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1. MALLARI V. CA (2000)

ALFREDO MALLARI SR. and ALFREDO MALLARI JR. in this petition for review on certiorariseek to set aside the Decision of the Court of Appeals1 which reversed the court a quo and adjudged

petitioners to be liable for damages due to negligence as a common carrier resulting in the death of apassenger.

On 14 October 1987, at about 5:00 o'clock in the morning, the passenger jeepney driven by petitionerAlfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the delivery van

of respondent Bulletin Publishing Corp. (BULLETIN, for brevity) along the National Highway inBarangay San Pablo, Dinalupihan, Bataan. Petitioner Mallari Jr. testified that he went to the left laneof the highway and overtook a Fiera which had stopped on the right lane. Before he passed by theFiera, he saw the van of respondent BULLETIN coming from the opposite direction. It was driven byone Felix Angeles. The sketch of the accident showed that the collision occurred after Mallari Jr.overtook the Fiera while negotiating a curve in the highway. The points of collision were the and theleft rear portion of the passenger jeepney and the left front side of the delivery van of BULLETIN.The two (2) right wheels of the delivery van were on the right shoulder of the road and pieces ofdebris from the accident were found scattered along the shoulder of the road up to a certain portion ofthe lane travelled by the passenger jeepney. The impact caused the jeepney to turn around and fall onits left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually dieddue to the gravity of his injuries.1wphi1.nt

On 16 December 1987 Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint fordamages with the Regional Trial Court of Olongapo City against Alfredo Mallari Sr. and Alfredo

Mallari Jr., and also against BULLETIN, its driver Felix Angeles, and the N.V. Netherlands InsuranceCompany. The complaint alleged that the collision which resulted in the death of Israel Reyes wascaused by the fault and negligence of both drivers of the passenger jeepney and the Bulletin Isuzudelivery van. The complaint also prayed that the defendants be ordered jointly and severally to pay

plaintiff P1,006,777.40 in compensatory damages, P40,000.00 for hospital and medical expenses,P18,270.00 for burial expenses plus such amounts as may be fixed by the trial court for exemplarydamages and attorney's fees.

The trial court found that the proximate cause of the collision was the negligence of Felix Angeles,driver of the Bulletin delivery van, considering the fact that the left front portion of the delivery truckdriven by Felix Angeles hit and bumped the left rear portion of the passenger jeepney driven byAlfredo Mallari Jr. Hence, the trial court ordered BULLETIN and Felix Angeles to pay jointly andseverally Claudia G. Reyes, widow of the deceased victim, the sums of P42,106.93 for medicalexpenses; P8,600.00 for funeral and burial expenses; P1,006,777.40 for loss of earning capacity;P5,000.00 for moral damages and P10,000.00 for attorney's fees. The trial court also ordered N.V.

Netherlands Insurance Company to indemnify Claudia G. Reyes P12,000.00 as death indemnity andP2,500.00 for funeral expenses which when paid should be deducted from the liabilities of respondentBULLETIN and its driver Felix Angeles to the plaintiff. It also dismissed the complaint against theother defendants Alfredo Mallari Sr. and Alfredo Mallari Jr.

On appeal the Court of Appeals modified the decision of the trial court and found no negligence onthe part of Angeles and consequently of his employer, respondent BULLETIN. Instead, the appellatecourt ruled that the collision was caused by the sole negligence of petitioner Alfredo Mallari Jr. whoadmitted that immediately before the collision and after he rounded a curve on the highway, heovertook a Fiera which had stopped on his lane and that he had seen the van driven by Angeles beforeovertaking the Fiera. The Court of Appeals ordered petitioners Mallari Jr. and Mallari Sr. tocompensate Claudia G. Reyes P1,006,777.50 for loss of earning capacity, P50,000.00 as indemnityfor death and P10,000.00 for attorney's fees. It absolved from any liability respondent BULLETIN,Felix Angeles and N.V. Netherlands Insurance Company. Hence this petition.

Petitioners contend that there is no evidence to show that petitioner Mallari Jr. overtook a vehicle at acurve on the road at the time of the accident and that the testimony of Angeles on the overtakingmade by Mallari Jr. was not credible and unreliable. Petitioner also submits that the trial court was ina better position than the Court of Appeals to assess the evidence and observe the witnesses as well asdetermine their credibility; hence, its finding that the proximate cause of the collision was thenegligence of respondent Angeles, driver of the delivery van owned by respondent BULLETIN,should be given more weight and consideration.

We cannot sustain petitioners. Contrary to their allegation that there was no evidence whatsoever that

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

Q: And what was that accident all about?

A: Well, what happened, sir, is that at about that time 5:00 o'clock in that morning of October 14while I was negotiating on the highway at San Pablo, Dinalupihan, Bataan, I was then following a

blue Ford Fierra and my distance behind was about twenty (20) feet and then I passed that blue FordFierra. I overtook and when I was almost on the right lane of the highway towards Olongapo Citythere was an oncoming delivery van of the Bulletin Publishing Corporation which bumped the leftrear portion of the jeepney which I was driving and as a result of which the jeepney . . . turned aroundand fell on its left side and as a result of which some of my passengers including me were injured, sir. . . .

Q: Before you overtook the Ford Fierra jeepney did you look . . . whether there was any vehicle

coming towards you?

A: Yes, sir.

Q: Did you see the Bulletin van or the Press van coming towards you?

A: Yes, sir.

Q: At the moment the Ford Fierra . . . stop(ped) and in overtaking the Fierra, did you not have anoption to stop and not to overtake the Ford Fierra?

A: Well, at the time when the Ford Fierra stopped in front of me I slowed down with the intention ofapplying the brake, however, when I saw the oncoming vehicle which is the Press van is very far. . .which is 100 feet distance, . . . it is sufficient to overtake the Ford Fierra so I overt(ook) it . . . .

Q: You said that you took into consideration the speed of the oncoming Press van but you also couldnot estimate the speed of the press van because it was dark at that time, which of these statements aretrue?

A: What I wanted to say, I took into consideration the speed of the oncoming vehicle, the Press van,although at the moment I could not estimate the speed of the oncoming vehicle . . . .2

The Court of Appeals correctly found, based on the sketch and spot report of the police authoritieswhich were not disputed by petitioners, that the collision occurred immediately after petitionerMallari Jr. overtook a vehicle in front of it while traversing a curve on the highway.3 This act ofovertaking was in clear violation of Sec. 41, pars. (a) and (b), of RA 4136 as amended, otherwiseknown as The Land Transportation and Traffic Code which provides:

Sec. 41. Restrictions on overtaking and passing. (a) The driver of a vehicle shall not drive to theleft side of the center line of a highway in overtaking or passing another vehicle proceeding in the

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2. COCA-COLA BOTTLERS PHILS V. CA (1993)

This case concerns the proprietress of a school canteen which had to close down as a consequence ofthe big drop in its sales of soft drinks triggered by the discovery of foreign substances in certain

beverages sold by it. The interesting issue posed is whether the subsequent action for damages by theproprietress against the soft drinks manufacturer should be treated as one for breach of impliedwarranty against hidden defects or merchantability, as claimed by the manufacturer, the petitionerherein which must therefore be filed within six months from the delivery of the thing sold pursuant toArticle 1571 of the Civil Code, or one for quasi-delict, as held by the public respondent, which can be

filed within four years pursuant to Article 1146 of the same Code.

