G.R. No.

L-10134 June 29, 1957

SABINA EXCONDE, plaintiff-appellant,
vs.
DELFIN CAPUNO and DANTE CAPUNO, defendants-appellees.
Magno T. Bueser for appellant.

Alver Law Offices and Edon B. Brion and Vencedor A. Alimario for appellees.
BAUTISTA ANGELO, J.:
Dante Capuno, son of Delfin Capuno, was accused of double homicide through reckless
imprudence for the death of Isidoro Caperina and Amado Ticzon on March 31, 1949 in the Court of
First Instance of Laguna (Criminal Case No. 15001). During the trial, Sabina Exconde, as mother
of the deceased Isidoro Caperina, reserved her right to bring a separate civil action for damages
against the accused. After trial, Dante Capuno was found guilty of the crime charged and, on
appeal, the Court Appeals affirmed the decision. Dante Capuno was only (15) years old when he
committed the crime.
In line with her reservation, Sabina Exconde filed the present action against Delfin Capuno and his
son Dante Capuno asking for damages in the aggregate amount of P2,959.00 for the death of her
son Isidoro Caperiña. Defendants set up the defense that if any one should be held liable for the
death of Isidoro Caperina, he is Dante Capuno and not his father Delfin because at the time of the
accident, the former was not under the control, supervision and custody, of the latter. This defense
was sustained by the lower court and, as a consequence it only convicted Dante Capuno to pay
the damages claimed in the complaint. From decision, plaintiff appealed to the Court of Appeals
but the case was certified to us on the ground that the appeal only involves questions of law.
It appears that Dante Capuno was a member of the Boy Scouts Organization and a student of the
Bilintawak Elementary School situated in a barrio in the City of San Pablo and on March 31, 1949
he attended a parade in honor of Dr. Jose Rizal in said city upon instruction of the city school's
supervisor. From the school Dante, with other students, boarded a jeep and when the same started
to run, he took hold of the wheel and drove it while the driver sat on his left side. They have not
gone far when the jeep turned turtle and two of its passengers, Amado Ticzon and Isidore
Caperiña, died as a consequence. It further appears that Delfin Capuno, father of Dante, was not
with his son at the time of the accident, nor did he know that his son was going to attend a parade.
He only came to know it when his son told him after the accident that he attended the parade upon
instruction of his teacher.
The only issue involved in this appeal is whether defendant Delfin Capuno can be held civilly liable,
jointly and severally with his son Dante, for damages resulting from the death of Isidoro Caperiña
caused by the negligent act of minor Dante Capuno.
The case comes under Article 1903 of the Spanish Civil Code, paragraph 1 and 5, which provides:
ART. 1903. The obligation impossed by the next preceding articles is enforceable not only for
personal acts and omissions, but also for those of persons for whom another is responsible.
The father, and, in case of his death or incapacity, the mother, are liable for any damages caused
by the minor children who live with them.
xxx xxx xxx
Finally, teachers or directors of arts and trades are liable for any damages caused by their pupils or
apprentices while they are under their custody.
Plaintiff contends that defendant Delfin Capuno is liable for the damages in question jointly and
severally with his son Dante because at the time the latter committed the negligent act which
resulted in the death of the victim, he was a minor and was then living with his father, and
inasmuch as these facts are not disputed, the civil liability of the father is evident. And so, plaintiff
contends, the lower court erred in relieving the father from liability.
We find merit in this claim. It is true that under the law above quoted, "teachers or directors of arts
and trades are liable for any damages caused by their pupils or apprentices while they are under
their custody", but this provision only applies to an institution of arts and trades and not to any
academic educational institution (Padilla, Civil Law, 1953, Ed., Vol. IV, p. 841; See 12 Manresa, 4th
Ed., p. 557). Here Dante capuno was then a student of the Balintawak Elementary School and as
part of his extra-curricular activity, he attended the parade in honor of Dr. Jose Rizal upon
instruction of the city school's supervisor. And it was in connection with that parade that Dante
boarded a jeep with some companions and while driving it, the accident occurred. In the
circumstances, it is clear that neither the head of that school, nor the city school's supervisor, could
be held liable for the negligent act of Dante because he was not then a student of an institute of
arts and trades as provided by law.
The civil liability which the law impose upon the father, and, in case of his death or incapacity, the
mother, for any damages that may be caused by the minor children who live with them, is obvious.
This is necessary consequence of the parental authority they exercise over them which imposes
upon the parents the "duty of supporting them, keeping them in their company, educating them and
instructing them in proportion to their means", while, on the other hand, gives them the "right to
correct and punish them in moderation" (Articles 154 and 155, Spanish Civil Code). The only way
by which they can relieve themselves of this liability is if they prove that they exercised all the
diligence of a good father of a family to prevent the damage(Article 1903, last paragraph, Spanish
Civil Code). This defendants failed to prove.
WHEREFORE, the decision appealed from is modified in the sense that defendants Delfin Capuno
and Dante Capuno shall pay to plaintiff, jointly and severally, the sum of P2,959.00 as damages,
and the costs of action.
Bengzon, Montemayor, Labrador and Endencia, JJ., concur.
Paras, C.J., concurs in the result.
!!
!!
!!
!!
!!
G.R. No. L-24101 September 30, 1970
MARIA TERESA Y. CUADRA, minor represented by her father ULISES P. CUADRA, ET AL.,
plaintiffs-appellees,
vs.
ALFONSO MONFORT, defendant-appellant.
Rodolfo J. Herman for plaintiffs-appellees.
Luis G. Torres and Abraham E. Tionko for defendant-appellant.

MAKALINTAL, J.:
This is an action for damages based on quasi-delict, decided by the Court of First Instance of
Negros Occidental favorably to the plaintiffs and appealed by the defendant to the Court of
Appeals, which certified the same to us since the facts are not in issue.
Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were classmates in Grade Six at the
Mabini Elementary School in Bacolod City. On July 9, 1962 their teacher assigned them, together
with three other classmates, to weed the grass in the school premises. While thus engaged Maria
Teresa Monfort found a plastic headband, an ornamental object commonly worn by young girls
over their hair. Jokingly she said aloud that she had found an earthworm and, evidently to frighten
the Cuadra girl, tossed the object at her. At that precise moment the latter turned around to face
her friend, and the object hit her right eye. Smarting from the pain, she rubbed the injured part and
treated it with some powder. The next day, July 10, the eye became swollen and it was then that
the girl related the incident to her parents, who thereupon took her to a doctor for treatment. She
underwent surgical operation twice, first on July 20 and again on August 4, 1962, and stayed in the
hospital for a total of twenty-three days, for all of which the parents spent the sum of P1,703.75.
Despite the medical efforts, however, Maria Teresa Cuadra completely lost the sight of her right
eye.
In the civil suit subsequently instituted by the parents in behalf of their minor daughter against
Alfonso Monfort, Maria Teresa Monfort's father, the defendant was ordered to pay P1,703.00 as
actual damages; P20,000.00 as moral damages; and P2,000.00 as attorney's fees, plus the costs
of the suit.
The legal issue posed in this appeal is the liability of a parent for an act of his minor child which
causes damage to another under the specific facts related above and the applicable provisions of
the Civil Code, particularly Articles 2176 and 2180 thereof, which read:
ART. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by
provisions of this Chapter.
ART 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.
The father and, in case of his death or incapacity are responsible for the damages caused by the
minor children who live in their company.
xxx xxx xxx
The responsibility treated of in this Article shall cease when the persons herein mentioned prove
that they observed all the diligence of a good father of a family to prevent damage.
The underlying basis of the liability imposed by Article 2176 is the fault or negligence
accompanying the act or the omission, there being no willfulness or intent to cause damage
thereby. When the act or omission is that of one person for whom another is responsible, the latter
then becomes himself liable under Article 2180, in the different cases enumerated therein, such as
that of the father or the mother under the circumstances above quoted. The basis of this vicarious,
although primary, liability is, as in Article 2176, fault or negligence, which is presumed from that
which accompanied the causative act or omission. The presumption is merely prima facie and may
therefore be rebutted. This is the clear and logical inference that may be drawn from the last
paragraph of Article 2180, which states "that the responsibility treated of in this Article shall cease
when the persons herein mentioned prove that they observed all the diligence of a good father of a
family to prevent damage."
Since the fact thus required to be proven is a matter of defense, the burden of proof necessarily
rests on the defendant. But what is the exact degree of diligence contemplated, and how does a
parent prove it in connection with a particular act or omission of a minor child, especially when it
takes place in his absence or outside his immediate company? Obviously there can be no
meticulously calibrated measure applicable; and when the law simply refers to "all the diligence of
a good father of the family to prevent damage," it implies a consideration of the attendant
circumstances in every individual case, to determine whether or not by the exercise of such
diligence the damage could have been prevented.
In the present case there is nothing from which it may be inferred that the defendant could have
prevented the damage by the observance of due care, or that he was in any way remiss in the
exercise of his parental authority in failing to foresee such damage, or the act which caused it. On
the contrary, his child was at school, where it was his duty to send her and where she was, as he
had the right to expect her to be, under the care and supervision of the teacher. And as far as the
act which caused the injury was concerned, it was an innocent prank not unusual among children
at play and which no parent, however careful, would have any special reason to anticipate much
less guard against. Nor did it reveal any mischievous propensity, or indeed any trait in the child's
character which would reflect unfavorably on her upbringing and for which the blame could be
attributed to her parents.
The victim, no doubt, deserves no little commiseration and sympathy for the tragedy that befell her.
But if the defendant is at all obligated to compensate her suffering, the obligation has no legal
sanction enforceable in court, but only the moral compulsion of good conscience.
The decision appealed from is reversed, and the complaint is dismissed, without pronouncement
as to costs.
!!
!!
!!
!!
!G.R. No. L-25142 March 25, 1975
PHILIPPINE RABBIT BUS LINES, INC. and FELIX PANGALANGAN, plaintiffs-appellants,
vs.
PHIL-AMERICAN FORWARDERS, INC., ARCHIMEDES J. BALINGIT and FERNANDO PINEDA,
defendants-appellees.
Angel A. Sison for plaintiffs-appellants.
Fidel Zosimo U. Canilao for defendants-appellees.

