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FGU Insurance Corporation vs.

G.P. Sarmiento Trucking

Corporation and
Lambert Eroles
Posted on November 24, 2012

G.R. No. 141910

August 6, 2002
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18,
1994, 30 units of Condura S.D. white refrigerators aboard its Isuzu truck driven
by Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While
traversing the North Diversion Road along McArthur highway in Barangay
Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall
into a deep canal, resulting in damage to the cargoes.
FGU, an insurer of the shipment, paid the value of the covered cargoes
(P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CIIs rights &
interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to
heed the claim, FGU filed a complaint for damages & breach of contract of
carriage against GPS and Eroles with the RTC. In its answer, respondents
asserted that GPS was only the exclusive hauler of CII since 1988, and it was not
so engaged in business as a common carrier. Respondents further claimed that
the cause of damage was purely accidental.
GPS filed a motion to dismiss the complaint by way of demurrer to evidence on
the ground that petitioner had failed to prove that it was a common carrier.
The RTC granted the motion to dismiss on April 30, 1996. It subsequently
dismissed the complaint holding that GPS was not a common carrier defined
under the law & existing jurisprudence. The subsequent motion for
reconsideration having been denied, FGU interposed an appeal to the CA. The

CA rejected the FGUs appeal & ruled in favor of GPS. It also denied petitioners
motion for reconsideration.
1. WON GPS may be considered a common carrier as defined under the law &
existing jurisprudence.
2. WON GPS, either as a common carrier or a private carrier, may be presumed
to have been negligent when the goods it undertook to transport safely were
subsequently damaged while in its protective custody & possession.
3. Whether the doctrine of Res ipsa loquitur is applicable in the instant case.
1. The SC finds the conclusion of the RTC and the CA to be amply justified. GPS,
being an exclusive contractor & hauler of Concepcion Industries, Inc.,
rendering/offering its services to no other individual or entity, cannot be
considered a common carrier. Common carriers are persons, corporations, firms
or associations engaged in the business of carrying or transporting passengers
or goods or both, by land, water, or air, for hire or compensation, offering their
services to the public, whether to the public in general or to a limited clientele in
particular, but never on an exclusive basis. The true test of a common carrier is
the carriage of passengers/goods, providing space for those who opt to avail
themselves of its transportation service for a fee. Given accepted standards,
GPS scarcely falls within the term common carrier.
2. GPS cannot escape from liability. In culpa contractual, the mere proof of the
existence of the contract & the failure of its compliance justify, prima facie, a
corresponding right of relief. The law will not permit a party to be set free from
liability for any kind of misperformance of the contractual undertaking or a
contravention of the tenor thereof. A breach upon the contract confers upon the
injured party a valid cause for recovering that which may have been
lost/suffered. The remedy serves to preserve the interests of the promisee that
may include his:

1. Expectation interest interest in having the benefit of his bargain by being

put in as good a position as he would have been in had the contract been
2. Reliance interest interest in being reimbursed for loss caused by reliance on
the contract by being put in as good a position as he would have been in had
the contract not been made;
3. Restitution interest interest in having restored to him any benefit that he
has conferred on the other party.
Agreements can accomplish little unless they are made the basis for action. The
effect of every infraction is to create a new duty, or to make recompense to the
one who has been injured by the failure of another to observe his contractual
obligation unless he can show extenuating circumstances, like proof of his
exercise of due diligence (normally that of the diligence of a good father of a
family or, exceptionally by stipulation or by law such as in the case of common
carriers, that of extraordinary diligence) or of the attendance of fortuitous event,
to excuse him from his ensuing liability.
A default on, or failure of compliance with, the obligation gives rise to a
presumption of lack of care & corresponding liability on the part of the
contractual obligor the burden being on him to establish otherwise. GPS has
failed to do so.
Eroles, on the other hand, may not be ordered to pay petitioner without concrete
proof of his negligence/fault. The driver, not being a party to the contract of
carriage between petitioners principal and defendant, may not be held liable
under the agreement. A contract can only bind the parties who have entered
into it or their successors who have assumed their personality/juridical position.
Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such
contract can neither favor nor prejudice a third person. Petitioners civil action
against the driver can only be based on culpa aquiliana, which would require the
claimant for damages to prove the defendants negligence/fault.

3. Res ipsa loquitur holds a defendant liable where the thing which caused the
injury complained of is shown to be under the latters management and the
accident is such that, in the ordinary course of things, cannot be expected to
happen if those who have its management/control use proper care. In the
absence of the defendants explanation, it affords reasonable evidence that the
accident arose from want of care. It is not a rule of substantive law and does not
create an independent ground of liability. Instead, it is regarded as a mode of
proof, or a mere procedural convenience since it furnishes a substitute for, and
relieves the plaintiff of, the burden of producing specific proof of negligence. The
maxim simply places the burden of going forward with the proof on the
However, resort to the doctrine may only be allowed when:
(a) the event is of a kind which does not ordinarily occur in the absence of
(b) other responsible causes are sufficiently eliminated by the evidence
(includes the conduct of the plaintiff and third persons); and
(c) the indicated negligence is within the scope of the defendants duty to the
Thus, it is not applicable when an unexplained accident may be attributable to
one of several causes, for some of which the defendant could not be
Res ipsa loquitur generally finds relevance whether or not a contractual
relationship exists between the plaintiff and the defendant, for the inference of
negligence arises from the circumstances and nature of the occurrence and not
from the nature of the relation of the parties. Nevertheless,for the doctrine to
apply, the requirement that responsible causes (other than those due to
defendants conduct) must first be eliminated should be understood as being
confined only to cases of pure (non-contractual) tort since obviously the
presumption of negligence in culpa contractual immediately attaches by a
failure of the covenant or its tenor.

On the other hand, while the truck driver, whose civil liability is predicated on
culpa acquiliana, can be said to have been in control & management of the
vehicle, it is not equally shown that the accident has been exclusively due to his
negligence. If it were so, the negligence could allow res ipsa loquitur to properly
work against him. However, clearly this is not the case.


On September 30, 1984, Teresa Elena Legarda-de los Santos, the wife of respondent Wilfredo de
los Santos was fetched by Wilfredos brother Armando, husband of respondent Carmina Vda. de
los Santos, from Rizal Theater to after Teresas theater performance. Armando drove a 1980
Mitsubishi Galant Sigma, a company car assigned to Wilfredo. Two other members of the cast of
production joined Teresa Elena in the Galant Sigma.
Around 11:30 p.m., while travelling along the Katipunan Road (White Plains), the Galant Sigma
collided with the shuttle bus owned by petitioner and driven by Alfredo S. Mejia (Mejia), an
employee of petitioner Filipinas Synthetic Corp. The Galant Sigma was dragged about 12 meters
from the point of impact, across the White Plains Road landing near the perimeter fence of Camp
Aguinaldo, where the Galant Sigma burst into flames and burned to death beyond recognition all
four occupants of the car.
A criminal charge for reckless imprudence resulting in damage to property with multiple
homicide was brought against Mejia, which was decided in favor of Mejia (shuttle driver). A
consolidated civil case was filed by the families of the deceased against Mejia. The RTC ruled in
favor of herein respondents. After the denial of the motion for reconsideration, petitioner
appealed to the CA and the CA affirmed the decision of the RTC. Hence this petition stating that
the respondent court erred in finding Mejia negligent, such not being supported by evidence on
ISSUE: Whether Mejia was negligent

Petitioner argues that the RTC admitted that De los Santos made a turn along White Plains Road
without exercising the necessary care which could have prevented the accident from
happening. According to petitioner, the sudden turn of the vehicle used by the victims should
also be considered as negligence on the part of the driver of that same vehicle, thus, mitigating, if
not absolving petitioners liability. However, the said argument deserves scant consideration.
It was well established that Mejia was driving at a speed beyond the rate of speed required by
law, specifically Section 35 of Republic Act No. (RA) 4136. Under the New Civil Code, unless
there is proof to the contrary, it is presumed that a person driving a motor vehicle has been
negligent if at the time of the mishap, he was violating any traffic regulation. Apparently, in the
present case, Mejias violation of the traffic rules does not erase the presumption that he was the
one negligent at the time of the collision. Even apart from statutory regulations as to speed, a
motorist is nevertheless expected to exercise ordinary care and drive at a reasonable rate of speed
commensurate with all the conditions encountered which will enable him to keep the vehicle
under control and, whenever necessary, to put the vehicle to a full stop to avoid injury to others
using the highway.
A closer study of the Police Accident Report, Investigation Report and the sketch of the accident
would reveal nothing but that the shuttle bus was traveling at such a reckless speed that it
collided with the car bearing the deceased.
WHEREFORE, the Petition for Review is hereby DENIED. Consequently, the Decision of
the Court of Appeals, dated August 15, 2001, is hereby AFFIRMED with
theMODIFICATION that the moral damages be reduced to P50,000.00.

Heirs of Completo v. Albayda, Jr.

Heirs of Redentor Completo, and Elpidio Abiad v. Sgt. Amando Albayda, Jr.
2010 / Nachura [Negilgence > Standard of conduct > Special circumstance]
Albayda is a Master Sergeant of the PH Air Force, and Completo was the taxi driver of a Toyota Corolla which was
owned by Abiad. Albayda was riding a bike on his way to the office, when Completos taxi bumped and sideswept him,
causing serious physical injuries. He [Albayda] was brought to the PH Air Force General Hospital, but he was
transferred to the AFP Medical Center because he sustained a fracture and there was no orthopedic doctor available
in the first hospital. He was confined from 27 Aug 1997 to 11 Feb 1998, and again in 23 Feb to 22 Mar 1998 [approx.
7 months].

Conciliation before the barangay failed, so Albayda filed a complaint for physical injuries through reckless
imprudence against Completo before the Office of the City Prosecutor of Pasay. Completo filed a counter-charge of
damage to property through reckless imprudence against Albayda. The Office of the City Prosecutor recommended
the filing of an information for Albaydas complaint, and Completos complaint [against Albayda] was dismissed.
Albayda manifested his reservation to file a separate civil action for damages against Completo and Abiad.
Albayda alleged that Completos negligence is the proximate cause of the incident. He demanded the following
damages and their respective amounts: Actual damages 276,550; Moral damages 600,000; Exemplary damages
200,000; Attorneys fees 25,000 + 1,000 per court appearance.
On the other hand, Completo alleged that he was carefully driving the taxicab when he heard a strange sound
from the taxicabs rear right side. He found Albayda lying on the road, holding his left leg, so he brought Albayda to
PH Air Force General Hospital. Completo asserted that he was an experienced driver, and that he already reduced
his speed to 20km even before reaching the intersection. In contrast, Albayda rode his bicycle at high speed, causing
him to lose control of the bicycle. Completo said that Albayda had no cause of action.
Several people testified for each side, but here are some notes on the testimony of the owner of the taxi driver,
Abiad. Abiad said that aside from being a soldier, he also held franchises of taxicabs and passenger jeepneys, and
being a taxicab operator, he would wake up early to personally check the taxicabs. When Completo applied as a
taxicab driver, Abiad required him to show his bio-data, NBI clearance, and drivers license. Completo never figured in
a vehicular accident since he was employed, and according to Abiad, he [Completo] was a good driver and good
RTC rendered judgment in favor of Albayda, and the defendants are ordered to pay actual [46k] and moral [400k]
damages, and attorneys fees [25k]. Upon appeal at the CA, the court affirmed RTCs decision with modifications [no
more actual damages; awarded temperate damages [40k]; moral damages only 200k; Completo and Abiad are
solidarily liable to pay Albayda; added legal interest].
Issues and Holding
WON CA erred in finding that Completo was the one who caused the collision. NO
WON Abiad failed to prove that he observed the diligence of a good father of the family. YES
WON the award of moral and temperate damages and attorneys fees for Albayda had no basis. NO / NO /
On Negligence
It is a rule in negligence suits that the plaintiff has the burden of proving by a preponderance of evidence the
motorists breach in his duty of care owed to the plaintiff, that the motorist was negligent in failing to exercise the
diligence required to avoid injury to the plaintiff, and that such negligence was the proximate cause of the injury
suffered. NCC 2176 quoted, and said that the question of the motorists negligence is a question of fact. Usually, more
will be required of a motorist [25mi/hr = 37ft/sec] than a bicyclist [10mi/hr = 15ft/sec] in discharging the duty of care
because of the physical advantages the former has over the latter.
It was proven by a preponderance of evidence that Completo failed to exercise reasonable diligence.

He was overspeeding at the time he hit Albaydas bicycle; he did not slow down even when he approached
the intersection

Such negligence was the sole and proximate cause of the injuries sustained by Albayda

It was proven that Albayda had the right of way since he reached the intersection ahead of Completo
NCC 2180 cited obligation imposed by NCC 2176 is demandable also for those persons for whom one is
responsible. Employers are liable for damage caused by employees, but the responsibility ceases upon proof that
employers observed the diligence of the good father of the family in the selection and supervision of employees. The
burden of proof is on the employer. The responsibility of two or more persons who are liable for QD is solidary. The
employers civil liability for his employees negligent acts is also primary and direct, owing to his own negligence in
selecting and supervising them, and this liability attaches even if the employer is not in the vehicle at the time of
In the selection of employees, employers are required to examine them as to their qualifications, experience, and
service records. With respect to supervision, employers should formulate SOPs and monitor their implementation,

and impose disciplinary measures for breaches. To establish these factors in a trial involving the issue of vicarious
[secondary] liability, employers must submit concrete proof, including documentary evidence.
On Damages
CA rightfully deleted the award of actual damages because Albayda failed to present documentary evidence to
establish the amount incurred. Temperate damages may be recovered when the court finds that some pecuniary loss
has been suffered but its amount cannot be proved with certainty. Moral damages are awarded in QDs causing
physical injuries, so the award is proper. The award of attorneys fees is deleted for failure to prove that petitioners
acted in bad faith in refusing to satisfy respondents just and valid claim.


