1

PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE

COMMERCIAL INTERNATIONAL BANK, ROGELIO LACSON, DIGNA DE
LEON, MARIA ANGELITA PASCUAL, et al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., represented by
ROMEO LIPANA, its President & General Manager, respondents
G.R. No. 97626 March 14, 1997
FACTS:
On May 5, 1975 to July 16, 1976, Romeo Lipana claims to have entrusted RMC funds
in the form of cash totaling P304, 979.74 to his secretary, Irene Yabut, for the purpose of
depositing said funds in the current accounts of RMC with Philippine Bank of Commerce
(PBC). They were not credited to RMC's account but were instead deposited to Yabut's
husband, Bienvenido Cotas. Lipana never checked their monthly statements of account
reposing complete trust and confidence on PBC.
Yabut's modus operandi was to furnish 2 copies of deposit slip upon and both are always
validated and stamped by the teller Azucena Mabayad; original showed the name of her
husband as depositor and his current account number - retained by the bank; duplicate copy
was written the account number of her husband but the name of the account holder was left
blank; 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 to RMC's account number. This went on
in a span of more than 1 year without private respondent's knowledge. Upon discovery of the
loss of its funds, RMC demanded from PBC the return of its money.

ISSUES:
1. Whether applying the last clear chance, PBC's teller is negligent for failing to avoid the
injury by not exercising the proper validation procedure.
2. Whether there was contributory negligence by RMC.

RULING:
1. Yes. Under the doctrine of "last clear chance" (also referred to, at times as "supervening
negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This
doctrine, in essence, states that where both parties are negligent, but the negligent act of one is
appreciably later in time than that of the other, or when it is impossible to determine whose
fault or negligence should be attributed to the incident, the one who had the last clear
opportunity to avoid the impending harm and failed to do so is chargeable with the
consequences thereof. Stated differently, the rule would also mean that an antecedent
negligence of a person does not preclude the recovery of damages for the supervening
negligence of, or bar a defense against liability sought by another, if the latter, who had the last
fair chance, could have avoided the impending harm by the exercise of due diligence. Here,
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.

2. Yes. While it is true that had private respondent checked the monthly statements of account
sent by the petitioner bank to RMC, the latter would have discovered the loss early on, such
cannot be used by the petitioners to escape liability. This omission on the part of the private
respondent does not change the fact that were it not for the wanton and reckless negligence of
the petitioners' employee in validating the incomplete duplicate deposit slips presented by Ms.
Irene Yabut, the loss would not have occurred. Considering, however, that the fraud was
committed in a span of more than one (1) year covering various deposits, common human
experience dictates that the same would not have been possible without any form of collusion
between Ms. Yabut and bank teller Mabayad. Ms. Mabayad was negligent in the performance
of her duties as bank teller nonetheless. Thus, the petitioners are entitled to claim
reimbursement from her for whatever they shall be ordered to pay in this case.

PHILIPPINE LONG DISTANCE TELEPHONE CO., INC., petitioner,

vs.
COURT OF APPEALS and SPOUSES ANTONIO ESTEBAN and GLORIA
ESTEBAN, respondents
G.R. No. L-57079 September 29, 1989

FACTS:
Spouses Esteban were riding their jeep along the inside lane of Lacson Street where
they resided [at 25km/hr as Antonio Esteban claimed; CA said jeep ran fast; if the jeep braked
at that speed, the spouses would not have been thrown against the windshield]. The jeep
abruptly swerved from the inside lane, then it ran over a mound of earth and fell into an open
trench, an excavation allegedly undertaken by PLDT for the installation of its underground
conduit system. Antonio failed to notice the open trench which was left uncovered because of
the darkness and the lack of any warning light or signs. The spouses were thrown against the
windshield. Gloria Esteban allegedly sustained injuries on her arms, legs and face, leaving a
permanent scar on her cheek, while Antonio suffered cut lips. The jeeps windshield was also
shattered.
PLDT denies liability, contending that the injuries sustained by the spouses were due to
their own negligence, and that it should be the independent contractor L.R. Barte and Co.
[Barte] who should be held liable. PLDT filed a third-party complaint against Barte, alleging
that under the terms of their agreement, PLDT should not be answerable for any accident or
injuries arising from the negligence of Barte or its employees. Barte claimed that it was not
aware, nor was it notified of the accident, and that it complied with its contract with PLDT by
installing the necessary and appropriate signs.

RTC ruled in favor of the spouses. CA reversed RTC and dismissed the spouses
complaint, saying that the spouses were negligent. Later, it set aside its earlier decision and
affirmed in toto RTCs decision.

ISSUE: Whether PLDT is liable for the injuries sustained by Spouses Esteban.

RULING:
No. The negligence of Antonio was not only contributory to his and his wifes injuries
but goes to the very cause of the occurrence of the accident, as one of its determining factors,
and thereby precludes their right to recover damages. The perils of the road were known to the
spouses. By exercising reasonable care and prudence, Antonio could have avoided the
injurious consequences of his act, even assuming arguendo that there was some alleged
negligence on the part of PLDT.

The omission to perform a duty, such as the placing of warning signs on the site of the
excavation, constitutes the proximate cause only when the doing of the said omitted act would
have prevented the injury. As a resident of Lacson Street, he passed on that street almost every
day and had knowledge of the presence and location of the excavations there; hence, the
presence of warning signs could not have completely prevented the accident. Furthermore,
Antonio had the last clear chance to avoid the accident, notwithstanding the negligence he
imputes to PLDT.

A person claiming damages for the negligence of another has the burden of proving the
existence of such fault or negligence causative thereof, otherwise, his action must fail. The
facts constitutive of negligence must be affirmatively established by competent evidence. In
this case, there was insufficient evidence to prove any negligence on the part of PLDT. What
were presented were just the self-serving testimony of Antonio and the unverified photograph
of a portion of the scene of the accident. The absence of a police report and the
non-submission of a medical report from the hospital where the spouses were allegedly treated
have not even been explained.

SERGIO AMONOY, petitioner, vs. Spouses JOSE GUTIERREZ and ANGELA

FORNILDA, respondents.
[G.R. No. 140420. February 15 , 2001]

Facts:

Amonoy was the counsel of the successors of the deceased Julio Cantolos for the
settlement of the latters estate. On January 1965, the lots were adjudicated to Asuncion
Pasamba and Alfonso Fornilda. On January 20, 1965, Pasamba and Fornilda executed a deed
of real estate mortgage on the said two lots adjudicated to them, in favor of Amonoy to secure
the payment of his attorneys fees. But on August 6, 1969, after the taxes had been paid, the
claims settled and the properties adjudicated, the estate was declared closed and terminated.
When Pasamba and Fornilda passed away, Fornilda was succeeded by the spouses Gutierrez.
On January 21, 1970, Amonoy filed for the closure of the two lots alleging the non-payment of
attorneys fees. The herein respondents denied the allegation, but judgment was rendered in
favor of Amonoy.

Still for failure to pay attorneys fees, the lots were foreclosed. Amonoy was able to buy
the lots by auction where the house of the spouses Gutierrez was situated. On Amonoys
motion of April 24, 1986, orders were implemented for the demolition of structures in the said
lot, including herein respondents house. On September 27, 1985, David Fornilda petitioned
to the Supreme Court for a TRO for the suspension of the demolition, which was granted, but
the houses have already been demolished. A complaint for damages was filed by respondents,
which was denied by RTC but granted by CA, thus this case.

Issue:

Whether or not the CA erred in ruling that Amonoy was liable for damages to respondents.

Ruling:

Petitioner invokes that it is well-settled that the maxim of damage resulting from
the legitimate exercise of a persons rights is a loss without injury damnum absque injuria
for which the law gives no remedy, saying he is not liable for damages. The precept of
Damnum Absque Injuria has no application is this case. Petitioner did not heed the TRO
suspending the demolition of structures. Although the acts of petitioner may have been legally
justified at the outset, their continuation after the issuance of the TRO amounted to an
insidious abuse of his right. Indubitably, his actions were tainted with bad faith.

Article 19, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which may be observed not only in the exercise of ones rights but also
in the performance of ones duties. These standards are the following: to act with justice; to
give everyone his due; and to observe honesty and good faith. This must be observed. Clearly
then, the demolition of respondents house by petitioner, despite his receipt of the TRO, was
not only an abuse but also an unlawful exercise of such right. The petition is denied.
The decision of CA is affirmed.

FGU INSURANCE CORPORATION, petitioner, vs. G.P. SARMIENTO

TRUCKING CORPORATION and LAMBERT M. EROLES, respondents.

G.R. No. 141910. August 6, 2002.

Facts:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver units of

refrigerators aboard its truck. While traversing the road, it collided with an unidentified truck,
causing it to fall into a deep canal, resulting in damage to the cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid the value of the
covered cargoes to Concepcion Industries, Inc., (CII). 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 the
driver 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. Hence, FGU filed this petition for review on certiorari.

Issue:

WON the doctrine of Res ipsa loquitur is applicable in the instant case.

Held:

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 or control use proper care. It affords reasonable evidence, in the absence of
explanation by the defendant that the accident arose from want of care. It is not a rule of
substantive law and, as such, it 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 on the defendant the burden of going forward with the
proof. Resort to the doctrine, however, may be allowed only when (a) the event is of a kind
which does not ordinarily occur in the absence of negligence; (b) other responsible causes,
including the conduct of the plaintiff and third persons, are sufficiently eliminated by the
evidence and (c) the indicated negligence is within the scope of the defendants duty to the
plaintiff. 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 responsible. Petition denied.

PHILIPPINE RABBIT BUS LINES, INC. vs. THE HONORABLE

INTERMEDIATE APPELLATE COURT, ET AL.
G.R. Nos. 66102-04 August 30, 1990

Facts:

A jeep was carrying passengers when its right rear wheel became detached, causing it
to be unbalanced. The driver stepped on the brake, which made the jeep turn around,
encroaching on the opposite lane. The passenger jeepney was bumped from behind by a
speeding truck with such violence that three of its passengers died whereas two other
passengers suffered injuries. The representatives of the dead and of the injured passengers
filed suits to recover damages against the driver and the owners of the truck and also against
the driver and the owners of the jeepney.

The trial court rendered judgment absolving the driver and the owners of the jeepney
but required the driver and the owners of the truck to compensate the victims. The Plaintiffs
appealed insisting that the driver and the owners of the jeepney should also be made liable.
The Intermediate appellate court (now Court of Appeals), relying primarily on the doctrine
of last clear chance, affirmed the trial court's decision. The plaintiffs then filed a petition for
review on certiorari before the Court.

Issue:

WON the doctrine of last clear chance is applicable.

Held:

No. Citing the landmark case of Anuran, et al. v. Buo et. al., THE Supreme Court
reiterated that "[t]he principle about "the last clear" chance, would call for application in a
suit between the owners and drivers of the two colliding vehicles. It does not arise where a
passenger demands responsibility from the carrier to enforce its contractual obligations. For
it would be inequitable to exempt the negligent driver of the jeepney and its owners on the
ground that the other driver was likewise guilty of negligence."

The Intermediate Appellate Court committed an error of law in applying the

doctrine of last clear chance as between the defendants, since the case at bar is not a suit
between the owners and drivers of the colliding vehicles but a suit brought by the heirs of
the deceased passengers against both owners and drivers of the colliding vehicles.

In view of the foregoing, the Supreme Court modified the questioned decision by
making all the defendants solidarity liable.

ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO MONTEFALCON,

petitioners, vs. GERUNDIO B. CASTAO, and the COURT OF APPEALS,
respondents.
G.R. No. L-34597, November 05, 1982

Facts:

A passenger jeepney driven by petitioner Montefalcon and where private respondent

was a passenger was sideswiped by a cargo truck as both vehicles were approaching the
Sumasap Bridge at Oroquieta, Misamis Occidental. The jeepney fell into a ditch and private
respondent was thrown off, his right leg crushed by the weight of the jeepney. He sued
petitioners. It was undisputed that the cargo truck blew its horn to overtake the jeepney; that
the jeepney gave way but did not reduce its speed; that for a distance of 20 meters, the truck
and the jeepney ran side by side; and that the jeepney was sideswiped when the truck was in
the process of overtaking the said jeepney. The trial court rendered judgment in favor of
private respondent finding contributory negligence on the part of the jeepney's driver and
the proximate cause of the accident being the negligence of the truck driver. The decision of
the trial court was affirmed on appeal to the Court of Appeals. Hence, this petition.

Issue:

WON the jeepney driver is guilty of contributory negligence.

Held:

There is contributory negligence on the part of jeepney driver appellant Montefalcon

for having raced with the overtaking cargo truck to the bridge instead of slackening its speed.
The fact is, petitioner-driver Montefalcon did not slacken his speed but instead continued to
run the jeep at about forty (40) kilometers per hour even at the time the overtaking cargo
truck was running side by side for about twenty (20) meters and at which time he even
shouted to the driver of the truck.
Thus, had Montefalcon slackened the speed of the jeep at the time the truck was overtaking
it, instead of running side by side with the cargo truck, there would have been no contact
and accident. He should have foreseen that at the speed he was running, the vehicles were
getting nearer the bridge and as the road was getting narrower the truck would be too close
to the jeep and would eventually sideswipe it. Otherwise stated, he should have slackened his
jeep when he swerved it to the right to give way to the truck because the two vehicles could
not cross the bridge at the same time.

PHOENIX CONSTRUCTION, INC. and ARMANDO

U.CARBONEL, petitioners, vs. THE INTERMEDIATEAPPELLATE COURT and
LEONARDO DIONISIO, respondents.
G.R. No. L-65295, March 10, 1987

FACTS:

Sometime on November 1975, at about 1:30am, private respondent Leonardo

Dionisio was on his way home from a cocktails-and-dinner meeting with his boss, the
general manager of a marketing corporation, where he had taken "a shot or two" of liquor.
He had just crossed an intersection and while driving down the street, his headlights were
turned off. When he switched on his headlights to bright, he suddenly saw a Ford dump
truck some 2 meters away from his Volkswagen car. The dump truck belonged to
petitioner Phoenix, and was parked there by the company driver, co-petitioner Carbonel. It
was parked on the right hand side of the lane that Dionisio was driving on, but it was parked
facing the oncoming traffic. It was parked askew so it was sticking out onto the street, partly
blocking the way of oncoming traffic. There were no lights nor were there any early
warning reflector devices set anywhere near the truck, front or rear. Phoenix permitted
Carbonel to take home the truck, which was scheduled to be used the next morning.
Dionisio, upon seeing the truck, tried to avoid a collision by swerving to the left, but it was
too late. His car smashed into the truck. Dionisio suffered physical injuries, including
permanent facial scars, a nervous breakdown and loss of two gold bridge
dentures. Dionision filed an action for damages against Carbonel and Phoenix. Petitioners
countered the claim by imputing the accident to respondents own negligence in driving at a
high speed without curfew pass and headlights, and while intoxicated. It invoked the Last
Clear Chance. Accordingly, Dionisio had the Last Clear Chance of avoiding the accident and
so he, having failed to take the last clear chance, must bear his own injuries alone.
The trial court and the Court of Appeals ruled in favor of private respondent.

ISSUE:

Whether the collision was brought by respondents own negligence.

RULING:

No. Dionisio is guilty of contributory negligence but the legal and proximate cause
of the collision was brought about by the way the truck was parked. The legal and proximate
cause of the accident was the wrongful or negligent manner in which the dump truck was
parked. The collision of Dionisio's car with the dump truck was a natural and foreseeable
consequence of the truck driver's negligence.
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.

EMMA ADRIANO BUSTAMANTE, in her own behalf as Guardian-Ad-Litem of

minors: ROSSEL, GLORIA, YOLANDA, ERIC SON and EDERIC, all surnamed
BUSTAMANTE, Spouses SALVADOR JOCSON and PATRIA BONE-JOCSON,
Spouses JOSE RAMOS and ENRIQUETA CEBU-RAMOS, Spouses
NARCISO-HIMAYA and ADORACION MARQUEZ-HIMAYA, and Spouses JOSE
BERSAMINA and MA. COMMEMORACION

PEREA-BUSTAMANTE, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, FEDERICO DEL PILAR AND
EDILBERTO MONTESIANO, respondents.
G.R. No. 89880, February 6, 1991

FACTS:

On April 20, 1983 a collision occurred between gravel and sand truck Driven by
defendant Montesiano and owned by Del Pilar and a Mazda passenger Bus driven by
Defendant Susulin, along the national road at Kalibuyao Tanza, Cavite. The front left side
portion of the body of the truck sideswiped the left sidewall of the passenger bus which
resulted to the death of five individuals. The passenger bus was owned and operated by
Magtibay and Serrado.several passengers of the bus were thrown out and died as a result of
the injuries they sustained. The bus was registered in the name of Novelo but was owned
and/or operated as a passenger bus jointly by Magtibay and Serrado. Before the collision, the
cargo truck and the passenger bus were approaching each other, coming from the opposite
directions of the highway. While the truck was still about 30 meters away, Susulin, the bus
driver, saw the front wheels of the vehicle wiggling. He also observed that the truck was
heading towards his lane. Not minding this circumstance due to his belief that the driver of
the truck was merely joking, Susulin shifted from fourth to third gear in order to give more
power and speed to the bus, which was ascending the inclined part of the road, in order to
overtake or pass a Kubota hand tractor being pushed by a person along the shoulder of the
highway.
The Regional Trial Court ruled that the two drivers is liable are solidarily liable for
their negligence.
On appeal, the Court of Appeals decided that the bus driver had the clear chance to
avoid the collision and his reckless negligence in proceeding to overtake the hand tractor was
the proximate cause of the collision. Plaintiffs -appellees filed a motion for reconsideration,
but was denied by the CA. Hence this petition for review on certiorari seeking the reversal of
the decision o the respondent Court of appeals.

ISSUE:

Whether or not the Last Clear Chance Apply.

HELD:

No. Petition is granted. CA reversed. The doctrine of last clear chance means that even
though a person's own acts may have placed him in a position of peril, and an injury results,
the injured person is entitled to recovery. Further, a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or
that of a third person imputed to the opponent is considered in law solely responsible for
the consequences of the accident.
In the case at bar, the suit is not between the owners and drivers of the colliding vehicles
but a suit brought by the heirs of the deceased passengers against both owners and drivers of
the colliding vehicles. Therefore, the court erred in absolving the owner and driver of the
cargo truck from liability.

VICENTE CALALAS, petitioner, vs. COURT OF APPEALS, ELIZA JUJEURCHE

SUNGA and FRANCISCO SALVA, respondents.
G.R. No. 122039 May 31, 2000

FACTS:

On the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga, then a
college freshman major in Physical Education at the Siliman University took a passenger
jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity
of about 24 passengers, 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.
On October 9, 1989, 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. Calalas, on the other hand, filed a third-party complaint against Francisco
Salva, the owner of the Isuzu truck.
The Regional Trial Court of Dumaguete rendered judgment against Salva holding that the
driver of the Isuzu truck was responsible.
The Court of Appeals reversed the RTC, awarding damages instead to Sunga as plaintiff in an
action for breach of contract of carriage since the cause of action was based on such and not
quasi delict. Hence, current petition for review on certiorari.

ISSUES:

(1) Whether the decision in the Civil Case No 3490 for quasi-delict between Calalas on
one hand and Salva and Verena on the other, is res judicata to the issue in this case.
(2) Whether the ruling in Civil Case No 3490 that the negligence of Verena was the
proximate cause of the accident negates Calalas liability.

HELD:

1. No. There is no basis for the contention that the ruling in Civil Case No 3490,
finding Salva and his driver Verena liable for the damage to Calalas jeepney, should be
binding on Sunga. The latter was never a party to the Civil Case. Nor are the issues in Civil
Case No. 3490 and in the present case the same. The issue in Civil Case No. 3490 was whether
Salva and his driver Verena were liable for quasi-delict for the damage caused to petitioner's
jeepney. On the other hand, the issue in this case is whether petitioner is liable on his contract
of carriage. The first, quasi-delict, also known as culpa aquiliana or culpa extra contractual, has
as its source the negligence of the tortfeasor. The second, breach of contract or culpa
contractual, is premised upon the negligence in the performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly established because it is
the basis of the action, whereas in breach of contract, the action can be prosecuted merely by
proving the existence of the contract and the fact that the obligor, in this case the common
carrier, failed to transport his passenger safely to his destination.
2. No. 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. The
doctrine is a device for imputing liability to a person where there is no relation between him
and another party. In such a case, the obligation is created by law itself. But, where there is a
pre-existing contractual relation between the parties, it is the parties themselves who create the
obligation, and the function of the law is merely to regulate the relation thus created. Insofar as
contracts of carriage are concerned, some aspects regulated by the Civil Code are those
respecting the diligence required of common carriers with regard to the safety of passengers
as well as the presumption of negligence in cases of death or injury to passengers.

THE ILOCOS NORTE ELECTRIC COMPANY

vs.
HONORABLE COURT OF APPEALS, (First Division) LILIAN JUAN LUIS, JANE
JUAN YABES, VIRGINIA JUAN CID, GLORIA JUAN CARAG, and PURISIMA
JUAN

 1
0

G.R. No. L-53401 November 6, 1989

FACTS:

In the evening of June 28 until the early morning of June 29, 1967, typhoon "Gening"
buffeted the Province of Ilocos Norte, bringing heavy rains and consequent flooding in its
wake. Between 5:30 and 6:00 A.M. on June 29, 1967, after the typhoon had abated and when
the floodwaters were beginning to recede, the deceased Isabel Lao Juan, fondly called Nana
Belen, ventured out of the house of her son-in-law, Antonio Yabes, on No. 19 Guerrero
Street, Laoag City, and proceeded northward towards the direction of the Five Sisters
Emporium, of which she was the owner and proprietress, to look after the merchandise
therein that might have been damaged. Wading in waist-deep flood on Guerrero, the deceased
was followed by Aida Bulong and Linda Alonzo Estavillo. Aida and Linda walked side by side
at a distance of between 5 and 6 meters behind the deceased. Suddenly, the deceased screamed
"Ay" and quickly sank into the water. The two girls attempted to help, but fear dissuaded them
from doing so because on the spot where the deceased sank they saw an electric wire dangling
from a post and moving in snake-like fashion in the water. Upon their shouts for help, Ernesto
dela Cruz came out of the house of Antonio Yabes. Ernesto tried to go to the deceased, but at
four meters away from her he turned back shouting that the water was grounded. When
Antonio Yabes was informed by Ernesto that his mother-in law had been electrocuted, he
acted immediately. Yabes passed by the City Hall of Laoag to request the police to ask the
people of Ilocos Norte Electric Company or INELCO to cut off the electric current. Then the
party waded to the house on Guerrero Street. The floodwater was receding and the lights
inside the house were out indicating that the electric current had been cut off in Guerrero.
Yabes instructed his boys to fish for the body of the deceased. The body was recovered about
two meters from an electric post.

Meanwhile, on the same day the incident happen, Engr. Antonio Juan of the National
Power Corporation set out on an inspection trip between 6:00 and 6:30 A.M., he saw grounded
and disconnected electric lines owned by such electric company but saw no INELCO lineman.
The INELCO Office at the Life theatre on Rizal Street was still closed.

An action for damages was instituted by the heirs of the deceased before the CFI of
Ilocos Norte a year after the incident. At the trial, petitioners witnesses testified in a general
way about their duties and the measures which defendant usually adopts to prevent hazards to
life and limb. From these testimonies, the lower court found that the electric lines and other
equipment of the electric company were properly maintained by a well-trained team of
lineman, technicians and engineers working around the clock to insure that these equipments
were in excellent condition at all times. The petitioner then, prays that the company be
exonerated from liability since typhoons and floods are fortuitous events and that the acts of
the private respondents falls within the sphere of the maxim of "volenti non fit injuria"

ISSUE:

Can the petitioner-company, in this case, be exonerated from liability on the

contention that typhoons and floods are fortuitous events?

RULING:

No. While it is true that typhoons and floods are considered Acts of God for which
no person may be held responsible, it was not said eventuality which directly caused the
victim's death. It was through the intervention of petitioner's negligence that death took
place. The finding of the lower court was based on what the
defendant's(petitioner-company) employees were supposed to do, not on what they actually
did or failed to do on the date in question, and not on the occasion of
the emergency situation brought about by the typhoon.

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In times of calamities such as the one which occurred in Laoag City on the night of
June 28 until the early hours of June 29, 1967, extraordinary diligence requires a supplier
of electricity to be in constant vigil to prevent or avoid any probable incident that might
imperil life or limb. The evidence does not show that defendant-company did that. On the
contrary, evidence discloses that there were no men policing the area, nor even manning its
office. Indeed, under the circumstances of the case, petitioner was negligent in seeing to it
that no harm is done to the general public. Considering that electricity is an agency, subtle
and deadly, the measure of care required of electric companies must be commensurate with
or proportionate to the danger. The duty of exercising this high degree of diligence and care
extends to every place where persons have a right to be (Astudillo vs. Manila Electric, 55
Phil. 427). The negligence of petitioner having been shown, it may not now absolve itself
from liability by arguing that the victim's death was solely due to a fortuitous event. When
an act of God combines or concurs with the negligence of the defendant to produce
an injury, the defendant is liable if the injury would not have resulted but for his own
negligent conduct or omission.

Likewise, the maxim "volenti non fit injuria" relied upon by petitioner finds no
application in the case at bar. It is imperative to note the surrounding circumstances which
impelled the deceased to leave the comforts of a roof and brave the subsiding typhoon. As
testified by Linda Alonzo Estavillo and Aida Bulong, the deceased, accompanied by the
former two, were on their way to the latter's grocery store "to see to it that the goods were
not flooded." As such, shall We punish her for exercising her right to protect her property
from the floods by imputing upon her the unfavorable presumption that she assumed the
risk of personal injury? Definitely not. For it has been held that a person is excused from
the force of the rule, that when he voluntarily assents to a known danger he must
abide by the consequences, if an emergency is found to exist or if the life or property
of another is in peril, or when he seeks to rescue his endangered property. Clearly, an
emergency was at hand as the deceased's property, a source of her livelihood, was faced with
an impending loss. Furthermore, the deceased, at the time the fatal incident occurred, was at
a place where she had a right to be without regard to petitioner's consent as she was on her
way to protect her merchandise. Hence, private respondents, as heirs, may not be barred
from recovering damages as a result of the death caused by petitioner's negligence.

AVELINO CASUPANAN and ROBERTO CAPITULO

vs.
MARIA LLAVORE LAROYA
G.R. No. 145391. August 26, 2002

FACTS:

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Two vehicles, one driven by respondent Mario Llavore Laroya (Laroya for brevity) and
the other owned by petitioner Roberto Capitulo (Capitulo for brevity) and driven by petitioner
Avelino Casupanan (Casupanan for brevity), figured in an accident. As a result, two cases were
filed with the Municipal Circuit Trial Court (MCTC for brevity) of Capas, Tarlac. Laroya filed
a criminal case against Casupanan for reckless imprudence resulting in damage to property,
docketed as Criminal Case No. 002-99. On the other hand, Casupanan and Capitulo filed a
civil case against Laroya for quasi-delict, docketed as Civil Case No. 2089.
When the civil case was filed, the criminal case was then at its preliminary investigation
stage. Laroya, defendant in the civil case, filed a motion to dismiss the civil case on the ground
of forum-shopping considering the pendency of the criminal case. The MCTC granted the
motion in the Order of March 26, 1999 and dismissed the civil case.
On Motion for Reconsideration, Casupanan and Capitulo insisted that the civil case is a
separate civil action which can proceed independently of the criminal case. The MCTC denied
the motion for reconsideration in the Order of May 7, 1999. Casupanan and Capitulo filed a
petition for certiorari under Rule 65 before the Regional Trial Court (Capas RTC for brevity)
of Capas, Tarlac, assailing the MCTCs Order of dismissal but the Capas RTC dismissed the
petition for certiorari for lack of merit.

ISSUE:
Can an accused in a pending criminal case for reckless imprudence can validly file,
simultaneously and independently, a separate civil action for quasi-delict against the private
complainant in the criminal case?

RULING:
Yes. The criminal case is based on culpa criminal punishable under the Revised Penal
Code while the civil case is based on culpa aquiliana actionable under Articles 2176 and 2177 of
the Civil Code. Laroya filed the criminal case for reckless imprudence resulting in damage to
property based on the Revised Penal Code while Casupanan and Capitulo filed the civil action
for damages based on Article 2176 of the Civil Code. Although these two actions arose from
the same act or omission, they have different causes of action. Article 2176 provides that
whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter. Further, Art. 2177 reads that responsibility for fault or negligence
under the preceding article is entirely separate and distinct from the civil liability arising from
negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same
act or omission of the defendant. Any aggrieved person can invoke these articles provided he
proves, by preponderance of evidence, that he has suffered damage because of the fault or
negligence of another. There is nothing in the law or rules that state only the private
complainant in a criminal case may invoke these articles. Hence, either the private
complainant or the accused can file a separate civil action under these articles.

SCHMITZ TRANSPORT & BROKERAGE CORPORATION v. TRANSPORT

VENTURE, INC., INDUSTRIAL INSURANCE COMPANY, LTD., et al.
G.R. No. 150255. April 22, 2005

FACTS:

SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board M/V
Alexander Saveliev (a vessel of Russian registry and owned by respondent Black Sea) 545
hot rolled steel sheets. The vessel arrived at the port of Manila and the Philippine Ports

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Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila South
Harbor. Petitioner Schmitz Transport, engaged to secure the requisite clearances, to receive
the cargoes from the shipside, and to deliver them to Little Giant Steelpipe Corporations
warehouse at Cainta, Rizal. It likewise engaged the services of respondent Transport Venture
Inc. (TVI) to send a barge and tugboat at shipside.

The tugboat, after positioning the barge alongside the vessel, left and returned to the
port terminal. Later on, arrastre operator commenced to unload 37 of the 545 coils from the
vessel unto the barge. By noon the next day, during which the weather condition had become
inclement due to an approaching storm, the unloading unto the barge of the 37 coils was
accomplished. However, there was no tugboat that pulled the barge back to the pier.
Eventually, because of the strong waves, the crew of the barge abandoned it and transferred to
the vessel. The barge capsized, washing the 37 coils into the sea. Earnest efforts on the part of
both the consignee Little Giant and Industrial Insurance to recover the lost cargoes proved
futile.

Industrial Insurance later filed a complaint against Schmitz Transport, TVI and Black
Sea through its representative Inchcape (the defendants) before the RTC of Manila, for the
recovery of the amount it paid to Little Giant plus adjustment fees, attorneys fees,
and litigation expenses. Industrial Insurance won and the Schmitz et al.s motion for
reconsideration is denied.

In effect, Schmitz now filed charges against TVI et al. It asserts that in chartering the
barge and tugboat of TVI, it was acting for its principal, consignee Little Giant, hence, the
transportation contract was by and between Little Giant and TVI. The Court rendered a
decision holding Schmitz and TVI liable.

ISSUES:

1. Was the loss of the cargoes due to a fortuitous event, independent of any act of
negligence on the part of petitioner Black Sea and TVI?
2. Assuming that there is negligence, who is/are liable for such loss?

HELD:

1. No. The failure of TVI to tow the barge back in the pier was the proximate cause of
the loss of the cargoes. Settled is the rule that an act of God doctrine strictly
requires that the act must be occasioned solely by the violence of nature.
Human intervention is to be excluded from creating or entering into the cause
of the mischief. When the effect is found to be in part the result of the
participation of man, whether due to his active intervention or neglect or
failure to act, the whole occurrence is then humanized and removed from the
rules applicable to the acts of God. Had the barge been towed back promptly to the
pier, the deteriorating sea conditions notwithstanding, the loss could have been
avoided. But the barge was left floating in open sea until big waves set in at 5:30 a.m.,
causing it to sink along with the cargoes. The loss thus falls outside the act of God
doctrine.
2. Schmitz and TVI are solidarily liable for the loss of the cargoes. TVIs failure to
promptly provide a tugboat did not only increase the risk that might have been
reasonably anticipated during the shipside operation, but was the proximate
cause of the loss. A man of ordinary prudence would not leave a heavily loaded barge
floating for a considerable number of hours, at such a precarious time, and in
the open sea, knowing that the barge does not have any power of its own and is totally
defenseless from the ravages of the sea. That it was nighttime and, therefore, the
members of the crew of a tugboat would be charging overtime pay did not excuse TVI
from calling for one such tugboat. As for Schmitz, for it to be relieved of liability, it
should, following Article 1739 of the Civil Code, prove that it exercised due
diligence to prevent or minimize the loss, before, during and after the

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occurrence of the storm in order that it may be exempted from liability for the
loss of the goods. While Schmitz sent checkers and a supervisor on board the vessel
to counter-check the operations of TVI, it failed to take all available and reasonable
precautions to avoid the loss. After noting that TVI failed to arrange for the prompt
towage of the barge despite the deteriorating sea conditions, it should have summoned
the same or another tugboat to extend help, but it did not. As for Black Sea, its duty as
a common carrier extended only from the time the goods were surrendered or
unconditionally placed in its possession and received for transportation until they were
delivered actually or constructively to consignee Little Giant. Since Black Sea had
constructively delivered the cargoes to Little Giant, through Schmitz, it had discharged
its duty. In fine, no liability may thus attach to Black Sea.

Samsung Construction Company Philippines, Inc. vs. Far East Bank and Trust
Company and CA
G.R. No. 129015, August 13, 2004

Facts:

Samsung Construction Company Philippines, Inc. (Samsung Construction) had a

deposit account with Far East Bank and Trust Company (FEBTC). A certain Robert
Gonzaga presented a check for payment before the FEBTC branch in Makati. The check

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was payable to Cash and drawn against Samsung Construction's current account in the
amount of P999,500.00. The bank teller then compared the signature appearing on the check
with the specimen signature of Jong as contained in the specimen signature card with the
bank. The teller was satisfied that it was Jongs signature on the check. She then asked
Gonzaga to submit proof of his identity, which the latter did through three identification
cards. At the same time, she forwarded the check to branch Senior Assistant Cashier
Gemma Velez who counter checked the signature on the check with the specimen. She then
forwarded the check to Shirley Syfu, another bank branch officer, for approval. Syfu noticed
that Jose Sempio III, the assistant accountant of Samsung Construction, was also in the
bank. Syfu showed the check to Sempio, who verified Jongs signature and vouched for the
identity of Gonzaga. Syfu then authorized the bank's encashment of the check to Gonzaga.
The following day, accountant Kyu examined the balance of the bank account of Samsung
Construction and discovered that a check worth P999,500 had been encashed. Aware that he
had not prepared such check he reported the matter to Jong, who learned of the encashment
of the check, and realized that his signature had been forged. Samsung Construction sued
FEBTC before the Regional Trial Court (RTC) for violation of Section 23 of the Negotiable
Instruments Law. The RTC gave more weight to the NBI examiners findings, and found in
favor of Samsung Construction. On appeal, the Court of Appeals (CA) reversed the RTC
decision and absolved FEBTC from any liability. Hence, the present petition.

Issues:

1. Whether or not the bank was negligent when it encashed the forged check.

Ruling:

Yes, the bank is negligent in encashing the forged check. The Court rules that while it is
true that the bank complied with its internal rules prior to paying out the questionable check,
there are several troubling circumstances that led the Court to believe that the bank itself
was remiss in its duty. The Supreme Court reiterates that the highest degree of care and
diligence is required of banks. Banks are engaged in a business impressed with public
interest, and it is their duty to protect their many clients and depositors who transact
business with them. They have the obligation to treat their client's account meticulously and
with the highest degree of care, considering the fiduciary nature of their relationship. The
diligence required of banks, therefore, is more than that of a good father of a family. Given
the circumstances, extraordinary diligence dictates that FEBTC should have ascertained
from Jong personally that the signature in the questionable check was his.

