FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation and Lambert Eroles Posted on November 24, 2012 G.R. No. 141910 August 6, 2002 FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of Condura S.D. white refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While traversing the North Diversion Road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes. FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CII’s rights & interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages & breach of contract of carriage against GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was only the exclusive hauler of CII since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental. GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier.
Transcript
FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation and Lambert ErolesPosted on November 24, 2012G.R. No. 141910August 6, 2002FACTS:G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of Condura S.D. white refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While traversing the North Diversion Road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.
FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CII’s rights & interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages & breach of contract of carriage against GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was only the exclusive hauler of CII since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental.
GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier.
The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint holding that GPS was not a common carrier defined under the law & existing jurisprudence. The subsequent motion for reconsideration having been denied, FGU interposed an appeal to the CA. The
CA rejected the FGU’s appeal & ruled in favor of GPS. It also denied petitioner’s motion for reconsideration.
ISSUES:1. WON GPS may be considered a common carrier as defined under the law & existing jurisprudence.
2. WON GPS, either as a common carrier or a private carrier, may be presumed to have been negligent when the goods it undertook to transport safely were subsequently damaged while in its protective custody & possession.
3. Whether the doctrine of Res ipsa loquitur is applicable in the instant case.HELD:1. The SC finds the conclusion of the RTC and the CA to be amply justified. GPS, being an exclusive contractor & hauler of Concepcion Industries, Inc., rendering/offering its services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to the public, whether to the public in general or to a limited clientele in particular, but never on an exclusive basis. The true test of a common carrier is the carriage of passengers/goods, providing space for those who opt to avail themselves of its transportation service for a fee. Given accepted standards, GPS scarcely falls within the term “common carrier.”
2. GPS cannot escape from liability. In culpa contractual, the mere proof of the existence of the contract & the failure of its compliance justify, prima facie, a corresponding right of relief. The law will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost/suffered. The remedy serves to preserve the interests of the promisee that may include his:
1. Expectation interest – interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed;
2. Reliance interest – interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made;
3. Restitution interest – interest in having restored to him any benefit that he has conferred on the other party.
Agreements can accomplish little unless they are made the basis for action. The effect of every infraction is to create a new duty, or to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.
A default on, or failure of compliance with, the obligation gives rise to a presumption of lack of care & corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.
Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof of his negligence/fault. The driver, not being a party to the contract of carriage between petitioner’s principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality/juridical position. Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioner’s civil action against the driver can only be based on culpa aquiliana, which would require the claimant for damages to prove the defendant’s negligence/fault.
3. Res ipsa loquitur holds a defendant liable where the thing which caused the injury complained of is shown to be under the latter’s management and the accident is such that, in the ordinary course of things, cannot be expected to happen if those who have its management/control use proper care. In the absence of the defendant’s explanation, it affords reasonable evidence that the accident arose from want of care. It is not a rule of substantive law and does not create an independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places the burden of going forward with the proof on the defendant.However, resort to the doctrine may only be allowed when:
(a) the event is of a kind which does not ordinarily occur in the absence of negligence;
(b) other responsible causes are sufficiently eliminated by the evidence (includes the conduct of the plaintiff and third persons); and
(c) the indicated negligence is within the scope of the defendant’s duty to the plaintiff.
Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not be responsible.
Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties. Nevertheless,for the doctrine to apply, the requirement that responsible causes (other than those due to defendant’s conduct) must first be eliminated should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual immediately attaches by a failure of the covenant or its tenor.
On the other hand, while the truck driver, whose civil liability is predicated on culpa acquiliana, can be said to have been in control & management of the vehicle, it is not equally shown that the accident has been exclusively due to his negligence. If it were so, the negligence could allow res ipsa loquitur to properly work against him. However, clearly this is not the case.
FILIPINAS SYNTHETIC FIBER CORPORATION, PETITIONER, VS. WILFREDO DE LOS SANTOS, BENITO JOSE DE LOS SANTOS, MARIA ELENA DE LOS SANTOS AND CARMINA VDA. DE LOS SANTOS, RESPONDENTS.PERALTA, J.:FACTS: On September 30, 1984, Teresa Elena Legarda-de los Santos, the wife of respondent Wilfredo de los Santos was fetched by Wilfredo’s brother Armando, husband of respondent Carmina Vda. de los Santos, from Rizal Theater to after Teresa’s theater performance. Armando drove a 1980 Mitsubishi Galant Sigma, a company car assigned to Wilfredo. Two other members of the cast of production joined Teresa Elena in the Galant Sigma.
Around 11:30 p.m., while travelling along the Katipunan Road (White Plains), the Galant Sigma collided with the shuttle bus owned by petitioner and driven by Alfredo S. Mejia (Mejia), an employee of petitioner Filipinas Synthetic Corp. The Galant Sigma was dragged about 12 meters from the point of impact, across the White Plains Road landing near the perimeter fence of Camp Aguinaldo, where the Galant Sigma burst into flames and burned to death beyond recognition all four occupants of the car.
A criminal charge for reckless imprudence resulting in damage to property with multiple homicide was brought against Mejia, which was decided in favor of Mejia (shuttle driver). A consolidated civil case was filed by the families of the deceased against Mejia. The RTC ruled in favor of herein respondents. After the denial of the motion for reconsideration, petitioner appealed to the CA and the CA affirmed the decision of the RTC. Hence this petition stating that the respondent court erred in finding Mejia negligent, such not being supported by evidence on record.
ISSUE: Whether Mejia was negligentHELD:
Petitioner argues that the RTC admitted that De los Santos made a turn along White Plains Road without exercising the necessary care which could have prevented the accident from happening. According to petitioner, the sudden turn of the vehicle used by the victims should also be considered as negligence on the part of the driver of that same vehicle, thus, mitigating, if not absolving petitioner’s liability. However, the said argument deserves scant consideration.
It was well established that Mejia was driving at a speed beyond the rate of speed required by law, specifically Section 35 of Republic Act No. (RA) 4136. Under the New Civil Code, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation. Apparently, in the present case, Mejia’s violation of the traffic rules does not erase the presumption that he was the one negligent at the time of the collision. Even apart from statutory regulations as to speed, a motorist is nevertheless expected to exercise ordinary care and drive at a reasonable rate of speed commensurate with all the conditions encountered which will enable him to keep the vehicle under control and, whenever necessary, to put the vehicle to a full stop to avoid injury to others using the highway.
A closer study of the Police Accident Report, Investigation Report and the sketch of the accident would reveal nothing but that the shuttle bus was traveling at such a reckless speed that it collided with the car bearing the deceased.
WHEREFORE, the Petition for Review is hereby DENIED. Consequently, the Decision of the Court of Appeals, dated August 15, 2001, is hereby AFFIRMED with theMODIFICATION that the moral damages be reduced to P50,000.00.
Heirs of Completo v. Albayda, Jr.
Heirs of Redentor Completo, and Elpidio Abiad v. Sgt. Amando Albayda, Jr.2010 / Nachura [Negilgence > Standard of conduct > Special circumstance]FactsAlbayda is a Master Sergeant of the PH Air Force, and Completo was the taxi driver of a Toyota Corolla which was owned by Abiad. Albayda was riding a bike on his way to the office, when Completo’s taxi bumped and sideswept him, causing serious physical injuries. He [Albayda] was brought to the PH Air Force General Hospital, but he was transferred to the AFP Medical Center because he sustained a fracture and there was no orthopedic doctor available in the first hospital. He was confined from 27 Aug 1997 to 11 Feb 1998, and again in 23 Feb to 22 Mar 1998 [approx. 7 months]. Conciliation before the barangay failed, so Albayda filed a complaint for physical injuries through reckless imprudence against Completo before the Office of the City Prosecutor of Pasay. Completo filed a counter-charge of damage to property through reckless imprudence against Albayda. The Office of the City Prosecutor recommended the filing of an information for Albayda’s complaint, and Completo’s complaint [against Albayda] was dismissed. Albayda manifested his reservation to file a separate civil action for damages against Completo and Abiad.
Albayda alleged that Completo’s negligence is the proximate cause of the incident. He demanded the following damages and their respective amounts: Actual damages – 276,550; Moral damages – 600,000; Exemplary damages – 200,000; Attorney’s fees – 25,000 + 1,000 per court appearance. On the other hand, Completo alleged that he was carefully driving the taxicab when he heard a strange sound from the taxicab’s rear right side. He found Albayda lying on the road, holding his left leg, so he brought Albayda to PH Air Force General Hospital. Completo asserted that he was an experienced driver, and that he already reduced his speed to 20km even before reaching the intersection. In contrast, Albayda rode his bicycle at high speed, causing him to lose control of the bicycle. Completo said that Albayda had no cause of action. Several people testified for each side, but here are some notes on the testimony of the owner of the taxi driver, Abiad. Abiad said that aside from being a soldier, he also held franchises of taxicabs and passenger jeepneys, and being a taxicab operator, he would wake up early to personally check the taxicabs. When Completo applied as a taxicab driver, Abiad required him to show his bio-data, NBI clearance, and driver’s license. Completo never figured in a vehicular accident since he was employed, and according to Abiad, he [Completo] was a good driver and good man. RTC rendered judgment in favor of Albayda, and the defendants are ordered to pay actual [46k] and moral [400k] damages, and attorney’s fees [25k]. Upon appeal at the CA, the court affirmed RTC’s decision with modifications [no more actual damages; awarded temperate damages [40k]; moral damages only 200k; Completo and Abiad are solidarily liable to pay Albayda; added legal interest].Issues and Holding
1. WON CA erred in finding that Completo was the one who caused the collision. NO2. WON Abiad failed to prove that he observed the diligence of a good father of the family. YES3. WON the award of moral and temperate damages and attorney’s fees for Albayda had no basis. NO / NO /
YESRatioOn NegligenceIt is a rule in negligence suits that the plaintiff has the burden of proving by a preponderance of evidence the motorist’s breach in his duty of care owed to the plaintiff, that the motorist was negligent in failing to exercise the diligence required to avoid injury to the plaintiff, and that such negligence was the proximate cause of the injury suffered. NCC 2176 quoted, and said that the question of the motorist’s negligence is a question of fact. Usually, more will be required of a motorist [25mi/hr = 37ft/sec] than a bicyclist [10mi/hr = 15ft/sec] in discharging the duty of care because of the physical advantages the former has over the latter.It was proven by a preponderance of evidence that Completo failed to exercise reasonable diligence.
He was overspeeding at the time he hit Albayda’s bicycle; he did not slow down even when he approached the intersection
Such negligence was the sole and proximate cause of the injuries sustained by Albayda It was proven that Albayda had the right of way since he reached the intersection ahead of Completo
NCC 2180 cited – obligation imposed by NCC 2176 is demandable also for those persons for whom one is responsible. Employers are liable for damage caused by employees, but the responsibility ceases upon proof that employers observed the diligence of the good father of the family in the selection and supervision of employees. The burden of proof is on the employer. The responsibility of two or more persons who are liable for QD is solidary. The employer’s civil liability for his employee’s negligent acts is also primary and direct, owing to his own negligence in selecting and supervising them, and this liability attaches even if the employer is not in the vehicle at the time of collision. In the selection of employees, employers are required to examine them as to their qualifications, experience, and service records. With respect to supervision, employers should formulate SOPs and monitor their implementation, and impose disciplinary measures for breaches. To establish these factors in a trial involving the issue of vicarious [secondary] liability, employers must submit concrete proof, including documentary evidence.ABIAD’S EVIDENCE CONSISTED ENTIRELY OF TESTIMONIAL EVIDENCE, AND THIS IS INSUFFICIENT TO OVERCOME THE LEGAL PRESUMPTION THAT HE WAS NEGLIGENT IN THE SELECTION AND SUPERVISION OF COMPLETO.On DamagesCA rightfully deleted the award of actual damages because Albayda failed to present documentary evidence to establish the amount incurred. Temperate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot be proved with certainty. Moral damages are awarded in QDs causing physical injuries, so the award is proper. The award of attorney’s fees is deleted for failure to prove that petitioners acted in bad faith in refusing to satisfy respondent’s just and valid claim.