G.R. No. 169467
February 25, 2010
FACTS: petitioners filed with the trial court a civil case for damages against
respondent Morales.
Petitioners are the parents of Alfred Pacis, a 17-year old student who died in a
shooting incident inside the Top Gun Firearms and Ammunitions Store in
Baguio City. Morales is the owner of the gun store.
On the fateful day, Alfred was in the gun store, with Matibag and Herbolario
as sales agents and caretakers of the store while owner Morales was in Manila.
The gun which killed Alfred is a gun owned by a store customer which was left
with Morales for repairs, which he placed inside a drawer. Since Morales
would be going to Manila, he left the keys to the store with the caretakers. It
appears that the caretakers took the gun from the drawer and placed it on top
of a table. Attracted by the sight of the gun, the young Alfred got hold of the
same. Matibag asked Alfred to return the gun. The latter followed and handed
the gun to Matibag. It went off, the bullet hitting the young Alfred in the head.

A criminal case for homicide was filed against Matibag. Matibag, however, was
acquitted of the charge against him because of the exempting circumstance of
accident under Art. 12, par. 4 of the RPC.
By agreement of the parties, the evidence adduced in the criminal case for
homicide against Matibag was reproduced and adopted by them as part of
their evidence in the instant case.
The trial court rendered its decision in favor of petitioners, ordering the
defendant to pay plaintiffs indemnity for the death of Alfred, actual damages
for the hospitalization and burial, expenses incurred by the plaintiffs,
compensatory damages, MD and AF.
Respondent appealed to the CA, which reversed the trial courts Decision and
absolved respondent from civil liability under Article 2180 of the Civil Code.
MR denied, hence this petition.
ISSUE: Was Morales negligent?
HELD: Petition granted. The CA decision is set aside and the trial courts
Decision reinstated.
This case for damages arose out of the accidental shooting of petitioners son.
Under Article 1161 of the Civil Code, petitioners may enforce their claim for
damages based on the civil liability arising from the crime under Article 100 of
the RPC or they may opt to file an independent civil action for damages under
the Civil Code. In this case, instead of enforcing their claim for damages in the
homicide case filed against Matibag, petitioners opted to file an independent
civil action for damages against respondent whom they alleged was Matibags

employer. Petitioners based their claim for damages under Articles 2176 and
2180 of the Civil Code.
Unlike the subsidiary liability of the employer under Article 103 of the RPC,
the liability of the employer, or any person for that matter, under Article 2176
of the Civil Code is primary and direct, based on a persons own negligence.
Article 2176 states:
Art. 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties,
is called quasi-delict and is governed by the provisions of this Chapter.
This case involves the accidental discharge of a firearm inside a gun store.
Under PNP Circular No. 9, entitled the Policy on Firearms and Ammunition
Dealership/Repair, a person who is in the business of purchasing and selling
of firearms and ammunition must maintain basic security and safety
requirements of a gun dealer, otherwise his License to Operate Dealership will
be suspended or canceled.
Indeed, a higher degree of care is required of someone who has in his
possession or under his control an instrumentality extremely dangerous in
character, such as dangerous weapons or substances. Such person in
possession or control of dangerous instrumentalities has the duty to take
exceptional precautions to prevent any injury being done thereby. Unlike the
ordinary affairs of life or business which involve little or no risk, a business
dealing with dangerous weapons requires the exercise of a higher degree of

As a gun store owner, respondent is presumed to be knowledgeable about

firearms safety and should have known never to keep a loaded weapon in his
store to avoid unreasonable risk of harm or injury to others. Respondent has
the duty to ensure that all the guns in his store are not loaded. Firearms
should be stored unloaded and separate from ammunition when the firearms
are not needed for ready-access defensive use. With more reason, guns
accepted by the store for repair should not be loaded precisely because they
are defective and may cause an accidental discharge such as what happened in
this case. Respondent was clearly negligent when he accepted the gun for
repair and placed it inside the drawer without ensuring first that it was not
loaded. In the first place, the defective gun should have been stored in a vault.
Before accepting the defective gun for repair, respondent should have made
sure that it was not loaded to prevent any untoward accident. Indeed,
respondent should never accept a firearm from another person, until the
cylinder or action is open and he has personally checked that the weapon is
completely unloaded. For failing to insure that the gun was not loaded,
respondent himself was negligent. Furthermore, it was not shown in this case
whether respondent had a License to Repair which authorizes him to repair
defective firearms to restore its original composition or enhance or upgrade
Clearly, respondent did not exercise the degree of care and diligence required
of a good father of a family, much less the degree of care required of someone
dealing with dangerous weapons, as would exempt him from liability in this
ANTONIO FRANCISCO, substituted by G.R. No. 193577
his heirs: NELIA E.S. FRANCISCO,




CARPIO, J., Chairperson,


- versus -

PEREZ, and




September 7, 2011
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The Case

This is a petition for review1 of the 31 May 2010 Decision2 and 31 August 2010
Resolution3 of the Court of Appeals in CA G.R. CV No. 63591. In its 31 May 2010
Decision, the Court of Appeals set aside the 21 August 1998 Decision 4 of the Regional
Trial of Pasig City, Branch 71 (trial court), and ordered petitioner Antonio Francisco
(Francisco) to pay respondent Chemical Bulk Carriers, Incorporated
(CBCI) P1,119,905 as actual damages. In its 31 August 2010 Resolution, the Court of
Appeals denied Franciscos motion for reconsideration.

The Facts

Since 1965, Francisco was the owner and manager of a Caltex station in Teresa, Rizal.
Sometime in March 1993, four persons, including Gregorio Bacsa (Bacsa), came to
Franciscos Caltex station and introduced themselves as employees of
CBCI. Bacsaoffered to sell to Francisco a certain quantity of CBCIs diesel fuel.

After checking Bacsas identification card, Francisco agreed to purchase CBCIs diesel
fuel. Francisco imposed the following conditions for the purchase: (1) that Petron
Corporation (Petron) should deliver the diesel fuel to Francisco at his business address
which should be properly indicated in Petrons invoice; (2) that the delivery tank is
sealed; and (3) that Bacsa should issue a separate receipt to Francisco.

The deliveries started on 5 April 1993 and lasted for ten months, or up to 25 January
1994.5 There were 17 deliveries to Francisco and all his conditions were complied

In February 1996, CBCI sent a demand letter to Francisco regarding the diesel fuel
delivered to him but which had been paid for by CBCI. 6 CBCI demanded that

Francisco pay CBCI P1,053,527 for the diesel fuel or CBCI would file a complaint
against him in court. Francisco rejected CBCIs demand.

On 16 April 1996, CBCI filed a complaint for sum of money and damages against
Francisco and other unnamed defendants.7According to CBCI, Petron, on various
dates, sold diesel fuel to CBCI but these were delivered to and received by Francisco.
Francisco then sold the diesel fuel to third persons from whom he received payment.
CBCI alleged that Francisco acquired possession of the diesel fuel without authority
from CBCI and deprived CBCI of the use of the diesel fuel it had paid for. CBCI
demanded payment from Francisco but he refused to pay. CBCI argued that Francisco
should have known that since only Petron, Shell and Caltex are authorized to sell and
distribute petroleum products in the Philippines, the diesel fuel came from
illegitimate, if not illegal or criminal, acts. CBCI asserted that Francisco violated
Articles 19,8 20,9 21,10 and 2211 of the Civil Code and that he should be held liable. In
the alternative, CBCI claimed that Francisco, in receiving CBCIs diesel fuel, entered
into an innominate contract of do ut des (I give and you give) with CBCI for which
Francisco is obligated to pay CBCIP1,119,905, the value of the diesel fuel. CBCI also
prayed for exemplary damages, attorneys fees and other expenses of litigation.

On 20 May 1996, Francisco filed a Motion to Dismiss on the ground of forum

shopping.12 CBCI filed its Opposition.13 In an Order dated 15 November 1996, the
trial court denied Franciscos motion.14
Thereafter, Francisco filed his Answer.15 Francisco explained that he operates the
Caltex station with the help of his family because, in February 1978, he completely
lost his eyesight due to sickness. Francisco claimed that he asked Jovito, his son, to
look into and verify the identity of Bacsa, who introduced himself as a radio operator
and confidential secretary of a certain Mr.Inawat (Inawat), CBCIs manager for
operations. Francisco said he was satisfied with the proof presented by Bacsa. When
asked to explain why CBCI was selling its fuel, Bacsa allegedly replied that CBCI
was in immediate need of cash for the salary of its daily paid workers and for petty
cash. Francisco maintained that Bacsa assured him that the diesel fuel was not stolen
property and that CBCI enjoyed a big credit line with Petron. Francisco agreed to
purchase the diesel fuel offered by Bacsa on the following conditions:

1) Defendant [Francisco] will not accept any delivery if it is not company

(Petron) delivered, with his name and address as shipping point properly
printed and indicated in the invoice of Petron, and that the product on the
delivery tank is sealed; [and]

2) Although the original invoice is sufficient evidence of delivery and payment,

under ordinary course of business, defendant still required Mr. Bacsato issue a
separate receipt duly signed by him acknowledging receipt of the amount stated
in the invoice, for and in behalf of CBCI.16

During the first delivery on 5 April 1993, Francisco asked one of his sons to verify
whether the delivery trucks tank was properly sealed and whether Petron issued the
invoice. Francisco said all his conditions were complied with. There were 17
deliveries made from 5 April 1993 to 25 January 1994 and each delivery was for
10,000 liters of diesel fuel at P65,865.17 Francisco maintained that he acquired the
diesel fuel in good faith and for value. Francisco also filed a counterclaim for
exemplary damages, moral damages and attorneys fees.

In its 21 August 1998 Decision, the trial court ruled in Franciscos favor and dismissed
CBCIs complaint. The dispositive portion of the trial courts 21 August 1998 Decision
WHEREFORE, Judgment is hereby rendered:
1. Dismissing the complaint dated March 13, 1996 with costs.
2. Ordering plaintiff (CBCI), on the counterclaim, to pay
defendant the amount of P100,000.00 as moral damages
and P50,000.00 as and by way of attorneys fees.

CBCI appealed to the Court of Appeals.19 CBCI argued that Francisco acquired the
diesel fuel from Petron without legal ground because Bacsa was not authorized to
deliver and sell CBCIs diesel fuel. CBCI added that Francisco acted in bad faith
because he should have inquired further whether Bacsas sale of CBCIs diesel fuel was

In its 31 May 2010 Decision, the Court of Appeals set aside the trial courts 21 August
1998 Decision and ruled in CBCIs favor. The dispositive portion of the Court of
Appeals 31 May 2010 Decision reads:
IN VIEW OF THE FOREGOING, the assailed decision is hereby REVERSED
and SET ASIDE. Antonio Francisco is ordered to pay Chemical Bulk Carriers,
Incorporated the amount of P1,119,905.00 as actual damages.

On 15 January 2001, Francisco died.21 Franciscos heirs, namely: Nelia E.S. Francisco,
Emilia F. Bertiz, Rebecca E.S. Francisco, Antonio E.S. Francisco, Jr., Socorro
F. Fontanilla, and Jovito E.S. Francisco (heirs of Francisco) filed a motion for
substitution.22The heirs of Francisco also filed a motion for reconsideration. 23 In its 31
August 2010 Resolution, the Court of Appeals granted the motion for substitution but
denied the motion for reconsideration.
Hence, this petition.
The Ruling of the Trial Court

The trial court ruled that Francisco was not liable for damages in favor of CBCI
because the 17 deliveries were covered by original and genuine invoices. The trial
court declared that Bacsa, as confidential secretary of Inawat, was CBCIs authorized
representative who received Franciscos full payment for the diesel fuel. The trial court

stated that if Bacsa was not authorized, CBCI should have sued Bacsa and not
Francisco. The trial court also considered Francisco a buyer in good faith who paid in
full for the merchandise without notice that some other person had a right to or
interest in such diesel fuel. The trial court pointed out that good faith affords
protection to a purchaser for value. Finally, since CBCI was bound by the acts
of Bacsa, the trial court ruled that CBCI is liable to pay damages to Francisco.

The Ruling of the Court of Appeals

The Court of Appeals set aside the trial courts 21 August 1998 Decision and ruled
that Bacsas act of selling the diesel fuel to Francisco was his personal act and, even
if Bacsa connived with Inawat, the sale does not bind CBCI.

The Court of Appeals declared that since Francisco had been in the business of selling
petroleum products for a considerable number of years, his blindness was not a
hindrance for him to transact business with other people. With his condition and
experience, Francisco should have verified whether CBCI was indeed selling diesel
fuel and if it had given Bacsa authority to do so. Moreover, the Court of Appeals
stated that Francisco cannot feign good faith since he had doubts as to the authority
of Bacsayet he did not seek confirmation from CBCI and contented himself with an
improvised receipt. Franciscos failure to verify Bacsasauthority showed that he had an
ulterior motive. The receipts issued by Bacsa also showed his lack of authority
because it was on a plain sheet of bond paper with no letterhead or any indication that
it came from CBCI. The Court of Appeals ruled that Francisco cannot
invoke estoppel because he was at fault for choosing to ignore the tell-tale signs of
petroleum diversion and for not exercising prudence.

The Court of Appeals also ruled that CBCI was unlawfully deprived of the diesel fuel
which, as indicated in the invoices, CBCI had already paid for. Therefore, CBCI had
the right to recover the diesel fuel or its value from Francisco. Since the diesel fuel
can no longer be returned, the Court of Appeals ordered Francisco to give back the
actual amount paid by CBCI for the diesel fuel.
The Issues

The heirs of Francisco raise the following issues:





The Ruling of the Court

The petition has no merit.

