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G.R. Nos. 74387-90. 14 November 1988. Second Division (Paras, J.)
Batangas Laguna Tayabas Bus Company (BLTB, for brevity) Bus No. 1046, driven by Armando Pon, was
negotiating the bend of along the highway of Brgy. Isabong, Tayabas, Quezon, he tried to overtake a Ford Fiera car
just as Bus No. 404 of Superlines Transportation Company (Superlines, for brevity), driven by Ruben Dasco, was
coming from the opposite direction. Seeing thus, Armando Pon made a belated attempt to slacken the speed of his
bus and tried to return to his proper lane. It was an unsuccessful try as the two buses collided with each other. The
collision resulted in the death of Aniceto Rosales, Francisco Pamfilo and Romeo Neri and in several injuries to Nena
Rosales and Baylon Sales, all passengers of the BLTB Bus No. 1046.
Herein private respondents instituted separate cases praying for damages, attorney's fees and litigation
expenses plus costs. The lower court exonerated defendants Superlines and its driver Dasco from liability and
attributed sole responsibility to defendants BLTB and its driver Pon, and ordered them jointly and severally to pay
damages to the plaintiffs.
Whether or not the Intermediate Appellate Court erred in adjudging that the actions for private respondents
are based on culpa contractual?
The Intermediate Appellate Court anchored its decision on both culpa contractual and culpa aquilana.
The proximate cause of the collision resulting in the death of three and injuries to two of the passengers of
BLTB was the sole negligence of the driver of the BLTB Bus, who recklessly operated and drove said bus in a lane
where overtaking is not allowed by Traffic Rules and Regulations. Such negligence and recklessness is binding
against petitioner BLTB. In an action based on a contract of carriage, the court need not make an express finding of
fault or negligence on the part of the carrier in order to hold it responsible for the payment of the damages sought by
the passenger.
Further, when a motor vehicle is approaching or rounding a curve there is special necessity for keeping to
the right side of the road and the driver has not the right to drive on the left hand side relying upon having time to
turn to the right if a car is approaching from the opposite direction comes into view. 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. In failing to observe these simple precautions, BLTB's driver undoubtedly failed to
act with the diligence demanded by the circumstances.


G.R. No. 1719. 23 January 1907. En Banc (Tracey, J.)
M.H. Rakes was a negro laborer for Atlantic Gulf and Pacifir Company (Atlantic, for brevity) in the early
1900s. They were working in the companys yard and they were transporting heavy rails using two cars; each car
carrying the opposite ends of the rails. The cars were pulled by rope from the front and other workers are pushing
the cars from behind. There were no side guards installed on the sides of the cars but the rails were secured by ropes.
The track where the cars move were also weakened by a previous typhoon. It was alleged that Atlantics foreman
was notified of said damage in the tracks but the same were left unrepaired. While the cars were being moved and
when it reached the depressed portion of the track, and while Rakes was beside one of the cars, the ropes gave in and
the rails slipped thereby crushing his leg and causing it to be amputated.
Rakes filed an action against Atlantic Gulf, the lower court ruled in Rakes; favor, and he was awarded
5,000 pesos for damages.
Atlantic, on the other hand, assailed the said decision alleging that they specifically ordered their workers
to be walking only before or after the cars and not on the side of the cars because the cars have no side guards to
protect them in case the rails would slip. Atlantic also alleged that Rakes should be suing the foreman as it was him
who neglected to have the tracks repaired; that Rakes himself was negligent for having known of the depression on
the track yet he continued to work.

Whether or not Atlantic Gulf and Pacific Company is civilly liable?
Rakes could not have known of the damage in the track as it was another employee who swore he notified
the foreman about said damage. His lack of caution in continuing to work is not of a gross nature as to constitute
negligence on his part. On the other hand, Rakes contributory negligence can be inferred from the fact that he was
on the side of the cars when in fact there were orders from the company barring workers from standing near the side
of the cars; his disobedience to this order does not bar his recovery of damages however, the Court reduced the
award of damages from 5,000 pesos to 2,500 pesos.
In this case, the Court elucidated two kinds of culpa which are: (1) Culpa as substantive and independent,
which on account of its origin arises in an obligation between two persons not formerly bound by any other
obligation; may be also considered as a real source of an independent obligation (extra-contractual or culpa
aquiliana); and (2) Culpa as an incident in the performance of an obligation which cannot be presumed to exist
without the other, and which increases the liability arising from the already existing obligation (contractual or culpa

G.R. No. 122039. 31 May 2000. Second Division (Mendoza, J.)
Eliza Jujeurche G. Sunga took a passenger jeepney owned and operated by petitioner Vicente Calalas. The
jeepney was filled and Sunga was given by the conductor an "extension seat," a wooden stool at the back of the door
at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was
seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck
driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result,
Sunga was injured.

Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage by the
former in failing to exercise the diligence required of him as a common carrier. The lower court rendered judgment
against Salva as third-party defendant and absolved Calalas of liability. Calalas filed a Civil Case (Civil Case no.
3940) against Salva and Verena, for quasi-delict, in which the same court held Salva and his driver Verena jointly
liable to Calalas for the damage to his jeepney. However, the ruling of the lower court was reversed on the ground
that Sungas cause of action was based on a contract of carriage, not quasi-delict, and that the common carrier failed
to exercise the diligence required under the Civil Code.
Whether petitioner is liable on his contract of carriage?
Petitioner jeepney driver is liable for breach of contract of carriage resulting to injury sustained by
respondent Sunga.
It is noteworthy that (1) the jeepney was not properly parked, its rear portion being exposed about two
meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle, which is
a violation of the Land Transportation and Traffic Code; and (2) petitioner took in more passengers than the allowed
seating capacity of the jeepney, which is a violation of 32(a) of the same law. Upon the happening of the accident,
the presumption of negligence arose, and it became the duty of petitioner to prove that he had to observe
extraordinary diligence in the care of his passengers, but he failed to do so.
Furthermore, the ruling in Civil Case No. 3490 is not binding on Sunga. It is immaterial that the proximate
cause of the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of
proximate cause is applicable only in actions for quasi-delict, not in actions involving breach of contract. In case of
death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have
been at fault or to have acted negligently unless they prove that they observed extraordinary diligence.


G.R. No. 121413. 29 January 2001. Second Division (Quisimbing, J.)
G.R. No. 121479. 29 January 2001. Second Division (Quisimbing, J.)
G.R. No. 128604. 29 January 2001. Second Division (Quisimbing, J.)

The consolidated petitions involve several fraudulently negotiated checks.
Ford Philippines, Inc. (Ford, for brevity) drew and issued its Citibank Check No. SN-04867 in the amount
of P4,746,114.41, in favor of the Commissioner of Internal Revenue (CIR, for brevity) as payment of plaintiffs
percentage or manufacturer's sales taxes for the third quarter of 1977.
The aforesaid check was deposited with the defendant Philippine Commercial International Bank (formerly
known as IBAA; PCIBank, for brevity) and was subsequently cleared at the Central Bank. Upon presentment with
Citibank, the proceeds of the check was paid to IBAA as collecting or depository bank; however, the proceeds of
the same Citibank check of the Ford was never paid to or received by the payee, CIR.
Upon demand of the CIR, Ford was compelled to make a second payment; and as a consequence of PCIBs
refusal to reimburse Ford of the payment it had made for the second time to the BIR of its percentage taxes, Ford
filed on its complaint. The trial court rendered its decision ordering the Citibank and IBAA to pay, jointly and
severally, Ford the amount of P4,746,114.41 representing the face value of the Citibank Check No. SN-04867. Upon
appeal, the appellate court upheld the said decision of the lower court.
In G.R. No. 121413, PCIBank seeks the reversal of the decision and resolution Court of Appeals
contending that it merely acted on the instruction of Ford and such cause of action had already prescribed.
In G.R. No. 128604, the facts established shown that Ford drew Citibank Check No. SN-10597 on July 19,
1978 in the amount of P5,851,706.37 representing the percentage tax due for the second quarter of 1978 payable to
the Commissioner of Internal Revenue, wherein a BIR Revenue Tax Receipt No. 28645385 was issued for the said
purpose; and On April 20, 1979, Ford drew another Citibank Check No. SN-16508 in the amount of P6,311,591.73,
representing the payment of percentage tax for the first quarter of 1979 and payable to the Commissioner of Internal
Revenue, again a BIR Revenue Tax Receipt No. A-1697160 was issued for the said purpose.
Both checks were "crossed checks" and contain two diagonal lines on its upper corner between, which were
written the words "payable to the payee's account only." However, the checks never reached the payee, CIR. In this
case, the lower court held drawee-bank, Citibank, liable for the value of the two checks while absolving PCIBank
from any liability. As far as the BIR is concerned, the said two BIR Revenue Tax Receipts were considered "fake
and spurious".
From an investigation conducted by the National Bureau of Investigation (NBI, for brevity), it appears that
a certain Mr. Godofredo Rivera was employed by the plaintiff Ford as its General Ledger Accountant. As such, he
prepared the plaintiff's check for payment to the BIR. Instead, however, of delivering the same of the payee, he
passed on the check to a co-conspirator named Remberto Castro who was a pro-manager of the San Andres Branch
of PCIB. In connivance with one Winston Dulay, Castro himself subsequently opened a Checking Account in the
name of a fictitious person denominated as Reynaldo Reyes' in the Meralco Branch of PCIBank where Dulay works

