Judgment and resolution reversed and set aside. defendants.

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: ____________

1. "1.Sofia C. Crouch, P31.92 and P16,000.00 as compensatory damages 2 Rollo at 9-10.

and P20,000.00 as moral damages. 3 Rollo at 14.
2. 2.Ignacio Castro Sr., P20,000.00 as moral damages. 449
3. 3.Ignacio Castro Jr., P20,000.00 as moral damages. VOL. 158, FEBRUARY 29, 1988 449
4. 4.Aurora Castro, P10,000.00 moral damages. Telefast Communications / Philippine Wireless, Inc. vs. Castro, Sr.
5. 5.Salvador Castro, P10,000.00 moral damages. by telegram. This, petitioner did not do, despite performance by said private
respondent of her obligation by paying the required charges. Petitioner was
___________ therefore guilty of contravening its obligation to said private respondent and
is thus liable for damages.
1Rollo at 8. This liability is not limited to actual or quantified damages. To sustain
448 petitioner's contrary position in this regard would result in an inequitous
situation where petitioner will only be held liable for the actual cost of a
1. 6.Mario Castro, P10,000.00 moral damages. telegram fixed thirty (30) years ago.
2. 7.Conrado Castro, P1 0,000 moral damages. We find Art. 2217 of the Civil Code applicable to the case at bar. It states:
3. 8.Esmeralda C. Floro, P20,000.00 moral damages. "Moral damages include physical suffering, mental anguish, fright, serious
4. 9.Agerico Castro, P10,000.00 moral damages. anxiety, besmirched reputation, wounded feelings, moral shock, social
5. 10.Rolando Castro, P10,000.00 moral damages. humiliation, and similar injury. Though incapable of pecuniary computation,
6. 11.Virgilio Castro, P10,000.00 moral damages. moral damages may be recovered if they are the proximate results of the
7. 12.Gloria Castro, P10,000.00 moral damages. defendant's wrongful act or omission." (Italics supplied).
Here, petitioner's act or omission, which amounted to gross negligence,
Defendant is also ordered to pay P5,000.00 attorney's fees, exemplary was precisely the cause of the suffering private respondents had to undergo.
damages in the amount of P1,000.00 to each of the plaintiffs and costs."2 As the appellate court properly observed:
On appeal by petitioner, the Intermediate Appellate Court affirmed the "[Who] can seriously dispute the shock, the mental anguish and the sorrow
trial court's decision but eliminated the award of P1 6.000.00 as that the overseas children must have suffered upon learning of the death of
compensatory damages to Sofia C. Crouch and the award of P1,000.00 to their mother after she had already been interred, without being given the
each of the private respondents as exem plary damages. The award of opportunity to even make a choice on whether they wanted to pay her their
P20,000.00 as moral damages to each of Sofia C. Crouch, Ignacio Castro, Jr. last respects? There is no doubt that these emotional sufferings were
and Esmeralda C. Floro was also reduced to P1 0,000.00 for each.3
proximately caused by appellant's omission and substantive law provides for 451
the justification for the award of moral damages."4 © Copyright 2019 Central Book Supply, Inc. All rights reserved.
We also sustain the trial court's award of P16,000.00 as compensatory
damages to Sofia C. Crouch representing the expenses she incurred when
she came to the Philippines from the United States to testify before the trial
court. Had petitioner not been remiss in performing its obligation, there
would have been no need for this suit or for Mrs. Crouch's testimony.
The award of exemplary damages by the trial court is likewise justified
and, therefore, sustained in the amount of P1 ,000.00 for each of the private
respondents, as a warning to all telegram

____________

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:

1. (1)P10,000.00 as moral damages, to each of private respondents;

2. (2)P1,000.00 as exemplary damages, to each of private respondents;
3. (3)P1 6,000.00 as compensatory damages, to private respondent Sofia
C. Crouch;
4. (4)P5,000.00 as attorney's fees; and
5. (5)Costs of suit.

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.).

consideration. There is no contract unless the following requi- 220

_______________ 220 SUPREME COURT REPORTS ANNOTATED
Cathay Pacific Airways, Ltd. vs. Vasquez
3357 SCRA 99 [2001].
opportunity arises. But, just like other privileges, such priority could be
219
waived. The Vazquezes should have been consulted first whether they
VOL. 399, MARCH 14, 2003 219 wanted to avail themselves of the privilege or would consent to a change of
Cathay Pacific Airways, Ltd. vs. Vasquez seat accommodation before their seat assignments were given to other
sites concur: (1) consent of the contracting parties; (2) an object certain passengers. Normally, one would appreciate and accept an upgrading, for it
which is the subject of the contract; and (3) the cause of the obligation which would mean a better accommodation. But, whatever their reason was and
is established.4Undoubtedly, a contract of carriage existed between Cathay however odd it might be, the Vazquezes had every right to decline the
and the Vazquezes. They voluntarily and freely gave their consent to an upgrade and insist on the Business Class accommodation they had booked
agreement whose object was the transportation of the Vazquezes from for and which was designated in their boarding passes. They clearly waived
Manila to HongKong and back to Manila, with seat: in the Business Class their priority or preference when they asked that other passengers be given
Section of the aircraft, and whose cause or consideration was the fare paid by the upgrade. It should not have been imposed on them over their vehement
the Vazquezes to Cathay. objection. By insisting on the upgrade, Cathay breached its contract of
The only problem is the legal effect of the upgrading of the seat carriage with the Vazquezes.
accommodation of the Vazquezes. Did it constitute a breach of contract? We are not, however, convinced that the upgrading or the breach of
Breach of contract is defined as the “failure without legal reason to contract was attended by fraud or bad faith. Thus, we resolve the second
comply with the terms of a contract.”5 It is also defined as the “[f]ailure, issue in the negative.
without legal excuse, to perform any promise which forms the whole or part Bad faith and fraud are allegations of fact that demand clear and
of the contract.”6 convincing proof. They are serious accusations that can be so conveniently
In previous cases, the breach of contract of carriage consisted in either and casually invoked, and that is why they are never presumed. They
the bumping off of a passenger with confirmed reservation or the amount to mere slogans or mudslinging unless convincingly substantiated by
downgrading of a passenger’s seat accommodation from one class to a lower whoever is alleging them.
class. In this case, what happened was the reverse. The contract between the Fraud has been defined to include an inducement through insidious
parties was for Cathay to transport the Vazquezes to Manila on a Business machination. Insidious machination refers to a deceitful scheme or plot with
Class accommodation in Flight CX-905. After checking-in their luggage at an evil or devious purpose. Deceit exists where the party, with intent to
the Kai Tak Airport in Hong Kong, the Vazquezes were given boarding cards deceive, conceals or omits to state material facts and, by reason of such
indicating their seat assignments in the Business Class Section. However, omission or concealment, the other party was induced to give consent that
during the boarding time, when the Vazquezes presented their boarding would not otherwise have been given.7
passes, they were informed that they had a seat change from Business Class Bad faith does not simply connote bad judgment or negligence; it imports
to First Class. It turned out that the Business Class was overbooked in that a dishonest purpose or some moral obliquity and conscious doing of a wrong,
there were more passengers than the number of seats. Thus, the seat a breach of a known duty through some motive or interest or ill will that
assignments of the Vazquezes were given to waitlisted passengers, and the partakes of the nature of fraud.8
Vazquezes, being members of the Marco Polo Club, were upgraded from _______________
Business Class to First Class.
 7Strong v. Repide, 41 Phil. 947, 956 [1909]. 222 SUPREME COURT REPORTS ANNOTATED
8Tan v. Northwest Airlines, Inc., 327 SCRA 263, 268 [2000]; Magat v.
Cathay Pacific Airways, Ltd. vs. Vasquez
Court of Appeals, 337 SCRA 298, 307 [2000]; Morris v. Court of Appeals,352
overbooking of the Business Class, there was no evidence of over-booking of
SCRA 428, 437 [2001]; Francisco v. Ferrer, 353 SCRA 261, 265 [2001].
the plane beyond ten percent, and no passenger was ever bumped off or was
221
refused to board the aircraft.
VOL. 399, MARCH 14, 2003 221 Now we come to the third issue on damages.
Cathay Pacific Airways, Ltd. vs. Vasquez The Court of Appeals awarded each of the Vazquezes moral damages in
We find no persuasive proof of fraud or bad faith in this case. The Vazquezes the amount of P250,000. Article 2220 of the Civil Code provides:
were not induced to agree to the upgrading through insidious words or Article 2220. Willful injury to property may be a legal ground for awarding
deceitful machination or through willful concealment of material facts. Upon moral damages if the court should find that, under the circumstances, such
boarding, Ms. Chiu told the Vazquezes that their accommodations were damages are justly due. The same rule applies to breaches of contract where
upgraded to First Class in view of their being Gold Card members of the defendant acted fraudulently or in bad faith.
Cathay’s Marco Polo Club. She was honest in telling them that their seats Moral damages include physical suffering, mental anguish, fright, serious
were already given to other passengers and the Business Class Section was anxiety, besmirched reputation, wounded feelings, moral shock, social
fully booked. Ms. Chiu might have failed to consider the remedy of offering humiliation, and similar injury. Although incapable of pecuniary
the First Class seats to other passengers. But, we find no bad faith in her computation, moral damages may be recovered if they are the proximate
failure to do so, even if that amounted to an exercise of poor judgment. result of the defendant’s wrongful act or omission. 11 Thus, case law
Neither was the transfer of the Vazquezes effected for some evil or establishes the following requisites for the award of moral damages: (1)
devious purpose. As testified to by Mr. Robson, the First Class Section is there must be an injury clearly sustained by the claimant, whether physical,
better than the Business Class Section in terms of comfort, quality of food, mental or psychological; (2) there must be a culpable act or omission
and service from the cabin crew; thus, the difference in fare between the factually established; (3) the wrongful act or omission of the defendant is the
First Class and Business Class at that time was $250. 9Needless to state, an proximate cause of the injury sustained by the claimant; and (4) the award
upgrading is for the better condition and, definitely, for the benefit of the for damages is predicated on any of the cases stated in Article 2219 of the
passenger. Civil Code.12
We are not persuaded by the Vazquezes’ argument that the overbooking Moral damages predicated upon a breach of contract of carriage may only
of the Business Class Section constituted bad faith on the part of Cathay. be recoverable in instances where the carrier is guilty of fraud or bad faith or
Section 3 of the Economic Regulation No. 7 of the Civil Aeronautics Board, where the mishap resulted in the death of a passenger. 13 Where in breaching
as amended, provides: the contract of carriage the airline is not shown to have acted fraudulently or
Sec. 3. Scope.—This regulation shall apply to every Philippine and foreign in bad faith, liability for damages is limited to the natural and probable
air carrier with respect to its operation of flights or portions of flights consequences of the breach of the obligation which the parties had foreseen
originating from or terminating at, or serving a point within the territory of or could
the Republic of the Philippines insofar as it denies boarding to a passenger _______________
on a flight, or portion of a flight inside or outside the Philippines, for which
he holds confirmed reserved space. Furthermore, this Regulation is designed Citytrust Banking Corporation v. Villanueva, 361 SCRA 446, 457
11

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——

_______________

19Rollo, pp. 50-51.