AQUINO, J.:ñé+.£ªwph!1
Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law from
the order of the Court of First Instance of Tarlac, dismissing their complaint against Archimedes J.
Balingit.
The dismissal was based on the ground that Balingit as the manager of Phil-American Forwarders,
Inc., which together with Fernando Pineda and Balingit, was sued for damages in an action based
on quasi-delict or culpa aquiliana, is not the manager of an establishment contemplated in article
2180 of the Civil Code (Civil Case No. 3865).
In the complaint for damages filed by the bus company and Pangalangan against Phil-American
Forwarders, Inc., Balingit and Pineda, it was alleged that on November 24, 1962, Pineda drove
recklessly a freight truck, owned by Phil-American Forwarders, Inc., along the national highway at
Sto. Tomas, Pampanga. The truck bumped the bus driven by Pangalangan, which was owned by
Philippine Rabbit Bus Lines, Inc. As a result of the bumping, Pangalangan suffered injuries and the
bus was damaged and could not be used for seventy-nine days, thus depriving the company of
earnings amounting to P8,665.51. Balingit was the manager of Phil-American Forwarders, Inc.
Among the defenses interposed by the defendants in their answer was that Balingit was not
Pineda's employer.
Balingit moved that the complaint against him be dismissed on the ground that the bus company
and the bus driver had no cause of action against him. As already stated, the lower court dismissed
the action as to Balingit. The bus company and its driver appealed.
The Civil Code provides:têñ.£îhqwâ£
ART. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
ART. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.
xxx xxx xxx
The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on
the occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the persons herein mentioned prove
that they observed all the diligence of a good father of a family to prevent damage. (1903a)
The novel and unprecedented legal issue in this appeal is whether the terms "employers" and
"owners and managers of an establishment or enterprise" (dueños o directores de un
establicimiento o empresa) used in article 2180 of the Civil Code, formerly article 1903 of the old
Code, embrace the manager of a corporation owning a truck, the reckless operation of which
allegedly resulted in the vehicular accident from which the damage arose.
We are of the opinion that those terms do not include the manager of a corporation. It may be
gathered from the context of article 2180 that the term "manager" ("director" in the Spanish
version) is used in the sense of "employer".
Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be fastened
on Balingit as manager of Phil-American Forwarders, Inc., in connection with the vehicular accident
already mentioned because he himself may be regarded as an employee or dependiente of his
employer, Phil-American Forwarders, Inc.
Thus, it was held "que es dependiente, a los efectos de la responsabilidad subsidiaria establecida
en el num 3.0 del (art.) 1903, el director de un periodico explotado por una sociedad, porque
cualquiera que sea su jerarquia y aunque Ileve la direccion de determinadas convicciones politicas
no por eso deja de estar subordinado a la superior autoridad de la Empresa" (Decision of Spanish
Supreme Court dated December 6, 1912 cited in 12 Manresa, Codigo Civil Español 5th Ed. 662;
1913 Enciclopedia Juridica Española 992).
The bus company and its driver, in their appellants' brief, injected a new factual issue which was
not alleged in their complaint. They argue that Phil- American Forwarders, Inc. is merely a
business conduit of Balingit because out of its capital stock with a par value of P41,200, Balingit
and his wife had subscribed P40,000 and they paid P10,000 on their subscription, while the other
incorporators, namely, Rodolfo Limjuco, Ponciano Caparas and Rafael Suntay paid P250.25 and
P25, respectively.
That argument implies that the veil of corporate fiction should be pierced and that Phil-American
Forwarders, Inc. and Balingit and his wife should be treated as one and the same civil personality.
We cannot countenance that argument in this appeal. It was not raised in the lower court. The case
has to be decided on the basis of the pleadings filed in the trial court where it was assumed that
Phil-American Forwarders, Inc. has a personality separate and distinct from that of the Balingit
spouses.
The legal issue, which the plaintiffs-appellants can ventilate in this appeal, is one which was raised
in the lower court and which is within the issues framed by the parties (Sec. 18, Rule 46, Rules of
Court).
When a party deliberately adopts a certain theory and the case is decided upon that theory in the
court below, he will not be permitted to change his theory on appeal because, to permit him to do
so, could be unfair to the adverse party (2 Moran's Comments on the Rules of Court, 1970 Ed. p.
505).
WHEREFORE, the lower court's order of dismissal is affirmed. Costs against the plaintiffs-
appellants.
!!
!!
!!
!!
[G.R. No. 148737. June 16, 2004]
ERNESTO PLEYTO and PHILIPPINE RABBIT BUS LINES, INC., petitioners, vs. MARIA D.
LOMBOY and CARMELA LOMBOY, respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision[1] dated October 31, 2000 of the Court of Appeals in CA-
G.R. CV No. 61300, which affirmed with modification the Decision[2] dated June 26, 1998 of the
Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case No. 95-00724-D. The RTC
ordered herein petitioners to solidarily pay damages to respondents. Petitioners likewise assail the
Resolution[3] dated June 21, 2001 of the appellate court, which denied their Motion for
Reconsideration.
Petitioner Philippine Rabbit Bus Lines, Inc. (PRBL), with principal office at Tarlac City, Tarlac, is a
public carrier, engaged in carrying passengers and goods for a fare. It serviced various routes in
Central and Northern Luzon. Petitioner Ernesto Pleyto was a bus driver employed by PRBL at the
time of the incident in question.
Respondent Maria D. Lomboy of Calasiao, Pangasinan, is the surviving spouse of the late Ricardo
Lomboy, who died in Pasolingan, Gerona, Tarlac, in a vehicular accident at around 11:30 a.m. of
May 16, 1995. The accident was a head-on collision between the PRBL bus driven by petitioner
Pleyto and the car where Ricardo was a passenger. Respondent Carmela Lomboy is the eldest
daughter of Ricardo and Maria Lomboy. Carmela suffered injuries requiring hospitalization in the
same accident which resulted in her fathers death.
On November 29, 1995, herein respondents, as pauper-litigants, filed an action for damages
against PRBL and its driver, Pleyto, with the RTC of Dagupan City. In their complaint, which was
docketed as Civil Case No. 95-00724-D, the Lomboys prayed that they be indemnified for the
untimely death of Ricardo Lomboy, his lost earnings, the medical and hospitalization expenses of
Carmela, and moral damages.
The facts, established during trial and affirmed by the appellate court, are as follows:
At approximately 11:30 a.m. of May 16, 1995, PRBL Bus No. 1539, with Plate No. CVD 556, driven
by petitioner Pleyto, was traveling along MacArthur Highway in Gerona, Tarlac bound for Vigan,
Ilocos Sur. It was drizzling that morning and the macadam road was wet. Right in front of the bus,
headed north, was the tricycle with Plate No. CX 7844, owned and driven by one Rodolfo
Esguerra.
According to Rolly Orpilla, a witness and one of the bus passengers, Pleyto tried to overtake
Esguerras tricycle but hit it instead. Pleyto then swerved into the left opposite lane. Coming down
the lane, some fifty meters away, was a southbound Mitsubishi Lancer car, with Plate No. PRS
941, driven by Arnulfo Asuncion. The car was headed for Manila with some passengers. Seated
beside Arnulfo was his brother-in-law, Ricardo Lomboy, while in the back seat were Ricardos 18-
year old daughter Carmela and her friend, one Rhino Daba. PRBL Bus No. 1539 smashed head-
on the car, killing Arnulfo and Ricardo instantly. Carmela and Rhino suffered injuries, but only
Carmela required hospitalization.
In their Answer, petitioners PRBL and Ernesto Pleyto both claimed that the bus was running slowly
at the time of the accident. They pointed out that Bus No. 1539 had been inspected by driver
Pleyto and examined by a mechanic prior to the trip, in accordance with the companys standard
operating procedure. It was found in good working condition. Pleyto claimed that while cruising
along the highway at Gerona, Tarlac, he noticed Esguerras tricycle and followed it at a safe
distance after he was unable to overtake it. Suddenly and without warning, the tricycle stopped in
the middle of the road. Pleyto stepped on the brakes and the bus lost speed. But, since it skidded
towards the direction of the tricycle, he swerved the bus to the other lane to avoid hitting it, only to
collide with the Manila-bound Mitsubishi car.
On June 26, 1998, the trial court decided Civil Case No. 95-00724-D as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and
against the defendants ordering the defendants to pay solidarily the plaintiffs the following
amounts:
1) P50,000.00 as indemnification for the death of Ricardo Lomboy;
2) P1,642,521.00 for lost earnings of Ricardo Lomboy;
3) P59,550.00 as actual damages for the funeral, wake, religious services and prayer for the soul
of the departed;
4) P52,000.00 for the medical treatment and medicine of Carmela Lomboy;
5) P500,000.00 as moral damages for the wife and children excluding Carmela Lomboy;
6) P50,000.00 as moral damages for Carmela Lomboy; and
7) To pay costs.
The filing fee the plaintiffs should have paid is hereby ordered to be paid by the plaintiffs to the
Clerk of Court of this Court upon satisfaction of the foregoing amounts to the plaintiffs by the
defendants.
SO ORDERED.[4]
In ruling for respondents, the RTC found Pleyto negligent and lacking in precaution when he
overtook the tricycle with complete disregard of the approaching car in the other lane. It found the
testimony of Rolly Orpilla credible and persuasive as against Pleytos self-serving and unbelievable
testimony. The court found that Pleyto should have been more prudent in overtaking a tricycle,
considering that it was drizzling, the road was slippery, and another vehicle was approaching from
the opposite direction. The RTC found that Pleyto had clearly violated traffic rules and regulations,
and thus was negligent under Article 2185[5] of the Civil Code of the Philippines because petitioner
Pleyto failed to present any proof to rebut the presumption. The lower court likewise held co-
petitioner PRBL equally liable under Article 2180[6] of the Civil Code for its failure to show that it
had maintained proper supervision of its employees notwithstanding strict standards in employee
selection.
Petitioners appealed the judgment of the trial court to the Court of Appeals in CA-G.R. CV
No. 61300. The appellate court, however, affirmed the decision of the trial court, with modification
in the award of damages, thus:
Wherefore, with the MODIFICATION that the award for actual damages is reduced to P39,550.00
for funeral and religious services and P27,000.00 for medical expenses of Carmela Lomboy; and
the award for loss of earning capacity is accordingly corrected to P1,152,000.00, the appealed
decision is AFFIRMED.
SO ORDERED.[7]
The Court of Appeals affirmed the findings of the RTC with respect to Pleytos fault and negligence.
The appellate court noted that this was evident in his overtaking Esguerras tricycle despite the
drizzle, the slippery road, and an oncoming car a mere fifty meters away. The court reasoned that
the bus must have been speeding since despite braking, the bus still hit the tricycle, and then
rammed the car in the opposite lane with such force as to throw the car off the road. The appellate
court also found petitioner PRBL liable as owner of the bus and as employer of Pleyto pursuant to
Article 2180 of the Civil Code, for its failure to observe the required diligence in its supervision of its
employees and the safe maintenance of its buses. In modifying the award of damages, the
appellate court took note of the amounts that were duly supported by receipts only.
Petitioners then moved for reconsideration, but the appellate court denied it.
Hence, the instant petition, premised on the following grounds:
A. THE SUPREME COURT MAY REVIEW THE CONCLUSION DRAWN BY THE COURT OF
APPEALS, NAMELY, THAT THE PRBL BUS OVERTOOK A TRICYCLE THUS CAUSING THE
ACCIDENT, SINCE IT WAS MADE IN DISREGARD OF FACTS UNDISPUTED BY THE PARTIES.
B. THE COURT OF APPEALS DISREGARDED THE DOCTRINE LAID DOWN IN VILLA REY
TRANSIT, INC. v. COURT OF APPEALS, G.R. NO. L-25499, FEBRUARY 18, 1970, 31 SCRA 511,
WHEN IT ARBITRARILY PEGGED THE MONTHLY LIVING EXPENSES AT 50% OF GROSS
EARNINGS.[8]
At the outset, it appears that petitioners call for this Court to review the factual findings and
conclusions of the Court of Appeals. Petitioners assail the appellate courts affirmance of the finding
by the trial court that Pleyto was negligent. The issue of negligence is factual and, in quasi-delicts,
crucial in the award of damages.[9] But it is well established that under Rule 45 of the 1997 Rules of
Civil Procedure, only questions of law, not of fact, may be raised before the Supreme Court. It must
be stressed that this Court is not a trier of facts, and it is not its function to re-examine and weigh
anew the respective evidence of the parties.[10] Factual findings of the trial court, especially those
affirmed by the Court of Appeals, are conclusive on this Court when supported by the evidence on
record.[11] In the present petition, no compelling reason is shown by petitioners whatsoever for this
Court to reverse those findings. Our examination of the records shows that the evidence clearly
supports the following findings of the appellate court:
The negligence and fault of appellant driver is manifest. He overtook the tricycle despite the
oncoming car only fifty (50) meters away from him. Defendant-appellants claim that he was driving
at a mere 30 to 35 kilometers per hour does not deserve credence as it would have been easy to
stop or properly maneuver the bus at this speed. The speed of the bus, the drizzle that made the
road slippery, and the proximity of the car coming from the opposite direction were duly established
by the evidence. The speed at which the bus traveled, inappropriate in the light of the
aforementioned circumstances, is evident from the fact despite the application of the brakes, the
bus still bumped the tricycle, and then proceeded to collide with the incoming car with such force
that the car was pushed beyond the edge of the road to the ricefield (Paragraph 8, Affidavit of Rolly
Orpilla marked Exh. D and Traffic Report marked Exh. E, Folder of Exhibits).[12]
Indeed, petitioner Pleyto violated traffic rules and regulations when he overtook the tricycle despite
the presence of an oncoming car in the other lane. Article 2185 of the Civil Code lays down the
presumption that a person driving a motor vehicle has been negligent if at the time of the mishap,
he was violating any traffic regulation. As found by both the Court of Appeals and the trial court,
petitioners failed to present any convincing proof rebutting such presumption.
A driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and not to proceed if he cannot do so in
safety. When a motor vehicle is approaching or rounding a curve, there is special necessity for
keeping to the right side of the road and the driver does not have the right to drive on the left hand
side relying upon having time to turn to the right if a car approaching from the opposite direction
comes into view.[13]
The Court of Appeals found PRBL liable for Pleytos negligence pursuant to Article 2180 in relation
to Article 2176[14] of the Civil Code. Under Article 2180, when an injury is caused by the negligence
of a servant or an employee, the master or employer is presumed to be negligent either in the
selection or in the supervision of that employee. This presumption may be overcome only by
satisfactorily showing that the employer exercised the care and the diligence of a good father of a
family in the selection and the supervision of its employee.[15]
In fine, when the employee causes damage due to his own negligence while performing his own
duties, there arises the juris tantum presumption that the employer is negligent, rebuttable only by
proof of observance of the diligence of a good father of a family.[16] Thus, in the selection of
prospective employees, employers are required to examine them as to their qualifications,
experience and service records. With respect to the supervision of employees, employers must
formulate standard operating procedures, monitor their implementation and impose disciplinary
measures for breaches thereof. These facts must be shown by concrete proof, including
documentary evidence.[17]
In the present case, petitioners presented several documents[18] in evidence to show the various
tests and pre-qualification requirements imposed upon petitioner Pleyto before his hiring as a
driver by PRBL. However, no documentary evidence was presented to prove that petitioner PRBL
exercised due diligence in the supervision of its employees, including Pleyto. Citing precedents,
the Court of Appeals opined,
in order that the defense of due diligence in the selection and supervision of employees may be
deemed sufficient and plausible, it is not enough for the employer to emptily invoke the existence
of company guidelines and policies on hiring and supervision. As the negligence of the employee
gives rise to the presumption of negligence on the part of the employer, the latter has the burden of
proving that it has been diligent not only in the selection of employees but also in the actual
supervision of their work. The mere allegation of the existence of hiring procedures and
supervisory policies without anything more is decidedly not sufficient to overcome such
presumption. (Metro Manila Transit Corp. vs. CA (223 SCRA 521). The trial court ratiocinated:
...
Indeed, the testimony of the said two witnesses of the PRBL would impress one to believe that the
PRBL has always exercised the strictest standard of selecting its employees and of maintaining its
vehicles to avoid injury or damage to the life and limb of people on the road whether of its own
passengers or pedestrians or occupants or other vehicles. It has not however, shown to the
satisfaction of the Court that it has maintained proper supervision of its employees, especially
drivers while in the actual operation of its buses. While it has a list of procedures and testing when
it comes to recruitment and another list of what should be done with its buses before they are
allowed to run on the road, it has no list of procedures and duties to be followed by a driver while
he is operating a vehicle to prevent injury to persons and damage to property. Neither has it proved
to the Court that there are people employed by it to supervise its drivers so that it can be seen to it
that all the safety procedures to prevent accident or damage to property or injury to people on the
road have been in place. It is in this aspect of supervising its employees where this Court has
found the defendant PRBL deficient. (Decision p. 29, Rollo)[19]
