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Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 82465 February 25, 1991
ST. FRANCIS HIGH SCHOOL, as represented by SPS. FERNANDO NANTES AND ROSARIO
LACANDULA, BENJAMIN ILUMIN, TIRSO DE CHAVEZ, LUISITO VINAS, CONNIE ARQUIO AND
PATRIA CADIZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ELEVENTH DIVISION and DR. ROMULO CASTILLO and
LILIA CADIZ,respondents.
Jose C. Flores, Jr. for petitioners.
Jovito E. Talabong for private respondents.

PARAS, J.:p
This is a petition for review of the decision * of the Court of Appeals, the dispositive portion
of which reads:
WHEREFORE, the decision under appeal is hereby affirmed, with the following modifications:
(1) Exemplary damages in the amount of P20,000.00 are hereby awarded to plaintiffs, in
addition to the actual damages of P30,000.00, moral damages of P20,000.00 and attorney's
fees in the amount of P15,000.00 awarded to plaintiffs in the decision under appeal; (2) St.
Francis High School, represented by the Spouses Fernando Nantes and Rosario Lacandula,
and Benjamin Illumin, are hereby held jointly and severally liable with defendants Connie
Arquio, Tirso de Chaves, Luisito Vinas and Patria Cadis for the payment to plaintiffs of the
abovementioned actual damages, moral damages, exemplary damages and attorney's fees,
and for costs; and (3) Defendants Yoly Jaro and Nida Aragones are hereby absolved from
liability, and the case against them, together with their respective counterclaims, is hereby
ordered dismissed.
SO ORDERED. (p. 60, Rollo)
The complaint alleged that Ferdinand Castillo, then a freshman student of Section 1-C at the
St. Francis High School, wanted to join a school picnic undertaken by Class I-B and Class I-C at
Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents spouses Dr. Romulo Castillo
and Lilia Cadiz Castillo, because of short notice, did not allow their son to join but merely
allowed him to bring food to the teachers for the picnic, with the directive that he should go
back home after doing so. However, because of persuasion of the teachers, Ferdinand went
on with them to the beach.
During the picnic and while the students, including Ferdinand, were in the water, one of the
female teachers was apparently drowning. Some of the students, including Ferdinand, came
to her rescue, but in the process, it was Ferdinand himself who drowned. His body was
recovered but efforts to resuscitate him ashore failed. He was brought to a certain Dr. Luna
in Sariaya, Quezon and later to the Mt. Cannel General Hospital where he was pronounced
dead on arrival.
Thereupon, respondent spouses filed a complaint docketed as Civil Case No. 8834, in the
Regional Trial Court, Branch LVIII of Lucena City, against the St. Francis High School,
represented by the spouses Fernando Nantes and Rosario Lacandula, Benjamin Illumin (its
principal), and the teachers: Tirso de Chaves, Luisito Vinas, Connie Arquio, Nida Aragones,
Yoly Jaro, and Patria Cadiz, for Damages which respondents allegedly incurred from the
death of their 13-year old son, Ferdinand Castillo. Contending that the death of their son was
due to the failure of the petitioners to exercise the proper diligence of a good father of the
family in preventing their son's drowning, respondents prayed of actual, moral and
exemplary damages, attorney's fees and expenses for litigation.
The trial court found in favor of the respondents and against petitioners-teachers Arquio, de
Chaves, Vinas, Aragones, Jaro and Cadiz, ordering all of them jointly and severally to pay
respondents the sum of P30,000.00 as actual damages, P20,000.00 as moral damages,
P15,000.00 as attorney's fees, and to pay the costs. The court a quo reasoned:
Taking into consideration the evidence presented, this Court believes that the defendant
teachers namely: Connie Arquio, Luisito Vinas, Tirso de Chaves, Yoly Jaro, Nida Aragones and
Patria Cadiz had failed to exercise the diligence required of them by law under the
circumstances to guard against the harm they had foreseen. (pp. 2930, Rollo)
xxx xxx xxx
While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the picnic
site, the drowning incident had already occurred, such fact does not and cannot excuse them
from their liability. In fact, it could be said that by coming late, they were remiss in their duty
to safeguard the students. (p. 30, Rollo)
The students, young as they were then (12 to 13 years old), were easily attracted to the sea
without aforethought of the dangers it offers. Yet, the precautions and reminders allegedly
performed by the defendants-teachers definitely fell short of the standard required by law
under the circumstances. While the defendants-teachers admitted that some parts of the sea
where the picnic was held are deep, the supposed lifeguards of the children did not even
actually go to the water to test the depth of the particular area where the children would
swim. And indeed the fears of the plaintiffs that the picnic area was dangerous was
confirmed by the fact that three persons during the picnic got drowned at the same time.
Had the defendant teachers made an actual and physical observation of the water before
they allowed the students to swim, they could have found out that the area where the
children were swimming was indeed dangerous. And not only that, the male teachers who
according to the female teachers were there to supervise the children to ensure their safety
were not even at the area where the children were swimming. They were somewhere and as
testified to by plaintiffs' witness they were having a drinking spree. (pp. 55-56, Rollo)
On the other hand, the trial court dismissed the case against the St. Francis High School,
Benjamin Illumin and Aurora Cadorna. Said the court a quo:
As shown and adverted to above, this Court cannot find sufficient evidence showing that the
picnic was a school sanctioned one. Similarly no evidence has been shown to hold
defendants Benjamin Illumin and Aurora Cadorna responsible for the death of Ferdinand
Castillo together with the other defendant teachers. It has been sufficiently shown that
Benjamin Illumin had himself not consented to the picnic and in fact he did not join it. On the
other hand, defendant Aurora Cadorna had then her own class to supervise and in fact she
was not amongst those allegedly invited by defendant Connie Arquio to supervise class I-C to
which Ferdinand Castillo belongs. (p. 30, Rollo)
Both petitioners and respondents appealed to the Court of Appeals. Respondents-spouses
assigned the following errors committed by the trial court:
1. The lower court erred in not declaring the defendant St. Francis High School and its
administrator/principal Benjamin Illumin as equally liable not only for its approved co-
curricular activities but also for those which they unreasonably failed to exercise control and
supervision like the holding of picnic in the dangerous water of Talaan Beach, Sariaya,
Quezon.
2. The lower court erred in not declaring the St. Francis High School and principal Benjamin
Illumin as jointly and solidarily liable with their co-defendants-teachers Rosario Lacandula, et
als., for the tragic death of Ferdinand Castillo in a picnic at Talaan Beach, Sariaya, Quezon,
last March 20, 1982.
3. The lower court erred in not declaring higher amount for actual and moral damages for the
untimely and tragic death of Ferdinand Castillo in favor of plaintiffs-appellants against all the
defendants. (pp. 56-57, Rollo)
The Court of Appeals ruled:
We find plaintiffs-appellants' submission well-taken.
Even were We to find that the picnic in question was not a school-sponsored activity,
nonetheless it cannot be gainsaid that the same was held under the supervision of the
teachers employed by the said school, particularly the teacher in charge of Class I-C to whom
the victim belonged, and those whom she invited to help her in supervising the class during
the picnic. Considering that the court a quo found negligence on the part of the six
defendants-teachers who, as such, were charged with the supervision of the children during
the picnic, the St. Francis High School and the school principal, Benjamin Illumin, are liable
under Article 2176 taken together with the 1st, 4th and 5th paragraphs of Article 2180 of the
Civil Code. They cannot escape liability on the mere excuse that the picnic was not an "extra-
curricular activity of the St. Francis High School." We find from the evidence that, as claimed
by plaintiffs-appellants, the school principal had knowledge of the picnic even from its
planning stage and had even been invited to attend the affair; and yet he did not express any
prohibition against undertaking the picnic, nor did he prescribe any precautionary measures
to be adopted during the picnic. At the least, We must find that the school and the
responsible school officials, particularly the principal, Benjamin Illumin, had acquiesced to
the holding of the picnic.
Under Article 2180, supra, the defendant school and defendant school principal must be
found jointly and severally liable with the defendants-teachers for the damages incurred by
the plaintiffs as a result of the death of their son. It is the rule that in cases where the above-
cited provisions find application, the negligence of the employees in causing the injury or
damage gives rise to a presumption of negligence on the part of the owner and/or manager
of the establishment (in the present case, St. Francis High School and its principal); and while
this presumption is not conclusive, it may be overthrown only by clear and convincing proof
that the owner and/or manager exercised the care and diligence of a good father of a family
in the selection and/or supervision of the employee or employees causing the injury or
damage (in this case, the defendants-teachers). The record does not disclose such evidence
as would serve to overcome the aforesaid presumption and absolve the St. Francis High
School and its principal from liability under the above-cited provisions.
As to the third assigned error interposed by plaintiffs-appellants, while We cannot but
commiserate with the plaintiffs for the tragedy that befell them in the untimely death of
their son Ferdinand Castillo and understand their suffering as parents, especially the victim's
mother who, according to appellants, suffered a nervous breakdown as a result of the
tragedy, We find that the amounts fixed by the court a quo as actual damages and moral
damages (P30,000.00 and P20,000.00, respectively) are reasonable and are those which are
sustained by the evidence and the law.
However, We believe that exemplary or corrective damages in the amount of P20,000.00
may and should be, as it is hereby, imposed in the present case by way of example of
correction for the public good, pursuant to Article 2229 of the Civil Code. (pp. 57-59, Rollo)
On the other hand, petitioners-teachers assigned the following errors committed by the trial
court:
1. ". . . in finding the defendants Connie Arquio, Tirso de Chavez, Luisito Vinas, Nida
Aragones, Yoly Jaro and Patria Cadiz guilty of negligence and jointly and severally liable for
damages such finding not being supported by facts and evidence.
2. ". . . in dismissing the counterclaim interposed by the defendants. (p. 59, Rollo)
On this score, respondent Court ruled:
The main thrust of defendants-appellants appeal is that plaintiffs, the parents of the victim
Ferdinand Castillo, were not able to prove by their evidence that they did not give their son
consent to join the picnic in question. However, We agree with the trial court in its finding
that whether or not the victim's parents had given such permission to their son was
immaterial to the determination of the existence of liability on the part of the defendants for
the damage incurred by the plaintiffs-appellants as a result of the death of their son. What is
material to such a determination is whether or not there was negligence on the part of
defendants vis-a-vis the supervision of the victim's group during the picnic; and, as correctly
found by the trial court, an affirmative reply to this question has been satisfactorily
established by the evidence, as already pointed out.
However, We sustain defendants-appellants insofar as two of the defendants-teachers, Yoly
Jaro and Nida Aragones, are concerned. As to them, the trial court found:
While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the picnic
site, the drowning incident had already occurred, such fact does not and cannot excuse them
from their liability. In fact, it could be said that by coming late, they were remiss in their duty
to safeguard the students.
The evidence shows that these two defendants had satisfactorily explained why they were
late in going to the picnic site, namely, that they had to attend to the entrance examination
being conducted by the school which is part of their duty as teachers thereof. Since they
were not at the picnic site during the occurrence in question, it cannot be said that they had
any participation in the negligence attributable to the other defendants-teachers who failed
to exercise diligence in the supervision of the children during the picnic and which failure
resulted in the drowning of plaintiffs' son. Thus, We may not attribute any act or omission to
the two teachers, Yoly Jaro and Nida Aragones, as to make them liable for the injury caused
to the plaintiffs because of the death of their son resulting from his drowning at the picnic.
Accordingly, they must be absolved from any liability.
As to the second assigned error raised by defendants-appellants, We agree with the court a
quo that the counterclaim must be dismissed for lack of merit. (pp. 59-60, Rollo)
Hence, this petition.
The issues presented by petitioners are:
A) Whether or not there was negligence attributable to the defendants which will warrant
the award of damages to the plaintiffs;
B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to the
case at bar;
C) Whether or not the award of exemplary and moral damages is proper under the
circumstances surrounding the case at bar. (pp. 81-82, Rollo)
In the resolution of January 16, 1989, We gave due course to the petition and required the
parties to submit their respective memoranda.
The petition is impressed with merit.
If at all petitioners are liable for negligence, this is because of their own negligence or the
negligence of people under them. In the instant case however, as will be shown hereunder,
petitioners are neither guilty of their own negligence or guilty of the negligence of those
under them.
Hence, it cannot be said that they are guilty at all of any negligence. Consequently they
cannot be held liable for damages of any kind.
At the outset, it should be noted that respondent spouses, parents of the victim
Ferdinand, allowed their son to join the excursion.
Testimony of Dr. Castillo on cross exam. by Atty. Flores
Q Now, when your son asked you for money to buy food, did you not ask him where he will
bring this?
A I asked him where he was going, he answered, I am going to the picnic, and when I asked
him where, he did not answer, sir.
Q And after giving the money, you did not tell him anything more?
A No more, sir.
Q And after that you just learned that your son join the picnic?
A Yes, sir.
Q And you came to know of it after the news that your son was drowned in the picnic came
to you, is that correct?
A Yes, sir.
Q From 8:00 o'clock in the morning up to 12:00 o'clock noon of March 20, 1982, you did not
know that your son join the picnic?
A No, sir, I did not know.
Q Did you not look for your son during that time?
A I am too busy with my profession, that is why I was not able, sir.
Q You did not ask your wife?
A I did not, sir.
Q And neither did your wife tell you that your son join the picnic?
A Later on after 12:00, sir.
Q And during that time you were too busy that you did not inquire whether your son have
joined that picnic?
A Yes, sir.
(TSN, pp. 16-17, hearing of April 2, 1984 witness Romulo Castillo)
The fact that he gave money to his son to buy food for the picnic even without knowing
where it will be held, is a sign of consent for his son to join the same. Furthermore.
Testimony of Dr. Lazaro on cross examination:
Q How did you conduct this mental and physical examination?
A I have interviewed several persons and the patient herself She even felt guilty about the
death of her son because she cooked adobo for him so he could join the excursion where her
son died of drowning.
Q Why were you able to say she was feeling guilty because she was the one who personally
cooked the adobo for her son?
A It was during the interview that I had gathered it from the patient herself. She was very
sorry had she not allowed her son to join the excursion her son would have not drowned. I
don't know if she actually permitted her son although she said she cooked adobo so he could
join. (Emphasis Supplied) (TSN, p. 19, hearing of April 30, 1984, Dr. Lazaro witness).
Respondent Court of Appeals committed an error in applying Article 2180 of the Civil Code in
rendering petitioner school liable for the death of respondent's son.
Article 2180, par. 4 states that:
The obligation imposed by article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.
xxx xxx xxx
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in
any business or industry.
Under this paragraph, it is clear that before an employer may be held liable for the
negligence of his employee, the act or omission which caused damage or prejudice must
have occurred while an employee was in the performance of his assigned tasks.
In the case at bar, the teachers/petitioners were not in the actual performance of their
assigned tasks. The incident happened not within the school premises, not on a school day
and most importantly while the teachers and students were holding a purely private affair, a
picnic. It is clear from the beginning that the incident happened while some members of the
I-C class of St. Francis High School were having a picnic at Talaan Beach. This picnic had no
permit from the school head or its principal, Benjamin Illumin because this picnic is not a
school sanctioned activity neither is it considered as an extra-curricular activity.
As earlier pointed out by the trial court, mere knowledge by petitioner/principal Illumin of
the planning of the picnic by the students and their teachers does not in any way or in any
manner show acquiescence or consent to the holding of the same. The application therefore
of Article 2180 has no basis in law and neither is it supported by any jurisprudence. If we
were to affirm the findings of respondent Court on this score, employers wig forever be
exposed to the risk and danger of being hailed to Court to answer for the misdeeds or
omissions of the employees even if such act or omission he committed while they are not in
the performance of their duties.
Finally, no negligence could be attributable to the petitioners-teachers to warrant the award
of damages to the respondents-spouses.
Petitioners Connie Arquio the class adviser of I-C, the section where Ferdinand belonged, did
her best and exercised diligence of a good father of a family to prevent any untoward
incident or damages to all the students who joined the picnic.
In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E.
instructors and scout masters who have knowledge in First Aid application and swimming.
Moreover, even respondents' witness, Segundo Vinas, testified that "the defendants
(petitioners herein) had life savers especially brought by the defendants in case of
emergency." (p. 85, Rollo) The records also show that both petitioners Chavez and Vinas did
all what is humanly possible to save the child.
Testimony of Luisito Vinas on cross examination,
Q And when you saw the boy, Ferdinand Castillo, you approached the boy and claim also
having applied first aid on him?
A Yes, sir.
Q And while you were applying the so called first aid, the children were covering you up or
were surrounding you?
A Yes, sir.
Q You were rattled at that time, is it not?
A No, sir.
Q You mean you were in calm and peaceful condition?
A Yes, sir.
Q Despite the fact that the boy was no longer responding to your application of first aid?
A Yes, sir.
Q You have never been disturbed, "nababahala" in the process of your application of the first
aid on the body of Ferdinand Castillo?
A No, sir, because we were attending to the application of first aid that we were doing, sir.
Q After you have applied back to back pressure and which you claimed the boy did not
respond, were you not disturb anyway?
A I was disturbed during that time, sir.
Q For how many minutes have you applied the back to back pressure?
A From 9 to 11 times, sir.
Q You mean 9 to 11 times of having applied the pressure of your body on the body of
Ferdinand Castillo?
A Yes, sir.
Q Will you please describe how you applied a single act of back to back pressure?
A This has been done by placing the boy lay first downwards, then the face was a little bit
facing right and doing it by massaging the back of the child, sir." (TSN, pp. 32-35, hearing of
July 30, 1984)
Testimony of Tirso de Chavez on direct examination
ATTY. FLORES:
Q Who actually applied the first aid or artificial respiration to the child?
A Myself, sir.
Q How did you apply the first aid to the guy?
A The first step that I took, with the help of Mr. Luisito Vinas, was I applied back to back
pressure and took notice of the condition of the child. We placed the feet in a higher
position, that of the head of the child, sir.
Q After you have placed the boy in that particular position, where the feet were on a higher
level than that of the head, what did you do next?
A The first thing that we did, particularly myself, was that after putting the child in that
position, I applied the back to back pressure and started to massage from the waistline up,
but I noticed that the boy was not responding, sir.
Q For how long did you apply this back to back pressure on the boy?
A About 10 seconds, sir.
Q What about Mr. Vinas?
A Almost the same a little longer, for 15 seconds, sir.
Q After you noticed that the boy was not responding, what did you do?
A When we noticed that the boy was not responding, we changed the position of the boy by
placing the child facing upwards laying on the sand then we applied the mouth to mouth
resuscitation, sir. (pp. 92-93, Rollo)
With these facts in mind, no moral nor exemplary damages may be awarded in favor of
respondents-spouses. The case at bar does not fall under any of the grounds to grant moral
damages.
Art. 2217. Moral Damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be recovered if they are
the proximate result of the defendant's wrongful act or omission.
Moreover, as already pointed out hereinabove, petitioners are not guilty of any fault or
negligence, hence, no moral damages can be assessed against them.
While it is true that respondents-spouses did give their consent to their son to join the picnic,
this does not mean that the petitioners were already relieved of their duty to observe the
required diligence of a good father of a family in ensuring the safety of the children. But in
the case at bar, petitioners were able to prove that they had exercised the required diligence.
Hence, the claim for moral or exemplary damages becomes baseless.
PREMISES CONSIDERED, the questioned decision dated November 19, 1987, finding
petitioners herein guilty of negligence and liable for the death of Ferdinand Castillo and
awarding the respondents damages, is hereby SET ASIDE insofar as the petitioners herein are
concerned, but the portion of the said decision dismissing their counterclaim, there being no
merit, is hereby AFFIRMED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. L-68138 May 13, 1991
AGUSTIN Y. GO and THE CONSOLIDATED BANK AND TRUST CORPORATION
(Solidbank), petitioners,
vs.
HONORABLE INTERMEDIATE APPELLATE COURT and FLOVERTO JAZMIN, respondents.
C.M. De los Reyes & Associates for petitioners.
Millora & Maningding Law Offices for private respondent.