226
© Copyright 2019 Central Book Supply, Inc. All rights reserved.
 VOL. 182, FEBRUARY 28, 1990 899 and similar corporations, it is incumbent upon them to exercise a greater
amount of care and concern than that shown in this case. Every reasonable
Radio Communications of the Phils., Inc. vs. Rodriguez
effort to inform senders of the non-delivery of messages should be
G.R. No. 83768. February 28, 1990.* undertaken. From the pleadings filed by counsel in this case, RCPI does not
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI) and seem to be particularly concerned about its responsibility.
GLOBE MACKAY AND RADIO CORPORATION, petitioners, vs. RUFUS B. Same; Exemplary Damages; Award of exemplary damages, improper,
RODRIGUEZ, respondent. absent any showing that defendant acted in a wanton, fraudulent, reckless,
Damages; Moral Damages; Award of moral damages must be oppressive or malevolent manner.—The award of exemplary damages is not
proportionate to the suffering inflicted.—Nevertheless, we find the award of proper considering that there is no showing that RCPI acted in “a wanton,
P100,000.00 as moral damages in favor of respondent Ro-driguez excessive fraudulent, reckless, oppressive, or malevolent manner.” (Article 2232, New
and unconscionable. In the case of Prudenciado v. Alliance Transport Civil Code).
System, Inc. (148 SCRA 440 [1987]) we said: “x x x [I]t is undisputed that the Same; Attorney’s Fees; Reason for award of attorney’s fees must be
trial courts are given discretion to determine the amount of moral damages stated in the text of the trial court’s decision, otherwise, it must be disallowed
(Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can only on appeal.—Finally, petitioner RCPI objects to the award of attorney’s fees.
modify or change the amount awarded when they are palpably and Citing the case of Mirasol v. De la Cruz (84 SCRA 337 [1987]), RCPI
scandalously excessive ‘so as to indicate that it was the result of passion, contends that the award of attorney’s fees was improper because there was
prejudice or corruption on the part of the trial court’ (Gellada v. Warner no allegation in the complaint with respect to attorney’s fees; respondent
Barnes & Co., Inc., 57 O.G. (4) 7347, 7358; Sadie v. Bachrach Motors Co., Rodriguez did not present any evidence to prove attorney’s fees and the
Inc., 57 O.G. [4] 636 and Adone v. Bachrach Motor Co., Inc., 57 O.G. 656). decision failed to explain why attorney’s fees are being awarded. We agree.
But in more recent cases where the awards of moral and exemplary damages In the recent case of Stronghold Insurance Company, Inc. v. Court of
are far too excessive compared to the actual losses sustained by the Appeals, (G.R. No. 88376, May 29, 1989), we ruled: “In Abrogar v.
aggrieved party, this Court ruled that they should be reduced to more Intermediate Appellate Court (G.R. No. 67970, January 15, 1988, 157 SCRA
reasonable amounts. x x x” In any case the Court held that ‘moral damages 57) the Court had occasion to state that ‘[t]he reason for the award of
are emphatically not intended to enrich a complainant at the expense of a attorney’s fees must be stated in the text of the court’s decision, otherwise, if
defendant. They are awarded only to enable the injured party to obtain it is stated only in the dispositive portion of the decision, the same must be
means, diversion or amusements that will serve to alleviate the moral disallowed on appeal.’ (at p. 61 citing Mirasol v. dela Cruz, G.R. No. L-32552,
suffering he has undergone, by reason of the defen-dants’ culpable action.’ July 31, 1978, 84 SCRA 337).” A cursory reading of the trial court’s decision
The award of moral damages must be proportionate to the suffering inflicted shows that the award of attorney’s fees was stated only once ___“As for
(R & B Surety & Insurance Co., Inc. v. Intermediate Appellate Court, 129 attorney’s fees, the court finds that the amount of P20,000.00 including
SCRA 745 [1984] citing Grand Union Supermarket, Inc. v. Espino, Jr., 94 litigation expenses are reasonable”—just below the dispositive portion of the
SCRA 966.” (Italics sup- decision which reads: “WHEREFORE
_______________ 901
VOL. 182, FEBRUARY 28, 1990 90
* THIRD DIVISION.
900 1
9 SUPREME COURT REPORTS ANNOTATED Radio Communications of the Phils., Inc. vs. Rodriguez
00 judgment is hereby rendered ordering the defendants jointly and
severally liable to pay the plaintiff the total sum of TWO HUNDRED
Radio Communications of the Phils., Inc. vs. Rodriguez THIRTEEN THOUSAND ONE HUNDRED FORTY EIGHT PESOS
plied) (P213,148.00) by way of damages and to pay the costs of this suit.” The trial
Same; Same; Telecommunications companies are expected to exercise court failed to justify the payment of attorney’s fees by RCPI, therefore, the
greater amount of care and concern than that shown in this case.—Be that as award of attorney’s fees as part of its liability should be disallowed and
it may, damages are warranted. People depend on telecommunications deleted.
companies in times of deep emotional stress or pressing financial needs.
Knowing that messages about the illnesses or deaths of loved ones, births or PETITION for certiorari to review the decision of the Court of Appeals.
marriages in a family, important business transactions, and notices of
conferences or meetings as in this case, are coursed through the petitioner The facts are stated in the opinion of the Court.
 Salalima, Ungos and David for petitioners. addressee was no longer staying there. This fact was not accordingly
Maximo G. Rodriguez for private respondent. reported to Rodriguez in Metro Manila. The undelivered cablegram was not
returned by the correspondent abroad to Globe for disposition in the
GUTIERREZ, JR., J.: Philippines.
“On December 8, 1978, Rodriguez filed a complaint for compensatory
This petition for review on certiorari seeks to reverse the decision of the damages in the amount of P45,147.00, moral damages in the amount of
Court of Appeals which affirmed the decision of the then Court of First P200,000.00, and exemplary damages in the amount of P50,000.00 against
Instance of Rizal, Branch 17-B, Quezon City in Civil Case No. Q-26623 RCPI and GLOBE.
ordering petitioner Radio Communications of the Philippines, Inc. [RCPI] “On March 17, 1980, the then Presiding Judge Lino L. Añover of the
and their co-defen-dant Globe Mackay and Radio Corporation (Globe Court of First Instance of Rizal rendered a decision, the dispositive portion of
Mackay), jointly and severally to pay the plaintiff, private respondent which reads as follows:
herein, a total amount of Two Hundred Thirteen Thousand One Hundred “ ‘WHEREFORE, judgment is hereby rendered ordering the defendants
Forty Eight Pesos (P213,148.00) broken down as follows: a) P100,000.00 as jointly and severally to pay the plaintiff the total sum of TWO HUNDRED
moral damages; b) P50,000.00 as exemplary damages; c) P43,148.00 as THIRTEEN THOUSAND ONE HUNDRED FORTY EIGHT PESOS
actual damages; and d) P20,000.00 as attorney’s fees by way of damages. (P213,148.00) by way of damages and to pay the costs of this suit.’
This is the second time that this case has been brought to us. The first “The above amount is broken down as follows by the trial court:
was when petitioner RCPI questioned the decision of the Court of Appeals “ ‘Moral damages consequent to the humiliation and embarrassment that the
which refused to set aside the orders of the lower court directing execution plaintiff suffered under the two causes of action in the amount of
pending appeal of the money awards. In that case (G.R. No. 59311, 134 P100,000.00 are adequate. Exemplary damages under both counts are fixed
SCRA [1985]) we set aside the decision of the appellate court and entered a reasonably at P50,000.00. On the actual damages, the court accepts
new order authorizing execution pending appeal of the award of actual plaintiff’s expenses for the preparation of the trip at P10,000.00; plane fare
damages but enjoining the execution of the award of moral damages, at P20,000.00;
exemplary damages and attorney’s fees until after the resolution of the 903
issues in the main case. We summarized the facts of the case as follows: VOL. 182, FEBRUARY 28, 1990 903
902
Radio Communications of the Phils., Inc. vs. Rodriguez
902 SUPREME COURT REPORTS ANNOTATED stay in transit in Pakistan at P5,000.00; his hotel bills in Khar-toum at
Radio Communications of the Phils., Inc. vs. Rodriguez P4,000.00; his meals in Khartoum at P4,000.00 and the telegraphic toll at
“On September 8, 1978, Rufus B. Rodriguez, as President of the World P78.00. The court refuses the sum spent for the dinner that he allegedly
Association of Law Students (WALS), sent two cablegrams overseas through tendered as not established by sufficient proof.
RCPI, one addressed to Mohamed Elsir Taha in Khartoum, Sudan Socialist “ ‘With respect to the telegram sent to Diane Merger, the court finds that
Union, and the other to Diane Merger in Athens, Georgia, United States. the actual damages amount to P70.00 representing the cost of cablegram. As
The cablegrams were, in turn, relayed to GLOBE for transmission to their for attorney’s fees, the court finds that the amount of P20,000.00 including
foreign destinations. The telegram to Taha advised him of Rodriguez’s litigation expenses are reasonable.’ ” (at pp. 396-398)
pending arrival in Khartoum on September 18, 1978, while the telegram to Upon appeal, the Court of Appeals affirmed the lower court’s decision. A
Merger advised her of the scheduled WALS conference in Khartoum. motion for reconsideration was denied.
Rodriguez left the Philip-pines on September 15, 1978. On September 18, Hence, this petition filed by RCPI. The title of the case includes Globe
1978, he arrived in Khartoum, Sudan at 9:30 in the evening. Nobody was at Mackay but the petition proper and the name on counsel show that only
the airport to meet him. Due to the lateness of the hour, he was forced to RCPI comes to this Court through the petition. Globe Mackay did not join as
sleep at the airport. He lined up five (5) chairs together and lay down with petitioner and its counsel Atty. Romulo P. Atencia did not sign the petition.
his luggages near him. Because of the non-receipt of the cablegram, Taha The issues raised by petitioner RCPI are two-fold—1) whether or nor
was not able to meet him. Worse all preparations for the international petitioner RCPI is responsible for the non-delivery of the two (2) telegrams
conference had to be cancelled. Furthermore, Fernando Barros, the Vice- notwithstanding the fact that RCPI relayed said telegrams to Globe Mackay
President, arrived the next day from Chile, followed by the other officers and 2) whether or not under the attendant facts and circumstances
from other countries except Diane Merger, the organization’s secretary. It petitioner RCPI is liable for moral damages in the amount of P100,000.00;
turned out that the wire sent by Rodriguez to Merger was delivered to the exemplary damages in the amount of P50,000.00; actual damages in the
address on the message but the person who delivered it was told that the amount of P43,148.00 and attorney’s fees in the amount of P20,000.00.
 RCPI insists that its responsibility vis-a-vis the two (2) telegrams ceased destinations and conducts its business to transmit foreign messages only
after it relayed and transmitted the telegrams on the same day they were through Globe Mackay. To allow it to escape liability for damages by
filed to Globe Mackay. It argues that it was not incumbent upon RCPI to attributing sole negligence to Globe Mackay for the expedient reason that it
advise respondent Rodriguez the status of his telegrams because Globe had
Mackay did not also inform RCPI what happened to the telegrams since the 905
respective operating agency of the country of destination did not also inform VOL. 182, FEBRUARY 28, 1990 905
Globe Mackay about the non-delivery of the telegrams.
Radio Communications of the Phils., Inc. vs. Rodriguez
Moreover, RCPI blames respondent Rodriguez for the non-delivery of the
already delivered the messages to the latter would deprive the general public
two telegrams. Regarding the telegram addressed to Elsir Taha, RCPI avers
availing of the services of RCPI of an effective and adequate remedy.
that it has an incomplete address as it did not include P.O. Box 1850 per
(See Radio Communications of the Phil-ippines, Inc. (RCPI) v. Court of
instruction of Taha in an earlier cable asking for respondent to reply via
Appeals, 143 SCRA 657 [1986]). It cannot simply wash its hands of all
telex, to wit:
responsibility.
904
RCPI’s similar attempt to pass the total blame for the non-delivery of the
904 SUPREME COURT REPORTS ANNOTATED telegram intended for Taha to respondent Ro-driguez is not supported by the
Radio Communications of the Phils., Inc. vs. Rodriguez records. The evidence clearly demonstrates that an earlier cablegram dated
“x x x send me a telegram immediately after receiving this one a telex July 27, 1978 (Exhibit “E”) similarly addressed to Taha, Africa, Youth
number if any. Thanks. Mohammed Elsir Taha Regional Director WALS Committee, Khartoum, SSU and without P.O. Box 1850 was received by
Africa Youth Committee SSU, Khartoum, P.O. Box 1850. (Exhibit “D”).” Taha. This is conclusively shown by a cable (Exhibit “F”) addressed by Taha
(Rollo, p. 27) to respondent Rodriguez acknowledging the receipt of the July 27 cablegram.
In regard to the telegram addressed to Diane Merger which she did not Evidence was also introduced to show that the Africa Youth Committee is a
