CARAVAN TRAVEL v. ABEJAR 5. The cost of suit.
SO ORDERED.31
SECOND DIVISION
G.R. No. 170631, February 10, 2016
CARAVAN TRAVEL AND TOURS INTERNATIONAL, INC., Petitioner,
v. ERMILINDA R. ABEJAR, Respondent.
DECISION
LEONEN, J.:
The plaintiff may first prove the employer's ownership of the vehicle
involved in a mishap by presenting the vehicle's registration in
evidence. Thereafter, a disputable presumption that the requirements
for an employer's liability under Article 21801 of the Civil Code have
been satisfied will arise. The burden of evidence then shifts to the
defendant to show that no liability under Article 2180 has ensued. This
case, thus, harmonizes the requirements of Article 2180, in relation to
Article 21762 of the Civil Code, and the so-called registered-owner rule
as established in this court's rulings in Aguilar, Sr. v. Commercial
Savings Bank,3Del Carmen, Jr. v. Bacoy,4Filcar Transport Services v.
Espinas,5 and Mendoza v. Spouses Gomez.6
Through this Petition for Review on Certiorari, 7 Caravel Travel and
Tours International, Inc. (Caravan) prays that the Decision 8 dated
October 3, 2005 and the Resolution9 dated November 29, 2005 of the
Court of Appeals Twelfth Division be reversed and set aside.10
On July 13, 2000, Jesmariane R. Reyes (Reyes) was walking along
the west-bound lane of Sampaguita Street, United Paraaque
Subdivision IV, Paraaque City.11 A Mitsubishi L-300 van with plate
number PKM 19512 was travelling along the east-bound lane, opposite
Reyes.13 To avoid an incoming vehicle, the van swerved to its left and
hit Reyes.14 Alex Espinosa (Espinosa), a witness to the accident, went
to her aid and loaded her in the back of the van. 15 Espinosa told the
driver of the van, Jimmy Bautista (Bautista), to bring Reyes to the
hospital.16 Instead of doing so, Bautista appeared to have left the van
parked inside a nearby subdivision with Reyes still in the van. 17
Fortunately for Reyes, an unidentified civilian came to help and drove
Reyes to the hospital.18
Upon investigation, it was found that the registered owner of the van
was Caravan.19 Caravan is a corporation engaged in the business of
organizing travels and tours.20 Bautista was Caravan's employee
assigned to drive the van as its service driver.21
Caravan shouldered the hospitalization expenses of Reyes. 22 Despite
medical attendance, Reyes died two (2) days after the accident.23
Respondent Ermilinda R. Abejar (Abejar), Reyes' paternal aunt and the
person who raised her since she was nine (9) years old,24 filed before
the Regional Trial Court of Paraaque a Complaint 25 for damages
against Bautista and Caravan. In her Complaint, Abejar alleged that
Bautista was an employee of Caravan and that Caravan is the
registered owner of the van that hit Reyes.26
Summons could not be served on Bautista. 27 Thus, Abejar moved to
drop Bautista as a defendant.28 The Regional Trial Court granted her
Motion.29
After trial, the Regional Trial Court found that Bautista was grossly
negligent in driving the vehicle. 30 It awarded damages in favor of
Abejar, as follows:
WHEREFORE, considering that the [respondent] was able to provide
by preponderance of evidence her cause of action against the
defendants, judgment is hereby rendered ordering defendants JIMMY
BAUTISTA and CARAVAN TRAVEL and TOURS[,] INC., to jointly and
solidarity pay the plaintiff, the following, to wit:
1. The amount of P35,000.00 representing actual damages;
2. The amount of P300,000.00 as moral damages;
3. The amount of P30,000.00 as exemplary damages;
4. The amount of P50,000.00 as and by way of attorney's fees; and
Caravan's Motion for Reconsideration 32 was denied through the
October 20, 2003 Order33 of the Regional Trial Court.
The Court of Appeals affirmed with modification the Regional Trial
Court's July 31, 2003 Decision and October 20, 2003 Order, as follows:
WHEREFORE, premises considered, the instant appeal is DENIED for
lack of merit. The assailed Decision dated 31 July 2003 and Order
dated 20 October 2003 of the Regional Trial Court, City of
Para[]aque, Branch 258, in Civil Case No. 00-0447 are AFFIRMED
with the following MODIFICATIONS:
1. Moral Damages is REDUCED to Php 200,000.00;
2. Death Indemnity of Php 50,000.00 is awarded;
3. The Php 35,000.00 actual damages, Php 200,000.00 moral
damages, Php 30,000.00 exemplary damages and Php 50,000.00
attorney's fees shall earn interest at the rate of 6% per annum
computed from 31 July 2003, the date of the [Regional Trial Court's]
decision; and upon finality of this Decision, all the amounts due shall
earn interest at the rate of 12% per annum, in lieu of 6% per annum,
until full payment; and
4. The Php 50,000.00 death indemnity shall earn interest at the
rate of 6% per annum computed from the date of promulgation of this
Decision; and upon finality of this Decision, the amount due shall earn
interest at the rate of 12% per annum, in lieu of 6% per annum, until
full payment.
Costs against [Caravan].
SO ORDERED.34
Caravan filed a Motion for Reconsideration, but it was denied in the
Court of Appeals' assailed November 29, 2005 Resolution.35
Hence, this Petition was filed.
Caravan argues that Abejar has no personality to bring this suit
because she is not a real party in interest. According to Caravan,
Abejar does not exercise legal or substitute parental authority. She is
also not the judicially appointed guardian or the only living relative of
the deceased.36 She is also not "the executor or administrator of the
estate of the deceased."37 According to Caravan, only the victim herself
or her heirs can enforce an action based on culpa aquiliana such as
Abejar's action for damages.38
Caravan adds that Abejar offered no documentary or testimonial
evidence to prove that Bautista, the driver, acted "within the scope of
his assigned tasks"39 when the accident occurred.40 According to
Caravan, Bautista's tasks only pertained to the transport of company
personnel or products, and when the accident occurred, he had not
been transporting personnel or delivering products of and for the
company.41
Caravan also argues that "it exercised the diligence of a good father of
a family in the selection and supervision of its employees." 42
Caravan further claims that Abejar should not have been awarded
moral damages, actual damages, death indemnity, exemplary
damages, and attorney's fees.43 It questions the Certificate provided by
Abejar as proof of expenses since its signatory, a certain Julian
Pealoza (Pealoza), was not presented in court, and Caravan was
denied the right to cross-examine him.44 Caravan argues that the
statements in the Certification constitute hearsay.45 It also contends
that based on Article 2206(3)46 of the Civil Code, Abejar is not entitled
to moral damages.47 It insists that moral and exemplary damages
should not have been awarded to Abejar because Caravan acted in
good faith.48 Considering that moral and exemplary damages are
unwarranted, Caravan claims that the award of attorney's fees should
have also been removed.49
Lastly, Caravan argues that it should not be held solidarily liable with
Bautista since Bautista was already dropped as a party.50
Abejar counters that Caravan failed to provide proof that it exercised
the requisite diligence in the selection and supervision of Bautista. 51
She adds that the Court of Appeals' ruling that Caravan is solidarily
liable with Bautista for moral damages, exemplary damages, civil
indemnity ex delicto, and attorney's fees should be upheld.52 Abejar
argues that since Caravan is the registered owner of the van, it is
directly, primarily, and solidarity liable for the tortious acts of its driver.53
For resolution are the following issues:
First, whether respondent Ermilinda R. Abejar is a real party in interest
who may bring an action for damages against petitioner Caravan
Travel and Tours International, Inc. on account of Jesmariane R.
Reyes' death; and
Second, whether petitioner should be held liable as an employer,
pursuant to Article 2180 of the Civil Code.
We deny the Petition.
I parents, nothing prevents persons exercising substitute parental
Having exercised substitute parental authority, respondent suffered
actual loss and is, thus, a real party in interest in this case.
In her Complaint, respondent made allegations that would sustain her
action for damages: that she exercised substitute parental authority
over Reyes; that Reyes' death was caused by the negligence of
petitioner and its driver; and that Reyes' death caused her damage. 54
Respondent properly filed an action based on quasi-delict. She is a
real party in interest.
Rule 3, Section 2 of the 1997 Rules of Civil Procedure defines a real
party in interest:
RULE 3. Parties to Civil Actions
. . . .
SECTION 2. Parties in Interest. A real party in interest is the party
who stands to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit. Unless otherwise authorized by
law or these Rules, every action must be prosecuted or defended in
the name of the real party in interest.
"To qualify a person to be a real party in interest in whose name an
action must be prosecuted, he [or she] must appear to be the present
real owner of the right sought to be enforced." 55 Respondent's capacity
to file a complaint against petitioner stems from her having exercised
substitute parental authority over Reyes.
Article 216 of the Family Code identifies the persons who exercise
substitute parental authority:
Art. 216. In default of parents or a judicially appointed guardian, the
following persons shall exercise substitute parental authority over the
child in the order indicated:
(1) The surviving grandparent, as provided in Art.
(2) The oldest brother or sister, over twenty-one years of age, unless
unfit or disqualified; and
(3) The child's actual custodian, over twenty-one years of age, unless
unfit or disqualified.
Whenever the appointment or a judicial guardian over the property of
the child becomes necessary, the same order of preference shall be
observed. (Emphasis supplied)
Article 233 of the Family Code provides for the extent of authority of
persons exercising substitute parental authority, that is, the same as
those of actual parents:
Art. 233. The person exercising substitute parental authority shall have
the same authority over the person of the child as the parents.
(Emphasis supplied)
Both of Reyes' parents are already deceased.57 Reyes' paternal
grandparents are also both deceased.58 The whereabouts of Reyes'
maternal grandparents are unknown.59 There is also no record that
Reyes has brothers or sisters. It was under these circumstances that
respondent took custody of Reyes when she was a child, assumed the
role of Reyes' parents, and thus, exercised substitute parental authority
over her.60 As Reyes' custodian, respondent exercised the full extent of
the statutorily recognized rights and duties of a parent. Consistent with
Article 22061 of the Family Code, respondent supported Reyes'
education62 and provided for her personal needs.63 To echo
respondent's words in her Complaint, she treated Reyes as if she were
her own daughter.64
Respondent's right to proceed against petitioner, therefore, is based on
two grounds.
First, respondent suffered actual personal loss. With her affinity for
Reyes, it stands to reason that when Reyes died, respondent suffered
the same anguish that a natural parent would have felt upon the loss of
one's child. It is for this injury as authentic and personal as that of a
natural parent that respondent seeks to be indemnified.
Second, respondent is capacitated to do what Reyes' actual parents
would have been capacitated to do.
In Metro Manila Transit Corporation v. Court of Appeals,65Tapdasan, Jr.
v. People,66 and Aguilar, Sr. v. Commercial Savings Bank,67 this court
allowed natural parents of victims to recover damages for the death of
their children. Inasmuch as persons exercising substitute parental
authority have the full range of competencies of a child's actual
authority from similarly possessing the right to be indemnified for their
ward's death.
We note that Reyes was already 18 years old when she died. Having
reached the age of majority, she was already emancipated upon her
death. While parental authority is terminated upon emancipation, 68
respondent continued to support and care for Reyes even after she
turned 18.69 Except for the legal technicality of Reyes' emancipation,
her relationship with respondent remained the same. The anguish and
damage caused to respondent by Reyes' death was no different
because of Reyes' emancipation.
In any case, the termination of respondent's parental authority is not an
insurmountable legal bar that precludes the filing of her Complaint. In
interpreting Article 190270 of the old Civil Code, which is substantially
similar to the first sentence of Article 2176 71 of the Civil Code, this court
in The Receiver For North Negros Sugar Company, Inc. v. Ybaez, et
al.72 ruled that brothers and sisters may recover damages, except
moral damages, for the death of their sibling. 73 This court declared that
Article 1902 of the old Civil Code (now Article 2176) is broad enough to
accommodate even plaintiffs who are not relatives of the deceased,
thus:74
This Court said: "Article 1902 of the Civil Code declares that any
person who by an act or omission, characterized by fault or
negligence, causes damage to another shall be liable for the damage
done ... a person is liable for damage done to another by any culpable
act; and by any culpable act is meant any act which is blameworthy
when judged by accepted legal standards. The idea thus expressed is
undoubtedly broad enough to include any rational conception of liability
for the tortious acts likely to be developed in any society." The word
"damage" in said article, comprehending as it does all that are
embraced in its meaning, includes any and all damages that a human
being may suffer in any and all the manifestations of his life: physical
or material, moral or psychological, mental or spiritual, financial,
economic, social, political, and religious.
214; 56
It is particularly noticeable that Article 1902 stresses the passive
subject of the obligation to pay damages caused by his fault or
negligence. The article does not limit or specify the active subjects,
much less the relation that must exist between the victim of the culpa
aquiliana and the person who may recover damages, thus warranting
the inference that, in principle, anybody who suffers any damage from
culpa aquiliana, whether a relative or not of the victim, may recover
damages from the person responsible therefor[.]75 (Emphasis supplied,
citations omitted)
II
Respondent's Complaint is anchored on an employer's liability for
quasi-delict provided in Article 2180, in relation to Article 2176 of the
Civil Code. Articles 2176 and 2180 read:
ARTICLE 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. . . . . .
ARTICLE 2180. The obligation imposed by article 2176 is demandable
not only for one's own acts or omissions, but also for those of persons
for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in
their company.
Guardians are liable for damages caused by the minors or selection and supervision of the employee. . . . .
incapacitated persons who are under their authority and live in their
company.
Since there is paucity of evidence that ABAD was acting within the
scope of the functions entrusted to him, petitioner CASTILEX had no
The owners and managers of an establishment or enterprise are
duty to show that it exercised the diligence of a good father of a family
likewise responsible for damages caused by their employees in the
in providing ABAD with a service vehicle. Thus, justice and equity
service of the branches in which the latter are employed or on the
require that petitioner be relieved of vicarious liability for the
occasion of their functions.
consequences of the negligence of ABAD in driving its vehicle.
(Emphasis supplied, citations omitted)87
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
Aguilar, Sr. v. Commercial Savings Bank recognized the seeming
even though the former are not engaged in any business or industry.
conflict between Article 2180 and the registered-owner rule and applied
the latter.88
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
In Aguilar, Sr., a Mitsubishi Lancer, registered in the name of
whom the task done properly pertains, in which case what is provided
Commercial Savings Bank and driven by the bank's assistant vice-
in article 2176 shall be applicable.
president Ferdinand Borja, hit Conrado Aguilar, Jr. The impact killed
Conrado Aguilar, Jr. His father, Conrado Aguilar, Sr. filed a case for
Lastly, teachers or heads of establishments of arts and trades shall be
damages against Ferdinand Borja and Commercial Savings Bank. The
liable for damages caused by their pupils and students or apprentices,
Regional Trial Court found Commercial Savings Bank solidarity liable
so long as they remain in their custody.
with Ferdinand Borja.89

The responsibility treated of in this article shall cease when the

However, the Court of Appeals disagreed with the trial court's Decision
persons herein mentioned prove that they observed all the diligence of
and dismissed the complaint against the bank. The Court of Appeals
a good father of a family to prevent damage. (Emphasis supplied)
reasoned that Article 2180 requires the plaintiff to prove that at the
time of the accident, the employee was acting within the scope of his
Contrary to petitioner's position, it was not fatal to respondent's cause
or her assigned tasks. The Court of Appeals found no evidence that
that she herself did not adduce proof that Bautista acted within the
Ferdinand Borja was acting as the bank's assistant vice-president at
scope of his authority. It was sufficient that Abejar proved that petitioner
the time of the accident.90
was the registered owner of the van that hit Reyes.
The Court of Appeals' ruling was reversed by this court. 91Aguilar, Sr.
The resolution of this case must consider two (2) rules. First, Article
reiterated the following pronouncements made in Erezo in ruling that
2180's specification that "[e]mployers shall be liable for the damages
the bank, as the registered owner of the vehicle, was primarily liable to
caused by their employees . . . acting within the scope of their
the plaintiff:92
assigned tasks[.]" Second, the operation of the registered-owner rule
that registered owners are liable for death or injuries caused by the
The main aim of motor vehicle registration is to identify the owner so
operation of their vehicles.76
that if any accident happens, or that any damage or injury is caused by
the vehicle on the public highways, responsibility therefor can be fixed
These rules appear to be in conflict when it comes to cases in which
on a definite individual, the registered owner.
the employer is also the registered owner of a vehicle. Article 2180
requires proof of two things: first, an employment relationship between
A victim of recklessness on the public highways is usually without
the driver and the owner; and second, that the driver acted within the
means to discover or identify the person actually causing the injury or
scope of his or her assigned tasks. On the other hand, applying the
damage. He has no means other than by a recourse to the registration
registered-owner rule only requires the plaintiff to prove that the
in the Motor Vehicles Office to determine who is the owner. The
defendant-employer is the registered owner of the vehicle.
protection that the law aims to extend to him would become illusory
were the registered owner given the opportunity to escape liability by
The registered-owner rule was articulated as early as 1957 in Erezo, et
disproving his ownership.93
al. v. Jepte,77 where this court explained that the registration of motor
vehicles, as required by Section 5(a)78 of Republic Act No. 4136, the
Thus, Aguilar, Sr. concluded:
Land Transportation and Traffic Code, was necessary "not to make
said registration the operative act by which ownership in vehicles is
In our view, respondent bank, as the registered owner of the vehicle, is
transferred, . . . but to permit the use and operation of the vehicle upon
primarily liable for Aguilar, Jr.'s death. The Court of Appeals erred
any public highway[.]"79 Its "main aim . . . is to identify the owner so that
when it concluded that the bank was not liable simply because (a)
if any accident happens, or that any damage or injury is caused by the
petitioner did not prove that Borja was acting as the bank's vice
vehicle on the public highways, responsibility therefor can be fixed on a
president at the time of the accident; and (b) Borja had, according to
definite individual, the registered owner."80
respondent bank, already bought the car at the time of the mishap. For
as long as the respondent bank remained the registered owner of the
Erezo notwithstanding, Castilex Industrial Corporation v. Vasquez, Jr.81
car involved in the vehicular accident, it could not escape primary
relied on Article 2180 of the Civil Code even though the employer was
liability for the death of petitioner's son.94 (Emphasis supplied)
also the registered owner of the vehicle.82 The registered-owner rule
was not mentioned.
Preference for the registered-owner rule became more pronounced in
Del Carmen, Jr. v. Bacoy:95
In Castilex, Benjamin Abad (Abad) was a manager of Castilex
Industrial Corporation (Castilex). Castilex was also the registered
Without disputing the factual finding of the [Court of Appeals] that Allan
owner of a Toyota Hi-Lux pick-up truck. While Abad was driving the
was still his employee at the time of the accident, a finding which we
pick-up truck, it collided with a motorcycle driven by Romeo Vasquez
see no reason to disturb, Oscar Jr. contends that Allan drove the jeep
(Vasquez). Vasquez died a few days after. Vasquez's parents filed a
in his private capacity and thus, an employer's vicarious liability for the
case for damages against Abad and Castilex.83 Castilex denied liability,
employee's fault under Article 2180 of the Civil Code cannot apply to
arguing that Abad was acting in his private capacity at the time of the
him.
accident.84
The contention is no longer novel. In Aguilar Sr. v. Commercial
Savings Bank, the car of therein respondent bank caused the death of
This court absolved Castilex of liability, reasoning that it was
Conrado Aguilar, Jr. while being driven by its assistant vice president.
incumbent upon the plaintiff to prove that the negligent employee was
Despite Article 2180, we still held the bank liable for damages for the
acting within the scope of his assigned tasks.85 Vasquez's parents
accident as said provision should defer to the settled doctrine
failed to prove this.86 This court outlined the process necessary for an
concerning accidents involving registered motor vehicles, i.e.,
employer to be held liable for the acts of its employees and applied the
that the registered owner of any vehicle, even if not used for public
process to the case:
service, would primarily be responsible to the public or to third persons
for injuries caused the latter while the vehicle was being driven on the
Under the fifth paragraph of Article 2180, whether or not engaged in
highways or streets. We have already ratiocinated that:
any business or industry, an employer is liable for the torts committed
by employees within the scope of his assigned tasks. But it is
The main aim of motor vehicle registration is to identify the owner so
necessary to establish the employer-employee relationship; once this
that if any accident happens, or that any damage or injury is caused by
is done, the plaintiff must show, to hold the employer liable, that the
the vehicle on the public highways, responsibility therefor can be fixed
employee was acting within the scope of his assigned task when the
on a definite individual, the registered owner. Instances are numerous
tort complained of was committed. It is only then that the employer
where vehicles running on public highways caused accidents or
may find it necessary to interpose the defense of due diligence in the
injuries to pedestrians or other vehicles without positive identification of answer [the question]"110 and that she had no knowledge to answer it:
the owner or drivers, or with very scant means of identification. It is to
forestall these circumstances, so inconvenient or prejudicial to the
public, that the motor vehicle registration is primarily ordained, in the COURT : Madam Witness, do you know the reason why your
interest of the determination of persons responsible for damages or driver, Jimmy Bautista, at around 10:00 o' clock in
injuries caused on public highways. 96 (Emphasis supplied, citations the morning of July 13, 2000 was in the vicinity of
omitted) Barangay Marcelo Green, United Paraaque
Subdivision 4?
