Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-25142 March 25, 1975

PHILIPPINE RABBIT BUS LINES, INC. and FELIX PANGALANGAN, plaintiffs-appellants, 

vs.
PHIL-AMERICAN FORWARDERS, INC., ARCHIMEDES J. BALINGIT and FERNANDO
PINEDA, defendants-appellees.

Angel A. Sison for plaintiffs-appellants.

Fidel Zosimo U. Canilao for defendants-appellees.

AQUINO, 

Philippine Rabbit Bus Lines, Inc. and Felix Pangalangan appealed on pure questions of law from the
order of the Court of First Instance of Tarlac, dismissing their complaint against Archimedes J.
Balingit.

The dismissal was based on the ground that Balingit as the manager of Phil-American
Forwarders, Inc., which together with Fernando Pineda and Balingit, was sued for damages in an
action based on quasi-delict or culpa aquiliana, is not the manager of an establishment
contemplated in article 2180 of the Civil Code (Civil Case No. 3865).

In the complaint for damages filed by the Bus Company and Pangalangan against Phil-American
Forwarders, Inc., Balingit and Pineda, it was alleged that on November 24, 1962, Pineda drove
recklessly a freight truck, owned by Phil-American Forwarders, Inc., along the national
highway at Sto. Tomas, Pampanga. The truck bumped the bus driven by Pangalangan, which
was owned by Philippine Rabbit Bus Lines, Inc. As a result of the bumping, Pangalangan
suffered injuries and the bus was damaged and could not be used for seventy-nine days, thus
depriving the company of earnings amounting to P8,665.51. Balingit was the manager of Phil-
American Forwarders, Inc.

Among the defenses interposed by the defendants in their answer was that Balingit was not Pineda's
employer.

Balingit moved that the complaint against him be dismissed on the ground that the bus company and
the bus driver had no cause of action against him. As already stated, the lower court dismissed the
action as to Balingit. The bus company and its driver appealed.

The Civil Code provides:têñ.£îhqwâ£

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.

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

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.

xxx xxx xxx

The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage. (1903a)

The novel and unprecedented legal issue in this appeal is whether the terms "employers" and
"owners and managers of an establishment or enterprise" (dueños o directores de un establicimiento
o empresa) used in article 2180 of the Civil Code, formerly article 1903 of the old Code, embrace the
manager of a corporation owning a truck, the reckless operation of which allegedly resulted in the
vehicular accident from which the damage arose.

We are of the opinion that those terms do not include the manager of a corporation. It may be
gathered from the context of article 2180 that the term "manager" ("director" in the Spanish version) is
used in the sense of "employer".

Hence, under the allegations of the complaint, no tortious or quasi-delictual liability can be
fastened on Balingit as manager of Phil-American Forwarders, Inc., in connection with the vehicular
accident already mentioned because he himself may be regarded as an employee or
dependiente of his employer, Phil-American Forwarders, Inc.

Thus, it was held "que es dependiente, a los efectos de la responsabilidad subsidiaria establecida en
el num 3.0 del (art.) 1903, el director de un periodico explotado por una sociedad, porque cualquiera
que sea su jerarquia y aunque Ileve la direccion de determinadas convicciones politicas no por eso
deja de estar subordinado a la superior autoridad de la Empresa" (Decision of Spanish Supreme
Court dated December 6, 1912 cited in 12 Manresa, Codigo Civil Español 5th Ed. 662; 1913
Enciclopedia Juridica Española 992).

The bus company and its driver, in their appellants' brief, injected a new factual issue which was not
alleged in their complaint. They argue that Phil- American Forwarders, Inc. is merely a business
conduit of Balingit because out of its capital stock with a par value of P41,200, Balingit and his wife
had subscribed P40,000 and they paid P10,000 on their subscription, while the other incorporators,
namely, Rodolfo Limjuco, Ponciano Caparas and Rafael Suntay paid P250.25 and P25, respectively.

That argument implies that the veil of corporate fiction should be pierced and that Phil-American
Forwarders, Inc. and Balingit and his wife should be treated as one and the same civil personality.

We cannot countenance that argument in this appeal. It was not raised in the lower court . The case
has to be decided on the basis of the pleadings filed in the trial court where it was assumed that Phil-
American Forwarders, Inc. has a personality separate and distinct from that of the Balingit spouses.

The legal issue, which the plaintiffs-appellants can ventilate in this appeal, is one which was raised in
the lower court and which is within the issues framed by the parties (Sec. 18, Rule 46, Rules of
Court).
When a party deliberately adopts a certain theory and the case is decided upon that theory in the
court below, he will not be permitted to change his theory on appeal because, to permit him to do so,
could be unfair to the adverse party (2 Moran's Comments on the Rules of Court, 1970 Ed. p. 505).

WHEREFORE, the lower court's order of dismissal is affirmed. Costs against the plaintiffs-appellants.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 46237           September 27, 1939

ROSALIO MARQUEZ, ET AL., plaintiffs-appellees, 

vs.
BERNARDO CASTILLO, defendant-appellant.

A.L. Katigbak for appellant.

Teodorico Ona for appellee.

DIAZ, J.:

The plaintiffs and appellees surnamed Marquez sought to collect from the defendant and
appellant, in the Court of First Instance of Tayabas, an indemnity in the sum of P4,900 for the death
of Fernanda Marquez on whom they claim to be dependent for support, which death was caused
by the reckless imprudence of Mariano Capulong, the defendant's chauffeur who ran over her
on April 30, 1937, in the barrio of Lusacan of the municipality of Tiaong, Province of Tayabas.

The plaintiff and appellee Maria Chomacera, in turn, sought to collect from the same defendant
another indemnity in the sum of P100 for certain injuries received by her from the same cause and
under the same circumstances which resulted in the death of said Fernanda Marquez.

The defendant defended himself by alleging that the death of Fernanda Marquez was due to the
exclusive fault and negligence of the chauffeur Mariano Capulong, and that in the selection and
employment of the latter, as such, in his service, he exercised the due diligence of a good father of a
family, so that he should not be made to answer for the damages caused by the imprudence of said
employee.

To this defense of the defendant, who at the same time alleged in his answer a counterclaim seeking
an indemnity in the sum of P300 for the annoyance caused him by the plaintiffs, by compelling him to
defend himself in the case, thereby incurring expenses in order to secure the services of an attorney,
the plaintiffs and appellees filed a reply contending that it is of no avail to the defendant to have
exercised the due diligence of a good father of a family in the selection and employment of the
chauffeur Mariano Capulong claiming that the latter was duly licensed as such chauffeur, because,
under the provisions of article 103 of the Revised Penal Code,

he is, at any rate, bound subsidiarily to answer for the civil liability of said servant, subordinate,
employee or chauffeur, for the reason that when the latter caused the death of the deceased
Marquez, he was in the employ of the defendant.

During the trial, the parties filed a stipulation of facts which appears inserted in the appealed decision,
as follows:

That Mariano Capulong is the same accused convicted and sentenced in criminal case No.
7103 of this court, as evidenced by the judgment dated May 6, 1937.

xxx           xxx           xxx

That said Mariano Capulong is insolvent, according to the investigations conducted by us to

this date.
 1. That the defendant Bernardo Castillo has exercised due diligence as a good father of a
family in selecting the chauffeur Mariano Capulong, and the plaintiffs admit that said chauffeur
Mariano Capulong possesses an automobile driver's license which, for purposes of
identification, we request to be marked as Exhibit A, as a conclusive evidence of his having
exercised due diligence.

2. That the defendant Bernardo Castillo is not engaged in any kind of business or industry on
or about April 30, 1937, the date of the accident.

3. That the defendant Bernardo Castillo was not riding in the car at the time of the accident,
and he did not know that his car was taken by the chauffeur Mariano Capulong.

4. That, by reason of this complaint, the defendant has suffered damages in the sum of P300
in order to prepare his defense.

That Fernanda Marquez, that is, the offended party in criminal case No. 7103, was earning at
the rate of P1 a day on the date of her death; and that said Fernanda Marquez was only 50
years old when she died.

That the co-plaintiff Maria Chomacera was earning at the rate of P1.20 a day at the time she
received the injuries mentioned in the above-stated affidavit of Mariano Capulong, and that
she incurred for her treatment expenses amounting to P100, as alleged in the complaint,
while Fernanda Marquez spent for her burial and funeral the sum of P300, as alleged in the
complaint.

It should be noted that in said stipulation, there is a provision appearing in paragraph 3 thereof, which
reads as follows:

That the defendant Bernardo Castillo was not riding in the car at the time of the
accident, and he did not know that his car was taken by the chauffeur Mariano
Capulong.

This fact decides the question because it clearly shows that the accident did not occur in the course of
the performance of the duties or service for which said chauffeur Mariano Capulong had been hired.
The defendant did not hire him to do as he pleased, using the defendant's car as if it were his own.
His duties and service were confined to driving his master's car as the latter ordered him, and the
accident did not take place under said circumstances.

The subsidiary civil liability of the master, according to the provisions of article 103 of said
Revised Penal Code, arises and takes place only when the servant, subordinate or employee
commits a punishable criminal act while in the actual performance of his ordinary duties and
service, and he is insolvent thereby rendering him incapable of satisfying by himself his own civil
liability.

The general rule regarding the obligation to repair the damage done, besides the one established in
article 103 of the Revised Penal Code, is that he, who by an act or omission causes the damage
through his fault or negligence, is the one called upon to repair the same (art. 1902, Civil Code).

This rule, which extends only to cases mentioned in articles 1903 to 1910 of said Code, is in no way
applicable to the appellant, all the more so because, as the lower court makes clear in its decision,
neither was he in his car at the time of the accident for which Mariano Capulong was sentenced to
pay an indemnity of P500 to the heirs of the deceased Marquez, nor was he negligent in the selection
of his chauffeur, since he hired in his service precisely one who is duly licensed to drive a car.

For the foregoing reasons, the appealed judgment is reversed, with the costs de oficio.