On 7 May 1990, Lydia L. Geronimo, the herein private respondent, filed a complaint for damagesagainst petitioner with the Regional Trial Court (RTC) of Dagupan City. 1 The case was docketed asCivil Case No. D-9629. She alleges in her complaint that she was the proprietress of KindergartenWonderland Canteen docketed as located in Dagupan City, an enterprise engaged in the sale of softdrinks (including Coke and Sprite) and other goods to the students of Kindergarten Wonderland andto the public; on or about 12 August 1989, some parents of the students complained to her that theCoke and Sprite soft drinks sold by her contained fiber-like matter and other foreign substances or

particles; he then went over her stock of softdrinks and discovered the presence of some fiber-likesubstances in the contents of some unopened Coke bottles and a plastic matter in the contents of anunopened Sprite bottle; she brought the said bottles to the Regional Health Office of the Departmentof Health at San Fernando, La Union, for examination; subsequently, she received a letter from theDepartment of Health informing her that the samples she submitted "are adulterated;" as aconsequence of the discovery of the foreign substances in the beverages, her sales of soft drinks

severely plummeted from the usual 10 cases per day to as low as 2 to 3 cases per day resulting inlosses of from P200.00 to P300.00 per day, and not long after that she had to lose shop on 12December 1989; she became jobless and destitute; she demanded from the petitioner the payment ofdamages but was rebuffed by it. She prayed for judgment ordering the petitioner to pay her P5,000.00as actual damages, P72,000.00 as compensatory damages, P500,000.00 as moral damages,P10,000.00 as exemplary damages, the amount equal to 30% of the damages awarded as attorney'sfees, and the costs. 2

The petitioner moved to dismiss 3 the complaint on the grounds of failure to exhaust administrativeremedies and prescription. Anent the latter ground, the petitioner argued that since the complaint isfor breach of warranty under Article 1561 of the said Code. In her Comment 4 thereto, privaterespondent alleged that the complaint is one for damages which does not involve an administrativeaction and that her cause of action is based on an injury to plaintiff's right which can be broughtwithin four years pursuant to Article 1146 of the Civil Code; hence, the complaint was seasonablyfiled. Subsequent related pleadings were thereafter filed by the parties. 5

In its Order of 23 January 1991, 6 the trial court granted the motion to dismiss. It ruled that thedoctrine of exhaustion of administrative remedies does not apply as the existing administrativeremedy is not adequate. It also stated that the complaint is based on a contract, and not on quasi-delict, as there exists pre-existing contractual relation between the parties; thus, on the basis of Article1571, in relation to Article 1562, the complaint should have been filed within six months from thedelivery of the thing sold.

Her motion for the reconsideration of the order having been denied by the trial court in its Order of 17April 1991, 7 the private respondent came to this Court via a petition for review on certiorari whichwe referred to the public respondent "for proper determination and disposition. 8 The publicrespondent docketed the case as CA-G.R. SP No. 25391.

In a decision promulgated on 28 January 1992, 9 the public respondent annulled the questioned ordersof the RTC and directed it to conduct further proceedings in Civil Case No. D-9629. In holding forthe private respondent, it ruled that:

Petitioner's complaint being one for quasi-delict, and not for breach of warranty as respondentcontends, the applicable prescriptive period is four years.

It should be stressed that the allegations in the complaint plainly show that it is an action or damagesarising from respondent's act of "recklessly and negligently manufacturing adulterated food itemsintended to be sold or public consumption" (p. 25, rollo). It is truism in legal procedure that whatdetermines the nature of an action are the facts alleged in the complaint and those averred as a defensein the defendant's answer (I Moran 126; Calo v. Roldan, 76 Phil. 445; Alger Electric, Inc. v. CA, 135

SCRA 340).

Secondly, despite the literal wording of Article 2176 of the Civil code, the existence of contractualrelations between the parties does not absolutely preclude an action by one against the other for quasi-delict arising from negligence in the performance of a contract.

In Singson v. Court of Appeals (23 SCRA 1117), the Supreme Court ruled:

It has been repeatedly held: that the existence of a contract between the parties does not bar thecommission of a tort by the one against the other and the consequent recovery of damages therefor. . . . Thus in Air France vs. Carrascoso, . . . (it was held that) although the relation between a

passenger and a carrier is "contractual both in origin and in nature the act that breaks the contract mayalso be a tort.

Significantly, in American jurisprudence, from which Our law on Sales was taken, the authorities are

one in saying that he availability of an action or breach of warranty does not bar an action for torts ina sale of defective goods. 10

Its motion for the reconsideration of the decision having been denied by the public respondent in itsResolution of 14 May 1993, 11 the petitioner took his recourse under Rule 45 of the Revised Rules ofCourt. It alleges in its petition that:

I.

THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLEERROR IN RULING THAT ARTICLE 2176, THE GENERAL PROVISION ON QUASI-DELICTS,IS APPLICABLE IN THIS CASE WHEN THE ALLEGATIONS OF THE COMPLAINTCLEARLY SHOW THAT PRIVATE RESPONDENT'S CAUSE OF ACTION IS BASEDONBREACH OF A SELLER'S IMPLIED WARRANTIES UNDER OUR LAW ON SALES.

II.CORROLARILY, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE ANDREVERSIBLE ERROR IN OVERRULING PETITIONER'S ARGUMENT THAT PRIVATERESPONDENT'S CAUSE OF ACTION HAD PRESCRIBED UNDER ARTICLE 1571 OF THECIVIL CODE. 12

The petitioner insists that a cursory reading of the complaint will reveal that the primary legal basisfor private respondent's cause of action is not Article 2176 of the Civil Code on quasi-delictfor thecomplaint does not ascribe any tortious or wrongful conduct on its partbut Articles 1561 and 1562thereof on breach of a seller's implied warranties under the law on sales. It contends the existence of acontractual relation between the parties (arising from the contract of sale) bars the application of thelaw on quasi-delicts and that since private respondent's cause of action arose from the breach ofimplied warranties, the complaint should have been filed within six months room delivery of the softdrinks pursuant to Article 171 of the Civil Code.

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In her Comment the private respondent argues that in case of breach of the seller's implied warranties,the vendee may, under Article 1567 of the Civil Code, elect between withdrawing from the contractor demanding a proportionate reduction of the price, with damages in either case. She asserts thatCivil Case No. D-9629 is neither an action for rescission nor for proportionate reduction of the p rice,

but for damages arising from a quasi-delict and that the public respondent was correct in ruling thatthe existence of a contract did not preclude the action for quasi-delict. As to the issue of prescription,the private respondent insists that since her cause of action is based on quasi-delict, the prescriptive

period therefore is four (4) years in accordance with Article 1144 of the Civil Code and thus the filingof the complaint was well within the said period.

We find no merit in the petition. The public respondent's conclusion that the cause of action in CivilCase No. D-9629 is found on quasi-delict and that, therefore, pursuant to Article 1146 of the CivilCode, it prescribes in four (4) years is supported by the allegations in the complaint, more particularly

paragraph 12 thereof, which makes reference to the reckless and negligent manufacture of"adulterated food items intended to be sold for public consumption."

The vendee's remedies against a vendor with respect to the warranties against hidden defects of orencumbrances upon the thing sold are not limited to those prescribed in Article 1567 of the CivilCode which provides:

Art. 1567. In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect betweenwithdrawing from the contract and demanding a proportionate reduction of the price, with damageseithercase. 13

The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which casethe ordinary rule on obligations shall be applicable. 14 Under the law on obligations, responsibilityarising from fraud is demandable in all obligations and any waiver of an action for future fraud isvoid. Responsibility arising from negligence is also demandable in any obligation, but such liabilitymay be regulated by the courts, according to the circumstances. 15 Those guilty of fraud, negligence,or delay in the performance of their obligations and those who in any manner contravene the tenorthereof are liable for damages. 16

The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code, and anaction based thereon may be brought by the vendee. While it may be true that the pre-existingcontract between the parties may, as a general rule, bar the applicability of the law on quasi-delict, theliability may itself be deemed to arise from quasi-delict, i.e., the acts which breaks the contract mayalso be a quasi-delict. Thus, in Singson vs. Bank of the Philippine Islands, 17 this Court stated:

We have repeatedly held, however, that the existence of a contract between the parties does not barthe commission of a tort by the one against the other and the consequent recovery of damagestherefor. 18 Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, inAir France vs. Carrascoso, 19 involving an airplane passenger who, despite hi first-class ticket, had

been illegally ousted from his first-class accommodation and compelled to take a seat in the touristcompartment, was held entitled to recover damages from the air-carrier, upon the ground of tort onthe latter's part, for, although the relation between the passenger and a carrier is "contractual both inorigin and nature . . . the act that breaks the contract may also be a tort.

Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. 20

Under American law, the liabilities of a manufacturer or seller of injury-causing products may bebased on negligence, 21 breach of warranty, 22 tort, 23 or other grounds such as fraud, deceit, ormisrepresentation. 24 Quasi-delict, as defined in Article 2176 of the Civil Code, (which is known inSpanish legal treaties as culpa aquiliana, culpa extra-contractual or cuasi-delitos) 25 is homologous

but not identical to tort under the common law, 26 which includes not only negligence, but alsointentional criminal acts, such as assault and battery, false imprisonment and deceit. 27

It must be made clear that our affirmance of the decision of the public respondent should by no meansbe understood as suggesting that the private respondent's claims for moral damages have sufficientfactual and legal basis.

IN VIEW OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit, withcosts against the petitioner.

SO ORDERED.

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3. CITY OF MANILA V. TEOTICO (1968)

Appeal by certiorari from a decision of the Court of Appeals.

