1. HEDY GAN y YU, v.
THE HONORABLE COURT OF situation confronting her and to ponder on which of the
APPEALS and the PEOPLE OF THE PHILIPPINES
September 19, 1988 ,G.R. No. L-44264 Fernan CJ
FACTS:
 In the morning of 4 July 1972, the accused Hedy Gan was driving
along North Bay Boulevard, Tondo, Manila.
- There were two vehicles parked on one side of the road a
truck and a jeepney, one following the other about 2-3m
parked.
 As the car driven by Gan approached the place where the two
vehicles were parked, there was a vehicle coming from the
opposite direction, followed by another, which tried to
overtake the one in front of it thereby encroaching the lane of
the car driven by Gan.
 To avoid a head-on collision, Gan swerved to the right and as a
consequence, hit an old man who was about to cross the
street, pinning him against the rear of one of the parked
jeepney.
 The force of the impact caused the parked jeepney to move
forward hitting the parts truck in front of it.
 The pedestrian was injured, Gan's car, the jeep and the truck
suffered damages.
 The pedestrian was pronounced dead on arrival at the hospital.
 Gan was convicted of Homicide thru reckless imprudence.
 On appeal, CA modified the trial court's decision convicting Gan
of Homicide thru simple imprudence.
ISSUE: WON Gan is guilty of homicide thru simple imprudence.
HELD:
Test for Determining Negligence Resulting in Injury or Damages;
Failure to take precautions to avoid the mischievous results of a
person’s course of action constitutes negligence.—
 The test for determining WON a person is negligent in doing an
act whereby injury or damage results to the person or property of
another is this: Would a prudent man in the position of the
person to whom negligence is attributed foresee harm to the
person injured as a reasonable consequence of the course
about to be pursued?
 If so, the law imposes the duty on the doer to take precaution
against its mischievous results and the failure to do so constitutes
negligence.
Emergency Rule, Defined.—
 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.
Appellant is not guilty of Homicide Thru Simple Imprudence, as
there was no showing that she had sufficient time to analyze the
situation and ponder on which course of action would result in
the least possible harm.—
 Applying the above tests to the case at bar, we find the petitioner
not guilty of the crime of Simple Imprudence resulting in
Homicide.
 The appellate court in finding the petitioner guilty said: “The
accused should have stepped on the brakes when she saw the
car going in the opposite direction followed by another which
overtook the first by passing towards its left. She should not only
have swerved the car she was driving to the right but should have
also tried to stop or lessen her speed so that she would not bump
into the pedestrian who was crossing at the time but also the
jeepney which was then parked along the street.”
 The course of action suggested by the appellate court 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
different courses of action would result in the least possible harm
to herself and to others.
 Due to the lack of eyewitnesses, no evidence was presented by
the prosecution with respect to the relative distances of petitioner
to the parked jeepney and the oncoming overtaking vehicle that
would tend to prove that petitioner did have sufficient time to
reflect on the consequences of her instant decision to swerve her
car to the right without stepping on her brakes.
 Petitioner certainly could not be expected to act with all the
coolness of a person under normal conditions. The danger,
confronting petitioner was real and imminent, threatening her very
existence. She had no opportunity for rational thinking but only
enough time to heed the very powerful instinct of self-
preservation.
2. G.R. No. L-68102 July 16, 1992
GEORGE MCKEE and ARACELI KOH MCKEE, petitioners,
vs IAC, 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. IAC, JAIME TAYAG and ROSALINDA MANALO, respondents.
FACTS:
 It was the 8th of January in 1977, at around 9:00 or 10:00 in the
morning in Pulong Pulo Bridge along MacArthur Highway,
somewhere between Angeles City and San Fernando, Pampanga
a head-on-collision took place between an International
cargo truck, Loadstar, owned by Tayag & Manalo, and driven
by Ruben Galang, and a Ford Escort car driven by Jose Koh.
 Jose Koh was driving his daughter, Araceli Koh McKee, and
her minor children, Christopher, George, and Kim, as well as
Kim’s babysitter, Loida Bondoc, from San Fernando, Pampanga in
the direction of Angeles City (northward) in a Ford Escort.
 Meanwhile, a cargo truck owned by Jaime Tayag and
Rosalinda Manalo, driven by Ruben Galang, was headed in the
opposite direction, from Angeles City to San Fernando
(southward), going to Manila.
- The cargo truck was considerable in size as it was carrying
200 hundred cavans of rice, which weighed 10 metric tons.
 As the Escort approached one Pulong-Pulo Bridge from the
southern portion, 2 boys suddenly ran from the right side of
the road into the Escort’s lane.
- As the boys were going back and forth, unsure of whether to
cross all the way or turn back, Jose blew his horn.
- He was then forced to swerve left and into the lane Galang
was driving in.
- Jose switched his headlights on, applied his brakes, and
attempted to return to his lane.
- However, he failed to get back into the right lane, and
collided with the cargo truck.
- The collision occurred on the bridge.
 The collision resulted in the deaths of the driver, Jose, the one-
year-old, Kim, and her babysitter, Loida, on whose lap she was
sitting. Loida was seated in the passenger seat. Araceli,
Christopher, and George, who were sitting in the back of the
Escort, received physical injuries from the collision.
 An information was filed against Ruben Galang, charging him for
reckless imprudence resulting in multiple homicide, physical
injuries, and damage to property.
- He was found guilty beyond reasonable doubt of the charges
in the information. The conviction was affirmed by the CA
and achieved finality after the denial by the CA of his MR and
the denial by the SC of his Petition for Review.
 Two civil cases were filed. The first one, by the wife and
children of Jose Koh, and the second one by Araceli and her
husband for the death of Kim and injuries to Araceli and her other
children.
 - The respondents were impleaded against as the employers
of Ruben Galang – Galang was not included. The cases
here are based on quasi-delict. These cases were eventually
consolidated.
TRIAL COURT: dismissed the civil cases and awarded the
respondents damages and attorney’s fees.
APPEAL TO THE IAC: the dismissal was reversed. This was based on
its finding that it was Galang’s inattentiveness or reckless imprudence
that caused the accident.
- However, upon filing by the respondents of an MR, the IAC
set aside its original decision and upheld that of the trial
court because the fact that Koh’s car invaded the lane of the
truck and the collision occurred while still in Galang’s lane
gave rise to the presumption that Koh was negligent.
ISSUE: Was the IAC correct in reversing their original decision?
HELD: NO. The petition has merit.
Procedural (not important): Given the circumstances, the cases (civil
and criminal) should have been consolidated to prevent separate
appreciation of the evidence. To be fair, the petitioners did move to
adopt the testimonies of the witnesses in the criminal case but the
motion was denied. The non-consolidation resulted in two conflicting
decisions. In any case, the guilty verdict of Galang was deemed by the
Court as irrelevant to the case at bar.
Civil Law; Negligence; The responsibility arising from fault or
negligence in a quasi-delict is entirely separate and distinct from
the civil liability arising from negligence under the Penal Code.—
 As We held in Dionisio vs. Alvendia, the responsibility arising
from fault or negligence in a quasi-delict is entirely separate and
distinct from the civil liability arising from negligence under the
Penal Code.
 And, as more concretely stated in the concurring opinion of
Justice J.B.L. Reyes, “in the case of independent civil action
under the new Civil Code, the result of the criminal case, whether
acquittal or conviction, would be entirely irrelevant to the civil
action.
In the absence of any collusion, the judgment of conviction in the
criminal case against Galang would have been conclusive in the
civil cases for the subsidiary liability of the Tayag and Manalo.—
 What remains to be the most important consideration as to
why the decision in the criminal case should not be considered in
this appeal is the fact that private respondents were not parties
therein.
 It would have been entirely different if the petitioners’ cause
of action was for damages arising from a delict, in which case
private respondents’ liability could only be subsidiary pursuant to
Article 103 of the Revised Penal Code.
In the assailed resolution, the respondent Court held that the fact that
the car improperly invaded the lane of the truck and that the collision
occurred in said lane gave rise to the presumption that the driver of the
car, Jose Koh, was negligent. On the basis of this presumed
negligence, the appellate court immediately concluded that it was Jose
Koh's negligence that was the immediate and proximate cause of the
collision
- This is an unwarranted deduction as the evidence for the
petitioners convincingly shows that the car swerved into the
truck's lane because as it approached the southern end of
the bridge, 2 boys darted across the road from the right
sidewalk into the lane of the car.
Definition of negligence.—
 Negligence was defined and described by this Court in
Layugan vs. IAC, thus: “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, or as Judge Cooley
defines it, ‘The failure to observe for the protection of the interests
of another person, that degree of care, precaution, and vigilance
which the circumstances justly demand, whereby such other
person suffers injury.’
Under what is known as the EMERGENCY 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.—
 On the basis of the foregoing definition, the test of
negligence and the facts obtaining in this case, it is manifest that
no negligence could be imputed to Jose Koh.
 Any reasonable and ordinary prudent man would have
tried to avoid running over the two boys by swerving the car
away from where they were even if this would mean entering
the opposite lane. Avoiding such immediate peril would be the
natural course to take particularly where the vehicle in the
opposite lane would be several meters away and could very well
slow down, move to the side of the road and give way to the
oncoming car.
- Considering the sudden intrusion of the 2 boys into the lane
of the car, We find that Jose Koh adopted the best means
possible in the given situation to avoid hitting them.
Applying the above test, therefore, it is clear that he was not
guilty of negligence.
Definition of proximate cause.—
 Proximate cause has been 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.’
- Applying the above definition, although it may be said that
the act of Jose Koh, if at all negligent, was the initial act in
the chain of events, it cannot be said that the same
caused the eventual injuries and deaths because of the
occurrence of a sufficient intervening event, the
negligent act of the truck driver, which was the actual
cause of the tragedy.
o The entry of the car into the lane of the truck would
not have resulted in the collision had the truck
heeded the emergency signals given by the car to
slow down and give the car an opportunity to go
back into its proper lane.
o Instead of slowing down and swerving to the far
right of the road, which was the proper
precautionary measure under the given
circumstances, the truck driver continued at full
speed towards the car.
o The truck driver's negligence becomes more
apparent in view of the fact that the road is 7.50
meters wide while the car measures 1.598 meters
and the truck, 2.286 meters, in width. This would
mean that both car and truck could pass side by
side with a clearance of 3.661 meters to spare.
o Furthermore, the bridge has a level sidewalk which
could have partially accommodated the truck. Any
reasonable man finding himself in the given
situation would have tried to avoid the car instead
of meeting it head-on.
Under Article 2185 of the Civil Code, a person driving a vehicle is
presumed negligent if at the time of the mishap, he was violating
any traffic regulation.—
 The truck driver’s negligence is apparent in the records. He
himself said that his truck was running at 30 miles (48 kilometers)
per hour along the bridge while the maximum speed allowed by
law on a bridge is only 30 kilometers per hour. Under Article 2185
of the Civil Code, a person driving a vehicle is presumed
negligent if at the time of the mishap, he was violating any traffic
regulation.
DOCTRINE OF LAST CLEAR CHANCE; The doctrine states that
the contributory negligence of the party injured will not defeat the
claim for damages if it is shown that the defendant might, by the
exercise of reasonable care and prudence, have avoided the
consequences of the negligence of the injured party.—
 In such cases, the person who had the last clear chance to
avoid the mishap is considered in law solely responsible for the
consequences thereof.
