Republic of the PhilippinesSUPREME COURT

ManilaEN BANC

G.R. No. L-40486 August 29, 1975PAULINO PADUA and LUCENA BEBIN PADUA, plaintiffs-appellants,

vs.GREGORIO N. ROBLES and BAY TAXI CAB, defendants-appellees.

Alberto R. de Joya for plaintiffs-appellants.Cardenas & Peralta Law Office for defendants-appellees.

CASTRO, J.:

Resolving this appeal by the spouses Paulino and Lucena Bebin Padua, we set aside the order dated October 25, 1972 of the Court of First Instance of Zambales dismissing their complaint, in civil case 1079-O, and remand this case for further proceedings.

In the early morning of New Year's Day of 1969 a taxicab (bearing 1968 plate no. TX-9395 and driven by Romeo N. Punzalan but operated by the Bay Taxi Cab owned by Gregorio N. Robles) struck ten-year old Normandy Padua on the national road in barrio Barretto, Olongapo City. The impact hurled Normandy about forty meters away from the point where the taxicab struck him, as a result of which he died.

Subsequently, Normandy's parents (Paulino and Lucena Bebin Padua), by complaint filed with the Court of First Instance of Zambales (civil case 427-O), sought damages from Punzalan and the Bay Taxi Cab; likewise, the city Fiscal of Olongapo, by information filed with the same court (criminal case 1158-O), charged Punzalan with homicide through reckless imprudence.On October 27, 1969 the court a quo, in civil case 427-O, adjudged for the Paduas as follows:

WHEREFORE, judgment is hereby rendered ordering the defendant Romeo Punzalan to pay the plaintiffs the sums of P12,000.00 as actual damages, P5,000.00 as moral and exemplary damages, and P10,000.00 as attorney's fees; and dismissing the complaint insofar as the Bay Taxicab Company is concerned. With costs against the defendant Romeo Punzalan. (Emphasis supplied)

Almost a year later, on October 5, 1970, the court a quo, in criminal case 1158-O, convicted Punzalan, as follows:

WHEREFORE, the Court finds the accused Romeo Punzalan y Narciso guilty beyond reasonable doubt of the crime of homicide through reckless imprudence, as defined and penalized under Article 365 of the Revised Penal Code, attended by the mitigating circumstance of voluntary surrender, and hereby sentences him to suffer the indeterminate penalty of TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY of prision correccional, as minimum, to SIX (6) YEARS and ONE (1) DAY of prision mayor, as maximum, and to pay the cost. The civil liability of the accused has already been determined and assessed in Civil Case No. 427-O, entitled Paulino Padua, et al. vs. Romeo Punzalan, et al.' (Emphasis supplied)

After the judgment in civil case 427-O became final, the Paduas sought execution thereof. This proved futile; the corresponding court officer returned the writ of execution unsatisfied.Unable to collect the amount of P27,000 awarded in their favor, the Paduas instituted action in the same court against Gregorio N. Robles to enforce the latter's subsidiary responsibility under the provisions of article 103 of the Revised Penal Code. Robles filed a motion to dismiss based on (1) bar of the cause of action by a prior judgment and (2) failure of the complaint to state a cause of action.

Thereafter, the court a quo, in an order dated October 25, 1972, granted Robles' motion to dismiss on the ground that the Paduas' complaint states no cause of action. This order the Paduas questioned in the Court of Appeals which, by resolution dated March 5, 1975, certified the case to this Court for the reason that the appeal involves only questions of law.The Paduas predicate their appeal on eighteen errors allegedly committed by the court a quo. These assigned errors, however, raise only one substantial issue: whether the judgment dated October 5, 1970 in criminal case 1158-O includes a determination and adjudication of Punzalan's civil liability arising from his criminal act upon which Robles' subsidiary civil responsibility may be based.The sufficiency and efficacy of a judgment must be tested by its substance rather than its form. In construing a judgment, its legal effects including such effects that necessarily follow because of legal implications, rather than the language used govern. Also, its meaning, operation, and consequences must be ascertained like any other written instrument. Thus, a judgment rests on the intention of the court as gathered from every part thereof, including the situation to which it applies and the attendant circumstances.

It would appear that a plain reading, on its face, of the judgment in criminal case 1158-O, particularly its decretal portion, easily results in the same conclusion reached by the court a quo: that the said judgment no civil liability arising from the offense charged against Punzalan. However, a

careful study of the judgment in question, the situation to which it applies, and the attendant circumstances, would yield the conclusion that the court a quo, on the contrary, recognized the enforceable right of the Paduas to the civil liability arising from the offense committed by Punzalan and awarded the corresponding indemnity therefor.

Civil liability coexists with criminal responsibility. In negligence cases the offended party (or his heirs) has the option between an action for enforcement of civil liability based on culpa criminal under article 100 of the Revised Penal Code and an action for recovery of damages based on culpa aquiliana under article 2177 of the Civil Code. The action for enforcement of civil liability based on culpa criminal section 1 of Rule 111 of the Rules of Court deems simultaneously instituted with the criminal action, unless expressly waived or reserved for a separate application by the offended party. Article 2177 of the Civil Code, however, precludes recovery of damages twice for the same negligent act or omission.

In the case at bar, the Court finds it immaterial that the Paduas chose, in the first instance, an action for recovery of damages based on culpa aquiliana under articles 2176, 2177, and 2180 of the Civil Code, which action proved ineffectual. The Court also takes note of the absence of any inconsistency between the aforementioned action priorly availed of by the Paduas and their subsequent application for enforcement of civil liability arising from the offense committed by Punzalan and consequently, for exaction of Robles' subsidiary responsibility. Allowance of the latter application involves no violation of the proscription against double recovery of damages for the same negligent act or omission. For, as hereinbefore stated, the corresponding officer of the court a quo returned unsatisfied the writ of execution issued against Punzalan to satisfy the amount of indemnity awarded to the Paduas in civil case 427-O. Article 2177 of the Civil Code forbids actual double recovery of damages for the same negligent act or omission. Finally, the Court notes that the same judge * tried, heard, and determined both civil case 427-O and criminal case 115-O. Knowledge of an familiarity with all the facts and circumstances relevant and relative to the civil liability of Punzalan may thus be readily attributed to the judge when he rendered judgment in the criminal action.

In view of the above considerations, it cannot reasonably be contended that the court a quo intended, in its judgment in criminal case 1158-O, to omit recognition of the right of the Paduas to the civil liability arising from the offense of which Punzalan was adjudged guilty and the corollary award of the corresponding indemnity therefor. Surely, it cannot be said that the court intended the statement in the decretal portion of the judgment in criminal case 1158-O referring to the determination and assessment of Punzalan's civil liability in civil case 427-O to be pure jargon or "gobbledygook" and to be absolutely of no meaning and effect whatever.

The substance of such statement, taken in the light of the situation to which it applies and the attendant circumstances, makes unmistakably clear the intention of the court to accord affirmation to the Paduas' right to the civil liability arising from the judgment against Punzalan in criminal case 1158-O. Indeed, by including such statement in the decretal portion of the said judgment, the court intended to adopt the same adjudication and award it made in civil case 427-O as Punzalan's civil liability in criminal case 1158-O.

There is indeed much to be desired in the formulation by Judge Amores of that part of the decretal portion of the judgment in criminal case 1158-O referring to the civil liability of Punzalan resulting from his criminal conviction. The judge could have been forthright and direct instead of circuitous and ambiguous. But, as we have explained, the statement on the civil liability of Punzalan must surely have a meaning and even if the statement were reasonably susceptible of two or more interpretations, that which achieves moral justice should be adopted, eschewing the other interpretations which in effect would negate moral justice.

It is not amiss at this juncture to emphasize to all magistrates in all levels of the judicial hierarchy that extreme degree of care should be exercise in the formulation of the dispositive portion of a decision, because it is this portion that is to be executed once the decision becomes final. The adjudication of the rights and obligations of the parties, and the dispositions made as well as the directions and instructions given by the court in the premises in conformity with the body of the decision, must all be spelled out clearly, distinctly and unequivocally, leaving absolutely no room for dispute, debate or interpretation.

We therefore hold that the Paduas' complaint in civil case 1079-O states a cause of action against Robles whose concommitant subsidiary responsibility, per the judgment in criminal case 1158-O, subsists.

ACCORDINGLY, the order a quo dated October 25, 1972 dismissing the complaint in civil case 1079-O is set aside, and this case is hereby remanded to the court a quo for further proceedings conformably with this decision and with law. No pronouncement as to costs.

Republic of the PhilippinesSupreme Court

Manila  

THIRD DIVISION 

 SPOUSES BENITO LO BUNTIONG and CAROLINESIOK CHING TENG, Petitioners, 

   - versus -   VICENTE BALBOA, Respondent.

G.R. No. 158177  Present:  YNARES-SANTIAGO, J. Chairperson AUSTRIA-MARTINEZ, CORONA,*

NACHURA, and REYES, JJ.  Promulgated: January 28, 2008

x -------------------------------------------------------------------------------- x  DECISION  AUSTRIA-MARTINEZ, J.:  

The spouses Benito Lo Bun Tiong and Caroline Siok Ching Teng (petitioners) charge Vicente Balboa (respondent) with forum shopping. 

On February 24, 1997, respondent filed with the Regional Trial Court (RTC) of Manila (Branch 34), Civil Case No. 97-82225 for Collection of Sum of Money against petitioners. The amount sought covers three post-dated checks issued by petitioner Caroline Siok Ching Teng (Caroline), as follows: Asia Trust Check No. BNDO57546 dated December 30, 1996 for P2,000,000.00; Asia Trust Check No. BNDO57547 dated January 15, 1997 for P1,200,000.00; and Asia Trust Check No. BNDO57548 dated January 31, 1997 for P1,975,250.00 – or a total of P5,175,250.00.1[1]  

On July 21, 1997, separate criminal complaints for violation of Batas Pambansa Blg. 22 (B.P. No. 22) were filed against Caroline before the Municipal Trial Court (MTC) of Manila (Branch 10), covering the said three checks. These cases were docketed as Criminal Case Nos. 277576 to 78.2

[2] 

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On August 11, 1998, the RTC rendered its Decision in Civil Case No. 97-82225 finding petitioners liable, as follows: 

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants ordering the latter: 

1. To play the plaintiff the sum of P5,175,250.00 plus 6% interest per annum until full payment;

 2. To pay the plaintiff the sum of P100,000.00 as and for

attorney's fees. 3. To pay the cost of suit. 

The counterclaim is hereby dismissed for lack of merit. 

SO ORDERED.3[3] 

Thereafter, in a Decision dated December 5, 2001 rendered in Criminal Case Nos. 277576 to 78, the MTC acquitted Caroline of the offenses charged for failure of the prosecution to prove her guilt beyond reasonable doubt. The MTC, however, found Caroline civilly liable in favor of respondent for the amounts covered by these checks, to wit:

WHEREFORE, accused Caroline Siok Ching Teng is acquitted of the charge for violation of BP Blg. 22 for failure of the prosecution to prove her guilt beyond reasonable doubt. The accused is ordered civilly liable to the offended party for the amounts of the checks subject of the three informations herein, i.e., P1,200,000.00, P1,975,250.00 and P2,000,000.00. 

SO ORDERED.4[4] 

Petitioner sought partial reconsideration of the MTC Decision praying for the deletion of the award of civil indemnity, but it was denied by the MTC per Order dated April 12, 2002. Thus, Caroline appealed to the RTC, which docketed the case as Criminal Case Nos. 02-204544-46. 

In the meantime, petitioners brought to the Court of Appeals (CA) on appeal the RTC Decision in Civil Case No. 97-82225, docketed as CA-G.R. CV No. 61457. In the assailed Decision dated November 20, 2002, the CA5[5] dismissed the appeal for lack of merit and affirmed the RTC Decision in toto. The dispositive portion of the assailed CA Decision reads:

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 WHEREFORE, in view of the foregoing and finding no reversible error

in the appealed Decision dated August 11, 1998 of Branch 34 of the Regional Trial Court of Manila in Civil Case No. 97-82225, the instant appeal is DISMISSED for lack of merit, and said Decision is affirmed in toto. 

SO ORDERED.6[6] 

Petitioners moved for reconsideration of the CA Decision, but this was denied per Resolution dated April 21, 2003.7[7] 

On May 8, 2003, the RTC as an appellate court, rendered its Decision in Criminal Case No. 02-204544-46, modifying the MTC Decision by deleting the award of civil damages.8[8]  

Now before the Court for resolution is the Amended Petition filed under Rule 45 of the Rules of Court, questioning the CA Decision dated November 20, 2002 and Resolution dated April 21, 2003, on the lone ground that: PUBLIC RESPONDENT COURT OF APPEALS ACTED WITHOUT JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION IN ALLOWING PRIVATE RESPONDENT TO RECOVER TWICE FOR THE SAME OBLIGATION ON ACCOUNT OF THE SAID PRIVATE RESPONDENT'S DELIBERATE FAILURE AND REFUSAL TO INFORM THE REGIONAL TRIAL COURT THAT THE CIVIL OBLIGATION BEING SUED UPON IS THE SUBJECT OF CRIMINAL COMPLAINTS WITH THE METROPOLITAN TRIAL COURT, AND FOR WHICH THE CIVIL OBLIGATION WAS SUBSEQUENTLY ADJUDGED.9[9] 

Petitioners contend that the assailed CA Decision and Resolution should be reconsidered and the RTC Decision dated August 11, 1998 dismissed as respondent's act of filing Civil Case No. 97-82225 and Criminal Cases Nos. 277576 to 78 constitutes forum shopping. 

Forum shopping is the institution of two or more actions or proceedings grounded on the same cause, on the supposition that one or the other court would render a favorable disposition. It is usually resorted to by a party against whom an adverse judgment or order has been issued in one

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forum, in an attempt to seek and possibly to get a favorable opinion in another forum, other than by an appeal or a special civil action for certiorari.10[10] 

There is forum shopping when the following elements concur: (1) identity of the parties or, at least, of the parties who represent the same interest in both actions; (2) identity of the rights asserted and relief prayed for, as the latter is founded on the same set of facts; and (3) identity of the two preceding particulars, such that any judgment rendered in the other action will amount to res judicata in the action under consideration or will constitute litis pendentia.11[11] 

In Hyatt Industrial Manufacturing Corp. v. Asia Dynamic Electrix Corp.,12[12] the Court ruled that there is identity of parties and causes of action between a civil case for the recovery of sum of money as a result of the issuance of bouncing checks, and a criminal case for the prosecution of a B.P. No. 22 violation. Thus, it ordered the dismissal of the civil action so as to prevent double payment of the claim. The Court stated: 

x x x The prime purpose of the criminal action is to punish the offender to deter him and others from committing the same or similar offense, to isolate him from society, reform or rehabilitate him or, in general, to maintain social order. The purpose, meanwhile, of the civil action is for the restitution, reparation or indemnification of the private offended party for the damage or injury he sustained by reason of the delictual or felonious act of the accused. Hence, the relief sought in the civil aspect of I.S. No. 00-01-00304 and I.S. No. 00-01-00300 is the same as that sought in Civil Case No. MC 01-1493, that is, the recovery of the amount of the checks, which, according to petitioner, represents the amount to be paid by respondent for its purchases. x x x 

This was reiterated in Silangan Textile Manufacturing Corp. v. Demetria,13[13] where the civil case for the recovery of the amount covered by the bouncing checks was also ordered dismissed.  

In Hyatt and Silangan, the Court applied Supreme Court Circular No. 57-97 effective September 16, 1997, which provides:

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1. The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to necessarily include the corresponding civil action, and no reservation to file such action separately shall be allowed or recognized. 

This was later adopted as Rule 111(b) of the 2000 Revised Rules of Criminal Procedure, to wit: 

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed. 

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay the filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment.

 Where the civil action has been filed separately and trial

thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal actions.

 The foregoing, however, are not applicable to the present case. It is

worth noting that Civil Case No. 97-82225 was filed on February 24, 1997, and Criminal Cases Nos. 277576 to 78 on July 21, 1997, prior to the adoption of Supreme Court Circular No. 57-97 on September 16, 1997. Thus, at the time of filing of Civil Case No. 97-82225 and Criminal Cases Nos. 277576 to 78, the governing rule is Section 1, Rule 111 of the 1985 Rules of Court, to wit: 

SEC. 1. Institution of criminal and civil actions. – When a criminal action is instituted, the civil action for the recovery of civil liability is impliedly instituted with the criminal action, unless the offended party waives the civil action, reserves his right to institute it separately, or institutes the civil action prior to the criminal action . 

Such civil action includes the recovery of indemnity under the Revised Penal Code, and damages under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines arising from the same act or omission of the accused.

 x x x x (Emphasis supplied)

 Under the foregoing rule, an action for the recovery of civil liability

arising from an offense charged is necessarily included in the criminal proceedings, unless (1) there is an express waiver of the civil action, or (2) there is a reservation to institute a separate one, or (3) the civil action was filed prior to the criminal complaint.14[14] Since respondent instituted the civil action prior to the criminal action, then Civil Case No. 97-82225 may proceed independently of Criminal Cases Nos. 277576 to 78, and there is no forum shopping to speak of. 

Even under the amended rules, a separate proceeding for the recovery of civil liability in cases of violations of B.P. No. 22 is allowed when the civil case is filed ahead of the criminal case. Thus, in the Hyatt case, the Court noted, viz.: 

x x x This rule [Rule 111(b) of the 2000 Revised Rules of Criminal Procedure ] was enacted to help declog court dockets which are filled with B.P. 22 cases as creditors actually use the courts as collectors. Because ordinarily no filing fee is charged in criminal cases for actual damages, the payee uses the intimidating effect of a criminal charge to collect his credit gratis and sometimes, upon being paid, the trial court is not even informed thereof. The inclusion of the civil action in the criminal case is expected to significantly lower the number of cases filed before the courts for collection based on dishonored checks. It is also expected to expedite the disposition of these cases. Instead of instituting two separate cases, one for criminal and another for civil, only a single suit shall be filed and tried. It should be stressed that the policy laid down by the Rules is to discourage the separate filing of the civil action. The Rules even prohibit the reservation of a separate civil action, which means that one can no longer file a separate civil case after the criminal complaint is filed in court. The only instance when separate proceedings are allowed is when the civil action is filed ahead of the criminal case. Even then, the Rules encourage the consolidation of the civil and criminal cases. We have previously observed that a separate civil action for the purpose of recovering the amount of the dishonored checks would only prove to be costly, burdensome and time-consuming for both parties and would further delay the final disposition of the case. This multiplicity of suits must be avoided. Where petitioners’ rights may be fully adjudicated in the proceedings before the trial court, resort to a separate action to recover civil liability is clearly unwarranted. (Emphasis supplied) 

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Moreover, the RTC, in its Decision in Criminal Case Nos. 02-204544-46, already deleted the award of civil damages. Records do not disclose that appeal had been taken therefrom. There is, therefore, no double recovery of the amounts covered by the checks or unjust enrichment on the part of respondent. 

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated November 20, 2002 and Resolution dated April 21, 2003 of the Court of Appeals are AFFIRMED. 

Costs against petitioners. 

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

ManilaEN BANC

G.R. No. L-37044             March 29, 1933CONSOLACION JUNIO, plaintiff-appellant,

vs.THE MANILA RAILROAD COMPANY, defendant-appellee.

-----------------------------G.R. No. L-37045             March 29, 1933

BEATRIZ SOLORIA, plaintiff-appellant, vs.

THE MANILA RAILROAD COMPANY, defendant-appellee.R. Monserrat for appellant.Jose C. Abreu for appellee.

IMPERIAL, J.:

Consolacion Junio, a young woman 22 years of age, and Beatriz Soloria, another young woman of 18 years, represented by her father, Faustino Soloria, who was appointed her guardian ad litem, brought these actions in the Court of First Instance of Pangasinan to recover from the defendant, Manila Railroad Company, damages suffered by them in an accident that occurred at the railroad crossing situated at the outskirts of the town of Calasiao, Pangasinan, when the automobile in which they were passengers collided with a locomotive belonging to the aforementioned defendant. This is an appeal taken by them from the judgment rendered by the trial court absolving the defendant, without costs.

