEALS ERRED IN AWARDING RESPONDENT ASB MORAL DAMAGES.11

The Petition is impressed with merit.

Art. 1173 of the Civil Code, provides:

Art. 1173. The fault or negligence of the obligor consist in the omission of that diligence which is
required by the nature of the obligation and corresponds with the circumstances of the persons, of the
time and of the place. When negligence shows bad faith, the provisions of articles 1171 and 2201,
paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that
which is expected of a good father of a family shall be required. (1104)

The degree of diligence required of banks is more than that of a good father of a family;12 in keeping
with their responsibility to exercise the necessary care and prudence in dealing even on a registered or
titled property. The business of a bank is affected with public interest, holding in trust the money of the
depositors, which bank deposits the bank should guard against loss due to negligence or bad faith, by
reason of which the bank would be denied the protective mantle of the land registration law, accorded
only to purchasers or mortgagees for value and in good faith.13

In the case under consideration, from the evidence on hand it can be gleaned unerringly that
respondent bank did not observe the requisite diligence in ascertaining or verifying the real identity of
the couple who introduced themselves as the spouses Osmundo Canlas and Angelina Canlas. It is worthy
to note that not even a single identification card was exhibited by the said impostors to show their true
identity; and yet, the bank acted on their representations simply on the basis of the residence
certificates bearing signatures which tended to match the signatures affixed on a previous deed of
mortgage to a certain Atty. Magno, covering the same parcels of land in question. Felizado Mangubat,
Assistant Vice President of Asian Savings Bank, thus testified inter alia:

x x x x x x x x x

Q: According to you, the basis for your having recommended for the approval of MANASCO's (sic)
loan particularly that one involving the property of plaintiff in this case, the spouses OSMUNDO CANLAS
and ANGELINA CANLAS, the basis for such approval was that according to you all the signatures and
other things taken into account matches with that of the document previously executed by the spouses
CANLAS?

Q: That is the only basis for accepting the signature on the mortgage, the basis for the
recommendation of the approval of the loan are the financial statement of MAOSCA?

A: Yes; among others the signature and TAX Account Number, Residence Certificate appearing on
the previous loan executed by the spouses CANLAS, I am referring to EXHIBIT 5, mortgage to ATTY.
MAGNO, those were made the basis.

A: That is just the basis of accepting the signature, because at that time the loan have been
approved already on the basis of the financial statement of the client the Bank Statement. Wneh (sic) it
was approved we have to base it on the Financial statement of the client, the signatures were accepted
only for the purpose of signing the mortgage not for the approval, we don't (sic) approve loans on the
signature.

ATTY. CLAROS:

Would you agree that as part of ascertaining the identify of the parties particularly the mortgage, you
don't consider also the signature, the Residence Certificate, the particular address of the parties
involved.

A: I think the question defers (sic) from what you asked a while ago.

Q: Among others?

A: We have to accept the signature on the basis of the other signatures given to us it being a public
instrument.

ATTY. CARLOS:

You mean to say the criteria of ascertaining the identity of the mortgagor does not depend so much on
the signature on the residence certificate they have presented.

A: We have to accept that.

x x x x x x x x x

A: We accepted the signature on the basis of the mortgage in favor of ATTY. MAGNO duly
notarized which I have been reiterrting (sic) entitled to full faith considering that it is a public
instrument.

ATTY. CARLOS:

What other requirement did you take into account in ascertaining the identification of the parties
particularly the mortgagor in this case.

A: Residence Certificate.

Q: Is that all, is that the only requirement?

A: We requested for others but they could not produce, and because they presented to us the
Residence Certificate which matches on the signature on the Residence Certificate in favor of Atty.
Magno.14

Evidently, the efforts exerted by the bank to verify the identity of the couple posing as Osmundo Canlas
and Angelina Canlas fell short of the responsibility of the bank to observe more than the diligence of a
good father of a family. The negligence of respondent bank was magnified by the fact that the previous
deed of mortgage (which was used as the basis for checking the genuineness of the signatures of the
supposed Canlas spouses) did not bear the tax account number of the spouses,15 as well as the
Community Tax Certificate of Angelina Canlas.16 But such fact notwithstanding, the bank did not require
the impostors to submit additional proof of their true identity.

Under the doctrine of last clear chance, which is applicable here, the respondent bank must suffer the
resulting loss. In essence, the doctrine of last clear chance is to the effect that where both parties are
negligent but the negligent act of one is appreciably later in point of time than that of the other, or
where it is impossible to determine whose fault or negligence brought about the occurrence of the
incident, the one who had the last clear opportunity to avoid the impending harm but failed to do so, is
chargeable with the consequences arising therefrom. Stated differently, the rule is that the antecedent
negligence of a person does not preclude recovery of damages caused by the supervening negligence of
the latter, who had the last fair chance to prevent the impending harm by the exercise of due
diligence.17

Assuming that Osmundo Canlas was negligent in giving Vicente Maosca the opportunity to perpetrate
the fraud, by entrusting to latter the owner's copy of the transfer certificates of title of subject parcels of
land, it cannot be denied that the bank had the last clear chance to prevent the fraud, by the simple
expedient of faithfully complying with the requirements for banks to ascertain the identity of the
persons transacting with them.

For not observing the degree of diligence required of banking institutions, whose business is impressed
with public interest, respondent Asian Savings Bank has to bear the loss sued upon.

In ruling for respondent bank, the Court of Appeals concluded that the petitioner Osmundo Canlas was a
party to the fraudulent scheme of Maosca and therefore, estopped from impugning the validity of
subject deed of mortgage; ratiocinating thus:

x x x x x x x x x

Thus, armed with the titles and the special power of attorney, Maosca went to the defendant bank and
applied for a loan. And when Maosca came over to the bank to submit additional documents pertinent
to his loan application, Osmundo Canlas was with him, together with a certain Rogelio Viray. At that
time, Osmundo Canlas was introduced to the bank personnel as "Leonardo Rey".

When he was introduced as "Leonardo Rey" for the first time Osmundo should have corrected Maosca
right away. But he did not. Instead, he even allowed Maosca to avail of his (Osmundo's) membership
privileges at the Metropolitan Club when Maosca invited two officers of the defendant bank to a
luncheon meeting which Osmundo also attended. And during that meeting, Osmundo did not say who
he really is, but even let Maosca introduced him again as "Leonardo Rey", which all the more indicates
that he connived with Maosca in deceiving the defendant bank.

Finally after the loan was finally approved, Osmundo accompanied Maosca to the bank when the loan
was released. At that time, a manger's check for P200,000.00 was issued in the name of Oscar
Motorworks, which Osmundo admits he owns and operates.

Collectively, the foregoing circumstances cannot but conjure to a single conclusion that Osmundo active
participated in the loan application of defendant Asian Savings Bank, which culminated in his receiving a
portion of the process thereof:18

A meticulous and painstaking scrutiny of the Records on hand, reveals, however, that the findings
arrived at by the Court of Appeals are barren of any sustainable basis. For instance, the execution of the
deeds of mortgages constituted by Maosca on subject pieces of property of petitioners were made
possible not by the Special Power of Attorney executed by Osmundo Canlas in favor of Maosca but
through the use of impostors who misrepresented themselves as the spouses Angelina Canlas and
Osmundo Canlas. It cannot be said therefore, that the petitioners authorized Vicente Maosca to
constitute the mortgage on their parcels of land.

What is more, Osmundo Canlas was introduced as "Leonardo Rey" by Vicente Maosca, only on the
occasion of the luncheon meeting at the Metropolitan Club.19 Thereat, the failure of Osmundo Canlas
to rectify Maosca's misrepresentations could not be taken as a fraudulent act. As well explained by the
former, he just did not want to embarrass Maosca, so that he waited for the end of the meeting to
correct Maosca.20

Then, too, Osmundo Canlas recounted that during the said luncheon meeting, they did not talk about
the security or collateral for the loan of Maosca with ASB.21 So also, Mrs. Josefina Rojo, who was the
Account Officer of Asian Savings Bank when Maosca applied for subject loan, corroborated the
testimony of Osmundo Canlas, she testified:

x x x x x x x x x

QUESTION: Now could you please describe out the lunch conference at the Metro Club in Makati?

ANSWER: Mr. Mangubat, Mr. Maosca and I did not discuss with respect to the loan application
and discuss primarily his business.

x x x x x x x x x

QUESTION: So, what is the main topic of your discussion during the meeting?

ANSWER: The main topic war then, about his business although, Mr. Leonardo Rey, who actually
turned out as Mr. Canlas, supplier of Mr. Maosca.

QUESTION: I see . . . other than the business of Mr. Maosca, were there any other topic
discussed?

ANSWER: YES.

QUESTION: And what was the topic:

ANSWER: General Economy then.

x x x x x x x x x22

Verily, Osmundo Canlas was left unaware of the illicit plan of Maosca, explaining thus why he
(Osmundo) did not bother to correct what Maosca misrepresented and to assert ownership over the
two parcels of land in question.

Not only that; while it is true that Osmundo Canlas was with Vicente Maosca when the latter submitted
the documents needed for his loan application, and when the check of P200,000.00 was released, the
former did not know that the collateral used by Maosca for the said loan were their (Canlas spouses')
properties. Osmundo happened to be with Maosca at the time because he wanted to make sure that
Maosca would make good his promise to pay the balance of the purchase price of the said lots out of
the proceeds of the loan.23

The receipt by Osmundo Canlas of the P200,000.00 check from ASB could not estop him from assailing
the validity of the mortgage because the said amount was in payment of the parcels of land he sold to
Maosca.24

What is decisively clear on record is that Maosca managed to keep Osmundo Canlas uninformed of his
(Maosca's) intention to use the parcels of land of the Canlas spouses as security for the loan obtained
from Asian Savings Bank. Since Vicente Maosca showed Osmundo Canlas several certificates of title of
lots which, according to Maosca were the collaterals, Osmundo Canlas was confident that their
(Canlases') parcels of land were not involved in the loan transactions with the Asian Savings Bank.25
Under the attendant facts and circumstances, Osmundo Canlas was undoubtedly negligent, which
negligence made them (petitioners) undeserving of an award of attorney's fees.

Settled is the rule that a contract of mortgage must be constituted only by the absolute owner on the
property mortgaged;26 a mortgage, constituted by an impostor is void.27 Considering that it was
established indubitably that the contract of mortgage sued upon was entered into and signed by
impostors who misrepresented themselves as the spouses Osmundo Canlas and Angelina Canlas, the
Court is of the ineluctible conclusion and finding that subject contract of mortgage is a complete nullity.

WHEREFORE, the Petition is GRANTED and the Decision of the Court of Appeals, dated September 30,
1993, in CA-G.R. CV No. 25242 SET ASIDE. The Decision of Branch 59 of the Regional Trial Court of
Makati City in Civil Case No. M-028 is hereby REINSTATED. No pronouncement as to costs.

SO ORDERED.1wphi1.nt

Melo, Vitug and Gonzaga-Reyes, JJ., concur.
LAPANDAY AGRICULTURAL and G.R. No. 153076
DEVELOPMENT CORPORATION
(LADECO), HENRY BERENGUEL, Present:
and APOLONIO R. DEOCAMPO,
Petitioners, QUISUMBING,* J.,
Chairperson,
CARPIO,**
CARPIO MORALES,
- versus - TINGA, and
VELASCO, JR., JJ.



MICHAEL RAYMOND ANGALA, Promulgation
Respondent. June 21, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x


D E C I S I O N


CARPIO, J.:


The Case

Before the Court is a petition for review[1] assailing the 25 July 2001 Decision[2] and 11 March
2002 Resolution[3] of the Court of Appeals in CA-G.R. CV No. 51134.