Required Diligence of a Blind Person

The heirs of Francisco argue that the Court of Appeals erred when it ruled that
Francisco was liable to CBCI because he failed to exercise the diligence of a good
father of a family when he bought the diesel fuel. They argue that since Francisco was
blind, the standard of conduct that was required of him was that of a reasonable
person under like disability. Moreover, they insist that Francisco exercised due care in
purchasing the diesel fuel by doing the following: (1) Francisco asked his son to check
the identity of Bacsa; (2) Francisco required direct delivery from Petron; (3) Francisco
required that he be named as the consignee in the invoice; and (4) Francisco required
separate receipts from Bacsa to evidence actual payment.

Standard of conduct is the level of expected conduct that is required by the nature of
the obligation and corresponding to the circumstances of the person, time and
place.25 The most common standard of conduct is that of a good father of a family or
that of a reasonably prudent person.26 To determine the diligence which must be
required of all persons, we use as basis the abstract average standard corresponding to
a normal orderly person.27

However, one who is physically disabled is required to use the same degree of care
that a reasonably careful person who has the same physical disability would
use.28 Physical handicaps and infirmities, such as blindness or deafness, are treated as
part of the circumstances under which a reasonable person must act. Thus, the
standard of conduct for a blind person becomes that of a reasonable person who is

We note that Francisco, despite being blind, had been managing and operating the
Caltex station for 15 years and this was not a hindrance for him to transact business
until this time. In this instance, however, we rule that Francisco failed to exercise the
standard of conduct expected of a reasonable person who is blind. First, Francisco
merely relied on the identification card ofBacsa to determine if he was authorized by
CBCI. Francisco did not do any other background check on the identity and authority
of Bacsa. Second, Francisco already expressed his misgivings about the diesel fuel,
fearing that they might be stolen property,29yet he did not verify with CBCI the
authority of Bacsa to sell the diesel fuel. Third, Francisco relied on the receipts issued
byBacsa which were typewritten on a half sheet of plain bond paper.30 If Francisco

exercised reasonable diligence, he should have asked for an official receipt issued by
CBCI. Fourth, the delivery to Francisco, as indicated in Petrons invoice, does not
show that CBCI authorized Bacsa to sell the diesel fuel to Francisco. Clearly,
Francisco failed to exercise the standard of conduct expected of a reasonable person
who is blind.

Express or Tacit Approval of the Transaction

The heirs of Francisco argue that CBCI approved expressly or tacitly the transactions.
According to them, there was apparent authority for Bacsa to enter into the
transactions. They argue that even if the agent has exceeded his authority, the
principal issolidarily liable with the agent if the former allowed the later to act as
though he had full powers.31 They insist CBCI was not unlawfully deprived of its
property because Inawat gave Bacsa the authority to sell the diesel fuel and that CBCI
is bound by such action. Lastly, they argue that CBCI should be considered
in estoppel for failure to act during the ten month period that deliveries were being
made to Francisco.

The general principle is that a seller without title cannot transfer a better title than he
has.32 Only the owner of the goods or one authorized by the owner to sell can transfer
title to the buyer.33 Therefore, a person can sell only what he owns or is authorized to
sell and the buyer can, as a consequence, acquire no more than what the seller can
legally transfer.34

Moreover, the owner of the goods who has been unlawfully deprived of it may
recover it even from a purchaser in good faith. 35Thus, the purchaser of property which
has been stolen from the owner has been held to acquire no title to it even though he
purchased for value and in good faith.

The exception from the general principle is the doctrine of estoppel where the owner
of the goods is precluded from denying the sellers authority to sell. 36 But in order that
there may be estoppel, the owner must, by word or conduct, have caused or allowed it
to appear that title or authority to sell is with the seller and the buyer must have been
misled to his damage.37

In this case, it is clear that Bacsa was not the owner of the diesel fuel. Francisco was
aware of this but he claimed that Bacsa was authorized by CBCI to sell the diesel fuel.
However, Franciscos claim that Bacsa was authorized is not supported by any
evidence except his self-serving testimony. First, Francisco did not even confirm with
CBCI if it was indeed selling its diesel fuel since it is not one of the oil companies
known in the market to be selling petroleum products. This fact alone should have put
Francisco on guard. Second, it does not appear that CBCI, by some direct and
equivocal act, has clothed Bacsa with the indicia of ownership or apparent authority to
sell CBCIs diesel fuel. Francisco did not state if the identification card presented
by Bacsaindicated that he was CBCIs agent or a mere employee. Third, the receipt
issued by Bacsa was typewritten on a half sheet of plain bond paper. There was no
letterhead or any indication that it came from CBCI. We agree with the Court of
Appeals that this was a personal receipt issued by Bacsa and not an official receipt
issued by CBCI. Consequently, CBCI is not precluded by its conduct from
denying Bacsas authority to sell. CBCI did not hold out Bacsa or allow Bacsa to
appear as the owner or one with apparent authority to dispose of the diesel fuel.

Clearly, Bacsa cannot transfer title to Francisco as Bacsa was not the owner of the
diesel fuel nor was he authorized by CBCI to sell its diesel fuel. CBCI did not commit
any act to clothe Bacsa with apparent authority to sell the diesel fuel that would have
misled Francisco. Francisco, therefore, did not acquire any title over the diesel fuel.
Since CBCI was unlawfully deprived of its property, it may recover from Francisco,
even if Francisco pleads good faith.
WHEREFORE, we DENY the petition. We AFFIRM the 31 May 2010 Decision
and 31 August 2010 Resolution of the Court of Appeals.

St. Mary's Academy vs Carpetanos

St. Marys Academy vs. Carpetanos
GR No. 143363, February 6, 2002


Herein petitioner, conducted an enrollment drive for the school year 1995-1996
They visited schools from where prospective enrollees were studying. Sherwin
Carpitanos joined the campaign. Along with the other high school students,
they rode a Mitsubishi jeep owned by Vivencio Villanueva on their way to
Larayan Elementary School. Such jeep was driven by James Daniel II, a 15 year
old student of the same school. It was alleged that he drove the jeep in a
reckless manner which resulted for it to turned turtle. Sherwin died due to this

ISSUE: WON petitioner should be held liable for the damages.


CA held petitioner liable for the death of Sherwin under Article 218 and 219 of
the Family Code where it was pointed that they were negligent in allowing a
minor to drive and not having a teacher accompany the minor students in the
jeep. However, for them to be held liable, the act or omission to be considered
negligent must be the proximate cause of the injury caused thus, negligence
needs to have a causal connection to the accident. It must be direct and natural
sequence of events, unbroken by any efficient intervening causes. The parents
of the victim failed to show such negligence on the part of the petitioner. The
spouses Villanueva admitted that the immediate cause of the accident was not
the reckless driving of James but the detachment of the steering wheel guide of
the jeep. Futhermore, there was no evidence that petitioner allowed the minor
to drive the jeep of Villanueva. The mechanical defect was an event over which

the school has no control hence they may not be held liable for the death
resulting from such accident.

The registered owner of any vehicle, even if not used for public service, would
primarily be responsible to the public or to 3rd persons for injuries caused while it
is being driven on the road. It is not the school, but the registered owner of the
vehicle who shall be held responsible for damages for the death of Sherwin.
Case was remanded to the trial court for determination of the liability of the
defendants excluding herein petitioner.



- versus-

G.R. No. 165339

CARPIO, J., Chairperson,
ABAD, and

August 23, 2010
Before this Court is a petition for review on certiorari under Rule 45 of the Rules
of Court seeking to set aside the Decision [1] and the Resolution[2] of the Court of
Appeals (CA) in CA-G.R. CV No. 41928.
The antecedents are as follows:

Respondent Arcelito B.Tan maintained a current and savings account with

Philippine Commercial International Bank (PCIB), now petitioner Equitable PCI
Bank.[3] On May 13, 1992, respondent issued PCIB Check No. 275100 postdated
May 30, 1992[4] in the amount of P34,588.72 in favor of Sulpicio Lines, Inc. As of
May 14, 1992, respondent's balance with petitioner was P35,147.59. On May 14,
1992, Sulpicio Lines, Inc. deposited the aforesaid check to its account with Solid
Bank, Carbon Branch, Cebu City. After clearing, the amount of the check was
immediately debited by petitioner from respondent's account thereby leaving him
with a balance of only P558.87.
Meanwhile, respondent issued three checks from May 9 to May 16, 1992,
specifically, PCIB Check No. 275080 dated May 9, 1992, payable to Agusan del
Sur Electric Cooperative Inc. (ASELCO) for the amount of P6,427.68; PCIB
Check No. 275097 dated May 10, 1992 payable to Agusan del Norte Electric
Cooperative Inc., (ANECO) for the amount of P6,472.01; and PCIB Check No.
314104 dated May 16, 1992 payable in cash for the amount of P10,000.00. When
presented for payment, PCIB Check Nos. 275080, 275097 and 314014 were
dishonored for being drawn against insufficient funds.
As a result of the dishonor of Check Nos. 275080 and 275097 which were payable
to ASELCO and ANECO, respectively, the electric power supply for the two minisawmills owned and operated by respondent, located in Talacogon, Agusan del
Sur; and in Golden Ribbon, Butuan City, was cut off on June 1, 1992 and May 28,
1992, respectively, and it was restored only on July 20 and August 24, 1992,
Due to the foregoing, respondent filed with the Regional Trial Court (RTC) of
Cebu City a complaint against petitioner, praying for payment of losses consisting
of unrealized income in the amount of P1,864,500.00. He also prayed for payment
of moral damages, exemplary damages, attorney's fees and litigation expenses.
Respondent claimed that Check No. 275100 was a postdated check in payment of
Bills of Lading Nos. 15, 16 and 17, and that his account with petitioner would have
had sufficient funds to cover payment of the three other checks were it not for the

negligence of petitioner in immediately debiting from his account Check No.

275100, in the amount of P34,588.72, even as the said check was postdated to May
30, 1992. As a consequence of petitioner's error, which brought about the dishonor
of the two checks paid to ASELCO and ANECO, the electric supply to his two
mini-sawmills was cut off, the business operations thereof were stopped, and
purchase orders were not duly served causing tremendous losses to him.
In its defense, petitioner denied that the questioned check was postdated May 30,
1992 and claimed that it was a current check dated May 3, 1992. It alleged further
that the disconnection of the electric supply to respondent's sawmills was not due
to the dishonor of the checks, but for other reasons not attributable to the bank.
After trial, the RTC, in its Decision[5] dated June 21, 1993, ruled in favor of
petitioner and dismissed the complaint.
Aggrieved by the Decision, respondent filed a Notice of Appeal. [6] In its Decision
dated May 31, 2004, the Court of Appeals reversed the decision of the trial court
and directed petitioner to pay respondent the sum of P1,864,500.00 as actual
damages,P50,000.00 by way of moral damages, P50,000.00 as exemplary damages
and attorney's fees in the amount of P30,000.00.Petitioner filed a motion for
reconsideration, which the CA denied in a Resolution dated August 24, 2004.
Hence, the instant petition assigning the following errors:



Anent the first issue, petitioner submits that the CA defied Office Order No. 82-04CG dated April 5, 2004 issued by then CA Presiding Justice Cancio C. Garcia
when it failed to unload CA-G.R. CV No. 41928 so that it may be re-raffled among
the Divisions in Cebu City.
Office Order No. 82-04-CG[7] provides:
In view of the reorganization of the different Divisions due to the
appointment of eighteen (18) new Justices to the additional divisions in the cities
of Cebu and Cagayan de Oro, the raffle of civil, criminal and special cases
submitted for decision and falling within the jurisdiction of the additional
divisions shall commence on April 6, 2004.
The raffle of newly-filed cases and those for completion likewise falling
within the jurisdiction of the additional divisions, shall start on April 12, 2004.

Petitioner alleged that since the aforementioned Office Order directed the raffle of
civil, criminal and special cases submitted for decision and falling within the
jurisdiction of the additional divisions on April 6, 2004, CA-G.R. CV No. 41928
should have been unloaded by the CA's Fourth Division and re-raffled to the CA's
Division in Cebu City instead of deciding the case on May 31, 2004.
Respondent argued that the CA's Fourth Division correctly acted in taking
cognizance of the case. The CA defended its jurisdiction by ruling that cases
already submitted for decision as of the effectivity of Republic Act (R.A.)
8246[8] on February 1, 1997 were no longer included for re-raffle to the newly-

created Visayas and Mindanao Divisions of the CA, conformable to Section 5 of

the said statute.
Petitioner's argument is misplaced. Under Section 3 of R.A. 8246, it is provided
Section 3. Section 10 of Batas Pambansa Blg. 129, as amended, is hereby
further amended to read as follows:
Sec. 10. Place of Holding Sessions. The Court of Appeals shall have its
permanent stations as follows: The first seventeen (17) divisions shall be stationed
in the City of Manila for cases coming from the First to the Fifth Judicial Regions;
the Eighteenth, Nineteenth, and Twentieth Divisions shall be in Cebu City for
cases coming from the Sixth, Seventh and Eighth Judicial Regions; the Twentyfirst, Twenty-second and Twenty-third Divisions shall be in Cagayan de Oro City
for cases coming from the Ninth, Tenth, Eleventh, and Twelfth Judicial Regions.
Whenever demanded by public interest, or whenever justified by an increase in
case load, the Supreme Court, upon its own initiative or upon recommendation of
the Presiding Justice of the Court of Appeals, may authorize any division of the
Court to hold sessions periodically, or for such periods and at such places as the
Supreme Court may determine, for the purpose of hearing and deciding cases.
Trials or hearings in the Court of Appeals must be continuous and must be
completed within three (3) months unless extended by the Chief Justice of the
Supreme Court.

Further, Section 5 of the same Act provides:

Upon the effectivity of this Act, all pending cases, except those which
have been submitted for resolution, shall be referred to the proper division of the
Court of Appeals.[9]

Although CA-G.R. CV No. 41928 originated from Cebu City and is thus referable
to the CA's Divisions in Cebu City, the said case was already submitted for
decision as of July 25, 1994.[10] Hence, CA-G.R. CV No. 41928, which was already
submitted for decision as of the effectivity of R.A. 8246, i.e., February 1, 1997, can
no longer be referred to the CA's Division in Cebu City. Thus, the CA's Former
Fourth Division correctly ruled that CA-G.R. CV No. 41928 pending in its division
was not among those cases that had to be re-raffled to the newly-created CA
Divisions in the Visayas Region.