Applying the foregoing doctrine, it is not difficult to rule that it
was the truck driver’s negligence in failing to exert ordinary care
to avoid the collision which was in law the proximate cause of the
collision; Employers directly and primarily liable for the resulting
damages.—
 As employers of the truck driver, Tayag and Manalo are,
under Article 2180 of the Civil Code, directly and primarily liable
for the resulting damages.
 The presumption that they are negligent flows from the
negligence of their employee. That presumption, however, is
only juris tantum, not juris et de jure. Their only possible
defense is that they exercised all the diligence of a good father of
a family to prevent the damage.
3. VICENTE CALALAS vs. COURT OF APPEALS, ELIZA
JUJEURCHE SUNGA and FRANCISCO SALVA G.R. No.
122039. May 31, 2000
Facts:
 At 10am private respondent Eliza Sunga then a college
freshman majoring in Physical Education at the Siliman University,
took a passenger jeepney owned and operated by 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.
 Along the way, the jeepney stopped to let a passenger off.
 As she was seated at the rear of the vehicle, Sunga gave
way to the outgoing passenger. Just as she was doing so, an
Isuzu truck driven by Iglecerio Verena and owned by Francisco
Salva bumped the left rear portion of the jeepney. As a result,
Sunga was injured.
 Sunga filed a complaint against Calalas for violation of
contract of carriage. Calalas filed a third party complaint against
Salva.
TC: held Salva liable and absolved Calalas, taking cognizance of
another civil case (Civ Case 3490) for quasi-delict wherein Salva and
Verena were held liable to Calalas.
CA: reversed the decision and found Calalas liable to Sunga for
violation of contract of carriage.
Issues:
(1) Whether the decision in the case for quasi delict between Calalas
on one hand and Salva and Verena on the other hand, is res judicata
to the issue in this case
(2) Whether Calalas exercised the extraordinary diligence required in
the contract of carriage
Held:
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.—
 In case of death or injuries to passengers, Art. 1756 of the
Civil Code provides that common carriers are presumed to have
been at fault or to have acted negligently unless they prove that
they observed extraordinary diligence as defined in Arts. 1733
and 1755 of the Code. This provision necessarily shifts to the
common carrier the burden of proof.
Doctrine of Proximate Cause; The doctrine of proximate cause is
applicable only in actions for quasi-delicts, not in actions
involving breach of contract.—
 There is, thus, no basis for the contention that the ruling in
Civil Case No. 3490, finding Salva and his driver Verena liable
for the damage to petitioner’s jeepney, should be binding on
Sunga. It is immaterial that the proximate cause of the collision
between the jeepney and the truck was the negligence of the
truck driver.
 The doctrine 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.
Presumption of Negligence; Upon the happening of the accident,
the presumption of negligence at once arises, and it becomes the
duty of a common carrier to prove that he observed extraordinary
diligence in the care of his passengers.—
 Now, did the driver of jeepney carry Sunga “safely as far as
human care and foresight could provide, using the utmost
diligence of very cautious persons, with due regard for all the
circumstances” as required by Art. 1755? We do not think so.
Several factors militate against petitioner’s contention.
Fortuitous Event; The taking of an “extension seat” is not an
implied assumption of risk on the part of the passenger; A caso
fortuito is an event which could not be foreseen, or which, though
foreseen, was inevitable; Requisites.—
 We find it hard to give serious thought to petitioner’s
contention that Sunga’s taking an “extension seat” amounted to
an implied assumption of risk.
- It is akin to arguing that the injuries to the many victims of
the tragedies in our seas should not be compensated merely
because those passengers assumed a greater risk of
drowning by boarding an overloaded ferry.
 This is also true of petitioner’s contention that the jeepney
being bumped while it was improperly parked constitutes caso
fortuito. A caso fortuito is an event which could not be foreseen, or
which, though foreseen, was inevitable. This requires that the
following requirements be present:
a) the cause of the breach is independent of the debtor’s will
b) the event is unforeseeable or unavoidable;
c) the event is such as to render it impossible for the debtor to
fulfill his obligation in a normal manner; and
d) the debtor did not take part in causing the injury to the
creditor.
Petitioner should have foreseen the danger of parking his jeepney
with its body protruding two meters into the highway.
Damages; As a general rule, moral damages are not recoverable
in actions for damages predicated on a breach of contract for it is
not one of the items enumerated under Art. 2219 of the Civil Code.
—
 As an exception, such damages are recoverable: (1) in
cases in which the mishap results in the death of a passenger, as
provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code;
and (2) in the cases in which the carrier is guilty of fraud or bad
faith, as provided in Art. 2220.
Bad Faith; The common carrier’s admission in open court that his
driver failed to assist the injured passenger in going to a nearby
hospital cannot be construed as an admission of bad faith.—
 In this case, there is no legal basis for awarding moral
damages since there was no factual finding by the appellate
court that petitioner acted in bad faith in the performance of
the contract of carriage.
 Sunga’s contention that petitioner’s admission in open court
that the driver of the jeepney failed to assist her in going to a
nearby hospital cannot be construed as an admission of bad
faith. The fact that it was the driver of the Isuzu truck who took
her to the hospital does not imply that petitioner was utterly
indifferent to the plight of his injured passenger. If at all, it is
merely implied recognition by Verena that he was the one at fault
for the accident.
4. ROMULO ABROGAR and ERLINDA ABROGAR
vs. COSMOS BOTTLING COMPANY and INTERGAMES,
INC.
G.R. No. 164749. March 15, 2017
SUMMARY: This case involves a claim for damages arising from the
negligence causing the death of a participant in an organized
marathon bumped by a passenger jeepney on the route of the
race. The issues revolve on whether the organizer and the sponsor of
the marathon were guilty of negligence, and, if so, was their
negligence the proximate cause of the death of the participant; on
whether the negligence of the driver of the passenger jeepney was an
efficient intervening cause; on whether the doctrine of assumption of
risk was applicable to the fatality; and on whether the heirs of the
fatality can recover damages for loss of earning capacity of the latter
who, being then a minor, had no gainful employment.
FACTS:
 To promote the sales of "Pop Cola", defendant Cosmos,
jointly with Intergames, organized an endurance running contest
billed as the "1st Pop Cola Junior Marathon”.
- The organizers plotted a 10 km course starting from the
premises of the Interim Batasang Pambansa, through public
roads and streets, to end at the Quezon Memorial Circle.
 Plaintiffs' son Rommel applied to be allowed to participate in
the contest and after complying with defendants' requirements,
his application was accepted and he was given an official
number.
 Consequently, at the designated time of the marathon,
Rommel joined the other participants and ran the course plotted
by the defendants.
- As it turned out, the plaintiffs' further alleged, the defendants
failed to provide adequate safety and precautionary
measures and to exercise the diligence required of them by
the nature of their undertaking, in that they failed to
insulate and protect the participants of the marathon
from the vehicular and other dangers along the
marathon route.
 Rommel was bumped by a jeepney that was then
running along the route of the marathon on Don Mariano
Marcos Avenue, and in spite of medical treatment given to
him at the Ospital ng Bagong Lipunan, he died later that
same day due to severe head injuries. CAIHTE
The parents Abrograr sued the Cosmos and Intergames in the then
CFI of Rizal to recover various damages for the untimely death of
Rommel.
 Cosmos denied liability, insisting that it had not been
the organizer of the marathon, but only its sponsor;
- that its participation had been limited to providing financial
assistance to Intergames;
- that the financial assistance it had extended to Intergames,
the sole organizer of the marathon, had been in answer to
the Government's call to the private sector to help promote
sports development and physical fitness;
- that the petitioners had no cause of action against it because
there was no privity of contract between the participants in
the marathon and Cosmos; and
- that it had nothing to do with the organization, operation and
running of the event.
Intergames asserted that Rommel's death had been an accident
exclusively caused by the negligence of the jeepney driver;
 that it was not responsible for the accident; that as the
marathon organizer, it did not assume the responsibilities of an
insurer of the safety of the participants;
 that it nevertheless caused the participants to be covered
with accident insurance, but the petitioners refused to accept the
proceeds thereof;
 that there could be no cause of action against it because the
acceptance and approval of Rommel's application to join the
marathon had been conditioned on his waiver of all rights and
causes of action arising from his participation in the marathon;
 that it exercised due diligence in the conduct of the race that
the circumstances called for and was appropriate, it having
availed of all its know-how and expertise, including the adoption
and implementation of all known and possible safety and
precautionary measures in order to protect the participants from
injuries arising from vehicular and other forms of accidents.
ISSUES:
1) WON Intergames was not negligent considering that:
a) Intergames failed to exercise the diligence of a good father
of the family in the conduct of the marathon in that it did not
block off from traffic the marathon route; and
b) Intergames' preparations for the race, including the number
of marshal during the marathon, were glaringly inadequate to
prevent the happening of the injury to its participants.
2) WON the doctrine of assumption of risk finds application to the
case at bar even though getting hit or run over by a vehicle is not
an inherent risk in a marathon race.
- Even assuming arguendo that deceased Abrogar made such
waiver as claimed, still there can be no valid waiver of one's
right to life and limb for being against public policy.
3) WON Cosmos is absolved from liability to petitioners on the sole
ground that respondent Cosmos' contract with respondent
Intergames contained a stipulation exempting the former from
liability.
4) WON the petitioners are entiled to actual, moral and exemplary
damages for the death of their child, Rommel Abrogar.
RULING:
1) INTERGAMES WAS NOT NEGLIGENT IN ORGANIZING
MARATHON
YES. Negligence is the failure to observe for the protection of
the interests of another person that degree of care,
precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury.
 Under Article 1173 of the Civil Code, it consists of the
"omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the person,
of the time and of the place. The Civil Code makes liability for
negligence clear under Article 2176, and Article 20.
 This Court finds that the standard of conduct used by the TC
is not the ordinary conduct of a prudent man in such a given
situation.
- According to the said court, the only way to conduct a safe
road race is to block off the traffic for the duration of the
event and direct the cars and public utilities to take
alternative routes in the meantime that the marathon event is
being held.
- Such standard is too high and is even inapplicable in the
case at bar because, there is no alternative route from IBP to
Don Mariano Marcos to Quezon City Hall.
 The Civil Code provides that if the law or contract does not
state the diligence which is to be observed in the
performance of an obligation that which is expected of a good
father of the family shall only be required.
 Accordingly, appellant Intergames is only bound to exercise
the degree of care that would be exercised by an ordinarily careful
and prudent man in the same position and circumstances and not
that of the cautious man of more than average prudence. Hence,
appellant Intergames is only expected to observe ordinary
diligence and not extraordinary diligence.
- In this case, the marathon was allowed by the Northern
Police District, MPF, Quezon City on the condition that the
road should not be blocked off from traffic. Appellant
Intergames had no choice. It had to comply with it or
else the said marathon would not be allowed at all
GR: is that the party who relies on negligence for his cause of action
has the burden of proving the existence of the same, otherwise his
action fails.
 Here, the appellants-spouses failed to prove that there was
inadequate number of marshals, police officers, and personnel
because they failed to prove what number is considered
adequate.
 This court considers that seven (7) traffic operatives, five (5)
motorcycle policemen, fifteen (15) patrolmen deployed along the
route, fifteen (15) boyscouts, twelve (12) CA Ts, twenty (20)
barangay tanods, three (3) ambulances and three (3) medical
teams were sufficient to stage a safe marathon.
 It appears that Rommel Abrogar, while running on Don
Mariano Marcos Avenue and after passing the Philippine Atomic
Energy Commission Building, was bumped by a jeepney which
apparently was racing against a minibus and the two vehicles
were trying to crowd each other. In fact, a criminal case was filed
against the jeepney driver by reason of his having killed Rommel
Abrogar.
