ObliCon Article 1169-1173 (Ek Le Steel - MMTC)
ObliCon Article 1169-1173 (Ek Le Steel - MMTC)
defendants. Hence, for its failure to discharge the burden of proof required in
Note.—In an action for forcible entry, the plaintiff must prove that he this case, petitioner’s complaint must be dismissed.
was in prior possession of the land or building and that he was deprived PETITION for review on certiorari of a decision of the Court of Appeals.
thereof by means of force, intimidation, threat, strategy or stealth. (Gaza vs. The facts are stated in the opinion of the Court.
Lim, 395 SCRA 261 [2003]) Crisanto, Salvador, Calderon and Associates for petitioner.
——o0o—— Tan, Ventura Law Offices for respondent Romy Lim.
Tomas Carmelo T. Araneta for respondent Manila Castor Oil
Corporation.
CARPIO, J.:
G.R. No. 119033. July 9, 2008.*
EK LEE STEEL WORKS CORPORATION, petitioner, vs. MANILA The Case
CASTOR OIL CORPORATION, ROMY LIM, and THE COURT OF
APPEALS, respondents. Before this Court is a petition for review1 of the Decision2 dated 7
Civil Law; Contracts; Obligations; Novation; Court finds no novation of February 1995 of the Court of Appeals in CA-G.R. CV No. 34743. The Court
the previous agreements between the parties.—The Court finds no novation of of Appeals reversed the decision3 of the
the previous agreements between the parties considering that the 16 May _______________
1988 letter did not expressly extinguish the parties’ obligations under their
previous contracts. On the contrary, it expressly recognized the parties’ 1 Under Rule 45 of the Rules of Court.
reciprocal obligations. 2 Rollo, pp. 41-54. Penned by Associate Justice Cezar D. Francisco with
Same; Same; Same; In reciprocal obligations, neither party incurs in Associate Justices Delilah Vidallon Magtolis and Celia Lipana-Reyes,
delay if the other does not comply or is not ready to comply in a proper concurring.
manner with what is incumbent upon him.—Considering the foregoing, there 3 Id., at pp. 55-67. Penned by Judge Mauro T. Allarde.
is no doubt that petitioner failed to comply with its undertaking to complete 341
the project, except the office building, on 15 June 1988. Consequently, VOL. 557, JULY 9, 2008 341
respondent’s obligation to pay the P200,000 did not arise. Respondent could Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
not be considered in delay when it failed to pay petitioner at that time. Regional Trial Court, Branch 123, Kalookan City in a collection suit filed by
According to the last paragraph of Article 1169 of the Civil Code, “[i]n Ek Lee Steel Works Corporation against Manila Castor Oil Corporation and
reciprocal obligations, neither party incurs in delay if the other does not Romy Lim.
comply or is not ready to comply in a proper manner with what is incumbent
_______________ The Antecedents
* FIRST DIVISION. Ek Lee Steel Works Corporation (petitioner) is engaged in the
340 construction business while Manila Castor Oil Corporation (respondent)
3 SUPREME COURT REPORTS ANNOTATED claims to be a pioneer in the castor oil industry with Romy Lim (Lim) as its
40 President.
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation In November 1987, respondent contracted petitioner for the construction
upon him. From the moment one of the parties fulfills his obligation, of respondent’s castor oil plant and office complex in Sasa, Davao City.
delay by the other begins.” Petitioner agreed to undertake the construction of the following structures
Remedial Law; Actions; Evidence; The plaintiff must rely on the with their respective costs:
strength of its own evidence and not upon the weakness of that of the Project Price
defendants.—The loss of the probative value of the Alindada Report due to I. Office Building (Building I) and Boiler Room P2,000,000
petitioner’s admissions and respondent’s unrefuted evidences, as discussed II. Concrete Fence 10-feet-high on three sides of the P 283,6624
above, renders petitioner’s claim for the remaining balance of the contract
factory site
price unsubstantiated. Without any corroborating evidence, petitioner’s
allegations are plainly without weight. The plaintiff must rely on the III. 20-meter x 52-meter Concrete Pavement P 318,800
strength of its own evidence and not upon the weakness of that of the IV. 90,000-gallon Steel Oil Tank with Stand P 472,500
V. 40-feet-high 10,000-gallon Water Tank P 103,556.60 5 Exhibit “K,” Folder of Exhibits, Vol. I, p. 32.
6 Exhibit “J,” id., at p. 31.
VI. Steel Oil Tank Foundation P 175,650
343
VII. 40-ton Oil Tank P 88,837
VOL. 557, JULY 9, 2008 343
_______________
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
4 A handwritten figure was superimposed on the letter-contract the contracted work. As per the terms of our contract we will keep the
signifying that the contract price is only P283,662 instead of P387,280. P340,000.00 which represent the 10% retention.
Based on Section 15, Rule 130 of the Rules of Court, when an instrument Yours truly,
consists partly of written words and partly of a printed form, and the two are R.T. LIM
inconsistent, the former controls the latter. President
342 Conforme:
342 SUPREME COURT REPORTS ANNOTATED Mr. Danny Ang
Date: signed
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation On 5 July 1988, respondent paid petitioner P70,000.
Under the seven letter-agreements, respondent would make various Sometime thereafter, petitioner allegedly demanded payment of
stipulated down payments upon approval of petitioner’s proposals. The respondent’s remaining balance, but to no avail. Hence, petitioner stopped
remaining balance of the contract prices was payable to petitioner through its construction in the project site. Thereafter, petitioner requested the
progress billings. Office of the City Engineer of Davao City to conduct an ocular inspection of
In April 1988, petitioner alleged that respondent verbally agreed to have the project site to determine the percentage of its finished work. Engineer
another building (Building II-Warehouse) constructed on the project site Demetrio C. Alindada of the Davao Engineering Office reported that most of
worth P349,249.25. Respondent denied the existence of this contract because the scope of the work items were 100% completed.
it never approved such contract. Therefore, petitioner discontinued its On 4 November 1988, petitioner filed a collection suit against respondent
construction of Building II-Warehouse after finishing its foundation and two and Lim, with an application for a writ of preliminary attachment. The
side walls. complaint prayed, among others, that respondent and Lim be held jointly
On 16 May 1988, petitioner submitted a Statement of Account to and severally liable for the amount of P1,623,013.81 with interest.
respondent showing respondent’s accumulated payables totaling In their answer filed on 23 December 1988, respondents jointly alleged,
P764,466.5 Respondent paid P500,000 as shown in a letter of even date. In as an affirmative defense, that as of 16 May 1988, petitioner was already in
the same letter, respondent promised to pay certain amounts thereafter delay. They claimed that petitioner abandoned the project on 16 July 1988.
upon the completion of specific portions of the project. The full text of the Respondents further alleged that certain portions of the construction work
letter dated 16 May 19886 reads: did not conform to the specifications agreed upon by the parties.
May 16, 1988 Then, on 8 May 1990, respondents filed a Supplemental Answer, alleging
MR. DANNY ANG that sometime in July 1989, the 90,000-gallon capacity oil tank tilted
General Manager towards the sea resulting in the stoppage of respondent’s operations.
Ek Lee Steel Works Corp. Consequently, respon-344
#171 5th St., 8th Avenue
344 SUPREME COURT REPORTS ANNOTATED
Caloocan City, M.M.
SUBJECT: FIFTH PARTIAL PAYMENT OF P500,000.00 Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
Dear Danny, dents were constrained to hire a contractor to remedy the damage caused by
This is to confirm that upon payment of the subject above, the fifth (5) the poor and substandard installation of the oil tank. Respondents prayed
partial payment which represent 70.5% of the total project cost of 3.4 for the payment of surveyor’s fee, contractor’s fee, operating expenses, and
Million, you will have to accomplished [sic] all the contracted work by June unrealized income during the shut-down period.
15, 1988, except the office building. Thereafter, we will pay you the 6th During the trial, respondents presented as evidence a Technical
partial payment with the amount of P200,000.00. And upon the completion Verification Report submitted by Engineer Raul D. Moralizon to prove that
of the office building we will then pay you the amount of P460,000.00 which the project was incomplete and had no utility value at the time petitioner
will represent 90% of abandoned the project.
_______________
The Ruling of the Trial Court
The trial court ruled in favor of petitioner. The trial court held that 4. Costs of the suit.
petitioner was justified in abandoning its construction of the project. As of 5 Defendants’ counterclaims are hereby dismissed for lack of merit.
July 1988, when respondent paid P70,000, petitioner’s billings reached SO ORDERED.”7
P3,895,872.85, while payments totaled only P2,505,534, or short by _______________
P1,390,338.85, exclusive of other charges. Considering respondent’s non-
payment of this remaining balance, petitioner was understandably unwilling 7 Rollo, pp. 66-67.
to proceed with the construction of the project. Respondent’s non-payment 346
was a clear violation of the stipulated progress billings. 346 SUPREME COURT REPORTS ANNOTATED
The trial court likewise noted petitioner’s request for an inspection from
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
the Engineering Office of Davao City prior to the issuance of an occupancy
The Ruling of the Court of Appeals
permit. The trial court declared that “no contractor who has unreasonably
The Court of Appeals reversed the decision of the trial court. The
abandoned a job ever bothered itself making such a request; an abandoning
appellate court ruled that the 16 May 1988 letter novated all the earlier
contractor just packs up and goes.” In addition, the trial court found that
agreements between the parties. It held that the letter specified the scope of
respondent never reported the supposed “abandonment” to the Engineering
the remaining construction work, the amounts payable by respondent, and
Office of Davao City. Neither did respondent send a notice or letter
the schedules for the completion of the remaining work and for the
demanding the completion of the project. Had there been abandonment,
corresponding payments.
respondent would have filed a suit against petitioner.
The Court of Appeals stated that petitioner was not entitled to further
On the “modifying” agreement dated 16 May 1988, the trial court found the
payments from respondent because petitioner failed to comply with its
parties’ diametrically-opposed versions equally true. Respondent claimed
obligation of finishing all the contracted work, except the office building, on
that it gave petitioner an extension of the deadline until 15 June 1988. On
15 June 1988 as clearly stipulated in the 16 May 1988 letter.
the other345
The Court of Appeals found that the petitioner’s failure to complete the
VOL. 557, JULY 9, 2008 345 project rendered the same useless for the object which the parties had
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation intended it to be, specifically, an office, plant, and warehouse complex.
hand, petitioner insisted that it gave respondent an equivalent extension to The Court of Appeals disagreed with the trial court’s reliance on the
raise enough funds to meet the accumulated bills. However, the trial court Alindada Report. The appellate court stated that the Alindada Report should
held that this particular agreement is not crucial in this case. rather have indicated the scope of work items enumerated in the parties’
The trial court also gave the Report of Engineer Demetrio C. Alindada of seven letters-contracts and the percentage of work accomplished in each of
the Davao Engineering Office (Alindada Report) a higher probative value these items, instead of enumerating merely the scope of work items which
than the Technical Verification Report submitted by respondent’s hired Civil Alindada found completed. The Alindada Report was therefore not a reliable
Engineer, Raul D. Moralizon (Moralizon Report). The trial court found the evidence in determining the percentage of accomplishment in the project.
Moralizon Report self-serving. Based on the Alindada Report, most of the The Court of Appeals went on to say that even assuming that Article
items contracted for construction were 100% completed. Hence, the trial 1234 of the Civil Code applies to this case, the trial court should have
court applied Article 1234 of the Civil Code which states that “[i]f the correspondingly decreased the amount to be recovered by petitioner by the
obligation has been substantially performed in good faith, the obligor may amount of damages suffered by respondent, as stated in the same provision.
recover as though there had been a strict and complete fulfillment, less the However, the Court of Appeals faulted respondent for the trial court’s failure
damages suffered by the obligee.” to correspondingly reduce the amount recoverable by petitioner. There was
The trial court disposed of the collection case, as follows: no showing that respondent demanded that petitioner should finish the
“WHEREFORE, judgment is hereby rendered in favor of the plaintiff and project; oth-347
against the defendants, ordering the latter, jointly and severally, as follows: VOL. 557, JULY 9, 2008 347
1. To pay the plaintiff the amount of P1,426,176.45 with legal
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
interest to be computed from the date of the filing of the complaint
erwise, respondent would hire another contractor to complete it. Respondent
until fully paid;
did not report petitioner’s abandonment of the project to the Office of the
2. To pay the plaintiff the amount of P154,883.33 representing
Building Official of Davao City. Respondent simply hired another contractor
actual damages in the form of interest payment for loans;
to complete the unfinished job left by petitioner. In addition, the building
3. To pay the amount of P100,000.00 as and for attorney’s fees;
permits obtained for the supposed continuation of the works indicated that
and
they were for “new construction” instead of “addition,” “repair,” “renovation,” exceptions, which is, when the findings of facts of the trial court and the
or “others.” Court of Appeals are conflicting.9Therefore, a review of the facts and the
The Court of Appeals ordered petitioner to reimburse P70,000 as pieces of evidence is proper.
overpayment by respondent. We shall discuss jointly the first two issues as they are interrelated.
