St. Francis High School et al. vs CA, Gr No. 82465, February 25, 1991

FACTS: Ferdinand Castillo, I-C of St. Francis High School joined a picnic of 1-B and 1-C at Talaan BeachSariaya Quezon.On female teacher was apparently drowning and some students came to her rescue. Ferdinand died as a result. The parents filed complaint against the school and the teachers contending that the death of their son was due to the failure of petitioners to exercise proper diligence of a good father of the family.TC found 6 teachers liable but dismissed the case against the school, principal and one teacher.CA found school and principal liable with the teachers.

ISSUE: WON Art 2180 in relation to Art. 2176 is applicable to the case at bar

HELD: No.RATIO: Before the employer may be held liable for the negligence of his employee under Art 2180, the act or omission which caused the damage must have occurred while the employee was in the performance of his assigned task.In the case at bar, the teachers /petitioners were not in the performance of their actual task. The incident happened not within the school premisess, not on a school day and while the teachers and students were holding a purely private affair. Such picnic had no permission from the school head or the principal since it was not a school sanctioned activity. It was also not an extra-curricular activity.In addition, the negligence attributed to the teachers was not proven. The class adviser of 1-C did her best and exercised diligence of a good father of a family to prevent any untoward incident or damage to all students who joined the picnic as evidenced by:

1. inviting 2 P.E. teachers and scout masters who have knowledge first aid application andswimming.

2. life savers were especially brought by the teachers in case of emergency.

3. Both P.E. teachers did all what is humanely possible to save the child.

DISSENT: PadillaThe presumption in Art 2180 is not conclusive and should be overcome only by clear andconvincing evidence that the owner or manager exercised the care and diligence of a good father of thefamily in the selection and supervision of the employees causing the injury or damage.In this case, the principal knew of the picnic, was in fact invited, but did nothing about it. Principalshould have taken appropriate measures to ensure the safety of his students. His silence and negligencein performing his role as principal head of the school must be construed as an implied consent of theactivity.Padilla agrees with CA that no proof was presented to absolve the manager/principal.

LRTA vs Navidad et al, February 6, 2003

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, vs. MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY AGENCY, respondents.

D E C I S I O N

VITUG, J.:

The case before the Court is an appeal from the decision and resolution of the Court of Appeals, promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720, entitled “Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et. al.,” which has modified the decision of 11 August 1998 of the Regional Trial Court, Branch 266, Pasig City, exonerating Prudent Security Agency (Prudent) from liability and finding Light Rail Transit Authority (LRTA) and Rodolfo Roman liable for damages on account of the death of Nicanor Navidad.

On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a “token” (representing payment of the fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A misunderstanding or an altercation between the two apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was killed instantaneously.

On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with her children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent. Prudent, in its answer, denied liability and averred that it had exercised due diligence in the selection and supervision of its security guards.

The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned task. On 11 August 1998, the trial court rendered its decision; it adjudged:

“WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs the following:

“a) 1) Actual damages of P44,830.00;

2) Compensatory damages of P443,520.00;

3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;

“b) Moral damages of P50,000.00;

“c) Attorney’s fees of P20,000;

“d) Costs of suit.

“The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.

“The compulsory counterclaim of LRTA and Roman are likewise dismissed.”[1]

Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated its now assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and, instead, holding the LRTA and Roman jointly and severally liable thusly:

“WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants from any liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail Transit Authority (LRTA) are held liable for his death and are hereby directed to pay jointly and severally to the plaintiffs-appellees, the following amounts:

a) P44,830.00 as actual damages;

b) P50,000.00 as nominal damages;

c) P50,000.00 as moral damages;

d) P50,000.00 as indemnity for the death of the deceased; and

e) P20,000.00 as and for attorney’s fees.”[2]

The appellate court ratiocinated that while the deceased might not have then as yet boarded the train, a contract of carriage theretofore had already existed when the victim entered the place where passengers were supposed to be after paying the fare and getting the corresponding token therefor. In exempting Prudent from liability, the court stressed that there was nothing to link the security agency to the death of Navidad. It said that Navidad failed to show that Escartin inflicted fist blows upon the victim and the evidence merely established the fact of death of Navidad by reason of his having been hit by the train owned and managed by the LRTA and operated at the time by Roman. The appellate court faulted petitioners for their failure to present expert evidence to establish the fact that the application of emergency brakes could not have stopped the train.

The appellate court denied petitioners’ motion for reconsideration in its resolution of 10 October 2000.

In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz:

“I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT

“II.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.

“III.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO ROMAN IS AN EMPLOYEE OF LRTA.”[3]

Petitioners would contend that the appellate court ignored the evidence and the factual findings of the trial court by holding them liable on the basis of a sweeping conclusion that the presumption of negligence on the part of a common carrier was not overcome. Petitioners would insist that Escartin’s assault upon Navidad, which caused the latter to fall on the tracks, was an act of a stranger that could not have been foreseen or prevented. The LRTA would add that the appellate court’s conclusion on the existence of an employer-employee relationship between Roman and LRTA lacked basis because Roman himself had testified being an employee of Metro Transit and not of the LRTA.

Respondents, supporting the decision of the appellate court, contended that a contract of carriage was deemed created from the moment Navidad paid the fare at the LRT station and entered the premises of the latter, entitling Navidad to all the rights and protection under a contractual relation, and that the appellate court had correctly held LRTA and Roman liable for the death of Navidad in failing to exercise extraordinary diligence imposed upon a common carrier.

Law and jurisprudence dictate that a common carrier, both from the nature of its business and for reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety of passengers. [4] The Civil Code, governing the liability of a common carrier for death of or injury to its passengers, provides:

“Article 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 a due regard for all the circumstances.

“Article 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 in articles 1733 and 1755.”

“Article 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former’s employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

“This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees.”

“Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission.”

The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with due regard for all circumstances.[5] Such duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage.[6] The statutory provisions render a common carrier liable for death of or injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or of strangers if the common carrier’s employees through the exercise of due diligence could have prevented or stopped the act or omission.[7] In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and [8] by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure. [9] In the absence of satisfactory explanation by the carrier on how the accident occurred, which petitioners, according to the appellate court, have failed to show, the presumption would be that it has been at fault, [10]an exception from the general rule that negligence must be proved.[11]

The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim arises from the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities under the contract of carriage.

Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions of Article 2176[12] and related provisions, in conjunction with Article 2180, [13] of the Civil Code. The premise, however, for the employer’s liability is negligence or fault on the part of the employee. Once such fault is established, the employer can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection and supervision of its employees. The liability is primary and can only be negated by showing due diligence in the selection and supervision of the employee, a factual matter that has not been shown. Absent such a showing, one might ask further, how then must the liability of the common carrier, on the one hand, and an independent contractor, on the other hand, be described? It would be solidary. A contractual obligation can be breached by tort and when the same act or omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article 2194[14] of the Civil Code can well apply.[15] In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract. [16] Stated differently, when an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply.[17]

Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this Court is concluded by the factual finding of the Court of Appeals that “there is nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not been duly proven x x x.” This finding of the appellate court is not without substantial justification in our own review of the records of the case.

There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act or omission, he must also be absolved from liability. Needless to say, the contractual tie between the LRT and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be made liable only for his own fault or negligence.

The award of nominal damages in addition to actual damages is untenable. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. [18] It is an established rule that nominal damages cannot co-exist with compensatory damages.[19]

WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only in that (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No costs.

SO ORDERED.

Air France vs Carrascoso, September 28, 1966

G.R. No. L-21438             September 28, 1966

AIR FRANCE, petitioner, vs.RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.

Lichauco, Picazo and Agcaoili for petitioner.Bengzon Villegas and Zarraga for respondent R. Carrascoso. 

SANCHEZ, J.:

          The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20 representing the difference in fare between first class and tourist class for the portion of the trip Bangkok-Rome, these various amounts with interest at the legal rate, from the date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of suit.

          On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects", with costs against petitioner.

          The case is now before us for review on certiorari.

          The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:

          Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March 30, 1958.

          On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first class" seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane.3

          1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent Court of Appeals. Petitioner charges that respondent court failed to make complete findings of fact on all the issues properly laid before it. We are asked to consider facts favorable to petitioner, and then, to overturn the appellate court's decision.

          Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of record without expressing therein clearly and distinctly the facts and the law on which it is based". 5 This is echoed in the statutory demand that a judgment determining the merits of the case shall state "clearly and distinctly the facts and the law on which it is based"; 6 and that "Every decision of the Court of Appeals shall contain complete findings of fact on all issues properly raised before it". 7

          A decision with absolutely nothing to support it is a nullity. It is open to direct attack.  8 The law, however, solely insists that a decision state the "essential ultimate facts" upon which the court's conclusion is drawn.  9 A court of justice is not hidebound to write in its decision every bit and piece of evidence 10 presented by one party and the other upon the issues raised. Neither is it to be burdened with the obligation "to specify in the sentence the facts" which a party "considered as proved". 11 This is but a part of the mental process from which the Court draws the essential ultimate facts. A decision is not to be so clogged with details such that prolixity, if not confusion, may result. So long as the decision of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said court to withhold therefrom "any specific finding of facts with respect to the evidence for the defense". Because as this Court well observed, "There is no law that so requires". 12 Indeed, "the mere failure to specify (in the decision) the contentions of the appellant and the reasons for refusing to believe them is not sufficient to hold the same contrary to the requirements of the provisions of law and the Constitution". It is in this setting that in Manigque, it was held that the mere fact that the findings "were based entirely on the evidence for the prosecution without taking into consideration or even mentioning the appellant's side in the controversy as shown by his own testimony", would not vitiate the judgment. 13 If the court did not recite in the decision the testimony of each witness for, or each item of evidence presented by, the defeated party, it does not mean that the court has overlooked such testimony or such item of evidence. 14 At any rate, the legal presumptions are that official duty has been regularly performed, and that all the matters within an issue in a case were laid before the court and passed upon by it. 15

          Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written statement of the ultimate facts as found by the court ... and essential to support the decision and judgment rendered thereon".16 They consist of the court's "conclusions" with respect to the determinative facts in issue". 17 A question of law, upon the other hand, has been declared as "one which does not call for an examination of the probative value of the evidence presented by the parties." 18

          2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the Court of Appeals. 19 That judgment is conclusive as to the facts. It is not appropriately the business of this Court to alter the facts or to review the questions of fact. 20

          With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals support its judgment.

          3. Was Carrascoso entitled to the first class seat he claims?

          It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class ticket. But petitioner asserts that said ticket did not represent the true and complete intent and agreement of the parties; that said respondent knew that he did not have confirmed reservations for first class on any specific flight, although he had tourist class protection; that, accordingly, the issuance of a first class ticket was no guarantee that he would have a first class ride, but that such would depend upon the availability of first class seats.

          These are matters which petitioner has thoroughly presented and discussed in its brief before the Court of Appeals under its third assignment of error, which reads: "The trial court erred in finding that plaintiff had confirmed reservations for, and a right to, first class seats on the "definite" segments of his journey, particularly that from Saigon to Beirut". 21

          And, the Court of Appeals disposed of this contention thus:

          Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no guarantee that the passenger to whom the same had been issued, would be accommodated in the first-class compartment, for as in the case of plaintiff he had yet to make arrangements upon arrival at every station for the necessary first-class reservation. We are not impressed by such a reasoning. We cannot understand how a reputable firm like defendant airplane company could have the indiscretion to give out tickets it never meant to honor at all. It received the corresponding amount in payment of first-class tickets and yet it allowed the passenger to be at the mercy of its employees. It is more in keeping with the ordinary course of business that the company should know whether or riot the tickets it issues are to be honored or not.22

          Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus:

          On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as follows:

Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?

A. That the space is confirmed.

Q. Confirmed for first class?

A. Yes, "first class". (Transcript, p. 169)

x x x           x x x           x x x

          Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that although plaintiff paid for, and was issued a "first class" airplane ticket, the ticket was subject to confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses. Oral evidence cannot prevail over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said witnesses, and clearly show that the plaintiff was issued, and paid for, a first class ticket without any reservation whatever.

          Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the reservation for a "first class" accommodation for the plaintiff was confirmed. The court cannot believe that after such confirmation defendant had a verbal understanding with plaintiff that the "first class" ticket issued to him by defendant would be subject to confirmation in Hongkong. 23

          We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was affirmed by the Court of Appeals in all other respects. We hold the view that such a judgment of affirmance has merged the judgment of the lower court. 24 Implicit in that affirmance is a determination by the Court of Appeals that the proceeding in the Court of First Instance was free from prejudicial error and "all questions raised by the assignments of error and all questions that might have been raised are to be regarded as finally adjudicated against the appellant". So also, the judgment affirmed "must be regarded as free from all error". 25 We reached this policy construction because nothing in the decision of the Court of Appeals on this point would suggest that its findings of fact are in any way at war with those of the trial court. Nor was said affirmance by the Court of Appeals upon a ground or grounds different from those which were made the basis of the conclusions of the trial court. 26

          If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat, notwithstanding the fact that seat availability in specific flights is therein confirmed, then an air passenger is placed in the hollow of the hands of an airline. What security then can a passenger have? It will always be an easy matter for an airline aided by its employees, to strike out the very stipulations in the ticket, and say that there was a verbal agreement to the contrary. What if the passenger had a schedule to fulfill? We have long learned that, as a rule, a written document speaks a uniform language; that spoken word could be notoriously unreliable. If only to achieve stability in the relations between passenger and air carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower courts refused to believe the oral evidence intended to defeat the covenants in the ticket.

          The foregoing are the considerations which point to the conclusion that there are facts upon which the Court of Appeals predicated the finding that respondent Carrascoso had a first class ticket and was entitled to a first class seat at Bangkok, which is a stopover in the Saigon to Beirut leg of the flight. 27 We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its position", as charged by petitioner. 28 Nor do we subscribe to petitioner's accusation that respondent Carrascoso "surreptitiously took a first class seat to provoke an issue". 29 And this because, as petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat and because from Saigon I was told again to see the Manager". 30 Why, then, was

he allowed to take a first class seat in the plane at Bangkok, if he had no seat? Or, if another had a better right to the seat?

          4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that Carrascoso's action is planted upon breach of contract; that to authorize an award for moral damages there must be an averment of fraud or bad faith;31 and that the decision of the Court of Appeals fails to make a finding of bad faith. The pivotal allegations in the complaint bearing on this issue are:

3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a valuable consideration, the latter acting as general agents for and in behalf of the defendant, under which said contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff, First Class passage on defendant's plane during the entire duration of plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's return trip to Manila, ... .

4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok, defendant furnished to the plaintiff First Class accommodation but only after protestations, arguments and/or insistence were made by the plaintiff with defendant's employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff only TouristClass accommodations from Bangkok to Teheran and/or Casablanca, ... the plaintiff has been compelled by defendant's employees to leave the First Class accommodation berths at Bangkok after he was already seated.

6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments brought by defendant's breach of contract was forced to take a Pan American World Airways plane on his return trip from Madrid to Manila.32

x x x           x x x           x x x

          2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid, plaintiff suffered inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental anguish, serious anxiety, wounded feelings, social humiliation, and the like injury, resulting in moral damages in the amount of P30,000.00. 33

x x x           x x x           x x x

          The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was breached when petitioner failed to furnish first class transportation at Bangkok; and Third, that there was bad faith when petitioner's employee compelled Carrascoso to leave his first class accommodation berth "after he was already, seated" and to take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true that there is no specific mention of the term bad faith in the complaint. But, the inference of bad faith is there, it may be drawn from the facts and circumstances set forth therein. 34 The contract was averred to establish the relation between the parties. But the stress of the action is put on wrongful expulsion.

          Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in Bangkok, Carrascoso wasousted by petitioner's manager who gave his seat to a white man; 35 and (b) evidence of bad faith in the fulfillment of the contract was presented without objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to whether or not there is sufficient averment in the complaint to justify an award for moral damages. Deficiency in the complaint, if any, was cured by the evidence. An amendment thereof to conform to the evidence is not even required. 36 On the question of bad faith, the Court of Appeals declared:

          That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the defendant Air France while at Bangkok, and was transferred to the tourist class not only without his consent but against his will, has been sufficiently established by plaintiff in his testimony before the court, corroborated by the corresponding entry made by the purser of the plane in his notebook which notation reads as follows:

          "First-class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene",

          and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of the plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do so. It is noteworthy that no one on behalf of defendant ever contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to present its manager at Bangkok to testify at the trial of the case, or yet to secure his disposition; but defendant did neither. 37

          The Court of appeals further stated —

          Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him when all the seats had already been taken, surely the plaintiff should not have been picked out as the one to suffer the consequences and to be subjected to the humiliation and indignity of being ejected from his seat in the presence of others. Instead of explaining to the white man the improvidence committed by defendant's employees, the manager adopted the more drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are strengthened in our belief that this probably was what happened there, by the testimony of defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters "O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for first class. Likewise, Zenaida Faustino, another witness for defendant, who was the chief of the Reservation Office of defendant, testified as follows:

"Q How does the person in the ticket-issuing office know what reservation the passenger has arranged with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)

          In this connection, we quote with approval what the trial Judge has said on this point:

          Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to the seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not prove "any better", nay, any right on the part of the "white man" to the "First class" seat that the plaintiff was occupying and for which he paid and was issued a corresponding "first class" ticket.

          If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant could have easily proven it by having taken the testimony of the said Manager by deposition, but defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is constrained to find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat because the said Manager wanted to accommodate, using the words of the witness Ernesto G. Cuento, the "white man".38

          It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the term "bad faith". But can it be doubted that the recital of facts therein points to bad faith? The manager not only prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of having to go to the tourist class compartment - just to give way to another passenger whose right thereto has not

been established. Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is understood in law. For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with some motive of self-interest or will or for ulterior purpose." 39

          And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment of the Court of First Instance, thus:

          The evidence shows that the defendant violated its contract of transportation with plaintiff in bad faith, with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of threatening the plaintiff in the presence of many passengers to have him thrown out of the airplane to give the "first class" seat that he was occupying to, again using the words of the witness Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to accommodate, and the defendant has not proven that this "white man" had any "better right" to occupy the "first class" seat that the plaintiff was occupying, duly paid for, and for which the corresponding "first class" ticket was issued by the defendant to him.40

          5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well settled in law. 41 For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the Civil Code says:

          ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.

          In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article 2219 (10), Civil Code, moral damages are recoverable. 42

          6. A contract to transport passengers is quite different in kind and degree from any other contractual relation. 43 And this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for an action for damages.

          Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier. 44

          Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract and a tort, giving a right of action for its agent in the presence of third persons to falsely notify her that the check was worthless and demand payment under threat of ejection, though the language used was not insulting and she was not ejected." 46 And this, because, although the relation of passenger and carrier is "contractual both in origin and nature" nevertheless "the act that breaks the contract may be also a tort". 47 And in another case, "Where a passenger on a railroad train, when the conductor came to collect his fare tendered him the cash fare to a point where the train was scheduled not to stop, and told him that as soon as the train reached such point he would pay the cash fare from that point to destination, there was nothing in the conduct of the passenger which justified the conductor in using insulting language to him, as by calling him a lunatic," 48 and the Supreme Court of South Carolina there held the carrier liable for the mental suffering of said passenger.1awphîl.nèt

          Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a violation of public duty by the petitioner air carrier — a case of quasi-delict. Damages are proper.

          7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —

Q You mentioned about an attendant. Who is that attendant and purser?

A When we left already — that was already in the trip — I could not help it. So one of the flight attendants approached me and requested from me my ticket and I said, What for? and she said, "We will note that you transferred to the tourist class". I said, "Nothing of that kind. That is tantamount to accepting my transfer." And I also said, "You are not going to note anything there because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I stood up and I went to the pantry that was next to me and the purser was there. He told me, "I have recorded the incident in my notebook." He read it and translated it to me — because it was recorded in French — "First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene."

Mr. VALTE —

I move to strike out the last part of the testimony of the witness because the best evidence would be the notes. Your Honor.

COURT —

I will allow that as part of his testimony. 49

          Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook reading "First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene" is predicated upon evidence [Carrascoso's testimony above] which is incompetent. We do not think so. The subject of inquiry is not the entry, but the ouster incident. Testimony on the entry does not come within the proscription of the best evidence rule. Such testimony is admissible. 49a

          Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the startling occurrence was still fresh and continued to be felt. The excitement had not as yet died down. Statements then, in this environment, are admissible as part of the res gestae. 50 For, they grow "out of the nervous excitement and mental and physical condition of the declarant". 51 The utterance of the purser regarding his entry in the notebook was spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has been guaranteed. 52 It thus escapes the operation of the hearsay rule. It forms part of the res gestae.

          At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would have been an easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really true that no such entry was made, the deposition of the purser could have cleared up the matter.

          We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

          8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary damages — in contracts and quasi- contracts. The only condition is that defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner." 53 The manner of ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in addition to moral damages.54

          9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar judgment for attorneys' fees. The least that can be said is that the courts below felt that it is but just and equitable that attorneys' fees be given. 55 We do not intend to break faith with the tradition that discretion well exercised — as it was here — should not be disturbed.

          10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial court. 56 The Court of Appeals did not interfere with the same. The dictates of good sense suggest that we give our imprimatur thereto. Because, the facts and circumstances point to the reasonableness thereof.57

          On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We accordingly vote to affirm the same. Costs against petitioner. So ordered.

Far Eastern Shipping Company vs CA, 297 SCRA 30

NATURE

Review on certiorari the CA decision affirming TCdecision holding FESC and Gavino solidarily liable

FACTS

- On June 20, 1980, the M/V PAVLODAR, flying under the flagship of the USSR, owned and operated by the Far Eastern Shipping Company (FESC), arrived at the Port of Manila from Vancouver, British Columbia at about 7:00 o'clock in the morning. The vessel was assigned Berth 4 of the Manila International Port, as its berthing space. Captain Roberto Abellana was tasked by the Philippine Port Authority to supervise the berthing of the vessel. Appellant Senen Gavino was assigned by the Appellant Manila Pilots' Association(MPA) to conduct docking maneuvers for the safe berthing of the vessel to Berth No. 4.- Gavino boarded the vessel at the quarantine anchorage and stationed himself in the bridge, with the master of the vessel, Victor Kavankov, beside him.After a briefing of Gavino by Kavankov of the particulars of the vessel and its cargo, the vessel lifted anchor from the quarantine anchorage and proceeded to the Manila International Port. The sea was calm and the wind was ideal for docking maneuvers.- When the vessel reached the landmark (the big church by the Tondo North Harbor) one-half mile from the pier, Gavino ordered the engine stopped. When the vessel was already about 2,000 feet from the pier, Gavino ordered the anchor dropped. Kavankov relayed the orders to the crew of the vessel on the bow. The left anchor, with 2 shackles, was dropped. However,the anchor did not take hold as expected. The speed of the vessel did not slacken. A commotion ensued between the crew members. A brief conference ensued between Kavankov and the crew members. When Gavino inquired what was all the commotion about, Kavankov assured Gavino that there was nothing to it.- After Gavino noticed that the anchor did not take hold, he ordered the engines half-astern. Abellana, who was then on the pier apron noticed that the vessel was approaching the pier fast. Kavankov likewise noticed that the anchor did not take hold. Gavino thereafter gave the "full-astern" code. Before the right anchor and additional shackles could be dropped, the bow of the vessel rammed into the apron of the pier causing considerable damage to the pier. The vessel sustained damage too. Kavankov filed his sea protest. Gavino submitted his report to the Chief Pilot who referred the report to the Philippine Ports Authority. Abellana likewise submitted his report of the incident.- The rehabilitation of the damaged pier cost the Philippine Ports Authority the amount of P1,126,132.25.

PERTINENT RULES on PILOTAGE

- The Port of Manila is within the Manila Pilotage Districtwhich is under compulsory pilotage pursuant to Section8, Article III of Philippine Ports Authority Administrative Order No. 03-85:SEC. 8.

Compulsory Pilotage Service.

