TORTSRepublic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-2075 November 29, 1949MARGARITA AFIALDA,plaintiff-appellant,vs.BASILIO HISOLE and FRANCISCO HISOLE,defendants-appellees.Nicolas P. Nonato for appellant.Gellada, Mirasol and Ravena for appellees.REYES,J.:This is an action for damages arising from injury caused by an animal. The complaint alleges that the now deceased, Loreto Afialda, was employed by the defendant spouses as caretaker of their carabaos at a fixed compensation; that while tending the animals he was, on March 21, 1947, gored by one of them and later died as a consequence of his injuries; that the mishap was due neither to his own fault nor toforce majeure; and that plaintiff is his elder sister and heir depending upon him for support.Before filing their answer, defendants moved for the dismissal of the complaint for lack of a cause of action, and the motion having been granted by the lower court, plaintiff has taken this appeal.Plaintiff seeks to hold defendants liable under article 1905 of the Civil Code, which reads:The possessor of an animal, or the one who uses the same, is liable for any damages it may cause, even if such animal should escape from him or stray away.This liability shall cease only in case, the damage should arise fromforce majeureor from the fault of the person who may have suffered it.The question presented is whether the owner of the animal is liable when damage is caused to its caretaker.The lower court took the view that under the above-quoted provision of the Civil Code, the owner of an animal is answerable only for damages caused to a stranger, and that for damage caused to the caretaker of the animal the owner would be liable only if he had been negligent or at fault under article 1902 of the same code. Claiming that the lower court was in error, counsel for plaintiff contends that the article 1905 does not distinguish between damage caused to the caretaker and makes the owner liable whether or not he has been negligent or at fault. For authority counsel cites the following opinion which Manresa quotes from a decision of the Spanish Supreme Court:El articulo 1905 del codigo Civil no consienta otra interpretacion que la que, clara y evidentemente, se deriva de sus terminos literales, bastando, segun el mismo, que un animal cause perjuicio para que nasca la responsibilidad del dueno, aun no imputandose a este ninguna clase de culpa o negligencia, habida,sin duda, cuenta por el lgislador de que tal concepto de dueno es suficiente para que arrastre las consecuencias favorables o adversas de esta clase de propiedad, salvo la exception en el mismo contenida. (12 Manresa, Commentaries on the Spanish CivilCode, 573.)This opinion, however, appears to have been rendered in a case where an animal caused injury to a stranger or third person. It is therefore no authority for a case like the present where the person injured was the caretaker of the animal. The distinction is important. For the statute names thepossessororuserof the animal as the person liable for "any damages it may cause," and this for the obvious reason that the possessor or user has the custody and control of the animal and is therefore the one in a position to prevent it from causing damage.In the present case, the animal was in custody and under the control of the caretaker, who was paid for his work as such. Obviously, it was the caretaker's business to try to prevent the animal from causing injury or damage to anyone, including himself. And being injured by the animal under those circumstances, was one of the risks of the occupation which he had voluntarily assumed and for which he must take the consequences.In a decision of the Spanish Supreme Court, cited by Manresa in his Commentaries (Vol. 12, p. 578), the death of an employee who was bitten by a feline which his master had asked him to take to his establishment was by said tribunal declared to be "a veritable accident of labor" which should come under the labor laws rather than under article 1905 of the Civil Code. The present action, however, is not brought under the Workmen's Compensation Act, there being no allegation that, among other things, defendant's business, whatever that might be, had a gross income of P20,000. As already stated, defendant's liability is made to rest on article 1905 of the Civil Code. but action under that article is not tenable for the reasons already stated. On the other hand, if action is to be based on article 1902 of the Civil Code, it is essential that there be fault or negligence on the part of the defendants as owners of the animal that caused the damage. But the complaint contains no allegation on those points.There being no reversible error in the order appealed from, the same is hereby affirmed, but without costs in view of the financial situation of the appellant.

G.R. No. L-9010 March 28, 1914J. H. CHAPMAN, plaintiff-appellant, vs.JAMES M. UNDERWOOD, defendant-appellee.Wolfson & Wolfson for appellant.Bruce, Lawrence, Ross & Block for appellee.MORELAND, J.:At the time the accident occurred, which is the basis of this action, there was a single-track street-car line running along Calle Herran, with occasional switches to allow cars to meet and pass each other. One of these switches was located at the scene of the accident.

The plaintiff had been visiting his friend, a man by the name of Creveling, in front of whose house the accident happened. He desired to board a certain "San Marcelino" car coming from Santa Ana and bound for Manila. Being told by Creveling that the car was approaching, he immediately, and somewhat hurriedly, passed from the gate into the street for the purpose of signaling and boarding the car. The car was a closed one, the entrance being from the front or the rear flatform. Plaintiff attempted to board the front platform but, seeing that he could not reached it without extra exertion, stopped beside the car, facing toward the rear platform, and waited for it to come abreast of him in order to board. While in this position he was struck from behind and run over by the defendant's automobile.

The defendant entered Calle Herran at Calle Peafrancia in his automobile driven by his chauffeur, a competent driver. A street car bound from Manila to Santa Ana being immediately in front of him, he followed along behind it.

Just before reaching the scene of the accident the street car which was following took the switch that is, went off the main line to the left upon the switch lying alongside of the main track. Thereupon the defendant no longer followed that the street car nor went to the left, but either kept straight ahead on the main street-car track or a bit to the right. The car which the plaintiff intended to board was on the main line and bound in an opposite direction to that in which the defendant was going. When the front of the "San Marcelino" car, the one the plaintiff attempted to board, was almost in front of the defendant's automobile, defendant's driver suddenly went to the right and struck and ran over the plaintiff, as above described.The judgment of the trial court was for defendant.

A careful examination of the record leads us to the conclusion that the defendant's driver was guilty of negligence in running upon and over the plaintiff. He was passing an oncoming car upon the wrong side. The plaintiff, in common out to board the car, was not obliged, for his own protection, to observe whether a car was coming upon him from his left hand. He had only to guard against those coming from the right. He knew that, according to the law of the road, no automobile or other vehicle coming from his left should pass upon his side of the car. He needed only to watch for cars coming from his right, as they were the only ones under the law permitted to pass upon that side of the street car.

The defendant, however, is not responsible for the negligence of his driver, under the facts and circumstances of this case. As we have said in the case of Johnson vs. David (5 Phil. Rep., 663), the driver does not fall within the list of persons in article 1903 of the Civil Code for whose acts the defendant would be responsible.Although in the David case the owner of the vehicle was not present at the time the alleged negligent acts were committed by the driver, the same rule applies where the owner is present, unless the negligent act of the driver are continued for such a length of time as to give the owner a reasonable opportunity to observe them and to direct his driver to desist therefrom.

An owner who sits in his automobile, or other vehicle, and permits his driver to continue in a violation of the law by the performance of negligent acts, after he has had a reasonable opportunity to observe them and to direct that the driver cease therefrom, becomes himself responsible for such acts. The owner of an automobile who permits his chauffeur to drive up to Escolta, for example, at a speed of 60 miles an hour, without any effort to stop him, although he has had a reasonable opportunity to do so, becomes himself responsible, both criminally and civilly, for the results produced by the acts of his chauffeur. On the other hand, if the driver, by a sudden act of negligence, and without the owner having a reasonable opportunity to prevent the acts or its continuance, injures a person or violates the criminal law, the owner of the automobile, although present therein at the time the act was committed, is not responsible, either civilly or criminally, therefor. The act complained of must be continued in the presence of the owner for such a length a time that the owner, by his acquiescence, makes his driver's act his own.

In the case before us it does not appear from the record that, from the time the automobile took the wrong side of the road to the commission of the injury, sufficient time intervened to give the defendant an opportunity to correct the act of his driver. Instead, it appears with fair clearness that the interval between the turning out to meet and pass the street car and the happening of the accident was so small as not to be sufficient to charge defendant with the negligence of the driver.

Whether or not the owner of an automobile driven by a competent driver, would be responsible, whether present or not, for the negligent acts of his driver when the automobile was a part of a business enterprise, and was being driven at the time of the accident in furtherance of the owner's business, we do not now decide.

The judgment appealed from is affirmed, with costs against the appellant.Arellano, C.J., Carson and Araullo, JJ., concur. Trent, J., concurs in the result.