receive because she had moved to another place RCPI avers that respondent very important office in Khartoum, Sudan and the building that houses it is
Rodriguez was partly at fault for not verifying the address of Diane before a very popular building known to the people.
sending the telegram and that Merger was negligent by not leaving her We rule that the arguments about the alleged negligence on the part of
forwarding address with the present occupant of the apartment she vacated. respondent Rodriguez in not verifying the address of Diane Merger before
Petitioner RCPI is a domestic corporation engaged in the business of sending the telegram and also the alleged negligence on the part of Merger
receiving and transmitting messages. Mr. Alfredo Catolico, Jr., manager, for not leaving a forwarding address do not deserve much consideration.
Customer and Relations Office testified that RCPI does not have facilities for Considering the public utility nature of RCPI’s business and its contractual
foreign countries, hence it has a contract to course all international obligation to transmit messages, it should exercise due diligence to ascertain
communications thru Globe Mackay. On the other hand, Wenceslao Felix, that messages are delivered to the persons at the given address and should
the Traffic Operations Manager of Globe Mackay testified that Globe provide a system whereby in cases of undelivered messages the sender is
Mackay has an inter-connecting agreement with RCPI under which the given notice of non-delivery. Messages sent by cable or wireless means are
latter’s international messages are coursed thru Globe Mackay in the same usually more important and urgent than those which can wait for the mail.
way that local and domestic messages received by Globe Mackay are coursed For recovery of damages, Article 2217 of the New Civil Code applies. It is
thru RCPI. provided therein that: “Moral damages include physical suffering, mental
Respondent Rodriguez and RCPI entered into a contract whereby for a anguish, fright, serious anxiety, be-smirched reputation, wounded feeling,
fee RCPI undertook to send the respondent’s messages overseas. When, moral shock, social humiliation, and similar injury. Though incapable of
therefore, respondent Rodriguez paid RCPI to deliver his messages overseas pecuniary computation, moral damages may be recovered if they are the
by telegram, RCPI obligated itself to transmit the messages to the proximate result of the defendant’s wrongful act or omission.” (Italics
addressee. Clearly, RCPI reneged on its obligation when it failed to deliver supplied)
the messages or to inform the sender about the non-delivery, thus making it There is no doubt that RCPI’s failure to deliver the two questioned
liable for damages. (Article 1170, Civil Code; Article 2176; see also Telefast telegrams resulted in the suffering that respondent
Communication/Philippine Wireless, Inc. v. Castro, Sr., 158 SCRA 906
445 [1988]). 906 SUPREME COURT REPORTS ANNOTATED
Parenthetically, RCPI cannot escape liability for damages by passing off
Radio Communications of the Phils., Inc. vs. Rodriguez
the blame for negligence to Globe Mackay. It has an inter-connecting
Rodriguez had to undergo.
agreement with Globe Mackay. RCPI receives messages for overseas
 Respondent Rodriguez left Manila for Khartoum, Sudan believing that the actual losses sustained by the aggrieved party, this Court ruled that they
Taha received his telegram and would meet him at the airport. He related should be reduced to more reasonable amounts.
his experience at the airport of Khar-toum, Sudan as follows: “Thus, in the case of San Andres v. Court of Appeals (116 SCRA
“Q. All right, from 9:30 in the evening up to 12:00 midnight, was there any 85 [1982]) the Supreme Court ruled that while the amount of moral damages
person or officer of the World Association of Law Students who met you? is a matter left largely to the sound discretion of a court, the same when
found excessive should be reduced to more reasonable amounts, considering
“A. None. the attendant facts and circumstances. Moral damages, though incapable of
“Q. Now, inform the Court what was your feeling during that time in a foreign pecuniary estimation, are in the category of an award designed to
country? compensate the claimant for actual injury suffered and not to impose a
“A. First of all, when I arrived at 9:30 A.M., I was thinking that Mr. Taha was penalty on the wrongdoer.
first late in fetching me but when it was already 10:30 to 11:00 P.M., I was “In a much later case (Siguenza v. Court of Appeals, 137 SCRA 578-
579 [1985]), the Supreme Court, reiterating the above ruling, reduced the
already afraid because there was no one there that I know and it was already awards of moral and exemplary damages which were far too excessive
late in the evening that I could not go to the address of Mr. Taha. (TSN compared to the actual losses sustained by the aggrieved parties and where
pages 18 and 19, August 20, 1979). the records show that the injury suffered was not serious or gross and,
“Q. What were you doing at that time from 9:30 in the evening until 6:00 in the therefore, out of proportion to the amount of damages generously awarded
morning? by the trial court.
“In any case the Court held that ‘moral damages are emphatically not
“A. I was every tired and what I did was pulled five chairs together. I remember
intended to enrich a complainant at the expense of a defendant. They are
there were about ten (10) persons and some tourists in that restaurant. I got awarded only to enable the injured party to obtain means, diversion or
five chairs together and laid my baggage trying to sleep but which I was not amusements that will serve to alleviate the moral suffering he has undergone,
able to do because of fear and anxiety. (TSN, pages 10 and 11, August 20, by reason of the defendants’ culpable action.’ The award of moral damages
1979).” (Rollo, p. 15) must be proportionate to the suffering inflicted (R & B Surety & Insurance
We are convinced that respondent Rodriguez suffered a certain degree of Co., Inc. v. Intermediate Appel-late Court, 129 SCRA 745 [1984]
mental anguish, fear and anxiety considering his experience at the airport of citing Grand Union Supermarket, Inc. v. Espino, Jr., 94 SCRA 966).” (Italics
a foreign country. His suffering was caused by the non-appearance of Taha supplied)
who did not receive the telegram sent by the respondent due to the gross The respondent is not entirely blameless for the problems which befell him.
negligence of RCPI. There is moreover, the dismay arising from the fact, that Apart from the various arguments raised by RCPI in its petition, there are
after so much preparation and travel on the part of Rodriguez, his pains other factors to be considered in fixing the amount of damages. Anybody who
were all for nothing. Hence, RCPI is liable for moral damages. has been involved in international conferences and meetings knows that a
Nevertheless, we find the award of P100,000.00 as moral damages in telegram is not adequate preparation. Considering the lackaidaisi-
favor of respondent Rodriguez excessive and uncon-scionable. In the case 908
of Prudenciado v. Alliance Transport System, Inc. (148 SCRA 440 [1987]) we 908 SUPREME COURT REPORTS ANNOTATED
said: Radio Communications of the Phils., Inc. vs. Rodriguez
907 cal attitude of public utility employees in the Philippines and presumably in
VOL. 182, FEBRUARY 28, 1990 907 Africa, the head of an international student organization cannot simply send
Radio Communications of the Phils., Inc. vs. Rodriguez a telegram and nonchalantly assume that every preparation will proceed as
“x x x [I]t is undisputed that the trial courts are given discretion to he anticipates it. The planning expertise and degree of thoroughness
determine the amount of moral damages (Alcantara v. Surro, 93 Phil. 472) incumbent upon conference organizers is missing from the records. The trial
and that the Court of Appeals can only modify or change the amount court appears to have been influenced by the impressive title of World
awarded when they are palpably and scandalously excessive ‘so as to Association of Law Students. There is nothing in the records pointing to a
indicate that it was the result of passion, prejudice or corruption on the part certain degree of distinction earned by WALS which would warrant
of the trial court’ (Gellada v. Warner Barnes & Co., Inc., 57 O.G. [4] 7347, substantial damages because of a failed meeting.
7358; Sadie v. Bachrach Motors Co., Inc., 57 O.G. [4] 636 and Adone v. Be that as it may, damages are warranted. People depend on
Bachrach Motor Co., Inc., 57 O.G. 656). But in more recent cases where the telecommunications companies in times of deep emotional stress or pressing
awards of moral and exemplary damages are far too excessive compared to financial needs. Knowing that messages about the illnesses or deaths of
loved ones, births or marriages in a family, important business transactions, We agree. In the recent case of Stronghold Insurance Company, Inc. v.
and notices of conferences or meetings as in this case, are coursed through Court of Appeals, (G.R. No. 88376, May 29, 1989), we ruled:
the petitioner and similar corporations, it is incumbent upon them to “In Abrogar v. Intermediate Appellate Court (G.R. No. 67970, January 15,
exercise a greater amount of care and concern than that shown in this case. 1988, 157 SCRA 57) the Court had occasion to state that ‘[t]he reason for the
Every reasonable effort to inform senders of the non-delivery of messages award of attorney’s fees must be stated in the text of the court’s decision,
should be undertaken. From the pleadings filed by counsel in this case, RCPI otherwise, if it is stated only in the dispositive portion of the decision, the
does not seem to be particularly concerned about its responsibility. same must be disallowed on appeal.’ (at p. 61 citing Mirasol v. dela
We rule that the amount of P10,000.00 as moral damages in favor of the Cruz, G.R. No. L-32552, July 31, 1978, 84 SCRA 337).”
respondent would be reasonable considering the facts and circumstances A cursory reading of the trial court’s decision shows that the award of
surrounding the petitioner’s liability. attorney’s fees was stated only once—“As for attor-ney’s fees, the court finds
The award of exemplary damages is not proper considering that there is that the amount of P20,000.00 including litigation expenses are
no showing that RCPI acted in “a wanton, fraudulent, reckless, oppressive, reasonable”—just below the disposi-
or malevolent manner.” (Article 2232, New Civil Code). 910
Respondent Rodriguez was awarded the total amount of P43,148.00 as 910 SUPREME COURT REPORTS ANNOTATED
actual or compensatory damages broken down as follows: (a) P10,000.00 for
Radio Communications of the Phils., Inc. vs. Rodriguez
the preparation of the trip; (b) P20,000.00 for plane fare; (c) P5,000.00 for
tive portion of the decision which reads: “WHEREFORE judgment is hereby
respondent’s stay in transit in Pakistan; (d) P4,000.00 for hotel bills in
rendered ordering the defendants jointly and severally liable to pay the
Khartoum; (e) P78.00 for the telegraphic toll, and P70.00 for the cost of the
plaintiff the total sum of TWO HUNDRED THIRTEEN THOUSAND ONE
cablegram sent to Diane Merger. The trial court rejected the expenses
HUNDRED FORTY EIGHT PESOS (P213,148.00) by way of damages and to
allegedly incurred by the respondent for a dinner he tendered for the officers,
pay the costs of this suit.” The trial court failed to justify the payment of
organizers and students at Khartoum for insufficiency of evidence. It is to be
attorney’s fees by RCPI, therefore, the award of attorney’s fees as part of its
noted that the petitioner
liability should be disallowed and deleted.
909
WHEREFORE, the instant petition is PARTLY GRANTED. The
VOL. 182, FEBRUARY 28, 1990 909 questioned decision of the respondent court is MODIFIED. The award
Radio Communications of the Phils., Inc. vs. Rodriguez directing Radio Communications of the Philippines, Inc., to pay P100,000.00
does not controvert the amounts. Instead, the petitioner concentrates its moral damages is reduced to P10,000.00. The award ordering it to pay
opposition to the award of actual damages on the argument that the exemplary damages and attor-ney’s fees is DELETED. In all other respects,
respondent’s expenses were actually paid by the organization and the the questioned decision is AFFIRMED. Costs against the petitioner.
Sudanese government. The petitioner, however, fails to substantiate its SO ORDERED.
allegations with clear proof. On the other hand, what is evident on record is Fernan (C.J., Chairman), Feliciano, Bidin and Cortés, JJ., concur.
that due to the non-receipt of the telegram which would have confirmed the Petition partly granted. Decision modified.
scheduled conference on September 20, 1978, Taha cancelled all Notes.—Contributory negligence justifies reduction of moral damages.
preparations and stopped the soliciting of funds for the conference which (Laguna-Tayabas Bus Co. vs. Cornista, 11 SCRA 181.)
would have included the expenses of the respondent. As a result of the If breach of contract is not malicious or fraudulent, award of moral
cancellation of the conference, triggered by the non-delivery of the telegrams, damages is not justified. (Francisco vs. GSIS, 75 SCRA 577.)
the officers were constrained to schedule another meeting in Santiago, Chile
in April 1979. Therefore, we see no reason to disturb these findings of the ——o0o——
