Sabina Exconde vs Delfin and Dante Capuno

Liability of Parents

Dante Capuno was a 15 year old boy who was a pupil of Balintawak Elementary School. In March 1949,

he attended a boy scout parade for Dr. Jose Rizal. While they were inside a jeep, he took control of the

wheels which he later lost control of causing the jeep to go turtle thereby killing two other students,

Isidoro Caperina and one other. Isidoro’s mother, Sabina Exconde, sued Dante Capuno for the death of

her son. Pending the criminal action, the mother reserved her right to file a separate civil action which

she subsequently filed against Dante and his dad, Delfin Capuno.

ISSUE: Whether or not Delfin Capuno, as the father of Dante is liable for damages.

HELD: Yes. The civil liability which the law imposes upon the father, and, in case of his death or

incapacity, the mother, for any damages that may be caused by the minor children who live with them,

is obvious. This is necessary consequence of the parental authority they exercise over them which

imposes upon the parents the “duty of supporting them, keeping them in their company, educating

them and instructing them in proportion to their means”, while, on the other hand, gives them the

“right to correct and punish them in moderation”. The only way by which they can relieve themselves of

this liability is if they prove that they exercised all the diligence of a good father of a family to prevent

the damage which Delfin failed to prove.

On the other hand, the school is not liable. It is true that under the law, “teachers or directors of arts

and trades are liable for any damages caused by their pupils or apprentices while they are under their

custody”, but this provision only applies to an institution of arts and trades and not to any academic

educational institution.

JUSTICE J.B.L. REYES Dissenting:

Delfin Capuno should be relieved from liability. There is no sound reason for limiting the liability to

teachers of arts and trades and not to academic ones. What substantial difference is there between

them in so far as, concerns the proper supervision and vigilance over their pupils? It cannot be seriously

contended that an academic teacher is exempt from the duty of watching do not commit a tort to the

detriment of third persons, so long as they are in a position to exercise authority and supervision over

the pupil.

Maria Teresa Cuadra vs Alfonso Monfort

Liability of Parents

Maria Teresa Cuadra and Maria Teresa Monfort were both classmates in Mabini Elementary School

Bacolod City. In July 1962, their teacher assigned the class to weed the school premises. While they

were doing so, MT Monfort found a headband and she jokingly shouted it as an earthworm and

thereafter tossed it MT Cuadra who was hit in her eye. MT Cuadra’s eye got infected. She was brought

to the hospital; her eyes were attempted to be surgically repaired but she nevertheless got blind in her

right eye. MT Cuadra’s parents sued Alfonso Monfort (MT Monfort’s dad) based on Article 2180 of the

Civil Code. The lower court ruled that Monfort should pay for actual damages (cost of hospitalization),

moral damages and attorney’s fees.

ISSUE: Whether or not Monfort is liable under Article 2180.

HELD: No. Article 2180 provides that the father, in case of his incapacity or death, the mother, is

responsible for the damages caused by the minor children who live in their company. The basis of this

vicarious, although primary, liability is fault or negligence, which is presumed from that which

accompanied the causative act or omission. The presumption is merelyprima facie and may therefore be

rebutted. This is the clear and logical inference that may be drawn from the last paragraph of Article

2180, which states “that the responsibility treated of in this Article shall cease when the persons herein

mentioned prove that they observed all the diligence of a good father of a family to prevent damage.”

In the case at bar there is nothing from which it may be inferred that Alfonso Monfort could have

prevented the damage by the observance of due care, or that he was in any way remiss in the exercise

of his parental authority in failing to foresee such damage, or the act which caused it. On the contrary,

his child was at school, where it was his duty to send her and where she was, as he had the right to

expect her to be, under the care and supervision of the teacher. And as far as the act which caused the

injury was concerned, it was an innocent prank not unusual among children at play and which no parent,

however careful, would have any special reason to anticipate much less guard against. Nor did it reveal

any mischievous propensity, or indeed any trait in the child’s character which would reflect unfavorably

on her upbringing and for which the blame could be attributed to her parents.

JUSTICE BARREDO Dissenting;

MT Monfort is already 13 years old and should have known that by jokingly saying “aloud that she had

found an earthworm and, evidently to frighten the Cuadra girl, tossed the object at her,” it was likely

that something would happen to her friend, as in fact, she was hurt. There is nothing in the record that

would indicate that Alfonso had properly advised his daughter to behave properly and not to play

dangerous jokes on her classmate and playmates, he can be liable under Article 2180 of the Civil Code.

There is nothing in the record to show that he had done anything at all to even try to minimize the

damage caused upon by his child.

Tamargo vs CA

GR No. 85044, June 3, 1992

FACTS:

In October 1982, Adelberto Bundoc, minor, 10 years of age, shot Jennifer Tamargo with an air rifle

causing injuries that resulted in her death. The petitioners, natural parents of Tamargo, filed a

complaint for damages against the natural parents of Adelberto with whom he was living the time of the

tragic incident.

In December 1981, the spouses Rapisura filed a petition to adopt Adelberto Bundoc. Such petition was

granted on November 1982 after the tragic incident.

ISSUE: WON parental authority concerned may be given retroactive effect so as to make adopting

parents the indispensable parties in a damage case filed against the adopted child where actual custody

was lodged with the biological parents.

HELD:Parental liability is a natural or logical consequence of duties and responsibilities of parents, their

parental authority which includes instructing, controlling and disciplining the child. In the case at bar,

during the shooting incident, parental authority over Adelberto was still lodged with the natural parents.

It follows that they are the indispensable parties to the suit for damages. “Parents and guardians are

responsible for the damage caused by the child under their parental authority in accordance with the

civil code”.

SC did not consider that retroactive effect may be given to the decree of adoption so as to impose a

liability upon the adopting parents accruing at the time when they had no actual or physical custody

over the adopted child. Retroactivity may be essential if it permits accrual of some benefit or advantage

in favor of the adopted child. Under Article 35 of the Child and Youth Welfare Code, parental authority

is provisionally vested in the adopting parents during the period of trial custody however in this case,

trial custody period either had not yet begin nor had been completed at the time of the shooting

incident. Hence, actual custody was then with the natural parents of Adelberto.

Petition for review was hereby granted.

Republic of the Philippines SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 85044 June 3, 1992

MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners, vs. HON. COURT OF APPEALS, THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20, Vigan, Ilocos Sur; VICTOR BUNDOC; and CLARA BUNDOC, respondents. FELICIANO, J.:

On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo with an

air rifle causing injuries which resulted in her death. Accordingly, a civil complaint for damages was filed

with the Regional Trial Court, Branch 20, Vigan, Ilocos Sur, docketed as Civil Case No. 3457-V, by

petitioner Macario Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and Aurelia

Tamargo, Jennifer's natural parents against respondent spouses Victor and Clara Bundoc, Adelberto's

natural parents with whom he was living at the time of the tragic incident. In addition to this case for

damages, a criminal information or Homicide through Reckless Imprudence was filed [Criminal Case No.

1722-V] against Adelberto Bundoc. Adelberto, however, was acquitted and exempted from criminal

liability on the ground that he bad acted without discernment.

Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had filed a petition

to adopt the minor Adelberto Bundoc in Special Proceedings No. 0373-T before the then Court of First

Instance of Ilocos Sur. This petition for adoption was grunted on, 18 November 1982, that is, after

Adelberto had shot and killed Jennifer.

In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of the

foregoing petition for adoption, claimed that not they, but rather the adopting parents, namely the

spouses Sabas and Felisa Rapisura, were indispensable parties to the action since parental authority had

shifted to the adopting parents from the moment the successful petition for adoption was filed.

Petitioners in their Reply contended that since Adelberto Bundoc was then actually living with his

natural parents, parental authority had not ceased nor been relinquished by the mere filing and granting

of a petition for adoption.

The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that respondent natural

parents of Adelberto indeed were not indispensable parties to the action.

Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-day

reglementary period, or on 14 December 1987, petitioners filed a motion for reconsideration followed

by a supplemental motion for reconsideration on 15 January 1988. It appearing, however, that the

motions failed to comply with Sections 4 and 5 of Rule 15 of the Revised Rules of Court — that notice of

the motion shall be given to all parties concerned at least three (3) days before the hearing of said

motion; and that said notice shall state the time and place of hearing — both motions were denied by

the trial court in an Order dated 18 April 1988. On 28 April 1988, petitioners filed a notice of appeal. In

its Order dated 6 June 1988, the trial court dismissed the notice at appeal, this time ruling that the

notice had been filed beyond the 15-day reglementary period ending 22 December 1987.

Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning the trial

court's Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June 1988, The Court

of Appeals dismissed the petition, ruling that petitioners had lost their right to appeal.

In the present Petition for Review, petitioners once again contend that respondent spouses Bundoc are

the indispensable parties to the action for damages caused by the acts of their minor child, Adelberto

Bundoc. Resolution of this Petition hinges on the following issues: (1) whether or not petitioners,

notwithstanding loss of their right to appeal, may still file the instant Petition; conversely, whether the

Court may still take cognizance of the case even through petitioners' appeal had been filed out of time;

and (2) whether or not the effects of adoption, insofar as parental authority is concerned may be given

retroactive effect so as to make the adopting parents the indispensable parties in a damage case filed

against their adopted child, for acts committed by the latter, when actual custody was yet lodged with

the biological parents.

1. It will be recalled that, petitioners' motion (and supplemental motion) for reconsideration

filed before the trial court, not having complied with the requirements of Section 13, Rule

41, and Section 4, Rule 15, of the Revised Rules of Court, were considered pro forma and

hence did not interrupt and suspend the reglementary period to appeal: the trial court held

that the motions, not having contained a notice of time and place of hearing, had become

useless pieces of paper which did not interrupt the reglementary period. 1 As in fact

repeatedly held by this Court, what is mandatory is the service of the motion on the

opposing counsel indicating the time and place of hearing. 2

In view, however, of the nature of the issue raised in the instant. Petition, and in order that substantial

justice may be served, the Court, invoking its right to suspend the application of technical rules to

prevent manifest injustice, elects to treat the notice of appeal as having been seasonably filed before

the trial court, and the motion (and supplemental motion) for reconsideration filed by petitioner in the

trial court as having interrupted the reglementary period for appeal. As the Court held in Gregorio v.

Court of Appeals: 3

Dismissal of appeal; purely on technical grounds is frowned upon where the policy of the courts is to

encourage hearings of appeal on their merits. The rules of procedure ought not be applied in a very rigid

technical sense, rules of procedure are used only to help secure not override, substantial justice. if d

technical and rigid enforcement of the rules is made their aim would be defeated. 4

2. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air

rifle gave rise to a cause of action on quasi-delict against him. As Article 2176 of the Civil Code provides:

Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay

for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between

the parties, is called a quasi-delict . . .

Upon the other hand, the law imposes civil liability upon the father and, in case of his death or

incapacity, the mother, for any damages that may be caused by a minor child who lives with them.

Article 2180 of the Civil Code reads:

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.

xxx xxx xxx

The responsibility treated of in this Article shall cease when the person herein mentioned prove that

they observed all the diligence of a good father of a family to prevent damage. (Emphasis supplied)

This principle of parental liability is a species of what is frequently designated as vicarious liability, or the

doctrine of "imputed negligence" under Anglo-American tort law, where a person is not only liable for

torts committed by himself, but also for torts committed by others with whom he has a certain

relationship and for whom he is responsible. Thus, parental liability is made a natural or logical

consequence of the duties and responsibilities of parents — their parental authority — which includes

the instructing, controlling and disciplining of the child. 5 The basis for the doctrine of vicarious liability

was explained by the Court in Cangco v. Manila Railroad Co. 6 in the following terms:

With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is

competent for the legislature to elect — and our Legislature has so elected — to limit such liability to

cases in which the person upon whom such an obligation is imposed is morally culpable or, on the

contrary, for reasons of public policy. to extend that liability, without regard to the lack of moral

culpability, so as to include responsibility for the negligence of those persons whose acts or omissions

are imputable, by a legal fiction, to others who are in a position to exercise an absolute or limited

control over them. The legislature which adopted our Civil Code has elected to limit extra-contractual

liability — with certain well-defined exceptions — to cases in which moral culpability can be directly

imputed to the persons to be charged. This moral responsibility may consist in having failed to exercise

due care in one's

own acts, or in having failed to exercise due care in the selection and control of one's agent or servants,

or in the control of persons who, by reasons of their status, occupy a position of dependency with

respect to the person made liable for their conduct. 7 (Emphasis Supplied)

The civil liability imposed upon parents for the torts of their minor children living with them, may be

seen to be based upon the parental authority vested by the Civil Code upon such parents. The civil law

assumes that when an unemancipated child living with its parents commits a tortious acts, the parents

were negligent in the performance of their legal and natural duty closely to supervise the child who is in

their custody and control. Parental liability is, in other words, anchored upon parental authority coupled

with presumed parental dereliction in the discharge of the duties accompanying such authority. The

parental dereliction is, of course, only presumed and the presumption can be overtuned under Article

2180 of the Civil Code by proof that the parents had exercised all the diligence of a good father of a

family to prevent the damage.

In the instant case, the shooting of Jennifer by Adelberto with an air rifle occured when parental

authority was still lodged in respondent Bundoc spouses, the natural parents of the minor Adelberto. It

would thus follow that the natural parents who had then actual custody of the minor Adelberto, are the

indispensable parties to the suit for damages.

The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption was

issued by the adoption court in favor of the Rapisura spouses, parental authority was vested in the latter

as adopting parents as of the time of the filing of the petition for adoption that is, before Adelberto had

shot Jennifer which an air rifle. The Bundoc spouses contend that they were therefore free of any

parental responsibility for Adelberto's allegedly tortious conduct.

Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare Code 8 which reads as

follows:

Art. 36. Decree of Adoption. — If, after considering the report of the Department of Social Welfare or

duly licensed child placement agency and the evidence submitted before it, the court is satisfied that the

petitioner is qualified to maintain, care for, and educate the child, that the trial custody period has been

completed, and that the best interests of the child will be promoted by the adoption, a decree of

adoption shall be entered, which shall be effective he date the original petition was filed. The decree

shall state the name by which the child is thenceforth to be known. (Emphasis supplied)

The Bundoc spouses further argue that the above Article 36 should be read in relation to Article 39 of

the same Code:

Art. 39. Effect of Adoption. — The adoption shall:xxx xxx xxx

(2) Dissolve the authority vested in the natural parents, except where the adopter is the spouse of

the surviving natural parent;

(Emphasis supplied)

and urge that their Parental authority must be deemed to have been dissolved as of the time the

Petition for adoption was filed.

The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability for the

torts of a minor child is the relationship existing between the parents and the minor child living with

them and over whom, the law presumes, the parents exercise supervision and control. Article 58 of the

Child and Youth Welfare Code, re-enacted this rule:

Article 58 Torts — Parents and guardians are responsible for the damage caused by the child

under their parental authority in accordance with the civil Code. (Emphasis supplied)

Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that the child,

doer of the tortious act, shall have beer in the actual custody of the parents sought to be held liable for

the ensuing damage:

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.

(Emphasis supplied)

We do not believe that parental authority is properly regarded as having been retroactively transferred

to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle shooting happened.

We do not consider that retroactive effect may be giver to the decree of adoption so as to impose a

liability upon the adopting parents accruing at a time when adopting parents had no actual or physically

custody over the adopted child. Retroactive affect may perhaps be given to the granting of the petition

for adoption where such is essential to permit the accrual of some benefit or advantage in favor of the

adopted child. In the instant case, however, to hold that parental authority had been retroactively

lodged in the Rapisura spouses so as to burden them with liability for a tortious act that they could not

have foreseen and which they could not have prevented (since they were at the time in the United

States and had no physical custody over the child Adelberto) would be unfair and unconscionable. Such

a result, moreover, would be inconsistent with the philosophical and policy basis underlying the doctrine

of vicarious liability. Put a little differently, no presumption of parental dereliction on the part of the

adopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject to

their control at the time the tort was committed.

Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article 35

provides as follows:

Art. 35. Trial Custody. — No petition for adoption shall be finally granted unless and until the adopting

parents are given by the courts a supervised trial custody period of at least six months to assess their

adjustment and emotional readiness for the legal union. During the period of trial custody, parental

authority shall be vested in the adopting parents. (Emphasis supplied)

Under the above Article 35, parental authority is provisionally vested in the adopting parents during the

period of trial custody, i.e., before the issuance of a decree of adoption, precisely because the adopting

parents are given actual custody of the child during such trial period. In the instant case, the trial

custody period either had not yet begun or bad already been completed at the time of the air rifle

shooting; in any case, actual custody of Adelberto was then with his natural parents, not the adopting

parents.

Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were

indispensable parties to the suit for damages brought by petitioners, and that the dismissal by the trial

court of petitioners' complaint, the indispensable parties being already before the court, constituted

grave abuse of discretion amounting to lack or excess of jurisdiction.

WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE COURSE and the

Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No. SP-15016 is hereby REVERSED

and SET ASIDE. Petitioners' complaint filed before the trial court is hereby REINSTATED and this case is

REMANDED to that court for further proceedings consistent with this Decision. Costs against respondent

Bundoc spouses. This Decision is immediately executory.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Romero, concur.

Cresencio Libi et al vs IAC et al

Civil Law – Torts and Damages – Vicarious Liability of Parents – Murder-Suicide of Minor Lovers

Since about 1976, minors Julie Ann Gotiong and Wendell Libi were lovers. In December 1978, Julie Ann

decided to break up with Wendell because the latter has violent tendencies. Julie Ann refused to give

Wendell his second chance. On January 14, 1979, both minors were found dead inside Julie Ann’s house.

Both were only 18 years of age (age of majority that time was 21).

Apparently, Wendell used his father’s gun to kill Julie Ann and then later he committed suicide.

The parents of Julie Ann (Felipe and Shirley Gotiong) then filed a civil case for recovery of damages

based on Article 2180 of the Civil Code against the parents of Wendell (Cresencio and Amelia Libi).

ISSUE: Whether or not the parents of Wendell are civilly liable?

HELD: Yes. It was determined from the evidence adduced that the Libis had been negligent in

safekeeping their gun. Wendell gained access to the gun in 1978 and the Libis did not know that their

son had possession of said gun. They only found out about it when the shooting happened. Further, they

were not even aware that their son is a drug informant of the local Constabulary (police force at that

time). Clearly, the parents were negligent and were not acting with the diligence required by law (that of

a good father of a family) in making sure that their minor children shall not cause damages against other

persons.

What is the nature of their liability?

In this case, the Supreme Court also clarified that the nature of the liability of parents in cases like this is

not merely subsidiary. Their liability is primary. This is whether or not what the damage caused by their

minor child arose from quasi-delict or from a criminal act. This is also the reason why parents can avoid

liability if they will be able to show that they have acted with the diligence required by law because if

their liability is merely subsidiary, they can never pose the defense of diligence of a good father of a

family.

Philippine Rabbit Bus Lines v. Phil-American Forwarders

FACTS Pineda recklessly drove a freight truck [owned by Phil-American Forwarders] along the national

highway at Pampanga, and the truck bumped the PRBL bus driven by Pangalangan. As a result,

Pangalangan suffered injuries and the bus was damaged and could not be used for 79 days, thus

depriving PRBL of earnings amounting to P8,665.51. Balingit was the manager of Phil-American

Forwarders.

PRBL and Pangalangan filed a complaint for damages against Phil-American Forwarders, Balingit, and

Pineda. Defendants said Balingit was not Pineda's employer. Balingit moved that the complaint against

him be dismissed on the ground that PRBL and Pangalangan had no cause of action against him. CFI

dismissed the complaint against Balingit, on the ground that he is not the manager of an establishment

as contemplated in NCC 2180.

ISSUE AND HOLDING

WON the terms "employers" and "owners and managers of an establishment or enterprise" embrace

the manager of a corporation owning a truck, the reckless operation of which allegedly resulted in the

vehicular accident from which the damage arose. NO.

RATIO

Those terms do not include the manager of a corporation. It may be gathered from the context of NCC

2180 that the term "manager" ("director" in the Spanish version) is used in the sense of "employer".

Hence, no tortious or quasi-delictual liability can be imposed on Balingit as manager of Phil-American

Forwarders, in connection with the vehicular accident in question, because he himself may be regarded

as an employee or dependiente of Phil-American Forwarders.

University of the East vs Jader

327 scra 804

Article 19 of the Civil Code

Petitioner was enrolled in the defendant’s College of Law. He failed to take the regular examination in

Practice Court 1 for which he was given an incomplete grade. He enrolled for the second semester as a

fourth year student, and filed an application for the removal of the incomplete grade which was

approved by the Dean. In the meantime, the faculty members and the Dean met to deliberate who

among the fourth year students should be allowed to graduate. The plaintiff’s name appeared on the

tentative list, he also attended the investiture ceremonies to which he tendered blowout afterwards. He

thereafter prepared himself for the bar examination and took review classes. However, he was not able

to take the bar examination because his academic requirements is not complete. Consequently,

respondent sued petitioner for damages alleging that he suffered moral shock besmirched reputation,

wounded feelings, sleepless nights, when he was not able to take the 1988 bar examinations arising

from the latter’s negligence. He prayed for an award of moral damages, unrealized income, attorney’s

fees and cost of suit.

ISSUE: Whether or not an educational institution be held liable for damages for misleading a student

into believing that the latter had satisfied all the requirements for graduation when such is not the case.

HELD: The Supreme Court held that UE is liable for damages. It is the contractual obligation of the school

to timely inform and furnish sufficient notice and information to each and every student as to where he

or she had already complied with the entire requirement for the conferment of a degree or whether

they should be included among those who will graduate. The school cannot be said to have acted in

good faith. Absence of good faith must be sufficiently established for a successful prosecution by the

aggrieved party in suit for abuse of right under Article 19 of the Civil Code.

J.H. Chapman vs James Underwood

27 Phil 374 – Civil Law - Torts and Damages – Liability of owners of motor vehicles

The facts of the case took place in the 1910’s. J.H. Chapman visited a friend in Santa Ana and while he

was about to ride a vehicle to take him home he was struck by a car owned by James Underwood and

driven by his chauffeur. Chapman was on the correct lane. Underwood was riding in the car when the

incident happened. Apparently, the chauffeur, coming from the opposite direction and was driving

straight ahead and when the automobile about to be boarded by Chapman was in front of him, he [the

chauffeur] instead of swerving left he suddenly swerved right to the direction of Chapman thereby

hitting and running over him.

ISSUE: Whether or not Underwood is liable for the negligent act of his chauffeur.

HELD: No. The general rule is that an owner who sits in his automobile, or other vehicle, and permits his

driver to continue in a violation of the law by the performance of negligent acts, after he has had a

reasonable opportunity to observe them and to direct that the driver cease therefrom, becomes himself

responsible for such acts. On the other hand, if the driver, by a sudden act of negligence, and without

the owner having a reasonable opportunity to prevent the acts or its continuance, injures a person or

violates the criminal law, the owner of the automobile, although present therein at the time the act was

committed, is not responsible, either civilly or criminally, therefor. The act complained of must be

continued in the presence of the owner for such a length a time that the owner, by his acquiescence,

makes his driver’s act his own. In the case at bar, it was not shown that there was a sufficient period for

Underwood to dissuade the chauffeur from the negligent act as the swerving of the vehicle by the

chauffeur was sudden.

SPOUSES FONTANILLA VS HON. MALIAMAN, digested

GR # 55963 and 61045, Feb. 27, 1991 (Constitutional Law – Government Agency, Proprietary Functions)

FACTS: National Irrigation Administration (NIA), a government agency, was held liable for damages

resulting to the death of the son of herein petitioner spouses caused by the fault and/or negligence of

the driver of the said agency. NIA maintains that it is not liable for the act of its driver because the

former does not perform primarily proprietorship functions but governmental functions.

ISSUE: Whether or not NIA may be held liable for damages caused by its driver.

HELD: Yes. NIA is a government agency with a corporate personality separate and distinct from the

government, because its community services are only incidental functions to the principal aim which is

irrigation of lands, thus, making it an agency with proprietary functions governed by Corporation Law

and is liable for actions of their employees.

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. Nos. L-55963 & 61045 February 27, 1991

SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, petitioners, vs. HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION ADMINISTRATION, respondents. NATIONAL IRRIGATION ADMINISTRATION, appellant, vs. SPOUSES JOSE FONTANILLA and VIRGINIA FONTANILLA, appellees. R E S O L U T I O N PARAS, J.:p

In its Motion for Reconsideration 1 of the Court's Second Division decision in G.R. No. 55963 and G.R.

No. 61045, the National Irrigation Administration (NIA, for brevity), through the Solicitor General,

maintains that, on the strength of Presidential Decree No. 552 (which amended certain provisions of

Republic Act 3601, the law creating the NIA) and the case of Angat River Irrigation System, et al. vs.

Angat River Workers' Union, et al., 102 Phil. 790 "the NIA does not perform solely and primarily

proprietary functions but is an agency of the government tasked with governmental functions, and is

therefore not liable for the tortious act of its driver Hugo Garcia, who was not its special agent."

Although the majority opinion in the cited case of Angat System declares that the Angat System (like the

NIA) exercised a governmental function because the nature of the powers and functions of said agency

does not show that it was intended to "bring to the Government any special corporate benefit or

pecuniary profit," there is a strong dissenting opinion penned by then Associate Justice and later Chief

Justice Roberto Concepcion and concurred in by then Associate Justice J.B.L. Reyes which held the

contrary view that the Angat River System is a government entity exercising proprietary functions. To

buttress said stand, the former Chief Justice cited some authorities which will be useful in the proper

resolution of this case.

Quoting from said dissenting opinion which cited McQuillin's The Law of Municipal Corporations, 3rd

ed., Vol. 18, pp. 423424:

In undertaking to supply water at price, municipality is not performing governmental function but is

engaged in trade, and is liable first as private company would be for any negligence in laying out of its

pipes, in keeping them in repair, or in furnishing potable water through them. Harvard Furniture Co., Inc.

vs. City of Cambridge, 320 Mass. 227, 68 N.E. (2d) 684.

Municipality in contracting to provide water supply acts under its proprietary power and not under its

legislative, public or governmental powers. Farmers' State Bank vs. Conrad, 100 Mont. 415,47 P. (2d)

853.

In this connection, the opinion is that irrigation districts in the United States are basically identical to our

irrigation systems under Act No. 2152. Because of such similarity, it is found appropriate to consider

certain doctrines from American jurisprudence, which are as follows, to wit:

An irrigation district is a public quasi corporation, organized, however, to conduct a business for the

private benefit of the owners of land within its limits. They are members of the corporation, control its

affairs, and alone are benefited by its operations. It is, in the administration of its business, the owner of

its system in a proprietary rather than a public capacity, and must assume and bear the burdens of

proprietary ownership. (Nampa vs. Nampa & M. Irrig. Dist. 19 Idaho, 779,115 Pac. 979)

. . . the plaintiff sought damages for injuries to crops on his land during 1923, 1924, 1925, and 1926,

caused by water seeping, percolating, and escaping from the defendant's canal. The defendant

contended that irrigation districts were agencies of the state, and were, therefore, not liable for the

negligent construction or operation of their canals or ditches. The court, after a careful review of the

authorities defining an irrigation district, conceded that such a quasi public corporation possessed some

governmental powers and exercised some governmental functions, but held that the construction and

operation of its irrigation canals and ditches was a proprietary rather than a governmental function, and

hence the district was responsible in damages for the negligent construction or operation of its canal

system. (69 A.L.R., p. 1233)

It may not be amiss to state at this point that the functions of government have been classified into

governmental or constituent and proprietary or ministrant. The former involves the exercise of

sovereignty and considered as compulsory; the latter connotes merely the exercise of proprietary

functions and thus considered as optional. The Solicitor General argues that the reasons presented by

P.D. 552 for the existence of the NIA (the WHEREAS clauses of said decree) indubitably reveal that the

responsibility vested in said agency concerns public welfare and public benefit, and is therefore an

exercise of sovereignty. On the contrary, We agree with the former Chief Justice Concepcion in saying

that the same purpose such as public benefit and public welfare may be found in the operation of

certain enterprises (those engaged in the supply of electric power, or in supplying telegraphic,

telephonic, and radio communication, or in the production and distribution of prime necessities, etc.)

yet it is certain that the functions performed by such enterprises are basically proprietary in nature.

Thus, as held in Holderbaum vs. Hidalgo County Water Improvement District (297 S.W. 865, aff'd in 11

S.W. [2d] 506) — cited in the dissenting opinion by Justice Concepcion:

. . . Primarily, a water improvement district is in no better position than a city is when exercising its

purely local powers and duties. Its general purposes are not essentially public in their nature, but are

only incidentally so; those purposes may be likened to those of a city which is operating a waterworks

system, or an irrigation system. . . . A water improvement district can do nothing, it has and furnishes no

facilities, for the administration of the sovereign government. Its officers have no power or authority to

exercise any of the functions of the general government, or to enforce any of the laws of the state or

any of its other subdivisions, or collect taxes other than those assessed by the district. They have no

more power or authority than that of the officers of a private corporation organized for like purposes. As

a practical matter, the primary objects and purposes of such district are of a purely local nature, for the

district is created and operated for the sole benefit of its own members, and an analysis of those objects

and purposes discloses that they directly benefit only the landowners who reside within and whose

lands form a part of the district, to the exclusion of all other residents therein. It is true, of course, that

the state and the general public are greatly benefited by the proper operation of the district, and to that

extent its objects and accomplishments are public in their nature, but this characteristic is only

incidental to the primary and chief object of the corporation, which is the irrigation of lands forming a

part of the district. It is obvious, then, that the purposes and duties of such districts do not come within

the definition of public rights, purposes, and duties which would entitle the district to the exemption

raised by the common law as a protection to corporations having a purely public purpose and

performing essentially public duties.

Of equal importance is the case of National Waterworks and Sewerage Authority (NAWASA) vs. NWSA

Consolidated Unions, 11 SCRA 766, which propounds the thesis that "the NAWASA is not an agency

performing governmental functions; rather it performs proprietary functions . . . ." The functions of

providing water supply and sewerage service are regarded as mere optional functions of government

even though the service rendered caters to the community as a whole and the goal is for the general

interest of society. The business of furnishing water supply and sewerage service, as held in the case of

Metropolitan Water District vs. Court of Industrial Relations, et al., 91 Phil. 840, "may for all practical

purposes be likened to an industry engaged in by coal companies, gas companies, power plants, ice

plants, and the like." Withal, it has been enunciated that "although the State may regulate the service

and rates of water plants owned and operated by municipalities, such property is not employed for

governmental purposes and in the ownership and operation thereof the municipality acts in its

proprietary capacity, free from legislative interference." (1 McQuillin, p. 683)

Like the NAWASA, the National Irrigation Administration was not created for purposes of local

government. While it may be true that the NIA was essentially a service agency of the government

aimed at promoting public interest and public welfare, such fact does not make the NIA essentially and

purely a "government-function" corporation. NIA was created for the purpose of "constructing,

improving, rehabilitating, and administering all national irrigation systems in the Philippines, including all

communal and pump irrigation projects." Certainly, the state and the community as a whole are largely

benefited by the services the agency renders, but these functions are only incidental to the principal aim

of the agency, which is the irrigation of lands.

We must not lose sight of the fact that the NIA is a government agency invested with a corporate

personality separate and distinct from the government, thus is governed by the Corporation Law.

Section 1 of Republic Act No. 3601 provides:

Sec. 1. Name and Domicile — A body corporate is hereby created which shall be known as the National

Irrigation Administration. . . . which shall be organized immediately after the approval of this Act. It shall

have its principal seat of business in the City of Manila and shall have representatives in all provinces, for

the proper conduct of its business. (Emphasis for emphasis).

Besides, Section 2, subsection b of P.D. 552 provides that:

(b) To charge and collect from the beneficiaries of the water from all irrigation systems constructed

by or under its administration, such fees or administration charges as may be necessary to cover the

cost of operation, maintenance and insurance, and to recover the cost of construction within a

reasonable period of time to the extent consistent with government policy; to recover funds or portions

thereof expended for the construction and/or rehabilitation of communal irrigation systems which funds

shall accrue to a special fund for irrigation development under section 2 hereof;

Unpaid irrigation fees or administration charges shall be preferred liens first, upon the land benefited,

and then on the crops raised thereon, which liens shall have preference over all other liens except for

taxes on the land, and such preferred liens shall not be removed until all fees or administration charges

are paid or the property is levied upon and sold by the National Irrigation Administration for the

satisfaction thereof. . . .

The same section also provides that NIA may sue and be sued in court. Thus,

b) . . . Judicial actions for the collection of unpaid irrigation fees or charges, drainage fees or other

charges which the National Irrigation Administration is authorized to impose and collect, shall

henceforth be governed by the provisions of the Rules of Court of the Philippines for similar actions, the

provisions of other laws to the contrary notwithstanding.

