Obli Cases For Digest.docx

G.R. No. 122039 May 31, 2000 VICENTE CALALAS, petitioner, vs. COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.

MENDOZA, J.: This is a petition for review on certiorari of the decision of the Court of Appeals, dated March 31, 1991, reversing the contrary decision of the Regional Trial Court, Branch 36, Dumaguete City, and awarding damages instead to private respondent Eliza Jujeurche Sunga as plaintiff in an action for breach of contract of carriage. 1 

The facts, as found by the Court of Appeals, are as follows: At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga, then a college freshman majoring in Physical Education at the Siliman University, took a passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the back of the door at the rear end of the vehicle.

was responsible for the accident. It took cognizance of another case (Civil Case No. 3490), filed by Calalas against Salva and Verena, for quasi-delict, in which Branch 37 of the same court held Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney. On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that Sunga's cause of action was based on a contract of carriage, not quasi-delict, and that the common carrier failed to exercise the diligence required under the Civil Code. The appellate court dismissed the third-party complaint against Salva and adjudged Calalas liable for damages to Sunga. The dispositive portion of its decision reads: WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and another one is entered ordering defendant-appellee Vicente Calalas to pay plaintiff-appellant: (1) P50,000.00 damages;

as

actual

and

compensatory

(2) P50,000.00 as moral damages; (3) P10,000.00 as attorney's fees; and (4) P1,000.00 as expenses of litigation; and (5) to pay the costs.

On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured. She sustained a fracture of the "distal third of the left tibia-fibula with severe necrosis of the underlying skin." Closed reduction of the fracture, long leg circular casting, and case wedging were done under sedation. Her confinement in the hospital lasted from August 23 to September 7, 1989. Her attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon, certified she would remain on a cast for a period of three months and would have to ambulate in crutches during said period. On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage by the former in failing to exercise the diligence required of him as a common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of the Isuzu truck. The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of liability, holding that it was the driver of the Isuzu truck who

SO ORDERED. Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of Verena was the proximate cause of the accident negates his liability and that to rule otherwise would be to make the common carrier an insurer of the safety of its passengers. He contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito. Petitioner further assails the award of moral damages to Sunga on the ground that it is not supported by evidence. The petition has no merit. The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the owner of the truck liable for quasi-delict ignores the fact that she was never a party to that case and, therefore, the principle of res judicata does not apply. Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the damage caused to petitioner's jeepney. On the other hand, the issue in this case is whether petitioner is liable on his contract

of carriage. The first, quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its source the negligence of the tortfeasor. The second, breach of contract or culpa contractual, is premised upon the negligence in the performance of a contractual obligation. Consequently, in quasi-delict, the negligence or fault should be clearly established because it is the basis of the action, whereas in breach of contract, the action can be prosecuted merely by proving the existence of the contract and the fact that the obligor, in this case the common carrier, failed to transport his passenger safely to his destination. In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof. 2 

There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his driver Verena liable for the damage to petitioner's jeepney, should be binding on Sunga. It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. It provides: Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1746, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756. Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very

cautious persons, with due regard for all the circumstances. Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed by articles 1733 and 1755. In the case at bar, upon the happening of the accident, the presumption of negligence at once arose, and it became the duty of petitioner to prove that he had to observe extraordinary diligence in the care of his passengers. Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755? We do not think so. Several factors militate against petitioner's contention. First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. This is a violation of the R.A. No. 4136, as amended, or the Land Transportation and Traffic Code, which provides: Sec. 54. Obstruction of Traffic. — No person shall drive his motor vehicle in such a manner as to obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or loading or unloading freight, obstruct the free passage of other vehicles on the highway. Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating capacity of the jeepney, a violation of §32(a) of the same law. It provides: Exceeding registered capacity. — No person operating any motor vehicle shall allow more passengers or more freight or cargo in his vehicle than its registered capacity. The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to which the other passengers were exposed. Therefore, not only was petitioner unable to overcome the presumption of negligence imposed on him for the injury sustained by Sunga, but also, the evidence shows he was actually negligent in transporting passengers. We find it hard to give serious thought to petitioner's contention that Sunga's taking an "extension seat" amounted to an implied assumption of risk. It is akin to arguing that the injuries to the many victims of the tragedies in our seas should not be compensated merely because those passengers assumed a greater

risk of drowning by boarding an overloaded ferry. This is also true of petitioner's contention that the jeepney being bumped while it was improperly parked constitutes caso fortuito. A caso fortuito is an event which could not be foreseen, or which, though foreseen, was inevitable. This requires that the following requirements be present: (a) the cause of the breach is independent of the debtor's will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill his obligation in a normal manner, and (d) the debtor did not take part in causing the injury to the creditor. Petitioner should have foreseen the danger of parking his jeepney with its body protruding two meters into the highway. 3 

4 

Finally, petitioner challenges the award of moral damages alleging that it is excessive and without basis in law. We find this contention well taken.

appellate court that petitioner acted in bad faith in the performance of the contract of carriage. Sunga's contention that petitioner's admission in open court that the driver of the jeepney failed to assist her in going to a nearby hospital cannot be construed as an admission of bad faith. The fact that it was the driver of the Isuzu truck who took her to the hospital does not imply that petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is merely implied recognition by Verena that he was the one at fault for the accident. WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its resolution, dated September 11, 1995, are AFFIRMED, with the MODIFICATION that the award of moral damages is DELETED. SO ORDERED.

In awarding moral damages, the Court of Appeals stated: Plaintiff-appellant at the time of the accident was a first-year college student in that school year 19891990 at the Silliman University, majoring in Physical Education. Because of the injury, she was not able to enroll in the second semester of that school year. She testified that she had no more intention of continuing with her schooling, because she could not walk and decided not to pursue her degree, major in Physical Education "because of my leg which has a defect already." Plaintiff-appellant likewise testified that even while she was under confinement, she cried in pain because of her injured left foot. As a result of her injury, the Orthopedic Surgeon also certified that she has "residual bowing of the fracture side." She likewise decided not to further pursue Physical Education as her major subject, because "my left leg . . . has a defect already." Those are her physical pains and moral sufferings, the inevitable bedfellows of the injuries that she suffered. Under Article 2219 of the Civil Code, she is entitled to recover moral damages in the sum of P50,000.00, which is fair, just and reasonable. As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not one of the items enumerated under Art. 2219 of the Civil Code. As an exception, such damages are recoverable: (1) in cases in which the mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220. 5 

6

In this case, there is no legal basis for awarding moral damages since there was no factual finding by the

G.R. No. 164349

January 31, 2006

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI),Petitioner, vs. ALFONSO VERCHEZ, GRACE VERCHEZINFANTE, MARDONIO INFANTE, ZENAIDA VERCHEZ-CATIBOG, AND FORTUNATO CATIBOG, Respondents. DECISION CARPIO MORALES, J.: On January 21, 1991, Editha Hebron Verchez (Editha) was confined at the Sorsogon Provincial Hospital due to an ailment. On even date, her daughter Grace Verchez-Infante (Grace) immediately hied to the Sorsogon Branch of the Radio Communications of the Philippines, Inc. (RCPI) whose services she engaged to send a telegram to her sister Zenaida Verchez-Catibog (Zenaida) who was residing at 18 Legal St., GSIS Village, Quezon City1 reading: "Send check money Mommy hospital." For RCPI’s services, Grace paid P10.502 for which she was issued a receipt.3 As three days after RCPI was engaged to send the telegram to Zenaida no response was received from her, Grace sent a letter to Zenaida, this time thru JRS Delivery Service, reprimanding her for not sending any financial aid. Immediately after she received Grace’s letter, Zenaida, along with her husband Fortunato Catibog, left on January 26, 1991 for Sorsogon. On her arrival at Sorsogon, she disclaimed having received any telegram.

In the meantime, Zenaida and her husband, together with her mother Editha left for Quezon City on January 28, 1991 and brought Editha to the Veterans Memorial Hospital in Quezon City where she was confined from January 30, 1991 to March 21, 1991. The telegram was finally delivered to Zenaida 25 days later or on February 15, 1991. 4 On inquiry from RCPI why it took that long to deliver it, a messenger of RCPI replied that he had nothing to do with the delivery thereof as it was another messenger who previously was assigned to deliver the same but the address could not be located, hence, the telegram was resent on February 2, 1991, and the second messenger finally found the address on February 15, 1991. Editha’s husband Alfonso Verchez (Verchez), by letter of March 5, 1991,5 demanded an explanation from the manager of the Service Quality Control Department of the RCPI, Mrs. Lorna D. Fabian, who replied, by letter of March 13, 1991,6 as follows: Our investigation on this matter disclosed that subject telegram was duly processed in accordance with our standard operating procedure. However, delivery was not immediately effected due to the occurrence of circumstances which were beyond the control and foresight of RCPI. Among others, during the transmission process, the radio link connecting the points of communication involved encountered radio noise and interferences such that subject telegram did not initially registered (sic) in the receiving teleprinter machine. Our internal message monitoring led to the discovery of the above. Thus, a repeat transmission was made and subsequent delivery was effected. (Underscoring supplied) Verchez’s lawyer thereupon wrote RCPI’s manager Fabian, by letter of July 23, 1991, 7 requesting for a conference on a specified date and time, but no representative of RCPI showed up at said date and time. On April 17, 1992, Editha died. On September 8, 1993, Verchez, along with his daughters Grace and Zenaida and their respective spouses, filed a complaint against RCPI before the Regional Trial Court (RTC) of Sorsogon for damages. In their complaint, the plaintiffs alleged that, inter alia, the delay in delivering the telegram contributed to the early demise of the late Editha to their damage and prejudice,8 for which they prayed for the award of moral and exemplary damages9 and attorney’s fees.10 After its motion to dismiss the complaint for improper venue11 was denied12 by Branch 5 of the RTC of Sorsogon, RCPI filed its answer, alleging that except with respect to Grace,13 the other plaintiffs had no

privity of contract with it; any delay in the sending of the telegram was due to force majeure, "specifically, but not limited to, radio noise and interferences which adversely affected the transmission and/or reception of the telegraphic message"; 14 the clause in the Telegram Transmission Form signed by Grace absolved it from liability for any damage arising from the transmission other than the refund of telegram tolls;15 it observed due diligence in the selection and supervision of its employees; and at all events, any cause of action had been barred by laches.16 The trial court, observing that "although the delayed delivery of the questioned telegram was not apparently the proximate cause of the death of Editha," ruled out the presence of force majeure. Respecting the clause in the telegram relied upon by RCPI, the trial court held that it partakes of the nature of a contract of adhesion. Finding that the nature of RCPI’s business obligated it to dispatch the telegram to the addressee at the earliest possible time but that it did not in view of the negligence of its employees to repair its radio transmitter and the concomitant delay in delivering the telegram on time, the trial court, upon the following provisions of the Civil Code, to wit: Article 2176 – Whoever by act or omission causes damage to another, there being at fault or negligence, is obliged to pay for the damage done. Such fault or negligence if there is no pre-existing contractual relation between the parties, is called quasi-delict and is governed by the provisions of this Chapter. Article 1173 defines the fault of (sic) negligence of the obligor as the "omission of the diligence which is required by the nature of the obligation and corresponds with the circumstances of the person, of the time, or the place." In the instant case, the obligation of the defendant to deliver the telegram to the addressee is of an urgent nature. Its essence is the early delivery of the telegram to the concerned person. Yet, due to the negligence of its employees, the defendant failed to discharge of its obligation on time making it liable for damages under Article 2176. The negligence on the part of the employees gives rise to the presumption of negligence on the part of the employer.17 (Underscoring supplied), rendered judgment against RCPI. Accordingly, it disposed: WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered in favor of the plaintiffs and against the defendant, to wit: Ordering the defendant to pay the plaintiffs the following amount:

1. The amount of One Hundred (P100,000.00) Pesos as moral damages;

Thousand

2. The amount of Twenty Thousand (P20,000.00) Pesos as attorney’s fees; and 3. To pay the costs. SO ORDERED.18 On appeal, the Court of Appeals, by Decision of February 27, 2004,19 affirmed the trial court’s decision. Hence, RCPI’s present petition for review on certiorari, it raising the following questions: (1) "Is the award of moral damages proper even if the trial court found that there was no direct connection between the injury and the alleged negligent acts?" 20 and (2) "Are the stipulations in the ‘Telegram Transmission Form,’ in the nature "contracts of adhesion" (sic)?21 RCPI insists that respondents failed to prove any causal connection between its delay in transmitting the telegram and Editha’s death. 22 RCPI’s stand fails. It bears noting that its liability is anchored on culpa contractual or breach of contract with regard to Grace, and on tort with regard to her co-plaintiffs-herein-co-respondents. Article 1170 of the Civil Code provides: Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. (Underscoring supplied) Passing on this codal provision, this Court explained: In culpa contractual x x x the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promissee that may include his "expectation interest," which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, or his "reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his "restitution interest," which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed,

agreements can accomplish little, either for their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence x x x or of the attendance of fortuitous event, to excuse him from his ensuing liability.23 (Emphasis and underscoring supplied) In the case at bar, RCPI bound itself to deliver the telegram within the shortest possible time. It took 25 days, however, for RCPI to deliver it. RCPI invokes force majeure, specifically, the alleged radio noise and interferences which adversely affected the transmission and/or reception of the telegraphic message. Additionally, its messenger claimed he could not locate the address of Zenaida and it was only on the third attempt that he was able to deliver the telegram. For the defense of force majeure to prosper, x x x it is necessary that one has committed no negligence or misconduct that may have occasioned the loss. An act of God cannot be invoked to protect a person who has failed to take steps to forestall the possible adverse consequences of such a loss. One’s negligence may have concurred with an act of God in producing damage and injury to another; nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous event would not exempt one from liability. When the effect is found to be partly the result of a person’s participation – whether by active intervention, neglect or failure to act – the whole occurrence is humanized and removed from the rules applicable to acts of God. xxxx Article 1174 of the Civil Code states that no person shall be responsible for a fortuitous event that could not be foreseen or, though foreseen, was inevitable. In other words, there must be an exclusion of human intervention from the cause of injury or loss.24 (Emphasis and underscoring supplied) Assuming arguendo that fortuitous circumstances prevented RCPI from delivering the telegram at the soonest possible time, it should have at least informed Grace of the non-transmission and the nondelivery so that she could have taken steps to remedy the situation. But it did not. There lies the fault or negligence. In an earlier case also involving RCPI, this Court held:

Considering the public utility of RCPI’s business and its contractual obligation to transmit messages, it should exercise due diligence to ascertain that messages are delivered to the persons at the given address and should provide a system whereby in cases of undelivered messages the sender is given notice of non-delivery. Messages sent by cable or wireless means are usually more important and urgent than those which can wait for the mail.25 xxxx People depend on telecommunications companies in times of deep emotional stress or pressing financial needs. Knowing that messages about the illnesses or deaths of loved ones, births or marriages in a family, important business transactions, and notices of conferences or meetings as in this case, are coursed through the petitioner 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 effort to inform senders of the non-delivery of messages should be undertaken.26 (Emphasis and underscoring supplied) RCPI argues, however, against the presence of urgency in the delivery of the telegram, as well as the basis for the award of moral damages, thus:27 The request to send check as written in the telegraphic text negates the existence of urgency that private respondents’ allegations that ‘time was of the essence’ imports. A check drawn against a Manila Bank and transmitted to Sorsogon, Sorsogon will have to be deposited in a bank in Sorsogon and pass thru a minimum clearing period of 5 days before it may be encashed or withdrawn. If the transmittal of the requested check to Sorsogon took 1 day – private respondents could therefore still wait for 6 days before the same may be withdrawn. Requesting a check that would take 6 days before it could be withdrawn therefore contradicts plaintiff’s claim of urgency or need.28 At any rate, any sense of urgency of the situation was met when Grace Verchez was able to communicate to Manila via a letter that she sent to the same addressee in Manila thru JRS.29 xxxx As far as the respondent court’s award for moral damages is concerned, the same has no basis whatsoever since private respondent Alfonso Verchez did not accompany his late wife when the latter went to Manila by bus. He stayed behind in Sorsogon for almost 1 week before he proceeded to Manila. 30