On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta andP. Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take himdown town. After waiting for about five minutes, he managed to hail a jeepney that came along to astop. As he stepped down from the curb to board the jeepney, and took a few steps, he fell inside anuncovered and unlighted catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit

the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his lefteyelid. As blood flowed therefrom, impairing his vision, several persons came to his assistance andpulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital,where his injuries were treated, after which he was taken home. In addition to the lacerated wound inhis left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg andthe upper lip apart from an abrasion on the right infra-patella region. These injuries and the allergiceruption caused by anti-tetanus injections administered to him in the hospital, required furthermedical treatment by a private practitioner who charged therefor P1,400.00.

As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance ofManila, a complaint which was, subsequently, amended for damages against the City ofManila, its mayor, city engineer, city health officer, city treasurer and chief of police. As stated in thedecision of the trial court, and quoted with approval by the Court of Appeals,

At the time of the incident, plaintiff was a practicing public accountant, a businessman and a

professor at the University of the East. He held responsible positions in various business firms like thePhilippine Merchandising Co., the A.U. Valencia and Co., the Silver Swan Manufacturing Companyand the Sincere Packing Corporation. He was also associated with several civic organizations such asthe Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manilaand the Knights of Rizal. As a result of the incident, plaintiff was prevented from engaging in hiscustomary occupation for twenty days. Plaintiff has lost a daily income of about P50.00 during hisincapacity to work. Because of the incident, he was subjected to humiliation and ridicule by his

business associates and friends. During the period of his treatment, plaintiff was under constant fearand anxiety for the welfare of his minor children since he was their only support. Due to the filing ofthis case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00.

On the other hand, the defense presented evidence, oral and documentary, to prove that the StormDrain Section, Office of the City Engineer of Manila, received a report of the uncovered condition ofa catchbasin at the corner of P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but thesame was covered on the same day (Exhibit 4); that again the iron cover of the same catch basin was

reported missing on January 30, 1958, but the said cover was replaced the next day (Exhibit 5); thatthe Office of the City Engineer never received any report to the effect that the catchbasin in questionwas not covered between January 25 and 29, 1968; that it has always been a policy of the said office,which is charged with the duty of installation, repair and care of storm drains in the City of Manila,that whenever a report is received from whatever source of the loss of a catchbasin cover, the matteris immediately attended to, either by immediately replacing the missing cover or covering thecatchbasin with steel matting that because of the lucrative scrap iron business then prevailing, stealingof iron catchbasin covers was rampant; that the Office of the City Engineer has filed complaints incourt resulting from theft of said iron covers; that in order to prevent such thefts, the city governmenthas changed the position and layout of catchbasins in the City by constructing them under thesidewalks with concrete cement covers and openings on the side of the gutter; and that these changeshad been undertaken by the city from time to time whenever funds were available.

After appropriate proceedings the Court of First Instance of Manila rendered the aforementioneddecision sustaining the theory of the defendants and dismissing the amended complaint, without costs.

On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as theCity of Manila is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00.1 Hence, this appeal by the City of Manila.

The first issue raised by the latter is whether the present case is governed by Section 4 of RepublicAct No. 409 (Charter of the City of Manila) reading:

The city shall not be liable or held for damages or injuries to persons or property arising from thefailure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this

chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or otherofficers while enforcing or attempting to enforce said provisions.

or by Article 2189 of the Civil Code of the Philippines which provides:

Provinces, cities and municipalities shall be liable for damages for the death of, or injuries sufferedby, any person by reason of defective conditions of road, streets, bridges, public buildings, and otherpublic works under their control or supervision.

Manila maintains that the former provision should prevail over the latter, because Republic Act 409,is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law,applicable to the entire Philippines.

The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that,insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil

Code a general legislation; but, as regards the subject-matter of the provisions above quoted, Section4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila for:"damages or injury to persons or property arising from the failure of" city officers "to enforce the

provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor,Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Uponthe other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces,cities and municipalities . . . liable for damages for the death of, or injury suffered by any person byreason"specifically"of the defective condition of roads, streets, bridges, public buildings, andother-public works under their control or supervision." In other words, said section 4 refers to liabilityarising from negligence, in general, regardless of the object thereof, whereas Article 2189 governsliability due to "defective streets," in particular. Since the present action is based upon the allegeddefective condition of a road, said Article 2189 is decisive thereon.

It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because theaccident involving him took place in a national highway; and 2) because the City of Manila has not

been negligent in connection therewith.As regards the first issue, we note that it is based upon an allegation of fact not made in the answer ofthe City. Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that hisinjuries were due to the defective condition of a street which is "under the supervision and control" ofthe City. In its answer to the amended complaint, the City, in turn, alleged that "the streetsaforementioned were and have been constantly kept in good condition and regularly inspected and thestorm drains and manholes thereof covered by the defendant City and the officers concerned" who"have been ever vigilant and zealous in the performance of their respective functions and duties asimposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and isunder its control and supervision.

Moreover, the assertion to the effect that said Avenue is a national highway was made, for the firsttime, in its motion for reconsideration of the decision of the Court of Appeals. Such assertion raised,therefore, a question of fact, which had not been put in issue in the trial court, and cannot be set up,

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for the first time, on appeal, much less after the rendition of the decision of the appellate court, in amotion for the reconsideration thereof.

At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability thereinestablished to attach that the defective roads or streets belong to the province, city or municipalityfrom which responsibility is exacted. What said article requires is that the province, city ormunicipality have either "control or supervision" over said street or road. Even if P. Burgos Avenuewere, therefore, a national highway, this circumstance would not necessarily detract from its "controlor supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x) thereof provides:

Sec. 18. Legislative powers.The Municipal Board shall have the following legislative powers:

x x x x x x x x x

(x) Subject to the provisions of existing law to provide for the laying out, construction andimprovement, and to regulate the use of streets, avenues, alleys, sidewalks, wharves, piers, parks,cemeteries, and other public places; to provide for lighting, cleaning, and sprinkling of streets and

public places; . . . to provide for the inspection of, fix the license fees for and regulate the openings inthe same for the laying of gas, water, sewer and other pipes, the building and repair of tunnels,sewers, and drains, and all structures in and under the same and the erecting of poles and the stringingof wires therein; to provide for and regulate cross-works, curbs, and gutters therein, . . . to regulatetraffic and sales upon the streets and other public places; to provide for the abatement of nuisances inthe same and punish the authors or owners thereof; to provide for the construction and maintenance,and regulate the use, of bridges, viaducts and culverts; to prohibit and regulate ball playing, kite-

flying, hoop rolling, and other amusements which may annoy persons using the streets and publicplaces, or frighten horses or other animals; to regulate the speed of horses and other animals, motorand other vehicles, cars, and locomotives within the limits of the city; to regulate the lights used on allvehicles, cars, and locomotives; . . . to provide for and change the location, grade, and crossing ofrailroads, and compel any such railroad to raise or lower its tracks to conform to such provisions orchanges; and to require railroad companies to fence their property, or any part thereof, to providesuitable protection against injury to persons or property, and to construct and repair ditches, drains,sewers, and culverts along and under their tracks, so that the natural drainage of the streets andadjacent property shall not be obstructed.

This authority has been neither withdrawn nor restricted by Republic Act No. 917 and ExecutiveOrder No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition orappropriation of the highway funds and the giving of aid to provinces, chartered cities andmunicipalities in the construction of roads and streets within their respective boundaries, andExecutive Order No. 113 merely implements the provisions of said Republic Act No. 917, concerning

the disposition and appropriation of the highway funds. Moreover, it provides that "the construction,maintenance and improvement of national primary, national secondary and national aid provincialand city roads shall be accomplished by the Highway District Engineers and Highway City Engineersunder the supervision of the Commissioner of Public Highways and shall be financed from suchappropriations as may be authorized by the Republic of the Philippines in annual or specialappropriation Acts."

Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervisionof the City of Manila and whether the latter is guilty of negligence, in connection with themaintenance of said road, which were decided by the Court of Appeals in the affirmative, is one offact, and the findings of said Court thereon are not subject to our review.

WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against theCity of Manila. It is so ordered.1wph1.t

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4. JIMENEZ V. CITY OF MANILA (1987)

This is a petition for review on certiorari of: (1) the decision * of the Intermediate Appellate Court inAC-G.R. No. 013887-CV Bernardino Jimenez v. Asiatic Integrated Corporation and City of Manila,reversing the decision ** of the Court of First Instance of Manila, Branch XXII in Civil Case No.96390 between the same parties, but only insofar as holding Asiatic Integrated Corporation solelyliable for damages and attorney's fees instead of making the City of Manila jointly and solidarilyliable with it as prayed for by the petitioner and (2) the resolution of the same Appellate Courtdenying his Partial Motion for Reconsideration (Rollo, p. 2).