All actions for the recovery of compensation and damages against the National Irrigation Administration

under paragraphs (1), (2), and (3) hereof, shall be filed with a competent court within five (5) years from

the date of entry of the land or destruction of the improvements or crops, after which period, the right

of possession and/or ownership of the National Irrigation Administration shall be considered vested and

absolute. All other actions for the recovery of compensation and damages to private property and

improvements occasioned by the construction, operation and maintenance of irrigation facilities and

other hydraulic structures under the administration of the National Irrigation Administration, which

have accrued ten (10) or more years prior to the approval of this decree are deemed to have prescribed

and are barred forever.

It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of Directors.

To quote Section 2, subsection (f):

(f) . . . and to transact such business, as are directly or indirectly necessary, incidental or conducive

to the attainment of the above powers and objectives, including the power to establish and maintain

subsidiaries, and in general, to exercise all the powers of a corporation under the Corporation Law,

insofar as they are not inconsistent with the provisions of this Act. (Emphasis supplied).

On the basis of the foregoing considerations, We conclude that the National Irrigation Administration is

a government agency with a juridical personality separate and distinct from the government. It is not a

mere agency of the government but a corporate body performing proprietary functions. Therefore, it

may be held liable for the damages caused by the negligent act of its driver who was not its special

agent.

ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITH FINALITY. The

decision of this Court in G.R. No. 55963 and G.R. No. 61045 dated December 1, 1989 is hereby

AFFIRMED.

Gancayco, Bidin, Sarmiento, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Gutierrez, Jr., Fernan, C.J. and Melencio-Herrera, JJ., concur in the result.

, J., concur in the result and in Mr. Justice Feliciano's concurrence.

Separate Opinions

FELICIANO, J., concurring:

I agree with the result reached by my distinguished brother in the Court, Mr. Justice Edgardo L. Paras,

both in the Decision of the Court's Second Division dated 1 December 1989 (179 SCRA 685 [1989]) and

in the present Resolution on the motion for reconsideration, which has been referred to the Court En

Banc.

I agree, in other words, that the National Irrigation Administration (NIA) is liable for the acts of its

employee Hugo Garcia which resulted in injury to the spouses Jose Fontanilla and Virginia Fontanilla.

However, I reach this result through a slightly different route which is traced below.

In the original decision of the Court's Second Division, it is stated that:

Certain functions and activities, which can be performed only by the Government, are more or less

generally agreed to be "governmental" in character, and so the State is immune from tort liability. On

the other hand, a service which night as well be provided by a private corporation, and particularly when

it collects revenues from it, the function is considered a "proprietary" one, as to which there may be

liability for the torts of agents within the scope of their employment.

The original Decision and the Resolution on the motion for reconsideration hold that the NIA is "an

agency of the government exercising proprietary functions."

I would respectfully submit that the liability of an agency or instrumentality of the Government for torts

of its employees under Article 2180, 6th paragraph, of the Civil Code is not contingent upon the

technical characterization of the functions or activities carried out by that agency or instrumentality as

"governmental," on the one hand, or "proprietary," upon the other.

In the first place, it is merely commonplace to note that governments in our day and age do not restrict

themselves to the original basic and primitive functions of repelling invasion by a foreign enemy,

maintaining peace and order in society and protecting the physical integrity or the food supplies of its

citizens or inhabitants, but instead assumed and carry out all kinds of activities which they may

determine to redound to the general interest and benefit of the population. Thus, the classical laissez-

faire concept of a state, which prevailed during the 19th century, has today been replaced by the

concept of the welfare state. Moreover, activities which in other states more economically advanced

than our own have been undertaken by private enterprise, are here still being carried out by the

Government or, more generally, the public sector in view of the inadequacy of private capital and

private entrepreneurial spirit.

Secondly, under Section 2(l) of Article IX of the Constitution, whether or not a government owned or

controlled corporation or entity forms part of the Government and is embraced within the civil service

depends, not upon the "governmental," as distinguished from "proprietary," nature of the activities

performed by such entity or corporation, but rather upon whether or not the corporation or entity is

possessed of an "original charter." Thus, it appears to me that the framers of the 1987 Constitution had

given up the notion of trying to distinguish between "governmental" and "proprietary" functions for

purposes of determining whether employees of a particular agency or instrumentality should be

governed by the Civil Service Law and Regulations or, alternatively, by the Labor Code and its

Implementing Regulations administered by the National Labor Relations Commission and the

Department of Labor and Employment.

Article 2180 of the Civil Code provides in part as follows:

Employers shall be liable for the damage caused by their employees and household helpers acting within

the scope of their assigned tasks, even though the former are not engaged in any business or entity.

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.

My basic submission that the term "State" as used above properly refers to the "Government of the

Republic of the Philippines." This latter term is defined in Section 2 of the Revised Administrative Code

of 1987 in the following manner:

The Government of the Republic of the Philippines refers to the corporate governmental entity through

which the functions of government are exercised throughout the Philippines, including save as the

contrary appears from the context, the various arms through which political authority is made effective

in the Philippines, whether pertaining to the autonomous regions, the provincial, city, municipal or

barangay subdivisions or other forms of local government. (Emphasis supplied)

In other words, the term "State" as used in Article 2180 of the Civil Code refers to that juridical person

that is constituted b the Government of the Republic of the Philippines and logically does not include

agencies, instrumentalities or other entities which their enabling laws have invested with juridical

personality separate and distinct from that of the Republic of the Philippines.

It should be noted in this connection, that in Merritt v. Government of the Philippine Islands (34 Phil.

311 [1960]), the Court said:

It is therefore evident that the State (the Government of the Philippine Islands) is only liable, according

to the above quoted decisions of the Supreme Court of Spain, for acts of its agents, officers and

employees when they act as special agents within the meaning of paragraph 5 of Article 1903 [of the

Civil Code of Spain of 1889] and that the chauffeur of the ambulance of the General Hospital was not

such an agent. (Emphasis supplied; parentheses in the original; 34 Phil. at 323)

Clearly, Mr. Justice Trent considered "the State" and "the Government of the Philippine Islands" as

equivalent terms. The decision of the Supreme Court of Spain dated 7 January 1898 which the Court in

Merritt cited, read in part as follows:

That the obligation to indemnify for damages, which a third person causes to another by his fault or

negligence is based, as is evidenced by the same Law 3, title 15, Partida 7, on that the person obligated,

by his own fault or negligence, takes part in the act or omission of the third party who caused the

damage. It follows therefrom that the State, by virtue of such provisions of law, is not responsible for

the damages suffered by private individual in consequence of acts performed by its employees in the

discharge of the functions pertaining to their office, because neither fault nor even negligence can be

presumed on the part of the State in the organization of branches of the public service and in the

appointment of its agents; on the contrary, we must presuppose all foresight humanly possible on its

part in order that each branch of service serves the general weal and that of private persons interested

in its operation. Between these latter and the State, therefore, no relations of a Private nature governed

by the civil law can arise except in a case where the state acts as a [juridical] person capable of acquiring

rights and contracting obligation (Emphases and brackets supplied)

The term "juridical" person was translated (by Mr. Justice Trent?) as "judicial" person. This appears plain

error for the judgment of 7 January 1898 in fact read:

. . . entre los cuales y el Estado, por tanto, no pueden surgir relaciones de orden privado regidas por el

derecho civil, salvo el caso de que el mismo Estado obre como persona juridica capaz de adquirir

derechos y contraer obligaciones:

(Emphasis supplied; 83 Jurisprudencia Civil 36 [1898])

Thus, the decision of the Supreme Court of Spain itself recognized that between private persons and the

State, relations of a private nature governed by the Civil Code can arise where the State acts as or

through the medium of a separate juridical person that is capable of acquiring lights and entering into

obligations.

In the present case, there is no question that the NIA has juridical personality separate and distinct from

that of the Government of the Republic of the Philippines which owns all NIA's capital and assets. In

other words, the NIA is not part of the "State" or of the "Government of the Republic of the Philippines";

it follows, I respectfully submit, that the NIA should not be regarded as part of the State for purposes of

application of Article 2180 of the Civil Code.

What I have outlined above is in fact very close to the position taken by Mr. Justice Paras in the

Resolution on the motion for reconsideration. For he has rightly stressed that the NIA has clearly been

invested with a distinct legal personality and thus with capacity to sue and be sued. Judicial actions may

be brought by the NIA for the collection of unpaid irrigation fees, drainage fees or other charges which

the NIA is authorized to impose and collect, under the provisions of the Rules of Court. Correlatively,

actions against the NIA for the recovery of compensation and damages are expressly allowed and

prescribe in either five (5) or ten (10) years depending upon the subject matter thereof. The State itself

has determined, in other words, that the NIA shall not be covered by the general immunity from suit

without its consent pertaining to the State.

Finally, the Resolution underscores the fact that under Section 2(f) of the NIA charter, the NIA is

generally authorized "to exercise all the powers of a corporation under the Corporation Law, insofar as

they are not inconsistent with the provisions of [the NIA charter]." Since the NIA has been vested with

an the powers of a corporate person, it seems only reasonable to believe that it is at the same time

subjected to all the ordinary liabilities of a corporate person: one of those liabilities is the vicarious

liability of an employer under Article 2180 of the Civil Code, 6th paragraph, for injurious acts done by its

employees within the scope of their assigned tasks.

I suggest then that the investing of an agency or instrumentality of the Government with separate

juridical personality is not a matter of "form" as suggested by my equally distinguished brother in the

Court, Mr. Justice Padilla, in his dissenting opinion. The effect of the foregoing provisions of its charter

may be seen to be clearly a matter of "substance": to render the NIA both suable and liable on the same

causes of action which may be asserted against any corporate entity that is a separate juridical person.

It seems also relevant to point out that the Philippine General Hospital (PGH), the agency or

instrumentality involved in the Merritt case, did not (in contrast with the NIA) have legal personality

separate and distinct from that of the Philippine Government at the time that Merritt was decided. The

PGH was established under Act No. 1688 of the Philippine Commission as a division of the Bureau of

Health, a non-incorporated entity. Later, it was removed from the administrative jurisdiction of the

Bureau of Health and made into an independent bureau under the supervision of the Department of the

Interior. Still later, the PGH was placed under the Department of Instruction and subsequently, under

the Office of the President. In 1947, by virtue of Executive Order No. 94, the PGH was made a part of the

University of the Philippines, itself a separate corporate entity. Clearly, therefore, at the time Merritt

was decided, the PGH was part and parcel of the Government of the Republic of the Philippines as

defined by the Revised Administrative Code of 1917.

For all the foregoing, I vote to DENY the motion for reconsideration and to AFFIRM the Decision dated 1

December 1989 in G.R. Nos. 55963 and 61045.

Narvasa and Cruz, JJ., concur.

PADILLA, J., dissenting:

On 1 December 1989, this Court, through its Second Division, rendered a decision declaring petitioner

National Irrigation Administration (NIA, for brevity) a government agency performing proprietary

functions. Like an ordinary employer, NIA was held liable for the injuries, resulting in death, of Francisco

Fontanilla, caused by the fault and/or negligence of NIA's driver employee Hugo Garcia; and NIA was

ordered to pay petitioner spouses Fontanilla, the victim's parents, the amounts of P12,000.00 for the

death of the victim; P3,389.00 for hospitalization and burial expenses; P30,000.00 as moral damages;

P8,000.00 as exemplary damages, and attorney's fees of 20% of the total award.

Assailing the said decision of this Court, NIA filed the present Motion for Reconsideration, alleging that

NIA does not perform solely or primarily proprietary functions but is an agency of the government

tasked with governmental functions; thus, it may not be held liable for damages for injuries caused by its

employee to a third person. Citing PD 552, NIA argues that its functions and responsibilities directly

concern public benefit and public welfare.

To start with, NIA is an agency of the government with an original charter. 1 Section 1 of Republic Act

3601 provides:

Sec. 1. Name and domicile. –– A body corporate is hereby created which shall be known as the National

Irrigation Administration, hereinafter called the NIA for short, which shall be organized immediately

after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall

have representatives in all provinces for the proper conduct of its business.

NIA's said charter confers upon it a separate juridical personality to exercise all the powers of a

corporation under the Corporation Law, insofar as they are not inconsistent with said charter. 2

Under PD 552 amending NIA's original charter, it is made clear that said agency was created primarily for

the purpose of undertaking integrated irrigation projects, by the construction of multiple-purpose water

resource projects to increase agricultural production for the financial upliftment of the people. In

relation to its purpose, NIA has the power and authority to undertake concomitant projects, such as,

flood control, drainage, land reclamation, hydraulic power development, domestic water supply, road or

highway construction, reforestation and projects to maintain ecological balance, in coordination with

other agencies concerned. Thus —

WHEREAS, the enunciation policy is for a comprehensive development, utilization and conservation of

water resources of the Philippines, and in pursuit of its policy, one of the primary objectives of the

National Irrigation Administration is to effectuate an economic means of achieving the optimal and

diversified utilization and control of water by undertaking integrated litigation projects.

WHEREAS, the National Irrigation Administration assumes as its primary responsibility, the

implementation of the irrigation integrated program of the government and the attainment of the

"Irrigation Age", as envisioned under Republic Act No. 3601;

WHEREAS, an effective means of implementing multiple-purpose projects in line with program-oriented

and comprehensive water resources development necessitates broader powers and authority of the NIA

to undertake concomitant projects such as flood control, drainage, land reclamation, hydraulic power

development, domestic water supply, road or highway construction, reforestation, and projects to

maintain ecological balance, in coordination with the agencies concerned;

WHEREAS, the construction of multiple-purpose water resources projects involves substantial

investment of government funds to increase agricultural production for the financial upliftment of the

People for them to be able to assume and comply with their obligations and responsibilities to the

government.

NIA is thus maintained and operated by the government in the performance of its governmental

function of providing the Filipino people, particularly, the farmers nationwide, improved irrigation

systems to increase the country's agricultural production. Only the government has the capacity and

facilities to successfully undertake a project or venture of such magnitude. That the NIA is empowered

to charge minimal fees from all the beneficiaries of the irrigation systems that it establishes and

operates, does not change the nature of the function or purpose for which it was created. The fees that

are collected by NIA are used to cover the cost of operation, maintenance, insurance, cost of

construction, and the rehabilitation of irrigation systems. 3 Such monetary charges do not constitute

monetary gain or profit to NIA, but are merely reimbursements of the operational cost of the agency's

projects.

It cannot be denied that public service is the thrust in the creation of NIA in contrast to a business

venture or proprietary enterprise for monetary gain. That the NIA is also empowered to enter into

transactions in order to acquire real and personal properties, appurtenant rights, easements, privileges

in the development of its projects 4 and enter into other business transactions, does not mean that it

performs proprietary functions, for it is expressly provided in its charter that the business transactions it

may enter into are only those which are directly or indirectly necessary, incidental or conducive to the

attain-judgment of its purposes and objectives. 5

Furthermore, the fact that its charter treats the NIA as incorporated under the Corporation Law, and

confers upon it a separate juridical personality, is not the test in determining whether it is performing a

governmental or proprietary function. The spirit, intent or purpose behind its creation determines its

true character. It has been held that were the nature of the duties imposed on an agency and performed

by it does not reveal that it was intended to bring any special corporate benefit or pecuniary profit to

the government, said agency is deemed to be exercising a governmental function. 6

After having established that the NIA is a government agency, with an original charter, possessed of

juridical personality under the Corporation Law, and performing governmental functions, it is equally

important to determine whether (1) the sovereign immunity of the state from suit is enjoyed, or has

been waived by NIA and (2) the NIA is liable for damages arising from tort committed by its employees.

For incorporated agencies of the government, the test of its suability is found in its charter. The simple

rule is that it is suable if its charter says so, and this is true regardless of the functions it is performing. 7

The charter of the NIA provides that it may sue and be sued, thus, consent of the state for NIA to be

sued has been given, 8 so that the rule, on immunity from suit normally extended to government

agencies performing governmental functions is no longer available to NIA. By waiving that immunity

from suit in its charter, it would appear that NIA has opened itself to suits based on causes of action

arising from law, contracts, quasi-contracts, delicts, and even quasi-delicts.

But to say that NIA has opened itself to suit is one thing; to say that it is liable for damages arising from

tort committed by its employees, is still another thing.