When pressed on cross-examination, private respondent Alfonso Verchez could not give any plausible reason as to the reason why he did not accompany his ailing wife to Manila. 31 xxxx It is also important to consider in resolving private respondents’ claim for moral damages that private respondent Grace Verchez did not accompany her ailing mother to Manila.32 xxxx It is the common reaction of a husband to be at his ailing wife’s side as much as possible. The fact that private respondent Alfonso Verchez stayed behind in Sorsogon for almost 1 week convincingly demonstrates that he himself knew that his wife was not in critical condition.33 (Emphasis and underscoring supplied) RCPI’s arguments fail. For it is its breach of contract upon which its liability is, it bears repeating, anchored. Since RCPI breached its contract, the presumption is that it was at fault or negligent. It, however, failed to rebut this presumption. For breach of contract then, RCPI is liable to Grace for damages. And for quasi-delict, RCPI is liable to Grace’s corespondents following Article 2176 of the Civil Code which provides: Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. (Underscoring supplied) RCPI’s liability as an employer could of course be avoided if it could prove that it observed the diligence of a good father of a family to prevent damage. Article 2180 of the Civil Code so provides: The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible. xxxx The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

again failed, it, again, waited for another 12 days before making a third attempt. Such nonchalance in performing its urgent obligation indicates gross negligence amounting to bad faith. The fourth requisite is thus also present.

xxxx The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. (Underscoring supplied) RCPI failed, however, to prove that it observed all the diligence of a good father of a family to prevent damage. Respecting the assailed award of moral damages, a determination of the presence of the following requisites to justify the award is in order: x x x firstly, evidence of besmirched reputation or physical, mental or psychological suffering sustained by the claimant; secondly, a culpable act or omission factually established; thirdly, proof that the wrongful act or omission of the defendant is the proximate cause of damages sustained by the claimant; and fourthly, that the case is predicated on any of the instances expressed or envisioned by Article 2219 and Article 2220 of the Civil Code.34 Respecting the first requisite, evidence of suffering by the plaintiffs-herein respondents was correctly appreciated by the CA in this wise: The failure of RCPI to deliver the telegram containing the message of appellees on time, disturbed their filial tranquillity. Family members blamed each other for failing to respond swiftly to an emergency that involved the life of the late Mrs. Verchez, who suffered from diabetes.35 As reflected in the foregoing discussions, the second and third requisites are present. On the fourth requisite, Article 2220 of the Civil Code provides: Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. (Emphasis and underscoring supplied) After RCPI’s first attempt to deliver the telegram failed, it did not inform Grace of the non-delivery thereof and waited for 12 days before trying to deliver it again, knowing – as it should know – that time is of the essence in the delivery of telegrams. When its second long-delayed attempt to deliver the telegram

In applying the above-quoted Article 2220, this Court has awarded moral damages in cases of breach of contract where the defendant was guilty of gross negligence amounting to bad faith, or in wanton disregard of his contractual obligation.36 As for RCPI’s tort-based liability, Article 2219 of the Civil Code provides: Moral damages may be recovered in the following and analogous cases: xxxx (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. (Emphasis supplied) Article 26 of the Civil Code, in turn, provides: Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a cause of action for damages, prevention, and other relief: xxxx (2) Meddling with or disturbing the private life or family relations of another. (Emphasis supplied) RCPI’s negligence in not promptly performing its obligation undoubtedly disturbed the peace of mind not only of Grace but also her co-respondents. As observed by the appellate court, it disrupted the "filial tranquillity" among them as they blamed each other "for failing to respond swiftly to an emergency." The tortious acts and/or omissions complained of in this case are, therefore, analogous to acts mentioned under Article 26 of the Civil Code, which are among the instances of quasi-delict when courts may award moral damages under Article 2219 of the Civil Code. In fine, the award to the plaintiffs-herein respondents of moral damages is in order, as is the award of attorney’s fees, respondents having been compelled to litigate to protect their rights. Clutching at straws, RCPI insists that the limited liability clause in the "Telegram Transmission Form" is not a contract of adhesion. Thus it argues: Neither can the Telegram Transmission Form be considered a contract of adhesion as held by the respondent court. The said stipulations were

all written in bold letters right in front of the Telegram Transmission Form. As a matter of fact they were beside the space where the telegram senders write their telegraphic messages. It would have been different if the stipulations were written at the back for surely there is no way the sender will easily notice them. The fact that the stipulations were located in a particular space where they can easily be seen, is sufficient notice to any sender (like Grace VerchezInfante) where she could manifest her disapproval, leave the RCPI station and avail of the services of the other telegram operators.37 (Underscoring supplied)

CHICO-NAZARIO, J.:

RCPI misunderstands the nature of a contract of adhesion. Neither the readability of the stipulations nor their physical location in the contract determines whether it is one of adhesion.

The vehicles involved in this case are: (1) Philippine Rabbit Bus No. 353 with plate number CVD-478, owned by petitioner PRBLI and driven by petitioner Mauricio Manliclic; and (2) owner-type jeep with plate number PER-290, owned by respondent Modesto Calaunan and driven by Marcelo Mendoza.

A contract of adhesion is defined as one in which one of the parties imposes a ready-made form of contract, which the other party may accept or reject, but which the latter cannot modify. One party prepares the stipulation in the contract, while the other party merely affixes his signature or his "adhesion" thereto, giving no room for negotiation and depriving the latter of the opportunity to bargain on equal footing.38 (Emphasis and underscoring supplied) While a contract of adhesion is not necessarily void and unenforceable, since it is construed strictly against the party who drafted it or gave rise to any ambiguity therein, it is stricken down as void and unenforceable or subversive of public policy when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing.39 This Court holds that the Court of Appeals’ finding that the parties’ contract is one of adhesion which is void is, given the facts and circumstances of the case, thus well-taken. WHEREFORE, the petition is DENIED, and the challenged decision of the Court of Appeals is AFFIRMED. Costs against petitioner. SO ORDERED. G.R. No. 150157

January 25, 2007

MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES, INC., Petitioners, vs. MODESTO CALAUNAN, Respondent. DECISION

Assailed before Us is the decision 1 of the Court of Appeals in CA-G.R. CV No. 55909 which affirmed in toto the decision2 of the Regional Trial Court (RTC) of Dagupan City, Branch 42, in Civil Case No. D-10086, finding petitioners Mauricio Manliclic and Philippine Rabbit Bus Lines, Inc. (PRBLI) solidarily liable to pay damages and attorney’s fees to respondent Modesto Calaunan. The factual antecedents are as follows:

At around 6:00 to 7:00 o’clock in the morning of 12 July 1988, respondent Calaunan, together with Marcelo Mendoza, was on his way to Manila from Pangasinan on board his owner-type jeep. The Philippine Rabbit Bus was likewise bound for Manila from Concepcion, Tarlac. At approximately Kilometer 40 of the North Luzon Expressway in Barangay Lalangan, Plaridel, Bulacan, the two vehicles collided. The front right side of the Philippine Rabbit Bus hit the rear left side of the jeep causing the latter to move to the shoulder on the right and then fall on a ditch with water resulting to further extensive damage. The bus veered to the left and stopped 7 to 8 meters from point of collision. Respondent suffered minor injuries while his driver was unhurt. He was first brought for treatment to the Manila Central University Hospital in Kalookan City by Oscar Buan, the conductor of the Philippine Rabbit Bus, and was later transferred to the Veterans Memorial Medical Center. By reason of such collision, a criminal case was filed before the RTC of Malolos, Bulacan, charging petitioner Manliclic with Reckless Imprudence Resulting in Damage to Property with Physical Injuries, docketed as Crim. Case No. 684-M-89. Subsequently on 2 December 1991, respondent filed a complaint for damages against petitioners Manliclic and PRBLI before the RTC of Dagupan City, docketed as Civil Case No. D-10086. The criminal case was tried ahead of the civil case. Among those who testified in the criminal case were respondent Calaunan, Marcelo Mendoza and Fernando Ramos. In the civil case (now before this Court), the parties admitted the following: 1. The parties agreed on the capacity of the parties to sue and be sued as well as the venue and the identities of the vehicles involved;

2. The identity of the drivers and the fact that they are duly licensed; 3. The date and place of the vehicular collision; 4. The extent of the injuries suffered by plaintiff Modesto Calaunan and the existence of the medical certificate; 5. That both vehicles were going towards the south; the private jeep being ahead of the bus; 6. That the weather was fair and the road was well paved and straight, although there was a ditch on the right side where the jeep fell into. 3 When the civil case was heard, counsel for respondent prayed that the transcripts of stenographic notes (TSNs)4 of the testimonies of respondent Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case be received in evidence in the civil case in as much as these witnesses are not available to testify in the civil case. Francisco Tuliao testified that his brother-in-law, respondent Calaunan, left for abroad sometime in November, 1989 and has not returned since then. Rogelio Ramos took the stand and said that his brother, Fernando Ramos, left for Amman, Jordan, to work. Rosalia Mendoza testified that her husband, Marcelo Mendoza, left their residence to look for a job. She narrated that she thought her husband went to his hometown in Panique, Tarlac, when he did not return after one month. She went to her husband’s hometown to look for him but she was informed that he did not go there. 1awphil.net

The trial court subpoenaed the Clerk of Court of Branch 8, RTC, Malolos, Bulacan, the court where Criminal Case No. 684-M-89 was tried, to bring the TSNs of the testimonies of respondent Calaunan,5 Marcelo Mendoza6 and Fernando Ramos7 in said case, together with other documentary evidence marked therein. Instead of the Branch Clerk of Court, it was Enrique Santos Guevara, Court Interpreter, who appeared before the court and identified the TSNs of the three afore-named witnesses and other pertinent documents he had brought.8 Counsel for respondent wanted to mark other TSNs and documents from the said criminal case to be adopted in the instant case, but since the same were not brought to the trial court, counsel for petitioners compromised that said TSNs and documents could be offered by counsel for respondent as rebuttal evidence. For the defendants, petitioner Manliclic and bus conductor Oscar Buan testified. The TSN9 of the testimony of Donato Ganiban, investigator of the PRBLI, in Criminal Case No. 684-M-89 was marked and allowed to be adopted in the civil case on the ground that he was already dead.

Respondent further marked, among other documents, as rebuttal evidence, the TSNs10 of the testimonies of Donato Ganiban, Oscar Buan and petitioner Manliclic in Criminal Case No. 684-M-89. The disagreement arises from the question: Who is to be held liable for the collision? Respondent insists it was petitioner Manliclic who should be liable while the latter is resolute in saying it was the former who caused the smash up. The versions of the parties are summarized by the trial court as follows: The parties differed only on the manner the collision between the two (2) vehicles took place. According to the plaintiff and his driver, the jeep was cruising at the speed of 60 to 70 kilometers per hour on the slow lane of the expressway when the Philippine Rabbit Bus overtook the jeep and in the process of overtaking the jeep, the Philippine Rabbit Bus hit the rear of the jeep on the left side. At the time the Philippine Rabbit Bus hit the jeep, it was about to overtake the jeep. In other words, the Philippine Rabbit Bus was still at the back of the jeep when the jeep was hit. Fernando Ramos corroborated the testimony of the plaintiff and Marcelo Mendoza. He said that he was on another jeep following the Philippine Rabbit Bus and the jeep of plaintiff when the incident took place. He said, the jeep of the plaintiff overtook them and the said jeep of the plaintiff was followed by the Philippine Rabbit Bus which was running very fast. The bus also overtook the jeep in which he was riding. After that, he heard a loud sound. He saw the jeep of the plaintiff swerved to the right on a grassy portion of the road. The Philippine Rabbit Bus stopped and they overtook the Philippine Rabbit Bus so that it could not moved (sic), meaning they stopped in front of the Philippine Rabbit Bus. He testified that the jeep of plaintiff swerved to the right because it was bumped by the Philippine Rabbit bus from behind. Both Mauricio Manliclic and his driver, Oscar Buan admitted that the Philippine Rabbit Bus bumped the jeep in question. However, they explained that when the Philippine Rabbit bus was about to go to the left lane to overtake the jeep, the latter jeep swerved to the left because it was to overtake another jeep in front of it. Such was their testimony before the RTC in Malolos in the criminal case and before this Court in the instant case. [Thus, which of the two versions of the manner how the collision took place was correct, would be determinative of who between the two drivers was negligent in the operation of their respective vehicles.]11 Petitioner PRBLI maintained that it observed and exercised the diligence of a good father of a family in the selection and supervision of its employee, specifically petitioner Manliclic.

On 22 July 1996, the trial court rendered its decision in favor of respondent Calaunan and against petitioners Manliclic and PRBLI. The dispositive portion of its decision reads: WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants ordering the said defendants to pay plaintiff jointly and solidarily the amount of P40,838.00 as actual damages for the towing as well as the repair and the materials used for the repair of the jeep in question; P100,000.00 as moral damages and another P100,000.00 as exemplary damages and P15,000.00 as attorney’s fees, including appearance fees of the lawyer. In addition, the defendants are also to pay costs.12 Petitioners appealed the decision via Notice of Appeal to the Court of Appeals.13 In a decision dated 28 September 2001, the Court of Appeals, finding no reversible error in the decision of the trial court, affirmed it in all respects.14 Petitioners are now before us by way of petition for review assailing the decision of the Court of Appeals. They assign as errors the following: I THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT’S QUESTIONABLE ADMISSION IN EVIDENCE OF THE TSN’s AND OTHER DOCUMENTS PRESENTED IN THE CRIMINAL CASE. II THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT’S RELIANCE ON THE VERSION OF THE RESPONDENT ON HOW THE ACCIDENT SUPPOSEDLY OCCURRED. III THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT’S UNFAIR DISREGARD OF HEREIN PETITIONER PRBL’s DEFENSE OF EXERCISE OF DUE DILIGENCE IN THE SELECTION AND SUPERVISION OF ITS EMPLOYEES. IV

THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN AFFIRMING THE TRIAL COURT’S QUESTIONABLE AWARD OF DAMAGES AND ATTORNEY’S FEE. With the passing away of respondent Calaunan during the pendency of this appeal with this Court, we granted the Motion for the Substitution of Respondent filed by his wife, Mrs. Precila Zarate Vda. De Calaunan, and children, Virgilio Calaunan, Carmelita Honeycomb, Evelyn Calaunan, Marko Calaunan and Liwayway Calaunan.15 In their Reply to respondent’s Comment, petitioners informed this Court of a Decision 16 of the Court of Appeals acquitting petitioner Manliclic of the charge17 of Reckless Imprudence Resulting in Damage to Property with Physical Injuries attaching thereto a photocopy thereof. On the first assigned error, petitioners argue that the TSNs containing the testimonies of respondent Calaunan,18Marcelo Mendoza19 and Fernando 20 Ramos should not be admitted in evidence for failure of respondent to comply with the requisites of Section 47, Rule 130 of the Rules of Court. For Section 47, Rule 13021 to apply, the following requisites must be satisfied: (a) the witness is dead or unable to testify; (b) his testimony or deposition was given in a former case or proceeding, judicial or administrative, between the same parties or those representing the same interests; (c) the former case involved the same subject as that in the present case, although on different causes of action; (d) the issue testified to by the witness in the former trial is the same issue involved in the present case; and (e) the adverse party had an opportunity to cross-examine the witness in the former case.22 Admittedly, respondent failed to show the concurrence of all the requisites set forth by the Rules for a testimony given in a former case or proceeding to be admissible as an exception to the hearsay rule. Petitioner PRBLI, not being a party in Criminal Case No. 684-M-89, had no opportunity to cross-examine the three witnesses in said case. The criminal case was filed exclusively against petitioner Manliclic, petitioner PRBLI’s employee. The cases dealing with the subsidiary liability of employers uniformly declare that, strictly speaking, they are not parties to the criminal cases instituted against their employees.23 Notwithstanding the fact that petitioner PRBLI was not a party in said criminal case, the testimonies of the three witnesses are still admissible on the ground that petitioner PRBLI failed to object on their admissibility. It is elementary that an objection shall be made at the time when an alleged inadmissible document is

offered in evidence; otherwise, the objection shall be treated as waived, since the right to object is merely a privilege which the party may waive. Thus, a failure to except to the evidence because it does not conform to the statute is a waiver of the provisions of the law. Even assuming ex gratia argumenti that these documents are inadmissible for being hearsay, but on account of failure to object thereto, the same may be admitted and considered as sufficient to prove the facts therein asserted.24 Hearsay evidence alone may be insufficient to establish a fact in a suit but, when no objection is made thereto, it is, like any other evidence, to be considered and given the importance it deserves.25 In the case at bar, petitioner PRBLI did not object to the TSNs containing the testimonies of respondent Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case when the same were offered in evidence in the trial court. In fact, the TSNs of the testimonies of Calaunan and Mendoza were admitted by both petitioners.26 Moreover, petitioner PRBLI even offered in evidence the TSN containing the testimony of Donato Ganiban in the criminal case. If petitioner PRBLI argues that the TSNs of the testimonies of plaintiff’s witnesses in the criminal case should not be admitted in the instant case, why then did it offer the TSN of the testimony of Ganiban which was given in the criminal case? It appears that petitioner PRBLI wants to have its cake and eat it too. It cannot argue that the TSNs of the testimonies of the witnesses of the adverse party in the criminal case should not be admitted and at the same time insist that the TSN of the testimony of the witness for the accused be admitted in its favor. To disallow admission in evidence of the TSNs of the testimonies of Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case and to admit the TSN of the testimony of Ganiban would be unfair. We do not subscribe to petitioner PRBLI’s argument that it will be denied due process when the TSNs of the testimonies of Calaunan, Marcelo Mendoza and Fernando Ramos in the criminal case are to be admitted in the civil case. It is too late for petitioner PRBLI to raise denial of due process in relation to Section 47, Rule 130 of the Rules of Court, as a ground for objecting to the admissibility of the TSNs. For failure to object at the proper time, it waived its right to object that the TSNs did not comply with Section 47. In Mangio v. Court of Appeals,27 this Court, through Associate Justice Reynato S. Puno, 28 admitted in evidence a TSN of the testimony of a witness in another case despite therein petitioner’s assertion that he would be denied due process. In admitting the TSN, the Court ruled that the raising of denial of due process in relation to Section 47, Rule 130 of the Rules of Court, as a ground for objecting to the admissibility of the TSN was belatedly done. In so doing, therein petitioner waived his right to object based on said ground.

Petitioners contend that the documents in the criminal case should not have been admitted in the instant civil case because Section 47 of Rule 130 refers only to "testimony or deposition." We find such contention to be untenable. Though said section speaks only of testimony and deposition, it does not mean that documents from a former case or proceeding cannot be admitted. Said documents can be admitted they being part of the testimonies of witnesses that have been admitted. Accordingly, they shall be given the same weight as that to which the testimony may be entitled.29 On the second assigned error, petitioners contend that the version of petitioner Manliclic as to how the accident occurred is more credible than respondent’s version. They anchor their contention on the fact that petitioner Manliclic was acquitted by the Court of Appeals of the charge of Reckless Imprudence Resulting in Damage to Property with Physical Injuries. To be resolved by the Court is the effect of petitioner Manliclic’s acquittal in the civil case. From the complaint, it can be gathered that the civil case for damages was one arising from, or based on, quasi-delict.30 Petitioner Manliclic was sued for his negligence or reckless imprudence in causing the collision, while petitioner PRBLI was sued for its failure to exercise the diligence of a good father in the selection and supervision of its employees, particularly petitioner Manliclic. The allegations read: "4. That sometime on July 12, 1988 at around 6:20 A.M. plaintiff was on board the above-described motor vehicle travelling at a moderate speed along the North Luzon Expressway heading South towards Manila together with MARCELO MENDOZA, who was then driving the same; "5. That approximately at kilometer 40 of the North Luzon Express Way, the above-described motor vehicle was suddenly bumped from behind by a Philippine Rabbit Bus with Body No. 353 and with plate No. CVD 478 then being driven by one Mauricio Manliclic of San Jose, Concepcion, Tarlac, who was then travelling recklessly at a very fast speed and had apparently lost control of his vehicle; "6. That as a result of the impact of the collision the above-described motor vehicle was forced off the North Luzon Express Way towards the rightside where it fell on its driver’s side on a ditch, and that as a consequence, the above-described motor vehicle which maybe valued at EIGHTY THOUSAND PESOS (P80,000) was rendered a total wreck as shown by pictures to be presented during the pre-trial and trial of this case; "7. That also as a result of said incident, plaintiff sustained bodily injuries which compounded plaintiff’s

frail physical condition and required his hospitalization from July 12, 1988 up to and until July 22, 1988, copy of the medical certificate is hereto attached as Annex "A" and made an integral part hereof; "8. That the vehicular collision resulting in the total wreckage of the above-described motor vehicle as well as bodily (sic) sustained by plaintiff, was solely due to the reckless imprudence of the defendant driver Mauricio Manliclic who drove his Philippine Rabbit Bus No. 353 at a fast speed without due regard or observance of existing traffic rules and regulations; "9. That defendant Philippine Rabbit Bus Line Corporation failed to exercise the diligence of a good father of (sic) family in the selection and supervision of its drivers; x x x"31 Can Manliclic still be held liable for the collision and be found negligent notwithstanding the declaration of the Court of Appeals that there was an absence of negligence on his part? In exonerating petitioner Manliclic in the criminal case, the Court of Appeals said: To the following findings of the court a quo, to wit: that accused-appellant was negligent "when the bus he was driving bumped the jeep from behind"; that "the proximate cause of the accident was his having driven the bus at a great speed while closely following the jeep"; x x x We do not agree. The swerving of Calaunan’s jeep when it tried to overtake the vehicle in front of it was beyond the control of accused-appellant. xxxx Absent evidence of negligence, therefore, accusedappellant cannot be held liable for Reckless Imprudence Resulting in Damage to Property with Physical Injuries as defined in Article 365 of the Revised Penal Code.32 From the foregoing declaration of the Court of Appeals, it appears that petitioner Manliclic was acquitted not on reasonable doubt, but on the ground that he is not the author of the act complained of which is based on Section 2(b) of Rule 111 of the Rules of Criminal Procedure which reads: (b) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist.

In spite of said ruling, petitioner Manliclic can still be held liable for the mishap. The afore-quoted section applies only to a civil action arising from crime or ex delicto and not to a civil action arising from quasidelict or culpa aquiliana. The extinction of civil liability referred to in Par. (e) of Section 3, Rule 111 [now Section 2 (b) of Rule 111], refers exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas the civil liability for the same act considered as a quasi-delict only and not as a crime is not extinguished even by a declaration in the criminal case that the criminal act charged has not happened or has not been committed by the accused.33 A quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code with a substantivity all its own, and individuality that is entirely apart and independent from a delict or crime – a distinction exists between the civil liability arising from a crime and the responsibility for quasi-delicts or culpa extracontractual. The same negligence causing damages may produce civil liability arising from a crime under the Penal Code, or create an action for quasi-delicts or culpa extra-contractual under the Civil Code. 34 It is now settled that acquittal of the accused, even if based on a finding that he is not guilty, does not carry with it the extinction of the civil liability based on quasi delict.35 In other words, if an accused is acquitted based on reasonable doubt on his guilt, his civil liability arising from the crime may be proved by preponderance of evidence only. However, if an accused is acquitted on the basis that he was not the author of the act or omission complained of (or that there is declaration in a final judgment that the fact from which the civil might arise did not exist), said acquittal closes the door to civil liability based on the crime or ex delicto. In this second instance, there being no crime or delict to speak of, civil liability based thereon or ex delicto is not possible. In this case, a civil action, if any, may be instituted on grounds other than the delict complained of. As regards civil liability arising from quasi-delict or culpa aquiliana, same will not be extinguished by an acquittal, whether it be on ground of reasonable doubt or that accused was not the author of the act or omission complained of (or that there is declaration in a final judgment that the fact from which the civil liability might arise did not exist). The responsibility arising from fault or negligence in a quasi-delict is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. 36 An acquittal or conviction in the criminal case is entirely irrelevant in the civil case 37 based on quasi-delict or culpa aquiliana. Petitioners ask us to give credence to their version of how the collision occurred and to disregard that of respondent’s. Petitioners insist that while the PRBLI bus was in the process of overtaking respondent’s

jeep, the latter, without warning, suddenly swerved to the left (fast) lane in order to overtake another jeep ahead of it, thus causing the collision. As a general rule, questions of fact may not be raised in a petition for review. The factual findings of the trial court, especially when affirmed by the appellate court, are binding and conclusive on the Supreme Court.38 Not being a trier of facts, this Court will not allow a review thereof unless: (1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals went beyond the issues of the case and its findings are contrary to the admissions of both appellant and appellees; (7) the findings of fact of the Court of Appeals are contrary to those of the trial court; (8) said findings of fact are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and (10) the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.39 After going over the evidence on record, we do not find any of the exceptions that would warrant our departure from the general rule. We fully agree in the finding of the trial court, as affirmed by the Court of Appeals, that it was petitioner Manliclic who was negligent in driving the PRBLI bus which was the cause of the collision. In giving credence to the version of the respondent, the trial court has this say: x x x Thus, which of the two versions of the manner how the collision took place was correct, would be determinative of who between the two drivers was negligent in the operation of their respective vehicle. In this regard, it should be noted that in the statement of Mauricio Manliclic (Exh. 15) given to the Philippine Rabbit Investigator CV Cabading no mention was made by him about the fact that the driver of the jeep was overtaking another jeep when the collision took place. The allegation that another jeep was being overtaken by the jeep of Calaunan was testified to by him only in Crim. Case No. 684-M-89 before the Regional Trial Court in Malolos, Bulacan and before this Court. Evidently, it was a product of an afterthought on the part of Mauricio Manliclic so that he could explain why he should not be held responsible for the incident. His attempt to veer away from the truth was also apparent when it would be considered that in his statement given to the Philippine Rabbit Investigator CV Cabading (Exh. 15), he alleged that the Philippine Rabbit Bus bumped the jeep of Calaunan while the Philippine Rabbit Bus was behind the said jeep. In his testimony before the

Regional Trial Court in Malolos, Bulacan as well as in this Court, he alleged that the Philippine Rabbit Bus was already on the left side of the jeep when the collision took place. For this inconsistency between his statement and testimony, his explanation regarding the manner of how the collision between the jeep and the bus took place should be taken with caution. It might be true that in the statement of Oscar Buan given to the Philippine Rabbit Investigator CV Cabading, it was mentioned by the former that the jeep of plaintiff was in the act of overtaking another jeep when the collision between the latter jeep and the Philippine Rabbit Bus took place. But the fact, however, that his statement was given on July 15, 1988, one day after Mauricio Manliclic gave his statement should not escape attention. The one-day difference between the giving of the two statements would be significant enough to entertain the possibility of Oscar Buan having received legal advise before giving his statement. Apart from that, as between his statement and the statement of Manliclic himself, the statement of the latter should prevail. Besides, in his Affidavit of March 10, 1989, (Exh. 14), the unreliability of the statement of Oscar Buan (Exh. 13) given to CV Cabading rear its "ugly head" when he did not mention in said affidavit that the jeep of Calaunan was trying to overtake another jeep when the collision between the jeep in question and the Philippine Rabbit bus took place. xxxx If one would believe the testimony of the defendant, Mauricio Manliclic, and his conductor, Oscar Buan, that the Philippine Rabbit Bus was already somewhat parallel to the jeep when the collision took place, the point of collision on the jeep should have been somewhat on the left side thereof rather than on its rear. Furthermore, the jeep should have fallen on the road itself rather than having been forced off the road. Useless, likewise to emphasize that the Philippine Rabbit was running very fast as testified to by Ramos which was not controverted by the defendants.40 Having ruled that it was petitioner Manliclic’s negligence that caused the smash up, there arises the juris tantum presumption that the employer is negligent, rebuttable only by proof of observance of the diligence of a good father of a family. 41 Under Article 218042 of the New Civil Code, when an injury is caused by the negligence of the employee, there instantly arises a presumption of law that there was negligence on the part of the master or employer either in the selection of the servant or employee, or in supervision over him after selection or both. The liability of the employer under Article 2180 is direct and immediate; it is not conditioned upon prior recourse against the negligent employee and a prior showing of the insolvency of such employee. Therefore, it is incumbent upon the private respondents to prove that they exercised the diligence of a good father of a family in the selection and supervision of their employee. 43

