Civil Law Review Case No. 43-52.docx

43. COCA-COLA BOTTLERS PHILIPPINES, INC. vs. CA and MS. LYDIA GERONIMO G.R. No. 110295 October 18, 1993 FACTS: Private respondent was the proprietress of Kindergarten Wonderland Canteen in Dagupan City. In August 1989, some parents of the students complained to her that the Coke and Sprite soft drinks sold by her contained fiber-like matter and other foreign substances. She brought the said bottles for examination to DOH and it was found out that the soft drinks “are adulterated.” As a result, her per day sales of soft drinks severely plummeted that she had to close her shop on 12 December 1989 for losses. She demanded damages from petitioner before the RTC which dismissed the same on motion by petitioner based on the ground of Prescription. On appeal, the CA annulled the orders of the RTC. ISSUE: WON the action for damages by the proprietress against the soft drinks manufacturer should be treated as one for breach of implied warranty under article 1561 of the CC which prescribes after six months from delivery of the thing sold. RULING: Petition Denied. The SC agrees with the CA’s conclusion that the cause of action in the case at bar is found on quasi-delict under Article 1146 of the CC which prescribes in four years and not on breach of warranty under article 1562 of the same code. This is supported by the allegations in the complaint which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption." The action in based on quasi-delict, therefore, it prescribes in four years. The allegations in the complaint makes a reference to the reckless and negligent manufacture of “adulterated food items intended to be sold for public consumption.” The vendee’s remedies are not limited to those prescribed in Article 1567 of the Civil Code. The vendor could be liable for quasi-delict under Article 2176, and an action based thereon may be brought by the vendee. The existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor. Liability for quasi-delict may still exist despite the presence of contractual relations.

44. Singson vs BPI FACTS: Singson, was one of the defendants in a civil case, in which judgment had been rendered sentencing him and his co-defendants therein Lobregat and Villa-Abrille & Co., to pay a sum of money to the plaintiff therein. Said judgment became final and executory as only against Ville-Abrille for its failure to file an appeal. A writ of garnishment was subsequently served upon BPI — in which the Singsons had a current account — insofar as Villa-Abrille’s credits against the Bank were concerned. Upon receipt of the said Writ of Garnishment, a clerk of the bank, upon reading the name of the Singson in the title of the Writ of Garnishment as a party defendants, without further reading the body and informing himself that said garnishment was merely intended for the deposits of defendant Villa-Abrille & Co., et al, prepared a letter informing Singson of the garnishment of his deposits by the plaintiff in that case.

Subsequently, two checks issued by the plaintiff Julian C. Singson, one in favor of B. M. Glass Service and another in favor of the Lega Corporation, were dishonored by the bank. B. M. Glass Service then wrote to Singson that the check was not honored by BPI because his account therein had already been garnished and that they are now constrained to close his credit account with them. Singson wrote to BPI, claiming that his name was not included in the Writ of Execution and Notice of Garnishment, which was served upon the bank. The defendants lost no time to rectify the mistake that had been inadvertently committed.Thus this action for damages. ISSUE: WON the existence of a contract between the parties bars a plaintiff’s claim for damages based on torts? HELD: NO. The existence of a contract between the parties does not bar the commission of a tort by the one against the order and the consequent recovery of damages therefore. Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso, involving an airplane passenger who, despite his first-class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover damages from the air-carrier, upon the ground of tort on the latter’s part, for, although the relation between a passenger and a carrier is “contractual both in origin and nature … the act that breaks the contract may also be a tort”. In view, however, of the facts obtaining in the case at bar, and considering, particularly, the circumstance, that the wrong done to the plaintiff was remedied as soon as the President of the bank realized the mistake he and his subordinate employee had committed, the Court finds that an award of nominal damages — the amount of which need not be proven — in the sum of P1,000, in addition to attorney’s fees in the sum of P500, would suffice to vindicate plaintiff’s rights. 45. AIR FRANCE v. RAFAEL CARRASCOSO G.R. No. L-21438, September 28, 1966 FACTS: The plaintiff, Rafael Carrascoso, paid for and was issued a “First class” ticket by Air France from Manila to Rome. During a stopover in Bangkok, the manager of Air France asked the plaintiff to vacate his seat because a white man has a “better right” than him. At first, the plaintiff protested, but, as things got heated up, he was asked by the other Filipinos on board to give up his seat and transfer in the tourist class. After the trip, Carrascoso sued Air France for the embarrassment and inconvenience he suffered. The trail court awarded damages to the plaintiff which was affirmed by the Court of Appeals. Air France assailed the decision. According to them, the issuance of a first class ticket does not guarantee Carrascoso a seat in the first Class. ISSUE: Whether or not Air France is liable for the damages to Carrascoso and on what basis HELD: Yes. Air France is liable based on culpa contractual and culpa aquiliana. Culpa Contractual.