G.R. No. L-20392December 18, 1968MARCIAL T. CAEDO, JUANA SANGALANG CAEDO, and the Minors, EPHRAIM CAEDO, EILEEN CAEDO, ROSE ELAINE CAEDO, suing through their father, MARCIAL T. CAEDO, as guardian ad litem, plaintiffs-appellants, vs.YU KHE THAI and RAFAEL BERNARDO, defendants-appellants.Norberto J. Quisumbing for plaintiffs-appellants.De Joya, Lopez, Dimaguila, Hermoso and Divino for defendants-appellantsMAKALINTAL, J.:As a result of a vehicular accident in which plaintiff Marcial Caedo and several members of his family were injured they filed this suit for recovery of damages from the defendants. The judgment, rendered by the Court of First Instance of Rizal on February 26, 1960 (Q-2952), contains the following disposition:

IN VIEW OF THE FOREGOING, the court renders a judgment, one in favor of the plaintiffs and against the defendants, Yu Khe Thai and Rafael Bernardo, jointly and severally, to pay to plaintiffs Marcial Caedo, et al., the sum of P1,929.70 for actual damages; P48,000.00 for moral damages; P10,000.00 for exemplary damages; and P5,000.00 for attorney's fees, with costs against the defendants. The counterclaim of the defendants against the plaintiffs is hereby ordered dismissed, for lack of merits.

On March 12, 1960 the judgment was amended so as to include an additional award of P3,705.11 in favor of the plaintiffs for the damage sustained by their car in the accident.

Both parties appealed to the Court of Appeals, which certified the case to us in view of the total amount of the plaintiffs' claim.

There are two principal questions posed for resolution: (1) who was responsible for the accident? and (2) if it was defendant Rafael Bernardo, was his employer, defendant Yu Khe Thai, solidarily liable with him? On the first question the trial court found Rafael Bernardo negligent; and on the second, held his employer solidarily liable with him.

The mishap occurred at about 5:30 in the morning of March 24, 1958 on Highway 54 (now E. de los Santos Avenue) in the vicinity of San Lorenzo Village. Marcial was driving his Mercury car on his way from his home in Quezon City to the airport, where his son Ephraim was scheduled to take a plane for Mindoro. With them in the car were Mrs. Caedo and three daughters. Coming from the opposite direction was the Cadillac of Yu Khe Thai, with his driver Rafael Bernardo at the wheel, taking the owner from his Paraaque home to Wack Wack for his regular round of golf.

The two cars were traveling at fairly moderate speeds, considering the condition of the road and the absence of traffic the Mercury at 40 to 50 kilometers per hour, and the Cadillac at approximately 30 to 35 miles (48 to 56 kilometers). Their headlights were mutually noticeable from a distance. Ahead of the Cadillac, going in the same direction, was a caretella owned by a certain Pedro Bautista. The carretela was towing another horse by means of a short rope coiled around the rig's vertical post on the right side and held at the other end by Pedro's son, Julian Bautista.

Rafael Bernardo testified that he was almost upon the rig when he saw it in front of him, only eight meters away. This is the first clear indication of his negligence. The carretela was provided with two lights, one on each side, and they should have given him sufficient warning to take the necessary precautions. And even if he did not notice the lights, as he claimed later on at the trial, the carretela should anyway have been visible to him from afar if he had been careful, as it must have been in the beam of his headlights for a considerable while.

In the meantime the Mercury was coming on its own lane from the opposite direction. Bernardo, instead of slowing down or stopping altogether behind the carretela until that lane was clear, veered to the left in order to pass. As he did so the curved end of his car's right rear bumper caught the forward rim of the rig's left wheel, wrenching it off and carrying it along as the car skidded obliquely to the other lane, where it collided with the oncoming vehicle. On his part Caedo had seen the Cadillac on its own lane; he slackened his speed, judged the distances in relation to the carretela and concluded that the Cadillac would wait behind. Bernardo, however, decided to take a gamble beat the Mercury to the point where it would be in line with the carretela, or else squeeze in between them in any case. It was a risky maneuver either way, and the risk should have been quite obvious. Or, since the car was moving at from 30 to 35 miles per hour (or 25 miles according to Yu Khe Thai) it was already too late to apply the brakes when Bernardo saw the carretela only eight meters in front of him, and so he had to swerve to the left in spite of the presence of the oncoming car on the opposite lane. As it was, the clearance Bernardo gave for his car's right side was insufficient. Its rear bumper, as already stated, caught the wheel of the carretela and wrenched it loose. Caedo, confronted with the unexpected situation, tried to avoid the collision at the last moment by going farther to the right, but was unsuccessful. The photographs taken at the scene show that the right wheels of his car were on the unpaved shoulder of the road at the moment of impact.

There is no doubt at all that the collision was directly traceable to Rafael Bernardo's negligence and that he must be held liable for the damages suffered by the plaintiffs. The next question is whether or not Yu Khe Thai, as owner of the Cadillac, is solidarily liable with the driver.

The applicable law is Article 2184 of the Civil Code, which reads:

ART. 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have, by the use of due diligence, prevented the misfortune. It is disputably presumed that a driver was negligent, if he had been found guilty of reckless driving or violating traffic regulations at least twice within the next preceding two months.

Under the foregoing provision, if the causative factor was the driver's negligence, the owner of the vehicle who was present is likewise held liable if he could have prevented the mishap by the exercise of due diligence. The rule is not new, although formulated as law for the first time in the new Civil Code. It was expressed in Chapman vs. Underwood (1914), 27 Phil. 374, where this Court held:

... The same rule applies where the owner is present, unless the negligent acts of the driver are continued for such a length of time as to give the owner a reasonable opportunity to observe them and to direct his driver to desist therefrom. An owner who sits in his automobile, or other vehicle, and permits his driver to continue in a violation of the law by the performance of negligent acts, after he has had a reasonable opportunity to observe them and to direct that the driver cease therefrom, becomes himself responsible for such acts.

The owner of an automobile who permits his chauffeur to drive up the Escolta, for example, at a speed of 60 miles an hour, without any effort to stop him, although he has had a reasonable opportunity to do so, becomes himself responsible, both criminally and civilly, for the results produced by the acts of the chauffeur. On the other hand, if the driver, by a sudden act of negligence, and without the owner having a reasonable opportunity to prevent the act or its continuance, injures a person or violates the criminal law, the owner of the automobile, although present therein at the time the act was committed, is not responsible, either civilly or criminally, therefor. The act complained of must be continued in the presence of the owner for such a length of time that the owner, by his acquiescence, makes his driver act his own.

The basis of the master's liability in civil law is not respondent superior but rather the relationship of paterfamilias. The theory is that ultimately the negligence of the servant, if known to the master and susceptible of timely correction by him, reflects his own negligence if he fails to correct it in order to prevent injury or damage.

In the present case the defendants' evidence is that Rafael Bernardo had been Yu Khe Thai's driver since 1937, and before that had been employed by Yutivo Sons Hardware Co. in the same capacity for over ten years. During that time he had no record of violation of traffic laws and regulations. No negligence for having employed him at all may be imputed to his master.

Negligence on the part of the latter, if any, must be sought in the immediate setting and circumstances of the accident, that is, in his failure to detain the driver from pursuing a course which not only gave him clear notice of the danger but also sufficient time to act upon it. We do not see that such negligence may be imputed. The car, as has been stated, was not running at an unreasonable speed. The road was wide and open, and devoid of traffic that early morning. There was no reason for the car owner to be in any special state of alert. He had reason to rely on the skill and experience of his driver.

He became aware of the presence of the carretela when his car was only twelve meters behind it, but then his failure to see it earlier did not constitute negligence, for he was not himself at the wheel. And even when he did see it at that distance, he could not have anticipated his driver's sudden decision to pass the carretela on its left side in spite of the fact that another car was approaching from the opposite direction. The time element was such that there was no reasonable opportunity for Yu Khe Thai to assess the risks involved and warn the driver accordingly. The thought that entered his mind, he said, was that if he sounded a sudden warning it might only make the other man nervous and make the situation worse. It was a thought that, wise or not, connotes no absence of that due diligence required by law to prevent the misfortune.

The test of imputed negligence under Article 2184 of the Civil Code is, to a great degree, necessarily subjective. Car owners are not held to a uniform and inflexible standard of diligence as are professional drivers. In many cases they refrain from driving their own cars and instead hire other persons to drive for them precisely because they are not trained or endowed with sufficient discernment to know the rules of traffic or to appreciate the relative dangers posed by the different situations that are continually encountered on the road. What would be a negligent omission under aforesaid Article on the part of a car owner who is in the prime of age and knows how to handle a motor vehicle is not necessarily so on the part, say, of an old and infirm person who is not similarly equipped.