The dispositive portion of the Court of Appeals’ decision reads: Respondent contends that the 16 May 1988 letter novated the parties’
“WHEREFORE, and for all the foregoing considerations, the Decision previous agreements, thereby scrapping the system of progress billings.
appealed from is hereby REVERSED and SET ASIDE, and another one Respondent posits that its obligation to pay petitioner the remaining balance
entered: of the contract price arises only upon the completion of the entire project,
1. Dismissing the complaint; except the office building, on 15 June 1988, pursuant to the terms of the 16
2. Ordering the plaintiff: May 1988 letter. Since petitioner failed to finish this portion of the project on
(a) To reimburse the defendants the amount of P70,000.00; 15 June 1988, its claim is not yet due and demandable.
(b) To pay defendant Manila Castor Oil Corporation the sum of _______________
P50,000.00 as damages for besmirched reputation;
(c) To pay defendant Romy Lim the amount of P50,000.00 for 9 Ong v. Bogñalbal, G.R. No. 149140, 12 September 2006, 501 SCRA
moral damages; 490; Yao v. Matela, G.R. No. 167767, 29 August 2006, 500 SCRA 136.
(d) To pay defendants their attorney’s fees in the amount of 349
P10,000.00. VOL. 557, JULY 9, 2008 349
With costs in this instance against the plaintiff-appellee.
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
SO ORDERED.”8
The Court finds no novation of the previous agreements between the
Hence, this petition.
parties considering that the 16 May 1988 letter did not expressly extinguish
the parties’ obligations under their previous contracts. On the contrary, it
The Issues
expressly recognized the parties’ reciprocal obligations.10
It must be pointed out that as of 16 May 1988, respondent’s accumulated
The issues in this case are:
payables reached P764,466, but only P500,000 was paid. Respondent was
_______________
therefore not up to date with its payments. Petitioner, on the other hand,
was behind schedule in its construction work because the project should be
8 Id., at p. 53.
fully operational by April 1988.11
348
To remedy the situation, the 16 May 1988 letter fixed a period for the
348 SUPREME COURT REPORTS ANNOTATED completion of the other structures of the project, except the office
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation building.12 Petitioner was given a month to finish this portion of the project
1. Whether the 16 May 1988 letter novated the previous agreements of and the records show that it was aware of this deadline. Danny Ang testified
the parties; on this matter.
2. Whether petitioner can validly collect from respondent the remaining ATTY. GUNO
balance of the total contract price; Can you stipulate as manifested by counsel then the new deadline
3. Whether respondent is entitled to P70,000 allegedly as overpayment; for all the project on [sic] June 15 as indicated in the contract.
and ATTY. SALVADOR
4. Whether Lim is solidarily liable to petitioner for the alleged It is stated here in Exhibit 1, the complaint [sic] here has to finish
remaining balance. not later June 15 of 1988.
ATTY. GUNO
The Ruling of the Court We agree on that.
Q: And you were also informed by the defendants that they had to be
The petition has no merit. operated [sic] by April 1988?
The resolution of the issues in this case requires a re-examination of the A: Yes, sir.13
evidence presented by the contending parties during the trial. Generally, the _______________
Court does not resolve questions of facts. However, this rule admits of
several exceptions. The instant case falls under one of the recognized 10 See Zapanta v. De Rotaeche, 21 Phil. 154, 159 (1912).
11 See TSN, 6 October 1989, p. 8. A: I don’t know when those pictures . . .
12 Rollo, p. 222. xxx
13 TSN, 6 October 1989, p. 8. Q: Please tell us if these are the pictures?
350 A: This is the picture of the project which we were not able to
350 SUPREME COURT REPORTS ANNOTATED finish, sir.16 (Emphasis supplied)
Further, the Moralizon Report found deficiencies in three construction
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
contracts and concluded that petitioner abandoned the project. Significantly,
At the same time, the 16 May 1988 letter specified the amounts still
petitioner did not rebut the Moralizon Report.
payable to petitioner conditioned upon the accomplishment of certain
Petitioner relied on the Alindada Report to support its claim of
portions of the project. The amount of P200,000 was payable on 15 June
completion. The Alindada Report concluded that almost all the work items
1988 if petitioner finished the project, excluding the office building; and
are 100% completed and that only two pieces of steel sliding doors in
P460,000 was payable after the completion of the office building. Thus, while
Building I were not yet installed.17 However, petitioner’s admissions and
the 16 May 1988 letter did not extinguish the parties’ obligations under their
respondent’s evidences clearly contradict the Alindada Report. This
previous contracts, it modified the manner of payment from the system of
contradiction effectively destroyed the disputable presumption of the regular
progress billings to a specific schedule of payments.
issuance of the Alindada Report.18
The question now is whether petitioner complied with its obligation of
The fact that the building permits obtained by respondent after
finishing the project, except the office building, on 15 June 1988 to be
petitioner stopped its construction were for “new construction” instead of
entitled to P200,000.
“addition,” “repair,” “renovation,” or “others” does not conclusively prove that
Contrary to petitioner’s claim of project completion, there is sufficient
petitioner finished the project.
evidence on record showing peitioner’s failure to finish the project on 15
Considering the foregoing, there is no doubt that petitioner failed to
June 1988. Petitioner admitted in its complaint that Contracts I and III
comply with its undertaking to complete the project, except the office
“failed to reach full accomplishment”: Contract I—97% for Building I, 95%
building, on 15 June 1988. Consequently, respondent’s obligation to pay the
for Office Building, and 99% for Boiler Room, and Contract III—90%.14
P200,000 did not arise.
The photographs15 presented by respondent show various areas of the
_______________
construction which were not completed. Danny Ang, petitioner’s General
Manager, confirmed on the witness stand that the images in the
16 TSN, 6 October 1989, pp. 31-32.
photographs showed the incomplete status of the project, thus:
17 Exhibit “I,” Folder of Exhibits, Vol. I, p. 29.
Q: Now Mr. Witness please tell us the date when you left the job site
18 See Yao v. Matela, supra note 9.
or you pulled out of the job site?
352
A: It could be in July 1988, sir.
Q: And during the direct testimony last July 17 you testified 352 SUPREME COURT REPORTS ANNOTATED
that the pictures attached in the answer of the defendants Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
were the pictures of unfinished portion of the project, is Respondent could not be considered in delay when it failed to pay petitioner
that correct? at that time. According to the last paragraph of Article 1169 of the Civil
A: Yes, sir. Code, “[i]n reciprocal obligations, neither party incurs in delay if the other
_______________ does not comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills his
14 Records, pp. 7-8. obligation, delay by the other begins.”
15 Exhibits “1,” “1-A,” “4” to “4-V,” Folder of Exhibits, Vol. II, pp. 48, Furthermore, the loss of the probative value of the Alindada Report due
53-70. to petitioner’s admissions and respondent’s unrefuted evidences, as
351 discussed above, renders petitioner’s claim for the remaining balance of the
VOL. 557, JULY 9, 2008 351 contract price unsubstantiated. Without any corroborating evidence,
petitioner’s allegations are plainly without weight. The plaintiff must rely on
Ek Lee Steel Words Corporation vs. Manila Castor Oil Corporation
the strength of its own evidence and not upon the weakness of that of the
Q: And these are the pictures after you had pulled out of the job site?
defendants.19 Hence, for its failure to discharge the burden of
A: Yes, sir.
proof20 required in this case,21 petitioner’s complaint must be dismissed.
Q: These are the pictures on July 1988 when you pulled out of the
construction?
As regards the reimbursement of P70,000, suffice it to state that this
figure was never specifically pleaded as an overpayment in the answer filed
by respondent before the trial court. Therefore, wanting any basis, the Court
of Appeals erred in ordering the return of this particular amount to
respondent.
The foregoing discussion renders unnecessary the resolution of the last
issue raised by petitioner.
_______________
19 See Quinto v. Andres, G.R. No. 155791, 16 March 2005, 453 SCRA
511, 523.
20 Section 1 of Rule 131 defines burden of proof as the duty of a party to
present evidence on the facts in issue necessary to establish his claim or
defense by the amount of evidence required by law.
21 In civil cases, the burden of proof is on the plaintiff to establish his
case by preponderance of evidence. Preponderance of evidence means
evidence which is of greater weight, or more convincing than that which is
offered in opposition to it. (See Condes v. Court of Appeals, G.R. No. 161304,
27 July 2007, 528 SCRA 339, 352.)
© Copyright 2019 Central Book Supply, Inc. All rights reserved.
VOL. 158, FEBRUARY 29, 1988 445 petitioner not been remiss in performing its obligation, there would have
been no need for this suit or for Mrs. Crouch's testimony.
Telefast Communications /Philippine Wireless, Inc. vs. Castro, Sr.
Same; Same; Same; Same; Exemplary damages, award of, justified to
No. L-73867. February 29, 1988.* serve as a warning to all telegram companies to observe due diligence in
TELEFAST COMMUNICATIONS/PHILIPPINE WIRELESS, INC., transmitting their customers' messages.—The award of exemplary damages
petitioner, vs. IGNACIO CASTRO, SR., SOFIA C. CROUCH, IGNACIO by the trial court is likewise justified and, therefore, sustained in the amount
CASTRO JR., AURORA CASTRO, SALVADOR CASTRO, MARIO CASTRO, of P1,000.00 for each of the private respondents, as a warning to all telegram
CONRADO CASTRO, ESMERALDA C. FLORO, AGERICO CASTRO, companies to observe due diligence in transmitting the messages of their
ROLANDO CASTRO, VIRGILIO CASTRO AND GLORIA CASTRO, and customers.
HONORABLE INTERMEDIATE APPELLATE COURT, respondents.
Civil Law; Damages; Obligations; Telegrams; Failure of telegram HERRERA, J., concurring;
company to send the sender's telegram overseas despite payment of the
required charges, makes it guilty of contravening its obligation and is liable Civil Law; Obligations; Damages; In addition to compensatory and
for damages.—In the case at bar, petitioner and private respondent Sofia C. exemplary damages, moral damages are recoverable in actions for breach of
Crouch entered into a contract whereby, for a fee, petitioner undertook to contract where the breach has been wanton and reckless.—I concur. In
send said private respondent's message overseas by telegram. This, addition to compensatory and exemplary damages, moral damages are
petitioner did not do, despite performance by said private respondent of her recoverable in actions for breach of contract, as in this case, where the
obligation by paying the required charges. Petitioner was therefore guilty of breach has been wanton and reckless, tantamount to bad faith.
contravening its obligation to said private respondent and is thus liable for PETITION for certiorari to review the decision of the Intermediate Appellate
damages. Court
Same; Same; Same; Same; Liability of telegram company is not limited The facts are stated in the opinion of the Court
to actual or quantified damages.—This liability is not limited to actual or
quantified damages. To sustain petitioner's contrary position in this regard PADILLA, J.:
would result in an inequitous situation where petitioner will only be held
liable for the actual cost of a telegram fixed thirty (30) years ago. Petition for review on certiorari of the decision** of the Intermediate
Same; Same; Same; Same; Moral damages, concept of, under Art. 2217 Appellate Court, dated 11 February 1986, in AC-G.R. No. CV-70245, entitled
of the Civil Code; Moral damages, recoverable in case at bar.—We find Art. "Ignacio Castro, Sr., et al., Plaintiffs-Appellees, versus Telefast
2217 of the Civil Code applicable to the case at bar. It states: "Moral Communications/Philippine Wireless, Inc., Defendant-Appellant."
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 results of the **Penned by Justice Serafin E. Camilon, with the concurrence of Justices
defendant's wrongful act or omission." Crisolito Pascual, Jose C. Campos, Jr. and Desiderio P. Jurado.
Same; Same; Same; Same; Petitioners act or omission amounted to 447
gross negligence.—Here, petitioner's act or omission, which amounted
VOL. 158, FEBRUARY 29, 1988 447
____________ Telefast Communications Philippine Wireless, Inc. vs. Castro, Sr.
The facts of the case are as follows:
* SECOND DIVISION. On 2 November 1956, Consolacion Bravo-Castro, wife of plaintiff Ignacio
446 Castro, Sr. and mother of the other plaintiffs, passed away in Lingayen,
to gross negligence, was precisely the cause of the suffering private Pangasinan. On the same day, her daughter Sofia C. Crouch, who was then
respondents had to undergo. vacationing in the Philippines, addressed a telegram to plaintiff Ignacio
Same; Same; Same; Same; Compensatory damages, award of, proper, as Castro, Sr. at 685 Wanda, Scottsburg, Indiana, U.S.A., 47170 announcing
petitioner was remiss in performing its obligations.—We also sustain the Consolacion's death. The telegram w as accepted by the defendant in its
trial court's award of P1 6,000.00 as compensatory damages to Sofia C. Dagupan office, for transmission, after payment of the required fees or
Crouch representing the expenses she incurred when she came to the charges.