as Assistant Manager. After an initial deposit of P100.00 to validate the account, Castro deposited a worthless Bank
of America Check in exactly the same amount as the first FORD check while this worthless check was coursed
through PCIB's main office enroute to the Central Bank for clearing, replaced this worthless check with Ford's check
and accordingly tampered the accompanying documents to cover the replacement. As a result, Fords check was
cleared by defendant CITIBANK, and the fictitious deposit account of 'Reynaldo Reyes' was credited at the PCIB
Meralco Branch with the total amount of the said Ford check. The same method was again utilized by the syndicate
in profiting from Citibank Check No. SN-16508 which was subsequently pilfered by Alexis Marindo, Rivera's
Assistant at Ford.
Whether or not the action of Godofredo Rivera, Ford's General Ledger Accountant, and/or Alexis Marindo,
his assistant, was the proximate cause of the loss or damage?

It is the negligence of the collecting bank, in this case PCIBank, which is the proximate cause of loss.
Although the employees of Ford initiated the transactions attributable to an organized syndicate, their
actions were not the proximate cause of encashing the checks payable to the CIR.
It is a well-settled rule that the relationship between the payee or holder of commercial paper and the bank
to which it is sent for collection is, in the absence of an agreement to the contrary, that of principal and agent, hence,
the bank which receives such paper for collection is the agent of the payee or holder.
The crossing of the check with the phrase "Payee's Account Only," is a warning that the check should be
deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to ascertain that the
check be deposited in payee's account only. Therefore, it is the collecting bank (PCIBank) which is bound to
scrutinize the check and to know its depositors before it could make the clearing indorsement "all prior
indorsements and/or lack of indorsement guaranteed". One who encashed a check which had been forged or
diverted and in turn received payment thereon from the drawee, is guilty of negligence which proximately
contributed to the success of the fraud practiced on the drawee bank.
Having established that the collecting bank's negligence is the proximate cause of the loss, the Court
concludes that PCIBank is liable in the amount corresponding to the proceeds of Citibank Check No. SN-04867.
Notwithstanding that there was no evidence presented confirming the conscious participation of PCIBank in the
embezzlement. As a general rule, however, a banking corporation is liable for the wrongful or tortuous acts and
declarations of its officers or agents within the course and scope of their employment. Banks will be held liable for
the negligence of its officers or agents when acting within the course and scope of their employment. It may be
liable for the tortuous acts of its officers even as regards that species of tort of which malice is an essential element.
Further stated, if an officer or employee of a bank, in his official capacity, receives money to satisfy an evidence of
indebtedness lodged with his bank for collection, the bank is liable for his misappropriation of such sum.
However, in this case, responsibility for negligence does not lie on PCIBank alone, since, the evidence on
record shows that Citibank as drawee bank was likewise negligent in the performance of its duties. Citibank failed to
establish that its payment of Fords checks was made in due course and legally in order, and because of the
contractual relationship existing between the two. Citibank, as the drawee bank breached its contractual obligation
with Ford and such degree of culpability contributed to the damage caused to the latter.
Thus, invoking the doctrine of comparative negligence, both PCIBank and Citibank failed in their
respective obligations and both were negligent in the selection and supervision of their employees resulting in the
encashment of Citibank Check Nos. SN 10597 and 16508. Thus, the Court was constrained to hold them equally
liable for the loss of the proceeds of said checks issued by Ford in favor of the CIR.