Filcar Transport Services v. Espinas97 stated that the registered owner
of a vehicle can no longer use the defenses found in Article 2180:98
WITNESS : I don't have the personal capacity to answer that,
Neither can Filcar use the defenses available under Article 2180 of the Sir.
Civil Code - that the employee acts beyond the scope of his assigned
task or that it exercised the due diligence of a good father of a family to
prevent damage - because the motor vehicle registration law, to a Q : So you don't have any knowledge why he was
certain extent, modified Article 2180 of the Civil Code by making these there?
defenses unavailable to the registered owner of the motor vehicle.
Thus, for as long as Filcar is the registered owner of the car involved in
the vehicular accident, it could not escape primary liability for the A : Yes, Sir.111 (Emphasis supplied)
damages caused to Espinas.99
Sally Bellido's testimony does not affect the presumption that Article
100 2180's requirements have been satisfied. Mere disavowals are not
Mendoza v. Spouses Gomez reiterated this doctrine.
proof that suffice to overturn a presumption. To this end, evidence must
be adduced. However, petitioner presented no positive evidence to
However, Aguilar, Sr., Del Carmen, Filcar, and Mendoza should not be
show that Bautista was acting in his private capacity at the time of the
taken to mean that Article 2180 of the Civil Code should be completely
incident.
discarded in cases where the registered-owner rule finds application.

On the third, petitioner likewise failed to prove that it exercised the

As acknowledged in Filcar, there is no categorical statutory
requisite diligence in the selection and supervision of Bautista.
pronouncement in the Land Transportation and Traffic Code stipulating
the liability of a registered owner.101 The source of a registered owner's
In its selection of Bautista as a service driver, petitioner contented itself
liability is not a distinct statutory provision, but remains to be Articles
with Bautista's submission of a non-professional driver's license.112
2176 and 2180 of the Civil Code:
Hence, in Sally Balledo's cross-examination:
While Republic Act No. 4136 or the Land Transportation and Traffic Q : . . . when he was promoted as service driver, of
Code does not contain any provision on the liability of registered course, there were certain requirements and among
owners in case of motor vehicle mishaps, Article 2176, in relation with other else, you made mention about a driver's license.
Article 2180, of the Civil Code imposes an obligation upon Filcar, as
registered owner, to answer for the damages caused to Espinas' car.102
A : Yes, Sir.
Thus, it is imperative to apply the registered-owner rule in a manner
that harmonizes it with Articles 2176 and 2180 of the Civil Code. Rules
must be construed in a manner that will harmonize them with other Q : Would you be able to show to this Honorable Court
rules so as to form a uniform and consistent system of jurisprudence. 103 whether indeed this person did submit a driver's
In light of this, the words used in Del Carmen are particularly notable. license to your company?
There, this court stated that Article 2180 "should defer to" 104 the
registered-owner rule. It never stated that Article 2180 should be totally
abandoned. A : Yes, Sir.

Therefore, the appropriate approach is that in cases where both the

registered-owner rule and Article 2180 apply, the plaintiff must first
....
establish that the employer is the registered owner of the vehicle in
question. Once the plaintiff successfully proves ownership, there arises
a disputable presumption that the requirements of Article 2180 have
been proven. As a consequence, the burden of proof shifts to the Q : Do you recall what kind of driver's license is this?
defendant to show that no liability under Article 2180 has arisen.

This disputable presumption, insofar as the registered owner of the A : The Land Transportation Office.
vehicle in relation to the actual driver is concerned, recognizes that
between the owner and the victim, it is the former that should carry the
costs of moving forward with the evidence. The victim is, in many Q : Is it a professional driver's license or non-proffesional
cases, a hapless pedestrian or motorist with hardly any means to [sic] driver's license?
uncover the employment relationship of the owner and the driver, or
any act that the owner may have done in relation to that employment.
A : Non-professional.
The registration of the vehicle, on the other hand, is accessible to the
public.
Q : You are not sure?
Here, respondent presented a copy of the Certificate of Registration 105
of the van that hit Reyes. 106 The Certificate attests to petitioner's
ownership of the van. Petitioner itself did not dispute its ownership of
COURT : Non professional, professional?
the van. Consistent with the rule we have just stated, a presumption
that the requirements of Article 2180 have been satisfied arises. It is
now up to petitioner to establish that it incurred no liability under Article
2180. This it can do by presenting proof of any of the following: first, A : It's a non-professional.113 (Emphasis supplied)
that it had no employment relationship with Bautista; second, that Employing a person holding a non-professional driver's license to
Bautista acted outside the scope of his assigned tasks; or third, that it operate another's motor vehicle violates Section 24 of the Land
exercised the diligence of a good father of a family in the selection and Transportation and Traffic Code, which provides:
supervision of Bautista.107

On the first, petitioner admitted that Bautista was its employee at the
time of the accident.108 SEC. 24. Use of driver's license and badge. ...

On the second, petitioner was unable to prove that Bautista was not . . . .
acting within the scope of his assigned tasks at the time of the
accident. When asked by the court why Bautista was at the place of No owner of a motor vehicle shall engage, employ, or hire any person
the accident when it occurred, Sally Bellido, petitioner's accountant and
supervisor,109 testified that she did not "have the personal capacity to
to operate such motor vehicle, unless the person sought to be
employed is a duly licensed professional driver.
Evidently, petitioner did not only fail to exercise due diligence when it
selected Bautista as service driver; it also committed an actual
violation of law.
To prove that it exercised the required diligence in supervising
Bautista, petitioner presented copies of several memoranda and
company rules.114 These, however, are insufficient because petitioner
failed to prove actual compliance. Metro Manila Transit Corporation v.
Court of Appeals115 emphasized that to establish diligence in the
supervision of employees, the issuance of company policies must be
coupled with proof of compliance:
Due diligence in the supervision of employees, on the other hand,
includes the formulation of suitable rules and regulations for the
guidance of employees and the issuance of proper instructions
intended for the protection of the public and persons with whom the
employer has relations through his or its employees and the imposition
of necessary disciplinary measures upon employees in case of breach
or as may be warranted to ensure the performance of acts
indispensable to the business of and beneficial to their employer. To
this, we add that actual implementation and monitoring of consistent
compliance with said rules should be the constant concern of the
employer, acting through dependable supervisors who should regularly
report on their supervisory functions.
In order that the defense of due diligence in the selection and
supervision of employees may be deemed sufficient and plausible, it is
not enough to emptily invoke the existence of said company
guidelines and policies on hiring and supervision. As the
negligence of the employee gives rise to the presumption of
negligence on the part of the employer, the latter has the burden of
proving that it has been diligent not only in the selection of employees
but also in the actual supervision of their work. The mere allegation of
the existence of hiring procedures and supervisory policies, without
anything more, is decidedly not sufficient to overcome presumption.
We emphatically reiterate our holding, as a warning to all employers,
that "(t)he mere formulation of various company policies on safety
without showing that they were being complied with is not
sufficient to exempt petitioner from liability arising from negligence of
its employees. It is incumbent upon petitioner to show that in recruiting
and employing the erring driver the recruitment procedures and
company policies on efficiency and safety were followed." Paying lip-
service to these injunctions or merely going through the motions of
compliance therewith will warrant stern sanctions from the Court. 116
(Emphasis supplied, citations omitted)
For failing to overturn the presumption that the requirements of Article
2180 have been satisfied, petitioner must be held liable.
III
Petitioner's argument that it should be excused from liability because
Bautista was already dropped as a party is equally unmeritorious. The
liability imposed on the registered owner is direct and primary. 117 It
does not depend on the inclusion of the negligent driver in the action.
Agreeing to petitioner's assertion would render impotent the rationale
of the motor registration law in fixing liability on a definite person.
Bautista, the driver, was not an indispensable party under Rule 3,
Section 7118 of the 1997 Rules of Civil Procedure. Rather, he was a
necessary party under Rule 3, Section 8.119 Instead of insisting that
Bautista who was nothing more than a necessary party should
not have been dropped as a defendant, or that petitioner, along with
Bautista, should have been dropped, petitioner (as a co-defendant
insisting that the action must proceed with Bautista as party) could
have opted to file a cross-claim against Bautista as its remedy.
The 1997 Rules of Civil Procedure spell out the rules on joinder of
indispensable and necessary parties. These are intended to afford "a
complete determination of all possible issues, not only between the
parties themselves but also as regards to other persons who may be
affected by the judgment."120
However, while an exhaustive resolution of disputes is desired in every
case, the distinction between indispensable parties and necessary
parties delineates a court's capacity to render effective judgment. As
defined by Rule 3, Section 7, indispensable parties are "[p]arties in
interest without whom no final determination can be had of an action[.]"
Thus, their non-inclusion is debilitating: "the presence of indispensable
parties is a condition for the exercise of juridical power and when an
indispensable party is not before the court, the action should be
dismissed."121
In contrast, a necessary party's presence is not imperative, and his or
her absence is not debilitating. Nevertheless, it is preferred that they
be included in order that relief may be complete.
The concept of indispensable parties, as against parties whose
inclusion only allows complete relief, was explained in Arcelona v.
Court of Appeals:122
An indispensable party is a party who has such an interest in the
controversy or subject matter that a final adjudication cannot be made,
in his absence, without injuring or affecting that interest, a party who
has not only an interest in the subject matter of the controversy, but
also has an interest of such nature that a final decree cannot be made
without affecting his interest or leaving the controversy in such a
condition that its final determination may be wholly inconsistent with
equity and good conscience. It has also been considered that an
indispensable party is a person in whose absence there cannot be a
determination between the parties already before the court which is
effective, complete, or equitable. Further, an indispensable party is one
who must be included in an action before it may properly go forward.
A person is not an indispensable party, however, if his interest in the
controversy or subject matter is separable from the interest of the other
parties, so that it will not necessarily be directly or injuriously affected
by a decree which does complete justice between them. Also, a person
is not an indispensable party if his presence would merely permit
complete relief between him and those already parties to the action, or
if he has no interest in the subject matter of the action. It is not a
sufficient reason to declare a person to be an indispensable party that
his presence will avoid multiple litigation.123
Petitioner's interest and liability is distinct from that of its driver.
Regardless of petitioner's employer-employee relationship with
Bautista, liability attaches to petitioner on account of its being the
registered owner of a vehicle that figures in a mishap. This alone
suffices. A determination of its liability as owner can proceed
independently of a consideration of how Bautista conducted himself as
a driver. While certainly it is desirable that a determination of Bautista's
liability be made alongside that of the owner of the van he was driving,
his non-inclusion in these proceedings does not absolutely hamper a
judicious resolution of respondent's plea for relief.
IV
The Court of Appeals committed no reversible error when it awarded
actual damages to respondent. Respondent's claim for actual damages
was based on the Certificate124 issued and signed by a certain
Pealoza showing that respondent paid Pealoza P35,000.00 for
funeral expenses.
Contrary to petitioner's claim, this Certificate is not hearsay. Evidence
is hearsay when its probative value is based on the personal
knowledge of a person other than the person actually testifying. 125
Here, the Certificate sought to establish that respondent herself paid
Pealoza P35,000.00 as funeral expenses for Reyes' death:126
3. Na ang aking kontrata ay nagkakahalaga ng P35,000-00
[sic] sa lahat ng nagamit na materiales at labor nito kasama ang lote
na ibinayad sa akin ni Gng. ERMILINDA REYES ABEJAR na siyang
aking kakontrata sa pagsasagawa ng naturang paglilibingan.127
(Emphasis supplied)
It was respondent herself who identified the Certificate. She testified
that she incurred funeral expenses amounting to P35,000.00, that she
paid this amount to Pealoza, and that she was present when
Pealoza signed the Certificate:
[ATTY. Did you incur any expenses?
LIM] :
A: Meron po.
Q: How much did you spend for the death of Jesmarian
[sic] Reyes?
A: 'Yun pong P35,000.00 na pagpapalibing at saka...
Q: You said that you spent P35,000.00. Do you have any
evidence or proof that you spent that amount?
 A: Meron po.
Q: Showing to you this sort of certification. What relation
has this...
A: 'Yan po' yung contractor nagumawa.
Q: Contractor of what?
A: 'Yan po' yung mismong binilhan ko ng lupa at nitso.
....
ATTY. There is a signature at the top of the printed name
LIM : Julian Penalosa [sic]. Whose signature is this?
A: 'Yan po' yung mismong contractor.
....
Q: Did you see him sign this?
A: Opo.128 (Emphasis supplied)
Respondent had personal knowledge of the facts sought to be proved
by the Certificate, i.e. that she spent P35,000.00 for the funeral
expenses of Reyes. Thus, the Certificate that she identified and
testified to is not hearsay. It was not an error to admit this Certificate as
evidence and basis for awarding P35,000.00 as actual damages to
respondent.
The Court of Appeals likewise did not err in awarding civil indemnity
and exemplary damages.
Article 2206 of the Civil Code provides:
ARTICLE 2206. The amount of damages for death caused by a crime
or quasi-delict shall be at least three thousand pesos, even though
there may have been mitigating circumstances[.]
Further, Article 2231 of the Civil Code provides:
ARTICLE 2231. In quasi-delicts, exemplary damages may be granted
if the defendant acted with gross negligence.
Both the Court of Appeals and the Regional Trial Court found Bautista
grossly negligent in driving the van and concluded that Bautista's gross
negligence was the proximate cause of Reyes' death. Negligence and
causation are factual issues.129 Findings of fact, when established by
the trial court and affirmed by the Court of Appeals, are binding on this
court unless they are patently unsupported by evidence or unless the
judgment is grounded on a misapprehension of facts.130 Considering
that petitioner has not presented any evidence disputing the findings of
the lower courts regarding Bautista's negligence, these findings cannot
be disturbed in this appeal. The evidentiary bases for the award of civil
indemnity and exemplary damages stand. As such, petitioner must pay
the exemplary damages arising from the negligence of its driver.131 For
the same reasons, the award of P50,000.00 by way of civil indemnity is
justified.132
The award of moral damages is likewise proper.
2206(3) of the Civil Code provides:
ARTICLE 2206. The amount of damages for death caused by a crime
or quasi-delict shall be at least three thousand pesos, even though
there may have been mitigating circumstances. In addition:
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased.
(Emphasis supplied)
For deaths caused by quasi-delict, the recovery of moral damages is
limited to the spouse, legitimate and illegitimate descendants, and
ascendants of the deceased.133
Persons exercising substitute parental authority are to be considered
ascendants for the purpose of awarding moral damages. Persons
exercising substitute parental authority are intended to stand in place
of a child's parents in order to ensure the well-being and welfare of a
child.134 Like natural parents, persons exercising substitute parental
authority are required to, among others, keep their wards in their
company,135 provide for their upbringing, 136 show them love and
affection,137 give them advice and counsel,138 and provide them with
companionship and understanding.139 For their part, wards shall always
observe respect and obedience towards the person exercising parental
authority.140 The law forges a relationship between the ward and the
person exercising substitute parental authority such that the death or
injury of one results in the damage or prejudice of the other.
Moral damages are awarded to compensate the claimant for his or her
actual injury, and not to penalize the wrongdoer.141 Moral damages
enable the injured party to alleviate the moral suffering resulting from
the defendant's actions.142 It aims to restore to the extent possible
"the spiritual status quo ante[.]"143
Given the policy underlying Articles 216 and 220 of the Family Code as
well as the purposes for awarding moral damages, a person exercising
substitute parental authority is rightly considered an ascendant of the
deceased, within the meaning of Article 2206(3) of the Civil Code.
Hence, respondent is entitled to moral damages.
As exemplary damages have been awarded and as respondent was
compelled to litigate in order to protect her interests, she is rightly
entitled to attorney's fees.144
However, the award of interest should be modified. This modification
must be consistent with Nacar v. Gallery Frames,145 in which we ruled:
When an obligation, not constituting a loan or forbearance of money, is
breached, an interest on the amount of damages awarded may be
imposed at the discretion of the court at the rate of 6% per annum. No
interest, however, shall be adjudged on unliquidated claims or
damages, except when or until the demand can be established with
reasonable certainty. Accordingly, where the demand is established
with reasonable certainty, the interest shall begin to run from the time
the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but
when such certainty cannot be so reasonably established at the time
the demand is made, the interest shall begin to run only from the date
the judgment of the court is made (at which time the quantification of
damages may be deemed to have been reasonably ascertained). The
actual base for the computation of legal interest shall, in any case, be
on the amount finally adjudged.
2. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest, whether the
case falls under paragraph 1 or paragraph 2, above, shall be 6% per
annum from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of credit.146
(Emphasis supplied)
WHEREFORE, the Decision of the Court of Appeals dated October 3,
2005 is AFFIRMED with the following MODIFICATIONS: (a) actual
damages in the amount of P35,000.00 shall earn interest at the rate of
6% per annum from the time it was judicially or extrajudicially
demanded from petitioner Caravan Travel and Tours International, Inc.
until full satisfaction; (b) moral damages, exemplary damages, and
attorney's fees shall earn interest at the rate of 6% per annum from the
date of the Regional Trial Court Decision until full satisfaction; and (c)
civil indemnity shall earn interest at the rate of 6% per annum from the
date of the Court of Appeals Decision until full satisfaction.
SO ORDERED.

MMTC v. CUEVAS
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 167797 June 15, 2015
METRO MANILA TRANSIT CORPORATION, Petitioner,
vs.
REYNALDO CUEVAS and JUNNEL CUEVAS, represented by
REYNALDO CUEVAS, Respondents.
DECISION
BERSAMIN, J.:
The registered owner of a motor vehicle whose operation causes injury
to another is legally liable to the latter. But it is error not to allow the
registered owner to recover reimbursement from the actual and
present owner by way of its cross-claim.
Antecedents
Metro Manila Transit Corporation (MMTC) and Mina's Transit
Corporation (Mina's Transit) entered into an agreement to sell dated
August 31, 1990,1 whereby the latter bought several bus units from the
former at a stipulated price. They agreed that MMTC would retain the
ownership of the buses until certain conditions were met, but in the
meantime Mina's Transit could operate the buses within Metro Manila.
On October 14, 1994, one of the buses subject of the agreement to
sell, bearing plate number NXM-449-TB-pil 94, hit and damaged a
Honda Motorcycle owned by Reynaldo and driven by Junnel. Reynaldo
and Junnel sued MMTC and Minas Transit for damages in the
Regional Trial Court (RTC) in Cavite, docketed as Civil Case No. N-
6127, pertinently alleging and praying as follows:
5. Defendants Metro Manila Transit Corporation and Minas Transit are
registered joint-owners or operators of an MMTC/Minas Transit
passenger bus with Plate No. NXM-449-TB-pil 94, and is the
employers (sic) of the driver Jessie Rillera y Gaceta.