There exists a contract of carriage between Air France and Carrascoso. There was a contract to furnish Carrasocoso a first class passage; Second, That said contract was breached when Air France failed to furnish first class transportation at Bangkok; and Third, t h a t t h e r e w a s b a d f a i t h w h e n A i r F r a n c e ’ s e m p l o y e e c o m p e l l e d Carrascoso to leave his first class accommodation berth “after he was already, seated”and t o t ake a s eat i n t he t ouri st cl ass, b y reason of whi ch he su ffe red inconvenience, embarrassments and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. The Supreme Court did not give credence to Air France’s claim that the issuance of a first class ticket to a passenger is not an assurance that he will be given a first class seat. Such claim is simply incredible. Culpa Aquiliana Here, the SC ruled, even though there is a contract of carriage between Air France and Carrascoso, there is also a tortuous act based on culpa aquiliana. Passengers do not contract merely for transportation. They have a right to be treated by the carrier’s employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct onthe part of employees towards a passenger gives the latter an action for damages against the carrier. Air France’s contract with Carrascoso is one attended with public duty. The stress of Carrascoso’s action is placed upon his wrongful expulsion. This is a violation of public duty by the Air France — a case of quasi-delict. Damages are proper.

45. AIR FRANCE v. RAFAEL CARRASCOSO G.R. No. L-21438, September 28, 1966 FACTS: Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March 30, 1958. The defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a ‘first class’ round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled in ‘first class’, but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the ‘first class’ seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a ‘white man’, who, the Manager alleged, had a ‘better right’ to the seat. When asked to vacate his ‘first class’ seat, the plaintiff, as was to be expected, refused, and told defendant’s Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said Cuento, ‘many of the Filipino passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot discussion with the manager, they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man’ and plaintiff reluctantly gave his ‘first class’ seat in the plane.

ISSUE: Whether or not there was bad faith on the part of the petitioner airline, thus making petitioner liable for damages in favor of respondent. RULING: That there was a contract to furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg; That said contract was breached when petitioner failed to furnish first class transportation at Bangkok; and that there was bad faith when petitioner’s employee compelled Carrascoso to leave his first class accommodation berth “after he was already, seated” and to take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true that there is no specific mention of the term bad faith in the complaint. But, the inference of bad faith is there, it may be drawn from the facts and circumstances set forth therein. The contract was averred to establish the relation between the parties. But the stress of the action is put on wrongful expulsion. Quite apart from the foregoing is that (a) right the start of the trial, respondent’s counsel placed petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in Bangkok, Carrascoso was ousted by petitioner’s manager who gave his seat to a white man; and (b) evidence of bad faith in the fulfillment of the contract was presented without objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to whether or not there is sufficient averment in the complaint to justify an award for moral damages. Deficiency in the complaint, if any, was cured by the evidence. A contract to transport passengers is quite different in kind and degree from any other contractual relation. And this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier’s employees, naturally, could give ground for an action for damages. Passengers do not contract merely for transportation. They have a right to be treated by the carrier’s employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier.