G.R. No. L-12219. 15 March 1918. En Banc (Street, J.)
Amado Picart was riding on his pony over the Carlatan Bridge at San Fernando, La Union. Before he had
gotten half way across, defendant Frank Smith approached from the opposite direction in an automobile, going at the
rate of about ten or twelve miles per hour. As defendant neared the bridge he saw a horseman and blew his horn to
give warning of his approach. He continued his course and after he had taken the bridge he gave two more
successive blasts.
The plaintiff, on the other hand, saw the automobile coming and heard the warning signals. However, being
perturbed by the rapidity of the approach, he pulled the pony closely up against the railing on the right side of the
bridge instead of going to the left. Defendant seeing that the pony was apparently quiet, the defendant, instead of
veering to the right while yet some distance away or slowing down, continued to approach directly toward the horse
without diminution of speed. When he had gotten quite near, there being then no possibility of the horse getting
across to the other side, the defendant quickly turned his car sufficiently to the right to escape hitting the horse
alongside of the railing where it as then standing; but in so doing the automobile passed in such close proximity to
the animal that it became frightened and turned its body across the bridge with its head toward the railing. The horse
fell and its rider was thrown off with some violence; as a result of its injuries the horse died and the plaintiff
received contusions which caused temporary unconsciousness and required medical attention for several days.
Whether or not the defendant in maneuvering his car in the manner above-described was guilty of
The defendant is liable.
As the defendant started across the bridge, he had the right to assume that the horse and the rider would
pass over to the proper side; but as he moved toward the center of the bridge it was demonstrated to his eyes that this
would not be done; and he must in a moment have perceived that it was too late for the horse to cross with safety in
front of the moving vehicle. The control of the situation had then passed entirely to the defendant; and it was his
duty either to bring his car to an immediate stop or, seeing that there were no other persons on the bridge, to take the
other side, instead of doing this, the defendant ran straight on until he was almost upon the horse.
However, the plaintiff himself was not free from fault, for he was guilty of antecedent negligence in
planting himself on the wrong side of the road. But as we have already stated, the defendant was also negligent;. It
will be noted that the negligent acts of the two parties were not contemporaneous, since the negligence of the
defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these circumstances the law is
that the person who has the last fair chance to avoid the impending harm and fails to do so is chargeable with the
consequences, without reference to the prior negligence of the other party. Hence, it is enough to say that the
negligence of the defendant was in this case the immediate and determining cause of the accident and that the
antecedent negligence of the plaintiff was a more remote factor in the case.


G.R. No. L-29462. 7 March 1929. En Banc (Street, J.)
Appellant Manila Electric Company is engaged in operating street cars in the City for the conveyance of
passengers. Teodorico Florenciano, one of the motorman of appellant, was in charge of car No. 74 running from east
to west on R. Hidalgo Street. Florenciano was driving the street car in moderate speed, suddenly, plaintiff, Ignacio
del Prado, raised his hand as an indication to the motorman of his desire to board the car, he ran across the street to
catch the car, the approach being made from the left side, the motorman slowed up slightly as the plaintiff was
boarding the car, the motorman applied the power causing the plaintiffs foot to slip, and his hand was jerked loose
from the handpost; he then fell to the fround and his right foot was caught and crushed by the moving car.

Whether or not the Motorman was negligent.

Whether or not there was contributory negligence on the part of the plaintiff.


There is no obligation on the part of a street railway company to stop its cars to let on intending passengers
at other points than those appointed for stoppage. Nevertheless, although the motorman of this car was not
bound to stop to let the plaintiff on, it was his duty to do act that would have the effect of increasing the
plaintiff's peril while he was attempting to board the car. The premature acceleration of the car was a breach of
this duty. The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and in
failure on the part of the carrier to use due care in carrying its passengers safely is a breach of duty. The duty
that the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those
alighting there-from.