As discussed in the now assailed decision, pursuant to the provisions of substantive law on quasi-delict,

whoever by his act or omission causes damage to another, there being fault or negligence, is obliged to

pay for the damage caused. 9 The obligation imposed by the foregoing rule is demandable not only for

one's own acts or omissions, but also for those of persons for whom one is responsible, such that an

employer is held liable for damages caused by its employees who were acting within the scope of their

assigned tasks. 10

But the state or a government agency performing governmental functions may be held liable for tort

committed by its employees only when it acts through a special agent. 11

This is not the first time this Court is confronted with a situation akin to the one at bar. In Merritt vs.

Government of the Phil. Islands, 12 the plaintiff was hit by an ambulance of the Philippine General

Hospital, while operated by its regular driver. Since the Philippine government was immune from suit,

Act No. 2457 was approved by the Philippine legislature which authorized Merritt to sue the Philippine

government in the CFI in order to fix the responsibility for the collision and to determine the amount or

extent of the damages.

In due course, it was determined that the ambulance operated by the General Hospital's regular driver

was responsible for the mishap. The damages sustained by Merritt as a result of the accident was

likewise quantified by the trial court and ultimately increased by the Supreme Court.

But then the crucial question remained thus —

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it also

concede its liability to the plaintiff? If only the former, then it cannot be held that no Act created any

new cause of action in favor of the plaintiff or extended the defendant's liability to any case not

previously recognized.

The Court answered its own query thus —

In the United States the rule that the state is not liable for the torts committed by its officers or agents

whom it employs, except when expressly made so by legislative enactment, is well settled. "The

Government," says Justice Story, "does not undertake to guarantee to any person the fidelity of the

officers or agents whom it employs, since that would involve it in all its operations in endless

embarrassments, difficulties and losses, which would be subversive of the public interest. (Claussen vs.

City of Luverne 103 Minn 491 citing U.S. vs. Kirkpatrick 9 Wheat, 720; 6 L.Ed., 199; and Beers vs. State,

20 How., 527; 15 L.Ed., 991.)

. . . we will now examine the substantive law touching the defendant's liability for the negligent acts of

its officers, agents, and employees. Paragraph 5 of article 1903 of the Civil Code reads:

The state is liable in this sense when it acts through a special agent, but not when the damage should

have been caused by the official to whom properly it pertained to do the act performed, in which case

the provisions of the preceding article shall be applicable.

The Supreme Court of Spain in defining the scope of this paragraph said:

That the obligation to indemnify for damages which a third person causes to another by his fault or

negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on that the person obligated,

by his own fault or negligence, takes part in the act or omission of the third party who caused the

damage. It follows therefrom that the state, by virtue of such provisions of law, is not responsible for the

damages suffered by private individuals in consequence of acts performed by its employees in the

discharge of the functions pertaining to their office, because neither fault nor even negligence can be

presumed on the part of the state organization of branches of the public service and in the appointment

of its agents; on the contrary, we must presuppose all foresight humanly possible on its part in order

that each branch of service serves the general weal and that of private persons interested in its

operation. Between these latter and the state, therefore, no relations of a private nature governed by

the civil law can arise except in a case where the state acts as a judicial person capable of acquiring

rights and contracting obligations. (Supreme Court of Spain, January 7, 1988; 83 Jur. Civ. 24.)

The dispositive part of the Merritt decision states:

For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance.

Whether the Government intends to make itself legally liable for the amount of damages above set

forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, by

legislative enactment and by appropriating sufficient funds therefor, we are not called upon to

determine. This matter rests solely with the Legislature and not with the courts.

This Court in the now assailed decision found that NIA was negligent in the supervision of its driver Hugo

Garcia who bumped petitioner-spouses' son, causing the death of the latter —

It should be emphasized that the accident happened along the Marikina National Road within the city

limits of San Jose City, an urban area. Considering the fact that the victim was thrown 50 meters away

from the point of impact, there is a strong indication that driver Garcia was driving at a high speed. This

is confirmed by the fact that the pick-up suffered substantial and heavy damage as above-described and

the fact that the NIA group was then "in a hurry to reach the campsite as early as possible", as shown by

their not stopping to find out what they bumped as would have been their normal and initial reaction.

Evidently, there was negligence in the supervision of the driver for the reason that they were traveling

at a high speed within the city limits and yet the supervisor of the group, Ely Salonga, failed to caution

and make the driver observe the proper and allowed speed limit within the City. Under the situation,

such negligence is further aggravated by their desire to reach their destination without even checking

whether or not the vehicle suffered damage from the object it bumped, thus showing imprudence and

recklessness on the part of both the driver and the supervisor in the group. 13

There is thus no doubt that NIA should be held responsible for the negligent acts of its regular driver,

resulting in the death of petitioner-spouses' son, except that under Article 2180, par. 6 in relation to

Article 2176 of the Civil Code, the state is not liable for tort save when it acts through a special agent,

and Hugo Garcia was not a special agent but NIA's regular driver.

Under the circumstances, and in order not to perpetuate a cruel injustice, I believe that this Court, while

granting the Solicitor General's motion for reconsideration, should recommend to Congress the

enactment of the appropriate legislation to compensate the petitioner-spouses, parents of the victim

Francisco Fontanilla, and to appropriate the necessary funds therefor, which could be equal to the

amount of damages already determined by this Court.

During the deliberations of this case, it was suggested that the term "State" as used in Article 2180, par.

6 of the Civil Code 14 could be limited to the State proper and not construed to include incorporated

entities even if performing governmental functions, such as the NIA. The intended effect of this

suggestion would be to render only the State, meaning, the government of the Republic of the

Philippines and its unincorporated agencies, such as government bureaus, exempt from liability for tort

committed by their officials and employees, except their special agents, but incorporated governmental

entities, even if performing governmental (as distinguished from business functions) will be liable for the

tort committed by their officials and employees.

I am of the considered opinion that the aforestated suggestion is untenable because it would lay stress

on form rather than substance. To me, the test should still be whether the governmental entity

performs governmental and, therefore, sovereign functions, regardless of whether it is incorporated or

not. If the government agency performs governmental and, therefore, sovereign functions, such as the

NIA, it is within the context of the term "State" as used in Art. 2180, par. 6 of the Civil Code and may not,

as a consequence, be held liable for tort committed by its officials and employees, except when they are

"special agents."

From the ruling of this Court in Manila Hotel Employees Asso. vs. Manila Hotel, 15 which states that by

"engaging in a particular business thru the instrumentality of a corporation, the government divests

itself pro hoc vice of its sovereign character, so as to render the corporation subject to the rules

governing private corporations," it can be reasonably inferred that it is the business character of the

corporation and not its corporate form which divests it of the immunity (and, similarly, exemption from

liability for tort committed by its employees) which its owner-sovereign enjoys. In the case of Prisco

vs.CIR, 16 the suability and liability under labor laws of the Price Stabilization Corporation was based not

really on its corporate form but on its abdication of sovereign prerogatives by its descent to the level of

an ordinary business operation. 17

In an advisory opinion of the Supreme Court of the State of Michigan with respect to the creation of the

state housing authority, it was held that a state agency intended to take measures to promote

construction of housing, performs a proper governmental function, and that the grant of corporate

powers to such an agency makes it a quasi-corporation only but it remains an instrumentality of the

state. Such quasi-corporations are described as bodies of citizens who have no personal nor private

interests to be subserved, but are simply required by the state to do some public work. The state merely

clothes one of its agencies or instrumentalities with such corporate powers. It is neither a private

corporation but a class of artificial entity. 18 The NIA qualifies as a quasi-corporation, retaining at all

times the attributes and prerogatives of the sovereign State which entirely owns and operates it.

FOR THE FOREGOING REASONS, I vote to GRANT the Motion for Reconsideration and to SET ASIDE the

decision of this Court dated 1 December 1989, subject to the recommendation to Congress as earlier

stated.

Separate Opinions

FELICIANO, J., concurring:

I agree with the result reached by my distinguished brother in the Court, Mr. Justice Edgardo L. Paras,

both in the Decision of the Court's Second Division dated 1 December 1989 (179 SCRA 685 [1989]) and

in the present Resolution on the motion for reconsideration, which has been referred to the Court En

Banc.

I agree, in other words, that the National Irrigation Administration (NIA) is liable for the acts of its

employee Hugo Garcia which resulted in injury to the spouses Jose Fontanilla and Virginia Fontanilla.

However, I reach this result through a slightly different route which is traced below.

In the original decision of the Court's Second Division, it is stated that:

Certain functions and activities, which can be performed only by the Government, are more or less

generally agreed to be "governmental" in character, and so the State is immune from tort liability. On

the other hand, a service which night as well be provided by a private corporation, and particularly when

it collects revenues from it, the function is considered a "proprietary" one, as to which there may be

liability for the torts of agents within the scope of their employment.

The original Decision and the Resolution on the motion for reconsideration hold that the NIA is "an

agency of the government exercising proprietary functions."

I would respectfully submit that the liability of an agency or instrumentality of the Government for torts

of its employees under Article 2180, 6th paragraph, of the Civil Code is not contingent upon the

technical characterization of the functions or activities carried out by that agency or instrumentality as

"governmental," on the one hand, or "proprietary," upon the other.

In the first place, it is merely commonplace to note that governments in our day and age do not restrict

themselves to the original basic and primitive functions of repelling invasion by a foreign enemy,

maintaining peace and order in society and protecting the physical integrity or the food supplies of its

citizens or inhabitants, but instead assumed and carry out all kinds of activities which they may

determine to redound to the general interest and benefit of the population. Thus, the classical laissez-

faire concept of a state, which prevailed during the 19th century, has today been replaced by the

concept of the welfare state. Moreover, activities which in other states more economically advanced

than our own have been undertaken by private enterprise, are here still being carried out by the

Government or, more generally, the public sector in view of the inadequacy of private capital and

private entrepreneurial spirit.

Secondly, under Section 2(l) of Article IX of the Constitution, whether or not a government owned or

controlled corporation or entity forms part of the Government and is embraced within the civil service

depends, not upon the "governmental," as distinguished from "proprietary," nature of the activities

performed by such entity or corporation, but rather upon whether or not the corporation or entity is

possessed of an "original charter." Thus, it appears to me that the framers of the 1987 Constitution had

given up the notion of trying to distinguish between "governmental" and "proprietary" functions for

purposes of determining whether employees of a particular agency or instrumentality should be

governed by the Civil Service Law and Regulations or, alternatively, by the Labor Code and its

Implementing Regulations administered by the National Labor Relations Commission and the

Department of Labor and Employment.

Article 2180 of the Civil Code provides in part as follows:

Employers shall be liable for the damage caused by their employees and household helpers acting within

the scope of their assigned tasks, even though the former are not engaged in any business or entity.

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.

(Emphasis supplied)

My basic submission that the term "State" as used above properly refers to the "Government of the

Republic of the Philippines." This latter term is defined in Section 2 of the Revised Administrative Code

of 1987 in the following manner:

The Government of the Republic of the Philippines refers to the corporate governmental entity through

which the functions of government are exercised throughout the Philippines, including save as the

contrary appears from the context, the various arms through which political authority is made effective

in the Philippines, whether pertaining to the autonomous regions, the provincial, city, municipal or

barangay subdivisions or other forms of local government. (Emphasis supplied)

In other words, the term "State" as used in Article 2180 of the Civil Code refers to that juridical person

that is constituted b the Government of the Republic of the Philippines and logically does not include

agencies, instrumentalities or other entities which their enabling laws have invested with juridical

personality separate and distinct from that of the Republic of the Philippines.

It should be noted in this connection, that in Merritt v. Government of the Philippine Islands (34 Phil.

311 [1960]), the Court said:

It is therefore evident that the State (the Government of the Philippine Islands) is only liable, according

to the above quoted decisions of the Supreme Court of Spain, for acts of its agents, officers and

employees when they act as special agents within the meaning of paragraph 5 of Article 1903 [of the

Civil Code of Spain of 1889] and that the chauffeur of the ambulance of the General Hospital was not

such an agent. (Emphasis supplied; parentheses in the original; 34 Phil. at 323)

Clearly, Mr. Justice Trent considered "the State" and "the Government of the Philippine Islands" as

equivalent terms. The decision of the Supreme Court of Spain dated 7 January 1898 which the Court in

Merritt cited, read in part as follows:

That the obligation to indemnify for damages, which a third person causes to another by his fault or

negligence is based, as is evidenced by the same Law 3, title 15, Partida 7, on that the person obligated,

by his own fault or negligence, takes part in the act or omission of the third party who caused the

damage. It follows therefrom that the State, by virtue of such provisions of law, is not responsible for

the damages suffered by private individual in consequence of acts performed by its employees in the

discharge of the functions pertaining to their office, because neither fault nor even negligence can be

presumed on the part of the State in the organization of branches of the public service and in the

appointment of its agents; on the contrary, we must presuppose all foresight humanly possible on its

part in order that each branch of service serves the general weal and that of private persons interested

in its operation. Between these latter and the State, therefore, no relations of a Private nature governed

by the civil law can arise except in a case where the state acts as a [juridical] person capable of acquiring

rights and contracting obligation (Emphases and brackets supplied)

The term "juridical" person was translated (by Mr. Justice Trent?) as "judicial" person. This appears plain

error for the judgment of 7 January 1898 in fact read:

. . . entre los cuales y el Estado, por tanto, no pueden surgir relaciones de orden privado regidas por el

derecho civil, salvo el caso de que el mismo Estado obre como persona juridica capaz de adquirir

derechos y contraer obligaciones:

(Emphasis supplied; 83 Jurisprudencia Civil 36 [1898])

Thus, the decision of the Supreme Court of Spain itself recognized that between private persons and the

State, relations of a private nature governed by the Civil Code can arise where the State acts as or

through the medium of a separate juridical person that is capable of acquiring lights and entering into

obligations.

In the present case, there is no question that the NIA has juridical personality separate and distinct from

that of the Government of the Republic of the Philippines which owns all NIA's capital and assets. In

other words, the NIA is not part of the "State" or of the "Government of the Republic of the Philippines";

it follows, I respectfully submit, that the NIA should not be regarded as part of the State for purposes of

application of Article 2180 of the Civil Code.

What I have outlined above is in fact very close to the position taken by Mr. Justice Paras in the

Resolution on the motion for reconsideration. For he has rightly stressed that the NIA has clearly been

invested with a distinct legal personality and thus with capacity to sue and be sued. Judicial actions may

be brought by the NIA for the collection of unpaid irrigation fees, drainage fees or other charges which

the NIA is authorized to impose and collect, under the provisions of the Rules of Court. Correlatively,

actions against the NIA for the recovery of compensation and damages are expressly allowed and

prescribe in either five (5) or ten (10) years depending upon the subject matter thereof. The State itself

has determined, in other words, that the NIA shall not be covered by the general immunity from suit

without its consent pertaining to the State.

Finally, the Resolution underscores the fact that under Section 2(f) of the NIA charter, the NIA is

generally authorized "to exercise all the powers of a corporation under the Corporation Law, insofar as

they are not inconsistent with the provisions of [the NIA charter]." Since the NIA has been vested with

an the powers of a corporate person, it seems only reasonable to believe that it is at the same time

subjected to all the ordinary liabilities of a corporate person: one of those liabilities is the vicarious

liability of an employer under Article 2180 of the Civil Code, 6th paragraph, for injurious acts done by its

employees within the scope of their assigned tasks.

I suggest then that the investing of an agency or instrumentality of the Government with separate

juridical personality is not a matter of "form" as suggested by my equally distinguished brother in the

Court, Mr. Justice Padilla, in his dissenting opinion. The effect of the foregoing provisions of its charter

may be seen to be clearly a matter of "substance": to render the NIA both suable and liable on the same

causes of action which may be asserted against any corporate entity that is a separate juridical person.

It seems also relevant to point out that the Philippine General Hospital (PGH), the agency or

instrumentality involved in the Merritt case, did not (in contrast with the NIA) have legal personality

separate and distinct from that of the Philippine Government at the time that Merritt was decided. The

PGH was established under Act No. 1688 of the Philippine Commission as a division of the Bureau of

Health, a non-incorporated entity. Later, it was removed from the administrative jurisdiction of the

Bureau of Health and made into an independent bureau under the supervision of the Department of the

Interior. Still later, the PGH was placed under the Department of Instruction and subsequently, under

the Office of the President. In 1947, by virtue of Executive Order No. 94, the PGH was made a part of the

University of the Philippines, itself a separate corporate entity. Clearly, therefore, at the time Merritt

was decided, the PGH was part and parcel of the Government of the Republic of the Philippines as

defined by the Revised Administrative Code of 1917.