So ordered.
 Republic of the Philippines
Supreme Court
Manila
 
THIRD DIVISION
 
 
SPS. BUENAVENTURA JAYME G.R. No. 163609
AND ROSARIO JAYME,
Petitioners,
Present:
- versus - YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
RODRIGO APOSTOL, FIDEL CHICO-NAZARIO,
LOZANO, ERNESTO SIMBULAN, NACHURA, and
MAYOR FERNANDO Q. MIGUEL, REYES, JJ.
MUNICIPALITY OF KORONADAL
(NOW CITY OF KORONADAL),
PROVINCE OF SOUTH COTABATO,
represented by the MUNICIPAL
TREASURER and/or MUNICIPAL
MAYOR FERNANDO Q. MIGUEL,
and THE FIRST INTEGRATED Promulgated:
BONDING AND INSURANCE
COMPANY, INC. ,
Respondents. November 27, 2008
 
x--------------------------------------------------x
 
DECISION
 
 
REYES, R.T., J.:
 
 
MAY a municipal mayor be held solidarily liable for the negligent acts of the driver assigned to him,
which resulted in the death of a minor pedestrian?
 
 
 
 
Challenged in this petition for review on certiorari is the Decision[1] of the Court of Appeals (CA) which
reversed and set aside the decision of the Regional Trial Court (RTC), Polomolok, Cotabato City,
Branch 39, insofar as defendant Mayor Fernando Q. Miguel is concerned. The CA absolved Mayor
Miguel from any liability since it was not he, but the Municipality of Koronadal, that was the employer
of the negligent driver.
 
The Facts
 
On February 5, 1989, Mayor Miguel of Koronadal, South Cotabato was on board the Isuzu pick-up
truck driven by Fidel Lozano, an employee of the Municipality of Koronadal.[2] The pick-up truck was
registered under the name of Rodrigo Apostol, but it was then in the possession of Ernesto Simbulan.
[3]
 Lozano borrowed the pick-up truck from Simbulan to bring Miguel
to Buayan Airport at General Santos City to catch his Manila flight.[4]
 
The pick-up truck accidentally hit Marvin C. Jayme, a minor, who was then crossing the National
Highway in Poblacion, Polomolok, South Cotabato.[5] The intensity of the collision sent Marvin some
fifty (50) meters away from the point of impact, a clear indication that Lozano was driving at a very
high speed at the time of the accident.[6]
 
Marvin sustained severe head injuries with subdural hematoma and diffused cerebral
contusion.[7] He was initially treated at the Howard Hubbard Memorial Hospital.[8]Due to the
seriousness of his injuries, he was airlifted to the Ricardo Limso Medical Center in Davao City for
more intensive treatment.[9] Despite medical attention, Marvin expired six (6) days after the accident. [10]
 
Petitioners spouses Buenaventura and Rosario Jayme, the parents of Marvin, filed a
complaint for damages with the RTC against respondents.[11] In their complaint, they prayed that all
respondents be held solidarily liable for their loss. They pointed out that that proximate cause
of Marvins death was Lozanos negligent and reckless operation of the vehicle. They prayed for
actual, moral, and exemplary damages, attorneys fees, and litigation expenses.
 
In their respective Answers, all respondents denied liability for Marvins death. Apostol and
Simbulan averred that Lozano took the pick-up truck without their [Link], Miguel and
Lozano pointed out that Marvins sudden sprint across the highway made it impossible to avoid the
accident. Yet, Miguel denied being on board the vehicle when it hit
Marvin. The Municipality of Koronadal adopted the answer of Lozano and Miguel. As for First
Integrated Bonding and Insurance Company, Inc., the vehicle insurer, it insisted that its liability is
contributory and is only conditioned on the right of the insured. Since the insured did not file a claim
within the prescribed period, any cause of action against it had prescribed.

 
RTC Disposition
 
On January 25, 1999, the RTC rendered judgment in favor of spouses Jayme, the dispositive
portion of which reads:
 
WHEREFORE, in view of the foregoing, the defendant Municipality of Koronadal
cannot be held liable for the damages incurred by other defendant (sic) being an
agency of the State performing a (sic) governmental functions. The same with
defendant Hermogenes Simbulan, not being the owner of the subject vehicle, he is
absolved of any liability. 
The complaint against defendant First Integrated Bonding Insurance Company, Inc. is
hereby ordered dismissed there being no cause of action against said insurance
company.
 
However, defendants Fidel Lozano, Rodrigo Apostol, and Mayor Fernando
Miguel of Koronadal, South Cotabato, are hereby ordered jointly and severally to pay
the plaintiff (sic) the following sums:
 
 
1.         One Hundred Seventy Three Thousand One Hundred One
and Forty Centavos (P173,101.40) Pesos as actual damages
with legal interest of 12% per annum computed from February
11, 1989 until fully paid;
2. Fifty Thousand (P50,000.00) Pesos as moral damages;
3. Twenty Thousand (P20,000.00) Pesos as exemplary damages;
4. Twenty Thousand (P20,000.00) Pesos as Attorneys fees;
5. Fifty Thousand (P50,000.00) Pesos for the death of Marvin Jayme;
6. Three Thousand (P3,000.00) as litigation expenses; and
7. To pay the cost of this suit.
 
SO ORDERED.[12]
 
Dissatisfied with the RTC ruling, Mayor Miguel interposed an appeal to the CA.
 
CA Disposition
 
In his appeal, Mayor Miguel contended that the RTC erred in ruling that he was Lozanos
employer and, hence, solidarily liable for the latters negligent act. Records showed that
the Municipality of Koronadal was the drivers true and lawful employer. Mayor Miguel also denied that
he did not exercise due care and diligence in the supervision of Lozano. The incident, although
unfortunate, was unexpected and cannot be attributed to him.
 
On October 22, 2003, the CA granted the appeal, disposing as follows:
 
 
 
WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE,
insofar as defendant-appellant Mayor Fernando Q. Miguel is concerned, and the
complaint against him is DISMISSED.
 
IT IS SO ORDERED.[13]
 
The CA held that Mayor Miguel should not be held liable for damages for the death of Marvin
Jayme. Said the appellate court:
 
Moreover, plaintiffs-appellees admitted that Mayor Miguel was not the
employer of Lozano. Thus, paragraph 9 of the complaint alleged that
the Municipality of Koronadal was the employer of both Mayor Miguel and
Lozano. Not being the employer of Lozano, Mayor Miguel could not thus be held
liable for the damages caused by the former. Mayor Miguel was a mere passenger
in the Isuzu pick-up at the time of the accident.[14] (Emphasis supplied)
 
The CA also reiterated the settled rule that it is the registered owner of a vehicle who is jointly and
severally liable with the driver for damages incurred by passengers or third persons as a
consequence of injuries or death sustained in the operation of the vehicle.
 
Issues
 
The spouses Jayme have resorted to the present recourse and assign to the CA the following
errors:
 
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
MAYOR FERNANDO MIGUEL CANNOT BE HELD LIABLE FOR THE DEATH OF
MARVIN JAYME WHICH CONCLUSION IS CONTRARY TO LAW AND THE
SETTLED PRONOUNCEMENTS OF THIS HONORABLE TRIBUNAL;
 
II.
THE FINDINGS OF FACTS OF THE HONORABLE COURT OF
APPEALS ARE CONTRARY TO THE FINDINGS OF THE TRIAL
COURT AND ARE CONTRADICTED BY THE EVIDENCE ON RECORD;
MOREOVER, THE CONCLUSIONS DRAWN BY THE HONORABLE COURT OF
APPEALS ARE ALL BASED ON CONJECTURES ANDSURMISES AND AGAINST
ACCEPTED COURSE OF JUDICIAL PROCEEDINGS WHICH URGENTLY CALL
FOR AN EXERCISE OF THIS HONORABLE COURTS SUPERVISION. [15]
 
 
Our Ruling
 
The doctrine of vicarious liability or imputed liability finds no application in the present case.
 
Spouses Jayme contend, inter alia, that vicarious liability attaches to Mayor Miguel. He was
not a mere passenger, but instead one who had direct control and supervision over Lozano during the
time of the accident. According to petitioners, the element of direct control is not negated by the fact
that Lozanos employer was the Municipality of Koronadal. Mayor Miguel, being Lozanos superior, still
had control over the manner the vehicle was operated.
 
Article 2180[16] of the Civil Code provides that a person is not only liable for one’s own quasi-
delictual acts, but also for those persons for whom one is responsible for. This liability is popularly
known as vicarious or imputed liability. To sustain claims against employers for the acts of their
employees, the following requisites must be established: (1) That the employee was chosen by
the employer personally or through another; (2) That the service to be rendered in accordance
with orders which the employer has the authority to give at all times; and (3) That the illicit act
of the employee was on the occasion or by reason of the functions entrusted to him. [17]
 
Significantly, to make the employee liable under paragraphs 5 and 6 of Article 2180, it must
be established that the injurious or tortuous act was committed at the time the employee was
performing his functions.[18]
 
Furthermore, the employer-employee relationship cannot be assumed. It is incumbent upon
the plaintiff to prove the relationship by preponderant evidence. In Belen v. Belen,[19] this Court ruled
that it was enough for defendant to deny an alleged employment relationship. The defendant is under
no obligation to prove the negative averment. This Court said:
 
It is an old and well-settled rule of the courts that the burden of proving the
action is upon the plaintiff, and that if he fails satisfactorily to show the facts upon
which he bases his claim, the defendant is under no obligation to prove his
exceptions. This rue is in harmony with the provisions of Section 297 of the Code of
Civil Procedure holding that each party must prove his own affirmative allegations,
etc.[20]
 
In resolving the present controversy, it is imperative to find out if Mayor Miguel is, indeed, the
employer of Lozano and therefore liable for the negligent acts of the latter. To determine the existence
of an employment relationship, we rely on the four-fold test. This involves: (1) the employers
power of selection; (2) payment of wages or other remuneration; (3) the employers right to
control the method of doing the work; and (4) the employers right of suspension or dismissal.
[21]

 
Applying the foregoing test, the CA correctly held that it was
the Municipality of Koronadal which was the lawful employer of Lozano at the time of the accident. It
is uncontested that Lozano was employed as a driver by the municipality. That he was subsequently
assigned to Mayor Miguel during the time of the accident is of no moment. This Court has, on several
occasions, held that an employer-employee relationship still exists even if the employee was loaned
by the employer to another person or entity because control over the employee subsists. [22] In the
case under review, the Municipality of Koronadal remains to be Lozanos employer notwithstanding
Lozanos assignment to Mayor Miguel.
 
Spouses Jayme argued that Mayor Miguel had at least supervision and control over Lozano
and how the latter operated or drove the Isuzu pick-up during the time of the accident. They, however,
failed to buttress this claim.
 