FERNAN, C. J.:p
The instant petition for review on certiorari questions the propriety of the respondent
appellate court's award of nominal damages and attorney's fees to private respondent
whose name was used by a syndicate in encashing two U.S. treasury checks at petitioner
bank.
Floverto Jazmin is an American citizen and retired employee of the United States Federal
Government. He had been a visitor in the Philippines since 1972 residing at 34 Maravilla
Street, Mangatarem, Pangasinan. Aspensionado of the U.S. government, he received annuity
checks in the amounts of $ 67.00 for disability and $ 620.00 for retirement through the
Mangatarem post office. He used to encash the checks at the Prudential Bank branch at Clark
Air Base, Pampanga.
In January, 1975, Jazmin failed to receive one of the checks on time thus prompting him to
inquire from the post offices at Mangatarem and Dagupan City. As the result of his inquiries
proved unsatisfactory, on March 4, 1975, Jazmin wrote the U.S. Civil Service Commission,
Bureau of Retirement at Washington, D.C. complaining about the delay in receiving his check.
Thereafter, he received a substitute check which he encashed at the Prudential Bank at Clark
Air Base.
Meanwhile, on April 22, 1975, Agustin Go, in his capacity as branch manager of the then
Solidbank (which later became the Consolidated Bank and Trust Corporation) in Baguio City,
allowed a person named "Floverto Jazmin" to open Savings Account No. BG 5206 by
depositing two (2) U. S. treasury checks Nos. 5-449-076 and 5-448-890 in the respective
amounts of $1810.00 and $913.40
1
equivalent to the total amount of P 20,565.69, both
payable to the order of Floverto Jasmin of Maranilla St., Mangatarem, Pangasinan and drawn
on the First National City Bank, Manila.
The savings account was opened in the ordinary course of business. Thus, the bank, through
its manager Go, required the depositor to fill up the information sheet for new accounts to
reflect his personal circumstances. The depositor indicated therein that he was
Floverto Jazmin with mailing address at Mangatarem, Pangasinan and home address
at Maravilla St., Mangatarem, Pangasinan; that he was a Filipino citizen and a security officer
of the US Army with the rank of a sergeant bearing AFUS Car No. H-2711659; that he was
married to Milagros Bautista; and that his initial deposit was P3,565.35. He wrote CSA No.
138134 under remarks or instructions and left blank the spaces under telephone number,
residence certificate/alien certificate of registration/passport, bank and trade performance
and as to who introduced him to the bank.
2
The depositor's signature specimens were also
taken.
Thereafter, the deposited checks were sent to the drawee bank for clearance. Inasmuch as
Solidbank did not receive any word from the drawee bank, after three (3) weeks, it allowed
the depositor to withdraw the amount indicated in the checks.
On June 29, 1976 or more than a year later, the two dollar cheeks were returned to
Solidbank with the notation that the amounts were altered.
3
Consequently, Go reported the
matter to the Philippine Constabulary in Baguio City.
On August 3, 1976, Jazmin received radio messages requiring him to appear before the
Philippine Constabulary headquarters in Benguet on September 7, 1976 for investigation
regarding the complaint filed by Go against him for estafa by passing altered dollar checks.
Initially, Jazmin was investigated by constabulary officers in Lingayen, Pangasinan and later,
at Camp Holmes, La Trinidad, Benguet. He was shown xerox copies of U.S. Government
checks Nos. 5-449-076 and 5-448-890 payable to the order of Floverto Jasmin in the
respective amounts of $1,810.00 and $913.40. The latter amount was actually for only
$13.40; while the records do not show the unaltered amount of the other treasury check.
Jazmin denied that he was the person whose name appeared on the checks; that he received
the same and that the signature on the indorsement was his. He likewise denied that he
opened an account with Solidbank or that he deposited and encashed therein the said
checks. Eventually, the investigators found that the person named "Floverto Jazmin" who
made the deposit and withdrawal with Solidbank was an impostor.
On September 24, 1976, Jazmin filed with the then Court of First Instance of Pangasinan,
Branch II at Lingayen a complaint against Agustin Y. Go and the Consolidated Bank and Trust
Corporation for moral and exemplary damages in the total amount of P90,000 plus attorney's
fees of P5,000. He alleged therein that Go allowed the deposit of the dollar checks and the
withdrawal of their peso equivalent "without ascertaining the identity of the depositor
considering the highly suspicious circumstances under which said deposit was made; that
instead of taking steps to establish the correct identity of the depositor, Go "immediately and
recklessly filed (the) complaint for estafa through alteration of dollar check" against him; that
Go's complaint was "an act of vicious and wanton recklessness and clearly intended for no
other purpose than to harass and coerce the plaintiff into paying the peso equivalent of said
dollar checks to the CBTC branch office in Baguio City" so that Go would not be "disciplined
by his employer;" that by reason of said complaint, he was "compelled to present and submit
himself" to investigations by the constabulary authorities; and that he suffered humiliation
and embarrassment as a result of the filing of the complaint against him as well as "great
inconvenience" on account of his age (he was a septuagenarian) and the distance between
his residence and the constabulary headquarters. He averred that his peace of mind and
mental and emotional tranquility as a respected citizen of the community would not have
suffered had Go exercised "a little prudence" in ascertaining the identity of the depositor
and, for the "grossly negligent and reckless act" of its employee, the defendant CBTC should
also be held responsible.
4

In their answer, the defendants contended that the plaintiff had no cause of action against
them because they acted in good faith in seeking the "investigative assistance" of the
Philippine Constabulary on the swindling operations against banks by a syndicate which
specialized in the theft, alteration and encashment of dollar checks. They contended that
contrary to plaintiff s allegations, they verified the signature of the depositor and their tellers
conducted an Identity check. As counterclaim, they prayed for the award of P100,000 as
compensatory and moral damages; P20,000 as exemplary damages; P20,000 as attorney's
fees and P5,000 as litigation, incidental expenses and costs.
5

In its decision of March 27, 1978
6
the lower court found that Go was negligent in failing to
exercise "more care, caution and vigilance" in accepting the checks for deposit and
encashment. It noted that the checks were payable to the order of Floverto Jasmin,
Maranilla St., Mangatarem, Pangasinan and not to Floverto Jazmin, Maravilla St.,
Mangatarem, Pangasinan and that the differences in name and address should have put Go
on guard. It held that more care should have been exercised by Go in the encashment of the
U.S. treasury checks as there was no time limit for returning them for clearing unlike in
ordinary checks wherein a two to three-week limit is allowed.
Emphasizing that the main thrust of the complaint was "the failure of the defendants to take
steps to ascertain the identity of the depositor," the court noted that the depositor was
allegedly a security officer while the plaintiff was a retiree-pensioner. It considered as
"reckless" the defendants' filing of the complaint with the Philippine Constabulary noting
that since the article on a fake dollar check ring appeared on July 18, 1976 in the Baguio
Midland Courier, it was only on August 24, 1976 or more than a month after the bank had
learned of the altered checks that it filed the complaint and therefore, it had sufficient time
to ascertain the identity of the depositor.
The court also noted that instead of complying with the Central Bank Circular Letter of
January 17, 1973 requesting all banking institutions to report to the Central Bank all crimes
involving their property within 48 hours from knowledge of the crime, the bank reported the
matter to the Philippine Constabulary.
Finding that the plaintiff had sufficiently shown that prejudice had been caused to him in the
form of mental anguish, moral shock and social humiliation on account of the defendants'
gross negligence, the court, invoking Articles 2176, 2217 and 2219 (10) in conjunction with
Article 21 of the Civil Code, ruled in favor of the plaintiff. The dispositive portion of the
decision states:
WHEREFORE, this Court finds for plaintiff and that he is entitled to the reliefs prayed for in
the following manner: Defendant Agustin Y. Co and the CONSOLIDATED BANK AND TRUST
CORPORATION are hereby ordered to pay, jointly and severally, to the plaintiff the amount of
SIX THOUSAND PESOS (P6,000.00) as moral damages; ONE THOUSAND PESOS (P1,000.00) as
attorney's fees and costs of litigation and to pay the costs and defendant AGUSTIN Y. Go in
addition thereto in his sole and personal capacity to pay the plaintiff the amount of THREE
THOUSAND PESOS (P3,000.00) as exemplary damages, all with interest at six (6) percent per
annum until fully paid.
SO ORDERED.
The defendants appealed to the Court of Appeals. On January 24, 1984, said court (then
named Intermediate Appellate Court) rendered a decision
7
finding as evident negligence
Go's failure to notice the substantial difference in the identity of the depositor and the payee
in the check, concluded that Go's negligence in the performance of his duties was "the
proximate cause why appellant bank was swindled" and that denouncing the crime to the
constabulary authorities "merely aggravated the situation." It ruled that there was a cause of
action against the defendants although Jazmin had nothing to do with the alteration of the
checks, because he suffered damages due to the negligence of Go. Hence, under Article 2180
of the Civil Code, the bank shall be held liable for its manager's negligence.
The appellate court, however, disallowed the award of moral and exemplary damages and
granted nominal damages instead. It explained thus:
While it is true that denouncing a crime is not negligence under which a claim for moral
damages is available, still appellants are liable under the law for nominal damages. The fact
that appellee did not suffer from any loss is of no moment for nominal damages are
adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, maybe vindicated or recognized and not for the purpose of indemnifying the
plaintiff for any loss suffered by him (Article 2221, New Civil Code). These are damages
recoverable where a legal right is technically violated and must be vindicated against an
invasion that has produced no actual present loss of any kind, or where there has been a
breach of contract and no substantial injury or actual damages whatsoever have been or can
be shown (Elgara vs. Sandijas, 27 Phil. 284). They are not intended for indemnification of loss
suffered but for the vindication or recognition of a right violated or invaded (Ventanilla vs.
Centeno, L-14333, January 28, 1961). And, where the plaintiff as in the case at bar, the herein
appellee has established a cause of action, but was not able to adduce evidence showing
actual damages then nominal damages may be recovered (Sia vs. Espenilla CA-G.R. Nos.
45200-45201-R, April 21, 1975). Consequently, since appellee has no right to claim for moral
damages, then he may not likewise be entitled to exemplary damages (Estopa vs. Piansay,
No. L-14503, September 30, 1960). Considering that he had to defend himself in the criminal
charges filed against him, and that he was constrained to file the instant case, the attorney's
fees to be amended (sic) to plaintiff should be increased to P3,000.00.
Accordingly, the appellate court ordered Go and Consolidated Bank and Trust Corporation to
pay jointly and severally Floverto Jazmin only NOMINAL DAMAGES in the sum of Three
Thousand Pesos (P 3,000.00) with interest at six (6%) percent per annum until fully paid and
One Thousand Pesos (P 1,000.00) as attorney's fees and costs of litigation.
Go and the bank filed a motion for the reconsideration of said decision contending that in
view of the finding of the appellate court that "denouncing a crime is not negligence under
which a claim for moral damages is available," the award of nominal damages is unjustified
as they did not violate or invade Jazmin's rights. Corollarily, there being no negligence on the
part of Go, his employer may not be held liable for nominal damages.
The motion for reconsideration having been denied, Go and the bank interposed the instant
petition for review oncertiorari arguing primarily that the employer bank may not be held
"co-equally liable" to pay nominal damages in the absence of proof that it was negligent in
the selection of and supervision over its employee.
8

