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I. VIOLATION OF CIVIL/POLITICAL RIGHT (ARTICLE 32)

LIM V. PONCE DE LEON G.R. No. L-22554 August 29, 1975

DOCTRINE: To be liable under Article 32 of the New Civil Code, it is enough that there was a violation of the constitutional rights of the plaintiffs and it is not required that defendants should have acted with malice or bad faith.

Injured Party: Lim and Taha Torts/Event: Unreasonable searches

FACTS: Plaintiff-appellant Jikil Taha sold to a certain Timbangcaya of Palawan a motor launch named M/L "SAN RAFAEL". A year later Timbangcaya filed a complaint with the Office of the Provincial Fiscal of Palawan alleging that after the sale Jikil Taha forcibly took away the motor launch from him. After conducting a preliminary investigation, Fiscal Ponce de Leon in his capacity as Acting Provincial Fiscal of Palawan, filed with the CFI of Palawan the corresponding information for Robbery with Force and Intimidation upon Persons against Jikil Taha. Fiscal Ponce de Leon, upon being informed that the motor launch was in Balabac, Palawan, wrote the Provincial Commander of Palawan requesting him to direct the detachment commander-in Balabac to impound and take custody of the motor launch. Fiscal Ponce de Leon reiterated his request to the Provincial Commander to impound the motor launch, explaining that its subsequent sale to a third party, plaintiff-appellant Lim, cannot prevent the court from taking custody of the same. So, upon order of the Provincial Commander, defendant-appellee Maddela, seized the motor launch "SAN RAFAEL" from plaintiff-appellant Delfin Lim and impounded it. Plaintiff-appellant Lim pleaded with Maddela to return the motor launch but the latter refused. Likewise, Jikil Taha through his counsel made representations with Fiscal Ponce de Leon to return the seized property to plaintiff-appellant Lim but Fiscal Ponce de Leon refused, on the ground that the same was the subject of a criminal offense. All efforts to recover the motor launch going to naught, plaintiffs-appellants Lim and Jikil Taha filed with the CFI of Palawan a complaint for damages against defendants-appellees Fiscal Francisco Ponce de Leon and Maddela, alleging that on Maddela entered the premises of Lim without a search warrant and then and there took away the hull of the motor launch without his consent; that he effected the seizure upon order of Fiscal Ponce de Leon who knew fully well that his office was not vested with authority to order the seizure of a private property ISSUE: W/N defendants are civilly liable to plaintiffs for damages allegedly suffered by them granting that the seizure of the motor launch was unlawful. HELD: PONCE DE LEON LIABLE UNDER ART. 32. DEFENDANT MADELLA CANNOT BE LIABLE. As to whether or not they are entitled to damages, plaintiffs-appellants anchor their claim for damages on Articles 32 and 2219 of the New Civil Code which provide in part as follows: ART. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages, (9) The rights to be secure in one's person, house, papers, and effects against unreasonable searches and seizures Pursuant to the foregoing provision, a person whose constitutional rights have been violated or impaired is

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entitled to actual and moral damages from the public officer or employee responsible therefor. In addition, exemplary damages may also be awarded. In the instant case, plaintiff-appellant Lim claimed that he purchased the motor launch from Jikil Taha in consideration of P3,000.00, having given P2,000.00 as advanced payment; that since its seizure, the motor launch had been moored at Balabac Bay and because of exposure to the elements it has become worthless at the time of the filing of the present action; that because of the illegality of the seizure of the motor launch, he suffered moral damages and that because of the violation of their constitutional rights they were constrained to engage the services of a lawyer whom they have paid for attorney's fees. Defendant-appellee Fiscal Ponce de Leon wanted to wash his hands of the incident by claiming that "he was in good faith, without malice and without the slightest intention of inflicting injury to plaintiff-appellant, Jikil Taha" when he ordered the seizure of the motor launch. We are not prepared to sustain his defense of good faith. To be liable under Article 32 of the New Civil Code it is enough that there was a violation of the constitutional rights of the plaintiffs and it is not required that defendants should have acted with malice or bad faith. The very nature of Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that there should be malice or bad faith. To make such a requisite would defeat the main purpose of Article 32, which is the effective protection of individual rights. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the performance of their duties. However, defendant-appellee Orlando Maddela cannot be held accountable because he impounded the motor launch upon the order of his superior officer. While a subordinate officer may be held liable for executing unlawful orders of his superior officer, there are certain circumstances, which would warrant Maddela's exculpation from liability. The records show that after Fiscal Ponce de Leon made his first request to the Provincial Commander on June 15, 1962 Maddela was reluctant to impound the motor launch despite repeated orders from his superior officer.

MHP GARMENTS, INC. VS. CA GR No. 86720

2 September 1994

DOCTRINE: Under the Civil Code, damages may be recovered for violation of constitutional rights and liberties from any public officer or private individual. Art 32 speaks of an officer or employee or person "directly or indirectly" responsible for the violation of constitutional rights and liberties. It is not the actor alone (i.e., one directly responsible) who must answer for damages; the person indirectly responsible also has to answer for the damages or injury caused to the aggrieved party. Art 32 makes the persons who are directly, as well as indirectly, responsible for the transgression joint tortfeasors.

Petitioners: MHP Garments, Inc. and its employee, Larry De Guzman Respondents/Injured Parties: Agnes Villa Cruz, Mirasol Lugatiman, and Gertrudes Gonzales Tort/Event: Warrantless search and seizure of boy and girl scouts pants, dresses, and suits

FACTS: MHP Garments Inc. (“MHP”) was granted the exclusive franchise to sell and distribute official Boy Scouts uniforms, supplies, badges, and insignias. In its Memorandum Agreement with the Boy Scouts of the Philippines, MHP was given the authority to undertake or cause to be undertaken the prosecution in court of all illegal sources of scout uniforms and scouting supplies.

Upon receipt of information that Agnes Villa Cruz, Mirasol Lugatiman, and Gertrudes Gonzales (the “respondents”) were selling Boy Scouts items and paraphernalia without any authority, Larry De Guzman, an employee of MHP, was tasked to undertake surveillance and to make a report to the Philippine Constabulary (the “PC”). Thereafter, De Guzman together with 3 PC men went to the stores of respondents at the Marikina Public Market and without any warrant, seized the boy and girl scouts pants, dresses, and

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suits on display at the stalls. The seizure caused a commotion and embarrassed respondents. The items were then turned over by the PC Captain to MHP for safekeeping. A criminal complaint for unfair competition was then filed against respondents. After a preliminary investigation, the Provincial Fiscal dismissed the complaint and ordered the return of the seized items. Respondents then filed a civil case against MHP and De Guzman (the “petitioners”) for sums of money and damages.

ISSUE: W/N the petitioners should be held liable for damages, even if they did not actually effect the seizure of the merchandise YES

HELD1: The constitutional protection of our people against unreasonable search and seizure vouchsafes our right to privacy and dignity against undesirable intrusions committed by any public officer or private individual. An infringement of this right justifies an award for damages. The all encompassing protection extends against intrusions directly done both by government and indirectly by private entities. Art. III, Sec. 2 of the Constitution protects our people from unreasonable search and seizure. A warrantless search may only be done under the circumstances provided in the Rules of Court. The evidence in this case did not justify the warrantless search and seizure. The progression of time between the receipt of information and the raid shows there was sufficient time for the application for a judicial warrant. In not procuring a judicial warrant, the petitioners and the PC took the risk of a suit for damages in case the seizure would be proved to violate the respondents’ right against unreasonable search and seizure. ON PETITIONERS’ ARGUMENT THAT IT WAS THE PC THAT CONDUCTED THE RAID AND THEIR PARTICIPATION WAS ONLY TO REPORT THE ILLEGAL ACTIVITY:

The members of the PC team should have been included in the complaint; still, the omission will not exculpate petitioners. Under the Civil Code, damages may be recovered for violation of constitutional rights and liberties from any public officer or private individual.2 Art 323 speaks of an officer or employee or person "directly or indirectly" responsible for the violation of the constitutional rights and liberties of another. Thus, it is not the actor alone (i.e., the one directly responsible) who must answer for damages; the person indirectly responsible also has to answer for the damages or injury caused to the aggrieved party. Art 32 makes the persons who are directly, as well as indirectly, responsible for the transgression joint tortfeasors. It encompasses within its ambit those directly, as well as indirectly, responsible for its violations.

In this case, petitioners were indirectly involved in transgressing the right of respondents against

unreasonable search and seizure. Firstly, they instigated the raid pursuant to the Memorandum Agreement to undertake the prosecution in court of all illegal sources of scouting supplies. The acts committed by the PC of unlawfully seizing the merchandise and of filing the criminal complaint for unfair competition were for the protection and benefit of the petitioners. It is, thus, reasonably fair to infer that it was upon MHP's instance that the PC conducted the raid and effected the illegal seizure. Also, the raid was conducted with

1 OTHER ISSUES: On award of moral damages, the SC held that moral damages are awarded to compensate for injuries suffered and that respondents’ avowals of

embarrassment and humiliation during the seizure were supported by their testimonies. There can be no doubt that they suffered sleepless nights, serious anxiety, and wounded feelings due to the tortious raid. On the award of exemplary damages, the SC held that the wantonness of the wrongful seizure justifies the award and that it will serve as a stern reminder to all that the constitutional protection against unreasonable search and seizure is a virile reality.

2 Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages.

xxx xxx xxx (9) The rights to be secure in one's person, house, papers, and effects against unreasonable searches and seizures.

xxx xxx xxx Art. 2219. Moral damages may be recovered in the following and analogous cases:

xxx xxx xxx (6) Illegal search; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

3 Quoting Lim vs Ponce de Leon, the SC explained the nature of Art 32: The very nature of Art 32 is that the wrong may be civil or criminal. It is not necessary therefore that there should be malice or bad faith. To make such a requisite would defeat the main purpose of the article, which is the effective protection of individual rights. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the performance of their duties. Precisely, the object of the article is to put an end to official abuse by plea of the good faith. In the US this remedy is in the nature of a tort.

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the active participation of their employee. By standing by and apparently assenting thereto, De Guzman was liable to the same extent as the officers themselves. In fact, MHP even received for safekeeping the goods unreasonably seized and refused to surrender them for quite a time despite the dismissal of its complaint for unfair competition. Secondly, Letter of Instruction No. 12994 (“LOI”) was precisely crafted to safeguard not only the privilege of franchise holder of scouting items but also the citizen's constitutional rights. Under the LOI, petitioners miserably failed to report the unlawful peddling of scouting goods to the Boy Scouts of the Philippines for the proper application of a warrant. Respondents' rights are immutable and petitioners did not have the unbridled license to cause the seizure of respondents' goods without any warrant. And thirdly, if petitioners did not have a hand in the raid, they should have filed a third-party complaint against the raiding team for contribution or any other relief, in respect of respondents' claim; but they did not.

ABS CBN. vs CA G.R. No. 128690

21 January 1999

DOCTRINE: SEE BOLD IN HELD.

Petitioner: ABS CBN Respondents/Injured Parties: RBS Tort/Event: Filing of Complaint by ABS CBN

FACTS: In 1990, ABS-CBN and Viva executed a Film Exhibition Agreement whereby Viva gave ABS-CBN an exclusive right to exhibit some Viva films. Sometime in December 1991, in accordance with paragraph 2.4 of said agreement stating that —.

1.4 ABS-CBN shall have the right of first refusal to the next twenty-four (24) Viva films for TV telecast under such terms as may be agreed upon by the parties hereto, provided, however, that such right shall be exercised by ABS-CBN from the actual offer in writing.

Viva, through defendant Del Rosario, offered ABS-CBN, through its vice-president Charo Santos-Concio, a list of three(3) film packages (36 title) from which ABS-CBN may exercise its right of first refusal under the afore-said agreement. ABS-CBN, however through Mrs. Concio, "can tick off only ten (10) titles" (from the list) "we can purchase" and therefore did not accept said list. The titles ticked off by Mrs. Concio are not the subject of the case at bar except the film ''Maging Sino Ka Man." Def Del Rosario approached ABS-CBN's Ms. Concio, with a list consisting of 52 original movie titles (i.e. not yet aired on television) including the 14 titles subject of the present case, as well as 104 re-runs from which ABS-CBN may choose another 52 titles, as a total of 156 titles, proposing to sell to ABS-CBN airing rights over this package of 52 originals and 52 re-runs for P60,000,000.00 of which P30,000,000.00 will be in cash and P30,000,000.00 worth of television spots. Def Del Rosario and ABS-CBN general manager, Eugenio Lopez III, met to discuss the package proposal of Viva. What transpired in that lunch meeting is the subject of conflicting versions. Mr. Lopez testified that he and Mr. Del Rosario allegedly agreed that ABS-CRN was granted exclusive film rights to fourteen (14) films for a total consideration of P36 million; that he allegedly put this agreement as to the price and number of films in a "napkin'' and signed it and gave it to Mr. Del Rosario. On the other hand, Del Rosario denied

4 APPREHENSION OF UNAUTHORIZED MANUFACTURERS AND DISTRIBUTORS OF SCOUT PARAPHERNALIA AND IMPOUNDING OF SAID PARAPHERNALIA. Directs all law enforcement agencies of the Republic of the Philippines, to apprehend immediately unauthorized manufacturers and distributors of Scout

paraphernalia, upon proper application by the Boy Scouts of the Philippines and/or Girl Scouts of the Philippines for warrant of arrest and/or search warrant with a judge, or such other responsible officer as may be authorized by law; and to impound the said paraphernalia to be used as evidence in court or other appropriate administrative body.

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having made any agreement with Lopez regarding the 14 Viva films; denied the existence of a napkin in which Lopez wrote something; and insisted that what he and Lopez discussed at the lunch meeting was Viva's film package offer of 104 films for a total price of P60 million. Mr. Lopez promising to make a counter proposal which came in the form of a proposal contract. Del Rosario and Mr. Graciano Gozon of RBS Senior vice-president for Finance discussed the terms and conditions of Viva's offer to sell the 104 films, after the rejection of the same package by ABS-CBN. Subsequently, defendant Del Rosario received through his secretary, a handwritten note from Ms. Concio, which reads: "Here's the draft of the contract. I hope you find everything in order," to which was attached a draft exhibition agreement a counter-proposal covering 53 films, 52 of which came from the list sent by defendant Del Rosario and one film was added by Ms. Concio, for a consideration of P35 million. Exhibit "C" provides that ABS-CBN is granted films right to 53 films and contains a right of first refusal to "1992 Viva Films." The said counter proposal was however rejected by Viva's Board of Directors, as Viva would not sell anything less than the package of 104 films for P60 million pesos, and such rejection was relayed to Ms. Concio. After the rejection of ABS-CBN and following several negotiations and meetings defendant Del Rosario and Viva's President Teresita Cruz, in consideration of P60 million, signed a letter of agreement granting RBS the exclusive right to air 104 Viva-produced and/or acquired films including the fourteen (14) films subject of the present case. Thereafter, ABS-CBN filed before the RTC a complaint for specific performance with a prayer for a writ of preliminary injunction and/or temporary restraining order against private respondents Republic Broadcasting Corporation (hereafter RBS ), Viva Production (hereafter VIVA), and Vicente Del Rosario. The complaint was docketed as Civil Case No. Q-92-12309. RTC issued a TRO enjoining private respondents from proceeding with the airing, broadcasting, and televising of the fourteen VIVA films subject of the controversy, starting with the film Maging Sino Ka Man, which was scheduled to be shown on private respondents RBS' channel 7 at seven o'clock in the evening of said date. After appropriate proceedings, the RTC issued an order directing the issuance of a writ of preliminary injunction. Private respondents moved for reconsideration of the order and offered to put up a counter bond. The RTC issued an order dissolving the writ of preliminary injunction upon the posting by RBS of a P30 million counterbond to answer for whatever damages ABS-CBN might suffer by virtue of such dissolution. However, it reduced petitioner's injunction bond to P15 million as a condition precedent for the reinstatement of the writ of preliminary injunction should private respondents be unable to post a counterbond. At the pre-trial, the parties, upon suggestion of the court, agreed to explore the possibility of an amicable settlement. In the meantime, RBS prayed for and was granted reasonable time within which to put up a P30 million counterbond in the event that no settlement would be reached. As the parties failed to enter into an amicable settlement RBS posted on 1 October 1992 a counterbond, which the RTC approved in its Order of 15 October 1992.

RTC conducted a pre-trial. ABS-CBN filed with the Court of Appeals a petition [CA-G.R. SP No. 29300] challenging the RTC's Orders and praying for the issuance of a writ of preliminary injunction to enjoin the RTC from enforcing said orders. On 3 November 1992, the Court of Appeals issued a temporary restraining order to enjoin the airing, broadcasting, and televising of any or all of the films involved in the controversy. Court of Appeals promulgated a decision dismissing the petition in CA -G.R. No. 29300 for being premature. ABS-CBN challenged the dismissal in a petition for review filed with this Court In the meantime the RTC received the evidence for the parties and rendered a decision in favor of RBS and VIVA and against ABS-CBN

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Aggrieved by the RTC's decision, ABS-CBN appealed to the Court of Appeals claiming that there was a perfected contract between ABS-CBN and VIVA granting ABS-CBN the exclusive right to exhibit the subject films. Private respondents VIVA and Del Rosario also appealed seeking moral and exemplary damages and additional attorney's fees. The Court of Appeals agreed with the RTC that the contract between ABS-CBN and VIVA had not been perfected, absent the approval by the VIVA Board of Directors of whatever Del Rosario, it's agent, might have agreed with Lopez III. The appellate court did not even believe ABS-CBN's evidence that Lopez III actually wrote down such an agreement on a "napkin," as the same was never produced in court. Accordingly, respondent court sustained the award of actual damages consisting in the cost of print advertisements and the premium payments for the counterbond, there being adequate proof of the pecuniary loss which RBS had suffered as a result of the filing of the complaint by ABS-CBN. As to the award of moral damages, the Court of Appeals found reasonable basis therefor, holding that RBS's reputation was debased by the filing of the complaint in Civil Case No. Q-92-12309 and by the non-showing of the film "Maging Sino Ka Man." Respondent court also held that exemplary damages were correctly imposed by way of example or correction for the public good in view of the filing of the complaint despite petitioner's knowledge that the contract with VIVA had not been perfected, It also upheld the award of attorney's fees, reasoning that with ABS-CBN's act of instituting Civil Case No, Q-92-1209, RBS was "unnecessarily forced to litigate." The appellate court, however, reduced the awards of moral damages to P2 million, exemplary damages to P2 million, and attorney's fees to P500, 000.00. On the other hand, respondent Court of Appeals denied VIVA and Del Rosario's appeal because it was "RBS and not VIVA which was actually prejudiced when the complaint was filed by ABS-CBN." ISSUE: (1) Whether there was a perfected contract between VIVA and ABS-CBN, and (2) Whether RBS is entitled to damages and attorney's fees. (It may be noted that the award of attorney's fees of P212,000 in favor of VIVA is not assigned as another error.)

HELD: (1)The first issue should be resolved against ABS-CBN. When Mr. Del Rosario of VIVA met with Mr. Lopez of ABS-CBN to discuss the package of films, said package of 104 VIVA films was VIVA's offer to ABS-CBN to enter into a new Film Exhibition Agreement. But ABS-CBN, sent, through Ms. Concio, a counter-proposal in the form of a draft contract proposing exhibition of 53 films for a consideration of P35 million. This counter-proposal could be nothing less than the counter-offer of Mr. Lopez during his conference with Del Rosario at Tamarind Grill Restaurant. Clearly, there was no acceptance of VIVA's offer, for it was met by a counter-offer which substantially varied the terms of the offer. In the case at bar, ABS-CBN made no unqualified acceptance of VIVA's offer. Hence, they underwent a period of bargaining. ABS-CBN then formalized its counter-proposals or counter-offer in a draft contract, VIVA through its Board of Directors, rejected such counter-offer, Even if it be conceded arguendo that Del Rosario had accepted the counter-offer, the acceptance did not bind VIVA, as there was no proof whatsoever that Del Rosario had the specific authority to do so. (2) we find for ABS-CBN on the issue of damages. We shall first take up actual damages. Chapter 2, Title XVIII, Book IV of the Civil Code is the specific law on actual or compensatory damages. Except as provided by law or by stipulation, one is entitled to compensation for actual damages only for such pecuniary loss suffered by him as he has duly proved. The indemnification shall comprehend not only the value of the loss suffered, but also that of the profits that the obligee failed to obtain. In contracts and quasi-contracts the damages which may be awarded are dependent on whether the obligor acted with good faith or otherwise. In case of good faith, the damages recoverable are those which are the natural and probable consequences of the breach of the obligation and which the parties have foreseen or could have reasonably foreseen at the time of the constitution of the obligation. If the obligor acted with fraud, bad faith, malice, or wanton attitude, he shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. In crimes and quasi-delicts, the defendant shall be liable for all damages

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which are the natural and probable consequences of the act or omission complained of, whether or not such damages has been foreseen or could have reasonably been foreseen by the defendant. Actual damages may likewise be recovered for loss or impairment of earning capacity in cases of temporary or permanent personal injury, or for injury to the plaintiff's business standing or commercial credit. The claim of RBS for actual damages did not arise from contract, quasi-contract, delict, or quasi-delict. It arose from the fact of filing of the complaint despite ABS-CBN's alleged knowledge of lack of cause of action. Needless to state the award of actual damages cannot be comprehended under the above law on actual damages. RBS could only probably take refuge under Articles 19, 20, and 21 of the Civil Code. It may further be observed that in cases where a writ of preliminary injunction is issued, the damages which the defendant may suffer by reason of the writ are recoverable from the injunctive bond. In this case, ABS-CBN had not yet filed the required bond; as a matter of fact, it asked for reduction of the bond and even went to the Court of Appeals to challenge the order on the matter. Clearly then, it was not necessary for RBS to file a counterbond. Hence, ABS-CBN cannot be held responsible for the premium RBS paid for the counterbond. Neither could ABS-CBN be liable for the print advertisements for "Maging Sino Ka Man" for lack of sufficient legal basis. The RTC issued a temporary restraining order and later, a writ of preliminary injunction on the basis of its determination that there existed sufficient ground for the issuance thereof. Notably, the RTC did not dissolve the injunction on the ground of lack of legal and factual basis, but because of the plea of RBS that it be allowed to put up a counterbond. As regards attorney's fees, the law is clear that in the absence of stipulation, attorney's fees may be recovered as actual or compensatory damages under any of the circumstances provided for in Article 2208 of the Civil Code. The general rule is that attorney's fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. They are not to be awarded every time a party wins a suit. The power of the court to award attorney's fees under Article 2208 demands factual, legal, and equitable justification. Even when claimant is compelled to litigate with third persons or to incur expenses to protect his rights, still attorney's fees may not be awarded where no sufficient showing of bad faith could be reflected in a party's persistence in a case other than erroneous conviction of the righteousness of his cause. As to moral damages the law is Section 1, Chapter 3, Title XVIII, Book IV of the Civil Code. Article 2217 thereof defines what are included in moral damages, while Article 2219 enumerates the cases where they may be recovered, Article 2220 provides that moral damages may be recovered in breaches of contract where the defendant acted fraudulently or in bad faith. RBS's claim for moral damages could possibly fall only under item (10) of Article 2219, thereof which reads: (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered. and not to impose a penalty on the wrongdoer. The award is not meant to enrich the complainant at the expense of the defendant, but to enable the injured party to obtain means, diversion, or amusements that will serve to obviate then moral suffering he has undergone. It is aimed at the restoration, within the limits of the possible, of the spiritual status quo ante, and should be proportionate to the suffering inflicted. Trial courts must then guard against the award of exorbitant damages; they should exercise balanced restrained and measured objectivity to avoid suspicion that it was due to passion, prejudice, or corruption on the part of the trial court. The award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no senses, It cannot, therefore, experience physical suffering and mental anguish, which call be experienced only by one having a nervous system. The basic law on exemplary damages is Section 5, Chapter 3, Title XVIII, Book IV of the Civil Code. These are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. They are recoverable in criminal cases as part of the civil liability when the crime was committed with one or more aggravating circumstances; in quasi-contracts, if the defendant acted with gross negligence; and in contracts and quasi-contracts, if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

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It may be reiterated that the claim of RBS against ABS-CBN is not based on contract, quasi-contract, delict, or quasi-delict, Hence, the claims for moral and exemplary damages can only be based on Articles 19, 20, and 21 of the Civil Code. The elements of abuse of right under Article 19 are the following: (1) the existence of a legal right or duty, (2) which is exercised in bad faith, and (3) for the sole intent of prejudicing or injuring another. Article 20 speaks of the general sanction for all other provisions of law which do not especially provide for their own sanction; while Article 21 deals with acts contra bonus mores, and has the following elements; (1) there is an act which is legal, (2) but which is contrary to morals, good custom, public order, or public policy, and (3) and it is done with intent to injure. Verily then, malice or bad faith is at the core of Articles 19, 20, and 21. Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity. Such must be substantiated by evidenceThere is no adequate proof that ABS-CBN was inspired by malice or bad faith. It was honestly convinced of the merits of its cause after it had undergone serious negotiations culminating in its formal submission of a draft contract. Settled is the rule that the adverse result of an action does not per se make the action wrongful and subject the actor to damages, for the law could not have meant to impose a penalty on the right to litigate. If damages result from a person's exercise of a right, it is damnum absque injuria.

BRICKTOWN DEVELOPMENT CORP. (its new corporate name MULTINATIONAL REALTY DEVELOPMENT CORPORATION) and MARIANO Z. VERALDE v. CA and AMOR TIERRA DEVELOPMENT

CORP. G.R. No. 112182

12 December 1994

DOCTRINE: A contract, once perfected, has the force of law between the parties with which they are bound to comply in good faith and from which neither one may renege without the consent of the other. The autonomy of contracts allows the parties to establish such stipulations, clauses, terms and conditions as they may deem appropriate provided only that they are not contrary to law, morals, good customs, public order or public policy. The standard norm in the performance of their respective covenants in the contract, as well as in the exercise of their rights thereunder, is expressed in the cardinal principle that the parties in that juridical relation must act with justice, honesty and good faith.

Petitioner/Defendant: Bricktown Development Corp. Respondents/Injured Party: Amor Tierra Development Corp. Torts/Event: forfeiture of paid installments

FACTS: On 31 March 1981, Bricktown Development Corporation, represented by its President and co-petitioner Mariano Z. Velarde, executed two Contracts to Sell in favor of Amor Tierra Development Corporation covering a total of 96 residential lots, situated at the Multinational Village Subdivision, La Huerta, Parañaque. The total price of P21,639,875.00 was stipulated to be paid by private respondent in such amounts and maturity dates, as follows: P2.2M on 31 March 1981; P3,209,968.75 on 30 June 1981; P4,729,906.25 on 31 December 1981; and the balance of P11.5M to be paid by means of an assumption by private respondent of petitioner corporation’s mortgage liability to the Philippine Savings Bank or, alternatively, to be made payable in cash. On even date, 31 March 1981, the parties executed a Supplemental Agreement providing that private respondent would additionally pay to petitioner corporation the amounts of P55,364.68, or 21% interest on the balance of down payment for the period from 31 March to 30 June 1981, and of P390,369.37 representing interest paid by petitioner corporation to the Philippine Savings Bank in updating the bank loan for the period from 01 February to 31 March 1981.

Private respondent was only able to pay petitioner corporation the sum of P1,334,443.21. In the meanwhile, however, the parties continued to negotiate for a possible modification of their agreement, although nothing conclusive would appear to have ultimately been arrived at. Finally, on 12 October 1981, petitioner corporation, through its legal counsel, sent private respondent a “Notice of Cancellation of Contract” on account of the latter’s continued failure to pay the installment due 30 June 1981 and the

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interest on the unpaid balance of the stipulated initial payment. Petitioner corporation advised private respondent, however, that it (private respondent) still had the right to pay its arrearages within 30 days from receipt of the notice “otherwise the actual cancellation of the contract (would) take place.” Several months later, private respondent, through counsel, demanded the refund of private respondent’s various payments to petitioner corporation, allegedly “amounting to P2,455,497.71,” with interest within fifteen days from receipt of said letter, or, in lieu of a cash payment, to assign to private respondent an equivalent number of unencumbered lots at the same price fixed in the contracts. The demand, not having been heeded, private respondent commenced, on 18 November 1983, its action with the court a quo.

Following the reception of evidence, the trial court rendered its decision declaring the Contracts to Sell and the Supplemental Agreement rescinded and ordered the petitioner corporation to return to the [private respondent] the amount of P1,334,443.21 with interest at the rate of 12% percent per annum until the amount is fully paid. On appeal, the appellate court affirmed in toto the trial court’s findings and judgment. ISSUE: 1.W/N the contracts to sell were validly rescinded or cancelled by petitioner corporation and, in the affirmative? YES 2.W/N the amounts already remitted by private respondent under said contracts were rightly forfeited by petitioner corporation? (Torts Issue) NO HELD: 1.YES. Admittedly, the terms of payment agreed upon by the parties were not met by private respondent. A notice of cancellation was ultimately made months after the lapse of the contracted grace period. Paragraph 15 of the Contracts to Sell.5

A grace period is a right, not an obligation, of the debtor. When unconditionally conferred, such as in this case, the grace period is effective without further need of demand either calling for the payment of the obligation or for honoring the right. The grace period must not be likened to an obligation, the non-payment of which, under Article 1169 of the Civil Code, would generally still require judicial or extrajudicial demand before “default” can be said to arise. Verily, in the case at bench, the sixty-day grace period under the terms of the contracts to sell became ipso-facto operative from the moment the due payments were not met at their stated maturities. On this score, the provisions of Article 1169 of the Civil Code would find no relevance whatsoever. The cancellation of the contracts to sell by petitioner corporation accords with the contractual covenants of the parties, and such cancellation must be respected. It may be noteworthy to add that in a contract to sell, the non-payment of the purchase price (which is normally the condition for the final sale) can prevent the obligation to convey title from acquiring any obligatory force.

2. NO. Petitioners do not deny the fact that there has indeed been a constant dialogue between the parties during the period of their juridical relation. Concededly, the negotiations that they have from them the fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that delay may exist: 1. (1)When the obligation or the law expressly so declares; or 2. (2)When from the nature and the circumstances of the obligation it appears that the designation of

the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or

5 “15. Should the PURCHASER fail to pay when due any of the installments mentioned in stipulation No. 1 above, the OWNER shall grant the purchaser a sixty (60)-day grace period within which to pay the amount/s due, and should the PURCHASER still fail to pay the due amount/s within the 60-day grace period, the PURCHASER shall have the right to ex-parte cancel or rescind this contract, provided, however, that the actual cancellation or rescission shall take effect only after the lapse of thirty (30) days from the date of receipt by the PURCHASER of the notice of cancellation of this contract or the demand for its rescission by a notarial act, and thereafter, the OWNER shall have the right to resell the lot/s subject hereof to another buyer and all payments made, together with all improvements introduced on the aforementioned lot/s shall be forfeited in favor of the OWNER as liquidated damages, and in this connection, the PURCHASER obligates itself to peacefully vacate the aforesaid lot/s without necessity of notice or demand by the OWNER.”

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3. (3)When demand would be useless, as when the obligor has rendered it beyond his power to perform.

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins. Pursued strictly did not result in the novation, either extinctive or modificatory, of the contracts to sell; nevertheless, this Court is unable to completely disregard the following findings of both the trial court and the appellate court. Said the trial court:

“It has been duly established through the testimony of plaintiff’s witnesses Marcosa Sanchez and Vicente Casas that there were negotiations to enter into another agreement between the parties, after March 31, 1981. The first negotiation took place before June 30, 1981, when Moises Petilla and Renato Dragon, Vice-President and president, respectively, of the plaintiff corporation, together with Marcosa Sanchez, went to the office of the defendant corporation and made some proposals to the latter, thru its president, the defendant Mariano Velarde. They told the defendant Velarde of the plaintiff’s request for the division of the lots to be purchased into smaller lots and the building of town houses or smaller houses therein as these kinds of houses can be sold easily than big ones. Velarde replied that subdivision owners would not consent to the building of small houses. He, however, made two counter-proposals, to wit: that the defendant corporation would assign to the plaintiff a number of lots corresponding to the amounts the latter had already paid, or that the defendant corporation may sell the corporation itself, together with the Multinational Village Subdivision, and its other properties, to the plaintiff and the latter’s sister companies engaged in the real estate business. The negotiations between the parties went on for sometime but nothing definite was accomplished.”

For its part, the Court of Appeals observed: “We agree with the court a quo that there is, therefore, reasonable ground to believe that because of the negotiations between the parties, coupled with the fact that the plaintiff never took actual possession of the properties and the defendants did not also dispose of the same during the pendency of said negotiations, the plaintiff was led to believe that the parties may ultimately enter into another agreement in place of the ‘contracts to sell.’ There was, evidently, no malice or bad faith on the part of the plaintiff in suspending payments. On the contrary, the defendants not only contributed, but had consented to the delay or suspension of payments. They did not give the plaintiff a categorical answer that their counter-proposals will not materialize.” In fine, while we must conclude that petitioner corporation still acted within its legal right to declare the contracts to sell rescinded or cancelled, considering, nevertheless, the peculiar circumstances found to be extant by the trial court, confirmed by the Court of Appeals, it would be unconscionable, in our view, to likewise sanction the forfeiture by petitioner corporation of payments made to it by private respondent. Indeed, in the opening statement of this ponencia, we have intimated that the relationship between parties in any contract must always be characterized and punctuated by good faith and fair dealing. Judging from what the courts below have said, petitioners did fall well behind that standard. We do not find it equitable, however, to adjudge any interest payment by petitioners on the amount to be thus refunded, computed from judicial demand, for, indeed, private respondent should not be allowed to totally free itself from its own breach. DISPOSITIVE: the appealed decision is AFFIRMED insofar as it declares valid the cancellation of the contracts in question but MODIFIED by ordering the refund by petitioner corporation of P1,334,443.21 with 12% interest per annum to commence only, however, from the date of finality of this decision until such refund is effected. No costs.

NEWSWEEK v. IAC 142 SCRA 141/ G.R. No. L-63559

30 May 1986

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DOCTRINE: in order to maintain a libel suit, it is essential that the victim be identifiable although it is not necessary that he be named. defamatory matter which does not reveal the Identity of the person upon whom the imputation is cast, affords no ground of action unless it be shown that the readers of the libel could have Identified the personality of the individual defamed Where the defamation is alleged to have been directed at a group or class, it is essential that the statement must be so sweeping or all-embracing as to apply to every individual in that group or class, or sufficiently specific so that each individual in the class or group can prove that the defamatory statement specifically pointed to him, so that he can bring the action separately, if need be.

Injured Party/ Private Respondent: National Federation of Sugarcane Planters Tortfeasor: Newsweek Tort/Event: libelous article in Newsweek (freedom of the press)

FACTS: National Federation of Sugarcane Planters (Private Respondent)6, filed a class suit (in their own behalf and/or as a class suit in behalf of all sugarcane planters in the province of Negros Occidental) for libel, against NewsweeK and Fred Bruning and Barry Came ( 2 of Newsweek’s non-resident correspondents/reporters). The complaint alleged that defendants committed libel against them 1. By the publication of the article "An Island of Fear" in the February 23, 1981 issue of petitioner's weekly news magazine Newsweek. The article supposedly portrayed the island province of Negros Occidental as a place dominated by big landowners or sugarcane planters who not only exploited the impoverished and underpaid sugarcane workers/laborers, but also brutalized and killed them with imprunity. 2. They alleged that said article, taken as a whole, showed a deliberate and malicious use of falsehood, slanted presentation and/or misrepresentation of facts intended to put them (sugarcane planters) in bad light, expose them to public ridicule, discredit and humiliation here in the Philippines and abroad, and make them objects of hatred, contempt and hostility of their agricultural workers and of the public in general.. Newsweek filed a motion to dismiss.7The trial court denied the motion to dismiss, stating that the grounds on which the motion to dismiss On June 18, 1982. Newsweek filed a petition for certiorari with CA which t affirmed the trial court's Orders. Newsweek (Petitioner) argues that private respondents' complaint failed to state a cause of action because the complaint made no allegation that anything contained in the article complained of regarding sugarcane planters referred specifically to any one of the private respondents; that libel can be committed only against individual reputation; and that in cases where libel is claimed to have been directed at a group, there is actionable defamation only if the libel can be said to reach beyond the mere collectivity to do damage to a specific, individual group member's reputation. ISSUE: Whether or not the private respondents' complaint failed to state a cause of action (w/n the article is libelous? 6 ) incorporated associations of sugarcane planters in Negros Occidental claiming to have 8,500 members and several individual sugar planters

7 on the grounds that (1) the printed article sued upon is not actionable in fact and in law; and (2) the complaint is bereft of allegations that state, much less support a cause of action. It pointed out the non-libelous nature of the article and, consequently, the failure of the complaint to state a cause of action. Private respondents filed an Opposition to the motion to dismiss and petitioner filed a reply.

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HELD8: Suit will not prosper. In the case of Corpus vs. Cuaderno, Sr, the ruled that "in order to maintain a libel suit, it is essential that the victim be identifiable although it is not necessary that he be named. In an earlier case, this Court declared that" ... defamatory matter which does not reveal the Identity of the person upon whom the imputation is cast, affords no ground of action unless it be shown that the readers of the libel could have Identified the personality of the individual defamed." This principle has been recognized to be of vital importance, especially where a group or class of persons, as in the case at bar, claim to have been defamed, for it is evident that the larger the collectivity, the more difficult it is for the individual member to prove that the defamatory remarks apply to him. (Cf. 70 ALR 2d. 1384). In the case of Uy Tioco vs. Yang Shu Wen , 32 Phil. 624, this Court held as follows:

Defamatory remarks directed at a class or group of persons in general language only, are not actionable by individuals composing the class or group unless the statements are sweeping; and it is very probable that even then no action would lie where the body is composed of so large a number of persons that common sense would tell those to whom the publication was made that there was room for persons connected with the body to pursue an upright and law abiding course and that it would be unreasonable and absurd to condemn all because of the actions of a part. (supra p. 628).

Where the defamation is alleged to have been directed at a group or class, it is essential that the statement must be so sweeping or all-embracing as to apply to every individual in that group or class, or sufficiently specific so that each individual in the class or group can prove that the defamatory statement specifically pointed to him, so that he can bring the action separately, if need be.

Application: in this case NFSP filed a class suit for libel against Newsweek, because of an article published tackling the plight of sugarcane Farmers in Negros, the Article Spoke of abuses made by Sugarcane planters in general, and made no mention of any particular person.

The disputed portion of the article which refers to plaintiff Sola and which was claimed to be libelous never singled out plaintiff Sola as a sugar planter. The news report merely stated that the victim had been arrested by members of a special police unit brought into the area by Pablo Sola, the mayor of Kabankalan. Hence, the report, referring as it does to an official act performed by an elective public official, is within the realm of privilege and protected by the constitutional guarantees of free speech and press. WHEREFORE, the decision of the Intermediate Appellate Court is reversed and the complaint in Civil Case No. 15812 of the Court of First Instance of Negros Occidental is dismissed, without pronouncement as to costs.

MVRS PUBLICATION vs. ISLAMIC DA’WAH GR NO. 135306

28 January 2003

DOCTRINE: Any party seeking recovery for mental anguish must prove more than mere worry, anxiety, vexation, embarrassment, or anger. Liability does not arise from mere insults, indignities, threats, annoyances, petty expressions, or other trivialities. In determining whether the tort of outrage had been committed, a plaintiff is necessarily expected and required to be hardened to a certain amount of criticism, rough language, and to occasional acts and words that are definitely inconsiderate and unkind; the mere fact that the actor knows that the other will regard the conduct as insulting, or will have his feelings hurt, is 8 The case at bar is not a class suit. It is not a case where one or more may sue for the benefit of all or where the representation of class interest affected by the

judgment or decree is indispensable to make each member of the class an actual party We have here a case where each of the plaintiffs has a separate and distinct

reputation in the community. They do not have a common or general interest in the subject matter of the controversy.

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not enough. To recover for the intentional infliction of emotional distress the plaintiff must show that: (a) The conduct of the defendant was intentional or in reckless disregard of the plaintiff; (b) The conduct was extreme and outrageous; (c) There was a causal connection between the defendant's conduct and the plaintiff's mental distress; and, (d) The plaintiff's mental distress was extreme and severe.

Petitioner: MVRS Publication Respondent: Islamic Da’wah Injured Party: Islamic Da’wah Injury: defamation, libel

FACTS: ISLAMIC DA'WAH COUNCIL OF THE PHILIPPINES, INC., a local federation of more than seventy (70) Muslim religious organizations, and individual Muslims ABDULRAHMAN R.T. LINZAG, IBRAHIM F.P. ARCILLA, ABDUL RASHID DE GUZMAN, AL-FARED DA SILVA and IBRAHIM B.A. JUNIO, filed in the RTC Manila a complaint for damages in their own behalf and as a class suit in behalf of the Muslim members nationwide against MVRS PUBLICATIONS, INC., MARS C. LACONSAY, MYLA C. AGUJA and AGUSTINO G. BINEGAS, JR., arising from an article published in the 1 August 1992 issue of Bulgar, a daily tabloid. The article reads: "ALAM BA NINYO? Na ang mga baboy at kahit anong uri ng hayop sa Mindanao ay hindi kinakain ng mga Muslim? Para sa kanila ang mga ito ay isang sagradong bagay. Hindi nila ito kailangang kainin kahit na sila pa ay magutom at mawalan ng ulam sa tuwing sila ay kakain. Ginagawa nila itong Diyos at sinasamba pa nila ito sa tuwing araw ng kanilang pangingilin lalung-lalo na sa araw na tinatawag nilang 'Ramadan'." The complaint alleged that the libelous statement was insulting and damaging to the Muslims; that these words alluding to the pig as the God of the Muslims was not only published out of sheer ignorance but with intent to hurt the feelings, cast insult and disparage the Muslims and Islam, as a religion in this country, in violation of law, public policy, good morals and human relations; that on account of these libelous words Bulgar insulted not only the Muslims in the Philippines but the entire Muslim world, especially every Muslim individual in non-Muslim countries. MVRS PUBLICATIONS, INC., and AGUSTINO G. BINEGAS, JR., in their defense, contended that the article did not mention respondents as the object of the article and therefore were not entitled to damages; and, that the article was merely an expression of belief or opinion and was published without malice and intention to cause damage, prejudice or injury to Muslims. The trial court dismissed the complaint holding that the plaintiffs failed to establish their cause of action. The CA however reversed the decision of the trial court. It opined that it was "clear from the disputed article that the defamation was directed to all adherents of the Islamic faith”. ISSUES: W/N the CA was correct in holding that the elements of libel existed (NO) W/N the petitioners are liable for moral damages, exemplary damages, attorney's fees and costs of suit (NO) HELD: Defamation which includes libel and slander means the offense of injuring a person's character, fame or reputation through false and malicious statements. It is that which tends to injure reputation or to diminish the esteem, respect, good will or confidence in the plaintiff or to excite derogatory feelings or opinions about the plaintiff. It is the publication of anything which is injurious to the good name or reputation of another or tends to bring him into disrepute. It must be stressed that words which are merely insulting are not actionable as libel or slander per se, and mere words of general abuse however opprobrious, ill-natured, or vexatious, whether written or spoken, do not constitute a basis for an action for defamation in the absence of an allegation for special damages. The fact that the language is offensive to the plaintiff does not make it actionable by itself. Declarations made about a large class of people cannot be interpreted to advert to an identified or identifiable individual. Absent circumstances specifically pointing or alluding to a particular member of a class, no member of such class has a right of action without at all impairing the equally demanding right of free speech and expression, as well as of the press, under the Bill of Rights. In the present case, there was no fairly identifiable person who was allegedly injured by the Bulgar article. Since the persons allegedly defamed could not be identifiable, private respondents have no individual causes of action; hence, they cannot sue for a class allegedly disparaged. Private respondents must have a cause of action in

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common with the class to which they belong to in order for the case to prosper. An individual Muslim has a reputation that is personal, separate and distinct in the community. Each Muslim, as part of the larger Muslim community in the Philippines of over five (5) million people, belongs to a different trade and profession; each has a varying interest and a divergent political and religious view — some may be conservative, others liberal. A Muslim may find the article dishonorable, even blasphemous; others may find it as an opportunity to strengthen their faith and educate the non-believers and the "infidels." There is no injury to the reputation of the individual Muslims who constitute this community that can give rise to an action for group libel. Each reputation is personal in character to every person. Together, the Muslims do not have a single common reputation that will give them a common or general interest in the subject matter of the controversy. In the instant case, the Muslim community is too vast as to readily ascertain who among the Muslims were particularly defamed. Although the gist of an action for defamation is an injury to reputation, the focus of a defamation action is upon the allegedly defamatory statement itself and its predictable effect upon third persons. A statement is ordinarily considered defamatory if it "tends to expose one to public hatred, shame, obloquy, contumely, odium, contempt, ridicule, aversion, ostracism, degradation or disgrace." The Restatement of Torts defines a defamatory statement as one that "tends to so harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him." Our conclusion therefore is that the statements published by petitioners in the instant case did not specifically identify nor refer to any particular individuals who were purportedly the subject of the alleged libelous publication. Respondents can scarcely claim to having been singled out for social censure pointedly resulting in damages. A contrary view is expressed that what is involved in the present case is an intentional tortuous act causing mental distress and not an action for libel. We do not agree to the contrary view articulated in the immediately preceding paragraph. Primarily, an "emotional distress" tort action is personal in nature, i.e., it is a civil action filed by an individual to assuage the injuries to his emotional tranquility due to personal attacks on his character. It has no application in the instant case since no particular individual was identified in the disputed article of Bulgar. Also, the purported damage caused by the article, assuming there was any, falls under the principle of relational harm — which includes harm to social relationships in the community in the form of defamation; as distinguished from the principle of reactive harm — which includes injuries to individual emotional tranquility in the form of an infliction of emotional distress. In their complaint, respondents clearly asserted an alleged harm to the standing of Muslims in the community, especially to their activities in propagating their faith in Metro Manila and in other non-Muslim communities in the country. It is thus beyond cavil that the present case falls within the application of the relational harm principle of tort actions for defamation, rather than the reactive harm principle on which the concept of emotional distress properly belongs. Moreover, under the Second Restatement of the Law, to recover for the intentional infliction of emotional distress the plaintiff must show that: (a) The conduct of the defendant was intentional or in reckless disregard of the plaintiff; (b) The conduct was extreme and outrageous; (c) There was a causal connection between the defendant's conduct and the plaintiff's mental distress; and, (d) The plaintiff's mental distress was extreme and severe. Any party seeking recovery for mental anguish must prove more than mere worry, anxiety, vexation, embarrassment, or anger. Liability does not arise from mere insults, indignities, threats, annoyances, petty expressions, or other trivialities. In determining whether the tort of outrage had been committed, a plaintiff is necessarily expected and required to be hardened to a certain amount of criticism, rough language, and to occasional acts and words that are definitely inconsiderate and unkind; the mere fact that the actor knows that the other will regard the conduct as insulting, or will have his feelings hurt, is not enough. Verily, our position is clear that the conduct of petitioners was not extreme or outrageous. Neither was the emotional distress allegedly suffered by respondents so severe that no reasonable person could be expected to endure it. There is no evidence on record that points to that result. Likewise on the matter of damages, we agree that "moral damages may be recovered only if the plaintiff is able to satisfactorily prove the existence of the factual basis for the damages and its causal connection with the acts complained of, and so it must be, as moral damages although incapable of pecuniary estimation are designed not to impose a penalty but to compensate for injury sustained and actual damages suffered. Exemplary damages, on the other hand, may only be awarded if claimant is able to

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establish his right to moral, temperate, liquidated or compensatory damages. Unfortunately, neither of the requirements to sustain an award for either of these damages would appear to have been adequately established by respondents."

SILAHIS INTERNATIONAL HOTEL AND JOSE PANLILIO VS. ROGELIO SOLUTA G.R. No. 163087

20 February 2006

DOCTRINE: The Code Commission thus deemed it necessary to hold not only public officers but also private individuals civilly liable for violation of rights enumerated in Article 32 of the Civil Code. That is why it is not even necessary that the defendant under this Article should have acted with malice or bad faith, otherwise, it would defeat its main purpose, which is the effective protection of individual rights. It suffices that there is a violation of the constitutional right of the plaintiff. Article 32 speaks of an officer or employee or person "directly or indirectly" responsible for the violation of the constitutional rights and liberties of another. Hence, it is not the actor alone who must answer for damages under Article 32; the person indirectly responsible has also to answer for the damages or injury caused to the aggrieved party.

Petitioner/Defendant: Panlilio and Silahis Hotel Respondents/Injured Party: Soluta, employees and union members Torts/Event: Violation of constitutional right against illegal search

FACTS: Petitioner Jose Marcel Panlilio was the Vice President for Finance of his co-petitioner Silahis International Hotel, Inc., while respondents Rogelio Soluta, Joselito Santos, Edna Bernate, Vicenta Delola, and Florentino Matilla were employees of the hotel and officers of the Glowhrain-Silahis Union Chapter, the hotel employees union. Petitioners’ version of the antecedents of the case are as follows: In late 1987, as Coronel Floro Maniego, General Manager of the Rapier Enforcement Professional Investigation and Security Agency, Inc. which the hotel contracted to provide its security force, had been receiving reports that sale and/or use of marijuana, dollar smuggling, and prostitution were going on in the union office at the hotel and that there existed a theft syndicate, he conducted a surveillance, with the approval of Panlilio, of suspected members and officers of the union. In the morning of January 11, 1988, Panlilio, his personal secretary Andy Dizon, Maniego, Bulletin reporter Nonoy Rosales, and REPISA security guard Steve Villanueva entered the union office located at the hotel basement, with the permission of union officer Henry Babay who was apprised about the suspected illegal activities, and searched the premises in the course of which Villanueva found a plastic bag under a table. When opened, the plastic bag yielded dry leaves of marijuana. Panlilio thereupon ordered Maniego to investigate and report the matter to the authorities. On the other hand, respondents’ version follows: On January 10, 1988, Loida Somacera, a laundrywoman of the hotel, stayed overnight at the female locker room at the basement of the hotel. At dawn of January 11, 1988, she heard pounding sounds outside, prompting her to open the door of the locker room upon which she saw five men in barong tagalog whom she failed to recognize but she was sure were not employees of the hotel, forcibly opening the door of the union office. She even saw one of the men hid something behind his back. She then closed the door and went back to bed. Soon after she heard the door of the union office opened. In the morning of January 11, 1988, as union officer Soluta was trying in vain to open the door of the union office, Loida narrated to him what she had witnessed at dawn. Soluta thus immediately lodged a complaint before the Security Officer. And he fetched a locksmith, Efren Guevarra, who tried to assist him, Edna, Arnold Ilustrisimo and Ed Bautista open the door. At that instant, men in barong tagalog armed with clubs arrived and started hitting Soluta and his companions, drawing them to run to the female locker room, and to thereafter proceed to

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the Engineering Office where they called for police assistance. While awaiting the arrival of the police, Babay and Panlilio, on the latter’s request, met. At the meeting, Panlilio told Babay that they proceed to the union office where they would settle the mauling incident, to which Babay replied that the door of the office could not be opened. Panlilio thereupon instructed Villanueva to force open the door, and the latter did. Once inside, Panlilio and his companions began searching the office, over the objection of Babay who even asked them if they had a search warrant. A plastic bag was found containing marijuana flowering tops. As a result of the discovery of the presence of marijuana in the union office and after the police conducted an investigation of the incident, a complaint against the 13 union officers was filed before the Fiscal’s Office of Manila. An Information indicting the union officers was subsequently filed by the Fiscal’s Office before the Regional Trial Court of Manila. The RTC acquitted the accused because the marijuana flowering tops allegedly found inside the Union Office occupied by the accused are not admissible in evidence, coupled by the suspicious circumstance of confiscation, for lack of sufficient evidence. Soluta and his fellow union officers, together with the union, thereafter filed before the Manila RTC a Complaint against petitioners et al. including prosecuting Fiscal Jose Bautista and Atty. Eduardo Tutaan who assisted in the prosecution of the case against them, for malicious prosecution and violation of their constitutional right against illegal search. The RTC held the hotel, Panlilio, Maniego and Villanueva jointly and severally liable for damages as a result of malicious prosecution and illegal search of the union office. On appeal, the Court of Appeals affirmed with modification the trial court’s decision. It found herein petitioners et al. civilly liable for damages for violation of individual respondents’ constitutional right against illegal search, not for malicious prosecution. Hence, the present petition of Panlilio and the hotel. ISSUE: W/N the respondent individual can recover damages for violation of constitutional rights? YES HELD: YES, Article 32 of the New Civil Code provides: Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

x x x x (9) The right to be secure in one’s person, house, papers, and effects against unreasonable searches and seizures;

x x x x The indemnity shall include moral damages. Exemplary damages may also be adjudicated. (Emphasis and underscoring supplied) As constitutional rights, like the right to be secure in one’s person, house, papers, and effects against unreasonable search and seizures, occupy a lofty position in every civilized and democratic community and not infrequently susceptible to abuse, their violation, whether constituting a penal offense or not, must be guarded against. As the Code Commission noted,

x x x x (3) Direct and open violations of the Penal Code trampling upon the freedoms named are not so frequent as those subtle, clever and indirect ways which do not come within the pale of the penal law. It is in these cunning devices of suppressing or curtailing freedom, which are not criminally punishable, where the greatest danger to democracy lies. The injured citizen will always have, under the new Civil Code, adequate civil remedies before the courts because of the independent civil action, even in those instances where the act or omission complained of does not constitute a criminal offense.

In the present case, as priorly stated, petitioners had, by their own claim, already received reports in late 1987 of illegal activities allegedly undertaken in the union office and Maniego conducted surveillance of the union officers. Yet, in the morning of January 11, 1988, petitioners and their companions barged into and searched the union office without a search warrant, despite ample time for them to obtain one, and

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notwithstanding the objection of Babay. The course taken by petitioners and company stinks in illegality, it not falling under any of the exceptional instances when a warrantless search is allowed by law. Petitioners’ violation of individual respondents’ constitutional right against unreasonable search thus furnishes the basis for the award of damages under Article 32 of the Civil Code. As for petitioners’ contention that property rights justified the search of the union office, the same does not lie. For respondents, being the lawful occupants of the office, had the right to raise the question of validity of the search and seizure. Neither does petitioners’ claim that they were allowed by union officer Babay to enter the union office lie. Babay’s account of why petitioners and company went to the union office – to consider Panlilio’s suggestion to settle the mauling incident is more credible, as is his claim that he protested the search, and even asked if they were armed with a search warrant. While it is doctrinal that the right against unreasonable searches and seizures is a personal right which may be waived expressly or impliedly, a waiver by implication cannot be presumed. There must be clear and convincing evidence of an actual intention to relinquish it to constitute a waiver thereof. There must be proof of the following: (a) that the right exists; (b) that the person involved had knowledge, either actual or constructive, of the existence of such right; and, (c) that the said person had an actual intention to relinquish the right. In other words, the waiver must be voluntarily, knowingly and intelligently made. The evidence shows otherwise, however. That a violation of one’s constitutional right against illegal search and seizure can be the basis for the recovery of damages under Article 32 in relation to Article 2219(6) and (10) of the New Civil Code, there is no doubt. Article 32 speaks of an officer or employee or person "directly or indirectly" responsible for the violation of the constitutional rights and liberties of another. Hence, it is not the actor alone who must answer for damages under Article 32; the person indirectly responsible has also to answer for the damages or injury caused to the aggrieved party. Such being the case, petitioners, together with Maniego and Villanueva, the ones who orchestrated the illegal search, are jointly and severally liable for actual, moral and exemplary damages to herein individual respondents in accordance with the earlier-quoted pertinent provision of Article 32, in relation to Article 2219(6) and (10) of the Civil Code which provides: Art. 2219. Moral damages may be recovered in the following and analogous cases:

x x x x (6) Illegal search;

x x x x (10) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35. (Emphasis supplied) DISPOSITIVE PORTION: WHEREFORE, in light of the foregoing ratiocinations, the petition is DENIED.

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI) v. VERCHEZ GR No. 164349

31 January 2006

NOTE: Guys sorry it’s long pero kasi I added na everything that’s related to torts para for midterms. DOCTRINE: As for RCPI’s tort-based liability, Article 2219 of the Civil Code provides: Moral damages may be recovered in the following and analogous cases: (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Article 26 of the Civil Code, in turn, provides:

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Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention, and other relief:

(2) Meddling with or disturbing the private life or family relations of another.

Petitioner/Defendant: RCPI Respondents/Injured Party: Verchez Family Torts/Event: Late telegram

FACTS: Editha Hebron Verchez (Editha) was confined at the Sorsogon Provincial Hospital due to an ailment. On even date, her daughter Grace immediately hurried to the Sorsogon Branch of the Radio Communications of the Philippines, Inc. (RCPI) whose services she engaged to send a telegram to her sister Zenaida who was residing in Quezon City reading: "Send check money Mommy hospital." For RCPI’s services, Grace paid P10.50 for which she was issued a receipt. As three days after RCPI was engaged to send the telegram to Zenaida no response was received from her, Grace sent a letter to Zenaida, this time thru JRS Delivery Service, reprimanding her for not sending any financial aid. Immediately after she received Grace’s letter, Zenaida, along with her husband Fortunato Catibog, left for Sorsogon. On her arrival at Sorsogon, she disclaimed having received any telegram. Zenaida and her husband, together with Editha then left for Quezon City and brought her to the Veterans Memorial Hospital where she was confined from January 30, 1991 to March 21, 1991. The telegram was finally delivered to Zenaida 25 days later. On inquiry from RCPI why it took that long to deliver it, a messenger of RCPI replied that he had nothing to do with the delivery thereof as it was another messenger who previously was assigned to deliver the same but the address could not be located, hence, the telegram was resent and the second messenger finally found the address on February 15. Editha’s husband Alfonso, by letter demanded an explanation from the manager of the Service Quality Control Department of the RCPI, Fabian, who replied:

Our investigation on this matter disclosed that subject telegram was duly processed in accordance with our standard operating procedure. However, delivery was not immediately effected due to the occurrence of circumstances which were beyond the control and foresight of RCPI. Among others, during the transmission process, the radio link connecting the points of communication involved encountered radio noise and interferences such that subject telegram did not initially register in the receiving teleprinter machine. Our internal message monitoring led to the discovery of the above. Thus, a repeat transmission was made and subsequent delivery was effected.

On April 17, 1992, Editha died. Later, the Verchez’s filed a complaint against RCPI before the RTC of Sorsogon for damages. In their complaint, the plaintiffs alleged that, inter alia, the delay in delivering the telegram contributed to the early demise of the late Editha to their damage and prejudice, for which they prayed for the award of moral and exemplary damages and attorney’s fees. RCPI filed its answer, alleging that except with respect to Grace, the other plaintiffs had no privity of contract with it; any delay in the sending of the telegram was due to force majeure, "specifically, but not limited to, radio noise and interferences which adversely affected the transmission and/or reception of the telegraphic message"; the clause in the Telegram Transmission Form signed by Grace absolved it from liability for any damage arising from the transmission other than the refund of telegram tolls; it observed due diligence in the selection and supervision of its employees; and at all events, any cause of action had been barred by laches. The trial court, observing that "although the delayed delivery of the questioned telegram was not apparently the proximate cause of the death of Editha," ruled out the presence of force majeure. Respecting the clause in the telegram relied upon by RCPI, the trial court held that it partakes of the nature of a contract of adhesion. Finding that the nature of RCPI’s business obligated it to dispatch the telegram to the addressee at the earliest possible time but that it did not in view of the negligence of its employees to repair its radio

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transmitter and the concomitant delay in delivering the telegram on time, the trial court, rendered judgment against RCPI.9 CA affirmed. ISSUE: Is the award of moral damages proper even if the trial court found that there was no direct connection between the injury and the alleged negligent acts? HELD: RCPI contends that respondents failed to prove any causal connection between its delay in transmitting the telegram and Editha’s death. RCPI’s stand fails. It bears noting that its liability is anchored on culpa contractual or breach of contract with regard to Grace, and on tort with regard to her co-plaintiffs-herein-co-respondents. Article 1170 of the Civil Code provides “Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.” In culpa contractual the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promissee that may include his "expectation interest," which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, or his "reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his "restitution interest," which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence or of the attendance of fortuitous event, to excuse him from his ensuing liability. In the case at bar, RCPI bound itself to deliver the telegram within the shortest possible time. It took 25 days, however, for RCPI to deliver it. For the defense of force majeure to prosper, it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. An act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. One’s negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person’s participation – whether by active intervention, neglect or failure to act – the whole occurrence is humanized and removed from the rules applicable to acts of God. Article 1174 of the Civil Code states that no person shall be responsible for a fortuitous event that could not be foreseen or, though foreseen, was inevitable. In other words, there must be an exclusion of human intervention from the cause of injury or loss. Assuming arguendo that fortuitous circumstances prevented RCPI from delivering the telegram at the soonest possible time, it should have at least informed Grace of the non-transmission and the non-delivery so that she could have taken steps to remedy the situation. But it did not. There lies the fault or negligence.

9 Article 2176 – Whoever by act or omission causes damage to another, there being at fault or negligence, is obliged to pay for the damage done. Such fault or negligence if there is no pre-existing contractual relation between the parties, is called quasi-delict and is governed by the provisions of this Chapter.

Article 1173 defines the fault or negligence of the obligor as the "omission of the diligence which is required by the nature of the obligation and corresponds with the circumstances of the person, of the time, or the place."

In the instant case, the obligation of the defendant to deliver the telegram to the addressee is of an urgent nature. Its essence is the early delivery of the telegram to the concerned person. Yet, due to the negligence of its employees, the defendant failed to discharge of its obligation on time making it liable for damages under Article 2176. The negligence on the part of the employees gives rise to the presumption of negligence on the part of the employer.