The dispositive portion of the Intermediate Appellate Court's decision is as follows:

WHEREFORE, the decision appealed from is hereby REVERSED. A new one is hereby enteredordering the defendant Asiatic Integrated Corporation to pay the plaintiff P221.90 actual medicalexpenses, P900.00 for the amount paid for the operation and management of a school bus, P20,000.00as moral damages due to pains, sufferings and sleepless nights and P l0,000.00 as attorney's fees.

SO ORDERED. (p. 20, Rollo)

The findings of respondent Appellate Court are as follows:

The evidence of the plaintiff (petitioner herein) shows that in the morning of August 15, 1974 he,together with his neighbors, went to Sta. Ana public market to buy "bagoong" at the time when the

public market was flooded with ankle deep rainwater. After purchasing the "bagoong" he turned

around to return home but he stepped on an uncovered opening which could not be seen because ofthe dirty rainwater, causing a dirty and rusty four- inch nail, stuck inside the uncovered opening, topierce the left leg of plaintiff-petitioner penetrating to a depth of about one and a half inches. Afteradministering first aid treatment at a nearby drugstore, his companions helped him hobble home. Hefelt ill and developed fever and he had to be carried to Dr. Juanita Mascardo. Despite the medicineadministered to him by the latter, his left leg swelled with great pain. He was then rushed to theVeterans Memorial Hospital where he had to be confined for twenty (20) days due to h igh fever andsevere pain.

Upon his discharge from the hospital, he had to walk around with crutches for fifteen (15) days. Hisinjury prevented him from attending to the school buses he is operating. As a result, he had to engagethe services of one Bienvenido Valdez to supervise his business for an aggregate compensation ofnine hundred pesos (P900.00). (Decision, AC-G.R. CV No. 01387, Rollo, pp. 13-20).

Petitioner sued for damages the City of Manila and the Asiatic Integrated Corporation under whose

administration the Sta. Ana Public Market had been placed by virtue of a Management and OperatingContract (Rollo, p. 47).

The lower court decided in favor of respondents, the dispositive portion of the decision reading:

WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiffdismissing the complaint with costs against the plaintiff. For lack of sufficient evidence, thecounterclaims of the defendants are likewise dismissed. (Decision, Civil Case No. 96390, Rollo, p.42).

As above stated, on appeal, the Intermediate Appellate Court held the Asiatic Integrated Corporationliable for damages but absolved respondent City of Manila.

Hence this petition.

The lone assignment of error raised in this petition is on whether or not the Intermediate AppellateCourt erred in not ruling that respondent City of Manila should be jointly and severally liable withAsiatic Integrated Corporation for the injuries petitioner suffered.

In compliance with the resolution of July 1, 1985 of the First Division of this Court (Rollo, p. 29)respondent City of Manila filed its comment on August 13, 1985 (Rollo, p. 34) while petitioner filedits reply on August 21, 1985 (Reno, p. 51).

Thereafter, the Court in the resolution of September 11, 1985 (Rollo, p. 62) gave due course to the

petition and required both parties to submit simultaneous memoranda

Petitioner filed his memorandum on October 1, 1985 (Rollo, p. 65) while respondent filed itsmemorandum on October 24, 1985 (Rollo, p. 82).

In the resolution of October 13, 1986, this case was transferred to the Second Division of this Court,the same having been assigned to a member of said Division (Rollo, p. 92).

The petition is impressed with merit.

As correctly found by the Intermediate Appellate Court, there is no doubt that the plaintiff sufferedinjuries when he fell into a drainage opening without any cover in the Sta. Ana Public Market.Defendants do not deny that plaintiff was in fact injured although the Asiatic Integrated Corporationtries to minimize the extent of the injuries, claiming that it was only a small puncture and that as awar veteran, plaintiff's hospitalization at the War Veteran's Hospital was free. (Decision, AC-G.R. CV

No. 01387, Rollo, p. 6).Respondent City of Manila maintains that it cannot be held liable for the injuries sustained by the

petitioner because under the Management and Operating Contract, Asiatic Integrated Corporationassumed all responsibility for damages which may be suffered by third persons for any causeattributable to it.

It has also been argued that the City of Manila cannot be held liable under Article 1, Section 4 ofRepublic Act No. 409 as amended (Revised Charter of Manila) which provides:

The City shall not be liable or held for damages or injuries to persons or property arising from thefailure of the Mayor, the Municipal Board, or any other City Officer, to enforce the provisions of thischapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or anyother officers while enforcing or attempting to enforce said provisions.

This issue has been laid to rest in the case of City of Manila v. Teotico (22 SCRA 269-272 [1968])where the Supreme Court squarely ruled that Republic Act No. 409 establishes a general ruleregulating the liability of the City of Manila for "damages or injury to persons or property arisingfrom the failure of city officers" to enforce the provisions of said Act, "or any other law or ordinanceor from negligence" of the City "Mayor, Municipal Board, or other officers while enforcing orattempting to enforce said provisions."

Upon the other hand, Article 2189 of the Civil Code of the Philippines which provides that:

Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered byany person by reason of defective conditions of roads, streets, bridges, public buildings and other

public works under their control or supervision.

constitutes a particular prescription making "provinces, cities and municipalities ... liable for damagesfor the death of, or injury suffered by any person by reason" specifically "of the defectivecondition of roads, streets, bridges, public buildings, and other public works under their control or

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supervision." In other words, Art. 1, sec. 4, R.A. No. 409 refers to liability arising from negligence, ingeneral, regardless of the object, thereof, while Article 2189 of the Civil Code governs liability due to"defective streets, public buildings and other public works" in particular and is therefore decisive onthis specific case.

In the same suit, the Supreme Court clarified further that under Article 2189 of the Civil Code, it isnot necessary for the liability therein established to attach, that the defective public works belong tothe province, city or municipality from which responsibility is exacted. What said article requires isthat the province, city or municipality has either "control or supervision" over the public building in

question.

In the case at bar, there is no question that the Sta. Ana Public Market, despite the Management andOperating Contract between respondent City and Asiatic Integrated Corporation remained under thecontrol of the former.

For one thing, said contract is explicit in this regard, when it provides:

II

That immediately after the execution of this contract, the SECOND PARTY shall start the painting,cleaning, sanitizing and repair of the public markets and talipapas and within ninety (90) days thereof,the SECOND PARTY shall submit a program of improvement, development, rehabilitation andreconstruction of the city public markets and talipapas subject to prior approval of the FIRSTPARTY. (Rollo, p. 44)

xxx xxx xxx

VI

That all present personnel of the City public markets and talipapas shall be retained by the SECONDPARTY as long as their services remain satisfactory and they shall be extended the same rights and

privileges as heretofore enjoyed by them. Provided, however, that the SECOND PARTY shall havethe right, subject to prior approval of the FIRST PARTY to discharge any of the present employeesfor cause. (Rollo, p. 45).

VII

That the SECOND PARTY may from time to time be required by the FIRST PARTY, or his dulyauthorized representative or representatives, to report, on the activities and operation of the City

public markets and talipapas and the facilities and conveniences installed therein, particularly as totheir cost of construction, operation and maintenance in connection with the stipulations contained inthis Contract. (lbid)

The fact of supervision and control of the City over subject public market was admitted by MayorRamon Bagatsing in his letter to Secretary of Finance Cesar Virata which reads:

These cases arose from the controversy over the Management and Operating Contract entered into onDecember 28, 1972 by and between the City of Manila and the Asiatic Integrated Corporation,whereby in consideration of a fixed service fee, the City hired the services of the said corporation toundertake the physical management, maintenance, rehabilitation and development of the City's publicmarkets and' Talipapas' subject to the control and supervision of the City.

xxx xxx xxx

It is believed that there is nothing incongruous in the exercise of these powers vis-a-vis the existenceof the contract, inasmuch as the City retains the power of supervision and control over its publicmarkets and talipapas under the terms of the contract. (Exhibit "7-A") (Emphasis supplied.) (Rollo, p.75).

In fact, the City of Manila employed a market master for the Sta. Ana Public Market whose primaryduty is to take direct supervision and control of that particular market, more specifically, to check thesafety of the place for the public.

Thus the Asst. Chief of the Market Division and Deputy Market Administrator of the City of Manilatestified as follows:

Court This market master is an employee of the City of Manila?

Mr. Ymson Yes, Your Honor.

Q What are his functions?

A Direct supervision and control over the market area assigned to him."(T.s.n.,pp. 41-42, Hearing ofMay 20, 1977.)

xxx xxx xxx

Court As far as you know there is or is there any specific employee assigned with the task of seeing to

it that the Sta. Ana Market is safe for the public?Mr. Ymson Actually, as I stated, Your Honor, that the Sta. Ana has its own market master. The

primary duty of that market master is to make the direct supervision and control of that particularmarket, the check or verifying whether the place is safe for public safety is vested in the marketmaster. (T.s.n., pp. 2425, Hearing of July 27, 1977.) (Emphasis supplied.) (Rollo, p. 76).