The two cases were tried jointly and only one decision was rendered for both cases.

The trial court summarizes the fact established by the evidence as follows:

At about 11:40 o'clock on the night of April 13, 1930, the plaintiffs herein with some other persons were traveling in a PU-Car on the road between Calasiao and Santa Barbara. When they arrived at the intersection of the road of the defendant's railway, the car tried to cross the track and collided while the engine of the night express which left Dagupan for Manila at 11 o'clock that same night and which was then passing over the crossing in question at great speed. As a result of the collision, the car was thrown some distance, plaintiff Junio's right leg was amputated and her right arm fractured, and Soloria received various injuries on her head.

The aforementioned crossing is situated in the town of Calasiao and the same is presumed to be dangerous due to the fact that gates were required at that crossing. (Section 83, Act No. 1459, as amended by Act No. 2100.) On the night of the accident, the gates were not lowered and there was no notice to the effect that they were not operated at night or that they were temporarily out of order. However, a notice to the effect that that was a railroad crossing was there.

As a general rule, the rights and obligations between the public and a railroad company at a public crossing are mutual and reciprocal. Both are under mutual obligation to exercise due care to avoid causing or

receiving injury. Each is in duty bound to exercise reasonable or ordinary care commensurate with the risk and danger involved.In the case under consideration, the driver alleges that he slowed down from 19 miles an hour, at which rate he was then going, to 16 miles, and that he was on the lookout for any approaching train, while the engineer insists that he rang the bell and sounded the whistle before reaching the crossing. Both parties claim to be free from guilt, and if the defendant company were completely so, the plaintiffs would have no cause of action against it.

In addition to the facts mentioned above, it has also been proved that the gate in question was about three hundred (300) meters from the railroad station at Calasiao; that on each side of the crossing there was a wooden bar operated only during the daytime by a woman employee of defendant, and that just before the crossing on one side, of the road leading from the town of Calasiao there was a signpost bearing the notice, "RAILROAD CROSSING", written crosswise.

The evidence also show that the car driven by the chauffeur, Pedro Talbo, was an old Ford bearing number plates. PU-3636, which meant that it was a hired car. The plate, Exhibit 2, was found by the engineer on the side of the engine upon arrival at Paniqui, the next station, which indicates that it was torn from the front of the radiator when the auto collided with the right side of the engine of the night express.

The appellants were passengers who took the car in Bayambang and were bound for Asingan, via Dagupan.

The plaintiffs' attorney assigns in his brief the following alleged errors:First. The trial court erred in finding that the defendant company was not negligent in leaving its gates open at the moment of the accident when a special night express train was passing.Second. The trial court erred in holding that the driver of the car occupied by the plaintiffs was negligent.Third. The trial court erred in holding that the plaintiffs were negligent or in making them responsible for the driver's alleged negligence.Fourth. The trial court erred in holding that the main question in the accident was the driver's alleged negligence.Fifth. The trial court erred in absolving the defendant instead of ordering it to pay the damages proven which are the subject of these actions.

From the evidence, it is obvious that the defendant as well as the driver of the car in which the plaintiffs were passengers were negligent, the former because, by installing the gates at the place or crossing where the accident

occurred, it had voluntarily imposed upon itself the obligation to operate them even at night and to close them every time a train passed in order to avoid causing injury to the public. It has been said that the gates constitute an invitation to the public to pass without fear of danger, and failure to operate them conveniently constitutes negligence on the part of the company.

The driver was, likewise, negligent because he did not comply with his duty to slacken the speed of the car and to "look and listen" before crossing the intersection and above all, because he did not maintain a reasonable speed so as to permit him to stop any moment if it were necessary in order to avoid an accident. If, in the present case, the car had been running at a reasonable speed, there is no doubt that he could have stopped it instantly upon seeing the train from a distance of five meters.If the action for damages were brought by the driver, it is certain that it would not prosper in view of the fact that he had incurred in a notorious contributory negligence. But the persons who instituted the action are the appellants who were mere passengers of the car. Therefore, the question raised is whether the driver's negligence is imputable to them so as to bar them from the right to recover damages suffered by them by reason of the accident.

Although this question is, perhaps, raised in this jurisdiction for the first time, it is, nevertheless, a well recognized principle of law that the negligence of a driver, who, in turn, is guilty of contributory negligence, cannot be imputed to a passenger who has no control over him in the management of the vehicle and with whom he sustains no relation of master and servant. This rule is applied more strictly when, as in the present case, hired cars or those engaged in the public service, are involved.

The doctrine prevails in a few states that the contributory negligence of the driver of a private conveyance is imputable to a person voluntarily riding with him. But the general rule is that the negligence of the driver of a vehicle is not to be imputed to an occupant thereof who is ]injured at a crossing through the combined negligence of the driver and the railroad company when such occupant is without fault and has no control over the driver. And the law almost universally now recognized is that when one accepts an invitation to ride in the vehicle of another, without any authority or purpose to direct or control the driver or the movements of the team, and without any reason to doubt the competency of the driver, the contributory negligence of the owner or driver of the conveyance will not be imputed to the guest or passenger, so as to bar him of the right to recover damages from a railroad company whose negligence occasions injury to him at a crossing while he is so riding. This rule has been applied in a number of cases involving the corresponding

relation between the driver of an automobile and an occupant having no control over him. The rule is not confined to cases of gratuitous transportation, but has been applied where a conveyance is hired, and the passenger exercises no further control over the driver than to direct him to the place to which he wishes to be taken. Nor is any distinction made between private and public vehicles, such as street cars and stages. (22 R. C. L., pp. 1047, 1048.)

As a general rule the negligence of a driver of a vehicle approaching a railroad crossing, in failing to look and listen for approaching trains, cannot be imputed to an occupant of the vehicle who is without personal fault, unless such driver is the servant or agent of the occupant, unless they are engaged in a joint enterprise whereby responsibility for each other's acts exists, or unless the occupant is under the driver's care or control or has the right to direct and control the driver's actions, or where the driver is of obvious or known imprudence or incompetency. This rule that negligence of the driver is not imputable to an occupant only applies to cases in which the relation of master and servant or principal and agent does not exist between the parties, or where the occupant has no right to direct or control the driver's action, as where the occupant is a passenger for hire or is the guest of the owner or driver and has no reason to believe the driver careless or imprudent, or where the occupant is seated away from the driver or is separated from him by an inclosure so that he is without opportunity to discover danger and inform the driver thereof. . . . (52 C.J., pp. 315, 316 and 317.)

A passenger in the automobile of another having no control over the owner driving the car or the operation of the car which he occupied merely as passenger was not chargeable with contributory negligence of the owner and driver at a railroad crossing. (Carpenter vs. Atchison 195 Pac, 1073).

In railroad crossing accident, negligence of truck driver was not imputable to truck passenger not himself guilty of contributory negligence. (Lucchese vs. Spingola, 289 Pac., 189.)

In the case of Little vs. Hackett (116 U.S. 366; 29 Law. ed., 652, 654, 657), the United States Supreme Court said:

That one cannot recover damages for an injury to the commission of which he has directly contributed is a rule of established law and a principle of common justice. And it matters not whether that contribution consists in his participation in the direct cause of the injury, or in his omission of duties which, if performed, would have prevented it. If his fault, whether of omission or commission, has been

the proximate cause of the injury, he is without remedy against one also in the wrong. It would seem that the converse of this doctrine should be accepted as sound; that when one has been injured by the wrongful act of another, to which he has in no respect contributed, he should be entitled to compensation in damages from the wrongdoer. And such in the generally received doctrine, unless a contributory cause of the injury has been the negligence or fault of some person towards whom he sustains the relation of superior or master, in which case the negligence is imputed to him, though he may not have personally participated in or had knowledge of it; and he must bear the consequences. the doctrine may also be subject to other exceptions growing out of the relation of parent and child, or guardian and ward, and the like. Such a relation involves considerations which have no bearing upon the question before us.

There is no distinction in principle whether the passengers be on a public conveyance like a railroad train or an omnibus or be on a hack hired from a public stand in the street for a drive. Those on hack do not become responsible for the negligence of the driver, if they exercise no control over him further than to indicate the route they wish to travel or the places to which they wish to go. If he is their agent so that this negligence can be imputed to them to prevent their recovery against a third party, he must be their agent in all other respects, so far as the management of the carriage is concerned; and responsibility to third parties would attach to them for injuries caused by his negligence in the course of his employment. But as we have already stated, responsibility cannot, within any recognized rules of law, be fastened upon one who has in no way interfered with and controlled in the matter causing the injury. From the simple fact of hiring the carriage or riding in it no such liability can arise. The party hiring or riding must in some way have cooperated in producing the injury complained of before he incurs any liability for it. "If the law were otherwise," as said by Mr. Justice Depue in his elaborate opinion in the latest case in New Jersey, "not only the hirer of the coach but also all the passengers in it would be under a constraint to mount the box and superintend the conduct of the driver in the management and control of his team, or be put for remedy exclusively to an action against the irresponsible driver or equally irresponsible owner of a coach taken, it may be, from a coach stand, for the consequences of an injury which was the product of the cooperating wrongful acts of the driver and a third person; and that too, although the passengers were ignorant of the character of the driver, and of the responsibility of the owner of the team, and strangers to the route over which they were to be carried." (18 Vroom, 171.)"

There is nothing of record to show that the appellants herein have incurred in any negligence imputable to them and we do not see any reason whatsoever why they should be made responsible for the driver's negligence. The doctrine established in the cases cited above should be applied to the case at bar and it should be held that the appellants herein are entitled to recover from the appellee damages occasioned by the accident of which they were victims.

We shall now proceed to determine the amount of the damages. With respect to Soloria, we do not find any difficulty because the evidence shows that she spent only three hundred pesos (P300) for her treatment and stay in the hospital. Her injuries are not of such a nature as to entitle her to a further indemnity. The damages to which she is entitled may, therefore, be assessed at the amount stated above.

Such is not the case with respect to Consolacion Junio. According to the evidence presented, she was a dancer earning from six pesos (P6) to eight pesos (P8) a day for two or three days every week that she danced. She lost her right leg which was amputated, suffered a fracture of her right arm and was wounded on her occipital region. With these details in view, the members of this court are of the opinion that she may justly be awarded the sum of two thousand five hundred pesos (P2,500) as damages and five hundred pesos (P500) as indemnity for expenses incurred by her in her treatment, medical attendance and stay in the hospital, making the total amount she is entitled to recover aggregating three thousand pesos (P3,000).

Wherefore, the judgment appealed from is hereby reversed and it is ordered that the appellee pay to Consolacion Junio the sum of three thousand pesos (P3,000) and to Beatriz Soloria three hundred pesos (P300), with costs of both instances. So ordered.

Republic of the PhilippinesSUPREME COURT

ManilaFIRST DIVISION

G.R. No. 169891             November 2, 2006PHILIPPINE NATIONAL RAILWAYS, Petitioner,

vs.ETHEL BRUNTY and JUAN MANUEL M. GARCIA, Respondents.

D E C I S I O N

CALLEJO, SR., J.:

This is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 47567 and its Resolution2 denying the motion for reconsideration thereof. The assailed decision affirmed with partial modification the ruling3 of the Regional Trial Court (RTC) of Manila, Branch 20, directing petitioner Philippine National Railways (PNR) to indemnify respondents Ethel Brunty and Juan Manuel M. Garcia for the death of Rhonda Brunty, and to pay actual and moral damages, attorney’s fees and cost of suit.

Rhonda Brunty, daughter of respondent Ethel Brunty and an American citizen, came to the Philippines for a visit sometime in January 1980. Prior to her departure, she, together with her Filipino host Juan Manuel M. Garcia, traveled to Baguio City on board a Mercedes Benz sedan with plate number FU 799, driven by Rodolfo L. Mercelita. It was about 12:00 midnight, January 25, 1980. By then, PNR Train No. T-71, driven by Alfonso Reyes, was on its way to Tutuban, Metro Manila4 as it had left the La Union station at 11:00 p.m., January 24, 1980.

By 2:00 a.m., Rhonda Brunty, Garcia and Mercelita were already approaching the railroad crossing at Barangay Rizal, Moncada, Tarlac. Mercelita, driving at approximately 70 km/hr, drove past a vehicle, unaware of the railroad track up ahead and that they were about to collide with PNR Train No. T-71. Mercelita was instantly killed when the Mercedes Benz smashed into the train; the two other passengers suffered serious physical injuries.5 A certain James Harrow6 brought Rhonda Brunty to the Central Luzon Doctor’s Hospital in Tarlac, where she was pronounced dead after ten minutes from arrival. Garcia, who had suffered severe head injuries, was brought via ambulance to the same hospital. He was transferred to the

Manila Doctor’s Hospital, and later to the Makati Medical Center for further treatment.7

On July 28, 1981, Ethel Brunty sent a demand letter8 to the PNR demanding payment of actual, compensatory, and moral damages, as a result of her daughter’s death. When PNR did not respond, Ethel Brunty and Garcia, filed a complaint9 for damages against the PNR before the RTC of Manila. The case was raffled to Branch 20 and was docketed as Civil Case No. 83-18645. They alleged that the death of Mercelita and Rhonda Brunty, as well as the physical injuries suffered by Garcia, were the direct and proximate result of the gross and reckless negligence of PNR in not providing the necessary equipment at the railroad crossing in Barangay Rizal, Municipality of Moncada, Tarlac. They pointed out that there was no flagbar or red light signal to warn motorists who were about to cross the railroad track, and that the flagman or switchman was only equipped with a hand flashlight.10

Plaintiffs likewise averred that PNR failed to supervise its employees in the performance of their respective tasks and duties, more particularly the pilot and operator of the train.11 They prayed for the payment of the following damages:

1.) P200,000.00 as actual and compensatory damages to plaintiff Ethel Brunty;2.) P2,800,000.00 for compensatory damages to plaintiff Ethel Brunty representing lost or unearned income of Rhonda Brunty;3.) Such amounts of moral and exemplary damages as may be warranted by the evidence adduced, to plaintiff Ethel Brunty;4.) At least P64,057.61 as actual damages representing medical expenses to plaintiff Juan Manuel M. Garcia and at least P1,000,000.00 as unearned or lost income of said plaintiff;5.) At least P72,760.00 as actual damages representing cost of the Mercedes Benz car to plaintiff Juan Manuel M. Garcia;6.) Such amounts of moral and exemplary damages as may be warranted by the evidence adduced, to plaintiff Juan Manuel M. Garcia; and7.) Attorney’s fees equivalent to at least 15% of the total award to plaintiffs herein.12

In its Answer,13 PNR claimed that it exercised the diligence of a good father of a family not only in the selection but also in the supervision of its employees.14 By way of special and affirmative defense, it stressed that it had the right of way on the railroad crossing in question, and that it has no legal duty to put up a bar or red light signal in any such crossing. It insisted that there were adequate, visible, and clear warning signs strategically posted on the sides of the road before the railroad crossing. It countered that the immediate and proximate cause of the accident was Mercelita’s negligence, and that he had the last clear chance to avoid the accident. The

driver disregarded the warning signs, the whistle blasts of the oncoming train and the flashlight signals to stop given by the guard.15 As counterclaim, it prayed that it be awarded actual and compensatory damages, and litigation expenses.16

Plaintiffs filed an Amended Complaint17 dated July 28, 1986 to include, as party plaintiff, Chemical Industries of the Philippines, Inc. (Chemphil), Garcia’s employer, who claimed to have paid for the latter’s medical and hospitalization expenses, the services rendered by the funeral parlor of the deceased, and the expenses in transferring the remains of Rhonda Brunty to the United States.18

After trial on the merits, the RTC rendered its Decision19 on May 21, 1990 in favor of plaintiffs. The fallo reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs Ethel Brunty and Juan Manuel M. Garcia and against the defendant Philippine National Railways directing the latter to pay the former the sum of:

1. Thirty Thousand Pesos (P30,000.00) Philippine Currency, for the death of Rhonda Brunty formerly a resident of 1595 Ashland Avenue, Des Plaines, Illinois, U.S.A.;2. One Million Pesos (P1,000,000.00) Philippine Currency for moral and actual damages due the heirs of Rhonda Brunty;3. Seventy-Two Thousand Seven Hundred Sixty Pesos (P72,760.00) Philippine Currency for damages sustained by the Mercedes Benz;4. Fifty Thousand Pesos (P50,000.00) Philippine Currency as and for attorney's fees, and;5. Costs of suit.

SO ORDERED.20

Aggrieved, the PNR appealed the case to the CA, raising the following errors:

I.THE TRIAL COURT ERRED IN ADJUDGING DEFENDANT-APPELLANT PNR LIABLE FOR THE DEATH OF RHONDA BRUNTY AND THE CONSEQUENT AWARD OF DAMAGES DUE THE HEIRS OF RHONDA BRUNTY.II.THE TRIAL COURT ERRED IN ADJUDGING DEFENDANT-APPELLANT PNR LIABLE FOR THE DAMAGES SUFFERED BY PLAINTIFF-APPELLEE’S MERCEDES BENZ IN THE AMOUNT OF SEVENTY-TWO THOUSAND SEVEN HUNDRED AND SIXTY PESOS (P72,760.00).III.

THE LOWER COURT ERRED IN AWARDING ATTORNEY’S FEES TO THE PLAINTIFFS-APPELLEES.21

In its Brief, PNR insisted that the sole and proximate cause of the accident was the negligence and recklessness of Garcia and Mercelita.22 It insisted that it had provided adequate warning signals at the railroad crossing23 and had exercised due care in the selection and supervision of its employees.24

The RTC erred in awarding damages to Rhonda Brunty as she cannot be allowed to receive what she is not in a position to give, having been a non-resident alien who did not own a property in the Philippines.25 It likewise questioned the award of damages on the Mercedes Benz as well as the grant of attorney’s fees.26 At the very least, Mercelita was guilty of contributory negligence.27

For their part, appellees countered that appellant was grossly and recklessly negligent in not properly providing the necessary equipment at the railroad crossing in Rizal, Moncada, Tarlac;28 appellant was negligent in not exercising due diligence of a good father of a family in the supervision of its employees, particularly the train operator Alfonso Reyes;29 the car was driven in a careful and diligent manner, and at a moderate speed, with due regard to all traffic rules and regulations at that particular time;30 the doctrine of "last clear chance" is not applicable;31 Ethel Brunty is a non-resident alien who can rightfully file the instant case;32 and they are entitled to recover damages from appellant.33

The CA rendered the assailed Decision34 on August 15, 2005. The dispositive portion reads:WHEREFORE, premises considered, the assailed decision is hereby AFFIRMED with PARTIAL MODIFICATIONS, increasing the death indemnity award from P30,000.00 to P50,000.00, and deleting the award for damages sustained by the Mercedes Benz.

SO ORDERED.35

The appellate court affirmed the findings of the RTC as to the negligence of the PNR. Considering the circumstances prevailing at the time of the fatal accident, it ruled that the alleged safety measures installed by the PNR at the railroad crossing were not merely inadequate – they did not satisfy the well-settled safety standards in transportation.36 However, the CA did not agree with the RTC’s findings on the contributory negligence of Mercelita, the driver of the Mercedes Benz. It held that Mercelita could not have foreseen the harm that would befall him and the two other passengers under the prevailing circumstances, thus, could not be considered guilty of contributory negligence.37

The PNR, now petitioner, comes before this Court in this Petition for Review on Certiorari on the following grounds:

I.THE COURT OF APPEALS ERRED IN MANIFESTLY OVERLOOKING CERTAIN RELEVANT FACTS NOT DISPUTED BY THE PARTIES AND WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY A DIFFERENT CONCLUSION SUCH AS:THE RESPONDENTS’ DRIVER OVERTOOK ANOTHER VEHICLE BY ACCELERATING AT 70 KILOMETERS PER HOUR WITHIN JUST 50 YARDS AWAY FROM THE RAILROAD TRACKS.

II.THE FINDINGS OF FACT OF THE COURT OF APPEALS ARE CONTRARY TO THOSE OF THE TRIAL COURT REGARDING CONTRIBUTORY NEGLIGENCE OF THE RESPONDENTS’ DRIVER.