Even assuming arguendo that Mayor Miguel had authority to give instructions or directions to
Lozano, he still can not be held liable. In Benson v. Sorrell,[23] the New England Supreme Court ruled
that mere giving of directions to the driver does not establish that the passenger has control over the
vehicle. Neither does it render one the employer of the driver. This Court, in Soliman, Jr. v. Tuazon,
[24]
 ruled in a similar vein, to wit:
 
 x x x The fact that a client company may give instructions or directions to the security
guards assigned to it, does not, by itself, render the client responsible as an
employer of the security guards concerned and liable for their wrongful acts and
omissions. Those instructions or directions are ordinarily no more than requests
commonly envisaged in the contract for services entered into with the security
agency. x x x[25] (Emphasis supplied)
 
Significantly, no negligence may be imputed against a fellow employee although the person
may have the right to control the manner of the vehicles operation. [26] In the absence of an employer-
employee relationship establishing vicarious liability, the driver’s negligence should not be
attributed to a fellow employee who only happens to be an occupant of the vehicle.[27] Whatever
right of control the occupant may have over the driver is not sufficient by itself to justify an application
of the doctrine of vicarious liability. Handley v. Lombardi [28] is instructive on this exception to the rule
on vicarious liability:
 
Plaintiff was not the master or principal of the driver of the truck, but only an
intermediate and superior employee or agent. This being so, the doctrine
of respondeat superior or qui facit per alium is not properly applicable to him.  His
power to direct and control the driver was not as master, but only by virtue of the fact
that they were both employed by Kruse, and the further fact that as Kruses agent he
was delegated Kruses authority over the driver. x x x
 
In the case of actionable negligence, the rule is well settled both in this state
and elsewhere that the negligence of a subordinate employee or subagent is not to be
imputed to a superior employee or agent, but only to the master or principal. ( Hilton v.
Oliver, 204 Cal. 535 [61 A. L. R. 297, 269 Pac. 425]; Guild v. Brown, 115 Cal. App.
374 [1 Pac. (2d) 528]; Ellis v. Southern Ry. Co., 72 S. C. 464 [2 L. R. A. (N. S.) 378, 52
S. E. 228]; Thurman v. Pittsburg & M. Copper Co., 41 Mont. 141 [108 Pac. 588]; 2 Cor.
Jur., p. 829; and see the elaborate note in 61 A. L. R. 277,and particularly that part
commencing at p. 290.) We can see no logical reason for drawing any distinction in
this regard between actionable negligence and contributory negligence. x x x[29]
 
The rule was reiterated in Bryant v. Pacific Elec. Ry. Co.[30] and again in Sichterman v. Hollingshead Co.[31]
 
In Swanson v. McQuown,[32] a case involving a military officer who happened to be riding in a
car driven by a subordinate later involved in an accident, the Colorado Supreme Court adhered to the
general rule that a public official is not liable for the wrongful acts of his subordinates on a vicarious
basis since the relationship is not a true master-servant situation. [33] The court went on to rule that the
only exception is when they cooperate in the act complained of, or direct or encourage it. [34]
 
In the case at bar, Mayor Miguel was neither Lozanos employer nor the vehicles registered
owner. There existed no causal relationship between him and Lozano or the vehicle used that will
make him accountable for Marvins death. Mayor Miguel was a mere passenger at the time of the
accident.
 
Parenthetically, it has been held that the failure of a passenger to assist the driver, by
providing him warnings or by serving as lookout does not make the passenger liable for the latter’s
negligent acts.[35] The driver’s duty is not one that may be delegated to others. [36]
 
As correctly held by the trial court, the true and lawful employer of Lozano is
the Municipality of Koronadal. Unfortunately for Spouses Jayme, the municipality may not be sued
because it is an agency of the State engaged in governmental functions and, hence, immune from
suit. This immunity is illustrated in Municipality of San Fernando, La  Union  v. Firme,[37] where this
Court held:
 
It has already been remarked that municipal corporations are suable because their
charters grant them the competence to sue and be sued. Nevertheless, they are
generally not liable for torts committed by them in the discharge of governmental
functions and can only be held answerable only if it can be shown that they were
acting in proprietary capacity. In permitting such entities to be sued, the State merely
 gives the claimant the right to show that the defendant was not acting in
governmental capacity when the injury was committed or that the case comes under
the exceptions recognized by law. Failing this, the claimant cannot recover.[38]
 
Verily, liability attaches to the registered owner, the negligent driver and his direct
employer. The CA observation along this line are worth restating:
 
Settled is the rule that the registered owner of a vehicle is jointly and severally
liable with the driver for damages incurred by passengers and third persons as a
consequence of injuries or death sustained in the operation of said
vehicles. Regardless of who the actual owner of the vehicle is, the operator of record
continues to be the operator of the vehicle as regards the public and third persons,
and as such is directly and primarily responsible for the consequences incident (sic)
to its operation x x x.[39]
 
The accidental death of Marvin Jayme is a tragic loss for his parents. However, justice
demands that only those liable under our laws be held accountable for Marvins demise. Justice
cannot sway in favor of petitioners simply to assuage their pain and loss. The law on the matter is
clear: only the negligent driver, the driver’s employer, and the registered owner of the vehicle are
liable for the death of a third person resulting from the negligent operation of the vehicle.

 
WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED.
 
SO ORDERED.
G.R. No. 145804             February 6, 2003

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners, 

vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY
AGENCY, respondents.

DECISION

VITUG, J.:

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

On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then
drunk, entered the EDSA LRT station after purchasing a "token" (representing payment of the fare).
While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard
assigned to the area approached Navidad.

A misunderstanding or an altercation between the two apparently ensued that led to a fist fight. No
evidence, however, was adduced to indicate how the fight started or who, between the two, delivered
the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an
LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the
moving train, and he was killed instantaneously.

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

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

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

"a) 1) Actual damages of P44,830.00;

2) Compensatory damages of P443,520.00;

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

"b) Moral damages of P50,000.00;

 "c) Attorney’s fees of P20,000;

"d) Costs of suit.

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

"The compulsory counterclaim of LRTA and Roman are likewise dismissed."1

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

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

a) P44,830.00 as actual damages;

b) P50,000.00 as nominal damages;

c) P50,000.00 as moral damages;

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

e) P20,000.00 as and for attorney’s fees."2

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

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

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

"I.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS

OF FACTS BY THE TRIAL COURT

"II.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS

ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.

"III.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO

ROMAN IS AN EMPLOYEE OF LRTA."3
Petitioners would contend that the appellate court ignored the evidence and the factual findings of the
trial court by holding them liable on the basis of a sweeping conclusion that the presumption of
negligence on the part of a common carrier was not overcome. Petitioners would insist that Escartin’s
assault upon Navidad, which caused the latter to fall on the tracks, was an act of a stranger that could
not have been foreseen or prevented. The LRTA would add that the appellate court’s conclusion on
the existence of an employer-employee relationship between Roman and LRTA lacked basis because
Roman himself had testified being an employee of Metro Transit and not of the LRTA.

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

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

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

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

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

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

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

The law requires common carriers to carry passengers safely using the utmost diligence of very
cautious persons with due regard for all circumstances. 5 Such duty of a common carrier to provide
safety to its passengers so obligates it not only during the course of the trip but for so long as the
passengers are within its premises and where they ought to be in pursuance to the contract of
carriage.6 

The statutory provisions render a common carrier liable for death of or injury to passengers (a)
through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of
other passengers or of strangers if the common carrier’s employees through the exercise of due
diligence could have prevented or stopped the act or omission.

7 
In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and 8 by
simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of
the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to
an unforeseen event or to force majeure. 9 In the absence of satisfactory explanation by the carrier on
how the accident occurred, which petitioners, according to the appellate court, have failed to show,
the presumption would be that it has been at fault,10 an exception from the general rule that
negligence must be proved.11
The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the
victim arises from the breach of that contract by reason of its failure to exercise the high
diligence required of the common carrier. In the discharge of its commitment to ensure the safety
of passengers, a carrier may choose to hire its own employees or avail itself of the services of an
outsider or an independent firm to undertake the task. In either case, the common carrier is not
relieved of its responsibilities under the contract of carriage.

Should Prudent be made likewise liable? If at all, that liability could only be for tort under the
provisions of Article 217612 and related provisions, in conjunction with Article 2180, 13 of the Civil Code.
The premise, however, for the employer’s liability is negligence or fault on the part of the employee.
Once such fault is established, the employer can then be made liable on the basis of the presumption
juris tantum that the employer failed to exercise diligentissimi patris families in the selection and
supervision of its employees.

The liability is primary and can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been shown. Absent such a showing, one
might ask further, how then must the liability of the common carrier, on the one hand, and an
independent contractor, on the other hand, be described? It would be solidary. A contractual
obligation can be breached by tort and when the same act or omission causes the injury, one resulting
in culpa contractual and the other in culpa aquiliana, Article 2194 14 of the Civil Code can well apply.

15 
In fine, a liability for tort may arise even under a contract, where tort is that which breaches the
contract.16 Stated differently, when an act which constitutes a breach of contract would have
itself constituted the source of a quasi-delictual liability had no contract existed between the
parties, the contract can be said to have been breached by tort, thereby allowing the rules on
tort to apply.17

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

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

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

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

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-22686           January 30, 1968

BERNARDO JOCSON and MARIA D. JOCSON, plaintiffs-appellees, 

vs.
REDENCION GLORIOSO, defendant-appellant.

Ernesto C. Hidalgo for plaintiffs-appellees. 

Farol Law Office for defendant-appellant.

FERNANDO, J.:

For the death of a three-year-old boy who was run over by a passenger jeepney, two actions were
filed by the parents, the first, against its owner and the driver for culpa aquiliana, and the other,
against the driver for homicide thru reckless imprudence, the criminal action having been
instituted while the civil case was pending trial.

The civil case was dismissed, the lower court being of the opinion that "in conscience" it could not
"hold the . . . defendant driver guilty of negligence or lack of care resulting in or contributory to, the
said accident." 1 There was an appeal, but it did not prosper, the Court of Appeals dismissing it for
failure of appellants to pay the docketing fees.