The Antecedent Facts

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

Respondent filed an action for Quasi-Delict, Damages, and Attorneys Fees against LADECO, its
administrative officer Henry Berenguel[4] (Berenguel) and Deocampo. Respondent alleged that his
pick-up was slowing down to about five to ten kilometers per hour (kph) and was making a left turn
preparatory to turning south when it was bumped from behind by the crewcab which was running at
around 60 to 70 kph. The crewcab stopped 21 meters from the point of impact. Respondent alleged
that he heard a screeching sound before the impact. Respondent was seated beside the driver and was
looking at the speedometer when the accident took place. Respondent testified that Borres made a
signal because he noticed a blinking light while looking at the speedometer.[5]

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

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


The Ruling of the Trial Court

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

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

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

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

3. Ten thousand (P10,000.00) pesos as attorneys fees.

4. Costs of suit.

SO ORDERED.[8]


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

The trial court found that Berenguel was not liable because he was not the owner of the crewcab.

LADECO and Deocampo (petitioners)[9] filed a motion for reconsideration. The trial court denied
petitioners motion in its 13 June 1995 Order.[10]

Petitioners filed an appeal before the Court of Appeals.


The Ruling of the Court of Appeals

The Court of Appeals affirmed in toto the trial courts decision.

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

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

The dispositive portion of the Court of Appeals Decision reads:

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

SO ORDERED.[11]


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

Hence, the petition before this Court.


The Issues

The issues before the Court are the following:

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

2. Whether respondent is entitled to the damages awarded.



The Ruling of this Court

The petition is partly meritorious.





Both Drivers are Negligent

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

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

Section 45(b) of RA 4136 states:

Sec. 45. Turning at intersections. x x x

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


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

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

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

Doctrine of Last Clear Chance Applies

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

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


Petitioners are Solidarily Liable

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

Hence, we hold LADECO solidarily liable with Deocampo.


Respondent is Entitled to Moral Damages

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

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

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

SO ORDERED.
G.R. No. 160889 April 27, 2007

DR. MILAGROS L. CANTRE, Petitioner,
vs.
SPS. JOHN DAVID Z. GO and NORA S. GO, Respondents.

D E C I S I O N

QUISUMBING, J.:

For review on certiorari are the Decision1 dated October 3, 2002 and Resolution2 dated November 19,
2003 of the Court of Appeals in CA-G.R. CV No. 58184, which affirmed with modification the Decision3
dated March 3, 1997 of the Regional Trial Court of Quezon City, Branch 98, in Civil Case No. Q-93-16562.

The facts, culled from the records, are as follows:

Petitioner Dr. Milagros L. Cantre is a specialist in Obstetrics and Gynecology at the Dr. Jesus Delgado
Memorial Hospital. She was the attending physician of respondent Nora S. Go, who was admitted at the
said hospital on April 19, 1992.

At 1:30 a.m. of April 20, 1992, Nora gave birth to her fourth child, a baby boy. However, at around 3:30
a.m., Nora suffered profuse bleeding inside her womb due to some parts of the placenta which were not
completely expelled from her womb after delivery. Consequently, Nora suffered hypovolemic shock,
resulting in a drop in her blood pressure to "40" over "0." Petitioner and the assisting resident physician
performed various medical procedures to stop the bleeding and to restore Noras blood pressure. Her
blood pressure was frequently monitored with the use of a sphygmomanometer. While petitioner was
massaging Noras uterus for it to contract and stop bleeding, she ordered a droplight to warm Nora and
her baby.4 Nora remained unconscious until she recovered.

While in the recovery room, her husband, respondent John David Z. Go noticed a fresh gaping wound
two and a half (2 ) by three and a half (3 ) inches in the inner portion of her left arm, close to the
armpit.5 He asked the nurses what caused the injury. He was informed it was a burn. Forthwith, on April
22, 1992, John David filed a request for investigation.6 In response, Dr. Rainerio S. Abad, the medical
director of the hospital, called petitioner and the assisting resident physician to explain what happened.
Petitioner said the blood pressure cuff caused the injury.

On May 7, 1992, John David brought Nora to the National Bureau of Investigation for a physical
examination, which was conducted by medico-legal officer Dr. Floresto Arizala, Jr.7 The medico-legal
officer later testified that Noras injury appeared to be a burn and that a droplight when placed near the
skin for about 10 minutes could cause such burn.8 He dismissed the likelihood that the wound was
caused by a blood pressure cuff as the scar was not around the arm, but just on one side of the arm.9

On May 22, 1992, Noras injury was referred to a plastic surgeon at the Dr. Jesus Delgado Memorial
Hospital for skin grafting.10 Her wound was covered with skin sourced from her abdomen, which
consequently bore a scar as well. About a year after, on April 30, 1993, scar revision had to be
performed at the same hospital.11 The surgical operation left a healed linear scar in Noras left arm
about three inches in length, the thickest portion rising about one-fourth (1/4) of an inch from the
surface of the skin. The costs of the skin grafting and the scar revision were shouldered by the
hospital.12

Unfortunately, Noras arm would never be the same.1a\^/phi1.net Aside from the unsightly mark, the
pain in her left arm remains. When sleeping, she has to cradle her wounded arm. Her movements now
are also restricted. Her children cannot play with the left side of her body as they might accidentally
bump the injured arm, which aches at the slightest touch.

Thus, on June 21, 1993, respondent spouses filed a complaint13 for damages against petitioner, Dr.
Abad, and the hospital. Finding in favor of respondent spouses, the trial court decreed:

In view of the foregoing consideration, judgment is hereby rendered in favor of the plaintiffs and against
the defendants, directing the latters, (sic) jointly and severally

(a) to pay the sum of Five Hundred Thousand Pesos (P500,000.00) in moral damages;

(b) to pay the sum of One Hundred Fifty Thousand Pesos (P150,000.00) exemplary damages;

(c) to pay the sum of Eighty Thousand Pesos (P80,000.00) nominal damages;

(d) to pay Fifty Thousand Pesos (P50,000.00) for and as attorneys fees; and

(e) to pay Six Thousand Pesos (P6,000.00) litigation expenses.

SO ORDERED.14

Petitioner, Dr. Abad, and the hospital all appealed to the Court of Appeals, which affirmed with
modification the trial court decision, thus:

WHEREFORE, in view of all the foregoing, and finding no reversible error in the appealed Decision dated
March 3, 1997 of Branch 98 of the Regional Trial Court of Quezon City in Civil Case No. Q-93-16562, the
same is hereby AFFIRMED, with the following MODIFICATIONS:

1. Ordering defendant-appellant Dra. Milagros [L.] Cantre only to pay plaintiffs-appellees John David Go
and Nora S. Go the sum of P200,000.00 as moral damages;

2. Deleting the award *of+ exemplary damages, attorneys fees and expenses of litigation;1awphi1.nt

3. Dismissing the complaint with respect to defendants-appellants Dr. Rainerio S. Abad and Delgado
Clinic, Inc.;

4. Dismissing the counterclaims of defendants-appellants for lack of merit; and

5. Ordering defendant-appellant Dra. Milagros [L.] Cantre only to pay the costs.

SO ORDERED.15

Petitioners motion for reconsideration was denied by the Court of Appeals. Hence, the instant petition
assigning the following as errors and issues:

I.

WHETHER OR NOT, THE LOWER COURT, AND THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
THEIR DISCRETION WHEN, NOTWITHSTANDING THAT BOTH PARTIES HAVE RESTED THEIR RESPECTIVE
CASES, THE LOWER COURT ADMITTED THE ADDITIONAL EXHIBITS FURTHER OFFERED BY RESPONDENTS
NOT TESTIFIED TO BY ANY WITNESS AND THIS DECISION OF THE LOWER COURT WAS UPHELD BY THE
COURT OF APPEALS LIKEWISE COMMITTING GRAVE ABUSE OF DISCRETION;

II.

WHETHER OR NOT THE LOWER COURT COMMITTED GRAVE ABUSE OF ITS DISCRETION WHEN,
CONTRARY TO PREPONDERANCE OF EVIDENCE PRESENTED BY THE PETITIONER, IT RULED THAT THE
PETITIONER HAS NOT AMPLY SHOWED THAT THE DROPLIGHT DID NOT TOUCH THE BODY OF MRS.
NORA GO, AND THIS DECISION OF THE LOWER COURT WAS UPHELD BY THE COURT OF APPEALS
LIKEWISE COMMITTING GRAVE ABUSE OF DISCRETION;

III.

WHETHER OR NOT THE LOWER COURT COMMITTED GRAVE ABUSE OF ITS DISCRETION WHEN,
CONTRARY TO PREPONDERANCE OF EVIDENCE PRESENTED BY THE PETITIONER, IT RULED THAT
PETITIONER DRA. CANTRE WAS NOT ABLE TO AMPLY EXPLAIN HOW THE INJURY (BLISTERS) IN THE LEFT
INNER ARM OF RESPONDENT MRS. GO CAME ABOUT;

IV.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF ITS DISCRETION WHEN IT
MADE A RULING ON THE RESPONDENTS INJURY QUOTING THE TESTIMONY OF SOMEONE WHO WAS
NOT PRESENT AND HAS NOT SEEN THE ORIGINAL, FRESH INJURY OF RESPONDENT MRS. NORA GO;

V.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSING ITS DISCRETION RULED THAT PETITIONER
DRA. CANTRE SHOULD HAVE INTENDED TO INFLICT THE INJURY TO SAVE THE LIFE OF RESPONDENT MRS.
GO;

VI.

WHETHER OR NOT THE LOWER COURT AND THE COURT [OF] APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN, CONTRARY TO THE DETAILED PROCEDURES DONE BY PETITIONER, BOTH RULED
THAT THE RESPONDENT WAS LEFT TO THE CARE OF THE NURSING STAFF;

VII.

WHETHER OR NOT THE LOWER COURT COMMITTED GRAVE ABUSE OF DISCRETION WHEN, CONTRARY
TO THE MEDICAL PURPOSES OF COSMETIC SURGERY, IT RULED THAT THE COSMETIC SURGERY MADE
THE SCARS EVEN MORE UGLY AND DECLARED THE COSMETIC SURGERY A FAILURE;

VIII.

WHETHER OR NOT THE LOWER COURT GRAVELY ABUSE OF (SIC) DISCRETION WHEN, CONTRARY TO
RESPONDENTS CONTRARY TESTIMONIES AND THE ABSENCE OF ANY TESTIMONY, IT RULED THAT THEY
ARE ENTITLED TO DAMAGES AND WHICH WAS UPHELD, ALTHOUGH MODIFIED, BY THE COURT OF
APPEALS LIKEWISE ABUSING ITS DISCRETION.16

Petitioner contends that additional documentary exhibits not testified to by any witness are
inadmissible in evidence because they deprived her of her constitutional right to confront the witnesses
against her. Petitioner insists the droplight could not have touched Noras body. She maintains the injury
was due to the constant taking of Noras blood pressure. Petitioner also insinuates the Court of Appeals
was misled by the testimony of the medico-legal officer who never saw the original injury before plastic
surgery was performed. Finally, petitioner stresses that plastic surgery was not intended to restore
respondents injury to its original state but rather to prevent further complication.

Respondents, however, counter that the genuineness and due execution of the additional documentary
exhibits were duly admitted by petitioners counsel. Respondents point out that petitioners blood
pressure cuff theory is highly improbable, being unprecedented in medical history and that the injury
was definitely caused by the droplight. At any rate, they argue, even if the injury was brought about by
the blood pressure cuff, petitioner was still negligent in her duties as Noras attending physician.

Simply put, the threshold issues for resolution are: (1) Are the questioned additional exhibits admissible
in evidence? (2) Is petitioner liable for the injury suffered by respondent Nora Go? Thereafter, the
inquiry is whether the appellate court committed grave abuse of discretion in its assailed issuances.

As to the first issue, we agree with the Court of Appeals that said exhibits are admissible in evidence. We
note that the questioned exhibits consist mostly of Noras medical records, which were produced by the
hospital during trial pursuant to a subpoena duces tecum. Petitioners counsel admitted the existence of
the same when they were formally offered for admission by the trial court. In any case, given the
particular circumstances of this case, a ruling on the negligence of petitioner may be made based on the
res ipsa loquitur doctrine even in the absence of such additional exhibits.

Petitioners contention that the medico-legal officer who conducted Noras physical examination never
saw her original injury before plastic surgery was performed is without basis and contradicted by the
records. Records show that the medico-legal officer conducted the physical examination on May 7,
1992, while the skin grafting and the scar revision were performed on Nora on May 22, 1992 and April
30, 1993, respectively.