LIBI VS IAC
G.R. No. 70890. September 18, 1992

FACTS:

Julie Ann Gotiong and Wendell Libi, both minors, are sweethearts for more than two
years until Julie (for brevity) broke up her relationship with Wendell after she found him to
be sadistic and irresponsible. Wendell wanted reconciliation but Julie persisted in her refusal.

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This prompted the former to resort to threats against her. One day Julie Ann and
Wendell died from a single gunshot wound each comingfrom the same
Smith and Wesson revolver licensed in the name of petitioner Cresencio Libi, Wendells
father.

As a result of the tragedy, the parents of Julie Ann filed Civil Case against the parents of
Wendell to recover damages arising from the latters vicarious liability under Article 2180 of
the Civil Code. After trial, the court rendered judgment dismissing plaintiffs complaint for
insufficiency of the evidence. CA set aside the decision of the lower court.

ISSUE:

1. Whether or not Wendells parents should be held liable for damages.

RULING:

The civil liability of parents for quasi-delicts of their minor children, is contemplated in
Article 2180 of the Civil Code. Accordingly, such parental liability is primary and not
subsidiary, as the last paragraph of Article 2180 provides that" (t)he responsibility treated of
in this article shall cease when the persons herein mentioned prove that they observed all the
diligence of a good father of a family to prevent damages." In other words, the parents'
liability as being primary and not subsidiary and liability shall ceased if the parents can prove
that they observe all the diligence of a good father to prevent damage.

However, defendants-appellees utterly failed to exercise all the diligence of a good father
of the family in preventing their minor son from committing this crime by means of the gun
which was freely accessible to Wendell Libi for they have not regularly checked whether said
gun was still under lock, but learned that it was missing from the safety deposit box only
after the crime had been committed. Wendell could have not gotten hold of the gun if the
key was not left negligently lying around.

Valenzuela vs. CA
253 SCRA 303, February 7, 1996

Facts:

Plaintiff Valenzuela was driving at Marcos highway to her home, at around 2:00 in the
morning. She noticed something wrong with her tires; she stopped at a lighted place where
there were people, to verify whether she had a flat tire and to solicit help if needed. Having

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been told by the people present that her rear right tire was flat, she parked along the
sidewalk, and about 1-1/2 feet away, put on her emergency lights, alighted from the car, and
went to the rear to open the trunk. She was standing at the left side of the rear of her car
pointing to the tools to a man who will help her fix the tire when she was suddenly bumped
by a car driven by defendant Richard Li and registered in the name of defendant Alexander
Commercial, Inc. Because of the impact plaintiff was thrown against the windshield of the
car of the defendant, which was destroyed, and then fell to the ground. She was confined in
the hospital for twenty days and was eventually fitted with an artificial leg.

Issues:

1. Whether or not Li was negligent.

2. Whether or not Valenzuela was guilty of contributory negligence.
3. Whether or not Alexander Commercial, Inc. as Li's employer should be held liable.

Ruling:

1. Yes. Valenzuela's version of the incident was fully corroborated by an uninterested

witness. As between Li's "self-serving" asseverations and the observations of a witness who
did not even know the accident victim personally and who immediately gave a statement of
the incident similar to his testimony to the investigator immediately after the incident, the
latter's testimony deserves greater weight.

2. No. Under the "emergency rule", an individual who suddenly finds himself in a situation
of danger and is required to act without much time to consider the best means that may be
adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake
what subsequently and upon reflection may appear to be a better solution, unless the
emergency was brought by his own negligence. The emergency which led her to park her car
on a sidewalk was not of her own making, and it was evident that she had taken all
reasonable precautions.

3. Yes. Utilizing the bonus pater familias standard expressed in Article 2180 of the Civil
Code, we are of the opinion that Li's employer, Alexander Commercial, Inc. is jointly and
solidarily liable for the damage caused by the accident. Based on the principle of pater familias,
the liability ultimately falls upon the employer for his failure to exercise the diligence of a
good father of the family in the selection and supervision of his employees.

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO vs.HON.

COURT OF APPEALS, THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20,
Vigan, Ilocos Sur; VICTOR BUNDOC; and CLARA BUNDOC
G.R. No. 85044 June 3, 1992
FACTS:

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On October 20, 1982, Adelberto Bundoc, then a minor of 10 years of age, shot
Jennifer Tamargo with an air rifle causing injuries which resulted in her death. Accordingly, a
civil complaint for damages was filed with the Regional Trial Court by petitioner Macario
Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and Aurelia Tamargo,
Jennifer's natural parents against respondent spouses Victor and Clara Bundoc, Adelberto's
natural parents with whom he was living at the time of the tragic incident.

Prior to the incident, the spouses Sabas and Felisa Rapisura had filed a petition to
adopt the minor Adelberto Bundoc before the then Court of First Instance of Ilocos Sur. This
petition for adoption was granted after Adelberto had shot and killed Jennifer. In their
Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of the
foregoing petition for adoption, claimed that not they, but rather the adopting parents, namely
the spouses Sabas and Felisa Rapisura, were indispensable parties to the action since parental
authority had shifted to the adopting parents from the moment the successful petition for
adoption was filed. Petitioners in their Reply contended that since Adelberto Bundoc was then
actually living with his natural parents, parental authority had not ceased nor been relinquished
by the mere filing and granting of a petition for adoption. The trial court dismissed petitioners'
complaint, ruling that respondent natural parents of Adelberto indeed were not indispensable
parties to the action.

ISSUE:

Whether or not the effects of adoption, insofar as parental authority is concerned may
be given retroactive effect so as to make the adopting parents the indispensable parties in a
damage case filed against their adopted child, for acts committed by the latter, when actual
custody was yet lodged with the biological parents?

RULING:

No. The Court does not consider that retroactive effect may be given to the decree of
adoption so as to impose a liability upon the adopting parents accruing at a time when
adopting parents had no actual or physical custody over the adopted child. Retroactive effect
may perhaps be given to the granting of the petition for adoption where such is essential to
permit the accrual of some benefit or advantage in favor of the adopted child. In the instant
case, however, to hold that parental authority had been retroactively lodged in the Rapisura
spouses so as to burden them with liability for a tortious act that they could not have foreseen
and which they could not have prevented (since they were at the time in the United States and
had no physical custody over the child Adelberto) would be unfair and unconscionable. Such a
result, moreover, would be inconsistent with the philosophical and policy basis underlying the
doctrine of vicarious liability. Put a little differently, no presumption of parental dereliction on
the part of the adopting parents, the Rapisura spouses, could have arisen since Adelberto was
not in fact subject to their control at the time the tort was committed.

JOSE AMADORA, ET. AL vs. HONORABLE COURT OF APPEALS

G. R. NO. L-47745 April 15, 1988
FACTS:

On April 13, 1972, while they were in the auditorium of their school, the Colegio de
San Jose-Recoletos, a classmate, Pablito Daffon, fired a gun that mortally hit and killed the

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seventeen years old, Alfredo Amadora. Daffon was convicted of homicide thru reckless
imprudence. Additionally, the herein petitioners, Amadora, as the victim's parents, filed a civil
action for damages under Article 2180 of the Civil Code against the Colegio de San
Jose-Recoletos, its rector the high school principal, the dean of boys, and the physics teacher,
together with Daffon and two other students, through their respective parents.

The complaint against the students was later dropped. After trial, the Court of First
Instance of Cebu held the remaining defendants liable to the plaintiffs. On appeal to the
respondent court, the school averred that the students were not in the custody of the school at
the time of the incident as the semester had already ended. The petitioners, contend that their
son was in the school to show his physics experiment as a prerequisite to his graduation; hence,
he was then under the custody of the private respondents. The Court of Appeals ruled in favor
of the school. It found that Article 2180 was not applicable as the Colegio de San
Jose-Recoletos was not a school of arts and trades but an academic institution of learning.

ISSUE:

Whether Colegio de San Jose-Recoletos, an academic school, is liable under Article

2180 of the Civil Code for the tortuous act of Daffon.

RULING:

No. Although the Supreme Court ruled that (1) ALL schools, academic or not, may be
held liable under the provision of Article 2180 which provides that: Lastly, teachers or heads of
establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices so
long as they remain in their custody and that (2) such liability does not cease when the school year
ends or when the semester ends and the responsibility of the school authorities over the
student continues so long as it can be shown that the student is in the school premises in
pursuance of a legitimate student objective, in the exercise of a legitimate student right, and
even in the enjoyment of a legitimate student right, and even in the enjoyment of a legitimate
student privilege, the Colegio de San Jose-Recoletos cannot be held directly liable under the
article because only the teacher or the head of the school of arts and trades is made responsible
for the damage caused by the student or apprentice. Neither can it be held to answer for the
tort committed by any of the other private respondents for none of them has been found to
have been charged with the custody of the offending student or has been remiss in the
discharge of his duties in connection with such custody. In the case at bar, the Physics teacher
in charge was not properly named, and there was no sufficient evidence presented to make the
said teacher-in-charge liable. Thus, absent the direct liability of the teachers because of the
foregoing reason, the school cannot be held subsidiarily liable too.

ST. FRANCIS HIGH SCHOOL vs. THE HONORABLE COURT OF APPEALS

G.R. No. 82465 February 25, 1991

FACTS:

Ferdinand Castillo, a freshman student at the St. Francis High School, wanted to join a
school picnic at Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents spouses Dr.

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Romulo Castillo and Lilia Cadiz Castillo, because of short notice, did not allow their son to
join but merely allowed him to bring food to the teachers for the picnic, with the directive that
he should go back home after doing so. However, because of persuasion of the teachers,
Ferdinand went on with them to the beach. During the picnic, one of the female teachers was
apparently drowning. Some of the students, including Ferdinand, came to her rescue, but in
the process, it was Ferdinand himself who drowned and later on died.

Thereupon, respondent spouses filed a complaint in the Regional Trial Court against
the St. Francis High School, and the teachers contending that the death of their son was due to
the failure of the petitioners to exercise the proper diligence of a good father of the family in
preventing their son's drowning. The trial court found the teachers liable but dismissed the
case against the school. The Court of Appeals declared that the teachers failed to exercise the
diligence of a good father of the family to guard against the foreseen harm. Also, the school
and the principal Benjamin Illumin was declared jointly and solidarily liable with the teachers
for the death of Ferdinand Castillo, under Article 2180 of the Civil Code of the Philippines.

ISSUE:

Whether the school St. Francis High School, principal, teachers were liable for the
death of Ferdinand.
RULING:

No. Under Article 2180 of the Civil Code, before an employer may be held liable for
the negligence of his employee, the act or omission which caused damage or prejudice must
have occurred while an employee was in the performance of his assigned tasks. In the case at
bar, the teachers/petitioners were not in the actual performance of their assigned tasks. The
incident happened not within the school premises, not on a school day and most importantly
while the teachers and students were holding a purely private affair, a picnic which had no
permit from the school head or its principal, Benjamin Illumin because this picnic is not a
school sanctioned activity neither is it considered as an extra-curricular activity. Also, mere
knowledge by petitioner/principal Illumin of the planning of the picnic by the students and
their teachers does not in any way or in any manner show acquiescence or consent to the
holding of the same. The application therefore of Article 2180 has no basis in law and neither
is it supported by any jurisprudence.

Finally, no negligence could be attributable to the petitioners-teachers to warrant the

award of damages to the respondents-spouses. The class adviser of the section where
Ferdinand belonged did her best and exercised diligence of a good father of a family to
prevent any untoward incident or damages to all the students who joined the picnic.

JARCO MARKETING CORPORATION V. CA

G.R. No. 129792, 21 December 1999

FACTS:

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On May 9, 1983, Criselda and her 6 year old daughter Zhieneth were at the second
floor of Syvels Department Store, Makati City. While Criselda was signing her credit card
slip at the counter, suddenly she felt a sudden gust of wind and heard a loud thud. As she
looked behind her, she saw Zhieneth's body pinned by the entire structure of the store's
gift-wrapping counter. Zhieneth was quickly rushed to the Makati Medical Center where she
was operated on.

The following day, Zhieneth lost her speech and can only communicate through a
magic slate. Unfortunately, she died 14 days later because of the severity of her injuries.
After the burial, Crisielda demanded upon Jarco Marketing the reimbursement of the
hospitalization, medical bills and wake and funeral expenses which they had incurred. But,
they refused to pay hence, Crisielda filed for a complaint for damages.

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

ISSUE

Whether Jarco marketing was negligent or it was an accident

RULING

Yes, Jaco Marketing was negligent. What transpired was not an unforeseen event in
which would attach no fault on the part of the defendant. Jaco Marketing failed to observe
for the protection of the interest of another person and show that degree of care, precaution
and vigilance. Under the circumstances thus described, it is unthinkable for Zhieneth, a child
of such tender age is incapable of contributory negligence. In our jurisdiction, a person
under nine years of age is conclusively presumed to have acted without discernment, and is,
on that account, exempt from criminal liability. The same presumption and a like exemption
from criminal liability obtains in a case of a person over nine and under fifteen years of age,
unless it is shown that he has acted with discernment.

Further, even if we attribute contributory negligence to Zhieneth and assume that

she climbed over the counter, no injury should have occurred if we accept petitioners' theory
that the counter was stable and sturdy.

PHIL. SCHOOL OF BUSINESS ADMINISTRATION V. CA

G.R. No. 84698, 4 February 1992

FACTS

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Carlos Bautista is a third-year commerce student of Philippine School of Business

Administration. He was stabbed to death by assailants who were not members of the
schools academic community while on the second floor premises of their school.

The parents of Carlos Bautista filed a civil action against the school authorities alleging
that the school is negligent, reckless and with failure to take security precautions during and
after the attack. The case was elevated in the court of appeals, and the CA favored the claim
of the parents of Baustista.

ISSUE

Whether the appellate court was correct in deciding the case based on Article 2180- in
loco parentis

Whether the application of the law on quasi-delicts is proper when there is a pre-existing
contract

RULING

The SC did not agree with the premises of the CAs ruling. Article 2180, in
conjunction with Article 2176 of the Civil Code, establishes the rule in in loco parentis. It
had been stressed that the law (Article 2180) plainly provides that the damage should have
been caused or inflicted by pupils or students of the educational institution sought to be held
liable for the acts of its pupils or students while in custody.

Hoewever, this material situation does not exist in the present case for the assailants of
Carlitos were not students of PSBA, for whose acts the school could have been made liable.

As to whether PSBA is exculpated for liability, it does not necessarily follows. It does
not necessarily follow. When an academic institution accepts students for enrollment, there
is established a contract between them, resulting in bilateral obligations which both parties
are bound to comply with.

Moreover, there is that built-in obligation to provide students with an atmosphere that
promotes or assists in attaining its primary undertaking of imparting knowledge. The school
must ensure that adequate steps are taken to maintain the peace and order inside the school.
Because of the circumstances of the present case shows a contractual relation between the
school and Carlitos, the rule on quasi-delict do not really govern but it does not relieve the
school from extra contractual liability to Carlitos. In the present case, there is no finding that
the contract between the school and Carlitos had been breached thru the schools negligence
in providing proper security measures.

ST. MARYS ACADEMY V. CARPITANOS

G.R. No. 143363, 6 February 2002

FACTS

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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 accident.

ISSUE

Whether the petitioner should be held liable for the damages.

HELD:

The 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. Further, 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.

Castilex Industrial Corporation v. Vicente Vasquez, Jr.

G.R. No. 132266, December 21, 1999

Facts:

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On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was
driving a motorcycle around Fuente Osmea Rotunda. He was traveling counter-clockwise,
but without any protective helmet. He was also only carrying a Student's Permit to Drive at
that time. Upon the other hand, Benjamin Abad, manager of Castilex Industrial Corporation,
registered owner of a pick-up, drove the said company car out of a parking lot. But instead
of going around the Osmea rotunda, he made a shortcut against the flow of the traffic.

In the process, the motorcycle of Vasquez and the pick-up of Abad collided with
each other causing severe injuries to the former. Abad stopped his vehicle and brought
Vasquez to the Southern Islands Hospital and later to the Cebu Doctor's Hospital. On
September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was there that Abad
signed an acknowledgment of Responsible Party wherein he agreed to pay whatever hospital
bills, professional fees and other incidental charges Vasquez may incur.

After the police authorities had conducted the investigation of the accident, a
Criminal Case was filed against Abad but which was subsequently dismissed for failure to
prosecute. The present action for damages was commenced by Vicente Vasquez, Jr. and
Luisa So Vasquez, parents of the deceased Romeo So Vasquez, against Abad and Castilex
Industrial Corporation. In the same action, Cebu Doctor's Hospital intervened to collect
unpaid balance for the medical expense given to Romeo So Vasquez.

Issue:

WON Castilex Industrial Corporation may be held vicariously liable for the death
of Romeo So Vasquez resulting from the negligent operation by Abad of a company-issued
vehicle.

Ruling:

NO. The mere fact that Abad was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears that he was operating the vehicle within the course
or scope of his employment.

In the case at bar, Abad did some overtime work at the petitioner's office.
Thereafter, he went to Goldie's Restaurant which is about seven kilometers away from
petitioner's place of business. At the Goldie's Restaurant, Abad took some snacks and had a
chat with friends. It was when Abad was leaving the restaurant that the incident in question
occurred.

To the mind of the Court, Abad was engaged in affairs of his own or was carrying
out a personal purpose not in line with his duties at the time he figured in a vehicular
accident. It was about 2:00 a.m., way beyond the normal working hours. Abad's working day
had ended; his overtime work had already been completed. Since there is paucity of evidence
that Abad was acting within the scope of the functions entrusted to him, petitioner Castilex
Industrial Corporation had no duty to show that it exercised the diligence of a good father of
a family in providing Abad with a service vehicle. Thus, justice and equity require that
petitioner be relieved of vicarious liability for the consequences of the negligence of Abad in
driving its vehicle.

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Petitioner Castilex Industrial Corporation is absolved of any liability for the damages
caused by its employee, Jose Benjamin Abad. 2

Philippine Rabbit Bus Lines, Inc., et.al. V. Phil-American Forwarders et.al.

G.R. No. L-25142, March 25, 1975

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Facts:

On November 24, 1962, Fernando Pineda drove recklessly a freight truck, owned by
Phil-American Forwarders, Inc., along the national highway at Sto. Tomas, Pampanga. The
truck bumped the bus driven by Pangalangan, which was owned by Philippine Rabbit Bus
Lines, Inc. As a result of the bumping, Pangalangan suffered injuries and the bus was damaged
and could not be used for seventy-nine days, thus depriving the company of earnings
amounting to P8,665.51. Balingit was the manager of Phil-American Forwarders, Inc.
Among the defenses interposed by the defendants in their answer was that Balingit was
not Pineda's employer. Balingit moved that the complaint against him be dismissed on the
ground that the bus company and the bus driver had no cause of action against him.

Issue:

Whether the terms "employers", "owners and managers of an establishment or

enterprise" used in Article 2180 of the Civil Code, embrace the manager of a corporation
owning a truck, the reckless operation of which allegedly resulted in the vehicular accident
from which the damage arose.

Ruling:

NO. Those terms do not include the manager of a corporation. Under Article 2180 the
term "manager" is used in the sense of "employer" and does not embrace a "manager" who
may himself be regarded as an employee or dependiente of his employer.

Under the allegations of the complaint, no tortious or quasi-delictual liability can be

fastened on Balingit as manager of Phil-American Forwarders, Inc., in connection with the
vehicular accident because he himself may be regarded as an employee of his employer,
Phil-American Forwarders, Inc.

Ernesto Martin v. Hon. Court of Appeals and Manila Electric Company

G. R. No. 82248, January 30, 1992

Facts:

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The private car of Ernesto Martin was being driven by Nestor Martin when it crashed
into a Meralco electric post. The car was wrecked and the pole severely damaged. Thus,
Meralco demanded reparation from Ernesto Martin, but the demand was rejected. It
thereupon sued him for damages, alleging inter alia that he was liable as the employer of Nestor
Martin. The petitioner's main defense was that Nestor Martin was not his employee.
The complaint for damages was filed by the private respondent against Ernesto Martin only as
alleged employer of Nestor Martin, the driver of the car at the time of the accident. Nestor
Martin was not impleaded. The action was based on tort under Article 2180 of the Civil Code.

The defendant moved to dismiss the complaint on the ground that no evidence had
been adduced to show that Nestor Martin was his employee. The motion was denied. The
RTC held in favor of the plaintiff. The CA affirmed it in toto.

Issue:

WON Ernesto is liable for the damage caused by Nestor.

Ruling:

NO. Whether or not engaged in any business or industry, the employer under Article
2180 is liable for the torts committed by his employees within the scope of their assigned task.
But it is necessary first to establish the employment relationship.

In the case at bar, no evidence whatsoever was adduced by the plaintiff to show that
the defendant was the employer of Nestor Martin at the time of the accident. The trial court
merely presumed the existence of the employer-employee relationship and held that the
petitioner had not refuted that presumption. It noted that although the defendant alleged that
he was not Nestor Martin's employer, "he did not present any proof to substantiate his
allegation.

The ownership of the car and the circumstances of the accident, are not enough bases
for the inference that the petitioner is the employer of Nestor Martin.

As the employment relationship between Ernesto Martin and Nestor Martin could not be
presumed, it was necessary for the plaintiff to establish it by evidence. Meralco had the burden 4
of proof, or the duty "to present evidence on the fact in issue necessary to establish his claim"
as required by Rule 131, Section 1 of the Revised Rules of Court. Failure to do this is fatal to its
action.

It was enough for the defendant to deny the alleged employment relationship, without
more, for he was not under obligation to prove this negative averment.

It is unnecessary to examine the question of the driver's alleged negligence or the lack
of diligence on the part of the petitioner in the selection and supervision of his employee.
These questions have not arisen because the employment relationship has not been
established.

HEIRS OF DIAZ-LEUS v MELVIDA

G.R. No. 77716-25; February 17, 1988

FACTS:

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Accused Melvida and Rosas, being then the persons in charge of Plymouth car and a
Victory Liner bus, respectively, did then and there wilfully, unlawfully and feloniously drive
and operate their respective motor vehicles in a negligent, careless and imprudent manner,
without due regard to traffic laws, rules and regulations and the weather conditions, and
without taking the necessary precaution to avoid injuries to persons and damage to property,
causing the said Plymouth car driven by the said accused Melvida to swerve to its left, cross the
island, and move onto the lane for the opposite traffic, and the said Victory Liner bus to hit
and bump the said Plymouth car, thereby inflicting on Diaz-Leus which directly caused her
death. The trial court found the accused Hernani Melvida guilty beyond reasonable doubt of
the offense charged (Reckless Imprudence resulting in Double Homicide, Serious and Slight
Physical Injuries and Damage to Property. For failure to establish the guilt of accused Rosas
beyond reasonable doubt, he is hereby acquitted of the offense charged. From said decision
the legal heirs appealed to the CA only with respect to the civil aspect.

ISSUE:

WON accused-appellee Rosas could still be held civilly liable despite his acquittal in
the criminal case.

RULING:

The findings of the Court of Appeals were a complete exoneration of Rosas. Since
petitioner's appeal on the civil aspect is predicated upon Rosas' alleged negligence which has been
found not to exist, this Court must likewise uphold the Court of Appeals' ruling that Rosas'
acquittal in the criminal case carries with it the extinction of his civil liability which bars herein
petitioners from recovering damages from Rosas. Since Rosas is absolved from any act of
negligence which in effect prevents further recovery of any damages, the same is likewise true
with respect to his employer victory Liner, Inc. which at most would have been only
subsidiarily liable.
Nor can the spouses Jesus Gali and Leonisa Gali as employers of respondent Hernani
Melvida be subsidiarily liable. Art. 103 of the Revised Penal Code provides,
The subsidiary liability established in the next preceding article shall also apply
to employers, teachers, persons and corporations engaged in any kind of
industry for felonies committed by their servants, pupils, workmen,
apprentices, or employees in the discharge of their duties.
In order that employers may be held liable under the above-quoted provision of law,
the following requisites must exist.
(1) That an employee has committed a mime in the discharge of his duties;
(2) that said employee is insolvent and has not satisfied his civil liability; and
(3) that the employer is engaged in some kind of industry. 6
The preceding requisites are not present in the case of the Gali spouses. They are not
engaged in any kind of industry. Industry has been defined as any department or branch of art,
occupation or business, especially, one which employs much labor and capital and is a distinct
branch of trade, as the sugar industry. 7
Thus, the Gali spouses cannot be held subsidiarily liable. As We stated in a previous case:
"Where the defendant is admittedly a private person who has no business or industry, and uses
his automobile for private purposes, he is not also subsidiarily liable to the plaintiff for the
damages to the latter's car caused by the reckless imprudence of his insolvent driver." 8

DUAVIT v COURT OF APPEALS

GR No. 82318; May 18, 1989

FACTS:

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The jeep being driven by defendant Sabiniano collided with another jeep, which had
then two passengers on it. As a result of the collision the passengers of the other jeep
suffered injury and the automobile itself had to be repaired because of the extensive damage.
A case was filed against Sabiniano as driver and against Duavit as owner of the jeep. Duavit
admitted ownership of the jeep but denied that Sabiniano was his employee. Sabiniano
himself admitted that he took Duavits jeep from the garage without consent or authority
of the owner. He testified further that Duavit even filed charges against him for theft of the
jeep, but which Duavit did not push through as the parents of Sabiniano apologized to
Duavit on his behalf. Trial Court found Sabiniano negligent in driving the vehicle but
absolved Duavit on the ground that there was no employer-employee relationship between
them, and that former took the vehicle without consent or authority of the latter. CA held
the two of them jointly and severally liable.

ISSUE:

WON the owner of a private vehicle which figured in an accident can be held liable
under Article 2180 of the CC when the said vehicle was neither driven by an employee of the
owner nor taken with the consent of the latter.

HELD:

NO.
In Duquillo v Bayot (1939), SC ruled that an owner of a vehicle cannot be held liable
for an accident involving a vehicle if the same was driven without his consent or knowledge
and by a person not employed by him. This ruling is still relevant and applicable, and hence,
must be upheld.
CAs reliance on the cases of Erezo v Jepte and Vargas v Langcay is misplaced and
cannot be sustained. In Erezo v Jepte case, defendant Jepte was held liable for the death of
Erezo even if he was not really the owner of the truck that killed the latter because
he represented himself as its owner to the Motor Vehicles Office and had it registered under
his name; he was thus estopped from later on denying such representation. In Vargas,
Vargas sold her jeepney to a third person, but she did not surrender to the Motor Vehicles
Office the corresponding AC plates. So when the jeepney later on figured in an accident, she
was held liable by the court holding that the operator of record continues to be the operator
of vehicle incontemplation of law, as regards the public and third persons.
The circumstances of the above cases are entirely different from those in the present
case. Herein petitioner does not deny ownership of vehicle but denies having employed or
authorized the driver Sabiniano. The jeep was virtually stolen from the petitioners garage.
Decision and resolution annulled and set aside.

BANAL v JUDGE TADEO and CLAUDIO

G.R. No. 78911-25; December 11, 1987

FACTS:

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Fifteen separate informations for violation of BP 22 were filed against respondent

Claudio before the RTC of Quezon City. On January 1987, the respondent court issued an
order rejecting the appearance of Atty. Nicolito L. Bustos as private prosecutor on the ground
that the charge is for the violation of BP 22 which does not provide for any civil liability or
indemnity and hence, "it is not a crime against property but public order." The petitioner,
through counsel filed a motion for reconsideration of the order. Respondent Claudio filed her
opposition to the motion. In an order, the respondent court denied petitioner's MR. Hence,
this petition questioning the orders of the respondent Court.

ISSUE:

WON the respondent Court acted with grave abuse of discretion or in excess of its
jurisdiction in rejecting the appearance of a private prosecutor.

RULING:

Article 20 of the New Civil Code provides:

Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
Regardless, therefore, of whether or not a special law so provides, indemnification of the
offended party may be had on account of the damage, loss or injury directly suffered as a
consequence of the wrongful act of another. The indemnity which a person is sentenced to pay
forms an integral part of the penalty imposed by law for the commission of a crime (Quemel v.
Court of Appeals citing Bagtas v. Director of Prison). Every crime gives rise to a penal or
criminal action for the punishment of the guilty party, and also to civil action for the restitution
of the thing, repair of the damage, and indemnification for the losses. (United States v.
Bernardo). Indeed one cannot disregard the private party in the case at bar who suffered the
offenses committed against her. Not only the State but the petitioner too is entitled to relief as
a member of the public which the law seeks to protect. She was assured that the checks were
good when she parted with money, property or services. She suffered with the State when the
checks bounced.
Civil liability to the offended private party cannot thus be denied, The payee of the
check is entitled to receive the payment of money for which the worthless check was issued.
Having been caused the damage, she is entitled to recompense.
The petitioner's intervention in the prosecution of Criminal Cases 40909 to 40913 is
justified not only for the protection of her interests but also in the interest of the speedy and
inexpensive administration of justice mandated by the Constitution (Section 16, Article III, Bill
of Rights, Constitution of 1987).
WHEREFORE the petition is hereby GRANTED. The respondent court is ordered
to permit the intervention of a private prosecutor in behalf of petitioner Charmina B. Banal, in
the prosecution of the civil aspect of the criminal cases.

SPOUSES FRANCISCO M. HERNANDEZ and ANICETA

ABEL-HERNANDEZ and JUAN GONZALES, petitioners, vs.
SPOUSES LORENZO DOLOR and MARGARITA DOLOR, FRED
PANOPIO, JOSEPH SANDOVAL, RENE CASTILLO, SPOUSES

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FRANCISCO VALMOCINA and VIRGINIA VALMOCINA,

SPOUSES VICTOR PANOPIO and MARTINA PANOPIO, and
HON. COURT OF APPEALS, respondents.
[G.R. No. 160286 July 30, 2004.]

Facts:

At about 3:00 p.m. of December 19, 1986, Lorenzo Menard "Boyet" Dolor, Jr. was
driving an owner-type jeepney with plate no. DEB 804 owned by her mother, Margarita,
towards Anilao, Batangas. As he was traversing the road at Barangay Anilao East, Mabini,
Batangas, his vehicle collided with a passenger jeepney bearing plate no. DEG 648, driven by
petitioner Juan Gonzales and owned by his co-petitioner Francisco Hernandez, which was
travelling towards Batangas City. Boyet Dolor and his passenger, Oscar Valmocina, died as a
result of the collision. Fred Panopio, Rene Castillo and Joseph Sandoval, who were also on
board the owner-type jeep, which was totally wrecked, suffered physical injuries. The collision
also damaged the passenger jeepney of Francisco Hernandez and caused physical injuries to its
passengers.

Consequently, respondents commenced an action for damages against petitioners

before the Regional Trial Court of Batangas City, alleging that driver Juan Gonzales was guilty
of negligence and lack of care and that the Hernandez spouses were guilty of negligence in the
selection and supervision of their employees.

Petitioners countered that the proximate cause of the death and injuries sustained by
the passengers of both vehicles was the recklessness of Boyet Dolor, the driver of the
owner-type jeepney, who was driving in a zigzagging manner under the influence of alcohol.
Petitioners also alleged that Gonzales was not the driver-employee of the Hernandez spouses
as the former only leased the passenger jeepney on a daily basis. The Hernandez spouses
further claimed that even if an employer-employee relationship is found to exist between
them, they cannot be held liable because as employers they exercised due care in the selection
and supervision of their employee.

During the trial of the case, it was established that the drivers of the two vehicles were
duly licensed to drive and that the road where the collision occurred was asphalted and in fairly
good condition. The owner-type jeep was travelling uphill while the passenger jeepney was
going downhill. It was further established that the owner-type jeep was moderately moving
and had just passed a road bend when its passengers, private respondents Joseph Sandoval and
Rene Castillo, saw the passenger jeepney at a distance of three meters away. The passenger
jeepney was traveling fast when it bumped the owner type jeep. Moreover, the evidence
presented by respondents before the trial court showed that petitioner Juan Gonzales obtained
his professional driver's license only on September 24, 1986, or three months before the
accident. Prior to this, he was holder of a student driver's permit issued on April 10, 1986.

Issue:

WON the Court of Appeals was correct when it pronounced the Hernandez spouses as
solidarily liable with Juan Gonzales, although it is of record that they were not in the
passenger jeepney driven by latter when the accident occurred

Ruling:

Yes. Court held that an employer-employee relationship exists between the Hernandez
spouses and Julian Gonzales hence making them solidarily liable. The court was not persuaded
when the Hernandez spouses argued that since they were not inside the jeepney at the time of
the collision, the provisions of Article 2180 of the Civil Code, which does not provide for
solidary liability between employers and employees, should be applied.

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ERNESTO SYKI, petitioner, vs. SALVADOR BEGASA, respondent.

[G.R. No. 149149. October 23, 2003]

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3

Facts: Respondent Salvador Begasa and his three companions flagged down a passenger
jeepney driven by Joaquin Espina and owned by Aurora Pisuena. While respondent was
boarding the passenger jeepney (his right foot already inside while his left foot still on the
boarding step of the passenger jeepney), a truck driven by Elizalde Sablayan and owned by
petitioner Ernesto Syki bumped the rear end of the passenger jeepney. Respondent fell and
fractured his left thigh bone. Respondent filed a complaint for damages for breach of
common carriers contractual obligations and quasi-delict against Aurora Pisuena, the owner
of the passenger jeepney;, herein petitioner Ernesto Syki, theowner of the truck;, and
Elizalde Sablayan, the driver of the truck. After hearing, the trial court dismissed the
complaint against Aurora Pisuena, the owner and operator of the passenger jeepney, but
ordered petitioner Ernesto Syki and his truck driver, Elizalde Sablayan, to pay respondent
Salvador Begasa, jointly and severally

Issue: 1. Whether or not petitioner is liable for the act of his employee.

2. Whether he exercised the diligence of a good father of a family.

Held: In the present case, was respondent partly negligent and thus, should not recover the
full amount of the damages awarded by the trial court? We rule in the negative. In sum, the
sole and proximate cause of the accident was the negligence of petitioners driver who, as
found by the lower courts, did not slow down even when he was already approaching a busy
intersection within the city proper. The passenger jeepney had long stopped to pick up
respondent and his three companions and, in fact, respondent was already partly inside the
jeepney, when petitioners driver bumped the rear end ofrear-ended it. The impact was so
strong such that respondent fell and fractured his left thigh bone (femur), and suffered
severely woundeds in his left knee and leg. No doubt that respondentpetitioners driver was
reckless speeding.

Since the negligence of petitioners driver was the sole and proximate cause of the accident,
in the present case, petitioner is liable, under Article 2180 of the Civil Code, to pay damages
to respondent Begasa for the injuries sustained by latterhim. Petition denied.

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SCHMITZ TRANSPORT & BROKERAGE CORPORATION vs. TRANSPORT

VENTURE, INC., INDUSTRIAL INSURANCE COMPANY, LTD., and BLACK
SEA SHIPPING AND DODWELL now INCHCAPE SHIPPING SERVICES
[G.R. No. 150255. April 22, 2005]

Facts: On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of
Ilyichevsk, Russia on board M/V Alexander Saveliev 545 hot rolled steel sheets in coil
weighing 6,992,450 metric tons. The cargoes, which were to be discharged at the port of
Manila in favor of the consignee, Little Giant Steel Pipe Corporation (Little Giant), were
insured against all risks with Industrial Insurance Company Ltd. (Industrial Insurance) under
Marine Policy No. M-91-3747-TIS. The vessel arrived at the port of Manila and the
Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at the
Manila South Harbor.