— For entering a harbor and anchoring thereat, or passing through rivers or straits within a pilotage district, as well as docking and undocking at any pier/wharf, or shifting from one berth or another, every vessel engaged in coastwise and foreign trade shall be under compulsory pilotage.- In case of compulsory pilotage, the respective duties and responsibilities of the compulsory pilot and the master have been specified by the same regulation:SEC. 11.

Control of vessels and liability for damage.

— On compulsory pilotage grounds, the Harbor Pilot providing the service to a vessel shall be responsible for the damage caused to a vessel or to life and property at ports due to his negligence or fault. He can only be absolved

from liability if the accident is caused by force majeure or natural calamities provided he has exercised prudence and extra diligence to prevent or minimize damage. The Master shall retain overall command of the vessel even on pilotage grounds whereby he can countermand or overrule the order or command of the Harbor Pilot on board. In such event, any damage caused to a vessel or to life and property at ports by reason of the fault or negligence of the Master shall be the responsibility and liability of the registered owner of the vessel concerned without prejudice to recourse against said MasterSuch liability of the owner or Master of the vessel or its pilots shall be determined by competent authority in appropriate proceedings in the light of the facts and circumstances of each particular case.SEC. 32.

Duties and responsibilities of the Pilot or Pilots' Association.

— The duties and responsibilities of the Harbor Pilot shall be as follows:xxx xxx xxxf) a pilot shall be held responsible for the direction of a vessel from the time he assumes his work as a pilot thereof until he leaves it anchored or berthed safely; Provided, however, that his responsibility shall cease at the moment the Master neglects or refuses to carry out his order.- Customs Administrative Order No. 15-65 issued twenty years earlier likewise provided in Chapter Ithereof for the responsibilities of pilots:Par. XXXIX. — A Pilot shall be held responsible for the direction of a vessel from the time he assumes control thereof until he leaves it anchored freefrom shoall; Provided, That his responsibility shall cease at the moment the master neglects or refuses to carry out his instructions.xxx xxx xxxPar. XLIV. — Pilots shall properly and safely secure or anchor vessels under their control when requested to do so by the master of such vessels.

ISSUE

WON both the pilot and the master were negligent

HELD

YES.- The SC started by saying that in a collision between a stationary object and a moving object, there is a presumption of guilt against the moving object based on common sense and logic). It then went on to determine who between the pilot and the master was negligent.

PILOT

- A pilot, in maritime law, is a person duly qualified, and licensed, to conduct a vessel into or out of ports, or in certain waters. He is an expert who’s supposed to know the seabed, etc. that a master of a ship may not know because the pilot is familiar with the port. He is charged to perform his duties with extraordinary care because the safety of people and property on the vessel and on the dock are at stake. - Capt. Gavino was found to be negligent. The court found that his reaction time (4 minutes) to the anchor not holding ground and the vessel still going too fast was too slow. As an expert he should’ve been reacting quickly to any such happenings.

MASTER

- In compulsory pilotage, the pilot momentarily becomes the master of the vessel. The master,however may intervene or countermand the pilot if he deems there is a danger to the vessel because of the incompetence of the pilot or if the pilot is drunk.- Based on Capt. Kavankov’s testimony, he never sensed the any danger even when the anchor didn’t hold and they were approaching the dock too fast. He blindly trusted the pilot. This is negligence on his part.He was right beside the pilot during the docking, so he could see and hear everything that the pilot was seeing and hearing.- The master’s negligence translates to unseaworthiness of the vessel, and in turn means negligence on the part of FESC.

CONCURRENT TORTFEASORS

- As a general rule, that negligence in order to render a person liable need not be the sole cause of an injury. It is sufficient that his negligence, concurring with one or more efficient causes other than plaintiff's, is the proximate cause of the injury. Accordingly, where several causes combine to produce injuries, person is not relieved from liability because he is responsible for only one of them, it being sufficient that the negligence of the person charged with injury is an efficient cause without which the injury would not have resulted to as great an extent, and that such cause is not attributable to the person injured. It is no defense to one of the concurrent tortfeasors that the injury would not have resulted from his negligence alone, without the negligence or wrongful acts of the other concurrent tortfeasor. Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be had against any or all of the responsible persons, although under the circumstances of the case, it may appear that one of them was more culpable, and that the duty owed by them to the injured person was not the same. No actor's negligence ceases to be a proximate cause merely because it does not exceed the negligence of other actors. Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury.- There is no contribution between joint tortfeasors whose liability is solitary since both of them are liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is impossible to determine in what proportion each contributed to the injury and either of them is responsible for the whole injury.Where their concurring negligence resulted in injury or damage to a third party, they become joint tortfeasorsand are solidarily liable for the resulting damage under Article 2194 of the Civil Code.

Disposition

Petition denied. CA affirmed. Capt. Gavinoand FESC are solidarily liable.

Smith Bell vs Borja, June 10, 2002

D E C I S I O N

PANGANIBAN, J.:

The owner or the person in possession and control of a vessel is liable for all natural and proximate damages caused to persons and property by reason of negligence in its management or navigation. The liability for the loss of the earning capacity of the deceased is fixed by taking into account the net income of the victim at the time of death -- of the incident in this case -- and that person’s probable life expectancy.

The Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, challenging the March 6, 2000 Decision[1] and the April 25, 2000 Resolution[2] of the Court of Appeals[3] (CA) in CA-GR CV No. 57470. The assailed Decision disposed as follows:

“WHEREFORE, premises considered, the instant appeal is hereby DENIED. The questioned decision of the lower court is hereby AFFIRMED in toto. No pronouncement as to costs.”[4]

Reconsideration was denied in the assailed Resolution.

The Facts

The facts of the case are set forth by the CA as follows:

“It appears that on September 23, 1987, Smith Bell [herein petitioner] filed a written request with the Bureau of Customs for the attendance of the latter’s inspection team on vessel M/T King Family which was due to arrive at the port of Manila on September 24, 1987.

“Said vessel contained 750 metric tons of alkyl benzene and methyl methacrylate monomer.

“On the same day, Supervising Customs Inspector Manuel Ma. D. Nalgan instructed [Respondent Catalino Borja] to board said vessel and perform his duties as inspector upon the vessel’s arrival until its departure. At that time, [Borja] was a customs inspector of the Bureau of Customs receiving a salary of P31,188.25 per annum.

"At about 11 o’clock in the morning on September 24, 1987, while M/T King Family was unloading chemicals unto two (2) barges [--] ITTC 101 and CLC-1002 [--] owned by [Respondent] ITTC, a sudden explosion occurred setting the vessels afire. Upon hearing the explosion, [Borja], who was at that time inside the cabin preparing reports, ran outside to check what happened. Again, another explosion was heard.

“Seeing the fire and fearing for his life, [Borja] hurriedly jumped over board to save himself. However, the [water] [was] likewise on fire due mainly to the spilled chemicals. Despite the tremendous heat, [Borja] swam his way for one (1) hour until he was rescued by the people living in the squatters’ area and sent to San Juan De Dios Hospital.

“After weeks of intensive care at the hospital, his attending physician diagnosed [Borja] to be permanently disabled due to the incident. [Borja] made demands against Smith Bell and ITTC for the damages caused by the explosion. However, both denied liabilities and attributed to each other negligence.”[5]

The trial court[6] (RTC) ruled in favor of Respondent Borja and held petitioner liable for damages and loss of income. The RTC disposed as follows:

“WHEREFORE, premises considered, judgment is hereby rendered ordering [Petitioner] Smith Bell Dodwell [S]hipping Agency Corporation to pay [Borja]:

1.       The amount of P495,360.00 as actual damages for loss of earning capacity:

2.       The amount of P100,000.00 for moral damages; and

3.       The amount of P50,000.00 for and as reasonable attorney’s fees.

“The cross-claim of [Petitioner] Smith Bell Dodwell Shipping Agency Corporation against co-defendant International Towage and Transport Corporation and the latter’s counterclaim against [Borja] and cross-claim with compulsory counterclaim against Smith Bell are hereby ordered dismissed.”[7]

Ruling of the Court of Appeals

Affirming the trial court, the CA rejected the plea of petitioner that it be exonerated from liability for Respondent Borja’s injuries. Contrary to the claim of petitioner that no physical evidence was shown to prove that the explosion had originated from its vessel, the CA held that the fire had originated from M/T King Family. This conclusion was amply supported by the testimonies of Borja and Eulogio Laurente (the eyewitness of International Towage and Transport Corporation or ITTC) as well as by the investigation conducted by the Special Board of Marine Inquiry and affirmed by the secretary of the Department of National Defense. On the other hand, the RTC, which the CA sustained, had not given probative value to the evidence of petitioner, whose sole eyewitness had not shown up for cross-examination.