In our view, no reversible error was committed by the Court of Appeals when it sustained what the
trial court found after trial that PRBL had failed to rebut the presumption of negligence on its part.
Said finding binds us now in this review on certiorari.
Hence, the only remaining issue relevant for our resolution concerns the award to herein
respondents for damages as well as the loss of earning capacity of the victim, Ricardo Lomboy.
Petitioners argue that the award of loss of earning capacity to respondents is devoid of legal basis.
They fault the appellate court for pegging the monthly living expenses at 50% of gross earnings
since, they claim, this runs contrary to Villa Rey Transit, Inc. v. Court of Appeals,[20] which held that
the amount recoverable is not loss of the entire earning, but rather the loss of that portion of the
earnings which the beneficiary would have received. Petitioners also point out that respondents
failed to prove the gross income of the deceased Ricardo Lomboy, thus, making the computations
of the appellate court doubtful, to say the least.
Respondents counter that the deduction of 50% of the gross income as reasonable and necessary
living expenses by the appellate court is in accord with established jurisprudence, pointing to our
decision in Negros Navigation Co., Inc. v. Court of Appeals.[21]
Petitioners, in our view, misread the Villa Rey Transit case, where we emphasized that:
Thus, it has been consistently held that earning capacity, as an element of damages to ones estate
for his death by wrongful act is necessarily his net earning capacity or his capacity to acquire
money, less the necessary expense for his own living. Stated otherwise, the amount recoverable is
not loss of the entire earning, but rather the loss of that portion of the earnings which the
beneficiary would have received. In other words, only net earnings, not gross earning, are to be
considered that is, the total of the earnings less expenses necessary in the creation of such
earnings or income and less living and other incidental expenses.[22]
In considering the earning capacity of the victim as an element of damages, the net earnings,
which is computed by deducting necessary expenses from the gross earnings, and not the gross
earnings, is to be utilized in the computation. Note that in the present case, both the Court of
Appeals and the trial court used net earnings, not gross earnings in computing loss of earning
capacity. The amount of net earnings was arrived at after deducting the necessary expenses
(pegged at 50% of gross income) from the gross annual income. This computation is in accord with
settled jurisprudence, including the Villa Rey case.
Petitioners claim that no substantial proof was presented to prove Ricardo Lomboys gross income
lacks merit. Failure to present documentary evidence to support a claim for loss of earning capacity
of the deceased need not be fatal to its cause. Testimonial evidence suffices to establish a basis
for which the court can make a fair and reasonable estimate of the loss of earning capacity.[23]
Hence, the testimony of respondent Maria Lomboy, Ricardos widow, that her husband was earning
a monthly income of P8,000 is sufficient to establish a basis for an estimate of damages for loss of
earning capacity.
It is well-settled in jurisprudence that the factors that should be taken into account in determining
the compensable amount of lost earnings are: (1) the number of years for which the victim would
otherwise have lived; and (2) the rate of loss sustained by the heirs of the deceased.
Jurisprudence provides that the first factor, i.e., life expectancy, is computed by applying the
formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of Mortality or the
Actuarial Combined Experience Table of Mortality. As to the second factor, it is computed by
multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less
expenses necessary in the creation of such earnings or income and less living and other incidental
expenses. The net earning is ordinarily computed at fifty percent (50%) of the gross earnings.[24]
Thus, the formula used by this Court in computing loss of earning capacity is: Net Earning
Capacity = [2/3 x (80 age at time of death) x (gross annual income reasonable and
necessary living expenses)].[25]
It was established that Ricardo Lomboy was 44 years old at the time of his death and is earning a
monthly income of P8,000 or a gross annual income (GAI) of P96,000.[26] Using the cited formula,
the Court of Appeals correctly computed the Loss of Net Earning Capacity as P1,152,000, net of
and after considering a reasonable and necessary living expenses of 50% of the gross annual
income or P48,000. A detailed computation is as follows:
NET = LIFE EXPECTANCY x GROSS LIVING
EARNING [2/3 (80-age at the time ANNUAL EXPENSES
CAPACITY (X) of death) INCOME (GAI) (50% OF GAI)
X = [2/3 (80-44)] x [P96,000 (50% x P96,000)
X = [2/3 (36)] x [P96,000 48,000]
X = 24 x 48,000
X = P 1,152,000.00
Thus, no reversible error may be attributed to the court a quo in fixing the loss of earning capacity
at said amount.
We likewise sustain the reduction of the award of actual damages from P59,550 for funeral and
burial expenses of Ricardo and P52,000 for medical expenses of Carmela Lomboy to P39,550[27]
and P27,000, respectively, as only these latter amounts were duly supported by receipts.[28] To
justify an award of actual damages, there must be competent proof of the actual amount of loss,
credence can be given only to claims which are duly supported by receipts.[29]
However, while the award of P50,000 as moral damages to Carmela Lomboy is sustained, the
award for moral damages of P500,000 to the heirs of Ricardo Lomboy should be reduced for being
excessive.
Under Article 2206 of the Civil Code, the spouse, legitimate children and illegitimate descendants
and ascendants of the deceased may demand moral damages for mental anguish by reason of the
death of the deceased.[30] However, we must stress that moral damages, though incapable of
pecuniary estimation, are in the category of an award designed to compensate the claimant for
actual injury and are not meant to enrich complainant at the expense of defendant.[31] Moral
damages are awarded to enable the injured party to obtain means, diversions or amusements that
will serve to alleviate the moral suffering he/she has undergone, by reason of the defendants
culpable action. Its award is aimed at restoration, as much as possible, of the spiritual status quo
ante; thus it must be proportionate to the suffering inflicted.[32] Under the circumstances of this
case, an award of P100,000 to the heirs of Ricardo Lomboy would be justified and in keeping with
the purpose of the law and jurisprudence in allowing moral damages.[33]
The indemnification award of P50,000 is also sustained.
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 61300 is
AFFIRMED, with the sole MODIFICATION that the award of moral damages to the heirs of Ricardo
Lomboy is reduced from P500,000.00 to P100,000.00. No pronouncement as to costs.
SO ORDERED.
!!
!!
!!
!!
!!
[G.R. No. 126780. February 17, 2005]
YHT REALTY CORPORATION, ERLINDA LAINEZ and ANICIA PAYAM, petitioners, vs. THE
COURT OF APPEALS and MAURICE McLOUGHLIN, respondents.
DECISION
TINGA, J.:
The primary question of interest before this Court is the only legal issue in the case: It is whether a
hotel may evade liability for the loss of items left with it for safekeeping by its guests, by having
these guests execute written waivers holding the establishment or its employees free from blame
for such loss in light of Article 2003 of the Civil Code which voids such waivers.
Before this Court is a Rule 45 petition for review of the Decision[1] dated 19 October 1995 of the
Court of Appeals which affirmed the Decision[2] dated 16 December 1991 of the Regional Trial
Court (RTC), Branch 13, of Manila, finding YHT Realty Corporation, Brunhilda Mata-Tan (Tan),
Erlinda Lainez (Lainez) and Anicia Payam (Payam) jointly and solidarily liable for damages in an
action filed by Maurice McLoughlin (McLoughlin) for the loss of his American and Australian dollars
deposited in the safety deposit box of Tropicana Copacabana Apartment Hotel, owned and
operated by YHT Realty Corporation.
The factual backdrop of the case follow.
Private respondent McLoughlin, an Australian businessman-philanthropist, used to stay at
Sheraton Hotel during his trips to the Philippines prior to 1984 when he met Tan. Tan befriended
McLoughlin by showing him around, introducing him to important people, accompanying him in
visiting impoverished street children and assisting him in buying gifts for the children and in
distributing the same to charitable institutions for poor children. Tan convinced McLoughlin to
transfer from Sheraton Hotel to Tropicana where Lainez, Payam and Danilo Lopez were employed.
Lopez served as manager of the hotel while Lainez and Payam had custody of the keys for the
safety deposit boxes of Tropicana. Tan took care of McLoughlins booking at the Tropicana where
he started staying during his trips to the Philippines from December 1984 to September 1987.[3]
On 30 October 1987, McLoughlin arrived from Australia and registered with Tropicana. He rented a
safety deposit box as it was his practice to rent a safety deposit box every time he registered at
Tropicana in previous trips. As a tourist, McLoughlin was aware of the procedure observed by
Tropicana relative to its safety deposit boxes. The safety deposit box could only be opened through
the use of two keys, one of which is given to the registered guest, and the other remaining in the
possession of the management of the hotel. When a registered guest wished to open his safety
deposit box, he alone could personally request the management who then would assign one of its
employees to accompany the guest and assist him in opening the safety deposit box with the two
keys.[4]
McLoughlin allegedly placed the following in his safety deposit box: Fifteen Thousand US Dollars
(US$15,000.00) which he placed in two envelopes, one envelope containing Ten Thousand US
Dollars (US$10,000.00) and the other envelope Five Thousand US Dollars (US$5,000.00); Ten
Thousand Australian Dollars (AUS$10,000.00) which he also placed in another envelope; two (2)
other envelopes containing letters and credit cards; two (2) bankbooks; and a checkbook, arranged
side by side inside the safety deposit box.[5]
On 12 December 1987, before leaving for a brief trip to Hongkong, McLoughlin opened his safety
deposit box with his key and with the key of the management and took therefrom the envelope
containing Five Thousand US Dollars (US$5,000.00), the envelope containing Ten Thousand
Australian Dollars (AUS$10,000.00), his passports and his credit cards.[6] McLoughlin left the other
items in the box as he did not check out of his room at the Tropicana during his short visit to
Hongkong. When he arrived in Hongkong, he opened the envelope which contained Five
Thousand US Dollars (US$5,000.00) and discovered upon counting that only Three Thousand US
Dollars (US$3,000.00) were enclosed therein.[7] Since he had no idea whether somebody else had
tampered with his safety deposit box, he thought that it was just a result of bad accounting since he
did not spend anything from that envelope.[8]
After returning to Manila, he checked out of Tropicana on 18 December 1987 and left for Australia.
When he arrived in Australia, he discovered that the envelope with Ten Thousand US Dollars (US
$10,000.00) was short of Five Thousand US Dollars (US$5,000). He also noticed that the jewelry
which he bought in Hongkong and stored in the safety deposit box upon his return to Tropicana
was likewise missing, except for a diamond bracelet.[9]
When McLoughlin came back to the Philippines on 4 April 1988, he asked Lainez if some money
and/or jewelry which he had lost were found and returned to her or to the management. However,
Lainez told him that no one in the hotel found such things and none were turned over to the
management. He again registered at Tropicana and rented a safety deposit box. He placed therein
one (1) envelope containing Fifteen Thousand US Dollars (US$15,000.00), another envelope
containing Ten Thousand Australian Dollars (AUS$10,000.00) and other envelopes containing his
traveling papers/documents. On 16 April 1988, McLoughlin requested Lainez and Payam to open
his safety deposit box. He noticed that in the envelope containing Fifteen Thousand US Dollars
(US$15,000.00), Two Thousand US Dollars (US$2,000.00) were missing and in the envelope
previously containing Ten Thousand Australian Dollars (AUS$10,000.00), Four Thousand Five
Hundred Australian Dollars (AUS$4,500.00) were missing.[10]
When McLoughlin discovered the loss, he immediately confronted Lainez and Payam who
admitted that Tan opened the safety deposit box with the key assigned to him.[11] McLoughlin went
up to his room where Tan was staying and confronted her. Tan admitted that she had stolen
McLoughlins key and was able to open the safety deposit box with the assistance of Lopez, Payam
and Lainez.[12] Lopez also told McLoughlin that Tan stole the key assigned to McLoughlin while the
latter was asleep.[13]
McLoughlin requested the management for an investigation of the incident. Lopez got in touch with
Tan and arranged for a meeting with the police and McLoughlin. When the police did not arrive,
Lopez and Tan went to the room of McLoughlin at Tropicana and thereat, Lopez wrote on a piece
of paper a promissory note dated 21 April 1988. The promissory note reads as follows:
I promise to pay Mr. Maurice McLoughlin the amount of AUS$4,000.00 and US$2,000.00 or its
equivalent in Philippine currency on or before May 5, 1988.[14]
Lopez requested Tan to sign the promissory note which the latter did and Lopez also signed as a
witness. Despite the execution of promissory note by Tan, McLoughlin insisted that it must be the
hotel who must assume responsibility for the loss he suffered. However, Lopez refused to accept
the responsibility relying on the conditions for renting the safety deposit box entitled Undertaking
For the Use Of Safety Deposit Box,[15] specifically paragraphs (2) and (4) thereof, to wit:
2. To release and hold free and blameless TROPICANA APARTMENT HOTEL from any liability
arising from any loss in the contents and/or use of the said deposit box for any cause whatsoever,
including but not limited to the presentation or use thereof by any other person should the key be
lost;
...
4. To return the key and execute the RELEASE in favor of TROPICANA APARTMENT HOTEL
upon giving up the use of the box.[16]
On 17 May 1988, McLoughlin went back to Australia and he consulted his lawyers as to the validity
of the abovementioned stipulations. They opined that the stipulations are void for being violative of
universal hotel practices and customs. His lawyers prepared a letter dated 30 May 1988 which was
signed by McLoughlin and sent to President Corazon Aquino.[17] The Office of the President
referred the letter to the Department of Justice (DOJ) which forwarded the same to the Western
Police District (WPD).[18]
After receiving a copy of the indorsement in Australia, McLoughlin came to the Philippines and
registered again as a hotel guest of Tropicana. McLoughlin went to Malacaňang to follow up on his
letter but he was instructed to go to the DOJ. The DOJ directed him to proceed to the WPD for
documentation. But McLoughlin went back to Australia as he had an urgent business matter to
attend to.
For several times, McLoughlin left for Australia to attend to his business and came back to the
Philippines to follow up on his letter to the President but he failed to obtain any concrete
assistance.[19]
McLoughlin left again for Australia and upon his return to the Philippines on 25 August 1989 to
pursue his claims against petitioners, the WPD conducted an investigation which resulted in the
preparation of an affidavit which was forwarded to the Manila City Fiscals Office. Said affidavit
became the basis of preliminary investigation. However, McLoughlin left again for Australia without
receiving the notice of the hearing on 24 November 1989. Thus, the case at the Fiscals Office was
dismissed for failure to prosecute. Mcloughlin requested the reinstatement of the criminal charge
for theft. In the meantime, McLoughlin and his lawyers wrote letters of demand to those having
responsibility to pay the damage. Then he left again for Australia.
Upon his return on 22 October 1990, he registered at the Echelon Towers at Malate, Manila.
Meetings were held between McLoughlin and his lawyer which resulted to the filing of a complaint
for damages on 3 December 1990 against YHT Realty Corporation, Lopez, Lainez, Payam and Tan
(defendants) for the loss of McLoughlins money which was discovered on 16 April 1988. After filing
the complaint, McLoughlin left again for Australia to attend to an urgent business matter. Tan and
Lopez, however, were not served with summons, and trial proceeded with only Lainez, Payam and
YHT Realty Corporation as defendants.
After defendants had filed their Pre-Trial Brief admitting that they had previously allowed and
assisted Tan to open the safety deposit box, McLoughlin filed an Amended/Supplemental
Complaint[20] dated 10 June 1991 which included another incident of loss of money and jewelry in
the safety deposit box rented by McLoughlin in the same hotel which took place prior to 16 April
1988.[21] The trial court admitted the Amended/Supplemental Complaint.
During the trial of the case, McLoughlin had been in and out of the country to attend to urgent
business in Australia, and while staying in the Philippines to attend the hearing, he incurred
expenses for hotel bills, airfare and other transportation expenses, long distance calls to Australia,
Meralco power expenses, and expenses for food and maintenance, among others.[22]
After trial, the RTC of Manila rendered judgment in favor of McLoughlin, the dispositive portion of
which reads:
WHEREFORE, above premises considered, judgment is hereby rendered by this Court in favor of
plaintiff and against the defendants, to wit:
1. Ordering defendants, jointly and severally, to pay plaintiff the sum of US$11,400.00 or its
equivalent in Philippine Currency of P342,000.00, more or less, and the sum of AUS$4,500.00 or
its equivalent in Philippine Currency of P99,000.00, or a total of P441,000.00, more or less, with
12% interest from April 16 1988 until said amount has been paid to plaintiff (Item 1, Exhibit CC);
2. Ordering defendants, jointly and severally to pay plaintiff the sum of P3,674,238.00 as actual
and consequential damages arising from the loss of his Australian and American dollars and
jewelries complained against and in prosecuting his claim and rights administratively and judicially
(Items II, III, IV, V, VI, VII, VIII, and IX, Exh. CC);
3. Ordering defendants, jointly and severally, to pay plaintiff the sum of P500,000.00 as moral
damages (Item X, Exh. CC);
4. Ordering defendants, jointly and severally, to pay plaintiff the sum of P350,000.00 as exemplary
damages (Item XI, Exh. CC);
5. And ordering defendants, jointly and severally, to pay litigation expenses in the sum of
P200,000.00 (Item XII, Exh. CC);
6. Ordering defendants, jointly and severally, to pay plaintiff the sum of P200,000.00 as attorneys