The criminal case against the driver had a different outcome. He was convicted by the trial court of
homicide thru reckless imprudence "and aside from the prison sentence imposed upon him, was
ordered to indemnify, the heirs of the deceased in the sum of P6, 000.00 with subsidiary imprisonment
in case of insolvency." 2

The accused driver appealed raising as one of the issues "the propriety of sentencing the driver
to pay indemnity to the parents of the deceased child, considering the fact that the civil action
for damages brought by the parents of the child against the driver and the owner of the vehicle
was dismissed." 3 The matter being taken to the Court of Appeals, the decision was modified as to
the duration of the prison sentence, but insofar as the civil indemnity was concerned, was
affirmed. After the judgment became final, a writ for the execution of the civil liability was returned
unsatisfied due to the insolvency of the accused.

The parents, now plaintiffs-appellees, in an action with the Court of First Instance of Manila against
defendant, now appellant, sought to enforce such civil liability against her as owner of the jeepney,
pursuant to Article 103 of the Revised Penal Code.

At the trial, the principal defense pressed was barred by a prior judgment, the attention of the Court
having been called to the civil case for damages based on culpa aquiliana, filed against defendant
and her driver, a case, which as noted, was dismissed. The defense was not considered meritorious,
and judgment was rendered by the Hon. Carmelino Alvendia, finding defendant liable for
subsidiary liability in accordance with Article 103 of the Revised Penal Code in the sum of
P6,030.00, with costs.
Hence, this appeal. Since the principal legal question was that pressed before the trial judge and his
determination of such question was in accordance with the settled law, the decision must be affirmed.

Article 103 4 is quite explicit. For a felony committed by servants, pupils, workmen,
apprentices, or employees in the discharge of their duties, the employers, teachers, persons,
and corporations are made subsidiarily liable. As authoritatively interpreted by this Court
in Martinez v. Barredo, 5 "judgment of conviction, the absence of any collusion between the defendant
and the offended party, should bind the person subsidiarily liable.

" Such a decision is of a "conclusive nature . . .;" 6 it is "binding and conclusive upon defendant not
only with regard to its civil liability but also with regard to its amount because the liability of an
employer cannot be separated but follows that of his employee." 7 The latest manifestation of
approval of the Martinez doctrine appears in Bantoto v. Bobis, 8 recently promulgated.

Thus the novel question presented is whether the previous dismissal of an action based on culpa
aquiliana precludes the application of the plain and explicit command of Article 103 of the Revised
Penal Code. We do not think so. Diana v. Batangas Transportation Co., 9 while not decisive, furnishes
some light.

The opinion by Justice Bautista Angelo noted that such appeal arose "from a case originally instituted
in the Court of First Instance of Laguna wherein plaintiffs seek to recover from defendant as a party
subsidiarily liable for the crime committed by an employee in the discharge of his duty the sum of P2,
500 as damages, plus legal interest, and the costs of action." 

10 
The pertinent facts follow: "Plaintiffs are the heirs of one Florenio Diana, a former employee of the
defendant. On June 21, 1945, while Florenio Diana was riding in Truck No. 14, belonging to the
defendant, driven by Vivencio Bristol, the truck ran into a ditch at Bay, Laguna resulting in the death of
Florenio Diana and other passengers. Subsequently, Vivencio Bristol was charged and convicted of
multiple homicide through reckless imprudence wherein among other things, he was ordered to
indemnify the heirs of the deceased in the amount of P2, 000.

When the decision became final, a writ of execution was issued in order that the indemnity may be
satisfied, but the sheriff filed a return stating that the accused had no visible liveable property. The
present case was started when defendant failed to pay the indemnity under its subsidiary liability
under article 103 of the Revised Penal Code. The complaint was filed on October 19, 1948 (civil case
No. 9221)." 11

On December 13 of the same year, defendant Batangas Transportation Co. filed a motion to dismiss
on the ground of the pendency of the other action between the same parties for the same cause, the
plaintiffs seeking to recover from the aforesaid defendant the amount of P4, 500 as damages resulting
from the death of Florenio Diana while on board a truck of defendant allegedly due to the negligent act
of its driver Bristol. Clearly then, the basis of the action was culpa aquiliana.

On December 16, 1948, there was a written opposition to such motion to dismiss. Then on February
3, 1949, came an order of dismissal from the lower court which found the motion well-founded. The
reconsideration sought having been denied, the appeal, as set forth in the opening paragraph of the
opinion, was taken.

In reversing the action of the lower court, this Court stated that there could be no doubt "with regard to
the identity of parties." 12 It is not so concerning the identity of reliefs prayed for, . . . ." 13 As was stated
in the opinion: "It should be noted that the present case (civil case No. 9221)

tems from a criminal case in which the driver of the defendant was found guilty of multiple homicide
through reckless imprudence and was ordered to pay an indemnity of P2,000 for which the defendant
is made subsidiarily liable under article 103 of the Revised Penal Code, while the other case (civil
case No. 8023) is an action for damages based on culpa aquiliana which underlies the civil liability
predicated on articles 1902 to 1910 of the old Civil Code. These two cases involve two different
remedies." 14
It was the conclusion of this Court then: "Considering the distinguishing characteristics of the two
cases, which involve two different remedies, it can hardly be said that there is identity of reliefs in both
actions as to make the present case fall under the operation of Rule 8, section 1 (d) of the Rules of
Court.

In other words, it is a mistake to say that the present action should be dismissed because of the
pendency of another action between the same parties involving the same cause. Evidently, both
cases involve different causes of action. In fact, when the Court of Appeals dismissed the action
based on culpa aquiliana (civil case No. 8022), this distinction was stressed.

It was there said that the negligent act committed by defendant's employee is not a  quasi crime, for
such negligence is punished by law. What plaintiffs should have done was to institute an action
under Article 103 of the Revised Penal Code (CA-G.R. No. 3632-R).

And this is what plaintiffs have done. To deprive them now of this remedy, after the conviction
of defendant's employee, would be to deprive them altogether of the indemnity to which they
are entitled by law and by a court decision, which injustice it is our duty to prevent."  15 On the
same principle then, the previous dismissal of the action based on culpa aquiliana could not be a bar
to the enforcement of the subsidiary liability required by Article 103 of the Revised Penal Code.

What clearly emerges then is the controlling force of the principle that once there is a conviction for a
felony, final in character, the employer, according to the plain and explicit command of Article 103 of
the Revised Penal Code, is subsidiarily liable, if it be shown that the commission thereof was in the
discharge of the duties of such employee.

Another consideration is equally decisive in the affirmance of the appealed judgment. A decision of
conviction of the driver was affirmed by the Court of Appeals, which rejected the defense of a bar by a
prior judgment arising from the dismissal of the action based on culpa aquiliana.

"To take up this issue anew, [according to the lower] Court, would be equivalent for this Court to
review the decision of the Court of Appeals. That would be preposterous and against the law. While it
is true that the defendant in this case was not a party to the Criminal Case, since the liability sought to
be enforced against her in this case is merely subsidiary and is a necessary consequence of the
judgment of conviction rendered in the criminal case, the decision of the Court of Appeals denying the
defense of prior judgment set up by Mendoza is equally applicable against defendant in this case." 16

No error could be imputed the lower court for viewing the matter thus. From Shioji vs. Harvey, 17 the
principle is undisputed that a lower court judge "cannot enforce different decrees than those rendered
by the superior court. If each and every Court of First Instance could enjoy the privilege of overruling
decisions of [a higher court], there would be no end to litigation, and judicial chaos would result.

As noted by this Court, the emphatic language employed was "intentionally framed . . . to keep lower
courts from assuming supervisory jurisdiction to interpret or to reverse the judgment of the higher
court." 18 To the same effect is the view that there is compelling reason for denying a lower court the
power to refuse "to issue such writ [of execution] or quash it or order its stay, when the judgment had
been reviewed and affirmed by an appellate court, for it cannot review or interfere with any matter
decided on appeal, or give other or further relief, or assume supervisory jurisdiction to interpret or
reverse the judgment of the higher court." 

19 
The latest opinion of this Court on the matter, speaking through Justice Dizon follows: "It is
elementary — so elementary, indeed, that even freshmen law students know it — that an inferior court
has no legal authority to set aside a final and executory decision. . . ." 20

The lower court, therefore, acted strictly in compliance with a principle, authoritative and binding in
character, in holding defendant-appellant subsidiarily liable.

WHEREFORE, the appealed decision is affirmed. With costs against defendant-

appellant.1äwphï1.ñët
 [G.R. No. 132266. December 21, 1999]

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE VASQUEZ, JR. and LUISA SO

VASQUEZ, and CEBU DOCTORS HOSPITAL, INC., respondents.

DECISION
DAVIDE, JR., C.J.:

The pivotal issue in this petition is whether an employer may be held vicariously liable for
the death resulting from the negligent operation by a managerial employee of a company-issued
vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:

On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was driving a
Honda motorcycle around Fuente Osmea Rotunda. He was traveling counter-clockwise, (the
normal flow of traffic in a rotunda) but without any protective helmet or goggles. 

He was also only carrying a Students Permit to Drive at the time. Upon the other hand,
Benjamin Abad [was a] manager of Appellant Castilex Industrial Corporation, registered owner
[of] a Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same date and time, Abad drove
the said company car out of a parking lot but instead of going around the Osmea rotunda he
made a short cut against [the] flow of the traffic in proceeding to his route to General Maxilom
St. or to Belvic St.

In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each
other causing severe injuries to the former. Abad stopped his vehicle and brought
Vasquez to the Southern Islands Hospital and later to the Cebu Doctors Hospital.

On September 5, 1988, Vasquez died at the Cebu Doctors Hospital. It was there that Abad
signed an acknowledgment of Responsible Party (Exhibit K) wherein he agreed to pay whatever
hospital bills, professional fees and other incidental charges Vasquez may incur.