Schmitz Transport, whose services the consignee engaged to secure the requisite clearances, to
receive the cargoes from the shipside, and to deliver them to its (the consignees) warehouse at
Cainta, Rizal, in turn engaged the services of TVI to send a barge and tugboat at shipside.
TVIs tugboat Lailani towed the barge Erika V to shipside. The tugboat, after
positioning the barge alongside the vessel, left and returned to the port terminal. Arrastre
operator Ocean Terminal Services Inc. commenced to unload 37 of the 545 coils from the
vessel unto the barge. By 12:30 a.m. of October 27, 1991 during which the weather condition
had become inclement due to an approaching storm, the unloading unto the barge of the 37
coils was accomplished. No tugboat pulled the barge back to the pier, however. At around
5:30 a.m. of October 27, 1991, due to strong waves, the crew of the barge abandoned it and
transferred to the vessel. The barge pitched and rolled with the waves and eventually capsized,
washing the 37 coils into the sea.

Little Giant thus filed a formal claim against Industrial Insurance which paid it the amount of
P5,246,113.11. Little Giant thereupon executed a subrogation receipt in favor of Industrial
Insurance. Industrial Insurance later filed a complaint against Schmitz Transport, TVI, and
Black Sea through its representative Inchcape (the defendants) before the RTC of Manila, they
faulted the defendants for undertaking the unloading of the cargoes while typhoon signal No.
1 was raised. The RTC held all the defendants negligent. Defendants Schmitz Transport and
TVI filed a joint motion for reconsideration assailing the finding that they are common
carriers. RTC denied the motion for reconsideration. CA affirmed the RTC decision in
toto, finding that all the defendants were common carriers Black Sea and TVI for engaging
in the transport of goods and cargoes over the seas as a regular business and not as an isolated
transaction, and Schmitz Transport for entering into a contract with Little Giant to transport
the cargoes from ship to port for a fee.
Issue: If there was negligence, whether liability for the loss may attach to Black Sea, petitioner
and TVI.
Held: This Court holds then that petitioner and TVI are solidarily liable for the loss of the
cargoes. The following pronouncement of the Supreme Court is instructive:

In the discharge of its commitment to ensure the safety of passengers, a carrier may choose to
hire its own employees or avail itself of the services of an outsider or an independent firm to
undertake the task. In either case, the common carrier is not relieved of its responsibilities
under the contract of carriage.

The liability of the common carrier and an independent contractor would be solidary
(Art. 2194). A liability for tort may arise even under a contract, where tort is that which
breaches the contract. Stated differently, when an act which constitutes a breach of contract
would have itself constituted the source of a quasi-delictual liability had no contract existed
between the parties, the contract can be said to have been breached by tort, thereby allowing
the rules on tort to apply.

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As for Black Sea, its duty as a common carrier extended only from the time the goods
were surrendered or unconditionally placed in its possession and received for transportation
until they were delivered actually or constructively to consignee Little Giant.

SAMSUNG CONSTRUCTION COMPANY PHILIPPINES, INC., Petitioner, vs.

FAR EAST BANK AND TRUST COMPANY AND COURT OF APPEALS,
Respondents.

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2004-08-13 | G.R. No. 129015

Facts:

Samsung Construction maintained a current account with defendant Far East Bank and
Trust Company(FEBTC). The sole signatory to Samsung Construction's account was Jong
Kyu Lee , its Project Manager, while the checks remained in the custody of the company's
accountant, Kyu Yong Lee.

A certain Roberto Gonzaga presented to FEBTC a check payable to cash and drawn
against Samsung current account amounting to P999,500.00. The bank teller Cleofe Justiani
checked the balance and ascertained that there were enough funds to cover the check. After
ascertaining the authenticity of the signature of Jong she then asked Gonzaga to submit
proof of his identity and the latter presented 3 ID cards.

It was bank policy that two bank branch officers approve checks exceeding P100,000.00
thus it was checked by Senior Assistant Cashier Gemma Velez and Shirley Syfu.
Syfu then noticed that Jose Sempio III, the assistant accountant of Samsung Construction,
was also in the bank. Sempio was well-known to Syfu and the other bank officers, he being
the assistant accountant of Samsung Construction. Syfu showed the check to Sempio, who
vouched that Jongs signature is genuine. Sempio said that the check was for the purchase of
equipment for Samsung Construction. Satisfied, Syfu authorized the bank's encashment of
the check to Gonzaga.

The next day, Kyu, Samsungs Accountant examined the balance of the bank account
and discovered that an amount of P999,500.00 had been encashed. Kyu perused the
checkbook and found out that the last page was missing. Kyu reported to Jong who
proceeded to the bank and found out that his signature was forged. He then filed a criminal
case against Sempio for qualified theft.

Samsung demanded that FEBTC credit said amount, it responded that it was still
conducting an investigation. During trial, both sides presented their respected expert witness
to testify that Jongs signature was forged. Samsung presented Senior NBI Roda B. Flores
and testified that it was forged, FEBTC presented PNP Crime Lab document examiner
Rosario Perez and showed that it was genuine.

The RTC held that Jongs signature was forged and directed FEBTC to pay back
Samsung said amount. On appeal, CA revered and absolved FEBTC of liability, concluding
there was no forgery and Samsung negligent.

Issue:

Whether or not FEBTC is negligent in ascertaining the genuineness of Jongs signature

in the check.

Ruling:

The court ruled that FEBTC is negligent. Even assuming that FEBTC had a standing
habit of dealing with Sempio, acting in behalf of Samsung Construction, the irregular
circumstances attending the presentment of the forged check should have put the bank on
the highest degree of alert. The Court emphasized the highest degree of care and diligence is
required of banks.

Banks are engaged in a business impressed with public interest, and it is their duty to
protect in return their many clients and depositors who transact business with them. They
have the obligation to treat their client's account meticulously and with the highest degree of
care, considering the fiduciary nature of their relationship. The diligence required of banks,
therefore, is more than that of a good father of a family.

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Given the circumstances, extraordinary diligence dictates that FEBTC should have
ascertained from Jong personally that the signature in the questionable check was his.

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and

MARIA CRISTINA SANTOS, petitioners, vs. COURT OF APPEALS, HEIRS OF

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PACIFICO C. MABASA and REGIONAL TRIAL COURT OF PASIG, METRO

MANILA, BRANCH 181, respondents.
1996-02-09 | G.R. No. 116100

Facts:

Original plaintiff Pacifico Mabasa died during the pendency of this case and was
substituted by Ofelia Mabasa, his surviving spouse [and children].

The plaintiff owns a parcel of land with a two-door apartment erected thereon situated
at Interior P. Burgos St., Palingon, Tipas, Tagig, Metro Manila. Said property may be
described to be surrounded by other immovables pertaining to defendants herein. Taking P.
Burgos Street as the point of reference, on the left side, going to plaintiff's property, the row
of houses will be as follows: That of defendants Custodio, then that of Lito and Maria
Cristina Santos and then that of Ofelia Mabasa. On the right side (is) that of defendant
Rosalina Morato and then a Septic Tank. As an access to P. Burgos Street from plaintiff's
property, there are two possible passageways. The first passageway is approximately one
meter wide and is about 20 meters distant from Mabasa's residence to P. Burgos Street. Such
path is passing in between the previously mentioned row of houses. The second passageway
is about 3 meters in width and length from plaintiff Mabasa's residence to P. Burgos Street; it
is about 26 meters. In passing thru said passageway, a less than a meter wide path through
the septic tank and with 5-6 meters in length, has to be traversed.

Defendant Santoses constructed an adobe fence along their property which is also along
the first passageway making it narrower. Defendant Morato constructed her adobe fence and
even extended said fence in such a way that the entire passageway was enclosed. Tenants of
said apartment vacated the area. Defendant Ma. Cristina Santos testified that she constructed
said fence because there was an incident when her daughter was dragged by a bicycle
pedalled by a son of one of the tenants in said apartment along the first passageway. She also
mentioned some other inconveniences of having at the front of her house a pathway such as
when some of the tenants were drunk and would bang their doors and windows. Some of
their footwear were even lost.

The trial court ordered the defendants to give plaintiff permanent egress and ingress to
the public street and ordered plaintiff to pay defendants P8,000.00 as indemnity for the
permanent uses of the streets.

Not satisfied, plaintiffs heirs, herein respondents, appealed and raised that the trial
court erred in not awarding damages in their favor. The CA affirmed the decision with
modifications ordering defendants-appellees to pay plaintiffs-appellants the sum of Sixty
Five Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000) Pesos as
Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary Damages. The rest of the
appealed decision is affirmed to all respects

Issue:

Whether or not the award of damages by the CA is in order.

Ruling:

The CA erred in awarding damages in favor of private respondents. The award of

damages has no substantial legal basis. The CAs award of damages was based solely on the
fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized
rentals.

Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which
results from the injury; and damages are the recompense or compensation awarded for the
damage suffered. Thus, there can be damage without injury in those instances in which the

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loss or harm was not the result of a violation of a legal duty. These situations are often called
damnum absque injuria.

In the case at bar, although there was damage, there was no legal injury. Contrary to
the claim of private respondents, petitioners could not be said to have violated the principle
of abuse of right. In order that the principle of abuse of right provided in Article 21 of the
Civil Code can be applied, it is essential that the following requisites concur: (1) The
defendant should have acted in a manner that is contrary to morals, good customs or public
policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff.

The act of petitioners in constructing a fence within their lot is a valid exercise of
their right as owners, hence not contrary to morals, good customs or public policy. The law
recognizes in the owner the right to enjoy and dispose of a thing, without other limitations
than those established by law. It is within the right of petitioners, as owners, to enclose and
fence their property

MARITER MENDOZA, Petitioner, vs. ADRIANO CASUMPANG, JENNIFER

ADRIANE and JOHN ANDRE, all surnamed CASUMPANG, Respondents.
2012-03-19 | G.R. No. 197987

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Facts:

Josephine Casumpang underwent hysterectomy and myomectomy that Dr. Mendoza

performed on her at the Iloilo Doctors Hospital. After her operation, Josephine experienced
recurring fever, nausea, and vomiting. Three months after the operation, she noticed while
taking a bath something protruding from her genital. She tried calling Dr. Mendoza to report
it but the latter was unavailable. Josephine instead went to see another physician, Dr. Edna
Jamandre-Gumban, who extracted a foul smelling, partially expelled rolled gauze from her
cervix.

This prompted Josephine to file a damage suit against Dr. Mendoza before the RTC
of Iloilo. She died before the trial could end thus her husband Adriano and their children
Jennifer Adriane and John Andre, substituted her in the case. She was a housewife and 40
years old when she died.

The RTC found Dr. Mendoza guilty of neglect that caused Josephines illness and
eventual death and order to pay the plaintiffs heirs actual damage of P50,000.00, moral
damages of P200,000.00, and attorneys fees P20,000.00 plus cost of suit.

The RTC reversed itself upon motion for reconsideration and dismissed the complaint.
The CA reinstated the RTCs original decision and held that Dr. Mendoza committed a
breach of her duty as a physician when a gauze remained in the body of her patient after
surgery. The CA denied her motion for reconsideration.

Issue:

Whether or not Dr. Mendoza is negligent and committed breach of her duty as a
physician.

Ruling:

The court ruled that she is negligent. Dr. Mendoza claims that no gauze or surgical
material was left in Josephines body as evidenced by the surgical sponge count in the
hospital record. The court pointed out that Josephine did not undergo any other surgical
operation and it is unlikely for her to inject a roll of gauze into her cervix. The court held in
Professional Services, Inc. vs. Agana:

An operation requiring the placing of sponges in the incision is not complete until the
sponges are properly removed, and it is settled that the leaving of sponges or other foreign
substances in the wound after the incision has been closed is at least prima facie negligence
by the operating surgeon. To put it simply, such act is considered so inconsistent with due
care as to raise an inference of negligence. There are even legions of authorities to the effect
that such act is negligence per se.

A surgical operation is the responsibility of the surgeon performing it. He must

personally ascertain that the counts of instruments and materials used before the surgery and
prior to sewing the patient up have been correctly done.

To provide an example to the medical profession and to stress the need for constant
vigilance in attending to a patients health, the award of exemplary damages in this case is in
order. In view of Josephines death resulting from petitioners negligence, civil indemnity
under Article 2206 of the Civil Code should be given to respondents as heirs. The amount of
P50,000.00 is fixed by prevailing jurisprudence for this kind.

The Court also deems it just and equitable under Article 2208 of the Civil Code to
increase the award of attorneys fees from P20,000.00 to P50,000.00.

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ACHEVARA VS. RAMOS

G.R. No. 175172, September 29, 2009

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FACTS:

In their Complaint, respondents alleged that Benigno Valdez was driving a passenger
jeep heading north on the national highway in a reckless, careless, and negligent manner. He
tried to overtake a motorcycle, causing the passenger jeep to encroach on the opposite lane
and bump the oncoming vehicle driven by Arnulfo Ramos. The injuries sustained by Arnulfo
Ramos caused his death, notwithstanding prompt medical assistance. Respondents alleged that
Crescencia Achevara failed to exercise due diligence in the selection and supervision of
Benigno Valdez as driver of the passenger jeep. Respondents sought to recover actual damages
for medical expenses and funeral expenses, as well as moral and exemplary damages, lost
earnings, attorney's fees and litigation expenses. Alfredo Achevara was impleaded as the
husband of the operator and as the administrator of the conjugal partnership properties of the
Spouses Achevara. In their Answer, petitioners denied respondents allegation that Benigno
Valdez overtook a motorcycle and bumped the vehicle driven by Arnulfo Ramos. They alleged
that Benigno Valdez was driving southward at a moderate speed when he saw an owner-type
jeep coming from the south and heading north, running in a zigzag manner, and encroaching
on the west lane of the road. To avoid a collision, Valdez drove the passenger jeep towards the
shoulder of the road, west of his lane, but the owner-type jeep continued to move toward the
western lane and bumped the left side of the passenger jeep. Petitioners alleged that it was
Arnulfo Ramos who was careless and negligent in driving a motor vehicle, which he very well
knew had a mechanical defect. Hence, respondents had no cause of action against petitioners.
The RTC ruled in favor of the petitioners applying the doctrine of last clear chance which was
then affirmed by the CA with modifications.
.
ISSUE:

Whether or not petitioners are liable to respondents for damages incurred as a result of
the vehicular accident.

RULING:

No. Foreseeability is the fundamental test of negligence. To be negligent, a defendant

must have acted or failed to act in such a way that an ordinary reasonable man would have
realized that certain interests of certain persons were unreasonably subjected to a general but
definite class of risks. The acts of negligence of Arnulfo Ramos and Benigno Valdez were
contemporaneous when Ramos continued to drive a wiggling vehicle on the highway despite
knowledge of its mechanical defect, while Valdez did not immediately veer to the rightmost
side of the road upon seeing the wiggling vehicle of Ramos perhaps because it still kept to its
lane and Valdez did not know the extent of its mechanical defect. However, when the
owner-type jeep encroached on the lane of the passenger jeep, Valdez realized the peril at hand
and steered the passenger jeep toward the western shoulder of the road to avoid a collision. It
was at this point that it was perceivable that Ramos must have lost control of his vehicle, and
that it was Valdez who had the last opportunity to avoid the collision by swerving the
passenger jeep towards the right shoulder of the road. The doctrine of last clear chance applies
to a situation where the plaintiff was guilty of prior or antecedent negligence, but the defendant
who had the last fair chance to avoid the impending harm and failed to do so is made liable
for all the consequences of the accident, notwithstanding the prior negligence of the plaintiff.
However, the doctrine does not apply where the party charged is required to act
instantaneously, and the injury cannot be avoided by the application of all means at hand after
the peril is or should have been discovered. The doctrine of last clear chance does not apply to
this case, because even if it can be said that it was Benigno Valdez who had the last chance to
avoid the mishap when the owner-type jeep encroached on the western lane of the passenger
jeep, Valdez no longer had the opportunity to avoid the collision. In this case, both Arnulfo
Ramos and Benigno Valdez failed to exercise reasonable care and caution that an ordinarily
prudent man would have taken to prevent the vehicular accident.

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FLORES VS. PINEDA,

G.R. No. 158996, November 14, 2008

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FACTS:

Teresita Pineda consulted her town mate Dr. Fredelicto Flores regarding her medical
condition, complaining about general body weakness, loss of appetite, frequent urination and
thirst, and on-and-off vaginal bleeding. After interviewing Teresita, Dr. Fredelicto advised her
to go to United Doctors Medical Center (UDMC) in Quezon City for a general check-up the
following week but the former did not. As for her other symptoms, he suspected that Teresita
might be suffering from diabetes and told her to continue her medications. When her
conditions persisted, she went to UDMC where Dr. Fredelictor check-up her and ordered her
admission and further indicate on call Dilation and Curettage (D&C) operation to be
performed by his wife, Dra. Felicisima Flores, an Ob-Gyne. Laboratory tests were done on
Teresita including internal vaginal examination, however, only the blood sugar and CBC
results came out prior to operation which indicated of diabetes. D&C operations were still
done and thereafter, Dra. Felicisima advised her that she can go home and continue to rest at
home but Teresita opted otherwise. Two days after the operation, her condition worsened
prompting further test to be done which resulted that Teresita have diabetes melitus type II.
Insulin was administered but it might have arrived late, she died.

ISSUE:

Whether or not spouses petitioners are liable for medical negligence.

RULING:

Yes. A medical negligence case is a type of claim to redress a wrong committed by a

medical professional, that caused a bodily harm to or the death of a patient. There are four
elements involved in a medical negligence case, namely: duty, breach, injury, and proximate
cause. Duty refers to the standard of behavior which imposes restrictions on ones conduct.
The standard in turn refers to the amount of competence associated with the proper discharge
of the profession. A physician is expected to use at least the same level of case that any other
reasonably competent doctor would use under the same circumstances. Breach of duty occurs
when the physician fails to comply with those professional standards. If injury results to the
patient as a result of this breach, the physician is answerable for negligence.
If a patient suffers from some disability that increases the magnitude of risk to him, that
disability must be taken into account as long as it is or should have been known to the
physician. Stress, whether physical or emotional, is a factor that can aggravate diabetes; a D&C
operation is a form of physical stress. Dr. Mendoza explained how surgical stress can aggravate
the patients hyperglycemia: when stress occurs, the diabetics body, especially the autonomic
system, reacts by secreting hormones which are counter-regulatory; she can have prolonged
hyperglycemia which, if unchecked, could lead to death. Medical lecture further explains that if
the blood sugar has become very high, the patient becomes comatose (diabetic coma). When
this happens over several days, the body uses its own fats to produce energy, and the result is
high level of waste products in the blood and urine. These findings lead us to the conclusion
that the decision to proceed with the D&C operation notwithstanding Teresitas
hyperglycemia and without adequately preparing her for the procedure, was contrary to the
standards observed by the medical profession. Deviation from this standard amounted to a
breach of duty which resulted in the patients death. Due to this negligent conduct, liability
must attach to the petitioner spouses.

BANK OF AMERICA VS. PHILIPPINE RACING CLUB

G.R. No. 150228, July 30, 2009

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FACTS:

Defendant PRC is a domestic corporation which maintains a current account with

petitioner Bank of America. Its authorized signatories are the company President and
Vice-President. By virtue of a travel abroad for these officers, they pre-signed checks to
accommodate any expenses that may come up while they were abroad for a business trip.
The said pre-signed checks were left for safekeeping by PRCs accounting officer.
Unfortunately, the two (2) of said checks came into the hands of one of its employees who
managed to encash it with petitioner bank. The said check was filled in with the use of a
check-writer, wherein in the blank for the 'Payee', the amount in words was written, with the
word 'Cash' written above it. Clearly there was an irregularity with the filling up of the blank
checks as both showed similar infirmities and irregularities and yet, the petitioner bank did
not try to verify with the corporation and proceeded to encash the checks. PRC filed an
action for damages against the bank. The lower court awarded actual and exemplary
damages. On appeal, the CA affirmed the lower court's decision and held that the bank was
negligent. Hence this appeal. Petitioner contends that it was merely doing its obligation
under the law and contract in encashing the checks, since the signatures in the checks are
genuine.

ISSUE:

Whether or not the petitioner can be held liable for negligence and thus should pay damages
to PRC.

RULING:

Both parties are held to be at fault but the bank has the last clear chance to prevent
the fraudulent encashment hence it is the one foremost liable. There was no dispute that the
signatures in the checks are genuine but the presence of irregularities on the face of the
check should have alerted the bank to exercise caution before encashing them. It is
well-settled that banks are in the business impressed with public interest that they are duty
bound to protect their clients and their deposits at all times. They must treat the accounts
of these clients with meticulousness and a highest degree of care considering the fiduciary
nature of their relationship. The diligence required of banks are more than that of a good
father of a family.

In the case at bar, petitioner cannot evade responsibility for the loss by attributing negligence
on the part of respondent because, even if we concur that the latter was indeed negligent in
pre-signing blank checks, the former had the last clear chance to avoid the loss. To reiterate,
petitioners own operations manager admitted that they could have called up the client for
verification or confirmation before honoring the dubious checks. Verily, petitioner had the
final opportunity to avert the injury that befell the respondent. Failing to make the necessary
verification due to the volume of banking transactions on that particular day is a flimsy and
unacceptable excuse, considering that the banking business is so impressed with public
interest where the trust and confidence of the public in general is of paramount importance
such that the appropriate standard of diligence must be a high degree of diligence, if not the
utmost diligence. Petitioners negligence has been undoubtedly established and, thus,
pursuant to Art. 1170 of the NCC, it must suffer the consequence of said negligence.

CORINTHIAN GARDENS ASSOCIATION, INC V. TANJANGCO

G.R. No 160795, 27 June 2008

Facts:

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

Before the Cuasos constructed their house, it was surveyed by De Dios Realty the
surveyor as per recommendation of the petitioner association. Later on, Corinthian Gardens
Association approved the plans made by the builder CB Paras Construction.

Corinthian conducted periodic ocular inspections in order to determine compliance

with the approved plans pursuant to the Manual of Rules and Regulations of Corinthian
(MRRC). Unfortunately, after construction, the perimeter fence of the Cuasos encroached
upon Tanjancos lot.

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

Issue:

Whether Corinthian was negligent under the circumstances and, if so, other such
negligence contributed to the injury suffered by the Tanjangcos.

Held:

Corinthian is negligent. Its approval of the plan is tainted with negligence.

Petitioner is found negligent. The MRRC provides that no new constructions can be started
without the approval of the petitioner association. Thus, it is reasonable to assume that
Corinthian, through its representative, in the approval of building plans, and in the conduct
of periodic inspections of on-going construction projects within the subdivision, is
responsible in insuring compliance with the approved plans, inclusive of the construction of
perimeter walls.

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

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LIGHT RAIL TRANSIT V. NAVIDAD

G.R. No. 145804. February 6, 2003

Facts:

Navidad was drunk when he entered the boarding platform of the LRT. He got into
an altercation with the SG Escartin. They had a fistfight and Navidad fell onto the tracks and
was killed when a train came and ran over him.

The Heirs of Navidad filed a complaint for damages against Escartin, the train driver
who is Rodolfo Roman, the LRTA, the Metro Transit Organization and Prudent Security
Agency (Prudent). The trial court found Prudent and Escartin jointly and severally liable for
damages to the heirs. The CA exonerated Prudent and instead held the LRTA and the train
driver Romero jointly and severally liable as well as removing the award for compensatory
damages and replacing it with nominal damages.

The reasoning of the CA was that a contract of carriage already existed between
Navidad and LRTA by virtue of his having purchased train tickets and the liability was
caused by the mere fact of Navidad's death after being hit by the train being managed by the
LRTA and operated by Roman. The CA also blamed LRTA for not having presented expert
evidence showing that the emergency brakes could not have stopped the train on time.

Issues:

(1) Whether or not LRTA and/or Roman is liable for the death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with compensatory damages.

Held:

(1) Yes. The foundation of LRTA's liability is the contract of carriage and its obligation to
indemnify the victim arising from the breach of that contract by reason of its failure to
exercise the high diligence required of a common carrier.
(2) Fault was not established. Liability will be based on Tort under Art. 2176 of the New
Civil Code.
(3) No. It is an established rule that nominal damages cannot co-exist with compensatory
damages.

A common carrier is required by these above statutory provisions to use utmost

diligence in carrying passengers with due regard for all circumstances. This obligation exists
not only during the course of the trip but for so long as the passengers are within its
premises where they ought to be in pursuance to then contract of carriage.

Art. 1763 of the Civil Code, renders a common carrier liable for death of or injury to
passengers (a) through the negligence or willful acts of its employees or (b) on account of
willful acts or negligence of other passengers or of strangers if the common carriers
employees through the exercise of due diligence could have prevented or stopped the act or
omission.

If Prudent is to be held liable, it would be for a tort under Art. 2176 in conjunction
with Art. 2180. Once the fault of the employee Escartin is established, the employer,
Prudent, would be held liable on the presumption that it did not exercise the diligence of a
good father of the family in the selection and supervision of its employees.

The award of nominal damages in addition to actual damages is untenable. Nominal

damages are adjudicated in order that a right of the plaintiff, which has been violated or

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invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. It is an established rule that nominal
damages cannot co-exist with compensatory damages. The award was deleted.

OSCAR DEL CARMEN JR. V GERONIMO BACOY

GR No. 17738770 April 25, 2012

Facts:
Spouses Monsalud and their daughter died from being run over by a jeepney driven
by a certain Allan Maglasang. The jeepney was owned by Oscar del Carmen Jr. Allan was
declared guilty beyond reasonable doubt in a criminal case while the father of the late Mrs.
Monsalud, Geronimo Bacoy, filed an independent civil action againt the former in behalf of
the minor children left by the Monsalud spouses.

Del Carmen Jr. claimed he was a victim as well as Allan stole the jeep and was not
hired as a driver by the former; he was a conductor and had been released from employment
lately and it was the brother of Allan, Rodrigo who was hired as a driver. Del Carmen Jr.
filed a carnapping case against Allan but was dismissed by the court for insufficient evidence.

RTC held Del Carmen Jr. subsidiary liable and held the doctrine of res ipsa loquitur.
The CA adjudged Oscar Jr. liable to the heirs of the victims based on the principle that the
registered owner of a vehicle is directly and primarily responsible for the injuries or death of
third parties caused by the operation of such vehicle. It disbelieved Oscar Jr.s defense that
the jeep was stolen not only because the carnapping case filed against Allan and his
companions was dismissed but also because, given the circumstances, Oscar Jr. is deemed to
have given Allan the implied permission to use the subject vehicle because the brothers were
assigned to said jeep. After a days work, the jeepney would be parked beside the brothers
house and not returned to Del Carmens residence; the jeep could easily be started even
without the use of an ignition key; the said parking area was not fenced or secured to
prevent the unauthorized use of the vehicle which can be started even without the ignition
key

Issue:

W/N owner of vehicle is directly and primarily liable for injuries caused by the
operation of such

Held:

Del Carmen Jr. was held to be primarily liable and not merely subsidiary liable.
Del Carmen Jr.s own evidence cast doubt that Allan stole the jeepney. Given the dismissal
of the carnapping case filed by del Carmen Jr. against Allan, the former also admitted to such
dismissal in the SC. Under the doctrine of res ipsa loquitur , where the thing that caused
the injury complained of is shown to be under the management of the defendant or his
servants; and the accident, in the ordinary course of things, would not happen if those who
had management or control used proper care, it affords reasonable evidence in the
absence of a sufficient, reasonable and logical explanation by defendant that the
accident arose from or was caused by the defendants want of care. All three are present in
the case at bar.

SPS. Alfredo Bontilao and Sherlina Bontilao Vs. Dr. Carlos Gerona
GR No. 176675 September 15, 2010
Facts:

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On December 28, 1991, respondent Dr. Carlos Gerona, an orthopedic surgeon at the
Vicente Gullas Memorial Hospital, treated petitioners son, 8 y/o Allen Roy Bontilao, for a
fractured right wrist. Respondent administered a U-spint and immobilized Allens wrist with
a cast, then sent Allen home. On June 4, 1992, Alen re-fractured the same wrist and was
brought back to the hospital. The x-ray examination showed a complete fractured and
displacement bone, with the fragments overlapping each other. Respondent performed a
closed reduction procedure, with Dr. Vicente Jabagat as the anesthesiologist. Then he placed
Allens arm in a plaster cast to immobilize it. He allowed Allen to go home after the post
reduction x-ray showed that the bones were properly aligned, but advised Allens mother,
petitioner Sherlina Bontilao, to bring Allen back for re-tightening of the cast not later than
June 15, 1992. Allen was however, only brought back after the said date. By then, because the
cast had not be re-tightened, a rotational deformity had developed in Allens arm. The x-ray
examination showed that the deformity was caused by a re-displacement of the bone
fragments, so it was agreed that an open reduction surgery will be conducted on June 24, 1992
by the respondent, again with Dr. Jabagat as the anesthesiologist. On the said date, Sherlina
was allowed to observe the operation behind a glass panel. Dr. Jabagat failed to intubate the
patient after 5 attempts so anesthesia was administered through a gas mask. Respondent asked
Dr. Jabagat if the operation should be postponed given the failure to intubate, but Dr. Jabagat
said that it was alright to proceed. Respondent verified that Allen was breathing properly
before proceeding with the surgery. As respondent was about to finish the suturing, Sherlina
decided to go out of the operating room to make a telephone call and wait for her son. Later,
she was informed that her son died on the operating table. The cause of death was asphyxia
due to the congestion and edema of the epiglottis. Hence, a criminal, administrative and civil
case was filed by the parents of Allen against the doctors for the negligence that caused Allens
death.

Issue:

Whether or not respondent is liable for medical negligence due to the death of Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa liquitor to pin liability on
respondent for Allens death. Res ipsa liquitor is a rebuttable presumption or influence that the
defendant was negligent. The presumption only arises upon proof that the instrumentality
causing injury was in the defendants exclusive control, and that the accident was one which
ordinarily does not happen in the absence of negligence. It is a rule of evidence whereby
negligence of the alleged wrong does may be inferred from the mere fact that the accident
happened, provided that the character of the accident and circumstances attending it lead
reasonably to the belief that in the absence of negligence it would not have occurred and that
the thing which caused injury is shown to have been under the management and control of the
alleged wrong doer.
Res ipsa liquitor is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be
cautiously applied defending upon the circumstances of each case. In malpractice case, the
doctrine is generally restricted to situations where a layman is able to say, as a matter of
common knowledge and observation, that the consequence of professional care were not as
such as would ordinarily have followed if due care had been exercised.

Benjamin Salvosa and Baguio College Foundation Vs. The Intermediate Appellate
Court, Eduardo B. Castro, Diomedes B. Castro, Virgina Castro and Rodolfo Castro
G.R. No. 70458 October 5, 1988

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Facts:

Baguio Colleges Foundation (BCF) is an academic institution. However, it is also an

institution of arts and trade because BCF has a full-fledged technical-vocational department
offering Communication, Broadcast and Teletype Technician courses as well as Electronics
Serviceman and Automotive Mechanics courses.

Within the premises of the BCF is an ROTC Unit. The Baguio Colleges Foundation
ROTC Unit had Jimmy B. Abon as its duly appointed armorer. As armorer of the ROTC
Unit, Jimmy B. Abon received his appointment from the AFP. Not being an employee of the
BCF, he also received his salary from the AFP, as well as orders from Captain Roberto C.
Ungos. Jimmy B. Abon was also a commerce student of the BCF.

On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Jimmy B. Abon
shot Napoleon Castro a student of the University of Baguio with an unlicensed firearm which
the former took from the armory of the ROTC Unit of the BCF. As a result, Napoleon Castro
died and Jimmy B. Abon was prosecuted for, and convicted of the crime of Homicide.

Subsequently, the heirs of Napoleon Castro sued for damages, impleading Jimmy B.
Abon and the BCF .

Issue:

Whether or not petitioners can be held solidarity hable with Jimmy B. Abon for
damages under Article 2180 of the Civil Code, as a consequence of the tortious act of Jimmy B.
Abon

Ruling:

Under the paragraph of Art. 2180 of the Civil Code, teachers or heads of
establishments of arts and trades are liable for damages caused by their pupils and students or
apprentices, so long as they remain in their custody. The rationale of such liability is that so
long as the student remains in the custody of a teacher, the latter stands, to a certain extent, in
loco parentis as to the student and is called upon to exercise reasonable supervision over the
conduct of the student. Likewise, the phrase used in [Art. 2180 so long as (the students)
remain in their custody means the protective and supervisory custody that the school and its
heads and teachers exercise over the pupils and students for as long as they are at attendancein
the school, including recess time. Jimmy B. Abon cannot be considered to have been
at attendance in the school, or in the custody of BCF, when he shot Napoleon Castro.
Logically, therefore, petitioners cannot under Art. 2180 of the Civil Code be held solidarity
liable with Jimmy B. Abon for damages resulting from his acts.

Joseph Saludaga Vs. FEU and Edilberto C. De Jesus

G.R. No. 179337, April 30, 2008

Facts :

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Petitioner Joseph Saludaga was a sophomore law student of (FEU) when he was shot
by Alejandro Rosete, one of the security guards on duty at the school premises on August
18, 1996. Petitioner was rushed to FEU Hospital due to the wound he sustained. Meanwhile,
Rosete was brought to the police station where he explained that the shooting was
accidental. He was eventually released considering that no formal complaint was filed against
him.
Saludaga thereafter filed with RTC Manila a complaint for damages against
respondents on the ground that they breached their obligation to provide students with a
safe and secure environment and an atmosphere conducive to learning.

Respondents, in turn, filed a Third-Party Complaint against Galaxy Dvpt and Mgt
Corp. (Galaxy), the agency contracted by FEU to provide security services within its
premises and Mariano D. Imperial (Imperial), Galaxy's President, to indemnify them for
whatever would be adjudged in favor of petitioner, if any; and to pay attorney's fees and cost
of the suit. On the other hand, Galaxy and Imperial filed a Fourth-Party Complaint against
AFP General Insurance.

On Nov.10, 2004, the trial court ruled in favor of Saludaga .Respondents then
appealed to the CA which ruled in its favor, reversing the RTC decision, dismissing the
complaint, and also denying Saludagas subsequent Motion for reconsideration. Hence, the
instant petition.

Issue:
Whether or not respondent is liable under article 2180 of the Civil Code?

Ruling

Incidentally, although the main cause of action in the instant case is the breach of the
school-student contract, petitioner, in the alternative, also holds respondents vicariously
liable under Article 2180 of the Civil Code. However, respondents cannot be held liable for
damages under Art. 2180 of the Civil Code because respondents are not the employers of
Rosete. The latter was employed by Galaxy. The instructions issued by respondents' Security
Consultant to Galaxy and its security guards are ordinarily no more than requests commonly
envisaged in the contract for services entered into by a principal and a security agency.

HEIRS OF REPENDOR COMPLETO AND ELPIDIO ABIAD VS. SGT.