Further, administrative issuances must not override, supplant or modify the law,
but must remain consistent with the law they intend to carry out. [11] Thus, Office
Order No. 82-04-CG cannot defeat the provisions of R.A. 8246.
As to the second issue, petitioner maintains that the CA erred in reversing the
finding of the RTC that Check No. 275100 was dated May 3, 1992. Petitioner
argued that in arriving at the conclusion that Check No. 275100 was postdated May
30, 1992, the CA just made a visual examination of the check, unlike the RTC
which verified the truth of respondent's testimony relative to the issuance of Check
No. 275100. Respondent argued that the check was carefully examined by the CA
which correctly found that Check No. 275100 was postdated to May 30, 1992 and
not May 3, 1992.
The principle is well established that this Court is not a trier of facts. Therefore, in
an appeal by certiorari under Rule 45 of the Rules of Court, only questions of law
may be raised. The resolution of factual issues is the function of the lower courts
whose findings on these matters are received with respect and are, as a rule,
binding on this Court. However, this rule is subject to certain exceptions. One of
these is when the findings of the appellate court are contrary to those of the trial
court.[12] Due to the divergence of the findings of the CA and the RTC, We shall reexamine the facts and evidence presented before the lower courts.
The RTC ruled that:
The issue to be resolved in this case is whether or not the date of PCIB Check No.
275100 is May 3, 1992 as contended by the defendant, or May 30, 1992 as
claimed by the plaintiff. The date of the check is written as follows 5/3/0/92.
From the manner by which the date of the check is written, the Court cannot
really make a pronouncement as to whether the true date of the check is May 3 or
May 30, 1992, without inquiring into the background facts leading to the issuance
of said check.
According to the plaintiff, the check was issued to Sulpicio Lines in payment of
bill of lading nos. 15, 16 and 17. An examination of bill of lading no. 15,
however, shows that the same was issued, not in favor of plaintiff but in favor of

Coca Cola Bottlers Philippines, Inc. Bill of Lading No. 16 is issued in favor of
Suson Lumber and not to plaintiff. Likewise, Bill of Lading No. 17 shows that it
was issued to Jazz Cola and not to plaintiff. Furthermore, the receipt for the
payment of the freight for the shipments reflected in these three bills of lading
shows that the freight was paid by Coca Cola Bottlers Philippines, Inc. and not by
Moreover, the said receipt shows that it was paid in cash and not by check. From
the foregoing, the evidence on record does not support the claim of the plaintiff
that Check No. 275100 was issued in payment of bills of lading nos. 15, 16 and
Hence, the conclusion of the Court is that the date of the check was May 3, 1992
and not May 30, 1992.[13]

In fine, the RTC concluded that the check was dated May 3, 1992 and not May 30,
1992, because the same check was not issued to pay for Bills of Lading Nos. 15, 16
and 17, as respondent claims. The trial court's conclusion is preposterous and
illogical. The purpose for the issuance of the check has no logical connection with
the date of the check. Besides, the trial court need not look into the purpose for
which the check was issued. A reading of Check No. 275100[14] would readily show
that it was dated May 30, 1992. As correctly observed by the CA:
On the first issue, we agree with appellant that appellee Bank apparently
erred in misappreciating the date of Check No. 275100.We have carefully
examined the check in question (Exh. DDDD) and we are convinced that it was
indeed postdated to May 30, 1992 and not May 3, 1992 as urged by appellee. The
date written on the check clearly appears as 5/30/1992 (Exh. DDDD-4). The first
bar (/) which separates the numbers 5 and 30 and the second bar (/) which further
separates the number 30 from the year 1992 appear to have been done in heavy,
well-defined and bold strokes, clearly indicating the date of the check as
5/30/1992 which obviously means May 30, 1992. On the other hand, the alleged
bar (/) which appellee points out as allegedly separating the numbers 3 and 0,
thereby leading it to read the date as May 3, 1992, is not actually a bar or a slant
but appears to be more of an unintentional marking or line done with a very light
stroke. The presence of the figure 0 after the number 3 is quite significant. In fact,
a close examination thereof would unerringly show that the said number zero or 0
is connected to the preceeding number 3. In other words, the drawer of the check
wrote the figures 30 in one continuous stroke, thereby contradicting appellees
theory that the number 3 is separated from the figure 0 by a bar. Besides,
appellees theory that the date of the check is May 3, 1992 is clearly untenable
considering the presence of the figure 0 after 3 and another bar before the year
1992. And if we were to accept appellees theory that what we find to be an
unintentional mark or line between the figures 3 and 0 is a bar separating the two

numbers, the date of the check would then appear as 5/3/0/1992, which is simply
absurd. Hence, we cannot go along with appellees theory which will lead us to an
absurd result. It is therefore our conclusion that the check was postdated to May
30, 1992 and appellee Bank or its personnel erred in debiting the amount of the
check from appellants account even before the checks due date. Undoubtedly, had
not appellee bank prematurely debited the amount of the check from appellants
account before its due date, the two other checks (Exhs. LLLL and GGGG)
successively dated May 9, 1992 and May 16, 1992 which were paid by appellant
to ASELCO and ANECO, respectively, would not have been dishonored and the
said payees would not have disconnected their supply of electric power to
appellants sawmills, and the latter would not have suffered losses.

The law imposes on banks high standards in view of the fiduciary nature of
banking. Section 2 of R.A. 8791[15] decrees:
Declaration of Policy. The State recognizes the vital role of banks in providing an
environment conducive to the sustained development of the national economy and
the fiduciary nature of banking that requires high standards of integrity and
performance. In furtherance thereof, the State shall promote and maintain a stable
and efficient banking and financial system that is globally competitive, dynamic
and responsive to the demands of a developing economy.

Although R.A. 8791 took effect only in the year 2000, the Court had already
imposed on banks the same high standard of diligence required under R.A. 8791 at
the time of the untimely debiting of respondent's account by petitioner in May
1992. InSimex International (Manila), Inc. v. Court of Appeals,[16] which was
decided in 1990, the Court held that as a business affected with public interest and
because of the nature of its functions, the bank is under obligation to treat the
accounts of its depositors with meticulous care, always having in mind the
fiduciary nature of their relationship.
The diligence required of banks, therefore, is more than that of a good father of a
family.[17] In every case, the depositor expects the bank to treat his account with the
utmost fidelity, whether such account consists only of a few hundred pesos or of
millions. The bank must record every single transaction accurately, down to the last
centavo, and as promptly as possible. This has to be done if the account is to reflect
at any given time the amount of money the depositor can dispose of as he sees fit,
confident that the bank will deliver it as and to whomever he directs. [18] From the

foregoing, it is clear that petitioner bank did not exercise the degree of diligence
that it ought to have exercised in dealing with its client.
With respect to the third issue, petitioner submits that respondent's way of writing
the date on Check No. 275100 was the proximate cause of the dishonor of his three
other checks. Contrary to petitioners view, the Court finds that its negligence is
the proximate cause of respondents loss.
Proximate cause is that cause which, in a natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and without
which the result would not have occurred.[19] The proximate cause of the loss is not
respondent's manner of writing the date of the check, as it was very clear that he
intended Check No. 275100 to be dated May 30, 1992 and not May 3, 1992.
The proximate cause is petitioners own negligence in debiting the account of the
respondent prior to the date as appearing in the check, which resulted in the
subsequent dishonor of several checks issued by the respondent and the
disconnection by ASELCO and ANECO of his electric supply.
The bank on which the check is drawn, known as the drawee bank, is under strict
liability to pay to the order of the payee in accordance with the drawers
instructions as reflected on the face and by the terms of the check. [20] Thus,
payment made before the date specified by the drawer is clearly against the drawee
bank's duty to its client.
In its memorandum[21] filed before the RTC, petitioner submits that respondent
caused confusion on the true date of the check by writing the date of the check as
5/3/0/92. If, indeed, petitioner was confused on whether the check was dated May
3 or May 30 because of the / which allegedly separated the number 3 from the 0,
petitioner should have required respondent drawer to countersign the said / in order
to ascertain the true intent of the drawer before honoring the check. As a matter of
practice, bank tellers would not receive nor honor such checks which they believe

to be unclear, without the counter-signature of its drawer. Petitioner should have

exercised the highest degree of diligence required of it by ascertaining from the
respondent the accuracy of the entries therein, in order to settle the confusion,
instead of proceeding to honor and receive the check.
Further, petitioner's branch manager, Pedro D. Tradio, in a letter [22] addressed to
ANECO, explained the circumstances surrounding the dishonor of PCIB Check
No. 275097. Thus:
June 11, 1992
Agusan del Norte
This refer (sic) to PCIB Check No. 275097 dated May 16, 1992 in the amount
of P6,472.01 payable to your goodselves issued by Mr. Arcelito B. Tan
(MANWOOD Industries) which was returned by PCIB Mandaue Branch for
insufficiency of funds.
Please be advised that the return of the aforesaid check was a result of an earlier
negotiation to PCIB-Mandaue Branch through a deposit made on May 14, 1992
with SOLIDBANK Carbon Branch, or through Central Bank clearing via
Philippine Clearing House Corporation facilities, of a postdated check which
ironically and without bad faith passed undetected through several eyes from the
payee of the check down to the depository bank and finally the drawee bank
(PCIB) the aforesaid Check No. 275097 issued to you would have been honored
because it would have been sufficiently funded at the time it was negotiated. It
should be emphasized, however, that Mr. Arcelito B. Tan was in no way
responsible for the dishonor of said PCIB Check No. 275097.
We hope that the foregoing will sufficiently explain the circumstances of the
dishonor of PCIB Check No. 275097 and would clear the name and credit of Mr.
Arcelito Tan from any misimpressions which may have resulted from the dishonor
of said check.
Thank you.

Although petitioner failed to specify in the letter the other details of this postdated
check, which passed undetected from the eyes of the payee down to the petitioner
drawee bank, the Court finds that petitioner was evidently referring to no other
than Check No. 275100 which was deposited to Solidbank, and was postdated May
30, 1992. As correctly found by the CA:
In the aforequoted letter of its Manager, appellee Bank expressly
acknowledged that Check No. 275097 (Exh. GGGG) which appellant paid to
ANECO was sufficiently funded at the time it was negotiated, but it was
dishonored as a result of an earlier negotiation to PCIB-Mandaue Branch through
a deposit made on May 14, 1992 with SOLIDBANK xxx xxx xxx of a postdated
check which xxx xxx passed undetected. He further admitted that Mr. Arcelito B.
Tan was in no way responsible for the dishonor of said PCIB Check No. 275097.
Needless to state, since appellee's Manager has cleared appellant of any fault in
the dishonor of the ANECO check, it [necessarily] follows that responsibility
therefor or fault for the dishonor of the check should fall on appellee bank.
Appellee's attempt to extricate itself from its inadvertence must therefore fail in
the face of its Manager's explicit acknowledgment of responsibility for the
inadvertent dishonor of the ANECO check.[23]

Evidently, the bank's negligence was the result of lack of due care required of its
managers and employees in handling the accounts of its clients. Petitioner was
negligent in the selection and supervision of its employees. In Citibank, N.A. v.
Cabamongan,[24] the Court ruled:
x x x Banks handle daily transactions involving millions of pesos. By the
very nature
the degree
of responsibility, care
and trustworthiness expected of their employees and officials is far greater than
those of ordinary clerks and employees. Banks are expected to exercise the
highest degree of diligence in the selection and supervision of their employees.

We now resolve the question on the award of actual, moral and exemplary
damages, as well as attorney's fees by the CA to the respondent.
The CA based the award of actual damages in the amount of P1,864,500.00 on the
purchase orders[25] submitted by respondent. The CA ruled that:

x x x In the case at bar, appellant [respondent herein] presented adequate

evidence to prove losses consisting of unrealized income that he sustained as a
result of the appellee Bank's gross negligence. Appellant identified certain
Purchase Orders from various customers which were not met by reason of the
disruption of the operation of his sawmills when ANECO and ASELCO
disconnected their supply of electricity thereto. x x x