47. DR. EMMANUEL JARCIA, JR. and DR. MARILOU BASTAN VS PEOPLE OF THE PHILIPPPINES FACTS Belinda Santiago lodged a complaint with the NBI against the petitioners, Dr. Emmanuel Jarcia, Jr. and Dr. Marilou Bastan, for their alleged neglect of professional duty which caused her son, Roy Alfonso

Santiago, to suffer serious physical injuries. Upon investigation, the NBI found that Roy Jr. was hit by a taxicab and he was rushed to the Manila Doctors Hospital for an emergency medical treatment. An X-ray of the victim’s ankle was ordered and it showed no fracture as read by Dr. Jarcia. Dr.Bastan entered the emergency room and, after conducting her own examination of the victim, informed Mrs. Santiago that since it was only the ankle that was hit, there was no need to examine the upper leg.3. A few days later, Roy Jr. developed fever, swelling of the right leg and misalignment of the right foot. Mrs. Santiago broughthim back to the hospital; and that the X-ray revealed a right midtibial fracture and a linear hairline fracture in the shaft of the bone. ISSUE: WON Dr. Jarcia and Dr. Bastan are guilty of negligence HELD: YES. Although, according to expert testimony, the 2 doctors could have done more to treat the patient Roy, there was no precise evidence and scientific explanation pointing to the fact that the delay in the application of the cast to the patient’s fractured leg because of failure to immediately diagnose the specific injury of the patient, prolonged the pain of the child or aggravated his condition or even caused further complications. What is lacking here is evidence to prove that the doctors were the ones at fault for the serious physical injuries sustained by Roy. The fact stands though, that in failing to perform an extensive medical examination to determine the extent of Roy Jr.’s injuries, Dr. Jarcia and Dr. Bastan were remiss of their duties as members of the medical profession. Assuming for the sake of argument that they did not have the capacity to make such thorough evaluation at that stage, they should have referred the patient to another doctor with sufficient training and experience instead of assuring him and his mother that everything was all right. There existed a physician-patient relationship, and by assuring Belinda that everything was fine, they deprived the victim of further medical help. Petitioners were absolved in the criminal charge for the reason that a reasonable doubt existed but they are liable for damages. There is no direct evidence proving that it was their negligence that caused the suffering of Roy. 48. Professional Services Inc. (PSI) v. Natividad and Enrique Agana FACTS Natividad Agana was rushed to Medical City because of difficulty of bowel movement and bloody anal discharge. Dr. Ampil diagnosed her to be suffering from cancer of the sigmoid. Dr. Ampil performed an anterior resection surgery on her, and finding that the malignancy spread on her left ovary, he obtained the consent of her husband, Enrique, to permit Dr. Fuentes to perform hysterectomy on her. After the hysterectomy, Dr. Fuentes showed his work to Dr. Ampil, who examined it and found it in order, so he allowed Dr. Fuentes to leave the operating room. Dr. Ampil was about to complete the procedure when the attending nurses made some remarks on the Record of Operation: “sponge count lacking 2; announced to surgeon search done but to no avail continue for closure” (two pieces of gauze were missing). A “diligent search” was conducted but they could not be found. Dr. Ampil then directed that the incision be closed. A couple of days after, she complained of pain in her anal region, but the doctors told her that it was just a natural consequence of the surgery. Dr. Ampil recommended that she consult an oncologist to examine the cancerous nodes which were not removed during the operation. After months of consultations and examinations in the US, she was told that she was free of cancer. Weeks after coming back, her daughter found a piece of gauze (1.5 in) protruding from her

vagina, so Dr. Ampil manually extracted this, assuring Natividad that the pains will go away. However, the pain worsened, so she sought treatment at a hospital, where another 1.5 in piece of gauze was found in her vagina. She underwent another surgery. Sps. Agana filed a complaint for damages against PSI (owner of Medical City), Dr. Ampil, and Dr. Fuentes, alleging that the latter are liable for negligence for leaving 2 pieces of gauze in Natividad’s body, and malpractice for concealing their acts of negligence. Enrique Agana also filed an administrative complaint for gross negligence and malpractice against the two doctors with the PRC (although only the case against Dr. Fuentes was heard since Dr. Ampil was abroad). Pending the outcome of the cases, Natividad died (now substituted by her children). RTC found PSI and the two doctors liable for negligence and malpractice. PRC dismissed the case against Dr. Fuentes. CA dismissed only the case against Fuentes.