 - This proves that the death of Rommel Abrogar was caused
by the negligence of the jeepney driver. Rommel Abrogar
cannot be faulted because he was performing a legal act; the
marathon was conducted with the permission and approval
of all the city officials involved. He had the right to be there.
Neither can the appellant Intergames be faulted, as the
organizer of the said marathon, because it was not negligent
in conducting the marathon.
 Given the facts of this case, We believe that no amount
of precaution can prevent such an accident.
- Even if there were fences or barriers to separate the lanes
for the runners and for the vehicles, it would not prevent
such an accident in the event that a negligent driver loses
control of his vehicle.
- And even if the road was blocked off from traffic, it would still
not prevent such an accident, if a jeepney driver on the other
side of the road races with another vehicle loses control of
his wheel and as a result hits a person on the other side of
the road. Another way of saying this is: A defendant's tort
cannot be considered a legal cause of plaintiffs damage if
that damage would have occurred just the same even
though the defendant's tort had not been committed.
2) NO. The doctrine of assumption of risk means that one who
voluntarily exposes himself to an obvious, known and
appreciated danger assumes the risk of injury that may result
therefrom.
 It rests on the fact that the person injured has consented to
relieve the defendant of an obligation of conduct toward him and
to take his chance of injury from a known risk, and whether the
former has exercised proper caution or not is immaterial. In other
words, it is based on voluntary consent, express or implied, to
accept danger of a known and appreciated risk;
- it may sometimes include acceptance of risk arising from the
defendant's negligence, but one does not ordinarily assume
risk of any negligence which he does not know and
appreciate.
 As a defense in negligence cases, therefore, the doctrine
requires the concurrence of three elements, namely;
a) the plaintiff must know that the risk is present;
b) he must further understand its nature; and
c) his choice to incur it must be free and voluntary.
- Neither was the waiver by Rommel, then a minor, an
effective form of express or implied consent in the
context of the doctrine of assumption of risk.
- There is ample authority, cited in Prosser, to the effect that a
person does not comprehend the risk involved in a known
situation because of his youth, or lack of information or
experience, and thus will not be taken to consent to assume
the risk. Clearly, the doctrine of assumption of risk does not
apply to bar recovery by the petitioners.
3) YES. The sponsorship of the marathon by Cosmos was
limited to financing the race. Cosmos did nothing beyond that,
and did not involve itself at all in the preparations for the actual
conduct of the race. This verity was expressly confirmed by
Intergames, through Castro, Jr.
4) YES. Art. 2202. In crimes and quasi-delicts, the defendant shall
be liable for all damages which are the natural and probable
consequences of the act or omission complained of. It is not
necessary that such damages have been foreseen or could have
reasonably been foreseen by the defendant.
WHEREFORE, the Court PARTLY AFFIRMS the decision promulgated
on March 10, 2004 to the extent that it absolved COSMOS BOTTLING
COMPANY, INC. from liability; REVERSES and SETS ASIDE the
decision as to INTERGAMES, INC., and REINSTATES as to it the
judgment rendered on May 10, 1991 by the Regional Trial Court,
Branch 83, in Quezon City subject to
the MODIFICATIONS that INTERGAMES, INC. is ORDERED TO
PAY to the petitioners, in addition to the aw3:rds thereby allowed: (a)
the sum of ₱l13,484.52 as damages for the loss of Rommel Abrogar's
earning capacity; (b) interest of 6% per annum on the actual damages,
moral damages, exemplary damages and loss of earning capacity
reckoned from May 10, 1991 until full payment; (c) compounded
interest of 6% per annum from the finality of this decision until full
payment; and (d) costs of suit.
5. M. H. RAKES v. ATLANTIC
GR No. 1719, January 23, 1907
Summary: Rakes was at work transporting iron rails from a barge in
the harbor to the company’s yard. At a certain spot near the water’s
edge, the track sagged, the car canted, the rails slid off and caught
Rakes. He was amputated at about the knee. Rakes claims that only
one hand car was used in his work. Atlantic has proved that there were
two, so that the end of the rails lay upon sills secured to the cars, but
without side pieces to prevent them from slipping off.
Facts:
 The M.H. Rakes was one of a gang of 8 negro laborers in
the employment of Atlantic, Gulf and Pacific Company, was at
work transporting iron rails from a barge in the harbor to the
company's yard.
 M.H. Rakes claims that one hand car was used in this work.
The defendant has proved that there were two immediately
following one another, upon which were piled lengthwise seven
rails, each weighing 560 pounds, so that the ends of the rails lay
upon two crosspieces or sills secured to the cars, but without side
pieces or guards to prevent them from slipping off.
 The rails lay upon two crosspieces or sills secured to
the cars, but without side pieces or guards to prevent them
from slipping off.
- According to the testimony of the plaintiff, the men were
either in the rear of the car or at its sides. According to that of
the defendant, some of them were also in front, hauling by a
rope.
- At a certain spot at or near the water's edge the track
sagged, the tie broke, the car either canted or upset, the rails
slid off and caught the plaintiff, breaking his leg, which was
afterwards amputated at about the knee.
 The cause of the sagging of the track and the breaking
of the tie, which was the immediate occasion of the accident,
is not clear in the evidence, but is found by the trial court and is
admitted in the briefs and in the argument to have been the
dislodging of the crosspiece or piling under the stringer by
the water of the bay raised by a recent typhoon. No effort was
made to repair the injury at the time of the occurrence.
 In order to charge the defendant with negligence, it was
necessary to show a breach of duty on its part in failing either to
properly secure the load of iron to the vehicles transporting it, or
to skillfully build the tramway or to maintain it in proper condition,
or to vigilantly inspect and repair the roadway as soon as the
depression in it became visible. It is upon the failure of the
defendant to repair the weakened track, after notice of its
condition, that the judge below based his judgment.
Issues: WON the company is liable
Ruling: Yes. The most controverted question in the case is that of the
negligence of the plaintiff, contributing to the accident, to what extent it
existed in fact and what legal effect is to be given it. In two particulars
is he charged with carelessness:
a) that having noticed the depression in the track he continued his
work; and
b) that he walked on the ends of the ties at the side of the car
instead of along the boards, either before or behind it.
As to the first point, the depression in the track might indicate
either a serious or a trivial difficulty. There is nothing in the
evidence to show that the plaintiff did or could see the displaced timber
underneath the sleeper.
 The claim that he must have done so is a conclusion drawn
from what is assumed to have been a probable condition of things
not before us, rather than a fair inference from the testimony.
While the method of construction may have been known to the
men who had helped build the road, it was otherwise with the
plaintiff who had worked at this job less than two days.
On this point we accept the conclusion of the trial judge who found as
facts that the plaintiff did not know the cause of the one rail being
lower than the other and it does not appear in this case that the
plaintiff knew before the accident occurred that the stringers and
rails joined in the same place.
In respect of the second charge of negligence against the plaintiff,
the judgment below is not so specific.
 While the judge remarks that the evidence does not justify
the finding that the car was pulled by means of a rope attached to
the front end or to the rails upon it, and further that the
circumstances in evidence make it clear that the persons
necessary to operate the car could not walk upon the plank
between the rails and that, therefore, it was necessary for the
employees moving it to get hold upon it as best they could, there
is no specific finding upon the instruction given by the defendant
to its employees to walk only upon the planks, nor upon the
necessity of the plaintiff putting himself upon the ties at the side in
order to get hold upon the car.
 Therefore the findings of the judge below leave the conduct
of the plaintiff in walking along the side of the loaded car, upon the
open ties, over the depressed track, free to our inquiry.
Difficulty seems to be apprehended in deciding which acts of the
injured party shall be considered immediate causes of the accident.
The test is simple. Distinction must be made between the accident and
the injury, between the event itself, without which there could have
been... no accident, and those acts of the victim not entering into it,
independent of it, but contributing to his own proper hurt.
Accepting, though with some hesitation, the judgment of the trial court,
fixing the damage incurred by the plaintiff at P5,000, the equivalent of
$2,500, we deduct therefrom P2,500, the amount fairly attributable to
his negligence, and direct judgment to be entered in favor of the
plaintiff for the resulting sum of P2,500.
VOLENTI NON FIT INIURIA (or injuria) (Latin: "to a willing person,
injury is not done")
This doctrine holds that a person who knowingly and willingly puts
himself in a dangerous situation cannot sue for any resulting injuries.
CIVIL LIABILITY FOR DAMAGES.—
 In order to enforce the liability of an employer for injuries to his
employee, it is not necessary that a criminal action be first
prosecuted against the employer or his representative primarily
chargeable with the accident. No criminal proceeding having been
taken, the civil action may proceed to judgment.
LIABILITY OF EMPLOYER TO WORKMEN.—
 The responsibility of an employer to his employee arises out of
the contractual relations between them and is regulated by article
1101 and the following articles of the Civil Code.
FELLOW-SERVANT RULE.—
 The doctrine known as the "Fellow-servant rule," exonerating the
employer where the injury was incurred through the negligence of
a fellow-servant of the employee injured, is not adopted in
Philippine jurisprudence.
CONTRIBUTORY NEGLIGENCE.—
 The negligence of the injured person contributing to his injury but
not being one of the determining causes of the principal accident,
does not operate as a bar to recovery, but only in reduction of his
damages. Each party is chargeable with damages in proportion to
his fault. Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil., 359, No.
1719 January 23, 1907
6. JUAN BERNARDO vs. M. B. LEGASPI
(G.R. No. 9308. December 23, 1914)
COLLISION TROUGH MUTUAL NEGLIGENCE.
Where two automobiles, going in opposite directions collide on turning
a street corner, and it appears from the evidence and is found by the
trial court that the drivers thereof were equally negligent and
contributed equally to the principal occurrence as determining causes
thereof, neither can recover of the other for the damages suffered.
FACTS:
 This is an appeal from a judgment of the CFI of the city of Manila
dismissing the complaint on the merits filed in an action to recover
damages for injuries sustained by plaintiff’s automobile by reason
of defendant’s negligence in causing a collision between his
automobile and that of plaintiff.
 The court in its judgment also dismissed a cross-complaint filed
by the defendant, praying for damages against the plaintiff on the
ground that the injuries sustained by defendant’s automobile
in the collision referred to, as well as those to plaintiff’s
machine, were caused by the negligence of the plaintiff in
handling his automobile.
ISSUE: WON the plaintiff is negligent in handling his automobile
HELD:
 The court found upon the evidence that both the plaintiff and the
defendant were negligent in handling their automobiles and that
said negligence was of such a character and extent on the part of
both as to prevent either from recovering. Where the plaintiff in a
negligence action, by his own carelessness contributes to the
principal occurrence, that is, to the accident, as one of the
determining causes thereof, he cannot recover. This is equally
true of the defendant; and as both of them, by their negligent acts,
contributed to the determining cause of the accident, neither can
recover.
7. THE SPOUSES BERNABE AFRICA and SOLEDAD C.
AFRICA, and the HEIRS OF DOMINGA ONG vs. CALTEX
(PHIL.), INC., MATEO BOQUIREN and THE CO URT OF
APPEALS
G.R. No. L-12986, March 31, 1966
The action is for damages under Articles 1902 and 1903 of the old Civil
Code.
FACTS:
 It appears that in the afternoon of March 18, 1948 a fire broke out
at the Caltex service station in Manila. It started while gasoline
was being hosed from a tank truck into the underground storage,
right at the opening of the receiving truck where the nozzle of the
hose was inserted. The fire then spread to and burned several
neighboring houses, including the personal properties and effects
inside them.