Actual or compensatory damages are those awarded in order to compensate a party

for an injury or loss he suffered. They arise out of a sense of natural justice and are
aimed at repairing the wrong done. Except as provided by law or by stipulation, a
party is entitled to an adequate compensation only for such pecuniary loss as he
has duly proven.[26] To recover actual damages, not only must the amount of loss be
capable of proof; it must also be actually proven with a reasonable degree of
certainty, premised upon competent proof or the best evidence obtainable.[27]
Respondent's claim for damages was based on purchase orders from various
customers which were allegedly not met due to the disruption of the operation of
his sawmills. However, aside from the purchase orders and his testimony,
respondent failed to present competent proof on the specific amount of actual
damages he suffered during the entire period his power was cut off. No other
evidence was provided by respondent to show that the foregoing purchase orders
were not met or were canceled by his various customers. The Court cannot simply
rely on speculation, conjecture or guesswork in determining the amount
of damages.[28]
Moreover, an examination of the purchase orders and job orders reveal that the
orders were due for delivery prior to the period when the power supply of
respondent's two sawmills was cut off on June 1, 1992 to July 20, 1992 and May
28, 1992 to August 24, 1992, respectively. Purchase Order No. 9906[29] delivery
date is May 4, 1992; Purchase Order No. 9269[30]delivery date is March 19, 1992;
Purchase Order No. 147796[31] is due for delivery on January 31, 1992; Purchase
Order No. 76000[32] delivery date is February and March 1992; and Job Order No.
1824,[33] dated March 18, 1992, has a 15 days duration of work. Clearly, the

disconnection of his electricity during the period May 28, 1992 to August 24, 1992
could not possibly affect his sawmill operations and prior orders therefrom.
Given the dearth of respondent's evidence on the matter, the Court resolves to
delete the award of actual damages rendered by the CA in favor of respondent for
his unrealized income.
Nonetheless, in the absence of competent proof on the actual damages suffered,
respondent is entitled to temperate damages.Under Article 2224 of the Civil Code
of the Philippines, temperate or moderate damages, which are more than nominal
but less than compensatory damages, may be recovered when the court finds that
some pecuniary loss has been suffered but its amount cannot, from the nature of
the case, be proved with certainty.[34] The allowance of temperate damages when
actual damages were not adequately proven is ultimately a rule drawn from equity,
the principle affording relief to those definitely injured who are unable to prove
how definite the injury.[35]
It is apparent that respondent suffered pecuniary loss. The negligence of petitioner
triggered the disconnection of his electrical supply, which temporarily halted his
business operations and the consequent loss of business opportunity. However, due
to the insufficiency of evidence before Us, We cannot place its amount with
certainty. Article 2216[36] of the Civil Code instructs that assessment of damages is
left to the discretion of the court according to the circumstances of each
case. Under the circumstances, the sum of P50,000.00 as temperate damages is
Anent the award of moral damages, it is settled that moral damages are meant to
compensate the claimant for any physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation
and similar injuries unjustly caused.[37] In Philippine National Bank v. Court of
Appeals,[38] the Court held that a bank is under obligation to treat the accounts of its

depositors with meticulous care whether such account consists only of a few
hundred pesos or of millions of pesos. Responsibility arising from negligence in
the performance of every kind of obligation is demandable. While petitioner's
negligence in that case may not have been attended with malice and bad faith, the
banks' negligence caused respondent to suffer mental anguish, serious anxiety,
embarrassment and humiliation. In said case, We ruled that respondent therein was
entitled to recover reasonable moral damages.
In this case, the unexpected cutting off of respondent's electricity, which resulted in
the stoppage of his business operations, had caused him to suffer humiliation,
mental anguish and serious anxiety. The award of P50,000.00 is reasonable,
considering the reputation and social standing of respondent. As found by the CA,
as an accredited supplier, respondent had been reposed with a certain degree of
trust by various reputable and well- established corporations.
On the award of exemplary damages, Article 2229 of the Civil Code states:
Art. 2229. Exemplary or corrective damages are imposed, by way of
example or correction for the public good, in addition to themoral, temperate,
liquidated or compensatory damages.

The law allows the grant of exemplary damages to set an example for the public
good. The banking system has become an indispensable institution in the modern
world and plays a vital role in the economic life of every civilized society. Whether
as mere passive entities for the safekeeping and saving of money or as active
instruments of business and commerce, banks have attained an ubiquitous presence
among the people, who have come to regard them with respect and even gratitude
and most of all, confidence. For this reason, banks should guard against injury
attributable to negligence or bad faith on its part. Without a doubt, it has been
repeatedly emphasized that since the banking business is impressed with public
interest, of paramount importance thereto is the trust and confidence of the public
in general. Consequently, the highest degree of diligence is expected, and high

standards of integrity and performance are even required of it. [39] Petitioner, having
failed in this respect, the award of exemplary damages in the
amount of P50,000.00 is in order.
As to the award of attorney's fees, Article 2208 [40] of the Civil Code provides,
among others, that attorney's fees may be recovered when exemplary damages are
awarded or when the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest. [41] Respondent
has been forced to undergo unnecessary trouble and expense to protect his interest.
The Court affirms the appellate courts award of attorneys fees in the amount
of P30,000.00.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision and

Resolution of the Court of Appeals in CA-G.R. CV No. 41928, dated May 31,
2004 and August 24, 2004, respectively, are AFFIRMED with the
1. The award of One Million Eight Hundred Sixty-Four Thousand and Five
Hundred Pesos (P1,864,500.00) as actual damages, in favor of respondent Arcelito
B. Tan, is DELETED; and
2. Petitioner Equitable PCI Bank is instead directed to pay respondent the amount
of Fifty Thousand Pesos (P50,000.00) astemperate damages.

173259 July

G.R. No. 173259


- versus -

CORONA, C.J., Chairperson,


F.F. CRUZ and CO., INC.
July 25, 2011

As between a bank and its depositor, where the banks negligence is the proximate
cause of the loss and the depositor is guilty of contributory negligence, the greater
proportion of the loss shall be borne by the bank.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of
Appeals January 31, 2006 Decision[1] in CA-G.R. CV No. 81349, which modified the
January 30, 2004 Decision[2] of the Regional Trial Court of Manila City, Branch 46 in
Civil Case No. 97-84010, and the June 26, 2006 Resolution[3] denying petitioners motion
for reconsideration.

Factual Antecedents
The antecedents are aptly summarized by the appellate court:
In its complaint, it is alleged that [respondent F.F. Cruz & Co., Inc.]
(hereinafter FFCCI) opened savings/current or so-called combo account No.
0219-830-146 and dollar savings account No. 0219-0502-458-6 with
[petitioner Philippine National Bank] (hereinafter PNB) at its Timog Avenue
Branch. Its President Felipe Cruz (or Felipe) and Secretary-Treasurer Angelita
A. Cruz (or Angelita) were the named signatories for the said accounts.
The said signatories on separate but coeval dates left for and returned
from the Unites States of America, Felipe on March 18, 1995 until June 10,

1995 while Angelita followed him on March 29, 1995 and returned ahead on
May 9, 1995.
While they were thus out of the country, applications for cashiers and
managers [checks] bearing Felipes [signature] were presented to and both
approved by the PNB. The first was on March 27, 1995 for P9,950,000.00
payable to a certain Gene B. Sangalang and the other one was on April 24,
1995 for P3,260,500.31 payable to one Paul Bautista. The amounts of these
checks were then debited by the PNB against the combo account of [FFCCI].
When Angelita returned to the country, she had occasion to examine
the PNB statements of account of [FFCCI] for the months of February to
August 1995 and she noticed the deductions of P9,950,000.00
and P3,260,500.31. Claiming that these were unauthorized and fraudulently
made, [FFCCI] requested PNB to credit back and restore to its account the
value of the checks. PNB refused, and thus constrained [FFCCI] filed the
instant suit for damages against the PNB and its own accountant Aurea
Caparas (or Caparas).
In its traverse, PNB averred lack of cause of action. It alleged that it
exercised due diligence in handling the account of [FFCCI]. The applications
for managers check have passed through the standard bank procedures and it
was only after finding no infirmity that these were given due course. In fact, it
was no less than Caparas, the accountant of [FFCCI], who confirmed the
regularity of the transaction. The delay of [FFCCI] in picking up and going
over the bank statements was the proximate cause of its self-proclaimed injury.
Had [FFCCI] been conscientious in this regard, the alleged chicanery would
have been detected early on and Caparas effectively prevented from
absconding with its millions. It prayed for the dismissal of the complaint.[4]

Regional Trial Courts Ruling

The trial court ruled that F.F. Cruz and Company, Inc. ( FFCCI) was guilty of
negligence in clothing Aurea Caparas (Caparas) with authority to make decisions on and
dispositions of its account which paved the way for the fraudulent transactions
perpetrated by Caparas; that, in practice, FFCCI waived the two-signature requirement in
transactions involving the subject combo account so much so that Philippine National
Bank (PNB) could not be faulted for honoring the applications for managers check even

if only the signature of Felipe Cruz appeared thereon; and that FFCCI was negligent in
not immediately informing PNB of the fraud.
On the other hand, the trial court found that PNB was, likewise, negligent in not
calling or personally verifying from the authorized signatories the legitimacy of the
subject withdrawals considering that they were in huge amounts. For this reason, PNB
had the last clear chance to prevent the unauthorized debits from FFCCIs combo
account. Thus, PNB should bear the whole loss
WHEREFORE, judgment is hereby rendered ordering defendant
[PNB] to pay plaintiff [FFCCI] P13,210,500.31 representing the amounts
debited against plaintiffs account, with interest at the legal rate computed from
the filing of the complaint plus costs of suit.

Court of Appeals Ruling

On January 31, 2006, the CA rendered the assailed Decision affirming with modification
the Decision of the trial court, viz:
is AFFIRMED with
the MODIFICATION that [PNB] shall pay [FFCCI] only 60% of the actual
damages awarded by the trial court while the remaining 40% shall be borne by

The appellate court ruled that PNB was negligent in not properly verifying the
genuineness of the signatures appearing on the two applications for managers check as
evidenced by the lack of the signature of the bank verifier thereon. Had this procedure
been followed, the forgery would have been detected.
Nonetheless, the appellate court found FFCCI guilty of contributory negligence
because it clothed its accountant/bookkeeper Caparas with apparent authority to transact
business with PNB. In addition, FFCCI failed to timely examine its monthly statement of
account and report the discrepancy to PNB within a reasonable period of time to prevent

or recover the loss. FFCCIs contributory negligence, thus, mitigated the banks
liability. Pursuant to the rulings in Philippine Bank of Commerce v. Court of
Appeals[7] and The Consolidated Bank & Trust Corporation v. Court of Appeals, [8] the
appellate court allocated the damages on a 60-40 ratio with the bigger share to be borne
by PNB.
From this decision, both FFCCI and PNB sought review before this Court.
On August 17, 2006, FFCCI filed its petition for review on certiorari which was
docketed as G.R. No. 173278.[9] On March 7, 2007, the Court issued a
Resolution[10] denying said petition. On June 13, 2007, the Court issued another
Resolution[11] denying FFCCIs motion for reconsideration. In denying the aforesaid
petition, the Court ruled that FFCCI essentially raises questions of fact which are, as a
rule, not reviewable under a Rule 45 petition; that FFCCI failed to show that its case fell
within the established exceptions to this rule; and that FFCCI was guilty of contributory
negligence. Thus, the appellate court correctly mitigated PNBs liability.
On July 13, 2006, PNB filed its petition for review on certiorari which is the
subject matter of this case.
Whether the Court of Appeals seriously erred when it found PNB guilty of
Our Ruling
We affirm the ruling of the CA.
PNB is guilty of negligence.
Preliminarily, in G.R. No. 173278, we resolved with finality [13] that FFCCI is
guilty of contributory negligence, thus, making it partly liable for the loss (i.e., as to 40%
thereof) arising from the unauthorized withdrawal of P13,210,500.31 from its combo
account. The case before us is, thus, limited to PNBs alleged negligence in the subject
transactions which the appellate court found to be the proximate cause of the loss, thus,

making it liable for the greater part of the loss (i.e., as to 60% thereof) pursuant to our
rulings inPhilippine Bank of Commerce v. Court of Appeals [14] and The Consolidated
Bank & Trust Corporation v. Court of Appeals.[15]
PNB contends that it was not negligent in verifying the genuineness of the
signatures appearing on the subject applications for managers check. It claims that it
followed the standard operating procedure in the verification process and that four bank
officers examined the signatures and found the same to be similar with those found in the
signature cards of FFCCIs authorized signatories on file with the bank.
PNB raises factual issues which are generally not proper for review under a Rule
45 petition. While there are exceptions to this rule, we find none applicable to the present
case. As correctly found by the appellate court, PNB failed to make the proper
verification because the applications for the managers check do not bear the signature of
the bank verifier. PNB concedes the absence[16] of the subject signature but argues that
the same was the result of inadvertence. It posits that the testimonies of Geronimo
Gallego (Gallego), then the branch manager of PNB Timog Branch, and Stella San
Diego (San Diego), then branch cashier, suffice to establish that the signature verification
process was duly followed.
We are not persuaded.
First, oral testimony is not as reliable as documentary evidence. [17] Second, PNBs
own witness, San Diego, testified that in the verification process, the principal duty to
determine the genuineness of the signature devolved upon the account analyst.
However, PNB did not present the account analyst to explain his or her failure to sign
the box for signature and balance verification of the subject applications for managers
check, thus, casting doubt as to whether he or she did indeed verify the signatures
thereon. Third, we cannot fault the appellate court for not giving weight to the
testimonies of Gallego and San Diego considering that the latter are naturally interested
in exculpating themselves from any liability arising from the failure to detect the
forgeries in the subject transactions. Fourth, Gallego admitted that PNBs employees
received training on detecting forgeries from the National Bureau of Investigation.
However, Emmanuel Guzman, then NBI senior document examiner, testified, as an
expert witness, that the forged signatures in the subject applications for managers check
contained noticeable and significant differences from the genuine signatures of FFCCIs

authorized signatories and that the forgeries should have been detected or observed by a
trained signature verifier of any bank.[20]
Given the foregoing, we find no reversible error in the findings of the appellate
court that PNB was negligent in the handling of FFCCIs combo account, specifically,
with respect to PNBs failure to detect the forgeries in the subject applications for
managers check which could have prevented the loss. As we have often ruled, the
banking business is impressed with public trust. [21] A higher degree of diligence is
imposed on banks relative to the handling of their affairs than that of an ordinary business
enterprise.[22] Thus, the degree of responsibility, care and trustworthiness expected of their
officials and employees is far greater than those of ordinary officers and employees in
other enterprises.[23] In the case at bar, PNB failed to meet the high standard of diligence
required by the circumstances to prevent the fraud. In Philippine Bank of Commerce v.
Court of Appeals[24] and The Consolidated Bank & Trust Corporation v. Court of
Appeals,[25] where the banks negligence is the proximate cause of the loss and the
depositor is guilty of contributory negligence, we allocated the damages between the
bank and the depositor on a 60-40 ratio. We apply the same ruling in this case
considering that, as shown above, PNBs negligence is the proximate cause of the loss
while the issue as to FFCCIs contributory negligence has been settled with finality in
G.R. No. 173278. Thus, the appellate court properly adjudged PNB to bear the greater
part of the loss consistent with these rulings.
WHEREFORE, the petition is DENIED. The January 31, 2006 Decision and
June 26, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 81349
Costs against petitioner.
Gonzales vs PCIB