The law does not require that a person must possess a certain measure of skill or proficiency either in the mechanics of driving or in the observance of traffic rules before he may own a motor vehicle. The test of his intelligence, within the meaning of Article 2184, is his omission to do that which the evidence of his own senses tells him he should do in order to avoid the accident. And as far as perception is concerned, absent a minimum level imposed by law, a maneuver that appears to be fraught with danger to one passenger may appear to be entirely safe and commonplace to another. Were the law to require a uniform standard of perceptiveness, employment of professional drivers by car owners who, by their very inadequacies, have real need of drivers' services, would be effectively proscribed.We hold that the imputation of liability to Yu Khe Thai, solidarily with Rafael Bernardo, is an error. The next question refers to the sums adjudged by the trial court as damages. The award of P48,000 by way of moral damages is itemized as follows:1. Marcial CaedoP 20,000.00

2. Juana S. Caedo15,000.00

3. Ephraim Caedo3,000.00

4. Eileen Caedo4,000.00

5. Rose Elaine Caedo3,000.00

6. Merilyn Caedo3,000.00

Plaintiffs appealed from the award, claiming that the Court should have granted them also actual or compensatory damages, aggregating P225,000, for the injuries they sustained. Defendants, on the other hand maintain that the amounts awarded as moral damages are excessive and should be reduced. We find no justification for either side. The amount of actual damages suffered by the individual plaintiffs by reason of their injuries, other than expenses for medical treatment, has not been shown by the evidence. Actual damages, to be compensable, must be proven. Pain and suffering are not capable of pecuniary estimation, and constitute a proper ground for granting moral, not actual, damages, as provided in Article 2217 of the Civil Code.

The injuries sustained by plaintiffs are the following:MARCIAL T. CAEDO:

A. Contusion, with hematoma, scalp, frontal left; abrasions, chest wall, anterior;B. Multiple fractures, ribs, right, lst to 5th inclusive. Third rib has a double fracture; Subparieto-plaural hematoma; Basal disc atelectasis, lung, right lower lobe, secondary;C. Pseudotosis, left, secondary to probable basal fracture, skull.JUANA SANGALANG CAEDO:A. Abrasions, multiple:(1)frontal region, left; (2) apex of nose; (3) upper eyelid, left; (4) knees.B. Wound, lacerated, irregular, deep, frontal;C. Fracture, simple, 2nd rib posterior, left with displacement.D. Fracture, simple, base, proximal phalanx right, big toe.E. Fracture, simple, base, metatarsals III and V right.F. Concussion, cerebral.EPHRAIM CAEDO:A. Abrasions, multiple:(1) left temporal area; (2) left frontal; (3) left supraorbitalEILEEN CAEDO:A. Lacerated wound (V-shaped), base, 5th finger, right, lateral aspect.B. Abrasions, multiple:(1) dorsum, proximal phalanx middle finger; (2) Knee, anterior, bilateral; (3) shin, lower 1/3.

ROSE ELAINE CAEDO:

A. Abrasions, multiple: (1) upper and lower lids; (2) left temporal; (3) nasolabial region; (4) leg, lower third, anterior.

MARILYN CAEDO:

A. Abrasions, multiple: (1)shin, lower 1/3 right; (2) arm, lower thirdC. Contusion with hematoma, shin, lower 1/3, anterior aspect, right. (See Exhibits D, D-1, D-2, D-3, D-4, and D- 5)

It is our opinion that, considering the nature and extent of the above-mentioned injuries, the amounts of moral damages granted by the trial court are not excessive.WHEREFORE, the judgment appealed from is modified in the sense of declaring defendant-appellant Yu Khe Thai free from liability, and is otherwise affirmed with respect to defendant Rafael Bernardo, with costs against the latter.

Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Sanchez, Castro and Capistrano, JJ., concur.Fernando, J., took no part.

G.R. No. 118889 March 23, 1998FGU INSURANCE CORPORATION, petitioner, vs.COURT OF APPEALS, FILCAR TRANSPORT, INC., and FORTUNE INSURANCE CORPORATION, respondents.

BELLOSILLO, J.:For damages suffered by a third party, may an action based on quasi-delict prosper against a rent-a-car company and, consequently, its insurer for fault or negligence of the car lessee in driving the rented vehicle?This was a two-car collision at dawn. At around 3 o'clock of 21 April 1987, two (2) vehicles, both Mitsubishi Colt Lancers, cruising northward along Epifanio de los Santos Avenue, Mandaluyong City, figured in a traffic accident. The car bearing Plate No. PDG 435 owned by Lydia F. Soriano was being driven at the outer lane of the highway by Benjamin Jacildone, while the other car, with Plate No. PCT 792, owned by respondent FILCAR Transport, Inc. (FILCAR), and driven by Peter Dahl-Jensen as lessee, was at the center lane, left of the other vehicle. Upon approaching the corner of Pioneer Street, the car owned by FILCAR swerved to the right hitting the left side of the car of Soriano. At that time Dahl-Jensen, a Danish tourist, did not possess a Philippine driver's license. 1

As a consequence, petitioner FGU Insurance Corporation, in view of its insurance contract with Soriano, paid the latter P25,382.20. By way of subrogation,2 it sued Dahl-Jensen and respondent FILCAR as well as respondent Fortune Insurance Corporation (FORTUNE) as insurer of FILCAR for quasi-delict before the Regional Trial Court of Makati City.

Unfortunately, summons was not served on Dahl-Jensen since he was no longer staying at his given address; in fact, upon motion of petitioner, he was dropped from the complaint.

On 30 July 1991 the trial court dismissed the case for failure of petitioner to substantiate its claim of subrogation.3

On 31 January 1995 respondent Court of Appeals affirmed the ruling of the trial court although based on another ground, i.e., only the fault or negligence of Dahl-Jensen was sufficiently proved but not that of respondent FILCAR.4 In other words, petitioner failed to establish its cause of action for sum of money based on quasi-delict.In this appeal, petitioner insists that respondents are liable on the strength of the ruling in MYC-Agro-Industrial Corporation v. Vda. de Caldo5 that the registered owner of a vehicle is liable for damages suffered by third persons although the vehicle is leased to another.

We find no reversible error committed by respondent court in upholding the dismissal of petitioner's complaint.

The pertinent provision is Art. 2176 of the Civil Code which states: "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 . . . . "

To sustain a claim based thereon, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff.6

We agree with respondent court that petitioner failed to prove the existence of the second requisite, i.e., fault or negligence of defendant FILCAR, because only the fault or negligence of Dahl-Jensen was sufficiently established, not that of FILCAR. It should be noted that the damage caused on the vehicle of Soriano was brought about by the circumstance that Dahl-Jensen swerved to the right while the vehicle that he was driving was at the center lane. It is plain that the negligence was solely attributable to Dahl-Jensen thus making the damage suffered by the other vehicle his personal liability. Respondent FILCAR did not have any participation therein.

Article 2180 of the same Code which deals also with quasi-delict provides:

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

The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor children who live in their company.

Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live in their company.

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.

The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable.Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and students or apprentices, so long as they remain in their custody.

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.

The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of negligence on the part of the persons made responsible thereunder, derived from their failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage.7 Yet, as correctly observed by respondent court, Art. 2180 is hardly applicable because none of the circumstances mentioned therein obtains in the case under consideration. Respondent FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them as employer and employee. Respondent FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being an employer of the latter.

We now correlate par. 5 of Art. 2180 with Art. 2184 of the same Code which provides: "In motor vehicle mishap, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have by the use of due diligence, prevented the misfortune . . . . If the owner was not in the motor vehicle, the provisions of article 2180 are applicable." Obviously, this provision of Art. 2184 is neither applicable because of the absence of master-driver relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has no cause of action against respondent FILCAR on the basis of quasi-delict; logically, its claim against respondent FORTUNE can neither prosper.

Petitioner's insistence on MYC-Agro-Industrial Corporation is rooted in a misapprehension of our ruling therein. In that case, the negligent and reckless operation of the truck owned by petitioner corporation caused injuries to several persons and damage to property. Intending to exculpate itself from liability, the corporation raised the defense that at the time of the collision it had no more control over the vehicle as it was leased to another; and, that the driver was not its employee but of the lessee. The trial court was not persuaded as it found that the true nature of the alleged lease contract was nothing more than a disguise effected by the corporation to relieve itself of the burdens and responsibilities of an employer. We upheld this finding and affirmed the declaration of joint and several liability of the corporation with its driver.

WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals dated 31 January 1995 sustaining the dismissal of petitioner's complaint by the trial court is AFFIRMED. Costs against petitioner.SO ORDERED.Davide, Jr., Vitug, Panganiban and Quisumbing, JJ., concur.

Footnotes1 Traffic Accident Investigation Report; Records, p. 130.2 Subrogation is the substitution of one person in the place of another with reference to a lawful claim, demand or right, so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and its rights, remedies, or securities (Gerken v. Davidson Grocery Co., 57 Idaho 670, 69 P. 2d 122, 126). Subrogation denotes the exchange of a third person who has paid a debt in the place of the creditor to whom he has paid it, so that he may exercise against the debtor all the rights which the creditor, if unpaid, might have

done. . . . Insurance companies, guarantors and bonding companies generally have the right to step into the shoes of the party whom they compensate and sue any party whom the compensated party could have sued (Black's Law Dictionary, 6th Ed., St. Paul, Minn., West Publishing Co., p. 1427).

3 Decision penned by Judge Salvador S. Abad Santos, RTC-Br. 65, Makati City, Records, pp. 204-205.

G.R. No. 162987 May 21, 2009SOFIA M. GUILLANG, represented by SUSAN GUILLANG-CABATBAT, REYNALDO, GERARDO, BIENVENIDO, DAWNA, and NELLIE, all surnamed GUILLANG, GENARO GUILLANG, JOSE DIGNADICE, and ALVIN LLANILLO, Petitioners, vs.RODOLFO BEDANIA and RODOLFO DE SILVA, Respondents.D E C I S I O NCARPIO, J.:

The Case

This is a petition for review1 of the 3 June 2003 Decision2 and the 23 March 2004 Resolution3 of the Court of Appeals in CA-G.R. CV No. 69289. The 3 June 2003 Decision set aside the 5 December 2000 Decision4 of the Regional Trial Court, Branch 30, Manila (trial court). The 23 March 2004 Resolution denied the motion for reconsideration.

The Facts

On 25 October 1994, at about 5:45 in the afternoon, petitioner Genaro M. Guillang (Genaro) was driving his brand new Toyota Corolla GLI sedan with conduction sticker no. 54-DFT (car) along Emilio Aguinaldo Highway (highway) in Cavite. Genaro, Antero Guillang (Antero), Felipe Jurilla, Jose Dignadice (Dignadice), and Alvin Llanillo (Llanillo) had all just left from Golden City, Dasmarias, Cavite, and were on their way to Manila.

At the other side of the highway, respondent Rodolfo A. Bedania (Bedania) was driving a ten-wheeler Isuzu cargo truck with plate no. CAC-923 (truck) towards Tagaytay City. The truck was owned by respondent Rodolfo de Silva (de Silva).

Along the highway and the road leading to the Orchard Golf Course, Bedania negotiated a U-turn. When the truck entered the opposite lane of the highway, Genaros car hit the right portion of the truck. The truck dragged Genaros car some five meters to the right of the road.

As a consequence, all the passengers of the car were rushed to the De La Salle University Medical Center in Dasmarias, Cavite for treatment. Because of severe injuries, Antero was later transferred to the Philippine General Hospital. However, on 3 November 1994, Antero died due to the injuries he sustained from the collision. The car was a total wreck while the truck sustained minor damage.

On 24 April 1995, petitioners Genaro, Llanillo, Dignadice, and the heirs of Antero5 instituted a complaint for damages based on quasi-delict against respondents Bedania and de Silva.

On 5 December 2000, the trial court rendered a decision in favor of petitioners. The trial court found Bedania grossly negligent for recklessly maneuvering the truck by making a sudden U-turn in the highway without due regard to traffic rules and the safety of other motorists. The trial court also declared de Silva grossly negligent in the selection and supervision of his driver, Bedania. The dispositive portion of the decision provides:

WHEREFORE, judgment is hereby rendered ordering defendants Rodolfo A. Bedania and Rodolfo de Silva, jointly and severally, to pay plaintiffs, as follows:

1. The sum of P508,566.03 representing the damage/repair costs of the Toyota to plaintiff Genaro M. Guillang.2. The sum of P50,000.00 for the death of Antero Guillang plus P185,000.00 for his burial expenses, to the heirs of Antero Guillang.3. For hospital and medical expenses as reflected in Exhibits E, E-1 to E-30 to plaintiffs Genaro M. Guillang, Jose Dignadice and Alvin Llanillo.4. The sum of P50,000.00 as moral damages for the heirs of the deceased Antero Guillang.5. The sum of P50,000.00 as moral damages each to plaintiffs Jose Dignadice, Alvin Llanillo and Genaro Guillang.6. The sum of P50,000.00 as exemplary damages.7. The sum of P100,000.00 as and for attorneys fess.8. The costs of the suit.SO ORDERED.6

Respondents appealed to the Court of Appeals.On 3 June 2003, the Court of Appeals rendered its decision in favor of respondents. The dispositive portion of the decision provides:

IN VIEW OF ALL THE FOREGOING, the appealed decision is REVERSED and SET ASIDE. The complaint of the herein appellees in Civil Case No. 95-73666 is DISMISSED, for lack of merit. The appellants counterclaims in the instant case are likewise DISMISSED. No pronouncement as to cost.SO ORDERED.7

Petitioners filed a motion for reconsideration. On 23 March 2004, the Court of Appeals denied the motion.Hence, this petition.

The Ruling of the Regional Trial CourtAccording to the trial court, there is a presumption that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation.8 In this case, the trial court found that the Traffic Accident Investigation Report (report),9 corroborated by the testimonies of the witnesses, showed that the truck committed a traffic violation by executing a U-turn without signal lights. The trial court also declared that Bedania violated Sections 45(b),10 48,11 and 5412 of Republic Act No. 413613 when he executed the sudden U-turn. The trial court added that Bedania violated another traffic rule when he abandoned the victims after the collision.14 The trial court concluded that Bedania was grossly negligent in his driving and held him liable for damages.

Moreover, the trial court found that Bedania did not make the U-turn at an intersection. According to the trial court, vehicles trying to maneuver to change directions must seek an intersection where it is safer to maneuver and not recklessly make a U-turn in a highway. The trial court said Bedania should have observed extreme caution in making a U-turn because it was unexpected that a long cargo truck would execute a U-turn along the highway.

The trial court also said that Bedanias gross negligence raised the legal presumption that de Silva, as Bedanias employer, was negligent in the selection and supervision of his employees. The trial court said that, under Articles 217615 and 218016 of the Civil Code, de Silvas liability was based on culpa aquiliana which holds the employer primarily liable for tortious acts of his employees, subject to the defense that he exercised all the diligence of a good father of a family in the selection and supervision of his employees. The trial court ruled that de Silva failed to prove this defense and, consequently, held him liable for damages.

The Ruling of the Court of AppealsThe Court of Appeals reversed the trial courts decision and said that the trial court overlooked substantial facts and circumstances which, if properly considered, would justify a different conclusion and alter the results of the case.The Court of Appeals dismissed the testimonies of the witnesses and declared that they were "contrary to human observation, knowledge and experience." The Court of Appeals also said that the following were the physical evidences in the case:

1. It was not yet dark when the incident transpired;2. The four-lane highway the appellees were cruising on was wide, straight, dry, relatively plain and with no obstructions to the drivers vision;3. The point of impact of the collision is on the lane where the car was cruising and the car hit the gas tank of the truck located at its right middle portion, which indicates that the truck had already properly positioned itself and had already executed the U-turn before the impact occurred;4. Genaro Guillang was not able to stop the car in time and the cars front portion was totally wrecked. This negates appellees contention that they were traveling at a moderate speed; and5. The sheer size of the truck makes it improbable for the said vehicle to negotiate a U-turn at a sudden and fast speed as appellees vigorously suggest without toppling over on its side.17 (Citations omitted)

The Court of Appeals concluded that the collision was caused by Genaros negligence. The Court of Appeals declared that the truck arrived at the intersection way ahead of the car and had already executed the U-turn when the car, traveling at a fast speed, hit the trucks side. The Court of Appeals added that considering the time and the favorable visibility of the road and the road conditions, Genaro, if he was alert, had ample time to react to the changing conditions of the road. The Court of Appeals found no reason for Genaro not to be prudent because he was approaching an intersection and there was a great possibility that vehicles would be traversing the intersection either going to or from Orchard Golf Course. The Court of Appeals said Genaro should have slowed down upon reaching the intersection. The Court of Appeals concluded that Genaros failure to observe the necessary precautions was the proximate cause of Anteros death and the injuries of the petitioners.

