[G.R. No. 179446. January 10, 2011.] LOADMASTERS CUSTOMS SERVICES, INC., petitioner, vs.

GLODEL BROKERAGE CORPORATION and R&B INSURANCE CORPORATION, respondents.

DECISION

MENDOZA, J p: This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the August 24, 2007 Decision 1 of the Court of Appeals (CA) in CA-G.R. CV No. 82822, entitled "R&B Insurance Corporation v. Glodel Brokerage Corporation and Loadmasters Customs Services, Inc.," which held petitioner Loadmasters Customs Services, Inc. (Loadmasters) liable to respondent Glodel Brokerage Corporation (Glodel) in the amount of P1,896,789.62 representing the insurance indemnity which R&B Insurance Corporation (R&B Insurance) paid to the insured-consignee, Columbia Wire and Cable Corporation (Columbia). THE FACTS: On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor of Columbia to insure the shipment of 132 bundles of electric copper cathodes against All Risks. On August 28, 2001, the cargoes were shipped on board the vessel "Richard Rey" from Isabela, Leyte, to Pier 10, North Harbor, Manila. They arrived on the same date. Columbia engaged the services of Glodel for the release and withdrawal of the cargoes from the pier and the subsequent delivery to its warehouses/plants. Glodel, in turn, engaged the services of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbia's warehouses/plants in Bulacan and Valenzuela City. The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by its employed drivers and accompanied by its employed truck helpers. Six (6) truckloads of copper cathodes were to be delivered to Balagtas, Bulacan, while the other six (6) truckloads were destined for Lawang Bato, Valenzuela City. The cargoes in six truckloads for Lawang Bato were duly delivered in Columbia's warehouses there. Of the six (6) trucks en route to Balagtas, Bulacan, however, only five (5) reached the destination. One (1) truck, loaded with 11 bundles or 232 pieces of copper cathodes, failed to deliver its cargo. Later on, the said truck, an Isuzu with Plate No. NSD-117, was recovered but without the copper cathodes. Because of this incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the amount of P1,903,335.39. After the requisite investigation and adjustment, R&B Insurance paid Columbia the amount of P1,896,789.62 as insurance indemnity. R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel before the Regional Trial Court, Branch 14, Manila (RTC), docketed as Civil Case No. 02-103040. It sought reimbursement of the amount it had paid to Columbia for the loss of the subject cargo. It claimed that it had been subrogated "to the right of the consignee to recover from the party/parties who may be held legally liable for the loss." 2 On November 19, 2003, the RTC rendered a decision 3 holding Glodel liable for damages for the loss of the subject cargo and dismissing Loadmasters' counterclaim for damages and attorney's fees against R&B Insurance. The dispositive portion of the decision reads: ECDHIc WHEREFORE, all premises considered, the plaintiff having established by preponderance of evidence its claims against defendant Glodel Brokerage Corporation, judgment is hereby rendered ordering the latter: 1.To pay plaintiff R&B Insurance Corporation the sum of P1,896,789.62 as actual and compensatory damages, with interest from the date of complaint until fully paid; 2.To pay plaintiff R&B Insurance Corporation the amount equivalent to 10% of the principal amount recovered as and for attorney's fees plus P1,500.00 per appearance in Court; 3.To pay plaintiff R&B Insurance Corporation the sum of P22,427.18 as litigation expenses. WHEREAS, the defendant Loadmasters Customs Services, Inc.'s counterclaim for damages and attorney's fees against plaintiff are hereby dismissed. With costs against defendant Glodel Brokerage Corporation. SO ORDERED. 4 Both R&B Insurance and Glodel appealed the RTC decision to the CA. On August 24, 2007, the CA rendered the assailed decision which reads in part: Considering that appellee is an agent of appellant Glodel, whatever liability the latter owes to appellant R&B Insurance Corporation as insurance indemnity must likewise be the amount it shall be paid by appellee Loadmasters.

WHEREFORE, the foregoing considered, the appeal is PARTLY GRANTED in that the appellee Loadmasters is likewise held liable to appellant Glodel in the amount of P1,896,789.62 representing the insurance indemnity appellant Glodel has been held liable to appellant R&B Insurance Corporation. Appellant Glodel's appeal to absolve it from any liability is herein DISMISSED. SO ORDERED. 5 Hence, Loadmasters filed the present petition for review on certiorari before this Court presenting the following: ISSUES 1.Can Petitioner Loadmasters be held liable to Respondent Glodel in spite of the fact that the latter respondent Glodel did not file a cross-claim against it (Loadmasters)? 2.Under the set of facts established and undisputed in the case, can petitioner Loadmasters be legally considered as an Agent of respondent Glodel? 6 To totally exculpate itself from responsibility for the lost goods, Loadmasters argues that it cannot be considered an agent of Glodel because it never represented the latter in its dealings with the consignee. At any rate, it further contends that Glodel has no recourse against it for its (Glodel's) failure to file a cross-claim pursuant to Section 2, Rule 9 of the 1997 Rules of Civil Procedure. Glodel, in its Comment, 7 counters that Loadmasters is liable to it under its cross-claim because the latter was grossly negligent in the transportation of the subject cargo. With respect to Loadmasters' claim that it is already estopped from filing a cross-claim, Glodel insists that it can still do so even for the first time on appeal because there is no rule that provides otherwise. Finally, Glodel argues that its relationship with Loadmasters is that of Charter wherein the transporter (Loadmasters) is only hired for the specific job of delivering the merchandise. Thus, the diligence required in this case is merely ordinary diligence or that of a good father of the family, not the extraordinary diligence required of common carriers. R&B Insurance, for its part, claims that Glodel is deemed to have interposed a cross-claim against Loadmasters because it was not prevented from presenting evidence to prove its position even without amending its Answer. As to the relationship between Loadmasters and Glodel, it contends that a contract of agency existed between the two corporations. 8 Subrogation is the substitution of one person in the place of another with reference to a lawful claim or right, so that he who is substituted succeeds to the rights of the other in relation to a debt or claim, including its remedies or securities. 9 Doubtless, R&B Insurance is subrogated to the rights of the insured to the extent of the amount it paid the consignee under the marine insurance, as provided under Article 2207 of the Civil Code, which reads: EScHDA ART. 2207.If the plaintiff's property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrong-doer or the person who has violated the contract. If the amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury. As subrogee of the rights and interest of the consignee, R&B Insurance has the right to seek reimbursement from either Loadmasters or Glodel or both for breach of contract and/or tort. The issue now is who, between Glodel and Loadmasters, is liable to pay R&B Insurance for the amount of the indemnity it paid Columbia. At the outset, it is well to resolve the issue of whether Loadmasters and Glodel are common carriers to determine their liability for the loss of the subject cargo. Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of carrying or transporting passenger or goods, or both by land, water or air for compensation, offering their services to the public. Based on the aforecited definition, Loadmasters is a common carrier because it is engaged in the business of transporting goods by land, through its trucking service. It is a common carrier as distinguished from a private carrier wherein the carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for the general public. 10 The distinction is significant in the sense that "the rights and obligations of the parties to a contract of private carriage are governed principally by their stipulations, not by the law on common carriers." 11 In the present case, there is no indication that the undertaking in the contract between Loadmasters and Glodel was private in character. There is no showing that Loadmasters solely and exclusively rendered services to Glodel. In fact, Loadmasters admitted that it is a common carrier. 12 In the same vein, Glodel is also considered a common carrier within the context of Article 1732. In its Memorandum, 13 it states that it "is a corporation duly organized and existing under the laws of the Republic of the Philippines and is engaged in the business of customs brokering." It cannot be considered otherwise because as held by this Court in Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., 14 a customs broker is also regarded as a common carrier, the transportation of goods being an integral part of its business. Loadmasters and Glodel, being both common carriers, are mandated from the nature of their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over the goods transported by them according to all the circumstances of such

case, as required by Article 1733 of the Civil Code. When the Court speaks of extraordinary diligence, it is that extreme measure of care and caution which persons of unusual prudence and circumspection observe for securing and preserving their own property or rights. 15 This exacting standard imposed on common carriers in a contract of carriage of goods is intended to tilt the scales in favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for shipment. 16 Thus, in case of loss of the goods, the common carrier is presumed to have been at fault or to have acted negligently. 17 This presumption of fault or negligence, however, may be rebutted by proof that the common carrier has observed extraordinary diligence over the goods. With respect to the time frame of this extraordinary responsibility, the Civil Code provides that the exercise of extraordinary diligence lasts from the time the goods are unconditionally placed in the possession of, and received by, the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them. 18 Premises considered, the Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R & B Insurance for the loss of the subject cargo. Under Article 2194 of the New Civil Code, "the responsibility of two or more persons who are liable for a quasi-delict is solidary." aEcSIH Loadmasters' claim that it was never privy to the contract entered into by Glodel with the consignee Columbia or R&B Insurance as subrogee, is not a valid defense. It may not have a direct contractual relation with Columbia, but it is liable for tort under the provisions of Article 2176 of the Civil Code on quasi-delicts which expressly 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. Pertinent is the ruling enunciated in the case of Mindanao Terminal and Brokerage Service, Inc. v. Phoenix Assurance Company of New York/McGee & Co., Inc. 19 where this Court held that a tort may arise despite the absence of a contractual relationship, to wit: We agree with the Court of Appeals that the complaint filed by Phoenix and McGee against Mindanao Terminal, from which the present case has arisen, states a cause of action. The present action is based on quasi-delict, arising from the negligent and careless loading and stowing of the cargoes belonging to Del Monte Produce. Even assuming that both Phoenix and McGee have only been subrogated in the rights of Del Monte Produce, who is not a party to the contract of service between Mindanao Terminal and Del Monte, still the insurance carriers may have a cause of action in light of the Court's consistent ruling that the act that breaks the contract may be also a tort. In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract. In the present case, Phoenix and McGee are not suing for damages for injuries arising from the breach of the contract of service but from the alleged negligent manner by which Mindanao Terminal handled the cargoes belonging to Del Monte Produce. Despite the absence of contractual relationship between Del Monte Produce and Mindanao Terminal, the allegation of negligence on the part of the defendant should be sufficient to establish a cause of action arising from quasi-delict. [Emphases supplied] In connection therewith, Article 2180 provides: ART. 2180.The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xxx xxx xxx 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. It is not disputed that the subject cargo was lost while in the custody of Loadmasters whose employees (truck driver and helper) were instrumental in the hijacking or robbery of the shipment. As employer, Loadmasters should be made answerable for the damages caused by its employees who acted within the scope of their assigned task of delivering the goods safely to the warehouse. Whenever an employee's negligence causes damage or injury to another, there instantly arises a presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. 20 To avoid liability for a quasi-delict committed by its employee, an employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence of a good father of a family in the selection and supervision of his employee. 21 In this regard, Loadmasters failed. Glodel is also liable because of its failure to exercise extraordinary diligence. It failed to ensure that Loadmasters would fully comply with the undertaking to safely transport the subject cargo to the designated destination. It should have been more prudent in entrusting the goods to Loadmasters by taking precautionary measures, such as providing escorts to accompany the trucks in delivering the cargoes. Glodel should, therefore, be held liable with Loadmasters. Its defense of force majeure is unavailing. At this juncture, the Court clarifies that there exists no principal-agent relationship between Glodel and Loadmasters, as erroneously found by the CA. Article 1868 of the Civil Code provides: "By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter." The elements of a contract of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority. 22 Accordingly, there can be no contract of agency between the parties. Loadmasters never represented Glodel. Neither was it ever authorized to make such representation. It is a settled rule that the basis for agency is representation, that is, the agent acts for and on behalf of the principal on matters within the scope of his authority and said acts have the same legal effect as if they were personally executed by the principal. On the part of the principal, there must be an actual intention to appoint or an intention naturally inferable

from his words or actions, while on the part of the agent, there must be an intention to accept the appointment and act on it. 23 Such mutual intent is not obtaining in this case. HSaCcE What then is the extent of the respective liabilities of Loadmasters and Glodel? Each wrongdoer is liable for the total damage suffered by R&B Insurance. Where there are several causes for the resulting damages, a party is not relieved from liability, even partially. It is sufficient that the negligence of a party is an efficient cause without which the damage would not have resulted. It is no defense to one of the concurrent tortfeasors that the damage would not have resulted from his negligence alone, without the negligence or wrongful acts of the other concurrent tortfeasor. As stated in the case of Far Eastern Shipping v. Court of Appeals, 24 . . . . Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against any or all of the responsible persons although under the circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person was not the same. No actor's negligence ceases to be a proximate cause merely because it does not exceed the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury. There is no contribution between joint tortfeasors whose liability is solidary since both of them are liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is impossible to determine in what proportion each contributed to the injury and either of them is responsible for the whole injury. Where their concurring negligence resulted in injury or damage to a third party, they become joint tortfeasors and are solidarily liable for the resulting damage under Article 2194 of the Civil Code. [Emphasis supplied] The Court now resolves the issue of whether Glodel can collect from Loadmasters, it having failed to file a cross-claim against the latter. Undoubtedly, Glodel has a definite cause of action against Loadmasters for breach of contract of service as the latter is primarily liable for the loss of the subject cargo. In this case, however, it cannot succeed in seeking judicial sanction against Loadmasters because the records disclose that it did not properly interpose a cross-claim against the latter. Glodel did not even pray that Loadmasters be liable for any and all claims that it may be adjudged liable in favor of R&B Insurance. Under the Rules, a compulsory counterclaim, or a crossclaim, not set up shall be barred. 25 Thus, a cross-claim cannot be set up for the first time on appeal. For the consequence, Glodel has no one to blame but itself. The Court cannot come to its aid on equitable grounds. "Equity, which has been aptly described as 'a justice outside legality,' is applied only in the absence of, and never against, statutory law or judicial rules of procedure." 26 The Court cannot be a lawyer and take the cudgels for a party who has been at fault or negligent. WHEREFORE, the petition is PARTIALLY GRANTED. The August 24, 2007 Decision of the Court of Appeals is MODIFIED to read as follows: WHEREFORE, judgment is rendered declaring petitioner Loadmasters Customs Services, Inc. and respondent Glodel Brokerage Corporation jointly and severally liable to respondent R&B Insurance Corporation for the insurance indemnity it paid to consignee Columbia Wire & Cable Corporation and ordering both parties to pay, jointly and severally, R&B Insurance Corporation a] the amount of P1,896,789.62 representing the insurance indemnity; b] the amount equivalent to ten (10%) percent thereof for attorney's fees; and c] the amount of P22,427.18 for litigation expenses. The cross-claim belatedly prayed for by respondent Glodel Brokerage Corporation against petitioner Loadmasters Customs Services, Inc. is DENIED. SO ORDERED. STADIH

[G.R. No. 70890. September 18, 1992.] CRESENCIO LIBI * and AMELIA YAP LIBI, petitioners, vs. HON. INTERMEDIATE APPELLATE COURT, FELIPE GOTIONG and SHIRLEY GOTIONG, respondents.

Alex Y. Tan for petitioners. Mario D. Ortiz and Danilo V. Ortiz for private respondents.

SYLLABUS 1.CIVIL LAW; QUASI DELICT; LIABILITY OF PARENTS FOR CIVIL LIABILITY ARISING FROM CRIMINAL OFFENSES COMMITTED BY THEIR MINOR CHILDREN; RULE. The parents are and should be held primarily liable for the civil liability arising from criminal offenses committed by their minor children under their legal authority or control, or who live in their company, unless it is proven that the former acted with the diligence of a good father of a family to prevent such damages. That primary liability is premised on the provisions of Article 101 of the Revised Penal Code with respect to damages ex delicto caused by their children 9 years of age or under, or over 9 but under 15 years of age who acted without discernment; and, with regard to their children over 9 but under 15 years of age who acted with discernment, or 15 years or over but under 21 years of age, such primary liability shall be imposed pursuant to Article 2180 of the Civil Code. Under said Article 2180, the enforcement of such liability shall be effected against the father and, in case of his death or incapacity, the mother. This was amplified by the Child and Youth Welfare Code which provides that the same shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case of her death or incapacity, upon the guardian, but the liability may also be voluntarily assumed by a relative or family friend of the youthful offender. However, under the Family Code, this civil liability is now, without such alternative qualification, the responsibility of the parents and those who exercise parental authority over the minor offender. For civil liability arising from quasi-delicts committed by minors, the same rules shall apply in accordance with Articles 2180 and 2182 of the Civil Code, as so modified.

DECISION

REGALADO, J p: One of the ironic verities of life, it has been said, is that sorrow is sometimes a touchstone of love. A tragic illustration is provided by the instant case, wherein two lovers died while still in the prime of their years, a bitter episode for those whose lives they have touched. While we cannot expect to award complete assuagement to their families through seemingly prosaic legal verbiage, this disposition should at least terminate the acrimony and rancor of an extended judicial contest resulting from the unfortunate occurrence. In this final denouement of the judicial recourse the stages whereof were alternately initiated by the parties, petitioners are now before us seeking the reversal of the judgment of respondent court promulgated on January 2, 1985 in AC-G.R. CV No. 69060 with the following decretal portion: "WHEREFORE, the decision of the lower court dismissing plaintiff's complaint is hereby reversed; and instead, judgment is hereby rendered sentencing defendants, jointly and solidarily, to pay to plaintiffs the following amounts: prcd 1.Moral damages, P30,000.000; 2.Exemplary damages, P10,000.00; 3.Attorney's fees, P20,000.00, and costs. However, denial of defendants-appellees' counterclaims is affirmed." 1 Synthesized from the findings of the lower courts, it appears that respondent spouses are the legitimate parents of Julie Ann Gotiong who, at the time of the deplorable incident which took place and from which she died on January 14, 1979, was an 18-year old first year commerce student of the University of San Carlos, Cebu City; while petitioners are the parents of Wendell Libi, then a minor between 18 and 19 years of age living with his aforesaid parents, and who also died in the same event on the same date. For more than two (2) years before their deaths, Julie Ann Gotiong and Wendell Libi were sweethearts until December, 1978 when Julie Ann broke up her relationship with Wendell after she supposedly found him to be sadistic and irresponsible. During the first and second weeks of January, 1979, Wendell kept pestering Julie Ann with demands for reconciliation but the latter persisted in her refusal, prompting the former to resort to threats against her. In order to avoid him, Julie Ann stayed in the house of her best friend, Malou Alfonso, at the corner of Maria Cristina and Juana Osmea Streets, Cebu City, from January 7 to 13, 1978. On January 14, 1979, Julie Ann and Wendell died, each from a single gunshot wound inflicted with the same firearm, a Smith and Wesson revolver licensed in the name of petitioner Cresencio Libi, which was recovered from the scene of the crime inside the residence of private respondents at the corner of General Maxilom and D. Jakosalem streets of the same city. Due to the absence of an eyewitness account of the circumstances surrounding the death of both minors, their parents, who are the contending parties herein, posited their respective theories drawn from their interpretation of circumstantial evidence, available reports, documents and evidence of physical facts.

Private respondents, bereaved over the death of their daughter, submitted that Wendell caused her death by shooting her with the aforesaid firearm and, thereafter, turning the gun on himself to commit suicide. On the other hand, petitioners, puzzled and likewise distressed over the death of their son, rejected the imputation and contended that an unknown third party, whom Wendell may have displeased or antagonized by reason of his work as a narcotics informer of the Constabulary Anti-Narcotics Unit (CANU), must have caused Wendell's death and then shot Julie Ann to eliminate any witness and thereby avoid identification. LibLex As a result of the tragedy, the parents of Julie Ann filed Civil Case No. R-17774 in the then Court of First Instance of Cebu against the parents of Wendell to recover damages arising from the latter's vicarious liability under Article 2180 of the Civil Code. After trial, the court below rendered judgment on October 20, 1980 as follows: "WHEREFORE, premises duly considered, judgment is hereby rendered dismissing plaintiffs' complaint for insufficiency of the evidence. Defendants' counterclaim is likewise denied for lack of sufficient merit." 2 On appeal to respondent court, said judgment of the lower court dismissing the complaint of therein plaintiffs-appellants was set aside and another judgment was rendered against defendants-appellees who, as petitioners in the present appeal by certiorari, now submit for resolution the following issues in this case: 1.Whether or not respondent court correctly reversed the trial court in accordance with established decisional laws; and 2.Whether or not Article 2180 of the Civil Code was correctly interpreted by respondent court to make petitioners liable for vicarious liability. 3 In the proceedings before the trial court, Dr. Jesus P. Cerna, Police Medico-Legal Officer of Cebu, submitted his findings and opinions on some postulates for determining whether or not the gunshot wound was inflicted on Wendell Libi by his own suicidal act. However, undue emphasis was placed by the lower court on the absence of gunpowder or tattooing around the wound at the point of entry of the bullet. It should be emphasized, however, that this is not the only circumstance to be taken into account in the determination of whether it was suicide or not. It is true that said witness declared that he found no evidence of contact or close-contact of an explosive discharge in the entrance wound. However, as pointed out by private respondents, the body of deceased Wendell Libi must have been washed at the funeral parlor, considering the hasty interment thereof a little after eight (8) hours from the occurrence wherein he died. Dr. Cerna himself could not categorically state that the body of Wendell Libi was left untouched at the funeral parlor before he was able to conduct his autopsy. It will also be noted that Dr. Cerna was negligent in not conducting a paraffin test on Wendell Libi, hence possible evidence of gunpowder residue on Wendell's hands was forever lost when Wendell was hastily buried. LexLib More specifically, Dr. Cerna testified that he conducted an autopsy on the body of Wendell Libi about eight (8) hours after the incident or, to be exact, eight (8) hours and twenty (20) minutes based on the record of death; that when he arrived at the Cosmopolitan Funeral Homes, the body of the deceased was already on the autopsy table and in the stage of rigor mortis; and that said body was not washed, but it was dried. 4 However, on redirect examination, he admitted that during the 8-hour interval, he never saw the body nor did he see whether said body was wiped or washed in the area of the wound on the head which he examined because the deceased was inside the morgue. 5 In fact, on cross-examination, he had earlier admitted that as far as the entrance of the wound, the trajectory of the bullet and the exit of the wound are concerned, it is possible that Wendell Libi shot himself. 6 He further testified that the muzzle of the gun was not pressed on the head of the victim and that he found no burning or singeing of the hair or extensive laceration on the gunshot wound of entrance which are general characteristics of contact or near-contact fire. On direct examination, Dr. Cerna nonetheless made these clarification: "QIs it not a fact that there are certain guns which are so made that there would be no black residue or tattooing that could result from these guns because they are what we call clean? AYes, sir. I know that there are what we call smokeless powder. ATTY. ORTIZ: QYes. So, in cases, therefore, of guns where the powder is smokeless, those indications that you said may not rule out the possibility that the gun was closer than 24 inches, is that correct?

AIf the . . . assuming that the gun used was .. the bullet used was a smokeless powder. QAt any rate, doctor, from . . . disregarding those other matters that you have noticed, the singeing, etc., from the trajectory, based on the trajectory of the bullet as shown in your own sketch, is it not a fact that the gun could have been fired by the person himself, the victim himself, Wendell Libi, because it shows a point of entry a little above the right ear and point of exit a little above that, to be very fair and on your oath? AAs far as the point of entrance is concerned and as far as the trajectory of the bullet is concerned and as far as the angle or the manner of fire is concerned, it could have been fired by the victim." 7 As shown by the evidence, there were only two used bullets 8 found at the scene of the crime, each of which were the bullets that hit Julie Ann Gotiong and Wendell Libi, respectively. Also, the sketch prepared by the Medico-Legal Division of the National Bureau of Investigation, 9 shows that there is only one gunshot wound of entrance located at the right temple of Wendell Libi. The necropsy report prepared by Dr. Cerna states:

xxx xxx xxx "Gunshot wound, ENTRANCE, ovaloid, 0.5 x 0.4 cm., with contusion collar widest inferiorly by 0.2 cm., edges inverted, oriented upward, located at the head, temporal region, right, 2.8 cms. behind and 5.5 cms. above right external auditory meatus, directed slightly forward, upward and to the left, involving skin and soft tissues, making a punch-in fracture on the temporal bone, right, penetrating cranial cavity, lacerating extensively along its course the brain tissues, fracturing parietal bone, left, and finally making an EXIT wound, irregular, 2.0 x 1.8 cms., edges (e)verted, parietal region, left, 2.0 cms. behind and 12.9 cms. above left external auditory meatus. LLjur xxx xxx xxx "Evidence of contact or close-contact fire, such as burning around the gunshot wound of entrance, gunpowder tatooing (sic), smudging, singeing of hair, extensive laceration or bursting of the gunshot wound of entrance, or separation of the skin from the underlying tissue, are absent." 10 On cross-examination, Dr. Cerna demonstrated his theory which was made of record, thus: "QNow, will you please use yourself as Wendell Libi, and following the entrance of the wound, the trajectory of the bullet and the exit of the wound, and measuring yourself 24 inches, will you please indicate to the Honorable Court how would it have been possible for Wendell Libi to kill himself? Will you please indicate the 24 inches? WITNESS: AActually, sir, the 24 inches is approximately one arm's length. ATTY. SENINING: I would like to make of record that the witness has demonstrated by extending his right arm almost straight towards his head." 11 Private respondents assail the fact that the trial court gave credence to the testimonies of defendants' witnesses Lydia Ang and James Enrique Tan, the first being a resident of an apartment across the street from the Gotiongs and the second, a resident of the house adjacent to the Gotiong residence, who declared having seen a "shadow" of a person at the gate of the Gotiong house after hearing shots therefrom. On cross-examination, Lydia Ang testified that the apartment where she was staying faces the gas station; that it is the second apartment; that from her window she can see directly the gate of the Gotiongs and, that there is a firewall between her apartment and the gas station. 12 After seeing a man jump from the gate of the Gotiongs to the rooftop of the Tans, she called the police station but the telephone lines were busy. Later on, she talked with James Enrique Tan and told him that she saw a man leap from the gate towards his rooftop. 13 However, James Enrique Tan testified that he saw a "shadow" on top of the gate of the Gotiongs, but denied having talked with anyone regarding what he saw. He explained that he lives in a duplex house with a garden in front of it; that his house is next to Felipe Gotiong's house; and he further gave the following answers to these questions: prcd "ATTY. ORTIZ: (TO WITNESS). QWhat is the height of the wall of the Gotiong's in relation to your house? WITNESS: AIt is about 8 feet. ATTY. ORTIZ: (TO WITNESS) QAnd where were you looking from? WITNESS: AFrom upstairs in my living room. ATTY. ORTIZ (TO WITNESS) QFrom Your living room window, is that correct? WITNESS: AYes, but not very clear because the wall is high." 14 Analyzing the foregoing testimonies, we agree with respondent court that the same do not inspire credence as to the reliability and accuracy of the witnesses' observations, since the visual perceptions of both were obstructed by high walls in their respective houses in

relation to the house of herein private respondents. On the other hand, witness Manolo Alfonso, testifying on rebuttal, attested without contradiction that he and his sister, Malou Alfonso, were waiting for Julie Ann Gotiong when they heard her scream; that when Manolo climbed the fence to see what was going on inside the Gotiong house, he heard the first shot; and, not more than five (5) seconds later, he heard another shot. Consequently, he went down from the fence and drove to the police station to report the incident. 15 Manolo's direct and candid testimony establishes and explains the fact that it was he whom Lydia Ang and James Enrique Tan saw as the "shadow" of a man at the gate of the Gotiong house. We have perforce to reject petitioners' effete and unsubstantiated pretension that it was another man who shot Wendell and Julie Ann. It is significant that the Libi family did not even point to or present any suspect in the crime nor did they file any case against any alleged "John Doe." Nor can we sustain the trial court's dubious theory that Wendell Libi did not die by his own hand because of the overwhelming evidence testimonial, documentary and pictorial the confluence of which point to Wendell as the assailant of Julie Ann, his motive being revenge for her rejection of his persistent pleas for a reconciliation. LibLex Petitioners' defense that they had exercised the due diligence of a good father of a family, hence they should not be civilly liable for the crime committed by their minor son, is not borne out by the evidence on record either. Petitioner Amelita Yap Libi, mother of Wendell, testified that her husband, Cresencio Libi, owns a gun which he kept in a safety deposit box inside a drawer in their bedroom. Each of these petitioners holds a key to the safety deposit box and Amelita's key is always in her bag, all of which facts were known to Wendell. They have never seen their son Wendell taking or using the gun. She admitted, however, that on that fateful night the gun was no longer in the safety deposit box. 16 We, accordingly, cannot but entertain serious doubts that petitioner spouses had really been exercising the diligence of a good father of a family by safely locking the fatal gun away. Wendell could not have gotten hold thereof unless one of the keys to the safety deposit box was negligently left lying around or he had free access to the bag of his mother where the other key was. The diligence of a good father of a family required by law in a parent and child relationship consists, to a large extent, of the instruction and supervision of the child. Petitioners were gravely remiss in their duties as parents in not diligently supervising the activities of their son, despite his minority and immaturity, so much so that it was only at the time of Wendell's death that they allegedly discovered that he was a CANU agent and that Cresencio's gun was missing from the safety deposit box. Both parents were sadly wanting in their duty and responsibility in monitoring and knowing the activities of their children who, for all they know, may be engaged in dangerous work such as being drug informers, 17 or even drug users. Neither was a plausible explanation given for the photograph of Wendell, with a handwritten dedication to Julie Ann at the back thereof, 18 holding upright what clearly appears as a revolver and on how or why he was in possession of that firearm. In setting aside the judgment of the court a quo and holding petitioners civilly liable, as explained at the start of this opinion, respondent court waved aside the protestations of diligence on the part of petitioners and had this to say: ". . . It is still the duty of parents to know the activity of their children who may be engaged in this dangerous activity involving the menace of drugs. Had the defendants-appellees been diligent in supervising the activities of their son, Wendell, and in keeping said gun from his reach, they could have prevented Wendell from killing Julie Ann Gotiong. Therefore, appellants are liable under Article 2180 of the Civil Code which provides: 'The father, and in case of his death or incapacity, the mother, are responsible for the damages caused by their minor children who live in their company.' "Having been grossly negligent in preventing Wendell Libi from having access to said gun which was allegedly kept in a safety deposit box, defendants-appellees are subsidiarily liable for the natural consequence of the criminal act of said minor who was living in their company. This vicarious liability of herein defendants-appellees has been reiterated by the Supreme Court in many cases, prominent of which is the case of Fuellas vs. Cadano, et. al. (L14409, Oct. 31, 1961, 3 SCRA 361-367), which held that: 'The subsidiary liability of parents for damages caused by their minor children imposed by Article 2180 of the New Civil Code covers obligations arising from both quasi-delicts and criminal offenses.' 'The subsidiary liability of parent's arising from the criminal acts of their minor children who acted with discernment is determined under the provisions of Article 2180, N.C.C. and under Article 101 of the Revised Penal Code, because to hold that the former only covers obligations which arise from quasidelicts and not obligations which arise from criminal offenses, would result in the absurdity that while for an act where mere negligence intervenes the father or mother may stand subsidiarily liable for the damages caused by his or her son, no liability would attach if the damage is caused with criminal intent.' (3 SCRA 361-362).

". . . In the instant case, minor son of herein defendants-appellees, Wendell Libi somehow got hold of the key to the drawer where said gun was kept under lock without defendant-spouses ever knowing that said gun had been missing from that safety box since 1978 when Wendell Libi had a picture taken wherein he proudly displayed said gun and dedicated this picture to his sweetheart, Julie Ann Gotiong; also since then, Wendell Libi was said to have kept said gun in his car, in keeping up with his supposed role of a CANU agent . . ." llcd xxx xxx xxx "Based on the foregoing discussions of the assigned errors, this Court holds that the lower court was not correct in dismissing herein plaintiffs-appellants' complaint because as preponderantly shown by evidence, defendantsappellees utterly failed to exercise all the diligence of a good father of the family in preventing their minor son from committing this crime by means of the gun of defendants-appellees which was freely accessible to Wendell Libi for

they have not regularly checked whether said gun was still under lock, but learned that it was missing from the safety deposit box only after the crime had been committed." (Emphases ours.) 19 We agree with the conclusion of respondent court that petitioners should be held liable for the civil liability based on what appears from all indications was a crime committed by their minor son. We take this opportunity, however, to digress and discuss its ratiocination therefor on jurisprudential dicta which we feel require clarification. In imposing sanctions for the so-called vicarious liability of petitioners, respondent court cites Fuellas vs. Cadano, et al. 20 which supposedly holds that "(t)he subsidiary liability of parents for damages caused by their minor children imposed by Article 2180 of the New Civil Code covers obligations arising from both quasi-delicts and criminal offenses," followed by an extended quotation ostensibly from the same case explaining why under Article 2180 of the Civil Code and Article 101 of the Revised Penal Code parents should assume subsidiary liability for damages caused by their minor children. The quoted passages are set out two paragraphs back, with pertinent underscoring for purposes of the discussion hereunder. LLphil Now, we do not have any objection to the doctrinal rule holding, the parents liable, but the categorization of their liability as being subsidiary, and not primary, in nature requires a hard second look considering previous decisions of this court on the matter which warrant comparative analyses. Our concern stems from our readings that if the liability of the parents for crimes or quasi-delicts of their minor children is subsidiary, then the parents can neither invoke nor be absolved of civil liability on the defense that they acted with the diligence of a good father of a family to prevent damages. On the other hand, if such liability imputed to the parents is considered direct and primary, that diligence would constitute a valid and substantial defense. We believe that the civil liability of parents for quasi-delicts of their minor children, as contemplated in Article 2180 of the Civil Code, is primary and not subsidiary. In fact, if we apply Article 2194 of said code which provides for solidary liability of joint tortfeasors, the persons responsible for the act or omission, in this case the minor and the father and, in case of his death of incapacity, the mother, are solidarily liable. Accordingly, such parental liability is primary and not subsidiary, hence the last paragraph of Article 2180 provides that "(t) he 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 damages." We are also persuaded that the liability of the parents for felonies committed by their minor children is likewise primary, not subsidiary. Article 101 of the Revised Penal Code provides: "ARTICLE 101.Rules regarding civil liability in certain cases . xxx xxx xxx First. In cases of subdivisions . . . 2, and 3 of Article 12, the civil liability for acts committed by . . . a person under nine years of age, or by one over nine but under fifteen years of age, who has acted without discernment, shall devolve upon those having such person under their legal authority or control, unless it appears that there was no fault or negligence on their part." (Emphases supplied.) 21 Accordingly, just like the rule in Article 2180 of the Civil Code, under the foregoing provision the civil liability of the parents for crimes committed by their minor children is likewise direct and primary, and also subject to the defense of lack of fault or negligence on their part, that is, the exercise of the diligence of a good father of a family. That in both quasi-delicts and crimes the parents primarily respond for such damages is buttressed by the corresponding provisions in both codes that the minor transgressor shall be answerable or shall respond with his own property only in the absence or in case of insolvency of the former. Thus, for civil liability ex quasi delicto of minors, Article 2182 of the Civil Code states that "(i)f the minor causing damage has no parents or guardian, the minor . . . shall be answerable with his own property in an action against him where a guardian ad litem shall be appointed." For civil liability ex delicto of minors, an equivalent provision is found in the third paragraph of Article 101 of the Revised Penal Code, to wit: "Should there be no person having such . . . minor under his authority, legal guardianship or control, or if such person be insolvent, said . . . minor shall respond with (his) own property, excepting property exempt from execution, in accordance with civil law." The civil liability of parents for felonies committed by their minor children contemplated in the aforesaid rule in Article 101 of the Revised Penal Code in relation to Article 2180 of the Civil Code has, aside from the aforecited case of Fuellas, been the subject of a number of cases adjudicated by this Court, viz.: Exconde vs. Capuno, et al., 22 Araneta vs. Arreglado, 23 Salen, et al. vs. Balce, 24 Paleyan, etc., et al. vs. Bangkili, et al., 25 and Elcano, et al, vs. Hill, et al. 26 Parenthetically, the aforesaid cases were basically on the issue of the civil liability of parents for crimes committed by their minor children over 9 but under 15 years of age, who acted with discernment, and also of minors 15 years of age or over, since these situations are not covered by Article 101, Revised Penal Code. In both instances, this Court held that the issue of parental civil liability should be resolved in accordance with the provisions of Article 2180 of the Civil Code for the reasons well expressed in Salen and adopted in the cases hereinbefore enumerated that to hold that the civil liability under Article 2180 would apply only to quasi-delicts and not to criminal offenses would result in the absurdity that in an act involving mere negligence the parents would be liable but not where the damage is caused with criminal intent. In said cases, however, there are unfortunate variances resulting in a regrettable inconsistency in the Court's determination of whether the liability of the parents, in cases involving either crimes or quasi-delicts of their minor children, is primary or subsidiary. In Exconde, where the 15-year old minor was convicted of double homicide through reckless imprudence, in a separate civil action arising from the crime the minor and his father were held jointly and severally liable for failure of the latter to prove the diligence of a good father of a family. The same liability in solidum and, therefore, primary liability was imposed in a separate civil action in Araneta on the parents and their 14-year old son who was found guilty of frustrated homicide, but on the authority of Article 2194 of the Civil Code providing for solidary responsibility of two or more persons who are liable for a quasi-delict.

However, in Salen, the father was declared subsidiarily liable for damages arising from the conviction of his son, who was over 15 but less than 18 years of age, by applying Article 2180 but, this time, disregarding Article 2194 of the Civil Code. In the present case, as already explained, the petitioners herein were also held liable but supposedly in line with Fuellas which purportedly declared the parents subsidiarily liable for the civil liability for serious physical injuries committed by their 13-year old son. On the other hand, in Paleyan, the mother and her 19-year old son were adjudged solidarily liable for damages arising from his conviction for homicide by the application of Article 2180 of the Civil Code since this is likewise not covered by Article 101 of the Revised Penal Code. Finally, in Elcano, although the son was acquitted in a homicide charge due to "lack of intent, coupled with mistake," it was ruled that while under Article 2180 of the Civil Code there should be solidary liability for damages, since the son, "although married, was living with his father and getting subsistence from him at the time of the occurrence," but "is now of age, as a matter of equity" the father was only held subsidiarily liable. It bears stressing, however, that the Revised Penal Code provides for subsidiary liability only for persons causing damages under the compulsion of irresistible force or under the impulse of an uncontrollable fear; 27 innkeepers, tavern-keepers and proprietors of establishments; 28 employers, teachers, persons and corporations engaged in industry; 29 and principals, accomplices and accessories for the unpaid civil liability of their co-accused in the other classes. 30 Also, coming back to respondent court's reliance on Fuellas in its decision in the present case, it is not exactly accurate to say that Fuellas provided for subsidiary liability of the parents therein. A careful scrutiny shows that what respondent court quoted verbatim in its decision now on appeal in the present case, and which it attributed to Fuellas, was the syllabus on the law report of said case which spoke of "subsidiary" liability. However, such categorization does not specifically appear in the text of the decision in Fuellas. In fact, after reviewing therein the cases of Exconde, Araneta and Salen and the discussions in said cases of Article 101 of the Revised Penal Code in relation to Article 2180 of the Civil Code, this Court concluded its decision in this wise:

"Moreover, the case at bar was decided by the Court of Appeals on the basis of evidence submitted therein by both parties, independent of the criminal case. And responsibility for fault or negligence under Article 2176 upon which the present action was instituted, is entirely separate and distinct from the civil liability arising from fault or negligence under the Penal Code (Art. 2177), and having in mind the reasons behind the law as heretofore stated, any discussion as to the minor's criminal responsibility is of no moment." Under the foregoing considerations, therefore, we hereby rule that the parents are and should be held primarily liable for the civil liability arising from criminal offenses committed by their minor children under their legal authority or control, or who live in their company, unless it is proven that the former acted with the diligence of a good father of a family to prevent such damages. That primary liability is premised on the provisions of Article 101 of the Revised Penal Code with respect to damages ex delicto caused by their children 9 years of age or under, or over 9 but under 15 years of age who acted without discernment; and, with regard to their children over 9 but under 15 years of age who acted with discernment, or 15 years or over but under 21 years of age, such primary liability shall be imposed pursuant to Article 2180 of the Civil Code. 31 Under said Article 2180, the enforcement of such liability shall be effected against the father and, in case of his death or incapacity, the mother. This was amplified by the Child and Youth Welfare Code which provides that the same shall devolve upon the father and, in case of his death or incapacity, upon the mother or, in case of her death or incapacity, upon the guardian, but the liability may also be voluntarily assumed by a relative or family friend of the youthful offender. 3 2 However, under the Family Code, this civil liability is now, without such alternative qualification, the responsibility of the parents and those who exercise parental authority over the minor offender. 33 For civil liability arising from quasi-delicts committed by minors, the same rules shall apply in accordance with Articles 2180 and 2182 of the Civil Code, as so modified. In the case at bar, whether the death of the hapless Julie Ann Gotiong was caused by a felony or a quasi-delict committed by Wendell Libi, respondent court did not err in holding petitioners liable for damages arising therefrom. Subject to the preceding modifications of the premises relied upon by it therefor and on the bases of the legal imperatives herein explained, we conjoin in its findings that said petitioners failed to duly exercise the requisite diligentissimi patris familias to prevent such damages. ACCORDINGLY, the instant Petition is DENIED and the assailed judgment of respondent Court of Appeals is hereby AFFIRMED, with costs against petitioners. SO ORDERED.

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[G.R. No. L-24101. September 30, 1970.] MARIA TERESA Y. CUADRA, minor represented by her father ULISES P. CUADRA, ET AL., plaintiffsappellees, vs. ALFONSO MONFORT, defendant-appellant.

Rodolfo J. Herman for plaintiffs-appellees. Luis G. Torres & Abraham E. Tionko for defendant appellant.

DECISION

MAKALINTAL, J p: This is an action for damages based on quasi-delict, decided by the Court of First Instance of Negros Occidental favorably to the plaintiffs and appealed by the defendant to the Court of Appeals, which certified the same to us since the facts are not in issue. Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were classmates in Grade Six at the Mabini Elementary School in Bacolod City. On July 9, 1962 their teacher assigned them, together with three other classmates, to weed the grass in the school premises. While thus engaged Maria Teresa Monfort found a plastic headband, an ornamental object commonly worn by young girls over their hair. Jokingly she said aloud that she had found an earthworm and, evidently to frighten the Cuadra girl, tossed the object at her. At that precise moment the latter turned around to face her friend, and the object hit her right eye. Smarting from the pain, she rubbed the injured part and treated it with some powder. The next day, July 10, the eye became swollen and it was then that the girl related the incident to her parents, who thereupon took her to a doctor for treatment. She underwent surgical operation twice, first on July 20 and again on August 4, 1962, and stayed in the hospital for a total of twenty-three days, for all of which the parents spent the sum of P1,703.75. Despite the medical efforts, however, Maria Teresa Cuadra completely lost the sight of her right eye. In the civil suit subsequently instituted by the parents in behalf of their minor daughter against Alfonso Monfort, Maria Teresa Monfort's father, the defendant was ordered to pay P1,703.00 as actual damages; P20,000.00 as moral damages; and P2,000.00 as attorney's fees, plus the costs of the suit. The legal issue posed in this appeal is the liability of a parent for an act of his minor child which causes damage to another under the specific facts related above and the applicable provisions of the Civil Code, particularly Articles 2176 and 2180 thereof, which read: "ART. 2176.Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter." "ART. 2180.The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company. xxx xxx xxx The responsibility treated of in this Article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage." The underlying basis of the liability imposed by Article 2176 is the fault or negligence accompanying the act or the omission, there being no willfulness or intent to cause damage thereby. When the act or omission is that of one person for whom another is responsible, the latter then becomes himself liable under Article 2180, in the different cases enumerated therein, such as that of the father or the mother under the circumstances above quoted. The basis of this vicarious, although primary, liability is, as in Article 2176, fault or negligence, which is presumed from that which accompanied the causative act or omission. The presumption is merely prima facie and may therefore be rebutted. This is the clear and logical inference that may be drawn from the last paragraph of Article 2180, which states "that the responsibility treated of in this Article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage." Since the fact thus required to be proven is a matter of defense, the burden of proof necessarily rests on the defendant. But what is the exact degree of diligence contemplated, and how does a parent prove it in connection with a particular act or omission of a minor child, especially when it takes place in his absence or outside his immediate company? Obviously there can be no meticulously calibrated measure applicable; and when the law simply refers to "all the diligence of a good father of the family to prevent damage," it implies a consideration of the attendant circumstances in every individual case, to determine whether or not by the exercise of such diligence the damage could have been prevented. In the present case there is nothing from which it may be inferred that the defendant could have prevented the damage by the observance of due care, or that he was in any way remiss in the exercise of his parental authority in failing to foresee such damage, or the act which caused it. On the contrary, his child was at school, where it was his duty to send her and where she was, as he had the right to expect her to be, under the care and supervision of the teacher. And as far as the act which caused the injury was concerned, it was an innocent prank not unusual among children at play and which no parent, however careful, would have any special reason to

11

anticipate much less guard against. Nor did it reveal any mischievous propensity, or indeed any trait in the child's character which would reflect unfavorably on her upbringing and for which the blame could be attributed to her parents. The victim, no doubt, deserves no little commiseration and sympathy for the tragedy that befell her. But if the defendant is at all obligated to compensate her suffering, the obligation has no legal sanction enforceable in court, but only the moral compulsion of good conscience. The decision appealed from is reversed, and the complaint is dismissed, without pronouncement as to costs. Reyes, J.B.L., Actg. C.J., Dizon, Zaldivar, Castro, Teehankee, Villamor and Makasiar, JJ., concur. Concepcion, C.J., is on leave. Fernando, J., did not take part. Barredo, J., dissents in a separate opinion.

Separate Opinions BARREDO, J., dissenting: I am afraid I cannot go along with my esteemed colleagues in holding that the act of appellant's daughter does not constitute fault within the contemplation of our law on torts. She was 13 years and should have known that by jokingly saying "aloud that she had found an earthworm and, evidently to frighten the Cuadra girl, tossed the object at her," it was likely that something would happen to her friend, as in fact, she was hurt. As to the liability of appellant as father, I prefer to hold that there being no evidence that he had properly advised his daughter to behave properly and not to play dangerous jokes on her classmate and playmates, he can be liable under Article 2180 of the Civil Code. There is nothing in the record to show that he had done anything at all to even try to minimize the damage caused upon plaintiff child.

12

[G.R. No. 85044. June 3, 1992.] MACARIO TAMARGO, CELSO TAMARGO and AURELIA TAMARGO, petitioners, vs. THE HON. COURT OF APPEALS; THE HON. ARISTON L. RUBIO, RTC Judge, Branch 20, Vigan, Ilocos Sur; VICTOR BUNDOC; and CLARA BUNDOC, respondents.

SYLLABUS 1.REMEDIAL LAW; CIVIL ACTIONS; MOTION FOR RECONSIDERATION; CONSIDERED PRO FORMA WHERE NOTICE OF TIME AND PLACE OF HEARING NOT CONTAINED THEREIN. It will be recalled that petitioners' motion (and supplemental motion) for reconsideration filed before the trial court, not having complied with the requirements of Section 13, Rule 41, and Section 4, Rule 15, of the Revised Rules of Court, were considered pro forma and hence did not interrupt and suspend the reglementary period to appeal: the trial court held that the motions, not having contained a notice of time and place of hearing, had become useless pieces of paper which did not interrupt the reglementary period. As in fact repeatedly held by this Court, what is mandatory is the service of the motion on the opposing counsel indicating the time and place of hearing. 2.ID.; SUPREME COURT; SUSPENSION OF APPLICATION OF TECHNICAL RULES EXERCISED IN CASE AT BAR. In view, however, of the nature of the issue raised in the instant Petition, and in order that substantial justice may be served, the Court, invoking its right to suspend the application of technical rules to prevent manifest injustice, elects to treat the notice of appeal as having been seasonably filed before the trial court, and the motion (and supplemental motion) for reconsideration filed by petitioner in the trial court as having interrupted the reglementary period for appeal. (Gregorio v. Court of Appeals, 72 SCRA 120 [1978]) 3.CIVIL LAW; TORTS; DOCTRINE OF "IMPUTED NEGLIGENCE" OR VICARIOUS LIABILITY, CONSTRUED. It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air rifle gave rise to a cause of action on quasi-delict against him. (Article 2176 of the Civil Code) Upon the other hand, the law imposes civil liability upon the father and, in case of his death or incapacity, the mother, for any damages that may be caused by a minor child who lives with them. (Article 2180 of the Civil Code) This principle of parental liability is a species of what is frequently designated as vicarious liability, or the doctrine of "imputed negligence" under Anglo-American tort law, where a person is not only liable for torts committed by himself, but also for torts committed by others with whom he has a certain relationship and for whom he is responsible. Thus, parental liability is made a natural or logical consequence of the duties and responsibilities of parents their parental authority which includes the instructing, controlling and disciplining of the child. 4.ID.; ID.; ID.; BASIS. The civil liability imposed upon parents for the torts of their minor children living with them, may be seen to be based upon the parental authority vested by the Civil Code upon such parents. The civil law assumes that when an unemancipated child living with its parents commits a tortious act, the parents were negligent in the performance of their legal and natural duty closely to supervise the child who is in their custody and control. Parental liability is, in other words, anchored upon parental authority coupled with presumed parental dereliction in the discharge of the duties accompanying such authority. (Cangco v. Manila Railroad Co., 36 Phil. 768 [1918]) 5.ID.; ID.; ID.; ID.; PARENTAL DERELICTION, ONLY A PRESUMPTION. The parental dereliction is, of course, only presumed and the presumption can be overturned under Article 2180 of the Civil Code by proof that the parents had exercised all the diligence of a good father of a family to prevent the damage. 6.REMEDIAL LAW; CIVIL ACTIONS; PARTIES; PARENTS WHO HAD ACTUAL CUSTODY OF MINOR, INDISPENSABLE PARTIES TO ACTION FOR DAMAGES BASED ON TORT. In the instant case, the shooting of Jennifer by Adelberto with an air rifle occurred when parental authority was still lodged in respondent Bundoc spouses, the natural parents of the minor Adelberto. It would thus follow that the natural parents who had then actual custody of the minor Adelberto, are the indispensable parties to the suit for damages. 7.CIVIL LAW; TORTS; DOCTRINE OF "IMPUTED NEGLIGENCE" OR VICARIOUS LIABILITY; EFFECT OF ADOPTION THEREON; CASE AT BAR. We do not believe that parental authority is properly regarded as having been retroactively transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle shooting happened. We do not consider that retroactive effect may be given to the decree of adoption so as to impose a liability upon the adopting parents accruing at a time when the adopting parents had no actual or physical custody over the adopted child . Retroactive effect may perhaps be given to the granting of the petition for adoption where such is essential to permit the accrual of some benefit or advantage in favor of the adopted child. In the instant case, however, to hold that parental authority had been retroactively lodged in the Rapisura spouses so as to burden them with liability for a tortious act that they could not have foreseen and which they could not have prevented (since they were at the time in the United States and had no physical custody over the child Adelberto) would be unfair and unconscionable. Such a result, moreover, would be inconsistent with the philosophical and policy basis underlying the doctrine of vicarious liability. Put a little differently, no presumption of parental dereliction on the part of the adopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject to their control at the time the tort was committed. 8.REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; DISMISSAL OF COMPLAINT WHERE INDISPENSABLE PARTIES ARE ALREADY BEFORE THE COURT CONSTITUTES GRAVE ABUSE OF DISCRETION. Under Article 35 of the Child and Youth Welfare Code, parental authority is provisionally vested in the adopting parents during the period of trial custody, i.e., before the issuance of a decree of adoption, precisely because the adopting parents are given actual custody of the child during such trial period . In the instant case, the trial custody period either had not yet begun or had already been completed at the time of the air rifle shooting; in any case, actual custody of Adelberto was then with his natural parents, not the adopting parents. Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were indispensable parties to the suit for damages brought by petitioners, and that the dismissal by the trial court of petitioners' complaint, the indispensable parties being already before the court, constituted grave abuse of discretion amounting to lack or excess of jurisdiction.

DECISION

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FELICIANO, J p: On 20 October 1982, Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo with an air rifle causing injuries which resulted in her death. Accordingly, a civil complaint for damages was filed with the Regional Trial Court, Branch 20, Vigan, Ilocos Sur, docketed as Civil Case No. 3457-V, by Petitioner Macario Tamargo, Jennifer's adopting parent, and petitioner spouses Celso and Aurelia Tamargo, Jennifer's natural parents, against respondent spouses Victor and Clara Bundoc, Adelberto's natural parents with whom he was living at the time of the tragic incident. In addition to this case for damages, a criminal information for Homicide through Reckless Imprudence was filed [Criminal Case No. 1722-V] against Adelberto Bundoc. Adelberto, however, was acquitted and exempted from criminal liability on the ground that he had acted without discernment. Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa Rapisura had filed a petition to adopt the minor Adelberto Bundoc in Special Proceedings No. 0373-T before the then Court of First Instance of Ilocos Sur. This petition for adoption was granted on 18 November 1982, that is, after Adelberto had shot and killed Jennifer. In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting the result of the foregoing petition for adoption, claimed that not they, but rather the adopting parents, namely the spouses Sabas and Felisa Rapisura, were indispensable parties to the action since parental authority had shifted to the adopting parents from the moment the successful petition for adoption was filed. Petitioners in their Reply contended that since Adelberto Bundoc was then actually living with his natural parents, parental authority had not ceased nor been relinquished by the mere filing and granting of a petition for adoption. The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that respondent natural parents of Adelberto indeed were not indispensable parties to the action. Petitioners received a copy of the trial court's Decision on 7 December 1987. Within the 15-day reglementary period, or on 14 December 1987, petitioners filed a motion for reconsideration followed by a supplemental motion for reconsideration on 15 January 1988. It appearing, however, that the motions failed to comply with Sections 4 and 5 of Rule 15 of the Revised Rules of Court that notice of the motion shall be given to all parties concerned at least three (3) days before the hearing of said motion; and that said notice shall state the time and place of hearing both motions were denied by the trial court in an Order dated 18 April 1988. On 28 April 1988, petitioners filed a notice of appeal. In its Order dated 6 June 1988, the trial court dismissed the notice of appeal, this time ruling that the notice had been filed beyond the 15-day reglementary period ending 22 December 1987. Petitioners went to the Court of Appeals on a petition for mandamus and certiorari questioning the trial court's Decision dated 3 December 1987 and the Orders dated 18 April 1988 and 6 June 1988. The Court of Appeals dismissed the petition, ruling that petitioners had lost their right to appeal.

In the present Petition for Review, petitioners once again contend that respondent spouses Bundoc are the indispensable parties to the action for damages caused by the acts of their minor child, Adelberto Bundoc. Resolution of this Petition hinges on the following issues: (1) whether or not petitioners, notwithstanding loss of their right to appeal, may still file the instant Petition; conversely, whether the Court may still take cognizance of the case even though petitioners' appeal had been filed out of time; and (2) whether or not the effects of adoption, insofar as parental authority is concerned, may be given retroactive effect so as to make the adopting parents the indispensable parties in a damage case filed against their adopted child, for acts committed by the latter when actual custody was yet lodged with the biological parents. 1.It will be recalled that petitioners' motion (and supplemental motion) for reconsideration filed before the trial court, not having complied with the requirements of Section 13, Rule 41, and Section 4, Rule 15, of the Revised Rules of Court, were considered pro forma and hence did not interrupt and suspend the reglementary period to appeal: the trial court held that the motions, not having contained a notice of time and place of hearing, had become useless pieces of paper which did not interrupt the reglementary period. 1 As in fact repeatedly held by this Court, what is mandatory is the service of the motion on the opposing counsel indicating the time and place of hearing. 2 In view, however, of the nature of the issue raised in the instant Petition, and in order that substantial justice may be served, the Court, invoking its right to suspend the application of technical rules to prevent manifest injustice, elects to treat the notice of appeal as having been seasonably filed before the trial court, and the motion (and supplemental motion) for reconsideration filed by petitioner in the trial court as having interrupted the reglementary period for appeal. As the Court held in Gregorio v. Court of Appeals: 3 "Dismissal of appeal purely on technical grounds is frowned upon where the policy of the courts is to encourage hearings of appeal on their merits. The rules of procedure ought not be applied in a very rigid technical sense, rules of procedure are used only to help secure not override, substantial justice. If a technical and rigid enforcement of the rules is made, their aim would be defeated." 4 2.It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer Tamargo with an air rifle gave rise to a cause of action on quasi-delict against him. As Article 2176 of the Civil Code provides: "Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict . . . ." Upon the other hand, the law imposes civil liability upon the father and, in case of his death or incapacity, the mother, for any damages that may be caused by a minor child who lives with them. Article 2180 of the Civil Code reads: "The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.

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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. cdll xxx xxx xxx The responsibility treated of in this Article shall cease when the person herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage." (Emphasis supplied) This principle of parental liability is a species of what is frequently designated as vicarious liability, or the doctrine of "imputed negligence" under Anglo-American tort law, where a person is not only liable for torts committed by himself, but also for torts committed by others with whom he has a certain relationship and for whom he is responsible. Thus, parental liability is made a natural or logical consequence of the duties and responsibilities of parents their parental authority which includes the instructing, controlling and disciplining of the child. 5 The basis for the doctrine of vicarious liability was explained by the Court in Cangco v. Manila Railroad Co. 6 in the following terms: "With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is competent for the legislature to elect and our Legislature has so elected to limit such liability to cases in which the person upon whom such an obligation is imposed is morally culpable or, on the contrary, for reasons of public policy, to extend that liability, without regard to the lack of moral culpability, so as to include responsibility for the negligence of those persons whose acts or omissions are imputable, by a legal fiction, to others who are in a position to exercise an absolute or limited control over them. The legislature which adopted our Civil Code has elected to limit extra-contractual liability with certain well-defined exceptions to cases in which moral culpability can be directly imputed to the persons to be charged. This moral responsibility may consist in having failed to exercise due care in one's own acts, or in having failed to exercise due care in the selection and control of one's agents or servants, or in the control of persons who, by reasons of their status , occupy a position of dependency with respect to the person made liable for their conduct." 7 (Emphasis supplied) The civil liability imposed upon parents for the torts of their minor children living with them, may be seen to be based upon the parental authority vested by the Civil Code upon such parents. The civil law assumes that when an unemancipated child living with its parents commits a tortious act, the parents were negligent in the performance of their legal and natural duty closely to supervise the child who is in their custody and control. Parental liability is, in other words, anchored upon parental authority coupled with presumed parental dereliction in the discharge of the duties accompanying such authority. The parental dereliction is, of course, only presumed and the presumption can be overturned under Article 2180 of the Civil Code by proof that the parents had exercised all the diligence of a good father of a family to prevent the damage. In the instant case, the shooting of Jennifer by Adelberto with an air rifle occurred when parental authority was still lodged in respondent Bundoc spouses, the natural parents of the minor Adelberto. It would thus follow that the natural parents who had then actual custody of the minor Adelberto, are the indispensable parties to the suit for damages. The natural parents of Adelberto, however, stoutly maintain that because a decree of adoption was issued by the adoption court in favor of the Rapisura spouses, parental authority was vested in the latter as adopting parents as of the time of the filing the petition for adoption that is, before Adelberto had shot Jennifer with an air rifle. The Bundoc spouses contend that they were therefore free of any parental responsibility for Adelberto's allegedly tortious conduct. Respondent Bundoc spouses rely on Article 36 of the Child and Youth Welfare Code 8 which reads as follows: LLjur "Article 36.Decree of Adoption. If, after considering the report of the Department of Social Welfare or duly licensed child placement agency and the evidence submitted before it, the court is satisfied that the petitioner is qualified to maintain, care for, and educate the child, that the trial custody period has been completed, and that the best interests of the child will be promoted by the adoption, a decree of adoption shall be entered, which shall be effective as of the date the original petition was filed . The decree shall state the name by which the child is thenceforth to be known." (Emphasis supplied). The Bundoc spouses further argue that the above Article 36 should be read in relation to Article 39 of the same Code: "Art. 39.Effect of Adoption. The adoption shall: xxx xxx xxx (2)Dissolve the authority vested in the natural parents , except where the adopter is the spouse of the surviving natural parent;" xxx xxx xxx (Emphasis supplied) and urge that their parental authority must be deemed to have been dissolved as of the time the petition for adoption was filed. The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental liability for the torts of a minor child is the relationship existing between the parents and the minor child living with them and over whom, the law presumes, the parents exercise supervision and control. Article 58 of the Child and Youth Welfare Code, re-enacted this rule: "Article 58.Torts Parents and guardians are responsible for the damage caused by the child under their parental authority in accordance with the Civil Code." (Emphasis supplied).

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Article 221 of the Family Code of the Philippines 9 has similarly insisted upon the requisite that the child, doer of the tortious act, shall have been in the actual custody of the parents sought to be held liable for the ensuing damage: "Art. 221.Parents and other persons exercising parental authority shall be civilly liable for the injuries and damages caused by the acts or omissions of their unemancipated children living in their company and under their parental authority subject to the appropriate defenses provided by law." (Emphasis supplied) We do not believe that parental authority is properly regarded as having been retroactively transferred to and vested in the adopting parents, the Rapisura spouses, at the time the air rifle shooting happened. We do not consider that retroactive effect may be given to the decree of adoption so as to impose a liability upon the adopting parents accruing at a time when the adopting parents had no actual or physical custody over the adopted child. Retroactive effect may perhaps be given to the granting of the petition for adoption where such is essential to permit the accrual of some benefit or advantage in favor of the adopted child. In the instant case, however, to hold that parental authority had been retroactively lodged in the Rapisura spouses so as to burden them with liability for a tortious act that they could not have foreseen and which they could not have prevented (since they were at the time in the United States and had no physical custody over the child Adelberto) would be unfair and unconscionable. Such a result, moreover, would be inconsistent with the philosophical and policy basis underlying the doctrine of vicarious liability. Put a little differently, no presumption of parental dereliction on the part of the adopting parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject to their control at the time the tort was committed.