For all the foregoing, I vote to DENY the motion for reconsideration and to AFFIRM the Decision dated 1

December 1989 in G.R. Nos. 55963 and 61045.

Narvasa and Cruz, JJ., concur.

PADILLA, J., dissenting:

On 1 December 1989, this Court, through its Second Division, rendered a decision declaring petitioner

National Irrigation Administration (NIA, for brevity) a government agency performing proprietary

functions. Like an ordinary employer, NIA was held liable for the injuries, resulting in death, of Francisco

Fontanilla, caused by the fault and/or negligence of NIA's driver employee Hugo Garcia; and NIA was

ordered to pay petitioner spouses Fontanilla, the victim's parents, the amounts of P12,000.00 for the

death of the victim; P3,389.00 for hospitalization and burial expenses; P30,000.00 as moral damages;

P8,000.00 as exemplary damages, and attorney's fees of 20% of the total award.

Assailing the said decision of this Court, NIA filed the present Motion for Reconsideration, alleging that

NIA does not perform solely or primarily proprietary functions but is an agency of the government

tasked with governmental functions; thus, it may not be held liable for damages for injuries caused by its

employee to a third person. Citing PD 552, NIA argues that its functions and responsibilities directly

concern public benefit and public welfare.

To start with, NIA is an agency of the government with an original charter. 1 Section 1 of Republic Act

3601 provides:

Sec. 1. Name and domicile. –– A body corporate is hereby created which shall be known as the National

Irrigation Administration, hereinafter called the NIA for short, which shall be organized immediately

after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall

have representatives in all provinces for the proper conduct of its business.

NIA's said charter confers upon it a separate juridical personality to exercise all the powers of a

corporation under the Corporation Law, insofar as they are not inconsistent with said charter. 2

Under PD 552 amending NIA's original charter, it is made clear that said agency was created primarily for

the purpose of undertaking integrated irrigation projects, by the construction of multiple-purpose water

resource projects to increase agricultural production for the financial upliftment of the people. In

relation to its purpose, NIA has the power and authority to undertake concomitant projects, such as,

flood control, drainage, land reclamation, hydraulic power development, domestic water supply, road or

highway construction, reforestation and projects to maintain ecological balance, in coordination with

other agencies concerned. Thus —

WHEREAS, the enunciation policy is for a comprehensive development, utilization and conservation of

water resources of the Philippines, and in pursuit of its policy, one of the primary objectives of the

National Irrigation Administration is to effectuate an economic means of achieving the optimal and

diversified utilization and control of water by undertaking integrated litigation projects.

WHEREAS, the National Irrigation Administration assumes as its primary responsibility, the

implementation of the irrigation integrated program of the government and the attainment of the

"Irrigation Age", as envisioned under Republic Act No. 3601;

WHEREAS, an effective means of implementing multiple-purpose projects in line with program-oriented

and comprehensive water resources development necessitates broader powers and authority of the NIA

to undertake concomitant projects such as flood control, drainage, land reclamation, hydraulic power

development, domestic water supply, road or highway construction, reforestation, and projects to

maintain ecological balance, in coordination with the agencies concerned;

WHEREAS, the construction of multiple-purpose water resources projects involves substantial

investment of government funds to increase agricultural production for the financial upliftment of the

People for them to be able to assume and comply with their obligations and responsibilities to the

government.

NIA is thus maintained and operated by the government in the performance of its governmental

function of providing the Filipino people, particularly, the farmers nationwide, improved irrigation

systems to increase the country's agricultural production. Only the government has the capacity and

facilities to successfully undertake a project or venture of such magnitude. That the NIA is empowered

to charge minimal fees from all the beneficiaries of the irrigation systems that it establishes and

operates, does not change the nature of the function or purpose for which it was created. The fees that

are collected by NIA are used to cover the cost of operation, maintenance, insurance, cost of

construction, and the rehabilitation of irrigation systems. 3 Such monetary charges do not constitute

monetary gain or profit to NIA, but are merely reimbursements of the operational cost of the agency's

projects.

It cannot be denied that public service is the thrust in the creation of NIA in contrast to a business

venture or proprietary enterprise for monetary gain. That the NIA is also empowered to enter into

transactions in order to acquire real and personal properties, appurtenant rights, easements, privileges

in the development of its projects 4 and enter into other business transactions, does not mean that it

performs proprietary functions, for it is expressly provided in its charter that the business transactions it

may enter

into are only those which are directly or indirectly necessary, incidental or conducive to the attain-

judgment of its purposes and objectives. 5

Furthermore, the fact that its charter treats the NIA as incorporated under the Corporation Law, and

confers upon it a separate juridical personality, is not the test in determining whether it is performing a

governmental or proprietary function. The spirit, intent or purpose behind its creation determines its

true character. It has been held that were the nature of the duties imposed on an agency and performed

by it does not reveal that it was intended to bring any special corporate benefit or pecuniary profit to

the government, said agency is deemed to be exercising a governmental function. 6

After having established that the NIA is a government agency, with an original charter, possessed of

juridical personality under the Corporation Law, and performing governmental functions, it is equally

important to determine whether (1) the sovereign immunity of the state from suit is enjoyed, or has

been waived by NIA and (2) the NIA is liable for damages arising from tort committed by its employees.

For incorporated agencies of the government, the test of its suability is found in its charter. The simple

rule is that it is suable if its charter says so, and this is true regardless of the functions it is performing. 7

The charter of the NIA provides that it may sue and be sued, thus, consent of the state for NIA to be

sued has been given, 8 so that the rule, on immunity from suit normally extended to government

agencies performing governmental functions is no longer available to NIA. By waiving that immunity

from suit in its charter, it would appear that NIA has opened itself to suits based on causes of action

arising from law, contracts, quasi-contracts, delicts, and even quasi-delicts.

But to say that NIA has opened itself to suit is one thing; to say that it is liable for damages arising from

tort committed by its employees, is still another thing.

As discussed in the now assailed decision, pursuant to the provisions of substantive law on quasi-delict,

whoever by his act or omission causes damage to another, there being fault or negligence, is obliged to

pay for the damage caused. 9 The obligation imposed by the foregoing rule is demandable not only for

one's own acts or omissions, but also for those of persons for whom one is responsible, such that an

employer is held liable for damages caused by its employees who were acting within the scope of their

assigned tasks. 10

But the state or a government agency performing governmental functions may be held liable for tort

committed by its employees only when it acts through a special agent. 11

This is not the first time this Court is confronted with a situation akin to the one at bar. In Merritt vs.

Government of the Phil. Islands, 12 the plaintiff was hit by an ambulance of the Philippine General

Hospital, while operated by its regular driver. Since the Philippine government was immune from suit,

Act No. 2457 was approved by the Philippine legislature which authorized Merritt to sue the Philippine

government in the CFI in order to fix the responsibility for the collision and to determine the amount or

extent of the damages.

In due course, it was determined that the ambulance operated by the General Hospital's regular driver

was responsible for the mishap. The damages sustained by Merritt as a result of the accident was

likewise quantified by the trial court and ultimately increased by the Supreme Court.

But then the crucial question remained thus —

Did the defendant, in enacting the above quoted Act, simply waive its immunity from suit or did it also

concede its liability to the plaintiff? If only the former, then it cannot be held that no Act created any

new cause of action in favor of the plaintiff or extended the defendant's liability to any case not

previously recognized.

The Court answered its own query thus —

In the United States the rule that the state is not liable for the torts committed by its officers or agents

whom it employs, except when expressly made so by legislative enactment, is well settled. "The

Government," says Justice Story, "does not undertake to guarantee to any person the fidelity of the

officers or agents whom it employs, since that would involve it in all its operations in endless

embarrassments, difficulties and losses, which would be subversive of the public interest. (Claussen vs.

City of Luverne 103 Minn 491 citing U.S. vs. Kirkpatrick 9 Wheat, 720; 6 L.Ed., 199; and Beers vs. State,

20 How., 527; 15 L.Ed., 991.)

. . . we will now examine the substantive law touching the defendant's liability for the negligent acts of

its officers, agents, and employees. Paragraph 5 of article 1903 of the Civil Code reads:

The state is liable in this sense when it acts through a special agent, but not when the damage should

have been caused by the official to whom properly it pertained to do the act performed, in which case

the provisions of the preceding article shall be applicable.

The Supreme Court of Spain in defining the scope of this paragraph said:

That the obligation to indemnify for damages which a third person causes to another by his fault or

negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on that the person obligated,

by his own fault or negligence, takes part in the act or omission of the third party who caused the

damage. It follows therefrom that the state, by virtue of such provisions of law, is not responsible for the

damages suffered by private individuals in consequence of acts performed by its employees in the

discharge of the functions pertaining to their office, because neither fault nor even negligence can be

presumed on the part of the state organization of branches of the public service and in the appointment

of its agents; on the contrary, we must presuppose all foresight humanly possible on its part in order

that each branch of service serves the general weal and that of private persons interested in its

operation. Between these latter and the state, therefore, no relations of a private nature governed by

the civil law can arise except in a case where the state acts as a judicial person capable of acquiring

rights and contracting obligations. (Supreme Court of Spain, January 7, 1988; 83 Jur. Civ. 24.)

The dispositive part of the Merritt decision states:

For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance.

Whether the Government intends to make itself legally liable for the amount of damages above set

forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, by

legislative enactment and by appropriating sufficient funds therefor, we are not called upon to

determine. This matter rests solely with the Legislature and not with the courts.

This Court in the now assailed decision found that NIA was negligent in the supervision of its driver Hugo

Garcia who bumped petitioner-spouses' son, causing the death of the latter —

It should be emphasized that the accident happened along the Marikina National Road within the city

limits of San Jose City, an urban area. Considering the fact that the victim was thrown 50 meters away

from the point of impact, there is a strong indication that driver Garcia was driving at a high speed. This

is confirmed by the fact that the pick-up suffered substantial and heavy damage as above-described and

the fact that the NIA group was then "in a hurry to reach the campsite as early as possible", as shown by

their not stopping to find out what they bumped as would have been their normal and initial reaction.

Evidently, there was negligence in the supervision of the driver for the reason that they were traveling

at a high speed within the city limits and yet the supervisor of the group, Ely Salonga, failed to caution

and make the driver observe the proper and allowed speed limit within the City. Under the situation,

such negligence is further aggravated by their desire to reach their destination without even checking

whether or not the vehicle suffered damage from the object it bumped, thus showing imprudence and

recklessness on the part of both the driver and the supervisor in the group. 13

There is thus no doubt that NIA should be held responsible for the negligent acts of its regular driver,

resulting in the death of petitioner-spouses' son, except that under Article 2180, par. 6 in relation to

Article 2176 of the Civil Code, the state is not liable for tort save when it acts through a special agent,

and Hugo Garcia was not a special agent but NIA's regular driver.

Under the circumstances, and in order not to perpetuate a cruel injustice, I believe that this Court, while

granting the Solicitor General's motion for reconsideration, should recommend to Congress the

enactment of the appropriate legislation to compensate the petitioner-spouses, parents of the victim

Francisco Fontanilla, and to appropriate the necessary funds therefor, which could be equal to the

amount of damages already determined by this Court.

During the deliberations of this case, it was suggested that the term "State" as used in Article 2180, par.

6 of the Civil Code 14 could be limited to the State proper and not construed to include incorporated

entities even if performing governmental functions, such as the NIA. The intended effect of this

suggestion would be to render only the State, meaning, the government of the Republic of the

Philippines and its unincorporated agencies, such as government bureaus, exempt from liability for tort

committed by their officials and employees, except their special agents, but incorporated governmental

entities, even if performing governmental (as distinguished from business functions) will be liable for the

tort committed by their officials and employees.

I am of the considered opinion that the aforestated suggestion is untenable because it would lay stress

on form rather than substance. To me, the test should still be whether the governmental entity

performs governmental and, therefore, sovereign functions, regardless of whether it is incorporated or

not. If the government agency performs governmental and, therefore, sovereign functions, such as the

NIA, it is within the context of the term "State" as used in Art. 2180, par. 6 of the Civil Code and may not,

as a consequence, be held liable for tort committed by its officials and employees, except when they are

"special agents."

From the ruling of this Court in Manila Hotel Employees Asso. vs. Manila Hotel, 15 which states that by

"engaging in a particular business thru the instrumentality of a corporation, the government divests

itself pro hoc vice of its sovereign character, so as to render the corporation subject to the rules

governing private corporations," it can be reasonably inferred that it is the business character of the

corporation and

not its corporate form which divests it of the immunity (and, similarly, exemption from liability for tort

committed by its employees) which its owner-sovereign enjoys. In the case of Prisco vs.

CIR, 16 the suability and liability under labor laws of the Price Stabilization Corporation was based not

really on its corporate form but on its abdication of sovereign prerogatives by its descent to the level of

an ordinary business operation. 17

In an advisory opinion of the Supreme Court of the State of Michigan with respect to the creation of the

state housing authority, it was held that a state agency intended to take measures to promote

construction of housing, performs a proper governmental function, and that the grant of corporate

powers to such an agency makes it a quasi-corporation only but it remains an instrumentality of the

state. Such quasi-corporations are described as bodies of citizens who have no personal nor private

interests to be subserved, but are simply required by the state to do some public work. The state merely

clothes one of its agencies or instrumentalities with such corporate powers. It is neither a private

corporation but a class of artificial entity. 18 The NIA qualifies as a quasi-corporation, retaining at all

times the attributes and prerogatives of the sovereign State which entirely owns and operates it.

FOR THE FOREGOING REASONS, I vote to GRANT the Motion for Reconsideration and to SET ASIDE the

decision of this Court dated 1 December 1989, subject to the recommendation to Congress as earlier

stated.

CASTILEX INDUSTRIAL CORP. vs. VASQUEZ JR.GR No. 132266 | December 21, 1999 |Davide Jr., C.J. |

Petition for Review onCertiorari of a Decision of the CAPetitioners:Castilex Industrial

Corp.Respondents:Vicente Vasquez Jr.,Luisa So Vasquez & Cebu Doctors’Hospital, Inc.

Facts:

On August 28, 1988, at around1:30 to 2 AM, Romeo So Vasquez wasdriving a Honda motorcycle around

FuenteOsmeña Rotunda. He was travellingcounter-clockwise, the normal flow of traffic, but without any

protective helmetor goggles. He was only carrying aStudent’s Permit to Drive.

Benjamin Abad, a ProductionManager of Castilex Industries Corp, abusiness engaged in the

manufacturingand selling of furniture, was then drivingthe company-owned Toyota Hi-Lux Pick-up.

Abad drove the said car out of theparking lot of Goldie’s Restaurant wherehe had some snacks after

workingovertime and had a chat with his friends.Instead of going around the OsmeñaRotunda, he made

a short cut against theflow of the traffic in proceeding to generalMaxilom St. or to Belvic St.

In the process, a collisionoccurred between the motorcycle and Toyota Hi-Luz Pick-up. Vasquez

sustainedsevere injuries as a result of the collision.

Abad stopped his vehicle andbrought Vasquez to the Southern islandsHospital and later to the Cebu

Doctor’sHospital.

On September 5, 1988, Vasquezdied at the Cebu Doctor’s Hospital. Abadsigned an acknowledgement of

Responsible party where he agreed to paywhatever hospital bills professional feesand other incidental

charges Vasquez mayincur.

A criminal case was filed againstAbad which was subsequently dismissedfor failure to prosecute.

The Spouses Vasquez institutedan action for damages against Abad andCastilex. Cebu Doctors’

Hospitalintervened to collect unpaid balance forthe medical expense given to RomeoVasquez.

TC: ordered Abad and Castilex topay jointly and severally the spouses andCebu Doctors’ Hospital

CA: affirmed the TC’s ruling butheld the liability of Castilex as vicariousand not solidary with Abad

Issue:

1.WON Castilex is vicariously liablewith Abad

2.WON Abad was performing actswithin the range of his employment

Ratio:

1. YES The phrase “even though theformer are not engaged in any business orindustry” found in the 5

thparagraph1 of Article 2180 should be interpreted to meanthat it is not necessary for the employer

tobe engaged in any business or industry tobe liable for the negligence of hisemployee who is acting

within the scope of his assigned task.