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Considering the public utility of RCPI’s business and its contractual obligation to transmit messages, it should exercise due diligence to ascertain that messages are delivered to the persons at the given address and should provide a system whereby in cases of undelivered messages the sender is given notice of non-delivery. Messages sent by cable or wireless means are usually more important and urgent than those which can wait for the mail. People depend on telecommunications companies in times of deep emotional stress or pressing financial needs. Knowing that messages about the illnesses or deaths of loved ones, births or marriages in a family, important business transactions, and notices of conferences or meetings as in this case, are coursed through the petitioner and similar corporations, it is incumbent upon them to exercise a greater amount of care and concern than that shown in this case. Every reasonable effort to inform senders of the non-delivery of messages should be undertaken. RCPI argues, however, against the presence of urgency in the delivery of the telegram, as well as the basis for the award of moral damages, thus: The request to send check as written in the telegraphic text negates the existence of urgency that private respondents’ allegations that ‘time was of the essence’ imports. Requesting a check that would take 6 days before it could be withdrawn therefore contradicts plaintiff’s claim of urgency or need. At any rate, any sense of urgency of the situation was met when Grace Verchez was able to communicate to Manila via a letter that she sent to the same addressee in Manila thru JRS. As far as the respondent court’s award for moral damages is concerned, the same has no basis whatsoever since private respondent Alfonso Verchez did not accompany his late wife when the latter went to Manila by bus. He stayed behind in Sorsogon for almost 1 week before he proceeded to Manila. It is also important to consider in resolving private respondents’ claim for moral damages that private respondent Grace Verchez did not accompany her ailing mother to Manila. The fact that private respondent Alfonso Verchez stayed behind in Sorsogon for almost 1 week convincingly demonstrates that he himself knew that his wife was not in critical condition. RCPI’s arguments fail. For it is its breach of contract upon which its liability is, it bears repeating, anchored. Since RCPI breached its contract, the presumption is that it was at fault or negligent. It, however, failed to rebut this presumption. For breach of contract then, RCPI is liable to Grace for damages. And for quasi-delict, RCPI is liable to Grace’s co-respondents following Article 2176. RCPI’s liability as an employer could of course be avoided if it could prove that it observed the diligence of a good father of a family to prevent damage.10 As for RCPI’s tort-based liability, Article 2219 of the Civil Code provides: Moral damages may be recovered in the following and analogous cases: (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Article 26 of the Civil Code, in turn, provides: Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention, and other relief:

10 Article 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 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.

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.

RCPI failed, however, to prove that it observed all the diligence of a good father of a family to prevent damage.

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(2) Meddling with or disturbing the private life or family relations of another. RCPI’s negligence in not promptly performing its obligation undoubtedly disturbed the peace of mind not only of Grace but also her co-respondents. As observed by the appellate court, it disrupted the "filial tranquillity" among them as they blamed each other "for failing to respond swiftly to an emergency." The tortious acts and/or omissions complained of in this case are, therefore, analogous to acts mentioned under Article 26 of the Civil Code, which are among the instances of quasi-delict when courts may award moral damages under Article 2219 of the Civil Code. In fine, the award to the plaintiffs-herein respondents of moral damages is in order, as is the award of attorney’s fees, respondents having been compelled to litigate to protect their rights.

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III. NEGLIGENCE A. CONCEPT:

JARCO MARKETING CORP VS. CA AND AGUILARS (1999)

Petitioner Jarco Marketing Corp is the owner of Syvel’s Department Store. Petitioners Kong, Tiope and Panelo are the store’s branch manager, operations manager and supervisor, respectively. Private respondents are spouses and the parents of Zhieneth Aguilar.

Criselda (mom) and Zhieneth were at the 2nd floor of Syvel’s Department Store. Criselda was signing her credit card slip at the payment and verification counter when she felt a sudden gust of wind and heard a loud thud. She looked behind her and saw her daughter on the floor, her young body pinned by the bulk of the store’s gift-wrapping counter/structure. Zhieneth was crying and screaming for help.

With the assistance of people around, Zhieneth was retrieved and rushed to the Makati Med where she was operated on. The next day, she lost her speech and 13 days thereafter, passed away.

After the burial of Zhieneth, her parents demanded reimbursment of the hospitalization, medical bills and wake and funeral expenses, which they had incurred from petitioners. Upon petitioners’ refusal, the parents filed a complaint for damages.

Trial court absolved petitioners. It ruled that the proximate cause of the fall of the counter on Zhieneth was her act of clinging to it. Furthermore, Criselda’s negligence contributed to her daughter’s accident. Basically, the court reasoned that the counter was situated at the end or corner of the 2nd floor as a precautionary measure and hence it could not be considered as an attractive nuisance. The court added that the counter has been in existence for 15 years and its structure safe and well-balanced.

Court of Appeals reversed. It found that the petitioners were negligent in maintaining a structurally dangerous counter. (The counter was shaped like an inverted L with a top wider than the base. It was top heavy and the weight of the upper portion was neither evenly distributed nor supported by its narrow base. Thus the counter was defective, unstable and dangerous.) Moreover, Zhieneth who was below 7 years old at the time of the incident was absolutely incapable of negligence since a child under 9 could not be held liable even for an intentional wrong.

ISSUE: W/N death of Zhieneth was accidental or attributable to negligence. In case of a finding of negligence, whether attributable to private respondents for maintaining a

defective counter or to Criselda and Zhieneth for failing to exercise due and reasonable care while inside the store premises.

HELD: Tragedy, which befell zhieneth was no accident and that her heath could only be attributed to

negligence. Accident and negligence are intrinsically contradictory; one cannot exist with the other. Accident occurs when the person concerned is exercising ordinary care, which is not caused by fault of any person and which could not have been prevented by any means suggested by common prudence.

The test in determining the existence of negligence is enunciated in Picart vs. Smith, thus: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. PETITIONER NEGLIGENT.

According to the testimony of Gerardo Gonzales, a former gift-wrapper, who was at the scene of the incident: While in the emergency room the doctor asked the child what did you do to which the child replied nothing, I did not come near the counter and the counter just fell on me. Moreover, Ramon Guevarra, another former employee, testified to the effect that the counter needed some nailing because it was shaky, but that it was not attended to. Undoubtedly, petitioner Panelo and another store supervisor knew the danger of the unstable counter yet did not remedy the situation.

Anent the negligence imputed to Zhieneth, the conclusive presumption that favors children below 9 years old in that they are incapable of contributory negligence, applies (criminal cases conclusively presumed to have acted without discernment). Assuming Zhieneth committed contributory negligence when she climbed the counter, no injury should have occurred if petitioners theory that the counter was

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stable and sturdy was true. Indeed, the physical analysis of the counter reveal otherwise, i.e. it was not durable after all.

Criselda should likewise be absolved from contributory negligence. To be able to sign her credit card, it was reasonable for Criselda to momentarily release her child’s hand. Petition DENIED. Court of Appeals’ decision AFFIRMED.

APPLICABILITY OF ARTS. 1172-1174

SARMIENTO v. SUN-CABRIDO (2003)

Petitioner, states that in 1994 she, thru a certain Tita Payag, she acquired the services of DingDing’s Jewelry Shop, owned and managed by the Cabridos, for the purpose of converting Dra Virginia Lao’s pair of diamond earrings into two gold rings.When the rings were finished, Marilou Sun of DingDing’s Jewelry Shop, with whom TitaPayag discussed the resetting job, notified her that the rings were finished and that shecould bring them to the store for dismounting. Marilou was unable to dismount thediamond so she asked their goldsmith, Zenon Santos to do it. Using pliers, Zenon Santostwisted the diamond breaking it in the process.Petitioner was forced to buy a replacement for Php 30,000 and sought to recover damagesfrom the respondents. The Municipal Trial Court in Cities of Tagbilaran found in favor of the petitioner but the appellate courts reversed the MTCC’s decision.

ISSUE: 1) WON the dismounting of the diamond from its original setting was partof the contract? YES 2) WON respondents are liable for damages? YES HELD: The Court sides with the petitioner. 1) The respondents initially denied accepting the said

resetting job, but eventuallyadmitted to its existence nonetheless denying that they had any obligation to dismountthe diamonds from their original setting. Such statements were found to be inconsistentwith the acts of Marilou who, upon examining the diamonds, expressed no reservation asto their dismounting, which was after all an integral part of the job order.She should have asked Tita Payag to take the diamonds someplace else for dismounting if she really intended to spare the shop of dismounting them. Furthermore, upon completionof the rings, she was the one who called up the petitioner to bring the diamonds in forresetting, she even attempted to reset them herself before eventually delegating the taskto Santos.

2) Obligations arising from contracts have the force of law between the contractingparties, corollarily, those who in the performance of their obligations are guilty of fraud,negligence or delay and those who in any manner contravene the tenor thereof, are liablefor damages.Santos, who had 40 years experience as a goldsmith, was negligent in dismounting thediamonds because he did not employ a miniature wire, as was the practice of the trade,but instead used a pair of pliers.It should be pointed out that when Marilou examined the diamonds before dismounting itfrom the original setting , they were in order, their subsequent breakage in the hands of Santos could only have been caused by his negligence in using the wrong equipment (Resipsa loquitor).

The respondents tried to avoid liability by denying Santos and Marilou were employees of DingDing’s Jewelry Shop. But facts show that Santos had been working for DingDing’s forabout 6 months, accepting job orders while Tita Payag states that on at least 10 previousoccasions she had transacted with DingDing’s through Marilou. Therefore there exists anobligation by the owner’s of DingDing’s to pay actual damages to the petitionerMoral damages may be awarded in a breach of contract if it is proven that the defendantacted in 1) bad faith or was 2) guilty of gross negligence amounting to bad faith or in 3)wanton disregard of his contractual obligation.In this case, due to the gross negligence of Santos, their employee, the respondentspouses are liable for moral damages.

Petition granted. Respondent spouses ordered to pay jointly and severally to thepetitioner Php 30,000 in actual damages and Php 10,000 in moral damages

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B. AS PROXIMATE CAUSE (ART 2179)

TAYLOR V. MANILA ELECTRIC (1910)

• The plaintiff, David Taylor, was at the time when he received the injuries complained of, 15 years of

age, the son of a mechanical engineer, more mature than the average boy of his age, and having considerable aptitude and training in mechanics.

• On the 30th of September, 1905, plaintiff, with a boy named Manuel Claparols, about 12 years of age, crossed the footbridge to the Isla del Provisor, for the purpose of visiting one Murphy, an employee of the defendant, who and promised to make them a cylinder for a miniature engine. Finding on inquiry that Mr. Murphy was not in his quarters, the boys, impelled apparently by youthful curiosity and perhaps by the unusual interest which both seem to have taken in machinery, spent some time in wandering about the company's premises. The visit was made on a Sunday afternoon, and it does not appear that they saw or spoke to anyone after leaving the power house where they had asked for Mr. Murphy.

• They walked across the open space in the neighborhood of the place where the company dumped in the cinders and ashes from its furnaces. Here they found some twenty or thirty brass fulminating caps scattered on the ground. These caps are approximately of the size and appearance of small pistol cartridges and each has attached to it two long thin wires by means of which it may be discharged by the use of electricity. They are intended for use in the explosion of blasting charges of dynamite, and have in themselves a considerable explosive power. After some discussion as to the ownership of the caps, and their right to take them, the boys picked up all they could find, hung them on stick, of which each took end, and carried them home.

• After crossing the footbridge, they met a little girl named Jessie Adrian, less than 9 years old, and all three went to the home of the boy Manuel. The boys then made a series of experiments with the caps. They trust the ends of the wires into an electric light socket and obtained no result. They next tried to break the cap with a stone and failed. Manuel looked for a hammer, but could not find one. Then they opened one of the caps with a knife, and finding that it was filled with a yellowish substance they got matches, and David held the cap while Manuel applied a lighted match to the contents. An explosion followed, causing more or less serious injuries to all three. Jessie, who when the boys proposed putting a match to the contents of the cap, became frightened and started to run away, received a slight cut in the neck. Manuel had his hand burned and wounded, and David was struck in the face by several particles of the metal capsule, one of which injured his right eye to such an extent as to the necessitate its removal by the surgeons who were called in to care for his wounds.

• Two years before the accident, plaintiff spent four months at sea, as a cabin boy on one of the interisland transports. Later he took up work in his father's office, learning mechanical drawing and mechanical engineering. About a month after his accident he obtained employment as a mechanical draftsman and continued in that employment for six months at a salary of P2.50 a day; and it appears that he was a boy of more than average intelligence, taller and more mature both mentally and physically than most boys of fifteen.

ISSUE: W/N Manila Electric is liable for damages to the petitioners HELD: • No.The immediate cause of the explosion, the accident which resulted in plaintiff's injury, was

in his own act in putting a match to the contents of the cap, and that having "contributed to the principal occurrence, as one of its determining factors, he can not recover."

• In the case at bar, plaintiff at the time of the accident was a well-grown youth of 15, more mature both mentally and physically than the average boy of his age; he had been to sea as a cabin boy; was able to earn P2.50 a day as a mechanical draftsman thirty days after the injury was incurred; and the record discloses throughout that he was exceptionally well qualified to take care of himself. The evidence of record leaves no room for doubt that, despite his denials on the witness stand, he well knew the explosive character of the cap with which he was amusing himself. The series of experiments made by him in his attempt to produce an explosion, as described by the little girl who was present, admit of no other explanation. His

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attempt to discharge the cap by the use of electricity, followed by his efforts to explode it with a stone or a hammer, and the final success of his endeavors brought about by the application of a match to the contents of the caps, show clearly that he knew what he was about. Nor can there be any reasonable doubt that he had reason to anticipate that the explosion might be dangerous, in view of the fact that the little girl, 9 years of age, who was within him at the time when he put the match to the contents of the cap, became frightened and ran away.

• True, he may not have known and probably did not know the precise nature of the explosion which might be expected from the ignition of the contents of the cap, and of course he did not anticipate the resultant injuries which he incurred; but he well knew that a more or less dangerous explosion might be expected from his act, and yet he willfully, recklessly, and knowingly produced the explosion. It would be going far to say that "according to his maturity and capacity" he exercised such and "care and caution" as might reasonably be required of him, or that defendant or anyone else should be held civilly responsible for injuries incurred by him under such circumstances.

• The law fixes no arbitrary age at which a minor can be said to have the necessary capacity to understand and appreciate the nature and consequences of his own acts, so as to make it negligence on his part to fail to exercise due care and precaution in the commission of such acts; and indeed it would be impracticable and perhaps impossible so to do, for in the very nature of things the question of negligence necessarily depends on the ability of the minor to understand the character of his own acts and their consequences; and the age at which a minor can be said to have such ability will necessarily depends of his own acts and their consequences; and at the age at which a minor can be said to have such ability will necessarily vary in accordance with the varying nature of the infinite variety of acts which may be done by him.

BATACLAN V. MEDINA (1957)

Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation, operated by its

owner defendant Mariano Medina under a certificate of public convenience, left the town of Amadeo, Cavite, on its way to Pasay City, driven by its regular chauffeur, Conrado Saylon. There were about eighteen passengers, including the driver and conductor. Among the passengers were Juan Bataclan, seated beside and to the right of the driver, Felipe Lara, sated to the right of Bataclan, another passenger apparently from the Visayan Islands whom the witnesses just called Visaya, apparently not knowing his name, seated in the left side of the driver, and a woman named Natalia Villanueva, seated just behind the four last mentioned. At about 2:00 o'clock that same morning, while the bus was running within the jurisdiction of Imus, Cavite, one of the front tires burst and the vehicle began to zig-zag until it fell into a canal or ditch on the right side of the road and turned turtle. Some of the passengers managed to leave the bus the best way they could, others had to be helped or pulled out, while the three passengers seated beside the driver, named Bataclan, Lara and the Visayan and the woman behind them named Natalia Villanueva, could not get out of the overturned bus. Some of the passengers, after they had clambered up to the road, heard groans and moans from inside the bus, particularly, shouts for help from Bataclan and Lara, who said they could not get out of the bus. There is nothing in the evidence to show whether or not the passengers already free from the wreck, including the driver and the conductor, made any attempt to pull out or extricate and rescue the four passengers trapped inside the vehicle, but calls or shouts for help were made to the houses in the neighborhood. After half an hour, came about ten men, one of them carrying a lighted torch made of bamboo with a wick on one end, evidently fueled with petroleum. These men presumably approach the overturned bus, and almost immediately, a fierce fire started, burning and all but consuming the bus, including the four passengers trapped inside it. It would appear that as the bus overturned, gasoline began to leak and escape from the gasoline tank on the side of the chassis, spreading over and permeating the body of the bus and the ground under and around it, and that the lighted torch brought by one of the men who answered the call for help set it on fire.

That same day, the charred bodies of the four deemed passengers inside the bus were removed and duly identified that of Juan Bataclan. The widow instituted a suit to recover damages from Medina.

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The trial court ruled in favor of the widow of Bataclan. But the trial court contends that the overturning of the bus was not the proximate cause of bataclan’s death.

ISSUE: Whether the overturning of the bus was the proximate cause of Bataclan’s death or the fire that

burned the bus. HELD: In the present case under the circumstances obtaining in the same, we do not hesitate to hold

that the proximate cause was the overturning of the bus, this for the reason that when the vehicle turned not only on its side but completely on its back, the leaking of the gasoline from the tank was not unnatural or unexpected; that the coming of the men with a lighted torch was in response to the call for help, made not only by the passengers, but most probably, by the driver and the conductor themselves, and that because it was dark (about 2:30 in the morning), the rescuers had to carry a light with them, and coming as they did from a rural area where lanterns and flashlights were not available; and what was more natural than that said rescuers should innocently approach the vehicle to extend the aid and effect the rescue requested from them. In other words, the coming of the men with a torch was to be expected and was a natural sequence of the overturning of the bus, the trapping of some of its passengers and the call for outside help. What is more, the burning of the bus can also in part be attributed to the negligence of the carrier, through is driver and its conductor. According to the witness, the driver and the conductor were on the road walking back and forth. They, or at least, the driver should and must have known that in the position in which the overturned bus was, gasoline could and must have leaked from the gasoline tank and soaked the area in and around the bus, this aside from the fact that gasoline when spilled, specially over a large area, can be smelt and directed even from a distance, and yet neither the driver nor the conductor would appear to have cautioned or taken steps to warn the rescuers not to bring the lighted torch too near the bus. Said negligence on the part of the agents of the carrier come under the codal provisions above-reproduced, particularly, Articles 1733, 1759 and 1763.

FERNANDO V. CA (1992)

On November 7, 1975, Bibiano Morta, market master of the Agdao Public Market filed a requisition

request with the Chief of Property of the City Treasurer's Office for the re-emptying of the septic tank in Agdao.

An invitation to bid was issued to Bertulano, Catarsa, Bascon, Bolo and Suñer, Jr. Bascon won the bid. On November 26, 1975 Bascon was notified and he signed the purchase order. However, before such date, specifically on November 22, 1975, bidder Bertulano with four other

companions namely Joselito Garcia, William Liagoso, Alberto Fernando and Jose Fajardo, Jr. were found dead inside the septic tank. The bodies were removed by a fireman. One body, that of Joselito Garcia, was taken out by his uncle, Danilo Garcia and taken to the Regional Hospital but he expired there. The City Engineer's office investigated the case and learned that the five victims entered the septic tank without clearance neither from it nor with the knowledge and consent of the market master. In fact, the septic tank was found to be almost empty and the victims were presumed to be the ones who did the re-emptying. Dr. Juan Abear of the City Health Office autopsied the bodies and in his reports, put the cause of death of all five victims as "asphyxia" caused by the diminution of oxygen supply in the body working below normal conditions. The lungs of the five victims burst, swelled in hemmorrhagic areas and this was due to their intake of toxic gas, which, in this case, was sulfide gas produced from the waste matter inside the septic tank.

Petitioners, children of the deceased, file a complaint for damages. TC: Dismissed. • CA: In favor of petitioners, based on social justice. • CA on MR: Reversed, in favor of

Davao City. ISSUES: W/N Davao City is the proximate cause.

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ARGUMENTS: Petitioners fault the city government of Davao for failing to clean a septic tank for the period of 19 years resulting in an accumulation of hydrogen sulfide gas which killed the laborers. They contend that such failure was compounded by the fact that there was no warning sign of the existing danger and no efforts exerted by the public respondent to neutralize or render harmless the effects of the toxic gas. They submit that the public respondent's gross negligence was the proximate cause of the fatal incident.

HELD: We find no compelling reason to grant the petition. We affirm. We do not subscribe to this view.

While it may be true that the public respondent has been remiss in its duty to re-empty the septic tank annually, such negligence was not a continuing one. Upon learning from the report of the market master about the need to clean the septic tank of the public toilet in Agdao Public Market, the public respondent immediately responded by issuing invitations to bid for such service. Thereafter, it awarded the bid to the lowest bidder, Mr. Feliciano Bascon . The public respondent, therefore, lost no time in taking up remedial measures to meet the situation. It is likewise an undisputed fact that despite the public respondent's failure to re-empty the septic tank since 1956, people in the market have been using the public toilet for their personal necessities but have remained unscathed.

In view of this factual milieu, it would appear that an accident such as toxic gas leakage from the septic tank is unlikely to happen unless one removes its covers. The accident in the case at bar occurred because the victims on their own and without authority from the public respondent opened the septic tank. Considering the nature of the task of emptying a septic tank especially one which has not been cleaned for years, an ordinarily prudent person should undoubtedly be aware of the attendant risks. The victims are no exception; more so with Mr. Bertulano, an old hand in this kind of service, who is presumed to know the hazards of the job. His failure, therefore, and that of his men to take precautionary measures for their safety was the proximate cause of the accident.

To be entitled to damages for an injury resulting from the negligence of another, a claimant must establish the relation between the omission and the damage. He must prove under Article 2179 of the New Civil Code that the defendant's negligence was the immediate and proximate cause of his injury. Proximate cause has been defined as that cause, which, in natural and continuous sequence unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. Proof of such relation of cause and effect is not an arduous one if the claimant did not in any way contribute to the negligence of the defendant. However, where the resulting injury was the product of the negligence of both parties, there exists a difficulty to discern which acts shall be considered the proximate cause of the accident.

URBANO V. IAC (1988)

Nature : This is a petition to review the decision of the then Intermediate Appellate Court When Filomeno Urbano found the place where he stored his palay flooded with water coming from the

irrigation canal nearby which had overflowed he went to see what happened and there he saw Marcelo Javier admitted that he was the one responsible for what happened. Urbano then got angry and demanded that Javier pay for his soaked palay. A quarrel between them ensued. Urbano hacked Javier hitting him on the right palm of his hand . Javier who was then unarmed runaway from Urbano but was overtaken by Urbano who hacked him again hitting Javier on the left leg with the back portion of said bolo, causing a swelling on said leg.

On November 14,1980, Javier was rushed to the Nazareth General Hospital in a very serious condition. Javier had lockjaw and was having convulsions. Dr.Edmundo Exconde who personally attended to Javier found that the latter's serious condition was caused by tetanus toxin. He noticed the presence of a healing wound in Javier's palm which could have been infected by tetanus. On November 15, 1980 Javier died in the hospital.

Appellant’s claim :-there was an efficient cause which supervened from the time the deceased was wounded to the time of his death-the proximate cause of the victim's death was due this own negligence in going back to work without his wound being properly healed, and lately, that he went to catch fish in dirty

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irrigation canals in the first week of November, 1980- Javier got infected with tetanus when after two week she returned to his farm and tended his tobacco plants with his bare hands exposing the wound to harmful elements like tetanus germs.

ISSUE: WON there was an efficient intervening cause from the time Javier was wounded until his death

which would exculpate Urbane from any liability for Javier's death HELD: Yes. The medical findings lead us to a distinct possibility that the infection of the wound by

tetanus was an efficient intervening cause later or between the time Javier was wounded to the time of his death. The infection was, therefore, distinct and foreign to the crime. Reasoning :-The case involves the application of Article 4 10 of the Revised Penal Code.-The evidence on record does not clearly show that the wound inflicted by Urbano was infected with tetanus at the time of the infliction of the wound. The evidence merely confirms that the wound, which was already healing at the time Javier suffered the symptoms of the fatal ailment, somehow got infected with tetanus However, as to when the wound was infected is not clear from the record.

In Vda. de Bataclan, et al. v. Medina (102 Phil. 1181),we adopted the following definition of proximate cause:"x x x A satisfactory definition of proximate cause is found in Volume 38, pages 695-696 of American Jurisprudence, cited by plaintiffs appellants in their brief. It is as follows: “that cause which in natural and continuous sequence, unbroken by any efficient intervening cause produces the injury and without which the result not have occurred.' And more comprehensively, the proximate legal cause is that acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom.' (at pp. 185-186)

The court looked into the nature of tetanus to determine the cause Medically speaking, the reaction to tetanus found inside a man's body depends on the incubation period

of the disease. Javier suffered a 2-inch incised wound on his right palm when he parried the bolo which Urbano used

in hacking him. This incident took place on October 23, 1980. After 22 days, or on November 14, 1980, he suffered the symptoms of tetanus, like lockjaw and muscle spasms. The following day, November 15, 1980, he died. If,therefore,the wound of Javier inflicted by the appellant was already infected by tetanus germs at the time, it is more medically probable that Javier should have been infected with only a mild cause of tetanus because the symptoms of tetanus appeared on the 22nd day after the hacking incident or more than 14 days after the infliction of the wound.

Therefore, the onset time should have been more than six days. Javier, however, died on the second day from the onset time. The more credible conclusion is that at the time Javier's wound was inflicted by the appellant, the severe form of tetanus that killed him was not yet present. Consequently, Javier's wound could have been infected with tetanus after the hacking incident. Considering the circumstance surrounding Javier's death, his wound could have been infected by tetanus 2 or 3 or a few but not 20 to 22 days before he died. The medical findings lead us to a distinct possibility that the infection of the wound by tetanus was an efficient intervening cause later or between the time Javier was wounded to the time of his death. The infection was, therefore, distinct and foreign to the crime.

The rule is that the death of the victim must be the direct, natural, and logical consequence of the wounds inflicted upon him by the accused. (People v. Cardenas, supra) As we ruled in Manila Electric Co. v. Remaquillo, "'A prior and remote cause cannot be made the basis of an action if such remote cause did nothing more than furnish the condition or give rise to the occasion by which the injury was made possible, if there intervened between such prior or remote cause and the injury a distinct, successive, unrelated, and efficient cause of the injury, even though such injury would not have happened but for such condition or occasion. If no danger existed in the condition except because of the independent cause, such condition was not the proximate cause. And if an independent negligent act or defective condition sets into operation the

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circumstances, which result in injury because of the prior defective condition, such subsequent act or condition is the proximate cause.”

BERNAL V. HOUSE AND TACLOBAN ELECTRIC (1930)

Fortunata Enverso with her daughter Purificacion Bernal went to Tacloban, Leyte to attend the

procession of Holy Friday. After the procession, they, accompanied by two other persons, passed along a public street named Gran Capitan. The little girl was allowed to get a short distance in advance of her mother and her friends. While in front of the offices of the Tacloban Electric & Ice Plant, Ltd., an automobile appeared on which frightened the child. She turned to run, but fell into the street gutter. At that time there was hot water in this gutter or ditch coming from the Electric Ice Plant of J.V. House. -When the mother and her companions reached the child, they found her face downward in the hot water. -The girl was taken to the provincial hospital. Despite his efforts, the child died that same night. - It was certified that the cause of death was "Burns, 3rd Degree, whole Body", and that the contributory causes were "Congestion of the Brain and visceras of the chest & abdomen.” - The defense was that the hot water was permitted to flow down the side of the street Gran Captain with the knowledge and consent of the authorities; that the cause of death was other than the hot water; and that in the death the plaintiffs contributed by their own fault and negligence.

The trial judge, however, after examination of the evidence presented by the defendants, failed to sustain their theory of the case, except as to the last mentioned special defense. He nevertheless was led to order the dismissal of the action because of the contributory negligence of the plaintiffs.

ISSUE: W/N the action should be dismissed due to the contributory negligence of the plaintiffs HELD: NO - The death of the child was the result of fault and negligence in permitting hot water to flow

through the public streets, there to endanger the lives of passers-by who were unfortunately enough to fall into it - The mother and her child had a perfect right to be on the principal street of Tacloban, Leyte, on the evening when the religious procession was held. - There was nothing abnormal in allowing the child to run along a few paces in advance of the mother. No one could foresee the coincidence of an automobile appearing and of a frightened child running and falling into a ditch filled with hot water. - The doctrines announced in the much debated case of Rakes vs. Atlantic, Gulf and Pacific Co. ([1907], 7 Phil., 359), still rule. Article 1902 of the Civil Code must again be enforced. The contributory negligence of the child and her mother, if any, does not operate as a bar to recovery, but in its strictest sense could only result in reduction of the damages. DISPOSITION Judgment appealed from was in part be reversed and in the court of origin another judgment was issued in favor of Fortunata Enverso and against J.V. House for the amount of P1,000, and for the costs of both instances.

SEPARATE OPINION: ROMUALDEZ [ dissent] - Even taking the finding that the defendant by its

negligence helped to bring about the accident which resulted in the death of the child Purificacion Bernal, plaintiff, by negligence, contributed to that most regrettable result. - Judgment appealed from should be affirmed.

GABETO V. ARANETA (1921)

Basilio Ilano and Proceso Gayetano took a carromata near Plaza Gay, in the City of Iloilo, with a view to

going to a cockpit on Calle Ledesma in the same City. When the driver of the carromata had turned his horse and started in the direction indicated, the defendant, Agaton Araneta, stepped out into the street, and laying his hands on the reins, stopped the horse, at the same time protesting to the driver that he himself had called this carromata first. The driver, one Julio Pagnaya, replied to the effect that he had not heard or seen the call of Araneta, and that he had taken up the two passengers then in the carromata as the first who had offered employment. At or about the same time Pagnaya pulled on the reins of the bridle to free the horse from the control of Agaton Araneta, in order that the vehicle might pass on. Owing, however, to the

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looseness of the bridle on the horse's head or to the rottenness of the material of which it was made, the bit came out of the horse's mouth; and it became necessary for the driver to get out, which he did, in order to fix the bridle. The horse was then pulled over to near the curb, by one or the other — it makes no difference which — and Pagnaya tried to fix the bridle.

While he was thus engaged, the horse, being free from the control of the bit, became disturbed and moved forward, in doing which he pulled one of the wheels of the carromata up on the sidewalk and pushed Julio Pagnaya over. After going a few yards further the side of the carromata struck a police telephone box which was fixed to a post on the sidewalk, upon which the box came down with a crash and frightened the horse to such an extent that he set out at full speed up the street.Meanwhile one of the passengers, to wit. Basilio Ilano, had alighted while the carromata was as yet alongside the sidewalk; but the other, Proceso Gayetano, had unfortunately retained his seat, and after the runaway horse had proceeded up the street to a point in front of the Mission Hospital, the said Gayetano jumped or fell from the rig, and in so doing received injuries from which he soon died.

This action was brought by Consolacion Gabeto, in her own right as widow of Proceso Gayetano, and as guardian ad litem of the three children, Conchita Gayetano, Rosita Gayetano, and Fermin Gayetano, for the purpose of recovering damages incurred by the plaintiff as a result of the death of the said Proceso Gayetano, supposedly caused by the wrongful act of the defendant Agaton Araneta. Judge awarded damages to the widow to which decision Araneta appealed.

ISSUE: WON the stopping of the rig by Agaton Araneta in the middle of the street was too remote from

the accident that presently ensued to be considered the legal or proximate cause thereof. HELD: NO. The evidence indicates that the bridle was old, and the leather of which it was made was

probably so weak as to be easily broken. it was Julio who jerked the rein, thereby causing the bit to come out of the horse's mouth; and Julio, after alighting, led the horse over to the curb, and proceeded to fix the bridle; and that in so doing the bridle was slipped entirely off, when the horse, feeling himself free from control, started to go away. Disposition: Judgment is REVERSED.

MCKEE V. IAC (1992)

Between 9 and 10 o'clock in the morning of January 1977, in Pulong Pulo Bridge along MacArthur

Highway, between Angeles City and San Fernando, Pampanga, a head-on-collision took place between an International cargo truck, Loadstar, owned by Tayag and Manalo, driven by Galang, and a Ford Escort car driven by Jose Koh, resulting in the deaths of Jose Koh, Kim Koh McKee and Loida Bondoc, and physical injuries to George Koh McKee, Christopher Koh McKee and Araceli Koh McKee, all passengers of the Ford Escort • Immediately before the collision, the cargo truck, which was loaded with 200 cavans of rice weighing about 10,000 kilos, was traveling southward from Angeles City to San Fernando Pampanga, and was bound for Manila. The Ford Escort, on the other hand, was on its way to Angeles City from San Fernando • When the Ford Escort was about 10 meters away from the southern approach of the bridge, 2 boys suddenly darted from the right side of the road and into the lane of the car moving back and forth, unsure of whether to cross all the way to the other side or turn back • Jose Koh blew the horn of the car, swerved to the left and entered the lane of the truck; he then switched on the headlights of the car, applied the brakes and thereafter attempted to return to his lane. But before he could do so, his car collided with the truck. The collision occurred in the lane of the truck, which was the opposite lane, on the said bridge

As a result of the accident, 2 civil cases were filed for damages for the death and physical injuries sustained by the victims boarding the Ford Escort; as well as a criminal case against Galang • During the trial, evidence were presented showing that the driver of the Truck was speeding resulting in the skid marks it caused in the scene of the accident • The lower court found Galang guilty in the criminal case, but the civil cases were dismissed • On appeal, the CA affirmed the conviction of Galang, and reversed the decision in the civil cases, ordering the payment of damages for the death and physical injuries of the McKee family • On MR, the CA reversed its previous decision and ruled in favor of the owners of the truck

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ISSUES : W/N the owner and driver of the Truck were responsible for the collision HELD: The proximate cause of the collision was the over speeding of the truck showing its negligence. The

test of negligence and the facts obtaining in this case, it is manifest that no negligence could be imputed to Jose Koh. Any reasonable and ordinary prudent man would have tried to avoid running over the two boys by swerving the car away from where they were even if this would mean entering the opposite lane. Avoiding such immediate peril would be the natural course to take particularly where the vehicle in the opposite lane would be several meters away and could very well slow down, move to the side of the road and give way to the oncoming car. Moreover, under what is known as the emergency rule, "one who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the emergency in which he finds himself is brought about by his own negligence"

Considering the sudden intrusion of the 2 boys into the lane of the car, the Court finds that Jose Koh adopted the best means possible in the given situation to avoid hitting them. Applying the above test, therefore, it is clear that he was not guilty of negligence

In any case, assuming, arguendo that Jose Koh is negligent, it cannot be said that his negligence was the proximate cause of the collision. Galang's negligence is apparent in the records. He himself said that his truck was running at 30 miles (48 kilometers) per hour along the bridge while the maximum speed allowed by law on a bridge is only 30 kilometers per hour. Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation.

Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds application here. Last clear chance is a doctrine in the law of torts which states that the contributory negligence of the party injured will not defeat the claim for damages if it is shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the negligence of the injured party. In such cases, the person who had the last clear chance to avoid the mishap is considered in law solely responsible for the consequences thereof.

Applying the foregoing doctrine, it is not difficult to rule that it was the truck driver's negligence in failing to exert ordinary care to avoid the collision which was, in law, the proximate cause of the collision. As employers of the truck driver, Tayag and Manalo are, under Article 2180 of the Civil Code, directly and primarily liable for the resulting damages. The presumption that they are negligent flows from the negligence of their employee. That presumption, however, is only juris tantum, not juris et de jure. Their only possible defense is that they exercised all the diligence of a good father of a family to prevent the damage, which they failed to do.

Petition GRANTED. Resolution SET ASIDE and previous DECISION REINSTATED.

C. PROOF OF NEGLIGENCE ONG v. METROPOLITAN WATER DISTRICT (1958)

Metropolitan owns 3 swimming pools at its filters in Balara, QC. It charges the public a certain fee if

such wanted to use its pools Dominador Ong, 14 years of age, son of petitioners, went to the pools along with his 2 brothers. He

stayed in the shallow pool, but then he told his brothers that he would get something to drink. His brothers left him and went to the Deep pool.

Around 4pm that day, a bather reported that one person was swimming to long under water. Upon hearing this, the lifeguard on duty dove into the pool to retrieve Ong’s lifeless body. Applying first aid, the lifeguard tried to revive the boy. Soon after, male nurse Armando Rule came to render assistance, followed by sanitary inspector Iluminado Vicente who, after being called by phone from the clinic by one of the security guards, boarded a jeep carrying with him the resuscitator and a medicine kit, and upon arriving he injected the boy with camphorated oil. After the injection, Vicente left on a jeep in order to fetch Dr. Ayuyao

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from the University of the Philippines. Meanwhile, Abaño continued the artificial manual respiration, and when this failed to revive him, they applied the resuscitator until the two oxygen tanks were exhausted

Investigation was concluded and the cause of death is asphyxia by submersion in water (pagkalunod). The parents of Ong brought this action for damages against Metropolitan, alleging negligence on the

selection and supervision of its employees and if not negligent, they had the last clear chance to revive Ong. It is to be noted that Metropolitan had complete safety measures in place: they had a male nurse, six lifeguards, ring buoys, toy roof, towing line, saving kit and a resuscitator. There is also a sanitary inspector who is in charge of a clinic established for the benefit of the patrons. Defendant has also on display in a conspicuous place certain rules and regulations governing the use of the pools, one of which prohibits the swimming in the pool alone or without any attendant. Although defendant does not maintain a full- time physician in the swimming pool compound, it has however a nurse and a sanitary inspector ready to administer injections or operate the oxygen resuscitator if the need should arise.

ISSUES : W/N Metropolitan is liable to the Ongs for its negligence

W/N the last clear chance doctrine may be invoked in this case HELD: BOTH NO. Metropolitan is not negligent. Metropolitan has taken all necessary precautions to

avoid danger to the lives of its patrons. It has been shown that the swimming pools of appellee are provided with a ring buoy, toy roof, towing line, oxygen resuscitator and a first aid medicine kit. The bottom of the pools is painted with black colors so as to insure clear visibility. There is on display in a conspicuous place within the area certain rules and regulations governing the use of the pools. Appellee employs six lifeguards who are all trained as they had taken a course for that purpose and were issued certificates of proficiency. These lifeguards work on schedule prepared by their chief and arranged in such a way as to have two guards at a time on duty to look after the safety of the bathers. There is a male nurse and a sanitary inspector with a clinic provided with oxygen resuscitator. And there are security guards who are available always in case of emergency.

The record also shows that when the body of minor Ong was retrieved from the bottom of the pool, the employees of appellee did everything possible to bring him back to life. When they found that the pulse of the boy was abnormal, the inspector immediately injected him with camphorated oil. When the manual artificial respiration proved ineffective they applied the oxygen resuscitator until its contents were exhausted. And while all these efforts were being made, they sent for Dr. Ayuyao from the University of the Philippines who however came late because upon examining the body found him to be already dead. All of the foregoing shows that appellee has done what is humanly possible under the circumstances to restore life to minor Ong and for that reason it is unfair to hold it liable for his death The Last Clear Chance Doctrine is inapplicable in this case

The record does not show how minor Ong came into the big swimming pool. The only thing the record discloses is that minor Ong informed his elder brothers that he was going to the locker room to drink a bottle of coke but that from that time on nobody knew what happened to him until his lifeless body was retrieved. The doctrine of last clear chance simply means that the negligence of a claimant does not preclude a recovery for the negligence of defendant where it appears that the latter, by exercising reasonable care and prudence, might have avoided injurious consequences to claimant notwithstanding his negligence.

Since it is not known how minor Ong came into the big swimming pool and it being apparent that he went there without any companion in violation of one of the regulations of appellee as regards the use of the pools, and it appearing that lifeguard Abaño responded to the call for help as soon as his attention was called to it and immediately after retrieving the body all efforts at the disposal of appellee had been put into play in order to bring him back to life, it is clear that there is no room for the application of the doctrine now invoked by appellants to impute liability to appellee.

D. PRESUMPTION OF NEGLIGENCE

1. RESPONDEAT SUPERIOR (Art 1755-1756)

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PAL V. CA (106 SCRA 391 /// 1981)

Plaintiff Jesus Samson averred that on January 8, 1951, he flew as co-pilot on a regular flight with

Captain Delfin Bustamente as commanding C-47 plane belonging to PAL, now herein the petitioner; that on attempting to land the plane at Daet airport, Capt. Bustamante due to his slow reaction and poor judgment overshot the airfield and as result, notwithstanding the diligent efforts of the plaintiff co-pilot to avert anaccident, the airplane crashed-landed beyond the runway. The jolt caused Samson to suffer from brain concussion, wounds, abrasions of the forehead with intense pain and suffering.

Samson requested for expert and proper medical assistance however was only submitted for check-up to accompany physician who is a general med-practitioner. Several days after, he was called by PAL to report for duty in spite of his previous request for expert medical assistance as he was already experiencing general debility, dizziness and nervousness.

Samson, then, was discharged from duty on the grounds of physical disability causing him to lose his job and become physically unfit to continue as aviator due to PAL’s negligence in not giving him the proper medical attention.

ISSUE: WON PAL did not exercise utmost diligence required of them as a common carriage. HELD: There was gross negligence by PAL for allowing Capt. Bustamante to fly on the that fateful day of

the accident, even if he was sick, having tumor on his nose. The duty of a common carrier, like PAL, to exercise the highest degree of diligence extends to passengers and crew members.

The dizziness, headaches and general debility of private respondent were after-effects of the crash-landing. And therefore there is causal connection between the accident and said after-effects. The negligence of PAL is clearly a quasi-delict and therefore Art. 2219(2) is applicable, justifying the recovery of moral damages. Even from the standpoint of the petitioner that there is an employee-employer relationship between it and private respondent arising from the contract of employment, private respondent is still entitled to moral damages in view of the finding of bad faith or malice, applying the provisions of Article 2220 which provides that wilful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

NATIONAL DEVELOPMENT V. CA (164 SCRA 593; 1988)

National Development Company (NDC) and Maritime Company of the Philippines (MCP) entered into a MOA, and that NDC appointed MCP as its agent to manage an ocean vessel (Dona Nati). Philipp Corp of NY loaded on the Dona Nati some cotton consigned to the order of Manila Banking and PBTrust. There was also cargo from Tokyo consisting of sodium lauryl sulphate and aluminium foil. En route to Manila, it collided with a Japanese vessel. Cargoes were lost or damaged, amounting to 345k (for NY) and 20k (for Tokyo). Development Insurance paid the holders of the negotiable bills of lading. Hence, Development Insurance filed the complaint to recover the amount from NDC and MCP as owner and ship agent of the Dona Nati vessel. RTC ordered MCP and NDC to pay jointly and solidarily Development Insurance. Trial court also granted MCP’s crossclaim against NDC. CA affirmed. ISSUE: W/N the Civil Code/Code of Commerce or the Carriage of Goods by Sea Act should apply (because under the Sea Act, the carrier is not responsible for the loss resulting from the act of the pilot of the carrier in the navigation of the ship, so NDC would be relieved of liability) HELD: The Civil Code/Code of Commerce appliease. The Carrige of Goods by Sea Act is a special law and is merely suppletory. For cargoes transported from Japan to the PH, the liability of the carrier is governed primarily by the CC and in all matters not regulated there, the rights and obligations of common carried

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shall be governed by the Code of Commerce and. It is evident that the laws of the PH will apply, and is immaterial that the collision occurred in foreign waters. Under 1733 of the CC, common carriers are bound to observe extraordinary diligence. Under 1735, the common carrier is presumed to have been at fault, unless it proves it has observed the extraordinary diligence. BUT the collision falls among matters not regulated by the CC, so the CA correctly applied Articles 826-839 of the Code of Commerce. More specifically, Article 826 of the Code of Commerce provides that where collision is imputable to the personnel of a vessel, the owner of the vessel at fault, shall indemnify the losses and damages incurred after an expert appraisal. But more in point to the instant case is Article 827 of the same Code, which provides that if the collision is imputable to both vessels, each one shall suffer its own damages and both shall be solidarily responsible for the losses and damages suffered by their cargoes. Significantly, under the provisions of the Code of Commerce, particularly Articles 826 to 839, the shipowner or carrier, is not exempt from liability for damages arising from collision due to the fault or negligence of the captain. Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the conduct of the voyage. INTERNATIONAL FLAVORS V. ARGOS (2001)

Petitioner International Flavors and Fragrances (Phils.) Inc. or IFFI, is a corporation organized and

existing under Philippine laws. Respondents Argos and Pineda are the general manager and commercial director, respectively, of the Fragrances Division of IFFI.

In 1992, the office of managing director was created to head the corporation’s operation in the Philippines. Hernan H. Costa, a Spaniard, was appointed managing director. Costa and respondents had serious differences. When the positions of the general managers became redundant, respondents agreed to the termination of their services. They signed a “Release, Waiver and Quitclaim” on December 10, 1993. On the same date, Costa issued a “Personnel Announcement” which described respondents as “persona non grata” and urged employees not to have further dealings with them.

Thereafter, respondents filed a criminal complaint for libel against Costa. They also filed a civil case for against Costa and IFFI, in its subsidiary capacity as employer. Herein petitioner IFFI moved to dismiss the complaint.

ISSUES: W/N private respondents can sue petitioner for damages based on subsidiary liability in an

independent civil action under art. 33 during the pendency of the criminal libel case against its employee? HELD: NO, respondents’ suit based on subsidiary liability is premature. Petitioner avers that the Court

of Appeals erred when it treated said complaint as one to enforce petitioner’s primary liability under Article 33 of the Civil Code. It asserts that in so doing the appellate court introduced a new cause of action not alleged nor prayed for in respondents’ complaint. Petitioner argues that a cause of action is determined by the allegations and prayer in a complaint. Respondents in their complaint did not allege that IFFI was primarily liable for damages. On the contrary, petitioner says the complaint was replete with references that IFFI was being sued in its subsidiary capacity.

The well-established rule is that the allegations in the complaint and the character of the relief sought determine the nature of an action. A perusal of the respondents’ civil complaint before the regional trial court plainly shows that respondents is suing IFFI in a subsidiary and not primary capacity insofar as the damages claimed are concerned.

The prayer of the complaint reads: “WHEREFORE, it is respectfully prayed that after hearing, this Honorable Court renders judgment against the defendant, Hernan H. Costa and/or against defendant International Flavors and Fragrances (Phil.), Inc., in its subsidiary capacity (subsidiary liability) as an employer...”

Nothing could be clearer than that herein respondents are suing IFFI civilly in its subsidiary capacity for Costa’s alleged defamatory acts. Moreover, the appellate court could not convert allegations of

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subsidiary liability to read as averments of primary liability without committing a fundamental unfairness to the adverse party.

Article 33 of the Civil Code provides specifically that in cases of defamation, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action proceeds independently of the criminal prosecution and requires only a preponderance of evidence. It does not apply to an action against the employer to enforce its subsidiary civil liability, because such liability arises only after conviction of the employee in the criminal case or when the employee is adjudged guilty of the wrongful act in a criminal action and found to have committed the offense in the discharge of his duties. Any action brought against the employer based on its subsidiary liability before the conviction of its employee is premature.

Respondents did not base their civil action on petitioner IFFI’s primary liability under Art. 33 but claimed damages from IFFI based on its subsidiary liability as employer of Costa, prematurely.

CASTILEX INDUSTRIAL V. VASQUEZ (1999)

At around 1:30 to 2:00 in the morning, Romeo So Vasquez, was driving a Honda motorcycle around

Fuente Osmeña Rotunda. He was traveling counterclockwise, (the normal flow of traffic in a rotunda) but without any protective helmet or goggles. He was also only carrying a Student's Permit to Drive at the time. Upon the other hand, Benjamin Abad [was a] manager of Appellant Castilex Industrial Corporation, registered owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW- 794. On the same date and time, Abad drove the said company car out of a parking lot but instead of going around the Osmeña rotunda he made a short cut against [the] flow of the traffic in proceeding to his route to General Maxilom St. or to Belvic St.

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

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

ISSUE: WON an employer may be held vicariously liable for the death resulting from the negligent

operation by a managerial employee of a company-issued vehicle. HELD: Castilez is absolved from any liability. The negligence of ABAD is not an issue at this instance.

Petitioner CASTILEX presumes said negligence but claims that it is not vicariously liable for the injuries and subsequent death caused by ABAD. Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to instances where the employer is not engaged in business or industry. Since it is engaged in the business of manufacturing and selling furniture it is therefore not covered by said provision. Instead, the fourth paragraph should apply. Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though the former are not engaged in any business or industry" found in the fifth paragraph should be interpreted to mean that it is not necessary for the employer to be engaged in any business or industry to be liable for the negligence of his employee who is acting within the scope of his assigned task.

A distinction must be made between the two provisions to determine what is applicable. Both provisions apply to employers: the fourth paragraph, to owners and managers of an establishment or enterprise; and the fifth paragraph, to employers in general, whether or not engaged in any business or industry. The fourth paragraph covers negligent acts of employees committed either in the service of the branches or on the occasion of their functions, while the fifth paragraph encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both

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employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty.This court has applied the fifth paragraph to cases where the employer was engaged in a business or industry such as truck operators and banks. The Court of Appeals cannot, therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to this case. Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is liable for the torts committed by employees within the scope of his assigned tasks. But it is necessary to establish the employer-employee relationship; once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the scope of his assigned task when the tort complained of was committed. It is only then that the employer may find it necessary to interpose the defense of due diligence in the selection and supervision of the employee.

It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of the tort occurrence. As to whether he was acting within the scope of his assigned task is a question of fact, which the court a quo and the Court of Appeals resolved in the affirmative.

Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are entitled to great respect, and even finality at times. This rule is, however, subject to exceptions such as when the conclusion is grounded on speculations, surmises, or conjectures. Such exception obtain in the present case to warrant review by this Court of the finding of the Court of Appeals that since ABAD was driving petitioner's vehicle he was acting within the scope of his duties as a manager.

On the issue of whether the private respondents have sufficiently established that ABAD was acting within the scope of his assigned tasks, ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving a company-issued vehicle, registered under the name of petitioner. He was then leaving the restaurant where he had some snacks and had a chat with his friends after having done overtime work for the petitioner. No absolutely hard and fast rule can be stated which will furnish the complete answer to the problem of whether at a given moment, an employee is engaged in his employer's business in the operation of a motor vehicle, so as to fix liability upon the employer because of the employee's action or inaction; but rather, the result varies with each state of facts. The court a quo and the Court of Appeals were one in holding that the driving by a manager of a company-issued vehicle is within the scope of his assigned tasks regardless of the time and circumstances. The SC does not agree. The mere fact that ABAD was using a service vehicle at the time of the injurious incident is not of itself sufficient to charge petitioner with liability for the negligent operation of said vehicle unless it appears that he was operating the vehicle within the course or scope of his employment. It used the principles in American Jurisprudence on the employer's liability for the injuries inflicted by the negligence of an employee in the use of an employer's motor vehicle:

I. Operation of Employer's Motor Vehicle in Going to or from Meals: It has been held that an employee who uses his employer's vehicle in going from his work to a place where he intends to eat or in returning to work from a meal is not ordinarily acting within the scope of his employment in the absence of evidence of some special business benefit to the employer. Evidence that by using the employer's vehicle to go to and from meals, an employee is enabled to reduce his time-off and so devote more time to the performance of his duties supports the findings that an employee is acting within the scope of his employment while so driving the vehicle.

II. Operation of Employer's Vehicle in Going to or from Work: In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of the employee, and not a part of his services to his employer. Hence, in the absence of some special benefit to the employer other than the mere performance of the services available at the place where he is needed, the employee is not acting within the scope of his employment even though he uses his employer's motor vehicle. 14 cda The employer may, however, be liable where he derives some special benefit from having the employee drive home in the employer's vehicle as when the employer benefits from having the employee at work earlier and, presumably, spending more time at his actual duties. Where the employee's duties require him to circulate in a general area with no fixed place or hours of work, or to go to and from his home to various outside places of work, and his employer furnishes him with a vehicle to use in his work, the courts have frequently

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applied what has been called the "special errand" or "roving commission" rule, under which it can be found that the employee continues in the service of his employer until he actually reaches home. However, even if the employee be deemed to be acting within the scope of his employment in going to or from work in his employer's vehicle, the employer is not liable for his negligence where at the time of the accident, the employee has left the direct route to his work or back home and is pursuing a personal errand of his own.

III. Use of Employer's Vehicle Outside Regular Working Hours: An employer who loans his motor vehicle to an employee for the latter's personal use outside of regular working hours is generally not liable for the employee's negligent operation of the vehicle during the period of permissive use, even where the employer contemplates that a regularly assigned motor vehicle will be used by the employee for personal as well as business purposes and there is some incidental benefit to the employer. Even where the employee's personal purpose in using the vehicle has been accomplished and he has started the return trip to his house where the vehicle is normally kept, it has been held that he has not resumed his employment, and the employer is not liable for the employee's negligent operation of the vehicle during the return trip.

The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine of respondeat superior, not on the principle of bonus pater familias as in ours. Whether the fault or negligence of the employee is conclusive on his employer as in American law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the part of the employer as in ours, it is indispensable that the employee was acting in his employer's business or within the scope of his assigned task. ABAD was engaged in affairs of his own or was carrying out a personal purpose not in line with his duties at the time he figured in a vehicular accident. It was then about 2:00 a.m., way beyond the normal working hours. ABAD's working day had ended; his overtime work had already been completed. His being at a place which, as petitioner put it, was known as a "haven for prostitutes, pimps, and drug pushers and addicts," had no connection to petitioner's business; neither had it any relation to his duties as a manager. Rather, using his service vehicle even for personal purposes was a form of a fringe benefit or one of the perks attached to his position.

2. VIOLATION OF RULES AND STATUTES

A. TRAFFIC RULES MANUEL V. CA (1993)

Private respondents were passengers of an International Harvester Scout Car (Scout Car) owned by

respondent Ramos, which left Manila for Camarines Norte in the morning of December 27, 1977 with respondent Fernando Abcede, Sr. as the driver of the vehicle.

There was a drizzle at about 4:10 P.M. when the Scout car, which was then negotiating the zigzag road of Bo. Paraiso, Sta. Elena, Camarines Norte, was hit on its left side by a bus. The bus was owned by petitioner Emiliano Manuel. Due to the impact, the Scout car was thrown backwards against a protective railing. Were it not for the railing, the Scout car would have fallen into a deep ravine. All its ten occupants, which included four children were injured, seven of the victims sustained serious physical injuries (Rollo, p. 28).

Emiliano Manuel, the driver of the bus, was prosecuted for multiple physical injuries through reckless imprudence in the Municipal Court of Sta. Elena, Camarines Norte. As he could not be found after he ceased reporting for work a few days following the incident, the private respondents filed the instant action for damages based on quasi-delict.

After trial, the court a quo rendered judgment against petitioners and Perla Compania de Seguros, that covered the insurance of the bus. The court ordered them to pay, jointly and severally, the amount of P49,954.86 in damages to respondents. On appeal, the Court of Appeals, affirmed the decision of the trial court. Hence this petition

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ISSUE: W/N it was Fernando Abcede, Jr., driver of the Scout car, who was at fault. (Besides, petitioners claim the Fernando Abcede, Jr., who was only 19-years old at the time of the incident, did not have a driver's license)

HELD: NO. The fact that the Scout car was found after the impact at rest against the guard railing shows

that it must have been hit and thrown backwards by the bus (Rollo, p. 103). The physical evidence do not show that the Superlines Bus while traveling at high speed, usurped a portion of the lane occupied by the Scout car before hitting it on its left side. On collision, the impact due to the force exerted by a heavier and bigger passenger bus on the smaller and lighter Scout car, heavily damaged the latter and threw it against the guard railing.

Petitioner's contention that the Scout car must have been moved backwards is not only a speculation but is contrary to human experience. There was no reason to move it backwards against the guard railing. If the purpose was to clear the road, all that was done was to leave it where it was at the time of the collision, which was well inside its assigned lane. Besides, even petitioners accept the fact that when the police arrived at the scene of the accident, they found no one thereat (Rollo, p. 13). This further weakens the possibility that some persons moved the Scout car to rest on the guard railing. The evidence with respect to the issue that Fernando Abcede, Jr. who was not duly licensed, was the one driving the Scout car at the time of the accident, could not simply exempt petitioner's liability because they were parties at fault for encroaching on the Scout car's lane

MALLARI V. CA (2000)

The passenger jeepney driven by petitioner Alfredo Mallari Jr. and owned by his copetitioner

Alfredo Mallari Sr. collided with the delivery van of respondent Bulletin Publishing Corp. along the National Highway in Bataan. The van of respondent BULLETIN was coming from the opposite direction. It was driven by one Felix Angeles. The collision occurred after Mallari Jr. overtook the Fiera while negotiating a curve in the highway. The points of collision were the left rear portion of the passenger jeepney and the left front side of the delivery van of BULLETIN. The impact caused the jeepney to turn around and fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually died.

Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages against Mallari Sr. and Mallari Jr., and also against BULLETIN, its driver Felix Angeles, and the N.V. Netherlands Insurance Company.

TC found that the proximate cause of the collision was the negligence of Felix Angeles, driver of the Bulletin delivery van, considering the fact that the left front portion of the delivery truck driven by Felix Angeles hit and bumped the left rear portion of the passenger jeepney driven by Mallari Jr. Hence, it ordered BULLETIN and Felix Angeles to pay jointly and severally Claudia G. Reyes. It also dismissed the complaint against the other defendants Mallari Sr. and Mallari Jr.

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

ISSUES: W/N CA erred in finding Mallari Jr. negligent and holding him liable. HELD: NO. CA is correct. Contrary to the allegation that there was no evidence whatsoever that

petitioner Mallari Jr. overtook a vehicle at a curve on the road at the time of or before the accident, the same petitioner himself testified that such fact indeed did occur.

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

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Code. The proximate cause of the collision was the sole negligence of the driver of the passenger jeepney, petitioner Mallari Jr., who recklessly operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules.

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

Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory evidence to overcome this legal presumption.

The negligence and recklessness of the driver of the passenger jeepney is binding against petitioner Mallari Sr., who admittedly was the owner of the passenger jeepney engaged as a common carrier, considering the fact that in an action based on contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible for the payment of damages sought by the passenger.

Under Art. 1755 of the Civil Code, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons with due regard for all the circumstances. Moreover, under Art. 1756 of the Civil Code, in case of death or injuries to passengers, a common carrier is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of the same Code, it is liable for the death of or injuries to passengers through the negligence or willful acts of the former’s employees. This liability of the common carrier does not cease upon proof that it exercised all the diligence of a good father of a family in the selection of its employees. Petition denied. CA decision reversing TC decision is affirmed.

B. STATUTES AND ORDINANCES / ADMINISTRATIVE RULES MARINDUQUE IRON V. WORKMEN’S COMPENSATION (1956)

Petition for review on certiorari of a decision of the WCC A truck driven by Procopio Macunat, belonging to Marinduque, turned over and hit a coconut tree

resulting in the death of Pedro Mamador and injury to the other laborers. - Macunat was prosecuted, convicted and was sentenced to indemnify the heirs of the deceased. He has paid nothing, however, to the latter. - Deceased’s wife now seeks compensation by Marinduque as the employer.

ISSUE 1. WON Mamador has a right to compensation by Marinduque 2. WON there was notorious negligence by the deceased for having violated the employer’s

prohibition to ride haulage trucks HELD 1. YES - Petitioner alleges that the criminal case sentencing Macunat to indemnify the heirs of the

deceased was a suit for damages against a third person, thereby having the effect of releasing the employer from liability. - The criminal case, however, was not a suit for damages against third persons because the heirs did not intervene therein and they have not received the indemnity ordered by the court. - At any rate, even if the case was against a third person, the court already decided in Nava vs. Inchausti that criminal prosection of the "other person" does not affect the liability of the employer. - Petitioner also contends that the amicable settlement entered into by Mamador's widow and Macunat barred the widow's claim against the employer because she has already elected one of the remedies. - This contention cannot be sustained because what the widow waived was the offender's criminal proscution and not all civil action for damages.

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2. NO - Mere riding on a haulage truck or stealing a ride thereon is not negligence, ordinarily. It couldn't be, because transportation by truck is not dangerous per se. - Although the employer prohibited its employees to ride the haulage trucks, its violation does not constitute negligence per se, but it may be an evidence of negligence. - Under the circumstance, however, it cannot be declared negligence because the proibition had nothing to do with the personal safety of the riders. - Notorious negligence means the same as gross negligence which implies "conscious indifferenece to consequences", "pursuing a course of conduct which would naturally and probably result in injury".

Disposition Award for compensation by WCC affirmed CIPRIANO V. CA (1996)

Cipriano is engaged in rust-roofing of vehicles (Mobilkote) and a restaurant (Lambat) situated

adjointly. On a relevant date, an employee of Maclin Electronics brought a Kia Pride to him for such service, which the latter should have claimed on a certain time after the service but failed to do so.

Cipriano then kept the same in the inner garage to safeguard against theft. However fire broke out from Cipriano’s adjoined restaurant, which then burned the premises of Mobilkote, including the Kia car.

Private respondent then sued for damages which Cipriano denied since there was delay in the claim of the car. CA upheld liability by reason of Cipriano’s failure to observe mandate of PD 1572.

ISSUES : W/N Cipriano could be held liable for damages despite the fire being a caso fortuito. HELD: YES. CIPRIANO LIABLE. Violation of a statutory duty is negligence. His failure to insure the cars

under his service and the service he renders under the DTI is a condition precedent for his operations. Although the fire is a fortuitous event, the circumstance given as neglect of duty cannot exempt petitioner from the loss. FF CRUZ & CO V. CA (1998)

The furniture manufacturing shop of F.F. Cruz in Caloocan City was situated adjacent to the residence of

the Mables. Sometime in August 1971, private respondent Gregorio Mable first approached Eric Cruz, petitioner's

plant manager, to request that a firewall be constructed between the shop and Mable’s residence. The request was repeated several times but they fell on deaf ears.