Article 35 of the Child and Youth Welfare Code fortifies the conclusion reached above. Article 35 provides as follows: "Art. 35.Trial Custody. No Petition for adoption shall be finally granted unless and until the adopting parents are given by the courts a supervised trial custody period of at least six months to assess their adjustment and emotional readiness for the legal union. During the period of trial custody, parental authority shall be vested in the adopting parents." (Emphasis supplied) Under the above Article 35, parental authority is provisionally vested in the adopting parents during the period of trial custody, i.e., before the issuance of a decree of adoption, precisely because the adopting parents are given actual custody of the child during such trial period. In the instant case, the trial custody period either had not yet begun or had already been completed at the time of the air rifle shooting; in any case, actual custody of Adelberto was then with his natural parents, not the adopting parents. llcd Accordingly, we conclude that respondent Bundoc spouses, Adelberto's natural parents, were indispensable parties to the suit for damages brought by petitioners, and that the dismissal by the trial court of petitioners' complaint, the indispensable parties being already before the court, constituted grave abuse of discretion amounting to lack or excess of jurisdiction. WHEREFORE, premises considered, the Petition for Review is hereby GRANTED DUE COURSE and the Decision of the Court of Appeals dated 6 September 1988, in C.A.-G.R. No. SP-15016 is hereby REVERSED and SET ASIDE. Petitioners' complaint filed before the trial court is hereby REINSTATED and this case is REMANDED to that court for further proceedings consistent with this Decision. Costs against respondent Bundoc spouses. This Decision is immediately executory. SO ORDERED.

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[G.R. No. 188288. January 16, 2012.] SPOUSES FERNANDO and LOURDES VILORIA, petitioners, vs. CONTINENTAL AIRLINES, INC., respondent.

DECISION

REYES, J p: This is a petition for review under Rule 45 of the Rules of Court from the January 30, 2009 Decision 1 of the Special Thirteenth Division of the Court of Appeals (CA) in CA-G.R. CV No. 88586 entitled "Spouses Fernando and Lourdes Viloria v. Continental Airlines, Inc.," the dispositive portion of which states: WHEREFORE, the Decision of the Regional Trial Court, Branch 74, dated 03 April 2006, awarding US$800.00 or its peso equivalent at the time of payment, plus legal rate of interest from 21 July 1997 until fully paid, [P]100,000.00 as moral damages, [P]50,000.00 as exemplary damages, [P]40,000.00 as attorney's fees and costs of suit to plaintiffs-appellees is hereby REVERSED and SET ASIDE. Defendant-appellant's counterclaim is DENIED. Costs against plaintiffs-appellees. SO ORDERED. 2 On April 3, 2006, the Regional Trial Court of Antipolo City, Branch 74 (RTC) rendered a Decision, giving due course to the complaint for sum of money and damages filed by petitioners Fernando Viloria (Fernando) and Lourdes Viloria (Lourdes), collectively called Spouses Viloria, against respondent Continental Airlines, Inc. (CAI). As culled from the records, below are the facts giving rise to such complaint. On or about July 21, 1997 and while in the United States, Fernando purchased for himself and his wife, Lourdes, two (2) round trip airline tickets from San Diego, California to Newark, New Jersey on board Continental Airlines. Fernando purchased the tickets at US$400.00 each from a travel agency called "Holiday Travel" and was attended to by a certain Margaret Mager (Mager). According to Spouses Viloria, Fernando agreed to buy the said tickets after Mager informed them that there were no available seats at Amtrak, an intercity passenger train service provider in the United States. Per the tickets, Spouses Viloria were scheduled to leave for Newark on August 13, 1997 and return to San Diego on August 21, 1997. DaACIH Subsequently, Fernando requested Mager to reschedule their flight to Newark to an earlier date or August 6, 1997. Mager informed him that flights to Newark via Continental Airlines were already fully booked and offered the alternative of a round trip flight via Frontier Air. Since flying with Frontier Air called for a higher fare of US$526.00 per passenger and would mean traveling by night, Fernando opted to request for a refund. Mager, however, denied his request as the subject tickets are non-refundable and the only option that Continental Airlines can offer is the re-issuance of new tickets within one (1) year from the date the subject tickets were issued. Fernando decided to reserve two (2) seats with Frontier Air. As he was having second thoughts on traveling via Frontier Air, Fernando went to the Greyhound Station where he saw an Amtrak station nearby. Fernando made inquiries and was told that there are seats available and he can travel on Amtrak anytime and any day he pleased. Fernando then purchased two (2) tickets for Washington, D.C. From Amtrak, Fernando went to Holiday Travel and confronted Mager with the Amtrak tickets, telling her that she had misled them into buying the Continental Airlines tickets by misrepresenting that Amtrak was already fully booked. Fernando reiterated his demand for a refund but Mager was firm in her position that the subject tickets are non-refundable. Upon returning to the Philippines, Fernando sent a letter to CAI on February 11, 1998, demanding a refund and alleging that Mager had deluded them into purchasing the subject tickets. 3 In a letter dated February 24, 1998, Continental Micronesia informed Fernando that his complaint had been referred to the Customer Refund Services of Continental Airlines at Houston, Texas. 4 In a letter dated March 24, 1998, Continental Micronesia denied Fernando's request for a refund and advised him that he may take the subject tickets to any Continental ticketing location for the re-issuance of new tickets within two (2) years from the date they were issued. Continental Micronesia informed Fernando that the subject tickets may be used as a form of payment for the purchase of another Continental ticket, albeit with a re-issuance fee. 5 On June 17, 1999, Fernando went to Continental's ticketing office at Ayala Avenue, Makati City to have the subject tickets replaced by a single round trip ticket to Los Angeles, California under his name. Therein, Fernando was informed that Lourdes' ticket was nontransferable, thus, cannot be used for the purchase of a ticket in his favor. He was also informed that a round trip ticket to Los Angeles was US$1,867.40 so he would have to pay what will not be covered by the value of his San Diego to Newark round trip ticket. aTSEcA In a letter dated June 21, 1999, Fernando demanded for the refund of the subject tickets as he no longer wished to have them replaced. In addition to the dubious circumstances under which the subject tickets were issued, Fernando claimed that CAI's act of charging him with US$1,867.40 for a round trip ticket to Los Angeles, which other airlines priced at US$856.00, and refusal to allow him to use Lourdes' ticket, breached its undertaking under its March 24, 1998 letter. 6

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On September 8, 2000, Spouses Viloria filed a complaint against CAI, praying that CAI be ordered to refund the money they used in the purchase of the subject tickets with legal interest from July 21, 1997 and to pay P1,000,000.00 as moral damages, P500,000.00 as exemplary damages and P250,000.00 as attorney's fees. 7 CAI interposed the following defenses: (a) Spouses Viloria have no right to ask for a refund as the subject tickets are non-refundable; (b) Fernando cannot insist on using the ticket in Lourdes' name for the purchase of a round trip ticket to Los Angeles since the same is non-transferable; (c) as Mager is not a CAI employee, CAI is not liable for any of her acts; (d) CAI, its employees and agents did not act in bad faith as to entitle Spouses Viloria to moral and exemplary damages and attorney's fees. CAI also invoked the following clause printed on the subject tickets: 3.To the extent not in conflict with the foregoing carriage and other services performed by each carrier are subject to: (i) provisions contained in this ticket, (ii) applicable tariffs, (iii) carrier's conditions of carriage and related regulations which are made part hereof (and are available on application at the offices of carrier), except in transportation between a place in the United States or Canada and any place outside thereof to which tariffs in force in those countries apply. 8 According to CAI, one of the conditions attached to their contract of carriage is the non-transferability and non-refundability of the subject tickets. The RTC's Ruling Following a full-blown trial, the RTC rendered its April 3, 2006 Decision, holding that Spouses Viloria are entitled to a refund in view of Mager's misrepresentation in obtaining their consent in the purchase of the subject tickets. 9 The relevant portion of the April 3, 2006 Decision states: Continental Airlines agent Ms. Mager was in bad faith when she was less candid and diligent in presenting to plaintiffs spouses their booking options. Plaintiff Fernando clearly wanted to travel via AMTRAK, but defendant's agent misled him into purchasing Continental Airlines tickets instead on the fraudulent misrepresentation that Amtrak was fully booked. In fact, defendant Airline did not specifically denied (sic) this allegation. SDHETI Plainly, plaintiffs spouses, particularly plaintiff Fernando, were tricked into buying Continental Airline tickets on Ms. Mager's misleading misrepresentations. Continental Airlines agent Ms. Mager further relied on and exploited plaintiff Fernando's need and told him that they must book a flight immediately or risk not being able to travel at all on the couple's preferred date. Unfortunately, plaintiffs spouses fell prey to the airline's and its agent's unethical tactics for baiting trusting customers." 10 Citing Articles 1868 and 1869 of the Civil Code, the RTC ruled that Mager is CAI's agent, hence, bound by her bad faith and misrepresentation. As far as the RTC is concerned, there is no issue as to whether Mager was CAI's agent in view of CAI's implied recognition of her status as such in its March 24, 1998 letter. The act of a travel agent or agency being involved here, the following are the pertinent New Civil Code provisions on agency: Art. 1868.By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. 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. Agency may be oral, unless the law requires a specific form. As its very name implies, a travel agency binds itself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. This court takes judicial notice of the common services rendered by travel agencies that represent themselves as such, specifically the reservation and booking of local and foreign tours as well as the issuance of airline tickets for a commission or fee. The services rendered by Ms. Mager of Holiday Travel agency to the plaintiff spouses on July 21, 1997 were no different from those offered in any other travel agency. Defendant airline impliedly if not expressly acknowledged its principal-agent relationship with Ms. Mager by its offer in the letter dated March 24, 1998 an obvious attempt to assuage plaintiffs spouses' hurt feelings. 11 Furthermore, the RTC ruled that CAI acted in bad faith in reneging on its undertaking to replace the subject tickets within two (2) years from their date of issue when it charged Fernando with the amount of US$1,867.40 for a round trip ticket to Los Angeles and when it refused to allow Fernando to use Lourdes' ticket. Specifically: Tickets may be reissued for up to two years from the original date of issue. When defendant airline still charged plaintiffs spouses US$1,867.40 or more than double the then going rate of US$856.00 for the unused tickets when the same were presented within two (2) years from date of issue, defendant airline exhibited callous treatment of passengers. 12 CScaDH The Appellate Court's Ruling

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On appeal, the CA reversed the RTC's April 3, 2006 Decision, holding that CAI cannot be held liable for Mager's act in the absence of any proof that a principal-agent relationship existed between CAI and Holiday Travel. According to the CA, Spouses Viloria, who have the burden of proof to establish the fact of agency, failed to present evidence demonstrating that Holiday Travel is CAI's agent. Furthermore, contrary to Spouses Viloria's claim, the contractual relationship between Holiday Travel and CAI is not an agency but that of a sale. Plaintiffs-appellees assert that Mager was a sub-agent of Holiday Travel who was in turn a ticketing agent of Holiday Travel who was in turn a ticketing agent of Continental Airlines. Proceeding from this premise, they contend that Continental Airlines should be held liable for the acts of Mager. The trial court held the same view. We do not agree. By the contract of agency, a person binds him/herself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. The elements of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for him/herself; and (4) the agent acts within the scope of his/her authority. As the basis of agency is representation, there must be, on the part of the principal, an actual intention to appoint, an intention naturally inferable from the principal's words or actions. In the same manner, there must be an intention on the part of the agent to accept the appointment and act upon it. Absent such mutual intent, there is generally no agency. It is likewise a settled rule that persons dealing with an assumed agent are bound at their peril, if they would hold the principal liable, to ascertain not only the fact of agency but also the nature and extent of authority, and in case either is controverted, the burden of proof is upon them to establish it. Agency is never presumed, neither is it created by the mere use of the word in a trade or business name. We have perused the evidence and documents so far presented. We find nothing except bare allegations of plaintiffs-appellees that Mager/Holiday Travel was acting in behalf of Continental Airlines. From all sides of legal prism, the transaction in issue was simply a contract of sale, wherein Holiday Travel buys airline tickets from Continental Airlines and then, through its employees, Mager included, sells it at a premium to clients. 13 The CA also ruled that refund is not available to Spouses Viloria as the word "non-refundable" was clearly printed on the face of the subject tickets, which constitute their contract with CAI. Therefore, the grant of their prayer for a refund would violate the proscription against impairment of contracts. Finally, the CA held that CAI did not act in bad faith when they charged Spouses Viloria with the higher amount of US$1,867.40 for a round trip ticket to Los Angeles. According to the CA, there is no compulsion for CAI to charge the lower amount of US$856.00, which Spouses Viloria claim to be the fee charged by other airlines. The matter of fixing the prices for its services is CAI's prerogative, which Spouses Viloria cannot intervene. In particular: It is within the respective rights of persons owning and/or operating business entities to peg the premium of the services and items which they provide at a price which they deem fit, no matter how expensive or exhorbitant said price may seem vis--vis those of the competing companies. The Spouses Viloria may not intervene with the business judgment of Continental Airlines. 14 The Petitioners' Case In this Petition, this Court is being asked to review the findings and conclusions of the CA, as the latter's reversal of the RTC's April 3, 2006 Decision allegedly lacks factual and legal bases. Spouses Viloria claim that CAI acted in bad faith when it required them to pay a higher amount for a round trip ticket to Los Angeles considering CAI's undertaking to re-issue new tickets to them within the period stated in their March 24, 1998 letter. CAI likewise acted in bad faith when it disallowed Fernando to use Lourdes' ticket to purchase a round trip to Los Angeles given that there is nothing in Lourdes' ticket indicating that it is non-transferable. As a common carrier, it is CAI's duty to inform its passengers of the terms and conditions of their contract and passengers cannot be bound by such terms and conditions which they are not made aware of. Also, the subject contract of carriage is a contract of adhesion; therefore, any ambiguities should be construed against CAI. Notably, the petitioners are no longer questioning the validity of the subject contracts and limited its claim for a refund on CAI's alleged breach of its undertaking in its March 24, 1998 letter. ECcTaS The Respondent's Case In its Comment, CAI claimed that Spouses Viloria's allegation of bad faith is negated by its willingness to issue new tickets to them and to credit the value of the subject tickets against the value of the new ticket Fernando requested. CAI argued that Spouses Viloria's sole basis to claim that the price at which CAI was willing to issue the new tickets is unconscionable is a piece of hearsay evidence an advertisement appearing on a newspaper stating that airfares from Manila to Los Angeles or San Francisco cost US$818.00. 15 Also, the advertisement pertains to airfares in September 2000 and not to airfares prevailing in June 1999, the time when Fernando asked CAI to apply the value of the subject tickets for the purchase of a new one. 16 CAI likewise argued that it did not undertake to protect Spouses Viloria from any changes or fluctuations in the prices of airline tickets and its only obligation was to apply the value of the subject tickets to the purchase of the newly issued tickets. With respect to Spouses Viloria's claim that they are not aware of CAI's restrictions on the subject tickets and that the terms and conditions that are printed on them are ambiguous, CAI denies any ambiguity and alleged that its representative informed Fernando that the subject tickets are non-transferable when he applied for the issuance of a new ticket. On the other hand, the word "nonrefundable" clearly appears on the face of the subject tickets. CAI also denies that it is bound by the acts of Holiday Travel and Mager and that no principal-agency relationship exists between them. As an independent contractor, Holiday Travel was without capacity to bind CAI. Issues To determine the propriety of disturbing the CA's January 30, 2009 Decision and whether Spouses Viloria have the right to the reliefs they prayed for, this Court deems it necessary to resolve the following issues:

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a.Does a principal-agent relationship exist between CAI and Holiday Travel? b.Assuming that an agency relationship exists between CAI and Holiday Travel, is CAI bound by the acts of Holiday Travel's agents and employees such as Mager? c.Assuming that CAI is bound by the acts of Holiday Travel's agents and employees, can the representation of Mager as to unavailability of seats at Amtrak be considered fraudulent as to vitiate the consent of Spouse Viloria in the purchase of the subject tickets? d.Is CAI justified in insisting that the subject tickets are non-transferable and non-refundable? e.Is CAI justified in pegging a different price for the round trip ticket to Los Angeles requested by Fernando? f.Alternatively, did CAI act in bad faith or renege its obligation to Spouses Viloria to apply the value of the subject tickets in the purchase of new ones when it refused to allow Fernando to use Lourdes' ticket and in charging a higher price for a round trip ticket to Los Angeles? This Court's Ruling I.A principal-agent relationship exists between CAI and Holiday Travel. With respect to the first issue, which is a question of fact that would require this Court to review and re-examine the evidence presented by the parties below, this Court takes exception to the general rule that the CA's findings of fact are conclusive upon us and our jurisdiction is limited to the review of questions of law. It is well-settled to the point of being axiomatic that this Court is authorized to resolve questions of fact if confronted with contrasting factual findings of the trial court and appellate court and if the findings of the CA are contradicted by the evidence on record. 17 ISAcHD According to the CA, agency is never presumed and that he who alleges that it exists has the burden of proof. Spouses Viloria, on whose shoulders such burden rests, presented evidence that fell short of indubitably demonstrating the existence of such agency. We disagree. The CA failed to consider undisputed facts, discrediting CAI's denial that Holiday Travel is one of its agents. Furthermore, in erroneously characterizing the contractual relationship between CAI and Holiday Travel as a contract of sale, the CA failed to apply the fundamental civil law principles governing agency and differentiating it from sale. In Rallos v. Felix Go Chan & Sons Realty Corporation, 18 this Court explained the nature of an agency and spelled out the essential elements thereof: Out of the above given principles, sprung the creation and acceptance of the relationship of agency whereby one party, called the principal (mandante), authorizes another, called the agent (mandatario), to act for and in his behalf in transactions with third persons. The essential elements of agency are: (1) there is consent, express or implied of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself, and (4) the agent acts within the scope of his authority. Agency is basically personal, representative, and derivative in nature. The authority of the agent to act emanates from the powers granted to him by his principal; his act is the act of the principal if done within the scope of the authority. Qui facit per alium facit se. "He who acts through another acts himself." 19 Contrary to the findings of the CA, all the elements of an agency exist in this case. The first and second elements are present as CAI does not deny that it concluded an agreement with Holiday Travel, whereby Holiday Travel would enter into contracts of carriage with third persons on CAI's behalf. The third element is also present as it is undisputed that Holiday Travel merely acted in a representative capacity and it is CAI and not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel on its behalf. The fourth element is also present considering that CAI has not made any allegation that Holiday Travel exceeded the authority that was granted to it. In fact, CAI consistently maintains the validity of the contracts of carriage that Holiday Travel executed with Spouses Viloria and that Mager was not guilty of any fraudulent misrepresentation. That CAI admits the authority of Holiday Travel to enter into contracts of carriage on its behalf is easily discernible from its February 24, 1998 and March 24, 1998 letters, where it impliedly recognized the validity of the contracts entered into by Holiday Travel with Spouses Viloria. When Fernando informed CAI that it was Holiday Travel who issued to them the subject tickets, CAI did not deny that Holiday Travel is its authorized agent. Prior to Spouses Viloria's filing of a complaint against it, CAI never refuted that it gave Holiday Travel the power and authority to conclude contracts of carriage on its behalf. As clearly extant from the records, CAI recognized the validity of the contracts of carriage that Holiday Travel entered into with Spouses Viloria and considered itself bound with Spouses Viloria by the terms and conditions thereof; and this constitutes an unequivocal testament to Holiday Travel's authority to act as its agent. This Court cannot therefore allow CAI to take an altogether different position and deny that Holiday Travel is its agent without condoning or giving imprimatur to whatever damage or prejudice that may result from such denial or retraction to Spouses Viloria, who relied on good faith on CAI's acts in recognition of Holiday Travel's authority. Estoppel is primarily based on the doctrine of good faith and the avoidance of harm that will befall an innocent party due to its injurious reliance, the failure to apply it in this case would result in gross travesty of justice. 20 Estoppel bars CAI from making such denial. As categorically provided under Article 1869 of the Civil Code, "[a]gency 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." SITCcE Considering that the fundamental hallmarks of an agency are present, this Court finds it rather peculiar that the CA had branded the contractual relationship between CAI and Holiday Travel as one of sale. The distinctions between a sale and an agency are not difficult to discern and this Court, as early as 1970, had already formulated the guidelines that would aid in differentiating the two (2) contracts.

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In Commissioner of Internal Revenue v. Constantino, 21 this Court extrapolated that the primordial differentiating consideration between the two (2) contracts is the transfer of ownership or title over the property subject of the contract. In an agency, the principal retains ownership and control over the property and the agent merely acts on the principal's behalf and under his instructions in furtherance of the objectives for which the agency was established. On the other hand, the contract is clearly a sale if the parties intended that the delivery of the property will effect a relinquishment of title, control and ownership in such a way that the recipient may do with the property as he pleases. Since the company retained ownership of the goods, even as it delivered possession unto the dealer for resale to customers, the price and terms of which were subject to the company's control, the relationship between the company and the dealer is one of agency, tested under the following criterion: "The difficulty in distinguishing between contracts of sale and the creation of an agency to sell has led to the establishment of rules by the application of which this difficulty may be solved. The decisions say the transfer of title or agreement to transfer it for a price paid or promised is the essence of sale. If such transfer puts the transferee in the attitude or position of an owner and makes him liable to the transferor as a debtor for the agreed price, and not merely as an agent who must account for the proceeds of a resale, the transaction is a sale; while the essence of an agency to sell is the delivery to an agent, not as his property, but as the property of the principal, who remains the owner and has the right to control sales, fix the price, and terms, demand and receive the proceeds less the agent's commission upon sales made. 1 Mechem on Sales, Sec. 43; 1 Mechem on Agency, Sec. 48; Williston on Sales, 1; Tiedeman on Sales, 1." (Salisbury v. Brooks, 94 SE 117, 118-119) 22 As to how the CA have arrived at the conclusion that the contract between CAI and Holiday Travel is a sale is certainly confounding, considering that CAI is the one bound by the contracts of carriage embodied by the tickets being sold by Holiday Travel on its behalf. It is undisputed that CAI and not Holiday Travel who is the party to the contracts of carriage executed by Holiday Travel with third persons who desire to travel via Continental Airlines, and this conclusively indicates the existence of a principal-agent relationship. That the principal is bound by all the obligations contracted by the agent within the scope of the authority granted to him is clearly provided under Article 1910 of the Civil Code and this constitutes the very notion of agency. II.In actions based on quasi-delict, a principal can only be held liable for the tort committed by its agent's employees if it has been established by preponderance of evidence that the principal was also at fault or negligent or that the principal exercise control and supervision over them. Considering that Holiday Travel is CAI's agent, does it necessarily follow that CAI is liable for the fault or negligence of Holiday Travel's employees? Citing China Air Lines, Ltd. v. Court of Appeals, et al., 23 CAI argues that it cannot be held liable for the actions of the employee of its ticketing agent in the absence of an employer-employee relationship. An examination of this Court's pronouncements in China Air Lines will reveal that an airline company is not completely exonerated from any liability for the tort committed by its agent's employees. A prior determination of the nature of the passenger's cause of action is necessary. If the passenger's cause of action against the airline company is premised on culpa aquiliana or quasi-delict for a tort committed by the employee of the airline company's agent, there must be an independent showing that the airline company was at fault or negligent or has contributed to the negligence or tortuous conduct committed by the employee of its agent. The mere fact that the employee of the airline company's agent has committed a tort is not sufficient to hold the airline company liable. There is no vinculum juris between the airline company and its agent's employees and the contractual relationship between the airline company and its agent does not operate to create a juridical tie between the airline company and its agent's employees. Article 2180 of the Civil Code does not make the principal vicariously liable for the tort committed by its agent's employees and the principal-agency relationship per se does not make the principal a party to such tort; hence, the need to prove the principal's own fault or negligence. aHTCIc On the other hand, if the passenger's cause of action for damages against the airline company is based on contractual breach or culpa contractual, it is not necessary that there be evidence of the airline company's fault or negligence. As this Court previously stated in China Air Lines and reiterated in Air France vs. Gillego, 24 "in an action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the existence of the contract and the fact of its non-performance by the carrier." Spouses Viloria's cause of action on the basis of Mager's alleged fraudulent misrepresentation is clearly one of tort or quasi-delict, there being no pre-existing contractual relationship between them. Therefore, it was incumbent upon Spouses Viloria to prove that CAI was equally at fault. However, the records are devoid of any evidence by which CAI's alleged liability can be substantiated. Apart from their claim that CAI must be held liable for Mager's supposed fraud because Holiday Travel is CAI's agent, Spouses Viloria did not present evidence that CAI was a party or had contributed to Mager's complained act either by instructing or authorizing Holiday Travel and Mager to issue the said misrepresentation. It may seem unjust at first glance that CAI would consider Spouses Viloria bound by the terms and conditions of the subject contracts, which Mager entered into with them on CAI's behalf, in order to deny Spouses Viloria's request for a refund or Fernando's use of Lourdes' ticket for the re-issuance of a new one, and simultaneously claim that they are not bound by Mager's supposed misrepresentation for purposes of avoiding Spouses Viloria's claim for damages and maintaining the validity of the subject contracts. It may likewise be argued that CAI cannot deny liability as it benefited from Mager's acts, which were performed in compliance with Holiday Travel's obligations as CAI's agent. acCTIS However, a person's vicarious liability is anchored on his possession of control, whether absolute or limited, on the tortfeasor. Without such control, there is nothing which could justify extending the liability to a person other than the one who committed the tort. As this Court explained in Cangco v. Manila Railroad Co.: 25 With respect to extra-contractual obligation arising from negligence, whether of act or omission , it is competent for the legislature to elect and our Legislature has so elected to limit such liability to cases in which

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the person upon whom such an obligation is imposed is morally culpable or, on the contrary, for reasons of public policy, to extend that liability, without regard to the lack of moral culpability, so as to include responsibility for the negligence of those persons whose acts or omissions are imputable, by a legal fiction, to others who are in a position to exercise an absolute or limited control over them. The legislature which adopted our Civil Code has elected to limit extra-contractual liability with certain well-defined exceptions to cases in which moral culpability can be directly imputed to the persons to be charged. This moral responsibility may consist in having failed to exercise due care in one's own acts, or in having failed to exercise due care in the selection and control of one's agent or servants, or in the control of persons who, by reasons of their status, occupy a position of dependency with respect to the person made liable for their conduct. 26 (emphasis supplied) It is incumbent upon Spouses Viloria to prove that CAI exercised control or supervision over Mager by preponderant evidence. The existence of control or supervision cannot be presumed and CAI is under no obligation to prove its denial or nugatory assertion. Citing Belen v. Belen, 27 this Court ruled in Jayme v. Apostol, 28 that: In Belen v. Belen, this Court ruled that it was enough for defendant to deny an alleged employment relationship. The defendant is under no obligation to prove the negative averment. This Court said: "It is an old and well-settled rule of the courts that the burden of proving the action is upon the plaintiff, and that if he fails satisfactorily to show the facts upon which he bases his claim, the defendant is under no obligation to prove his exceptions. This [rule] is in harmony with the provisions of Section 297 of the Code of Civil Procedure holding that each party must prove his own affirmative allegations, etc." 29 (citations omitted) Therefore, without a modicum of evidence that CAI exercised control over Holiday Travel's employees or that CAI was equally at fault, no liability can be imposed on CAI for Mager's supposed misrepresentation. III.Even on the assumption that CAI may be held liable for the acts of Mager, still, Spouses Viloria are not entitled to a refund. Mager's statement cannot be considered a causal fraud that would justify the annulment of the subject contracts that would oblige CAI to indemnify Spouses Viloria and return the money they paid for the subject tickets. Article 1390, in relation to Article 1391 of the Civil Code, provides that if the consent of the contracting parties was obtained through fraud, the contract is considered voidable and may be annulled within four (4) years from the time of the discovery of the fraud. Once a contract is annulled, the parties are obliged under Article 1398 of the same Code to restore to each other the things subject matter of the contract, including their fruits and interest. On the basis of the foregoing and given the allegation of Spouses Viloria that Fernando's consent to the subject contracts was supposedly secured by Mager through fraudulent means, it is plainly apparent that their demand for a refund is tantamount to seeking for an annulment of the subject contracts on the ground of vitiated consent. IDEHCa Whether the subject contracts are annullable, this Court is required to determine whether Mager's alleged misrepresentation constitutes causal fraud. Similar to the dispute on the existence of an agency, whether fraud attended the execution of a contract is factual in nature and this Court, as discussed above, may scrutinize the records if the findings of the CA are contrary to those of the RTC. Under Article 1338 of the Civil Code, there is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. In order that fraud may vitiate consent, it must be the causal (dolo causante), not merely the incidental (dolo incidente), inducement to the making of the contract. 30 In Samson v. Court of Appeals, 31 causal fraud was defined as "a deception employed by one party prior to or simultaneous to the contract in order to secure the consent of the other." 32 Also, fraud must be serious and its existence must be established by clear and convincing evidence. As ruled by this Court in Sierra v. Hon. Court of Appeals, et al., 33 mere preponderance of evidence is not adequate: Fraud must also be discounted, for according to the Civil Code: Art. 1338.There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which without them, he would not have agreed to. TCAScE Art. 1344.In order that fraud may make a contract voidable, it should be serious and should not have been employed by both contracting parties. To quote Tolentino again, the "misrepresentation constituting the fraud must be established by full, clear, and convincing evidence, and not merely by a preponderance thereof. The deceit must be serious. The fraud is serious when it is sufficient to impress, or to lead an ordinarily prudent person into error; that which cannot deceive a prudent person cannot be a ground for nullity. The circumstances of each case should be considered, taking into account the personal conditions of the victim." 34 After meticulously poring over the records, this Court finds that the fraud alleged by Spouses Viloria has not been satisfactorily established as causal in nature to warrant the annulment of the subject contracts. In fact, Spouses Viloria failed to prove by clear and convincing evidence that Mager's statement was fraudulent. Specifically, Spouses Viloria failed to prove that (a) there were indeed available seats at Amtrak for a trip to New Jersey on August 13, 1997 at the time they spoke with Mager on July 21, 1997; (b) Mager knew about this; and (c) that she purposely informed them otherwise. This Court finds the only proof of Mager's alleged fraud, which is Fernando's testimony that an Amtrak had assured him of the perennial availability of seats at Amtrak, to be wanting. As CAI correctly pointed out and as Fernando admitted, it was possible that during the intervening period of three (3) weeks from the time Fernando purchased the subject tickets to the time he talked to said Amtrak

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employee, other passengers may have cancelled their bookings and reservations with Amtrak, making it possible for Amtrak to accommodate them. Indeed, the existence of fraud cannot be proved by mere speculations and conjectures. Fraud is never lightly inferred; it is good faith that is. Under the Rules of Court, it is presumed that "a person is innocent of crime or wrong" and that "private transactions have been fair and regular." 35 Spouses Viloria failed to overcome this presumption. IV.Assuming the contrary, Spouses Viloria are nevertheless deemed to have ratified the subject contracts. Even assuming that Mager's representation is causal fraud, the subject contracts have been impliedly ratified when Spouses Viloria decided to exercise their right to use the subject tickets for the purchase of new ones. Under Article 1392 of the Civil Code, "ratification extinguishes the action to annul a voidable contract." Ratification of a voidable contract is defined under Article 1393 of the Civil Code as follows: Art. 1393.Ratification may be effected expressly or tacitly. It is understood that there is a tacit ratification if, with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has a right to invoke it should execute an act which necessarily implies an intention to waive his right. Implied ratification may take diverse forms, such as by silence or acquiescence; by acts showing approval or adoption of the contract; or by acceptance and retention of benefits flowing therefrom. 36 Simultaneous with their demand for a refund on the ground of Fernando's vitiated consent, Spouses Viloria likewise asked for a refund based on CAI's supposed bad faith in reneging on its undertaking to replace the subject tickets with a round trip ticket from Manila to Los Angeles. IEAaST In doing so, Spouses Viloria are actually asking for a rescission of the subject contracts based on contractual breach. Resolution, the action referred to in Article 1191, is based on the defendant's breach of faith, a violation of the reciprocity between the parties 37 and in Solar Harvest, Inc. v. Davao Corrugated Carton Corporation , 38 this Court ruled that a claim for a reimbursement in view of the other party's failure to comply with his obligations under the contract is one for rescission or resolution. However, annulment under Article 1390 of the Civil Code and rescission under Article 1191 are two (2) inconsistent remedies. In resolution, all the elements to make the contract valid are present; in annulment, one of the essential elements to a formation of a contract, which is consent, is absent. In resolution, the defect is in the consummation stage of the contract when the parties are in the process of performing their respective obligations; in annulment, the defect is already present at the time of the negotiation and perfection stages of the contract. Accordingly, by pursuing the remedy of rescission under Article 1191, the Vilorias had impliedly admitted the validity of the subject contracts, forfeiting their right to demand their annulment. A party cannot rely on the contract and claim rights or obligations under it and at the same time impugn its existence or validity. Indeed, litigants are enjoined from taking inconsistent positions. 39 V.Contracts cannot be rescinded for a slight or casual breach. CAI cannot insist on the non-transferability of the subject tickets. Considering that the subject contracts are not annullable on the ground of vitiated consent, the next question is: "Do Spouses Viloria have the right to rescind the contract on the ground of CAI's supposed breach of its undertaking to issue new tickets upon surrender of the subject tickets?" Article 1191, as presently worded, states: The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. IDSaTE The injured party may choose between the fulfilment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law. According to Spouses Viloria, CAI acted in bad faith and breached the subject contracts when it refused to apply the value of Lourdes' ticket for Fernando's purchase of a round trip ticket to Los Angeles and in requiring him to pay an amount higher than the price fixed by other airline companies. In its March 24, 1998 letter, CAI stated that "non-refundable tickets may be used as a form of payment toward the purchase of another Continental ticket for $75.00, per ticket, reissue fee ($50.00, per ticket, for tickets purchased prior to October 30, 1997)." Clearly, there is nothing in the above-quoted section of CAI's letter from which the restriction on the non-transferability of the subject tickets can be inferred. In fact, the words used by CAI in its letter supports the position of Spouses Viloria, that each of them can use the ticket under their name for the purchase of new tickets whether for themselves or for some other person. Moreover, as CAI admitted, it was only when Fernando had expressed his interest to use the subject tickets for the purchase of a round trip ticket between Manila and Los Angeles that he was informed that he cannot use the ticket in Lourdes' name as payment.

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Contrary to CAI's claim, that the subject tickets are non-transferable cannot be implied from a plain reading of the provision printed on the subject tickets stating that "[t]o the extent not in conflict with the foregoing carriage and other services performed by each carrier are subject to: (a) provisions contained in this ticket, . . . (iii) carrier's conditions of carriage and related regulations which are made part hereof (and are available on application at the offices of carrier) . . . ." As a common carrier whose business is imbued with public interest, the exercise of extraordinary diligence requires CAI to inform Spouses Viloria, or all of its passengers for that matter, of all the terms and conditions governing their contract of carriage. CAI is proscribed from taking advantage of any ambiguity in the contract of carriage to impute knowledge on its passengers of and demand compliance with a certain condition or undertaking that is not clearly stipulated. Since the prohibition on transferability is not written on the face of the subject tickets and CAI failed to inform Spouses Viloria thereof, CAI cannot refuse to apply the value of Lourdes' ticket as payment for Fernando's purchase of a new ticket. CAI's refusal to accept Lourdes' ticket for the purchase of a new ticket for Fernando is only a casual breach. Nonetheless, the right to rescind a contract for non-performance of its stipulations is not absolute. The general rule is that rescission of a contract will not be permitted for a slight or casual breach, but only for such substantial and fundamental violations as would defeat the very object of the parties in making the agreement. 40 Whether a breach is substantial is largely determined by the attendant circumstances. 41 While CAI's refusal to allow Fernando to use the value of Lourdes' ticket as payment for the purchase of a new ticket is unjustified as the non-transferability of the subject tickets was not clearly stipulated, it cannot, however be considered substantial. The endorsability of the subject tickets is not an essential part of the underlying contracts and CAI's failure to comply is not essential to its fulfillment of its undertaking to issue new tickets upon Spouses Viloria's surrender of the subject tickets. This Court takes note of CAI's willingness to perform its principal obligation and this is to apply the price of the ticket in Fernando's name to the price of the round trip ticket between Manila and Los Angeles. CAI was likewise willing to accept the ticket in Lourdes' name as full or partial payment as the case may be for the purchase of any ticket, albeit under her name and for her exclusive use. In other words, CAI's willingness to comply with its undertaking under its March 24, 1998 cannot be doubted, albeit tainted with its erroneous insistence that Lourdes' ticket is nontransferable. AaHcIT Moreover, Spouses Viloria's demand for rescission cannot prosper as CAI cannot be solely faulted for the fact that their agreement failed to consummate and no new ticket was issued to Fernando. Spouses Viloria have no right to insist that a single round trip ticket between Manila and Los Angeles should be priced at around $856.00 and refuse to pay the difference between the price of the subject tickets and the amount fixed by CAI. The petitioners failed to allege, much less prove, that CAI had obliged itself to issue to them tickets for any flight anywhere in the world upon their surrender of the subject tickets. In its March 24, 1998 letter, it was clearly stated that "[n]on-refundable tickets may be used as a form of payment toward the purchase of another Continental ticket" 42 and there is nothing in it suggesting that CAI had obliged itself to protect Spouses Viloria from any fluctuation in the prices of tickets or that the surrender of the subject tickets will be considered as full payment for any ticket that the petitioners intend to buy regardless of actual price and destination. The CA was correct in holding that it is CAI's right and exclusive prerogative to fix the prices for its services and it may not be compelled to observe and maintain the prices of other airline companies. 43 The conflict as to the endorsability of the subject tickets is an altogether different matter, which does not preclude CAI from fixing the price of a round trip ticket between Manila and Los Angeles in an amount it deems proper and which does not provide Spouses Viloria an excuse not to pay such price, albeit subject to a reduction coming from the value of the subject tickets. It cannot be denied that Spouses Viloria had the concomitant obligation to pay whatever is not covered by the value of the subject tickets whether or not the subject tickets are transferable or not. There is also no showing that Spouses Viloria were discriminated against in bad faith by being charged with a higher rate. The only evidence the petitioners presented to prove that the price of a round trip ticket between Manila and Los Angeles at that time was only $856.00 is a newspaper advertisement for another airline company, which is inadmissible for being "hearsay evidence, twice removed." Newspaper clippings are hearsay if they were offered for the purpose of proving the truth of the matter alleged. As ruled in Feria v. Court of Appeals,: 44 [N]ewspaper articles amount to "hearsay evidence, twice removed" and are therefore not only inadmissible but without any probative value at all whether objected to or not, unless offered for a purpose other than proving the truth of the matter asserted. In this case, the news article is admissible only as evidence that such publication does exist with the tenor of the news therein stated. 45 (citations omitted) The records of this case demonstrate that both parties were equally in default; hence, none of them can seek judicial redress for the cancellation or resolution of the subject contracts and they are therefore bound to their respective obligations thereunder. As the 1st sentence of Article 1192 provides: Art. 1192.In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages. (emphasis supplied) Therefore, CAI's liability for damages for its refusal to accept Lourdes' ticket for the purchase of Fernando's round trip ticket is offset by Spouses Viloria's liability for their refusal to pay the amount, which is not covered by the subject tickets. Moreover, the contract between them remains, hence, CAI is duty bound to issue new tickets for a destination chosen by Spouses Viloria upon their surrender of the subject tickets and Spouses Viloria are obliged to pay whatever amount is not covered by the value of the subject tickets. This Court made a similar ruling in Central Bank of the Philippines v. Court of Appeals. 46 Thus: Since both parties were in default in the performance of their respective reciprocal obligations, that is, Island Savings Bank failed to comply with its obligation to furnish the entire loan and Sulpicio M. Tolentino failed to comply with his obligation to pay his P17,000.00 debt within 3 years as stipulated, they are both liable for damages. Article 1192 of the Civil Code provides that in case both parties have committed a breach of their reciprocal obligations, the liability of the first infractor shall be equitably tempered by the courts. WE rule that the liability of

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Island Savings Bank for damages in not furnishing the entire loan is offset by the liability of Sulpicio M. Tolentino for damages, in the form of penalties and surcharges, for not paying his overdue P17,000.00 debt. . . . . 47 Another consideration that militates against the propriety of holding CAI liable for moral damages is the absence of a showing that the latter acted fraudulently and in bad faith. Article 2220 of the Civil Code requires evidence of bad faith and fraud and moral damages are generally not recoverable in culpa contractual except when bad faith had been proven. 48 The award of exemplary damages is likewise not warranted. Apart from the requirement that the defendant acted in a wanton, oppressive and malevolent manner, the claimant must prove his entitlement to moral damages. 49 HDAECI WHEREFORE, premises considered, the instant Petition is DENIED. SO ORDERED.

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[G.R. No. L-25142. March 25, 1975.] PHILIPPINE RABBIT BUS LINES, INC. and FELIX PANGALANGAN, plaintiffs-appellants, vs. PHIL-AMERICAN FORWARDERS, INC., ARCHIMEDES J. BALINGIT and FERNANDO PINEDA, defendants-appellees.

Angel A. Sison for plaintiffs-appellants. Fidel Zosimo U. Canilao for defendants-appellees.

SYNOPSIS As a result of a vehicular accident, complaint for damages based on culpa-aquitiana was filed against the Phil-American Forwarders, Inc., Fernando Pineda, and Balingit as manager of the company. The trial court dismissed the complaint against Balingit on the ground that he is not the manager of an establishment contemplated in Article 2180 of the Civil Code making owners and managers of an establishment responsible for damages caused by their employees, since Balingit himself may be regarded as an employee of the PhilAmerican Forwarders, Inc. On appeal, plaintiffs urged that the veil of corporate fiction should be pierced, the Phil-American Forwarders Inc. being merely a business conduit of Balingit, since he and his wife are the controlling stockholders. The Supreme Court held that this issue cannot be entertained on appeal, because it was not raised in the lower court. Order of dismissal affirmed.

SYLLABUS 1.QUASI-DELICT; EMPLOYER AND EMPLOYEES; "EMPLOYER" AND "OWNER AND MANAGER OF ESTABLISHMENT OF ENTERPRISE" DO NOT INCLUDE MANAGER OF CORPORATION. The terms "employer" and "owner and manager of establishment or enterprise" as used in Article 2180 of the Civil Code do not include the manager of a corporation owning a truck the reckless operation of which allegedly resulted in the vehicular accident from which the damage arose. 2.WORDS AND PHRASES; "MANAGER" UNDER SEC. 2180 OF CIVIL CODE USED IN THE SENSE OF "EMPLOYER". Under Article 2180 the term "manager" is used in the sense of "employer" and does not embrace a "manager" who may himself be regarded as an employee or dependiente of his employer. 3.APPEAL; ISSUES NOT RAISED IN THE LOWER COURT CANNOT BE ENTERTAINED ON APPEAL. A new factual issue injected in the brief which was not alleged in the complaint or raised in the trial court cannot be entertained on appeal. An appeal has to be decided on the basis of the pleadings filed in the trial court, and appellants can ventilate on appeal only those legal issues raised in the lower court and those within the issues framed by the parties. 4.ID.; ID.; CHANGE OF THEORY; PARTY-LITIGANT CANNOT BE ALLOWED TO CHANGE THEORY OF CASE ON APPEAL. When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not be permitted to change his theory on appeal because that would be unfair to the adverse party.

DECISION

AQUINO, J p: Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law from the order of the Court of First Instance of Tarlac, dismissing their complaint against Archimedes J. Balingit. The dismissal was based on the ground that Balingit as the manager of Phil-American Forwarders, Inc., which together with Fernando Pineda and Balingit, was sued for damages in an action based on quasi-delict or culpa aquiliana is not the manager of an establishment contemplated in article 2180 of the Civil Code (Civil Case No. 3865). In the complaint for damages filed by the bus company and Pangalangan against Phil-American Forwarders, Inc., Balingit and Pineda, it was alleged that on November 24, 1962, Pineda drove recklessly a freight truck, owned by Phil-American Forwarders, Inc., along the national highway at Sto. Tomas, Pampanga. The truck bumped the bus driven by Pangalangan, which was owned by Philippine Rabbit Bus Lines, Inc. As a result of the bumping, Pangalangan suffered injuries and the bus was damaged and could not be used for seventynine days, thus depriving the company of earnings amounting to P8,665.51. Balingit was the manager of Phil-American Forwarders, Inc. Among the defenses interposed by the defendants in their answer was that Balingit was not Pineda's employer. Balingit moved that the complaint against him be dismissed on the ground that the bus company and the bus driver had no cause of action against him. As already stated, the lower court dismissed the action as to Balingit. The bus company and its driver appealed. The Civil Code provides:

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"ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. "ART. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xxx xxx xxx "The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. "Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. xxx xxx xxx "The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. (1903a)" The novel and unprecedented legal issue in this appeal is whether the terms "employers" and "owners and managers of an establishment or enterprise" (dueos o directores de un establicimiento o empresa ) used in article 2180 of the Civil Code, formerly article 1903 of the old Code, embrace the manager of a corporation owning a truck, the reckless operation of which allegedly resulted in the vehicular accident from which the damage arose. We are of the opinion that those terms do not include the manager of a corporation. It may be gathered from the context of article 2180 that the term "manager" ("director" in the Spanish version) is used in the sense of "employer". Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be fastened on Balingit as manager of PhilAmerican Forwarders, Inc., in connection with the vehicular accident already mentioned because he himself may be regarded as an employee or dependiente of his employer, Phil-American Forwarders, Inc. Thus, it was held "que es dependiente, a los efectos de la responsabilidad subsidiaria establecida en el num. 3.x del (art.) 1903, el director de un periodico explotado por una sociedad, porque cualquiera que sea su jerarqu!a, y aunque lleve la direccin de determinadas convicciones politicas, no por eso deja de estar subordinado a la superior autoridad de la Empresa" (Decision of Spanish Supreme Court dated December 6, 1912 cited in 12 Manresa, Codigo Civil Espaol, 5th Ed. 662; 1913 Enciclopedia Juridica Espaola 992). The bus company and its driver, in their appellants' brief, injected a new factual issue which was not alleged in their complaint. They argue that Phil-American Forwarders, Inc. is merely a business conduit of Balingit because out of its capital stock with a par value of P41,200, Balingit and his wife had subscribed P40,000 and they paid P10,000 on their subscription, while the other incorporators, namely, Rodolfo Limjuco, Ponciano Caparas and Rafael Suntay paid P250.25 and P25, respectively. That argument implies that the veil of corporate fiction should be pierced and that Phil-American Forwarders, Inc. and Balingit and his wife should be treated as one and the same civil personality. We cannot countenance that argument in this appeal. It was not raised in the lower court. The case has to be decided on the basis of the pleadings filed in the trial court where it was assumed that Phil-American Forwarders, Inc. has a personality separate and distinct from that of the Balingit spouses. The legal issue, which the plaintiffs-appellants can ventilate in this appeal, is one which was raised in the lower court and which is within the issues framed by the parties (Sec. 18, Rule 46, Rules of Court). When a party deliberately adopts a certain theory and the case is decided upon that theory in the court below, he will not be permitted to change his theory on appeal because, to permit him to do so, would be unfair to the adverse party (2 Moran's Comments on the Rules of Court, 1970 Ed. p. 505). WHEREFORE, the lower court's order of dismissal is affirmed. Costs against the plaintiffs-appellants. SO ORDERED.

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[G.R. No. 132266. December 21, 1999.] CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU DOCTORS' HOSPITAL, INC., respondents.

Angara Abello Concepcion Regala & Cruz for petitioner. Fernan Mercado Cordero Dela Torre & Bael for respondent CDH. Expedito Bugarin for J.B. Abad. Rolindo A. Navarro for respondents Vasquez, Jr. & So Vasquez.

SYNOPSIS Benjamin Abad, manager of petitioner herein, was driving a company owned car which collided with the motorcycle driven by Romeo So Vasquez, which caused the latter's death. A criminal case was filed against Abad, which was subsequently dismissed. Vasquez's parents then commenced an action for damages against Abad and Castilex Industrial Corporation. The trial court ruled in favor of private respondents spouses and ordered Abad and petitioner herein to pay jointly and solidarily. Castilex and Abad separately appealed the decision. The Court of Appeals affirmed the ruling of the trial court holding Abad and Castilex liable but held that the liability of the latter is "only vicarious and not solidary" with the former. Hence, Castilex filed the instant petition. The pivotal issue in this petition is whether an employer may be held liable for the death resulting from the negligent operation by a managerial employee of a company-issued vehicle. cAHIaE The Supreme Court granted the petition. Petitioner Castilex Industrial Corporation was absolved of any liability for the damages caused by its employee. The mere fact that Abad was using a service vehicle at the time of the injurious incident is not of itself sufficient to charge petitioner corporation with liability for the negligent operation of said vehicle unless it appears that he was operating the vehicle within the course or scope of his employment. However, at the time of the vehicular accident, Abad was engaged in affairs of his own or was carrying out a personal purpose not in line with his duties. Hence, petitioner had no duty to show that it exercised the diligence of a good father of a family in providing Abad with a service vehicle. Thus, justice and equity require that petitioner be relieved of vicarious liability for the consequences of the negligence of Abad in driving its vehicle.

SYLLABUS 1.REMEDIAL LAW; CIVIL PROCEDURE; APPEAL BY CERTIORARI TO THE SUPREME COURT; CONTENTS OF PETITION; MATERIAL DATES REQUIRED. As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the same is unfounded. The material dates required to be stated in the petition are the following: (1) the date of receipt of the judgment or final order or resolution subject of the petition; (2) the date of filing of a motion for new trial or reconsideration, if any; and (3) the date of receipt of the notice of the denial of the motion. Contrary to private respondent's claim, the petition need not indicate the dates of the expiration of the original reglementary period and the filing of a motion for extension of time to file the petition. At any rate, aside from the material dates required under Section 4 of Rule 45, petitioner CASTILEX also stated in the first page of the petition the date it filed the motion for extension of time to file the petition. 2.CIVIL LAW; SPECIAL CONTRACTS; TORTS COMMITTED BY EMPLOYEE; LIABILITY OF EMPLOYER; NO HARD AND FAST RULE WHETHER ACT DONE BY EMPLOYEE IS IN FURTHERANCE OF EMPLOYER'S BUSINESS. No absolutely hard and fast rule can be stated which will furnish the complete answer to the problem of whether at a given moment, an employee is engaged in his employer's business in the operation of a motor vehicle, so as to fix liability upon the employer because of the employee's action or inaction; but rather, the result varies with each state of facts. In Filamer Christian Institute v. Intermediate Appellate Court, (212 SCRA 637, 643 [1992]) this Court had the occasion to hold that acts done within the scope of the employee's assigned tasks includes "any act done by an employee in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damages." 3.ID.; ID.; ID.; ART. 2180, NEW CIVIL CODE; LIABILITY OF EMPLOYER DISTINGUISHED. A distinction must be made between the fourth and fifth paragraph of Article 2180 of the Civil Code to determine what is applicable. Both provisions apply to employers: the fourth paragraph, to owners and managers of an establishment or enterprise; and the fifth paragraph, to employers in general, whether or not engaged in any business or industry. The fourth paragraph covers negligent acts of employees committed either in the service of the branches or on the occasion of their functions, while the fifth paragraph encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty. Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is liable for the torts committed by employees within the scope of his assigned tasks. But it is necessary to establish the employer-employee relationship; once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the scope of his assigned task when the tort complained of was committed. It is only then that the employer may find it necessary to interpose the defense of due diligence in the selection and supervision of the employee. 4.REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE COURT OF APPEALS ARE GENERALLY ENTITLED TO GREAT RESPECT; EXCEPTIONS; PRESENT IN CASE AT BAR. Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are entitled to great respect, and even finality at times. This rule is, however, subject to exceptions such as when the conclusion is grounded on speculations, surmises, or conjectures. Such exception obtain in the present case to warrant review by this Court of the finding of the Court of Appeals that since ABAD was driving petitioner's vehicle he was acting within the scope of his

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duties as a manager. . . . Contrary to the ruling of the Court of Appeals, it was not incumbent upon the petitioner to prove that ABAD was not acting within the scope of his assigned tasks at the time of the motor vehicle mishap. It was enough for petitioner CASTILEX to deny that ABAD was acting within the scope of his duties; petitioner was not under obligation to prove this negative averment. Ei incumbit probatio qui dicit, non qui negat (He who asserts, not he who denies, must prove). The Court has consistently applied the ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner facts which he bases his claim, the defendant is under no obligation to prove his exception or defense. Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a good father of a family in providing ABAD with a service vehicle. Thus, justice and equity require that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD in driving its vehicle. DCASEc

DECISION

DAVIDE, JR., C.J p: The pivotal issue in this petition is whether an employer may be held vicariously liable for the death resulting from the negligent operation by a managerial employee of a company-issued vehicle. cdll The antecedents, as succinctly summarized by the Court of Appeals, are as follows: On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was driving a Honda motorcycle around Fuente Osmea Rotunda. He was traveling counter-clockwise, (the normal flow of traffic in a rotunda) but without any protective helmet or goggles. He was also only carrying a Student's Permit to Drive at the time. Upon the other hand, Benjamin Abad [was a] manager of Appellant Castilex Industrial Corporation, registered owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same date and time, Abad drove the said company car out of a parking lot but instead of going around the Osmea rotunda he made a short cut against [the] flow of the traffic in proceeding to his route to General Maxilom St. or to Belvic St. In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each other causing severe injuries to the former. Abad stopped his vehicle and brought Vasquez to the Southern Islands Hospital and later to the Cebu Doctor's Hospital. On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was there that Abad signed an acknowledgment of Responsible Party (Exhibit K) wherein he agreed to pay whatever hospital bills, professional fees and other incidental charges Vasquez may incur. cdrep After the police authorities had conducted the investigation of the accident, a Criminal Case was filed against Abad but which was subsequently dismissed for failure to prosecute. So, the present action for damages was commenced by Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the deceased Romeo So Vasquez, against Jose Benjamin Abad and Castilex Industrial Corporation. In the same action, Cebu Doctor's Hospital intervened to collect unpaid balance for the medical expense given to Romeo So Vasquez. 1 The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation (hereafter CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the amounts of P8,000.00 for burial expenses; P50,000.00 as moral damages; P10,000.00 as attorney's fees; and P778,752.00 for loss of earning capacity; and (2) Cebu Doctor's Hospital, the sum of P50,927.83 for unpaid medical and hospital bills at 3% monthly interest from 27 July 1989 until fully paid, plus the costs of litigation. 2

CASTILEX and ABAD separately appealed the decision. In its decision 3 of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court holding ABAD and CASTILEX liable but held that the liability of the latter is "only vicarious and not solidary" with the former. It reduced the award of damages representing loss of earning capacity from P778,752.00 to P214,156.80; and the interest on the hospital and medical bills, from 3% per month to 12% per annum from 5 September 1988 until fully paid. Upon CASTILEX's motion for reconsideration, the Court of Appeals modified its decision by (1) reducing the award of moral damages from P50,000 to P30,000 in view of the deceased's contributory negligence; (b) deleting the award of attorney's fees for lack of evidence; and (c) reducing the interest on hospital and medical bills to 6% per annum from 5 September 1988 until fully paid. 4 Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1) applying to the case the fifth paragraph of Article 2180 of the Civil Code, instead of the fourth paragraph thereof; (2) that as a managerial employee, ABAD was deemed to have been always acting within the scope of his assigned task even outside office hours because he was using a vehicle issued to him by petitioner; and (3) ruling that petitioner had the burden to prove that the employee was not acting within the scope of his assigned task. LLphil Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on the theory of negligence on the part of the deceased. On the other hand, respondents Spouses Vasquez argue that their son's death was caused by the negligence of petitioner's employee who was driving a vehicle issued by petitioner and who was on his way home from overtime work for petitioner; and that petitioner is

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thus liable for the resulting injury and subsequent death of their son on the basis of the fifth paragraph of Article 2180. Even if the fourth paragraph of Article 2180 were applied, petitioner cannot escape liability therefor. They moreover argue that the Court of Appeals erred in reducing the amount of compensatory damages when the award made by the trial court was borne both by evidence adduced during the trial regarding deceased's wages and by jurisprudence on life expectancy. Moreover, they point out that the petition is procedurally not acceptable on the following grounds: (1) lack of an explanation for serving the petition upon the Court of Appeals by registered mail, as required under Section 11, Rule 13 of the Rules of Civil Procedure; and (2) lack of a statement of the dates of the expiration of the original reglementary period and of the filing of the motion for extension of time to file a petition for review. For its part, respondent Cebu Doctor's Hospital maintains that petitioner CASTILEX is indeed vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by ABAD, who was on his way home from taking snacks after doing overtime work for petitioner. Although the incident occurred when ABAD was not working anymore "the inescapable fact remains that said employee would not have been situated at such time and place had he not been required by petitioner to do overtime work." Moreover, since petitioner adopted the evidence adduced by ABAD, it cannot, as the latter's employer, inveigle itself from the ambit of liability, and is thus estopped by the records of the case, which it failed to refute. We shall first address the issue raised by the private respondents regarding some alleged procedural lapses in the petition. Private respondent's contention of petitioner's violation of Section 11 of Rule 13 and Section 4 of Rule 45 of the 1997 Rules of Civil Procedure holds no water. Cdpr Section 11 of Rule 13 provides: SECTION 11.Priorities in modes of service and filing. Whenever practicable, the service and filing of pleadings and other papers shall be done personally. Except with respect to papers emanating from the court, a resort to other modes must be accompanied by a written explanation why the service or filing was not done personally. A violation of this Rule may be cause to consider the paper as not filed. The explanation why service of a copy of the petition upon the Court of Appeals was done by registered mail is found on Page 28 of the petition. Thus, there has been compliance with the aforequoted provision. As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the same is unfounded. The material dates required to be stated in the petition are the following: (1) the date of receipt of the judgment or final order or resolution subject of the petition; (2) the date of filing of a motion for new trial or reconsideration, if any; and (3) the date of receipt of the notice of the denial of the motion. Contrary to private respondent's claim, the petition need not indicate the dates of the expiration of the original reglementary period and the filing of a motion for extension of time to file the petition. At any rate, aside from the material dates required under Section 4 of Rule 45, petitioner CASTILEX also stated in the first page of the petition the date it filed the motion for extension of time to file the petition. Now on the merits of the case. The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said negligence but claims that it is not vicariously liable for the injuries and subsequent death caused by ABAD. Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to instances where the employer is not engaged in business or industry. Since it is engaged in the business of manufacturing and selling furniture it is therefore not covered by said provision. Instead, the fourth paragraph should apply. cdasia Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though the former are not engaged in any business or industry" found in the fifth paragraph should be interpreted to mean that it is not necessary for the employer to be engaged in any business or industry to be liable for the negligence of his employee who is acting within the scope of his assigned task. 5 A distinction must be made between the two provisions to determine what is applicable. Both provisions apply to employers: the fourth paragraph, to owners and managers of an establishment or enterprise; and the fifth paragraph, to employers in general, whether or not engaged in any business or industry. The fourth paragraph covers negligent acts of employees committed either in the service of the branches or on the occasion of their functions, while the fifth paragraph encompasses negligent acts of employees acting within the scope of their assigned task. The latter is an expansion of the former in both employer coverage and acts included. Negligent acts of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were acting within the scope of their assigned task, even though committed neither in the service of the branches nor on the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions which are beyond their office, title or designation but which, nevertheless, are still within the call of duty. This court has applied the fifth paragraph to cases where the employer was engaged in a business or industry such as truck operators 6 and banks. 7 The Court of Appeals cannot, therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to this case. Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry, an employer is liable for the torts committed by employees within the scope of his assigned tasks. But it is necessary to establish the employer-employee relationship; once this is done, the plaintiff must show, to hold the employer liable, that the employee was acting within the scope of his assigned task when the tort complained of was committed. It is only then that the employer may find it necessary to interpose the defense of due diligence in the selection and supervision of the employee. 8 It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of the tort occurrence. As to whether he was acting within the scope of his assigned task is a question of fact, which the court a quo and the Court of Appeals resolved in the affirmative.