The facts of this case reveal that damages in the form of mental anguish, moral shock and
social humiliation were suffered by private respondent only after the filing of the petitioners'
complaint with the Philippine Constabulary. It was only then that he had to bear the
inconvenience of travelling to Benguet and Lingayen for the investigations as it was only then
that he was subjected to embarrassment for being a suspect in the unauthorized alteration
of the treasury checks. Hence, it is understandable why petitioners appear to have
overlooked the facts antecedent to the filing of the complaint to the constabulary authorities
and to have put undue emphasis on the appellate court's statement that "denouncing a
crime is not negligence."
Although this Court has consistently held that there should be no penalty on the right to
litigate and that error alone in the filing of a case be it before the courts or the proper police
authorities, is not a ground for moral damages,
9
we hold that under the peculiar
circumstances of this case, private respondent is entitled to an award of damages.
Indeed, it would be unjust to overlook the fact that petitioners' negligence was the root of all
the inconvenience and embarrassment experienced by the private respondent albeit they
happened after the filing of the complaint with the constabulary authorities. Petitioner Go's
negligence in fact led to the swindling of his employer. Had Go exercised the diligence
expected of him as a bank officer and employee, he would have noticed the glaring disparity
between the payee's name and address on the treasury checks involved and the name and
address of the depositor appearing in the bank's records. The situation would have been
different if the treasury checks were tampered with only as to their amounts because the
alteration would have been unnoticeable and hard to detect as the herein altered check
bearing the amount of $ 913.40 shows. But the error in the name and address of the payee
was very patent and could not have escaped the trained eyes of bank officers and
employees. There is therefore, no other conclusion than that the bank through its employees
(including the tellers who allegedly conducted an identification check on the depositor) was
grossly negligent in handling the business transaction herein involved.
While at that stage of events private respondent was still out of the picture, it definitely was
the start of his consequent involvement as his name was illegally used in the illicit
transaction. Again, knowing that its viability depended on the confidence reposed upon it by
the public, the bank through its employees should have exercised the caution expected of it.
In crimes and quasi-delicts, the defendant shall be liable for all damages which are the
natural and probable consequences of the act or omission complained of. It is not necessary
that such damages have been foreseen or could have reasonably been foreseen by the
defendant.
10
As Go's negligence was the root cause of the complained inconvenience,
humiliation and embarrassment, Go is liable to private respondents for damages.
Anent petitioner bank's claim that it is not "co-equally liable" with Go for damages, under the
fifth paragraph of Article 2180 of the Civil Code, "(E)mployers shall be liable for the damages
caused by their employees . . . acting within the scope of their assigned tasks." Pursuant to
this provision, the bank is responsible for the acts of its employee unless there is proof that it
exercised the diligence of a good father of a family to prevent the damage.
11
Hence, the
burden of proof lies upon the bank and it cannot now disclaim liability in view of its own
failure to prove not only that it exercised due diligence to prevent damage but that it was not
negligent in the selection and supervision of its employees.
WHEREFORE, the decision of the respondent appellate court is hereby affirmed. Costs against
the petitioners.
SO ORDERED.

G.R. No. 120554 September 21, 1999
SO PING BUN, petitioner, vs.
COURT OF APPEALS, TEK HUA ENTERPRISES CORP. and MANUEL C. TIONG, respondents.
QUISUMBING, J.:
This petition for certiorari challenges the Decision
1
of the Court of Appeals dated October
10, 1994, and the Resolution
2
dated June 5, 1995, in CA-G.R. CV No. 38784. The appellate
court affirmed the decision of the Regional Trial Court of Manila, Branch 35, except for the
award of attorney's fees, as follows:
WHEREFORE, foregoing considered, the appeal of respondent-appellant So Ping Bun for lack
of merit is DISMISSED. The appealed decision dated April 20, 1992 of the court a quo is
modified by reducing the attorney's fees awarded to plaintiff Tek Hua Enterprising
Corporation from P500,000.00 to P200,000.00.
3

The facts are as follows:
In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into lease
agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Subjects of four (4) lease contracts
were premises located at Nos. 930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila.
Tek Hua used the areas to store its textiles. The contracts each had a one-year term. They
provided that should the lessee continue to occupy the premises after the term, the lease
shall be on a month-to-month basis.
When the contracts expired, the parties did not renew the contracts, but Tek Hua continued
to occupy the premises. In 1976, Tek Hua Trading Co. was dissolved. Later, the original
members of Tek Hua Trading Co. including Manuel C. Tiong, formed Tek Hua Enterprising
Corp., herein respondent corporation.
So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok's grandson,
petitioner So Ping Bun, occupied the warehouse for his own textile business, Trendsetter
Marketing.
On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the
latter of the 25% increase in rent effective September 1, 1989. The rent increase was later on
reduced to 20% effective January 1, 1990, upon other lessees' demand. Again on December
1, 1990, the lessor implemented a 30% rent increase. Enclosed in these letters were new
lease contracts for signing. DCCSI warned that failure of the lessee to accomplish the
contracts shall be deemed as lack of interest on the lessee's part, and agreement to the
termination of the lease. Private respondents did not answer any of these letters. Still, the
lease contracts were not rescinded.
On March 1, 1991, private respondent Tiong sent a letter to petitioner which reads as
follows:
March 1, 1991
Mr. So Ping Bun
930 Soler Street
Binondo, Manila
Dear Mr. So,
Due to my closed (sic) business associate (sic) for three decades with your late grandfather
Mr. So Pek Giok and late father, Mr. So Chong Bon, I allowed you temporarily to use the
warehouse of Tek Hua Enterprising Corp. for several years to generate your personal
business.
Since I decided to go back into textile business, I need a warehouse immediately for my
stocks. Therefore, please be advised to vacate all your stocks in Tek Hua Enterprising Corp.
Warehouse. You are hereby given 14 days to vacate the premises unless you have good
reasons that you have the right to stay. Otherwise, I will be constrained to take measure to
protect my interest.
Please give this urgent matter your preferential attention to avoid inconvenience on your
part.
Very truly yours,
(Sgd) Manuel C. Tiong
MANUEL C. TIONG
President
4

Petitioner refused to vacate. On March 4, 1992, petitioner requested formal contracts of
lease with DCCSI in favor Trendsetter Marketing. So Ping Bun claimed that after the death of
his grandfather, So Pek Giok, he had been occupying the premises for his textile business and
religiously paid rent. DCCSI acceded to petitioner's request. The lease contracts in favor of
Trendsetter were executed.
In the suit for injunction, private respondents pressed for the nullification of the lease
contracts between DCCSI and petitioner. They also claimed damages.
After trial, the trial court ruled:
WHEREFORE, judgment is rendered:
1. Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3, inclusive) all dated March 11,
1991, between defendant So Ping Bun, doing business under the name and style of
"Trendsetter Marketing", and defendant Dee C. Chuan & Sons, Inc. over the premises located
at Nos. 924-B, 924-C, 930 and 930, Int., respectively, Soler Street, Binondo Manila;
2. Making permanent the writ of preliminary injunction issued by this Court on June 21,
1991;
3. Ordering defendant So Ping Bun to pay the aggrieved party, plaintiff Tek Hua Enterprising
Corporation, the sum of P500,000.00, for attorney's fees;
4. Dismissing the complaint, insofar as plaintiff Manuel C. Tiong is concerned, and the
respective counterclaims of the defendant;
5. Ordering defendant So Ping Bun to pay the costs of this lawsuit;
This judgment is without prejudice to the rights of plaintiff Tek Hua Enterprising Corporation
and defendant Dee C. Chuan & Sons, Inc. to negotiate for the renewal of their lease contracts
over the premises located at Nos. 930, 930-Int., 924-B and 924-C Soler Street, Binondo,
Manila, under such terms and conditions as they agree upon, provided they are not contrary
to law, public policy, public order, and morals.
SO ORDERED.
5

Petitioner's motion for reconsideration of the above decision was denied.
On appeal by So Ping Bun, the Court of Appeals upheld the trial court. On motion for
reconsideration, the appellate court modified the decision by reducing the award of
attorney's fees from five hundred thousand (P500,000.00) pesos to two hundred thousand
(P200,000.00) pesos.
Petitioner is now before the Court raising the following issues:
I. WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL COURT'S DECISION
FINDING SO PING BUN GUILTY OF TORTUOUS INTERFERENCE OF CONTRACT?
II. WHETHER THE APPELLATE COURT ERRED IN AWARDING ATTORNEY'S FEES OF P200,000.00
IN FAVOR OF PRIVATE RESPONDENTS.
The foregoing issues involve, essentially, the correct interpretation of the applicable law on
tortuous conduct, particularly unlawful interference with contract. We have to begin,
obviously, with certain fundamental principles on torts and damages.
Damage is the loss, hurt, or harm which results from injury, and damages are the
recompense or compensation awarded for the damage suffered.
6
One becomes liable in an
action for damages for a nontrespassory invasion of another's interest in the private use and
enjoyment of asset if (a) the other has property rights and privileges with respect to the use
or enjoyment interfered with, (b) the invasion is substantial, (c) the defendant's conduct is a
legal cause of the invasion, and (d) the invasion is either intentional and unreasonable or
unintentional and actionable under general negligence rules.
7

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the
part of the third person of the existence of contract; and (3) interference of the third person
is without legal justification or excuse.
8

A duty which the law of torts is concerned with is respect for the property of others, and a
cause of action ex delicto may be predicated upon an unlawful interference by one person of
the enjoyment by the other of his private
property.
9
This may pertain to a situation where a third person induces a party to renege on
or violate his undertaking under a contract. In the case before us, petitioner's Trendsetter
Marketing asked DCCSI to execute lease contracts in its favor, and as a result petitioner
deprived respondent corporation of the latter's property right. Clearly, and as correctly
viewed by the appellate court, the three elements of tort interference above-mentioned are
present in the instant case.
Authorities debate on whether interference may be justified where the defendant acts for
the sole purpose of furthering his own financial or economic interest.
10
One view is that, as a
general rule, justification for interfering with the business relations of another exists where
the actor's motive is to benefit himself. Such justification does not exist where his sole
motive is to cause harm to the other. Added to this, some authorities believe that it is not
necessary that the interferer's interest outweigh that of the party whose rights are invaded,
and that an individual acts under an economic interest that is substantial, not merely de
minimis, such that wrongful and malicious motives are negatived, for he acts in self-
protection.
11
Moreover justification for protecting one's financial position should not be
made to depend on a comparison of his economic interest in the subject matter with that of
others.
12
It is sufficient if the impetus of his conduct lies in a proper business interest rather
than in wrongful motives.
13

As early as Gilchrist vs. Cuddy,
14
we held that where there was no malice in the interference
of a contract, and the impulse behind one's conduct lies in a proper business interest rather
than in wrongful motives, a party cannot be a malicious interferer. Where the alleged
interferer is financially interested, and such interest motivates his conduct, it cannot be said
that he is an officious or malicious intermeddler.
15

In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the
warehouse to his enterprise at the expense of respondent corporation. Though petitioner
took interest in the property of respondent corporation and benefited from it, nothing on
record imputes deliberate wrongful motives or malice on him.
Sec. 1314 of the Civil Code categorically provides also that, "Any third person who induces
another to violate his contract shall be liable for damages to the other contracting party."
Petitioner argues that damage is an essential element of tort interference, and since the trial
court and the appellate court ruled that private respondents were not entitled to actual,
moral or exemplary damages, it follows that he ought to be absolved of any liability,
including attorney's fees.
It is true that the lower courts did not award damages, but this was only because the extent
of damages was not quantifiable. We had a similar situation in Gilchrist, where it was difficult
or impossible to determine the extent of damage and there was nothing on record to serve
as basis thereof. In that case we refrained from awarding damages. We believe the same
conclusion applies in this case.
While we do not encourage tort interferers seeking their economic interest to intrude into
existing contracts at the expense of others, however, we find that the conduct herein
complained of did not transcend the limits forbidding an obligatory award for damages in the
absence of any malice. The business desire is there to make some gain to the detriment of
the contracting parties. Lack of malice, however, precludes damages. But it does not relieve
petitioner of the legal liability for entering into contracts and causing breach of existing ones.
The respondent appellate court correctly confirmed the permanent injunction and
nullification of the lease contracts between DCCSI and Trendsetter Marketing, without
awarding damages. The injunction saved the respondents from further damage or injury
caused by petitioner's interference.
Lastly, the recovery of attorney's fees in the concept of actual or compensatory damages, is
allowed under the circumstances provided for in Article 2208 of the Civil Code.
16
One such
occasion is when the defendant's act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest.
17
But we have consistently held
that the award of considerable damages should have clear factual and legal bases.
18
In
connection with attorney's fees, the award should be commensurate to the benefits that
would have been derived from a favorable judgment. Settled is the rule that fairness of the
award of damages by the trial court calls for appellate review such that the award if far too
excessive can be reduced.
19
This ruling applies with equal force on the award of attorney's
fees. In a long line of cases we said, "It is not sound policy to place in penalty on the right to
litigate. To compel the defeated party to pay the fees of counsel for his successful opponent
would throw wide open the door of temptation to the opposing party and his counsel to
swell the fees to undue proportions."
20

Considering that the respondent corporation's lease contract, at the time when the cause of
action accrued, ran only on a month-to-month basis whence before it was on a yearly basis,
we find even the reduced amount of attorney's fees ordered by the Court of Appeals still
exorbitant in the light of prevailing jurisprudence.
21
Consequently, the amount of two
hundred thousand (P200,000.00) awarded by respondent appellate court should be reduced
to one hundred thousand (P100,000.00) pesos as the reasonable award or attorney's fees in
favor of private respondent corporation.
WHEREFORE, the petition is hereby DENIED. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. CV No. 38784 are hereby AFFIRMED, with MODIFICATION that
the award of attorney's fees is reduced from two hundred thousand (P200,000.00) to one
hundred thousand (P100,000.00) pesos. No pronouncement as to costs.1wp