III.THE COURT OF APPEALS ERRED IN NOT APPLYING THE DOCTRINE OF LAST CLEAR CHANCE IN THE INSTANT CASE.38

Petitioner insists that the proximate cause of the mishap was Mercelita’s disregard of traffic rules and regulations. Had the court considered the fact that Mercelita had overtaken another vehicle a few yards before the railroad track, it would have reached a different conclusion.39 Moreover, petitioner asserts, considering that the decisions of the RTC and the CA vary as to whether or not Mercelita was guilty of contributory negligence, the findings of the RTC should prevail. Thus, Mercelita’s contributory negligence should not have been ignored.40 Lastly, petitioner avers that since there is freedom of control and greater maneuverability on the part of motor vehicles, it is obvious that in railroad crossings, they have the last clear chance to prevent or avoid an unwanted accident from taking place.41

In their Comment42 on the petition, respondents reiterate the findings of the RTC and the CA that the breach by petitioner of its legal duty to provide adequate and necessary public safety device and equipment within the area or scene of the accident was the proximate cause of the mishap.43 While it is true that as a general rule, the trial court is in the best position to evaluate and observe the conduct and demeanor of the witnesses presented during the trial, the CA, in the exercise of its appellate jurisdiction, has the vested right to modify, reject, or set aside the trial court’s evaluation and findings.44 As to the application of the doctrine of last clear chance, respondents claim that said issue is being raised for the first time in this petition.45 Lastly, respondents cite foreign jurisprudence stating that if the violation is one which gives rise to liability per se for any resulting injury, the defenses ordinarily available in actions for diligence are barred and the contributory negligence of the person injured is no defense.46

The Court is thus tasked to answer the following factual questions: (1) As between petitioner and Mercelita, whose negligence resulted in the unfortunate collision? (2) Is Mercelita (the driver of the Mercedes Benz) guilty of contributory negligence? Finally, the application in this case of the doctrine of last clear chance is likewise in question.

Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would not do.47 In Corliss v. Manila Railroad Company,48 this Court held that negligence is want of the care required by the circumstances. It is a relative or comparative, not an absolute, term and its application depends upon the situation of the parties and the degree of care and vigilance which the circumstances reasonably require.49 In determining whether or not there is negligence on the part of the parties in a given situation, jurisprudence50 has laid down the following test: Did defendant, in doing the alleged negligent act, use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, the person is guilty of negligence. The law, in effect, adopts the standard supposed to be supplied by the imaginary conduct of the discreet pater familias of the Roman law.

The issue of who, between the parties, was negligent was thoroughly discussed by both the RTC and the CA. In petitions for review under Rule 45 of the Revised Rules of Court, only questions of law may be put into issue, and questions of fact as a general rule, cannot be entertained. The finding of negligence by the RTC, as affirmed by the CA, is a question of fact which this Court cannot pass upon as it would entail going into factual matters on which the finding of negligence was based.51 The established rule is that factual findings of the CA affirming those of the trial court are conclusive and binding on this Court.52

The records of the instant case show that both the RTC and the CA carefully examined the factual circumstances surrounding the case, and we find no cogent reason to disturb the same. It is, however, worthy to emphasize that petitioner was found negligent because of its failure to provide the necessary safety device to ensure the safety of motorists in crossing the railroad track. As such, it is liable for damages for violating the provisions of Article 2176 of the New Civil Code, viz:Article 2176. Whoever, by act or omission, causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

In a long line of cases, the Court held that in order to sustain a claim based on quasi-delict, the following requisites must concur: (1) damage to plaintiff; (2) negligence, by act or omission, of which defendant, or some person for whose acts he must respond was guilty; and (3) connection of cause and effect between such negligence and damage.53 Applying the foregoing requisites, the CA correctly made the following conclusions:

It was clearly established that plaintiffs-appellees (respondents herein) sustained damage or injury as a result of the collision. That there was negligence on the part of PNR is, likewise, beyond cavil. Considering the circumstances prevailing at the time of the fatal accident, the alleged safety measures installed by the PNR at the railroad crossing is not only inadequate but does not satisfy well-settled safety standards in transportation. x x x

x x x x

x x x An examination of the photographs of the railroad crossing at Moncada, Tarlac presented as evidence by PNR itself would yield the following: (1.) absence of flagbars or safety railroad bars; (2.) inadequacy of the installed warning signals; and (3.) lack of proper lighting within the area. Thus, even if there was a flagman stationed at the site as claimed by PNR (petitioner), it would still be impossible to know or see that there is a railroad crossing/tracks ahead, or that there is an approaching train from the Moncada side of the road since one’s view would be blocked by a cockpit arena. x x x54

Moreover, the CA held that a vehicle coming from the Moncada side would have difficulty in knowing that there is an approaching train because of the slight curve, more so, at an unholy hour as 2:00 a.m. Thus, it is imperative on the part of the PNR to provide adequate safety equipment in the area.55

It may broadly be stated that railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to persons and property at railroad crossings, which duties pertain both in the operation of trains and in the maintenance of the crossings.56 Moreover, every corporation constructing or operating a railway shall make and construct at all points where such railway crosses any public road, good, sufficient, and safe crossings and erect at such points, at a sufficient elevation from such road as to admit a free passage of vehicles of every kind, a sign with large and distinct letters placed thereon, to give notice of the proximity of the railway, and warn persons of the necessity of looking out for trains.57

This Court has previously determined the liability of the PNR for damages for its failure to put a cross bar, or signal light, flagman or switchman, or semaphores. Such failure is evidence of negligence and disregard of the

safety of the public, even if there is no law or ordinance requiring it because public safety demands that said device or equipment be installed.58

In view of the foregoing, we affirm the factual findings of the CA as well as its conclusion on petitioner’s negligence.

As to whether or not Mercelita was guilty of contributory negligence, we agree with petitioner. Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required to conform for his own protection.59 To hold a person as having contributed to his injuries, it must be shown that he performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body.60

To prove contributory negligence, it is still necessary to establish a causal link, although not proximate, between the negligence of the party and the succeeding injury. In a legal sense, negligence is contributory only when it contributes proximately to the injury, and not simply a condition for its occurrence.61

The court below found that there was a slight curve before approaching the tracks; the place was not properly illuminated; one’s view was blocked by a cockpit arena; and Mercelita was not familiar with the road. Yet, it was also established that Mercelita was then driving the Mercedes Benz at a speed of 70 km/hr and, in fact, had overtaken a vehicle a few yards before reaching the railroad track. Mercelita should not have driven the car the way he did. However, while his acts contributed to the collision, they nevertheless do not negate petitioner’s liability. Pursuant to Article 217962

of the New Civil Code, the only effect such contributory negligence could have is to mitigate liability, which, however, is not applicable in this case, as will be discussed later.1âwphi1

As to whether or not the doctrine of last clear chance is applicable, we rule in the negative. The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the loss. Stated differently, the antecedent negligence of plaintiff does not preclude him from recovering damages caused by the supervening negligence of defendant, who had the last fair chance to prevent the impending harm by the exercise of due diligence.63 The proximate cause of the injury having been established to be the negligence of petitioner, we hold that the above doctrine finds no application in the instant case.

We note that the damages awarded by the appellate court consist of (1) P50,000.00 as indemnity for the death of Rhonda Brunty; (2) P1,000,000.00

as actual and moral damages due the heirs of Rhonda Brunty; and (3) P50,000.00 as and by way of attorney’s fees. No damages, however, were awarded for the injuries suffered by Garcia, yet, the latter never interposed an appeal before the CA nor even before this Court. The record is, likewise, bereft of any allegation and proof as to the relationship between Mercelita (the driver) and Rhonda Brunty. Hence, the earlier finding of contributory negligence on the part of Mercelita, which generally has the effect of mitigation of liability, does not apply.

As to the amount of damages awarded, a modification of the same is in order, specifically on the award of actual and moral damages in the aggregate amount of P1,000,000.00.Actual or compensatory damages are those awarded in order to compensate a party for an injury or loss he suffered. They arise out of a sense of natural justice, aimed at repairing the wrong done. To be recoverable, they must be duly proved with a reasonable degree of certainty. A court cannot rely on speculation, conjecture, or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have suffered, and on evidence of the actual amount thereof.64 Respondents, however, failed to present evidence for such damages; hence, the award of actual damages cannot be sustained. However, as the heirs of Rhonda Brunty undeniably incurred expenses for the wake and burial of the latter, we deem it proper to award temperate damages in the amount of P25,000.00 pursuant to prevailing jurisprudence.65 This is in lieu of actual damages as it would be unfair for the victim’s heirs to get nothing, despite the death of their kin, for the reason alone that they cannot produce receipts.66

The relatives of the victim who incurred physical injuries in a quasi-delict are not proscribed from recovering moral damages in meritorious cases.67

We, therefore, sustain the award of moral damages in favor of the heirs of Rhonda Brunty.

Moral damages are not punitive in nature, but are designed to compensate and alleviate in some way the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury unjustly caused a person. Although incapable of pecuniary computation, moral damages must nevertheless be somehow proportional to and in approximation of the suffering inflicted.68 In the instant case, the moral suffering of the heirs of Rhonda Brunty was sufficiently established by Ethel Brunty in her deposition,69 viz:

Q: What have you felt as a result of the death of Rhonda?A: I felt earnest anguish and mixed feelings of anger and extreme sorrow because she died so far away and alone, and because her death could so easily be prevented if there had been adequate and appropriate warning signals at the railroad crossing and it is just an unbearable and irreparable

loss. In so many ways, she was my life. It seemed to me that losing her was just like losing my own life, or worst, and even now, there is no end to our bereavement. I am still on constant medication to be able to sleep and to be able to perform my duties effectively in my job but it does not take away the pain of loss.70

In People v. Teehankee, Jr.,71 and in Metro Manila Transit Corporation v. Court of Appeals,72 we awarded moral damages in the amount of P1,000,000.00 to the heirs of the deceased. In Victory Liner, Inc. v. Heirs of Malecdan,73 the award of P100,000.00 as moral damages was held in keeping with the purpose of the law, while in Macalinao v. Ong,74 the amount of P50,000.00 was held sufficient.1âwphi1

Considering the circumstances attendant in this case, we find that an award of P500,000.00 as moral damages to the heirs of Rhonda Brunty is proper. In view of recent jurisprudence, indemnity of P50,000.00 for the death of Rhonda Brunty and attorney’s fees amounting to P50,000.00 is likewise proper.

WHEREFORE, premises considered, the Decision of the Court of Appeals dated August 15, 2005 is AFFIRMED WITH MODIFICATIONS. The award of actual damages is deleted, and in lieu thereof, temperate damages of P25,000.00 is awarded to the heirs of Rhonda Brunty. The award of moral damages is reduced to P500,000.00.

SO ORDERED.

FIRST DIVISION[G.R. No. 160709.  February 23, 2005]

NELEN LAMBERT, assisted by her husband, GLENROY ALOYSUIS LAMBERT, petitioners, vs. HEIRS OF RAY CASTILLON, Represented by

MARILOU T. CASTILLON and SERGIO LABANG, respondents.

D E C I S I O NYNARES-SANTIAGO, J.:

This is a petition for review under Rule 45 of the Rules of Court seeking the reversal of the decision[1] of the Court of Appeals dated October 21, 2002 in CA-G.R. CV No. 43734, which affirmed the June 29, 1993 decision of the Regional Trial Court of Iligan City, Branch 06, in Civil Case No. 06-2086.

In the evening of January 13, 1991, Ray Castillon visited the house of his brother Joel Castillon at Tambo, Iligan City and borrowed his motorcycle.  He then invited his friend, Sergio Labang, to roam around Iligan City.  Ray drove the motorcycle with Sergio as the backrider.[2]

At around past 10:00 p.m., after eating supper at Hona’s Restaurant and imbibing a bottle of beer, they traversed the highway towards Tambo at a high speed.  Upon reaching Brgy. Sto. Rosario, they figured in an accident with a Tamaraw jeepney, owned by petitioner Nelen Lambert and driven by Reynaldo Gamot, which was traveling on the same direction but made a sudden left turn.  The incident resulted in the instantaneous death of Ray and injuries to Sergio.[3]

Respondents, the heirs of Ray Castillon, thus filed an action for damages with prayer for preliminary attachment against the petitioner Nelen Lambert.  The complaint was docketed as Civil Case No. 06-2086 of the RTC of Iligan City, Branch 06.[4] The complaint was subsequently amended to include the claim by Joel Castillon for the damages caused to the motorcycle.[5]

On June 29, 1993, after a full-blown trial, the court a quo rendered a decision in favor of herein private respondents but reduced petitioner’s liability by 20% in view of the contributory negligence of Ray.  The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, directing the latter, jointly and severally, to pay the former the following:

1.       The sum of SIX HUNDRED THIRTY-THREE THOUSAND AND NINETY-ONE (P633,091) PESOS, representing loss of support, death indemnity, funeral and related expenses, moral damages and attorney’s fees and2.       Costs of the suit.

For lack of merit, defendants’ counterclaim is dismissed.

On the claim of Joel Castillon, the evidence shows that he is not the real owner of the motorcycle.  He is not the real party in interest.  Accordingly, his complaint is dismissed.

On the third-party complaint, the third-party defendant Zenith Insurance Corporation is ordered to pay the sum of P16,500.00 directly to the plaintiffs.  This sum, if paid, should be deducted from the amount adjudged in par. 1 above.

SO ORDERED.[6]

The Court of Appeals affirmed the decision of the trial court.[7] Hence the present petition, based on the following arguments:

1.       The Honorable Court of Appeals committed serious error of law and grave abuse of discretion when it did not apply the ruling of this Honorable Court in the case of Philippine Rabbit Bus Lines vs. The Honorable Intermediate Appellate Court and Casiano Pascua, Et. Al., [189 SCRA 168, August 30, 1990], as reiterated recently in the case of Edna A. Raynera vs. Freddie Hiceta and Jimmy Orpilla [306 SCRA 102, April 21, 1999], in which this Honorable Court enunciated that drivers of vehicles “who bump the rear of another vehicle” are presumed to be the cause of the accident.

2.       The erroneous conclusion of the Honorable Trial Court as affirmed by the Honorable Court of Appeals that the act of tailgating, at high speed, constitutes contributory negligence only, is contrary to the rulings of this Honorable Court in the case of Sanitary Steam Laundry, INC. vs. The Honorable Court of Appeals [300 SCRA 20, December 10, 1998] and the case of Edna A. Raynera vs. Freddie Hiceta and Jimmy Orpilla [306 SCRA 102, April 21, 1999].

3.       The Honorable Court of Appeals grossly erred in its conclusion that petitioner’s driver was negligent, without taking into consideration the presumptions enunciated by this Honorable Court in the case of Philippine Rabbit Bus Lines vs. The Honorable Intermediate Appellate Court and Casiano Pascua, Et. Al., [189 SCRA 168, August 30, 1990], and the case of Edna A. Raynera vs. Freddie Hiceta and Jimmy Orpilla [306 SCRA 102, April 21, 1999].

4.       As an alternative relief, petitioner most respectfully assigns as error the Honorable Trial Court’s computation as to the loss of earning capacity of Ray Castillon.  Such computation is contrary to the formula enunciated by this Honorable Court in the case of Villa Rey Transit, Inc. vs. The Honorable Court of Appeals [31 SCRA 511 (1970)].

5.       The Honorable Trial Court’s award of moral damages is contrary to the pronunciation of this Honorable Court in the case of Ace Haulers Corporation vs. The Honorable Court of Appeals and Abiva [338 SCRA 572, August 23, 2000], wherein the award of moral damages was disallowed absent any evidence of bad faith or ill-motive.[8]

Petitioner insists that the negligence of Ray Castillon was the proximate cause of his unfortunate death and therefore she is not liable for damages.

In petitions for review on certiorari under Rule 45 of the Rules of Court, only questions of law may be put into issue.  Questions of fact cannot be entertained.  The finding of negligence by the Court of Appeals is a question of fact which we cannot pass upon as it would entail going into factual matters on which the finding of negligence was based.  As a rule, factual findings of the trial court, especially those affirmed by the Court of Appeals, are conclusive on this Court when supported by the evidence on record.[9]Our examination of the records shows that both the trial court and the Court of Appeals carefully considered the factual backdrop of the case.  No cogent reason exists for disturbing the following findings of the trial court, which the Court of Appeals affirmed:

… To the mind of the court, this is exactly what happened.  When Reynaldo Gamot was approaching the side road, he slightly veered to the right for his allowance.  Ray Castillon, who was following closely behind, instinctively veered to the left but it was also the moment when Reynaldo Gamot sharply turned to the left towards the side road.  At this juncture both were moving obliquely to the left.  Thus the motorcycle sliced into the side of the jeepney throwing the driver forward so that his forehead hit the angle bar on the left front door of the jeepney even as the motorcycle shot forward and the jeepney veered back to the right and sped away.

…

The testimonies of the witnesses Frias, Opada, Labang and Sumile show that he did not stop even for a second, or less before making the left turn.  On the contrary, he slightly veered to the right immediately followed by the abrupt and sudden turn to the left in order to enter the side road.  It is apparent that Reynaldo Gamot did not keep a lookout for vehicles or persons following him before proceeding to turn left.  He failed to take into account the possibility that others may be following him.  He did not employ the necessary precaution to see to it that the road was clear.[10]

Clearly, the abrupt and sudden left turn by Reynaldo, without first establishing his right of way, was the proximate cause of the mishap which claimed the life of Ray and injured Sergio.  Proximate cause is defined as that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause, produces the injury, and without which the result would not have occurred.[11] The cause of the collision is traceable to the negligent act of Reynaldo for, as the trial court correctly held, without that left turn executed with no precaution, the mishap in all probability would not have happened.[12]

Petitioner misunderstood our ruling in Raynera v. Hiceta.[13] That case also involved a motorcycle crashing into the left rear portion of another vehicle, and we declared therein that drivers of vehicles “who bump the rear of another vehicle” are presumed to be “the cause of the accident, unless contradicted by other evidence”.[14] In Raynera, the death of the victim was solely attributable to his own negligence in bumping the rear of the trailer truck which was traveling ahead of him at 20 to 30 kilometers per hour.  Raynera, being the driver of the rear vehicle, had full control of the situation as he was in a position to observe the vehicle in front of him.  The trailer truck therein did not make a sudden left turn as in the case at bar.  Thus, the theory that drivers of vehicles “who bump the rear of another vehicle” are presumed to be the cause of the accident is, as in this case, sufficiently contradicted by evidence, which is the sudden left turn made by Reynaldo which proximately caused the collision.

While we agree with the trial court that Ray was likewise guilty of contributory negligence as defined under Article 2179 of the Civil Code, we find it equitable to increase the ratio of apportionment of damages on account of the victim’s negligence.

Article 2179 reads as follows:

When the plaintiff’s negligence was the immediate and proximate cause of his injury, he cannot recover damages.  But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.

The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full but must bear the consequences of his own negligence. The defendant must thus be held liable only for the damages actually caused by his negligence.[15] The determination of the mitigation of the defendant’s liability varies depending on the circumstances of each case.  The Court had sustained a mitigation of 50% in Rakes v. AG & P;[16] 20% in Phoenix Construction, Inc. v. Intermediate Appellate Court[17] and LBC Air Cargo, Inc. v. Court of Appeals;[18] and 40% in Bank of the Philippine Islands v. Court of Appeals[19] and Philippine Bank of Commerce v. Court of Appeals.[20]

In the case at bar, it was established that Ray, at the time of the mishap: (1) was driving the motorcycle at a high speed; (2) was tailgating the Tamaraw jeepney; (3) has imbibed one or two bottles of beer; and (4) was not wearing a protective helmet.[21] These circumstances, although not constituting the proximate cause of his demise and injury to Sergio, contributed to the same result.  The contribution of these circumstances are all considered and determined in terms of percentages of the total cause.  Hence, pursuant to Rakes v. AG & P, the heirs of Ray Castillon shall recover damages only up to 50% of the award.  In other words, 50% of the damage shall be borne by the private respondents; the remaining 50% shall be paid by the petitioner.

Anent the award of loss of earning capacity, we agree with the petitioner that the trial court erred in the computation of the net earnings.