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Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are entitled to great respect, and even finality at times. This rule is, however, subject to exceptions such as when the conclusion is grounded on speculations, surmises, or conjectures. 9 Such exception obtain in the present case to warrant review by this Court of the finding of the Court of Appeals that since ABAD was driving petitioner's vehicle he was acting within the scope of his duties as a manager. Before we pass upon the issue of whether ABAD was performing acts within the range of his employment, we shall first take up the other reason invoked by the Court of Appeals in holding petitioner CASTILEX vicariously liable for ABAD's negligence, i.e., that the petitioner did not present evidence that ABAD was not acting within the scope of his assigned tasks at the time of the motor vehicle mishap. Contrary to the ruling of the Court of Appeals, it was not incumbent upon the petitioner to prove the same. It was enough for petitioner CASTILEX to deny that ABAD was acting within the scope of his duties; petitioner was not under obligation to prove this negative averment. Ei incumbit probatio qui dicit, non qui negat (He who asserts, not he who denies, must prove). The Court has consistently applied the ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner facts which he bases his claim, the defendant is under no obligation to prove his exception or defense. 10

Now on the issue of whether the private respondents have sufficiently established that ABAD was acting within the scope of his assigned tasks. llcd ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving a company-issued vehicle, registered under the name of petitioner. He was then leaving the restaurant where he had some snacks and had a chat with his friends after having done overtime work for the petitioner. No absolutely hard and fast rule can be stated which will furnish the complete answer to the problem of whether at a given moment, an employee is engaged in his employer's business in the operation of a motor vehicle, so as to fix liability upon the employer because of the employee's action or inaction; but rather, the result varies with each state of facts. 11 In Filamer Christian Institute v. Intermediate Appellate Court, 12 this Court had the occasion to hold that acts done within the scope of the employee's assigned tasks includes "any act done by an employee in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damages." The court a quo and the Court of Appeals were one in holding that the driving by a manager of a company-issued vehicle is within the scope of his assigned tasks regardless of the time and circumstances. We do not agree. The mere fact that ABAD was using a service vehicle at the time of the injurious incident is not of itself sufficient to charge petitioner with liability for the negligent operation of said vehicle unless it appears that he was operating the vehicle within the course or scope of his employment. The following are principles in American Jurisprudence on the employer's liability for the injuries inflicted by the negligence of an employee in the use of an employer's motor vehicle: I.Operation of Employer's Motor Vehicle in Going to or from Meals It has been held that an employee who uses his employer's vehicle in going from his work to a place where he intends to eat or in returning to work from a meal is not ordinarily acting within the scope of his employment in the absence of evidence of some special business benefit to the employer. Evidence that by using the employer's vehicle to go to and from meals, an employee is enabled to reduce his time-off and so devote more time to the performance of his duties supports the finding that an employee is acting within the scope of his employment while so driving the vehicle. 13 II.Operation of Employer's Vehicle in Going to or from Work In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of the employee, and not a part of his services to his employer. Hence, in the absence of some special benefit to the employer other than the mere performance of the services available at the place where he is needed, the employee is not acting within the scope of his employment even though he uses his employer's motor vehicle. 14 cda The employer may, however, be liable where he derives some special benefit from having the employee drive home in the employer's vehicle as when the employer benefits from having the employee at work earlier and, presumably, spending more time at his actual duties. Where the employee's duties require him to circulate in a general area with no fixed place or hours of work, or to go to and from his home to various outside places of work, and his employer furnishes him with a vehicle to use in his work, the courts have frequently applied what has been called the "special errand" or "roving commission" rule, under which it can be found that the employee continues in the service of his employer until he actually reaches home. However, even if the employee be deemed to be acting within the scope of his employment in going to or from work in his employer's vehicle, the employer is not liable for his negligence where at the time of the accident, the employee has left the direct route to his work or back home and is pursuing a personal errand of his own. III.Use of Employer's Vehicle Outside Regular Working Hours An employer who loans his motor vehicle to an employee for the latter's personal use outside of regular working hours is generally not liable for the employee's negligent operation of the vehicle during the period of permissive use, even where the employer contemplates that a regularly assigned motor vehicle will be used by the employee for personal as well as business purposes and there is some incidental benefit to the employer. Even where the employee's personal purpose in using the vehicle has been accomplished and he has started the return trip to his house where the vehicle is normally kept, it has been held that he has not resumed his employment, and the employer is not liable for the employee's negligent operation of the vehicle during the return trip. 15

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The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine of respondeat superior, not on the principle of bonus pater familias as in ours. Whether the fault or negligence of the employee is conclusive on his employer as in American law or jurisprudence, or merely gives rise to the presumption juris tantum of negligence on the part of the employer as in ours, it is indispensable that the employee was acting in his employer's business or within the scope of his assigned task. 16 In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in Fuente Osmea, Cebu City, which is about seven kilometers away from petitioner's place of business. 17 A witness for the private respondents, a sidewalk vendor, testified that Fuente Osmea is a "lively place" even at dawn because Goldie's Restaurant and Back Street were still open and people were drinking thereat. Moreover, prostitutes, pimps, and drug addicts littered the place. 18 At the Goldie's Restaurant, ABAD took some snacks and had a chat with friends. It was when ABAD was leaving the restaurant that the incident in question occurred. That same witness for the private respondents testified that at the time of the vehicular accident, ABAD was with a woman in his car, who then shouted: "Daddy, Daddy!" 19 This woman could not have been ABAD's daughter, for ABAD was only 29 years old at the time. To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal purpose not in line with his duties at the time he figured in a vehicular accident. It was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD's working day had ended; his overtime work had already been completed. His being at a place which, as petitioner put it, was known as a "haven for prostitutes, pimps, and drug pushers and addicts," had no connection to petitioner's business; neither had it any relation to his duties as a manager. Rather, using his service vehicle even for personal purposes was a form of a fringe benefit or one of the perks attached to his position. cdtai Since there is paucity of evidence that ABAD was acting within the scope of the functions entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a good father of a family in providing ABAD with a service vehicle. Thus, justice and equity require that petitioner be relieved of vicarious liability for the consequences of the negligence of ABAD in driving its vehicle. 20 WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the Court of Appeals is AFFIRMED with the modification that petitioner Castilex Industrial Corporation be absolved of any liability for the damages caused by its employee, Jose Benjamin Abad. SO ORDERED.

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34

G.R. No. 179382

January 14, 2013

SPOUSES BENJAMIN C. MAMARIL AND SONIA P. MAMARIL, Petitioners, vs. * THE BOY SCOUT OF THE PHILIPPINES, AIB SECURITY AGENCY, INC., CESARIO PEA, AND VICENTE GADDI, Respondents. DECISION PERLAS-BERNABE, J.: This is a Petition for Review on Certiorari assailing the May 31, 2007 Decision and August 16, 2007 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 75978. The dispositive portion of the said Decision reads: WHEREFORE, the Decision dated November 28, 2001 and the Order dated June 11, 2002 rendered by the Regional Trial Court of Manila, Branch 39 is hereby MODIFIED to the effect that only defendants AIB Security Agency, Inc., Cesario Pea and Vicente Gaddi are held jointly and severally liable to pay plaintiffs-appellees Spouses Benjamin C. Mamaril and Sonia P. Mamaril the amount of Two Hundred Thousand Pesos (P200,000.00) representing the cost of the lost vehicle, and to pay the cost of suit. The other monetary awards are DELETED for lack of merit and/or basis. Defendant-Appellant Boy Scout of the Philippines is absolved from any liability. SO ORDERED.
3 1 2

The Antecedent Facts Spouses Benjamin C. Mamaril and Sonia P. Mamaril (Sps. Mamaril) are jeepney operators since 1971. They would park their six (6) passenger jeepneys every night at the Boy Scout of the Philippines' (BSP) compound located at 181 Concepcion Street, Malate, Manila for a fee of P300.00 per month for each unit. On May 26, 1995 at 8 o'clock in the evening, all these vehicles were parked inside the 4 BSP compound. The following morning, however, one of the vehicles with Plate No. DCG 392 was missing and was never recovered. According to the security guards Cesario Pea (Pea) and Vicente Gaddi (Gaddi) of AIB Security Agency, Inc. (AIB) with whom BSP 5 had contracted for its security and protection, a male person who looked familiar to them took the subject vehicle out of the compound. On November 20, 1996, Sps. Mamaril filed a complaint for damages before the Regional Trial Court (RTC) of Manila, Branch 39, against BSP, AIB, Pea and Gaddi. In support thereof, Sps. Mamaril averred that the loss of the subject vehicle was due to the gross negligence of the above-named security guards on-duty who allowed the subject vehicle to be driven out by a stranger despite their agreement that only authorized drivers duly endorsed by the owners could do so. Pea and Gaddi even admitted their negligence during the ensuing investigation. Notwithstanding, BSP and AIB did not heed Sps. Mamaril's demands for a conference to settle the matter. They therefore prayed that Pea and Gaddi, together with AIB and BSP, be held liable for: (a) the value of the subject vehicle and its accessories in the aggregate amount of P300,000.00; (b) P275.00 representing daily loss of income/boundary reckoned from the day the vehicle was lost; (c) exemplary damages; (d) moral damages; (e) attorney's fees; and (f) cost of suit. In its Answer, BSP denied any liability contending that not only did Sps. Mamaril directly deal with AIB with respect to the manner by 8 which the parked vehicles would be handled, but the parking ticket itself expressly stated that the "Management shall not be responsible for loss of vehicle or any of its accessories or article left therein." It also claimed that Sps. Mamaril erroneously relied on the Guard Service Contract. Apart from not being parties thereto, its provisions cover only the protection of BSP's properties, its officers, and employees. In addition to the foregoing defenses, AIB alleged that it has observed due diligence in the selection, training and supervision of its security guards while Pea and Gaddi claimed that the person who drove out the lost vehicle from the BSP compound represented himself as the owners' authorized driver and had with him a key to the subject vehicle. Thus, they contended that Sps. Mamaril have no cause of action against them. The RTC Ruling After due proceedings, the RTC rendered a Decision dated November 28, 2001 in favor of Sps. Mamaril. The dispositive portion of the RTC decision reads: WHEREFORE, judgment is hereby rendered ordering the defendants Boy Scout of the Philippines and AIB Security Agency, with security guards Cesario Pena and Vicente Gaddi: 1. To pay the plaintiffs jointly and severally the cost of the vehicle which is P250,000.00 plus accessories of P50,000.00; 2. To pay jointly and severally to the plaintiffs the daily loss of the income/boundary of the said jeepney to be reckoned fromits loss up to the final adjudication of the case, which is P275.00 a day; 3. To pay jointly and severally to the plaintiffs moral damages in the amount of P50,000.00; 4. To pay jointly and severally to the plaintiffs exemplary damages in the amount of P50,000.00; 5. To pay jointly and severally the attorney's fees of P50,000.00 and appearances in court the amount of P1,500.00 per appearance; and 6. To pay cost.
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SO ORDERED.

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The RTC found that the act of Pea and Gaddi in allowing the entry of an unidentified person and letting him drive out the subject vehicle in violation of their internal agreement with Sps. Mamaril constituted gross negligence, rendering AIB and its security guards liable for the former's loss. BSP was also adjudged liable because the Guard Service Contract it entered into with AIB offered protection to all properties inside the BSP premises, which necessarily included Sps. Mamaril's vehicles. Moreover, the said contract stipulated AIB's obligation to indemnify BSP for all losses or damages that may be caused by any act or negligence of its security guards. Accordingly, the BSP, AIB, and security guards Pea and Gaddi were held jointly and severally liable for the loss suffered by Sps. Mamaril. On June 11, 2002, the RTC modified its decision reducing the cost of the stolen vehicle from P250,000.00 to P200,000.00. Only BSP appealed the foregoing disquisition before the CA. The CA Ruling In its assailed Decision, the CA affirmed the finding of negligence on the part of security guards Pea and Gaddi. However, it absolved BSP from any liability, holding that the Guard Service Contract is purely between BSP and AIB and that there was nothing therein that would indicate any obligation and/or liability on the part of BSP in favor of third persons, such as Sps. Mamaril. Nor was there evidence sufficient to establish that BSP was negligent. It further ruled that the agreement between Sps. Mamaril and BSP was substantially a contract of lease whereby the former paid parking fees to the latter for the lease of parking slots. As such, the lessor, BSP, was not an insurer nor bound to take care and/or protect the lessees' vehicles. On the matter of damages, the CA deleted the award of P50,000.00 representing the value of the accessories inside the lost vehicle and the P275.00 a day for loss of income in the absence of proof to support them. It also deleted the award of moral and exemplary damages and attorney's fees for lack of factual and legal bases. Sps. Mamaril's motion for reconsideration thereof was denied in the August 16, 2007 Resolution. Issues Before the Court Hence, the instant petition based on the following assignment of errors, to wit: I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ABSOLVING RESPONDENT BOY SCOUT OF THE PHILIPPINES FROM ANY LIABILITY. II. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS MISTAKE WHEN IT RULED THAT THE GUARD SERVICE CONTRACT IS PURELY BETWEEN BOY SCOUT OF THE PHILIPPINES AND AIB SECURITY AGENCY, INC., AND IN HOLDING THAT THERE IS ABSOLUTELY NOTHING IN THE SAID CONTRACT THAT WOULD INDICATE ANY OBLIGATION AND/OR LIABILITY ON THE PART OF THE PARTIES THEREIN IN FAVOR OF THIRD PERSONS, SUCH AS PETITIONERS HEREIN. III. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN THE INTERPRETATION OF LAW WHEN IT CONSIDERED THE AGREEMENT BETWEEN BOY SCOUT OF THE PHILIPPINES AND PETITIONERS A CONTRACT OF LEASE, WHEREBY THE BOY SCOUT IS NOT DUTY BOUND TO PROTECT OR TAKE CARE OF PETITIONERS' VEHICLES. IV. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED THAT PETITIONERS ARE NOT 14 ENTITLED TO DAMAGES AND ATTORNEY'S FEES. In fine, Sps. Mamaril maintain that: (1) BSP should be held liable for the loss of their vehicle based on the Guard Service Contract and the parking ticket it issued; and (2) the CA erred in deleting the RTC awards of damages and attorney's fees. The Court's Ruling The petition lacks merit. Article 20 of the Civil Code provides that every person, who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the same. Similarly, Article 2176 of the Civil Code states:
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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 preexisting contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. In this case, it is undisputed that the proximate cause of the loss of Sps. Mamaril's vehicle was the negligent act of security guards Pea and Gaddi in allowing an unidentified person to drive out the subject vehicle. Proximate cause has been defined as that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury or loss, and without which 15 the result would not have occurred. Moreover, Pea and Gaddi failed to refute Sps. Mamaril's contention that ensued.
16

that they readily admitted being at fault during the investigation

On the other hand, the records are bereft of any finding of negligence on the part of BSP. Hence, no reversible error was committed by the CA in absolving it from any liability for the loss of the subject vehicle based on fault or negligence. Neither will the vicarious liability of an employer under Article 2180 of the Civil Code apply in this case. It is uncontested that Pea and Gaddi were assigned as security guards by AIB to BSP pursuant to the Guard Service Contract. Clearly, therefore, no employeremployee relationship existed between BSP and the security guards assigned in its premises. Consequently, the latter's negligence 18 cannot be imputed against BSP but should be attributed to AIB, the true employer of Pea and Gaddi. In the case of Soliman, Jr. v. Tuazon,
19 17

the Court enunciated thus:

It is settled that where the security agency, as here, recruits, hires and assigns the work of its watchmen or security guards, the agency is the employer of such guards and watchmen. Liability for illegal or harmful acts committed by the security guards attaches to the employer agency, and not to the clients or customers of such agency. As a general rule, a client or customer of a security agency has no hand in selecting who among the pool of security guards or watchmen employed by the agency shall be assigned to it; the duty to observe the diligence of a good father of a family in the selection of the guards cannot, in the ordinary course of events, be demanded from the client whose premises or property are protected by the security guards. The fact that a client company may give instructions or directions to the security guards assigned to it, does not, by itself, render the client responsible as an employer of the security guards concerned and liable for their wrongful acts or omissions. Those instructions or directions are ordinarily no more than requests 20 commonly envisaged in the contract for services entered into with the security agency. Nor can it be said that a principal-agent relationship existed between BSP and the security guards Pea and Gaddi as to make the former liable for the latter's complained act. Article 1868 of the Civil Code states that "by the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter." The 21 basis for agency therefore is representation, which element is absent in the instant case. Records show that BSP merely hired the services of AIB, which, in turn, assigned security guards, solely for the protection of its properties and premises. Nowhere can it be inferred in the Guard Service Contract that AIB was appointed as an agent of BSP. Instead, what the parties intended was a pure principal-client relationship whereby for a consideration, AIB rendered its security services to BSP. Notwithstanding, however, Sps. Mamaril insist that BSP should be held liable for their loss on the basis of the Guard Service Contract that the latter entered into with AIB and their parking agreement with BSP. Such contention cannot be sustained. Article 1311 of the Civil Code states: Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent. If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person. Thus, in order that a third person benefited by the second paragraph of Article 1311, referred to as a stipulation pour autrui, may demand its fulfillment, the following requisites must concur: (1) There is a stipulation in favor of a third person; (2) The stipulation is a part, not the whole, of the contract; (3) The contracting parties clearly and deliberately conferred a favor to the third person - the favor is not merely incidental; (4) The favor is unconditional and uncompensated; (5) The third person communicated his or her acceptance of 22 the favor before its revocation; and (6) The contracting parties do not represent, or are not authorized, by the third party. However, none of the foregoing elements obtains in this case. It is undisputed that Sps. Mamaril are not parties to the Guard Service Contract. 1wphi1 Neither did the subject agreement contain any stipulation pour autrui. And even if there was, Sps. Mamaril did not convey any acceptance thereof. Thus, under the principle of 23 relativity of contracts, they cannot validly claim any rights or favor under the said agreement. As correctly found by the CA: First, the Guard Service Contract between defendant-appellant BSP and defendant AIB Security Agency is purely between the parties therein. It may be observed that although the whereas clause of the said agreement provides that defendant-appellant desires security and protection for its compound and all properties therein, as well as for its officers and employees, while inside the premises, the same should be correlated with paragraph 3(a) thereof which provides that the security agency shall indemnify defendant-appellant for all losses and damages suffered by it attributable to any act or negligence of the former's guards. Otherwise stated, defendant-appellant sought the services of defendant AIB Security Agency for the purpose of the security and protection of its properties, as well as that of its officers and employees, so much so that in case of loss of [sic] damage suffered by it as a result of any act or negligence of the guards, the security agency would then be held responsible therefor. There is absolutely nothing

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in the said contract that would indicate any obligation and/or liability on the part of the parties therein in favor of third persons such as 24 herein plaintiffs-appellees. Moreover, the Court concurs with the finding of the CA that the contract between the parties herein was one of lease as defined under 26 Article 1643 of the Civil Code. It has been held that the act of parking a vehicle in a garage, upon payment of a fixed amount, is a 27 lease. Even in a majority of American cases, it has been ruled that where a customer simply pays a fee, parks his car in any available space in the lot, locks the car and takes the key with him, the possession and control of the car, necessary elements in bailment, do not 28 pass to the parking lot operator, hence, the contractual relationship between the parties is one of lease. In the instant case, the owners parked their six (6) passenger jeepneys inside the BSP compound for a monthly fee of P300.00 for each unit and took the keys home with them. Hence, a lessor-lessee relationship indubitably existed between them and BSP. On this score, Article 1654 of the Civil Code provides that "the lessor (BSP) is obliged: (1) to deliver the thing which is the object of the contract in such a condition as to render it fit for the use intended; (2) to make on the same during the lease all the necessary repairs in order to keep it suitable for the use to which it has been devoted, unless there is a stipulation to the contrary; and (3) to maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of the contract." In relation thereto, Article 1664 of the same Code states that "the lessor is not obliged to answer for a mere act of trespass which a third person may cause on the use of the thing leased; but the lessee shall have a direct action against the intruder." Here, BSP was not remiss in its obligation to provide Sps. Mamaril a suitable parking space for their jeepneys as it even hired security guards to secure the premises; hence, it should not be held liable for the loss suffered by Sps. Mamaril. It bears to reiterate that the subject loss was caused by the negligence of the security guards in allowing a stranger to drive out plaintiffs-appellants' vehicle despite the latter's instructions that only their authorized drivers may do so. Moreover, the agreement with 29 respect to the ingress and egress of Sps. Mamaril's vehicles were coordinated only with AIB and its security guards, without the knowledge and consent of BSP. Accordingly, the mishandling of the parked vehicles that resulted in herein complained loss should be 30 recovered only from the tort feasors (Pea and Gaddi) and their employer, AIB; and not against the lessor, BSP. Anent Sps. Mamaril's claim that the exculpatory clause: "Management shall not be responsible for loss of vehicle or any of its 31 accessories or article left therein" contained in the BSP issued parking ticket was void for being a contract of adhesion and against public policy, suffice it to state that contracts of adhesion are not void per se. It is binding as any other ordinary contract and a party who enters into it is free to reject the stipulations in its entirety. If the terms thereof are accepted without objection, as in this case, 32 where plaintiffs-appellants have been leasing BSP's parking space for more or less 20 years, then the contract serves as the law 33 between them. Besides, the parking fee of P300.00 per month or P10.00 a day for each unit is too minimal an amount to even create an inference that BSP undertook to be an insurer of the safety of plaintiffs-appellants' vehicles. On the matter of damages, the Court noted that while Sonia P. Mamaril testified that the subject vehicle had accessories worth around 34 !J50,000.00, she failed to present any receipt to substantiate her claim. Neither did she submit any record or journal that would have 35 established the purported P275.00 daily earnings of their jeepney. It is axiomatic that actual damages must be proved with reasonable degree of certainty and a party is entitled only to such compensation for the pecuniary loss that was duly proven. Thus, absent any 36 competent proof of the amount of damages sustained, the CA properly deleted the said awards. Similarly, the awards of moral and exemplary damages and attorney's fees were properly disallowed by the CA for lack of factual and legal bases. While the RTC granted these awards in the dispositive portion of its November 28, 2001 decision, it failed to provide 37 sufficient justification therefor. WHEREFORE premises considered, the instant petition is DENIED. The May 31, 2007 Decision and August 16, 2007 Resolution of the Court of Appeals in CA-G.R. CV No. 75978 are AFFIRMFED. SO ORDERED.
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[G.R. No. 116624. September 20, 1996.] BALIWAG TRANSIT, INC., petitioner, vs. COURT OF APPEALS, DIVINA VDA. DE DIONISIO, for herself and in behalf of her minor children MARK ANGELO and MA. LIZA, both surnamed DIONISIO, respondents.

Sta. Maria and Associates for petitioner. Alfonso Osias for private respondents.

SYLLABUS 1.CIVIL LAW; EXTRA-CONTRACTUAL OBLIGATIONS; QUASI-DELICTS; EMPLOYER'S FAILURE TO PROVE THAT IT EXERCISED THE DUE DILIGENCE OF A GOOD FATHER OF A FAMILY IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEE WILL MAKE IT SOLIDARILY LIABLE WITH THE LATTER FOR DAMAGES. Article 2180, in relation to Art. 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. Petitioner's failure to prove that it exercised the due diligence of a good father of a family in the selection and supervision of its driver Juanito Fidel will make it solidarily liable with the latter for damages caused by him. 2.ID.; DAMAGES; FACTORS TO BE CONSIDERED IN FIXING THE AMOUNT OF DAMAGES FOR DEATH CAUSED BY A QUASIDELICT. As regards the reasonableness of the damages awarded, under Art. 1764, in conjunction with Art 2206, of the Civil Code, as well as established jurisprudence, several factors are considered, namely: (a) life expectancy (considering the health of the deceased and the mortality table being deemed conclusive) and loss of earning capacity; (b) pecuniary loss, loss of support and service; and, (c) moral and mental sufferings. The loss of earning capacity is based mainly on two factors, namely, the number of years on the basis of which the damages shall be computed, and the rate at which the loss sustained by the heirs should be fixed. 3.ID.; ID.; MORAL AND EXEMPLARY DAMAGES; ATTORNEY'S FEES; PROPER IN CASE AT BAR. Article 2206 grants the spouse, legitimate and illegitimate descendants and ascendants of the deceased moral damages for mental anguish by reason of death. Indisputably, the heirs of Mario suffered no small amount of mental anguish brought about by the manner he died and bearing in mind that he was the sole breadwinner of the family. Article 2231 also awards exemplary damages if the defendant acted with gross negligence, as Juanito did, when he moved Bus No. 117 without first ascertaining if the repair of its break system was already undertaken. Exemplary damages having been awarded, recovery of attorney's fees follows under Art. 2208, par. (1), of the Civil Code.

DECISION

BELLOSILLO, J p: The wages earned by Mario Dionisio were the lifeblood of his family his wife Divina and their children Mark Angelo and Ma. Liza, both minors. A work-related disruption unfortunately abruptly ended the means of livelihood of Mario prompting his dependent family to sue his employer and a co-employee for damages. On 2 November 1990, at about 3:30 in the afternoon, petitioner's Baliwag Transit Bus No. 117 was driven by Juanito Fidel to its terminal on 2nd Avenue, Caloocan City, for repair of its brake system. Juanito Fidel told mechanic Mario Dionisio to inform the headman about the matter so that proper order to the mechanics could be made. Fidel then alighted from the bus and told the gasman to fill up the gas tank. Shortly after, Juanito Fidel returned to the bus and sat on the driver's seat. Suddenly the bus moved; he felt something was hit. When he went down to investigate he saw Mario Dionisio lying on the ground bleeding and convulsive, sandwiched between Bus No. 117 and another bus parked thereat owned by the same petitioner. Fidel summoned his co-employees and they all helped to extricate Mario Dionisio. They rushed him to St. Luke's Hospital in Quezon City. On 6 November 1990 however he expired as evidenced by his Certificate of Death issued 22 November 1990. Thereafter a complaint for damages was lodged by private respondents Divina Vda. de Dionisio, for herself and in behalf of her minor children Mark Angelo and Ma. Liza as heirs of the deceased, before the Regional Trial Court of Quezon City. On 3 February 1993 the trial court rendered a decision ordering petitioner Baliwag Transit, Inc., and its employee Juanito Fidel jointly and severally to pay the heirs of Mario Dionisio the following amounts: P50,000.00 as death indemnity, P6,691.00 as litigation expenses, P10,000.00 as attorney's fees, P3,000.00 as funeral expenses, and costs of suit. 1 Private respondents appealed to the Court of Appeals which on 23 March 1994 rendered a decision modifying the appealed judgment and ordering petitioners instead to pay jointly and severally P50,000.00 as death indemnity, P1,429,050.00 for loss of earning capacity, P3,000.00 for funeral expenses, P60,000.00 for moral damages, P30,000.00 for exemplary damages, P50,000.00 for attorney's fees, plus the costs of suit. 2 On 8 August 1994 the motion to reconsider the decision was denied. 3 Hence, this petition. Petitioners maintain that respondent Court of Appeals erred in affirming the appealed judgment despite the contributory negligence of the deceased Mario Dionisio, i.e., in failing to take the necessary precaution while doing repair work on the brake

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system of Bus No. 117, and that the increase of the award of damages is unreasonable being unsupported by law and the evidence. The petition must fail. The circumstances clearly show that the proximate cause of the death of Mario Dionisio was the negligence of driver Juanito Fidel when he failed to take the necessary precaution to prevent the accident. He boarded his bus, sat on the driver's seat and was at the steering wheel when the bus moved pinning down the deceased who was repairing the defective brake system below. Driver Fidel should have known that his brake system was being repaired as he was in fact the one who told Dionisio to do the repair. Fidel should have parked the bus properly and safely. After alighting from the bus to tell the gasman to fill the tank, he should have placed a stopper or any hard object against a tire or two of the bus. But without taking the necessary precaution he boarded Bus No. 117 causing it to move and roll, pinning down the deceased which resulted in his serious injuries and eventual death. The reckless imprudence of Juanito Fidel makes him liable to the heirs of offended party for damages together with his employer. 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 Art. 2176 is Art. 2180 which states 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 . . . Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry . . . The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. Article 2180, in relation to Art. 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. 4 Petitioner's failure to prove that it exercised the due diligence of a good father of a family in the selection and supervision of its driver Juanito Fidel will make it solidarily liable with the latter for damages caused by him. As regards the reasonableness of the damages awarded, under Art. 1764, in conjunction with Art. 2206, of the Civil Code, as well as established jurisprudence, several factors are considered, namely: (a) life expectancy (considering the health of the deceased and the mortality table being deemed conclusive) and loss of earning capacity; (b) pecuniary loss, loss of support and service; and, (c) moral and mental sufferings. The loss of earning capacity is based mainly on two factors, namely, the number of years on the basis of which the damages shall be computed, and the rate at which the loss sustained by the heirs should be fixed. 5 Finding discrepancies in the computation of respondent Court of Appeals, we here opine that the correct computation of the loss of earning capacity of the deceased, considering that he was the sole bread-winner of the family and only 29 years old when he met his untimely death, should be based on the formula: 2/3 x 51 (80 29 [age at time of death]) = life expectancy. Thus P33,273.60-gross annual income (P2,772.80 x 12 mos.)

Add:4,244.64-gross annual allowance (P353.72 x 12 mos.) 3,199.00-13th month pay P40,717.24-total annual income Less:6,000.00-annual expenses (P500.00 x 12 mos.) 13,776.00-annual pension (P1,148.00 x 12 mos.) P20,941.24-total annual net income Multiply:34-life expectancy of Mario (2/3 x 51 [80 - 29 {age at time of death}]) P712,002.16-total loss of earning capacity Article 2206 grants the spouse, legitimate and illegitimate descendants and ascendants of the deceased moral damages for mental anguish by reason of death. Indisputably, the heirs of Mario suffered no small amount of mental anguish brought about by the manner he died and bearing in mind that he was the sole breadwinner of the family.

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Article 2231 also awards exemplary damages if the defendant acted with gross negligence, as Juanito did, when he moved Bus No. 117 without first ascertaining if the repair of its break system was already undertaken. Exemplary damages having been awarded, recovery of attorney's fees follows under Art. 2208, par. (1), of the Civil Code. WHEREFORE, the decision and resolution of respondent Court of Appeals subject of the instant petition are MODIFIED as follows: petitioner BALIWAG TRANSIT, INC., and JUANITO FIDEL are ordered to pay jointly and severally the heirs of Mario Dionisio (a) P50,000.00 for death indemnity, (b) 712,002.16 for loss of earning capacity, (c) P3,000.00 for funeral expenses, (d) P40,000.00 for moral damages, (e) 15,000.00 for exemplary damages (f) P20,000.00 for attorney's fees, and, (g) to pay the costs of suit. SO ORDERED.

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[G.R. No. 82465. February 25, 1991.] ST. FRANCIS HIGH SCHOOL, as represented by SPS. FERNANDO NANTES AND ROSARIO LACANDULA, BENJAMIN ILUMIN, TIRSO DE CHAVEZ, LUISITO VINAS, CONNIE ARQUIO AND PATRIA CADIZ, petitioners, vs. THE HONORABLE COURT OF APPEALS, ELEVENTH DIVISION and DR. ROMULO CASTILLO and LILIA CADIZ, respondents.

Jose C. Flores, Jr. for petitioners. Jovito E. Talabong for private respondents.

DECISION

PARAS, J p: This is a petition for review of the decision * of the Court of Appeals, the dispositive portion of which reads: WHEREFORE, the decision under appeal is hereby affirmed, with the following modifications: (1) Exemplary damages in the amount of P20,000.00 are hereby awarded to plaintiffs, in addition to the actual damages of P30,000.00, moral damages of P20,000.00 and attorney's fees in the amount of P15,000.00 awarded to plaintiffs in the decision under appeal; (2) St. Francis High School, represented by the Spouses Fernando Nantes and Rosario Lacandula, and Benjamin Illumin, are hereby held jointly and severally liable with defendants Connie Arquio, Tirso de Chaves, Luisito Vinas and Patria Cadis for the payment to plaintiffs of the abovementioned actual damages, moral damages, exemplary damages and attorney's fees, and for costs; and (3) Defendants Yoly Jaro and Nida Aragones are hereby absolved from liability, and the case against them, together with their respective counterclaims, is hereby ordered dismissed. "SO ORDERED." (p. 60, Rollo) The complaint alleged that Ferdinand Castillo, then a freshman student of Section 1-C at the St. Francis High School, wanted to join a school picnic undertaken by Class I-B and Class I-C at Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents spouses Dr. Romulo Castillo and Lilia Cadiz Castillo, because of short notice, did not allow their son to join but merely allowed him to bring food to the teachers for the picnic, with the directive that he should go back home after doing so. However, because of persuasion of the teachers, Ferdinand went on with them to the beach. LibLex During the picnic and while the students, including Ferdinand, were in the water, one of the female teachers was apparently drowning. Some of the students, including Ferdinand, came to her rescue, but in the process, it was Ferdinand himself who drowned. His body was recovered but efforts to resuscitate him ashore failed. He was brought to a certain Dr. Luna in Sariaya, Quezon and later to the Mt. Carmel General Hospital where he was pronounced dead on arrival. Thereupon, respondent spouses filed a complaint docketed as Civil Case No. 8834, in the Regional Trial Court, Branch LVIII of Lucena City, against the St. Francis High School, represented by the spouses Fernando Nantes and Rosario Lacandula, Benjamin Illumin (its principal), and the teachers: Tirso de Chaves, Luisito Vinas, Connie Arquio, Nida Aragones, Yoly Jaro, and Patria Cadiz, for Damages which respondents allegedly incurred from the death of their 13-year old son, Ferdinand Castillo. Contending that the death of their son was due to the failure of the petitioners to exercise the proper diligence of a good father of the family in preventing their son's drowning, respondents prayed of actual, moral and exemplary damages, attorney's fees and expenses for litigation. The trial court found in favor of the respondents and against petitioners-teachers Arquio, de Chaves, Vinas, Aragones, Jaro and Cadiz, ordering all of them jointly and severally to pay respondents the sum of P30,000.00 as actual damages, P20,000.00 as moral damages, P15,000.00 as attorney's fees, and to pay the costs. The court a quo reasoned: "Taking into consideration the evidence presented, this Court believes that the defendant teachers namely: Connie Arquio, Luisito Vinas, Tirso de Chaves, Yoly Jaro, Nida Aragones and Patria Cadiz had failed to exercise the diligence required of them by law under the circumstances to guard against the harm they had foreseen." (pp, 2930, Rollo) "xxx xxx xxx "While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the picnic site, the drowning incident had already occurred, such fact does not and cannot excuse them from their liability. In fact, it could be said that by coming late, they were remiss in their duty to safeguard the students." (p. 30, Rollo) "The students, young as they were then (12 to 13 years old), were easily attracted to the sea without aforethought of the dangers it offers. Yet, the precautions and reminders allegedly performed by the defendants-teachers definitely fell short of the standard required by law under the circumstances. While the defendants-teachers admitted that some parts of the sea where the picnic was held are deep, the supposed lifeguards of the children did not even actually go to the water to test the depth of the particular area where the children would swim. And indeed the fears of the plaintiffs that the picnic area was dangerous was confirmed by the fact that three persons during the picnic got drowned at the same time. Had the defendant teachers made an actual and physical observation of

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the water before they allowed the students to swim, they could have found out that the area where the children were swimming was indeed dangerous. And not only that, the male teachers who according to the female teachers were there to supervise the children to ensure their safety were not even at the area where the children were swimming. They were somewhere and as testified to by plaintiffs' witness they were having a drinking spree. (pp. 55-56, Rollo) On the other hand, the trial court dismissed the case against the St. Francis High School, Benjamin Illumin and Aurora Cadorna. Said the court a quo: "As shown and adverted to above, this Court cannot find sufficient evidence showing that the picnic was a school sanctioned one. Similarly, no evidence has been shown to hold defendants Benjamin Illumin and Aurora Cadorna responsible for the death of Ferdinand Castillo together with the other defendant teachers. It has been sufficiently shown that Benjamin Illumin had himself not consented to the picnic and in fact he did not join it. On the other hand, defendant Aurora Cadorna had then her own class to supervise and in fact she was not amongst those allegedly invited by defendant Connie Arquio to supervise class I-C to which Ferdinand Castillo belongs." (p. 30, Rollo) Both petitioners and respondents appealed to the Court of Appeals. Respondents-spouses assigned the following errors committed by the trial court: "1.The lower court erred in not declaring the defendant St. Francis High School and its administrator/principal Benjamin Illumin as equally liable not only for its approved co-curricular activities but also for those which they unreasonably failed to exercise control and supervision like the holding of picnic in the dangerous water of Talaan Beach, Sariaya, Quezon. "2.The lower court erred in not declaring the St. Francis High School and principal Benjamin Illumin as jointly and solidarily liable with their co-defendants-teachers Rosario Lacandula, et al., for the tragic death of Ferdinand Castillo in a picnic at Talaan Beach, Sariaya, Quezon, last March 20, 1982. "3.The lower court erred in not declaring higher amount for actual and moral damages for the untimely and tragic death of Ferdinand Castillo in favor of plaintiffs-appellants against all the defendants." (pp. 56-57, Rollo) The Court of Appeals ruled: "We find plaintiffs-appellants' submission well-taken. "Even were We to find that the picnic in question was not a school sponsored activity, nonetheless it cannot be gainsaid that the same was held under the supervision of the teachers employed by the said school, particularly the teacher in charge of Class I-C to whom the victim belonged, and those whom she invited to help her in supervising the class during the picnic. Considering that the court a quo found negligence on the part of the six defendantsteachers who, as such, were charged with the supervision of the children during the picnic, the St. Francis High School and the school principal, Benjamin Illumin, are liable under Article 2176 taken together with the 1st, 4th and 5th paragraphs of Article 2180 of the Civil Code. They cannot escape liability on the mere excuse that the picnic was not an 'extra-curricular activity of the St. Francis High School.' We find from the evidence that, as claimed by plaintiffs-appellants, the school principal had knowledge of the picnic even from its planning stage and had even been invited to attend the affair; and yet he did not express any prohibition against undertaking the picnic, nor did he prescribe any precautionary measures to be adopted during the picnic. At the least, We must find that the school and the responsible school officials, particularly the principal, Benjamin Illumin, had acquiesced to the holding of the picnic. "Under Article 2180, supra, the defendant school and defendant school principal must be found jointly and severally liable with the defendants-teachers for the damages incurred by the plaintiffs as a result of the death of their son. It is the rule that in cases where the above-cited provisions find application, the negligence of the employees in causing the injury or damage gives rise to a presumption of negligence on the part of the owner and/or manager of the establishment (in the present case, St. Francis High School and its principal); and while this presumption is not conclusive, it may be overthrown only by clear and convincing proof that the owner and/or manager exercised the care and diligence of a good father of a family in the selection and/or supervision of the employee or employees causing the injury or damage (in this case, the defendants-teachers). The record does not disclose such evidence as would serve to overcome the aforesaid presumption and absolve the St. Francis High School and its principal from liability under the above-cited provisions.

"As to the third assigned error interposed by plaintiffs-appellants, while We cannot but commiserate with the plaintiffs for the tragedy that befell them in the untimely death of their son Ferdinand Castillo and understand their suffering as parents, especially the victim's mother who, according to appellants, suffered a nervous breakdown as a result of the tragedy, We find that the amounts fixed by the court a quo as actual damages and moral damages (P30,000.00 and P20,000.00, respectively) are reasonable and are those which are sustained by the evidence and the law. "However, We believe that exemplary or corrective damages in the amount of P20,000.00 may and should be, as it is hereby, imposed in the present case by way of example of correction for the public good, pursuant to Article 2229 of the Civil Code." (pp. 57-59, Rollo). On the other hand, petitioners-teachers assigned the following errors committed by the trial court:

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1.". . . in finding the defendants Connie Arquio, Tirso de Chavez, Luisito Vinas, Nida Aragones, Yoly Jaro and Patria Cadiz guilty of negligence and jointly and severally liable for damages such finding not being supported by facts and evidence. "2.". . . in dismissing the counterclaim interposed by the defendants." (p. 59, Rollo) On this score, respondent Court ruled: "The main thrust of defendants-appellants' appeal is that plaintiffs, the parents of the victim Ferdinand Castillo, were not able to prove by their evidence that they did not give their son consent to join the picnic in question. However, We agree with the trial court in its finding that whether or not the victim's parents had given such permission to their son was immaterial to the determination of the existence of liability on the part of the defendants for the damage incurred by the plaintiffs-appellants as a result of the death of their son. What is material to such a determination is whether or not there was negligence on the part of defendants vis-a-vis the supervision of the victim's group during the picnic; and, as correctly found by the trial court, an affirmative reply to this question has been satisfactorily established by the evidence, as already pointed out. "However, We sustain defendants-appellants insofar as two of the defendants-teachers, Yoly Jaro and Nida Aragones, are concerned. As to them, the trial court found: "While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the picnic site, the drowning incident had already occurred, such fact does not and cannot excuse them from their liability. In fact, it could be said that by coming late, they were remiss in their duty to safeguard the students. The evidence shows that these two defendants had satisfactorily explained why they were late in going to the picnic site, namely, that they had to attend to the entrance examination being conducted by the school which is part of their duty as teachers thereof. Since they were not at the picnic site during the occurrence in question, it cannot be said that they had any participation in the negligence attributable to the other defendants-teachers who failed to exercise diligence in the supervision of the children during the picnic and which failure resulted in the drowning of plaintiffs' son. Thus, We may not attribute any act or omission to the two teachers, Yoly Jaro and Nida Aragones, as to make them liable for the injury caused to the plaintiffs because of the death of their son resulting from his drowning at the picnic. Accordingly, they must be absolved from any liability. "As to the second assigned error raised by defendants-appellants, We agree with the court a quo that the counterclaim must be dismissed for lack of merit." (pp. 59-60, Rollo) Hence, this petition. The issues presented by petitioners are: "A)Whether or not there was negligence attributable to the defendants which will warrant the award of damages to the plaintiffs; "B)Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to the case at bar; "C)Whether or not the award of exemplary and moral damages is proper under the circumstances surrounding the case at bar." (pp. 81-82, Rollo) In the resolution of January 16, 1989, We gave due course to the petition and required the parties to submit their respective memoranda. The petition is impressed with merit. If at all petitioners are liable for negligence, this is because of their own negligence or the negligence of people under them. In the instant case however, as will be shown hereunder, petitioners are neither guilty of their own negligence or guilty of the negligence of those under them. Hence, it cannot be said that they are guilty at all of any negligence. Consequently they cannot be held liable for damages of any kind. At the outset, it should be noted that respondent spouses, parents of the victim Ferdinand, allowed their son to join the excursion. "Testimony of Dr. Castillo on cross exam. by Atty. Flores QNow, when your son asked you for money to buy food, did you not ask him where he will bring this? AI asked him where he was going, he answered, I am going to the picnic, and when I asked him where, he did not answer, sir. QAnd after giving the money, you did not tell him anything more? ANo more, sir.

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QAnd after that you just learned that your son joined the picnic? AYes, sir. QAnd you came to know of it after the news that your son was drowned in the picnic came to you, is that correct? AYes, sir. QFrom 8:00 o'clock in the morning up to 12:00 o'clock noon of March 20, 1982, you did not know that your son joined the picnic? ANo, sir, I did not know. QDid you not look for your son during that time? AI am too busy with my profession, that is why I was not able, sir. QYou did not ask your wife? AI did not, sir. QAnd neither did your wife tell you that your son joined the picnic? ALater on after 12:00, sir. QAnd during that time you were too busy that you did not inquire whether your son have joined that picnic? AYes, sir." (TSN, pp. 16-17, hearing of April 2, 1984 witness Romulo Castillo) The fact that he gave money to his son to buy food for the picnic even without knowing where it will be held, is a sign of consent for his son to join the same. Furthermore. "Testimony of Dr. Lazaro on cross examination: QHow did you conduct this mental and physical examination? AI have interviewed several persons and the patient herself. She even felt guilty about the death of her son because she cooked adobo for him so he could join the excursion where her son died of drowning. QWhy were you able to say she was feeling guilty because she was the one who personally cooked the adobo for her son? AIt was during the interview that I had gathered it from the patient herself. She was very sorry had she not allowed her son to join the excursion her son would have not drowned. I don't know if she actually permitted her son although she said she cooked adobo so he could join. (Emphasis Supplied) (TSN, p. 19, hearing of April 30, 1984, Dr. Lazaro witness) Respondent Court of Appeals committed an error in applying Article 2180 of the Civil Code in rendering petitioner school liable for the death of respondent's son. Article 2180, par. 4 states that: "The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xxx xxx xxx 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." Under this paragraph, it is clear that before an employer may be held liable for the negligence of his employee, the act or omission which caused damage or prejudice must have occurred while an employee was in the performance of his assigned tasks. In the case at bar, the teachers/petitioners were not in the actual performance of their assigned tasks. The incident happened not within the school premises, not on a school day and most importantly while the teachers and students were holding a purely private affair, a picnic. It is clear from the beginning that the incident happened while some members of the I-C class of St. Francis High School were having a picnic at Talaan Beach. This picnic had no permit from the school head or its principal, Benjamin Illumin because this picnic is not a school sanctioned activity neither is it considered as an extra-curricular activity. prLL

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As earlier pointed out by the trial court, mere knowledge by petitioner/principal Illumin of the planning of the picnic by the students and their teachers does not in any way or in any manner show acquiescence or consent to the holding of the same. The application therefore of Article 2180 has no basis in law and neither is it supported by any jurisprudence. If we were to affirm the findings of respondent Court on this score, employers will forever be exposed to the risk and danger of being hailed to Court to answer for the misdeeds or omissions of the employees even if such act or omission he committed while they are not in the performance of their duties. Finally, no negligence could be attributable to the petitioners-teachers to warrant the award of damages to the respondents-spouses. Petitioners Connie Arquio, the class adviser of I-C, the section where Ferdinand belonged, did her best and exercised diligence of a good father of a family to prevent any untoward incident or damages to all the students who joined the picnic. In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E. instructors and scout masters who have knowledge in First Aid application and swimming. Moreover, even respondents' witness, Segundo Vinas, testified that "the defendants (petitioners herein) had life savers especially brought by the defendants in case of emergency." (p. 85, Rollo) The records also show that both petitioners Chavez and Vinas did all what is humanly possible to save the child. LexLib

"Testimony of Luisito Vinas on cross examination, QAnd when you saw the boy, Ferdinand Castillo, you approached the boy and claim also having applied first aid on him? AYes, sir. QAnd while you were applying the so called first aid, the children were covering you up or were surrounding you? AYes, sir. QYou were rattled at that time, is it not? ANo, sir. QYou mean you were in calm and peaceful condition? AYes, sir. QDespite the fact that the boy was no longer responding to your application of first aid? AYes, sir. QYou have never been disturbed, "nababahala" in the process of your application of the first aid on the body of Ferdinand Castillo? ANo, sir, because we were attending to the application of first aid that we were doing, sir. QAfter you have applied back to back pressure and which you claimed the boy did not respond, were you not disturbed anyway? AI was disturbed during that time, sir. QFor how many minutes have you applied the back to back pressure? AFrom 9 to 11 times, sir. QYou mean 9 to 11 times of having applied the pressure of your body on the body of Ferdinand Castillo? AYes, sir. QWill you please describe how you applied a single act of back to back pressure? AThis has been done by placing the boy lay first downwards, then the face was a little bit facing right and doing it by massaging the back of the child, sir." (TSN, pp. 32-35, hearing of July 30, 1984) "Testimony of Tirso de Chavez on direct examination. ATTY. FLORES:

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QWho actually applied the first aid or artificial respiration to the child? AMyself, sir. QHow did you apply the first aid to the guy? AThe first step that I took, with the help of Mr. Luisito Vinas, was I applied back to back pressure and took notice of the condition of the child. We placed the feet in a higher position, that of the head of the child, sir. QAfter you have placed the boy in that particular position, where the feet were on a higher level than that of the head, what did you do next? AThe first thing that we did, particularly myself, was that after putting the child in that position, I applied the back to back pressure and started to massage from the waistline up, but I noticed that the boy was not responding, sir. QFor how long did you apply this back to back pressure on the boy? AAbout 10 seconds, sir. QWhat about Mr. Vinas? AAlmost the same a little longer, for 15 seconds, sir. QAfter you noticed that the boy was not responding, what did you do? AWhen we noticed that the boy was not responding, we changed the position of the boy by placing the child facing upwards laying on the sand then we applied the mouth to mouth resuscitation, sir." (pp. 92-93, Rollo) With these facts in mind, no moral nor exemplary damages may be awarded in favor of respondents-spouses. The case at bar does not fall under any of the grounds to grant moral damages. "Art. 2217.Moral Damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission." Moreover, as already pointed out hereinabove, petitioners are not guilty of any fault or negligence, hence, no moral damages can be assessed against them. While it is true that respondents-spouses did give their consent to their son to join the picnic, this does not mean that the petitioners were already relieved of their duty to observe the required diligence of a good father of a family in ensuring the safety of the children. But in the case at bar, petitioners were able to prove that they had exercised the required diligence. Hence, the claim for moral or exemplary damages becomes baseless. PREMISES CONSIDERED, the questioned decision dated November 19, 1987, finding petitioners herein guilty of negligence and liable for the death of Ferdinand Castillo and awarding the respondents damages, is hereby SET ASIDE insofar as the petitioners herein are concerned, but the portion of the said decision dismissing their counterclaim, there being no merit, is hereby AFFIRMED. cdphil SO ORDERED. Sarmiento and Regalado, JJ., concur.

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[G.R. No. 75112. October 16, 1990.] FILAMER CHRISTIAN INSTITUTE, petitioner, vs. HONORABLE COURT OF APPEALS, HONORABLE ENRIQUE P. SUPLICO, in his capacity as Judge of the Regional Trial Court, Branch XIV, Roxas City and the late POTENCIANO KAPUNAN, SR., as substituted by his heirs, namely: LEONA KAPUNAN TIANGCO, CICERO KAPUNAN, JESUS KAPUNAN, SANTIAGO KAPUNAN, POTENCIANO KAPUNAN, JR., PAZ KAPUNAN PUBLICO, SUSA KAPUNAN GENUINO, and ERLINDA KAPUNAN TESORO , respondents.

Aquilina B. Brotarlo for petitioner. Rhodora G. Kapunan for the Substituted Heirs of the late respondent.

DECISION

FERNAN, J p: This is a petition for review of the decision 1 of the Court of Appeals affirming the judgment of the Regional Trial Court (RTC) of Roxas City, Branch 14 in Civil Case No. V-4222 which found petitioner Filamer Christian Institute and Daniel Funtecha negligent and therefore answerable for the resulting injuries caused to private respondent Potenciano Kapunan, Sr. Private respondent Potenciano Kapunan, Sr., an eighty-two-year old retired schoolteacher (now deceased), was struck by the Pinoy jeep owned by petitioner Filamer and driven by its alleged employee, Funtecha, as Kapunan, Sr. was walking along Roxas Avenue, Roxas City at 6:30 in the evening of October 20, 1977. As a result of the accident, Kapunan, Sr. suffered multiple injuries for which he was hospitalized for a total of twenty (20) days. Evidence showed that at the precise time of the vehicular accident, only one headlight of the jeep was functioning. Funtecha, who only had a student driver's permit, was driving after having persuaded Allan Masa, the authorized driver, to turn over the wheels to him. The two fled from the scene after the incident. A tricycle driver brought the unconscious victim to the hospital. prLL Thereafter, Kapunan, Sr. instituted a criminal case against Funtecha alone in the City Court of Roxas City for serious physical injuries through reckless imprudence. Kapunan, Sr. reserved his right to file an independent civil action. The inferior court found Funtecha guilty as charged and on appeal, his conviction was affirmed by the then Court of First Instance of Capiz. 2 Pursuant to his reservation, Kapunan, Sr. commenced a civil case for damages 3 before the RTC of Roxas City. Named defendants in the complaint were petitioner Filamer and Funtecha. Also included was Agustin Masa, the director and president of Filamer Christian Institute, in his personal capacity "in that he personally authorized and allowed said Daniel Funtecha who was his houseboy at the time of the incident, to drive the vehicle in question despite his knowledge and awareness that the latter did not have the necessary license or permit to drive said vehicle. His son, Allan Masa, who was with Funtecha at the time of the accident, was not impleaded as a codefendant. 4 On December 14, 1983, the trial court rendered judgment finding not only petitioner Filamer and Funtecha to be at fault but also Allan Masa, a non-party. Thus: "WHEREFORE, finding the averments in the complaint as supported by preponderance of evidence to be reasonable and justified, and that defendants Daniel Funtecha, Filamer Christian Institute and Allan Masa are at fault and negligent of the acts complained of which causes (sic) injury to plaintiff, judgment is hereby rendered in favor of the plaintiff and against the defendants, namely: Daniel Funtecha and Filamer Christian Institute, the employer whose liability is primary and direct, jointly and severally, to pay plaintiff the following: "(1)to pay the sum of TWO THOUSAND NINE HUNDRED FIFTY PESOS AND FIFTY CENTAVOS (P2,950.50) as medical expenses (Exh. 'A'); "(2)to pay TWO HUNDRED FORTY ONE PESOS (P241.00) as doctor's fee (Exh. 'C'); "(3)to pay THREE HUNDRED NINETY PESOS (P390.00) as additional expenses incurred for thirty-nine days at P10.00 a day, for remuneration of plaintiff's helper while recuperating; "(4)to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation expenses; "(5)to pay THREE THOUSAND PESOS (P3,000.00) as loss of earnings capacity; "(6)to pay TWENTY THOUSAND (P20,000.00) pesos as moral damages; "(7)to pay FOUR THOUSAND FIVE HUNDRED PESOS (P4,500.00) as attorney's fees; "(8)to pay TWENTY THOUSAND PESOS (P20,000.00) as insurance indemnity on the policy contract;

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and without prejudice to the right of defendant Filamer Christian Institute to demand from co-defendant Daniel Funtecha part-time employee and/or Allan Masa a full time employee reimbursement of the damages paid to herein plaintiff. "The defendant Agustin Masa as director of defendant Filamer Christian Institute has also failed to exercise the diligence required of a good father of a family in the supervision of his employee Allan Masa, being his son. However, the court absolved defendant Agustin Masa from any personal liability with respect to the complaint filed against him in his personal and private capacity, cause he was not in the vehicle during the alleged incident. "For failure to prove their respective counterclaims filed by the defendant Daniel Funtecha, Dr. Agustin Masa, and Filamer Christian Institute, as against the herein plaintiff, same are hereby dismissed. "The Zenith Insurance Corporation as third party defendant has failed to prove that there was a policy violation made by the defendant Filamer Christian Institute which absolves them from liability under the aforesaid insurance policy. The record shows that the defendant Daniel Funtecha while driving the said vehicle was having a student drivers license marked Exh. `1' and accompanied by Allan Masa who is the authorized driver of said vehicle with a professional drivers license as shown by Exh. '3' "This Court finds that defendant Daniel Funtecha while driving the said vehicle is considered as authorized driver in accordance with the policy in question marked Exh. '2-Masa and FCI'. "Finding the averments in the third party complaint filed by defendant Filamer Christian Institute as supported by preponderance of evidence as shown by their exhibits to be reasonable and justified, judgment is hereby rendered in favor of the said defendant and third party plaintiff Filamer Christian Institute as against third party defendant Zenith Insurance Corporation. "The Zenith Insurance Corporation as third party defendant is hereby ordered to pay in favor of the defendant and third party plaintiff, Filamer Christian Institute, the following: "(1)to pay TWENTY THOUSAND PESOS (P20,000.00) as third party liability as provided in the Zenith Insurance Corporation policy (Exh. '2'); "(2)to pay TEN THOUSAND PESOS (P10,000.00) as moral damages; "(3)to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation and actual expenses; "(4)to pay THREE THOUSAND PESOS (P3,000.00) as attorney's fees; "The defendants Daniel Funtecha, Filamer Christian Institute and third party defendant Zenith Insurance Corporation are hereby ordered jointly and severally, to pay the costs of the suit." 5 Only petitioner Filamer and third-party defendant Zenith Insurance Corporation appealed the lower court's judgment to the Court of Appeals and as a consequence, said lower court's decision became final as to Funtecha. For failure of the insurance firm to pay the docket fees, its appeal was dismissed on September 18, 1984. On December 17, 1985, the Appellate Court rendered the assailed judgment affirming the trial court's decision in toto. 6 Hence, the present recourse by petitioner Filamer. It is petitioner Filamer's basic contention that it cannot be held responsible for the tortious act of Funtecha on the ground that there is no existing employer-employee relationship between them. We agree. The Civil Code provides: "Art. 2176.Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter." "Art. 2180.The obligation imposed by article 2176 is demandable not only for one's own acts or omissions but also for those of persons for whom one is responsible. "xxx xxx xxx "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 observe all the diligence of a good father of a family to prevent damage." (Emphasis supplied). The legal issue in this appeal is whether or not the term "employer" as used in Article 2180 is applicable to petitioner Filamer with reference to Funtecha. In disclaiming liability, petitioner Filamer has invoked the provisions of the Labor Code, 7 specifically Section 14, Rule X of Book III which reads:

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"Sec. 14.Working scholars. There is no employer-employee relationship between students on the one hand, and schools, colleges or universities on the other, where students work for the latter in exchange for the privilege to study free of charge; provided the students are given real opportunity, including such facilities as may be reasonable, necessary to finish their chosen courses under such arrangement." (Emphasis supplied). It is manifest that under the just-quoted provision of law, petitioner Filamer cannot be considered as Funtecha's employer. Funtecha belongs to that special category of students who render service to the school in exchange for free tuition. Funtecha worked for petitioner for two hours daily for five days a week. He was assigned to clean the school passageways from 4:00 a.m. to 6:00 a.m. with sufficient time to prepare for his 7:30 a.m. classes. As admitted by Agustin Masa in open court, Funtecha was not included in the company payroll. 8

The wording of Section 14 is clear and explicit and leaves no room for equivocation. To dismiss the implementing rule as one which governs only the "personal relationship" between the school and its students and not where there is already a third person involved, as espoused by private respondents, is to read into the law something that was not legislated there in the first place. The provision of Section 14 is obviously intended to eliminate an erstwhile gray area in labor relations and seeks to define in categorical terms the precise status of working scholars in relation to the learning institutions in which they work for the privilege of a free education. But even if we were to concede the status of an employee on Funtecha, still the primary responsibility for his wrongdoing cannot be imputed to petitioner Filamer for the plain reason that at the time of the accident, it has been satisfactorily shown that Funtecha was not acting within the scope of his supposed employment. His duty was to sweep the school passages for two hours every morning before his regular classes. Taking the wheels of the Pinoy jeep from the authorized driver at 6:30 in the evening and then driving the vehicle in a reckless manner resulting in multiple injuries to a third person were certainly not within the ambit of his assigned tasks. In other words, at the time of the injury, Funtecha was not engaged in the execution of the janitorial services for which he was employed, but for some purpose of his own. It is but fair therefore that Funtecha should bear the full brunt of his tortious negligence. Petitioner Filamer cannot be made liable for the damages he had caused. Private respondents' attempt to hold petitioner Filamer directly and primarily answerable to the injured party under Article 2180 of the Civil Code would have prospered had they proceeded against Allan Masa, the authorized driver of the Pinoy jeep and undisputably an employee of petitioner. It was Allan's irresponsible act of entrusting the wheels of the vehicle to the inexperienced Funtecha which set into motion the chain of events leading to the accident resulting in injuries to Kapunan, Sr. But under the present set of circumstances, even if the trial court did find Allan guilty of negligence, such conclusion would not be binding on Allan. It must be recalled that Allan was never impleaded in the complaint for damages and should be considered as a stranger as far as the trial court's judgment is concerned. It is axiomatic that no man shall be affected by a proceeding to which he is a stranger. 9 WHEREFORE, in view of the foregoing, the decision under review of the Court of Appeals is hereby SET ASIDE. The complaint for damages 10 is ordered DISMISSED as against petitioner Filamer Christian Institute for lack of cause of action. No costs. LLpr SO ORDERED. Bidin and Cortes, JJ., concur. Gutierrez, Jr., J., I concur but limit my concurrence on the employee-employer relationship to labor law situations. Feliciano, J., is on leave.

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[G.R. No. 146173. December 11, 2003.] CECILIA YAMBAO, petitioner, vs. MELCHORITA C. ZUIGA, LEOVIGILDO C. ZUIGA, REGINALDO C. ZUIGA, AND THE MINORS, HERMINIGILDO C. ZUIGA, JR., AND LOVELY EMILY C. ZUIGA both represented by their legal guardian, the aforenamed MELCHORITA C. ZUIGA, respondents.

Esmeraldo R. Acorda for petitioner. Semproniano S. Ochoco for respondents. SYNOPSIS Petitioner, the registered owner of a passenger bus, was held jointly and severally liable with the bus driver for damages for the untimely death of one Herminigildo Zuiga. The bus owned by petitioner bumped Zuiga, a pedestrian. The CA affirmed the decision on appeal. The Supreme Court held that the issue whether a person is negligent. or not is a question of fact which the Court cannot pass upon in a petition for review on certiorari. The Court affirmed the trial court's finding, as affirmed by the CA, that it was Venturina's reckless driving of petitioner's bus, which was the proximate cause of the victim's death. The Supreme Court also held that for the employer to avoid the solidary liability for a tort committed by his employee, an employer must rebut the presumption by presenting adequate and convincing proof that he exercised the diligence of a good father of a family in the selection and supervision of his employee. In the instant case, the petitioner has failed to rebut the presumption of negligence on her part. ACaEcH

SYLLABUS 1.REMEDIAL LAW; FINDINGS OF FACT OF THE TRIAL COURT ARE GENERALLY UPHELD ON APPEAL; CASE AT BAR. Whether a person is negligent or not is a question of fact, which this Court cannot pass upon in a petition for review on certiorari, as our jurisdiction is limited to reviewing errors of law. The resolution of factual issues is the function of the trial court and its findings on these matters are, as a general rule, binding on this Court, more so where these have been affirmed by the Court of Appeals. We have carefully examined and weighed the petitioner's arguments on the first issue submitted, as well as the evidence on record, and find no cogent reason to disregard the cited general rule, much less to reverse the factual findings of the trial court as upheld by the court a quo. Hence, we sustain the trial court's finding, as affirmed by the Court of Appeals, that it was Venturina's reckless and imprudent driving of petitioner's bus, which is the proximate cause of the victim's death. 2.CIVIL LAW; CIVIL CODE; QUASI-DELICTS; EMPLOYER'S LIABILITY FOR DAMAGES CAUSED BY THEIR EMPLOYEES; ADEQUATE PROOF REQUIRED TO SHOW THAT EMPLOYER EXERCISED THE "DILIGENCE OF A GOOD FATHER" IN THE SELECTION AND SUPERVISION OF EMPLOYEES. The law governing petitioner's liability, as the employer of bus driver Venturina, is Article 2180 of the Civil Code . . . The "diligence of a good father" referred to in the last paragraph of the aforecited statute means diligence in the selection and supervision of employees. Thus, when an employee, while performing his duties, causes damage to persons or property due to his own negligence, there arises the juris tantum presumption that the employer is negligent, either in the selection of the employee or in the supervision over him after the selection. For the employer to avoid the solidary liability for a tort committed by his employee, an employer must rebut the presumption by presenting adequate and convincing proof that in the selection and supervision of his employee, he or she exercises the care and diligence of a good father of a family. 3.ID.; ID.; ID.; ID.; ID.; CASE AT BAR. In the instant case, we find that petitioner has failed to rebut the presumption of negligence on her part. Petitioner's claim that she exercised due diligence in the selection and supervision of her driver, Venturina, deserves but scant consideration. Her allegation that before she hired Venturina she required him to submit his driver's license and clearances is worthless, in view of her failure to offer in evidence certified true copies of said license and clearances. Bare allegations, unsubstantiated by evidence, are not equivalent to proof under the rules of evidence . . . Case law teaches that for an employer to have exercised the diligence of a good father of a family, he should not be satisfied with the applicant's mere possession of a professional driver's license; he must also carefully examine the applicant for employment as to his qualifications, his experience and record of service. Petitioner failed to present convincing proof that she went to this extent of verifying Venturina's qualifications, safety record, and driving history. The presumption juris tantum that there was negligence in the selection of her bus driver, thus, remains unrebutted. Nor did petitioner show that she exercised due supervision over Venturina after his selection. For as pointed out by the Court of Appeals, petitioner did not present any proof that she drafted and implemented training programs and guidelines on road safety for her employees. In fact, the record is bare of any showing that petitioner required Venturina to attend periodic seminars on road safety and traffic efficiency. Hence, petitioner cannot claim exemption from any liability arising from the recklessness or negligence of Venturina. SEHACI

DECISION

QUISUMBING, J p: This petition for review on certiorari seeks to reverse and set aside the decision 1 of the Court of Appeals, dated September 8, 2000, in CA-G.R. CV No. 52275. The appellate court affirmed the judgment 2 of the Regional Trial Court (RTC) of Malolos City, Bulacan, Branch 8, in Civil Case No. 581-M-92, finding herein petitioner, among others, liable for the untimely death of Herminigildo Zuiga in a vehicular accident and ordering her to indemnify his legal heirs, the respondents herein. Also challenged in this petition is the resolution 3 of the Court of Appeals, dated November 27, 2000, denying the petitioner's Motion for Reconsideration.