Philippines from the United States to testify before the trial court. Had
The telegram never reached its addressee. Consolacion was interred with Petitioner appeals from the judgment of the appellate court, contending
only her daughter Sofia in attendance. Neither the husband nor any of the that the award of moral damages should be eliminated as defendant's
other children of the deceased, then all residing in the United States, negligent act was not motivated by "fraud, malice or recklessness."
returned for the burial. In other words, under petitioner's theory, it can only be held liable for
When Sofia returned to the United States, she discovered that the wire P31.92, the fee or charges paid by Sofia C. Crouch for the telegram that was
she had caused the defendant to send, had not been received. She and the never sent to the addressee thereof.
other plaintiffs thereupon brought action for damages arising from Petitioner's contention is without merit.
defendant's breach of contract. The case was filed in the Court of First Art. 1170 of the Civil Code provides that "those who in the performance
Instance of Pangasinan and docketed therein as Civil Case No. 15356. The of their obligations are guilty of fraud, negligence or delay, and those who in
only defense of the defendant was that it was unable to transmit the any manner contravene the tenor thereof, are liable for damages." Art. 2176
telegram because of "technical and atmospheric factors beyond its also provides that "whoever by act or omission causes damage to another,
control."1 No evidence appears on record that defendant ever made any there being fault or negligence, is obliged to pay for the damage done."
attempt to advise the plaintiff Sofia C. Crouch as to why it could not In the case at bar, petitioner and private respondent Sofia C. Crouch
transmit the telegram. entered into a contract whereby, for a fee, petitioner undertook to send said
The Court of First Instance of Pangasinan, after trial, ordered the private respondent's message overseas
defendant (now petitioner) to pay the plaintiffs (now private respondents)
damages, as follows, with interest at 6% per annum: ____________
____________
4 Rollo at 13.
450
companies to observe due diligence in transmitting the messages of their
customers.
WHEREFORE, the petition is DENIED. The decision appealed from is
modified so that petitioner is held liable to private respondents in the
following amounts:
SO ORDERED.
Yap (Chairman), Paras and Sarmiento, JJ., concur.
Melencio-Herrera, J., I concur. In addition to compensatory and
exemplary damages, moral damages are recoverable in actions for breach of
contract, as in this case, where the breach has been wanton and reckless,
tantamount to bad faith.
Petition denied. Decision modified.
Notes.—Telegraph corporation, as employer is liable directly for the acts
of its employees. Action for damages must be based on Articles 19 and 20 of
the Civil Code, not on subsidiary liability of corporation under Article 1161,
New Civil Code. (Radio Com munications of the Phil. vs. Court of
Appeals, 143 SCRA 657.)
Since negligence may be hard to substantiate in some cases, the
application of the doctrine of res ipsa loquitur is proper. (Radio
Communications of the Phil. vs. Court of Appeals, 143 SCRA 657.)
——o0o——
VOL. 399, MARCH 14, 2003 207 Business Class was overbooked in that there were more passengers than the
number of seats. Thus, the seat assignments of the Vazquezes were given to
Cathay Pacific Airways, Ltd. vs. Vasquez
waitlisted passengers, and the Vazquezes, being members of the Marco Polo
G.R. No. 150843. March 14, 2003.* Club, were upgraded from Business Class to First Class.
CATHAY PACIFIC AIRWAYS, LTD., petitioner, vs.SPOUSES DANIEL Same; Same; Same; Upgrading; Airline passengers have every right to
VAZQUEZ and MARIA LUISA MADRIGAL VAZQUEZ, respondents. decline an upgrade and insist on the accommodation they had booked, and if
Common Carriers; Air Transportation; Contracts; Requisites; Words an airline insists on the upgrade, it breaches its contract of carriage with the
and Phrases; A contract is a meeting of minds between two persons whereby passengers.—We note that in all their pleadings, the Vazquezes never denied
one agrees to give something or render some service to another for a that they were members of Cathay’s Marco Polo Club. They knew that as
consideration.—A contract is a meeting of minds between two persons members of the Club, they had priority for upgrading of their seat
whereby one agrees to give something or render some service to another for a accommodation at no extra cost when an opportunity arises. But, just like
consideration. There is no contract unless the following requisites concur: (1) other privileges, such priority could be waived. The Vazquezes should have
_______________ been consulted first whether they wanted to avail themselves of the privilege
or would consent to a change of seat accommodation before their seat
* FIRST DIVISION. assignments were given to other passengers. Normally, one would appreciate
208 and accept an upgrading, for it would mean a better accommo-
2 SUPREME COURT REPORTS ANNOTATED 209
08 VOL. 399, MARCH 14, 2003 209
Cathay Pacific Airways, Ltd. vs. Vasquez Cathay Pacific Airways, Ltd. vs. Vasquez
consent of the contracting parties; (2) an object certain which is the dation. But, whatever their reason was and however odd it might be,
subject of the contract; and (3) the cause of the obligation which is the Vazquezes had every right to decline the upgrade and insist on the
established. Undoubtedly, a contract of carriage existed between Cathay and Business Class accommodation they had booked for and which was
the Vazquezes. They voluntarily and freely gave their consent to an designated in their boarding passes. They clearly waived their priority or
agreement whose object was the transportation of the Vazquezes from preference when they asked that other passengers be given the upgrade. It
Manila to HongKong and back to Manila, with seat: in the Business Class should not have been imposed on them over their vehement objection. By
Section of the aircraft, and whose cause or consideration was the fare paid by insisting on the upgrade, Cathay breached its contract of carriage with the
the Vazquezes to Cathay. Vazquezes.
Same; Same; Same; Words and Phrases; “Breach of Contract” is defined Same; Same; Same; Same; Words and Phrases; “Bad Faith” and
as the “failure without legal reason to comply with the terms of a contract,” or “Fraud,” Explained; Bad faith and fraud are allegations of fact that demand
the failure, without legal excuse, to perform any promise which forms the clear and convincing proof.—We are not, however, convinced that the
whole or part of the contract.”—The only problem is the legal effect of the upgrading or the breach of contract was attended by fraud or bad faith.
upgrading of the seat accommodation of the Vazquezes. Did it constitute a Thus, we resolve the second issue in the negative. Bad faith and fraud are
breach of contract? Breach of contract is defined as the “failure without legal allegations of fact that demand clear and convincing proof. They are serious
reason to comply with the terms of a contract.” It is also defined as the accusations that can be so conveniently and casually invoked, and that is
“[f]ailure, without legal excuse, to perform any promise which forms the why they are never presumed. They amount to mere slogans or mudslinging
whole or part of the contract.” In previous cases, the breach of contract of unless convincingly substantiated by whoever is alleging them. Fraud has
carriage consisted in either the bumping off of a passenger with confirmed been defined to include an inducement through insidious machination.
reservation or the downgrading of a passenger’s seat accommodation from Insidious machination refers to a deceitful scheme or plot with an evil or
one class to a lower class. In this case, what happened was the reverse. The devious purpose. Deceit exists where the party, with intent to deceive,
contract between the parties was for Cathay to transport the Vazquezes to conceals or omits to state material facts and, by reason of such omission or
Manila on a Business Class accommodation in Flight CX-905. After concealment, the other party was induced to give consent that would not
checking-in their luggage at the Kai Tak Airport in Hong Kong, the otherwise have been given. Bad faith does not simply connote bad judgment
Vazquezes were given boarding cards indicating their seat assignments in or negligence; it imports a dishonest purpose or some moral obliquity and
the Business Class Section. However, during the boarding time, when the conscious doing of a wrong, a breach of a known duty through some motive
Vazquezes presented their boarding passes, they were informed that they or interest or ill will that partakes of the nature of fraud.
had a seat change from Business Class to First Class. It turned out that the
Same; Same; Same; Same; An upgrading is for the better condition and, for damages is predicated on any of the cases stated in Article 2219 of the
definitely for the benefit of the passenger.—Neither was the transfer of the Civil Code.
Vazquezes effected for some evil or devious purpose. As testified to by Mr. Same; Same; Same; Same; Moral damages predicated upon a breach of
Robson, the First Class Section is better than the Business Class Section in contract of carriage may only be recoverable in instances where the carrier is
terms of comfort, quality of food, and service from the cabin crew; thus, the guilty of fraud or bad faith or where the mishap resulted in the death of a
difference in fare between the First Class and Business Class at that time passenger.—Moral damages predicated upon a breach of contract of carriage
was $250. Needless to state, an upgrading is for the better condition and, may only be recoverable in instances where the carrier is guilty of fraud or
definitely, for the benefit of the passenger. bad faith or where the mishap resulted in the death of a passenger. Where in
Same; Same; Same; Overbooking; It is clear from Sec. 3 of Economic breaching the contract of carriage the airline is not shown to have acted
Regulation No. 7 of the Civil Aeronautics Board, as amended, that an fraudulently or in bad faith, liability for damages is limited to the natural
overbooking that does not exceed ten percent is not considered deliberate and and probable consequences of the breach of the obligation which the parties
therefore does not amount to bad faith.—We are not persuaded by the had foreseen or could have reasonably foreseen. In such a case the liability
Vazquezes’ argument that the overbooking of the Business Class Section does not include moral and exemplary damages.
constituted bad faith on the part of Cathay. Section 3 of the Economic Same; Same; Same; Same; Attorney’s Fees; It is a requisite in the grant
Regulation No. 7 of the Civil Aeronautics Board, as amended, provides: Sec. of exemplary damages that the act of the offender must be accompanied by
3. Scope.—This regulation shall apply to every Philippine and foreign air bad faith or done in wanton, fraudulent or malevolent manner; Where the
carrier with respect to its operation of flights or portions of flights awards for moral and exemplary damages are eliminated, so
210 211
2 SUPREME COURT REPORTS ANNOTATED VOL. 399, MARCH 14, 2003 211
10 Cathay Pacific Airways, Ltd. vs. Vasquez
Cathay Pacific Airways, Ltd. vs. Vasquez must the award for attorney’s fees.—The deletion of the award for
originating from or terminating at, or serving a point within the exemplary damages by the Court of Appeals is correct. It is a requisite in the
territory of the Republic of the Philippines insofar as it denies boarding to a grant of exemplary damages that the act of the offender must be
passenger on a flight, or portion of a flight inside or outside the Philippines, accompanied by bad faith or done in wanton, fraudulent or malevolent
for which he holds confirmed reserved space. Furthermore, this Regulation is manner. Such requisite is absent in this case. Moreover, to be entitled
designed to cover only honest mistakes on the part of the carriers and thereto the claimant must first establish his right to moral, temperate, or
excludes deliberate and willful acts of non-accommodation. Provided, compensatory damages. Since the Vazquezes are not entitled to any of these
however, that overbooking not exceeding 10% of the seating capacity of the damages, the award for exemplary damages has no legal basis. And where
aircraft shall not be considered as a deliberate and willful act of non- the awards for moral and exemplary damages are eliminated, so must the
accommodation. It is clear from this section that an overbooking that does award for attorney’s fees.
not exceed ten percent is not considered deliberate and therefore does not Same; Same; Same; Same; The amount of damages awarded should not
amount to bad faith. Here, while there was admittedly an overbooking of the be palpably and scandalously excessive as to indicate that it was the result of
Business Class, there was no evidence of overbooking of the plane beyond prejudice or corruption on the part of the trial court; Passengers must not
ten percent, and no passenger was ever bumped off or was refused to board prey on international airlines for damages awards, like “trophies in a safari,”
the aircraft. after all neither the social standing nor prestige of the passenger should
Same; Same; Same; Damages; Requisites for Award of Moral determine the extent to which he would suffer because of a wrong done, since
Damages.—Moral damages include physical suffering, mental anguish, the dignity affronted in the individual is a quality inherent in him and not
fright, serious anxiety, besmirched reputation, wounded feelings, moral conferred by these social indicators.—Before writing finisto this decision, we
shock, social humiliation, and similar injury. Although incapable of find it well-worth to quote the apt observation of the Court of Appeals
pecuniary computation, moral damages may be recovered if they are the regarding the awards adjudged by the trial court: We are not amused but
proximate result of the defendant’s wrongful act or omission. Thus, case law alarmed at the lower court’s unbelievable alacrity, bordering on the
establishes the following requisites for the award of moral damages: (1) scandalous, to award excessive amounts as damages. In their complaint,
there must be an injury clearly sustained by the claimant, whether physical, appellees asked for P1 million as moral damages but the lower court
mental or psychological; (2) there must be a culpable act or omission awarded P4 million; they asked for P500,000.00 as exemplary damages but
factually established; (3) the wrongful act or omission of the defendant is the the lower court cavalierly awarded a whooping P10 million; they asked for
proximate cause of the injury sustained by the claimant; and (4) the award P250,000.00 as attorney’s fees but were awarded P2 million; they did not ask
for nominal damages but were awarded P200,000.00. It is as if the lower booked in the Business Class has priority for upgrading to First Class if the
court went on a rampage, and why it acted that way is beyond all tests of Business Class Section is fully booked.
reason. In fact the excessiveness of the total award invites the suspicion that Respondents-spouses Dr. Daniel Earnshaw Vazquez and Maria Luisa
it was the result of “prejudice or corruption on the part of the trial court.” Madrigal Vazquez are frequent flyers of Cathay and are Gold Card members
The presiding judge of the lower court is enjoined to hearken to the Supreme of its Marco Polo Club. On 24 September 1996, the Vazquezes, together with
Court’s admonition in Singson vs. CA(282 SCRA 149 [1997]), where it said: their maid and two friends Pacita Cruz and Josefina Vergel de Dios, went to
The well-entrenched principle is that the grant of moral damages depends Hongkong for pleasure and business.
upon the discretion of the court based on the circumstances of each case. For their return flight to Manila on 28 September 1996, they were booked
This discretion is limited by the principle that the amount awarded should on Cathay’s Flight CX-905, with departure time at 9:20 p.m. Two hours
not be palpably and scandalously excessive as to indicate that it was the before their time of departure, the Vazquezes and their companions checked
result of prejudice or corruption on the part of the trial court. . . . and in their luggage at Cathay’s check-
in Alitalia Airways vs. CA (187 SCRA 763 [1990]), where it was held: 213
Nonetheless, we agree with the injunction expressed by the Court of Appeals VOL. 399, MARCH 14, 2003 213
that passengers must not prey on international airlines for damage awards,
Cathay Pacific Airways, Ltd. vs. Vasquez
like “trophies in a safari.” After all neither the social standing nor prestige of
in counter at Kai Tak Airport and were given their respective boarding
the passenger should determine the extent to which he would suffer because
passes, to wit, Business Class boarding passes for the Vazquezes and their
of a wrong done, since the dignity affronted in the individual is a quality
two friends, and Economy Class for their maid. They then proceeded to the
inherent in him and not conferred by these social indicators.