In considering the earning capacity of the victim as an element of damages, the following factors are considered in determining the compensable amount of lost earnings: (1) the number of years for which the victim would otherwise have lived; and (2) the rate of loss sustained by the heirs of the deceased.  Jurisprudence provides that the first factor, i.e., life expectancy, is computed by applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial Combined Experience Table of Mortality. As to the second factor, it is computed by multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses.  The net earning is ordinarily computed at fifty percent (50%) of the gross earnings.  Thus, the formula used by this Court in computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80 – age at time of death) x (gross annual income – reasonable and necessary living expenses)].[22]

It was established that Ray was 35 at the time of his death and was earning a gross annual income of P31,876.00 as a driver at the Mindanao State University.  In arriving at the net earnings, the trial court deducted from the

gross annual income the annual living expenses in the amount of P9,672.00, broken down as follows: P20.00 a day for travel or P520.00 per month; P60.00 a month for cigarettes; P26.00 for drinks; and other personal expenses like clothing, toiletries, etc. estimated at P200.00 per month.[23]The amount of P9,672.00, however, appears unrealistic, and constitutes only 30.34% of the gross earnings.  It even includes expenses for cigarettes which by no means can be classified as a necessary expense.   Using the cited formula with the net earnings computed at 50% of the gross earnings, a detailed computation is as follows:NET EARNING CAPACITY (X)

= LIFE EXPECTANCY [2/3 (80-age at the time of death)]

x GROSS ANNUAL INCOME (GAI)

- LIVING EXPENSES (50% of GAI)

X = [2/3 (80-35)] x [P31,876.00 -50% x P31,876.00]

X = [2/3 (45)] x [P31,876.00 - P15,938.00]X = 30 x 15,938.00  X = P478,140.00    

We sustain the awards of P33,215.00 as funeral and burial expenses being supported with receipts;[24] P50,000.00 as death indemnity; and P50,000.00 as moral damages.  However, the award of P20,000.00 as attorney’s fees must be deleted for lack of basis.

The indemnity for death caused by a quasi-delict used to be pegged at P3,000.00,[25] based on Article 2206 of the Civil Code, which reads:

ART. 2206.  The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances.  In addition:

(1)     The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent physical disability not caused by the defendant, had no earning capacity at the time of his death;

(2)     If the deceased was obliged to give support according to the provisions of article 291, the recipient who is not an heir called to the decedent’s inheritance by the law of testate or intestate succession, may demand support from the person causing the death, for a period of not exceeding five years, the exact duration to be fixed by the court;

(3)     The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased.

However, the amount has been gradually increased through the years.  At present, prevailing jurisprudence fixes the amount at P50,000.00.[26]

Paragraph 3 of the same provision also serves as the basis for the award of moral damages in quasi-delict.  The reason for the grant of moral damages has been explained, thus:… the award of moral damages is aimed at a restoration, within the limits possible, of the spiritual status quo ante; and therefore, it must be proportionate to the suffering inflicted.  The intensity of the pain experienced by the relatives of the victim is proportionate to the intensity of affection for him and bears no relation whatsoever with the wealth or means of the offender.[27]

While it is true that there can be no exact or uniform rule for measuring the value of human life and the measure of damages cannot be arrived at by a precise mathematical calculation,[28] we hold that the trial court’s award of moral damages of P50,000.00 for the death of Ray Castillon is in accord with the prevailing jurisprudence.[29]

With respect to attorney’s fees, it is well settled that the same should not be awarded in the absence of stipulation except under the instances enumerated in Article 2208 of the Civil Code.  The trial court did not indicate the basis for its award.  As we have held in Rizal Surety and Insurance Company v. Court of Appeals:[30]

“Article 2208 of the Civil Code allows attorney’s fess to be awarded by a court when its claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought.  While judicial discretion is here extant, an award thereof demands, nevertheless, a factual, legal or equitable justification.  The matter cannot and should not be left to speculation and conjecture (Mirasol vs. De la Cruz, 84 SCRA 337; Stronghold Insurance Company, Inc. vs. Court of Appeals, 173 SCRA 619).

In the case at bench, the records do not show enough basis for sustaining the award for attorney’s fees and to adjudge its payment by petitioner…”

Likewise, this Court held in Stronghold Insurance Company, Inc. vs. Court of Appeals that:“In Abrogar v. Intermediate Appellate Court [G.R. No. 67970, January 15, 1988, 157 SCRA 57] the Court had occasion to state that ‘[t]he reason for the award of attorney’s fees must be stated in the text of the court’s decision, otherwise, if it is stated only in the dispositive portion of the decision, the same must be disallowed on appeal.’ …

WHEREFORE, in view of the foregoing, the petition is DENIED.  The assailed decision of the Court of Appeals is AFFIRMED with the MODIFICATION that the net earnings is computed at 50% of the gross annual income to conform with the prevailing jurisprudence, and the FURTHER MODIFICATION that petitioner NELEN LAMBERT is ordered to pay the heirs of Ray Castillon only 50% of the damages herein awarded, except attorney’s fees which is DELETED for lack of basis.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-10126           October 22, 1957

SALUD VILLANUEVA VDA. DE BATACLAN and the minors NORMA, LUZVIMINDA, ELENITA, OSCAR and ALFREDO BATACLAN, represented

by their Natural guardian, SALUD VILLANUEVA VDA. DE BATACLAN, plaintiffs-appellants,

vs.MARIANO MEDINA, defendant-appellant.

Lope E. Adriano, Emmanuel Andamo and Jose R. Francisco for plaintiffs-appellants.

Fortunato Jose for defendant and appellant.

MONTEMAYOR, J.:

Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation, operated by its owner defendant Mariano Medina under a certificate of public convenience, left the town of Amadeo, Cavite, on its way to Pasay City, driven by its regular chauffeur, Conrado Saylon. There were about eighteen passengers, including the driver and conductor. Among the passengers were Juan Bataclan, seated beside and to the right of the driver, Felipe Lara, sated to the right of Bataclan, another passenger apparently from the Visayan Islands whom the witnesses just called Visaya, apparently not knowing his name, seated in the left side of the driver, and a woman named Natalia Villanueva, seated just behind the four last mentioned. At about 2:00 o'clock that same morning, while the bus was running within the jurisdiction of Imus, Cavite, one of the front tires burst and the vehicle began to zig-zag until it fell into a canal or ditch on the right side of the road and turned turtle. Some of the passengers managed to leave the bus the best way they could, others had to be helped or pulled out, while the three passengers seated beside the driver, named Bataclan, Lara and the Visayan and the woman behind them named Natalia Villanueva, could not get out of the overturned bus. Some of the passengers, after they had clambered up to the road, heard groans and moans from inside the bus, particularly, shouts for help from Bataclan and Lara, who said they could not get out of the bus. There is nothing in the evidence to show whether or not the passengers already free from the wreck, including the driver and the conductor, made any attempt to pull out or extricate and rescue the four passengers trapped inside the vehicle, but calls or shouts for help were made to the houses in the neighborhood. After half an hour, came about ten men, one of them carrying a lighted torch made of bamboo with a wick on one end, evidently fueled with petroleum. These men presumably approach the overturned bus, and almost immediately, a fierce fire started, burning and all but consuming the bus, including the four passengers trapped inside it. It would appear that as the bus overturned, gasoline began to leak and escape from the gasoline tank on the side of the chassis, spreading over and permeating the body of the bus and the ground under and around it, and that the lighted torch brought by one of the men who answered the call for help set it on fire.

That same day, the charred bodies of the four deemed passengers inside the bus were removed and duly identified that of Juan Bataclan. By reason of his death, his widow, Salud Villanueva, in her name and in behalf of her five minor children, brought the present suit to recover from Mariano Medina compensatory, moral, and exemplary damages and attorney's fees in the

total amount of P87,150. After trial, the Court of First Instance of Cavite awarded P1,000 to the plaintiffs plus P600 as attorney's fee, plus P100, the value of the merchandise being carried by Bataclan to Pasay City for sale and which was lost in the fire. The plaintiffs and the defendants appealed the decision to the Court of Appeals, but the latter endorsed the appeal to us because of the value involved in the claim in the complaint.

Our new Civil Code amply provides for the responsibility of common carrier to its passengers and their goods. For purposes of reference, we are reproducing the pertinent codal provisions:

ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extra ordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.

ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755

ART. 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 order 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.

ART. 1763. A common carrier 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.

We agree with the trial court that the case involves a breach of contract of transportation for hire, the Medina Transportation having undertaken to carry Bataclan safely to his destination, Pasay City. We also agree with the trial court that there was negligence on the part of the defendant, through his agent, the driver Saylon. There is evidence to show that at the time of the blow out, the bus was speeding, as testified to by one of the passengers, and as shown by the fact that according to the testimony of the witnesses, including that of the defense, from the point where one of the front tires burst up to the canal where the bus overturned after zig-zaging, there was a distance of about 150 meters. The chauffeur, after the blow-out, must have applied the brakes in order to stop the bus, but because of the velocity at which the bus must have been running, its momentum carried it over a distance of 150 meters before it fell into the canal and turned turtle.

There is no question that under the circumstances, the defendant carrier is liable. The only question is to what degree. The trial court was of the opinion that the proximate cause of the death of Bataclan was not the overturning of the bus, but rather, the fire that burned the bus, including himself and his co-passengers who were unable to leave it; that at the time the fire started, Bataclan, though he must have suffered physical injuries, perhaps serious, was still alive, and so damages were awarded, not for his death, but for the physical injuries suffered by him. We disagree. A satisfactory definition of proximate cause is found in Volume 38, pages 695-696 of American jurisprudence, cited by plaintiffs-appellants in their brief. It is as follows:

. . . 'that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred.' And more comprehensively, 'the proximate legal cause is that acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinary prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom.

It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely causing him physical injuries, if through some event, unexpected and extraordinary, the overturned bus is set on fire, say, by

lightning, or if some highwaymen after looting the vehicle sets it on fire, and the passenger is burned to death, one might still contend that the proximate cause of his death was the fire and not the overturning of the vehicle. But in the present case under the circumstances obtaining in the same, we do not hesitate to hold that the proximate cause was the overturning of the bus, this for the reason that when the vehicle turned not only on its side but completely on its back, the leaking of the gasoline from the tank was not unnatural or unexpected; that the coming of the men with a lighted torch was in response to the call for help, made not only by the passengers, but most probably, by the driver and the conductor themselves, and that because it was dark (about 2:30 in the morning), the rescuers had to carry a light with them, and coming as they did from a rural area where lanterns and flashlights were not available; and what was more natural than that said rescuers should innocently approach the vehicle to extend the aid and effect the rescue requested from them. In other words, the coming of the men with a torch was to be expected and was a natural sequence of the overturning of the bus, the trapping of some of its passengers and the call for outside help. What is more, the burning of the bus can also in part be attributed to the negligence of the carrier, through is driver and its conductor. According to the witness, the driver and the conductor were on the road walking back and forth. They, or at least, the driver should and must have known that in the position in which the overturned bus was, gasoline could and must have leaked from the gasoline tank and soaked the area in and around the bus, this aside from the fact that gasoline when spilled, specially over a large area, can be smelt and directed even from a distance, and yet neither the driver nor the conductor would appear to have cautioned or taken steps to warn the rescuers not to bring the lighted torch too near the bus. Said negligence on the part of the agents of the carrier come under the codal provisions above-reproduced, particularly, Articles 1733, 1759 and 1763.

As regard the damages to which plaintiffs are entitled, considering the earning capacity of the deceased, as well as the other elements entering into a damage award, we are satisfied that the amount of SIX THOUSAND (P6,000) PESOS would constitute satisfactory compensation, this to include compensatory, moral, and other damages. We also believe that plaintiffs are entitled to attorney's fees, and assessing the legal services rendered by plaintiffs' attorneys not only in the trial court, but also in the course of the appeal, and not losing sight of the able briefs prepared by them, the attorney's fees may well be fixed at EIGHT HUNDRED (P800) PESOS for the loss of merchandise carried by the deceased in the bus, is adequate and will not be disturbed.

There is one phase of this case which disturbs if it does not shock us. According to the evidence, one of the passengers who, because of the injuries suffered by her, was hospitalized, and while in the hospital, she was

visited by the defendant Mariano Medina, and in the course of his visit, she overheard him speaking to one of his bus inspectors, telling said inspector to have the tires of the bus changed immediately because they were already old, and that as a matter of fact, he had been telling the driver to change the said tires, but that the driver did not follow his instructions. If this be true, it goes to prove that the driver had not been diligent and had not taken the necessary precautions to insure the safety of his passengers. Had he changed the tires, specially those in front, with new ones, as he had been instructed to do, probably, despite his speeding, as we have already stated, the blow out would not have occurred. All in all, there is reason to believe that the driver operated and drove his vehicle negligently, resulting in the death of four of his passengers, physical injuries to others, and the complete loss and destruction of their goods, and yet the criminal case against him, on motion of the fiscal and with his consent, was provisionally dismissed, because according to the fiscal, the witnesses on whose testimony he was banking to support the complaint, either failed or appear or were reluctant to testify. But the record of the case before us shows the several witnesses, passengers, in that bus, willingly and unhesitatingly testified in court to the effect of the said driver was negligent. In the public interest the prosecution of said erring driver should be pursued, this, not only as a matter of justice, but for the promotion of the safety of passengers on public utility buses. Let a copy of this decision be furnished the Department of Justice and the Provincial Fiscal of Cavite.

In view of the foregoing, with the modification that the damages awarded by the trial court are increased from ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND (P6,000) PESOS, and from SIX HUNDRED PESOS TO EIGHT HUNDRED (P800) PESOS, for the death of Bataclan and for the attorney's fees, respectively, the decision appealed is from hereby affirmed, with costs.

Paras, C. J., Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia, and Felix, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 82465 February 25, 1991

ST. FRANCIS HIGH SCHOOL, as represented by SPS. FERNANDO NANTES AND ROSARIO LACANDULA, BENJAMIN ILUMIN, TIRSO

DE CHAVEZ, LUISITO VINAS, CONNIE ARQUIO AND PATRIA CADIZ, petitioners,

vs.THE HONORABLE COURT OF APPEALS, ELEVENTH DIVISION and

DR. ROMULO CASTILLO and LILIA CADIZ, respondents.

Jose C. Flores, Jr. for petitioners.

Jovito E. Talabong for private respondents.

PARAS, J.:p

This is a petition for review of the decision * of the Court of Appeals, the dispositive portion of which reads:

WHEREFORE, the decision under appeal is hereby affirmed, with the following modifications: (1) Exemplary damages in the amount of P20,000.00 are hereby awarded to plaintiffs, in addition to the actual damages of P30,000.00, moral damages of P20,000.00 and attorney's fees in the amount of P15,000.00 awarded to plaintiffs in the decision under appeal; (2) St. Francis High School, represented by the Spouses Fernando Nantes and Rosario Lacandula, and Benjamin Illumin, are hereby held jointly and severally liable with defendants Connie Arquio, Tirso de Chaves, Luisito Vinas and Patria Cadis for the payment to plaintiffs of the abovementioned actual damages, moral damages, exemplary damages and attorney's fees, and for costs; and (3) Defendants Yoly Jaro and Nida Aragones are hereby absolved from liability, and the case against them, together with their respective counterclaims, is hereby ordered dismissed.

SO ORDERED. (p. 60, Rollo)

The complaint alleged that Ferdinand Castillo, then a freshman student of Section 1-C at the St. Francis High School, wanted to join a school picnic undertaken by Class I-B and Class I-C at Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents spouses Dr. Romulo Castillo and Lilia Cadiz Castillo, because of short notice, did not allow their son to join but merely allowed him to bring food to the teachers for the picnic, with the directive that he should go back home after doing so. However, because of persuasion of the teachers, Ferdinand went on with them to the beach.

During the picnic and while the students, including Ferdinand, were in the water, one of the female teachers was apparently drowning. Some of the students, including Ferdinand, came to her rescue, but in the process, it was Ferdinand himself who drowned. His body was recovered but efforts to resuscitate him ashore failed. He was brought to a certain Dr. Luna in Sariaya, Quezon and later to the Mt. Cannel General Hospital where he was pronounced dead on arrival.

Thereupon, respondent spouses filed a complaint docketed as Civil Case No. 8834, in the Regional Trial Court, Branch LVIII of Lucena City, against the St. Francis High School, represented by the spouses Fernando Nantes and Rosario Lacandula, Benjamin Illumin (its principal), and the teachers: Tirso de Chaves, Luisito Vinas, Connie Arquio, Nida Aragones, Yoly Jaro, and Patria Cadiz, for Damages which respondents allegedly incurred from the death of their 13-year old son, Ferdinand Castillo. Contending that the death of their son was due to the failure of the petitioners to exercise the proper diligence of a good father of the family in preventing their son's drowning, respondents prayed of actual, moral and exemplary damages, attorney's fees and expenses for litigation.

The trial court found in favor of the respondents and against petitioners-teachers Arquio, de Chaves, Vinas, Aragones, Jaro and Cadiz, ordering all of them jointly and severally to pay respondents the sum of P30,000.00 as actual damages, P20,000.00 as moral damages, P15,000.00 as attorney's fees, and to pay the costs. The court a quo reasoned:

Taking into consideration the evidence presented, this Court believes that the defendant teachers namely: Connie Arquio, Luisito Vinas, Tirso de Chaves, Yoly Jaro, Nida Aragones and Patria Cadiz had failed to exercise the diligence required of them by law under the circumstances to guard against the harm they had foreseen. (pp. 2930, Rollo)

xxx xxx xxx

While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the picnic site, the drowning incident had already occurred, such fact does not and cannot excuse them from their liability. In fact, it could be said that by coming late, they were remiss in their duty to safeguard the students. (p. 30, Rollo)

The students, young as they were then (12 to 13 years old), were easily attracted to the sea without aforethought of the dangers it offers. Yet, the precautions and reminders allegedly performed by the defendants-teachers definitely fell short of the

standard required by law under the circumstances. While the defendants-teachers admitted that some parts of the sea where the picnic was held are deep, the supposed lifeguards of the children did not even actually go to the water to test the depth of the particular area where the children would swim. And indeed the fears of the plaintiffs that the picnic area was dangerous was confirmed by the fact that three persons during the picnic got drowned at the same time. Had the defendant teachers made an actual and physical observation of the water before they allowed the students to swim, they could have found out that the area where the children were swimming was indeed dangerous. And not only that, the male teachers who according to the female teachers were there to supervise the children to ensure their safety were not even at the area where the children were swimming. They were somewhere and as testified to by plaintiffs' witness they were having a drinking spree. (pp. 55-56, Rollo)

On the other hand, the trial court dismissed the case against the St. Francis High School, Benjamin Illumin and Aurora Cadorna. Said the court a quo:

As shown and adverted to above, this Court cannot find sufficient evidence showing that the picnic was a school sanctioned one. Similarly no evidence has been shown to hold defendants Benjamin Illumin and Aurora Cadorna responsible for the death of Ferdinand Castillo together with the other defendant teachers. It has been sufficiently shown that Benjamin Illumin had himself not consented to the picnic and in fact he did not join it. On the other hand, defendant Aurora Cadorna had then her own class to supervise and in fact she was not amongst those allegedly invited by defendant Connie Arquio to supervise class I-C to which Ferdinand Castillo belongs. (p. 30, Rollo)

Both petitioners and respondents appealed to the Court of Appeals. Respondents-spouses assigned the following errors committed by the trial court:

1. The lower court erred in not declaring the defendant St. Francis High School and its administrator/principal Benjamin Illumin as equally liable not only for its approved co-curricular activities but also for those which they unreasonably failed to exercise control and supervision like the holding of picnic in the dangerous water of Talaan Beach, Sariaya, Quezon.

2. The lower court erred in not declaring the St. Francis High School and principal Benjamin Illumin as jointly and solidarily liable with their co-defendants-teachers Rosario Lacandula, et als., for the tragic death of Ferdinand Castillo in a picnic at Talaan Beach, Sariaya, Quezon, last March 20, 1982.

3. The lower court erred in not declaring higher amount for actual and moral damages for the untimely and tragic death of Ferdinand Castillo in favor of plaintiffs-appellants against all the defendants. (pp. 56-57, Rollo)

The Court of Appeals ruled:

We find plaintiffs-appellants' submission well-taken.