In the early morning of September 6, 1974, fire broke out in Cruz’s shop. Cruz’s employees, who slept in the shop premises, tried to put out the fire, but their efforts proved futile. The fire spread to the Mables’ house. Both the shop and the house were razed to the ground.

The Mables collected P35,000.00 on the insurance on their house and the contents thereof. The Mables filed an action for damages against the Cruz’s.

The TC ruled in favor of the Mables. CA affirmed but reduced the award of damages. ISSUES: W/N the doctrine of res ipsa loquitor is applicable to the case. HELD: Yes. The doctrine of res ipsa loquitor is applicable to the case. The CA, therefore, had basis to find

Cruz liable for the loss sustained by the Mables’. The doctrine of res ipsa loquitur, may be stated as follows: o Where the thing which caused the injury complained of is shown to be under the management of the defendant or his servants and the accident is such as in the ordinary course of things does not happen if those who have its management or control use proper care, it affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from want of care. [Africa v. Caltex (Phil.), Inc., G.R. No. L-12986, March 31, 1966, 16 SCRA 448.]

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The facts of the case likewise call for the application of the doctrine, considering that in the normal course of operations of a furniture manufacturing shop, combustible material such as wood chips, sawdust, paint, varnish and fuel and lubricants for machinery may be found thereon.

It must also be noted that negligence or want of care on the part of petitioner or its employees was not merely presumed:

- Cruz failed to construct a firewall between its shop and the residence of the Mables as required by a city ordinance o that the fire could have been caused by a heated motor or a lit cigarette

-that gasoline and alcohol were used and stored in the shop; and - that workers sometimes smoked inside the shop Even without applying the doctrine of res ipsa loquitur, Cruz's failure to construct a firewall in

accordance with city ordinances would suffice to support a finding of negligence. Even then the fire possibly would not have spread to the neighboring houses were it not for another

negligent omission on the part of defendants, namely, their failure to provide a concrete wall high enough to prevent the flames from leaping over it. Defendant's negligence, therefore, was not only with respect to the cause of the fire but also with respect to the spread thereof to the neighboring houses.

In the instant case, with more reason should petitioner be found guilty of negligence since it had failed to construct a firewall between its property and private respondents' residence which sufficiently complies with the pertinent city ordinances. The failure to comply with an ordinance providing for safety regulations had been ruled by the Court as an act of negligence. SANITARY STEAM LAUNDRY V. CA

This case involves a collision between a truck owned by petitioner and a cimarron which caused the

death of three persons and injuries to several others.Petitioner’s truck crashed the cimarron when the driver stepped on the brakes to avoid hitting the jeepney and this caused his vehicle to swerve to the left and encroach on a portion of the opposite lane.

RTC found Petitioner’s driver to be responsible for the accident and awarded damages in favor of Private respondents.Petitioner contends that the driver of the cimarron was guilty of contributory negligence since it was guilty of violation of traffic rules and regulations (overloading, had only one headlight on) at the time of mishap.

He also argued that sudden swerving of a vehicle caused by its driver stepping on the brakes is not negligence per se. He further argued that the driver should be exonerated based on the the doctrine of last clear chance, which states that the person who has the last clear chance of avoiding an accident, notwithstanding the negligent acts of his opponent, is solely responsible for the consequences of the accident. He petitioner claimed that the cimarron had the last opportunity of avoiding an accident.

The SC found the petitioner’s arguments to be without merit.It has not been shown that there was a casual connection between the injury received and the violation of the Land Transportation and Traffic Code. Negligence consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury.

Violations alleged in this case were mere allegations unsupported by any evidence and are insufficient to discharge its burden of proving clearly that such alleged negligence was the contributing cause of the injury.

Police report did not show that only one headlight was functioning and there is nothing to suggest that the driver of the camarron had no elbow room for maneuvering the vehicle due to the alleged overloading of passengers.

All these point to the fact that the proximate cause was the negligence of petitioner’s driver.The argument that sudden swerving is not negligence per se is untenable since in the case relied on by petitioner, it is sudden skidding that was held to be not negligence per se. Although it is not required for employees to undergo psychological and physical examinations or submit clearances from the police and the NBI, driving exacts a more than usual toll on the senses

.Accordingly, it behooves employers to exert extra care in the selection and supervision of their employees. They must go beyond the minimum requirements fixed by law. Finally the formula for

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determining life expectancy is determined by applying the formula 2/3 multiplied by (80 minus the age of the deceased).

3. DANGEROUS WEAPONS AND SUBSTANCES ARANETA V. AREGLADO

Manuel S. Araneta and Benjamin Araneta, father and son, appeal from a decision of the Court of First Instance of Manila (in its case No. 24322) sentencing defendants Juan Arreglado, his wife, and his son, Jose Dario Arreglado, to pay the former only P3,943 damages in lieu of the P112,000 claimed in the complaint. FACTS: On March 7, 1951, while plaintiff Benjamin Araneta was talking with the other students of the Ateneo de Manila while seated atop a low ruined wall bordering the Ateneo grounds along Dakota Street, in the City of Manila, Dario Arreglado, a former student of the Ateneo, chanced to pass by. Those on the wall called Dario and conversed with him, and in the course of their talk, twitted him on his leaving the Ateneo and enrolling in the De La Salle College. Apparently, Arreglado resented the banter and suddenly pulling from his pocket a Japanese Lugar pistol (licensed in the name of his father Juan Arreglado), fired the same at Araneta, hitting him in the lower jaw, and causing him to drop backward, bleeding profusely. Helped by his friends, the injured lad was taken first to the school infirmary and later to the Singian Hospital, where he lay hovering between life and death for three days. The vigor of youth came to his rescue; he rallied and after some time finally recovered, the gunshot wound left him with a degenerative injury to the jawbone (mandible) and a scar in the lower portion of the face, where the bullet had plowed through. The behavior of Benjamin was likewise affected, he becoming inhibited and after leaving the hospital. Dario Arreglado was indicted for frustrated homicide (Criminal Case No. 15143, of Manila) and pleaded guilty; but in view of his youth, Dario being only 14 years of age, the court suspended the hearings as prescribed by Article 80 of the Revised Penal Code, and ordered him committed to of Mr. Deogracias Lerma, under the supervision of the Commissioner of Social Welfare. Because Arreglado observed proper conduct and discipline while on probation, the court, upon recommendation of the Social Welfare Administrator, finally discharged him on May 22, 1953, and quashed the criminal case. Thereafter, on October 13, 1954, an action was instituted by Araneta and his father against Juan Arreglado, his wife, and their son, Dario, to recover material, moral and exemplary damages. After trial, the Court of First Instance found that Dario Arreglado's father had acted negligently in allowing his son to have access to the pistol used to injure Benjamin Araneta, and sentenced defendants to pay P3,943, damages and attorney's fees. The trial Judge also overruled the claim of thed efense that because the court failed to award any damages to Araneta in the criminal case, a separate civil action for their recovery is now foreclosed. The Arreglados did not appeal the decision but the Aranetas did; and in view of the amount originally claimed (P112,000), the case was taken directly to this Court. We agree with the appellants that the damages awarded by the lower court for the injuries suffered by Benjamin Araneta are inadequate. In allowing not more than P1,000 as compensation for the "permanent deformity and —something like an inferiority complex" as well as for the "pathological condition on the left side of the jaw" caused to said plaintiff, the court below overlooked the clear evidence on record that to arrest the degenerative process taking place in the mandible and restore the injured boy to a nearly normal condition, surgical intervention was needed, for which the doctor's charges would amount to P3,000,exclusive of hospitalization fees, expenses and medicines. Furthermore, the operation, according to Dr. Diño, would probably have to be repeated in order to effectuate acomplete cure, while removal of the scar on the face obviously demanded plastic surgery. We are not impressed by the reasoning of the court a quo in refusing to consider the cost of plastic treatment as a of the indemnity for damages. It argued that —. . . if this was really necessary it is peculiar that the father, Manuel S. Araneta, would have

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allowed himself to wait for the outcome of this case in orderto secure funds to bring his son to America; it is admitted that plaintiff is a man of much more than moderate means and no father in his position wouldhave let pass the present situation; he wouldwithout loss of time, have taken his son to America,cost what it may, if it was necessary; and the fact that he has waited and waited in the opinion of the court would prove that after all plastic surgery wasnot and is not very necessary. (Rec. App., p. 63) The father's failure to submit his son to a plastic operation as soon as possible does not prove that such treatment is not called for. The damage to the jaw and the existence of the scar in Benjamin Araneta's face are physical facts that cannot be reasoned out of existence. That the injury should be treated in order to restore him as far as possible to his original condition is undeniable. The father's delay, or even his negligence, should not be allowed to prejudice the son who has no control over the parent's action nor impair his right to a full indemnity. We do not believe that plaintiffs-appellants should recover the cost of a plastic operation and surgical treatment in the United States, since their own experts asserted that the operation could be competently performed here by local practitioners. Still, taking into account the necessity and cost of corrective measures to fully repair the damage; the pain suffered by the injured party; his feelings of inferiority due to consciousness of his present deformity, as well as the voluntary character of the injury inflicted; and further considering that a repair, however skillfully conducted, is never equivalent to the original state, we are of the opinion that the indemnity granted by the trial court should be increased to a total of P18,000. It is also the hope of the Court that the award in the present case will remind licensed possessors of firearms of their peremptory duty to adequately safeguard such dangerous weapons at all times, and to take all requisite measures to prevent minors and other unauthorized parties from having access thereto. Competent observers have recently called attention to the fact that the growing teenage hooliganismin our society is principally due to parent's complacency in and neglect of their progeny. Appellants complain that the court should have allowed more than P500 to compensate Benjamin's lost school year. We find this complaint unjustified, since the damages due to the lost schooling and the resulting reduction in the lad's future earning capacity are manifestly speculative, and may not exist at all. Moreover, the record does not show facts sufficient to justify a larger award on this account.

4. RES IPSA LOQUITOR AFRICA V. CALTEX (1966)

A fire broke out at the Caltex service station in Manila. It started while gasoline was being hosed from a

tank truck into the underground storage, right at the opening of the receiving truck where the nozzle of the hose was inserted The fire then spread to and burned several neighboring houses, including the personal properties and effects inside them.

The owners of the houses, among them petitioners here, sued Caltex (owner of the station) and Boquiren (agent in charge of operation).

Trial court and CA found that petitioners failed to prove negligence and that respondents had exercised due care in the premises and with respect to the supervision of their employees. Both courts refused to apply the doctrine of res ipsa loquitur on the grounds that “as to its applicability xxx in the Philippines, there seems to be nothing definite,” and that while the rules do not prohibit its adoption in appropriate cases, “in the case at bar, however, we find no practical use for such docrtrine.”

ISSUES: W/N without proof as to the cause and origin of the fire, the doctrine of res ipsa loquitur should

apply as to presume negligence on the part of the appellees.

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HELD: DOCTRINE OF RES IPSA LOQUITUR APPLIES. CALTEX LIABLE. Res ipsa Loquitur is a rule to the effect that “where the thing which caused the injury complained of is shown to be under the management of defendant or his servants and the accident is such as in the ordinary course of things does not happen if those who have its management or control use proper care, it affords reasonable evidence, in absence of explanation of defendant, that the incident happened because of want of care.

The aforesaid principle enunciated in Espiritu vs. Philippine Power and Development Co. is applicable in this case. The gasoline station, with all its appliances, equipment and employees, was under the control of appellees. A fire occurred therein and spread to and burned the neighboring houses. The person who knew or could have known how the fire started were the appellees and their employees, but they gave no explanation thereof whatsoever. It is fair and reasonable inference that the incident happened because of want of care.

The report by the police officer regarding the fire, as well as the statement of the driver of the gasoline tank wagon who was transferring the contents thereof into the underground storage when the fire broke out, strengthen the presumption of negligence. Verily, (1) the station is in a very busy district and pedestrians often pass through or mill around the premises; (2) the area is used as a car barn for around 10 taxicabs owned by Boquiren; (3) a store where people hang out and possibly smoke cigarettes is located one meter from the hole of the underground tank; and (4) the concrete walls adjoining the neighborhood are only 2 ½ meters high at most and cannot prevent the flames from leaping over it in case of fire. Decision REVERSED. Caltex liable. CEBU SHIPYARD V. WILLIAM LINES

Cebu Shipyard is in the business of repair and dry-docking. William Lines owns M/V Manila City, a luxury passenger-cargo. It caught fire and sank. It was insured with Prudential for 45M, and includes a clause covering loss or damage through negligence of ship repairmen. While the vessel was undergoing dry-docking and repairs, the master and crew stayed in the vessel. After it was transferred to the docking quay, it caught fire and sank. William filed a complaint against Cebu Shipping, alleged that it sank due to negligence. Prudential paid William, and now Prudential is claiming against Cebu Shipyard. Cebu’s version: While workers were rigging the steel plate (welding, cutting works) they noticed a smoke coming from the passageway. Ht noticed that smoke coming from the ceiling but didn’t see any fire. Prudential’s version: Chief mate saw workers of Cebu cropping out steel plates on Tank 12 using a welding torch. He saw that the insulation of the A/C was already burning. That afternoon, they saw smoke coming from Tank 12. ISSUE: W/N the CA erred in applying res ipsa loquitor against Cebu Shipping HELD: NO. The finding by the trial court and the Court of Appeals that M/V Manila City caught fire and sank by reason of the negligence of the workers of CSEW, when the said vessel was under the exclusive custody and control of CSEW is accordingly upheld. Under the circumstances of the case, the doctrine of res ipsa loquitur applies. For the doctrine of res ipsa loquitur to apply to a given situation, the following conditions must concur: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; and (2) that the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence.

The facts and evidence on record reveal the concurrence of said conditions in the case under scrutiny. First, the fire that occurred and consumed M/V Manila City would not have happened in the ordinary course of things if reasonable care and diligence had been exercised. In other words, some negligence must have occurred. Second, the agency charged with negligence, as found by the trial court and the Court of Appeals and as shown by the records, is the herein petitioner, Cebu Shipyard and Engineering Works, Inc., which had control over subject vessel when it was docked for annual repairs. So also, as found by the regional trial court, “other responsible causes, including the conduct of the plaintiff, and third persons, are sufficiently eliminated by the evidence.”

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What is more, in the present case the trial court found direct evidence to prove that the workers and/or employees of CSEW were remiss in their duty of exercising due diligence in the care of subject vessel. The direct evidence substantiates the conclusion that CSEW was really negligent. Thus, even without applying the doctrine of res ipsa loquitur, in light of the direct evidence on record, the ineluctable conclusion is that the petitioner, Cebu Shipyard and Engineering Works, Inc., was negligent and consequently liable for damages to the respondent, William Lines, Inc. DMCI V. CA (2001)

At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker of D. M. Consunji, Inc., fell 14

floors from the Renaissance Tower, Pasig City to his death. He was rushed to a hospital but was pronounced DOA at around 2:15 p.m. of the same date. Investigation disclosed that at the given time, date and place, while victim Jose A. Juego together with Jessie Jaluag and Delso Destajo [were] performing their work as carpenter[s] at the elevator core of the 14th floor of the Tower D, Renaissance Tower Building on board a platform made of channel beam (steel) measuring 4.8 meters by 2 meters wide with pinulid plywood flooring and cable wires attached to its four corners and hooked at the 5 ton chain block, when suddenly, the bolt or pin which was merely inserted to connect the chain block with the platform, got loose xxx causing the whole platform assembly and the victim to fall down to the basement of the elevator core, Tower D of the building under construction thereby crushing the victim of death, save his two (2) companions who luckily jumped out for safety.

It is thus manifest that Jose A. Juego was crushed to death when the platform he was then on board and performing work, fell. And the falling of the platform was due to the removal or getting loose of the pin which was merely inserted to the connecting points of the chain block and platform but without a safety lock.

Jose Juego’s widow, Maria, filed in the Regional Trial Court (RTC) of Pasig a complaint for damages against the deceased’s employer, D.M. Consunji, Inc.

ISSUE: W/N petitioner should be held liable; should res ipsa loquitur be applied in this case HELD: YES, petitioner is liable under res ipsa loquitur. The effect of the doctrine is to warrant a

presumption or inference that the mere fall of the elevator was a result of the person having charge of the instrumentality was negligent. As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence.

The concept of res ipsa loquitur has been explained in this wise: While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will not generally give rise to an inference or presumption that it was due to negligence on defendant’s part, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, or in one jurisdiction, that the thing or instrumentality speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence. x x x where it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused by the defendant’s want of care.

One of the theoretical based for the doctrine is its necessity, i.e., that necessary evidence is absent or not available. The res ipsa loquitur doctrine 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 and that the plaintiff has no such knowledge, and therefore is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to

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establish negligence. 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.

It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a plaintiff, without knowledge of the cause, reaches over to defendant who knows or should know the cause, for any explanation of care exercised by the defendant in respect of the matter of which the plaintiff complains. The res ipsa loquitur doctrine, another court has said, is a rule of necessity, in that it proceeds on the theory that under the peculiar circumstances in which the doctrine is applicable, it is within the power of the defendant to show that there was no negligence on his part, and direct proof of defendant’s negligence is beyond plaintiff’s power. Accordingly, some court add to the three prerequisites for the application of the res ipsa loquitur doctrine the further requirement that for the res ipsa loquitur doctrine to apply, it must appear that the injured party had no knowledge or means of knowledge as to the cause of the accident, or that the party to be charged with negligence has superior knowledge or opportunity for explanation of the accident.

The CA held that all the requisites of res ipsa loquitur are present in the case at bar: There is no dispute that appellee’s husband fell down from the 14th floor of a building to the basement while he was working with appellant’s construction project, resulting to his death. The construction site is within the exclusive control and management of appellant. It has a safety engineer, a project superintendent, a carpenter leadman and others who are in complete control of the situation therein. The circumstances of any accident that would occur therein are peculiarly within the knowledge of the appellant or its employees. On the other hand, the appellee is not in a position to know what caused the accident. Res ipsa loquitur is a rule of necessity and it applies where evidence is absent or not readily available, provided the following requisites are present: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence; and (3) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured. x x x.

No worker is going to fall from the 14th floor of a building to the basement while performing work in a construction site unless someone is negligent[;] thus, the first requisite for the application of the rule of res ipsa loquitur is present. As explained earlier, the construction site with all its paraphernalia and human resources that likely caused the injury is under the exclusive control and management of appellant[;] thus[,] the second requisite is also present. No contributory negligence was attributed to the appellee’s deceased husband[;] thus[,] the last requisite is also present. All the requisites for the application of the rule of res ipsa loquitur are present, thus a reasonable presumption or inference of appellant’s negligence arises. x x x.

Petitioner does not dispute the existence of the requisites for the application of res ipsa loquitur, but argues that the presumption or inference that it was negligent did not arise since it "proved that it exercised due care to avoid the accident which befell respondent’s husband."

Petitioner apparently misapprehends the procedural effect of the doctrine. As stated earlier, the defendant’s negligence is presumed or inferred when the plaintiff establishes the requisites for the application of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all the elements, the burden then shifts to defendant to explain. The presumption or inference may be rebutted or overcome by other evidence and, under appropriate circumstances disputable presumption, such as that of due care or innocence, may outweigh the inference. It is not for the defendant to explain or prove its defense to prevent the presumption or inference from arising. Evidence by the defendant of say, due care, comes into play only after the circumstances for the application of the doctrine has been established.

NPC V. CA (GR 124378; 2005)

NPC is a GOCC. Decree instructed them to build the Agus Regulation Dam at 702 meters elevation. Private respondents were owners of fishponds. All their improvements were washed away when the water level of the lake escalated and the lakeshore was flooded. They blamed the Agus Regulations Dam. They theorized that NPC failed to increase the outflow of water as the water level of the lake rose due to the heavy rains.

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They wrote to NPC’s VP, and sought assistance and compensation. They filed a complaint for damages before the RTC of Marawi. They alleged that the negligence of NPC’s employees to operate the Agus Regulation Dam were the proximate causes of the damage to their properties and livelihood. ISSUES: W/N the CA erred in affirming the RTC’s verdict that NPC is legally answerable for the damages HELD: No. NPC reneged on both duties (1. Maintain the maximum lake elevation at 702 meters, and 2. Build benchmarks to warn the inhabitants that cultivation of land below is forbidden). NPC ought to release more water to the Agus River to avoid flooding, but they failed to do so. The benchmarks itself could not be seen or reached because they were totally covered with water. Notably, despite the clear mandate of Memorandum Order No. 398, petitioner’s own witness, Principal Hydrologist Mama Manongguiring, testified that although the dam was built in 1978, the benchmarks were installed only in July and August of 1984 and that apparently, many had already worn-out, to be replaced only in October of 1986. In the absence of any clear explanation on what other factors could have explained the flooding in the neighboring properties of the dam, it is fair to reasonably infer that the incident happened because of want of care on the part of NPC to maintain the water level of the dam within the benchmarks at the maximum normal lake elevation of 702 meters. An application of the doctrine of res ipsa loquitur, the thing speaks for itself, comes to fore.[ Where the thing which causes injury is shown to be under the management of the defendant, and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in the absence of an explanation by the defendant, that the accident arose from want of care. PERLA COMPANIA V. SPS. SARANGAYA (2005)

In 1986, spouses Sarangaya erected a building known as “Super A Building” and was subdivided into

three doors, each of which was leased out. The two-storey residence of the Sarangayas was behind the second and third doors of the building. In 1988, petitioner Perla Compania de Seguros, Inc., through its branch manager and co-petitioner Bienvenido Pascual, entered into a contract of lease of the first door of the “Super A Building,” abutting the office of Matsushita.

Perla Compania renovated its rented space and divided it into two. The left side was converted into an office while the right was used by Pascual as a garage for a 1981 model 4-door Ford Cortina, a company-provided vehicle he used in covering the different towns within his area of supervision.

On July 7, 1988, Pascual left for San Fernando, Pampanga but did not bring the car with him. Three days later, he returned, and decided to “warm up” the car. When he pulled up the handbrake and switched on the ignition key, the engine made an “odd” sound and did not start. Thinking it was just the gasoline percolating into the engine, he again stepped on the accelerator and started the car. This revved the engine but petitioner again heard an unusual sound. He then saw a small flame coming out of the engine. Startled, he turned it off, alighted from the vehicle and started to push it out of the garage when suddenly, fire spewed out of its rear compartment and engulfed the whole garage. Pascual was trapped inside and suffered burns on his face, legs and arms.

Meanwhile, respondents were busy watching television when they heard two loud explosions. The smell of gasoline permeated the air and, in no time, fire spread inside their house, destroying all their belongings, furniture and appliances.

The city fire marshall conducted an investigation and thereafter submitted a report to the provincial fire marshall. He concluded that the fire was “accidental.” The report also disclosed that petitioner-corporation had no fire permit as required by law.

Based on the same report, a criminal complaint for “Reckless Imprudence Resulting to (sic) Damage in (sic) Property” was filed against petitioner Pascual. On the other hand, Perla Compania was asked to pay the amount of P7,992,350, inclusive of the value of the commercial building. At the prosecutor’s office, petitioner Pascual moved for the withdrawal of the complaint, which was granted.

Respondents (spouses Sarangaya) later on filed a civil complaint based on quasidelict against petitioners for a “sum of money and damages,” alleging that Pascual acted with gross negligence while

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petitioner-corporation lacked the required diligence in the selection and supervision of Pascual as its employee.

During the trial, respondents presented witnesses who testified that a few days before the incident, Pascual was seen buying gasoline in a container from a nearby gas station. He then placed the container in the rear compartment of the car.

In his answer, Pascual insisted that the fire was purely an accident, a caso fortuito, hence, he was not liable for damages. He also denied putting a container of gasoline in the car’s rear compartment. For its part, Perla Compania refused liability for the accident on the ground that it exercised due diligence of a good father of a family in the selection and supervision of Pascual as its branch manager.

ISSUES :1. W/N Pascual liable under res ipsa loquitur doctrine (Pascual’s argument: It was a fortuitous

event) 2. W/N Perla Compania liable under tort (Perla Compania’s argument: We exercised due diligence in selecting Pascual)

HELD: 1. YES, Pascual liable under res ipsa loquitur doctrine . Res ipsa loquitur is a Latin phrase which

literally means “the thing or the transaction speaks for itself.” It relates to the fact of an injury that sets out an inference to the cause thereof or establishes the plaintiff’s prima facie case. The doctrine rests on inference and not on presumption. The facts of the occurrence warrant the supposition of negligence and they furnish circumstantial evidence of negligence when direct evidence is lacking.

The doctrine is based on the theory that the defendant either knows the cause of the accident or has the best opportunity of ascertaining it and the plaintiff, having no knowledge thereof, is compelled to allege negligence in general terms. In such instance, the plaintiff relies on proof of the happening of the accident alone to establish negligence.

The doctrine provides a means by which a plaintiff can pin liability on a defendant who, if innocent, should be able to explain the care he exercised to prevent the incident complained of. Thus, it is the defendant’s responsibility to show that there was no negligence on his part.

To sustain the allegation of negligence based on the doctrine of res ipsa loquitur, the following requisites must concur: 1) the accident is of a kind which does not ordinarily occur unless someone is negligent; 2) the cause of the injury was under the exclusive control of the person in charge and 3) the injury suffered must not have been due to any voluntary action or contribution on the part of the person injured.

Under the first requisite, the occurrence must be one that does not ordinarily occur unless there is negligence. “Ordinary” refers to the usual course of events. Flames spewing out of a car engine, when it is switched on, is obviously not a normal event. Neither does an explosion usually occur when a car engine is revved. Hence, in this case, without any direct evidence as to the cause of the accident, the doctrine of res ipsa loquitur comes into play and, from it, we draw the inference that based on the evidence at hand, someone was in fact negligent and responsible for the accident.

The test to determine the existence of negligence in a particular case may be stated as follows: did the defendant in committing the alleged negligent act, use reasonable care and caution which an ordinarily prudent person in the same situation would have employed? If not, then he is guilty of negligence.

Here, the fact that Pascual, as the caretaker of the car, failed to submit any proof that he had it periodically checked (as its year-model and condition required) revealed his negligence. A prudent man should have known that a 14-year-old car, constantly used in provincial trips, was definitely prone to damage and other defects. For failing to prove care and diligence in the maintenance of the vehicle, the necessary inference was that Pascual had been negligent in the upkeep of the car.

The exempting circumstance of caso fortuito may be availed only when: (a) the cause of the unforeseen and unexpected occurrence was independent of the human will; (b) it was impossible to foresee the event which constituted the caso fortuito or, if it could be foreseen, it was impossible to avoid; (c) the occurrence must be such as to render it impossible to perform an obligation in a normal manner and (d) the person tasked to perform the obligation must not have participated in any course of conduct that aggravated the accident.[20]

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In fine, human agency must be entirely excluded as the proximate cause or contributory cause of the injury or loss. In a vehicular accident, for example, a mechanical defect will not release the defendant from liability if it is shown that the accident could have been prevented had he properly maintained and taken good care of the vehicle.

The circumstances on record do not support the defense of Pascual. Clearly, there was no caso fortuito because of his want of care and prudence in maintaining the car.

Under the second requisite, the instrumentality or agency that triggered the occurrence must be one that falls under the exclusive control of the person in charge thereof. In this case, the car where the fire originated was under the control of Pascual. Being its caretaker, he alone had the responsibility to maintain it and ensure its proper functioning. No other person, not even the respondents, was charged with that obligation except him.

Where the circumstances which caused the accident are shown to have been under the management or control of a certain person and, in the normal course of events, the incident would not have happened had that person used proper care, the inference is that it occurred because of lack of such care. The burden of evidence is thus shifted to defendant to establish that he observed all that was necessary to prevent the accident from happening. In this aspect, Pascual utterly failed.

Under the third requisite, there is nothing in the records to show that respondents contributed to the incident. They had no access to the car and had no responsibility regarding its maintenance even if it was parked in a building they owned.

2. YES, COMPANIA LIABLE UNDER TORT. In the selection of prospective employees, employers are

required to examine them as to their qualifications, experience and service records.[25] While the petitioner-corporation does not appear to have erred in considering Pascual for his position, its lack of supervision over him made it jointly and solidarily liable for the fire.

In the supervision of employees, the employer must formulate standard operating procedures, monitor their implementation and impose disciplinary measures for the breach thereof. o fend off vicarious liability, employers must submit concrete proof, including documentary evidence, that they complied with everything that was incumbent on them.

Here, petitioner-corporation’s evidence hardly included any rule or regulation that Pascual should have observed in performing his functions. It also did not have any guidelines for the maintenance and upkeep of company property like the vehicle that caught fire. Petitioner-corporation did not require periodic reports on or inventories of its properties either. Based on these circumstances, petitioner-corporation clearly did not exert effort to be apprised of the condition of Pascual’s car or its serviceability.

E. DEFENSES

Two Kinds of Defenses: (PC) (1) Partial Defense – mitigate liability (2) Complete Defense – completely bar recovery

Defenses that Negate Liability for Negligence: a) Plaintiffs negligence is proximate cause of injury b) Comparative v Contributory Negligence c) Assumption of Risk d) Doctrine of Last Clear Chance e) Prescription f) Force Majuere g) Diligence h) Mistake and Waiver i) Emergency or Sudden Peril Doctrine

1. PLAINTIFF’S NEGLIGENCE IS PROXIMATE CAUSE OF INJURY - Must be the immediate and proximate cause of his injury

Art. 2179. When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. PLDT vs. CA (1989)

The Esteban’s jeep ran over a mound of earth and fell into an open trench, an excavation undertaken by PLDT for the installation of its underground conduit system. Esteban failed to notice the open trench which

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was left uncovered because of the darkness and the lack of any warning light or signs. The Estebans allegedly sustained injuries.

PLDT, denies liability on the contention that the injuries sustained by respondent spouses were the result of their own negligence and that the entity which should be held responsible is Barte an independent contractor which undertook the construction of the manhole. LC ruled in favor of Estebans. However, the CA found that that the relationship of Barte and PLDT should be viewed in the light of the contract between them and, under the independent contractor rule, PLDT is not liable for the acts of an independent contractor. Still, CA affirmed LC decision.

ISSUE: W/N PLDT is liable for the injuries sustained by the Estebans. HELD: NO. The accident which befell the Estebans was due to the lack of diligence of respondent

Antonio Esteban and was not imputable to negligent omission on the part of petitioner PLDT. The accident was not due to the absence of warning signs, but to the unexplained abrupt swerving of the jeep from the inside lane. That may explain plaintiff husband's insistence that he did not see the ACCIDENT MOUND for which reason he ran into it. The jeep was not running at 25 kilometers an hour. At that speed, he could have braked the vehicle the moment it struck the ACCIDENT MOUND. The jeep would not have climbed the ACCIDENT MOUND several feet as indicated by the tiremarks. The jeep must have been running quite fast.

Plaintiff-husband had not exercised the diligence of a good father of a family to avoid the accident. The negligence of Antonio Esteban was not only contributory to his injuries and those of his wife but goes to the very cause of the occurrence of the accident, as one of its determining factors, and thereby precludes their right to recover damages The presence of warning signs could not have completely prevented the accident; the only purpose of said signs was to inform and warn the public of the presence of excavations on the site. The private respondents already knew of the presence of said excavations because they passed that street almost everyday. It was not the lack of knowledge of these excavations which caused the jeep of respondents to fall into the excavation but the unexplained sudden swerving of the jeep from the inside lane towards the accident mound. Furthermore, Antonio Esteban had the last clear chance or opportunity to avoid the accident. A person claiming damages for the negligence of another has the burden of proving the existence of such fault or negligence causative thereof. The facts constitutive of negligence must be affirmatively established by competent evidence. Whosoever relies on negligence for his cause of action has the burden in the first instance of proving the existence of the same if contested, otherwise his action must fail.

KIM V. PHILIPPINE AERIAL TAXI (1933)

Teh Le Kim bought a passenger ticket for a flight from Manila to Iloilo in one of Philippine Aerial Taxi’s

planes. He had to wait to take flight however since the engine of Plane 1 was not working satisfactorily. He saw how it was being tested, by turning the propeller repeatedly to start it and how the man who did it ran away from it each time in order not to be caught by the said propeller. When Plane 2 arrived, it was decided that Kim would take that plane instead. They were finally carried from the beach to the plane, strapped in their seats, shown how to work out the straps in case of accident and were instructed further not to touch anything in the plane.

Unfortunately, the plane landed on the waters in Guimaras and was taxied toward the beach until its pontoons struck bottom for it to stop. The pilot shut off the gasoline pipe but the engine was continued to function so as to drain all the gasoline. This was necessary as per aviation standards to avoid danger of fire if the pipes remained full of gasoline. The passengers had to wait until the propeller stopped before they could be discharged to the shore via bancas. When the pilot, a man of 14 years of experience, observed that a banca was approaching rapidly towards the plane, he kept busy signalling the boatman to keep distance so as to avoid collision when suddenly he heard the propeller strike something. The propeller was immediately switched off and found Kim badly injured from the revolving propeller. Apparently, Kim unfastened the straps around him and went down on his own, walking toward the propeller despite calls from others to stop. Kim was so injured that he had to have his arms amputated.

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ISSUE: W/N Philippine Aerial has complied with its contractual obligation to carry Teh Le Kim safe and

sound to his destination. HELD: By sheer common sense, Kim ought to know that a propeller, be it that of a ship or of an

aeroplane, is dangerous while in motion and that to approach it is to run the risk of being caught and injured thereby. He ought to know furthermore that inasmuch as the plane was on the water, he had to wait for a banca to take him ashore. Notwithstanding the warning signals, Kim, not being a man of ordinary prudence, hastily left the cabin of the plane and walked directly into the revolving propeller. Kim acted with reckless negligence in approaching the propeller while it was still in motion, and when the banca was not yet in a position to take him. That Kim’s negligence alone was the direct cause of the accident, is so clear that it is not necessary to cite authoritative opinions to support the conclusion that the injury to his arm and the subsequent amputation were due entirely and exclusively to his own imprudence and not the slightest negligence attributable to Aerial Taxi. He alone should suffer the consequences of his act.

AMERICAN EXPRESS V. CORDERO (2005)

While on a holiday trip in Hong Kong with the family, Noel Cordero handed the sales clerk of Watson’s Shop his American Express (AEII) extension charge card to pay for the chocolates he wanted to purchase. The sales clerk verified the card by calling the AEII’s Office in Hong Kong. Moments later, the store manager came forward and informed Cordero that she had to confiscate the card and thereupon, she cut the card in half with a pair of scissors causing him embarrassment and humiliation in front of his family and other customers.

Apparently, a person in Hong Kong attempted to use a card with the same number. The Hong Kong branch called up Cordero and after determining that he was in Manila, placed his card in the “Inspect Airwarn Support System” utilized to prevent fraudulent use of their cards. Once a card suspected of unauthorized use is placed in the system, the person to whom the card is tendered must verify the identity of the holder. If the true identity of the card owner is established, the card is honored and the charges are approved. Otherwise, the card is revoked or confiscated.

When the Watson’s sales clerk called up the Hong Kong Office, its representative said he wants to talk to Cordero to verify his identity but he refused. His card was therefore confiscated since American Express was unable to establish the identity of the cardholder.

Cordero filed with the RTC a complaint for damages against American Express. Cordero’s main contention was Art. 2176 (Quasi Delict).

RTC & CA ruled in favour of Cordero holding that American Express’ failure to inform Cordero that a person in Hong Kong attempted to use his card’s number is the proximate cause of the confiscation and cutting of the card which exposed him to humiliation.

ISSUE: W/N AEII’s failure to inform Cordero that a person in Hong Kong attempted to use his card’s

number is the proximate cause of the confiscation and cutting. HELD: NO. To constitute quasi-delict, the fault or negligence must be the proximate cause of the damage

or injury suffered by the plaintiff. Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury and without which the result would not have occurred. Proximate cause is determined by the facts of each case upon mixed considerations of logic, common sense, policy and precedent.

Cordero could have used his card if only he talked to AEII’s representative to verify his identity, allowing the company to determine that he is indeed the true holder of the card. No negligence which breaches the contract can be attributed to petitioner. If at all, the cause of respondent’s humiliation and embarrassment was his refusal to talk to petitioner’s representative. AEII was not required under its policies to advise cardholders their card have been put under the INSPECT support system since so long as the cardholder can present an identification card of his membership, he is allowed to use the card. Cordero refused to talk to any representative of AEII despite their requests. AEII could not prove

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then that he is really the real card holder. Pursuant to Cordero’s membership agreement with AEII, it can revoke respondent’s card without notice. There was no negligence on the part of petitioner and that, therefore, it cannot be held liable to respondent for damages.

2. COMPARATIVE V. CONTRIBUTORY NEGLIGENCE - What the law applies on this jurisdiction is the contributory negligence recognized under Article 2179 of the NCC which allows for the mitigation of liability and is aptly called in common law comparative negligence. A partial kind of defense, which serves to reduce evidence.

A. COMPARATIVE NEGLIGENCE UMALI V. BACANI (1976)

A storm with strong rain hit Pangasinan in the afternoon and lasted until midnight. During the storm, the banana plants standing on an elevated ground along the road and near the transmission line of the Alcala Electric Plant were blown down and fell on the electric wire. As a result, the live electric wire was cut, one end of which was left hanging on the electric post and the other fell to the ground under the fallen banana plants. On the following morning, the barrio captain who was passing by saw the broken electric wire and so he warned the people in the place not to go near the wire for they might get hurt. He also saw a laborer of the Alcala Electric Plant near the place and notified him right then and there of the broken line and asked him to fix it, but the latter told the barrio captain that he could not do it but that he was going to look for the lineman to fix it. Sometime after the barrio captain and labourer left the place, a 3 year old boy, whose house is just on the opposite side of the road, went to the place where the broken line wire was and got in contact with it. The boy was electrocuted and he subsequently died. It was only after the electrocution of the boy that the broken wire was fixed on the same morning by the lineman.

ISSUES: W/N the Alcala Electric Company can be liable for TORT. *Umali. As owner and manager of Alcala Electric: “I am not liable under the concept of quasi-delict or

tort because the proximate cause of the boy's electrocution could not be due to any negligence on my part, but rather to a fortuitous event-the storm that caused the banana plants to fall and cut the electric line. There is absence of negligence on the part of my laborer who tried to have the line repaired. The parents of the child are negligent in allowing him to leave his house during that time.”

HELD: Alcala Electric is LIABLE under TORT. First, by the very evidence of the defendant, there were

big and tall banana plants at the place of the incident standing on an elevated ground which were about 30 feet high and which were higher than the electric post supporting the electric line, and yet the employees of the defendant who, with ordinary foresight, could have easily seen that even in case of moderate winds the electric line would be endangered by banana plants being blown down, did not even take the necessary precaution to eliminate that source of danger to the electric line.

Second, even after the employees of the Alcala Electric Plant were already aware of the possible damage the storm could have caused their electric lines, thus becoming a possible threat to life and property, they did not cut off from the plant the flow of electricity along the lines, an act they could have easily done pending inspection of the wires to see if they had been cut.

Third, the labourer was negligent because even if he was already made aware of the live cut wire, he did not have the foresight to realize that the same posed a danger to life and property, and that he should have taken the necessary precaution to prevent anybody from approaching the live wire; instead he left the premises because what was foremost in his mind was the repair of the line, obviously forgetting that if left unattended to it could endanger life and property.

On defendants' argument that the proximate cause of the victim's death could be attributed to the parents' negligence in allowing a child of tender age to go out of the house alone, We could readily see that because of the aforementioned series of negligence on the part of defendants' employees resulting in a live wire lying on the premises without any visible warning of its lethal character, anybody, even a responsible grown up or not necessarily an innocent child, could have met the same fate that befell the victim. It may be

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true, as the lower Court found out, that the contributory negligence of the victim's parents in not properly taking care of the child, which enabled him to leave the house alone on the morning of the incident and go to a nearby place cut wire was very near the house (where victim was living) where the fatal fallen wire electrocuted him, might mitigate respondent's liability, but we cannot agree with petitioner's theory that the parents' negligence constituted the proximate cause of the victim's death because the real proximate cause was the fallen live wire which posed a threat to life and property on that morning due to the series of negligence adverted to above committed by defendants' employees and which could have killed any other person who might by accident get into contact with it. Stated otherwise, even if the child was allowed to leave the house unattended due to the parents' negligence, he would not have died that morning where it not for the cut live wire he accidentally touched.

Art. 2179 of the Civil Code provides that if the negligence of the plaintiff (parents of the victim in this case) was only contributory, the immediate and proximate cause of the injury being the defendants' lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. This law may be availed of by the petitioner but does not exempt him from liability. Petitioner's liability for injury caused by his employees negligence is well defined in par. 4, of Article 2180 of the Civil Code, which states:

The owner and manager of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on tile occasion of their functions.

The negligence of the employee is presumed to be the negligence of the employer because the employer is supposed to exercise supervision over the work of the employees. This liability of the employer is primary and direct. In fact the proper defense for the employer to raise so that he may escape liability is to prove that he exercised, the diligence of the good father of the family to prevent damage not only in the selection of his employees but also in adequately supervising them over their work. This defense was not adequately proven as found by the trial Court, and We do not find any sufficient reason to deviate from its finding.

PHOENIX CONSTRUCTION V. IAC (1987)

Early morning at about 1:30am, Leonardo Dionisio was on his way home from a cocktails-and-dinner meeting with his boss where he had taken "a shot or two" of liquor. Dionisio was driving his Volkswagen car and had just crossed the intersection of General Lacuna and General Santos Streets at Bangkal, Makati, not far from his home, and was proceeding down General Lacuna Street, when his car headlights (in his allegation) suddenly failed. He switched his headlights on "bright" and thereupon he saw a Ford dump truck looming some 2-1/2 meters away from his car. The dump truck, owned by and registered in the name of petitioner Phoenix Construction Inc., was parked on the right hand side of General Lacuna Street facing the oncoming traffic. The dump truck was parked askew (not parallel to the street curb) in such a manner as to stick out onto the street, partly blocking the way of oncoming traffic. There were no lights nor any so-called "early warning" reflector devices set anywhere near the dump truck, front or rear. The dump truck had earlier that evening been driven home by Carbonel, its regular driver, with the permission of his employer Phoenix, in view of work scheduled to be carried out early the following morning. Dionisio claimed that he tried to avoid a collision by swerving his car to the left but it was too late and his car smashed into the dump truck. As a result of the collision, Dionisio suffered some physical injuries including some permanent facial scars, a "nervous breakdown" and loss of two gold bridge dentures.

Dionisio commenced an action for damages which rendered judgment in his favor. CA affirmed with modification as to the amount of damages awarded.

ISSUES: W/N Phoenix should be held liable for the damage incurred by Dionisio, notwithstanding the

allegation that the latter had no curfew pass and thus drove speedily with his headlights off? HELD: YES. The collision between the dump truck and the Dionisio's car would in all probability not

have occurred had the dump truck not been parked askew without any warning lights or reflector devices. The improper parking of the dump truck created an unreasonable risk of injury for anyone driving down

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General Lacuna Street and for having so created this risk, the truck driver must be held responsible. Dionisio's negligence was not of an independent and overpowering nature as to cut, as it were, the chain of causation in fact between the improper parking of the dump truck and the accident, nor to sever the juris vinculum of liability.

We hold that Dionisio's negligence was "only contributory," that the "immediate and proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently respondent Dionisio may recover damages though such damages are subject to mitigation by the courts (Art. 2179 Civil Code of the Philippines)

Petitioner Carbonel's proven negligence creates a presumption of negligence on the part of his employer Phoenix in supervising its employees properly and adequately. The respondent appellate court in effect found, correctly in our opinion, that Phoenix was not able to overcome this presumption of negligence.

Turning to the award of damages and taking into account the comparative negligence of private respondent Dionisio on one hand and petitioners Carbonel and Phoenix upon the other hand, we believe that the demands of substantial justice are satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the damages awarded by the respondent appellate court, except the award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by private respondent Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and Phoenix who shall be solidarity liable therefor to the former. The award of exemplary damages and attorney's fees and costs shall be borne exclusively by the petitioners. Phoenix is of course entitled to reimbursement from Carbonel. We see no sufficient reason for disturbing the reduced award of damages made by the respondent appellate court.

PCI BANK V. CA (2001)

This case is composed of three consolidated petitions involving several checks, payable to the Bureau of Internal Revenue, but was embezzled allegedly by an organized syndicate.

I. G. R. Nos. 121413 and 121479 In 1977, plaintiff Ford issued a Citibank check amounting to P4M in favor of the CIR for the payment of

manufacturer’s taxes. The check was deposited with defendant IBAA (now PCIB), subsequently cleared the Central Bank, and paid by Citibank to IBAA. The proceeds never reached BIR, so Ford was compelled to make a 2nd payment. PCIB refused to reimburse Ford, and so the latter filed a complaint. An investigation revealed that the check was recalled by Rivera, the general ledger accountant of Ford, and was replaced by a manager’s check. Alleged members of a syndicate deposited the two manager’s checks with Pacific Banking Corporation. Ford filed a third party complaint against Rivera and PBC. The case against PBC was dismissed. The case against Rivera was likewise dismissed because summons could not be served. The trial court held Citibank and PCIB jointly and severally liable to Ford, but the Court of Appeals only held PCIB liable.

II. G. R. No. 128604 Ford drew two checks in favor of the CIR. Both are crossed checks payable to payee’s account only. The

checks never reached BIR, so plaintiff was compelled to make second payments. Plaintiff instituted an action for recovery against PCIB and Citibank.

On investigation of NBI, the modus operandi was discovered. Rivera made the checks but instead of delivering them to BIR, passed it to Castro, who was the manager of PCIB San Andres. Castro opened a checking account in the name of a fictitious person “Reynaldo Reyes”. Castro deposited a worthless Bank of America check with the same amount as that issued by Ford. While being routed to the Central Bank for clearing, the worthless check was replaced by the genuine one from Ford.

The trial court absolved PCIB and held Citibank liable, which decision was affirmed in toto by the Court of Appeals.

ISSUES: (1) Whether there is contributory negligence on the part of Ford

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(2) W/N Ford has the right to recover from the collecting bank (PCIBank) and the drawee bank (Citibank) the value of the checks intended as payment to the Commissioner of Internal Revenue?

HELD: (1) The general rule is that if the master is injured by the negligence of a third person and by the

concuring contributory negligence of his own servant or agent, the latter's negligence is imputed to his superior and will defeat the superior's action against the third person, assuming, of course that the contributory negligence was the proximate cause of the injury of which complaint is made. As defined, proximate cause is that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause produces the injury and without the result would not have occurred. It appears that although the employees of Ford initiated the transactions attributable to an organized syndicate, in our view, their actions were not the proximate cause of encashing the checks payable to the CIR. The degree of Ford's negligence, if any, could not be characterized as the proximate cause of the injury to the parties. The mere fact that the forgery was committed by a drawer-payor's confidential employee or agent, who by virtue of his position had unusual facilities for perpertrating the fraud and imposing the forged paper upon the bank, does not entitle the bank tos hift the loss to the drawer-payor, in the absence of some circumstance raising estoppel against the drawer. This rule likewise applies to the checks fraudulently negotiated or diverted by the confidential employees who hold them in their possession.

(2) We have to scrutinize, separately, PCIBank's share of negligence when the syndicate achieved its ultimate agenda of stealing the proceeds of these checks.

a. G. R. Nos. 121413 and 121479: On record, PCIBank failed to verify the authority of Mr. Rivera to negotiate the checks. The neglect of PCIBank employees to verify whether his letter requesting for the replacement of the Citibank Check No. SN-04867 was duly authorized, showed lack of care and prudence required in the circumstances. Furthermore, it was admitted that PCIBank is authorized to collect the payment of taxpayers in behalf of the BIR. As an agent of BIR, PCIBank is duty bound to consult its principal regarding the unwarranted instructions given by the payor or its agent. It is a well-settled rule that the relationship between the payee or holder of commercial paper and the bank to which it is sent for collection is, in the absence of an argreement to the contrary, that of principal and agent. A bank which receives such paper for collection is the agent of the payee or holder.

Indeed, the crossing of the check with the phrase "Payee's Account Only," is a warning that the check should be deposited only in the account of the CIR. Thus, it is the duty of the collecting bank PCIBank to ascertain that the check be deposited in payee's account only. Therefore, it is the collecting bank (PCIBank) which is bound to scrutinize the check and to know its depositors before it could make the clearing indorsement "all prior indorsements and/or lack of indorsement guaranteed".

Lastly, banking business requires that the one who first cashes and negotiates the check must take some precautions to learn whether or not it is genuine. And if the one cashing the check through indifference or other circumstance assists the forger in committing the fraud, he should not be permitted to retain the proceeds of the check from the drawee whose sole fault was that it did not discover the forgery or the defect in the title of the person negotiating the instrument before paying the check. For this reason, a bank which cashes a check drawn upon another bank, without requiring proof as to the identity of persons presenting it, or making inquiries with regard to them, cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards diverted to the hands of a third party. In such cases the drawee bank has a right to believe that the cashing bank (or the collecting bank) had, by the usual proper investigation, satisfied itself of the authenticity of the negotiation of the checks. Thus, one who encashed a check which had been forged or diverted and in turn received payment thereon from the drawee, is guilty of negligence which proximately contributed to the success of the fraud practiced on the drawee bank. The latter may recover from the holder the money paid on the check.

b. G. R. No. 128604: In this case, there was no evidence presented confirming the conscious

participation of PCIBank in the embezzlement. As a general rule, however, a banking corporation is liable for the wrongful or tortuous acts and declarations of its officers or agents within the course and scope of their employment. A bank will be held liable for the negligence of its officers or agents when acting within the course and scope of their employment. It may be liable for the tortuous acts of its officers even as regards that species of tort of which malice is an essential element. In this case, we find a situation where

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the PCIBank appears also to be the victim of the scheme hatched by a syndicate in which its own management employees had participated. But in this case, responsibility for negligence does not lie on PCIBank's shoulders alone.

Citibank failed to notice and verify the absence of the clearing stamps. For this reason, Citibank had indeed failed to perform what was incumbent upon it, which is to ensure that the amount of the checks should be paid only to its designated payee. The point is that as a business affected with public interest and because of the nature of its functions, the bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. Thus, invoking the doctrine of comparative negligence, we are of the view that both PCIBank and Citibank failed in their respective obligations and both were negligent in the selection and supervision of their employees resulting in the encashment of Citibank Check Nos. SN 10597 AND 16508. Thus, we are constrained to hold them equally liable for the loss of the proceeds of said checks issued by Ford in favor of the CIR. ESTACION V. BERNARDO (2006)

Noe was going home to Dumaguete from Cebu by boarding a Ford Fiera jeepney driven by Quinquillera and owned by Bandoquillo. He was seated on the extension seat at the center of the fiera. From San Jose, an old woman wanted to ride so Noe offered his seat and hung/stood on the left rear carrier of the vehicle (sumabit). The fiera slowed down and stopped to pick up more passengers. Suddenly, an Isuzu cargo truck owned by petitioner Estacion and driven by Gerosano, which was travelling in the same direction, hit the rear portion of the jeepney. The fiera crushed Noe’s legs and feet, he was brought to the hospital where his lower left leg was amputated. Police report showed that there were 10 more who were injured by the accident.

Noe and his guardian filed w the RTC a complaint for damages arising from quasi-delict against petitioner as owner of the truck and his driver. RTC ruled that Gerosano was negligent and it was the direct and proximate cause of the incident. It also held petitioner liable as employer. CA affirmed in toto the RTC.

ISSUES: (1) W/N Petitioner is liable? (2) W/N Noe was guilty of contributory negligence? HELD: (1) YES. From the way the truck reacted to the application of the brakes, it can be shown that

Gerosano was driving at a fast speed because the brakes skidded a lengthy 48 feet as shown in the sketch of the police. There was also only one tire mark which meant that the brakes of the truck were not aligned properly, otherwise, there would have been 2 tire marks. It is the negligent act of petitioner’s driver of driving the cargo truck at a fast speed coupled with faulty brakes which was the proximate cause of Noe’s injury. As employer of Gerosano, petitioner is primarily and solidarily liable for the quasidelict committed by the former. He is presumed to be negligent in the selection of his employee which petitioner failed to overcome. He failed to show that he examined the driver as to his qualifications, experience and records.

(2) YES. NOE IS GUILTY OF CONTRIBUTORY NEGLIGENCE BY STANDING AT THE REAR PORTION OF THE JEEP. Contributory Negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. Noe’s act of standing on the left rear portion showed his lack of ordinary care and foresight that such act could cause him harm or put his life in danger. To hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body. Jjeepney driver was also negligent because there was overloading which is in violation of traffic rules and regulations. He also allowed Noe to stand on the left rear of his jeep. There is also a presumption of negligence on the part of the owner of the jeep which she did not rebut. 20-80 ratio distribution of damages.

B. CONTRIBUTORY NEGLIGENCE – conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection. (Estacion v. Bernardo)

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-to hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body (Estacion) RAKES V. ATLANTIC GULF (1907)

Plaintiff Rakes was one of the laborers of Atlantic Gulf, transporting iron rails from the barge in the harbor to Atlantic’s yard. Piled lengthwise on 2 hand cars were 7 rails such that the ends of the rails protruded beyond the cars. The rails lay upon 2 crosspieces or sills secured to the cars but without side guards to prevent them from slipping off. Near the water’s edge, the tracks sagged, the tie broke, the rails slid off and caught Rakes, resulting in a broken leg which was subsequently amputated.

Plaintiff alleges that defendant was negligent in not providing side guards on the cars, and that the tracks had no fishplates. Defendant admitted absence of side guards and failed to effectively overcome the plaintiff’s proof that no fishplates existed. The sagging of the tracks was found to have been caused by the water of the bay raised by a recent typhoon. It wasn’t proved that the company inspected the track after the typhoon or that it had any proper system of inspecting.

ISSUE & ARGUMENTS W/N plaintiff was guilty of contributory negligence to exonerate defendant from

liability. HELD: No. The allegation that plaintiff was at fault for continuing his work despite notice of the sagging

of the track constituted contributory negligence that exonerate defendant is untenable. Nothing in the evidence shows that plaintiff did or could see the displaced timber underneath. Plaintiff had worked on the job for less than two days. Where plaintiff contributed to the principal occurrence, as one of the determining factors, he cannot recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he may recover the amount that the defendant responsible for the event should pay for such injury, less the sum deemed a suitable equivalent for his own imprudence.

SEPARATE OPINION WILLARD AND CARSON [dissent] -the negligence of the defendant alone was insufficient to cause the accident—it also required the negligence of the plaintiff. Because of this, plaintiff should not be afforded relief.

TAYLOR V. MANILA ELECTRIC RAILROAD AND LIGHT CO. – (discussed) fulminating caps PBCOM V. CA (1997)

Rommel's Marketing Corporation (RMC), represented by its President and General Manager Romeo

Lipana, filed a complaint to recover from the former Philippine Bank of Commerce (PBC), now absorbed by the Philippine Commercial International Bank, P304, 979.74 representing various deposits RMC made in its current account with said bank. The amount was not credited to RMC’s account but was instead deposited to the account of one Bienvenido Cotas.

RMC maintained two separate current accounts with the Pasig Branch of PBC in connection with its business of selling appliances. From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana claims to have entrusted RMC funds in the form of cash totalling P304,979.74 to his secretary, Irene Yabut, for the purpose of depositing said funds in the current accounts of RMC with PBC. It turned out, however, that these deposits, on all occasions, were not credited to RMC's account but were instead deposited to Account No. 53-01734-7 of Yabut's husband, Bienvenido Cotas who likewise maintains an account with the same bank. - During this period, petitioner bank had been regularly furnishing private respondent with monthly statements showing its current accounts balances. Unfortunately, it had never been the practice of Romeo Lipana to check these monthly statements of account reposing complete trust and confidence on petitioner bank. Irene Yabut would accomplish two copies of the deposit slip, an original and a duplicate. The original showed the name of her husband as depositor and his current account number. On the duplicate copy was written the account number of her husband but the name of the account holder was left blank. PBC's teller, Azucena Mabayad, would, however, validate and stamp both the original and the duplicate of these deposit

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slips retaining only the original copy despite the lack of information on the duplicate slip. The second copy was kept by Irene Yabut allegedly for record purposes. After validation, Yabut would then fill up the name of RMC in the space left blank in the duplicate copy and change the account number written thereon, which is that of her husband's, and make it appear to be RMC's account number. With the daily remittance records also prepared by Ms. Yabut and submitted to private respondent RMC together with the validated duplicate slips with the latter's name and account number, she made her company believe that all the while the amounts she deposited were being credited to its account when, in truth and in fact, they were being deposited by her and credited by the petitioner bank in the account of Cotas.

Upon discovery of the loss of its funds, RMC demanded from petitioner bank the return of its money, but as its demand went unheeded, it filed a collection suit before RTC Pasig, which found petitioner bank negligent and ordered the bank and Mabayad to pay RMC jointly and severally P304,979.72, plus damages, attornet’s fees and costs of suit. CA affirmed, but modified the award of damages.

ISSUE: Whether the proximate cause of the loss, to the tune of P304,979.74, suffered by the private

respondent RMC is petitioner bank's negligence or that of private respondent's. HELD: It was the negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner bank

in the selection and supervision of its bank teller, which was the proximate cause of the loss suffered by the private respondent.

There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff.

Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would do.

Picart v. Smith. The test by which to determine the existence of negligence in a particular case: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case is not determined by reference to the personal judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and determines liability by that.

The bank's teller, Ms. Azucena Mabayad, was negligent in validating, officially stamping and signing all the deposit slips prepared and presented by Ms. Yabut, despite the glaring fact that the duplicate copy was not completely accomplished contrary to the selfimposed procedure of the bank with respect to the proper validation of deposit slips, original or duplicate.

Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself in its lackadaisical selection and supervision of Ms. Mabayad.

Proximate cause is determined on the facts of each case upon mixed considerations of logic, common sense, policy and precedent. Proximate cause is "that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. . . ." In this case, absent the act of Ms. Mabayad in negligently validating the incomplete duplicate copy of the deposit slip, Ms. Irene Yabut would not have the facility with which to perpetrate her fraudulent scheme with impunity.

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

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could have avoided the impending harm by the exercise of due diligence. Here, assuming that private respondent RMC was negligent in entrusting cash to a dishonest employee, thus providing the latter with the opportunity to defraud the company, as advanced by the petitioner, yet it cannot be denied that the petitioner bank, thru its teller, had the last clear opportunity to avert the injury incurred by its client, simply by faithfully observing their self-imposed validation procedure.

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

It cannot be denied that private respondent was likewise negligent in not checking its monthly statements of account. Had it done so, the company would have been alerted to the series of frauds being committed against RMC by its secretary. The damage would definitely not have ballooned to such an amount if only RMC, particularly Romeo Lipana, had exercised even a little vigilance in their financial affairs. This omission by RMC amounts to contributory negligence which shall mitigate the damages that may be awarded to the private respondent under Article 2179 of the New Civil Code.

Disposition: CA decision modified. The demands of substantial justice are satisfied by allocating the damage on a 60-40 ratio. Thus, 40% of the damage awarded by the respondent appellate court, except the award of P25,000.00 attorney's fees, shall be borne by private respondent RMC; only the balance of 60% needs to be paid by the petitioners. The award of attorney's fees shall be borne exclusively by the petitioners.

PADILLA [dissent] - the doctrine of "last clear chance" assumes that the negligence of the defendant

was subsequent to the negligence of the plaintiff and the same must be the proximate cause of the injury. In short, there must be a last and a clear chance, not a last possible chance, to avoid the accident or injury. It must have been a chance as would have enabled a reasonably prudent man in like position to have acted effectively to avoid the injury and the resulting damage to himself. The bank was not remiss in its duty of sending monthly bank statements to private respondent RMC so that any error or discrepancy in the entries therein could be brought to the bank's attention at the earliest opportunity. Private respondent failed to examine these bank statements not because it was prevented by some cause in not doing so, but because it was purposely negligent as it admitted that it does not normally check bank statements given by banks. It was private respondent who had the last and clear chance to prevent any further misappropriation by Yabut had it only reviewed the status of its current accounts on the bank statement sent to it monthly or regularly. Since a sizable amount of cash was entrusted to Yabut, private respondent should, at least, have taken care of its concerns, as what the law presumes. Its negligence, therefore, is not contributory but the immediate and proximate cause of its injury.

LAMBERT V. HEIRS OF CASTILLON (2005)

Ray Castillon visited the house of his brother one night and borrowed his motorcycle tagging along his friend as the backrider while they roam around the city. After eating and drinking beer, they drove along the highway at a high speed when they tailgated a Tamaraw jeep owned by Lambert and driven by Gamot. When the jeepney was approaching the side road with Rey following closely behind, Gamot slightly veered to the right causing Rey to instinctively veer to the left. But at this moment Gardo suddenly turned sharply to the left towards the side of the road. Thus the motorcycle sliced into the side of the jeepney throwing Rey forward so that his forehead hit the angle bar on the left front door of the jeepney. The accident resulted to the death of Rey and physical injuries to his friend.

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The heirs of Rey thus filed an action for damages against Lambert, the owner of the jeep. Lambert insists that the negligence of Ray was the proximate cause of his unfortunate death and therefore she is not liable for damages.

RTC ruled in favour of Ray but reduced Lambert’s liability by 20% in view of the contributory negligence of Ray. CA affirmed.

ISSUES: (1) W/N the CA erred in not applying the doctrine of Raynera v. Hiceta that drivers of vehicles

“who bump the rear of another vehicle” are presumed to be the cause of the accident? In other words, W/N Lambert was negligent?