SPOUSES PACIS VS. MORALESG.R. No. 169467February 25, 2010FACTS: petitioners filed with the trial court a civil case for damages against respondent Morales.Petitioners are the parents of Alfred Pacis, a 17-year old student who died in a shooting incident inside the Top Gun Firearms and Ammunitions Store in Baguio City. Morales is the owner of the gun store.
On the fateful day, Alfred was in the gun store, with Matibag and Herbolario as sales agents and caretakers of the store while owner Morales was in Manila. The gun which killed Alfred is a gun owned by a store customer which was left with Morales for repairs, which he placed inside a drawer. Since Morales would be going to Manila, he left the keys to the store with the caretakers. It appears that the caretakers took the gun from the drawer and placed it on top of a table. Attracted by the sight of the gun, the young Alfred got hold of the same. Matibag asked Alfred to return the gun. The latter followed and handed the gun to Matibag. It went off, the bullet hitting the young Alfred in the head.
A criminal case for homicide was filed against Matibag. Matibag, however, was acquitted of the charge against him because of the exempting circumstance of “accident” under Art. 12, par. 4 of the RPC.
By agreement of the parties, the evidence adduced in the criminal case for homicide against Matibag was reproduced and adopted by them as part of their evidence in the instant case.
The trial court rendered its decision in favor of petitioners, ordering the defendant to pay plaintiffs indemnity for the death of Alfred, actual damages for the hospitalization and burial, expenses incurred by the plaintiffs, compensatory damages, MD and AF.Respondent appealed to the CA, which reversed the trial court’s Decision and absolved respondent from civil liability under Article 2180 of the Civil Code. MR denied, hence this petition.
ISSUE: Was Morales negligent?HELD: Petition granted. The CA decision is set aside and the trial court’s Decision reinstated.YESThis case for damages arose out of the accidental shooting of petitioners’ son. Under Article 1161 of the Civil Code, petitioners may enforce their claim for damages based on the civil liability arising from the crime under Article 100 of the RPC or they may opt to file an independent civil action for damages under the Civil Code. In this case, instead of enforcing their claim for damages in the homicide case filed against Matibag, petitioners opted to file an independent civil action for damages against respondent whom they alleged was Matibag’s employer. Petitioners based their claim for damages under Articles 2176 and 2180 of the Civil Code.
**Unlike the subsidiary liability of the employer under Article 103 of the RPC, the liability of the employer, or any person for that matter, under Article 2176 of the Civil Code is primary and direct, based on a person’s own negligence. Article 2176 states:
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 quasi-delict and is governed by the provisions of this Chapter.
This case involves the accidental discharge of a firearm inside a gun store. Under PNP Circular No. 9, entitled the “Policy on Firearms and Ammunition Dealership/Repair,” a person who is in the business of purchasing and selling of firearms and ammunition must maintain basic security and safety requirements of a gun dealer, otherwise his License to Operate Dealership will be suspended or canceled.
Indeed, a higher degree of care is required of someone who has in his possession or under his control an instrumentality extremely dangerous in character, such as dangerous weapons or substances. Such person in possession or control of dangerous instrumentalities has the duty to take exceptional precautions to prevent any injury being done thereby. Unlike the ordinary affairs of life or business which involve little or no risk, a business dealing with dangerous weapons requires the exercise of a higher degree of care.
As a gun store owner, respondent is presumed to be knowledgeable about firearms safety and should have known never to keep a loaded weapon in his store to avoid unreasonable risk of harm or injury to others. Respondent has the duty to ensure that all the guns in his store are not loaded. Firearms should be stored unloaded and separate from ammunition when the firearms are not needed for ready-access defensive use. With more reason, guns accepted by the store for repair should not be loaded precisely because they are defective and may cause an accidental discharge such as what happened in this case. Respondent was clearly negligent when he accepted the gun for repair and placed it inside the drawer without ensuring first that it was not loaded. In the first place, the defective gun should have been stored in a vault. Before accepting the defective gun for repair, respondent should have made sure that it was not loaded to prevent any untoward accident. Indeed, respondent should never accept a firearm from another person, until the cylinder or action is open and he has personally checked that the weapon is completely unloaded. For failing to insure that the gun was not loaded, respondent himself was negligent. Furthermore, it was not shown in this case whether respondent had a License to Repair which authorizes him to repair defective firearms to restore its original composition or enhance or upgrade firearms.
Clearly, respondent did not exercise the degree of care and diligence required of a good father of a family, much less the degree of care required of someone dealing with dangerous weapons, as would exempt him from liability in this case.
ANTONIO FRANCISCO, substituted by his heirs: NELIA E.S. FRANCISCO, EMILIA F. BERTIZ, REBECCA E.S. FRANCISCO, ANTONIO E.S. FRANCISCO, JR., SOCORRO F. FONTANILLA, and JOVITO E.S. FRANCISCO,
This is a petition for review1 of the 31 May 2010 Decision2 and 31 August 2010 Resolution3 of the Court of Appeals in CA G.R. CV No. 63591. In its 31 May 2010 Decision, the Court of Appeals set aside the 21 August 1998 Decision4 of the Regional Trial of Pasig City, Branch 71 (trial court), and ordered petitioner Antonio Francisco (Francisco) to pay respondent Chemical Bulk Carriers, Incorporated (CBCI) P1,119,905 as actual damages. In its 31 August 2010 Resolution, the Court of Appeals denied Franciscos motion for reconsideration.
The Facts
Since 1965, Francisco was the owner and manager of a Caltex station in Teresa, Rizal. Sometime in March 1993, four persons, including Gregorio Bacsa (Bacsa), came to Franciscos Caltex station and introduced themselves as employees of CBCI. Bacsaoffered to sell to Francisco a certain quantity of CBCIs diesel fuel.
After checking Bacsas identification card, Francisco agreed to purchase CBCIs diesel fuel. Francisco imposed the following conditions for the purchase: (1) that Petron Corporation (Petron) should deliver the diesel fuel to Francisco at his business address which should be properly indicated in Petrons invoice; (2) that the delivery tank is sealed; and (3) that Bacsa should issue a separate receipt to Francisco.
The deliveries started on 5 April 1993 and lasted for ten months, or up to 25 January 1994.5 There were 17 deliveries to Francisco and all his conditions were complied with.
In February 1996, CBCI sent a demand letter to Francisco regarding the diesel fuel delivered to him but which had been paid for by CBCI.6 CBCI demanded that Francisco pay CBCI P1,053,527 for the diesel fuel or CBCI would file a complaint against him in court. Francisco rejected CBCIs demand.
On 16 April 1996, CBCI filed a complaint for sum of money and damages against Francisco and other unnamed defendants.7According to CBCI, Petron, on various dates, sold diesel fuel to CBCI but these were delivered to and received by Francisco. Francisco then sold the diesel fuel to third persons from whom he received payment. CBCI alleged that Francisco acquired possession of the diesel fuel without authority from CBCI and deprived CBCI of the use of the diesel fuel it had paid for. CBCI demanded payment from Francisco but he refused to pay. CBCI argued that Francisco should have known that since only Petron, Shell and Caltex are authorized to sell and distribute petroleum products in the Philippines, the diesel fuel came from illegitimate, if not illegal or criminal, acts. CBCI asserted that Francisco violated Articles 19,8 20,9 21,10 and 2211 of the Civil Code and that he should be held liable. In the alternative, CBCI claimed that Francisco, in receiving CBCIs diesel fuel, entered into an innominate contract of do ut des (I give and you give) with CBCI for which Francisco is obligated to pay CBCIP1,119,905, the value of the diesel fuel. CBCI also prayed for exemplary damages, attorneys fees and other expenses of litigation.
On 20 May 1996, Francisco filed a Motion to Dismiss on the ground of forum shopping.12 CBCI filed its Opposition.13 In an Order dated 15 November 1996, the trial court denied Franciscos motion.14
Thereafter, Francisco filed his Answer.15 Francisco explained that he operates the Caltex station with the help of his family because, in February 1978, he completely lost his eyesight due to sickness. Francisco claimed that he asked Jovito, his son, to look into and verify the identity of Bacsa, who introduced himself as a radio operator and confidential secretary of a certain Mr.Inawat (Inawat), CBCIs manager for operations. Francisco said he was satisfied with the proof presented by Bacsa. When asked to explain why CBCI was selling its fuel, Bacsa allegedly replied that CBCI was in immediate need of cash for the salary of its daily paid workers and for petty cash. Francisco maintained that Bacsa assured him that the diesel fuel was not stolen property and that CBCI enjoyed a big credit line with Petron. Francisco agreed to purchase the diesel fuel offered by Bacsa on the following conditions:
1) Defendant [Francisco] will not accept any delivery if it is not company (Petron) delivered, with his name and address as shipping point properly printed and indicated in the invoice of Petron, and that the product on the delivery tank is sealed; [and]
2) Although the original invoice is sufficient evidence of delivery and payment, under ordinary course of business, defendant still required Mr. Bacsato issue a separate receipt duly signed by him acknowledging receipt of the amount stated in the invoice, for and in behalf of CBCI.16
During the first delivery on 5 April 1993, Francisco asked one of his sons to verify whether the delivery trucks tank was properly sealed and whether Petron issued the invoice. Francisco said all his conditions were complied with. There were 17 deliveries made from 5 April 1993 to 25 January 1994 and each delivery was for 10,000 liters of diesel fuel at P65,865.17 Francisco maintained that he acquired the diesel fuel in good faith and for value. Francisco also filed a counterclaim for exemplary damages, moral damages and attorneys fees.
In its 21 August 1998 Decision, the trial court ruled in Franciscos favor and dismissed CBCIs complaint. The dispositive portion of the trial courts 21 August 1998 Decision reads:
WHEREFORE, Judgment is hereby rendered:
1. Dismissing the complaint dated March 13, 1996 with costs.
2. Ordering plaintiff (CBCI), on the counterclaim, to pay defendant the amount of P100,000.00 as moral damages and P50,000.00 as and by way of attorneys fees.
SO ORDERED.18
CBCI appealed to the Court of Appeals.19 CBCI argued that Francisco acquired the diesel fuel from Petron without legal ground because Bacsa was not authorized to deliver and sell CBCIs diesel fuel. CBCI added that Francisco acted in bad faith because he should have inquired further whether Bacsas sale of CBCIs diesel fuel was legitimate.
In its 31 May 2010 Decision, the Court of Appeals set aside the trial courts 21 August 1998 Decision and ruled in CBCIs favor. The dispositive portion of the Court of Appeals 31 May 2010 Decision reads:
IN VIEW OF THE FOREGOING, the assailed decision is hereby REVERSED and SET ASIDE. Antonio Francisco is ordered to pay Chemical Bulk Carriers, Incorporated the amount of P1,119,905.00 as actual damages.
SO ORDERED.20
On 15 January 2001, Francisco died.21 Franciscos heirs, namely: Nelia E.S. Francisco, Emilia F. Bertiz, Rebecca E.S. Francisco, Antonio E.S. Francisco, Jr., Socorro F. Fontanilla, and Jovito E.S. Francisco (heirs of Francisco) filed a motion for substitution.22The heirs of Francisco also filed a motion for reconsideration.23 In its 31 August 2010 Resolution, the Court of Appeals granted the motion for substitution but denied the motion for reconsideration.