The Court of Appeals also relied on the testimony of Police Traffic Investigator Efren Videna (Videna) that the car was running at a fast speed and overtook another vehicle just before the collision occurred.18 The Court of Appeals concluded that Genaro did not see the truck as the other vehicle temporarily blocked his view of the intersection. The Court of Appeals also gave weight to Videnas testimony that it was normal for a ten-wheeler truck to make a U-turn on that part of the highway because the entrance to Orchard Golf Course was spacious.19

The IssuesPetitioners raise the following issues:1. Did the Court of Appeals decide a question of substance in this case in a way probably not in accord with law or with the applicable decisions of the Honorable Supreme Court?2. Did the Court of Appeals depart from the accepted and usual course of judicial proceedings particularly when it revised, and recast the findings of facts of the trial court pertaining to credibility of witnesses of which the trial court was at the vantage point to evaluate?3. Did the Court of Appeals act with grave abuse of discretion amounting to lack of jurisdiction when it rendered the palpably questionable Court of Appeals Decision that tampered with the findings of fact of the trial court for no justifiable reason?4. Is the Court of Appeals judgment and resolution reversing the decision of the trial court supported by the evidence and the law and jurisprudence applicable?20The issue in this case is who is liable for the damages suffered by petitioners. The trial court held Bedania and de Silva, as Bedanias employer, liable because the proximate cause of the collision was the sudden U-turn executed by Bedania without any signal lights. On the other hand, the Court of Appeals reversed the trial courts decision and held Genaro liable because the proximate cause of the collision was Genaros failure to stop the car despite seeing that Bedania was making a U-turn.

The Ruling of the CourtThe principle is well-established that this Court is not a trier of facts. Therefore, in an appeal by certiorari under Rule 45 of the Rules of Court, only questions of law may be raised. The resolution of factual issues is the function of the lower courts whose findings on these matters are received with respect and are, as a rule, binding on this Court.21

However, this rule is subject to certain exceptions. One of these is when the findings of the appellate court are contrary to those of the trial court.22 Findings of fact of the trial court and the Court of Appeals may also be set aside when such findings are not supported by the evidence or where the lower courts conclusions are based on a misapprehension of facts.23 Such is the situation in this case and we shall re-examine the facts and evidence presented before the lower courts.

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 relations between the parties, is called a quasi-delict. To sustain a claim based on quasi-delict, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of defendant; and (c) connection of cause and effect between the fault or negligence of defendant and the damage incurred by the plaintiff.24

There is no dispute that petitioners suffered damages because of the collision. However, the issues on negligence and proximate cause are disputed.

On the Presumption of Negligence and Proximate Cause

Negligence is defined as the failure to observe for the protection of the interest of another person that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person suffers injury. In Picart v. Smith,25 we held that the test of negligence is whether the defendant in doing the alleged negligent act used that reasonable care and caution which an ordinary person would have used in the same situation.

The conclusion of the Court of Appeals that Genaro was negligent is not supported by the evidence on record. In ruling that Genaro was negligent, the Court of Appeals gave weight and credence to Videnas testimony. However, we find that Videnas testimony was inconsistent with the police records and report that he made on the day of the collision. First, Videna testified that the car was running fast and overtook another vehicle that already gave way to the truck.26 But this was not indicated in either the report or the police records. Moreover, if the car was speeding, there should have been skid marks on the road when Genaro stepped on the brakes to avoid the collision. But the sketch of the accident showed no skid marks made by the car.27

Second, Videna testified that the petitioners came from a drinking spree because he was able to smell liquor.28 But in the report,29 Videna indicated that the condition of Genaro was "normal." Videna did not indicate in the report that Genaro "had been drinking liquor" or that Genaro "was obviously drunk." Third, Videna testified that when he arrived at the scene, Bedania was inside his truck.30 This contradicts the police records where Videna stated that after the collision Bedania escaped and abandoned the victims.31 The police records also showed that Bedania was arrested by the police at his barracks in Anabu, Imus, Cavite and was turned over to the police only on 26 October 1994.32

Under Article 2185 of the Civil Code, unless there is proof to the contrary, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation.

In this case, the report33 showed that the truck, while making the U-turn, failed to signal, a violation of traffic rules. The police records also stated that, after the collision, Bedania escaped and abandoned the petitioners and his truck.34 This is another violation of a traffic regulation.35 Therefore, the presumption arises that Bedania was negligent at the time of the mishap.

The evidence presented in this case also does not support the conclusion of the Court of Appeals that the truck had already executed the U-turn before the impact occurred. If the truck had fully made the U-turn, it should have been hit on its rear.36 If the truck had already negotiated even half of the turn and is almost on the other side of the highway, then the truck should have been hit in the middle portion of the trailer or cargo compartment. But the evidence clearly shows, and the Court of Appeals even declared, that the car hit the trucks gas tank, located at the trucks right middle portion, which disproves the conclusion of the Court of Appeals that the truck had already executed the U-turn when it was hit by the car.

Moreover, the Court of Appeals said that the point of impact was on the lane where the car was cruising. Therefore, the car had every right to be on that road and the car had the right of way over the truck that was making a U-turn. Clearly, the truck encroached upon the cars lane when it suddenly made the U-turn.

The Court of Appeals also concluded that Bedania made the U-turn at an intersection. Again, this is not supported by the evidence on record. The police sketch37 does not indicate an intersection and only shows that there was a road leading to the Orchard Golf Course near the place of the collision. Furthermore, U-turns are generally not advisable particularly on major streets.38 Contrary to Videnas testimony, it is not normal for a truck to make a U-turn on a highway. We agree with the trial court that if Bedania wanted to change direction, he should seek an intersection where it is safer to maneuver the truck.

Bedania should have also turned on his signal lights and made sure that the highway was clear of vehicles from the opposite direction before executing the U-turn.

The finding of the Court of Appeals that it was not yet dark when the collision occurred is also not supported by the evidence on record. The report stated that the daylight condition at the time of the collision was "darkness."39

Contrary to the conclusion of the Court of Appeals, the sheer size of the truck does not make it improbable for the truck to execute a sudden U-turn. The trial courts decision did not state that the truck was traveling at a fast speed when it made the U-turn. The trial court said the truck made a "sudden" U-turn, meaning the U-turn was made unexpectedly and with no warning, as shown by the fact that the trucks signal lights were not turned on.

Clearly, Bedanias negligence was the proximate cause of the collision which claimed the life of Antero and injured the petitioners. Proximate cause is that which, in the natural and continuous sequence, unbroken by any efficient, intervening cause, produces the injury, and without which the result would not have occurred.40 The cause of the collision is traceable to the negligent act of Bedania for if the U-turn was executed with the proper precaution, the mishap in all probability would not have happened.

The sudden U-turn of the truck without signal lights posed a serious risk to oncoming motorists. Bedania failed to prevent or minimize that risk. The trucks sudden U-turn triggered a series of events that led to the collision and, ultimately, to the death of Antero and the injuries of petitioners.

We agree with the trial court that de Silva, as Bedanias employer, is also liable for the damages suffered by petitioners. De Silva failed to prove that he exercised all the diligence of a good father of a family in the selection and supervision of his employees.

On the Award of Damages and Attorneys FeesAccording to prevailing jurisprudence, civil indemnity for death caused by a quasi-delict is pegged at P50,000.41 Moral damages in the amount of P50,000 is also awarded to the heirs of the deceased taking into consideration the pain and anguish they suffered.42 Bienvenido Guillang (Bienvenido), Anteros son, testified that Sofia, Anteros wife and his mother, became depressed after Anteros death and that Sofia died a year after.43 Bienvenido also testified on the pain and anguish their family suffered as a consequence of their fathers death.44 We sustain the trial courts award of P50,000 as indemnity for death and P50,000 as moral damages to the heirs of Antero.

As to funeral and burial expenses, the court can only award such amount as are supported by proper receipts.45 In this case, petitioners proved funeral and burial expenses of P55,000 as evidenced by Receipt No. 1082,46 P65,000 as evidenced by Receipt No. 114647 and P15,000 as evidenced by Receipt No. 1064,48 all issued by the Manila South Cemetery Association, Inc., aggregating P135,000. We reduce the trial courts award of funeral and burial expenses from P185,000 to P135,000.