fees, and a fee of P3,000.00 for every appearance; and
7. Plus costs of suit.
SO ORDERED.[23]
The trial court found that McLoughlins allegations as to the fact of loss and as to the amount of
money he lost were sufficiently shown by his direct and straightforward manner of testifying in court
and found him to be credible and worthy of belief as it was established that McLoughlins money,
kept in Tropicanas safety deposit box, was taken by Tan without McLoughlins consent. The taking
was effected through the use of the master key which was in the possession of the management.
Payam and Lainez allowed Tan to use the master key without authority from McLoughlin. The trial
court added that if McLoughlin had not lost his dollars, he would not have gone through the trouble
and personal inconvenience of seeking aid and assistance from the Office of the President, DOJ,
police authorities and the City Fiscals Office in his desire to recover his losses from the hotel
management and Tan.[24]
As regards the loss of Seven Thousand US Dollars (US$7,000.00) and jewelry worth
approximately One Thousand Two Hundred US Dollars (US$1,200.00) which allegedly occurred
during his stay at Tropicana previous to 4 April 1988, no claim was made by McLoughlin for such
losses in his complaint dated 21 November 1990 because he was not sure how they were lost and
who the responsible persons were. But considering the admission of the defendants in their pre-
trial brief that on three previous occasions they allowed Tan to open the box, the trial court opined
that it was logical and reasonable to presume that his personal assets consisting of Seven
Thousand US Dollars (US$7,000.00) and jewelry were taken by Tan from the safety deposit box
without McLoughlins consent through the cooperation of Payam and Lainez.[25]
The trial court also found that defendants acted with gross negligence in the performance and
exercise of their duties and obligations as innkeepers and were therefore liable to answer for the
losses incurred by McLoughlin.[26]
Moreover, the trial court ruled that paragraphs (2) and (4) of the Undertaking For The Use Of
Safety Deposit Box are not valid for being contrary to the express mandate of Article 2003 of the
New Civil Code and against public policy.[27] Thus, there being fraud or wanton conduct on the part
of defendants, they should be responsible for all damages which may be attributed to the non-
performance of their contractual obligations.[28]
The Court of Appeals affirmed the disquisitions made by the lower court except as to the amount of
damages awarded. The decretal text of the appellate courts decision reads:
THE FOREGOING CONSIDERED, the appealed Decision is hereby AFFIRMED but modified as
follows:
The appellants are directed jointly and severally to pay the plaintiff/appellee the following amounts:
1) P153,200.00 representing the peso equivalent of US$2,000.00 and AUS$4,500.00;
2) P308,880.80, representing the peso value for the air fares from Sidney [sic] to Manila and back
for a total of eleven (11) trips;
3) One-half of P336,207.05 or P168,103.52 representing payment to Tropicana Apartment Hotel;
4) One-half of P152,683.57 or P76,341.785 representing payment to Echelon Tower;
5) One-half of P179,863.20 or P89,931.60 for the taxi xxx transportation from the residence to
Sidney [sic] Airport and from MIA to the hotel here in Manila, for the eleven (11) trips;
6) One-half of P7,801.94 or P3,900.97 representing Meralco power expenses;
7) One-half of P356,400.00 or P178,000.00 representing expenses for food and maintenance;
8) P50,000.00 for moral damages;
9) P10,000.00 as exemplary damages; and
10) P200,000 representing attorneys fees.
With costs.
SO ORDERED.[29]
Unperturbed, YHT Realty Corporation, Lainez and Payam went to this Court in this appeal by
certiorari.
Petitioners submit for resolution by this Court the following issues: (a) whether the appellate courts
conclusion on the alleged prior existence and subsequent loss of the subject money and jewelry is
supported by the evidence on record; (b) whether the finding of gross negligence on the part of
petitioners in the performance of their duties as innkeepers is supported by the evidence on record;
(c) whether the Undertaking For The Use of Safety Deposit Box admittedly executed by private
respondent is null and void; and (d) whether the damages awarded to private respondent, as well
as the amounts thereof, are proper under the circumstances.[30]
The petition is devoid of merit.
It is worthy of note that the thrust of Rule 45 is the resolution only of questions of law and any
peripheral factual question addressed to this Court is beyond the bounds of this mode of review.
Petitioners point out that the evidence on record is insufficient to prove the fact of prior existence of
the dollars and the jewelry which had been lost while deposited in the safety deposit boxes of
Tropicana, the basis of the trial court and the appellate court being the sole testimony of
McLoughlin as to the contents thereof. Likewise, petitioners dispute the finding of gross negligence
on their part as not supported by the evidence on record.
We are not persuaded. We adhere to the findings of the trial court as affirmed by the appellate
court that the fact of loss was established by the credible testimony in open court by McLoughlin.
Such findings are factual and therefore beyond the ambit of the present petition.
The trial court had the occasion to observe the demeanor of McLoughlin while testifying which
reflected the veracity of the facts testified to by him. On this score, we give full credence to the
appreciation of testimonial evidence by the trial court especially if what is at issue is the credibility
of the witness. The oft-repeated principle is that where the credibility of a witness is an issue, the
established rule is that great respect is accorded to the evaluation of the credibility of witnesses by
the trial court.[31] The trial court is in the best position to assess the credibility of witnesses and their
testimonies because of its unique opportunity to observe the witnesses firsthand and note their
demeanor, conduct and attitude under grilling examination.[32]
We are also not impressed by petitioners argument that the finding of gross negligence by the
lower court as affirmed by the appellate court is not supported by evidence. The evidence reveals
that two keys are required to open the safety deposit boxes of Tropicana. One key is assigned to
the guest while the other remains in the possession of the management. If the guest desires to
open his safety deposit box, he must request the management for the other key to open the same.
In other words, the guest alone cannot open the safety deposit box without the assistance of the
management or its employees. With more reason that access to the safety deposit box should be
denied if the one requesting for the opening of the safety deposit box is a stranger. Thus, in case of
loss of any item deposited in the safety deposit box, it is inevitable to conclude that the
management had at least a hand in the consummation of the taking, unless the reason for the loss
is force majeure.
Noteworthy is the fact that Payam and Lainez, who were employees of Tropicana, had custody of
the master key of the management when the loss took place. In fact, they even admitted that they
assisted Tan on three separate occasions in opening McLoughlins safety deposit box.[33] This only
proves that Tropicana had prior knowledge that a person aside from the registered guest had
access to the safety deposit box. Yet the management failed to notify McLoughlin of the incident
and waited for him to discover the taking before it disclosed the matter to him. Therefore,
Tropicana should be held responsible for the damage suffered by McLoughlin by reason of the
negligence of its employees.
The management should have guarded against the occurrence of this incident considering that
Payam admitted in open court that she assisted Tan three times in opening the safety deposit box
of McLoughlin at around 6:30 A.M. to 7:30 A.M. while the latter was still asleep.[34] In light of the
circumstances surrounding this case, it is undeniable that without the acquiescence of the
employees of Tropicana to the opening of the safety deposit box, the loss of McLoughlins money
could and should have been avoided.
The management contends, however, that McLoughlin, by his act, made its employees believe that
Tan was his spouse for she was always with him most of the time. The evidence on record,
however, is bereft of any showing that McLoughlin introduced Tan to the management as his wife.
Such an inference from the act of McLoughlin will not exculpate the petitioners from liability in the
absence of any showing that he made the management believe that Tan was his wife or was duly
authorized to have access to the safety deposit box. Mere close companionship and intimacy are
not enough to warrant such conclusion considering that what is involved in the instant case is the
very safety of McLoughlins deposit. If only petitioners exercised due diligence in taking care of
McLoughlins safety deposit box, they should have confronted him as to his relationship with Tan
considering that the latter had been observed opening McLoughlins safety deposit box a number of
times at the early hours of the morning. Tans acts should have prompted the management to
investigate her relationship with McLoughlin. Then, petitioners would have exercised due diligence
required of them. Failure to do so warrants the conclusion that the management had been remiss
in complying with the obligations imposed upon hotel-keepers under the law.
Under Article 1170 of the New Civil Code, those who, in the performance of their obligations, are
guilty of negligence, are liable for damages. As to who shall bear the burden of paying damages,
Article 2180, paragraph (4) of the same Code provides that the owners and managers of an
establishment or enterprise are likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the occasion of their functions. Also,
this Court has ruled that if an employee is found negligent, it is presumed that the employer was
negligent in selecting and/or supervising him for it is hard for the victim to prove the negligence of
such employer.[35] Thus, given the fact that the loss of McLoughlins money was consummated
through the negligence of Tropicanas employees in allowing Tan to open the safety deposit box
without the guests consent, both the assisting employees and YHT Realty Corporation itself, as
owner and operator of Tropicana, should be held solidarily liable pursuant to Article 2193.[36]
The issue of whether the Undertaking For The Use of Safety Deposit Box executed by McLoughlin
is tainted with nullity presents a legal question appropriate for resolution in this petition. Notably,
both the trial court and the appellate court found the same to be null and void. We find no reason to
reverse their common conclusion. Article 2003 is controlling, thus:
Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect
that he is not liable for the articles brought by the guest. Any stipulation between the hotel-keeper
and the guest whereby the responsibility of the former as set forth in Articles 1998 to 2001[37] is
suppressed or diminished shall be void.
Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to
apply to situations such as that presented in this case. The hotel business like the common carriers
business is imbued with public interest. Catering to the public, hotelkeepers are bound to provide
not only lodging for hotel guests and security to their persons and belongings. The twin duty
constitutes the essence of the business. The law in turn does not allow such duty to the public to
be negated or diluted by any contrary stipulation in so-called undertakings that ordinarily appear in
prepared forms imposed by hotel keepers on guests for their signature.
In an early case,[38] the Court of Appeals through its then Presiding Justice (later Associate Justice
of the Court) Jose P. Bengzon, ruled that to hold hotelkeepers or innkeeper liable for the effects of
their guests, it is not necessary that they be actually delivered to the innkeepers or their
employees. It is enough that such effects are within the hotel or inn.[39] With greater reason should
the liability of the hotelkeeper be enforced when the missing items are taken without the guests
knowledge and consent from a safety deposit box provided by the hotel itself, as in this case.
Paragraphs (2) and (4) of the undertaking manifestly contravene Article 2003 of the New Civil Code
for they allow Tropicana to be released from liability arising from any loss in the contents and/or
use of the safety deposit box for any cause whatsoever.[40] Evidently, the undertaking was intended
to bar any claim against Tropicana for any loss of the contents of the safety deposit box whether or
not negligence was incurred by Tropicana or its employees. The New Civil Code is explicit that the
responsibility of the hotel-keeper shall extend to loss of, or injury to, the personal property of the
guests even if caused by servants or employees of the keepers of hotels or inns as well as by
strangers, except as it may proceed from any force majeure.[41] It is the loss through force majeure
that may spare the hotel-keeper from liability. In the case at bar, there is no showing that the act of
the thief or robber was done with the use of arms or through an irresistible force to qualify the
same as force majeure.[42]
Petitioners likewise anchor their defense on Article 2002[43] which exempts the hotel-keeper from
liability if the loss is due to the acts of his guest, his family, or visitors. Even a cursory reading of
the provision would lead us to reject petitioners contention. The justification they raise would
render nugatory the public interest sought to be protected by the provision. What if the negligence
of the employer or its employees facilitated the consummation of a crime committed by the
registered guests relatives or visitor? Should the law exculpate the hotel from liability since the loss
was due to the act of the visitor of the registered guest of the hotel? Hence, this provision
presupposes that the hotel-keeper is not guilty of concurrent negligence or has not contributed in
any degree to the occurrence of the loss. A depositary is not responsible for the loss of goods by
theft, unless his actionable negligence contributes to the loss.[44]
In the case at bar, the responsibility of securing the safety deposit box was shared not only by the
guest himself but also by the management since two keys are necessary to open the safety
deposit box. Without the assistance of hotel employees, the loss would not have occurred. Thus,
Tropicana was guilty of concurrent negligence in allowing Tan, who was not the registered guest, to
open the safety deposit box of McLoughlin, even assuming that the latter was also guilty of
negligence in allowing another person to use his key. To rule otherwise would result in undermining
the safety of the safety deposit boxes in hotels for the management will be given imprimatur to
allow any person, under the pretense of being a family member or a visitor of the guest, to have
access to the safety deposit box without fear of any liability that will attach thereafter in case such
person turns out to be a complete stranger. This will allow the hotel to evade responsibility for any
liability incurred by its employees in conspiracy with the guests relatives and visitors.
Petitioners contend that McLoughlins case was mounted on the theory of contract, but the trial
court and the appellate court upheld the grant of the claims of the latter on the basis of tort.[45]
There is nothing anomalous in how the lower courts decided the controversy for this Court has
pronounced a jurisprudential rule that tort liability can exist even if there are already contractual
relations. The act that breaks the contract may also be tort.[46]
As to damages awarded to McLoughlin, we see no reason to modify the amounts awarded by the
appellate court for the same were based on facts and law. It is within the province of lower courts
to settle factual issues such as the proper amount of damages awarded and such finding is binding
upon this Court especially if sufficiently proven by evidence and not unconscionable or excessive.
Thus, the appellate court correctly awarded McLoughlin Two Thousand US Dollars (US$2,000.00)
and Four Thousand Five Hundred Australian dollars (AUS$4,500.00) or their peso equivalent at the
time of payment,[47] being the amounts duly proven by evidence.[48] The alleged loss that took place
prior to 16 April 1988 was not considered since the amounts alleged to have been taken were not
sufficiently established by evidence. The appellate court also correctly awarded the sum of
P308,880.80, representing the peso value for the air fares from Sydney to Manila and back for a
total of eleven (11) trips;[49] one-half of P336,207.05 or P168,103.52 representing payment to
Tropicana;[50] one-half of P152,683.57 or P76,341.785 representing payment to Echelon Tower;[51]
one-half of P179,863.20 or P89,931.60 for the taxi or transportation expenses from McLoughlins
residence to Sydney Airport and from MIA to the hotel here in Manila, for the eleven (11) trips;[52]
one-half of P7,801.94 or P3,900.97 representing Meralco power expenses;[53] one-half of
P356,400.00 or P178,000.00 representing expenses for food and maintenance.[54]
The amount of P50,000.00 for moral damages is reasonable. Although trial courts are given
discretion to determine the amount of moral damages, the appellate court may modify or change
the amount awarded when it is palpably and scandalously excessive. Moral damages are not
intended to enrich a complainant at the expense of a defendant. They are awarded only to enable
the injured party to obtain means, diversion or amusements that will serve to alleviate the moral
suffering he has undergone, by reason of defendants culpable action.[55]
The awards of P10,000.00 as exemplary damages and P200,000.00 representing attorneys fees
are likewise sustained.
WHEREFORE, foregoing premises considered, the Decision of the Court of Appeals dated
19 October 1995 is hereby AFFIRMED. Petitioners are directed, jointly and severally, to pay private
respondent the following amounts:
(1) US$2,000.00 and AUS$4,500.00 or their peso equivalent at the time of payment;
(2) P308,880.80, representing the peso value for the air fares from Sydney to Manila and back for
a total of eleven (11) trips;
(3) One-half of P336,207.05 or P168,103.52 representing payment to Tropicana Copacabana
Apartment Hotel;
(4) One-half of P152,683.57 or P76,341.785 representing payment to Echelon Tower;
(5) One-half of P179,863.20 or P89,931.60 for the taxi or transportation expense from McLoughlins
residence to Sydney Airport and from MIA to the hotel here in Manila, for the eleven (11) trips;
(6) One-half of P7,801.94 or P3,900.97 representing Meralco power expenses;
(7) One-half of P356,400.00 or P178,200.00 representing expenses for food and maintenance;
(8) P50,000.00 for moral damages;
(9) P10,000.00 as exemplary damages; and
(10) P200,000 representing attorneys fees.
With costs.
!!
!!
!!
!!
!!
MARCELO MACALINAO, G.R. No. 146635
Substituted by
ESPERANZA MACALINAO
and ANTONIO MACALINAO,
Petitioners,
Present:

! PUNO, J.,
- versus - Chairman,
AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO, JJ.
EDDIE MEDECIELO ONG
and GENOVEVO SEBASTIAN,
Respondents. Promulgated:
! December 14, 2005

x-------------------------------------------------------------------- x
!
!D E C I S I O N
TINGA, J.:

!Before this Court is a Petition for Review on Certiorari assailing the Decision [1]
and Resolution[2] of
the Court of Appeals dated 31 May 2000 and 7 September 2000, respectively, in CA-G.R. CV No.
52963. The Court of Appeals reversed the judgment of the trial court and dismissed the complaint
for damages filed by Marcelo Macalinao (Macalinao) against Eddie Medecielo Ong (Ong) and
Genovevo Sebastian (Sebastian) for insufficiency of evidence.

The antecedent facts follow.

Macalinao and Ong were employed as utility man and driver, respectively, at the
Genetron International Marketing (Genetron), a single proprietorship owned and operated by
Sebastian. On 25 April 1992, Sebastian instructed Macalinao, Ong and two truck helpers to deliver
a heavy piece of machinerya reactor/motor for mixing chemicals, to Sebastians manufacturing
plant in Angat, Bulacan. While in the process of complying with the order, the vehicle driven by
Ong, Genetrons Isuzu Elf truck with plate no. PMP-106 hit and bumped the front portion of a
private jeepney with plate no. DAF-922 along Caypombo, Sta. Maria, Bulacan at around 11:20 in
the morning.[3]

Both vehicles incurred severe damages while the passengers sustained physical injuries
as a consequence of the collision.[4] Macalinao incurred the most serious injuries
!
among the passengers of the truck. He was initially brought to the Sta. Maria District Hospital for
first aid treatment but in view of the severity of his condition, he was transferred to the Philippine
Orthopedic Center at the instance of Sebastian. He was again moved to the Capitol Medical
Center by his parents, petitioners herein, for medical reasons and later to the Philippine General
Hospital for financial considerations.[5]

Macalinaos body was paralyzed and immobilized from the neck down as a result of the
accident and per doctors advice, his foot was amputated. He also suffered from bed sores and
infection. His immedicable condition, coupled with the doctors recommendation, led his family to
bring him home where he died on 7 November 1992.[6]

Before he died, Macalinao was able to file an action for damages against both Ong and Sebastian
before the Regional Trial Court (RTC) of Quezon City, Branch 81.[7] After his death, Macalinao was
substituted by his parents in the action.[8] A criminal case for reckless imprudence
!
resulting to serious physical injuries[9] had also been instituted earlier against Ong but for reasons
which do not appear in the records of this case, trial thereon did not ensue.[10]

After trial in the civil action, the RTC held that based on the evidence, Ong drove the Isuzu truck in
a reckless and imprudent manner thereby causing the same to hit the private jeepney. It observed
that while respondents claimed that Ong was driving cautiously and prudently at the time of the
mishap, no evidence was presented to substantiate the claim.[11] It declared Ong negligent and at
the same time, it held that Sebastian failed to exercise the diligence of a good father of a family in
the selection and supervision of Ong. Consequently, the trial court pronounced the two of them
jointly liable to pay actual, moral, and exemplary damages as well as civil indemnity for Macalinaos
death. The trial court subsequently increased the monetary award[12] upon petitioners motion for
reconsideration thereof.

On appeal, the appellate court reversed the findings of the trial court. It held that the evidence
presented by petitioners was woefully scant to support a verdict of negligence against Ong. And
since respondents liability hinged squarely on proof of Ongs negligence, neither of them could be
held liable for damages to petitioners.[13]

Aggrieved at the ruling, petitioners elevated the case to this Court. They herein contend that
contrary to the conclusion reached by the Court of Appeals, the evidence conclusively establish
fault or negligence on the part of Ong and justify the award of damages in their favor.

The petition is meritorious.

The issue of negligence is factual and, in quasi-delicts, crucial in the award of damages.
[14]
In the case at bar, the crux of the controversy is the sufficiency of the evidence presented to
support a finding of negligence against Ong. Given the contradictory conclusions of the trial court
and the appellate court on this issue, this Court is impelled to ascertain for itself which court made
the correct determination.

While as a rule factual findings of the Court of Appeals are deemed conclusive in cases
brought to us on appeal, we have also consistently pronounced that we may review its findings of
fact in the following instances, among others:
 (i) when the judgment of the Court of Appeals was based
on a misapprehension of facts; (ii) when the factual findings are
conflicting; (iii) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; and (iv)
where the findings of fact of the Court of Appeals are contrary to
those of the trial court, or are mere conclusions without citation of
specific evidence, or where the facts set forth by the petitioner are
not disputed by the respondent, or where the findings of fact of the
Court of Appeals are premised on the absence of evidence and are
contradicted by the evidence on record.[15]

Said exceptions obtain in this case thus, a departure from the application of the general
rule is warranted.
!In reversing the trial court and absolving respondents from liability, the appellate court
made the following pronouncement:

The evidence presented is woefully scant. The pictures of

the collision afford no basis for concluding that it was the fault of the
defendant driver, or that he was driving recklessly. The police report
contains no findings as to the road conditions, estimates of the
relative speed of the vehicles, or their exact position at the time of
the accident. And even so, entries in the police blotter should not be
given significance or probative value as they do not constitute
conclusive proof of the truth thereof. Nor were eyewitnesses
presented, not even affidavits or statements to give any indication
as to what actually happened. The police investigators findings are
sketchy at best, with only the phrase Isuzu lost control as his
opinion, with no explanation how he reached it. Civil cases require
evidence of a lesser degree than criminal cases, but one sentence
by one who did not even witness an event, is not conclusive proof.
 ...

There was only the fact of the collision before the trial
court. The attendant circumstances were not established, and no
fault could be determined using the evidence, both testimonial and
documentary presented.[16]

Contrary to the above conclusion of the appellate court, the evidence on record coupled
with the doctrine of res ipsa loquitur sufficiently establishes Ongs negligence.

We focus first on the evidence presented before the trial court.

The photographs of the accident which the appellate court cavalierly brushed aside as
insignificant deserve substantial cogitation. In Jose v. Court of Appeals,[17] we upheld the trial
courts reliance on photographs of the accident as opposed to a partys obviously biased testimony.
In so doing, we stated:

In criminal cases such as murder or rape where the accused stands to lose his
liberty if found guilty, this Court has, in many occasions, relied
principally upon physical evidence in ascertaining the truth. In
People v. Vasquez,[18] where the physical evidence on record ran
counter to the testimonial evidence of the prosecution witnesses,
we ruled that the physical evidence should prevail.[19]
 Physical evidence is a mute but an eloquent manifestation of truth which ranks
high in our hierarchy of trustworthy evidence.[20]

In this case, while there is a dearth of testimonial evidence to enlighten us about what actually
happened, photographs[21] depicting the relative positions of the vehicles immediately after the
accident took place do exist. It is well established that photographs, when duly verified and shown
by extrinsic evidence to be faithful representations of the subject as of the time in question, are, in
the discretion of the trial court, admissible in evidence as aids in arriving at an understanding of the
evidence, the situation or condition of objects or premises or the circumstances of an accident.[22]

According to American courts, photographs are admissible in evidence in motor vehicle accident
cases when they appear to have been accurately taken and are proved to be a faithful and clear
representation of the subject, which cannot itself be produced, and are of such nature as to throw
light upon a disputed point.[23] Before a photograph may be admitted in evidence, however, its
accuracy or correctness must be proved, and it must be authenticated or verified[24] first. In the
case at bar, the photographer testified in open court and properly identified the pictures as the
ones he took at the scene of the accident.[25]

An examination of said photographs clearly shows that the road where the mishap
occurred is marked by a line at the center separating the right from the left lane. Based on the
motorists right of way rule, the Isuzu truck which was headed towards Norzagaray, Bulacan[26]
should have been occupying the left lane while the private jeepney which was traversing the road
to the town proper of Sta. Maria, Bulacan[27] should have been in the right lane. Exhibits L and L-4
among the photographs, however, reveal that in the aftermath of the collision, the Isuzu truck
usurped the opposite lane to such an extent that only its right rear wheel remained in the left lane,
a few inches from the demarcation line. Its two front wheels and left rear wheel were planted
squarely on the private jeepneys lane and the Isuzu truck had rotated such that its front no longer
pointed towards Norzagaray but partially faced the town proper of Sta. Maria instead.

While ending up at the opposite lane is not conclusive proof of fault in automobile collisions, the
position of the two vehicles gives rise to the conclusion that it was the Isuzu truck which hit the
private jeepney rather than the other way around. The smashed front of the Isuzu truck is pressed
against the private jeepneys left front portion near the drivers side. The private jeepney is
positioned diagonally in the right lane; its front at the rightmost corner of the road while its rear
remained a few feet from the demarcation line. Based on the angle at which it stopped, the private
jeepney obviously swerved to the right in an unsuccessful effort to avoid the Isuzu truck. This
would support the statement of the police investigator that the Isuzu truck lost control[28] and hit the
left front portion of the private jeepney.[29] It would also explain why the driver of the private jeepney
died immediately after being brought to the hospital,[30] since in such a scenario, the brunt of the
collision logically bore down on him.

Moreover, the unequal size and weight of the two vehicles would make it improbable for
the relatively lighter private jeepney to have stricken the heavier truck with such force as to push
the latter to the formers side of the road. Had that been the case, the two vehicles would have
ended up crushed together at the center of the road or at the Isuzu trucks lane instead of rolling to
a stop at the private jeepneys lane.

Another piece of evidence which supports a finding of negligence against Ong is the police report
of the incident denoted as Entry No. 04-229 of the Sta. Maria Police Station. The report states that
the Isuzu truck was the one which hit the left front portion of the private jeepney.[31] This piece of
evidence was disregarded by the Court of Appeals on the ground that entries in police blotters
should not be given significance or probative value as they do not constitute conclusive proof of the
truth thereof.

While true in most instances, it must still be remembered that although police blotters are
of little probative value, they are nevertheless admitted and considered in the absence of
competent evidence to refute the facts stated therein.[32] Entries in police records made by a police
officer in the performance of the duty especially enjoined by law are prima facie evidence of the
fact therein stated,[33] and their probative value may be either substantiated or nullified by other
competent evidence.[34]

In this case, the police blotter was identified and formally offered as evidence and the person who
made the entries thereon was likewise presented in court. On the other hand, aside from a blanket
allegation that the driver of the other vehicle was the one at fault, respondents did not present any
evidence to back up their charge and show that the conclusion of the police investigator was false.
Given the paucity of details in the report, the investigators observation could have been easily
refuted and overturned by respondents through the simple expedient of supplying the missing facts
and showing to the satisfaction of the
!
court that the Isuzu truck was blameless in the incident. Ong was driving the truck while the two
other truck helpers also survived the accident. Any or all of them could have given their testimony
to shed light on what actually transpired, yet not one of them was presented to substantiate the
claim that Ong was not negligent.

Since respondents failed to refute the contents of the police blotter, the statement therein that the
Isuzu truck hit the private jeepney and not the other way around is deemed established. The prima
facie nature of the police report ensures that if it remains unexplained or uncontradicted, it will be
sufficient to establish the facts posited therein.[35]

While not constituting direct proof of Ongs negligence, the foregoing pieces of evidence justify the
application of res ipsa loquitur, a Latin phrase which literally means the thing or the transaction
speaks for itself.[36]
!Res ipsa loquitur recognizes that parties may establish prima facie negligence without direct proof,
thus, it allows the principle to substitute for specific proof of negligence.[37] It permits the plaintiff to
present along with proof of the accident, enough of the attending circumstances to invoke the
doctrine, create an inference or presumption of negligence and thereby place on the defendant the
burden of proving that there was no negligence on his part.[38]

The doctrine can be invoked only when under the circumstances, direct evidence is
absent and not readily available.[39] This is based in part upon the theory that the defendant in
charge of the instrumentality which causes the injury either knows the cause of the accident or has
the best opportunity of ascertaining it while the plaintiff has no such knowledge, and is therefore
compelled to allege negligence in general terms and rely upon the proof of the happening of the
accident in order to establish negligence.[40] The inference which the doctrine permits is grounded
upon the fact that the chief evidence of the true cause, whether culpable or innocent, is practically
accessible to the defendant but inaccessible to the injured person.[41]

In this case, Macalinao could no longer testify as to the cause of the accident since he is dead.
Petitioners, while substituting their son as plaintiff, have no actual knowledge
!
about the event since they were not present at the crucial moment. The driver of the private
jeepney who could have shed light on the circumstances is likewise dead. The only ones left with
knowledge about the cause of the mishap are the two truck helpers who survived, both employees
of Sebastian, and Ong, who is not only Sebastians previous employee but his co-respondent in this
case as well. In the circumstances, evidence as to the true cause of the accident is, for all intents
and purposes, accessible to respondents but not to petitioners. The witnesses left are unlikely to
divulge to petitioners what they knew about the cause of the accident if the same militates against
the interest of their employer. This justifies the invocation of the doctrine.