As to the contributory negligence of the plaintiff, it should be treated as a mitigating circumstance under
article 1103 of the Civil Code. It is obvious that the plaintiff's negligence in attempting to board the moving car
was not the proximate cause of the injury, but it is the act of appellant's motorman in putting on the power
prematurely. A person boarding a moving car must be taken to assume the risk of injury from boarding the car
under the conditions open to his view, but he cannot fairly be held to assume the risk that the motorman, having
the situation in view, will increase his peril by accelerating the speed of the car before he is planted safely on
the platform. The rule here applicable seems to be analogous to, if not identical with that which is sometimes
referred to as the doctrine of "the last clear chance." In accordance with this doctrine, the contributory
negligence of the party injured will not defeat the action if it be shown that the defendant might, by the exercise
of reasonable care and prudence, have avoided the consequences of the negligence of the injured party. The
negligence of the plaintiff was, however, contributory to the accident and must be considered as a mitigating

G.R. No. 72964. 7 January 1988. Third Division (Gutierrez, Jr., J.)
Petitioner Filomeno Urbano (Urbano, for brevity) went to his ricefield at Barangay Anonang, San Fabian,
Pangasinan located at about 100 meters from the tobacco seedbed of Marcelo Javier (Javier, for brevity). He found
the place where he stored his palay flooded with water coming from the irrigation canal nearby which had
overflowed. Urbano went to the elevated portion of the canal to see what happened and there he saw Marcelo Javier
and Emilio Erfe cutting grass. He asked them who was responsible for the opening of the irrigation canal and Javier
admitted that he was the one. Urbano then got angry and demanded that Javier pay for his soaked palay. A quarrel
between them ensued. Urbano unsheathed his bolo and hacked Javier hitting him on the right palm of his hand.
Javier who was then unarmed ran away from Urbano but was overtaken by Urbano who hacked him again hitting
Javier on the left leg with the back portion of said bolo, causing a swelling on said leg. Javier was brought to a
physician, and after being treated, he and his companions went to Dr. Guillermo Padilla for the conduct of a medicolegal examination.
On October 27, 1980, Urbano and Javier, upon the intercession of Councilman Solis, agreed to enter into a
settlement, wherein Urbano promised to pay P700.00 for the medical expenses of Javier. Such amicable settlement
was formalized before the San Fabian Police.
However, on November 14, 1980, Javier was rushed to the Nazareth General Hospital in a very serious
condition. When admitted to the hospital, Javier had lockjaw and was having convulsions. Dr. Edmundo Exconde
who personally attended to Javier found that the latter's serious condition was caused by tetanus toxin. Subsequently,
Javier died in the hospital.
Information was filed against Filomeno Urbano, charging him with the crime of homicide; to which the
trial court found him guilty as charged. The lower court held that the proximate cause of the victim's death was the
wound which got infected with tetanus. Applying Article 4 of the Revised Penal Code, which provides that, an
accused is criminally responsible for acts committed by him in violation of law and for all the natural and logical
consequences resulting therefrom.
Whether or not there was an efficient intervening cause from the time Javier was wounded until his death which
would exculpate Urbano from any liability for Javier's death?
The wound was but the remote cause and its subsequent infection, for failure to take necessary precautions,
with tetanus have been the proximate cause of Javier's death with which the petitioner had nothing to do.
It was established that at the time Javier's wound was inflicted by the Urbano, the severe form of tetanus
that killed him was not yet present. Consequently, Javier's wound could have been infected with tetanus after the
hacking incident. Considering the circumstance surrounding Javier's death, his wound could have been infected by
tetanus 2 or 3 or a few but not 20 to 22 days before he died.
The rule is that the death of the victim must be the direct, natural, and logical consequence of the wounds
inflicted upon him by the accused. And since we are dealing with a criminal conviction, the proof that the accused
caused the victim's death must convince a rational mind beyond reasonable doubt. The medical findings, however,
lead us to a distinct possibility that the infection of the wound by tetanus was an efficient intervening cause later or
between the time Javier was wounded to the time of his death. The infection was, therefore, distinct and foreign to
the crime.

On the other hand, the records showed that Urbano is guilty of inflicting slight physical injuries. However,
the petitioner's criminal liability in this respect was wiped out by the victim's own act. After the hacking incident,
Urbano and Javier used the facilities of barangay mediators to effect a compromise agreement where Javier forgave
Urbano while Urbano defrayed the medical expenses of Javier. Parenthetically, while a person is not criminally
liable, he may still be civilly liable; Article 29 of the New Civil Code provides that, while the guilt of the accused in
a criminal prosecution must be established beyond reasonable doubt, only a preponderance of evidence is required in
a civil action for damages. Hence, Urbano is held civilly liable only.