ISSUE AND HOLDING 1. WON CA erred in holding Dr. Ampil liable for negligence and malpractice. NO; DR. AMPIL IS GUILTY 2. WON CA erred in absolving Dr. Fuentes of any liability. NO 3. WON PSI may be held solidarily liable for Dr. Ampil’s negligence. YES RATIO DR. AMPIL IS LIABLE FOR NEGLIGENCE AND MALPRACTICE His arguments are without basis [did not prove that the American doctors were the ones who put / left the gauzes; did not submit evidence to rebut the correctness of the operation record (re: number of gauzes used); re: Dr. Fuentes’ alleged negligence, Dr. Ampil examined his work and found it in order]. Leaving foreign substances in the wound after incision has been closed is at least prima facie negligence by the operating surgeon. Even if it has been shown that a surgeon was required to leave a sponge in his patient’s abdomen because of the dangers attendant upon delay, still, it is his legal duty to inform his patient within a reasonable time by advising her of what he had been compelled to do, so she can seek relief from the effects of the foreign object left in her body as her condition might permit. What’s worse in this case is that he misled her by saying that the pain was an ordinary consequence of her operation.

Medical negligence; standard of diligence To successfully pursue this case of medical negligence, a patient must only prove that a health care provider either failed to do something [or did something] which a reasonably prudent health care provider would have done [or wouldn’t have done], and that the failure or action caused injury to the patient.  Duty – to remove all foreign objects from the body before closure of the incision; if he fails to do so, it was his duty to inform the patient about it  Breach – failed to remove foreign objects; failed to inform patient  Injury – suffered pain that necessitated examination and another surgery  Proximate Causation – breach caused this injury; could be traced from his act of closing the incision despite information given by the attendant nurses that 2 pieces of gauze were still missing; what established causal link: gauze pieces later extracted from patient’s vagina

DR. FUENTES NOT LIABLE The res ipsa loquitur [thing speaks for itself] argument of the Aganas’ does not convince the court. Mere invocation and application of this doctrine does not dispense with the requirement of proof of negligence.

Requisites for the applicability of res ipsa loquitur 1. Occurrence of injury 2. Thing which caused injury was under the control and management of the defendant [DR. FUENTES] — LACKING SINCE CTRL+MGT WAS WITH DR. AMPIL 3. Occurrence was such that in the ordinary course of things, would not have happened if those who had control or management used proper care 4. Absence of explanation by defendant Under the Captain of the Ship rule, the operating surgeon is the person in complete charge of the surgery room and all personnel connected with the operation. That Dr. Ampil discharged such role is evident from the following:  He called Dr. Fuentes to perform a hysterectomy  He examined Dr. Fuentes’ work and found it in order  He granted Dr. Fuentes permission to leave  He ordered the closure of the incision HOSPITAL OWNER PSI SOLIDARILY LIABLE WITH DR. AMPIL [NCC 2180], AND DIRECTLY LIABLE TO SPS. AGANAS [NCC 2176] Previously, employers cannot be held liable for the fault or negligence of its professionals. However, this doctrine has weakened since courts came to realize that modern hospitals are taking a more active role in supplying and regulating medical care to its patients, by employing staff of physicians, among others. Hence, there is no reason to exempt hospitals from the universal rule of respondeat superior. Here are the Court’s bases for sustaining PSI’s liability:  Ramos v. CA doctrine on E-E relationship  o

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For purposes of apportioning responsibility in medical negligence cases, an employeremployee relationship in effect exists between hospitals and their attending and visiting physicians. [LABOR LESSON: power to hire, fire, power of control] Agency principle of apparent authority / agency by estoppel

 o

Imposes liability because of the actions of a principal or employer in somehow misleading the public into believing that the relationship or the authority exists [see NCC 1869] PSI publicly displays in the Medical City lobby the names and specializations of their physicians. Hence, PSI is now estopped from passing all the blame to the physicians whose names it proudly paraded in the public directory, leading the public to believe that it vouched for their skill and competence.

o

o 

If doctors do well, hospital profits financially, so when negligence mars the quality of its services, the hospital should not be allowed to escape liability for its agents’ acts.