Under local jurisprudence, the following are the requisites for the application of res ipsa
loquitur:

(1) The accident is of a kind which ordinarily does not occur in

the absence of someones negligence;

(2) It is caused by an instrumentality within the exclusive

control of the defendant or defendants; and

(3) The possibility of contributing conduct which would make

the plaintiff responsible is eliminated.[42]

We are convinced that all the above requisites are present in the case at bar.
No two motor vehicles traversing opposite lanes will collide as a matter of course unless
someone is negligent, thus, the first requisite for the application of the doctrine is present. Ong was
driving the Isuzu truck which, from the evidence adduced, appears to have precipitated the
collision with the private jeepney. Driving the Isuzu truck gave Ong exclusive management and
control over it, a fact which shows that the second requisite is also present. No contributory
negligence could be attributed to Macalinao relative to the happening of the accident since he was
merely a passenger in the Isuzu truck. Respondents allegation that Macalinao was guilty of
contributory negligence for failing to take the necessary precautions to ensure his safety while
onboard the truck[43] is too specious for belief particularly as respondents did not even present any
evidence to prove such allegation. The last requisite is, therefore, likewise present.

There exists a fourth requisite under American jurisprudence, that is, that the defendant
fails to offer any explanation tending to show that the injury was caused by his or her want of due
care.[44] In this case, while respondents claimed that Ong drove cautiously and prudently during the
time in question, no evidence was proffered to substantiate the same. In fact, Ong did not bother to
testify to explain his actuations and to show that he exercised due care when the accident
happened, so even this requisite is fulfilled.
!
All the requisites for the application of the rule of res ipsa loquitur are present, thus a reasonable
presumption or inference of Ongs negligence arises. In consonance with the effect of the doctrine,
the burden of proving due care at the time in question shifts to respondents. Unfortunately, as
previously discussed, aside from blanket allegations that Ong exercised prudence and due care
while driving on the day of the accident, respondents proffered no other proof. As a consequence,
the prima facie finding of negligence against Ong, remaining unexplained and/or uncontradicted, is
deemed established. This in turn warrants a finding that Ong is liable for damages to petitioners.

Such liability of Ong is solidary with Sebastian pursuant to Art. 2176 in relation to Art. 2180 of the
Civil Code which provide:

Art. 2176. Whoever by act or omission causes damage to

another, there being fault or negligence is obliged to pay for the
damage done . . . .

Art. 2180. The obligation imposed by Art. 2176 is demandable

not only for ones own acts or omissions but also for those of persons
for whom one is responsible.

...

Employers shall be liable for the damage caused by their

employees and household helpers acting within the scope of their
assigned tasks even though the former are not engaged in any
business or industry.

...
The responsibility treated of in this article shall cease when
the persons herein mentioned prove that they observed all the
diligence of a good father of a family to prevent damage.
 Whenever an employees negligence causes damage or injury to another, there instantly
arises a presumption juris tantum that the employer failed to exercise diligentissimi patris families
in the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees.[45] To avoid
liability for a quasi-delict committed by his employee, an employer must overcome the presumption
by presenting convincing proof that he exercised the care and diligence of a good father of a family
in the selection and supervision of his employee.[46]

In an attempt to exculpate himself from liability, Sebastian claimed that he exercised due
care in selecting Ong as a driver. Before he hired Ong, he allegedly required him to produce police
and NBI clearances and he took into account the recommendations of Ongs previous employer
and friends.[47] Sebastian also stressed that he instructed Ong to drive slowly and carefully and to
take necessary precautions.[48] He likewise admonished Ong to be careful after the latter had some
minor accidents in the parking area.[49]

However, Sebastians statements are not sufficient to prove that he exercised the
diligence of a good father of a family in the selection of Ong. His testimony is self-serving and
devoid of corroboration as he did not bother to support the same with document evidence.
Moreover, Sebastian could not even remember whether the recommendation from Ongs previous
employer was made verbally or in writing.[50]
!On the other hand, due diligence in supervision requires the formulation of rules and
regulations for the guidance of employees and the issuance of proper instructions as well as actual
implementation and monitoring of consistent compliance with the rules.[51] Admonitions to drive
carefully without the corresponding guidelines and monitoring of the employee do not satisfy the
due diligence required by law either.

In short, Sebastians claims fall short of what is required by law to overcome the
presumption of negligence in the selection and supervision of his employee. The trial court
therefore correctly held him solidarily liable with Ong to petitioners.

In an obvious ploy to relieve himself from liability should the appellate courts decision be
reversed, Sebastian averred that Macalinao is not entitled to damages. He anchored his claim on
the novel argument that the provisions of Art. 2180 apply only when the injured party is a third
person but it has no application to an employee like Macalinao.[52] He likewise postulated that
recovery from the Social Security System, State Insurance Fund, Employees Compensation
Commission, and the Philippine Medical Care Act, the government agencies with which petitioners
filed a claim in view of Macalinaos injury and subsequent death, preclude pursuing alternate
recourse or recovering from other sources until the former claims have been rejected.[53]

Sebastian is grasping at straws. Art. 2180 makes no distinction whatsoever whether the
claimant is an employee or a third person relative to the employer. Ubi lex non distinguit nec nos
distinguere debemos. Where the law does not distinguish, neither should we.[54]

Moreover, petitioners claim against Sebastian is not based upon the fact of Macalinaos
previous employment with him but on the solidary liability of the latter for the negligent act of one of
his employees. Such is not precluded by prior claims with the government agencies enumerated.
One is based on compulsory coverage of government benefits while the other is based on a cause
of action provided by law.

Additionally, respondents postulated that since it was Macalinao who sustained physical
injuries and died, he was the one who suffered pain, not petitioners so moral damages are not
recoverable in this case.[55]
 The relatives of the victim who incurred physical injuries in a quasi-delict are not
proscribed from recovering moral damages in meritorious cases. To hold otherwise would give rise
to the ridiculous scenario where a defendant may be compelled to pay moral damages in a quasi-
delict causing physical injuries but will be relieved from doing so should those same injuries cause
the victims death.

In the case of Lambert v. Heirs of Ray Castillon,[56] we held that in quasi-delicts:

. . . . the award of moral damages is aimed at a restoration, within the limits

possible, of the spiritual status quo ante; and therefore, it must be
proportionate to the suffering inflicted. The intensity of the pain
experienced by the relatives of the victim is proportionate to the
intensity of affection for him and bears no relation whatsoever with
the wealth or means of the offender.[57] (Emphasis Supplied.)

The trial court awarded moral damages in the amount of P30,000.00 but since prevailing
jurisprudence has fixed the same at P50,000.00,[58] there is a need to increase the award to reflect
the recent rulings.

Lastly, respondents claim that exemplary damages is not warranted in this case. Under the law,
exemplary damages may be granted in quasi-delicts if the defendant acted with gross negligence.
[59] Gross negligence has been defined as negligence characterized by the want of even slight

care, acting or omitting to act in a situation where there is duty to act, not inadvertently but willfully
and intentionally, with a conscious indifference to consequences insofar as other persons may be
affected.[60]

Ongs gross negligence in driving the Isuzu truck precipitated the accident. This is lucidly portrayed
in the photographs on record and it justifies the award of exemplary damages in petitioners favor.
However, the trial courts award of P10,000.00 is insufficient, thus the Court deems it proper to
increase the award to P25,000.00 under the circumstances.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated 31
May 2000, as well as its Resolution dated 7 September 2000, are hereby SET ASIDE. The
Decision of the Regional Trial Court of Quezon City, Branch 81 dated 12 April 1996 as amended by
the Order dated 23 May 1996 is hereby REINSTATED with the modifications that the award for
moral damages is increased to P50,000.00 to conform with prevailing jurisprudence and
the award for exemplary damages is increased to P25,000.00. Costs against respondents.
!!
!!
!
!!
!MERCURY DRUG CORPORATION and ROLANDO J. DEL ROSARIO,
Petitioners,

- versus -

SPOUSES RICHARD HUANG and CARMEN HUANG, and STEPHEN HUANG,

Respondents.
G.R. No. 172122

Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.

Promulgated:

June 22, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
PUNO, C.J.:
On appeal are the Decision[if !supportFootnotes][1][endif] and Resolution[if !supportFootnotes][2][endif]
of the Court of Appeals in CA-G.R. CV No. 83981, dated February 16, 2006 and March 30, 2006,
respectively which affirmed with modification the Decision[if !supportFootnotes][3][endif] of the Regional
Trial Court (RTC) of Makati City, dated September 29, 2004. The trial court found petitioners jointly
and severally liable to pay respondents damages for the injuries sustained by respondent Stephen
Huang, son of respondent spouses Richard and Carmen Huang.
First, the facts:
Petitioner Mercury Drug Corporation (Mercury Drug) is the registered owner of a six-
wheeler 1990 Mitsubishi Truck with plate number PRE 641 (truck). It has in its employ petitioner
Rolando J. del Rosario as driver. Respondent spouses Richard and Carmen Huang are the
parents of respondent Stephen Huang and own the red 1991 Toyota Corolla GLI Sedan with plate
number PTT 775 (car).
These two vehicles figured in a road accident on December 20, 1996 at around 10:30
p.m. within the municipality of Taguig, Metro Manila. Respondent Stephen Huang was driving the
car, weighing 1,450 kg., while petitioner Del Rosario was driving the truck, weighing 14,058 kg.
Both were traversing the C-5 Highway, north bound, coming from the general direction of Alabang
going to Pasig City. The car was on the left innermost lane while the truck was on the next lane to
its right, when the truck suddenly swerved to its left and slammed into the front right side of the car.
The collision hurled the car over the island where it hit a lamppost, spun around and landed on the
opposite lane. The truck also hit a lamppost, ran over the car and zigzagged towards, and finally
stopped in front of Buellah Land Church.
At the time of the accident, petitioner Del Rosario only had a Traffic Violation Receipt
(TVR). His drivers license had been confiscated because he had been previously apprehended for
reckless driving.
The car, valued at P300,000.00, was a total wreck. Respondent Stephen Huang
sustained massive injuries to his spinal cord, head, face, and lung. Despite a series of operations,
respondent Stephen Huang is paralyzed for life from his chest down and requires continuous
medical and rehabilitation treatment.
 Respondents fault petitioner Del Rosario for committing gross negligence and reckless
imprudence while driving, and petitioner Mercury Drug for failing to exercise the diligence of a good
father of a family in the selection and supervision of its driver.
In contrast, petitioners allege that the immediate and proximate cause of the accident
was respondent Stephen Huangs recklessness. According to petitioner Del Rosario, he was driving
on the left innermost lane when the car bumped the trucks front right tire. The truck then swerved
to the left, smashed into an electric post, crossed the center island, and stopped on the other side
of the highway. The car likewise crossed over the center island and landed on the same portion of
C-5. Further, petitioner Mercury Drug claims that it exercised due diligence of a good father of a
family in the selection and supervision of all its employees.
The trial court, in its Decision dated September 29, 2004, found petitioners Mercury Drug
and Del Rosario jointly and severally liable to pay respondents actual, compensatory, moral and
exemplary damages, attorneys fees, and litigation expenses. The dispositive portion reads:
WHEREFORE, judgment is rendered finding defendants
Mercury Drug Corporation, Inc. and Rolando del Rosario, jointly and
severally liable to pay plaintiffs Spouses Richard Y. Huang and Carmen
G. Huang, and Stephen Huang the following amounts:

[if !supportLists]1. [endif]Two Million Nine Hundred

Seventy Three Thousand Pesos (P2,973,000.00) actual damages;

[if !supportLists]2. [endif]As compensatory damages:

[if !supportLists]a. [endif]Twenty Three Million Four

Hundred Sixty One Thousand, and Sixty-Two Pesos (P23,461,062.00)
for life care cost of Stephen;

[if !supportLists]b. [endif]Ten Million Pesos

(P10,000,000.00) as and for lost or impaired earning capacity of
Stephen;

[if !supportLists]3. [endif]Four Million Pesos

(P4,000,000.00) as moral damages;

[if !supportLists]4. [endif]Two Million Pesos

(P2,000,000.00) as exemplary damages; and
 [if !supportLists]5. [endif]One Million Pesos
(P1,000,000.00) as attorneys fees and litigation expense. [if !
supportFootnotes][4][endif]

On February 16, 2006, the Court of Appeals affirmed the decision of the trial court but
reduced the award of moral damages to P1,000,000.00. The appellate court also denied the
motion for reconsideration filed by petitioners.
Hence, this appeal.
Petitioners cite the following grounds for their appeal:
1. That the subject Decision which dismissed the appeal of petitioners herein but
AFFIRMED WITH MODIFICATION the decision of the Regional Trial
Court, Branch 64, Makati City, in that the award of moral damages was
reduced to P1,000,000.00 and its Resolution dated March 30, 2006,
which dismissed outright the Motion for Reconsideration must be set
aside because the Honorable Court of Appeals committed reversible
error:

[if !supportLists]A. [endif]IN DENYING OUTRIGHTLY THE MOTION FOR

RECONSIDERATION ON ALLEGEDLY BEING FILED OUT OF TIME
FOR ONE DAY;

[if !supportLists]B. [endif]IN ACCORDING GREATER WEIGHT TO THE

EVIDENCE ADDUCED BY THE RESPONDENTS HEREIN AND
COMPLETELY DISREGARDING THE DEFENSE INTERPOSED BY
THE PETITIONERS HEREIN;

[if !supportLists]C. [endif]IN DISREGARDING COMPLETELY ALL

EVIDENCES PRESENTED BY THE PETITIONERS HEREIN AND
PROCEEDED TO RENDER ITS DECISION BASED ON
PRESUMPTIONS AND PERSONAL OPINIONS OF PEOPLE WHO
ARE NOT WITNESSES TO THE ACCIDENT;

[if !supportLists]D. [endif]IN AWARDING DAMAGES IN FAVOR OF

RESPONDENTS HEREIN;

[if !supportLists]E. [endif]IN FINDING THAT MERCURY DRUG

CORPORATION FAILED TO EXERCISE THE DILIGENCE REQUIRED
IN SUPERVISING ITS EMPLOYEES DESPITE OVERWHELMING
EVIDENCE PRESENTED BY PETITIONER COMPANY;
[if !supportLists]F. [endif]IN FINDING THAT PETITIONER ROLANDO DEL
ROSARIO WAS NEGLIGENT IN DRIVING THE TRUCK AT THE TIME
OF ACCIDENT AND TOTALLY DISREGARDING THE EVIDENCES
PRESENTED DURING THE TRIAL OF THE CASE.