Coming now to the substantive matter, is petitioner liable for the injury suffered by respondent Nora
Go?

The Hippocratic Oath mandates physicians to give primordial consideration to the well-being of their
patients. If a doctor fails to live up to this precept, he is accountable for his acts. This notwithstanding,
courts face a unique restraint in adjudicating medical negligence cases because physicians are not
guarantors of care and, they never set out to intentionally cause injury to their patients. However, intent
is immaterial in negligence cases because where negligence exists and is proven, it automatically gives
the injured a right to reparation for the damage caused.17

In cases involving medical negligence, the doctrine of res ipsa loquitur allows the mere existence of an
injury to justify a presumption of negligence on the part of the person who controls the instrument
causing the injury, provided that the following requisites concur:

1. The accident is of a kind which ordinarily does not occur in the absence of someones negligence;

2. It is caused by an instrumentality within the exclusive control of the defendant or defendants; and

3. The possibility of contributing conduct which would make the plaintiff responsible is eliminated.18

As to the first requirement, the gaping wound on Noras arm is certainly not an ordinary occurrence in
the act of delivering a baby, far removed as the arm is from the organs involved in the process of giving
birth. Such injury could not have happened unless negligence had set in somewhere.

Second, whether the injury was caused by the droplight or by the blood pressure cuff is of no moment.
Both instruments are deemed within the exclusive control of the physician in charge under the "captain
of the ship" doctrine. This doctrine holds the surgeon in charge of an operation liable for the negligence
of his assistants during the time when those assistants are under the surgeons control.19 In this
particular case, it can be logically inferred that petitioner, the senior consultant in charge during the
delivery of Noras baby, exercised control over the assistants assigned to both the use of the droplight
and the taking of Noras blood pressure. Hence, the use of the droplight and the blood pressure cuff is
also within petitioners exclusive control.

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

Petitioners defense that Noras wound was caused not by the droplight but by the constant taking of
her blood pressure, even if the latter was necessary given her condition, does not absolve her from
liability. As testified to by the medico-legal officer, Dr. Arizala, Jr., the medical practice is to deflate the
blood pressure cuff immediately after each use. Otherwise, the inflated band can cause injury to the
patient similar to what could have happened in this case. Thus, if Noras wound was caused by the blood
pressure cuff, then the taking of Noras blood pressure must have been done so negligently as to have
inflicted a gaping wound on her arm,20 for which petitioner cannot escape liability under the "captain of
the ship" doctrine.

Further, petitioners argument that the failed plastic surgery was not intended as a cosmetic procedure,
but rather as a measure to prevent complication does not help her case. It does not negate negligence
on her part.

Based on the foregoing, the presumption that petitioner was negligent in the exercise of her profession
stands unrebutted. In this connection, the Civil Code provides:

ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done.

ART. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the proximate result
of the defendants wrongful act or omission.

Clearly, under the law, petitioner is obliged to pay Nora for moral damages suffered by the latter as a
proximate result of petitioners negligence.

We note, however, that petitioner has served well as Noras obstetrician for her past three successful
deliveries. This is the first time petitioner is being held liable for damages due to negligence in the
practice of her profession. The fact that petitioner promptly took care of Noras wound before infection
and other complications set in is also indicative of petitioners good intentions. We also take note of the
fact that Nora was suffering from a critical condition when the injury happened, such that saving her life
became petitioners elemental concern. Nonetheless, it should be stressed that all these could not
justify negligence on the part of petitioner.

Hence, considering the specific circumstances in the instant case, we find no grave abuse of discretion in
the assailed decision and resolution of the Court of Appeals. Further, we rule that the Court of Appeals
award of Two Hundred Thousand Pesos (P200,000) as moral damages in favor of respondents and
against petitioner is just and equitable.21

WHEREFORE, the petition is DENIED. The Decision dated October 3, 2002 and Resolution dated
November 19, 2003 of the Court of Appeals in CA-G.R. CV No. 58184 are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 126297 January 31, 2007

PROFESSIONAL SERVICES, INC., Petitioner,
vs.
NATIVIDAD and ENRIQUE AGANA, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 126467 January 31, 2007

NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR., EMMA AGANA
ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE AGANA, Petitioners,
vs.
JUAN FUENTES, Respondent.

x- - - - - - - - - - - - - - - - - - - -- - - - x

G.R. No. 127590 January 31, 2007

MIGUEL AMPIL, Petitioner,
vs.
NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

Hospitals, having undertaken one of mankinds most important and delicate endeavors, must assume
the grave responsibility of pursuing it with appropriate care. The care and service dispensed through this
high trust, however technical, complex and esoteric its character may be, must meet standards of
responsibility commensurate with the undertaking to preserve and protect the health, and indeed, the
very lives of those placed in the hospitals keeping.1

Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals Decision2
dated September 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198 affirming with modification
the Decision3 dated March 17, 1993 of the Regional Trial Court (RTC), Branch 96, Quezon City in Civil
Case No. Q-43322 and nullifying its Order dated September 21, 1993.

The facts, as culled from the records, are:

On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital (Medical City
Hospital) because of difficulty of bowel movement and bloody anal discharge. After a series of medical
examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590, diagnosed her to be suffering from
"cancer of the sigmoid."

On April 11, 1984, Dr. Ampil, assisted by the medical staff4 of the Medical City Hospital, performed an
anterior resection surgery on Natividad. He found that the malignancy in her sigmoid area had spread
on her left ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained the
consent of Natividads husband, Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No.
126467, to perform hysterectomy on her.

After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the operation and
closed the incision.

However, the operation appeared to be flawed. In the corresponding Record of Operation dated April
11, 1984, the attending nurses entered these remarks:

"sponge count lacking 2

"announced to surgeon searched (sic) done but to no avail continue for closure."

On April 24, 1984, Natividad was released from the hospital. Her hospital and medical bills, including the
doctors fees, amounted to P60,000.00.

After a couple of days, Natividad complained of excruciating pain in her anal region. She consulted both
Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural consequence of the
surgery. Dr. Ampil then recommended that she consult an oncologist to examine the cancerous nodes
which were not removed during the operation.

On May 9, 1984, Natividad, accompanied by her husband, went to the United States to seek further
treatment. After four months of consultations and laboratory examinations, Natividad was told she was
free of cancer. Hence, she was advised to return to the Philippines.

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

Dr. Ampils assurance did not come true. Instead, the pains intensified, prompting Natividad to seek
treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez detected the
presence of another foreign object in her vagina -- a foul-smelling gauze measuring 1.5 inches in width
which badly infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive organs
which forced stool to excrete through the vagina. Another surgical operation was needed to remedy the
damage. Thus, in October 1984, Natividad underwent another surgery.

On November 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon City a
complaint for damages against the Professional Services, Inc. (PSI), owner of the Medical City Hospital,
Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They alleged that the latter are liable for
negligence for leaving two pieces of gauze inside Natividads body and malpractice for concealing their
acts of negligence.

Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr. Fuentes,
docketed as Administrative Case No. 1690. The PRC Board of Medicine heard the case only with respect
to Dr. Fuentes because it failed to acquire jurisdiction over Dr. Ampil who was then in the United States.

On February 16, 1986, pending the outcome of the above cases, Natividad died and was duly substituted
by her above-named children (the Aganas).

On March 17, 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr. Ampil and Dr.
Fuentes liable for negligence and malpractice, the decretal part of which reads:

WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants PROFESSIONAL
SERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN FUENTES to pay to the plaintiffs, jointly and severally,
except in respect of the award for exemplary damages and the interest thereon which are the liabilities
of defendants Dr. Ampil and Dr. Fuentes only, as follows:

1. As actual damages, the following amounts:

a. The equivalent in Philippine Currency of the total of US$19,900.00 at the rate of P21.60-US$1.00, as
reimbursement of actual expenses incurred in the United States of America;

b. The sum of P4,800.00 as travel taxes of plaintiffs and their physician daughter;

c. The total sum of P45,802.50, representing the cost of hospitalization at Polymedic Hospital, medical
fees, and cost of the saline solution;

2. As moral damages, the sum of P2,000,000.00;

3. As exemplary damages, the sum of P300,000.00;

4. As attorneys fees, the sum of P250,000.00;

5. Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from date of filing of the complaint
until full payment; and

6. Costs of suit.

SO ORDERED.

Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals, docketed as CA-
G.R. CV No. 42062.

Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partial execution of its
Decision, which was granted in an Order dated May 11, 1993. Thereafter, the sheriff levied upon certain
properties of Dr. Ampil and sold them for P451,275.00 and delivered the amount to the Aganas.

Following their receipt of the money, the Aganas entered into an agreement with PSI and Dr. Fuentes to
indefinitely suspend any further execution of the RTC Decision. However, not long thereafter, the
Aganas again filed a motion for an alias writ of execution against the properties of PSI and Dr. Fuentes.
On September 21, 1993, the RTC granted the motion and issued the corresponding writ, prompting Dr.
Fuentes to file with the Court of Appeals a petition for certiorari and prohibition, with prayer for
preliminary injunction, docketed as CA-G.R. SP No. 32198. During its pendency, the Court of Appeals
issued a Resolution5 dated October 29, 1993 granting Dr. Fuentes prayer for injunctive relief.

On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-G.R. CV No. 42062.

Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered its Decision6 in Administrative
Case No. 1690 dismissing the case against Dr. Fuentes. The Board held that the prosecution failed to
show that Dr. Fuentes was the one who left the two pieces of gauze inside Natividads body; and that he
concealed such fact from Natividad.

On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-G.R. CV No.
42062 and CA-G.R. SP No. 32198, thus:

WHEREFORE, except for the modification that the case against defendant-appellant Dr. Juan Fuentes is
hereby DISMISSED, and with the pronouncement that defendant-appellant Dr. Miguel Ampil is liable to
reimburse defendant-appellant Professional Services, Inc., whatever amount the latter will pay or had
paid to the plaintiffs-appellees, the decision appealed from is hereby AFFIRMED and the instant appeal
DISMISSED.

Concomitant with the above, the petition for certiorari and prohibition filed by herein defendant-
appellant Dr. Juan Fuentes in CA-G.R. SP No. 32198 is hereby GRANTED and the challenged order of the
respondent judge dated September 21, 1993, as well as the alias writ of execution issued pursuant
thereto are hereby NULLIFIED and SET ASIDE. The bond posted by the petitioner in connection with the
writ of preliminary injunction issued by this Court on November 29, 1993 is hereby cancelled.

Costs against defendants-appellants Dr. Miguel Ampil and Professional Services, Inc.

SO ORDERED.

Only Dr. Ampil filed a motion for reconsideration, but it was denied in a Resolution7 dated December
19, 1996.

Hence, the instant consolidated petitions.

In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals erred in holding that: (1) it is
estopped from raising the defense that Dr. Ampil is not its employee; (2) it is solidarily liable with Dr.
Ampil; and (3) it is not entitled to its counterclaim against the Aganas. PSI contends that Dr. Ampil is not
its employee, but a mere consultant or independent contractor. As such, he alone should answer for his
negligence.

In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred in finding that Dr. Fuentes is
not guilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They contend
that the pieces of gauze are prima facie proofs that the operating surgeons have been negligent.

Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred in finding him liable for
negligence and malpractice sans evidence that he left the two pieces of gauze in Natividads vagina. He
pointed to other probable causes, such as: (1) it was Dr. Fuentes who used gauzes in performing the
hysterectomy; (2) the attending nurses failure to properly count the gauzes used during surgery; and (3)
the medical intervention of the American doctors who examined Natividad in the United States of
America.

For our resolution are these three vital issues: first, whether the Court of Appeals erred in holding Dr.
Ampil liable for negligence and malpractice; second, whether the Court of Appeals erred in absolving Dr.
Fuentes of any liability; and third, whether PSI may be held solidarily liable for the negligence of Dr.
Ampil.

I - G.R. No. 127590

Whether the Court of Appeals Erred in Holding Dr. Ampil

Liable for Negligence and Malpractice.