(2) Does the act of tailgating merely constitute contributory negligence? HELD: (1) No. Clearly, the abrupt and sudden left turn by Gamot, without first establishing his right of

way, was the proximate cause of the mishap. The cause of the collision is traceable to the negligent act of Gamot for without that left turn executed with no precaution, the mishap in all probability would not have happened.

Raynera v. Hiceta is not applicable in this case. That case also involved a motorcycle crashing into the left rear portion of another vehicle, where it was held that drivers of vehicles “who bump the rear of another vehicle” are presumed to be “the cause of the accident, unless contradicted by other evidence”. The driver of the rear vehicle, had full control of the situation as he was in a position to observe the vehicle in front of him. In this case, such theory was sufficiently contradicted by evidence, which is the sudden left turn made by Gamot.

(2) Yes. The SC found it equitable to increase the ratio of apportionment of damages on account of the

victim’s negligence. Article 2179 reads as follows: When the plaintiff’s negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.

The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. The determination of the mitigation of the defendant’s liability varies depending on the circumstances of each case. In the case at bar, it was established that Ray, at the time of the mishap: (1) was driving the motorcycle at a high speed; (2) was tailgating the Tamaraw jeepney; (3) has imbibed one or two bottles of beer; and (4) was not wearing a protective helmet. These circumstances, although not constituting the proximate cause of his demise, contributed to the same result. The contribution of these circumstances are all considered and determined in terms of percentages of the total cause. Hence, damages only up to 50% of the award are given. In other words, 50% of the damage shall be borne by the heirs of Ray; the remaining 50% shall be paid by Lambert. ESTACION V. BERNARDO (same as above) PNR V. BRUNTY (2006)

FACTS: Rhonda Brunty came to the Philippines and prior to her departure, she, together with one Garcia, went to Baguio onboard a Mercedes Benz sedan, driven by another. As they were already approaching the railroad crossing in Tarlac, the driver was at 70kph when they overtook a vehicle and consequently collided with a PNR Train. The driver was instantly killed while Brunty and Garcia suffered serious physical injuries. Brunty was brought to the Hospital where she was pronounced dead.

Brunty’s mother sent a demand letter to PNR for payment of damages but PNR did not respond. Brunty and Garcia filed a complaint for damages against PNR, alleging that the death of the driver and Brunty, and the injuries suffered, were the direct and proximate result of PNR’s negligence in not providing the necessary equipment at the railroad crossing in Tarlac.

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PNR argued that:1) it exercised the diligence of a gff in the selection and supervision of itsemployees;2) it had the right of way and it has no legal duty to put up a bar or red light signal in any such crossing, insisting that there were adequate warning signals posted on both sides of the road before the crossing; 3) the immediate and proximate cause of the accident was the driver’s negligence, and he had the last clear chance to avoid the accident.

RTC ruled against PNR and ordered it to pay damages. CA affirmed, with partial modifications. ISSUES: 1) W/N PNR’s negligence resulted in the collision. YES (2) W/N Mercelita is guilty of contributory negligence. YES (3) W/N the doctrine of the last clear chance is applicable. NO HELD: (1) YES. PNR was negligent because of its failure to provide the necessary safety device to

ensure the safety of motorists in crossing the railroad track. Considering the circumstances at the time of the accident, the safety measures installed by the PNR at the railroad crossing are not only inadequate but do not satisfy well-settled safety standards in transportation. Pictures presented in evidence revealed that: 1) there were no flagbars or safety railroad bars;2) warning signals were inadequate; 3) the place was not properly lighted such that even if a flagman was stationed at the site, it would be impossible to know or see a railroad track ahead. In addition, the slight curve leading to the railroad track made it difficult for a vehicle coming to know if there is an approaching train, especially at 2am. It is imperative on the part of PNR to provide adequate safety equipment in the area. Railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to persons and property at railroad crossings, which duties pertain both in the operation of trains and in the maintenance of the crossings.

(2) YES, but it cannot mitigate the liability of PNR. Mercelita was driving at a speed of 70kph and had overtaken a vehicle a few yards before the track. Such acts, while not the direct and proximate cause, contributed to the collision. Contributory negligence on the part of plaintiff does not exonerate a defendant. It can only mitigate the defendant’s liability. However, contributory negligence cannot be appreciated in this case since the relationship between the driver, and Rhonda Brunty was not alleged.

(3) NO. The doctrine provide s that “the antecedent negligence of plaintiff does not preclude him from recovering damages caused by the supervening negligence of defendant, who had the last fair chance to prevent the impending harm by the exercise of due diligence.” It has been ruled that the proximate cause of the injury was the negligence of PNR. Hence, this doctrine does not apply.

DISPOSITIVE: Affirmed with modifications. Actual damages deleted, and in lieu thereof, temperate damages awarded and moral damages reduced.

3. ASSUMPTION OF RISK: Principle behind it: no wrong is done to him who consents Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by

stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.

ELEMENTS: (KUF) a) The plaintiff must know that the risk is present b) He must further understand its nature c) His choice to incur it is free and voluntary

Two Kinds of Wavier: (EI) a) Express b) Implied Assumption A) Express Waiver – plaintiff, in advance, has expressly waived his right to recover damages for the

negligent act of the defendant of has given his express consent to relieve the defendant of an obligation of conduct toward him, and to take his chances of injury from a known risk arising fro what the defendant is to do or leave undone. Contrary to public policy.

- BUT if waiver came after the negligent at, such may be considered valid and may be construed as a form of condonation.

B) Implied Assumption of Risk - Where no express consent to relieve the defendant or express waiver of the right to recover is made by the plaintiff, and he knows that he is exposed to a dangerous condition and yet voluntarily assumed the risk of such dangerous condition or freely and voluntarily enters

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into a contractual relation, or voluntarily participate in dangerous activities, or lastly, when he is aware of the risk created by the defendant’s negligence, yet he voluntarily decided to proceed to encounter it.

Exceptions to the assumption of risk: (PEP) a) If an emergency is found to exist b) If the life or

property of another is in peril c) When plaintiff seeks to rescue his endangered property AFIALDA V. HISOLE (1949)

Spouses Hisole hired Loreto Afialda as caretaker of the former’s carabaos at a fixed compensation. While Loreto was tending the carabaos, he was gored by one of them and died as a result. Loreto’s elder sister now sues spouses Hisole contending that under the Civil Code “The possessor of an animal, or the one who uses the same, is liable for any damages it may cause, even if such animal should escape from him or stray away. This liability shall cease only in case, the damage should arise from force majeure or from the fault of the person who may have suffered it.”

ISSUES: W/N the spouses Hisole are liable for the death of their caretaker. HELD: NO, THEY ARE NOT LIABLE. The law uses the term “possessor and user of the animal”. The

animal was in the custody and under the control of the caretaker, who was paid for his work as such. He, at the time of goring, is the possessor and user of the carabao and therefore had the custody and control of the animal. It would have been different had Afialda been a stranger. Obviously, it was the caretaker’s business to try to prevent the animal from causing injury or damage to anyone, including himself. And being injured by the animal under those circumstances was one of the risks of the occupation which he had voluntarily assumed and for which he must take the consequences.

TRANSPORTO V. MIJARES (1961)

Antonio Transporto and Mijares, co-employees of a Sugar Central, noticed an unusually big-sized firecracker on the table of their co-employee. Transporto examined the big firecracker and claimed that it was a fake firecracker and would not explode. He claimed to have used bigger-sized firecrackers, and that if held tightly, one would not get hurt by its explosion. His officemates laughed at his statement which made Transporto challenge them to a bet of P100 despite warnings of the owner of the firecracker that it was a real one and would explode. Mijares accepted the bet but for lower amount to which Transporto agreed. Mijares paid him and gave him the go signal to ignite it with his cigarette but Transporto decided that they do it outside since there were people inside. Once outside, Tesoro had the firecracker tied to his hand after Mijares expressed his doubts that Transporto might throw the lighted firecracker to him. Tesoro then simulated igniting it and jokingly thrust his hand to Mijares which made him run away scared. When Mijares realized Transporto was mocking him, he dared him to ignite it and so Transporto finally held the firecraker tightly, ignited the fuse and extended his arm. When the firecracker exploded, Transporto told Mijares he lost the bet and immediately went inside where someone called his attention about his bleeding hand. He claimed it was an accident and that it was his fault. Transporto had to be taken to the hospital where he was confined for weeks and had to incur expensive medical expenses.

After he was discharged in the hospital, the Sugar Central refused to take him back. Defendant agreed to give him 1000php as monetary help, 500php of which was first deposited. After a month, Transporto asked for the balance of 500php but defendant refused stating that he was already paid. Transporto filed an action for damages but was dismissed. CA affirmed.

ISSUE: W/N Transporto can claim damages. HELD: NO. Transporto played the part of a bravado. Transporto’s contention that he called-off the bet

when the fuse was ignited could not be accepted because he could have easily pulled out the fuse with his other hand or he could have smothered it by smashing it on the ground after lighting the fuse.

This case is therefore governed by the doctrine of “volenti non fit injuria” (no wrong is done to him who consents), that is, “that to which a person assents is not esteemed, in law, an injury,” the facts and

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circumstances being such as to warrant the conclusion that the plaintiff, freely and voluntarily, with full knowledge of the nature and extent of the risk he ran impliedly agreed to incur it. When a person, knowing and appreciating the danger and the risk, elects voluntarily to encounter them, he can no more maintain an action founded upon the statute than he can in cases to which the statute has no application.

The principle that one who voluntarily assumed the risk of injury from a known danger is debarred from a recovery is recognized in negligence cases. A plaintiff who by his conduct, has brought himself within the operation of the maxim, ‘volenti non fit injuria,’ cannot recover on the basis of the defendant’s negligence. It is said that one who knows, appreciates, and deliberately exposes himself to a danger ‘assumes the risk’ thereof. One cannot deliberately incur an obvious risk of personal injury, especially when preventive measures are at hand, and then hold the author of the danger for the ensuing injury.”

ILOCOS NORTE ELECTRIC V. CA (1989)

5- 6AM June 29, 1967 - strong typhoon "Gening" in Ilocos Norte brought floods and heavy rain. Isabel Lao Juan, (Nana Belen) went to her store, Five Sisters Emporium, to look after the merchandise to see if they were damaged. Wading in waist-deep flood, Juan suddenly screamed "Ay" and quickly sank into the water. Her companions, two girls (sales girlls) attempted to help, but were afraid because they saw an electric wire dangling from a post and moving in snake-like fashion in the water. Yabes, the son-in law, upon hearing the electrocution of his mother-in-law, passed by the City Hall of Laoag to request the police to ask Ilocos Norte Electric Company or INELCO to cut off the electric current. The body was recovered about two meters from an electric post.

4AM June 29, 1967- Engineer Juan, Power Plant Engineer of NPC at the Laoag Diesel-Electric Plant, noticed certain fluctuations in their electric meter which indicated such abnormalities as grounded or shortcircuited lines.

6-6:30AM June 29, 1967- he set out of the Laoag NPC Compound on an inspection and saw grounded and disconnected lines. Electric lines were hanging from the posts to the ground. When he went to INELCO office, he could not see any INELCO lineman.

Engr. Juan attempted to resuscitate Nana Belen but his efforts proved futile. Rigor mortis was setting in. On the left palm of the deceased, there was a hollow wound. In the afternoon, the dangling wire was no longer there.

Dr. Castro examined the body and noted that the skin was grayish or cyanotic, which indicated death by electrocution. On the left palm, the doctor found an "electrically charged wound" or a first degree burn. About the base of the thumb on the left hand was a burned wound. The cause of' death was ,'circulatory shock electrocution"

In defense and exculpation, INELCO presented the testimonies of its officers and employees, which sought to prove that (1) on and even before June 29, 1967 the electric service system of the INELCO in the whole franchise area did not suffer from any defect that might constitute a hazard to life and property. (2) The service lines and devices had been newly-installed prior to the date in question. (3) Also, safety devices were installed to prevent and avoid injuries to persons and damage to property in case of natural calamities such as floods, typhoons, fire and others. (4) 12 linesmen are charged with the duty of making a round-the-clock check-up of the areas respectively assigned to them. (5) They also presented own medical expert and said that cyanosis could not have been the noted 3 hours after the death because it is only manifest in live persons. (6) Lastly, the deceased could have died simply either by drowning or by electrocution due to negligence attributable only to herself and not to INELCO because of the installation of a burglar deterrent by connecting a wire from the main house to the iron gate and fence of steel matting, thus, charging the latter with electric current whenever the switch is on. The switch must have been left on, hence, causing the deceased's electrocution when she tried to open her gate that early morning of June 29, 1967

CFI: awarded P25,000 moral damages; P45,000 attys fees; CA: P30,229.45 in actual damages (i.e., P12,000 for the victim's death and P18,229.45 for funeral expenses); P50,000 in compensatory damages, computed in accordance with the formula set in the Villa-Rey Transit case (31 SCRA 511) with the base of P15,000 as average annual income of the deceased; P10,000 in exemplary damages; P3,000 attorney's fees

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ISSUE: WON the legal principle of "assumption of risk" bars private respondents from collecting damages from INELCO

HELD: NO. The maxim "volenti non fit injuria" relied upon by petitioner finds no application in the case

at bar. It is imperative to note the surrounding circumstances which impelled the deceased to leave the comforts of a roof and brave the subsiding typhoon. As testified by the salesgirls, the deceased went to the Five Star Emporium "to see to it that the goods were not flooded." As such, shall We punish her for exercising her right to protect her property from the floods by imputing upon her the unfavorable presumption that she assumed the risk of personal injury? Definitely not. For it has been held that a person is excused from the force of the rule, that when he voluntarily assents to a known danger he must abide by the consequences, if an emergency is found to exist or if the life or property of another is in peril, or when he seeks to rescue his endangered property. Clearly, an emergency was at hand as the deceased's property, a source of her livelihood, was faced with an impending loss. Furthermore, the deceased, at the time the fatal incident occurred, was at a place where she had a right to be without regard to INELCO’s consent as she was on her way to protect her merchandise. Hence, private respondents, as heirs, may not be barred from recovering damages as a result of the death caused by INELCO’s negligence.

INELCO can be exonerated from liability since typhoons and floods are fortuitous events. While it is true that typhoons and floods are considered Acts of God for which no person may be held responsible, it was not said eventuality which directly caused the victim's death. It was through the intervention of petitioner's negligence that death took place.

In times of calamities such as the one which occurred in Laoag City on the night of June 28 until the early hours of June 29, 1967, extraordinary diligence requires a supplier of electricity to be in constant vigil to prevent or avoid any probable incident that might imperil life or limb. The evidence does not show that defendant did that. On the contrary, evidence discloses that there were no men (linemen or otherwise) policing the area, nor even manning its office.

INELCO was negligent in seeing that no harm is done to the general public"... considering that electricity is an agency, subtle and deadly, the measure of care required of electric companies must be commensurate with or proportionate to the danger. The duty of exercising this high degree of diligence and care extends to every place where persons have a right to be" The negligence of petitioner having been shown, it may not now absolve itself from liability by arguing that the victim's death was solely due to a fortuitous event. "When an act of God combines or concurs with the negligence of the defendant to produce an injury, the defendant is liable if the injury would not have resulted but for his own negligent conduct or omission". Disposition: CA decision, except for the slight modification that actual damages be increased to P48,229.45, is AFFIRMED.

CO V. CA (1998)

On July 18, 1990, petitioner entrusted his Nissan pick-up car 1988 model to private respondent - which is engaged in the sale, distribution and repair of motor vehicles for job repair services and supply of parts.

Private respondent undertook to return the vehicle on July 21, 1990 fully serviced and supplied in accordance with the job contract. After petitioner paid in full the repair bill in the amount of P1,397.00 private respondent issued to him a gate pass for the release of the vehicle on said date. But came July 21, 1990, the latter could not release the vehicle as its battery was weak and was not yet replaced. Left with no option, petitioner himself bought a new battery nearby and delivered it to private respondent for installation on the same day. However, the battery was not installed and the delivery of the car was rescheduled to July 24, 1990 or three (3) days later. When petitioner sought to reclaim his car in the afternoon of July 24, 1990, he was told that it was carnapped earlier that morning while being road-tested by private respondent’s employee along Pedro Gil and Perez Streets in Paco, Manila. Private respondent said that the incident was reported to the police.

Having failed to recover his car and its accessories or the value thereof, petitioner filed a suit for damages against private respondent anchoring his claim on the latter’s alleged negligence. For its part, private respondent contended that it has no liability because the car was lost as a result of a fortuitous event, the car napping.

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ISSUE: Whether a repair shop can be held liable for the loss of a customer’s vehicle while the same is in

its custody for repair or other job services? HELD: It is a not a defense for a repair shop of motor vehicles to escape liability simply because the

damage or loss of a thing lawfully placed in its possession was due to carnapping. Carnapping per se cannot be considered as a fortuitous event. The fact that a thing was unlawfully and forcefully taken from another’s rightful possession, as in cases of carnapping, does not automatically give rise to a fortuitous event. To be considered as such, carnapping entails more than the mere forceful taking of another’s property. It must be proved and established that the event was an act of God or was done solely by third parties and that neither the claimant nor the person alleged to be negligent has any participation. In accordance with the Rules of evidence, the burden of proving that the loss was due to a fortuitous event rests on him who invokes it which in this case is the private respondent. However, other than the police report of the alleged carnapping incident, no other evidence was presented by private respondent to the effect that the incident was not due to its fault. A police report of an alleged crime, to which only private respondent is privy, does not suffice to established the carnapping. Neither does it prove that there was no fault on the part of private respondent notwithstanding the parties’ agreement at the pre-trial that the car was carnapped. Carnapping does not foreclose the possibility of fault or negligence on the part of private respondent.

It must likewise be emphasized that pursuant to Articles 1174 and 1262 of the New Civil Code, liability attaches even if the loss was due to a fortuitous event if “the nature of the obligation requires the assumption of risk”. Carnapping is a normal business risk for those engaged in the repair of motor vehicles. For just as the owner is exposed to that risk so is the repair shop since the car was entrusted to it. That is why, repair shops are required to first register with the Department of Trade and Industry (DTI) and to secure an insurance policy for the “shop covering the property entrusted by its customer for repair, service or maintenance” as a pre-requisite for such registration/accreditation. Violation of this statutory duty constitutes negligence per se. Having taken custody of the vehicle, private respondent is obliged not only to repair the vehicle but must also provide the customer with some form of security for his property over which he loses immediate control. An owner who cannot exercise the seven (7) juses or attributes of ownership the right to possess, to use and enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruits is a crippled owner. Failure of the repair shop to provide security to a motor vehicle owner would leave the latter at the mercy of the former. Moreover, on the assumption that private respondent’s repair business is duly registered, it presupposes that its shop is covered by insurance from which it may recover the loss. If private respondent can recover from its insurer, then it would be unjustly enriched if it will not compensate petitioner to whom no fault can be attributed. Otherwise, if the shop is not registered, then the presumption of negligence applies.

4. DOCTRINE OF LAST CLEAR CHANCE

ELEMENTS: (PALA) a) Prior negligence of one party b) The other party is aware of the peril c) The other party has the last clear chance to avoid the accident by taking the necessary precaution but fails to do so d) Accident occurs.

Exceptions to the Last Clear Chance Doctrine: a) where the party charged is required to act instantaneously b) if the injury cannot be avoided by the application of all means at hand after the peril is or should have been considered. (Ong v Metropolitan Water District) PICART V. SMITH (discussed) – horse falling over the bridge; ONG V. METROPOLITAN WATER DISTRICT (discussed) – child drowned in the swimming pool PLDT V. CA (1989)

The Esteban’s jeep ran over a mound of earth and fell into an open trench, an excavation undertaken by PLDT for the installation of its underground conduit system. Esteban failed to notice the open trench which was left uncovered because of the darkness and the lack of any warning light or signs. The Estebans

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allegedly sustained injuries. PLDT, denies liability on the contention that the injuries sustained by respondent spouses were the result of their own negligence and that the entity which should be held responsible, Barte an independent contractor which undertook the construction.

LC ruled in favor of Estebans. However, the CA found that that the relationship of Barte and PLDT should be viewed in the light of the contract between them and, under the independent contractor rule, PLDT is not liable for the acts of an independent contractor. Still, CA affirmed LC decision.

ISSUES & ARGUMENTS W/N PLDT is liable for the injuries sustained by the Estebans HELD: The accident which befell the Estebans was due to the lack of diligence of respondent Antonio

Esteban and was not imputable to negligent omission on the part of petitioner PLDT. The accident was not due to the absence of warning signs, but to the unexplained abrupt swerving of the jeep from the inside lane. That may explain plaintiffhusband's insistence that he did not see the ACCIDENT MOUND for which reason he ran into it. The jeep was not running at 25 kilometers an hour. At that speed, he could have braked the vehicle the moment it struck the ACCIDENT MOUND. The jeep would not have climbed the ACCIDENT MOUND several feet as indicated by the tiremarks. The jeep must have been running quite fast.

Plaintiff-husband had not exercised the diligence of a good father of a family to avoid the accident. The negligence of Antonio Esteban was not only contributory to his injuries and those of his wife but goes to the very cause of the occurrence of the accident, as one of its determining factors, and thereby precludes their right to recover damages. The presence of warning signs could not have completely prevented the accident; the only purpose of said signs was to inform and warn the public of the presence of excavations on the site. The private respondents already knew of the presence of said excavations. It was not the lack of knowledge of these excavations which caused the jeep of respondents to fall into the excavation but the unexplained sudden swerving of the jeep from the inside lane towards the accident mound. Furthermore, Antonio Esteban had the last clear chance or opportunity to avoid the accident. A person claiming damages for the negligence of another has the burden of proving the existence of such fault or negligence causative thereof. The facts constitutive of negligence must be affirmatively established by competent evidence. Whosoever relies on negligence for his cause of action has the burden in the first instance of proving the existence of the same if contested, otherwise his action must fail.

RAYNERA V. HICETA (1999)

On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way home. He was riding a motorcycle traveling on the southbound lane of East Service Road, Cupang, Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to 30 kilometers per hour. The truck was loaded with two (2) metal sheets extended on both sides, two (2) feet on the left and three (3) feet on the right. There were two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates. The asphalt road was not well lighted. At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of the truck trailer, which was without tail lights. Due to the collision, Reynaldo sustained head injuries and he was rushed to the hospital where he was declared dead on arrival.

Edna Raynera, widow of Reynaldo, filed with the RTC a complaint for damages against respondents Hiceta and Orpilla, owner and driver of the Isuzu truck. At the trial, petitioners presented Virgilio Santos. He testified that at about 1:00 and 2:00 in the morning of March 23, 1989, he and his wife went to Alabang, market, on board a tricycle. They passed by the service road going south, and saw a parked truck trailer, with its hood open and without tail lights. They would have bumped the truck but the tricycle driver was quick in avoiding a collision. The place was dark, and the truck had no early warning device to alert passing motorists.

Trial court: respondent’s negligence was the immediate and proximate cause of Raynera’s death. CA: The appellate court held that Reynaldo Raynera's bumping into the left rear portion of the truck

was the proximate cause or his death, and consequently, absolved respondents from liability. ISSUE: (a) whether respondents were negligent, and if so, (b) whether such negligence was the

proximate cause of the death of Reynaldo Raynera.

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HELD: We find that the direct cause of the accident was the negligence of the victim. Traveling behind

the truck, he had the responsibility of avoiding bumping the vehicle in front of him. He was in control of the situation. His motorcycle was equipped with headlights to enable him to see what was in front of him. He was traversing the service road where the prescribed speed limit was less than that in the highway.

Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were on top of the steel plates, which were visible from a distance of 100 meters Virgilio Santos admitted that from the tricycle where he was on board, he saw the truck and its cargo of iron plates from a distance of ten (10) meters. In light of these circumstances, an accident could have been easily avoided, unless the victim had been driving too fast and did not exercise dues care and prudence demanded of him under the circumstances. Virgilio Santos' testimony strengthened respondents' defense that it was the victim who was reckless and negligent in driving his motorcycle at high speed. The tricycle where Santos was on board was not much different from the victim's motorcycle that figured in the accident. Although Santos claimed the tricycle almost bumped into the improperly parked truck, the tricycle driver was able to avoid hitting the truck.

It has been said that drivers of vehicles "who bump the rear of another vehicle" are presumed to be "the cause of the accident, unless contradicted by other evidence". The rationale behind the presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to observe the vehicle in front of him. We agree with the Court of Appeals that the responsibility to avoid the collision with the front vehicle lies with the driver of the rear vehicle. PHOENIX CONSTRUCTION V. IAC (same as above)

5. PRESCRIPTION Art. 1146. The following actions must be instituted within 4 years:

(1) upon an injury to the rights of the plaintiff; (2) upon a quasi-delict;

The defense of prescription is available at the moment the right of action prescribes. For quasi-delict, after four years from the time the last element of commission of an act or omission violative of the right of the plaintiff, which is the time when the cause of action arises.

ELEMENTS of CAUSE OF ACTION (Kramer v CA) - ROV a) The right in favor of the plaintiff by whatever means and whatever law it arises or is created b) An obligation on the part of the defendant to respect such right c) An act or omission on the part of such defendant violative of the right of the plaintiff. Relations Back Doctrine – The principle of law by which an act done at one time is considered by fiction of law to have been at some antecedent period. It is a doctrine which, although of equitable origin, has a well recognized application to proceedings at law; a legal fiction invented to promote the ends of justice or prevent injustice and occurrence of injuries where otherwise there would be remedy. - The doctrine when invoked, must have connection with actual facts, must be based on some antecedent lawful rights. KRAMER V. CA (1989)

In 1976, F/B Marjolea, a fishing boat owned by Ernest Kramer, Jr. and Marta Kramer, was navigating its way from Marinduque to Manila when the boat suddenly figured in a collision with an inter-island vessel (M/V Asia Philippines) owned by Trans-Asia Shipping Lines, Inc. Due to the collision, Kramer’s boat sank.

In 1982, the Board of Marine Inquiry of the Philippine Coast Guard, upon protest of the captains to determine the proximate cause, finally concluded that the collision was due to the negligence of the employees of Trans-Asia so M/V Asia Philippines was suspended.

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In 1985 (9 yrs from the date of accident), Kramer then filed a complaint for damages in the RTC, Pasay City. Trans-Asia filed a MTD on the ground of prescription based on Art. 1146 of the Civil Code which provides, ‘An action based upon quasi-delict must be instituted within 4 years from the day the quasi-delict was committed.

RTC denied the MTD stating that the prescriptive period under the law should begin to run only from 1982, the date when the negligence of the crew of M/V Asia Philippines had been finally ascertained. CA reversed, hence the present petition.

ISSUES: W/N a complaint for damages instituted by the Kramers arising from a marine collision is

barred by the statute of limitations. HELD: YES. An action based upon a quasi-delict must be instituted within 4 years. The right of action

accrues when there exists a cause of action, which consists of 3 elements, namely: (a) A right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (b) An obligation on the part of defendant to respect such right (c) An act or omission on the part of such defendant violative of the right of the plaintiff. The occurrence of the last element is the time when the cause of action arise. Aggrieved party need not wait for a determination by an administrative body that the collision was caused by fault or negligence of the other party before he can file action for damages. The 4 year prescriptive period must be counted from the date of collision. Petition is DISMISSED. SPOUSES SANTOS V. PIZARDO (2005)

In 1994, Dionisio Sibayan was charged with reckless imprudence resulting to multiple homicide and multiple physical injuries due to the vehicle collision between a Viron Transit bus driven by him and a Lite Ace. Petitioners were relatives of the decedents.

In 1998, the TC finally convicted him to suffer penalties but made no pronouncement on the civil liability since a reservation was made to file a separate civil action.

In 2000, citing the judgment conviction, a complaint for damages was filed in the RTC. Viron Transit filed an MTD on the ground of prescription and laches, etc. The petitioners opposed contending that the right to file a separate action prescribes in 10 years from the finality of the judgment on a complaint that arose ex delicto. As there was no appeal of the decision convicting him, the complaint which was filed barely 2 years then was clearly filed within the prescriptive period. RTC & CA dismissed on the ground of the 4 year prescription accorded to quasi delicts.

ISSUE: W/N the dismissal of the action based on culpa aquiliana is a bar to the enforcement of the

subsidiary liability of the employer. HELD: NO. The dismissal of the action based on culpa aquiliana is not a bar to the subsidiary liability of

Viron Transit as the employer. Because the Article 103 of the R.P.C. operates with controlling force to obviate the possibility of the aggrieved party being deprived of indemnity even after the rendition of a final judgment convicting the employee. The trial court should not have dismissed the complaint on the ground of prescription, but instead allowed the complaint for damages ex delicto to be prosecuted on the merits. This does not offend the policy that the reservation or institution of a separate civil action waives the other civil actions but this is merely an avoidance of multiple suits. Since the stale action for damages based on quasi- delict should be considered waived, there is no more occasion for petitioners to file multiple suits against private respondents as the only recourse available to them is to pursue damages ex delicto. DE GUZMAN V. TOYOTA CUBAO (2006)

De Guzman purchased (Nov 1997) from Toyota Cubao a brand new Hi-lux double cab motor vehicle. Engine developed a crack after traversing Marcos highway during a heavy rain. De Guzman asserted that Toyoto should replace the engine but Toyota said that damage was not covered by warranty. De Guzman claimed that it was an implied warranty.

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19 months later (April 1999), De Guzman filed complaint for damages in the RTC. RTC ruled in favor of Toyota and dismissed the complaint. Petition for certiorari was filled immediately to the SC.

Toyota’s contention: “Prescription period is 6 mos from the date of sale / delivery as provided in Statute of Limitations (Art. 1571, CC)”

De Guzman’s: “Prescription period is 2 years as provided in Art. 169 of the Consumer Act of the Philippines (RA 7394). Also, since this is an action based on quasi delict, it shall only prescribe after 4 years.”

ISSUE: W/N the cause of action had prescribed. HELD: YES. The action prescribed based on civil code provisions on contract of sale and warranties

where actions with regard to breach of implied warranty must be brought within 6 months from delivery of the thing sold or even if it is to be based on RA 7394, action must be brought within 1 year. Petition is DENIED.

*OTHER ISSUES: On procedural defect: De Guzman failed to show exceptional and compelling circumstances to justify a direct filing of the petition with the SC instead of first taking an appeal to the Court of Appeals. The matter was not pure question of law as it required adjudication on the merits.

6. FORCE MAJEURE/FORTUITOUS EVENT Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. ELEMENTS: (C-FOP) - (Servando v Phil. Steam Ship) a) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. b) It must be impossible to foresee the event which constitutes the “caso fortuito”, or if it can be foreseen, it must be impossible to avoid c) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and d) The obligor must be free from any participation in the aggravation of the injury resulting to the creditor. * There is still a chance that a defendant who invoked this defense may still be held liable for negligence when the fortuitous event is not the sole cause of the injury or the negligence of the defendant which concurred with the fortuitous event or which resulted in the aggravation of the injury of the plaintiff will make him liable even if there was a fortuitous event. GOTESCO INVESTMENT CORP v. CHATTO (1992)

Gloria Chatto and her 15-year old daughter Lina went to see the movie “Mother Dear” at Superama theater, owned by Gotesco Investment Corporation. They bought balcony tickets but even then were unable to find seats considering the number of people patronizing the movie. Hardly 10 minutes after entering the theater, the ceiling of the balcony collapsed and pandemonium ensued. The Chattos managed to crawl under the fallen ceiling and walk to the nearby FEU hospital where they were confined and treated for a day. Later, they had to transfer to UST hospital, and because of continuing pain in the neck, headache, and dizziness, had to even go to Illinois, USA for treatment.

Gotesco tried to avoid liability by alleging that the collapse was due to force majeure. It maintained that its theater did not suffer from any structural or construction defect. TC ruled in favor of the Chattos. CA affirmed.

ISSUE: W/N the cause of the collapse of the balcony ceiling was force majeure.

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HELD: NOT force majeure. Gotesco is liable. Gotesco’s claim that the collapse of the ceiling of the theater was due to force majeure is not even founded on facts because its own witness, Mr. Ong, admitted he could not give any reason for the collapse. Having interposed it as a defense, it had the burden to prove that the collapse was indeed caused by force majeure. It could not have collapsed without a cause. That Ong could not offer any explanation does not imply force majeure.

Spanish and American authorities on the meaning of force majeure: Inevitable accident or casualty; an accident produced by any physical cause which is irresistible; such as lightning, tempest, perils of the sea, inundation, or earthquake; the sudden illness or death of a person. [OR] The event which we could neither foresee nor resist; as, for example, the lightning stroke, hail, inundation, hurricane, public enemy, attack by robbers; [OR] Any accident due to natural causes, directly, exclusively, without human intervention, such as could not have been prevented by any kind of oversight, pains, and care reasonably to have been expected.

Gotesco could have easily discovered the cause of the collapse if indeed it were due to force majeure. The real reason why Mr. Ong could not explain the cause is because either he did not actually conduct an investigation or because he is incompetent (not an engineer, but an architect who had not even passed the government’s examination).

The building was constructed barely 4 years prior to the accident. It was not shown that any of the causes denominated as force majeure obtained immediately before or at the time of the collapse of the ceiling. Such defects could have been discovered if only Gotesco exercised due diligence and care in keeping and maintaining the premises. But, as disclosed by Mr. Ong, no adequate inspection of the premises before the date of the accident. That the structural designs and plans of the building were duly approved by the City Engineer and the building permits and certificate of occupancy were issued do not at all prove that there were no defects in the construction, especially as regards the ceiling, considering that no testimony was offered to prove that it was ever inspected at all. And even assuming arguendo that the cause of the collapse was due to force majeure, Gotesco would still be liable because the trial court declared it to be guilty of gross negligence. As gleaned from thedefinition, for one to be exempt from any liability because of it, he must have exercised care, i.e., he should not have been guilty of negligence. SERVANDO v. PHIL STREAM (1982)

Bico and Servando loaded on board Phil Stream's vessel for carriage from Manila to Negros Occidental several cargoes (cavans of rice, colored papers, toys etc) as evidenced by the corresponding bills of lading issued. Upon arrival of the vessel, the cargoes were discharged complete and in good order unto the warehouse of the Bureau of Customs. In the afternoon however, said warehouse was razed by a fire of unknown origin, destroying the cargoes. They claimed the value of said goods but were rejected.

RTC ruled in favor of Servando and ordered Phil Stream to pay. The court a quo held that the delivery of the shipment in question to the warehouse of the Bureau of Customs is not the delivery contemplated by Article 1736; and since the burning of the warehouse occurred before actual or constructive delivery of the goods to the appellees, the loss is chargeable against the appellant.

Philippine Steam on the other hand relies on the following in their contract: “Clause 14. Carrier shall not be responsible for loss or damage to shipments billed 'owner's risk' unless such loss or damage is due to negligence of carrier. Nor shall carrier be responsible for loss or damage caused by force majeure, dangers or accidents of the sea or other waters; war; public enemies; . . . fire . ...”

ISSUE: W/N the above stipulation validly limits the liability of the shipowner in this case. HELD: YES. The parties may stipulate anything in the contract for so long as the stipulation is not

contrary to law, morals, public policy. The stipulation which merely iterates the principle of caso fortuito is for all intents and purposes valid.

Servando contends that the above stipulation does not bind them because it was printed in fine letters on the back-of the bills of lading; and that they did not sign the same. However, such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation'. It is what is known as a contract of 'adhesion', in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of

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contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent."

Besides, the agreement contained in the above quoted Clause 14 is a mere iteration of the basic principle of law written in Article 1174 of the Civil Code. Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor is exempt from liability for non-performance. 'Caso fortuito' as 'an event that takes place by accident and could not have been foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers.'

In its dissertation of the phrase 'caso fortuito' the Enciclopedia Juridicada Espanola 5 says: "In a legal sense and, consequently, also in relation to contracts, a 'caso fortuito' presents the following essential characteristics: (1) the cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the 'caso fortuito', or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor." In the case at bar, the burning of the customs warehouse was an extraordinary event which happened independently of the will of the appellant. The latter could not have foreseen the event.

There is nothing in the record to show that appellant carrier,incurred in delay in the performance of its obligation. It appears that appellant had not only notified appellees of the arrival of their shipment, but had demanded that the same be withdrawn. In fact, pursuant to such demand, appellee Uy Bico had taken delivery of 907 cavans of rice before the burning of the warehouse. Nor can the appellant or its employees be charged with negligence. The storage of the goods in the Customs warehouse pending withdrawal thereof by the appellees was undoubtedly made with their knowledge and consent. Since the warehouse belonged to and was maintained by the government, it would be unfair to impute negligence to the appellant, the latter having no control whatsoever over the same. Disposition judgment appealed from is hereby set aside.

SEPARATE OPINION: AQUINO [ concur] - I concur. Under article 1738 of the Civil Code "the

extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in the warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them". From the time the goods in question were deposited in the Bureau of Customs' warehouse in the morning of their arrival up to two o' clock in the afternoon of the same day, when the warehouse was burned, Amparo C. Servando and Clara Uy Bico, the consignees, had reasonable opportunity to remove the goods. Clara had removed more than one-half of the rice consigned to her. Moreover, the shipping company had no more control and responsibility over the goods after they were deposited in the customs warehouse by the arrastre and stevedoring operator. No amount of extraordinary diligence on the part of the carrier could have prevented the loss of the goods by fire which was of accidental origin.

YOBIDO v. CA

Spouses Tito and Leny Tumboy and their minor children boarded a Yobido Liner bus. The left front tire of the bus exploded. The bus fell into a ravine around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers.

A complaint for breach of contract of carriage, damages and attorney’s fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio, its driver. TC dismissed the petition for lack of merit, because it said the tire blowout was “a caso fortuito which is completely an extraordinary circumstance independent of the will” of the defendants who should be relieved of “whatever liability the plaintiffs may have suffered by reason of the explosion pursuant to Article 11746 of the Civil Code.”. CA reversed the decision of the TC.

**Tumboys: “The violation of the contract of carriage between them and the defendants was brought about by the driver’s failure to exercise the diligence required of the carrier in transporting passengers safely to their place of destination.”

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**Leny Tumboy: “Since it was “running fast,” she cautioned the driver to slow down but he merely stared at her through the mirror.”

**Salce (bus conductor): “the bus was running at a speed of “60 to 50” and that it was going slow because of the zigzag road. The left front tire that exploded was a “brand new tire” that he mounted on the bus on April 21, 1988 or only five (5) days before the incident. The Yobido Liner secretary, Minerva Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20, 1988. The tire blowout that caused the death of Tito Tumboy was a caso fortuito.”

ISSUES: W/N the explosion of a newly installed tire of a passenger vehicle is a fortuitous event that

exempts the carrier from liability for the death of a passenger. HELD: No. The explosion of a newly installed tire of a passenger vehicle is not a fortuitous event that

exempts the carrier from liability for the death of a passenger. On the Presumption of Negligence: Based on Art. 1756 of the CC7, when a passenger is injured or dies while travelling, the law presumes that the common carrier is negligent. This disputable presumption may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed by Articles 17338, 1755 and 1756 of the Civil Code or that the death or injury of the passenger was due to a fortuitous event. On Caso Fortuito: Yobido’s contention that they should be exempt from liability because the tire blowout was no more than a fortuitous event that could not have been foreseen, must fail. A fortuitous event is possessed of the following characteristics:

o The cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent of human will;

o It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid;

o The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and

o The obligor must be free from any participation in the aggravation of the injury resulting to the creditor.

Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous event. There are human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. It is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages. Proof of Diligence is Essential:

Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. The common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident. They failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the driver to slow down. These contradictory facts must, therefore, be resolved in favor of liability in view of the presumption of negligence of the carrier in the law. The Yobidos should have shown that it undertook extraordinary diligence in the care of its carrier, such as conducting daily routinary check-ups of the vehicle’s parts.

7. DILIGENCE Art. 2180 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. ONG V. METROPOLITAN WATER DISTRICT – discussed (boy drowning in a swimming pool) DULAY V. IAC

Benigno Torzuela, , a security guard on duty at the "Big Bang sa Alabang," and Atty. Napoleon Dulay had an altercation. Torzuela shot and killed Atty. Dulay. The widow of Dulay, filed an action for damages against

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Torzuela and Safeguard Investigation and Security Co., Inc., (SAFEGUARD) and/or Superguard Security Corp. (SUPERGUARD), alleged employers of Torzuela.

Safeguard/ Superguard’s contentions: (1) that Torzuela's act of shooting Dulay was beyond the scope of his duties, and that since the alleged

act of shooting was committed w/ deliberate intent (dolo), the civil liability is governed by Art 100 of the RPC.

(2) that a complaint for damages based on negligence under Art 2176 (the one filed by petitioners) cannot lie, since the civil liability under Art 2176 applies only to quasi-offenses under Art 365 of the RPC.

(3) that petitioners' filing of the complaint is premature considering that the conviction of Torzuela in a criminal case is a condition sine qua non for the employer's subsidiary liability.

(4) that Article 33 of the New Civil Code applies only to injuries intentionally committed (Marcia v CA)

Widow’s contentions: (a) the incident resulting in the death of Dulay was due to the concurring negligence of the defendants.

Torzuela's wanton and reckless discharge of the firearm issued to him by defendant SAFEGUARD and/or SUPERGUARD was the immediate and proximate cause of the injury, while the negligence of defendant SAFEGUARD and/or SUPERGUARD consists in its having failed to exercise the diligence of a good father of a family in the supervision and control of its employee to avoid the injury.

(b) that their cause of action against the private respondents is based on their liability under Article 2180

(c) that quasi-delicts are not limited to acts of negligence but also cover acts that are intentional and voluntary, citing Andamo v. IAC. Thus, Torzuela's act of shooting Dulay constitutes a quasi-delict actionable under Art 2176

(d) that Torzuela's act of shooting Dulay is also actionable under Art 3317 and Section 3, Rule 111 of the Rules of Court

ISSUE: W/N civil action can proceed independently of the criminal action HELD: YES - Rule 111 of the Rules on Criminal Procedure provides: "Sec 1. Institution of criminal and

civil actions. When a criminal action is instituted, the civil action for the recovery of civil liability is impliedly instituted with the criminal action, unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action. Such civil action includes recovery of indemnity under the Revised Penal Code, and damages under Articles 32, 33, 34, and 2176 of the Civil Code of the Philippines arising from the same act or omission of the accused."

It is well-settled that the filing of an independent civil action before the prosecution in the criminal action presents evidence is even far better than a compliance with the requirement of an express reservation. This is precisely what the petitioners opted to do in this case.

The term "physical injuries" in Article 33 has already been construed to include bodily injuries causing. It is not the crime of physical injuries defined in the Revised Penal Code. It includes not only physical injuries but also consummated, frustrated, and attempted homicide GO V. IAC

Floverto Jazmin is an American citizen and retired employee of the United States Federal Government. He had been a visitor in the Philippines since 1972 residing at 34 Maravilla Street, Mangatarem, Pangasinan. As pensionado of the U.S. government, he received annuity checks in the amounts of $ 67.00 for disability and $ 620.00 for retirement through the Mangatarem post office. He used to encash the checks at the Prudential Bank branch at Clark Air Base, Pampanga.

In January, 1975, Jazmin failed to receive one of the checks on time thus prompting him to inquire from the post offices at Mangatarem and Dagupan City. As the result of his inquiries proved unsatisfactory, on March 4, 1975, Jazmin wrote the U.S. Civil Service Commission, Bureau of Retirement at Washington, D.C.

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complaining about the delay in receiving his check. Thereafter, he received a substitute check which he encashed at the Prudential Bank at Clark Air Base.

Meanwhile, on April 22, 1975, Agustin Go, in his capacity as branch manager of the then Solidbank (which later became the Consolidated Bank and Trust Corporation) in Baguio City, allowed a person named "Floverto Jazmin" to open Savings Account No. BG 5206 by depositing two (2) U. S. treasury checks Nos. 5-449-076 and 5-448- 890 in the respective amounts of $1810.00 and $913.40 1 equivalent to the total amount of P 20,565.69, both payable to the order of Floverto Jasmin of Maranilla St., Mangatarem, Pangasinan and drawn on the First National City Bank, Manila.

The savings account was opened in the ordinary course of business. Thus, the bank, through its manager Go, required the depositor to fill up the information sheet for new accounts to reflect his personal circumstances. The depositor indicated therein that he was Floverto Jazmin with mailing address at Mangatarem, Pangasinan and home address at Maravilla St., Mangatarem, Pangasinan; that he was a Filipino citizen and a security officer of the US Army with the rank of a sergeant bearing AFUS Car No. H-2711659; that he was married to Milagros Bautista; and that his initial deposit was P3,565.35. He wrote CSA No. 138134 under remarks or instructions and left blank the spaces under telephone number, residence certificate/alien certificate of registration/passport, bank and trade performance and as to who introduced him to the bank. 2 The depositor's signature specimens were also taken.

Thereafter, the deposited checks were sent to the drawee bank for clearance. Inasmuch as Solidbank did not receive any word from the drawee bank, after three (3) weeks, it allowed the depositor to withdraw the amount indicated in the checks.

On June 29, 1976 or more than a year later, the two dollar cheeks were returned to Solidbank with the notation that the amounts were altered. 3 Consequently, Go reported the matter to the Philippine Constabulary in Baguio City.

On August 3, 1976, Jazmin received radio messages requiring him to appear before the Philippine Constabulary headquarters in Benguet on September 7, 1976 for investigation regarding the complaint filed by Go against him for estafa by passing altered dollar checks. Initially, Jazmin was investigated by constabulary officers in Lingayen, Pangasinan and later, at Camp Holmes, La Trinidad, Benguet. He was shown xerox copies of U.S. Government checks Nos. 5-449-076 and 5-448-890 payable to the order of Floverto Jasmin in the respective amounts of $1,810.00 and $913.40. The latter amount was actually for only $13.40; while the records do not show the unaltered amount of the other treasury check.

Jazmin denied that he was the person whose name appeared on the checks; that he received the same and that the signature on the indorsement was his. He likewise denied that he opened an account with Solidbank or that he deposited and encashed therein the said checks. Eventually, the investigators found that the person named "Floverto Jazmin" who made the deposit and withdrawal with Solidbank was an impostor.

On September 24, 1976, Jazmin filed with the then Court of First Instance of Pangasinan, Branch II at Lingayen a complaint against Agustin Y. Go and the Consolidated Bank and Trust Corporation for moral and exemplary damages in the total amount of P90,000 plus attorney's fees of P5,000. He alleged therein that Go allowed the deposit of the dollar checks and the withdrawal of their peso equivalent "without ascertaining the identity of the depositor considering the highly suspicious circumstances under which said deposit was made; that instead of taking steps to establish the correct identity of the depositor, Go "immediately and recklessly filed (the) complaint for estafa through alteration of dollar check" against him; that Go's complaint was "an act of vicious and wanton recklessness and clearly intended for no other purpose than to harass and coerce the plaintiff into paying the peso equivalent of said dollar checks to the CBTC branch office in Baguio City" so that Go would not be "disciplined by his employer;" that by reason of said complaint, he was "compelled to present and submit himself" to investigations by the constabulary authorities; and that he suffered humiliation and embarrassment as a result of the filing of the complaint against him as well as "great inconvenience" on account of his age (he was a septuagenarian) and the distance between his residence and the constabulary headquarters. He averred that his peace of mind and mental and emotional tranquility as a respected citizen of the community would not have suffered had Go exercised "a little prudence" in ascertaining the identity of the depositor and, for the "grossly negligent and reckless act" of its employee, the defendant CBTC should also be held responsible. 4

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In its decision of March 27, 1978 6 the lower court found that Go was negligent in failing to exercise "more care, caution and vigilance" in accepting the checks for deposit and encashment. It noted that the checks were payable to the order of Floverto Jasmin, Maranilla St., Mangatarem, Pangasinan and not to Floverto Jazmin, Maravilla St., Mangatarem, Pangasinan and that the differences in name and address should have put Go on guard. It held that more care should have been exercised by Go in the encashment of the U.S. treasury checks as there was no time limit for returning them for clearing unlike in ordinary checks wherein a two to three-week limit is allowed.

Finding that the plaintiff had sufficiently shown that prejudice had been caused to him in the form of mental anguish, moral shock and social humiliation on account of the defendants' gross negligence, the court, invoking Articles 2176, 2217 and 2219 (10) in conjunction with Article 21 of the Civil Code, ruled in favor of the plaintiff. • The defendants appealed to the Court of Appeals. On January 24, 1984, said court (then named Intermediate Appellate Court) rendered a decision 7 finding as evident negligence Go's failure to notice the substantial difference in the identity of the depositor and the payee in the check, concluded that Go's negligence in the performance of his duties was "the proximate cause why appellant bank was swindled" and that denouncing the crime to the constabulary authorities "merely aggravated the situation." It ruled that there was a cause of action against the defendants although Jazmin had nothing to do with the alteration of the checks, because he suffered damages due to the negligence of Go. Hence, under Article 2180 of the Civil Code, the bank shall be held liable for its manager's negligence.

The appellate court, however, disallowed the award of moral and exemplary damages and granted nominal damages instead.

Accordingly, the appellate court ordered Go and Consolidated Bank and Trust Corporation to pay jointly and severally Floverto Jazmin only NOMINAL DAMAGES in the sum of Three Thousand Pesos (P 3,000.00) with interest at six (6%) percent per annum until fully paid and One Thousand Pesos (P 1,000.00) as attorney's fees and costs of litigation.

Go and the bank filed a motion for the reconsideration of said decision contending that in view of the finding of the appellate court that "denouncing a crime is not negligence under which a claim for moral damages is available," the award of nominal damages is unjustified as they did not violate or invade Jazmin's rights. Corollarily, there being no negligence on the part of Go, his employer may not be held liable for nominal damages. The motion for reconsideration having been denied, Go and the bank interposed the instant petition for review on certiorari arguing primarily that the employer bank may not be held "co-equally liable" to pay nominal damages in the absence of proof that it was negligent in the selection of and supervision over its employee.

ISSUES : W/N the respondent appellate court erred in awarding nominal damages ans attorney’s fees to

private respondent. HELD: Although this Court has consistently held that there should be no penalty on the right to litigate

and that error alone in the filing of a case be it before the courts or the proper police authorities, is not a ground for moral damages, 9 we hold that under the peculiar circumstances of this case, private respondent is entitled to an award of damages.

Indeed, it would be unjust to overlook the fact that petitioners' negligence was the root of all the inconvenience and embarrassment experienced by the private respondent albeit they happened after the filing of the complaint with the constabulary authorities. Petitioner Go's negligence in fact led to the swindling of his employer. Had Go exercised the diligence expected of him as a bank officer and employee, he would have noticed the glaring disparity between the payee's name and address on the treasury checks involved and the name and address of the depositor appearing in the bank's records. The situation would have been different if the treasury checks were tampered with only as to their amounts because the alteration would have been unnoticeable and hard to detect as the herein altered check bearing the amount of $ 913.40 shows. But the error in the name and address of the payee was very patent and could not have escaped the trained eyes of bank officers and employees. There is therefore, no other conclusion than that the bank through its employees (including the tellers who allegedly conducted an identification check on the depositor) was grossly negligent in handling the business transaction herein involved.

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While at that stage of events private respondent was still out of the picture, it definitely was the start of his consequent involvement as his name was illegally used in the illicit transaction. Again, knowing that its viability depended on the confidence reposed upon it by the public, the bank through its employees should have exercised the caution expected of it.

In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of. It is not necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant. 10 As Go's negligence was the root cause of the complained inconvenience, humiliation and embarrassment, Go is liable to private respondents for damages.

Anent petitioner bank's claim that it is not "co-equally liable" with Go for damages, under the fifth paragraph of Article 2180 of the Civil Code, "(E)mployers shall be liable for the damages caused by their employees . . . acting within the scope of their assigned tasks." Pursuant to this provision, the bank is responsible for the acts of its employee unless there is proof that it exercised the diligence of a good father of a family to prevent the damage. 11 Hence, the burden of proof lies upon the bank and it cannot now disclaim liability in view of its own failure to prove not only that it exercised due diligence to prevent damage but that it was not negligent in the selection and supervision of its employees.

8. MISTAKE AND WAIVER MISTAKE: Art. 1390. The following contracts are voidable or annullable, even though there may have been

no damage to the contracting parties: xxx (2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of ratification.

Art. 1331. In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract.

* Mistake as to the identity or qualifications of one of the parties will vitiate consent only when such

identity or qualifications have been the principal cause of the contract. * A simple mistake of account shall give rise to its correction. *The concept of error must include both

(a) ignorance – which is the absence of knowledge with respect to a thing, and (b) mistake – which is a wrong conception about the said thing, or belief in the existence of some circumstance, fact, or event, which in reality does not exist.

WAIVER: Art. 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law.

ELEMENTS: (CCC) a) Must be couched in clear and unequivocal terms which leave no doubt as to the intention of a person

t give up a right or benefit which legally pertains to him b) Must not be contrary to law, public order, public policy, morals , /good customs / prejudicial to a 3rd

person with right recognized by law c) May not be casually attributed to a person when the terms thereof do not explicitly and clearly

evidence an intent to abandon a right vested in such person. GATCHALIAN V. DELIM

Reynalda Gatchalian boarded Thames mini bus owned by Delim. The bus was headed for Bauang, La Union. On the way, while the bus was running along the highway in Barrio Payocpoc, Bauang, Union, "a snapping sound" was suddenly heard at one part of the bus and, shortly thereafter, the vehicle bumped a cement flower pot on the side of the road, went off the road, turned turtle and fell into a ditch.

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Several passengers, including Gatchalian, were injured. They were promptly taken to Bethany Hospital at San Fernando, La Union, for medical treatment. Upon medical examination, petitioner was found to have sustained physical injuries on the leg, arm and forehead. • Mrs. Delim paid for all the hospital expenses. She also asked the passengers to sign a document [Joint Affidavit] stating, “That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries.

Even if Gatchalian signed this document, she still filed this case. ISSUES: W/N the document Delim had Gatchalian sign at the hospital constitutes a valid waiver. HELD: NO. THE DOCUMENT WAS NOT A VALID WAIVER. A waiver, to be valid and effective, must in the

first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. A waiver may not casually be attributed to a person when the terms that do not explicitly and clearly evidence an intent to abandon a right vested in such person.

The circumstances under which the Joint Affidavit was signed by Gatchalian need to be considered. Gatchalian was still reeling from the effects of the vehicular accident, having been in the hospital for only three days, when the purported waiver in the form of the Joint Affidavit was presented to her for signing, while reading the document, she experienced dizziness but since the other passengers who had also suffered injuries signed the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances there appears substantial doubt whether Gatchalian understood fully the import of the Joint Affidavit (prepared by Delim) she signed and whether she actually intended thereby to waive any right of action.

Moreover, for a waiver to be vlaid, it must not be contrary to law, pubic policy, morals and good customs. In this case, Delim was the owner of the minibus which takes passengers around La Union. She has a contract of carriage with them and is required to exercise extraordinary diligence when fulfilling these contractual duties. To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. The waiver is offensive to pulic policy. THEIS V. CA

Calson’s Development owned three lots in Tagaytay – Parcels Nos. 1, 2, and 3. Adjacent to parcel no. 3 was parcel no. 4, which was not owned by Calsons. Calson’s built a house on Parcel No. 3. In a subsequent survey, parcel no. 3, where the house was built, was erroneously indicated to be covered by the title to parcel no. 1. Parcel nos. 2 and 3 were mistakenly surveyed to be located where parcel no. 4 was located. Unaware of this mistake by which Calson’s appeared to be the owner of parcel no. 4, Calson’s sold what it thought was parcel nos. 2 and 3 (but what was actually parcel no. 4) to the Theis spouses. Upon execution of the deed of sale, Calson’s delivered the certificates of title to parcel nos. 2 and 3 to the spouses. The spouses then went to Germany.

About three years later, they returned to Tagaytay to plan the construction of their house. It was then that they discovered that parcel no. 4, which was sold to them, was owned by someone else, and that what was actually sold to them were parcel nos. 2 and 3. The real parcel no. 3, however, could not have been sold to them since a house had already been built thereon by Calson’s even before the execution of the contract, and its construction cost far exceeded the price paid by the spouses for the two parcels of land. The spouses insisted that they wanted parcel no. 4, but this was impossible, since Calson’s did not own it. Calson’s offered them the real parcel nos. 1 and 2 instead since these were really what it intended to sell to the spouses. The spouses refused and insisted that they wanted parcel nos. 2 and 3 since the TCTs to these lots were the ones that had been issued in their name. Calson’s then offered to return double the amount already paid by the spouses. The spouses still refused. Calson’s filed an action to annul the contract of sale.

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ISSUES: W/N Calson’s may rescind the contract on the ground of mistake HELD: YES. Art. 1331. In order that mistake may invalidate consent, it should refer to the substance of

the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract." Tolentino explains that the concept of error in this article must include both ignorance, which is the absence of knowledge with respect to a thing, and mistake properly speaking, which is a wrong conception about said thing, or a belief in the existence of some circumstance, fact, or event, which in reality does not exist. In both cases, there is a lack of full and correct knowledge about the thing. The mistake committed by the private respondent in selling parcel no. 4 to the petitioners falls within the second type. Verily, such mistake invalidated its consent and so annulment of the deed of sale is proper.

Article 1390 of the Civil Code provides that contracts where the consent is vitiated by mistake are annullable. In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract. The concept of error includes: (1) ignorance, which is the absence of knowledge with respect to a thing; and (2) mistake, which is a wrong conception about said thing, or a belief in the existence of some fact, circumstance, or event, which in reality does not exist. In both cases, there is a lack of full and correct knowledge about the thing.

In this case, Calson’s committed an error of the second type. This mistake invalidated its consent, and as such, annulment of the deed of sale is proper. The error was an honest mistake, and the good faith of Calson’s is evident in the fact that when the mistake was discovered, it immediately offered two other vacant lots to the spouses or to reimburse them with twice the amount paid.

Petitioners’ insistence in claiming parcel no. 3 on which stands a house whose value exceeds the price paid by them is unreasonable. This would constitute unjust enrichment. Moreover, when the witness for the spouses testified, he stated that what was pointed out to the spouses was a vacant lot. Therefore, they could not have intended to purchase the lot on which a house was already built.

YHT REALTY V. CA (2005)

Maurice McLoughlin, an Australian businessman who frequented the Philippines, was convinced by Brunhilda Tan to transfer hotels and patronize instead Tropicana Hotel (owned by YHT Realty Corp) for his visits and to rent the hotel’s safety deposit box. The safety deposit box could only be opened through the use of 2 keys, one 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 it, 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. McLoughlin allegedly placed the following in his safety deposit box – jewelry and 2 envelopes containing US$, one envelope containing Australian $, etc.

In one of his visits, he noticed that a few dollars were missing but shrugged it off thinking it was probably the result of bad accounting. However, again in one of his trips, he noticed that a few dollars and the jewelry were missing. Eventually, he confronted the 2 employees who had custody of the keys who admitted that Tan opened the safety deposit box. When confronted, Tan admitted she stole McLouglin’s key and was able to open the safety deposit box with the assistance of the hotel manager and the 2 employees.

Lopez and Tan signed a P/N to answer for the value of the lost items but despite this, McLoughlin insisted that the hotel must assume responsibility for the loss he suffered. Action for damages was filed in the RTC. RTC ruled in favor of McLoughlin. CA affirmed.

Lopez, as manager of the hotel, refused to accept responsibility relying on the conditions for renting the safety deposit box entitled “Undertaking For the Use of Safety Deposit Box” which stated that the guest shall release the hotel and hold it free and from any liability arising from any loss in the contents of the said deposit box for any cause whatsoever.

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ISSUE: W/N 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.

HELD: NO. 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. The owners and managers of an establishment are likewise responsible for damages caused by their employees on the occasion of their functions. 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.

The “Undertaking For The Use of Safety Deposit Box” executed by McLoughlin is void as provided in Article 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 is suppressed or diminished shall be void.

The hotel business like the common carrier’s 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.

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. With greater reason should the liability of the hotelkeeper be enforced when the missing items are taken without the guest’s knowledge and consent from a safety deposit box provided by the hotel itself, as in this case. It is only 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.

YHT’s defense on Article 2002 which exempts the hotel-keeper from liability if the loss is due to the acts of his guest, his family, or visitors cannot also hold in this case because 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 guest’s relatives and visitors.

Tort liability can exist even if there are already contractual relations. The act that breaks the contract may also be tort. 9. EMERGENCY RULE – one who suddenly finds himself in a place of danger is required to act without time to consider the best means that may be adopted to avoid the impending danger is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the emergency in which he finds himself is brought about by his own negligence. (Mckee v IAC)

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F. CRIMINAL NEGLIGENCE – Art. 365. Imprudence and negligence. — Any person who, by reckless imprudence, shall commit any act which, had it been intentional, would constitute a grave felony, shall suffer the penalty of arresto mayor in its maximum period to prision correccional in its medium period; if it would have constituted a less grave felony, the penalty of arresto mayor in its minimum and medium periods shall be imposed; if it would have constituted a light felony, the penalty of arresto menor in its maximum period shall be imposed.

Any person who, by simple imprudence or negligence, shall commit an act which would otherwise constitute a grave felony, shall suffer the penalty of arresto mayor in its medium and maximum periods; if it would have constituted a less serious felony, the penalty of arresto mayor in its minimum period shall be imposed.

Reckless imprudence consists in voluntary, but without malice, doing or falling to do an act from which material damage results by reason of inexcusable lack of precaution on the part of the person performing of failing to perform such act, taking into consideration his employment or occupation, degree of intelligence, physical condition and other circumstances regarding persons, time and place.

Simple imprudence consists in the lack of precaution displayed in those cases in which the damage impending to be caused is not immediate nor the danger clearly manifest.

Art. 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter.

Section 1. Institution of criminal and civil actions.: (a) When a criminal action is instituted, the civil

action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts presenting its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation.