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Doctrine of corporate negligence / corporate responsibility  o

This is the judicial answer to the problem of allocating hospital’s liability for the negligent acts of health practitioners, absent facts to support the application of respondeat superior. This provides for the duties expected [from hospitals]. In this case, PSI failed to perform the duty of exercising reasonable care to protect from harm all patients admitted into its facility for medical treatment. PSI failed to conduct an investigation of the matter reported in the note of the count nurse, and this established PSI’s part in the dark conspiracy of silence and concealment about the gauzes.

o

o 

PSI has actual / constructive knowledge of the matter, through the report of the attending nurses + the fact that the operation was carried on with the assistance of various hospital staff o It also breached its duties to oversee or supervise all persons who practice medicine within its walls and take an active step in fixing the negligence committed  PSI also liable under NCC 2180  o

It failed to adduce evidence to show that it exercised the diligence of a good father of the family in the accreditation and supervision of Dr. Ampil

49. PNB vs. FF CRUZ and Company Inc.654 SCRA 333 Facts: Plaintiff FF Cruz opened a combo account and dollar savings account with PNB, wherein its President Felipe Cruz and Secretary-Treasurer Angelita A. Cruz were the named signatories. While they were out of the country, applications for cashiers and managers check bearing the president’s signature were presented to and both approved by the PNB. The first was on March 27, 1995 for P9, 950,000.00payable to Gene B. Sangalang and the other was on April 24, 1995 for P3,260,500.31 payable to Paul Bautista. The amounts were debited by the PNB against the combo account of FF Cruz. Upon return to the country Angelita examined their statement of account with PNB and noticed the deductions and claimed that it was unauthorized and fraudulently made, FF Cruz requested PNB to credit back and restore to its account the value of the checks. PNB refused, thus FF Cruz filed suit for damages against the PNB and its own accountant Aurea Caparas. PNB averred that It exercised due diligence in handling the account. The applications for managers check have passed through the standard bank procedures and it was only after finding no infirmity that these were given due course. In fact, it was Caparas, the accountant of FF Cruz, who confirmed the regularity of the transaction. The trial court ruled that F.F. Cruz and Company, Inc. was guilty of negligence in clothing Aurea Caparas with authority to make decisions on and dispositions of its account which paved the way for the fraudulent transactions that and that FF Cruz was negligent in not immediately informing PNB of the fraud However, PNB was, likewise, negligent in not calling or personally verifying