In the case at bar, petitioner PRBLI maintains that it had shown that it exercised the required diligence in the selection and supervision of its employees, particularly petitioner Manliclic. In the matter of selection, it showed the screening process that petitioner Manliclic underwent before he became a regular driver. As to the exercise of due diligence in the supervision of its employees, it argues that presence of ready investigators (Ganiban and Cabading) is sufficient proof that it exercised the required due diligence in the supervision of its employees. In the selection of prospective employees, employers are required to examine them as to their qualifications, experience and service records. In the supervision of employees, the employer must formulate standard operating procedures, monitor their implementation and impose disciplinary measures for the breach thereof. To fend off vicarious liability, employers must submit concrete proof, including documentary evidence, that they complied with everything that was incumbent on them. 44 In Metro Manila Transit Corporation v. Court of Appeals,45 it was explained that: Due diligence in the supervision of employees on the other hand, includes the formulation of suitable rules and regulations for the guidance of employees and the issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations through his or its employees and the imposition of necessary disciplinary measures upon employees in case of breach or as may be warranted to ensure the performance of acts indispensable to the business of and beneficial to their employer. To this, we add that actual implementation and monitoring of consistent compliance with said rules should be the constant concern of the employer, acting through dependable supervisors who should regularly report on their supervisory functions. In order that the defense of due diligence in the selection and supervision of employees may be deemed sufficient and plausible, it is not enough to emptily invoke the existence of said company guidelines and policies on hiring and supervision. As the negligence of the employee gives rise to the presumption of negligence on the part of the employer, the latter has the burden of proving that it has been diligent not only in the selection of employees but also in the actual supervision of their work. The mere allegation of the existence of hiring procedures and supervisory policies, without anything more, is decidedly not sufficient to overcome such presumption. We emphatically reiterate our holding, as a warning to all employers, that "the formulation of various company policies on safety without showing that they

were being complied with is not sufficient to exempt petitioner from liability arising from negligence of its employees. It is incumbent upon petitioner to show that in recruiting and employing the erring driver the recruitment procedures and company policies on efficiency and safety were followed." x x x. The trial court found that petitioner PRBLI exercised the diligence of a good father of a family in the selection but not in the supervision of its employees. It expounded as follows: From the evidence of the defendants, it seems that the Philippine Rabbit Bus Lines has a very good procedure of recruiting its driver as well as in the maintenance of its vehicles. There is no evidence though that it is as good in the supervision of its personnel. There has been no iota of evidence introduced by it that there are rules promulgated by the bus company regarding the safe operation of its vehicle and in the way its driver should manage and operate the vehicles assigned to them. There is no showing that somebody in the bus company has been employed to oversee how its driver should behave while operating their vehicles without courting incidents similar to the herein case. In regard to supervision, it is not difficult to observe that the Philippine Rabbit Bus Lines, Inc. has been negligent as an employer and it should be made responsible for the acts of its employees, particularly the driver involved in this case. We agree. The presence of ready investigators after the occurrence of the accident is not enough to exempt petitioner PRBLI from liability arising from the negligence of petitioner Manliclic. Same does not comply with the guidelines set forth in the cases above-mentioned. The presence of the investigators after the accident is not enough supervision. Regular supervision of employees, that is, prior to any accident, should have been shown and established. This, petitioner failed to do. The lack of supervision can further be seen by the fact that there is only one set of manual containing the rules and regulations for all the drivers of PRBLI. 46 How then can all the drivers of petitioner PRBLI know and be continually informed of the rules and regulations when only one manual is being lent to all the drivers? For failure to adduce proof that it exercised the diligence of a good father of a family in the selection and supervision of its employees, petitioner PRBLI is held solidarily responsible for the damages caused by petitioner Manliclic’s negligence. We now go to the award of damages. The trial court correctly awarded the amount of P40,838.00 as actual damages representing the amount paid by respondent for the towing and repair of his jeep. 47 As regards the awards for moral and exemplary damages, same, under the circumstances, must be modified. The P100,000.00 awarded by the trial court

as moral damages must be reduced to P50,000.00.48 Exemplary damages are imposed by way of example or correction for the public good.49 The amount awarded by the trial court must, likewise, be lowered to P50,000.00.50 The award of P15,000.00 for attorney’s fees and expenses of litigation is in order and authorized by law.51 WHEREFORE, premises considered, the instant petition for review is DENIED. The decision of the Court of Appeals in CA-G.R. CV No. 55909 is AFFIRMED with the MODIFICATION that (1) the award of moral damages shall be reduced to P50,000.00; and (2) the award of exemplary damages shall be lowered to P50,000.00. Costs against petitioners.

REYES, R.T., J.: MAY a municipal mayor be held solidarily liable for the negligent acts of the driver assigned to him, which resulted in the death of a minor pedestrian?

SO ORDERED.

Challenged in this petition for review on certiorari is the Decision[1] of the Court of Appeals (CA) which reversed and set aside the decision of the Regional Trial Court (RTC), Polomolok, Cotabato City, Branch 39, insofar as defendant Mayor Fernando Q. Miguel is concerned. The CA hairpe absolved Mayor Miguel from any liability rson,since it was not he, but AUSTRIA-MARTINEZ, the Municipality of Koronadal, that was the RODRIGO APOSTOL, FIDEL CHICOemployer of the negligent driver. NAZARIO, SPS. BUENAVENTURA JAYME G.R. No. 163609 AND ROSARIO JAYME, Petitioners, Present: - versus - YNARES-SANTIAGO, J.,

LOZANO, ERNESTO SIMBULAN, NACHURA, and MAYOR FERNANDO Q. MIGUEL, REYES, JJ. MUNICIPALITY OF KORONADAL (NOW CITY OF KORONADAL), PROVINCE OF SOUTH COTABATO, represented by the MUNICIPAL TREASURER and/or MUNICIPAL MAYOR FERNANDO Q. MIGUEL, and THE FIRST INTEGRATED Promulgated: BONDING AND INSURANCE COMPANY, INC. , Respondents. November 27, 2008 x-------------------------------------------------x DECISION

The Facts On February 5, 1989, Mayor Miguel of Koronadal, South Cotabato was on board the Isuzu pick-up truck driven by Fidel Lozano, an employee of [2] the Municipalityof Koronadal. The pickup truck was registered under the name of Rodrigo Apostol, but it was then in the possession of Ernesto Simbulan.[3] Lozano borrowed the pick-up truck from Simbulan to bring Miguel to Buayan Airport at General Santos City to catch his Manila flight.[4] The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then crossing the National Highway in Poblacion,

Polomolok, South Cotabato.[5] The intensity of the collision sent Marvin some fifty (50) meters away from the point of impact, a clear indication that Lozano was driving at a very high speed at the time of the accident.[6] Marvin sustained severe head injuries with subdural hematoma and diffused cerebral contusion.[7] He was initially treated at the Howard Hubbard MemorialHospital. [8] Due to the seriousness of his injuries, he was airlifted to the Ricardo Limso Medical Center in Davao City for more intensive treatment.[9] Despite medical attention, Marvin expired six (6) days after the accident.[10] Petitioners spouses Buenaventura and Rosario Jayme, the parents of Marvin, filed a complaint for damages with [11] the RTC against respondents. In their complaint, they prayed that all respondents be held solidarily liable for their loss. They pointed out that that proximate cause of Marvins death was Lozanos negligent and reckless operation of the vehicle. They prayed for actual, moral, and exemplary damages, attorneys fees, and litigation expenses. In their respective Answers, all respondents denied liability for Marvins death. Apostol and Simbulan averred that Lozano took the pick-up truck without their consent. Likewise, Miguel and Lozano pointed out that Marvins sudden sprint across the highway made it impossible to avoid the accident. Yet, Miguel denied being on board the vehicle when it hit Marvin. The Municipality of Koronadal ado pted the answer of Lozano and Miguel. As for First Integrated Bonding and Insurance

Company, Inc., the vehicle insurer, it insisted that its liability is contributory and is only conditioned on the right of the insured. Since the insured did not file a claim within the prescribed period, any cause of action against it had prescribed. RTC Disposition On January 25, 1999, the RTC rendered judgment in favor of spouses Jayme, the dispositive portion of which reads: WHEREFORE, in view of the foregoing, the defendant Municipality of Koronadal cannot be held liable for the damages incurred by other defendant (sic) being an agency of the State performing a (sic) governmental functions. The same with defendant Hermogenes Simbulan, not being the owner of the subject vehicle, he is absolved of any liability. The complaint against defendant First Integrated Bonding Insurance Company, Inc. is hereby ordered dismissed there being no cause of action against said insurance company. However, defendants Fidel Lozano, Rodrigo Apostol, and Mayor Fernando Miguel of Koronadal, South Cotabato, are hereby ordered jointly and severally to pay the plaintiff (sic) the following sums: 1.

One Hundred Seven ty Three Thous and One

Hundred One and Forty Centavos (P173,101.40) Pesos as actual damages with legal interest of 12% per annum computed from February 11, 1989 until fully paid; 2. Fifty Thousand (P50,000.00) Pesos as moral damages; 3. Twenty Thousand (P20,000.00) Pesos as exemplary damages; 4. Twenty Thousand (P20,000.00) Pesos as Attorneys fees; 5. Fifty Thousand (P50,000.00) Pesos for the death of Marvin Jayme; 6. Three Thousand (P3,000.00) as litigation expenses; and 7. To pay the cost of this suit. SO ORDERED.[12]

Dissatisfied with the RTC ruling, Mayor Miguel interposed an appeal to the CA. CA Disposition

In his appeal, Mayor Miguel contended that the RTC erred in ruling that he was Lozanos employer and, hence, solidarily liable for the latters negligent act.Records showed that the Municipality of Koronadal was the drivers true and lawful employer. Mayor Miguel also denied that he did not exercise due care and diligence in the supervision of Lozano. The incident, although unfortunate, was unexpected and cannot be attributed to him. On October 22, 2003, the CA granted the appeal, disposing as follows:

WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE, insofar as defendant-appellant Mayor Fernando Q. Miguel is concerned, and the complaint against him is DISMISSED. IT IS SO ORDERED.[13]

The CA held that Mayor Miguel should not be held liable for damages for the death of Marvin Jayme. Said the appellate court: Moreover, plaintiffsappellees admitted that Mayor Miguel was not the employer of Lozano. Thus, paragraph 9 of the complaint alleged that the Municipality of Koronadal was the employer of both Mayor Miguel and Lozano. Not being the employer of Lozano, Mayor Miguel could not thus be held liable for the damages caused by the

former. Mayor Miguel was a mere passenger in the Isuzu pick-up at the time of the accident.[14] (Emphasis supplied)

The CA also reiterated the settled rule that it is the registered owner of a vehicle who is jointly and severally liable with the driver for damages incurred by passengers or third persons as a consequence of injuries or death sustained in the operation of the vehicle. Issues The spouses Jayme have resorted to the present recourse and assign to the CA the following errors: I. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT MAYOR FERNANDO MIGUEL CANNOT BE HELD LIABLE FOR THE DEATH OF MARVIN JAYME WHICH CONCLUSION IS CONTRARY TO LAW AND THE SETTLED PRONOUNCEMENTS OF THIS HONORABLE TRIBUNAL; II. THE FINDINGS OF FACTS OF THE HONORABLE COURT OF APPEALS ARE CONTRARY TO THE FINDINGS OF THE TRIAL COURT AND ARECONTRADI CTED BY THE EVIDENCE ON RECORD; MOREOVER, THE CONCLUSIONS DRAWN BY THE HONORABLE COURT OF

APPEALS ARE ALL BASED ON CONJECTURES AND SURMI SES AND AGAINST ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHICH URGENTLY CALL FOR AN EXERCISE OF THIS HONORABLE COURTS [15] SUPERVISION.

Our Ruling The doctrine of vicarious liability or imputed liability finds no application in the present case. Spouses Jayme contend, inter alia, that vicarious liability attaches to Mayor Miguel. He was not a mere passenger, but instead one who had direct control and supervision over Lozano during the time of the accident. According to petitioners, the element of direct control is not negated by the fact that Lozanos employer was the Municipality of Koronadal. Mayor Miguel, being Lozanos superior, still had control over the manner the vehicle was operated. Article 2180[16] of the Civil Code provides that a person is not only liable for ones own quasi-delictual acts, but also for those persons for whom one is responsible for. This liability is popularly known as vicarious or imputed liability. To sustain claims against employers for the acts of their employees, the following requisites must be established: (1) That the employee was chosen by the employer personally or through another; (2) That the service to be rendered in accordance with orders which the employer has the authority to give at all

times; and (3) That the illicit act of the employee was on the occasion or by reason of the functions entrusted to him.[17] Significantly, to make the employee liable under paragraphs 5 and 6 of Article 2180, it must be established that the injurious or tortuous act was committed at the time the employee was performing his functions.[18] Furthermore, the employer-employee relationship cannot be assumed. It is incumbent upon the plaintiff to prove the relationship by preponderant [19] evidence. In Belen v. Belen, this Court ruled that it was enough for defendant to deny an alleged employment relationship. The defendant is under no obligation to prove the negative averment. This Court said: It is an old and wellsettled rule of the courts that the burden of proving the action is upon the plaintiff, and that if he fails satisfactorily to show the facts upon which he bases his claim, the defendant is under no obligation to prove his exceptions. This rue is in harmony with the provisions of Section 297 of the Code of Civil Procedure holding that each party must prove his own affirmative allegations, etc.[20]

In resolving the present controversy, it is imperative to find out if Mayor Miguel is, indeed, the employer of Lozano and therefore liable for the negligent acts of the latter. To determine the existence of an employment relationship, We rely on the four-fold test. This involves: (1) the

employers power of selection; (2) payment of wages or other remuneration; (3) the employers right to control the method of doing the work; and (4) the employers right of suspension or dismissal.[21] Applying the foregoing test, the CA correctly held that it was the Municipality of Koronadal which was the lawful employer of Lozano at the time of the accident. It is uncontested that Lozano was employed as a driver by the municipality. That he was subsequently assigned to Mayor Miguel during the time of the accident is of no moment. This Court has, on several occasions, held that an employer-employee relationship still exists even if the employee was loaned by the employer to another person or entity because control over the employee subsists. [22] In the case under review, the Municipality of Koronadal remains to be Lozanos employer notwithstanding Lozanos assignment to Mayor Miguel. Spouses Jayme argued that Mayor Miguel had at least supervision and control over Lozano and how the latter operated or drove the Isuzu pick-up during the time of the accident. They, however, failed to buttress this claim. Even assuming arguendo that Mayor Miguel had authority to give instructions or directions to Lozano, he still can not be held liable. In Benson v. Sorrell,[23]the New England Supreme Court ruled that mere giving of directions to the driver does not establish that the passenger has control over the vehicle. Neither does it render one the employer of the driver. This Court,

in Soliman, Jr. v. Tuazon,[24] ruled in a similar vein, to wit: x x x The fact that a client company may give instructions or directions to the security guards assigned to it, does not, by itself, render the client responsible as an employerof the security guards concerned and liable for their wrongful acts and omissions. Those instructions or directions are ordinarily no more than requests commonly envisaged in the contract for services entered into with the security agency. x x x[25] (Emphasis supplied)

Significantly, no negligence may be imputed against a fellow employee although the person may have the right to control the manner of the vehicles operation.[26] In the absence of an employer-employee relationship establishing vicarious liability, the drivers negligence should not be attributed to a fellow employee who only happens to be an occupant of the vehicle. [27] Whatever right of control the occupant may have over the driver is not sufficient by itself to justify an application of the doctrine of vicarious liability. Handley v. [28] Lombardi is instructive on this exception to the rule on vicarious liability: Plaintiff was not the master or principal of the driver of the truck, but only an intermediate and superior employee or agent. This being so, the doctrine of respondeat superior or qui facit per alium is not properly applicable to him. His power to direct and control the driver was not as master, but only by virtue of the

fact that they were both employed by Kruse, and the further fact that as Kruses agent he was delegated Kruses authority over the driver. x x x In the case of actionable negligence, the rule is well settled both in this state and elsewhere that the negligence of a subordinate employee or subagent is not to be imputed to a superior employee or agent, but only to the master or principal. (Hilton v. Oliver, 204 Cal. 535 [61 A. L. R. 297, 269 Pac. 425]; Guild v. Brown, 115 Cal. App. 374 [1 Pac. (2d) 528]; Ellis v. Southern Ry. Co., 72 S. C. 464 [2 L. R. A. (N. S.) 378, 52 S. E. 228]; Thurman v. Pittsburg & M. Copper Co., 41 Mont. 141 [108 Pac. 588]; 2 Cor. Jur., p. 829; and see the elaborate note in 61 A. L. R. 277, and particularly that part commencing at p. 290.) We can see no logical reason for drawing any distinction in this regard between actionable negligence and contributory negligence. x x x[29]