When the offended party seeks to enforce civil liability against the accused by way of moral, nominal, temperate, or exemplary damages without specifying the amount thereof in the complaint or information, the filing fees therefore shall constitute a first lien on the judgment awarding such damages.

Where the amount of damages, other than actual, is specified in the complaint or information, the corresponding filing fees shall be paid by the offended party upon the filing thereof in court.

Except as otherwise provided in these Rules, no filing fees shall be required for actual damages. No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case,

but any cause of action which could have been the subject thereof may be litigated in a separate civil action.

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed.

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay additional filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal actions. (Rules of court)

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Sec. 2. When separate civil action is suspended. – After the criminal action has been commenced, the separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal action.chan robles virtual law library

If the criminal action is filed after the said civil action has already been instituted, the latter shall be suspended in whatever state it may be found before judgment on the merits. The suspension shall last until final judgment is rendered in the criminal action. Nevertheless, before judgment on the merits rendered in the civil action, the same may, upon motion of the offended party, be consolidated with the criminal action in the court trying the criminal action. In case of consolidation, the evidence already adduced in the civil action shall be deemed automatically reproduced in the criminal action without prejudice to the right of the prosecution to cross-examine the witness presented by the offended party in the criminal case and of the parties to present additional evidence. The consolidated criminal and civil actions shall be tried and decided jointly.

During the pendency of the criminal action, the running period of prescription of the civil action which cannot be instituted separately or whose proceeding has been suspended shall be tolled.

The extinction of the penal action does not carry with it extinction of the civil action. However, the civil action based on delict shall be deemed extinguished if there is a finding in a final judgment in the criminal action that the act or omission from which the civil liability may arise did not exist. (Rules of Court)

Sec. 3. When civil action may proceed independently. – In the cases provided in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action. (Rules of Court)

Sec. 4. Effect of death on civil actions. – The death of the accused after arraignment and during the

pendency of the criminal action shall extinguish the civil liability arising from the delict. However, the independent civil action instituted under section 3 of this Rule or which thereafter is instituted to enforce liability arising from other sources of obligation may be continued against the estate or legal representative of the accused after proper substitution or against said estate, as the case may be. The heirs of the accused may be substituted for the deceased without requiring the appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor heirs.

The court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30) days from notice.

A final judgment entered in favor of the offended party shall be enforced in the manner especially provided in these rules for prosecuting claims against the estate of the deceased.

If the accused dies before arraignment, the case shall be dismissed without prejudice to any civil action the offended party may file against the estate of the deceased. (Rules of Court) A separate civil action lies against the offender in a criminal act whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is also actually charged criminally, to recover damages on both scores, and would be entitled in such eventuality only to the bigger award of the two, assuming the awards made in the two cases vary.

The extinction of civil liability referred to in the Rules of Court refer exclusively to civil liability founded on Article 100 of the Revised Penal Code; whereas the civil liability fro the same act considered as a quasi-delict only an not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused.

GULA V. DIANALA (1984)

Esperanza Gula was run over and killed on the public highway by a cargo truck driven by Pedro Dianala, owned by Rejon. A criminal complaint was filed against Dianala, with no reservation to file a separate civil action. Dianala’s defense was that while the accused was driving in front of the market, Esperanza suddenly crossed the street from the right side and his truck bumped her even as he swerved to

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the left to avoid her. Court acquitted Dianala for seriously doubting the veracity of the two principal witnesses' testimonies, hence the Court has no other alternative than to acquit him of the present charge.

3 years later, Gula’s heirs sued Dianala for damages, based on quasi delict. Dianala opposed contending that "the damages claimed has been waived, abandoned, and extinguished; that the Court has no jurisdiction over the nature or subject of the suit; and that the present action is barred by prior judgment." On the other hand, Gula’s side argued that the civil liability of driver Dianala based on his tortious acts is different and distinct from his civil liability based on criminal negligence, and that his civil liability based on tort is likewise separate and distinct from the civil liability of the Rejon as owner of the vehicle. Court dismissed the case on the ground of lack of cause of action and that it was already barred by a prior judgment.

Gula’s heirs filed an MR contending that a reservation in a criminal case for purposes of filing a civil action based on quasi-delict is not necessary; that judgment in a criminal case cannot be considered as res judicata constituting a bar to an action based on tort; and that the acquittal of an employee in a criminal case does not preclude a civil action for damages against the employer based on culpa acquiliana. CA forwarded it to the SC because it involves pure questions of law.

ISSUE: W/N the TC erred in dismissing the complaint for damages on the ground of res judicata and

lack of cause of action as against the defendant-owner. HELD: YES. Article 31 of the Civil Code is applicable “When the civil action is based on an obligation not

arising from the act or omission complained of as a felony, such civil action me.' proceed independently of the criminal proceedings and regardless of the result of the latter.”

A separate civil action lies against the offender in a criminal act whether or not he is criminally prosecuted and found guilty or acquitted, provided that the offended party is not allowed, if he is also actually charged criminally, to recover damages on both scores. In other words, the extinction of civil liability in Sec. 3©, Rule 111, refer exclusively to civil liability founded on Article 100 of the Revised Penal Code; whereas the civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused.

Neither can res judicata apply as against the owner for the simple reason that he was not included as a co-accused in the criminal case. The cause of action against him is based on Article 2180 of the Civil Code and is predicated on his primary liability thereunder and not on his secondary liability under Article 103 of the Revised Penal Code.

Nor was there need to file a reservation for a separate civil action inasmuch as the civil action contemplated in the case at bar is not derived from the criminal liability but one based on culpa aquiliana under the Civil Code.

SAN ILDEFONSO LINES V. CA (1998)

In the afternoon of June 24, 1991, a Toyota Lite Ace Van being driven by its owner Annie U. Jao and a passenger bus of herein petitioner San Ildefonso Lines, Inc. (hereafter, SILI) collided with each other at the intersection of Julia Vargas Avenue and Rodriguez Lanuza Avenue in Pasig, Metro Manila, totally wrecking the Toyota van and injuring Ms. Jao and her two (2) passengers in the process.

A criminal case was thereafter filed with the Regional Trial Court of Pasig on September 18, 1991charging the driver of the bus, herein petitioner Eduardo Javier, with reckless imprudence resulting in damage to property with multiple physical injuries.

About four (4) months later, or on January 13, 1992,herein private respondent Pioneer Insurance and Surety Corporation (PISC), as insurer of the van and subrogee, filed a case for damages against petitioner SILI with the Regional Trial Court of Manila, seeking to recover the sums it paid the assured under a motor vehicle insurance policy as well as other damages, totaling P564,500.00 (P454,000.00 as actual/compensatory damages; P50,000.00 as exemplary damages; P50,000.00 as attorney's fees; P10,000.00 as litigation expenses; and P500.00 as appearance fees.)

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With the issues having been joined upon the filing of the petitioners' answer to the complaint for damages and after submission by the parties of their respective pre-trial briefs, petitioners filed on September 18, 1992 a Manifestation and Motion to Suspend Civil Proceedings grounded on the pendency of the criminal case against petitioner Javier in the Pasig RTC and the failure of respondent PISC to make a reservation to file a separate damage suit in said criminal action. This was denied by the Manila Regional Trial Court in its Order dated July 21, 1993

After their motion for reconsideration of said July21, 1993 Order was denied, petitioners elevated the matter to this Court via petition for certiorari which was, however, referred to public respondent Court of Appeals for disposition. On February 24, 1995, a decision adverse to petitioners once again was rendered by respondent court, upholding the assailed Manila Regional Trial Court Order. Hence, this petition for review after a motion for reconsideration of said respondent court judgment was denied.

ISSUES: (1) WON an independent civil action based on quasi-delict under Article 2176 of the Civil Code

can be filed if no reservation was made in the said criminal case (2) WON a subrogee of an offended party can maintain an independent civil action during the pendency

of a criminal action when no reservation of the right to file an independent civil action was made in the criminal action and despite the fact that the private complainant is actively participating through a private prosecutor in the aforementioned criminal case

HELD (1) NO - On the chief issue of "reservation", at the fore is Section 3, Rule 111 of the Rules of Court

which reads:"Sec. 3. When civil action may proceed independently. -- In the cases provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action which has been reserved may be brought by the offended party, shall proceed independently of the criminal action, and shall require only a preponderance of evidence."

Even though these so-called "independent civil actions" based on the aforementioned Civil Code articles are the exceptions to the primacy of the criminal action over the civil action as set forth in Section 2 of Rule 111, it is easily deducible from the present wording of Section 3 as brought about by the1988 amendments to the Rules on Criminal Procedure -- particularly the phrase "… which has been reserved " -- that the "independent" character of these civil actions does not do away with the reservation requirement. In other words, prior reservation is a condition sine qua non before any of these independent civil actions can be instituted and thereafter have a continuous determination apart from or simultaneous with the criminal action.

According to Justice Jose Y. Feria, remedial law expert and a member of the committee which drafted the 1988 amendments, whose learned explanation on the matter was aptly pointed out by petitioners, “the 1988 amendment expands the scope of the civil action which is deemed impliedly instituted with the criminal action unless waived, reserved or previously instituted. Under the present Rule as amended, such a civil action includes not only recovery of indemnity under the Revised Penal Code and damages under Articles 32, 33, 34 of the Civil Code of the Philippines, but also damages under Article 2176 (quasi-delicts) of the said code.

It should be noted that while it was ruled in Abellavs. Marave (57 SCRA 106) that a reservation of the right to file an independent civil action is not necessary, such a reservation is necessary under the amended rule. Without such reservation, the civil action is deemed impliedly instituted with the criminal action, unless previously waived or instituted.

Far from altering substantive rights, the primary purpose of the reservation is, to borrow the words of the Court in " Caños v. Peralta ":"… to avoid multiplicity of suits, to guard against oppression and abuse, to prevent delays, to clear congested dockets, to simplify the work of the trial court; in short, the attainment of justice with the least expense and vexation to the parties-litigants."

(2) NO- Private respondent PISC, as subrogee, is not exempt from the reservation requirement with

respect to its damages suit based on quasi-delict arising from the same act or omission of petitioner Javier complained of in the criminal case. As private respondent PISC merely stepped into the shoes of Ms. Jao (as owner of the insured Toyota van), then it is bound to observe the procedural requirements which Ms. Jao ought to follow had she herself instituted the civil case. Dispositive The assailed decision of the Court of

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Appeals dated February 24, 1995 and the Resolution dated April 3,1995 denying the motion for reconsideration thereof are reversed. The “manifestation and motion to suspend civil proceedings" filed by petitioners is granted

----- END OF DEFENSES -----

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IV. VICARIOUS / PRIMARY / SOLIDARY LIABILITY – the imposition of liability on one person for the actionable conduct of another, based solely on a relationship between two persons. Indirect or imputed legal responsibility for acts of another. In the Philippines, vicarious liability is generally not governed by the doctrine of respondeat superior.

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, the mother, are responsible for the damages caused

by the minor children who live in their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their

authority and live in their company. 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.

The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable.

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody.

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.

Who are Liable: (O-PEST) 1) Parents or Guardians 2) Owners and Managers of Enterprises 3) Employers 4) State 5) Teachers and Heads of Establishments

1. PARENTS / GUARDIANS Family Code, Art. 221. Parents and other persons exercising parental authority shall be civilly liable

for the injuries and damages caused by the acts or omissions of their unemancipated children living in their company and under their parental authority subject to the appropriate defenses provided by law

Guardian– is a person in whom the law has entrusted the custody and control of the person or estate or both of an infant, insane, or other persons incapable of managing his own affair. It involves not only custody, that is immediate care and control, but those of one in loco parentis (in the place of a parent). Hence, even if the ward is already of age, guardians have the same liability as persons exercising parental authority. (Limit the liability of guardians to the acts of persons of sound mind who live in the company of the guardian)

Kinds of Guardians: (LCD) 1) The legal guardians or the parents including those exercising substitute and special parental authority 2) The court appointed guardians 3) The de facto guardians or persons not legally appointed as guardians

Note: Art. 2182. If the minor or insane person causing damage has no parents or guardian, the minor

or insane person shall be answerable with his own property in an action against him where a guardian ad litem shall be appointed.

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2. OWNERS AND MANAGERS OF ENTERPRISES

Owners and Managers of Enterprises Employers Covers negligent acts of employers committed either in the service of the branches or on the occasion of their functions

Negligent acts of employees acting within the scope of their assigned tasks

An expansion of the 4th paragraph in both employer and acts included.

To hold an employer liable, it is necessary to establish the ff: 1) The employer-employee relationship 2) The employee was acting within the scope of his assigned task when the tort complained of was committed. Acts done within the scope of the employees assigned tasks include any act done by an employee in furtherance of the interests of the employer or for the account o the employer at the time of the infliction of the injury or damages.

MANAGER – used in the sense of an employer. Not a managerial employee. PESTANO V. SUMAYANG (2000)

At 2:00 o’clock on the afternoon of August 9, 1986, Ananias Sumayang was riding a motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him was his friend Manuel Romagos. As they came upon a junction, they were hit by a passenger bus driven by Petitioner Gregorio Pestaño and owned by Petitioner Metro Cebu Autobus Corporation, which had tried to overtake them, sending the motorcycle and its passengers hurtling upon the pavement. Both Sumayang and Romagos were rushed to the hospital in Sogod, where Sumayang was pronounced dead on arrival. Romagos was transferred to the Cebu Doctors’ Hospital, but he died the day after.

The heirs of Sumayang instituted criminal action against Pestano and filed an action for damages against the driver, Pestano and Metro Cebu as the owner and operator of the bus.

The CA and RTC ruled that Pestano was negligent and is therefore liable criminally and civilly. The appellate court opined that Metro Cebu had shown laxity in the conduct of its operations and in the supervision of its employees. By allowing the bus to ply its route despite the defective speedometer, said petitioner showed its indifference towards the proper maintenance of its vehicles. Having failed to observe the extraordinary diligence required of public transportation companies, it was held vicariously liable to the victims of the vehicular accident.

ISSUE: W/N the CA erred in holding the bus owner and operator vicariously liable HELD: The Court of Appeals is correct in holding the bus owner and operator vicariously liable. Under

Articles 2180 and 2176 of the Civil Code, owners and managers are responsible for damages caused by their employees. 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. The CA said that allowing Pestaño to ply his route with a defective speedometer showed laxity on the part of Metro Cebu in the operation of its business and in the supervision of its employees. The negligence alluded to here is in its supervision over its driver, not in that which directly caused the accident. The fact that Pestaño was able to use a bus with a faulty speedometer shows that Metro Cebu was remiss in the supervision of its employees and in the proper care of its vehicles. It had thus failed to conduct its business with the diligence required by law. REAL V. BELO (2007)

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Virginia Real owned and operated Wasabe tfood stall while Sisenando Belo owned and operated BS Masters food stall, both located at the food center of a certain school. A fire broke out at Real’s Wasabe stall and such fire spread and gutted other stalls including Belo’s. Upon investigation, it was found out that the fire broke out due to the leaking fumes coming from the LPG stove and tank installed at Real’s stall.

For the loss of his fastfood stall due to the fire, Belo demanded compensation from Real but Real refused so Belo filed a complaint for damages. Belo alleged that Real failed to exercise due diligence in the upkeep and maintenance of her cooking equipments, as well as the selection and supervision of her employees and that such negligence was the proximate cause of the fire. Real denied liability on the grounds that the fire was a fortuitous event and that she exercised due diligence in the selection and supervision of her employees.

ISSUE: W/N the fire is a fortuitous event which would prevent Belo from claiming damages. HELD: NO. Real is NEGLIGENT. Jurisprudence defines elements of a “fortuitous event” as follows: (a)

the cause of the unforeseen and unexpected occurrence must be independent of human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.

It is established by evidence that the fire originated from leaking fumes from the LPG stove and tank installed at Real’s fastfood stall and her employees failed to prevent the fire from spreading and destroying the other fastfood stalls. Such circumstances do not support Real’s theory of fortuitous event.

Whenever an employee’s 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. 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. In this case, Real not only failed to show that she submitted proof that the LPG stove and tank in her fastfood stall were maintained in good condition and periodically checked for defects but she also failed to submit proof that she exercised the diligence of a good father of a family in the selection and supervision of her employees. CASTILEX INDUSTRIAL V. VASQUEZ – discussed 3. EMPLOYERS Defenses of an Employer: 1) By denying the existence of an employer-employee relationship 2) By establishing that the employer exercised due diligence in the selection and supervision of the employee.

Subsidiary Liability of Employer Primary Liability of Employer Art. 103. Subsidiary civil liability of other persons. — The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties. (Revised Penal Code)

Based on Quasi-Delict Art. 2180. 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

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though the former are not engaged in any business or industry.

The conviction of the employee is conclusive on the negligence or fault of the employee and the employer cannot present evidence to prove that his employee was not at fault. The defense that he exercised due diligence in the selection and supervision of the employee is not available to him.

Requisites for the Subsidiary Liability of the Employer to Attach: 1) That the employer is engaged in any kind of industry 2) That the employee was convicted of the offense committed in the discharge of his duties 3) That the employee is insolvent Insolvency – the inability or the lack of means to pay one’s debts as they fall due. Doctrine of Apparent Authority – It imposes liability, not as the result of the reality of a contractual relationship, but rather because of the actions of a principal or an employer in somehow misleading the public into believing that the relationship or the authority exists. It is essentially the concept of estoppel. (Professional Services v Agana) A hospital is not liable for the negligence of an independent contractor-physician EXCEPT: When the physician is the ostensible agent of the hospital. ELEMENTS: (Nograles v CMC) 1) Holding out – focuses on the hospital’s manifestations; an inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. In this regard, the hospital need not make express representations to the patient that the treating physician is an employee of the hospital; rather a representation may be general and implied 2) Justifiable Reliance – an inquiry on whether the plaintiff acted in a reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. CARTICIANO V. NUVAL

Plaintiff Zacarias Carticiano was on his way home to Imus, Cavite. He was driving his father’s Ford Laser car. On the same date and time, defendant Nuval’s owner-type Jeep, then driven by defendant Darwin was traveling on the opposite direction going to Parañaque. When the two cars were about to pass one another, Darwin veered his vehicle to his left going to the center island of the highway an occupied the lane which plaintiff Zacarias was traversing. Zacarias’ Ford Laser collided head-on with Nuval’s Jeep. Darwin immediately fled from the scene. Zacarias suffered multiple fracture. He underwent a leg operation and physical therapy. Nuval offered P100,000.00 as compensation for the injuries caused. Plaintiffs refused to accept it. Plaintiffs filed a criminal suit against Darwin and a civil suit against defendants for damages. Trial court ruled infavor of plaintiffs. CA reversed the decision.

ISSUE: W/N employer Nuval can be held liable. RULING: Petition granted. Article 2180 of the Civil Code provides that employers shall be liable for

damages caused by their employees acting within the scope of their assigned tasks. The facts established in the case at bar show that Darwin was acting within the scope of the authority given him when the collision occurred. That he had been hired only to bring respondent’s children to and from school must be rejected. True, this may have been one of his assigned tasks, but no convincing proof was presented showing that it

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was his only task. His authority was to drive Nuval’s vehicle. Third parties are not bound by the allegation that the driver was authorized to operate the jeep only when the employer’s children were on board the vehicle. Giving credence to this outlandish theory would enable employers to escape their legal liabilities with impunity. Such loophole is easy to concoct and is simply unacceptable.

The claim of respondent that he had exercised the diligence of a good father of a family is not borne out by the evidence. Neither is it supported by logic. His main defense that at the time of the accident Darwin was no longer his employee, having been merely hired for a few days, is inconsistent with his other argument of due diligence in the selection of an employee. Once a driver is proven negligent in causing damages, the law presumes the vehicle owner equally negligent and imposes upon the latter the burden of proving proper selection of employee as a defense. Respondent failed to show that he had satisfactorily discharged this burden. LG FOODS V. PAGAPONG – AGRAVIADOR (2006)

7-yr old Charles Vallejera was hit by a Ford Fiera van owned by L.G. Foods, and driven at the time by their employee, Vincent. Charles died as a result of the accident. An Information for Reckless Imprudence Resulting to Homicide was filed against the driver before but the trial could not be concluded because the accused driver committed suicide, evidently bothered by conscience and remorse. On account thereof, the court dismissed the criminal case.

The parents of the boy then filed a complaint for damages against the LG Foods as employers of the deceased driver, basically alleging that as such employers, they failed to exercise due diligence in the selection and supervision of their employees. LG Foods denied liability claiming they exercised the required due diligence in the selection and supervision of their employees, including the deceased driver. They filed a Motion to Dismiss, principally arguing that the complaint is basically a "claim for subsidiary liability against an employer" under the provision of Article 103 of the Revised Penal Code. They contend that there must first be a judgment of conviction against their driver as a condition sine qua non to hold them liable. Ergo, since the driver died during the pendency of the criminal action, the sine qua non condition for their subsidiary liability was not fulfilled, hence the lack of cause of action on the part of the Vallejeras. They further argue that since the the Vallejeras did not make a reservation to institute a separate action for damages when the criminal case was filed, the damage suit in question is deemed instituted with the dismissed criminal action. TC denied the MTD. CA affirmed.

ISSUE: Whether the Vallejeras' cause of action in the civil case is founded on Article 103 of the RPC as

argued by LG Foods or was it derived from Article 2180 of the CC, as ruled by the lower courts. HELD: Upon examination of the complaint of spouses, nothing in their allegations suggests that LG

Foods is being made to account for their subsidiary liability under Article 103 of the RPC. As correctly pointed out by the trial court, the complaint did not even aver the basic elements for the subsidiary liability of an employer under Article 103 of the Revised Penal Code, such as the prior conviction of the driver in the criminal case filed against him nor his insolvency. Admittedly, the complaint did not explicitly state that the Vallejeras were suing the defendant petitioners for damages based on quasi‐delict. Clear it is, however, from the allegations of the complaint that quasi-delict was their choice of remedy. To stress, the spouses alleged in their complaint gross fault and negligence on the part of the driver and the failure of the petitioners, as employers, to exercise due diligence in the selection and supervision of their employees. The spouses further alleged that the petitioners are civilly liable for the negligence/imprudence of their driver since they failed to exercise the necessary diligence required of a good father of the family in the selection and supervision of their employees, which diligence, if exercised, could have prevented the vehicular accident that resulted to the death of their 7year old son.

An act or omission causing damage to another may give rise to two separate civil liabilities on the part of the offender, i.e., 1) civil liability ex delicto; and 2) independent civil liabilities, such as those (a) not arising from an act or omission complained of as felony (e.g., culpa contractual or obligations arising from law; the intentional torts; and culpa aquiliana); or (b) where the injured party is granted a right to file an action independent and distinct from the criminal action. Either of these two possible liabilities may be

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enforced against the offender. Stated otherwise, victims of negligence or their heirs have a choice between an action to enforce the civil liability arising from culpa criminal under Article 100 of the Revised Penal Code, and an action for quasi-­‐delict (culpa aquiliana) under Articles 2176 to 2194 of the Civil Code. If, as here, the action chosen is for quasi-­‐delict, the plaintiff may hold the employer liable for the negligent act of its employee, subject to the employer's defense of exercise of the diligence of a good father of the family. On the other hand, if the action chosen is for culpa criminal, the plaintiff can hold the employer subsidiarily liable only upon proof of prior conviction of its employee. Article 1161 of the Civil Code provides that civil obligation arising from criminal offenses shall be governed by penal laws subject to the provision of Article 2177 and of the pertinent provision of Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of this Book, regulating damages. Plainly, Article 2177 provides for the alternative remedies the plaintiff may choose from in case the obligation has the possibility of arising indirectly from the delict/crime or directly from quasi-­‐ delict/tort. The choice is with the plaintiff who makes known his cause of action in his initiatory pleading or complaint, and not with the defendant who cannot ask for the dismissal of the plaintiff's cause of action or lack of it based on the defendant's perception that the plaintiff should have opted to file a claim under Article 103 of the Revised Penal Code. Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is not conditioned upon prior recourse against the negligent employee and a prior showing of insolvency of such employee.

Here, the complaint sufficiently alleged that the death of the couple's minor son was caused by the negligent act of the petitioners' driver; and that the petitioners themselves were civilly liable for the negligence of their driver for failing "to exercise the necessary diligence required of a good father of the family in the selection and supervision of [their] employee, the driver, which diligence, if exercised, would have prevented said accident." Had the respondent spouses elected to sue the petitioners based on Article 103 of the Revised Penal Code, they would have alleged that the guilt of the driver had been proven beyond reasonable doubt; that such accused driver is insolvent; that it is the subsidiary liability of the defendant petitioners as employers to pay for the damage done by their employee (driver) based on the principle that every person criminally liable is also civilly liable. Since there was no conviction in the criminal case against the driver, precisely because death intervened prior to the termination of the criminal proceedings, the spouses' recourse was, therefore, to sue the petitioners for their direct and primary liability based on quasi-delict. Besides, it is worthy to note that the petitioners, in their Answer with Compulsory Counter-Claim, repeatedly made mention of Article 2180 of the Civil Code and anchored their defense on their allegation that "they had exercised due diligence in the selection and supervision of their employees." The Court views this defense as an admission that indeed the petitioners acknowledged the private respondents' cause of action as one for quasi-delict under Article 2180 of the Civil Code. The circumstance that no reservation to institute a separate civil action for damages was made when the criminal case was filed is of no moment for the simple reason that the criminal case was dismissed without any pronouncement having been made therein. In reality, therefore, it is as if there was no criminal case to speak of in the first place. And for the petitioners to insist for the conviction of their driver as a condition sine qua non to hold them liable for damages is to ask for the impossible. RAMOS V. CA (1999 decision)

Erlinda Ramos underwent an operation known as cholecystectomy (removal of stone in her gallbladder) under the hands of Dr. Orlino Hosaka. He was accompanied by Dr. Perfecta Gutierrez, an anesthesiologist which Dr. Hosaka recommended since Ramos (and her husband Rogelio) did not know any.

The operation was schedule at 9am of June 17, 1985 but was however delayed for three hours due to the late arrival of Dr. Hosaka.

Dr. Gutierrez subsequently started trying to intubate her. And at around 3pm, Erlinda was seen being wheeled to the Intensive Care Unit (ICU). The doctors explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in the ICU for a month. She was released from the hospital only four months later or on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose condition until she died on August 3, 1999.

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RTC ruled in favor of the petitioners, holding the defendants guilty of, at the very least, negligence in the performance of their duty to plaintiff-patient Erlinda Ramos.

On appeal to CA, the said decision was reversed – dismissing the complaint against the defendants. Hence this petition.

ISSUES: W/N the private respondents should be held liable for the injury caused to Erlinda and her

family? HELD: YES. Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction

speaks for itself." The phrase "res ipsa loquitur'' is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiff's prima facie case, and present a question of fact for defendant to meet with an explanation.

The doctrine of res ipsa loquitur is simply a recognition of the postulate that, as a matter of common knowledge and experience, the very nature of certain types of occurrences may justify an inference of negligence on the part of the person who controls the instrumentality causing the injury in the absence of some explanation by the defendant who is charged with negligence.

However, much has been said that res ipsa loquitur is not a rule of substantive law and, as such, does not create or constitute an independent or separate ground of liability. Instead, it is considered as merely evidentiary or in the nature of a procedural rule. It is regarded as a mode of proof, or a mere procedural of convenience since it furnishes a substitute for, and relieves a plaintiff of, the burden of producing specific proof of negligence. Hence, mere invocation and application of the doctrine does not dispense with the requirement of proof of negligence. It is simply a step in the process of such proof, permitting the plaintiff to present along with the proof of the accident, enough of the attending circumstances to invoke the doctrine, creating an inference or presumption of negligence, and to thereby place on the defendant the burden of going forward with the proof. Still, before resort to the doctrine may be allowed, the following requisites must be satisfactorily shown:

1. The accident is of a kind which ordinarily does not occur in the absence of someone's 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.

Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician has done a negligent act or that he has deviated from the standard medical procedure, when the doctrine of res ipsa loquitur is availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury itself provides the proof of negligence. The reason is that the general rule on the necessity of expert testimony applies only to such matters clearly within the domain of medical science, and not to matters that are within the common knowledge of mankind which may be testified to by anyone familiar with the facts. When the doctrine is appropriate, all that the patient must do is prove a nexus between the particular act or omission complained of and the injury sustained while under the custody and management of the defendant without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa loquitur is allowed because there is no other way, under usual and ordinary conditions, by which the patient can obtain redress for injury suffered by him.

We find the doctrine of res ipsa loquitur appropriate in the case at bar. As will hereinafter be explained, the damage sustained by Erlinda in her brain prior to a scheduled gall bladder operation presents a case for the application of res ipsa loquitur.

In the present case, Erlinda submitted herself for cholecystectomy and expected a routine general surgery to be performed on her gall bladder. On that fateful day she delivered her person over to the care, custody and control of private respondents who exercised complete and exclusive control over her. At the time of submission, Erlinda was neurologically sound and, except for a few minor discomforts, was likewise physically fit in mind and body. However, during the administration of anesthesia and prior to the performance of cholecystectomy she suffered irreparable damage to her brain. Thus, without undergoing surgery, she went out of the operating room already decerebrate and totally incapacitated. Obviously, brain

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damage, which Erlinda sustained, is an injury which does not normally occur in the process of a gall bladder operation. In fact, this kind of situation does not in the absence of negligence of someone in the administration of anesthesia and in the use of endotracheal tube. Normally, a person being put under anesthesia is not rendered decerebrate as a consequence of administering such anesthesia if the proper procedure was followed. Furthermore, the instruments used in the administration of anesthesia, including the endotracheal tube, were all under the exclusive control of private respondents, who are the physicians-in-charge. Likewise, petitioner Erlinda could not have been guilty of contributory negligence because she was under the influence of anesthetics which rendered her unconscious.

We disagree with the findings of the Court of Appeals. We hold that private respondents were unable to disprove the presumption of negligence on their part in the care of Erlinda and their negligence was the proximate cause of her piteous condition.

Dr. Gutierrez (anesthesiologist) is held liable for failure to perform the necessary pre-operative evaluation which includes taking the patient's medical history, review of current drug therapy, physical examination and interpretation of laboratory data. This physical examination performed by the anesthesiologist is directed primarily toward the central nervous system, cardiovascular system, lungs and upper airway. A thorough analysis of the patient's airway normally involves investigating the following: cervical spine mobility, temporomandibular mobility, prominent central incisors, diseased or artificial teeth, ability to visualize uvula and the thyromental distance.

In the case at bar, respondent Dra. Gutierrez admitted that she saw Erlinda for the first time on the day of the operation itself, on 17 June 1985. Before this date, no prior consultations with, or pre-operative evaluation of Erlinda was done by her. Until the day of the operation, respondent Dra. Gutierrez was unaware of the physiological make-up and needs of Erlinda. She was likewise not properly informed of the possible difficulties she would face during the administration of anesthesia to Erlinda. Respondent Dra. Gutierrez' act of seeing her patient for the first time only an hour before the scheduled operative procedure was, therefore, an act of exceptional negligence and professional irresponsibility. The measures cautioning prudence and vigilance in dealing with human lives lie at the core of the physician's centuries-old Hippocratic Oath. Her failure to follow this medical procedure is, therefore, a clear indicia of her negligence.

Having failed to observe common medical standards in pre-operative management and intubation, respondent Dra. Gutierrez' negligence resulted in cerebral anoxia and eventual coma of Erlinda.

Dr. Hosaka, being the head of the surgical team (“captain of the ship”), it was his responsibility to see to it that those under him perform their task in the proper manner. Respondent Dr. Hosaka's negligence can be found in his failure to exercise the proper authority (as the "captain" of the operative team) in not determining if his anesthesiologist observed proper anesthesia protocols. In fact, no evidence on record exists to show that respondent Dr. Hosaka verified if respondent Dra. Gutierrez properly intubated the patient. Furthermore, it does not escape us that respondent Dr. Hosaka had scheduled another procedure in a different hospital at the same time as Erlinda's cholecystectomy, and was in fact over three hours late for the latter's operation. Because of this, he had little or no time to confer with his anesthesiologist regarding the anesthesia delivery. This indicates that he was remiss in his professional duties towards his patient. Thus, he shares equal responsibility for the events which resulted in Erlinda's condition.

Notwithstanding the general denial made by respondent hospital to the effect that the respondent doctors (referred to as “consultants”) in this case are not their employees, there is a showing that the hospital exercises significant control in the hiring and firing of consultants and in the conduct of their work within the hospital premises.

The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also for those of others based on the former's responsibility under a relationship of patria potestas. Such responsibility ceases when the persons or entity concerned prove that they have observed the diligence of a good father of the family to prevent damage. In other words, while the burden of proving negligence rests on the plaintiffs, once negligence is shown, the burden shifts to the respondents (parent, guardian, teacher or employer) who should prove that they observed the diligence of a good father of a family to prevent damage.

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In the instant case, respondent hospital, apart from a general denial of its responsibility over respondent physicians, failed to adduce evidence showing that it exercised the diligence of a good father of a family in the hiring and supervision of the latter. It failed to adduce evidence with regard to the degree of supervision which it exercised over its physicians. In neglecting to offer such proof, or proof of a similar nature, respondent hospital thereby failed to discharge its burden under the last paragraph of Article 2180. Having failed to do this, respondent hospital is consequently solidarily responsible with its physicians for Erlinda's condition.

The CA decision and resolution are hereby modified so as to award in favor of petitioners, and solidarily against private respondents the following: 1) P1,352,000.00 as actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8,000.00 up to the time that petitioner Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each as exemplary damages and attorney's fees; and, 5) the costs of the suit. RAMOS v. CA (2002 resolution)

(SAME FACTS) Petitioners filed with the RTC a civil case for damages; the present petition is the 2nd MR of the private respondents in the SC, the main decision was rendered in December 29, ‘00.

ISSUE: W/N the private respondents should be held liable for the injury caused to Erlinda and her

family? HELD: YES. On the part of Dr. Gutierrez, her failure to exercise the standards of care in the

administration of anesthesia on a patient through the non-performance of the preanesthetic/preoperative evaluation prior to an operation. The injury incurred by petitioner Erlinda does not normally happen absent any negligence in the administration of anesthesia and in the use of an endotracheal tube. As was noted in our Decision, the instruments used in the administration of anesthesia, including the endotracheal tube, were all under the exclusive control of private respondents Dr. Gutierrez and Dr. Hosaka. Thus the doctrine of res ipsa loquitor can be applied in this case.

• Such procedure was needed for 3 reasons: (1) to alleviate anxiety; (2) to dry up the secretions and; (3) to relieve pain. Now, it is very important to alleviate anxiety because anxiety is associated with the outpouring of certain substances formed in the body called adrenalin. When a patient is anxious there is an outpouring of adrenalin which would have adverse effect on the patient. One of it is high blood pressure, the other is that he opens himself to disturbances in the heart rhythm, which would have adverse implications. So, we would like to alleviate patient’s anxiety mainly because he will not be in control of his body there could be adverse results to surgery and he will be opened up; a knife is going to open up his body. (Dr. Camagay)

On the part of Dr. Hosaka, while his professional services were secured primarily for their performance

of acts within their respective fields of expertise for the treatment of petitioner Erlinda, and that one does not exercise control over the other, they were certainly not completely independent of each other so as to absolve one from the negligent acts of the other physician.

• First, it was Dr. Hosaka who recommended to petitioners the services of Dr. Gutierrez. In effect, he represented to petitioners that Dr. Gutierrez possessed the necessary competence and skills. Drs. Hosaka and Gutierrez had worked together since 1977. Whenever Dr. Hosaka performed a surgery, he would always engage the services of Dr. Gutierrez to administer the anesthesia on his patient. Second, Dr. Hosaka himself admitted that he was the attending physician of Erlinda. Thus, when Erlinda showed signs of cyanosis, it was Dr. Hosaka who gave instructions to call for another anesthesiologist and cardiologist to help resuscitate Erlinda. Third, it is conceded that in performing their responsibilities to the patient, Drs. Hosaka and Gutierrez worked as a team. Their work cannot be placed in separate watertight compartments because their duties intersect with each other.

It is equally important to point out that Dr. Hosaka was remiss in his duty of attending to petitioner Erlinda promptly, for he arrived more than three (3) hours late for the scheduled operation. The

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cholecystectomy was set for June 17, 1985 at 9:00 a.m., but he arrived at DLSMC only at around 12:10 p.m. In reckless disregard for his patient’s well being, Dr. Hosaka scheduled two procedures on the same day, just thirty minutes apart from each other, at different hospitals. Thus, when the first procedure (protoscopy) at the Sta. Teresita Hospital did not proceed on time, Erlinda was kept in a state of uncertainty at the DLSMC.

On the part of the hospital (DLSMC), since there was NO employer-employee relationship between the hospital and Dr. Gutierrez and Dr. Hosaka established in this case, the hospital cannot be held liable under Art. 2180 of the Civil Code. The contract of the hospital with its consultants is separate and distinct from the contract with its patients. NOGALES V. CAPITOL MEDICAL

Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old, was under the exclusive prenatal care of Dr. Oscar Estrada ("Dr. Estrada") beginning on her fourth month of pregnancy or as early as December 1975. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted an increase in her blood pressure and development of leg edema5 indicating preeclampsia,6 which is a dangerous complication of pregnancy.

Around midnight of 25 May 1976, Corazon started to experience mild labor pains prompting Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada at his home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center ("CMC").

On 26 May 1976, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse noted the written admission request8 of Dr. Estrada. Upon Corazon's admission at the CMC, Rogelio Nogales ("Rogelio") executed and signed the "Consent on Admission and Agreement"9 and "Admission Agreement."10 Corazon was then brought to the labor room of the CMC. Dr. Rosa Uy ("Dr. Uy"), who was then a resident physician of CMC, conducted an internal examination of Corazon. Dr. Uy then called up Dr. Estrada to notify him of her findings. Based on the Doctor's Order Sheet,11 around 3:00 a.m., Dr. Estrada ordered for 10 mg. of valium to be administered immediately by intramuscular injection. Dr. Estrada later ordered the start of intravenous administration of syntocinon admixed with dextrose, 5%, in lactated Ringers' solution, at the rate of eight to ten micro-drops per minute. According to the Nurse's Observation Notes,12 Dr. Joel Enriquez ("Dr. Enriquez"), an anesthesiologist at CMC, was notified at 4:15 a.m. of Corazon's admission. Subsequently, when asked if he needed the services of an anesthesiologist, Dr. Estrada refused. Despite Dr. Estrada's refusal, Dr. Enriquez stayed to observe Corazon's condition.

At 6:00 a.m., Corazon was transferred to Delivery Room No. 1 of the CMC. At 6:10 a.m., Corazon's bag of water ruptured spontaneously. At 6:12 a.m., Corazon's cervix was fully dilated. At 6:13 a.m., Corazon started to experience convulsions. At 6:15 a.m., Dr. Estrada ordered the injection of ten grams of magnesium sulfate. However, Dr. Ely Villaflor ("Dr. Villaflor"), who was assisting Dr. Estrada, administered only 2.5 grams of magnesium sulfate. At 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to extract Corazon's baby. In the process, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly torn. The baby came out in an apnic, cyanotic, weak and injured condition. Consequently, the baby had to be intubated and resuscitated by Dr. Enriquez and Dr. Payumo. At 6:27 a.m., Corazon began to manifest moderate vaginal bleeding which rapidly became profuse. Corazon's blood pressure dropped from 130/80 to 60/40 within five minutes. There was continuous profuse vaginal bleeding. The assisting nurse administered hemacel through a gauge 19 needle as a side drip to the ongoing intravenous injection of dextrose. At 7:45 a.m., Dr. Estrada ordered blood typing and cross matching with bottled blood. It took approximately 30 minutes for the CMC laboratory, headed by Dr. Perpetua Lacson ("Dr. Lacson"), to comply with Dr. Estrada's order and deliver the blood. At 8:00 a.m., Dr. Noe Espinola ("Dr. Espinola"), head of the Obstetrics-Gynecology Department of the CMC, was apprised of Corazon's condition by telephone. Upon being informed that Corazon was bleeding profusely, Dr. Espinola ordered immediate hysterectomy. Rogelio was made to sign a "Consent to Operation."13

Due to the inclement weather then, Dr. Espinola, who was fetched from his residence by an ambulance, arrived at the CMC about an hour later or at 9:00 a.m. He examined the patient and ordered some resuscitative measures to be administered. Despite Dr. Espinola's efforts, Corazon died at 9:15 a.m. The cause of death was "hemorrhage, post partum."14

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On 14 May 1980, petitioners filed a complaint for damages15 with the Regional Trial Court16 of Manila against CMC, Dr. Estrada, Dr. Villaflor, Dr. Uy, Dr. Enriquez, Dr. Lacson, Dr. Espinola, and a certain Nurse J. Dumlao for the death of Corazon. Petitioners mainly contended that defendant physicians and CMC personnel were negligent in the treatment and management of Corazon's condition. Petitioners charged CMC with negligence in the selection and supervision of defendant physicians and hospital staff.

ISSUE: W/N CMC should be held liable HELD: YES • The mere fact that a hospital permitted a physician to practice medicine and use its

facilities is not sufficient to render the hospital liable for the negligence of a physician who is an independent contractor

There is no proof that defendant physician was an employee of defendant hospital or that the latter had reason to know that any acts of malpractice would take place

• Borrowed Servant Doctrine – once the surgeon enters the operating room and takes charge of the proceedings, the acts or omissions of operating room personnel, and any negligence associated with such acts or omissions, are imputable to the surgeon.

- While the assisting physicians and nurses may be employed by the hospital, or engaged by the patient, they normally become the temporary servants or agents of the surgeon in charge while the operation is in progress, and liability may be imposed upon the surgeon for their negligent acts under the doctrine of respondeat superior

- A hospital is the employer, master, or principal of a physician employee, servant, or agent, and may be held liable for the physician’s negligence

While "consultants" are not, technically employees, a point which respondent hospital asserts in

denying all responsibility for the patient's condition, the control exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages.

- In assessing whether such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians.

After a thorough examination of the voluminous records of this case, the Court finds no single evidence

pointing to CMC's exercise of control over Dr. Estrada's treatment and management of Corazon's condition. o It is undisputed that throughout Corazon's pregnancy, she was under the exclusive prenatal care of

Dr. Estrada. At the time of Corazon's admission at CMC and during her delivery, it was Dr. Estrada, assisted by Dr. Villaflor, who attended to Corazon.

o There was no showing that CMC had a part in diagnosing Corazon's condition. o While Dr. Estrada enjoyed staff privileges at CMC, such fact alone did not make him an employee of

CMC.42 CMC merely allowed Dr. Estrada to use its facilities43 when Corazon was about to give birth, which CMC considered an emergency. Considering these circumstances, Dr. Estrada is not an employee of CMC, but an independent contractor.

• Question now is whether CMC is automatically exempt from liability considering that Dr. Estrada is an

independent contractor-physician. o General Rule: Hospital is NOT liable for the negligence of an independent contractor-physician o Exception: ) - a hospital can be held vicariously liable for

the negligent acts of a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient knows, or should have known, that the physician is an independent contractor.

• Hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital • Where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital had

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knowledge of and acquiesced in them; and (3) t • The plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence

o 2 Factors to determine liability of an independent contractorphysician: (1) Hospital’s manifestations • Inquiry whether the hospital acted in a manner which would lead a

reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital

(2) Patient’s reliance • Inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudenc

o Circumstances of

physicians of CMC gave the impression that he, as a member of the CMC’s medical staff, was collaborating

consideration of his connection with a reputable hospital (CMC) • Played a significant role in the Spouses’ decision

WHEREFORE, CMC is found liable to pay the corresponding damages PROFESSIONAL SERVICES V. NATIVIDAD

Natividad Agana was rushed to the Medical City General Hospital (Medical City Hospital) because of difficulty of bowel movement and bloody anal discharge. After a series of medical examinations, Dr. Miguel Ampil diagnosed her to be suffering from "cancer of the sigmoid."

Dr. Ampil, assisted by the medical staff of the Medical City Hospital, performed an anterior resection surgery on Natividad. A hysterectomy had to be performed on her, which was completed by Dr. Fuentes. And from that point, Dr. Ampil took over, completed the operation and closed the incision.

However, the operation appeared to be flawed. In the corresponding Record of Operation, the attending nurses entered the remarks to the effect that 2 sponges were lacking and after an unsuccessful search by the surgeon, the closure was continued.

Days after, Natividad started complaining about excruciating pains in the anal region. She went back to Dr Ampil and the latter assured her that it’s a normal consequence of the operation. The pain continued so Natividad, with her husband, went to the US for another consultation. The hospital there informed her that she’s free of cancer and was advised to come back. The couple returned. Then the unthinkable happened. Natividad’s daughter saw a gauze protruding from Natividad’s vagina. (hay grabe)

Dr Ampil rushed to her house and removed the gauze measuring 1.5 inches. Thereafter the doctor assured her that the pain would eventually disappear. But it didn’t, and in fact intensified. She then went to another hospital where a foul smelling gauze of the same length was found again.

The couple filed with the QC RTC a complaint for damages against the PSI, Medical City Hospital, Dr. Fuentes and Dr Ampil for their negligence and malpractice for concealing their acts of negligence.

Enrique Agana also filed with the Professional Regulation Commission (PRC) an administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr. Fuentes

The PRC dismissed the case against Dr Ampil and found Dr. Fuentes to be negligent and found liable to reimburse

Both the RTC and CA found Dr. Ampil guilty of negligence and malpractice ISSUE: (1) W/N Dr. Ampil is guilty of negligence and medical malpractice (2) W/N PSI, the hospital can be held liable for damages under the Respondeat Superior doctrine HELD: (1) YES Simply put, the elements are duty, breach, injury and proximate causation. Dr, Ampil, as

the lead surgeon, had the duty to remove all foreign objects, such as gauzes, from Natividad’s body before closure of the incision. When he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused injury to Natividad, necessitating her further examination by American doctors and another surgery. That Dr. Ampil’s negligence is the proximate cause12 of Natividad’s injury could be traced from his act of closing the incision despite the information given by the attending

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nurses that two pieces of gauze were still missing. That they were later on extracted from Natividad’s vagina established the causal link between Dr. Ampil’s negligence and the injury.

(2) YES. One important legal change is an increase in hospital liability for medical malpractice. Many courts now allow claims for hospital vicarious liability under the theories of respondeat superior, apparent authority, ostensible authority, or agency by estoppel. • 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 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 case of Schloendorff v. Society of New York Hospital26 was then considered an authority for this view. The "Schloendorff doctrine" regards a physician, even if employed by a hospital, as an independent contractor because of the skill he exercises and the lack of control exerted over his work. Under this doctrine, hospitals are exempt from the application of the respondeat superior principle for fault or negligence committed by physicians in the discharge of their profession.

However, the efficacy of the foregoing doctrine has weakened with the significant developments in medical care. Courts came to realize that modern hospitals are increasingly taking active role in supplying and regulating medical care to patients. No longer were a hospital’s functions limited to furnishing room, food, facilities for treatment and operation, and attendants for its patients.

In Bing v. Thunig,27 the New York Court of Appeals deviated from the Schloendorff doctrine, noting that modern hospitals actually do far more than provide facilities for treatment. Rather, they regularly employ, on a salaried basis, a large staff of physicians, interns, nurses, administrative and manual workers. They charge patients for medical care and treatment, even collecting for such services through legal action, if necessary. The court then concluded that there is no reason to exempt hospitals from the universal rule of respondeat superior.

In other words, private hospitals, hire, fire and exercise real control over their attending and visiting ‘consultant’ staff. While ‘consultants’ are not, technically employees, x x x, the control exercised, the hiring, and the right to terminate 4. STATE Two Kinds of Liabilities of the State: 1) State liability for the acts of its special agents. Here the State is engaged in public r governmental functions, through its special agents 2) State liability for the acts or omissions imputable to a public official charged with some administrative or technical office. Here, the State’s agent is commissioned to perform non-governmental functions, hence, the State assume the role of an ordinary employer and will be hold liable as such for its agent’s torts. Special Agent – one who receives definite and fixed order or commission, foreign to the exercise of his office of he is a special officer. 5. TEACHER AND HEADS OF ESTABLISHMENTS

Art. 218. The school, its administrators and teachers, or the individual, entity or institution engaged in child are shall have special parental authority and responsibility over the minor child while under their supervision, instruction or custody.

Authority and responsibility shall apply to all authorized activities whether inside or outside the premises of the school, entity or institution.

Art. 129. Those given the authority and responsibility under the preceding Article shall be principally

and solidarily liable for damages caused by the acts or omissions of the unemancipated minor. The parents, judicial guardians or the persons exercising substitute parental authority over said minor shall be subsidiarily liable.

The respective liabilities of those referred to in the preceding paragraph shall not apply if it is proved that they exercised the proper diligence required under the particular circumstances.

All other cases not covered by this and the preceding articles shall be governed by the provisions of the Civil Code on quasi-delicts.

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*They are principally and solidarily liable for damages caused by the acts or omission dos the unemancipated minor.

Art. 2181. Whoever pays for the damage caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction of the claim.

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VI. TORTIOUS INTERFERENCE IN CONRACTUAL RELATION (Art. 1314) Art. 1314. Any third person who induces another to violate his contract shall be liable for damages to the other contracting party.

Elements of Interference in Contractual Relation: (1) Valid contract; (2) Outsider knows of the existence of the contract; (3) The third party induces one party to breach his obligation under the contract; (4) Damage.

Is malice an element of interference in contractual relation? A: There are variances in opinion. Some cases say that it is not, while other cases say that it is (So Ping Bun v. CA). So if you’re the lawyer for the plaintiff, you should try to prove it anyway just to be sure.

What are the defenses available to the defendant? (1) business competition & the purpose is (i) furtherance of the business; & (ii) lawful means are used. Note that there is no intent to cause damage. (So Ping Bun v. CA) (2) honest advice made (i) in good faith and (ii) in performance of his duty as adviser (3) innocence of breaching party (Sir doesn’t agree); element of inducement lacking – Cite Daywalt – that the third party cannot be more liable than the party on whose behalf he intermeddles. YU V. CA

Yu is the exclusive distributor in the Philippines of products from the House of Mayfair, a British company. He is suing his former dealer UNISIA on the ground of unfair competition stating that it is only Yu who is allowed to distribute Mayfair products in the Philippines and also asking for an injunction against the latter. UNISIA counters by stating that the cause of action should be between Yu and Mayfair because UNISIA is not privy, and consequently a stranger to the exclusive dealership agreement between Mayfair and Yu. UNISIA caused FNF Trading (the company who delivers Mayfair’s goods) to send the goods to the Philippines so that he could sell the same.

ISSUE: Should the injunction prevail? Is there unfair competition? HELD: Yes. Even if the exclusive sales contract was only between Yu and Mayfair and cannot this extend

its chain as to bind UNISIA, he can still be held accountable for his independent act generative of civil liability. The right to perform an exclusive dealership agreement and to reap profits resulting from such performance are proprietary rights which a party may protect. Furthermore, Mayfair was duped into believing that the goods ordered through FNF Trading were to be shipped to Nigeria but such were actually sent and sold to the Philippines. This ploy is akin to a scenario of a third person who induces a party to renege on his undertaking under a contract entitling the other contracting party to relief and is a specie of unfair competition. The injunction should prevail. SO PING BUN V. CA

Tek Hua Trading, through its managing partner Pek Giok, is the lessee (renter) of Dee C. Chuan & Sons, Inc (DCCSI) in the latter’s premises in Binondo. After Tek Hua Traing dissolved, Tek Hua Enterprise was formed by original members including Manuel Tion. When Pek Giok died however, it was So Ping Bun who occupied the same for his Trendsetter Marketing. Tek Hua Enterprise asked So Ping Bun to vacate but the latter refused and entered into formal contracts of lease with DCCSI. In a suit for injunction, private respondents pressed for the nullification of the lease contracts between DCCSI and petitioner, and for damages.

ISSUE: Was So Ping Bun guilty of tortous interference of contract? HELD: Yes. The elements are: (1) existence of a valid contract; (2) knowledge on the part of the

third person of the existence of contract; and (3) interference of the third person is without legal justification or excuse. So Ping Bun asked DCCSI to execute lease contracts in its favor and as a result, Tek Hua Enterprise was deprived of its property right. The petitioner’s lack of malice does not relieve him of liability for entering into contracts and cause breach of existing ones. Lack of malice, however, precludes damages. So Ping Bun had the business desire to make some gain to the detriment of the contracting parties. Even in the absence of malice, this was enough to make him liable of tortuous interference.

One becomes liable in an action for damages for a non-trespassory invasion of another’s interest in the private use and enjoyment of asset if (a) the other has property rights and privileges with respect to the use

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or enjoyment interfered with, (b) the invasion is substantial, (c) the defendant’s conduct is a legal cause of the invasion, and (d) the invasion is either intentional and unreasonable or unintentional and actionable under general negligence rules. LAGON V. CA

Lapuz entered into a lease contract with a certain Sepi. The agreement was that Lapuz was to construct a commercial bulding to be leased out and the rent paid by tenants of the latter will answer for the rent due to Sepi. Upon death of Sepi, Lapuz was told to stop collecting rents from the tenants of the building because it is now Lagon who is the new owner of the property and collecting rentals himself. This prompted Lapuz to file an action for damages against Lagon for allegedly inducing the heirs of Sepi to sell to him the property. In his defense, Lagon said that when he bought the property he was not aware of the existence of the lease contract because the contracts were unsigned when it was shown to him.

ISSUE: Whether or not Lagon was guilty of tortuous interference. HELD: No, Lagon is not guilty of tortuous interference. In order to constitute tortuous interference, it

must proven that, (a) there was a valid contract, (b) knowledge on the part of third person of the existence of contract, (c) interference by third person was without legal justification. In the case at hand, the 2nd and 3rd elements are not present. Although the contract of lease was sufficiently proven knowledge and absence of legal justification were not. Actual knowledge nor existence of suspicious circumstances were not proven to exist. Lagon conducted investigation and inquiry and unearthed no suspicious circumstance that would have made a cautious man to watch out for conflicting claim. With regard to third requisite, it was not proven that Lagon was induced with bad faith when he entered into the contract. Records show that the decision of the heirs of the late Bai Tonina Sepi to sell the property was completely of their own volition and that petitioner did absolutely nothing to influence their judgment. Private respondent himself did not proffer any evidence to support his claim. In short, even assuming that private respondent was able to prove the renewal of his lease contract with Sepi, the fact was that he was unable to prove malice or bad faith on the part of petitioner in purchasing the property. Hence, the claim for tortuous interference was never established.

Petitioner’s purchase of the subject property was merely an advancement of his financial or economic interests, absent any proof that he was enthused by improper motives. A person is not a malicious interferer if his conduct is impelled by a proper business interest. In other words, a financial or profit motivation will not necessarily make a person an officious interferer liable for damages as long as there is no malice or bad faith involved. This case is one of damnun absque injuria or damage without injury. GILCHRIST V. CUDDY (DISCUSSED)

Cuddy was the owner of the film Zigomar and he rented it to Gilchrist for a week for P125, and it was to be delivered on the 26th of May. A few days prior to this Cuddy sent the money back to Gilchrist saying that he had made other arrangements with his film. The other arrangements was the rental to Espejo and his partner for P350 for the week. An injunction was filed by Gilchrist against these parties from showing it for the week beginning the 26th of May.

ISSUE: Whether Espejo and his partner are liable for damages? HELD: Yes. Espejo claims that they had a right to do what they did. The ground upon which they base

this contention is, that there was no valid and binding contract between Cuddy and Gilchrist and that, therefore, they had a right to compete with Gilchrist for the lease of the film, the right to compete being a justification for their acts. If there had been no contract between Cuddy and Gilchrist this defense would be tenable, but the mere right to compete could not justify the appellants in intentionally inducing Cuddy to take away the Gilchrist’s contractual right. The only motive for the interference was a desire to make a profit by exhibiting the film in their theater. There was no malice beyond this desire; but this fact does not relieve them of the legal liability for interfering with that contract and causing its breach. It is, therefore, clear that they were liable to Gilchrist for the damages caused by their acts, unless they are relieved from such liability by reason of the fact that they did not know at the time the identity of the original lessee of the

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film. The liability of the Espejo arises from unlawful acts and not from contractual obligations, as they were under no such obligations to induce Cuddy to violate his contract with Gilchrist. DAYWALT V. CORPORACION (discussed)

Teodorica Endencia obligated herself to sell a parcel of land to Geo. W. Daywalt. It was agreed that the final deed of sale will be executed when the land was registered in Endencia’s name. Subsequently, the Torrens Title for the land was issued in her favor but in the course of the proceedings for registration it was found that the land involved in the sale contained a greater area than what Endencia originally thought and she became reluctant to consummate the sale of the land to Daywalt. This reluctance was due to the advice of the La Corporacion de los Padres Agustinos Recoletos (LCPAR) which exercised a great moral influence over her. However, in advising Endencia that she was not bound by her actuation with improper motives but did so in good faith believing that under the circumstances Endencia was not really bound by her contract with Daywalt. In view of Endencia’s refusal to make the conveyance, Daywalt instituted a complaint for specific performance against her and upon appeal the Supreme Court held that she was bound by the contract and she was ordered to make the ocnveyeance of the land in question to Daywalt. Daywalt then instituted an action against LCPAR to recover damages.

ISSUE: Whether a person who is not a party to a contract for the sale of land makes himself liable for damages to the vendee, beyond the value of the use and occupation, by colluding with the vendor and maintaining him in the effort to resist an action for specific performance.

HELD: NO. Father Juan Labarga and his associates believed in good faith that the contract cold not be enforced and that Teodorica would be wronged if it should be carried into effect. Any advice or assistance which they may have given was, therefore, prompted by no mean or improper motive. It is not, in our opinion, to be denied that Teodorica would have surrendered the documents of title and given possession of the land but for the influence and promptings of members of the defendants corporation. But we do not credit the idea that they were in any degree influenced to the giving of such advice by the desire to secure to themselves the paltry privilege of grazing their cattle upon the land in question to the prejudice of the just rights of the plaintiff. TAYAG V. LACSON

The Lacsons, respondents, were the owners of three parcels of land of which the defendants were the tillers/lessees. They executed a Deed of Assignment in favor of the petitioner Tayag for P50.00 for their rights as tenant-tillers payable when there is no more legal impediment for the sale of the land. Tayag paid partial payments to the tenants. When Tayag wanted to meet to settle the transaction, the tenant-tillers refused and informed Tayag that they were going to sell all their rights to the respondents. Tayag filed a complaint against the tillers and the respondents, praying that the court set a time frame for the payment of P50/sqm to the defendants as agreed in the Deed of Assignment. Respondent Lacson claimed that the status of the tillers as tenants are uncertain and that being only tenants of the land, they cannot enter into any transaction regarding the property without their, the owner’s, consent. At the hearing of the preliminary injunction requested by Tayag, the respondents claim that they are not privy to the contract, hence cannot be bound by it, and that as owners, they can alienate said land.

HELD: The preliminary injunction given by the trial court is premature. (Not Torts) The petitioner made the respondents a party to the case on the sole reason of the alleged inducements

made by the respondent to the tillers to not honor the deed of assignment, a violation of Article 1314 of the Civil Code, which states: Any third person who induces another to violate his contract shall be liable to the other contracting party.

In order for said law to apply, the party claiming such shall prove elements. According to the SC, there is no malicious interferer when the impulse behind one’s action is business interest and not wrongful motive. In this case, the only evidence adduced by the petitioner against the respondent is the letter of the tiller/tenants to the petitioner informing him that they decided to sell all their rights to the respondents. In the said letter, there was no allegation or statement made by the tillers that the respondents induced them to this. Even the petitioner, in his statement, suggested that his allegations is just based on what he heard.

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The Deed of Assignment made by the tillers and Tayag is against the law and against public policy. The tillers have the preferential right in case the Lacsons would sell their land and this was what Tayag wanted, to gain their rights. And in case this happens, the tillers would be landless for a measly sum of 50/sqm. It is subversive of public policy and even goes against the letter and spirit of the law.

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VII. CIVIL LIABILITY ARISING FROM CRIME (RULES OF COURT) A. REMEDIES 1. Civil action with criminal action (Rule 111(1), ROC)

SECTION 1. Institution of criminal and civil actions. —(a) When a criminal action is instituted, the

civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts presenting its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation.

When the offended party seeks to enforce civil liability against the accused by way of moral, nominal, temperate, or exemplary damages without specifying the amount thereof in the complaint or information, the filing fees therefor shall constitute a first lien on the judgment awarding such damages.

Where the amount of damages, other than actual, is specified in the complaint or information, the corresponding filing fees shall be paid by the offended party upon the filing thereof in court.

Except as otherwise provided in these Rules, no filing fees shall be required for actual damages. No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case,

but any cause of action which could have been the subject thereof may be litigated in a separate civil action. (1a)

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed.

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay additional filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal actions. (cir. 57-97) Clarification of this rule:

This rule on civil actions instituted with the criminal action has been amended several times, hence the conflicting jurisprudence. Under the 2000 Revised Rules of CrimPro, the civil liability arising from crime is deemed instituted and not merely “impliedly” instituted with the institution of the criminal action, unless:

1. the offended party waives the civil action, 2. reserves the right to institute it separately, or 3. institutes the civil action prior to the criminal action. But take note that the civil action that is deemed instituted with the criminal action is only the one for

the recovery of the civil liability arising from the offense charged, and no other civil action. All decisions to the contrary are no longer controlling.

What are the independent civil actions? The independent civil actions are those under Articles 32, 33, 34, and 2176. These are NOT deemed instituted with the criminal action or considered as waived even if there is no reservation. The need for reservation applies only to the civil liability arising from the offense charged.

Can an employer be held civilly liable for quasi delict in a criminal action for reckless imprudence filed against his employee? No. Quasi delict under Article 2176 is not deemed instituted

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with the criminal action. If at all, the only civil liability of the employer in the criminal action would be his subsidiary liability under the Revised Penal Code.