Hence, this petition.
The Ruling of the Trial Court
The trial court ruled that Francisco was not liable for damages in favor of CBCI because the 17 deliveries were covered by original and genuine invoices. The trial court declared that Bacsa, as confidential secretary of Inawat, was CBCIs authorized representative who received Franciscos full payment for the diesel fuel. The trial court
stated that if Bacsa was not authorized, CBCI should have sued Bacsa and not Francisco. The trial court also considered Francisco a buyer in good faith who paid in full for the merchandise without notice that some other person had a right to or interest in such diesel fuel. The trial court pointed out that good faith affords protection to a purchaser for value. Finally, since CBCI was bound by the acts of Bacsa, the trial court ruled that CBCI is liable to pay damages to Francisco.
The Ruling of the Court of Appeals
The Court of Appeals set aside the trial courts 21 August 1998 Decision and ruled that Bacsas act of selling the diesel fuel to Francisco was his personal act and, even if Bacsa connived with Inawat, the sale does not bind CBCI.
The Court of Appeals declared that since Francisco had been in the business of selling petroleum products for a considerable number of years, his blindness was not a hindrance for him to transact business with other people. With his condition and experience, Francisco should have verified whether CBCI was indeed selling diesel fuel and if it had given Bacsa authority to do so. Moreover, the Court of Appeals stated that Francisco cannot feign good faith since he had doubts as to the authority of Bacsayet he did not seek confirmation from CBCI and contented himself with an improvised receipt. Franciscos failure to verify Bacsasauthority showed that he had an ulterior motive. The receipts issued by Bacsa also showed his lack of authority because it was on a plain sheet of bond paper with no letterhead or any indication that it came from CBCI. The Court of Appeals ruled that Francisco cannot invoke estoppel because he was at fault for choosing to ignore the tell-tale signs of petroleum diversion and for not exercising prudence.
The Court of Appeals also ruled that CBCI was unlawfully deprived of the diesel fuel which, as indicated in the invoices, CBCI had already paid for. Therefore, CBCI had the right to recover the diesel fuel or its value from Francisco. Since the diesel fuel can no longer be returned, the Court of Appeals ordered Francisco to give back the actual amount paid by CBCI for the diesel fuel.
The Issues
The heirs of Francisco raise the following issues:
I. WHETHER THE COURT OF APPEALS ERRED IN NOT FINDING THAT DEFENDANT ANTONIO FRANCISCO EXERCISED THE REQUIRED DILIGENCE OF A BLIND PERSON IN THE CONDUCT OF HIS BUSINESS; and
II. WHETHER ON THE BASIS OF THE FACTUAL FINDINGS OF THE COURT OF APPEALS AND THE TRIAL COURT AND ADMITTED FACTS, IT CAN BE CONCLUDED THAT THE PLAINTIFF APPROVED EXPRESSLY OR TACITLY THE TRANSACTIONS.24
The Ruling of the Court
The petition has no merit.
Required Diligence of a Blind Person
The heirs of Francisco argue that the Court of Appeals erred when it ruled that Francisco was liable to CBCI because he failed to exercise the diligence of a good father of a family when he bought the diesel fuel. They argue that since Francisco was blind, the standard of conduct that was required of him was that of a reasonable person under like disability. Moreover, they insist that Francisco exercised due care in purchasing the diesel fuel by doing the following: (1) Francisco asked his son to check the identity of Bacsa; (2) Francisco required direct delivery from Petron; (3) Francisco required that he be named as the consignee in the invoice; and (4) Francisco required separate receipts from Bacsa to evidence actual payment.
Standard of conduct is the level of expected conduct that is required by the nature of the obligation and corresponding to the circumstances of the person, time and place.25 The most common standard of conduct is that of a good father of a family or that of a reasonably prudent person.26 To determine the diligence which must be required of all persons, we use as basis the abstract average standard corresponding to a normal orderly person.27
However, one who is physically disabled is required to use the same degree of care that a reasonably careful person who has the same physical disability would use.28 Physical handicaps and infirmities, such as blindness or deafness, are treated as part of the circumstances under which a reasonable person must act. Thus, the standard of conduct for a blind person becomes that of a reasonable person who is blind.
We note that Francisco, despite being blind, had been managing and operating the Caltex station for 15 years and this was not a hindrance for him to transact business until this time. In this instance, however, we rule that Francisco failed to exercise the standard of conduct expected of a reasonable person who is blind. First, Francisco merely relied on the identification card ofBacsa to determine if he was authorized by CBCI. Francisco did not do any other background check on the identity and authority of Bacsa. Second, Francisco already expressed his misgivings about the diesel fuel, fearing that they might be stolen property,29yet he did not verify with CBCI the authority of Bacsa to sell the diesel fuel. Third, Francisco relied on the receipts issued byBacsa which were typewritten on a half sheet of plain bond paper.30 If Francisco
exercised reasonable diligence, he should have asked for an official receipt issued by CBCI. Fourth, the delivery to Francisco, as indicated in Petrons invoice, does not show that CBCI authorized Bacsa to sell the diesel fuel to Francisco. Clearly, Francisco failed to exercise the standard of conduct expected of a reasonable person who is blind.
Express or Tacit Approval of the Transaction
The heirs of Francisco argue that CBCI approved expressly or tacitly the transactions. According to them, there was apparent authority for Bacsa to enter into the transactions. They argue that even if the agent has exceeded his authority, the principal issolidarily liable with the agent if the former allowed the later to act as though he had full powers.31 They insist CBCI was not unlawfully deprived of its property because Inawat gave Bacsa the authority to sell the diesel fuel and that CBCI is bound by such action. Lastly, they argue that CBCI should be considered in estoppel for failure to act during the ten month period that deliveries were being made to Francisco.
The general principle is that a seller without title cannot transfer a better title than he has.32 Only the owner of the goods or one authorized by the owner to sell can transfer title to the buyer.33 Therefore, a person can sell only what he owns or is authorized to sell and the buyer can, as a consequence, acquire no more than what the seller can legally transfer.34
Moreover, the owner of the goods who has been unlawfully deprived of it may recover it even from a purchaser in good faith.35Thus, the purchaser of property which has been stolen from the owner has been held to acquire no title to it even though he purchased for value and in good faith.
The exception from the general principle is the doctrine of estoppel where the owner of the goods is precluded from denying the sellers authority to sell.36 But in order that there may be estoppel, the owner must, by word or conduct, have caused or allowed it to appear that title or authority to sell is with the seller and the buyer must have been misled to his damage.37
In this case, it is clear that Bacsa was not the owner of the diesel fuel. Francisco was aware of this but he claimed that Bacsa was authorized by CBCI to sell the diesel fuel. However, Franciscos claim that Bacsa was authorized is not supported by any evidence except his self-serving testimony. First, Francisco did not even confirm with CBCI if it was indeed selling its diesel fuel since it is not one of the oil companies known in the market to be selling petroleum products. This fact alone should have put Francisco on guard. Second, it does not appear that CBCI, by some direct and equivocal act, has clothed Bacsa with the indicia of ownership or apparent authority to sell CBCIs diesel fuel. Francisco did not state if the identification card presented by Bacsaindicated that he was CBCIs agent or a mere employee. Third, the receipt issued by Bacsa was typewritten on a half sheet of plain bond paper. There was no letterhead or any indication that it came from CBCI. We agree with the Court of Appeals that this was a personal receipt issued by Bacsa and not an official receipt issued by CBCI. Consequently, CBCI is not precluded by its conduct from denying Bacsas authority to sell. CBCI did not hold out Bacsa or allow Bacsa to appear as the owner or one with apparent authority to dispose of the diesel fuel.
Clearly, Bacsa cannot transfer title to Francisco as Bacsa was not the owner of the diesel fuel nor was he authorized by CBCI to sell its diesel fuel. CBCI did not commit any act to clothe Bacsa with apparent authority to sell the diesel fuel that would have misled Francisco. Francisco, therefore, did not acquire any title over the diesel fuel. Since CBCI was unlawfully deprived of its property, it may recover from Francisco, even if Francisco pleads good faith.
WHEREFORE, we DENY the petition. We AFFIRM the 31 May 2010 Decision and 31 August 2010 Resolution of the Court of Appeals.
St. Mary's Academy vs CarpetanosSt. Mary’s Academy vs. Carpetanos
GR No. 143363, February 6, 2002
FACTS:
Herein petitioner, conducted an enrollment drive for the school year 1995-1996 They visited schools from where prospective enrollees were studying. Sherwin Carpitanos joined the campaign. Along with the other high school students, they rode a Mitsubishi jeep owned by Vivencio Villanueva on their way to Larayan Elementary School. Such jeep was driven by James Daniel II, a 15 year old student of the same school. It was alleged that he drove the jeep in a reckless manner which resulted for it to turned turtle. Sherwin died due to this accident.
ISSUE: WON petitioner should be held liable for the damages.
HELD:
CA held petitioner liable for the death of Sherwin under Article 218 and 219 of the Family Code where it was pointed that they were negligent in allowing a minor to drive and not having a teacher accompany the minor students in the jeep. However, for them to be held liable, the act or omission to be considered negligent must be the proximate cause of the injury caused thus, negligence needs to have a causal connection to the accident. It must be direct and natural sequence of events, unbroken by any efficient intervening causes. The parents of the victim failed to show such negligence on the part of the petitioner. The spouses Villanueva admitted that the immediate cause of the accident was not the reckless driving of James but the detachment of the steering wheel guide of the jeep. Futhermore, there was no evidence that petitioner allowed the minor to drive the jeep of Villanueva. The mechanical defect was an event over which
the school has no control hence they may not be held liable for the death resulting from such accident.
The registered owner of any vehicle, even if not used for public service, would primarily be responsible to the public or to 3rd persons for injuries caused while it is being driven on the road. It is not the school, but the registered owner of the vehicle who shall be held responsible for damages for the death of Sherwin. Case was remanded to the trial court for determination of the liability of the defendants excluding herein petitioner.