The rule was reiterated in Bryant v. Pacific Elec. Ry. Co.[30] and again in Sichterman v. Hollingshead Co.[31] In Swanson v. McQuown,[32] a case involving a military officer who happened to be riding in a car driven by a subordinate later involved in an accident, the Colorado Supreme Court adhered to the general rule that a public official is not liable for the wrongful acts of his subordinates on a vicarious basis since the relationship is not a true master-servant situation.[33] The court went on to rule that the only exception is

when they cooperate in the act complained of, or direct or encourage it.[34] In the case at bar, Mayor Miguel was neither Lozanos employer nor the vehicles registered owner. There existed no causal relationship between him and Lozano or the vehicle used that will make him accountable for Marvins death. Mayor Miguel was a mere passenger at the time of the accident. Parenthetically, it has been held that the failure of a passenger to assist the driver, by providing him warnings or by serving as lookout does not make the passenger liable for the latters negligent acts.[35] The drivers duty is not one that may be delegated to others.[36] As correctly held by the trial court, the true and lawful employer of Lozano is the Municipality of Koronadal. Unfortunatel y for Spouses Jayme, the municipality may not be sued because it is an agency of the State engaged in governmental functions and, hence, immune from suit. This immunity is illustrated in Municipalityof San Fernando, [37] La Union v. Firme, where this Court held: It has already been remarked that municipal corporations are suable because their charters grant them the competence to sue and be sued. Nevertheless, they are generally not liable for torts committed by them in the discharge of governmental functions and can only be held answerable only if it can be shown that they were acting in proprietary capacity. In permitting such entities to be sued, the State merely gives the

claimant the right to show that the defendant was not acting in governmental capacity when the injury was committed or that the case comes under the exceptions recognized by law. Failing this, the claimant cannot recover.[38]

Verily, liability attaches to the registered owner, the negligent driver and his direct employer. The CA observation along this line are worth restating: Settled is the rule that the registered owner of a vehicle is jointly and severally liable with the driver for damage s incurred by passengers and third persons as a consequence of injuries or death sustained in the operation of said vehicles. Regardless of who the actual owner of the vehicle is, the operator of record continues to be the operator of the vehicle as regards the public and third persons, and as such is directly and primarily responsible for the consequences incident (sic) to its operation x x x.[39]

The accidental death of Marvin Jayme is a tragic loss for his parents. However, justice demands that only those liable under our laws be held accountable for Marvins demise. Justice can not sway in favor of petitioners simply to assuage their pain and loss. The law on the matter is clear: only the negligent driver, the drivers employer, and the registered owner of the vehicle are liable for the death of a third person resulting from the negligent operation of the vehicle. WHEREFORE, the is DENIED and the Decision AFFIRMED.

petition appealed

SO ORDERED. THE INSULAR ASSURANCE G.R. NO. 137884 COMPANY, LTD., Petitioner, Present:

LIFE

AUSTRIA-MARTINEZ, J., Acting Chairperson, - versus - TINGA,* CHICO-NAZARIO, NACHURA, and REYES, JJ. TOYOTA BEL-AIR, INC., Promulgated: Respondent. March 28, 2008 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - ---------------------x

DECISION

ordering the consignation of rentals. Being pure questions of law, direct resort to this Court is proper under Section 2(c), Rule 41 of the Rules of Court. The factual antecedents of the case are as follows: Toyota Bel-Air, Inc. (Toyota) entered into a Contract of Lease[3] over a 3,700-square meter lot and building owned by Insular Life Assurance Company, Ltd. (Insular Life) in Pasong Tamo Street, Makati City, for a five-year period, from April 16, 1992 to April 15, 1997. Upon expiration of the lease, Toyota remained in possession of the property. Despite repeated demands, Toyota refused to vacate the property. Thus, on January 28, 1998, Insular Life filed a Complaint[4] for unlawful detainer against Toyota in the MeTC.

AUSTRIA-MARTINEZ, J.: Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision[1] dated September 30, 1998 of the RegionalTrial Court (RTC), Branch 148, Makati City in Civil Case No. 98-2075 which nullified the Writ of Execution dated August 12, 1998 issued by the MetropolitanTrial Court (MeTC), Branch 63, Makati City in Civil Case No. 59089, and the RTC [2] Order dated March 5, 1999 denying the Motion for Reconsideration. The principal issue raised in the present petition pertains to the propriety of the decision of the RTC in declaring as void the writ of execution issued by the MeTCand in

On July 3, 1998, MeTC rendered a [5] Decision, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered in favor of [Insular Life] and against [Toyota]. The Court hereby orders [Toyota]: 1. and all persons claiming possession of the premises through [Toyota], to vacate the leased properties and return possession thereof to [Insular Life]; 2. to pay reasonable compensation at the rate of P585,640.00 a month until possession of the subject premises is surrendered to the [Insular Life].

3. to pay attorney's fees in the sum of P50,000.00; 4. to pay expenses of litigation in the amount of P20,000.00; 5. to pay the costs of the suit. SO ORDERED.[6] (Emphasis supplied).

On July 23, 1998, Insular Life filed a Motion for Execution[7] of the decision. Toyota, on the other hand, filed a Notice of Appeal[8] of the decision. Subsequently, Insular Life filed a Notice of Partial Appeal[9] of the decision insofar as the issue of monthly compensation was concerned. Both parties, however, later filed separate motions to withdraw their respective appeals.[10] On August 12, 1998, the MeTC issued an Order approving the withdrawal of notice of appeal of both parties. It also issued a Writ of Execution,[11] on the following premise: WHEREAS, in a certain action for EJECTMENT of the following described premises, to wit: a parcel of Land and Building located at Pasong Tamo, Makati City under TCT No. 64737 of the Registry of Deeds of Rizal, x x x judgment was rendered on the 3rd day of July,1998 that [Insular Life] and all persons claiming under him/her/them have restitution of the premises and also that he/she/they recover the sum of P585,640.00 a month from April 15, 1997 until possession of the subject premises is surrendered to plaintiff; to recover the sum

of P50,000.00 as and for attorney's fees; P20,000.00 as expenses of litigation and costs of suit.[12] x x x (Emphasis supplied) Subsequently, the Deputy Sheriff of the MeTC executed the writ by levying on Toyota's personal and real properties, and garnishing its bank accounts. He scheduled the auction of the levied properties on August 28, 1998.

On August 24, 1998, Toyota filed a Petition for Certiorari[13] with prayer for injunctive relief in the RTC. It charged the MeTC with grave abuse of discretion in issuing the Writ of Execution since the writ amended the dispositive portion of the decision it sought to execute by giving retroactive effect to the payment of reasonable compensation of P585,640.00 by the inclusion of the phrase from April 15, 1997. On August 27, 1998, the RTC issued a temporary restraining order (TRO) enjoining the auction sale of Toyota's levied properties.[14] On August 28, 1998, Insular Life filed with the MeTC a Motion to Clarify Decision Dated July 3, 1998[15] praying that the court issue an order clarifying the dispositive portion of the Decision dated July 3, 1998. On September 14, 1998, the MeTC issued an Order,[16] clarifying paragraph 2 of the dispositive portion of the Decision dated July 3, 1998 to read as: 2. to pay reasonable compensation in the amount of P585,640.00 as of April 15, 1997 until

possession of the subject premises is surrendered to plaintiff.[17] On September 25, 1998, Toyota filed with the RTC a Motion to Consignate P1,171,280.00 in favor of Insular Life and to submit the case for decision.[18] The amount of P1,171,280.00 represented the reasonable compensation for the months of July and August 1998. Five days later, or on September 30, 1998, the RTC rendered the herein assailed Decision,[19] holding that the MeTC acted with grave abuse of discretion in issuing the Writ of Execution dated August 12, 1998 by giving retroactive effect to the reasonable compensation judgment of P585,640.00 by inserting the date April 15, 1997 which was not provided for in the dispositive portion of the MeTC Decision; that the clarificatory order issued by the MeTC did not cure the ambiguity in the decision since it omitted the phrase a month as originally stated in the Decision; that considering the Writ of Execution is void, the levy effected by the Sheriff is also void; and that consignation of rentals is proper since Toyota has been in possession of the property since July 3, 1998. On October 13, 1998, Insular Life filed a Motion for Reconsideration[20] of the RTC Decision. On the same day, it filed with the MeTC a Second Motion to Clarify Decision Dated July 3, 1998.[21] On October 28, 1998, the MeTC issued its second clarificatory order to correct paragraph 2 of the dispositive portion of the

Decision dated July 3, 1998 to read as: 2. [t]o pay reasonable compensation at the rate of P585,640.00 a month as of April 15, 1997 until possession of the subject premises is surrendered to the plaintiff.[22] On March 5, 1999, the RTC issued an Order[23] denying Insular Life's motion for reconsideration. On April 19, 1999, Insular Life then filed herein Petition for Review [24] on Certiorari with this Court anchored on the following grounds: I THE RTC COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR IN EXCESS OF ITS JURISDICTION IN VOIDING THE WRIT OF EXECUTION ISSUED BY THE MTC. i.

THE WRIT OF EXECUTIO N IS IN HARMONY WITH THE INTENT, SPIRIT AND TERMS OF THE MTC'S DEC ISION DAT ED JULY 3, 1998. ii. THE WRIT OF EXECUTIO

N IS VALID AND ENFORCE ABLE. iii. THE RTC SANCTION ED TBA'S CRAFTY CIRCUMV ENTION OF THE RULES.

THE RTC COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR IN EXCESS OF ITS JURISDICTION IN NOT DISMISSING THE CERTIORARI PETITION A QUO FOR TBA (PETITIONER BELOW) HAD A PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE COURSE OF LAW AND DID NOT AVAIL OF THE SAME.[25]

II ASSUMING ARGUENDO THAT THE MTC EXCEEDED ITS JURISDICTION IN ORDERING IN THE WRIT OF EXECUTION THAT THE REASONABLE COMPENSATION BE COMPUTED FROM APRIL 15, 1997, STILL, THE RTC COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR IN EXCESS OF ITS JURISDICTION IN VOIDING THE ENTIRE WRIT OF EXECUTION. III THE RTC COMMITTED A GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR IN EXCESS OF ITS JURISDICTION IN ORDERING IN THE CERTIORARI PROCEEDING A QUO THE CONSIGNATION OF RENTALS. IV

Insular Life contends that the case falls within the recognized exceptions to the rule that only the dispositive portion of the decision controls the execution of judgment; that the pleadings, findings of fact and conclusion of law expressed in the text of the MeTC's Decision dated July 13, 1998 should be resorted to, to clarify the ambiguity in the dispositive portion of the decision; that the intent to order payment of rent as reasonable compensation from April 15, 1997, when possession became unlawful, can be inferred from the text of the decision; that the RTC should not have nullified the entire Writ of Execution since only the matter of reasonable compensation from April 15, 1997 was at issue; that consignation of rentals was improper since the office of a writ of certiorari is to correct defects in jurisdiction solely and the legal requisites for a valid consignation were not present; and that Toyota failed to resort to available remedies before availing itself of the extraordinary remedy of certiorari. On the matter of the compromise agreement, Insular Life reiterated that the agreement was a conditional compromise agreement which was voided for Toyota's failure to comply with the conditions.[26]

Toyota claims that the parties had entered into a Compromise Agreement dated May 7, 1999 whereby Toyota was obligated to pay Insular Life P8 million under the following terms and conditions: (a) the delivery of 3 Toyota vehicles worth P1.5 million; (b) the issuance of 12 postdated corporate checks to answer for the balance of P6.5 million in 12 monthly installments; and (c) the posting of a surety bond which shall guarantee payment of installments.[27] Toyota insists that the Compromise Agreement dated May 7, 1999 should be given effect considering that the preconditions contained in the Compromise Agreement were complied with, or at the very least substantially complied with;[28] and prayed that the case should be remanded to the lower court for the purpose of approving the Compromise Agreement dated May 7, 1999.[29] In a Resolution dated August 8, 2001, the Court remanded the case to the RTC for further proceedings to determine whether Toyota had complied with the conditions contained in the Compromise Agreement dated May 7, 1999 and thereafter elevate its findings and records thereof to the Court.[30] In its Compliance[31] dated March 24, 2003, the RTC found that Toyota failed to comply with conditions in the Compromise Agreement dated May 7, 1999 relating to the issuance of the 12 postdated corporate checks and the posting of a surety bond; that the postdated checks were not accepted since they were drawn from Toyota's garnished Metrobank account; that the checks could have been encashed had Insular Life lifted the garnishment; that the

surety bond was rejected for not having been issued by a surety company that is among Insular Life's list of acceptable surety companies; that as substitute collateral, Toyota offered a Bukidnonreal property but Insular Life turned it down since the owner's duplicate of title could not be found and the property was not owned by Toyota but by three corporations; that a subsequent reconstitution of the title and the authorization by the three co-owner corporations to mortgage the Bukidnon real property and to use it to stand as security for the postdated checks failed to entice Insular Life to accept the proposal; and that Toyota acted in good faith in dealing with Insular Life when it tried to comply with the conditions in the Compromise Agreement. By Resolution[32] dated August 27, 2003, the Court required both parties to submit supplemental memoranda, taking into account the Compliance dated March 24, 2003 of the RTC. In its Supplemental Memorandum, Insular Life maintains that Toyota failed to comply with the conditions relating to the postdated checks and the surety bond; that the garnishment of Toyota's bank accounts was a known fact; that it would have been absolutely foolhardy for Insular Life to cause the immediate lifting of the garnishment upon Toyota's mere delivery to it of the postdated checks; that the lifting of the garnishment is one of the consequences once all the conditions of the compromise are met; that Toyota admitted in a Letter dated May 21, 1999 to Insular Life its inability to comply with the surety bond requirement; that Toyota's good faith is immaterial; that Toyota cannot claim [33]

substantial compliance since it failed to comply with the conditions of the Compromise Agreement. On the other hand, in its Supplemental Memorandum,[34] Toyota submits that it substantially complied with the terms of the Compromise Agreement since the compromised amount was reduced from P8 million to P6.5 million upon delivery of the three Toyota vehicles worth P1.5 million; that it could have complied with the requirement of the delivery of 12 postdated checks had Insular Life lifted the garnishment on Toyota's bank accounts effected by virtue of the Writ of Execution dated August 12, 1998; that since the Writ of Execution was voided by the RTC, the garnishment was also nullified; and that Insular Life's unjustified refusal to give due course to the postdated checks, by not lifting the garnishment, prevented said checks from being encashed. It is necessary to resolve the matter involving the efficacy of the Compromise Agreement between the parties before the merits of the petition can be discussed. Jurisprudence teaches us that when a contract is subject to a suspensive condition, its birth or effectivity can take place only if and when the event which constitutes the condition happens or is fulfilled,[35] and if the suspensive condition does not take place, the parties would stand as if the conditional obligation has never existed.[36] In this case, the Compromise Agreement clearly stipulates that it shall become valid and binding only upon the

occurrence of all the conditions in the agreement, to wit: 2. This Agreement when signed by the parties shall take effect and shall become valid and binding only upon the occurrence of all of the following based on a certification or acknowledgment certified and issued by INSULAR LIFE: 2.1 transfer of ownership and delivery of the aforementioned three (3) motor vehicles in favor of INSULAR LIFE in accordance with the provisions of Section 1.1. hereof; 2.2. TBA's execution, issuance and delivery of twelve (12) post-dated TBA corporate checks signed by ROBERT L. YUPANGCO in favor of INSULAR LIFE in accordance with the provisions of this Agreement; 2.3. the issuance of the Surety Company and delivery of the Bond in the amount of PESOS: SIX MILLION FIVE HUNDRED THOUSAND (P6,5000,000.00) to and in favor of INSULAR LIFE under this [37] Agreement. x x x (Emp hasis supplied)