G.R. No. 159213 July 3, 2013
VECTOR SHIPPING CORPORATION and FRANCISCO SORIANO, Petitioners, vs.
AMERICAN HOME ASSURANCE COMPANY and SULPICIO LINES, INC., Respondents.
D E C I S I O N
BERSAMIN, J.:
Subrogation under Article 2207 of the Civil Code gives rise to a cause of action created by
law. For purposes of the law on the prescription of actions, the period of limitation is ten
years.
The Case
Vector Shipping Corporation (Vector) and Francisco Soriano appeal the decision promulgated
on July 22, 2003,
1
whereby the Court of Appeals (CA) held them jointly and severally liable to
pay P7 ,455,421.08 to American Home Assurance Company (respondent) as and by way of
actual damages on the basis of respondent being the subrogee of its insured Caltex
Philippines, Inc. (Caltex).
Antecedents
Vector was the operator of the motor tanker M/T Vector, while Soriano was the registered
owner of the M/T Vector. Respondent is a domestic insurance corporation.
2

On September 30, 1987, Caltex entered into a contract of Affreightment
3
with Vector for the
transport of Caltexs petroleum cargo through the M/T Vector. Caltex insured the petroleum
cargo with respondent for P7,455,421.08 under Marine Open Policy No. 34-5093-6.
4
In the
evening of December 20, 1987, the M/T Vector and the M/V Doa Paz, the latter a vessel
owned and operated by Sulpicio Lines, Inc., collided in the open sea near Dumali Point in
Tablas Strait, located between the Provinces of Marinduque and Oriental Mindoro. The
collision led to the sinking of both vessels. The entire petroleum cargo of Caltex on board the
M/T Vector perished.
5
On July 12, 1988, respondent indemnified Caltex for the loss of the
petroleum cargo in the full amount of P7,455,421.08.
6

On March 5, 1992, respondent filed a complaint against Vector, Soriano, and Sulpicio Lines,
Inc. to recover the full amount of P7,455,421.08 it paid to Caltex (Civil Case No. 92-620).
7
The
case was raffled to Branch 145 of the Regional Trial Court (RTC) in Makati City.
On December 10, 1997, the RTC issued a resolution dismissing Civil Case No. 92-620 on the
following grounds:
This action is upon a quasi-delict and as such must be commenced within four 4 years from
the day they may be brought. [Art. 1145 in relation to Art. 1150, Civil Code] "From the day
[the action] may be brought" means from the day the quasi-delict occurred. [Capuno v. Pepsi
Cola, 13 SCRA 663]
The tort complained of in this case occurred on 20 December 1987. The action arising
therefrom would under the law prescribe, unless interrupted, on 20 December 1991.
When the case was filed against defendants Vector Shipping and Francisco Soriano on 5
March 1992, the action not having been interrupted, had already prescribed.
Under the same situation, the cross-claim of Sulpicio Lines against Vector Shipping and
Francisco Soriano filed on 25 June 1992 had likewise prescribed.
The letter of demand upon defendant Sulpicio Lines allegedly on 6 November 1991 did not
interrupt the tolling of the prescriptive period since there is no evidence that it was actually
received by the addressee. Under such circumstances, the action against Sulpicio Lines had
likewise prescribed.
Even assuming that such written extra-judicial demand was received and the prescriptive
period interrupted in accordance with Art. 1155, Civil Code, it was only for the 10-day period
within which Sulpicio Lines was required to settle its obligation. After that period lapsed, the
prescriptive period started again. A new 4-year period to file action was not created by the
extra-judicial demand; it merely suspended and extended the period for 10 days, which in
this case meant that the action should be commenced by 30 December 1991, rather than 20
December 1991.
Thus, when the complaint against Sulpicio Lines was filed on 5 March 1992, the action had
prescribed.
PREMISES CONSIDERED, the complaint of American Home Assurance Company and the cross-
claim of Sulpicio Lines against Vector Shipping Corporation and Francisco Soriano are
DISMISSED.
Without costs.
SO ORDERED.
8

Respondent appealed to the CA, which promulgated its assailed decision on July 22, 2003
reversing the RTC.
9
Although thereby absolving Sulpicio Lines, Inc. of any liability to
respondent, the CA held Vector and Soriano jointly and severally liable to respondent for the
reimbursement of the amount of P7,455,421.08 paid to Caltex, explaining:
x x x x
The resolution of this case is primarily anchored on the determination of what kind of
relationship existed between Caltex and M/V Dona Paz and between Caltex and M/T Vector
for purposes of applying the laws on prescription. The Civil Code expressly provides for the
number of years before the extinctive prescription sets in depending on the relationship that
governs the parties.
x x x x
After a careful perusal of the factual milieu and the evidence adduced by the parties, We are
constrained to rule that the relationship that existed between Caltex and M/V Dona Paz is
that of a quasi-delict while that between Caltex and M/T Vector is culpa contractual based on
a Contract of Affreightment or a charter party.
x x x x
On the other hand, the claim of appellant against M/T Vector is anchored on a breach of
contract of affreightment. The appellant averred that M/T Vector committed such act for
having misrepresented to the appellant that said vessel is seaworthy when in fact it is not.
The contract was executed between Caltex and M/T Vector on September 30, 1987 for the
latter to transport thousands of barrels of different petroleum products. Under Article 1144
of the New Civil Code, actions based on written contract must be brought within 10 years
from the time the right of action accrued. A passenger of a ship, or his heirs, can bring an
action based on culpa contractual within a period of 10 years because the ticket issued for
the transportation is by itself a complete written contract (Peralta de Guerrero vs. Madrigal
Shipping Co., L 12951, November 17, 1959).
Viewed with reference to the statute of limitations, an action against a carrier, whether of
goods or of passengers, for injury resulting from a breach of contract for safe carriage is one
on contract, and not in tort, and is therefore, in the absence of a specific statute relating to
such actions governed by the statute fixing the period within which actions for breach of
contract must be brought (53 C.J.S. 1002 citing Southern Pac. R. Co. of Mexico vs. Gonzales
61 P. 2d 377, 48 Ariz. 260, 106 A.L.R. 1012).
Considering that We have already concluded that the prescriptive periods for filing action
against M/V Doa Paz based on quasi delict and M/T Vector based on breach of contract
have not yet expired, are We in a position to decide the appeal on its merit.
We say yes.
x x x x
Article 2207 of the Civil Code on subrogation is explicit that if the plaintiffs property has
been insured, and he has received indemnity from the insurance company for the injury or
loss arising out of the wrong or breach of contract complained of, the insurance company
should be subrogated to the rights of the insured against the wrongdoer or the person who
has violated the contract. Undoubtedly, the herein appellant has the rights of a subrogee to
recover from M/T Vector what it has paid by way of indemnity to Caltex.
WHEREFORE, foregoing premises considered, the decision dated December 10, 1997 of the
RTC of Makati City, Branch 145 is hereby REVERSED. Accordingly, the defendant-appellees
Vector Shipping Corporation and Francisco Soriano are held jointly and severally liable to the
plaintiff-appellant American Home Assurance Company for the payment of P7,455,421.08 as
and by way of actual damages.
SO ORDERED.
10

Respondent sought the partial reconsideration of the decision of the CA, contending that
Sulpicio Lines, Inc. should also be held jointly liable with Vector and Soriano for the actual
damages awarded.
11
On their part, however, Vector and Soriano immediately appealed to
the Court on September 12, 2003.
12
Thus, on October 1, 2003, the CA held in abeyance its
action on respondents partial motion for reconsideration pursuant to its internal rules until
the Court has resolved this appeal.
13

Issues
The main issue is whether this action of respondent was already barred by prescription for
bringing it only on March 5, 1992. A related issue concerns the proper determination of the
nature of the cause of action as arising either from a quasi-delict or a breach of contract.
The Court will not pass upon whether or not Sulpicio Lines, Inc. should also be held jointly
liable with Vector and Soriano for the actual damages claimed.
Ruling
The petition lacks merit.
Vector and Soriano posit that the RTC correctly dismissed respondents complaint on the
ground of prescription. They insist that this action was premised on a quasi-delict or upon an
injury to the rights of the plaintiff, which, pursuant to Article 1146 of the Civil Code, must be
instituted within four years from the time the cause of action accrued; that because
respondents cause of action accrued on December 20, 1987, the date of the collision,
respondent had only four years, or until December 20, 1991, within which to bring its action,
but its complaint was filed only on March 5, 1992, thereby rendering its action already barred
for being commenced beyond the four-year prescriptive period;
14
and that there was no
showing that respondent had made extrajudicial written demands upon them for the
reimbursement of the insurance proceeds as to interrupt the running of the prescriptive
period.
15

We concur with the CAs ruling that respondents action did not yet prescribe. The legal
provision governing this case was not Article 1146 of the Civil Code,
16
but Article 1144 of the
Civil Code, which states:
Article 1144. The following actions must be brought within ten years from the time the cause
of action accrues:
(1)Upon a written contract;
(2)Upon an obligation created by law;
(3)Upon a judgment.
We need to clarify, however, that we cannot adopt the CAs characterization of the cause of
action as based on the contract of affreightment between Caltex and Vector, with the breach
of contract being the failure of Vector to make the M/T Vector seaworthy, as to make this
action come under Article 1144 (1), supra. Instead, we find and hold that that the present
action was not upon a written contract, but upon an obligation created by law. Hence, it
came under Article 1144 (2) of the Civil Code. This is because the subrogation of respondent
to the rights of Caltex as the insured was by virtue of the express provision of law embodied
in Article 2207 of the Civil Code, to wit:
Article 2207. If the plaintiffs property has been insured, and he has received indemnity from
the insurance company for the injury or loss arising out of the wrong or breach of contract
complained of, the insurance company shall be subrogated to the rights of the insured
against the wrongdoer or the person who has violated the contract. If the amount paid by
the insurance company does not fully cover the injury or loss, the aggrieved party shall be
entitled to recover the deficiency from the person causing the loss or injury. (Emphasis
supplied)
The juridical situation arising under Article 2207 of the Civil Code is well explained in Pan
Malayan Insurance Corporation v. Court of Appeals,
17
as follows:
Article 2207 of the Civil Code is founded on the well-settled principle of
subrogation.1wphi1 If the insured property is destroyed or damaged through the fault or
negligence of a party other than the assured, then the insurer, upon payment to the assured,
will be subrogated to the rights of the assured to recover from the wrongdoer to the extent
that the insurer has been obligated to pay. Payment by the insurer to the assured operates
as an equitable assignment to the former of all remedies which the latter may have against
the third party whose negligence or wrongful act caused the loss.1wphi1 The right of
subrogation is not dependent upon, nor does it grow out of, any privity of contract or upon
written assignment of claim. It accrues simply upon payment of the insurance claim by the
insurer [Compania Maritima v. Insurance Company of North America, G.R. No. L-18965,
October 30, 1964, 12 SCRA 213; Firemans Fund Insurance Company v. Jamilla & Company,
Inc., G.R. No. L-27427, April 7, 1976, 70 SCRA 323].
18

Verily, the contract of affreightment that Caltex and Vector entered into did not give rise to
the legal obligation of Vector and Soriano to pay the demand for reimbursement by
respondent because it concerned only the agreement for the transport of Caltexs petroleum
cargo. As the Court has aptly put it in Pan Malayan Insurance Corporation v. Court of
Appeals, supra, respondents right of subrogation pursuant to Article 2207, supra, was "not
dependent upon, nor did it grow out of, any privity of contract or upon written assignment of
claim but accrued simply upon payment of the insurance claim by the insurer."
Considering that the cause of action accrued as of the time respondent actually indemnified
Caltex in the amount of P7,455,421.08 on July 12, 1988,
19
the action was not yet barred by
the time of the filing of its complaint on March 5, 1992,
20
which was well within the 10-year
period prescribed by Article 1144 of the Civil Code.
The insistence by Vector and Soriano that the running of the prescriptive period was not
interrupted because of the failure of respondent to serve any extrajudicial demand was
rendered inconsequential by our foregoing finding that respondents cause of action was not
based on a quasi-delict that prescribed in four years from the date of the collision on
December 20, 1987, as the RTC misappreciated, but on an obligation created by law, for
which the law fixed a longer prescriptive period of ten years from the accrual of the action.
Still, Vector and Soriano assert that respondent had no right of subrogation to begin with,
because the complaint did not allege that respondent had actually paid Caltex for the loss of
the cargo. They further assert that the subrogation receipt submitted by respondent was
inadmissible for not being properly identified by Ricardo C. Ongpauco, respondents witness,
who, although supposed to identify the subrogation receipt based on his affidavit, was not
called to testify in court; and that respondent presented only one witness in the person of
Teresita Espiritu, who identified Marine Open Policy No. 34-5093-6 issued by respondent to
Caltex.
21

We disagree with petitioners assertions. It is undeniable that respondent preponderantly
established its right of subrogation. Its Exhibit C was Marine Open Policy No. 34-5093-6 that
it had issued to Caltex to insure the petroleum cargo against marine peril.
22
Its Exhibit D was
the formal written claim of Caltex for the payment of the insurance coverage
of P7,455,421.08 coursed through respondents adjuster.
23
Its Exhibits E to H were marine
documents relating to the perished cargo on board the M/V Vector that were processed for
the purpose of verifying the insurance claim of Caltex.
24
Its Exhibit I was the subrogation
receipt dated July 12, 1988 showing that respondent paid Caltex P7,455,421.00 as the full
settlement of Caltexs claim under Marine Open Policy No. 34-5093-6.
25
All these exhibits
were unquestionably duly presented, marked, and admitted during the trial.
26
Specifically,
Exhibit C was admitted as an authentic copy of Marine Open Policy No. 34-5093-6, while
Exhibits D, E, F, G, H and I, inclusive, were admitted as parts of the testimony of respondents
witness Efren Villanueva, the manager for the adjustment service of the Manila Adjusters and
Surveyors Company.
27

Consistent with the pertinent law and jurisprudence, therefore, Exhibit I was already enough
by itself to prove the payment of P7,455,421.00 as the full settlement of Caltexs claim.
28
The
payment made to Caltex as the insured being thereby duly documented, respondent became
subrogated as a matter of course pursuant to Article 2207 of the Civil Code. In legal
contemplation, subrogation is the "substitution of another person in the place of the
creditor, to whose rights he succeeds in relation to the debt;" and is "independent of any
mere contractual relations between the parties to be affected by it, and is broad enough to
cover every instance in which one party is required to pay a debt for which another is
primarily answerable, and which in equity and conscience ought to be discharged by the
latter."
29

Lastly, Vector and Soriano argue that Caltex waived and abandoned its claim by not setting
up a cross-claim against them in Civil Case No. 18735, the suit that Sulpicio Lines, Inc. had
brought to claim damages for the loss of the M/V Doa Paz from them, Oriental Assurance
Company (as insurer of the M/T Vector), and Caltex; that such failure to set up its cross- claim
on the part of Caltex, the real party in interest who had suffered the loss, left respondent
without any better right than Caltex, its insured, to recover anything from them, and forever
barred Caltex from asserting any claim against them for the loss of the cargo; and that
respondent was similarly barred from asserting its present claim due to its being merely the
successor-in-interest of Caltex.
The argument of Vector and Soriano would have substance and merit had Civil Case No.
18735 and this case involved the same parties and litigated the same rights and obligations.
But the two actions were separate from and independent of each other. Civil Case No. 18735
was instituted by Sulpicio Lines, Inc. to recover damages for the loss of its M/V Doa Paz. In
contrast, this action was brought by respondent to recover from Vector and Soriano
whatever it had paid to Caltex under its marine insurance policy on the basis of its right of
subrogation. With the clear variance between the two actions, the failure to set up the cross-
claim against them in Civil Case No. 18735 is no reason to bar this action.
WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision
promulgated on July 22, 2003; and ORDERS petitioners to pay the costs of suit.