 The owners of the houses, among them petitioners here, sued
Caltex (owner of the station) and Boquiren (agent in charge of
operation).
TC and CA: found that petitioners failed to prove negligence and that
respondents had exercised due care in the premises and with respect
to the supervision of their employees.
 Both Courts refused to apply the doctrine of res ipsa loquitur on
the grounds that “as to its applicability in the Philippines, there
seems to be nothing definite,” and that while the rules do not
prohibit its adoption in appropriate cases, “in the case at bar,
however, we find no practical use for such doctrine.”
ISSUE: WON without proof as to the cause and origin of the fire, the
doctrine of res ipsa loquitur should apply so as to presume negligence
on the part of appellees. - YES
RULING:
Presumption of negligence under the doctrine of res ipsa loquitur.
Where the thing which caused injury, without fault of the injured
person, is under the exclusive control of the defendant and the
injury is such as in the ordinary course of things does not occur if he
having such control use proper care, it affords reasonable evidence, in
the absence of the explanation, that the injury arose from
defendant's want of care.
 In the case at bar, the gasoline station, with all its appliances,
equipment and employees, was under the control of appellees.
 A fire occurred therein and spread to and burned the neighboring
houses. The persons who knew or could have known how the fire
started were appellees and their employees, but they gave no
explanation thereof whatsoever. It is a fair and reasonable
 inference that the incident happened because of want of
care.
 The report by the police officer regarding the fire, as well as the
statement of the driver of the gasoline tank wagon who was
transferring the contents thereof into the underground storage
when the fire broke out, strengthen the presumption of
negligence. Verily
1) the station is a very busy district and pedestrians often pass
through or mill round the premises
2) the area is used as a car barn for around 10 taxicabs owned
by Boquiren;
3) a store where people hang out and possibly smoke
cigarettes is located one meter from the hole of the
underground tank; and
4) the concrete walls adjoining the neighborhood are only 2 ½
meter high at most and cannot prevent the flames from
leaping over it in case of fire.
Torts; Quasi-delicts; Force majeure; Intervention of unforeseen
and unexpected cause.
 The intervention of an unforeseen and unexpected cause is not
sufficient to relieve a wrongdoer from consequences of
negligence, if such negligence directly and proximately
cooperates with the independent cause in the resulting injury.
 Gasoline is a highly combustible material, in the storage and sale
of which extreme care must be taken. On the other hand, fire is
not considered a fortuitous event, as it arises almost invariably
from some act of man.
8. REPUBLIC OF THE PHILIPPINES vs.
LUZON STEVEDORING CORPORATION
FACTS:
 In the early afternoon of August 17, 1960, a barge owned by the
Luzon Stevedoring Corporation was being towed down the Pasig
river by tugboats "Bangus" and "Barbero" also belonging to the
same corporation, when the barge rammed against one of the
wooden piles of the Nagtahan bailey bridge, smashing the
posts and causing the bridge to list.
- The river, at the time, was swollen and the current swift, on
account of the heavy downpour of Manila and the
surrounding provinces on August 15 and 16, 1960.
 Sued by the RP for actual and consequential damage caused by
its employees, defendant Luzon Stevedoring Corporation
disclaimed liability, on the grounds
- that it had exercised due diligence in the selection and
supervision of its employees;
- that the damages to the bridge were caused by force
majeure;
- that plaintiff has no capacity to sue; and
- that the Nagtahan bailey bridge is an obstruction to
navigation. After due trial, the court rendered judgment
holding the defendant liable for the damage.
ISSUE: WON the collision of Luzon's barge with the supports or piers
of the Nagtahan bridge was in law caused by fortuitous event or force
majeure- NO.
Ruling:
Civil law; Damages; Presumption of negligence; Case at bar—
 Considering that the Nagtahan bridge was an immovable and
stationary object and uncontrovertedly provided with adequate
openings for the passage of water craft, including barges like
those of appellant's, it is undeniable that the unusual event
that the barge, exclusively controlled by appellant, rammed
the bridge supports raises a presumption of negligence on
the part of appellant or its employees manning the barge or
the tugs that towed it.
 In the ordinary course of events, such a thing does not happen if
proper care is used.
 In Anglo American Jurisprudence, the inference arises by what is
known as the “res ipsa loquitur” rule.
The appellant strongly stresses the precautions taken by it:
1) that it assigned two of its most powerful tugboats to tow
down river its barge
2) that it assigned to the task the more competent and
experienced among its patrons,
3) had the towlines, engines and equipment double-checked
and inspected;
4) that it instructed its patrons to take extra precautions; and
concludes that it had done all it was called to do, and that the
accident, therefore, should be held due to force majeure or
fortuitous event.
 These very precautions, however, completely destroy the
appellant's defense.
Meaning of “caso fortuito” or “force majeure”. —
 Caso fortuito or force majeure (which in law are identical in so far
as they exempt an obligor from liability) by definition are extra-
ordinary events not foreseeable or avoidable, “events that could
not be foreseen, or which, though foreseen, were inevitable” (Art.
1174, Civil Code). It is, therefore, not enough that the event could
not have been foreseen or anticipated, as is commonly believed,
but it must be one impossible to foresee or to avoid.
 The mere difficulty to foresee the happening is not
impossibility to foresee the same. The very measures
adopted by appellant prove that the possibility of danger was
not only foreseeable, but actually foreseen, and was not caso
fortuito.
 Otherwise stated, Luzon Stevedoring Corporation, knowing and
appreciating the perils posed by the swollen stream and its swift
current, voluntarily entered into a situation involving obvious
danger; it therefore assured the risk, and can not shed
responsibility merely because the precautions it adopted
turned out to be insufficient. Hence, the lower Court committed
no error in holding it negligent in not suspending operations and in
holding it liable for the damages caused.
9. SCHMITZ TRANSPORT & BROKERAGE CORPORATION,
petitioner, vs. TRANSPORT VENTURE, INC.,
INDUSTRIAL INSURANCE COMPANY, LTD., and BLACK
SEA SHIPPING AND DODWELL now INCHCAPE
SHIPPING SERVICES, respondents.
G.R. No. 150255. April 22, 2005.
J. Carpio-Morales
FACTS.
 SYTCO Pte Ltd. Singapore shipped from Russia on board M/V
"Alexander Saveliev" (a vessel of Russian registry and owned by
Black Sea) 545 hot rolled steel sheets in coil.
 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.
 The vessel arrived at the port of Manila and was assigned place
of berth at the outside breakwater at the Manila South Harbor.
Little Giant engaged the services of Schmitz Transport to
secure the requisite clearances, to receive the cargoes from the
shipside, and to deliver them to its warehouse. Schmitz Transport,
in turn engaged the services of TVI through a Service Contract to
send a barge and tugboat at shipside.
 TVI‘s tugboat, after positioning the barge alongside the vessel, left
and returned to the port terminal. Then thearrastre operator
commenced to unload 37 of the 545 coils from the vessel unto the
barge. The weather condition had become inclement but the
unloading unto the barge of the 37 coils was accomplished.
However, no tugboat pulled the barge back to the pier.
- 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. Almost two hours later, a tugboat finally
arrived to pull the already empty and damaged barge back to
the pier.
 Little Giant thus filed a formal claim against the insurance
company, Industrial Insurance which paid it the amount of
₱5,246,113.11. In the exercise of its right of subrogation, Industrial
Insurance later filed a complaint against Schmitz Transport, TVI,
and Black Sea through its representative Inchcape for recovery of
sum of money. Industrial Insurance faulted the defendants for
undertaking the unloading of the cargoes while typhoon signal No.
1 was raised in Metro Manila.
RTC Manila held all the defendants negligent for unloading the cargoes
outside of the breakwater notwithstanding the storm signal hence
solidarily liable for the loss of 37 hot rolled steel sheets in coil that were
washed overboard the barge. Defendants‘ motion for reconsideration
was denied.
CA affirmed the Decision and Resolution of the RTC. The appellate
court ruled that "each one was essential such that without each other‘s
contributory negligence the incident would not have happened and that
"although defendants obviously had nothing to do with the force of
nature, they however had control of where to anchor the vessel, where
discharge will take place and even when the discharging will
commence."
 Schmitz Transport (as petitioner) filed the present petition against
TVI, Industrial Insurance and Black Sea.Petitioner 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.
 By its Comment, Black Sea argued that the cargoes were
received by Little Giant through Schmitz Transport in good order,
hence, it cannot be faulted, it having had no control and
supervision thereover.For its part, TVI maintained that it acted as
a passive party as it merely received the cargoes and transferred
them unto the barge upon the instruction of Schmitz Transport.
ISSUES
1. WON the loss of the cargoes was due to a fortuitous event,
independent of any act of negligence on the part of Schmitz Transport,
Black Sea and TVI.
2. If there was negligence, whether or not liability for the loss may
attach to Black Sea, Schmitz Transport and TVI.
RULING:
Obligations and Contracts; Negligence; Fortuitous Events; The
principle embodied in the 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.—
 In order, to be considered a fortuitous event, however, (1) the
cause of the unforeseen and unexpected occurrence, or the
failure of the debtor to comply with his obligation, must be
independent of human will; (2) it must be impossible to foresee
the event which constitute the caso fortuito, or if it can be
foreseen it must be impossible to avoid; (3) the occurrence must
be such as to render it impossible for the debtor to fulfill his
obligation in any manner; and (4) the obligor must be free from
any participation in the aggravation of the injury resulting to the
creditor.
 [T]he principle embodied in the 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.
From a review of the records of the case, there is no indication that
there was greater risk in loading the cargoes outside the breakwater.
As the defendants proffered, the weather remained normal with
moderate sea condition such that port operations continued and
proceeded normally. The weather data report verified by PAGASA
states that while typhoon signal No. 1 was hoisted over Metro Manila,
the sea condition at the port of Manila was moderate. It cannot,
therefore, be said that the defendants were negligent in not unloading
the cargoes upon the barge on inside the breakwater.
That no tugboat towed back the barge to the pier after the cargoes
were completely loaded by 12:30 in the morningis, however, a material
fact which the appellate court failed to properly consider and
appreciate— the proximate cause of the loss of the cargoes. 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."
As to Schmitz Transport’s liability
Common Carriers; Customs Brokers; It is settled that under a
given set of facts, a customs broker may be regarded as a
common carrier.—
 Thus, this Court, in A.F. Sanchez Brokerage, Inc. v. The
Honorable Court of Appeals, held: The appellate court did not err
in finding petitioner, a customs broker, to be also a common
carrier, as defined under Article 1732 of the Civil Code, to wit, Art.
1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public. x x x Article
1732 does not distinguish between one whose principal business
activity is the carrying of goods and one who does such carrying
only as an ancillary activity.
 The contention, therefore, of petitioner that it is not a common
carrier but a customs broker whose principal function is to prepare
the correct customs declaration and proper shipping documents
as required by law is bereft of merit. It suffices that petitioner
undertakes to deliver the goods for pecuniary consideration. And
in Calvo v. UCPB General Insurance Co., Inc., this Court held that
as the transportation of goods is an integral part of a customs
broker, the customs broker is also a common carrier. For to
declare otherwise “would be to deprive those with whom [it]
contracts the protection which the law affords them
notwithstanding the fact that the obligation to carry goods for [its]
customers, is part and parcel of petitioner’s business.”