What is the difference between “separate civil action” under Section 2 of Rule 111 of the Rules of Court and an “independent civil action”? The independent civil actions are those under Articles 32, 33, 34, and 2176 of the Civil Code. These are not deemed instituted with the criminal action even if there is no reservation made by the plaintiff. The separate civil action under Section 2 of Rule 111 refers to an action to recover civil liability arising from the crime. This is deemed instituted with the criminal action, unless the offended party waives it, makes a reservation, or institutes it prior to the institution of the criminal action.

Note that this should refer to the civil liability arising from the offense, and not to any other civil action which may be connected to the offense but does not necessarily arise from the crime (ex: civil case for legal separation in connection with a case for bigamy). 2. Separate Civil Action (Rule 111(2))

SEC. 2. When separate civil action is suspended. —After the criminal action has been commenced, the separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal action.

If the criminal action is filed after the said civil action has already been instituted, the latter shall be suspended in whatever stage it may be found before judgment on the merits. The suspension shall last until final judgment is rendered in the criminal action. Nevertheless, before judgment on the merits is rendered in the civil action, the same may, upon motion of the offended party, be consolidated with the criminal action in the court trying the criminal action. In case of consolidation, the evidence already adduced in the civil action shall be deemed automatically reproduced in the criminal action without prejudice to the right of the prosecution to cross-examine the witnesses presented by the offended party in the criminal case and of the parties to present additional evidence. The consolidated criminal and civil actions shall be tried and decided jointly.

During the pendency of the criminal action, the running of the period of prescription of the civil action which cannot be instituted separately or whose proceeding has been suspended shall be tolled. (n)

The extinction of the penal action does not carry with it extinction of the civil action. However, the civil action based on delict shall be deemed extinguished if there is a finding in a final judgment in the criminal action that the act or omission from which the civil liability may arise did not exist. (2a)

CIVIL CODE Art. 33. In cases of defamation, fraud, and physical injuries a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence.

Summary of this Rule:

1. This rule contemplates a situation where the offended party files a separate civil action to recover civil liability arising from the offense. This is a departure from the general rule in Section 1 that the civil action is deemed instituted with the criminal action.

2. If the criminal action has bee commenced, and the offended party makes a reservation to separately file the civil action arising therefrom, he cannot institute the civil action until final judgment has been rendered in the criminal action.

3. If the separate civil action has already been instituted prior to the filing of the criminal action, upon filing of the criminal action, the civil action shall be suspended in whatever stage it may be found until final judgment is rendered in the criminal action.

4. In case the criminal action is instituted after the civil action, the two actions may, upon motion of the offended party, be consolidated before judgment on the merits is rendered in the civil action. It will be tried and decided jointly by the court trying the criminal action.

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5. The only civil action that is deemed suspended is the civil action arising from the offense charged and not other civil actions that may be related to but do not arise from the offense. A civil action may not be suspended under Rule 111 where the action is not to enforce civil liability from the crime charged.

6. As a general rule, there can only be consolidation of the criminal and civil actions if the civil action is for recovery of the civil liability arising from the offense. However, under certain exceptional circumstances, there can still be consolidation of the criminal and civil actions even if the civil action is not for the recovery of civil liability arising from the offense (ex: civil action based on contract). The requisites for consolidation in these cases are:

a. the actions arise from the same act, event, or transaction; b. they involve the same or like issues; c. they depend largely or substantially on the same evidence d. the court must have jurisdiction over the cases to be consolidated; and e. a joint trial will not give one party an undue advantage or prejudice the substantial rights of any of

the parties. 7. The period of prescription of the civil action arising from a crime that has not been reserved or that

was filed ahead of the criminal action and was subsequently suspended shall not run while the criminal action is pending. Independent Civil Action (Arts 30 & 31, CC; Rule 111(3), ROC) 3. ROC SEC. 3. When civil action may proceed independently. —In the cases provided in Articles 32,

33, 34 and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended party. It shall proceed independently of the criminal action and shall require only a preponderance of evidence. In no case, however, may the offended party recover damages twice for the same act or omission charged in the criminal action. (3a)

CC Art. 30. When a separate civil action is brought to demand civil liability arising from a criminal

offense, and no criminal proceedings are instituted during the pendency of the civil case, a preponderance of evidence shall likewise be sufficient to prove the act complained of.

Art. 31. When the civil action is based on an obligation not arising from the act or omission complained of as a felony, such civil action may proceed independently of the criminal proceedings and regardless of the result of the latter.

DMPI EMPLOYEES V. VELEZ

An information for estafa was filed against Carmen Mandawe for alleged failure to account to Eriberta Villegas the amount of about P600K. Villegas entrusted this amount to Mandawe, an employee of DMPI-ECCI, for deposit with the teller of DMPI-ECCI. Subsequently, Villegas filed with the RTC a complaint against Mandawe and DMPI-ECCI for a sum of money and damages with preliminary attachment arising out of the same transaction. DMP-ECCI filed a motion to dismiss on the grounds that there was already a pending criminal case arising from the same facts, and that the complaint failed to contain a certification against forum shopping. The trial court dismissed the case, but later, upon motion for reconsideration of Villegas, it reversed itself and recalled the dismissal of the case.

ISSUES: Whether the failure to contain a certificate of non-forum shopping is a ground for dismissal Whether the Civil case can proceed independently from the criminal case without reserving the right to file a separate civil action

HELD: No. The initial circular produced by the SC states that the said certificate should only be contained in petitions in the SC and the CA. Although a new circular says that all initiatory pleadings should contain this, at the time of the filing of Villegas, the said new circular wasn’t in effect yet.

Yes. The rules of court states that the civil action is deemed instituted with the criminal complaint unless the party waives the right, reserves such right, or instituted the civil action prior to the filing of the criminal case. And if there is a separate civil action is filed, such will be suspended until final judgment has been entered in the criminal action. However, like in this case, such rule does not include civil liabilities

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arising from Articles 32, 33, 34 and 2176. The case being filed by Villegas stems from fraud under Article 33 and no reservation is needed for it to be filed separately and it can proceed independently from the criminal case. CASUPANAN V. LAROYA

Two vehicles figured in an accident. One driven by respondent Mario Laroya and the other owned by petitioner Roberto Capitulo and driven by petitioner Avelino Casupanan.As a result, two cases were filed with the MCTC of Capas, Tarlac.

Laroya filed a criminal case against Casupanan for reckless imprudence resulting in damage to property,

On the other hand, Casupanan and Capitulo filed a civil case against Laroya for quasi-delict, When the civil case was filed, the criminal case was then at its preliminary investigation stage. Laroya,

(defendant in CV case), filed a motion to dismiss the civil case on the ground of forum-shopping considering the pendency of the criminal case. The MCTC granted the motion and dismissed the civil case. Casupanan and Capitulo filed a petition for certiorari under Rule 65 before the Capas RTC. RTC dismissed the petition for lack of merit

Petitioners’ contentions: Casupanan and Capitulo assert: 1. That Civil Case which the MCTC dismissed on the ground of forum-shopping, constitutes a counterclaim in the criminal case They argue that if the accused in a criminal case has a counterclaim against the private complainant, he may file the counterclaim in a separate civil action at the proper time. 2. They contend that an action on quasi-delict is different from an action resulting from the crime of reckless imprudence, and an accused in a criminal case can be an aggrieved party in a civil case arising from the same incident. They maintain that under Articles 31 and 2176 of the Civil Code, the civil case can proceed independently of the criminal action. 3. Finally, they point out that Casupanan was not the only one who filed the independent civil action based on quasi-delict but also Capitulo, the owner-operator of the vehicle, who was not a party in the criminal case.

ISSUE: Whether an accused in a pending criminal case for reckless imprudence can validly file,

simultaneously and independently, a separate civil action for quasi-delict against the private complainant in the criminal case? Yes.

Held: the civil action based on quasi-delict filed separately by Casupanan and Capitulo is proper. The order of dismissal by the MCTC of Civil Case on the ground of forum-shopping is erroneous.

RATIO11 Under Section 1 of the present Rule 111, the independent civil action in Articles 32, 33, 34 and 2176 of the Civil Code is not deemed instituted with the criminal action but may be filed separately by the offended party even without reservation. The commencement of the criminal action does not suspend the prosecution of the independent civil action under these articles of the Civil Code. The suspension in Section 2 of the present Rule 111 refers only to the civil action arising from the crime, if such civil action is reserved or filed before the commencement of the criminal action.

Thus, the offended party can file two separate suits for the same act or omission. The first a criminal case where the civil action to recover civil liability ex-delicto is deemed instituted, and the other a civil case for quasi-delict - without violating the rule on non-forum shopping. The two cases can proceed simultaneously and independently of each other. The commencement or prosecution of the criminal action will not suspend the civil action for quasi-delict. The only limitation is that the offended party cannot

1111One final point. The Revised Rules on Criminal Procedure took effect on December 1, 2000 while the MCTC issued the order of dismissal on December 28,

1999 or before the amendment of the rules. The Revised Rules on Criminal Procedure must be given retroactive effect considering the well-settled rule that -

“x x x statutes regulating the procedure of the court will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural

laws are retroactive in that sense and to that extent

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recover damages twice for the same act or omission of the defendant. In most cases, the offended party will have no reason to file a second civil action since he cannot recover damages twice for the same act or omission of the accused. In some instances, the accused may be insolvent, necessitating the filing of another case against his employer or guardians. Similarly, the accused can file a civil action for quasi-delict for the same act or omission he is accused of in the criminal case. This is expressly allowed in paragraph 6, Section 1 of the present Rule 111 which states that the counterclaim of the accused “may be litigated in a separate civil action.” This is only fair for two reasons. First, the accused is prohibited from setting up any counterclaim in the civil aspect that is deemed instituted in the criminal case. The accused is therefore forced to litigate separately his counterclaim against the offended party. If the accused does not file a separate civil action for quasi-delict, the prescriptive period may set in since the period continues to run until the civil action for quasi-delict is filed. Second, the accused, who is presumed innocent, has a right to invoke Article 2177 of the Civil Code, in the same way that the offended party can avail of this remedy which is independent of the criminal action. To disallow the accused from filing a separate civil action for quasi-delict, while refusing to recognize his counterclaim in the criminal case, is to deny him due process of law, access to the courts, and equal protection of the law. CEREZO V. TUAZON

Country Bus Lines collided with a tricycle, the tricycle driver Tuazon filed a compliant for damages against Mrs. Cerezo, (owner), her husband Atty. Cerezo and the bus driver Danilo. Summons was never served against the bus driver so the court did not acquire jurisdiction over him. Tuazon failed to show that the family benefited so the husband was not held liable. The trial court held Mrs. Cerezo solidarily liable, her liability arising from the negligence of her employee. On an appeal, she contends that the court could did not validly render judgment since it failed to acquire jurisdiction over Danilo whose negligence was the main issue and therefore an indispensable party, and that Tuazon reserved the right to institute a separate civil action for damages in the criminal action.

ISSUE: Whether Mrs. Cerezo could be held liable for damages without acquiring jurisdiction over Danilo?

HELD: Yes, Mrs. Cerezo’s liability is not only solidary but also primary and direct, as an employer. The same negligent act may produce civil liability arising from a delict under Article 103 of the RPC, or may give rise to an action for a quasi-delict under Article 2180 of the civil code. An aggrieved party may choose between the two remedies. An action based on a quasi-delict may proceed independently from the criminal action. There is however, a distinction between civil liability arising from a delict and civil liability arising from a quasi-delict. The choice of remedy to sue for a delict or a quasi-delict, affects the procedural and jurisdictional issues of the action. Tuazon chose to file an action for damages based on quasi-delict. Danilo is not an indespensible party to the case. Thus, there is no need for the trial court to acquire jurisdiction over Danilo.

Tuazon chose to file an action based on quasi-delict. In his complaint, Tuazon alleged that Mrs. Cerezo, “without exercising due care and diligence in the supervision and management of her employees and buses,” hired Foronda as her driver. Tuazon became disabled because of Foronda’s “recklessness, gross negligence and imprudence,” aggravated by Mrs. Cerezo’s “lack of due care and diligence in the selection and supervision of her employees, particularly Foronda.” An employer’s liability based on a quasi-delict is primary and direct, while the employer’s liability based on a delict is merely subsidiary. RODRIGUEZ V. PONFERRADA

The Assistant City Prosecutor found probable cause to charge petitioner with both esatafa and BP 22. Entry of appearance of private prosecutor was noted by the RTC and was opposed by Accused Rodriguez. RTC allowed the appearance. Rodriguez contested the order claiming that the civil action necessarily arising from the criminal case pending before the MTC for violation of BP 22 precludes the institution of the corresponding civil action in the criminal case for estafa now pending before the RTC. She hinges her theory on the provisions of Rules 110 and 111 of the Rules of Court.

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Considering that the offended party had paid the corresponding filing fee for the estafa cases prior to the filing of the BP 22 cases with the MeTC, the RTC allowed the private prosecutor to appear and intervene in the proceedings

ISSUE: Whether a private prosecutor can be allowed to intervene and participate in the proceedings of the above-entitled estafa cases for the purpose of prosecuting the attached civil liability arising from the issuance of the checks involved which is also subject mater of the pending B.P. 22 cases

HELD: YES. The purpose of Section 1(b) of Rule 111 is that because the dockets of the courts were clogged with BP 22 litigations as creditors were using the courts as collectors. While ordinarily no filing fees were charged for actual damages in criminal cases, the rule on the necessary inclusion of a civil action with the payment of filing fees based on the face value of the check involved was laid down to prevent the practice of creditors of using the threat of a criminal prosecution to collect on their credit free of charge.

It was not the intent of the special rule to preclude the prosecution of the civil action that corresponds to the estafa case, should the latter also be filed. The crimes of estafa and violation of BP 22 are different and distinct from each other.

What Section 1(b) of the Rules of Court prohibits is the reservation to file the corresponding civil action. The criminal action shall be deemed to include the corresponding civil action. “Unless a separate civil action has been filed before the institution of the criminal action, no such civil action can be instituted after the criminal action has been filed as the same has been included therein.” In the instant case, the criminal action for estafa was admittedly filed prior to the criminal case for violation of BP 22, with the corresponding filing fees for the inclusion of the corresponding civil action paid accordingly.

Furthermore, the fact that the Rules do not allow the reservation of civil actions in BP 22 cases cannot deprive private complainant of the right to protect her interests in the criminal action for estafa. Nothing in the current law or rules on BP 22 vests the jurisdiction of the corresponding civil case exclusively in the court trying the BP 22 criminal case. HYATT INDUSTRIAL V. ASIA DYNAMIC

Hyatt filed a complaint for recovery of sum of money against respondent Asia Dynamic Electrix Corporation for the latter’s payment of dishonored checks (for purchases of electrical conduits and fittings). Asia moved to dismiss the complaint on the following grounds: (1) the civil action was deemed included in the criminal actions for violation of BP22 previously filed by Hyatt against the officers of Asia; (2) Section 1(b) of Rule 111 prohibits the filing of a separate civil action in B.P. 22 cases; and (3) Hyatt was guilty of forum shopping and unjust enrichment.

TC denied MTD saying that the complaint was based on non-payment of the petitioner of its contractual debt under Art 31 and can proceed independently of the criminal action. CA reversed TC holding that civil actions deemed instituted with the filing of the criminal cases for violation of B.P. 22.

ISSUE: Whether Hyatt violated Section 1(b) of Rule 111 of the Revised Rules on Criminal Procedure when it filed the complaint in the civil case

HELD: Yes. Prior to the filing of the case for recovery of sum of money before the RTC, Hyatt had already filed separate criminal complaints for violation of B.P. 22 against the officers of Asia which were pending before the MTC. These cases involve the same checks which are the subjects of Civil Case. Thus, upon filing of the criminal cases, the civil action for the recovery of the amount of the checks was also impliedly instituted under Section 1(b) of Rule 111. The criminal action for violation of B.P. 22 shall be deemed to include the corresponding civil action. The reservation to file a separate civil action is no longer needed. Purpose behind the law: The inclusion of the civil action in the criminal case is expected to significantly lower the number of cases filed before the courts for collection based on dishonored checks. It is also expected to expedite the disposition of these cases. SAFEGUARD SECURITY V. TANGCO

Evangeline, a duly licensed firearm holder, went to Ecology Bank to renew her time deposit. She approached security guard Pajarillo, who was stationed outside the bank, and pulled out her firearm from her bag to deposit the same for safekeeping. Suddenly, Pajarillo shot Evangeline with his service shotgun

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hitting her in the abdomen instantly causing her death. Her husband and minor children filed a criminal case of homicide against Pajarillo; reserving the right to file a separate civil action. RTC subsequently convicted Pajarillo. Thereafter, a complaint for damages was filed against Pajarillo for negligently shooting Evangeline and against Safeguard (employer) for failing to observe the diligence of a good father of a family.

ISSUE: Whether the filing of a separate civil action against petitioners are limited to the recovery of damages arising from a crime or delict

HELD: NO. An act or omission causing damage to another may give rise to two separate civil liabilities on the part of the offender, i.e., (1) civil liability ex delicto, under Article 100 of the Revised Penal Code; and (2) independent civil liabilities, such as those (a) not arising from an act or omission complained of as a felony, e.g., culpa contractual or obligations arising from law under Article 31 of the Civil Code, intentional torts under Articles 32 and 34, and culpa aquiliana under Article 2176 of the Civil Code; or (b) where the injured party is granted a right to file an action independent and distinct from the criminal action under Article 33 of the Civil Code. Either of these liabilities may be enforced against the offender subject to the caveat under Article 2177 of the Civil Code that the offended party cannot recover damages twice for the same act or omission or under both causes.

In this case, the civil action filed was not derived from the criminal liability but one based on culpa aquiliana or quasi-delict which is separate and distinct from the civil liability arising from crime. Hence, Safeguard is not only subsidiarily liable because the source of the obligation sought to be enforced in the civil case is a quasi-delict. As the employer of Pajarillo, Safeguard is primarily and solidarily liable for the quasi-delict committed by the former and it is presumed to be negligent in the selection and supervision of his employee by operation of law. PHILIPPINE RABBIT BUS LINES V. PEOPLE (DISCUSSED?)

The driver of the petitioner has been convicted by the RTC of committing reckless imprudence resulting in triple homicide. The CA denied the appeal interposed by the driver due to the fact that the driver jumped bail pending appeal. The Claimants now are enforcing the subsidiary liability of the petitioner to which the latter objected.

ISSUE: W/N the petitioner’s subsidiary liability has attached despite an appeal of the Petitioner in behalf of the driver

HELD: Yes, the subsidiary liability of an employer can be found on Art 103 of the RPC. An essential argument of the petitioner is that there is still a pending appeal to the case. However, Sec 7 of Rule 120 of the Rules on Criminal Procedure states:

A judgment of conviction may, upon motion of the accused, be modified or set aside before it becomes final or before appeal is perfected. Except where the death penalty is imposed, a judgment becomes final after the lapse of the period for perfecting an appeal, or when the sentence has been partially or totally satisfied or served, or when the accused has waived in writing his right to appeal, or has applied for probation.

When the driver absconded and refused to surrender to the jurisdiction of the courts, he effectively abandoned his appeal, making the guilty verdict final and executory. The primary civil liability of the accused attaches upon finality of the verdict as well as the subsidiary civil liability of the petitioner. The liability of the employer cannot be separated from that of the employee.

To enforce the subsidiary liability of the petitioner, the following must be shown 1) A final guilty verdict 2) Insolvency of the accused 3) The employer is engaged in a trade or business. B. EFFECTS 1. Acquittal/ Dismissal (Art. 29, CC; Rule 111(2b) & 120(2), ROC)

Art. 29. When the accused in a criminal prosecution is acquitted on the ground that his guilt has not been proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted. Such action requires only a preponderance of evidence. Upon motion of the defendant, the court may require the plaintiff to file a bond to answer for damages in case the complaint should be found to be malicious.

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If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court shall so declare. In the absence of any declaration to that effect, it may be inferred from the text of the decision whether or not the acquittal is due to that ground. 2. Extinction of civil liability (Rule 111(2b), ROC) MANANTAN V. COURT OF APPEALS

Manantan was driving a vehicle under the influence of alcohol. He had a very colorful day with his friends going to the shrimp farm, catching a duck for dinner, going to a bowling alley, going to a night club, taking some girls there and then eating arroz caldo after. The entire day he drank beer together with his companions, and the facts show that he had at least 12 beers already. While driving himself and his companions home, a jeepney with bright lights collided with his car causing the same to turn turtle twice leading to the death of Nicolas. The court acquitted Manantan without ruling on his civil liability. On appeal, he was held civilly liable for the accident. Manantan now comes to court protesting that the trial court’s decision was based on his lack of negligence or imprudence. Furthermore, he contends that the awarding by the appellate court of damages placed him in double jeopardy. The heirs of Nicolas contend that the acquittal was based on lack of guilt beyond reasonable doubt.

ISSUE: Is the award of damages proper? HELD: Yes. No double jeopardy. (irrelevant to torts). Furthermore, the decisions of the lower court and

that of the appellate court were scrutinized by the Supreme Court. The acquittal was indeed based on the absence of guilt beyond reasonable doubt. As such, Manantan can still be held civilly liable under Art. 29. Our law recognizes two kinds of acquittal, with different effects on the civil liability of the accused. First is an acquittal on the ground that the accused is not the author of the act or omission complained of. This instance closes the door to civil liability, for a person who has been found to be not the perpetrator of any act or omission cannot and can never be held liable for such act or omission. There being no delict, civil liability ex delicto is out of the question, and the civil action, if any, which may be instituted must be based on grounds other than the delict complained of. This is the situation contemplated in Rule 111 of the Rules of Court. The second instance is an acquittal based on reasonable doubt on the guilt of the accused. In this case, even if the guilt of the accused has not been satisfactorily established, he is not exempt from civil liability which may be proved by preponderance of evidence only. This is the situation contemplated in Article 29 of the Civil Code, where the civil action for damages is "for the same act or omission." Although the two actions have different purposes, the matters discussed in the civil case are similar to those discussed in the criminal case. However, the judgment in the criminal proceeding cannot be read in evidence in the civil action to establish any fact there determined, even though both actions involve the same act or omission. The reason for this rule is that the parties are not the same and secondarily, different rules of evidence are applicable. Hence, notwithstanding herein petitioner's acquittal, the Court of Appeals in determining whether Article 29 applied, was not precluded from looking into the question of petitioner's negligence or reckless imprudence. SANCHEZ V. FEBTC

Kai J. Chin was the director and representative of Chemical Bank. Its subsidiary, the Chemical International Finance Limited [CIFL] was an investor in Far East Bank and Trust Company [FEBTC]. In representing the interest of CIFL in FEBTC, Chin was made a director and senior VP of FEBTC. CIFl also had a checking account in FEBTC’s investment arm, Far East Bank Investment Inc [FEBII]. Chin was one of the authorized signatories in the said current and money market accounts.

Josephine Sanchez was the secretary of Chin. According to Chin, Sanchez made unauthorized withdrawals from the CIFL account with FEBTC through the use of forged or falsified applications for cashier’s checks which were deposited to her personal accounts. It is alleged that once credited to her account, Sanchez withdrew the amounts and misappropriated them to her personal benefit and advantage, to the damage of FEBTC.

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Sanchez allegedly confessed to Chin that she tampered with the FEBTC account and Chin referred the matter to the FEBTC’s audit division for investigation. All the cashier’s checks, funded by an unauthorized debit against the CIFL account, as well as the corresponding applications for their issuance were examined by the PNP crime lab and found to have been forgeries. As a defense, Sanchez denied the forgeries and asserted that she deposited the checks to her account under authority and instructions of Chin and afterwards withdrew the amounts and gave them to Chin. Chin denied giving such authority but did not deny that Sanchez turned over the proceeds of the checks to him.

RTC did not find Chin a credible witness and doubted the integrity of the PNP crime lab findings. It noted that all the transactions had been approved and allowed by the bank officials concerned, despite apparent procedural infirmities, yet only Sanchez was indicted. For failing to prove the culpability of the accused with moral certainty, the court acquitted Sanchez. RTC stated that the acquittal “was not exactly on the ground of reasonable doubt” but that she was not the author of the frauds, thus it held no civil liability against her.

CA ruled that acquittal did not preclude civil liability based on quasi-delict because the outcome of the criminal case was inconsequential in adjudging civil liability arising from the same act that could be considered a quasi-delict. It held that petitioner had been acquitted merely on reasonable doubt arising from insufficiency of evidence to establish her identity as the perpetrator. CA agreed that the forgery had not been satisfactorily proven but held Sanchez liable for not turning over the proceeds of the checks. She was held liable for actual damages in the amount of the checks.

ISSUE: Whether sanchez may be held civilly liable. HELD: NO. Sanchez contends that her acquittal was based on the determination that she was not the

author of the imputed felonies. Even arguing that it was based on reasonable doubt, she claims that CA was precluded from taking cognizance of the civil aspect of the case, as a separate civil action should have been filed after the acquittal. She also claims that Art29 of the CC mandating the courts to make a finding on the civil liability in case of acquittal based on reasonable ground, applies only to situations when a crime has been committed but the accused is exempt from criminal liability under Art12 of the RPC.

SC held that the civil action arising from crime was deemed instituted in the criminal proceeding in this case. Under Art100, every person criminally liable for a felony is also civilly liable, except in instances when no actual damage results such as from espionage, violation of neutrality, flight to enemy country and crime against popular representation. Clearly, extinction of penal liability does not always carry extinction of civil. Art29 of the CC states that if the acquittal is based on reasonable doubt, accused may be held civilly liable for damages arising from the same act or omission.

Sec1 of Rule 111 of the 1985 RoC provides that an action for the recovery of civil liability arising from an offense charges is necessarily included in the criminal proceedings, UNLESS [1] there is an express waiver of the civil action, or [2] there is a reservation to institute a separate one, or [3] the civil action was filed prior to the criminal complaint. For this purpose, the offended parties are allowed to intervene in the criminal proceedings, but solely to enforce their right to claim indemnification for damages arising from the criminal act.

In the present case, the original action involved prosecution for estafa or swindling through falsification of commercial documents. Records do not show and respondent does not claim any of the 3 instances precluding automatic institution of the civil action with the criminal complaint. Thus, a separate civil action may no longer be instituted.

The court also held that the private offended party may appeal the civil aspect of the judgment despite the acquittal of the accused only if: [a] the acquittal is based on reasonable doubt, [b] court declared the liability of the accused is only civil, [c] where the civil liability of the accused does not arise from or is not based upon the crime which accused was acquitted. Moreover, civil action based on delict is extinguished if there is a finding in the criminal case that the act or omission from which the civil liability may arise did not exist or where the accused did not commit the acts or omission imputed to him.

The SC finally held that a scrutiny of the RTC decision leads to the conclusion that Sanchez did not commit the crime imputed to her, hence her acquittal extinguished the action for her civil liability.

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MANLICLIC V. CALAUNAN

A bus driven by Manliclic and owned by Philippine Rabbit bumped an owner type jeep where the owner Calaunan was on board. As a result, Calaunan filed a criminal case against Manliclic for reckless imprudence. Subsequently, she filed an action for damages based on quasi delict against Manliclic and Philippine Rabbit. According to respondent, his jeep was cruising at the speed of 60 to 70 kilometers per hour on the slow lane of the expressway when the Philippine Rabbit Bus overtook the jeep and in the process of overtaking the jeep, the Philippine Rabbit Bus hit the rear of the jeep on the left side. At the time the Philippine Rabbit Bus hit the jeep, it was about to overtake the jeep. In other words, the Philippine Rabbit Bus was still at the back of the jeep when the jeep was hit. On the other hand, according to petitioner, explained that when the Philippine Rabbit bus was about to go to the left lane to overtake the jeep, the latter jeep swerved to the left because it was to overtake another jeep in front of it.

Manliclic was acquitted in the criminal case on the ground that he was did not commit such a crime. Petitioner argued that no negligence can be attributed against him in the civil action for damages in view of his acquittal in the criminal case.

ISSUE: Whether or not Manliclic may still be charged with negligence despite his acquittal in criminal case for reckless imprudence on the ground that he was not the author of the crime

HELD: Yes, despite his acquittal in the criminal case, he may still be liable for negligence under quasi delict. Although the rule is that acquittal on the ground that accused was not the author of the crime extinguishes civil liability, this is only applicable to civil liability arising from delict. Such acquittal is immaterial incase damages was pursued on the basis of quasi delict. Civil liability ex delicto and quasi delicto are two separate legal institutions.

If an accused is acquitted based on reasonable doubt on his guilt, his civil liability arising from the crime may be proved by preponderance of evidence only. However, if an accused is acquitted on the basis that he was not the author of the act or omission complained of (or that there is declaration in a final judgment that the fact from which the civil might arise did not exist), said acquittal closes the door to civil liability based on the crime or ex delicto. In this second instance, there being no crime or delict to speak of, civil liability based thereon or ex delicto is not possible. In this case, a civil action, if any, may be instituted on grounds other than the delict complained of.

As regards civil liability arising from quasi-delict or culpa aquiliana, same will not be extinguished by an acquittal, whether it be on ground of reasonable doubt or that accused was not the author of the act or omission complained of (or that there is declaration in a final judgment that the fact from which the civil liability might arise did not exist). The responsibility arising from fault or negligence in a quasi-delict is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. An acquittal or conviction in the criminal case is entirely irrelevant in the civil case based on quasi-delict or culpa aquiliana.

C. PREJUDICIAL QUESTION (Art. 36, CC; R111, Section 6, ROC)

Art. 36. Pre-judicial questions which must be decided before any criminal prosecution may be instituted or may proceed, shall be governed by rules of court which the Supreme Court shall promulgate and which shall not be in conflict with the provisions of this Code.

Rules of Court – Rule 111 Sec. 6. Suspension by reason of prejudicial question. – A petition for suspension of the criminal action based upon the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to suspend shall be filed in the same criminal action at any timebefore the prosecution rests.

Sec. 7. Elements of prejudicial question. – The elements of a prejudicial questions are: (a) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (b) the resolution of such issue determines whether or not the criminal action may proceed

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What is a prejudicial question? A prejudicial question is one based on a fact separate and distinct from the crime but is so intimately connected with it that it determines the guilt or innocence of the accused.

Elements: (1) the previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and (2) the resolution of such issue determines whether or not the criminal action may proceed.

****Take note that the new rule is that the civil action must have been previously instituted in order to constitute a prejudicial question. QUIAMBAO V. OSORIO

Respondents Buensucero and Gaza filed a case for forcible entry against Quiambao when the latter allegedly entered their lot, placed bamboo posts and began building a house. Quiambao countered that the Agreement upon which respondents base their prior possession over lot had already been cancelled by the Land Authority. He also alleges the pendency of an administrative case the Land Authority between the same parties and involving the same piece of land. In said administrative case, petitioner disputed private respondents’ right of possession over the property in question by reason of the latter’s default in the installment payments for the purchase of said lot. Petitioner asserted that his administrative case was determinative of private respondents’ right to eject petitioner from the lot in question; hence a prejudicial question which bars a judicial action until after its termination.

ISSUE: Whether there’s a prejudicial question. HELD: Yes. A prejudicial question is understood in law to be that which arises in a case the resolution of

which is a logical antecedent of the issue involved in said case and the cognizance of which pertains to another tribunal. The essential elements of a prejudicial question as provided under Section 5, Rule 111 of the Revised Rules of Court are: [a] the civil action involves an issue similar or intimately related to the issue in the criminal action; and [b] the resolution of such issue determines whether or not the criminal action may proceed. The actions involved in the case at bar being respectively civil and administrative in character, it is obvious that technically, there is no prejudicial question to speak of.

Equally apparent, however, is the intimate correlation between said two proceedings, stemming from the fact that the right of respondents to eject petitioner from the lot depends primarily on the resolution of the pending administrative case. For while it may be true that respondents had prior possession of the lot, at the time of the institution of the ejectment case, such right of possession had been terminated, or at the very least, suspended by the cancellation by the Land Authority of the Agreement to Sell executed in their favor.

Whether or not private respondents can continue to exercise their right of possession is but a necessary, logical consequence of the issue involved in the pending administrative case assailing the validity of the cancellation of the Agreement to Sell and the subsequent award of the disputed portion to petitioner. If the cancellation of the Agreement to Sell and the subsequent award to petitioner are voided, then private respondents would have every right to eject petitioner from the disputed area. Otherwise, private respondent’s light of possession is lost and so would their right to eject petitioner from said portion. YAP V. PARAS

This is a dispute between siblings over a piece of property they inherited from their parents. Paras sold to Yap his share in the intestate estate for ₱300, as evidenced by a private document. 19 years later, he sold the same property to Santiago Saya- ang for ₱5000, as evidenced by a notarized Deed of Absolute Sale. Upon learning this, Yap filed a complaint for Estafa. But before arraignment, MTC Judge Barcelona, whose son is the counsel for the respondent, moto proprio issued an order dismissing the criminal case on the ground that there is a prejudicial question to a civil action, which must be ventilated in the proper civil court.

ISSUE: Whether the criminal action will only be suspended when there is a prejudicial question in a civil case.

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HELD: Judge Barcelona did commit grave abuse of discretion in moto proprio issuing the order of dismissal. The suspension may be made only upon petition and not at the instance of the judge alone, and Section 6, Rule 111 of the Rules of Court also says suspension, not dismissal. Furthermore, it is the continuation of the criminal action, not the criminal action that is prejudicial to the civil action. It must also be noted that not every defense raised in the civil action will raise a prejudicial question to justify suspension of the criminal action. The defense must involve an issue similar or intimately related to the same issue raised in the criminal action and its resolution should determine whether the latter action may proceed. In the case at bar, no motion for suspension was made. Judge Barcelona was also not informed of Paras’ defense in the civil action. Thus, he could not have ascertained then if the issue raised in the civil action would determine the guilt or innocence of the accused in the criminal case. TAMIN V. CA

Petitioner municipality is the owner of the subject land of this case. The respondents were allowed to live and use such land on the condition that if the land will be used for a public purpose. A presidential decree was passed wherein the land will be used for a plaza and that the national government apportioned a certain amount of money for a municipal gymnasium. Said building cannot be constructed due to the buildings constructed by the respondents. The municipality filed a case but the respondents wanted to dismiss the case because of the fact that there was an ongoing cadastral proceeding. The municipality obtained a writ of possession from the lower courts and enforced it, thereby destroying the buildings constructed by the respondents.

ISSUE: Whether or not the petitioner municipality is entitled to a writ of possession and a writ of demolition even before the trial of the case starts.

HELD: No. There is still the cadastral proceedings which would declare once and for all who the real owner is. That is a prejudicial question. Technically, there should be no prejudical question because both are civil cases. But the SC stated that the fact that the cadastral proceeding would declare who the real owner should be kept in mind. The writ of possession and writ of demolition given by the lower court is premature. What it should have done is wait for the outcome of the cadastral proceeding. In the event that respondent Vicente Medina is declared owner of the subject parcel of land, necessarily, the private respondents would be entitled to just compensation for the precipitate demolition of their buildings. On the other hand, if private respondent Medina is declared to have no rights over the subject parcel of land then, the private respondents would not be entitle to any compensation for the demolition of their buildings. In such a case the private respondents are considered squatters and therefore, the demolition of their buildings would turnout to have been justified. The petitioner should put up a bond so that in case the cadastral proceeding rule in favor of respondents, they can get their just compensation for the demolition of their buildings. SPOUSES LEE-YU V. PCIB

Real Estate Mortgage was executed by Spouses Vicente and Demetria Lee-Yu and Spouses Ramon and Virginia Yu over parcels of land in Dagupan City and Quezon City, in favor of respondent PCIV to secure a loan of P9M.

Upon failure to pay the loan, a petition for Extrajudicial foreclosure of Real Estate Mortgage on the Dagupan City properties was filed by the Sheriff and an auction sale was held, with PCIB as the highest bidder.

2 months before the expiration of the redemption period, PCIV filed a PETITION FOR A WRIT OF POSSESSION. In the meantime, Petitioners filed a complaint for ANNULMENT OF CERTIFICATE OF SALE. SC: NO PQ

DOCTRINE: The case for annulment of a certificate of sale and the case for a petition for a writ of possession are

both civil in nature. The issue in the annulment case is whether the extrajudicial foreclosure of the mortgage and the auction sale are void. On the other hand, the issue in the petition for writ of

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possession is whether respondent is entitled to a writ of possession of the foreclosed properties. Clearly, NO PQ can arise from the existence of the 2 actions. The 2 cases can proceed separately.

PQ generally comes into play in a situation where a civil axn & a criminal axn are both pending and there exists in the former an issue that must be preemptively resolved before the criminal action may proceed, because howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the crim case. Rationale behind principle of PQ is to avoid 2 conflicting decisions.

MARBELLA- BOBIS V. BOBIS, GR 138509 (JULY 31, 2000)

Isagani Bobis contracted his first marriage with Maria Javier. Without said marriage having been annulled, he subsequently contracted a second marriage with Imelda Marbella and allegedly a third marriage with Julia Hernandez. Imelda Marbella filed an information for bigamy. Thereafter, Isagani Bobis initiated a civil action for declaration of absolute nullity of his first marriage on the ground that it was celebrated without a marriage license. He then filed a motion to suspend the criminal proceeding for bigamy invoking the pending civil case for nullity of the first marriage as a prejudicial question to the criminal case.

ISSUE: W/N the subsequent filing of a civil action for declaration of nullity of previous marriage constitutes a prejudicial question to a crim case for bigamy.

HELD: No. A marriage though void still needs a judicial declaration of such fact before any party can marry again; otherwise the second marriage will also be void. The reason is that, without a judicial declaration of its nullity, the first marriage is presumed to be subsisting. Any decision in the civil action for nullity would not erase the fact that the respondent entered I to a second marriage during the subsistence of a first marriage. Thus a decision in the civil case is not essential to the determination of the criminal charge. It is, therefore, not a prejudicial question.

On Prejudicial question: A Prejudicial question is one which arises in case the resolution is a logical antecedent of the issue involve therein. It is a question based on a fact distinct and separate from the crime but so intimately connected with it that I determines the guilt or innocence of the accused. It must appear not only that the civil case involves facts upon which the criminal action is based, but also that the resolution of the issues raised in the civil action would necessarily be determinative of the criminal case. Consequently, the defense must involve an issue similar or intimately related to the same issue raised in the criminal action and its resolution determines whether or not the latter action may proceed.

Its two essential elements are: a. The civil action involves an issue similar or intimately related to the issue raised in the criminal

action; and b. The resolution of such issue determines whether or not the criminal action may proceed.\ A prejudicial question does not conclusively resolve the guilt or innocence of the accused but simply

tests the sufficiency of the allegations in the information in order to sustain the further prosecution of the criminal case. A party who raises a prejudicial question is deemed to have hypothetically admitted that all the essential elements of the crime have been adequately alleged in the information, considering that the prosecution has not et presented a single evidence on the indictment or may not yet have rested its cause. A challenge of the allegations in the information on the merits of the criminal charge through a non-criminal suit. D. SUBSIDIARY LIABILITY (Arts, 102- 103, RPC; Art. 106- 109, Labor Code)

1. Concept and Requisites 2. Diligence not a defense

Art. 102. Subsidiary civil liability of innkeepers, tavernkeepers and proprietors of establishments.

— In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or corporations shall be civilly liable for crimes committed in their establishments, in all cases where a violation of municipal ordinances or some general or special police regulation shall have been committed by them or their employees.

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Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their houses from guests lodging therein, or for the payment of the value thereof, provided that such guests shall have notified in advance the innkeeper himself, or the person representing him, of the deposit of such goods within the inn; and shall furthermore have followed the directions which such innkeeper or his representative may have given them with respect to the care and vigilance over such goods. No liability shall attach in case of robbery with violence against or intimidation of persons unless committed by the innkeeper's employees.

Art. 103. Subsidiary civil liability of other persons. — The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties.

Requisites of subsidiary civil liability of the employer, teacher, corporation, etc: (a) the existence

of an employer-employee relationship; (b) that the employer is engaged in some kind of industry; (c) that the employee is adjudged guilty of the wrongful act and found to have committed the offense in the discharge of his duties (not necessarily any offense he commits "while" in the discharge of such duties); and (d) that said employee is insolvent. CARPIO V. DOROJA

Sometime on October 23, 1985, accused-respondent Edwin Ramirez, while driving a passenger Fuso Jitney owned and operated by Eduardo Toribio, bumped Dionisio Carpio, a pedestrian crossing the street, as a consequence of which the latter suffered from a fractured left clavicle as reflected in the medico-legal certificate and sustained injuries which required medical attention for a period of (3) three months. An information for Reckless Imprudence Resulting to Serious Physical Injuries was filed against Edwin Ramirez with the Municipal Trial Court of Zamboanga City, Branch IV.

On January 14, 1987, the accused voluntarily pleaded guilty to a lesser offense and was accordingly convicted for Reckless Imprudence Resulting to Less Serious Physical Injuries under an amended information punishable under Article 365 of the Revised Penal Code.

At the early stage of the trial, the private prosecutor manifested his desire to present evidence to establish the civil liability of either the accused driver or the owner-operator of the vehicle. Accused's counsel moved that the court summon the owner of the vehicle to afford the latter a day in court, on the ground that the accused is not only indigent but also jobless and thus cannot answer any civil liability that may be imposed upon him by the court. The private prosecutor, however, did not move for the appearance of Eduardo Toribio.

Thereafter, a writ of execution dated March 10, 1988 was duly served upon the accused but was, however, returned unsatisfied due to the insolvency of the accused as shown by the sheriffs return. Thus, complainant moved for a subsidiary writ of execution against the subsidiary liability of the owner-operator of the vehicle. The same was denied by the trial court on two grounds, namely, the decision of the appellate court made no mention of the subsidiary liability of Eduardo Toribio, and the nature of the accident falls under "culpa-aquiliana" and not culpa-contractual." A motion for reconsideration of the said order was disallowed for the reason that complainant having failed to raise the matter of subsidiary liability with the appellate court, said court rendered its decision which has become final and executory and the trial court has no power to alter or modify such decision

ISSUE: Whether or not the subsidiary liability of the owner-operator may be enforced in the same criminal proceeding against the driver where the award was given, or in a separate civil action.

HELD: Yes. In order that an employer may be held subsidiarily liable for the employee's civil liability in the criminal action, it should be shown (1) that the employer, etc. is engaged in any kind of industry, (2) that the employee committed the offense in the discharge of his duties and (3) that he is insolvent. The subsidiary liability of the employer, however, arises only after conviction of the employee in the criminal action. All these requisites present, the employer becomes ipso facto subsidiarily liable upon the employee's conviction and upon proof of the latter's insolvency.

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Toribio cannot claim that he did not have his day in court just because the decision against Ramirez made no mention of his subsidiary liability. The proceeding for the enforcement of the subsidiary civil liability may be considered as part of the proceeding for the execution of the judgment. A case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory control over its process of execution, and this power carries with it the right to determine every question of fact and law which may be involved in the execution.

The filing of a separate complaint against the operator for recovery of subsidiary liability is not necessary since his liability is clear from the decision against the accused. BANTOTO V. BOBIS

Crispin Vallejo was the registered owner of a "jeepney" named "Jovil 11", with plate TPU-20948, that was operated by him in Bacolod City through driver Salvador Bobis. On 24 October 1948, through the driver's negligence, the "jeepney" struck a 3-year old girl, Damiana Bantoto, inflicting serious injuries that led to her death a few days later.

The City Fiscal of Bacolod filed an information charging Bobis with homicide through reckless imprudence, to which Bobis pleaded guilty. He was, accordingly, sentenced to 2 months and 1 day of arresto mayor and to indemnify the deceased girl's heirs (appellees herein) in the sum of P3,000.00.

Batoto now was asking in his amended complaint that Crispin Vallejo be colodarily liable for damages, consisting of the civil indemnity required of the driver Bobis in the judgment of conviction, plus moral and exemplary damages and attorneys' fees and costs.

ISSUE: Whether failure to aver that Bobis was not insolvent resulted to lack of cause of action HELD: No. The Master’s liability under the RPC for crimes committed by his servants and employees in

the discharge of their duties, is not predicated upon the insolvency of the latter. Nowhere in Art 10 does it state that insolvency is a condition precedent and such insolvency is only required when the liability of the master is being made effective by execution levy BUT NOT for the rendition of judgment against the master. The subsidiary liability of the master merely imports that the master’s property cannot be seized without first exhausting that of the servant.

Note: Vallejo invoked Marquez vs. Castillo where the court held that the subsidiary liability of the master arises only when the servant commits a criminal act while in the actual performance of his duties and he is insolvent. BUT the court held that such was a mere obiter since in Marquez, the ratio decidendi of the case was that the driver was not in the performance of his assigned duties which thus exonerated the master from subsidiary liability. YONAHA V. CA

Elmer Ouano was charged with the crime of “Reckless Imprudence Resulting In Homicide”. The incident was laid out in his Information17.

• When arraigned, the accused pleaded “guilty”. Taking into account the mitigating circumstances of voluntary surrender and his plea of guilty, the court held him to suffer and undergo imprisonment of 1 year and 1 day to 1 year and 8 months and to pay the heirs of the victim the sum of P50k for the death of the victim; P30,000.00 for actual damages incurred in connection with the burial and the nightly prayer of the deceased victim and P10,000.00 as attorney’s fees.

• A writ of execution was issued for the satisfaction of the monetary award. In his Return of Service, dated 07 May 1992, the MTCC Deputy City Sheriff stated that he had served the writ on accused Elmer Ouano but that the latter had manifested his inability to pay the money obligation.

• Forthwith, private respondents presented a “motion for subsidiary execution” with neither a notice of hearing nor notice to petitioner. Acting on the motion, nevertheless, the trial court issued an order, dated 29 May 1992, directing the issuance of a writ of subsidiary execution. The sheriff went to petitioner’s residence to enforce the writ, and it was then, allegedly for the first time, that petitioner was informed of Ouano’s conviction. Petitioner filed a motion to stay and to recall the subsidiary writ of execution principally anchored on the lack of prior notice to her and on the fact that the employer’s liability had yet to be established. Private respondents opposed the motion.

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• On 24 August 1992, the TC denied petitioner’s motion. On 23 September 1992, petitioner’s plea for reconsideration of the denial was likewise rejected.

• Petitioner promptly elevated the matter to the Court of Appeals (CA-GR SP No. 29116) for review. The appellate court initially restrained the implementation of the assailed orders and issued a writ of preliminary injunction upon the filing of a P10,000.00 bond. Ultimately, however, the appellate court, in its decision of 28

September 1993, dismissed the petition for lack of merit and thereby lifted the writ of preliminary injunction.

• In the instant appeal, petitioner additionally reminds the Court that Ouano’s conviction was not the result of a finding of proof beyond reasonable doubt but from his spontaneous plea of guilt.

ISSUE: Whether the issuance of subsidiary execution was proper HELD: NO. The statutory basis for an employer’s subsidiary liability is found in Article 103 of the RPC.

his Court has since sanctioned the enforcement of this subsidiary liability in the same criminal proceedings in which the employee is adjudged guilty,on the thesis that it really is a part of, and merely an incident in, the execution process of the judgment. But, execution against the employer must not issue as just a matter of course, and it behooves the court, as a measure of due process to the employer, to determine and resolve a priori, in a hearing set for the purpose, the legal applicability and propriety of the employer’s liability.

The requirement is mandatory even when it appears prima facie that execution against the convicted employee cannot be satisfied. The court must convince itself that the convicted employee is in truth in the employ of the employer; that the latter is engaged in an industry of some kind; that the employee has committed the crime to which civil liability attaches while in the performance of his duties as such; and that execution against the employee is unsuccessful by reason of insolvency. The assumption that, since petitioner in this case did not aver any exculpatory facts in her “motion to stay and recall,” as well as in her motion for reconsideration, which could save her from liability, a hearing would be a futile and a sheer rigmarole is unacceptable. The employer must be given his full day in court.

The subsidiary liability of an employer under Article 103 requires (a) the existence of an E-ER relationship; (b) that the employer is engaged in some kind of industry; (c) that the employee is adjudged guilty of the wrongful act and found to have committed the offense in the discharge of his duties (not necessarily any offense he commits “while” in the discharge of such duties); and (d) that said employee is insolvent.

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VIII. DAMAGES

A. Concept / Kinds of Damages Art. 2197 Damages may be: (M-E-N-T-A-L)

1. Actual or compensatory; 4. Temperate or moderate; 2. Moral; 5. Liquidated; or 3. Nominal; 6. Exemplary or corrective

What are the kinds of damages and give a brief explanation? Damages may be: 1. Actual – This is compensation for the pecuniary loss actually suffered and proved by the plaintiff. Ex. A robber steals a ring. Actual damages = value of the ring

Someone beats you up. Actual damages = expenses for going to the hospital, doc, medicine Contract with supplier of raw materials. Supplier fails to comply and because of that, the buyer fails

to manufacture his products. Actual damages = unrealized profit. 2. Moral – Moral damages include: (a) physical suffering (b) mental anguish (c) fright (d) serious anxiety (e) besmirched reputation (f) wounded feelings (g) moral shock (h) social humiliation (i) similar injury Ex. Someone beats you up. Moral damages = pain, physical suffering

Someone kills your wife. Moral damages = moral suffering, which is presumed by law once a family member dies.

3. Nominal – Adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. Ex. Police officers barge into your home without a warrant. 4. Temperate – More than nominal but less than actual/compensatory. May be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty. Ex. Evidence presented at the trial to show the value of the damage was wrong, but the damage itself

was proven. 5. Liquidated - agreed upon by the parties to a contract, to be paid in case of breach thereof. Ex. Contract for construction which states that in case of delay in completion, the contractor must pay

1/10 of 1% of the project cost for every day of delay. 6. Exemplary or corrective - imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. Ex. When offender acted with evident bad faith and malice, such as in crimes attended by aggravating

circumstances. SPOUSES ONG V. CA (1999)

One morning, an Inland bus (leased by Philtranco) which was driven by Coronel slowed down to avoid a stalled truck when it was suddenly bumped from the rear by a Philtranco bus. Spouses Ong were passengers of the Inland bus and both sustained injuries so they were rushed to the hospital for treatment and got confined for more than a week

Spouses Ong then filed an action for damages against Philtranco and Inland. They alleged that they suffered injuries, preventing the wife from operating a sari-sari store and the husband from continuing his work as an OFW. Stating that they incurred P10,000 as medical and miscellaneous expenses, they also claimed for the other types of damages and attorney’s fees presenting several documentary evidence like receipts, pay slips etc.

TC absolved Inland and held Philtranco liable based on culpa aquiliana as it failed to prove that it exercised due diligence in the selection and supervision of its employees. The proximate cause of the accident was “the bumping from behind by the Philtranco bus. It ordered payment of P10,000 actual damages + certain sums for compensatory, moral damages and unrealized profit.

CA completely reversed, ordering Philtranco to indemnify petitioners and in lieu thereof, Inland shall pay petitioners for their damages. The liability of Inland for medical and miscellaneous expenses (actual

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damages awarded was P10,000) was reduced, as the evidence on record showed a lesser amount was spent (only P3,900). The award for unearned income was disallowed and the amount of moral damages was also reduced as the wife’s testimony that the use of her right arm was diminished and that she lost income was deemed self-serving.

ISSUE: W/N the reduction in the amounts of damages awarded was proper. HELD: ACTUAL DAMAGES - REDUCED. Although there was an agreement to submit the case for

decision based on the pleadings, this does not necessarily imply that petitioners are entitled to the award of damages. The fundamental principle of the law on damages is that one injured by a breach of contract (in this case, the contract of transportation) or by a wrongful or negligent act or omission shall have a fair and just compensation, commensurate with the loss sustained as a consequence of the defendant’s acts. Hence, actual pecuniary compensation is the general rule, except where the circumstances warrant the allowance of other kinds of damages.

Actual damages are such compensation or damages for an injury that will put the injured party in the position in which he had been before he was injured. Except as provided by law or by stipulation, a party is entitled to adequate compensation only for such pecuniary loss as he has duly proven.

To be recoverable, actual damages must be pleaded and proven in Court. Damages cannot be presumed. The award thereof must be based on the evidence presented, not on the personal knowledge of the court; and certainly not on speculative and nonsubstantial proof. The lack of basis for such award was obvious as the documentary evidence shows they only spent the sum of P3,900. Damages, after all, are not intended to enrich the complainant at the expense of the defendant.

MORAL DAMAGES - AWARDED. A person is entitled to the physical integrity of his or her body, and if that integrity is violated, damages are due and assessable. Since physical injury is not susceptible of exact monetary estimation, the usual practice is to award moral damages.

In the case at bar, it was sufficiently shown during the trial that the wife’s right arm could not function in a normal manner and that, as a result, she suffered mental anguish and anxiety. Thus, an increase in the amount of moral damages awarded appears to be reasonable and justified. The husband also suffered mental anxiety and anguish from the accident. Thus, he should be separately awarded moral damages.

In some instances, the Court awards the cost of medical procedures to restore the injured person to his or her former condition. However, this award necessitates expert testimony on the cost of possible restorative medical procedure. In the case at bar, petitioner failed to present evidence regarding the feasibility or practicability and the cost of a restorative medical operation on her arm. Thus, there is no basis to grant her a sum for such.

UNREALIZED INCOME - REMOVED. Wife failed to substantiate her claim. Although actual damages include indemnification for profits which the injured party failed to obtain, the rule requires that said person produce the “best evidence of which his case is susceptible.”

The bare and unsubstantiated assertion of the wife is not the best evidence to prove her claim of unrealized income. She had no valid reason justify her failure to present more credible evidence of her income. Furthermore, after her confinement she could have returned to her work at the public market despite the plaster cast on her right arm, since she claimed to have two nieces as helpers.

ATTORNEY’S FEES - REDUCED: An award of attorney’s fees is an indemnity for damages ordered by a court to be paid by the losing party to the prevailing party, based on any of the cases authorized by law. It is payable not to the lawyer but to the client, unless the two have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.

The Court has established a set of standards in fixing the amount of attorney’s fees: “(1) [T]he amount and character of the services rendered; (2) labor, time and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; (8) the results secured, it being a recognized rule that an attorney may properly charge a much larger fee when it is contingent than when it is not.”

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Counsel’s performance, however, does not justify the award of 25% attorney’s fees. It is well-settled that such award is addressed to sound judicial discretion and subject to judicial control. His handling of the case was sorely inadequate, as shown by his failure to follow elementary norms of civil procedure and evidence.

B. GENERAL PRINCIPLES OF RECOVERY AIR FRANCE V. CA (1989)

Morales, thru his agent, bought an airline ticket from Air France’s Manila ticketing office. The itinerary covered by the ticket included several cities w/ certain segments restricted by markings of “non endorsable” and “valid on AF (Air France) only.”

While in New York, Morales obtained medical certificates attesting to an ear infection which necessitated medical treatment. After a few more trips to other cities in Europe, he requested Air France (twice) to shorten his trip by deleting some of the cities in his itinerary so that he can go back to Manila and have his ear checked. Air France informed Morales that as a matter of procedure, confirmation of the Manila ticketing office must be secured before shortening of the route. His requests were eventually denied. This prompted him to buy an entirely new set of tickets to be able to go back home.

Upon arriving in Manila, he sent a letter-complaint to Air France thru its Manila ticketing office. Air France advised him to surrender the unused flight coupons in order to have them refunded but he kept the said coupons and instead, filed a complaint for breach of contract of carriage and damages.

ISSUES: W/N there was really a breach of contract of carriage on the part of the petitioner, as to justify

the award to private respondent of actual, moral, and exemplary damages? HELD: THERE WAS NO BREACH OF CONTRACT. AIR FRANCE IS NOT LIABLE. International Air

Transportation Association (IATA) Resolution No. 275 e, 2., special note reads: "Where a fare is restricted and such restrictions are not clearly evident from the required entries on the ticket, such restrictions may be written, stamped or reprinted in plain language in the Endorsement/Restrictions" box of the applicable flight coupon(s); or attached thereto by use of an appropriate notice." Voluntary changes to tickets, while allowable, are also covered by (IATA) Resolution No. 1013, Art. II, which provides: "1. changes to the ticket requested by the passenger will be subject to carrier’s regulations.

Private respondent wanted a rerouting to Hamburg, Geneva, Rome, Hongkong and Manila which shortened the original itinerary on the ticket issued. Considering the original restrictions on the ticket, it was not unreasonable for Air France to deny the request. Besides, a recurring ear infection was pleaded as reason necessitating urgent return to Manila. Assuming arguendo a worsening pain or discomfort, he appears to have still proceeded to 4 other cities covering a period of at least 6 days and leaving open his date of departure from Hongkong to Manila. And, even if he claimed to have undergone medical examination upon arrival in Manila, no medical certificate was presented. He failed to even remember his date of arrival in Manila.

With a claim for a large amount of damages, the Court finds it unsual for respondent, a lawyer, to easily forget vital information to substantiate his plea. It is also essential before an award of damages that the claimant must satisfactorily prove during the trial the existence of the factual basis of the damages and its causal connection to defendant's acts.

Air France employees in Hamburg informed Morales that his tickets were partly stamped "non-endorsable" and "valid on Air France only." Mere refusal to accede to the passenger's wishes does not necessarily translate into damages in the absence of bad faith. Morales has failed to show wanton, malevolent or reckless misconduct imputable to AF in its refusal to re-route.

Air France Manila acted upon the advise of its Manila ticketing office in denying his request. There was no evident bad faith when it followed the advise not to authorize rerouting. Of importance, however, is the fact that private respondent is a lawyer, and the restriction box clearly indicated the nonendorsable character of the ticket. Omissions by ordinary passengers may be condoned but more is expected of

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members of the bar. An award of moral and exemplary damages CANNOT be sustained, but petitioner has to refund the unused coupons in the Air France ticket to the private respondent. DICHOSO V. CA (1990)

Spouses Prila owned a parcel of land and upon the death of the wife, a portion thereof was given to their only daughter. When the husband died, the portion pertaining to him was divided into three and distributed to the daughter, and persons A & B. Eventually, the daughter sold a portion of her area petitioner Dichoso who consequently took actual physical possession thereof, exercising various acts of ownership thereon.

On the other hand, person A sold to respondent Ramos a portion of her share but the portion sold exceeded her share in the property. Hence, the excess portion which Ramos claims to have possessed, is now the land in question.

It is alleged that Ramos, in the company of policemen, seized the produce of the land consisting of 50 cavans of palay from the tenant of Dichoso. In retaliation, Dichoso appropriated parts of the produce. Ramos eventually filed a complaint for quieting of title over the excess part.

RTC ruled in favor of Ramos and the CA affirmed such ruling. The CA ordered Dichoso to restitute the possession of the land to the plaintiff and to deliver to the plaintiff 40 cavans of palay for every year until the land in question is returned or their equivalent value in money per cavan of palay.

ISSUE: W/N Dichoso should deliver 40 cavans considering Ramos’ share of the harvest is only 1/3 of it. HELD: Actual or compensatory damages cannot be presumed, but must be duly proved, and proved

with reasonable degree of certainty. A court cannot rely on speculation, conjecture or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have suffered and on evidence of the actual amount thereof.

It is undisputed that the land in question yields an average of 20 sacks of palay per planting and that it is planted to palay twice a year. Ramos' share of the harvest is only one-third (1/3). In view of his dispossession and the fact that his tenant has vacated the land that same year, he cannot allege that his tenant is entitled to his two-thirds (2/3) share.

SC ruled in favour of Dichoso declaring that Dichoso is the owner of the portion of the land in dispute as shown in the boundaries indicated in the original deed of sale. Award of actual damages was REDUCED in proportion to the area that may be awarded to Ramos and to his one-third (1/3) participation in the harvests.

PAL V. MIANO (1995)

Florante Miano took PAL’s flight bound for Germany. He had an immediate onward connecting flight via Lufthansa flight to Vienna, Austria. At the NAIA, he checked-in one brown suitcase but did not declare a higher valuation. He claimed that his suitcase contained money, documents, one camera, etc. Upon Miano’s arrival at Vienna, his checked-in baggage was missing. He reported the matter to the authorities and after 3 hours of waiting, he proceeded to Piestany, Czechoslovakia. 11 days after, his suitcase was delivered to him in Piestany. Miano instituted an action for damages before the RTC claiming that because of the delay in the delivery of his suitcase, he was forced to borrow money to buy some clothes, to pay extra for the transportation of his baggage from o Piestany, and lost his camera. PAL disclaimed any liability on the ground that there was neither a report of mishandled baggage on his flight nor did it receive tracer telex (an action of any station that the airlines operate from whom a passenger may complain of not receiving his baggage upon his arrival). RTC rendered a decision that although PAL’s actions were in good faith, Miano is awarded moral and exemplary damages and atty’s fees.

ISSUE: WON the RTC erred in awarding moral and exemplary damages to private respondent.

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HELD: YES. In breach of contract of carriage by air, moral damages are awarded only if the defendant acted fraudulently or in bad faith. Bad faith means a breach of a known duty through same motive of interest or ill will.

The trial court erred in awarding moral damages. The established facts show that PAL's late delivery of the baggage was not motivated by ill will or bad faith. In fact, it immediately coordinated with its Central Baggage Services to trace Miano’s suitcase and succeeded in finding it. Since PAL did not receive any tracer telex, it was reasonable to presume that everything was normal and regular. Upon inquiry from their Frankfurt Station however, it was discovered that the interline tag of the baggage was accidentally taken off. It was customary for destination stations to hold a tagless baggage until properly identified and without the tracer telex, the color and the type of baggage are used as basis for the matching, thus, the delay.

The exemplary damages must be disallowed. The prerequisite for the award of exemplary damages in cases of contract or quasi-contract is that the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner. The undisputed facts do not so warrant the characterization of the action of PAL.

The award of attorney's fees must also be disallowed for lack of legal leg to stand on. The fact that Miano was compelled to litigate and incur expenses to protect and enforce his claim did not justify it. The general rule is that attorney's fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate.