Hence, this Petition.[8]

The Issues

In its Memorandum,[9] petitioner raises the following issues:

“1. Whether petitioner should be held liable for the injuries of Respondent Catalino Borja.

“2. Whether Respondent ITTC should be held liable for the injuries of Respondent Catalino Borja.

“3. Assuming without admitting that Respondent Catalino Borja is entitled to damages, whether Respondent Borja is entitled to the amount of damages awarded to him by the trial court.”[10]

Simply put, these issues can be summed up in these two questions: (1) Who, if any, is liable for Borja’s injuries? (2) What is the proper amount of liability?

This Court’s Ruling

The Petition is partly meritorious.

First Issue:Responsibility for Injuries

Petitioner avers that both lower courts labored under a misapprehension of the facts. It claims that the documents adduced in the RTC conclusively revealed that the explosion that caused the fire on M/T King Familyhad originated from the barge ITTC-

101, a conclusion based on three grounds. First, the Survey Report (Exh. “10”) dated October 21, 1987 submitted by the Admiral Surveyors and Adjusters, Inc., showed that no part of M/T King Family sustained any sharp or violent damage that would otherwise be observed if indeed an explosion had occurred on it. On the other hand, the fact that the vessel sustained cracks on its shell plating was noted in two Survey Reports from Greutzman Divers Underwater Specialist, dated October 6, 1987 (Exh. “11”), and during the underwater inspection on the sunken barge ITTC-101.

Second, external fire damage on the hull of M/T King Family indicated that the fire had started from outside the vessel and from ITTC-101. The port side of the vessel to which the ITTC barge was tied was completely gutted by fire, while the starboard side to which the barge CLC-1002 was tied sustained only slight fire damage.

Third, testimonial evidence proved that the explosion came from the barge of the ITTC and not from its vessel. Security Guard Vivencio Estrella testified that he had seen the sudden explosion of monomer on the barge with fire that went up to about 60 meters. Third Mate Choi Seong Hwan and Second Mate Nam Bang Choun of M/T King Family narrated that while they were discharging the chemicals, they saw and heard an explosion from the barge ITTC-101. Chief Security Guard Reynaldo Patron, in turn, testified that he was 7 to 10 meters away from the barge when he heard the explosion from the port side of M/T King Family and saw the barge already on fire.

We are not persuaded. Both the RTC and the CA ruled that the fire and the explosion had originated from petitioner’s vessel. Said the trial court:

“The attempts of [Petitioner] Smith Bell to shift the blame on x x x ITTC were all for naught. First, the testimony of its alleged eyewitness was stricken off the record for his failure to appear for cross-examination (p. 361, Record). Second, the documents offered to prove that the fire originated from barge ITTC-101 were all denied admission by the [c]ourt for being, in effect, hearsay (pp. 335 and 362). x x x Thus, there is nothing in the record to support [petitioner’s] contention that the fire and explosion originated from barge ITTC-101.”[11]

We find no cogent reason to overturn these factual findings. Nothing is more settled in jurisprudence than that this Court is bound by the factual findings of the Court of Appeals when these are supported by substantial evidence and are not under any of the exceptions in Fuentes v. Court of Appeals;[12] more so, when such findings affirm those of the trial court. [13] Verily, this Court reviews only issues of law.

Negligence is conduct that creates undue risk of harm to another. It is the failure to observe that degree of care, precaution and vigilance that the circumstances justly demand, whereby that other person suffers injury. [14] Petitioner’s vessel was carrying chemical cargo -- alkyl benzene and methyl methacrylate monomer.[15] While knowing that their vessel was carrying dangerous inflammable chemicals, its officers and crew failed to take all the necessary precautions to prevent an accident. Petitioner was, therefore, negligent.

The three elements of quasi delict are: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages inflicted on the plaintiff.[16] All these elements were established in this case. Knowing fully well that it was carrying dangerous chemicals, petitioner was negligent in not taking all the necessary precautions in transporting the cargo.

As a result of the fire and the explosion during the unloading of the chemicals from petitioner’s vessel, Respondent Borja suffered the following damage: and injuries: “(1) chemical burns of the face and arms; (2) inhalation of fumes from burning chemicals; (3) exposure to the elements [while] floating in sea water for about three (3) hours; (4) homonymous hemianopsia or blurring of the right eye [which was of] possible toxic origin; and (5) [c]erebral infract with neo-vascularization, left occipital region with right sided headache and the blurring of vision of right eye.”[17]

Hence, the owner or the person in possession and control of a vessel and the vessel are liable for all natural and proximate damage caused to persons and property by reason of negligent management or navigation.[18]

Second Issue:Amount of Liability

Petitioner insists that Borja is not entitled to the full amount of damages awarded by the lower courts. It disputes the use of his gross earning as basis for the computation of the award for loss of earning capacity. Both courts, in computing the value of such loss, used the remaining years of the victim as a government employee and the amount he had been receiving per annum at the time of the incident.

Counsel for Respondent Borja, on the other hand, claims that petitioner had no cause to complain, because the miscomputation had ironically been in its favor. The multiplier used in the computation was erroneously based on the remaining

years in government service, instead of the life expectancy, of the victim. Borja’s counsel also points out that the award was based on the former’s meager salary in 1987, or about 23 years ago when the foreign exchange was still P14 to $1. Hence, the questioned award is consistent with the primary purpose of giving what is just, moral and legally due the victim as the aggrieved party.

Both parties have a point. In determining the reasonableness of the damages awarded under Article 1764 in conjunction with Article 2206 of the Civil Code, the factors to be considered are: (1) life expectancy (considering the health of the victim and the mortality table which is deemed conclusive) and loss of earning capacity; (b) pecuniary loss, loss of support and service; and (c) moral and mental sufferings.[19] The loss of earning capacity is based mainly on the number of years remaining in the person’s expected life span. In turn, this number is the basis of the damages that shall be computed and the rate at which the loss sustained by the heirs shall be fixed.[20]

The formula for the computation of loss of earning capacity is as follows:[21]

Net earning capacity = Life expectancy x [Gross Annual Income - Living Expenses (50% of gross annual income)], where life expectancy = 2/3 (80 - the age of the deceased).[22]

Petitioner is correct in arguing that it is net income (or gross income less living expenses) which is to be used in the computation of the award for loss of income. Villa Rey Transit v. Court of Appeals[23] explained that “the amount recoverable is not the loss of the entire earning, but rather the loss of that portion of the earnings which the beneficiary would have received.” Hence, in fixing the amount of the said damages, the necessary expenses of the deceased should be deducted from his earnings.

In other words, only net earnings, not gross earnings, are to be considered; that is, the total of the earnings less expenses necessary in the creation of such earnings or income, less living and other incidental expenses. When there is no showing that the living expenses constituted a smaller percentage of the gross income, we fix the living expenses at half of the gross income. To hold that one would have used only a small part of the income, with the larger part going to the support of one’s children, would be conjectural and unreasonable.[24]

Counsel for Respondent Borja is also correct in saying that life expectancy should not be based on the retirement age of government employees, which is pegged at 65. In Negros Navigation Co, Inc. v. CA,[25] the Court resolved that in calculating the life expectancy of an individual for the purpose of determining loss of earning capacity under Article 2206(1) of the Civil Code, it is assumed that the deceased would have earned income even after retirement from a particular job.

Respondent Borja should not be situated differently just because he was a government employee. Private employees, given the retirement packages provided by their companies, usually retire earlier than government employees; yet, the life expectancy of the former is not pegged at 65 years.

Petitioner avers that Respondent Borja died nine years after the incident and, hence, his life expectancy of 80 years should yield to the reality that he was only 59 when he actually died.