As to hospitalization expenses, only substantiated and proven expenses, or those that appear to have been genuinely incurred in connection with the hospitalization of the victims will be recognized in court.49 In this case, the trial court did not specify the amount of hospitalization expenses to be awarded to the petitioners. Since petitioners presented receipts for hospitalization expenses during the trial, we will determine the proper amounts to be awarded to each of them. We award hospitalization expenses of P27,000.98 to the heirs of Antero,50 P10,881.60 to Llanillo,51 P5,436.77 to Dignadice,52 and P300 to Genaro53 because these are the amounts duly substantiated by receipts.

We affirm the trial courts award of P508,566.03 for the repair of the car. The Court notes that there is no dispute that Genaro was driving a brand new Toyota Corolla GLI sedan and that, after the collision, the car was a total wreck. In this case, the repair order presented by Genaro is sufficient proof of the damages sustained by the car.54

Moral damages may be recovered in quasi-delicts causing physical injuries.55 However, in accordance with prevailing jurisprudence, we reduce the award of moral damages from P50,000 to P30,000 each to Llanillo, Dignadice, and Genaro since they only suffered physical injuries brought about by the collision.56

In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.57 While the amount of exemplary damages need not be proved, the plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded.58 In this case, Bedania was grossly negligent in suddenly making a U-turn in the highway without signal lights. To serve as an example for the public good, we affirm the trial courts award of exemplary damages in the amount of P50,000.

Finally, we affirm the trial courts award of attorneys fees in the amount of P100,000. Under Article 2208 of the Civil Code, attorneys fees may be recovered when, as in this case, exemplary damages are awarded.

WHEREFORE, we REVERSE the 3 June 2003 Decision and 23 March 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 69289. We REINSTATE with MODIFICATIONS the 5 December 2000 Decision of the Regional Trial Court, Branch 30, Manila. We ORDER Rodolfo Bedania and Rodolfo de Silva, jointly and severally, to pay the following amounts:

1. Funeral and Burial Expenses of P135,000 to the heirs of Antero Guillang;2. Hospitalization Expenses of P27,000.98 to the heirs of Antero Guillang, P10,881.60 to Alvin Llanillo, P5,436.77 to Jose Dignadice, and P300 to Genaro Guillang; and3. Moral damages of P30,000 each to Alvin Llanillo, Jose Dignadice, and Genaro Guillang.SO ORDERED.ANTONIO T. CARPIO

Associate Justice4 Decision penned by Justice Jaime M. Lantin with the concurrence of Justices Alicia Austria-Martinez and Conrado M. Vasquez Jr.; Rollo, p. 18.5 G.R. No. 57298, 7 September 1984, 132 SCRA 10.6 Andamo v. Intermediate Appellate Court, G.R. No. 74761, 6 November 1990, 191 SCRA 195.7 Arturo M. Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, 1992, Ed., Vol. V, p. 611.

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-23052 January 29, 1968CITY OF MANILA,petitioner,vs.

CONCEPCION,C.J.:Appeal bycertiorarifrom a decision of the Court of Appeals.On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P. Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting for about five minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons came to his assistance and pulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital, where his injuries were treated, after which he was taken home. In addition to the lacerated wound in his left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip apart from an abrasion on the right infra-patella region. These injuries and the allergic eruption caused by anti-tetanus injections administered to him in the hospital, required further medical treatment by a private practitioner who charged therefor P1,400.00.As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila, a complaint which was, subsequently, amended for damages against the City of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police. As stated in the decision of the trial court, and quoted with approval by the Court of Appeals,At the time of the incident, plaintiff was a practicing public accountant, a businessman and a professor at the University of the East. He held responsible positions in various business firms like the Philippine Merchandising Co., the A.U. Valencia and Co., the Silver Swan Manufacturing Company and the Sincere Packing Corporation. He was also associated with several civic organizations such as the Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manila and the Knights of Rizal. As a result of the incident, plaintiff was prevented from engaging in his customary occupation for twenty days. Plaintiff has lost a daily income of about P50.00 during his incapacity to work. Because of the incident, he was subjected to humiliation and ridicule by his business associates and friends. During the period of his treatment, plaintiff was under constant fear and anxiety for the welfare of his minor children since he was their only support. Due to the filing of this case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00.On the other hand, the defense presented evidence, oral and documentary, to prove that the Storm Drain Section, Office of the City Engineer of Manila, received a report of the uncovered condition of a catchbasin at the corner of P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but the same was covered on the same day (Exhibit 4); that again the iron cover of the same catch basin was reported missing on January 30, 1958, but the said cover was replaced the next day (Exhibit 5); that the Office of the City Engineer never received any report to the effect that the catchbasin in question was not covered between January 25 and 29, 1968; that it has always been a policy of the said office, which is charged with the duty of installation, repair and care of storm drains in the City of Manila, that whenever a report is received from whatever source of the loss of a catchbasin cover, the matter is immediately attended to, either by immediately replacing the missing cover or covering the catchbasin with steel matting that because of the lucrative scrap iron business then prevailing, stealing of iron catchbasin covers was rampant; that the Office of the City Engineer has filed complaints in court resulting from theft of said iron covers; that in order to prevent such thefts, the city government has changed the position and layout of catchbasins in the City by constructing them under the sidewalks with concrete cement covers and openings on the side of the gutter; and that these changes had been undertaken by the city from time to time whenever funds were available.After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned decision sustaining the theory of the defendants and dismissing the amended complaint, without costs.On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the City of Manila is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00.1Hence, this appeal by the City of Manila.The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act No. 409 (Charter of the City of Manila) reading:The city shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions.or by Article 2189 of the Civil Code of the Philippines which provides:Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of defective conditions of road, streets, bridges, public buildings, and other public works under their control or supervision.Manila maintains that the former provision should prevail over the latter, because Republic Act 409, is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines.The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as regards the subject-matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila for: "damages or injury to persons or property arising from the failure of" city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by any person by reason" specifically "of thedefective condition of roads, streets, bridges, public buildings, and other-public works under their control or supervision." In other words, said section 4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets," in particular. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving him took place in a national highway; and 2) because the City of Manila has not been negligent in connection therewith.As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the City. Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were due to the defective condition of a street which is "under the supervision and control" of the City. In its answer to the amended complaint, the City, in turn, alleged that"the streets aforementioned were and have been constantly kept in good condition and regularly inspected and the storm drains and manholes thereof covered by the defendant City and the officers concerned" who "have been ever vigilant and zealous in the performance of their respective functions and duties as imposed upon them by law."Thus, the City had, in effect, admitted that P. Burgos Avenue was and isunderitscontrol and supervision.Moreover, the assertion to the effect that said Avenue is a national highway was made, for thefirsttime, in its motion for reconsideration of the decision of the Court of Appeals. Such assertion raised, therefore, a question of fact, which had not been put in issue in the trial court, and cannot be set up, for the first time, on appeal, much less after the rendition of the decision of the appellate court, in a motion for the reconsideration thereof.At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the defective roads or streetsbelongto the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality have either "control or supervision" over said street or road. Even if P. Burgos Avenue were, therefore, a national highway, this circumstance would not necessarily detract from its "control or supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x) thereof provides:Sec. 18.Legislative powers. The Municipal Board shall have the following legislative powers:x x x x x x x x x(x) Subject to the provisions of existing law to provide for thelaying out, constructionandimprovement, and toregulate the useof streets, avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places;to provide for lighting, cleaning, and sprinkling of streets and public places; . . .to provide for the inspection of,fix the license fees for and regulate the openings in the same for the laying of gas, water, sewer and other pipes, the building and repair of tunnels, sewers, anddrains, and all structures in and under the same and the erecting of poles and the stringing of wires therein; toprovide for and regulate cross-works, curbs, and gutters therein,. . .toregulate traffic and sales upon the streetsand other public places; to provide for theabatement of nuisancesin the same and punish the authors or owners thereof; to provide for the construction and maintenance, and regulate the use, of bridges, viaducts and culverts; to prohibit and regulate ball playing, kite-flying, hoop rolling, and other amusements which mayannoy persons using the streets and public places, or frighten horses or other animals; toregulate the speedof horses and other animals, motor and other vehicles, cars, and locomotives within the limits of the city; toregulate the lightsused on all vehicles, cars, and locomotives; . . . to provide for and change the location, grade, and crossing of railroads, and compel any such railroad to raise or lower its tracks to conform to such provisions or changes; and to require railroad companies to fence their property, or any part thereof, toprovide suitable protection against injury to persons or property, and toconstruct and repair ditches, drains, sewers, and culvertsalong and under their tracks, so that the natural drainage of the streets and adjacent property shall not be obstructed.This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the highway funds and the giving of aid to provinces, chartered cities and municipalities in the construction of roads and streets within their respective boundaries, and Executive Order No. 113 merely implements the provisions of said Republic Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it provides that "the construction,maintenanceand improvement of national primary, national secondary and national aid provincial and city roads shall be accomplished by the Highway District Engineers and HighwayCityEngineers under the supervision of the Commissioner of Public Highways and shall be financed from such appropriations as may be authorized by the Republic of the Philippines in annual or special appropriation Acts."Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road, which were decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court thereon are not subject to our review.WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of Manila. It is so ordered.1wph1.t