Assailed Decision MODIFIED deleting the award of moral and exemplary damages and attorney's fees. Needless to say, the award of attorney's fees must be deleted where the award of moral and exemplary damages are eliminated. DBP V. CA (1998)

Lydia Cuba obtained several loans from DBP and as security, Cuba executed two Deeds of Assignment of her Fishpond Leasehold Rights granted by the govt. Cuba failed to pay so, without foreclosure proceedings, DBP appropriated the Leasehold Rights.

After DBP has appropriated the Leasehold Rights of Cuba over the fishpond, DBP executed a Deed of Conditional Sale of the Leasehold Rights in favor of Cuba. In the negotiation for repurchase, Cuba addressed two letters to the Manager DBP to which DBP thereafter accepted such offer to repurchase. Cuba failed to pay the amortizations stipulated in the Deed of Conditional Sale so Cuba entered with the DBP a temporary arrangement whereby Cuba promised to make certain payments.

DBP thereafter sent a Notice of Rescission to Cuba, took possession of the Leasehold Rights, then executed a Deed of Conditional Sale in favor of a 3rd party through a public sale.

ISSUES: W/N Cuba is entitled to recover (a) actual (b) moral (c) exemplary damages. HELD: (a) NO - ACTUAL DAMAGES. Article 2199: “Except 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. Such compensation is referred to as actual or compensatory damages.” Actual or compensatory damages cannot be presumed, but must be proved with reasonable degree of certainty. A court cannot rely on speculations as to the fact and amount of damages, but must depend upon competent proof that they have been suffered by the injured party and on the best obtainable evidence of the actual amount thereof.

In the present case, TC awarded Cuba P1M+ as actual damages consisting of P550k for the value of the loss of personal belongings and equipment of Cuba and P517k for the value of pieces of bangus allegedly stocked when DBP first ejected Cuba from the fishpond.

The alleged loss of personal belongings and equipment was NOT proved by clear evidence. Other than the testimony of Cuba and her caretaker, there was no proof as to the existence of those items before DBP took over the fishpond in question. There was no inventory of the alleged lost items before the loss neither was a single receipt or record of acquisition presented. Curiously, in her complaint dated 17 May, Cuba included "losses of property" as among the damages yet it was only in September 1985 when caretaker went to the fishpond to know of the alleged loss of several articles. Such claim for "losses of property," having been made before knowledge of the alleged actual loss, was therefore speculative.

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On the award of P517k for the value of the alleged pieces of bangus which died when DBP took possession, the same was not called for. Such loss was not duly proved; besides, the claim therefor was delayed unreasonably. Cuba only brought to the attention the alleged loss after 6 years. The award of actual damages should, therefore, be struck down for lack of sufficient basis.

(b) YES - MORAL DAMAGES. DBP's act of appropriating Cuba’s leasehold rights which was contrary to law and public policy, as well as its false representation to the then Ministry of Agriculture that it had "foreclosed the mortgage," an award of moral damages.

(c) YES - EXEMPLARY OR CORRECTIVE DAMAGES should likewise be awarded by way of example or correction for the public good. There being an award of exemplary damages, attorney's fees are also recoverable.

C. ACTUAL DAMAGES Art. 2199. GENERAL RULE: One is entitled to an adequate compensation only for such pecuniary loss

suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages. EXEMPTION: (1) provided by law: (2) stipulation Art. 2200. Actual damages may be: (1) value of the loss suffered (2) profits which the obligee failed to

obtain (unrealized profit) Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith

is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation.

Art. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the natural and probable consequences of the act or omission complained of. It is not necessary that such damages have been foreseen or could have reasonably been foreseen by the defendant.

Art. 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question.

Art. 2207. If the plaintiff's property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury.

Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six per cent per annum.

1. Damnum emergens / lucrum cessans (Art 2200 & 2201 above) 2. Disability / Commercial credit Art. 2205. Damages may be recovered: (1) For loss or impairment of earning capacity in cases of

temporary or permanent personal injury; (2) For injury to the plaintiff’s business standing or commercial credit.

3. Indemnity of death Art. 1764. Damages in cases comprised in this Section (Common Carriers) shall be awarded in

accordance with Title XVIII of this Book, concerning Damages. Art. 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier.

Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least Three thousand pesos, even though there may have been mitigating circumstances. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity

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at the time of his death; (2) If the deceased was obliged to give support according to the provisions of Art. 291, the recipient who is not an heir called to the decedent’s inheritance by the law of testate or intestate succession, may demand support from the person causing the death, for a period not exceeding five years, the exact duration to be fixed by the court; (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased.

4. Interest Art. 2209. As stated above Art. 2210. Interest may, in the discretion of the court, be allowed upon damages awarded for breach of

contract. Art. 2211. In crimes & quasi-delicts, interest as part of the damages may, if proper, be adjudicated in

the discretion of the court. Art. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the

oblig may be silent upon this point. Art. 2213. Interest cannot be recovered upon unliquidated claims/ damages, except when the demand

can be established with reasonably certainty. 5. Attorney’s fees Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial

costs, cannot be recovered, except: (1) When exemplary damages are awarded; (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; (3) In criminal cases of malicious prosecution against the plaintiff; (4) In case of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim; (6) In actions for legal support; (7) In actions for the recovery of wages of household helpers, laborers and skilled workers; (8) In actions for indemnity under workmen's compensation and employer's liability laws; (9) In a separate civil action to recover civil liability arising from a crime; (10) When at least double judicial costs are awarded; (e.g. docket fees, TSN expenses; can be sizeable) (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. In all cases, the attorney's fees and expenses of litigation must be reasonable.

PNOC SHIPPING V. CA (1998)

A vessel owned by Maria Efigenia Fishing Corporation collided with a vessel then owned by Luzon Stevedoring Corporation (LSC). The Board of Marine Inquiry declared LSC to be at fault. After unsuccessful demands on LSC, Marie Efigenia sued LSC and the captain and prayed for an award of a certain sum allegedly representing the value of the fishing nets, boat equipment, and cargoes.

During the pendency of the case, PNOC sought to be substituted in the place of LSC as it had already acquired ownership of the vessel. Meanwhile, Maria Efigenia sought to amend its complaint by also claiming for a sum representing the value of the vessel, and alleging that it had also incurred unrealized profits and lost business opportunities.

TC ordered PNOC to pay based on some documentary evidence presented by the latter (in the form of price quotations). The CA affirmed in toto. Hence the instant recourse.

ISSUE: W/N the award of actual damages was proper. HELD: AWARD OF ACTUAL DAMAGES IMPROPER FOR LACK OF EVIDENTIARY BASIS THEREFOR.

HOWEVER, THE AWARD OF NOMINAL DAMAGES IS IN ORDER. In actions based on torts and quasi-delicts, actual damages include all the natural and probable consequences of the act or omission complained of. There are two kinds of actual damages: (1) the loss of what a person already possesses (dano emergente), and (2) the failure to receive as a benefit that which would have pertained to him (lucro cesante).

In the case of profit-earning chattels, as in this case a vessel, what has to be assessed is the value of the chattel as to its owner as a going concern at the time and place of the loss, and this means that regard must

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be had to existing and pending engagements. If the value of the ship reflects the fact that it is in any case certain of profitable employment, then nothing can be added to that value in respect of charters actually lost, since it would compensate the plaintiff twice over. On the other hand, if the ship is valued without reference to its actual future engagements, then it may be necessary to add to the value the anticipated profit.

To enable an injured party to recover actual or compensatory damages, he is required to prove the actual amount of loss with reasonable degree of certainty premised upon competent proof and on the best evidence available. He must establish his case by a preponderance of evidence. Damages cannot be presumed by the courts, in making an award it must point out specific facts that could afford a basis for measuring such damages.

In this case, actual damages were proven through the sole testimony of Maria Efigenia’s general manager and certain pieces of documentary evidence. The price quotations are ordinary private writings, and should have been proffered along with the testimony of the authors thereof. In the absence of which, they partake of hearsay evidence. Damages may not be awarded on the basis of hearsay evidence. Nonetheless, if there is lack of sufficient proof as to the actual damages suffered, the complainant is entitled to nominal damages.

EASTERN SHIPPING V. CA

Two drums of riboflavin were shipped from Japan for delivery on board the vessel “SS EASTERN COMET” owned by Eastern Shipping Lines. The shipment was insured by Mercantile Insurance Company. When the shipment arrived in Manila, one drum was found to be in bad order. As a result of the alleged fault and negligence of both Eastern Shipping Lines, the Metro Port Service, and the Allied Brokerage Corporation, the insurance company had to pay the consignee of the shipment around 19K for the damaged carge. The insurance company then filed an action against the three, claiming that under the marine insurance policy, it became subrogated to all the rights of action of the consignee against the defendants.

The CA ordered the defendants to jointly and severally pay the insurer 19K with legal interest at 12% per annum from the date of the filing of the complaint, until fully paid.

ISSUES: (1) Whether interest should commence from the date of the filing of the complaint or from the

date of the decision of the TC. (2) Whether the proper rate of interest is 12% per annum or 6% per annum.

HELD: Interest to be paid is 6% on the amount due, computed from the date of the decision of the court

a quo. A 12% interest, in lieu of 6%, shall be imposed on such amount upon finality of this decision until the payment thereof.

When an obligation, regardless of its source (law, contracts, quasi-contracts, delicts, quasi-delicts) is breached, the contravenor can be held liable for damages. With regard to an award or interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money (i.e., a loan or forbearance of money), the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default i.e., from judicial or extrajudicial demand under and subject to the provision of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time

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the quantification of damages may be deemed to have been reasonably ascertained). The actual base of the computation of legal interest shall, in any case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2 above shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

FRANCISCO V. CO (2006)

After the registered owner of a parcel of land died, the Cos filed a complaint against her heirs (includes petitioner Francisco, daughter of deceased). The parties eventually entered into a compromise agreement to settle the case stating that the heirs would lease to the Cos a certain portion of the land totaling for 15 years, part of which they were already occupying.

Few years after, the heirs filed a motion for the proper enforcement of the compromise agreement alleging that the Cos were occupying a portion larger than that agreed upon. The RTC granted the motion but CA reversed ruling that compromise agreement was already finally terminated and executed. The court explained that the compromise agreement mandated that a delineation be conducted in order to determine the bounds of the portion to be covered by the contract of lease. It follows then that the compromise agreement was deemed to have been fully implemented and duly enforced. CA also held that the heirs were barred by laches and negligence from making the claim because they kept quiet for almost 5 years.

Years later, Francisco (the daughter-heir) filed a complaint for forcible entry against the Cos. Cos contend that Francisco is already barred by res judicata because of the decision in the previous case. TC ruled in favor of Francisco saying that there was NO RES JUDICATA but CA reversed saying that while the 2 actions were different in form, there was still a similarity of causes of action because the same evidence would support and establish them, therefore the complaint for forcible entry was BARRED BY RES JUDICATA. By virtue of the ruling in case 2, it is clear that the lot in question was covered by a contract of lease. CA also held Francisco liable for moral damages, exemplary damages and attorney's fees due to malicious prosecution. Main issue in the case at bar therefore is whether or not res judicata applies.

ISSUE: W/N the award of moral, exemplary damages and attorney's fees was proper. HELD: NO. In ruling that petitioner was in bad faith in filing the instant suit, the CA predicated this

conclusion on the observation that respondent was well-aware that the issue involved in this case has already been settled by the courts. Due to this, petitioners understandably suffered mental anguish and serious anxiety, thereby entitling them to moral damages. Petitioner's bad faith however had not been preponderantly established in this case. Bad faith does not simply connote bad judgment or negligence, but it imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, which must be established by clear and convincing evidence since the law presumes good faith. In ascertaining the intention of the person accused of acting in bad faith, the courts must carefully examine the evidence as to the conduct and outward acts from which the inward motive may be determined. It does not appear that the CA has conducted the mandated careful examination of evidence that would sustain the award of moral damages.

Exemplary damages should not also be awarded. If the court has no proof or evidence upon which the claim for moral damages could be based, such indemnity could not be outrightly awarded. The same holds true with respect to the award of exemplary damages where it must be shown that the party acted in a wanton, oppressive or malevolent manner. Furthermore, this specie of damages is allowed only in addition to moral damages such that no exemplary damages can be awarded unless the claimant first establishes his clear right to moral damages.

Lastly, the mere fact that petitioners were constrained to litigate in order to protect and assert their rights does not ipso facto entitle them to attorney's fees. Art. 2208 (2) of the NCC provides that in order that attorney's fees may be awarded, the defendant's act or omission must have compelled the plaintiff to litigate with 3rd persons or to incur expenses to protect his interest. It is settled that the fact that the party was compelled to litigate and incur expenses to protect and enforce their claim does not justify the award

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of attorney's fees. The general rule is that attorney's fees cannot be recovered as part of damages because of the public policy that no premium must be placed on the right to litigate. The award of attorney's fees must be deleted where the award of moral and exemplary damages are eliminated. Additionally, the matter of attorney’s fees cannot be touched upon only in the dispositive portion of the decision. The text itself must state the reasons for it.

(Main Issue) Yes, res judicata applies. In this case, since the right to institute an action for forcible entry or unlawful detainer extends only in the absence of the right to hold possession, whether by virtue of any contact or otherwise, or upon the expiration of such right, the burden lies on the petitioner to establish that respondents had no legal right to enter into possession of the lot. Since the CA decision already established the right of the Cos to occupy, it becomes imperative for Francisco to establish her cause of action. Francisco failed to establish such. MARIKINA AUTOLINE V. PEOPLE

Suelto, a regular driver of Marikina Auto Line Transpo Co. (MALTC), was driving the passenger bus when the bus suddenly swerved to the right and struck the terrace of a commercial apartment owned by Erlinda Valdellon. Valdellon demanded payment of a certain sum to cover the cost of the damage to the terrace. The bus company and Suelto offered a lower settlement pay which Valdellon refused.

Consequently, Valdellon filed a criminal complaint for reckless imprudence resulting in damage to property against the driver. Valdellon also filed a separate civil complaint against the driver and the bus company for damages. During the trial, Valdellon testified on the damage caused to the terrace of her apartment, and, in support thereof, adduced in evidence a receipt for P35,000 for carpentry, masonry, etc. An engineer declared that he inspected the terrace and estimated the cost of repairs, including labor, at P171,088.

Both the trial court and the CA ruled in against herein petitioners. CA ordered MALTC and Suelto to pay, jointly and severally P100,000 to Valdellon, by way of actual and compensatory damages, as well as attorney’s fees and costs of suit.

ISSUE: W/N the award of P100,000 as actual damages is barren of factual basis since Valdello was able

to prove only the amount of P35,000. HELD: YES. Valdello failed to prove that the damages to the terrace caused by the incident amounted

to P100,000. The only evidence adduced to prove actual damages claimed were the summary computation of damage made by the engineer and the receipt representing cost for carpentry etc. Valdello failed to present the engineer to testify on his estimation. In the lower court’s decision, the TC awarded actual damages but failed to state the factual basis for such award.

The burden of proof is on the party who would be defeated if no evidence would be presented on either side. The burden is to establish one’s case by a preponderance of evidence which means that the evidence, as a whole, adduced by one side, is superior to that of the other. Actual damages are not presumed and cannot be anchored on mere speculations

While Valdello’s bare testimonial assertions in support of their claims for damages should not be discarded altogether, however, the same should be admitted with extreme caution and should be supported by independent evidence. An estimate of the damage cost will not suffice. Since Marikina Autoline adduced evidence (they presented an architect to testify so superior side!) that the cost of the damage to the terrace of Valdello would amount to P55,000, such amount is awarded as actual damages.

Valdello is entitled to exemplary damages of P20,000 as correctly awarded by the TC.

MAGBANUA V. JUNSAY (2007)

Rosemarie Magbanua, a housemaid of Dra. Junsay, allegedly made a hole on the kitchen’s door through which opening made her co-accused gain entrance and acting in conspiracy then and there willfully, unlawfully and feloniously took, robbed and carried away with them, assorted jewelries and cash, valued all in all in the amount of P29,624 to the damage and prejudice of Junsay.

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TC ruled acquitting Rosemarie of the crime of Robbery. (Basically it was based on the confession which was actually made under duress since she was maltreated AND there was insufficient evidence to convict her.) Thereafter, Rosemarie filed with the TC a Complaint for Damages against Dra. Junsay, her husband, and certain police officers. The Complaint alleged that by reason of respondents’ false, malicious, and illegal actuations in filing Criminal Case for Robbery against Rosemarie, the latter suffered untold pain, shame, humiliation, worry, and mental anguish, which if assessed in monetary terms will not be less than P200,000. It was further alleged therein that Rosemarie’s father lost his job and the family suffered. They therefore sought moral and exemplary damages, including attorney’s fees and litigation expenses, as well as loss of earnings and payment of expenses incurred.

ISSUE: W/N Rosemarie is entitled to damages for malicious prosecution.

HELD: NO. Malicious prosecution is an action for damages brought by one against whom a legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in favor of the defendant therein. The term has been expanded to include unfounded civil suits instituted just to vex and humiliate the defendant despite absence of a cause of action or probable cause.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution.

4 elements must be shown to concur to recover damages for malicious prosecution. Plaintiff must prove: (1) the prosecution did occur, and the defendant was himself the prosecutor or that he instigated its commencement; (2) the criminal action finally ended with an acquittal; (3) in bringing the action, the prosecutor acted without probable cause; and (4) the prosecution was impelled by legal malice -- an improper or a sinister motive. The gravamen of malicious prosecution is not the filing of a complaint based on the wrong provision of law, but the deliberate initiation of an action with the knowledge that the charges were false and groundless.

It is not disputed that the first and second elements are present.Anent the question of whether the prosecutor acted without probable cause, we find no reason to depart from the conclusions reached by the TC that it was not without probable cause.

In an action to recover damages based on malicious prosecution, it must be established that the prosecution was impelled by legal malice. There is necessity of proof that the suit was so patently malicious as to warrant the award of damages under Articles 19 to 21, of the Civil Code, or that the suit was grounded on malice or bad faith. There was no proof of a sinister design on the part of the respondents to vex or humiliate petitioner Rosemarie by instituting the criminal case against her. Dr. Junsay was robbed of her valuable belongings and can only be expected to bring the matter to the authorities. There can be no evil motive that should be attributed to one, who, as victim of a crime institutes the necessary legal proceedings. The actuations of polic officers also lacked legal malice. Their commencement of the action against Rosemarie was pursuant to their duties as police officers. The same was made subsequent to the report of Dr. Junsay of the commission of the crime, and the investigation on the person of Rosemarie. Even then, mistakes committed by a public officer are not actionable absent any clear showing that they were motivated by malice or gross negligence amounting to bad faith, which was not established in the case at bar.

CITY TRUST V. VILLANUEVA

Isagani Villanueva, while depositing some money in his account with City Trust Bank, realized that he had run out of blank checks and so requested a new checkbook from the bank’s service representatives. He then filled up a checkbook requisition slip except for his current account number which he could not remember. The service representative assured him that she could supply the information from the bank’s account records so after signing the requisition slip, he gave it to her. The customer service representative,

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upon checking the checkbook register , upon seeing the name “Isagani Villanueva—Account No. 33-00446-3” copied the account number on the space intended for it in the requisition slip.

Upon receipt of the checkbook, he immediately signed a check payable to the order of Kingly Commodities, with instruction that said check be used in placing a trading order in the future. A tracing order was eventually placed so the check was deposited with China Banking. The next day, he deposited a certain sum in cash to his savings account to cover the full amount of the check he issued (total deposit was 51k, price of order was 50k).

However, the check was dishonored due to insufficiency of funds and disparity in the signature. Villanueva requested Kingly Commodities to give him until 5:30 p.m. that same day to make good his check and then went to the bank to personally inquire into the matter. The bank manager reported that the check was dishonoured because the account number assigned to his new checkbook was the account number of another depositor also named “Isagani Villanueva” but with a different middle initial. The manager promised to send Kingly Commodities a manager’s check before 5:30 p.m.. She also personally called Kingly Commodities and explained.

Eventually, Villanueva demanded indemnification for alleged losses and damages suffered by him as a result of the dishonor of his well-funded check. He demanded the amount of P70,000 as indemnification for actual damages in the form of lost profits and P2 Million for moral and other damages. Failing to obtain a favorable action on his demand for indemnification, he filed complaint for damages based on breach of contract and/or quasidelict

TC dismissed the complaint stating that Villanuea’s negligence set the chain of events which resulted in his alleged losses and damages. It also ruled that the bank was negligent when it failed to supply the correct account number but its negligence was merely contributory, which would have “reduced the damages recoverable” had Villanuea proved his claims for actual, moral and exemplary damages, and attorney’s fees. TC rejected the claim of actual damages in the amount of P240,000 due to loss of profits as averred in the complaint considering that his initial claim against the bank for actual loss was merely P70,000 and the evidence presented was hearsay.

CA reversed and stated that the bank’s voluntary processing of the slip as the “cause which in the natural and continuous sequence, unbroken by any efficient intervening cause, produced the injury and without which the result would not have occurred.” Although it conceded that the negligence was not attended with malice and bad faith, it nonetheless awarded moral damages and attorney’s fees but rejected claim for compensatory damages.

ISSUES: (1) W/N Villanueva suffered actual or compensatory damages in the form of loss of profits is factual.

(2) W/N Villanueva is entitled to the moral damages and attorney’s fees granted by the CA? NO HELD: 1. NO. The Court of Appeals and the trial court have ascertained that Villanueva was unable to

prove his demand for compensatory damages arising from loss. His evidence thereon was found inadequate, uncorroborated, speculative, hearsay and not the best evidence. Basic is the jurisprudential principle that in determining actual damages, the court cannot rely on mere assertions, speculations, conjectures or guesswork but must depend on competent proof and on the best obtainable evidence of the actual amount of the loss. Actual damages cannot be presumed but must be duly proved with reasonable certainty.

2. NO. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Although incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant’s wrongful act or omission. Thus, case law establishes the requisites for the award of moral damages, viz.: (1) there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4) the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code.

Had Villanueva’s account number been correct, the check would not have been dishonoured since he had enough cash in his account. Hence, Villanueva’s injury arose from the dishonor of his well-funded

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check. We have already ruled that the dishonor of the check does not entitle him to compensatory damages. But, could the dishonor result in his alleged “intolerable physical inconvenience and discomfort, extreme humiliation, indignities, etc, which he had borne before his peers, trading partners and officers of Kingly Commodities?” True, we find that under the circumstances of this case, Villanueva might have suffered some form of inconvenience and discomfort as a result of the dishonor of his check. However, the same could not have been so grave or intolerable as he attempts to portray or impress upon us.

Further, the bank was able to issue a manager’s check in favor of Kingly Commodities before the 5:30 deadline. It was able to likewise explain to Kingly Commodities the circumstances surrounding the unfortunate situation. Verily, the alleged embarrassment or inconvenience caused to Villanueva was timely and adequately contained, corrected, mitigated, if not entirely eradicated. He thus, failed to support his claim for moral damages. In short, none of the circumstances mentioned in Article 2219 of the Civil Code exists to sanction the award for moral damages.

The award of attorney’s fees should likewise be deleted. The general rule is that attorney’s fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. They are not to be awarded every time a party wins a suit. There was no sufficient showing of bad faith in the parties’ persistence of a case other than an erroneous conviction of the righteousness of his cause.

Finally, there is no need to determine the proximate cause of the injury because he actually did not sustain any compensable injury. If any damage had been suffered at all, it could be equivalent to damnum absque injuria.

SPOUSES ONG V. CA (aforementioned case) RAMOS V. CA (1999) (discussed BUT indicated the issue on damages)

Erlinda Ramos underwent an operation known as cholecystectomy (removal of stone in her gallbladder) under the hands of Dr. Hosaka. He was accompanied by Dr. Gutierrez, an anesthesiologist which Dr. Hosaka recommended since Ramos did not know any.

The operation was schedule at 9am of June 17, 1985 but was however delayed for three hours due to the late arrival of Dr. Hosaka.

Dr. Gutierrez subsequently started trying to intubate her. And at around 3pm, Erlinda was seen being wheeled to the ICU. The doctors explained to the husband that she wife had bronchospasm. Erlinda stayed in the ICU for a month. She was released from the hospital only 4 months later. Since the ill-fated operation, Erlinda remained in comatose condition until she eventually died.

SC ruled in favor of the petitioners, holding the defendants guilty of, at the very least, negligence in the performance of their duty to plaintiff-patient Erlinda Ramos.

ISSUES: What types of damages were the private respondents held liable for? HELD: (1) P1,352,000 as actual damages computed as of the date of promulgation of this decision plus

a monthly payment of P8,000.00 up to the time Ramos expires or miraculously survives; (2) P2,000,000.00 as moral damages, (3) P1,500,000.00 as temperate damages; (4) P100,000.00 each as exemplary damages and attorney's fees; and, 5) the costs of the suit.

At current levels, the P8000/monthly amount established by the TC at the time of its decision would be grossly inadequate to cover the actual costs of home-based care for a comatose individual. The calculated amount was not even arrived at by looking at the actual cost of proper hospital care for the patient. What it reflected were the actual expenses incurred and proved by the petitioners after they were forced to bring home the patient to avoid mounting hospital bills. And yet ideally, a comatose patient should remain in a hospital or be transferred to a hospital specializing in the care of the chronically ill for the purpose of providing a proper milieu adequate to meet minimum standards of care. Given these considerations, the amount of actual damages recoverable in suits arising from negligence should at least reflect the correct minimum cost of proper care, NOT the cost of the care the family is usually compelled to undertake at home to avoid bankruptcy.

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Our rules on actual or compensatory damages generally assume that at the time of litigation, the injury suffered as a consequence of an act of negligence has been completed and that the cost can be liquidated. However, these provisions neglect to take into account those situations, as in this case, where the resulting injury might be continuing and possible future complications directly arising from the injury, while certain to occur, are difficult to predict. Temperate damages can and should be awarded on top of actual or compensatory damages in instances where the injury is chronic and continuing. And because of the unique nature of such cases, no incompatibility arises when both actual and temperate damages are provided for. The reason is that these damages cover two distinct phases. As it would not be equitable - and certainly not in the best interests of the administration of justice - for the victim in such cases to constantly come before the courts and invoke their aid in seeking adjustments to the compensatory damages previously awarded - temperate damages are appropriate. The amount given as temperate damages, though to a certain extent speculative, should take into account the cost of proper care. In the instant case, petitioners were able to provide only home-based nursing care for a comatose patient who has remained in that condition for over a decade. Having premised our award for compensatory damages on the amount provided by petitioners at the onset of litigation, it would be now much more in step with the interests of justice if the value awarded for temperate damages would allow petitioners to provide optimal care for their loved one in a facility which generally specializes in such care. They should not be compelled by dire circumstances to provide substandard care at home without the aid of professionals, for anything less would be grossly inadequate. Therefore, an award of P1,500,000 in temperate damages would therefore be reasonable.

Petitioner Erlinda Ramos was in her mid-forties when the incident occurred. She has been in a comatose state for over fourteen years now. The burden of care has so far been heroically shouldered by her husband and children, who, in the intervening years have been deprived of the love of a wife and a mother. Meanwhile, the actual physical, emotional and financial cost of the care of petitioner would be virtually impossible to quantify. Even the temperate damages herein awarded would be inadequate if petitioner's condition remains unchanged for the next ten years. The husband and the children, all petitioners in this case, will have to live with the day to day uncertainty of the patient's illness, knowing any hope of recovery is close to nil. The family's moral injury and suffering in this case is clearly a real one. Therefore, an award of P2,000,000 in moral damages would be appropriate.

Finally, by way of example, exemplary damages in the amount of P100,000 are hereby awarded. Considering the length and nature of the instant suit we are of the opinion that attorney's fees valued at P100,000 are likewise proper. INDUSTRIAL INSURANCE CO. V. BONDAD (2000)

Accident involving three vehicles: (1) Car A driven by Morales (2) a packed passenger jeepney driven by Bondad, and (3) Bus. Police Investigation Report showed that while the Bus was travelling along the expressway, it bumped the rear side portion of the jeepney which was then at a stop position due to a flat tire. Due to the severe impact, the jeepney swerved and collided with the Car A which was travelling in the same direction. All vehicles incurred damages and sustaining injuries to the occupants.

In the case at bar, Industrial Insurance (who paid Morales a certain sum for the damages to her insured car) filed a Complaint for damages against the jeepney parties. TC exculpated the jeepney parties and ordered Industrial Insurance to pay them actual, moral and exemplary damages, as well as attorney's fees. CA affirmed.

ISSUE: W/N The award for damages and attorney’s fees was proper. HELD: Yes. ATTORNEY’S FEES: The jeepney parties were compelled to litigate an unfounded suit because of

Industrial Insurance's negligence and lack of prudence in not verifying the facts before filing this action. Attorney's fees may be awarded by a court if one who claims it is compelled to litigate with third persons or to incur expenses to protect one's interests by reason of an unjustified act or omission on the part of the party from whom it is sought. In this case, the records show that Industrial Insurance's suit against the jeepney parties was manifestly unjustified. In the first place, the contact was completely due to the impact

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of the onrushing BUS! This fact is manifest in the police investigation report and, significantly, in the findings of facts of both lower courts. Moreover, even a cursory examination of the events would show that the jeepney parties were not even remotely the cause of the accident. Their vehicle was on the shoulder of the road because of a flat tire. In view of their emergency situation, they could not have done anything to avoid getting hit by the bus. More significantly, petitioner knew that respondents were not the cause of the accident. This is evident from its failure to even make a prior formal demand on them before initiating the suit.

MORAL DAMAGES: To sustain this award, it must be shown that (1) the claimant suffered injury, and (2) such injury sprung from any of the cases listed in Articles 2219 and 2220 of the Civil Code. It is not enough that the claimant alleges mental anguish, serious anxiety, wounded feelings, social humiliation, and the like as a result of the acts of the other party. It is necessary that such acts be shown to have been tainted with bad faith or ill motive. In the case at bar, it has been shown that the petitioner acted in bad faith in compelling respondents to litigate an unfounded claim. They had "been recklessly and without basis . . . impleaded by the plaintiff in spite of the clear language in the Traffic Police Investigation Report." As a result, they could no longer concentrate on his job, became sick and even suffered a mild stroke. Indeed, respondents' anxiety is not difficult to understand. They were innocently attending to a flat tire on the shoulder of the road; the next thing they knew, they were already being blamed for an accident.

EXEMPLARY DAMAGES: Industrial Insurance's conduct needlessly dragged innocent bystanders into an unfounded litigation.

PESTANO V. SPOUSES SUMAYANG (2000) (discussed BUT indicated the issue on damages)

Sumayang was riding a motorcycle along the national highway (riding with him was his friend) and as they came upon a junction, they were hit by a passenger bus driven by Pestaño and owned by Metro Cebu, which had tried to overtake them, sending the motorcycle and its passengers hurtling upon the pavement. Both motorcycle passengers eventually died.

The heirs of Sumayang instituted criminal action against Pestano and filed an action for damages against the driver, Pestano and Metro Cebu as the owner and operator of the bus.

CA ruled Metro Cebu vicariously liable and awarded damages as indemnity for the death of the victim and loss of earning capacity based on his life expectancy.

ISSUES: (1) W/N the CA erred in computing the loss of earning capacity based on the life expectancy of

the deceased, and not on that of the heir. (2) W/N the CA erred in increasing the award for life indemnity, without specifying any aggravating

circumstance to justify the increment as provided in the Civil Code. HELD: (1) NO. CA is correct. The Court has consistently computed the loss of earning capacity based on

the life expectancy of the deceased. The award for loss of earning capacity is based on two factors: (1) the number of years on which the computation of damages is based and (2) the rate at which the loss sustained by the heirs is fixed. The first factor refers to the life expectancy, which takes into consideration the nature of the victim’s work, lifestyle, age and state of health prior to the accident. The second refers to the victim’s earning capacity minus the necessary living expenses. Stated otherwise, the amount recoverable is that portion of the earnings of the deceased which the beneficiary would have received -- the net earnings of the deceased.

(2) NO. CA is correct. The indemnity for death caused by a quasi-delict used to be pegged at P30,000, based on Article 2206 of the Civil Code. However, the amount has been gradually increased through the years because of the declining value of our currency. At present, prevailing jurisprudence fixes the amount at P50,000.

D. MORAL DAMAGES Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,

besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though

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incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act for omission.

Art. 2218. In the adjudication of moral damages, the sentimental value of property, real or personal, may be considered.

Art. 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral damages. The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in the order named.

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

VILLANUEVA V. SALVADOR (20006)

Salvador spouses obtained 2 loans from Ever Pawnshop owned by Villanueva. The said loans we secured by pledging jewelry items. The separate redemption periods came and went, but the Salvadors failed to redeem the pawned pieces of jewelry. Nonetheless, their son paid Ever Pawnshop the amount to be applied against the first loan so a new pawn ticket was issued for that. A new pawn ticket however was not issued for the 2nd loan.

In the meantime, Ever Pawnshop issued a notice announcing the public auction sale of all unredeemed pledges. The notice appeared in the Classified Ads Section of the Manila Bulletin on the very day of the auction itself.

On separate occasions the Salvadors returned to the pawnshop to tender payment of the amount due on both loans, and to redeem the jewelry pledged. However, Ever Pawnshop refused to accept the tender. Sps. Salvador filed a complaint for damages against Villanueva and Ever awnshop arising from the sale without notice of the two (2) sets of jewelry pledged as security for both loans.

RTC and CA ruled in favor of Sps. Salvador finding that the set of jewelry covered by the renewed first and second loans were sold without the necessary notice. Moral damages was awarded in favor of Sps. Salvador for the failure of the Petitioner to comply with the contractual and statutory requirements before pledged jewelry was auctioned which failure amounts to misconduct contemplated by the NCC.

ISSUES: (1) W/N there was a valid notice of sale of the pledged jewelry?

(2) W/N the award of P20,0000.00 as moral damages and the P5,000.00 as attorney’s fee are proper?

HELD: (1) NO. Petitioners failed to comply with the statutory requirements before sale of the jewelry

pledge. Ever Pawnshop only caused publication of the auction in one newspaper, i.e., the Manila Bulletin, and on the very day of the scheduled auction sale itself, instead of a week preceding the sale as prescribed by law.

(2) NO. Award of Moral damages and Attorney’s fee are not proper. MORAL DAMAGES: The conditions required in awarding moral damages are: (1) there must be an

injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant must be the proximate cause of the injury sustained by the claimant; and (4) the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code.

While proof of pecuniary loss is unnecessary to justify an award of moral damages, the amount of indemnity being left to the sound discretion of the court, it is, nevertheless, essential that the claimant satisfactorily proves the existence of the factual basis of the damages and its causal connection to defendant’s wrongful act or omission. This is so because moral damages, albeit incapable of pecuniary

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estimation, are designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. There is thus merit on petitioners’ assertion that proof of moral suffering must precede a moral damage award.

While there need not be a showing that the defendant acted in a wanton or malevolent manner, as this is a requirement for an award of exemplary damages, there must still be proof of fraudulent action or bad faith for a claim for moral damages to succeed. Then, too, moral damages are generally not recoverable in culpa contractual except when bad faith supervenes and is proven.

In this case, the “cause of action arose merely from the negligence of the herein [petitioners].” It may be that gross negligence may sometimes amount to bad faith. But the present case involves a matter of simple negligence only, it being the trial court’s categorical finding that the case came about owing to petitioners’ mistake in renewing the loan when the sale of the article to secure the loan had already been effected.

The CA’s reliance on Article 2220 of the Civil Code in affirming the award of moral damages is misplaced. Art. 2220 provides Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.

Clear it is from the above that before moral damages may be assessed thereunder, the defendant’s act must be vitiated by bad faith or that there is willful intent to injure. Simply put, moral damages cannot arise from simple negligence.

ATTORNEY’S FEES: The award of attorney’s fees should, likewise, be struck down, both the CA and trial court having failed to explain respondents’ entitlement thereto. As a matter of sound practice, an award of attorney’s fee has always been regarded as the exception rather than the rule. Counsel’s fees are, to be sure, not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. Attorney’s fees, as part of damages, are assessed only in the instances specified in Article 2208 of the Civil Code. And it is necessary for the trial court to make express findings of fact and law that would bring the case within the exception. In short, the factual, legal or equitable justification for the award must be set forth in the text of the decision. The matter of attorney’s fees cannot be touched only in the fallo of the decision, else the award should be thrown out for being speculative and conjectural. The court noted that the petitioners, after being served with summons, made an attempt to obviate litigation by offering to accept tender of payment and return the jewelry. This offer, however belated, could have saved much expense on the part of both parties, as well as the precious time of the court itself. The respondents chose to turn down this offer and pursue judicial recourse. With this in mind, it hardly seems fair to award them attorneys fees at petitioners’ expense. MORRIS V. CA (2001)

Morris and Whittier were American citizens of high rank offices in Sterling Asia, a foreign corporation with ROHQ in Makati. They had a series of business meetings in Japan, thus they made travel arrangements with their agent. They were booked in a first class 3:50pm flight with Scandinavian Airline System (SAS), the respondents in this case.

On the day of the flight, they arrived at the airport by 2:30pm and gave their travel documents to the person at the reception desk by 3:10pm. They later realized that their travel documents were not being processed. The economy section was overbooked, and those who came early were given the option to upgrade to 1st class. Their seats were given away and the flight manifest marked NOSH (no show) after their name, because the check-in counter closed already 40mins before departure. Petitioners were advised to be at the airport an hour before the flight. They came late, and SAS simply followed company policies.

Petitioners filed a complaint for damages. RTC awarded: Moral damages: Morris, 1M; Whittier, 750K exemplary: 200K atty’s fees: 300K. Petitioners filed an MR to the RTC to increase award, moral damages increased to 1.5M and 1M. CA reversed, hence this petition.

ISSUES: W/N SAS is liable for damages for breach of contract of carriage?

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HELD: To begin with, it must be emphasized that a contract to transport passengers is quite different kind and degree from any other contractual relations, and this is because relation, which an air carrier sustains with the public. Its business is mainly with the traveling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees naturally could give ground for an action for damages.

In awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith. Where in breaching the contract of carriage the defendant airline is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of obligation which the parties had foreseen or could have reasonably foreseen. In that case, such liability does not include moral and exemplary damages. Moral damages are generally not recoverable in culpa contractual except when bad faith had been proven. However, the same damages may be recovered when breach of contract of carriage results in the death of a passenger. (Simply put, the GR: no moral damages kapag arising from contract of carriage, 1191 remedy mo diba sa breach of contract? EXCEPT: if BF attendant or may nachugi sa plane).

The rule is that moral damages are recoverable in a damage suit predicated upon a breach of contract of carriage only where (a) the mishap results in the death of a passenger and (b) it is proved that the carrier was guilty of fraud and bad faith even if death does not result. For having arrived at the airport after the closure of the flight manifest, respondent’s employee could not be faulted for not entertaining petitioners’ tickets and travel documents for processing, as the checking in of passengers for SAS was finished. There was no fraud or bad faith as would justify the court’s award of moral damages.

The award of exemplary damages has likewise no factual basis. It is requisite that the act must be accompanied by bad faith or done in wanton, fraudulent or malevolent manner—circumstances which are absent in this case. In addition, exemplary damages cannot be awarded as the requisite element of compensatory damages was not present. In the instant case, assuming arguendo that breach of contract of carriage may be attributed to respondent, petitioners' travails were directly traceable to their failure to check-in on time, which led to respondent's refusal to accommodate them on the flight.

As we find petitioners not entitled to moral damages, an award of exemplary damages is likewise baseless. Where the award of moral and exemplary damages is eliminated, so must the award for attorney’s fees be deleted. The Court DENIES the petition for lack of merit.

FRANCISCO V. FERRER (2001)

Mother and daughter ordered a 3-layered cake from Bakeshop X and made their full payment. It was agreed that the wedding cake shall be delivered at 5pm. At 7pm however, no wedding cake yet allegedly, according to the bakeshop, because of traffic. At 8pm they were informed that no wedding cake will be delivered because the order slip got lost. They were then compelled to buy the only available cake at the Country Club which was a sans rival. Finally, a 2-layered wedding cake arrived belatedly at 10pm but they declined to accept it. Plaintiffs filed an action for breach of contract with damages despite efforts of the bakeshop to apologize.

TC decided in favor of plaintiffs, directing defendant to pay the cost of the wedding cake, MORAL DAMAGES, attorney’s fees and the cost of litigation. CA modified the award by increasing the MORAL DAMAGES to P250,000.00 and awarding EXEMPLARY DAMAGES of P100,000.

ISSUES: (1) W/N the CA erred in affirming the TC’s award of MORAL DAMAGES and increasing it from

P30,000 to P250,000. (2) W/N the CA was justified in awarding in addition to moral damages, EXEMPLARY DAMAGES of

P100,000.00. HELD: YES. CA erred in awarding MORAL DAMAGES. Article 2219 of the Civil Code provides: “To

recover moral damages in an action for breach of contract, the breach must be palpably wanton, reckless, malicious, in bad faith, oppressive or abusive.” In culpa contractual or breach of contract, moral damages

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may be recovered when the defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton disregard of his contractual obligation and, exceptionally, when the act of breach of contract itself is constitutive of tort resulting in physical injuries. Bad faith does not simply connote bad judgment or negligence, it imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty through some motive or interest or ill will that partakes of the nature of fraud. Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always presumes good faith. It is not enough that one merely suffered sleepless nights, mental anguish, serious anxiety as the result of the actuations of the other party. Mere allegations of besmirched reputation, embarrassment and sleepless nights are insufficient to warrant an award for moral damages.

An award of moral damages would require certain conditions to be met, to wit: (1) first, there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) second, there must be culpable act or omission factually established; (3) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4) fourth, the award of damages is predicated on any of the cases stated in Article 2219” of the Civil Code. When awarded, moral damages must not be palpably and scandalously excessive as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court judge or appellate court justices. In this case, we find no such fraud or bad faith.

CA also erred in awarding EXEMPLARY DAMAGES. To warrant the award of exemplary damages, [t]he wrongful act must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party acted in a wanton, fraudulent, reckless or malevolent manner. The requirements of an award of exemplary damages are: (1) they may be imposed by way of example in addition to compensatory damages, and only after the claimant’s right to them has been established; (2) that they can not be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant; (3) the act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent manner.

NOMINAL DAMAGES awarded. The facts show that when confronted with their failure to deliver on the wedding day, petitioners gave the lame excuse that delivery was probably delayed because of the traffic, when in truth, no cake could be delivered because the order slip got lost. For such prevarication, petitioners must be held liable for nominal damages for insensitivity, inadvertence or inattention to their customer’s anxiety and need of the hour. Nominal damages are recoverable where a legal right is technically violated and must be vindicated against an invasion that has produced no actual present loss of any kind or where there has been a breach of contract and no substantial injury or actual damages whatsoever have been or can be shown. Nominal damages may be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for indemnifying the plaintiff for any loss suffered.

Petition granted. Petitioner order to pay the cost of the wedding cake, nominal damages, attorney’s fees and the costs of litigation.

FILIPINAS BROADCASTING V. AGO MEDICAL (2005)

“Exposé” is a radio documentary program hosted by 2 jocks (A & B) aired on a radio station owned by Filipinas Broadcasting Network, Inc. (“FBNI”). The jocks exposed various alleged complaints from students, teachers and parents against Ago Medical and Educational Center-Bicol Christian College of Medicine (“AMEC”) and its administrators. Claiming that the broadcasts were defamatory, AMEC and the dean filed a complaint for damages against FBNI, and the jocks. With the supposed exposés, FBNI and the jocks “transmitted malicious imputations, and as such, destroyed AMEC’s reputation.” AMEC and Ago included FBNI as defendant for allegedly failing to exercise due diligence in the selection and supervision of its employees. The defendants answered alleging that the exposes were fair and true and that they were plainly impelled by a sense of public duty to report the “goings-on in AMEC, [which is] an institution imbued with public interest.”

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TC ruled against FBNI and DJ A liable for libel except DJ B (since his only participation was when he agreed with DJ A’s exposé). CA affirmed but made DJ A solidarily liable and denied Ago’s claim for damages and attorney’s fees because the broadcasts were directed against AMEC, and not against her.

ISSUES: W/N AMEC is entitled to moral damages. HELD: YES. A juridical person is generally not entitled to moral damages because, unlike a natural

person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral shock. The Court of Appeals cites Mambulao Lumber Co. v. PNB, et al. to justify the award of moral damages. However, the Court’s statement in Mambulao that “a corporation may have a good reputation which, if besmirched, may also be a ground for the award of moral damages” is an obiter dictum. Nevertheless, AMEC’s claim for moral damages falls under item 7 of Article 2219 of the Civil Code. This provision expressly authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article2219(7) does not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can validly complain for libel or any other form of defamation and claim for moral damages. Moreover, where the broadcast is libelous per se, the law implies damages. In such a case, evidence of an honest mistake or the want of character or reputation of the party libeled goes only in mitigation of damages.

Neither in such a case is the plaintiff required to introduce evidence of actual damages as a condition precedent to the recovery of some damages. In this case, the broadcasts are libelous per se. Thus, AMEC is entitled to moral damages. However, the Court found the award of P300,000 moral damages unreasonable. The record shows that even though the broadcasts were libelous per se, AMEC has not suffered any substantial or material damage to its reputation. Therefore, the Court reduced the award of moral damages from P300,000 to P150,000.

EXPERTRAVEL & TOURS V. CA

Expertravel & Tours Inc. issued to Ricardo Lo four round trip plane tickets to Hong Kong, together with hotel accommodations and transfers, for a total cost of P39,677. Alleging that Lo had failed to pay the amount due, Expertravel caused several demands to be made. Since the demands were ignored by Lo, Expertravel filed a court complaint for recovery of amount due plus damages.

In his answer, Lo explained that he had already paid such amount to expertravel. It was remmited to the Chairperson of Expertravel, Ms. De Vega. This was evidenced by Monte de Pieda check with the amount of 50,000 pesos.

The trial court, affirmed by the appellate court, ruled that payment to Ms. De Vega is valid and binding to Expertravel and awarded moral damages, attorney’s fees and cost of suit in favor of Lo.

ISSUES: W/N the appellate court was correct in awarding moral damages in favor of Lo. HELD: The Appellate Court was not correct in awarding moral damages in favor of Lo Moral damages

are not punitive in nature but are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feeling, moral shock, social humiliation, and similar injury unjustly caused to a person. Such damages must be the proximate result of a wrongful act or omission the factual basis for which is satisfactorily established by the aggrieved party.

An award of moral damages would require certain conditions to be met; to wit (1) there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant. (2) there must be a culpable act or omission factually established (3) the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant (4) the award of damages is predicated on any of the cases stated in article 2219, death of a passenger under breach of carriage, when the defendant is guilty of intentional tort, culpa criminal, analogous cases, or malicious prosecution.

Although the institution of a clearly unfounded civil suit can at times be a legal justification for award of attorney’s fees, such filing is however, has almost been invariably been held not a ground for award of

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moral damages. The rationale for this rule is that the law could have not meant to impose a penalty on the right to litigate. The anguish suffered by a person for having been a defendant in a civil suit would be no different from the usual worry and anxiety suffered by anyone who is haled to court, a situation that cannot by itself be a cogent reason for award of moral damage if the rule were otherwise, then moral damages must every time be awarded in favor of the prevailing defendant against an unsuccessful plaintiff.

FRANCISCO V. FERRER (aforementioned case) RAMOS V. CA (discussed) INDUSTRIAL INSURANCE CO. V. BONDAD (aforementioned case)

CALALAS V. CA (2000) (discussed but indicated the issue on damages)

One morning, Eliza Sunga, then a college freshman at Siliman University, took a passenger jeepney owned and operated by Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the back of the door at the rear end of the vehicle. Just as she was giving way to an alighting passenger, an Isuzu truck driven by one Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured.

Almost two months thereafter, Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage by the former in failing to exercise the diligence required of him as a common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of the Isuzu truck. CA ruled in favour of Sunga and ordered Calalas to pay, among others, moral damages. Calalas challenges the award of moral damages alleging that it is excessive and without basis in law.

ISSUE: W/N the award of moral damages is proper. HELD: NO. CA decision is affirmed but moral damages is deleted. As a general rule, moral damages are

not recoverable in actions for damages predicated on a breach of contract for it is not one of the items enumerated under Art. 2219 of the Civil Code. As an exception, such damages are recoverable: (1) in cases in which the mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220.

In this case, there is no legal basis for awarding moral damages since there was no factual finding by the appellate court that petitioner acted in bad faith in the performance of the contract of carriage. Sunga’s contention that petitioner’s admission in open court that the driver of the jeepney failed to assist her in going to a nearby hospital cannot be construed as an admission of bad faith. The fact that it was the driver of the Isuzu truck who took her to the hospital does not imply that petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is merely implied recognition by Verena that he was the one at fault for the accident.

COCOLAND DEV’T V. NLRC (1996)

Cocoland Development Corporation dismissed Jeremias Mago, its Field Supervisor, on the ground that the latter divulged to certain farmers the former’s “technology in coffee preparation techniques,” which is supposed to be a trade secret, without prior clearance from management. The employee countered that the technology was no longer confidential since the same had been learned and applied by third parties or small farm owners. NLRC ruled in favor of the employee finding the dismissal tainted with illegality and awarded, among others, moral damages. Cocoland now contends that the NLRC gravely abused its discretion for awarding moral and exemplary damages when the evidence extant shows that the company did not act in bad faith, nor carried out in a wanton or fraudulent or reckless manner.

ISSUE: W/N the award of moral damages is valid.

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HELD: NO. SC ruled in favor of the employee BUT DELETED the award of moral and exemplary damages, along with attorney’s fees. The High Court ruled that the so-called technology was hardly a trade secret since the employee established convincingly via competent evidence that the various propagation techniques claimed by the company as its trade secret were readily available to the public.

On the damages: While facts clearly show that private respondent was wrongfully dismissed by petitioner without valid cause, this does not automatically mean that petitioner is liable to private respondent for moral or other damages.

An award of moral damages cannot be justified solely upon the premise that the employer fired his employee without just cause or due process. Additional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code, these being, to repeat, that the act of dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy; and of course, that social humiliation, wounded feelings, grave anxiety, etc., resulted therefrom." Exemplary damages may be awarded only if the dismissal was shown to have been effected in a wanton, oppressive or malevolent manner.

This the employee failed to do. Because no evidence was adduced to show that Cocoland acted in bad faith or in a wanton or fraudulent manner in dismissing the employee, the labor arbiter did not award any moral and exemplary damages in his decision. Respondent NLRC therefore had no factual or legal basis to award such damages in the exercise of its appellate jurisdiction. However, the Court sustains the award of attorney's fees equivalent to five percent (5%) of the total monetary award as authorized by the Labor Code.

E. NOMINAL DAMAGES

Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. Art. 2222. The court may award nominal damages in every obligation arising from any source enumerated in Article 1157, or in every case where any property right has been invaded. Art. 2223. The adjudication of nominal damages shall preclude further contest upon the right involved and all accessory questions, as between the parties to the suit, or their respective heirs and assigns. CHINA AIRLINES v. CA, private respondents SALVADOR and LAO (2003)

Private respondents planned to travel to for a cable business deal. Morelia Travel Agency booked them with CAL for MNL-TAI-LA. But they discovered that AMEXCO had lower rates so they engaged AMEXCO’s services since Lao was an Amex cardholder. Lao called up AMEXCO on June 10 claiming they had a confirmed booking with CAL. Lao gave the reference number that CAL issued to Morelia when Morelia booked them. In that same day, AMEXCO called up CAL to finalize their reservation for June 13. AMEXCO used the reference number that Lao gave. CAL confirmed. Amexco issued confirmed tickets. CAL called up Morelia then to reconfirm, but Morelia cancelled. AAs they were about to board, CAL prevented them to board because they were not in the manifest. They were only able to leave the following day through Northwest.

They sent a demand letter for moral damages totaling P500,000. CAL explained that it found out that while they booked with AMEXCO, they failed to pick up tickets from its offices so they had to cancel. CAL also said that their cause of action should be against the travel agencies. They alleged that their delay caused them to lose business opportunities.

ISSUE: W/N private respondents are entitled to damages from CAL or AMEXCO HELD: Only from CAL. Only nominal damages were awarded. All the rest were rejected. Amexco was

absolved. Lea (from AMEXCO) used the record locator number that Lao gave Amexco. Lea claimed she did not

know that CAL had already assigned the record locator number to Morelia. The trial court pointed out that

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even if Amexco wittingly or unwittingly missed the truth with respect to the record locator number, CAL should have known better as it was the assignor of the record locator number. CAL should not have confirmed the booking made by Lea who was not a familiar caller from Morelia.

As for exemplary damages, CAL was not in bad faith and its employees did not act in a wanton, fraudulent, reckless, oppressive or malevolent manner. The award of exemplary damages is therefore unwarranted in this case. They claim for actual damages, but they did not shell out any money for their CAL tickets. Amexco voided the CAL tickets when private respondents requested Amexco to book them in another airline. Amexco eventually booked their flight with Northwest. Private respondents would have been entitled to the price difference between the tickets of CAL and Northwest had the latter cost more than the former. The price difference would have been a damage reasonably attributed to CAL's breach of its contract of carriage because private respondents would not have flown via Northwest were it not for CAL's non-performance of its obligation. The evidence, however, shows that the Northwest tickets at US$625 each cost less than the CAL tickets priced at US$629 each. We cannot also order a reimbursement of the Northwest tickets because this would have enabled private respondents to fly to Los Angeles without paying any fare.As correctly pointed out by the trial and appellate courts, the costs of the airplane tickets were a necessary expense that private respondents could not pass on to CAL.

Undeniably, however, private respondents soldered some form of injury. CAL confirmed the reservations of private respondents carelessly. Private respondents relied on this confirmation. Private respondents went through the trouble of going to the airport at the appointed time expecting that they would be able to board CAL Flight 632. To their consternation, CAL personnel prevented them from boarding because Morelia cancelled their reservations. When plaintiff suffers some species of injury not enough to warrant an award of actual damages, the court may award nominal damages. The court may award nominal damages purely to vindicate a right of a plaintiff which defendant has violated and not to indemnify any loss the plaintiff has suffered. The court may award nominal damages in every obligation arising from any source enumerated in Article 1157 of the Civil Code, or in any case where there is an invasion of any property right. We find P5,000 as a reasonable award of nominal damages to each of the private respondents. MERCURY DRUG V. SERRANO (2006)

Mercury employed Serrano as one of their pharmacy assistants in Recto-Soler. Mercury alleged that Serrano pocketed P120. They confronted her and she wrote a resignation letter (she admitted, but it was because the customer gave an exact amount for 10pcs of Squalene. She said that the customer went back to ask for the OR, so she remembered about the money in her pocket.) Mercury didn’t accept her resignation but requested her to appear before an Investigation Committee. They found her guilty, saying that they chanced upon Serrano while the latter was transferring money folded into small squares from her pocket to her wallet (and a number of other instances). She was found guilty of dishonesty by the committee. Mercury then sent a letter of termination. Serrano then filed a complaint for illegal dismissal, unfair labor practice and non-payment. The Labor Artbiter found the dismissal illegal. He said that there was no basis to presume that Serrano had no more intention of remitting the P120 paid, and said that Serrano wasn’t given the chance to be heard and defend herself before she was dismissed. Moral damages were set at P500,000, and attorney’s fees at 10%. NLRC reversed the Labor Arbiter. NLRC also noted that Serrano was charged with qualified theft. CA reversed NLRC and awarded her the separation pay, backwages and moral damages of P50,000.

ISSUE: whether or not Mercury had sufficient grounds to terminate Serrano HELD: Yes. Mercury terminated her because of loss of trust and confidence due to dishonesty. BUT

Mercury failed to give two notices. In dismissing an employee, the employer must serve the employee two notices: (1) the first to inform the employee of the particular acts or omissions for which the employer seeks his dismissal, and (2) the second to inform the employee of his employer’s decision to terminate him.

The first notice must state that the employer seeks dismissal for the act or omission charged against the employee, otherwise, the notice does not comply with the rules. Mercury failed to satisfy the two-notice requirement.

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The Court upholds respondent Zenaida G. Serrano’s dismissal from employment by petitioner Mercury Drug Corporation on the ground of loss of trust and confidence. However, the Court ORDERS petitioner Mercury Drug Corporation to pay respondent Zenaida G. Serrano the amount of P30,000 as nominal damages for failure to comply fully with the notice requirement as part of due process. No pronouncement as to costs.

COJUANGCO V. CA (1999)

Petitioner Eduardo Cojuangco is a known businessman-sportsman owning several racehorses which he entered in the sweepstakes races. Several of his horses won. Petitioner sent letters of demand to private respondents PCSO and PCSO Chairman Fernando Carrascoso, Jr. for the collection of the prizes due him. However, the respondent said that the demanded prizes are being withheld on advice of Commissioner Ramon Diaz of the PCGG after private respondent Carrascoso sought the latter a clarification of the extent and coverage of the sequestration order issued against the properties of petitioner. The sequestration order was in pursuance of EO 2, issued by President Aquino, freezing all assets and properties in the Philippines of the Marcoses, their friends, subordinates, and business associates. A case was filed before the RTC, which ruled in favor of petitioner. Upon appeal to the CA, it was reversed.

ISSUE: W/N the award for nominal damages against respondent Carrascoso, Jr. is warranted by evidence and law?

HELD: YES. PETITIONER’S RIGHT TO THE USE OF HIS PROPERTY WAS UNDULY IMPEDED. • Private respondent Carrascoso may still e held liable under Art. 32 of the Civil Code, which provides:

o Art. 32. Any public officer, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs

any of the following rights and liberties of another person shall be liable to the latter for damages: The right against deprivation of property without due process of law; • While private respondent Carrascoso may have relied upon the PCGG’s instructions, he could have

further sought the specific legal basis therefor. A little exercise of prudence would have disclosed that there was no writ issued specifically for the sequestration of the racehorse winnings of petitioner. The issuance of a sequestration order requires the showing of a prima facie case and due regard for the requirements of due process. The withholding of the prize winnings of petitioner without a properly issued sequestration order clearly spoke of a violation of his property rights without due process of law INDUSTRIAL TIMBER V. ABABON (2006)

Facts: Industrial Plywood Group Corp. (IPGC) leased a

plywood plant to Industrial Timber Corp. (ITC) ITC employed 387 workers. ITC notified the DOLE and its workers of the plant's shutdown due to the non-renewal of anti-pollution permit that expired in April 1990 and alleged lack of logs for milling. IPGC took over the plywood plant coincidentally on the same day the ITC ceased operation of the plant.. Ababon, et al. filed a complaint against ITC and IPGC for illegal dismissal, unfair labor practice and damages. They alleged, among others, that the cessation of ITC's operation was intended to bust the union and that both corporations are one and the same entity being controlled by one owner.

Issue: W/N the cessation of ITC’s operation was done in good faith HELD: YES. Having established that ITC’s closure of the plywood plant was done in good faith and that

it was due to causes beyond its control, the conclusion is inevitable that said closure is valid. Consequently, Ababon, et al. could not have been illegally dismissed to be entitled to full backwages. Thus, we find it no longer necessary to discuss the issue regarding the computation of their backwages. However, they are entitled to separation pay equivalent to one month pay or at least one-half month pay for every year of service, whichever is higher.

Although the closure was done in good faith and for valid reasons, we find that ITC did not comply with the notice requirement. While an employer is under no obligation to conduct hearings before effecting termination of employment due to authorized cause, however, the law requires that it must notify the DOLE and its employees at least one month before the intended date of closure.

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In the case at bar, ITC notified its employees and the DOLE of the ‘no plant operation’ on March 16, 1990 due to lack of raw materials. This was followed by a ‘shut down’ notice dated June 26, 1990 due to the expiration of the anti-pollution permit. However, this shutdown was only temporary as ITC assured its employees that they could return to work once the renewal is acted upon by the DENR. On August 17, 1990, the ITC sent its employees a final notice of closure or cessation of business operations to take effect on the same day it was released. We find that this falls short of the notice requirement for termination of employment due to authorized cause considering that the DOLE was not furnished and the notice should have been furnished both the employees and the DOLE at least one month before the intended date of closure.

Where the dismissal is based on an authorized cause under Article 283 of the Labor Code but the employer failed to comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the employer’s exercise of his management prerogative, as opposed to a dismissal based on a just cause under Article 282 with the same procedural infirmity where the sanction to be imposed upon the employer should be tempered as the dismissal process was, in effect, initiated by an act imputable to the employee. In light of the factual circumstances of the cases at bar, we deem it wise and reasonable to award P50,000.00 to each employee as nominal damages.

F. TEMPERATE DAMAGES Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be provided with certainty. Art. 2225. Temperate damages must be reasonable under the circumstances.

VICTORY LINER V. GAMMAD (2004)

FACTS: Respondent Rosalito Gammad show that his wife Marie Grace Pagulayan-Gammad, was on board an air-conditioned Victory Liner bus bound for Tuguegarao, Cagayan from Manila. At about 3:00 a.m., the bus while running at a high speed fell on a ravine somewhere in Barangay Baliling, Sta. Fe, Nueva Vizcaya, which resulted in the death of Marie Grace and physical injuries to other passengers. Respondent heirs of the deceased filed a complaint for damages arising from culpa contractual against petitioner. In its answer, the petitioner claimed that the incident was purely accidental and that it has always exercised extraordinary diligence in its 50 years of operation. Petitioners were declared in default and asked the court to lift such order and was granted. They also filed many extensions from the court, which the court granted as well. Petitioner’s last motion for extension though did not reach the court on time and it ordered the case submitted for decision.

RTC ruled in favor of respondents awarding respondents. CA affirmed with slight modifications. Petitioner contends that they were not afforded due process because of the negligence of their counsel.