Dr. Ampil, in an attempt to absolve himself, gears the Courts attention to other possible causes of
Natividads detriment. He argues that the Court should not discount either of the following possibilities:
first, Dr. Fuentes left the gauzes in Natividads body after performing hysterectomy; second, the
attending nurses erred in counting the gauzes; and third, the American doctors were the ones who
placed the gauzes in Natividads body.

Dr. Ampils arguments are purely conjectural and without basis. Records show that he did not present
any evidence to prove that the American doctors were the ones who put or left the gauzes in Natividads
body. Neither did he submit evidence to rebut the correctness of the record of operation, particularly
the number of gauzes used. As to the alleged negligence of Dr. Fuentes, we are mindful that Dr. Ampil
examined his (Dr. Fuentes) work and found it in order.

The glaring truth is that all the major circumstances, taken together, as specified by the Court of
Appeals, directly point to Dr. Ampil as the negligent party, thus:

First, it is not disputed that the surgeons used gauzes as sponges to control the bleeding of the patient
during the surgical operation.

Second, immediately after the operation, the nurses who assisted in the surgery noted in their report
that the sponge count (was) lacking 2; that such anomaly was announced to surgeon and that a
search was done but to no avail prompting Dr. Ampil to continue for closure x x x.

Third, after the operation, two (2) gauzes were extracted from the same spot of the body of Mrs. Agana
where the surgery was performed.

An operation requiring the placing of sponges in the incision is not complete until the sponges are
properly removed, and it is settled that the leaving of sponges or other foreign substances in the wound
after the incision has been closed is at least prima facie negligence by the operating surgeon.8 To put it
simply, such act is considered so inconsistent with due care as to raise an inference of negligence. There
are even legions of authorities to the effect that such act is negligence per se.9

Of course, the Court is not blind to the reality that there are times when danger to a patients life
precludes a surgeon from further searching missing sponges or foreign objects left in the body. But this
does not leave him free from any obligation. Even if it has been shown that a surgeon was required by
the urgent necessities of the case to leave a sponge in his patients abdomen, because of the dangers
attendant upon delay, still, it is his legal duty to so inform his patient within a reasonable time thereafter
by advising her of what he had been compelled to do. This is in order that she might seek relief from the
effects of the foreign object left in her body as her condition might permit. The ruling in Smith v.
Zeagler10 is explicit, thus:

The removal of all sponges used is part of a surgical operation, and when a physician or surgeon fails to
remove a sponge he has placed in his patients body that should be removed as part of the operation, he
thereby leaves his operation uncompleted and creates a new condition which imposes upon him the
legal duty of calling the new condition to his patients attention, and endeavoring with the means he has
at hand to minimize and avoid untoward results likely to ensue therefrom.

Here, Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he even misled
her that the pain she was experiencing was the ordinary consequence of her operation. Had he been
more candid, Natividad could have taken the immediate and appropriate medical remedy to remove the
gauzes from her body. To our mind, what was initially an act of negligence by Dr. Ampil has ripened into
a deliberate wrongful act of deceiving his patient.

This is a clear case of medical malpractice or more appropriately, medical negligence. To successfully
pursue this kind of case, a patient must only prove that a health care provider either failed to do
something which a reasonably prudent health care provider would have done, or that he did something
that a reasonably prudent provider would not have done; and that failure or action caused injury to the
patient.11 Simply put, the elements are duty, breach, injury and proximate causation. Dr, Ampil, as the
lead surgeon, had the duty to remove all foreign objects, such as gauzes, from Natividads body before
closure of the incision. When he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil
breached both duties. Such breach caused injury to Natividad, necessitating her further examination by
American doctors and another surgery. That Dr. Ampils negligence is the proximate cause12 of
Natividads injury could be traced from his act of closing the incision despite the information given by
the attending nurses that two pieces of gauze were still missing. That they were later on extracted from
Natividads vagina established the causal link between Dr. Ampils negligence and the injury. And what
further aggravated such injury was his deliberate concealment of the missing gauzes from the
knowledge of Natividad and her family.

II - G.R. No. 126467

Whether the Court of Appeals Erred in Absolving

Dr. Fuentes of any Liability

The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on the ground that it
is contrary to the doctrine of res ipsa loquitur. According to them, the fact that the two pieces of gauze
were left inside Natividads body is a prima facie evidence of Dr. Fuentes negligence.

We are not convinced.

Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule that the fact of the occurrence
of an injury, taken with the surrounding circumstances, may permit an inference or raise a presumption
of negligence, or make out a plaintiffs prima facie case, and present a question of fact for defendant to
meet with an explanation.13 Stated differently, where the thing which caused the injury, without the
fault of the injured, is under the exclusive control of the defendant and the injury is such that it should
not have occurred if he, having such control used proper care, it affords reasonable evidence, in the
absence of explanation that the injury arose from the defendants want of care, and the burden of proof
is shifted to him to establish that he has observed due care and diligence.14

From the foregoing statements of the rule, the requisites for the applicability of the doctrine of res ipsa
loquitur are: (1) the occurrence of an injury; (2) the thing which caused the injury was under the control
and management of the defendant; (3) the occurrence was such that in the ordinary course of things,
would not have happened if those who had control or management used proper care; and (4) the
absence of explanation by the defendant. Of the foregoing requisites, the most instrumental is the
"control and management of the thing which caused the injury."15

We find the element of "control and management of the thing which caused the injury" to be wanting.
Hence, the doctrine of res ipsa loquitur will not lie.

It was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil) found that
the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes performed the surgery and
thereafter reported and showed his work to Dr. Ampil. The latter examined it and finding everything to
be in order, allowed Dr. Fuentes to leave the operating room. Dr. Ampil then resumed operating on
Natividad. He was about to finish the procedure when the attending nurses informed him that two
pieces of gauze were missing. A "diligent search" was conducted, but the misplaced gauzes were not
found. Dr. Ampil then directed that the incision be closed. During this entire period, Dr. Fuentes was no
longer in the operating room and had, in fact, left the hospital.

Under the "Captain of the Ship" rule, the operating surgeon is the person in complete charge of the
surgery room and all personnel connected with the operation. Their duty is to obey his orders.16 As
stated before, Dr. Ampil was the lead surgeon. In other words, he was the "Captain of the Ship." That he
discharged such role is evident from his following conduct: (1) calling Dr. Fuentes to perform a
hysterectomy; (2) examining the work of Dr. Fuentes and finding it in order; (3) granting Dr. Fuentes
permission to leave; and (4) ordering the closure of the incision. To our mind, it was this act of ordering
the closure of the incision notwithstanding that two pieces of gauze remained unaccounted for, that
caused injury to Natividads body. Clearly, the control and management of the thing which caused the
injury was in the hands of Dr. Ampil, not Dr. Fuentes.

In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per se create or
constitute an independent or separate ground of liability, being a mere evidentiary rule.17 In other
words, mere invocation and application of the doctrine does not dispense with the requirement of proof
of negligence. Here, the negligence was proven to have been committed by Dr. Ampil and not by Dr.
Fuentes.

III - G.R. No. 126297

Whether PSI Is Liable for the Negligence of Dr. Ampil

The third issue necessitates a glimpse at the historical development of hospitals and the resulting
theories concerning their liability for the negligence of physicians.

Until the mid-nineteenth century, hospitals were generally charitable institutions, providing medical
services to the lowest classes of society, without regard for a patients ability to pay.18 Those who could
afford medical treatment were usually treated at home by their doctors.19 However, the days of house
calls and philanthropic health care are over. The modern health care industry continues to distance itself
from its charitable past and has experienced a significant conversion from a not-for-profit health care to
for-profit hospital businesses. Consequently, significant changes in health law have accompanied the
business-related changes in the hospital industry. One important legal change is an increase in hospital
liability for medical malpractice. Many courts now allow claims for hospital vicarious liability under the
theories of respondeat superior, apparent authority, ostensible authority, or agency by estoppel. 20

In this jurisdiction, the statute governing liability for negligent acts is Article 2176 of the Civil Code,
which reads:

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.

A derivative of this provision is Article 2180, the rule governing vicarious liability under the doctrine of
respondeat superior, thus:

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

x x x x x x
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.

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.

x x x x x x
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.

A prominent civilist commented that professionals engaged by an employer, such as physicians, dentists,
and pharmacists, are not "employees" under this article because the manner in which they perform
their work is not within the control of the latter (employer). In other words, professionals are considered
personally liable for the fault or negligence they commit in the discharge of their duties, and their
employer cannot be held liable for such fault or negligence. In the context of the present case, "a
hospital cannot be held liable for the fault or negligence of a physician or surgeon in the treatment or
operation of patients."21

The foregoing view is grounded on the traditional notion that the professional status and the very
nature of the physicians calling preclude him from being classed as an agent or employee of a hospital,
whenever he acts in a professional capacity.22 It has been said that medical practice strictly involves
highly developed and specialized knowledge,23 such that physicians are generally free to exercise their
own skill and judgment in rendering medical services sans interference.24 Hence, when a doctor
practices medicine in a hospital setting, the hospital and its employees are deemed to subserve him in
his ministrations to the patient and his actions are of his own responsibility.25

The case of Schloendorff v. Society of New York Hospital26 was then considered an authority for this
view. The "Schloendorff doctrine" regards a physician, even if employed by a hospital, as an
independent contractor because of the skill he exercises and the lack of control exerted over his work.
Under this doctrine, hospitals are exempt from the application of the respondeat superior principle for
fault or negligence committed by physicians in the discharge of their profession.

However, the efficacy of the foregoing doctrine has weakened with the significant developments in
medical care. Courts came to realize that modern hospitals are increasingly taking active role in
supplying and regulating medical care to patients. No longer were a hospitals functions limited to
furnishing room, food, facilities for treatment and operation, and attendants for its patients. Thus, in
Bing v. Thunig,27 the New York Court of Appeals deviated from the Schloendorff doctrine, noting that
modern hospitals actually do far more than provide facilities for treatment. Rather, they regularly
employ, on a salaried basis, a large staff of physicians, interns, nurses, administrative and manual
workers. They charge patients for medical care and treatment, even collecting for such services through
legal action, if necessary. The court then concluded that there is no reason to exempt hospitals from the
universal rule of respondeat superior.

In our shores, the nature of the relationship between the hospital and the physicians is rendered
inconsequential in view of our categorical pronouncement in Ramos v. Court of Appeals28 that for
purposes of apportioning responsibility in medical negligence cases, an employer-employee relationship
in effect exists between hospitals and their attending and visiting physicians. This Court held:

"We now discuss the responsibility of the hospital in this particular incident. The unique practice (among
private hospitals) of filling up specialist staff with attending and visiting "consultants," who are allegedly
not hospital employees, presents problems in apportioning responsibility for negligence in medical
malpractice cases. However, the difficulty is more apparent than real.

In the first place, hospitals exercise significant control in the hiring and firing of consultants and in the
conduct of their work within the hospital premises. Doctors who apply for consultant slots, visiting or
attending, are required to submit proof of completion of residency, their educational qualifications,
generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in
most cases, and references. These requirements are carefully scrutinized by members of the hospital
administration or by a review committee set up by the hospital who either accept or reject the
application. x x x.

After a physician is accepted, either as a visiting or attending consultant, he is normally required to
attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and responsibilities, for the privilege
of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients into the
hospital. In addition to these, the physicians performance as a specialist is generally evaluated by a peer
review committee on the basis of mortality and morbidity statistics, and feedback from patients, nurses,
interns and residents. A consultant remiss in his duties, or a consultant who regularly falls short of the
minimum standards acceptable to the hospital or its peer review committee, is normally politely
terminated.