G.R. No. 82248 January 30, 1992
ERNESTO MARTIN, petitioner, vs.HON. COURT OF APPEALS and MANILA ELECTRIC
COMPANY, respondents.
Roberto M. Cabangis for petitioner.Benjamin R. Reonal for private respondent.
CRUZ, J.:
This case turns on the proper application of the familiar rule that he who alleges must prove
his allegation.
Ernesto Martin was the owner of a private car bearing license plate No. NPA-930. At around
2 o'clock in the morning of May 11, 1982, while being driven by Nestor Martin, it crashed into
a Meralco electric post on Valley Golf Road, in Antipolo, Rizal. The car was wrecked and the
pole severely damaged. Meralco subsequently demanded reparation from Ernesto Martin,
but the demand was rejected. It thereupon sued him for damages in the Regional Trial Court
of Pasig, alleging inter alia that he was liable to it in the sum of P17,352.00 plus attorney's
fees and litigation costs as the employer of Nestor Martin. The petitioner's main defense was
that Nestor Martin was not his employee.
After the plaintiff had rested, the defendant moved to dismiss the complaint on the ground
that no evidence had been adduced to show that Nestor Martin was his employee. The
motion was denied. The case was considered submitted for decision with the express waiver
by the defendant of his right to present his own evidence. The defendant thus did not rebut
the plaintiff's allegation that he was Nestor Martin's employer.
In the decision dated August 27, 1985, Judge Eutropio Migrio held in favor of the plaintiff,
awarding him the amount claimed, with 12% interest, and P4,000.00 attorney's fees, plus
costs.
1
The decision was seasonably elevated to the Court of Appeals, which affirmed
it in toto on February 22, 1988,
2
prompting this petition for review.
The petition has merit.
It is important to stress that the complaint for damages was filed by the private respondent
against only Ernesto Martin as alleged employer of Nestor Martin, the driver of the car at the
time of the accident. Nestor Martin was not impleaded. The action was based on tort under
Article 2180 of the Civil Code, providing in part that:
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.
The above rule is applicable only if there is an employer-employee relationship although it is
not necessary that the employer be engaged in any business or industry. It differs in this
sense from Article 103 of the Revised Penal Code, which requires that the employer be
engaged in an industry to be subsidiarily liable for the felony committed by his employee in
the course of his employment.
Whether or not engaged in any business or industry, the employer under Article 2180 is
liable for the torts committed by his employees within the scope of their assigned task. But it
is necessary first to establish the employment relationship. Once this is done, the plaintiff
must show, to hold the employer liable, that the employee was acting within the scope of his
assigned task when the tort complained of was committed. It is only then that the defendant,
as employer, may find it necessary to interpose the defense of due diligence in the selection
and supervision of the employee as allowed in that article.
3

In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that the
defendant was the employer of Nestor Martin at the time of the accident. The trial court
merely presumed the existence of the employer-employee relationship and held that the
petitioner had not refuted that presumption. It noted that although the defendant alleged
that he was not Nestor Martin's employer, "he did not present any proof to substantiate his
allegation."
As the trial court put it:
There is no need to stretch one's imagination to realize that a car owner entrusts his vehicle
only to his driver or to anyone whom he allows to drive it. Since neither plaintiff nor
defendant has presented any evidence on the status of Nestor Martin, the Court presumes
that he was at the time of the incident, an employee of the defendant. It is elementary that
he who makes an allegation is required to prove the same. Defendant alleges that Nestor
Martin was not his employee but he did not present any proof to substantiate his allegation.
While it is true plaintiff did not present evidence on its allegation that Nestor Martin was
defendant's employee, the Court believes and so holds, that there was no need for such
evidence. As above adverted to, the Court can proceed on the presumption that one who
drives the motor vehicle is an employee of the owner thereof.
A presumption is defined as an inference as to the existence of a fact not actually known,
arising from its usual connection with another which is known,
4
or a conjecture based on
past experience as to what course human affairs ordinarily take.
5
It is either a
presumption juris, or of law, or a presumption hominis, or of fact.
6

There is no law directing the deduction made by the courts below from the particular facts
presented to them by the parties. Such deduction is not among the conclusive presumptions
under Section 2 or the disputable presumptions under Section 3 of Rule 131 of the Rules of
Court. In other words, it is not a presumption juris.
Neither is it a presumption hominis, which is a reasonable deduction from the facts proved
without an express direction of law to that effect.
7
The facts proved, or not denied, viz., the
ownership of the car and the circumstances of the accident, are not enough bases for the
inference that the petitioner is the employer of Nestor Martin.
In the modern urban society, most male persons know how to drive and do not have to
employ others to drive for them unless this is needed for business reasons. Many cannot
afford this luxury, and even if they could, may consider it an unnecessary expense and
inconvenience. In the present case, the more plausible assumption is that Nestor Martin is a
close relative of Ernesto Martin and on the date in question borrowed the car for some
private purpose. Nestor would probably not have been accommodated if he were a mere
employee for employees do not usually enjoy the use of their employer's car at two o'clock in
the morning.
As the employment relationship between Ernesto Martin and Nestor Martin could not be
presumed, it was necessary for the plaintiff to establish it by evidence. Meralco had the
burden of proof, or the duty "to present evidence on the fact in issue necessary to establish
his claim" as required by Rule 131, Section 1 of the Revised Rules of Court. Failure to do this
was fatal to its action.
It was enough for the defendant to deny the alleged employment relationship, without more,
for he was not under obligation to prove this negative
averment. Ei incumbit probatio qui dicit, non qui negat. 8 This Court has consistently applied
the ancient rule that "if the plaintiff, upon whom rests the burden of proving his cause of
action, fails to show in a satisfactory manner the facts upon which he bases his claim, the
defendant is under no obligation to prove his exception or defense."
9

The case of Amor v. Soberano,
10
a Court of Appeals decision not elevated to this Court, was
misapplied by the respondent court in support of the petitioner's position. The vehicle
involved in that case was a six-by-six truck, which reasonably raised the factual presumption
that it was engaged in business and that its driver was employed by the owner of the vehicle.
The case at bar involves a private vehicle as its license plate indicates. No evidence was ever
offered that it was being used for business purposes or that, in any case, its driver at the time
of the accident was an employee of the petitioner.
It is worth mentioning in this connection that
in Filamer Christian Institute v. Court of Appeals,
11
the owner of the jeep involved in the
accident was absolved from liability when it was shown that the driver of the vehicle was not
employed as such by the latter but was a "working scholar" as that term is defined by the
Omnibus Rules Implementing the Labor Code.
12
He was assigned to janitorial duties.
Evidence was introduced to establish the employment relationship but it failed nonetheless
to hold the owner responsible. Significantly, no similar evidence was even presented in the
case at bar, the private respondent merely relying on its mere allegation that Nestor Martin
was the petitioner's employee. Allegation is not synonymous with proof.
The above observations make it unnecessary to examine the question of the driver's alleged
negligence or the lack of diligence on the part of the petitioner in the selection and
supervision of his employee. These questions have not arisen because the employment
relationship contemplated in Article 1860 of the Civil Code has not been established.
WHEREFORE, the petition is GRANTED. The decision of the respondent court is REVERSED,
and Civil Case No. 48045 in the Regional Trial Court of Pasig, Branch 151, is DISMISSED, with
costs against the respondent. It is so ordered.

G.R. No. 180440 December 5, 2012
DR. GENEVIEVE L. HUANG, Petitioner, vs.PHILIPPINE HOTELIERS, INC., DUSIT THANI PUBLIC
CO., LTD. And FIRST LEPANTO TAISHO INSURANCE CORPORATION, Respondents.
D E C I S I O N
PEREZ, J.:
For this Courts resolution is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the Decision
1
of the Court of Appeals in CA-G.R. CV No. 87065 dated 9 August
2007, affirming the Decision
2
of Branch 56 of the Regional Trial Court (RTC) of Makati City in
Civil Case No. 96-1367 dated 21 February 2006, dismissing for lack of merit herein petitioner
Dr. Genevieve L. Huangs Complaint for Damages. Assailed as well is the Court of Appeals
Resolution
3
dated 5 November 2007 denying for lack of merit petitioners Motion for
Reconsideration.
This case stemmed from a Complaint for Damages filed on 28 August 1996 by petitioner Dr.
Genevieve L. Huang
4
against herein respondents Philippine Hoteliers, Inc. (PHI)
5
and Dusit
Thani Public Co., Ltd. (DTPCI),
6
as owners of Dusit Thani Hotel Manila (Dusit Hotel);
7
and co-
respondent First Lepanto Taisho Insurance Corporation (First Lepanto),
8
as insurer of the
aforesaid hotel. The said Complaint was premised on the alleged negligence of respondents
PHI and DTPCIs staff, in the untimely putting off all the lights within the hotels swimming
pool area, as well as the locking of the main entrance door of the area, prompting petitioner
to grope for a way out. While doing so, a folding wooden counter top fell on her head
causing her serious brain injury. The negligence was allegedly compounded by respondents
PHI and DTPCIs failure to render prompt and adequate medical assistance.
Petitioners version of the antecedents of this case is as follows:
On 11 June 1995, Delia Goldberg (Delia), a registered guest of Dusit Hotel, invited her friend,
petitioner Dr. Genevieve L. Huang, for a swim at the hotels swimming pool facility. They
started bathing at around 5:00 p.m. At around 7:00 p.m., the hotels swimming pool
attendant informed them that the swimming pool area was about to be closed. The two
subsequently proceeded to the shower room adjacent to the swimming pool to take a
shower and dress up. However, when they came out of the bathroom, the entire swimming
pool area was already pitch black and there was no longer any person around but the two of
them. They carefully walked towards the main door leading to the hotel but, to their
surprise, the door was locked.
9

Petitioner and Delia waited for 10 more minutes near the door hoping someone would come
to their rescue but they waited in vain. Delia became anxious about their situation so
petitioner began to walk around to look for a house phone. Delia followed petitioner. After
some time, petitioner saw a phone behind the lifeguards counter. While slowly walking
towards the phone, a hard and heavy object, which later turned out to be the folding
wooden counter top, fell on petitioners head that knocked her down almost unconscious.
10

Delia immediately got hold of the house phone and notified the hotel telephone operator of
the incident. Not long after, the hotel staff arrived at the main entrance door of the
swimming pool area but it took them at least 20 to 30 minutes to get inside. When the door
was finally opened, three hotel chambermaids assisted petitioner by placing an ice pack and
applying some ointment on her head. After petitioner had slightly recovered, she requested
to be assisted to the hotels coffee shop to have some rest. Petitioner demanded the services
of the hotel physician.
11

Dr. Violeta Dalumpines (Dr. Dalumpines) arrived. She approached petitioner and introduced
herself as the hotel physician. However, instead of immediately providing the needed
medical assistance, Dr. Dalumpines presented a "Waiver" and demanded that it be signed by
petitioner, otherwise, the hotel management will not render her any assistance. Petitioner
refused to do so.
12

After eating her dinner and having rested for a while, petitioner left the hotels coffee shop
and went home. Thereupon, petitioner started to feel extraordinary dizziness accompanied
by an uncomfortable feeling in her stomach, which lasted until the following day. Petitioner
was constrained to stay at home, thus, missing all her important appointments with her
patients. She also began experiencing "on" and "off" severe headaches that caused her three
(3) sleepless nights.
13

Petitioner, thus, decided to consult a certain Dr. Perry Noble (Dr. Noble), a neurologist from
Makati Medical Center, who required her to have an X-ray and a Magnetic Resonance
Imaging (MRI) tests.
14
The MRI Report
15
dated 23 August 1995 revealed the following
findings:
CONSULTATION REPORT:
MRI examination of the brain shows scattered areas of intraparenchymal contusions and
involving mainly the left middle and posterior temporal and slightly the right anterior
temporal lobe.
Other small areas of contusions with suggestive pertechiae are seen in the left fronto-
parietal, left parieto-occipital and with deep frontal periventricular subcortical and cortical
regions. There is no mass effect nor signs of localized hemorrhagic extravasation.
The ventricles are not enlarged, quite symmetrical without shifts or deformities; the
peripheral sulci are within normal limits.
The C-P angles, petromastoids, sella, extrasellar and retro orbital areas appear normal.
The brainstem is unremarkable.
IMPRESSION: Scattered small intraparenchymal contusions mainly involving the left middle-
posterior temporal lobe and also right medial anterior temporal, both deep frontal
subcortical, left parieto-occipital subcortical and cortical regions. Ischemic etiology not ruled
out. No localized intra - or extracerebral hemorrhage.
16

Petitioner claimed that the aforesaid MRI result clearly showed that her head was bruised.
Based also on the same MRI result, Dr. Noble told her that she has a very serious brain injury.
In view thereof, Dr. Noble prescribed the necessary medicine for her condition.
17

Petitioner likewise consulted a certain Dr. Ofelia Adapon, also a neurologist from Makati
Medical Center, who required her to undergo an Electroencephalogram examination (EEG) to
measure the electrostatic in her brain.
18
Based on its result,
19
Dr. Ofelia Adapon informed her
that she has a serious conditiona permanent one. Dr. Ofelia Adapon similarly prescribed
medicines for her brain injury.
20

Petitioners condition did not get better. Hence, sometime in September 1995, she consulted
another neuro-surgeon by the name of Dr. Renato Sibayan (Dr. Sibayan), who required her to
have an X-ray test.
21
According to petitioner, Dr. Sibayans finding was the same as those of
the previous doctors that she had consultedshe has a serious brain injury.
22

By reason of the unfortunate 11 June 1995 incident inside the hotels swimming pool area,
petitioner also started to feel losing her memory, which greatly affected and disrupted the
practice of her chosen profession.
23
Thus, on 25 October 1995, petitioner, through counsel,
sent a demand letter
24
to respondents PHI and DTPCI seeking payment of an amount not less
than P100,000,000.00 representing loss of earnings on her remaining life span. But,
petitioners demand was unheeded.
In November 1995, petitioner went to the United States of America (USA) for further medical
treatment. She consulted a certain Dr. Gerald Steinberg and a certain Dr. Joel Dokson
25
from
Mount Sinai Hospital who both found that she has "post traumatic-post
concussion/contusion cephalgias-vascular and neuralgia."
26
She was then prescribed to take
some medications for severe pain and to undergo physical therapy. Her condition did not
improve so she returned to the Philippines.
27