Dingcong vs Kanaan

Jose Dingcong was the owner of a hotel in Iloilo. In 1933, a certain Francisco Echevarria rented a room in the upper floor of the hotel. The room he rented was immediately above the store occupied by the Kanaan brothers who are also tenants of the hotel. One night, Echevarria carelessly left his faucet open thereby flooding his room and it caused water to drip from his room to the store below. Because of this, the articles being sold by Kanaan were damaged. Apparently also, the water pipes supposed to drain the water from Echevarrias room was defective hence the flooding and the dripping.

ISSUE: Whether or not Dingcong is liable to pay for the damages caused by Echevarria.

HELD: Yes. Dingcong as proprietor is liable for the negligent act of the guest of his hotel (Echevarria). It was not shown that Dingcong exercised the diligence of a good father in preventing the damage caused. The pipe should have been repaired prior and Echevarria should have been provided with a container to catch the drip. Therefore, Dingcong is liable to pay for damages by reason of his negligence.

G.R. No. 110295 October 18, 1993COCA-COLA BOTTLERS PHILIPPINES, INC., vs.THE HONORABLE COURT OF APPEALS (Fifth Division) and MS. LYDIA GERONIMO, respondents.

Angara, Abello, Concepcion, Regala & Cruz Law Offices for petitioner.Alejandro M. Villamil for private respondent.DAVIDE, JR., J.:

This case concerns the proprietress of a school canteen which had to close down as a consequence of the big drop in its sales of soft drinks triggered by the discovery of foreign substances in certain beverages sold by it. The interesting issue posed is whether the subsequent action for damages by the proprietress against the soft drinks manufacturer should be treated as one for breach of implied warranty against hidden defects or merchantability, as claimed by the manufacturer, the petitioner herein which must therefore be filed within six months from the delivery of the thing sold pursuant to Article 1571 of the Civil Code, or one for quasi-delict, as held by the public respondent, which can be filed within four years pursuant to Article 1146 of the same Code.

On 7 May 1990, Lydia L. Geronimo, the herein private respondent, filed a complaint for damages against petitioner with the Regional Trial Court (RTC) of Dagupan City. 1

The case was docketed as Civil Case No. D-9629. She alleges in her complaint that she was the proprietress of Kindergarten Wonderland Canteen docketed as located in Dagupan City, an enterprise engaged in the sale of soft drinks (including Coke and Sprite) and other goods to the students of Kindergarten Wonderland and to the public; on or about 12 August 1989, some parents of the students complained to her that the Coke and Sprite soft drinks sold by her contained fiber-like matter and other foreign substances or particles; he then went over her stock of softdrinks and discovered the presence of some fiber-like substances in the contents of some unopened Coke bottles and a plastic matter in the contents of an unopened Sprite bottle; she brought the said bottles to the Regional Health Office of the Department of Health at San Fernando, La Union, for examination; subsequently, she received a letter from the Department of Health informing her that the samples she submitted "are adulterated;" as a consequence of the discovery of the foreign substances in the beverages, her sales of soft drinks severely plummeted from the usual 10 cases per day to as low as 2 to 3 cases per day resulting in losses of from P200.00 to P300.00 per day, and not long after that she had to lose shop on 12 December 1989; she became jobless and destitute; she demanded from the petitioner the payment of damages but was rebuffed by it. She prayed for judgment ordering the petitioner to pay her P5,000.00 as actual damages, P72,000.00 as compensatory damages, P500,000.00 as moral damages, P10,000.00 as exemplary damages, the amount equal to 30% of the damages awarded as attorney's fees, and the costs. 2

The petitioner moved to dismiss 3 the complaint on the grounds of failure to exhaust administrative remedies and prescription. Anent the latter ground, the petitioner argued that since the complaint is for breach of warranty under Article 1561 of the said Code. In her Comment 4 thereto, private respondent alleged that the complaint is one for damages which does not involve an administrative action and that her cause of action is based on an injury to plaintiff's right which can be brought within four years pursuant to Article 1146 of the Civil Code; hence, the complaint was seasonably filed. Subsequent related pleadings were thereafter filed by the parties. 5

In its Order of 23 January 1991, 6 the trial court granted the motion to dismiss. It ruled that the doctrine of exhaustion of administrative remedies does not apply as the existing administrative remedy is not adequate. It also stated that the complaint is based on a contract, and not on quasi-delict, as there exists pre-existing contractual relation between the parties; thus, on the basis of Article 1571, in relation to Article 1562, the complaint should have been filed within six months from the delivery of the thing sold.Her motion for the reconsideration of the order having been denied by the trial court in its Order of 17 April 1991, 7 the private respondent came to this Court via a petition for review on certiorari which we referred to the public respondent "for proper determination and disposition. 8 The public respondent docketed the case as CA-G.R. SP No. 25391.

In a decision promulgated on 28 January 1992, 9 the public respondent annulled the questioned orders of the RTC and directed it to conduct further proceedings in Civil Case No. D-9629. In holding for the private respondent, it ruled that:

Petitioner's complaint being one for quasi-delict, and not for breach of warranty as respondent contends, the applicable prescriptive period is four years.

It should be stressed that the allegations in the complaint plainly show that it is an action or damages arising from respondent's act of "recklessly and negligently manufacturing adulterated food items intended to be sold or public consumption" (p. 25, rollo). It is truism in legal procedure that what determines the nature of an action are the facts alleged in the complaint and those averred as a defense in the defendant's answer (I Moran 126; Calo v. Roldan, 76 Phil. 445; Alger Electric, Inc. v. CA, 135 SCRA 340).

Secondly, despite the literal wording of Article 2176 of the Civil code, the existence of contractual relations between the parties does not absolutely preclude an action by one against the other for quasi-delict arising from negligence in the performance of a contract.

In Singson v. Court of Appeals (23 SCRA 1117), the Supreme Court ruled:

It has been repeatedly held: that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor

. . . . Thus in Air France vs. Carrascoso, . . . (it was held that) although the relation between a passenger and a carrier is "contractual both in origin and in nature the act that breaks the contract may also be a tort.Significantly, in American jurisprudence, from which Our law on Sales was taken, the authorities are one in saying that he availability of an action or breach of warranty does not bar an action for torts in a sale of defective goods. 10

Its motion for the reconsideration of the decision having been denied by the public respondent in its Resolution of 14 May 1993, 11 the petitioner took his recourse under Rule 45 of the Revised Rules of Court.

It alleges in its petition that:I.THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN RULING THAT ARTICLE 2176, THE GENERAL PROVISION ON QUASI-DELICTS, IS APPLICABLE IN THIS CASE WHEN THE ALLEGATIONS OF THE COMPLAINT CLEARLY SHOW THAT PRIVATE RESPONDENT'S CAUSE OF ACTION IS BASEDON BREACH OF A SELLER'S IMPLIED WARRANTIES UNDER OUR LAW ON SALES.II.CORROLARILY, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR IN OVERRULING PETITIONER'S ARGUMENT THAT PRIVATE RESPONDENT'S CAUSE OF ACTION HAD PRESCRIBED UNDER ARTICLE 1571 OF THE CIVIL CODE. 12

The petitioner insists that a cursory reading of the complaint will reveal that the primary legal basis for private respondent's cause of action is not Article 2176 of the Civil Code on quasi-delict for the complaint does not ascribe any tortious or wrongful conduct on its part but Articles 1561 and 1562 thereof on breach of a seller's implied warranties under the law on sales.