Even were We to find that the picnic in question was not a school-sponsored activity, nonetheless it cannot be gainsaid that the same was held under the supervision of the teachers employed by the said school, particularly the teacher in charge of Class I-C to whom the victim belonged, and those whom she invited to help her in supervising the class during the picnic. Considering that the court a quo found negligence on the part of the six defendants-teachers who, as such, were charged with the supervision of the children during the picnic, the St. Francis High School and the school principal, Benjamin Illumin, are liable under Article 2176 taken together with the 1st, 4th and 5th paragraphs of Article 2180 of the Civil Code. They cannot escape liability on the mere excuse that the picnic was not an "extra-curricular activity of the St. Francis High School." We find from the evidence that, as claimed by plaintiffs-appellants, the school principal had knowledge of the picnic even from its planning stage and had even been invited to attend the affair; and yet he did not express any prohibition against undertaking the picnic, nor did he prescribe any precautionary measures to be adopted during the picnic. At the least, We must find that the school and the responsible school officials, particularly the principal, Benjamin Illumin, had acquiesced to the holding of the picnic.

Under Article 2180, supra, the defendant school and defendant school principal must be found jointly and severally liable with the defendants-teachers for the damages incurred by the plaintiffs as a result of the death of their son. It is the rule that in cases where the above-cited provisions find application, the negligence of the employees in causing the injury or damage gives rise to a presumption of negligence on the part of the

owner and/or manager of the establishment (in the present case, St. Francis High School and its principal); and while this presumption is not conclusive, it may be overthrown only by clear and convincing proof that the owner and/or manager exercised the care and diligence of a good father of a family in the selection and/or supervision of the employee or employees causing the injury or damage (in this case, the defendants-teachers). The record does not disclose such evidence as would serve to overcome the aforesaid presumption and absolve the St. Francis High School and its principal from liability under the above-cited provisions.

As to the third assigned error interposed by plaintiffs-appellants, while We cannot but commiserate with the plaintiffs for the tragedy that befell them in the untimely death of their son Ferdinand Castillo and understand their suffering as parents, especially the victim's mother who, according to appellants, suffered a nervous breakdown as a result of the tragedy, We find that the amounts fixed by the court a quo as actual damages and moral damages (P30,000.00 and P20,000.00, respectively) are reasonable and are those which are sustained by the evidence and the law.

However, We believe that exemplary or corrective damages in the amount of P20,000.00 may and should be, as it is hereby, imposed in the present case by way of example of correction for the public good, pursuant to Article 2229 of the Civil Code. (pp. 57-59, Rollo)

On the other hand, petitioners-teachers assigned the following errors committed by the trial court:

1. ". . . in finding the defendants Connie Arquio, Tirso de Chavez, Luisito Vinas, Nida Aragones, Yoly Jaro and Patria Cadiz guilty of negligence and jointly and severally liable for damages such finding not being supported by facts and evidence.

2. ". . . in dismissing the counterclaim interposed by the defendants. (p. 59, Rollo)

On this score, respondent Court ruled:

The main thrust of defendants-appellants appeal is that plaintiffs, the parents of the victim Ferdinand Castillo, were not able to prove by their evidence that they did not give their son

consent to join the picnic in question. However, We agree with the trial court in its finding that whether or not the victim's parents had given such permission to their son was immaterial to the determination of the existence of liability on the part of the defendants for the damage incurred by the plaintiffs-appellants as a result of the death of their son. What is material to such a determination is whether or not there was negligence on the part of defendants vis-a-vis the supervision of the victim's group during the picnic; and, as correctly found by the trial court, an affirmative reply to this question has been satisfactorily established by the evidence, as already pointed out.

However, We sustain defendants-appellants insofar as two of the defendants-teachers, Yoly Jaro and Nida Aragones, are concerned. As to them, the trial court found:

While it is alleged that when defendants Yoly Jaro and Nida Aragones arrived at the picnic site, the drowning incident had already occurred, such fact does not and cannot excuse them from their liability. In fact, it could be said that by coming late, they were remiss in their duty to safeguard the students.

The evidence shows that these two defendants had satisfactorily explained why they were late in going to the picnic site, namely, that they had to attend to the entrance examination being conducted by the school which is part of their duty as teachers thereof. Since they were not at the picnic site during the occurrence in question, it cannot be said that they had any participation in the negligence attributable to the other defendants-teachers who failed to exercise diligence in the supervision of the children during the picnic and which failure resulted in the drowning of plaintiffs' son. Thus, We may not attribute any act or omission to the two teachers, Yoly Jaro and Nida Aragones, as to make them liable for the injury caused to the plaintiffs because of the death of their son resulting from his drowning at the picnic. Accordingly, they must be absolved from any liability.

As to the second assigned error raised by defendants-appellants, We agree with the court a quo that the counterclaim must be dismissed for lack of merit. (pp. 59-60, Rollo)

Hence, this petition.

The issues presented by petitioners are:

A) Whether or not there was negligence attributable to the defendants which will warrant the award of damages to the plaintiffs;

B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to the case at bar;

C) Whether or not the award of exemplary and moral damages is proper under the circumstances surrounding the case at bar. (pp. 81-82, Rollo)

In the resolution of January 16, 1989, We gave due course to the petition and required the parties to submit their respective memoranda.

The petition is impressed with merit.

If at all petitioners are liable for negligence, this is because of their own negligence or the negligence of people under them. In the instant case however, as will be shown hereunder, petitioners are neither guilty of their own negligence or guilty of the negligence of those under them.

Hence, it cannot be said that they are guilty at all of any negligence. Consequently they cannot be held liable for damages of any kind.

At the outset, it should be noted that respondent spouses, parents of the victim Ferdinand, allowed their son to join the excursion.

Testimony of Dr. Castillo on cross exam. by Atty. Flores

Q Now, when your son asked you for money to buy food, did you not ask him where he will bring this?

A I asked him where he was going, he answered, I am going to the picnic, and when I asked him where, he did not answer, sir.

Q And after giving the money, you did not tell him anything more?

A No more, sir.

Q And after that you just learned that your son join the picnic?

A Yes, sir.

Q And you came to know of it after the news that your son was drowned in the picnic came to you, is that correct?

A Yes, sir.

Q From 8:00 o'clock in the morning up to 12:00 o'clock noon of March 20, 1982, you did not know that your son join the picnic?

A No, sir, I did not know.

Q Did you not look for your son during that time?

A I am too busy with my profession, that is why I was not able, sir.

Q You did not ask your wife?

A I did not, sir.

Q And neither did your wife tell you that your son join the picnic?

A Later on after 12:00, sir.

Q And during that time you were too busy that you did not inquire whether your son have joined that picnic?

A Yes, sir.

(TSN, pp. 16-17, hearing of April 2, 1984 witness Romulo Castillo)

The fact that he gave money to his son to buy food for the picnic even without knowing where it will be held, is a sign of consent for his son to join the same. Furthermore.

Testimony of Dr. Lazaro on cross examination:

Q How did you conduct this mental and physical examination?

A I have interviewed several persons and the patient herself She even felt guilty about the death of her son because she cooked adobo for him so he could join the excursion where her son died of drowning.

Q Why were you able to say she was feeling guilty because she was the one who personally cooked the adobo for her son?

A It was during the interview that I had gathered it from the patient herself. She was very sorry had she not allowed her son to join the excursion her son would have not drowned. I don't know if she actually permitted her son although she said she cooked adobo so he could join. (Emphasis Supplied) (TSN, p. 19, hearing of April 30, 1984, Dr. Lazaro — witness).

Respondent Court of Appeals committed an error in applying Article 2180 of the Civil Code in rendering petitioner school liable for the death of respondent's son.

Article 2180, par. 4 states that:

The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.

xxx xxx xxx

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

Under this paragraph, it is clear that before an employer may be held liable for the negligence of his employee, the act or omission which caused damage or prejudice must have occurred while an employee was in the performance of his assigned tasks.

In the case at bar, the teachers/petitioners were not in the actual performance of their assigned tasks. The incident happened not within the school premises, not on a school day and most importantly while the teachers and students were holding a purely private affair, a picnic. It is clear from the beginning that the incident happened while some members of the I-C class of St. Francis High School were having a picnic at Talaan Beach. This picnic had no permit from the school head or its principal,

Benjamin Illumin because this picnic is not a school sanctioned activity neither is it considered as an extra-curricular activity.

As earlier pointed out by the trial court, mere knowledge by petitioner/principal Illumin of the planning of the picnic by the students and their teachers does not in any way or in any manner show acquiescence or consent to the holding of the same. The application therefore of Article 2180 has no basis in law and neither is it supported by any jurisprudence. If we were to affirm the findings of respondent Court on this score, employers wig forever be exposed to the risk and danger of being hailed to Court to answer for the misdeeds or omissions of the employees even if such act or omission he committed while they are not in the performance of their duties.

Finally, no negligence could be attributable to the petitioners-teachers to warrant the award of damages to the respondents-spouses.

Petitioners Connie Arquio the class adviser of I-C, the section where Ferdinand belonged, did her best and exercised diligence of a good father of a family to prevent any untoward incident or damages to all the students who joined the picnic.

In fact, Connie invited co-petitioners Tirso de Chavez and Luisito Vinas who are both P.E. instructors and scout masters who have knowledge in First Aid application and swimming. Moreover, even respondents' witness, Segundo Vinas, testified that "the defendants (petitioners herein) had life savers especially brought by the defendants in case of emergency." (p. 85, Rollo) The records also show that both petitioners Chavez and Vinas did all what is humanly possible to save the child.

Testimony of Luisito Vinas on cross examination,

Q And when you saw the boy, Ferdinand Castillo, you approached the boy and claim also having applied first aid on him?

A Yes, sir.

Q And while you were applying the so called first aid, the children were covering you up or were surrounding you?

A Yes, sir.

Q You were rattled at that time, is it not?

A No, sir.

Q You mean you were in calm and peaceful condition?

A Yes, sir.

Q Despite the fact that the boy was no longer responding to your application of first aid?

A Yes, sir.

Q You have never been disturbed, "nababahala" in the process of your application of the first aid on the body of Ferdinand Castillo?

A No, sir, because we were attending to the application of first aid that we were doing, sir.

Q After you have applied back to back pressure and which you claimed the boy did not respond, were you not disturb anyway?

A I was disturbed during that time, sir.

Q For how many minutes have you applied the back to back pressure?

A From 9 to 11 times, sir.

Q You mean 9 to 11 times of having applied the pressure of your body on the body of Ferdinand Castillo?

A Yes, sir.

Q Will you please describe how you applied a single act of back to back pressure?

A This has been done by placing the boy lay first downwards, then the face was a little bit facing right and doing it by massaging the back of the child, sir." (TSN, pp. 32-35, hearing of July 30, 1984)

Testimony of Tirso de Chavez on direct examination

ATTY. FLORES:

Q Who actually applied the first aid or artificial respiration to the child?

A Myself, sir.

Q How did you apply the first aid to the guy?

A The first step that I took, with the help of Mr. Luisito Vinas, was I applied back to back pressure and took notice of the condition of the child. We placed the feet in a higher position, that of the head of the child, sir.

Q After you have placed the boy in that particular position, where the feet were on a higher level than that of the head, what did you do next?

A The first thing that we did, particularly myself, was that after putting the child in that position, I applied the back to back pressure and started to massage from the waistline up, but I noticed that the boy was not responding, sir.

Q For how long did you apply this back to back pressure on the boy?

A About 10 seconds, sir.

Q What about Mr. Vinas?

A Almost the same a little longer, for 15 seconds, sir.

Q After you noticed that the boy was not responding, what did you do?

A When we noticed that the boy was not responding, we changed the position of the boy by placing the child facing upwards laying on the sand then we applied the mouth to mouth resuscitation, sir. (pp. 92-93, Rollo)

With these facts in mind, no moral nor exemplary damages may be awarded in favor of respondents-spouses. The case at bar does not fall under any of the grounds to grant moral damages.

Art. 2217. Moral Damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission.

Moreover, as already pointed out hereinabove, petitioners are not guilty of any fault or negligence, hence, no moral damages can be assessed against them.

While it is true that respondents-spouses did give their consent to their son to join the picnic, this does not mean that the petitioners were already relieved of their duty to observe the required diligence of a good father of a family in ensuring the safety of the children. But in the case at bar, petitioners were able to prove that they had exercised the required diligence. Hence, the claim for moral or exemplary damages becomes baseless.

PREMISES CONSIDERED, the questioned decision dated November 19, 1987, finding petitioners herein guilty of negligence and liable for the death of Ferdinand Castillo and awarding the respondents damages, is hereby SET ASIDE insofar as the petitioners herein are concerned, but the portion of the said decision dismissing their counterclaim, there being no merit, is hereby AFFIRMED.

SO ORDERED.

Sarmiento and Regalado, JJ., concur.

 

Separate Opinions 

PADILLA, J., dissenting:

I regret that I can not concur with the majority. I believe that the reversal of respondent appellate court's decision gives rise to a situation which was neither contemplated nor intended by the applicable laws. I refer more particularly to the fact that the ponencia has left private respondents-spouses with no one to hold liable for the untimely demise of their son. On the other hand, they have, to my mind, been wronged. and they should at least be recompensed for their sufferings. For this and other reasons stated hereunder. I dissent.

The issues, as adopted by the ponencia from the record, are as follows:

A) Whether or not there was negligence attributable to the defendants which will warrant the award of damages to the plaintiffs;

B) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to the case at bar;

C) Whether or not the award of exemplary and moral damages is proper under the circumstances surrounding the case at bar. 1

In my opinion, the record clearly shows negligence on the part of the petitioners-teachers, with the exception of Aragones and Jaro. As to these two, respondent court absolved them from liability for their having satisfactorily demonstrated lack of participation in the negligence of their colleagues. I am in agreement with said conclusion. But I also agree with the respondent court in its finding that Tirso de Chavez, Luisito Viñas, Connie Arguio and Patria Cadiz failed to exercise DILIGENT SUPERVISION over the children during the ill-fated excursion.

I may concede, albeit with reservation, that the afore-mentioned petitioners may not have been negligent in finding ways and means to revive the young Castillo AFTER the drowning incident. Their application of first-aid measures may have failed to revive him but the petitioners had fully exhausted their efforts to save the deceased. This concession, however, is given with hesitation, for there is indication in the record that petitioner petitioners may have tarried too long in securing immediate medical attention for the deceased. I refer to the trial court's finding that "it still took the jeep which brought Ferdinand Castillo to the poblacion six (6) minutes before it finally moved to await the other teachers." 2

All this aside, I am really disturbed about, and would like to emphasize the demonstrated lack of diligence on the part of the petitioners-teachers BEFORE the unfortunate incident took place. Despite awareness that the waters in the area were deep, petitioners- teachers did not take concrete steps to make sure their wards did not stray too far and too deeply. Even if they were not actually informed of the possible dangers which the area posed, petitioners-teachers should have first "tested the waters", so to speak, to ensure which parts thereof were safe for swimming purposes. However, this was not the case for as testified to by petitioner de Chavez, "they admitted that they did not even go to the water to check its depth although they were aware that some parts of it were deep." 3 At best, it appears that only oral safety instructions were imparted to the young excursionists.

But, what I find most disturbing is the fact that at the time the trouble arose, Viñas and de Chavez, the male teachers who were supposed to

ensure the children's safety, being physical education instructors, were nowhere within the immediate vicinity but were, in fact, as admitted by the latter, "at his house getting some foods (sic) and thinks." The Court a quo even went as far as to say that "they were somewhere and as testified to by plaintiffs' witness they were having a drinking spree!" 4

It thus appears that the petitioners-teachers failed to exercise the proper diligence or what I may refer to as DILIGENCE BEFORE THE FACT. As earlier mentioned, the steps taken to revive the deceased may be considered adequate, despite my reservations, but the over-all lack of diligence on the part of petitioners-teachers suffices to put them within the standards set by this Court in determining the existence of negligence. As held in Hedy Gan y Yu vs. Court of Appeals, et al., the test in determining whether or not a person is negligent in doing an act whereby injury or damage results to the person or property of another is this: Would a prudent man in the position of the person to whom negligence is attributed foresee harm to the person injured as a reasonable consequence of the course about to be pursued? If so, the law imposes the duty on the doer TO TAKE PRECAUTION against its mischievous results and the failure to do so constitutes negligence. 5

The next issue to be addressed pertains to the liability of the petitioner St. Francis High School as represented by petitioners-spouses Fernando Nantes and Rosario Lacandula. The majority would like to emphasize the fact that the unfortunate incident having occurred during a purely private affair, the teachers involved therein were not in the actual performance of their assigned tasks. Consequently, any act or omission caused by them cannot bind their employer, petitioner St. Francis High School.

I take exception to this proposition. Although the excursion may not have been attended by the appropriate school authorities, the presence or stamp of authority of the school nevertheless pervaded by reason of the participation not of one but of several teachers, the petitioners. As found by the court a quo, the excursion was an activity "organized by the teachers themselves, for the students and to which the student, NATURALLY, acceded." 6

Moreover, the record indicates that petitioner Benjamin Illumin, school principal, knew of the excursion and had, in fact, been invited to attend. As the majority see it, such knowledge does not in any manner show acquiescence or consent to the holding of the excursion, a view which I do not accept. It seems to me that having known of the forthcoming activity, petitioner Illumin, as school principal, should have taken appropriate measures to ensure the safety of his students. Having preferred to remain silent, and even indifferent, he now seeks excuse from such omission by invoking his alleged lack of consent to the excursion. But it is precisely his

silence and negligence in performing his role as principal head of the school that must be construed as an implied consent to such activity.

As administrative head (principal) of St. Francis High School, petitioner Illumin acted as the agent of his principal (the school) or its representatives, the petitioners-spouses Nantes and Lacandula. Consequently, and as found by the respondent court. Article 2176 in conjunction with Article 2180, paragraphs (1) and (5) are applicable to the situation. In the application of these provisions, the negligence of the employee in causing injury or damage gives rise to a presumption of negligence on the part of the owner and/or manager of the establishment. While this presumption is not conclusive, it may be overcome only by clear and convincing evidence that the owner and/or manager exercised the care and diligence of a good father of a family in the selection and/or supervision of the employees causing the injury or damage. I agree with the respondent court that no proof was presented to absolve the owner and/or manager, herein petitioners-spouses Nantes and Lacandula, and Illumin. Thus, as correctly held by the respondent court, they too must be accountable for the death of Ferdinand Castillo.

The majority view appears to be apprehensive that employers will be continuously held accountable for misdeeds of their employees committed even when the same are done not in the actual exercise of their duties. I fail to appreciate such apprehensions, which need not arise on the part of employers, so long as the latter have no knowledge of, or give consent to, such act or omission on the part of their employee.

Educational institutions have responsibilities which cannot be equated with those of the ordinary employer or business establishment. Such institutions, particularly the primary and secondary schools, hold the tremendous responsibility of exercising supervision over young children. Too often, such schools avoid liabilities, as in the instant cage, by invoking the absence of approval on their part for activities that may be held outside school premises or held on a day not a school day. It is about time that such schools realize that theirs is not a mere moneymaking entity or one impersonally established for the sole task of teaching the rudimentary skills of "reading, writing and 'rithmetic." They must consider that their students are children of tender years who are in need of adequate care, continuing attention and guidance.

Anent the issue of damages, from the foregoing discussion the award thereof is clearly proper. I only wish to point out the basis for moral damages which is found in Article 2219 of the Civil Code, to wit:

Moral damages may be recovered in the following and analogous cases:

1. . . . .

2. Quasi-delicts causing physical injuries;

xxx xxx xxx

It should be noted that the term "physical injuries" must not be construed in its penal sense alone but rather in its generic sense, in the spirit of this Court's rulings in Carandang vs. Santiago (51 O.G. 2878) and Madeja vs. Caro, et al., (G.R. No. 51183, 21 December 1983, 126 SCRA 293). Thus, the death of private respondents' son as a result of petitioners' negligence gives rise to an action for quasi-delict which, as provided, entitles the claimant to an award of moral damages.

In the light of the foregoing, I vote to AFFIRM the decision of the respondent court and thus hold the petitioners jointly and severally liable for the death of Ferdinand Castillo.