PERALTA, J.: Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision[1] and the Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV No. 41928. The antecedents are as follows:
Respondent Arcelito B.Tan maintained a current and savings account with Philippine Commercial International Bank (PCIB), now petitioner Equitable PCI Bank.[3] On May 13, 1992, respondent issued PCIB Check No. 275100 postdated May 30, 1992[4] in the amount of P34,588.72 in favor of Sulpicio Lines, Inc. As of May 14, 1992, respondent's balance with petitioner was P35,147.59. On May 14, 1992, Sulpicio Lines, Inc. deposited the aforesaid check to its account with Solid Bank, Carbon Branch, Cebu City. After clearing, the amount of the check was immediately debited by petitioner from respondent's account thereby leaving him with a balance of only P558.87.Meanwhile, respondent issued three checks from May 9 to May 16, 1992, specifically, PCIB Check No. 275080 dated May 9, 1992, payable to Agusan del Sur Electric Cooperative Inc. (ASELCO) for the amount of P6,427.68; PCIB Check No. 275097 dated May 10, 1992 payable to Agusan del Norte Electric Cooperative Inc., (ANECO) for the amount of P6,472.01; and PCIB Check No. 314104 dated May 16, 1992 payable in cash for the amount of P10,000.00. When presented for payment, PCIB Check Nos. 275080, 275097 and 314014 were dishonored for being drawn against insufficient funds.As a result of the dishonor of Check Nos. 275080 and 275097 which were payable to ASELCO and ANECO, respectively, the electric power supply for the two mini-sawmills owned and operated by respondent, located in Talacogon, Agusan del Sur; and in Golden Ribbon, Butuan City, was cut off on June 1, 1992 and May 28, 1992, respectively, and it was restored only on July 20 and August 24, 1992, respectively.Due to the foregoing, respondent filed with the Regional Trial Court (RTC) of Cebu City a complaint against petitioner, praying for payment of losses consisting of unrealized income in the amount of P1,864,500.00. He also prayed for payment of moral damages, exemplary damages, attorney's fees and litigation expenses.Respondent claimed that Check No. 275100 was a postdated check in payment of Bills of Lading Nos. 15, 16 and 17, and that his account with petitioner would have had sufficient funds to cover payment of the three other checks were it not for the
negligence of petitioner in immediately debiting from his account Check No. 275100, in the amount of P34,588.72, even as the said check was postdated to May 30, 1992. As a consequence of petitioner's error, which brought about the dishonor of the two checks paid to ASELCO and ANECO, the electric supply to his two mini-sawmills was cut off, the business operations thereof were stopped, and purchase orders were not duly served causing tremendous losses to him. In its defense, petitioner denied that the questioned check was postdated May 30, 1992 and claimed that it was a current check dated May 3, 1992. It alleged further that the disconnection of the electric supply to respondent's sawmills was not due to the dishonor of the checks, but for other reasons not attributable to the bank.After trial, the RTC, in its Decision[5] dated June 21, 1993, ruled in favor of petitioner and dismissed the complaint. Aggrieved by the Decision, respondent filed a Notice of Appeal.[6] In its Decision dated May 31, 2004, the Court of Appeals reversed the decision of the trial court and directed petitioner to pay respondent the sum of P1,864,500.00 as actual damages,P50,000.00 by way of moral damages, P50,000.00 as exemplary damages and attorney's fees in the amount of P30,000.00.Petitioner filed a motion for reconsideration, which the CA denied in a Resolution dated August 24, 2004.Hence, the instant petition assigning the following errors:
ITHE FOURTH DIVISION OF THE COURT OF APPEALS DEFIED OFFICE ORDER NO. 82-04-CG BY HOLDING ON TO THIS CASE AND DECIDING IT INSTEAD OF UNLOADING IT AND HAVING IT RE-RAFFLED AMONG THE DIVISIONS IN CEBU CITY.
IITHE COURT OF APPEALS ERRED IN REVERSING THE FINDING OF THE REGIONAL TRIAL COURT THAT CHECK NO. 275100 WAS DATED MAY 3, 1992.
III
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENT'S WAY OF WRITING THE DATE ON CHECK NO. 275100 WAS THE PROXIMATE CAUSE OF THE DISHONOR OF HIS THREE OTHER CHECKS.
IVTHE COURT OF APPEALS ERRED IN AWARDING ACTUAL DAMAGES, MORAL DAMAGES, EXEMPLARY DAMAGES AND ATTORNEY'S FEES.
Anent the first issue, petitioner submits that the CA defied Office Order No. 82-04-CG dated April 5, 2004 issued by then CA Presiding Justice Cancio C. Garcia when it failed to unload CA-G.R. CV No. 41928 so that it may be re-raffled among the Divisions in Cebu City. Office Order No. 82-04-CG[7] provides:
x x x x
In view of the reorganization of the different Divisions due to the appointment of eighteen (18) new Justices to the additional divisions in the cities of Cebu and Cagayan de Oro, the raffle of civil, criminal and special cases submitted for decision and falling within the jurisdiction of the additional divisions shall commence on April 6, 2004.
The raffle of newly-filed cases and those for completion likewise falling within the jurisdiction of the additional divisions, shall start on April 12, 2004.
x x x x
Petitioner alleged that since the aforementioned Office Order directed the raffle of civil, criminal and special cases submitted for decision and falling within the jurisdiction of the additional divisions on April 6, 2004, CA-G.R. CV No. 41928 should have been unloaded by the CA's Fourth Division and re-raffled to the CA's Division in Cebu City instead of deciding the case on May 31, 2004.Respondent argued that the CA's Fourth Division correctly acted in taking cognizance of the case. The CA defended its jurisdiction by ruling that cases already submitted for decision as of the effectivity of Republic Act (R.A.) 8246[8] on February 1, 1997 were no longer included for re-raffle to the newly-
created Visayas and Mindanao Divisions of the CA, conformable to Section 5 of the said statute.Petitioner's argument is misplaced. Under Section 3 of R.A. 8246, it is provided that:
Section 3. Section 10 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows:
Sec. 10. Place of Holding Sessions. The Court of Appeals shall have its permanent stations as follows: The first seventeen (17) divisions shall be stationed in the City of Manila for cases coming from the First to the Fifth Judicial Regions; the Eighteenth, Nineteenth, and Twentieth Divisions shall be in Cebu City for cases coming from the Sixth, Seventh and Eighth Judicial Regions; the Twenty-first, Twenty-second and Twenty-third Divisions shall be in Cagayan de Oro City for cases coming from the Ninth, Tenth, Eleventh, and Twelfth Judicial Regions. Whenever demanded by public interest, or whenever justified by an increase in case load, the Supreme Court, upon its own initiative or upon recommendation of the Presiding Justice of the Court of Appeals, may authorize any division of the Court to hold sessions periodically, or for such periods and at such places as the Supreme Court may determine, for the purpose of hearing and deciding cases. Trials or hearings in the Court of Appeals must be continuous and must be completed within three (3) months unless extended by the Chief Justice of the Supreme Court.
Further, Section 5 of the same Act provides:
Upon the effectivity of this Act, all pending cases, except those which have been submitted for resolution, shall be referred to the proper division of the Court of Appeals.[9]
Although CA-G.R. CV No. 41928 originated from Cebu City and is thus referable to the CA's Divisions in Cebu City, the said case was already submitted for decision as of July 25, 1994.[10] Hence, CA-G.R. CV No. 41928, which was already submitted for decision as of the effectivity of R.A. 8246, i.e., February 1, 1997, can no longer be referred to the CA's Division in Cebu City. Thus, the CA's Former Fourth Division correctly ruled that CA-G.R. CV No. 41928 pending in its division was not among those cases that had to be re-raffled to the newly-created CA Divisions in the Visayas Region.
Further, administrative issuances must not override, supplant or modify the law, but must remain consistent with the law they intend to carry out.[11] Thus, Office Order No. 82-04-CG cannot defeat the provisions of R.A. 8246. As to the second issue, petitioner maintains that the CA erred in reversing the finding of the RTC that Check No. 275100 was dated May 3, 1992. Petitioner argued that in arriving at the conclusion that Check No. 275100 was postdated May 30, 1992, the CA just made a visual examination of the check, unlike the RTC which verified the truth of respondent's testimony relative to the issuance of Check No. 275100. Respondent argued that the check was carefully examined by the CA which correctly found that Check No. 275100 was postdated to May 30, 1992 and not May 3, 1992.The 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. 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.[12] Due to the divergence of the findings of the CA and the RTC, We shall re-examine the facts and evidence presented before the lower courts. The RTC ruled that: x x x x
The issue to be resolved in this case is whether or not the date of PCIB Check No. 275100 is May 3, 1992 as contended by the defendant, or May 30, 1992 as claimed by the plaintiff. The date of the check is written as follows 5/3/0/92. From the manner by which the date of the check is written, the Court cannot really make a pronouncement as to whether the true date of the check is May 3 or May 30, 1992, without inquiring into the background facts leading to the issuance of said check.According to the plaintiff, the check was issued to Sulpicio Lines in payment of bill of lading nos. 15, 16 and 17. An examination of bill of lading no. 15, however, shows that the same was issued, not in favor of plaintiff but in favor of
Coca Cola Bottlers Philippines, Inc. Bill of Lading No. 16 is issued in favor of Suson Lumber and not to plaintiff. Likewise, Bill of Lading No. 17 shows that it was issued to Jazz Cola and not to plaintiff. Furthermore, the receipt for the payment of the freight for the shipments reflected in these three bills of lading shows that the freight was paid by Coca Cola Bottlers Philippines, Inc. and not by plaintiff.Moreover, the said receipt shows that it was paid in cash and not by check. From the foregoing, the evidence on record does not support the claim of the plaintiff that Check No. 275100 was issued in payment of bills of lading nos. 15, 16 and 17.Hence, the conclusion of the Court is that the date of the check was May 3, 1992 and not May 30, 1992.[13]
x x x x
In fine, the RTC concluded that the check was dated May 3, 1992 and not May 30, 1992, because the same check was not issued to pay for Bills of Lading Nos. 15, 16 and 17, as respondent claims. The trial court's conclusion is preposterous and illogical. The purpose for the issuance of the check has no logical connection with the date of the check. Besides, the trial court need not look into the purpose for which the check was issued. A reading of Check No. 275100[14] would readily show that it was dated May 30, 1992. As correctly observed by the CA:
On the first issue, we agree with appellant that appellee Bank apparently erred in misappreciating the date of Check No. 275100.We have carefully examined the check in question (Exh. DDDD) and we are convinced that it was indeed postdated to May 30, 1992 and not May 3, 1992 as urged by appellee. The date written on the check clearly appears as 5/30/1992 (Exh. DDDD-4). The first bar (/) which separates the numbers 5 and 30 and the second bar (/) which further separates the number 30 from the year 1992 appear to have been done in heavy, well-defined and bold strokes, clearly indicating the date of the check as 5/30/1992 which obviously means May 30, 1992. On the other hand, the alleged bar (/) which appellee points out as allegedly separating the numbers 3 and 0, thereby leading it to read the date as May 3, 1992, is not actually a bar or a slant but appears to be more of an unintentional marking or line done with a very light stroke. The presence of the figure 0 after the number 3 is quite significant. In fact, a close examination thereof would unerringly show that the said number zero or 0 is connected to the preceeding number 3. In other words, the drawer of the check wrote the figures 30 in one continuous stroke, thereby contradicting appellees theory that the number 3 is separated from the figure 0 by a bar. Besides, appellees theory that the date of the check is May 3, 1992 is clearly untenable considering the presence of the figure 0 after 3 and another bar before the year 1992. And if we were to accept appellees theory that what we find to be an unintentional mark or line between the figures 3 and 0 is a bar separating the two
numbers, the date of the check would then appear as 5/3/0/1992, which is simply absurd. Hence, we cannot go along with appellees theory which will lead us to an absurd result. It is therefore our conclusion that the check was postdated to May 30, 1992 and appellee Bank or its personnel erred in debiting the amount of the check from appellants account even before the checks due date. Undoubtedly, had not appellee bank prematurely debited the amount of the check from appellants account before its due date, the two other checks (Exhs. LLLL and GGGG) successively dated May 9, 1992 and May 16, 1992 which were paid by appellant to ASELCO and ANECO, respectively, would not have been dishonored and the said payees would not have disconnected their supply of electric power to appellants sawmills, and the latter would not have suffered losses.
The law imposes on banks high standards in view of the fiduciary nature of banking. Section 2 of R.A. 8791[15] decrees:
Declaration of Policy. The State recognizes the vital role of banks in providing an environment conducive to the sustained development of the national economy and the fiduciary nature of banking that requires high standards of integrity and performance. In furtherance thereof, the State shall promote and maintain a stable and efficient banking and financial system that is globally competitive, dynamic and responsive to the demands of a developing economy.
Although R.A. 8791 took effect only in the year 2000, the Court had already imposed on banks the same high standard of diligence required under R.A. 8791 at the time of the untimely debiting of respondent's account by petitioner in May 1992. InSimex International (Manila), Inc. v. Court of Appeals,[16] which was decided in 1990, the Court held that as a business affected with public interest and because of the nature of its functions, the bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. The diligence required of banks, therefore, is more than that of a good father of a family.[17] In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to reflect at any given time the amount of money the depositor can dispose of as he sees fit, confident that the bank will deliver it as and to whomever he directs.