[if !supportLists]G. [endif]IN PRESENTING ONLY IN THE DECISION

TESTIMONIES FAVORABLE TO THE RESPONDENTS HEREIN AND
COMPLETELY DISREGARDING THE EVIDENCES PRESENTED BY
THE PETITIONERS HEREIN WHICH CONTRADICTED SUCH
TESTIMONIES NOT ONLY THROUGH ORAL TESTIMONIES BUT AS
WELL AS DOCUMENTARY EVIDENCES.[if !supportFootnotes][5][endif]

We affirm the findings of the trial court and the appellate court that petitioner Del Rosario
was negligent. The evidence does not support petitioners claim that at the time of the accident, the
truck was at the left inner lane and that it was respondent Stephen Huangs car, at its right, which
bumped the right front side of the truck. Firstly, petitioner Del Rosario could not precisely tell which
part of the truck was hit by the car,[if !supportFootnotes][6][endif] despite the fact that the truck was snub-
nosed and a lot higher than the car. Petitioner Del Rosario could not also explain why the car
landed on the opposite lane of C-5 which was on its left side. He said that the car did not pass in
front of him after it hit him or under him or over him or behind him.[if !supportFootnotes][7][endif] If the
truck were really at the left lane and the car were at its right, and the car hit the truck at its front
right side, the car would not have landed on the opposite side, but would have been thrown to the
right side of the C-5 Highway. Noteworthy on this issue is the testimony of Dr. Marlon Rosendo H.
Daza, an expert in the field of physics. He conducted a study based on the following assumptions
provided by respondents:
[if !supportLists]1. [endif]Two vehicles collided;
[if !supportLists]2. [endif]One vehicle is ten times heavier, more massive than the
other;
[if !supportLists]3. [endif]Both vehicles were moving in the same direction and at the
same speed of about 85 to 90 kilometers per hour;
[if !supportLists]4. [endif]The heavier vehicle was driving at the innermost left lane,
while the lighter vehicle was at its right.
Dr. Daza testified that given the foregoing assumptions, if the lighter vehicle hits the right front
portion of the heavier vehicle, the general direction of the light vehicle after the impact would be to
the right side of the heavy vehicle, not the other way around. The truck, he opined, is more difficult
to move as it is heavier. It is the car, the lighter vehicle, which would move to the right of, and away
from the truck. Thus, there is very little chance that the car will move towards the opposite side,
i.e., to the left of the truck.
Dr. Daza also gave a further study on the basis of the same assumptions except that the
car is on the left side of the truck, in accordance with the testimony of respondent Stephen Huang.
Dr. Daza concluded that the general direction of the car after impact would be to the left of the
truck. In this situation, the middle island against which the car was pinned would slow down the
car, and enable the truck to catch up and hit the car again, before running over it.[if !supportFootnotes][8]
[endif]

To support their thesis, petitioners tried to show the damages that the truck sustained at
its front right side. The attempt does not impress. The photographs presented were taken a month
after the accident, and Rogelio Pantua, the automechanic who repaired the truck and
authenticated the photographs, admitted that there were damages also on the left side of the truck.
[if !supportFootnotes][9][endif]

Worse still, petitioner Del Rosario further admitted that after the impact, he lost control of
the truck and failed to apply his brakes. Considering that the car was smaller and lighter than the
six-wheeler truck, the impact allegedly caused by the car when it hit the truck could not possibly be
so great to cause petitioner to lose all control that he failed to even step on the brakes. He testified,
as follows:
ATTY. DIAZ:

May I proceed, Your Honor. You were able to apply the brakes, were you sir?

WITNESS:

No more, sir, because I went over the island.

ATTY. DIAZ:

Because as you said you lost control, correct sir?

WITNESS:

Yes, sir.

ATTY. DIAZ:

In other words, sir from the time your truck was hit according to you up to the time
you rested on the shoulder, you traveled fifty meters?

WITNESS:

Yes, sir, about that distance.

ATTY. DIAZ:

And this was despite the fact that you were only traveling at the speed of seventy
five kilometers per hour, jumped over the island, hit the lamppost,
and traveled the three lanes of the opposite lane of C-5 highway, is
that what you want to impress upon this court?

WITNESS:

Yes, sir.[if !supportFootnotes][10][endif]

We therefore find no cogent reason to disturb the findings of the RTC and the Court of
Appeals. The evidence proves petitioner Del Rosarios negligence as the direct and proximate
cause of the injuries suffered by respondent Stephen Huang. Petitioner Del Rosario failed to do
what a reasonable and prudent man would have done under the circumstances.
We now come to the liability of petitioner Mercury Drug as employer of Del Rosario.
Articles 2176 and 2180 of the Civil Code provide:
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.

Art. 2180. The obligation imposed by article 2176 is

demandable not only for ones own acts or omissions, but also for those
of persons for whom one is responsible.

xxx

The owners and managers of an establishment or enterprise

are likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.

xxx
 The liability of the employer under Art. 2180 of the Civil Code is direct or immediate. It is
not conditioned on a prior recourse against the negligent employee, or a prior showing of
insolvency of such employee. It is also joint and solidary with the employee.[if !supportFootnotes][11][endif]
To be relieved of liability, petitioner Mercury Drug should show that it exercised the
diligence of a good father of a family, both in the selection of the employee and in the supervision
of the performance of his duties. Thus, in the selection of its prospective employees, the employer
is required to examine them as to their qualifications, experience, and service records.[if !
supportFootnotes][12][endif] With respect to the supervision of its employees, the employer should

formulate standard operating procedures, monitor their implementation, and impose disciplinary
measures for their breach. To establish compliance with these requirements, employers must
submit concrete proof, including documentary evidence.[if !supportFootnotes][13][endif]
In the instant case, petitioner Mercury Drug presented testimonial evidence on its hiring procedure.
According to Mrs. Merlie Caamic, the Recruitment and Training Manager of petitioner Mercury
Drug, applicants are required to take theoretical and actual driving tests, and psychological
examination. In the case of petitioner Del Rosario, however, Mrs. Caamic admitted that he took the
driving tests and psychological examination when he applied for the position of Delivery Man, but
not when he applied for the position of Truck Man. Mrs. Caamic also admitted that petitioner Del
Rosario used a Galant which is a light vehicle, instead of a truck during the driving tests. Further,
no tests were conducted on the motor skills development, perceptual speed, visual attention, depth
visualization, eye and hand coordination and steadiness of petitioner Del Rosario. No NBI and
police clearances were also presented. Lastly, petitioner Del Rosario attended only three driving
seminars on June 30, 2001, February 5, 2000 and July 7, 1984. In effect, the only seminar he
attended before the accident which occurred in 1996 was held twelve years ago in 1984.
It also appears that petitioner Mercury Drug does not provide for a back-up driver for long
trips. At the time of the accident, petitioner Del Rosario has been out on the road for more than
thirteen hours, without any alternate. Mrs. Caamic testified that she does not know of any company
policy requiring back-up drivers for long trips.[if !supportFootnotes][14][endif]
Petitioner Mercury Drug likewise failed to show that it exercised due diligence on the
supervision and discipline over its employees. In fact, on the day of the accident, petitioner Del
Rosario was driving without a license. He was holding a TVR for reckless driving. He testified that
he reported the incident to his superior, but nothing was done about it. He was not suspended or
reprimanded.[if !supportFootnotes][15][endif] No disciplinary action whatsoever was taken against
petitioner Del Rosario. We therefore affirm the finding that petitioner Mercury Drug has failed to
discharge its burden of proving that it exercised due diligence in the selection and supervision of its
employee, petitioner Del Rosario.
We now consider the damages which respondents should recover from the petitioners.
The trial court awarded the following amounts:
[if !supportLists]1. [endif]Two Million Nine Hundred Seventy-Three Thousand Pesos
(P2,973,000.00) actual damages;
![if !supportLists]2. [endif]As compensatory damages:
[if !supportLists]a. [endif]Twenty-Three Million Four Hundred Sixty One Thousand,
and Sixty-Two Pesos (P23,461,062.00) for life care cost of Stephen;
[if !supportLists]b. [endif]Ten Million Pesos (P10,000,000.00) as and for lost or
impaired earning capacity of Stephen;
[if !supportLists]3. [endif]Four Million Pesos (P4,000,000.00) as moral damages;
[if !supportLists]4. [endif]Two Million Pesos (P2,000,000.00) as exemplary damages;
and
[if !supportLists]5. [endif]One Million Pesos (P1,000,000.00) as attorneys fees and
litigation expense.
The Court of Appeals affirmed the decision of the trial court but reduced the award of
moral damages to P1,000,000.00.
With regard to actual damages, Art. 2199 of the Civil Code provides that [E]xcept as
provided by law or by stipulation one is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved x x x. In the instant case, we uphold the
finding that the actual damages claimed by respondents were supported by receipts. The amount
of P2,973,000.00 represented cost of hospital expenses, medicines, medical services and
supplies, and nursing care services provided respondent Stephen from December 20, 1996, the
day of the accident, until December 1998.
 Petitioners are also liable for all damages which are the natural and probable
consequences of the act or omission complained of.[if !supportFootnotes][16][endif] The doctors who
attended to respondent Stephen are one in their prognosis that his chances of walking again and
performing basic body functions are nil. For the rest of his life, he will need continuous
rehabilitation and therapy to prevent further complications such as pneumonia, bladder and rectum 

infection, renal failure, sepsis and severe bed sores, osteoporosis and fractures, and other spinal
cord injury-related conditions. He will be completely dependent on the care and support of his
family. We thus affirm the award of P23,461,062.00 for the life care cost of respondent Stephen
Huang, based on his average monthly expense and the actuarial computation of the remaining
years that he is expected to live; and the conservative amount of P10,000,000.00, as reduced by
the trial court, for the loss or impairment of his earning capacity,[if !supportFootnotes][17][endif] considering
his age, probable life expectancy, the state of his health, and his mental and physical condition
before the accident. He was only seventeen years old, nearly six feet tall and weighed 175 pounds.
He was in fourth year high school, and a member of the school varsity basketball team. He was
also class president and editor-in-chief of the school annual. He had shown very good leadership
qualities. He was looking forward to his college life, having just passed the entrance examinations
of the University of the Philippines, De La Salle University, and the University of Asia and the
Pacific. The University of Sto. Tomas even offered him a chance to obtain an athletic scholarship,
but the accident prevented him from attending the basketball try-outs. Without doubt, he was an
exceptional student. He excelled both in his academics and extracurricular undertakings. He is
intelligent and motivated, a go-getter, as testified by Francisco Lopez, respondent Stephen Huangs
godfather and a bank executive.[if !supportFootnotes][18][endif] Had the accident not happened, he had a
rosy future ahead of him. He wanted to embark on a banking career, get married and raise
children. Taking into account his outstanding abilities, he would have enjoyed a successful
professional career in banking. But, as Mr. Lopez stated, it is highly unlikely for someone like
respondent to ever secure a job in a bank. To his knowledge, no bank has ever hired a person
suffering with 

the kind of disability as Stephen Huangs.[if !supportFootnotes][19][endif]
We likewise uphold the award of moral and exemplary damages and attorneys fees.
The award of moral damages is aimed at a restoration, within the limits of the possible, of
the spiritual status quo ante.[if !supportFootnotes][20][endif] Moral damages are designed to compensate
and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury
unjustly caused a person. Although incapable of pecuniary computation, they must be
proportionate to the suffering inflicted.[if !supportFootnotes][21][endif] The amount of the award bears no
relation whatsoever with the wealth or means of the offender.
In the instant case, respondent Stephen Huang and respondent spouses Richard and Carmen
Huang testified to the intense suffering they continue to experience as a result of the accident.
Stephen recounted the nightmares and traumas he suffers almost every night when he relives the
accident. He also gets depression when he thinks of his bleak future. He feels frustration and
embarrassment in needing to be helped with almost everything and in his inability to do simple
things he used to do. Similarly, respondent spouses and the rest of the family undergo their own
private suffering. They live with the day-to-day uncertainty of respondent Stephen Huangs
condition. They know that the chance of full recovery is nil. Moreover, respondent Stephen Huangs
paralysis has made him prone to many other illnesses. His family, especially respondent spouses,
have to make themselves available for Stephen twenty-four hours a day. They have patterned their
daily life around taking care of him, ministering to his daily needs, altering the lifestyle to which they
had been accustomed.
Respondent Carmen Huangs brother testified on the insensitivity of petitioner Mercury Drug
towards the plight of respondent. Stephen, viz.:
Maybe words cannot describe the anger that we feel towards
the defendants. All the time that we were going through the crisis, there
was none (sic) a single sign of nor offer of help, any consolation or
anything whatsoever. It is funny because, you know, I have many
colleagues, business associates, people even as far as United States,
Japan, that I probably met only once, when they found out, they make a
call, they sent card, they write small notes, but from the defendant,
absolute silence. They didnt care, and worst, you know, this is a
company that have (sic) all the resources to help us. They were (sic) on
our part, it was doubly painful because we have no choice but to go
 back to them and buy the medicines that we need for Stephen. So, I
dont know how someone will really have no sense of decency at all to
at least find out what happened to my son, what is his condition, or if
there is anything that they can do to help us.[if !supportFootnotes][22][endif]

On the matter of exemplary damages, Art. 2231 of the Civil Code provides that in cases
of quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.
The records show that at the time of the accident, petitioner Del Rosario was driving without a
license because he was previously ticketed for reckless driving. The evidence also shows that he
failed to step on his brakes immediately after the impact. Had petitioner Del Rosario done so, the
injuries which respondent Stephen sustained could have been greatly reduced. Wanton acts such
as that committed by petitioner Del Rosario need be suppressed; and employers like petitioner
Mercury Drug should be more circumspect in the observance of due diligence in the selection and
supervision of their employees. The award of exemplary damages in favor of the respondents is
therefore justified.
With the award of exemplary damages, we also affirm the grant of attorneys fees to
respondents.[if !supportFootnotes][23][endif] In addition, attorneys fees may be granted when a party is
compelled to litigate or incur expenses to protect his interest by reason of an unjustified act of the
other party.[if !supportFootnotes][24][endif]
Cost against petitioners.
IN VIEW THEREOF, the petition is DENIED. The Decision and Resolution of the Court of Appeals
dated February 16, 2006 and March 30, 2006, respectively, in CA-G.R. CV No. 83981, are
AFFIRMED.
!!
!!
!!
!!
!!
!
G.R. No. L-11154 March 21, 1916
E. MERRITT, plaintiff-appellant,
vs.
GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.
Crossfield and O'Brien for plaintiff.