6. On October 14, 1994, at around 7:45 P.M., while Plaintiff was riding
on a Honda Motocycle, with a companion at the back, along South
Superhighway, in front of Magallanes Supermarket in Makati, Metro
Manila, a few meters away from the approaches of Magallanes
Overpass complex, coming from the South and heading toward the
North, the defendants driver Jessie Rillera Y Gaceta, driving the
MMTC/Minas Transit Passenger bus with Plate No. NXM-449-TB-pil
94, heading in the same direction and following Plain tiffs motorcycle,
recklessly and carelessly attempted to overtake Plaintiffs Motorcycle
on the right side of the lane, in the course of which the said Jessie
Rillera side swiped the Plaintiff as the said Jessie Rillera accelerated
speed;
7. As a result, plaintiff Junnel Cuevas and his companion were thrown
to the road and Plaintiffs right leg was severely fractured, and the
Honda Motorcycle owned by plaintiff Reynaldo Cuevas was extensively
damaged;
8. Plaintiff Junnel Cuevas and his companion were then brought to the
Philippine General Hospital along Taft Avenue in Manila, where the
said Plaintiff had to undergo several operations on his right leg; but in
spite of the several operations which he had undergone, Plaintiff
Junnel Cuevas, even up to now, is unable to walk on his own without
the aid of crutches and is still scheduled for more operations; a xerox
copy of his medical certificate is hereto attached as Annex A hereof;2
WHEREFORE, it is most respectfully prayed that after notice and
hearing a judgment be rendered ordering the defendants jointly and
severally to pay Plaintiffs the following sums of money:
1) P200,000.00 more or less, representing actual medical expenses;
2) P18,940.00 representing the cost of repair of the damaged
motorcycle
3) P300,000.00 as moral damage(s)
4) P100,000.00 as exemplary damage(s)
5) P50,000.00 as nominal damage(s)
6) P15,000.00 as litigation expenses
7) P30,000.00 as attorneys fees
8) to pay the cost of the suit.3
In its answer with compulsory counterclaim and cross-claim,4 MMTC
denied liability, and averred that although it retained the ownership of
the bus, the actual operator and employer of the bus driver was Minas
Transit; and that, in support of its cross-claim against Minas Transit, a
provision in the agreement to sell mandated Mina s Transport to hold it
free from liability arising from the use and operation of the bus units.5
On its part, Minas Transit contended that it was not liable because: (a)
it exercised due diligence in the selection and supervision of its
employees; (b) its bus driver exercised due diligence; and (c) Junnels
negligence was the cause of the accident.
Meanwhile, Minas Transit filed a third-party complaint against its
insurer, Perla Compania de Seguros, Inc. (Perla), seeking
reimbursement should it be adjudged liable, pursuant to its insurance
policy issued by Perla with the following coverage: (a) third-party
liability of P50,000.00 as the maximum amount; and (b) third-party
damage to property of P20,000.00 as the maximum amount.6
In its answer to the third-party complaint, Perla denied liability as
insurer because Minas Transit had waived its recourse by failing to
notify Perla of the incident within one year from its occurrence, as
required by Section 384 of the Insurance Code.7 It submitted that even
assuming that the claim had not yet prescribed, its liability should be
limited to the maximum of P50,000.00 for third-party liability and
P20,000.00 for third-party damage.8
After trial, the RTC rendered judgment in favor of the respondents on
September 17, 19999 ordering petitioner Metro Manila Transit
Corporation (MMTC) and its co-defendant Minas Transit Corporation
(Minas Transit) to pay damages in favor of respondents Reynaldo
Cuevas and Junnel Cuevas to wit:
WHEREFORE, premises considered, defendants Metro Manila Transit
Corporation and Minas Transit Corporation are hereby held solidarily
liable for the payment to the plaintiffs of the following:
a. P115,436.50 as actual damages;
b. P100,000.00 as moral damages
c. P50,000.00 as exemplary damages; and
d. P20,000.00 as attorneys fees.
Costs are also adjudged against defendants.
SO ORDERED.10
The RTC concluded that the proximate cause of the mishap was the
negligence of the bus driver; that following Article 2180 of the Civil
Code, his employers should be solidarily liable; that MMTC and Minas
Transit, being the joint owners of the bus, were liable; and that the
third-party complaint was dismissed because no evidence was
presented to prove it. The RTC, however, did not rule on the propriety
of the cross-claim.
On appeal, the CA affirmed the RTCs decision.11
Issue
Hence, this appeal, in which MMTC posits the sole issue of whether or
not it was liable for the injuries sustained by the respondents despite
the provision in the agreement to se ll that shielded it from liability.

Ruling of the Court
The appeal is partly meritorious.
MMTC urges the revisit of the register ed-owner rule in order to gain
absolution from liability. It contends that although it retained ownership
of the bus at the time of the vehicular accident, the actual operation
was transferred to Minas Transit; that for it to be held liable for the acts
of the bus driver, the existence of an employer-employee relationship
between them must be established; and that because the bus driver
was not its employee, it was not liable for his negligent act.
The contentions of MMTC cannot persuade.
In view of MMTCs admission in its pleadings that it had remained the
registered owner of the bus at the time of the incident, it could not
escape liability for the personal injuries and property damage suffered
by the Cuevases. This is because of the registered-owner rule,
whereby the registered owner of the motor vehicle involved in a
vehicular accident could be held liable for the consequences. The
registered-owner rule has remained good law in this jurisdiction
considering its impeccable and timeless rationale, as enunciated in the
1957 ruling in Erezo, et al. v. Jepte,12 where the Court pronounced:
Registration is required not to make said registration the operative act
by which ownership in vehicles is transferred, as in land registration
cases, because the administrative proceeding of registration does not
bear any essential relation to the contract of sale between the parties
(Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the
use and operation of the vehicle upon any public highway (section 5
[a], Act No. 3992, as amended.) The main aim of motor vehicle
registration is to identify the owner so that if any accident happens, or
that any damage or injury is caused by the vehicle on the public
highways, responsibility therefore can be fixed on a definite individual,
the registered owner. Instances are numerous where vehicles running
on public highways caused accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or with
very scant means of identification. It is to forestall these circumstances,
so inconvenient or prejudicial to the public, that the motor vehicle
registration is primarily ordained, in the interest of the determination of
persons responsible for damages or injuries caused on public
highways.
"One of the principal purposes of motor vehicles legislation is
identification of the vehicle and of the operator, in case of accident; and
another is that the knowledge that means of detection are always
available may act as a deterrent from lax observance of the law and of
the rules of conservative and safe operation. Whatever purpose there
may be in these statutes, it is subordinate at the last to the primary
purpose of rendering it certain that the violator of the law or of the rules
of safety shall not escape because of lack of means to discover him.
The purpose of the statute is thwarted, and the displayed number
becomes a snare and delusion, if courts would entertain such
defenses as that put forward by appellee in this case. No responsible
person or corporation could be held liable for the most outrageous acts
of negligence, if they should be allowed to place a middleman
between them and the public, and escape liability by the manner in
which they recompense their servants." (King vs. Brenham Automobile
Co., 145 S.W. 278, 279.)
The Court has reiterated the registered-owner rule in other rulings, like
in Filcar Transport Services v. Espinas ,13 to wit:
It is well settled that in case of motor vehicle mishaps, the registered
owner of the motor vehicle is considered as the employer of the
tortfeasor-driver , and is made primarily liable for the tort committed by
the latter under Article 2176, in relation with Article 2180, of the Civil
Code.
In Equitable Leasing Corporation v. Suyom, we ruled that in so far as
third persons are concerned, the registered owner of the motor vehicle
is the employer of the negligent driver, and the actual employer is
considered merely as an agent of such owner .
In that case, a tractor registered in the name of Equitable Leasing
Corporation ( Equitable ) figured in an accident, killing and seriously
injuring several persons. As part of its defense, Equitable claimed that
the tractor was initially leased to Mr. Edwin Lim under a Lease
Agreement, which agreement has been overtaken by a Deed of Sale
entered into by Equitable and Ecatine Corporation (Ecatine). Equitable
argued that it cannot be held liable for damages because the tractor
had already been sold to Ecatine at the time of the accident and the
negligent driver was not its employee but of Ecatine.
In upholding the liability of Equitable, as registered owner of the tractor,
this Court said that "regardless of sales made of a motor vehicle, the
registered owner is the lawful operator insofar as the public and third
persons are concerned; consequently, it is directly and primarily
responsible for the consequences of its operation." The Court further
stated that " [i]n contemplation of law, the owner/operator of record is
the employer of the driver, the actual operator and employer being
considered as merely its agent. " Thus, Equitable, as the registered
owner of the tractor, was considered under the law on quasi delict to
be the employer of the driver, Raul Tutor; Ecatine, Tutors actual
employer, was deemed merely as an agent of Equitable.
Thus, it is clear that for the purpose of holding the registered owner of
the motor vehicle primarily and directly liable for damages under Article
2176, in relation with Article 2180, of the Civil Code, the existence of
an employer-employee relationship, as it is understood in labor
relations law, is not required. It is sufficient to establish that Filcar is the
registered owner of the motor vehicle causing damage in order that it
may be held vicariously liable under Article 2180 of the Civil Code.
Indeed, MMTC could not evade liability by passing the buck to Minas
Transit. The stipulation in the agreement to sell did not bind third
parties like the Cuevases, who were expected to simply rely on the
data contained in the registration certificate of the erring bus.
Although the registered-owner rule might seem to be unjust towards
MMTC, the law did not leave it without any remedy or
recourse.1wphi1 According to Filcar Transport Services v. Espinas ,14
MMTC could recover from Minas Transit, the actual employer of the
negligent driver, under the principle of unjust enrichment, by means of
a cross-claim seeking reimbursement of all the amounts that it could
be required to pay as damages arising from the drivers negligence. A
cross-claim is a claim by one party against a co-party arising out of the
transaction or occurrence that is the subject matter either of the
original action or of a counterclaim therein, and may include a claim
that the party against whom it is asserted is or may be liable to the
cross-claimant for all or part of a claim asserted in the action against
the cross-claimant.15
MMTC set up its cross-claim against Mina's Transit precisely to ensure
that Mina's Transit would reimburse whatever liability would be
adjudged against MMTC. Yet, it is a cause of concern for the Court that
the RTC ignored to rule on the propriety of MMTC's cross-claim. Such
omission was unwarranted, inasmuch as Mina's Transit did not dispute
the cross-claim, or did not specifically deny the agreement to sell with
MMTC, the actionable document on which the cross-claim was based.
Even more telling was the fact that Mina's Transit did not present
controverting evidence to disprove the cross-claim as a matter of
course if it was warranted for it to do so. Under the circumstances, the
RTC should have granted the cross-claim to prevent the possibility of a
multiplicity of suits, and to spare not only the MMTC but also the other
parties in the case from further expense and bother. Compounding the
RTC's uncharacteristic omission was the CA's oversight in similarly
ignoring the cross-claim. The trial and the appellate courts should not
forget that a cross-claim is like the complaint and the counterclaim that
the court must rule upon.
WHEREFORE, the Court AFFIRMS the decision promulgated on June
28, 2004 subject to the MODIFICATION that the cross-claim of Metro
Manila Transit Corporation against Mina's Transit Corporation is
GRANTED, and, ACCORDINGLY, Mina's Transit Corporation is
ORDERED to reimburse to Metro Manila Transit Corporation whatever
amounts the latter shall pay to the respondents pursuant to the
judgment of the Regional Trial Court in Civil Case No. N-6127.
No pronouncement on costs of suit.
SO ORDERED.

PROFESSIONAL SERVICES v. N & E AGANA
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 126297 January 31, 2007
PROFESSIONAL SERVICES, INC., Petitioner,
vs.
NATIVIDAD and ENRIQUE AGANA, Respondents.
x-----------------------x
G.R. No. 126467 January 31, 2007
NATIVIDAD (Substituted by her children MARCELINO AGANA III,
ENRIQUE AGANA, JR., EMMA AGANA ANDAYA, JESUS AGANA,
and RAYMUND AGANA) and ENRIQUE AGANA, Petitioners,
vs.
JUAN FUENTES, Respondent.
x- - - - - - - - - - - - - - - - - - - -- - - - x
G.R. No. 127590 January 31, 2007
MIGUEL AMPIL, Petitioner,
vs.
NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Hospitals, having undertaken one of mankinds most important and
delicate endeavors, must assume the grave responsibility of pursuing it
with appropriate care. The care and service dispensed through this
high trust, however technical, complex and esoteric its character may
be, must meet standards of responsibility commensurate with the
undertaking to preserve and protect the health, and indeed, the very
lives of those placed in the hospitals keeping.1
Assailed in these three consolidated petitions for review on certiorari is
the Court of Appeals Decision 2 dated September 6, 1996 in CA-G.R.
CV No. 42062 and CA-G.R. SP No. 32198 affirming with modification
the Decision3 dated March 17, 1993 of the Regional Trial Court (RTC),
Branch 96, Quezon City in Civil Case No. Q-43322 and nullifying its
Order dated September 21, 1993.
The facts, as culled from the records, are:
On April 4, 1984, Natividad Agana was rushed to the Medical City
General Hospital (Medical City Hospital) because of difficulty of bowel
movement and bloody anal discharge. After a series of medical
examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590,
diagnosed her to be suffering from "cancer of the sigmoid."
On April 11, 1984, Dr. Ampil, assisted by the medical staff 4 of the
Medical City Hospital, performed an anterior resection surgery on
Natividad. He found that the malignancy in her sigmoid area had
spread on her left ovary, necessitating the removal of certain portions
of it. Thus, Dr. Ampil obtained the consent of Natividads husband,
Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R. No.
126467, to perform hysterectomy on her.
After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over,
completed the operation and closed the incision.
However, the operation appeared to be flawed. In the corresponding
Record of Operation dated April 11, 1984, the attending nurses entered
these remarks:
"sponge count lacking 2
"announced to surgeon searched (sic) done but to no avail continue for
closure."
On April 24, 1984, Natividad was released from the hospital. Her
hospital and medical bills, including the doctors fees, amounted to
P60,000.00.
After a couple of days, Natividad complained of excruciating pain in her
anal region. She consulted both Dr. Ampil and Dr. Fuentes about it.
They told her that the pain was the natural consequence of the
surgery. Dr. Ampil then recommended that she consult an oncologist to
examine the cancerous nodes which were not removed during the
operation.
On May 9, 1984, Natividad, accompanied by her husband, went to the
United States to seek further treatment. After four months of
consultations and laboratory examinations, Natividad was told she was
free of cancer. Hence, she was advised to return to the Philippines.
On August 31, 1984, Natividad flew back to the Philippines, still
suffering from pains. Two weeks thereafter, her daughter found a piece
of gauze protruding from her vagina. Upon being informed about it, Dr.
Ampil proceeded to her house where he managed to extract by hand a
piece of gauze measuring 1.5 inches in width. He then assured her
that the pains would soon vanish.
Dr. Ampils assurance did not come true. Instead, the pains intensified,
prompting Natividad to seek treatment at the Polymedic General
Hospital. While confined there, Dr. Ramon Gutierrez detected the
presence of another foreign object in her vagina -- a foul-smelling
gauze measuring 1.5 inches in width which badly infected her vaginal
vault. A recto-vaginal fistula had formed in her reproductive organs
which forced stool to excrete through the vagina. Another surgical
operation was needed to remedy the damage. Thus, in October 1984,
Natividad underwent another surgery.
On November 12, 1984, Natividad and her husband filed with the RTC,
Branch 96, Quezon City a complaint for damages against the
Professional Services, Inc. (PSI), owner of the Medical City Hospital,
Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They
alleged that the latter are liable for negligence for leaving two pieces of
gauze inside Natividads body and malpractice for concealing their acts
of negligence.
Meanwhile, Enrique Agana also filed with the Professional Regulation
Commission (PRC) an administrative complaint for gross negligence
and malpractice against Dr. Ampil and Dr. Fuentes, docketed as
Administrative Case No. 1690. The PRC Board of Medicine heard the
case only with respect to Dr. Fuentes because it failed to acquire
jurisdiction over Dr. Ampil who was then in the United States.
On February 16, 1986, pending the outcome of the above cases,
Natividad died and was duly substituted by her above-named children
(the Aganas).
On March 17, 1993, the RTC rendered its Decision in favor of the
Aganas, finding PSI, Dr. Ampil and Dr. Fuentes liable for negligence
and malpractice, the decretal part of which reads:
WHEREFORE, judgment is hereby rendered for the plaintiffs ordering
the defendants PROFESSIONAL SERVICES, INC., DR. MIGUEL
AMPIL and DR. JUAN FUENTES to pay to the plaintiffs, jointly and
severally, except in respect of the award for exemplary damages and
the interest thereon which are the liabilities of defendants Dr. Ampil and
Dr. Fuentes only, as follows:
1. As actual damages, the following amounts:
a. The equivalent in Philippine Currency of the total of US$19,900.00
at the rate of P21.60-US$1.00, as reimbursement of actual expenses
incurred in the United States of America;
b. The sum of P4,800.00 as travel taxes of plaintiffs and their physician
daughter;
c. The total sum of P45,802.50, representing the cost of hospitalization
at Polymedic Hospital, medical fees, and cost of the saline solution;
2. As moral damages, the sum of P2,000,000.00;
3. As exemplary damages, the sum of P300,000.00;
4. As attorneys fees, the sum of P250,000.00;
5. Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from
date of filing of the complaint until full payment; and
6. Costs of suit.
SO ORDERED.
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the
Court of Appeals, docketed as CA-G.R. CV No. 42062.
Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion
for a partial execution of its Decision, which was granted in an Order
dated May 11, 1993. Thereafter, the sheriff levied upon certain
properties of Dr. Ampil and sold them for P451,275.00 and delivered
the amount to the Aganas.
Following their receipt of the money, the Aganas entered into an
agreement with PSI and Dr. Fuentes to indefinitely suspend any further
execution of the RTC Decision. However, not long thereafter, the
Aganas again filed a motion for an alias writ of execution against the
properties of PSI and Dr. Fuentes. On September 21, 1993, the RTC
granted the motion and issued the corresponding writ, prompting Dr.
Fuentes to file with the Court of Appeals a petition for certiorari and
prohibition, with prayer for preliminary injunction, docketed as CA-G.R.
SP No. 32198. During its pendency, the Court of Appeals issued a
Resolution5 dated October 29, 1993 granting Dr. Fuentes prayer for
injunctive relief.
On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with
CA-G.R. CV No. 42062.
Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered
its Decision6 in Administrative Case No. 1690 dismissing the case
against Dr. Fuentes. The Board held that the prosecution failed to
show that Dr. Fuentes was the one who left the two pieces of gauze
inside Natividads body; and that he concealed such fact from
Natividad.
On September 6, 1996, the Court of Appeals rendered its Decision
jointly disposing of CA-G.R. CV No. 42062 and CA-G.R. SP No.
32198, thus:
WHEREFORE, except for the modification that the case against
defendant-appellant Dr. Juan Fuentes is hereby DISMISSED, and with
the pronouncement that defendant-appellant Dr. Miguel Ampil is liable
to reimburse defendant-appellant Professional Services, Inc., whatever
amount the latter will pay or had paid to the plaintiffs-appellees, the
decision appealed from is hereby AFFIRMED and the instant appeal
DISMISSED.
Concomitant with the above, the petition for certiorari and prohibition
filed by herein defendant-appellant Dr. Juan Fuentes in CA-G.R. SP
No. 32198 is hereby GRANTED and the challenged order of the
respondent judge dated September 21, 1993, as well as the alias writ
of execution issued pursuant thereto are hereby NULLIFIED and SET
ASIDE. The bond posted by the petitioner in connection with the writ of
preliminary injunction issued by this Court on November 29, 1993 is
hereby cancelled.
Costs against defendants-appellants Dr. Miguel Ampil and Professional
Services, Inc.
SO ORDERED.
Only Dr. Ampil filed a motion for reconsideration, but it was denied in a
Resolution7 dated December 19, 1996.
Hence, the instant consolidated petitions.
In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals
erred in holding that: (1) it is estopped from raising the defense that Dr.
Ampil is not its employee; (2) it is solidarily liable with Dr. Ampil; and (3)
it is not entitled to its counterclaim against the Aganas. PSI contends
that Dr. Ampil is not its employee, but a mere consultant or
independent contractor. As such, he alone should answer for his
negligence.
In G.R. No. 126467, the Aganas maintain that the Court of Appeals
erred in finding that Dr. Fuentes is not guilty of negligence or medical
malpractice, invoking the doctrine of res ipsa loquitur. They contend
that the pieces of gauze are prima facie proofs that the operating
surgeons have been negligent.
Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals
erred in finding him liable for negligence and malpractice sans
evidence that he left the two pieces of gauze in Natividads vagina. He
pointed to other probable causes, such as: (1) it was Dr. Fuentes who
used gauzes in performing the hysterectomy; (2) the attending nurses
failure to properly count the gauzes used during surgery; and (3) the
medical intervention of the American doctors who examined Natividad
in the United States of America.
For our resolution are these three vital issues: first, whether the Court
of Appeals erred in holding Dr. Ampil liable for negligence and
malpractice; second, whether the Court of Appeals erred in absolving
Dr. Fuentes of any liability; and third, whether PSI may be held
solidarily liable for the negligence of Dr. Ampil.
I - G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr. Ampil
Liable for Negligence and Malpractice.
Dr. Ampil, in an attempt to absolve himself, gears the Courts attention
to other possible causes of Natividads detriment. He argues that the
Court should not discount either of the following possibilities: first, Dr.