AMANDO C. ALBAYDA
G.R. NO. 172200, JULY 6, 2010. J. NACHURA

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Facts:

On August 27, 1997, Respondent Albayda was on his way to the office to report for
duty as Master Sergeant of the Philippine Air Force, riding a bicycle along the streets. The
taxi driver Completo, the petitioner, bumped and side swiped him, causing respondent
Albayda suffered from serious physical injuries. Albayda was brought to the hospital and was
confined twice therein from August 27, 1997 to February 11, 1998 and February 23, 1998
until March 22, 1998, respectively, due to fracture in his left knee which necessitated his stay
in the hospital for several months. Then after, he underwent medical physiotherapy for more
than a year. A barangay conciliation was effected between the parties, but failed. Thus, this
prompted Albayda to file a complaint for physical injuries through reckless imprudence
against Completo. On the other hand, Completo filed a counter-charge of damage to
property through reckless imprudence against Albayda. Albayda manifested his reservation
to file a separate civil action for damages against petitioners Completo and taxi
owner/operator Abiad in the MTC. The RTC rendered judgment in favor of Albayda and
against the driver and taxi owner/operator. They are ordered to pay actual damages, moral
damages and Attorneys fee. Completo and Abiad filed an appeal, however, CA affirmed the
MTCs decision with modification on the award of damages.

Issue:

(1) Whether or not petitioner driver Completo liable for negligence against Albayda.
(2)Whether or not taxi owner/operator Abiad is solidarily liable with driver Completo for
quasi-delict.
(3)Whether or not award of moral and temperate damages and attorneys fee had basis.

Ruling:

It was proven by a preponderance of evidence that Completo failed to exercise

reasonable diligence in driving the taxicab because he was over-speeding at the time he hit
the bicycle ridden by Albayda. Such negligence was the sole and proximate cause of the
serious physical injuries sustained by Albayda. Completo did not slow down even when he
approached the intersection of 8th and 11th Streets of VAB. It was also proven that Albayda
had the right of way, considering that he reached the intersection ahead of Completo.
Further, considering the fact that usually more diligence will be required of a motorist than a
bicyclist in discharging his duty of care to the other because of the physical advantages the
automobile has over the bicycle. Article 2176 of the Civil Code provides that 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 preexisting contractual relation
between the parties, is called a quasi-delict.

As to the liability of taxi owner/operator Abiad, the court declared that when an when
an injury is caused by the negligence of an employee, a legal presumption instantly arises that
the employer was negligent. This presumption may be rebutted only by a clear showing on
the part of the employer that he exercised the diligence of a good father of a family in the
selection and supervision of his employee. However, in this case, the protestation of Abiad
to escape liability is short of the diligence required under the law. Abiads evidence consisted
entirely of testimonial evidence, and the unsubstantiated and self-serving testimony of Abiad
was insufficient to overcome the legal presumption that he was negligent in the selection and
supervision of his driver. He failed to prove the due diligence required by law as employer,
thus he is also primarily and directly liable with the driver Completo against the respondent.

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The CA deleted the award for actual damages because respondent Albayda failed to
present documentary evidence to establish with certainty the amount he incurred during his
hospitalization and treatment. The court finds temperate damages reasonable to award since
pecuniary loss is apparently suffered however the amount cannot be ascertained. Attorneys
fee is hereby deleted for failure to prove that petitioner acted in bad faith in refusing to
satisfy respondents just and valid claim.

FILAMER CHRISTIAN INSTITUTE VS. HONORABLE COURT OF APPEALS

G.R. NO. 75112, OCTOBER 16, 1990. J. FERNAN

Facts:

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In the evening of October 20, 1977, private respondent Potenciano Kapunan Sr., an
octogenarian retired school teacher was struck by the Pinoy jeep owned by petitioner
Filamer and driven by Daniel Funtecha, a working student of Filamer Christian Institute. As
a consequence, Kapunan suffered multiple injuries and was hospitalized for 20 days.
Funtecha, who only had a student drivers permit at that time, was with Allan Masa, the
authorized driver of the said vehicle. Kapunan instituted a criminal case against Funtecha
alone for serious physical injuries through reckless imprudence. And manifested his right to
file an independent civil action against Funtecha. The court found Funtecha guilty as
charged and on appeal, his conviction was affirmed by the appellate court. Pursuant to his
reservation, Kapunan, filed a case for damages against Filamer and Funtecha, including Dr.
Agustin Masa, the director and president of Filamer; as well as Zenith Insurance
Corporation (Zenith for brevity) as third party- defendant. However, Allan Masa, was not
impleaded as co-defendant of the case. The court found all of them guilty and hereby
ordered jointly and severally to pay the cost of the suit. Filamer and Zenith appealed the
decision of the lower court, but, the judgment of the lower court was affirmed by the CA.

Issue:

Whether or not Filamer is liable to pay the damages for the tortious act of Funtecha.

Ruling:

Accordingly, Filamer is directly and primarily answerable to the injured party under
Article 2180 of the Civil Code would have prospered had if they proceeded against Allan
Masa, the authorized driver of the Pinoy jeep and undisputably an employee of petitioner.
Under the present set of circumstances, even if the trial court did find Allan guilty of
negligence, such conclusion would not be binding on Allan. It must be recalled that Allan
was never impleaded in the complaint for damages and should be considered as a stranger as
far as the trial court's judgment is concerned. It is axiomatic that no man shall be affected by
a proceeding to which he is a stranger.

In addition, Funtecha, being a working student of the said school, belongs to a special
category wherein he cannot be considered as Filamers employee. He was employed as a
janitor, but at the time of the wrongdoing, Funtecha was not acting within the scope of his
supposed job. Therefore, Funtecha should bear the full drunt of his tortious negligence.
Petitioner Filamer cannot be made liable for the damages he had caused.

SPOUSES BENJAMIN AND SONIA MAMARIL VS. THE BOY SCOUT OF THE
PHILIPPINES, ET AL.
G.R. NO. 179382, JANUARY 14, 2013. J. PERLAS- BERNABE.

Facts:

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Spouses Mamaril are jeepney operators since 1971. They park their 6 passenger jeepneys
every night at the Boy Scout (BSP) compound for a fee of P300.00 per month for each unit.
The AIB Security Agency, Inc (AIB) was the contracting agency responsible for the security
and protection of the compound and its properties. On May 26, 1995 in the evening, all
jeepneys were parked inside th BSP compound. The following morning, one vehicle was
missing and was never recovered. The security guards namely, Gaddi and Pea, of AIB who
were incharged when the embezzlement was committed said that a male person who looked
familiar to them took the vehicle out of the compound. The spouses filed a complaint for
damages before the RTC against BSP, AIB and security guards Pea and Gaddi for gross
negligence. The court rendered judgment in favor of the spouses Mamaril and defendants
were ordered to pay jointly and severally the cost of the vehicle including the damages. On
June 11, 2002, the RTC modified its decision reducing the cost of the stolen vehicle. Only
BSP appealed before the CA. The CA affirmed the findings of the lower court, but,
absolving BSP from any liability. It also deleted the award of moral and exemplary damages
as well as the amount of the accessories of the lost jeepney. Spouses filed a motion for
reconsideration thereof, however, the motion was denied.

Issue:

Whether or not the BSP is jointly and severally liable for gross negligence along with AIB
and security guards Pea and Gaddi.

Ruling:

No. Article 1311 of the Civil Code states that contracts take effect only between the
parties, their assigns and heirs, except in case where the rights and obligations arising from
the contract are not transmissible by their nature, or by stipulation or by provision of law. It
is undisputed that Sps. Mamaril are not parties to the Guard Service Contract between the
BSP and AIB. Neither did the subject agreement contain any stipulation pour autrui that a
third party may demand fulfillment of the either parties obligation, provided that the
requisites are complied with. However, in this case no stipulations pour autrui was provided.
Thus, under the principle of relativity of contracts, they cannot validly claim any rights or
favor under the said agreement.

The court also declared that what was between BSP and spouses Mamaril is a contract
of lease. Article 1643 of the Civil Code held that the act of parking a vehicle in a garage,
upon payment of a fixed amount, is a lease. As a lessor, Article 1664 of the same Code states
that "the lessor is not obliged to answer for a mere act of trespass which a third person may
cause on the use of the thing leased; but the lessee shall have a direct action against the
intruder." Here, BSP was not remiss in its obligation to provide Sps. Mamaril a suitable
parking space for their jeepneys as it even hired security guards to secure the premises;
hence, it should not be held liable for the loss suffered by Sps. Mamaril. As to the contract
of lease and its management, the parking fee of P300.00 per month or P10.00 a day for each
unit is too minimal an amount to even create an inference that BSP undertook to be an
insurer of the safety of plaintiffs vehicles. The awards of moral and exemplary damages and
attorney's fees were properly disallowed by the CA for lack of factual and legal bases.

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Professional Services Inc., Petitioner, vs. NATIVIDAD and ENRIQUE AGANA,

Respondents.
G.R. No. 127590
February 2, 2010

Facts:

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Enrique Agana told his wife Natividad Agana to look for their neighbour, Dr. Ampil, a
surgeon staff member of Medical City General Hospital, a prominent and known hospital,
owned and operated by Professional Services Incorporated (PSI). Natividad Agana underwent
medical surgery in said Hospital. The attendant doctors were Dr. Ampil and Dr. Fuentes.
Natividad suffered from injury due to two (2) gauzes left inside her body during the operation.
Despite the report of the (2) two missing gauzes, PSI did not initiate an investigation.

This case consolidated three (3) other cases previously decided and became final and
executory. Hence, this case is limited only to the second motion for reconsideration filed by
the PSI in an attempt absolve itself from liability.

Issue:

Whether or not PSI is liable for tort?

Held:

Yes. PSI is liable.

Firstly, under the principle of Ostensible Agency, according to the Court, ample evidence
that the hospital held out to the patient that the doctor was its agent. Present are the two
factors that determine apparent authority: first, the hospital's implied manifestation to the
patient which led the latter to conclude that the doctor was the hospital's agent; and second,
the patients reliance upon the conduct of the hospital and the doctor, consistent with
ordinary care and prudence the decision made by Enrique for [his wife] Natividad to consult
Dr. Ampil was significantly influenced by the impression that Dr. Ampil was a staff member
of Medical City General Hospital, and that said hospital was well known and
prominent. Enrique looked upon Dr. Ampil not as independent of but as integrally related
to Medical City. The Supreme Court also held that the hospitals consent for hospital care -
required to be signed prior to the surgery - affirmed that the surgeon was of the hospital.

Secondly, under the principle of Corporate Negligence, which was self-imposed liability
because of the statements made by the PSI which constituted judicial admission in its Motion
for Reconsideration. Its statements revealed that it had the power to review or cause the
review of what may have irregularly transpired within its walls strictly for the purpose of
determining whether some form of negligence may have attended any procedure done inside
its premises, with the ultimate end of protecting its patients.

The Court also noted the hospital admitted the standards of its corporate conduct
under the circumstances of this case, specifically: (a) that it had a corporate duty to Natividad
even after her operation to ensure her safety as a patient; (b) that its corporate duty was not
limited to having its nursing staff note or record the two missing gauzes and (c) that its
corporate duty extended to determining Dr. Ampil's role in it, bringing the matter to his
attention, and correcting his negligence. The Court held that the case is not intended to set
a precedent and should not serve as a basis to hold hospitals liable for every form of
negligence of their doctors-consultants under any and all circumstances.

ROGELIO NOGALES V. CAPITOL MEDICAL CENTER

G.R. No. 142625, 19 December 2006

Facts:
Pregnant with her fourth child, Corazon Nogales (Corazon), who was then 37 years
old, was under the exclusive prenatal care of Dr. Oscar Estrada (Dr. Estrada) beginning on her
fourth month of pregnancy or as early as December 1975. Around midnight of 25 May 1976,

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Corazon started to experience mild labor pains prompting Corazon and Rogelio Nogales
(Spouses Nogales) to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada
advised her immediate admission to the Capitol Medical Center (CMC). t 6:13 a.m., Corazon
started to experience convulsionsAt 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied
low forceps to extract Corazon's baby. In the process, a 1.0 x 2.5 cm. piece of cervical tissue
was allegedly torn.At 6:27 a.m., Corazon began to manifest moderate vaginal bleeding which
rapidly became profuse. Corazon died at 9:15 a.m. The cause of death was uhemorrhage, post
partum.

Issue:

Whether or not CMC is vicariously liable for the negligence of Dr. Estrada.

Ruling:

Private hospitals, hire, fire and exercise real control over their attending and visiting
uconsultantu staff. The basis for holding an employer solidarily responsible for the negligence
of its employee is found in Article 2180 of the Civil Code which considers a person
accountable not only for his own acts but also for those of others based on the former's
responsibility under a relationship of patria potestas.

In general, a hospital is not liable for the negligence of an independent

contractor-physician. There is, however, an exception to this principle. The hospital may be
liable if the physician is the uostensibleu agent of the hospital. This exception is also known as
the udoctrine of apparent authorityu.

For a hospital to be liable under the doctrine of apparent authority, a plaintiff must
show that:

1. the hospital, or its agent, acted in a manner that would lead a reasonable person to
conclude that the individual who was alleged to be negligent was an employee or agent of the
hospital;
2. where the acts of the agent create the appearance of authority, the plaintiff must also
prove that the hospital had knowledge of and acquiesced in them; and
3. the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent
with ordinary care and prudence. In the instant case, CMC impliedly held out Dr. Estrada as a
member of its medical staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent
authority thereby leading the Spouses Nogales to believe that Dr. Estrada was an employee or
agent of CMC.

FILCAR TRANSPORT SERVICES V. ESPINAS

GR. No. 174156, 20 June 2012

Facts:

Espinas, while driving, was hit by another car. The other car escaped from the scene of
the incident, but Espinas was able to get its plate number.

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After verifying with the Land Transportation Office, Espinas learned that the owner
of the other car, with plate number UCF-545 is Filcar.

After sending several letters to Filcar and to its President and General Manager
Carmen Flor,demanding payment for the damages sustained by his car without response,
Espinas filed a complaint for damages against Filcar and Carmen Flor demanding the amount
of P97,910.00, representing actual damages sustained by his car. Filcar argued that while it is
the registered owner of the car that hit and bumped Espinas car, the car was assigned to its
Corporate Secretary Atty. Candido Flor, the husband of Carmen Flor. Filcar furtherstated that
when the incident happened, the car was being driven by Atty. Flors personal driver,Timoteo
Floresca.Filcar denied any liability to Espinas and claimed that the incident was not due to its
fault or negligence since Floresca was not its employee but that of Atty. Flor. Filcar and
Carmen Flor.

Issue:

Whether Filcar, as registered owner of the motor vehicle which figured in an accident, may be
held liable for the damages caused to Espinas.

Ruling:

Yes. Filcar, as registered owner, is deemed the employer of the driver, Floresca, and is
thus vicariouslyliable under Article 2 -3 in relation with Article 2 4/ ofthe Civil Code As a
general rule, one is only responsible for his own act or omission.Thus, a person will generally
beheld liable only for the torts committed by himselfand not by another. The law, however,
provides fore5ceptions that an employer is made vicariously liable for the tort committed by
his employee. Article2 4/ ofthe Civil Code states6Article 2 4/. The obligation imposed by
Article 2 -3 is demandable not only for one0s own acts oromissions, but also for those
ofpersons for whom one is responsible. Employers shall be liable for the damages caused by
their employees and household helpers actingwithin the scope oftheir assigned tas7s, even
though the former are not engaged in any business orindustry.

Under Article 2176, in relation with Article 2180, ofthe Civil Code, an action
predicated on an employees act or omission may be instituted against the employer who is
held liable for the negligentact or omission committed by his employee.It is well settled that in
case ofmotor vehicle mishaps, the registered owner ofthe motor vehicle isconsidered as the
employer ofthe tortfeasor'driver, and is made primarily liable for the tort committedby the
latter under Article 2176, in relation with Article 2180, ofthe Civil Code.Filcar is not be
permitted to evade its liability for damages by conveniently passing on the blame toanother
party8 in this case, its Corporate Secretary, Atty. Flor and his alleged driver, Floresca.
WHEREFORE, the petition is DENIED. The decision the Court of Appeals are
AFFIRMED. Costsagainst petitioner Filcar Transport Services.

CZARINA T. MALVAR VS. KRAFT FOODS PHILS., INC. AND/OR

BIENVENIDO BAUTISTA, KRAFT FOODS INTERNATIONAL
G.R. No. 183952. September 9, 2013
Facts:
In 1988, Kraft Foods Phils., (KRAFT) hired Czarina Malvar as its Corporate Planning
Manager. She rose in the ranks and became the Vice President for Finance in the Southeast

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Asia region of Kraft Foods International, KFPIs mother company. In 1999, the chairman of
the board of KFPI and concurrently the VP and Area Director for SEA, sent Malvar a
memo directing her to explain why no administrative sanctions should be imposed on her
for possible breach of trust and confidence and for willful violation of company rules and
regulations. She was places under preventive suspension and ultimately she was served a
notice of termination. Malvar, aggrieved, filed a complaint for illegal suspension and
illegal dismissal against KFPI and Bautista in the NLRC. The Labor Arbiter found and
declared her suspension and dismissal illegal and ordered her reinstatement. The judegment
became final and executory however Malvars award was reduced. Both parties appealed the
computation of the NLRC. While pending appeal, Malvar and the respondents entered into
a compromise agreement wherein Malvar would be paid 40 million pesos. Malvar moved to
withdraw the case in view of the compromise agreement . But before the court could act on
the motion to dismiss/withdraw, a motion for intervention to protect the Attorney's rights
was filed. It appears that, to the intervenors surprise, Malvar unceremoniously and without
any justifiable reason terminated its legal service and required it to withdraw from the case.
The intervenor indicated that Malvars precipitate action had baffled, shocked and even
embarrassed the intervenor, because it had done everything legally possible to serve and
protect her interest. It added that it could not recall any instance of conflict or
misunderstanding with her, for on the contrary, she had even commended it for its
dedication and devotion to her case.
Issue:
Whether or not KRAFT is jointly and severally liable to pay the intervenor Law
firm?
Ruling:
The respondents would be liable if they were shown to have connived with Malvar in
the execution of the compromise agreement, with the intention of depriving the intervenor
of its attorneys fees. Therefore they would be solidarily liable with her for the attorneys fees
as stipulated in the written agreement under the theory that they unfairly and unjustly
interfered with the intervenors professional relationship with Malvar.
The respondents were complicit in Malvar's move to deprive the Intervenor of its duly
earned contingent fees. At this juncture, the Court notes that the compromise agreement
would have Malvar waive even the substantial stock options already awarded by the NLRC's
decision, which ordered the respondents to pay to her, among others, the value of the stock
options and all other bonuses she was entitled to or would have been entitled to had she not
been illegally dismissed from her employment. This ruling was affirmed by the CA. But the
waiver could not negate the Intervenor's right to 10% of the value of the stock options she
was legally entitled to under the decisions of the NLRC and the CA, for that right was
expressly stated in the written agreement between her and the Intervenor. Thus, the
Intervenor should be declared entitled to recover full compensation in accordance with the
written agreement because it did not assent to the waiver of the stock options, and did not
waive its right to that part of its compensation.
The circumstances show that Malvar and the respondents needed an escape from
greater liability towards the intervenor, and from the possible obstacle to their plan to settle
to pay. Thereby, she and the respondents became joint tort-feasors who acted adversely
against the interests of the Intervenor. Under Article 2194 of the Civil Code, joint
tort-feasors are solidarily liable for the resulting damage.
NATIONAL POWER CORPORATION V. COURT OF APPEALS
G.R. No. 119121. August 14, 1998.

Facts:
A convoy of four (4) dump trucks owned by the National Power Corporation (NPC)
left Marawi city bound for Iligan city. Unfortunately, enroute to its destination, one of the

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trucks with plate no. RFT-9-6-673 driven by a certain Gavino Ilumba figured in a
head-on-collision with a Toyota Tamaraw. The incident resulted in the death of 3 persons
riding in the Toyota Tamaraw, as well as physical injuries to 17 other passengers. The heirs
of the victims then filed a complaint for damages against National Power Corporation
(NPC) and PHESCO Incorporated (PHESCO) before the then Court of First Instance of
Lanao del Norte, Marawi City. When defendant PHESCO filed its answer to the complaint
it contended that it was not the owner of the dump truck which collided with the Toyota
Tamaraw but NPC. Moreover, it asserted that it was merely a contractor of NPC with the
main duty of supplying workers and technicians for the latters projects. On the other hand,
NPC denied any liability and countered that the driver of the dump truck was the employee
of PHESCO. Trial court absolved NPC and ordered PHESCO, Inc. and Gavino Ilumba to
pay jointly and severally the plaintiffs thru the Dansalan College the sum of P954,154.55
representing the actual or compensatory damages incurred by the plaintiffs; and P50,000.00
representing Attorneys fees. Dissatisfied, PHESCO appealed. CA reversed the trial courts
judgment. Chagrined by the sudden turnaround, NPC filed a motion for reconsideration of
said decision which was, however, denied on February 9, 1995. Hence, this petition.
Issue:
Whether or not NPC is liable for the tort of driver Gavino Ilumba?
Ruling:
YES. In the case at bar, there is no doubt that PHESCO was engaged in labor-only
contracting vis-a-vis NPC and as such, it is considered merely an agent of the latter. So, even
if PHESCO hired driver Gavino Ilumba, as PHESCO is admittedly a labor only contractor of
NPC, the statute itself establishes an employer-employee relationship between the employer
NPC and the employee (driver Ilumba) of the labor only contractor (PHESCO).

Consequently, we hold PHESCO not liable for the tort of driver Ilumba, as there was no
employment relationship between PHESCO and driver Ilumba. Under Article 2180 of the
Civil Code, to hold the employer liable for torts committed by his employees within the scope
of their assigned task, there must exist an employer-employee relationship.

Also, the position of NPC that even assuming that a labor only contract exists between it
and PHESCO, its liability will not extend to third persons who are injured due to the tortious
acts of the employee of the labor-only contractor, stated otherwise, its liability shall only be
limited to violations of the Labor Code and not quasi-delicts is misplaced. It bears stressing
that the action was premised on the recovery of damages as a result of quasi-delict against both
NPC and PHESCO, hence, it is the Civil Code and not the Labor Code which is the applicable
law in resolving this case.

An implementing rule on labor cannot be used by an employer as a shield to avoid liability

under the substantive provisions of the Civil Code.

In this regard, NPC's liability is direct, primary and solidary with PHESCO and the driver.
Of course, NPC, if the judgment for damages is satisfied by it, shall have recourse against
PHESCO and the driver who committed the negligence which gave rise to the action.

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN vs. MARJORIE

NAVIDAD, HEIRS OF THE LATE NICANOR NAVIDAD & PRUDENT
SECURITY AGENCY. G.R. No. 145804. February 6, 2003.
Facts:
Navidad was drunk when he entered the boarding platform of the LRT. He got into an
altercation with the Security Guard Junelito Escartin. They had a fistfight and Navidad fell
onto the tracks and was killed instantaneously upon being hit by a moving train operated by
Rodolfo Roman. The Heirs of Navidad filed a complaint for damages against Escartin, the

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train driver (Roman), the LRTA, the Metro Transit Organization and Prudent Security
Agency (agency of security guards) for the death of her husband. The trial court found
Prudent and Escartin jointly and severally liable for damages to the heirs. The Court of
Appeals however reversed the decision of the RTC by exonerating Prudent and instead held
the LRTA and the train driver Romero jointly and severally liable as well as removing the
award for compensatory damages and replacing it with nominal damages.
The reasoning of the CA was that a contract of carriage already existed between
Navidad and LRTA by virtue of his having purchased train tickets and the liability was
caused by the mere fact of Navidad's death after being hit by the train being managed by the
LRTA and operated by Roman. The CA also blamed LRTA for not having presented expert
evidence showing that the emergency brakes could not have stopped the train on time.
Issues:
(1) Whether or not LRTA and/or Roman is liable for the death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with compensatory damages.
Ruling:
(1) Yes. The foundation of LRTA's liability is the contract of carriage and its obligation
to indemnify the victim arising from the breach of that contract by reason of its failure to
exercise the high diligence required of a common carrier.
(2) Fault was not established. If Prudent is to be held liable, it would be for a tort under
Art. 2176 in conjunction with Art. 2180. Once the fault of the employee Escartin is
established, the employer, Prudent, would be held liable on the presumption that it did not
exercise the diligence of a good father of the family in the selection and supervision of its
employees.
(3) No. It is an established rule that nominal damages cannot co-exist with
compensatory damages. The award of nominal damages in addition to actual damages is
untenable. Nominal damages are adjudicated in order that a right of the plaintiff, which has
been violated or invaded by the defendant, may be vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered by him. It is an established rule
that nominal damages cannot co-exist with compensatory damages. The award was
deleted.

52. PHILIPPINE NATIONAL RAILWAYS CORPORATION vs

PURIFICACION VIZCARA
G.R. No. 190022, February 15, 2012

Facts:

On May 14, 2004, at about three oclock in the morning, Reynaldo Vizcara was driving a
passenger jeepney headed towards Bicol to deliver onion crops, with companions, namely,
Cresencio, Crispin, Samuel, Dominador and Joel. While crossing the railroad track in Tiaong,

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Quezon, a Philippine National Railways (PNR) train, then being operated by respondent
Japhet Estranas (Estranas), suddenly turned up and rammed the passenger jeepney. The
collision resulted to the instantaneous death of Reynaldo, Cresencio, Crispin, and Samuel.
On the other hand, Dominador and Joel, sustained serious physical injuries. The survivors of
the mishap, Joel and Dominador, together with the heirs of the deceased victims, filed an
action for damages against PNR, and the alternate driver of the train. The petitioners
claimed that they exercised due diligence in operating the train and monitoring its
roadworthiness. They asseverate that right before the collision, Estranas was driving the train
at a moderate speed. The Trial Court ruled in favor of the private respondents. Unyielding,
the petitioners appealed the RTC decision to the CA. The CA affirmed the RTC decision
with modification. Thus this petition.

Issues:

(1)Whether or not the proximate cause of the accident was the negligence of the
petitioners.
(2)Whether or not the doctrine of last clear chance finds no application in the instant
case
(3)Whether or not there was contributory negligence on the part of the respondents.

Ruling:

Yes, the petitioners negligence was the proximate cause of the accident. Both courts
ruled that the petitioners fell short of the diligence expected of it, taking into consideration
the nature of its business, to forestall any untoward incident. In particular, the petitioners
failed to install safety railroad bars to prevent motorists from crossing the tracks in order to
give way to an approaching train. Aside from the absence of a crossing bar, the Stop, Look
and Listen signage installed in the area was poorly maintained, hence, inadequate to alert the
public of the impending danger. A reliable signaling device in good condition, not just a
dilapidated Stop, Look and Listen signage, is needed to give notice to the public. It is the
responsibility of the railroad company to use reasonable care to keep the signal devices in
working order. Failure to do so would be an indication of negligence. Having established the
fact of negligence on the part of the petitioners, they were rightfully held liable for damages.

The doctrine of last clear chance is not applicable. The doctrine of last clear chance
provides that where both parties are negligent but the negligent act of one is appreciably
later in point of time than that of the other, or where it is impossible to determine whose
fault or negligence brought about the occurrence of the incident, the one who had the last
clear opportunity to avoid the impending harm but failed to do so, is chargeable with the
consequences arising therefrom. Stated differently, the rule is that the antecedent negligence
of a person does not preclude recovery of damages caused by the supervening negligence of
the latter, who had the last fair chance to prevent the impending harm by the exercise of due
diligence. To reiterate, the proximate cause of the collision was the petitioners negligence in
ensuring that motorists and pedestrians alike may safely cross the railroad track. The
unsuspecting driver and passengers of the jeepney did not have any participation in the
occurrence of the unfortunate incident which befell them. Likewise, they did not exhibit any
overt act manifesting disregard for their own safety. Thus, absent preceding negligence on
the part of the respondents, the doctrine of last clear chance cannot be applied.

There was no contributory negligence on the part of the respondents. Contributory

negligence is a conduct on the part of the injured party, contributing as a legal cause to the
harm he has suffered, which falls below the standard which he is required to conform for his
own protection. It is an 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. Hence, we cannot see how the respondents could have contributed to their
injury when they were not even aware of the forthcoming danger.

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BANK OF THE PHILIPPINE ISLANDS vs

LIFETIME MARKETING CORPORATION
G.R. No. 176434, June 25, 2008

Facts: Lifetime Marketing opened a current account with the BPI. In this account, the
sales agents of LMC would have to deposit their collections or payments to the latter. As a
result, LMC and BPI, made a special arrangement that the formers agents will accomplish
three (3) copies of the deposit slips, the third copy to be retained and held by the teller until
LMCs authorized representatives, shall retrieve them on the following banking day.
Sometime in 1986, LMC availed of the BPIs inter-branch banking network services, whereby

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the formers agents could make deposit to any BPI branch in Metro Manila under the same
account. Under this system, BPIs bank tellers were no longer obliged to retain the extra copy
of the deposit slips instead, they will rely on the machine-validated deposit slip, to be
submitted by LMCs agents. For its part, BPI would send to LMC a monthly bank statement
relating to the subject account. This practice was observed and complied with by the parties.
As a business practice, the registered sales agents or the Lifetime Educational Consultants of
LMC, can get the books from the latter on consignment basis, then they would go directly to
their clients to sell. These agents or Lifetime Educational Consultants would then pay to
LMC, seven (7) days after they pick up all the books to be sold. Since LMC have several
agents around the Philippines, it required to remit their payments through BPI, where LMC
maintained its current account. It has been LMCs practice to require its agents to present a
validated deposit slip and, on that basis, LMC would issue to the latter an acknowledgement
receipt. Alice Laurel, is one of LMCs Educational Consultants or agents, made check
deposits with the BPI branches and, after the check deposit slips were machine-validated,
requested the teller to reverse the transactions. Based on general banking practices, however,
the cancellation of deposit or payment transactions upon request by any depositor or payor,
requires that all copies of the deposit slips must be retrieved or surrendered to the bank.
This practice, in effect, cancels the deposit or payment transaction, thus, it leaves no
evidence for any subsequent claim or misrepresentation made by any innocent third person.
Notwithstanding this, the verbal requests of Alice Laurel and her husband to reverse the
deposits even after the deposit slips were already received and consummated were
accommodated by BPI tellers. Upon discovery of this fraud, LMC made queries from the
BPI branches involved. In reply to said queries, BPI branch managers formally admitted that
they cancelled, without the permission of or due notice to LMC, the deposit transactions
made by Alice and her husband, and based only upon the latters verbal request or
representation.

Issues:

Whether or not BPI was negligent in handling LMCs account.

Ruling:

Yes, because the reversal of the transactions in question was unilaterally undertaken by
BPIs tellers without following normal banking procedure which requires them to ensure that
all copies of the deposit slips are surrendered by the depositor. The machine-validated
deposit slips do not show that the transactions have been cancelled, leading LMC to rely on
these slips and to consider Alice Laurels account as already paid.

Negligence is the omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would not do. Negligence in this
case lies in the tellers disregard of the validation procedures in place and BPIs utter failure to
supervise its employees. Notably, BPIs managers admitted in several correspondences with
LMC that the deposit transactions were cancelled without LMCs knowledge and consent
and based only upon the request of Alice Laurel and her husband. It is well to reiterate that
the degree of diligence required of banks is more than that of a reasonable man or a good
father of a family. In view of 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.
BPI cannot escape liability because of LMCs failure to scrutinize the monthly statements
sent to it by the bank. This omission does not change the fact that were it not for the
wanton and reckless negligence of BPIs tellers in failing to require the surrender of the
machine-validated deposit slips before reversing the deposit transactions, the loss would not
have occurred. BPIs negligence is undoubtedly the proximate cause of the 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.

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CRISTINA PENULLAR vs PHILIPPINE NATIONAL BANK

G.R. No. L-32762, January 27, 1983

Facts:

There was a land registration case between Cristina Penullar and Florencio Felix for the
declaration of absolute nullity of judicial proceedings in a land registration case. Genoveva
Miguel filed a civil case against Praxedes Moya et al., predecessors of herein plaintiff Cristina
Penullar, for declaration of ownership over three (3) portions of agricultural land. While the
case was pending, the land was mortgaged to PNB for a loan by the defendants of the case

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for declaration of nullity of judicial proceedings. The CA in that case declared the judicial
proceedings void and all Certificates of Title flowing from the proceedings null and void, but
at the same time declared the mortgage of PNB valid on the basis of being a mortgagor in
good faith. Penullar claimed that PNB was negligent in allowing the void title to be
mortgaged.

Issues:

Whether or not PNB was negligent in accepting the security of Torrens Title wherein
trial court annulled the titles issued pursuant to the decision of the Land Registration Court.

Ruling:

No, there is no showing, that the Bank was made specifically aware of the fact that the
very property already covered by the free patents were only adjudicated to and Torrens Titles
issued in the name of the heirs of Miguel, who were the parties that afterwards had secured
the mortgages from the Bank, not only this, the declaration of nullity of the titles of the heirs
of Genoveva Miguel due to the fact that there had already been free patents issued in the
name of plaintiff's predecessors Moya and Sison came in only much later and in fact as of
the time when these mortgages were accepted by the Bank, there was as yet no decision
declaring the titles of the mortgagors null and void; stated otherwise there can be no denying
the fact that the Bank was made to rely and had the right to rely upon regular certificates of
title first presented to it by the mortgagors.

The Philippine National Bank relied on the torrens titles of the mortgagors which had
been regularly issued. The torrens titles were the result of regular land registration
proceedings duly registered with the Register of Deeds. There was nothing in the torrens
titles which would excite suspicion that the same were fraudulently processed by the
mortgagors. Applying, therefore, the principles enunciated in the aforecited cases, the
respondent Bank was not duty bound to further investigate the validity and or invalidity of
the torrens title.

The court might as well invoke the principle that where one of two innocent parties
must have to suffer due to the act of a third person, he whose negligence had caused the
damage should be made to bear the loss; in the present case if the heirs of Genoveva Miguel,
that is to say herein plaintiff had only been diligent, and had appealed from the decision in
the registration case, no certificate of Title would have been issued just like that in the name
of the heirs of Genoveva Miguel and no mortgage could have been constituted by them in
favor of Bank but as it is, said successors of Praxedes Moya and Josefa Sison failed to do
that; instead they let the decision in the registration case gain the status of finality; allowed
without prior protest, the certificate of title to be issued; did not even as early as possible,
annotate an adverse claim on the titles; and they filed this case only several months
afterwards, it was their negligence that permitted said adjudicatees in the said registration
case to apply for and secure mortgages from the Bank.

OSMUNDO S. CANLAS and ANGELINA CANLAS, petitioner, vs. COURT OF

APPEALS, ASIAN SAVINGS BANK, MAXIMO C. CONTRERAS and VICENTE
MAOSCA, respondents.
[G.R. No. 112160. February 28, 2000]

Facts:

Canlas and Maosca agreed to invest together in a business. Canlas sold parcels of land to
Moasca for P 850thousand pesos, P500 thousand payable within a week, whilst the balance of

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P 350thousand pesos shall be Canlas investment in the business. Maosca issued two (2)
post-dated checks for the P500thousand: one for P40 thousand and one for P460 thousand.
But the check for the larger amount was insufficiently funded. More so, Maosca was able to
mortgage the entire parcels of land to Asian Development Bank with the aid of two impostors
who pretended to be Mr and Mrs Canlas. The mortgage being unpaid, ASB extrajudicially
foreclosed the lands mortgaged. Canlas wrote a letter to the bank informing them of the fraud.
ASB still proceeded with the foreclosure. Consequently, on February 3, 1983 the herein
petitioners instituted the present case for annulment of deed of real estate mortgage with
prayer for the issuance of a writ of preliminary injunction; and on May 23, 1983, the trial court
issued an Order restraining the respondent sheriff from issuing the corresponding Certificate
of Sheriffs Sale.[8]For failure to file his answer, despite several motions for extension of time
for the filing thereof, Vicente Maosca was declared in default.[9]On June 1, 1989, the lower
court a quo (RTC) came out with a decision annulling subject deed of mortgage and disposing/
Maosca to pay ASBs cross-claim for P350k. From this decision, ASB appealed to CA. CA
reversed RTC. Canlas elevated the case to the SC by Rule 45 (Petition for review on Certiorari)

Issue: Whether Asian Development Bank is guilty of negligence in not verifying the identity of
the impostors who pretended to be the spouses Canlas?