from the authorized signatories the legitimacy of the subject withdrawals considering that they were in huge amounts. For this reason, PNB had the last clear chance to prevent the unauthorized debits from FF Cruz’s combo account. Thus, PNB should bear the whole loss. CA Affirmed the decision of the trial court with modification on the award of damages that PNB should only pay 60% of the actual damage and FF Cruz should bear the remaining 40% for its contributory negligence. Issue: Is PNB liable for the loss? Held: As correctly found by the appellate court, PNB failed to make the proper verification because the applications for the managers check do not bear the signature of the bank verifier. PNB concedes the absence of the subject signature but argues that the same was the result of inadvertence. PNB was negligent in the handling of FF Cruz’s combo account, specifically, with respect to PNBs failure to detect the forgeries in the subject applications for managers check which could have prevented the loss. As we have often ruled, the banking business is impressed with public trust. A higher degree of diligence is imposed on banks. 50. 51. PHILAM INSURANCE COMPANY, INC. AND AMERICAN HOME INSURANCE CO., PETITIONERS, VS. COURT OF APPEALS, AND D.M. CONSUNJI INC., RESPONDENTS. FACTS: Four gensets from the United States of America were ordered by Citibank, N.A. (Citibank). Petitioner AHIC insured these gensets under Certificate No. 60221 for USD 851,500 covering various risks.[1] The insurance policy provided that the claim may be paid in the Philippines by Philam Insurance Co., Inc, AHIC’s local settling agent.[2] Citibank’s broker-forwarder, Melicia International Services (MIS),[3] transported the gensets in separate container vans. It was instructed by Citibank to deliver and haul one genset to Makati City,[4] where the latter’s office was being constructed by the building contractor, DMCI. MIS was further instructed to place the 13-ton genset at the top of Citibank’s building. The broker-forwarder declined, since it had no power cranes. Thus, Citibank assigned the job to private respondent DMCI, which accepted the task. On 16 October 1993, DMCI lifted the genset with a crane (Unic-K-2000) that had a hydraulic telescopic boom and a loading capacity of 20 tons. During the lifting process, both the crane’s boom and the genset fell and got damaged. After two days, DMCI’s surveyor, Manila Adjusters & Surveyors Co. (MASC) assessed the condition of the crane and the genset. According to its Survey Certificate, the genset was already deformed.

Citibank demanded from DMCI the full value of the damaged genset, including the cost, insurance and freight amounting to USD 212,850. Private respondent refused to pay, asserting that the damage was caused by an accident. Thereafter, Citibank filed an insurance claim with Philam, AHIC’s local settling agent, for the value of the genset. Philam paid the claim for PhP 5,866,146. Claiming the right of subrogation, Philam demanded the reimbursement of the genset’s value from DMCI, which denied liability. Thus, on 19 April 1994, Philam filed a Complaint with the RTC to recover the value of the insured genset. At the trial court, petitioner Philam did not invoke res ipsa loquitur. Rather, during the pre-trial conference, the parties agreed on this sole issue: “Whether or not the damage was the fault of the defendant or within their area of supervision at the time the cause of damage occurred.” The RTC ruled in favor of Philam and ruled that the loss or damage to the genset was due to the negligent operation of the crane. ISSUE: Whether petitioners have sufficiently established the negligence of DMCI for the former to recover the value of the damaged genset. HELD: NO. For DMCI to be liable for damages, negligence on its part must be established.Additionally, that finding must be the proximate cause of the damage to the genset.We agree with the CA that Philam failed to establish DMCI’s negligence. Negligence is the want of care required by the circumstances. It is a conduct that involves an unreasonably great risk of causing damage; or, more fully, a conduct that falls below the standard established by law for the protection of others against unreasonably great risk of harm. It would be a long stretch to construe these as acts of negligence. Not all omissions can be considered as negligent. The test of negligence is as follows: Could a prudent man, in the case under consideration, foresee harm as a result of the course actually pursued? If so, it was the duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm, followed by ignoring of the suggestion born of this prevision, is always necessary before negligence can be held to exist. Applying the test, the circumstances would show that the acts of the crane operator were rational and justified. DMCI’s crane operation team determined accordingly that there was a need to raise the boom in order to put the genset in the exact location. Indeed, the heavy equipment must be secured in its proper place. The question as to what would constitute the conduct of a prudent man in a given situation must of course be always determined in the light of human experience and in view of the facts involved in the particular case. Abstract speculations cannot here be of much value but this much can be profitably said: Reasonable men govern their conduct by the circumstances which are

before them or known to them. They are not, and are not supposed to be, omniscient of the future. Hence they can be expected to take care only when there is something before them to suggest or warn of danger. In this case, res ipsa loquitur is not applicable, since there is direct evidence on the issue of diligence or lack thereof pertaining to the lifting of the genset. The doctrine is not a rule of substantive law, but merely a mode of proof or a mere procedural convenience. In any event, res ipsa loquitur merely provides a rebuttable presumption of negligence. On this, we have already pointed out that the evidence does not prove negligence on the part of DMCI, and that due diligence on its part has been established. Hence, it has generally been held that the presumption arising from the doctrine cannot be availed of, or is overcome when the plaintiff has knowledge and testifies or presents evidence as to the specific act of negligence that caused the injury complained of; or when there is direct evidence as to the precise cause of the accident, and with all the attendant facts clearly present.[51] Finally, neither the presumption nor the doctrine would apply when the circumstances have been so completely elucidated that no inference of the defendant's liability can reasonably be made, whatever the source of the evidence. Absent any finding of negligence, we sustain the CA’s findings that DMCI exercised due diligence; that the event is an accident; and that consequently Philam cannot claim damages for the damaged genset.