In other words, private hospitals, hire, fire and exercise real control over their attending and visiting
consultant staff. While consultants are not, technically employees, x x x, the control exercised, the
hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-
employee relationship, with the exception of the payment of wages. In assessing whether such a
relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we
rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians. "

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

Apparent authority, or what is sometimes referred to as the "holding

out" theory, or doctrine of ostensible agency or agency by estoppel,29 has its origin from the law of
agency. It imposes liability, not as the result of the reality of a contractual relationship, but rather
because of the actions of a principal or an employer in somehow misleading the public into believing
that the relationship or the authority exists.30 The concept is essentially one of estoppel and has been
explained in this manner:

"The principal is bound by the acts of his agent with the apparent authority which he knowingly permits
the agent to assume, or which he holds the agent out to the public as possessing. The question in every
case is whether the principal has by his voluntary act placed the agent in such a situation that a person
of ordinary prudence, conversant with business usages and the nature of the particular business, is
justified in presuming that such agent has authority to perform the particular act in question.31

The applicability of apparent authority in the field of hospital liability was upheld long time ago in Irving
v. Doctor Hospital of Lake Worth, Inc.32 There, it was explicitly stated that "there does not appear to be
any rational basis for excluding the concept of apparent authority from the field of hospital liability."
Thus, in cases where it can be shown that a hospital, by its actions, has held out a particular physician as
its agent and/or employee and that a patient has accepted treatment from that physician in the
reasonable belief that it is being rendered in behalf of the hospital, then the hospital will be liable for
the physicians negligence.

Our jurisdiction recognizes the concept of an agency by implication or estoppel. Article 1869 of the Civil
Code reads:

ART. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of
action, or his failure to repudiate the agency, knowing that another person is acting on his behalf
without authority.

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

x x x regardless of the education and status in life of the patient, he ought not be burdened with the
defense of absence of employer-employee relationship between the hospital and the independent
physician whose name and competence are certainly certified to the general public by the hospitals act
of listing him and his specialty in its lobby directory, as in the case herein. The high costs of todays
medical and health care should at least exact on the hospital greater, if not broader, legal responsibility
for the conduct of treatment and surgery within its facility by its accredited physician or surgeon,
regardless of whether he is independent or employed."33

The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, like PSI, are capable of
acting only through other individuals, such as physicians. If these accredited physicians do their job well,
the hospital succeeds in its mission of offering quality medical services and thus profits financially.
Logically, where negligence mars the quality of its services, the hospital should not be allowed to escape
liability for the acts of its ostensible agents.

We now proceed to the doctrine of corporate negligence or corporate responsibility.

One allegation in the complaint in Civil Case No. Q-43332 for negligence and malpractice is that PSI as
owner, operator and manager of Medical City Hospital, "did not perform the necessary supervision nor
exercise diligent efforts in the supervision of Drs. Ampil and Fuentes and its nursing staff, resident
doctors, and medical interns who assisted Drs. Ampil and Fuentes in the performance of their duties as
surgeons."34 Premised on the doctrine of corporate negligence, the trial court held that PSI is directly
liable for such breach of duty.

We agree with the trial court.

Recent years have seen the doctrine of corporate negligence as the judicial answer to the problem of
allocating hospitals liability for the negligent acts of health practitioners, absent facts to support the
application of respondeat superior or apparent authority. Its formulation proceeds from the judiciarys
acknowledgment that in these modern times, the duty of providing quality medical service is no longer
the sole prerogative and responsibility of the physician. The modern hospitals have changed structure.
Hospitals now tend to organize a highly professional medical staff whose competence and performance
need to be monitored by the hospitals commensurate with their inherent responsibility to provide
quality medical care.35

The doctrine has its genesis in Darling v. Charleston Community Hospital.36 There, the Supreme Court of
Illinois held that "the jury could have found a hospital negligent, inter alia, in failing to have a sufficient
number of trained nurses attending the patient; failing to require a consultation with or examination by
members of the hospital staff; and failing to review the treatment rendered to the patient." On the basis
of Darling, other jurisdictions held that a hospitals corporate negligence extends to permitting a
physician known to be incompetent to practice at the hospital.37 With the passage of time, more duties
were expected from hospitals, among them: (1) the use of reasonable care in the maintenance of safe
and adequate facilities and equipment; (2) the selection and retention of competent physicians; (3) the
overseeing or supervision of all persons who practice medicine within its walls; and (4) the formulation,
adoption and enforcement of adequate rules and policies that ensure quality care for its patients.38
Thus, in Tucson Medical Center, Inc. v. Misevich,39 it was held that a hospital, following the doctrine of
corporate responsibility, has the duty to see that it meets the standards of responsibilities for the care
of patients. Such duty includes the proper supervision of the members of its medical staff. And in Bost v.
Riley,40 the court concluded that a patient who enters a hospital does so with the reasonable
expectation that it will attempt to cure him. The hospital accordingly has the duty to make a reasonable
effort to monitor and oversee the treatment prescribed and administered by the physicians practicing in
its premises.

In the present case, it was duly established that PSI operates the Medical City Hospital for the purpose
and under the concept of providing comprehensive medical services to the public. Accordingly, it has the
duty to exercise reasonable care to protect from harm all patients admitted into its facility for medical
treatment. Unfortunately, PSI failed to perform such duty. The findings of the trial court are convincing,
thus:

x x x PSIs liability is traceable to its failure to conduct an investigation of the matter reported in the nota
bene of the count nurse. Such failure established PSIs part in the dark conspiracy of silence and
concealment about the gauzes. Ethical considerations, if not also legal, dictated the holding of an
immediate inquiry into the events, if not for the benefit of the patient to whom the duty is primarily
owed, then in the interest of arriving at the truth. The Court cannot accept that the medical and the
healing professions, through their members like defendant surgeons, and their institutions like PSIs
hospital facility, can callously turn their backs on and disregard even a mere probability of mistake or
negligence by refusing or failing to investigate a report of such seriousness as the one in Natividads
case.

It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of the
Medical City Hospitals staff, composed of resident doctors, nurses, and interns. As such, it is reasonable
to conclude that PSI, as the operator of the hospital, has actual or constructive knowledge of the
procedures carried out, particularly the report of the attending nurses that the two pieces of gauze were
missing. In Fridena v. Evans,41 it was held that a corporation is bound by the knowledge acquired by or
notice given to its agents or officers within the scope of their authority and in reference to a matter to
which their authority extends. This means that the knowledge of any of the staff of Medical City Hospital
constitutes knowledge of PSI. Now, the failure of PSI, despite the attending nurses report, to investigate
and inform Natividad regarding the missing gauzes amounts to callous negligence. Not only did PSI
breach its duties to oversee or supervise all persons who practice medicine within its walls, it also failed
to take an active step in fixing the negligence committed. This renders PSI, not only vicariously liable for
the negligence of Dr. Ampil under Article 2180 of the Civil Code, but also directly liable for its own
negligence under Article 2176. In Fridena, the Supreme Court of Arizona held:

x x x In recent years, however, the duty of care owed to the patient by the hospital has expanded. The
emerging trend is to hold the hospital responsible where the hospital has failed to monitor and review
medical services being provided within its walls. See Kahn Hospital Malpractice Prevention, 27 De Paul .
Rev. 23 (1977).

Among the cases indicative of the emerging trend is Purcell v. Zimbelman, 18 Ariz. App. 75,500 P. 2d
335 (1972). In Purcell, the hospital argued that it could not be held liable for the malpractice of a
medical practitioner because he was an independent contractor within the hospital. The Court of
Appeals pointed out that the hospital had created a professional staff whose competence and
performance was to be monitored and reviewed by the governing body of the hospital, and the court
held that a hospital would be negligent where it had knowledge or reason to believe that a doctor using
the facilities was employing a method of treatment or care which fell below the recognized standard of
care.

Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has certain
inherent responsibilities regarding the quality of medical care furnished to patients within its walls and it
must meet the standards of responsibility commensurate with this undertaking. Beeck v. Tucson
General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This court has confirmed the rulings of the
Court of Appeals that a hospital has the duty of supervising the competence of the doctors on its staff. x
x x.

x x x x x x
In the amended complaint, the plaintiffs did plead that the operation was performed at the hospital
with its knowledge, aid, and assistance, and that the negligence of the defendants was the proximate
cause of the patients injuries. We find that such general allegations of negligence, along with the
evidence produced at the trial of this case, are sufficient to support the hospitals liability based on the
theory of negligent supervision."

Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages, let it be
emphasized that PSI, apart from a general denial of its responsibility, failed to adduce evidence showing
that it exercised the diligence of a good father of a family in the accreditation and supervision of the
latter. In neglecting to offer such proof, PSI failed to discharge its burden under the last paragraph of
Article 2180 cited earlier, and, therefore, must be adjudged solidarily liable with Dr. Ampil. Moreover, as
we have discussed, PSI is also directly liable to the Aganas.

One final word. Once a physician undertakes the treatment and care of a patient, the law imposes on
him certain obligations. In order to escape liability, he must possess that reasonable degree of learning,
skill and experience required by his profession. At the same time, he must apply reasonable care and
diligence in the exercise of his skill and the application of his knowledge, and exert his best judgment.

WHEREFORE, we DENY all the petitions and AFFIRM the challenged Decision of the Court of Appeals in
CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198.

Costs against petitioners PSI and Dr. Miguel Ampil.

SO ORDERED.

G.R. No. 77679 September 30, 1987

VICENTE VERGARA, petitioner,
vs.
THE COURT OF APPEALS and AMADEO AZARCON, respondents.

R E S O L U T I O N



PADILLA, J.:

An action for damages based on quasi-delict (Art. 2176 of the Civil Code) was filed by private respondent
against petitioner. The action arose from a vehicular accident that occurred on 5 August 1979 in Gapan,
Nueva Ecija, when Martin Belmonte, while driving a cargo truck belonging to petitioner, rammed "head-
on" the store-residence of the private respondent, causing damages thereto which were inventoried
and assessed at P53,024.22.

In his answer to the complaint, the petitioner alleged principally: "that his driver Martin Belmonte
operated said cargo truck in a very diligent (and) careful manner; that the steering wheel refused to
respond to his effort and as a result of a blown-out tire and despite application of his brakes, the said
cargo truck hit the store-residence of plaintiff (private respondent) and that the said accident was an act
of God for which he cannot be held liable." 1

Petitioner also filed a third party complaint against Travellers Insurance and Surety Corporation, alleging
that said cargo truck involved in the vehicular accident, belonging to the petitioner, was insured by the
third party defendant insurance company. Petitioner asked that the latter be ordered to pay him
whatever amount he may be ordered by the court to pay to the private respondent.

The trial court rendered judgment in favor of private respondent. Upon appeal to the Court of Appeals,
the latter court affirmed in toto the decision of the trial court, which ordered Petitioner to pay, jointly
and severally with Travellers Insurance and Surety Corporation, to the private, respondent the following:
(a) P53,024.22 as actual damages; (b) P10,000.00 as moral damages; (c) P10,000.00 as exemplary
damages; and (d) the sum of P5,000.00 for attorney's fees and the costs. On the third party complaint,
the insurance company was sentenced to pay to the petitioner the following: (a) P50,000.00 for third
party liability under its comprehensive accident insurance policy; and (b) P3,000.00 for and as attorney's
fees.

Hence, this petition for review on certiorari.

Petitioner's contention that the respondent court erred in finding him guilty of fault or negligence is not
tenable. It was established by competent evidence that the requisites of a quasi-delict are present in the
case at bar. These requisites are: (1) damages to the plaintiff; (2) negligence, by act or omission, of
which defendant, or some person for whose acts he must respond, was guilty; and (3) the connection of
cause and effect between such negligence and the damages.

It is undisputed that private respondent suffered damages as a result of an act or omission of petitioner.
The issue of whether or not this act or omission can be considered as a "negligent" act or omission was
passed upon by the trial court. The findings of said court, affirmed by the respondent court, which we
are not prepared to now disturb, show that the fact of occurrence of the "vehicular accident" was
sufficiently established by the policy report and the testimony of Patrolman Masiclat. And the fact of
negligence may be deduced from the surrounding circumstances thereof. According to the police report,
"the cargo truck was travelling on the right side of the road going to Manila and then it crossed to the
center line and went to the left side of the highway; it then bumped a tricycle; and then another bicycle;
and then said cargo truck rammed the store warehouse of the plaintiff." 2

According to the driver of the cargo truck, he applied the brakes but the latter did not work due to
mechanical defect. Contrary to the claim of the petitioner, a mishap caused by defective brakes can not
be consideration as fortuitous in character. Certainly, the defects were curable and the accident
preventable.