Petitioner, once again, consulted Dr. Sibayan, who simply told her to just relax and to
continue taking her medicines. Petitioner also consulted other neurologists, who all advised
her to just continue her medications and to undergo physical therapy for her neck pain.
28

Sometime in 1996, petitioner consulted as well a certain Dr. Victor Lopez (Dr. Lopez), an
ophthalmologist from the Makati Medical Center, because of her poor vision, which she has
experienced for several months.
29
Petitioners Eye Report dated 5 March 1996
30
issued by Dr.
Lopez stated: "IMPRESSION: Posterior vitreous detachment, right eye of floaters." Dr. Lopez
told petitioner that her detached eye is permanent and very serious. Dr. Lopez then
prescribed an eye drop to petitioner.
31

For petitioners frustration to dissipate and to regain her former strength and physical well-
being, she consulted another neuro-surgeon from Makati Medical Center by the name of Dr.
Leopoldo P. Pardo, Jr. (Dr. Pardo, Jr.).
32
She disclosed to Dr. Pardo, Jr. that at the age of 18 she
suffered a stroke due to mitral valve disease and that she was given treatments, which also
resulted in thrombocytopenia. In Dr. Pardo, Jr.s medical evaluation of petitioner dated 15
May 1996,
33
he made the following diagnosis and opinion:
DIAGNOSIS AND OPINION:
This patient sustained a severe head injury in (sic) 11 June 1995 and as a result of which she
developed the following injuries:
1. Cerebral Concussion and Contusion
2. Post-traumatic Epilepsy
3. Post-concussional Syndrome
4. Minimal Brain Dysfunction
5. Cervical Sprain, chronic recurrent
It is my opinion that the symptoms she complained of in the foregoing history are all related
to and a result of the injury sustained on 11 June 1995.
It is further my opinion that the above diagnosis and complaints do materially affect her
duties and functions as a practicing physician and dermatologist, and that she will require
treatment for an undetermined period of time.
The percentage of disability is not calculated at this time and will require further evaluation
and observation.
34

Dr. Pardo, Jr. then advised petitioner to continue her medications.
35

Petitioner likewise consulted a certain Dr. Tenchavez
36
for her follow-up EEG.
37
He similarly
prescribed medicine for petitioners deep brain injury. He also gave her pain killer for her
headache and advised her to undergo physical therapy. Her symptoms, however, persisted
all the more.
38

In 1999, petitioner consulted another neurologist at the Makati Medical Center by the name
of Dr. Martesio Perez (Dr. Perez) because of severe fleeting pains in her head, arms and legs;
difficulty in concentration; and warm sensation of the legs, which symptoms also occurred
after the 11 June 1995 incident. Upon examination, Dr. Perez observed that petitioner has
been experiencing severe pains and she has a slight difficulty in concentration. He likewise
noted that there was a slight spasm of petitioners neck muscle but, otherwise, there was no
objective neurologic finding. The rest of petitioners neurologic examination was essentially
normal.
39

Dr. Perezs neurologic evaluation
40
of petitioner reflected, among others: (1) petitioners past
medical history, which includes, among others, mitral valve stenosis; (2) an interpretation of
petitioners EEG results in October 1995 and in January 1999, i.e., the first EEG showed sharp
waves seen bilaterally more on the left while the second one was normal; and (3)
interpretation of petitioners second MRI result, i.e., petitioner has a permanent damage in
the brain, which can happen either after a head injury or after a stroke. Dr. Perez concluded
that petitioner has post-traumatic or post concussion syndrome.
41

Respondents, on the other hand, denied all the material allegations of petitioner and, in turn,
countered the latters statement of facts, thus:
According to respondents PHI and DTPCI, a sufficient notice had been posted on the glass
door of the hotel leading to the swimming pool area to apprise the people, especially the
hotel guests, that the swimming pool area is open only from 7:00 a.m. to 7:00 p.m.
42
Though
the hotels swimming pool area is open only between the aforestated time, the lights
thereon are kept on until 10:00 p.m. for, (1) security reasons; (2) housekeeping personnel to
do the cleaning of the swimming pool surroundings; and (3) people doing their exercise
routine at the Slimmers World Gym adjacent to the swimming pool area, which was then
open until 10:00 p.m., to have a good view of the hotels swimming pool. Even granting that
the lights in the hotels swimming pool area were turned off, it would not render the area
completely dark as the Slimmers World Gym near it was well-illuminated.
43

Further, on 11 June 1995, at round 7:00 p.m., the hotels swimming pool attendant advised
petitioner and Delia to take their showers as it was already closing time. Afterwards, at
around 7:40 p.m., Pearlie Benedicto-Lipana (Ms. Pearlie), the hotel staff nurse, who was at
the hotel clinic located at the mezzanine floor, received a call from the hotel telephone
operator informing her that there was a guest requiring medical assistance at the hotels
swimming pool area located one floor above the clinic.
44

Immediately, Ms. Pearlie got hold of her medical kit and hurriedly went to the hotels
swimming pool area. There she saw Delia and petitioner, who told her that she was hit on
the head by a folding wooden counter top. Although petitioner looked normal as there was
no indication of any blood or bruise on her head, Ms. Pearlie still asked her if she needed any
medical attention to which petitioner replied that she is a doctor, she was fine and she did
not need any medical attention. Petitioner, instead, requested for a hirudoid cream to which
Ms. Pearlie acceded.
45

At about 8:00 p.m., after attending to petitioner, Ms. Pearlie went back to the hotel clinic to
inform Dr. Dalumpines of the incident at the hotels swimming pool area. But before she
could do that, Dr. Dalumpines had already chanced upon Delia and petitioner at the hotels
coffee shop and the latter reported to Dr. Dalumpines that her head was hit by a folding
wooden counter top while she was inside the hotels swimming pool area. When asked by Dr.
Dalumpines how she was, petitioner responded she is a doctor, she was fine and she was
already attended to by the hotel nurse, who went at the hotels swimming pool area right
after the accident. Dr. Dalumpines then called Ms. Pearlie to verify the same, which the latter
confirmed.
46

Afterwards, Dr. Dalumpines went back to petitioner and checked the latters condition.
Petitioner insisted that she was fine and that the hirudoid cream was enough. Having been
assured that everything was fine, Dr. Dalumpines requested petitioner to execute a
handwritten certification
47
regarding the incident that occurred that night. Dr. Dalumpines
then suggested to petitioner to have an X-ray test. Petitioner replied that it was not
necessary. Petitioner also refused further medical attention.
48

On 13 June 1995, petitioner called up Dr. Dalumpines. The call, however, had nothing to do
with the 11 June 1995 incident. Instead, petitioner merely engaged in small talk with Dr.
Dalumpines while having her daily massage. The two talked about petitioners personal
matters, i.e., past medical history, differences with siblings and family over inheritance and
difficulty in practice. Petitioner even disclosed to Dr. Dalumpines that she once fell from a
horse; that she had a stroke; had hysterectomy and is incapable of having children for her
uterus had already been removed; that she had blood disorder, particularly lack of platelets,
that can cause bleeding; and she had an "on" and "off" headaches. Petitioner oftentimes
called Dr. Dalumpines at the hotel clinic to discuss topics similar to those discussed during
their 13 June 1995 conversation.
49

Also, during one of their telephone conversations, petitioner requested for a certification
regarding the 11 June 1995 incident inside the hotels swimming pool area. Dr. Dalumpines
accordingly issued Certification dated 7 September 1995, which states that:
50

C E R T I F I C A T I O N
This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to an
accident at the poolside at 7:45PM on 11 June 1995.
Same records show that there, she saw petitioner who claimed the folding countertop fell on
her head when she lifted it to enter the lifeguards counter to use the phone. She asked for
Hirudoid.
The same evening petitioner met Dr. Dalumpines at the Coffee Shop. After narrating the
poolside incident and declining Dr. Dalumpines offer of assistance, she reiterated that the
Hirudoid cream was enough and that petitioner being a doctor herself, knew her condition
and she was all right.
This certification is given upon the request of petitioner for whatever purpose it may serve, 7
September 1995 at Makati City.
51
(Emphasis supplied).
Petitioner personally picked up the afore-quoted Certification at the hotel clinic without any
objection as to its contents.
52

From 11 June 1995 until 7 September 1995, the hotel clinic never received any complaint
from petitioner regarding the latters condition. The hotel itself neither received any written
complaint from petitioner.
53

After trial, the court a quo in its Decision dated 21 February 2006 dismissed petitioners
Complaint for lack of merit.
The trial court found petitioners testimony self-serving, thus, devoid of credibility. Petitioner
failed to present any evidence to substantiate her allegation that the lights in the hotels
swimming pool area were shut off at the time of the incident. She did not even present her
friend, Delia, to corroborate her testimony. More so, petitioners testimony was contradicted
by one of the witnesses presented by the respondents who positively declared that it has
been a normal practice of the hotel management not to put off the lights until 10:00 p.m. to
allow the housekeepers to do the cleaning of the swimming pool surroundings, including the
toilets and counters. Also, the lights were kept on for security reasons and for the people in
the nearby gym to have a good view of the swimming pool while doing their exercise routine.
Besides, there was a remote possibility that the hotels swimming pool area was in complete
darkness as the aforesaid gym was then open until 10:00 p.m., and the lights radiate to the
hotels swimming pool area. As such, petitioner would not have met the accident had she
only acted with care and caution.
54

The trial court further struck down petitioners contention that the hotel management did
not extend medical assistance to her in the aftermath of the accident. Records showed that
the hotel management immediately responded after being notified of the accident. The hotel
nurse and the two chambermaids placed an ice pack on petitioners head. They were willing
to extend further emergency assistance but petitioner refused and merely asked for a
hirudoid cream. Petitioner even told them she is a doctor and she was fine. Even the medical
services offered by the hotel physician were turned down by petitioner. Emphatically,
petitioner cannot fault the hotel for the injury she sustained as she herself did not heed the
warning that the swimming pool area is open only from 7:00 a.m. to 7:00 p.m. As such, since
petitioners own negligence was the immediate and proximate cause of her injury, she
cannot recover damages.
55

The trial court similarly observed that the records revealed no indication that the head injury
complained of by petitioner was the result of the alleged 11 June 1995 accident. Firstly,
petitioner had a past medical history which might have been the cause of her recurring brain
injury. Secondly, the findings of Dr. Perez did not prove a causal relation between the 11 June
1995 accident and the brain damage suffered by petitioner. Even Dr. Perez himself testified
that the symptoms being experienced by petitioner might have been due to factors other
than the head trauma she allegedly suffered. It bears stressing that petitioner had been
suffering from different kinds of brain problems since she was 18 years old, which may have
been the cause of the recurring symptoms of head injury she is experiencing at present.
Absent, therefore, of any proof establishing the causal relation between the injury she
allegedly suffered on 11 June 1995 and the head pains she now suffers, her claim must fail.
Thirdly, Dr. Teresita Sanchezs (Dr. Sanchez) testimony cannot be relied upon since she
testified on the findings and conclusions of persons who were never presented in court. Ergo,
her testimony thereon was hearsay. Fourthly, the medical reports/evaluations/certifications
issued by myriads of doctors whom petitioner sought for examination or treatment were
neither identified nor testified to by those who issued them. Being deemed as hearsay, they
cannot be given probative value. Even assuming that petitioner suffered head injury as a
consequence of the 11 June 1995 accident, she cannot blame anyone but herself for staying
at the hotels swimming pool area beyond its closing hours and for lifting the folding wooden
counter top that eventually hit her head.
56

For petitioners failure to prove that her serious and permanent injury was the result of the
11 June 1995 accident, thus, her claim for actual or compensatory damages, loss of income,
moral damages, exemplary damages and attorneys fees, must all fail.
57

With regard to respondent First Lepantos liability, the trial court ruled that under the
contract of insurance, suffice it to state that absent any cause for any liability against
respondents PHI and DTPCI, respondent First Lepanto cannot be made liable thereon.
Dissatisfied, petitioner elevated the matter to the Court of Appeals with the following
assignment of errors: (1) the trial court erred in finding that the testimony of petitioner is
self-serving and thus void of credibility; (2) the trial court erred in applying the doctrine of
proximate cause in cases of breach of contract and even assuming arguendo that the
doctrine is applicable, petitioner was able to prove by sufficient evidence the causal
connection between her injuries and respondents PHI and DTPCIs negligent act; and (3) the
trial court erred in holding that petitioner is not entitled to damages.
58

On 9 August 2007, the Court of Appeals rendered a Decision affirming the findings and
conclusions of the trial court.
The Court of Appeals ratiocinated in this wise:
At the outset, it is necessary for our purpose to determine whether to decide this case on the
theory that herein respondents PHI and DTPCI are liable for breach of contract or on the
theory of quasi-delict.
x x x x
It cannot be gainsaid that herein petitioners use of the hotels pool was only upon the
invitation of Delia, the hotels registered guest. As such, she cannot claim contractual
relationship between her and the hotel. Since the circumstances of the present case do not
evince a contractual relation between petitioner and respondents, the rules on quasi-delict ,
thus, govern.
The pertinent provision of Art. 2176 of the Civil Code which states: "Whoever by act or
omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called quasi-delict."
A perusal of Article 2176 shows that obligations arising from quasi-delict or tort, also known
as extra-contractual obligations, arise only between parties not otherwise bound by contract,
whether express or implied. Thus, to sustain a claim liability under quasi-delict, the following
requisites must concur: (a) damages suffered by the plaintiff; (b) fault or negligence of the
defendant, or some other person for whose acts he must respond; and (c) the connection of
cause and effect between the fault or negligence of the defendant and the damages incurred
by the plaintiff.
Viewed from the foregoing, the question now is whether respondents PHI and DTPCI and its
employees were negligent? We do not think so. Several factors militate against petitioners
contention.
One. Petitioner recognized the fact that the pool areas closing time is 7:00 p.m.. She, herself,
admitted during her testimony that she was well aware of the sign when she and Delia
entered the pool area. Hence, upon knowing, at the outset, of the pools closing time, she
took the risk of overstaying when she decided to take shower and leave the area beyond the
closing hour. In fact, it was only upon the advise of the pool attendants that she thereafter
took her shower.
Two. She admitted, through her certification that she lifted the wooden bar countertop,
which then fell onto her head. The admission in her certificate proves the circumstances
surrounding the occurrence that transpired on the night of 11 June 1995. This is contrary to
her assertion in the complaint and testimony that, while she was passing through the counter
door, she was suddenly knocked out by a hard and heavy object. In view of the fact that she
admitted having lifted the counter top, it was her own doing, therefore, that made the
counter top fell on to her head.
Three. We cannot likewise subscribe to petitioners assertion that the pool area was totally
dark in that she herself admitted that she saw a telephone at the counter after searching for
one. It must be noted that petitioner and Delia had walked around the pool area with ease
since they were able to proceed to the glass entrance door from shower room, and back to
the counter area where the telephone was located without encountering any untoward
incident. Otherwise, she could have easily stumbled over, or slid, or bumped into something
while searching for the telephone. This negates her assertion that the pool area was
completely dark, thereby, totally impairing her vision.
x x x x
The aforementioned circumstances lead us to no other conclusion than that the proximate
and immediate cause of the injury of petitioner was due to her own negligence.
Moreover, petitioner failed to sufficiently substantiate that the medical symptoms she is
currently experiencing are the direct result of the head injury she sustained on 11 June 1995
as was aptly discussed in the lower courts findings.
x x x x
It bears stressing that in civil cases, the law requires that the party who alleges a fact and
substantially asserts the affirmative of the issue has the burden of proving it. Hence, for
petitioner to be entitled to damages, she must show that she had suffered an actionable
injury. Regrettably, petitioner failed in this regard.
59
(Emphasis supplied).
Petitioners Motion for Reconsideration was denied for lack of merit in a Resolution dated 5
November 2007.
Hence, this Petition raising the following issues:
(1) Whether or not the findings of fact of the trial court and of the Court of Appeals are
conclusive in this case.
(2) Whether or not herein respondents PHI and DTPCI are responsible by implied contract to
exercise due care for the safety and welfare of the petitioner.
(3) Whether or not the cause of action of the petitioner can be based on both breach of
contract and tort.
(4) Whether or not it is respondents PHI and DTPCI and its employees who are liable to the
petitioner for negligence, applying the well-established doctrines of res ipsa loquitur and
respondeat superior.
(5) Whether the petitioners debilitating and permanent injuries were a result of the accident
she suffered at the hotel on 11 June 1995.
(6) Whether or not the petitioner is entitled to the payment of damages, attorneys fees,
interest, and the costs of suit.
(7) Whether or not the respondent insurance company is liable, even directly, to the
petitioner.
(8) Whether or not petitioners motion for reconsideration of the decision of the Court of
Appeals is pro forma.
60