We disagree. The Court uses the American Experience/Expectancy Table of Mortality or the Actuarial or Combined Experience Table of Mortality, which consistently pegs the life span of the average Filipino at 80 years, from which it extrapolates the estimated income to be earned by the deceased had he or she not been killed.[26]

Respondent Borja’s demise earlier than the estimated life span is of no moment. For purposes of determining loss of earning capacity, life expectancy remains at 80. Otherwise, the computation of loss of earning capacity will never become final, being always subject to the eventuality of the victim’s death. The computation should not change even if Borja lived beyond 80 years. Fair is fair.

Based on the foregoing discussion, the award for loss of earning capacity should be computed as follows:

Loss of earning = [2 (80-50)] x [(P2,752x12)-16,512]    capacity                 3

                               = P330,240

Having been duly proven, the moral damages and attorney’s fees awarded are justified under the Civil Code’s Article 2219, paragraph 2; and Article 2208, paragraph 11, respectively.

WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision is AFFIRMED with the following MODIFICATIONS: petitioner is ordered to pay the heirs of the victim damages in the amount ofP320,240 as loss of earning capacity, moral damages in the amount of P100,000, plus another P50,000 as attorney’s fees. Costs against petitioner.

SO ORDERED.

FGU Insurance Corp. vs GP Sarmiento, August 6, 2002

D E C I S I O NVITUG, J.:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central Luzon Appliances in Dagupan City. While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes in the sum of P204,450.00. FGU, in turn, being the subrogee of the rights and interests of Concepcion Industries, Inc., sought reimbursement of the amount it had paid to the latter from GPS. Since the trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City. In its answer, respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental.

The issues having thus been joined, FGU presented its evidence, establishing the extent of damage to the cargoes and the amount it had paid to the assured. GPS, instead of submitting its evidence, filed with leave of court a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier.

The trial court, in its order of 30 April 1996,[1] granted the motion to dismiss, explaining thusly:

“Under Section 1 of Rule 131 of the Rules of Court, it is provided that ‘Each party must prove his own affirmative allegation, xxx.’

“In the instant case, plaintiff did not present any single evidence that would prove that defendant is a common carrier.

“x x x x x x x x x

“Accordingly, the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration of goods during transport under 1735 of the Civil Code is not availing.

“Thus, the laws governing the contract between the owner of the cargo to whom the plaintiff was subrogated and the owner of the vehicle which transports the cargo are the laws on obligation and contract of the Civil Code as well as the law on quasi delicts.

“Under the law on obligation and contract, negligence or fault is not presumed. The law on quasi delict provides for some presumption of negligence but only upon the attendance of some circumstances. Thus, Article 2185 provides:

‘Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation.’

“Evidence for the plaintiff shows no proof that defendant was violating any traffic regulation. Hence, the presumption of negligence is not obtaining.

“Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendant’s driver was the one negligent, defendant cannot be made liable for the damages of the subject cargoes.”[2]

The subsequent motion for reconsideration having been denied,[3] plaintiff interposed an appeal to the Court of Appeals, contending that the trial court had erred (a) in holding that the appellee corporation was not a common carrier defined under the law and existing jurisprudence; and (b) in dismissing the complaint on a demurrer to evidence.

The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. The appellate court, in its decision of 10 June 1999, [4] discoursed, among other things, that -

"x x x in order for the presumption of negligence provided for under the law governing common carrier (Article 1735, Civil Code) to arise, the appellant must first prove that the appellee is a common carrier. Should the appellant fail to prove that the appellee is a common carrier, the presumption would not arise; consequently, the appellant would have to prove that the carrier was negligent.

"x x x x x x x x x

"Because it is the appellant who insists that the appellees can still be considered as a common carrier, despite its `limited clientele,’ (assuming it was really a common carrier), it follows that it (appellant) has the burden of proving the same. It (plaintiff-appellant) `must establish his case by a preponderance of evidence, which means that the evidence as a whole adduced by one side is superior to that of the other.’ (Summa Insurance Corporation vs. Court of Appeals, 243 SCRA 175). This, unfortunately, the appellant failed to do -- hence, the dismissal of the plaintiff’s complaint by the trial court is justified.

"x x x x x x x x x

"Based on the foregoing disquisitions and considering the circumstances that the appellee trucking corporation has been `its exclusive contractor, hauler since 1970, defendant has no choice but to comply with the directive of its principal,’ the inevitable conclusion is that the appellee is a private carrier.

"x x x x x x x x x

"x x x the lower court correctly ruled that 'the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration of good[s] during transport under [article] 1735 of the Civil Code is not availing.' x x x.

"Finally, We advert to the long established rule that conclusions and findings of fact of a trial court are entitled to great weight on appeal and should not be disturbed unless for strong and valid reasons."[5]

Petitioner's motion for reconsideration was likewise denied;[6] hence, the instant petition,[7] raising the following issues:

I

WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED UNDER THE LAW AND EXISTING JURISPRUDENCE.

II

WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.

III

WHETHER THE DOCTRINE OF RES IPSA LOQUITUR IS APPLICABLE IN THE INSTANT CASE.

On the first issue, the Court finds the conclusion of the trial court and the Court of Appeals to be amply justified. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc., rendering or offering its services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to the public,[8] whether to the public in general or to a limited clientele in particular, but never on an exclusive basis.[9] The true test of a common carrier is the carriage of passengers or goods, providing space for those who opt to avail themselves of its transportation service for a fee.[10] Given accepted standards, GPS scarcely falls within the term “common carrier.”

The above conclusion nothwithstanding, GPS cannot escape from liability.

In culpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion Industries, Inc., the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief.[11] The law, recognizing the obligatory force of contracts,[12] 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.[13] 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 promisee 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.[14] Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action.[15] 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[16] unless he can show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.

Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioner’s assured, and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. In such a situation, a default on, or failure of compliance with, the obligation – in this case, the delivery of the goods in its custody to the place of destination - gives rise to a presumption of lack of care and corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.

Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be ordered to pay petitioner. The driver, not being a party to the contract of carriage between petitioner’s principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality or their juridical position.[17] Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioner’s civil action against the driver can only be based on culpa aquiliana, which, unlike culpa contractual, would require the claimant for damages to prove negligence or fault on the part of the defendant.[18]

A word in passing. Res ipsa loquitur, a doctrine being invoked by petitioner, holds a defendant liable where the thing which caused the injury complained of is shown to be under the latter’s management and the accident is

such that, in the ordinary course of things, cannot be expected to happen if those who have its management or control use proper care. It affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from want of care.[19] It is not a rule of substantive law and, as such, it does not create an independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places on the defendant the burden of going forward with the proof.[20] Resort to the doctrine, however, may be allowed only when (a) the event is of a kind which does not ordinarily occur in the absence of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant's duty to the plaintiff.[21] Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not be responsible.[22]

Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties.[23] Nevertheless, the requirement that responsible causes other than those due to defendant’s conduct must first be eliminated, for the doctrine to apply, should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual, as previously so pointed out, immediately attaches by a failure of the covenant or its tenor. In the case of the truck driver, whose liability in a civil action is predicated on culpa acquiliana, while he admittedly can be said to have been in control and management of the vehicle which figured in the accident, it is not equally shown, however, that the accident could have been exclusively due to his negligence, a matter that can allow, forthwith, res ipsa loquitur to work against him.

If a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant shall be deemed to have waived the right to present evidence.[24] Thus, respondent corporation may no longer offer proof to establish that it has exercised due care in transporting the cargoes of the assured so as to still warrant a remand of the case to the trial court.

WHEREFORE, the order, dated 30 April 1996, of the Regional Trial Court, Branch 66, of Makati City, and the decision, dated 10 June 1999, of the Court of Appeals, are AFFIRMED only insofar as respondent Lambert M. Eroles is concerned, but said assailed order of the trial court and decision of the appellate court are REVERSED as regards G.P. Sarmiento Trucking Corporation which, instead, is hereby ordered to pay FGU Insurance Corporation the value of the damaged and lost cargoes in the amount of P204,450.00. No costs.

SO ORDERED.

Dra. Rodriguez et al vs CA, 273 SCRA 607, June 17, 1997

G.R. No. 121964 June 17, 1997

DRA. ABDULIA RODRIGUEZ, LEONOR PRIETOS, LEONORA RODRIGUEZ NOLASCO, LUZVIMINDA ANTIG and JUANITA RODRIGUEZ, petitioners, vs.COURT OF APPEALS, HARRY VILORIA, MARGARITA MILAGROS VILORIA and JOHN P. YOUNG, respondents.