Thus, the issuance of 12 postdated checks and the posting of a surety bond are

positive suspensive conditions of the Compromise Agreement, the noncompliance with which was not a breach, casual or serious, but a situation that prevented the obligation under the Compromise Agreement from acquiring obligatory force. For its non-fulfillment, there was no contract or agreement to speak of, Toyota having failed to comply or perform the suspensive conditions which enforce a juridical relation. [38] Since Toyota was unable to comply with the last two conditions of the agreement, which were suspensive conditions, Insular Life cannot be compelled to comply with its obligation to end the present litigation. No right in favor of Toyota arose and no obligation on the part of Insular Life was created.[39] Toyota faults Insular Life for its failure to comply with the requirements of the Compromise Agreement because Insular Life refused to accept checks from Toyota's garnished account. However, Insular Life should not be blamed for this. It would be imprudent and foolhardy on Insular Life's part to lift the garnishment on Toyota's bank accounts. The garnishment was one of the effects of the issuance of the Writ of Execution, and while the RTC nullified the Writ of Execution, its decision on the matter is not yet final as it is, in fact, subject of the present petition. Besides, even if Insular Life accepted the postdated checks, Toyota still failed to comply with the requirement of posting of a surety bond from Insular Life's list of acceptable sureties which would guarantee the payment of installments. Even the substitute collateral proposed by Toyota was

not accepted by Insular Life.Since the conditions of the Compromise Agreement were not met or fulfilled by Toyota, the parties stand as if no agreement to end the litigation was reached. And now on the merits of the petition. The Court finds the petition impressed with merit for the following reasons: First, the RTC erred in giving due course to Toyota's petition for certiorari. The filing of the petition for certiorari was premature and unwarranted. The cardinal rule is that before a petition for certiorari can be brought against an order of the lower court, all remedies available in that court must first be exhausted. Thus, for the special civil action for certiorari to prosper, there must be no appeal nor any plain, speedy and adequate remedy in the ordinary course of law. [40] The court must be given sufficient opportunity to correct the error it may have committed. The reason for this rule is that issues, which courts of first instance are bound to decide, should not be taken summarily from them and submitted to an appellate court, without first giving the lower courts an opportunity to dispose of the same with due deliberation. [41]

While there are exceptions to the rule, such as where the order complained of is void for being violative of due process; or there are special circumstances which warrant immediate and more direct action; or the lower court has taken an unreasonably long time to resolve the motions before it and a further delay would prejudice the

party concerned; or the motion will raise the same point which has already been squarely stated before the court; or the proceeding in which the order occurred is a patent nullity, as the court acted without jurisdiction, Toyota failed to show that any of the exceptions apply. Toyota may not arrogate to itself the determination of whether recourse to an available remedy is necessary or not.[42] In the instant case, it appears that Toyota had adequate remedies under the law. It could have filed with the MeTC a motion to quash the writ of execution or a motion to clarify the dispositive portion of the decision. There is no showing that either motion would not be a prompt and adequate remedy, or that there was such urgent necessity for relief that only recourse to certiorari was proper.

judgment, because the dispositive part of a decision must find support from the decisions ratio decidendi. Findings of the court are to be considered in the interpretation of the dispositive portion of the judgment.[45]

Second, while the general rule is that the portion of a decision that becomes the subject of execution is that ordained or decreed in the dispositive part thereof, there are recognized exceptions to this rule: (a).where there is ambiguity or uncertainty, the body of the opinion may be referred to for purposes of construing the judgment, because the dispositive part of a decision must find support from the [43] decisions ratio decidendi; and (b).where extensive and explicit discussion and settlement of the issue is found in the body of the decision.[44]

In Reinsurance Company of the Orient, Inc. v. Court of Appeals,[48] the Court held:

Considering the circumstances of the instant case, the Court finds that the exception to the general rule applies to the instant case. The RTC should have referred to the body of the decision for purposes of construing the reasonable compensation

Indeed, to grasp and delve into the true intent and meaning of a decision, no specific portion thereof should be resorted to - the decision must be considered in its entirety.[46] The Court may resort to the pleadings of the parties, its findings of fact and conclusions of law as expressed in the body of the decision to clarify any ambiguities caused by any inadvertent omission or mistake in the dispositive portion thereof.[47]

In Republic Surety and Insurance Company, Inc. v. Intermediate Appellate Court, the Court applying the above doctrine said: x x x We clarify, in other words, what we did affirm. What is involved here is not what is ordinarily regarded as a clerical error in the dispositive part of the decision of the Court of First Instance, which type of error is perhaps best typified by an error

in arithmetical computation. At the same time, what is involved here is not a correction of an erroneous judgment or dispositive porti on of a judgment. What we believe is involved here is in the nature of an inadvertent omission on the part of the Court of First Instance (which should have been noticed by private respondents counsel who had prepared the complaint), of what might be described as a logical followthrough of something set forth both in the body of the decision and in the dispositive por tion thereof: the inevitable followthrough, or translation into, operational or behavioral terms, of the annulment of the Deed of Sale with Assumption of Mortgage, from which petitioners title or claim of title embodied in TCT 133153 flow. [49] (Emphasis supplied)

In the present case, the omission of the award of payment of rental from April 15, 1997 was obviously through mere inadvertence. The pleadings, findings of fact and conclusions of law of the MeTC bear out that upon the termination of the lease on April 15, 1997, Toyota's possession of the property became unlawful; thus, from that date, payment of rents must be reckoned. The importance of April 15, 1997 as termination date of the lease was emphasized by the MeTC in the body of its Decision, thus: The claim of [Toyota] that notice to vacate was made on them only on December 9, 1997 is belied by Exhibits C, D, E and F which are attached to the affidavit of Januario Flores, the Asst. Vice-President of [Insular Life]. These exhibits are letters written by Asst. Vice-President Flores to Mr. Isidro Laforteza Vice-President of [Toyota] dated March 1, 1994, March 4, 1996, March 3, 1997 and April 14, 1997, respectively. These letters show that as early as 1994, [Insular Life] had already informed [Toyota] if its intention to take back possession of the leased premises by not renewing the lease contract upon its expiration on April 15, 1997. Hence the continued possession of [Toyota] after the expiration of the lease contract did not bear the acquiescence of [Insular Life]. In fact, [Toyota] was informed by [Insular Life] to vacate the leased premises on or

before April 30, 1997 (Exh. F to the affidavit of Mr. Flores). The existence of Exh. F negates that an implied lease was established between [Insular Life] and [Toyota]. It is now apparent that [Toyota] is unlawfully withholding possession of the leased premises.

grave abuse of discretion which was tantamount to lack or excess of jurisdiction; [53] it is not to be used for any other purpose, [54] such as to cure errors in proceedings or to correct erroneous conclusions of law or fact. [55]

The only issue involved in the RTC was whether the writ of execution issued by the MeTC was issued in excess of jurisdiction.

xxxx [Toyota], having enjoyed the use and possession of the leased property over the objection of [Insular Life] x x x [Insular Life] is entitled to reasonable compensation of Five Hundred Eighty Five Thousand Six Hundred Forty Pesos (P585,640.00) a month until possession thereof is returned to [Insular Life] which amount is double the amount of the last monthly rental paid by [Toyota] to [Insular Life]. [50] x x x (Emphasis supplied).

Third, the RTC erred in granting Toyota's motion for consignation. It was precipitate and unauthorized. It is basic that certiorari under Rule 65 is a remedy narrow in scope and inflexible in character. It is not a general utility tool in the legal workshop.[51] It offers only a limited form of review. Its principal function is to keep an inferior tribunal within its jurisdiction.[52] It can be invoked only for an error of jurisdiction, that is, one in which the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of jurisdiction, or with

The determination of the propriety of consignation as ordered by the RTC is a factual matter which by the weight of judicial precedents cannot be inquired into by the RTC in a petition for certiorari. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. Nevertheless, in the interest of prompt disposition of the present case, the Court opts to resolve the question whether consignation is proper under the undisputed circumstances. Consignation is the act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment and it generally requires a prior tender of payment. [56] In order that consignation may be effective, the debtor must show that: (1) there was a debt due; (2) the consignation of the obligation was made because the creditor to whom tender of payment had

been made refused to accept it or was absent or incapacitated, or because several persons claimed to be entitled to receive the amount due, or because the title to the obligation was lost; (3) previous notice of the consignation was given to the person interested in the performance of the obligation; (4) the amount due was placed at the disposal of the court; and (5) after the consignation had been made, the person interested was notified thereof.[57] Failure in any of these requirements is enough ground to render a consignation ineffective. In the present case, Toyota failed to allege (2) and (3) above, much less prove that any of the requirements was present. The mere fact that Toyota had been in possession of the property since July 3, 1998, when the MeTC Decision was promulgated, is not a sufficient justification to grant the motion to consign the rents due. Finally, the Court cannot help but call the RTCs attention to the prejudice it has wittingly or unwittingly caused Insular Life by voiding the entire writ of execution when what was assailed was simply the inclusion of the phrase from April 15, 1997 in the reasonable compensation judgment of the MeTC. The order for Toyota to vacate the lease properties and return possession thereof to Insular Life, and pay attorney's fees and litigation expenses was not assailed and should have been enforced. The factual milieu of the present case demonstrates eloquently that Toyota misused all known technicalities and remedies to prolong the proceedings in a simple ejectment case. The equitable remedy provided by the summary nature

of ejectment proceedings has been frustrated by Toyota to the great prejudice of Insular Life and the time of this Court. Ironically, the precipitate action of the RTC in giving due course to Toyota's petition for certiorari prolonged the litigation and unnecessarily delayed the case, in the process causing the very evil it apparently sought to avoid. Instead of unclogging dockets, it has actually increased the work load of the justice system as a whole. Such action does not inspire public confidence in the administration of justice. WHEREFORE, the petition is hereby GRANTED. The Decision dated September 30, 1998 and Order dated March 5, 1999 of the Regional Trial Court, Branch 148, Makati City are REVERSED and SET ASIDE. The Writ of Execution dated August 12, 1998 as clarified in the Order dated October 28, 1998 of the Metropolitan Trial Court, Branch 63, Makati, is declared VALID. Double costs against petitioner. SO ORDERED. G.R. No. 137873

April 20, 2001

D. M. CONSUNJI, INC., petitioner, vs. COURT OF APPEALS and MARIA J. JUEGO, respondents. KAPUNAN, J.: At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker of D. M. Consunji, Inc., fell 14 floors from the Renaissance Tower, Pasig City to his death.

PO3 Rogelio Villanueva of the Eastern Police District investigated the tragedy and filed a report dated November 25, 1990, stating that: x x x. [The] [v]ictim was rushed to [the] Rizal Medical Center in Pasig, Metro Manila where he was pronounced dead on arrival (DOA) by the attending physician, Dr. Errol de Yzo[,] at around 2:15 p.m. of the same date. Investigation disclosed that at the given time, date and place, while victim Jose A. Juego together with Jessie Jaluag and Delso Destajo [were] performing their work as carpenter[s] at the elevator core of the 14th floor of the Tower D, Renaissance Tower Building on board a [p]latform made of channel beam (steel) measuring 4.8 meters by 2 meters wide with pinulid plywood flooring and cable wires attached to its four corners and hooked at the 5 ton chain block, when suddenly, the bolt or pin which was merely inserted to connect the chain block with the [p]latform, got loose xxx causing the whole [p]latform assembly and the victim to fall down to the basement of the elevator core, Tower D of the building under construction thereby crushing the victim of death, save his two (2) companions who luckily jumped out for safety. It is thus manifest that Jose A. Juego was crushed to death when the [p]latform he was then on board and performing work, fell. And the falling of the [p]latform was due to the removal or getting loose of the pin which was merely inserted to the connecting points of the chain block and [p]latform but without a safety lock.1 On May 9, 1991, Jose Juego’s widow, Maria, filed in the Regional Trial Court (RTC) of Pasig a complaint for damages against the deceased’s employer, D.M. Consunji, Inc. The employer raised, among other defenses, the widow’s prior availment of the benefits from the State Insurance Fund. After trial, the RTC rendered a decision in favor of the widow Maria Juego. The dispositive portion of the RTC decision reads: WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff, as follows: 1. P50,000.00 for the death of Jose A. Juego. 2. P10,000.00 as actual and compensatory damages. 3. P464,000.00 for the loss of Jose A. Juego’s earning capacity. 4. P100,000.00 as moral damages. 5. P20,000.00 as attorney’s fees, plus the costs of suit.

SO ORDERED.

2

On appeal by D. M. Consunji, the Court of Appeals (CA) affirmed the decision of the RTC in toto. D. M. Consunji now seeks the reversal of the CA decision on the following grounds: 

THE APPELLATE COURT ERRED IN HOLDING THAT THE POLICE REPORT WAS ADMISSIBLE EVIDENCE OF THE ALLEGED NEGLIGENCE OF PETITIONER.



THE APPELLATE COURT ERRED IN HOLDING THAT THE DOCTRINE OF RES IPSA LOQUITOR[sic] IS APPLICABLE TO PROVE NEGLIGENCE ON THE PART OF PETITIONER.



THE APPELLATE COURT ERRED IN HOLDING THAT PETITIONER IS PRESUMED NEGLIGENT UNDER ARTICLE 2180 OF THE CIVIL CODE, AND



THE APPELLATE COURT ERRED IN HOLDING THAT RESPONDENT IS NOT PRECLUDED FROM RECOVERING DAMAGES UNDER THE CIVIL CODE. 3

Petitioner maintains that the police report reproduced above is hearsay and, therefore, inadmissible. The CA ruled otherwise. It held that said report, being an entry in official records, is an exception to the hearsay rule. The Rules of Court provide that a witness can testify only to those facts which he knows of his personal knowledge, that is, which are derived from his perception. A witness, therefore, may not testify as what he merely learned from others either because he was told or read or heard the same. Such testimony is considered hearsay and may not be received as proof of the truth of what he has learned.5 This is known as the hearsay rule. 4 

Hearsay is not limited to oral testimony or statements; the general rule that excludes hearsay as evidence applies to written, as well as oral statements.6 The theory of the hearsay rule is that the many possible deficiencies, suppressions, sources of error and untrustworthiness, which lie underneath the bare untested assertion of a witness, may be best brought to light and exposed by the test of crossexamiantion.7 The hearsay rule, therefore, excludes evidence that cannot be tested by cross-examination. 8 The Rules of Court allow several exceptions to the rule,9 among which are entries in official records. Section 44, Rule 130 provides:

Entries in official records made in the performance of his duty made 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 facieevidence of the facts therein stated. In Africa, et al. vs. Caltex (Phil.), Inc., et al., this Court, citing the work of Chief Justice Moran, enumerated the requisites for admissibility under the above rule: 10 