trial court affirmed by the appellate court as these were not sufficiently
controverted by the petitioner (See Ganzon v. Court of Appeals, 161 SCRA 911
646 [1988]). © Copyright 2019 Central Book Supply, Inc. All rights reserved.
Finally, petitioner RCPI objects to the award of attorney’s fees. Citing the
case of Mirasol v. De la Cruz (84 SCRA 337 [1987]), RCPI contends that the
award of attorney’s fees was improper because there was no allegation in the
complaint with respect to attorney’s fees; respondent Rodriguez did not
present any evidence to prove attorney’s fees and the decision failed to
explain why attorney’s fees are being awarded.
 VOL. 21, SEPTEMBER 29, 1967 279 APPEAL from a decision of the Court of First Instance of Manila.
Republic vs. Luzon Stevedoring Corporation
The facts are stated in the opinion of the Court.
No. L-21749. September 29, 1967. Solicitor General for plaintiff-appellee.
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee, vs.LUZON H. San Luis and L.V. Simbulan for defendant-appellant.
STEVEDORING CORPORATION, defendant-appellant.
Remedial law; Appeals; Effect of direct appeal to Supreme Court,—The REYES, J.B.L., J.:
established rule in this jurisdiction is that when a party appeals directly to
the Supreme Court, and submits his case there for decision, he is deemed to The present case comes by direct appeal from a decision of the Court of First
have waived the right to dispute any finding of fact made by the trial court. Instance of Manila (Case No. 44572) adjudging the defendant-appellant,
The only questions that may be raised are those of law. Luzon Stevedoring Corporation, liable in damages to the plaintiffappellee
Same; Effect of appeal to Court of Appeals; Reason for the rule.—A Republic of the Philippines.
party who resorts to the Court of Appeals, and submits his case for decision In the early afternoon of August 17, 1960, barge L-1892, owned by the
there, is barred from contending later that his claim was beyond the Luzon Stevedoring Corporation was being towed down the Pasig river by
jurisdiction of the aforesaid Court. The reason is that a contrary rule would tugboats “Bangus” and “Barbero”1 also belonging to the same corporation,
encourage the undesirable practice of appellants' submitting their cases for when the barge rammed against one of the wooden piles of the Nagtahan
decision to either court in expectation of favorable judgment, but with intent bailey bridge, smashing the posts and causing the bridge to list. The river, at
of attacking its jurisdiction should the decision be unfavorable. the time, was swollen and the current swift, on account of the heavy
Civil law; Damages; Presumption of negligence; Case at bar— downpour of Manila and the surrounding provinces on August 15 and 16,
Considering that the Nagtahan bridge was an immovable and stationary 1960.
object and uncontrovertedly provided with adequate openings for the Sued by the Republic of the Philippines for actual and consequential
passage of water craft, including barges like those of appellant's, it is damage caused by its employees, amounting to P200,000 (Civil Case No.
undeniable that the unusual event that the barge, exclusively controlled by 44562, CFI of Manila), defendant Luzon Stevedoring Corporation disclaimed
appellant, rammed the bridge supports raises a presumption of negligence liability therefor, on the grounds that it had exercised due diligence in the
on the part of appellant or its employees manning the barge or the tugs that selection and supervision of its employees; that the damages to the bridge
towed it. In the ordinary course of events, such a thing does not happen if were caused by force majeure; that plaintiff has no capacity to sue; and that
proper care is used. In Anglo American Jurisprudence, the inference arises the Nagtahan bailey bridge is an obstruction to navigation.
by what is known as the “res ipsa loquitur”rule. After due trial, the court rendered judgment on June 11, 1963, holding
Same; Meaning of “caso fortuito” or “force majeure”. —Caso the defendant liable for the damage caused by its employees and ordering it
fortuito or force majeure (which in law are identical in so far as they exempt to pay to plaintiff the actual cost of the repair of the Nagtahan bailey bridge
an obligor from liability) by definition are extra-ordinary events not which amounted to P192,561.72, with legal interest thereon from the date of
foreseeable or avoidable, “events that could not be foreseen, or which, though the filing of the complaint.
foreseen, were inevitable” (Art. 1174, Civil Code). It is, therefore, not enough _______________
that the event could not have been foreseen or anticipated, as is commonly
believed, but it must be one impossible to foresee or to avoid. The 1The lead-tugboat “Bangus” was pulling the barge, while the tugboat
mere difficulty to foresee the happening is not impossibility to foresee the “Barbero” was holding or restraining it at the back.
same: “un hecho no constituye caso fortuito por la sola circunstancia de que 281
su existencia haga mas dificil o mas onerosa la accion diligente del presento
VOL. 21, SEPTEMBER 29, 1967 281
ofensor.”
Evidence; Reception of additional evidence is discretionary with trial Republic vs. Luzon Stevedoring Corporation
judge.—Whether or not further evidence will be allowed after a party Defendant appealed directly to this Court assigning the following errors
offering the evidence has rested his case lies within the sound discretion of allegedly committed by the court a quo, to wit:
the trial Judge, and this discretion will not be reviewed except in clear case
of abuse. 1. I—The lower court erred in not holding that the herein defendant-
280 appellant had exercised the diligence required of it in the selection
280 SUPREME COURT REPORTS ANNOTATED and supervision of its personnel to prevent damage or injury to
others.
Republic vs. Luzon Stevedoring Corporation
 2. II—The lower court erred in not holding that the ramming of the appellant’s, it is undeniable that the unusual event that the barge,
Nagtahan bailey bridge by barge L-1892 was caused by force exclusively controlled by appellant, rammed the bridge supports raises a
majeure. presumption of negligence on the part of appellant or its employees manning
3. III—The lower court erred in not holding that the Nagtahan bailey the barge or the tugs that towed it. For in the ordinary course of events, such
bridge is an obstruction, if not a menace, to navigation in the Pasig a thing does not happen if proper care is used. In Anglo American
river. Jurisprudence, the inference arises by what is known as the “res ipsa
4. IV—The lower court erred in not blaming the damage sustained by loquitur’’ rule (Scott vs. London Docks Co., 2 H & C 596; San Juan Light &
the Nagtahan bailey bridge to the improper placement of the Transit Co. vs. Requena, 224 U.S. 89, 56 L. Ed., 680; Whitwell vs. Wolf, 127
dolphins. Minn. 529, 149 N.W. 299; Bryne vs. Great Atlantic & Pacific Tea Co., 269
5. V—The lower court erred in granting plaintiff's motion to adduce Mass. 130; 168 N.E. 540; Gribsby vs. Smith, 146 S.W. 2d 719).
further evidence in chief after it has rested its case. The appellant strongly stresses the precautions taken by it on the day in
6. VI—The lower court erred in finding the plaintiff entitled to the question: that it assigned two of its most powerful tugboats to tow down
amount of P192.561.72 for damages which is clearly exorbitant and river its barge L1892; that it assigned to the task the more competent and
without any factual basis. experienced among its patrons, had the towlines, engines and equipment
double-checked and inspected; that it instructed its patrons to take extra
However, it must be recalled that the established rule in this jurisdiction is precautions; and concludes that it had done all it was called to do, and that
that when a party appeals directly to the Supreme Court, and submits his the accident, therefore, should be held due to force majeure or fortuitous
case there for decision, he is deemed to have waived the right to dispute any event.
finding of fact made by the trial Court. The only questions that may be These very precautions, however, completely destroy the appellant’s
raised are those of law (Savellano vs. Diaz L-17441, July 31, 1963; Aballe vs. defense. For caso fortuito or force majeure(which in law are identical in so far
Santiago, L16307, April 30, 1963; G.S.I.S. vs. Cloribel, L-22236, June 22, as they exempt an obligor from liability)2 by definition, are extraordinary
1965). A converso, a party who resorts to the Court of Appeals, and submits ________________
his case for decision there, is barred from contending later that his claim was
beyond the jurisdiction of the aforesaid Court. The reason is that a contrary 2Lasam vs. Smith, 45 Phil. 661.
rule would encourage the undesirable practice of appellants' submitting 283
their cases for decision to either court in expectation of favorable judgment, VOL. 21, SEPTEMBER 29, 1967 283
but with intent of attacking its jurisdiction should the decision be Republic vs. Luzon Stevedoring Corporation
unfavorable (Tyson Tan, et al. vs. Filipinas Compania de Seguros) et al., L- events not foreseeable or avoidable, “events that could notbe foreseen, or
10096, Res. on Motion to Reconsider, March 23, 1966). Consequently, we are which, though foreseen, were inevitable” (Art. 1174, Civ. Code of the
limited in this appeal to the issues of law raised in the appellant's brief. Philippines). It is, therefore, not enough that the event should not have been
282 foreseen or anticipated, as is commonly believed, but it must be one
282 SUPREME COURT REPORTS ANNOTATED impossible to foresee or to avoid. The mere difficulty to foresee the
Republic vs. Luzon Stevedoring Corporation happening is not impossibility to foresee the same: “un hecho no constituye
Taking the aforesaid rules into account, it can be seen that the only caso fortuito por la sola eircunstancia de que su existencia haga mas dificil o
reviewable issues in this appeal are reduced to two : mas onerosa la accion diligente del presento ofensor” (Peirano
Facio, Responsabilidad Extra-contractual, p. 465; Mazeaud, Trait de la
1. 1)Whether or not the collision of appellant's barge with the supports Responsabilite Civil, Vol. 2, see. 1569), The very measures adopted by
or piers of the Nagtahan bridge was in law caused by fortuitous appellant prove that the possibility of danger was not only foreseeable, but
event or force majeure, and actually foreseen, and was not caso fortuito.
2. 2)Whether or not it was error for the Court to have permitted the Otherwise stated, the appellant, Luzon Stevedoring Corporation,
plaintiff-appellee to introduce additional evidence of damages after knowing and appreciating the perils posed by the swollen stream and its
said party had rested its case. swift current, voluntarily entered into a situation involving obvious danger;
it therefore assured the risk, and can not shed responsibility merely because
the precautions it adopted turned out to be insufficient. Hence, the lower
As to the first question, considering that the Nagtahan bridge was an
Court committed no error in holding it negligent in not suspending
immovable and stationary object and uncontrovertedly provided with
operations and in holding it liable for the damages caused.
adequate openings for the passage of water craft, including barges like of
 It avails the appellant naught to argue that the dolphins, like the bridge,
were improperly located. Even if true, these circumstances would merely
emphasize the need of even higher degree of care on appellant’s part in the
situation involved in the present case. The appellant, whose barges and tugs
travel up and down the river everyday, could not safely ignore the danger
posed by these allegedly improper constructions that had been erected and,
in place, for years.
On the second point: appellant charges the lower court with having
abused its discretion in the admission of plaintiff’s additional evidence after
the latter had rested its case. There is an insinuation that the delay was
deliberate to enable the manipulation of evidence to prejudice defendant-
appellant.
We find no merit in the contention. Whether or not further evidence will
be allowed after a party offering
284
284 SUPREME COURT REPORTS ANNOTATED
Philippine Amusement Enterprises, Inc. vs. Natividad
the evidence has rested his case, lies within the sound discretion of the trial
Judge, and this discretion will not be reviewed except in clear case of abuse. 3
In the present case, no abuse of that discretion is shown. What was
allowed to be introduced, after plaintiff had rested its evidence in chief, were
vouchers and papers to support an item of Pl,558.00 allegedly spent for the
reinforcement of the panel of the bailey bridge, and which item already
appeared in Exhibit GG. Appellant, in fact, has no reason to charge the trial
court of being unfair, because it was also able to secure, upon written
motion, a similar order dated November 24, 1962, allowing reception of
additional evidence for the said defendant-appellant.4
WHEREFORE, finding no error in the decision of the lower Court
appealed from, the same is hereby affirmed. Costs against the defendant-
appellant.
Concepcion,
C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando,
JJ., concur.
Bengzon, J.P. J., on leave, did not take part.
Order affirmed.
Note.—On the question of abuse of discretion, see Chieng Hung v. Tam
Teng, L-21209, September 27, 1961, ante, and the notes thereunder.