Business Class passenger lounge.
212
When boarding time was announced, the Vazquezes and their two friends
212 SUPREME COURT REPORTS ANNOTATED went to Departure Gate No. 28, which was designated for Business Class
Cathay Pacific Airways, Ltd. vs. Vasquez passengers. Dr. Vazquez presented his boarding pass to the ground
stewardess, who in turn inserted it into an electronic machine reader or
PETITION for review on certiorari of a decision of the Court of Appeals. computer at the gate. The ground stewardess was assisted by a ground
attendant by the name of Clara Lai Fun Chiu. When Ms. Chiu glanced at the
The facts are stated in the opinion of the Court. computer monitor, she saw a message that there was a “seat change” from
Quasha, Ancheta, Peña, Nolasco for petitioner. Business Class to First Class, for the Vazquezes.
Candelaria, Candelaria & Candelaria Law Firm for private Ms. Chiu approached Dr. Vazquez and told him that the Vazquezes’
respondents. accommodations were upgraded to First Class. Dr. Vazquez refused the
Bello, Gozon, Elma, Parel, Asuncion & Lucila co-counsel for private upgrade, reasoning that it would not look nice for them as hosts to travel in
respondents. First Class and their guests, in the Business Class; and moreover, they were
going to discuss business matters during the flight. He also told Ms. Chiu
DAVIDE, JR., C.J.: that she could have other passengers instead transferred to the First Class
Section. Taken aback by the refusal for upgrading, Ms. Chiu consulted her
Is an involuntary upgrading of an airline passenger’s accommodation from supervisor, who told her to handle the situation and convince the Vazquezes
one class to a more superior class at no extra cost a breach of contract of to accept the upgrading. Ms. Chiu informed the latter that the Business
carriage that would entitle the passenger to an award of damages? This is a Class was fully booked, and that since they were Marco Polo Club members
novel question that has to be resolved in this case. they had the priority to be upgraded to the First Class. Dr. Vazquez
The facts in this case, as found by the Court of Appeals and adopted by continued to refuse, so Ms. Chiu told them that if they would not avail
petitioner Cathay Pacific Airways, Ltd., (hereinafter Cathay) are as follows: themselves of the privilege, they would not be allowed to take the flight.
Cathay is a common carrier engaged in the business of transporting Eventually, after talking to his two friends, Dr. Vazquez gave in. He and
passengers and goods by air. Among the many routes it services is the Mrs. Vazquez then proceeded to the First Class Cabin.
Manila-Hongkong-Manila course. As part of its marketing strategy, Cathay Upon their return to Manila, the Vazquezes, in a letter of 2 October 1996
accords its frequent flyers membership in its Marco Polo Club. The members addressed to Cathay’s Country Manager, demanded that they be
enjoy several privileges, such as priority for upgrading of booking without indemnified in the amount of P1 million for the “humiliation and
any extra charge whenever an opportunity arises. Thus, a frequent flyer embarrassment” caused by its employees. They also demanded “a written
apology from the management of Cathay, preferably a responsible person
with a rank of no less than the Country Manager, as well as the apology traveling with them. Because of Dr. Vazquez’s outburst, Ms. Chiu thought of
from Ms. Chiu” within fifteen days from receipt of the letter. upgrading the traveling companions of the Vazquezes. But when she checked
214 the computer, she learned that the Vazquezes’ companions did not have
214 SUPREME COURT REPORTS ANNOTATED priority for upgrading. She then tried to book the Vazquezes again to their
original seats. However, since the Business Class Section was already fully
Cathay Pacific Airways, Ltd. vs. Vasquez
booked, she politely informed Dr. Vazquez of such fact and explained that
In his reply of 14 October 1996, Mr. Larry Yuen, the assistant to Cathay’s
the upgrading was in recognition of their status as Cathay’s valued
Country Manager Argus Guy Robson, informed the Vazquezes that Cathay
passengers. Finally, after talking to their guests, the Vazquezes eventually
would investigate the incident and get back to them within a week’s time.
decided to take the First Class accommodation.
On 8 November 1996, after Cathay’s failure to give them any feedback
Cathay also asserted that its employees at the Hong Kong airport acted
within its self-imposed deadline, the Vazquezes instituted before the
in good faith in dealing with the Vazquezes; none of them shouted,
Regional Trial Court of Makati City an action for damages against Cathay,
humiliated, embarrassed, or committed any act of disrespect against them
praying for the payment to each of them the amounts of P250,000 as
(the Vazquezes). Assuming that there was indeed a breach of contractual
temperate damages; P500,000 as moral damages; P500,000 as exemplary or
obligation, Cathay acted in good faith, which negates any basis for their
corrective damages; and P250,000 as attorney’s fees.
claim for temperate, moral, and exemplary damages and attorney’s fees.
In their complaint, the Vazquezes alleged that when they informed Ms.
Hence, it prayed for the dismissal of the complaint and for payment of
Chiu that they preferred to stay in Business Class, Ms. Chiu “obstinately,
P100,000 for exemplary damages and P300,000 as attorney’s fees and
uncompromisingly and in a loud, discourteous and harsh voice threatened”
litigation expenses.
that they could not board and leave with the flight unless they go to First
During the trial, Dr. Vazquez testified to support the allegations in the
Class, since the Business Class was overbooked. Ms. Chiu’s loud and
complaint. His testimony was corroborated by his two friends who were with
stringent shouting annoyed, embarrassed, and humiliated them because the
him at the time of the incident, namely, Pacita G. Cruz and Josefina Vergel
incident was witnessed by all the other passengers waiting for boarding.
de Dios.
They also claimed that they were unjustifiably delayed to board the plane,
For its part, Cathay presented documentary evidence and the testimonies
and when they were finally permitted to get into the aircraft, the forward
of Mr. Yuen; Ms. Chiu; Norma Barrientos, Comptroller of its retained
storage compartment was already full. A flight stewardess instructed Dr.
counsel; and Mr. Robson. Yuen and Robson testified on Cathay’s policy of
Vazquez to put his roll-on luggage in the overhead storage compartment.
upgrading the seat accommodation of its Marco Polo Club members when an
Because he was not assisted by any of the crew in putting up his luggage, his
opportunity arises. The upgrading of the Vazquezes to First Class was done
bilateral carpal tunnel syndrome was aggravated, causing him extreme pain
in good faith; in fact, the First Class Section is definitely much better than
on his arm and wrist. The Vazquezes also averred that they “belong to the
the Business Class in terms of comfort, quality of food, and service from the
uppermost and absolutely top elite of both Philippine Society and the
cabin crew. They also testified that overbooking is a widely accepted practice
Philippine financial community, [and that] they were among the wealthiest
in the airline industry and is in accordance with the International Air
persons in the Philippine[s].”
Transport Association (IATA) regulations. Airlines overbook because a lot of
In its answer, Cathay alleged that it is a practice among commercial
passengers do not
airlines to upgrade passengers to the next better class of accommodation,
216
whenever an opportunity arises, such as when a certain section is fully
booked. Priority in upgrading is given to its frequent flyers, who are 216 SUPREME COURT REPORTS ANNOTATED
considered favored passengers like Vazquezes. Thus, when the Business Cathay Pacific Airways, Ltd. vs. Vasquez
Class Section of Flight CX-905 was fully booked, Cathay’s computer sorted show up for their flight. With respect to Flight CX-905, there was no overall
out the names of favored passengers for involuntary upgrading to First overbooking to a degree that a passenger was bumped off or downgraded.
Class. When Ms. Chiu informed the Vazquezes that they were upgraded to Yuen and Robson also stated that the demand letter of the Vazquezes was
First Class, Dr. Vazquez refused. He then stood at the entrance of the immediately acted upon. Reports were gathered from their office in Hong
215 Kong and immediately forwarded to their counsel Atty. Remollo for legal
VOL. 399, MARCH 14, 2003 215 advice. However, Atty. Remollo begged off because his services were likewise
retained by the Vazquezes; nonetheless, he undertook to solve the problem in
Cathay Pacific Airways, Ltd. vs. Vasquez
behalf of Cathay. But nothing happened until Cathay received a copy of the
boarding apron, blocking the queue of passengers from boarding the plane,
complaint in this case. For her part, Ms. Chiu denied that she shouted or
which inconvenienced other passengers. He shouted that it was impossible
used foul or impolite language against the Vazquezes. Ms. Barrientos
for him and his wife to be upgraded without his two friends who were
testified on the amount of attorney’s fees and other litigation expenses, such However, the Court of Appeals was not convinced that Ms. Chiu shouted
as those for the taking of the depositions of Yuen and Chiu. at, or meant to be discourteous to, Dr. Vazquez, although it might seemed
In its decision1 of 19 October 1998, the trial court found for the that way to the latter, who was a member of the elite in Philippine society
Vazquezes and decreed as follows: and was not therefore used to being harangued by anybody. Ms. Chiu was a
“WHEREFORE, finding preponderance of evidence to sustain the instant Hong Kong Chinese whose fractured Chinese was difficult to understand and
complaint, judgment is hereby rendered in favor of plaintiffs Vazquez whose manner of speaking might sound harsh or shrill to Filipinos because
spouses and against defendant Cathay Pacific Airways, Ltd., ordering the of cultural differences. But the Court of Appeals did not find her to have
latter to pay each plaintiff the following: acted with deliberate malice, deceit, gross negligence, or bad faith. If at all,
she was negligent in not offering the First Class accommodations to other
1. a)Nominal damages in the amount of P100,000.00 for each plaintiff; passengers. Neither can the flight stewardess in the First Class Cabin be
2. b)Moral damages in the amount of P2,000,000.00 for each plaintiff; said to have been in bad faith when she failed to assist Dr. Vazquez in lifting
3. c)Exemplary damages in the amount of P5,000,000.00 for each his baggage into the overhead storage bin. There is no proof that he asked
plaintiff; for help and was refused even after saying that he was suffering from
4. d)Attorney’s fees and expenses of litigation in the amount of “bilateral carpal tunnel syndrome.” Anent the delay of Yuen in responding to
P1,000,000.00 for each plaintiff; and the demand letter of the Vazquezes, the Court of Appeals found it to have
5. e)Costs of suit. been sufficiently explained.
_______________
SO ORDERED.”
2 Penned by Associate Justice Wenceslao I. Agnir, Jr., with Associate
According to the trial court, Cathay offers various classes of seats from
which passengers are allowed to choose regardless of their reasons or Justices Salvador J. Valdez, Jr., and Juan Q. Enriquez, Jr., concurring.
motives, whether it be due to budgetary constraints or whim. The choice 218
imposes a clear obligation on Cathay to transport the passengers in the class 218 SUPREME COURT REPORTS ANNOTATED
chosen by them. The carrier cannot, without exposing itself to liability, force Cathay Pacific Airways, Ltd. vs. Vasquez
a passenger to The Vazquezes and Cathay separately filed motions for a reconsideration of
_______________ the decision, both of which were denied by the Court of Appeals.
Cathay seasonably filed with us this petition in this case. Cathay
1Penned by Judge Escolastico O. Cruz, Jr. maintains that the award for moral damages has no basis, since the Court of
217 Appeals found that there was no “wanton, fraudulent, reckless and
VOL. 399, MARCH 14, 2003 217 oppressive” display of manners on the part of its personnel; and that the
Cathay Pacific Airways, Ltd. vs. Vasquez breach of contract was not attended by fraud, malice, or bad faith. If any
involuntarily change his choice. The upgrading of the Vazquezes’ damage had been suffered by the Vazquezes, it was damnum absque
accommodation over and above their vehement objections was due to the injuria, which is damage without injury, damage or injury inflicted without
overbooking of the Business Class. It was a pretext to pack as many injustice, loss or damage without violation of a legal right, or a wrong done to
passengers as possible into the plane to maximize Cathay’s revenues. a man for which the law provides no remedy. Cathay also invokes our
Cathay’s actuations in this case displayed deceit, gross negligence, and bad decision in United Airlines, Inc. v. Court of Appeals3 where we recognized
faith, which entitled the Vazquezes to awards for damages. that, in accordance with the Civil Aeronautics Board’s Economic Regulation
On appeal by the petitioners, the Court of Appeals, in its decision of 24 No. 7, as amended, an overbooking that does not exceed ten percent cannot
July 2001,2 deleted the award for exemplary damages; and it reduced the be considered deliberate and done in bad faith. We thus deleted in that case
awards for moral and nominal damages for each of the Vazquezes to the awards for moral and exemplary damages, as well as attorney’s fees, for
P250,000 and P50,000, respectively, and the attorney’s fees and litigation lack of proof of overbooking exceeding ten percent or of bad faith on the part
expenses to P50,000 for both of them. of the airline carrier.