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Petitioner Cecilia Yambao is the registered owner of "Lady Cecil and Rome Trans" passenger bus with Plate No. CVK 606, with a public transport franchise to ply the Novaliches-via Quirino-Alabang route. The respondents are the legal heirs of the late Herminigildo Zuiga. Melchorita Zuiga is the surviving spouse, while Leovigildo, Reginaldo, Herminigildo, Jr., and Lovely Emily are their children. The facts, as established by the trial court and affirmed by the appellate court, are as follows: At around 3:30 p.m. of May 6, 1992, the bus owned by the petitioner was being driven by her driver, one Ceferino G. Venturina along the northbound lane of Epifanio delos Santos Avenue (EDSA), within the vicinity of Bagong Barrio, Kalookan City. With Venturina was the bus conductor, Fernando Dumaliang. Suddenly, the bus bumped Herminigildo Zuiga, a pedestrian. Such was the force of the impact that the left side of the front windshield of the bus was cracked. Zuiga was rushed to the Quezon City General Hospital where he was given medical attention, but due to the massive injuries sustained, he succumbed shortly thereafter. Private respondents, as heirs of the victim, filed a Complaint 4 against petitioner and her driver, Venturina, for damages, docketed as Civil Case No. 581-M-92 at the RTC of Malolos City. The complaint essentially alleged that Venturina drove the bus in a reckless, careless and imprudent manner, in violation of traffic rules and regulations, without due regard to public safety, thus resulting in the victim's premature death. In her Answer, the petitioner vehemently denied the material allegations of the complaint. She tried to shift the blame for the accident upon the victim, theorizing that Herminigildo bumped into her bus, while avoiding an unidentified woman who was chasing him. She further alleged that she was not liable for any damages because as an employer, she exercised the proper diligence of a good father of a family, both in the selection and supervision of her bus driver. On September 8, 1995, the trial court rendered judgment, the dispositive portion of which reads: In view of the foregoing consideration, judgment is hereby rendered in favor of the plaintiffs and against the defendants ordering the herein defendants jointly and severally, with Plaridel Surety & Insurance Co., and Times Surety & Insurance Co. Inc. to the extent of their respective liabilities under their respective insurance policies to pay the herein plaintiffs the following sums of money: 1.P50,000.00 as indemnity for the death of Herminigildo Zuiga; 2.P92,000.00 as funeral expenses; 3.P200,000.00 as moral damages; 4.P30,000.00 as exemplary damages; 5.P30,000.00 as attorney's fees; 6.P5,000.00 as litigation expenses; and 7.To pay the cost of the suit to be paid by all the herein defendants and third party defendants within thirty (30) days from receipt of this Decision. The counterclaim of the defendant Cecilia Yambao is hereby dismissed for lack of merit. SO ORDERED. 5 In finding for the respondents herein, the trial court observed: [T]he allegations and evidence presented by the defendants that it was the victim Herminigildo Zuiga who bumped the bus owned by defendant Cecilia Yambao and her husband . . . is incredible if not preposterous. No sane person would bump his head or body against a running bus along a big highway like EDSA at Bagong Barrio, Caloocan City and neither did any of the defendants presented (sic) any evidence or proof to show that the victim was mentally deranged at the time of the accident and the presumption therefore is that he was in his normal senses. 6 In holding the petitioner liable for Herminigildo's death, the trial court applied Article 1756 7 of the Civil Code, observing that petitioner had failed to prove that she observed the diligence required by Articles 1733 8 and 1755 9 of the said Code. Dissatisfied, Yambao filed an appeal with the Court of Appeals, docketed as CA-G.R. CV No. 52275, faulting the trial court for failing to appreciate that: (a) it was the victim who ran into her bus, and (b) she had exercised the proper diligence of a bonus pater familias in the selection and supervision of her employee, the driver of said bus.

On September 8, 2000, the Court of Appeals decided CA-G.R. CV No. 52275 as follows:

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WHEREFORE, on the foregoing modificatory premises, and considering that the same result has been reached by the trial court, its Decision dated September 8, 1995 is hereby AFFIRMED. Costs against defendant-appellant. cDCaTS SO ORDERED. 10 While sustaining the trial court's findings that Venturina had been reckless and negligent in driving the petitioner's bus, thus hitting the victim with fatal results, the appellate court, however, found the trial court's reliance on Articles 1755 and 1756 of the Civil Code misplaced. It held that this was a case of quasi-delict, there being no pre-existing contractual relationship between the parties. Hence, the law on common carriers was inapplicable. The court a quo then found the petitioner directly and primarily liable as Venturina's employer pursuant to Article 2180 of the Civil Code as she failed to present evidence to prove that she has observed the diligence of a good father of a family in the selection and supervision of her employees. Yambao then duly moved for reconsideration, but her motion was denied for want of merit. 11 Hence, this petition for review, anchored on the following formulation of issues: I WHETHER OR NOT THE ALLEGATIONS AND EVIDENCE PRESENTED BY THE PETITIONER, THE VICTIM HERMINIGILDO ZUIGA WAS THE ONE WHO BUMPED THE BUS OWNED BY HEREIN PETITIONER CECILIA YAMBAO AND HER HUSBAND AND WHO DISREGARDED THE TRAFFIC RULES AND REGULATIONS AT THE PLACE AND TIME OF THE INCIDENT WHICH UNDOUBTEDLY AND CONCLUSIVELY PROVED THAT IT WAS THE PLAINTIFF'S OWN NEGLIGENCE THAT WAS THE IMMEDIATE AND PROXIMATE CAUSE OF HIS DEATH. II WHETHER OR NOT, PETITIONER CECILIA YAMBAO IS NOT LIABLE FOR ANY DAMAGES AND THAT SHE EXERCISED THE PROPER DILIGENCE OF A GOOD FATHER OF THE FAMILY, BOTH IN THE SELECTION AND SUPERVISION OF HER DRIVER AND/OR EMPLOYEE. 12 At the outset, we must state that the first issue raised by the petitioner is a factual one. Whether a person is negligent or not is a question of fact, 13 which this Court cannot pass upon in a petition for review on certiorari, as our jurisdiction is limited to reviewing errors of law. 14 The resolution of factual issues is the function of the trial court and its findings on these matters are, as a general rule, binding on this Court, 15 more so where these have been affirmed by the Court of Appeals. 16 We have carefully examined and weighed the petitioner's arguments on the first issue submitted, as well as the evidence on record, and find no cogent reason to disregard the cited general rule, much less to reverse the factual findings of the trial court as upheld by the court a quo. Hence, we sustain the trial court's finding, as affirmed by the Court of Appeals, that it was Venturina's reckless and imprudent driving of petitioner's bus, which is the proximate cause of the victim's death. To our mind, therefore, the only issue before the Court properly is whether petitioner exercised the diligence of a good father of a family in the selection and supervision of her employees, thus absolving her from any liability. Petitioner contends that as an employer, she observed the proper diligence of a good father of a family, both in the selection and supervision of her driver and therefore, is relieved from any liability for the latter's misdeed. To support her claim, she points out that when Venturina applied with her as a driver in January 1992, she required him to produce not just his driver's license, but also clearances from the National Bureau of Investigation (NBI), the Philippine National Police, and the barangay where he resides. She also required him to present his Social Security System (SSS) Number prior to accepting him for employment. She likewise stresses that she inquired from Venturina's previous employer about his employment record, and only hired him after it was shown to her satisfaction that he had no blot upon his record. The petitioner's arguments ring hollow and fail to sway this Court. The law governing petitioner's liability, as the employer of bus driver Venturina, is Article 2180 of the Civil Code, the full text of which reads: Art. 2180.The obligation imposed by Article 2176 17 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions . Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry .

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The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable. Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage . (Italics ours). The "diligence of a good father" referred to in the last paragraph of the aforecited statute means diligence in the selection and supervision of employees. 18 Thus, when an employee, while performing his duties, causes damage to persons or property due to his own negligence, there arises the juris tantum presumption that the employer is negligent, either in the selection of the employee or in the supervision over him after the selection. 19 For the employer to avoid the solidary liability for a tort committed by his employee, an employer must rebut the presumption by presenting adequate and convincing proof that in the selection and supervision of his employee, he or she exercises the care and diligence of a good father of a family. 20 In the instant case, we find that petitioner has failed to rebut the presumption of negligence on her part. Petitioner's claim that she exercised due diligence in the selection and supervision of her driver, Venturina, deserves but scant consideration. Her allegation that before she hired Venturina she required him to submit his driver's license and clearances is worthless, in view of her failure to offer in evidence certified true copies of said license and clearances. Bare allegations, unsubstantiated by evidence, are not equivalent to proof under the rules of evidence. 21 Moreover, as the court a quo aptly observed, petitioner contradicts herself. She declared that Venturina applied with her sometime in January 1992 and she then required him to submit his license and clearances. However, the record likewise shows that she did admit that Venturina submitted the said requirements only on May 6, 1992, or on the very day of the fatal accident itself (italics for emphasis). In other words, petitioner's own admissions clearly and categorically show that she did not exercise due diligence in the selection of her bus driver. In any case, assuming arguendo that Venturina did submit his license and clearances when he applied with petitioner in January 1992, the latter still fails the test of due diligence in the selection of her bus driver. Case law teaches that for an employer to have exercised the diligence of a good father of a family, he should not be satisfied with the applicant's mere possession of a professional driver's license; he must also carefully examine the applicant for employment as to his qualifications, his experience and record of service. 22 Petitioner failed to present convincing proof that she went to this extent of verifying Venturina's qualifications, safety record, and driving history. The presumption juris tantum that there was negligence in the selection of her bus driver, thus, remains unrebutted. Nor did petitioner show that she exercised due supervision over Venturina after his selection. For as pointed out by the Court of Appeals, petitioner did not present any proof that she drafted and implemented training programs and guidelines on road safety for her employees. In fact, the record is bare of any showing that petitioner required Venturina to attend periodic seminars on road safety and traffic efficiency. Hence, petitioner cannot claim exemption from any liability arising from the recklessness or negligence of Venturina. In sum, petitioner's liability to private respondents for the negligent and imprudent acts of her driver, Venturina, under Article 2180 of the Civil Code is both manifest and clear. Petitioner, having failed to rebut the legal presumption of negligence in the selection and supervision of her driver, is responsible for damages, the basis of the liability being the relationship of pater familias or on the employer's own negligence. 23 Thus, this Court has no option but to uphold the ruling of the appellate court. WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of Appeals, dated September 8, 2000, in CA-G.R. CV No. 52275, as well as its resolution dated November 27, 2000, denying petitioner Cecilia Yambao's motion for reconsideration are hereby AFFIRMED. Costs against the petitioner. SO ORDERED.

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[G.R. No. 149149. October 23, 2003.] ERNESTO SYKI, petitioner, vs. SALVADOR BEGASA, respondent.

Felino A. Garcia for petitioner. Francisco L. Alisan for respondent.

SYNOPSIS The Court of Appeals affirmed in toto the decision of the trial court that awarded actual and moral damages to respondent Salvador Begasa who suffered physical injuries when the truck owned by petitioner Ernesto Syki and driven by Elizalde Sablayan bumped the rear end of the passenger jeepney where the respondent was then boarding. Thus, Syki filed this petition for review arguing then that the Court of Appeals erred in not finding respondent Begasa guilty of contributory negligence and that he observed the diligence of a good father of a family in the selection and supervision of his driver. The Court ruled that the employer must not merely present testimonial evidence to prove that he observed the diligence of a good father of a family in the selection and supervision of his employee, but he must also support such testimonial evidence with concrete or documentary evidence. In this case, petitioner's evidence consisted entirely of testimonial evidence. The unsubstantiated and selfserving testimonies of petitioner and his mechanic were, without doubt, insufficient to overcome the legal presumption that petitioner was negligent in the selection and supervision of his driver. The trial court also found no negligence on the part of respondent Begasa. This factual finding was affirmed in toto by the Court of Appeals. It must be emphasized that petitions for review under Rule 45 of the Rules of Court should deal only with questions of law. The factual conclusions of the Court of Appeals are given great weight and even finality by the Supreme Court, especially when the appellate court upholds the findings of fact of the trial court. Since the negligence of petitioner's driver was the sole and proximate cause of the accident, petitioner is liable, under Article 2180 of the Civil Code, to pay damages to respondent Begasa for injuries sustained by him.

SYLLABUS 1.CIVIL LAW; QUASI-DELICT; ALLEGATION OF DILIGENCE OF A GOOD FATHER OF A FAMILY MUST BE SUPPORTED BY DOCUMENTARY EVIDENCE. The employer must not merely present testimonial evidence to prove that he observed the diligence of a good father of a family in the selection and supervision of his employee, but he must also support such testimonial evidence with concrete or documentary evidence. The reason for this is to obviate the biased nature of the employer's testimony or that of his witnesses. 2.ID.; ID.; ID.; EMPLOYERS MUST SERIOUSLY OBSERVE SUCH DEGREE OF DILIGENCE THAT WOULD EXCULPATE THEM FROM LIABILITY. It should be emphasized that the legal obligation of employers to observe due diligence in the selection and supervision of their employees provided in Article 2180 of the Civil Code is not an empty provision or a mere formalism since the nonobservance thereof actually becomes the basis of the employers' vicarious liability. Employers should thus seriously observe such a degree of diligence (and prove it in court by sufficient and concrete evidence) that would exculpate them from liability. 3.ID.; ID.; CONTRIBUTORY NEGLIGENCE; A PARTY WHO IS PARTLY RESPONSIBLE FOR HIS OWN INJURY SHOULD NOT BE ENTITLED TO RECOVER DAMAGES IN FULL. Article 2179 on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. 4.ID.; ID.; ID.; ID.; NOT ESTABLISHED IN CASE AT BAR. There was no evidence that respondent Begasa and his three companions flagged down the passenger jeepney in a prohibited area. All the facts showed was that the passenger jeepney was near the corner of Araneta and Magsaysay Streets, Bacolod City when petitioner's driver bumped it from the rear. No city resolution, traffic regulation or DPWH memorandum was presented to show that the passenger jeepney picked up respondent and his three companions in a prohibited area. In fact, the trial court dismissed the case against the driver and owner of the passenger jeepney on the ground that they were not liable, meaning, that no negligence could be attributed to them. The trial court also found no negligence on the part of respondent Begasa. This factual finding was affirmed in toto by the Court of Appeals. 5.REMEDIAL LAW; EVIDENCE CREDIBILITY OF WITNESSES; FACTUAL CONCLUSIONS OF THE COURT OF APPEALS ARE GIVEN GREAT WEIGHT AND EVEN FINALITY BY THE SUPREME COURT. It must be emphasized that petitions for review under Rule 45 of the Rules of Court should deal only with questions of law. The factual conclusions of the Court of Appeals are given great weight and even finality by the Supreme Court, specially when, as in the present case, the appellate court upholds the findings of fact of the trial court. The factual findings of the Court of Appeals can only be overturned if it is shown that such findings are obviously whimsical, capricious and arbitrary, or contrary to the factual findings of the trial court. In this case, we find no reason to overturn the factual findings of the Court of Appeals. Thus, we affirm the appellate court's finding that there was no contributory negligence on the part of respondent. 6.CIVIL LAW; QUASI-DELICT; OWNER OF THE TRUCK IS LIABLE FOR DAMAGES CAUSED BY THE NEGLIGENCE OF ITS DRIVER; CASE AT BAR. In sum, the sole and proximate cause of the accident was the negligence of petitioner's driver who, as found by the lower courts, did not slow down even when he was already approaching a busy intersection within the city proper. The passenger jeepney had long stopped to pick up respondent and his three companions and, in fact, respondent was already partly inside the jeepney when petitioner's driver rear-ended it. The impact was so strong that respondent fell and fractured his left thigh bone (femur), and suffered severe wounds in his left knee and leg. No doubt petitioner's driver was reckless. Since the negligence of

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petitioner's driver was the sole and proximate cause of the accident, petitioner is liable, under Article 2180 of the Civil Code, to pay damages to respondent Begasa for the injuries sustained by him.

DECISION

CORONA, J p: Assailed in this petition for review under Rule 45 of the Rules of Court is the decision 1 dated January 31, 2001 of the Court of Appeals, affirming the decision dated May 5, 1998 of the Regional Trial Court of Negros Occidental, Branch 48, Bacolod City, in Civil Case No. 7458 for damages. The trial court awarded actual and moral damages to herein respondent Salvador Begasa who suffered injuries in an accident due to the negligence of Elizalde Sablayan, the truck driver of petitioner Ernesto Syki. The facts follow. On June 22, 1992, around 11:20 a.m., near the corner of Araneta and Magsaysay Streets, Bacolod City, respondent Salvador Begasa and his three companions flagged down a passenger jeepney driven by Joaquin Espina and owned by Aurora Pisuena. While respondent was boarding the passenger jeepney (his right foot already inside while his left foot still on the boarding step of the passenger jeepney), a truck driven by Elizalde Sablayan and owned by petitioner Ernesto Syki bumped the rear end of the passenger jeepney. Respondent fell and fractured his left thigh bone (femur). He also suffered lacerations and abrasions in his left leg, as follows: 1.Fracture left femur, junction of middle and distal third, comminuted. 2.Lacerated wounds, left poplitial 10 cm. left leg anterior 2.5 cm. AHDaET 3.Abrasion left knee. 2 On October 29, 1992, respondent filed a complaint for damages for breach of common carrier's contractual obligations and quasi-delict against Aurora Pisuena, the owner of the passenger jeepney, herein petitioner Ernesto Syki, the owner of the truck, and Elizalde Sablayan, the driver of the truck. After hearing, the trial court dismissed the complaint against Aurora Pisuena, the owner and operator of the passenger jeepney but ordered petitioner Ernesto Syki and his truck driver, Elizalde Sablayan, to pay respondent Salvador Begasa, jointly and severally, actual and moral damages plus attorney's fees as follows: 1.Actual damages of P48,308.20 less the financial assistance given by defendant Ernesto Syki to plaintiff Salvador Begasa in the amount of P4,152.55 or a total amount of P44,155.65; 2.The amount of P30,000.00 as moral damages; 3.The amount of P20,000.00 as reasonable attorney's fees. 3 Petitioner Syki and his driver appealed to the Court of Appeals. However, the appellate court found no reversible error in the decision of the trial court and affirmed the same in toto. 4 The appellate court also denied their motion for reconsideration. 5 Aggrieved, petitioner Ernesto Syki filed the instant petition for review, arguing that the Court of Appeals erred in not finding respondent Begasa guilty of contributory negligence. Hence, the damages awarded to him (respondent) should have been decreased or mitigated. Petitioner also contends that the appellate court erred in ruling that he failed to observe the diligence of a good father of a family in the selection and supervision of his driver. He asserts that he presented sufficient evidence to prove that he observed the diligence of a good father of a family in selecting and supervising the said employee, thus he should not be held liable for the injuries sustained by respondent. The petition has no merit. Article 2180 of the Civil Code provides: xxx xxx xxx 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 in this article shall cease when the persons herein mentioned prove they observed all the diligence of a good father of a family to prevent damage. From the above provision, when an injury is caused by the negligence of an employee, a legal presumption instantly arises that the employer was negligent in the selection and/or supervision of said employee. The said presumption may be rebutted only by a clear

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showing on the part of the employer that he exercised the diligence of a good father of a family in the selection and supervision of his employee. If the employer successfully overcomes the legal presumption of negligence, he is relieved of liability. 6 In other words, the burden of proof is on the employer. The question is: how does an employer prove that he indeed exercised the diligence of a good father of a family in the selection and supervision of his employee? The case of Metro Manila Transit Corporation vs. Court of Appeals 7 is instructive: In fine, the party, whether plaintiff or defendant, who asserts the affirmative of the issue has the burden of presenting at the trial such amount of evidence required by law to obtain a favorable judgment . . . In making proof in its or his case, it is paramount that the best and most complete evidence is formally entered. CaSHAc Coming now to the case at bar, while there is no rule which requires that testimonial evidence, to hold sway, must be corroborated by documentary evidence, inasmuch as the witnesses' testimonies dwelt on mere generalities, we cannot consider the same as sufficiently persuasive proof that there was observance of due diligence in the selection and supervision of employees. Petitioner's attempt to prove its "deligentissimi patris familias" in the selection and supervision of employees through oral evidence must fail as it was unable to buttress the same with any other evidence, object or documentary, which might obviate the apparent biased nature of the testimony . Our view that the evidence for petitioner MMTC falls short of the required evidentiary quantum as would convincingly and undoubtedly prove its observance of the diligence of a good father of a family has its precursor in the underlying rationale pronounced in the earlier case of Central Taxicab Corp. vs. Ex-Meralco Employees Transportation Co., et al., set amidst an almost identical factual setting, where we held that: The failure of the defendant company to produce in court any 'record' or other documentary proof tending to establish that it had exercised all the diligence of a good father of a family in the selection and supervision of its drivers and buses, notwithstanding the calls therefore by both the trial court and the opposing counsel, argues strongly against its pretensions. We are fully aware that there is no hard-and-fast rule on the quantum of evidence needed to prove due observance of all the diligence of a good father of a family as would constitute a valid defense to the legal presumption of negligence on the part of an employer or master whose employee has by his negligence, caused damage to another. . . . (R)educing the testimony of Albert to its proper proportion, we do not have enough trustworthy evidence left to go by . We are of the considerable opinion, therefore, that the believable evidence on the degree of care and diligence that has been exercised in the selection and supervision of Roberto Leon y Salazar, is not legally sufficient to overcome the presumption of negligence against the defendant company. (emphasis ours) The 1993 ruling in Metro Manila Transit Corporation was reiterated in a recent case again involving the Metro Manila Transit Corporation, 8 thus: In the selection of prospective employees, employers are required to examine them as to their qualifications, experience, and service records. On the other hand, with respect to the supervision of employees, employers should formulate standard operating procedures, monitor their implementation, and impose disciplinary measures for breaches thereof. To establish these factors in a trial involving the issue of vicarious liability, employers must submit concrete proof, including documentary evidence . In this case, MMTC sought to prove that it exercised the diligence of a good father of a family with respect to the selection of employees by presenting mainly testimonial evidence on its hiring procedure. According to MMTC, applicants are required to submit professional driving licenses, certifications of work experience, and clearances from the National Bureau of Investigation; to undergo tests of their driving skills, concentration, reflexes, and vision; and, to complete training programs on traffic rules, vehicle maintenance, and standard operating procedures during emergency cases. xxx xxx xxx Although testimonies were offered that in the case of Pedro Musa all these precautions were followed, the records of his interview, of the results of his examinations, and of his service were not presented. . . . [T]here is no record that Musa attended such training programs and passed the said examinations before he was employed. No proof was presented that Musa did not have any record of traffic violations. Nor were records of daily inspections, allegedly conducted by supervisors, ever presented. . . The failure of MMTC to present such documentary proof puts in doubt the credibility of its witnesses. xxx xxx xxx It is noteworthy that, in another case involving MMTC, testimonial evidence of identical content, which MMTC presented to show that it exercised the diligence of a good father of a family in the selection and supervision of employees and thus avoid vicarious liability for the negligent acts of its employees, was held to be insufficient to overcome the presumption of negligence against it . (emphasis ours) Based therefore on jurisprudential law, the employer must not merely present testimonial evidence to prove that he observed the diligence of a good father of a family in the selection and supervision of his employee, but he must also support such testimonial evidence with concrete or documentary evidence. The reason for this is to obviate the biased nature of the employer's testimony or that of his witnesses. 9

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In this case, petitioner's evidence consisted entirely of testimonial evidence. He testified that before he hired Elizalde Sablayan, he required him to submit a police clearance in order to determine if he was ever involved in any vehicular accident. He also required Sablayan to undergo a driving test conducted by his mechanic, Esteban Jaca. Petitioner claimed that he, in fact, accompanied Sablayan during the driving test and that during the test, Sablayan was taught to read and understand traffic signs like "Do Not Enter," "One Way," "Left Turn" and "Right Turn." ISAaTH Petitioner's mechanic, Esteban Jaca, on the other hand, testified that Sablayan passed the driving test and never figured in any vehicular accident except the one in question. He also testified that he maintained in good condition all the trucks of petitioner by checking the brakes, horns and tires thereof before providing hauling services. 10 Petitioner, however, never presented the alleged police clearance given to him by Sablayan nor the results of Sablayan's driving test. Petitioner also did not present records of the regular inspections that his mechanic allegedly conducted. The unsubstantiated and selfserving testimonies of petitioner and his mechanic were, without doubt, insufficient to overcome the legal presumption that petitioner was negligent in the selection and supervision of his driver. Accordingly, we affirm the ruling of the Court of Appeals that petitioner is liable for the injuries suffered by respondent. It should be emphasized that the legal obligation of employers to observe due diligence in the selection and supervision of their employees provided in Article 2180 of the Civil Code is not an empty provision or a mere formalism since the non-observance thereof actually becomes the basis of the employers' vicarious liability. 11 Employers should thus seriously observe such a degree of diligence (and prove it in court by sufficient and concrete evidence) that would exculpate them from liability. Petitioner next contends that, even if he is liable, the award of damages given to respondent should be decreased or mitigated because respondent was guilty of contributory negligence. Petitioner claims that his driver was allegedly caught unaware when the passenger jeepney hailed by respondent suddenly stopped at the intersection of a national highway. Petitioner argues that, had respondent flagged down the passenger jeepney at the proper place, the accident could have been avoided. 12 Petitioner's contention has no merit. Article 2179 provides: When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. The underlying precept of the above article on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence. 13 In the present case, was respondent partly negligent and thus, should not recover the full amount of the damages awarded by the trial court? We rule in the negative. There was no evidence that respondent Begasa and his three companions flagged down the passenger jeepney in a prohibited area. All the facts showed was that the passenger jeepney was near the corner of Araneta and Magsaysay Streets, Bacolod City when petitioner's driver bumped it from the rear. No city resolution, traffic regulation or DPWH memorandum was presented to show that the passenger jeepney picked up respondent and his three companions in a prohibited area. In fact, the trial court dismissed the case against the driver and owner of the passenger jeepney on the ground that they were not liable, meaning, that no negligence could be attributed to them. The trial court also found no negligence on the part of respondent Begasa. This factual finding was affirmed in toto by the Court of Appeals. 14

It must be emphasized that petitions for review under Rule 45 of the Rules of Court should deal only with questions of law. The factual conclusions of the Court of Appeals are given great weight and even finality by the Supreme Court, specially when, as in the present case, the appellate court upholds the findings of fact of the trial court. The factual findings of the Court of Appeals can only be overturned if it is shown that such findings are obviously whimsical, capricious and arbitrary, or contrary to the factual findings of the trial court. 15 In this case, we find no reason to overturn the factual findings of the Court of Appeals. Thus, we affirm the appellate court's finding that there was no contributory negligence on the part of respondent. In sum, the sole and proximate cause of the accident was the negligence of petitioner's driver who, as found by the lower courts, did not slow down even when he was already approaching a busy intersection within the city proper. 16 The passenger jeepney had long stopped to pick up respondent and his three companions and, in fact, respondent was already partly inside the jeepney when petitioner's driver rear-ended it. The impact was so strong that respondent fell and fractured his left thigh bone (femur), and suffered severe wounds in his left knee and leg. No doubt petitioner's driver was reckless. Since the negligence of petitioner's driver was the sole and proximate cause of the accident, petitioner is liable, under Article 2180 of the Civil Code, to pay damages to respondent Begasa for the injuries sustained by him. DECSIT WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals is AFFIRMED. SO ORDERED.

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[G.R. No. 163186. February 28, 2007.] EMERLITO F. AGUILA and DANILO D. REYES, petitioners, vs. CARMEN R. BALDOVIZO, EDGAR R. BALDOVIZO, and CARMELO R. BALDOVIZO, respondents.

DECISION

QUISUMBING, J p: This petition for review seeks to reverse the Decision 1 dated June 30, 2003 of the Court of Appeals in CA-G.R. CV No. 73321, and its Resolution 2 dated April 1, 2004. The Court of Appeals affirmed the Amended Decision 3 dated August 13, 2001 of the Regional Trial Court (RTC) of Quezon City, Branch 225, which found petitioners jointly and severally liable for damages as a consequence of the death of Fausto T. Baldovizo, spouse of respondent Carmen R. Baldovizo, and father of respondents Edgar and Carmelo Baldovizo. The facts are as follows: On April 19, 1993, at about 11:30 a.m., Marlun Lisbos was driving, along the Epifanio de los Santos Avenue (EDSA) in Caloocan City, a van with Plate No. TER-883, registered under the name of petitioner Danilo D. Reyes. The van sideswiped Fausto who was walking along the pedestrian lane in front of the Monumento Market in Caloocan City. He was crossing EDSA. Fausto fell on the pavement and suffered injuries, and was brought to the Manila Central University Hospital for treatment. Subsequently, Fausto died on July 6, 1993. On May 20, 1994, Marlun Lisbos was charged with reckless imprudence resulting in homicide at the Metropolitan Trial Court of Caloocan City, Branch 52. On September 24, 1994, Fausto's wife, Carmen R. Baldovizo, and children, Edgar and Carmelo, filed before the RTC of Quezon City, Branch 225, a separate complaint for damages against Marlun Lisbos, Danilo D. Reyes, petitioner Emerlito F. Aguila, the actual operator and possessor of the van, and Times Surety and Insurance Company, the insurer of the van under a third-party liability insurance contract. Summons were served on the defendants except Marlun Lisbos whose whereabouts were unknown according to the Sheriff's Report. In his Answer, Aguila claimed that Fausto disregarded traffic rules when he crossed EDSA; that Aguila exercised due diligence in the selection of Lisbos as driver; and that Aguila provided assistance and support during the hospitalization of Fausto. On the other hand, Reyes denied ownership of the van. Although the van was registered in his name, Reyes claimed that Aguila was its actual possessor and operator. Hence, Reyes claimed he could not be liable for damages. Meanwhile, Times Surety and Insurance Company was declared in default for failure to file an Answer. After the parties failed to arrive at a settlement, trial ensued. Petitioners were considered to have waived their right to present their evidence due to their failure to appear on the December 1, 1999 hearing. On March 7, 2000, the trial court rendered a decision. Its decretal portion reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiffs Carmen, Edgar and Carmelo R. Baldovizo and against the defendants Emerlito F. Aguila, Danilo Reyes, Marlun G. Lisbos and Times Surety [a]nd Insurance Co., Inc., ordering the latter to jointly and severally pay the following amounts: 1.P43,800.00 for loss of earning capacity 2.P110,700.00 for medical expenses and hospital bills; and P15,800.07 for medicine expenses incurred after confinement 3.P50,000.00 as death indemnity for the victim 4.P50,000.00 as moral damages 5.P20,000.00 as exemplary damages 6.COSTS OF SUIT. SO ORDERED. 4 On May 4, 2000, petitioners Aguila and Reyes filed a petition for relief from judgment before the RTC of Quezon City, Branch 225. The trial court denied the petition in a Resolution dated November 20, 2000.

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Meanwhile, the Baldovizos moved for the issuance of a writ of execution after the judgment in their favor attained finality. However, petitioners filed (1) a motion for reconsideration of the November 20, 2000 Resolution and (2) a motion to dismiss for lack of jurisdiction on the ground that the certification against forum shopping was defective. On May 21, 2001, the trial court granted the motion for the issuance of a writ of execution and denied petitioners' motions. On June 26, 2001, petitioners filed a motion for reconsideration of the order for the issuance of the writ of execution and informed the trial court of their intention to appeal the November 20, 2000 Resolution denying their petition for relief from judgment. 5 Simultaneously, petitioners filed a second motion for reconsideration of the November 20, 2000 Resolution. 6 On August 13, 2001, the trial court denied the second motion for reconsideration as well as the reconsideration of the order for the issuance of the writ of execution. In addition, the trial court resolved to strike off the name of Marlun Lisbos in the dispositive portion of its March 7, 2000 Decision for having been inadvertently included therein. The decretal portion reads: WHEREFORE, premises considered, the Second Motion For Reconsideration on the Resolutions/Orders denying the petition for relief from judgment is hereby DENIED and the Motion For Reconsideration To The Resolution Granting The Issuance Of A Writ of Execution is likewise DENIED for lack of merit. Further, the name of defendant Marlun Lisbos is ordered stricken off in the dispositive portion of the Decision dated March 7, 2000 and the Court hereby issues an Amended Decision. SO ORDERED. 7 Accordingly, the trial court issued an Amended Decision 8 dated August 13, 2001, which deleted the name of Marlun Lisbos as a party liable for damages. Petitioners Aguila and Reyes appealed the Amended Decision before the Court of Appeals. In denying the appeal for being improper, the appellate court ruled that Aguila and Reyes had lost their right to appeal. Since no appeal of the March 7, 2000 Decision was made within the reglementary period, the decision became final and executory. The Amended Decision did not give the parties a fresh period within which to file an appeal. The appellate court also held that petitioners' attempt to revive their rights in the case failed after their petition for relief from judgment was denied for lack of merit. In any event, the appellate court sustained the Amended Decision which deleted the name of Marlun Lisbos among the parties held liable. The appellate court also denied petitioners' motion for reconsideration. Hence, this petition for review. The lone issue to be resolved in this case is: Do the petitioners have the right to appeal the amended decision after the original decision had become final and executory? Petitioners contend that while their right to appeal the March 7, 2000 Decision of the trial court had been lost, their right to appeal the August 13, 2001 Amended Decision remained. They claim that the Amended Decision superseded the original decision because the amount of their liabilities increased as a result of the exclusion of Marlun Lisbos. They add that the Court of Appeals should have taken cognizance of their appeal since their notice of appeal was approved by the trial court. Petitioners invoke substantial justice for this Court to consider the merits of the case which the appellate court failed to address. They pray that they be absolved from liability. We find petitioners' contentions devoid of merit. Under Section 2, 9 Rule 36 of the Rules of Court, a judgment or final order becomes final and executory if no appeal or motion for new trial or reconsideration was filed within the period provided by the Rules. Before a judgment becomes final and executory, that judgment may be amended. Upon finality of the judgment, the court loses its jurisdiction to amend, modify or alter the same. 10 Except for correction of clerical errors or the making of nunc pro tunc entries which causes no prejudice to any party, or where the judgment is void, the judgment can neither be amended nor altered after it has become final and executory. 11 This is the principle of immutability of final judgment that is subject only to a few exceptions. 12 None of the exceptions are present in this case. Upon review of the records of this case, we note that petitioners received the March 7, 2000 Decision on April 24, 2000 and had until May 9, 2000 to file an appeal or a motion for new trial or reconsideration. During this period, petitioners filed instead a petition for relief from judgment on May 4, 2000. However, the trial court denied the petition. Unfortunately for the petitioners, their petition for relief from judgment was not the proper remedy because it is an extraordinary remedy available only if there are no other remedies. The remedies available to petitioners were the filing of an appeal, motion for reconsideration, or motion for new trial. Thus, the petition for relief from judgment did not toll the running of the reglementary period and, accordingly, the March 7, 2000 Decision became final and executory after the lapse thereof. Nevertheless, while the Resolution dated August 13, 2001, correcting the March 7, 2000 Decision, stated that the name of Marlun Lisbos was inadvertently included in the dispositive portion, hence, said name was ordered stricken off, the ensuing Amended Decision rendered on August 13, 2001 is null and void because any amendment or alteration made which substantially affects the final and executory judgment is null and void for lack of jurisdiction. 13 Although the rule that a judgment that becomes final and executory cannot be disturbed admits of exceptions, none of those are present in this case.

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Besides, it is not necessary to amend the original decision holding the petitioners, Marlun Lisbos, and the insurance company solidarily liable. In an action based on quasi-delict, the liability of the employer is direct and primary, subject to the defense of due diligence in the selection and supervision of the employee. 14 Thus, even if the driver was included albeit not served with summons, petitioners are directly and primarily liable. Thus, petitioners Aguila and Reyes as employer and registered owner or possessor-operator of the van, respectively, are solidarily liable in accordance with Article 2180 15 in relation to Articles 2184 16 and 2194 17 of the Civil Code. In view of the foregoing, there is no basis for petitioners to appeal the Amended Decision which is void. As for petitioners' plea for substantial justice, time and again, we have reminded the litigants that the Rules of Court are not mere tools that they can readily use or discard to serve their own purpose, but they are purposively devised for the proper administration of justice. Litigants should not, after resorting to a wrong remedy, then cry for liberal construction of these rules. For utter disregard of the rules cannot justly be rationalized by merely harking on the policy of liberal construction. 18 WHEREFORE, the petition is DENIED for lack of merit. However, the Amended Decision dated August 13, 2001 of the Regional Trial Court of Quezon City, Branch 225, is declared void for lack of jurisdiction, and its original Decision dated March 7, 2000 is hereby reinstated. The total amount adjudged therein shall earn an interest rate of 6% per annum from the date of judgment of the trial court until finality of this Decision. Thereafter, the total amount adjudged shall earn an interest rate of 12% per annum until it is fully paid. Cost against petitioners. SO ORDERED.

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[G.R. No. 163609. November 27, 2008.] SPS. BUENAVENTURA JAYME AND ROSARIO JAYME, petitioners, vs. RODRIGO APOSTOL, FIDEL LOZANO, ERNESTO SIMBULAN, MAYOR FERNANDO Q. MIGUEL, MUNICIPALITY OF KORONADAL (NOW CITY OF KORONADAL), PROVINCE OF SOUTH COTABATO, represented by the MUNICIPAL TREASURER and/or MUNICIPAL MAYOR FERNANDO Q. MIGUEL, and THE FIRST INTEGRATED BONDING AND INSURANCE COMPANY, INC., respondents.

DECISION

REYES, R.T., J p: MAY a municipal mayor be held solidarily liable for the negligent acts of the driver assigned to him, which resulted in the death of a minor pedestrian? DSIaAE Challenged in this petition for review on certiorari is the Decision 1 of the Court of Appeals (CA) which reversed and set aside the decision of the Regional Trial Court (RTC), Polomolok, Cotabato City, * Branch 39, insofar as defendant Mayor Fernando Q. Miguel is concerned. The CA absolved Mayor Miguel from any liability since it was not he, but the Municipality of Koronadal, that was the employer of the negligent driver. The Facts On February 5, 1989, Mayor Miguel of Koronadal, South Cotabato was on board the Isuzu pick-up truck driven by Fidel Lozano, an employee of the Municipality of Koronadal. 2 The pick-up truck was registered under the name of Rodrigo Apostol, but it was then in the possession of Ernesto Simbulan. 3 Lozano borrowed the pick-up truck from Simbulan to bring Miguel to Buayan Airport at General Santos City to catch his Manila flight. 4 The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then crossing the National Highway in Poblacion, Polomolok, South Cotabato. 5 The intensity of the collision sent Marvin some fifty (50) meters away from the point of impact, a clear indication that Lozano was driving at a very high speed at the time of the accident. 6 Marvin sustained severe head injuries with subdural hematoma and diffused cerebral contusion. 7 He was initially treated at the Howard Hubbard Memorial Hospital. 8 Due to the seriousness of his injuries, he was airlifted to the Ricardo Limso Medical Center in Davao City for more intensive treatment. 9 Despite medical attention, Marvin expired six (6) days after the accident. 10 Petitioners spouses Buenaventura and Rosario Jayme, the parents of Marvin, filed a complaint for damages with the RTC against respondents. 11 In their complaint, they prayed that all respondents be held solidarily liable for their loss. They pointed out that that proximate cause of Marvin's death was Lozano's negligent and reckless operation of the vehicle. They prayed for actual, moral, and exemplary damages, attorney's fees, and litigation expenses. HcTEaA In their respective Answers, all respondents denied liability for Marvin's death. Apostol and Simbulan averred that Lozano took the pickup truck without their consent. Likewise, Miguel and Lozano pointed out that Marvin's sudden sprint across the highway made it impossible to avoid the accident. Yet, Miguel denied being on board the vehicle when it hit Marvin. The Municipality of Koronadal adopted the answer of Lozano and Miguel. As for First Integrated Bonding and Insurance Company, Inc., the vehicle insurer, it insisted that its liability is contributory and is only conditioned on the right of the insured. Since the insured did not file a claim within the prescribed period, any cause of action against it had prescribed. RTC Disposition On January 25, 1999, the RTC rendered judgment in favor of spouses Jayme, the dispositive portion of which reads: WHEREFORE, in view of the foregoing, the defendant Municipality of Koronadal cannot be held liable for the damages incurred by other defendant (sic) being an agency of the State performing a (sic) governmental functions. The same with defendant Hermogenes Simbulan, not being the owner of the subject vehicle, he is absolved of any liability. The complaint against defendant First Integrated Bonding Insurance Company, Inc. is hereby ordered dismissed there being no cause of action against said insurance company. TcHEaI However, defendants Fidel Lozano, Rodrigo Apostol, and Mayor Fernando Miguel of Koronadal, South Cotabato, are hereby ordered jointly and severally to pay the plaintiff (sic) the following sums: 1.One Hundred Seventy Three Thousand One Hundred One and Forty Centavos (P173,101.40) Pesos as actual damages with legal interest of 12% per annum computed from February 11, 1989 until fully paid; aASDTE 2.Fifty Thousand (P50,000.00) Pesos as moral damages; 3.Twenty Thousand (P20,000.00) Pesos as exemplary damages; 4.Twenty Thousand (P20,000.00) Pesos as Attorney's fees;

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5.Fifty Thousand (P50,000.00) Pesos for the death of Marvin Jayme; 6.Three Thousand (P3,000.00) as litigation expenses; and 7.To pay the cost of this suit. SO ORDERED. 12 Dissatisfied with the RTC ruling, Mayor Miguel interposed an appeal to the CA. CA Disposition In his appeal, Mayor Miguel contended that the RTC erred in ruling that he was Lozano's employer and, hence, solidarily liable for the latter's negligent act. Records showed that the Municipality of Koronadal was the driver's true and lawful employer. Mayor Miguel also denied that he did not exercise due care and diligence in the supervision of Lozano. The incident, although unfortunate, was unexpected and cannot be attributed to him. aDSTIC On October 22, 2003, the CA granted the appeal, disposing as follows: WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE, insofar as defendant-appellant Mayor Fernando Q. Miguel is concerned, and the complaint against him is DISMISSED. IT IS SO ORDERED. 13 The CA held that Mayor Miguel should not be held liable for damages for the death of Marvin Jayme. Said the appellate court: Moreover, plaintiffs-appellees admitted that Mayor Miguel was not the employer of Lozano. Thus, paragraph 9 of the complaint alleged that the Municipality of Koronadal was the employer of both Mayor Miguel and Lozano . Not being the employer of Lozano, Mayor Miguel could not thus be held liable for the damages caused by the former. Mayor Miguel was a mere passenger in the Isuzu pick-up at the time of the accident. 14 (Emphasis supplied) DACcIH The CA also reiterated the settled rule that it is the registered owner of a vehicle who is jointly and severally liable with the driver for damages incurred by passengers or third persons as a consequence of injuries or death sustained in the operation of the vehicle. Issues The spouses Jayme have resorted to the present recourse and assign to the CA the following errors: I. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT MAYOR FERNANDO MIGUEL CANNOT BE HELD LIABLE FOR THE DEATH OF MARVIN JAYME WHICH CONCLUSION IS CONTRARY TO LAW AND THE SETTLED PRONOUNCEMENTS OF THIS HONORABLE TRIBUNAL; II. THE FINDINGS OF FACTS OF THE HONORABLE COURT OF APPEALS ARE CONTRARY TO THE FINDINGS OF THE TRIAL COURT AND ARE CONTRADICTED BY THE EVIDENCE ON RECORD; MOREOVER, THE CONCLUSIONS DRAWN BY THE HONORABLE COURT OF APPEALS ARE ALL BASED ON CONJECTURES AND SURMISES AND AGAINST ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHICH URGENTLY CALL FOR AN EXERCISE OF THIS HONORABLE COURT'S SUPERVISION. 15 Our Ruling The doctrine of vicarious liability or imputed liability finds no application in the present case. Spouses Jayme contend, inter alia, that vicarious liability attaches to Mayor Miguel. He was not a mere passenger, but instead one who had direct control and supervision over Lozano during the time of the accident. According to petitioners, the element of direct control is not negated by the fact that Lozano's employer was the Municipality of Koronadal. Mayor Miguel, being Lozano's superior, still had control over the manner the vehicle was operated. TacESD Article 2180 16 of the Civil Code provides that a person is not only liable for one's own quasi-delictual acts, but also for those persons for whom one is responsible for. This liability is popularly known as vicarious or imputed liability. To sustain claims against employers for the acts of their employees, the following requisites must be established: (1) That the employee was chosen by the employer personally or through another; (2) That the service to be rendered in accordance with orders which the employer has the authority to give at all times; and (3) That the illicit act of the employee was on the occasion or by reason of the functions entrusted to him. 17 Significantly, to make the employee liable under paragraphs 5 and 6 of Article 2180, it must be established that the injurious or tortuous act was committed at the time the employee was performing his functions. 18

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Furthermore, the employer-employee relationship cannot be assumed. It is incumbent upon the plaintiff to prove the relationship by preponderant evidence. In Belen v. Belen, 19 this Court ruled that it was enough for defendant to deny an alleged employment relationship. The defendant is under no obligation to prove the negative averment. This Court said: It is an old and well-settled rule of the courts that the burden of proving the action is upon the plaintiff, and that if he fails satisfactorily to show the facts upon which he bases his claim, the defendant is under no obligation to prove his exceptions. This rue is in harmony with the provisions of Section 297 of the Code of Civil Procedure holding that each party must prove his own affirmative allegations, etc. 20 In resolving the present controversy, it is imperative to find out if Mayor Miguel is, indeed, the employer of Lozano and therefore liable for the negligent acts of the latter. To determine the existence of an employment relationship, We rely on the four-fold test. This involves: (1) the employer's power of selection; (2) payment of wages or other remuneration; (3) the employer's right to control the method of doing the work; and (4) the employer's right of suspension or dismissal. 21

Applying the foregoing test, the CA correctly held that it was the Municipality of Koronadal which was the lawful employer of Lozano at the time of the accident. It is uncontested that Lozano was employed as a driver by the municipality. That he was subsequently assigned to Mayor Miguel during the time of the accident is of no moment. This Court has, on several occasions, held that an employeremployee relationship still exists even if the employee was loaned by the employer to another person or entity because control over the employee subsists. 22 In the case under review, the Municipality of Koronadal remains to be Lozano's employer notwithstanding Lozano's assignment to Mayor Miguel. CHaDIT Spouses Jayme argued that Mayor Miguel had at least supervision and control over Lozano and how the latter operated or drove the Isuzu pick-up during the time of the accident. They, however, failed to buttress this claim. Even assuming arguendo that Mayor Miguel had authority to give instructions or directions to Lozano, he still can not be held liable. In Benson v. Sorrell, 23 the New England Supreme Court ruled that mere giving of directions to the driver does not establish that the passenger has control over the vehicle. Neither does it render one the employer of the driver. This Court, in Soliman, Jr. v. Tuazon, 24 ruled in a similar vein, to wit: . . . The fact that a client company may give instructions or directions to the security guards assigned to it, does not, by itself, render the client responsible as an employer of the security guards concerned and liable for their wrongful acts and omissions. Those instructions or directions are ordinarily no more than requests commonly envisaged in the contract for services entered into with the security agency. . . . 25 (Emphasis supplied) HSTAcI Significantly, no negligence may be imputed against a fellow employee although the person may have the right to control the manner of the vehicle's operation. 26 In the absence of an employer-employee relationship establishing vicarious liability, the driver's negligence should not be attributed to a fellow employee who only happens to be an occupant of the vehicle. 27 Whatever right of control the occupant may have over the driver is not sufficient by itself to justify an application of the doctrine of vicarious liability. Handley v. Lombardi 28 is instructive on this exception to the rule on vicarious liability: Plaintiff was not the master or principal of the driver of the truck, but only an intermediate and superior employee or agent. This being so, the doctrine of respondeat superior or qui facit per alium is not properly applicable to him. His power to direct and control the driver was not as master, but only by virtue of the fact that they were both employed by Kruse, and the further fact that as Kruse's agent he was delegated Kruse's authority over the driver. . . . In the case of actionable negligence, the rule is well settled both in this state and elsewhere that the negligence of a subordinate employee or subagent is not to be imputed to a superior employee or agent, but only to the master or principal. (Hilton v. Oliver, 204 Cal. 535 [61 A. L. R. 297, 269 Pac. 425]; Guild v. Brown, 115 Cal. App. 374 [1 Pac. (2d) 528]; Ellis v. Southern Ry. Co., 72 S. C. 464 [2 L. R. A. (N. S.) 378, 52 S. E. 228]; Thurman v. Pittsburgh & M. Copper Co., 41 Mont. 141 [108 Pac. 588]; 2 Cor. Jur., p. 829; and see the elaborate note in 61 A. L. R. 277, and particularly that part commencing at p. 290.) We can see no logical reason for drawing any distinction in this regard between actionable negligence and contributory negligence. . . . 29 The rule was reiterated in Bryant v. Pacific Elec. Ry. Co. 30 and again in Sichterman v. Hollingshead Co. 31 In Swanson v. McQuown, 32 a case involving a military officer who happened to be riding in a car driven by a subordinate later involved in an accident, the Colorado Supreme Court adhered to the general rule that a public official is not liable for the wrongful acts of his subordinates on a vicarious basis since the relationship is not a true master-servant situation. 33 The court went on to rule that the only exception is when they cooperate in the act complained of, or direct or encourage it. 34 In the case at bar, Mayor Miguel was neither Lozano's employer nor the vehicle's registered owner. There existed no causal relationship between him and Lozano or the vehicle used that will make him accountable for Marvin's death. Mayor Miguel was a mere passenger at the time of the accident. ECSHAD Parenthetically, it has been held that the failure of a passenger to assist the driver, by providing him warnings or by serving as lookout does not make the passenger liable for the latter's negligent acts. 35 The driver's duty is not one that may be delegated to others. 36 As correctly held by the trial court, the true and lawful employer of Lozano is the Municipality of Koronadal. Unfortunately for Spouses Jayme, the municipality may not be sued because it is an agency of the State engaged in governmental functions and, hence, immune from suit. This immunity is illustrated in Municipality of San Fernando, La Union v. Firme, 37 where this Court held: It has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the

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discharge of governmental functions and can only be held answerable only if it can be shown that they were acting in proprietary capacity. In permitting such entities to be sued, the State merely gives the claimant the right to show that the defendant was not acting in governmental capacity when the injury was committed or that the case comes under the exceptions recognized by law. Failing this, the claimant cannot recover. 38 Verily, liability attaches to the registered owner, the negligent driver and his direct employer. The CA observation along this line are worth restating: Settled is the rule that the registered owner of a vehicle is jointly and severally liable with the driver for damages incurred by passengers and third persons as a consequence of injuries or death sustained in the operation of said vehicles. Regardless of who the actual owner of the vehicle is, the operator of record continues to be the operator of the vehicle as regards the public and third persons, and as such is directly and primarily responsible for the consequences incident (sic) to its operation . . . . 39 The accidental death of Marvin Jayme is a tragic loss for his parents. However, justice demands that only those liable under our laws be held accountable for Marvin's demise. Justice can not sway in favor of petitioners simply to assuage their pain and loss. The law on the matter is clear: only the negligent driver, the driver's employer, and the registered owner of the vehicle are liable for the death of a third person resulting from the negligent operation of the vehicle. HAaScT WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED. SO ORDERED.

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[G.R. No. 71137. October 5, 1989.] SPOUSES FEDERICO FRANCO and FELICISIMA R. FRANCO, petitioners, vs. INTERMEDIATE APPELLATE COURT, ANTONIO REYES, MRS. SUSAN CHUAY and LOLITA LUGUE, respondents.

SYLLABUS 1.CIVIL PROCEDURE; ACTION FOR DAMAGES; SUBSIDIARY LIABILITY OF THE EMPLOYEE UNDER THE PRC AND THE EMPLOYER'S PRIMARY LIABILITY UNDER THE CIVIL CODE, DISTINGUISHED. Distinction should be made between the subsidiary liability of the employer under the Revised Penal Code and the employer's primary liability under the Civil Code which is quasi-delictual or tortious in character. The first type of liability is governed by Articles 102 and 103 of the Revised Penal Code while the second kind is governed by the provisions of the Civil Code. 2.ID.; ID.; EMPLOYER'S SUBSIDIARY LIABILITY UNDER THE R.P.C. DEPENDENT UPON THE EMPLOYEE'S ACTUAL LIABILITY FOR CRIMINAL NEGLIGENCE. Under Article 103 of the Revised Penal Code, liability originates from a delict committed by the employee who is primarily liable therefor and upon whose primary liability his employer's subsidiary liability is to be based. Before the employer's subsidiary liability may be proceeded against, it is imperative that there should be a criminal action whereby the employee's criminal negligence or delict and corresponding liability therefor are proved. If no criminal action was instituted, the employer's liability would not be predicated under Article 103. The conviction of the employee primarily liable is a condition sine qua non for the employer's subsidiary liability. There can be no automatic subsidiary liability of defendant employer under Article 103 of the Revised Penal Code where his employee has not been previously criminally convicted. 3.ID.; ID.; LIABILITY BASED ON CULPA AQUILIANA. Under Articles 2176 and 2180 of the Civil Code, liability is based on culpa aquiliana which holds the employer primarily liable for tortious acts of its employees subject, however, to the defense that the former exercised all the diligence of a good father of a family in the selection and supervision of his employees. 4.ID.; FACTUAL DETERMINATIONS OF APPELLATE AND TRIAL COURTS ACCORDED A CERTAIN MEASURE OF FINALITY BY THE SUPREME COURT. A painstaking review of the evidence presented in the case at bar fails to disclose any evidence or circumstance of note sufficient to overrule said factual findings and conclusions, the Court is inclined to likewise reject petitioners' affirmative defense of due diligence. The wisdom of this stance is made more apparent by the fact that the appellate court's conclusions are based on the findings of the lower court which is in a better position to evaluate the testimonies of the witnesses during trial. As a rule, this Court respects the factual findings of the appellate and trial courts and accord them a certain measure of finality. 5.ID.; APPEAL; APPELLEE WHO DID NOT APPEAL NOT ENTITLED TO MODIFICATION ON REVERSAL OF JUDGMENT. While an appellee who is not also an appellant may assign error in his brief if his purpose is to maintain the judgment on other grounds, he cannot ask for modification or reversal of the judgment or affirmative relief unless he has also appealed. For failure of plaintiffsappellees, herein private respondents, to appeal the lower court's judgment, the amount of actual damages cannot exceed that awarded by it. The records show that plaintiffs-private respondents limited their claim for actual and compensatory damages to the supposed average income for a period of one (1) year of P6,000.00 for the driver Magdaleno Lugue and P12,000.00 for the Chinese businessman Fernando Chuay. We feel that our award should not exceed the said amounts. 6.ID.; ID.; INCREASE IN AWARDS OF DEATH INDEMNITY JUSTIFIED. The increase in awards for indemnity arising from death to P30,000.00 each remains, the same having been made in accordance with prevailing jurisprudence decreeing such increase in view of the depreciated Philippine currency.

DECISION

FERNAN, J p: The instant petition for review of a decision of the Court of Appeals deals mainly with the nature of an employer's liability for his employee's negligent act. At about 7:30 in the evening of October 18, 1974, Macario Yuro swerved the northbound Franco Bus with Plate No. XY-320-PUB he was driving to the left to avoid hitting a truck with a trailer parked facing north along the cemented pavement of the MacArthur Highway at Barrio Talaga, Capas, Tarlac, thereby taking the lane of an incoming Isuzu Mini Bus bearing Plate No. YL-735 being driven by one Magdaleno Lugue and making a collision between the two (2) vehicles an unavoidable and disastrous eventuality. Dragged fifteen (15) meters from the point of impact (midway the length of the parked truck with trailer), the mini bus landed right side down facing south in the canal of the highway, a total wreck. The Franco Bus was also damaged but not as severely. The collision resulted in the deaths of the two (2) drivers, Macario Yuro and Magdaleno Lugue, and two (2) passengers of the mini bus, Romeo Bue and Fernando Chuay. Consequently, Antonio Reyes, the registered owner of the Isuzu Mini Bus, Mrs. Susan Chuay, the wife of victim Fernando Chuay, and Mrs. Lolita Lugue, the wife of driver-victim Magdaleno Lugue, filed an action for damages through reckless imprudence before the Court of First Instance of Pampanga in Angeles City, Branch IV, docketed as Civil Case No. 2154 against Mr. & Mrs. Federico Franco, the owners and operators of the Franco Transportation Company. The complaint alleged that: (a) the recklessness and imprudence of the Franco Bus driver caused the collision which resulted in his own death and that of the mini bus driver and two (2) other passengers thereof; (b) that as a consequence of the vehicular mishap, the Isuzu Mini Bus became a total wreck resulting in actual damages amounting to P50,000.00 and the loss of an average net income of P120.00 daily or P3,600.00 monthly multiplied by a minimum of one more year of serviceability of said mini bus or P40,200.00; and, (c) that in view of the death of the three (3) passengers aforementioned,

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the heirs of each should be awarded a minimum of P12,000.00 and the expected average income of P6,000.00 each of the driver and one of the passengers and P12,000.00 of the Chinese businessman passenger. In answer to the complaint, defendants set up, among others, the affirmative defense that as owners and operators of the Franco Transportation Company, they exercised due diligence in the selection and supervision of all their employees, including the deceased driver Macario Yuro. Said defense was, however, rejected by the trial court in its decision 1 dated May 17, 1978, for the reason that the act of the Franco Bus driver was a negligent act punishable by law resulting in a civil obligation arising from Article 103 of the Revised Penal Code and not from Article 2180 of the Civil Code. It said: "This is a case of criminal negligence out of which civil liability arises, and not a case of civil negligence and the defense of having acted like a good father of a family or having trained or selected the drivers of his truck is no defense to avoid civil liability." 2 On this premise, the trial court ruled as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs, Antonio Reyes, Lolita Lugue, and Susan Chuay, and against the defendants Mr. and Mrs. Federico Franco, ordering the latter: (1)To pay Antonio Reyes, actual and compensatory damages in the amount of P90,000.00 for the Isuzu Mini Bus; (2)To pay Lolita Lugue, the widow of Magdaleno Lugue, actual and compensatory damages in the total sum of P18,000.00; (3)To pay Susan Chuay, the widow of Fernando Chuay, actual and compensatory damages in the total sum of P24,000.00; and (4)To pay attorney's fee in the amount of P5,000.00;. All with legal interests from the filing of this suit on November 11, 1974 until paid; and the costs of this suit. SO ORDERED. 3 On appeal by herein petitioners as defendants-appellants, respondent appellate court, agreeing with the lower court, held that defendants-appellants' driver who died instantly in the vehicular collision, was guilty of reckless or criminal imprudence punishable by law in driving appellants' bus that the civil obligation of the appellants arises from Article 103 of the Revised Penal Code resulting in the subsidiary liability of the appellants under the said provision; 4 that the case subject of appeal is one involving culpable negligence out of which civil liability arises and is not one of civil negligence; 5 and that there is nothing in Articles 102 and 103 of the Revised Penal Code which requires a prior judgment of conviction of the erring vehicle driver and his obligation to pay his civil liability before the said provisions can be applied. 6 Respondent appellate court increased the award of damages granted by the lower court as follows: WHEREFORE, the decision appealed from is hereby modified as follows: 1.To pay Susan Chuay, widow of Fernando Chuay, the sum of P30,000.00 for the latter's death and P112,000.00 for loss of earning capacity; 2.To pay Lolita Lugue, widow of Magdaleno Lugue, the sum of P30,000.00 for the latter's death and P62,000.00 for loss of earning capacity. The rest of the judgment appealed from is affirmed. Costs against defendants-appellants. SO ORDERED. 7 On April 1, 1985, petitioners filed a motion for reconsideration of the aforesaid respondent appellate court's decision dated January 2, 1985 but the same was denied on May 13, 1985. Hence, the instant petition raising two (2) legal questions: first, whether the action for recovery of damages instituted by herein private respondents was predicated upon crime or quasi-delict; and second, whether respondent appellate court in an appeal filed by the defeated parties, herein petitioners, may properly increase the award of damages in favor of the private respondents Chuay and Lugue, prevailing parties in the lower court, who did not appeal said court's decision.

Petitioners contend that the allegations in paragraph 9 of the Amended Complaint 8 of herein private respondents as plaintiffs in Civil Case No. 2154 unequivocally claim that the former as the employers of Macario Yuro, the driver of the Franco Bus who caused the vehicular mishap, are jointly and severally liable to the latter for the damages suffered by them which thus makes Civil Case No. 2154 an action predicated upon a quasi-delict under the Civil Code subject to the defense that the employer exercised all the diligence of a good father of a family in the selection and supervision of their employees. We find merit in this contention. Distinction should be made between the subsidiary liability of the employer under the Revised Penal Code and the employer's primary liability under the Civil Code which is quasi-delictual or tortious in character. The first type of liability is governed by Articles 102 and 103 of the Revised Penal Code which provide as follows: Art. 102.Subsidiary civil liability of innkeepers, tavern-keepers and proprietors of establishments. In default of the persons criminally liable, innkeepers, tavernkeepers, and any other persons or corporations shall be civilly liable for crimes committed in their establishments, in all cases where a violation of municipal ordinances or some general or special police regulations shall have been committed by them or their employees.