Melencio-Herrera, J., concur.

 

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 156037             May 28, 2007

MERCURY DRUG CORPORATION, Petitioner, vs.

SEBASTIAN M. BAKING, Respondent.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari1 assailing the Decision2 dated May 30, 2002 and Resolution dated November 5, 2002 of the Court of Appeals in CA-G.R. CV No. 57435, entitled "Sebastian M. Baking, plaintiff-appellee, versus Mercury Drug Co. Inc., defendant-appellant."

The facts are:

On November 25, 1993, Sebastian M. Baking, respondent, went to the clinic of Dr. Cesar Sy for a medical check-up. On the following day, after undergoing an ECG, blood, and hematology examinations and urinalysis, Dr. Sy found that respondent’s blood sugar and triglyceride were above normal levels. Dr. Sy then gave respondent two medical prescriptions – Diamicron for his blood sugar and Benalize tablets for his triglyceride.

Respondent then proceeded to petitioner Mercury Drug Corporation (Alabang Branch) to buy the prescribed medicines. However, the saleslady misread the prescription for Diamicron as a prescription for Dormicum. Thus, what was sold to respondent was Dormicum, a potent sleeping tablet.

Unaware that what was given to him was the wrong medicine, respondent took one pill of Dormicum on three consecutive days –November 6, 1993 at 9:00 p.m., November 7 at 6:00 a.m., and November 8 at 7:30 a.m.

On November 8 or on the third day he took the medicine, respondent figured in a vehicular accident. The car he was driving collided with the car

of one Josie Peralta. Respondent fell asleep while driving. He could not remember anything about the collision nor felt its impact.

Suspecting that the tablet he took may have a bearing on his physical and mental state at the time of the collision, respondent returned to Dr. Sy’s clinic. Upon being shown the medicine, Dr. Sy was shocked to find that what was sold to respondent was Dormicum, instead of the prescribed Diamicron.

Thus, on April 14, 1994, respondent filed with the Regional Trial Court (RTC), Branch 80 of Quezon City a complaint for damages against petitioner, docketed as Civil Case No. Q-94-20193.

After hearing, the trial court rendered its Decision dated March 18, 1997 in favor of respondent, thus:

WHEREFORE, premises considered, by preponderance of evidence, the Court hereby renders judgment in favor of the plaintiff and against the defendant ordering the latter to pay mitigated damages as follows:

1. P250,000.00 as moral damages;

2. P20,000.00 as attorney’s fees and litigation expenses;

3. plus ½% of the cost of the suit.

SO ORDERED.

On appeal, the Court of Appeals, in its Decision, affirmed in toto the RTC judgment. Petitioner filed a motion for reconsideration but it was denied in a Resolution dated November 5, 2002.

Hence, this petition.

Petitioner contends that the Decision of the Court of Appeals is not in accord with law or prevailing jurisprudence.

Respondent, on the other hand, maintains that the petition lacks merit and, therefore, should be denied.

The issues for our resolution are:

1. Whether petitioner was negligent, and if so, whether such negligence was the proximate cause of respondent’s accident; and

2. Whether the award of moral damages, attorney’s fees, litigation expenses, and cost of the suit is justified.

Article 2176 of the New Civil Code provides:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

To sustain a claim based on the above provision, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff.3

There is no dispute that respondent suffered damages.

It is generally recognized that the drugstore business is imbued with public interest. The health and safety of the people will be put into jeopardy if drugstore employees will not exercise the highest degree of care and diligence in selling medicines. Inasmuch as the matter of negligence is a question of fact, we defer to the findings of the trial court affirmed by the Court of Appeals.

Obviously, petitioner’s employee was grossly negligent in selling to respondent Dormicum, instead of the prescribed Diamicron. Considering that a fatal mistake could be a matter of life and death for a buying patient, the said employee should have been very cautious in dispensing medicines. She should have verified whether the medicine she gave respondent was indeed the one prescribed by his physician. The care required must be commensurate with the danger involved, and the skill employed must correspond with the superior knowledge of the business which the law demands.41awphi1.nét

Petitioner contends that the proximate cause of the accident was respondent’s negligence in driving his car.

We disagree.

Proximate cause is defined as any cause that produces injury in a natural and continuous sequence, unbroken by any efficient intervening cause, such that the result would not have occurred otherwise. Proximate cause is determined from the facts of each case, upon a combined consideration of logic, common sense, policy, and precedent.5

Here, the vehicular accident could not have occurred had petitioner’s employee been careful in reading Dr. Sy’s prescription. Without the potent effects of Dormicum, a sleeping tablet, it was unlikely that respondent would fall asleep while driving his car, resulting in a collision.

Complementing Article 2176 is Article 2180 of the same Code which states:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.

x x x

The owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.

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

x x x

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed the diligence of a good father of a family to prevent damage.

It is thus clear that the employer of a negligent employee is liable for the damages caused by the latter. When an injury is caused by the negligence of an employee, there instantly arises a presumption of the law that there has been negligence on the part of the employer, either in the selection of his employee or in the supervision over him, after such selection. The presumption, however, may be rebutted by a clear showing on the part of the employer that he has exercised the care and diligence of a good father of a family in the selection and supervision of his employee.6 Here, petitioner's failure to prove that it exercised the due diligence of a good father of a family in the selection and supervision of its employee will make it solidarily liable for damages caused by the latter.

As regards the award of moral damages, we hold the same to be in order. Moral damages may be awarded whenever the defendant’s wrongful act or omission is the proximate cause of the plaintiff’s physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury in the cases specified or analogous to those provided in Article 2219 of the Civil Code.7

Respondent has adequately established the factual basis for the award of moral damages when he testified that he suffered mental anguish and anxiety as a result of the accident caused by the negligence of petitioner’s employee.

There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages, since each case must be governed by its own peculiar facts. However, it must be commensurate to the loss or injury suffered.8 Taking into consideration the attending circumstances here, we are convinced that the amount awarded by the trial court is exorbitant. Thus, we reduce the amount of moral damages from P250,000.00 to P50,000.00 only.

In addition, we also deem it necessary to award exemplary damages. Article 2229 allows the grant of exemplary damages by way of example or correction for the public good. As mentioned earlier, the drugstore business is affected with public interest. Petitioner should have exerted utmost diligence in the selection and supervision of its employees. On the part of the employee concerned, she should have been extremely cautious in dispensing pharmaceutical products. Due to the sensitive nature of its business, petitioner must at all times maintain a high level of meticulousness. Therefore, an award of exemplary damages in the amount of P25,000.00 is in order.1awphi1.nét

On the matter of attorney’s fees and expenses of litigation, it is settled that the reasons or grounds for the award thereof must be set forth in the decision of the court.9 Since the trial court’s decision did not give the basis of the award, the same must be deleted. In Vibram Manufacturing Corporation v. Manila Electric Company,10 we held:

Likewise, the award for attorney’s fees and litigation expenses should be deleted. Well-enshrined is that "an award for attorney’s fees must be stated in the text of the court’s decision and not in the dispositive portion only" (Consolidated Bank and Trust Corporation (Solidbank) v. Court of Appeals, 246 SCRA 193 [1995] and Keng Hua Paper Products, Inc. v. Court of Appeals, 286 SCRA 257 [1998]). This is also true with the litigation expenses where the body of the decision discussed nothing for its basis.

WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 57435 are AFFIRMED with modification in the sense that (a) the award of moral damages to respondent is reduced from P250,000.00 to P50,000.00; (b) petitioner is likewise ordered to pay said respondent exemplary damages in the amount of P25,000.00; and (c) the award of attorney’s fees and litigation expenses is deleted.

Costs against petitioner.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-28589 January 8, 1973

RAFAEL ZULUETA, ET AL., plaintiffs-appellees, vs.

PAN AMERICAN WORLD AIRWAYS, INC., defendant-appellant.

Alfredo L. Benipayo for plaintiffs-appellee Rafael Zulueta and Carolina Zulueta.

Justo L. Albert for plaintiff-appellee Telly Albert Zulueta.

V.E. del Rosario and Associates and Salcedo, Del Rosario, Bito, Misa and Lozada for defendant-appellant.

R E S O L U T I O N

CONCEPCION, C.J.:

Both parties in this case have moved for the reconsideration of the decision of this Court promulgated on February 29, 1972. Plaintiffs maintain that the decision appealed from should be affirmed in toto. The defendant, in turn, prays that the decision of this Court be "set aside ... with or without a new trial, ... and that the complaint be dismissed, with costs; or, in the alternative, that the amount of the award embodied therein be considerably reduced." .

Subsequently to the filing of its motion for reconsideration, the defendant filed a "petition to annul proceedings and/or to order the dismissal of plaintiffs-appellees' complaint" upon the ground that "appellees' complaint actually seeks the recovery of only P5,502.85 as actual damages, because, for the purpose of determining the jurisdiction of the lower court, the unspecified sums representing items of alleged damages, may not be considered, under the settled doctrines of this Honorable Court," and "the jurisdiction of courts of first instance when the complaint in the present case was filed on Sept. 30, 1965" was limited to cases "in which the demand, exclusive of interest, or the value of the property in controversy amounts to more than ten thousand pesos" and "the mere fact that the complaint also prays for unspecified moral damages and attorney's fees, does not bring the action within the jurisdiction of the lower court."

We find no merit in this contention. To begin with, it is not true that "the unspecified sums representing items or other alleged damages, may not be considered" — for the purpose of determining the jurisdiction of the court — "under the settled doctrines of this Honorable Court." In fact, not a single case has been cited in support of this allegation.

Secondly, it has been held that a clam for moral damages is one not susceptible of pecuniary estimation. 1 In fact, Article 2217 of the Civil Code of the Philippines explicitly provides that "(t)hough incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission." Hence, "(n)o proof pecuniary loss necessary" — pursuant to Article 2216 of the same Code — "in order that moral ... damages may be adjudicated." And "(t)he assessment of such damages ... is left to the discretion of the court" - said article adds - "according to the circumstances of each case." Appellees' complaint is, therefore, within the original jurisdiction of courts of first instance, which includes "all civil actions in which the subject of the litigation is not capable of pecuniary estimation." 2

Thirdly, in its answer to plaintiffs' original and amended complainants, defendant had set up a counterclaim in the aggregate sum of P12,000, which is, also, within the original jurisdiction of said courts, thereby curing the alleged defect if any, in plaintiffs' complaint. 3

We need not consider the jurisdictional controversy as to the amount the appellant sues to recover because the counterclaim interposed establishes the jurisdiction of the District Court. Merchants' Heat & Light Co. v. James B. Clow & Sons, 204 U.S. 286, 27 S. Ct. 285, 51 L. Ed. 488; O. J. Lewis Mercantile Co. v. Klepner, 176 F. 343 (C.C.A. 2), certiorari denied 216 U.S. 620, 30 S Ct. 575, 54 L. Ed. 641. ... . 4

... courts have said that "when the jurisdictional amount is in question, the tendering of a counterclaim in an amount which in itself, or added to the amount claimed in the petition, makes up a sum equal to the amount necessary to the jurisdiction of this court, jurisdiction is established, whatever may be the state of the plaintiff's complaint." American Sheet & Tin Plate Co. v. Winzeler (D.C.) 227 F. 321, 324. 5

Thus, in Ago v. Buslon, 6 We held:

... . Then, too, petitioner's counterclaim for P37,000.00 was, also, within the exclusive original jurisdiction of the latter courts, and there are ample precedents to the effect that "although the original claim involves less than the jurisdictional amount, ... jurisdiction can be sustained if the counterclaim (of the compulsory type)" — such as the one set up by petitioner herein, based upon the damages allegedly suffered by him in consequence of the filing of said complaint — "exceeds the jurisdictional amount." (Moore Federal Practice, 2nd ed. [1948], Vol. 3, p. 41; Ginsburg vs. Pacific Mutual Life Ins. Co. of

California, 69 Fed. [2d] 97; Home Life Ins. Co. vs. Sipp., 11 Fed. [2d]474; American Sheet & Tin Plate Co. vs. Winzeler [D.C.], 227 Fed. 321, 324; Brix vs. People's Mutual Life Ins. Co., 41 P. 2d. 537, 2 Cal. 2d. 446; Emery vs. Pacific Employees Ins. Co., 67 P. 2d. 1046, 8 Cal. 2d. 663).

Needless to say, having not only failed to question the jurisdiction of the trial court — either in that court or in this Court, before the rendition of the latter's decision, and even subsequently thereto, by filing the aforementioned motion for reconsideration and seeking the reliefs therein prayed for — but, also, urged both courts to exercise jurisdiction over the merits of the case, defendant is now estopped from impugning said jurisdiction. 7

Before taking up the specific questions raised in defendant's motion for reconsideration, it should be noted that the same is mainly predicated upon the premise that plaintiffs' version is inherently incredible, and that this Court should accept the theory of the defense to the effect that petitioner was off-loaded because of a bomb-scare allegedly arising from his delay in boarding the aircraft and subsequent refusal to open his bags for inspection. We need not repeat here the reasons given in Our decision for rejecting defendant's contention and not disturbing the findings of fact of His Honor, the Trial Judge, who had the decided advantage — denied to Us — of observing the behaviour of the witnesses in the course of the trial and found those of the plaintiffs worthy of credence, not the evidence for the defense.

It may not be amiss however, to stress the fact that, in his written report, made in transit from Wake to Manila — or immediately after the occurrence and before the legal implications or consequences thereof could have been the object of mature deliberation, so that it could, in a way, be considered as part of the res gestae — Capt. Zentner stated that Zulueta had been off-loaded "due to drinking" and "belligerent attitude," thereby belying the story of the defense about said alleged bomb-scare, and confirming the view that said agent of the defendant had acted out of resentment because his ego had been hurt by Mr. Zulueta's adamant refusal to be bullied by him. Indeed, had there been an iota of truth in said story of the defense, Capt. Zentner would have caused every one of the passengers to be frisked or searched and the luggage of all of them examined — as it is done now — before resuming the flight from Wake Island. His failure to do so merely makes the artificious nature of defendant's version more manifest. Indeed, the fact that Mrs. Zulueta and Miss Zulueta were on board the plane shows beyond doubt that Mr. Zulueta could not possibly have intended to blow it up.

The defense tries to explain its failure to introduce any evidence to contradict the testimony of Mr. Zulueta as to why he had gone to the beach and what he did there, alleging that, in the very nature of things, nobody else could have witnessed it. Moreover, the defense insists, inter alia, that the testimony of Mr. Zulueta is inherently incredible because he had no idea as to how many toilets the plane had; it could not have taken him an hour to relieve himself in the beach; there were eight (8) commodes at the terminal toilet for men ; if he felt the need of relieving himself, he would have seen to it that the soldiers did not beat him to the terminal toilets; he did not tell anybody about the reason for going to the beach, until after the plane had taken off from Wake.

We find this pretense devoid of merit. Although Mr. Zulueta had to look for a secluded place in the beach to relieve himself, beyond the view of others, defendant's airport manager, whom Mr. Zulueta informed about it, soon after the departure of the plane, could have forthwith checked the veracity of Mr. Zulueta's statement by asking him to indicate the specific place where he had been in the beach and then proceeding thereto for purposes of verification.

Then, again, the passenger of a plane seldom knows how many toilets it has. As a general rule, his knowledge is limited to the toilets for the class — first class or tourist class — in which he is. Then, too, it takes several minutes for the passengers of big aircrafts, like those flying from the U.S. to the Philippines, to deplane. Besides, the speed with which a given passenger may do so depends, largely, upon the location of his seat in relation to the exit door. He cannot go over the heads of those nearer than he thereto. Again, Mr. Zulueta may have stayed in the toilet terminal for some time, expecting one of the commodes therein to be vacated soon enough, before deciding to go elsewhere to look for a place suitable to his purpose. But he had to walk, first, from the plane to the terminal building and, then, after vainly waiting therein for a while, cover a distance of about 400 yards therefrom to the beach, and seek there a place not visible by the people in the plane and in the terminal, inasmuch as the terrain at Wake Island is flat. What is more, he must have had to takeoff part, at least, of his clothing, because, without the facilities of a toilet, he had to wash himself and, then, dry himself up before he could be properly attired and walk back the 400 yards that separated him from the terminal building and/or the plane. Considering, in addition to the foregoing, the fact that he was not feeling well, at that time, We are not prepared to hold that it could not have taken him around an hour to perform the acts narrated by him.

But, why — asks the defendant — did he not reveal the same before the plane took off? The record shows that, even before Mr. Zulueta had reached the ramp leading to the plane, Capt. Zentner was already demonstrating at him in an intemperate and arrogant tone and attitude ("What do you think

you are?), thereby impelling Mr. Zulueta to answer back in the same vein. As a consequence, there immediately ensued an altercation in the course of which each apparently tried to show that he could not be cowed by the other. Then came the order of Capt. Zentner to off-load all of the Zuluetas, including Mrs. Zulueta and the minor Miss Zulueta, as well as their luggage, their overcoats and other effects handcarried by them; but, Mr. Zulueta requested that the ladies be allowed to continue the trip. Meanwhile, it had taken time to locate his four (4) pieces of luggage. As a matter of fact, only three (3) of them were found, and the fourth eventually remained in the plane. In short, the issue between Capt. Zentner and Mr. Zulueta had been limited to determining whether the latter would allow himself to be browbeaten by the former. In the heat of the altercation, nobody had inquired about the cause of Mr. Zulueta's delay in returning to the plane, apart from the fact that it was rather embarrassing for him to explain, in the presence and within the hearing of the passengers and the crew, then assembled around them, why he had gone to the beach and why it had taken him some time to answer there a call of nature, instead of doing so in the terminal building.

Defendant's motion for reconsideration assails: (1) the amount of damages awarded as excessive; (2) the propriety of accepting as credible plaintiffs' theory; (3) plaintiffs' right to recover either moral or exemplary damages; (4) plaintiffs' right to recover attorney's fees; and (5) the non-enforcement of the compromise agreement between the defendant and plaintiff's wife, Mrs. Zulueta. Upon the other hand, plaintiffs' motion for reconsideration contests the decision of this Court reducing the amount of damages awarded by the trial court to approximately one-half thereof, upon the ground, not only that, contrary to the findings of this Court, in said decision, plaintiff had not contributed to the aggravation of his altercation or incident with Capt. Zentner by reacting to his provocation with extreme belligerency thereby allowing himself to be dragged down to the level on which said agent of the defendant had placed himself, but, also, because the purchasing power of our local currency is now much lower than when the trial court rendered its appealed decision, over five (5) years ago, on July 5, 1967, which is an undeniable and undisputed fact. Precisely, for this reason, defendant's characterization as exorbitant of the aggregate award of over P700,000 by way of damages, apart from attorney's fees in the sum of P75,000, is untenable. Indeed, said award is now barely equivalent to around 100,000 U. S. dollars.

It further support of its contention, defendant cites the damages awarded in previous cases to passengers of airlines, 8 as well as in several criminal cases, and some cases for libel and slander. None of these cases is, however, in point. Said cases against airlines referred to passengers who were merely constrained to take a tourist class accommodation, despite the fact that they had first class tickets, and that although, in one of such cases,

there was proof that the airline involved had acted as it did to give preference to a "white" passenger, this motive was not disclosed until the trial in court. In the case at bar, plaintiff Rafael Zulueta was "off-loaded" at Wake Island, for having dared to retort to defendant's agent in a tone and manner matching, if not befitting his intemperate language and arrogant attitude. As a consequence, Capt. Zentner's attempt to humiliate Rafael Zulueta had boomeranged against him (Zentner), in the presence of the other passengers and the crew. It was, also, in their presence that defendant's agent had referred to the plaintiffs as "monkeys," a racial insult not made openly and publicly in the abovementioned previous cases against airlines.

In other words, Mr. Zulueta was off-loaded, not to protect the safety of the aircraft and its passengers, but to retaliate and punish him for the embarrassment and loss of face thus suffered by defendant's agent. This vindictive motive is made more manifest by the note delivered to Mr. Zulueta by defendant's airport manager at Wake Island, Mr. Sitton, stating that the former's stay therein would be "for a minimum of one week," during which he would be charged $13.30 per day. This reference to a "minimum of one week" revealed the intention to keep him there stranded that long, for no other plane, headed for Manila, was expected within said period of time, although Mr. Zulueta managed to board, days later, a plane that brought him to Hawaii, whence he flew back to the Philippines, via Japan.