After the police authorities had conducted the investigation of the accident, a Criminal Case was
filed against Abad but which was subsequently dismissed for failure to prosecute. So, the
present action for damages was commenced by Vicente Vasquez, Jr. and Luisa So Vasquez,
parents of the deceased Romeo So Vasquez, against Jose Benjamin Abad and Castilex
Industrial Corporation. In the same action, Cebu Doctors Hospital intervened to collect unpaid
balance for the medical expense given to Romeo So Vasquez. [1]

The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered
Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation (hereafter
CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the amounts of P8,000.00 for
burial expenses; P50,000.00 as moral damages; P10,000.00 as attorneys fees;
and P778,752.00 for loss of earning capacity; and (2) Cebu Doctors Hospital, the sum
of P50,927.83 for unpaid medical and hospital bills at 3% monthly interest from 27 July 1989
until fully paid, plus the costs of litigation.[2]
 CASTILEX and ABAD separately appealed the decision.
In its decision[3] of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court
holding ABAD and CASTILEX liable but held that the liability of the latter is only vicarious and
not solidary with the former. It reduced the award of damages representing loss of earning
capacity from P778,752.00 to P214,156.80; and the interest on the hospital and medical bills,
from 3% per month to 12% per annum from 5 September 1988 until fully paid.
Upon CASTILEXs motion for reconsideration, the Court of Appeals modified its decision by
(1) reducing the award of moral damages from P50,000 to P30,000 in view of the deceaseds
contributory negligence; (b) deleting the award of attorneys fees for lack of evidence; and (c)
reducing the interest on hospital and medical bills to 6% per annum from 5 September 1988
until fully paid.[4]
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1)
applying to the case the fifth paragraph of Article 2180 of the Civil Code, instead of the fourth
paragraph thereof; (2) that as a managerial employee, ABAD was deemed to have been always
acting within the scope of his assigned task even outside office hours because he was using a
vehicle issued to him by petitioner; and (3) ruling that petitioner had the burden to prove that the
employee was not acting within the scope of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast
on the theory of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their sons death was caused
by the negligence of petitioners employee who was driving a vehicle issued by petitioner and
who was on his way home from overtime work for petitioner; and that petitioner is thus liable for
the resulting injury and subsequent death of their son on the basis of the fifth paragraph of
Article 2180. 
Even if the fourth paragraph of Article 2180 were applied, petitioner cannot escape liability
therefor. They moreover argue that the Court of Appeals erred in reducing the amount of
compensatory damages when the award made by the trial court was borne both by evidence
adduced during the trial regarding deceaseds wages and by jurisprudence on life
expectancy. Moreover, they point out that the petition is procedurally not acceptable on the
following grounds:
 (1) lack of an explanation for serving the petition upon the Court of Appeals by registered
mail, as required under Section 11, Rule 13 of the Rules of Civil Procedure; and (2) lack of a
statement of the dates of the expiration of the original reglementary period and of the filing of the
motion for extension of time to file a petition for review.
For its part, respondent Cebu Doctors Hospital maintains that petitioner CASTILEX is
indeed vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by
ABAD, who was on his way home from taking snacks after doing overtime work for
petitioner. Although the incident occurred when ABAD was not working anymore the
inescapable fact remains that said employee would not have been situated at such time and
place had he not been required by petitioner to do overtime work. Moreover, since petitioner
adopted the evidence adduced by ABAD, it cannot, as the latters employer, inveigle itself from
the ambit of liability, and is thus estopped by the records of the case, which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged
procedural lapses in the petition.
Private respondents contention of petitioners violation of Section 11 of Rule 13 and Section
4 of Rule 45 of the 1997 Rules of Civil Procedure holds no water.
Section 11 of Rule 13 provides:

SEC. 11. Priorities in modes of service and filing. -- Whenever practicable, the service and filing
of pleadings and other papers shall be done personally. Except with respect to papers
emanating from the court, a resort to other modes must be accompanied by a written
explanation why the service or filing was not done personally. A violation of this Rule may be
cause to consider the paper as not filed.
 The explanation why service of a copy of the petition upon the Court of Appeals was done
by registered mail is found on Page 28 of the petition. Thus, there has been compliance with the
aforequoted provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule 45,
the same is unfounded. The material dates required to be stated in the petition are the
following: (1) the date of receipt of the judgment or final order or resolution subject of the
petition; (2) the date of filing of a motion for new trial or reconsideration, if any;
and (3) the date of receipt of the notice of the denial of the motion. Contrary to private
respondents claim, the petition need not indicate the dates of the expiration of the original
reglementary period and the filing of a motion for extension of time to file the petition.  At any
rate, aside from the material dates required under Section 4 of Rule 45, petitioner CASTILEX
also stated in the first page of the petition the date it filed the motion for extension of time to file
the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes
said negligence but claims that it is not vicariously liable for the injuries and subsequent death
caused by ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only
apply to instances where the employer is not engaged in business or industry. Since it
is engaged in the business of manufacturing and selling furniture it is therefore not covered by
said provision. Instead, the fourth paragraph should apply.
Petitioners interpretation of the fifth paragraph is not accurate. The phrase even though the
former are not engaged in any business or industry found in the fifth paragraph should be
interpreted to mean that it is not necessary for the employer to be engaged in any business or
industry to be liable for the negligence of his employee who is acting within the scope of his
assigned task.[5]
A distinction must be made between the two provisions to determine what is
applicable. Both provisions apply to employers: the fourth paragraph, to owners and managers
of an establishment or enterprise; and the fifth paragraph, to employers in general, whether or
not engaged in any business or industry. 
The fourth paragraph covers negligent acts of employees committed either in the service of
the branches or on the occasion of their functions, while the fifth paragraph encompasses
negligent acts of employees acting within the scope of their assigned task. The latter is an
expansion of the former in both employer coverage and acts included. 
Negligent acts of employees, whether or not the employer is engaged in a business or
industry, are covered so long as they were acting within the scope of their assigned task, even
though committed neither in the service of the branches nor on the occasion of their
functions. For, admittedly, employees oftentimes wear different hats. They perform functions
which are beyond their office, title or designation but which, nevertheless, are still within the call
of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a
business or industry such as truck operators [6] and banks.[7] The Court of Appeals cannot,
therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to this case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or
industry, an employer is liable for the torts committed by employees within the scope of his
assigned tasks. But it is necessary to establish the employer-employee relationship; once this is
done, the plaintiff must show, to hold the employer liable, that the employee was acting within
the scope of his assigned task when the tort complained of was committed. It is only then that
the employer may find it necessary to interpose the defense of due diligence in the selection
and supervision of the employee.[8]
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time
of the tort occurrence. As to whether he was acting within the scope of his assigned task is a
question of fact, which the court a quo and the Court of Appeals resolved in the affirmative.
 Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of
Appeals are entitled to great respect, and even finality at times. This rule is, however, subject to
exceptions such as when the conclusion is grounded on speculations, surmises, or conjectures.
[9]
 Such exception obtain in the present case to warrant review by this Court of the finding of the
Court of Appeals that since ABAD was driving petitioners vehicle he was acting within the scope
of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of
his employment, we shall first take up the other reason invoked by the Court of Appeals in
holding petitioner CASTILEX vicariously liable for ABADs negligence, i.e., that the petitioner did
not present evidence that ABAD was not acting within the scope of his assigned tasks at the
time of the motor vehicle mishap.
Contrary to the ruling of the Court of Appeals, it was not incumbent upon the petitioner to
prove the same. It was enough for petitioner CASTILEX to deny that ABAD was acting within
the scope of his duties; petitioner was not under obligation to prove this negative averment. Ei
incumbit probatio qui dicit, non qui negat (He who asserts, not he who denies, must prove). The
Court has consistently applied the ancient rule that if the plaintiff, upon whom rests the burden
of proving his cause of action, fails to show in a satisfactory manner facts which he bases his
claim, the defendant is under no obligation to prove his exception or defense. [10]
Now on the issue of whether the private respondents have sufficiently established that
ABAD was acting within the scope of his assigned tasks.
ABAD, who was presented as a hostile witness, testified that at the time of the incident, he
was driving a company-issued vehicle, registered under the name of petitioner. He was then
leaving the restaurant where he had some snacks and had a chat with his friends after having
done overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to
the problem of whether at a given moment, an employee is engaged in his employers business
in the operation of a motor vehicle, so as to fix liability upon the employer because of the
employees action or inaction; but rather, the result varies with each state of facts. [11]
In Filamer Christian Institute v. Intermediate Appellate Court,[12] this Court had the occasion
to hold that acts done within the scope of the employees assigned tasks includes any act done
by an employee in furtherance of the interests of the employer or for the account of the
employer at the time of the infliction of the injury or damages.
The court a quo and the Court of Appeals were one in holding that the driving by a
manager of a company-issued vehicle is within the scope of his assigned tasks regardless of the
time and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears that he was operating the vehicle within the course or
scope of his employment.
The following are principles in American Jurisprudence on the employers liability for the
injuries inflicted by the negligence of an employee in the use of an employers motor vehicle:

I. Operation of Employers Motor Vehicle in Going to or from Meals

It has been held that an employee who uses his employers vehicle in going from his work
to a place where he intends to eat or in returning to work from a meal is not ordinarily acting
within the scope of his employment in the absence of evidence of some special business benefit
to the employer. Evidence that by using the employers vehicle to go to and from meals, an
employee is enabled to reduce his time-off and so devote more time to the performance of his
duties supports the finding that an employee is acting within the scope of his employment while
so driving the vehicle.[13]
 II. Operation of Employers Vehicle in Going to or from Work

In the same vein, traveling to and from the place of work is ordinarily a personal problem or
concern of the employee, and not a part of his services to his employer. Hence, in the absence
of some special benefit to the employer other than the mere performance of the services
available at the place where he is needed, the employee is not acting within the scope of his
employment even though he uses his employers motor vehicle. [14]
The employer may, however, be liable where he derives some special benefit from having
the employee drive home in the employers vehicle as when the employer benefits from having
the employee at work earlier and, presumably, spending more time at his actual duties. 
Where the employees duties require him to circulate in a general area with no fixed place
or hours of work, or to go to and from his home to various outside places of work, and his
employer furnishes him with a vehicle to use in his work, the courts have frequently applied what
has been called the special errand or roving commission rule, under which it can be found that
the employee continues in the service of his employer until he actually reaches home.
 However, even if the employee be deemed to be acting within the scope of his
employment in going to or from work in his employers vehicle, the employer is not liable for his
negligence where at the time of the accident, the employee has left the direct route to his work
or back home and is pursuing a personal errand of his own.