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Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their houses from guests lodging therein, or for the payment of the value thereof, provided that such guests shall have notified in advance the innkeeper himself, or the person representing him, of the deposits of such goods within the inn; and shall furthermore have followed the directions which such innkeeper or his representative may have given them with respect to the care and vigilance over such goods. No liability shall attach in case of robbery with violence against or intimidation of persons unless committed by the innkeeper's employees. Art. 103.Subsidiary civil liability of other persons . The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by the servants, pupils, workmen, apprentices, or employees in the discharge of their duties; while the second kind is governed by the following provisions of the Civil Code: 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. 2177.Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant. Art. 2180.The obligations imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. xxx xxx xxx 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. Under Article 103 of the Revised Penal Code, liability originates from a delict committed by the employee who is primarily liable therefor and upon whose primary liability his employer's subsidiary liability is to be based. Before the employer's subsidiary liability may be proceeded against, it is imperative that there should be a criminal action whereby the employee's criminal negligence or delict and corresponding liability therefor are proved. If no criminal action was instituted, the employer's liability would not be predicated under Article 103. 9 In the case at bar, no criminal action was instituted because the person who should stand as the accused and the party supposed to be primarily liable for the damages suffered by private respondents as a consequence of the vehicular mishap died. Thus, petitioners' subsidiary liability has no leg to stand on considering that their liability is merely secondary to their employee's primary liability. Logically therefore, recourse under this remedy is not possible. On the other hand, under Articles 2176 and 2180 of the Civil Code, liability is based on culpa aquiliana which holds the employer primarily liable for tortious acts of its employees subject, however, to the defense that the former exercised all the diligence of a good father of a family in the selection and supervision of his employees. Respondent appellate court relies on the case of Arambulo, supra, where it was held that the defense of observance of due diligence of a good father of a family in the selection and supervision of employees is not applicable to the subsidiary liability provided in Article 20 of the Penal Code (now Article 103 of the Revised Penal Code). By such reliance, it would seem that respondent appellate court seeks to enforce the subsidiary civil liability of the employer without a criminal conviction of the party primarily liable therefor. This is not only erroneous and absurd but is also fraught with dangerous consequences. It is erroneous because the conviction of the employee primarily liable is a condition sine qua non for the employer's subsidiary liability 10 and, at the same time, absurd because we will be faced with a situation where the employer is held subsidiarily liable even without a primary liability being previously established. It is likewise dangerous because, in effect, the employer's subsidiary liability would partake of a solidary obligation resulting in the law's amendment without legislative sanction. The Court in the aforecited M.D. Transit case went further to say that there can be no automatic subsidiary liability of defendant employer under Article 103 of the Revised Penal Code where his employee has not been previously criminally convicted. Having thus established that Civil Case No. 2154 is a civil action to impose the primary liability of the employer as a result of the tortious act of its alleged reckless driver, we confront ourselves with the plausibility of defendants-petitioners' defense that they observed due diligence of a good father of a family in the selection and supervision of their employees. On this point, the appellate court has unequivocally spoken in affirmation of the lower court's findings, to wit: Anyway, a perusal of the record shows that the appellants were not able to establish the defense of a good father of a family in the supervision of their bus driver. The evidence presented by the appellants in this regard is purely self-serving. No independent evidence was presented as to the alleged supervision of appellants' bus drivers, especially with regard to driving habits and reaction to actual traffic conditions. The appellants in fact admitted that the only kind of supervision given the drivers referred to the running time between the terminal points of the line (t.s.n., September 16, 1976, p. 21). Moreover, the appellants who ran a fleet of 12 buses plying the Manila-Laoag

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line, have only two inspectors whose duties were only ticket inspection. There is no evidence that they are really safety inspectors. 11 Basically, the Court finds that these determinations are factual in nature. As a painstaking review of the evidence presented in the case at bar fails to disclose any evidence or circumstance of note sufficient to overrule said factual findings and conclusions, the Court is inclined to likewise reject petitioners' affirmative defense of due diligence. The wisdom of this stance is made more apparent by the fact that the appellate court's conclusions are based on the findings of the lower court which is in a better position to evaluate the testimonies of the witnesses during trial. As a rule, this Court respects the factual findings of the appellate and trial courts and accord them a certain measure of finality. 12 Consequently, therefore, we find petitioners liable for the damages claimed pursuant to their primary liability under the Civil Code. On the second legal issue raised in the instant petition, we agree with petitioners' contention that the Intermediate Appellate Court (later Court of Appeals) is without jurisdiction to increase the amount of damages awarded to private respondents Chuay and Lugue, neither of whom appealed the decision of the lower court. While an appellee who is not also an appellant may assign error in his brief if his purpose is to maintain the judgment on other grounds, he cannot ask for modification or reversal of the judgment or affirmative relief unless he has also appealed. 13 For failure of plaintiffs-appellees, herein private respondents, to appeal the lower court's judgment, the amount of actual damages cannot exceed that awarded by it. 14 Furthermore, the records 15 show that plaintiffs-private respondents limited their claim for actual and compensatory damages to the supposed average income for a period of one (1) year of P6,000.00 for the driver Magdaleno Lugue and P12,000.00 for the Chinese businessman Fernando Chuay. We feel that our award should not exceed the said amounts. 16 However, the increase in awards for indemnity arising from death to P30,000.00 each remains, the same having been made in accordance with prevailing jurisprudence decreeing such increase in view of the depreciated Philippine currency. 17

WHEREFORE, the decision of the Court of Appeals is hereby modified decreasing the award to private respondents of actual and compensatory damages for loss of average income for the period of one year to P6,000.00 for the deceased Magdaleno Lugue and P12,000.00 for the deceased Fernando Chuay. The rest of the judgment appealed from is hereby affirmed. Costs against the private respondents. This decision is immediately executory. SO ORDERED.

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[G.R. No. L-32055. February 26, 1988.] REYNALDO BERMUDEZ, SR., and ADONITA YABUT BERMUDEZ, petitioners-appellants, vs. HON. JUDGE A. MELENCIO-HERRERA, DOMINGO PONTINO y TACORDA and CORDOVA NG SUN KWAN, respondentsappellees.

SYLLABUS 1.CIVIL LAW; DAMAGES; INDEPENDENT CIVIL ACTIONS; OPTIONS AVAILABLE TO A VICTIM OF RECKLESS IMPRUDENCE. In cases of negligence, the injured party or his heirs has the choice between an action to enforce the civil liability arising from crime under Article 100 of the Revised Penal Code and an action for quasi-delict under Article 2176-2194 of the Civil Code. If a party chooses the latter, he may hold the employer solidarily liable for the negligent act of his employee, subject to the employer's defense of exercise of the diligence of a good father of the family. 2.ID.; ID.; ID.; RIGHT TO FILE ACTION MAY BE MADE EVEN WITHOUT RESERVATION. In the case at bar, the action filed by appellant was an action for damages based on quasi-delict. The fact that appellants reserved their right in the criminal case to file an independent civil action did not preclude them from choosing to file a civil action for quasi-delict. The appellant precisely made a reservation to file an independent civil action in accordance with the provisions of Section 2 of Rule 111, Rules of Court. In fact, even without such a reservation, we have allowed the injured party in the criminal case which resulted in the acquittal of the accused to recover damages based on quasi-delict. In People vs. Ligon, G.R. No. 74041, we held: "However, it does not follow that a person who is not criminally liable is also free from civil liability. While the guilt of the accused in a criminal prosecution must be established beyond reasonable doubt, only a preponderance of evidence is required in a civil action for damages (Article 29, Civil Code). The judgment of acquittal extinguishes the civil liability of the accused only when it includes a declaration that the facts from which the civil liability might arise did not exist (Padilla vs. Court of Appeals, 129 SCRA 559).

DECISION

YAP, J p: This is a direct appeal on pure questions of law from the Order of March 10, 1970 of the Honorable Judge (now Supreme Court Justice) Ameurfina Melencio-Herrera of the defunct Court of First Instance of Manila, Branch XVII, dismissing plaintiffs-appellants' complaint in Civil Case No. 77188 entitled "Reynaldo Bermudez, Sr. and Adonita Yabut Bermudez, plaintiffs, versus Domingo Pontino y Tacorda and Cordova Ng Sun Kwan, defendants," and from the Order of May 7, 1970 denying plaintiffs-appellants' Motion for Reconsideration. The background facts of the case are as follows: A cargo truck, driven by Domingo Pontino and owned by Cordova Ng Sun Kwan, bumped a jeep on which Rogelio, a six-year old son of plaintiffs-appellants, was riding. The boy sustained injuries which caused his death. As a result, Criminal Case No. 92944 for Homicide Through Reckless Imprudence was filed against Domingo Pontino by the Manila City Fiscal's Office. Plaintiffs-appellants filed on July 27, 1969 in the said criminal case "A Reservation to File Separate Civil Action." On July 28, 1969, the plaintiffs-appellants filed a civil case for damages with the Court of First Instance of Manila docketed as Civil Case No. 77188, entitled "Reynaldo Bermudez, Sr., et al., Plaintiffs, vs. Domingo Pontino y Tacorda and Cordova Ng Sun Kwan, Defendants." Finding that the plaintiffs instituted the action "on the assumption that defendant Pontino's negligence in the accident of May 10, 1969 constituted a quasi-delict," the trial court stated that plaintiffs had already elected to treat the accident as a "crime" by reserving in the criminal case their right to file a separate civil action. That being so, the trial court decided to order the dismissal of the complaint against defendant Cordova Ng Sun Kwan and to suspend the hearing of the case against Domingo Pontino until after the criminal case for Homicide Through Reckless Imprudence is finally terminated. From said order, plaintiffs filed the present appeal, stating as their main reasons the following: I.The main issue brought before this Honorable Court is whether the present action is based on quasi-delict under the Civil Code and therefore could proceed independently of the criminal case for homicide thru reckless imprudence. II.The second question of law is whether the lower court could properly suspend the hearing of the civil action against Domingo Pontino and dismissed the civil case against his employer Cordova Ng Sun Kwan by reason of the fact that a criminal case for homicide thru reckless imprudence is pending in the lower court against Domingo Pontino. III.The last question of law is whether the suspension of the civil action against Domingo Pontino and the dismissal of the civil case against his employer Cordova Ng Sun Kwan by reason of the pending criminal case against Domingo Pontino for homicide thru reckless imprudence in the lower court could be validly done considering that the civil case against said defendants-appellees also sought to recover actual damages to the jeep of plaintiffsappellants." We find the appeal meritorious. The heart of the issue involved in the present case is whether the civil action filed by the plaintiffs-appellants is founded on crime or on quasi-delict. The trial court treated the case as an action based on a crime in view of the reservation made by the offended party in the criminal case (Criminal Case No. 92944), also pending before the court, to file a separate civil action. Said the trial court:

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"It would appear that plaintiffs instituted this action on the assumption that defendant Pontino's negligence in the accident of May 10, 1969 constituted a quasi-delict. The Court cannot accept the validity of that assumption. In Criminal Case No. 92944 of this Court, plaintiffs had already appeared as complainants. While that case was pending, the offended parties reserved the right to institute a separate civil action . If, in a criminal case, the right to file a separate civil action for damages is reserved, such civil action is to be based on crime and not on tort. That was the ruling in Joaquin vs. Aniceto, L-18719, Oct. 31, 1964." We do not agree. The doctrine in the case cited by the trial court is inapplicable to the instant case. In Joaquin vs. Aniceto, the Court held: "The issue in this case is: May an employee's primary civil liability for crime and his employer's subsidiary liability therefor be proved in a separate civil action even while the criminal case against the employee is still pending? To begin with, obligations arise from law, contract, quasi-contract, crime and quasi-delict. According to appellant, her action is one to enforce the civil liability arising from crime. With respect to obligations arising from crimes, Article 1161 of the New Civil Code provides: 'Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary, Title, on Human Relations, and of Title XVIII of this book, regulating damages.' xxx xxx xxx It is now settled that for an employer to be subsidiarily liable, the following requisites must be present: (1) that an employee has committed a crime in the discharge of his duties; (2) that said employee is insolvent and has not satisfied his civil liability; (3) that the employer is engaged in some kind of industry. (1 Padilla, Criminal Law, Revised Penal Code 794 [1964]). Without the conviction of the employee, the employer cannot be subsidiarily liable." In cases of negligence, the injured party or his heirs has the choice between an action to enforce the civil liability arising from crime under Article 100 of the Revised Penal Code and an action for quasi-delict under Article 2176-2194 of the Civil Code. If a party chooses the latter, he may hold the employer solidarily liable for the negligent act of his employee, subject to the employer's defense of exercise of the diligence of a good father of the family. In the case at bar, the action filed by appellant was an action for damages based on quasi-delict 1 The fact that appellants reserved their right in the criminal case to file an independent civil action did not preclude them from choosing to file a civil action for quasi-delict. The appellants invoke the provisions of Sections 1 and 2 of Rule 111 of the Rules of Court, which provide: "Section 1. Institution of criminal and civil action. When a criminal action is instituted, the civil action for recovery of civil liability arising from the offense charged is impliedly instituted with the criminal action, unless the offended party expressly waives the civil action or reserves his right to institute it separately. "Section 2. Independent civil action. In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil action entirely separate and distinct from the criminal action, may be brought by the injured party during the pendency of the criminal case, provided the right is reserved as required in the preceding section. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence." Article 2177 of the Civil Code, cited in Section 2, of Rule 111, provides that "Article 2177.Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant." The appellant precisely made a reservation to file an independent civil action in accordance with the provisions of Section 2 of Rule 111, Rules of Court. In fact, even without such a reservation, we have allowed the injured party in the criminal case which resulted in the acquittal of the accused to recover damages based on quasi-delict. In People vs. Ligon, G.R. No. 74041, we held:

"However, it does not follow that a person who is not criminally liable is also free from civil liability. While the guilt of the accused in a criminal prosecution must be established beyond reasonable doubt, only a preponderance of evidence is required in a civil action for damages (Article 29, Civil Code). The judgment of acquittal extinguishes the civil liability of the accused only when it includes a declaration that the facts from which the civil liability might arise did not exist (Padilla vs. Court of Appeals, 129 SCRA 559). WHEREFORE, we grant the petition and annul and set aside the appealed orders of the trial court, dated March 10, 1970 and May 7, 1970, and remand the case for further proceedings. No costs. SO ORDERED.

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[G.R. No. 59621. February 23, 1988.] MAXIMILIANO ALVAREZ, petitioner, vs. HON. COURT OF APPEALS, HON. MILAGROS V. CAGUIOA, as Presiding Judge of Branch VIII, Court of First Instance of Quezon & Lucena City, Atty. ELENO M. JOYAS, as Provincial Sheriff of Quezon, FRANCISCO T. FORTUNADO, Deputy Sheriff of Quezon and ATTY. FELICISIMO S. GARIN, respondents.

SYLLABUS 1.CRIMINAL LAW; CIVIL LIABILITY; SUBSIDIARY LIABILITY OF EMPLOYERS; AUTOMATICALLY ATTACHES UPON EMPLOYEE'S CONVICTION AND PROOF OF INSOLVENCY. It is already a settled rule that the subsidiary liability of an employer automatically arises upon his employee's conviction, and subsequent proof of inability to pay. In this light, the application of Pajarito is merely the enforcement of a procedural remedy designed to ease the burden of litigation for recovery of indemnity by the victims of a judiciallydeclared criminally negligent act. As had been aptly stated, "A separate civil action may be warranted where additional facts have to be established or more evidence must be adduced or where the criminal case has been fully terminated and a separate complaint would be just as efficacious or even more expedient than a time remand to the trial court where the criminal action was decided for further hearings on the civil aspects of the case. . . . These do not exist in this case. Considering more over the delays suffered by the case in the trial, appellate, and review stages, it would be unjust to the complainants in this case to require at this time a separate civil action to be filed." (Emphasis supplied). 2.REMEDIAL LAW; ACTIONS; "LAW OF THE CASE"; RULE OF CONVENIENCE TO STABILIZE JUDICIAL DECISIONS OF TRIBUNALS OF COORDINATE JURISDICTION. The principle of "law of the case" as discussed in People vs. Pinuila is not applicable to a Court of Appeals decision at odds with this Court's decision, and where the Supreme Court still has the power to decide on the applicable doctrine to the issue at hand. The rule cannot be utilized to accomplish injustice or manifest delay in the execution of justice. The principle is merely a rule of convenience and public policy to stabilize judicial decisions of tribunals of coordinate jurisdiction, to prevent re-litigation of questions in the same action, and to obviate undue prolongation of litigation, purposes which would be negated if Pajarito were not to be applied in this case simply because of purely technical reasons not touching on the merits of the case. 3.LEGAL ETHICS; ATTORNEYS; REFUSAL TO RECEIVE SERVICE OF JUDGMENT, CENSURABLE. There is sufficient evidence to hold that counsel for respondents, Felicisimo S. Garin, deliberately skirted the first service on him of the Court of Appeals judgment of 16 May 1980. He wanted it served on him at his own convenience. We note his action with great disapproval. As an officer of the court, he must conduct himself with candor and sincerity. He is warned that any repetition of this or similar misconduct will be dealt with severely.

DECISION

PADILLA, J p: Petition for review on certiorari of the Resolution * of the Court of Appeals dated 23 October 1980 in CA-G.R. No. SP-10069, entitled "Maximiliano Alvarez, petitioner, versus Hon. Milagros V. Caguioa, etc. et al., respondents" setting aside its earlier decision of 16 May 1980, ** and the Resolution dated 20 January 1982 denying petitioner's Motion for Reconsideration of the Resolution of 23 October 1980. Renato Ramos was charged with Double Homicide with Multiple Serious Physical Injuries Through Reckless Imprudence in the Court of First Instance of Quezon Province. After trial, the court rendered judgment against the accused, the dispositive part of which reads as follows: "This Court, therefore, finds the accused Renato Ramos guilty of negligence and sentences him to pay a fine of TWO HUNDRED (P200.00) PESOS, with subsidiary imprisonment in case of insolvency. He is civilly liable for the death and physical injuries that resulted from the collision of the sakbayan and the weapon's [sic] carrier. He should indemnify the heirs of the deceased Rodolfo Briones, the amount of TWELVE THOUSAND (P12,000.00) PESOS, as actual damages; the heirs of the deceased Juan Briones, the amount of TWELVE THOUSAND (P12,000.00) PESOS, as actual damages; Socorro Briones, the amount of FIFTEEN THOUSAND (P15,000.00) PESOS, hospitalization and burial expenses; Exaltacion de Gala, the amount of THREE THOUSAND (P3,000.00) PESOS, hospitalization and incidental expenses; Basilica de Gala, the amount of THREE THOUSAND (P3,000.00) PESOS, hospitalization and incidental expenses; to Joselito Leonor and Cenon Leonor, for actual damages and for permanent facial deformity, the amount of FIFTEEN THOUSAND (P15,000.00) PESOS and for attorney's fees, the amount of TWO THOUSAND (P2,000.00) PESOS . . . "The records show that Maximiliano Alvarez is engaged in his business of buying coconuts and copra for resale, therefore, he is '. . . engaged in any kind of industry . . .' He should, therefore, be subsidiarily liable and pay the amount above-mentioned to the persons concerned jointly and severally with Renato Ramos. The bail bond filed by the accused Renato Ramos for his provisional liberty is hereby ordered cancelled." 1 The accused appealed to the Court of Appeals, where the appeal was docketed as CA-G.R. No. 19077-CR. On 13 December 1977, the Court of Appeals affirmed the trial court's decision but deleted that part thereof making herein petitioner, as employer of Renato Ramos, subsidiarily liable for payment of the adjudged indemnities to the offended parties. The Court of Appeals, in said CA-G.R. No. 19077CR, reasoned thus:

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"There is merit in the appellant's contention that the trial court erred in ordering Maximiliano Alvarez to be subsidiarily liable with the appellant in the payment of the indemnities awarded in favor of the offended parties and the heirs of the deceased. Maximilliano Alvarez is not a party in this action. Altho it is the law that employers are subsidiarily liable for the civil liability of their employees for felonies committed in the discharge of the latter's duties if they are engaged in any kind of industry (Art. 103, Revised Penal Code), such subsidiary liability is not litigated in connection with the criminal prosecution of the employees and may not therefore be adjudged therein (Philippine Railways Company v. Jalandoni, CA, 40 O.G. 19). It is true that the judgment of conviction in the criminal case binds the person subsidiarily liable with the accused (Martinez v. Barredo, 81 Phil. 1), and it is therefore the duty of the employer to participate in the defense of his employee (Miranda v. Malate Garage, 99 Phil. 670). The law, however, does not authorize that the subsidiary liability of the employer be adjudged in the criminal action. This is because, in the criminal proceeding, the employer, not being a party, is denied the opportunity to present his defense against such subsidiary liability, such as, his not being engaged in any kind of industry or that the crime committed by his employee was not on the occasion of the discharge of the latter's duties. Due regard to due process and observance of procedural requirements demand that a separate action should be filed against the supposed employer to enforce the subsidiary liability under Article 103 of the Revised Penal Code." 2 The appellate court's decision in CA-G.R. No. 19077-CR was not appealed. Meanwhile, on 14 December 1978, Pajarito v. Seneris 3 was decided by this Court, holding inter alia that "Considering that the judgment of conviction, sentencing a defendant employee to pay an indemnity under Articles 102 and 103 of the Revised Penal Code, is conclusive upon the employer not only with regard to the latter's civil liability but also with regard to its amount, . . . in the action to enforce the employer's subsidiary liability, the court has no other function than to render decision based upon the indemnity awarded in the criminal case and has no power to amend or modify it even if in its opinion an error has been committed in the decision . In view of the foregoing principles, . . . it would serve no important purpose to require petitioner to file a separate and independent action against the employer for the enforcement of the latter's subsidiary civil liability. Under the circumstances, it would not only prolong the litigation but would require the heirs of the deceased victim to incur unnecessary expenses. At any rate, the proceeding for the enforcement of the subsidiary civil liability may be considered as part of the proceeding for the execution of the judgment. A case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit. There is no question that the court which rendered the judgment has a general supervisory control over its process of execution, and this power carries with it the right to determine every question of fact and law which may be involved in the execution. . . . Indeed, the enforcement of the employer's subsidiary civil liability may be conveniently litigated within the same proceeding because the execution of the judgment is a logical and integral part of the case itself. This would certainly facilitate the application of justice to the rival claims of the contending parties. "The purpose of procedure, observed this Court in Manila Railroad Co. v. Attorney General, "is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of the contending parties. It was created not to hinder and delay but to facilitate and promote the administration of justice." In proceedings to apply justice, it is the duty of the courts "to assist the parties in obtaining just, speedy, and inexpensive determination of their rival claims. Thus, the Rules require that they should be liberally construed "to promote their object and to assist the parties in obtaining just, speedy, and inexpensive determination of every action and proceedings." 4

After finality of the Court of Appeals judgment in CA-G.R. No. 19077-CR, the case was remanded to the trial court where, on 2 July 1979, the private prosecutor filed a "Motion for Issuance of Subsidiary Writ of Execution" after the writ of execution against the accused was returned unsatisfied on 27 February 1979. 5 Petitioner opposed the Motion. However, on 14 November 1979, respondent Judge ordered the issuance of the subsidiary writ of execution. A motion for reconsideration of this order was denied in an order dated 26 November 1979. Consequently, on 29 November 1979, petitioner filed a petition for certiorari with the Court of Appeals, questioning the acts of the respondent Judge and the Sheriff who had levied on his properties pursuant to said subsidiary writ of execution. The petition was docketed as CA-G.R. No. SP-10069. On 16 May 1980, the Court of Appeals granted the petition and declared the Orders of the respondent Judge, dated 14 November 1979 and 26 November 1979, as well as the Subsidiary Writ of Execution issued on 15 November 1979 null and void. It reasoned that, as its judgment in the criminal case (CA-G.R. No. 19077-CR) was promulgated on 13 December 1977, whereas, Pajarito was promulgated by the Supreme Court only on 14 December 1978, the final judgment in the criminal case, which expressly declared that a separate action should be instituted to enforce petitioner's subsidiary civil liability, had long become the "law of the case" 6 and, therefore, prevails. On 24 July 1980, respondents filed a Motion for Reconsideration. On 23 October 1980, the Motion was granted and the decision of 16 May 1980 was set aside on the strength of the Pajarito decision. said the Court of Appeals: "The doctrine of the "law of the case" is ordinarily a very wise role of action, but it is not a universal, inexorable command. For while the doctrine is generally deemed applicable whether the former determination is right or wrong, (Wills vs. Lloyd, 21 Cal. 2d 452, 132 p. 20 471, 474; In re Taylor's Estate, 110 Vt. 80, 2A. 2d 317, 319; Greenwood Country vs. Watkins, 196 S.C. 51, 12 S.E. 2d 545, 550), there are some cases which hold that the doctrine is in applicable where [the] prior decision is unsound (Standard Oil Co. of California vs. Johnson, 56 Cal. App. 2d 411, 132 P. 2d 910, 913; Atchison T. & S.F. Ry Co. vs. Ballard, C.C.A. Tax., 108 F. 2d 768, 772); or incorrect principles were announced or [a] mistake of fact was made on first appeal. (Nation of Match Co. vs. Empire Storage & Ice Co., 227 Mo. Supp. 115, 58 S.W. 2d 997; Morris vs. E.I. Du Pont De Nemours & Com; 346 Mo. 126, 139 S.W. 2d 984, 986, 129 A.L.R. 352).

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It is a peculiar virtue of our system of law that in the search for truth through the process of inclusion and exclusion, it behooves us to correct the application of the doctrine of "the law of the case" upon such questions which prove to have been mistaken. . . . [T]he Honorable Supreme Court in the case of Lucia Pajarito vs. Hon. Alberto V. Seneris, et. al. (G.R. No. L44627, December 14, 1978; 87 SCRA 275) has definitely set the rule that: ". . . considering that Felipe Aizon does not deny that he was the registered operator of the bus . . ., it would serve no important purpose to require petitioner to file a separate and independent action against the employer for the enforcement of the latter's subsidiary civil liability . . . At any rate, the proceeding for the enforcement of the subsidiary civil liability may be considered as part of the proceeding for the execution of the judgment. A case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit." xxx xxx xxx Indeed, the enforcement of the employer's subsidiary civil liability may be conveniently litigated within the same proceeding because the execution of the judgment is a logical and integral part of the case itself." (pp. 282, 283) [W]hile We had, by our Decision in CA-G.R. No. 19077-CR, modified the decision of the trial court when, among such modifications, We deleted the trial court's direction, in the dispositive portion of said decision, that Maximiliano Alvarez "should, therefore, be subsidiarily liable and pay the amount above-mentioned to the persons concerned jointly and severally with Renato Ramos," and all other references of the trial court of Articles 102 and 103 of the Revised Penal Code, yet such modification does not reduce the effectiveness nor prevent the application of the ruling laid down in the case of Lucia S. Pajarito vs. Hon. Alberto V. Seneris, et. al. Indeed, it was not necessary at all for the trial court to have pronounced, in the dispositive portion of its decision, on the subsidiary liability of the employer, Maximiliano Alvarez, because the provisions of the Revised Penal Code on subsidiary liability (Articles 102 and 103) are deemed written in the judgment in the respective cases in which they are applicable. In a word, such a pronouncement and a direction of such subsidiary liability is a surplusage, although We should not, in the least, begrudge the trial court in having done so. It was, perhaps, to him, an attempt to be emphatic, or if not, a matter of legal taste than an answer to a legal requirement. In other words, even if the pronouncement and direction of the subsidiary liability of the employer were not written in the dispositive portion of the decision, or any part of the decision for that matter, just the same the trial court, upon the finality of its decision, can order the employer, on its subsidiary liability, to answer for the civil liability of the convicted employee, if the latter is shown to be unable to satisfy his civil liability because of his insolvency. "To underscore, Our deletion from Our decision in CA-G.R. No. 19077-CR, therefore, of the trial court's pronouncement and directions on the subsidiary liability of Maximiliano Alvarez would have not prevented the respondent court from issuing the writ of subsidiary execution and all other matters now under question. "On the issue of the deprivation of the employer of due process, unless he is allowed his day in court in the enforcement of his subsidiary liability in a separate civil action, the Honorable Supreme Court, citing relevant holdings in previous cases said: "The employer cannot be said to have been deprived of his day in court, because the situation before us is not one wherein the employer is sued for a primary liability under articles 1903 of the Civil Code, but one in which enforcement is sought of a subsidiary civil liability incident to and dependent upon his driver's criminal negligence which is a proper issue to be tried and decided only in a criminal action. In other words, the employer becomes ipso facto subsidiarily liable upon his driver's conviction and upon proof of the latter's insolvency, in the same way that acquittal wipes out not only the employee's primary civil liability but also his employer's subsidiary liability for such criminal negligence. (Almeda et al. vs. Albaroa, 8 Phil. 178, affirmed in 218 U.S. 476, 54 Law ed., 116; Wise & Co. vs. Larion, 45 Phil. 314, 320; Francisco vs. Onrubia, 46 Phil. 327; Province of Ilocos Sur vs. Tolentino, G.R. No. 34186, 56 Phil. 829; Moran, Comments on the Rules of Court, Vol. II, p. 403)" (Martinez vs. Barredo, 81 Phil. 1). Then, the Supreme Court went on to say: "In Miranda vs. Malate Garage & Taxicab Inc. this Court further amplified the rule that the decision convicting the employee is binding and conclusive upon the employer, "not only with regard to (the latter's) civil liability but also with regard to its amount because the liability of an employer can not be separated but follows that of his employee . . . And this Court, in Miranda, further explained that the employer is in substance and in effect a party to the criminal case, considering the subsidiary liability imposed upon him by law. "It is true that an employer, strictly speaking, is not a party to the criminal case instituted against his employee, but in substance and in effect he is [,] considering the subsidiary liability imposed upon him by law. It is his concern, as well as of his employee, to see to it that his interest be protected in the criminal case by taking virtual participation in the defense of his employee. He cannot leave him to his own fate because his failure is also his. And if because of his indifference or inaction the employee is convicted and damages are awarded against him, he cannot later be heard to complain, if brought to court, for the enforcement of his subsidiary liability, that he was not given his day in court." "This is the rule that governs the case at bar. It does not matter now that Our decision in CA-G.R. No. 19077-CR was promulgated on December 13, 1977 while the case of Pajarito vs. Seneris was promulgated later on on [sic] December 14, 1978. This fact alone would not prevent the application of the Pajarito vs. Seneris ruling to the

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execution of the case at bar, because, firstly, the Seneris case is merely a reiteration and perhaps an amplification of the previous rulings in the Miranda and the Martinez cases adopted much earlier than the rendition of the trial court's decision, subject of the appeal in CA-GR. No. 19077-CR; and secondly, because, for all purposes of the execution of Our decision in CA-G.R. No. 19077-CR, the said case is still pending and there is no legal impediment to the application, even retroactively if private respondents think it that way, of the Seneris ruling to the execution of Our decision. "We hold, therefore, that the respondent Court has not committed any grave abuse of discretion in the issuance of the questioned orders for such issuance has been made in pursuance of law and jurisprudence. WHEREFORE, We set aside Our decision promulgated on May 16, 1980, and enter another dismissing the instant petition for lack of merit. With costs against petitioner." 7

Petitioner filed a motion for reconsideration of the above Resolution He pointed out that the 16 May 1980 decision of the Court of Appeals had already become final and executory when respondents, through counsel, filed their Motion for Reconsideration, hence, the Court of Appeals no longer had jurisdiction to reverse itself. He argued that the 16 May 1980 decision was already the "law of the case" as far as petitioner's subsidiary liability is concerned, notwithstanding Pajarito. Petitioner also cited the "bad faith" of respondents' counsel in deliberately instructing his clerks not to receive the 16 May 1980 decision on the day of its service on 22 May 1980, while he was still in the United States, with the consequent finality of the decision thirty (30) days from the day it should have been received by respondents' counsel. Respondents could not, according to petitioner, have belatedly asked for reconsideration on 24 July 1980. 8 He further pointed to the non-existence of the Pajarito doctrine on 13 December 1977, the day judgment of conviction against the accused employee Renato Ramos was affirmed by the Court of Appeals, excluding the trial court's order finding petitioner-employer subsidiarily liable in case Ramos was found insolvent. The Court of Appeals denied petitioner's motion for reconsideration in its Resolution dated 20 January 1982. Hence, petitioner's present recourse to this Court. The petition is not impressed with merit. While counsel for respondents could have been more efficient and even scrupulous in the receipt of the adverted to decision of 16 May 1980, his censurable act cannot be made the basis for a strict and rigorously technical interpretation of procedural rules on grounds which do not touch on the merits of the criminal case but will only needlessly prolong its course and unjustly delay relief to the victims of petitioner-employer's criminally negligent driver. It is already a settled rule that the subsidiary liability of an employer automatically arises upon his employee's conviction, and subsequent proof of inability to pay. In this light, the application of Pajarito is merely the enforcement of a procedural remedy designed to ease the burden of litigation for recovery of indemnity by the victims of a judicially-declared criminally negligent act. As has been aptly stated, "A separate civil action may be warranted where additional facts have to be established or more evidence must be adduced or where the criminal case has been fully terminated and a separate complaint would be just as efficacious or even more expedient than a timely remand to the trial court where the criminal action was decided for further hearings on the civil aspects of the case . . . These do not exist in this case. Considering more over the delays suffered by the case in the trial, appellate, and review stages, it would be unjust to the complainants in this case to require at this time a separate civil action to be filed." 9 (Emphasis supplied). Moreover, the principle of "law of the case" as discussed in People vs. Pinuila 10 is not applicable to a Court of Appeals decision at odds with this Court's decision, and where the Supreme Court still has the power to decide on the applicable doctrine to the issue at hand. The rule cannot be utilized to accomplish injustice or manifest delay in the execution of justice. The principle is merely a rule of convenience and public policy to stabilize judicial decisions of tribunals of coordinate jurisdiction, to prevent re-litigation of questions in the same action, and to obviate undue prolongation of litigation, purposes which would be negated if Pajarito were not to be applied in this case simply because of purely technical reasons not touching on the merits of the case. One last word: there is sufficient evidence to hold that counsel for respondents, Felicisimo S. Garin, deliberately skirted the first service on him of the Court of Appeals judgment of 16 May 1980. He wanted it served on him at his own convenience. We note his action with great disapproval. As an officer of the court, he must conduct himself with candor and sincerity. He is warned that any repetition of this or similar misconduct will be dealt with severely. WHEREFORE, the petition is hereby DENIED. The Resolutions of the Court of Appeals, dated 23 October 1980 and 20 January 1982, are AFFIRMED. Costs against the petitioner. SO ORDERED.

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[G.R. No. 141538. March 23, 2004.] HERMANA R. CEREZO, petitioner, vs. DAVID TUAZON, respondent.

DECISION

CARPIO, J p: The Case This is a petition for review on certiorari 1 to annul the Resolution 2 dated 21 October 1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying the motion for reconsideration. The Court of Appeals denied the petition for annulment of the Decision 3 dated 30 May 1995 rendered by the Regional Trial Court of Angeles City, Branch 56 ("trial court"), in Civil Case No. 7415. The trial court ordered petitioner Hermana R. Cerezo ("Mrs. Cerezo") to pay respondent David Tuazon ("Tuazon") actual damages, loss of earnings, moral damages, and costs of suit. Antecedent Facts Around noontime of 26 June 1993, a Country Bus Lines passenger bus with plate number NYA 241 collided with a tricycle bearing plate number TC RV 126 along Captain M. Palo Street, Sta. Ines, Mabalacat, Pampanga. On 1 October 1993, tricycle driver Tuazon filed a complaint for damages against Mrs. Cerezo, as owner of the bus line, her husband Attorney Juan Cerezo ("Atty. Cerezo"), and bus driver Danilo A. Foronda ("Foronda"). The complaint alleged that: 7.At the time of the incident, plaintiff [Tuazon] was in his proper lane when the second-named defendant [Foronda], being then the driver and person in charge of the Country Bus with plate number NYA 241, did then and there willfully, unlawfully, and feloniously operate the said motor vehicle in a negligent, careless, and imprudent manner without due regard to traffic rules and regulations, there being a "Slow Down" sign near the scene of the incident, and without taking the necessary precaution to prevent loss of lives or injuries, his negligence, carelessness and imprudence resulted to severe damage to the tricycle and serious physical injuries to plaintiff thus making him unable to walk and becoming disabled, with his thumb and middle finger on the left hand being cut[.] 4 On 1 October 1993, Tuazon filed a motion to litigate as a pauper. Subsequently, the trial court issued summons against Atty. Cerezo and Mrs. Cerezo ("the Cerezo spouses") at the Makati address stated in the complaint. However, the summons was returned unserved on 10 November 1993 as the Cerezo spouses no longer held office nor resided in Makati. On 18 April 1994, the trial court issued alias summons against the Cerezo spouses at their address in Barangay Sta. Maria, Camiling, Tarlac. The alias summons and a copy of the complaint were finally served on 20 April 1994 at the office of Atty. Cerezo, who was then working as Tarlac Provincial Prosecutor. Atty. Cerezo reacted angrily on learning of the service of summons upon his person. Atty. Cerezo allegedly told Sheriff William Canlas: "Punyeta, ano ang gusto mong mangyari? Gusto mong hindi ka makalabas ng buhay dito? Teritoryo ko ito. Wala ka sa teritoryo mo ." 5 The records show that the Cerezo spouses participated in the proceedings before the trial court. The Cerezo spouses filed a comment with motion for bill of particulars dated 29 April 1994 and a reply to opposition to comment with motion dated 13 June 1994. 6 On 1 August 1994, the trial court issued an order directing the Cerezo spouses to file a comment to the opposition to the bill of particulars. Atty. Elpidio B. Valera ("Atty. Valera") of Valera and Valera Law Offices appeared on behalf of the Cerezo spouses. On 29 August 1994, Atty. Valera filed an urgent ex-parte motion praying for the resolution of Tuazon's motion to litigate as a pauper and for the issuance of new summons on the Cerezo spouses to satisfy proper service in accordance with the Rules of Court. 7 On 30 August 1994, the trial court issued an order resolving Tuazons motion to litigate as a pauper and the Cerezo spouses' urgent exparte motion. The order reads: At the hearing on August 30, 1994, the plaintiff [Tuazon] testified that he is presently jobless; that at the time of the filing of this case, his son who is working in Malaysia helps him and sends him once in a while P300.00 a month, and that he does not have any real property. Attached to the Motion to Litigate as Pauper are his Affidavit that he is unemployed; a Certification by the Barangay Captain of his poblacion that his income is not enough for his familys subsistence; and a Certification by the Office of the Municipal Assessor that he has no landholding in the Municipality of Mabalacat, Province of Pampanga. AaIDHS The Court is satisfied from the unrebutted testimony of the plaintiff that he is entitled to prosecute his complaint in this case as a pauper under existing rules. On the other hand, the Court denies the prayer in the Appearance and Urgent Ex-Parte Motion requiring new summons to be served to the defendants. The Court is of the opinion that any infirmity in the service of the summons to the defendant before plaintiff was allowed to prosecute his complaint in this case as a pauper has been cured by this Order. If within 15 days from receipt of this Order, the defendants do not question on appeal this Order of this Court, the Court shall proceed to resolve the Motion for Bill of Particulars. 8 On 27 September 1994, the Cerezo spouses filed an urgent ex-parte motion for reconsideration. The trial court denied the motion for reconsideration.

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On 14 November 1994, the trial court issued an order directing the Cerezo spouses to file their answer within fifteen days from receipt of the order. The Cerezo spouses did not file an answer. On 27 January 1995, Tuazon filed a motion to declare the Cerezo spouses in default. On 6 February 1995, the trial court issued an order declaring the Cerezo spouses in default and authorizing Tuazon to present his evidence. 9 On 30 May 1995, after considering Tuazon's testimonial and documentary evidence, the trial court ruled in Tuazon's favor. The trial court made no pronouncement on Forondas liability because there was no service of sum mons on him. The trial court did not hold Atty. Cerezo liable as Tuazon failed to show that Mrs. Cerezos business benefited the family, pursuant to Article 121(3) of the Fa mily Code. The trial court held Mrs. Cerezo solely liable for the damages sustained by Tuazon arising from the negligence of Mrs. Cerezos employee, pursuant to Article 2180 of the Civil Code. The dispositive portion of the trial courts decision reads: WHEREFORE, judgment is hereby rendered ordering the defendant Hermana Cerezo to pay the plaintiff: a)For Actual Damages 1)Expenses for operation and medical treatmentP69,485.35 2)Cost of repair of the tricycle39,921.00 b)For loss of earnings43,300.00 c)For moral damages20,000.00 d)And to pay the cost of the suit. The docket fees and other expenses in the filing of this suit shall be lien on whatever judgment may be rendered in favor of the plaintiff. SO ORDERED. 10 Mrs. Cerezo received a copy of the decision on 25 June 1995. On 10 July 1995, Mrs. Cerezo filed before the trial court a petition for relief from judgment on the grounds of "fraud, mistake or excusable negligence." Testifying before the trial court, both Mrs. Cerezo and Atty. Valera denied receipt of notices of hearings and of orders of the court. Atty. Valera added that he received no notice before or during the 8 May 1995 elections, "when he was a senatorial candidate for the KBL Party, and very busy, using his office and residence as Party National Headquarters." Atty. Valera claimed that he was able to read the decision of the trial court only after Mrs. Cerezo sent him a copy. 11 Tuazon did not testify but presented documentary evidence to prove the participation of the Cerezo spouses in the case. Tuazon presented the following exhibits: Exhibit 1Sheriffs return and summons; Exhibit 1-AAlias summons dated April 20, 1994; Exhibit 2Comment with Motion; Exhibit 3Minutes of the hearing held on August 1, 1994; Exhibit 3-ASignature of defendants counsel; Exhibit 4Minutes of the hearing held on August 30, 1994; Exhibit 4-ASignature of the defendants counsel; Exhibit 5Appearance and Urgent Ex-Parte Motion; Exhibit 6Order dated November 14, 1994; Exhibit 6-APostal certification dated January 13, 1995; Exhibit 7Order dated February [illegible]; Exhibit 7-ACourts return slip addressed to Atty. Elpidio Valera; Exhibit 7-BCourts return slip addressed to Spouses Juan and Hermana Cerezo; Exhibit 8Decision dated May [30], 1995

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Exhibit 8-ACourts return slip addressed to defendant Hermana Cerezo; Exhibit 8-BCourts return slip addressed to defendants counsel, Atty. Elpidio Valera; Exhibit 9Order dated September 21, 1995; Exhibit 9-ASecond Page of Exhibit 9; Exhibit 9-BThird page of Exhibit 9; Exhibit 9-CFourth page of Exhibit 9; Exhibit 9-DCourts return slip addressed to Atty. Elpidio Valera; and Exhibit 9-ECourts return slip addressed to plaintiffs counsel, Atty. Norman Dick de Guzman. 12 On 4 March 1998, the trial court issued an order 13 denying the petition for relief from judgment. The trial court stated that having received the decision on 25 June 1995, the Cerezo spouses should have filed a notice of appeal instead of resorting to a petition for relief from judgment. The trial court refused to grant relief from judgment because the Cerezo spouses could have availed of the remedy of appeal. Moreover, the Cerezo spouses not only failed to prove fraud, accident, mistake or excusable negligence by conclusive evidence, they also failed to prove that they had a good and substantial defense. The trial court noted that the Cerezo spouses failed to appeal because they relied on an expected settlement of the case. The Cerezo spouses subsequently filed before the Court of Appeals a petition for certiorari under Section 1 of Rule 65. The petition was docketed as CA-G.R. SP No. 48132. 14 The petition questioned whether the trial court acquired jurisdiction over the case considering there was no service of summons on Foronda, whom the Cerezo spouses claimed was an indispensable party. In a resolution 15 dated 21 January 1999, the Court of Appeals denied the petition for certiorari and affirmed the trial court's order denying the petition for relief from judgment. The Court of Appeals declared that the Cerezo spouses' failure to file an answer was due to their own negligence, considering that they continued to participate in the proceedings without filing an answer. There was also nothing in the records to show that the Cerezo spouses actually offered a reasonable settlement to Tuazon. The Court of Appeals also denied Cerezo spouses' motion for reconsideration for lack of merit.

The Cerezo spouses filed before this Court a petition for review on certiorari under Rule 45. Atty. Cerezo himself signed the petition, docketed as G.R. No. 137593. On 13 April 1999, this Court rendered a resolution denying the petition for review on certiorari for failure to attach an affidavit of service of copies of the petition to the Court of Appeals and to the adverse parties. Even if the petition complied with this requirement, the Court would still have denied the petition as the Cerezo spouses failed to show that the Court of Appeals committed a reversible error. The Courts resolution was entered in the Book of Entries and Judgments when it became final an d executory on 28 June 1999. 16 HCTDIS Undaunted, the Cerezo spouses filed before the Court of Appeals on 6 July 1999 a petition for annulment of judgment under Rule 47 with prayer for restraining order. Atty. Valera and Atty. Dionisio S. Daga ("Atty. Daga") represented Mrs. Cerezo in the petition, docketed as CA-G.R. SP No. 53572. 17 The petition prayed for the annulment of the 30 May 1995 decision of the trial court and for the issuance of a writ of preliminary injunction enjoining execution of the trial court's decision pending resolution of the petition. The Court of Appeals denied the petition for annulment of judgment in a resolution dated 21 October 1999. The resolution reads in part: In this case, records show that the petitioner previously filed with the lower court a Petition for Relief from Judgment on the ground that they were wrongfully declared in default while waiting for an amicable settlement of the complaint for damages. The court a quo correctly ruled that such petition is without merit. The defendant spouses admit that during the initial hearing they appeared before the court and even mentioned the need for an amicable settlement. Thus, the lower court acquired jurisdiction over the defendant spouses. Therefore, petitioner having availed of a petition for relief, the remedy of an annulment of judgment is no longer available. The proper action for the petitioner is to appeal the order of the lower court denying the petition for relief. Wherefore, the instant petition could not be given due course and should accordingly be dismissed. SO ORDERED. 18 On 20 January 2000, the Court of Appeals denied the Cerezo spouses' motion for reconsideration. 19 The Court of Appeals stated: A distinction should be made between a court's jurisdiction over a person and its jurisdiction over the subject matter of a case. The former is acquired by the proper service of summons or by the parties' voluntary appearance; while the latter is conferred by law. Resolving the matter of jurisdiction over the subject matter, Section 19(1) of B[atas] P[ambansa] 129 provides that Regional Trial Courts shall exercise exclusive original jurisdiction in all civil actions in which the subject of the

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litigation is incapable of pecuniary estimation. Thus it was proper for the lower court to decide the instant case for damages. Unlike jurisdiction over the subject matter of a case which is absolute and conferred by law; any defects [sic] in the acquisition of jurisdiction over a person (i.e., improper filing of civil complaint or improper service of summons) may be waived by the voluntary appearance of parties. The lower court admits the fact that no summons was served on defendant Foronda. Thus, jurisdiction over the person of defendant Foronda was not acquired, for which reason he was not held liable in this case. However, it has been proven that jurisdiction over the other defendants was validly acquired by the court a quo. The defendant spouses admit to having appeared in the initial hearings and in the hearing for plaintiffs motion to litigate as a pauper. They even mentioned conferences where attempts were made to reach an amicable settlement with plaintiff. However, the possibility of amicable settlement is not a good and substantial defense which will warrant the granting of said petition. xxx xxx xxx Assuming arguendo that private respondent failed to reserve his right to institute a separate action for damages in the criminal action, the petitioner cannot now raise such issue and question the lower courts jurisdiction because petitioner and her husband have waived such right by voluntarily appearing in the civil case for damages. Therefore, the findings and the decision of the lower court may bind them. Records show that the petitioner previously filed with the lower court a Petition for Relief from Judgment on the ground that they were wrongfully declared in default while waiting for an amicable settlement of the complaint for damages. The court a quo correctly ruled that such petition is without merit, jurisdiction having been acquired by the voluntary appearance of defendant spouses. Once again, it bears stressing that having availed of a petition for relief, the remedy of annulment of judgment is no longer available. Based on the foregoing, the motion for reconsideration could not be given due course and is hereby DENIED. SO ORDERED. 20 The Issues On 7 February 2000, Mrs. Cerezo, this time with Atty. Daga alone representing her, filed the present petition for review on certiorari before this Court. Mrs. Cerezo claims that: 1.In dismissing the Petition for Annulment of Judgment, the Court of Appeals assumes that the issues raised in the petition for annulment is based on extrinsic fraud related to the denied petition for relief notwithstanding that the grounds relied upon involves questions of lack of jurisdiction. 2.In dismissing the Petition for Annulment, the Court of Appeals disregarded the allegation that the lower court['s] findings of negligence against defendant-driver Danilo Foronda [whom] the lower court did not summon is null and void for want of due process and consequently, such findings of negligence which is [sic] null and void cannot become the basis of the lower court to adjudge petitioner-employer liable for civil damages. 3.In dismissing the Petition for Annulment, the Court of Appeals ignored the allegation that defendant-driver Danilo A. Foronda whose negligence is the main issue is an indispensable party whose presence is compulsory but [whom] the lower court did not summon. 4.In dismissing the Petition for Annulment, the Court of Appeals ruled that assuming arguendo that private respondent failed to reserve his right to institute a separate action for damages in the criminal action, the petitioner cannot now raise such issue and question the lower courts jurisdiction because petitioner [has] waived such right by voluntarily appearing in the civil case for damages notwithstanding that lack of jurisdiction cannot be waived. 21 The Courts Ruling The petition has no merit. As the issues are interrelated, we shall discuss them jointly. IAcTaC Remedies Available to a Party Declared in Default An examination of the records of the entire proceedings shows that three lawyers filed and signed pleadings on behalf of Mrs. Cerezo, namely, Atty. Daga, Atty. Valera, and Atty. Cerezo. Despite their number, Mrs. Cerezo's counsels failed to avail of the proper remedies. It is either by sheer ignorance or by malicious manipulation of legal technicalities that they have managed to delay the disposition of the present case, to the detriment of pauper litigant Tuazon. Mrs. Cerezo claims she did not receive any copy of the order declaring the Cerezo spouses in default. Mrs. Cerezo asserts that she only came to know of the default order on 25 June 1995, when she received a copy of the decision. On 10 July 1995, Mrs. Cerezo filed before the trial court a petition for relief from judgment under Rule 38, alleging "fraud, mistake, or excusable negligence" as grounds.

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On 4 March 1998, the trial court denied Mrs. Cerezos petition for relief from judgment. The trial court stated that Mrs. Cerezo could have availed of appeal as a remedy and that she failed to prove that the judgment was entered through fraud, accident, mistake, or excusable negligence. Mrs. Cerezo then filed before the Court of Appeals a petition for certiorari under Section 1 of Rule 65 assailing the denial of the petition for relief from judgment. On 21 January 1999, the Court of Appeals dismissed Mrs. Cerezos petiti on. On 24 February 1999, the appellate court denied Mrs. Cerezo's motion for reconsideration. On 11 March 1999, Mrs. Cerezo filed before this Court a petition for review on certiorari under Rule 45, questioning the denial of the petition for relief from judgment. We denied the petition and our resolution became final and executory on 28 June 1999. On 6 July 1999, a mere eight days after our resolution became final and executory, Mrs. Cerezo filed before the Court of Appeals a petition for annulment of the judgment of the trial court under Rule 47. Meanwhile, on 25 August 1999, the trial court issued over the objection of Mrs. Cerezo an order of execution of the judgment in Civil Case No. 7415. On 21 October 1999, the Court of Appeals dismissed the petition for annulment of judgment. On 20 January 2000, the Court of Appeals denied Mrs. Cerezos motion for reconsideration. On 7 February 2000, Mrs. Cerezo filed the present petition for review on certiorari under Rule 45 challenging the dismissal of her petition for annulment of judgment. Lina v. Court of Appeals 22 enumerates the remedies available to a party declared in default: a)The defendant in default may, at any time after discovery thereof and before judgment, file a motion under oath to set aside the order of default on the ground that his failure to answer was due to fraud, accident, mistake or excusable negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]); b)If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule 37;

c)If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2 [now Section 1] of Rule 38; and d)He may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41). (Emphasis added) Moreover, a petition for certiorari to declare the nullity of a judgment by default is also available if the trial court improperly declared a party in default, or even if the trial court properly declared a party in default, if grave abuse of discretion attended such declaration. 23 Mrs. Cerezo admitted that she received a copy of the trial courts decision on 25 June 1995. Based on this admission, Mrs. Ce rezo had at least three remedies at her disposal: an appeal, a motion for new trial, or a petition for certiorari. Mrs. Cerezo could have appealed under Rule 41 24 from the default judgment within 15 days from notice of the judgment. She could have availed of the power of the Court of Appeals to try cases and conduct hearings, receive evidence, and perform all acts necessary to resolve factual issues raised in cases falling within its appellate jurisdiction. 25 Mrs. Cerezo also had the option to file under Rule 37 26 a motion for new trial within the period for taking an appeal. If the trial court grants a new trial, the original judgment is vacated, and the action will stand for trial de novo. The recorded evidence taken in the former trial, as far as the same is material and competent to establish the issues, shall be used at the new trial without retaking the same. 27 Mrs. Cerezo also had the alternative of filing under Rule 65 28 a petition for certiorari assailing the order of default within 60 days from notice of the judgment. An order of default is interlocutory, and an aggrieved party may file an appropriate special civil action under Rule 65. 29 In a petition for certiorari, the appellate court may declare void both the order of default and the judgment of default. Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the reglementary periods provided under the Rules of Court. However, Mrs. Cerezo opted to file a petition for relief from judgment, which is available only in exceptional cases. A petition for relief from judgment should be filed within the reglementary period of 60 days from knowledge of judgment and six months from entry of judgment, pursuant to Rule 38 of the Rules of Civil Procedure. 30 Tuason v. Court of Appeals 31 explained the nature of a petition for relief from judgment: When a party has another remedy available to him, which may either be a motion for new trial or appeal from an adverse decision of the trial court, and he was not prevented by fraud, accident, mistake or excusable negligence from filing such motion or taking such appeal, he cannot avail himself of this petition. Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence; otherwise the petition for relief can be used to revive the right to appeal which has been lost thru inexcusable negligence. Evidently, there was no fraud, accident, mistake, or excusable negligence that prevented Mrs. Cerezo from filing an appeal, a motion for new trial or a petition for certiorari. It was error for her to avail of a petition for relief from judgment. After our resolution denying Mrs. Cerezo's petition for relief became final and executory, Mrs. Cerezo, in her last ditch attempt to evade liability, filed before the Court of Appeals a petition for annulment of the judgment of the trial court. Annulment is available only on the grounds of extrinsic fraud and lack of jurisdiction. If based on extrinsic fraud, a party must file the petition within four years from its discovery, and if based on lack of jurisdiction, before laches or estoppel bars the petition. Extrinsic fraud is not a valid ground if such fraud was used as a ground, or could have been used as a ground, in a motion for new trial or petition for relief from judgment. 32 CaASIc

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Mrs. Cerezo insists that lack of jurisdiction, not extrinsic fraud, was her ground for filing the petition for annulment of judgment. However, a party may avail of the remedy of annulment of judgment under Rule 47 only if the ordinary remedies of new trial, appeal, petition for relief from judgment, or other appropriate remedies are no longer available through no fault of the party. 33 Mrs. Cerezo could have availed of a new trial or appeal but through her own fault she erroneously availed of the remedy of a petition for relief, which was denied with finality. Thus, Mrs. Cerezo may no longer avail of the remedy of annulment. In any event, the trial court clearly acquired jurisdiction over Mrs. Cerezo's person. Mrs. Cerezo actively participated in the proceedings before the trial court, submitting herself to the jurisdiction of the trial court. The defense of lack of jurisdiction fails in light of her active participation in the trial court proceedings. Estoppel or laches may also bar lack of jurisdiction as a ground for nullity especially if raised for the first time on appeal by a party who participated in the proceedings before the trial court, as what happened in this case. 34 For these reasons, the present petition should be dismissed for utter lack of merit. The extraordinary action to annul a final judgment is restricted to the grounds specified in the rules. The reason for the restriction is to prevent this extraordinary action from being used by a losing party to make a complete farce of a duly promulgated decision that has long become final and executory. There would be no end to litigation if parties who have unsuccessfully availed of any of the appropriate remedies or lost them through their fault could still bring an action for annulment of judgment. 35 Nevertheless, we shall discuss the issues raised in the present petition to clear any doubt about the correctness of the decision of the trial court. Mrs. Cerezos Liability and the Trial Courts Acquisition of Jurisdiction Mrs. Cerezo contends that the basis of the present petition for annulment is lack of jurisdiction. Mrs. Cerezo asserts that the trial court could not validly render judgment since it failed to acquire jurisdiction over Foronda. Mrs. Cerezo points out that there was no service of summons on Foronda. Moreover, Tuazon failed to reserve his right to institute a separate civil action for damages in the criminal action. Such contention betrays a faulty foundation. Mrs. Cerezos contention proceeds from the point of view of criminal law and not of civil law, while the basis of the present action of Tuazon is quasi-delict under the Civil Code, not delict under the Revised Penal Code. The same negligent act may produce civil liability arising from a delict under Article 103 of the Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the Civil Code. An aggrieved party may choose between the two remedies. An action based on a quasi-delict may proceed independently from the criminal action. 36 There is, however, a distinction between civil liability arising from a delict and civil liability arising from a quasi-delict. The choice of remedy, whether to sue for a delict or a quasi-delict, affects the procedural and jurisdictional issues of the action. 37 Tuazon chose to file an action for damages based on a quasi-delict. In his complaint, Tuazon alleged that Mrs. Cerezo, "without exercising due care and diligence in the supervision and management of her employees and buses," hired Foronda as her driver. Tuazon became disabled because of Forondas "recklessness, gross negligence and imprudence," aggravated by Mrs. Cerezos "lac k of due care and diligence in the selection and supervision of her employees, particularly Foronda." 38 The trial court thus found Mrs. Cerezo liable under Article 2180 of the Civil Code. Article 2180 states in part: 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. Contrary to Mrs. Cerezo's assertion, Foronda is not an indispensable party to the case. An indispensable party is one whose interest is affected by the courts action in the litigation, and without whom no final resolution of the case is possible. 39 However, Mrs. Cerezo's liability as an employer in an action for a quasi-delict is not only solidary, it is also primary and direct. Foronda is not an indispensable party to the final resolution of Tuazons action for damages against Mrs. Cerezo. The responsibility of two or more persons who are liable for a quasi-delict is solidary. 40 Where there is a solidary obligation on the part of debtors, as in this case, each debtor is liable for the entire obligation. Hence, each debtor is liable to pay for the entire obligation in full. There is no merger or renunciation of rights, but only mutual representation. 41 Where the obligation of the parties is solidary, either of the parties is indispensable, and the other is not even a necessary party because complete relief is available from either. 42 Therefore, jurisdiction over Foronda is not even necessary as Tuazon may collect damages from Mrs. Cerezo alone. Moreover, an employer's liability based on a quasi-delict is primary and direct, while the employer's liability based on a delict is merely subsidiary. 43 The words "primary and direct," as contrasted with "subsidiary," refer to the remedy provided by law for enforcing the obligation rather than to the character and limits of the obligation. 44 Although liability under Article 2180 originates from the negligent act of the employee, the aggrieved party may sue the employer directly. When an employee causes damage, the law presumes that the employer has himself committed an act of negligence in not preventing or avoiding the damage. This is the fault that the law condemns. While the employer is civilly liable in a subsidiary capacity for the employee's criminal negligence, the employer is also civilly liable directly and separately for his own civil negligence in failing to exercise due diligence in selecting and supervising his employee. The idea that the employers liability is solely subsidiary is wrong. 45

The action can be brought directly against the person responsible (for another), without including the author of the act. The action against the principal is accessory in the sense that it implies the existence of a prejudicial act committed by the employee, but it is not subsidiary in the sense that it can not be instituted till after the judgment against the author of the act or at least, that it is subsidiary to the principal action; the action for responsibility (of the employer) is in itself a principal action. 46 Thus, there is no need in this case for the trial court to acquire jurisdiction over Foronda. The trial courts acquisition o f jurisdiction over Mrs. Cerezo is sufficient to dispose of the present case on the merits. In contrast, an action based on a delict seeks to enforce the subsidiary liability of the employer for the criminal negligence of the employee as provided in Article 103 of the Revised Penal Code. To hold the employer liable in a subsidiary capacity under a delict, the

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aggrieved party must initiate a criminal action where the employees delict and corresponding primary liability are establish ed. 47 If the present action proceeds from a delict, then the trial courts jurisdiction over Foronda is necessary. However, the present ac tion is clearly for the quasi-delict of Mrs. Cerezo and not for the delict of Foronda. The Cerezo spouses' contention that summons be served anew on them is untenable in light of their participation in the trial court proceedings. To uphold the Cerezo spouses' contention would make a fetish of a technicality. 48 Moreover, any irregularity in the service of summons that might have vitiated the trial courts jurisdiction over the persons of t he Cerezo spouses was deemed waived when the Cerezo spouses filed a petition for relief from judgment. 49 HTaIAC We hold that the trial court had jurisdiction and was competent to decide the case in favor of Tuazon and against Mrs. Cerezo even in the absence of Foronda. Contrary to Mrs. Cerezo's contention, Foronda is not an indispensable party to the present case. It is not even necessary for Tuazon to reserve the filing of a separate civil action because he opted to file a civil action for damages against Mrs. Cerezo who is primarily and directly liable for her own civil negligence. The words of Justice Jorge Bocobo in Barredo v. Garcia still hold true today as much as it did in 1942: . . . [T]o hold that there is only one way to make defendants liability effective, and that is, to sue the driver and exhaust his (the latters) property first, would be tantamount to compelling the plaintiff to follow a devious and cumbersome method of obtaining relief. True, there is such a remedy under our laws, but there is also a more expeditious way, which is based on the primary and direct responsibility of the defendant under article [2180] of the Civil Code. Our view of the law is more likely to facilitate remedy for civil wrongs, because the procedure indicated by the defendant is wasteful and productive of delay, it being a matter of common knowledge that professional drivers of taxis and other similar public conveyances do not have sufficient means with which to pay damages. Why, then, should the plaintiff be required in all cases to go through this roundabout, unnecessary, and probably useless procedure? In construing the laws, courts have endeavored to shorten and facilitate the pathways of right and justice. 50 Interest at the rate of 6% per annum is due on the amount of damages adjudged by the trial court. 51 The 6% per annum interest shall commence from 30 May 1995, the date of the decision of the trial court. Upon finality of this decision, interest at 12% per annum, in lieu of 6% per annum, is due on the amount of damages adjudged by the trial court until full payment. WHEREFORE, we DENY the instant petition for review. The Resolution dated 21 October 1999 of the Court of Appeals in CA-G.R. SP No. 53572, as well as its Resolution dated 20 January 2000 denying the motion for reconsideration, is AFFIRMED with the MODIFICATION that the amount due shall earn legal interest at 6% per annum computed from 30 May 1995, the date of the trial courts decision. Upon finality of this decision, the amount due shall earn interest at 12% per annum, in lieu of 6% per annum, until full payment. SO ORDERED.