(a) that the entry was made by a public officer or by another person specially enjoined by law to do so; (b) that it was made by the public officer in the performance of his duties, or by such other person in the performance of a duty specially enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by him stated, which must have been acquired by him personally or through official information. The CA held that the police report meets all these requisites. Petitioner contends that the last requisite is not present. The Court notes that PO3 Villanueva, who signed the report in question, also testified before the trial court. In Rodriguez vs. Court of Appeals, which involved a Fire Investigation Report, the officer who signed the fire report also testified before the trial court. This Court held that the report was inadmissible for the purpose of proving the truth of the statements contained in the report but admissible insofar as it constitutes part of the testimony of the officer who executed the report. 11 

x x x. Since Major Enriquez himself took the witness stand and was available for cross-examination, the portions of the report which were of his personal knowledge or which consisted of his perceptions and conclusions were not hearsay. The rest of the report, such as the summary of the statements of the parties based on their sworn statements (which were annexed to the Report) as well as the latter, having been included in the first purpose of the offer [as part of the testimony of Major Enriquez], may then be considered as independently relevant statements which were gathered in the course of the investigation and may thus be admitted as such, but not necessarily to prove the truth thereof. It has been said that: "Where regardless of the truth or falsity of a statement, the fact that it has been made is relevant, the hearsay rule does not apply, but the statement may be shown. Evidence as to the making of such statement is not secondary but primary, for the statement itself may constitute a fact in issue, or be

circumstantially relevant as to the existence of such a fact." When Major Enriquez took the witness stand, testified for petitioners on his Report and made himself available for cross-examination by the adverse party, the Report, insofar as it proved that certain utterances were made (but not their truth), was effectively removed from the ambit of the aforementioned Section 44 of Rule 130. Properly understood, this section does away with the testimony in open court of the officer who made the official record, considers the matter as an exception to the hearsay rule and makes the entries in said official record admissible in evidence as prima facie evidence of the facts therein stated. The underlying reasons for this exceptionary rule are necessity and trustworthiness, as explained in Antillon v. Barcelon. The litigation is unlimited in which testimony by officials is daily needed; the occasions in which the officials would be summoned from his ordinary duties to declare as a witness are numberless. The public officers are few in whose daily work something is not done in which testimony is not needed from official sources. Were there no exception for official statements, hosts of officials would be found devoting the greater part of their time to attending as witnesses in court or delivering deposition before an officer. The work of administration of government and the interest of the public having business with officials would alike suffer in consequence. For these reasons, and for many others, a certain verity is accorded such documents, which is not extended to private documents. (3 Wigmore on Evidence, Sec. 1631). The law reposes a particular confidence in public officers that it presumes they will discharge their several trusts with accuracy and fidelity; and, therefore, whatever acts they do in discharge of their duty may be given in evidence and shall be taken to be true under such a degree of caution as to the nature and circumstances of each case may appear to require. It would have been an entirely different matter if Major Enriquez was not presented to testify on his report. In that case the applicability of Section 44 of Rule 143 would have been ripe for determination, and this Court would have agreed with the Court of Appeals that said report was inadmissible since the aforementioned third requisite was not satisfied. The statements given by the sources of information of Major Enriquez failed to qualify as "official information," there being no showing that, at the very least, they were under a duty to give the statements for record. Similarly, the police report in this case is inadmissible for the purpose of proving the truth of the statements contained therein but is admissible insofar as it constitutes part of the testimony of PO3 Villanueva.

In any case, the Court holds that portions of PO3 Villanueva’s testimony which were of his personal knowledge suffice to prove that Jose Juego indeed died as a result of the elevator crash. PO3 Villanueva had seen Juego’s remains at the morgue, making the latter’s death beyond dispute. PO3 Villanueva also conducted an ocular inspection of the premises of the building the day after the incident and saw the platform for himself. He observed that the platform was crushed and that it was totally damaged. PO3 Villanueva also required Garcia and Fabro to bring the chain block to the police headquarters. Upon inspection, he noticed that the chain was detached from the lifting machine, without any pin or bolt.17 12 

13 

14 

15 

16 

What petitioner takes particular exception to is PO3 Villanueva’s testimony that the cause of the fall of the platform was the loosening of the bolt from the chain block. It is claimed that such portion of the testimony is mere opinion. Subject to certain exceptions, the opinion of a witness is generally not admissible. 19 18 

Petitioner’s contention, however, loses relevance in the face of the application of res ipsa loquitur by the CA. The effect of the doctrine is to warrant a presumption or inference that the mere fall of the elevator was a result of the person having charge of the instrumentality was negligent. As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence.20 The concept of res ipsa loquitur has been explained in this wise: While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or injury will not generally give rise to an inference or presumption that it was due to negligence on defendant’s part, under the doctrine of res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, or in one jurisdiction, that the thing or instrumentality speaks for itself, the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the defendant, or some other person who is charged with negligence. x x x where it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation by the defendant, that the injury arose from or was caused by the defendant’s want of care.21

One of the theoretical based for the doctrine is its necessity, i.e., that necessary evidence is absent or not available.22 The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it and that the plaintiff has no such knowledge, and therefore is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to establish negligence. The inference which the doctrine permits is grounded upon the fact that the chief evidence of the true cause, whether culpable or innocent, is practically accessible to the defendant but inaccessible to the injured person. It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a plaintiff, without knowledge of the cause, reaches over to defendant who knows or should know the cause, for any explanation of care exercised by the defendant in respect of the matter of which the plaintiff complains. The res ipsa loquitur doctrine, another court has said, is a rule of necessity, in that it proceeds on the theory that under the peculiar circumstances in which the doctrine is applicable, it is within the power of the defendant to show that there was no negligence on his part, and direct proof of defendant’s negligence is beyond plaintiff’s power. Accordingly, some court add to the three prerequisites for the application of the res ipsa loquitur doctrine the further requirement that for the res ipsa loquitur doctrine to apply, it must appear that the injured party had no knowledge or means of knowledge as to the cause of the accident, or that the party to be charged with negligence has superior knowledge or opportunity for explanation of the accident.23 The CA held that all the requisites of res ipsa loquitur are present in the case at bar: There is no dispute that appellee’s husband fell down from the 14th floor of a building to the basement while he was working with appellant’s construction project, resulting to his death. The construction site is within the exclusive control and management of appellant. It has a safety engineer, a project superintendent, a carpenter leadman and others who are in complete control of the situation therein. The circumstances of any accident that would occur therein are peculiarly within the knowledge of the appellant or its employees. On the other hand, the appellee is not in a position to know what caused the accident. Res ipsa loquitur is a rule of necessity and it applies where evidence is absent or not readily available, provided the following requisites are present: (1) the accident was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which caused the injury was under the exclusive control of the person charged with negligence; and (3) the injury suffered must not have

been due to any voluntary action or contribution on the part of the person injured. x x x. No worker is going to fall from the 14 th floor of a building to the basement while performing work in a construction site unless someone is negligent[;] thus, the first requisite for the application of the rule of res ipsa loquitur is present. As explained earlier, the construction site with all its paraphernalia and human resources that likely caused the injury is under the exclusive control and management of appellant[;] thus[,] the second requisite is also present. No contributory negligence was attributed to the appellee’s deceased husband[;] thus[,] the last requisite is also present. All the requisites for the application of the rule of res ipsa loquitur are present, thus a reasonable presumption or inference of appellant’s negligence arises. x x x.24 Petitioner does not dispute the existence of the requisites for the application of res ipsa loquitur, but argues that the presumption or inference that it was negligent did not arise since it "proved that it exercised due care to avoid the accident which befell respondent’s husband." Petitioner apparently misapprehends the procedural effect of the doctrine. As stated earlier, the defendant’s negligence is presumed or inferred when the plaintiff establishes the requisites for the application of res ipsa loquitur. Once the plaintiff makes out a prima facie case of all the elements, the burden then shifts to defendant to explain. The presumption or inference may be rebutted or overcome by other evidence and, under appropriate circumstances disputable presumption, such as that of due care or innocence, may outweigh the inference. It is not for the defendant to explain or prove its defense to prevent the presumption or inference from arising. Evidence by the defendant of say, due care, comes into play only after the circumstances for the application of the doctrine has been established. 25 

26 

27 

1âwphi1.nêt

In any case, petitioner cites the sworn statement of its leadman Ferdinand Fabro executed before the police investigator as evidence of its due care. According to Fabro’s sworn statement, the company enacted rules and regulations for the safety and security of its workers. Moreover, the leadman and the bodegero inspect the chain block before allowing its use. It is ironic that petitioner relies on Fabro’s sworn statement as proof of its due care but, in arguing that private respondent failed to prove negligence on the part of petitioner’s employees, also assails the same statement for being hearsay. Petitioner is correct. Fabro’s sworn statement is hearsay and inadmissible. Affidavits are inadmissible as evidence under the hearsay rule, unless the affiant

is placed on the witness stand to testify thereon. The inadmissibility of this sort of evidence is based not only on the lack of opportunity on the part of the adverse party to cross-examine the affiant, but also on the commonly known fact that, generally, an affidavit is not prepared by the affiant himself but by another who uses his own language in writing the affiant’s statements which may either be omitted or misunderstood by the one writing them. Petitioner, therefore, cannot use said statement as proof of its due care any more than private respondent can use it to prove the cause of her husband’s death. Regrettably, petitioner does not cite any other evidence to rebut the inference or presumption of negligence arising from the application of res ipsa loquitur, or to establish any defense relating to the incident. 28 

29 

Next, petitioner argues that private respondent had previously availed of the death benefits provided under the Labor Code and is, therefore, precluded from claiming from the deceased’s employer damages under the Civil Code. Article 173 of the Labor Code states: Article 173. Extent of liability. – Unless otherwise provided, the liability of the State Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the employee, his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. The payment of compensation under this Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred sixtyone, as amended, Republic Act Numbered Six hundred ten, as amended, Republic Act Numbered Forty-eight hundred sixty-four as amended, and other laws whose benefits are administered by the System or by other agencies of the government. The precursor of Article 173 of the Labor Code, Section 5 of the Workmen’s Compensation Act, provided that: Section 5. Exclusive right to compensation. – The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws because of said injury x x x. Whether Section 5 of the Workmen’s Compensation Act allowed recovery under said Act as well as under the Civil Code used to be the subject of conflicting decisions. The Court finally settled the matter in Floresca vs.Philex Mining Corporation, which involved a cave-in resulting in the death of the employees of the Philex Mining Corporation. Alleging 30 

that the mining corporation, in violation of government rules and regulations, failed to take the required precautions for the protection of the employees, the heirs of the deceased employees filed a complaint against Philex Mining in the Court of First Instance (CFI). Upon motion of Philex Mining, the CFI dismissed the complaint for lack of jurisdiction. The heirs sought relief from this Court. Addressing the issue of whether the heirs had a choice of remedies, majority of the Court En Banc, following the rule in Pacaña vs. Cebu Autobus Company, held in the affirmative.

31 

WE now come to the query as to whether or not the injured employee or his heirs in case of death have a right of selection or choice of action between availing themselves of the worker’s right under the Workmen’s Compensation Act and suing in the regular courts under the Civil Code for higher damages (actual, moral and exemplary) from the employers by virtue of the negligence or fault of the employers or whether they may avail themselves cumulatively of both actions, i.e., collect the limited compensation under the Workmen’s Compensation Act and sue in addition for damages in the regular courts.

WE hold that although the other petitioners had received the benefits under the Workmen’s Compensation Act, such my not preclude them from bringing an action before the regular court because they became cognizant of the fact that Philex has been remiss in its contractual obligations with the deceased miners only after receiving compensation under the Act. Had petitioners been aware of said violation of government rules and regulations by Philex, and of its negligence, they would not have sought redress under the Workmen’s Compensation Commission which awarded a lesser amount for compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which nullifies the choice as it was not an intelligent choice. The case should therefore be remanded to the lower court for further proceedings. However, should the petitioners be successful in their bid before the lower court, the payments made under the Workmen’s Compensation Act should be deducted from the damages that may be decreed in their favor. [Underscoring supplied.] The ruling in Floresca providing the claimant a choice of remedies was reiterated in Ysmael Maritime Corporation vs. Avelino, Vda. De Severo vs. Feliciano-Go, and Marcopper Mining Corp. vs. Abeleda. In the last case, the Court again recognized that a claimant who had been paid under the Act could still sue under the Civil Code. The Court said: 32 

33 

In disposing of a similar issue, this Court in Pacaña vs. Cebu Autobus Company, 32 SCRA 442, ruled that an injured worker has a choice of either to recover from the employer the fixed amounts set by the Workmen’s Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher damages but he cannot pursue both courses of action simultaneously. [Underscoring supplied.] Nevertheless, the Court allowed some of the petitioners in said case to proceed with their suit under the Civil Code despite having availed of the benefits provided under the Workmen’s Compensation Act. The Court reasoned: With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968 before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino submitted notices and claims for compensation to the Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments x x x. Such allegation was admitted by herein petitioners in their opposition to the motion to dismiss dated may 27, 1968 x x x in the lower court, but they set up the defense that the claims were filed under the Workmen’s Compensation Act before they learned of the official report of the committee created to investigate the accident which established the criminal negligence and violation of law by Philex, and which report was forwarded by the Director of Mines to then Executive Secretary Rafael Salas in a letter dated October 19, 1967 only x x x.

34 

In the Robles case, it was held that claims for damages sustained by workers in the course of their employment could be filed only under the Workmen’s Compensation Law, to the exclusion of all further claims under other laws. In Floresca, this doctrine was abrogated in favor of the new rule that the claimants may invoke either the Workmen’s Compensation Act or the provisions of the Civil Code, subject to the consequence that the choice of one remedy will exclude the other and that the acceptance of compensation under the remedy chosen will preclude a claim for additional benefits under the other remedy. The exception is where a claimant who has already been paid under the Workmen’s Compensation Act may still sue for damages under the Civil Code on the basis of supervening facts or developments occurring after he opted for the first remedy. (Underscoring supplied.) Here, the CA held that private respondent’s case came under the exception because private respondent was unaware of petitioner’s negligence when she filed her claim for death benefits from the State Insurance Fund. Private respondent filed the civil complaint for damages after she received a copy of the police investigation report and the Prosecutor’s Memorandum dismissing the criminal complaint against petitioner’s personnel. While stating that there was no negligence attributable to the respondents in the complaint, the prosecutor nevertheless noted in the Memorandum that, "if at all," the "case is civil in

nature." The in Floresca:

CA

thus

applied

the

exception

x x x We do not agree that appellee has knowledge of the alleged negligence of appellant as early as November 25, 1990, the date of the police investigator’s report. The appellee merely executed her sworn statement before the police investigator concerning her personal circumstances, her relation to the victim, and her knowledge of the accident. She did not file the complaint for "Simple Negligence Resulting to Homicide" against appellant’s employees. It was the investigator who recommended the filing of said case and his supervisor referred the same to the prosecutor’s office. This is a standard operating procedure for police investigators which appellee may not have even known. This may explain why no complainant is mentioned in the preliminary statement of the public prosecutor in her memorandum dated February 6, 1991, to wit: "Respondent Ferdinand Fabro x x x are being charged by complainant of "Simple Negligence Resulting to Homicide." It is also possible that the appellee did not have a chance to appear before the public prosecutor as can be inferred from the following statement in said memorandum: "Respondents who were notified pursuant to Law waived their rights to present controverting evidence," thus there was no reason for the public prosecutor to summon the appellee. Hence, notice of appellant’s negligence cannot be imputed on appellee before she applied for death benefits under ECC or before she received the first payment therefrom. Her using the police investigation report to support her complaint filed on May 9, 1991 may just be an afterthought after receiving a copy of the February 6, 1991 Memorandum of the Prosecutor’s Office dismissing the criminal complaint for insufficiency of evidence, stating therein that: "The death of the victim is not attributable to any negligence on the part of the respondents. If at all and as shown by the records this case is civil in nature." (Underscoring supplied.) Considering the foregoing, We are more inclined to believe appellee’s allegation that she learned about appellant’s negligence only after she applied for and received the benefits under ECC. This is a mistake of fact that will make this case fall under the exception held in the Floresca ruling. 35

The CA further held that not only was private respondent ignorant of the facts, but of her rights as well: x x x. Appellee [Maria Juego] testified that she has reached only elementary school for her educational attainment; that she did not know what damages could be recovered from the death of her husband; and that she did not know that she may also recover more from the Civil Code than from the ECC. x x x.36 Petitioner impugns the foregoing rulings. It contends that private respondent "failed to allege in her complaint that her application and receipt of benefits

from the ECC were attended by ignorance or mistake of fact. Not being an issue submitted during the trial, the trial court had no authority to hear or adjudicate that issue." Petitioner also claims that private respondent could not have been ignorant of the facts because as early as November 28, 1990, private respondent was the complainant in a criminal complaint for "Simple Negligence Resulting to Homicide" against petitioner’s employees. On February 6, 1991, two months before the filing of the action in the lower court, Prosecutor Lorna Lee issued a resolution finding that, although there was insufficient evidence against petitioner’s employees, the case was "civil in nature." These purportedly show that prior to her receipt of death benefits from the ECC on January 2, 1991 and every month thereafter, private respondent also knew of the two choices of remedies available to her and yet she chose to claim and receive the benefits from the ECC. When a party having knowledge of the facts makes an election between inconsistent remedies, the election is final and bars any action, suit, or proceeding inconsistent with the elected remedy, in the absence of fraud by the other party. The first act of election acts as a bar. Equitable in nature, the doctrine of election of remedies is designed to mitigate possible unfairness to both parties. It rests on the moral premise that it is fair to hold people responsible for their choices. The purpose of the doctrine is not to prevent any recourse to any remedy, but to prevent a double redress for a single wrong. 38 37 

The choice of a party between inconsistent remedies results in a waiver by election. Hence, the rule in Floresca that a claimant cannot simultaneously pursue recovery under the Labor Code and prosecute an ordinary course of action under the Civil Code. The claimant, by his choice of one remedy, is deemed to have waived the other. Waiver is the a known right.39

intentional

relinquishment

of

[It] is an act of understanding that presupposes that a party has knowledge of its rights, but chooses not to assert them. It must be generally shown by the party claiming a waiver that the person against whom the waiver is asserted had at the time knowledge, actual or constructive, of the existence of the party’s rights or of all material facts upon which they depended. Where one lacks knowledge of a right, there is no basis upon which waiver of it can rest. Ignorance of a material fact negates waiver, and waiver cannot be established by a consent given under a mistake or misapprehension of fact. A person makes a knowing and intelligent waiver when that person knows that a right exists and has

adequate knowledge upon which to make an intelligent decision.

respondent testified that she was not aware of her rights.