[18] From the foregoing, it is clear that petitioner bank did not exercise the degree of diligence that it ought to have exercised in dealing with its client.With respect to the third issue, petitioner submits that respondent's way of writing the date on Check No. 275100 was the proximate cause of the dishonor of his three other checks. Contrary to petitioners view, the Court finds that its negligence is the proximate cause of respondents loss. Proximate cause is that cause which, in a natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred.[19] The proximate cause of the loss is not respondent's manner of writing the date of the check, as it was very clear that he intended Check No. 275100 to be dated May 30, 1992 and not May 3, 1992. The proximate cause is petitioners own negligence in debiting the account of the respondent prior to the date as appearing in the check, which resulted in the subsequent dishonor of several checks issued by the respondent and the disconnection by ASELCO and ANECO of his electric supply. The bank on which the check is drawn, known as the drawee bank, is under strict liability to pay to the order of the payee in accordance with the drawers instructions as reflected on the face and by the terms of the check.[20] Thus, payment made before the date specified by the drawer is clearly against the drawee bank's duty to its client. In its memorandum[21] filed before the RTC, petitioner submits that respondent caused confusion on the true date of the check by writing the date of the check as 5/3/0/92. If, indeed, petitioner was confused on whether the check was dated May 3 or May 30 because of the / which allegedly separated the number 3 from the 0, petitioner should have required respondent drawer to countersign the said / in order to ascertain the true intent of the drawer before honoring the check. As a matter of practice, bank tellers would not receive nor honor such checks which they believe
to be unclear, without the counter-signature of its drawer. Petitioner should have exercised the highest degree of diligence required of it by ascertaining from the respondent the accuracy of the entries therein, in order to settle the confusion, instead of proceeding to honor and receive the check. Further, petitioner's branch manager, Pedro D. Tradio, in a letter [22] addressed to ANECO, explained the circumstances surrounding the dishonor of PCIB Check No. 275097. Thus:
June 11, 1992 ANECOAgusan del Norte Gentlemen: This refer (sic) to PCIB Check No. 275097 dated May 16, 1992 in the amount of P6,472.01 payable to your goodselves issued by Mr. Arcelito B. Tan (MANWOOD Industries) which was returned by PCIB Mandaue Branch for insufficiency of funds. Please be advised that the return of the aforesaid check was a result of an earlier negotiation to PCIB-Mandaue Branch through a deposit made on May 14, 1992 with SOLIDBANK Carbon Branch, or through Central Bank clearing via Philippine Clearing House Corporation facilities, of a postdated check which ironically and without bad faith passed undetected through several eyes from the payee of the check down to the depository bank and finally the drawee bank (PCIB) the aforesaid Check No. 275097 issued to you would have been honored because it would have been sufficiently funded at the time it was negotiated. It should be emphasized, however, that Mr. Arcelito B. Tan was in no way responsible for the dishonor of said PCIB Check No. 275097.We hope that the foregoing will sufficiently explain the circumstances of the dishonor of PCIB Check No. 275097 and would clear the name and credit of Mr. Arcelito Tan from any misimpressions which may have resulted from the dishonor of said check. Thank you.
x x x x
Although petitioner failed to specify in the letter the other details of this postdated check, which passed undetected from the eyes of the payee down to the petitioner drawee bank, the Court finds that petitioner was evidently referring to no other than Check No. 275100 which was deposited to Solidbank, and was postdated May 30, 1992. As correctly found by the CA:
In the aforequoted letter of its Manager, appellee Bank expressly acknowledged that Check No. 275097 (Exh. GGGG) which appellant paid to ANECO was sufficiently funded at the time it was negotiated, but it was dishonored as a result of an earlier negotiation to PCIB-Mandaue Branch through a deposit made on May 14, 1992 with SOLIDBANK xxx xxx xxx of a postdated check which xxx xxx passed undetected. He further admitted that Mr. Arcelito B. Tan was in no way responsible for the dishonor of said PCIB Check No. 275097. Needless to state, since appellee's Manager has cleared appellant of any fault in the dishonor of the ANECO check, it [necessarily] follows that responsibility therefor or fault for the dishonor of the check should fall on appellee bank. Appellee's attempt to extricate itself from its inadvertence must therefore fail in the face of its Manager's explicit acknowledgment of responsibility for the inadvertent dishonor of the ANECO check.[23]
Evidently, the bank's negligence was the result of lack of due care required of its managers and employees in handling the accounts of its clients. Petitioner was negligent in the selection and supervision of its employees. In Citibank, N.A. v. Cabamongan,[24] the Court ruled:
x x x Banks handle daily transactions involving millions of pesos. By the very nature of their works the degree of responsibility, care and trustworthiness expected of their employees and officials is far greater than those of ordinary clerks and employees. Banks are expected to exercise the highest degree of diligence in the selection and supervision of their employees.
We now resolve the question on the award of actual, moral and exemplary damages, as well as attorney's fees by the CA to the respondent.The CA based the award of actual damages in the amount of P1,864,500.00 on the purchase orders[25] submitted by respondent. The CA ruled that:
x x x In the case at bar, appellant [respondent herein] presented adequate evidence to prove losses consisting of unrealized income that he sustained as a result of the appellee Bank's gross negligence. Appellant identified certain Purchase Orders from various customers which were not met by reason of the disruption of the operation of his sawmills when ANECO and ASELCO disconnected their supply of electricity thereto. x x x
Actual or compensatory damages are those awarded in order to compensate a party for an injury or loss he suffered. They arise out of a sense of natural justice and are aimed at repairing the wrong done. Except as provided by law or by stipulation, a party is entitled to an adequate compensation only for such pecuniary loss as he has duly proven.[26] To recover actual damages, not only must the amount of loss be capable of proof; it must also be actually proven with a reasonable degree of certainty, premised upon competent proof or the best evidence obtainable.[27]
Respondent's claim for damages was based on purchase orders from various customers which were allegedly not met due to the disruption of the operation of his sawmills. However, aside from the purchase orders and his testimony, respondent failed to present competent proof on the specific amount of actual damages he suffered during the entire period his power was cut off. No other evidence was provided by respondent to show that the foregoing purchase orders were not met or were canceled by his various customers. The Court cannot simply rely on speculation, conjecture or guesswork in determining the amount of damages.[28]
Moreover, an examination of the purchase orders and job orders reveal that the orders were due for delivery prior to the period when the power supply of respondent's two sawmills was cut off on June 1, 1992 to July 20, 1992 and May 28, 1992 to August 24, 1992, respectively. Purchase Order No. 9906[29] delivery date is May 4, 1992; Purchase Order No. 9269[30]delivery date is March 19, 1992; Purchase Order No. 147796[31] is due for delivery on January 31, 1992; Purchase Order No. 76000[32] delivery date is February and March 1992; and Job Order No. 1824,[33] dated March 18, 1992, has a 15 days duration of work. Clearly, the
disconnection of his electricity during the period May 28, 1992 to August 24, 1992 could not possibly affect his sawmill operations and prior orders therefrom. Given the dearth of respondent's evidence on the matter, the Court resolves to delete the award of actual damages rendered by the CA in favor of respondent for his unrealized income. Nonetheless, in the absence of competent proof on the actual damages suffered, respondent is entitled to temperate damages.Under Article 2224 of the Civil Code of the Philippines, temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty.[34] The allowance of temperate damages when actual damages were not adequately proven is ultimately a rule drawn from equity, the principle affording relief to those definitely injured who are unable to prove how definite the injury.[35]
It is apparent that respondent suffered pecuniary loss. The negligence of petitioner triggered the disconnection of his electrical supply, which temporarily halted his business operations and the consequent loss of business opportunity. However, due to the insufficiency of evidence before Us, We cannot place its amount with certainty. Article 2216[36] of the Civil Code instructs that assessment of damages is left to the discretion of the court according to the circumstances of each case. Under the circumstances, the sum of P50,000.00 as temperate damages is reasonable.
Anent the award of moral damages, it is settled that moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused.[37] In Philippine National Bank v. Court of Appeals,[38] the Court held that a bank is under obligation to treat the accounts of its
depositors with meticulous care whether such account consists only of a few hundred pesos or of millions of pesos. Responsibility arising from negligence in the performance of every kind of obligation is demandable. While petitioner's negligence in that case may not have been attended with malice and bad faith, the banks' negligence caused respondent to suffer mental anguish, serious anxiety, embarrassment and humiliation. In said case, We ruled that respondent therein was entitled to recover reasonable moral damages. In this case, the unexpected cutting off of respondent's electricity, which resulted in the stoppage of his business operations, had caused him to suffer humiliation, mental anguish and serious anxiety. The award of P50,000.00 is reasonable, considering the reputation and social standing of respondent. As found by the CA, as an accredited supplier, respondent had been reposed with a certain degree of trust by various reputable and well- established corporations. On the award of exemplary damages, Article 2229 of the Civil Code states:
Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to themoral, temperate, liquidated or compensatory damages.
The law allows the grant of exemplary damages to set an example for the public good. The banking system has become an indispensable institution in the modern world and plays a vital role in the economic life of every civilized society. Whether as mere passive entities for the safekeeping and saving of money or as active instruments of business and commerce, banks have attained an ubiquitous presence among the people, who have come to regard them with respect and even gratitude and most of all, confidence. For this reason, banks should guard against injury attributable to negligence or bad faith on its part. Without a doubt, it has been repeatedly emphasized that since the banking business is impressed with public interest, of paramount importance thereto is the trust and confidence of the public in general. Consequently, the highest degree of diligence is expected, and high
standards of integrity and performance are even required of it.[39] Petitioner, having failed in this respect, the award of exemplary damages in the amount of P50,000.00 is in order. As to the award of attorney's fees, Article 2208[40] of the Civil Code provides, among others, that attorney's fees may be recovered when exemplary damages are awarded or when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest.[41] Respondent has been forced to undergo unnecessary trouble and expense to protect his interest. The Court affirms the appellate courts award of attorneys fees in the amount of P30,000.00.
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 41928, dated May 31, 2004 and August 24, 2004, respectively, are AFFIRMED with the followingMODIFICATIONS:
1. The award of One Million Eight Hundred Sixty-Four Thousand and Five Hundred Pesos (P1,864,500.00) as actual damages, in favor of respondent Arcelito B. Tan, is DELETED; and2. Petitioner Equitable PCI Bank is instead directed to pay respondent the amount of Fifty Thousand Pesos (P50,000.00) astemperate damages.SO ORDERED.
G.R. No. 173259 July 25, 2011
Philippine National Bank, petitioner vs.F.F. CRUZ and CO., INC., respondent,
PHILIPPINE NATIONAL BANK, G.R. No. 173259Petitioner,
Present: CORONA, C.J., Chairperson,- versus - LEONARDO-DE CASTRO, BERSAMIN, DEL CASTILLO, and VILLARAMA, JR., JJ. F.F. CRUZ and CO., INC. Promulgated:
As between a bank and its depositor, where the banks negligence is the proximate cause of the loss and the depositor is guilty of contributory negligence, the greater proportion of the loss shall be borne by the bank.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of
Appeals January 31, 2006 Decision[1] in CA-G.R. CV No. 81349, which modified the
January 30, 2004 Decision[2] of the Regional Trial Court of Manila City, Branch 46 in Civil Case No. 97-84010, and the June 26, 2006 Resolution[3] denying petitioners motion for reconsideration. Factual Antecedents
The antecedents are aptly summarized by the appellate court:
In its complaint, it is alleged that [respondent F.F. Cruz & Co., Inc.] (hereinafter FFCCI) opened savings/current or so-called combo account No. 0219-830-146 and dollar savings account No. 0219-0502-458-6 with [petitioner Philippine National Bank] (hereinafter PNB) at its Timog Avenue Branch. Its President Felipe Cruz (or Felipe) and Secretary-Treasurer Angelita A. Cruz (or Angelita) were the named signatories for the said accounts.