Distinctions between paragraph4 2 and 5

Paragraph 4Paragraph 5

owners andmanagers of anestablishment orenterpriseemployers ingeneral, whether ornot engaged in

anybusiness or industrycovers negligent actsof employeescommitted either inthe service of thebranches

or on theoccasion of theirfunctionsencompassesnegligent acts of employees actingwithin the scope of

their assigned taskexpansion of paragraph 4 in bothemployer coverageand acts included.negligent acts

of employees, whetheror not the employeris engaged in abusiness or industry,are covered so longas

they were actingwithin the scope of their assigned task,even thoughcommitted neither in

1 Employers shall be liable for the damages causedby their employees and household helpers

actingwithin the scope of their assigned tasks, even thoughthe former are not engaged in any business

orindustry.

2 The owners and managers of an establishment orenterprise are likewise responsible for

damagescaused by their employees in the service of thebranches in which the latter are employed or on

theoccasion of their functions.

ST. FRANCIS HIGH SCHOOL VS. CA

FACTS: Ferdinand Castillo, a freshman student at the St. Francis High School, wanted to join a school

picnic. His parents, respondents spouses Dr. Romulo Castillo and Lilia Cadiz Castillo, because of short

notice, did not allow their son to join but merely allowed him to bring food to the teachers for the

picnic, with the directive that he should go back home after doing so. However, because of persuasion

of the teachers, Ferdinand went on with them to the beach. During the picnic, one of the female

teachers was apparently drowning. Some of the students, including Ferdinand, came to her rescue, but

in the process, it was Ferdinand himself who drowned. He died. Respondent spouses filed a civil case

against petitioner and some of their teachers. Trial court found teachers liable but dismissed complaint

against the school.

ISSUE: W/N petitioner school and teachers are liable.

RULING: Petition granted.

RATIO: Before an employer may be held liable for the negligence of his employee, the act or omission

which caused damage must have occurred while an employee was in the performance of his assigned

tasks. In the case at bar, the teachers/petitioners were not in the actual performance of their assigned

tasks. What was held was a purely private affair, a picnic, which did not have permit from the school

since it was not a school sanctioned activity. Mere knowledge by petitioner/principal of the planning of

the picnic does not in any way consent to the holding of the same.

No negligence could be attributable to the petitioners-teachers to warrant the award of damages to the

respondents-spouses. The class adviser of the section where Ferdinand belonged, did her best and

exercised diligence of a good father of a family to prevent any untoward incident or damages to all the

students who joined the picnic.

Jose Amadora vs Court of Appeals

Civil Law – Torts and Damages – Article 2180 – Liability of Schools of Arts and Trades and Academic

Schools – Liability of Teachers and Heads of School

In April 1972, while the high school students of Colegio de San Jose-Recoletos were in the school

auditorium, a certain Pablito Daffon fired a gun. The stray bullet hit Alfredo Amadora. Alfredo died.

Daffon was convicted of reckless imprudence resulting in homicide. The parents of Alfredo sued the

school for damages under Article 2180 of the Civil Code because of the school’s negligence.

The trial court ruled in favor of Amadora. The trial court ruled that the principal, the dean of boys, as

well as the teacher-in-charge are all civilly liable. The school appealed as it averred that when the

incident happened, the school year has already ended. Amadora argued that even though the semester

has already ended, his son was there in school to complete a school requirement in his Physics subject.

The Court of Appeals ruled in favor of the school. The CA ruled that under the last paragraph of Article

2180, only schools of arts and trades (vocational schools) are liable not academic schools like Colegio de

San Jose-Recoletos.

ISSUE: Whether or not Colegio de San Jose-Recoletos, an academic school, is liable under Article 2180 of

the Civil Code for the tortuous act of its students.

HELD: Yes. The Supreme Court made a re-examination of the provision on the last paragraph of Article

2180 which provides:

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 Supreme Court said that it is time to update the interpretation of the above law due to the changing

times where there is hardly a distinction between schools of arts and trade and academic schools. That

being said, the Supreme Court ruled that ALL schools, academic or not, may be held liable under the said

provision of Article 2180.

The Supreme Court however clarified that the school, whether academic or not, should not be held

directly liable. Its liability is only subsidiary.

For non-academic schools, it would be the principal or head of school who should be directly liable for

the tortuous act of its students. This is because historically, in non-academic schools, the head of school

exercised a closer administration over their students than heads of academic schools. In short, they are

more hands on to their students.

For academic schools, it would be the teacher-in-charge who would be directly liable for the tortuous

act of the students and not the dean or the head of school.

The Supreme Court also ruled that such liability does not cease when the school year ends or when the

semester ends. Liability applies whenever the student is in the custody of the school authorities as long

as he is under the control and influence of the school and within its premises, whether the semester has

not yet begun or has already ended at the time of the happening of the incident. As long as it can be

shown that the student is in the school premises in pursuance of a legitimate student objective, in the

exercise of a legitimate student right, and even in the enjoyment of a legitimate student right, and even

in the enjoyment of a legitimate student privilege, the responsibility of the school authorities over the

student continues. Indeed, even if the student should be doing nothing more than relaxing in the

campus in the company of his classmates and friends and enjoying the ambience and atmosphere of the

school, he is still within the custody and subject to the discipline of the school authorities under the

provisions of Article 2180.

At any rate, the REMEDY of the teacher, to avoid direct liability, and for the school, to avoid subsidiary

liability, is to show proof that he, the teacher, exercised the necessary precautions to prevent the injury

complained of, and the school exercised the diligence of a bonus pater familias.

In this case however, the Physics teacher in charge was not properly named, and there was no sufficient

evidence presented to make the said teacher-in-charge liable. Absent the direct liability of the teachers

because of the foregoing reason, the school cannot be held subsidiarily liable too.

Federico Ylarde V. Edgardo Aquino (1988)

G.R. No. L-33722 July 29, 1988

Lessons Applicable: Good Father of a Family (Torts and Damages)

FACTS:

1962: Sergio Banez started burying huge stones which were remnants of the old school shop that was

destroyed in World War II because they were serious hazards to the schoolchildren

October 7, 1963: Edgardo Aquino gathered 18 of his male pupils, aged 10 to 11, after class dismissal and

ordered them to dig beside a one-ton concrete block in order to make a hole wherein the stone can be

buried.

The work was left unfinished.

October 8, 1963: Aquino called Reynaldo Alonso, Francisco Alcantara, Ismael Abaga and Novelito Ylarde

of the original 18 pupils to continue the digging

they dug until the excavation was 1 meter and 40 centimeters deep

Aquino alone continued digging while the pupils remained inside the pit throwing out the loose soil that

was brought about by the digging

When the depth was right enough to accommodate the concrete block, they got out of the hole

Aquino left the children to level the loose soil around the open hole while he went to see Banez who

was about 30 meters away to key to the school workroom where he could get some rope

A few minutes after Aquino left, Alonso, Alcantara and Ylarde, playfully jumped into the pit.

without any warning at all, Abaga jumped on top of the concrete block causing it to slide down towards

the opening.

Alonso and Alcantara were able to scramble out of the excavation on time

unfortunately for Ylarde, the concrete block caught him before he could get out, pinning him to the wall

in a standing position

Ylarde sustained the following injuries:

1. Contusion with hematoma, left inguinal region and suprapubic region.

2. Contusion with ecchymosis entire scrotal region.

3. Lacerated wound, left lateral aspect of penile skin with phimosis

4. Abrasion, gluteal region, bilateral.

5. Intraperitoneal and extrapertitoneal extravasation of blood and urine about 2 liters.

6. Fracture, simple, symphesis pubis

7. Ruptured (macerated) urinary bladder with body of bladder almost entirely separated from its neck.

3 days later, Novelito Ylarde died.

Ylarde's parents filed a suit for damages against both Aquino and Soriano, principal

lower court:

digging done by the pupils is in line with their course called Work Education

Aquino exercised the utmost diligence of a very cautious person

demise of Ylarde was due to his own reckless imprudence

CA: affirmed

ISSUE: W/N Aquino and Soriano should be held liable for negligence

HELD: YES. the petition GRANTED. Edagardo Aquino to pay petitioners the following:

(1) Indemnity for the death of Child Ylarde P30,000.00

(2) Exemplary damages 10,000.00

(3) Moral damages 20,000.00

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is

obliged to pay for the damage done. Such fault or negligence, if there is no pre- existing contractual

relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

Art. 2180.

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.

As regards the principal, We hold that he cannot be made responsible for the death of the child Ylarde,

he being the head of an academic school and not a school of arts and trades

Soriano did not give any instruction regarding the digging

GR: teachers shall be liable for the acts of their students

EX: where the school is technical in nature, in which case it is the head thereof who shall be answerable

Aquino acted with fault and gross negligence when he:

(1) failed to avail himself of services of adult manual laborers

(2) required the children to remain inside the pit even after they had finished digging, knowing that the

huge block was lying nearby and could be easily pushed or kicked aside by any pupil who by chance may

go to the perilous area

(3) ordered them to level the soil around the excavation when it was so apparent that the huge stone

was at the brink of falling

(4) went to a place where he would not be able to check on the children's safety

(5) left the children close to the excavation, an obviously attractive nuisance.

negligent act of Aquino in leaving his pupils in such a dangerous site has a direct causal connection to

the death of the child Ylarde

it was but natural for the children to play around

the child Ylarde would not have died were it not for the unsafe situation created by Aquino

the excavation should not be placed in the category of school gardening, planting trees, and the like as

these undertakings do not expose the children to any risk that could result in death or physical injuries

A reasonably prudent person would have foreseen that bringing children to an excavation site, and more

so, leaving them there all by themselves, may result in an accident. An ordinarily careful human being

would not assume that a simple warning "not to touch the stone" is sufficient to cast away all the

serious danger that a huge concrete block adjacent to an excavation would present to the children.

Moreover, a teacher who stands in loco parentis to his pupils would have made sure that the children

are protected from all harm in his company.

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION VS. CA Case Digest

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION VS. COURT OF APPEALS, HON. REGINA ORDOÑEZ-

BENITEZ, SEGUNDA R. BAUTISTA, and ARSENIA D. BAUTISTA,

February 4, 1992

FACTS: Carlitos Bautista was a third year student at the Philippine School of Business Administration.

Assailants, who were not members of the schools academic community, while in the premises of PSBA,

stabbed Bautista to death. This incident prompted his parents to file a suit against PSBA and its

corporate officers for damages due to their alleged negligence, recklessness and lack of security

precautions, means and methods before, during and after the attack on the victim.

The defendants filed a motion to dismiss, claiming that the compliant states no cause of action against

them based on quasi-delicts, as the said rule does not cover academic institutions. The trial court denied

the motion to dismiss. Their motion for reconsideration was likewise dismissed, and was affirmed by the

appellate court. Hence, the case was forwarded to the Supreme Court.

ISSUE: Whether or not PSBA is liable for the death of the student.

RULING: Because the circumstances of the present case evince a contractual relation between the PSBA

and Carlitos Bautista, the rules on quasi-delict do not really govern. A perusal of Article 2176 shows that

obligations arising from quasi-delicts or tort, also known as extra-contractual obligations, arise only

between parties not otherwise bound by contract, whether express or implied. However, this

impression has not prevented this Court from determining the existence of a tort even when there

obtains a contract.

Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule in in loco parentis.

Article 2180 provides that the damage should have been caused or inflicted by pupils or students of the

educational institution sought to be held liable for the acts of its pupils or students while in its custody.

However, this material situation does not exist in the present case for, as earlier indicated, the assailants

of Carlitos were not students of the PSBA, for whose acts the school could be made liable. But it does

not necessarily follow that PSBA is absolved form liability.

When an academic institution accepts students for enrollment, there is established a contract between

them, resulting in bilateral obligations which both parties is bound to comply with. For its part, the

school undertakes to provide the student with an education that would presumably suffice to equip him

with the necessary tools and skills to pursue higher education or a profession. This includes ensuring the

safety of the students while in the school premises. On the other hand, the student covenants to abide

by the school's academic requirements and observe its rules and regulations.

Failing on its contractual and implied duty to ensure the safety of their student, PSBA is therefore held

liable for his death.

Petition denied.

GENSON v ADARLE

FACTS Arbatin was the successful bidder in a public auction of junk and other unserviceable government

property in the Highway District Engineer’s Office of Roxas City. Arbatin then employed Adarle to help

him haul the junk. On a non-working day, when Adarle and Buensalido, the driver of the payloader, were

at the site continuing to gather the junk, a bucket from the payloader fell and injured Adarle to the point

of paralyzing his lower extremities. Adarle instituted an action against Arbatin, Buensalido, Marcelino

(Civil Engineer), and Genson (Highway District Engineer). RTC ruled in favor of Adarle. IAC modified the

previous ruling, absolving Marcelino from liability, and averring that the liability of Genson is based on

fault, by allowing Arbatin and his men to work on the premises on a non-working day, in contravention

of his office’s policy. Petitioner Genson then appealed the decision to the SC, stating that the facts upon

which the IAC declared that his liability is based on fault by allowing the men to work on a non-working

holiday is without basis. Furthermore, he contends that by filing a suit against him, Adarle is then filing a

suit against the Republic, which violates the non-suability of the State.

ISSUE Whether or not Genson should be held liable, personally or officially?

HELD NO. With regard to the non-suability contention, Adarle filed a suit against Genson personally, in

his capacity as the Highway District Engineer, and not the State or his office. As for the main issue, there

was no evidence to prove Genson’s presence when the accident occurred, nor was there any basis for

the lower courts to hold that Genson was at fault by authorizing Arbatin and his men to work on a non-

working day. It might even be proven that working on a Saturday for the specific purpose of hauling junk

would be the time when the most work can be done, as it has less traffic. The Master-Servant doctrine

in tort law cannot apply either, since despite the fact that Buensalido, Genson’s employee, was

“moonlighting” on a non-working holiday, Buensalido’s arrangement with Arbatin was purely private in

nature, and had nothing to do with his being employed under Genson. Thus, absent the showing of

malice, bad faith or gross negligence on the part of Genson, he cannot be held liable for the acts

committed by Buensalido and Arbatin.

St. Mary’s Academy vs. Carpetanos

GR No. 143363, February 6, 2002

FACTS:Herein petitioner, conducted an enrollment drive for the school year 1995-1996 They visited

schools from where prospective enrollees were studying. Sherwin Carpitanos joined the campaign.

Along with the other high school students, they rode a Mitsubishi jeep owned by Vivencio Villanueva on

their way to Larayan Elementary School. Such jeep was driven by James Daniel II, a 15 year old student

of the same school. It was alleged that he drove the jeep in a reckless manner which resulted for it to

turned turtle. Sherwin died due to this accident.

ISSUE: WON petitioner should be held liable for the damages.

HELD: CA held petitioner liable for the death of Sherwin under Article 218 and 219 of the Family Code

where it was pointed that they were negligent in allowing a minor to drive and not having a teacher

accompany the minor students in the jeep. However, for them to be held liable, the act or omission to

be considered negligent must be the proximate cause of the injury caused thus, negligence needs to

have a causal connection to the accident. It must be direct and natural sequence of events, unbroken by

any efficient intervening causes. The parents of the victim failed to show such negligence on the part of

the petitioner. The spouses Villanueva admitted that the immediate cause of the accident was not the

reckless driving of James but the detachment of the steering wheel guide of the jeep. Futhermore,

there was no evidence that petitioner allowed the minor to drive the jeep of Villanueva. The mechanical

defect was an event over which the school has no control hence they may not be held liable for the

death resulting from such accident.

The registered owner of any vehicle, even if not used for public service, would primarily be responsible

to the public or to 3rd persons for injuries caused while it is being driven on the road. It is not the

school, but the registered owner of the vehicle who shall be held responsible for damages for the death

of Sherwin. Case was remanded to the trial court for determination of the liability of the defendants

excluding herein petitioner.

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. L-31864 September 29, 1972 THE HOMEOWNERS ASSOCIATION OF EL DEPOSITO, BARRIO CORAZON DE JESUS, SAN JUAN, RIZAL,

represented by its President NAPOLEON VILORIA, PANTALEON PENARANDA, JULIAN PENARANDA, PILAR

DEL PILAR, MIGUEL POMPERADA, ESTER PORRAS, TEODULO ROBLANDO, PABLO RELATO, ABRAHAM

REMPULA, HUGO ROBETO, ASUNCION REYES, ERNESTO SALAZAR, FEDERICO SALAZAR, JUANITO

SALLEGUE, SAMONTE NESTOR, BEN SANTOS, ELEUTERIA SANTOS, DOMINGO SARMOY, CORA SASTRE,

TRANSFIGURACION SOMBE, PEDRO SUBONG, IGMEDIO TAMBONG, SALVADOR TERUEL, ALFREDO

TORRES, CELSO TORRES, ROQUE TUMAMPIL, TITA TUTANES, CATALINA UNANA, DIONISIA VIGIL,

ASUNCION VILLANUEVA, DELMO VILLANUEVA, JOSE VILORIA, JR., BENIGNO VIRAY, DOMINADOR

WINDECA, SALVADOR YULO, JOSUE DAGON, FELIPE TORRENTE, LEON LUCAS, JACINTO PASCUAL, and

THREE HUNDRED SIXTY ONE OTHER MEMBERS, THE HOMEOWNERS ASSOCIATION OF EL DEPOSITO,

BARRIO HALO HALO, SAN JUAN, RIZAL, represented by its President AQUILINO BELO, JUAN GARCIA,

GREGORIO GARCIA, PABLO REANO, DOMINADOR TIBAR, GERONIMO LAZARRAGA, and ONE HUNDRED

THIRTY OTHER MEMBERS, petitioners,

vs.