Finally, Section 30 (g) of the Local Tax Code as amended, provides:

The treasurer shall exercise direct and immediate supervision administration and control over publicmarkets and the personnel thereof, including those whose duties concern the maintenance and upkeepof the market and ordinances and other pertinent rules and regulations. (Emphasis supplied.) (Rollo,

p. 76)

The contention of respondent City of Manila that petitioner should not have ventured to go to Sta.

Ana Public Market during a stormy weather is indeed un tenable. As observed by respondent Court ofAppeals, it is an error for the trial court to attribute the negligence to herein petitioner. Morespecifically stated, the findings of appellate court are as follows:

... The trial court even chastised the plaintiff for going to market on a rainy day just to buy bagoong.A customer in a store has the right to assume that the owner will comply with his duty to keep the

premises safe for customers. If he ventures to the store on the basis of such assumption and is injuredbecause the owner did not comply with his duty, no negligence can be imputed to the customer.(Decision, AC-G. R. CV No. 01387, Rollo, p. 19).

As a defense against liability on the basis of a quasi-delict, one must have exercised the diligence of agood father of a family. (Art. 1173 of the Civil Code).

There is no argument that it is the duty of the City of Manila to exercise reasonable care to keep thepublic market reasonably safe for people frequenting the place for their marketing needs.

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5. GULIATCO V. CITY OF DAGUPAN (1989)

In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco, thefollowing judgment was rendered against the respondent City of Dagupan:

x x x

(1) Ordering defendant City of Dagupan to pay plaintiff actual damages in the amount of P15,924 (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, P50,000.00 as exemplary damages, and P 3,000.00 as attorney's fees, and litigation expenses, plus costsand 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 ofBranch III, CFI--Dagupan City, while she was about to board a motorized tricycle at a sidewalklocated 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 PangasinanProvincial Hospital, from July 25 to August 3, 1978 (or for a period of 16 days). She also incurredhospitalization, medication and other expenses to the tune of P 8,053.65 (Exh. H to H-60) or a total ofP 10,000.00 in all, as other receipts were either lost or misplaced; during the period of herconfinement in said two hospitals, plaintiff suffered severe or excruciating pain not only on her rightleg which was fractured but also on all parts of her body; the pain has persisted even after herdischarge from the Medical City General Hospital on October 9, 1978, to the present. Despite herdischarge from the Hospital plaintiff is presently still wearing crutches and the Court has actuallyobserved 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 locomotionin going up the stairs of her office, located near the city hall in Dagupan City. She earns at least P720.00 a month consisting of her monthly salary and other means of income, but since July 25, 1978up to the present she has been deprived of said income as she has already consumed her accruedleaves in the government service. She has lost several pounds as a result of th e accident and she is nolonger her former jovial self, she has been unable to perform her religious, social, and other activitieswhich she used to do prior to the incident.

Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as well as Dr. AntonioSison of the Medical City General Hospital in Mandaluyong Rizal (Exh. I; see also Exhs. F, G, G-1 toG-19) have confirmed beyond shadow of any doubt the extent of the fracture and injuries sustained bythe plaintiff as a result of the mishap. On the other hand, Patrolman Claveria, De Asis and Cerezocorroborated the testimony of the plaintiff regarding the mishap and they have confirmed theexistence of the manhole (Exhs. A, B, C and sub-exhibits) on the sidewalk along Perez Blvd., at thetime of the incident on July 25, 1978 which was partially covered by a concrete flower pot by leavinggaping hole about 2 ft. long by 1 1/2 feet wide or 42 cms. wide by 75 cms. long by 150 cms. deep (seeExhs. D and D-1).

Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-officio HighwayEngineer, City Engineer of the Public Works and Building Official for Dagupan City, admitted theexistence of said manhole along the sidewalk in Perez Blvd., admittedly a National Road in front ofthe 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. arealso owned by the National Government. But as City Engineer of Dagupan City, he supervises themaintenance of said manholes or drainage system and sees to it that they are properly covered, andthe job is specifically done by his subordinates, Mr. Santiago de Vera (Maintenance Foreman) andEngr. Ernesto Solermo also a maintenance Engineer. In his answer defendant Tangco expresslyadmitted in par. 7-1 thereof, that in his capacity as ex-officio Highway Engineer for Dagupan City heexercises supervision and control over National roads, including the Perez Blvd. where the incidenthappened.

On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower court findingson the ground that no evidence was presented by the plaintiff- appellee to prove that the City ofDagupan had "control or supervision" over Perez Boulevard. 5

The city contends that Perez Boulevard, where the fatal drainage hole is located, is a national roadthat is not under the control or supervision of the City of Dagupan. Hence, no liability should attach tothe city. It submits that it is actually the Ministry of Public Highways that has control or supervisionthrough the Highway Engineer which, by mere coincidence, is held concurrently by the same personwho is also the City Engineer of Dagupan.

After examination of the findings and conclusions of the trial court and those of the appellate court, aswell 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 effectbinding 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 thedefective 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, orinjuries 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 t o belong to the province, city or municipalityfor liability to attach. The article only requires that either control or supervision is exercised over thedefective road or street. 6

In the case at bar, this control or supervision is provided for in the charter of Dagupan and isexercised 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, whoshall be in charge of the department of Engineering and Public Works. He shall receive a salary of notexceeding three thousand pesos per annum. He shall have the following duties:

x x x

(j) He shall have the care and custody of the public system of waterworks and sewers, and allsources of water supply, and shall control, maintain and regulate the use of the same, in accordancewith the ordinance relating thereto; shall inspect and regulate the use of all private systems forsupplying water to the city and its inhabitants, and all private sewers, and their connection with the

public sewer system.

x x x

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6. QC GOVERNMENT V. DACARA (2005)

The review of cases under Rule 45 of the Rules of Court is limited to errors of law. Unless there is ashowing that the findings of the lower court are totally devoid of support or are glaringly erroneous,this Court will not analyze or weigh evidence all over again. Under the circumstance, the factualfindings and conclusions of the Court of Appeals affirming those of the trial courts will be conclusiveupon the Supreme Court. Furthermore, well-entrenched is the rule that points of law, theories, issuesand arguments not brought to the attention of the trial court cannot be raised for the first time onappeal or certiorari. Finally, this Court reiterates the principle that moral damages are designed to

compensate the claimant for actual injury suffered, not to impose a penalty on the wrongdoer. Hence,absent any definite finding as to what they consist of, the alleged moral damages suffered wouldbecome a penalty rather than a compensation for actual injury suffered.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the February 21,2001 Decision2 and the October 9, 2001 Resolution3 of the Court of Appeals (CA) in CA-GR CV

No. 29392. The challenged Decision disposed as follows:

"WHEREFORE, premises considered, the Decision dated June 29, 1990 in Civil Case No. Q-88-233should be AFFIRMED, with costs against the appellants."4

The assailed Resolution denied petitioners' Motion for Reconsideration.

The FactsThe CA summarized the facts in this manner:

"Sometime on February 28, 1988 at about 1:00 A.M., Fulgencio Dacara, Jr., son of Fulgencio P.Dacara, Sr. and owner of '87 Toyota Corolla 4-door Sedan with Plate No. 877 (sic), while driving thesaid vehicle, rammed into a pile of earth/street diggings found at Matahimik St., Quezon City, whichwas then being repaired by the Quezon City government. As a result, Dacarra (sic), Jr. allegedlysustained bodily injuries and the vehicle suffered extensive damage for it turned turtle when it hit the

pile of earth.

"Indemnification was sought from the city government (Record, p. 22), which however, yieldednegative results. Consequently, Fulgencio P. Dacara (hereinafter referred to as FULGENCIO), for andin behalf of his minor son, Jr., filed a Complaint (Record, p. 1) for damages against the Quezon Cityand Engr. Ramir Tiamzon, as defendants, before the Regional Trial Court, National Capital JudicialRegion, Branch 101, Quezon City, docketed as Civil Case No. Q-88-233. FULGENCIO prayed thatthe amount of not less than P20,000.00 actual or compensatory damages, P150,000.00 moraldamages, P30,000.00 exemplary damages, and P20,000.00 attorney's fees and costs of the suit beawarded to him.