G.R. No. L-4977. 22 March 1910. En Banc (Carson,J.)
Defendant is a foreign corporation engaged in the operation of a street railway and an electric light system
in the city of Manila. Its power plant is situated at the eastern end of a small island in the Pasig River within the city
of Manila, known as the Isla del Provisor. The power plant may be reached by boat or by crossing a footbridge,
impassable for vehicles, at the westerly end of the island. Plaintiff, on the other hand, was 15 years of age, he
obtained employment as a mechanical draftsman and continued in that employment for six months at a salary of
P2.50 a day; and it appears that he was a boy of more than average intelligence, taller and more mature both
mentally and physically than most boys of fifteen.
Plaintiff, with a boy named Manuel Claparols, about 12 years of age, crossed the footbridge to the Isla del
Provisor, to visit one Murphy, employee of the defendant, however, the latter was not in his quarters, the boys,
impelled by youthful curiosity and perhaps by the unusual interest which both seem to have taken in machinery,
wandered in the company's premises; they walked across the open space in the neighbourhood of the place where
the company dumped in the cinders and ashes from its furnaces. Here they found some twenty or thirty brass
fulminating caps scattered on the ground. These caps are approximately of the size and appearance of small pistol
cartridges and each has attached to it two long thin wires by means of which it may be discharged by the use of
electricity. The boys picked up all they could find, hung them on stick, of which each took end, and carried them
home. After crossing the footbridge, they met a little girl named Jessie Adrian, less than 9 years old, and all three
went to the home of the boy Manuel. The boys then made a series of experiments with the caps, until they opened
one of the caps with a knife, and finding that it was filled with a yellowish substance they got matches, and David
held the cap while Manuel applied a lighted match to the contents. An explosion followed, causing more or less
serious injuries to all three.
Whether or not Manila Electric Railroad and Light Company, having in their company premises the
detonating caps, is negligent, as such liable for damages?
No, it is quite clear that the immediate cause of the explosion, the accident which resulted in plaintiff's
injury, was in his own act in putting a match to the contents of the cap, and that having contributed to the principal
occurrence, as one of its determining factors, he can not recover.
In the case at bar, plaintiff at the time of the accident was a well-grown youth of 15, more mature both
mentally and physically than the average boy of his age; he had been to sea as a cabin boy; was able to earn P2.50 a
day as a mechanical draftsman thirty days after the injury was incurred; and the record discloses throughout that he
was exceptionally well qualified to take care of himself. The evidence of record leaves no room for doubt that,
despite his denials on the witness stand, he well knew the explosive character of the cap with which he was amusing
himself; nor can there be any reasonable doubt that he had reason to anticipate that the explosion might be
Plaintiff may not have known and probably did not know the precise nature of the explosion which might be
expected from the ignition of the contents of the cap, and of course he did not anticipate the resultant injuries which
he incurred; but he well knew that a more or less dangerous explosion might be expected from his act, and yet he
willfully, recklessly, and knowingly produced the explosion. The law fixes no arbitrary age at which a minor can be
said to have the necessary capacity to understand and appreciate the nature and consequences of his own acts, so as
to make it negligence on his part to fail to exercise due care and precaution in the commission of such acts. The