Furthermore, the petitioner failed to adduce any evidence to overcome the disputable presumption of
negligence on his part in the selection and supervision of his driver.

Based on the foregoing finding by the respondent Court that there was negligence on the part of the
petitioner, the petitioner's contention that the respondent court erred in awarding private respondent
actual, moral and exemplary damages as well as attorney's fees and costs, is untenable.

ACCORDINGLY, the petition is DENIED.

SO ORDERED.

G.R. No. 124922 June 22, 1998

JIMMY CO, doing business under the name & style DRAGON METAL MANUFACTURING, petitioner,
vs.
COURT OF APPEALS and BROADWAY MOTOR SALES CORPORATION, respondents.



MARTINEZ, J.:

On July 18, 1990, petitioner entrusted his Nissan pick-up car 1988 model 1 to private respondent
which is engaged in the sale, distribution and repair of motor vehicles for the following job repair
services and supply of parts:

Bleed injection pump and all nozzles;

Adjust valve tappet;

Change oil and filter;

Open up and service four wheel brakes, clean and adjust;

Lubricate accelerator linkages;

Replace aircon belt; and

Replace battery 2

Private respondent undertook to return the vehicle on July 21, 1990 fully serviced and supplied in
accordance with the job contract. After petitioner paid in full the repair bill in the amount of P1,397.00 3
private respondent issued to him a gate pass for the release of the vehicle on said date. But came July
21, 1990, the latter could not release the vehicle as its battery was weak and was not yet replaced. Left
with no option, petitioner himself bought a new battery nearby and delivered it to private respondent
for installation on the same day. However, the battery was not installed and the delivery of the car was
rescheduled to July 24, 1990 or three (3) days later. When petitioner sought to reclaim his car in the
afternoon of July 24, 1990, he was told that it was carnapped earlier that morning while being road-
tested by private respondent's employee along Pedro Gil and Perez Streets in Paco, Manila. Private
respondent said that the incident was reported to the police.

Having failed to recover his car and its accessories or the value thereof, petitioner filed a suit for
damages against private respondent anchoring his claim on the latter's alleged negligence. For its part,
private respondent contended that it has no liability because the car was lost as result of a fortuitous
event the carnapping. During pre-trial, the parties agreed that:

(T)he cost of the Nissan Pick-up four (4) door when the plaintiff purchased it from the defendent is
P332,500.00 excluding accessories which were installed in the vehicle by the plaintiff consisting of four
(4) brand new tires, magwheels, stereo speaker, amplifier which amount all to P20,000.00. It is agreed
that the vehicle was lost on July 24, 1990 "approximately two (2) years and five (5) months from the
date of the purchase." It was agreed that the plaintiff paid the defendant the cost of service and repairs
as early as July 21, 1990 in the amount of P1,397.00 which amount was received and duly receipted by
the defendant company. It was also agreed that the present value of a brand new vehicle of the same
type at this time is P425,000.00 without accessories. 4

They likewise agreed that the sole issue for trial was who between the parties shall bear the loss of the
vehicle which necessitates the resolution of whether private respondent was indeed negligent. 5 After
trial, the court a quo found private respondent guilty of delay in the performance of its obligation and
held it liable to petitioner for the value of the lost vehicle and its accessories plus interest and attorney's
fees. 6 On appeal, the Court of Appeals (CA) reversed the ruling of the lower court and ordered the
dismissal of petitioner's damage suit. 7 The CA ruled that: (1) the trial court was limited to resolving the
issue of negligence as agreed during pre-trial; hence it cannot pass on the issue of delay; and (2) the
vehicle was lost due to a fortuitous event.

In a petition for review to this Court, the principal query raised is whether a repair shop can be held
liable for the loss of a customer's vehicle while the same is in its custody for repair or other job services?

The Court resolves the query in favor of the customer. First, on the technical aspect involved. Contrary
to the CA' s pronouncement, the rule that the determination of issues at a pre-trial conference bars the
consideration of other issues on appeal, except those that may involve privilege or impeaching matter, 8
is inapplicable to this case. The question of delay, though not specifically mentioned as an issue at the
pre-trial may be tackled by the court considering that it is necessarily intertwined and intimately
connected with the principal issue agreed upon by the parties, i.e., who will bear the loss and whether
there was negligence. Petitioner's imputation of negligence to private respondent is premised on delay
which is the very basis of the former's complaint. Thus, it was unavoidable for the court to resolve the
case, particularly the question of negligence without considering whether private respondent was guilty
of delay in the performance of its obligation.

On the merits. It is a not defense for a repair shop of motor vehicles to escape liability simply because
the damage or loss of a thing lawfully placed in its possession was due to carnapping. Carnapping per se
cannot be considered as a fortuitous event. The fact that a thing was unlawfully and forcefully taken
from another's rightful possession, as in cases of carnapping, does not automatically give rise to a
fortuitous event. To be considered as such, carnapping entails more than the mere forceful taking of
another's property. It must be proved and established that the event was an act of God or was done
solely by third parties and that neither the claimant nor the person alleged to be negligent has any
participation. 9 In accordance with the Rules of evidence, the burden of proving that the loss was due to
a fortuitous event rests on him who invokes it 10 which in this case is the private respondent.
However, other than the police report of the alleged carnapping incident, no other evidence was
presented by private respondent to the effect that the incident was not due to its fault. A police report
of an alleged crime, to which only private respondent is privy, does not suffice to establish the
carnapping. Neither does it prove that there was no fault on the part of private respondent
notwithstanding the parties' agreement at the pre-trial that the car was carnapped. Carnapping does
not foreclose the pissibility of fault or negligence on the part of private respondent.

Even assuming arguendo that carnapping was duly established as a fortuitous event, still private
respondent cannot escape liability. Article 1165 11 of the New Civil Code makes an obligor who is guilty
of delay responsible even for a fortuitous event until he has effected the delivery. In this case, private
respondent was already in delay as it was supposed to deliver petitioner's car three (3) days before it
was lost. Petitioner's agreement to the rescheduled delivery does not defeat his claim as private
respondent had already breached its obligation. Moreover, such accession cannot be construed as
waiver of petitioner's right to hold private respondent liable because the car was unusable and thus,
petitioner had no option but to leave it.

Assuming further that there was no delay, still working against private respondent is the legal
presumption under Article 1265 that its possession of the thing at the time it was lost was due to its
fault. 12 This presumption is reasonable since he who has the custody and care of the thing can easily
explain the circumstances of the loss. The vehicle owner has no duty to show that the repair shop was at
fault. All that petitioner needs to prove, as claimant, is the simple fact that private respondent was in
possession of the vehicle at the time it was lost. In this case, private respondent's possession at the time
of the loss is undisputed. Consequently, the burden shifts to the possessor who needs to present
controverting evidence sufficient enough to overcome that presumption. Moreover, the exempting
circumstances earthquake, flood, storm or other natural calamity when the presumption of fault is
not applicable 13 do not concur in this case. Accordingly, having failed to rebut the presumption and
since the case does not fall under the exceptions, private respondent is answerable for the loss.

It must likewise be emphasized that pursuant to Articles 1174 and 1262 of the New Civil Code, liability
attaches even if the loss was due to a fortuitous event if "the nature of the obligation requires the
assumption of risk". 14 Carnapping is a normal business risk for those engaged in the repair of motor
vehicles. For just as the owner is exposed to that risk so is the repair shop since the car was entrusted to
it. That is why, repair shops are required to first register with the Department of Trade and Industry
(DTI) 15 and to secure an insurance policy for the "shop covering the property entrusted by its customer
for repair, service or maintenance" as a pre-requisite for such registration/accreditation. 16 Violation of
this statutory duty constitutes negligence per se. 17 Having taken custody of the vehicle private
respondent is obliged not only to repair the vehicle but must also provide the customer with some form
of security for his property over which he loses immediate control. An owner who cannot exercise the
seven (7) juses or attributes of ownership the right to possess, to use and enjoy, to abuse or
consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruits 18 is a
crippled owner. Failure of the repair shop to provide security to a motor vehicle owner would leave the
latter at the mercy of the former. Moreover, on the assumption that private respondent's repair
business is duly registered, it presupposes that its shop is covered by insurance from which it may
recover the loss. If private respondent can recover from its insurer, then it would be unjustly enriched if
it will not compensate petitioner to whom no fault can be attributed. Otherwise, if the shop is not
registered, then the presumption of negligence applies.

One last thing. With respect to the value of the lost vehicle and its accessories for which the repair shop
is liable, it should be based on the fair market value that the property would command at the time it
was entrusted to it or such other value as agreed upon by the parties subsequent to the loss. Such
recoverable value is fair and reasonable considering that the value of the vehicle depreciates. This value
may be recovered without prejudice to such other damages that a claimant is entitled under applicable
laws.

WHEREFORE, premises considered, the decision of the Court Appeals is REVERSED and SET ASIDE and
the decision of the court a quo is REINSTATED.

SO ORDERED.

Regalado, Puno and Mendoza, JJ., concur.

FE CAYAO-LASAM, petitioner,
vs.
SPOUSES CLARO and EDITHA RAMOLETE, respondents.*

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by Dr. Fe
Cayao-Lasam (petitioner) seeking to annul the Decision1 dated July 4, 2003 of the Court of Appeals (CA)
in CA-G.R. SP No. 62206.

The antecedent facts:

On July 28, 1994, respondent, three months pregnant Editha Ramolete (Editha) was brought to the
Lorma Medical Center (LMC) in San Fernando, La Union due to vaginal bleeding. Upon advice of
petitioner relayed via telephone, Editha was admitted to the LMC on the same day. A pelvic sonogram2
was then conducted on Editha revealing the fetus weak cardiac pulsation.3 The following day, Edithas
repeat pelvic sonogram4 showed that aside from the fetus weak cardiac pulsation, no fetal movement
was also appreciated. Due to persistent and profuse vaginal bleeding, petitioner advised Editha to
undergo a Dilatation and Curettage Procedure (D&C) or "raspa."

On July 30, 1994, petitioner performed the D&C procedure. Editha was discharged from the hospital the
following day.

On September 16, 1994, Editha was once again brought at the LMC, as she was suffering from vomiting
and severe abdominal pains. Editha was attended by Dr. Beatriz de la Cruz, Dr. Victor B. Mayo and Dr.
Juan V. Komiya. Dr. Mayo allegedly informed Editha that there was a dead fetus in the latters womb.
After, Editha underwent laparotomy,5 she was found to have a massive intra-abdominal hemorrhage
and a ruptured uterus. Thus, Editha had to undergo a procedure for hysterectomy6 and as a result, she
has no more chance to bear a child.

On November 7, 1994, Editha and her husband Claro Ramolete (respondents) filed a Complaint7 for
Gross Negligence and Malpractice against petitioner before the Professional Regulations Commission
(PRC).

Respondents alleged that Edithas hysterectomy was caused by petitioners unmitigated negligence and
professional incompetence in conducting the D&C procedure and the petitioners failure to remove the
fetus inside Edithas womb.8 Among the alleged acts of negligence were: first, petitioners failure to
check up, visit or administer medication on Editha during her first day of confinement at the LMC;9
second, petitioner recommended that a D&C procedure be performed on Editha without conducting any
internal examination prior to the procedure;10 third, petitioner immediately suggested a D&C
procedure instead of closely monitoring the state of pregnancy of Editha.11

In her Answer,12 petitioner denied the allegations of negligence and incompetence with the following
explanations: upon Edithas confirmation that she would seek admission at the LMC, petitioner
immediately called the hospital to anticipate the arrival of Editha and ordered through the telephone
the medicines Editha needed to take, which the nurses carried out; petitioner visited Editha on the
morning of July 28, 1994 during her rounds; on July 29, 1994, she performed an internal examination on
Editha and she discovered that the latters cervix was already open, thus, petitioner discussed the
possible D&C procedure, should the bleeding become more profuse; on July 30 1994, she conducted
another internal examination on Editha, which revealed that the latters cervix was still open; Editha
persistently complained of her vaginal bleeding and her passing out of some meaty mass in the process
of urination and bowel movement; thus, petitioner advised Editha to undergo D&C procedure which the
respondents consented to; petitioner was very vocal in the operating room about not being able to see
an abortus;13 taking the words of Editha to mean that she was passing out some meaty mass and
clotted blood, she assumed that the abortus must have been expelled in the process of bleeding; it was
Editha who insisted that she wanted to be discharged; petitioner agreed, but she advised Editha to
return for check-up on August 5, 1994, which the latter failed to do.