 Contrary to Schmitz Transport‘s insistence, the Court reiterated
that petitioner is a common carrier. For it undertook to transport
the cargoes from the shipside of "M/V Alexander Saveliev" to the
consignee‘s warehouse. The testimony of its own Vice-President
and General Manager Noel Aro that part of the services it offers to
its clients as a brokerage firm includes the transportation of
cargoes reflects so.
 As for petitioner‘s argument that being the agent of Little Giant,
any negligence it committed was deemed the negligence of its
principal, it does not persuade.True, petitioner was the broker-
agent of Little Giant in securing the release of the cargoes. In
effecting the transportation of the cargoes from the shipside and
into Little Giant‘s warehouse, however, petitioner was discharging
its own personal obligation under a contact of carriage.
 As for Schmitz Transport, for it to be relieved of liability, it should,
following Article 1739of the Civil Code, prove that it exercised due
diligence to prevent or minimize the loss, before, during and after
the occurrence of the storm in order that it may be exempted from
liability for the loss of the goods.While petitioner sent checkers
and a supervisoron 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 to TVI’s liability
Private Carriers; While a private carrier is under no duty to
observe extraordinary diligence, it is still required to observe
ordinary diligence.—
 Not being a party to the service contract between Schmitz
Transport and TVI, Little Giant cannot directly sue TVI based
thereon but it can maintain a cause of action for negligence
 In the case of TVI, while it acted as a private carrier for which it
was under no duty to observe extraordinary diligence, it was still
required to observe ordinary diligence to ensure the proper and
careful handling, care and discharge of the carried goods.
A man of ordinary prudence would not leave a heavily loaded
barge floating for a considerable number of hours, at 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.—
 TVI’s 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.
 In LRTA v. Navidad, the Court held that liability for tort under the
provisions of Article 2176 and related provisions, in conjunction
with Article 2180 of the Civil Code. x xx[O]ne might ask further,
how then must the liability of the common carrier, on one hand,
and an independent contractor, on the other hand, be described?
It would be solidary. A contractual obligation can be breached by
tort and when the same act or omission causes the injury, one
resulting in culpa contractual and the other in culpa aquiliana,
Article 2194 of the Civil Code can well apply. In fine, 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.
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.—
 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:
The foundation of LRTA’s liability is the contract of carriage and its
obligation to indemnify the victim arises from the breach of that
contract by reason of its failure to exercise the high diligence
required of the common carrier. 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. Should Prudent be made likewise
liable? If at all, that liability could only be for tort under the
provisions of Article 2176 and related provisions, in conjunction
with Article 2180 of the Civil Code. x x x [O]ne might ask further,
how then must the liability of the common carrier, on one hand,
and an independent contractor, on the other hand, be described?
It would be solidary.
 A contractual obligation can be breached by tort and when the
same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article 2194 of the
Civil Code can well apply. In fine, 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.
As to Black Sea’s liability
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.Parties to a contract
of carriage may, however, agree upon a definition of delivery that
extends the services rendered by the carrier.
The Bill of Lading No. 2 covering the shipment provides that delivery
be made "to the port of discharge or so near thereto as she may safely
get, always afloat."The delivery of the goods to the consignee was not
from "pier to pier" but from the shipside of "M/V Alexander Saveliev"
and into barges, for which reason the consignee contracted the
services of petitioner. Since Black Sea had constructively delivered the
cargoes to Little Giant, through petitioner, it had discharged its duty. In
fine, no liability may thus attach to Black Sea.
Parties to a contract of carriage may agree upon a definition of
delivery that extends the services rendered by the carrier.—
 In the case at bar, Bill of Lading No. 2 covering the shipment
provides that delivery be made “to the port of discharge or so near
thereto as she may safely get, always afloat.” The delivery of the
goods to the consignee was not from “pier to pier” but from the
shipside of “M/V Alexander Saveliev” and into barges, for which
reason the consignee contracted the services of petitioner.
 Since Black Sea had constructively delivered the cargoes to Little
Giant, through petitioner, it had discharged its duty.
Damages; Attorney’s Fees; To award attorney’s fees to a party
just because the judgment is rendered in its favor would be
tantamount to imposing a premium on one’s right to litigate or
seek judicial redress of legitimate grievances—no sufficient
showing of bad faith is reflected in a party’s persistence in a case
based on an erroneous conviction of the righteousness of his
cause.—
 Respecting the award of attorney’s fees in an amount over
P1,000,000.00 to Industrial Insurance, for lack of factual and legal
basis, this Court sets it aside.
 While Industrial Insurance was compelled to litigate its rights,
such fact by itself does not justify the award of attorney’s fees
under Article 2208 of the Civil Code.
 For no sufficient showing of bad faith would be reflected in a
party’s persistence in a case other than an erroneous conviction
of the righteousness of his cause. To award attorney’s fees to a
party just because the judgment is rendered in its favor would be
tantamount to imposing a premium on one’s right to litigate or
seek judicial redress of legitimate grievances.
10. MINDEX RESOURCES DEVELOPMENT V. MORILLO
Facts:
 Petitioner agreed to verbally to lease a 6x6 cargo truck owned by
the respondent Ephraim Morillo for use in MINDEX' mining
operations.
- Unkown to Morillo the said truck was burned by unidentified
persons while parked unattended after it suffered mechanical
trouble.
- The truck was totally burned, while its engine was partially
burned.
 Upon learning of the incident Morillo offered to sell the truck to
petitioner, but the latter refused. Instead it replaced the trucks
tires and had it towed for repair and overhauling.
 Thereafter, Morillo sent a proposal to Mindex for the payment of
the cost of the truck in four (4) installments plus unpaid rentals but
due to the tight finances, petitioner instead made a counter-offer
to pay the rent, repair and overhaul the truck and return it to
Morillo.
- With the parties unable to come to an agreement, Morillo
pulled out the truck from Mindex' repair shop and had it
repaired somewhere else.
The RTC found petitioner guilty for the destruction of the vehicle, which
was then affirmed by the CA and held petitioner responsible for its loss
and destruction of the truck.
CA modified the decision of the RTC by changing the 12% to 6% on
the rentals and repair costs until the date of the finality of the decision
trial court and 12 percent per annum thereafter, if the amounts
adjudged would remain unpaid from such date of finality until the
rentals and the repair costs were fully paid.
Hence this petition. Petitioner claims that the burning of the truck was a
fortuitous event, for which it should not be held liable pursuant to Article
1174 as well as on the basis of the letter of respondent stating that the
burning of the truck was an “unforeseen adversity,” which renders as
an admission that should exculpate the former from liability.
Issue:
WON the burning is a fortuitous event
Held:
No. Both the RTC and the CA found petitioner negligent and thus liable
for the loss or destruction of the leased truck. Though both parties may
have suffered from the burning of the truck but as found by both lower
courts, the negligence of petitioner makes it responsible for the loss.
Obligations and Contracts; Fortuitous Events; An act of God
cannot be invoked to protect a person who has failed to take
steps to forestall the possible adverse consequences of such a
loss-when the effect is found to be partly the result of a person’s
participation, whether by active intervention, neglect or failure to
act, the whole occurrence is humanized and removed from the
rules applicable to acts of God.—
 In order for a fortuitous event to exempt one from liability, it is
necessary that one has committed no negligence or misconduct
that may have occasioned the loss.
 An act of God cannot be invoked to protect a person who has
failed to take steps to forestall the possible adverse
consequences of such a loss. One’s negligence may have
concurred with an act of God in producing damage and injury to
another; nonetheless, showing that the immediate or proximate
cause of the damage or injury was a fortuitous event would not
exempt one from liability.
 When the effect is found to be partly the result of a person’s
participation—whether by active intervention, neglect or failure to
act—the whole occurrence is humanized and removed from the
rules applicable to acts of God.
Requisites; The often-invoked doctrine of “fortuitous event” or
“caso fortuito” has become a convenient and easy defense to
exculpate an obligor from liability.—
 This often-invoked doctrine of “fortuitous event” or “caso fortuito”
has become a convenient and easy defense to exculpate an
obligor from liability. To constitute a fortuitous event, the following
elements must concur: (a) the cause of the unforeseen and
unexpected occurrence or of the failure of the debtor to comply
with obligations must be independent of human will; (b) it must be
impossible to foresee the event that constitutes the caso fortuito
or, if it can be foreseen, it must be impossible to avoid; (c) the
occurrence must be such as to render it impossible for the debtor
to fulfill obligations in a normal manner; and (d) the obligor must
be free from any participation in the aggravation of the injury or
loss.
Negligence, as commonly understood, is that conduct that
naturally or reasonably creates undue risk or harm to others.—
 As can be gleaned from the foregoing testimony, petitioner failed
to employ reasonable foresight, diligence and care that would
have exempted it from liability resulting from the burning of the
truck. Negligence, as commonly understood, is that conduct that
naturally or reasonably creates undue risk or harm to others. It
may be a failure to observe that degree of care, precaution or
vigilance that the circumstances justly demand; or to do any other
act that would be done by a prudent and reasonable person, who
is guided by considerations that ordinarily regulate the conduct of
human affairs.
Leases; Damages; Article 1667 of the Civil Code holds the lessee
responsible for the deterioration or loss of the thing leased;
Courts begin with the assumption that compensatory damages
are for pecuniary losses that result from an act or omission of the
defendant.—
 The P132,750 repair and overhaul costs was correctly granted by
the lower courts. Article 1667 of the Civil Code holds the lessee
responsible for the deterioration or loss of the thing leased. In
addition, Article 1665 of the same Code provides that “the lessee
shall return the thing leased, upon the termination of the lease,
just as he received it, save what has been lost or impaired by the
lapse of time, or by ordinary wear and tear, or from an inevitable
cause.”
 Courts begin with the assumption that compensatory damages
are for pecuniary losses that result from an act or omission of the
defendant. Having been found to be negligent in safeguarding the
leased truck, petitioner must shoulder its repair and overhaul
costs to make it serviceable again. Such expenses are duly
supported by receipts; thus, the award of P132,750 is definitely in
order.
Attorney’s Fees; Where granted, the court must explicitly state in
the body of the decision, and not only in the dispositive portion
thereof, the legal reason for the award of attorney’s fees.—
 We find the award of attorney’s fees to be improper. The reason
which the RTC gave—because petitioner had compelled
respondent to file an action against it—falls short of our
requirement in Scott Consultants and Resource Development v.
CA, from which we quote: “It is settled that the award of attorney’s
fees is the exception rather than the rule and counsel’s fees are
not to be awarded every time a party wins suit. The power of the
court to award attorney’s fees under Article 2208 of the Civil Code
demands factual, legal, and equitable justification; its basis cannot
be left to speculation or conjecture.
In the absence of stipulation, a winning party may be awarded
attorney’s fees only in case plaintiff’s action or defendant’s stand
is so untenable as to amount to gross and evident bad faith.—
 Moreover, a recent case ruled that “in the absence of stipulation,
a winning party may be awarded attorney’s fees only in case
plaintiff’s action or defendant’s stand is so untenable as to amount
to gross and evident bad faith.”
 Indeed, respondent was compelled to file this suit to vindicate his
rights. However, such fact by itself will not justify an award of
attorney’s fees, when there is no sufficient showing of petitioner’s
bad faith in refusing to pay the said rentals as well as the repair
and overhaul costs. Mindex Resources Development vs. Morillo,
379 SCRA 144, G.R. No. 138123 March 12, 2002
11. PHOENIX CONSTRUCTION, INC. and ARMANDO U.
CARBONEL, petitioners, vs THE INTERMEDIATE
APPELLATE COURT and LEONARDO DIONISIO,
respondents.