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[G.R. No. 158995. September 26, 2006.] L.G. FOODS CORPORATION and VICTORINO GABOR, Vice-President and General Manager, petitioners, vs. HON. PHILADELFA B. PAGAPONG-AGRAVIADOR, in her capacity as Presiding Judge of Regional Trial Court, Branch 43, Bacolod City, and SPS. FLORENTINO and THERESA VALLEJERA, respondents.

DECISION

GARCIA, J p: Assailed and sought to be set aside in this petition for review on certiorari is the Decision 1 dated April 25, 2003 of the Court of Appeals (CA), as reiterated in its Resolution of July 10, 2003, 2 in CA-G.R. SP No. 67600, affirming an earlier Order of the Regional Trial Court (RTC) of Bacolod City, Branch 43, which denied the petitioners' motion to dismiss in Civil Case No. 99-10845, an action for damages arising from a vehicular accident thereat instituted by the herein private respondents the spouses Florentino Vallejera and Theresa Vallejera against the petitioners. The antecedent facts may be briefly stated as follows: On February 26, 1996, Charles Vallereja, a 7-year old son of the spouses Florentino Vallejera and Theresa Vallejera, was hit by a Ford Fiera van owned by the petitioners and driven at the time by their employee, Vincent Norman Yeneza y Ferrer. Charles died as a result of the accident. In time, an Information for Reckless Imprudence Resulting to Homicide was filed against the driver before the Municipal Trial Court in Cities (MTCC), Bacolod City, docketed as Criminal Case No. 67787, entitled People of the Philippines v. Vincent Norman Yeneza . CcADHI Unfortunately, before the trial could be concluded, the accused driver committed suicide, evidently bothered by conscience and remorse. On account thereof, the MTCC, in its order of September 30, 1998, dismissed the criminal case. On June 23, 1999, in the RTC of Bacolod City, the spouses Vallejera filed a complaint 3 for damages against the petitioners as employers of the deceased driver, basically alleging that as such employers, they failed to exercise due diligence in the selection and supervision of their employees. Thereat docketed as Civil Case No. 99-10845, the complaint was raffled to Branch 43 of the court. In their Answer with Compulsory Counterclaim, 4 the petitioners as defendants denied liability for the death of the Vallejeras' 7-year old son, claiming that they had exercised the required due diligence in the selection and supervision of their employees, including the deceased driver. They thus prayed in their Answer for the dismissal of the complaint for lack of cause of action on the part of the Vallejera couple. During pre-trial, the defendant petitioners insisted that their dismissal prayer be resolved. Hence, the trial court required them to file within ten days a memorandum of authorities supportive of their position. cITCAa Instead, however, of the required memorandum of authorities, the defendant petitioners filed a Motion to Dismiss, principally arguing that the complaint is basically a "claim for subsidiary liability against an employer" under the provision of Article 103 5 of the Revised Penal Code. Prescinding therefrom, they contend that there must first be a judgment of conviction against their driver as a condition sine qua non to hold them liable. Ergo, since the driver died during the pendency of the criminal action, the sine qua non condition for their subsidiary liability was not fulfilled, hence the of lack of cause of action on the part of the plaintiffs. They further argue that since the plaintiffs did not make a reservation to institute a separate action for damages when the criminal case was filed, the damage suit in question is thereby deemed instituted with the criminal action. which was already dismissed. In an Order dated September 4, 2001, 6 the trial court denied the motion to dismiss for lack of merit and set the case for pre-trial. With their motion for reconsideration having been denied by the same court in its subsequent order 7 of September 26, 2001, the petitioners then went on certiorari to the CA in CA-G.R. SP No. 67600, imputing grave abuse of discretion on the part of the trial judge in refusing to dismiss the basic complaint for damages in Civil Case No. 99-10845. In the herein assailed decision 8 dated April 25, 2003, the CA denied the petition and upheld the trial court. Partly says the CA in its challenged issuance: xxx xxx xxx It is clear that the complaint neither represents nor implies that the responsibility charged was the petitioner's subsidiary liability under Art. 103, Revised Penal Code. As pointed out [by the trial court] in the Order of September 4, 2001, the complaint does not even allege the basic elements for such a liability, like the conviction of the accused employee and his insolvency. Truly enough, a civil action to enforce subsidiary liability separate and distinct from the criminal action is even unnecessary. IEHDAT xxx xxx xxx Specifically, Civil Case No. 99-10845 exacts responsibility for fault or negligence under Art. 2176, Civil Code, which is entirely separate and distinct from the civil liability arising from negligence under the Revised Penal Code. Verily,

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therefore, the liability under Art. 2180, Civil Code, is direct and immediate, and not conditioned upon prior recourse against the negligent employee or prior showing of the latter's insolvency. (Underscoring in the original.) In time, the petitioners moved for a reconsideration but their motion was denied by the CA in its resolution 9 of July 10, 2003. Hence, the petitioners' present recourse on their submission that the appellate court committed reversible error in upholding the trial court's denial of their motion to dismiss. We DENY. As the Court sees it, the sole issue for resolution is whether the spouses Vallejeras' cause of action in Civil Case No. 99-10845 is founded on Article 103 of the Revised Penal Code, as maintained by the petitioners, or derived from Article 2180 10 of the Civil Code, as ruled by the two courts below. It thus behooves us to examine the allegations of the complaint for damages in Civil Case No. 99-10845. That complaint alleged, inter alia, as follows: xxx xxx xxx 3.That defendant [LG Food Corporation] is the registered owner of a Ford Fiera Van with Plate No. NMS 881 and employer sometime February of 1996 of one Vincent Norman Yeneza y Ferrer, a salesman of said corporation; cEaTHD 4.That sometime February 26, 1996 at around 2:00 P.M. at Rosario St., Bacolod City, the minor son of said plaintiffs [now respondents], Charles Vallejera, 7 years old, was hit and bumped by above-described vehicle then driven by said employee, Vincent Norman Yeneza y Ferrer; 5.That the mishap was due to the gross fault and negligence of defendant's employee, who drove said vehicle, recklessly, negligently and at a high speed without regard to traffic condition and safety of other road users and likewise to the fault and negligence of the owner employer, herein defendants LG Food Corporation who failed to exercise due diligence in the selection and supervision of his employee, Vincent Norman Yeneza y Ferrer; 6.That as a result of said incident, plaintiffs' son suffered multiple body injuries which led to his untimely demise on that very day; 7.That a criminal case was filed against the defendant's employee, docketed as Criminal Case No. 67787, (earlier filed as Crim. Case No. 96-17570 before RTC) before MTC-Branch III, entitled "People v. Yeneza" for "Reckless Imprudence resulting to Homicide," but the same was dismissed because pending litigation, then remorse-stricken [accused] committed suicide; xxx xxx xxx 8.That the injuries and complications as well as the resultant death suffered by the late minor Charles Vallejera were due to the negligence and imprudence of defendant's employee; 9.That defendant LG Foods Corporation is civilly liable for the negligence/imprudence of its employee since it failed to exercise the necessary diligence required of a good father of the family in the selection and supervision of his employee, Vincent Norman Yeneza y Ferrer which diligence if exercised, would have prevented said incident. (Bracketed words and emphasis ours.) CTaSEI Nothing in the foregoing allegations suggests, even remotely, that the herein petitioners are being made to account for their subsidiary liability under Article 103 of the Revised Penal Code. As correctly pointed out by the trial court in its order of September 4, 2001 denying the petitioners' Motion to Dismiss, the complaint did not even aver the basic elements for the subsidiary liability of an employer under Article 103 of the Revised Penal Code, such as the prior conviction of the driver in the criminal case filed against him nor his insolvency. Admittedly, the complaint did not explicitly state that plaintiff Vallejeras were suing the defendant petitioners for damages based on quasi-delict. Clear it is, however, from the allegations of the complaint that quasi-delict was their choice of remedy against the petitioners. To stress, the plaintiff spouses alleged in their complaint gross fault and negligence on the part of the driver and the failure of the petitioners, as employers, to exercise due diligence in the selection and supervision of their employees. The spouses further alleged that the petitioners are civilly liable for the negligence/imprudence of their driver since they failed to exercise the necessary diligence required of a good father of the family in the selection and supervision of their employees, which diligence, if exercised, could have prevented the vehicular accident that resulted to the death of their 7-year old son. IEHTaA Section 2, Rule 2, of the 1997 Rules of Civil Procedure defines cause of action as the "act or omission by which a party violates the right of another." Such act or omission gives rise to an obligation which may come from law, contracts, quasi contracts, delicts or quasidelicts. 11

Corollarily, an act or omission causing damage to another may give rise to two separate civil liabilities on the part of the offender, i.e., 1) civil liability ex delicto; 12 and 2) independent civil liabilities, such as those (a) not arising from an act or omission complained of as felony (e.g., culpa contractual or obligations arising from law; 13 the intentional torts; 14 and culpa aquiliana 15 ); or (b) where the injured party is granted a right to file an action independent and distinct from the criminal action. 16 Either of these two possible liabilities may be enforced against the offender. 17

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Stated otherwise, victims of negligence or their heirs have a choice between an action to enforce the civil liability arising from culpa criminal under Article 100 of the Revised Penal Code, and an action for quasi-delict (culpa aquiliana) under Articles 2176 to 2194 of the Civil Code. If, as here, the action chosen is for quasi-delict, the plaintiff may hold the employer liable for the negligent act of its employee, subject to the employer's defense of exercise of the diligence of a good father of the family. On the other hand, if the action chosen is for culpa criminal, the plaintiff can hold the employer subsidiarily liable only upon proof of prior conviction of its employee. 18 Article 1161 19 of the Civil Code provides that civil obligation arising from criminal offenses shall be governed by penal laws subject to the provision of Article 2177 20 and of the pertinent provision of Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of this Book, regulating damages. Plainly, Article 2177 provides for the alternative remedies the plaintiff may choose from in case the obligation has the possibility of arising indirectly from the delict/crime or directly from quasi-delict/tort. The choice is with the plaintiff who makes known his cause of action in his initiatory pleading or complaint, 21 and not with the defendant who can not ask for the dismissal of the plaintiff's cause of action or lack of it based on the defendant's perception that the plaintiff should have opted to file a claim under Article 103 of the Revised Penal Code. Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is not conditioned upon prior recourse against the negligent employee and a prior showing of insolvency of such employee. 22 Here, the complaint sufficiently alleged that the death of the couple's minor son was caused by the negligent act of the petitioners' driver; and that the petitioners themselves were civilly liable for the negligence of their driver for failing "to exercise the necessary diligence required of a good father of the family in the selection and supervision of [their] employee, the driver, which diligence, if exercised, would have prevented said accident." Had the respondent spouses elected to sue the petitioners based on Article 103 of the Revised Penal Code, they would have alleged that the guilt of the driver had been proven beyond reasonable doubt; that such accused driver is insolvent; that it is the subsidiary liability of the defendant petitioners as employers to pay for the damage done by their employee (driver) based on the principle that every person criminally liable is also civilly liable. 23 Since there was no conviction in the criminal case against the driver, precisely because death intervened prior to the termination of the criminal proceedings, the spouses' recourse was, therefore, to sue the petitioners for their direct and primary liability based on quasi-delict. CETDHA Besides, it is worthy to note that the petitioners, in their Answer with Compulsory Counter-Claim, 24 repeatedly made mention of Article 2180 of the Civil Code and anchored their defense on their allegation that "they had exercised due diligence in the selection and supervision of [their] employees." The Court views this defense as an admission that indeed the petitioners acknowledged the private respondents' cause of action as one for quasi-delict under Article 2180 of the Civil Code. All told, Civil Case No. 99-10845 is a negligence suit brought under Article 2176 Civil Code to recover damages primarily from the petitioners as employers responsible for their negligent driver pursuant to Article 2180 of the Civil Code. 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. Thus, the employer is liable for damages caused by his employees and household helpers acting within the scope of their assigned tasks, even though the former is not engaged in any business or industry. Citing Maniago v. CA, 25 petitioner would argue that Civil Case No. 99-10845 should have been dismissed for failure of the respondent spouses to make a reservation to institute a separate civil action for damages when the criminal case against the driver was filed. SEDIaH The argument is specious. To start with, the petitioners' reliance on Maniago is obviously misplaced. There, the civil case was filed while the criminal case against the employee was still pending. Here, the criminal case against the employee driver was prematurely terminated due to his death. Precisely, Civil Case No. 99-10845 was filed by the respondent spouses because no remedy can be obtained by them against the petitioners with the dismissal of the criminal case against their driver during the pendency thereof. The circumstance that no reservation to institute a separate civil action for damages was made when the criminal case was filed is of no moment for the simple reason that the criminal case was dismissed without any pronouncement having been made therein. In reality, therefor, it is as if there was no criminal case to speak of in the first place. And for the petitioners to insist for the conviction of their driver as a condition sine qua non to hold them liable for damages is to ask for the impossible. IN VIEW WHEREOF, the instant petition is DENIED for lack of merit. Costs against the petitioners. SO ORDERED.

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[G.R. No. 82318. May 18, 1989.] GILBERTO M. DUAVIT, petitioner, vs. THE HON. COURT OF APPEALS, Acting through the Third Division, as Public Respondent, and ANTONIO SARMIENTO, SR. & VIRGILIO CATUAR, respondents.

Rodolfo d. Dela Cruz for petitioner. Bito, Lozada, Ortega & Castillo for respondents.

SYLLABUS 1.TORTS AND DAMAGES; OWNER OF A VEHICLE IS NOT LIABLE FOR AN ACCIDENT INVOLVING THE VEHICLE IF DRIVEN WITHOUT THE OWNER'S CONSENT BY ONE NOT EMPLOYED BY HIM. The Supreme Court ruled in Duquilleo v. Bayot (67 Phil. 131-133-134) [1939] that an owner of a vehicle cannot be held liable for an accident involving the said vehicle if the same was driven without his consent or knowledge and by a person not employed by him. 2.CIVIL PROCEDURE; ABSOLUTE RULES NOT APPLIED UNQUALIFIEDLY UNLESS THEY FIT FOUR SQUARE WITH PENDING CASES. The Court cannot blindly apply absolute rules based on precedents whose facts do not jibe four square with pending cases. Every case must be determined on its own peculiar factual circumstances. Where, as in this case, the records of the petition fail to indicate the slightest indicia of an employer-employee relationship between the owner and the erring driver or any consent given by the owner for the vehicle's use, we cannot hold the owner liable.

DECISION

GUTIERREZ, JR., J p: This petition raises the sole issue of whether or not the owner of a private vehicle which figured in an accident can be held liable under Article 2180 of the Civil Code when the said vehicle was neither driven by an employee of the owner nor taken with the consent of the latter. The facts are summarized in the contested decision, as follows: "From the evidence adduced by the plaintiffs, consisting of the testimonies of witnesses Virgilio Catuar, Antonio Sarmiento, Jr., Ruperto Catuar, Jr. and Norberto Bernarte it appears that on July 28, 1971 plaintiffs Antonio Sarmiento, Sr. and Virgilio Catuar were aboard a jeep with plate number 77-99-F-1-Manila, 1971, owned by plaintiff, Ruperto Catuar was driving the said jeep on Ortigas Avenue, San Juan, Rizal; that plaintiff's jeep, at the time, was running moderately at 20 to 35 kilometers per hour and while approaching Roosevelt Avenue, Virgilio Catuar slowed down; that suddenly, another jeep with plate number 99-97-F-J, Manila 1971 driven by defendant Oscar Sabiniano hit and bumped plaintiff's jeep on the portion near the left rear wheel, and as a result of the impact plaintiff's jeep fell on its right and skidded by about 30 yards; that as a result plaintiff's jeep was damaged, particularly the windshield, the differential, the part near the left rear wheel and the top cover the jeep; that plaintiff Virgilio Catuar was shown to the middle of the road; his wrist was broken and he sustained contusions on the head; that likewise plaintiff Antonio Sarmiento, Sr. was trapped inside the fallen jeep, and one of his legs was fractured. "Evidence also shows that the plaintiff Virgilio Catuar spent a total of P2,464.00 for repairs of the jeep, as shown by the receipts of payment of labor and spare parts (Exhs. H to H-7). Plaintiffs likewise tried to prove that plaintiff Virgilio Catuar, immediately after the accident was taken to Immaculate Concepcion Hospital, and then was transferred to the National Orthopedic Hospital; that while plaintiff Catuar was not confined in the hospital, his wrist was in a plaster cast for a period of one month, and the contusions on his head were under treatment for about two (2) weeks; that for hospitalization, medicine and allied expenses, plaintiff Catuar spent P5,000.00. "Evidence also shows that as a result of the incident, plaintiff Antonio Sarmiento, Sr. sustained injuries on his leg; that at first, he was taken to the National Orthopedic Hospital (Exh. K), but later he was confined at the Makati Medical Center from July 29, to August 29, 1971 and then from September 15 to 25, 1971; that his leg was in a plaster cast for a period of eight (8) months; and that for hospitalization and medical attendance, plaintiff Antonio Sarmiento, Sr. spent no less than P13,785.25 as evidenced by receipts in his possession. (Exhs. N to N-1). "Proofs were adduced also to show that plaintiff Antonio Sarmiento, Sr. is employed as Assistant Accountant of the Canlubang Sugar Estate with a salary of P1,200.00 a month; that as sideline, he also works as accountant of United Haulers, Inc. with a salary of P500.00 a month; and that as a result of this incident, plaintiff Sarmiento was unable to perform his normal work for a period of at least 8 months. On the other hand, evidence shows that the other plaintiff Virgilio Catuar is a Chief Clerk in Canlubang Sugar Estate with a salary of P500.00 a month, and as a result of the incident, he was incapacitated to work for a period of one (1) month. "The plaintiffs have filed this case both against Oscar Sabiniano as driver, and against Gualberto Duavit as owner of the jeep. "Defendant Gualberto Duavit, while admitting ownership of the other jeep (Plate No. 99-07-F-J Manila, 1971), denied that the other defendant (Oscar Sabiniano) was his employee. Duavit claimed that he has not been an employer of defendant Oscar Sabiniano at anytime up to the present.

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"On the other hand documentary and testimonial evidence show that defendant Oscar Sabiniano was an employee of the Board of Liquidators from November 14, 1966 up to January 4, 1973 (Annex A of Answer). "Defendant Sabiniano, in his testimony, categorically admitted that he took the jeep from the garage of defendant Duavit without the consent or authority of the latter (TSN, September 7, 1978, p. 8). He testified further, that Duavit even filed charges against him for theft of the jeep, but which Duavit did not push through as his (Sabiniano's) parents apologized to Duavit on his behalf. "Defendant Oscar Sabiniano, on the other hand in an attempt to exculpate himself from liability, makes it appear that he was taking all necessary precaution while driving and the accident occurred due to the negligence of Virgilio Catuar. Sabiniano claims that it was plaintiff's vehicle which hit and bumped their jeep." (Rollo, pp. 21-23) The trial court found Oscar Sabiniano negligent in driving the vehicle but found no employer-employee relationship between him and the petitioner because the latter was then a government employee and he took the vehicle without the authority and consent of the owner. The petitioner was, thus, absolved from liability under Article 2180 of the Civil Code. The private respondents appealed the case. On January 7, 1988, the Court of Appeals rendered the questioned decision holding the petitioner jointly and severally liable with Sabiniano. The appellate court in part ruled: "We cannot go along with appellee's argument. It will be seen that in Vargas v. Langcay, supra, it was held that it is immaterial whether or not the driver was actually employed by the operator of record or registered owner, and it is even not necessary to prove who the actual owner of the vehicle and who the employer of the driver is. When the Supreme Court ruled, thus: `We must hold and consider such owner-operator of record (registered owner) as the employer in contemplation of law, of the driver,' it cannot be construed other than that the registered owner is the employer of the driver in contemplation of law. It is a conclusive presumption of fact and law, and is not subject to rebuttal of proof to the contrary. Otherwise, as stated in the decision, we quote: " 'The purpose of the principles evolved by the decisions in these matters will be defeated and thwarted if we entertain the argument of petitioner that she is not liable because the actual owner and employer was established by the evidence. . . . .' " Along the same vein, the defendant-appellee Gualberto Duavit cannot be allowed to prove that the driver Sabiniano was not his employee at the time of the vehicular accident. "The ruling laid down in Amar V. Soberano (1966), 63 O.G. 6850, by this Court to the effect that the burden of proving the non-existence of an employer-employee relationship is upon the defendant and this he must do by a satisfactory preponderance of evidence, has to defer to the doctrines evolved by the Supreme Court in cases of damages arising from vehicular mishaps involving registered motor vehicle. (See Tugade v. Court of Appeals, 85 SCRA 226, 230). (Rollo, pp. 26-27). The appellate court also denied the petitioner's motion for reconsideration. Hence, this petition. The petitioner contends that the respondent appellate court committed grave abuse of discretion in holding him jointly and severally liable with Sabiniano in spite of the absence of an employer-employee relationship between them and despite the fact that the petitioner's jeep was taken out of his garage and was driven by Sabiniano without his consent. As early as in 1939, we have ruled that an owner of a vehicle cannot be held liable for an accident involving the said vehicle if the same was driven without his consent or knowledge and by a person not employed by him. Thus, in Duquillo v. Bayot (67 Phil. 131-133-134) [1939] we said: "Under the facts established, the defendant cannot be held liable for anything. At the time of the accident, James McGurk was driving the truck, and he was not an employee of the defendant, nor did he have anything to do with the latter's business; neither the defendant nor Father Ayson, who was in charge of her business, consented to have any of her trucks driven on the day of the accident, as it was a holy day, and much less by a chauffeur who was not in charge of driving it; the use of the defendant's truck in the circumstances indicated was done without her consent or knowledge; it may, therefore, be said, that there was not the remotest contractual relation between the deceased Pio Duquillo and the defendant. It necessarily follows from all this that articles 1101 and following of the Civil Code, cited by the appellant, have no application in this case, and, therefore, the errors attributed to the inferior court are without basis."

The Court upholds the above ruling as still relevant and better applicable to present day circumstances. The respondent court's misplaced reliance on the cases of Erezo v. Jepte (102 Phil. 103 [1957] and Vargas v. Langcay (6 SCRA 174 [1962]) cannot be sustained. In the Erezo case, Jepte, the registered owner of the truck which collided with a taxicab, and which resulted in the killing of Erezo, claimed that at the time of the accident, the truck belonged to the Port Brokerage in an arrangement with the corporation but the same was not known to the Motor Vehicles Office. This Court sustained the trial court's ruling that since Jepte represented himself to be the owner of the truck and the Motor Vehicles Office, relying on his representation, registered the vehicle in his name, the Government and all persons affected by the representation had the right to rely on his declaration of ownership and registration. Thus, even if Jepte were not the owner of the truck at the time of the accident, he was still held liable for the death of Erezo. Significantly, the driver of the truck was fully authorized to drive it. Likewise, in the Vargas case, just before the accident occurred, Vargas had sold her jeepney to a third person, so that at the time of the accident she was no longer the owner of the jeepney. This court, nevertheless, affirmed Vargas' liability since she failed to surrender to the Motor Vehicles Office the corresponding AC plates in violation of the Revised Motor Vehicle Law and Commonwealth Act No. 146. We further ruled that the operator of record continues to be the operator of the vehicle in contemplation of law, as regards the public and third persons, and as such is responsible for the consequences incident to its operator. The vehicle

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involved was a public utility jeepney for hire. In such cases, the law does not only require the surrender of the AC plates but orders the vendor operator to stop the operation of the jeepney as a form of public transportation until the matter is reported to the authorities. As can be seen, the circumstances of the above cases are entirely different from those in the present case. Herein petitioner does not deny ownership of the vehicle involved in the mishap but completely denies having employed the driver Sabiniano or even having authorized the latter to drive his jeep. The jeep was virtually stolen from the petitioner's garage. To hold, therefore, the petitioner liable for the accident caused by the negligence of Sabiniano who was neither his driver nor employee would be absurd as it would be like holding liable the owner of a stolen vehicle for an accident caused by the person who stole such vehicle. In this regard, we cannot ignore the many cases of vehicles forcibly taken from their owners at gunpoint or stolen from garages and parking areas and the instances of service station attendants or mechanics of auto repair shops using, without the owner's consent, vehicles entrusted to them for servicing or repair. LLpr We cannot blindly apply absolute rules based on precedents whose facts do not jibe four square with pending cases. Every case must be determined on its own peculiar factual circumstances. Where, as in this case, the records of the petition fail to indicate the slightest indicia of an employer-employee relationship between the owner and the erring driver or any consent given by the owner for the vehicle's use, we cannot hold the owner liable. We, therefore, find that the respondent appellate court committed reversible error in holding the petitioner jointly and severally liable with Sabiniano to the private respondent. WHEREFORE, the petition is GRANTED and the decision and resolution appealed from are hereby ANNULLED and SET ASIDE. The decision of the then Court of First Instance (now Regional Trial Court) of Laguna, 8th Judicial District, Branch 6, dated July 30, 1981 is REINSTATED. SO ORDERED.

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94

[G.R. Nos. L-50127-28. March 30, 1979.] VICTOR JUANIZA, Heirs of Josefa P. Leus, etc., et al., plaintiffs and appellees, vs. EUGENIO JOSE, THE ECONOMIC INSURANCE COMPANY, INC., and ROSALIA ARROYO, defendants and appellants.

Victoriano O. Javier and Ricardo A. Fabros, Jr. for appellees. Luis Viscocho and Francisco E. Rodrigo, Jr. for appellants.

SYNOPSIS The trial court rendered a decision in a civil case for damages arising from a vehicular accident, ordering Eugenio Jose, the registered owner of the subject passenger jeepney, and Rosalia Arroyo to jointly and severally pay damages to the victims of the accident. Rosalia claims that it was error for the trial court to consider her a co-owner of hte said jeepney, just because she had cohabited for many years as wife of Eugenio Jose, a legally married man. The Supreme Court held that the co-ownership contemplated in the Civil Code requires that the man and the woman living together must not be incapacitated to contract marriage, and that only the registered owner of a public service vehicle is responsible for damages that may arise from consequences incident to its operation, or may be caused to any of the passengers therein. Decision modified.

SYLLABUS 1.MARRIAGE; PROPERTY RELATIONS; COMMON LAW SPOUSES. When a man and woman live together as husband and wife, but they are not married, or their marriage is void from the beginning, the property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on co-ownership (Article 144, New Civil Code). The co-ownership contemplated, however, requires that both parties are not in anyway incapacitated to contract marriage. 2.TORTS AND DAMAGES; REGISTERED OWNER OF PUBLIC SERVICE VEHICLE SOLELY LIABLE. It is settled in our jurisprudence that only the registered owner of a public service is responsible for damages that may arise from consequences incident to its operation, or may be caused to any of the passengers therein.

DECISION

DE CASTRO, J p: This case was certified by the Court of Appeals to this Court on the ground that the questions raised in the appeal of the decision of the Court of First Instance of Laguna are purely questions of law. Eugenio Jose was the registered owner and operator of the passenger jeepney involved in an accident of collision with a freight train of the Philippine National Railways that took place on November 23, 1969 which resulted in the death to seven (7) and physical injuries to five (5) of its passengers. At the time of the accident, Eugenio Jose was legally married to Socorro Ramos but had been cohabiting with defendant-appellant, Rosalia Arroyo, for sixteen (16) years in a relationship akin to that of husband and wife. prcd In the resulting cases for damages filed in the Court of First Instance of Laguna, decision was rendered, the dispositive part of which reads as follows: "(4)In Civil Case No. SP-867 ordering defendants Eugenio Jose and Rosalia Arroyo jointly and severally to pay plaintiff Victor Juaniza the sum of P1,500.00 plus legal interest from date of complaint until fully paid and costs of suit; (5)In Civil Case No. SP-872, ordering defendants Eugenio Jose and Rosalia Arroyo jointly and severally to pay the respective heirs of the deceased Josefa P. Leus, Fausto Leus Retrita, Nestor del Rosario Aonuevo and Arceli de la Cueva in the sum of P12,000.00 for the life of each of said deceased, with legal interest from date of complaint, and costs of suit." (pp. 47-48, Rollo). Motion for reconsideration was filed by Rosalia Arroyo praying that the decision be reconsidered insofar as it condemns her to pay damages jointly and severally with her co-defendant, but was denied. The lower court based her liability on the provision of Article 144 of the Civil Code which reads: "When a man and woman living together as husband and wife, but they are not married, or their marriage is void from the beginning, the property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on co-ownership."

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Rosalia Arroyo then filed her appeal with the Court of Appeals which, as previously stated, certified the same to Us, the question raised being purely legal as may be seen from the lone assigned error as follows: "The lower court erred in holding defendant-appellant Rosalia Arroyo liable 'for damages resulting from the death and physical injuries suffered by the passengers' of the jeepney registered in the name of Eugenio Jose, on the erroneous theory that Eugenio Jose and Rosalia Arroyo, having lived together as husband and wife, without the benefit of marriage, are co-owners of said jeepney." (p. 2, Appellant's Brief). The issues thus to be resolved are as follows: (1) whether or not Article 144 of the Civil Code is applicable in a case where one of the parties in a common-law relationship is incapacitated to marry, and (2) whether or not Rosalia who is not a registered owner of the jeepney can be held jointly and severally liable for damages with the registered owner of the same. It has been consistently ruled by this Court that the co-ownership contemplated in Article 144 of the Civil Code requires that the man and the woman living together must not in any way be incapacitated to contract marriage. (Camporedondo vs. Aznar, L-11483, February 4, 1958, 102 Phil. 1055, 1068; Osmea vs. Rodriguez, 54 OG 5526; Malajacan vs. Rubi, 42 OG 5576). Since Eugenio Jose is legally married to Socorro Ramos, there is an impediment for him to contract marriage with Rosalia Arroyo. Under the aforecited provision of the Civil Code, Arroyo cannot be a co-owner of the jeepney. The jeepney belongs to the conjugal partnership of Jose and his legal wife. There is therefore no basis for the liability of Arroyo for damages arising from the death of, and physical injuries suffered by, the passengers of the jeepney which figured in the collision. Rosalia Arroyo, who is not the registered owner of the jeepney can neither be liable for damages caused by its operation. It is settled in our jurisprudence that only the registered owner of a public service vehicle is responsible for damages that may arise from consequences incident to its operation, or maybe caused to any of the passengers therein. (De Peralta vs. Mangusang, L-18110, July 31, 1964, 11 SCRA 598; Tamayo vs. Aquino, L-12634 and L-12720, May 29, 1959; Roque vs. Malibay Transit, L-8561, November 18, 1955; Montoya vs. Ignacio, L-5868, December 29, 1953). WHEREFORE, in view of the foregoing, Rosalia Arroyo is hereby declared free from any liability for damages and the appealed decision is hereby modified accordingly. No costs. prcd Teehankee (Chairman), Makasiar, Fernandez, Guerrero and Melencio Herrera, JJ., concur.

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[G.R. No. 118889. March 23, 1998.] FGU INSURANCE CORPORATION, petitioner, vs. COURT OF APPEALS, FILCAR TRANSPORT, INC., and FORTUNE INSURANCE CORPORATION, respondents.

Carpio, Ferrer & Evangelista Law Offices and Santiago Arevalo Tomas & Associates for petitioner. Nicolas A. Gerochi, Jr. for Filcar, Inc.

SYNOPSIS This case involves a collision of two cars. One car is owned by Lydia F. Soriano and driven by Benjamin Jacildone, while the other car is owned by FILCAR Transport, Inc. and driven by Peter Dahl-Jensen, as lessee. Consequently, petitioner FGU Insurance Corporation paid Soriano an amount in accordance with their insurance contract. By way of subrogation, it sued Dahl-Jensen and respondent FILCAR as well as respondent Fortune Insurance Corporation as insurer of FILCAR for quasi-delict before the Regional Trial Court of Makati City. The trial court dismissed the case for failure of petitioner to substantiate its claim of subrogation. The Court of Appeals affirmed the ruling of the trial court. Petitioner failed to establish its cause of action for sum of money based on quasi-delict. In this appeal, petitioner insists that respondents FILCAR and Fortune are liable on the strength of the Supreme Court ruling that the registered owner of a vehicle is liable for damages suffered by third persons although the vehicle is leased to another. This petition was denied by the Supreme Court and the dismissal of the petitioner's complaint was affirmed. The liability imposed by Art. 2180 of the Civil Code arises by virtue of a presumption juris tantum of the negligence on the part of the persons made responsible thereunder, derived from their failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage. Respondent FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them as employer and employee. Respondent FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being the employer of the latter. The provision of Art. 2184 of the Civil Code is neither applicable because of the absence of master-driver relationship between respondent FILCAR and Dahl-Jensen. ACcDEa

SYLLABUS 1.CIVIL LAW; DAMAGES; QUASI-DELICT; DEFINED. The pertinent provision is Art. 2176 of the Civil Code which states: " 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 . . ." 2.ID.; ID.; ID.; REQUISITES; NOT PRESENT IN CASE AT BAR. To sustain a claim based thereon, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff. We agree with respondent court that petitioner failed to prove the existence of the second requisite, i.e., fault or negligence of defendant FILCAR, because only the fault or negligence of DahlJensen was sufficiently established, not that of FILCAR. It should be noted that the damage caused on the vehicle of Soriano was brought about by the circumstance that Dahl-Jensen swerved to the right while the vehicle that he was driving was at the center lane. It is plain that the negligence was solely attributable to Dahl-Jensen thus making the damage suffered by the other vehicle his personal liability. Respondent FILCAR did not have any participation therein. ICHcTD 3.ID.; ID.; ID.; PERSONS LIABLE; WHEN CAR OWNER MAY NOT BE HELD LIABLE; CASE AT BAR. The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of the negligence on the part of the persons made responsible thereunder, derived from their failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage. Yet, as correctly observed by respondent court, Art. 2180 is hardly applicable because none of the circumstances mentioned therein obtains in the case under consideration. Respondent FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them as employer and employee. Respondent FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being the employer of the latter. We now correlate par. 5 of Art. 2180 with Art. 2184 of the same Code which provides: " In motor vehicle mishap, the owner is solidarily liable with his driver, if the former , who was in the vehicle, could have by the use of due diligence, prevented the misfortune . . . If the owner was not in the motor vehicle, the provisions of Article 2180 are applicable ." Obviously, this provision of Art. 2184 is neither applicable because of the absence of master-driver relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has no cause of action against respondent FILCAR on the basis of quasi-delict; logically, its claim against respondent FORTUNE can neither prosper. aTEHIC

DECISION

BELLOSILLO, J p: For damages suffered by a third party, may an action based on quasi-delict prosper against a rent-a-car company and, consequently, its insurer for fault or negligence of the car lessee in driving the rented vehicle? LLjur This was a two-car collision at dawn. At around 3 o'clock of 21 April 1987, two (2) vehicles, both Mitsubishi Colt Lancers, cruising northward along Epifanio de los Santos Avenue, Mandaluyong City, figured in a traffic accident. The car bearing Plate No. PDG 435 owned by Lydia F. Soriano was being driven at the outer lane of the highway by Benjamin Jacildone, while the other car, with Plate No.

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PCT 792, owned by respondent FILCAR Transport, Inc. (FILCAR), and driven by Peter Dahl-Jensen as lessee, was at the center lane, left of the other vehicle. Upon approaching the corner of Pioneer Street, the car owned by FILCAR swerved to the right hitting the left side of the car of Soriano. At that time Dahl-Jensen, a Danish tourist, did not possess a Philippine driver's license. 1 As a consequence, petitioner FGU Insurance Corporation, in view of its insurance contract with Soriano, paid the latter P25,382.20. By way of subrogation, 2 it sued Dahl-Jensen and respondent FILCAR as well as respondent Fortune Insurance Corporation (FORTUNE) as insurer of FILCAR for quasi-delict before the Regional Trial Court of Makati City. Unfortunately, summons was not served on Dahl-Jensen since he was no longer staying at his given address; in fact, upon motion of petitioner, he was dropped from the complaint. On 30 July 1991 the trial court dismissed the case for failure of petitioner to substantiate its claim of subrogation. 3 On 31 January 1995 respondent Court of Appeals affirmed the ruling of the trial court although based on another ground, i.e., only the fault or negligence of Dahl-Jensen was sufficiently proved but not that of respondent FILCAR. 4 In other words, petitioner failed to establish its cause of action for sum of money based on quasi-delict. In this appeal, petitioner insists that respondents are liable on the strength of the ruling in MYC-Agro-Industrial Corporation v. Vda. de Caldo 5 that the registered owner of a vehicle is liable for damages suffered by third persons although the vehicle is leased to another. We find no reversible error committed by respondent court in upholding the dismissal of petitioner's complaint. The pertinent provision is Art. 2176 of the Civil Code which states: "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 . . ." To sustain a claim based thereon, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff. 6 We agree with respondent court that petitioner failed to prove the existence of the second requisite, i.e., fault or negligence of defendant FILCAR, because only the fault or negligence of Dahl-Jensen was sufficiently established, not that of FILCAR. It should be noted that the damage caused on the vehicle of Soriano was brought about by the circumstance that Dahl-Jensen swerved to the right while the vehicle that he was driving was at the center lane. It is plain that the negligence was solely attributable to Dahl-Jensen thus making the damage suffered by the other vehicle his personal liability. Respondent FILCAR did not have any participation therein. Article 2180 of the same Code which deals also with quasi-delict provides: The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company. Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company. The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable.

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody. The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of negligence on the part of the persons made responsible thereunder, derived from their failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage. 7 Yet, as correctly observed by respondent court, Art. 2180 is hardly applicable because none of the circumstances mentioned therein obtains in the case under consideration. Respondent FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them as employer and employee. Respondent FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being an employer of the latter. We now correlate par. 5 of Art. 2180 with Art. 2184 of the same Code which provides: " In motor vehicle mishap, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have by the use of due diligence, prevented the misfortune . . . If the

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owner was not in the motor vehicle, the provisions of article 2180 are applicable." Obviously, this provision of Art. 2184 is neither applicable because of the absence of master-driver relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has no cause of action against respondent FILCAR on the basis of quasi-delict; logically, its claim against respondent FORTUNE can neither prosper. Petitioner's insistence on MYC-Agro-Industrial Corporation is rooted in a misapprehension of our ruling therein. In that case, the negligent and reckless operation of the truck owned by petitioner corporation caused injuries to several persons and damage to property. Intending to exculpate itself from liability, the corporation raised the defense that at the time of the collision it had no more control over the vehicle as it was leased to another; and, that the driver was not its employee but of the lessee. The trial court was not persuaded as it found that the true nature of the alleged lease contract was nothing more than a disguise effected by the corporation to relieve itself of the burdens and responsibilities of an employer. We upheld this finding and affirmed the declaration of joint and several liability of the corporation with its driver. WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals dated 31 January 1995 sustaining the dismissal of petitioner's complaint by the trial court is AFFIRMED. Costs against petitioner. SO ORDERED. cdasia

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[G.R. No. 161946. November 14, 2008.] MEDARDO AG. CADIENTE, petitioner, vs. BITHUEL MACAS, respondent.

DECISION

QUISUMBING, Acting C.J p: For review on certiorari are the Decision 1 dated September 16, 2002 and the Resolution 2 dated December 18, 2003 of the Court of Appeals in CA-G.R. CV No. 64103, which affirmed the Decision 3 of the Regional Trial Court (RTC) of Davao City, Branch 10, in Civil Case No. 23,723-95. aETDIc The facts are undisputed. Eyewitness Rosalinda Palero testified that on July 19, 1994, at about 4:00 p.m., at the intersection of Buhangin and San Vicente Streets in Davao City, 15-year old high school student Bithuel Macas, herein respondent, was standing on the shoulder of the road. She was about two and a half meters away from the respondent when he was bumped and run over by a Ford Fiera, driven by Chona C. Cimafranca. Rosalinda and another unidentified person immediately came to the respondent's rescue and told Cimafranca to take the victim to the hospital. Cimafranca rushed the respondent to the Davao Medical Center. Dr. Hilario Diaz, the orthopedic surgeon who attended to the respondent, testified that the respondent suffered severe muscular and major vessel injuries, as well as open bone fractures in both thighs and other parts of his legs. In order to save his life, the surgeon had to amputate both legs up to the groins. 4 Cimafranca had since absconded and disappeared. Records showed that the Ford Fiera was registered in the name of herein petitioner, Atty. Medardo Ag. Cadiente. However, Cadiente claimed that when the accident happened, he was no longer the owner of the Ford Fiera. He alleged that he sold the vehicle to Engr. Rogelio Jalipa on March 28, 1994, 5 and turned over the Certificate of Registration and Official Receipt to Jalipa, with the understanding that the latter would be the one to cause the transfer of the registration. The victim's father, Samuel Macas, filed a complaint 6 for torts and damages against Cimafranca and Cadiente before the RTC of Davao City, Branch 10. Cadiente later filed a third-party complaint 7 against Jalipa. In answer, Jalipa claimed that he was no longer the owner of the Ford Fiera at the time of the accident. He alleged that he sold the vehicle to Abraham Abubakar on June 20, 1994. 8 He thus filed a fourth-party complaint 9 against Abubakar. After trial, the court ruled: WHEREFORE, judgment is rendered in favor of the plaintiff declaring Atty. Medardo Ag. Cadiente and Engr. Rogelio Jalipa jointly and severally liable for damages to the plaintiff for their own negligence as stated above, and ordering them to indemnify the plaintiff jointly and severally as follows: TcDIaA (a)P300,000.00 as compensatory damages for the permanent and almost total disability being suffered by him; (b)P150,000.00 for moral damages; (c)P18,982.85 as reimbursement of medical expenses; (d)P30,000.00 for attorney's fees; and (e)costs of suit. SO ORDERED. 10 On appeal, the Court of Appeals held that the findings of the trial court were in accordance with the established facts and was supported by the evidence on record. Thus, it decreed as follows: WHEREFORE, premises considered, the instant appeal is DENIED and the decision of the Regional Trial Court of Davao City in Civil Case No. 23723-95 is hereby AFFIRMED. SO ORDERED. 11 From the aforequoted decision of the Court of Appeals and the subsequent denial of the motion for reconsideration, only Cadiente appealed to this Court. The instant petition alleges that the Court of Appeals committed serious errors of law in affirming the decision of the trial court. Petitioner Cadiente raises the following as issues:

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I. WAS THERE . . . CONTRIBUTORY NEGLIGENCE ON THE PART OF THE INJURED PARTY? II. ARE BOTH DEFENDANT CADIENTE AND THIRD-PARTY DEFENDANT JOINTLY AND SEVERALLY LIABLE TO THE INJURED PARTY? III. THE HONORABLE COURT OF APPEAL[S] COMMIT[T]ED GRAVE LEGAL ERROR IN ORDERING DEFENDANT CADIENTE AND THIRD-PARTY DEFENDANT JALIPA JOINTLY AND SEVERALLY LIABLE. 12 Essentially, the issues to be resolved are: (1) Whether there was contributory negligence on the part of the victim; and (2) whether the petitioner and third-party defendant Jalipa are jointly and severally liable to the victim. The petitioner contends that the victim's negligence contributed to his own mishap. The petitioner theorizes that if witness Rosalinda Palero, who was only two and a half meters away from the victim, was not hit by the Ford Fiera, then the victim must have been so negligent as to be bumped and run over by the said vehicle. 13 DHAcET The petitioner further argues that having filed a third-party complaint against Jalipa, to whom he had sold the Ford Fiera, the Court of Appeals should have ordered the latter to reimburse him for any amount he would be made to pay the victim, instead of ordering him solidarily liable for damages. 14 The respondent, for his part, counters that the immediate and proximate cause of the injuries he suffered was the recklessly driven Ford Fiera, which was registered in the petitioner's name. He insists that when he was hit by the vehicle, he was standing on the uncemented portion of the highway, which was exactly where pedestrians were supposed to be. 15 The respondent stresses that as the registered owner of the Ford Fiera which figured in the accident, the petitioner is primarily liable for the injury caused by the said vehicle. He maintains that the alleged sale of the vehicle to Jalipa was tainted with irregularity, which indicated collusion between the petitioner and Jalipa. 16 After a careful consideration of the parties' submissions, we find the petition without merit. Article 2179 of the Civil Code provides: When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded. The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full, but must proportionately bear the consequences of his own negligence. The defendant is thus held liable only for the damages actually caused by his negligence. 17 In this case, records show that when the accident happened, the victim was standing on the shoulder, which was the uncemented portion of the highway. As noted by the trial court, the shoulder was intended for pedestrian use alone. Only stationary vehicles, such as those loading or unloading passengers may use the shoulder. Running vehicles are not supposed to pass through the said uncemented portion of the highway. However, the Ford Fiera in this case, without so much as slowing down, took off from the cemented part of the highway, inexplicably swerved to the shoulder, and recklessly bumped and ran over an innocent victim. The victim was just where he should be when the unfortunate event transpired. cAHIaE Cimafranca, on the other hand, had no rightful business driving as recklessly as she did. The respondent cannot be expected to have foreseen that the Ford Fiera, erstwhile speeding along the cemented part of the highway would suddenly swerve to the shoulder, then bump and run him over. Thus, we are unable to accept the petitioner's contention that the respondent was negligent. Coming now to the second and third issues, this Court has recently reiterated in PCI Leasing and Finance, Inc. v. UCPB General Insurance Co., Inc., 18 that the registered owner of any vehicle, even if he had already sold it to someone else, is primarily responsible to the public for whatever damage or injury the vehicle may cause. We explained, . . . Were a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him, by collusion with others or otherwise, to escape said responsibility and transfer the same to an indefinite person, or to one who possesses no property with which to respond financially for the damage or injury done. A victim of recklessness on the public highways is usually without means to discover or identify the person actually causing the injury or damage. He has no means other than by a recourse to the registration in the Motor Vehicles Office to determine who is the owner. The protection that the law aims to extend to him would become illusory were the registered owner given the opportunity to escape liability by disproving his ownership. 19 In the case of Villanueva v. Domingo, 20 we said that the policy behind vehicle registration is the easy identification of the owner who can be held responsible in case of accident, damage or injury caused by the vehicle. This is so as not to inconvenience or prejudice a third party injured by one whose identity cannot be secured. 21

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Therefore, since the Ford Fiera was still registered in the petitioner's name at the time when the misfortune took place, the petitioner cannot escape liability for the permanent injury it caused the respondent, who had since stopped schooling and is now forced to face life with nary but two remaining limbs. WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated September 16, 2002 and Resolution dated December 18, 2003 of the Court of Appeals in CA-G.R. CV No. 64103 are hereby AFFIRMED. Costs against the petitioner. ADCTac SO ORDERED.

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[G.R. No. L-20322. May 29, 1968.] REPUBLIC OF THE PHILIPPINES, petitioner, vs. HON. PERFECTO R. PALACIO, as Judge of the Court of First Instance of Camarines Sur, MACARIO M. OFILADA, as Ex-officio Sheriff of Manila and ILDEFONSO ORTIZ, respondents.

Solicitor General for petitioner. Luis Contreras for respondents.

SYLLABUS 1.POLITICAL LAW; STATE; STATE IMMUNITY FROM SUIT: WAIVER OF IMMUNITY DOES NOT NECESSARILY SUBJECT ITS PROPERTY AND FUNDS TO SEIZURE. The mere waiver of the State of its immunity does not render its property and funds liable to seizure under legal process. Judgments against a State, where it has consented to be sued, operate merely to liquidate and establish the plaintiff's claim but they cannot be enforced by processes of law; it is up to the legislature to provide for their payment in such manner as it sees fit. 2.ID.; ID.; ID.; STATE LIABLE ONLY FOR TORTS CAUSED BY SPECIAL AGENTS. The initial complaint against the Irrigation Service Unit was that it induced the Handong Irrigation Associations, Inc., to invade and occupy the land of respondent Ortiz. This liability thus arose from tort and not from contract and it is a well-entrenched rule embodied in art. 2180 of the Civil Code that the State is liable only for torts caused by its special agents specifically commissioned to carry out acts complained of outside of such agent's regular duties. In the absence of proof that the tortious inducement was authorized, neither the State nor its funds are liable therefor.

DECISION

REYES, J.B.L., J p: This is a petition for review of the decision of the Court of Appeals (in CA-G.R. No. 30915), dismissing the original action for certiorari and prohibition filed with said Court by herein petitioner Republic of the Philippines, to restrain the enforcement of a writ of execution (issued by the Court of First Instance of Camarines Sur in its Civil Case No. 4886) on the trust fund in the account of the Irrigation Service Unit with the Philippine National Bank. There is no controversy as to the following facts: On April 2, 1960, Ildefonso Ortiz instituted in the Court of First Instance of Camarines Sur Civil Case No. 4886, against the Handong Irrigation Association, Inc., a corporation with principal place of business in Libmanan, Camarines Sur, and the Irrigation Service Unit, an office or agency under the Department of Public Works and Communications, to recover possession, with damages, of 958-square meter-lot located in Handong, San Juan, Libmanan, Camarines Sur, which the Irrigation Association allegedly entered and occupied, at the instance of its co-defendant. For failure to appear and answer the complaint, therein defendant Irrigation Service Unit was declared in default. On June 3, 1960, the Republic of the Philippines, through the Solicitor General, moved for the dismissal of the complaint, claiming that defendant Irrigation Service Unit has no juridical personality to sue and be sued. By order of June 11, 1960, this motion was denied, on the ground that the said defendant although a mere agency of the Republic of the Philippines, is engaged in the private business of selling irrigation pumps and construction materials on installment plan. The Solicitor General's motion for reconsideration of the aforesaid order was also denied on July 19, 1960. No appeal appears to have been taken. On January 29, 1962, the Solicitor General was served with copy of the writ of execution issued by the court against the defendants in the above-mentioned civil case; and, on February 16, 1962, an order of garnishment was served by the Sheriff of Manila against the deposits and/or pump irrigation trust fund in the account of the Irrigation Service Unit at the Philippine National Bank, Manila, to cover the sum of P14,874.40. 1 On March 8, 1962, the Solicitor General, on behalf of the Republic of the Philippines, filed with the lower court an urgent motion to lift the order of garnishment, for the reason that the funds subject matter thereof are public funds and exempt from attachment or execution. Upon denial of this motion, as well as of the motion for reconsideration of said denial, the Solicitor General commenced the present certiorari and prohibition proceeding in the Court of Appeals. In its decision of August 21, 1962, the appellate court sustained the propriety of the disputed garnishment-order, and dismissed the Government's petition, on the basis of the finding by the trial court that the Irrigation Service Unit, "formerly an office under the Department of Agriculture and Natural Resources created by virtue of a 'Memorandum of Agreement on the Irrigation Pump Program of the Philippines' signed by the Chairman of the PHILCUSA (now NEC), Chief of the MSA Mission (now AID) and the Secretary of Agriculture and Natural Resources, and presently under the Department of Public Works and Communications to which it was transferred", is engaged in a private business of purchase and sale of irrigation pumps and systems. Consequently, according to the Court of Appeals and following the ruling in the case of National Airports Corporation vs. Teodoro et al., L-5122, April 30, 1952 (91 Phil. 203), by thus engaging in private business, the Government, through the Irrigation Service Unit, had actually consented to the suit. Hence, the present petition for review filed by the Republic of the Philippines.

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The issue presented by this case is whether or not the pump irrigation trust fund, deposited with the Philippine National Bank in the account of the Irrigation Service Unit, may be garnished to satisfy a money-judgment against the latter. This issue in turn calls for a determination of the nature of said trust fund, i.e., whether it is a fund belonging to the national Government (which was not a party to Civil Case No. 4886), as maintained by herein petitioner, or purely the proceeds of a private venture by the government, as claimed by the respondents. For a better understanding of the nature, function and operation of the Irrigation Service Unit (ISU) which is necessary for the proper resolution of the issue herein involved, it is worthwhile to recall that this office was originally created under the Department of Agriculture and Natural Resources by virtue of a Memorandum Agreement between the governments of the Philippines and the United States, dated August 13, 1952. It was later transferred to the Department of Public Works and Communications as an office directly under the Office of the Secretary, "to prosecute to completion the rehabilitation of pump systems transferred from the former Irrigation Pump Administration of the Department of Agriculture and Natural Resources, 2 including the settlement of the obligations of said administration." The budgetary requirements to carry out the objectives of the project were to be financed by withdrawals from the Counterpart Fund-Special Account (Memorandum Agreement of June, 1954.) This Counterpart Fund-Special Account referred to above was established in the Central Bank by the Government of the Philippines and made up of deposits in pesos commensurate with the indicated dollar cost to the Government of the United States of economic and technical assistance made available to the Philippines, pursuant to the Bilateral Agreement between the Philippines and the United States of April 27, 1951; of deposits accruing to it (Philippine government) from the sale of commodities or services supplied under the Agreement or otherwise accruing to it as a result of the import of such commodities or service; and of any advance deposits which the Philippine government may make in the Special Account (Sec. 1, paragraphs 2[a],[b],and [c], Annex to Memo. Agreement of April 27, 1951). Later, on the basis of a supplemental agreement (No. 2, Counterpart Project No. 409 Pump Irrigation), the Pump Irrigation Trust Fund was established in the Philippine National Bank, to which all authorized releases to the ISU 3 from the Counterpart Fund Special Account, to finance the peso-cost of the Irrigation Pump Project, were transferred. This is the fund on which the disputed writ of execution for money judgment rendered against the ISU, is being enforced. A reading of the records and documents submitted to the Court of Appeals will readily show that the sales of irrigation pumps to farmers by ISU are governed by the terms of the Supplemental Agreement No. 2 to Counterpart Project No. 409 (signed by representatives of the Philippine and U.S. governments) hereunder copied in full: "C Disposition of Proceeds from Payments under Contracts of Sale. "1.Under the Guiding Principles of the Irrigation Pump Project, pumps are sold to farmers' associations under conditional sales contracts. Periodic payments to ISU by each association are required. The total payment required under the contract is stated in the contract and is equal to the sum of (a) the landed cost of equipment at the installation site, (b) the cost of installation and construction including survey and design, (c) the cost of fuel and oil financed for the first crop season, if any, (d) ten per cent of the total of (a) and (b) to cover the costs of administration, technical assistance furnished by the ISU, inspection and collection, and (e) the compensating use tax to the Philippine Government. Interest is also payable under each contract at the rate of six percent per annum on any unpaid balance of the total amount of the contract. "2.All principal and interest payments received by the ISU from farmers' associations shall be deposited immediately in the Trust Fund. The separate account established by the project agreement for Counterpart Project 409, entitled 'Irrigation Pump Sales Proceeds Account' is hereby abolished and any deposits therein will be immediately transferred to the Trust Fund. "3.Whenever the total value of all deposits made to the Trust Fund from contract principal and interest payments exceeds the value of total releases made to the Trust Fund from the Counterpart Fund- Special Account, these excess deposits shall be transferred from the Trust Fund to the Counter fund-Special Account. Such transfers shall be considered as 'proceeds of sale' and 'advance deposits' as provided in Annex Section 1, (b) and (c) of the Bilateral Agreement between the Republic of the Philippines and the United States of America."

It was also provided therein that the payments by the farmers' associations on conditional sales agreements specified in paragraph C- 2 above, will be considered in the preparation, and shall form part, of the ISU annual budget, which will finance the costs of supply and equipment purchases, the installation and construction of pump units, and the operating expenses of ISU for which appropriated funds are not available. (Par. B 1). It is clear from the foregoing that the ISU is not only an office in the Government of the Republic of the Philippines, created to promote a specific economic policy of said government, but also that its activity (of selling irrigation pumps to farmers on installment basis) is not intended to earn profit or financial gain to its operator. The mere fact that interests are being collected on the balance of the unpaid cost of the purchased pumps does not convert this economic project of the government into a corporate activity. As previously pointed out, the installment payments and interests receivable from the farmers are to be used to replenish the counterpart funds utilized in furtherance of the operation of the project. Although evidently acknowledging the nature of the Pump Irrigation Trust Fund as a public fund, the Court of Appeals nevertheless sustained the garnishment order, on the ground that the ISU, by engaging in the private business of purchasing and selling irrigation pumps on installment basis, has waived its governmental immunity and, by implication, consented to the suit. It is apparent that this decision of the Court of Appeals suffers from the erroneous assumption that because the State has waived its immunity, its property and funds become liable to seizure under legal process. This emphatically is not the law (Merritt vs. Insular Government, 34 Phil. 311). "Even though the rule as to immunity of a state from suit is relaxed, the power of the courts ends when the judgment is rendered. Although the liability of the state has been judicially ascertained, the state is at liberty to

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determine for itself whether to pay the judgment or not, and execution can not issue on a judgment against the state. Such statutes do not authorize a seizure of state property to satisfy judgments recovered, and only convey an implication that the legislature will recognize such judgment as final and make provision for the satisfaction thereof." (49 Am. Jur., sec. 104, pp. 312-320.) "Judgment against a state, in cases where it has consented to be sued, generally operate merely to liquidate and establish plaintiff's claim in the absence of express provision; otherwise they can not be enforced by processes of law; and it is for the legislature to provide for their payment in such manner as it sees fit." (59 C.J. sec. 501, p. 331; 81 C.J.S., sec. 232, p. 1343.) It needs no stressing that to allow the levying under execution of the ISU funds would amount to diverting them from the purposes originally contemplated by the P.I. U.S. Bilateral Agreement, and would amount to a disbursement without any proper appropriation as required by law. A second infirmity of the decision under appeal originates from its ignoring the fact that the initial complaint against the Irrigation Service Unit was that it had induced the Handong Irrigation Association, Inc., to invade and occupy the land of the plaintiff Ildefonso Ortiz. The ISU liability thus arose from tort and not from contract; and it is a well-entrenched rule in this jurisdiction, embodied in Article 2180 of the Civil Code of the Philippines, that the State is liable only for torts caused by its special agents, specifically commissioned to carry out the acts complained of outside of such agent's regular duties (Merritt vs. Insular Government, supra; Rosete vs. Auditor General, 81 Phil. 453). There being no proof that the making of the tortious inducement was authorized, neither the State nor its funds can be made liable therefor. WHEREFORE, the decision of the Court of Appeals under review is reversed and set aside, and the order of garnishment issued by the Sheriff of Manila on the Pump Irrigation Trust Fund in the account of the Irrigation Service Unit, with the Philippine National Bank, is hereby declared null and void. The writ of preliminary injunction heretofore issued is made permanent. No costs. Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., concur. Fernando, J., is on official leave.

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FIRST DIVISION [G.R. No. 11154. March 21, 1916.] E. MERRITT, plaintiff-appellant, vs. GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.

Crossfield & O'Brien for plaintiff. Attorney-General Avancea for defendant.

SYLLABUS 1.DAMAGES; MEASURE OF. Where the evidence shows that the plaintiff was wholly incapacitated for six months it is an error to restrict the damages to a shorter period during which he was confined in the hospital. 2.SPECIAL STATUTES; CONSENT OF THE STATE TO BE SUED; CONSTRUCTION. The Government of the Philippine Islands having been "modeled after the federal and state governments of the United States' the decisions of the high courts of that country may be used in determining the scope and purpose of a special statute. 3.ID.; ID.; ID. The state not being liable to suit except by its express consent, an act abrogating that immunity will be strictly construed. 4.ID.; ID.; ID. An act permitting a suit against the state gives rise to no liability not previously existing unless it is clearly expressed in the act. 5.GOVERNMENT OF THE PHILIPPINE ISLANDS; LIABILITY FOR THE NEGLIGENT ACTS OF ITS OFFICERS, AGENTS, AND EMPLOYEES. The Government of the Philippine Islands in only liable for the negligent acts of its officers, agents, and employees when they are acting as special agents within the meaning of paragraph 5 of article 1903 of the Civil code, and a chauffeur of the General Hospital is not such a special agent.