Neither may criminal cases, nor the cases for libel and slander cited in the defendant's motion for reconsideration, be equated with the present case. Indeed, in ordinary criminal cases, the award for damages is, in actual practice, of purely academic value, for the convicts generally belong to the poorest class of society. There is, moreover, a fundamental difference between said cases and the one at bar. The Zuluetas had a contract of carriage with the defendant, as a common carrier, pursuant to which the latter was bound, for a substantial monetary consideration paid by the former, not merely to transport them to Manila, but, also, to do so with "extraordinary diligence" or "utmost diligence." 9 The responsibility of the common carrier, under said contract, as regards the passenger's safety, is of such a nature, affecting as it does public interest, that it "cannot be dispensed with" or even "lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise." 10 In the present case, the defendant did not only fail to comply with its obligation to transport Mr. Zulueta to Manila, but, also, acted in a manner calculated to humiliate him, to chastise him, to make him suffer, to cause to him the greatest possible inconvenience, by leaving him in a desolate island, in the expectation that he would be stranded there for a "minimum of one week" and, in addition thereto, charged therefor $13.30 a day.

It is urged by the defendant that exemplary damages are not recoverable in quasi-delicts, pursuant to Article 2231 of our Civil Code, except when the defendant has acted with "gross negligence," and that there is no specific finding that it had so acted. It is obvious, however, that in off-loading plaintiff at Wake Island, under the circumstances heretofore adverted to, defendant's agents had acted with malice aforethought and evident bad faith. If "gross negligence" warrants the award of exemplary damages, with more reason is its imposition justified when the act performed is deliberate, malicious and tainted with bad faith. Thus, in Lopez v. PANAM, 11 We held:

The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good. Defendant having breached its contracts in bad faith, the court, as stated earlier, may award exemplary damages in addition to moral damages (Articles 2229, 2232, New Civil Code.)

Similarly, in NWA v. Cuenca, 12 this Court declared that an award for exemplary damages was justified by the fact that the airline's "agent had acted in a wanton, reckless and oppressive manner" in compelling Cuenca, upon arrival at Okinawa, to transfer, over his objection, from the first class, where he was accommodated from Manila to Okinawa, to the tourist class, in his trip to Japan, "under threat of otherwise leaving him in Okinawa," despite the fact that he had paid in full the first class fare and was issued in Manila a first class ticket.

Defendant cites Rotea v. Halili, 13 in support of the proposition that a principal is not liable for exemplary damages owing to acts of his agent unless the former has participated in said acts or ratified the same. Said case involved, however, the subsidiary civil liability of an employer arising from criminal acts of his employee, and "exemplary damages ... may be imposed when the crime was committed with one or more aggravating circumstances." 14 Accordingly, the Rotea case is not in point, for the case at bar involves a breach of contract, as well as a quasi-delict.

Neither may the case of Palisoc v. Brillantes, 15 invoked by the defendant, be equated with the case at bar. The Palisoc case dealt with the liability of school officials for damages arising from the death of a student (Palisoc) due to fist blows given by another student (Daffon), in the course of a quarrel between them, while in a laboratory room of the Manila Technical Institute. In an action for damages, the head thereof and the teacher in charge of said laboratory were held jointly and severally liable with the student who caused said death, for failure of the school to provide "adequate supervision over the activities of the students in the school premises," to protect them "from harm, whether at the hands of fellow

students or other parties." Such liability was predicated upon Article 2180 of our Civil Code, the pertinent part of which reads:

ART. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible.

xxx xxx xxx

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody.

xxx xxx xxx

Obviously, the amount of damages warded in the Palisoc case is not and cannot serve as the measure of the damages recoverable in the present case, the latter having been caused directly and intentionally by an employee or agent of the defendant, whereas the student who killed the young Palisoc was in no wise an agent of the school. Moreover, upon her arrival in the Philippines, Mrs. Zulueta reported her husband's predicament to defendant's local manager and asked him to forthwith have him (Mr. Zulueta) brought to Manila, which defendant's aforementioned manager refused to do, thereby impliedly ratifying the off-loading of Mr. Zulueta at Wake Island.

It is next urged that, under the contract of carriage with the defendant, Mr. Zulueta was bound to be present at the time scheduled for the departure of defendant's plane and that he had, consequently, violated said contract when he did not show up at such time. This argument might have had some weight had defendant's plane taken off before Mr. Zulueta had shown up. But the fact is that he was ready, willing and able to board the plane about two hours before it actually took off, and that he was deliberately and maliciously off-loaded on account of his altercation with Capt. Zentner. It should, also, be noted that, although Mr. Zulueta was delayed some 20 to 30 minutes, the arrival or departure of planes is often delayed for much longer periods of time. Followed to its logical conclusion, the argument adduced by the defense suggests that airlines should be held liable for damages due to the inconvenience and anxiety, aside from actual damages, suffered by many passengers either in their haste to arrive at the airport on scheduled time just to find that their plane will not take off until later, or by reason of the late arrival of the aircraft at its destination.

PANAM impugns the award of attorney's fees upon the ground that no penalty should be imposed upon the right to litigate; that, by law, it may be awarded only in exceptional cases; that the claim for attorney's fees has not

been proven; and that said defendant was justified in resisting plaintiff's claim "because it was patently exorbitant."

Nothing, however, can be farther from the truth. Indeed apart from plaintiff's claim for actual damages, the amount of which is not contested, plaintiffs did not ask any specific sum by way of exemplary and moral damages, as well as attorney's fees, and left the amount thereof to the "sound discretion" of the lower court. This, precisely, is the reason why PANAM, now, alleges — without justification that the lower court had no jurisdiction over the subject matter of the present case.

Moreover, Article 2208 of our Civil Code expressly authorizes the award of attorney's fees "when exemplary damages are awarded," — as they are in this case —as well as "in any other case where the court deems it just and equitable that attorney's fees ... be recovered," and We so deem it just and equitable in the present case, considering the "exceptional" circumstances obtaining therein, particularly the bad faith with which defendant's agent had acted, the place where and the conditions under which Rafael Zulueta was left at Wake Island, the absolute refusal of defendant's manager in Manila to take any step whatsoever to alleviate Mr. Zulueta's predicament at Wake and have him brought to Manila — which, under their contract of carriage, was defendant's obligation to discharge with "extra-ordinary" or "utmost" diligence — and, the "racial" factor that had, likewise, tainted the decision of defendant's agent, Capt. Zentner, to off-load him at Wake Island.

As regards the evidence necessary to justify the sum of P75,000 awarded as attorney's fees in this case, suffice it to say that the quantity and quality of the services rendered by plaintiffs' counsel appearing on record, apart from the nature of the case and the amount involved therein, as well as his prestige as one of the most distinguished members of the legal profession in the Philippines, of which judicial cognizance may be taken, amply justify said award, which is a little over 10% of the damages (P700,000) collectible by plaintiffs herein. Indeed, the attorney's fees in this case is proportionally much less than that adjudged in Lopez v. PANAM 16 in which the judgment rendered for attorney's fees (P50,000) was almost 20% of the damages (P275,000) recovered by the plaintiffs therein.

The defense assails the last part of the decision sought to be reconsidered, in which — relying upon Article 172 of our Civil Code, which provides that "(t)he wife cannot bind the conjugal partnership without the husband's consent, except in cases provided by law," and it is not claimed that this is one of such cases — We denied a motion, filed by Mrs. Zulueta, for the dismissal of this case, insofar as she is concerned - she having settled all her differences with the defendant, which appears to have paid her the sum of P50,000 therefor - "without prejudice to this sum being deducted from the award made in said decision." Defendant now alleges that this is

tantamount to holding that said compromise agreement is both effective and ineffective.

This, of course, is not true. The payment is effective, insofar as it is deductible from the award, and, because it is due (or part of the amount due) from the defendant, with or without its compromise agreement with Mrs. Zulueta. What is ineffective is the compromise agreement, insofar as the conjugal partnership is concerned. Mrs. Zulueta's motion was for the dismissal of the case insofar as she was concerned, and the defense cited in support thereof Article 113 of said Code, pursuant to which "(t)he husband must be joined in all suits by or against the wife except: ... (2) If they have in fact been separated for at least one year." This provision, We held, however, refers to suits in which the wife is the principal or real party in interest, not to the case at bar, "in which the husband is the main party in interest, both as the person principally aggrieved and as administrator of the conjugal partnership ... he having acted in this capacity in entering into the contract of carriage with PANAM and paid the amount due to the latter, under the contract, with funds of the conjugal partnership," to which the amounts recoverable for breach of said contract, accordingly, belong. The damages suffered by Mrs. Zulueta were mainly an in accident of the humiliation to which her husband had been subjected. The Court ordered that said sum of P50,00 paid by PANAM to Mrs. Zulueta be deducted from the aggregate award in favor of the plaintiffs herein for the simple reason that upon liquidation of the conjugal partnership, as provided by law, said amount would have to be reckoned with, either as part of her share in the partnership, or as part of the support which might have been or may be due to her as wife of Rafael Zulueta. It would surely be inane to sentence the defendant to pay the P700,000 due to the plaintiffs and to direct Mrs. Zulueta to return said P50,000 to the defendant.

In this connection, it is noteworthy that, for obvious reasons of public policy, she is not allowed by law to waive her share in the conjugal partnership, before the dissolution thereof. 17 She cannot even acquire any property by gratuitous title, without the husband's consent, except from her ascendants, descendants, parents-in-law, and collateral relatives within the fourth degree. 18

It is true that the law favors and encourages the settlement of litigations by compromise agreement between the contending parties, but, it certainly does not favor a settlement with one of the spouses, both of whom are plaintiffs or defendants in a common cause, such as the defense of the rights of the conjugal partnership, when the effect, even if indirect, of the compromise is to jeopardize "the solidarity of the family" — which the law 19 seeks to protect — by creating an additional cause for the misunderstanding that had arisen between such spouses during the litigation, and thus rendering more difficult a reconciliation between them.

It is urged that there is no proof as to the purpose of the trip of the plaintiffs, that neither is there any evidence that the money used to pay the plane tickets came from the conjugal funds and that the award to Mrs. Zulueta was for her personal suffering or injuries. There was, however, no individual or specific award in favor of Mrs. Zulueta or any of the plaintiffs. The award was made in their favor collectively. Again, in the absence of said proof, the presumption is that the purpose of the trip was for the common benefit of the plaintiffs and that the money had come from the conjugal funds, for, unless there is proof to the contrary, it is presumed "(t)hat things have happened according to the ordinary course of nature and the ordinary habits of life." 20 In fact Manresa maintains 21 that they are deemed conjugal, when the source of the money used therefor is not established, even if the purchase had been made by the wife. 22 And this is the rule obtaining in the Philippines. Even property registered, under the Torrens system, in the name of one of the spouses, or in that of the wife only, if acquired during the marriage, is presumed to belong to the conjugal partnership, unless there is competent proof to the contrary. 23

PANAM maintains that the damages involved in the case at bar are not among those forming part of the conjugal partnership pursuant to Article 153 of the Civil Code, reading:

ART. 153. The following are conjugal partnership property:

(1) That which is acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses;

(2) That which is obtained by the industry, or work, or as salary of the spouses, or of either of them;

(3) The fruits, rents or interests received or due during the marriage, coming from the common property or from the exclusive property of each spouse.

Considering that the damages in question have arisen from, inter alia, a breach of plaintiffs' contract of carriage with the defendant, for which plaintiffs paid their fare with funds presumably belonging to the conjugal partnership, We hold that said damages fall under paragraph (1) of said Article 153, the right thereto having been "acquired by onerous title during the marriage ... ." This conclusion is bolstered up by Article 148 of our Civil Code, according to which:

ART. 148. The following shall be the exclusive property of each spouse:

(1) That which is brought to the marriage as his or her own;

(2) That which each acquires, during the marriage, by lucrative title;

(3) That which is acquired by right of redemption or by exchange with other property belonging to only one of the spouses;

(4) That which is purchased with exclusive money of the wife or of the husband.

The damages involved in the case at bar do not come under any of these provisions or of the other provisions forming part of Chapter 3, Title VI, of Book I of the Civil Code, which chapter is entitled "Paraphernal Property." What is more, if "(t)hat which is acquired by right of redemption or by exchange with other property belonging to only one of the spouses," and "(t)hat which is purchased with exclusive money of the wife or of the husband," 24 belong exclusively to such wife or husband, it follows necessarily that that which is acquired with money of the conjugal partnership belongs thereto or forms part thereof. The rulings in Maramba v. Lozano 25 and Perez v. Lantin, 26 cited in defendant's motion for reconsideration, are, in effect, adverse thereto. In both cases, it was merely held that the presumption under Article 160 of our Civil Code — to the effect that all property of the marriage belong to the conjugal partnership — does not apply unless it is shown that it was acquired during marriage. In the present case, the contract of carriage was concededly entered into, and the damages claimed by the plaintiffs were incurred, during marriage. Hence, the rights accruing from said contract, including those resulting from breach thereof by the defendant, are presumed to belong to the conjugal partnership of Mr. and Mrs. Zulueta. The fact that such breach of contract was coupled, also, with a quasi-delict constitutes an aggravating circumstance and can not possibly have the effect of depriving the conjugal partnership of such property rights.

Defendant insists that the use of conjugal funds to redeem property does not make the property redeemed conjugal if the right of redemption pertained to the wife. In the absence, however, of proof that such right of redemption pertains to the wife — and there is no proof that the contract of carriage with PANAM or the money paid therefor belongs to Mrs. Zulueta — the property involved, or the rights arising therefrom, must be presumed, therefore, to form part of the conjugal partnership.

It is true that in Lilius v. Manila Railroad Co., 27 it was held that the "patrimonial and moral damages" awarded to a young and beautiful woman by reason of a scar — in consequence of an injury resulting from an

automobile accident — which disfigured her face and fractured her left leg, as well as caused a permanent deformity, are her paraphernal property. Defendant cites, also, in support of its contention the following passage from Colin y Capitant:

No esta resuelta expresamente en la legislacion española la cuestion de si las indemnizaciones debidas por accidentes del trabaho tienen la consideracion de gananciales, o son bienes particulares de los conyuges.

Inclinan a la solucion de que estas indemnizaciones deben ser consideradas como gananciales, el hecho de que la sociedad pierde la capacidad de trabajocon el accidente, que a ella le pertenece, puesto que de la sociedad son losfrutos de ese trabajo; en cambio, la consideracion de que igual manera que losbienes que sustituyen a los que cada conyuge lleva al matrimonio como propiostienen el caracter de propios, hace pensar que las indemnizaciones que vengana suplir la capacidad de trabajo aportada por cada conyuge a la sociedad, debenser juridicamente reputadas como bienes propios del conyuge que haya sufrido elaccidente. Asi se llega a la misma solucion aportada por la jurisprudencia francesca. 28

This opinion is, however, undecisive, to say the least. It should be noted that Colin y Capitant were commenting on the French Civil Code; that their comment referred to indemnities due in consequence of "accidentes del trabajo "resulting in physical injuries sustained by one of the spouses (which Mrs. Zulueta has not suffered); and that said commentators admit that the question whether or not said damages are paraphernal property or belong to the conjugal partnership is not settled under the Spanish law. 29

Besides, the French law and jurisprudence — to which the comments of Planiol and Ripert, likewise, refer — are inapposite to the question under consideration, because they differ basically from the Spanish law in the treatment of the property relations between husband and wife. Indeed, our Civil Code, like the Spanish Civil Code, favors the system of conjugal partnership of gains. Accordingly, the former provides that, "(i)n the absence of marriage settlements, or when the same are void, the system of relative community or conjugal partnership of gains ... shall govern the property relations between" the spouses. 30 Hence, "(a)ll property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife." 31

No similar rules are found in the French Civil Code. What is more, under the provisions thereof, the conjugal partnership exists only when so stipulated in the "capitulaciones matrimoniales" or by way of exception. In the language of Manresa —

Prescindimos de los preceptos de los Condigos de Francia, Italia, Holanda, Portugal, Alemania y Suiza, porsue solo excepcionalmente, o cuando asi se pacta en las capitulaciones, admiten el sistema de gananciales. 32

Again, Colin y Capitant, as well as the Lilius case, refer to damages recovered for physical injuries suffered by the wife. In the case at bar, the party mainly injured, although not physically, is the husband.

Accordingly, the other Philippine cases 33 and those from Louisiana — whose civil law is based upon the French Civil Code — cited by the defendant, which similarly refer to moral damages due to physical injuries suffered by the wife, are, likewise, inapplicable to the case at bar.

We find, therefore, no plausible reason to disturb the views expressed in Our decision promulgated on February 29, 1972.

WHEREFORE, the motions for reconsideration above-referred to should be, as they are hereby denied.

Makalintal, Zaldivar, Fernando, Makasiar, Antonio and Esguerra, JJ., concur.

Castro and Teehankee, JJ., took no part.

Barredo, J., voted to modify the judgment by reducing the amount of the awarded damages and individualizing the same, and now reserves the filing of a separate concurring and dissenting opinion in support of his vote.

 

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 168987               October 17, 2012

PHILIPPINE AIRLINES, INC., Petitioner, vs.

FRANCISCO LAO LIM, THE HEIRS OF HENRY GO, MANUEL LIMTONG and RAINBOW TOURS AND TRAVEL, INC., Respondents.

D E C I S I O N

PERALTA, J.:

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the Decision1 of the Court of Appeals (CA), dated March 22, 2005, and its Resolution2 dated July 15, 2005, denying herein petitioner's Motion for Reconsideration of the aforementioned Decision, be reversed and set aside.

The records reveal the CA's narration of the facts to be accurate, to wit:

Plaintiffs are Cebu-based businessmen, that is, plaintiff Francisco Lao Lim is engaged in real estate and trading, Mr. Henry Go in export and distribution of weighing scales and Mr. Manuel Limtong in the printing press business. All three plaintiffs decided to venture into business transactions involving the purchase of weighing scales from one Mrs. Ng Yuen Ming of Hongkong and printing press equipments from Mrs. Myrna Irsch of Germany. In line with these ventures, they scheduled important appointments with the said dealers in Hongkong on 26 February 1991 in order to conclude their agreements and thereafter sign the necessary contracts.

On 22 February 1991, plaintiff Francisco Lao Lim went to the office of third-party defendant Rainbow Tours and Travel, Inc. ("Rainbow Tours") and purchased three (3) confirmed PAL roundtrip tickets. They were booked on a Link-Flight PR842 Cebu-Manila on February 25, 1991 (Monday) at 12:05 P.M. and Flight PR300 Manila-Hongkong on February 26, 1991 (Tuesday) at 8:00 A.M. The return trip was on March 1, 1991 at 11:05 A.M. Hongkong-Manila (Flight PR301) and Manila-Cebu (Link-Flight PR512) at 2:50 P.M. of the same day.

On February 23, 1991, plaintiff Francisco Lao Lim returned to the office of Rainbow Tours to inquire on the availability of seats for the PAL Manila-

Hongkong flight on February 26, 1992 at 5:00 p.m. so that they could reset their Hongkong meetings scheduled on 26 February 1991 to a later time. Francisco Lao Lim was referred to Rainbow Tours travel agent, Gemma Dingal, who called up PAL Reservations. Upon being informed of the unavailability of seats for the 5:00 p.m. flight, Francisco Lao Lim left Rainbow Tours without making any cancellations of their confirmed bookings that were stated in their respective tickets.

As scheduled, plaintiffs took the Cebu-Manila Flight No. PR842 on February 25, 1991. The next day, February 26, 1991, at the check-in counter at the Ninoy Aquino International Airport (NAIA), plaintiffs Francisco Lao Lim and Henry Go were informed by PAL's check-in clerk that their bookings on Flight PR300 Manila-Hongkong (8:00 a.m.) had been cancelled and that their names were not on the computer's passenger list for the said flight. Plaintiff Manuel Limtong, however, was able to board the flight. Francisco Lao Lim and Henry Go explained to the check-in clerk that they were holding confirmed bookings and that they did not have the same cancelled. They likewise begged and pleaded that they be allowed to board the said flight but their pleas fell on deaf ears. At 5:00 p.m. of the same day, plaintiffs Francisco Lao Lim and Henry Go took Flight No. PR301 leaving Manila to Hongkong.