The said signatories on separate but coeval dates left for and returned
from the Unites States of America, Felipe on March 18, 1995 until June 10, 1995 while Angelita followed him on March 29, 1995 and returned ahead on May 9, 1995.
While they were thus out of the country, applications for cashiers and
managers [checks] bearing Felipes [signature] were presented to and both approved by the PNB. The first was on March 27, 1995 for P9,950,000.00 payable to a certain Gene B. Sangalang and the other one was on April 24, 1995 for P3,260,500.31 payable to one Paul Bautista. The amounts of these checks were then debited by the PNB against the combo account of [FFCCI].
When Angelita returned to the country, she had occasion to examine
the PNB statements of account of [FFCCI] for the months of February to August 1995 and she noticed the deductions of P9,950,000.00 and P3,260,500.31. Claiming that these were unauthorized and fraudulently made, [FFCCI] requested PNB to credit back and restore to its account the value of the checks. PNB refused, and thus constrained [FFCCI] filed the instant suit for damages against the PNB and its own accountant Aurea Caparas (or Caparas).
In its traverse, PNB averred lack of cause of action. It alleged that it
exercised due diligence in handling the account of [FFCCI]. The applications for managers check have passed through the standard bank procedures and it
was only after finding no infirmity that these were given due course. In fact, it was no less than Caparas, the accountant of [FFCCI], who confirmed the regularity of the transaction. The delay of [FFCCI] in picking up and going over the bank statements was the proximate cause of its self-proclaimed injury. Had [FFCCI] been conscientious in this regard, the alleged chicanery would have been detected early on and Caparas effectively prevented from absconding with its millions. It prayed for the dismissal of the complaint.[4]
Regional Trial Courts Ruling The trial court ruled that F.F. Cruz and Company, Inc. ( FFCCI) was guilty of
negligence in clothing Aurea Caparas (Caparas) with authority to make decisions on and dispositions of its account which paved the way for the fraudulent transactions perpetrated by Caparas; that, in practice, FFCCI waived the two-signature requirement in transactions involving the subject combo account so much so that Philippine National Bank (PNB) could not be faulted for honoring the applications for managers check even if only the signature of Felipe Cruz appeared thereon; and that FFCCI was negligent in not immediately informing PNB of the fraud.
On the other hand, the trial court found that PNB was, likewise, negligent in not
calling or personally verifying from the authorized signatories the legitimacy of the subject withdrawals considering that they were in huge amounts. For this reason, PNB had the last clear chance to prevent the unauthorized debits from FFCCIs combo account. Thus, PNB should bear the whole loss
WHEREFORE, judgment is hereby rendered ordering defendant
[PNB] to pay plaintiff [FFCCI] P13,210,500.31 representing the amounts debited against plaintiffs account, with interest at the legal rate computed from the filing of the complaint plus costs of suit.
IT IS SO ORDERED.[5]
Court of Appeals Ruling On January 31, 2006, the CA rendered the assailed Decision affirming with modification the Decision of the trial court, viz:
WHEREFORE, the appealed Decision is AFFIRMED with the MODIFICATION that [PNB] shall pay [FFCCI] only 60% of the actual damages awarded by the trial court while the remaining 40% shall be borne by [FFCCI]. SO ORDERED.[6]
The appellate court ruled that PNB was negligent in not properly verifying the genuineness of the signatures appearing on the two applications for managers check as evidenced by the lack of the signature of the bank verifier thereon. Had this procedure been followed, the forgery would have been detected.
Nonetheless, the appellate court found FFCCI guilty of contributory negligence because it clothed its accountant/bookkeeper Caparas with apparent authority to transact business with PNB. In addition, FFCCI failed to timely examine its monthly statement of account and report the discrepancy to PNB within a reasonable period of time to prevent or recover the loss. FFCCIs contributory negligence, thus, mitigated the banks liability. Pursuant to the rulings in Philippine Bank of Commerce v. Court of Appeals[7] and The Consolidated Bank & Trust Corporation v. Court of Appeals,[8] the appellate court allocated the damages on a 60-40 ratio with the bigger share to be borne by PNB. From this decision, both FFCCI and PNB sought review before this Court. On August 17, 2006, FFCCI filed its petition for review on certiorari which was docketed as G.R. No. 173278.[9] On March 7, 2007, the Court issued a Resolution[10] denying said petition. On June 13, 2007, the Court issued another Resolution[11] denying FFCCIs motion for reconsideration. In denying the aforesaid petition, the Court ruled that FFCCI essentially raises questions of fact which are, as a rule, not reviewable under a Rule 45 petition; that FFCCI failed to show that its case fell within the established exceptions to this rule; and that FFCCI was guilty of contributory negligence. Thus, the appellate court correctly mitigated PNBs liability.
On July 13, 2006, PNB filed its petition for review on certiorari which is the subject matter of this case.
Issue
Whether the Court of Appeals seriously erred when it found PNB guilty of
negligence.[12]
Our Ruling
We affirm the ruling of the CA. PNB is guilty of negligence.
Preliminarily, in G.R. No. 173278, we resolved with finality[13] that FFCCI is guilty of contributory negligence, thus, making it partly liable for the loss (i.e., as to 40% thereof) arising from the unauthorized withdrawal of P13,210,500.31 from its combo account. The case before us is, thus, limited to PNBs alleged negligence in the subject transactions which the appellate court found to be the proximate cause of the loss, thus, making it liable for the greater part of the loss (i.e., as to 60% thereof) pursuant to our rulings inPhilippine Bank of Commerce v. Court of Appeals[14] and The Consolidated Bank & Trust Corporation v. Court of Appeals.[15]
PNB contends that it was not negligent in verifying the genuineness of the
signatures appearing on the subject applications for managers check. It claims that it followed the standard operating procedure in the verification process and that four bank officers examined the signatures and found the same to be similar with those found in the signature cards of FFCCIs authorized signatories on file with the bank.
PNB raises factual issues which are generally not proper for review under a Rule
45 petition. While there are exceptions to this rule, we find none applicable to the present case. As correctly found by the appellate court, PNB failed to make the proper verification because the applications for the managers check do not bear the signature of the bank verifier. PNB concedes the absence[16] of the subject signature but argues that the same was the result of inadvertence. It posits that the testimonies of Geronimo Gallego (Gallego), then the branch manager of PNB Timog Branch, and Stella San Diego (San Diego), then branch cashier, suffice to establish that the signature verification process was duly followed.
We are not persuaded. First, oral testimony is not as reliable as documentary evidence.[17] Second, PNBs
own witness, San Diego, testified that in the verification process, the principal duty to determine the genuineness of the signature devolved upon the account analyst.[18] However, PNB did not present the account analyst to explain his or her failure to sign the box for signature and balance verification of the subject applications for managers check, thus, casting doubt as to whether he or she did indeed verify the signatures thereon. Third, we cannot fault the appellate court for not giving weight to the testimonies of Gallego and San Diego considering that the latter are naturally interested in exculpating themselves from any liability arising from the failure to detect the forgeries in the subject transactions. Fourth, Gallego admitted that PNBs employees received training on detecting forgeries from the National Bureau of Investigation.[19]However, Emmanuel Guzman, then NBI senior document examiner, testified, as an expert witness, that the forged signatures in the subject applications for managers check contained noticeable and significant differences from the genuine signatures of FFCCIs authorized signatories and that the forgeries should have been detected or observed by a trained signature verifier of any bank.[20]
Given the foregoing, we find no reversible error in the findings of the appellate
court that PNB was negligent in the handling of FFCCIs combo account, specifically, with respect to PNBs failure to detect the forgeries in the subject applications for managers check which could have prevented the loss. As we have often ruled, the banking business is impressed with public trust.[21] A higher degree of diligence is imposed on banks relative to the handling of their affairs than that of an ordinary business enterprise.[22] Thus, the degree of responsibility, care and trustworthiness expected of their officials and employees is far greater than those of ordinary officers and employees in other enterprises.[23] In the case at bar, PNB failed to meet the high standard of diligence required by the circumstances to prevent the fraud. In Philippine Bank of Commerce v. Court of Appeals[24] and The Consolidated Bank & Trust Corporation v. Court of Appeals,[25] where the banks negligence is the proximate cause of the loss and the depositor is guilty of contributory negligence, we allocated the damages between the bank and the depositor on a 60-40 ratio. We apply the same ruling in this case considering that, as shown above, PNBs negligence is the proximate cause of the loss while the issue as to FFCCIs contributory negligence has been settled with finality in
G.R. No. 173278. Thus, the appellate court properly adjudged PNB to bear the greater part of the loss consistent with these rulings.
WHEREFORE, the petition is DENIED. The January 31, 2006 Decision and
June 26, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 81349 are AFFIRMED.
Costs against petitioner. SO ORDERED.
Gonzales vs PCIBFacts:
Gonzales was a client of PCIB. He was granted a credit line by the bank through a Credit-On-Hand-Loan Agreement (COHLA). He drew from the credit line through a check and said credit line was secured by a collateral in the form of his accounts with PCIB which was a foreign currency deposit worth USD 8000.
He obtained below loans from PCIB:1. obtained with his wife – P500K2. obtained with spouses Panlilio – P1M, P300K
the above loans (total: 1.8M) were covered by 3 promissory notes and were secured by a real estage mortgage on a land co owned by Gonzales and spouses Panlilio. the promissory notes states the solidary liability of Gonzales andspouses Panlilio. However, it was the spouses Panlilio who received the proceeds of 1.8M. The monthly interest dues were paid by the spouses Panlilio through auto debit from their PCIB account. however, they defaulted in the payment because their PCIB account had insufficient deposits.
Gonzales issued a check to Rene Unson worth 250K drawn against his credit line but said check was subsequently dishonored due to termination of gonzales’ credit line because of the unpaid period interest dues from the loans. PCIB also froze the foreign currency deposit account of Gonzales.
Issue: W/N Gonzales is liable for the three promissory notes covering PHP1.8M loan he made with spouses Panlilio?
Held:
Yes. Gonzales was an accommodation party of the loan. An accommodation party is one who meets all the three requisites according to Sec 29 of NIL:
1. he must be a party to the instrument, signing as a maker, drawer, acceptor, or indorser
2. he must not receive value therefor
3. he must sign for the purpose of lending his name or credit to some other person.
an accommodation party lends his name to enable the accommodated partyy to obtain credit or raise money. he receives no part but assumed liability.
the relation between an accommodation party is one of principal and surety, the AP being the surety. As such, he is deemed an original promisor and debtor from the beginning. he is considered in law as the same party as the debtor in relation to whatever is adjudged toruching the obligation of the latter since their liabilities are interwoven.
Lastly, the solidary nature of the loan was expressly stated in the promissory notes which state:“…the undersigned JOINTLY AND SEVERALLY promise to pay xx”.
ILUSORIO V. COURT OF APPEALSGR No. 139130, NOVEMBER 27, 2002
Facts:Illusorio is a client-depositor of Manila Baking Corporation. He alleges that the bank was negligent in taking
care of his bank deposits because his secretary, Katherine Esteban, was able to withdraw around P119,000 and
transfer it to her own bank account. Esteban was able to do this because, as Illusorio’s secretary, she was entrusted
with his check books and credit cards whenever he leaves the country.