Petitioner argues that the rule that "findings of fact of the lower courts are conclusive and
must be respected on appeal" finds no application herein because this case falls under the
jurisprudentially established exceptions. Moreover, since the rationale behind the afore-
mentioned rule is that "the trial judge is in a vantage point to appreciate the conduct and
behavior of the witnesses and has the unexcelled opportunity to evaluate their testimony,"
one logical exception to the rule that can be deduced therefrom is when the judge who
decided the case is not the same judge who heard and tried the case.
Petitioner further faults the Court of Appeals in ruling that no contractual relationship
existed between her and respondents PHI and DTPCI since her use of the hotels swimming
pool facility was only upon the invitation of the hotels registered guest. On the contrary,
petitioner maintains that an implied contract existed between them in view of the fact that
the hotel guest status extends to all those who avail of its servicesits patrons and invitees.
It follows then that all those who patronize the hotel and its facilities, including those who
are invited to partake of those facilities, like petitioner, are generally regarded as guests of
the hotel. As such, respondents PHI and DTPCI are responsible by implied contract for the
safety and welfare of petitioner while the latter was inside their premises by exercising due
care, which they failed to do.
Petitioner even asserts that the existence of a contract between the parties does not bar any
liability for tort since the act that breaks a contract may also be a tort. Hence, the concept of
change of theory of cause of action pointed to by respondents is irrelevant.
Petitioner similarly avows that the doctrines of res ipsa loquitur and respondeat superior are
applicable in this case. She argues that a person who goes in a hotel without a "bukol" or
hematoma and comes out of it with a "bukol" or hematoma is a clear case of res ipsa
loquitur. It was an accident caused by the fact that the hotel staff was not present to lift the
heavy counter top for petitioner as is normally expected of them because they negligently
locked the main entrance door of the hotels swimming pool area. Following the doctrine of
res ipsa loquitur, respondents PHI and DTPCIs negligence is presumed and it is incumbent
upon them to prove otherwise but they failed to do so. Further, respondents PHI and DTPCI
failed to observe all the diligence of a good father of a family in the selection and supervision
of their employees, hence, following the doctrine of respondeat superior, they were liable for
the negligent acts of their staff in not verifying if there were still people inside the swimming
pool area before turning off the lights and locking the door. Had respondents PHI and DTPCIs
employees done so, petitioner would not have been injured. Since respondents PHI and
DTPCIs negligence need not be proved, the lower courts erred in shifting the burden to
petitioner and, thereafter, holding the hotel and its employees not negligent for petitioners
failure to prove their negligence. Moreover, petitioner alleges that there was no contributory
negligence on her part for she did not do anything that could have contributed to her injury.
And, even if there was, the same does not bar recovery.
Petitioner equally declares that the evidence on record, including the objective medical
findings, had firmly established that her permanent debilitating injuries were the direct result
of the 11 June 1995 accident inside the hotels swimming pool area. This fact has not been
totally disputed by the respondents. Further, the medical experts who had been consulted by
petitioner were in unison in their diagnoses of her condition. Petitioner was also able to
prove that the falling of the folding wooden counter top on her head while she was at the
hotels swimming pool area was the cause of her head, eye and neck injuries.
Petitioner reiterates her claim for an award of damages, to wit: actual, including loss of
income; moral, exemplary; as well as attorneys fees, interest and costs of suit. She states
that respondents PHI and DTPCI are liable for quasi-delict under Articles 19, 2176 and 2180
of the New Civil Code. At the same time, they are liable under an implied contract for they
have a public duty to give due courtesy, to exercise reasonable care and to provide safety to
hotel guests, patrons and invitees. Respondent First Lepanto, on the other hand, is directly
liable under the express contract of insurance.
Lastly, petitioner contends that her Motion for Reconsideration before the Court of Appeals
was not pro forma for it specifically pointed out the alleged errors in the Court of Appeals
Decision.
The instant Petition is devoid of merit.
Primarily, only errors of law and not of facts are reviewable by this Court in a Petition for
Review on Certiorari under Rule 45 of the Rules of Court.
61
This Court is not a trier of facts
and it is beyond its function to re-examine and weigh anew the respective evidence of the
parties.
62
Besides, this Court adheres to the long standing doctrine that the factual findings of
the trial court, especially when affirmed by the Court of Appeals, are conclusive on the
parties and this Court.
63
Nonetheless, this Court has, at times, allowed exceptions thereto, to
wit:
(a) When the findings are 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 findings of facts are conflicting;
(f) When in making its findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;
(g) When the Court of Appeals findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific evidence on which they are
based;
(i) When the facts set forth in the petition as well as in the petitioners main and reply briefs
are not disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or
(k) When the Court of Appeals manifestly overlooked certain relevant facts not disputed by
the parties, which, if properly considered, would justify a different conclusion.
64

Upon meticulous perusal of the records, however, this Court finds that none of these
exceptions is obtaining in this case. No such justifiable or compelling reasons exist for this
Court to depart from the general rule. This Court will not disturb the factual findings of the
trial court as affirmed by the Court of Appeals and adequately supported by the evidence on
record.
Also, this Court will not review the factual findings of the trial court simply because the judge
who heard and tried the case was not the same judge who penned the decision. This fact
alone does not diminish the veracity and correctness of the factual findings of the trial
court.
65
Indeed, "the efficacy of a decision is not necessarily impaired by the fact that its
writer only took over from a colleague who had earlier presided at the trial, unless there is
showing of grave abuse of discretion in the factual findings reached by him."
66
In this case,
there was none.
It bears stressing that in this jurisdiction there is a disputable presumption that the trial
courts decision is rendered by the judge in the regular performance of his official duties.
While the said presumption is only disputable, it is satisfactory unless contradicted or
overcame by other evidence. Encompassed in this presumption of regularity is the
presumption that the trial court judge, in resolving the case and drafting the decision,
reviewed, evaluated, and weighed all the evidence on record. That the said trial court judge
is not the same judge who heard the case and received the evidence is of little consequence
when the records and transcripts of stenographic notes (TSNs) are complete and available for
consideration by the former,
67
just like in the present case.
Irrefragably, the fact that the judge who penned the trial courts decision was not the same
judge who heard the case and received the evidence therein does not render the findings in
the said decision erroneous and unreliable. While the conduct and demeanor of witnesses
may sway a trial court judge in deciding a case, it is not, and should not be, his only
consideration. Even more vital for the trial court judges decision are the contents and
substance of the witnesses testimonies, as borne out by the TSNs, as well as the object and
documentary evidence submitted and made part of the records of the case.
68

This Court examined the records, including the TSNs, and found no reason to disturb the
factual findings of both lower courts. This Court, thus, upholds their conclusiveness.
In resolving the second and third issues, a determination of the cause of action on which
petitioners Complaint for Damages was anchored upon is called for.
Initially, petitioner was suing respondents PHI and DTPCI mainly on account of their
negligence but not on any breach of contract. Surprisingly, when the case was elevated on
appeal to the Court of Appeals, petitioner had a change of heart and later claimed that an
implied contract existed between her and respondents PHI and DTPCI and that the latter
were liable for breach of their obligation to keep her safe and out of harm. This allegation
was never an issue before the trial court. It was not the cause of action relied upon by the
petitioner not until the case was before the Court of Appeals. Presently, petitioner claims
that her cause of action can be based both on quasi-delict and breach of contract.
A perusal of petitioners Complaint evidently shows that her cause of action was based solely
on quasi-delict. Telling are the following allegations in petitioners Complaint:
6. THAT, in the evening of 11 June 1995, between the hours from 7:00 to 8:00 oclock, after
herein petitioner and her friend from New York, Delia, the latter being then a Hotel guest,
were taking their shower after having a dip in the hotels swimming pool, without any notice
or warning, the Hotels staff put off all the lights within the pool area including the lights on
the hallway and also locked the main entrance door of the pool area, x x x;
7. THAT, Hotel guest Delia started to panic while petitioner pacified her by telling her not to
worry as they would both find their way out. Petitioner knowing that within the area there is
a house phone, started to look around while Delia was following her, eventually petitioner
saw a phone behind the counter x x x, that while slowly moving on towards the phone on a
stooping manner due to the darkness CAUSED BY UNTIMELY AND NEGLIGENTLY PUTTING
OFF WITH THE LIGHTS BY THE HEREIN RESPONDENTS PHI AND DTPCIS EMPLOYEE while
passing through the open counter door with its Folding Counter Top also opened, x x x, a
hard and heavy object fell onto the head of the petitioner that knocked her down almost
unconscious which hard and heavy object turned out to be the Folding Counter Top;
8. THAT, Delia immediately got hold of the house phone and notified the Hotel Telephone
Operator about the incident, immediately the hotel staffs (sic) arrived but they were
stranded behind the main door of the pool entrance and it too (sic) them more than twenty
(20) minutes to locate the hotel maintenance employee who holds the key of the said main
entrance door;
9. THAT, when the door was opened, two Hotel Chamber Maids assisted the petitioner to get
out of the counter door. Petitioner being a Physician tried to control her feelings although
groggy and requested for a HURIDOID, a medicine for HEMATOMA, as a huge lump
developed on her head while the two Chamber Maids assisted petitioner by holding the bag
of ice on her head and applying the medicine on the huge lump;
10. THAT, petitioner after having recovered slightly from her nightmare, though still feeling
weak, asked to be assisted to the Hotel Coffee Shop to take a rest but requested for the
hotels Physician. Despite her insistent requests, the Dusit Hotel refused to lift a finger to
assists petitioner who was then in distress until a lady approached and introduced herself as
the Hotels house Doctor. Instead however of assisting petitioner by asking her what kind of
assistance the Hotel could render, in a DISCOURTEOUS MANNER presented instead a paper
and demanding petitioner to affix her signature telling her that the Hotel Management
would only assists and answer for all expenses incurred if petitioner signs the paper
presented, but she refused and petitioner instead wrote a marginal note on the said paper
stating her reason therefore, said paper later on turned out to be a WAIVER OF RIGHT or
QUIT CLAIM;
x x x x
14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCIs gross
negligence despite medical assistance, petitioner started to feel losing her memory that
greatly affected and disrupted the practice of her chosen profession x x x.
x x x x
19. THAT, due to respondents PHI and DTPCIs gross negligence as being narrated which
caused petitioner to suffer sleepless nights, depression, mental anguish, serious anxiety,
wounded feelings, and embarrassment with her Diplomate friends in the profession and
industry, her social standing in the community was greatly affected and hence, respondents
PHI and DTPCI must be imposed the hereunder damages, prayed for x x x and Artile (sic)
2176 and 2199 of the New Civil Code of the Philippines x x x.
x x x x
22. THAT, as to Moral, Exemplary and Actual Damages, as well as petitioners Loss of Income,
the amounts are stated in its prayer hereunder.
69

It is clear from petitioners allegations that her Complaint for Damages was predicated on the
alleged negligence of respondents PHI and DTPCIs staff in the untimely putting off of all the
lights within the hotels swimming pool area, as well as the locking of its main door,
prompting her to look for a way out leading to the fall of the folding wooden counter top on
her head causing her serious brain injury. The said negligence was allegedly compounded by
respondents PHI and DTPCIs failure to render prompt and adequate medical assistance.
These allegations in petitioners Complaint constitute a cause of action for quasi-delict, which
under the New Civil Code is defined as an act, or omission which causes damage to another,
there being fault or negligence.
70

It is evident from petitioners Complaint and from her open court testimony that the reliance
was on the alleged tortious acts committed against her by respondents PHI and DTPCI,
through their management and staff. It is now too late in the day to raise the said argument
for the first time before this Court.
71

Petitioners belated reliance on breach of contract as her cause of action cannot be
sanctioned by this Court. Well-settled is the rule that a party is not allowed to change the
theory of the case or the cause of action on appeal. Matters, theories or arguments not
submitted before the trial court cannot be considered for the first time on appeal or
certiorari.
72
When a party adopts a certain theory in the court below, he will not be
permitted to change his theory on appeal for to permit him to do so would not only be unfair
to the other party but it would also be offensive to the basic rules of fair play, justice and due
process.
73
Hence, a party is bound by the theory he adopts and by the cause of action he
stands on and cannot be permitted after having lost thereon to repudiate his theory and
cause of action and adopt another and seek to re-litigate the matter anew either in the same
forum or on appeal.
74

In that regard, this Court finds it significant to take note of the following differences between
quasi-delict (culpa aquilina) and breach of contract (culpa contractual). In quasi-delict,
negligence is direct, substantive and independent, while in breach of contract, negligence is
merely incidental to the performance of the contractual obligation; there is a pre-existing
contract or obligation.
75
In quasi-delict, the defense of "good father of a family" is a complete
and proper defense insofar as parents, guardians and employers are concerned, while in
breach of contract, such is not a complete and proper defense in the selection and
supervision of employees.
76
In quasi- delict , there is no presumption of negligence and it is
incumbent upon the injured party to prove the negligence of the defendant, otherwise, the
formers complaint will be dismissed, while in breach of contract, negligence is presumed so
long as it can be proved that there was breach of the contract and the burden is on the
defendant to prove that there was no negligence in the carrying out of the terms of the
contract; the rule of respondeat superior is followed.
77