HON. GUARDSON LOOD, Judge of The Court of First Instance of Rizal, Branch VI, Pasig, Rizal, THE

MUNICIPALITY OF SAN JUAN, RIZAL, MUNICIPAL MAYOR OF SAN JUAN, MUNICIPAL COUNCIL OF SAN

JUAN, RIZAL, ENGINEERING DISTRICT OF RIZAL, ACTING THRU NICOLAS ALDANA, ENGINEER II, Pasig,

Rizal, respondents.

H. A. Jambora for petitioners.

Office of the Solicitor General for respondents.

PER CURIAM:p

Petitioners filed on April 15, 1970 this action for certiorari and prohibition with preliminary injunction to

set aside respondent court's questioned orders dated February 9, 1970 and March 30, 1970 denying

petitioners' motions for issuance of a writ of preliminary injunction to stay the demolition and removal

of their houses and structures on a parcel of public land in barrios Corazon de Jesus and Halo Halo in San

Juan, Rizal, (more popularly known as "El Deposito" from the Spanish times), pending final outcome of

Civil Case No. 11078 filed by them before respondent court.

Petitioners' action below was one for declaratory relief to declare as null and void as ex post facto

legislation, municipal ordinance No. 89, as amended, of respondent Municipality of San Juan, prohibiting

squatting on public property and providing a penalty therefor, under which ordinance, petitioners

claimed, respondents were summarily demolishing and removing their houses and improvements.

On April 20, 1970, upon issuance of summons requiring respondents to answer the petition, the Court

issued a temporary restraining order restraining respondents, until further orders, "from proceeding

with the summary destruction, removal and demolition of all other houses found in the premises of the

land in barrio Corazon de Jesus and barrio Halo Halo, San Juan, Rizal, by reason of Ordinance No. 89-

Amd. as amended, passed by the Municipal Council of San Juan, Rizal, on April 26, 1968 ... ."

Respondents filed their answer in due course and the case was thereafter submitted for decision with

the filing by the parties of their respective memoranda in lieu of oral argument.

As restated by petitioners themselves in their memorandum, the main issue at bar is whether

respondent judge "exceeded his authority and jurisdiction and gravely abused his discretion" 1 in issuing

the questioned orders of February 9, and March 30, 1970, denying the preliminary injunction sought to

stay demolition and removal of petitioners' houses and structures. Petitioners raise as issues also the

issue of validity and constitutionality of municipal ordinance No. 89-Amended as questioned by them in

their action below, and whether respondent Engineer may remove or demolish their houses without a

special court demolition order under said challenged ordinance; and furthermore, "whether the filing of

the petition for compulsory registration in LRC Cad. Case No. N-6, LRC Cad. Rec. No. N-511 which placed

in issue the status of the land as demanded for reasons of public interest where the houses and other

improvements of the petitioners as claimants in the cadastral proceeding are found, precludes the

enforcement of municipal ordinance No. 89-Amd."

Subsequent events have cleared up the matter of this last issue as to the alleged pendency of a petition

in petitioner's favor for compulsory registration of the land in question, as shown by proceedings held in

the Rizal court of first instance and this Court as hereinafter recounted.

A motion to reopen the cadastral proceedings 3 was filed under date of August 2, 1971 by petitioners as

claimants, citing the passage on June 19, 1971 of Republic Act No. 6236 which extended the time limit

(not to extend beyond December 31, 1976) for filing of applications for free patents and for judicial

confirmation of imperfect and incomplete titles to public agricultural lands.

The court of first instance of Rizal, Branch I, presided by Judge Emilio V. Salas had denied such reopening

of the proceedings as per its order dated August 20, 1971, "it appearing that the instant case was

dismissed without prejudice in our order dated April 6, 1970, which order was affirmed by the Supreme

Court in its resolution in G.R. No.

L-32156, dated August 10, 1970, which became final and executory since September 1, 1970." 4

Petitioners-claimants' motion for reconsideration, notwithstanding, withdrawal of the opposition of

respondent municipality of San Juan, Rizal, was denied in the Rizal court of first instance's order dated

November 16, 1971.

A special civil action for certiorari and mandamus was then filed on December 13, 1971 by petitioners-

claimants and docketed as Case L-34438 of this Court. 5 Said action was dismissed for lack of merit per

the Court's resolution therein of December 16, 1971. Reconsideration was denied for lack of merit per

the Court's resolution of May 23, 1972, after the Court had received the comment of the therein

respondent Metropolitan Waterworks and Sewerage System, (as successor-in-interest of Nawasa)

asserting its ownership of the property since its survey in 1910 as conducted for the Metropolitan Water

District (predecessor-in-interest of Nawasa) and approved by the Director of Lands. In its comment, said

therein respondent MWSS further averred that within the property which had been declared for

taxation purposes in the name of the old Metropolitan Water District (with a total area of 132,597

square meters, of which 14,138 square meters are used for public roads) 6 are "aqueducts and an

underground reservoir", and that its predecessor-in-interest (Nawasa) had sold a portion (16,409 sq.

meters) of the property to the Municipality of San Juan (on which are constructed the municipality's

elementary school, home economics building and gymnasium), leased a portion thereof (4,102 sq.

meters) for the municipality's public high school, and "leased some lots to those who have squatted on

the said property." 50,000 square meters or five hectares of the property were likewise leased by the

Nawasa to the Pinaglabanan Commemorative Commission (created by Executive Order No. 263 of the

President of the Philippines dated August 15, 1957) 7 for a 99-year period from August 21, 1963 for the

site of the national shrine to commemorate the "Battle of Pinaglabanan" on August 28 and 29, 1896

between the Katipunan revolutionaries and the Spanish garrison defending the gunpowder dump (called

the "polvorin") in San Juan, Rizal. Final entry of the dismissal order of December 16, 1971 was made as

of June 12, 1972. Hence, it is quite clear that as of now, there exist no proceedings, cadastral or

otherwise, questioning the public character of the land and asserting petitioners' alleged claims of

ownership thereto.

On the main issue at bar, the Court is satisfied that by no means may respondent court be said to have

exceeded its authority or gravely abused its discretion in issuing its questioned orders denying

petitioners' motion below for a writ of preliminary injunction allegedly "to maintain the status quo" and

stay demolition and removal of their illegal constructions found to be public nuisances per se and

serious hazards to public health, 8 by virtue of the following principal considerations:

1. As found in respondent court's extended two-page order of February 9, 1970 9 and ten-page

order of March 30, 1970 10 denying reconsideration, petitioners' motions to maintain the alleged status

quo were based on the same grounds already reiterated before and denied by then Judge (now

appellate associate justice) Andres Reyes who was then presiding over respondent court in an order

dated September 19, 1968, 11 which was upheld in a similar action for certiorari by the Court of Appeals

in its decision of February 4, 1969. 12

2. In both said proceedings before Judge Reyes and the Court of Appeals, petitioners succeeded in

obtaining restraining orders or preliminary writs of injunction to stay demolition, which were dissolved

upon said court's handing down their order or decision on the merits of the injunction petitions

submitted by petitioners. With petitioners definitely having lost their bid to reopen the cadastral

proceedings to pursue their alleged claims of ownership over the lands occupied by their constructions,

supra, no further reason or justification exists to continue the stay order against the removal and

demolition of their constructions.

3. As was well stated in then Judge Reyes' order of September 19, 1968, petitioners failed after

several hearings "to show that they have even a color of title to entitle them to exercise the right of

possession to the premises in question. On the other hand, the land is admittedly public land and

consequently the petitioners have no right to possession thereof....." 13

4. Petitioners' lack of right to the injunction sought by them was further shown in the Court of

Appeals' decision of February 4, 1969, where it noted that "their very evidence, their documentary

proof, would justify that their houses were built upon land of the Metropolitan Water District, that is to

say, of the Philippine Government, therefore, such tax declarations of petitioners' houses themselves

are the best proof of their admission that their possession of the lands they occupy was not and could

not be adverse" 14 and that "their shanties pose a veritable danger to public health." 15

5. No error, much less abuse of authority or discretion, could be attributed to respondent court's

statements and reasons for denying the injunction sought by petitioners, as per its order of March 30,

1970, denying reconsideration, as follows:

... The issues raised by the pleadings to determine whether or not the petitioners are entitled to a writ

of preliminary injunction, or a status quo, in the words of the petitioners, had been resolved several

times not only by this Court but also by the Court of Appeals, and this Court believes that insofar as the

same grounds are concerned, they are res judicata

Lastly, the Court does not lose sight of the fact that the land in question is public land, in the sense that

it is untitled. However, as the government now contends, the land in question is clothed with a public

purpose to be utilized for public service by the government. This fact has not been denied and as a

matter of fact, the petitioners admit that the land in question is public land. ...

6. The question of validity or unconstitutionality of municipal ordinance No. 89-Amended need not

be resolved in this proceeding, as it should first properly be submitted for resolution of the lower court

in the action below. Suffice it to note that the Solicitor General appears to have correctly stated the

actual situation in that petitioners do not dispute the authority of the San Juan council to pass

ordinances providing for the summary abatement of public nuisances, and that the ordinance in

question may not be faulted for being ex post facto in application since it "does not seek to punish an

action done which was innocent before the passage of the same. Rather, it punishes the present and

continuing act of unlawful occupancy of public property or properties intended for public use." 16 At

any rate, the decisive point is that independently of the said ordinance, petitioners' constructions which

have been duly found to be public nuisances per se (without provision for accumulation or disposal of

waste matters and constructed without building permits contiguously to and therefore liable to pollute

one of the main water pipelines which supplies potable water to the Greater Manila area) may be

abated without judicial proceedings under our Civil Code. 17

As stated in Sitchon vs. Aquino, 18 the police power of the state justifies the abatement or destruction

by summary proceedings of public nuisances per se. No error, much less any abuse of discretion, grave

or otherwise, may therefore be attributed against respondent court in having issued its orders denying

for imperative reasons of public health and welfare the preliminary injunction sought again by

petitioners to allow them to continue occupying the land in question with their condemned

constructions and structures.

ACCORDINGLY, judgment is hereby rendered dismissing the petition. The temporary restraining order

heretofore issued on April 20, 1970 is hereby dissolved and such dissolution is declared immediately

executory. No pronouncement as to costs.

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. L-41941 January 9, 1936

JUAN BENGZON, plaintiff-appellant, vs. THE PROVINCE OF PANGASINAN, defendant-appellee. Mario Bengzon for appellant. Provincial Fiscal Fajardo for appellee. BUTTE, J.:

In this case the motion for reconsideration of the decision promulgated on October 26, 1935, was

granted and the case set for re-argument on December 17, 1935. The court having had the benefit of

the oral argument of counsel on the issue of their present value of the premises of the plaintiff-

appellant involved in this suit, its decision of October 26, 1935, is amended to read as follows:

This is an appeal from a judgment of the Court of First Instance of Pangasinan in action for damages for

maintaining a nuisance continuously injurious to the plaintiff and his family by reason of the

maintenance and operation of a stand pipe, pumping station and open reservoir for the storage of water

upon the premises immediately adjacent to the plaintiff's residence.

It appears from the stipulation of facts that the plaintiff owns a house constructed of wood and covered

with nipa on Avenida Rizal, municipality of Lingayen, Province of Pangasinan; that he had and his family

have resided there for twenty-seven years, his family being composed of eight members. Their house is

two stories constructed upon a lot which contains 720 square meter. Upon the adjacent lot the

defendant, during the years 1924 and 1925, constructed a reinforced concrete stand pipe 28 meters

high and nine meters in diameter. Within the base of this cylindrical tank there are three machines: One

electrical, one gasoline and one crude oil. On the side of the tank nearest the plaintiff's residence and at

a distance of 3.4 meters is a chimney which rises to about the height of the gable of the house. The tank

itself is 3.8 meters from the house of the plaintiff.

In March, 1927, the plaintiff protested to the governor of the province for the manner in which the plant

was being operated and asked that he be indemnified for the value of his house and lot so that he might

move his family and his effects to another residence. In this protest he stated:

"Expide humo y olor desagradable que penetran en el interior de mi casa, aun cerradas sus ventanas,

molestos y perjudiciales a nuestra salud. La chimenea de la maquina, que esta en en el lado del tanque,

contiguo al alero de mi casa, aunque esta envuela en la cabeza como una red de acero chispea en

ocasiones en que detro de la red se ha acumulado por el humo bastante suciedad inflamable, y si

algumas tiguo de mi casa, techada de nipa, ella naturalmente nada de su contenido.

"El tangue nos asusta y ponne en en peligro de ser aplastadoos por el, siempre que ocurre un tembor

como ya ha ocurrido varias veces desde su levantamiento, por sus porciones y condiciones

mencionadas, y la circunstancia de estar plantado sobre terreno blado, bajo y anegadizo. No es

improbable, ni menos increible, que este tanque volcara o se tumbra, si ocurriera en Lingayen un

temblor tan fuerte como el ocurrido el año 63 u 80 en Manila, o el occurrido en Japon en 1923, o en la

fecha 7 de estee mes, que derrumbo muchas casas, matando a millares de personas. Ninguna

personans, por sabia que sea, puede dar certidumre y seguridad de que no se tumbaria, por cualquier

terremoto fuerte que occuriera aqui en Lingayen, maxime, estado cargada de CIEN MIL galones de agua

en su parte superior. Y si en ocasion en que yo mi familia estuvieramos dormidos, ocurrienran el temblor

y el volacamiento del TANQUE hacia mi casa ay de nosotros!"

After making an ocular inspection of the plant and hearing the testimony of the witnesses, the trial court

came to the conclusion that although the operation of the pumps and the tank creates some annoyance

and discomfort to the plaintiff, these are but ordinary and incidental to the reasonable conduct of the

defendant's water system. The court further held that inasmuch as the plaintiff did not protest till after

the plan was constructed, his action is barred for laches.

For this later conclusion of law the trial court cites no authority and we are not aware of any. It is to be

noted that this is not a suit for equitable relief but an action for damages. The doctrine that one who

consents to permits or acquiesces in the erection of structure with knowledge of the purpose for which

it is to be put and the consequences of its uses are productive of a nuisance, is not applicable here, for

the plaintiff neither consented to, permitted or acquiesced in the erection of the structure; nor could it

fairly be said that he had knowledge in advance of all the consequences of the erection and the manner

of operation of the plant here in question. The amended complaint in this case was filed on January 4,

1930, from which we infer that the suit was instituted some time before that date. But there is nothing

in the record which warrants the inference of an estoppel by acquiescence.

The learned trial judge, in his decision of January 27, 1934, made a careful and exhaustive analysis both

of the law and the evidence in this case. But after a careful examination of the entire record, we cannot

accept his conclusion that the evidence a case of actionable nuisance.

In locating its pumping station within 3.8 meters from the house of the plaintiff, the defendant should

reasonably have foreseen that the noise, vibrations, smoke, odor and sparks coming from the plant

during its operation, not only during the day but during the night as well, would cause a constant

annoyance, discomfort and danger both to the property of the plaintiff and the health and comport of

himself and his family. The chimney which is just opposite the plaintiff's house at a distance of only 3.4

meters emits smoke, gases of crude oil and gasoline and occasionally sparks well. The plaintiff testified

that at times the smoke blinds him and his family affecting their lungs and their eyes and that the noise

and vibrations affect their sleep. As against the testimony of the plaintiff, who is exposed day in and day

out to these conditions, and of his neighbors who corroborate him, the brief ocular inspection made by

the court on one day, although conducted with eminent fairness, seems to us to be entitled to less

weight. The witnesses for the defendant, its employees, naturally minimize the harmful effects to the

plaintiff of the operation of the machines in the pumping plant. But the evidence as a whole leaves us

with clear conviction that the construction and operation of this pumping plant in such close proximity

to the plaintiff's residence has rendered the same practically uninhabitable without exposing to risk the

comfort, health and, in case of fire, even the live of the plaintiff and his family.