The Court of Appeals ratiocinated that by upgrading the Vazquezes to On the other hand, the Vazquezes assert that the Court of Appeals was
First Class, Cathay novated the contract of carriage without the former’s correct in granting awards for moral and nominal damages and attorney’s
consent. There was a breach of contract not because Cathay overbooked the fees in view of the breach of contract committed by Cathay for transferring
Business Class Section of Flight CX-905 but because the latter pushed them from the Business Class to First Class Section without prior notice or
through with the upgrading despite the objections of the Vazquezes. consent and over their vigorous objection. They likewise argue that the
issuance of passenger tickets more than the seating capacity of each section We note that in all their pleadings, the Vazquezes never denied that they
of the plane is in itself fraudulent, malicious and tainted with bad faith. were members of Cathay’s Marco Polo Club. They knew that as members of
The key issues for our consideration are whether (1) by upgrading the the Club, they had priority for upgrading of their seat accommodation at no
seat accommodation of the Vazquezes from Business Class to First Class extra cost when an
Cathay breached its contract of carriage with the Vazquezes; (2) the _______________
upgrading was tainted with fraud or bad faith; and (3) the Vazquezes are
entitled to damages. 4 Article 1318, Civil Code; ABS-CBN Broadcasting Corp. v. Court of
We resolve the first issue in the affirmative. Appeals, 301 SCRA 572, 592 [1999].
A contract is a meeting of minds between two persons whereby one 5 Webster’s Third New International Dictionary 270 (1986).
agrees to give something or render some service to another for a 6 Black’s Law Dictionary 171 (5th ed.).
to cover only honest mistakes on the part of the carriers and excludes [2001].
deliberate and willful acts of non-accommodation. Provided, however, that 12 Citytrust Banking Corporation v. Villanueva, supra; Francisco v.
overbooking not exceeding 10% of the seating capacity of the aircraft shall Ferrer, supra note 8, at p. 266.
not be considered as a deliberate and willful act of non-accommodation. 13 Cathay Pacific Airways, Ltd. v. Court of Appeals, 219 SCRA 520, 524
It is clear from this section that an overbooking that does not exceed ten [1993].
percent is not considered deliberate and therefore does not amount to bad 223
faith.10 Here, while there was admittedly an VOL. 399, MARCH 14, 2003 223
_______________
Cathay Pacific Airways, Ltd. vs. Vasquez
have reasonably foreseen. In such a case the liability does not include moral
9TSN, 2 April 1988, 37-38; TSN, 17 April 1988, 37.
and exemplary damages.14
10United Airlines, Inc. v. Court of Appeals, supra note 3.
In this case, we have ruled that the breach of contract of carriage, which
222
consisted in the involuntary upgrading of the Vazquezes’ seat
accommodation, was not attended by fraud or bad faith. The Court of Before writing finis to this decision, we find it well-worth to quote the apt
Appeals’ award of moral damages has, therefore, no leg to stand on. observation of the Court of Appeals regarding the awards adjudged by the
The deletion of the award for exemplary damages by the Court of Appeals trial court:
is correct. It is a requisite in the grant of exemplary damages that the act of We are not amused but alarmed at the lower court’s unbelievable alacrity,
the offender must be accompanied by bad faith or done in wanton, bordering on the scandalous, to award excessive amounts as damages. In
fraudulent or malevolent manner.15 Such requisite is absent in this case. their complaint, appellees asked for P1 million as moral damages but the
Moreover, to be entitled thereto the claimant must first establish his right to lower court awarded P4 million; they asked for P500,000.00 as exemplary
moral, temperate, or compensatory damages.16 Since the Vazquezes are not damages but the lower court cavalierly awarded a whooping P10 million;
entitled to any of these damages, the award for exemplary damages has no they asked for P250,000.00 as attorney’s fees but were awarded P2 million;
legal basis. And where the awards for moral and exemplary damages are they did not ask for nominal damages but were awarded P200,000.00. It is
eliminated, so must the award for attorney’s fees.17 as if the lower court went on a rampage, and why it acted that way is beyond
The most that can be adjudged in favor of the Vazquezes for Cathay’s all tests of reason. In fact the excessiveness of the total award invites the
breach of contract is an award for nominal damages under Article 2221 of suspicion that it was the result of “prejudice or corruption on the part of the
the Civil Code, which reads as follows: trial court.”
Article 2221 of the Civil Code provides: The presiding judge of the lower court is enjoined to hearken to the
Article 2221. Nominal damages are adjudicated in order that a right of the Supreme Court’s admonition in Singson vs. CA (282 SCRA 149 [1997]),
plaintiff, which has been violated or invaded by the defendant, may be where it said:
vindicated or recognized, and not for the purpose of indemnifying the The well-entrenched principle is that the grant of moral damages depends
plaintiff for any loss suffered by him. upon the discretion of the court based on the circumstances of each case.
Worth noting is the fact that in Cathay’s Memorandum filed with this Court, This discretion is limited by the principle that the amount awarded should
it prayed only for the deletion of the award for moral damages. It deferred to not be palpably and scandalously excessive as to indicate that it was the
the Court of Appeals’ discretion in awarding nominal damages; thus: result of prejudice or corruption on the part of the trial court. . . .
As far as the award of nominal damages is concerned, petitioner respectfully and in Alitalia Airways vs. CA (187 SCRA 763 [1990]), where it was held:
defers to the Honorable Court of Appeals’ discretion. Aware as it Nonetheless, we agree with the injunction expressed by the Court of Appeals
_______________ that passengers must not prey on international
_______________
14 Id., 526; Tan v. Northwest Airlines, Inc., supra note 8; Morris v. Court
of Appeals, supra note 8, at p. 436. 18Rollo, p. 262.
15 Morris v. Court of Appeals, supra note 8, at p. 436. 225
16 Article 2234, Civil Code.
VOL. 399, MARCH 14, 2003 225
17 Orosa v. Court of Appeals, 329 SCRA 652, 665 [2000]; Morris v. Court
Cathay Pacific Airways, Ltd. vs. Vasquez
of Appeals, supra note 8, at pp. 437-438.
airlines for damage awards, like “trophies in a safari.” After all neither the
224
social standing nor prestige of the passenger should determine the extent to
224 SUPREME COURT REPORTS ANNOTATED which he would suffer because of a wrong done, since the dignity affronted in
Cathay Pacific Airways, Ltd. vs. Vasquez the individual is a quality inherent in him and not conferred by these social
is that somehow, due to the resistance of respondents-spouses to the indicators.19
normally-appreciated gesture of petitioner to upgrade their accommodations, We adopt as our own this observation of the Court of Appeals.
petitioner may have disturbed the respondents-spouses’ wish to be with their WHEREFORE, the instant petition is hereby partly GRANTED. The
companions (who traveled to Hong Kong with them) at the Business Class on Decision of the Court of Appeals of 24 July 2001 in CA-G.R. CV No. 63339 is
their flight to Manila. Petitioner regrets that in its desire to provide the hereby MODIFIED, and as modified, the awards for moral damages and
respondents-spouses with additional amenities for the one and one-half (1 attorney’s fees are set aside and deleted, and the award for nominal damages
1/2) hour flight to Manila, unintended tension ensued. 18 is reduced to P5,000.
Nonetheless, considering that the breach was intended to give more benefit No pronouncement on costs.
and advantage to the Vazquezes by upgrading their Business Class SO ORDERED.
accommodation to First Class because of their valued status as Marco Polo Vitug, Carpio and Azcuna, JJ., concur.
members, we reduce the award for nominal damages to P5,000. Ynares-Santiago, J., On leave.
Petition granted, judgment modified.
Notes.—The Warsaw Convention should be deemed a limit of liability
only in those cases where the cause of the death or injury to person, or
destruction, loss or damage to property or delay in its transport is not
attributable to or attend by any willful misconduct, bad faith, recklessness,
or otherwise improper conduct on the part of any official or employee for
which the carrier is responsible, and there is otherwise no special or
extraordinary form or resulting injury. (Northwest Airlines, Inc. vs. Court of
Appeals, 248 SCRA 408 [1998])
In awarding moral damages for breach of contract of carriage, the breach
must be wanton and deliberately injurious or the one responsible acted
fraudulently or with malice or bad faith. (Cervantes vs. Court of Appeals, 304
SCRA 25 [1999])
——o0o——
_______________
__________________
__________________
in Bachelor Express, Inc. v. Court of Appeals a driver found negligent in Cui and Segundino G. Chua.
failing to stop the bus in order to let off passengers when a fellow passenger 430
ran amuck, as a result of which the passengers jumped out of the speeding 430 SUPREME COURT REPORTS ANNOTATED
bus and suffered injuries, was held also jointly and severally liable with the
Fabre, Jr. vs. Court of Appeals
bus company to the injured passengers.
At 11:30 that night, petitioner Cabil came upon a sharp curve on the
highway, running on a south to east direction, which he described as “siete.”
PETITION for review on certiorari of a decision of the Court of Appeals.
The road was slippery because it was raining, causing the bus, which was
running at the speed of 50 kilometers per hour, to skid to the left road
The facts are stated in the opinion of the Court.
shoulder. The bus hit the left traffic steel brace and sign along the road and
Maria del Valle for petitioners.
rammed the fence of one Jesus Escano, then turned over and landed on its
429
left side, coming to a full stop only after a series of impacts. The bus came to
VOL. 259, JULY 26, 1996 429 rest off the road. A coconut tree which it had hit fell on it and smashed its
Fabre,Jr. vs. Court of Appeals front portion.
Eduardo Claudio II for private respondents. Several passengers were injured. Private respondent Amyline Antonio
was thrown on the floor of the bus and pinned down by a wooden seat which
MENDOZA, J.: came off after being unscrewed. It took three persons to safely remove her
from this position. She was in great pain and could not move.
This is a petition for review on certiorari of the decision of the Court of The driver, petitioner Cabil, claimed he did not see the curve until it was
Appeals1 in CA-GR No. 28245, dated September 30, 1992, which affirmed too late. He said he was not familiar with the area and he could not have
with modification the decision of the Regional Trial Court of Makati, Branch seen the curve despite the care he took in driving the bus, because it was
58, ordering petitioners jointly and severally to pay damages to private dark and there was no sign on the road. He said that he saw the curve when
respondent Amyline Antonio, and its resolution which denied petitioners’ he was already within 15 to 30 meters of it. He allegedly slowed down to 30
motion for reconsideration for lack of merit. kilometers per hour, but it was too late.
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model The Lingayen police investigated the incident the next day, November 3,
Mazda minibus. They used the bus principally in connection with a bus 1984. On the basis of their finding they filed a criminal complaint against
service for school children which they operated in Manila. The couple had a the driver, Porfirio Cabil. The case was later filed with the Lingayen
driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for Regional Trial Court. Petitioners Fabre paid Jesus Escano P1,500.00 for the
two weeks. His job was to take school children to and from the St. damage to the latter’s fence. On the basis of Escano’s affidavit of desistance
Scholastica’s College in Malate, Manila. the case against petitioners Fabre was dismissed.
On November 2, 1984 private respondent Word for the World Christian Amyline Antonio, who was seriously injured, brought this case in the
Fellowship, Inc. (WWCF) arranged with petitioners for the transportation of RTC of Makati, Metro Manila. As a result of the accident, she is now
33 members of its Young Adults Ministry from Manila to La Union and back suffering from paraplegia and is permanently paralyzed from the waist
in consideration of which private respondent paid petitioners the amount of down. During the trial she described the operations she underwent and
P3,000.00. adduced evidence regarding the cost of her treatment and therapy.
The group was scheduled to leave on November 2, 1984, at 5:00 o’clock in Immediately after the accident, she was taken to the Nazareth Hospital in
the afternoon. However, as several members of the party were late, the bus Ba-ay, Lingayen. As this hospital was not adequately equipped, she was
did not leave the Tropical Hut at the corner of Ortigas Avenue and EDSA transferred to the Sto. Niño Hospi-
until 8:00 o’clock in the evening. Petitioner Porfirio Cabil drove the minibus. 431
The usual route to Caba, La Union was through Carmen, Pangasinan. VOL. 259, JULY 26, 1996 431
However, the bridge at Carmen was under repair, so that petitioner Cabil,
Fabre,Jr. vs. Court of Appeals
tal, also in the town of Ba-ay, where she was given sedatives. An x-ray was The Court of Appeals sustained the trial court’s finding that petitioner Cabil
taken and the damage to her spine was determined to be too severe to be failed to exercise due care and precaution in the operation of his vehicle
treated there. She was therefore brought to Manila, first to the Philippine considering the time and the place of the accident. The Court of Appeals held
General Hospital and later to the Makati Medical Center where she that the Fabres were themselves presumptively negligent. Hence, this
underwent an operation to correct the dislocation of her spine. petition. Petitioners raise the following issues:
In its decision dated April 17, 1989, the trial court found that:
No convincing evidence was shown that the minibus was properly checked 1. I.WHETHER OR NOT PETITIONERS WERE NEGLIGENT.
for travel to a long distance trip and that the driver was properly screened 2. II.WHETHER OR NOT PETITIONERS WERE LIABLE FOR THE
and tested before being admitted for employment. Indeed, all the evidence INJURIES SUFFERED BY PRIVATE RESPONDENTS.
presented have shown the negligent act of the defendants which ultimately 3. III.WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN
resulted to the accident subject of this case. THE POSITIVE, UP TO WHAT EXTENT.