__________________

© Copyright 2019 Central Book Supply, Inc. All rights reserved.

448 SUPREME COURT REPORTS ANNOTATED cause in the resulting injury. (MacAfee v. Traver’s Gas Corporation, 153
S.W. 2nd 442.)
Africa, et al. vs. Caltex (Phil.), Inc., et al.
Damages; Liability of owner of gasoline station; Case at bar.—A fire
No. L-12986. March 31, 1966. broke out at the Caltex service station. It started while gasoline was being
THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the hosed from a tank into the underground storage. The fire spread to and
HEIRS OF DOMINGA ONG, petitioners and appellants, vs. CALTEX burned several neighboring houses owned by appellants. Issue: Whether
(PHIL.), INC., MATEO BOQUIREN and THE COURT OF APPEALS, Caltex should be held liable for the damages caused to appellants. Held: This
respondents and appellees. question depends on whether the operator of the gasoline station was an
Evidence; Requisites for admissibility of entries in official records.— independent contractor or an agent of Caltex. Under the license agreement
There are three requisites for admissibility of evidence under Section 35, the operator would pay Caltex the purely nominal sum of P1.00 for the use of
Rule 123, Rules of Court: (a) that the entry was made by a public officer, or the premises and all equipment therein. The operator could sell only Caltex
by another person, specially enjoined by law to do so; (b) that it was made by products. Maintenance of the station and its equipment was subject to the
the public officer in the performance of his duties, or by such other person in approval, in other words control, of Caltex. The operator could not assign or
the performance of a duty specially enjoined by law; and (c) that the public transfer his rights as licensee without the consent of Caltex. Termination of
officer or other person had sufficient knowledge of the facts by him slated, the contract was a right granted only to Caltex but not to the operator. These
which must have been acquired by him personally or through official provisions of the contract show that the operator was virtually an employee
information (Moran, Comments on the Rules of Court, Vol. 3, p. 393). of the Caltex, not an independent contractor. Hence, Caltex should be liable
Same; Hearsay rule; Reports not considered an exception to hearsay for damages caused to appellants.
rule.—The reports of the police and fire departments do not constitute an
exception to the hearsay rule. For, the facts stated therein were not acquired PETITION for review by certiorari of a decision of the Court of Appeals.
by the reporting officers through official information, not having been given
by the informants pursuant to any duty to do so. The facts are stated in the opinion of the Court.
Same; Report submitted by a police officer in the performonce of his Ross, Selph, Carrascoso & Janda for the respondents.
duties.—The report submitted by a police officer in the performance of his Bernabe Africa, etc. for the petitioners.
duties, on the basis of his own personal observation of the facts reported, 450
may properly be considered as an exception to the hearsay rule.
450 SUPREME COURT REPORTS ANNOTATED
449
Africa, et al. vs. Caltex (Phil.), Inc., et al.
VOL.16, MARCH 30, 1966 449
Africa, et al. vs. Caltex (Phil.), Inc., et al. MAKALINTAL., J.:
Same; Presumption of negligence under the doctrine of res ipsa
loquitur.—Where the thing which caused the injury complained of is shown This case is before us on a petition for review of the decision of the Court of
to be under the management of the defendant or his servants and the Appeals, which affirmed that of the Court of First Instance of Manila
accident is such as in the ordinary course of things does not happen if those dismissing petitioners’ second amended complaint against respondents.
who have its management or control use proper care, it affords reasonable The action is for damages under Articles 1902 and 1903 of the old Civil
evidence, in the absence of explanation by the defendant, that the accident Code. It appears that in the afternoon of March 18, 1948 a fire broke out at
arose from want of care (45 C.J. 1193). the Caltex service station at the corner of Antipolo street and Rizal Avenue,
Same; Application of principle to the case at bar.—The gasoline-station, Manila. It started while gasoline was being hosed from a tank truck into the
with all its appliances, equipment and employees, was under the control of underground storage, right at the opening of the receiving tank where the
appellees. A fire occurred therein and spread to and burned the neighboring nozzle of the hose was inserted. The fire spread to and burned several
houses. The person who knew or could have known how the fire started were neighboring houses, including the personal properties and effects inside
the appellees and their employees, but they gave no explanation thereof them. Their owners, among them petitioners here, sued respondents Caltex
whatsoever. It is a fair and reasonable inference that the incident happened (Phil.), Inc. and Mateo Boquiren, the first as alleged owner of the station and
because of want of care. the second as its agent in charge of operation. Negligence on the part of both
Torts; Quasi-delicts; Force majeure; Intervention of unforeseen and of them was attributed as the cause of the fire.
unexpected cause.—The intervention of an unforeseen and unexpected cause
is not sufficient to relieve a wrongdoer from consequences of negligence, if
such negligence directly and proximately cooperates with the independent
 The trial court and the Court of Appeals found that petitioners failed to The first contention is not borne out by the record. The transcript of the
prove negligence and that respondents had exercised due care in the hearing of September 17, 1953 (pp. 167-170) shows that the reports in
premises and with respect to the supervision of their employees. question, when offered as evidence, were objected to by counsel for each of
The first question before Us refers to the admissibility of certain reports respondents on the ground that they were hearsay and that they were
on the fire prepared by the Manila Police and Fire Departments and by a “irrelevant, immaterial and impertinent.” Indeed, in the court’s resolution
certain Captain Tinio of the Armed Forces of the Philippines. Portions of the only Exhibits J, K, K-5 and X-6 were admitted without objection; the
first two reports are as follows: admission of the others, including the disputed ones, carried no such
1. Police Department report:— explanation.
On the second point, although Detective Capacillo did take the witness
“Investigation disclosed that at about 4:00 P.M. March 18, 1948, while stand, he was not examined and he did not testify as to the facts mentioned
Leandro Flores was transfenng gasoline from a tank truck, plate No. T-5292 in his alleged report (signed by Detective Zapanta). All he said was that he
into the underground tank of the Caltex Gasoline Station located at the 452
corner of Rizal Avenue and Antipolo Street, this City, an unknown Filipino 452 SUPREME COURT REPORTS ANNOTATED
lighted a Cigarette and threw the burning match stick near the main valve
Africa, et al. vs. Caltex (Phil.), Inc., et al.
of the said underground tank. Due to the gasoline fumes, fire suddenly
was one of those who investigated “the location of the fire and, if possible,
blazed. Quick action of Leandro Flores in pulling off the gasoline hose
gather witnesses as to the occurrence, and that he brought the report with
connecting the truck with the underground tank prevented a terrific
him. There was nothing, therefore, on which he need be cross-examined; and
explosion. However, the flames scattered due
the contents of the report, as to which he did not testify, did not thereby
451
become competent evidence. And even if he had testified, his testimony
VOL. 16, MARCH 30, 1966 451 would still have been objectionable as far as information gathered by him
Africa, et al. vs. Caltex (Phil.), Inc., et al. from third persons was concerned.
to the hose from which the gasoline was spouting. It burned the truck and Petitioners maintain, however, that the reports in themselves, that is,
the following accessorias and residences.” without further testimonial evidence on their contents, fall within the scope
of section 35, Rule 123, which provides that “entries in official records made
2. The Fire Department report.— in the performance of his duty by a public officer of the Philippines, or by a
person in the performance of a duty specially enjoined by law, are prima
“In connection with their allegation that the premises was (sic) subleased facie evidence of the facts’ therein stated.”
for the installation of a coca-cola and cigarette stand, the complainants There are three requisites for admissibility under the rule just
furnished this Office a copy of a photograph taken during the fire and which mentioned: (a) that the entry was made by a public officer, or by another
is submitted herewith. It appears in this picture that there are in the person specially enjoined by law to do so; (b) that it was made by the public
premises a cocacola cooler and a rack which according to information officer in the performance of his duties, or by such other person in the
gathered in the neighborhood contained cigarettes and matches, installed performance of a duty specially enjoined by law; and (c) that the public
between the gasoline pumps and the underground tanks.” officer or other person had sufficient knowledge of the facts by him stated,
The report of Captain Tinio reproduced information given by a certain which must have been acquired by him personally or through official
Benito Morales regarding the history of the gasoline station and what the information (Moran, Comments on the Rules of Court, Vol. 3 [1957] p. 398).
chief of the fire department had told him on the same subject. Of the three requisites just stated, only the last need be considered here.
The foregoing reports were ruled out as “double hearsay” by the Court of Obviously the material facts recited in the reports as to the cause and
Appeals and hence inadmissible. This ruling is now assigned as error. It is circumstances of the fire were not within the personal knowledge of the
contended: first, that said reports were admitted by the trial court without officers who conducted the investigation. Was knowledge of such facts,
objection on the part of respondents; secondly, that with respect to the police however, acquired by them through official information? As to some facts the
report (Exhibit V-Africa) which appears signed by a Detective Zapanta sources thereof are not even identified. Others are attributed to Leopoldo
allegedly “for Salvador Capacillo,” the latter was presented as witness but Medina, referred to as an employee at the gas station where the fire
respondents waived their right to cross-examine him although they had the occurred; to Leandro Flores, driver of the tank truck from which gasoline
opportunity to do so; and thirdly, that in any event the said reports are was being transferred at the time to the underground tank of the station;
admissible as an exception to the hearsay rule under section 35 of Rule 123, and to re-
now Rule 130. 453
 VOL. 16, MARCH 30, 1966 453 he was about to board the truck. As a result, plaintiff received the full shock
of 4,400 volts carried by the wire and was knocked unconscious to the
Africa, et al. vs. Caltex (Phil.), Inc., et al.
ground. The electric charge coursed through his body and caused extensive
spondent Mateo Boquiren, who could not, according to Exhibit V-Africa, give
and serious multiple burns from skull to legs, leaving the bone exposed in
any reason as to the origin of the fire. To qualify their statements as “official
some parts and causing intense pain and wounds that were not completely
information” acquired by the officers who prepared the reports, the persons
healed when the case was tried on June 18, 1947, over one year after the
who made the statements not only must have personal knowledge of the
mishap.”
facts stated but must have the duty to give such statements for record.1
The defendant therein disclaimed liability on the ground that the plaintiff
The reports in question do not constitute an exception to the hearsay
had failed to show any specific act of negligence, but the appellate court
rule; the facts stated therein were not acquired by the reporting officers
overruled the defense under the doctrine of res ipsa loquitur. The court said:
through official information, not having been given by the informants
“The first point is directed against the sufficiency of plaintiff’s evidence to
pursuant to any duty to do so.
place appellant on its defense. While it is the rule, as contended by the
The next question is whether or not, without proof as to the cause and
appellant, that in case of noncontractual negligence, or culpa aquiliana, the
origin of the fire, the doctrine of res ipsa loquitur should apply so as to
burden of proof is on the plaintiff to establish that the proximate cause of his
presume negligence on the part of appellees. Both the trial court and the
injury was the negligence of the defendant, it is also a recognized principle
appellate court refused to apply the doctrine in the instant case on the
that ‘where the thing which caused injury, without fault of the injured
grounds that “as to (its) applicability x x x in the Philippines, there seems to
person, is under the exclusive control of the defendant and the injury is such
be nothing definite,” and that while the rules do not prohibit its adoption in
as in the ordinary course of things does not occur if he having such control
appropriate cases, “in the case at bar, however, we find no practical use for
use proper care, it affords reasonable evidence, in the absence of the
such doctrine.” The question deserves more than such summary dismissal.
explanation, that the injury arose from defendant’s want of care.’
The doctrine has actually been applied in this jurisdiction, in the case of
“And the burden of evidence is shifted to him to establish that he has
Espiritu vs. Philippine Power and Development Co. (CA-G-R. No. 3240-
observed due care and diligence. (San Juan Light & Transit Co. v.
R, September 20, 1949), wherein the decision of the Court of Appeals was
Requena, 244 U.S. 89, 56 L. ed. 680.) This rule is known by the name of res
penned by Mr. Justice J.B.L. Reyes now a member of the Supreme Court.
ipsa loquitur (the transaction speaks for itself), and is peculiarly applicable
________________
to the case at bar, where it is unquestioned that the plaintiff had every right
to be on the highway, and the electric wire was under the sole control of
1 Thus, for instance, the record of a justice of the peace of marriage
defendant company. In the ordinary course of events, electric wires do not
certificates transmitted to him by the corresponding priest is admissible. The
part suddenly in fair weather and injure people, unless they are subjected to
justice of the peace has no personal knowledge of the marriage, but it was
unusual strain and stress or there are defects in their installation,
reported to him by a priest whose duty it was, under the law, to make the
maintenance and supervision; just as barrels do not ordinarily roll out of the
report for record purposes. Similarly, the tax records of a provincial assessor
warehouse windows to injure passersby, unless some one was negligent.
are admissible even if the assessments were made by subordinates. So also
(Byrne v. Boadle, 2 H & Co. 722; 159 Eng. Reprint 229, the
are entries of marriages made by a municipal treasurer in his official record,
455
because he acquires knowledge thereof by virtue of a statutory duty on the
part of those authorized to solemnize marriages to send a copy of each VOL. 16, MARCH 30, 1966 455
marriage contract solemnized by them to the local civil registra. (See Moran, Africa, et al. vs. Caltex (Phil.), Inc., et al.
Comments on the Rules of Court, Vol. 3 [1957] pp. 389-395.) leading case that established that rule). Consequently, in the absence of
454 contributory negligence (which is admittedly not present), the fact that the
454 SUPREME COURT REPORTS ANNOTATED wire snapped suffices to raise a reasonable presumption of negligence in its
installation, care and maintenance. Thereafter, as observed by Chief Baron
Africa, et al. vs. Caltex (Phil.), Inc., et al.
Pollock, ‘if there are any facts inconsistent with negligence, it is for the
The facts of that case are stated in the decision as follows:
defendant to prove.’”
“In the afternoon of May 5, 1946, while the plaintiff-appellee and other
It is true of course that decisions of the Court of Appeals do not lay down
companions were loading grass between the municipalities of Bay and
doctrines binding on the Supreme Court, but we do not consider this a
Calauan, in the province of Laguna, with clear weather and without any
reason for not applying the particular doctrine of res ipsa loquitur in the case
wind blowing, an electric transmission wire, installed and maintained by the
at bar. Gasoline is a highly combustible material, in the storage and sale of
defendant Philippine Power and Development Co., Inc. alongside the road,
which extreme care must be taken. On the other hand, fire is not considered
suddenly parted, and one of the “broken ends hit the head of the plaintiff as
a fortuitous event, as it arises almost invariably from some act of man. A management or control use proper care, it affords reasonable evidence, in
case strikingly similar to the one before Us is Jones vs. Shell Petroleum absence of explanation by defendant, that the accident arose from want of
Corporation, et al., 171 So. 447: care. (45 C J. #768, p. 1193).
“Arthur O. Jones is the owner of a building in the city of Hammon which in “This statement of the rule of res ipsa loquitur has been widely approved