Gonzales was a client of PCIB. He was granted a credit line by the bank
through a Credit-On-Hand-Loan Agreement (COHLA). He drew from the credit
line through a check and said credit line was secured by a collateral in the

form of his accounts with PCIB which was a foreign currency deposit worth
USD 8000.
He obtained below loans from PCIB:
1. obtained with his wife P500K
2. obtained with spouses Panlilio P1M, P300K
the above loans (total: 1.8M) were covered by 3 promissory notes and were
secured by a real estage mortgage on a land co owned by Gonzales and
spouses Panlilio. the promissory notes states the solidary liability of Gonzales
andspouses Panlilio. However, it was the spouses Panlilio who received the
proceeds of 1.8M. The monthly interest dues were paid by the spouses
Panlilio through auto debit from their PCIB account. however, they defaulted
in the payment because their PCIB account had insufficient deposits.
Gonzales issued a check to Rene Unson worth 250K drawn against his credit
line but said check was subsequently dishonored due to termination of
gonzales credit line because of the unpaid period interest dues from the
loans. PCIB also froze the foreign currency deposit account of Gonzales.
Issue: W/N Gonzales is liable for the three promissory notes covering
PHP1.8M loan he made with spouses Panlilio?
Yes. Gonzales was an accommodation party of the loan. An accommodation
party is one who meets all the three requisites according to Sec 29 of NIL:
1. he must be a party to the instrument, signing as a maker, drawer,
acceptor, or indorser
2. he must not receive value therefor
3. he must sign for the purpose of lending his name or credit to some other

an accommodation party lends his name to enable the accommodated

partyy to obtain credit or raise money. he receives no part but assumed
the relation between an accommodation party is one of principal and surety,
the AP being the surety. As such, he is deemed an original promisor and
debtor from the beginning. he is considered in law as the same party as the
debtor in relation to whatever is adjudged toruching the obligation of the
latter since their liabilities are interwoven.
Lastly, the solidary nature of the loan was expressly stated in the promissory
notes which state:
the undersigned JOINTLY AND SEVERALLY promise to pay xx.
GR No. 139130, NOVEMBER 27, 2002
Facts:Illusorio is a client-depositor of Manila Baking Corporation. He alleges that the bank was negligent in taking
care of his bank deposits because his secretary, Katherine Esteban, was able to withdraw around P119,000 and
transfer it to her own bank account. Esteban was able to do this because, as Illusorios secretary, she was entrusted
with his check books and credit cards whenever he leaves the country.
However, Manila Banking avers that it exercised due diligence in dealing with the withdrawals made by Esteban.
Issue:Whether or not Manila Banking was negligent in handling the account of Illusorio.
Held:No, in fact it was Illusorio who is guilty of negligence. Negligence is the omission to do something which a
reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or
the doing of something which a prudent and reasonable man would do. In the present case, it appears that petitioner
accorded his secretary unusual degree of trust and unrestricted access to his credit cards, passbooks, check books,
bank statements, including custody and possession of cancelled checks and reconciliation of accounts.
Petitioners failure to examine his bank statements appears as the proximate cause of his own damage. Proximate
cause is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would not have occurred. In the instant case, the bank was not
shown to be remiss in its duty of sending monthly bank statements to petitioner so that any error or discrepancy in the
entries therein could be brought to the banks attention at the earliest opportunity. But, petitioner failed to examine
these bank statements not because he was prevented by some cause in not doing so, but because he did not pay
sufficient attention to the matter. Had he done so, he could have been alerted to any anomaly committed against him.

G.R. No. 159132

December 18, 2008

FE CAYAO-LASAM, petitioner,
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by
Dr. Fe Cayao-Lasam (petitioner) seeking to annul the Decision 1 dated July 4, 2003 of the Court of
Appeals (CA) in CA-G.R. SP No. 62206.
The antecedent facts:
On July 28, 1994, respondent, three months pregnant Editha Ramolete (Editha) was brought to the
Lorma Medical Center (LMC) in San Fernando, La Union due to vaginal bleeding. Upon advice of
petitioner relayed via telephone, Editha was admitted to the LMC on the same day. A pelvic
sonogram2 was then conducted on Editha revealing the fetus weak cardiac pulsation. 3 The following
day, Edithas repeat pelvic sonogram4 showed that aside from the fetus weak cardiac pulsation, no
fetal movement was also appreciated. Due to persistent and profuse vaginal bleeding, petitioner
advised Editha to undergo a Dilatation and Curettage Procedure (D&C) or "raspa."
On July 30, 1994, petitioner performed the D&C procedure. Editha was discharged from the hospital
the following day.
On September 16, 1994, Editha was once again brought at the LMC, as she was suffering from
vomiting and severe abdominal pains. Editha was attended by Dr. Beatriz de la Cruz, Dr. Victor B.
Mayo and Dr. Juan V. Komiya. Dr. Mayo allegedly informed Editha that there was a dead fetus in the
latters womb. After, Editha underwent laparotomy,5 she was found to have a massive intraabdominal hemorrhage and a ruptured uterus. Thus, Editha had to undergo a procedure for
hysterectomy6 and as a result, she has no more chance to bear a child.
On November 7, 1994, Editha and her husband Claro Ramolete (respondents) filed a Complaint 7 for
Gross Negligence and Malpractice against petitioner before the Professional Regulations
Commission (PRC).
Respondents alleged that Edithas hysterectomy was caused by petitioners unmitigated negligence
and professional incompetence in conducting the D&C procedure and the petitioners failure to
remove the fetus inside Edithas womb.8 Among the alleged acts of negligence were: first,
petitioners failure to check up, visit or administer medication on Editha during her first day of
confinement at the LMC;9 second, petitioner recommended that a D&C procedure be performed on
Editha without conducting any internal examination prior to the procedure; 10 third, petitioner

immediately suggested a D&C procedure instead of closely monitoring the state of pregnancy of
In her Answer,12 petitioner denied the allegations of negligence and incompetence with the following
explanations: upon Edithas confirmation that she would seek admission at the LMC, petitioner
immediately called the hospital to anticipate the arrival of Editha and ordered through the telephone
the medicines Editha needed to take, which the nurses carried out; petitioner visited Editha on the
morning of July 28, 1994 during her rounds; on July 29, 1994, she performed an internal
examination on Editha and she discovered that the latters cervix was already open, thus, petitioner
discussed the possible D&C procedure, should the bleeding become more profuse; on July 30 1994,
she conducted another internal examination on Editha, which revealed that the latters cervix was
still open; Editha persistently complained of her vaginal bleeding and her passing out of some meaty
mass in the process of urination and bowel movement; thus, petitioner advised Editha to undergo
D&C procedure which the respondents consented to; petitioner was very vocal in the operating room
about not being able to see an abortus;13 taking the words of Editha to mean that she was passing
out some meaty mass and clotted blood, she assumed that the abortus must have been expelled in
the process of bleeding; it was Editha who insisted that she wanted to be discharged; petitioner
agreed, but she advised Editha to return for check-up on August 5, 1994, which the latter failed to
Petitioner contended that it was Edithas gross negligence and/or omission in insisting to be
discharged on July 31, 1994 against doctors advice and her unjustified failure to return for check-up
as directed by petitioner that contributed to her life-threatening condition on September 16, 1994;
that Edithas hysterectomy was brought about by her very abnormal pregnancy known as placenta
increta, which was an extremely rare and very unusual case of abdominal placental implantation.
Petitioner argued that whether or not a D&C procedure was done by her or any other doctor, there
would be no difference at all because at any stage of gestation before term, the uterus would rupture
just the same.
On March 4, 1999, the Board of Medicine (the Board) of the PRC rendered a Decision, 14 exonerating
petitioner from the charges filed against her. The Board held:
Based on the findings of the doctors who conducted the laparotomy on Editha, hers is a case
of Ectopic Pregnancy Interstitial. This type of ectopic pregnancy is one that is being
protected by the uterine muscles and manifestations may take later than four (4) months and
only attributes to two percent (2%) of ectopic pregnancy cases.
When complainant Editha was admitted at Lorma Medical Center on July 28, 1994 due to
vaginal bleeding, an ultra-sound was performed upon her and the result of the Sonogram
Test reveals a morbid fetus but did not specify where the fetus was located. Obstetricians will
assume that the pregnancy is within the uterus unless so specified by the Sonologist who
conducted the ultra-sound. Respondent (Dr. Lasam) cannot be faulted if she was not able to
determine that complainant Editha is having an ectopic pregnancy interstitial. The D&C
conducted on Editha is necessary considering that her cervix is already open and so as to
stop the profuse bleeding. Simple curettage cannot remove a fetus if the patient is having an
ectopic pregnancy, since ectopic pregnancy is pregnancy conceived outside the uterus and

curettage is done only within the uterus. Therefore, a more extensive operation needed in
this case of pregnancy in order to remove the fetus.15
Feeling aggrieved, respondents went to the PRC on appeal. On November 22, 2000, the PRC
rendered a Decision16 reversing the findings of the Board and revoking petitioners authority or
license to practice her profession as a physician. 17
Petitioner brought the matter to the CA in a Petition for Review under Rule 43 of the Rules of Court.
Petitioner also dubbed her petition as one for certiorari18 under Rule 65 of the Rules of Court.
In the Decision dated July 4, 2003, the CA held that the Petition for Review under Rule 43 of the
Rules of Court was an improper remedy, as the enumeration of the quasi-judicial agencies in Rule
43 is exclusive.19 PRC is not among the quasi-judicial bodies whose judgment or final orders are
subject of a petition for review to the CA, thus, the petition for review of the PRC Decision, filed at
the CA, was improper. The CA further held that should the petition be treated as a petition
for certiorari under Rule 65, the same would still be dismissed for being improper and premature.
Citing Section 2620 of Republic Act (R.A.) No. 2382 or the Medical Act of 1959, the CA held that the
plain, speedy and adequate remedy under the ordinary course of law which petitioner should have
availed herself of was to appeal to the Office of the President. 21
Hence, herein petition, assailing the decision of the CA on the following grounds:


The Court will first deal with the procedural issues.
Petitioner claims that the law does not allow complainants to appeal to the PRC from the decision of
the Board. She invokes Article IV, Section 35 of the Rules and Regulations Governing the Regulation
and Practice of Professionals, which provides:
Sec. 35. The respondent may appeal the decision of the Board within thirty days from receipt
thereof to the Commission whose decision shall be final. Complainant, when allowed by
law, may interpose an appeal from the Decision of the Board within the same
period. (Emphasis supplied)
Petitioner asserts that a careful reading of the above law indicates that while the respondent, as a
matter of right, may appeal the Decision of the Board to the Commission, the complainant may
interpose an appeal from the decision of the Board only when so allowed by law.23 Petitioner cited
Section 26 of Republic Act No. 2382 or "The Medical Act of 1959," to wit:
Section 26. Appeal from judgment. The decision of the Board of Medical Examiners (now
Medical Board) shall automatically become final thirty days after the date of its promulgation
unless the respondent, during the same period, has appealed to the Commissioner of Civil
Service (now Professional Regulations Commission) and later to the Office of the President
of the Philippines. If the final decision is not satisfactory, the respondent may ask for a review
of the case, or may file in court a petition for certiorari.
Petitioner posits that the reason why the Medical Act of 1959 allows only the respondent in an
administrative case to file an appeal with the Commission while the complainant is not allowed to do

so is double jeopardy. Petitioner is of the belief that the revocation of license to practice a profession
is penal in nature.24
The Court does not agree.
For one, the principle of double jeopardy finds no application in administrative cases. Double
jeopardy attaches only: (1) upon a valid indictment; (2) before a competent court; (3) after
arraignment; (4) when a valid plea has been entered; and (5) when the defendant was acquitted or
convicted, or the case was dismissed or otherwise terminated without the express consent of the
accused.25 These elements were not present in the proceedings before the Board of Medicine, as the
proceedings involved in the instant case were administrative and not criminal in nature. The Court
has already held that double jeopardy does not lie in administrative cases. 26
Moreover, Section 35 of the Rules and Regulations Governing the Regulation and Practice of
Professionals cited by petitioner was subsequently amended to read:
Sec. 35. The complainant/respondent may appeal the order, the resolution or the decision
of the Board within thirty (30) days from receipt thereof to the Commission whose decision
shall be final and executory. Interlocutory order shall not be appealable to the Commission.
(Amended by Res. 174, Series of 1990).27(Emphasis supplied)
Whatever doubt was created by the previous provision was settled with said amendment. It is
axiomatic that the right to appeal is not a natural right or a part of due process, but a mere statutory
privilege that may be exercised only in the manner prescribed by law.28 In this case, the clear intent
of the amendment is to render the right to appeal from a decision of the Board available to both
complainants and respondents.
Such conclusion is bolstered by the fact that in 2006, the PRC issued Resolution No. 06-342(A), or
the New Rules of Procedure in Administrative Investigations in the Professional Regulations
Commission and the Professional Regulatory Boards, which provides for the method of appeal, to
Sec. 1. Appeal; Period Non-Extendible.- The decision, order or resolution of the Board
shall be final and executory after the lapse of fifteen (15) days from receipt of the decision,
order or resolution without an appeal being perfected or taken by either the respondent or
the complainant. A party aggrieved by the decision, order or resolution may file a
notice of appeal from the decision, order or resolution of the Board to the
Commission within fifteen (15) days from receipt thereof, and serving upon the adverse
party a notice of appeal together with the appellants brief or memorandum on appeal, and
paying the appeal and legal research fees. x x x29
The above-stated provision does not qualify whether only the complainant or respondent may file an
appeal; rather, the new rules provide that "a party aggrieved" may file a notice of appeal. Thus, either
the complainant or the respondent who has been aggrieved by the decision, order or resolution of
the Board may appeal to the Commission. It is an elementary rule that when the law speaks in clear
and categorical language, there is no need, in the absence of legislative intent to the contrary, for