Waiver requires a knowledge of the facts basic to the exercise of the right waived, with an awareness of its consequences. That a waiver is made knowingly and intelligently must be illustrated on the record or by the evidence.40

Petitioner, though, argues that under Article 3 of the Civil Code, ignorance of the law excuses no one from compliance therewith. As judicial decisions applying or interpreting the laws or the Constitution form part of the Philippine legal system (Article 8, Civil Code), private respondent cannot claim ignorance of this Court’s ruling in Floresca allowing a choice of remedies.

That lack of knowledge of a fact that nullifies the election of a remedy is the basis for the exception in Floresca. It is in light of the foregoing principles that we address petitioner’s contentions. Waiver is a defense, and it was not incumbent upon private respondent, as plaintiff, to allege in her complaint that she had availed of benefits from the ECC. It is, thus, erroneous for petitioner to burden private respondent with raising waiver as an issue. On the contrary, it is the defendant who ought to plead waiver, as petitioner did in pages 2-3 of its Answer; otherwise, the defense is waived. It is, therefore, perplexing for petitioner to now contend that the trial court had no jurisdiction over the issue when petitioner itself pleaded waiver in the proceedings before the trial court. 41 

Does the evidence show that private respondent knew of the facts that led to her husband’s death and the rights pertaining to a choice of remedies? It bears stressing that what negates waiver is lack of knowledge or a mistake of fact. In this case, the "fact" that served as a basis for nullifying the waiver is the negligence of petitioner’s employees, of which private respondent purportedly learned only after the prosecutor issued a resolution stating that there may be civil liability. In Floresca, it was the negligence of the mining corporation and its violation of government rules and regulations. Negligence, or violation of government rules and regulations, for that matter, however, is not a fact, but a conclusion of law, over which only the courts have the final say. Such a conclusion binds no one until the courts have decreed so. It appears, therefore, that the principle that ignorance or mistake of fact nullifies a waiver has been misapplied in Floresca and in the case at bar. In any event, there is no proof that private respondent knew that her husband died in the elevator crash when on November 15, 1990 she accomplished her application for benefits from the ECC. The police investigation report is dated November 25, 1990, 10 days after the accomplishment of the form. Petitioner filed the application in her behalf on November 27, 1990. There is also no showing that private respondent knew of the remedies available to her when the claim before the ECC was filed. On the contrary, private

The argument has no merit. The application of Article 3 is limited to mandatory and prohibitory laws. This may be deduced from the language of the provision, which, notwithstanding a person’s ignorance, does not excuse his or her compliance with the laws. The rule in Floresca allowing private respondent a choice of remedies is neither mandatory nor prohibitory. Accordingly, her ignorance thereof cannot be held against her. 42 

Finally, the Court modifies the affirmance of the award of damages. The records do not indicate the total amount private respondent ought to receive from the ECC, although it appears from Exhibit "K" that she received P3,581.85 as initial payment representing the accrued pension from November 1990 to March 1991. Her initial monthly pension, according to the same Exhibit "K," was P596.97 and present total monthly pension was P716.40. Whether the total amount she will eventually receive from the ECC is less than the sum of P644,000.00 in total damages awarded by the trial court is subject to speculation, and the case is remanded to the trial court for such determination. Should the trial court find that its award is greater than that of the ECC, payments already received by private respondent under the Labor Code shall be deducted from the trial court'’ award of damages. Consistent with our ruling in Floresca, this adjudication aims to prevent double compensation. 43 

WHEREFORE, the case is REMANDED to the Regional Trial Court of Pasig City to determine whether the award decreed in its decision is more than that of the ECC. Should the award decreed by the trial court be greater than that awarded by the ECC, payments already made to private respondent pursuant to the Labor Code shall be deducted therefrom. In all other respects, the Decision of the Court of Appeals is AFFIRMED. SO ORDERED. G.R. No. 113003 October 17, 1997 ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs. COURT OF APPEALS, LENY TUMBOY, ARDEE TUMBOY and JASMIN TUMBOY, respondents.

ROMERO, J.: In this petition for review on certiorari of the decision of the Court of Appeals, the issue is whether or not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event that exempts the carrier from liability for the death of a passenger. On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin, bearded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded. The bus fell into a ravine around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers. On November 21, 1988, a complaint for breach of contract of carriage, damages and attorney's fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver, before the Regional Trial Court of Davao City. When the defendants therein filed their answer to the complaint, they raised the affirmative defense of caso fortuito. They also filed a third-party complaint against Philippine Phoenix Surety and Insurance, Inc. This third-party defendant filed an answer with compulsory counterclaim. At the pre-trial conference, the parties agreed to a stipulation of facts. 1

Upon a finding that the third party defendant was not liable under the insurance contract, the lower court dismissed the third party complaint. No amicable settlement having been arrived at by the parties, trial on the merits ensued. The plaintiffs asserted that violation of the contract of carriage between them and the defendants was brought about by the driver's failure to exercise the diligence required of the carrier in transporting passengers safely to their place of destination. According to Leny Tumboy, the bus left Mangagoy at 3:00 o'clock in the afternoon. The winding road it traversed was not cemented and was wet due to the rain; it was rough with crushed rocks. The bus which was full of passengers had cargoes on top. Since it was "running fast," she cautioned the driver to slow down but he merely stared at her through the mirror. At around 3:30 p.m., in Trento, she heard something explode and immediately, the bus fell into a ravine. For their part, the defendants tried to establish that the accident was due to a fortuitous event. Abundio Salce, who was the bus conductor when the incident happened, testified that the 42-seater bus was not full as there were only 32 passengers, such that he himself managed to get a seat. He added that the bus was running at a speed of "60 to 50" and that it was going slow because of the zigzag road. He affirmed

that the left front tire that exploded was a "brand new tire" that he mounted on the bus on April 21, 1988 or only five (5) days before the incident. The Yobido Liner secretary, Minerva Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20, 1988 and she was present when it was mounted on the bus by Salce. She stated that all driver applicants in Yobido Liner underwent actual driving tests before they were employed. Defendant Cresencio Yobido underwent such test and submitted his professional driver's license and clearances from the barangay, the fiscal and the police. On August 29, 1991, the lower court rendered a decision dismissing the action for lack of merit. On the issue of whether or not the tire blowout was a caso fortuito, it found that "the falling of the bus to the cliff was a result of no other outside factor than the tire blow-out." It held that the ruling in the La Mallorca and Pampanga Bus Co. v. De Jesus that a tire blowout is "a mechanical defect of the conveyance or a fault in its equipment which was easily discoverable if the bus had been subjected to a more thorough or rigid check-up before it took to the road that morning" is inapplicable to this case. It reasoned out that in said case, it was found that the blowout was caused by the established fact that the inner tube of the left front tire "was pressed between the inner circle of the left wheel and the rim which had slipped out of the wheel." In this case, however, "the cause of the explosion remains a mystery until at present." As such, the court added, the tire blowout was "a caso fortuito which is completely an extraordinary circumstance independent of the will" of the defendants who should be relieved of "whatever liability the plaintiffs may have suffered by reason of the explosion pursuant to Article 1174 of the Civil Code." 2

3

4

Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the lower court the following errors: (a) finding that the tire blowout was a caso fortuito; (b) failing to hold that the defendants did not exercise utmost and/or extraordinary diligence required of carriers under Article 1755 of the Civil Code, and (c) deciding the case contrary to the ruling in Juntilla v. Fontanar, and Necesito v. Paras. 5

6

On August 23, 1993, the Court of Appeals rendered the Decision reversing that of the lower court. It held that: 7

To Our mind, the explosion of the tire is not in itself a fortuitous event. The cause of the blow-out, if due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable event. On the other hand, there may have been adverse conditions on the road that were unforeseeable and/or inevitable, which could make the blow-out a caso fortuito. The fact that the cause of the blow-out was not known does not relieve the carrier of liability. Owing to the statutory presumption of negligence against the carrier and its obligation to exercise the utmost diligence of very

cautious persons to carry the passenger safely as far as human care and foresight can provide, it is the burden of the defendants to prove that the cause of the blow-out was a fortuitous event. It is not incumbent upon the plaintiff to prove that the cause of the blow-out is not caso-fortuito. Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge defendants' burden. As enunciated in Necesito vs. Paras, the passenger has neither choice nor control over the carrier in the selection and use of its equipment, and the good repute of the manufacturer will not necessarily relieve the carrier from liability. Moreover, there is evidence that the bus was moving fast, and the road was wet and rough. The driver could have explained that the blow-out that precipitated the accident that caused the death of Toto Tumboy could not have been prevented even if he had exercised due care to avoid the same, but he was not presented as witness.

bound absolutely and at all events to carry them safely and without injury. However, when a passenger is injured or dies while travelling, the law presumes that the common carrier is negligent. Thus, the Civil Code provides: 9

Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755. Article 1755 provides that "(a) common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances." Accordingly, in culpa contractual, once a passenger dies or is injured, the carrier is presumed to have been at fault or to have acted negligently. This disputable presumption may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed by Articles 1733, 1755 and 1756 of the Civil Code or that the death or injury of the passenger was due to a fortuitous event. Consequently, the court need not make an express finding of fault or negligence on the part of the carrier to hold it responsible for damages sought by the passenger. 10

The Court of Appeals thus disposed of the appeal as follows: WHEREFORE, the judgment of the court a quo is set aside and another one entered ordering defendants to pay plaintiffs the sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 in moral damages, and P7,000.00 for funeral and burial expenses. SO ORDERED. The defendants filed a motion for reconsideration of said decision which was denied on November 4, 1993 by the Court of Appeals. Hence, the instant petition asserting the position that the tire blowout that caused the death of Tito Tumboy was a caso fortuito. Petitioners claim further that the Court of Appeals, in ruling contrary to that of the lower court, misapprehended facts and, therefore, its findings of fact cannot be considered final which shall bind this Court. Hence, they pray that this Court review the facts of the case. The Court did re-examine the facts and evidence in this case because of the inapplicability of the established principle that the factual findings of the Court of Appeals are final and may not be reviewed on appeal by this Court. This general principle is subject to exceptions such as the one present in this case, namely, that the lower court and the Court of Appeals arrived at diverse factual findings. However, upon such re-examination, we found no reason to overturn the findings and conclusions of the Court of Appeals. 8

As a rule, when a passenger boards a common carrier, he takes the risks incidental to the mode of travel he has taken. After all, a carrier is not an insurer of the safety of its passengers and is not

11

12

In view of the foregoing, petitioners' contention that they should be exempt from liability because the tire blowout was no more than a fortuitous event that could not have been foreseen, must fail. A fortuitous event is possessed of the following characteristics: (a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent of human will; (b) 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; (c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obliger must be free from any participation in the aggravation of the injury resulting to the creditor. As Article 1174 provides, no person shall be responsible for a fortuitous event which could not be foreseen, or which, though foreseen, was inevitable. In other words, there must be an entire exclusion of human agency from the cause of injury or loss. 13

14

Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous event. There are human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode within five days' use. Be that as it may, it is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso

fortuito that would exempt the carrier from liability for damages. 15

Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. The common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident. This Court has had occasion to state: 16

While it may be true that the tire that blew-up was still good because the grooves of the tire were still visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence was presented to show that the accident was due to adverse road conditions or that precautions were taken by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden blowing-up, therefore, could have been caused by too much air pressure injected into the tire coupled by the fact that the jeepney was overloaded and speeding at the time of the accident. 17

It is interesting to note that petitioners proved through the bus conductor, Salce, that the bus was running at "60-50" kilometers per hour only or within the prescribed lawful speed limit. However, they failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the driver to slow down. These contradictory facts must, therefore, be resolved in favor of liability in view of the presumption of negligence of the carrier in the law. Coupled with this is the established condition of the road — rough, winding and wet due to the rain. It was incumbent upon the defense to establish that it took precautionary measures considering partially dangerous condition of the road. As stated above, proof that the tire was new and of good quality is not sufficient proof that it was not negligent. Petitioners should have shown that it undertook extraordinary diligence in the care of its carrier, such as conducting daily routinary check-ups of the vehicle's parts. As the late Justice J.B.L. Reyes said: It may be impracticable, as appellee argues, to require of carriers to test the strength of each and every part of its vehicles before each trip; but we are of the opinion that a due regard for the carrier's obligations toward the traveling public demands adequate periodical tests to determine the condition and strength of those vehicle portions the failure of which may endanger the safety of the passengers. 18

Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby held liable for damages. Article 1764 in relation to Article 2206 of the Civil Code prescribes the amount of at least three thousand pesos as damages for the death of a passenger. Under prevailing jurisprudence, the award of damages under Article 2206 has been increased to fifty thousand pesos (P50,000.00). 19

20

21

Moral damages are generally not recoverable in culpa contractual except when bad faith had been proven. However, the same damages may be recovered when breach of contract of carriage results in the death of a passenger, as in this case. Exemplary damages, awarded by way of example or correction for the public good when moral damages are awarded, may likewise be recovered in contractual obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner. Because petitioners failed to exercise the extraordinary diligence required of a common carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly. As such, private respondents shall be entitled to exemplary damages. 22

23

24

25

WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the modification that petitioners shall, in addition to the monetary awards therein, be liable for the award of exemplary damages in the amount of P20,000.00. Costs against petitioners. SO ORDERED.