the year 1934 was leased to the Shell Petroleum Corporation for a gasoline and adopted by the courts of last resort. Some of the cases in this jurisdiction
filling station. On October 8, 1934, during the term of the lease, while in which the doctrine has been applied are the following, viz.: Maus v.
gasoline was being transferred from the tank wagon, also operated by the Broderick, 51 La. Ann. 1153, 25 So. 977; Hebert v. Lake Charles Ice, etc.,
Shell Petroleum Corporation, to the underground tank of the station, a fire Co., 111 La. 522, ,35 So. 731, 64 L.R.A. 101, 100 Am. St. Rep. 505; Willis v.
started with resulting damages to the building owned by Jones. Alleging Vicksburg, etc., R. Co., 115 La. 53, 38 So. 892; Bentz v. Page, 115 La. 560, 39
that the damages to his building amounted to $516.95, Jones sued the Shell So. 599.”
Petroleum Corporation for the recovery of that amount. The judge of the The principle enunciated in the aforequoted case applies with equal force
district court, after hearing the testimony, concluded that plaintiff was here. The gasoline station, with all its appliances, equipment and employees,
entitled to a recovery and rendered judgment in his favor for $427.82. The was under the control of appellees. A fire occurred therein and spread to and
Court of Appeals for the First Circuit reversed this judgment, on the ground burned the neighboring houses. The persons who knew or could have known
the testimony failed to show with reasonable certainty any negligence on the how the fire started were appellees and their employees, but they gave no
part of the Shell Petroleum Corporation or any of its agents or employees. explanation thereof whatsoever. It is a fair and reasonable inference that the
Plaintiff applied to this Court for a Writ of Review which was granted, and incident happened because of want of care.
the case is now before us for decision.” In the report submitted by Captain Leoncio Mariano of the Manila Police
In resolving the issue of negligence, the Supreme Court of Louisiana held: Department (Exh. X-l Africa) the following appears:
“Plaintiff’s petition contains two distinct charges of negligence—one relating “Investigation of the basic complaint disclosed that the Caltex Gasoline
to the cause of the fire and the other relating to the spreading of the gasoline Station complained of occupies a lot approximately 10 m x 10 m at the
about the filling station. southwest corner of Rizal Avenue and Antipolo. The location is within a very
“Other than an expert to assess the damages caused plaintiff’s building busy business dis-
by the fire, no witnesses were placed on the stand by the defendant. 457
“Taking up plaintiff’s charge of negligence relating to the cause of the VOL. 16, MARCH 30, 1966 457
fire, we find it established by the record that the filling station and the tank
Africa, et al. vs. Caltex (Phil.), Inc., et al.
truck were under the control of the defendant and operated by its agents or
trict near the Obrero Market, a railroad crossing and very thickly populated
employees. We further
neighborhood where a great number of people mill around throughout the
456
day until late at night. These circumstances put the gasoline station in a
456 SUPREME COURT REPORTS ANNOTATED situation primarily prejudicial to its operation because the passersby, those
Africa, et al. vs. Caltex (Phil.), Inc., et al. waiting for buses or transportation, those waiting to cross the streets and
find from the uncontradicted testimony of plaintiff’s witnesses that fire others loafing around have to occupy not only the sidewalks but also portion
started in the underground tank attached to the filling station while it was of the gasoline station itself. Whatever be the activities of these people
being filled from the tank truck and while both the tank and the truck were smoking or lighting a cigarette cannot be excluded and this constitute a
in charge of and being operated by the agents or employees of the defendant, secondary hazard to its operation which in turn endangers the entire
extended to the hose and tank truck, and was communicated from the neighborhood to conflagration.
burning hose, tank truck, and escaping gasoline to the building owned by the “Furthermore, aside from precautions already taken by its operator the
plaintiff. concrete walls south and west adjoining the neighborhood are only 2-1/2
“Predicated on these circumstances and the further circumstance of meters high at most and cannot avoid the flames from leaping over it in case
defendant’s failure to explain the cause of the fire or to show its lack of of fire.
knowledge of the cause, plaintiff has evoked the doctrine of res ipsa loquitur. “Records show that there have been two cases of fire which caused not
There are many cases in which the doctrine may be successfully invoked and only material damages but desperation and also panic in the neighborhood.
this, we think, is one of them. “Although the soft drinks stand had been eliminated, this gasoline
“Where the thing which caused the injury complained of is shown to be service station is also used by its operator as a garage and repair shop for his
under the management of defendant or his servants and the accident is such fleet of taxicabs numbering ten or more, adding another risk to the possible
as in the ordinary course of things does not happen if those who have its outbreak of fire at this already small but crowded gasoline station.”
The foregoing report, having been submitted by a police officer in the innocent, tor-tious or criminal act is also a substantial factor in bringing
performance of his duties on the basis of his own personal observation of the about the harm, does not protect the actor from liability.’ (Restatement of
facts reported, may properly be considered as an exception to the hearsay the Law of Torts, vol. 2, p. 1184, #439). Stated in another way, ‘The
rule. These facts, descriptive of the location and objective circumstances intervention of an unforeseen and unexpected cause, is not sufficient to
surrounding the operation of the gasoline station in question, strengthen the 459
presumption of negligence under the doctrine of res ipsa loquitur, since on VOL. 16, MARCH 30, 1966 459
their face they called for more stringent measures of caution than those
Africa, et al. vs. Caltex (Phil.), Inc., et al.
which would satisfy the standard of due diligence under ordinary
relieve a wrongdoer from consequences of negligence, if such negligence
circumstances. There is no more eloquent demonstration of this than the
directly and proximately cooperates with the independent cause in the
statement of Leandro Flores before the police investigator. Flores was the
resulting injury.” (MacAfee, et al. vs. Traver’s Gas Corporation, 153 S.W. 2nd
driver of the gasoline tank wagon who, alone and without assistance, was
442.)
transferring the contents thereof into the underground storage when the fire
The next issue is whether Caltex should be held liable for the damages
broke out. He said: “Before loading the underground tank there were no
caused to appellants. This issue depends on whether Boquiren was an
people, but while the loading was going on, there were people who went to
independent contractor, as held by the Court of Appeals, or an agent of
drink coca-cola (at the coca-cola stand) which is about a meter from the hole
Caltex. This question, in the light of the facts not controverted, is one of law
leading to
and hence may be passed upon by this Court. These facts are: (1) Boquiren
458
made an admission that he was an agent of Caltex; (2) at the time of the fire
458 SUPREME COURT REPORTS ANNOTATED Caltex owned the gasoline station and all the equipment therein; (3) Caltex
Africa, et al. vs. Caltex (Phil.), Inc., et al. exercised control over Boquiren in the management of the station; (4) the
the underground tank.” He added that when the tank was almost filled he delivery truck used in delivering gasoline to the station had the name of
went to the tank truck to close the valve, and while he had his back turned CALTEX painted on it; and (5) the license to store gasoline at the station
to the “manhole” he heard someone shout “fire.” was in the name of Caltex, which paid the license fees. (Exhibit T-Africa;
Even then the fire possibly would not have spread to the neighboring Exhibit U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-Africa).
houses were it not for another negligent omission on the part of defendants, In Boquiren’s amended answer to the second amended complaint, he
namely, their failure to provide a concrete wall high enough to prevent the denied that he directed one of his drivers to remove gasoline from the truck
flames from leaping over it. As it was the concrete wall was only 2-1/2 into the tank and alleged that the “alleged driver, if one there was, was not
meters high, and beyond that height it consisted merely of galvanized iron in his employ, the driver being an employee of the Caltex (Phil.) Inc. and/or
sheets, which would predictably crumple and melt when subjected to intense the owners of the gasoline station.” It is true that Boquiren later on amended
heat. Defendants’ negligence, therefore, was not only with respect to the his answer, and that among the changes was one to the effect that he was
cause of the fire but also with respect to the spread thereof to the not acting as agent of Caltex. But then again, in his motion to dismiss
neighboring houses. appellants’ second amended complaint the ground alleged was that it stated
There is an admission on the part of Boquiren in his amended answer to no cause of action since under the allegations thereof he was merely acting
the second amended complaint that “the fire was caused through the acts of as agent of Caltex, such that he could not have incurred personal liability. A
a stranger who, without authority, or permission of answering defendant, motion to dismiss on this ground is deemed to be an admission of the facts
passed through the gasoline station and negligently threw a lighted match in alleged in the complaint.
the premises.” No evidence on this point was adduced, but assuming the Caltex admits that it owned the gasoline station as well as the equipment
allegation to be true—certainly any unfavorable inference from the therein, but claims that the business conducted at the service station in
admission may be taken against Boquiren—it does not extenuate his question was owned and operated by Boquiren. But Caltex did not present
negligence. A decision of the Supreme Court of Texas, upon facts analogous 460
to those of the present case, states the rule which we find acceptable here. “It 460 SUPREME COURT REPORTS ANNOTATED
is the rule that those who distribute a dangerous article or agent owe a
Africa, et al. vs. Caltex (Phil), Inc., et al.
degree of protection to the public proportionate to and commensurate with a
any contract with Boquiren that would reveal the nature of their
danger involved x x x we think it is the generally accepted rule as applied to
relationship at the time of the fire. There must have been one in existence at
torts that ‘if the effects of the actor’s negligent conduct actively and
that time. Instead, what was presented was a license agreement manifestly
continuously operate to bring about harm to another, the fact that the active
tailored for purposes of this case, since it was entered into shortly before the
and substantially simultaneous operation of the effects of a third person’s
expiration of the one-year period it was intended to operate. This so-called
license agreement (Exhibit 5-Caltex) was executed on November 29, 1948, should such performance conflict with the name or title given the contract by
but made effective as of January 1, 1948 so as to cover the date of the fire, the parties, the former must prevail over the latter!” (Shell Company of the
namely, March 18, 1948. This retroactivity provision is quite significant, and Philippines, Ltd. vs. Firemens’ Insurance Company of Newark, New
gives rise to the conclusion that it was designed precisely to free Caltex from Jersey, 100 Phil. 757).
any responsibility with respect to the fire, as shown by the clause that “The written contract was apparently drawn for the purpose of creating
Caltex “shall not be liable for any injury to person or property while in the the apparent relationship of employer and independent contractor, and of
property herein licensed, it being understood and agreed that LICENSEE avoiding liability for the negligence of the employees about the station; but
(Boquiren) is not an employee, representative or agent of LICENSOR the company was not satisfied to allow such relationship to exist. The
(Caltex).” evidence shows that it immediately assumed control, and proceeded to direct
But even if the license agreement were to govern, Boquiren can hardly be the method by which the work contracted for should be performed. By
considered an independent contractor. Under that agreement Boquiren reserving the right to terminate the contract at will, it retained the means of
would pay Caltex the purely nominal sum of P1.00 for the use of the compelling submission to its orders. Having elected to assume control and to
premises and all the equipment therein. He could sell only Caltex products. direct the means and methods by which the work has to be performed, it
Maintenance of the station and its equipment was subject to the approval, in must be held liable for the negligence of those performing service under its
other words control, of Caltex. Boquiren could not assign or transfer his direction. We think the evidence was sufficient to sustain the verdict of the
rights as licensee without the consent of Caltex. The license agreement was jury.” (Gulf Refining Company v. Rogers, 57 S.W. 2d, 183).
supposed to be from January 1, 1948 to Decem-ember 31, 1948, and Caltex further argues that the gasoline stored in the station belonged to
thereafter until terminated by Caltex upon two days prior written notice. Boquiren. But no cash invoices were presented to show that Boquiren had
Caltex could at any time cancel and terminate the agreement in case bought said gasoline from Caltex. Neither was there a sales contract to prove
Boquiren ceased to sell Caltex products, or did not conduct the business with the same.
due diligence, in the judgment of Caltex. Termination of the contract was As found by the trial court the Africas sustained a loss of P9,005.80, after
therefore a right granted only to Caltex but not to Boquiren. These deducting the amount of P2,000.00 collected by them on the insurance of the
provisions of the contract show the extent of the control of Caltex over house. The deduction is now challenged as erroneous on the ground that
Boquiren. The control was such that the latter was virtually an employee of Article 2207 of the New Civil Code, which provides
the former. 462
“Taking into consideration the fact that the operator owed his position to the 462 SUPREME COURT REPORTS ANNOTATED
company and the latter could remove him or terminate his services at will;
Jabonete, et al. vs. Monteverde, et al.
that the service station be-
for the subrogation of the insurer to the rights of the insured, was not yet in
461
effect when the loss took place. However, regardless of the silence of the law
VOL. 16, MARCH 30, 1966 461 on this point at that time, the amount that should be recovered be measured
Africa, et al. vs. Caltex (Phil.), Inc., et al. by the damages actually suffered, otherwise the principle prohibiting unjust
longed to the company and bore its tradename and the operator sold only the enrichment would be violated. With respect to the claim of the heirs of Ong
products of the company; that the equipment used by the operator belonged P7,500.00 was adjudged by the lower court on the basis of the assessed value
to the company and were just loaned to the operator and the company took of the property destroyed, namely, P1,500.00, disregarding the testimony of
charge of their repair and maintenance; that an employee of the company one of the Ong children that said property was worth P4,000.00. We agree
supervised the operator and conducted periodic inspection of the company’s that the court erred, since it is of common knowledge that the assessment for
gasoline and service station; that the price of the products sold by the taxation purposes is not an accurate gauge of fair market value, and in this
operator was fixed by the company and not by the operator; and that the case should not prevail over positive evidence of such value. The heirs of Ong
receipts signed by the operator indicated that he was a mere agent, the are therefore entitled to P10,000.00.
finding of the Court of Appeals that the operator was an agent of the Wherefore, the decision appealed from is reversed and respondents-
company and not an independent contractor should not be disturbed. appellees are held liable solidarily to appellants, and ordered to pay them
“To determine the nature of a contract courts do not have or are not the aforesaid sum of P9,005.80 and P10,000.00, respectively, with interest
bound to rely upon the name or title given it by the contracting parties, from the filing of the complaint, and costs.
should thereby a controversy as to what they really had intended to enter Chief Justice Bengzon and Justices Bautista Angela, Concepcion,
into, but the way the contracting parties do or perform their respective J.B.L. Reyes, Barrera, Regala, J.P. Bengzon, Zaldivar and Sanchez,
obligations stipulated or agreed upon may be shown and inquired into, and concur. Mr. Justice Dizon took no part.
 Decision reversed.
Note.—As to the liability of a gas company for the damages caused by its
burning tank truck trailer, operated by its employees, see Standard Vacuum
Oil Company vs. Tan, L-13048, Feb. 27, 1960 and Tan vs. Standard Vacuum
Oil Co. 91 Phil. 672.