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


represented by ROMEO LIPANA
G.R. No. 97626. 14 March 1997. First Division (Hermosisima, Jr., J.)
From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana have entrusted RMC funds in the form of
cash totalling P304,979.74 to his secretary, Irene Yabut (hereinreferred to as Ms. Yabut), for the purpose of
depositing said funds in the current accounts of RMC with PBC. It turned out, however, that these deposits, on all
occasions, were not credited to RMC's account but were instead deposited to Account No. 53-01734-7 of Yabut's
husband, Bienvenido Cotas who likewise maintains an account with the same bank. During this period, petitioner
bank had, however, been regularly furnishing private respondent with monthly statements showing its current
accounts balances. Unfortunately, it had never been the practice of Romeo Lipana to check these monthly statements
of account reposing complete trust and confidence on petitioner bank.
Ms. Yabut accomplished two (2) copies of the deposit slip, an original and a duplicate. The original showed
the name of her husband as depositor and his current account number. On the duplicate copy was written the account
number of her husband but the name of the account holder was left blank. PBC's teller, Azucena Mabayad, would,
however, validate and stamp both the original and the duplicate of these deposit slips retaining only the original
copy, and the second copy was kept by Ms. Yabut allegedly for record purposes. After validation, Yabut would then
fill up the name of RMC in the space left blank in the duplicate copy and change the account number written
thereon, which is that of her husband's, and make it appear to be RMC's account number. This went on in a span of
more than one (1) year without private respondent's knowledge.
Upon discovery of the loss of its funds, RMC demanded from petitioner bank the return of its money, but
as its demand went unheeded, it filed a collection suit. The trial court found petitioner bank negligent .
Whether or not the the proximate cause of the loss, amounting to P304,979.74, suffered by the private
respondent RMC is the petitioner bank's negligence.
It was this negligence of Ms. Azucena Mabayad, in validating the deposit slips, both original and duplicate,
presented by Ms. Yabut to Ms. Mabayad, notwithstanding the fact that one of the deposit slips was not completely
accomplished; coupled by the negligence of the petitioner bank in the selection and supervision of its bank teller,
which was the proximate cause of the loss suffered by the private respondent, and not the act of Rome Lipana of
entrusting cash to a dishonest employee,
The test by which to determine the existence of negligence in a particular case is that: Did the defendant in
doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would
have used in the same situation? If not, then he is guilty of negligence. The odd circumstance alone that such
duplicate copy lacked vital information that of the name of the account holder should have already put Ms.
Mabayad on guard. She should not have been so naive in accepting the excuse of Ms. Yabut that since the duplicate
copy was only for her personal record, she would simply fill up the blank space later on. A reasonable man of
ordinary prudence would not have given credence to such explanation and would have insisted that the space left
blank be filled up as a condition for validation. Applying the above test, it appears that the bank's teller, Ms.
Azucena Mabayad, was negligent.

Negligence of the bank in the selection and supervision of its employees

It was in fact only when Mr. Romero Bonifacio, the then Manager of Pasig Branch, testified after the lapse
of more than seven (7) years counted that he became aware of the practice of his teller Mabayad of validating blank
deposit slips. Undoubtedly, this is gross, wanton, and inexcusable negligence in the appellant bank's supervision of
its employees.
It is worth to note that, in the case of banks, however, the degree of diligence required is more than that of
a good father of a family. Considering the fiduciary nature of their relationship with their depositors, banks are duty
bound to treat the accounts of their clients with the highest degree of care.

Contributory Negligence of the Company Owner and

Application of the Doctrine of Last Clear Chance
It cannot be denied that, indeed, private respondent was likewise negligent in not checking its monthly
statements of account. Had it done so, the company would have been alerted to the series of frauds being committed
against RMC by its secretary. The damage would definitely not have ballooned to such an amount if only RMC,
particularly Romeo Lipana, had exercised even a little vigilance in their financial affairs. This omission by RMC
amounts to contributory negligence which shall mitigate the damages that may be awarded to the private
respondent under Article 2179 of the New Civil Code.
Notwithstanding, however, under the doctrine of last clear chance, petitioner bank was indeed the culpable
party. Assuming that private respondent RMC was negligent in entrusting cash to a dishonest employee, thus
providing the latter with the opportunity to defraud the company, as advanced by the petitioner, yet it cannot be
denied that the petitioner bank, thru its teller, had the last clear opportunity to avert the injury incurred by its client,
simply by faithfully observing their self-imposed validation procedure.
Hence, the demands of substantial justice are satisfied by allocating the damage on a 60-40 ratio.