Fuentes left the gauzes in Natividads body after performing
hysterectomy; second, the attending nurses erred in counting the
gauzes; and third, the American doctors were the ones who placed the
gauzes in Natividads body.
Dr. Ampils arguments are purely conjectural and without basis.
Records show that he did not present any evidence to prove that the
American doctors were the ones who put or left the gauzes in
Natividads body. Neither did he submit evidence to rebut the
correctness of the record of operation, particularly the number of
gauzes used. As to the alleged negligence of Dr. Fuentes, we are
mindful that Dr. Ampil examined his (Dr. Fuentes) work and found it in
order.
The glaring truth is that all the major circumstances, taken together, as
specified by the Court of Appeals, directly point to Dr. Ampil as the
negligent party, thus:
First, it is not disputed that the surgeons used gauzes as sponges to
control the bleeding of the patient during the surgical operation.
Second, immediately after the operation, the nurses who assisted in
the surgery noted in their report that the sponge count (was) lacking
2; that such anomaly was announced to surgeon and that a search
was done but to no avail prompting Dr. Ampil to continue for closure x
x x.
Third, after the operation, two (2) gauzes were extracted from the
same spot of the body of Mrs. Agana where the surgery was
performed.
An operation requiring the placing of sponges in the incision is not
complete until the sponges are properly removed, and it is settled that
the leaving of sponges or other foreign substances in the wound after
the incision has been closed is at least prima facie negligence by the
operating surgeon.8 To put it simply, such act is considered so
inconsistent with due care as to raise an inference of negligence.
There are even legions of authorities to the effect that such act is
negligence per se.9
Of course, the Court is not blind to the reality that there are times when
danger to a patients life precludes a surgeon from further searching
missing sponges or foreign objects left in the body. But this does not
leave him free from any obligation. Even if it has been shown that a
surgeon was required by the urgent necessities of the case to leave a
sponge in his patients abdomen, because of the dangers attendant
upon delay, still, it is his legal duty to so inform his patient within a
reasonable time thereafter by advising her of what he had been
compelled to do. This is in order that she might seek relief from the
effects of the foreign object left in her body as her condition might
permit. The ruling in Smith v. Zeagler10 is explicit, thus:
The removal of all sponges used is part of a surgical operation, and
when a physician or surgeon fails to remove a sponge he has placed in
his patients body that should be removed as part of the operation, he
thereby leaves his operation uncompleted and creates a new condition
which imposes upon him the legal duty of calling the new condition to
his patients attention, and endeavoring with the means he has at hand
to minimize and avoid untoward results likely to ensue therefrom.
Here, Dr. Ampil did not inform Natividad about the missing two pieces
of gauze. Worse, he even misled her that the pain she was
experiencing was the ordinary consequence of her operation. Had he
been more candid, Natividad could have taken the immediate and
appropriate medical remedy to remove the gauzes from her body. To
our mind, what was initially an act of negligence by Dr. Ampil has
ripened into a deliberate wrongful act of deceiving his patient.
This is a clear case of medical malpractice or more appropriately,
medical negligence. To successfully pursue this kind of case, a patient
must only prove that a health care provider either failed to do
something which a reasonably prudent health care provider would
have done, or that he did something that a reasonably prudent provider
would not have done; and that failure or action caused injury to the
patient.11 Simply put, the elements are duty, breach, injury and
proximate causation. Dr, Ampil, as the lead surgeon, had the duty to
remove all foreign objects, such as gauzes, from Natividads body
before closure of the incision. When he failed to do so, it was his duty
to inform Natividad about it. Dr. Ampil breached both duties. Such
breach caused injury to Natividad, necessitating her further
examination by American doctors and another surgery. That Dr. Ampils
negligence is the proximate cause12 of Natividads injury could be
traced from his act of closing the incision despite the information given
by the attending nurses that two pieces of gauze were still missing.
That they were later on extracted from Natividads vagina established
the causal link between Dr. Ampils negligence and the injury. And what
further aggravated such injury was his deliberate concealment of the
missing gauzes from the knowledge of Natividad and her family.
II - G.R. No. 126467
Whether the Court of Appeals Erred in Absolving
Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial court of the case against
Dr. Fuentes on the ground that it is contrary to the doctrine of res ipsa
loquitur. According to them, the fact that the two pieces of gauze were
left inside Natividads body is a prima facie evidence of Dr. Fuentes
negligence.
We are not convinced.
Literally, res ipsa loquitur means "the thing speaks for itself." It is the
rule that the fact of the occurrence of an injury, taken with the
surrounding circumstances, may permit an inference or raise a
presumption of negligence, or make out a plaintiffs prima facie case,
and present a question of fact for defendant to meet with an
explanation.13 Stated differently, where the thing which caused the
injury, without the fault of the injured, is under the exclusive control of
the defendant and the injury is such that it should not have occurred if
he, having such control used proper care, it affords reasonable
evidence, in the absence of explanation that the injury arose from the
defendants want of care, and the burden of proof is shifted to him to
establish that he has observed due care and diligence.14
From the foregoing statements of the rule, the requisites for the
applicability of the doctrine of res ipsa loquitur are: (1) the occurrence
of an injury; (2) the thing which caused the injury was under the control
and management of the defendant; (3) the occurrence was such that in
the ordinary course of things, would not have happened if those who
had control or management used proper care; and (4) the absence of
explanation by the defendant. Of the foregoing requisites, the most
instrumental is the "control and management of the thing which caused
the injury."15
We find the element of "control and management of the thing which
caused the injury" to be wanting. Hence, the doctrine of res ipsa
loquitur will not lie.
It was duly established that Dr. Ampil was the lead surgeon during the
operation of Natividad. He requested the assistance of Dr. Fuentes
only to perform hysterectomy when he (Dr. Ampil) found that the
malignancy in her sigmoid area had spread to her left ovary. Dr.
Fuentes performed the surgery and thereafter reported and showed his
work to Dr. Ampil. The latter examined it and finding everything to be in
order, allowed Dr. Fuentes to leave the operating room. Dr. Ampil then
resumed operating on Natividad. He was about to finish the procedure
when the attending nurses informed him that two pieces of gauze were
missing. A "diligent search" was conducted, but the misplaced gauzes
were not found. Dr. Ampil then directed that the incision be closed.
During this entire period, Dr. Fuentes was no longer in the operating
room and had, in fact, left the hospital.
Under the "Captain of the Ship" rule, the operating surgeon is the
person in complete charge of the surgery room and all personnel
connected with the operation. Their duty is to obey his orders.16 As
stated before, Dr. Ampil was the lead surgeon. In other words, he was
the "Captain of the Ship." That he discharged such role is evident from
his following conduct: (1) calling Dr. Fuentes to perform a
hysterectomy; (2) examining the work of Dr. Fuentes and finding it in
order; (3) granting Dr. Fuentes permission to leave; and (4) ordering
the closure of the incision. To our mind, it was this act of ordering the
closure of the incision notwithstanding that two pieces of gauze
remained unaccounted for, that caused injury to Natividads body.
Clearly, the control and management of the thing which caused the
injury was in the hands of Dr. Ampil, not Dr. Fuentes.
In this jurisdiction, res ipsa loquitur is not a rule of substantive law,
hence, does not per se create or constitute an independent or separate
ground of liability, being a mere evidentiary rule. 17 In other words, mere
invocation and application of the doctrine does not dispense with the
requirement of proof of negligence. Here, the negligence was proven
to have been committed by Dr. Ampil and not by Dr. Fuentes.
III - G.R. No. 126297
Whether PSI Is Liable for the Negligence of Dr. Ampil
The third issue necessitates a glimpse at the historical development of
hospitals and the resulting theories concerning their liability for the
negligence of physicians.
Until the mid-nineteenth century, hospitals were generally charitable
institutions, providing medical services to the lowest classes of society,
without regard for a patients ability to pay.18 Those who could afford
medical treatment were usually treated at home by their doctors. 19
However, the days of house calls and philanthropic health care are
over. The modern health care industry continues to distance itself from
its charitable past and has experienced a significant conversion from a
not-for-profit health care to for-profit hospital businesses.
Consequently, significant changes in health law have accompanied the
business-related changes in the hospital industry. One important legal
change is an increase in hospital liability for medical malpractice. Many
courts now allow claims for hospital vicarious liability under the
theories of respondeat superior, apparent authority, ostensible
authority, or agency by estoppel. 20
In this jurisdiction, the statute governing liability for negligent acts is
Article 2176 of the Civil Code, which reads:
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.
A derivative of this provision is Article 2180, the rule governing
vicarious liability under the doctrine of respondeat superior, thus:
ART. 2180. The obligation imposed by Article 2176 is demandable not
only for ones own acts or omissions, but also for those of persons for
whom one is responsible.
x x x x x x
The owners and managers of an establishment or enterprise are
likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks
even though the former are not engaged in any business or industry.
x x x x x x
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.
A prominent civilist commented that professionals engaged by an
employer, such as physicians, dentists, and pharmacists, are not
"employees" under this article because the manner in which they
perform their work is not within the control of the latter (employer). In
other words, professionals are considered personally liable for the fault
or negligence they commit in the discharge of their duties, and their
employer cannot be held liable for such fault or negligence. In the
context of the present case, "a hospital cannot be held liable for the
fault or negligence of a physician or surgeon in the treatment or
operation of patients."21
The foregoing view is grounded on the traditional notion that the
professional status and the very nature of the physicians calling
preclude him from being classed as an agent or employee of a
hospital, whenever he acts in a professional capacity.22 It has been
said that medical practice strictly involves highly developed and
specialized knowledge,23 such that physicians are generally free to
exercise their own skill and judgment in rendering medical services
sans interference.24 Hence, when a doctor practices medicine in a
hospital setting, the hospital and its employees are deemed to
subserve him in his ministrations to the patient and his actions are of
his own responsibility.25
The case of Schloendorff v. Society of New York Hospital 26 was then
considered an authority for this view. The "Schloendorff doctrine"
regards a physician, even if employed by a hospital, as an independent
contractor because of the skill he exercises and the lack of control
exerted over his work. Under this doctrine, hospitals are exempt from
the application of the respondeat superior principle for fault or
negligence committed by physicians in the discharge of their
profession.
However, the efficacy of the foregoing doctrine has weakened with the
significant developments in medical care. Courts came to realize that
modern hospitals are increasingly taking active role in supplying and
regulating medical care to patients. No longer were a hospitals
functions limited to furnishing room, food, facilities for treatment and
operation, and attendants for its patients. Thus, in Bing v. Thunig, 27 the
New York Court of Appeals deviated from the Schloendorff doctrine,
noting that modern hospitals actually do far more than provide facilities
for treatment. Rather, they regularly employ, on a salaried basis, a
large staff of physicians, interns, nurses, administrative and manual
workers. They charge patients for medical care and treatment, even
collecting for such services through legal action, if necessary. The
court then concluded that there is no reason to exempt hospitals from
the universal rule of respondeat superior.
In our shores, the nature of the relationship between the hospital and
the physicians is rendered inconsequential in view of our categorical
pronouncement in Ramos v. Court of Appeals 28 that for purposes of
apportioning responsibility in medical negligence cases, an employer-
employee relationship in effect exists between hospitals and their
attending and visiting physicians. This Court held:
"We now discuss the responsibility of the hospital in this particular
incident. The unique practice (among private hospitals) of filling up
specialist staff with attending and visiting "consultants," who are
allegedly not hospital employees, presents problems in apportioning
responsibility for negligence in medical malpractice cases. However,
the difficulty is more apparent than real.
In the first place, hospitals exercise significant control in the hiring and
firing of consultants and in the conduct of their work within the hospital
premises. Doctors who apply for consultant slots, visiting or attending,
are required to submit proof of completion of residency, their
educational qualifications, generally, evidence of accreditation by the
appropriate board (diplomate), evidence of fellowship in most cases,
and references. These requirements are carefully scrutinized by
members of the hospital administration or by a review committee set
up by the hospital who either accept or reject the application. x x x.
After a physician is accepted, either as a visiting or attending
consultant, he is normally required to attend clinico-pathological
conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and
responsibilities, for the privilege of being able to maintain a clinic in the
hospital, and/or for the privilege of admitting patients into the hospital.
In addition to these, the physicians performance as a specialist is
generally evaluated by a peer review committee on the basis of
mortality and morbidity statistics, and feedback from patients, nurses,
interns and residents. A consultant remiss in his duties, or a consultant
who regularly falls short of the minimum standards acceptable to the
hospital or its peer review committee, is normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control
over their attending and visiting consultant staff. While consultants
are not, technically employees, x x x, the control exercised, the hiring,
and the right to terminate consultants all fulfill the important hallmarks
of an employer-employee relationship, with the exception of the
payment of wages. In assessing whether such a relationship in fact
exists, the control test is determining. Accordingly, on the basis of the
foregoing, we rule that for the purpose of allocating responsibility in
medical negligence cases, an employer-employee relationship in effect
exists between hospitals and their attending and visiting physicians. "
But the Ramos pronouncement is not our only basis in sustaining PSIs
liability. Its liability is also anchored upon the agency principle of
apparent authority or agency by estoppel and the doctrine of corporate
negligence which have gained acceptance in the determination of a
hospitals liability for negligent acts of health professionals. The present
case serves as a perfect platform to test the applicability of these
doctrines, thus, enriching our jurisprudence.
Apparent authority, or what is sometimes referred to as the "holding
out" theory, or doctrine of ostensible agency or agency by estoppel, 29
has its origin from the law of agency. It imposes liability, not as the
result of the reality of a contractual relationship, but rather because of
the actions of a principal or an employer in somehow misleading the
public into believing that the relationship or the authority exists. 30 The
concept is essentially one of estoppel and has been explained in this
manner:
"The principal is bound by the acts of his agent with the apparent
authority which he knowingly permits the agent to assume, or which he
holds the agent out to the public as possessing. The question in every
case is whether the principal has by his voluntary act placed the agent
in such a situation that a person of ordinary prudence, conversant with
business usages and the nature of the particular business, is justified
in presuming that such agent has authority to perform the particular act
in question.31
The applicability of apparent authority in the field of hospital liability
was upheld long time ago in Irving v. Doctor Hospital of Lake Worth,
Inc.32 There, it was explicitly stated that "there does not appear to be
any rational basis for excluding the concept of apparent authority from
the field of hospital liability." Thus, in cases where it can be shown that
a hospital, by its actions, has held out a particular physician as its
agent and/or employee and that a patient has accepted treatment from
that physician in the reasonable belief that it is being rendered in
behalf of the hospital, then the hospital will be liable for the physicians
negligence.
Our jurisdiction recognizes the concept of an agency by implication or
estoppel. Article 1869 of the Civil Code reads:
ART. 1869. Agency may be express, or implied from the acts of the
principal, from his silence or lack of action, or his failure to repudiate
the agency, knowing that another person is acting on his behalf without
authority.
In this case, PSI publicly displays in the lobby of the Medical City
Hospital the names and specializations of the physicians associated or
accredited by it, including those of Dr. Ampil and Dr. Fuentes. We
concur with the Court of Appeals conclusion that it "is now estopped
from passing all the blame to the physicians whose names it proudly
paraded in the public directory leading the public to believe that it
vouched for their skill and competence." Indeed, PSIs act is
tantamount to holding out to the public that Medical City Hospital,
through its accredited physicians, offers quality health care services.
By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their
qualifications, the hospital created the impression that they were its
agents, authorized to perform medical or surgical services for its
patients. As expected, these patients, Natividad being one of them,
accepted the services on the reasonable belief that such were being
rendered by the hospital or its employees, agents, or servants. The
trial court correctly pointed out:
x x x regardless of the education and status in life of the patient, he
ought not be burdened with the defense of absence of employer-
employee relationship between the hospital and the independent
physician whose name and competence are certainly certified to the
general public by the hospitals act of listing him and his specialty in its
lobby directory, as in the case herein. The high costs of todays
medical and health care should at least exact on the hospital greater, if
not broader, legal responsibility for the conduct of treatment and
surgery within its facility by its accredited physician or surgeon,
regardless of whether he is independent or employed."33
The wisdom of the foregoing ratiocination is easy to discern. Corporate
entities, like PSI, are capable of acting only through other individuals,
such as physicians. If these accredited physicians do their job well, the
hospital succeeds in its mission of offering quality medical services and
thus profits financially. Logically, where negligence mars the quality of
its services, the hospital should not be allowed to escape liability for
the acts of its ostensible agents.
We now proceed to the doctrine of corporate negligence or corporate
responsibility.
One allegation in the complaint in Civil Case No. Q-43332 for
negligence and malpractice is that PSI as owner, operator and
manager of Medical City Hospital, "did not perform the necessary
supervision nor exercise diligent efforts in the supervision of Drs. Ampil
and Fuentes and its nursing staff, resident doctors, and medical interns
who assisted Drs. Ampil and Fuentes in the performance of their duties
as surgeons."34 Premised on the doctrine of corporate negligence, the
trial court held that PSI is directly liable for such breach of duty.
We agree with the trial court.
Recent years have seen the doctrine of corporate negligence as the
judicial answer to the problem of allocating hospitals liability for the
negligent acts of health practitioners, absent facts to support the
application of respondeat superior or apparent authority. Its formulation
proceeds from the judiciarys acknowledgment that in these modern
times, the duty of providing quality medical service is no longer the
sole prerogative and responsibility of the physician. The modern
hospitals have changed structure. Hospitals now tend to organize a
highly professional medical staff whose competence and performance
need to be monitored by the hospitals commensurate with their
inherent responsibility to provide quality medical care.35
The doctrine has its genesis in Darling v. Charleston Community
Hospital.36 There, the Supreme Court of Illinois held that "the jury could
have found a hospital negligent, inter alia, in failing to have a sufficient
number of trained nurses attending the patient; failing to require a
consultation with or examination by members of the hospital staff; and
failing to review the treatment rendered to the patient." On the basis of
Darling, other jurisdictions held that a hospitals corporate negligence
extends to permitting a physician known to be incompetent to practice
at the hospital.37 With the passage of time, more duties were expected
from hospitals, among them: (1) the use of reasonable care in the
maintenance of safe and adequate facilities and equipment; (2) the
selection and retention of competent physicians; (3) the overseeing or
supervision of all persons who practice medicine within its walls; and
(4) the formulation, adoption and enforcement of adequate rules and
policies that ensure quality care for its patients. 38 Thus, in Tucson
Medical Center, Inc. v. Misevich,39 it was held that a hospital, following
the doctrine of corporate responsibility, has the duty to see that it
meets the standards of responsibilities for the care of patients. Such
duty includes the proper supervision of the members of its medical
staff. And in Bost v. Riley,40 the court concluded that a patient who
enters a hospital does so with the reasonable expectation that it will
attempt to cure him. The hospital accordingly has the duty to make a
reasonable effort to monitor and oversee the treatment prescribed and
administered by the physicians practicing in its premises.
In the present case, it was duly established that PSI operates the
Medical City Hospital for the purpose and under the concept of
providing comprehensive medical services to the public. Accordingly, it
has the duty to exercise reasonable care to protect from harm all
patients admitted into its facility for medical treatment. Unfortunately,
PSI failed to perform such duty. The findings of the trial court are
convincing, thus:
x x x PSIs liability is traceable to its failure to conduct an investigation
of the matter reported in the nota bene of the count nurse. Such failure
established PSIs part in the dark conspiracy of silence and
concealment about the gauzes. Ethical considerations, if not also legal,
dictated the holding of an immediate inquiry into the events, if not for
the benefit of the patient to whom the duty is primarily owed, then in
the interest of arriving at the truth. The Court cannot accept that the
medical and the healing professions, through their members like
defendant surgeons, and their institutions like PSIs hospital facility,
can callously turn their backs on and disregard even a mere probability
of mistake or negligence by refusing or failing to investigate a report of
such seriousness as the one in Natividads case.
It is worthy to note that Dr. Ampil and Dr. Fuentes operated on
Natividad with the assistance of the Medical City Hospitals staff,
composed of resident doctors, nurses, and interns. As such, it is
reasonable to conclude that PSI, as the operator of the hospital, has
actual or constructive knowledge of the procedures carried out,
particularly the report of the attending nurses that the two pieces of
gauze were missing. In Fridena v. Evans, 41 it was held that a
corporation is bound by the knowledge acquired by or notice given to
its agents or officers within the scope of their authority and in reference
to a matter to which their authority extends. This means that the
knowledge of any of the staff of Medical City Hospital constitutes
knowledge of PSI. Now, the failure of PSI, despite the attending
nurses report, to investigate and inform Natividad regarding the
missing gauzes amounts to callous negligence. Not only did PSI
breach its duties to oversee or supervise all persons who practice
medicine within its walls, it also failed to take an active step in fixing
the negligence committed. This renders PSI, not only vicariously liable
for the negligence of Dr. Ampil under Article 2180 of the Civil Code, but
also directly liable for its own negligence under Article 2176. In
Fridena, the Supreme Court of Arizona held:
x x x In recent years, however, the duty of care owed to the patient by
the hospital has expanded. The emerging trend is to hold the hospital
responsible where the hospital has failed to monitor and review
medical services being provided within its walls. See Kahn Hospital
Malpractice Prevention, 27 De Paul . Rev. 23 (1977).