DECISION

TRENT, J p: This is an appeal by both partied from a judgment of the Court of First Instance of the city of Manila in favor of the plaintiff for the sum of P14,741, together with the costs of the cause. Counsel for the plaintiff insist that the trial court erred (1) "in limiting the general damages which the plaintiff suffered to P5,000, instead of P25,000 as claimed in the complaint," and (2) "in limiting the time when plaintiff was entirely disabled to two months and twenty-one days and fixing the damage accordingly in the sum of P2,666, instead of P6,000 as claimed by plaintiff in his complaint." The Attorney-General on behalf of the defendant urges that the trial court erred: (a) in finding that the collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due to the negligence of the chauffeur; ( b) in holding that the Government of the Philippine Islands is liable for the damages sustained by the plaintiff as a result of the collision, even if it be true that collision was due to the negligence of the chauffeur; and (c) in rendering judgment against the defendant for the sum of P14,741. The trial court's findings of fact, which are fully supported by the record, are as follows: "It is a fact not disputed by counsel for the defendant that when the plaintiff, riding on a motorcycle, was going toward the western part of Calle Padre Faura, passing along the west side thereof at a speed of ten to twelve miles and hour, upon crossing Taft Avenue and when he was ten feet from the southwestern intersection of said streets, the General Hospital ambulance, upon reaching said avenue, instead of turning toward the south, after passing the center thereof, so that it would be on the left side of said avenue, as is prescribed by the ordinance and the Motor Vehicle Act, turned suddenly and unexpectedly and long before reaching the center of the street, into the right side of Taft Avenue, without having sounded any whistle or horn, by which movement it struck the plaintiff, who was already six feet from the southwestern point or from the post placed there. "By reason of the resulting collision, the plaintiff was so severely injured that, according to Dr. Saleeby, who examined him on the very same day that he was taken to the General Hospital, he was suffering from a depression in the left parietal region, a wound in the same place and in beck part of his head, while blood issued from his nose and he was entirely unconscious. "The marks revealed that he had one or more fractures of the skull and that the grey matter and brain mass had suffered material injury. At ten o'clock of the night in question, which was the time set for performing the operation, his pulse was so weak and so irregular that, in his opinion, there was little hope that he would live. His right leg was broken in such a way that the fracture extended to the outer skin in such manner that it might be regarded as double and the wound would be expose to infection, for which reason it was of the most serious nature. "At another examination six days before the day of the trial, Dr. Saleeby notice that the plaintiff's leg showed a contraction of an inch and a half and a curvature that made his leg very weak and painful at the point of the fracture. Examination of his head revealed a notable re-adjustment of the functions of the brain and nerves. The patient apparently was slightly deaf, had a slight weakness in his eyes and in his mental condition. This latter

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weakness was always noticed when the plaintiff had to do any difficult mental labor, especially when he attempted to use his memory for mathematical calculations. "According to the various merchants who testified as witnesses, the plaintiff's mental and physical condition prior to the accident was excellent, and that after having received the injuries that have been discussed, his physical condition had undergone a noticeable depreciation, for he had lost the agility, energy, and ability that he had constantly displayed before the accident as one of the best constructors of wooden buildings and he could not now earn even a half of the income that he had secured for his work because he had lost 50 per cent of his efficiency. As a contractor, he could no longer, as he had before done, climb up ladders and scaffoldings to reach the highest parts of the building. "As a consequence of the loss the plaintiff suffered in the efficiency of his work as a contractor, he had to dissolve the partnership he had formed with the engineer, Wilson, because he was incapacitated from making mathematical calculations on account of the condition of his leg and of his mental faculties, and he had to give up a contract he had for the construction of the Uy Chaco building." We may say at the outset that we are in full accord with the trial court to the effect that the collision between the plaintiff's motorcycle and the ambulance of the General Hospital was due solely to the negligence of the chauffeur. The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff are ( a) P5,000, the amount awarded for permanent injuries, and (b) the P2,666, the amount allowed for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. We fund nothing in the record which would justify us in increasing the amount of the first. as to the second, the record shows, and the trial court so found, that the plaintiff's services as a contractor were worth P1,000 per month. The court, however, limited the time to two months and twenty-one days, which the plaintiff was actually confined in the hospital. In this we think there was error, because it was clearly established that the plaintiff was wholly incapacitated for a period of sex months. The mere fact that he remained in the hospital only two months and twenty-one days while the remainder of the six months was spent in his home, would not prevent recovery for the whole time. We, therefore, find that the amount of damages sustained by the plaintiff, without any fault on his part, is P18,075. As the negligence which caused the collision is a tort committed by an agent or employee of the Government, the inquiry at once arises whether the Government is legally liable for the damages resulting therefrom. Act No. 2457, effective February 3, 1915, reads: "An act authorizing E. Merritt to bring suit against the Government of the Philippine Islands and authorizing the Attorney-General of said Islands to appear in said suit. "Whereas a claim has been filed against the Government of the Philippine Islands by Mr. E. Merritt, of Manila, for damages resulting from a collision between his motorcycle and the ambulance of the General Hospital on March twenty-fifth, nineteen hundred and thirteen; "Whereas it is not known who is responsible for the accident nor is it possible to determine the amount of damages, if any , to which the claimant is entitled; and "Whereas the Director of Public Works and the Attorney-General recommend that an act be passed by the Legislature authorizing Mr. E. Merritt to bring suit in the courts against the Government, in order that said questions may be decided: Now, therefore, "By authority of the United States, be it enacted by the Philippine Legislature, that: "SECTION 1. E.Merritt is hereby authorized to bring suit in the Court of First Instance of the city of Manila against the Government of the Philippine Islands in order to fix the responsibility for the collision between his motorcycle and the ambulance of the General Hospital, and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, and the attorney-General of the Philippine Islands is hereby authorized and directed to appear at the trial on the behalf of the Government of said Islands, to defend said Government at the same. "SEC. 2.This Act shall take effect on its passage. "Enacted, February 3, 1915." Did the defendant, in enacting the above quoted act, simply waive its immunity from suit or did it also concede its liability to the plaintiff? If only the former, then it cannot be held that the Act created any new cause of action in favor of the plaintiff or extended the defendant's liability to any case not previously recognized. All admit that the Insular Government (the defendant) cannot be sued by an individual without its consent. It is also admitted that the instant case is one against the Government. As the consent of the Government to be sued by the plaintiff was entirely voluntary on its part, it is our duty to look carefully into the terms of the consent, and render judgment accordingly.

The plaintiff was authorized to bring this action against the Government "in order to fix the responsibility for the collision between his motorcycle and the ambulance of the General Hospital and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, . . . ." These were the two questions submitted to the court for determination. The Act was passed "in order that said questions may be decided." We have "decided" that the accident was due solely to the negligence of the chauffeur, who was at the time an employee of the defendant, and we have also fixed the amount of damages sustained by the plaintiff as a result of the collision. Does the Act authorize us to hold that the Government is legally liable for that amount? If not, we must look elsewhere for such authority, if it exists. The Government of the Philippine Islands having been "modeled after the Federal and state Governments in the United States," we may look to the decisions of the high courts of that country for aid in determining the purpose and scope of Act No. 2457. In the United States the rule that the state is not liable for the torts committed by its officers or agents whom it employs, except when expressly made so by legislative enactment, is well settled. "The Government," says Justice Story, "does not undertake to guarantee to any person the fidelity of the officers or agents whom it employs, since that would involve it in all its operations in endless embarrassments, difficulties and losses, which would be subversive of the public interest." (Claussen vs. City of Luverne, 103 Minn., 491, citing U.S. vs. Kirkpatrick, 9 Wheat, 720; 6 L. Ed., 199; and Beers vs. State, 20 How., 527; 15 L. Ed., 991.)

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In the case of Melvin vs. State ( 121 Cal., 16), the plaintiff sought to recover damages from the state for personal injuries received on account of the negligence of the state officers at the state fair, a state institution created by the legislature for the purpose of improving agricultural and kindred industries; to disseminate information calculated to educate and benefit the industrial classes; and to advance to educate and benefit the industrial classes; and to advance by such means the material interests of the state, being objects similar to those sought by the public school system. In passing upon the question of the state's liability for the negligent acts of its officers or agents, the court said: "No claim arises against any government in favor of an individual, by reason of the misfeasance, laces, or unauthorized exercise of powers by its officers or agents." (Citing Gibbons vs. U.S., 8 Wall., 269; Clodfelter vs. State, 86 N.C., 51, 53; 41 Am. Rep., 440; Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Green vs. State, 73 Cal., 29; Bourn vs. Hart, 93 Cal., 321; 27 Am. St. Rep., 203; Story on Agency, sec. 319.) As to the scope of legislative enactments permitting individuals to sue the state where the cause of action arises out of either tort or contract, the rule is stated in 36 Cyc., 915, thus: "By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its liability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause not previously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself to the jurisdiction of the court, subject to its right to interpose any lawful defense." In Apfelbacher vs. State (152 N. W., 144, advanced sheets), decided April 16, 1915, the Act of 1913, which authorized the bringing of this suit, read: "SECTION 1.Authority is hereby given to George Apfelbacher, of the town of Summit, Waukesha County, Wisconsin, to bring suit in such court or courts and in such form or forms as he may be advised for the purpose of settling and determining all controversies which he may now have with the State of Wisconsin, or its duly authorizes officers and agents, relative to the mill property of said George Apfelbacher, the fish hatchery of the State Wisconsin on the Bark River, and the mill property of Evan Humphrey at the lower end of Nagawicka Lake, and relative to the use of the waters of said Bark River and Nagawicka Lake, all in the county of Waukesha, Wisconsin." In determining the scope of this act, the court said; "Plaintiff claims that by the enactment of this law the legislature admitted liability on the part of the state for the acts of its officers, and that the suit now stands just as it would stand between private parties. It is difficult to see how the act does, or was intended to do, more than remove the state's immunity from suit. It simply gives authority commence suit for the purpose of settling plaintiff's controversies with the state. Nowhere in the act is there a whisper or suggestion that the court or courts in the disposition of the suit shall depart from well established principles of law, or that the amount of damages is the only question to be settled. The act opened the door of the court to the plaintiff. It did not pass upon the question of liability, but left the suit just where it would be in the absence of the state's immunity from suit. If the Legislature had intended to change the rule that obtained in this state so long and to declare liability on the part of the state, it would not have left so important a matter to mere inference but would have done so in express terms. (Murdoc Grate Co. vs. Commonwealth, 152 Mass., 28; 24 N. E., 854; 8 L. R.A., 399)" In Denning vs. state (123 Cal., 316), the provisions of the Act of 1893, relied upon and considered, are as follows: "All persons who have, or shall hereafter have claims on contract or for negligence against the state not allowed by the state board of examiners, are hereby authorized, on the terms and conditions herein contained, to bring suit thereon against the state in any of the courts of this state of competent jurisdiction, and prosecute the same to final judgment. The rules of practice in civil cases shall apply to such suits, except as herein otherwise provided." And the court said: "This statute has been considered by this court in at least two cases, arising under different facts, and in both it was held that said statute did not create any liability or cause of action against the state where none existed before, but merely gave an additional remedy to enforce such liability as would have existed if the statute had not been enacted. (Chapman vs. State, 104 Cal., 690; 43 Am. St. Rep., 158; Melvin vs. State, 121 Cal., 16.)" A statute of Massachusetts enacted in 1887 gave to the superior court "jurisdiction of all claims against the commonwealth, whether at law or in equity," with an exception not necessary to be here mentioned. In construing this statute the court, in Murdock Grate Co. vs. Commonwealth (152 Mass., 28), said: "The statute we are discussing discloses no intention to create against the state a new and heretofore unrecognized class of liabilities, but only an intention to provide a judicial tribunal where well recognized existing liabilities can be adjudicated." In Sipple vs. State (99 N. Y., 284), where the board of the canal claims had, by the terms of the statute of New York, jurisdiction of claims for damages for injuries in the management of the canals such as the plaintiff had sustained, Chief Justice Ruger remarks; "It must be conceded that the state can be made liable for injuries arising from the negligence of its agents or servants, only by force of some positive statute assuming such liability." It being quite clear that Act No. 2457 does not operate to extend the Government's liability to any cause not previously recognized, we will now examine the substantive law touching the defendant's liability for the negligent acts of its officers, agents, and employees. Paragraph 5 of article 1903 of the civil Code reads: "The state is liable in this sense when it acts through a special agent, but not when the damage should have been caused by the official to whom properly it pertained to do the act performed, in which case the provisions of the preceding article shall be applicable." The supreme court of Spain in defining the scope of this paragraph said: "That the obligation to indemnify for damages which a third person causes another by his fault or negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on that the person obligated, by his own fault or negligence, takes part in the act or omission of the third party who caused the damage. It follows therefrom that the state by virtue of such provision of law, is not responsible for the damages suffered by private individuals in consequence of acts performed by its employees in the discharge of the functions pertaining to their

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office, because neither fault nor even negligence can be presumed on the part of the state in the organization of branches of the public service and in the appointment of its agents; on the contrary, we must presuppose all foresight humanly possible on its part in order that each branch of service serves the general weal and that of private persons interested in its operation. Between these latter and the state therefore, no relations of a private nature governed by the civil law can arise except in a case where the state acts as a judicial person capable of acquiring rights and contracting obligations." (Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.) "That the Civil Code in chapter 2, title 16, book 4, regulates the obligations which arise out of fault or negligence; and whereas in the first articles thereof, No. 1902, where the general principle is laid down that where a person who by an act or omission causes damage to another through fault or negligence, shall be obliged to repair the damage so done, reference is made to acts or omissions of the persons who directly or indirectly cause the damage, the following article refers to third persons and imposes an identical obligation upon those who maintain fixed relations of authority and superiority over the authors of the damage, because the law presumes that in consequence of such relations the evil caused by their own fault or negligence is imputable to them. This legal presumption gives way to proof, however, because, as held in the last paragraph of article 1903, responsibility for acts of third persons ceases when the persons mentioned in said article prove that they employed all the diligence of a good father of a family to avoid the damage, and among these persons, called up[on to answer in a direct and not a subsidiary manner, are found, in addition to the mother or the father in a proper case, guardians and owners or director of an establishment or enterprise, the state, but not always, except when it acts through the agency of a special agent, doubtless because and only in this case, the fault or negligence, which is the original basis of this kind of objections, must be presumed to lie with the state.

"That although in some cases the state might by virtue of the general principle set forth in article 1902 respond for all the damage that is occasioned to private parties by orders or resolutions which by fault or negligence are made by branches of the central administration acting in the name and representation of the state itself and as an external expression of its sovereignty in the exercise of its executive powers, yet said article is not applicable in the case of damages said to have been occasioned to the petitioners by an executive official, acting in the exercise of his powers, in proceedings to enforce the collections of certain property taxes owing by the owner of the property which they hold in sublease. "That the responsibility of the state is limited by article 1903 to the case wherein it acts through a special agent (and a special agent, in the sense in which these words are employed, is one who receives a definite and fixed order or commission, foreign to the exercise of the duties of his office if he is a special official) so that in representation of the state and being bound to act as an agent thereof he executed the trust confided to him. this concept does not apply to any executive agent who is an employee of the active administration and who in his own responsibility performs the functions which are inherent in and naturally pertain to his office and which are regulated by law and the regulations." (Supreme Court of Spain, May 18, 1904; 98 Jur. Civ., 389, 390.) "That according to paragraph 5 of article 1903 of the Civil Code and the principle laid down in a decision, among others, of the 18th of May, 1904, in a damage case, the responsibility of the state is limited to that which it contracts through a special agent, duly empowered by a definite order or commission to perform some act or charged with some definite purpose which gives rise to the claim, and not where the claim is based on acts or omissions imputable to a public official charge with some administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil responsibility. Consequently, the trial court in not so deciding and in sentencing the said entity to the payment of damages, caused by an official of the second class referred to, has by erroneous interpretation infringed the provisions of articles 1902 and 1903 of the Civil Code." (Supreme Court of Spain, July 30, 1911; 122 Jur. Civ., 146) It is, therefore, evident that the State (the Government of the Philippine Islands) is only liable, according to the above quoted decisions of the Supreme Court of Spain, for the acts of its agents, officers and employees when they act as special agents within the meaning of paragraph 5 of article 1903, supra, and that the chauffeur of the ambulance of the General Hospital was not such an agent. For the foregoing reasons, the judgment appealed from must be reversed, without costs in this instance. Whether the Government intends to make itself legally liable for the amount of damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, by legislative enactment and by appropriating sufficient funds therefor, we are not called upon to determine. This matter rests solely with the Legislature and not with the courts. Arellano, C.J., Torres, Johnson and Moreland, JJ., concur.

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FIRST DIVISION [G.R. No. L-10134. June 29, 1957.] SABINA EXCONDE, plaintiff-appellant, vs. DELFIN CAPUNO and DANTE CAPUNO, defendants-appellees.

Magno T. Bueser for appellant. Alvero Law Offices & Edon B. Brion and Vencedor A. Alimario for appellees.

SYLLABUS 1.CIVIL LIABILITY OF PARENTS FOR DAMAGES CAUSED BY THEIR MINOR CHILDREN; RELIEF FROM LIABILITY. The civil liability which the law imposes upon the father, and, in case of his death or incapacity, the mother, for any damages that may be caused by the minor children who live with them is a necessary consequence of the parental authority they exercise over them which imposes upon the parents the "duty of supporting them, keeping them in their company, educating them and instructing them in proportion to their means", while, on the other hand, gives them the "right to correct and punish them in moderation" (Articles 154 and 155, Spanish Civil Code). The only way by which they can relieve themselves of such liability is if they prove that they exercised all the diligence of a good father of a family to prevent the damage (Article 1903, last paragraph, Spanish Civil Code). 2.ID.; LIABILITY OF TEACHERS OR DIRECTOR; INSTITUTIONS AFFECTED. The civil liability imposed by Article 1903 of the old Civil Code on teachers or directors of arts and trades for damages caused by pupils or apprentices under their custody, only applies to an institution of arts and trades and not to any academic educational institution.

DECISION

BAUTISTA ANGELO, J p: Dante Capuno, son of Delfin Capuno, was accused of double homicide through reckless imprudence for the death of Isidoro Caperia and Amado Ticzon on March 31, 1949 in the Court of First Instance of Laguna (Criminal Case No. 15001). During the trial, Sabina Exconde, as mother of the deceased Isidoro Caperia, reserved her right to bring a separate civil action for damages against the accused. After trial, Dante Capuno was found guilty of the crime charged and, on appeal, the Court of Appeals affirmed the decision. Dante Capuno was only fifteen (15) years old when he committed the crime. In line with her reservation, Sabina Exconde filed the present action against Delfin Capuno and his son Dante Capuno asking for damages in the aggregate amount of P2,959.00 for the death of her son Isidoro Caperia. Defendants set up the defense that if any one should be held liable for the death of Isidoro Caperia, he is Dante Capuno and not his father Delfin because at the time of the accident, the former was not under the control, supervision and custody of the latter. This defense was sustained by the lower court and, as a consequence, it only convicted Dante Capuno to pay the damages claimed in the complaint. From this decision, plaintiff appealed to the Court of Appeals but the case was certified to us on the ground that the appeal only involves questions of law. It appears that Dante Capuno was a member of the Boy Scouts Organization and a student of the Balintawak Elementary School situated in a barrio in the City of San Pablo and on March 31, 1949 he attended a parade in honor of Dr. Jose Rizal in said city upon instruction of the city school's supervisor. From the school Dante, with other students, boarded a jeep and when the same started to run, he took hold of the wheel and drove it while the driver sat on his left side. They have not gone far when the jeep turned turtle and two of its passengers, Amado Ticzon and Isidoro Caperia, died as a consequence. It further appears that Delfin Capuno, father of Dante, was not with his son at the time of the accident, nor did he know that his son was going to attend a parade. He only came to know it when his son told him after the accident that he attended the parade upon instruction of his teacher. The only issue involved in this appeal is whether defendant Delfin Capuno can be held civilly liable, jointly and severally with his son Dante, for damages resulting from the death of Isidoro Caperia caused by the negligent act of minor Dante Capuno. The case comes under Article 1903 of the Spanish Civil Code, paragraph 1 and 5, which provides: "ART. 1903.The obligation imposed by the next preceding articles is enforceable not only for personal acts and omissions, but also for those of persons for whom another is responsible. The father, and, in case of his death or incapacity, the mother, are liable for any damages caused by the minor children who live with them. xxx xxx xxx Finally, teachers or directors of arts and trades are liable for any damages caused by their pupils or apprentices while they are under their custody." Plaintiff contends that defendant Delfin Capuno is liable for the damages in question jointly and severally with his son Dante because at the time the latter committed the negligent act which resulted in the death of the victim, he was a minor and was then living with his father, and inasmuch as these facts are not disputed, the civil liability of the father is evident. And so, plaintiff contends, the lower court erred in relieving the father from liability.

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We find merit in this claim. It is true that under the law above quoted, "teachers or directors of arts and trades are liable for any damages caused by their pupils or apprentices while they are under their custody", but this provision only applies to an institution of arts and trades and not to any academic educational institution (Padilla, Civil Law, 1953, Ed., Vol. IV, p. 841; See 12 Manresa, 4th Ed., p. 557). Here Dante Capuno was then a student of the Balintawak Elementary School and as part of his extracurricular activity, he attended the parade in honor of Dr. Jose Rizal upon instruction of the city school's supervisor. And it was in connection with that parade that Dante boarded a jeep with some companions and while driving it, the accident occurred. In the circumstances, it is clear that neither the head of that school, nor the city school's supervisor, could be held liable for the negligent act of Dante because he was not then a student of an institution of arts and trades as provided for by law. The civil liability which the law impose upon the father, and, in case of his death or incapacity, the mother, for any damages that may be caused by the minor children who live with them, is obvious. This is a necessary consequence of the parental authority they exercise over them which imposes upon the parents the "duty of supporting them, keeping them in their company, educating them and instructing them in proportion to their means", while, on the other hand, gives them the "right to correct and punish them in moderation" (Articles 154 and 155, Spanish Civil Code). The only way by which they can relieve themselves of this liability is if they prove that they exercised all the diligence of a good father of a family to prevent the damage (Article 1903, last paragraph, Spanish Civil Code). This defendants failed to prove. Wherefore, the decision appealed from is modified in the sense that defendants Delfin Capuno and Dante Capuno shall pay to plaintiff, jointly and severally, the sum of P2,959.00 as damages, and the costs of action. Bengzon, Montemayor, Labrador and Endencia, JJ., concur. Paras, C.J., concurs in the result.

Separate Opinions REYES, J.B.L., J., dissenting: After mature consideration I believe we should affirm the judgment relieving the father of liability. I can see no sound reason for limiting Art. 1903 of the old Civil Code to teachers of arts and trades and not to academic ones. What substantial difference is there between them in so far as concerns the proper supervision and vigilance over their pupils? It cannot be seriously contended that an academic teacher is exempt from the duty of watching that his pupils do not commit a tort to the detriment of third persons, so long as they are in a position to exercise authority and supervision over the pupil. In my opinion, in the phrase "teachers or heads of establishments of arts and trades" used in Art. 1903 of the old Civil Code, the words "arts and trades" does not qualify "teachers" but only "heads of establishments". The phrase is only an updated version of the equivalent terms "preceptores y artesanos" used in the Italian and French Civil Codes. If, as conceded by all commentators, the basis of the presumption of negligence of Art. 1903 in some culpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of their authority, it would seem clear that where the parent places the child under the effective authority of the teacher, the latter, and not the parent, should be the one answerable for the torts committed while under his custody, for the very reason that the parent is not supposed to interfere with the discipline of the school nor with the authority and supervision of the teacher while the child is under instruction. And if there is no authority, there can be no responsibility. In the case before us, there is no question that the pupil, Dante Capuno, was instructed by the City School Supervisor to attend the Rizal parade. His father could not properly refuse to allow the child to attend, in defiance of the school authorities. The father had every reason to assume that in ordering a minor to attend a parade with other children, the school authorities would provide adequate supervision over them. If a teacher or scout master was present, then he should be the one responsible for allowing the minor to drive the jeep without being qualified to do so. On the other hand, if no teacher or master was at hand to watch over the pupils, the school authorities are the ones answerable for that negligence, and not the father. At any rate, I submit that the father should not be held liable for a tort that he was in no way able to prevent, and which he had every right to assume the school authorities would avoid. Having proved that he entrusted his child to the custody of school authorities that were competent to exercise vigilance over him, the father has rebutted the presumption of Art. 1903 and the burden of proof shifted to the claimant to show actual negligence on the part of the parent in order to render him liable. Padilla and Reyes, A., JJ., concur.

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EN BANC [G.R. No. L-29025. October 4, 1971.] Spouses MOISES P. PALISOC and BRIGIDA P. PALISOC, plaintiffs-appellants, vs. ANTONIO C, BRILLANTES and TEODOSIO V. VALENTON, owner and President, respectively, of a school of arts and trades, known under the name and style of "Manila Technical Institute" (M.I.T.), VIRGILIO L. DAFFON and SANTIAGO M. QUIBULUE, defendants-appellees.

Leovollo C . Agustin for plaintiffs-appellants. Honorato S. Reyes for appellee Brillantes, et al., Villareal, Almacen, Navarra, and Amares for appellee Daffon.

SYLLABUS 1.CIVIL LAW; QUASI-DELICT; LIABILITY OF SCHOOL HEADS AND TEACHERS FOR TORTIOUS ACTS OF STUDENTS; RATIONALE. The rationale of such liability of school heads and teachers for the tortious acts of their pupils and students, so long as they remain in their custody, is that they stand, to a certain extent, as to their pupils and students, in loco parentis and are called upon to "exercise reasonable supervision over the conduct of the child" This is expressly provided for in Articles 349, 350 and 352 of the Civil Code. In the law of torts, the governing principle is that the protective custody of the school heads and teachers is mandatorily substituted for that of the parents, and hence, it becomes their obligation as well as that of the school itself to provide proper supervision of the students' activities during the whole time that they are at attendance in the school, including recess time, as well as to take the necessary precautions to protect the students in their custody from dangers and hazards that would reasonably be anticipated, including injuries that some students themselves may inflict willfully or through negligence on their fellow students. 2.ID.; ID.; ID.; PRESUMPTION OF NEGLIGENCE; BASIS. The basis of the presumption of negligence of Art. 1903 (now 2180)is some culpa in vigilando that the parents, teachers, etc., are supposed to have incurred in the exercise of their authority and where the parent places the child under the effective authority of the teacher, the latter, and not the parent, should be the one answerable for the torts committed while under his custody, for the reason that the parent is not supposed to interfere with the discipline of the school nor with the authority and supervision of the teacher while the child is under instruction. The school itself, likewise, has to respond for the fault or negligence of its school head and teachers under the same cited article. 3.ID.; ID.; ID.; PHRASE "SO LONG AS STUDENTS REMAIN IN THEIR CUSTODY," CONSTRUED. The lower court therefore erred in law in absolving defendants-school officials on the ground that they could be held liable under Article 2180, Civil Code, only if the student who inflicted the fatal fistblows on his classmate and victim "lived and boarded with his teacher or the other defendants officials of the school." As stated above, the phrase used in the cited article "so long as (the students) remain in their custody" means the protective and supervisory custody that the school and its head and teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess time. There is nothing in the law that requires that for such liability to attach, the pupil or student who commits the tortious act must live an board in the school, as erroneously held by the lower court, and the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed to have been set aside by the present decision. 4.ID.; ID.; ID.; OBSERVANCE OF DILIGENCE OF A GOOD FATHER OF A FAMILY, VALID DEFENSE. The unfortunate death resulting from the fight between the protagonists-students could have been avoided, had said defendants but complied with their duty of providing adequate supervision over the activities of the students in the school premises to protect their students from harm, whether at the hands of fellow students or other parties. At any rate, the law holds them liable unless they relieve themselves of such liability, in compliance with the last paragraph of Article 2180, Civil Code, by "( proving) that they observed all the diligence of a good father of a family to prevent damage." In the light of the factual findings of the lower court's decision said defendants failed to prove such exemption from liability. 5.ID.; DAMAGES, COMPENSATORY DAMAGES FOR DEATH CAUSED BY CRIME OR QUASI DELICT, P12,000.00 AS SET BY PEOPLE VS. PANTOJA. Plaintiffs-appellees' contention that the award of P6,000.00 as indemnity for the death of their son should be increased to P12,000.00 as set by the Court in People vs. Pantoja (25 SCRA 468), and observed in all death indemnity cases thereafter is well taken. The Court, in Pantoja, after noting the decline in the purchasing power of the Philippine peso, had expressed its "considered opinion that the amount of award of compensatory damages for death caused by a crime or quasi-delict should now be P12,000.00." The Court thereby adjusted the minimum amount of "compensatory damages for death caused by a crime or quasi-delict" as per Article 2206, Civil Code, from the old stated minimum of P3,000.00 to P12,000.00, which amount is to be awarded "even though there may have been mitigating circumstances" pursuant to the express provisions of said codal article. 6.ID.; ID.; EXEMPLARY DAMAGES; NOT GRANTED IN ABSENCE OF GROSS NEGLIGENCE. Decisive here is the touchstone provision of Article 2231, Civil Code, that "In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence." No gross negligence on the part of defendants was found by the trial court to warrant the imposition of exemplary damages, as well as of interest and increased attorney's fees, and the Court has not been shown in this appeal any compelling reason to disturb such finding. REYES, J.B.L., J., concurring: CIVIL LAW; QUASI-DELICT; CUSTODIAL SUPERVISION OF SCHOOLS OVER PUPILS; AUTHORITY EXISTS REGARDLESS OF STUDENT'S AGE. While in the case of parents and guardians, their authority and supervision over the children and wards end by law upon the latter reaching majority age, the authority and custodial supervision over pupils exist regardless of the age of the latter. A student over twenty-one, by enrolling and attending a school, places himself under the custodial supervision and disciplinary authority of the school authorities, which is the basis of the latter's correlative responsibility for his torts, committed while under such authority. Of

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course, the teachers' control is not a plenary as when the student is a minor; but that circumstance can only affect the degree of the responsibility but cannot negate the existence thereof. It is only a factor to be appreciated in determining whether or not the defendant has exercised due diligence in endeavoring to prevent the injury, as prescribed in the last paragraph of Article 2180. MAKALINTAL, J., dissenting: 1.CIVIL LAW; QUASI-DELICT; TEACHERS ARE LIABLE FOR TORTIOUS ACTS OF STUDENTS LIVING AND BOARDING WITH THEM. I see no reason to depart from the doctrine laid down by this Court in Mercado vs. Court of Appeals, 108 Phil. 414, where the clause, "so long as they remain in their custody" used in Article 2180 of the Civil Code was construed as referring to a " situation where the pupil lives and boards with the teacher, such that the (latter's) control, direction and influence on the pupil supersedes those of the parents." I think it is highly unrealistic and conducive to unjust results, considering the size of the enrollment in many of our educational institutions, academic and non-academic, as well as the temper, attitudes and often destructive activism of the students, to hold their teachers and/or the administrative heads of the schools directly liable for torts committed by them. 2.ID.; ID.; TORTIOUS ACTS OF CHILDREN; PARENTS LIABLE THEREFOR ONLY AS TO MINORS LIVING IN THEIR COMPANY. For parental responsibility to arise the children must be minors who live in their company. If, as stated also in the opinion of the majority, "the rationale of (the) liability of school heads and teachers for the tortious acts of their pupils and students, so long as they remain in their custody, is that they stand, to a certain extent, as to their pupils and students, in loco parentis and are called upon to exercise reasonable supervision over the conduct of the child," then it stands to reason that (1) the clause "so long as they remain in their custody" as used in reference to teachers and school heads should be equated with the phrase "who live in their company" as used in reference to parents; and (2) that just as parents are not responsible for damages caused by their children who are no longer minors, so should teachers and school heads be exempt from liability for the tortious acts of their students in the same age category. I find no justification, either in the law itself or in justice and equity, to make a substitute parent liable where the real parent would be free from liability.

DECISION

TEEHANKEE, J p: An appeal in forma pauperis on pure questions of law from a decision of the Court of First Instance of Manila. Plaintiffs-appellants as parents of their sixteen-year old son, Dominador Palisoc, and a student in automotive mechanics at the Manila Technical Institute, Quezon Boulevard, Manila, had filed on May 19, 1966, the action below for damages arising from the death on March 10, 1966 of their son at the hands of a fellow student, defendant Virgilio L. Daffon, at the laboratory room of the said Institute. Defendants, per the trial court's decisions are: "(T)he defendant Antonio C. Brillantes, at the time when the incident which gave rise to his action occurred was a member of the Board of Directors of the institute; 1 the defendant Teodosio Valenton, the president thereof; the defendant Santiago M. Quibulue, instructor of the class to which the deceased belonged; and the defendant Virgilio L. Daffon, a fellow student of the deceased. At the beginning the Manila Technical Institute was a single proprietorship, but lately on August 2, 1962, it was duly incorporated."

The facts that led to the tragic death of plaintiffs' son were thus narrated by the trial court: "(T)he deceased Dominador Palisoc and the defendant Virgilio L. Daffon were classmates, and on the afternoon of March 10, 1966, between two and three o'clock, they, together with another classmate Desiderio Cruz were in the laboratory room located on the ground floor. At that time the classes were in recess. Desiderio Cruz and Virgilio L. Daffon were working on a machine while Dominador Palisoc was merely looking on at them. Daffon made a remark to the effect that Palisoc was acting like a foreman. Because of this remark Palisoc slapped slightly Daffon on the face. Daffon, in retaliation, gave Palisoc a strong flat blow on the face, which was followed by other fist blows on the stomach. Palisoc retreated apparently to avoid the fist blows, but Daffon followed him and both exchanged blows until Palisoc stumbled on an engine block which caused him to fall face downward. Palisoc became pale and fainted. First aid was administered to him but he was not revived, so he was immediately taken to a hospital. He never regained consciousness; finally he died. The foregoing is the substance of the testimony of Desiderio Cruz, the lone witness to the incident." The trial court expressly gave credence to this version of the incident, as testified to by the lone eyewitness, Desiderio Cruz, a classmate of the protagonists, as that of a disinterested witness who "has no motive or reason to testify one way or another in favor of any party" and rejected the self-exculpatory version of defendant Daffon denying that he had inflicted any fist blows on the deceased. With the postmortem findings of Dr. Angelo Singian of the Manila Police Department who performed the autopsy re "Cause of death: shock due to traumatic fracture of the ribs (6th and 7th, left, contusion of the pancreas and stomach with intra-gastric hemorrhage and slight subarachnoid hemorrhage on the brain," and his testimony that these internal injuries of the deceased were caused "probably by strong fist blows," 2 the trial court found defendant Daffon liable for the quasi delict under Article 2176 of the Civil Code. 3 It held that "(T)he act, therefore, of the accused Daffon in giving the deceased strong fistblows in the stomach which ruptured his internal organs and caused his death falls within the purview of this article of the Code." 4 The trial court, however, absolved from liability the three other defendants-officials of the Manila Technical Institute, in this wise: ". . . Their liabilities are based on the provisions of Article 2180 of the New Civil Code which reads: 'Art. 2180. . . .

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'Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students and apprentices, so long as they remain in their custody.' "In the opinion of the Court, this article of the Code is not applicable to the case at bar, since this contemplates the situation where the control or influence of the teachers and heads of school establishments over the conduct and actions by the pupil supersedes those of the parents. 'CIVIL LAW: DAMAGES ART 2180. NEW CIVIL CODE CONSTRUED: The clause 'so long as they remain in their custody' contained in Article 2180 of the new civil code contemplated a situation where the pupil lives and boards with the teacher, such that the control or influence on the pupil supersedes those of the parents. In those circumstances the control or influence over the conduct and actions of the pupil as well as the responsibilities for their sort would pass from the father and mother to the teachers. (Ciriaco L. Mercado, Petitioner, vs. the Court of Appeals, Manuel Quisumbing, Jr., et al., respondents, G.R. No. L-14862, May 30, 1960).' 5 "There is no evidence that the accused Daffon lived and boarded with his teacher or the other defendant officials of the school. These defendants cannot therefore be made responsible for the tort of the defendant Daffon." Judgment was therefore rendered by the trial court as follows: "1.Sentencing the defendant Virgilio L. Daffon to pay the plaintiffs as heirs of the deceased Dominador Palisoc (a) P6,000.00 for the death of Dominador Palisoc; (b) P3,375.00 for actual and compensatory expenses; (c) P5,000.00 for moral damages; (d) P10,000.00 for loss of earning power, considering that the deceased was only between sixteen and seventeen years, and in good health when he died, and (e) P2,000.00 for attorney's fee, plus the costs of this action. "2.Absolving the other defendants. "3.Dismissing the defendants' counterclaim for lack of merit." Plaintiffs' appeal raises the principal legal question that under the factual findings of the trial court, which are now beyond review, the trial court erred in absolving the defendants-school officials instead of holding them jointly and severally liable as tortfeasors, with defendant Daffon, for the damages awarded them as a result of their son's death. The Court finds the appeal, in the main, to be meritorious. 1.The lower court absolved defendants-school officials on the ground that the provisions of Article 2180, Civil Code, which expressly hold "teachers or heads of establishments of arts and trades . . . liable for damages caused by their pupils and students and apprentices, so long as they remain in their custody," are not applicable to the case at bar, since "there is no evidence that the accused Daffon [who inflicted the fatal fistblows] 6 lived and boarded with his teacher or the other defendants-officials of the school. These defendants cannot therefore be made responsible for the tort of the defendant Daffon." The lower court based its legal conclusion expressly on the Court's dictum in Mercado vs. Court of Appeals, 7 that " (I) t would seem that the clause 'so long as they remain in their custody,' contemplates a situation where the pupil lives and boards with the teacher, such that the control, direction and influence on the pupil supersedes those of the parents. In these circumstances the control or influence over the conduct and actions of the pupil would pass from the father and mother to the teacher; and so would the responsibility for the torts of the pupil. Such a situation does not appear in the case at bar; the pupils appear to go to school during school hours and go back to their homes with their parents after school is over." This dictum had been made in rejecting therein petitioner-father's contention that his minor son's school, Lourdes Catholic School at Kanlaon, Quezon City [which was not a party to the case] should be held responsible, rather than him as father, for the moral damages of P2,000.00 adjudged against him for the physical injury inflicted by his son on a classmate. [A cut on the right cheek with a piece of razor which cost only P50.00 by way of medical expenses to treat and cure, since the wound left no scar.] The moral damages award was after all set aside by the Court on the ground that none of the specific cases provided in Article 2219, Civil Code, for awarding moral damages had been established, petitioner's son being only nine years old and not having been shown to have "acted with discernment" in inflicting the injuries on his classmate. The dictum in Mercado was based in turn on another dictum in the earlier case of Exconde vs. Capuno, 8 where the only issue involved as expressly stated in the decision, was whether the therein defendant-father could be held civilly liable for damages resulting from a death caused in a motor vehicle accident driven unauthorizedly and negligently by his minor son, (which issue was resolved adversely against the father). Nevertheless, the dictum in such earlier case that "It is true that under the law above-quoted, 'teachers or directors of arts and trades are liable for any damage caused by their pupils or apprentices while they are under their custody, but this provision only all applies to an institution of arts and trades and not to any academic educational institution" was expressly cited and quoted in Mercado. 2.The case at bar was instituted directly against the school officials and squarely raises the issue of liability of teachers and heads of schools under Article 2180, Civil Code, for damages caused by their pupils and students against fellow students on the school premises. Here, the parents of the student at fault, defendant Daffon, are not involved, since Daffon was already of age at the time of the tragic incident. There is no question, either, that the school involved is a non-academic school, 9 the Manila Technical Institute being admittedly a technical vocational and industrial school. The Court holds that under the cited codal article, defendants head and teacher of the Manila Technical Institute (defendants Valenton and Quibulue, respectively) are liable jointly and severally for damages to plaintiffs-parents for the death of the latter's minor son at the hands of defendant Daffon at the school's laboratory room. No liability attaches to defendant Brillantes as a mere member of the school's board of directors. The school itself cannot be held similarly liable, since it has not been properly impleaded as party defendant. While plaintiffs sought to so implead it, by impleading improperly defendant Brillantes, its former single proprietor, the lower court found that it had been incorporated since August 2, 1962, and therefore the school itself, as thus incorporated, should have been brought in as party defendant. Plaintiffs failed to do so, notwithstanding that Brillantes and his co-defendants in their reply to plaintiffs'

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request for admission had expressly manifested and made of record that "defendant Antonio C. Brillantes is not the registered owner/head of the 'Manila Technical Institute' which is now a corporation and is not owned by any individual person." 10 3.The rationale of such liability of school heads and teachers for the tortious acts of their pupils and students, so long as they remain in their custody, is that they stand, to a certain extent, as to their pupils and students, in loco parentis and are called upon to "exercise reasonable supervision over the conduct of the child." 11 This is expressly provided for in Articles 349, 350 and 352 of the Civil Code. 12 In the law of torts, the governing principle is that the protective custody of the school heads and teachers is mandatorily substituted for that of the parents, and hence, it becomes their obligation as well as that of the school itself to provide proper supervision of the students' activities during the whole time that they are at attendance in the school, including recess time, as well as to take the necessary precautions to protect the students in their custody from dangers and hazards that would reasonably be anticipated, including injuries that some student themselves may inflict willfully or through negligence on their fellow students.

4.As tersely summarized by Mr. Justice J.B.L. Reyes in his dissenting opinion in Exconde, "the basis of the presumption of negligence of Art. 1903 [now 2180] is some culpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of their authority" 13 and "where the parent places the child under the effective authority of the teacher, the latter, and not the parent, should be the one answerable for the torts committed while under his custody, for the very reason that the parent is not supposed to interfere with the discipline of the school nor with the authority and supervision of the teacher while the child is under instruction " The school itself, likewise, has to respond for the fault or negligence of its school head and teachers under the same cited article. 14 5.The lower court therefore erred in law in absolving defendants-school officials on the ground that they could be held liable under Article 2180, Civil Code, only if the student who inflicted the fatal fistblows on his classmate and victim "lived and boarded with his teacher or the other defendants officials of the school." As stated above, the phrase used in the cited article "so long as (the students) remain in their custody" means the protective and supervisory custody that the school and its heads and teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess time. There is nothing in the law that requires that for such liability to attach, the pupil or student who commits the tortious act must live and board in the school, as erroneously held by the lower court, and the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed to have been set aside by the present decision. 6.Defendants Valenton and Quibulue as president and teacher-in-charge of the school must therefore be held jointly and severally liable for the quasi-delict of their co-defendant Daffon in the latter's having caused the death of his classmate, the deceased Dominador Palisoc. The unfortunate death resulting from the fight between the protagonists-students could have been avoided, had said defendants but complied with their duty of providing adequate supervision over the activities of the students in the school premises to protect their students from harm, whether at the hands of fellow students or other parties. At any rate, the law holds them liable unless they relieve themselves of such liability, in compliance with the last paragraph of Article 2180, Civil Code, by "( proving) that they observed all the diligence of a good father of a family to prevent damage." In the light of the factual findings of the lower court's decision, said defendants failed to prove such exemption from liability. 7.Plaintiffs-appellees' contention that the award of P6,000.00 as indemnity for the death of their son should be increased to P12,000.00 as set by the Court in People vs. Pantoja, 15 and observed in all death indemnity cases thereafter is well taken. The Court, in Pantoja, after noting the decline in the purchasing power of the Philippine peso, had expressed its "considered opinion that the amount of award of compensatory damages for death caused by a crime or quasi-delict should now be P12,000.00." The Court thereby adjusted the minimum amount of "compensatory damages for death caused by a crime or quasi-delict" as per Article 2206, Civil Code, from the old stated minimum of P3,000.00 to P12,000.00, which amount is to be awarded "even though there may have been mitigating circumstances" pursuant to the express provisions of said codal article. 8.Plaintiffs-appellees' other claims on appeal that the lower court should have awarded exemplary damages and imposed legal interest on the total damages awarded, besides increasing the award of attorney's fees all concern matters that are left by law to the discretion of the trial court and the Court has not been shown any error or abuse in the exercise of such discretion on the part of the trial court 16 Decisive here is the touchstone provision of Article 2231, Civil Code, that "In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence." No gross negligence on the part of defendants was found by the trial court to warrant the imposition of exemplary damages, as well as of interest and increased attorney's fees, and the Court has not been shown in this appeal any compelling reason to disturb such finding. ACCORDINGLY, the judgment appealed from is modified so as to provide as follows: 1.Sentencing the defendants Virgilio L. Daffon, Teodosio V. Valenton and Santiago M. Quibulue jointly and severally to pay plaintiffs as heirs of the deceased Dominador Palisoc (a) P12,000.00 for the death of Dominador Palisoc; (b) P3,375.00 for actual and compensatory expenses; (c) P5,000.00 for moral damages; (d) P10,000.00 for less of earning power and (e) P2,000 00 for attorney's fee, plus the costs of this action in both instances; 2. absolvingdefendant Antonio C. Brillantes from the complaint; and 3. dismissing defendants' counterclaims. Concepcion, C .J ., Villamor and Makasiar, JJ ., concur. Dizon, J ., took no part.

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EN BANC [G.R. No. L-47745. April 15, 1988.] JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORA JR., NORMA A. YLAYA, PANTALEON A. AMADORA, JOSE A. AMADORA III, LUCY A. AMADORA, ROSALINDA A. AMADORA, PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A. AMADORA and MARIA TISCALINA A. AMADORA, petitioners, vs. HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR LLUCH, SERGIO P. DAMASO, JR., CELESTINO DICON, ANIANO, ABELLANA, PABLITO DAFFON, thru his parents and natural guardians, MR. and MRS. NICANOR GUMBAN, and ROLANDO VALENCIA, thru his guardian, ATTY. FRANCISCO ALONSO, respondents.

Jose S. Amadora & Associates for petitioners. Padilla Law Office for respondents.

SYLLABUS 1.CIVIL LAW; OBLIGATIONS AND CONTRACTS; QUASI-DELICT; LIABILITY OF TEACHERS AND HEADS OF ESTABLISHMENTS; APPLIES TO ALL SCHOOLS, WHETHER ACADEMIC OR NOT; RATIONALE. The provision in Article 2180 of the Civil Code should apply to all schools, academic as well as non-academic. Where the school is academic rather than technical or vocational in nature, responsibility for the tort committed by the student will attach to the teacher in charge of such student, following the first part of the provision. This is the general rule. In other words, teachers in general shall be liable for the acts of their students except where the school is technical in nature, in which case it is the head thereof who shall be answerable. There is really no substantial distinction between the academic and the non-academic schools insofar as torts committed by their students are concerned. The same vigilance is expected from the teacher over the students under his control and supervision, whatever the nature of the school where he is teaching. 2.STATUTORY CONSTRUCTION AND INTERPRETATION; REDDENDO SINGULA SINGULIS; APPLIED IN ARTICLE 2180 OF THE CIVIL CODE. Article 2180 of the Civil Code provides: "Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices so long as they remain in their custody." Following the canon of reddendo singula singulis, "teachers should apply to the words "pupils and student's and "heads of establishments of arts and trades" to the word "apprentices." 3.CIVIL LAW; OBLIGATIONS AND CONTRACTS; QUASI-DELICT; LIABILITY OF TEACHERS AND HEADS OF ESTABLISHMENTS CO-EXTENSIVE WITH THE PERIOD THE STUDENT IS IN SCHOOL PREMISES IN PURSUANCE OF LEGITIMATE OBJECTIVE. The student is in the custody of the school authorities as long as he is under the control and influence of the school and within its premises, whether the semester has not yet begun or has already ended. As long as it can be shown that the student is in the school premises in pursuance of a legitimate student objective, in the exercise of a legitimate student right, and even in the enjoyment of a legitimate student right, and even in the enjoyment of a legitimate student privilege, the responsibility of the school authorities over the student continues. 4.ID.; ID.; ID.; ID.; TEACHER-IN-CHARGE, DEFINED. The teacher-in-charge is the one designated by the dean, principal, or other administrative superior to exercise supervision over the pupils in the specific classes or sections to which they are assigned. 5.ID.; ID.; ID.; ID.; LIABILITY FALLS DIRECTLY ON THE TEACHER OR HEAD OF SCHOOL. It should be noted that the liability imposed by this article is supposed to fall directly on the teacher or the head of the school of arts and trades and not on the school itself. 6.ID.; ID.; ID.; ID.; RESPONDEAT SUPERIOR, BASIS OF LIABILITY OF SCHOOL FOR NEGLIGENCE OF TEACHERS AND HEADS. If at all, the school, whatever its nature, may be held to answer for the acts of its teachers or even of the head thereof under the general principle of respondeat superior, but then it may exculpate itself from liability by proof that it had exercised the diligence of a bonus paterfamilias. 7.ID.; ID.; ID.; ID.; DILIGENCE OF A GOOD FATHER OF A FAMILY, PROPER DEFENSE. Such defense of bonus pater familias is also available to the teacher or the head of the school of arts and trades directly held to answer for the tort committed by the student. As long as the defendant can show that he had taken the necessary precautions to prevent the injury complained of, he can exonerate himself from the liability imposed by Article 2180. 8.ID.; ID.; ID.; ID.; LIABILITY ATTACHES REGARDLESS OF AGE OF STUDENT. It should be observed that the teacher will be held liable not only when he is acting in loco parentis for the law does not require that the offending student be of minority age. Unlike the parent, who will be liable only if his child is still a minor, the teacher is held answerable by the law for the act of the student under him regardless of the student's age. MELENCIO-HERRERA, J., concurring and dissenting: 1.CIVIL LAW; OBLIGATIONS AND CONTRACTS; QUASI-DELICT; LIABILITY OF TEACHERS AND HEADS OF ESTABLISHMENTS; TERM NOT LIMITED TO TEACHER-IN-CHARGE; EMBRACES ONE THAT STANDS IN LOCO PARENTIS. I concur, except with respect to the restricted meaning given the term "teacher" in Article 2180 of the Civil Code as "teacher-in-charge." This would limit liability to occasions where there are classes under the immediate charge of a teacher, which does not seem to be the intendment of the law. The philosophy of the law is that whoever stands in loco parentis will have the same duties and obligations as parents

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whenever in such a standing. Those persons are mandatorily held liable for the tortious acts of pupils and students so long as the latter remain in their custody, meaning their protective and supervisory custody. 2.ID.; ID.; ID.; ID.; RATIONALE OF LIABILITY. "The protective custody of the school heads and teachers is mandatorily substituted for that of the parents, and hence, it becomes their obligation as well as that of the school itself to provide proper supervision of the students' activities during the whole time that they are at attendance in the school, including recess time, as well as to take the necessary precautions to protect the students in their custody from dangers and hazards that would reasonably be anticipated, including injuries that some students themselves may inflict wilfully or through negligence on their fellow students. (Palisoc vs, Brillantes, 41 SCRA 548) 3.ID.; ID.; ID.; ID.; DEFENSE AGAINST LIABILITY. As provided for in the same Article 2180, the responsibility treated of shall cease when the persons mentioned prove that they observed all the diligence of a good father of a family to prevent damage. 4.ID.; ID.; ID.; ID.; LIABILITY OF SCHOOLS, EXPLAINED; DEFENSE AVAILABLE. And while a school is, admittedly, not directly liable since Article 2180 speaks only of teachers and schools heads, yet, by virtue of the same provision, the school, as their employer, may be held liable for the failure of its teachers or school heads to perform their mandatory legal duties as substitute parents (Sangco, Philippine Law on Torts & Damages, 1978 ed., p. 201). Again, the school may exculpate itself from liability by proving that it had exercised the diligence of a good father of the family.

DECISION

CRUZ, J p: Like any prospective graduate, Alfredo Amadora was looking forward to the commencement exercises where he would ascend the stage and in the presence of his relatives and friends receive his high school diploma. These ceremonies were scheduled on April 16, 1972. As it turned out, though, fate would intervene and deny him that awaited experience. On April 13, 1972, while they were in the auditorium of their school, the Colegio de San Jose-Recoletes, a classmate, Pablito Daffon, fired a gun that mortally hit Alfredo, ending all his expectations and his life as well. The victim was only seventeen years old. 1 Daffon was convicted of homicide thru reckless imprudence. 2 Additionally, the herein petitioners, as the victim's parents, filed a civil action for damages under Article 2180 of the Civil Code against the Colegio de San Jose-Recoletos, its rector, the high school principal, the dean of boys, and the physics teacher, together with Daffon and two other students, through their respective parents. The complaint against the students was later dropped. After trial, the Court of First Instance of Cebu held the remaining defendants liable to the plaintiffs in the sum of P294,984.00, representing death compensation, loss of earning capacity, costs of litigation, funeral expenses, moral damages, exemplary damages, and attorney's fees. 3 On appeal to the respondent court, however, the decision was reversed and all the defendants were completely absolved. 4 In its decision, which is now the subject of this petition for certiorari under Rule 45 of the Rules of Court, the respondent court found that Article 2180 was not applicable as the Colegio de San Jose-Recoletos was not a school of arts and trades but an academic institution of learning. It also held that the students were not in the custody of the school at the time of the incident as the semester had already ended, that there was no clear identification of the fatal gun, and that in any event the defendants had exercised the necessary diligence in preventing the injury. 5 The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on April 13, 1972, and while in its auditorium was shot to death by Pablito Daffon, a classmate. On the implications and consequences of these facts, the parties sharply disagree. prLL The petitioners contend that their son was in the school to finish his physics experiment as a prerequisite to his graduation; hence, he was then under the custody of the private respondents. The private respondents submit that Alfredo Amadora had gone to the school only for the purpose of submitting his physics report and that he was no longer in their custody because the semester had already ended.

There is also the question of the identity of the gun used which the petitioners consider important because of an earlier incident which they claim underscores the negligence of the school and at least one of the private respondents. It is not denied by the respondents that on April 7, 1972, Sergio Damaso, Jr., the dean of boys, confiscated from Jose Gumban an unlicensed pistol but later returned it to him without making a report to the principal or taking any further action. 6 As Gumban was one of the companions of Daffon when the latter fired the gun that killed Alfredo, the petitioners contend that this was the same pistol that had been confiscated from Gumban and that their son would not have been killed if it had not been returned by Damaso. The respondents say, however, that there is no proof that the gun was the same firearm that killed Alfredo. Resolution of all these disagreements will depend on the interpretation of Article 2180 which, as it happens, is invoked by both parties in support of their conflicting positions. The pertinent part of this article reads as follows: "Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices so long as they remain in their custody." Three cases have so far been decided by the Court in connection with the above-quoted provision, to wit: Exconde v. Capuno, 7 Mercado v. Court of Appeals, 8 and Palisoc v. Brillantes. 9 These will be briefly reviewed in this opinion for a better resolution of the case at bar.

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In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a Boy Scout, attended a Rizal Day parade on instructions of the city school supervisor. After the parade, the boy boarded a jeep, took over its wheel and drove it so recklessly that it turned turtle, resulting in the death of two of its passengers. Dante was found guilty of double homicide with reckless imprudence. In the separate civil action filed against them, his father was held solidarily liable with him in damages under Article 1903 (now Article 2180) of the Civil Code for the tort committed by the 15-year old boy. This decision, which was penned by Justice Bautista Angelo on June 29, 1957, exculpated the school in an obiter dictum (as it was not a party to the case) on the ground that it was not a school of arts and trades. Justice J.B.L. Reyes, with whom Justices Sabino Padilla and Alex Reyes concurred, dissented, arguing that it was the school authorities who should be held liable. Liability under this role, he said, was imposed on (1) teachers in general; and (2) heads of schools of arts and trades in particular. The modifying clause "of establishments of arts and trades" should apply only to "heads" and not "teachers." Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a classmate with a razor blade during recess time at the Lourdes Catholic School in Quezon City, and the parents of the victim sued the culprit's parents for damages. Through Justice Labrador, the Court declared in another obiter (as the school itself had also not been sued) that the school was not liable because it was not an establishment of arts and trades. Moreover, the custody requirement had not been proved as this "contemplates a situation where the student lives and boards with the teacher, such that the control, direction and influences on the pupil supersede those of the parents." Justice J.B.L. Reyes did not take part but the other members of the court concurred in this decision promulgated on May 30, 1960. cdrep In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a classmate with fist blows in the laboratory of the Manila Technical Institute. Although the wrongdoer who was already of age was not boarding in the school, the head thereof and the teacher in charge were held solidarily liable with him. The Court declared through Justice Teehankee: "The phrase used in the cited article 'so long as (the students) remain in their custody' means the protective and supervisory custody that the school and its heads and teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess time. There is nothing in the law that requires that for such liability to attach, the pupil or student who commits the tortious act must live and board in the school, as erroneously held by the lower court, and the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed to have been set aside by the present decision." This decision was concurred in by five other members, 10 including Justice J.B.L. Reyes, who stressed, in answer to the dissenting opinion, that even students already of age were covered by the provision since they were equally in the custody of the school and subject to its discipline. Dissenting with three others, 11 Justice Makalintal was for retaining the custody interpretation in Mercado and submitted that the rule should apply only to torts committed by students not yet of age as the school would be acting only in loco parentis. In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde Case but added that "since the school involved at bar is a non-academic school, the question as to the applicability of the cited codal provision to academic institutions will have to await another case wherein it may properly be raised." This is the case. Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly impleaded and is sought to be held liable under Article 2180; and unlike in Palisoc, it is not a school of arts and trades but an academic institution of learning. The parties herein have also directly raised the question of whether or not Article 2180 covers even establishments which are technically not schools of arts and trades, and, if so, when the offending student is supposed to be "in its custody." After an exhaustive examination of the problem, the Court has come to the conclusion that the provision in question should apply to all schools, academic as well as non-academic. Where the school is academic rather than technical or vocational in nature, responsibility for the tort committed by the student will attach to the teacher in charge of such student, following the first part of the provision. This is the general rule. In the case of establishments of arts and trades, it is the head thereof, and only he, who shall be held liable as an exception to the general rule. In other words, teachers in general shall be liable for the acts of their students except where the school is technical in nature, in which case it is the head thereof who shall be answerable. Following the canon of reddendo singula singulis, "teachers" should apply to the words "pupils and students" and "heads of establishments of arts and trades" to the word "apprentices." The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in Exconde where he said in part: "I can see no sound reason for limiting Art. 1903 of the Old Civil Code to teachers of arts and trades and not to academic ones. What substantial difference is there between them insofar as concerns the proper supervision and vigilance over their pupils? It cannot be seriously contended that an academic teacher is exempt from the duty of watching that his pupils do not commit a tort to the detriment of third persons, so long as they are in a position to exercise authority and supervision over the pupil. In my opinion, in the phrase 'teachers or heads of establishments of arts and trades' used in Art. 1903 of the old Civil Code, the words 'arts and trades' does not qualify 'teachers' but only 'heads of establishments.' The phrase is only an updated version of the equivalent terms `preceptores y artesanos' used in the Italian and French Civil Codes. cdrep "If, as conceded by all commentators, the basis of the presumption of negligence of Art. 1903 in some culpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of their authority, it would seem clear that where the parent places the child under the effective authority of the teacher, the latter, and not the parent, should be the one answerable for the torts committed while under his custody, for the very reason that the parent is not supposed to interfere with the discipline of the school nor with the authority and supervision of the teacher while the child is under instruction. And if there is no authority, there can be no responsibility.'

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There is really no substantial distinction between the academic and the non-academic schools insofar as torts committed by their students are concerned. The same vigilance is expected from the teacher over the students under his control and supervision, whatever the nature of the school where he is teaching. The suggestion in the Exconde and Mercado Cases is that the provision would make the teacher or even the head of the school of arts and trades liable for an injury caused by any student in its custody but if that same tort were committed in an academic school, no liability would attach to the teacher or the school head. All other circumstances being the same, the teacher or the head of the academic school would be absolved whereas the teacher and the head of the nonacademic school would be held liable, and simply because the latter is a school of arts and trades. The Court cannot see why different degrees of vigilance should be exercised by the school authorities on the basis only of the nature of their respective schools. There does not seem to be any plausible reason for relaxing that vigilance simply because the school is academic in nature and for increasing such vigilance where the school is non-academic. Notably, the injury subject of liability is caused by the student and not by the school itself nor is it a result of the operations of the school or its equipment. The injury contemplated may be caused by any student regardless of the school where he is registered. The teacher certainly should not be able to excuse himself by simply showing that he is teaching in an academic school where, on the other hand, the head would be held liable if the school were non-academic.

These questions, though, may be asked: If the teacher of the academic school is to be held answerable for the torts committed by his students, why is it the head of the school only who is held liable where the injury is caused in a school of arts and trades? And in the case of the academic or non-technical school, why not apply the rule also to the head thereof instead of imposing the liability only on the teacher? The reason for the disparity can be traced to the fact that historically the head of the school of arts and trades exercised a closer tutelage over his pupils than the head of the academic school. The old schools of arts and trades were engaged in the training of artisans apprenticed to their master who personally and directly instructed them on the technique and secrets of their craft. The head of the school of arts and trades was such a master and so was personally involved in the task of teaching his students, who usually even boarded with him and so came under his constant control, supervision and influence. By contrast, the head of the academic school was not as involved with his students and exercised only administrative duties over the teachers who were the persons directly dealing with the students. The head of the academic school had then (as now) only a vicarious relationship with the students. Consequently, while he could not be directly faulted for the acts of the students, the head of the school of arts and trades, because of his closer ties with them, could be so blamed. It is conceded that the distinction no longer obtains at present in view of the expansion of the schools of arts and trades, the consequent increase in their enrollment, and the corresponding diminution of the direct and personal contact of their heads with the students. Article 2180, however, remains unchanged. In its present state, the provision must be interpreted by the Court according to its clear and original mandate until the legislature, taking into account the changes in the situation subject to be regulated, sees fit to enact the necessary amendment. LLpr The other matter to be resolved is the duration of the responsibility of the teacher or the head of the school of arts and trades over the students. Is such responsibility co-extensive with the period when the student is actually undergoing studies during the school term, as contended by the respondents and impliedly admitted by the petitioners themselves? From a reading of the provision under examination, it is clear that while the custody requirement, to repeat Palisoc v. Brillantes, does not mean that the student must be boarding with the school authorities, it does signify that the student should be within the control and under the influence of the school authorities at the time of the occurrence of the injury. This does not necessarily mean that such, custody be co-terminous with the semester, beginning with the start of classes and ending upon the close thereof, and excluding the time before or after such period, such as the period of registration, and in the case of graduating students, the period before the commencement exercises. In the view of the Court, the student is in the custody of the school authorities as long as he is under the control and influence of the school and within its premises, whether the semester has not yet begun or has already ended. It is too tenuous to argue that the student comes under the discipline of the school only upon the start of classes notwithstanding that before that day he has already registered and thus placed himself under its rules. Neither should such discipline be deemed ended upon the last day of classes notwithstanding that there may still be certain requisites to be satisfied for completion of the course, such as submission of reports, term papers, clearances and the like. During such periods, the student is still subject to the disciplinary authority of the school and cannot consider himself released altogether from observance of its rules. As long as it can be shown that the student is in the school premises in pursuance of a legitimate student objective, in the exercise of a legitimate student right, and even in the enjoyment of a legitimate student right, and even in the enjoyment of a legitimate student privilege, the responsibility of the school authorities over the student continues. Indeed, even if the student should be doing nothing more than relaxing in the campus in the company of his classmates and friends and enjoying the ambience and atmosphere of the school, he is still within the custody and subject to the discipline of the school authorities under the provisions of Article 2180. During all these occasions, it is obviously the teacher-in-charge who must answer for his students' torts, in practically the same way that the parents are responsible for the child when he is in their custody. The teacher-in-charge is the one designated by the dean, principal, or other administrative superior to exercise supervision over the pupils in the specific classes or sections to which they are assigned. It is not necessary that at the time of the injury, the teacher be physically present and in a position to prevent it. Custody does not connote immediate and actual physical control but refers more to the influence exerted on the child and the discipline instilled in him as a result of such influence. Thus, for the injuries caused by the student, the teacher and not the parent shall be held responsible if the tort was committed within the premises of the school at any time when its authority could be validly exercised over him. In any event, it should be noted that the liability imposed by this article is supposed to fall directly on the teacher or the head of the school of arts and trades and not on the school itself. If at all, the school, whatever its nature, may be held to answer for the acts of its teachers or even of the head thereof under the general principle of respondeat superior, but then it may exculpate itself from liability by proof that it had exercised the diligence of a bonus paterfamilias.