However, Manila Banking avers that it exercised due diligence in dealing with the withdrawals made by Esteban.
Issue:Whether or not Manila Banking was negligent in handling the account of Illusorio.
Held:No, in fact it was Illusorio who is guilty of negligence. Negligence is the omission to do something which a
reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or
the doing of something which a prudent and reasonable man would do. In the present case, it appears that petitioner
accorded his secretary unusual degree of trust and unrestricted access to his credit cards, passbooks, check books,
bank statements, including custody and possession of cancelled checks and reconciliation of accounts.
Petitioner’s failure to examine his bank statements appears as the proximate cause of his own damage. Proximate
cause is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would not have occurred. In the instant case, the bank was not
shown to be remiss in its duty of sending monthly bank statements to petitioner so that any error or discrepancy in the
entries therein could be brought to the bank’s attention at the earliest opportunity. But, petitioner failed to examine
these bank statements not because he was prevented by some cause in not doing so, but because he did not pay
sufficient attention to the matter. Had he done so, he could have been alerted to any anomaly committed against him.
G.R. No. 159132 December 18, 2008
FE CAYAO-LASAM, petitioner, vs.SPOUSES CLARO and EDITHA RAMOLETE, respondents.*
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by Dr. Fe Cayao-Lasam (petitioner) seeking to annul the Decision1 dated July 4, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 62206.
The antecedent facts:
On July 28, 1994, respondent, three months pregnant Editha Ramolete (Editha) was brought to the Lorma Medical Center (LMC) in San Fernando, La Union due to vaginal bleeding. Upon advice of petitioner relayed via telephone, Editha was admitted to the LMC on the same day. A pelvic sonogram2 was then conducted on Editha revealing the fetus’ weak cardiac pulsation.3 The following day, Editha’s repeat pelvic sonogram4 showed that aside from the fetus’ weak cardiac pulsation, no fetal movement was also appreciated. Due to persistent and profuse vaginal bleeding, petitioner advised Editha to undergo a Dilatation and Curettage Procedure (D&C) or "raspa."
On July 30, 1994, petitioner performed the D&C procedure. Editha was discharged from the hospital the following day.
On September 16, 1994, Editha was once again brought at the LMC, as she was suffering from vomiting and severe abdominal pains. Editha was attended by Dr. Beatriz de la Cruz, Dr. Victor B. Mayo and Dr. Juan V. Komiya. Dr. Mayo allegedly informed Editha that there was a dead fetus in the latter’s womb. After, Editha underwent laparotomy,5 she was found to have a massive intra-abdominal hemorrhage and a ruptured uterus. Thus, Editha had to undergo a procedure for hysterectomy6 and as a result, she has no more chance to bear a child.
On November 7, 1994, Editha and her husband Claro Ramolete (respondents) filed a Complaint7 for Gross Negligence and Malpractice against petitioner before the Professional Regulations Commission (PRC).
Respondents alleged that Editha’s hysterectomy was caused by petitioner’s unmitigated negligence and professional incompetence in conducting the D&C procedure and the petitioner’s failure to remove the fetus inside Editha’s womb.8 Among the alleged acts of negligence were: first, petitioner’s failure to check up, visit or administer medication on Editha during her first day of confinement at the LMC;9 second, petitioner recommended that a D&C procedure be performed on Editha without conducting any internal examination prior to the procedure;10 third, petitioner immediately suggested a D&C procedure instead of closely monitoring the state of pregnancy of Editha.11
In her Answer,12 petitioner denied the allegations of negligence and incompetence with the following explanations: upon Editha’s confirmation that she would seek admission at the LMC, petitioner immediately called the hospital to anticipate the arrival of Editha and ordered through the telephone the medicines Editha needed to take, which the nurses carried out; petitioner visited Editha on the morning of July 28, 1994 during her rounds; on July 29, 1994, she performed an internal examination on Editha and she discovered that the latter’s cervix was already open, thus, petitioner discussed the possible D&C procedure, should the bleeding become more profuse; on July 30 1994, she conducted another internal examination on Editha, which revealed that the latter’s cervix was still open; Editha persistently complained of her vaginal bleeding and her passing out of some meaty mass in the process of urination and bowel movement; thus, petitioner advised Editha to undergo D&C procedure which the respondents consented to; petitioner was very vocal in the operating room about not being able to see an abortus;13 taking the words of Editha to mean that she was passing out some meaty mass and clotted blood, she assumed that the abortus must have been expelled in the process of bleeding; it was Editha who insisted that she wanted to be discharged; petitioner agreed, but she advised Editha to return for check-up on August 5, 1994, which the latter failed to do.
Petitioner contended that it was Editha’s gross negligence and/or omission in insisting to be discharged on July 31, 1994 against doctor’s advice and her unjustified failure to return for check-up as directed by petitioner that contributed to her life-threatening condition on September 16, 1994; that Editha’s hysterectomy was brought about by her very abnormal pregnancy known as placenta increta, which was an extremely rare and very unusual case of abdominal placental implantation. Petitioner argued that whether or not a D&C procedure was done by her or any other doctor, there would be no difference at all because at any stage of gestation before term, the uterus would rupture just the same.
On March 4, 1999, the Board of Medicine (the Board) of the PRC rendered a Decision,14 exonerating petitioner from the charges filed against her. The Board held:
Based on the findings of the doctors who conducted the laparotomy on Editha, hers is a case of Ectopic Pregnancy Interstitial. This type of ectopic pregnancy is one that is being
protected by the uterine muscles and manifestations may take later than four (4) months and only attributes to two percent (2%) of ectopic pregnancy cases.
When complainant Editha was admitted at Lorma Medical Center on July 28, 1994 due to vaginal bleeding, an ultra-sound was performed upon her and the result of the Sonogram Test reveals a morbid fetus but did not specify where the fetus was located. Obstetricians will assume that the pregnancy is within the uterus unless so specified by the Sonologist who conducted the ultra-sound. Respondent (Dr. Lasam) cannot be faulted if she was not able to determine that complainant Editha is having an ectopic pregnancy interstitial. The D&C conducted on Editha is necessary considering that her cervix is already open and so as to stop the profuse bleeding. Simple curettage cannot remove a fetus if the patient is having an ectopic pregnancy, since ectopic pregnancy is pregnancy conceived outside the uterus and curettage is done only within the uterus. Therefore, a more extensive operation needed in this case of pregnancy in order to remove the fetus.15
Feeling aggrieved, respondents went to the PRC on appeal. On November 22, 2000, the PRC rendered a Decision16 reversing the findings of the Board and revoking petitioner’s authority or license to practice her profession as a physician.17
Petitioner brought the matter to the CA in a Petition for Review under Rule 43 of the Rules of Court. Petitioner also dubbed her petition as one for certiorari18 under Rule 65 of the Rules of Court.
In the Decision dated July 4, 2003, the CA held that the Petition for Review under Rule 43 of the Rules of Court was an improper remedy, as the enumeration of the quasi-judicial agencies in Rule 43 is exclusive.19 PRC is not among the quasi-judicial bodies whose judgment or final orders are subject of a petition for review to the CA, thus, the petition for review of the PRC Decision, filed at the CA, was improper. The CA further held that should the petition be treated as a petition for certiorari under Rule 65, the same would still be dismissed for being improper and premature. Citing Section 2620 of Republic Act (R.A.) No. 2382 or the Medical Act of 1959, the CA held that the plain, speedy and adequate remedy under the ordinary course of law which petitioner should have availed herself of was to appeal to the Office of the President.21
Hence, herein petition, assailing the decision of the CA on the following grounds:
1. THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN HOLDING THAT THE PROFESSIONAL REGULATION[S] COMMISSION (PRC) WAS EXCLUDED AMONG THE QUASI-JUDICIAL AGENCIES CONTEMPLATED UNDER RULE 43 OF THE RULES OF CIVIL PROCEDURE;
2. EVEN ASSUMING, ARGUENDO, THAT PRC WAS EXCLUDED FROM THE PURVIEW OF RULE 43 OF THE RULES OF CIVIL PROCEDURE, THE PETITIONER WAS NOT PRECLUDED FROM FILING A PETITION FOR CERTIORARI WHERE THE DECISION WAS ALSO ISSUED IN EXCESS OF OR WITHOUT JURISDICTION, OR WHERE THE DECISION WAS A PATENT NULLITY;
3. HEREIN RESPONDENTS-SPOUSES ARE NOT ALLOWED BY LAW TO APPEAL FROM THE DECISION OF THE BOARD OF MEDICINE TO THE PROFESSIONAL REGULATION[S] COMMISSION;
4. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING FOR IMPROPER FORUM THE PETITION FOR REVIEW/PETITION FOR
CERTIORARI WITHOUT GOING OVER THE MERITS OF THE GROUNDS RELIED UPON BY THE PETITIONER;
5. PRC’S GRAVE OMISSION TO AFFORD HEREIN PETITONER A CHANCE TO BE HEARD ON APPEAL IS A CLEAR VIOLATION OF HER CONSTITUTIONAL RIGHT TO DUE PROCESS AND HAS THE EFFECT OF RENDERING THE JUDGMENT NULL AND VOID;
6. COROLLARY TO THE FOURTH ASSIGNED ERROR, PRC COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF JURISDICTION, IN ACCEPTING AND CONSIDERING THE MEMORANDUM ON APPEAL WITHOUT PROOF OF SERVICE TO HEREIN PETITIONER, AND IN VIOLATION OF ART. IV, SEC. 35 OF THE RULES AND REGULATIONS GOVERNING THE REGULATION AND PRACTICE OF PROFESSIONALS;
7. PRC COMMITTED GRAVE ABUSE OF DISCRETION IN REVOKING PETITIONER’S LICENSE TO PRACTICE MEDICINE WITHOUT AN EXPERT TESTIMONY TO SUPPORT ITS CONCLUSION AS TO THE CAUSE OF RESPONDENT EDITHAT [SIC] RAMOLETE’S INJURY;
8. PRC COMMITTED AN EVEN GRAVER ABUSE OF DISCRETION IN TOTALLY DISREGARDING THE FINDING OF THE BOARD OF MEDICINE, WHICH HAD THE NECESSARY COMPETENCE AND EXPERTISE TO ESTABLISH THE CAUSE OF RESPONDENT EDITHA’S INJURY, AS WELL AS THE TESTIMONY OF THE EXPERT WITNESS AUGUSTO MANALO, M.D. ;[and]
9. PRC COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING CONCLUSIONS OF FACTS THAT WERE NOT ONLY UNSUPPORTED BY EVIDENCE BUT WERE ACTUALLY CONTRARY TO EVIDENCE ON RECORD.22
The Court will first deal with the procedural issues.
Petitioner claims that the law does not allow complainants to appeal to the PRC from the decision of the Board. She invokes Article IV, Section 35 of the Rules and Regulations Governing the Regulation and Practice of Professionals, which provides:
Sec. 35. The respondent may appeal the decision of the Board within thirty days from receipt thereof to the Commission whose decision shall be final. Complainant, when allowed by law, may interpose an appeal from the Decision of the Board within the same period. (Emphasis supplied)
Petitioner asserts that a careful reading of the above law indicates that while the respondent, as a matter of right, may appeal the Decision of the Board to the Commission, the complainant may interpose an appeal from the decision of the Board only when so allowed by law.23 Petitioner cited Section 26 of Republic Act No. 2382 or "The Medical Act of 1959," to wit:
Section 26. Appeal from judgment. The decision of the Board of Medical Examiners (now Medical Board) shall automatically become final thirty days after the date of its promulgation unless the respondent, during the same period, has appealed to the Commissioner of Civil Service (now Professional Regulations Commission) and later to the Office of the President of the Philippines. If the final decision is not satisfactory, the respondent may ask for a review of the case, or may file in court a petition for certiorari.