Among the cases indicative of the emerging trend is Purcell v.
Zimbelman, 18 Ariz. App. 75,500 P. 2d 335 (1972). In Purcell, the
hospital argued that it could not be held liable for the malpractice of a
medical practitioner because he was an independent contractor within
the hospital. The Court of Appeals pointed out that the hospital had
created a professional staff whose competence and performance was
to be monitored and reviewed by the governing body of the hospital,
and the court held that a hospital would be negligent where it had
knowledge or reason to believe that a doctor using the facilities was
employing a method of treatment or care which fell below the
recognized standard of care.
Subsequent to the Purcell decision, the Arizona Court of Appeals held
that a hospital has certain inherent responsibilities regarding the quality
of medical care furnished to patients within its walls and it must meet
the standards of responsibility commensurate with this undertaking.
Beeck v. Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153
(1972). This court has confirmed the rulings of the Court of Appeals
that a hospital has the duty of supervising the competence of the
doctors on its staff. x x x.
x x x x x x
In the amended complaint, the plaintiffs did plead that the operation
was performed at the hospital with its knowledge, aid, and assistance,
and that the negligence of the defendants was the proximate cause of
the patients injuries. We find that such general allegations of
negligence, along with the evidence produced at the trial of this case,
are sufficient to support the hospitals liability based on the theory of
negligent supervision."
Anent the corollary issue of whether PSI is solidarily liable with Dr.
Ampil for damages, let it be emphasized that PSI, apart from a general
denial of its responsibility, failed to adduce evidence showing that it
exercised the diligence of a good father of a family in the accreditation
and supervision of the latter. In neglecting to offer such proof, PSI
failed to discharge its burden under the last paragraph of Article 2180
cited earlier, and, therefore, must be adjudged solidarily liable with Dr.
Ampil. Moreover, as we have discussed, PSI is also directly liable to
the Aganas.
One final word. Once a physician undertakes the treatment and care of
a patient, the law imposes on him certain obligations. In order to
escape liability, he must possess that reasonable degree of learning,
skill and experience required by his profession. At the same time, he
must apply reasonable care and diligence in the exercise of his skill
and the application of his knowledge, and exert his best judgment.
WHEREFORE, we DENY all the petitions and AFFIRM the challenged
Decision of the Court of Appeals in CA-G.R. CV No. 42062 and CA-
G.R. SP No. 32198.
Costs against petitioners PSI and Dr. Miguel Ampil. SO ORDERED.
 TRAVEL & TOURS ADVISERS v. CRUZ, ET AL.
THIRD DIVISION
G.R. No. 199282, March 14, 2016
TRAVEL & TOURS ADVISERS, INCORPORATED, Petitioner, v.
ALBERTO CRUZ, SR., EDGAR HERNANDEZ AND VIRGINIA
MUOZ, Respondents.
DECISION
PERALTA, J.:
For resolution of this Court is the Petition for Review on Certiorari
under Rule 45 of the Revised Rules of Court dated December 28,
2011, of petitioner Travel & Tours Advisers, Inc. assailing the Decision 1
dated May 16, 2011 and Resolution 2 dated November 10, 2011 of the
Court of Appeals (CA), affirming with modifications the Decision3 dated
January 30, 2008 of the Regional Trial Court (RTC), Branch 61,
Angeles City finding petitioner jointly and solidarity liable for damages
incurred in a vehicular accident.
The facts follow.
Respondent Edgar Hernandez was driving an Isuzu Passenger Jitney
(jeepney) that he owns with plate number DSG-944 along Angeles-
Magalang Road, Barangay San Francisco, Magalang, Pampanga, on
January 9, 1998, around 7:50 p.m. Meanwhile,. a Daewoo passenger
bus (RCJ Bus Lines) with plate number NXM-116, owned by petitioner
Travel and Tours Advisers, Inc. and driven by Edgar Calaycay travelled
in the same direction as that of respondent Edgar Hernandez vehicle.
Thereafter, the bus bumped the rear portion of the jeepney causing it
to ram into an acacia tree which resulted in the death of Alberto Cruz,
Jr. and the serious physical injuries of Virginia Muoz.
Thus, respondents Edgar Hernandez, Virginia Muoz and Alberto
Cruz, Sr., father of the deceased Alberto Cruz, Jr., filed a complaint for
damages, docketed as Civil Case No. 9006 before the RTC claiming
that the collision was due to the reckless, negligent and imprudent
manner by which Edgar Calaycay was driving the bus, in complete
disregard to existing traffic laws, rules and regulations, and praying
that judgment be rendered ordering Edgar Calaycay and petitioner
Travel & Tours Advisers, Inc. to pay the following:
chanRoblesvirtualLawlibrary
1. For plaintiff Alberto Cruz, Sr.
a. The sum of P140,000.00 for the reimbursement of the expenses
incurred for coffin, funeral expenses, for vigil, food, drinks for the
internment (sic) of Alberto Cruz, Jr. as part of actual damages;
b. The sum of P300,000.00, Philippine Currency, as moral,
compensatory and consequential damges.
c. The sum of P6,000.00 a month as lost of (sic) income from January
9, 1998 up to the time the Honorable Court may fixed (sic);
2. For plaintiff Virginia Muoz:
a. The sum of P40,000.00, Philippine Currency, for the reimbursement
of expenses for hospitalization, medicine, treatment and doctor's fee as
part of actual damages;
b. The sum of P150,000.00 as moral, compensatory and consequential
damages;
3. For plaintiff Edgar Hernandez:
a. The sum of P42,400.00 for the damage sustained by plaintiffs Isuzu
Passenger Jitney as part of actual damages, plus P500.00 a day as
unrealized net income for four (4) months;
b. The sum of P150,000.00, Philippine Currency, as moral,
compensatory and consequential damages;
4. The sum of P50,000.00 pesos, Philippine Currency, as attorney's
fees, plus P1,000.00 per appearance fee in court;
5. Litigation expenses in the sum of P30,000.00; and
6. To pay the cost of their suit.
Other reliefs just and equitable are likewise prayed for.4
For its defense, the petitioner claimed that it exercised the diligence of
a good father of a family in the selection and supervision of its
employee Edgar Calaycay and further argued that it was Edgar
Hernandez who was driving his passenger jeepney in a reckless and
imprudent manner by suddenly entering the lane of the petitioner's bus
without seeing to it that the road was clear for him to enter said lane. In
addition, petitioner alleged that at the time of the incident, Edgar
Hernandez violated his franchise by travelling along an unauthorized
line/route and that the jeepney was overloaded with passengers, and
the deceased Alberto Cruz, Jr. was clinging at the back thereof.
On January 30, 2008, after trial on the merits, the RTC rendered
judgment in favor of the respondents, the dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
ordering the defendants Edgar Calaycay Ranese and Travel & Tours
Advisers, Inc. to jointly and solidarity pay the following:
I. 1. To plaintiff Alberto Cruz, Sr. and his family
a) the sum of P50,000.00 as actual and compensatory damages;
b) the sum of P250,000.00 for loss of earning capacity of the decedent
Alberto Cruz, Jr. and;
c) the sum of P50,000.00 as moral damages.
2. To plaintiff Virginia Muoz -
a) the sum of P16,744.00 as actual and compensatory damages; and
b) the sum of P150,000.00 as moral damages.
3. To Edgar Hernandez -
a) the sum of P50,000.00 as actual and compensatory damages.
II. The sum of P50,000.00 as attorney's fees, and
III. The sum of P4,470.00 as cost of litigation
SO ORDERED.
Angeles City, Philippines, January 30, 2008.5
Petitioner filed its appeal with the CA, and on May 16, 2011, the
appellate court rendered its decision, the decretal portion of which
reads as follows:
WHEREFORE, the instant appeal is PARTLY GRANTED. The assailed
Decision of the RTC, Branch 61, Angeles City, dated January 30, 2008,
is AFFIRMED with MODIFICATIONS. The defendants are ordered to
pay, jointly and severally, the following:
1. To plaintiff Alberto Cruz, Sr. and family
a) the sum of P25,000.00 as actual damages;
b) the sum of P250.000.00 for the loss of earning capacity of the
decedent Alberto Cruz, Jr.;
c) the sum of P50,000.00 as civil indemnity for the death of Alberto
Cruz, Jr.;
d) the sum of P50,000.00 as moral damages.
2. To plaintiff Virginia Muoz
a) the sum of P16,744.00 as actual damages; and
b) the sum of P30,000.00 as moral damages.
3. To plaintiff Edgar Hernandez
a) The sum of P40,200.00 as actual damages.
 3. The award of attorney's fees (P50,000.00) and cost of
litigation (P4,470.00) remains.
SO ORDERED.6
Hence, the present petition wherein the petitioner assigned the
following errors:
I.
THE PETITIONER'S BUS WAS NOT "OUT OF LINE;"
II.
THE FACT THAT THE JEEPNEY WAS BUMPED ON ITS LEFT REAR
PORTION DOES NOT PREPONDERANTLY PROVE THAT THE
DRIVER OF THE BUS WAS THE NEGLIGENT PARTY;
III.
THE DECEASED ALBERTO CRUZ, JR. WAS POSITIONED AT THE
RUNNING BOARD OF THE JEEPNEY;
IV.
THE BUS DRIVER WAS NOT SPEEDING OR NEGLIGENT WHEN
HE FAILED TO STEER THE BUS TO A COMPLETE STOP;
V.
THE PETITIONER EXERCISED EXTRAORDINARY DILIGENCE OF A
GOOD FATHER OF A FAMILY IN ITS SELECTION AND
SUPERVISION OF DRIVER CALAYCAY; AND
VI.
THERE IS NO FACTUAL AND LEGAL BASIS FOR THE VARIOUS
AWARDS OF MONETARY DAMAGES.7ChanRoblesVirtualawlibrary
According to petitioner, contrary to the declaration of the RTC, the
petitioner's passenger bus was not "out-of-line" and that petitioner is
actually the holder of a PUB (public utility bus) franchise for provincial
operation from Manila-Ilocos Norte/Cagayan-Manila, meaning the
petitioner's passenger bus is allowed to traverse any point between
Manila-Ilocos Norte/Cagayan-Manila. Petitioner further asseverates
that the fact that the driver of the passenger bus took the Magalang
Road instead of the Bamban Bridge is of no moment because the
bridge was under construction due to the effects of the lahar; hence
closed to traffic and the Magalang Road is still in between the points of
petitioner's provincial operation. Furthermore, petitioner claims that the
jeepney was traversing a road way out of its allowed route, thus, the
presumption that respondent Edgar Hernandez was the negligent
party.
Petitioner further argues that respondent Edgar Hernandez failed to
observe that degree of care, precaution and vigilance that his role as a
public utility called for when he allowed the deceased Alberto Cruz, Jr.,
to hang on to the rear portion of the jeepney.
After due consideration of the issues and arguments presented by
petitioner, this Court finds no merit to grant the petition.
Jurisprudence teaches us that "(a)s a rule, the jurisdiction of this Court
in cases brought to it from the Court of Appeals x x x is limited to the
review and revision of errors of law allegedly committed by the
appellate court, as its findings of fact are deemed conclusive. As such,
this Court is not duty-bound to analyze and weigh all over again the
evidence already considered in the proceedings below.8 This rule,
however, is not without exceptions."9 The findings of fact of the Court of
Appeals, which are, as a general rule, deemed conclusive, may admit
of review by this Court:10
(1) when the factual findings of the Court of Appeals and the trial court
are contradictory;
(2) when the findings are grounded entirely on speculation, surmises,
or conjectures;
(3) when the inference made by the Court of Appeals from its findings
of fact is manifestly mistaken, absurd, or impossible;
(4) when there is grave abuse of discretion in the appreciation of facts;
(5) when the appellate court, in making its findings, goes beyond the
issues of the case, and such findings are contrary to the admissions of
both appellant and appellee;
6) when the judgment of the Court of Appeals is premised on a
misapprehension of facts;
(7) when the Court of Appeals fails to notice certain relevant facts
which, if properly considered, will justify a different conclusion;
(8) when the findings of fact are themselves conflicting;
(9) when the findings of fact are conclusions without citation of the
specific evidence on which they are based; and
(10) when the findings of fact of the Court of Appeals are premised on
the absence of evidence but such findings are contradicted by the
evidence on record.
The issues presented are all factual in nature and do not fall under any
of the exceptions upon which this Court may review. Moreover, well
entrenched is the prevailing jurisprudence that only errors of law and
not of facts are reviewable by this Court in a petition for review on
certiorari under Rule 45 of the Revised Rules of Court, which applies
with greater force to the Petition under consideration because the
factual findings by the Court of Appeals are in full agreement with what
the trial court found.11
Nevertheless, a review of the issues presented in this petition would
still lead to the finding that petitioner is still liable for the damages
awarded to the respondents but with certain modifications.
The RTC and the CA are one in finding that both vehicles were not in
their authorized routes at the time of the incident. The conductor of
petitioner's bus admitted on cross-examination that the driver of the
bus veered off from its usual route to avoid heavy traffic. The CA thus
observed:
First. As pointed out in the assailed Decision, both vehicles were not in
their authorized routes at the time of the mishap. FRANCISCO
TEJADA, the conductor of defendant-appellant's bus, admitted on
cross-examination that the driver of the bus passed through Magalang
Road instead of Sta. Ines, which was the usual route, thus:
x x x
Q: What route did you take from Manila to Laoag, Ilocos Sur?
A: Instead of Sta. Ines, we took Magalang Road, sir.
Q: So that is not your usual route that you are taking?
A: No, sir, it so happened that there was heavy traffic at Bamban,
Tarlac, that is why we took the Magalang Road.
x x x
The foregoing testimony of defendant-appellant's own witness clearly
belies the contention that its driver took the Magalang Road instead of
the Bamban Bridge because said bridge was closed and under
construction due to the effects of lahar. Regardless of the reason,
however, the irrefutable fact remains that defendant-appellant's bus
likewise veered from its usual route.12ChanRoblesVirtualawlibrary
Petitioner now claims that the bus was not out of line when the
vehicular accident happened because the PUB (public utility bus)
franchise that the petitioner holds is for provincial operation from
Manila-Ilocos Norte/Cagayan-Manila, thus, the bus is allowed to
traverse any point between Manila-Ilocos Norte/Cagayan-Manila. Such
assertion is correct. "Veering away from the usual route" is different
from being "out of line." A public utility vehicle can and may veer away
from its usual route as long as it does not go beyond its allowed route
in its franchise, in this case, Manila-Ilocos Norte/Cagayan-Manila.
Therefore, the bus cannot be considered to have violated the contents
of its franchise. On the other hand, it is indisputable that the jeepney
was traversing a road out of its allowed route. Necessarily, this case is
not that of "in pari delicto" because only one party has violated a traffic
regulation. As such, it would seem that Article 2185 of the New Civil
Code is applicable where it provides that:
Art. 2185. Unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the time of the
mishap, he was violating any traffic regulation.
The above provision, however, is merely a presumption. From the
factual findings of both the RTC and the CA based on the evidence
presented, the proximate cause of the collision is the negligence of the
driver of petitioner's bus. The jeepney was bumped at the left rear
portion. Thus, this Court's past ruling, 13 that drivers of vehicles who
bump the rear of another vehicle are presumed to be the cause of the
accident, unless contradicted by other evidence, can be applied. The
rationale behind the presumption is that the driver of the rear vehicle
has full control of the situation as he is in a position to observe the
vehicle in front of him.14

Thus, as found by the CA:
Second. The evidence on record preponderantly shows that it was the
negligence of defendant-appellant's driver, EDGAR CALAYCAY, that
was the proximate cause of the collision.
Even without considering the photographs (Exhibit "N", " " and "N-2")
showing the damage to the jeepney, it cannot be denied that the
said vehicle was bumped in its left rear portion by defendant-
appellant's bus. The same was established by the unrebutted
testimonies of plaintiffs-appellees EDGAR HERNANDEZ and
VIRGINIA MUOZ, as follows:
EDGAR HERNANDEZ
x x
Q: Now, according to you, you were not able to reach the town proper
of Magalang because your vehicle was bumped. In what portion of
your vehicle was it bumped, Mr. Witness?
A: At the left side edge portion of the vehicle, sir.
Q: When it was bumped on the rear left side portion, what happened to
your vehicle?
A: It was bumped strongly, sir, and then, "sinulpit ya", sir.
Q: When your vehicle was "sinulpit" and hit an acacia tree, what
happened to the acacia tree?
A: The jeepney stopped and Alberto Cruz died and some of my
passengers were injured, sir.
x x
VIRGINIA MUOZ
x x
Q: what portion of the vehicle wherein you were boarded that was hit
by the Travel Tours Bus?
A: The rear portion of the jeep, sir.
Q: It was hit by the Travel Tours Bus?
A: Yes, sir.
Q: What happened to you when the vehicle was bumped?
A: I was thrown off the vehicle, sir.
xxx
It has been held that drivers of vehicles "who bump the rear of another
vehicle" are presumed to be "the cause of the accident, unless
contradicted by other evidence." The rationale behind the presumption
is that the driver of the rear vehicle has full control of the situation as
he is in a position to observe the vehicle in front of him.
In the case at bar, defendant-appellant failed to overturn the foregoing
presumption. FRANCISCO TEJADA, the conductor of the bus who was
admittedly "seated in front, beside the driver's seat," and thus had an
unimpeded view of the road, declared on direct examination that the
jeepney was about 10 to 15 meters away from the bus when he first
saw said vehicle on the road. Clearly, the bus driver, EDGAR
CALAYCAY, would have also been aware of the presence of the
jeepney and, thus, was expected to anticipate its movements.
However, on cross-examination, TEJADA claimed that the jeepney
"suddenly appeared" before the bus, passing it diagonally, and causing
it to be hit in its left rear side. Such uncorroborated testimony cannot
be accorded credence by this Court because it is inconsistent with the
physical evidence of the actual damage to the jeepney. On this score,
We quote with approval the following disquisition of the trial court:
x x x (F)rom the evidence presented, it was established that it was the
driver of the RCJ Line Bus which was negligent and recklessly driving
the bus of the defendant corporation.
Francisco Tejada, who claimed to be the conductor of the bus, testified
that it was the passenger jeepney coming from the pavement which
suddenly entered diagonally the lane of the bus causing the bus to hit
the rear left portion of the passenger jeepney. But such testimony is
belied by the photographs of the jeepney (Exhs. N and N-1). As shown
by Exh. N-1, the jeepney was hit at the rear left portion and not when
the jeepney was in a diagonal position to the bus otherwise, it should
have been the left side of the passenger jeepney near the rear portion
that could have been bumped by the bus. It is clear from Exh. N-1 and
it was even admitted that the rear left portion of the passenger jeepney
was bumped by the bus. Further, if the jeepney was in diagonal
position when it was hit by the bus, it should have been the left side of
the body of the jeepney that could have sustained markings of such
bumping. In this case, it is clear that it is the left rear portion of the
jeepney that shows the impact of the markings of the bumping. The
jeepney showed that it had great damage on the center of the front
portion (Exh. N-2). It was the center of the front portion that hit the
acacia tree (Exh. N). As admitted by the parties, both vehicles were
running along the same direction from west to east. As testified to by
x Francisco Tejada, the jeepney was about ten (10) to fifteen (15) meters
away from the bus when he noticed the jeepney entering diagonally
the lane of the bus. If this was so, the middle left side portion of the
jeepney could have been hit, not the rear portion. The evidence is clear
that the bus was in fast running condition, otherwise, it could have
stopped to evade hitting the jeepney. The hitting of the acacia tree by
the jeepney, and the damages caused on the jeepney in its front (Exh.