52. SERVANDO VS. PHILIPPINE STEAM NAVIGATION CO. Facts: Bico and Servando loaded on board the FS-176 the following cargoes: 1.528 cavans of rice and 44 cartons of colored paper, toys and general merchandise. Upon the arrival of the vessel, the cargoes were discharged, complete and in good order to the warehouse of the Bureau of Customs. At 2:00 pm of the same day, a fire of unknown reasons razed the warehouse. Before the fire, Bico was able to take delivery of 907 cavans of rice. The petitioners are now claiming for the value of the destroyed goods from the common carrier. The Trial Court ordered the respondent to pay the plaintiffs the amount of their lost goods on the basis that the delivery of the shipment to the warehouse is not the delivery contemplated by Article 1736 of the New Civil Code, since the loss occurred before actual or constructive delivery. The petitioners argued that the stipulation in the bills of lading does not bind them because they did not sign the same. The stipulation states that the carrier shall not be responsible for loss unless such loss was due to the carrier’s negligence. Neither shall it be liable for loss due to fortuitous events such as dangers of the sea and war. Issue: Whether or not the carrier should be held liable for the destruction of the goods

Held: No. There is nothing on record to show that the carrier incurred in delay in the performance of its obligation. Since the carrier even notified the plaintiffs of the arrival of their shipments and had demanded that they be withdrawn. The carrier also cannot be charged with negligence since the storage of the goods was in the Customs warehouse and was undoubtedly made with their knowledge and consent. Since the warehouse belonged and maintained by the Government, it would be unfair to impute negligence to the appellant since it has no control over the same. Appellant, as obligor, is exempt from liability for non- performance because the burning of the warehouse containing appellees' goods, which is the immediate and proximate cause of the loss, is a fortuitous event or force majeure which could not have been foreseen by appellant. Where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor is exempt from liability for non- performance. (See Art. 1174 of the New Civil Code.) The Partidas(Law II, Title 33, Partida 7), the antecedent of Article 1174 of the Civil Code, defines "caso fortuito" as "an event that takes place by accident and could not been have foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers." In the dissertation of the phrase "caso fortuito" the Encyclopedia Juridicada Española says: "In a legal sense and consequently, also in relation to contracts, caso fortuito presents the following essential characteristics: (1) the cause of the unforseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it imposible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to creditor." There is nothing in the record to show that appellant carrier incurred in delay in the performance of its obligation. It appears that appellant had not only notified appellees of the arrival of their shipment, out had demanded that the same be withdrawn. In fact, pursuant to such demand, appellee Uy Bico had taken delivery of 907 cavans of rice before the burning of the warehouse. Nor can the appellant or its employees be charged with negligence. The storage of the goods in the Customs warehouse pending withdrawal thereof by the appellees was undoubtedly made with their knowledge and consent. Since the warehouse belonged to and was maintained by the government, it would be unfair to impute negligence to the appellant, the latter having no control whatsoever over the same. The lower court in its decision relied on the ruling laid down in Yu Biao Sontua vs. Ossorio, 43 Phil. 511, where this Court held the defendant liable for damages arising from a fire caused by the negligence of the defendant's employees while loading cases of gasoline and petroleum products. But unlike in the said case, there is not a shred of proof in the present case that the cause of the fire that broke out in the Custom's warehouse was in any way attributable to the

negligence of the appellant or its employees. Under the circumstances, the appellant is plainly not responsible.