__________________

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426 SUPREME COURT REPORTS ANNOTATED instructions as well as actual implementation and monitoring of consistent
compliance with the rules.
Fabre, Jr. vs. Court of Appeals
Same; Same; Same; The existence of hiring procedures and supervisory
G.R. No. 111127. July 26, 1996.* policies cannot be casually invoked to overturn the presumption of negligence
MR. & MRS. ENGRACIO FABRE, JR.** and PORFIRIO CABIL, on the part of an employer.—In the case at bar, the Fabres, in allowing Cabil
petitioners, vs. COURT OF APPEALS, THE WORD FOR THE WORLD to drive the bus to La Union, apparently did not consider the fact that Cabil
CHRISTIAN FELLOWSHIP, INC., AMYLINE ANTONIO, JOHN had been driving for school children only, from their homes to the St.
RICHARDS, GONZALO GONZALES, VICENTE V. QUE, JR., ICLI Scholastica’s College in Metro Manila. They had hired him only after a two-
CORDOVA, ARLENE GOJOCCO, ALBERTO ROXAS CORDERO, week apprenticeship. They had tested him for certain matters, such as
RICHARD BAUTISTA, JOCELYN GARCIA, YOLANDA CORDOVA, NOEL whether he could remember the names of the children he would be taking to
ROQUE, EDWARD TAN, ERNESTO NARCISO, ENRIQUETA LOCSIN, school, which were irrelevant to his qualification to drive on a long distance
FRANCIS NORMAN O. LOPEZ, JULIUS CAESAR GARCIA, ROSARIO MA. travel, especially considering that the trip to La Union was his first. The
V. ORTIZ, MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO MARA- existence of hiring procedures and supervisory policies cannot be casually
MARA, TERESITA REGALA, MELINDA TORRES, MARELLA MIJARES, invoked to overturn the presumption of negligence on the part of an
JOSEFA CABATINGAN, MARA NADOC, DIANE MAYO, TESS PLATA, employer.
MAYETTE JOCSON, ARLENE Y. MORTIZ, LIZA MAYO, CARLOS Same; Same; Same; As common carriers, the Fabres were bound to
RANARIO, ROSAMARIA T. RADOC and BERNADETTE FERRER, exercise “extraordinary diligence” for the safe transportation of the passengers
respondents. to their destination.—As common carriers, the Fabres were bound to exercise
Civil Law; Negligence; Damages; Cabil was grossly negligent and “extraordinary diligence” for the safe transportation of the passengers to
should be held liable for the injuries suffered by private respondent Amyline their destination. This duty of care is not excused by proof that they
Antonio.—Considering the foregoing—the fact that it was raining and the exercised the diligence of a good father of the family in the selection and
road was slippery, that it was dark, that he drove his bus at 50 kilometers supervision of their employee.
an hour when even on a good day the normal speed was only 20 kilometers 428
an hour, and that he was unfamiliar with the terrain, Cabil was grossly
4 SUPREME COURT REPORTS ANNOTATED
negligent and should be held liable for the injuries suffered by private
respondent Amyline Antonio. 28
________________ Fabre, Jr. vs. Court of Appeals
Same; Same; Same; On the theory that petitioners are liable for breach
SECOND DIVISION.
* of contract of carriage, the award of moral damages is authorized by Art.
The name of petitioner Engracio Fabre, Jr.’s wife cannot be
** 1764, in relation to Art. 2220, since Cabil’s gross negligence amounted to bad
ascertained from the record. Hence she is unnamed. faith.—With respect to the other awards, while the decisions of the trial
427 court and the Court of Appeals do not sufficiently indicate the factual and
VOL. 259, JULY 26, 1996 427 legal basis for them, we find that they are nevertheless supported by
evidence in the records of this case. Viewed as an action for quasi delict, this
Fabre,Jr. vs. Court of Appeals
case falls squarely within the purview of Art. 2219(2) providing for the
Same; Same; Same; Cabil’s negligence gave rise to the presumption that
payment of moral damages in cases of quasi delict. On the theory that
his employers, the Fabres, were themselves negligent in the selection and
petitioners are liable for breach of contract of carriage, the award of moral
supervision of their employee.—Pursuant to Arts. 2176 and 2180 of the Civil
damages is authorized by Art. 1764, in relation to Art. 2220, since Cabil’s
Code his negligence gave rise to the presumption that his employers, the
gross negligence amounted to bad faith. Amyline Antonio’s testimony, as
Fabres, were themselves negligent in the selection and supervision of their
well as the testimonies of her father and copassengers, fully establish the
employee.
physical suffering and mental anguish she endured as a result of the injuries
Same; Same; Same; Employer should also examine the applicant for his
caused by petitioners’ negligence.
qualifications, experience and record of service.—Due diligence in selection of
Same; Same; Same; In Dangwa Trans. Co., Inc. vs. Court of Appeals,
employees is not satisfied by finding that the applicant possessed a
the Court held the bus company and the driver jointly and severally liable for
professional driver’s license. The employer should also examine the applicant
damages for injuries suffered by a passenger.—The decision of the Court of
for his qualifications, experience and record of service. Due diligence in
Appeals can be sustained either on the theory of quasi delict or on that of
supervision, on the other hand, requires the formulation of rules and
breach of contract. The question is whether, as the two courts below held,
regulations for the guidance of employees and the issuance of proper
petitioners, who are the owners and driver of the bus, may be made to who was unfamiliar with the area (it being his first trip to La Union), was
respond jointly and severally to private respondent. We hold that they may forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan.
be. In Dangwa Trans. Co., Inc. v. Court of Appeals, on facts similar to those _______________
in this case, this Court held the bus company and the driver jointly and
severally liable for damages for injuries suffered by a passenger. Again, 1 Per Justice Jainal D. Rasul and concurred in by Justices Emeterio C.

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——

© Copyright 2019 Central Book Supply, Inc. All rights reserved.

 G.R. No. 104408. June 21, 1993.* times, that rule is not inflexible and is subject to well established exceptions,
METRO MANILA TRANSIT CORPORATION, petitioner, vs. THE COURT to wit: (1) when the conclusion is a finding grounded entirely on speculation,
OF APPEALS and NENITA CUSTODIO, respondents. surmises and conjectures; (2) when the inference made is manifestly
Remedial Law; Civil Procedure; Petition for review on certiorari under mistaken, absurd or impossible; (3) where there is grave abuse of discretion;
Rule 45 of the Rules of Court; The Supreme Court in Lacsamana vs. The (4) when the judgment is based on a misapprehension of facts; (5) when the
Intermediate Appellate Court, et al. allows a petition for review on certiorari findings of fact are conflicting; (6) when the Court of Appeals, in making its
from a decision rendered by the Court of Appeals under Sec. 1, Rule 45 of the findings, went beyond the issues of the case and the same are contrary to the
Revised Rules of Court to be filed within 15 days from notice of judgment or admissions of both appellant and appellee; (7) when the findings of the Court
of the denial of the motion for reconsideration filed in due time and paying at of Appeals are contrary to those of the trial court; (8) when the findings of
the same time the corresponding docket fee.—We digress to reiterate, in view fact are conclusions without citation of specific evidence on which they are
of erroneous submissions that we continue to receive, that in the case of a based; (9) when the facts set forth in the petition, as well as in the
petition for review on certiorari from a decision rendered by the Court of petitioner’s main and reply briefs are not disputed by the respondents and
Appeals, Section 1, Rule 45 of the Rules of Court, which has long since been (10) when the findings of fact of the Court of Appeals are premised on the
clarified in Lacsamana vs. The Hon. Second Special Cases Division of the supposed absence of evidence and are contradicted by the evidence on record.
Intermediate Appellate Court, et al., allows the same to be filed “within Civil Law; Obligations and Contracts; Quasi-delict; Where the injury is
fifteen (15) days from notice of judgment or of the denial of the motion for due to the concurrent negligence of the drivers of the colliding vehicles, the
reconsideration filed in due time, and paying at the same time the drivers and owners of said vehicles shall be primarily, directly and solidarily
corresponding docket fee.” In other words, in the event a motion for liable for damages and it is immaterial that one action is based on quasi-
reconsideration is filed and denied, the period of fifteen (15) days begins to delict and the other on culpa-contractual.—With the allegation and
run all over again from notice of the denial resolution. Otherwise put, if a subsequent proof of negligence against the defen-
motion for 523
________________ VOL. 223, JUNE 21, 1993 523
Metro Manila Transit Corp. vs. Court of Appeals
* SECOND DIVISION. dant driver and of an employer-employee relation between him and his
522 co-defendant MMTC in this instance, the case is undoubtedly based on a
5 SUPREME COURT REPORTS ANNOTATED quasi-delict under Article 2180. When the employee causes damage due to
22 his own negligence while performing his own duties, there arises the juris
Metro Manila Transit Corp. vs. Court of Appeals tantumpresumption that the employer is negligent, rebuttable only by proof
reconsideration is filed, the reglementary period within which to appeal of observance of the diligence of a good father of a family. For failure to rebut
the decision of the Court of Appeals to the Supreme Court is reckoned from such legal presumption of negligence in the selection and supervision of
the date the party who intends to appeal received the order denying the employees, the employer is likewise responsible for damages, the basis of the
motion for reconsideration. Furthermore, a motion for extension of time to liability being the relationship of pater familias or on the employer’s own
file a petition for review may be filed with this Court within said negligence. As early as the case of Gutierrez vs. Gutierrez, and thereafter, we
reglementary period, paying at the same time the corresponding docket fee. have consistently held that where the injury is due to the concurrent
Same; Evidence; It is now well-settled that while the findings of fact of negligence of the drivers of the colliding vehicles, the drivers and owners of
the Court of Appeals are entitled to great respect, and even finality at times, the said vehicles shall be primarily, directly and solidarity liable for
that rule is not inflexible and is subject to well established exceptions.—At damages and it is immaterial that one action is based on quasi-delict and the
this juncture, it suffices to note that factual findings of the trial court may be other on culpa contractual,as the solidarity of the obligation is justified by
reversed by the Court of Appeals, which is vested by law with the power to the very nature thereof.
review both legal and factual issues, if on the evidence of record, it appears Same; Same; Same; Defense of due diligence in the selection and
that the trial court may have been mistaken particularly in the appreciation supervision of employees; The mere formulation of various company policies
of evidence, which is within the domain of the Court of Appeals. The general on safety without showing that they were being complied with is not sufficient
rule laid down in a plethora of cases is that such findings of fact by the Court to exempt petitioner from liability arising from negligence of its employees.—
of Appeals are conclusive upon and beyond the power of review of the In order that the defense of due diligence in the selection and supervision of
Supreme Court. However, it is now well-settled that while the findings of employees may be deemed sufficient and plausible, it is not enough to
fact of the Court of Appeals are entitled to great respect, and even finality at emptily invoke the existence of said company guidelines and policies on
hiring and supervision. As the negligence of the employee gives rise to the it is indeed high time for us to once again address this matter which poses
presumption of negligence on the part of the employer, the latter has the not only a litigation issue for the courts but affects the very safety of our
burden of proving that it has been diligent not only in the selection of streets.
employees but also in the actual supervision of their work. The mere The facts of the case at bar are recounted for us by respondent court,
allegation of the existence of hiring procedures and supervisory policies, thus—
without anything more, is decidedly not sufficient to overcome such “At about six o’clock in the morning of August 28, 1979, plaintiff-appellant
presumption. We emphatically reiterate our holding, as a warning to all Nenita Custodio boarded as a paying passenger a public utility jeepney with
employers, that “(t)he mere formulation of various company policies on plate No. D7 305 PUJ Pilipinas 1979, then driven by defendant Agudo
safety without showing that they were being complied with is not sufficient Calebag and owned by his co-defendant Victorino Lamayo, bound for her
to exempt petitioner from liability arising from negligence of its employees. work at Dynetics Incorporated located in Bicutan, Taguig, Metro Manila,
It is incumbent upon petitioner to show that in recruiting and employing the where she then worked as a machine operator earning P16.25 a day. While
erring driver the recruitment procedures and company policies on efficiency the passenger jeepney was travelling at (a) fast clip along DBP Avenue,
and safety were followed.” Paying lip-service to these injunctions or merely Bicutan, Taguig, Metro
going through the motions of compliance therewith will warrant stern 525
sanctions from the Court. VOL. 223, JUNE 21, 1993 525
Same; Same; Same; Damages; Art. 2211 of the Civil Code provides that
Metro Manila Transit Corp. vs. Court of Appeals
in quasi-delicts, interest as a part of the damages may be
Manila another fast moving vehicle, a Metro Manila Transit Corp. (MMTC,
524
for short) bus bearing plate No. 3Z 307 PUB (Philippines) ‘79 driven by
5 SUPREME COURT REPORTS ANNOTATED defendant Godofredo C. Leonardo was negotiating Honeydew Road, Bicutan,
24 Taguig, Metro Manila bound for its terminal at Bicutan. As both vehicles
Metro Manila Transit Corp. vs. Court of Appeals approached the intersection of DBP Avenue and Honeydew Road they failed
awarded in the discretion of the court and not as a matter of right.— to slow down and slacken their speed; neither did they blow their horns to
Finally, we believe that respondent court acted in the exercise of sound warn approaching vehicles. As a consequence, a collision between them
discretion when it affirmed the trial court’s award, without requiring the occurred, the passenger jeepney ramming the left side portion of the MMTC
payment of interest thereon as an item of damages just because of delay in bus. The collision impact caused plaintiff-appellant Nenita Custodio to hit
the determination thereof, especially since private respondent did not the front windshield of the passenger jeepney and (she) was thrown out
specifically pray therefor in her complaint. Article 2211 of the Civil Code therefrom, falling onto the pavement unconscious with serious physical
provides that in quasi-delicts, interest as a part of the damages may be injuries. She was brought to the Medical City Hospital where she regained
awarded in the discretion of the court, and not as a matter of right. We do consciousness only after one (1) week. Thereat, she was confined for twenty-
not perceive that there have been intentional dilatory maneuvers or any four (24) days, and as a consequence, she was unable to work for three and
special circumstances which would justify that additional award and, one half months (3 1/2).”1
consequently, we find no reason to disturb said ruling. A complaint for damages2 was filed by herein private respondent, who being
then a minor was assisted by her parents, against all of therein named
PETITION for review of the decision of the Court of Appeals. defendants following their refusal to pay the expenses incurred by the
former as a result of the collision.
The facts are stated in the opinion of the Court. Said defendants denied all the material allegations in the complaint and
Office of the Government Corporate Counsel for petitioner. pointed an accusing finger at each other as being the party at fault. Further,
Renato P. Decena and Restituto Abjero for private respondent. herein petitioner Metro Manila Transit Corporation (MMTC), a government-
owned corporation and one of the defendants in the court a quo, along with
REGALADO, J.: its driver, Godofredo Leonardo, contrarily averred in its answer with cross-
claim and counterclaim3that the MMTC bus was driven in a prudent and
This appeal calls for a review of the legal validity and sufficiency of careful manner by driver Leonardo and that it was the passenger jeepney
petitioner’s invocation of due diligence in the selection and supervision of which was driven recklessly considering that it hit the left middle portion of
employees as its defense against liability resulting from a vehicular collision. the MMTC bus, and that it was defendant Lamayo, the owner of the jeepney
With the facility by which such a defense can be contrived and our country and employer of driver Calebag, who failed to exercise due diligence
having reputedly the highest traffic accident rate in its geographical region, _______________
 1 Rollo, 24-25. 527
2 Civil Case No. C-8176, entitled “Nenita R. Custodio, assisted by her VOL. 223, JUNE 21, 1993 527
parents, Rodolfo A. Custodio and Gloria R. Custodio vs. Agudo R. Calebag,
Metro Manila Transit Corp. vs. Court of Appeals
Victorino Lamayo, Godofredo C. Leonardo, and Metro Manila Transit
enue performance for the preceding year. Upon satisfactory compliance with
Corporation,” Court of First Instance of Rizal, Branch 35, Caloocan City;
said requisites, applicants are recommended for and subjected to a
Original Record, 1-4.
3 Ibid., 17-22. preliminary interview, followed by a record check to find out whether they
are included in the list of undesirable employees given by other companies.
526
Thereafter, she continued, if an applicant is found to be acceptable, a
526 SUPREME COURT REPORTS ANNOTATED final interview by the Chief Supervisor is scheduled and followed by a
Metro Manila Transit Corp. vs. Court of Appeals training program which consists of seminars and actual driving and psycho-
in the selection and supervision of employees and should thus be held physical tests and X-ray examinations. The seminars, which last for a total
solidarily liable for damages caused to the MMTC bus through the fault and of eighteen (18) days, include familiarization with assigned routes, existing
negligence of its employees. traffic rules and regulations, Constabulary Highway Patrol Group (CHPG)
Defendant Victorino Lamayo, for his part, alleged in his answer with seminar on defensive driving, preventive maintenance, proper vehicle
cross-claim and counterclaim4 that the damages suffered by therein plaintiff handling, interpersonal relationship and administrative rules on discipline
should be borne by defendants MMTC and its driver, Godofredo Leonardo, and on-the-job training. Upon completion of all the seminars and tests, a
because the latter’s negligence was the sole and proximate cause of the final clearance is issued, an employment contract is executed and the driver
accident and that MMTC failed to exercise due diligence in the selection and is ready to report for duty.8
supervision of its employees. MMTC’s Transport Supervisor, Christian Bautista, testified that it was
By order of the trial court, defendant Calebag was declared in default for his duty to monitor the daily operation of buses in the field, to countercheck
failure to file an answer.5Thereafter, as no amicable settlement was reached the dispatcher on duty prior to the operation of the buses in the morning and
during the pre-trial conference,6 trial on the merits ensued with the opposing to see to it that the bus crew follow written guidelines of the company, which
parties presenting their respective witnesses and documentary evidence. include seeing to it that its employees are in proper uniform, briefed in
Herein private respondent Nenita Custodio, along with her parents, were traffic rules and regulations before the start of duty, fit to drive and, in
presented as witnesses for the prosecution. In addition, Dr. Edgardo del general, follow other rules and regulations of the Bureau of Land
Mundo, the attending physician, testified on the cause, nature and extent of Transportation as well as of the company.9
the injuries she sustained as a result of the vehicular mishap.7 On the other The reorganized trial court, in its decision of August 1, 1989, 10 found both
hand, defendant MMTC presented as witnesses Godofredo Leonardo, drivers of the colliding vehicles concurrently negligent for non-observance of
Christian Bautista and Milagros Garbo. Defendant Lamayo, however, failed appropriate traffic rules and regulations and for failure to take the usual
to present any witness. precautions when approaching an intersection. As joint tortfeasors, both
Milagros Garbo testified that, as a training officer of MMTC, she was in drivers, as well as defendant Lamayo, were held solidarily liable for damages
charge of the selection of the company’s bus drivers, conducting for this sustained by plaintiff Custodio. Defendant MMTC, on the
purpose a series of training programs and examinations. According to her, ________________
new applicants for job openings at MMTC are preliminarily required to
submit certain documents such as National Bureau of Investigation (NBI) 8 Ibid., June 10, 1988, 3-12.
clearance, birth or residence certificate, ID pictures, certificate or diploma of 9 Ibid., April 29, 1988, 2-8.
highest educational attainment, professional driver’s license, and work 10 Civil Case No. 8176, Regional Trial Court, Branch 125, Caloocan City;