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Such defense is, of course, also available to the teacher or the head of the school of arts and trades directly held to answer for the tort committed by the student. As long as the defendant can show that he had taken the necessary precautions to prevent the injury complained of, he can exonerate himself from the liability imposed by Article 2180, which also states that: "The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damages." In this connection, it should be observed that the teacher will be held liable not only when he is acting in loco parentis for the law does not require that the offending student be of minority age. Unlike the parent, who will be liable only if his child is still a minor, the teacher is held answerable by the law for the act of the student under him regardless of the student's age. Thus, in the Palisoc Case, liability attached to the teacher and the head of the technical school although the wrongdoer was already of age. In this sense, Article 2180 treats the parent more favorably than the teacher. The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his dissenting opinion in Palisoc that the school may be unduly exposed to liability under this article in view of the increasing activism among the students that is likely to cause violence and resulting injuries in the school premises. That is a valid fear, to be sure. Nevertheless, it should be repeated that, under the present ruling, it is not the school that will be held directly liable. Moreover, the defense of due diligence is available to it in case it is sought to be held answerable as principal for the acts or omission of its head or the teacher in its employ. cdll The school can show that it exercised proper measures in selecting the head or its teachers and the appropriate supervision over them in the custody and instruction of the pupils pursuant to its rules and regulations for the maintenance of discipline among them. In almost all cases now, in fact, these measures are effected through the assistance of an adequate security force to help the teacher physically enforce those rules upon the students. This should bolster the claim of the school that it has taken adequate steps to prevent any injury that may be committed by its students. A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to hold him directly answerable for the damage caused by his students as long as they are in the school premises and presumably under his influence. In this respect, the Court is disposed not to expect from the teacher the same measure of responsibility imposed on the parent for their influence over the child is not equal in degree. Obviously, the parent can expect more obedience from the child because the latter's dependence on him is greater than on the teacher. It need not be stressed that such dependence includes the child's support and sustenance whereas submission to the teacher's influence, besides being co-terminous with the period of custody, is usually enforced only because of the students' desire to pass the course. The parent can instill more lasting discipline on the child than the teacher and so should be held to a greater accountability than the teacher for the tort committed by the child. And if it is also considered that under the article in question, the teacher or the head of the school of arts and trades is responsible for the damage caused by the student or apprentice even if he is already of age and therefore less tractable than the minor then there should all the more be justification to require from the school authorities less accountability as long as they can prove reasonable diligence in preventing the injury. After all, if the parent himself is no longer liable for the student's acts because he has reached majority age and so is no longer under the former's control, there is then all the more reason for leniency in assessing the teacher's responsibility for the acts of the student.

Applying the foregoing considerations, the Court has arrived at the following conclusions: 1.At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of Colegio de San Jose-Recoletos notwithstanding that the fourth year classes had formally ended. It was immaterial if he was in the school auditorium to finish his physics experiment or merely to submit his physics report for what is important is that he was there for a legitimate purpose. As previously observed, even the mere savoring of the company of his friends in the premises of the school is a legitimate purpose that would have also brought him in the custody of the school authorities. 2.The rector, the high school principal and the dean of boys cannot be held liable because none of them was the teacher-in-charge as previously defined. Each of them was exercising only a general authority over the student body and not the direct control and influence exerted by the teacher placed in charge of particular classes or sections and thus immediately involved in its discipline. The evidence of the parties does not disclose who the teacher-in-charge of the offending student was. The mere fact that Alfredo Amadora had gone to school that day in connection with his physics report did not necessarily make the physics teacher, respondent Celestino Dicon, the teacher-in-charge of Alfredo's killer. 3.At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon was negligent in enforcing discipline upon Daffon or that he had waived observance of the rules and regulations of the school or condoned their non-observance. His absence when the tragedy happened cannot be considered against him because he was not supposed or required to report to school on that day. And while it is true that the offending student was still in the custody of the teacher-in-charge even if the latter was physically absent when the tort was committed, it has not been established that it was caused by his laxness in enforcing discipline upon the student. On the contrary, the private respondents have proved that they had exercised due diligence, through the enforcement of the school regulations, in maintaining that discipline. llcd 4.In the absence of a teacher-in-charge, it is probably the dean of boys who should be held liable, especially in view of the unrefuted evidence that he had earlier confiscated an unlicensed gun from one of the students and returned the same later to him without taking disciplinary action or reporting the matter to higher authorities. While this was clearly negligence on his part, for which he deserves sanctions from the school, it does not necessarily link him to the shooting of Amador as it has not been shown that the confiscated and returned pistol was the gun that killed the petitioners' son. 5.Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable under the article because only the teacher or the head of the school of arts and trades is made responsible for the damage caused by the student or apprentice. Neither can it be held to answer for the tort committed by any of the other private respondents for none of them has been found to have been charged with the custody of the offending student or has been remiss in the discharge of his duties in connection with such custody.

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In sum, the Court finds under the facts as disclosed by the record and in the light of the principles herein announced that none of the respondents is liable for the injury inflicted by Pablito Daffon on Alfredo Amadora that resulted in the latter's death at the auditorium of the Colegio de San Jose-Recoletos on April 13, 1972. While we deeply sympathize with the petitioners over the loss of their son under the tragic circumstances here related, we nevertheless are unable to extend them the material relief they seek, as a balm to their grief, under the law they have invoked. WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so ordered. Yap, Narvasa, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and Grio-Aquino, JJ., concur. Teehankee, C.J., did not participate in deliberations. Fernan andPadilla, JJ., took no part, formerly counsel for Colegio de San Jose-Recoletos.

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SECOND DIVISION [G.R. No. 70458. October 5, 1988.] BENJAMIN SALVOSA and BAGUIO COLLEGES FOUNDATION, petitioners, vs. THE INTERMEDIATE APPELLATE COURT, EDUARDO B. CASTRO, DIOMEDES B. CASTRO, VIRGINIA B. CASTRO and RODOLFO B. CASTRO, respondents.

Edilberto B. Tenefrancia for petitioners. Leonardo L. Cocjin, Jr. for respondents.

SYLLABUS 1.CIVIL LAW; TORTS AND DAMAGES; LIABILITY OF TEACHERS OR HEADS OF ESTABLISHMENTS. Under the penultimate paragraph of Art. 2180 of the Civil Code, teachers or heads of establishments of arts and trades are liable for "damages caused by their pupils and students or apprentices, so long as they remain in their custody." The rationale of such liability is that so long as the student remains in the custody of a teacher, the latter "stands, to a certain extent, in loco parentis [as to the student] and [is] called upon to exercise reasonable supervision over the conduct of the [student]." Likewise, "the phrase used in [Art. 2180 - 'so long as (the students) remain in their custody' means the protective and supervisory custody that the school and its heads and teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess time. 2.ID.; ID.; ID.; TERM "RECESS" CONSTRUED; SEE PALISOC V. BRILLANTES, ET AL. (41 SCRA 548). In line with the case of Palisoc, a student not "at attendance in the school" cannot be in "recess" thereat. A "recess," as the concept is embraced in the phrase "at attendance in the school," contemplates a situation of temporary adjournment of school activities where the student still remains within call of his mentor and is not permitted to leave the school premises, or the area within which the school activity is conducted. Recess by its nature does not include dismissal. Likewise, the mere fact of being enrolled or being in the premises of a school without more does not constitute "attending school" or being in the "protective and supervisory custody" of the school, as contemplated in the law. 3.ID.; ID.; SCHOOL HEAD NOT SOLIDARILY LIABLE; CASE AT BAR. We hold that Jimmy B. Abon cannot be considered to have been "at attendance in the school," or in the custody of BCF, when he shot Napoleon Castro. Logically, therefore, petitioners cannot under Art. 2180 of the Civil Code be held solidarily liable with Jimmy B. Abon for damages resulting from his acts. Besides, the record shows that before the shooting incident, Roberto B. Ungos ROTC Unit Commandant, AFP, had instructed Jimmy B. Abon "not to leave the office and [to keep the armory] well guarded. Apart from negating a finding that Jimmy B. Abon was under the custody of the school when he committed the act for which the petitioners are sought to be held liable, this circumstance shows that Jimmy B. Abon was supposed to be working in the armory with definite instructions from his superior, the ROTC Commandant, when he shot Napoleon Castro.

DECISION

PADILLA, J p: In this petition for review on certiorari, petitioners seek the reversal of the decision 1 of respondent Intermediate Appellate Court, dated 7 December 1984, in AC-G.R. No. CV 69876, in so far as it affirmed the decision 2 of the Court of First Instance of Tarlac (hereinafter referred to as the Trial Court), which held, among others, petitioners solidarily liable with Jimmy B. Abon, under Art. 2180 of the Civil Code. LibLex The relevant facts, as found by the Trial Court and adopted by reference by the respondent Court, are: ". . . Baguio Colleges Foundation (BCF, hereafter) is an academic institution. . . . [However], it is also an institution of arts and trade. It has so advertised itself, as its own evidence shows. Its brochure (Exh. 2) shows that BCF has a full-fledged technical-vocational department offering Communication, Broadcast and Telytype Technician courses as well as Electronics Serviceman and Automotive Mechanics courses . . . these courses divest BCF of the nature or character of being purely or exclusively an academic institution." 3 Within the premises of the BCF is an ROTC Unit, the Baguio Colleges Foundation Reserve Officers Training Corps (ROTC) Unit, which is under the full control of the Armed Forces of the Philippines. 4 The ROTC Unit, by way of accommodation to the Armed Forces of the Philippines (AFP), pursuant to Department Order No. 14, Series of 1975 of the Department of Education and Culture, 5 is provided by the BCF an office and an armory located at the basement of its main building. 6 The Baguio Colleges Foundation ROTC Unit had Jimmy B. Abon as its duly appointed armorer. 7 As armorer of the ROTC Unit, Jimmy B. Abon received his appointment from the AFP. Not being an employee of the BCF, he also received his salary from the AFP, 10 On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Jimmy B. Abon shot Napoleon Castro a student of the University of Baguio with an unlicensed firearm which the former took from the armory of the ROTC Unit of the BCF. 11 As a result, Napoleon Castro died and Jimmy B. Abon was prosecuted for, and convicted of the crime of Homicide by Military Commission No. 30, AFP. 12

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Subsequently, the heirs of Napoleon Castro sued for damages, impleading Jimmy B. Abon, Roberto C. Ungos (ROTC Commandant), Benjamin Salvosa (President and Chairman of the Board of BCF), Jesus Salvosa (Executive Vice President of BCF), Libertad D. Quetolio (Dean of the College of Education and Executive Trustee of BCF) and the Baguio Colleges Foundation, Inc. as party defendants. After hearing, the Trial Court rendered a decision, (1) sentencing defendants Jimmy B. Abon, Benjamin Salvosa and Baguio Colleges Foundation, Inc., jointly and severally, to pay private respondents, as heirs of Napoleon Castro: a) P12,000.00 for the death of Napoleon Castro, (b) P316,000.00 as indemnity for the loss of earning capacity of the deceased, (c) P5,000.00 as moral damages, (d) P6,000.00 as actual damages, and (e) P5,000.00 as attorney's fees, plus costs; (2) absolving the other defendants; and (3) dismissing the defendants' counterclaim for lack of merit. 13 On appeal by petitioners, the respondent Court affirmed with modification the decision of the Trial Court. The modification consisted in reducing the award for loss of earning capacity of the deceased from P316,000.00 to P30,000.00 by way of temperate damages, and increasing the indemnity for the death of Napoleon Castro from P12,000.00 to P30,000.00. Hence, this petition. The central issue in this case is whether or not petitioners can be held solidarily liable with Jimmy B. Abon for damages under Article 2180 of the Civil Code, as a consequence of the tortious act of Jimmy B. Abon. Under the penultimate paragraph of Art. 2180 of the Civil Code, teachers or heads of establishments of arts and trades are liable for "damages caused by their pupils and students or apprentices, so long as they remain in their custody." The rationale of such liability is that so long as the student remains in the custody of a teacher, the latter "stands, to a certain extent, in loco parentis [as to the student] and [is] called upon to exercise reasonable supervision over the conduct of the [student]." 14 Likewise, "the phrase used in [Art. 2180] 'so long as (the students) remain in their custody' means the protective and supervisory custody that the school and its heads and teachers exercise over the pupils and students for as long as they are at attendance in the school, including recess time. 15 In the case at bar, in holding that Jimmy B. Abon was still in the protective and supervisory custody of the Baguio Colleges Foundation when he shot Napoleon Castro, the respondent Court ruled that: "it is true that Abon was not attending any class or school function at the time of the shooting incident, which was at about 8 o'clock in the evening; but considering that Abon was employed as an armorer and property custodian of the BCF ROTC unit, he must have been attending night classes and therefore that hour in the evening was just about dismissal time for him or soon thereafter. The time interval is safely within the 'recess time' that the trial court spoke of and envisioned by the Palisoc case, supra." 16 (Emphasis supplied) In line with the case of Palisoc, 17 a student not "at attendance in the school" cannot be in "recess" thereat. A "recess," as the concept is embraced in the phrase "at attendance in the school," contemplates a situation of temporary adjournment of school activities where the student still remains within call of his mentor and is not permitted to leave the school premises, or the area within which the school activity is conducted. Recess by its nature does not include dismissal. 18 Likewise, the mere fact of being enrolled or being in the premises of a school without more does not constitute "attending school" or being in the "protective and supervisory custody" of the school, as contemplated in the law. prcd Upon the foregoing considerations, we hold that Jimmy B. Abon cannot be considered to have been "at attendance in the school," or in the custody of BCF, when he shot Napoleon Castro. Logically, therefore, petitioners cannot under Art. 2180 of the Civil Code be held solidarily liable with Jimmy B. Abon for damages resulting from his acts. Besides, the record shows that before the shooting incident, Roberto B. Ungos ROTC Unit Commandant, AFP, had instructed Jimmy B. Abon "not to leave the office and [to keep the armory] well guarded. 19 Apart from negating a finding that Jimmy B. Abon was under the custody of the school when he committed the act for which the petitioners are sought to be held liable, this circumstance shows that Jimmy B. Abon was supposed to be working in the armory with definite instructions from his superior, the ROTC Commandant, when he shot Napoleon Castro.

Petitioners also raise the issue that, under Art. 2180 of the Civil Code, a school which offers both academic and technical vocational courses cannot be held liable for a tort committed by a student enrolled only in its academic program; however, considering that Jimmy B. Abon was not in the custody of BCF when he shot Napoleon Castro, the Court deems it unnecessary to pass upon such other issue. 20 WHEREFORE, the decision appealed from is hereby REVERSED in so far as it holds petitioners solidarily liable with Jimmy B. Abon for his tortious act in the killing of Napoleon Castro. No costs. SO ORDERED. Melencio-Herrera, Paras, Sarmiento and Regalado, JJ., concur.

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FIRST DIVISION [G.R. No. 143363. February 6, 2002.] ST. MARY'S ACADEMY, petitioner, vs. WILLIAM CARPITANOS and LUCIA S. CARPITANOS, GUADA DANIEL, JAMES DANIEL II, JAMES DANIEL, SR., and VIVENCIO VILLANUEVA, respondents.

Padilla Law Office for petitioner. Peter Y. Co for respondents Daniel and Villanueva. Feliciano M. Maraon for respondent Carpitanos.

SYNOPSIS Sherwin Carpitanos, son of respondents Carpitanos, died in an accident caused by the detachment of the steering wheel guide of the jeep owned by respondent Villanueva. The vehicle was then driven by James Daniel II, a minor. The incident occurred during an enrollment drive conducted by petitioner academy where Sherwin was a student. Sherwin's parents filed an action for damages against petitioner and the other respondents. The trial court ruled in favor of Sherwin's parents ordering petitioner to pay civil indemnity for the loss of life of Sherwin, actual and moral damages, and attorney's fees under Articles 218 and 219 of the Family Code, and declared respondents Daniel subsidiarily liable. Respondent Villanueva was absolved from any liability. Under Articles 218 and 219 of the Family Code, for the school to be principally and solidarily liable for the acts of its students, the latter's negligence must be the proximate cause of the injury. In this case, there was no evidence that petitioner allowed the minor to drive the jeep and that the proximate cause of the accident was a mechanical defect in the vehicle, thus, petitioner may not be held liable for the death of Sherwin. However, as the registered owner of the vehicle, Villanueva was held primarily liable for the death of Sherwin.

SYLLABUS 1.CIVIL LAW; FAMILY CODE; SPECIAL PARENTAL AUTHORITY OVER A MINOR CHILD. Under Article 218 of the Family Code, the following shall have special parental authority over a minor child while under their supervision, instruction or custody: (1) the school, its administrators and teachers; or (2) the individual, entity or institution engaged in child care. This special parental authority and responsibility applies to all authorized activities, whether inside or outside the premises of the school, entity or institution. Thus, such authority and responsibility applies to field trips, excursions and other affairs of the pupils and students outside the school premises whenever authorized by the school or its teachers. 2.ID.; ID.; ID.; PRINCIPAL AND SOLIDARY LIABILITY OF PERSONS EXERCISING PARENTAL AUTHORITY. Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special parental authority are principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor while under their supervision, instruction, or custody. 3.ID.; ID.; ID.; ID.; REQUISITE. However, for petitioner to be liable, there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence must have a causal connection to the accident. 4.ID.; ID.; ID.; ID.; ID.; CASE AT BAR. In this case, the respondents failed to show that the negligence of petitioner was the proximate cause of the death of the victim. Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steering wheel guide of the jeep. Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent Vivencio Villanueva, who had possession and control of the jeep. He was driving the vehicle and he allowed James Daniel II, a minor, to drive the jeep at the time of the accident. Considering that the negligence of the minor driver or the detachment of the steering wheel guide of the jeep owned by respondent Villanueva was an event over which petitioner St. Mary's Academy had no control, and which was the proximate cause of the accident, petitioner may not be held liable for the death resulting from such accident. Consequently, we find that petitioner likewise cannot be held liable for moral damages in the amount of P500,000.00 awarded by the trial court and affirmed by the Court of Appeals. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. In this case, the proximate cause of the accident was not attributable to petitioner. For the reason that petitioner was not directly liable for the accident, the decision of the Court of Appeals ordering petitioner to pay death indemnity to respondent Carpitanos must be deleted. Moreover, the grant of attorney's fees as part of damages is the exception rather than the rule. The power of the court to award attorney's fees under Article 2208 of the Civil Code demands factual, legal and equitable justification. Thus, the grant of attorney's fees against the petitioner is likewise deleted. aESICD 5.ID.; DAMAGES; REGISTERED OWNER OF VEHICLE PRIMARILY RESPONSIBLE FOR INJURIES CAUSED TO THE PUBLIC OR TO THIRD PERSONS WHILE VEHICLE WAS BEING DRIVEN ON THE HIGHWAYS OR STREETS. We have held that the registered owner of any vehicle, even if not used for public 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 highways or streets. Hence, with the overwhelming evidence presented by petitioner and the respondent Daniel spouses that the accident occurred because of the detachment of the steering wheel guide of the jeep, it is not the school, but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin Carpitanos.

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DECISION

PARDO, J p: The Case The case is an appeal via certiorari from the decision 1 of the Court of Appeals as well as the resolution denying reconsideration, holding petitioner liable for damages arising from an accident that resulted in the death of a student who had joined a campaign to visit the public schools in Dipolog City to solicit enrollment. The Facts The facts, as found by the Court of Appeals, are as follows: "Claiming damages for the death of their only son, Sherwin Carpitanos, spouses William Carpitanos and Lucia Carpitanos filed on June 9, 1995 a case against James Daniel II and his parents, James Daniel Sr. and Guada Daniel, the vehicle owner, Vivencio Villanueva and St. Mary's Academy before the Regional Trial Court of Dipolog City. "On 20 February 1997, Branch 6 of the Regional Trial Court of Dipolog City rendered its decision the dispositive portion of which reads as follows: "'WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in the following manner: 1.Defendant St. Mary's Academy of Dipolog City, is hereby ordered to pay plaintiffs William Carpitanos and Luisa Carpitanos, the following sums of money: a.FIFTY THOUSAND PESOS (P50,000.00) indemnity for the loss of life of Sherwin S. Carpitanos; b.FORTY THOUSAND PESOS (P40,000.00) actual damages incurred by plaintiffs for burial and related expenses; c.TEN THOUSAND PESOS (P10,000.00) for attorney's fees; d.FIVE HUNDRED THOUSAND PESOS (P500,000.00) for moral damages; and to pay costs. 2.Their liability being only subsidiary, defendants James Daniel, Sr. and Guada Daniel are hereby ordered to pay herein plaintiffs the amount of damages above-stated in the event of insolvency of principal obligor St. Mary's Academy of Dipolog City; 3.Defendant James Daniel II, being a minor at the time of the commission of the tort and who was under special parental authority of defendant St. Mary's Academy, is ABSOLVED from paying the above-stated damages, same being adjudged against defendants St. Mary's Academy, and subsidiarily, against his parents; 4.Defendant Vivencio Villanueva is hereby ABSOLVED of any liability. His counterclaim not being in order as earlier discussed in this decision, is hereby DISMISSED. IT IS SO ORDERED."' (Decision, pp. 32-33; Records, pp. 205-206)." "From the records it appears that from 13 to 20 February 1995, defendant-appellant St. Mary's Academy of Dipolog City conducted an enrollment drive for the school year 1995-1996. A facet of the enrollment campaign was the visitation of schools from where prospective enrollees were studying. As a student of St. Mary's Academy, Sherwin Carpitanos was part of the campaigning group. Accordingly, on the fateful day, Sherwin, along with other high school students were riding in a Mitsubishi jeep owned by defendant Vivencio Villanueva on their way to Larayan Elementary School, Larayan, Dapitan City. The jeep was driven by James Daniel II then 15 years old and a student of the same school. Allegedly, the latter drove the jeep in a reckless manner and as a result the jeep turned turtle. "Sherwin Carpitanos died as a result of the injuries he sustained from the accident." 2 In due time, petitioner St. Mary's Academy appealed the decision to the Court of Appeals. 3 On February 29, 2000, the Court of Appeals promulgated a decision reducing the actual damages to P25,000.00 but otherwise affirming the decision a quo, in toto. 4 On February 29, 2000, petitioner St. Mary's Academy filed a motion for reconsideration of the decision. However, on May 22, 2000, the Court of Appeals denied the motion. 5 Hence, this appeal. 6

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The Issues 1)Whether the Court of Appeals erred in holding the petitioner liable for damages for the death of Sherwin Carpitanos. 2)Whether the Court of Appeals erred in affirming the award of moral damages against the petitioner. The Court's Ruling We reverse the decision of the Court of Appeals. The Court of Appeals held petitioner St. Mary's Academy liable for the death of Sherwin Carpitanos under Articles 218 7 and 219 8 of the Family Code, pointing out that petitioner was negligent in allowing a minor to drive and in not having a teacher accompany the minor students in the jeep.

Under Article 218 of the Family Code, the following shall have special parental authority over a minor child while under their supervision, instruction or custody: (1) the school, its administrators and teachers; or (2) the individual, entity or institution engaged in child care. This special parental authority and responsibility applies to all authorized activities, whether inside or outside the premises of the school, entity or institution. Thus, such authority and responsibility applies to field trips, excursions and other affairs of the pupils and students outside the school premises whenever authorized by the school or its teachers. 9 Under Article 219 of the Family Code, if the person under custody is a minor, those exercising special parental authority are principally and solidarily liable for damages caused by the acts or omissions of the unemancipated minor while under their supervision, instruction, or custody. 10 However, for petitioner to be liable, there must be a finding that the act or omission considered as negligent was the proximate cause of the injury caused because the negligence, must have a causal connection to the accident. 11 In order that there may be a recovery for an injury, however, it must be shown that the injury for which recovery is sought must be the legitimate consequence of the wrong done; the connection between the negligence and the injury must be a direct and natural sequence of events, unbroken by intervening efficient causes. In other words, the negligence must be the proximate cause of the injury. For, negligence, no matter in what it consists, cannot create a right of action unless it is the proximate cause of the injury complained of. And the proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. 12 In this case, the respondents failed to show that the negligence of petitioner was the proximate cause of the death of the victim. Respondents Daniel spouses and Villanueva admitted that the immediate cause of the accident was not the negligence of petitioner or the reckless driving of James Daniel II, but the detachment of the steering wheel guide of the jeep. In their comment to the petition, respondents Daniel spouses and Villanueva admitted the documentary exhibits, establishing that the cause of the accident was the detachment of the steering wheel guide of the jeep. Hence, the cause of the accident was not the recklessness of James Daniel II but the mechanical defect in the jeep of Vivencio Villanueva. Respondents, including the spouses Carpitanos, parents of the deceased Sherwin Carpitanos, did not dispute the report and testimony of the traffic investigator who stated that the cause of the accident was the detachment of the steering wheel guide that caused the jeep to turn turtle. Significantly, respondents did not present any evidence to show that the proximate cause of the accident was the negligence of the school authorities, or the reckless driving of James Daniel II. Hence, the respondents reliance on Article 219 of the Family Code that those given the authority and responsibility under the p receding Article shall be principally and solidarily liable for damages caused by acts or omissions of the unemancipated minor was unfounded. Further, there was no evidence that petitioner school allowed the minor James Daniel II to drive the jeep of respondent Vivencio Villanueva. It was Ched Villanueva, grandson of respondent Vivencio Villanueva, who had possession and control of the jeep. He was driving the vehicle and he allowed James Daniel II, a minor, to drive the jeep at the time of the accident. Hence, liability for the accident, whether caused by the negligence of the minor driver or mechanical detachment of the steering wheel guide of the jeep, must be pinned on the minor's parents primarily. The negligence of petitioner St. Mary's Academy was only a remote cause of the accident. Between the remote cause and the injury, there intervened the negligence of the minor's parents or the detachment of the steering wheel guide of the jeep. "The proximate cause of an injury is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred." 13 Considering that the negligence of the minor driver or the detachment of the steering wheel guide of the jeep owned by respondent Villanueva was an event over which petitioner St. Mary's Academy had no control, and which was the proximate cause of the accident, petitioner may not be held liable for the death resulting from such accident. Consequently, we find that petitioner likewise cannot be held liable for moral damages in the amount of P500,000.00 awarded by the trial court and affirmed by the Court of Appeals.

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Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. 14 In this case, the proximate cause of the accident was not attributable to petitioner. For the reason that petitioner was not directly liable for the accident, the decision of the Court of Appeals ordering petitioner to pay death indemnity to respondent Carpitanos must be deleted. Moreover, the grant of attorney's fees as part of damages is the exception rather than the rule. 15 The power of the court to award attorney's fees under Article 2208 of the Civil Code demands factual, legal and equitable justification. 16 Thus, the grant of attorney's fees against the petitioner is likewise deleted. Incidentally, there was no question that the registered owner of the vehicle was respondent Villanueva. He never denied and in fact admitted this fact. We have held that the registered owner of any vehicle, even if not used for public 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 highways or streets." 17 Hence, with the overwhelming evidence presented by petitioner and the respondent Daniel spouses that the accident occurred because of the detachment of the steering wheel guide of the jeep, it is not the school, but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin Carpitanos. The Fallo WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals 18 and that of the trial court. 19 The Court remands the case to the trial court for determination of the liability of defendants, excluding petitioner St. Mary's Academy, Dipolog City. DaTHAc No costs. SO ORDERED. Davide, Jr., C.J., Kapunan and Ynares-Santiago, JJ., concur. Puno, J., in the result.

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SECOND DIVISION [G.R. No. 71049. May 29, 1987.] BERNARDINO JIMENEZ, petitioner, vs. CITY OF MANILA and INTERMEDIATE APPELLATE COURT, respondents.

DECISION

PARAS, J p: This is a petition for review on certiorari of : (1) the decision * of the Intermediate Appellate Court in AC-G.R. No. 013887-CV Bernardino Jimenez v. Asiatic Integrated Corporation and City of Manila, reversing the decision ** of the Court of First Instance of Manila, Branch XXII in Civil Case No. 96390 between the same parties, but only insofar as holding Asiatic Integrated Corporation solely liable for damages and attorney's fees instead of making the City of Manila jointly and solidarily liable with it as prayed for by the petitioner and (2) the resolution of the same Appellate Court denying his Partial Motion for Reconsideration (Rollo, p. 2). The dispositive portion of the Intermediate Appellate Court's decision is as follows: "WHEREFORE, the decision appealed from is hereby REVERSED. A new one is hereby entered ordering the defendant Asiatic Integrated Corporation to pay the plaintiff P221.90 actual medical expenses, P900.00 for the amount paid for the operation and management of a school bus, P20,000.00 as moral damages due to pains, sufferings and sleepless nights and P10,000.00 as attorney's fees. SO ORDERED." (p. 20, Rollo) The findings of respondent Appellate Court are as follows: The evidence of the plaintiff (petitioner herein) shows that in the morning of August 15, 1974 he, together with his neighbors, went to Sta. Ana public market to buy "bagoong" at the time when the public market was flooded with ankle deep rainwater. After purchasing the "bagoong" he turned around to return home but he stepped on an uncovered opening which could not be seen because of the dirty rainwater, causing a dirty and rusty four inch nail, stuck inside the uncovered opening, to pierce the left leg of plaintiff-petitioner penetrating to a depth of about one and a half inches. After administering first aid treatment at a nearby drugstore, his companions helped him hobble home. He felt ill and developed fever and he had to be carried to Dr. Juanita Mascardo. Despite the medicine administered to him by the latter, his left leg swelled with great pain. He was then rushed to the Veterans Memorial Hospital where he had to be confined for twenty (20) days due to high fever and severe pain. Upon his discharge from the hospital, he had to walk around with crutches for fifteen (15) days. His injury prevented him from attending to the school buses he is operating. As a result, he had to engage the services of one Bienvenido Valdez to supervise his business for an aggregate compensation of nine hundred pesos (P900.00). (Decision, AC-G.R. CV No. 01387, Rollo, pp. 13-20). LexLib Petitioner sued for damages the City of Manila and the Asiatic Integrated Corporation under whose administration the Sta. Ana Public Market had been placed by virtue of a Management and Operating Contract (Rollo, p. 47). The lower court decided in favor of respondents, the dispositive portion of the decision reading: "WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiff dismissing the complaint with costs against the plaintiff. For lack of sufficient evidence, the counterclaims of the defendants are likewise dismissed." (Decision, Civil Case No. 96390, Rollo, p. 42). As above stated, on appeal, the Intermediate Appellate Court held the Asiatic Integrated Corporation liable for damages but absolved respondent City of Manila. Hence this petition. The lone assignment of error raised in this petition is on whether or not the Intermediate Appellate Court erred in not ruling that respondent City of Manila should be jointly and severally liable with Asiatic Integrated Corporation for the injuries petitioner suffered. In compliance with the resolution of July 1, 1985 of the First Division of this Court (Rollo, p. 29) respondent City of Manila filed its comment on August 13, 1985 (Rollo, p. 34) while petitioner filed its Reply on August 21, 1985 (Rollo, p. 51). Thereafter, the Court in the resolution of September 11, 1985 (Rollo, p. 62) gave due course to the petition and required both parties to submit simultaneous memoranda. Petitioner filed his memorandum on October 1, 1985 (Rollo, p. 65) while respondent filed its memorandum on October 24, 1985 (Rollo, p. 82). In the resolution of October 13, 1986, this case was transferred to the Second Division of this Court, the same having been assigned to a member of said Division (Rollo, p. 92).

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The petition is impressed with merit. As correctly found by the Intermediate Appellate Court, there is no doubt that the plaintiff suffered injuries when he fell into a drainage opening without any cover in the Sta. Ana Public Market. Defendants do not deny that plaintiff was in fact injured although the Asiatic Integrated Corporation tries to minimize the extent of the injuries, claiming that it was only a small puncture and that as a war veteran, plaintiff's hospitalization at the War Veteran's Hospital was free. (Decision, AC-G.R. CV No. 01387, Rollo, p. 6). Cdpr Respondent City of Manila maintains that it cannot be held liable for the injuries sustained by the petitioner because under the Management and Operating Contract, Asiatic Integrated Corporation assumed all responsibility for damages which may be suffered by third persons for any cause attributable to it. It has also been argued that the City of Manila cannot be held liable under Article 1, Section 4 of Republic Act No. 409 as amended (Revised Charter of Manila) which provides: "The City shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other City Officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or any other officers while enforcing or attempting to enforce said provisions." This issue has been laid to rest in the case of City of Manila v. Teotico (22 SCRA 269-272 [1968]) where the Supreme Court squarely ruled that Republic Act No. 409 establishes a general rule regulating the liability of the City of Manila for "damages or injury to persons or property arising from the failure of city officers" to enforce the provisions of said Act, "or any other law or ordinance or from negligence" of the City "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code of the Philippines which provides that: "Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by any person by reason of defective conditions of roads, streets, bridges, public buildings and other public works under their control or supervision." constitutes a particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by any person by reason" specifically "of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision." In other words, Art. 1, sec. 4, R.A. No. 409 refers to liability arising from negligence, in general, regardless of the object, thereof, while Article 2189 of the Civil Code governs liability due to "defective streets, public buildings and other public works" in particular and is therefore decisive on this specific case. In the same suit, the Supreme Court clarified further that under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach, that the defective public works belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality has either "control or supervision" over the public building in question. cdphil In the case at bar, there is no question that the Sta. Ana Public Market, despite the Management and Operating Contract between respondent City and Asiatic Integrated Corporation remained under the control of the former. For one thing, said contract is explicit in this regard, when it provides: "II That immediately after the execution of this contract, the SECOND PARTY shall start the painting, cleaning, sanitizing and repair of the public markets and talipapas and within ninety (90) days thereof, the SECOND PARTY shall submit a program of improvement, development, rehabilitation and reconstruction of the city public markets and talipapas subject to prior approval of the FIRST PARTY. (Rollo, p. 44) xxx xxx xxx "VI That all present personnel of the City public markets and talipapas shall be retained by the SECOND PARTY as long as their services remain satisfactory and they shall be extended the same rights and privileges as heretofore enjoyed by them. Provided, however, that the SECOND PARTY shall have the right, subject to prior approval of the FIRST PARTY to discharge any of the present employees for cause. (Rollo, p. 45). "VII That the SECOND PARTY may from time to time be required by the FIRST PARTY, or his duly authorized representative or representatives, to report on the activities and operation of the City public markets and talipapas and the facilities and conveniences installed therein, particularly as to their cost of construction, operation and maintenance in connection with the stipulations contained in this Contract." ( Ibid.) The fact of supervision and control of the City over subject public market was admitted by Mayor Ramon Bagatsing in his letter to Secretary of Finance Cesar Virata which reads: "These cases arose from the controversy over the Management and Operating Contract entered into on December 28, 1972 by and between the City of Manila and the Asiatic Integrated Corporation, whereby in consideration of a

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fixed service fee, the City hired the services of the said corporation to undertake the physical management, maintenance, rehabilitation and development of the City's public markets and 'Talipapas' subject to the control and supervision of the City.

xxx xxx xxx "It is believed that there is nothing incongruous in the exercise of these powers vis-a-vis the existence of the contract, inasmuch as the City retains the power of supervision and control over its public markets and talipapas under the terms of the contract." (Exhibit 7-A.) (Emphasis supplied.) (Rollo, p. 75). In fact, the City of Manila employed a market master for the Sta. Ana Public Market whose primary duty is to take direct supervision and control of that particular market, more specifically, to check the safety of the place for the public. Thus the Asst. Chief of the Market Division and Deputy Market Administrator of the City of Manila testified as follows: "CourtThis market master is an employee of the City of Manila? Mr.Ymson Yes, Your Honor. QWhat are his functions? ADirect supervision and control over the market area assigned to him." (T.s.n., pp. 41-42, Hearing of May 20, 1977.) xxx xxx xxx "CourtAs far as you know there is or is there any specific employee assigned with the task of seeing to it that the Sta. Ana Market is safe for the public? "Mr. YmsonActually, as I stated, Your Honor, that the Sta. Ana has its own market master. The primary duty of that market master is to make the direct supervision and control of that particular market, the check or verifying whether the place is safe for public safety is vested in the market master." (T.s.n., pp. 24-25, Hearing of July 27, 1977.) (Emphasis supplied.) (Rollo, p. 76). Finally, Section 30 (g) of the Local Tax Code as amended, provides: "The treasurer shall exercise direct and immediate supervision, administration and control over public markets and the personnel thereof, including those whose duties concern the maintenance and upkeep of the market and ordinances and other pertinent rules and regulations." (Emphasis supplied.) (Rollo, p. 76) The contention of respondent City of Manila that petitioner should not have ventured to go to Sta. Ana Public Market during a stormy weather is indeed untenable. As observed by respondent Court of Appeals, it is an error for the trial court to attribute the negligence to herein petitioner. More specifically stated, the findings of appellate court are as follows: ". . . The trial court even chastised the plaintiff for going to market on a rainy day just to buy bagoong. A customer in a store has the right to assume that the owner will comply with his duty to keep the premises safe for customers. If he ventures to the store on the basis of such assumption and is injured because the owner and not comply with his duty, no negligence can be imputed to the customer." (Decision, AC-G.R. CV No. 01387, Rollo, p. 19). As a defense against liability on the basis of a quasi-delict, one must have exercised the diligence of a good father of a family. (Art. 1173 of the Civil Code). There is no argument that it is the duty of the City of Manila to exercise reasonable care to keep the public market reasonably safe for people frequenting the place for their marketing needs. While it may be conceded that the fulfillment of such duties is extremely difficult during storms and floods, it must however, be admitted that ordinary precautions could have been taken during good weather to minimize the dangers to life and limb under those difficult circumstances. LLjur For instance, the drainage hole could have been placed under the stalls instead of on the passage ways. Even more important is the fact, that the City should have seen to it that the openings were covered. Sadly, the evidence indicates that long before petitioner fell into the opening, it was already uncovered, and five (5) months after the incident happened, the opening was still uncovered. (Rollo, pp. 57; 59). Moreover, while there are findings that during floods the vendors remove the iron grills to hasten the flow of water (Decision, AC-G.R. CV No. 01387; Rollo, p. 17), there is no showing that such practice has ever been prohibited, much less penalized by the City of Manila. Neither was it shown that any sign had been placed thereabouts to warn passers-by of the impending danger. To recapitulate, it appears evident that the City of Manila is likewise liable for damages under Article 2189 of the Civil Code, respondent City having retained control and supervision over the Sta. Ana Public Market and as tort-feasor under Article 2176 of the Civil Code on quasi-delicts.

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Petitioner had the right to assume that there were no openings in the middle of the passageways and if any, that they were adequately covered. Had the opening been covered, petitioner could not have fallen into it. Thus the negligence of the City of Manila is the proximate cause of the injury suffered, the City is therefore liable for the injury suffered by the petitioner. Respondent City of Manila and Asiatic Integrated Corporation being joint tort-feasors, are solidarily liable under Article 2194 of the Civil Code. PREMISES CONSIDERED, the decision of the Court of Appeals is hereby MODIFIED, making the City of Manila and the Asiatic Integrated Corporation solidarily liable to pay the plaintiff P221.90 actual medical expenses, P900.00 for the amount paid for the operation and management of the school bus, P20,000.00 as moral damages due to pain, sufferings and sleepless nights and P10,000.00 as attorney's fees. SO ORDERED. Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes, JJ., concur.

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EN BANC [G.R. No. L-23052. January 29, 1968.] CITY OF MANILA, petitioner, vs. GENERO M. TEOTICO and THE COURT OF APPEALS , respondents.

City Fiscal Manuel T. Reyes for petitioner. Sevilla, Daza & Associates for respondents.

SYLLABUS 1.STATUTORY CONSTRUCTION; SPECIFIC PROVISIONS OF CIVIL CODE, THOUGH A GENERAL LAW, PREVAIL OVER MANILA CHARTER, SPECIAL LAW. Insofar as its territorial application is concerned, Republic Act 409 is a special law and the Civil Code is a general legislation; but as regards the subject-matter of the provisions of sec. 4, Rep. Act 409 and Article 2189 of the Civil Code, the former establishes a general rule regulating the liability of the City of Manila for damages or injury to persons or property arising from the failure of city officers to enforce the provisions of said Act; while article 2189 of the Civil Code constitutes a particular prescription making provinces, cities and municipalities liable for damages for the death or injury suffered by any person by reason of the defective condition of roads, streets and other public works under the control or supervision of said municipal governments. In other words, sec. 4 of Rep. Act 409 refers to liability arising from negligence in general regardless of the object thereof, whereas Article 2189 of the Civil Code, governs liability due to defective streets in particular. The Civil Code is decisive herein because the present action is based on the alleged defective condition of a road. 2.PLEADINGS; ANSWER; ALLEGATIONS NOT SET FORTH IN ANSWER, CANNOT BE RAISED FOR FIRST TIME ON APPEAL. The assertion that P. Burgos Avenue is a national highway for which the City of Manila is not liable, was made for the first time in the petitioner's motion for reconsideration of the decision of the Court of Appeals. It was not alleged in the answer. Such assertion raised a question of fact which had not been put in issue in the trial court and cannot, therefore, be raised for the first time on appeal much less after the rendition of the decision of the appellate court. 3.ID.; FINDINGS OF FACT OF COURT OF APPEALS, CONCLUSIVE. The determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence in connection with the maintenance of said road is a question of fact a question already decided by the Court of Appeals and the factual findings of said Court are not subject to a review by the Supreme Court.

DECISION

CONCEPCION, C.J p: Appeal by certiorari from a decision of the Court of Appeals. On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P. Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting for about five minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted catchbasin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons came to his assistance and pulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital, where his injuries were treated, after which he was taken home. In addition to the lacerated wound in his left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip, apart from an abrasion on the right infra-patella region. These injuries and the allergic eruptions caused by anti-tetanus injections administered to him in the hospital, required further medical treatment by a private practitioner who charged therefor P1,400.00. As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila, a complaint which was, subsequently, amended for damages against the City of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police. As stated in the decision of the trial court, and quoted with approval by the Court of Appeals, "At the time of the incident, plaintiff was a practicing public accountant, a businessman and a professor at the University of the East. He held responsible positions in various business firms like the Philippine Merchandising Co., the A. U. Valencia and Co., the Silver Swan Manufacturing Company and the Sincere Packing Corporation. He was also associated with several civic organizations such as the Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manila and the Knight's of Rizal. As a result of the incident, plaintiff was prevented from engaging in his customary occupation for twenty days. Plaintiff has lost a daily income of about P50.00 during his incapacity to work. Because of the incident, he was subjected to humiliation and ridicule by his business associates and friends. During the period of his treatment, plaintiff was under constant fear and anxiety for the welfare of his minor children since he was their only support. Due to the filing of this case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00. "On the other hand, the defense presented evidence, oral and documentary, to prove that the Storm Drain Section, Office of the City Engineer of Manila, received a report of the uncovered condition of a catchbasin at the corner of

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P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but the same was covered on the same day (Exhibit 4); that again the iron cover of the same catchbasin was reported missing on January 30, 1958, but the said cover was replaced the next day (Exhibit 5); that the Office of the City Engineer never received any report to the effect that the catchbasin in question was not covered between January 25 and 29, 1958; that it has always been a policy of the said office, which is charged with the duty of installation, repair and care of storm drains in the City of Manila, that whenever a report is received from whatever source of the loss of a catchbasin cover, the matter is immediately attended to, either by immediately replacing the missing cover or covering the catchbasin with steel matting; that because of the lucrative scrap iron business then prevailing, stealing of iron catchbasin covers was rampant; that the Office of the City Engineer has filed complaints in court resulting from theft of said iron covers; that in order to prevent such thefts, the city government has changed the position and layout of catch basins in the City by constructing them under the sidewalk with concrete cement covers and openings on the sides of the gutter; and that these changes had been undertaken by the city from time to time whenever funds were available." After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned decision sustaining the theory of the defendants and dismissing the amended complaint, without costs. On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the City of Manila is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00. 1 Hence, this appeal by the City of Manila. The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act No. 409 (Charter of the City of Manila) reading: "The city shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." or by Article 2189 of the Civil Code of the Philippines, which provides: "Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision." Manila maintains that the former provision should prevail over the latter, because Republic Act 409 is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines. The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as regards the subject- matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila for "damages or injury to persons or property arising from the failure of" city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by, any person by reason" specifically "of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision ." In other words, said section 4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets, "in particular. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon. It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving him took place in a national highway; and 2) because the City of Manila has not been negligent in connection therewith.

As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the City. Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were due to the defective condition of a street which is "under the supervision and control" of the City. In its answer to the amended complaint, the City, in turn, alleged that "the streets aforementioned were and have been constantly kept in good condition and regularly inspected and the storm drains and manholes thereof covered, by the defendant City and its officers concerned" who "have been ever vigilant and zealous in the performance of their respective functions and duties as imposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and is under its control and supervision. Moreover, the assertion to the effect that said avenue is a national highway was made, for the first time, in its motion for reconsideration of the decision of the Court of Appeals. Such assertion raised, therefore, a question of fact, which had not been put in issue in the trial court, and can not be set up, for the first time, on appeal, much less after the rendition of the decision of the appellate court, in a motion for the reconsideration thereof. At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the defective roads or streets belongto the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality have either "control or supervision" over said street or road. Even if P. Burgos avenue were, therefore, a national highway, this circumstance would not necessarily detract from its "control or supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x) thereof provides: "SEC. 18.Legislative powers. The Municipal Board shall have the following legislative powers:

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xxx xxx xxx "(x)Subject to the provisions of existing law to provide for the laying out, construction and improvement, and to regulate the use of streets, avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places; to provide for lighting, cleaning, and sprinkling of streets and public places; . . . to provide for the inspection of, fix the license fees for and regulate the openings in the same for the laying of gas, water, sewer and other pipes, the building and repair of tunnels, sewers, and drains, and all structures in and under the same and the erecting of poles and the stringing of wires therein; to provide for and regulate cross-walks, curbs, and gutters therein; . . . to regulate traffic and sales upon the streets and other public places; to provide for the abatement of nuisances in the same and punish the authors or owners thereof; to provide for the construction and maintenance, and regulate the use, of bridges, viaducts, and culverts; to prohibit and regulate ball playing, kiteflying, hoop rolling, and other amusements which may annoy persons using the streets and public places, or frighten horses or other animals; to regulate the speed of horses and other animals, motor and other vehicles, cars, and locomotives within the limits of the city; to regulate the lights used on all such vehicles, cars, and locomotives; . . . to provide for and change the location, grade, and crossing of railroads, and compel any such railroad to raise or lower its tracks to conform to such provisions or changes; and to require railroad companies to fence their property, or any part thereof, to provide suitable protection against injury to persons or property , and to construct and repair ditches, drains, sewers, and culvertsalong and under their tracts, so that the natural drainage of the streets and adjacent property shall not be obstructed." This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the highway funds and the giving of aid to provinces, chartered cities and municipalities in the construction of roads and streets within their respective boundaries, and Executive Order No. 113 merely implements the provisions of said Republic Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it provides that "the construction, maintenance and improvement of national primary, national secondary and national aid provincial and city roads shall be accomplished by the Highway District Engineers and Highway City Engineers under the supervision of the Commissioner of Public Highways and shall be financed from such appropriations as may be authorized by the Republic of the Philippines in annual or special appropriation Acts." Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road, which were decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court, thereon are not subject to our review. WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of Manila. It is so ordered. Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Ruiz Castro, Angeles and Fernando, JJ., concur.

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SECOND DIVISION [G.R. No. 61516. March 21, 1989.] FLORENTINA A. GUILATCO, petitioner, vs. CITY OF DAGUPAN, and the HONORABLE COURT OF APPEALS, respondents.

Nolan R. Evangelista for petitioner. The City Legal Officer for respondents.

SYLLABUS 1.CIVIL LAW; QUASI-DELICTS; ARTICLE 2189 OF NEW CIVIL CODE; NOT NECESSARY FOR DEFECTIVE ROAD OR STREET TO BELONG TO PROVINCE, CITY OR MUNICIPALITY FOR LIABILITY TO ATTACH; ARTICLE ONLY REQUIRES THAT EITHER CONTROL OR SUPERVISION IS EXERCISED OVER DEFECTIVE ROAD OR STREET. It is not even necessary for the defective road or street to belong to the province, city or municipality for liability to attach. The article only requires that either control or supervision is exercised over the defective road or street. cdasia 2.ID.; ID.; ID.; APPLIES IN PARTICULAR TO LIABILITY ARISING FROM "DEFECTIVE STREETS, PUBLIC BUILDINGS AND OTHER PUBLIC WORKS"; CHARTER ONLY LAYS DOWN GENERAL RULES REGULATING LIABILITY OF CITY. The charter only lays down general rules regulating the liability of the city. On the other hand article 2189 applies in particular to the liability arising from "defective streets, public buildings and other public works." 3.ID.; DAMAGES; ACTUAL DAMAGES; AMOUNT MAY NOT BE BASED ON "SPECULATION, CONJECTURE OR GUESS WORK"; WITHOUT ACTUAL PROOF OF LOSS, AWARD BECOMES ERRONEOUS. The actual damages awarded to the petitioner in the amount of P10,000.00 should be reduced to the proven expenses of P8,053.65 only. The trial court should not have rounded off the amount. In determining actual damages, the court can not rely on "speculation, conjecture or guess works as to the amount. Without the actual proof of loss, the award of actual damages becomes erroneous. 4.ID.; ID.; MORAL DAMAGES; MAY BE AWARDED EVEN WITHOUT PROOF OF PECUNIARY LOSS AS DETERMINATION OF AMOUNT IS DISCRETIONARY ON COURT; NATURE, EXPLAINED. Moral damages may be awarded even without proof of pecuniary loss, inasmuch as the determination of the amount is discretionary on the court. Though incapable of pecuniary estimation, moral damages are in the nature of an award to compensate the claimant for actual injury suffered but which for some reason can not be proven. 5.ID.; ID.; ID.; REQUISITES THEREOF, CITED. In awarding moral damages, the following should be taken into consideration: (1) First, the proximate cause of the injury must be the claimee's acts. (2) Second, there must be compensatory or actual damages as satisfactory proof of the factual basis for damages. (3) Third, the award of moral damages must be predicated on any of the cases enumerated in the Civil Code. cda 6.ID.; ID.; ID.; AWARD OF DAMAGES WITHOUT BASIS RESULTING IN EXHORBITANT AMOUNTS, REPREHENSIBLE; EXCESSIVE DAMAGES, REDUCED. The award of moral damages at P150,000.00 is excessive. Her handicap was not permanent and disabled her only during her treatment which lasted for one year. Though evidence of moral loss and anguish existed to warrant the award of damages, the moderating hand of the law is called for. The Court has time and again called attention to the reprehensible propensity of trial judges to award damages without basis, resulting in exhorbitant amounts. Although the assessment of the amount is better left to the discretion of the trial court, under preceding jurisprudence, the amount of moral damages should be reduced to P20,000.00.

DECISION

SARMIENTO, J p: In a civil action 1 for recovery of damages filed by the petitioner Florentina A. Guilatco, the following judgment was rendered against the respondent City of Dagupan: xxx xxx xxx (1)Ordering defendant City of Dagupan to pay plaintiff, actual damages in the amount of P15,924 (namely P8,054.00 as hospital, medical and other expenses [Exhs. H to H-60], P7,420.00 as lost income for one (1) year [Exh. F] and P450.00 as bonus). P150,000.00 as moral damages, P50,000.00 as exemplary damages, and P3,000.00 as attorney's fees, and litigation expenses, plus costs and to appropriate through its Sangguniang Panglunsod (City Council) said amounts for said purpose; (2)Dismissing plaintiff's complaint as against defendant City Engr. Alfredo G. Tangco; and

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(3)Dismissing the counterclaims of defendant City of Dagupan and defendant City Engr. Alfredo G. Tangco, for lack of merit. 2 The facts found by the trial court are as follows: 3 It would appear from the evidences that on July 25, 1978, herein plaintiff, a Court Interpreter of Branch III, CFIDagupan City, while she was about to board a motorized tricycle at a sidewalk located at Perez Blvd. (a National Road, under the control and supervision of the City of Dagupan) accidentally fell into a manhole located on said sidewalk, thereby causing her right leg to be fractured. As a result thereof, she had to be hospitalized, operated on, confined, at first at the Pangasinan Provincial Hospital, from July 25 to August 3, 1978 (or for a period of 16 days). She also incurred hospitalization, medication and other expenses to the tune of P8,053.65 (Exh. H to H-60) or a total of P10,000.00 in all, as other receipts were either lost or misplaced; during the period of her confinement in said two hospitals, plaintiff suffered severe or excruciating pain not only on her right leg which was fractured but also on all parts of her body; the pain has persisted even after her discharge from the Medical City General Hospital on October 9, 1978, to the present. Despite her discharge from the Hospital plaintiff is presently still wearing crutches and the Court has actually observed that she has difficulty in locomotion. From the time of the mishap on July 25, 1978 up to the present, plaintiff has not yet reported for duty as court interpreter, as she has difficulty of locomotion in going up the stairs of her office, located near the city hall in Dagupan City. She earns at least P720.00 a month consisting of her monthly salary and other means of income, but since July 25, 1978 up to the present she has been deprived of said income as she has already consumed her accrued leaves in the government service. She has lost several pounds as a result of the accident and she is no longer her former jovial self; she has been unable to perform her religious, social, and other activities which she used to do prior to the incident. Dr. Norberto Felix and Dr. Dominado Manzano of the Provincial Hospital, as well as Dr. Antonio Sison of the Medical City General Hospital in Mandaluyong Rizal (Exh. I; see also Exhs. F, G, G-1 to G-19) have confirmed beyond shadow of any doubt the extent of the fracture and injuries sustained by the plaintiff as a result of the mishap. On the other hand, Patrolman Claveria, De Asis and Cerezo corroborated the testimony of the plaintiff regarding the mishap and they have confirmed the existence of the manhole (Exhs. A, B, C and sub-exhibits) on the sidewalk along Perez Blvd., at the time of the incident on July 25, 1978 which was partially covered by a concrete flower pot by leaving gaping hole about 2 ft. long by 1 1/2 feet wide or 42 cms. wide by 75 cms. long by 150 cms. deep (see Exhs. D and D-1). Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-officio Highway Engineer, City Engineer of the Public Works and Building Official for Dagupan City, admitted the existence of said manhole along the sidewalk in Perez Blvd., admittedly a National Road in front of the Luzon Colleges. He also admitted that said manhole (there are at least 11 in all in Perez Blvd.) is owned by the National Government and the sidewalk on which they are found along Perez Blvd. are also owned by the National Government. But as City Engineer of Dagupan City, he supervises the maintenance of said manholes or drainage system and sees to it that they are properly covered, and the job is specifically done by his subordinates, Mr. Santiago de Vera (Maintenance Foreman) and Engr. Ernesto Solermo, also a maintenance Engineer. In his answer defendant Tangco expressly admitted in par. 7-1 thereof, that in his capacity as ex-officio Highway Engineer for Dagupan City he exercises supervision and control over National roads, including the Perez Blvd. where the incident happened. Cdpr On appeal by the respondent City of Dagupan, the appellate court 4 reversed the lower court findings on the ground that no evidence was presented by the plaintiff-appellee to prove that the City of Dagupan had "control or supervision" over Perez Boulevard. 5 The city contends that Perez Boulevard, where the fatal drainage hole is located, is a national road that is not under the control or supervision of the City of Dagupan. Hence, no liability should attach to the city. It submits that it is actually the Ministry of Public Highways that has control or supervision through the Highway Engineer which, by mere coincidence, is held concurrently by the same person who is also the City Engineer of Dagupan. After examination of the findings and conclusions of the trial court and those of the appellate court, as well as the arguments presented by the parties, we agree with those of the trial court and of the petitioner. Hence, we grant the petition. In this review on certiorari, we have simplified the errors assigned by the petitioner to a single issue: whether or not control or supervision over a national road by the City of Dagupan exists, in effect binding the city to answer for damages in accordance with article 2189 of the Civil Code. The liability of public corporations for damages arising from injuries suffered by pedestrians from the defective condition of roads is expressed in the Civil Code as follows: Article 2189.Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. It is not even necessary for the defective road or street to belong to the province, city or municipality for liability to attach. The article only requires that either control or supervision is exercised over the defective road or street. 6

In the case at bar, this control or supervision is provided for in the charter of Dagupan and is exercised through the City Engineer who has the following duties:

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Sec. 22.The City Engineer His powers, duties and compensation There shall be a city engineer, who shall be in charge of the department of Engineering and Public Works. He shall receive a salary of not exceeding three thousand pesos per annum. He shall have the following duties: cdrep xxx xxx xxx (j)He shall have the care and custody of the public system of waterworks and sewers, and all sources of water supply, and shall control, maintain and regulate the use of the same, in accordance with the ordinance relating thereto; shall inspect and regulate the use of all private systems for supplying water to the city and its inhabitants, and all private sewers, and their connection with the public sewer system. xxx xxx xxx The same charter of Dagupan also provides that the laying out, construction and improvement of streets, avenues and alleys and sidewalks, and regulation of the use thereof, may be legislated by the Municipal Board. 7 Thus the charter clearly indicates that the city indeed has supervision and control over the sidewalk where the open drainage hole is located. The express provision in the charter holding the city not liable for damages or injuries sustained by persons or property due to the failure of any city officer to enforce the provisions of the charter, can not be used to exempt the city, as in the case at bar. 8 The charter only lays down general rules regulating the liability of the city. On the other hand article 2189 applies in particular to the liability arising from "defective streets, public buildings and other public works. 9 The City Engineer, Mr. Alfredo G. Tangco, admits that he exercises control or supervision over the said road. But the city can not be excused from liability by the argument that the duty of the City Engineer to supervise or control the said provincial road belongs more to his functions as an ex-officio Highway Engineer of the Ministry of Public Highway than as a city officer. This is because while he is entitled to an honorarium from the Ministry of Public Highways, his salary from the city government substantially exceeds the honorarium. We do not agree. Alfredo G. Tangco "(i)n his official capacity as City Engineer of Dagupan, as Ex-Officio Highway Engineer, as Ex-Officio City Engineer of the Bureau of Public Works, and, last but not the least, as Building Official for Dagupan City, receives the following monthly compensation: P1,810.66 from Dagupan City; P200.00 from the Ministry of Public Highways; P100.00 from the Bureau of Public Works and P500.00 by virtue of P.D. 1096, respectively." 10 This function of supervision over streets, public buildings, and other public works pertaining to the City Engineer is coursed through a Maintenance Foreman and a Maintenance Engineer. 11 Although these last two officials are employees of the National Government, they are detailed with the City of Dagupan and hence receive instruction and supervision from the city through the City Engineer. LLphil There is, therefore, no doubt that the City Engineer exercises control or supervision over the public works in question. Hence, the liability of the city to the petitioner under article 2198 of the Civil Code is clear. Be all that as it may, the actual damages awarded to the petitioner in the amount of P10,000.00 should be reduced to the proven expenses of P8,053.65 only. The trial court should not have rounded off the amount. In determining actual damages, the court can not rely on "speculation, conjecture or guess works as to the amount. Without the actual proof of loss, the award of actual damages becomes erroneous. 12 On the other hand, moral damages may be awarded even without proof of pecuniary loss, inasmuch as the determination of the amount is discretionary on the court. 13 Though incapable of pecuniary estimation, moral damages are in the nature of an award to compensate the claimant for actual injury suffered but which for some reason can not be proven. However, in awarding moral damages, the following should be taken into consideration: (1)First, the proximate cause of the injury must be the claimee's acts. 14 (2)Second, there must be compensatory or actual damages as satisfactory proof of the factual basis for damages. 15 (3)Third, the award of moral damages must be predicated on any of the cases enumerated in the Civil Code. 1 6 In the case at bar, the physical suffering and mental anguish suffered by the petitioner were proven. Witnesses from the petitioner's place of work testified to the degeneration in her disposition from being jovial to depessed. She refrained from attending social and civic activities. 17 Nevertheless the award of moral damages at P150,000.00 is excessive. Her handicap was not permanent and disabled her only during her treatment which lasted for one year. Though evidence of moral loss and anguish existed to warrant the award of damages, 18 the moderating hand of the law is called for. The Court has time and again called attention to the reprehensible propensity of trial judges to award damages without basis, 19 resulting in exhorbitant amounts. 20 Although the assessment of the amount is better left to the discretion of the trial court, 21 under preceding jurisprudence, the amount of moral damages should be reduced to P20,000.00. cdasia As for the award of exemplary damages, the trial court correctly pointed out the basis:

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To serve as an example for the public good, it is high time that the Court, through this case, should serve warning to the city or cities concerned to be more conscious of their duty and responsibility to their constituents, especially when they are engaged in construction work or when there are manholes on their sidewalks or streets which are uncovered, to immediately cover the same, in order to minimize or prevent accidents to the poor pedestrians. 22 Too often in the zeal to put up "public impact" projects such as beautification drives, the end is more important than the manner in which the work is carried out. Because of this obsession for showing off, such trivial details as misplaced flower pots betray the careless execution of the projects, causing public inconvenience and inviting accidents. Pending appeal by the respondent City of Dagupan from the trial court to the appellate court, the petitioner was able to secure an order for garnishment of the funds of the City deposited with the Philippine National Bank, from the then presiding judge, Hon. Willelmo Fortun. This order for garnishment was revoked subsequently by the succeeding presiding judge, Hon. Romeo D. Magat, and became the basis for the petitioner's motion for reconsideration which was also denied. 23 We rule that the execution of the judgment of the trial court pending appeal was premature. We do not find any good reason to justify the issuance of an order of execution even before the expiration of the time to appeal. 24 WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the respondent Court of Appeals are hereby REVERSED and SET ASIDE and the decision of the trial court, dated March 12, 1979 and amended on March 13, 1979, is hereby REINSTATED with the indicated modifications as regards the amounts awarded: cdphil (1)Ordering the defendant City of Dagupan to pay the plaintiff actual damages in the amount of P15,924 (namely P8,054.00 as hospital, medical and other expenses; P7,420.00 as lost income for one (1) year and P450.00 as bonus); P20,000.00 as moral damages and P10,000.00 as exemplary damages. The attorney's fees of P3,000.00 remain the same. SO ORDERED. Melencio-Herrera, Paras, Padilla and Regalado, JJ ., concur.

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