N-2) and on its rear left side show that the bus was running very fast.
xxxx
Assuming ex gratia argumenti that the jeepney was in a "stop position,"
as claimed by defendant-appellant, on the pavement of the road 10 to
15 meters ahead of the bus before swerving to the left to merge into
traffic, a cautious public utility driver should have stepped on his
brakes and slowed down. The distance of 10 to 15 meters would have
allowed the bus with slacked speed to give way to the jeepney until the
latter could fully enter the lane. Obviously, as correctly found by the
court a quo, the bus was running very fast because even if the driver
x stepped on the brakes, it still made contact with the jeepney with such
force that sent the latter vehicle crashing head-on against an acacia
tree. In fact, FRANCISCO TEJADA effectively admitted that the bus
was very fast when he declared that the driver "could not suddenly
x apply the break (sic) in full stop because our bus might turn turtle xxx."
Incidentally, the allegation in the appeal brief that the driver could not
apply the brakes with force because of the possibly that the bus might
turn turtle "as they were approaching the end of the gradient or the
decline of the sloping terrain or topography of the roadway" was only
raised for the first time in this appeal and, thus, may not be considered.
Besides, there is nothing on record to substantiate the same.
Rate of speed, in connection with other circumstances, is one of the
principal considerations in determining whether a motorist has been
reckless in driving a vehicle, and evidence of the extent of the damage
caused may show the force of the impact from which the rate of speed
of the vehicle may be modestly inferred. From the evidence presented
in this case, it cannot be denied that the bus was running very fast. As
held by the Supreme Court, the very fact of speeding is indicative of
imprudent behavior, as a motorist must exercise ordinary care and
drive at a reasonable rate of speed commensurate with the conditions
encountered, which will enable him to keep the vehicle under control
and avoid injury to others using the highway.15
From the above findings, it is apparent that the proximate cause of the
accident is the petitioner's bus and that the petitioner was not able to
present evidence that would show otherwise. Petitioner also raised the
issue that the deceased passenger, Alberto Cruz, Jr. was situated at
the running board of the jeepney which is a violation of a traffic
regulation and an indication that the jeepney was overloaded with
passengers. The CA correctly ruled that no evidence was presented to
show the same, thus:
That the deceased passenger, ALBERTO CRUZ, JR., was clinging at
the back of the jeepney at the time of the mishap cannot be gleaned
from the testimony of plaintifff-appellee VIRGINIA MUOZ that it was
she who was sitting on the left rearmost of the jeepney.
VIRGINIA MUOZ herself testified that there were only about 16
passengers on board the jeepney when the subject incident happened.
Considering the testimony of plaintiff-appellee EDGAR HERNANDEZ
that the seating capacity of his jeepney is 20 people, VIRGINIA'S
declaration effectively overturned defendant-appellant's defense that
plaintiff-appellee overloaded his jeepney and allowed the deceased
passenger to cling to the outside railings. Yet, curiously, the defense
declined to cross-examine VIRGINIA, the best witness from whom
defendant-appellant could have extracted the truth about the exact
location of ALBERTO CRUZ, JR. in or out of the jeepney. Such failure
is fatal to defendant-appellant's case. The only other evidence left to
support its claim is the testimony of the conductor, FRANCISCO
TEJADA, that there were 3 passengers who were clinging to the
back of the jeepney, and it was the passenger clinging to the left
side that was bumped by the bus. However, in answer to the
clarificatory question from the court a quo, TEJADA admitted that
he did not really see what happened, thus:
Q: What happened to the passenger clinging to the left side
portion?
A: He was bumped, your Honor.
Q: Why, the passenger fell?
A: I did not really see what happened, Mam [sic], what I know he
was bumped.
This, despite his earlier declaration that he was seated in front of the
bus beside the driver's seat and knew what happened to the
passengers who were clinging to the back of the jeepney. Indubitably,
therefore, TEJADA was not a credible witness, and his testimony is not
worthy of belief.16
Consequently, the petitioner, being the owner of the bus and the
employer of the driver, Edgar Calaycay, cannot escape liability. 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 and is governed by the provisions of
this Chapter.
Complementing Article 2176 is Article 2180 which states the following:
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 x x x.
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry x
x x.
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.
Article 2180, in relation to Article 2176, of the Civil Code provides that
the employer of a negligent employee is liable for the damages caused
by the latter. When an injury is caused by the negligence of an
employee there instantly arises a presumption of the law that there
was negligence on the part of the employer either in the selection of
his employee or in the supervision over him after such selection. The
presumption, however, may be rebutted by a clear showing on the part
of the employer that it had exercised the care and diligence of a good
father of a family in the selection and supervision of his employee.
Hence, to escape solidary liability for quasi-delict committed by an
employee, the employer must adduce sufficient proof that it exercised
such degree of care.17 In this case, the petitioner failed to do so. The
RTC and the CA exhaustively and correctly ruled as to the matter, thus:
Thus, whenever an employee's (defendant EDGAR ALAYCAY)
negligence causes- damage or injury to another, there instantly arises
a presumption that the employer (defendant-appellant) failed to
exercise the due diligence of a good father of the family in the selection
or supervision of its employees. To avoid liability for a quasi-delict
committed by its employee, an employer must overcome the
presumption by presenting convincing proof that it exercised the care
and diligence of a good father of a family in the selection and
supervision of its employee. The failure of the defendant-appellant to
overturn this presumption was meticulously explained by the court a
quo as follows:
The position of the defendant company that it cannot be held jointly
and severally liable for such damages because it exercised the
diligence of a good father of a family, that (sic) does not merit great
credence.
As admitted, Edgar Calaycay was duly authorized by the defendant
company to drive the bus at the time of the incident. Its claim that it has
issued policies, rules and regulation's to be followed, conduct seminars
and see to it that their drivers and employees imbibe such policies,
rules and regulations, have their drivers and conductors medically
checked-up and undergo drug-testing, did not show that all these
rudiments were applied to Edgar Calaycay. No iota of evidence was
presented that Edgar Calaycay had undergone all these activities to
ensure that he is a safe and capable drivers [sic]. In fact, the defendant
company did not put up a defense on the said driver. The defendant
company did not even secure a counsel to defend the driver. It did not
present any evidence to show it ever counseled such driver to be
careful in his driving. As appearing from the evidence of the defendant
corporation, the driver at the time of the incident was Calaycay
Francisco (Exh. 9) and the conductor was Tejada. This shows that the
defendant corporation does not exercise the diligence of a good father
of a family in the selection and supervision of the employees. It does
not even know the correct and true name of its drivers. The testimony
of Rolando Abadilla, Jr. that they do not have the records of Edgar
Calaycay because they ceased operation due to the death of his father
is not credible. Why only the records of Edgar Calaycay? It has the
inspection and dispatcher reports for January 9, 1998 and yet it could
not find the records of Edgar Calaycay. As pointed out by the Supreme
Court in a line of cases, the evidence must not only be credible but
must come from a credible witness. No proof was submitted that Edgar
Calaycay attended such alleged seminars and examinations. Thus,
under Art. 2180 of the Civil Code, Employers shall be liable for the
damage caused by their employees and household helper acting within
the scope of their assigned tasks, even though the former are not
engaged in any business or industry. The liability of the employer for
the tortuous acts or negligence of its employer [sic] is primary and
solidary, direct and immediate, and not conditional upon the insolvency
of prior recourse against the negligent employee. The cash voucher for
the alleged lecture on traffic rules and regulations (Exh. 12) presented
by the defendant corporation is for seminar allegedly conducted on
May 20 and 21, 1995 when Edgar Calaycay was not yet in the employ
of the defendant corporation. As testified to by Rolando Abadilla, Jr.,
Edgar Calaycay stated his employment with the company only in 1996.
Rolando Abadilla, Jr. testified that copies of the manual (Exh. 8) are
given to the drivers and conductors for them to memorize and know
the same, but no proof was presented that indeed Edgar Calaycay was
among the recipients. Nobody testified categorically that indeed Edgar
Calaycay underwent any of the training before being employed by the
defendant company. All the testimonies are generalizations as to the
alleged policies, rules and regulations but no concrete evidence was
presented that indeed Edgar Calaycay underwent such familiarization,
trainings and seminars before he got employed and during that time
that he was performing his duties as a bus driver of the defendant
corporation. Moreover, the driver's license of the driver was not even
presented. These omissions did not overcome the liability of the
defendant corporation under Article 2180 of the Civil Code. x x x
The observation of the court a quo that defendant-appellant failed to
show proof that EDGAR CALAYCAY did in fact undergo the seminars
conducted by it assumes greater significance when viewed in the light
of the following admission made by ROLANDO ABADILLA, JR.,
General Manager of the defendant-appellant corporation, that suggest
compulsory attendance of said seminars only among drivers and
conductors in Manila, thus:
x x x x
Q: How many times does (sic) the seminars being conducted by your
company a year?
A: Normally, it is a minimum of two (2) seminars per year, sir.
Q: In these seminars that you conduct, are all drivers and conductors
obliged to attend?
A: Yes, sir, if they are presently in Manila.
Q: It is only in Manila that you conduct seminars?
A: Yes, sir.
xxx
Moreover, with respect to the selection process, ROLANDO
ABADILLA, JR. categorically admitted in open court that EDGAR
CALAYCAY was not able to produce the clearances required by
defendant-appellant upon employment, thus:
x x x x
Q: By the way, Mr. Witness, do you know this Edgar Calaycay who was
once employed by your company as a driver?
A: Yes, sir.
Q: Have you seen the application of Edgar Calaycay?
A: Yes, sir.
Q: From what I have seen, what documents did he submit in applying
as a driver in your business?
Atty. De Guzman: Very leading, your Honor.
Q: Before a driver could be accepted, what document is he required to
submit?
A: The company application form; NBI clearance; police clearance;
barangay clearance; mayor's clearance and other clearances, sir.
Q: Was he able to reproduce these clearances by Mr. Calaycay?
A: No, sir.
 x x x18
In the selection of prospective employees, employers are required to
examine them as to their qualifications, experience, and service
records.19 On the other hand, due diligence in the supervision of
employees includes the formulation of suitable rules and regulations
for the guidance of employees, the issuance of proper instructions
intended for the protection of the public and persons with whom the
employer has relations through his or its employees and the imposition
of necessary disciplinary measures upon employees in case of breach
or as may be warranted to ensure the performance of acts
indispensable to the business of and beneficial to their employer. To
this, we add that actual implementation and monitoring of consistent
compliance with said rules should be the constant concern of the
employer, acting through dependable supervisors who should regularly
report on their supervisory functions. 20 In this case, as shown by the
above findings of the RTC, petitioner was not able to prove that it
exercised the required diligence needed in the selection and
supervision of its employee.
Be that as it may, this doesn't erase the fact that at the time of the
vehicular accident, the jeepney was in violation of its allowed route as
found by the RTC and the CA, hence, the owner and driver of the
jeepney likewise, are guilty of negligence as defined under Article 2179
of the Civil Code, which reads as follows:
When the plaintiffs negligence was the immediate and proximate
cause of his injury, he cannot recover damages. But if his negligence
was only contributory, the immediate and proximate cause of the injury
being the defendant's lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the damages to be awarded.
The petitioner and its driver, therefore, are not solely liable for the
damages caused to the victims. The petitioner must thus be held liable
only for the damages actually caused by his negligence. 21 It is,
therefore, proper to mitigate the liability of the petitioner and its driver.
The determination of the mitigation of the defendant's liability varies
depending on the circumstances of each case. 22 The Court had
sustained a mitigation of 50% in Rakes v. AG & P;23 20% in Phoenix
Construction, Inc. v. Intermediate Appellate Court24 and LBC Air Cargo,
Inc. v. Court of Appeals;25 and 40% in Bank of the Philippine Islands v.
Court of Appeals26 and Philippine Bank of Commerce v. Court of
Appeals.27cralawred
In the present case, it has been established that the proximate cause
of the death of Alberto Cruz, Jr. is the negligence of petitioner's bus
driver, with the contributory negligence of respondent Edgar
Hernandez, the driver and owner of the jeepney, hence, the heirs of
Alberto Cruz, Jr. shall recover damages of only 50% of the award from
petitioner and its driver. Necessarily, 50% shall be bourne by
respondent Edgar Hernandez. This is pursuant to Rakes v. AG & P and
after considering the circumstances of this case.
In awarding damages for the death of Alberto Cruz, Jr., the CA ruled as
follows:
For the death of ALBERTO CRUZ, JR. the court a quo awarded his
heirs P50,000.00 as actual and compensatory damages; P250,000.00
for loss of earning capacity; and another P50,000.00 as moral
damages. However, as pointed out in the assailed Decision dated
January 30, 2008, only the amount paid (P25,000.00) for funeral
services rendered by Magalena Memorial Home was duly receipted
(Exhibit "E-1"). It is settled that actual damages must be substantiated
by documentary evidence, such as receipts, in order to prove
expenses incurred as a result of the death of the victim. As such, the
award for actual damages in the amount of P50,000.00 must be
modified accordingly.
Under Article 2206 of the Civil Code, the damages for death caused by
a quasi-delict shall, in addition to the indemnity for the death itself
which is fixed by current jurisprudence at P50,000.00 and which the
court a quo failed to award in this case, include loss of the earning
capacity of the deceased and moral damages for mental anguish by
reason of such death. The formula for the computation of loss of
earning capacity is as follows:
Net earning capacity = Life expectancy x [Gross Annual Income -
Living Expenses (50% of gross annual income)], where life expectancy
= 2/3 (80 - the age of the deceased)
Evidence on record shows that the deceased was earning P6,000.00 a
month as smoke house operator at Pampanga's Best, Inc., as per
Certification (Exhibit "K") issued by the company's Production
Manager, Enrico Ma. O. Hizon, on March 18, 1998, His gross income
therefore amounted to P72,000.00 [P6,000.00 x 12]. Deducting 50%
therefrom (P36,000.00) representing the living expenses, his net
annual income amounted to P36,000.00. Multiplying this by his life
expectancy of 40.67 years [2/3(80-19)] having died at the young age of
19, the award for loss of earning capacity should have been
P1,464,000.00. Considering, however, that his heirs represented by his
father, ALBERTO CRUZ, SR., no longer appealed from the assailed
Decision dated January 30, 2008, and no discussion thereon was even
attempted in plaintiffs-appellees' appeal brief, the award for loss of
earning capacity in the amount of P250,000.00 stands.
Moral damages in the amount of P50,000.00 is adequate and
reasonable, bearing in mind that the purpose for making such award is
not to enrich the heirs of the victim but to compensate them however
inexact for injuries to their feelings.
xxx28
In summary, the following were awarded to the heirs of Alberto Cruz,
Jr.:
1) P25,000.00 as actual damages;
2) P250,000.00 for the loss of earning;
3) P50,000.00 as civil indemnity for the death of Alberto Cruz, Jr.; and
4) P50,000.00 as moral damages
Petitioner contends that the CA erred in awarding an amount for the
loss of earning capacity of Alberto Cruz, Jr. It claims that the
certification from the employer of the deceased stating that when he
was still alive - he earned P6,000.00 per month was not presented and
identified in open court.
In that aspect, petitioner is correct. The records are bereft that such
certification was presented and identified during the trial. It bears
stressing that compensation for lost income is in the nature of
damages and as such requires due proof of the damages suffered;
there must be unbiased proof of the deceased's average income. 29
Therefore, applying the above disquisitions, the heirs of Alberto Cruz,
Jr. shall now be awarded the following:
1) P12,500.00 as actual damages;
2) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and
3) P25,000.00 as moral damages.
In the same manner, petitioner is also partly responsible for the injuries
sustained by respondent Virginia Muoz hence, of the P16,744.00
actual damages and P30,000.00 moral damages awarded by the CA,
petitioner is liable for half of those amounts. Anent respondent Edgar
Hernandez, due to his contributory negligence, he is only entitled to
receive half the amount (P40,200.00) awarded by the CA as actual
damages which is P20,100.00.
As to the award of attorney's fees, it is settled that the award of
attorney's fees is the exception rather than the general rule; counsel's
fees are not awarded every time a party prevails in a suit because of
the policy that no premium should be placed on the right to litigate.
Attorney's fees, as part of damages, are not necessarily equated to the
amount paid by a litigant to a lawyer. In the ordinary sense, attorney's
fees represent the reasonable compensation paid to a lawyer by his
client for the legal services he has rendered to the latter; while in its
extraordinary concept, they may be awarded by the court as indemnity
for damages to be paid by the losing party to the prevailing party.
Attorney's fees as part of damages are awarded only in the instances
specified in Article 220830 of the Civil Code. As such, it is necessary for
the court to make findings of fact and law that would bring the case
within the ambit of these enumerated instances to justify the grant of
such award, and in all cases it must be reasonable. 31 In this case, the
RTC, in awarding attorney's fees, reasoned out that [w]hile there is no
document submitted to prove that the plaintiffs spent attorney's fees, it
is clear that they paid their lawyer in the prosecution of this case for
which they are entitled to the same.32 Such reason is conjectural and
does not justify the grant of the award, thus, the attorney's fees should
be deleted. However, petitioner shall still have to settle half of the cost
of the suit.
WHEREFORE, the Petition for Review on Certiorari under Rule 45,
dated December 28, 2011, of petitioner Travel & Tours Advisers, Inc. is
DENIED. However, the Decision dated May 16, 2011 of the Court of
Appeals is MODIFIED as follows:
The petitioner and Edgar Calaycay are ORDERED to jointly and
severally PAY the following:
1. To respondent Alberto Cruz, Sr. and family:
a) P12,500.00 as actual damages;
b) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and
c) P25,000.00 as moral damages.
2. To respondent Virginia Muoz:
a) P8,372.00 as actual damages;
b) P15,000.00 as moral damages.
3. To respondent Edgar Hernandez:
a) P20,100.00 as actual damages, and
4. The sum of P2,235.00 as cost of litigation.
Respondent Edgar Hernandez is also ORDERED to PAY the following:
1. To respondent Alberto Cruz, Sr. and family:
a) P12,500.00 as actual damages;
b) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and
c) P25,000.00 as moral damages.
2. To respondent Virginia Muoz:
a) P8,372.00 as actual damages;
b) P15,000.00 as moral damages, and
3. The sum of P2,235.00 as cost of litigation.
SO ORDERED.
CARIAGA, ET AL. v. LAGUNA TAYABAS
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-11037 December 29, 1960
EDGARDO CARIAGA, ET AL., plaintiffs-appellants,
vs.
LAGUNA TAYABAS BUS COMPANY, defendant-appellant.
MANILA RAILROAD COMPANY, defendant-appellee.
Ozaeta, Lichauco and Picazo for defendant and appellant.
E.A. Fernandez and L.H. Fernandez for plaintiffs and appellants.
Gov't. Corp. Counsel A. Padilla and Atty. F.A. Umali for appellee.
DIZON, J.:
At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna
Tayabas Bus Co. hereinafter referred to as the LTB driven by
Alfredo Moncada, left its station at Azcarraga St., Manila, for Lilio,
Laguna, with Edgardo Cariaga, a fourth-year medical student of the
University of Santo Tomas, as one of its passengers. At about 3:00
p.m., as the bus reached that part of the poblacion of Bay, Laguna,
where the national highway crossed a railroad track, it bumped against
the engine of a train then passing by with such terrific force that the
first six wheels of the latter were derailed, the engine and the front part
of the body of the bus was wrecked, the driver of the bus died instantly,
while many of its passengers, Edgardo among them, were severely
injured. Edgardo was first confined at the San Pablo City Hospital from
5:00 p.m., June 18, 1952, to 8:25 a.m., June 20 of the same year when
he was taken to the De los Santos Clinic, Quezon City. He left that
clinic on October 14 to be transferred to the University of Santo Tomas
Hospital where he stayed up to November 15. On this last date he was
taken back to the De los Santos Clinic where he stayed until January
15, 1953. He was unconscious during the first 35 days after the
accident; at the De los Santos Clinic Dr. Gustilo removed the fractured
bones which lacerated the right frontal lobe of his brain and at the
University of Santo Tomas Hospital Dr. Gustilo performed another
operation to cover a big hole on the right frontal part of the head with a
tantalum plate.
The LTB paid the sum of P16,964.45 for all the hospital, medical and
miscellaneous expenses incurred from June 18, 1952 to April, 1953.
From January 15, 1953 up to April of the same year Edgardo stayed in
a private house in Quezon, City, the LTB having agreed to give him a
subsistence allowance of P10.00 daily during his convalescence,
having spent in this connection the total sum of P775.30 in addition to
the amount already referred to.