Petitioner contended that it was Edithas gross negligence and/or omission in insisting to be discharged
on July 31, 1994 against doctors advice and her unjustified failure to return for check-up as directed by
petitioner that contributed to her life-threatening condition on September 16, 1994; that Edithas
hysterectomy was brought about by her very abnormal pregnancy known as placenta increta, which was
an extremely rare and very unusual case of abdominal placental implantation. Petitioner argued that
whether or not a D&C procedure was done by her or any other doctor, there would be no difference at
all because at any stage of gestation before term, the uterus would rupture just the same.

On March 4, 1999, the Board of Medicine (the Board) of the PRC rendered a Decision,14 exonerating
petitioner from the charges filed against her. The Board held:

Based on the findings of the doctors who conducted the laparotomy on Editha, hers is a case of Ectopic
Pregnancy Interstitial. This type of ectopic pregnancy is one that is being protected by the uterine
muscles and manifestations may take later than four (4) months and only attributes to two percent (2%)
of ectopic pregnancy cases.

When complainant Editha was admitted at Lorma Medical Center on July 28, 1994 due to vaginal
bleeding, an ultra-sound was performed upon her and the result of the Sonogram Test reveals a morbid
fetus but did not specify where the fetus was located. Obstetricians will assume that the pregnancy is
within the uterus unless so specified by the Sonologist who conducted the ultra-sound. Respondent (Dr.
Lasam) cannot be faulted if she was not able to determine that complainant Editha is having an ectopic
pregnancy interstitial. The D&C conducted on Editha is necessary considering that her cervix is already
open and so as to stop the profuse bleeding. Simple curettage cannot remove a fetus if the patient is
having an ectopic pregnancy, since ectopic pregnancy is pregnancy conceived outside the uterus and
curettage is done only within the uterus. Therefore, a more extensive operation needed in this case of
pregnancy in order to remove the fetus.15

Feeling aggrieved, respondents went to the PRC on appeal. On November 22, 2000, the PRC rendered a
Decision16 reversing the findings of the Board and revoking petitioners authority or license to practice
her profession as a physician.17

Petitioner brought the matter to the CA in a Petition for Review under Rule 43 of the Rules of Court.
Petitioner also dubbed her petition as one for certiorari18 under Rule 65 of the Rules of Court.

In the Decision dated July 4, 2003, the CA held that the Petition for Review under Rule 43 of the Rules of
Court was an improper remedy, as the enumeration of the quasi-judicial agencies in Rule 43 is
exclusive.19 PRC is not among the quasi-judicial bodies whose judgment or final orders are subject of a
petition for review to the CA, thus, the petition for review of the PRC Decision, filed at the CA, was
improper. The CA further held that should the petition be treated as a petition for certiorari under Rule
65, the same would still be dismissed for being improper and premature. Citing Section 2620 of Republic
Act (R.A.) No. 2382 or the Medical Act of 1959, the CA held that the plain, speedy and adequate remedy
under the ordinary course of law which petitioner should have availed herself of was to appeal to the
Office of the President.21

Hence, herein petition, assailing the decision of the CA on the following grounds:

1. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN HOLDING THAT THE PROFESSIONAL
REGULATION[S] COMMISSION (PRC) WAS EXCLUDED AMONG THE QUASI-JUDICIAL AGENCIES
CONTEMPLATED UNDER RULE 43 OF THE RULES OF CIVIL PROCEDURE;

2. EVEN ASSUMING, ARGUENDO, THAT PRC WAS EXCLUDED FROM THE PURVIEW OF RULE 43 OF THE
RULES OF CIVIL PROCEDURE, THE PETITIONER WAS NOT PRECLUDED FROM FILING A PETITION FOR
CERTIORARI WHERE THE DECISION WAS ALSO ISSUED IN EXCESS OF OR WITHOUT JURISDICTION, OR
WHERE THE DECISION WAS A PATENT NULLITY;

3. HEREIN RESPONDENTS-SPOUSES ARE NOT ALLOWED BY LAW TO APPEAL FROM THE DECISION OF THE
BOARD OF MEDICINE TO THE PROFESSIONAL REGULATION[S] COMMISSION;

4. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING FOR IMPROPER
FORUM THE PETITION FOR REVIEW/PETITION FOR CERTIORARI WITHOUT GOING OVER THE MERITS OF
THE GROUNDS RELIED UPON BY THE PETITIONER;

5. PRCS GRAVE OMISSION TO AFFORD HEREIN PETITONER A CHANCE TO BE HEARD ON APPEAL IS A
CLEAR VIOLATION OF HER CONSTITUTIONAL RIGHT TO DUE PROCESS AND HAS THE EFFECT OF
RENDERING THE JUDGMENT NULL AND VOID;

6. COROLLARY TO THE FOURTH ASSIGNED ERROR, PRC COMMITTED GRAVE ABUSE OF DISCRETION,
AMOUNTING TO LACK OF JURISDICTION, IN ACCEPTING AND CONSIDERING THE MEMORANDUM ON
APPEAL WITHOUT PROOF OF SERVICE TO HEREIN PETITIONER, AND IN VIOLATION OF ART. IV, SEC. 35 OF
THE RULES AND REGULATIONS GOVERNING THE REGULATION AND PRACTICE OF PROFESSIONALS;

7. PRC COMMITTED GRAVE ABUSE OF DISCRETION IN REVOKING PETITIONERS LICENSE TO PRACTICE
MEDICINE WITHOUT AN EXPERT TESTIMONY TO SUPPORT ITS CONCLUSION AS TO THE CAUSE OF
RESPONDENT EDITHAT *SIC+ RAMOLETES INJURY;

8. PRC COMMITTED AN EVEN GRAVER ABUSE OF DISCRETION IN TOTALLY DISREGARDING THE FINDING
OF THE BOARD OF MEDICINE, WHICH HAD THE NECESSARY COMPETENCE AND EXPERTISE TO ESTABLISH
THE CAUSE OF RESPONDENT EDITHAS INJURY, AS WELL AS THE TESTIMONY OF THE EXPERT WITNESS
AUGUSTO MANALO, M.D. ;[and]

9. PRC COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING CONCLUSIONS OF FACTS THAT WERE
NOT ONLY UNSUPPORTED BY EVIDENCE BUT WERE ACTUALLY CONTRARY TO EVIDENCE ON RECORD.22

The Court will first deal with the procedural issues.

Petitioner claims that the law does not allow complainants to appeal to the PRC from the decision of the
Board. She invokes Article IV, Section 35 of the Rules and Regulations Governing the Regulation and
Practice of Professionals, which provides:

Sec. 35. The respondent may appeal the decision of the Board within thirty days from receipt thereof to
the Commission whose decision shall be final. Complainant, when allowed by law, may interpose an
appeal from the Decision of the Board within the same period. (Emphasis supplied)

Petitioner asserts that a careful reading of the above law indicates that while the respondent, as a
matter of right, may appeal the Decision of the Board to the Commission, the complainant may
interpose an appeal from the decision of the Board only when so allowed by law.23 Petitioner cited
Section 26 of Republic Act No. 2382 or "The Medical Act of 1959," to wit:

Section 26. Appeal from judgment. The decision of the Board of Medical Examiners (now Medical Board)
shall automatically become final thirty days after the date of its promulgation unless the respondent,
during the same period, has appealed to the Commissioner of Civil Service (now Professional
Regulations Commission) and later to the Office of the President of the Philippines. If the final decision is
not satisfactory, the respondent may ask for a review of the case, or may file in court a petition for
certiorari.

Petitioner posits that the reason why the Medical Act of 1959 allows only the respondent in an
administrative case to file an appeal with the Commission while the complainant is not allowed to do so
is double jeopardy. Petitioner is of the belief that the revocation of license to practice a profession is
penal in nature.24

The Court does not agree.

For one, the principle of double jeopardy finds no application in administrative cases. Double jeopardy
attaches only: (1) upon a valid indictment; (2) before a competent court; (3) after arraignment; (4) when
a valid plea has been entered; and (5) when the defendant was acquitted or convicted, or the case was
dismissed or otherwise terminated without the express consent of the accused.25 These elements were
not present in the proceedings before the Board of Medicine, as the proceedings involved in the instant
case were administrative and not criminal in nature. The Court has already held that double jeopardy
does not lie in administrative cases.26

Moreover, Section 35 of the Rules and Regulations Governing the Regulation and Practice of
Professionals cited by petitioner was subsequently amended to read:

Sec. 35. The complainant/respondent may appeal the order, the resolution or the decision of the Board
within thirty (30) days from receipt thereof to the Commission whose decision shall be final and
executory. Interlocutory order shall not be appealable to the Commission. (Amended by Res. 174, Series
of 1990).27 (Emphasis supplied)

Whatever doubt was created by the previous provision was settled with said amendment. It is axiomatic
that the right to appeal is not a natural right or a part of due process, but a mere statutory privilege that
may be exercised only in the manner prescribed by law.28 In this case, the clear intent of the
amendment is to render the right to appeal from a decision of the Board available to both complainants
and respondents.

Such conclusion is bolstered by the fact that in 2006, the PRC issued Resolution No. 06-342(A), or the
New Rules of Procedure in Administrative Investigations in the Professional Regulations Commission and
the Professional Regulatory Boards, which provides for the method of appeal, to wit:

Sec. 1. Appeal; Period Non-Extendible.- The decision, order or resolution of the Board shall be final and
executory after the lapse of fifteen (15) days from receipt of the decision, order or resolution without an
appeal being perfected or taken by either the respondent or the complainant. A party aggrieved by the
decision, order or resolution may file a notice of appeal from the decision, order or resolution of the
Board to the Commission within fifteen (15) days from receipt thereof, and serving upon the adverse
party a notice of appeal together with the appellants brief or memorandum on appeal, and paying the
appeal and legal research fees. x x x29

The above-stated provision does not qualify whether only the complainant or respondent may file an
appeal; rather, the new rules provide that "a party aggrieved" may file a notice of appeal. Thus, either
the complainant or the respondent who has been aggrieved by the decision, order or resolution of the
Board may appeal to the Commission. It is an elementary rule that when the law speaks in clear and
categorical language, there is no need, in the absence of legislative intent to the contrary, for any
interpretation.30 Words and phrases used in the statute should be given their plain, ordinary, and
common usage or meaning.31

Petitioner also submits that appeals from the decisions of the PRC should be with the CA, as Rule 4332
of the Rules of Court was precisely formulated and adopted to provide for a uniform rule of appellate
procedure for quasi-judicial agencies.33 Petitioner further contends that a quasi-judicial body is not
excluded from the purview of Rule 43 just because it is not mentioned therein.34

On this point, the Court agrees with the petitioner.

Sec. 1, Rule 43 of the Rules of Court provides:

Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax
Appeals, and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial
agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service
Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the
President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy
Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under
Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission,
Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of
Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by
law. (Emphasis supplied)

Indeed, the PRC is not expressly mentioned as one of the agencies which are expressly enumerated
under Section 1, Rule 43 of the Rules of Court. However, its absence from the enumeration does not, by
this fact alone, imply its exclusion from the coverage of said Rule.35 The Rule expressly provides that it
should be applied to appeals from awards, judgments final orders or resolutions of any quasi-judicial
agency in the exercise of its quasi-judicial functions. The phrase "among these agencies" confirms that
the enumeration made in the Rule is not exclusive to the agencies therein listed.36

Specifically, the Court, in Yang v. Court of Appeals,37 ruled that Batas Pambansa (B.P.) Blg. 12938
conferred upon the CA exclusive appellate jurisdiction over appeals from decisions of the PRC. The Court
held:

The law has since been changed, however, at least in the matter of the particular court to which appeals
from the Commission should be taken. On August 14, 1981, Batas Pambansa Bilang 129 became
effective and in its Section 29, conferred on the Court of Appeals "exclusive appellate jurisdiction over
all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions except those falling under the appellate jurisdiction
of the Supreme Court. x x x." In virtue of BP 129, appeals from the Professional Regulations Commission
are now exclusively cognizable by the Court of Appeals.39 (Emphasis supplied)

Clearly, the enactment of B.P. Blg. 129, the precursor of the present Rules of Civil Procedure,40 lodged
with the CA such jurisdiction over the appeals of decisions made by the PRC.