III. Use of Employers Vehicle outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latter’s personal use
outside of regular working hours is generally not liable for the employees negligent operation of
the vehicle during the period of permissive use, even where the employer contemplates that a
regularly assigned motor vehicle will be used by the employee for personal as well as business
purposes and there is some incidental benefit to the employer.
 Even where the employees personal purpose in using the vehicle has been accomplished
and he has started the return trip to his house where the vehicle is normally kept, it has been
held that he has not resumed his employment, and the employer is not liable for the employees
negligent operation of the vehicle during the return trip. [15]
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on
the doctrine of respondeat superior, not on the principle of bonus pater familias as in
ours. Whether the fault or negligence of the employee is conclusive on his employer as in
American law or jurisprudence, or merely gives rise to the presumption juris tantum of
negligence on the part of the employer as in ours, it is indispensable that the employee was
acting in his employers business or within the scope of his assigned task. [16]
In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner’s
office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldies
Restaurant in Fuente Osmea, Cebu City, which is about seven kilometers away from petitioners
place of business.[17] A witness for the private respondents, a sidewalk vendor, testified that
Fuente Osmea is a lively place even at dawn because Goldies Restaurant and Back Street were
still open and people were drinking thereat. Moreover, prostitutes, pimps, and drug addicts
littered the place.[18]
At the Goldies Restaurant, ABAD took some snacks and had a chat with friends. It was
when ABAD was leaving the restaurant that the incident in question occurred. That same
witness for the private respondents testified that at the time of the vehicular accident, ABAD
was with a woman in his car, who then shouted: Daddy, Daddy![19] This woman could not
have been ABADs daughter, for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular
accident. It was then about 2:00 a.m. of 28 August 1988, way beyond the normal working
hours. ABADs working day had ended; his overtime work had already been completed. His
being at a place which, as petitioner put it, was known as a haven for prostitutes, pimps, and
drug pushers and addicts, had no connection to petitioners business; neither had it any
relation to his duties as a manager. Rather, using his service vehicle even for personal
purposes was a form of a fringe benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions
entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity
require that petitioner be relieved of vicarious liability for the consequences of the
negligence of ABAD in driving its vehicle.[20]
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the
Court of Appeals is AFFIRMED with the modification that petitioner Castilex Industrial
Corporation be absolved of any liability for the damages caused by its employee, Jose Benjamin
Abad.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 75112 October 16, 1990

FILAMER CHRISTIAN INSTITUTE, petitioner, 

vs.
HONORABLE COURT OF APPEALS, HONORABLE ENRIQUE P. SUPLICO, in his capacity as
Judge of the Regional Trial Court,. Branch XIV, Roxas City and the late POTENCIANO
KAPUNAN, SR., as substituted by his heirs, namely: LEONA KAPUNAN TIANGCO, CICERO
KAPUNAN, JESUS KAPUNAN, SANTIAGO KAPUNAN, POTENCIANO KAPUNAN, JR., PAZ
KAPUNAN PUBLICO, SUSA KAPUNAN GENUINO and ERLINDA KAPUNAN
TESORO, respondents.

Aquilina B. Brotarlo for petitioner.

Rhodora G. Kapunan for the Substituted Heirs of the late respondent.

FERNAN, C.J.:

This is a petition for review of the decision 1 of the Court of Appeals affirming the judgment of the
Regional Trial Court (RTC) of Roxas City, Branch 14 in Civil Case No. V-4222 which found petitioner
Filamer Christian Institute and Daniel Funtecha negligent and therefore answerable for the resulting
injuries caused to private respondent Potenciano Kapunan, Sr.

Private respondent Potenciano Kapunan, Sr., an eighty-two-year old retired schoolteacher (now
deceased), was struck by the Pinoy jeep owned by petitioner Filamer and driven by its alleged
employee, Funtecha, as Kapunan, Sr. was walking along Roxas Avenue, Roxas City at 6:30 in the
evening of October 20, 1977. As a result of the accident, Kapunan, Sr. suffered multiple injuries for
which he was hospitalized for a total of twenty (20) days.

Evidence showed that at the precise time of the vehicular accident, only one headlight of the jeep was
functioning. Funtecha, who only had a student driver's permit, was driving after having persuaded
Allan Masa, the authorized driver, to turn over the wheels to him. The two fled from the scene after the
incident. A tricycle driver brought the unconscious victim to the hospital.

Thereafter, Kapunan, Sr. instituted a criminal case against Funtecha alone in the City Court of Roxas
City for serious physical injuries through reckless imprudence. Kapunan, Sr. reserved his right to file
an independent civil action. The inferior court found Funtecha guilty as charged and on appeal, his
conviction was affirmed by the then Court of First Instance of Capiz. 2

Pursuant to his reservation, Kapunan, Sr. commenced a civil case for damages 3 before the RTC of
Roxas City. Named defendants in the complaint were petitioner Filamer and Funtecha. Also
included was Agustin Masa, the director and president of Filamer Christian Institute, in his
personal capacity in that he personally authorized and allowed said Daniel Funtecha who was his
houseboy at the time of the incident, to drive the vehicle in question despite his knowledge and
awareness that the latter did not have the necessary license or permit to drive said vehicle. His son,
Allan Masa, who was with Funtecha at the time of the accident, was not impleaded as a co-
defendant. 4

On December 14, 1983, the trial court rendered judgment finding not only petitioner Filamer and
Funtecha to be at fault but also Allan Masa, a non-party. Thus:

WHEREFORE, finding the averments in the complaint as supported by preponderance of evidence to

be reasonable and justified, and that defendants Daniel Funtecha, Filamer Christian Institute and
Allan Masa are at fault and negligent of the acts complained of which causes (sic) injury to plaintiff,
judgment is hereby rendered in favor of the plaintiff and against the defendants, namely: Daniel
Funtecha and Filamer Christian Institute, the employer whose liability is primary and direct, jointly and
severally, to pay plaintiff the following:

(1) to pay the sum of TWO THOUSAND NINE HUNDRED FIFTY PESOS AND FIFTY
CENTAVOS (P2,950.50) as medical expenses (Exh. "A");

(2) to pay TWO HUNDRED FORTY ONE PESOS (P241.00) as doctor's fee (Exh.
"C");

(3) to pay THREE HUNDRED NINETY PESOS (P390.00) as additional expenses

incurred for thirty-nine days at P10.00 a day, for remuneration of plaintiff's helper
while recuperating;

(4) to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation expenses;

(5) to pay THREE THOUSAND PESOS (P3,000.00) as loss of earnings capacity;

(6) to pay TWENTY THOUSAND (P20,000.00) pesos as moral damages;

(7) to pay FOUR THOUSAND FIVE HUNDRED PESOS (P4,500.00) as attorney's

fees;

(8) to pay TWENTY THOUSAND PESOS (P20,000.00)as insurance indemnity on the

policy contract;

and without prejudice to the right of defendant Filamer Christian Institute to demand
from co-defendant Daniel Funtecha part-time employee and/or Allan Masa a full time
employee reimbursement of the damages paid to herein plaintiff.

The defendant Agustin Masa as director of defendant Filamer Christian Institute has
also failed to exercise the diligence required of a good father of a family in the
supervision of his employee Allan Masa, being his son. However, the court absolved
defendant Agustin Masa from any personal liability with respect to the complaint filed
against him in his personal and private capacity, cause he was not in the vehicle
during the alleged incident.

For failure to prove their respective counterclaims filed by the defendant Daniel
Funtecha, Dr. Agustin Masa, and Filamer Christian Institute, as against the herein
plaintiff, same are hereby dismissed.

The Zenith Insurance Corporation as third party defendant has failed to prove that
there was a policy violation made by the defendant Filamer Christian Institute which
absolves them from liability under the aforesaid insurance policy. The record shows
that the defendant Daniel Funtecha while driving the said vehicle was having a
student driver’s license marked Exh. "1" and accompanied by Allan Masa who is the
authorized driver of said vehicle with a professional driver’s license as shown by Exh.
"3".
 This Court finds that defendant Daniel Funtecha while driving the said vehicle is
considered as authorized driver in accordance with the policy in question marked
Exh. "2-Masa and FCI".

Finding the averments in the third party complaint filed by defendant Filamer Christian
Institute as supported by preponderance of evidence as shown by their exhibits to be
reasonable and justified, judgment is hereby rendered in favor of the said defendant
and third party plaintiff Filamer Christian Institute as against third party defendant
Zenith Insurance Corporation.

The Zenith Insurance Corporation as third party defendant is hereby ordered to pay in
favor of the defendant and third party plaintiff, Filamer Christian Institute, the
following:

(1) to pay TWENTY THOUSAND PESOS (P20,000.00) as third party

liability as provided in the Zenith Insurance Corporation policy (Exh.
"2");

(2) to pay TEN THOUSAND PESOS (P10,000.00)as moral damages;

(3) to pay FOUR THOUSAND PESOS (P4,000.00) as Court litigation

and actual expenses;

(4) to pay THREE THOUSAND PESOS (P3,000.00) as attorney's

fees;

The defendants Daniel Funtecha, Filamer Christian Institute and third party defendant
Zenith Insurance Corporation are hereby ordered jointly and severally, to pay the
costs of the suit. 5

Only petitioner Filamer and third-party defendant Zenith Insurance Corporation appealed the
lower court's judgment to the Court of Appeals and as a consequence, said lower court's decision
became final as to Funtecha. For failure of the insurance firm to pay the docket fees, its appeal was
dismissed on September 18, 1984. On December 17, 1985, the Appellate Court rendered the assailed
judgment affirming the trial court's decision in toto. 6 Hence the present recourse by petitioner Filamer.

It is petitioner Filamer's basic contention that it cannot be held responsible for the tortious act of
Funtecha on the ground that there is no existing employer-employee relationship between them. We
agree.

The 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.

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

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.

xxx xxx xxx

 The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observe all the diligence of a good father of a family to
prevent damage. (Emphasis supplied).

The legal issue in this appeal is whether or not the term "employer" as used in Article 2180 is
applicable to petitioner Filamer with reference to Funtecha.

In disclaiming liability, petitioner Filamer has invoked the provisions of the Labor Code,  7 specifically
Section 14, Rule X of Book III which reads:

Sec. 14. Working scholars. — There is no employer-employee relationship between

students on the one hand, and schools, colleges or universities on the other, where
students work for the latter in exchange for the privilege to study free of charge;
provided the students are given real opportunity, including such facilities as may be
reasonable, necessary to finish their chosen court under such arrangement.
(Emphasis supplied).