"In an Answer with Affirmative and/or Special Defenses (Record, p. 11), defendants admitted theoccurrence of the incident but alleged that the subject diggings was provided with a moun[d] of soiland barricaded with reflectorized traffic paint with sticks placed before or after it which was visibleduring the incident on February 28, 1988 at 1:00 A.M. In short, defendants claimed that theyexercised due care by providing the area of the diggings all necessary measures to avoid accident.Hence, the reason why Fulgencio Dacara, Jr. fell into the diggings was precisely because of thelatter's negligence and failure to exercise due care."5

After trial on the merits, the Regional Trial Court (RTC), Branch 101, Quezon City, rendered itsDecision6 dated June 29, 1990. The evidence proffered by the complainant (herein respondent) was

found to be sufficient proof of the negligence of herein petitioners. Under Article 2189 of the CivilCode,7 the latter were held liable as follows:

"WHEREFORE, premises above considered, based on the quantum of evidence presented by theplaintiff which tilts in their favor elucidating the negligent acts of the city government together withits employees when considered in the light of Article 2189, judgment is hereby rendered ordering thedefendants to indemnify the plaintiff the sum of twenty thousand pesos as actual/compensatorydamages, P10,000.00 as moral damages, P5,000.00 as exemplary damages, P10,000.00 as attorney'sfees and other costs of suit."8

In their appeal to the CA, petitioners maintained that they had observed due diligence and care ininstalling preventive warning devices, and that it was in fact the plaintiff who had failed to exercise

prudence by driving too fast to avoid the diggings. Moreover, the lower court allegedly erred in usingArticle 2189 of the Civil Code, which supposedly applied only to liability for the death or injuriessuffered by a person, not for damage to property.

Ruling of the Court of Appeals

The CA agreed with the RTC's finding that petitioners' negligence was the proximate cause of thedamage suffered by respondent.9 Noting the failure of petitioners to present evidence to support theircontention that precautionary measures had indeed been observed, it ruled thus:

"x x x. Sadly, the evidence indicates that [petitioners] failed to show that they placed sufficient andadequate precautionary signs at Matahimik Street to minimize or prevent the dangers to life and limb

under the circumstances. Contrary to the testimony of the witnesses for the [petitioners], namelyEngr. Ramir Tiamzon, Ernesto Landrito and Eduardo Castillo, that there were signs, gasera whichwas buried so that its light could not be blown off by the wind and barricade, none was ever presentedto stress and prove the sufficiency and adequacy of said contention."10

Further upholding the trial court's finding of negligence on the part of herein petitioners, the CA gavethis opinion:

"x x x. As observed by the trial court, the negligence of [petitioners] was clear based on theinvestigation report of Pfc. William P. Villafranca stating to the effect 'that the subject vehiclerammed into a pile of earth from a deep excavation thereat without any warning devi[c]e whatsoeverand as a consequence thereof, Dacara, Jr. lost control of his driven car and finally turned-turtlecausing substantial damage to the same.' As a defense against liability on the basis of quasi-delict, onemust have exercised the diligence of a good father of a family which [petitioners] failed to establish inthe instant case."11

Whether Article 2189 is applicable to cases in which there has been no death or physical injury, theCA ruled in the affirmative:

"x x x. More importantly, we find it illogical to limit the liability to death or personal injury only asargued by appellants in the case at bar applying the foregoing provisions. For, injury is an act thatdamages, harms or hurts and mean in common as the act or result of inflicting on a person or thingsomething that causes loss, pain, distress, or impairment. Injury is the most comprehensive, applyingto an act or result involving an impairment or destruction of right, health, freedom, soundness, or lossof something of value."12

Hence, this Petition.13

Issues

Petitioners raise the following issues for our consideration:

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"1. The Honorable Court of Appeals decided a question of law/substance contrary to applicable lawand jurisprudence when it affirmed the award of moral damage suit (sic) the amount of P10,000.00.

2. The Honorable Court of Appeals decided a question of law/substance contrary to applicable lawand jurisprudence when it affirmed the award of exemplary damage sin (sic) the amount of P5,000.00and attorney's fee in the [a]mount of P10,000.00.

3. The Honorable Court of Appeals gravely erred and/;or (sic) had acted with grave abuse of

discretion amounting to lack and/or excess of jurisdiction when it refused to hold that respondent'sson in the person of Fulgencio Dacara, Jr. was negligent at the time of incident."14

Because the issues regarding the liability of petitioners for moral and exemplary damages presupposethat their negligence caused the vehicular accident, we first resolve the question of negligence or the

proximate cause of the incident.

The Court's Ruling

The Petition is partly meritorious.

First Issue:

Negligence

Maintaining that they were not negligent, petitioners insist that they placed all the necessaryprecautionary signs to alert the public of a roadside construction. They argue that the driver(Fulgencio Dacara Jr.) of respondent's car was overspeeding, and that his own negligence wastherefore the sole cause of the incident.

Proximate cause is defined as any cause that produces injury in a natural and continuous sequence,unbroken by any efficient intervening cause, such that the result would not have occurredotherwise.15 Proximate cause is determined from the facts of each case, upon a combinedconsideration of logic, common sense, policy and precedent.16

What really caused the subject vehicle to turn turtle is a factual issue that this Court cannot pass upon,absent any whimsical or capricious exercise of judgment by the lower courts or an ample showingthat they lacked any basis for their conclusions.17 The unanimity of the CA and the trial court in theirfactual ascertainment that petitioners' negligence was the proximate cause of the accident bars us fromsupplanting their findings and substituting these with our own. The function of this Court is limited tothe review of the appellate court's alleged errors of law. It is not required to weigh all over again thefactual evidence already considered in the p roceedings below.18 Petitioners have not shown that theyare entitled to an exception to this rule.19 They have not sufficiently demonstrated any specialcircumstances to justify a factual review.

That the negligence of petitioners was the proximate cause of the accident was aptly discussed in thelower court's finding, which we quote:

"Facts obtaining in this case are crystal clear that the accident of February 28, 1988 which causedalmost the life and limb of Fulgencio Dacara, Jr. when his car turned turtle was the existence of a pileof earth from a digging done relative to the base failure at Matahimik Street nary a lighting device ora reflectorized barricade or sign perhaps which could have served as an adequate warning to motoristespecially during the thick of the night where darkness is pervasive.

"Contrary to the testimony of the witnesses for the defense that there were signs, gasera which wasburied so that its light could not be blown off by the wind and barricade, none was ever presented to

stress the point that sufficient and adequate precautionary signs were placed at Matahimik Street. Ifindeed signs were placed thereat, how then could it be explained that according to the report even ofthe policeman which for clarity is quoted again, none was found at the scene of the accident.

x x x x x x x x x

"Negligence of a person whether natural or juridical over a particular set of events is transfixed by theattending circumstances so that the greater the danger known or reasonably anticipated, the greater isthe degree of care required to be observed.

x x x x x x x x x

"The provisions of Article 2189 of the New Civil Code capsulizes the responsibility of the citygovernment relative to the maintenance of roads and bridges since it exercises the control andsupervision over the same. Failure of the defendant to comply with the statutory provision found inthe subject-article is tantamount to negligence per se which renders the City government liable. Harshapplication of the law ensues as a result thereof but the state assumed the responsibility for themaintenance and repair of the roads and bridges and neither exception nor exculpation from liabilitywould deem just and equitable."20 (Emphasis supplied)

Petitioners belatedly point out that Fulgencio Jr. was driving at the speed of 60 kilometers per hour(kph) when he met the accident. This speed was allegedly well above the maximum limit of 30 kphallowed on "city streets with light traffic, when not designated 'through streets,'" as provided underthe Land Transportation and Traffic Code (Republic Act 4136). Thus, petitioners assert that

Fulgencio Jr., having violated a traffic regulation, should be presumed negligent pursuant to Article218521 of the Civil Code.22

These matters were, however, not raised by petitioners at any time during the trial. It is evident fromthe records that they brought up for the first time the matter of violation of RA 4136 in their Motionfor Reconsideration23 of the CA Decision dated February 21, 2001. It is too late in the day for themto raise this new issue. It is well-settled that points of law, theories or arguments not brought out inthe original proceedings cannot be considered on review or appeal.24 To consider their belatedlyraised arguments at this stage of the proceedings would trample on the basic principles of fair play,

justice, and due process.25

Indeed, both the trial and the appellate courts' findings, which are amply substantiated by the evidenceon record, clearly point to petitioners' negligence as the proximate cause of the damages suffered byrespondent's car. No adequate reason has been given to overturn this factual conclusion.