G.R. No. L-40570. 30 January 1976. First Division (Esquerra, J.)
A storm with strong rain hit the Municipality of Alcala Pangasinan, During the storm, the banana plants
standing on an elevated ground near the transmission line of the Alcala Electric Plant were blown down and fell on
the electric wire. As a result, the live electric wire was cut, one end of which was left hanging on the electric post
and the other fell to the ground under the fallen banana plants.
On the following morning, barrio captain Luciano Bueno saw the broken electric wire, he then saw
Cipriano Baldomero, a laborer of the Alcala Electric Plant near the place and notified him of the broken line and
asked him to fix it, but the latter told the barrio captain that he could not do it but that he was going to look for the
lineman to fix it. Thereafter, Manuel P. Sayney, a small boy of 3 years and 8 months went to the place where the
broken line wire was and got in contact with it. The boy was electrocuted causing his immediate death. It was only
after the electrocution of Manuel Saynes that the broken wire was fixed.
Whether the proximate cause of the death of Manuel Saynes is due to fortuitous event---storm?
No. A series of negligence on the part of defendants' employees in the Alcala Electric Plant resulted in the
death of the victim by electrocution. First, there were big and tall banana plants at the place of the incident standing
on an elevated which were higher than the electric post supporting the electric line, and yet the employees of the
defendant who, with ordinary foresight, could have easily seen that even in case of moderate winds the electric line
would be endangered by banana plants being blown down, did not even take the necessary precaution to eliminate
that source of danger. Second, even after the employees of the Alcala Electric Plant were already aware of the
possible damage the storm of May 14, 1972, could have caused their electric lines, they did not cut off from the
plant or the flow of electricity along the lines. Third, employee Cipriano Baldomero was negligent on the morning
of the incident, for he should have taken the necessary precaution to prevent anybody from approaching the live
wire; instead he left the premises because what was foremost in his mind was the repair of the line.
Art. 2180. The owner and manager of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the branches in
which the latter are employed or on tile occasion of their functions.
Hence, the negligence of the employee is presumed to be the negligence of the employer because the
employer is supposed to exercise supervision over the work of the employees. This liability of the employer is
primary and direct.

G.R. No. L-32611. 3 November 1930. En Banc (Street, J.)
The plaintiff and defendant are domestic corporations. H.D. Cranston was the representative of the plaintiff
in the City of Manila. In January, 1925, Cranston decided to have the engine on the Gwendoline changed from a
gasoline consumer to a crude oil burner. He Philippine Motors Corporations by Mc Kellar of McLeod & Co. C.E.
Quest, Philippine Motors Corporations manager, agreed to do the job.
The change in the engine was begun and conducted under the supervision of Quest, chiefly by a mechanic
whom Quest took with him to the boat. Upon preliminary inspection of the engine, Quest came to the conclusion
that the principal thing necessary to accomplish the end in view was to install a new carburetor, The result of this
experiment was satisfactory. The next problem was to introduce into the carburetor the baser fuel, consisting of a
low grade of oil mixed with distillate. For this purpose a temporary tank to contain the mixture was placed on deck
above and at a short distance from the compartment covering the engine.
In the course of the preliminary work upon the carburetor and its connections, it was observed that the
carburetor was flooding, and that the gasoline, or other fuel, was trickling freely from the lower part to the
carburetor to the floor. This fact was called to Quest's attention, but he appeared to think lightly of the matter and
said that, when the engine had gotten to running well, the flooding would disappear.
The boat was taken out into the bay for a trial run at about 5 p.m, however, the engine stopped a few times,
owing no doubt to the use of an improper mixture of fuel. At about 7:30 p.m. and when passing near Cavite, the
engine stopped, and connection again had to be made with the gasoline line to get a new start. A moment later a
back fire occurred in the cylinder chamber. This caused a flame to shoot back into the carburetor, and instantly the
carburetor and adjacent parts were covered with a mass of flames, which the members of the crew were unable to
Whether or the loss of the Gwendoline was chargeable to the negligence and lack of skill of C.E. Quest.
C.E. Quest is liable for the back fire that resulted to the destruction of the boat.
When a person holds himself out as being competent to do things requiring professional skill, he will be
held liable for negligence if he fails to exhibit the care and skill of one ordinarily skilled in the particular work which
he attempts to do. Quest had had ample experience in fixing the engines of automobiles and tractors, but it does not
appear that he was experienced in the doing of similar work on boats. For this reason, possibly the dripping of the
mixture form the tank on deck and the flooding of the carburetor did not convey to his mind an adequate impression
of the danger of fire.
In other words Quest did not use the skill that would have been exhibited by one ordinarily expert in
repairing gasoline engines on boats. There was, on the part of Quest, a blameworthy antecedent inadvertence to
possible harm, and this constitutes negligence. The burning of the Gwendoline may be said to have resulted from
accident, but this accident was in no sense an unavoidable accident. It would not have occured but for Quest's
carelessness or lack of skill.