G.R. No. L-65295 March 10, 1987
SUMMARY:
Dionisio who had his carlights turned off collided with a truck parked
askew. The truck driver was negligent for providing the road hazard
and it cannot invoke the doctrine of last clear chance to deny liability.
Dionisio's negligence was merely contributory.
FACTS:
 At about 1:30am, it was alleged by Leonardo Dionisio that while
driving his volkswagen car the latter's headlights turned off and
when he turned it up to bright, he was already 2 1/2 meters away
and about to collide with the Ford Dump truck parked askewed at
the right side of the road, owned by petitioner. The two collided
near the intersection of General Lacuna and General Santos
Streets.
 Dionisio commenced an action for damages in the CFI of
Pampanga basically claiming that the legal and proximate cause
of his injuries was the negligent manner in which Armando
Carbonel had parked the dump truck entrusted to him by his
employer Phoenix.
 Phoenix and Carbonel, on the other hand, countered that the
proximate cause of Dionisio's injuries was his own recklessness in
driving fast at the time of the accident, while under the influence
of liquor (a shot or two), without his headlights on and without a
curfew pass. Phoenix also sought to establish that it had
exercised due rare in the selection and supervision of the dump
truck driver.
TC agreed with the claim of Dionisio.
IAC sustained the same ruling but reduced the moral exemplary and
damages for loss of expected income
The petitioners, however, urge that the truck driver's negligence was
merely a "passive and static condition" and that private respondent
Dionisio's negligence was an "efficient intervening cause and that
consequently Dionisio's negligence must be regarded as the legal and
proximate cause of the accident rather than the earlier negligence of
Carbonel.
ISSUE: WON Phoenix and Carbonel may be absolved from liability on
the ground that Dionisio had the last clear chance to avoid the injury
RULING:
Private respondent had no curfew pass during the night the
accident took place. The certification by a major assigned in
Pampanga that respondent has a curfew pass is not credible as it
lacks the necessary details.—
 Private respondent Dionisio was not able to produce any curfew
pass during the trial. Instead, he offered the explanation that his
family may have misplaced his curfew pass. He also offered a
certification (dated two years after the accident) issued by one
Major Benjamin N. Libarnes of the Zone Integrated Police
 Intelligence Unit of Campo Olivas, San Fernando, Pampanga,
which was said to have authority to issue curfew passes for
Pampanga and Metro Manila.
 This certification was to the effect that private respondent
Dionisio had a valid curfew pass. This certification did not,
however, specify any pass serial number or date or period of
effectivity of the supposed curfew pass. We find that private
respondent Dionisio was unable to prove possession of a valid
curfew pass during the night of the accident and that the
preponderance of evidence shows that he did not have such a
pass during that night. The relevance of possession or non-
possession of a curfew pass that night lies in the light it tends to
shed on the other related issues: whether Dionisio was speeding
home and whether he had indeed purposely put out his headlights
before the accident, in order to avoid detection and possibly arrest
by the police in the nearby police station for travelling after the
onset of curfew without a valid curfew pass.
Information gathered by a traffic investigator from persons who
saw how the accident took place is admissible as part of the res
gestae.—
 We think that an automobile speeding down a street and suddenly
smashing into a stationary object in the dead of night is a
sufficiently startling event as to evoke spontaneous, rather than
reflective, reactions from observers who happened to be around
at that time. The testimony of Patrolman Cuyno was therefore
admissible as part of the res gestae and should have been
considered by the trial court. Clearly, substantial weight should
have been ascribed to such testimony, even though it did not, as it
could not, have purported to describe quantitatively the precise
velocity at which Dionisio was travelling just before impact with
the Phoenix dump truck.
Petitioner's theory that respondent deliberately shut off his
headlights as he turned the intersection where his car later on
bumped a parked dumptruck is more credible than respondent's
claim that his car's lights suddenly turned off.—
 A third related issue is whether Dionisio purposely turned off his
headlights, or whether his headlights accidentally malfunctioned,
just moments before the accident. The Intermediate Appellate
Court expressly found that the headlights of Dionisio's car went off
as he crossed the intersection but was non-committal as to why
they did so. It is the petitioners' contention that Dionisio purposely
shut off his headlights even before he reached the intersection so
as not to be detected by the police in the police precinct which he
(being a resident in the area) knew was not far away from the
intersection. We believe that the petitioners' theory is a more
credible explanation than that offered by private respondent
Dionisio—i.e., that he had his headlights on but that, at the crucial
moment, these had in some mysterious if convenient way
malfunctioned and gone off, although he succeeded in switching
his lights on again at "bright" split seconds before contact with the
dump truck.
The fact that a driver smelled of liquor does not necessarily mean
he is drunk.—A fourth and final issue relates to whether Dionisio was
intoxicated at the time of the accident. The evidence here consisted of
the testimony of Patrolman Cuyno to the effect that private respondent
Dionisio smelled of liquor at the time he was taken from his smashed
car and brought to the Makati Medical Center in an unconscious
condition. This testimony has to be taken in conjunction with the
admission of Dionisio that he had taken "a shot or two" of liquor before
dinner with his boss that night. We do not believe that this evidence is
sufficient to show that Dionisio was so heavily under the influence of
liquor as to constitute his driving a motor vehicle per se an act of
reckless imprudence. There simply is not enough evidence to show
how much liquor he had in fact taken and the effects of that upon his
physical faculties or upon his judgment or mental alertness. We are
also aware that "one shot or two" of hard liquor may affect different
people differently.
The theory of petitioners that the negligence of the truck driver in
parking his truck on the street without any early warning devices
is merely a passive and static condition, while the negligence of
the car driver in ramming against the truck was the efficient,
intervening cause, is a theory that has already been almost
entirely discredited.—
 The petitioners, however, urge that the truck driver's negligence
was merely a "passive and static condition" and that private
respondent Dionisio's negligence was an "efficient intervening
cause," and that consequently Dionisio's negligence must be
regarded as the legal and proximate cause of the accident rather
than the earlier negligence of Carbonel. We note that the
petitioners' arguments are drawn from a reading of some of the
older cases in various jurisdictions in the United States but we are
unable to persuade ourselves that these arguments have any
validity for our jurisdiction. We note, firstly, that even in the United
States, the distinctions between "cause" and "condition" which the
petitioners would have us adopt have already been "almost
entirely discredited." Professors Prosser and Keeton make this
quite clear: x x x.
The improper parking of truck created an unreasonable risk for
anyone driving on that street for which the truck driver should be
held responsible as the negligence of a car driver bumping that
truck was no more than a forseeable consequence of the risk
created by the truck driver.—
 We believe, secondly, that the truck driver's negligence far from
being a "passive and static condition" was rather an indispensable
and efficient cause. The collision between the dump truck and the
private respondent's car would in all probability not have occurred
had the dump truck not been parked askew without any warning
lights or reflector devices. The improper parking of the dump truck
created an unreasonable risk of injury for anyone driving down
General Lacuna Street and for having so created this risk, the
truck driver must be held responsible. In our view, Dionisio's
negligence, although later in point of time than the truck driver's
negligence and therefore closer to the accident, was not an
efficient intervening or independent cause. What the petitioners
describe as an "intervening cause" was no more than a
foreseeable consequence of the risk created by the negligent
manner in which the truck driver had parked the dump truck. In
other words, the petitioner truck driver owed a duty to private
respondent Dionisio and others similarly situated not to impose
upon them the very risk the truck driver had created. Dionisio's
negligence was not of an independent and overpowering nature
as to cut, as it were, the chain of causation in fact between the
improper parking of the dump truck and the accident, nor to sever
the juris vinculum of liability.
Negligence of car driver who bumps an improperly parked truck is
merely contributory.—
 We hold that private respondent Dionisio's negligence was "only
contributory," that the "immediate and proximate cause" of the
injury remained the truck driver's "lack of due care" and that
consequently respondent Dionisio may recover damages though
such damages are subject to mitigation by the courts (Article
2179, Civil Code of the Philippines).
Doctrine of "last clear chance" is a common-law theory adopted
to mitigate the harshness of the "contributory negligence of the
plaintiff rule under which in common-law countries plaintiff is
barred from any recovery, unlike in our system of law where the
Civil Code expressly states that it will merely reduce the amount
to be recovered.—
 Petitioners also ask us to apply what they refer to as the "last
clear chance" doctrine. The theory here of petitioners is that while
the petitioner truck driver was negligent, private respondent
Dionisio had the "last clear chance" of avoiding the accident and
hence his injuries, and that Dionisio having failed to take that "last
clear chance" must bear his own injuries alone. The last clear
chance doctrine of the common law was imported into our
jurisdiction by Picart vs. Smith but it is a matter for debate
whether, or to what extent, it has found its way into the Civil Code
of the Philippines. The historical function of that doctrine in the
common law was to mitigate the harshness of another common
law doctrine or rule—that of contributory negligence. The common
law rule of contributory negligence prevented any recovery at all
by a plaintiff who was also negligent, even if the plaintiff s
negligence was relatively minor as compared with the wrongful
act or omission of the defendant. The common law notion of last
clear chance permitted courts to grant recovery to a plaintiff who
had also been negligent provided that the defendant had the last
clear chance to avoid the casualty and failed to do so.
Accordingly, it is difficult to see what role, if any, the common law
 last clear chance doctrine has to play in a jurisdiction where the
common law concept of contributory negligence as an absolute
bar to recovery by the plaintiff, has itself been rejected, as it has
been in Article 2179 of the Civil Code of the Philippines.
Doctrine of last clear chance in common law cannot be applied as
a general rule in negligence cases in our civil law system.—
 Is there perhaps a general concept of "last clear chance" that may
be extracted from its common law matrix and utilized as a general
rule in negligence cases in a civil law jurisdiction like ours? We do
not believe so. Under Article 2179, the task of a court, in technical
terms, is to determine whose negligence—the plaintiffs or the
defendant's—was the legal or proximate cause of the injury. That
task is not simply or even primarily an exercise in chronology or
physics, as the petitioners seem to imply by the use of terms like
"last" or "intervening" or "immediate." The relative location in the
continuum of time of the plaintiff s and the defendant's negligent
acts or omissions, is only one of the relevant factors that may be
taken into account. Of more fundamental importance are the
nature of the negligent act or omission of each party and the
character and gravity of the risks created by such act or omission
for the rest of the community. The petitioners urge that the truck
driver (and therefore his employer) should be absolved from
responsibility for his own prior negligence because the
unfortunate plaintiff failed to act with that increased diligence
which had become necessary to avoid the peril precisely created
by the truck driver's own wrongful act or omission. To accept this
proposition is to come too close to wiping out the fundamental
principle of law that a man must respond for the forseeable
consequences of his own negligent act or omission. Our law on
quasi-delicts seeks to reduce the risks and burdens of living in
society and to allocate them among the members of society. To
accept the petitioners' proposition must tend to weaken the very
bonds of society.
Employer's failure to exercise vigilance over its employee evident
from the improper parking of the truck on the street at night along
employee's residence.—
 Petitioner Carbonel's proven negligence creates a presumption of
negligence on the part of his employer Phoenix in supervising its
employees properly and adequately. The respondent appellate
court in effect found, correctly in our opinion, that Phoenix was not
able to overcome this presumption of negligence. The
circumstance that Phoenix had allowed its truck driver to bring the
dump truck to his home whenever there was work to be done
early the following morning, when coupled with the failure to show
any effort on the part of Phoenix to supervise the manner in which
the dump truck is parked when away from company premises, is
an affirmative showing of culpa in vigilando on the part of
Phoenix.