Second Issue:

Moral Damages

Petitioners argue that moral damages are recoverable only in the instances specified in Article 221926of the Civil Code. Although the instant case is an action for quasi-delict, petitioners contend thatmoral damages are not recoverable, because no evidence of physical injury were presented before thetrial court.27

To award moral damages, a court must be satisfied with proof of the following requisites: (1) aninjury -- whether physical, mental, or psychological -- clearly sustained by the claimant; (2) aculpable act or omission factually established; (3) a wrongful act or omission of the defendant as the

proximate cause of the injury sustained by the claimant; and (4) the award of damages predicated onany of the cases stated in Article 2219.28

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Article 2219(2) specifically allows moral damages to be recovered for quasi-delicts, provided that theact or omission caused physical injuries. There can be no recovery of moral damages unless the quasi-delict resulted in physical injury.29 This rule was enunciated in Malonzo v. Galang30 as follows:

"x x x. Besides, Article 2219 specifically mentions 'quasi-delicts causing physical injuries,' as aninstance when moral damages may be allowed, thereby implying that all other quasi-delicts notresulting in physical injuries are excluded, excepting of course, the special torts referred to in Art. 309(par. 9, Art. 2219) and in Arts. 21, 26, 27, 28, 29, 30, 32, 34 and 35 on the chapter on human relations(par. 10, Art. 2219)."

In the present case, the Complaint alleged that respondent's son Fulgencio Jr. sustained physicalinjuries. The son testified that he suffered a deep cut on his left arm when the car overturned afterhitting a pile of earth that had been left in the open without any warning device whatsoever.

It is apparent from the Decisions of the trial and the appellate courts, however, that no other evidence(such as a medical certificate or proof of medical expenses) was presented to prove Fulgencio Jr.'s

bare assertion of physical injury. Thus, there was no credible proof that would justify an award ofmoral damages based on Article 2219(2) of the Civil Code.

Moreover, the Decisions are conspicuously silent with respect to the claim of respondent that hismoral sufferings were due to the negligence of petitioners. The Decision of the trial court, whichsummarizes the testimony of respondent's four witnesses, makes no mention of any statementregarding moral suffering, such as mental anguish, besmirched reputation, wounded feelings, socialhumiliation and the like.

Moral damages are not punitive in nature, but are designed to compensate and alleviate in some waythe physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, woundedfeelings, moral shock, social humiliation, and similar injury unjustly inflicted on a person.31 Intendedfor the restoration of the psychological or emotional status quo ante, the award of moral damages isdesigned to compensate emotional injury suffered, not to impose a penalty on the wrongdoer.

For the court to arrive upon a judicious approximation of emotional or moral injury, competent andsubstantial proof of the suffering experienced must be laid before it. Essential to this approximationare definite findings as to what the supposed moral damages suffered consisted of; otherwise, suchdamages would become a penalty rather than a compensation for actual injury suffered.32

Furthermore, well-settled is the rule that moral damages cannot be awarded -- whether in a civil33 ora criminal case34 -- in the absence of proof of physical suffering, mental anguish, fright, seriousanxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, or similarinjury.35 The award of moral damages must be solidly anchored on a definite showing thatrespondent actually experienced emotional and mental sufferings. Mere allegations do not suffice;they must be substantiated by clear and convincing proof.36

Third Issue:

Exemplary Damages

Petitioners argue that exemplary damages and attorney's fees are not recoverable. Allegedly, the RTCand the CA "did not find that petitioners were guilty of gross negligence in the performance of theirduty and responsibilities."37

Exemplary damages cannot be recovered as a matter of right.38 While granting them is subject to thediscretion of the court, they can be awarded only after claimants have shown their entitlement tomoral, temperate or compensatory damages.39 In the case before us, respondent sufficiently proved

before the courts a quo that petitioners' negligence was the proximate cause of the incident, thereby

establishing his right to actual or compensatory damages. He has adduced adequate proof to justifyhis claim for the damages caused his car. The question that remains, therefore, is whether exemplarydamages may be awarded in addition to compensatory damages.

Article 2231 of the Civil Code mandates that in cases of quasi-delicts, exemplary damages may berecovered if the defendant acted with gross negligence.40 Gross negligence means such utter want ofcare as to raise a presumption that the persons at fault must have been conscious of the probableconsequences of their carelessness, and that they must have nevertheless been indifferent (or worse)to the danger of injury to the person or property of others.41 The negligence must amount to a

reckless disregard for the safety of persons or property. Such a circumstance obtains in the instantcase.

A finding of gross negligence can be discerned from the Decisions of both the CA and the trial court.We quote from the RTC Decision:

"Sad to state that the City Government through its instrumentalities have (sic) failed to show themodicum of responsibility, much less, care expected of them (sic) by the constituents of this City. It iseven more deplorable that it was a case of a street digging in a side street which caused the accident inthe so-called 'premier city.'"421avvphi1.zw+

The CA reiterated the finding of the trial court that petitioners' negligence was clear, considering thatthere was no warning device whatsoever43 at the excavation site.

The facts of the case show a complete disregard by petitioners of any adverse consequence of their

failure to install even a single warning device at the area under renovation. Considering further thatthe street was dimly lit,44 the need for adequate precautionary measures was even greater. Bycarrying on the road diggings without any warning or barricade, petitioners demonstrated a wantondisregard for public safety. Indeed, the February 28, 1988 incident was bound to happen due to theirgross negligence. It is clear that under the circumstances, there is sufficient factual basis for a findingof gross negligence on their part.

Article 2229 of the Civil Code provides that exemplary damages may be imposed by way of exampleor correction for the public good. The award of these damages is meant to be a deterrent to sociallydeleterious actions.45 Public policy requires such imposition to suppress wanton acts of anoffender.46 It must be emphasized that local governments and their employees should be responsiblenot only for the maintenance of roads and streets, but also for the safety of the public. Thus, they mustsecure construction areas with adequate precautionary measures.

Not only is the work of petitioners impressed with public interest; their very existence is justified onlyby public service. Hence, local governments have the paramount responsibility of keeping theinterests of the public foremost in their agenda. For these reasons, it is most disturbing to note that the

present petitioners are the very parties responsible for endangering the public through such a rash andreckless act.

WHEREFORE, the Petition is hereby PARTLY GRANTED. The Decision of the Court of Appeals isAFFIRMED, with the MODIFICATION that the award of moral damages is DELETED. No costs.

SO ORDERED.

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7. DE ROY V. CA (1988)

This special civil action for certiorari seeks to declare null and void two (2) resolutions of the SpecialFirst Division of the Court of Appeals in the case of Luis Bernal, Sr., et al. v. Felisa Perdosa De Roy,et al., CA-G.R. CV No. 07286. The first resolution promulgated on 30 September 1987 denied

petitioners' motion for extension of time to file a motion for reconsideration and directed entry ofjudgment since the decision in said case had become final; and the second Resolution dated 27October 1987 denied petitioners' motion for reconsideration for having been filed out of time.

At the outset, this Court could have denied the petition outright for not being verified as required byRule 65 section 1 of the Rules of Court. However, even if the instant petition did not suffer from thisdefect, this Court, on procedural and substantive grounds, would still resolve to deny it.

The facts of the case are undisputed. The firewall of a burned-out building owned by petitionerscollapsed and destroyed the tailoring shop occupied by the family of private respondents, resulting ininjuries to private respondents and the death of Marissa Bernal, a daughter. Private respondents had

been warned by petitioners to vacate their shop in view of its proximity to the weakened wall but theformer failed to do so. On the basis of the foregoing facts, the Regional Trial Court. First JudicialRegion, Branch XXXVIII, presided by the Hon. Antonio M. Belen, rendered judgment finding

petitioners guilty of gross negligence and awarding damages to private respondents. On appeal, thedecision of the trial court was affirmed in toto by the Court of Appeals in a decision promulgated onAugust 17, 1987, a copy of which was received by petitioners on August 25, 1987. On September 9,1987, the last day of the fifteen-day period to file an appeal, petitioners filed a motion for extension oftime to file a motion for reconsideration, which was eventually denied by the appellate court in theResolution of September 30, 1987. Petitioners filed their motion for reconsideration on September 24,1987 but this was denied in the Resolution of October 27, 1987.

This Court finds that the Court of Appeals did not commit a grave abuse of discretion when it deniedpetitioners' motion for extension of time to file a motion for reconsideration, directed entry ofjudgment and denied their motion for reconsideration. It correctly applied the rule laid down inHabaluyas Enterprises, Inc. v. Japzon, [G.R. No. 70895, August 5, 1985,138 SCRA 461, that thefifteen-day period for appealing or for filing a motion for reconsideration cannot be extended. In itsResolution denying the motion for reconsideration, promulgated on July 30, 1986 (142 SCRA 208),this Court en banc restated and clarified the rule, to wit:

Beginning one month after the promulgation of this Resolution, the rule shall be strictly enforced thatno motion for extension of time to file a motion for reconsideration may be filed with theMetropolitan or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate AppellateCourt. Such a motion may be filed only in cases pending with the Supreme Court as the court of lastresort, which may in its sound discretion either grant or deny the extension requested. (at p. 212)

Lacsamana v. Second Special Cases Division of the intermediate Appellate Court, [G.R. No. 73146-53, August 26, 1986, 143 SCRA 643], reiterated the rule and went further to restate and clarify themodes and periods of appeal.

Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept. 15, 1986,144 SCRA 161],stressedthe prospective application of said rule, and explained the operation of the grace period, to wit:

In other words, there is a one-month grace period from the promulgation on May 30, 1986 of theCourt's Resolution in the clarificatory Habaluyas case, or up to June 30, 1986, within which the rule

barring extensions of time to file motions for new trial or reconsideration is, as yet, not strictlyenforceable.

Since petitioners herein filed their motion for extension on February 27, 1986, it is still within thegrace period, which expired on June 30, 1986, and may still be allowed.

This grace period was also applied in Mission v. Intermediate Appellate Court [G.R. No. 73669,October 28, 1986, 145 SCRA 306].]

In the instant case, however, petitioners' motion for extension of time was f iled on September 9, 1987,more than a year after the expiration of the grace period on June 30, 1986. Hence, it is no longerwithin the coverage of the grace period. Considering the length of time from the expiration of thegrace period to the promulgation of the decision of the Court of Appeals on August 25, 1987,

petitioners cannot seek refuge in the ignorance of their counsel regarding said rule for their failure to

file a motion for reconsideration within the reglementary period.Petitioners contend that the rule enunciated in the Habaluyas case should not be made to apply to thecase at bar owing to the non-publication of the Habaluyas decision in the Official Gazette as of thetime the subject decision of the Court of Appeals was promulgated. Contrary to petitioners' view,there is no law requiring the publication of Supreme Court decisions in the Official Gazette beforethey can be binding and as a condition to their becoming effective. It is the bounden duty of counselas lawyer in active law practice to keep abreast of decisions of the Supreme Court particularly whereissues have been clarified, consistently reiterated, and published in the advance reports of SupremeCourt decisions (G. R. s) and in such publications as the Supreme Court Reports Annotated (SCRA)and law journals.

This Court likewise finds that the Court of Appeals committed no grave abuse of discretion inaffirming the trial court's decision holding petitioner liable under Article 2190 of the Civil Code,which provides that "the proprietor of a building or structure is responsible for the damage resultingfrom its total or partial collapse, if it should be due to the lack of necessary repairs.

Nor was there error in rejecting petitioners argument that private respondents had the "last clearchance" to avoid the accident if only they heeded the. warning to vacate the tailoring shop and ,therefore, petitioners prior negligence should be disregarded, since the doctrine of "last clear chance,"which has been applied to vehicular accidents, is inapplicable to this case.

WHEREFORE, in view of the foregoing, the Court Resolved to DENY the instant petition for lack ofmerit.

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9. GELISAN V. ALDAY (1987)

Review on certiorari of the judgment * rendered by the Court of Appeals, dated 11 October 1968, asamended by its resolution, dated 11 February 1969, in CA-G.R. No. 32670-R, entitled: "BenitoAlday, plaintiff-appellant, vs. Roberto Espiritu and Bienvenido Gelisan, defendants-appellees," whichordered the herein petitioner Bienvenido Gelisan to pay, jointly and severally, with Roberto Espiritu,the respondent Benito Alday the amount of P5,397.30, with. legal interest thereon from the filing ofthe complaint, and the costs of suit; and for the said Roberto Espiritu to pay or refund the petitionerBienvenido Gelisan whatever amount the latter may have paid to the respondent Benito Alday by

virtue of the judgment.The uncontroverted facts of the case are, as follows:

Defendant Bienvenido Gelisan is the owner of a freight truck bearing plate No. TH-2377. On January31, 1962, defendant Bienvenido Gelisan and Roberto Espiritu entered into a contract marked Exhibit3-Gelisan under which Espiritu hired the same freight truck of Gelisan for the purpose of hauling rice,sugar, flour and fertilizer at an agreed price of P18.00 per trip within the limits of the City of Manila

provided the loads shall not exceed 200 sacks. It is also agreed that Espiritu shall bear and pay alllosses and damages attending the carriage of the goods to be hauled by him. The truck was taken by adriver of Roberto Espiritu on February 1, 1962. Plaintiff Benito Alday, a trucking operator, and whoowns about 15 freight trucks, had known the defendant Roberto Espiritu since 1948 as a truckoperator. Plaintiff had a contract to haul the fertilizers of the Atlas Fertilizer Corporation from Pier 4,

North Harbor, to its Warehouse in Mandaluyong. Alday met Espiritu at the gate of Pier 4 and thelatter offered the use of his truck with the driver and helper at 9 centavos per bag of fertilizer. Theoffer was accepted by plaintiff Alday and he instructed his checker Celso Henson to let RobertoEspiritu haul the fertilizer. Espiritu made two hauls of 200 bags of fertilizer per trip. The fertilizer wasdelivered to the driver and helper of Espiritu with the necessary way bill receipts, Exhibits A and B.Espiritu, however, did not deliver the fertilizer to the Atlas Fertolizer bodega at Mandaluyong. Thesignatures appearing in the way bill receipts Exhibits A and B of the Alday Transportation admittedlynot the signature of any representative or employee of the Atlas Fertilizer Corporation. RobertoEspiritu could not be found, and plaintiff reported the loss to the Manila Police Department. RobertoEspiritu was later arrested and booked for theft. ...

Subsequently, plaintiff Aiday saw the truck in question on Sto. Cristo St. and he notified the ManilaPolice Department, and it was impounded by the police. It was claimed by Bienvenido Gelisan fromthe Police Department after he had been notified by his employees that the truck had been impounded

by the police; but as he could not produce at the time the registration papers, the police would notrelease the truck to Gelisan. As a result of the impounding of the truck according to Gelisan, ... andthat for the release of the truck he paid the premium of P300 to the surety company. 1

Benito Alday was compelled to pay the value of the 400 bags of fertilizer, in the amount ofP5,397.33, to Atlas Fertilizer Corporation so that, on 12 February 1962, he (Alday) filed a complaintagainst Roberto Espiritu and Bienvenido Gelisan with the Court of First Instance of Manila, docketedtherein as Civil Case No. 49603, for the recovery of damages suffered by him thru the criminal actscommitted by the defendants.

The defendant, Roberto Espiritu failed to file an answer and was, accordingly, declared in default.

The defendant, Bienvenido Gelisan, upon the other hand, d isowned responsibility. He claimed that hehad no contractual relations with the plaintiff Benito Alday as regards the hauling and/or delivery ofthe 400 bags of fertilizer mentioned in the complaint; that the alleged misappropriation or nondelivery

by defendant Roberto Espiritu of plaintiff's 400 bags of fertilizer, was entirely beyond his (Gelisan's)control and knowledge, and which fact became known to him, for the first time, on 8 February 1962when his freight truck, with plate No. TH-2377, was impounded by the Manila Police Department, atthe instance of the plaintiff; and that in his written contract of hire with Roberto Espiritu, it was

expressly provided that the latter will bear and pay all loss and damages attending the carriage ofgoods to be hauled by said Roberto Espiritu.

After trial, the Court of First Instance of Manila ruled that Roberto Espiritu alone was liable to BenitoAlday, since Bienvenido Gelisan was not privy to the contract between Espiritu and Alday. Thedispositive portion of the decision reads, as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendantRoberto Espiritu for the sum of P6,000 with interest at the legal rate from the time of the filing of the

complaint, and the costs of the suit. Plantiff's complaint is dismissed with respect to defendantBienvenido Gelisan, and judgment is rendered in favor of defendant Bienvenido Gelisan and againstthe plaintiff for the sum of P350. 2

On appeal, however, the Court of Appeals, citing the case of Montoya vs. Ignacio, 3 found thatBienvenido Gelisan is likewise liable for being the registered owner of the truck; and that the leasecontract, executed by and between Bienvenido Gelisan and Roberto Espiritu, is not binding uponBenito Alday for not having been previously approved by the Public Service Commission.Accordingly, it sentenced Bienvenido Gelisan to pay, jointly and severally with Roberto Espiritu,Benito Alday the amount of P5,397.30, with legal interest thereon from the filing of the complaint;and to pay the costs. Roberto Espiritu, in turn, was ordered to pay or refund Bienvenido Gelisanwhatever amount the latter may have paid to Benito Alday