Anent the substantive merits of the case, petitioner questions the PRC decision for being without an
expert testimony to support its conclusion and to establish the cause of Edithas injury. Petitioner avers
that in cases of medical malpractice, expert testimony is necessary to support the conclusion as to the
cause of the injury.41

Medical malpractice is a particular form of negligence which consists in the failure of a physician or
surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily employed by
the profession generally, under similar conditions, and in like surrounding circumstances.42 In order to
successfully pursue such a claim, a patient must prove that the physician or surgeon either failed to do
something which a reasonably prudent physician or surgeon would not have done, and that the failure
or action caused injury to the patient.43

There are four elements involved in medical negligence cases: duty, breach, injury and proximate
causation.44

A physician-patient relationship was created when Editha employed the services of the petitioner. As
Edithas physician, petitioner was duty-bound to use at least the same level of care that any reasonably
competent doctor would use to treat a condition under the same circumstances.45 The breach of these
professional duties of skill and care, or their improper performance by a physician surgeon, whereby the
patient is injured in body or in health, constitutes actionable malpractice.46 As to this aspect of medical
malpractice, the determination of the reasonable level of care and the breach thereof, expert testimony
is essential.47 Further, inasmuch as the causes of the injuries involved in malpractice actions are
determinable only in the light of scientific knowledge, it has been recognized that expert testimony is
usually necessary to support the conclusion as to causation.48

In the present case, respondents did not present any expert testimony to support their claim that
petitioner failed to do something which a reasonably prudent physician or surgeon would have done.

Petitioner, on the other hand, presented the testimony of Dr. Augusto M. Manalo, who was clearly an
expert on the subject.

Generally, to qualify as an expert witness, one must have acquired special knowledge of the subject
matter about which he or she is to testify, either by the study of recognized authorities on the subject or
by practical experience.49

Dr. Manalo specializes in gynecology and obstetrics, authored and co-authored various publications on
the subject, and is a professor at the University of the Philippines.50 According to him, his diagnosis of
Edithas case was "Ectopic Pregnancy Interstitial (also referred to as Cornual), Ruptured."51 In stating
that the D&C procedure was not the proximate cause of the rupture of Edithas uterus resulting in her
hysterectomy, Dr. Manalo testified as follows:

Atty. Hidalgo:

Q: Doctor, we want to be clarified on this matter. The complainant had testified here that the D&C
was the proximate cause of the rupture of the uterus. The condition which she found herself in on the
second admission. Will you please tell us whether that is true or not?

A: Yah, I do not think so for two reasons. One, as I have said earlier, the instrument cannot reach the
site of the pregnancy, for it to further push the pregnancy outside the uterus. And, No. 2, I was thinking
a while ago about another reason- well, why I dont think so, because it is the triggering factor for the
rupture, it could havethe rupture could have occurred much earlier, right after the D&C or a few days
after the D&C.

Q: In this particular case, doctor, the rupture occurred to have happened minutes prior to the
hysterectomy or right upon admission on September 15, 1994 which is about 1 months after the
patient was discharged, after the D&C was conducted. Would you tell us whether there is any relation at
all of the D&C and the rupture in this particular instance?

A: I dont think so for the two reasons that I have just mentioned- that it would not be possible for the
instrument to reach the site of pregnancy. And, No. 2, if it is because of the D&C that rupture could have
occurred earlier.52 (Emphases supplied)

Clearly, from the testimony of the expert witness and the reasons given by him, it is evident that the
D&C procedure was not the proximate cause of the rupture of Edithas uterus.

During his cross-examination, Dr. Manalo testified on how he would have addressed Edithas condition
should he be placed in a similar circumstance as the petitioner. He stated:

Atty. Ragonton:

Q: Doctor, as a practicing OB-Gyne, when do you consider that you have done a good, correct and
ideal dilatation and curettage procedure?

A: Well, if the patient recovers. If the patient gets well. Because even after the procedure, even after
the procedure you may feel that you have scraped everything, the patient stops bleeding, she feels well,
I think you should still have some reservations, and wait a little more time.

Q: If you were the OB-Gyne who performed the procedure on patient Editha Ramolete, would it be
your standard practice to check the fetal parts or fetal tissues that were allegedly removed?

A: From what I have removed, yes. But in this particular case, I think it was assumed that it was part of
the meaty mass which was expelled at the time she was urinating and flushed in the toilet. So theres no
way.

Q: There was [sic] some portions of the fetal parts that were removed?

A: No, it was described as scanty scraping if I remember it rightscanty.

Q: And you would not mind checking those scant or those little parts that were removed?

A: Well, the fact that it was described means, I assume that it was checked, no. It was described as
scanty and the color also, I think was described. Because it would be very unusual, even improbable that
it would not be examined, because when you scrape, the specimens are right there before your eyes.
Its in front of you. You can touch it. In fact, some of them will stick to the instrument and therefore to
peel it off from the instrument, you have to touch them. So, automatically they are examined closely.

Q: As a matter of fact, doctor, you also give telephone orders to your patients through telephone?

A: Yes, yes, we do that, especially here in Manila because you know, sometimes a doctor can also be
tied-up somewhere and if you have to wait until he arrive at a certain place before you give the order,
then it would be a lot of time wasted. Because if you know your patient, if you have handled your
patient, some of the symptoms you can interpret that comes with practice. And, I see no reason for not
allowing telephone orders unless it is the first time that you will be encountering the patient. That you
have no idea what the problem is.

Q: But, doctor, do you discharge patients without seeing them?

A: Sometimes yes, depending on how familiar I am with the patient. We are on the question of
telephone orders. I am not saying that that is the idle [sic] thing to do, but I think the reality of present
day practice somehow justifies telephone orders. I have patients whom I have justified and then all of a
sudden, late in the afternoon or late in the evening, would suddenly call they have decided that they will
go home inasmuch as they anticipated that I will discharge them the following day. So, I just call and ask
our resident on duty or the nurse to allow them to go because I have seen that patient and I think I have
full grasp of her problems. So, thats when I make this telephone orders. And, of course before giving
that order I ask about how she feels.53 (Emphases supplied)

From the foregoing testimony, it is clear that the D&C procedure was conducted in accordance with the
standard practice, with the same level of care that any reasonably competent doctor would use to treat
a condition under the same circumstances, and that there was nothing irregular in the way the
petitioner dealt with Editha.

Medical malpractice, in our jurisdiction, is often brought as a civil action for damages under Article
217654 of the Civil Code. The defenses in an action for damages, provided for under Article 2179 of the
Civil Code are:

Art. 2179. When the plaintiffs own negligence was the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was only contributory, the immediate and proximate
cause of the injury being the defendants lack of due care, the plaintiff may recover damages, but the
courts shall mitigate the damages to be awarded.

Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any
efficient intervening cause, produces injury, and without which the result would not have occurred.55
An injury or damage is proximately caused by an act or a failure to act, whenever it appears from the
evidence in the case that the act or omission played a substantial part in bringing about or actually
causing the injury or damage; and that the injury or damage was either a direct result or a reasonably
probable consequence of the act or omission.56

In the present case, the Court notes the findings of the Board of Medicine:

When complainant was discharged on July 31, 1994, herein respondent advised her to return on August
4, 1994 or four (4) days after the D&C. This advise was clear in complainants Discharge Sheet. However,
complainant failed to do so. This being the case, the chain of continuity as required in order that the
doctrine of proximate cause can be validly invoked was interrupted. Had she returned, the respondent
could have examined her thoroughly.57 x x x (Emphases supplied)

Also, in the testimony of Dr. Manalo, he stated further that assuming that there was in fact a
misdiagnosis, the same would have been rectified if Editha followed the petitioners order to return for
a check-up on August 4, 1994. Dr. Manalo stated:

Granting that the obstetrician-gynecologist has been misled (justifiably) up to thus point that there
would have been ample opportunity to rectify the misdiagnosis, had the patient returned, as instructed
for her follow-up evaluation. It was one and a half months later that the patient sought consultation
with another doctor. The continued growth of an ectopic pregnancy, until its eventual rupture, is a
dynamic process. Much change in physical findings could be expected in 1 months, including the
emergence of suggestive ones.58

It is undisputed that Editha did not return for a follow-up evaluation, in defiance of the petitioners
advise. Editha omitted the diligence required by the circumstances which could have avoided the injury.
The omission in not returning for a follow-up evaluation played a substantial part in bringing about
Edithas own injury. Had Editha returned, petitioner could have conducted the proper medical tests and
procedure necessary to determine Edithas health condition and applied the corresponding treatment
which could have prevented the rupture of Edithas uterus. The D&C procedure having been conducted
in accordance with the standard medical practice, it is clear that Edithas omission was the proximate
cause of her own injury and not merely a contributory negligence on her part.

Contributory negligence is the act or omission amounting to want of ordinary care on the part of the
person injured, which, concurring with the defendants negligence, is the proximate cause of the
injury.59 Difficulty seems to be apprehended in deciding which acts of the injured party shall be
considered immediate causes of the accident.60 Where the immediate cause of an accident resulting in
an injury is the plaintiffs own act, which contributed to the principal occurrence as one of its
determining factors, he cannot recover damages for the injury.61 Again, based on the evidence
presented in the present case under review, in which no negligence can be attributed to the petitioner,
the immediate cause of the accident resulting in Edithas injury was her own omission when she did not
return for a follow-up check up, in defiance of petitioners orders. The immediate cause of Edithas
injury was her own act; thus, she cannot recover damages from the injury.

Lastly, petitioner asserts that her right to due process was violated because she was never informed by
either respondents or by the PRC that an appeal was pending before the PRC.62 Petitioner claims that a
verification with the records section of the PRC revealed that on April 15, 1999, respondents filed a
Memorandum on Appeal before the PRC, which did not attach the actual registry receipt but was merely
indicated therein.63

Respondents, on the other hand avers that if the original registry receipt was not attached to the
Memorandum on Appeal, PRC would not have entertained the appeal or accepted such pleading for lack
of notice or proof of service on the other party.64 Also, the registry receipt could not be appended to
the copy furnished to petitioners former counsel, because the registry receipt was already appended to
the original copy of the Memorandum of Appeal filed with PRC.65

It is a well-settled rule that when service of notice is an issue, the rule is that the person alleging that the
notice was served must prove the fact of service. The burden of proving notice rests upon the party
asserting its existence.66 In the present case, respondents did not present any proof that petitioner was
served a copy of the Memorandum on Appeal. Thus, respondents were not able to satisfy the burden of
proving that they had in fact informed the petitioner of the appeal proceedings before the PRC.

In EDI-Staffbuilders International, Inc. v. National Labor Relations Commission,67 in which the National
Labor Relations Commission failed to order the private respondent to furnish the petitioner a copy of
the Appeal Memorandum, the Court held that said failure deprived the petitioner of procedural due
process guaranteed by the Constitution, which could have served as basis for the nullification of the
proceedings in the appeal. The same holds true in the case at bar. The Court finds that the failure of the
respondents to furnish the petitioner a copy of the Memorandum of Appeal submitted to the PRC
constitutes a violation of due process. Thus, the proceedings before the PRC were null and void.

All told, doctors are protected by a special rule of law. They are not guarantors of care. They are not
insurers against mishaps or unusual consequences68 specially so if the patient herself did not exercise
the proper diligence required to avoid the injury.

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated July 4, 2003
in CA-GR SP No. 62206 is hereby REVERSED and SET ASIDE. The Decision of the Board of Medicine dated
March 4, 1999 exonerating petitioner is AFFIRMED. No pronouncement as to costs.

SO ORDERED.