Attorney-General Avanceña for defendant..
TRENT, J.:
This is an appeal by both parties from a judgment of the Court of First Instance of the city of Manila
in favor of the plaintiff for the sum of P14,741, together with the costs of the cause.
Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which
the plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2) "in limiting
the time when plaintiff was entirely disabled to two months and twenty-one days and fixing the
damage accordingly in the sum of P2,666, instead of P6,000 as claimed by plaintiff in his
complaint."
The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that
the collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due
to the negligence of the chauffeur; (b) in holding that the Government of the Philippine Islands is
liable for the damages sustained by the plaintiff as a result of the collision, even if it be true that the
collision was due to the negligence of the chauffeur; and (c) in rendering judgment against the
defendant for the sum of P14,741.
The trial court's findings of fact, which are fully supported by the record, are as follows:
It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a motorcycle,
was going toward the western part of Calle Padre Faura, passing along the west side thereof at a
speed of ten to twelve miles an hour, upon crossing Taft Avenue and when he was ten feet from
the southwestern intersection of said streets, the General Hospital ambulance, upon reaching said
avenue, instead of turning toward the south, after passing the center thereof, so that it would be on
the left side of said avenue, as is prescribed by the ordinance and the Motor Vehicle Act, turned
suddenly and unexpectedly and long before reaching the center of the street, into the right side of
Taft Avenue, without having sounded any whistle or horn, by which movement it struck the plaintiff,
who was already six feet from the southwestern point or from the post place there.
By reason of the resulting collision, the plaintiff was so severely injured that, according to Dr.
Saleeby, who examined him on the very same day that he was taken to the General Hospital, he
was suffering from a depression in the left parietal region, a would in the same place and in the
back part of his head, while blood issued from his nose and he was entirely unconscious.
The marks revealed that he had one or more fractures of the skull and that the grey matter and
brain was had suffered material injury. At ten o'clock of the night in question, which was the time
set for performing the operation, his pulse was so weak and so irregular that, in his opinion, there
was little hope that he would live. His right leg was broken in such a way that the fracture extended
to the outer skin in such manner that it might be regarded as double and the would be exposed to
infection, for which reason it was of the most serious nature.
At another examination six days before the day of the trial, Dr. Saleeby noticed that the plaintiff's
leg showed a contraction of an inch and a half and a curvature that made his leg very weak and
painful at the point of the fracture. Examination of his head revealed a notable readjustment of the
functions of the brain and nerves. The patient apparently was slightly deaf, had a light weakness in
his eyes and in his mental condition. This latter weakness was always noticed when the plaintiff
had to do any difficult mental labor, especially when he attempted to use his money for
mathematical calculations.
According to the various merchants who testified as witnesses, the plaintiff's mental and physical
condition prior to the accident was excellent, and that after having received the injuries that have
been discussed, his physical condition had undergone a noticeable depreciation, for he had lost
the agility, energy, and ability that he had constantly displayed before the accident as one of the
best constructors of wooden buildings and he could not now earn even a half of the income that he
had secured for his work because he had lost 50 per cent of his efficiency. As a contractor, he
could no longer, as he had before done, climb up ladders and scaffoldings to reach the highest
parts of the building.
As a consequence of the loss the plaintiff suffered in the efficiency of his work as a contractor, he
had to dissolved the partnership he had formed with the engineer. Wilson, because he was
incapacitated from making mathematical calculations on account of the condition of his leg and of
his mental faculties, and he had to give up a contract he had for the construction of the Uy Chaco
building."
We may say at the outset that we are in full accord with the trial court to the effect that the collision
between the plaintiff's motorcycle and the ambulance of the General Hospital was due solely to the
negligence of the chauffeur.
The two items which constitute a part of the P14,741 and which are drawn in question by the
plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the amount
allowed for the loss of wages during the time the plaintiff was incapacitated from pursuing his
occupation. We find nothing in the record which would justify us in increasing the amount of the
first. As to the second, the record shows, and the trial court so found, that the plaintiff's services as
a contractor were worth P1,000 per month. The court, however, limited the time to two months and
twenty-one days, which the plaintiff was actually confined in the hospital. In this we think there was
error, because it was clearly established that the plaintiff was wholly incapacitated for a period of
six months. The mere fact that he remained in the hospital only two months and twenty-one days
while the remainder of the six months was spent in his home, would not prevent recovery for the
whole time. We, therefore, find that the amount of damages sustained by the plaintiff, without any
fault on his part, is P18,075.
As the negligence which caused the collision is a tort committed by an agent or employee of the
Government, the inquiry at once arises whether the Government is legally-liable for the damages
resulting therefrom.
Act No. 2457, effective February 3, 1915, reads:
An Act authorizing E. Merritt to bring suit against the Government of the Philippine Islands and
authorizing the Attorney-General of said Islands to appear in said suit.
Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E. Merritt,
of Manila, for damages resulting from a collision between his motorcycle and the ambulance of the
General Hospital on March twenty-fifth, nineteen hundred and thirteen;
Whereas it is not known who is responsible for the accident nor is it possible to determine the
amount of damages, if any, to which the claimant is entitled; and
Whereas the Director of Public Works and the Attorney-General recommended that an Act be
passed by the Legislature authorizing Mr. E. Merritt to bring suit in the courts against the
Government, in order that said questions may be decided: Now, therefore,
By authority of the United States, be it enacted by the Philippine Legislature, that:
SECTION 1. E. Merritt is hereby authorized to bring suit in the Court of First Instance of the city of
Manila against the Government of the Philippine Islands in order to fix the responsibility for the
collision between his motorcycle and the ambulance of the General Hospital, and to determine the
amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, and
the Attorney-General of the Philippine Islands is hereby authorized and directed to appear at the
trial on the behalf of the Government of said Islands, to defendant said Government at the same.
SEC. 2. This Act shall take effect on its passage.
Enacted, February 3, 1915.
Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it
also concede its liability to the plaintiff? If only the former, then it cannot be held that the Act
created any new cause of action in favor of the plaintiff or extended the defendant's liability to any
case not previously recognized.
All admit that the Insular Government (the defendant) cannot be sued by an individual without its
consent. It is also admitted that the instant case is one against the Government. As the consent of
the Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to look
carefully into the terms of the consent, and render judgment accordingly.
The plaintiff was authorized to bring this action against the Government "in order to fix the
responsibility for the collision between his motorcycle and the ambulance of the General Hospital
and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account
of said collision, . . . ." These were the two questions submitted to the court for determination. The
Act was passed "in order that said questions may be decided." We have "decided" that the
accident was due solely to the negligence of the chauffeur, who was at the time an employee of the
defendant, and we have also fixed the amount of damages sustained by the plaintiff as a result of
the collision. Does the Act authorize us to hold that the Government is legally liable for that
amount? If not, we must look elsewhere for such authority, if it exists.
The Government of the Philippine Islands having been "modeled after the Federal and State
Governments in the United States," we may look to the decisions of the high courts of that country
for aid in determining the purpose and scope of Act No. 2457.
In the United States the rule that the state is not liable for the torts committed by its officers or
agents whom it employs, except when expressly made so by legislative enactment, is well settled.
"The Government," says Justice Story, "does not undertake to guarantee to any person the fidelity
of the officers or agents whom it employs, since that would involve it in all its operations in endless
embarrassments, difficulties and losses, which would be subversive of the public
interest." (Claussen vs. City of Luverne, 103 Minn., 491, citing U. S. vs. Kirkpatrick, 9 Wheat, 720;
6 L. Ed., 199; and Beers vs. States, 20 How., 527; 15 L. Ed., 991.)
In the case of Melvin vs. State (121 Cal., 16), the plaintiff sought to recover damages from the
state for personal injuries received on account of the negligence of the state officers at the state
fair, a state institution created by the legislature for the purpose of improving agricultural and
kindred industries; to disseminate information calculated to educate and benefit the industrial
classes; and to advance by such means the material interests of the state, being objects similar to
those sought by the public school system. In passing upon the question of the state's liability for
the negligent acts of its officers or agents, the court said:
No claim arises against any government is favor of an individual, by reason of the misfeasance,
laches, or unauthorized exercise of powers by its officers or agents. (Citing Gibbons vs. U. S., 8
Wall., 269; Clodfelter vs. State, 86 N. C., 51, 53; 41 Am. Rep., 440; Chapman vs. State, 104 Cal.,
690; 43 Am. St. Rep., 158; Green vs. State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St.
Rep., 203; Story on Agency, sec. 319.)
As to the scope of legislative enactments permitting individuals to sue the state where the cause of
action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus:
By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede
its liability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause
not previously recognized. It merely gives a remedy to enforce a preexisting liability and submits
itself to the jurisdiction of the court, subject to its right to interpose any lawful defense.
In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of
1913, which authorized the bringing of this suit, read:
SECTION 1. Authority is hereby given to George Apfelbacher, of the town of Summit, Waukesha
County, Wisconsin, to bring suit in such court or courts and in such form or forms as he may be
advised for the purpose of settling and determining all controversies which he may now have with
the State of Wisconsin, or its duly authorized officers and agents, relative to the mill property of
said George Apfelbacher, the fish hatchery of the State of Wisconsin on the Bark River, and the mill
property of Evan Humphrey at the lower end of Nagawicka Lake, and relative to the use of the
waters of said Bark River and Nagawicka Lake, all in the county of Waukesha, Wisconsin.
In determining the scope of this act, the court said:
Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of the
state for the acts of its officers, and that the suit now stands just as it would stand between private
parties. It is difficult to see how the act does, or was intended to do, more than remove the state's
immunity from suit. It simply gives authority to commence suit for the purpose of settling plaintiff's
controversies with the estate. Nowhere in the act is there a whisper or suggestion that the court or
courts in the disposition of the suit shall depart from well established principles of law, or that the
amount of damages is the only question to be settled. The act opened the door of the court to the
plaintiff. It did not pass upon the question of liability, but left the suit just where it would be in the
absence of the state's immunity from suit. If the Legislature had intended to change the rule that
obtained in this state so long and to declare liability on the part of the state, it would not have left
so important a matter to mere inference, but would have done so in express terms. (Murdock Grate
Co. vs. Commonwealth, 152 Mass., 28; 24 N.E., 854; 8 L. R. A., 399.)
In Denning vs. State (123 Cal., 316), the provisions of the Act of 1893, relied upon and considered,
are as follows:
All persons who have, or shall hereafter have, claims on contract or for negligence against the
state not allowed by the state board of examiners, are hereby authorized, on the terms and
conditions herein contained, to bring suit thereon against the state in any of the courts of this state
of competent jurisdiction, and prosecute the same to final judgment. The rules of practice in civil
cases shall apply to such suits, except as herein otherwise provided.
And the court said:
This statute has been considered by this court in at least two cases, arising under different facts,
and in both it was held that said statute did not create any liability or cause of action against the
state where none existed before, but merely gave an additional remedy to enforce such liability as
would have existed if the statute had not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am.
St. Rep., 158; Melvin vs. State, 121 Cal., 16.)
A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims
against the commonwealth, whether at law or in equity," with an exception not necessary to be
here mentioned. In construing this statute the court, in Murdock Grate Co. vs. Commonwealth (152
Mass., 28), said:
The statute we are discussing disclose no intention to create against the state a new and
heretofore unrecognized class of liabilities, but only an intention to provide a judicial tribunal where
well recognized existing liabilities can be adjudicated.
In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the
statute of New York, jurisdiction of claims for damages for injuries in the management of the canals
such as the plaintiff had sustained, Chief Justice Ruger remarks: "It must be conceded that the
state can be made liable for injuries arising from the negligence of its agents or servants, only by
force of some positive statute assuming such liability."
It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any
cause not previously recognized, we will now examine the substantive law touching the
defendant's liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of
article 1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special agent, but not when the damage
should have been caused by the official to whom properly it pertained to do the act performed, in
which case the provisions of the preceding article shall be applicable.
The supreme court of Spain in defining the scope of this paragraph said:
That the obligation to indemnify for damages which a third person causes to another by his fault or
negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on that the person
obligated, by his own fault or negligence, takes part in the act or omission of the third party who
caused the damage. It follows therefrom that the state, by virtue of such provisions of law, is not
responsible for the damages suffered by private individuals in consequence of acts performed by
its employees in the discharge of the functions pertaining to their office, because neither fault nor
even negligence can be presumed on the part of the state in the organization of branches of public
service and in the appointment of its agents; on the contrary, we must presuppose all foresight
humanly possible on its part in order that each branch of service serves the general weal an that of
private persons interested in its operation. Between these latter and the state, therefore, no
relations of a private nature governed by the civil law can arise except in a case where the state
acts as a judicial person capable of acquiring rights and contracting obligations. (Supreme Court of
Spain, January 7, 1898; 83 Jur. Civ., 24.)
That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of fault
or negligence; and whereas in the first article thereof. No. 1902, where the general principle is laid
down that where a person who by an act or omission causes damage to another through fault or
negligence, shall be obliged to repair the damage so done, reference is made to acts or omissions
of the persons who directly or indirectly cause the damage, the following articles refers to this
persons and imposes an identical obligation upon those who maintain fixed relations of authority
and superiority over the authors of the damage, because the law presumes that in consequence of
such relations the evil caused by their own fault or negligence is imputable to them. This legal
presumption gives way to proof, however, because, as held in the last paragraph of article 1903,
responsibility for acts of third persons ceases when the persons mentioned in said article prove
that they employed all the diligence of a good father of a family to avoid the damage, and among
these persons, called upon to answer in a direct and not a subsidiary manner, are found, in
addition to the mother or the father in a proper case, guardians and owners or directors of an
establishment or enterprise, the state, but not always, except when it acts through the agency of a
special agent, doubtless because and only in this case, the fault or negligence, which is the original
basis of this kind of objections, must be presumed to lie with the state.
That although in some cases the state might by virtue of the general principle set forth in article
1902 respond for all the damage that is occasioned to private parties by orders or resolutions
which by fault or negligence are made by branches of the central administration acting in the name
and representation of the state itself and as an external expression of its sovereignty in the
exercise of its executive powers, yet said article is not applicable in the case of damages said to
have been occasioned to the petitioners by an executive official, acting in the exercise of his
powers, in proceedings to enforce the collections of certain property taxes owing by the owner of
the property which they hold in sublease.
That the responsibility of the state is limited by article 1903 to the case wherein it acts through a
special agent (and a special agent, in the sense in which these words are employed, is one who
receives a definite and fixed order or commission, foreign to the exercise of the duties of his office
if he is a special official) so that in representation of the state and being bound to act as an agent
thereof, he executes the trust confided to him. This concept does not apply to any executive agent
who is an employee of the acting administration and who on his own responsibility performs the
functions which are inherent in and naturally pertain to his office and which are regulated by law
and the regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.)
That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in a
decision, among others, of the 18th of May, 1904, in a damage case, the responsibility of the state
is limited to that which it contracts through a special agent, duly empowered by a definite order or
commission to perform some act or charged with some definite purpose which gives rise to the
claim, and not where the claim is based on acts or omissions imputable to a public official charged
with some administrative or technical office who can be held to the proper responsibility in the
manner laid down by the law of civil responsibility. Consequently, the trial court in not so deciding
and in sentencing the said entity to the payment of damages, caused by an official of the second
class referred to, has by erroneous interpretation infringed the provisions of articles 1902 and 1903
of the Civil Code. (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146.)
It is, therefore, evidence that the State (the Government of the Philippine Islands) is only liable,
according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents,
officers and employees when they act as special agents within the meaning of paragraph 5 of
article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such
an agent.
For the foregoing reasons, the judgment appealed from must be reversed, without costs in this
instance. Whether the Government intends to make itself legally liable for the amount of damages
above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its
employees, by legislative enactment and by appropriating sufficient funds therefor, we are not
called upon to determine. This matter rests solely with the Legislature and not with the courts.