Viewed from the foregoing, petitioners change of theory or cause of action from quasi-delict
to breach of contract only on appeal would necessarily cause injustice to respondents PHI
and DTPCI. First, the latter will have no more opportunity to present evidence to contradict
petitioners new argument. Second, the burden of proof will be shifted from petitioner to
respondents PHI and DTPCI. Petitioners change of theory from quasi-delict to breach
ofcontract must be repudiated.
As petitioners cause of action is based on quasi-delict, it is incumbent upon her to prove the
presence of the following requisites before respondents PHI and DTPCI can be held liable, to
wit: (a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some
other person for whose acts he must respond; and (c) the connection of cause and effect
between the fault or negligence of the defendant and the damages incurred by the
plaintiff.
78
Further, since petitioners case is for quasi-delict , the negligence or fault should
be clearly established as it is the basis of her action.
79
The burden of proof is upon petitioner.
Section 1, Rule 131 of the Rules of Court provides that "burden of proof is the duty of a party
to present evidence on the facts in issue necessary to establish his claim or defense by the
amount of evidence required by law." It is then up for the plaintiff to establish his cause of
action or the defendant to establish his defense. Therefore, if the plaintiff alleged in his
complaint that he was damaged because of the negligent acts of the defendant, he has the
burden of proving such negligence. It is even presumed that a person takes ordinary care of
his concerns. The quantum of proof required is preponderance of evidence.
80

In this case, as found by the trial court and affirmed by the Court of Appeals, petitioner
utterly failed to prove the alleged negligence of respondents PHI and DTPCI. Other than
petitioners self-serving testimony that all the lights in the hotels swimming pool area were
shut off and the door was locked, which allegedly prompted her to find a way out and in
doing so a folding wooden counter top fell on her head causing her injury, no other evidence
was presented to substantiate the same. Even her own companion during the night of the
accident inside the hotels swimming pool area was never presented to corroborate her
allegations. Moreover, petitioners aforesaid allegations were successfully rebutted by
respondents PHI and DTPCI. Here, we quote with conformity the observation of the trial
court, thus:
x x x Besides not being backed up by other supporting evidence, said statement is being
contradicted by the testimony of Engineer Dante L. Costas,
81
who positively declared that it
has been a normal practice of the Hotel management not to put off the lights until 10:00P.M.
in order to allow the housekeepers to do the cleaning of the pools surrounding, the toilets
and the counters. It was also confirmed that the lights were kept on for security reasons and
so that the people exercising in the nearby gym may be able to have a good view of the
swimming pool. This Court also takes note that the nearby gymnasium was normally open
until 10:00 P.M. so that there was a remote possibility the pool area was in complete
darkness as was alleged by herein petitioner, considering that the illumination which
reflected from the gym. Ergo, considering that the area were sufficient (sic) illuminated when
the alleged incident occurred, there could have been no reason for the petitioner to have
met said accident, much less to have been injured as a consequence thereof, if she only
acted with care and caution, which every ordinary person is expected to do.
82

More telling is the ratiocination of the Court of Appeals, to wit:
Viewed from the foregoing, the question now is whether respondents PHI and DTPCI and its
employees were negligent? We do not think so. Several factors militate against petitioners
contention.
One. Petitioner recognized the fact that the pool areas closing time is 7:00 p.m.. She, herself,
admitted during her testimony that she was well aware of the sign when she and Delia
entered the pool area. Hence, upon knowing, at the outset, of the pools closing time, she
took the risk of overstaying when she decided to take shower and leave the area beyond the
closing hour. In fact, it was only upon the advise of the pool attendants that she thereafter
took her shower.
Two. She admitted, through her certification, that she lifted the wooden bar countertop,
which then fell on to her head. The admission in her certificate proves the circumstances
surrounding the occurrence that transpired on the night of 11 June 1995. This is contrary to
her assertion in the complaint and testimony that, while she was passing through the counter
door, she was suddenly knocked out by a hard and heavy object. In view of the fact that she
admitted having lifted the countertop, it was her own doing, therefore, that made the
counter top fell on to her head.
Three. We cannot likewise subscribe to petitioners assertion that the pool area was totally
dark in that she herself admitted that she saw a telephone at the counter after searching for
one. It must be noted that petitioner and Delia had walked around the pool area with ease
since they were able to proceed to the glass entrance door from the shower room, and back
to the counter area where the telephone was located without encountering any untoward
incident. Otherwise, she could have easily stumbled over, or slid, or bumped into something
while searching for the telephone. This negates her assertion that the pool area was
completely dark, thereby, totally impairing her vision.
x x x x
The aforementioned circumstances lead us to no other conclusion than that the proximate
and immediate cause of the injury of petitioner was due to her own negligence.
83
(Emphasis
supplied).
Even petitioners assertion of negligence on the part of respondents PHI and DTPCI in not
rendering medical assistance to her is preposterous. Her own Complaint affirmed that
respondents PHI and DTPCI afforded medical assistance to her after she met the unfortunate
accident inside the hotels swimming pool facility. Below is the portion of petitioners
Complaint that would contradict her very own statement, thus:
14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCIs gross
negligence despite medical assistance, petitioner started to feel losing her memory that
greatly affected and disrupted the practice of her chosen profession. x x x.
84
(Emphasis
supplied).
Also, as observed by the trial court, respondents PHI and DTPCI, indeed, extended medical
assistance to petitioner but it was petitioner who refused the same. The trial court stated,
thus:
Further, herein petitioners asseverations that the Hotel Management did not extend
medical assistance to her in the aftermath of the alleged accident is not true. Again, this
statement was not supported by any evidence other that the sole and self-serving testimony
of petitioner. Thus, this Court cannot take petitioners statement as a gospel truth. It bears
stressing that the Hotel Management immediately responded after it received notice of the
incident. As a matter of fact, Ms. Pearlie, the Hotel nurse, with two chambermaids holding an
ice bag placed on petitioners head came to the petitioner to extend emergency assistance
when she was notified of the incident, but petitioner merely asked for Hirudoid, saying she
was fine, and that she was a doctor and know how to take care of herself. Also, the Hotel,
through its in-house physician, Dr. Dalumpines offered its medical services to petitioner
when they met at the Hotels coffee shop, but again petitioner declined the offer. Moreover,
the Hotel as a show of concern for the petitioners welfare, shouldered the expenses for the
MRI services performed on petitioner at the Makati Medical Center. Emphatically, petitioner
herself cannot fault the Hotel for the injury she allegedly suffered because she herself did not
heed the warning at the pool to the effect that it was only open from 7:00 to 7:00 P.M. Thus,
when the petitioners own negligence was the immediate and proximate cause of his injury,
shecannot recover damages x x x.
85

With the foregoing, the following were clearly established, to wit: (1) petitioner stayed in the
hotels swimming pool facility beyond its closing hours; (2) she lifted the folding wooden
counter top that eventually hit her head; and (3) respondents PHI and DTPCI extended
medical assistance to her. As such, no negligence can be attributed either to respondents PHI
and DTPCI or to their staff and/or management. Since the question of negligence is one of
fact, this Court is bound by the said factual findings made by the lower courts. It has been
repeatedly held that the trial court's factual findings, when affirmed by the Court of Appeals,
are conclusive and binding upon this Court, if they are not tainted with arbitrariness or
oversight of some fact or circumstance of significance and influence. Petitioner has not
presented sufficient ground to warrant a deviation from this rule.
86

With regard to petitioners contention that the principles of res ipsa loquitur and respondeat
superior are applicable in this case, this Court holds otherwise.
Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks
for itself." It relates to the fact of an injury that sets out an inference to the cause thereof or
establishes the plaintiffs prima facie case. The doctrine rests on inference and not on
presumption. The facts of the occurrence warrant the supposition of negligence and they
furnish circumstantial evidence of negligence when direct evidence is lacking.
87
Simply
stated, this doctrine finds no application if there is direct proof of absence or presence of
negligence. If there is sufficient proof showing the conditions and circumstances under which
the injury occurred, then the creative reason for the said doctrine disappears.
88

Further, the doctrine of res ipsa loquitur applies where, (1) the accident was of such
character as to warrant an inference that it would not have happened except for the
defendants 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.
89

In the case at bench, even granting that respondents PHI and DTPCIs staff negligently turned
off the lights and locked the door, the folding wooden counter top would still not fall on
petitioners head had she not lifted the same. Although the folding wooden counter top is
within the exclusive management or control of respondents PHI and DTPCI, the falling of the
same and hitting the head of petitioner was not due to the negligence of the former. As
found by both lower courts, the folding wooden counter top did not fall on petitioners head
without any human intervention. Records showed that petitioner lifted the said folding
wooden counter top that eventually fell and hit her head. The same was evidenced by the,
(1) 11 June 1995 handwritten certification of petitioner herself; (2) her Letter dated 30
August 1995 addressed to Mr. Yoshikazu Masuda (Mr. Masuda), General Manager of Dusit
Hotel; and, (3) Certification dated 7 September 1995 issued to her by Dr. Dalumpines upon
her request, which contents she never questioned.
Here, we, respectively, quote the 11 June 1995 handwritten certification of petitioner; her
letter to Mr. Masuda dated 30 August 1995; and Dr. Dalumpines Certification dated 7
September 1995, to wit:
Petitioners 11 June 1995 Handwritten Certification:
I was requested by Dr. Dalumpines to write that I was assured of assistance should it be
necessary with regard an accident at the pool. x x x The phone was in an enclosed area on a
chair I lifted the wooden bar counter top which then fell on my head producing a large
hematoma x x x.
90

Petitioners Letter addressed to Mr. Masuda dated 30 August 1995:
Dear Mr. Masuda,
x x x x
x x x We searched and saw a phone on a chair behind a towel counter. However, in order to
get behind the counter I had to lift a hinged massive wooden section of the counter which
subsequently fell and knocked me on my head x x x.
91

Dr. Dalumpines Certification dated 7 September 1995:
C E R T I F I C A T I O N
This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to an
accident at the poolside at 7:45PM on 11 June 1995.
Same records show that there, she saw petitioner who claimed the folding countertop fell on
her head when she lifted it to enter the lifeguards counter to use the phone. She asked for
Hirudoid.
The same evening petitioner met Dr. Dalumpnes at the Coffee Shop. After narrating the
poolside incident and declining Dr. Dalumpines offer of assistance, she reiterated that the
Hirudoid cream was enough and that petitioner]being a doctor herself, knew her condition
and she was all right.
This certification is given upon the request of petitioner for whatever purpose it may serve, 7
September 1995 at Makati City.
92
(Emphasis supplied).
This Court is not unaware that in petitioners Complaint and in her open court testimony, her
assertion was, "while she was passing through the counter door, she was suddenly knocked
out by a hard and heavy object, which turned out to be the folding wooden counter top."
However, in her open court testimony, particularly during cross-examination, petitioner
confirmed that she made such statement that "she lifted the hinge massive wooden section
of the counter near the swimming pool."
93
In view thereof, this Court cannot acquiesce
petitioners theory that her case is one of res ipsa loquitur as it was sufficiently established
how petitioner obtained that "bukol" or "hematoma."
The doctrine of respondeat superior finds no application in the absence of any showing that
the employees of respondents PHI and DTPCI were negligent. Since in this case, the trial
court and the appellate court found no negligence on the part of the employees of
respondents PHI and DTPCI, thus, the latter cannot also be held liable for negligence and be
made to pay the millions of pesos damages prayed for by petitioner.
The issue on whether petitioners debilitating and permanent injuries were the result of the
accident she suffered at the hotels swimming pool area on 11 June 1995 is another question
of fact, which is beyond the function of this Court to resolve. More so, this issue has already
been properly passed upon by the trial court and the Court of Appeals. To repeat, this Court
is bound by the factual findings of the lower courts and there is no cogent reason to depart
from the said rule.
The following observations of the trial court are controlling on this matter:
Firstly, petitioner had a past medical history which might have been the cause of her
recurring brain injury.
Secondly, the findings of Dr. Perez did not prove a causal relation between the 11 June 1995
accident and the brain damage suffered by petitioner. Dr. Perez himself testified that the
symptoms being experienced by petitioner might have been due to factors other than the
head trauma she allegedly suffered. Emphasis must be given to the fact that petitioner had
been suffering from different kinds of brain problems since she was 18 years old, which may
have been the cause of the recurring symptoms of head injury she is experiencing at present.
Thirdly, Dr. Sanchezs testimony cannot be relied upon since she testified on the findings and
conclusions of persons who were never presented in court. Ergo, her testimony thereon was
hearsay. A witness can testify only with regard to facts of which they have personal
knowledge. Testimonial or documentary evidence is hearsay if it is based, not on the
personal knowledge of the witness, but on the knowledge of some other person not on the
witness stand. Consequently, hearsay evidence -- whether objected to or not -- has no
probative value.
94

Fourthly, the medical reports/evaluations/certifications issued by myriads of doctors whom
petitioner sought for examination or treatment were neither identified nor testified to by
those who issued them. Being deemed as hearsay, they cannot be given probative
value.1wphi1
The aforesaid medical reports/evaluations/certifications of different doctors in favor of
petitioner cannot be given probative value and their contents cannot be deemed to
constitute proof of the facts stated therein. It must be stressed that a document or writing
which is admitted not as independent evidence but merely as part of the testimony of a
witness does not constitute proof of the facts related therein.
95
In the same vein, the medical
certificate which was identified and interpreted in court by another doctor was not accorded
probative value because the doctor who prepared it was not presented for its identification.
Similarly, in this case, since the doctors who examined petitioner were not presented to
testify on their findings, the medical certificates issued on their behalf and identified by
another doctor cannot be admitted as evidence. Since a medical certificate involves an
opinion of one who must first be established as an expert witness, it cannot be given weight
or credit unless the doctor who issued it is presented in court to show his
qualifications.
96
Thus, an unverified and unidentified private document cannot be accorded
probative value. It is precluded because the party against whom it is presented is deprived of
the right and opportunity to cross-examine the person to whom the statements or writings
are attributed. Its executor or author should be presented as a witness to provide the other
party to the litigation the opportunity to question its contents. Being mere hearsay evidence,
failure to present the author of the letter renders its contents suspect and of no probative
value.
97

All told, in the absence of negligence on the part of respondents PHI and DTPCI, as well as
their management and staff, they cannot be made Iiable to pay for the millions of damages
prayed for by the petitioner. Since respondents PHI and DTPCI arc not liable, it necessarily
follows that respondent First Lepanto cannot also be made liable under the contract or
Insurance.
WHEREFORE, premises considered, the Decision and Resolution or the Court of Appeals in
CA-G.R. CV No. 87065 dated 9 August 2007 and 5 November 2007, respectively, are hereby
AFFIRMED. Costs against petitioner.