SC Ruling: yes. Petition is meritorious.The degree of diligence required of banks is more than
that of a good father of a family;[12] in keeping with their responsibility to exercise the necessary
care and prudence in dealing even on a register or titled property. The business of a bank is
affected with public interest, holding in trust the money of the depositors, which bank deposits
the bank should guard against loss due to negligence or bad faith, by reason of which the bank
would be denied the protective mantle of the land registration law, accorded only to purchases
or mortgagees for value and in good faith.[13]In the case under consideration, from the
evidence on hand it can be gleaned unerringly that respondent bank did not observe the
requisite diligence in ascertaining or verifying the real identity of the couple who introduced
themselves as the spouses Osmundo Canlas and Angelina Canlas. It is worthy to note that not
even a single identification card was exhibited by the said impostors to show their true identity
and yet, the bank acted on their representations simply on the basis of the residence certificates
bearing signatures which tended to match the signatures affixed on a previous deed of
mortgage to a certain Atty. Magno, covering the same parcels of land in question.

HEDY GAN y YU, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and the PEOPLE OF THE
PHILIPPINES, respondents.
G.R. No. L-44264 September 19, 1988

Facts:

Gan was driving her car one day, when, in order to avoid two incoming vehicle
encroaching her side of the road, one trying to overtake the other, she swerved her car to the
right, pinning an old man trying to cross the street, pinning his body to a jeep, causing the jeep

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to move forward and causing damage to other vehicles. Gan was found guilty by the RTC of
homicide thru reckless imprudence. On appeal, the CA found her guilty with homicide thru
simple imprudence, and pursuant to paragraph 2, Article 365 of the Revised Penal Code, she
was sentenced to the indeterminate penalty of 3 months and 11 days of arresto mayor and to
indemnify the heirs of Isidro Casino in the sum of P12,000 without any subsidiary
imprisonment in case of insolvency, and to pay the costs.

Issue:

Was Gan negligent?

SC Ruling:

No. A corollary rule is what is known in the law as the emergency rule. "Under that rule,
one who suddenly finds himself in a place of danger, and is required to act without time to
consider the best means that may be adopted to avoid the impending danger, is not guilty of
negligence, if he fails to adopt what subsequently and upon reflection may appear to have been
a better method, unless the emergency in which he finds himself is brought about by his own
negligence." 6

The course of action suggested by the appellate court (that Gan should have stopped her
vehicle) would seem reasonable were it not for the fact that such suggestion did not take into
account the amount of time afforded petitioner to react to the situation she was in. For it is
undeniable that the suggested course of action presupposes sufficient time for appellant to
analyze the situation confronting her and to ponder on which of the different courses of action
would result in the least possible harm to herself and to others.

Also, the respondent court itself pronounced that the petitioner was driving her car within the
legal limits. We therefore rule that the "emergency rule" enunciated above applies with full
force to the case at bar and consequently absolve petitioner from any criminal negligence in
connection with the incident under consideration.

We further set aside the award of damages to the heirs of the victim, who by executing a release
of the claim due them, had effectively and clearly waived their right thereto.

WHEREFORE, judgment is hereby rendered acquitting petitioner HEDY GAN y YU of the

crime of Homicide thru Simple Imprudence. She is no longer liable for the P12,000.00 civil
indemnity awarded by the appellate court to the heirs of the victim.

GEORGE MCKEE and ARACELI KOH MCKEE, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA
MANALO, respondents.
G.R. No. L-68103 July 16, 1992
CARMEN DAYRIT KOH, LETICIA KOH, JULIETA KOH TUQUERO, ARACELI
KOH MCKEE, ANTONIO KOH and ELIZABETH KOH TURLA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA
MANALO, respondents.
G.R. No. L-68102 July 16, 1992

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Facts:

The car driven by the relatives of the petitioner were crossing a bridge, when some kids
tried to dart to cross the road, unsure whether to cross or not. The car blew its horn, swerved
to the left side of the road, switched on its head light to try to warn the driver of the truck and
tried to return to its lane. But the truck did not slow down. As a result, before the car could
return to its side, it got hit by the truck, leading to the death of the driver, his daughter and the
baby sitter [in the front passenger seat], and injury to the rest of the passengers. Witnesses saw
the truck stopped only after colliding with the car. There were skid marks under the truck, but
there were no skid marks behind the truck.) RTC found Galang liable. CA affirmed RTC.
Galang went to the SC via Appeal by Certiorari under Rule 45.

Issue:

Was Galang negligent?

SC Ruling:

Yes. Galang was negligent. If ever the car driver was guilty of some negligence, it was
excused by Emergency Rule and the doctrine of the Last clear chance. Galang was driving
at 40miles per hour (38 kilometers per hour) when the allowable speed limit when crossing a
bridge is only 30 kilometers per hour. Galang alleged that there was mistake in interpretation,
but regularity of performance of duty by the officers getting his testimony is presumed.

Galangs employer is also liable under Article 2180 in relation to Article 2176 of the Civil Code.
The employer could have raised the defense of good father of the family in due selection and
supervision of employees, but they did not offer this defense.

For the inattentiveness or reckless imprudence of Galang, the law presumes negligence on the
part of the defendants in the selection of their driver or in the supervision over him. Appellees
did not allege such defense of having exercised the duties of a good father of a family in the
selection and supervision of their employees in their answers. They did not even adduce
evidence that they did in fact have methods of selection and programs of supervision. The
inattentiveness or negligence of Galang was the proximate cause of the mishap. If Galang's
attention was on the highway, he would have sighted the car earlier or at a very safe distance
than (sic) 10 meters. He proceeded to cross the bridge, and tried to stop when a collision was
already inevitable, because at the time that he entered the bridge his attention was not riveted
to the road in front of him.

ORIX METRO LEASING AND FINANCE CORPORATION vs. MANGALINAO

G.R. No. 174089. JANUARY 25, 2012

FACTS:

This is a case of multiple-vehicle collision in North Luzon Expressway (NLEX) resulting in

the death of all the passengers in one vehicle, including the Mangalinao spouses and a sibling of the
surviving orphaned minor heirs.

An action for damages based on quasi delict was filed by the minor children of the Mangalinao spouses
through their legal guardian against the registered owners and drivers of the two 10-wheeler trucks that
collided with their parents Nissan Pathfinder. The children imputed recklessness, negligence, and
imprudence on the truck drivers for the deaths of their sister and parents; while they hold Sonny and
Orix equally liable for failing to exercise the diligence of a good father of a family in the selection and
supervision of their respective drivers.

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ISSUE:

Whether or not the defendants are jointly and severally liable.

RULING:

The finding of negligence of petitioners as found by the lower courts is binding. Negligence
and proximate cause are factual issues. Settled is the rule that this Court is not a trier of facts, and the
concurrence of the findings of fact of the courts below are conclusive.

Orix as the operator on record of the Fuso Truck is liable to the heirs of the victims of the
mishap. Orix cannot point fingers at the alleged real owner to exculpate itself from vicarious liability
under Article 2180 of the Civil Code. Regardless of whoever Orix claims to be the actual owner of the
Fuso by reason of a contract of sale, it is nevertheless primarily liable for the damages or injury the truck
registered under it have caused. Besides, the registered owners have a right to be indemnified by the real
or actual owner of the amount that they may be required to pay as damage for the injury caused to the
plaintiff, which Orix rightfully acknowledged by filing a third-party complaint against the owner of the
Fuso, Manuel. Moral damages, it must be stressed, are not intended to enrich plaintiff at the expense of
the defendant. They are awarded to enable the injured party to obtain means, diversions, or
amusements that will serve to alleviate the moral suffering he/she had undergone due to the other
partys culpable action and must, perforce, be proportional to the suffering inflicted.

SANITARY STEAM LAUNDRY, INC., vs. THE COURT OF APPEALS

G.R. No. 119092. DECEMBER 10, 1998

Facts:

This case involves a collision between a Mercedes Benz panel truck of petitioner Sanitary
Steam Laundry and a Cimarron which caused the death of three persons and the injuries of several
others. The accident took place at the Aguinaldo Highway in Imus, Cavite on August 31, 1980. The
passengers of the Cimarron were mostly employees of the Project Management Consultants, Inc.
(PMCI). The Cimarron was owned by Salvador Salenga. Driving the vehicle was Rolando Hernandez.
It appears that at about 8:00 p.m., as it was traveling along Aguinaldo Highway in Imus, Cavite on its
way back to Manila, the Cimarron was hit on its front portion by petitioners panel truck which was
traveling in the opposite direction. The driver, Herman Hernandez, claimed that a jeepney in front of
him suddenly stopped. He said he stepped on the brakes to avoid hitting the jeepney and that this
caused his vehicle to swerve to the left and encroach on a portion of the opposite lane. As a result, his
panel truck collided with the Cimarron on the north-bound lane. The driver of the Cimarron, Rolando

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Hernandez, and two of his passengers, namely, Jason Bernabe and Dalmacio Salunoy, died. Several of
the other passengers of the Cimarron were injured and taken to various hospitals.

Issue:

Whether the driver of the Cimarron was guilty of contributory negligence and, therefore, the
liability of the petitioner should be mitigated, if not totally extinguished.

Ruling:

No. It has not been shown how the alleged negligence of the Cimarron driver contributed to
the collision between the vehicles. Indeed, petitioner has the burden of showing a causal connection
between the injury received and the violation of the Land Transportation and Traffic Code. He must
show that the violation of the statute was the proximate or legal cause of the injury or that it
substantially contributed thereto. Negligence, consisting in whole or in part, of violation of law, like any
other negligence, is without legal consequence unless it is a contributing cause of the injury. Petitioner
says that driving an overloaded vehicle with only one functioning headlight during nighttime certainly
increases the risk of accident, that because the Cimarron had only one headlight, there was decreased
visibility, and that the fact that the vehicle was overloaded and its front seat overcrowded decreased
[its] maneuverability. However, mere allegations such as these are not sufficient to discharge its
burden of proving clearly that such alleged negligence was the contributing cause of the injury.

AMADOR CORPUZ AND ROMEO GONZALES vs. EDISON LUGUE AND

CATHERINE BALUYOT
G.R. No. 137772. JULY 29, 2005

Facts:

On 14 September 1984, at around 7:15 in the morning, while an Isuzu KC-20 passenger
jeep (KC-20), then being driven by Jimmy Basilio, was traversing the right side of the Roman
Highway in Barangay Pias, Orion, Bataan, it collided with a tanker truck driven by Gerardo Lim,
which was then moving from the right shoulder of the highway. As a consequence of the accident,
passengers of the KC-20, including respondent Lugue, suffered physical injuries. Respondent
Lugue then filed an action for damages arising from the vehicular incident before the Balanga,
Bataan RTC, Branch 2, against herein petitioners Amador Corpuz and Romeo Gonzales, owner
and driver of the minibus, respectively, and Oscar Jaring and Gerardo Lim, owner and driver of the
tanker truck, respectively. Therein defendants filed a third-party complaint against Ricardo
Santiago and Jimmy Basilio, owner/operator and driver of the KC-20, respectively.

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Issue:

Whether or not the appellate court erred in holding them liable for damages based on the
findings of facts adduced by the trial court.

Ruling:

It is clear that the proximate cause of the injuries suffered by respondent Lugue was the
collision between the KC-20 and the tanker truck. As correctly pointed out by the lower court,
proximate legal cause is that acting first and producing the injury either immediately or by setting
other events in motion, all constituting a natural and continuous chain of events, each having a
close causal connection with its immediate predecessor, the final event in the chain immediately
effecting the injury as a natural and probable result of the cause which first acted, under such
circumstances that the person responsible for the first event should, as an ordinarily prudent and
intelligent person, have reasonable ground to expect at the moment of his act or default that an
injury to some person might probably result therefrom. Certainly, even assuming that petitioner
Gonzales had a few seconds before actual collision, he no longer had any opportunity to avoid it.
Petitioner Gonzales cannot be deemed negligent for failing to prevent the collision even after
applying all means available to him within the few instants when he had discovered the impending
peril.

LAMBERT S. RAMOS VS C.O.L REALTY

CORPORATION
G. R. No. 184905

Facts:

Petitioner Ramos is the employer of Rodel Ilustrisimo. While Rodel was driving the
Ford Expedition of petitioner an accident ensued, wherein it bumped with a Corrolla Altis
driven by Aquilino Larin and owned by Respondent COL Realty. Due to the impact of the
vehicular mishap, the passenger of the sedan was injured.

A case was filed against Ramos making him solidarily liable with his driver. Ramos
in his opposition argued that he cannot be held solidarily liable since it is Aquilnio's
negligence that is the proximate cause of the accident. He further argued that when the
accident happened, Aquilino violated an MMDA order, i.e. prohibiting the crossing is the
place where the accident happened.

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Issue:

Whether Ramos may be held liable since the proximate cause of the accident is his
employee's negligence.

Ruling:

No. Aquinos violation of the MMDA prohibition against crossing Katipunan

Avenue Rajah Matanda Street was the proximate cause of the accident. Proximate cause is
defined as 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.

If Aquilino heeded the MMDA prohibition against crossing Katipunan Avenue from
Rajah Matanda, the accident would not have happened. This specific untoward event is
exactly what the MMDA prohibition was intended for. Thus, a prudent and intelligent
person who resides within the vicinity where the accident occurred, Aquilino had reasonable
ground to expect that the accident would be a natural and probable result if he crossed
Katipunan Avenue since such crossing is considered dangerous on account of the busy
nature of the thoroughfare and the ongoing construction of the Katipunan-Boni Avenue
underpass. It was manifest error for the Court of Appeals to have overlooked the principle
embodied in Article 2179 of the Civil Code, that when the plaintiffs own negligence was the
immediate and proximate cause of his injury, he cannot recover damages.

As to the alleged Rodel's contributory negligence, the court finds it unnecessary to

delve into it, since it cannot overcome or defeat Aquilinos recklessness which is the
immediate and proximate cause of the accident. Rodels contributory negligence has
relevance only in the event that Ramos seeks to recover from respondent whatever damages
or injuries he may have suffered as a result; it will have the effect of mitigating the award of
damages in his favor.

ELIAS S. CIPRIANO and/or E.S CIPRIANO ENTERPRISES VS THE

COURT OF APPEALS and MACLIN ENTERPRISES
G.R. NO. 107968

Facts:

E.S. Cipriano Enterprises, owned by petitioner Cipriano, is engaged in the rustproofing of

vehicles, under the style Motobilkote. The private respondent, through an employee brought
his car to the petitioners shop. However, a fire broke out at the Lambat restaurant,t which the
petitioner also owned, adjoining his Mobilkote rustproofing shop. The fire destroyed both the
shop and the restaurant, including private respondents car.

MACLIN sent a letter to petitioner, demanding reimbursement for the value of the
car. In reply, petitioner denied liability on the ground that the fire was a fortuitous event (Art.
1174 and 1262, NCC), prompting private respondent to bring this suit for the value of its
vehicle and for damages. Private respondent argued that petitioner was liable for the loss of the
car even if it was caused by a fortuitous event. It contended that the nature of petitioners

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business required him to assume the risk because under P.D. No. 1572, petitioner was required
to insure his property as well as those of his customers.

RTC ruled in favor of MACLIN stating that the failure of defendant to comply with
P.D. No. 1572 is in effect a manifest act of negligence which renders defendant liable for the
loss of the car even if the same was caused by fire, and that rustproffing is definitely
covered by P.D. No. 1572. Since petitioner did not register his business and insure it, he
must bear the cost of loss of his customers. CA affirmed the RTCs decision.

Issue:

Whether petitioners failure to abide by PD 1572 constitutes negligence

Ruling:

Yes. The Court held that a violation of a statutory duty is negligence per se. It ruled that
where the very injury which was intended to be prevented by the ordinance has happened,
non-compliance with the ordinance was not only a negligent act but also the proximate cause.

Indeed, the existence of a contract between petitioner and private respondent does not
bar a finding of negligence under the principles of quasi-delict. Petitioners negligence is the
source of his obligation. He is not being held liable for breach of his contractual obligation
due to negligence but for his negligence in not complying with a duty imposed on him by
law. It is therefore immaterial that the loss occasioned to private respondent was due to a
fortuitous event, since it was petitioners negligence in not insuring against the risk which was
the proximate cause of the loss.

PHILIPPINE NATIONAL BANK VS SPS CHEAH CHEE CHONG and

OFELIA CAMACHO CHEAH G.R NO. 170865;
SPS CHEAH CHEE CHONG VS PNB G.R NO 17092

Facts:

Adelina Guarins friend, Filipina Tuazon, approached her to ask if she could have
her check cleared and encashed for a service fee of 2.5%. In turn, Adelina approached Ofelia
Cheah and agreed to accommodate Filipinas request since she has a joint dollar savings
account with her husband, Cheah Chee Chong with PNB Buendia Branch.
The parties went to PNB Loans Department wherein they met Garin, PNBs
Division Chief, who informed about the 15- day clearing period. On Nov. 4, 1992 Ofelia
deposited the said check. PNB sent the check for clearing through Philadelphia National
Banck which had temporarily credited the same to PNBs account as of Nov.6, 1992. On the
same day, Garin, PNBs Division Chief, informed Ofelia that the check has already been
cleared and the same was credited to the account of Sps Cheah. He further allowed the
withdrawal of the amount on Nov 17-18, 1992. Filipina Tuazon, thereafter, received the
proceeds.

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However, the Cable Division of PNB Head Office received a message from
Philadelphia informing PNB for the return of the check for insufficiency of funds. Upon
demand by PNB Buendia to return the money withrdrawn, Ofelia contacted Filipina to get
the money back but the same has been given to several people who asked for the checks
encashment.
PNB filed a complaint against the spouses and froze their peso and dollar deposits.
RTC ruled in favor of the PNB and held the spouses Cheah guilty of contributory
negligence. The CA declared both parties equally negligent and should suffer and shoulder
the loss.

Issue:

Whether both parties are equally negligent, hence, should suffer the loss.

Held:

Yes. PNBs act of releasing the proceeds of the check prior to the lapse of the 15-day
clearing was the proximate cause. The disregard of its own banking policy amounts to gross
negligence. It bears stressing that the diligence required is more than that of a good father
of a family. The highest degree of diligence is expected. PNB failed to do its duty in
exercising extraordinary diligence and reasonable business practice.
The Spouses Cheah is guilty of contributory negligence and hence should suffer the
loss. Contributory negligence is conduct on the part of the injured party; contributing as a
legal cause to the harm he has suffered which falls below the standard to which he is
required to conform for its protection. The fact that the check was cleared only eight
banking days, contrary to what Garin had informed them, they should have verified the
hastiness of the transaction considering that they are the ones would be put at risk and not
the accommodated party.
Hence, the Court concurs with the findings of the CA that PNB and spouses Cheah are
equally negligent and should suffer the loss.

PHILTRANCO SERVICE ENTERPRISES, INC. VS FELIX PARAS AND

INLANDTRAILWAYS, INC., AND HON. COURT OF APPEALS
G.R. No. 161909, April 25, 2012

Facts:

Respondent Felix Paras is one of the passengers injured from an accident met by
the bus operated by Inland Trail ways and a bus operated by petitioner Philtranco Service.
Felix went through number operations and was unable to obtain sufficient financial
assistance from Inland for the costs of his operations, hospitalization, doctors fees and
other miscellaneous expenses, thus, on 31 July 1989; Paras filed a complaint for damages
based on breach of contract of carriage against Inland. On 02 March 1990, upon leave of
court, Inland filed a third-party complaint against Philtranco and Apolinar Miralles. In this
third-party complaint, inland, sought for exoneration of its liabilities to Paras, asserting that
the latters cause of action should be directed against Philtranco considering that the accident

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was caused by Miralles lack of care, negligence and reckless imprudence. The RTC then
rendered a decision declaring Philtranco and Apolinar liable for moral and actual damages.
The said award of damages was also affirmed by the CA. Ultimately, Philtranco questions
the validity of awarding moral damages on the ground that the basis of such award is based
on a breach of contract of carriage, which is not one of the enumeration provided by the
Civil Code.

Issue:

Whether or not the award of damages is proper.

Ruling:

Yes. Section 16, Rule 6 of the Revised Rules of Court defines a third party complaint as
a claim that a defending party may, with leave of court, file against a person not a party to
the action, called the third party defendant, for contribution, indemnification, subrogation,
or any other relief, in respect of his opponents claim.

Under this Rule, a person not a party to an action may be impleaded by the defendant
either (a) on an allegation of liability to the latter; (b) on the ground of direct liability to the
plaintiff-; or, (c) both (a) and (b). The situation in (a) is covered by the phrase "for
contribution, indemnity or subrogation;" while (b) and (c) are subsumed under the catch all
"or any other relief, in respect of his opponents claim."

The case at bar is one in which the third party defendants are brought into the
action as directly liable to the plaintiffs upon the allegation that the primary and immediate
cause as shown by the police investigation of said vehicular collision between the
above-mentioned three vehicles was the recklessness and negligence and lack of imprudence
of the third-party defendant Virgilio Esguerra y Ledesma then driver of the passenger bus.
The effects are that "plaintiff and third party are at issue as to their rights respecting the
claim and the third party is bound by the adjudication as between him and plaintiff. It is not
indispensable in the premises that the defendant be first adjudged liable to plaintiff before
the third-party defendant may be held liable to the plaintiff, as precisely, the theory of
defendant is that it is the third party defendant, and not he, who is directly liable to plaintiff.
The situation contemplated by appellants would properly pertain to situation (a) above
wherein the third party defendant is being sued for contribution, indemnity or subrogation,
or simply stated, for a defendant's "remedy over".

MERCURY DRUG CORPORATION VS SEBASTIAN M. BAKING

G.R. No. 156037 May 28, 2007

Facts:
Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy for a medical
check-up. On the following day, after undergoing an ECG, blood, and hematology
examinations and urinalysis, Dr. Sy found that respondents blood sugar and triglyceride
were above normal levels. Dr. Sy then gave respondent two medical prescriptions,
Diamicron for his blood sugar and Benalize tablets for his triglyceride. Respondent then
proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to buy the prescribed
medicines. However, the saleslady misread the prescription for Diamicron as a prescription
for Dormicum. Thus, what was sold to respondent was Dormicum, a potent sleeping tablet.
Unaware that what was given to him was the wrong medicine, respondent took one pill of
Dormicum on three consecutive days.

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On November 8 or on the third day he took the medicine, respondent figured in a

vehicular accident. The car he was driving collided with the car of one Josie Peralta.
Respondent fell asleep while driving. He could not remember anything about the collision
nor felt its impact. Suspecting that the tablet he took may have a bearing on his physical and
mental state at the time of the collision, respondent returned to Dr. Sys clinic. Upon being
shown the medicine, Dr. Sy was shocked to find that what was sold to respondent was
Dormicum, instead of the prescribed Diamicron. Thus, on April 14, 1994, respondent filed
with the Regional Trial Court (RTC) a complaint for damages against petitioner. After
hearing, the trial court rendered its Decision dated March 18, 1997 in favor of respondent.
On appeal, the Court of Appeals, in its Decision, affirmed in toto the RTC judgment.
Petitioner filed a motion for reconsideration but it was denied, hence, this petition.

Issues:

Whether petitioner was negligent, and if so, whether such negligence was the
proximate cause of respondents accident.

Ruling:
Article 2176 of the New Civil Code provides: Art. 2176. Whoever by act or omission
causes damage to another, there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this Chapter. To sustain a
claim based on the above provision, the following requisites must concur: (a) damage
suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of
cause and effect between the fault or negligence of the defendant and the damage incurred
by the plaintiff.

There is no dispute that respondent suffered damages. It is generally recognized that

the drugstore business is imbued with public interest. Inasmuch as the matter of negligence
is a question of fact, we defer to the findings of the trial court affirmed by the Court of
Appeals. Obviously, petitioners employee was grossly negligent in selling to respondent
Dormicum, instead of the prescribed Diamicron. Considering that a fatal mistake could be a
matter of life and death for a buying patient, the said employee should have been very
cautious in dispensing medicines. She should have verified whether the medicine she gave
respondent was indeed the one prescribed by his physician. The care required must be
commensurate with the danger involved, and the skill employed must correspond with the
superior knowledge of the business which the law demands. Petitioner contends that the
proximate cause of the accident was respondents negligence in driving his car.

NATIONAL POWER CORPORATION VS HEIRS OF NOBLE CASIONAN

G.R. No. 165969 November 27, 2008

Facts:

In the 1970s, NPC installed high-tension electrical transmission lines of 69 kilovolts

traversing the trail leading to Sangilo, Itogon. Eventually, some lines sagged, thereby
reducing their distance from the ground to only about 8-10 ft. This posed as a threat to
passersby who were exposed to the danger of electrocution. Nineteen-year-old Noble
Casionan worked as a pocket miner. In 1995, Noble and his co-pocket miner Melchor
Jimenez were at Dalicno. Noble walked ahead as they passed through the trail underneath
the NPC high-tension lines on their way to their work place. As Noble was going uphill and
turning left on a curve, the tip of the bamboo pole that he was carrying touched one of the
dangling high-tension wires. Melchor narrated that he heard a buzzing sound for only about

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a second or two, then he saw Noble fall to the ground. Melchor rushed to him and shook
him, but Noble was already dead.

A post-mortem examination by the municipal health officer determined the

cause of death to be cardiac arrest, secondary to ventricular fibulation, secondary to
electrocution. Nobles parents filed a claim for damages against NPC. NPC denied being
negligent in maintaining the safety of the lines, averring that signs were installed but they
were stolen by children, and that excavations were made to increase the clearance from the
ground but some poles sank due to pocket mining in the area. NPC witnesses testified that
the cause of death could not have been electrocution since Noble did not suffer extensive
burns. NPC argued that if Noble did die by electrocution, it was due to his own negligence.

RTC decided in favor of Nobles parents. RTC observed that NPC witnesses were
biased because all but one were employees of NPC, and they were not actually present at the
time of the accident. RTC found NPC negligent since the company has not acted upon the
requests and demands made by the community leaders since 1991. CA affirmed RTC with
modificationaward of moral damages was reduced from 100k to 50k, and award of attorney
fees was disallowed since the reason for the award was not expressly stated in the decision.

Issue:

WON there was contributory negligence on the part of Noble.

Ruling:

NO; hence, NPC is not entitled to a mitigation of its liability. Negligence is the
failure to observe, for the protection of the interest of another, that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other person
suffers injury. Contributory negligence is conduct on the part of the injured party,
contributing as a legal cause to the harm he has suffered, which falls below the standard
which he is required to conform for his own protection. There is contributory negligence
when the partys act showed lack of ordinary care and foresight that such act could cause
him harm or put his life in danger. It is an 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.

The underlying precept is that a plaintiff who is partly responsible for his own injury
should not be entitled to recover damages in full but must bear the consequences of his own
negligence. NCC 2179 provides that liability will be mitigated in consideration of the injured
partys contributory negligence. Damages awarded to Nobles unearned income of 720k;
exemplary damages of 50k, since there is gross negligence and moral damages of 50k.

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Allied Banking Corporation v. Bank of the Philippine Islands

G.R. No. 188363, February 27, 2013

Facts:

On October 10, 2002, a check in the amount of P1,000,000.00 payable to "Mateo

Mgt. Group International" (MMGI) was presented for deposit and accepted at petitioner's
(Allied Bank) Kawit Branch. The check, post-dated "Oct. 9, 2003", was drawn against the
account of Marciano Silva, Jr. (Silva) with respondent BPI Bel-Air Branch. Upon receipt,
petitioner sent the check for clearing to respondent through the Philippine Clearing House
Corporation (PCHC). The check was cleared by respondent and petitioner credited the
account of MMGI with P1,000,000.00. On October 22, 2002, MMGIs account was closed
and all the funds therein were withdrawn. A month later, Silva discovered the debit of
P1,000,000.00 from his account. In response to Silvas complaint, respondent credited his
account with the aforesaid sum. Petitioner filed a complaint before the Arbitration
Committee, asserting that respondent should solely bear the entire face value of the check
due to its negligence in failing to return the check to petitioner within the 24-hour

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reglamentary period as provided in Section 20.1of the Clearing House Rules and Regulations
(CHRR) 2000. In its Answer with Counterclaims, respondent charged petitioner with gross
negligence for accepting the post-dated check in the first place. It contended that petitioners
admitted negligence was the sole and proximate cause of the loss.

Issue:

Does the Doctrine of Last Clear Chance apply in this case?

Ruling:

YES. In this case, the evidence clearly shows that the proximate cause of the
unwarranted encashment of the subject check was the negligence of respondent who cleared
a post-dated check sent to it thru the PCHC clearing facility without observing its own
verification procedure. As correctly found by the PCHC and upheld by the RTC, if only
respondent exercised ordinary care in the clearing process, it could have easily noticed the
glaring defect upon seeing the date written on the face of the check "Oct. 9, 2003".
Respondent could have then promptly returned the check and with the check thus
dishonored, petitioner would have not credited the amount thereof to the payees account.
Thus, notwithstanding the antecedent negligence of the petitioner in accepting the
post-dated check for deposit, it can seek reimbursement from respondent the amount
credited to the payees account covering the check.

PNR v. Ethel Bunty

G.R. No. 169891, November 2, 2006

Facts:

Ethel Bruntys late daughter, Rhonda Brunty, an American citizen, visited Philippines
sometime in January 1980 and prior to her departure, she and her Filipino host Juan Manuel
M.Garcia, traveled to Baguio City aboard a Mercedes Benz sedan with plate number FU
799,driven by Rodolfo L. Mercelita. It was about 12:00 midnight, January 25, 1980. By then,
PNR Train No. T-71, driven by Alfonso Reyes, was on its way to Tutuban, Metro Manila4
as it had left the La Union station at 11:00 p.m., January 24, 1980.By 2:00 a.m., Rhonda,
Garcia and Mercelita were already approaching the railroad crossing at Barangay Rizal,
Moncada, Tarlac. Mercelita, driving at approximately 70 km/hr, drove past a vehicle,
unaware of the railroad track up ahead and that they were about to collide with PNR Train
No. T-71. Mercelita was instantly killed when the Mercedes Benz smashed into the train; the

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two other passengers suffered serious physical injuries. A James Harrow brought Rhonda to
the Central Luzon Doctors Hospital in Tarlac, where she was pronounced dead after ten
minutes from arrival. Garcia, who had suffered severe head injuries, was brought via
ambulance to the same hospital. He was transferred to the Manila Doctors Hospital, and
later to the Makati Medical Center for further treatment.

Ethel Brunty sent a demand letter to PNR to ask indemnity for the death of her
daughter, but PNR did not respond. As a result, she and Garcia filed a complaint in the RTC
Manila (later tried by Br. 20, Manila RTC). They alleged that it was PNRs failure to provide
necessary equipment at the railroad crossing in Brgy. Rizal, Moncada. Tarlac which was
proximate and direct cause of Garcias injuries and the death of Rhonda.
Meanwhile, contrary to Brunty and Garcias allegations, PNR stated that it
was not negligent in selection and supervision of its employees(using the diligence of a good
father doctrine) and it was Mercelitas negligence which was the immediate and proximate of
the accident. It also stated that it had the right of way, and has no legal duty to put a bar or
red light signal at the crossing. Moreover, it had adequate, visible, and clear warning signs
strategically posted on the sides of the road before the railroad crossing.

The RTC ruled in favor of Brunty and was affirmed by the Court of Appeals. Hence,
PNR appealed to the Supreme Court.

Issue:

Who was guilty of negligence between the parties involved which

resulted in the unfortunate accident?

Ruling:

PNR was guilty of negligence. The Supreme Court affirmed with modifications the
findings of the Manila RTC and Court of Appeals. It held that PNR was indeed negligent by
not providing adequate, visible, clear warnings and safety equipment: (1) absence of flagbars
or safety railroad bars; (2) inadequacy of the installed warning signals; and (3) lack of proper
lighting within the area. Actual damages were however not awarded to respondents Brunty
and Garcia, as they failed to produce evidence for such.

Marcelo Macalinao, Et Al., v. Eddie Medecielo Ong

G.R. No. 146635 December 14, 2005

Facts:

Sometime in April 1992, Sebastian instructed Macalinao, Ong and 2 other truck
helpers to deliver a heavy piece of machinery to Sebastians manufacturing plant in Angat,
Bulacan. While delivering, the Genetrons Isuzu Elf truck driven by Ong bumped the front
portion of a private jeepney. Both vehicles incurred severe damages while the passengers
sustained physical injuries as a consequence of the collision. Macalinao was brought to Sta.
Maria District Hospital for first aid treatment then to Philippine Orthopedic Center then to
Capitol Medical Center and lastly, to Philippine General Hospital due to financial
considerations. His body was paralyzed and immobilized from the neck down. He filed
against Ong and Sebastian. A criminal case for reckless imprudence resulting to
serious physical injuries was instituted but was not ensued. In November 7 1992: Macalinao
died and was substituted by his parents. The RTC ruled that Ong was negligent and

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Sebastian failed to exercise the diligence of a good father of a family in the selection and
supervision of Ong thus ordering them jointly liable to pay actual, moral, and exemplary
damages as well as civil indemnity for Macalinaos death. On appeal, the CA however
reversed the RTCs decision for lack of evidence.

Issue:

Whether Ong may be held liable under the doctrine of Res Ipsa Loquitur

Ruling:

YES. The photographs clearly shows that the road where the mishap occurred is
marked by a line at the center separating the right from the left lane. Since respondents failed
to refute the contents of the police blotter, the statement therein that the Isuzu truck hit the
private jeepney and not the other way around is deemed established. While not constituting
direct proof of Ongs negligence, the foregoing pieces of evidence justify the application of
res ipsa loquitur, a Latin phrase which literally means the thing or the transaction speaks for
itself.

Res ipsa loquitur recognizes that parties may establish prima facie negligence without direct
proof, thus, it allows the principle to substitute for specific proof of negligence permits the
plaintiff to present along with proof of the accident, enough of the attending circumstances
to invoke the doctrine, create an inference or presumption of negligence and thereby place
on the defendant the burden of proving that there was no negligence on his part based on
the theory that defendant in charge of the instrumentality which causes the injury either
knows the cause of the accident or has the best opportunity of ascertaining it while the
plaintiff has no such knowledge, and is therefore compelled to allege negligence in general
terms and rely upon the proof of the happening of the accident in order to establish
negligence can be invoked only when under the circumstances, direct evidence is absent and
not readily available grounded upon the fact that the chief evidence of the true cause,
whether culpable or innocent, is practically accessible to the defendant but inaccessible to
the injured person.

RAMOS VS CA 321 SCRA 584

Facts:

Erlinda Ramos underwent a surgical procedure to remove stone from her gall
bladder (cholecystectomy). They hired Dr. Hosaka, a surgeon, to conduct the surgery at
the De Los Santos Medical Center (DLSMC). Hosaka assured them that he would find a
good anesthesiologist. But the operation did not go as planned, Dr. Hosaka arrived 3
hours late for the operation, Dra. Gutierrez, the anesthesiologist botched the
administration of the anesthesia causing Erlinda to go into a coma and suffer brain
damage. The botched operation was witnessed by Herminda Cruz, sister in law of
Erlinda and Dean of College of Nursing of Capitol Medical Center.