We find from the preponderance of the evidence that the fair present value of the appellant's premises

involved in this suit is P3,000; and as, under the circumstances, the maintenance of the nuisance is

practically tantamount to an expropriation, we have concluded that the defendant-appellee should be

and it is hereby required and adjudged to pay by him to it of a valid conveyance of the premises, free of

liens and incumbrances, reserving to the plaintiff-appellant the right to remove his improvements

therefrom within three months from the date of payment of the said P3,000.

The judgment appealed from is reserved and the cause is remanded for further proceedings in

accordance with this decision. No special pronouncement as to costs in this instance.

VELASCO vs. MANILA ELECTRIC CO.- Nuisance

Noise may constitute a nuisance but it must be of such character as to produce actual physical

discomfort and annoyance to a person of ordinary sensibilities.

FACTS:

Velasco bought three (3) adjoining lots. He sold two (2) of these to Meralco and maintained the last one

as his residence. Meralco constructed on their lots a sub-station at a distance of 10-20 meters away

from appellant’s house. The company also built a concrete wall at the sides along the streets but put up

only an interlink wire fence (previously a sawali wall) on the boundary with appellant. An unceasing

sound emanates from the substation, caused by transformers. Such, appellent contends, constitute a

nuisance which has worsened his health condition and has lowered the value of his property. Several

witnesses came forth but their testimonies were vague and imprecise. Resort was made to a sound level

meter. The audible sound from different areas in Velaso’s property was measured in terms of decibels. It

was found that the sound exceeded the average intensity levels of residences.

ISSUE:

Can there be a nuisance caused by noise or sound?

HELD:

Yes. Several American decisions are cited showing that noise is an actionable nuisance. In fact, Kentucky

v. Anderson dealt with noise emanating from electrical machinery and appliances. The determining

factor, however, is not just intensity or volume. It must be of such character as to produce actual

physical discomfort and annoyance to a person of ordinary sensibilities. However, appellant’s testimony

is too plainly biased. Nor are the witnesses’ testimonies revealing on account of different perceptions.

Consequently, sound level meters were used. As stated above, the sound exceeds average residential

decibels. Also, the testimonies of appellant’s physicians (which were more reliable since they actually

treated him, unlike the appellee’s) point to the noise as having caused appellant loss of sleep, irritation

and tension weakening his constitution. Notable lastly is the fact that in the Kentucky case, where the

nuisance was ordered abated, the average reading was 44 decibels while in the instant, the readings

include 52, 54, and 55. The decision goes on to discuss the proper award of damages. But Meralco was

ordered either to transfer the facilities or reduce the produced sound to around.

Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 61516 March 21, 1989 FLORENTINA A. GUILATCO, petitioner, vs. CITY OF DAGUPAN, and the HONORABLE COURT OF APPEALS, respondents. Nolan R. Evangelista for petitioner. The City Legal Officer for respondents. SARMIENTO, J.:

In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco, the following

judgment was rendered against the respondent City of Dagupan:

(1) Ordering defendant City of Dagupan to pay plaintiff actual damages in the amount of P 15,924

(namely P8,054.00 as hospital, medical and other expenses [Exhs. H to H-60], P 7,420.00 as lost income

for one (1) year [Exh. F] and P 450.00 as bonus). P 150,000.00 as moral damages, P 50,000.00 as

exemplary damages, and P 3,000.00 as attorney's fees, and litigation expenses, plus costs and to

appropriate through its Sangguniang Panglunsod (City Council) said amounts for said purpose;

(2) Dismissing plaintiffs complaint as against defendant City Engr. Alfredo G. Tangco; and

(3) Dismissing the counterclaims of defendant City of Dagupan and defendant City Engr. Alfredo G.

Tangco, for lack of merit. 2

The facts found by the trial court are as follows: 3

It would appear from the evidences that on July 25, 1978, herein plaintiff, a Court Interpreter of Branch

III, CFI--Dagupan City, while she was about to board a motorized tricycle at a sidewalk located at Perez

Blvd. (a National Road, under the control and supervision of the City of Dagupan) accidentally fell into a

manhole located on said sidewalk, thereby causing her right leg to be fractured. As a result thereof, she

had to be hospitalized, operated on, confined, at first at the Pangasinan Provincial Hospital, from July 25

to August 3, 1978 (or for a period of 16 days). She also incurred hospitalization, medication and other

expenses to the tune of P 8,053.65 (Exh. H to H-60) or a total of P 10,000.00 in all, as other receipts were

either lost or misplaced; during the period of her confinement in said two hospitals, plaintiff suffered

severe or excruciating pain not only on her right leg which was fractured but also on all parts of her

body; the pain has persisted even after her discharge from the Medical City General Hospital on October

9, 1978, to the present. Despite her discharge from the Hospital plaintiff is presently still wearing

crutches and the Court has actually observed that she has difficulty in locomotion. From the time of the

mishap on July 25, 1978 up to the present, plaintiff has not yet reported for duty as court interpreter, as

she has difficulty of locomotion in going up the stairs of her office, located near the city hall in Dagupan

City. She earns at least P 720.00 a month consisting of her monthly salary and other means of income,

but since July 25, 1978 up to the present she has been deprived of said income as she has already

consumed her accrued leaves in the government service. She has lost several pounds as a result of the

accident and she is no longer her former jovial self, she has been unable to perform her religious, social,

and other activities which she used to do prior to the incident.

Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as well as Dr. Antonio Sison of

the Medical City General Hospital in Mandaluyong Rizal (Exh. I; see also Exhs. F, G, G-1 to G-19) have

confirmed beyond shadow of any doubt the extent of the fracture and injuries sustained by the plaintiff

as a result of the mishap. On the other hand, Patrolman Claveria, De Asis and Cerezo corroborated the

testimony of the plaintiff regarding the mishap and they have confirmed the existence of the manhole

(Exhs. A, B, C and sub-exhibits) on the sidewalk along Perez Blvd., at the time of the incident on July 25,

1978 which was partially covered by a concrete flower pot by leaving gaping hole about 2 ft. long by 1

1/2 feet wide or 42 cms. wide by 75 cms. long by 150 cms. deep (see Exhs. D and D-1).

Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-officio Highway Engineer,

City Engineer of the Public Works and Building Official for Dagupan City, admitted the existence of said

manhole along the sidewalk in Perez Blvd., admittedly a National Road in front of the Luzon Colleges. He

also admitted that said manhole (there are at least 11 in all in Perez Blvd.) is owned by the National

Government and the sidewalk on which they are found along Perez Blvd. are also owned by the National

Government. But as City Engineer of Dagupan City, he supervises the maintenance of said manholes or

drainage system and sees to it that they are properly covered, and the job is specifically done by his

subordinates, Mr. Santiago de Vera (Maintenance Foreman) and Engr. Ernesto Solermo also a

maintenance Engineer. In his answer defendant Tangco expressly admitted in par. 7-1 thereof, that in

his capacity as ex-officio Highway Engineer for Dagupan City he exercises supervision and control over

National roads, including the Perez Blvd. where the incident happened.

On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower court findings on

the ground that no evidence was presented by the plaintiff- appellee to prove that the City of Dagupan

had "control or supervision" over Perez Boulevard. 5

The city contends that Perez Boulevard, where the fatal drainage hole is located, is a national road that

is not under the control or supervision of the City of Dagupan. Hence, no liability should attach to the

city. It submits that it is actually the Ministry of Public Highways that has control or supervision through

the Highway Engineer which, by mere coincidence, is held concurrently by the same person who is also

the City Engineer of Dagupan.

After examination of the findings and conclusions of the trial court and those of the appellate court, as

well as the arguments presented by the parties, we agree with those of the trial court and of the

petitioner. Hence, we grant the petition.

In this review on certiorari, we have simplified the errors assigned by the petitioner to a single issue:

whether or not control or supervision over a national road by the City of Dagupan exists, in effect

binding the city to answer for damages in accordance with article 2189 of the Civil Code.

The liability of public corporations for damages arising from injuries suffered by pedestrians from the

defective condition of roads is expressed in the Civil Code as follows:

Article 2189. Provinces, cities and municipalities shall be liable for damages for the death of, or injuries

suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings,

and other public works under their control or supervision.

It is not even necessary for the defective road or street to belong to the province, city or municipality for

liability to attach. The article only requires that either control or supervision is exercised over the

defective road or street. 6

In the case at bar, this control or supervision is provided for in the charter of Dagupan and is exercised

through the City Engineer who has the following duties:

Sec. 22. The City Engineer--His powers, duties and compensation-There shall be a city engineer, who

shall be in charge of the department of Engineering and Public Works. He shall receive a salary of not

exceeding three thousand pesos per annum. He shall have the following duties:

(j) He shall have the care and custody of the public system of waterworks and sewers, and all

sources of water supply, and shall control, maintain and regulate the use of the same, in accordance

with the ordinance relating thereto; shall inspect and regulate the use of all private systems for

supplying water to the city and its inhabitants, and all private sewers, and their connection with the

public sewer system.

The same charter of Dagupan also provides that the laying out, construction and improvement of

streets, avenues and alleys and sidewalks, and regulation of the use thereof, may be legislated by the

Municipal Board . 7 Thus the charter clearly indicates that the city indeed has supervision and control

over the sidewalk where the open drainage hole is located.

The express provision in the charter holding the city not liable for damages or injuries sustained by

persons or property due to the failure of any city officer to enforce the provisions of the charter, can not

be used to exempt the city, as in the case at bar.8

The charter only lays down general rules regulating the liability of the city. On the other hand article

2189 applies in particular to the liability arising from "defective streets, public buildings and other public

works." 9

The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or supervision over the said

road. But the city can not be excused from liability by the argument that the duty of the City Engineer to

supervise or control the said provincial road belongs more to his functions as an ex-officio Highway

Engineer of the Ministry of Public Highway than as a city officer. This is because while he is entitled to an

honorarium from the Ministry of Public Highways, his salary from the city government substantially

exceeds the honorarium.

We do not agree.

Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as Ex- Officio Highway Engineer,

as Ex-Officio City Engineer of the Bureau of Public Works, and, last but not the least, as Building Official

for Dagupan City, receives the following monthly compensation: P 1,810.66 from Dagupan City; P 200.00

from the Ministry of Public Highways; P 100.00 from the Bureau of Public Works and P 500.00 by virtue

of P.D. 1096, respectively." 10 This function of supervision over streets, public buildings, and other

public works pertaining to the City Engineer is coursed through a Maintenance Foreman and a

Maintenance Engineer.11 Although these last two officials are employees of the National Government,

they are detailed with the City of Dagupan and hence receive instruction and supervision from the city

through the City Engineer.

There is, therefore, no doubt that the City Engineer exercises control or supervision over the public

works in question. Hence, the liability of the city to the petitioner under article 2198 of the Civil Code is

clear.

Be all that as it may, the actual damages awarded to the petitioner in the amount of P 10,000.00 should

be reduced to the proven expenses of P 8,053.65 only. The trial court should not have rounded off the

amount. In determining actual damages, the court can not rely on "speculation, conjecture or guess

work" as to the amount. Without the actual proof of loss, the award of actual damages becomes

erroneous. 12

On the other hand, moral damages may be awarded even without proof of pecuniary loss, inasmuch as

the determination of the amount is discretionary on the court.13 Though incapable of pecuniary

estimation, moral damages are in the nature of an award to compensate the claimant for actual injury

suffered but which for some reason can not be proven. However, in awarding moral damages, the

following should be taken into consideration:

(1) First, the proximate cause of the injury must be the claimee's acts.14

(2) Second, there must be compensatory or actual damages as satisfactory proof of the factual basis

for damages.15

(3) Third, the award of moral damages must be predicated on any of the cases enumerated in the

Civil Code. 16

In the case at bar, the physical suffering and mental anguish suffered by the petitioner were proven.

Witnesses from the petitioner's place of work testified to the degeneration in her disposition-from being

jovial to depressed. She refrained from attending social and civic activities.17

Nevertheless the award of moral damages at P 150,000.00 is excessive. Her handicap was not

permanent and disabled her only during her treatment which lasted for one year. Though evidence of

moral loss and anguish existed to warrant the award of damages,18 the moderating hand of the law is

called for. The Court has time and again called attention to the reprehensible propensity of trial judges

to award damages without basis,19 resulting in exhorbitant amounts.20

Although the assessment of the amount is better left to the discretion of the trial court 21 under

preceding jurisprudence, the amount of moral damages should be reduced to P 20,000.00.

As for the award of exemplary damages, the trial court correctly pointed out the basis:

To serve as an example for the public good, it is high time that the Court, through this case, should serve

warning to the city or cities concerned to be more conscious of their duty and responsibility to their

constituents, especially when they are engaged in construction work or when there are manholes on

their sidewalks or streets which are uncovered, to immediately cover the same, in order to minimize or

prevent accidents to the poor pedestrians.22

Too often in the zeal to put up "public impact" projects such as beautification drives, the end is more

important than the manner in which the work is carried out. Because of this obsession for showing off,

such trivial details as misplaced flower pots betray the careless execution of the projects, causing public

inconvenience and inviting accidents.

Pending appeal by the respondent City of Dagupan from the trial court to the appellate court, the

petitioner was able to secure an order for garnishment of the funds of the City deposited with the

Philippine National Bank, from the then presiding judge, Hon. Willelmo Fortun. This order for

garnishment was revoked subsequently by the succeeding presiding judge, Hon. Romeo D. Magat, and

became the basis for the petitioner's motion for reconsideration which was also denied. 23

We rule that the execution of the judgment of the trial court pending appeal was premature. We do not

find any good reason to justify the issuance of an order of execution even before the expiration of the

time to appeal .24

WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the respondent Court of

Appeals are hereby REVERSED and SET ASIDE and the decision of the trial court, dated March 12, 1979

and amended on March 13, 1979, is hereby REINSTATED with the indicated modifications as regards the

amounts awarded:

(1) Ordering the defendant City of Dagupan to pay the plaintiff actual damages in the amount of P

15,924 (namely P 8,054.00 as hospital, medical and other expenses; P 7,420.00 as lost income for one

(1) year and P 450.00 as bonus); P 20,000.00 as moral damages and P 10,000.00 as exemplary damages.

The attorney's fees of P 3,000.00 remain the same.

City of Manila vs Genaro Teotico

22 SCRA 267 – Civil Law - Torts and Damages – Liability of municipal corporations in certain cases

In January 1958, at about 8pm, Genaro Teotico was about to board a jeepney in P. Burgos, Manila when

he fell into an uncovered manhole. This caused injuries upon him. Thereafter he sued for damages

under Article 2189 of the Civil Code the City of Manila, the mayor, the city engineer, the city health

officer, the city treasurer, and the chief of police. CFI Manila ruled against Teotico. The CA, on appeal,

ruled that the City of Manila should pay damages to Teotico. The City of Manila assailed the decision of

the CA on the ground that the charter of Manila states that it shall not be liable for damages caused by

the negligence of the city officers in enforcing the charter; that the charter is a special law and shall

prevail over the Civil Code which is a general law; and that the accident happened in national highway.

ISSUE: Whether or not the City of Manila is liable in the case at bar.

HELD: Yes. It is true that in case of conflict, a special law prevails over a general law; that the charter of

Manila is a special law and that the Civil Code is a general law. However, looking at the particular

provisions of each law concerned, the provision of the Manila Charter exempting it from liability caused

by the negligence of its officers is a general law in the sense that it exempts the city from negligence of

its officers in general. There is no particular exemption but merely a general exemption. On the other

hand, Article 2189 of the Civil Code provides a particular prescription to the effect that it makes

provinces, cities, and municipalities liable for the damages caused to a certain person by reason of the

“…defective condition of roads, streets, bridges, public buildings, and other-public works under their

control or supervision.”

The allegation that the incident happened in a national highway was only raised for the first time in the

City’s motion for reconsideration in the Court of Appeals, hence it cannot be given due weight. At any

rate, even though it is a national highway, the law contemplates that regardless if whether or not the

road is national, provincial, city, or municipal, so long as it is under the City’s control and supervision, it

shall be responsible for damages by reason of the defective conditions thereof. In the case at bar, the

City admitted they have control and supervision over the road where Teotico fell when the City alleged

that it has been doing constant and regular inspection of the city’s roads, P. Burgos included.