It is manifest that under the just-quoted provision of law, petitioner Filamer cannot be considered
as Funtecha's employer. Funtecha belongs to that special category of students who render service
to the school in exchange for free tuition Funtecha worked for petitioner for two hours daily for five
days a week. He was assigned to clean the school passageways from 4:00 a.m. to 6:00 a.m. with
sufficient time to prepare for his 7:30 a.m. classes. As admitted by Agustin Masa in open court,
Funtecha was not included in the company payroll. 8

The wording of Section 14 is clear and explicit and leaves no room for equivocation. To dismiss the
implementing rule as one which governs only the "personal relationship" between the school and its
students and not where there is already a third person involved, as espoused by private respondents,
is to read into the law something that was not legislated there in the first place.

The provision of Section 14 is obviously intended to eliminate an erstwhile gray area in labor relations
and seeks to define in categorical terms the precise status of working scholars in relation to the
learning institutions in which they work for the privilege of a free education.

But even if we were to concede the status of an employee on Funtecha, still the primary responsibility
for his wrongdoing cannot be imputed to petitioner Filamer for the plain reason that at the time of the
accident, it has been satisfactorily shown that Funtecha was not acting within the scope of his
supposed employment.

His duty was to sweep the school passages for two hours every morning before his regular classes.
Taking the wheels of the Pinoy jeep from the authorized driver at 6:30 in the evening and then driving
the vehicle in a reckless manner resulting in multiple injuries to a third person were certainly not within
the ambit of his assigned tasks. In other words, at the time of the injury, Funtecha was not engaged
in the execution of the janitorial services for which he was employed, but for some purpose of
his own. It is but fair therefore that Funtecha should bear the full brunt of his tortious negligence.
Petitioner Filamer cannot be made liable for the damages he had caused.

Private respondents' attempt to hold petitioner Filamer directly and primarily answerable to the injured
party under Article 2180 of the Civil Code would have prospered had they proceeded against Allan
Masa, the authorized driver of the Pinoy jeep and undisputably an employee of petitioner.

It was Allan's irresponsible act of entrusting the wheels of the vehicle to the inexperienced Funtecha
which set into motion the chain of events leading to the accident resulting in injuries to Kapunan, Sr.
But under the present set of circumstances, even if the trial court did find Allan guilty of negligence,
such conclusion would not be binding on Allan. It must be recalled that Allan was never impleaded in
the complaint for damages and should be considered as a stranger as far as the trial court's judgment
is concerned. It is axiomatic that no man shall be affected by a proceeding to which he is a stranger.  9
WHEREFORE, in view of the foregoing, the decision under review of the Court of Appeals is hereby
SET ASIDE. The complaint for damages 10 is ordered DISMISSED as against petitioner Filamer
Christian Institute for lack of cause of action. No costs.

SO ORDERED.

Bidin and Cortes, JJ., concur.

Republic of the Philippines
Supreme Court
Manila
 
 
 
 
THIRD DIVISION
 
 
ROLITO CALANG and PHILTRANCO G.R. No. 190696
SERVICE ENTERPRISES, INC.,  
Petitioners, Present:
   
  CARPIO MORALES, J., Chairperson,
-         versus - BRION,
  BERSAMIN,
*
  ABAD, and
PEOPLE OF THE PHILIPPINES, VILLARAMA, JR., JJ.
Respondent. -- -  
Promulgated:
 
August 3, 2010
x-----------------------------------------------------------------------------------------x
 
RESOLUTION
 
BRION, J.:
 
We resolve the motion for reconsideration filed by the petitioners, Philtranco Service
Enterprises, Inc. (Philtranco) and Rolito Calang, to challenge our Resolution of February 17,
2010. Our assailed Resolution denied the petition for review on certiorari for failure to show any
reversible error sufficient to warrant the exercise of this Courts discretionary appellate jurisdiction.
 
Antecedent Facts
At around 2:00 p.m. of April 22, 1989, Rolito Calang was driving Philtranco Bus No. 7001 , owned by
Philtranco along Daang Maharlika Highway in Barangay Lambao, Sta. Margarita, Samar when its
rear left side hit the front left portion of a Sarao jeep coming from the opposite direction. As a result of
the collision, Cresencio Pinohermoso, the jeeps driver, lost control of the vehicle, and bumped and
killed Jose Mabansag, a bystander who was standing along the highways shoulder . The jeep turned
turtle three (3) times before finally stopping at about 25 meters from the point of impact. Two of the
jeeps passengers, Armando Nablo and an unidentified woman, were instantly killed, while the
other passengers sustained serious physical injuries.
 
The prosecution charged Calang with multiple homicide, multiple serious physical injuries and
damage to property thru reckless imprudence before the Regional Trial Court (RTC), Branch
31, Calbayog City. The RTC, in its decision dated May 21, 2001, found Calang guilty beyond
reasonable doubt of reckless imprudence resulting to multiple homicide, multiple physical
injuries and damage to property, and sentenced him to suffer an indeterminate penalty of
thirty days of arresto menor, as minimum, to four years and two months of prision
correccional, as maximum. The RTC ordered Calang and Philtranco, jointly and severally, to
pay P50,000.00 as death indemnity to the heirs of Armando; P50,000.00 as death indemnity to the
heirs of Mabansag; and P90,083.93 as actual damages to the private complainants.
 
The petitioners appealed the RTC decision to the Court of Appeals (CA), docketed as CA-
G.R. CR No. 25522. The CA, in its decision dated November 20, 2009, affirmed the RTC
decision in toto. The CA ruled that petitioner Calang failed to exercise due care and precaution in
driving the Philtranco bus. According to the CA, various eyewitnesses testified that the bus was
traveling fast and encroached into the opposite lane when it evaded a pushcart that was on the side of
the road. In addition, he failed to slacken his speed, despite admitting that he had already seen the
jeep coming from the opposite direction when it was still half a kilometer away. The CA further ruled
that Calang demonstrated a reckless attitude when he drove the bus, despite knowing that it was
suffering from loose compression, hence, not roadworthy.
 
The CA added that the RTC correctly held Philtranco jointly and severally liable with petitioner Calang,
for failing to prove that it had exercised the diligence of a good father of the family to prevent the
accident.
 
The petitioners filed with this Court a petition for review on certiorari. In our Resolution dated
February 17, 2010, we denied the petition for failure to sufficiently show any reversible error in the
assailed decision to warrant the exercise of this Courts discretionary appellate jurisdiction.
 
The Motion for Reconsideration
 
In the present motion for reconsideration, the petitioners claim that there was no basis to hold
Philtranco jointly and severally liable with Calang because the former was not a party in
the criminal case (for multiple homicide with multiple serious physical injuries and damage to property
thru reckless imprudence) before the RTC.
 
The petitioners likewise maintain that the courts below overlooked several relevant facts,
supported by documentary exhibits, which, if considered, would have shown that Calang was not
negligent, such as the affidavit and testimony of witness Celestina Cabriga; the testimony of witness
Rodrigo Bocaycay; the traffic accident sketch and report; and the jeepneys registration receipt. The
petitioners also insist that the jeeps driver had the last clear chance to avoid the collision.
 
We partly grant the motion.
 
 
 
 
Liability of Calang
 
We see no reason to overturn the lower courts finding on Calangs culpability. The finding of
negligence on his part by the trial court, affirmed by the CA, is a question of fact that we cannot pass
upon without going into factual matters touching on the finding of negligence. In petitions for review
on certiorari under Rule 45 of the Revised Rules of Court, this Court is limited to reviewing only errors
of law, not of fact, unless the factual findings complained of are devoid of support by the evidence on
record, or the assailed judgment is based on a misapprehension of facts.
 
Liability of Philtranco
 
We, however, hold that the RTC and the CA both erred in holding Philtranco jointly and
severally liable with Calang. We emphasize that Calang was charged criminally before the RTC.
Undisputedly, Philtranco was not a direct party in this case. Since the cause of action against Calang
was based on delict, both the RTC and the CA erred in holding Philtranco jointly and severally liable
with Calang, based on quasi-delict under Articles 2176 [1] and 2180[2] of the Civil Code. Articles 2176
and 2180 of the Civil Code pertain to the vicarious liability of an employer for quasi-delicts that an
employee has committed. Such provision of law does not apply to civil liability arising from delict.
 
 If at all, Philtrancos liability may only be subsidiary. Article 102 of the Revised Penal Code states
the subsidiary civil liabilities of innkeepers, tavernkeepers and proprietors of establishments, as
follows:

 
In default of the persons criminally liable, innkeepers, tavern keepers, and
any other persons or corporations shall be civilly liable for crimes committed in their
establishments, in all cases where a violation of municipal ordinances or some
general or special police regulations shall have been committed by them or their
employees.
 
Innkeepers are also subsidiary liable for the restitution of goods taken by
robbery or theft within their houses from guests lodging therein, or for the payment of
the value thereof, provided that such guests shall have notified in advance the
innkeeper himself, or the person representing him, of the deposit of such goods within
the inn; and shall furthermore have followed the directions which such innkeeper or
his representative may have given them with respect to the care of and vigilance over
such goods. No liability shall attach in case of robbery with violence against or
intimidation of persons unless committed by the innkeepers employees.
 
The foregoing subsidiary liability applies to employers, according to Article 103 of the Revised
Penal Code, which reads:
 
The subsidiary liability established in the next preceding article shall also
apply to employers, teachers, persons, and corporations engaged in any kind of
industry for felonies committed by their servants, pupils, workmen, apprentices, or
employees in the discharge of their duties.
 
The provisions of the Revised Penal Code on subsidiary liability Articles 102 and 103 are
deemed written into the judgments in cases to which they are applicable. Thus, in the dispositive
portion of its decision, the trial court need not expressly pronounce the subsidiary liability of the
employer.[3] Nonetheless, before the employers subsidiary liability is enforced, adequate
evidence must exist establishing that (1) they are indeed the employers of the convicted
employees; (2) they are engaged in some kind of industry; (3) the crime was committed by the
employees in the discharge of their duties; and (4) the execution against the latter has not
been satisfied due to insolvency. The determination of these conditions may be done in the same
criminal action in which the employees liability, criminal and civil, has been pronounced, in a hearing
set for that precise purpose, with due notice to the employer, as part of the proceedings for the
execution of the judgment.[4]
 
WHEREFORE, we PARTLY GRANT the present motion. The Court of Appeals decision that
affirmed in toto the RTC decision, finding Rolito Calang guilty beyond reasonable doubt of reckless
imprudence resulting in multiple homicide, multiple serious physical injuries and damage to property,
is AFFIRMED, with the MODIFICATION that Philtrancos liability should only be subsidiary. No costs.
 