Accordingly, it gave judgment for private respondents holding:
Considering that plaintiffs Word for the World Christian Fellowship, Inc. Petitioners challenge the propriety of the award of compensatory damages in
and Ms. Amyline Antonio were the only ones who adduced evidence in the amount of P600,000.00. It is insisted that, on the assumption that
support of their claim for damages, the Court is therefore not in a position to petitioners are liable, an award of P600,000.00 is unconscionable and highly
award damages to the other plaintiffs. speculative. Amyline Antonio testified that she was a casual employee of a
WHEREFORE, premises considered, the Court hereby renders judgment company called “Suaco,” earning P1,650.00 a month, and a dealer of Avon
against defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y products, earning an average of P1,000.00 monthly. Petitioners contend that
Jamil pursuant to articles 2176 and 2180 of the Civil Code of the Philippines as casual employees do not have security of tenure, the award of
and said defendants are ordered to pay jointly and severally to the plaintiffs P600,000.00, considering Amyline Antonio’s earnings, is without factual
the following amount: basis as there is no assurance that she would be regularly earning these
amounts.
1. 1)P93,657.11 as compensatory and actual damages; 433
2. 2)P500,000.00 as the reasonable amount of loss of earning capacity of VOL. 259, JULY 26, 1996 433
plaintiff Amyline Antonio;
3. 3)P20,000.00 as moral damages; Fabre,Jr. vs. Court of Appeals
4. 4)P20,000.00 as exemplary damages; and With the exception of the award of damages, the petition is devoid of merit.
5. 5)25% of the recoverable amount as attorney’s fees; First, it is unnecessary for our purpose to determine whether to decide
6. 6)Costs of suit. this case on the theory that petitioners are liable for breach of contract of
carriage or culpa contractual or on the theory of quasi delict or culpa
aquiliana as both the Regional Trial Court and the Court of Appeals held,
SO ORDERED.
for although the relation of passenger and carrier is “contractual both in
The Court of Appeals affirmed the decision of the trial court with respect to
origin and nature,” nevertheless “the act that breaks the contract may be
Amyline Antonio but dismissed it with
also a tort.”2 In either case, the question is whether the bus driver, petitioner
432
Porfirio Cabil, was negligent.
432 SUPREME COURT REPORTS ANNOTATED The finding that Cabil drove his bus negligently, while his employer, the
Fabre, Jr. vs. Court of Appeals Fabres, who owned the bus, failed to exercise the diligence of a good father of
respect to the other plaintiffs on the ground that they failed to prove their the family in the selection and supervision of their employee is fully
respective claims. The Court of Appeals modified the award of damages as supported by the evidence on record. These factual findings of the two courts
follows: we regard as final and conclusive, supported as they are by the evidence.
Indeed, it was admitted by Cabil that on the night in question, it was
1. 1)P93,657.11 as actual damages; raining, and, as a consequence, the road was slippery, and it was dark. He
2. 2)P600,000.00 as compensatory damages; averred these facts to justify his failure to see that there lay a sharp curve
3. 3)P50,000.00 as moral damages; ahead. However, it is undisputed that Cabil drove his bus at the speed of 50
4. 4)P20,000.00 as exemplary damages; kilometers per hour and only slowed down when he noticed the curve some
5. 5)P10,000.00 as attorney’s fees; and 15 to 30 meters ahead.3 By then it was too late for him to avoid falling off the
6. 6)Costs of suit. road. Given the conditions of the road and considering that the trip was
Cabil’s first one outside of Manila, Cabil should have driven his vehicle at a 7Testimony of Porfirio Cabil, TSN, p. 7, Oct. 26, 1987.
moderate speed. There is testimony4that the vehicles passing on that portion 435
of the road should only be running 20 kilometers per hour, so that at 50 VOL. 259, JULY 26, 1996 435
kilometers per
Fabre,Jr. vs. Court of Appeals
_______________
the presumption of negligence on the part of an employer.8
2 Air France v. Carrascoso, 18 SCRA 155, 168 (1966). Accord, Singson v. Petitioners argue that they are not liable because (1) an earlier departure
(made impossible by the congregation’s delayed meeting) could have averted
Bank of the Philippine Islands, 23 SCRA 1117, 1119 (1968).
3 Testimony of Porfirio Cabil, TSN, p. 14, Oct. 26, 1987. the mishap and (2) under the contract, the WWCF was directly responsible
4 Testimony of Pat. Chito Esmenda, TSN, pp. 37-38, Sept. 12, 1985. for the conduct of the trip. Neither of these contentions hold water. The hour
of departure had not been fixed. Even if it had been, the delay did not bear
434
directly on the cause of the accident. With respect to the second contention,
434 SUPREME COURT REPORTS ANNOTATED it was held in an early case that:
Fabre, Jr. vs. Court of Appeals [A] person who hires a public automobile and gives the driver directions as
hour, Cabil was running at a very high speed. to the place to which he wishes to be conveyed, but exercises no other control
Considering the foregoing—the fact that it was raining and the road was over the conduct of the driver, is not responsible for acts of negligence of the
slippery, that it was dark, that he drove his bus at 50 kilometers an hour latter or prevented from recovering for injuries suffered from a collision
when even on a good day the normal speed was only 20 kilometers an hour, between the automobile and a train, caused by the negligence either of the
and that he was unfamiliar with the terrain, Cabil was grossly negligent and locomotive engineer or the automobile driver.9
should be held liable for the injuries suffered by private respondent Amyline As already stated, this case actually involves a contract of carriage.
Antonio. Petitioners, the Fabres, did not have to be engaged in the business of public
Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave transportation for the provisions of the Civil Code on common carriers to
rise to the presumption that his employers, the Fabres, were themselves apply to them. As this Court has held:10
negligent in the selection and supervision of their employee. Art. 1732. Common carriers are persons, corporations, firms or associations
Due diligence in selection of employees is not satisfied by finding that the engaged in the business of carrying or transporting passengers or goods or
applicant possessed a professional driver’s license. The employer should also both, by land, water, or air for compensation, offering their services to the
examine the applicant for his qualifications, experience and record of public.
service.5 Due diligence in supervision, on the other hand, requires the The above article makes no distinction between one whose principal
formulation of rules and regulations for the guidance of employees and the business activity is the carrying of persons or goods or both, and one who
issuance of proper instructions as well as actual implementation and does such carrying only as an ancillary activity (in local idiom, as “a
monitoring of consistent compliance with the rules.6 sideline”). Article 1732 also carefully avoids making any distinction between
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La a person or enterprise offering transportation service on a regular or
Union, apparently did not consider the fact that Cabil had been driving for scheduled basis and one of-
school children only, from their homes to the St. Scholastica’s College in _______________
Metro Manila.7 They had hired him only after a two-week apprenticeship.
They had tested him for certain matters, such as whether he could 8 Supra note 5.
remember the names of the children he would be taking to school, which 9 Yamada v. Manila Railroad Co., 33 Phil. 8, 14 (1915).
were irrelevant to his qualification to drive on a long distance travel, 10 De Guzman v. Court of Appeals, 168 SCRA 612, 618 (1988); Bascos v.
especially considering that the trip to La Union was his first. The existence Court of Appeals, 221 SCRA 318 (1993).
of hiring procedures and supervisory policies cannot be casually invoked to 436
overturn 436 SUPREME COURT REPORTS ANNOTATED
_______________
Fabre, Jr. vs. Court of Appeals
5 Metro fering such service on an occasional, episodic or unscheduled basis. Neither
Manila Transit Corp. v. Court of Appeals, 223 SCRA
does Article 1732 distinguish between a carrier offering its services to the
521(1993); Campo v. Camarote, 100 Phil. 459 (1956).
6 Filamer Christian Institute v. Intermediate Appellate Court, 212 SCRA “general public,” i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment of the general
637 (1992).
population. We think that Article 1732 deliberately refrained from making suffering and mental anguish she endured as a result of the injuries caused
such distinctions. by petitioners’ negligence.
As common carriers, the Fabres were bound to exercise “extraordinary The award of exemplary damages and attorney’s fees was also properly
diligence” for the safe transportation of the passengers to their destination. made. However, for the same reason that it was error for the appellate court
This duty of care is not excused by proof that they exercised the diligence of to increase the award of compensatory damages, we hold that it was also
a good father of the family in the selection and supervision of their employee. error for it to increase the award of moral damages and reduce the award of
As Art. 1759 of the Code provides: attorney’s fees, inasmuch as private respondents, in whose favor the awards
Common carriers are liable for the death of or injuries to passengers through were made, have not appealed.13
the negligence or wilful acts of the former’s employees, although such As above stated, the decision of the Court of Appeals can be sustained
employees may have acted beyond the scope of their authority or in violation either on the theory of quasi delict or on that of breach of contract. The
of the orders of the common carriers. question is whether, as the two courts below held, petitioners, who are the
This liability of the common carriers does not cease upon proof that they owners and driver of the bus, may be made to respond jointly and severally
exercised all the diligence of a good father of a family in the selection and to private respondent. We hold that they may be. In Dangwa Trans. Co., Inc.
supervision of their employees. v. Court of Appeals,14 on facts similar to those in this case, this Court held
The same circumstances detailed above, supporting the finding of the trial the bus company and the driver jointly and severally liable for damages for
court and of the appellate court that petitioners are liable under Arts. 2176 injuries suffered by a passen-
and 2180 for quasi delict, fully justify finding them guilty of breach of _______________
contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.
Secondly, we sustain the award of damages in favor of Amyline Antonio. 12 Gatchalian v. Delim, 203 SCRA 126 (1991); Prudenciado v. Alliance
However, we think the Court of Appeals erred in increasing the amount of Transport System, Inc., 148 SCRA 440 (1987).
compensatory damages because private respondents did not question this 13 La Mallorca v. Court of Appeals, 175 SCRA 739 (1989).
award as inadequate.11 To the contrary, the award of P500,000.00 for 14 202 SCRA 574 (1991).
compensatory damages which the Regional Trial Court made is reasonable 438
considering the contingent nature of her income as a casual employee of a 438 SUPREME COURT REPORTS ANNOTATED
company and as distributor of beauty products and the fact that the
Fabre, Jr. vs. Court of Appeals
possibility that she
ger. Again, in Bachelor Express, Inc. v. Court of Appeals15 a driver found
_______________
negligent in failing to stop the bus in order to let off passengers when a
fellow passenger ran amuck, as a result of which the passengers jumped out
11Philippine Airlines v. Court of Appeals, 226 SCRA 423 (1993).
of the speeding bus and suffered injuries, was held also jointly and severally
437
liable with the bus company to the injured passengers.
VOL. 259, JULY 26, 1996 437 The same rule of liability was applied in situations where the negligence
Fabre,Jr. vs. Court of Appeals of the driver of the bus on which plaintiff was riding concurred with the
might be able to work again has not been foreclosed. In fact she testified that negligence of a third party who was the driver of another vehicle, thus
one of her previous employers had expressed willingness to employ her causing an accident. In Anuran v. Buño, 16 Batangas Laguna Tayabas Bus
again. Co. v. Intermediate Appellate Court,17 and Metro Manila Transit Corporation
With respect to the other awards, while the decisions of the trial court v. Court of Appeals,18 the bus company, its driver, the operator of the other
and the Court of Appeals do not sufficiently indicate the factual and legal vehicle and the driver of the vehicle were jointly and severally held liable to
basis for them, we find that they are nevertheless supported by evidence in the injured passenger or the latter’s heirs. The basis of this allocation of
the records of this case. Viewed as an action for quasi delict, this case falls liability was explained in Viluan v. Court of Appeals,19 thus:
squarely within the purview of Art. 2219(2) providing for the payment of Nor should it make any difference that the liability of petitioner [bus owner]
moral damages in cases of quasi delict. On the theory that petitioners are springs from contract while that of respondents [owner and driver of other
liable for breach of contract of carriage, the award of moral damages is vehicle] arises from quasi-delict. As early as 1913, we already ruled in
authorized by Art. 1764, in relation to Art. 2220, since Cabil’s gross Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger
negligence amounted to bad faith.12 Amyline Antonio’s testimony, as well as due to the negligence of the driver of the bus on which he was riding and of
the testimonies of her father and copassengers, fully establish the physical the driver of another vehicle, the drivers as well as the owners of the two
vehicles are jointly and severally liable for damages. Some members of the
Court, though, are of the view that under the circumstances they are liable pleading is not made insufficient by the insufficiency of one or more of the
on quasi-delict.20 alternative statements.”
It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals 21 this Rule 3, §6 provides: “Permissive joinder of parties.—All persons in whom
Court exonerated the jeepney driver from or against whom any right to relief in respect to or arising out of the same
_______________ transaction or series of transactions is alleged to exist, whether jointly,
severally, or in the alternative, may, except as otherwise provided in these
15 188 SCRA 216 (1990). rules, join as plaintiffs or be joined as
16 17 SCRA 224 (1966). 440
17 167 SCRA 379 (1988).