It contends the existence of a contractual relation between the parties (arising from the contract of sale) bars the application of the law on quasi-delicts and that since private respondent's cause of action arose from the breach of implied warranties, the complaint should have been filed within six months room delivery of the soft drinks pursuant to Article 171 of the Civil Code.

In her Comment the private respondent argues that in case of breach of the seller's implied warranties, the vendee may, under Article 1567 of the Civil Code, elect between withdrawing from the contract or demanding a proportionate reduction of the price, with damages in either case. She asserts that Civil Case No. D-9629 is neither an action for rescission nor for proportionate reduction of the price, but for damages arising from a quasi-delict and that the public respondent was correct in ruling that the existence of a contract did not preclude the action for quasi-delict. As to the issue of prescription, the private respondent insists that since her cause of action is based on quasi-delict, the prescriptive period therefore is four (4) years in accordance with Article 1144 of the Civil Code and thus the filing of the complaint was well within the said period.

We find no merit in the petition. The public respondent's conclusion that the cause of action in Civil Case No. D-9629 is found on quasi-delict and that, therefore, pursuant to Article 1146 of the Civil Code, it prescribes in four (4) years is supported by the allegations in the complaint, more particularly paragraph 12 thereof, which makes reference to the reckless and negligent manufacture of "adulterated food items intended to be sold for public consumption."

The vendee's remedies against a vendor with respect to the warranties against hidden defects of or encumbrances upon the thing sold are not limited to those prescribed in Article 1567 of the Civil Code which provides:

Art. 1567. In the case of Articles 1561, 1562, 1564, 1565 and 1566, the vendee may elect between withdrawing from the contract and demanding a proportionate reduction of the price, with damages eithercase. 13

The vendee may also ask for the annulment of the contract upon proof of error or fraud, in which case the ordinary rule on obligations shall be applicable. 14 Under the law on obligations, responsibility arising from fraud is demandable in all obligations and any waiver of an action for future fraud is void. Responsibility arising from negligence is also demandable in any obligation, but such liability may be regulated by the courts, according to the circumstances. 15 Those guilty of fraud, negligence, or delay in the performance of their obligations and those who in any manner contravene the tenor thereof are liable for damages. 16

The vendor could likewise be liable for quasi-delict under Article 2176 of the Civil Code, and an action based thereon may be brought by the vendee. While it may be true that the pre-existing contract between the parties may, as a general rule, bar the applicability of the law on quasi-delict, the liability may itself be deemed to arise from quasi-delict, i.e., the acts which breaks the contract may also be a quasi-delict. Thus, in Singson vs. Bank of the Philippine Islands, 17 this Court stated:

We have repeatedly held, however, that the existence of a contract between the parties does not bar the commission of a tort by the one against the other and the consequent recovery of damages therefor. 18 Indeed, this view has been, in effect, reiterated in a comparatively recent case. Thus, in Air France vs. Carrascoso, 19 involving an airplane passenger who, despite hi first-class ticket, had been illegally ousted from his first-class accommodation and compelled to take a seat in the tourist compartment, was held entitled to recover damages from the air-carrier, upon the ground of tort on the latter's part, for, although the relation between the passenger and a carrier is "contractual both in origin and nature . . . the act that breaks the contract may also be a tort.

Otherwise put, liability for quasi-delict may still exist despite the presence of contractual relations. 20Under American law, the liabilities of a manufacturer or seller of injury-causing products may be based on negligence, 21 breach of warranty, 22 tort, 23 or other grounds such as fraud, deceit, or misrepresentation. 24 Quasi-delict, as defined in Article 2176 of the Civil Code, (which is known in Spanish legal treaties as culpa aquiliana, culpa extra-contractual or cuasi-delitos) 25 is homologous but not identical to tort under the common law, 26 which includes not only negligence, but also intentional criminal acts, such as assault and battery, false imprisonment and deceit. 27

It must be made clear that our affirmance of the decision of the public respondent should by no means be understood as suggesting that the private respondent's claims for moral damages have sufficient factual and legal basis.

IN VIEW OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit, with costs against the petitioner.SO ORDERED.

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-5932 February 27, 1912DEAN C. WORCESTER,plaintiff-appellee,vs.MARTIN OCAMPO, TEODORO M. KALAW, LOPE K. SANTOS, FIDEL A. REYES, FAUSTINO AGUILAR, ET AL.,defendants-appellants.JOHNSON,J.:On the 23rd day of January, 1909, the plaintiff commenced an action against the defendants in the Court of First Instance of the city of Manila, for the purpose of recovering damages resulting from an alleged libelous publication. The complaint was in the following language:COMPLAINT.I.That the plaintiff as well as the defendants are residents of the city of Manila, Philippine Islands.II.That for a long time before the 30th of October, 1908, the defendants, Martin Ocampo, Teodoro M. Kalaw, Lope K. Santos, Fidel A. Reyes, Faustino Aguilar, Leoncio G. Liquete , Manuel Palma, Arcadio Arellano, Angel Jose, Galo Lichauco, Felipe Barretto, and Gregorio M. Cansipit, were the owners, directors, writers (redactores), editors (editores) and administrators of a certain daily newspaper known as "El Renacimiento" and "Muling Pagsilang," which newspaper during all the time mentioned in this complaint was published and circulated daily in the Spanish and Tagalog languages in the city of Manila, having a large circulation throughout the Philippine Islands.III.That for a long time the defendants have been maliciously persecuting and attacking the plaintiff in said newspaper, until at last on the 30th of October, 1908, with the malicious intention of injuring the plaintiff, who on said date was, and still is a member of the Civil Commission of the Philippines and Secretary of the Interior in the Government of the Philippines, they attacked the honesty and reviled the fame of the plaintiff, not only as a private person but also as an official of the Government of the Philippine Islands, and with the object of exposing him to the odium, contempt, and ridicule of the public, printed, wrote (redactaron), and published in said newspaper in its ordinary number of the 30th of October, 1908, a malicious defamation and false libel which was injurious (injurioso) to the plaintiff, said libel reading as follows:"EDITORIAL."BIRDS OF PREY."On the surface of the globe some were born to eat and devour, others to be eaten and devoured."Now and then the latter have bestirred themselves, endeavoring to rebel against an order of things which makes them the prey and food of the insatiable voracity of the former. At times they have been fortunate, putting to flight the eaters and devourers, but in the majority of cases they did not obtain but a change of name or plumage."The situation is the same in all the spheres of creation: the relation between the ones and the others is that dictated by the appetite and the power to satisfy it at the fellow-creatures' expense."Among men it is very easy to observe the development of this daily phenomenon. And for some psychological reason the nations who believe themselves powerful have taken the fiercest and most harmful creatures as emblems; it is either the lion, or the eagle, or the serpent. Some have done so by a secret impulse of affinity and others in the nature of simulation, of infatuated vanity, making themselves appear that which they are not nor ever can be."The eagle, symbolizing liberty and strength, is the bird that has found the most adepts. And men, collectively and individually, have desired to copy and imitate the most rapacious bird in order to triumph in the plundering of their fellow-men."There are men who, besides being eagles, have the characteristics of the vulture, the owl and the vampire."Ascending the mountains of Benguet to classify and measure the skulls of the Igorots and study and civilize them and to espy in his flight, with the eye of the bird of prey, where are the large deposits of gold, the prey concealed amidst the lonely mountains, to appropriate them to himself afterwards, thanks to legal facilities made and unmade at will, but always for his own benefit."Authorizing, despite laws and ordinances, an illegal slaughtering of diseased cattle in order to derive benefit from the infected and putrid meat which he himself was obliged to condemn by virtue of his official position."Presenting himself on all occasions with the wrinkled brow of the scientist who consumes his life in the mysteries of the laboratory of science, when his whole scientific labor is confined o dissecting insects and importing fish eggs, as if the fish eggs of this country were less nourishing and less savory, so as to make it worth the while replacing them with species coming from other climes."Giving an admirable impulse to the discovery of wealthy lodes in Mindoro, in Mindanao, and in other virgin regions of the Archipelago, with the money of the people, and under the pretext of the public good, when, as a strict matter of truth, the object is to possess all the data and the key to the national wealth for his essentially personal benefit, as is shown by the acquisition of immense properties registered under he names of others."Promoting, through secret agents and partners, the sale to the city of worthless land at fabulous prices which the city fathers dare not refuse, from fear of displeasing the one who is behind the motion, and which they do not refuse for their own good."Patronizing concessions for hot