ISSUE: W/N the award of damages is proper. HELD: The SC affirmed the ruling of the CA as to damages with slight modifications. (This is what’s

important in this case) The award of compensatory damages for the loss of the deceased’s earning capacity should be deleted

for lack of basis. As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. By way of exception, damages for loss of earning capacity may be awarded despite the absence of documentary evidence when (1) the deceased is self-employed earning less than the minimum wage under current labor laws, and judicial notice may be taken of the fact that in the deceaseds line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws.

Here, the trial court and the Court of Appeals computed the award of compensatory damages for loss of earning capacity only on the basis of the testimony of respondent Rosalito that the deceased was 39 years

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of age and a Section Chief of the Bureau of Internal Revenue, Tuguegarao District Office with a salary of P83,088.00 per annum when she died. No other evidence was presented. The award is clearly erroneous because the deceased’s earnings do not fall within the exceptions.

However, the fact of loss having been established, temperate damages in the amount of P500,000.00 should be awarded to respondents. Under Article 2224 of the Civil Code, temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be proved with certainty. Basically, if the fact of loss has been established but compensatory damages cannot be proven with sufficient evidence, then temperate damages is the way to go. PREMIERE DEVELOPMENT BANK V. CA (2004)

FACTS: Panacor acquired an exclusive distributorship of Colgate Palmolive products. Said exclusive distributorship required an initial inventory level of P7.5M. To meet the capital requirements, Panacor applied for a P4.1M loan with Premiere Development Bank. However, Premiere rejected the loan application and suggested that Panacor’s affiliate company, Arizona, should instead apply for the loan (since Arizona was already an existing loan client) on condition that the proceeds thereof shall be made available to Panacor. Panacor heeded the advice and eventually, Arizona was granted a P6.1M loan, which was secured by a real estate mortgage. Of the P6.1M loan proceeds, P3.4M was used to pay off Arizona’s existing loans while only P2.7M was allotted for Panacor’s credit line. Since the P2.7M released by Premier fell short of the P4.1M that Panacor needed to raise, the company negotiated for a take-out loan with Iba Finance Corporation in the sum of P10M. Of the P10M loan proceeds, P7.5M will be released outright to take-out the loan from Premier Bank while the P2.5M, which will be used to complete the needed capital of P4.1M, was to be released only after Premiere Bank cancels the mortgage in its favor mentioned above.

Later, Iba wrote Premier Bank to inform the bank of the loan in favor of Panacor and Arizona and to request for the release of the TCT of the mortgaged property. However, in its reply, Premiere explained that it was the bank’s policy to require full payment of all outstanding loan obligations prior to the release of mortgage documents. Since Arizona still had existing unpaid loan obligations, Premiere refused to turn over the requested documents. Thereafter, Panacor and Arizona executed in favor Iba a promissory note in the amount of P7.5M, and Iba settled the full outstanding loan account of Arizona. However, despite the payment, Premiere Bank still refused to release the requested mortgage documents specifically the TCT of the mortgaged property.

Panacor requested from Iba the immediate approval and release of the P2.5M loan to meet the required monthly purchases from Colgate. Iba however explained that the processing of the P2.5M loan application was conditioned, among others, on the submission of the owner’s title and the cancellation of the abovementioned mortgage. Due to Premier Bank’s adamant refusal to release the mortgage cancellation document, Panacor failed to generate the required capital to meet its distribution and sales targets, and Colgate eventually terminated the distribution agreement. As a result, Panacor and Arizona filed a complaint for specific performance and damages against Premiere Bank with the RTC. Iba filed a complaint-in-intervention, praying that judgment be rendered ordering Premiere Bank to pay damages in its favor.

The RTC ruled in favor of Panacor and Iba, ordering Premiere to pay Panacor P4.5M plus legal interest as actual damages, P1M as exemplary damages, P100k as attorney’s fees, and costs of suit. It also ordered Premiere to release the mortgage documents to Iba and to pay the latter P1M in exemplary damages, P100k as attorney’s fees and costs of suit.

Premiere appealed to the CA contending that the RTC erred in finding that it had maliciously downgraded Pancor’s credit line from P4.1M to P2.7M. Meanwhile, a Compromise Agreement was entered into between Iba and Premiere where the latter agreed to return w/o interest the amount of P6.2M which Iba remitted to Premiere to pay off Arizona’s loan. Such Compromise Agreement was approved by the court. CA affirmed the RTC ruling but the award of exemplary damages in favor of Panacor was reduced to P500k, hence the present petition for review.

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*Premiere Bank: The CA’s finding that it was liable for actual damages in the amount of P4.5M is without basis. The evidence presented by Panacor in support of its claim for actual damages are not official receipts but self-serving declarations.

ISSUE: W/N the award of damages was proper. HELD: NO, the award of P4.5M in actual damages should be deleted but the sum of P200Kas temperate

damages is reasonable. Under Article 2199 of the Civil Code, actual or compensatory damages are those awarded in satisfaction

of, or in recompense for, loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done, to compensate for the injury inflicted and not to impose a penalty. To justify an award for 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. The burden of proof is on the party who will be defeated if no evidence is presented on either side. He must establish his case by a preponderance of evidence. In other words, damages cannot be presumed and courts, in making an award, must point out specific facts that can afford a basis for measuring whatever compensatory or actual damages are borne.

In the instant case, the actual damages were proven through the sole testimony of the vice president for administration of Panacor. In his testimony, the witness affirmed that Panacor incurred losses, specifically, in terms of training and seminars, leasehold acquisition, procurement of vehicles and office equipment without, however, adducing receipts to substantiate the same. The documentary evidence which was an ordinary private writing allegedly itemizing the capital expenditures and losses from the failed operation of Panacor, was not testified to by any witness to ascertain the veracity of its contents. Although the lower court fixed the sum of P4.5M as the total expenditures incurred by Panacor, it failed to show how and in what manner the same were substantiated by the claimant with reasonable certainty. Hence, the claim for actual damages should be admitted with extreme caution since it is only based on bare assertion without support from independent evidence. Premiere’s failure to prove actual expenditure consequently conduces to a failure of its claim. In determining actual damages, the court cannot rely on mere assertions, speculations, conjectures or guesswork but must depend on competent proof and on the best evidence obtainable regarding the actual amount of loss.

Even if not recoverable as compensatory damages, Panacor may still be awarded damages in the concept of temperate or moderate damages. When the court finds that some pecuniary loss has been suffered but the amount cannot, from the nature of the case, be proved with certainty, temperate damages may be recovered. Temperate damages may be allowed in cases where from the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is convinced that the aggrieved party suffered some pecuniary loss.

It is obvious that the wrongful acts of Premiere Bank adversely affected, in one way or another, the commercial credit of Panacor. They greatly contributed to, if not, decisively caused the premature stoppage of its business operations and the consequent loss of business opportunity. Since these losses are not susceptible to pecuniary estimation, temperate damages may be awarded. Article 2216 of the Civil Code provides that no proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary damages may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the Court, according to the circumstances of each case.

G. LIQUIDATED DAMAGES

Art. 2226. Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof. Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable. Art. 2228. When the breach of the contract committed by the defendant is not the one contemplated by the parties in agreeing upon the liquidated damages, the law shall determine the measure of damages, and not the stipulation.

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AZCUNA V. CA (1999)

FACTS: Under a 1 year lease contract, Melquiades Azcuna, Jr., as lessee, occupied 3 units of the building owned by Ernesto Barcelona’s family. Upon the expiration date of the lease without an agreed renewal thereof and coupled by Azcuna’s failure to surrender the leased units despite demands, Barcelona filed before the MTC an ejectment case against Azcuna. Judgment of that inferior court, affirmed in its entirety by the RTC and CA, favored Barcelona. Azcuna was ordered to vacate the premises of the building and to pay (1)P25K monthly as rental for continued use until Azcuna vacates the premises; (2)P3K per day, by way of damages for his failure to turn over the units peacefully until Azcuna vacates the premises; (3)P5K by way of attorney’s fees; and costs. Azcuna filed the instant petition for review not to contest his ouster from the premises nor the amount of monthly rental he was adjudged to pay, but only to take particular exception to the award of P3K per day as damages. It is his claim that such award, in addition to the fair rental value or reasonable compensation for the use and occupation of the premises, is improper in light of the doctrine enunciated in the cases of Felesilda v. Villanueva, Shoemart Inc. v. CA and Hualam Construction and Development Corp. v. CA, that “the only damages that can be recovered in an ejectment suit are the fair rental value or the reasonable compensation for the use and occupation of the real property. Other damages must be claimed in an ordinary action.”

ISSUE: W/N, in an ejectment suit, the award of damages, in addition to the fair rental value or reasonable compensation for the use and occupation of the premises, is improper Generally YES. Exception: LIQUIDATED DAMAGES stipulated in contract

RATIO: Azcuna’s reliance on such doctrine is misplaced, inasmuch as the Felesilda, Shoemart and Hualam cases dealt with additional damages and charges other than liquidated damages. Liquidated damages are defined as those agreed upon by the parties to a contract, to be paid in case of breach thereof. Here, the MTC, in making the P3K per day award, was merely enforcing what was stipulated upon in the lease contract. There was clearly an agreement for liquidated damages, entitling Barcelona to claim a stipulated amount by way of damages (correctly totalling P3K per day as there were 3 units being leased) over and above other damages still legally due him, i.e., the fair rental value for the use and occupation of the property as provided for in Sec. 8, Rule 70 of the ROC. The freedom of the contracting parties to make stipulations in their contract provided they are not contrary to law, morals, good customs, public order or public policy is so settled, and the Court finds nothing immoral or illegal with the indemnity/ penalty clause of the lease contract, which does not appear to have been forced upon or fraudulently foisted on Azcuna. He cannot now evade further liability for liquidated damages.

Inferior courts have exclusive jurisdiction over cases of forcible entry and detainer regardless of the value of damages demanded. The damages that may be recovered in actions for ejectment are those equivalent to a reasonable compensation for the use and occupation of the premises by defendant. Nonetheless, this latter legal proposition is not pertinent to the issue raised in the instant case because here, the damage sought to be recovered had previously been agreed to in the contract of lease and imposed by lessor by way of damages. RADIOWEALTH FINANCE VS. DEL ROSARIO (2000)

On March 2, 1991, Spouses Vicente and Maria Sumilang del Rosario (herein respondents), jointly and severally executed, signed and delivered in favor of Radiowealth Finance Company (herein petitioner), a Promissory Note for P138,948 payable in installments for 12 consecutive months. In the promissory note the date of the start of the monthly installments and when in each month such installment becomes due, were left blank. A late payment penalty charge of 2.5% per month shall be added to each unpaid installment from due date thereof until fully paid. An acceleration clause was likewise stipulated in the promissory note. In other words, in case of default in any installments or late payment charges thereon, the remaining unpaid and agreed late payment charges shall at once become due and demandable without need of notice or demand. Thereafter, spouses Del Rosario defaulted on the monthly installments. Despite repeated demands, they failed to pay their obligation under the promissory note. A complaint was filed for the collection of sum of money. It was likewise prayed for in the complaint that a 14%interest per annum should be charged from May 6,1993 until fully paid. The trial court dismissed the complaint for failure of

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petitioner to substantiate its claims. On appeal the CA reversed the decision of the lower court, hence this recourse. Petitioners claim that spouses Del Rosario are liable for the whole amount of their debt and interest thereon, inasmuch as they defaulted on the monthly installments. It was contended, on the other hand, by the respondents that the installments were not yet due and demandable. They theorize that the action for immediate enforcement of their obligation is premature because its fulfillment is dependent on the sole will of the debtor. Hence, the proper court should firstfix a period for payment, pursuant to Articles 1180and 1197 of the Civil Code.

Issues: Is the entire obligation of the respondents has become due and demandable upon their default on the monthly installments?

Whether the interest prayed for by the petitioner is proper? Held: It was held that the 14% interest per annum prayed for by the petitioner in the complaint to be

paid by the respondents has no legal basis. Payment of interest was not expressly stipulated in the promissory note. What stipulated in the Note is a late payment penalty of 2.5% monthly to be added to each unpaid installment until fully paid. Thus, the interest should be deemed included in such penalty.

The Note also provided that the debtors would be liable for attorney’s fees equivalent to 25 percent of the amount due in case a legal action was instituted and 10 percent of the same amount as liquidated damages. Liquidated damages, however, should no longer be imposed for being unconscionable. Such damages should also be deemed included in the 2.5 percent monthly penalty. Furthermore, we hold that petitioner is entitled to attorney’s fees, but only in a sum equal to 10 percent of the amount due which we deem reasonable under the proven facts.

Respondents are ordered TO PAY P138,948, plus 2.5 percent penalty charge per month beginning April 2, 1991 until fully paid, and 10 percent of the amount due as attorney’s fees.

H. EXEMPLARY DAMAGES

Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed when the crime was committed with one or more aggravating circumstances. Such damages are separate and distinct from fines and shall be paid to the offended party. Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. Art. 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated. Art. 2234. While the amount of the exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. In case liquidated damages have been agreed upon, although no proof of loss is necessary in order that such liquidated damages may be recovered, nevertheless, before the court may consider the question of granting exemplary in addition to the liquidated damages, the plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for liquidated damages. Art. 2235. A stipulation whereby exemplary damages are renounced in advance shall be null and void.

MAKABALI VS. CA & BARON TRAVEL CORP (1988)

Petitioner Makabali just graduated from UP’s College of Medicine and was given a Hongkong trip as her graduation. Her sister accompanied her. There was an ad of Baron Travel offering a package tour to Hongkong. They sent their brochures and information about the package. Petitioners were assured that they would be with a group of 13 led by Mr. Rosal, a tour guide, and they were to be lodged at Presidential Hotel. Someone will also meet them at the airport.

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On their departure date, they searched for the tour group and the representative. There was none so they left without any instructions. Inside the plane, they didn’t meet anyone from the Baron Tour Group. They found Mr. Rosal but said he wasn’t a tour guide but a business executive. Nobody met them. Rosal was a member of the Abaya Tour Group, and requested the tour leader to accommodate them provided they pay all the expenses. They called up the President Hotel but said it had no accommodations for them. They sent a cable to Baron to inform them. They tagged along with the Abaya Tour Group. They claimed public humiliation because they had to pay for their lunch while others had prepaid meals, and that they couldn’t go shopping. They tried to place a long-distance call, and then they sent a cable to their parents. It was only on the fourth day of their supposed five-day tour that they were notified that Baron made arrangements. Upon return, they complained but they were ignored.

They filed for damages in the CFI of Manila. They were awarded P500 as moral and exemplary damages, and P100 as attorney’s fees.

CA – awarded them P5,000 moral and exemplary damages and P1,000 as attorney’s fees ISSUE: W/N CA erred in awarding them such damages considering that she’s a doctor and the other is a

teacher (sleepless nights, public humiliation, failure of Baron to attend to the Makabalis) HELD: Yes, but only because the SC felt they should award more than P5k. There is no hard and

fast rule in the determination of what would be fair moral damages. It is essential that the claimant must have satisfactorily proven during the trial the existence of the factual basis of the damages and its causal connection to defendant’s acts. Moral damages are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer, and are allowable only when specifically prayed for in the complaint. The anxiety they must have felt in their first journer to a foreign land pushed the SC to award bigger damages, considering the social standing of petitioners and their embarassmaent and humiliation. The petitioners limited their claim for moral and exemplary damages in their complaint filed with the CFI to a total of P35,000 plus attorney’s fees. SC felt that their award shouldn’t exceed such amount. PEOPLE V. CATUBIG (2001)

Dannilyn was watching TV with her 4 siblings. After an hour, her father Danilo, told the siblings to proceed to their aunt’s house. He told her to lie down on the bed. He removed her shorts and panty and laid on top. She was afraid of him because he beat her and raped her in the past. He succeeded. Dannilyn’s aunt got suspicious and told her mother. Dannilyn then revealed to her mother that she was raped. She was examined and found that there was indeed a healed laceration caused by intercourse. Accused denied. He claimed that it was brought only because of ill-will. RTC held him guilty, and sentenced him to death penalty, plus to pay P50,000 as moral damages.

ISSUE: W/N the RTC erred in not taking into consideration that the information was defective for failure to state that the accused is the father, and the victim was under 18 HELD: YES. The concurrence of the minority of the victim and her relationship to the offender are special qualifying circumstances that are needed to be alleged in the complaint or information for the penalty of death to be decreed. It is a requirement that renders it essential for every element of the offense with which he is charged to be properly alleged in the complaint or information.

Here, the information failed to state the minority of the victim and her relationship with the offender, both special qualifying circumstances under Republic Act No. 7659, and for want of such allegations, the trial court erred in imposing the death penalty on the accused. Appellant could only thus be convicted under Article 335 of the Revised Penal Code, as amended, of simple rape punishable by reclusion perpetua.

Anent the award of damages, the trial court has correctly awarded P50,000.00 moral damages, an award that rests on the jural foundation that the crime of rape necessarily brings with it shame, mental anguish, besmirched reputation, moral shock and social humiliation to the offended party. In addition, the offended party deserves to receive the amount of P50,000.00 civil indemnity, the equivalent of compensatory damages, and exemplary damages in the amount of P25,000.00.

The attendance of aggravating circumstances in the perpetration of the crime serves to increase the penalty (the criminal liability aspect), as well as to justify an award of exemplary or corrective damages (the civil liability aspect), ]moored on the greater perversity of the offender manifested in the commission

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of the felony such as may be shown by (1) the motivating power itself, (2) the place of commission, (3) the means and ways employed, (4) the time, or (5) the personal circumstances of the offender or the offended party or both. There are various types of aggravating circumstances, among them, the ordinary and the qualifying. Relationship is an alternative circumstance under Article 15 of the Revised Penal Code.

WHEREFORE, the decision of the court a quo is AFFIRMED with MODIFICATION in that appellant Danilo Catubig y Horio is found guilty only of simple rape and not in its qualified form, and he is hereby sentenced to suffer the penalty of reclusion perpetua and to pay complainant Dannilyn Catubig P50,000.00 civil indemnity, P50,000.00 moral damages and P25,000.00 exemplary damages.

TRANS-ASIA V. CA (1996)

Atty. Renato Arroyo, a public attorney, bought a ticket Trans-Asia Shipping Lines Inc., a corporation engaged in inter-island shipping, for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on 12 November 1991. At around 5:30p.m of the said day, Arroyo boarded the M/V Asia Thailand vessel. At that instance, Arroyo noticed that some repair work were being undertaken on the engine of the vessel. The vessel departed at around 11:00 p.m. with only 1 engine running. After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some passengers demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro City. The captain acceded [sic] to their request and thus the vessel headed back to Cebu City. At Cebu City, Arroyo, together with the other passengers who requested to be brought back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Arroyo, the next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of Trans-Asia. On account of the failure of Trans-Asia to transport him to the place of destination on 12 November 1991,Arroyo filed before the trial court a complaint for damages against Trans-Asia. After due trial, the trial court rendered its decision and ruled that the action was only for breach of contract, with Articles 1170, 1172, and1173 of the Civil Code as applicable law — not Article 2180 of the same Code.

The Court dismissed the complaint as it did not appear that Arroyo was left in the Port of Cebu because of the fault, negligence, malice or wanton attitude of Trans-Asia’s employees; and likewise dismissed Trans-Asia’s counterclaim is likewise dismissed it not appearing also that filing of the case by Arroyo was motivated by malice or bad faith. Unsatisfied, Arroyo appealed to the Court of Appeals (CA-GR CV 39901). In its decision of 23 November1994, the Court of Appeals reversed the trial court’s decision by applying Article 1755 in relation to Articles 2201, 2208, 2217, and 2232 of the Civil Code and, accordingly, awarded (1) P20,000.00 as moral damages;(2) P10,000.00 as exemplary damages; (3) P5,000.00 as attorney’s fees; and (4) Cost of suit. Trans-Asia instituted the petition for review on certiorari. The Supreme Court denied the petition, and affirmed the challenged decision of the Court of Appeals, subject to the modification as to the award for attorney’s fees which is set aside; with costs against Trans-Asia

Moral damages include moral suffering, mental anguish, fright, serious anxiety, besmirchedreputation, wounded feelings, moral shock, social humiliation, or similar injury. They may be recovered in the cases enumerated in Article 2219 of the Civil Code, likewise, if they are the proximate result of, as herein, Trans-Asia’s breach of the contract of carriage. Anent a breach of a contract of common carriage, moral damages may be awarded if the common carrier acted fraudulently or in bad faith. Exemplary damages; not a matter of right - Exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. In contracts and quasi-contracts, exemplary damages may be awarded if the defendant acted in a wanton fraudulent, reckless, oppressive or malevolent manner. It cannot, however, be considered as a matter of right; the court having to decide whether or not they should be adjudicated. Before the court may consider an award for exemplary damages, the plaintiff must first show that he is entitled to moral, temperate or compensatory damages; but it is not necessary that he prove the monetary value. QC GOVERNMENT V. DACARA (2005)

Exemplary damages cannot be recovered as a matter of right. While granting them is subject to the discretion of the court, they can be awarded only after claimants have shown their entitlement to moral,

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temperate or compensatory damages. In the case before us, respondent sufficiently proved before the courts a quo that petitioners’ negligence was the proximate cause of the incident, thereby establishing his right to actual or compensatory damages. He has adduced adequate proof to justify his claim for the damages caused his car. The question that remains, therefore, is whether exemplary damages may be awarded in addition to compensatory damages. Article 2231 of the Civil Code mandates that in cases of quasi-delicts, exemplary damages may be recovered if the defendant acted with gross negligence. Gross negligence means such utter want of care as to raise a presumption that the persons at fault must have been conscious of the probable consequences of their carelessness, and that they must have nevertheless been indifferent (or worse) to the danger of injury to the person or property of others. The negligence must amount to a reckless disregard for the safety of persons or property. Such a circumstance obtains in the instant case. RAMOS VS. CA (1999)

Erlinda Ramos underwent an operation known as cholecystectomy (removal of stone in her gallbladder) under the hands of Dr. Orlino Hosaka. He was accompanied by Dr. Perfecta Gutierrez, an anesthesiologist which Dr. Hosaka recommended since Ramos (and her husband Rogelio) did not know any. The operation was schedule at 9am of June 17, 1985 but was however delayed for three hours due to the late arrival of Dr. Hosaka. Dr. Gutierrez subsequently started trying to intubate her. And at around 3pm, Erlinda was seen being wheeled to the Intensive Care Unit (ICU). The doctors explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in the ICU for a month. She was released from the hospital only four months later or

on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose condition until she died on August 3, 1999. RTC ruled in favor of the petitioners, holding the defendants guilty of, at the very least, negligence in the performance of their duty to plaintiff-patient Erlinda Ramos. On appeal to CA, the said decision was reversed – dismissing the complaint against the defendants.

ISSUES & ARGUMENTS W/N the private respondents should be held liable for the injury caused to Erlinda and her

family? HELD: YES. (I’ll cut this short to show lang the damages) The CA decision and resolution are hereby modified so as to award in favor of petitioners, and

solidarily against private respondents the following: 1) P1,352,000.00 as actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8,000.00 up to the time that petitioner Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each as exemplary damages and attorney's fees; and, 5) the costs of the suit.

In case Ma’am asks, there was an MR and the damages were put to this: However, subsequent to the promulgation of the Decision, the Court was informed by petitioner Rogelio that petitioner Erlinda died on August 3, 1999. In view of this supervening event, the award of temperate damages in addition to the actual or compensatory damages would no longer be justified since the actual damages awarded in the Decision are sufficient to cover the medical expenses incurred by petitioners for the patient. Hence, only the amounts representing actual, moral and exemplary damages, attorney’s fees and costs of suit should be awarded to petitioners.

I. MITIGATION OF DAMAGES

Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages Art. 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question.

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Art. 2204. In crimes, the damages to be adjudicated may be respectively increased or lessened according to the aggravating or mitigating circumstances Art. 2214. In quasi-delicts, the contributory negligence of the plaintiff shall reduce the damages that he may recover. Art. 2215. In contracts, quasi-contracts, and quasi-delicts, the court may equitably mitigate the damages under circumstances other than the case referred to in the preceding article, as in the following instances: (1) That the plaintiff himself has contravened the terms of the contract; (2) That the plaintiff has derived some benefit as a result of the contract; (3) In cases where exemplary damages are to be awarded, that the defendant acted upon the advice of counsel; (4) That the loss would have resulted in any event; (5) That since the filing of the action, the defendant has done his best to lessen the plaintiff's loss or injury.

MALAYSIAN AIRLINES VS. CA

The petitioner recruited the private respondent from Philippine Airlines for his training and experience and contracted his services as pilot for two years, beginning 1979. On April 12, 1981, when the plane he was driving landed at Bintulo Airport, all the tires burst, causing alarm among the passengers but, fortunately, no injuries. An investigation was conducted pending which he was preventively suspended. On May 5,1981, he was offered and accepted an extension of his contract for another year, subject to the expressed condition that he would submit to the jurisdiction of Malaysian courts in an matters relating to the contract. Ultimately, however, he was found negligent by the investigating board and dismissed by the petitioner, effective July 30, 1981.

The private respondent sought relief from the Malaysian courts but to no avail. He then brought suit in the regional trial court of Manila where the petitioner moved to dismiss for lack of jurisdiction and improper venue. The order of the trial court denying its motion was affirmed by the Court of Appeals and later by this Court. The case then proceeded to trial on the merits. After hearing, it was held that the private respondent was not guilty of negligence and that the accident was due not to his violation of the MAS manual of instructions but to a defect in the rigging of the brake control valve and the failure of the ground crew to properly maintain the aircraft. The court also found that the petitioner had acted in bad faith in inveigling the private respondent into signing the renewal of the contract submitting himself to the jurisdiction of the Malaysian courts and that his dismissal was prompted by a letter-complaint signed by Filipino and Indonesian pilots, including himself, protesting their discrimination in pay and benefits by MAS. The trial court required the petitioner to pay as follows:

1. The amount of $300,000 Malaysian dollars representing plaintiffs' salary and flight type and P100,000.00 for uprooting his family to Manila plus the further sum of P200,000.00 representing renewal of his license;

2. The amount of P3,000,000.00 as moral damages; 3. The amount of Pl,000,000.00 as exemplary damages; 4. The amount equivalent to 25% of the amount due and collectible as attorney's fees, and cost of suit. ISSUE: Whether or not the amounts of damages awarded were excessive? HELD: Yes. We affirm the factual findings of the respondent court and the lower court, there being no

sufficient showing that the said courts committed reversible error in reaching such conclusions. We cannot agree, however, with the award of damages, which seems to have gotten out of hand. The inordinate amount granted to the private respondent cans for the moderating hand of the Court, that justice may be tempered with reason instead of being tainted with what appears here to be a ruthless vindictiveness.

The complaint prayed for payment of unpaid salaries from July 1981 to July 1982 which corresponds to the periods of the renewed contract. On the basis of his monthly salary of Malaysian $4,025.00, or P33,568.50 (at the current Central Bank conversion rate of P8.34 for every Malaysian $1.00), Ms total unearned salaries will be P402,822.00. To this should be added the amount of P123,098.40 as allowance for the same period of one year at the rate of $1,230.00 per month plus P80,000.00, representing his

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expenses in transferring his family to the Philippines, amounting to an aggregate sum of P605,920.40 in actual damages. The moral and exemplary damages, while concededly due, are reduced to P500,000.00 and the attorney's fees to the fixed sum of P25,000.00. All the other awards are disauthorized.

It is important to reiterate the following observations we made in Baranda v.Baranda: We deal with one final matter that should be cause for serious concern as it has a direct relevance to the faith of our people in the administration of justice in this country. It is noted with disapproval that the respondent court awarded the total indemnity of P120,000.00, including attorney's fees and litigation expenses that were double the amounts claimed and exemplary damages which were not even prayed for by the private respondents. Such improvident generosity is likely to raise eyebrows, if not outright challenge to the motives of some of our courts, and should therefore be scrupulously avoided at all times, in the interest of maintaining popular confidence in the judiciary. We therefore caution against a similar recklessness in the future and call on an members of the bench to take proper heed of this admonition.

The respondent court affirmed the original award of damages in the staggering amount of more than P8,000,000.00. It is only fair that it be lowered to a realistic and judicious level that will, in our view, be just to both the petitioner and the private respondent. BRICKTOWN V. AMOR TIERRA

Bricktown, through its President, Mariano Velarde, entered into a CONTRACT TO SELL residential lots at Multinational Village, Parañaque (covering 82, 888 sq.m., amounting to P21, 639,875.00) to Amor Tierra . PAYMENT SCHEME: o Mar 31 1981: DP of P2.2 M | June 30: P3,209,968.75 | December 31: P4,729,906.25| Balance of 11.5 M by paying mortgage to PSBank or pay it in cash.

Subsequently, the parties executed a Supplemental Agreement: where Amor Tierra will pay 21% interest on the balance of the DP and pay P390, 369.37 for the interest paid by Bricktown to update bank loan with PS Bank for the period of Feb- Mar 1981. Amor Tierra was only able to pay 1.334M, however the parties continued to negotiate despite suspension of further payments by Amor Tierra. Later, Bricktown sent a Notice of Cancellation for failure to pay the June 30 installment by Amor; Bricktown advised the latter that non-payment 30D from receipt id the notice will result to the actual cancellation of K to Sell. Months later, instead of paying, Amor demanded a refund of the total payments of 2.455M + interest or an assignment of unencumbered residential lots corresponding to the amount already paid. Unheeded, Amore filed suit against Bricktown.

RTC: K to Sell and Supplemental Agreement are rescinded; return payments of Amor with 12% from judicial demand/the time complaint was filed; atty’s fees of 25K to Amor. CA: affirmed RTC.

ISSUES & ARGUMENTS W/N the contracts to sell were validly rescinded or cancelled by Bricktown (TORTS RELATED) W/N the amounts already remitted by Amor Tierra under said contracts

were rightly forfeited by Bricktown HELD: VALIDLY RESCINDED K to SELL. The cancellation of the contracts to sell by Bricktown accords

with the contractual covenants of the parties, and such cancellation must be respected. It may be noteworthy to add that in a contract to sell, the non-payment of the purchase price (which is normally the condition for the final sale) can prevent

the obligation to convey title from acquiring any obligatory force. NO. FORFEITURE BY BRICKTOWN IS UNCONSCIONABLE however, interest payment must be

counted from finality of judgment (not from judicial demand) While we must conclude that Bricktown still acted within its legal right to declare the contracts to sell rescinded, considering, nevertheless, the peculiar circumstances: of the parties continued negotiation despite Amor’s suspension of payments, it would be unconscionable to sanction the forfeiture by petitioner corporation of payments made to it by private respondent.

The relationship between parties in any contract must always be characterized and punctuated by good faith and fair dealing. Judging from what the courts below have said, Bricktown did fall well behind that standard. We do not find it equitable, however, to adjudge any interest payment by Bricktown on the amount to be refunded, to be computed from judicial demand. BECAUSE: Amor Tierra should not be allowed to totally free itself from its own breach.

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Simply put: The SC held that forfeiture was unconscionable because the Bricktown lead Amor Tierra to believe that there will be a new arrangement as a result of their continued negotiation. On the other hand, since Amor Tierra even barely covered to pay the complete DP, thus committing a breach of the K to Sell, the interest on the refund was mitigated/reduced by its imposition ONLY from the finality of the judgment of rescission of K to Sell, and not from the time of judicial demand of the refund.

LIM VS. CA & Gonzales (2002)

FACTS: Gonzales purchased an Isuzu passenger jeepney from Vallarte, holder of a certificate of public convenience (Monumento-Bulacan). Gonzales continued offering the jeepney for public services, he didn’t have the registration in his name, as well as the certificate of public convenience. Vallarta remained as the registered owner & operator. While the jeep was running along NLEX, it collided with a ten-wheeler truck owned by Lim and driven by Gunnaban. Gunnaban owned responsibility, said that he lost the brakes. He swerved to the left until it reached the center island. He smashed into a Ferroza, and later into the jeep driven by Gonzales. Lim shouldered the costs for hospitalization and compensated the heirs of the deceased passenger, and even restored the Ferroza. He negotiated with Gonzales and offered to have the jeep repaired at his shop. Lim offered P20,000, the assessment of damages. Gonzales wanted a new jeep (P236k). Lim increased to P40lk. Negotiations were abandoned. Gonzales filed for damages/

Lim denied liability. He further asserted that the jeep was in Vallarta’s name. Gunnaban averred that the accident was fortuitous. The jeepney, however, was left by the roadside. RTC awarded him P236k + 30k. CA affirmed.

ISSUE:Whether or not the RTC erred in awarding them P236k instead of the P20k HELD: 236k. In the present case it is at once apparent that the evil sought to be prevented in enjoining

the kabit system does not exist. First, neither of the parties to the pernicious kabit system is being held liable for damages. Second, the case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that private respondent Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered owner. Third, the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right.

In light of the foregoing, it is evident that private respondent has the right to proceed against petitioners for the damage caused on his passenger jeepney as well as on his business. Any effort then to frustrate his claim of damages by the ingenuity with which petitioners framed the issue should be discouraged, if not repelled.

Petitioners insist that as the passenger jeepney was purchased in 1982 for only P30,000.00 to award damages considerably greater than this amount would be improper and unjustified. Petitioners are at best reminded that indemnification for damages comprehends not only the value of the loss suffered but also that of the profits which the obligee failed to obtain. In other words, indemnification for damages is not limited to damnum emergens or actual loss but extends to lucrum cessans or the amount of profit lost. Had private respondent's jeepney not met an accident it could reasonably be expected that it would have continued earning from the business in which it was engaged. Private respondent avers that he derives an average income of P300.00 per day from his passenger jeepney and this earning was included in the award of damages made by the trial court and upheld by the appeals court. The award therefore of P236,000.00 as compensatory damages is not beyond reason nor speculative as it is based on a reasonable estimate of the total damage suffered by private respondent, i.e. damage wrought upon his jeepney and the income lost from his transportation business. Petitioners for their part did not offer any substantive evidence to refute the estimate made by the courts a quo.

In this case, the matter was not a liquidated obligation as the assessment of the damage on the vehicle was heavily debated upon by the parties with private respondent's demand for P236,000.00 being refuted by petitioners who argue that they could have the vehicle repaired easily for P20,000.00. In fine, the amount due private respondent was not a liquidated account that was already demandable and payable.

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One last word. We have observed that private respondent left his passenger jeepney by the roadside at the mercy of the elements. Article 2203 of the Civil Code exhorts parties suffering from loss or injury to exercise the diligence of a good father of a family to minimize the damages resulting from the act or omission in question. One who is injured then by the wrongful or negligent act of another should exercise reasonable care and diligence to minimize the resulting damage. Anyway, he can recover from the wrongdoer money lost in reasonable efforts to preserve the property injured and for injuries incurred in attempting to prevent damage to it.

However we sadly note that in the present case petitioners failed to offer in evidence the estimated amount of the damage caused by private respondent's unconcern towards the damaged vehicle. It is the burden of petitioners to show satisfactorily not only that the injured party could have mitigated his damages but also the amount thereof; failing in this regard, the amount of damages awarded cannot be proportionately reduced.

SANITARY LAUNDRY V. CA (1998)

This case involves a collision between a truck owned by petitioner and a cimarron which caused the death of three persons and injuries to several others.Petitioner’s truck crashed the cimarron when the driver stepped on the brakes to avoid hitting the jeepney and this caused his vehicle to swerve to the left and encroach on a portion of the opposite lane.

RTC found Petitioner’s driver to be responsible for the accident and awarded damages in favor of Private respondents. Petitioner contends that the driver of the cimarron was guilty of contributory negligence since it was guilty of violation of traffic rules and regulations (overloading, had only one headlight on) at the time of mishap.He also argued that sudden swerving of a vehicle caused by its driver stepping on the brakes is not negligence per se. He further argued that the driver should be exonerated based on the the doctrine of last clear chance, which states that the person who has the last clear chance of avoiding an accident, notwithstanding the negligent acts of his opponent, is solely responsible for the consequences of the accident. He petitioner claimed that the cimarron had the last opportunity of avoiding an accident.

The SC found the petitioner’s arguments to be without merit.It has not been shown that there was a casual connection between the injury received and the violation of the Land Transportation and Traffic Code. Negligence consisting in whole or in part, of violation of law, like any other negligence, is without legal consequence unless it is a contributing cause of the injury. Violations alleged in this case were mere allegations unsupported by any evidence and are insufficient to discharge its burden of proving clearly that such alleged negligence was the contributing cause of the injury. Police report did not show that only one headlight was functioning and there is nothing to suggest that the driver of the camarron had no elbow room for maneuvering the vehicle due to the alleged overloading of passengers.

All these point to the fact that the proximate cause was the negligence of petitioner’s driver. The argument that sudden swerving is not negligence per se is untenable since in the case relied on by petitioner, it is sudden skidding that was held to be not negligence per se. Although it is not required for employees to undergo psychological and physical examinations or submit clearances from the police and the NBI, driving exacts a more than usual toll on the senses

Accordingly, it behooves employers to exert extra care in the selection and supervision of their employees. They must go beyond the minimum requirements fixed by law. Finally the formula for determining life expectancy is determined by applying the formula 2/3 multiplied by (80 minus the age of the deceased).

With respect to the question of damages, we find no reversible error committed in the award of actual damages to private respondents. 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. Here, the actual damages claimed by private respondents were duly supported by receipts and appear to have been really incurred.

As to the moral damages awarded, we find them to be reasonable and necessary in view of the circumstances of this case. Moral damages are awarded to allow the victims to obtain means, diversion, or

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amusement to alleviate the moral suffering they had undergone due to the defendant’s culpable action. In this case, private respondents doubtless suffered some ordeal because some of them lost their loved ones, while others lost their future. Within the meaning of Art. 2217 of the Civil Code, they suffered sleepless nights, mental anguish, serious anxiety, and wounded feelings. An award of moral damages in their favor is thus justified.

The award of P50,000.00 to the heirs of Jason Bernabe as death indemnity is likewise in accordance with law. However, the award of P100,000 to the heirs of Dalmacio Salunoy, denominated in the decision of the trial court as “moral damages and unearned income” cannot be upheld. The heirs were already included among those awarded moral damages. Marilyn Salunoy was ordered to be paid P10,000, Jack Salunoy, P10,000, and their mother Nenita Salunoy, P20,000, as moral damages. The amount of P100,000 was presumably awarded primarily for loss of earning capacity but even then the amount must be modified. In accordance with our cases on this question, the formula for determining the life expectancy of Dalmacio Salunoy must be determined by applying the formula 2/3 multiplied by (80 minus the age of the deceased). Since Salunoy was 46 years of age at the time of his death, as stated in his death certificate, then his life expectancy was 22.6 years, or up to 68 years old.

Next, his net earnings must be computed. At the time of his death, Dalmacio Salunoy was earning more than P900.00 a month as bookkeeper at the PMCI so that his annual gross earnings was about P11,000.00. From this amount, about 50% should be deducted as reasonable and necessary living expenses because it seems his wife occasionally finds work and thus helps in the household expenses. Based on the foregoing, his net earning capacity was P124,300.00 computed as follows: net earning life capacity (x) = expectancy x [Gross annual income less reasonable & necessary living expenses] x = [2 (80-46)] x [P11,000 - P5,500] 3 = 22.6 x 5,500 = P124,300.00

In addition, the heirs of Dalmacio Salunoy should be paid P50,000.00 as death indemnity. Finally, the award of attorney’s fees should be disallowed as the trial court did not give

any justification for granting it in its decision. It is now settled that awards of attorney’s fees must be based on findings of fact and law, stated in the decision of the trial court.

WHEREFORE, the decision of the Court of Appeals is MODIFIED in the sense that the award of P100,000.00 denominated “for moral damages and unearned income” is deleted, and in lieu thereof the amount of P124,300.00 for loss of earning capacity and the further amount of P50,000.00 for death indemnity are awarded to the heirs of Dalmacio Salunoy and the award of P50,000.00 for attorney’s fees is disallowed. In all other respects the appealed decision is AFFIRMED. IS V. CA (1999)

FACTS: The son of Spouses Torralba died in the custody of International School Manila (ISM). The courts awarded the following amount in damages to the spouses: 1) Moral Damages – P4M; 2) Exemplary Damages – P1M; 3) Actual Damages – P2M, and 4) Attorney’s fees – P300K.

ISM appealed to the Court of Appeals. During the pendency of the appeal, the spouses Torralba filed a motion for execution pending appeal before the lower court on the grounds that the appeal is merely dilatory and that the filing of a bond is another good reason for the execution of a judgment pending appeal. The lower court granted the execution pending upon the posting of a bond in the amount of Five Million Pesos (P5,000,000.00) by the spouses Torralba. The court then issued a Notice of Garnishment to Citibank (which was Citibank). Citibank complied and held that P5.5M. The court then ordered the release of this amount in favor of the spouses Torralba.

ISM then filed a motion for reconsideration or approval of supersedeas bond so that the amount cannot be turned over to the spouses.

ISSUES & ARGUMENTS: W/N the grant of the writ of execution was valid.

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o Petitioner: IS claims that there is no good reason to grant the writ of executing, citing Ong v. CA, saying that the reason given is that the appeal

is frivolous and dilatory is not a reason to justify the approval of an execution pending appeal. o Respondent: The spouses argue that ISM virtually admitted that the appeal appears to be dilatory

and that it adopted the project “Code Red: consisting of safety and emergency measure only after the death of their son, and that the delay has

already affected them financially. HELD: THE WRIT OF EXECUTION IS NOT VALID. THE MERE FILING OF A BOND BY THE DEFENDANT

IS NOT A GOOD REASON FOR ORDERING EXECUTION PENDING APPEAL. A combination of circumstances is the dominant consideration which impels the grant of immediate

execution, the requirement of a bond is imposed merely as an additional factor, no doubt for the protection of the defendant's creditor. Since we have already ruled that the reason that an appeal is dilatory does not justify execution pending appeal, neither does the filing of a bond, without anything more, justify the same. Moreover, ISM could not be faulted for its withdrawal of its supersedeas bond inasmuch as the lower court granted the execution pending appeal and rejected its offer of supersedeas bond.

Radio Communications of the Philippines, Inc. (RCPI) vs. Lantin, et al.; The execution of any award for moral and exemplary damages is dependent on the outcome of the main case. Unlike the actual damages for which the petitioners may clearly be held liable if they breach a specific contract and the amounts of which are fixed and certain, liabilities with respect to moral and exemplary damages as well as the exact amounts remain uncertain and indefinite pending resolution by the Intermediate Appellate Court and eventually the Supreme Court. The existence of the factual bases of these types of damages and their causal relation to the petitioners' act will have to be determined in the light of errors on appeal. It is possible that the petitioners, after all, while liable for actual damages may not be liable for moral and exemplary damages. Or as in some cases elevated to the Supreme Court, the awards may be reduced.

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IX. PROCEDURAL RULES ON DAMAGES A. Specification of Amount of Damages B. Filing Fees for Claims for Damages

SUN INSURANCE V. ASUNCION (1989)

Sun Insurance filed a complaint with the RTC for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against respondent Manuel Tiong. Respondent, on the other hand, filed a complaint in the RTC fro refund of premiums, writ of preliminary attachment & sought the payment of actual, compensatory, moral, exemplary & liquidated damages, attorney’s fees, expenses of litigation & costs of suit against petitioner

In the body of the original complaint, the total amount of damages sought amounted to about P50M In the prayer, the amount of damages asked for was not stated. The action was for the refund of the premium and the issuance of a writ of preliminary attachment with damages The amount of only P210 was paid for the docket fee. Respondent filed an amended complaint wherein in the prayer, it is asked that he be awarded no less than P10M as actual & exemplary damages but in the body of the complaint the amount of his pecuniary claim is approximately P44.6M. Such amended complaint was admitted & the respondent was re-assessed the additional docket fee of P39,786 based on his prayer of not less than P10M in damages, which he paid.

Subsequently, respondent filed a supplemental complaint alleging an additional claim of P20M in damages, making a total claim of P64.6M. He then paid an additional docket fee of P80K. The lower court ordered respondent to be re-assessed for additional docket fee & during the pendency of this case and after promulgation of the Manchester decision, respondent field an addition docket fee of P62K

Though he appears to have paid a total amount of P182K for the docket fee, considering the total amount of his claim in the amended and supplemental complaint (amounting to about P64.6M), petitioner insists that respondent must pay a docket fee of P257.8K

ISSUES & ARGUMENTS: W/N a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid

HELD: The pattern and the intent to defraud the gov’t of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the 2nd amended complaint. However, in this case, a more liberal interpretation of the rules is called for because unlike in Manchester, respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. Nevertheless, petitioner contends that the docket fee that was paid is still insufficient considering the total amount of the claim

This is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in charge should determine and if any amount is thereafter found to be due, he must require the respondent to pay such amount. Thus the SC rules as follows: It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a TC with jurisdiction over the subject matter/nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in not case beyond the applicable prescriptive or reglementary period

The same rule applies to permissive counterclaims, third-party claims, and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefore is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive/reglementary period. Where the TC acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee, but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefore shall constitute a lien on the judgment. It shall be the responsibility of the clerk of court or his duly authorized deputy to enforce aid lien and assess and collect the additional fee

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INIEGO V. GUILLERMO (2006)

This case held that (1) the subject matter of actions for damages based on quasi-delict is capable of pecuniary estimation; and (2) moral and exemplary damages are included in the computation for the total amount reckoned with in determining jurisdiction. Since moral and exemplary damages are included, then you take these into account when computing for filing fees. For example, in this case, the total claim for damages is 490K. If you exclude moral and exemplary damages, you get a 40K damage suit and you need only pay 4K (10%). If you include such damages, as mandated by this case, you need to pay 49K in filing fees.

FACTS: In December 1999, a truck driven by Pinion hit a jeepney owned and driven by Santos. Santos then filed an action based on quasi-delict in the RTC, praying for actual damages in the amount of P40K, moral damages in the amount of P300K, and exemplary damages in the amount of P150K. Excluding attorney’s fees in the amount of P50K, the total amount of damages being claimed is P490K. Iniego challenged, alleging that the RTC had no jurisdiction because (1) actions for damages based on quasi-delict are actions that are capable of pecuniary estimation, and therefore would fall under the jurisdiction of the MTC if the claim does not exceed the jurisdictional amount of P400K in Metro Manila; and (2) that the moral and exemplary damages claimed by Santos should be excluded from the computation of the above-mentioned jurisdictional amount because they arose from a cause of action other than the negligent act of the defendant (note that Iniego points out that the complaint states that the moral damages arose out of the refusal of the tortfeasors to honor his claims). The RTC denied Iniego; the Court of Appeals, on appeal, affirmed the denial.

ISSUES: W/N the subject matter of actions for damages based on quasi-delict is capable of pecuniary

estimation. YES W/N the amount of damages claimed is still within the jurisdiction of the RTC (and not the MTC). In

other words, are moral and exemplary damages included in the computation for the test of jurisdiction? YES HELD: YES. Actions for damages based on quasi-delicts are primarily and effectively actions for the

recovery of a sum of money for the damages suffered because of the defendant’s alleged tortious acts. The damages claimed in such actions represent the monetary equivalent of the injury caused to the plaintiff by the defendant, which are thus sought to be recovered by the plaintiff. This money claim is the principal relief sought, and is not merely incidental thereto or a consequence thereof.

YES. Moral and exemplary damages should not be excluded in the computation relating to the determination of jurisdiction. First, the distinction Iniego made between damages arising directly from injuries in a quasi-delict and those arising from a refusal to admit liability for a quasi-delict is more apparent than real, as the damages sought by respondent originate from the same cause of action: the quasi-delict. Second, assuming arguendo that the claims for moral and exemplary damages arose from a cause of action other than the quasi-delict, their inclusion in the computation of damages for jurisdictional purposes is still proper. All claims for damages should be considered in determining the jurisdiction of the court regardless of whether they arose from a single cause of action or several causes of action. Rule 2, Section 5, of the Rules of Court allows a party to assert as many causes of action as he may have against the opposing party. Subsection (d) of said section provides that where the claims in all such joined causes of action are principally for recovery of money, the aggregate amount claimed shall be the test of jurisdiction. INTERCONTINENTAL BROADCASTING V. LEGASTO (2006)

There is a suit between both parties for a sum of money, In 1998 to end such suit they entered in to a compromise agreement. However in December 2000 IBC-13 commenced an action to declare the compromise agreement null and void ab initio, by then already privatized and under a new management, IBC-13 alleged, among other matters, that aside from its non-existent cause or object, said agreement was entered into by its erstwhile management without the requisite approval of the Presidential Commission on Good Government (PCGG).

Contending that IBC-13 unjustifiably refused to comply with it obligations under the compromise agreement Salvador filed an action for specific performance and damages against IBC-13 and its officers (he asked 200k as actual damages, 500k moral damages, and 300k for attorney’s fees). In February 2004

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IBC-13 filed for the dismissal of the action against it citing that Salvador only paid P 8,517.50 in docket fees, it maintained that, rather than for specific performance and damages as indicated in the complaint, Salvador’s cause of action was actually one for a sum of money, the totality of the latter’s claim, as disclosed in his motion for issuance of a writ of attachment (Salvador also filed a writ of attachment to secure the payment of his claim), translated into unpaid docket fees amounting to P5,452,237.50; and, that the suit should be dismissed for lack of jurisdiction or, at the very least, suspended until payment of the correct docket fees.

The trial court ruled that that IBC-13 is estopped from raising the issue of deficient docket fee in view of its active participation in the proceedings; that the deficiency in the filing fees did not divest it of its jurisdiction hence the proceedings need not be dismissed or suspended. The unpaid docket fees, however, would be treated as a judgment lien if favorable to respondent. The CA ruled in favor of Salvador and agreed that the non-payment of the docket fees did not dives the trial court of its jurisdiction

ISSUE: W/N the non-payment of the proper docket fees divested the jurisdiction of the lower courts? NO

HELD: According to the SC jurisdiction was properly acquired in this case even if in the Manchester Development Corporation v. CA case the SC stated that the court can only acquire jurisdiction over any case only upon the proper payment of the docket fees because this rule has been relaxed in the subsequent Sun Insurance Office v. Asuncion case.

In that case it was stated that “where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.” Also in another subsequent case where the SC clarified further the Sun Insurance ruling it stated that “Plainly, while the payment of the prescribed docket fees is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fees is paid within the applicable prescriptive or reglemantary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply.”

More importantly at time of the filing of the complaint by Salvador there were some items that cannot yet be quantified in monetary terms (the cost of the primetime slots IBC-13 was providing). The only basis then for the computation of the docket fees are the damages (only the actual, moral, and attorney’s fees) that Salvador was praying for to be awarded to him. It was only when the trial court rendered its summary judgment of August 20, 2004 that respondent’s prayer for specific performance was valued at P540,000,000.00. The P8,517.00 docket fees were computed on the basis of what was legally quantifiable at the time of the filing of the complaint. Upon proof of payment of the assessed fees by Salvador, the trial court properly acquired jurisdiction over the complaint. Jurisdiction once acquired is never lost, it continues until the case is terminated.

In the case at bar, Salvador relied on the assessment made by the docket clerk which turned out to be incorrect. The payment of the docket fees, as assessed, negates any imputation of bad faith or an intent to defraud the government by Salvador. Thus, when insufficient filing fees were initially paid by him and there was no intention to defraud the government, the Manchester rule does not apply. Hence, the trial court properly acquired jurisdiction over the instant suit. Further, Section 2 of Rule 141 of the Rules of Court clearly provides that: Fees in lien. – Where the court in its final judgment awards a claim not alleged, or a relief different from, or more than that claimed in the pleading, the party concerned shall pay the additional fees which shall constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall assess the fees.

SC CIRCULAR NO. 7 (1983)

In "Manchester Development Corporation vs. Court of Appeals", No. L-75919, May 7, 1987, 149 SCRA 562, this Court condemned the practice of counsel who in filing the original complaint omitted from the prayer

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any specification of the amount of damage although the amount of over P78 million is alleged in the body of the complaint. This Court observed that "(T)his is clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk, in the assessment of the filing fees. This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. . . . ." For the guidance of all concerned, the WARNING given by the Court in the afore-cited case is reproduced hereunder:

The Court serves warning that it will take drastic action upon a repetition of this unethical practice. To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from the record. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amount sought (115 SCRA 193) in so far as it is inconsistent with this pronouncement is overturned and reversed.

SC CIRCULAR 57-97 (1997)

SUBJECT: RULES AND GUIDELINES IN THE FILING AND PROSECUTION OF CRIMINAL CASES UNDER BATAS PAMBANSA BLG. 22.

Any provision of law or the Rules of Court to the contrary notwithstanding, the following rules and guidelines shall henceforth be observed in the filing and prosecution of all criminal cases under Batas Pambansa Blg. 22 which penalizes the making or drawing and issuance of a check without funds or credit:chanroblesvirtuallawlibrary

[1] The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to necessarily include the corresponding civil action, and no reservation to file such civil action separately shall be allowed or recognized.

[2] Upon the filing of the aforesaid joint criminal and civil action, the offended party shall pay in full the filing fees based upon the amount of the check involved, which shall be considered as the actual damages claimed, in accordance with the schedule of filing fees in Section 7(a) and Section 8(a), Rule 141 of the Rules of Court, as last amended by Administrative Circular No. 11-94 effective August 1, 1994. Where the offended party further seeks to enforce against the accused civil liability by way of liquidated, moral, nominal, temperate or exemplary damages, he shall pay the corresponding filing fees therefor based on the amounts thereof as alleged either in his complaint or in the information. If not so alleged but any of these damages are subsequently awarded by the Court, the amount of such fees shall constitute a first lien on the judgment.

[3] Where the civil action has heretofore been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the Court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with the pertinent procedure outlined in Section 2(a) of Rule 111 governing the proceedings in the actions as thus consolidated. SC CIRCULAR 70-97 (1997)

SUBJECT: PROCEDURAL GUIDELINES IN THE COLLECTION OF THE FILING FEES SUBJECT OF SUPREME COURT CIRCULAR NO. 57-97 DATED 16 SEPTEMBER 1997 AND OTHER LEGAL FEES INVOLVED; AND THE DOCKETING OF THE CRIMINAL CASE/S ON THE VIOLATION OF BATAS PAMBANSA BLG. 22.

In implementation of the provisions of Circular No. 57-97 dated 16 September 1997 prescribing rules and guidelines in the filing and prosecution of criminal cases under Batas Pambansa Blg. 22 ["An Act

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Penalizing the Making or Drawing, and Issuance of a Check Without Sufficient Funds or Credit and For Other Purposes"], the following procedures shall be followed in [a] the collection of the filing fees subject of said Circular No. 57-97 and other legal fees involved; and [b] the docketing of the criminal case or cases on the violation of Batas Pambansa Blg. 22:chanroblesvirtuallawlibrary

1. The Office of the Clerk of Court shall receive the Information filed by the Office of the Chief State Prosecutor or the Provincial/City, Prosecution Office. Upon receipt, the Information shall be entered in a separate record book and assigned an undocketed number [UDK No.] consistent, of (a) the Investigation Slip No. ["I.S. No."] appearing on the said Information for easy identification; and (b) a number starting with No. 1 [Example: UDK No. 6789-1];

2. Thereafter, the Clerk of Court shall, by form letter [Annex "A"], notify and advise the complainant of

(a) the filing of the information; and (b) the requirement as to the payment in full of the filing fees under Circular No. 57-97 based upon the computation stated therein. The State Prosecutor, the Provincial/Assistant Provincial Prosecutor or the City/Assistant City Prosecutor who filed the Information and the respondent shall be furnished with copies of the accomplished form letter sent by the Clerk of Court;

3. The complainant shall have a period of ten [10] days from receipt of the letter within which to pay

the filing fees. Should the complainant fail to pay the filing fees within the ten [10] day period stated herein, the case folder shall be archived. After the lapse of two [2] months, the records may be disposed of.

4. Upon receipt of the filing fees under Circular No. 57-97, the Information shall be entered in the

Court’s general docket book and assigned the court case number. Thereafter, the Clerk of Court shall cause the inclusion of the case in the raffle of cases.

The filing fees and other legal fees shall be processed in accordance with the flowchart attached

herewith as Annex "B." 5. In the event that the amount of the actual damages claimed exceeds the maximum amount of

P200,000.00, the filing fees to be collected in excess of the aforementioned amount shall be in accordance with the provisions of Section 7 (a), Rule 141 of the Rules of Court.

NG SOON V. ALDAY

During his lifetime, Mr. Gan Bun Yaw opened a Savings Account in China Banking Corporation (CBC) wherein he deposited P900,000 more or less. Before his death, he lapsed into a coma until he finally died. His passbook still showed a deposit of P900,000 more or less. Petitioner Ng Soon claims to be the widow of Yaw. She looked for the deposit passbook to no avail. She discovered that CBC closed the savings account and that defendant Billie Gan connived and colluded with the officers of CBC to withdraw all the savings account of Yaw by forging his signature.

Petitioner’s complaint alleges that she suffered actual damages in the form of missing money in the savings account and expenses of litigation, moral damages and exemplary damages, the amount of which she leaves to the discretion of the court, and attorney’s fees equivalent to 20%.

For the filing of the complaint, petitioner paid P3,600 as docket fees. Respondent moved to expunge the complaint from the record for the alleged non-payment of the required docket fees. TC issued an order granting the motion to expunge complaint.

ISSUES & ARGUMENTS W/N TC incorrectly applied the doctrine in the case of Manchester v. CA. W/N TC acted with grave abuse of discretion in ordering the complaint expunged from the record

although petitioner had paid the necessary filing fees. HOLDING & RATIO DECIDENDI: YES. Complaint reinstated.

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Manchester laid down the rule that all complaints should specify the amount of damages prayed for not only in the body of the complaint but also in the prayer; that said damages shall be considered in the assessment of the filing fees; and that any pleading that fails to comply with such requirement shall not be accepted nor admitted, or shall, otherwise, be expunged from the record.

While the body of the complaint was silent as to the exact amount of moral and exemplary damages and attorney’s fees, the prayer did specify the amount of not less than P50,000 as moral and exemplary damages, and not less than P50,000 as attorney’s fees. These amounts are definite enough and enabled the clerk of court to compute the docket fees payable.

Also, the principal amount sought to be recovered as missing money was fixed at P900,000. The failure to state the rate of interest demanded was not fatal not only because it is the courts which ultimately fix the same, but also because Rule 141, Section 5(a) of the Rules of Court speaks of “the sum claimed, exclusive of interest.” This clearly implies that the specification of the interest rate is not that indispensable. Furthermore, the amounts claimed need not be initially stated with mathematical precision. The same rule allows an appraisal “more or less.” In other words, a final determination is still to be made by the court, and the fees ultimately found to be payable will either be additionally paid or refunded to the party concerned.

The pattern in Manchester to defraud the government of the docket fees due is patently absent in this case. Petitioner demonstrated her willingness to abide by the Rules by paying the assessed docket fees of P3,600. She also asked the court to inform her of the deficiency, if any. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive period.

MANANTAN V. CA (2001) (borrowed)

On June 1, 1983, the provincial fiscal of Isabela filed an information charging petitioner Manantan with reckless imprudence resulting in homicide. On arraignment, petitioner pleaded not guilty to the charge. The prosecution’s evidence, as summarized by the trial court indicated that Manantan was driving 40 km/hr along the highway (although according to Charles Cudamon, the car was running at a speed of 80 to 90 kkm/hr on the wrong lane of the highway because the car was overtaking a tricycle, when they met a passenger jeepney with bright lights on). The defense version was essentially the same as that of the prosecution, except that defense witness Miguel Tabangin declared that Manantan did not drink beer that night. RTC found the accused not guilty but on appeal the court modified the decision in favor of the private respondents.

ISSUE: 1.Did the acquittal of petitioner over foreclose any further injury by the court of appeals as to his

negligence of reckless imprudence? 2.Did the court a quo err in finding that petitioner’s acquittal did not extinguish his civil liability? HELD: On the first issue, our law recognizes two kinds of acquittal, with different effects on the civil

liability of the accused. First is an acquittal on the ground that the accused is not the author of the act or omission complained of. The second is an acquittal based on reasonable doubt on the guilt of the accused. In this case, even if the guilt of the accused has not been satisfactorily established, he is not exempt from civil liability which may be proved by preponderance of evidence only. On the second issue, our scrutiny of the lower court’s decision in this case supports the conclusion of the appellate court that the acquittal was based on reasonable doubt; hence petitioner’s civil liability was not extinguished by his discharge. The court note that the trial court’s declaration that did not discount the possibility that the accused was really negligent. The foregoing clearly shows that petitioner’s acquittal was predicated on the conclusion that his guilt had not been established with moral certainty. Stated differently, it is an acquittal based on reasonable doubt and a suit to enforce civil liability for the same act or omission lies. Therefore, the instant petition was hereby dismissed.

In cases wherein the amount of damages, other than actual, is alleged in the complaint or information, the corresponding filing fees shall be paid by the offended party upon the filing thereof in court for trial. The foregoing were the applicable provisions of the Rules of Criminal Procedure at the time private respondents appealed the civil aspect of Criminal Case No. 066 to the court a quo in 1989. Being in the nature of a curative

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statute, the amendment applies retroactively and affects pending actions as in this case.Thus, where the civil action is impliedly instituted together with the criminal action, the actual damages claimed by the offended parties, as in this case, are not included in the computation of the filing fees. Filing fees are to be paid only if other items of damages such as moral, nominal, temperate, or exemplary damages are alleged in the complaint or information, or if they are not so alleged, shall constitute a first lien on the judgment.[21] Recall that the information in Criminal Case No. 066 contained no specific allegations of damages. Considering that the Rules of Criminal Procedure effectively guarantee that the filing fees for the award of damages are a first lien on the judgment, the effect of the enforcement of said lien must retroact to the institution of the criminal action. The filing fees are deemed paid from the filing of the criminal complaint or information. We therefore find no basis for petitioner’s allegations that the filing fees were not paid or improperly paid and that the appellate court acquired no jurisdiction.