440 SUPREME COURT REPORTS ANNOTATED
18 223 SCRA 521 (1993).
19 16 SCRA 742 (1966).
Fabre, Jr. vs. Court of Appeals
20 Id., at 747. private respondent and her coplaintiffs do not recover twice for the same
21 189 SCRA 158 (1988). injury. What is clear from the cases is the intent of the plaintiff there to
recover from both the carrier and the driver, thus justifying the holding that
439
the carrier and the driver were jointly and severally liable because their
VOL. 259, JULY 26, 1996 439 separate and distinct acts concurred to produce the same injury.
Fabre,Jr. vs. Court of Appeals WHEREFORE, the decision of the Court of Appeals is AFFIRMED with
liability to the injured passengers and their families while holding the MODIFICATION as to the award of damages. Petitioners are ORDERED to
owners of the jeepney jointly and severally liable, but that is because that PAY jointly and severally the private respondent Amyline Antonio the
case was expressly tried and decided exclusively on the theory of culpa following amounts:
contractual. As this Court there explained:
The trial court was therefore right in finding that Manalo [the driver] and 1. 1)P93,657.11 as actual damages;
spouses Mangune and Carreon [the jeepney owners] were negligent. 2. 2)P500,000.00 as the reasonable amount of loss of earning capacity of
However, its ruling that spouses Mangune and Carreon are jointly and plaintiff Amyline Antonio;
severally liable with Manalo is erroneous. The driver cannot be held jointly 3. 3)P20,000.00 as moral damages;
and severally liable with the carrier in case of breach of the contract of 4. 4)P20,000.00 as exemplary damages;
carriage. The rationale behind this is readily discernible. Firstly, the 5. 5)25% of the recoverable amount as attorney’s fees; and
contract of carriage is between the carrier and the passenger, and in the 6. 6)costs of suit.
event of contractual liability, the carrier is exclusively responsible therefore
to the passenger, even if such breach be due to the negligence of his driver SO ORDERED.
(see Viluan v. The Court of Appeals, et al., G.R. Nos. L-21477-81, April 29, Regalado (Chairman), Romero, Puno and Torres, Jr., JJ., concur.
1966, 16 SCRA 742) . . .22 Judgment affirmed with modification.
As in the case of BLTB, private respondents in this case and her coplaintiffs _______________
did not stake out their claim against the carrier and the driver exclusively on
one theory, much less on that of breach of contract alone. After all, it was defendants in one complaint, where any question of law or fact common
permitted for them to allege alternative causes of action and join as many to all such plaintiffs or to all such defendants may arise in the action; but the
parties as may be liable on such causes of action 23 so long as court may make such orders as may be just to prevent any plaintiff or
_________________ defendant from being embarrassed or put to expense in connection with any
proceedings in which he may have no interest.”
22 Id., at 172-173. 441
23 La Mallorca v. Court of Appeals, 17 SCRA 739 (1966).
VOL. 259, JULY 26, 1996 441
Rule 8, §2 provides: “Alternative causes of action or defenses.—A party
may set forth two or more statements of a claim or defense alternatively or People vs. Diaz
hypothetically, either in one cause of action or defense or in separate causes Note.—Responsibility arising from negligence in the performance of
of action or defenses. When two or more statements are made in the every kind of obligation is demandable. (Metropolitan Bank and Trust
alternative and one of them if made independently would be sufficient, the Company vs. Court of Appeals, 237 SCRA 761 [1994])
——o0o——
experience certification. Re-entry applicants, aside from the foregoing Judge Geronimo S. Mangay, presiding.
requirements, are additionally supposed to submit company clearance for 528
shortages and damages and rev- 528 SUPREME COURT REPORTS ANNOTATED
_______________
Metro Manila Transit Corp. vs. Court of Appeals
bases of the evidence presented was, however, absolved from liability for the
4 Ibid., 36-41.
accident on the ground that it was not only careful and diligent in choosing
5 Ibid., 54.
6 Ibid., 57. and screening applicants for job openings but was also strict and diligent in
7 TSN, September 2, 1982, 4-16. supervising its employees by seeing to it that its employees were in proper
uniforms, briefed in traffic rules and regulations before the start of duty, and
that it checked its employees to determine whether or not they were positive and Bautista are still necessary; (2) the testimonies of witnesses Garbo and
for alcohol and followed other rules and regulations and guidelines of the Bautista may still be disturbed on appeal; and (3) the evidence presented
Bureau of Land Transportation and of the company. during the trial with respect to the proof of due diligence of petitioner MMTC
The trial court accordingly ruled: in the selection and supervision of its employees, particularly driver
“WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered Leonardo, is sufficient.
dismissing the complaint against the Metro Manila Transit Corporation and Prefatorily, private respondent questions the timeliness of the filing of
ordering defendants Agudo P. Calebag, Victorino Lamayo and Godofredo C. the petition at bar in view of the procedural stricture that the timely
Leonardo to pay plaintiffs, jointly and severally, the following: perfection of an appeal is both a mandatory and jurisdictional requirement.
This is a legitimate concern on the part of private respondent and presents
1. a)the sum of P10,000.00 by way of medical expenses; an opportune occasion to once again clarify this point as there appears to be
2. b)the sum of P5,000.00 by way of expenses of litigation; some confusion in the application of the rules and interpretative rulings
3. c)the sum of P15,000.00 by way of moral damages; regarding the computation of reglementary periods at this stage of the
4. d)the sum of P2,672.00 by way of loss of earnings; proceedings.
5. e)the sum of P5,000.00 by way of exemplary damages; The records of this case reveal that the decision of respondent Court of
6. f)the sum of P6,000.00 by way of attorney’s fees; and Appeals, dated October 31, 1991, was received by MMTC on November 18,
7. g)costs of suit. 199116 and it seasonably filed a motion for the reconsideration thereof on
November 28, 1991.17 Said motion for reconsideration was denied by
SO ORDERED.”11 respondent court in its resolution
Plaintiff’s motion to have that portion of the trial court’s decision absolving ________________
MMTC from liability reconsidered12having been denied for lack of merit,13 an
14 CA-G.R. CV No. 24680; per Justice Regina G. Ordoñez-Benitez, with
appeal was filed by her with respondent appellate court. After consideration
of the appropriate pleadings on appeal and finding the appeal meritorious, Justices Jose A.R. Melo and Emilio C. Cui, concurring; Rollo, 24-30.
15 Rollo, 33-34.
the Court of Appeals modified the trial court’s decision by holding MMTC
16 Ibid., 2.
solidarily liable with the other defendants for the damages awarded by the
17 Ibid., CA-G.R. CV No. 24680, 63-72.
trial court because of their concurrent negligence, concluding that while
there is no hard and fast rule as to what constitutes sufficient evidence to 530
prove that an em- 530 SUPREME COURT REPORTS ANNOTATED
________________ Metro Manila Transit Corp. vs. Court of Appeals
dated February 17, 1992, which in turn was received by MMTC on March 9,
11 Original Record, 177. 1992.18 Therefore, it had, pursuant to Section 1, Rule 45 of the Rules of
12 Ibid., 178-181. Court, fifteen (15) days therefrom or up to March 24, 1992 within which to
13 Ibid., 195.
file a petition for review on certiorari. Anticipating, however, that it may not
529 be able to file said petition before the lapse of the reglementary period
VOL. 223, JUNE 21, 1993 529 therefor, MMTC filed a motion on March 19, 1992 for an extension of thirty
Metro Manila Transit Corp. vs. Court of Appeals (30) days to file the present petition with proof of service of copies thereof to
ployer has exercised the due diligence required of it in the selection and respondent court and the adverse parties. The Court granted said motion,
supervision of its employees, based on the quantum of evidence adduced the with the extended period to be counted from the expiration of the
said appellate court was not disposed to say that MMTC had exercised the reglementary period.19Consequently, private respondent had thirty (30) days
diligence required of a good father of a family in the selection and from March 24, 1992 within which to file its petition, or up to April 23, 1992,
supervision of its driver, Godofredo Leonardo.14 and the eventual filing of said petition on April 14, 1992 was well within the
The Court of Appeals was resolute in its conclusion and denied the period granted by the Court.
motions for reconsideration of appellee Custodio and appellant MMTC in a We digress to reiterate, in view of erroneous submissions that we
resolution dated February 17, 1982,15 thus prompting MMTC to file the continue to receive, that in the case of a petition for review on certiorari from
instant petition invoking the review powers of this Court over the decision of a decision rendered by the Court of Appeals, Section 1, Rule 45 of the Rules
the Court of Appeals, raising as issues for resolution whether or not (1) the of Court, which has long since been clarified in Lacsamana vs. The Hon.
documentary evidence to support the positive testimonies of witnesses Garbo Second Special Cases Division of the Intermediate Appellate Court, et
al.,20 allows the same to be filed “within fifteen (15) days from notice of of the oral testimonies and considered the same as unrebutted, its
judgment or of the denial of the motion for reconsideration filed in due time, consideration should no longer be disturbed on appeal.23
and paying at the same time the corresponding docket fee.” In other words, Private respondent, on the other hand, retorts that the factual findings of
in the event a motion for reconsideration is filed and denied, the period of respondent court are conclusive upon the High Court which cannot be
fifteen (15) days begins to run all over again from notice of the denial burdened with the task of analyzing and weighing the evidence all over
resolution. Otherwise put, if a motion for reconsideration is filed, the again.24
reglementary period within which to appeal the decision of the Court of At this juncture; it suffices to note that factual findings of the
Appeals to the Supreme Court is reckoned from the date the party who ________________
intends to appeal received the order denying the motion for
reconsideration.21 Furthermore, a motion for extension of time to file a 22 100 Phil. 459 (1956).
petition for review may be filed with this Court within said reglementary 23 Memorandum for Petitioner, 11-15; Rollo, 16-21.
________________ 24 Comment of Private Respondent, 3-4; Rollo, 47-48.
532
18 Rollo, 2. 532 SUPREME COURT REPORTS ANNOTATED
19 Ibid., 7.
20 143 SCRA 643 (1986).
Metro Manila Transit Corp. vs. Court of Appeals
21 American General Insurance Co. vs. Intermediate Appellate Court, et trial court maybe reversed by the Court of Appeals, which is vested by law
with the power to review both legal and factual issues, if on the evidence of
al., 150 SCRA 133 (1987).
record, it appears that the trial court may have been mistaken25 particularly
531
in the appreciation of evidence, which is within the domain of the Court of
VOL. 223, JUNE 21, 1993 531 Appeals.26 The general rule laid down in a plethora of cases is that such
Metro Manila Transit Corp. vs. Court of Appeals findings of fact by the Court of Appeals are conclusive upon and beyond the
period, paying at the same time the corresponding docket fee. power of review of the Supreme Court.27 However, it is now well-settled that
1. The first two issues raised by petitioner shall be correlatively discussed while the findings of fact of the Court of Appeals are entitled to great
in view of their interrelation. respect, and even finality at times, that rule is not inflexible and is subject to
In its present petition, MMTC insists that the oral testimonies of its well established exceptions, to wit: (1) when the conclusion is a finding
employees who were presented as witnesses in its behalf sufficiently prove, grounded entirely on speculation, surmises and conjectures; (2) when the
even without the presentation of documentary evidence, that driver inference made is manifestly mistaken, absurd or impossible; (3) where there
Leonardo had complied with all the hiring and clearance requirements and is grave abuse of discretion; (4) when the judgment is based on a
had undergone all trainings, tests and examinations preparatory to actual misapprehension of facts; (5) when the findings of fact are conflicting; (6)
employment, and that said positive testimonies spell out of the rigid when the Court of Appeals, in making its findings, went beyond the issues of
procedure for screening of job applicants and the supervision of its the case and the same are contrary to the admissions of both appellant and
employees in the field. It underscore the fact that it had indeed complied appellee; (7) when the findings of the Court of Appeals are contrary to those
with the measure of diligence in the selection and supervision of its of the trial court; (8) when the findings of fact are conclusions without
employees as enunciated in Campo, et al. vs. Camarote, et al. 22 requiring an citation of specific evidence on which they are based; (9) when the facts set
employer, in the exercise of the diligence of a good father of a family, to forth in the petition, as well as in the petitioner’s main and reply briefs are
carefully examine the applicant for employment as to his qualifications, not disputed by the respondents and (10) when the findings of fact of the
experience and record service, and not merely be satisfied with the Court of Appeals are premised on the supposed absence of evidence and are
possession of a professional driver’s license. contradicted by the evidence on record.28
It goes on to say that since the testimonies of these witnesses were When, as in this case, the findings of the Court of Appeals and
allegedly neither discredited nor impeached by the adverse party, they ________________
should be believed and not arbitrarily disregarded or rejected nor disturbed
on appeal. It assiduously argues that inasmuch as there is no law requiring 25 San Miguel Corporation vs. Court of Appeals, et al., 185 SCRA
with the further note that the lower court having passed upon the relevancy 27 Cathay Insurance Co. vs. Court of Appeals, et al., 151 SCRA
29 Valenzuela, et al. vs. Court of Appeals, et al., 191 SCRA 1 (1991). 33 Annex B, ibid.; id., 28-29.
30 Roman Catholic Bishop of Malolos, et al. vs. Intermediate Appellate 34 Section 1, Rule 131, Rules of Court.
Court, et al., 191 SCRA 411 (1990). 35 Stronghold Insurance Company, Inc. vs. Court of Appeals, et
31 Cea vs. Villanueva, 18 Phil. 538 (1911); Barcelo, etc. vs. The Manila 535
Electric Railroad and Light Company, 29 Phil. 351 (1915); De la Riva vs. VOL. 223, JUNE 21, 1993 535
Molina, 32 Phil. 277 (1915); Agdoro vs. Philippine Mining Industrial Co., 45
Metro Manila Transit Corp. vs. Court of Appeals
Phil. 816 (1924).