The family of Ramos (petitioners) sued the hospital, the surgeon and the
anesthesiologist for damages. The petitioners showed expert testimony showing that
Erlinda's condition was caused by the anesthesiologist in not exercising reasonable care

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in intubating Erlinda. Eyewitnesses heard the anesthesiologist saying Ang hirap

ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan.

Diagnostic tests prior to surgery showed that Erlinda was robust and fit to undergo
surgery.

The RTC held that the anesthesiologist ommitted to exercise due care in intubating
the patient, the surgeon was remiss in his obligation to provide a good
anesthesiologist and for arriving 3 hours late and the hospital is liable for the
negligence of the doctors and for not cancelling the operation after the surgeon failed
to arrive on time. The surgeon, anesthesiologist and the DLSMC were all held jointly and
severally liable for damages to petitioners. The CA reversed the decision of the Trial
Court.

Issues:

Whether or not the private respondents were negligent and thereby caused the
comatose condition of Ramos.

Ruling:

Yes, private respondents were all negligent and are solidarily liable for the damages.
Private respondents were not able to disprove the presumption of negligence on their
part in the care of Erlinda and their negligence was the proximate cause of her
condition. One need not be an anesthesiologist in order to tell whether or not the
intubation was a success. The Supreme Court also found that the anesthesiologist only
saw Erlinda for the first time on the day of the operation which indicates unfamiliarity
with the patient and which is an act of negligence and irresponsibility.

The head surgeon, Dr. Hosaka was also negligent. He failed to exercise the proper
authority as the captain of the ship in determining if the anesthesiologist observed the
proper protocols. Also, because he was late, he did not have time to confer with the
anesthesiologist regarding the anesthesia delivery.

The hospital failed to adduce evidence showing that it exercised the diligence of a
good father of the family in hiring and supervision of its doctors (Art. 2180). The hospital
was negligent since they are the one in control of the hiring and firing of their
consultants. While these consultants are not employees, hospitals still exert
significant controls on the selection and termination of doctors who work there which is
one of the hallmarks of an employer-employee reationship. Thus, the hospital was
allocated a share in the liability.

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JARCIA JR VS PEOPLE 666 SCRA 336

Facts:

Private complainant Belinda Santiago lodged a complaint with the National Bureau
of Investigation against the petitioners, Dr. Emmanuel Jarcia, Jr. and Dr. Marilou Bastan,
for their alleged neglect of professional duty which caused her son, Roy Alfonso
Santiago, to suffer serious physical injuries.

Upon investigation, the NBI found that Roy Jr. was hit by a taxicab; that he was
rushed to the Manila Doctors Hospital for an emergency medical treatment; that an
X-ray of the victims ankle was ordered; that the X-ray result showed no fracture as read
by Dr. Jarcia; that Dr. Bastan entered the emergency room and, after conducting her
own examination of the victim, informed Mrs. Santiago that since it was only the ankle
that was hit, there was no need to examine the upper leg. despite Mrs. Santiago's
protest the doctors did not examine the upper portion of the leg of Roy. that eleven (11)

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days later, Roy Jr. developed fever, swelling of the right leg and misalignment of the
right foot; that Mrs. Santiago brought him back to the hospital; and that the X-ray
revealed a right mid-tibial fracture and a linear hairline fracture in the shaft of the bone.

After trial and applying the doctrine of res ipsa loquitor the RTC found petitioners to
be guilty of simple negligence. The decision was affirmed in toto by the CA.

Issues:

Whether of not the petitioner physicians are negligent, hence liable for damages.

Held:

Petitioners were negligent in their obligation. It was proven that a thorough
examination was not performed on Roy Jr since as residents on duty at the emergency
room, Dr. Jarcia and Dr. Bastan were expected to know the medical protocol in treating
leg fractures and in attending to victims of car accidents.

Thus, simple negligence is resent if: that there is lack of precaution on the part of
the offender, and that the damage impending to be caused is not immediate or the
danger is not clearly manifest.

Dr. Jarcia and Dr. Bastan, explained the court, cannot pass on the liability to the taxi
driver who hit the victim. It may be true that the actual, direct, immediate, and
proximate cause of the injury of Roy Jr. was the vehicular accident when he was hit by a
taxi. The petitioners, however, cannot simply invoke such fact alone to excuse
themselves from any liability. If this would be so, doctors would have a ready defense
should they fail to do their job in attending to victims of hit-and-run, maltreatment, and
other crimes of violence in which the actual, direct, immediate, and proximate cause of
the injury is indubitably the act of the perpetrator/s.

In failing to perform an extensive medical examination to determine the extent of
Roy Jr.s injuries, Dr. Jarcia and Dr. Bastan were remiss of their duties as members of the
medical profession. Assuming for the sake of argument that they did not have the
capacity to make such thorough evaluation at that stage, they should have referred the
patient to another doctor with sufficient training and experience instead of assuring him
and his mother that everything was all right.

Petitioners were absolved in the criminal charge for the reason that a reasonable
doubt existed but the are liable for damages. There is no direct evidence proving that it
was their negligence that caused the suffering of Roy.

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BONTILAO VS GERONA 630 SCRA 561

Facts:

On December 28, 1991, respondent Dr. Carlos Gerona, an orthopedic surgeon at
the Vicente Gullas Memorial Hospital, treated petitioners son, 8 y/o Allen Roy Bontilao,
for a fractured right wrist. Respondent administered a U-spint and immobilized Allens
wrist with a cast, then sent Allen home. On June 4, 1992, Alen re-fractured the same
wrist and was brought back to the hospital. The x-ray examination showed a complete
fractured and displacement bone, with the fragments overlapping each other.
Respondent performed a closed reduction procedure, with Dr. Vicente Jabagat as the
anesthesiologist. Then he placed Allens arm in a plaster cast to immobilize it. He
allowed Allen to go home after the post reduction x-ray showed that the bones were
properly aligned, but advised Allens mother, petitioner Sherlina Bontilao, to bring Allen
back for re-tightening of the cast not later than June 15, 1992. Allen was however, only
brought back after the said date. By then, because the cast had not be re-tightened, a

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rotational deformity had developed in Allens arm. The x-ray examination showed that
the deformity was caused by a re-displacement of the bone fragments, so it was agreed
that an open reduction surgery will be conducted on June 24, 1992 by the respondent,
again with Dr. Jabagat as the anesthesiologist. On the said date, Sherlina was allowed to
observe the operation behind a glass panel. Dr. Jabagat failed to intubate the patient
after 5 attempts so anesthesia was administered through a gas mask. Respondent asked
Dr. Jabagat if the operation should be postponed given the failure to intubate, but Dr.
Jabagat said that it was alright to proceed. Respondent verified that Allen was breathing
properly before proceeding with the surgery. As respondent was about to finish the
suturing, Sherlina decided to go out of the operating room to make a telephone call and
wait for her son. Later, she was informed that her son died on the operating table. The
cause of death was asphyxia due to the congestion and edema of the epiglottis. Hence,
a criminal, administrative and civil case was filed by the parents of Allen against the
doctors for the negligence that caused Allens death.

Issue:

Whether or not respondent is liable for medical negligence due to the death of
Allen.

Ruling:

No. The trial court erred in applying the doctrine of res ipsa liquitor to pin liability
on respondent for Allens death. Res ipsa liquitor is a rebuttable presumption or
influence that the defendant was negligent. The presumption only arises upon proof
that the instrumentality causing injury was in the defendants exclusive control, and that
the accident was one which ordinarily does not happen in the absence of negligence. It
is a rule of evidence whereby negligence of the alleged wrong does may be inferred
from the mere fact that the accident happened, provided that the character of the
accident and circumstances attending it lead reasonably to the belief that in the
absence of negligence it would not have occurred and that the thing which caused injury
is shown to have been under the management and control of the alleged wrong doer.

Res ipsa liquitor is not a rigid or ordinary doctrine to be perfunctorily used but a rule
to be cautiously applied defending upon the circumstances of each case. In malpractice
case, the doctrine is generally restricted to situations where a layman is able to say, as a
matter of common knowledge and observation, that the consequence of professional
care were not as such as would ordinarily have followed if due care had been exercised.

Moreover, we note that in the instant case, the instrument which caused the injury
or damage was not even within respondents exclusive control and management as Dr.
Jabagat was exclusively in control and management of the anesthesia and endotracheal
tube. The doctrine of res ipsa liquitor allows the mere existence of an injury to justify a
presumption of negligence or the part of the person who controls the instrument
causing the injury, provided that the following requisites concur:

The accident is of a kind which ordinarily does not occur in the absence of
someones negligence;

It is caused by an instrumentality within the exclusive control of the defendant or
co-defendants;

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

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NATIONAL POWER CORPORATION,

Petitioner, vs. HEIRS OF MACABANGKIT SANGKAY, namely: CEBU,
BATOWA-AN, SAYANA, NASSER, MANTA, EDGAR, PUTRI , MONGKOY*, and
AMIR, all surnamed MACABANGKIT, Respondents.
G.R. No. 165828 August 24, 2011

Facts:

NPC undertook the Agus River Hydroelectric Power Plant Project in the 1970s to
generate electricity for Mindanao. The project included the construction of several
underground tunnels to be used in diverting the water flow from the Agus River to the
hydroelectric plants.

The respondents Heirs of Macabangkit, as the owners of land with an area of 221,573
square meters situated in Ditucalan, Iligan City, sued NPC in the RTC for the recovery of
damages and of the property, with the alternative prayer for the payment of just

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compensation. They alleged that the underground tunnel had been constructed without their
knowledge and consent.

In its answer with counterclaim, NPC countered that the Heirs of Macabangkit had no
right to compensation under section 3(f) of Republic Act No. 6395, under which a mere legal
easement on their land was established; that their cause of action, should they be entitled to
compensation, already prescribed due to the tunnel having been constructed in 1979.

Issue:

Whether the Heirs of Macabangkits right to claim just compensation had prescribed
under section 3(i) of Republic Act No. 6395, or, alternatively, under Article 620 and Article
646 of the Civil Code.

Ruling:

No. Five-year prescriptive period under Section 3(i) of Republic Act No. 6395 does not
apply to claims for just compensation.

The court ruled that the prescriptive period provided under Section 3(i) of Republic
Act No. 6395 is applicable only to an action for damages, and does not extend to an action to
recover just compensation like this case. Consequently, NPC cannot thereby bar the right of
the Heirs of Macabangkit to recover just compensation for their land.

The action to recover just compensation from the State or its expropriating agency
differs from the action for damages. The former, also known as inverse condemnation, has the
objective to recover the value of property taken in fact by the governmental defendant, even
though no formal exercise of the power of eminent domain has been attempted by the taking
agency. Just compensation is the full and fair equivalent of the property taken from its owner
by the expropriator. The measure is not the takers gain, but the owners loss. The word just is
used to intensify the meaning of the word compensation in order to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full, and
ample. On the other hand, the latter action seeks to vindicate a legal wrong through damages,
which may be actual, moral, nominal, temperate, liquidated, or exemplary. When a right is
exercised in a manner not conformable with the norms enshrined in Article 19 and like
provisions on human relations in the Civil Code, and the exercise results to the damage of
another, a legal wrong is committed and the wrongdoer is held responsible.

SOLID HOMES, INC., petitioner, vs. SPOUSES ANCHETA K. TAN and

CORAZON DE JESUS TAN, respondents.
G.R. Nos. 145156-57 July 29, 2005

Facts:
Petitioner Solid Homes, Inc., sold to the spouses Joe Uy and Myrna Uy a subdivision
lot which thereafter was registered in the name of the Uys. The spouses Uy sold the same lot to
herein respondents. From then on, respondents visited their property a number of times, only
to find out the sad state of development thereat. In short, there has been no development at
all.
The respondents, in a letter dated December 18, 1995, demanded petitioner to provide
the needed utility systems and clear the area of squatters and other obstructions and to enable
them to start the construction of their house thereon and to allow other lot owners in the area
a full access to and peaceful possession of their respective lots.
Having received no reply from petitioner, respondents filed with the Field Office of
the Housing and Land Use Regulatory Board (HLURB), NCR a complaint for specific

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performance and damages which the Housing and Land Use Arbiter, in a decision rendered
judgment in favor of the respondents by directing petitioner to perform its obligation to
provide subdivision facilities in the subject premises and to rid the premises of squatters and to
pay complainants.
Dissatisfied, petitioner went on appeal to the HLURB Board of Commissioners,
which, in a decision affirmed that of the Arbiter. The petitioner then elevated the case to the
Office of the President (O.P.), which also affirmed with modification the appealed decision of
the HLURB Board of Commissioners.
Respondents filed a motion for partial reconsideration of the aforementioned
decision, praying for the deletion of that portion thereof giving petitioner the option of merely
paying them the purchase price with interest. Respondents argued that it would be more in
accord with equity and fair play if they will be paid the fair market value of the lot in question
and not merely its purchase price.
Issue:
Whether or not in the event respondents opt to rescind the contract, should petitioner
pay them merely the price they paid for the lot plus interest or the current market value
thereof.
Ruling:
No. The court held that a literal application of any part of a statute is to be
rejected if it will operate unjustly, lead to absurd results, or contradict the evident
meaning of the statute taken as a whole. Statutes should receive a sensible
construction, such as will give effect to the legislative intention and so as to avoid an
unjust or an absurd conclusion.
Indeed, there would be unjust enrichment if respondents Solid Homes, Inc. & Purita
Soliven are made to pay only the purchase price plus interest. It is definite that the value of the
subject property already escalated after almost two decades from the time the petitioner paid
for it. Equity and justice dictate that the injured party should be paid the market value of the
lot, otherwise, respondents Solid Homes, Inc. & Purita Soliven would enrich themselves at the
expense of herein lot owners when they sell the same lot at the present market value. Surely,
such a situation should not be countenanced for to do so would be contrary to reason and
therefore, unconscionable. Over time, courts have recognized with almost pedantic adherence
that what is inconvenient or contrary to reason is not allowed in law.

BANCO FILIPINO SAVINGS AND MORTGAGE BANK, vs. THE HON.

COURT OF APPEALS, and CALVIN & ELSA ARCILLA,
G.R. No. 129227. May 30, 2000

Facts:

Elsa Arcilla and her husband, Calvin Arcilla secured on three occasions, loans from
the Banco Filipino Savings and Mortgage bank in the amount of Php.107,946.00 as
evidenced by the Promissory Note executed by the spouses in favor of the said bank. To
secure payment of said loans, the spouses executed Real Estate Mortgages in favor of the
appellants (Banco Filipino) over their parcels of land. The appellee spouses failed to pay
their monthly amortization to appellant. On September 2, 1985 the appellees filed a
complaint for Annulment of the Loan Contracts, Foreclosure Sale with Prohibitory and
Injunction which was granted by the RTC. Petitioners appealed to the Court of Appeals,
but the CA affirmed the decision of the RTC.

Issue:

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Whether or not the CA erred when it held that the cause of action of the private
respondents accrued on October 30, 1978 and the filing of their complaint for annulment of
their contracts in 1085 was not yet barred by the prescription

Ruling:

The court held that the petition is unmeritorious. Petitioners claim that the action of
the private respondents have prescribed is bereft of merit. Under Article 1150 of the Civil
Code, the time for prescription of all kinds of action where there is no special provision
which ordains otherwise shall be counted from the day they may be brought. Thus the
period of prescription of any cause of action is reckoned only from the date of the cause of
action accrued. The period should not be made to retroact to the date of the execution of
the contract, but from the date they received the statement of account showing the increased
rate of interest, for it was only from the moment that they discovered the petitioners
unilateral increase thereof.

LAFARGE CEMENT PHILIPPINES, INC vs CONTINENTAL CEMENT

CORPORATION (CCC)
G.R. No. 155173, November 23, 2004
Facts:

On August 11, 1998, a letter of intent was executed by both parties, Lafarge and
CCC. Lafarge agreed to purchase the cement business of CCC. On October 21, 1998, they
entered into a Sale and Purchase Agreement (SPA). The petitioners, at the time of such
transactions were aware of the pending case of CCC with the Supreme Court entitled Asset
Privatization Trust (APT) v. Court of Appeals and Continental Cement Corporation. In
anticipation of the liability that the High Tribunal might adjudge against CCC, the parties,
under Clause 2 (c) of the SPA, allegedly agreed to retain from the purchase price a portion of
the contract price in the amount of P117,020,846.84 -- the equivalent of US$2,799,140. This
amount was to be deposited in an interest-bearing account in the First National City Bank of
New York (Citibank) for payment to APT. However, petitioners allegedly refused to apply
the sum to the payment to APT, after the finality of the judgment in the case of CCC.
Fearful that nonpayment to APT would result in the foreclosure, of several properties, CCC
filed before the RTC a Complaint with Application for Preliminary Attachment" against
petitioners. The Complaint prayed, that petitioners be directed to pay the "APT Retained

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Amount" referred to in Clause 2 (c) of the SPA. Petitioners moved to dismiss the Complaint
on the ground that it violated the prohibition on forum-shopping. Respondent CCC had
allegedly made the same claim it was raising in another action, which involved the same
parties and which was filed earlier before the International Chamber of Commerce. After the
trial court denied the Motion to Dismiss in its November 14, 2000 Order, petitioners
elevated the matter before the Court of Appeals.

In the meantime, to avoid being in default and without prejudice to the outcome of
their appeal, petitioners filed their Answer and Compulsory Counterclaims ad Cautelam
before the trial court. In their Answer, they denied the allegations in the Complaint. They
prayed -- by way of compulsory counterclaims against Respondent CCC, its majority
stockholder and president Gregory T. Lim, and its corporate secretary Anthony A. Mariano
-- for the sums of (a) P2,700,000 each as actual damages, (b) P100,000,000 each as exemplary
damages, (c) P100,000,000 each as moral damages, and (d) P5,000,000 each as attorney's fees
plus costs of suit.

Petitioners alleged that CCC, through Lim and Mariano, had filed the "baseless"
Complaint and procured the Writ of Attachment in bad faith. Relying on this Court's
pronouncement in Sapugayv. CA, petitioners prayed that both Lim and Mariano be held
"jointly and solidarily" liable with Respondent CCC. On behalf of Lim and Mariano who had
yet to file any responsive pleading, CCC moved to dismiss petitioners' compulsory
counterclaims on grounds that essentially constituted the very issues for resolution in the
instant Petition.

RTC ruled that the counterclaims of the petitioners against Lim and Mariano were
not compulsory, that the ruling in Sapugay was not applicable and that the petitioners
answer with counterclaims violated the procedural rules on joinder of actions.

Issue:

Whether or not the petitioners answer with counterclaims violated the procedural
rules on joinder of actions.

Held:

The procedural rules on joinder of actions were not violated. In joining Lim and
Mariano in the compulsory counterclaim, petitioners are being consistent with the solidary
nature of the liability alleged therein. The procedural rules are founded on practicality and
convenience.They are meant to discourage duplicity and multiplicity of suits.
JOSEPH SALUDAGA vs. FEU and EDILBERTO C. DE JESUS (President of FEU)
G.R. No. 179337, April 30, 2008

FACTS:

Joseph Saludaga was a sophomore law student of (FEU) when he was shot by
Alejandro Rosete, one of the security guards on duty at the school premises on August 18,
1996. Saludaga was rushed to FEU Hospital due to the wound he sustained. Meanwhile,
Rosete was brought to the police station where he explained that the shooting was accidental
and eventually released for no formal complaint was filed against him.

Saludaga thereafter filed with RTC Manila a complaint for damages against
respondents on the ground that they breached their obligation to provide students with a
safe and secure environment and an atmosphere conducive to learning.

Respondents, in turn, filed a Third-Party Complaint against Galaxy Development

and Management Corp. (Galaxy), the agency contracted by FEU to provide security services

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within its premises and Mariano D. Imperial (Imperial), Galaxy's President, to indemnify
them for whatever would be adjudged in favor of petitioner, if any; and to pay attorney's fees
and cost of the suit

ISSUE:

Whether Respondents can be vicariously liable under Article 2180 of the Civil Code.

RULING:

The Court agree with the findings of the Court of Appeals that respondents cannot be
held liable for damages under Art. 2180 of the Civil Code because respondents are not the
employers of Rosete. The latter was employed by Galaxy. The instructions issued by
respondents' Security Consultant to Galaxy and its security guards are ordinarily no more
than requests commonly envisaged in the contract for services entered into by a principal
and a security agency. They cannot be construed as the element of control as to treat
respondents as the employers of Rosete. It is settled in our jurisdiction that where the
security agency, as here, recruits, hires and assigns the work of its watchmen or security
guards, the agency is the employer of such guards or watchmen. Liability for illegal or
harmful acts committed by the security guards attaches to the employer agency, and not to
the clients or customers of such agency. As a general rule, a client or customer of a security
agency has no hand in selecting who among the pool of security guards or watchmen
employed by the agency shall be assigned to it; the duty to observe the diligence of a good
father of a family in the selection of the guards cannot, in the ordinary course of events, be
demanded from the client whose premises or property are protected by the security
guards.The fact that a client company may give instructions or directions to the security
guards assigned to it, does not, by itself, render the client responsible as an employer of the
security guards concerned and liable for their wrongful acts or omissions.

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CHILD LEARNING CENTER VS. TAGORIO

G.R. NO. 150920 NOVEMBER 25, 2005

Facts:

The complaint alleged that during the school year 1990-1991, Timothy was a Grade IV student at
Marymount School, an academic institution operated and maintained by Child Learning Center, Inc.
(CLC). In the afternoon of March 5, 1991, between 1 and 2 p.m., Timothy entered the boys comfort
room at the third floor of the Marymount building to answer the call of nature. He, however, found
himself locked inside and unable to get out. Timothy started to panic and so he banged and kicked the
door and yelled several times for help. When no help arrived he decided to open the window to call for
help. In the process of opening the window, Timothy went right through and fell down three stories.
Timothy was hospitalized and given medical treatment for serious multiple physical injuries.

An action under Article 2176 of the Civil Code was filed by respondents against the CLC, the
members of its Board of Directors, namely Spouses Edgardo and Sylvia Limon, Alfonso Cruz,
Carmelo Narciso and Luningning Salvador, and the Administrative Officer of Marymount School,
Ricardo Pilao. In its defense, CLC maintained that there was nothing defective about the locking

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mechanism of the door and that the fall of Timothy was not due to its fault or negligence. CLC further
maintained that it had exercised the due care and diligence of a good father of a family to ensure the
safety, well-being and convenience of its students.

Issue:

Whether or not Child Learning Center is liable for torts and consequently, of damages?

Ruling:

Yes. In this tort case, respondents contend that CLC failed to provide precautionary measures to
avoid harm and injury to its students in two instances: (1) failure to fix a defective door knob despite
having been notified of the problem; and (2) failure to install safety grills on the window where
Timothy fell from. The trial court found that the lock was defective on March 5, 1991. The door knob
was defective. After the incident of March 5, 1991, said door knob was taken off the door of the toilet
where Timothy was in. The architect who testified during the trial declared that although there were
standard specifications for door knobs for comfort room[s], and he designed them according to that
requirement, he did not investigate whether the door knob specified in his plans during the
construction [was] actually put in place. This is so because he did not verify whether the door knob he
specified w[as] actually put in place at the particular comfort room where Timothy was barred from
getting outside.

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

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

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HEIRS OF REDENTOR COMPLETO VS. ALBAYDA JR. 6

24 SCRA 97

Facts:

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

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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 man.

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:

1. Whether the CA erred in finding that Completo was the one who caused the
collision.
2. Whether Abiad failed to prove that he observed the diligence of a good father of
the family; and
Ruling:

1. No. 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. Article 2176 of the Civil Code provides that 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 preexisting contractual
relation between the parties, is called a quasi-delict. In this regard, the question of the
motorist's negligence is a question of fact.It was proven by a preponderance of
evidence that Completo failed to exercise reasonable diligence in driving the taxicab
because he was over-speeding at the time he hit the bicycle ridden by Albayda. Such
negligence was the sole and proximate cause of the serious physical injuries sustained
by Albayda. Completo did not slow down even when he approached the intersection
of 8th and 11th Streets of VAB. It was also proven that Albayda had the right of way,
considering that he reached the intersection ahead of Completo.

2. Yes. In the selection of prospective employees, employers are required to examine

them as to their qualifications, experience, and service records. On the other hand,
with respect to the supervision of employees, employers should formulate standard
operating procedures, monitor their implementation, and impose disciplinary
measures for breaches thereof. To establish these factors in a trial involving the issue
of vicarious liability, employers must submit concrete proof, including documentary
evidence. Abiad testified that before he hired Completo, he required the latter to
show his bio-data, NBI clearance, and drivers license. Abiad likewise stressed that
Completo was never involved in a vehicular accident prior to the instant case, and
that, as operator of the taxicab, he would wake up early to personally check the
condition of the vehicle before it is used. The protestation of Abiad to escape
liability is short of the diligence required under the law. Abiads evidence consisted

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entirely of testimonial evidence, and the unsubstantiated and self-serving testimony
of Abiad was insufficient to overcome the legal presumption that he was negligent in
the selection and supervision of his drive.

ALLIED BANKING CORP. VS. LIM SIO WAN

G.R. No. 133179 MARCH 27, 2008

Facts:
On November 14, 1983, respondent Lim Sio Wan deposited with petitioner Allied
Banking Corporation (Allied) at its Quintin Paredes Branch in Manila a money market
placement of PhP 1,152,597.35 for a term of 31 days to mature on December 15, 1983.
On December 5, 1983, a person claiming to be Lim Sio Wan called up Cristina So,
an officer of Allied, and instructed the latter to pre-terminate Lim Sio Wans money market
placement, to issue a managers check representing the proceeds of the placement, and to
give the check to one Deborah Dee Santos who would pick up the check. Later, Santos
arrived at the bank and signed the application form for a managers check to be issued.
The bank issued Managers Check No. 035669 for PhP 1,158,648.49, representing
the proceeds of Lim Sio Wans money market placement in the name of Lim Sio Wan, as
payee. The managers check was deposited in the account of Filipinas Cement Corporation
(FCC) at respondent Metropolitan Bank and Trust Co. (Metrobank), with the forged
signature of Lim Sio Wan as indorser. To clear the check and in compliance with the

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requirements of the Philippine Clearing House Corporation (PCHC) Rules and Regulations,
Metrobank stamped a guaranty on the check.
The check was sent to Allied through the PCHC. Upon the presentment of the
check, Allied funded the check even without checking the authenticity of Lim Sio Wans
purported indorsement. Thus, the amount on the face of the check was credited to the
account of FCC.
Lim Sio Wan deposited with Allied a second money market placement, upon the
maturity date of the first money market placement, Lim Sio Wan went to Allied to withdraw
it. She was then informed that the placement had been pre-terminated upon her instructions.
Allied refused to pay Lim Sio Wan, claiming that the latter had authorized the
pre-termination of the placement and its subsequent release to Santos.
Issue:
Whether or not Allied negligence was the proximate cause of the loss of Lim Sio
Wans money market placement.
Ruling:
The court ruled that Allied is liable to Lim Sio Wan. Fundamental and familiar is
the doctrine that the relationship between a bank and a client is one of debtor-creditor. Since
there was no effective payment of Lim Sio Wans money market placement, the bank still
has an obligation to pay her at six percent (6%) interest from March 16, 1984 until the
payment thereof.
We cannot, however, say outright that Allied is solely liable to Lim Sio Wan. Allied
avers that even if it had not issued the check payment, the money represented by the check
would still be lost because of Metrobanks negligence in indorsing the check without
verifying the genuineness of the indorsement thereon. The trial court correctly found Allied
negligent in issuing the managers check and in transmitting it to Santos without even a
written authorization. In fact, Allied did not even ask for the certificate evidencing the
money market placement or call up Lim Sio Wan at her residence or office to confirm her
instructions. Both actions could have prevented the whole fraudulent transaction from
unfolding. Allieds negligence must be considered as the proximate cause of the resulting
loss.

Santos could be the architect of the entire controversy. Unfortunately, since

summons had not been served on Santos, the courts have not acquired jurisdiction over her.

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SPS. BUENAVENTURA VS. APOSTOL

G.R. No. 163609 NOVEMBER 27, 2008

Facts:
On February 5, 1989, Mayor Miguel of Koronadal, South Cotabato was on board
the Isuzu pick-up truck driven by Fidel Lozano, an employee of the Municipality of
Koronadal. The pick-up truck was registered under the name of Rodrigo Apostol, but it was
then in the possession of Ernesto Simbulan. Lozano borrowed the pick-up truck from
Simbulan to bring Miguel to Buayan Airport at General Santos City to catch his Manila
flight. The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then crossing
the National Highway in South Cotabato. The intensity of the collision sent Marvin some 50
meters away from the point of impact, a clear indication that Lozano was driving at a very
high speed at the time of the accident. Marvin sustained severe head injuries. Despite
medical attention, Marvin expired six (6) days after the accident.

Issues:

1. May a municipal mayor be held solidarily liable for the negligent acts of the driver
assigned to him

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2. May an LGU be held liable for the tortuous act of a government employee.

Ruling:

1. It is uncontested that Lozano was employed as a driver by the municipality. That

he was subsequently assigned to Mayor Miguel during the time of the accident is of no
moment. The Municipality of Koronadal remains to be Lozanos employer notwithstanding
Lozanos assignment to Mayor Miguel. Even assuming arguendo that Mayor Miguel had
authority to give instructions or directions to Lozano, he still cannot be held liable. In
Benson v. Sorrell, the New England Supreme Court ruled that mere giving of directions to
the driver does not establish that the passenger has control over the vehicle. Neither does it
render one the employer of the driver. Mayor Miguel was neither Lozanos employer nor the
vehicles registered owner. There existed no causal relationship between him and Lozano or
the vehicle used that will make him accountable for Marvins death. Mayor Miguel was a
mere passenger at the time of the accident.

2. The municipality may not be sued because it is an agency of the State engaged in
governmental functions and, hence, immune from suit. This immunity is illustrated in
Municipality of San Fernando, La Union v. Firme, where the Court held that municipal
corporations are suable because their charters grant them the competence to sue and be
sued. Nevertheless, they are generally not liable for torts committed by them in the discharge
of governmental functions and can only be held answerable only if it can be shown that they
were acting in proprietary capacity. In permitting such entities to be sued, the State merely
gives the claimant the right to show that the defendant was not acting in governmental
capacity when the injury was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot recover.
Liability attaches to the registered owner, the negligent driver and his direct employer.
Settled is the rule that the registered owner of a vehicle is jointly and severally liable with the
driver for damages incurred by passengers and third persons as a consequence of injuries or
death sustained in the operation of said vehicles. Regardless of who the actual owner of the
vehicle is, the operator of record continues to be the operator of the vehicle as regards the
public and third persons, and as such is directly and primarily responsible for the
consequences incident to its operation.

ALMIREZ VS. INFINITE LOOP TECHNOLOGY CORPORATION

G.R. No. 162401 JANUARY 31, 2006

Facts:
Petitioner Corazon Almirez was hired by respondent Infinite Loop Technology
Corporation (Infinite Loop) to be a Refinery Senior Process Design Engineer for a specific
project starting October 18, 1999 with a guaranty of 12 continuous months of service or
until a mutually agreed date. However, Almirez was later on suspended. Hence, she filed an
action before the National Labor Relations Commission (NLRC) against Infinite Loop and
its General Manager/President/co-petitioner Edwin R. Rabino on the ground of breach of
contract of employment.
Both the Labor Arbiter and the NLRC ruled that there is an existing
employer-employee relationship between Almirez and Infinite Loop since the latter exercises
control over the means and methods used by Almirez in the performance of her duties.

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The Court of Appeals ruled that there was no existing employer-employee relationship
between the parties since Almirez was hired to render her professional service only for a
specific project.
Issue:
Whether or not there is employee-employer relationship between Almirez and
Infinite Loop.
Ruling:
To ascertain the existence of an employer-employee relationship, jurisprudence has
invariably applied the four-fold test, to wit: (1) the manner of selection and engagement; (2)
the payment of wages; (3) the presence or absence of the power of dismissal; and (4) the
presence or absence of the power of control. Of these four, the last one, the so called
"control test" is commonly regarded as the most crucial and determinative indicator of the
presence or absence of an employer-employee relationship.
Under the control test, an employer-employee relationship exists where the person
for whom the services are performed reserves the right to control not only the end achieved,
but also the manner and means to be used in reaching that end.
From the earlier-quoted scope of Almirez professional services, there is no
showing of a power of control over petitioner. The services to be performed by her specified
what she needed to achieve but not on how she was to go about it.
Contrary to the finding of the Labor Arbiter, as affirmed by the NLRC, the "Scope
of [Almirez] Professional Services" does not "show that the companys management team
exercises control over the means and methods in the performance of her duties as Refinery
Process Design Engineer." Having hired Almirez professional services on account of her
"expertise and qualifications" as Almirez herself proffers in her Position Paper, the company
naturally expected to be updated regularly of her "work progress," if any, on the project for
which she was specifically hired.
As for the designation of the payments to Almirez as "salaries," it is not
determinative of the existence of an employer-employee relationship. "Salary" is a general
term defined as "a remuneration for services given." It is the above-quoted contract of
engagement of services-letter dated September 30, 1999, together with its attachments,
which is the law between the parties. Even Almirez concedes rendering service "based on
the contract," which, as reflected earlier, is bereft of a showing of power of control, the most
crucial and determinative indicator of the presence of an employer-employee relationship.

ARNULFO C. ACEVEDO, Petitioner, vs. ADVANSTAR COMPANY INC. (ACI)

and/or FELIPE LOI, TONY JALAPADAN, Respondents
November 11, 2005 G.R. No. 157656

Facts:

ACI was engaged in the distribution and sale of various brands of liquor and alcoholic
spirits. Felipe Loi was employed as its manager and Jalapadan was one of the ACIs hired
salesmen. Under the Agreement for the Sale of Merchandise between Jalapadan and ACI,
among others, the former shall be provided with a 6-wheeler truck to facilitate the sale and
delivery of products to customers and outlets and was authorized to employ and discharge a
driver and other assistants as he deemed necessary, who would be considered his employees,
and that he alone would be liable for their compensation and actual expenses, including meals
while on duty. On August 5, 1997, Jalapadan hired Arnulfo Acebedo as driver.

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In the course of business, Jalapadan and Acebedo had several misunderstandings until in
October 10, 1998 Acebedo signed a letter, using his thumb mark, informing Jalapadan that he
is resigning effective that date. On October 26, 1998, Acevedo filed a complaint against
Jalapadan, ACI and its general manager, Felipe Loi, for illegal dismissal and for the recovery of
back wages and other monetary benefits.

Issue:

Whether or not Jalapadan, and not ACI and Loi, was the employer of Acebedo.

Ruling:

No, because there has been an employer-employee relationship between respondent ACI and
complainant Arnulfo Acevedo, with respondent Tony Jalapadan as agent of the respondent
corporation arising from their relationship of labor-only contracting. The agreement between
the respondents cannot prevail over Articles 106 and 107 of the Labor Code of the
Philippines.

The principal employer becomes solidarily liable with the labor-only contractor for all the
rightful claims of the employees. The labor-only contractor is considered merely as an agent of
the employer, the employer having been made, by law, responsible to the employees of the
labor-only contractor as if such employees had been directly employed by it.

CAYAO-LASAM, petitioners vs SPOUSES RAMOLETE, respondents

GR No. 159132 December 18, 2002

Facts:

On July 28, 1994, respondent Editha Ramolete, who was 3 months pregnant, was brought
to Lorma Medical Center (LMC) in San Fernando, La Union due to vaginal bleeding. Upon
advise of petitioner related via telephone, Editha was admitted to the LMC on the same day.