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

that facts alleged by petitioner be established by documentary evidence, the 722(1990).

probative force and weight of their testimonies should not be discredited, 26 Medina vs. Asistio, Jr., et al., 191 SCRA 218 (1990).

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

710(1987); Hernandez vs. Court of Appeals, et al., 160 SCRA

821 (1988); Philippine National Bank vs. Court of Appeals, et al., 183 SCRA 534
133(1990); BA Finance Corporation vs. Court of Appeals, et al., 201 SCRA 534 SUPREME COURT REPORTS ANNOTATED
157(1991).
28 Manlapaz vs. Court of Appeals, et al., 147 SCRA 236 (1987); Medina
Metro Manila Transit Corp. vs. Court of Appeals
whereas respondent court was of the opinion that—
vs. Asistio, Jr., supra; Calalang vs. Intermediate Appellate Court, et al., 194
“It is surprising though that witness Milagros Garbo did not testify nor
SCRA 514 (1991).
present any evidence that defendant-appellee’s driver, defendant Godofredo
533
Leonardo has complied with or has undergone all clearances and trainings
VOL. 223, JUNE 21, 1993 533 she referred to. The clearances, result of seminars and tests which Godofredo
Metro Manila Transit Corp. vs. Court of Appeals Leonardo submitted and complied with, if any, were not presented in court
the trial court are contrary to each other, this court may scrutinize the despite the fact that they are obviously in the possession and control of
evidence on record,29 in order to arrive at a correct finding based thereon.30 defendant-appellee. Instead, it resorted to generalities. This Court has ruled
A perusal of the same shows that since there is no dispute as to the that due diligence in (the) selection and supervision of employee(s) are not
finding of concurrent negligence on the part of the defendant Calebag, the proved by mere testimonies to the effect that its applicant has complied with
driver of the passenger jeepney, and co-defendant Leonardo, the bus driver all the company requirements before one is admitted as an employee but
of petitioner MMTC, both of whom were solidarily held liable with defendant without proof thereof. x x x.
Lamayo, the owner of the jeepney, we are spared the necessity of “On the part of Christian Bautista, the transport supervisor of defendant-
determining the sufficiency of evidence establishing the fact of appellee, he testified that it is his duty to monitor the operation of buses in
negligence.31 The contrariety is in the findings of the two lower courts, and the field; to countercheck the dispatchers’ duty prior to the operation of the
which is the subject of this present controversy, with regard to the liability of buses in the morning; to see to it that bus crew follows written guidelines of
MMTC as employer of one the erring drivers. the company (t.s.n., April 29, 1988, pp. 4-5), but when asked to present in
The trial court, in absolving MMTC from liability ruled that— court the alleged written guidelines of the company he merely stated that he
“On the question as to whether defendant MMTC was successful in proving brought with him a ‘wrong document’ and defendant-appellee’s counsel
its defense that indeed it had exercised the due diligence of a good father of a asked for reservation to present such written guidelines in the next hearing
family in the selection and supervision of defendant Leonardo, this Court but the same was (sic) never presented in court.”33
finds that based on the evidence presented during the trial, defendant A thorough and scrupulous review of the records of this case reveals that the
MMTC was able to prove that it was not only careful and diligent in choosing conclusion of respondent Court of Appeals is more firmly grounded on
and screening applicants for job openings but also strict (and) diligent in jurisprudence and amply supported by the evidence of record than that of
supervising its employees by seeing to it that its employees were in proper the court below.
uniforms, briefed in traffic rules and regulations before the start of duty, It is procedurally required for each party in a case to prove his own
checked employees to determine whether they were positive for alcohol and affirmative assertion by the degree of evidence required by law. 34 In civil
followed other rules and regulations and guidelines of the Bureau of Land cases, the degree of evidence required of a party in order to support his claim
Transportation as well as its company. Having successfully proven such is preponderance of evidence, or that evidence adduced by one party which is
defense, defendant MMTC, therefore, cannot be held liable for the accident. more conclusive and credible than that of the other party. It is, therefore,
“Having reached this conclusion, the Court now, holds that defendant incumbent on the plaintiff who is claiming a right to prove his case.
MMTC be totally absolved from liability and that the complaint against it be Corollarily, defendant must likewise prove its own allegation to buttress its
dismissed. x x x.”32 claim that it is not liable.35
________________ ________________

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

the possession and control of petitioner.42 195 (1990).

The case at bar is clearly within the coverage of Articles 2176 and 2177, 44 Tolentino, A., Commentaries and Jurisprudence on the Civil Code of

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.

Camarote, supra; Phoenix Construction, Inc. vs. Intermediate Appellate 541

Court, et al., 148 SCRA 353 (1987); McKee, et al. vs. Intermediate Appellate VOL. 223, JUNE 21, 1993 541
Court, et al., 211 SCRA 517 (1992).
49 Lanuzo vs. Ping, et al., supra, and cases cited therein.
Metro Manila Transit Corp. vs. Court of Appeals
50 Bahia vs. Litonjua, et al., supra; Yamada vs. Manila Railroad Co., 33 performance of acts indispensable to the business of and beneficial to their
employer.53 To this, we add that actual implementation and monitoring of
Phil. 8 (1915; McKee, et al. vs. Intermediate Appellate Court, et
consistent compliance with said rules should be the constant concern of the
540
employer, acting through dependable supervisors who should regularly
540 SUPREME COURT REPORTS ANNOTATED report on their supervisory functions.
Metro Manila Transit Corp. vs. Court of Appeals In order that the defense of due diligence in the selection and supervision
As early as the case of Gutierrez vs. Gutierrez,51 and thereafter, we have of employees may be deemed sufficient and plausible, it is not enough to
consistently held that where the injury is due to the concurrent negligence of emptily invoke the existence of said company guidelines and policies on
the drivers of the colliding vehicles, the drivers and owners of the said hiring and supervision. As the negligence of the employee gives rise to the
vehicles shall be primarily, directly and solidarily liable for damages and it presumption of negligence on the part of the employer, the latter has the
is immaterial that one action is based on quasi-delict and the other on culpa burden of proving that it has been diligent not only in the selection of
contractual, as the solidarity of the obligation is justified by the very nature employees but also in the actual supervision of their work. The mere
thereof.52 allegation of the existence of hiring procedures and supervisory policies,
It should be borne in mind that the legal obligation of employers to without anything more, is decidedly not sufficient to overcome such
observe due diligence in the selection and supervision of employees is not to presumption.
be considered as an empty play of words or a mere formalism, as appears to We emphatically reiterate our holding, as a warning to all employers,
be the fashion of the times, since the non-observance thereof actually that “(t)he mere formulation of various company policies on safety without
becomes the basis of their vicarious liability under Article 2180. showing that they were being complied with is not sufficient to exempt
On the matter of selection of employees, Campo vs. Camarote, supra, lays petitioner from liability arising from negligence of its employees. It is
down this admonition: incumbent upon petitioner to show that in recruiting and employing the
“x x x. In order that the owner of a vehicle may be considered as having erring driver the recruitment procedures and company policies on efficiency
exercised all diligence of a good father of a family, he should not have been and safety were followed.”54 Paying lip-service to these injunctions or merely
satisfied with the mere possession of a professional driver’s license; he going through the motions of compliance therewith will warrant stern
should have carefully examined the applicant for employment as to his sanctions from the Court.
qualifications, his experience and record of service. These steps appellant These obligations, imposed by the law and public policy in the interests
failed to observe; he has therefore, failed to exercise all due diligence and for the safety of the commuting public, herein petitioner failed to
required of a good father of a family in the choice or selection of driver.” perform. Respondent court was definitely correct in ruling that “x x x due
Due diligence in the supervision of employees, on the other hand, includes diligence in the selection and supervision of employee (is) not proved by mere
the formulation of suitable rules and regulations for the guidance of testimonies to the effect that its applicant has complied with all the company
employees and the issuance of proper instructions intended for the requirements before one is admitted as an employee but without
protection of the public and persons with whom the employer has relations _______________
through his or its employees and the imposition of necessary disciplinary
measures upon employees in case of breach or as may be warranted to 53 Filamer Christian Institute vs. Intermediate Appellate Court, et

ensure the al., 212 SCRA 637 (1992).

________________ 54 Pantranco North Express Inc. vs. Baesa, 179 SCRA 384 (1989). See

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.