Contributory negligence may result in 20% reduction of damages.
— exercise the necessary care and prudence in dealing even on a
 Turning to the award of damages and taking into account the
comparative negligence of private respondent Dionisio on one
hand and petitioners Carbonel and Phoenix upon the other hand,
we believe that the demands of substantial justice are satisfied by
allocating most of the damages on a 20-80 ratio. Thus, 20% of the
damages awarded by the respondent appellate court, except the
award of P10,000.00 as exemplary damages and P4,500.00 as
attorney's fees and costs, shall be borne by private respondent
Dionisio; only the balance of 80% needs to be paid by petitioners
Carbonel and Phoenix who shall be solidarily liable therefor to the
former. The award of exemplary damages and attorney's fees and
costs shall be borne exclusively by the petitioners. Phoenix is of
course entitled to reimbursement from Carbonel. We see no
sufficient reason for disturbing the reduced award of damages
made by the respondent appellate court. Phoenix Construction,
Inc. vs. Intermediate Appellate Court, 148 SCRA 353, No. L-
65295 March 10, 1987
12. G.R. No. 112160, Osmundo S. Canlas and Angelina
Canlasvs. Court of Appeals, Asian Savings Bank,
Maximo Contrares and Vicente Mañosca, February 28,
2000
Points of Law:
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.
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.
FACTS:
 August, 1982: Osmundo S. Canlas executed a Special Power of
Attorney authorizing Vicente Mañosca to mortgage 2 parcels of
land situated in BF Homes Paranaque in the name of his wife
Angelina Canlas.
 Subsequently, Osmundo Canlas agreed to sell the lands
to Mañosca for P850K, P500K payable within 1 week, and the
balance serves as his investment in the business. Mañosca
issued 2 checks P40K and P460K. The P460K lacked sufficient
funds.
September 3, 1982: Mañosca mortgage to Atty. Manuel Magno the
parcels of lands for P100K with the help of impostors who
misrepresented themselves as the Spouses Canlas.
September 29, 1982: Mañosca was granted a loan by the respondent
Asian Savings Bank (ASB) for P500K with the parcels of land as
security and with the help of the same impostors. The loan was left
unpaid resulting in an extrajudicially foreclosure on the lots.
January 15, 1983: Canlas wrote a letter informing ASB that the
mortgage was without their authority. He also requested the sheriff
Maximo Contreras to hold or cancel the auction.
- Both parties refused.
The spouses Canlas filed a case for annulment of deed of real estate
mortgage with prayer for the issuance of a writ of preliminary injunction
RTC Ruling
Restrained the sheriff from issuing a Certificate of Sheriff’s
Sale and annulled the mortgage
CA Ruling
Reversed holding Canlas estopped for coming to the bank
with Mañosca and letting himself be introduced as Leonardo Rey
ISSUE:
Whether or not the ASB had was negligent due to the doctrine of last
clear chance
HELD:
Yes, petition is granted.
Civil Law; Negligence; Degree of diligence required of banks is
more than that of a good father of a family.—
 The degree of diligence required of banks is more than that of a
good father of a family; in keeping with their responsibility to
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 purchasers or mortgagees for value and in good faith.
Article 1173. The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons, of
the time and of the place. When negligence shows bad faith, the
provisions of articles 1171 and 2201, paragraph 2, shall apply.
The degree of diligence required of banks is more than that of a
good father of a family.
- Not even a single identification card was exhibited by
the said impostors to show their true identity.
- They acted simply on the basis of the residence certificates
bearing signatures which tended to match the signatures
affixed on a previous deed of mortgage to Atty. Magno
- Previous deed of mortgage did not bear the tax account
number of the spouses as well as the Community Tax
Certificate of Angelina Canlas
Doctrine of Last Clear Chance; The rule is that the antecedent
negligence of a person does not preclude the 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.—–
 Under the doctrine of last clear chance, “which is applicable here,
the respondent bank must suffer the resulting loss. In essence,
the doctrine of last clear chance is to the effect that where both
parties are negligent but the negligent act of one is appreciably
later in point of time than that of the other, or where it is
impossible to determine whose fault or negligence brought about
the occurrence of the incident, the one who had the last clear
opportunity to avoid the impending harm but failed to do so, is
chargeable with the consequences arising therefrom. Stated
differently, the rule is that the antecedent negligence of a person
does not preclude the 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.
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.
 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.
Antecedent Negligence: Osmundo Canlas was negligent in giving
Vicente Mañosca the opportunity to perpetrate the fraud, by entrusting
him the owner's copy of the transfer certificates of title of subject
parcels of land
Supervening Negligence: Failing to perform the simple expedient of
faithfully complying with the requirements for banks to ascertain the
identity of the persons transacting with them.
 Canlas went to ASB with Mañosca and he was introduced
as Leonardo Rey. He didn't correct Mañosca. However, he did
not know that the lots were being used as a security for he was
there to make sure that Mañosca pays his debt so he cannot be
estopped from assailing the validity of the mortgage
 But being negligent in believing the misrepresentation
by Mañosca that he had other lots and that the lot was not to be
used as a security, Canlas was negligent and undeserving of
Attorney's fees.
Dispositive Portion
WHEREFORE, judgment is hereby rendered.
1. ORDERING the petitioner, Atty. Patemo Canlas, to pay to the private
respondent, Francisco Herrera, the sum of P326,000.00, as and for
damages;
2. ORDERING the petitioner to SHOW CAUSE why no disciplinary
action may be imposed on him for violation of his oath, as a lawyer,
within ten (10) days from notice, after which the same will be
consolidated with AC No. 2625;
3. DISMISSING this petition and REMANDING the case to the
respondent Court of Appeals for execution; and
4. ORDERING the petitioner to pay costs.
SO ORDERED.
13. G.R. No. 97626 March 14, 1997
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.
FACTS:
 From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana
claims to have entrusted Rommel's Marketing Corporation (RMC)
funds in the form of cash totalling P304,979.74 to his secretary,
Irene Yabut, for the purpose of depositing said funds in the current
accounts of RMC with PBC. It turned out, however, that these
deposits, on all occasions, were not credited to RMC's account
but were instead deposited to the account of Yabut's husband,
Bienvenido Cotas who likewise maintains an account with the
same bank. During this period, petitioner bank had, however,
been regularly furnishing private respondent with monthly
statements showing its current accounts balances. Unfortunately,
it had never been the practice of Romeo Lipana to check these
monthly statements of account reposing complete trust and
confidence on petitioner bank.
 Irene Yabut's modus operandi is far from complicated. She would
accomplish two (2) copies of the deposit slip, an original and a
duplicate. The original showed the name of her husband as
depositor and his current account number. On the duplicate copy
was written the account number of her husband but the name of
the account holder was left blank. PBC's teller, Azucena
Mabayad, would, however, validate and stamp both the original
and the duplicate of these deposit slips retaining only the original
copy despite the lack of information on the duplicate slip. The
second copy was kept by Irene Yabut allegedly for record
purposes. After validation, Yabut would then fill up the name of
RMC in the space left blank in the duplicate copy and change the
account number written thereon, which is that of her husband's,
and make it appear to be RMC's account number. With the daily
remittance records also prepared by Ms. Yabut and submitted to
private respondent RMC together with the validated duplicate
slips with the latter's name and account number, she made her
company believe that all the while the amounts she deposited
were being credited to its account when, in truth and in fact, they
were being deposited by her and credited by the petitioner bank in
the account of Cotas. This went on in a span of more than one (1)
year without private respondent's knowledge.
 Upon discovery of the loss of its funds, RMC demanded from
petitioner bank the return of its money, but as its demand went
unheeded, it filed a collection suit before the RTC. The trial court
found petitioner bank negligent. The appellate court affirmed RTC
decision
ISSUE: What is the proximate cause of the loss suffered by the private
respondent RMC — petitioner bank's negligence or that of private
respondent's?
RULING: The proximate cause is the bank’s negligence because
absent the act of Ms. Mabayad in negligently validating the incomplete
duplicate copy of the deposit slip, Ms. Irene Yabut would not have the
facility with which to perpetrate her fraudulent scheme with impunity.
The bank's teller, Ms. Azucena Mabayad, was negligent in validating,
officially stamping and signing all the deposit slips prepared and
presented by Ms. Yabut, despite the glaring fact that the duplicate copy
was not completely accomplished contrary to the self-imposed
procedure of the bank with respect to the proper validation of deposit
slips, original or duplicate. The odd circumstance alone that such
duplicate copy lacked one vital information — that of the name of the
account holder — should have already put Ms. Mabayad on guard.
It was this negligence of Ms. Azucena Mabayad, coupled by the
negligence of the petitioner bank in the selection and supervision of its
bank teller, which was the proximate cause of the loss suffered by the
private respondent, and not the latter's act of entrusting cash to a
dishonest employee, as insisted by the petitioners.
Furthermore, 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. 19Stated 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.
At this juncture, it is worth to discuss the degree of diligence ought to
be exercised by banks in dealing with their clients. In the case of
banks, the degree of diligence required is more than that of a good
father of a family. Considering the fiduciary nature of their relationship
with their depositors, banks are duty bound to treat the accounts of
their clients with the highest degree of care.
Civil Law; Negligence; Elements of a Quasi-delict.—
 There are three elements of a quasi-delict:
a) damages suffered by the plaintiff;
b) fault or negligence of the defendant, or some other person
for whose acts he must respond; and
c) the connection of cause and effect between the fault or
negligence of the defendant and the damages incurred by
the plaintiff.
Negligence is the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate
the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would do.—
 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.
 The 78-year old, yet still relevant, case of Picart v. Smith, provides
the test by which to determine the existence of negligence in a
particular case which may be stated as follows: Did the defendant
in doing the alleged negligent act use that reasonable care and
caution which an ordinarily prudent person would have used in
the same situation? If not, then he is guilty of negligence. The law
here in effect adopts the standard supposed to be supplied by the
imaginary conduct of the discreet paterfamilias of the Roman law.
The existence of negligence in a given case is not determined by
reference to the personal judgment of the actor in the situation
before him. The law considers what would be reckless,
blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.
Proximate Cause; Definition Of.—
 Proximate cause is determined on the facts of each case upon
mixed considerations of logic, common sense, policy and
precedent. Vda. de Bataclan v. Medina, reiterated in the case of
Bank of the Phil. Islands v. Court of Appeals, defines proximate
cause 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. x x x.” In
this case, absent the act of Ms. Mabayad in negligently validating
the incomplete duplicate copy of the deposit slip, Ms. Irene Yabut
would not have the facility with which to perpetrate her fraudulent
scheme with impunity.
Essence of the Doctrine of “Last Clear Chance.”—
 Furthermore, under the doctrine of “last clear chance” (also
referred to, at times as “supervening negligence” or as “dis-
covered 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.
Considering the fiduciary nature of their relationship with their
depositors, banks are duty bound to treat the accounts of their
clients with the highest degree of care.—
 In the case of banks, however, the degree of diligence required is
more than that of a good father of a family. Considering the
fiduciary nature of their relationship with their depositors, banks
are duty bound to treat the accounts of their clients with the
highest degree of care.