A pelvic sonogram was then conducted on Editha revealing the fetus weak cardiac
pulsation. The following day, the pelvic sonogram showed that aside from the fetus weak
cardiac pulsation, no fetal movement was also appreciated. Due to persistent and profuse
vaginal bleeding, petitioner advised her to undergo a D&C procedure. She was discharged the
following day.

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On September 16, 1994, Editha was once gain brought at the LMC, as she was suffering
from vomiting and severe abdominal pains. Editha was attended by Drs. Dela Cruz, Mayo and
Komiya. Dr. Mayo allegedly informed Editha that there was a dead fetus in the latters womb,
after Editha went laparectomy, she was found to have massive intra abdominal hemorrhage
and ruptured uterus. Thus, she had to go hysterectomy and as a result no more chance to bear
a child.

Issue:

Whether or not petitioner is liable for medical malpractice.

Ruling:

No. Medical malpractice is a particular form of negligence which consists in the failure of
a physician or a surgeon to apply in 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. In order to successfully pursue such a claim, a patient must either
prove that the physician or surgeon failed to do something which a reasonably prudent
physician or surgeon would have done, or that the physician or surgeon performed something
which a reasonably prudent physician or surgeon would not have done, and that such failure or
action caused injury to the patient.

There are four elements involved in medical negligence cases: duty, breach, injury, and
proximate cause.

The breach of the 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. Further, in as much 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 suspect the conclusion as to causation.

However, in this case, it was undisputedly established that Editha did not return for
follow-up evaluation, in defiance of the petitioners advice. This is, as found out, is the
proximate cause of the injury she sustained.

DR. PEDRO DENNIS CERENO, and DR. SANTOS ZAFE, Petitioners,

vs. COURT OF APPEALS, SPOUSES DIOGENES S. OLAVERE and FE R.
SERRANO, Respondents
G.R. No. 167366, September 26, 2012

Facts:

At 9:15 in the evening, Raymond S. Olavere, a victim of a stabbing incident was rushed to the
Bicol Regional Medical Center. The emergency room resident physician, recommended that
the patient undergo "emergency exploratory laparotomy." During that time, the hospital surgeons,
were busy operating on gunshot victim Maluly-on with the only anaesthesiologist Dr. Tatad on
duty assisting them. Just before the operation on Maluluy-on was finished, another emergency
case involving Lilia Aguila, a woman who was giving birth to triplets, was brought to the
operating room. Because they were heavily occupied, the doctors decided to defer the
operation on Raymond. They however examined Raymond and they found that the latters
blood pressure was normal and "nothing in him was significant."

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At 12:15 am, the operation on Raymong started. But while the operation was on-going,
Raymond suffered a cardiac arrest and he was pronounced dead at 2:30 A.M with his death
certificate indicating "hypovolemic shock" as the immediate cause of death.

Issue:
Whether Dr. Cereno and Dr. Zafe are guilty of gross negligence in the performance of
their duties.

Ruling:

No, the petitioners are not guilty of gross negligence.The type of lawsuit which has been
called medical malpractice or medical negligence, is that type of claim which the complainant
must prove: (1) that the health care provider, either by his act or omission, had been negligent,
and (2) that such act or omission proximately caused the injury complained of. The best
approach to prove these is through the opinions of expert witnesses belonging in the same
general line of practice as defendant surgeon. The deference of courts to the expert opinion of
qualified physicians stems from the formers realization that the latter possess unusual
technical skills which laymen in most instances are incapable of intelligently evaluating, hence,
the indispensability of expert testimonies.

In the case at bar, there were no expert witnesses presented to testify norwas there any
testimony offered, except that of Dr. Tatads, on which it may be inferred that petitioners
failed to exercise the standard of care, diligence, learning and skill expected from practitioners
of their profession. Dr. Tatad is not an expert witness in this case as her expertise is in the
administration of anesthesia and not in the determination of whether surgery ought or not
ought to be performed.

In medical negligence cases, it is established that the complainant has the burden of
establishing breach of duty on the part of the doctors or surgeons. It must be proven that such
breach of duty has a causal connection to the death of the patient.Aside from their failure to
prove negligence on the part of the petitioners, they also failed to prove that it was petitioners
fault that caused the injury.

NOGALES vs. CAPITOL MEDICAL CENTER

G.R. No. 142625/December 19, 2006
511 SCRA 204

Facts:

Corazon Nogales (Corazon) was pregnant with her fourth child. She was under the
exclusive prenatal care of Dr. Oscar Estrada. On her last trimester of pregnancy, she had leg
edema and an increase in blood pressure. Her condition was a dangerous complication of
pregnancy. When she experienced mild labor pains, Dr. Estrada advised her immediate
admission to Capitol Medical Center (CMC). Upon Corazon's admission at the CMC,
Rogelio Nogales ("Rogelio") executed and signed the "Consent on Admission and
Agreement" and "Admission Agreement." Corazon was then brought to the labor room of
the CMC. She had incidents of medical complication and was given treatment by the doctors
in CMC. Despite several measures administered, Corazon died. The cause of death was
hemorrhage, post partum.

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Petitioners filed a complaint for damages against CMC, Dr. Estrada, and the rest of
CMC medical staff for the death of Corazon. In their defense, CMC pointed out that Dr.
Estrada was a consultant to be considered as an independent-contractor, and that no
employer-employee relationship existed between the former and the latter.

After more than 11 years of trial, the court rendered judgment finding Dr. Estrada solely
liable for damages. Petitioners appealed the trial courts decision. Petitioners claimed that
aside from Dr. Estrada, the remaining respondents should be held equally liable for
negligence. Petitioners stressed that the subject matter of the petition was the liability of
CMC for the negligence of Dr. Estrada.

Issue:

Whether CMC is vicariously liable for the negligence of Dr. Estrada.

Ruling:

Yes. In general, a hospital is not liable for the negligence of an independent

contractor-physician. There is, however an exception to this principle. The hospital may be
liable if the physician is the ostensible agent of the hospital. This exception is also known as
the doctrine of apparent authority. For a hospital to be liable under the doctrine of apparent
authority, a plaintiff must show that 1.) the hospital, or its agent, acted in a manner that
would lead a reasonable person to conclude that the individual who was alleged to be
negligent was an employee or agent of the hospital; 2.) Where the acts of the agent create the
appearance of authority, the plaintiff must also prove that the hospital had knowledge of and
acquired in them; and 3.) the plaintiff acted in reliance upon the conduct of the hospital or
its agent, consistent with ordinary care and prudence. In the instant case, CMC impliedly
held out Dr. Estrada as a member of its medical staff. Through CMC's acts, CMC clothed
Dr. Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr.
Estrada was an employee or agent of CMC.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126297, 31 January 2007

Facts:

On April 1984, Natividad Agana was rushed to the Medical City General Hospital
(Medical City Hospital) because of difficulty of bowel movement and bloody anal discharge.
Dr. Miguel Ampil diagnosed her to be suffering from "cancer of the sigmoid". The doctor
performed an anterior resection surgery on Natividad and found that the malignancy in her
sigmoid area had spread on her left ovary, necessitating the removal of certain portions of it.
Dr. Ampil obtained the consent of Natividads husband, Enrique Agana, to permit Dr. Juan
Fuentes, to perform hysterectomy on her. Dr. Fuentes had completed the hysterectomy and
thenafter left after he presented to Dr. Ampil his work being done. Dr. Ampil took over and
completed the operation and closed the incision. The attending nurses had "announced to
Dr. Ampil that two (2) "sponge count lacking but he continued the closure. The attending
nurses entered the incident in the Record of Operations.

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Natividad was released with a hospital bill amounted to P60,000.00 inclusive of the
doctors fee. A few days late, Natividad complained of excruciating pain in her anal region
and consulted both Dr. Ampil and Dr. Fuentes. Both doctors told her that the pain was the
natural consequence of the surgery. Dr. Ampil then recommended that she consult an
oncologist to examine the cancerous nodes which were not removed during the operation.

Natividad and her husband, went to the United States to seek further treatment and was
told she was free of cancer after four (4) months. She was advised to return to the Philippines.

In August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two
weeks thereafter, her daughter found a piece of gauze protruding from her vagina. Dr.
Ampil was informed about it and he preceded to her house where he managed to extract by
hand a piece of gauze measuring 1.5 inches in width. He then assured her that the pains would
soon vanish. She suffered intense pains hence prompted her admission to the Polymedic
General Hospital.

Dr. Ramon Gutierrez detected the presence of another foreign object in her vagina --
a foul-smelling gauze measuring 1.5 inches in width which badly infected her vaginal vault
and forced the stool to excrete through the vagina. In October 1984, Natividad underwent
another surgery to remedy the damage.

On Nov. 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon
City a complaint for damages against the Professional Services, Inc. (PSI), owner of the
Medical City Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They
alleged that the latter are liable for negligence for leaving two pieces of gauze inside Natividads
body and malpractice for concealing their acts of negligence.

On February 16, 1986 Natividad died.

On March 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr.
Ampil and Dr. Fuentes liable for negligence and malpractice. The defendants PSI, Dr. Miguel
Ampil and Dr. Juan Fuentes to pay to the plaintiffs, jointly and severally for actual damages
(US $ 19,900 at the rate of P21.60-US$1.00, as reimbursement of actual expenses incurred in
the United States of America); travel taxes; cost of hospitalization at Polymedic Hospital
(P45,802.50); ) moral damages (P2,000,000.00); attorneys fees (P250,000.00); legal interest
and the cost of suits. Dr. Ampil and Dr. Fuentes are liable for exemplary damages and the
interest thereon (P300,000.00).

Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals.

Issue:

Whether the CA erred in holding Dr. Ampil liable for negligence and malpractice.

Ruling:

YES.The glaring truth is that all the major circumstances, taken together, directly point to
Dr. Ampil as the negligent party: (1) it is not disputed that the surgeons used gauzes as
sponges to control the bleeding of the patient during the surgical operation. (2) immediately
after the operation, the nurses who assisted in the surgery noted in their report that two
sponge count was lacking; that such anomaly was announced to surgeon and that a search
was done but to no avail prompting Dr. Ampil to continue for closure. (3) after the
operation, two gauzes were extracted from the same spot of the body of Mrs. Agana where the
surgery was performed.

Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he
even misled her that the pain she was experiencing was the ordinary consequence of her
operation. Had he been more candid, Natividad could have taken the immediate and

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appropriate medical remedy to remove the gauzes from her body. What was initially an act of
negligence by Dr. Ampil has ripened into a deliberate wrongful act of deceiving his patient.

This is a clear case of medical malpractice or more appropriately, medical negligence. The
elements are duty, breach, injury and proximate causation. Dr, Ampil, as the lead surgeon,
had the duty to remove all foreign objects, such as gauzes, from Natividads body before
closure of the incision. When he failed to do so, it was his duty to inform Natividad about it.
Dr. Ampil breached both duties. Such breach caused injury to Natividad, necessitating her
further examination by American doctors and another surgery. That Dr. Ampils negligence is
the proximate cause of Natividads injury could be traced from his act of closing the incision
despite the information given by the attending nurses that two pieces of gauze were still
missing. That they were later on extracted from Natividads vagina established the causal link
between Dr. Ampils negligence and the injury. And what further aggravated such injury was
his deliberate concealment of the missing gauzes from the knowledge of Natividad and her
family.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 126467, 11 February 2008

Facts:

The case emanated on April 1984, when Natividad Agana was hospitalized and operated
by Dr. Ampil and Dr. Fuentes at the Medical City General Hospital for her "cancer of the
sigmoid". After the operations, circumstances pointed out two (2) sponge count lacking.
Insurmountable cost of hospital bills were incurred and intense pains still felt even when
the two sponges were later removed from the vagina of Natividad.

The Aganas filed a complaint for damages against PSI, Dr. Migule Ampil and Dr.
Fuentes at the RTC, Branch 96, Quezon City. The RTC ruled in favor of the Aganas and
ordered the defendants to pay jointly and severally the plaintiff. The defendants interposed
an appeal to the Court of Appeal (CA). On April 1993, the Aganas filed with the RTC a
motion for a Partial Execution of its Decision. The Court granted the motion. The sheriff
levied upon certain properties of Dr. Ampil and sold them for P451,275.00 and delivered the
amount to the Aganas.

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Following their receipt of the money, the Aganas entered into an agreement with PSI and
Dr. Fuentes to indefinitely suspend any further execution of the RTC Decision. However, not
long thereafter, the Aganas again filed a motion for an alias writ of execution against the
properties of PSI and Dr. Fuentes.

On September 21, 1993, the RTC granted the motion and issued the corresponding writ.
Dr. Fuentes filed with the Court of Appeals a petition for certiorari and prohibition, with
prayer for preliminary injunction, docketed as CA-G.R. SP No. 32198. On Oct. 29, 1993, the
CA issued a Resolution granting Dr. Fuentes prayer for injunctive relief.

On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of
CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198. The case against defendant-appellant Dr.
Juan Fuentes was DISMISSED.

The Aganas maintained that the Court of Appeals erred in finding that Dr. Fuentes is not
guilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They
contend that the pieces of gauze are prima facie proofs that the operating surgeons have been
negligent.

Issue:

Whether the CA erred in absolving Dr. Fuentes of any liability.

Ruling:

NO. Literally, res ipsa loquitur means "the thing speaks for itself." The requisites for
the applicability of the doctrine of res ipsa loquitur are: (1) the occurrence of an injury; (2)
the thing which caused the injury was under the control and management of the defendant; (3)
the occurrence was such that in the ordinary course of things, would not have happened if
those who had control or management used proper care; and (4) the absence of explanation by
the defendant.

The element of "control and management of the thing which caused the injury" to be wanting. It
was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad.
He requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil)
found that the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes
performed the surgery and thereafter reported and showed his work to Dr. Ampil. The latter
examined it and finding everything to be in order, allowed Dr. Fuentes to leave the operating
room. Dr. Ampil then resumed operating on Natividad. He was about to finish the procedure
when the attending nurses informed him that two pieces of gauze were missing. A "diligent
search" was conducted, but the misplaced gauzes were not found. Dr. Ampil then directed that
the incision be closed. During this entire period, Dr. Fuentes was no longer in the operating
room and had, in fact, left the hospital.

Under the "Captain of the Ship" rule, the operating surgeon is the person in complete
charge of the surgery room and all personnel connected with the operation. Their duty is to
obey his orders. Dr. Ampil was the lead surgeon thus he was the "Captain of the Ship." It
was this act of ordering the closure of the incision notwithstanding that two pieces of gauze
remained unaccounted for, that caused injury to Natividads body. Clearly, the control and
management of the thing which caused the injury was in the hands of Dr. Ampil, not Dr.
Fuentes.

Res ipsa loquitur is not a rule of substantive law, hence, does not per se create or constitute
an independent or separate ground of liability, being a mere evidentiary rule.c In other words,
mere invocation and application of the doctrine does not dispense with the requirement of
proof of negligence. Here, the negligence was proven to have been committed by Dr. Ampil
and not by Dr. Fuentes.

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DR. RUBU LI vs. SPS. SOLIMAN

G.R. No. 165279/ June 7, 2011
651 SCRA 32

Facts:

Angelica Soliman, the daughter of Sps. Soliman underwent a biopsy of the mass located
in her lower extremity at the St. Lukes Medical Center (SLMC).Results showed that Angelica
was suffering from a highly malignant cancer of the bone. Angelicas right leg was amputated
in order to remove the tumor. To eliminate any remaining cancer cells, chemotherapy was
administered by herein petitioner Dr. Rubi Li, a medical oncologist.

Angelica was admitted to SLMC. However, she died 11 days after the administration of
the first cycle of the chemotherapy regimen. Respondents filed a damage suit against Dr. Li
and other doctors and against SLMC, charging them with negligence and disregard of
Angelicas safety, health and welfare by their careless administration of the chemotherapy
drugs, their failure to observe the essential precautions in detecting early the symptoms of
fatal blood platelet decrease and stopping early on the chemotherapy, which bleeding led to
hypovolemic shock that caused Angelicas untimely demise.

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Petitioner denied having been negligent in administering the chemotherapy drugs to

Angelica and asserted that she had fully explained to respondents the effects of
chemotherapy. On her supposed non-disclosure of all possible side effects of chemotherapy,
including death, petitioner argues that it was foolhardy to imagine her to be all-knowing.
While the theoretical side effects of chemotherapy were explained by her to the respondents,
as these should be known to a competent doctor, petitioner cannot possibly predict how a
particular patients body constitution would respond to the treatment. These are obviously
dependent on too many known, unknown and immeasurable variables, thus requiring that
Angelica be closely monitored during the treatment. Petitioner asserts that she did everything
within her professional competence to attend to the medical needs of Angelica.

Issue:

Whether the petitioner can be held liable for failure to fully disclose serious side effects
to the parents of the child patient who died while undergoing chemotherapy, despite the
absence of finding that petitioner was negligent in administering the said treatment.

Ruling:

No. There are four essential elements a plaintiff must prove in a malpractice action
based upon the doctrine of informed consent: "(1) the physician had a duty to disclose
material risks; (2) he failed to disclose or inadequately disclosed those risks; (3) as a direct
and proximate result of the failure to disclose, the patient consented to treatment she
otherwise would not have consented to; and (4) plaintiff was injured by the proposed
treatment." The gravamen in an informed consent case requires the plaintiff to "point to
significant undisclosed information relating to the treatment which would have altered her
decision to undergo it.

In this case, there was adequate disclosure of material risks inherent in the
chemotherapy procedure performed with the consent of Angelicas parents. On the other
hand, the suing parents failed to establish the existence of the risks or side-effects Dr. Li
should have disclosed to them in the use of chemotherapy in the treatment of osteosarcoma.
The doctor presented as witness does not qualify as expert testimony to establish the
standard of care in obtaining consent for chemotherapy treatment. In the absence of
expert testimony in this regard, the Court felt hesitant in defining the scope of mandatory
disclosure in cases of malpractice based on lack of informed consent. Thus, the Court has
no factual basis to declare that the chemotherapy administered by the petitioner proximately
caused Angelicas death.
DR. EDUARDO AQUINO VS HEIRS OF RAYMUNDA CALAYAG
G.R. No. 158461

Facts
When his wife Raymunda wento into labor pains and began bleeding, respondent Rodrigo Calayag
brought her to St. Michaelss Clinic. After initial examination, the doctor told Rodrigo that Raymunda
had to have caesarean section for her baby but this had to be done at the beteer-equipped Sacred Heart
Hospital (SHH), owned and operated by petitioner Dr. Alberto Reyes (Dr. Reyes). SHH admitted on
the same day. To prepare her, the attending anesthesiologist, petitioner Dr. Eduardo Aquino injected
with a preliminary Hipnotic and he administered an anesthesia on her spine. A few minutes later, Dr.
Unite delivered a stillborn eight-month-old baby. A few minutes later the operating team noticed that
Raymunda had become cyanotic and her blood darkened for lack of oxygen and suddenly her vital
signs gone. Fortunately, she was restored. It was found out that suffered a cardiac arrest during the
operation which explained her comatose states and was advised to move her to a better-equipped
hospital. Raymunda was moved to Medical Center Manila where Dr. Libarnes, a neurologist, found
her in a vegetative state having suffered from an anoxic injury due to cardio-respiratory arrest. Her
condition worsen and she never regained consciousness, prompting her MCM doctors to advise
Rodrigo to take her home since they could do no more to improve her condition. MCM discharged her
and she died 15 days later. Rodrigo filed, together with his seven children, a complaint damages for Dr.
Unite, Dr. Aquino and Dr. Reyes claiming that Dr. Unite and Dr. Aquino failed to exercise the

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diligence required for operating Raymunda while Dr. Reyes, as Rodrigo averred, was negligent in
supervising the work of the two doctors.

Issues
Whether or not Dr. Unite (the surgeon) and Dr. Aquino (the anesthesiologist) acted
negligently in handling Raymundas operation, resulting in her death; and
Whether or not Dr. Reyes is liable, as hospital owner, for the negligence of Dr. Unite and Dr.
Aquino.

Rulings

Yes, Dr. Unite and Dr. Aquino are liable. The cause of action against the doctors in these cases
is commonly known as medical malpractice and to successfully mount a medical malpractice action, the
plaintiff should establish four basic things: (1) duty; (2) breach; (3) injury; and (4) proximate causation.
The evidence should show that the physician or surgeon, either failed to do something which a
reasonably prudent physician or surgeon would have done, or that he or she did something that a
reasonably prudent physician or surgeon would not have done; and that the failure or action caused
injury to the patient. To prove the doctors negligence, Rodrigo presented Dr. Libarnes who explained
that it was the lack of oxygen in the brain that caused Raymundas vegetative state and it could be traced
to the anesthetic accident that resulted when Dr. Aquino placed her under anesthesia. Furthermore,
Dr. Libarnes blamed the doctors who operated on Raymunda for not properly keeping track of her
vital sign during the caesarean procedure resulting in their failure to promptly address the cyanosis
when it set in. The damage coud have been averted had the attending doctors promptly detected the
situation and resuscitated her on time.

No, Dr. Reyes is not liable as a hospital owner. The doctrine of apparent authority would not
apply to make Dr. Reyes liable. Two factors must be present under this doctrine: 1) the hospital acted in
a manner which would lead a reasonable person to believe that the person claimed to be negligent was
its agent or employee; and 2) the patient relied on such belief. In this case, there is no evidence that the
hospital acted in a way that made Raymunda and her husband believe that the two doctors were in the
hospitals employ. There appears no concrete proof to show that Dr. Unite and Dr. Aquino were under
the hospitals payroll. Indeed, Dr. Aquino appeared to be a government physician connected with the
Integrated Provincial Health Office of Bulacan while Dr. Unite appeared to be a self-employed doctor.
No evidence has been presented that Raymunda suffered her fate because of defective hospital facilities
or poor staff support to the surgeons.

PETER PAUL PATRICK LUCAS VS DR. PROSPERO MA. C . TUANO

G.R. NO. 178763

Facts:

Herein petitioner, Peter Lucas, first consulted respondent, Dr. Tuao, on a complaint of
soreness and redness on his right eye. The respondent, after a series of examinations, found
that the former was suffering from conjunctivitis or sore eyes and prescribed the use of the
Spersacet-C. However, after the petitioners condition seemed to have worsened, he sought
for the respondents second finding wherein the latter said that his condition had progressed
to Epidemic Kerato Conjunctivitis (EKC), a viral infection. The respondent then prescribed
the use of Maxitrol, a steroid-based eye drop. The petitioners condition worsened overtime,
yet he obediently complied with all the prescriptions and orders of the respondent.
Four months later and after the petitioner suffered from significant swelling of his
right eyeball, headaches, nausea and blindness on this right eye, he sought for the opinion of
another doctor, Dr. Aquino. Dr. Aquino found that the petitioner had been suffering from
glaucoma and needed to undergo laser surgery, lest he might suffer from total blindness. After

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reading the literature on the use of the medicine Maxitrol, Fatima, one of the petitioners herein
and Peter Lucas wife, read that one of the adverse effects of prolonged use of steroid-based
eye drops could possibly be glaucoma. Claiming to have steroid-induced glaucoma and
blaming Dr. Tuano for the same, Peter, Fatima, and their two children instituted a civil case
for damages against herein respondent for medical malpractice.

Issue:

Whether or not Dr. Tuano failed to exercise due diligence in the performance of
his duty and may be held liable.

Ruling:

No, petitioers failed to prove by preponderance of evidence that Dr. Tuano was negligent
in his treatment of Peters condition. In medical negligence cases, also called medical
malpractice suits, there exist a physician-patient relationship between the doctor and the
victim. But just like any other proceeding for damages, four essential (4) elements i.e., (1)
duty; (2) breach; (3) injury; and (4) proximate causation, must be established by the
plaintiff/s. All the four (4) elements must co-exist in order to find the physician negligent
and, thus, liable for damages.

As the physician has the duty to use at least the same level of care as that of any other
reasonably competent physician would use in the treatment of his patient, said standard level
of care, skill and diligence must likewise be proven by expert medical testimony, because the
standard of care in a medical malpractice case is a matter peculiarly within the knowledge of
experts in the field. The same is outside the ken of the average layperson. There is breach of
duty of care, skill and diligence, or the improper performance of such duty, by the attending
physician when the patient is injured in body or in health [and this] constitutes the actionable
malpractice. Hence, proof of breach of duty on the part of the attending physician is
insufficient. Rather, the negligence of the physician must be the proximate cause of the injury.

FILCAR TRANSPORT SERVICES VS JOSE A. ESPINAS

G.R. NO. 174156

Facts:

On November 22, 1998, respondent Espinas was driving his car in Manila when another
car suddnenly and bumped his car. The other car escaped from the scene of the incident, but
Espinas was able to get its plate number. After verifying with the LTO, Espinas learned that
the owner of the other car is Filcar. Espenias sent several letters to Filcar and to its President
and General Manager. On May 31, 2001, Espinas filed a complaint for damages against
Filcar and Carmen Flor before the Metropolitan Trial Court of Manila and demand that they
pay actual damages sustained by his car.

Filcar argued that while it is the registered owner of the car that hit and bumped Espinas
car, the car was assigned to its Corporate Secretary and further stated that when the incident
happened, the car was being driven by Atty. Flors personal driver, Timoteo Floresca. Filcar
denied any liability to Espinas and claimed that the incident was not due to its fault or
negligence since Floresca was not its employee but that of Atty. Flor. Filcar and Flor both

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said that they always exercised the due diligence required of a good father of a family in
leasing and assigning their vehicles to third parties.

Issue:

Whether or not Filcar, a registered owner of the motor vehicle, may be held liable
for the damages caused to Espinas.

Ruling:

Yes. Filcar, as registered owner, is deemed the employer of the driver Floresca, and is
thus vicariously liable under Article 2176 in relation with Article 2180 of the Civil Code
which provides that an action predicated on an employees act or omission may be instituted
against the employer who is held liable for the negligent act or omission committed by his
employee. It is well settled that in case of motor vehicle mishaps, the registered owner of the
motor vehicle is considered as the employer of the tortfeasor-driver, and is made primarily
liable for the tort committed by the latter. In Equitable Leasing Corp vs Suyom the registered
owner of the motor vehicle is the employer of the negligent driver and the actual employer is
considered merely as an agent of such owner.

Thus, it is clear that for the purpose of holding the registered owner of the motor
vehicle primarily and directly liable for damages under Article 2176, in relation with Article
2180 of the Civil Code, the existence of an employer- employee relationship is not required.
It is sufficient to establish that Filcar is the registered owner of the motor vehicle causing
damage in order that it may be held vicariously liable under Article 2180 of the Civil Code.
The main aim of motor vehicle registration is to identify the owner so that if any accident
happens, or that any damage or injury is caused by the vehicle on the public highways,
responsibility therefor can be fixed on a definite individual, the registered owner.

PCIB v CA PHILIPPINE COMMERCIAL INTERNATIONAL BANK (formerly

INSULAR BANK OF ASIA AND AMERICA), petitioner, vs. COURT OF APPEALS
and FORD PHILIPPINES, INC. and CITIBANK, N.A., respondents.
G.R. No. 121413. January 29, 2001

Facts:
Ford Philippines drew and issued Citibank Check. No. SN 04867 on October 19, 1977,
Citibank Check No. SN 10597 on July 19, 1978 and Citibank Check No. SN-16508 on April
20, 1979, all in favor of the Commissioner of Internal Revenue (CIR) for payment of its
percentage taxes. The checks were crossed and deposited with the IBAA, now PCIB, BIR's
authorized collecting bank. The first check was cleared containing an indorsement that "all
prior indorsements and/or lack of indorsements guaranteed." The same, however, was
replaced with two (2) IBAA's managers' checks based on a call and letter request made by
Godofredo Rivera, Ford's General Ledger Accountant, on an alleged error in the
computation of the tax due without IBAA verifying the authority of Rivera. These manager's
checks were later deposited in another bank and misappropriated by the syndicate. The last
two checks were cleared by the Citibank but failed to discover that the clearing stamps do

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not bear any initials. The proceeds of the checks were also illegally diverted or switched by
officers of PCIB members of the syndicate, who eventually encashed them. Ford, which
was compelled to pay anew the percentage taxes, sued in two actions for collection against
the two banks on January 20, 1983, barely six years from the date the first check was
returned to the drawer. The direct perpetrators of the crime are now fugitives from justice.
The decision of the lower courts are the following:

1st case:
(1) Trial Court: Citibank and IBAA were jointly and severally liable for the checks (2) CA:
only IBAA (PCIB) solely liable for the amount of the first check
2nd case:
(1) Trial Court: absolved PCIB from liability and held that only the Citibank is liable for the
checks issued by Ford
(2) Court of Appeals: held both banks liable for negligence in the selection and supervision
of their employees resulting in the erroneous encashment of the checks.

Issue:
1. Whether the petitioner Ford had the right to recover from the collecting bank
(PCIBank) and the drawee bank (Citibank) the value of the checks intended as payment to
the Commissioner of Internal Revenue?

2. Whether Ford has cause of action already prescribed?

Ruling:

A. Citibank Check No. SN-04867

FORD
Ford, is guilty of the "imputed contributory negligence" that would defeat its claim for
reimbursement, bearing in mind that its employees, Godofredo Rivera and Alexis Marindo,
were among the members of the syndicate.
although the employees of Ford initiated the transactions attributable to an organized
syndicate, in our view, their actions were not the proximate cause of encashing the checks
payable to the CIR. The degree of Ford's negligence, if any, could not be characterized as the
proximate cause of the injury to the parties.

IBAA/PCIB
As agent of the BIR (the payee of the check), defendant IBAA should receive
instructions only from its principal BIR and not from any other person especially so when
that person is not known to the defendant. It is very imprudent on the part of the defendant
IBAA to just rely on the alleged telephone call of one (Godofredo Rivera and in his
signature to the authenticity of such signature considering that the plaintiff is not a client of
the defendant IBAA." 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". PCIBank is liable in the amount
corresponding to the proceeds of Citibank Check No. SN-04867.

Citibank

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None
B. Citibank Check Numbers SN-10597 and 16508

PCIBank
Section 5 31 of Central Bank Circular No. 580, Series of 1977 provides that any theft
affecting items in transit for clearing, shall be for the account of sending bank, which in this
case is PCIBank.

Citibank
Citibank is negligent in the performance of its duties. Citibank failed to establish that its
payment of Ford's checks were made in due course and legally in order. In its defense,
Citibank claims the genuineness and due execution of said checks, considering that Citibank
(1) has no knowledge of any infirmity in the issuance of the checks in question (2) coupled
by the fact that said checks were sufficiently funded and (3) the endorsement of the Payee or
lack thereof was guaranteed by PCIBank (formerly IBAA), thus, it has the obligation to
honor and pay the same. As the drawee bank breached its contractual obligation with Ford
and such degree of culpability contributed to the damage caused to the latter. It failed to
perform what was incumbent upon it, which is to ensure that the amount of the checks
should be paid only to its designated payee.

Invoking the doctrine of comparative negligence, we are of the view that 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, we are constrained to hold them equally liable for the loss of the
proceeds of said checks issued by Ford in favor of the CIR. Time and again, we have
stressed that banking business is so impressed with public interest where the trust and
confidence of the public in general is of paramount importance such that the appropriate
standard of diligence must be very high, if not the highest, degree of diligence. A bank's
liability as obligor is not merely vicarious but primary, wherein the defense of exercise of due
diligence in the selection and supervision of its employees is of no moment. Banks handle
daily transactions involving millions of pesos. By the very nature of their work 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.
The relationship between a holder of a commercial paper and the bank to which it is
sent for collection is that of a principal and an agent and the diversion of the amount of the
check is justified only by proof of authority from the drawer; that in crossed checks, the
collecting bank is bound to scrutinize the check and know its depositors before clearing
indorsement; that as a general rule, banks are liable for wrongful or tortuous acts of its
agents within the scope and in the course of their employment; that failure of the drawee
bank to seasonably discover irregularity in the checks constitutes negligence and renders the
bank liable for loss of proceeds of the checks; that an action upon a check prescribes in ten
(10) years; and that the contributory negligence of the drawer shall reduce the damages he
may recover against the collecting bank.

Since a master may be held for his servant's wrongful act, the law imputes to the master
the act of the servant, and if that act is negligent or wrongful and proximately results in
injury to a third person, the negligence or wrongful conduct is the negligence or wrongful
conduct of the master, for which he is liable. The general rule is that if the master is injured

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by the negligence of a third person and by the concurring contributory negligence of his own
servant or agent, the latter's negligence is imputed to his superior and will defeat the
superior's action against the third person, assuming, of course that the contributory
negligence was the proximate cause of the injury of which complaint is made.

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. A bank 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.
A bank holding out its officers and agents as worthy of confidence will not be permitted to
profit by the frauds these officers or agents were enabled to perpetrate in the apparent
course of their employment; nor will it be permitted to shirk its responsibility for such frauds,
even though no benefit may accrue to the bank therefrom. For the general rule is that a bank
is liable for the fraudulent acts or representations of an officer or agent acting within the
course and apparent scope of his employment or authority. And 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.

CONTRIBUTORY NEGLIGENCE OF PLAINTIFF SHALL REDUCE DAMAGES HE

MAY RECOVER.

The court also find that Ford is not completely blameless in its failure to detect the
fraud. Failure on the part of the depositor to examine its passbook, statements of account,
and cancelled checks and to give notice within a reasonable time (or as required by statute)
of any discrepancy which it may in the exercise of due care and diligence find therein, serves
to mitigate the banks' liability by reducing the award of interest from twelve percent (12%)
to six percent (6%) per annum. As provided in Article 1172 of the Civil Code of the
Philippines, responsibility arising from negligence in the performance of every kind of
obligation is also demandable, but such liability may be regulated by the courts, according to
the circumstances. In quasi-delicts, the contributory negligence of the plaintiff shall reduce
the damages that he may recover.

MANILA ELECTRIC COMPANY (MERALCO) vs.

ATTY. PABLITO M. CASTILLO, doing business under the trade name and style of
PERMANENT LIGHT MANUFACTURING ENTERPRISES and GUIA S.
CASTILLO,
G.R. No. 182976 January 14, 2013

Facts:
Respondents Pablito M. Castillo and Guia S. Castillo are spouses engaged a business
under the name and style of Permanent Light Manufacturing Enterprises (Permanent Light).
After conducting an inspection of Permanent Lights electric meter, the petitioner
Manila Electric Company (Meralco) concluded that the meter was tampered with and electric
supply to Permanent Light was immediately disconnected, without notice to respondents,
for one day. However, respondents used generators soon after the power went out to keep
the operations of Permanent Light on track. Subsequently, Meralco assured respondents in a
letter that Permanent Lights meter has been tested and was found to be in order. In the
same letter, petitioner informed respondents that said meter was replaced anew after it
sustained a crack during testing. However, respondents requested for a replacement meter.
According to them, the meters installed by Meralco ran faster than the one it confiscated

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following the disconnection. Subsequently, Meralco installed a new electric meter at the
premises of Permanent Light.

Issues:
1. Whether or not the respondents are entitled to claim damages for petitioners act of
disconnecting electricity to Permanent Light.

2. Whether or not the respondents are entitled to actual damages for the supposed
overbilling by petitioner Meralco of their electric consumption from the time the new
electric meter was installed.