SO ORDERED.
 G.R. No. 156034             October 1, 2003

DELSAN TRANSPORT LINES, INC., petitioner, 

vs.
C & A construction, inc., respondent.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review under Rule 45 of the Revised Rules of Court are the June 14, 2002
decision1 of the Court of Appeals in CA-G.R. CV No. 59034, which reversed the decision 2 of the
Regional Trial Court of Manila, Branch 46, in Civil Case No. 95-75565, and its November 7, 2002
resolution3 denying petitioner’s motion for reconsideration.

The undisputed facts reveal that respondent C & A Construction, Inc. was engaged by the National
Housing Authority (NHA) to construct a deflector wall at the Vitas Reclamation Area in Vitas, Tondo,
Manila.4 The project was completed in 1994 but it was not formally turned over to NHA.

On October 9, 1994, M/V Delsan Express, a ship owned and operated by petitioner Delsan
Transport Lines, Inc., anchored at the Navotas Fish Port for the purpose of installing a cargo pump
and clearing the cargo oil tank. At around 12:00 midnight of October 20, 1994, Captain Demetrio T.
Jusep of M/V Delsan Express received a report from his radio head operator in Japan 5 that a typhoon
was going to hit Manila6 in about eight (8) hours.

7 
At approximately 8:35 in the morning of October 21, 1994, Capt. Jusep tried to seek shelter at the
North Harbor but could not enter the area because it was already congested. 8 At 10:00 a.m., Capt.
Jusep decided to drop anchor at the vicinity of Vitas mouth, 4 miles away from a Napocor power
barge. At that time, the waves were already reaching 8 to 10 feet high. Capt. Jusep ordered his crew
to go full ahead to counter the wind which was dragging the ship towards the Napocor power barge.
To avoid collision, Capt. Jusep ordered a full stop of the vessel. 9 He succeeded in avoiding the power
barge, but when the engine was re-started and the ship was maneuvered full astern, it hit the deflector
wall constructed by respondent.10 The damage caused by the incident amounted to P456,198.24. 11

Respondent demanded payment of the damage from petitioner but the latter refused to pay.
Consequently, respondent filed a complaint for damages with the Regional Trial Court of Manila,
Branch 46, which was docketed as Civil Case No. 95-75565. In its answer, petitioner claimed that the
damage was caused by a fortuitous event.12

On February 13, 1998, the complaint filed by respondent was dismissed. The trial court ruled that
petitioner was not guilty of negligence because it had taken all the necessary precautions to avoid the
accident. Applying the "emergency rule", it absolved petitioner of liability because the latter had no
opportunity to adequately weigh the best solution to a threatening situation. It further held that even if
the maneuver chosen by petitioner was a wrong move, it cannot be held liable as the cause of the
damage sustained by respondent was typhoon "Katring", which is an act of God. 13

On appeal to the Court of Appeals, the decision of the trial court was reversed and set aside.14 It
found Capt. Jusep guilty of negligence in deciding to transfer the vessel to the North Harbor only at
8:35 a.m. of October 21, 1994 and thus held petitioner liable for damages.

Hence, petitioner filed the instant petition contending that Capt. Jusep was not negligent in waiting
until 8:35 in the morning of October 21, 1994 before transferring the vessel to the North Harbor
inasmuch as it was not shown that had the transfer been made earlier, the vessel could have sought
shelter.15 It further claimed that it cannot be held vicariously liable under Article 2180 of the Civil Code
because respondent failed to allege in the complaint that petitioner was negligent in the selection and
supervision of its employees.

16 
Granting that Capt. Jusep was indeed guilty of negligence, petitioner is not liable because it
exercised due diligence in the selection of Capt. Jusep who is a duly licensed and competent Master
Mariner.17

The issues to be resolved in this petition are as follows – (1) Whether or not Capt. Jusep was
negligent; (2) If yes, whether or not petitioner is solidarily liable under Article 2180 of the Civil Code for
the quasi-delict committed by Capt. Jusep?

Article 2176 of the Civil Code provides that 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. The test for
determining the existence of negligence in a particular case may be stated as follows: Did the
defendant in doing the alleged negligent act use the reasonable care and caution which an ordinary
prudent person would have used in the same situation? If not, then he is guilty of negligence. 18

In the case at bar, the Court of Appeals was correct in holding that Capt. Jusep was negligent in
deciding to transfer the vessel only at 8:35 in the morning of October 21, 1994. As early as 12:00
midnight of October 20, 1994, he received a report from his radio head operator in Japan 19 that a
typhoon was going to hit Manila20 after 8 hours.

21
This, notwithstanding, he did nothing, until 8:35 in the morning of October 21, 1994, when he
decided to seek shelter at the North Harbor, which unfortunately was already congested. The finding
of negligence cannot be rebutted upon proof that the ship could not have sought refuge at the North
Harbor even if the transfer was done earlier. It is not the speculative success or failure of a decision
that determines the existence of negligence in the present case, but the failure to take immediate and
appropriate action under the circumstances.

Capt. Jusep, despite knowledge that the typhoon was to hit Manila in 8 hours, complacently waited for
the lapse of more than 8 hours thinking that the typhoon might change direction. 22 He cannot claim
that he waited for the sun to rise instead of moving the vessel at midnight immediately after receiving
the report because of the difficulty of traveling at night. The hour of 8:35 a.m. is way past sunrise.
Furthermore, he did not transfer as soon as the sun rose because, according to him, it was not very
cloudy23 and there was no weather disturbance yet.24

When he ignored the weather report notwithstanding reasonable foresight of harm, Capt. Jusep
showed an inexcusable lack of care and caution which an ordinary prudent person would have
observed in the same situation.25Had he moved the vessel earlier, he could have had greater chances
of finding a space at the North Harbor considering that the Navotas Port where they docked was very
near North Harbor.26 Even if the latter was already congested, he would still have time to seek refuge
in other ports.

The trial court erred in applying the emergency rule. Under this rule, one who suddenly finds himself
in a place of danger, and is required to act without time to consider the best means that may be
adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what
subsequently and upon reflection may appear to have been a better method, unless the danger in
which he finds himself is brought about by his own negligence. 27 Clearly, the emergency rule is not
applicable to the instant case because the danger where Capt. Jusep found himself was caused by
his own negligence.

Anent the second issue, we find petitioner vicariously liable for the negligent act of Capt.
Jusep. Under Article 2180 of the Civil Code an employer may be held solidarily liable for the negligent
act of his employee. Thus –

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

xxxxxxxxx

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.

xxxxxxxxx

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

Whenever an employee’s negligence causes damage or injury to another, there instantly arises a
presumption juris tantum that the employer failed to exercise diligentissimi patris families in the
selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees. To avoid liability for
a quasi-delict committed by his employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good father of a family in the
selection and supervision of his employee. 28

There is no question that petitioner, who is the owner/operator of M/V Delsan Express, is also the
employer of Capt. Jusep who at the time of the incident acted within the scope of his duty. The
defense raised by petitioner was that it exercised due diligence in the selection of Capt. Jusep
because the latter is a licensed and competent Master Mariner.

It should be stressed, however, that the required diligence of a good father of a family pertains not
only to the selection, but also to the supervision of employees. It is not enough that the employees
chosen be competent and qualified, inasmuch as the employer is still required to exercise due
diligence in supervising its employees.

In Fabre, Jr. v. Court of Appeals,29 it was held that due diligence in supervision requires the
formulation of rules and regulations for the guidance of employees and the issuance of proper
instructions as well as actual implementation and monitoring of consistent compliance with the rules.
Corollarily, in Ramos v. Court of Appeals,30 the Court stressed that once negligence on the part of the
employees is shown, the burden of proving that he observed the diligence in the selection and
supervision of its employees shifts to the employer.

In the case at bar, however, petitioner presented no evidence that it formulated rules/guidelines for
the proper performance of functions of its employees and that it strictly implemented and monitored
compliance therewith. Failing to discharge the burden, petitioner should therefore be held liable for the
negligent act of Capt. Jusep.

So also, petitioner cannot disclaim liability on the basis of respondent’s failure to allege in its
complaint that the former did not exercise due diligence in the selection and supervision of its
employees. In Viron Transportation Co., Inc. v. Delos Santos,31 it was held that it is not necessary to
state that petitioner was negligent in the supervision or selection of its employees, inasmuch as its
negligence is presumed by operation of law. Allegations of negligence against the employee and that
of an employer-employee relation in the complaint are enough to make out a case of  quasi-
delict under Article 2180 of the Civil Code.32

Considering that petitioner did not assail the damages awarded by the trial court, we find no reason to
alter the same. The interest imposed should, however, be modified. In Eastern Shipping Lines, Inc. v.
Court of Appeals,33 it was held that the rate of interest on obligations not constituting a loan or
forbearance of money is six percent (6%) per annum. If the purchase price can be established with
certainty at the time of the filing of the complaint, the six percent (6%) interest should be computed
from the date the complaint was filed until finality of the decision.

After the judgment becomes final and executory until the obligation is satisfied, the amount due shall
earn interest at 12% per year, the interim period being deemed equivalent to a forbearance of credit. 34

Accordingly, the amount of P456,198.27 due the respondent shall earn 6% interest per annum from
October 3, 1995 until the finality of this decision. If the adjudged principal and the interest (or any part
thereof) remain unpaid thereafter, the interest rate shall be twelve percent (12%) per annum
computed from the time the judgment becomes final and executory until it is fully satisfied.

WHEREFORE, in view of all the foregoing, the instant petition is DENIED. The June 14, 2002
decision of the Court of Appeals in CA-G.R. CV No. 59034 ordering petitioner Delsan Transport Lines,
Inc., to pay respondent C & A Construction, Inc., damages in the amount of P456,198.27, plus
P30,000.00 as attorney’s fees, is AFFIRMED with the MODIFICATION that the award of
P456,198.27 shall earn interest at the rate of 6% per annum from October 3, 1995, until finality
of this decision, and 12% per annum thereafter on the principal and interest (or any part
thereof) until full payment.

SO ORDERED.