A blunder on the part of the bank, such as the failure to duly
credit him his deposits as soon as they are made, can cause the
depositor not a little embarrassment if not financial loss and
perhaps even civil and criminal litigation.—
 As elucidated in Simex International (Manila), Inc. v. Court of
Appeals, in every case, the depositor expects the bank to treat his
account with the utmost fidelity, whether such account consists
only of a few hundred pesos or of millions. The bank must record
every single transaction accurately, down to the last centavo, and
as promptly as possible. This has to be done if the account is to
reflect at any given time the amount of money the depositor can
dispose as he sees fit, confident that the bank will deliver it as and
to whomever he directs. A blunder on the part of the bank, such
as the failure to duly credit him his deposits as soon as they are
made, can cause the depositor not a little embarrassment if not
financial loss and perhaps even civil and criminal litigation.
It cannot be denied that private respondent was likewise negligent
in not checking its monthly statements of account.—
 The foregoing notwithstanding, it cannot be denied that, indeed,
private respondent was likewise negligent in not checking its
monthly statements of account. Had it done so, the company
would have been alerted to the series of frauds being committed
against RMC by its secretary. The damage would definitely not
have ballooned to such an amount if only RMC, particularly
Romeo Lipana, had exercised even a little vigilance in their
financial affairs. This omission by RMC amounts to contributory
negligence which shall mitigate the damages that may be
awarded to the private respondent under Article 2179 of the New
Civil Code.
14. G.R. No. 116100 February 9, 1996
SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES
LITO and MARIA CRISTINA SANTOS ,petitioners,
vs.
COURT OF APPEALS, HEIRS OF PACIFICO C. MABASA and
REGIONAL TRIAL COURT OF PASIG, METRO MANILA, BRANCH
181, respondents.
FACTS:
 Pacifico Mabasa filed a case for the grant of an easement of right
of way against Sps. Custodio, Sps. Santos and Rosalina Morato.
Pacifico died during the pendency of the case and was
substituted by his surviving spouse Ofelia Mabasa and their
children.
 Pacifico owns a parcel of land with an apartment thereon at P.
Burgos Street, Taguig. Said property is surrounded by other
immovables owned by Sps. Custodio, Sps. Santos, and Morato.
Going to Pacifico‘s property, the row of houses on the left are as
follows: the house of Sps. Custodio, that of Sps. Santos, and that
of Ofelia Mabasa. On the right side is that of Rosalino Morato and
then a Septic Tank.
 From Pacifico‘s property, the passageway to access P. Burgos
Street is one meter wide. It is the path in between the previously
mentioned row of houses.
 Tenants were occupying the apartment. When Pacifico went to
see the premises, he saw that there had been built an adobe
fence in the passageway making it narrower in width. Said adobe
fence was constructed by Sps. Santos along their property which
is along the passageway. Morato constructed adobe fence and
even extended said fence in such a way that the entire
passageway was enclosed. It was then that the tenants of the
apartment vacated the area. Cristina Santos testified that she
constructed said fence because there was an incident when her
daughter was dragged by a bicycle pedalled by one of the tenants
along the passageway. She mentioned other inconveniences of
having a pathway in front of her house, such as when some of the
tenants were drunk and would bang their doors and windows.
Some of their footwear were even lost.
RTC ordered Sps. Custodio and Sps. Santos to give the Mabasas
permanent access ingress and egress, to the public street. It also
ordered the Mabasas to pay the Custodios and Santoses indemnity for
the permanent use of the passageway. CA affirmed the RTC decision
and awarded damages in favor of Mabasa.
ISSUE: Whether or not the award of damages is proper.
HELD
 NO. The award of damages has no substantial basis.
Civil Law; Action; Damages; To warrant the recovery of damages,
there must be a right of action for a legal wrong inflicted by the
defendant, and damage resulting to the plaintiff.—
 However, the mere fact that the plaintiff suffered losses does not
give rise to a right to recover damages. To warrant the recovery of
damages, there must be both a right of action for a legal wrong
inflicted by the defendant, and damage resulting to the plaintiff
therefrom. Wrong without damage, or damage without wrong,
does not constitute a cause of action, since damages are merely
part of the remedy allowed for the injury caused by a breach or
wrong.
Injury is the illegal invasion of a legal right, damage is the harm
which results from the injury and damages are the compensation
awarded for the damage suffered.—
 There is a material distinction between damages and injury. 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 loss or harm was not the result of a violation of a legal
duty. These situations are often called damnum absque injuria.
To maintain an action for injuries, plaintiff must establish that
such injuries resulted from a breach of duty which the defendant
owed to the plaintiff.—
 In order that a plaintiff may maintain an action for the injuries of
which he complains, he must establish that such injuries resulted
from a breach of duty which the defendant owed to the plaintiff—a
concurrence of injury to the plaintiff and legal responsibility by the
person causing it. The underlying basis for the award of tort
damages is the premise that an individual was injured in
contemplation of law. Thus, there must first be the breach of some
duty and the imposition of liability for that breach before damages
may be awarded; it is not sufficient to state that there should be
tort liability merely because the plaintiff suffered some pain and
suffering.
The law affords no remedy for damages resulting from an act
which does not amount to a legal injury or wrong.—
 Many accidents occur and many injuries are inflicted by acts or
omissions which cause damage or loss to another but which
violate no legal duty to such other person, and consequently
create no cause of action in his favor. In such cases, the
consequences must be borne by the injured person alone. The
law affords no remedy for damages resulting from an act which
does not amount to a legal injury or wrong.
In order that the law will give redress for an act causing damage,
that act must not only be hurtful, but also wrongful.—
 In other words, in order that the law will give redress for an act
causing damage, that act must be not only hurtful, but wrongful.
There must be damnum et injuria. If, as may happen in many
cases, a person sustains actual damage, that is, harm or loss to
his person or property, without sustaining any legal injury, that is,
an act or omission which the law does not deem an injury, the
damage is regarded as damnum absque injuria.
Civil Law; Article 21, Civil Code; Principle of Abuse of Right;
Requisites.—
 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.
There is no cause of action for lawful acts done by one person on
his property although such acts incidentally caused damage or
loss to another.—
 A person has a right to the natural use and enjoyment of his own
property, according to his pleasure, for all the purposes to which
such property is usually applied. As a general rule, therefore,
there is no cause of action for acts done by one person upon his
own property in a lawful and proper manner, although such acts
incidentally cause damage or an unavoidable loss to another, as
such damage or loss is damnum absque injuria. When the owner
of property makes use thereof in the general and ordinary manner
in which the property is used, such as fencing or enclosing the
same as in this case, nobody can complain of having been
injured, because the inconvenience arising from said use can be
considered as a mere consequence of community life.
One may use any lawful means to accomplish a lawful purpose
and though the means adopted may cause damage to another, no
cause of action arises in the latter’s favor.—
 The proper exercise of a lawful right cannot constitute a legal
wrong for which an action will lie, although the act may result in
damage to another, for no legal right has been invaded. One may
use any lawful means to accomplish a lawful purpose and though
the means adopted may cause damage to another, no cause of
action arises in the latter’s favor. Any injury or damage
occasioned thereby is damnum absque injuria. The courts can
give no redress for hardship to an individual resulting from action
reasonably calculated to achieve a lawful end by lawful means.
15. BACOLOD-MURCIA MILLING CO., INC. V. FIRST
FARMERS MILLING CO.
This is an appeal taken by Bacolod-Murcia Milling Co., Inc. from the
order dated November 28, 1967 issued by the CFI of Rizal, Branch VI
(Pasig), in Civil Case No. 9185, as well as the Order dated March 5,
1968 denying the Motion for its reconsideration.
FACTS:
 Plaintiff-appellant had commenced, on March 18, 1966, an action
for Injunction and Prohibition with Damages against defendants
First Farmers Milling Co., Inc. (FFMC), various named planters
nearby, and Ramon Nolan being the Administrator of the Sugar
Quota Administration.
 It was alleged, that in the year of 1964, the defendant FFMC that
operated a sugar central known as the First Farmers Sugar
Central.
 Then, for the crop years 1964-65 and 1965-66, the defendants
transferred their quota allotments to their co-defendants FFMC
and are actually milling their sugar with FFMC.
- This illegal transfer of the quota allotments was done over
the protest and objections of the plaintiff, but with the
unjustified illegal approval of their co-defendant the Sugar
Quota Administration.
 After the defendants (FFMC, the adhering planters, and the Sugar
Quota Administrator) had filed their respective answers, the
plaintiff-appellant filed a Motion to admit Amended and
Supplemental Complaint.
 PNB(Philippine National Bank) and NIDC (National Investment
and Development Corporation) as party defendants, “who
became creditors of defendant FFMC central prior to the
institution of the instant case, and who therefore are necessary
parties, is fatal to the complaint.”
- It was alleged, that defendants NIDC and PNB extended
loans to FFMC in the amount of P12,210,000.00 on June
18,1965 and P4,000,000.00 on Dec. 14, 1966, to assist in
the illegal creation and operation of said mill, hence a joint
tortfeasors in the trespass of plaintiff’s rights.
- It was prayed that they be ordered to jointly and severally
pay plaintiff actual and exemplary damages of not less that
P1 million pesos.
 Then the defendant filed their respective answer. In their answer,
the PNB and NIDC had contended that they had no participation
whatsoever either directly or indirectly on the alleged illegal
transfer of the defendant planters from the plaintiff to the
defendant mill.
 In addition, the granting of loans by the defendants PNB and
NIDC in favor of the defendant mill did not violate any rights of the
plaintiff because these loans were extended in the ordinary and
usual course of business as authorized by their charter. Hence,
the latter defendants did not commit any tortious action against
the plaintiffs and, consequently the plaintiffs have no cause of
action against the defendants (PNB and NIDC).

ISSUE: WON the allegations of the Amended and Supplemental

Complaint constituted a sufficient cause of action against PNB and
NIDC

RULING:
NO.
 It is basic that the complaint must contain a concise statement of
the ultimate facts constituting the plaintiff’s cause of action.
“Ultimate facts” are the important and substantial facts, which
either directly form and basis of the plaintiff’s primary right, and
duty, or directly make up the wrongful acts or omissions by the
defendant.
 When the ground for dismissal is that the complaint states that the
Complaint states no cause of action, the rule is that its sufficiency
can only be determined by considering the facts alleged in the
Complaint and no other. The allegations in the complaint must be
accepted as true and it is not permissible to go beyond and
outside of them for date or facts. And the test of sufficiency of the
facts alleged is whether or not the Court could render a valid
judgment as prayed for accepting as true exclusive facts set forth
in the Complaint.
 The subject Amended and Supplemental Complaint fails to meet
the test. It is not supported by well-pleased averment of facts.
Nowhere is it alleged that defendants-appellees had notice,
information or knowledge of any flaw, much less any illegality, in
their co-defendants’ actuations, assuming that there was such a
flaw or illegality. Although it is averred that the defendant’s acts
were done in bad faith, the Complaint does not contain any
averment of facts showing that the acts were done in the manner
alleged.

Doing of an act, like extension of credit, which is lawful, does not

render one liable for tort simply because the act enables another
to accomplish a wrong.—
 What appears from the record is that PNB and NIDC came into
the picture in the ordinary and usual course of its business after
the borrowing entity had established itself as capable of being
treated as a new milling district (FFMC) is officially designated as
Mill District No, 49) because it could already operate and had its
array of adhering planters. “The doing of an act which is in itself is
perfectly lawful will not render one liable as for a tort, simply
because the unintended effect of such act is to enable or assist
another person to do or accomplish a wrong”, assuming, of
course, that there was such a wrong.

Bad faith is never presumed (Art. 527, NCC). And it has been held that
“to support a judgment for damages, facts which justify the inference of
a lack or absence of good faith must be alleged and proven.”