any interpretation.30 Words and phrases used in the statute should be given their plain, ordinary, and
common usage or meaning.31
Petitioner also submits that appeals from the decisions of the PRC should be with the CA, as Rule
4332 of the Rules of Court was precisely formulated and adopted to provide for a uniform rule of
appellate procedure for quasi-judicial agencies. 33 Petitioner further contends that a quasi-judicial
body is not excluded from the purview of Rule 43 just because it is not mentioned therein. 34
On this point, the Court agrees with the petitioner.
Sec. 1, Rule 43 of the Rules of Court provides:
Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the
Court of Tax Appeals, and from awards, judgments, final orders or resolutions of or
authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions.
Among these agencies are the Civil Service Commission, Central Board of Assessment
Appeals, Securities and Exchange Commission, Office of the President, Land Registration
Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents,
Trademarks and Technology Transfer, National Electrification Administration, Energy
Regulatory Board, National Telecommunications Commission, Department of Agrarian
Reform under Republic Act No. 6657, Government Service Insurance System, Employees
Compensation Commission, Agricultural Inventions Board, Insurance Commission,
Philippine Atomic Energy Commission, Board of Investments, Construction Industry
Arbitration Commission, and voluntary arbitrators authorized by law. (Emphasis supplied)
Indeed, the PRC is not expressly mentioned as one of the agencies which are expressly enumerated
under Section 1, Rule 43 of the Rules of Court. However, its absence from the enumeration does
not, by this fact alone, imply its exclusion from the coverage of said Rule. 35 The Rule expressly
provides that it should be applied to appeals from awards, judgments final orders or resolutions of
any quasi-judicial agency in the exercise of its quasi-judicial functions. The phrase "among these
agencies" confirms that the enumeration made in the Rule is not exclusive to the agencies therein
Specifically, the Court, in Yang v. Court of Appeals,37 ruled
that Batas Pambansa (B.P.) Blg. 12938 conferred upon the CA exclusive appellate jurisdiction over
appeals from decisions of the PRC. The Court held:
The law has since been changed, however, at least in the matter of the particular court to
which appeals from the Commission should be taken. On August 14, 1981, Batas Pambansa
Bilang 129 became effective and in its Section 29, conferred on the Court of Appeals
"exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions except those falling under the appellate jurisdiction of the Supreme Court. x x
x." In virtue of BP 129, appeals from the Professional Regulations Commission are
now exclusively cognizable by the Court of Appeals.39 (Emphasis supplied)

Clearly, the enactment of B.P. Blg. 129, the precursor of the present Rules of Civil
Procedure,40 lodged with the CA such jurisdiction over the appeals of decisions made by the PRC.
Anent the substantive merits of the case, petitioner questions the PRC decision for being without an
expert testimony to support its conclusion and to establish the cause of Edithas injury. Petitioner
avers that in cases of medical malpractice, expert testimony is necessary to support the conclusion
as to the cause of the injury.41
Medical malpractice is a particular form of negligence which consists in the failure of a physician or
surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily
employed by the profession generally, under similar conditions, and in like surrounding
circumstances.42 In order to successfully pursue such a claim, a patient must prove that the
physician or surgeon either failed to do something which a reasonably prudent physician or surgeon
would not have done, and that the failure or action caused injury to the patient. 43
There are four elements involved in medical negligence cases: duty, breach, injury and proximate
A physician-patient relationship was created when Editha employed the services of the petitioner. As
Edithas physician, petitioner was duty-bound to use at least the same level of care that any
reasonably competent doctor would use to treat a condition under the same circumstances. 45 The
breach of these professional duties of skill and care, or their improper performance by a physician
surgeon, whereby the patient is injured in body or in health, constitutes actionable malpractice. 46 As
to this aspect of medical malpractice, the determination of the reasonable level of care and the
breach thereof, expert testimony is essential.47 Further, inasmuch as the causes of the injuries
involved in malpractice actions are determinable only in the light of scientific knowledge, it has been
recognized that expert testimony is usually necessary to support the conclusion as to causation. 48
In the present case, respondents did not present any expert testimony to support their claim that
petitioner failed to do something which a reasonably prudent physician or surgeon would have done.
Petitioner, on the other hand, presented the testimony of Dr. Augusto M. Manalo, who was clearly an
expert on the subject.
Generally, to qualify as an expert witness, one must have acquired special knowledge of the subject
matter about which he or she is to testify, either by the study of recognized authorities on the subject
or by practical experience.49
Dr. Manalo specializes in gynecology and obstetrics, authored and co-authored various publications
on the subject, and is a professor at the University of the Philippines. 50 According to him, his
diagnosis of Edithas case was "Ectopic Pregnancy Interstitial (also referred to as Cornual),
Ruptured."51 In stating that the D&C procedure was not the proximate cause of the rupture of
Edithas uterus resulting in her hysterectomy, Dr. Manalo testified as follows:
Atty. Hidalgo:

Q: Doctor, we want to be clarified on this matter. The complainant had testified here that
the D&C was the proximate cause of the rupture of the uterus. The condition which she
found herself in on the second admission. Will you please tell us whether that is true or not?
A: Yah, I do not think so for two reasons. One, as I have said earlier, the instrument
cannot reach the site of the pregnancy, for it to further push the pregnancy outside the
uterus. And, No. 2, I was thinking a while ago about another reason- well, why I dont think
so, because it is the triggering factor for the rupture, it could havethe rupture could have
occurred much earlier, right after the D&C or a few days after the D&C.
Q: In this particular case, doctor, the rupture occurred to have happened minutes prior to
the hysterectomy or right upon admission on September 15, 1994 which is about 1
months after the patient was discharged, after the D&C was conducted. Would you tell us
whether there is any relation at all of the D&C and the rupture in this particular instance?
A: I dont think so for the two reasons that I have just mentioned- that it would not
be possible for the instrument to reach the site of pregnancy. And, No. 2, if it is because
of the D&C that rupture could have occurred earlier.52 (Emphases supplied)
Clearly, from the testimony of the expert witness and the reasons given by him, it is evident that the
D&C procedure was not the proximate cause of the rupture of Edithas uterus.
During his cross-examination, Dr. Manalo testified on how he would have addressed Edithas
condition should he be placed in a similar circumstance as the petitioner. He stated:
Atty. Ragonton:
Q: Doctor, as a practicing OB-Gyne, when do you consider that you have done a good,
correct and ideal dilatation and curettage procedure?
A: Well, if the patient recovers. If the patient gets well. Because even after the procedure,
even after the procedure you may feel that you have scraped everything, the patient stops
bleeding, she feels well, I think you should still have some reservations, and wait a little more
Q: If you were the OB-Gyne who performed the procedure on patient Editha Ramolete,
would it be your standard practice to check the fetal parts or fetal tissues that were allegedly
A: From what I have removed, yes. But in this particular case, I think it was assumed that
it was part of the meaty mass which was expelled at the time she was urinating and flushed
in the toilet. So theres no way.

There was [sic] some portions of the fetal parts that were removed?


No, it was described as scanty scraping if I remember it rightscanty.


And you would not mind checking those scant or those little parts that were removed?

A: Well, the fact that it was described means, I assume that it was checked, no. It
was described as scanty and the color also, I think was described. Because it would be
very unusual, even improbable that it would not be examined, because when you
scrape, the specimens are right there before your eyes. Its in front of you. You can
touch it. In fact, some of them will stick to the instrument and therefore to peel it off
from the instrument, you have to touch them. So, automatically they are examined
Q: As a matter of fact, doctor, you also give telephone orders to your patients through
A: Yes, yes, we do that, especially here in Manila because you know, sometimes a doctor
can also be tied-up somewhere and if you have to wait until he arrive at a certain place
before you give the order, then it would be a lot of time wasted. Because if you know your
patient, if you have handled your patient, some of the symptoms you can interpret that
comes with practice. And, I see no reason for not allowing telephone orders unless it is
the first time that you will be encountering the patient. That you have no idea what the
problem is.

But, doctor, do you discharge patients without seeing them?

A: Sometimes yes, depending on how familiar I am with the patient. We are on the
question of telephone orders. I am not saying that that is the idle [sic] thing to do, but I think
the reality of present day practice somehow justifies telephone orders. I have patients
whom I have justified and then all of a sudden, late in the afternoon or late in the evening,
would suddenly call they have decided that they will go home inasmuch as they anticipated
that I will discharge them the following day. So, I just call and ask our resident on duty or the
nurse to allow them to go because I have seen that patient and I think I have full grasp of her
problems. So, thats when I make this telephone orders. And, of course before giving that
order I ask about how she feels.53 (Emphases supplied)
From the foregoing testimony, it is clear that the D&C procedure was conducted in accordance with
the standard practice, with the same level of care that any reasonably competent doctor would use
to treat a condition under the same circumstances, and that there was nothing irregular in the way
the petitioner dealt with Editha.
Medical malpractice, in our jurisdiction, is often brought as a civil action for damages under Article
217654 of the Civil Code. The defenses in an action for damages, provided for under Article 2179 of
the Civil Code are:
Art. 2179. When the plaintiffs own negligence was the immediate and proximate cause
of his injury, he cannot recover damages. But if his negligence was only contributory, the
immediate and proximate cause of the injury being the defendants lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.

Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces injury, and without which the result would not have
occurred.55 An injury or damage is proximately caused by an act or a failure to act, whenever it
appears from the evidence in the case that the act or omission played a substantial part in bringing
about or actually causing the injury or damage; and that the injury or damage was either a direct
result or a reasonably probable consequence of the act or omission. 56
In the present case, the Court notes the findings of the Board of Medicine:
When complainant was discharged on July 31, 1994, herein respondent advised her to
return on August 4, 1994 or four (4) days after the D&C. This advise was clear in
complainants Discharge Sheet. However, complainant failed to do so. This being the
case, the chain of continuity as required in order that the doctrine of proximate cause can be
validly invoked was interrupted. Had she returned, the respondent could have examined
her thoroughly.57 x x x (Emphases supplied)
Also, in the testimony of Dr. Manalo, he stated further that assuming that there was in fact a
misdiagnosis, the same would have been rectified if Editha followed the petitioners order to return
for a check-up on August 4, 1994. Dr. Manalo stated:
Granting that the obstetrician-gynecologist has been misled (justifiably) up to thus
point that there would have been ample opportunity to rectify the misdiagnosis, had
the patient returned, as instructed for her follow-up evaluation. It was one and a half
months later that the patient sought consultation with another doctor. The continued
growth of an ectopic pregnancy, until its eventual rupture, is a dynamic process. Much
change in physical findings could be expected in 1 months, including the emergence of
suggestive ones.58
It is undisputed that Editha did not return for a follow-up evaluation, in defiance of the petitioners
advise. Editha omitted the diligence required by the circumstances which could have avoided the
injury. The omission in not returning for a follow-up evaluation played a substantial part in bringing
about Edithas own injury. Had Editha returned, petitioner could have conducted the proper medical
tests and procedure necessary to determine Edithas health condition and applied the corresponding
treatment which could have prevented the rupture of Edithas uterus. The D&C procedure having
been conducted in accordance with the standard medical practice, it is clear that Edithas omission
was the proximate cause of her own injury and not merely a contributory negligence on her part.
Contributory negligence is the act or omission amounting to want of ordinary care on the part of the
person injured, which, concurring with the defendants negligence, is the proximate cause of the
injury.59 Difficulty seems to be apprehended in deciding which acts of the injured party shall be
considered immediate causes of the accident.60 Where the immediate cause of an accident resulting
in an injury is the plaintiffs own act, which contributed to the principal occurrence as one of its
determining factors, he cannot recover damages for the injury.61 Again, based on the evidence
presented in the present case under review, in which no negligence can be attributed to the
petitioner, the immediate cause of the accident resulting in Edithas injury was her own
omission when she did not return for a follow-up check up, in defiance of petitioners orders.