32 Annex C, Petition; Rollo, 41-42. In fine, the party, wheter plaintiff or defendant, who assesrts 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. 36 It is entirely “Albert also testified that he kept records of the preliminary and final
within each of the parties discretion, consonant with the theory of the case it tests given him as well as a record of the qualifications and experience of
or he seeks to advance and subject to such procedural strategy followed each of the drivers of the company. It is rather strange, therefore, that he
thereby, to present all available evidence at its or his disposal in the manner failed to produce in court the all important record of Roberto, the driver
which may be deemed necessary and beneficial to prove its or his position, involved in this case.
provided only that the same shall measure up to the quantum of evidence “The failure of the defendant company to produce in court any ‘record’ or
required by law. In making proof in its or his case, it is paramount that the other documentary proof tending to establish that it had exercised all the
best and most complete evidence be formally entered.37 diligence of a good father of a family in the selection and supervision of its
Coming now to the case at bar, while there is no rule which requires that drivers and buses, notwithstanding the calls therefor by both the trial court
testimonial evidence, to hold sway, must be corroborated by documentary and the opposing counsel, argues strongly against its pretensions.
evidence, or even object evidence for that matter, inasmuch as the witnesses’ “We are fully aware that there is no hard-and-fast rule on the quantum of
testimonies dwelt on mere generalities, we cannot consider the same as evidence needed to prove due observance of all the diligence of a good father
sufficiently persuasive proof that there was observance of due diligence in of a family as would constitute a valid defense to the legal presumption of
the selection and supervision of employees.38 Petitioner’s attempt to prove negligence on the part of an employer or master whose employee has by his
its diligentissimi patris familias in the selection and supervision of negligence, caused damage to another. x x x (R)educing the testimony of
employees through oral evidence must fail as it was unable to buttress the Albert to its proper proportions, we do not have enough trustworthy evidence
same with any other evidence, object or documentary, which might obviate left to go by. We are of the considered opinion, therefore, that the believable
the apparent biased nature of the testimony.39 evidence on the degree of care and diligence that has been exercised in the
Our view that the evidence for petitioner MMTC falls short of the selection and supervision of Roberto Leon y Salazar, is not legally sufficient
required evidentiary quantum as would convincingly and undoubtedly prove to overcome the presumption of negligence against the defendant company.”
its observance of the diligence of a good father of a family has its precursor Whether or not the diligence of a good father of a family has been observed
in the underlying rationale pronounced in the earlier case of Central Taxicab by petitioner is a matter of proof which under the circumstances in the case
Corp. vs. Ex-Meralco Employees Transportation Co., et al.,40 set amidst an at bar has not been clearly established. It is not felt by the Court that there
al., 173 SCRA 619 (1989). is enough evidence on record as would overturn the presumption of
________________ negligence, and for failure to submit all evidence within its control,
assuming the putative existence thereof, petitioner MMTC must suffer the
36 Republic vs. Court of Appeals, et al., 182 SCRA 290 (1990), citing Tai consequences of its own inaction and indifference.
Tong Chuache & Co. vs. The Insurance Commission, et al., 158 SCRA 2. In any event, we do not find the evidence presented by petitioner
366(1988); Republic vs. Court of Appeals, et al., 204 SCRA 160 (1991). sufficiently convincing to prove the diligence of a good
37 U.S. vs. Tria, 17 Phil. 303 (1910). 537
38 See Pleno vs. Court of Appeals, et al., 161 SCRA 160 (1991).
VOL. 223, JUNE 21, 1993 537
39 See Garcia, et al. vs. Gonzales, et al., 183 SCRA 72 (1990).
40 54 O.G., No. 31, 7415 (1958).
Metro Manila Transit Corp. vs. Court of Appeals
father of a family, which for an employer doctrinally translates into its
536
observance of due diligence in the selection and supervision of its employees
536 SUPREME COURT REPORTS ANNOTATED but which mandate, to use an oft-quoted phrase, is more often honored in the
Metro Manila Transit Corp. vs. Court of Appeals breach than in the observance.
almost identical factual setting, where we held that: Petitioner attempted to essay in detail the company’s procedure for
“x x x. This witness spoke of an ‘affidavit of experience’ which a driver- screening job applicants and supervising its employees in the field, through
applicant must accomplish before he is employed by the company, a written the testimonies of Milagros Garbo, as its training officer, and Christian
‘time schedule’ for each bus, and a record of the inspections and thorough Bautista, as its transport supervisor, both of whom naturally and expectedly
checks pertaining to each bus before it leaves the car barn; yet no attempt testified for MMTC. It then concluded with its sweeping pontifications that
was ever made to present in evidence any of these documents, despite the “thus, there is no doubt that considering the nature of the business of
fact that they were obviously in the possession and control of the defendant petitioner, it would not let any applicant-drivers to be (sic) admitted without
company. undergoing the rigid selection and training process with the end (in) view of
xxx protecting the public in general and its passengers in particular; x x x thus,
there is no doubt that applicant had fully complied with the said
requirements otherwise Garbo should not have allowed him to undertake the damage. Negligence is imputed to them by law, unless they prove the
next set of requirements x x x and the training conducted consisting of contrary. Thus, the last paragraph of the article says that such responsibility
seminars and actual driving tests were satisfactory otherwise he should have ceases if it is proved that the persons who might be held responsible under it
not been allowed to drive the subject vehicle.”41 exercised the diligence of a good father of a family (diligentissimi patris
These statements strike us as both presumptuous and in the nature familias) to prevent damage. It is clear, therefore, that is it not
of petitio principii, couched in generalities and shorn of any supporting representation, nor interest, nor even the necessity of having somebody else
evidence to boost their verity. As earlier observed, respondent court could answer for the damages caused by the persons devoid of personality, but it is
not but express surprise, and thereby its incredulity, that witness Garbo the non-performance of certain duties of precaution and prudence imposed
neither testified nor presented any evidence that driver Leonardo had upon the persons who become responsible by civil bond uniting the actor to
complied with or had undergone all the clearances and trainings she took them, which forms the foundation of such responsibility.”44
pains to recite and enumerate. The supposed clearances, results of seminars ________________
and tests which Leonardo allegedly submitted and complied with were never
presented in court despite the fact that, if true, then they were obviously in 43 Andamo, et al. vs. Intermediate Appellate Court, et al., 191 SCRA
in relation to Article 2180, of the Civil Code provisions on quasi-delicts, as the Philippines, Vol. V, 1959 ed., 519.
all the elements thereof are present, to wit: 539
________________ VOL. 223, JUNE 21, 1993 539
Metro Manila Transit Corp. vs. Court of Appeals
41 Petition, 6-7; Rollo, 14-15.
42 Supra, Fn. 34. The above rule is, of course, applicable only where there is an employer-
employee relationship, although it is not necessary that the employer be
538
engaged in business or industry. Whether or not engaged in any business or
538 SUPREME COURT REPORTS ANNOTATED industry, the employer under Article 2180 is liable for torts committed by his
Metro Manila Transit Corp. vs. Court of Appeals employees within the scope of their assigned tasks. But, it is necessary first
(1) damages suffered by the plaintiff, (2) fault or negligence of the defendant to establish the employment relationship. Once this is done, the plaintiff
or some other person for whose act he must respond, and (3) the connection must show, to hold the employer liable, that the employee was acting within
of cause and effect between fault or negligence of the defendant and the the scope of his assigned task when the tort complained of was committed. It
damages incurred by plaintiff.43 It is to be noted that petitioner was is only then that the defendant, as employer, may find it necessary to
originally sued as employer of driver Leonardo under Article 2180, the interpose the defense of due diligence in the selection and supervision of
pertinent parts of which provide that: employees.45 The diligence of a good father of a family required to be
“The obligation imposed by article 2176 is demandable not only for one’s own observed by employers to prevent damages under Article 2180 refers to due
acts or omissions, but also for those of persons for whom one is responsible. diligence in the selection and supervision of employees in order to protect the
xxx public.46
“Employers shall be liable for damages caused by their employees and With the allegation and subsequent proof of negligence against the
household helpers acting within the scope of their assigned tasks, even defendant driver and of an employer-employee relation between him and his
though the former are not engaged in any business or industry. co-defendant MMTC in this instance, the case is undoubtedly based on a
xxx quasi-delict under Article 2180.47 When the employee causes damage due to
“The responsibility treated of in this article shall cease when the persons his own negligence while performing his own duties, there arises the juris
herein mentioned prove that they observed all the diligence of a good father tantum presumption that the employer is negligent,48 rebuttable only by
of a family to prevent damage.” proof of observance of the diligence of a good father of a family. For failure to
The basis of the employer’s vicarious liability has been explained under this rebut such legal presumption of negligence in the selection and supervision
ratiocination: of employees, the employer is likewise responsible for damages,49 the basis of
“The responsibility imposed by this article arises by virtue of a the liability being the relationship of pater familias or on the employer’s own
presumption juris tantum of negligence on the part of the persons made negligence.50
responsible under the article, derived from their failure to exercise due care ________________
and vigilance over the acts of subordinates to prevent them from causing
45 Martin vs. Court of Appeals, et al., 205 SCRA 591 (1992). 224(1966); Malipol vs. Tan, 55 SCRA 202 (1974); Poblete vs. Fabron, 93
46 Barredo vs. Garcia, 73 Phil. 607 (1942). SCRA 200 (1979); Pleno vs. Court of Appeals, et al., supra; Kapalaran Bus
47 Lanuzo vs. Ping, et al., 100 SCRA 205 (1980). Line vs. Coronado, 176 SCRA 792 (1989).
48 Bahia vs. Litonjua, et al., 30 Phil. 624 (1915); Campo vs. 52 Art. 1207, Civil Code.
also Franco, et al. vs. Intermediate Appellate Court, et al., 178 SCRA
al., supra. 331(1989).
51 56 Phil. 177 (1913); Cf. Barredo vs. Garcia, supra; Viluan vs. Court of 542
Appeals, et al., 16 SCRA 742, (1966); Anuran vs. Buño, 17 SCRA 542 SUPREME COURT REPORTS ANNOTATED
Metro Manila Transit Corp. vs. Court of Appeals Note.—To be entitled to damages for an injury resulting from the
proof thereof.”55 It is further a distressing commentary on petitioner that it negligence of another, a claimant must establish the relation between the
is a government-owned public utility, maintained by public funds, and omission and the damage (Fernando vs. Court of Appeals, 208 SCRA 714)
organized for the public welfare.
The Court feels it is necessary to once again stress the following rationale ——o0o——
behind these all-important statutory and jurisprudential mandates, for it
has been observed that despite its pronouncement in Kapalaran Bus Line vs. © Copyright 2019 Central Book Supply, Inc. All rights reserved.
Coronado, et al., supra, there has been little improvement in the transport
situation in the country:
“In requiring the highest possible degree of diligence from common carriers
and creating a presumption of negligence against them, the law compels
them to curb the recklessness of their drivers. While the immediate
beneficiaries of the standard of extraordinary diligence are, of course, the
passengers and owners of the cargo carried by a common carrier, they are
not the only persons that the law seeks to benefit. For if common carriers
carefully observe the statutory standard of extraordinary diligence in respect
of their own passengers, they cannot help but simultaneously benefit
pedestrians and the owners and passengers of other vehicles who are equally
entitled to the safe and convenient use of our roads and highways. The law
seeks to stop and prevent the slaughter and maiming of people (whether
passengers or not) and the destruction of property (whether freight or not)
on our highways by buses, the very size and power of which seem often to
inflame the minds of their drivers. x x x.”
Finally, we believe that respondent court acted in the exercise of sound
discretion when it affirmed the trial court’s award, without requiring the
payment of interest thereon as an item of damages just because of delay in
the determination thereof, especially since private respondent did not
specifically pray therefor in her complaint. Article 2211 of the Civil Code
provides that in quasi-delicts, interest as a part of the damages may be
awarded in the discretion of the court, and not as a matter of right. We do
not perceive that there have been intentional dilatory maneuvers or any
special circumstances which would justify that additional award and,
consequently, we find no reason to disturb said ruling.
WHEREFORE, the impugned decision of respondent Court of
________________
55Rollo, 28.
543
VOL. 223, JUNE 21, 1993 543
Villanueva vs. Sandiganbayan
Appeals is hereby AFFIRMED.
SO ORDERED.
Narvasa (C.J., Chairman) and Nocon, J., concur.
Padilla, J., On leave.
Decision affirmed.