On April 24, 1953 the present action was filed to recover for Edgardo
Cariaga, from the LTB and the MRR Co., and total sum of P312,000.00
as actual, compensatory, moral and exemplary damages, and for his
parents, the sum of P18,00.00 in the same concepts. The LTB
disclaimed liability claiming that the accident was due to the negligence
of its co-defendant, the Manila Railroad Company, for not providing a
crossing bar at the point where the national highway crossed the
railway track, and for this reason filed the corresponding cross-claim
against the latter company to recover the total sum of P18,194.75
representing the expenses paid to Edgardo Cariaga. The Manila
Railroad Company, in turn, denied liability upon the complaint and
cross-claim alleging that it was the reckless negligence of the bus
driver that caused the accident.
The lower court held that it was the negligence of the bus driver that
caused the accident and, as a result, rendered judgment sentencing
the LTB to pay Edgardo Cariaga the sum of P10,490.00 as
compensatory damages, with interest at the legal rate from the filing of
the complaint, and dismissing the cross-claim against the Manila
Railroad Company. From this decision the Cariagas and the LTB
appealed.
The Cariagas claim that the trial court erred: in awarding only
P10,490.00 as compensatory damages to Edgardo; in not awarding
them actual and moral damages, and in not sentencing appellant LTB
to pay attorney's fees.
On the other hand, the LTB's principal contention in this appeal is that
the trial court should have held that the collision was due to the fault of
both the locomotive driver and the bus driver and erred, as a
consequence, in not holding the Manila Railroad Company liable upon
the cross-claim filed against it.
We shall first dispose of the appeal of the bus company. Its first
contention is that the driver of the train locomotive, like the bus driver,
violated the law, first, in sounding the whistle only when the collision
was about to take place instead of at a distance at least 300 meters
from the crossing, and second, in not ringing the locomotive bell at all.
Both contentions are without merits.
After considering the evidence presented by both parties the lower
court expressly found:
. . . While the train was approximately 300 meters from the crossing,
the engineer sounded two long and two short whistles and upon
reaching a point about 100 meters from the highway, he sounded a
long whistle which lasted up to the time the train was about to cross it.
The bus proceeded on its way without slackening its speed and it
bumped against the train engine, causing the first six wheels of the
latter to be derailed.
xxx xxx xxx
. . . that the train whistle had been sounded several times before it
reached the crossing. All witnesses for the plaintiffs and the defendants
are uniform in stating that they heard the train whistle sometime before
the impact and considering that some of them were in the bus at the
time, the driver thereof must have heard it because he was seated on
the left front part of the bus and it was his duty and concern to observe
such fact in connection with the safe operation of the vehicle. The
other L.T.B. bus which arrived ahead at the crossing, heeded the
warning by stopping and allowing the train to pass and so nothing
happened to said vehicle. On the other hand, the driver of the bus No.
133 totally ignored the whistle and noise produced by the approaching
train and instead he tried to make the bus pass the crossing before the
train by not stopping a few meters from the railway track and in
proceeding ahead.
The above findings of the lower court are predicated mainly upon the
testimony of Gregorio Ilusondo, a witness for the Manila Railroad
Company. Notwithstanding the efforts exerted by the LTB to assail his
credibility, we do not find in the record any fact or circumstance
sufficient to discredit his testimony. We have, therefore, no other
alternative but to accept the findings of the trial court to the effect,
firstly, that the whistle of locomotive was sounded four times two
long and two short "as the train was approximately 300 meters from
the crossing"; secondly, that another LTB bus which arrived at the
crossing ahead of the one where Edgardo Cariaga was a passenger,
paid heed to the warning and stopped before the "crossing", while
as the LTB itself now admits (Brief p. 5) the driver of the bus in
question totally disregarded the warning.
But to charge the MRR Co. with contributory negligence, the LTB
claims that the engineer of the locomotive failed to ring the bell
altogether, in violation of the section 91 of Article 1459, incorporated in
the charter of the said MRR Co. This contention as is obvious is
the very foundation of the cross-claim interposed by the LTB against its
co-defendant. The former, therefore, had the burden of proving it
affirmatively because a violation of law is never presumed. The record
discloses that this burden has not been satisfactorily discharged.
The Cariagas, as appellants, claim that the award of P10,000.00
compensatory damages to Eduardo is inadequate considering the
nature and the after effects of the physical injuries suffered by him.
After a careful consideration of the evidence on this point we find their
contentions to be well-founded.
From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears
that, as a result of the injuries suffered by Edgardo, his right forehead
was fractured necessitating the removal of practically all of the right
frontal lobe of his brain. From the testimony of Dr. Jose A. Fernandez,
a psychiatrist, it may be gathered that, because of the physical injuries
suffered by Edgardo, his mentality has been so reduced that he can no
longer finish his studies as a medical student; that he has become
completely misfit for any kind of work; that he can hardly walk around
without someone helping him, and has to use a brace on his left leg
and feet.
Upon the whole evidence on the matter, the lower court found that the
removal of the right frontal lobe of the brain of Edgardo reduced his
intelligence by about 50%; that due to the replacement of the right
frontal bone of his head with a tantalum plate Edgardo has to lead a
quite and retired life because "if the tantalum plate is pressed in or
dented it would cause his death."
The impression one gathers from this evidence is that, as a result of
the physical injuries suffered by Edgardo Cariaga, he is now in a
helpless condition, virtually an invalid, both physically and mentally.
Appellant LTB admits that under Art. 2201 of the Civil Code the
damages for which the obligor, guilty of a breach of contract but who
acted in good faith, is liable shall be those that are the natural and
probable consequences of the breach and which the parties had
forseen or could have reasonably forseen at the time the obligation
was constituted, provided such damages, according to Art. 2199 of the
same Code, have been duly proved. Upon this premise it claims that
only the actual damages suffered by Edgardo Cariaga consisting of
medical, hospital and other expenses in the total sum of P17,719.75
are within this category. We are of the opinion, however, that the
income which Edgardo Cariaga could earn if he should finish the
medical course and pass the corresponding board examinations must
be deemed to be within the same category because they could have
reasonably been foreseen by the parties at the time he boarded the
bus No. 133 owned and operated by the LTB. At that time he was
already a fourth-year student in medicine in a reputable university.
While his scholastic may not be first rate (Exhibits 4, 4-A to 4-C), it is,
nevertheless, sufficient to justify the assumption that he could have
passed the board test in due time. As regards the income that he could
possibly earn as a medical practitioner, it appears that, according to Dr.
Amado Doria, a witness for the LTB, the amount of P300.00 could
easily be expected as the minimum monthly income of Edgardo had he
finished his studies.
Upon consideration of all the facts mentioned heretofore this Court is
of the opinion, and so holds, that the compensatory damages awarded
to Edgardo Cariaga should be increased to P25,000.00.
Edgardo Cariaga's claim for moral damages and attorney's fees was
denied by the trial court, the pertinent portion of its decision reading as
follows:
Plaintiffs' claim for moral damages cannot also be granted. Article 2219
of the Civil Code enumerates the instances when moral damages may
be covered and the case under consideration does not fall under any
one of them. The present action cannot come under paragraph 2 of
said article because it is not one of the quasi-delict and cannot be
considered as such because of the pre-existing contractual relation
between the Laguna Tayabas Bus Company and Edgardo Cariaga.
Neither could defendant Laguna Tayabas Bus Company be held liable
to pay moral damages to Edgardo Cariaga under Article 2220 of the
Civil Code on account of breach of its contract of carriage because
said defendant did not act fraudulently or in bad faith in connection
therewith. Defendant Laguna Tayabas Bus Company had exercised
due diligence in the selection and supervision of its employees like the
drivers of its buses in connection with the discharge of their duties and
so it must be considered an obligor in good faith.
The plaintiff Edgardo Cariaga is also not entitled to recover for
attorney's fees, because this case does not fall under any of the
instances enumerated in Article 2208 of the Civil Code.
We agree with the trial court and, to the reason given above, we add
those given by this Court in Cachero vs. Manila Yellow Taxicab Co.,
Inc.(101 Phil., 523, 530, 533):
A mere perusal of plaintiff's complaint will show that this action against
the defendant is predicated on an alleged breach of contract of
carriage, i.e., the failure of the defendants to bring him "safely and
without mishaps" to his destination, and it is to be noted that the
chauffeur of defendant's taxicab that plaintiff used when he received
the injuries involved herein, Gregorio Mira, has not even made a party
defendant to this case.
Considering, therefore, the nature of plaintiff's action in this case, is he
entitled to compensation for moral damages? Article 2219 of the Civil
Code says the following:
Art. 2219. Moral damages may be recovered in the following and
analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32,
34, and 35.
xxx xxx xxx
Of course enumerated in the just quoted Article 2219 only the first two
may have any bearing on the case at bar. We find, however, with
regard to the first that the defendant herein has not committed in
connection with this case any "criminal offense resulting in physical
injuries". The one that committed the offense against the plaintiff is
Gregorio Mira, and that is why he has been already prosecuted and
punished therefor. Altho (a) owners and managers of an establishment
and enterprise are responsible for damages caused by their
employees in the service of the branches in which the latter are
employed or on the occasion of their functions; (b) employers are
likewise liable for damages caused by their employees and household
helpers acting within the scope of their assigned task (Article 218 of
the Civil Code); and (c) employers and corporations engaged in any
kind of industry are subsidiary civilly liable for felonies committed by
their employees in the discharge of their duties (Art. 103, Revised
Penal Code), plaintiff herein does not maintain this action under the
provisions of any of the articles of the codes just mentioned and
against all the persons who might be liable for the damages caused,
but as a result of an admitted breach of contract of carriage and
against the defendant employer alone. We, therefore, hold that the
case at bar does not come within the exception of paragraph 1, Article
2219 of the Civil Code.
The present complaint is not based either on a "quasi-delict causing
physical injuries" (Art. 2219, par. 2 of the Civil Code). From the report
of the Code Commission on the new Civil Code. We copy the
following:
A question of nomenclature confronted the Commission. After a careful
deliberation, it was agreed to use the term "quasi-delict" for those
obligations which do not arise from law, contracts, quasi-contracts, or
criminal offenses. They are known in Spanish legal treaties as "culpa
aquiliana", "culpa-extra-contractual" or "cuasi-delitos". The phrase
"culpa-extra-contractual" or its translation "extra-contractual-fault" was
eliminated because it did not exclude quasi-contractual or penal
obligations. "Aquilian fault" might have been selected, but it was
thought inadvisable to refer to so ancient a law as the "Lex Aquilia". So
"quasi-delict" was chosen, which more nearly corresponds to the
Roman Law classification of the obligations and is in harmony with the
nature of this kind of liability.
The Commission also thought of the possibility of adopting the word
"tort" from Anglo-American law. But "tort" under that system is much
broader than the Spanish-Philippine concept of obligations arising from
non-contractual negligence. "Tort" in Anglo-American jurisprudence
includes not only negligence, but also intentional criminal act, such as
assault and battery, false imprisonment and deceit. In the general plan
of the Philippine legal system, intentional and malicious acts are
governed by the Penal Code, although certain exceptions are made in
the Project. (Report of the Code Commission, pp. 161-162).
In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We
established the distinction between obligation derived from negligence
and obligation as a result of a breach of contract. Thus, we said:
It is important to note that the foundation of the legal liability of the
defendant is the contract of carriage, and that the obligation to respond
for the damage which plaintiff has suffered arises, if at all, from the
breach of that contract by reason of the failure of defendant to exercise
due care in its performance. That is to say, its liability is direct and
immediate, differing essentially in the legal viewpoint from the
presumptive responsibility for the negligence of its servants, imposed
by Article 1903 of the Civil Code (Art. 2180 of the new), which can be
rebutted by proof of the exercise of due care in their selection of
supervision. Article 1903 is not applicable to obligations arising EX
CONTRACTU, but only to extra-contractual obligations or to use the
technical form of expression, that article relates only to CULPA
AQUILIANA' and not to CULPA CONTRACTUAL.lawphil.net
The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil.,
359; 46 Off. Gaz., No. 5, p. 2023); Lilius, et al. vs. Manila Railroad, 59
Phil., 758) and others, wherein moral damages were awarded to the
plaintiffs, are not applicable to the case at bar because said decision
were rendered before the effectivity of the new Civil Code (August 30,
1950) and for the further reason that the complaints filed therein were
based on different causes of action.
In view of the foregoing the sum of P2,000 was awarded as moral
damages by the trial court has to be eliminated, for under the law it is
not a compensation awardable in a case like the one at bar.
What has been said heretofore relative to the moral damages claimed
by Edgardo Cariaga obviously applies with greater force to a similar
claim (4th assignment of error) made by his parents.
The claim made by said spouses for actual and compensatory
damages is likewise without merits. As held by the trial court, in so far
as the LTB is concerned, the present action is based upon a breach of
contract of carriage to which said spouses were not a party, and
neither can they premise their claim upon the negligence or quasi-
delict of the LTB for the simple reason that they were not themselves
injured as a result of the collision between the LTB bus and train
owned by the Manila Railroad Company.
Wherefore, modified as above indicated, the appealed judgement is
hereby affirmed in all other respects, with costs against appellant LTB.
LIGHT RAIL v. NAVIDAD
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 145804 February 6, 2003
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN,
petitioners,
vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD &
PRUDENT SECURITY AGENCY, respondents.
DECISION
VITUG, J.:
The case before the Court is an appeal from the decision and
resolution of the Court of Appeals, promulgated on 27 April 2000 and
10 October 2000, respectively, in CA-G.R. CV No. 60720, entitled
"Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo
Roman, et. al.," which has modified the decision of 11 August 1998 of
the Regional Trial Court, Branch 266, Pasig City, exonerating Prudent
Security Agency (Prudent) from liability and finding Light Rail Transit
Authority (LRTA) and Rodolfo Roman liable for damages on account of
the death of Nicanor Navidad.
On 14 October 1993, about half an hour past seven oclock in the
evening, Nicanor Navidad, then drunk, entered the EDSA LRT station
after purchasing a "token" (representing payment of the fare). While
Navidad was standing on the platform near the LRT tracks, Junelito
Escartin, the security guard assigned to the area approached Navidad.
A misunderstanding or an altercation between the two apparently
ensued that led to a fist fight. No evidence, however, was adduced to
indicate how the fight started or who, between the two, delivered the
first blow or how Navidad later fell on the LRT tracks. At the exact
moment that Navidad fell, an LRT train, operated by petitioner Rodolfo
Roman, was coming in. Navidad was struck by the moving train, and
he was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent
Marjorie Navidad, along with her children, filed a complaint for
damages against Junelito Escartin, Rodolfo Roman, the LRTA, the
Metro Transit Organization, Inc. (Metro Transit), and Prudent for the
death of her husband. LRTA and Roman filed a counterclaim against
Navidad and a cross-claim against Escartin and Prudent. Prudent, in
its answer, denied liability and averred that it had exercised due
diligence in the selection and supervision of its security guards.
The LRTA and Roman presented their evidence while Prudent and
Escartin, instead of presenting evidence, filed a demurrer contending
that Navidad had failed to prove that Escartin was negligent in his
assigned task. On 11 August 1998, the trial court rendered its decision;
it adjudged:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs
and against the defendants Prudent Security and Junelito Escartin
ordering the latter to pay jointly and severally the plaintiffs the
following:
"a) 1) Actual damages of P44,830.00;
2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of
P50,000.00;
"b) Moral damages of P50,000.00;
"c) Attorneys fees of P20,000;
"d) Costs of suit.
"The complaint against defendants LRTA and Rodolfo Roman are
dismissed for lack of merit.
"The compulsory counterclaim of LRTA and Roman are likewise
dismissed."1
Prudent appealed to the Court of Appeals. On 27 August 2000, the
appellate court promulgated its now assailed decision exonerating
Prudent from any liability for the death of Nicanor Navidad and,
instead, holding the LRTA and Roman jointly and severally liable
thusly:
"WHEREFORE, the assailed judgment is hereby MODIFIED, by
exonerating the appellants from any liability for the death of Nicanor
Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail
Transit Authority (LRTA) are held liable for his death and are hereby
directed to pay jointly and severally to the plaintiffs-appellees, the
following amounts:
a) P44,830.00 as actual damages;
b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the deceased; and
2
e) P20,000.00 as and for attorneys fees."
The appellate court ratiocinated that while the deceased might not
have then as yet boarded the train, a contract of carriage theretofore
had already existed when the victim entered the place where
passengers were supposed to be after paying the fare and getting the
corresponding token therefor. In exempting Prudent from liability, the
court stressed that there was nothing to link the security agency to the
death of Navidad. It said that Navidad failed to show that Escartin
inflicted fist blows upon the victim and the evidence merely established
the fact of death of Navidad by reason of his having been hit by the
train owned and managed by the LRTA and operated at the time by
Roman. The appellate court faulted petitioners for their failure to
present expert evidence to establish the fact that the application of
emergency brakes could not have stopped the train.
The appellate court denied petitioners motion for reconsideration in its
resolution of 10 October 2000.
In their present recourse, petitioners recite alleged errors on the part of
the appellate court; viz:
"I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY
DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT
"II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT PETITIONERS ARE LIABLE FOR THE DEATH OF
NICANOR NAVIDAD, JR.
"III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT RODOLFO ROMAN IS AN EMPLOYEE OF LRTA."3
Petitioners would contend that the appellate court ignored the evidence
and the factual findings of the trial court by holding them liable on the
basis of a sweeping conclusion that the presumption of negligence on
the part of a common carrier was not overcome. Petitioners would
insist that Escartins assault upon Navidad, which caused the latter to
fall on the tracks, was an act of a stranger that could not have been
foreseen or prevented. The LRTA would add that the appellate courts
conclusion on the existence of an employer-employee relationship
between Roman and LRTA lacked basis because Roman himself had
testified being an employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court,
contended that a contract of carriage was deemed created from the
moment Navidad paid the fare at the LRT station and entered the
premises of the latter, entitling Navidad to all the rights and protection
under a contractual relation, and that the appellate court had correctly
held LRTA and Roman liable for the death of Navidad in failing to
exercise extraordinary diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from the
nature of its business and for reasons of public policy, is burdened with
the duty of exercising utmost diligence in ensuring the safety of
passengers.4 The Civil Code, governing the liability of a common
carrier for death of or injury to its passengers, provides:
"Article 1755. A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the
circumstances.
"Article 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755."
"Article 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the formers
employees, although such employees may have acted beyond the
scope of their authority or in violation of the orders of the common
carriers.
"This liability of the common carriers does not cease upon proof that
they exercised all the diligence of a good father of a family in the
selection and supervision of their employees."
"Article 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the willful acts or negligence of other
passengers or of strangers, if the common carriers employees through
the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission."
The law requires common carriers to carry passengers safely using the
utmost diligence of very cautious persons with due regard for all
circumstances.5 Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for
so long as the passengers are within its premises and where they
ought to be in pursuance to the contract of carriage. 6 The statutory
provisions render a common carrier liable for death of or injury to
passengers (a) through the negligence or wilful acts of its employees
or b) on account of wilful acts or negligence of other passengers or of
strangers if the common carriers employees through the exercise of
due diligence could have prevented or stopped the act or omission. 7 In
case of such death or injury, a carrier is presumed to have been at fault
or been negligent, and8 by simple proof of injury, the passenger is
relieved of the duty to still establish the fault or negligence of the
carrier or of its employees and the burden shifts upon the carrier to
prove that the injury is due to an unforeseen event or to force
majeure.9 In the absence of satisfactory explanation by the carrier on
how the accident occurred, which petitioners, according to the
appellate court, have failed to show, the presumption would be that it
has been at fault,10 an exception from the general rule that negligence
must be proved.11
The foundation of LRTAs liability is the contract of carriage and its
obligation to indemnify the victim arises from the breach of that
contract by reason of its failure to exercise the high diligence required
of the common carrier. In the discharge of its commitment to ensure
the safety of passengers, a carrier may choose to hire its own
employees or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the common
carrier is not relieved of its responsibilities under the contract of
carriage.
Should Prudent be made likewise liable? If at all, that liability could
only be for tort under the provisions of Article 2176 12 and related
provisions, in conjunction with Article 2180, 13 of the Civil Code. The
premise, however, for the employers liability is negligence or fault on
the part of the employee. Once such fault is established, the employer
can then be made liable on the basis of the presumption juris tantum
that the employer failed to exercise diligentissimi patris families in the
selection and supervision of its employees. The liability is primary and
can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been shown.