DAVIDE, JR. J.:

In this petition for review under Rule 45 of the Rules of Court, petitioners seek reversal of that portion of the 14 March 1995 decision 1 of respondent Court of Appeals in CA-G.R. CV No. 36247 2 dismissing petitioners' complaint in Civil Case No. CEB-8095 of the Cebu Regional Trial Court, Branch 21. The latter was an action for damages based on quasi-delict filed by petitioners against private respondents due to a fire which allegedly started in private respondents' construction site and damaged petitioners' building.

After trial on the merits, the trial court found that the fire was not caused by an instrumentality within the exclusive control of defendants (private respondents) and rendered a decisions 3 against petitioners. The dispositive portion of the decision reads as follows:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered:

(1) Dismissing plaintiff's complaint;

(2) Condemning plaintiffs to pay defendants,

(a) Moral damages of P500,000 for defendants Vilorias, and moral damages of P200,000 for defendant John P. Young;

(b) Exemplary damages of P75,000;

(c) Attorney's fees of P30,000

(3) Ordering plaintiffs to pay, jointly and severally, the costs.

SO ORDERED. 4

Plaintiffs, herein petitioners, appealed from the judgment to respondent Court of Appeals which docketed the appeal as CA-G.R. CV No. 36247. In asking for the reversal of the judgment they imputed upon the trial court the commission of the following errors:

I

THE LOWER COURT GRAVELY ERRED IN EVALUATING THE TESTIMONY OF EYEWITNESSES.

II

THE TRIAL COURT ERRED IN NOT ADMITTING IN EVIDENCE THE FIRE INVESTIGATION REPORT DONE BY THE FIRE DEPARTMENT OFFICIAL.

III

THE TRIAL COURT ERRED IN AWARDING DAMAGES TO DEFENDANTS-APPELLEES (PRIVATE RESPONDENTS HEREIN).

IV

ASSUMING ARGUENDO THAT DEFENDANTS-APPELLEES COULD LAWFULLY PRESENT EVIDENCE ON THEIR COUNTERCLAIM, THE TRIAL COURT SERIOUSLY ERRED IN AWARDING ASTRONOMICAL DAMAGES.

V

THE TRIAL COURT ERRED IN NOT FINDING A CASE FOR DAMAGES IN FAVOR OF PLAINTIFFS (HEREIN PETITIONERS). 5

Respondent Court of Appeals summarized the antecedents in this case as follows:

On March 15, 1989, a fire broke out which razed two apartment buildings, owned by plaintiffs-appellants Abdulia Rodriguez, Leonora Rodriguez Nolasco and Juanita Rodriguez, and partially destroying a commercial building.

Plaintiffs-appellants, with co-plaintiffs-appellants Leonora Prietos and Luzviminda Antig who were lessees of the apartment units, filed a case for damages against defendants-appellees Harry John Viloriam [sic], Margarita Milagros Viloria, and John P. Young. The complaint alleged that by reason of the gross negligence and want of care of the construction workers and employees of the defendants-appellees, the bunkhouse or workers' quarters in the construction site caught fire spreading rapidly, burning the adjacent buildings owned by plaintiffs-appellants. Due to the negligence of defendants-appellees which resulted in the fire, plaintiffs-appellants suffered actual damages representing the value of the buildings and other personal properties.

Defendant-appellee John Young, the building contractor, in his answer, contended that he can not be held responsible even if there was negligence on the part of the employees for he had exercised the diligence of a good father of a family in the selection and supervision of his workers. Plaintiffs-appellants had no cause of action against him. As counterclaim, defendant-appellee Young sought for moral damages in the amount of P200,000.00, and exemplary damages of P50,000.00 and attorney's fees of P10,000.00.

Defendants-appell[ees] Harry and Margarita Viloria also alleged that plaintiffs-appellants had no cause of action against them. The fire court not have been caused by gross negligence of their workers for they did not have any worker in the construction of their building. The said construction was being undertaken by the independent contractor, John Young, who hired and supervised his own workers. The newly constructed building was partially destroyed by the fire. As counterclaim, defendants-appell[ees] prayed for moral damages in the sum of P2,500,000.00, exemplary damages of P100,000.00 and attorney's fees of P20,000.00.

After trial and reception of evidence, the court a quo resolved that the fire was not caused by an instrumentality within the exclusive control of the defendants-appellants. The decision stated that plaintiffs-appellants failed to establish that the fire was the result of defendants-appellees' or their workers' negligence. 6

Respondent Court of Appeals sustained petitioners only on the third assigned error. Its discussion on the assigned errors was as follows:

As to the first assigned error, the trial court did not err in the evaluation of the testimonies of the witnesses, specially in the testimony of applicants' witness, Noel Villarin. It seemed unbelievable that witness Villarin was able to see Paner pour gasoline on the generator through a five-inch wide hole which was four meters away from where the former was eating. As pointed out by the appellees how could Villarin see what was going on at the ground floor which is about ten or eleven feet below. No other witness had testified having seen the same. No one had even pinpointed the real source of the fire. As it is, the conclusions reached by the trial court which has the

opportunity to observe the witnesses when they testified as to what transpired [is] entitled to full respect 7 is applied. Where the issue is on the credibility of witnesses, generally the findings of a court a quo will not be disturbed on appeal. 8

As to the second assigned error stating that the report was an exception to the hearsay rule is [sic] untenable. The report was not obtained from informants who had the duty to do so. Even the reporting officer had no personal knowledge of what actually took place. Admittedly, the said report was merely hearsay as it failed to comply with the third requisite of admissibility pursuant to Sec. 35, Rule 123, to the effect that a 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. 9 To qualify the statements as "official information" acquired by the officers who prepared the reports, the persons who made the statements not only must have personal knowledge of the facts stated but must have the duty to give such statements for [the] record. 10

We find the third assigned error to be meritorious. In the absence of a wrongful act or omission or of fraud or bad faith, moral damages cannot be awarded and that the adverse result of an action does not per se make the action wrongful and subject the actor to the payment of damages for the law could not have meant to impose a penalty on the right to litigate. 11 Neither may exemplary damages be awarded where there is no evidence of the other party having acted in [a] wanton, fraudulent or reckless or oppressive manner. 12 Since the award of exemplary damages is unwarranted, the award of attorney's fees must necessarily be disallowed. 13 We find the award of damages to be without adequate evidential [sic] basis.

And more, appellants failed to establish that the proximate cause of their loss was due to defendants-appellees' negligence. Strangely however, it was not even ascertained with definiteness the actual cause or even source of the fire. In sum, appellants failed to prove that the fire which damaged their apartment buildings was due to the fault of the appellees.

Considering the foregoing premises, We find as proper the dismissal of the complaint, however, as to the damages awarded to defendants-appellees, We find no legal basis to grant the same.

In Dela Paz vs. Intermediate Appellate Court, [G.R. No. L-71537, 17 September 1987] it was held that —

The questioned decision, however, is silent as to how the court arrived at these damages. Nowhere in the decision did the trial court discuss the merit of the damages prayed for by the petitioners. There should be clear factual and legal bases for any award of considerable damages. 14

The Court of Appeals thus decreed:

ACCORDINGLY, the decision dated September 19, 1991 is hereby AFFIRMED. The award of damages in favor of defendants-appellees including the award of attorney's fees are hereby DELETED and SET ASIDE. 15

Rebuffed in their bid for reconsideration of the decision, petitioners filed the instant petition, and as grounds therefor allege that:

I

THE COURT OF APPEALS ERRED IN MISAPPLYING FACTS OF WEIGHT AND SUBSTANCE AFFECTING THE CASE AT BAR.

II

THE COURT OF APPEALS ERRED IN RULING THAT THE FIRE INVESTIGATION REPORT IS INADMISSIBLE IN EVIDENCE.

III

THE COURT OF APPEALS ERRED IN RULING THAT SECTION 44, RULE 130 OF THE RULES OF COURT IS NOT APPLICABLE TO THE CASE AT BAR.

After private respondents filed their respective comments to the petition as required, we resolved to give due course to the petition and required the parties to submit their respective memoranda, which they subsequently did.