Ruling:
First Issue:
In Quisumbing v. Manila Electric Company, the Court treated the immediate
disconnection of electricity without notice as a form of deprivation of property without due
process of law, which entitles the subscriber aggrieved to moral damages. In addition to
moral damages, exemplary damages are imposed by way of example or correction for the
public good. In this case, to serve as an example - that before disconnection of electric
supply can be effected by a public utility, the requisites of law must be complied with the
Court sustained the award of exemplary damages to respondents.

Second Issue:
Actual or compensatory damages cannot be presumed, but must be duly proved with a
reasonable degree of certainty. The award is dependent upon competent proof of the
damage suffered and the actual amount thereof. The award must be based on the evidence
presented, not on the personal knowledge of the court; and certainly not on flimsy, remote,
speculative and unsubstantial proof. Nonetheless, in the absence of competent proof on the
amount of actual damages suffered, a party is entitled to temperate damages. 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. The amount thereof is usually
left to the discretion of the courts but the same should be reasonable.

In this case, the Court is convinced that respondents sustained damages from the
abnormal increase in Permanent Lights electric bills after petitioner replaced the latters
meter. However, respondents failed to establish the exact amount thereof by competent
evidence. Thus, temperate damages is awarded.

Petition is DENIED. The decision of CA is affirmed

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UNIVERSAL AQUARIUS, INC. and CONCHITA TAN versus Q.C. HUMAN

RESOURCES MANAGEMENT CORPORATION
G.R. NO. 155990, September 12, 2007

Facts:

Universal Aquarius, Inc. (Universal) is engaged in the manufacture and distribution of

chemical products in Metro Manila.While Q.C. Human Resources Management Corporation
(Resources) is engaged in supplying manpower to various establishments. It supplied
Universal with about seventy-four (74) temporary workers to assist Universal in the
operation of its chemical plant in Antipolo City. The national president of the labor
organization called Obrero Pilipino (Universal Aquarius Chapter) sent a Notice of Strike to
Universal. Resources informed the Regional Office of the Department of Labor and
Employment that the officers and members of Obrero Pilipino are its employees and not
employees of Universal. Capocyon and 36 other union officers and members of Obrero
Pilipino, picketed, barricaded and obstructed the entry and exit of Universal's Antipolo City
chemical plant and intercepted Universal's delivery trucks thereby disrupting its business
operations.Universal then filed a Complaint against the strikers and Resources for breach of
contract and damages suffered due to the disruption of their respective business operations.
Universal forged an Agreement with Obrero Pilipino. Thus, the strike which affected the
business operations of Universal and Marman ended. Universal and Tan then filed a Notice

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of Dismissal as against the strikers Resources filed a Motion to Dismiss. But the RTC
denied the Motion to Dismiss. Latter then filed a Motion for Reconsideration but it was still
denied by the RTC.And later filed a petition for certiorari and prohibition with the CA. The
CA rendered a Decision which set aside the Orders of the RTC and dismissed the
complaint for lack of cause of action.The petitioner filed a Motion for Reconsideration but it
was denied by the CA in its Resolution.

Issue:

Whether the Universal can claimed damages for breach of contract?

Ruling:

Court is convinced that the Complaint sufficiently states a cause of action against
Resources. The Complaint alleged that Universal had a contract of employment of
temporary workers with Resources; and that Resources violated said contract by supplying it
with unfit, maladjusted individuals who staged a strike and disrupted its business operations.
Given these hypothetically admitted facts, the RTC, in the exercise of its original and
exclusive jurisdiction, could have rendered judgment over the dispute.

Keppel Cebu Shipyard vs. Pioneer Insurance

601 SCRA 96; 681 SCRA 44

Facts:

WG & A JEBSENS SHIPMANAGEMENT, Owner/Operator of M/V "SUPERFERRY

3" and KEPPEL CEBUSHIPYARD, INC. (KCSI) entered into an agreement that the Dry
docking and Repair of the above-named vessel ordered by the Owners Authorized Representative
shall be carried out under the Keppel Cebu Shipyard Standard. Conditions of Contract for
Ship repair, guidelines and regulations on safety and security issued by Keppel Cebu
Shipyard. In the course of its repair, M/V " Superferry 3"was gutted by fire claiming that the extent of the
damage was pervasive, WG&A declared the vessel damage as a "total constructive loss" and,
hence, filed an insurance claim with Pioneer. Pioneer paid the insurance claim of WG&A,
which in turn, executed a Loss and Subrogation Receipt in favor of Pioneer. Pioneer tried to
collect from KCSI, but the latter denied any responsibility for the loss of the subject vessel.
As KCSI continuously refused to pay despite repeated demands, Pioneer, filed a Request for
Arbitration before the Construction Industry Arbitration Commission CIAC seeking for
payment of U.S.$ 8,472,581.78 plus interest, among others. The CIAC rendered its decision
declaring both WG&A and KCSI guilty of negligence, the CIAC ordered KCSI to pay Pioneer
the amount of P25,000,000.00, with interest at 6% per annum. Both Keppel and Pioneer appealed to the

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CA. The cases were consolidated in the CA. the CA rendered a decision dismissing
petitioners claims in its entirety. Keppel was declared as equally negligent.

Issue:

To whom may negligence over the fire that broke out on board M/V "Superferry
3" be imputed?

Ruling:

As to the issue of negligence, undeniably, the immediate cause of the fire was the
hot work done by Angelino Sevillejo on the accommodation area of the vessel, specifically
on Deck A. As established before the CIAC. Pioneer contends that KCSI should be held
liable because Sevillejo was its employee who, at the time the fire broke out, was doing his
assigned task, and that KCSI was solely responsible for all the hot works done on board the
vessel. Court ruled in favor of Pioneer. At the time of the fire, Sevillejo was an employee of KCSI and
was subject to the latters direct control and supervision. There was a lapse in KCSIs supervision of
Sevillejos work at the time the fire broke out. KCSI failed to exercise the necessary degree
of caution and foresight called for by the circumstances.

SERRA VS MUMAR 668 SCRA 335

Facts:

At around 6:30 in the evening of 3 April 2000, there was a vehicular accident along
the National Highway in Barangay Apopong, General Santos City, which resulted in the
death of Armando Mumar (Mumar), husband of respondent Nelfa T. Mumar (respondent).

Based on the evidence presented before the Regional Trial Court (RTC) of General
Santos City, one Armando Tenerife (Tenerife) was driving his Toyota Corolla sedan on the
National Highway heading in the direction of Polomolok, South Cotabato. Tenerife noticed
the van owned by petitioner Paulita Edith Serra (petitioner) coming from the opposite
direction, which was trying to overtake a passenger jeep, and in the process encroached on his
lane. The left side of the sedan was hit by the van, causing the sedan to swerve to the left and
end up on the other side of the road. The van collided head on with the motorcycle, which was
about 12 meters behind the sedan on the outer lane, causing injuries to Mumar, which
eventually led to his death.

On the other hand, petitioner denied that her van was overtaking the jeepney at the
time of the incident. She claimed that the left tire of Tenerifes sedan burst, causing it to

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sideswipe her van. Consequently, the left front tire of the van also burst and the vans driver,
Marciano de Castro (de Castro), lost control of the vehicle. The van swerved to the left
towards Mumars motorcycle. The impact resulted in the death of Mumar.

Subsequently, respondent filed a complaint against petitioner for Damages by Reason

of Reckless Imprudence resulting to Homicide and Attachment before the General Santos
City RTC. RTC ruled against Serra finding her liable for damages by reason of
reckless imprudence, and she is hereby ordered to pay for damages. CA denied the appeal and
affirmed with modification the RTCs ruling.

Issue:

Whether or not both the lower court and the Court of Appeals committed
reversible error in holding Editha Serra as liable for damages and in not appreciating that she
was not negligent in the selection and supervision of the driver of the van, Marciano de
Castro

Ruling:

Under Article 2180 of the Civil Code, employers are liable for the damages caused by
their employees acting within the scope of their assigned tasks. Whenever an employees
negligence causes damage or injury to another, there instantly arises a presumption that the
employer failed to exercise the due diligence of a good father of the family in the selection or
supervision of its employees. The liability of the employer is direct or immediate. It is not
conditioned upon prior recourse against the negligent employee and a prior showing of
insolvency of such employee. Moreover, under Article 2184 of the Civil Code, if the causative
factor was the drivers negligence, the owner of the vehicle who was present is likewise held
liable if he could have prevented the mishap by the exercise of due diligence.Petitioner failed to
show that she exercised the level of diligence required in supervising her driver in order to
prevent the accident. She admitted that de Castro had only been her driver for one year and she
had no knowledge of his driving experience or record of previous accidents. She also admitted
that it was de Castro who maintained the vehicle and would even remind her to pay the
installment of the car. Petitioner also admitted that, at the time of the accident, she did not
know what was happening and only knew they bumped into another vehicle when the driver
shouted. She then closed her eyes and a moment later felt something heavy fall on the roof of
the car. When the vehicle stopped, petitioner left the scene purportedly to ask help from her
brother, leaving the other passengers to come to the aid of her injured driver.

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PLEYTO VS LUMBOY 432 SCRA 329

Facts:

On May 16, 1995, Pleyto tried to overtake Esguerras tricycle but hit it instead. Pleyto
then swerved into the left opposite lane. Coming down the lane, a car driven by Arnulfo
Asuncion with his passengers, Rhino, Ricardo Lomboy and her daughter Carmela Lomboy.
The bus driven by Pleyto smashed head-on the car driven by Asuncion, killing Arnulfo and
Ricardo instantly. Carmela and Rhino suffered injuries, but only Carmela required
hospitalization. On November 29, 1995, Maria and Carmela Lomboy filed an action for
damages against PRBL and its driver, Pleyto, with the RTC of Dagupan City. The Lomboys
prayed that they be indemnified for the untimely death of Ricardo Lomboy, his lost earnings,
the medical and hospitalization expenses of Carmela, and moral damages. RTC rendered in
favor of the plaintiffs and against the defendants ordering the defendants to pay solidarily
Maria and Carmela. The RTC also found Pleyto negligent and lacking in precaution. The CA
affirmed the decision of the trial court, with modification in award for actual damages from
P59,000.00 to P39,550.00 for funeral and religious services and for medical expenses of
Carmela Lomboy from P52,000.00 to P27,000.00; and the award for loss of earning capacity is
accordingly corrected from P1,642,521.00 to P1,152,000.00
Issue:

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Whether or not the CA erred in pegging the monthly living expenses at 50% of gross
earnings; and Whether or not documentary evidence is indispensable to a claim for loss of
earning capacity

Ruling:

In considering the earning capacity of the victim as an element of damages, the net
earnings, which is computed by deducting necessary expenses from the gross earnings, and
not the gross earnings, is to be utilized in the computation. Note that in the present case,
both the Court of Appeals and the trial court used net earnings, not gross earnings in
computing loss of earning capacity. The amount of net earnings was arrived at after
deducting the necessary expenses (pegged at 50% of gross income) from the gross annual
income. This computation is in accord with settled jurisprudence, including the Villa Rey
case. Petitioners claim that no substantial proof was presented to prove Ricardo Lomboys
gross income lacks merit. Failure to present documentary evidence to support a claim for
loss of earning capacity of the deceased need not be fatal to its cause. Testimonial evidence
suffices to establish a basis for which the court can make a fair and reasonable estimate of
the loss of earning capacity. Hence, the testimony of respondent Maria Lomboy, Ricardos
widow, that her husband was earning a monthly income of P8,000 is sufficient to establish a
basis for an estimate of damages for loss of earning capacity .It is well-settled in
jurisprudence that the factors that should be taken into account in determining the
compensable amount of lost earnings are: (1) the number of years for which the victim
would otherwise have lived; and (2) the rate of loss sustained by the heirs of the deceased.
No reversible error may be attributed to the court a quo in fixing the loss of earning capacity
at said amount .Court likewise sustain the reduction of the award of actual damages from
P59,550 for funeral and burial expenses of Ricardo and P52,000 for medical expenses of
Carmela Lomboy to P39,550 and P27,000, respectively, as only these latter amounts were
duly supported by receipts. To justify an award of actual damages, there must be competent
proof of the actual amount of loss, credence can be given only to claims which are duly
supported by receipts.

However, while the award of P50,000 as moral damages to Carmela Lomboy is

sustained, the award for moral damages of P500,000 to the heirs of Ricardo Lomboy should
be reduced for being excessive. Under Article 2206 of the Civil Code, the spouse, legitimate
children and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased. However, we must
stress that moral damages, though incapable of pecuniary estimation, are in the category of
an award designed to compensate the claimant for actual injury and are not meant to enrich
complainant at the expense of defendant. Moral damages are awarded to enable the injured
party to obtain means, diversions or amusements that will serve to alleviate the moral
suffering he/she has undergone, by reason of the defendants culpable action. Its award is
aimed at restoration, as much as possible, of the spiritual status quo ante; thus it must be
proportionate to the suffering inflicted. Under the circumstances of this case, an award of
P100,000 to the heirs of Ricardo Lomboy would be justified and in keeping with the purpose
of the law and jurisprudence in allowing moral damages. The indemnification award of
P50,000 is also sustained.

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104

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Simon Q. Aonuevo, Jr. and Vicente N. Estrella, petitioners, vs. The Honorable
Court Of Appeals, Rodrigo B. Almazan, Giovanni G. Gumalo, Office Of The
Ombudsman & Customs Commissioner Titus Villanueva, respondents
[G.R. No. 152998. September 23, 2003]

Facts:

Sgt. Rodrigo Almazan and Giovanni Gumalo, both of the Office of the Resident
Ombudsman for Manila International Airport Authority-Ninoy Aquino International
Airport/Duty Free Phils., Inc. filed a complaint against Simon Aonuevo, Jr., Acting
Examiner, Vicente Estrella, Customs Operations Officer I, Nora Linda Cosme, Customs
Operations Officer V, and Ricardo Concha, Acting Principal Customs Appraiser, all of the
Bureau of Customs, NAIA, Pasay City for violation of Section 7(d) of Republic Act No.
6713.

The respondents alleged that the petitioners while assigned at the NAIA customs
lanes numbers 9 and 10, received money handed directly or inserted in the passport of
arriving passengers of the Northwest Airlines flight from Detroit, USA, and the Canadian
Airlines flight. They further alleged that Cosme and Concha received their share of the
money collected by the petitioners. The Resident Ombudsman Team was able to record on

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video a segment of the incident using the surveillance camera of the Emergency Operations
Center of the NAIA.

The Ombudsman placed the four officials under preventive suspension for six (6)
months without pay, [2] considering that the evidence against them was strong.

Cosme pointed out that there was nothing in the video footage which would
implicate her for any act of solicitation or acceptance of any money, whether directly or
indirectly, while in the course of the performance of her duties. In the same way, Concha
asserted that it was grossly malicious for the complainants to infer that, just because he was
caught by the camera passing by the place where petitioners were standing, he received
money from them.

The Ombudsman held that respondents Aonuevo, Jr. and Estrella were guilty as
charged and Cosme as not guilty.

Petitioners then filed a special civil action for certiorari before the Court of Appeals
ascribing grave abuse of discretion to the Ombudsman in rendering the assailed Decision.
However, the Court of Appeals dismissed the case for failure to comply with the
requirements of the Rules of Civil Procedure.

Issues:

WON the CA correctly dismissed the petition on mere technical grounds.

Ruling:

When technicality deserts its function of being an aid to justice, the courts are
justified in exempting from its operations a particular case. Procedural rules are intended to
insure the orderly conduct of litigation, because of the higher objective they seek, which is to
protect the parties substantive rights.

In the case at bar, although the petition filed before the Court of Appeals was not
accompanied by an affidavit of service, petitioners were able to confirm that indeed copies
of the petition were served on the respondents as shown in the registry receipts attached
opposite their names. They attached the certified true copies of the Decision and Order of
the Ombudsman when they filed their Motion for Reconsideration of the Resolution
dismissing their petition.

However, petitioners availed of a wrong mode of appeal when they filed a special
civil action for certiorari under Rule 65 of the Rules on Civil Procedure. Appeals from
decisions of the Office of the Ombudsman in administrative disciplinary cases should be
taken to the Court of Appeals under Rule 43 of the 1997 Rules of Civil Procedure. Neither
did the petitioners sufficiently establish the existence of any fact or reason to justify its resort
to the extraordinary remedy of certiorari.

This notwithstanding, we now resolve the substantive issue.

This Court is not a trier of facts. Findings of fact by the Office of the Ombudsman
when supported by substantial evidence are conclusive, as in the case at bar. Substantial
evidence, which is more than a mere scintilla but is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion, suffices to hold one administratively
liable. The substantial evidence rule in administrative proceedings merely requires such
relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

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Clearly, therefore, petitioners are guilty of violation of Section 7(d) of Republic Act
No. 6713, otherwise known as the Code of Conduct and Ethical Standards for Public
officials and Employees.

Alfredo Mallari, Sr. and Alfredo Mallari, Jr., petitioners vs. Court of Appeals and
Bulletin Publishing Corporation, respondents
[G.R. No. 128607. January 31, 2000]

Facts:

At about 5:00 o'clock in the morning, the passenger jeepney driven by petitioner
Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the
delivery van of respondent Bulletin Publishing Corp. (BULLETIN, for brevity) along the
National Highway in Barangay San Pablo, Dinalupihan, Bataan. Petitioner Mallari Jr. testified
that he went to the left lane of the highway and overtook a Fiera which had stopped on the
right lane. Before he passed by the Fiera, he saw the van of respondent BULLETIN coming
from the opposite direction. It was driven by one Felix Angeles. The sketch of the accident
showed that the collision occurred after Mallari Jr. overtook the Fiera while negotiating a
curve in the highway. The points of collision were the left rear portion of the passenger
jeepney and the left front side of the delivery van of BULLETIN. The two (2) right wheels
of the delivery van were on the right shoulder of the road and pieces of debris from the
accident were found scattered along the shoulder of the road up to a certain portion of the
lane travelled by the passenger jeepney. The impact caused the jeepney to turn around and

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fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who
eventually died due to the gravity of his injuries.

Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages with
the Regional Trial Court of Olongapo City against Alfredo Mallari Sr. and Alfredo Mallari Jr.,
and also against BULLETIN, its driver Felix Angeles, and the N.V. Netherlands Insurance
Company. The complaint alleged that the collision which resulted in the death of Israel
Reyes was caused by the fault and negligence of both drivers of the passenger jeepney and
the Bulletin Isuzu delivery van. The complaint also prayed that the defendants be ordered
jointly and severally to pay the plaintiff.

The trial court found that the proximate cause of the collision was the negligence of
Felix Angeles, driver of the Bulletin delivery van, considering the fact that the left front
portion of the delivery truck driven by Felix Angeles hit and bumped the left rear portion of
the passenger jeepney driven by Alfredo Mallari Jr. Hence, the trial court ordered
BULLETIN and Felix Angeles to pay jointly and severally Claudia G. Reyes, widow of the
deceased victim.

On appeal the Court of Appeals modified the decision of the trial court and found
no negligence on the part of Angeles and consequently of his employer, respondent
BULLETIN. Instead, the appellate court ruled that the collision was caused by the sole
negligence of petitioner Alfredo Mallari Jr. who admitted that immediately before the
collision and after he rounded a curve on the highway, he overtook a Fiera which had
stopped on his lane and that he had seen the van driven by Angeles before overtaking the
Fiera. The Court of Appeals ordered petitioners Mallari Jr. and Mallari Sr. to compensate
Claudia G. Reyes.

Issue:

WON petitioners are correctly held jointly and severally liable to Claudia G. Reyes.

Ruling:

The Court of Appeals correctly found, based on the sketch and spots report of the
police authorities which were not disputed by petitioners, that the collision occurred
immediately after petitioner Mallari Jr. overtook a vehicle in front of it while traversing a
curve on the highway. This act of overtaking was in clear violation of Sec. 41, pars. (a) and
(b), of RA 4136 as amended, otherwise known as The Land Transportation and Traffic
Code.

The rule is settled that a driver abandoning his proper lane for the purpose of
overtaking another vehicle in an ordinary situation has the duty to see to it that the road is
clear and not to proceed if he cannot do so in safety. 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 does not have the right to drive on the left hand side relying upon having time to
turn to the right if a car approaching from the opposite direction comes into view.

In the instant case, by his own admission, petitioner Mallari Jr. already saw that the
BULLETIN delivery van was coming from the opposite direction and failing to consider the
speed thereof since it was still dark at 5:00 o'clock in the morning mindlessly occupied the
left lane and overtook two (2) vehicles in front of it at a curve in the highway. Clearly, the
proximate cause of the collision resulting in the death of Israel Reyes, a passenger of the
jeepney, was the sole negligence of the driver of the passenger jeepney, petitioner Alfredo
Mallari Jr., who recklessly operated and drove his jeepney in a lane where overtaking was not

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allowed by traffic rules. Under Art. 2185 of the 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 a traffic regulation. As found by the appellate court,
petitioners failed to present satisfactory evidence to overcome this legal presumption.

The negligence and recklessness of the driver of the passenger jeepney is binding
against petitioner Mallari Sr., who admittedly was the owner of the passenger jeepney
engaged as a common carrier, considering the fact that in an action based on 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 damages sought by the passenger.
Under Art. 1755 of the Civil Code, a common carrier is bound to carry the passengers safely
as far as human care and foresight can provide using the utmost diligence of very cautious
persons with due regard for all the circumstances.

ALFREDO P. PACIS and CLEOPATRA D. PACIS vs. JEROME JOVANNE

MORALES,
[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.

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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,
and moral damages. Respondent appealed to the CA, which reversed the trial courts
Decision and absolved respondent from civil liability under Article 2180 of the Civil
Code. Motion of reconsideration is denied, hence this petition.

Issue:

Whether or not Morales is civilly liable?

Ruling:

Yes. Morales is civilly liable. Clearly, Morales did not exercise the degree of care and
diligence required of a good father of a family, much less the bullet which killed Alfred
was fired from a gun brought in by a customer of the gun store for repair.

This case for damages arouse out of the accidental shooting of Alfred. 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.

He was clearly negligent when he accepted the gun for repair and placed it inside
the drawer without ensuring first that it was not loaded. For failing to insure that the gun
was not loaded, Morales himself was negligent.
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 cancelled.

As a gun store owner, Morales 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. Morales 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.

In the first place, the defective gun should have been stored in a vault. Before
accepting the defective gun for repair, Morales should have made sure that it was not
loaded to prevent any untoward accident. Indeed, Morales 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.

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Jose V. Lagon, petitioner vs. Honorable Court of Appeals and Menandro V.

Lapuz, respondents
[G.R. No. 119107. March 18, 2005]

Facts:

Petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an
intestate court, two parcels of land located at Tacurong, Sultan Kudarat. A few months after
the sale, private respondent Menandro Lapuz filed a complaint for torts and damages against
petitioner before the Regional Trial Court (RTC) of Sultan Kudarat.

In the complaint, private respondent, as then plaintiff, claimed that he entered into a
contract of lease with the late Bai Tonina Sepi Mengelen Guiabar over three parcels of land
in Sultan Kudarat, Maguindanao beginning 1964. One of the provisions agreed upon was for
private respondent to put up commercial buildings which would, in turn, be leased to new
tenants. The rentals to be paid by those tenants would answer for the rent private
respondent was obligated to pay Bai Tonina Sepi for the lease of the land. In 1974, the lease
contract ended but since the construction of the commercial buildings had yet to be
completed, the lease contract was allegedly renewed.

When Bai Tonina Sepi died, private respondent started remitting his rent to the
court-appointed administrator of her estate. But when the administrator advised him to stop
collecting rentals from the tenants of the buildings he constructed, he discovered that

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petitioner, representing himself as the new owner of the property, had been collecting rentals
from the tenants. He thus filed a complaint against the latter, accusing petitioner of inducing
the heirs of Bai Tonina Sepi to sell the property to him, thereby violating his leasehold rights
over it.

In his answer to the complaint, petitioner denied that he induced the heirs of Bai
Tonina to sell the property to him, contending that the heirs were in dire need of money to
pay off the obligations of the deceased. He also denied interfering with private respondents
leasehold rights as there was no lease contract covering the property when he purchased it;
that his personal investigation and inquiry revealed no claims or encumbrances on the
subject lots.

Petitioner claimed that before he bought the property, he went to Atty.

Benjamin Fajardo, the lawyer who allegedly notarized the lease contract between
private respondent and Bai Tonina Sepi, to verify if the parties indeed renewed the
lease contract after it expired in 1974. Petitioner averred that Atty. Fajardo showed
him four copies of the lease renewal but these were all unsigned. To refute the
existence of a lease contract, petitioner presented in court a certification from the
Office of the Clerk of Court confirming that no record of any lease contract notarized
by Atty. Fajardo had been entered into their files. Petitioner added that he only
learned of the alleged lease contract when he was informed that private respondent
was collecting rent from the tenants of the building.

Finding the complaint for tortuous interference to be unwarranted, petitioner filed

his counterclaim and prayed for the payment of actual and moral damages.

Accordingly, judgment is hereby rendered in favor of the plaintiff.

The petitioner then filed a petition for review before the Supreme Court.

Issue:

WON the purchase by petitioner of the subject property, during the supposed existence of
private respondents lease contract with the late Bai Tonina Sepi, constituted tortuous
interference for which petitioner should be held liable for damages.

Ruling:

The Court, in the case of So Ping Bun vs. Court of Appeals , laid down the elements
of tortuous interference with contractual relations: (a) existence of a valid contract; (b)
knowledge on the part of the third person of the existence of the contract and (c)
interference of the third person without legal justification or excuse.

As regards the first element, the existence of a valid contract must be duly
established. To prove this, private respondent presented in court a notarized copy of the
purported lease renewal.While the contract appeared as duly notarized, the notarization
thereof, however, only proved its due execution and delivery but not the veracity of its
contents. Nonetheless, after undergoing the rigid scrutiny of petitioners counsel and after
the trial court declared it to be valid and subsisting, the notarized copy of the lease contract
presented in court appeared to be incontestable proof that private respondent and the late
Bai Tonina Sepi actually renewed their lease contract. Settled is the rule that until overcome

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by clear, strong and convincing evidence, a notarized document continues to be prima facie
evidence of the facts that gave rise to its execution and delivery.

The second element, on the other hand, requires that there be knowledge on the part
of the interferer that the contract exists. Knowledge of the subsistence of the contract is an
essential element to state a cause of action for tortuous interference. A defendant in such a
case cannot be made liable for interfering with a contract he is unaware of. While it is not
necessary to prove actual knowledge, he must nonetheless be aware of the facts which, if
followed by a reasonable inquiry, will lead to a complete disclosure of the contractual
relations and rights of the parties in the contract. In this case, petitioner claims that he had
no knowledge of the lease contract. His sellers (the heirs of Bai Tonina Sepi) likewise
allegedly did not inform him of any existing lease contract.

After a careful perusal of the records, we find the contention of petitioner

meritorious. He conducted his own personal investigation and inquiry, and unearthed no
suspicious circumstance that would have made a cautious man probe deeper and watch out
for any conflicting claim over the property. An examination of the entire propertys title bore
no indication of the leasehold interest of private respondent. Even the registry of property
had no record of the same.

In sum, we rule that, inasmuch as not all three elements to hold petitioner liable for
tortuous interference are present, petitioner cannot be made to answer for private
respondents losses. This case is one of damnun absque injuria or damage without injury.
Injury is the legal invasion of a legal right while damage is the hurt, loss or harm which
results from the injury.

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PROFESSIONAL SERVICES INC. V. AGANA

G.R. No. 126297, 31 January 2007

FACTS:

As presented previously.

ISSUE: Whether or not PSI is liable for the negligence of Dr. Ampil

RULING:

YES.
The hospital vicarious liability is anchored upon the theories of respondeat superior,
apparent authority, ostensible authority, or agency by estoppel. The statute governing
liability for negligent acts is Article 2176 of the Civil Code, which reads: Art. 2176. Whoever by
act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter.

A derivative of this provision is Article 2180, the rule governing vicarious liability under the
doctrine of respondeat superior, thus: ART. 2180. The obligation imposed by Article 2176 is
demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible.

Apparent authority, or what is sometimes referred to as the "holding out" theory, or

doctrine of ostensible agency or agency by estoppel, imposes liability, not as the result of
the reality of a contractual relationship, but rather because of the actions of a principal or an
employer in somehow misleading the public into believing that the relationship or the
authority exists. The concept is essentially one of an agency by implication or estoppel
of Article 1869 of the Civil Code which reads: ART. 1869. Agency may be express, or implied from
the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that
another person is acting on his behalf without authority.

By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their qualifications in the
hospital directory, the hospital created the impression that they were its agents, authorized to
perform medical or surgical services for its patients. As expected, these patients, Natividad
being one of them, accepted the services on the reasonable belief that such were being
rendered by the hospital or its employees, agents, or servants.

PSI has the duty to exercise reasonable care to protect from harm all patients admitted into its
facility for medical treatment. It is liable for the negligent acts of health practitioners, absent
facts to support tfyhe application of respondeat superior or apparent authority

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PSI is directly liable for such breach of duty doctrine of corporate negligence or corporate
responsibility. Not only did PSI breach its duties to oversee or supervise all persons who
practice medicine within its walls, it also failed to take an active step in fixing the negligence
committed. This renders PSI, not only vicariously liable for the negligence of Dr. Ampil
under Article 2180 of the Civil Code, but also directly liable for its own negligence
under Article 2176.

The Court CONFIRMED the rulings of the Court of Appeals that a hospital has the duty
of supervising the competence of the doctors on its staff. No reason to exempt hospitals
from the universal rule of respondeat superior.

PROFESSIONAL SERVICES INC. v. AGANA

G.R. No. 127590, February 2, 2010

FACTS:

Previous facts presented.

PSI was impleaded by Enrique Agana and Natividad Agana (later substituted by her heirs), in a
complaint for damages as owner, operator and manager of the hospital. On petition for
review, this Court, in its January 31, 2007 decision, affirmed the CA decision. PSI filed a
motion for reconsideration but the Court denied it in a resolution dated February 11, 2008.

The PSI filed a second motion for reconsideration urging referral thereof to the Court en banc
and seeking modification of the decision dated January 31, 2007 and resolution dated February
11, 2008 which affirmed its vicarious and direct liability for damages to respondents Enrique
Agana and the heirs of Natividad Agana (Aganas).

ISSUE: Whether or not PSI may be held liable for the negligence of physicians-
consultants allowed to practice in its premises

RULING:

YES.
The Court holds that PSI is liable to the Aganas, not under the principle of respondeat superior for
lack of evidence of an employment relationship with Dr. Ampil but under the principle
of ostensible agency for the negligence of Dr. Ampil and, pro hac vice, under the
principle of corporate negligence for its failure to perform its duties as a hospital.

To determine the existence of an employer-employee relationship between hospital and

doctor, the Court employs the "control test". PSI exercised control over respondents based
on the undisputed fact that in the emergency room, the operating room, or any department or
ward for that matter, respondents' work is monitored through its nursing supervisors, charge
nurses and orderlies. Without the approval or consent of PSI or its medical director, no
operations can be undertaken in those areas. For control test to apply, it is not essential for
the employer to actually supervise the performance of duties of the employee, it being enough
that it has the right to wield the power. Thus PSI is vicariously liable under Article 2176 in
relation to Article 1431 and Article 1869 of the Civil Code or the principle of apparent
authority.

PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent. It assumed a
duty to "tread on" the "captain of the ship" role of any doctor rendering services within its
premises for purpose of ensuring the safety of the patients availing themselves of its services

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and facilities. Thus, PSI could not simply wave off the problem and nonchalantly delegate to
Dr. Ampil the duty to review what transpired during the operation.

The wretchedness in this case could have been avoided had PSI simply done what was logical:
heed the report of a guaze count discrepancy, initiate a review of what went wrong and take
corrective measures to ensure the safety of Nativad. PSI committed corporate negligence by its
inaction. As hospital corporation, it gave rise to a direct liability to the Aganas distinct from
that of Dr. Ampil.

PSIs hospital liability based on ostensible agency and corporate negligence applies only to this
case, pro hac vice (for or on this occasion only) liable for every form of negligence of their
doctors-consultants under any and all circumstances.

The Court DENIED the motion of reconsideration. It ORDERED pro hac vice to pay
Natividad s heirs the total amount of P15 million, subject to 12% p.a. interest from the finality
of this resolution to full satisfaction. No further pleadings by any party shall be entertained in
this case.

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MAMARIL VS. BOYS SCOUTS OF THE PHILIPPINES (BSP), et. Al.

688 SCRA 437

Facts:

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PUJ operators Sps. Mamaril would park their 6 passenger jeepneys every night at BSPs
compound in Malate, Manila for a fee of P300.00 per month for each unit. One day, one of the vehicles
was missing and was never recovered. According to the security guards Pea and Gaddi of AIB
Security Agency with whom BSP had contracted for its security and protection, a male person who
looked familiar to them took the subject vehicle out of the compound. Sps. Mamaril prayed that Pea
and Gaddi, together with AIB and BSP, be held liable for: (a) the value of the subject vehicle; (b)
amount representing daily loss of income/boundary reckoned from the day the vehicle was lost; (c)
exemplary damages; (d) moral damages; (e) attorney's fees; and (f) cost of suit.

BSP denied any liability contending that not only did Sps. Mamaril directly deal with AIB with
respect to the manner by which the parked vehicles would be handled, but the parking ticket itself
expressly stated that the "Management shall not be responsible for loss of vehicle or any of its
accessories or article left therein." It also claimed that Sps. Mamaril erroneously relied on the Guard
Service Contract. Apart from not being parties thereto, its provisions cover only the protection of
BSP's properties, its officers, and employees.

Issue:

Whether BSP should be held liable for the loss of their vehicle based on the Guard Service
Contract and the parking ticket it issued.

Ruling:

No. The petition is without merit. In this case, it is undisputed that the proximate cause of the loss
of Sps. Mamarils vehicle was the negligent act of security guards Pena and Gaddi in allowing an
unidentified person to drive out the subject vehicle. Proximate cause has been defined as that cause,
which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the
injury or loss, and without which the result would not have occurred. Moreover, Pena and Gaddi failed
to refute Sps. Mamarils contention that they readily admitted being at fault during the investigation
that ensued. On the other hand, the records are bereft of any finding of negligence on the part of BSP.
Hence, no reversible error was committed by the CA in absolving it from any liability for the loss of the
subject vehicle based on fault or negligence.

Neither will the vicarious liability of an employer under Article 2180 of the Civil Code apply in
this case. It is uncontested that Pea and Gaddi were assigned as security guards by AIB to BSP
pursuant to the Guard Service Contract. Clearly, therefore, no employer-employee relationship existed
between BSP and the security guards assigned in its premises. Consequently, the latters negligence
cannot be imputed against BSP but should be attributed to AIB, the true employer of Pena and Gaddi.

In the case of Soliman, Jr. v. Tuazon, the Court enunciated thus:

It is settled that where the security agency, as here, recruits, hires and assigns the work
of its watchmen or security guards, the agency is the employer of such guards and
watchmen. Liability for illegal or harmful acts committed by the security guards
attaches to the employer agency, and not to the clients or customers of such agency.
As a general rule, a client or customer of a security agency has no hand in selecting
who among the pool of security guards or watchmen employed by the agency shall be
assigned to it; the duty to observe the diligence of a good father of a family in the
selection of the guards cannot, in the ordinary course of events, be demanded from
the client whose premises or property are protected by the security guards. The fact
that a client company may give instructions or directions to the security guards
assigned to it, does not, by itself, render the client responsible as an employer of the
security guards concerned and liable for their wrongful acts or omissions. Those

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instructions or directions are ordinarily no more than requests commonly envisaged
in the contract for services entered into with the security agency.