Plaintiffs brought this suit for breach of contract of carriage and damages against PAL alleging that the PAL personnel at the check-in clerk at NAIA arrogantly shouted at them and humiliated them in front of the other passengers by labeling their tickets "cheap tickets" thus entitling them to moral damages in the amount of P350,000.00 each as such abusive and injurious language had humiliated them, wounded their feelings and besmirched their reputations. Plaintiffs further claimed that because of their failure to reach Hongkong in time for the scheduled business conferences, their contacts did not anymore wait for them. They claimed that the 26 February 1991 business meeting with Mrs. Ng involving the purchase of weighing scales at discounted rates should have pushed through since this was the last day given to the plaintiffs to close the deal otherwise Mrs. Ng is selling the stocks to other interested buyers. Even though Manuel Limtong was able to meet with Mrs. Ng, the deal was not finalized since it was only plaintiff Henry Go who could properly negotiate with Mrs. Ng as to what kind of scales they should purchase. Plaintiffs likewise claim that the transaction on the purchase of several German printing press equipments on consignment was not consummated because their German contact, Mrs. Irche, insisted on meeting all three plaintiffs considering that the proposed transaction involved a huge amount. According to the plaintiffs, Mrs. Ng disposed the stocks of weighing scales to another buyer whereas Mrs. Irche left Hongkong without meeting with them despite their efforts to schedule another meeting with her. Since the

business deals that could have earned them a profit of P3,567,000.00 were not consummated, they should then be entitled to the said amount.

Plaintiffs also seek the payment of exemplary damages and attorney's fees.

In its defense, PAL contended that plaintiffs were revenue passengers who made their travel arrangements with Rainbow Tours. PAL then impleaded Rainbow Tours and Travel, Inc. as third-party defendants, ascribing liability on the latter for whatever damages were suffered by plaintiffs Lao Lim and Go. Based on the Post Date Investigation Print-out and the testimonies of PAL witnesses Racil Corcuera (PAL Passenger load analyst at Cebu Mactan Office) and Rosy Mancao (Sales Representative), PAL contended that the cancellation of plaintiffs Mr. Lao Lim and Mr. Go's confirmed bookings for the 8:00 a.m. Manila-Hongkong flight on 26 February 1991 was upon request of Gemma Dingal ("Gemma") of Rainbow Tours. PAL alleges that Gemma called Racil Corcuera ("Racil") at 10:46 a.m. of 23 February 1991 and instructed Racil to cancel the original confirmed bookings of plaintiffs Mr. Lao Lim and Mr. Go. While in the process of encoding the new itinerary, Racil found out that PR310 Manila-Hongkong (5:00 p.m. flight) on 26 February 1991 was already fully booked. Racil asked Gemma if she was definite about the new itinerary even if there was no confirmation of the PR310 flight and that plaintiffs will be put on the waitlist, to which, Gemma replied that plaintiffs clearly instructed her that they did not want to stay overnight in Manila and that it was alright to cancel their original confirmed reservations, put the plaintiffs on waitlist status for PR310 February 26, 1991 and then book them for the PR511 (Cebu-Manila) flight at 12:10 p.m. on 26 February 1991 to be connected to PR310 (Manila Hongkong) flight at 5:00 p.m. on 26 February 1991. As for the Hongkong-Manila trip, Gemma instructed that plaintiffs be booked on PR301 at 11:05 a.m. on 3 March 1991 with connecting flight to Cebu at 2:50 p.m. of the same day. After giving all the foregoing instructions, Gemma then requested Racil to retain plaintiffs' confirmed booking PR300 (8:00 a.m.) Manila-Hongkong on 26 February 1991). Records show, however, that Racil erroneously requested for the reinstatement for the PR 300 flight on February 25, 1991 instead of February 26, 1991. Three hours later, Racil made the proper correction by requesting for the reinstatement of plaintiffs' booking for PR300 on 26 February 1991. Several requests for reinstatement were subsequently made but there was no respond from the flight controller. Eventually, Racil learned from Violy of the Manila Office that the request was on critical status because of the overflow of passengers since the PR300 (Manila-Hongkong) flight on 25 February 1991 had been cancelled. Despite several efforts by PAL employees, viz, Rosy Mancao, Lyndon Maceren (Senior Passenger Loan Analyst) and Lito Camboanga (Shift Supervisor), plaintiffs' bookings for the PR300 flight could not be confirmed.

A perusal of the records show that PAL witness Rosy Mancao testified that PAL and Rainbow Tours agreed not to tell the plaintiffs that their confirmed bookings for PR300 on 26 February 1991 had been erroneously cancelled and that the said flight was on critical status due to an overbooking of passengers because if they inform the plaintiffs "it would just create further problems."

PAL witness Mariano Aldee III who was assigned at the Check-In Counter disputed plaintiffs' claims that they were rudely treated by PAL employees, giving five reasons why passengers must be handled politely and courteously, to wit: (1) PAL employees underwent 5-week trainings on proper handling and courteous treatment; (2) airline employees' uniform practice of treating passengers politely; (3) PAL's corporate policy is "Total Passenger Care"; (4) PAL subjects employees to administrative sanctions when employees are impolite and discourteous, and (5) their superiors would make them explain if employees exhibit any rudeness or discourtesy to passengers. Mr. Aldee further testified that Flight PR300 on February 26, 1991 was an Airbus 300 with a capacity of 344 passengers, 24 of these on the business class while 220 seats for the economy class. Two jump seats were occupied by non-revenue passengers who were PAL employees but not on duty on that particular flight. For that said flight, PAL overbooked for 44 more passengers, that is, 28 for the business class and 260 for the economy class. Since there were only 22 business class passengers who showed up, two passengers from the economy class were "upgraded" to business class. Witness further testified that no waitlisted passenger was accepted for boarding on that flight.

Rainbow Tours presented Gemma Dingal and Ruby Lim (one of the owners of Rainbow Tours) as its witnesses, whose testimonies mainly attributed the erroneous cancellation of Mr. Lao Lim and Mr. Go's confirmed bookings for the PR300 Manila-Hongkong flight at 8:00 a.m. to Racil Corcuera. According to Gemma, she called up PAL merely to inquiry (sic) as to the availability of seats for the 5:00 p.m. Manila-Hongkong flight on 26 February 1991. She was taken by surprise when Racil immediately cancelled the confirmed bookings even if there was no instruction on her part to do so. Gemma immediately informed Ruby Lim of the erroneous cancellation and despite all their efforts to reinstate the original confirmed bookings, the same could not be done.

On 18 June 1996, the court a quo RTC rendered a Decision with the following dispositive portion:

WHEREFORE, judgment is hereby rendered sentencing the defendant Philippine Airlines and third-party defendant Rainbow Tours and Travel, Inc. to jointly and severally pay unto the plaintiff Francis Lao Lim the sum of SEVENTY-FIVE THOUSAND PESOS (P75,000.00), in concept of reasonable

temperate or moderate damages, and a like or similar sum to the substituted plaintiff-heirs of the late Henry Go, likewise by way of reasonable temperate or moderate damages plus the aggregate sum of TWENTY-FIVE THOUSAND PESOS (P25,000.00) as and for attorney's fees.

Costs against defendant Philippine Airlines and third-party defendant Rainbow Tours and Travel Incorporated.

SO ORDERED.

Aggrieved by the court a quo's ruling, plaintiffs and PAL interposed their respective appeals.3

On March 22, 2005, the CA promulgated its Decision, holding that petitioner clearly breached its contract of carriage with Mr. Lao Lim and Mr. Go. The CA disposed as follows:

WHEREFORE, based on the foregoing premises, the 18 June 1996 Decision of the court a quo is MODIFIED, to wit:

1. Defendant-appellant and third-party plaintiff-appellee Philippine Airlines and third-party defendant-appellee Rainbow Tours and Travel, Inc. are jointly and severally liable to pay plaintiffs-appellants Francisco Lao Lim the sum of PESOS: Fifty Thousand (P50,000.00) in concept of moral damages and PESOS: Fifty Thousand (P50,000.00) by way of exemplary damages for breach of contract of carriage;

2. Defendant-appellant and third-party plaintiff-appellee Philippine Airlines and third-party defendant-appellee Rainbow Tours and Travel Inc. are jointly and severally liable to pay the substituted heirs of plaintiff-appellant of the late Henry Go (sic) the sum of PESOS: Fifty Thousand (P50,000.00) in concept of moral damages and PESOS: Fifty Thousand (P50,000.00) by way of exemplary damages for breach of contract of carriage;

3. Defendant-appellant and third-party plaintiff-appellee Philippine Airlines and third-party defendant-appellee Rainbow Tours and Travel Inc. are jointly and severally liable to pay each of the plaintiffs-appellants the sum of PESOS: One Hundred Thousand (P100,000.00) by way of temperate or moderate damages;

4. Defendant-appellant and third-party plaintiff-appellee Philippine Airlines and third-party defendant-appellee Rainbow Tours and Travel Inc. are jointly and severally liable to pay the aggregate sum of PESOS: Sixty Thousand (P60,000.00) as and for attorney's fees;

5. Defendant-appellant and third-party plaintiff-appellee Philippine Airlines' claim for contribution, indemnity, subrogation and other reliefs from third-party defendant-appellee Rainbow Tours and Travel Inc. is DENIED for lack of merit;

6. Costs against defendant-appellant and third-party plaintiff-appellee Philippine Airlines and third-party defendant-appellee Rainbow Tours and Travel Incorporated.

SO ORDERED.4

Petitioner's motion for reconsideration of the CA Decision was denied per Resolution dated July 15, 2005.

Hence, this petition before the Court, with petitioner alleging that:

I

THE MARCH 22, 2005 DECISION AND JULY 15, 2005 RESOLUTION OF THE COURT OF APPEALS DID NOT RESOLVE THE PETITIONER'S NOVEMBER 3, 1998 MOTION TO SUSPEND PROCEEDINGS ON THE GROUND OF THE LATTER'S REHABILITATION RECEIVERSHIP.

II

RESPONDENTS FRANCISCO LAO LIM AND THE LATE HENRY GO WERE NOT HOLDING CONFIRMED BOOKINGS OR RESERVATION ON PAL'S PR300 (MANILA-HONGKONG) ON FEBRUARY 26, 1991 SINCE THE SAME WAS CANCELLED PURSUANT TO THE CATEGORICAL INSTRUCTION OF GEMMA DINGAL OF RESPONDENT RAINBOW TOURS.

III

THE LATE RESPONDENT HENRY GO OR HIS HEIRS DID NOT TESTIFY IN COURT. HENCE, HE IS NOT ENTITLED TO THE AWARDS OF P50,000 AS MORAL DAMAGES AND P50,000 AS EXEMPLARY DAMAGES AND ATTORNEY'S FEES.

IV

RESPONDENT MANUEL LIMTONG IS NOT ENTITLED TO P100,000 AS TEMPERATE OR MODERATE DAMAGES AND ATTORNEY'S FEES BECAUSE HE BOARDED, SANS ANY PROBLEM, PR 300/MANILA-

HONG-KONG/FEBRUARY 26, 1991 WHICH WAS THE FLIGHT AND DATE ON WHICH HE HELD A CONFIRMED BOOKING.

V

THE AWARD OF TEMPERATE OR MODERATE DAMAGES OF P100,000 TO EACH OF THE OTHER INDIVIDUALS IS BEREFT OF FACTUAL AND LEGAL SUPPORT.

VI

RESPONDENT RAINBOW TOURS AND TRAVEL, INC. SHOULD BE MADE LIABLE TO THE INDIVIDUAL RESPONDENTS AND PETITIONER SHOULD BE ABSOLVED OF ANY LIABILITY. 5

The petition deserves some consideration.

First, the issue of whether proceedings should be suspended on the ground that petitioner is under rehabilitation receivership, is now moot and academic. Petitioner is no longer under such status effective September 28, 2007, pursuant to the Order dated September 28, 2007 issued by the Securities and Exchange Commission.6 Therefore, this can no longer be an obstacle to legal proceedings against petitioner.

Going into the merits of the case, it is best to set it against the backdrop of the basic tenet that "in an action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the existence of the contract and the fact of its non-performance by the carrier."7

Petitioner then questions first, whether respondents Francisco Lao Lim and the late Henry Go had confirmed bookings on petitioner's flight PR300 (Manila-Hongkong) on February 26, 1991. Petitioner insists that respondents Lao Lim's and Go's bookings were cancelled because of the instructions of Ms. Dingal of the travel agency Rainbow Tours, with whom respondents were transacting. Petitioner points out supposed inconsistencies in the testimony, affidavits and other documents of Ms. Dingal, arguing that her testimony, i.e., that the erroneous cancellation of respondents Lao Lim's and Go's bookings were done by PAL's employee, Racil, without any instruction from her or respondent Lao Lim, should not be given credence as she appears to be a "coached" witness.

A close examination of the supposed inconsistencies, however, reveals that the same are too inconsequential to give any serious consideration. Moreover, petitioner presented this matter regarding the alleged inconsistencies in the statements of witnesses before the trial court, and yet

said court still found the witness and her testimony - that there was no instruction given to cancel respondents' bookings for the PR300 flight on February 26, 1991 - to be worthy of belief. The Court again emphasizes that "findings of the trial court on the matter of credibility of witnesses are entitled to the highest degree of respect and will not be disturbed on appeal,"8 because said lower court had the opportunity to observe, firsthand, how the witnesses testified.9 The trial court ruled that respondents Lao Lim and Henry Go were indeed holding confirmed tickets for PR300 on February 26, 1991, as they did not have their bookings cancelled. Such factual finding was upheld by the appellate court. Petitioner should bear in mind that findings of fact of the trial court, when affirmed by the CA, are binding and conclusive on this Court, as it is not a trier of facts.10 Although there are accepted exceptions to this general rule, this case does not fall under any such exceptions. Thus, the findings of the lower courts that respondents Francisco Lao Lim and Henry Go were holding confirmed plane tickets and yet were not transported by petitioner, are binding on this Court. Having proven the existence of a contract of carriage between respondents Lao Lim and Go, and the fact of non-performance by petitioner of its obligation as a common carrier, it is clear that petitioner breached its contract of carriage with respondents Lao Lim and Go.

The next question posed by petitioner is, are the appellate court's awards for damages in favor of respondents proper? The Court finds some of petitioner's arguments meritorious.

Petitioner assails the award of P50,000.00 as moral damages granted to the heirs of Henry Go despite the fact that neither Henry Go nor any of his heirs testified on matters that could be the basis for such monetary award. In Philippine Savings Bank vs. Manalac, Jr.,11 the Court ruled, thus:

x x x The award of moral damages must be anchored on a clear showing that the complainant actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings or similar injury. There was no better witness to this experience than complainant himself. Since complainant failed to testify on the witness stand, the trial court did not have any factual basis to award moral damages to him. x x x Mere allegations do not suffice; they must be substantiated by clear and convincing proof.12 (Emphasis supplied)

Indeed, in this case, since respondent Henry Go was not able to testify, there is then no evidence on record to prove that he suffered mental anguish, besmirched reputation, sleepless nights, wounded feelings or similar injury by reason of petitioner's conduct. Thus, on the award of moral damages in favor of deceased respondent Go, substituted by his heirs, the Court finds the same improper as it lacks the required factual basis.

However, there was no error committed by the lower courts with regard to the award of temperate or moderate damages of P100,000.00 to respondents Lao Lim and Go. The New Civil Code provides:

Art. 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved, with certainty.

Here, the trial and appellate courts also made the factual findings that the purpose for respondents Lao Lim's, Henry Go's, and Manuel Limtong's trip to Hongkong was to conduct business negotiations, but respondents Lao Lim and Henry Go were not able to meet their counterparts as they were not allowed to board the PR300 flight on February 26, 1991. As discussed earlier, said factual finding is deemed conclusive and the circumstances appearing on record convinced this Court that respondents Lao Lim and Henry Go suffered some pecuniary loss due to their failure to meet with their business associates. Understandably, it is difficult, if not impossible, to adduce solid proof of the losses suffered by respondents due to their failure to make it to their business meetings. Certainly, respondents' time and effort were wasted when they left their businesses in Cebu, all for naught, as the business negotiations they were supposed to conduct in Hongkong did not push through. One cannot discount the fact that business opportunities were lost. Thus, it is only just that respondents Lao Lim and Henry Go be awarded temperate or moderate damages.

As to the award of exemplary damages in favor of respondent Go, Gatmaitan vs. Gonzales,13 is instructive, to wit:

x x x Article 2229 of the Civil Code provides that exemplary or corrective damages are imposed in addition to the moral, temperate, liquidated or compensatory damages. Exemplary damages are not recoverable as a matter of right. The requirements of an award of exemplary damages are: (1) they may be imposed by way of example in addition to compensatory damages, and only after the claimant's right to them has been established; (2) that they cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant; (3) the act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent manner. x x x14 (Emphasis supplied)

Since respondent Go is entitled to temperate damages, then the court may also award exemplary damages in his favor.15 Indeed, exemplary damages are in order because petitioner and Rainbow Tours, through their respective employees, acted in bad faith by not informing respondents Lao Lim and Go of the erroneous cancellation of their bookings on the PR300 flight on

February 26, 1991. Both the trial and appellate courts are correct in their interpretation that Ms. Mancao, petitioner's employee, and Rainbow Tours’ Ms. Dingal acted in concert in not telling respondents Lao Lim and Go of the problems regarding their bookings. Ms. Mancao in effect reinforced and agreed to Ms. Dingal's decision not to tell respondents Lao Lim and Go, by telling Ms. Dingal that "if you tell the passengers, it might just create further problems."16

However, the Court agrees with petitioner that respondent Manuel Limtong is not entitled to any award for damages because, as to said respondent, petitioner faithfully complied with their contract of carriage. Respondent Limtong was able to board PR300 on February 26, 1991, as stated in his confirmed plane ticket. The contract of carriage does not carry with it an assurance that he will be travelling on the same flight with his chosen companions. Even if petitioner failed to transport respondents Lao Lim and Go on the same flight as respondent Limtong, there is absolutely no breach of the contract of carriage between the latter and petitioner. Hence, petitioner should not be made liable for any damages in favor of respondent Limtong.

Petitioner is also liable for attorney's fees, because records show that respondents demanded payment for damages from petitioner but it was only after respondents filed a case in court that petitioner offered some form of restitution to respondents, which the latter found insufficient. Clearly, respondents were forced to obtain services of counsel to enforce a just claim, for which they should be awarded attorney's fees.

Lastly, the Court finds petitioner's claim that only herein respondent, (third-party defendant before the trial court) Rainbow Tours and Travel, Inc., should be made liable to respondents Lao Lim and Go, to be untenable. They have acted together in creating the confusion leading to the erroneous cancellation of aforementioned respondents' confirmed bookings and the failure to inform respondents of such fact. As such, they have become joint tortfeasors, and in Loadmasters Customs Services, Inc. vs. Glodel Brokerage Corporation,17 the Court elucidated thus:

x x x Where there are several causes for the resulting damages, a party is not relieved from liability, even partially. It is sufficient that the negligence of a party is an efficient cause without which the damage would not have resulted. It is no defense to one of the concurrent tortfeasors that the damage would not have resulted from his negligence alone, without the negligence or wrongful acts of the other concurrent tortfeasor. As stated in the case of Far Eastern Shipping v. Court of Appeals,

x x x. 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.1âwphi1

There is no contribution between joint tortfeasors whose liability is solidary 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 tortfeasors and are solidarily liable for the resulting damage under Article 2194 of the Civil Code. [Emphasis supplied]18

Thus, petitioner and Rainbow Tours and Travel, Inc. are jointly and solidarily liable for damages awarded to respondents Lao Lim and Go.

IN VIEW OF THE FOREGOING, the Decision of the Court of Appeals, dated March 22, 2005, is hereby MODIFIED by DELETING the award for moral damages in favor of the substituted heirs of the late Henry Go, and DELETING the award of temperate or moderate damages in favor of respondent Manuel Limtong.

SO ORDERED.