Under the first assigned error petitioners want us to give full credit to the testimony of Noel Villarin, their principal witness, who, they claimed, "maintained his straight-forward and undisguised manner of answering the questions" despite the "intense cross-examination." The trial court, however, refused to believe Villarin, not only because he had an ulterior motive to testify against private respondent Young, for which reason the trial court observed:

It may be worth recalling that principal and lone plaintiff's witness Noel Villarin did testify that only during the hearing did he tell his story about the fire because all his tools were burned, and John Young neither had replenish [sic] those tools with sympathy on [sic] him nor had visited him in the hospital (supra, p. 4). The Court, observing Villarin, could only sense the spitful tone in his voice, manifesting released pent-up'ill-will against defendant Young. 16

but more importantly, because the trial court found that "defendants" witnesses have belied Villarin's word," thus:

"Talino" Reville told the Court that it was impossible to see the generator when one was upstairs of the bunkhouse — "it could not be seen because it was under the floor of the bunkhouse; it was not possible for Villarin to see it." He was with Villarin eating their supper then, and they were "already through eating but we were still sitting down" and so, how could Villarin have "peeped" through that "hole on the wall" high above them? All defendants's [sic] witnesses testified that the generator never caught fire, and no one at all had heard any explosion anywhere before the fire was discerned. Exhibit 1 (a photograph of the fire while it was raging) reveals that the bunkhouse was intact.

And Paner — who, said Villarin, brought the gasoline which caught fire from a stove as it was poured by Villarin to [sic] the generator — was neither impleaded as another defendant nor called as a witness, or charged as an accused in a criminal action. Which omission also strikes the Court as strange. Such suppression of evidence gives rise to the presumption that if presented Paner would prove to be adverse to the plaintiffs (by analogy: People v. Camalog, G.R. 77116, 31 January 1989). 17

The trial court explained why it had to accept the version of defendants' witnesses in this wise:

The Court needs [sic] not suffer a paralysis of analysis as it compares the two conflicting claims. Plaintiffs have relied so much on their own assessment of the integrity and weight of Villarin's testimony. But the court has found the same to be, under close scrutiny, not only less weighty but also a piece of evidence that taxes belief. Villarin said he saw Paner pour the gasoline, this while he and three other fellow-workers were sitting on the second floor of the bunkhouse and eating their supper, and Villarin elaborated by adding that he saw Paner doing this through a hole on the wall. What wall? Paner said the hole on the wall was at least four (4) meters from the floor of the bunkhouse on which they were eating, and he could "peep" through that hole which was higher than by more than double his height! And he did not reveal all this to the firemen who investigated him. The credibility of the witness may be affected where he tends to exaggerate, or displays propensity for needlessly detailed observation (People v. Wong, 23 SCRA 146). 18

One of the highly revered dicta in our jurisprudence is that this Court will not interfere with the judgment of the trial court in passing on the credibility of opposing witnesses unless there appears in the record some facts or circumstances of weight and influence which have been overlooked, which, if considered, could affect the result of the case. The reason therefor is founded on practical and empirical considerations. The trial judge is in a better position to decide the question of credibility since he personally heard the witnesses and observed their

deportment and manner of testifying. 19 Petitioners have offered no convincing arguments to accommodate their case within the exception; they did not even dare to refute the above observations and findings of the trial court.

The second and third assigned error are interrelated, involving the application of Section 44 of Rule 130, which reads as follows:

Sec. 44. Entries in official records. — Entries in official records 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 facie evidence of the facts therein stated. 20

Petitioners assert that the Fire Investigation Report 21 by an official of the Cebu City Fire Station should have been admitted in evidence as an exception to the hearsay rule. The trial and appellate courts rejected this applying Africa v. Caltex (Phil.) Inc., 22 wherein this Court laid down the three requisites for admissibility under the aforesaid section, viz.:

(1) that the entry was made by a police officer, or by another person especially enjoined by law to do so;

(2) that it was made by the police officer in the performance of his duties, or by such other person in the performance of a duty especially enjoined by law; and

(3) 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. 23

Elaborating on the third requisite, this Court further stated that for the statements acquired by the public officer under the third requisite to qualify as "official information," it is necessary that the persons who gave the statements "not only must have personal knowledge of the facts stated but must have the duty to give such statements for record." 24

The Court of Appeals ruled here that the reporting officer who prepared the Fire Investigation Report "had no personal knowledge of what actually took place;" besides, the information he received did not qualify as "official information" since those who gave the statements to the reporting officer had no personal knowledge of the facts stated and no duty to give such statements for the record.

Some confusion surrounds the issue of admissibility of the Fire Investigation Report (Exhibits "A," "A-1" to "A-4" inclusive). The record discloses that the officer who signed the report, Fire Major Eduardo P. Enriquez, was subpoenaed at the request of and testified in open court for petitioners. He identified the Report, which petitioners offered in their Offer of Exhibits 25 as:

(1) Part of the testimony of Major Eduardo P. Enriquez;

(2) To prove that an impartial investigation has determined that the "fire started at the generator . . . within the construction site" (Exhibit "A-3").

Private respondents objected to Exhibits "A," "A-1" to "A-4," inclusive, for being "hearsay and incompetent evidence." 26 The trial court then denied their admission "for being hearsay, this fact admitted by witness himself, F/Maj. Eduardo Enriquez, as part of whose testimony said exhibits were offered." 27

In light of the purposes for which the exhibits in question were offered, as aforestated, the trial court erred in rejecting all of them as hearsay. 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, 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. 28

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. 29

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 their 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 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 130 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.

What appears to us to be the underlying purpose of petitioners in soliciting affirmance of their thesis that the Report of Major Enriquez should be admitted as an exception to the hearsay rule, is to shift the burden of evidence to private respondents under the doctrine of res ipsa loquitur in negligence cases. They claim, as stated in their offer of Exhibits, that "the fire started at the generator. . . within the construction site." This quotation is based on the penultimate paragraph of page 4 of the Report of Major Enriquez and is obviously misleading as there is nothing in said paragraph that unequivocally asserts that the generator was located within the construction site. The paragraph reads:

After analyzing the evidences [sic] and the circumstances underlying the situation, one can easily came [sic] to the conclusion that the fire started at the generator and extended to the bunkhouse and spread among the combustible stored materials within the construction site. Among the combustible materials were the plastic (PVC) pipes and plywoods [sic].

Clearly, the phrase within the construction site could only refer to the immediately preceding term "combustible stored materials."

The trial court itself concluded that the fire could not have started at the generator and that the bunkhouse was not burned, thus:

All the defendants's witness testified that the generator never caught fire, and no one at all had heard any explosion anywhere before the fire was discerned. Exhibit 1 (a photograph of the fire while it was raging reveals that the bunkhouse was intact. 30 (emphasis supplied)

It then declared that "the fire was not caused by an instrumentality within the exclusive control of defendants," 31 which is one of the requisites for the application of the doctrine of res ipsa loquitur in the law of negligence. 32 It may further be emphasized that this doctrine is not intended to and does not dispense with the requirement of proof of culpable negligence on the party charged. It merely determines and regulates what shall be prima facie evidence thereof and facilitates the burden of plaintiff of proving a breach of the duty of due care. The doctrine can be invoked when and only when, under the circumstances involved, direct evidence is absent or not readily available. 33

More damaging to petitioners, which could have been enough reason for them to desist from insisting that the Report of Major Enriquez be admitted as an exception to the hearsay rule, are the officer's conclusion and recommendation in his report, viz.:

V. CONCLUSION:

From the foregoing facts and all other evidences [sic] on hand, the investigator discerned that the cause of the fire was ACCIDENTAL in nature.

VI. RECOMMENDATION:

It is hereby recommended that the investigation of the case shall be closed.

Obviously then, the second and third assigned errors are likewise without merit.

IN VIEW OF THE FOREGOING, the instant petition is DENIED and the challenged decision of respondent Court of Appeals in CA-G.R CV No. 36247 is AFFIRMED in toto.

Cost against petitioners.

SO ORDERED.

Laguyan vs IAC 167 SCRA 363

Far Eastern Bank and Trust Co. vs CA, 240 SCRA 348