The immediate cause of Edithas injury was her own act; thus, she cannot recover damages
from the injury.
Lastly, petitioner asserts that her right to due process was violated because she was never informed
by either respondents or by the PRC that an appeal was pending before the PRC. 62 Petitioner claims
that a verification with the records section of the PRC revealed that on April 15, 1999, respondents
filed a Memorandum on Appeal before the PRC, which did not attach the actual registry receipt but
was merely indicated therein.63
Respondents, on the other hand avers that if the original registry receipt was not attached to the
Memorandum on Appeal, PRC would not have entertained the appeal or accepted such pleading for
lack of notice or proof of service on the other party.64 Also, the registry receipt could not be appended
to the copy furnished to petitioners former counsel, because the registry receipt was already
appended to the original copy of the Memorandum of Appeal filed with PRC. 65
It is a well-settled rule that when service of notice is an issue, the rule is that the person alleging that
the notice was served must prove the fact of service. The burden of proving notice rests upon the
party asserting its existence.66 In the present case, respondents did not present any proof that
petitioner was served a copy of the Memorandum on Appeal. Thus, respondents were not able to
satisfy the burden of proving that they had in fact informed the petitioner of the appeal proceedings
before the PRC.
In EDI-Staffbuilders International, Inc. v. National Labor Relations Commission,67 in which the
National Labor Relations Commission failed to order the private respondent to furnish the petitioner
a copy of the Appeal Memorandum, the Court held that said failure deprived the petitioner of
procedural due process guaranteed by the Constitution, which could have served as basis for the
nullification of the proceedings in the appeal. The same holds true in the case at bar. The Court finds
that the failure of the respondents to furnish the petitioner a copy of the Memorandum of Appeal
submitted to the PRC constitutes a violation of due process. Thus, the proceedings before the PRC
were null and void.
All told, doctors are protected by a special rule of law. They are not guarantors of care. They are not
insurers against mishaps or unusual consequences68 specially so if the patient herself did not
exercise the proper diligence required to avoid the injury.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated July
4, 2003 in CA-GR SP No. 62206 is hereby REVERSED and SET ASIDE. The Decision of the Board
of Medicine dated March 4, 1999 exonerating petitioner is AFFIRMED. No pronouncement as to

Phoenix Construction v. IAC


At about 1:30 a.m. on November 15, 1975, private respondent Leonardo Dionisio
was on his way home from cocktails and dinner meeting with his boss. He was
proceeding down General Lacuna Street when he saw a Ford dump truck parked
askew, partly blocking the way of oncoming traffic, with no lights or early warning
reflector devices. The truck was driven earlier by Armando Carbonel, a regular
driver of the petitioner company. Dionisio tried to swerve his car to the left, but it
was too late. He suffered some physical injuries and nervous breakdown. Dionision
filed an action for damages against Carbonel and Phoenix Insurance. Petitioners
countered the claim by imputing the accident to respondents own negligence in
driving at high speed without curfew pass and headlights, and while intoxicated.
The trial court and the Court of Appeals ruled in favor of private respondent.
Whether the collision was brought about by the way the truck was parked, or by
respondents own negligence
We find that private respondent Dionisio was unable to prove possession of a valid
curfew pass during the night of the accident and that the preponderance of
evidence shows that he did not have such a pass during that night. It is the
petitioners' contention that Dionisio purposely shut off his headlights even before he
reached the intersection so as not to be detected by the police in the police precinct
which he (being a resident in the area) knew was not far away from the intersection.
We believe that the petitioners' theory is a more credible explanation than that
offered by private respondent Dionisio, i.e., that he had his headlights on but that,
at the crucial moment, these had in some mysterious if convenient way
malfunctioned and gone off, although he succeeded in switching his lights on again
at "bright" split seconds before contact with the dump truck. We do not believe that
this evidence is sufficient to show that Dionisio was so heavily under the influence
of liquor as to constitute his driving a motor vehicle per se an act of reckless
imprudence. The conclusion we draw from the factual circumstances outlined above
is that private respondent Dionisio was negligent the night of the accident. He was
hurrying home that night and driving faster than he should have been. Worse, he
extinguished his headlights at or near the intersection of General Lacuna and
General Santos Streets and thus did not see the dump truck that was parked askew
and sticking out onto the road lane.
Nonetheless, we agree with the Court of First Instance and the Intermediate
Appellate Court that the legal and proximate cause of the accident and of Dionisio's
injuries was the wrongful or negligent manner in which the dump truck was parked
in other words, the negligence of petitioner Carbonel. The collision of Dionisio's car

with the dump truck was a natural and foreseeable consequence of the truck
driver's negligence.
The distinctions between "cause" and "condition" which the 'petitioners would have
us adopt have already been "almost entirely discredited. If the defendant has
created only a passive static condition which made the damage possible, the
defendant is said not to be liable. But so far as the fact of causation is concerned, in
the sense of necessary antecedents which have played an important part in
producing the result it is quite impossible to distinguish between active forces and
passive situations, particularly since, as is invariably the case, the latter are the
result of other active forces which have gone before. Even the lapse of a
considerable time during which the "condition" remains static will not necessarily
affect liability. "Cause" and "condition" still find occasional mention in the decisions;
but the distinction is now almost entirely discredited. So far as it has any validity at
all, it must refer to the type of case where the forces set in operation by the
defendant have come to rest in a position of apparent safety, and some new force
intervenes. But even in such cases, it is not the distinction between "cause" and
"condition" which is important but the nature of the risk and the character of the
intervening cause.
We believe, secondly, that the truck driver's negligence far from being a "passive
and static condition" was rather an indispensable and efficient cause. The improper
parking of the dump truck created an unreasonable risk of injury for anyone driving
down General Lacuna Street and for having so created this risk, the truck driver
must be held responsible. In our view, Dionisio's negligence, although later in point
of time than the truck driver's negligence and therefore closer to the accident, was
not an efficient intervening or independent cause.
The defendant cannot be relieved from liability by the fact that the risk or a
substantial and important part of the risk, to which the defendant has subjected the
plaintiff has indeed come to pass. Foreseeable intervening forces are within the
scope original risk, and hence of the defendant's negligence. The courts are quite
generally agreed that intervening causes which fall fairly in this category will not
supersede the defendant's responsibility. Thus, a defendant who blocks the sidewalk
and forces the plaintiff to walk in a street where the plaintiff will be exposed to the
risks of heavy traffic becomes liable when the plaintiff is run down by a car, even
though the car is negligently driven; and one who parks an automobile on the
highway without lights at night is not relieved of responsibility when another
negligently drives into it. We hold that private respondent Dionisio's negligence was
"only contributory," that the "immediate and proximate cause" of the injury
remained the truck driver's "lack of due care" and that consequently respondent
Dionisio may recover damages though such damages are subject to mitigation by
the courts.

Petitioners also ask us to apply what they refer to as the "last clear chance"
doctrine. The common law notion of last clear chance permitted courts to grant
recovery to a plaintiff who had also been negligent provided that the defendant had
the last clear chance to avoid the casualty and failed to do so. Accordingly, it is
difficult to see what role, if any, the common law last clear chance doctrine has to
play in a jurisdiction where the common law concept of contributory negligence as
an absolute bar to recovery by the plaintiff, has itself been rejected, as it has been
in Article 2179 of the Civil Code of the Philippines. Under Article 2179, the task of a
court, in technical terms, is to determine whose negligence - the plaintiff's or the
defendant's - was the legal or proximate cause of the injury. The relative location in
the continuum of time of the plaintiff's and the defendant's negligent acts or
omissions, is only one of the relevant factors that may be taken into account. Of
more fundamental importance are the nature of the negligent act or omission of
each party and the character and gravity of the risks created by such act or
omission for the rest of the community. Our law on quasi-delicts seeks to reduce the
risks and burdens of living in society and to allocate them among the members of
society. To accept the petitioners' pro-position must tend to weaken the very bonds
of society.
We believe that the demands of substantial justice are satisfied by allocating most
of the damages on a 20-80 ratio. Thus, 20% of the damages awarded by the
respondent appellate court, except the award of P10,000.00 as exemplary damages
and P4,500.00 as attorney's fees and costs, shall be borne by private respondent
Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and
Phoenix who shall be solidarity liable therefor to the former. The award of exemplary
damages and attorney's fees and costs shall be borne exclusively by the petitioners.
Phoenix is of course entitled to reimbursement from Carbonel. 18 We see no
sufficient reason for disturbing the reduced award of damages made by the
respondent appellate court.


BITHUEL MACAS, respondent.
For review on certiorari are the Decision1 dated September 16, 2002 and the
Resolution2 dated December 18, 2003 of the Court of Appeals in CA-G.R. CV
No. 64103, which affirmed the Decision3 of the Regional Trial Court (RTC) of
Davao City, Branch 10, in Civil Case No. 23,723-95.

The facts are undisputed.

Eyewitness Rosalinda Palero testified that on July 19, 1994, at about 4:00
p.m., at the intersection of Buhangin and San Vicente Streets in Davao City,
15-year old high school student Bithuel Macas, herein respondent, was
standing on the shoulder of the road. She was about two and a half meters
away from the respondent when he was bumped and run over by a Ford
Fiera, driven by Chona C. Cimafranca. Rosalinda and another unidentified
person immediately came to the respondent's rescue and told Cimafranca to
take the victim to the hospital. Cimafranca rushed the respondent to the
Davao Medical Center.
Dr. Hilario Diaz, the orthopedic surgeon who attended to the respondent,
testified that the respondent suffered severe muscular and major vessel
injuries, as well as open bone fractures in both thighs and other parts of his
legs. In order to save his life, the surgeon had to amputate both legs up to the
Cimafranca had since absconded and disappeared. Records showed that the
Ford Fiera was registered in the name of herein petitioner, Atty. Medardo Ag.
Cadiente. However, Cadiente claimed that when the accident happened, he
was no longer the owner of the Ford Fiera. He alleged that he sold the vehicle
to Engr. Rogelio Jalipa on March 28, 1994,5 and turned over the Certificate of
Registration and Official Receipt to Jalipa, with the understanding that the
latter would be the one to cause the transfer of the registration.
The victim's father, Samuel Macas, filed a complaint6 for torts and damages
against Cimafranca and Cadiente before the RTC of Davao City, Branch 10.
Cadiente later filed a third-party complaint7 against Jalipa.
In answer, Jalipa claimed that he was no longer the owner of the Ford Fiera at
the time of the accident. He alleged that he sold the vehicle to Abraham
Abubakar on June 20, 1994.8 He thus filed a fourth-party complaint9 against
After trial, the court ruled:

WHEREFORE, judgment is rendered in favor of the plaintiff declaring

Atty. Medardo Ag. Cadiente and Engr. Rogelio Jalipa jointly and
severally liable for damages to the plaintiff for their own negligence as
stated above, and ordering them to indemnify the plaintiff jointly and
severally as follows:
(a) P300,000.00 as compensatory damages for the permanent
and almost total disability being suffered by him;
(b) P150,000.00 for moral damages;
(c) P18,982.85 as reimbursement of medical expenses;
(d) P30,000.00 for attorney's fees; and
(e) costs of suit.
On appeal, the Court of Appeals held that the findings of the trial court were in
accordance with the established facts and was supported by the evidence on
record. Thus, it decreed as follows:
WHEREFORE, premises considered, the instant appeal is DENIED and
the decision of the Regional Trial Court of Davao City in Civil Case No.
23723-95 is hereby AFFIRMED.
From the aforequoted decision of the Court of Appeals and the subsequent
denial of the motion for reconsideration, only Cadiente appealed to this Court.
The instant petition alleges that the Court of Appeals committed serious errors
of law in affirming the decision of the trial court. Petitioner Cadiente raises the
following as issues:


Essentially, the issues to be resolved are: (1) Whether there was contributory
negligence on the part of the victim; and (2) whether the petitioner and thirdparty defendant Jalipa are jointly and severally liable to the victim.
The petitioner contends that the victim's negligence contributed to his own
mishap. The petitioner theorizes that if witness Rosalinda Palero, who was
only two and a half meters away from the victim, was not hit by the Ford Fiera,
then the victim must have been so negligent as to be bumped and run over by
the said vehicle.13
The petitioner further argues that having filed a third-party complaint against
Jalipa, to whom he had sold the Ford Fiera, the Court of Appeals should have
ordered the latter to reimburse him for any amount he would be made to pay
the victim, instead of ordering him solidarily liable for damages.14
The respondent, for his part, counters that the immediate and proximate
cause of the injuries he suffered was the recklessly driven Ford Fiera, which
was registered in the petitioner's name. He insists that when he was hit by the
vehicle, he was standing on the uncemented portion of the highway, which
was exactly where pedestrians were supposed to be.15
The respondent stresses that as the registered owner of the Ford Fiera which
figured in the accident, the petitioner is primarily liable for the injury caused by

the said vehicle. He maintains that the alleged sale of the vehicle to Jalipa
was tainted with irregularity, which indicated collusion between the petitioner
and Jalipa.16
After a careful consideration of the parties' submissions, we find the petition
without merit.
Article 2179 of the Civil Code provides:
When the plaintiff's own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence
was only contributory, the immediate and proximate cause of the injury
being the defendant's lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the damages to be awarded.
The underlying precept on contributory negligence is that a plaintiff who is
partly responsible for his own injury should not be entitled to recover damages
in full, but must proportionately bear the consequences of his own negligence.
The defendant is thus held liable only for the damages actually caused by his
In this case, records show that when the accident happened, the victim was
standing on the shoulder, which was the uncemented portion of the highway.
As noted by the trial court, the shoulder was intended for pedestrian use
alone. Only stationary vehicles, such as those loading or unloading
passengers may use the shoulder. Running vehicles are not supposed to pass
through the said uncemented portion of the highway. However, the Ford Fiera
in this case, without so much as slowing down, took off from the cemented
part of the highway, inexplicably swerved to the shoulder, and recklessly
bumped and ran over an innocent victim. The victim was just where he should
be when the unfortunate event transpired.
Cimafranca, on the other hand, had no rightful business driving as recklessly
as she did. The respondent cannot be expected to have foreseen that the
Ford Fiera, erstwhile speeding along the cemented part of the highway would
suddenly swerve to the shoulder, then bump and run him over. Thus, we are
unable to accept the petitioner's contention that the respondent was negligent.

Coming now to the second and third issues, this Court has recently reiterated
in PCI Leasing and Finance, Inc. v. UCPB General Insurance Co., Inc.,18 that
the registered owner of any vehicle, even if he had already sold it to someone
else, is primarily responsible to the public for whatever damage or injury the
vehicle may cause. We explained,
Were a registered owner allowed to evade responsibility by proving
who the supposed transferee or owner is, it would be easy for him, by
collusion with others or otherwise, to escape said responsibility and
transfer the same to an indefinite person, or to one who possesses no
property with which to respond financially for the damage or injury done.
A victim of recklessness on the public highways is usually without
means to discover or identify the person actually causing the injury or
damage. He has no means other than by a recourse to the registration
in the Motor Vehicles Office to determine who is the owner. The
protection that the law aims to extend to him would become illusory
were the registered owner given the opportunity to escape liability by
disproving his ownership.19
In the case of Villanueva v. Domingo,20 we said that the policy behind vehicle
registration is the easy identification of the owner who can be held responsible
in case of accident, damage or injury caused by the vehicle. This is so as not
to inconvenience or prejudice a third party injured by one whose identity
cannot be secured.21
Therefore, since the Ford Fiera was still registered in the petitioner's name at
the time when the misfortune took place, the petitioner cannot escape liability
for the permanent injury it caused the respondent, who had since stopped
schooling and is now forced to face life with nary but two remaining limbs.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision
dated September 16, 2002 and Resolution dated December 18, 2003 of the
Court of Appeals in CA-G.R. CV No. 64103 are hereby AFFIRMED. Costs
against the petitioner.