Absent such a showing, one might ask further, how then must the
liability of the common carrier, on the one hand, and an independent
contractor, on the other hand, be described? It would be solidary. A
contractual obligation can be breached by tort and when the same act
or omission causes the injury, one resulting in culpa contractual and
the other in culpa aquiliana, Article 2194 14 of the Civil Code can well
apply.15 In fine, a liability for tort may arise even under a contract,
where tort is that which breaches the contract. 16 Stated differently,
when an act which constitutes a breach of contract would have itself
constituted the source of a quasi-delictual liability had no contract
existed between the parties, the contract can be said to have been
breached by tort, thereby allowing the rules on tort to apply.17
Regrettably for LRT, as well as perhaps the surviving spouse and heirs
of the late Nicanor Navidad, this Court is concluded by the factual
finding of the Court of Appeals that "there is nothing to link (Prudent) to
the death of Nicanor (Navidad), for the reason that the negligence of its
employee, Escartin, has not been duly proven x x x." This finding of the
appellate court is not without substantial justification in our own review
of the records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman
himself is guilty of any culpable act or omission, he must also be
absolved from liability. Needless to say, the contractual tie between the
LRT and Navidad is not itself a juridical relation between the latter and
Roman; thus, Roman can be made liable only for his own fault or
negligence.
The award of nominal damages in addition to actual damages is
untenable. Nominal damages are adjudicated in order that a right of
the plaintiff, which has been violated or invaded by the defendant, may
be vindicated or recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him.18 It is an established rule that
nominal damages cannot co-exist with compensatory damages.19
WHEREFORE, the assailed decision of the appellate court is
AFFIRMED with MODIFICATION but only in that (a) the award of
nominal damages is DELETED and (b) petitioner Rodolfo Roman is
absolved from liability. No costs.
SO ORDERED.
PHILTRANCO v. CA
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 120553 June 17, 1997
PHILTRANCO SERVICE ENTERPRISES, INC. and ROGACIONES
MANILHIG, petitioner,
vs.
COURT OF APPEALS and HEIRS OF THE LATE RAMON
ACUESTA, respondents.
DAVIDE, JR., J.:
The petitioners interposed this appeal by way of a petition for review
under Rule 45 of the Rules of Court from the 31 January 1995
Decision of the Court of Appeals in CA-G.R. CV No. 41140 1 affirming
the 22 January 1993 2 Decision of Branch 31 of the Regional Trial
Court, Calbayog City, in Civil Case No. 373, which ordered the
petitioners to pay the private respondents damages as a result of a
vehicular accident.
Civil Case No. 373 was an action against herein petitioners for
damages instituted by the heirs of Ramon A. Acuesta, namely,
Gregorio O. Acuesta; Julio O. Acuesta; Ramon O. Acuesta, Jr.;
Baltazar O. Acuesta; Rufino O. Acuesta; Maximo O. Acuesta; Neri O.
Acuesta; Iluminada O. Acuesta; Rosario Acuesta-Sanz; and Pamfilo O.
Acuesta. Atty. Julio O. Acuesta also appeared as counsel for the
plaintiffs (herein private respondents). 3 The private respondents
alleged that the petitioners were guilty of gross negligence,
recklessness, violation of traffic rules and regulations, abandonment of
victim, and attempt to escape from a crime.
To support their allegations, the private respondents presented eight
witnesses. On 10 February 1992, after the cross-examination of the
last witness, the private respondents' counsel made a reservation to
present a ninth witness. The case was then set for continuation of the
trial on 30 and 31 March 1992. Because of the non-appearance of the
petitioners' counsel, the 30 March 1992 hearing was cancelled. The
next day, private respondents' counsel manifested that he would no
longer present the ninth witness. He thereafter made an oral offer of
evidence and rested the case. The trial court summarized private
respondents' evidence in this wise:
[I]n the early morning of March 24, 1990, about 6:00 o'clock, the victim
Ramon A. Acuesta was riding in his easy rider bicycle (Exhibit "O"),
along the Gomez Street of Calbayog City. The Gomez Street is along
the side of Nijaga Park. On the Magsaysay Blvd., also in Calbayog
City, defendant Philtranco Service Enterprises, Inc. (Philtranco for
brevity) Bus No. 4025 with plate No. EVA-725 driven by defendant
Rogasiones Manilhig y Dolira was being pushed by some persons in
order to start its engine. The Magsaysay Blvd. runs perpendicular to
Gomez St. and the said Philtranco bus 4025 was heading in the
general direction of the said Gomez Street. Some of the persons who
were pushing the bus were on its back, while the others were on the
sides. As the bus was pushed, its engine started thereby the bus
continued on its running motion and it occurred at the time when
Ramon A. Acuesta who was still riding on his bicycle was directly in
front of the said bus. As the engine of the Philtranco bus started
abruptly and suddenly, its running motion was also enhanced by the
said functioning engine, thereby the subject bus bumped on the victim
Ramon A. Acuesta who, as a result thereof fell and, thereafter, was run
over by the said bus. The bus did not stop although it had already
bumped and ran [sic] over the victim; instead, it proceeded running
towards the direction of the Rosales Bridge which is located at one
side of the Nijaga Park and towards one end of the Gomez St., to
which direction the victim was then heading when he was riding on his
bicycle. P/Sgt. Yabao who was then jogging thru the Gomez Street and
was heading and meeting the victim Ramon A. Acuesta as the latter
was riding on his bicycle, saw when the Philtranco bus was being
pushed by some passengers, when its engine abruptly started and
when the said bus bumped and ran over the victim. He approached the
bus driver defendant Manilhig herein and signalled to him to stop, but
the latter did not listen. So the police officer jumped into the bus and
introducing himself to the driver defendant as policeman, ordered the
latter to stop. The said defendant driver stopped the Philtranco bus
near the Nijaga Park and Sgt. Yabao thereafter, told the driver to
proceed to the Police Headquarter which was only 100 meters away
from Nijaga Park because he was apprehensive that the said driver
might be harmed by the relatives of the victim who might come to the
scene of the accident. Then Sgt. Yabao cordoned the scene where the
vehicular accident occurred and had P/Cpl. Bartolome Bagot, the
Traffic Investigator, conduct an investigation and make a sketch of the
crime scene. Sgt. Yambao Yabao was only about 20 meters away
when he saw the bus of defendant Philtranco bumped [sic] and [sic]
ran over the victim. From the place where the victim was actually
bumped by the bus, the said vehicle still had run to a distance of about
15 meters away. 4
For their part, the petitioners filed an Answer 5 wherein they alleged
that petitioner Philtranco exercised the diligence of a good father of a
family in the selection and supervision of its employees, including
petitioner Manilhig who had excellent record as a driver and had
undergone months of rigid training before he was hired. Petitioner
Manilhig had always been a prudent professional driver, religiously
observing traffic rules and regulations. In driving Philtranco's buses, he
exercised the diligence of a very cautious person.
As might be expected, the petitioners had a different version of the
incident. They alleged that in the morning of 24 March 1990, Manilhig,
in preparation for his trip back to Pasay City, warmed up the engine of
the bus and made a few rounds within the city proper of Calbayog.
While the bus was slowly and moderately cruising along Gomez Street,
the victim, who was biking towards the same direction as the bus,
suddenly overtook two tricycles and swerved left to the center of the
road. The swerving was abrupt and so sudden that even as Manilhig
applied the brakes and blew the bus horn, the victim was bumped from
behind and run over by the bus. It was neither willful nor deliberate on
Manilhig's part to proceed with the trip after his bus bumped the victim,
the truth being that when he looked at his rear-view window, he saw
people crowding around the victim, with others running after his bus.
Fearing that he might be mobbed, he moved away from the scene of
the accident and intended to report the incident to the police. After a
man boarded his bus and introduced himself as a policeman, Manilhig
gave himself up to the custody of the police and reported the accident
in question.
The petitioners further claimed that it was the negligence of the victim
in overtaking two tricycles, without taking precautions such as seeing
first that the road was clear, which caused the death of the victim. The
latter did not even give any signal of his intention to overtake. The
petitioners then counterclaimed for P50,000 as and for attorney's fees;
P1 million as moral damages; and P50,000 for litigation expenses.
However, the petitioners were not able to present their evidence, as
they were deemed to have waived that right by the failure of their
counsel to appear at the scheduled hearings on 30 and 31 March
1992. The trial court then issued an Order 6 declaring the case
submitted for decision. Motions for the reconsideration of the said
Order were both denied.
On 22 January 1992, the trial court handed down a decision ordering
the petitioners to jointly and severally pay the private respondents the
following amounts:
1) P55, 615.72 as actual damages;
2) P200,000 as death indemnity for the death of the victim Ramon A.
Acuesta;
3) P1 million as moral damages;
4) P500,000 by way of exemplary damages;
5) P50,000 as attorney's fees; and
6) the costs of suit. 7
Unsatisfied with the judgment, the petitioners appealed to the Court of
Appeals imputing upon the trial court the following errors:
(1) in preventing or barring them from presenting their evidence;
(2) in finding that petitioner Manilhig was at fault;
(3) in not finding that Ramon was the one at fault and his own fault
caused, or at least contributed to, his unfortunate accident;
(4) in awarding damages to the private respondents; and
(5) in finding that petitioner Philtranco was solidarily liable with Manilhig
for damages. 8
In its decision of 31 January 1995, the Court of Appeals affirmed the
decision of the trial court. It held that the petitioners were not denied
due process, as they were given an opportunity to present their
defense. The records show that they were notified of the assignment of
the case for 30 and 31 March 1992. Yet, their counsel did not appear
on the said dates. Neither did he file a motion for postponement of the
hearings, nor did he appeal from the denial of the motions for
reconsideration of the 31 March 1992 Order of the trial court. The
petitioners have thereby waived their right to present evidence. Their
expectation that they would have to object yet to a formal offer of
evidence by the private respondents was "misplaced," for it was within
the sound discretion of the court to allow oral offer of evidence.
As to the second and third assigned errors, the respondent court
disposed as follows:
. . . We cannot help but accord with the lower court's finding on
appellant Manilhig's fault. First, it is not disputed that the bus driven by
appellant Manilhig was being pushed at the time of the unfortunate
happening. It is of common knowledge and experience that when a
vehicle is pushed to a jump-start, its initial movement is far from slow.
Rather, its movement is abrupt and jerky and it takes a while before the
vehicle attains normal speed. The lower court had thus enough basis
to conclude, as it did, that the bumping of the victim was due to
appellant Manilhig's actionable negligence and inattention. Prudence
should have dictated against jump-starting the bus in a busy section of
the city. Militating further against appellants' posture was the fact that
the precarious pushing of subject bus to a jumpstart was done where
the bus had to take a left turn, thereby making the move too risky to
take. The possibility that pedestrians on Gomez Street, where the bus
turned left and the victim was biking, would be unaware of a vehicle
being pushed to a jumpstart, was too obvious to be overlooked. Verily,
contrary to their bare arguments, there was gross negligence on the
part of appellants.
The doctrine of last clear chance theorized upon by appellants, is
inapplicable under the premises because the victim, who was bumped
from behind, obviously, did not of course anticipate a Philtranco bus
being pushed from a perpendicular street.
The respondent court sustained the awards of moral and exemplary
damages and of attorney's fees, for they are warranted under Articles
2206, 2231, and 2208(1), respectively, of the Civil Code. Anent the
solidary liability of petitioner Philtranco, the same finds support in
Articles 2180 and 2194 of the said Code. The defense that Philtranco
exercised the diligence of a good father of a family in the selection and
supervision of its employees crumbles in the face of the gross
negligence of its driver, which caused the untimely death of the victim.
Their motion for reconsideration having been denied, the petitioners
came to us claiming that the Court of Appeals gravely erred
I whom one is responsible.
. . . IN HOLDING THAT PETITIONERS WAIVED THEIR RIGHT TO
PRESENT THEIR EVIDENCE, AND THAT PETITIONERS WERE NOT
DENIED DUE PROCESS.
II
. . . IN APPLYING ART. 2194, INSTEAD OF ART. 2180, OF THE CIVIL
CODE, AND IN HOLDING THAT PETITIONER PHILTRANCO CAN
NOT INVOKE THE DEFENSE OF DILIGENCE OF A GOOD FATHER
OF A FAMILY.
III
. . . IN AWARDING DAMAGES TO RESPONDENTS AND/OR IN NOT
FINDING THE TRIAL COURT'S AWARD OF DAMAGES EXCESSIVE.
We resolved to give due course to the petition and required the parties
to submit their respective memoranda after due consideration of the
allegations, issues, and arguments adduced in the petition, the
comment thereon by the private respondents, and the reply to the
comment filed by the petitioners. The petitioners filed their
memorandum in due time; while the private respondents filed theirs
only on 3 January 1997, after their counsel was fined in the amount of
P1,000 for failure to submit the required memorandum.
The first imputed error is without merit. The petitioners and their
counsel, Atty. Jose Buban, were duly notified in open court of the order
of the trial court of 10 February 1992 setting the case for hearing on 30
and 31 March 1992. 9 On both dates neither the petitioners nor their
counsel appeared. In his motion for reconsideration, 10 Atty. Buban
gave the following reasons for his failure to appear on the said
hearings:
1. That when this case was called on March 27, 1992, counsel was
very much indisposed due to the rigors of a very hectic campaign as
he is a candidate for City Councilor of Tacloban; he wanted to leave for
Calbayog City, but he was seized with slight fever on the morning of
said date; but then, during the last hearing, counsel was made to
understand that plaintiffs would formally offer their exhibits in writing,
for which reason, counsel for defendants waited for a copy of said
formal offer, but counsel did not receive any copy as counsel for
plaintiffs opted to formally offer their exhibits orally in open court;
2. That counsel for defendants, in good faith believed that he would be
given reasonable time within which to comment on the formal offer in
writing, only to know that counsel for plaintiffs orally offered their
exhibits in open court and that the same were admitted by the
Honorable Court; and that when this case was called on March 30 and
31, 1992, the undersigned counsel honestly believed that said
schedule would be cancelled, pending on the submission of the
comments made by the defendants on the formal offer; but it was not
so, as the exhibits were admitted in open court. 11
In its order of 26 May 1992, the trial court denied the motion, finding it
to be "devoid of meritorious basis," as Atty. Buban could have filed a
motion for postponement. 12 Atty. Buban then filed a motion to
reconsider 13 the order of denial, which was likewise denied by the trial
court in its order of 12 August 1992. 14 Nothing more was done by the
petitioners after receipt of the order of 12 August 1992. A perusal of the
first and second motions for reconsideration discloses absence of any
claim that the petitioners have meritorious defenses. Clearly, therefore,
the trial court committed no error in declaring the case submitted for
decision on the basis of private respondent's evidence.
The second imputed error is without merit either.
Civil Case No. 373 is an action for damages based on quasi-delict 15
under Article 2176 and 2180 of the Civil Code against petitioner
Manilhig and his employer, petitioner Philtranco, respectively. These
articles pertinently provide:
Art. 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
Art. 2180. The obligation imposed by Article 2176 is demandable not
only for one's own acts or omissions, but also for those of persons for
xxx xxx xxx
The owners and managers of an establishment or enterprise are
likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks
even though the former are not engaged in any business or industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the
persons herein mentioned prove that they observed all the diligence of
a good father of a family to prevent damage.
We have consistently held that the liability of the registered owner of a
public service vehicle, like petitioner Philtranco, 16 for damages arising
from the tortious acts of the driver is primary, direct, and joint and
several or solidary with the driver. 17 As to solidarity, Article 2194
expressly provides:
Art. 2194. The responsibility of two or more persons who are liable for
a quasi-delict is solidary.
Since the employer's liability is primary, direct and solidary, its only
recourse if the judgment for damages is satisfied by it is to recover
what it has paid from its employee who committed the fault or
negligence which gave rise to the action based on quasi-delict. Article
2181 of the Civil Code provides:
Art. 2181. Whoever pays for the damage caused by his dependents or
employees may recover from the latter what he has paid or delivered in
satisfaction of the claim.
There is, however, merit in the third imputed error.
The trial court erroneously fixed the "death indemnity" at P200,000.
The private respondents defended the award in their Opposition to the
Motion for Reconsideration by saying that "[i]n the case of Philippine
Airlines, Inc. vs. Court of Appeals, 185 SCRA 110, our Supreme Court
held that the award of damages for death is computed on the basis of
the life expectancy of the deceased." In that case, the "death
indemnity" was computed by multiplying the victim's gross annual
income by his life expectancy, less his yearly living expenses. Clearly
then, the "death indemnity" referred to was the additional indemnity for
the loss of earning capacity mentioned in Article 2206(1) of the Civil
Code, and not the basic indemnity for death mentioned in the first
paragraph thereof. This article provides as follows:
Art. 2206. The amount of damages for death caused by a crime or
quasi-delict shall be at least three thousand pesos, even though there
may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the latter;
such indemnity shall in every case be assessed and awarded by the
court, unless the deceased on account of permanent physical disability
not caused by the defendant, had no earning capacity at the time of his
death;
(2) If the deceased was obliged to give support according to the
provisions of article 291, the recipient who is not an heir called to the
decedent's inheritance by the law of testate or intestate succession,
may demand support from the person causing the death, for a period
of not exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.
We concur with petitioners' view that the trial court intended the award
of "P200,000.00 as death indemnity" not as compensation for loss of
earning capacity. Even if the trial court intended the award as
indemnity for loss of earning capacity, the same must be struck out for
lack of basis. There is no evidence on the victim's earning capacity and
life expectancy.
Only indemnity for death under the opening paragraph of Article 2206
is due, the amount of which has been fixed by current jurisprudence at
P50,000. 18
The award of P1 million for moral damages to the heirs of Ramon
Acuesta has no sufficient basis and is excessive and unreasonable.
This was based solely on the testimony of one of the heirs, Atty. Julio
Acuesta, contained in his "Direct Testimony . . . As Plaintiff, conducted
by Himself," 19 to wit:
Q. What was your feeling or reaction as a result of the death of your
father Ramon A. Acuesta?
A. We, the family members, have suffered much from wounded
feelings, moral shock, mental anguish, sleepless nights, to which we
are entitled to moral damages at the reasonable amount of ONE
MILLION (P1,000,000.00) PESOS or at the sound discretion of this
Hon. Court.
Since the other heirs of the deceased did not take the witness stand,
the trial court had no basis for its award of moral damages to those
who did not testify thereon.
Moral damages are emphatically not intended to enrich a plaintiff at the
expense of the defendant. They are awarded only to allow the former
to obtain means, diversion, or amusements that will serve to alleviate
the moral suffering he has undergone due to the defendant's culpable
action and must, perforce, be proportional to the suffering inflicted. 20 In
light of the circumstances in this case, an award of P50,000 for moral
damages is in order.
The award of P500,000 for exemplary damages is also excessive. In
quasi-delicts, exemplary damages may be awarded if the party at fault
acted with gross negligence. 21 The Court of Appeals found that there
was gross negligence on the part of petitioner Manilhig. 22 Under Article
2229 of the Civil Code, exemplary damages are imposed by way of
example or correction for the public good, in addition to the moral,
temperate, liquidated, or compensatory damages. Considering its
purpose, it must be fair and reasonable in every case and should not
be awarded to unjustly enrich a prevailing party. In the instant case, an
award of P50,000 for the purpose would be adequate, fair, and
reasonable.
Finally, the award of P50,000 for attorney's fees must be reduced. The
general rule is that attorney's fees cannot be recovered as part of
damages because of the policy that no premium should be placed on
the right to litigate. 23 Stated otherwise, the grant of attorney's fees as
part of damages is the exception rather than the rule, as counsel's fees
are not awarded every time a party prevails in a suit. 24 Such attorney's
fees can be awarded in the cases enumerated in Article 2208 of the
Civil Code, and in all cases it must be reasonable. In the instant case,
the counsel for the plaintiffs is himself a co-plaintiff; it is then unlikely
that he demanded from his brothers and sisters P100,000 as attorney's
fees as alleged in the complaint and testified to by him. 25 He did not
present any written contract for his fees. He is, however, entitled to a
reasonable amount for attorney's fees, considering that exemplary
damages are awarded. Among the instances mentioned in Article 2208
of the Civil Code when attorney's fees may be recovered is "(1) when
exemplary damages are awarded." Under the circumstances in this
case, an award of P25,000 for attorney's fees is reasonable.
The petitioners did not contest the award for actual damages fixed by
the trial court. Hence, such award shall stand.
IN VIEW OF THE FOREGOING, the petition is hereby partly granted
and the challenged decision of CA-G.R. CV No. 41140 is AFFIRMED,
subject to modifications as to the damages awarded, which are
reduced as follows:
(a) Death indemnity, from P200,000 to P50,000;
(b) Moral damages, from P1 million to P50,000;
(c) Exemplary damages, from P500,000 to P50,000; and
(d) Attorney's fees, from P50,000 to P25,000.
No pronouncements as to costs in this instance.
SO ORDERED.