Petitioner posits that the reason why the Medical Act of 1959 allows only the respondent in an administrative case to file an appeal with the Commission while the complainant is not allowed to do so is double jeopardy. Petitioner is of the belief that the revocation of license to practice a profession is penal in nature.24
The Court does not agree.
For one, the principle of double jeopardy finds no application in administrative cases. Double jeopardy attaches only: (1) upon a valid indictment; (2) before a competent court; (3) after arraignment; (4) when a valid plea has been entered; and (5) when the defendant was acquitted or convicted, or the case was dismissed or otherwise terminated without the express consent of the accused.25 These elements were not present in the proceedings before the Board of Medicine, as the proceedings involved in the instant case were administrative and not criminal in nature. The Court has already held that double jeopardy does not lie in administrative cases.26
Moreover, Section 35 of the Rules and Regulations Governing the Regulation and Practice of Professionals cited by petitioner was subsequently amended to read:
Sec. 35. The complainant/respondent may appeal the order, the resolution or the decision of the Board within thirty (30) days from receipt thereof to the Commission whose decision shall be final and executory. Interlocutory order shall not be appealable to the Commission. (Amended by Res. 174, Series of 1990).27(Emphasis supplied)
Whatever doubt was created by the previous provision was settled with said amendment. It is axiomatic that the right to appeal is not a natural right or a part of due process, but a mere statutory privilege that may be exercised only in the manner prescribed by law.28 In this case, the clear intent of the amendment is to render the right to appeal from a decision of the Board available to both complainants and respondents.
Such conclusion is bolstered by the fact that in 2006, the PRC issued Resolution No. 06-342(A), or the New Rules of Procedure in Administrative Investigations in the Professional Regulations Commission and the Professional Regulatory Boards, which provides for the method of appeal, to wit:
Sec. 1. Appeal; Period Non-Extendible.- The decision, order or resolution of the Board shall be final and executory after the lapse of fifteen (15) days from receipt of the decision, order or resolution without an appeal being perfected or taken by either the respondent or the complainant. A party aggrieved by the decision, order or resolution may file a notice of appeal from the decision, order or resolution of the Board to the Commission within fifteen (15) days from receipt thereof, and serving upon the adverse party a notice of appeal together with the appellant’s brief or memorandum on appeal, and paying the appeal and legal research fees. x x x29
The above-stated provision does not qualify whether only the complainant or respondent may file an appeal; rather, the new rules provide that "a party aggrieved" may file a notice of appeal. Thus, either the complainant or the respondent who has been aggrieved by the decision, order or resolution of the Board may appeal to the Commission. It is an elementary rule that when the law speaks in clear and categorical language, there is no need, in the absence of legislative intent to the contrary, for any interpretation.30 Words and phrases used in the statute should be given their plain, ordinary, and common usage or meaning.31
Petitioner also submits that appeals from the decisions of the PRC should be with the CA, as Rule 4332 of the Rules of Court was precisely formulated and adopted to provide for a uniform rule of appellate procedure for quasi-judicial agencies.33 Petitioner further contends that a quasi-judicial body is not excluded from the purview of Rule 43 just because it is not mentioned therein.34
On this point, the Court agrees with the petitioner.
Sec. 1, Rule 43 of the Rules of Court provides:
Section 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals, and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. (Emphasis supplied)
Indeed, the PRC is not expressly mentioned as one of the agencies which are expressly enumerated under Section 1, Rule 43 of the Rules of Court. However, its absence from the enumeration does not, by this fact alone, imply its exclusion from the coverage of said Rule.35 The Rule expressly provides that it should be applied to appeals from awards, judgments final orders or resolutions of any quasi-judicial agency in the exercise of its quasi-judicial functions. The phrase "among these agencies" confirms that the enumeration made in the Rule is not exclusive to the agencies therein listed.36
Specifically, the Court, in Yang v. Court of Appeals,37 ruled that Batas Pambansa (B.P.) Blg. 12938 conferred upon the CA exclusive appellate jurisdiction over appeals from decisions of the PRC. The Court held:
The law has since been changed, however, at least in the matter of the particular court to which appeals from the Commission should be taken. On August 14, 1981, Batas Pambansa Bilang 129 became effective and in its Section 29, conferred on the Court of Appeals "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions except those falling under the appellate jurisdiction of the Supreme Court. x x x." In virtue of BP 129, appeals from the Professional Regulations Commission are now exclusively cognizable by the Court of Appeals.39 (Emphasis supplied)
Clearly, the enactment of B.P. Blg. 129, the precursor of the present Rules of Civil Procedure,40 lodged with the CA such jurisdiction over the appeals of decisions made by the PRC.
Anent the substantive merits of the case, petitioner questions the PRC decision for being without an expert testimony to support its conclusion and to establish the cause of Editha’s injury. Petitioner avers that in cases of medical malpractice, expert testimony is necessary to support the conclusion as to the cause of the injury.41
Medical malpractice is a particular form of negligence which consists in the failure of a physician or surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily employed by the profession generally, under similar conditions, and in like surrounding circumstances.42 In order to successfully pursue such a claim, a patient must prove that the physician or surgeon either failed to do something which a reasonably prudent physician or surgeon would not have done, and that the failure or action caused injury to the patient.43
There are four elements involved in medical negligence cases: duty, breach, injury and proximate causation.44
A physician-patient relationship was created when Editha employed the services of the petitioner. As Editha’s physician, petitioner was duty-bound to use at least the same level of care that any reasonably competent doctor would use to treat a condition under the same circumstances.45 The breach of these professional duties of skill and care, or their improper performance by a physician surgeon, whereby the patient is injured in body or in health, constitutes actionable malpractice.46 As to this aspect of medical malpractice, the determination of the reasonable level of care and the breach thereof, expert testimony is essential.47 Further, inasmuch as the causes of the injuries involved in malpractice actions are determinable only in the light of scientific knowledge, it has been recognized that expert testimony is usually necessary to support the conclusion as to causation.48
In the present case, respondents did not present any expert testimony to support their claim that petitioner failed to do something which a reasonably prudent physician or surgeon would have done.
Petitioner, on the other hand, presented the testimony of Dr. Augusto M. Manalo, who was clearly an expert on the subject.
Generally, to qualify as an expert witness, one must have acquired special knowledge of the subject matter about which he or she is to testify, either by the study of recognized authorities on the subject or by practical experience.49
Dr. Manalo specializes in gynecology and obstetrics, authored and co-authored various publications on the subject, and is a professor at the University of the Philippines.50 According to him, his diagnosis of Editha’s case was "Ectopic Pregnancy Interstitial (also referred to as Cornual), Ruptured."51 In stating that the D&C procedure was not the proximate cause of the rupture of Editha’s uterus resulting in her hysterectomy, Dr. Manalo testified as follows:
Atty. Hidalgo:
Q: Doctor, we want to be clarified on this matter. The complainant had testified here that the D&C was the proximate cause of the rupture of the uterus. The condition which she found herself in on the second admission. Will you please tell us whether that is true or not?
A: Yah, I do not think so for two reasons. One, as I have said earlier, the instrument cannot reach the site of the pregnancy, for it to further push the pregnancy outside the uterus. And, No. 2, I was thinking a while ago about another reason- well, why I don’t think so, because it is the triggering factor for the rupture, it could have–the rupture could have occurred much earlier, right after the D&C or a few days after the D&C.
Q: In this particular case, doctor, the rupture occurred to have happened minutes prior to the hysterectomy or right upon admission on September 15, 1994 which is about 1 ½
months after the patient was discharged, after the D&C was conducted. Would you tell us whether there is any relation at all of the D&C and the rupture in this particular instance?
A: I don’t think so for the two reasons that I have just mentioned- that it would not be possible for the instrument to reach the site of pregnancy. And, No. 2, if it is because of the D&C that rupture could have occurred earlier.52 (Emphases supplied)
Clearly, from the testimony of the expert witness and the reasons given by him, it is evident that the D&C procedure was not the proximate cause of the rupture of Editha’s uterus.
During his cross-examination, Dr. Manalo testified on how he would have addressed Editha’s condition should he be placed in a similar circumstance as the petitioner. He stated:
Atty. Ragonton:
Q: Doctor, as a practicing OB-Gyne, when do you consider that you have done a good, correct and ideal dilatation and curettage procedure?
A: Well, if the patient recovers. If the patient gets well. Because even after the procedure, even after the procedure you may feel that you have scraped everything, the patient stops bleeding, she feels well, I think you should still have some reservations, and wait a little more time.
Q: If you were the OB-Gyne who performed the procedure on patient Editha Ramolete, would it be your standard practice to check the fetal parts or fetal tissues that were allegedly removed?
A: From what I have removed, yes. But in this particular case, I think it was assumed that it was part of the meaty mass which was expelled at the time she was urinating and flushed in the toilet. So there’s no way.
Q: There was [sic] some portions of the fetal parts that were removed?
A: No, it was described as scanty scraping if I remember it right–scanty.
Q: And you would not mind checking those scant or those little parts that were removed?
A: Well, the fact that it was described means, I assume that it was checked, ‘no. It was described as scanty and the color also, I think was described. Because it would be very unusual, even improbable that it would not be examined, because when you scrape, the specimens are right there before your eyes. It’s in front of you. You can touch it. In fact, some of them will stick to the instrument and therefore to peel it off from the instrument, you have to touch them. So, automatically they are examined closely.
Q: As a matter of fact, doctor, you also give telephone orders to your patients through telephone?
A: Yes, yes, we do that, especially here in Manila because you know, sometimes a doctor can also be tied-up somewhere and if you have to wait until he arrive at a certain place before you give the order, then it would be a lot of time wasted. Because if you know your
patient, if you have handled your patient, some of the symptoms you can interpret that comes with practice. And, I see no reason for not allowing telephone orders unless it is the first time that you will be encountering the patient. That you have no idea what the problem is.
Q: But, doctor, do you discharge patients without seeing them?
A: Sometimes yes, depending on how familiar I am with the patient. We are on the question of telephone orders. I am not saying that that is the idle [sic] thing to do, but I think the reality of present day practice somehow justifies telephone orders. I have patients whom I have justified and then all of a sudden, late in the afternoon or late in the evening, would suddenly call they have decided that they will go home inasmuch as they anticipated that I will discharge them the following day. So, I just call and ask our resident on duty or the nurse to allow them to go because I have seen that patient and I think I have full grasp of her problems. So, that’s when I make this telephone orders. And, of course before giving that order I ask about how she feels.53 (Emphases supplied)
From the foregoing testimony, it is clear that the D&C procedure was conducted in accordance with the standard practice, with the same level of care that any reasonably competent doctor would use to treat a condition under the same circumstances, and that there was nothing irregular in the way the petitioner dealt with Editha.
Medical malpractice, in our jurisdiction, is often brought as a civil action for damages under Article 217654 of the Civil Code. The defenses in an action for damages, provided for under Article 2179 of the Civil Code are:
Art. 2179. When the plaintiff’s own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
Proximate cause has been defined as that which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces injury, and without which the result would not have occurred.55 An injury or damage is proximately caused by an act or a failure to act, whenever it appears from the evidence in the case that the act or omission played a substantial part in bringing about or actually causing the injury or damage; and that the injury or damage was either a direct result or a reasonably probable consequence of the act or omission.56
In the present case, the Court notes the findings of the Board of Medicine:
When complainant was discharged on July 31, 1994, herein respondent advised her to return on August 4, 1994 or four (4) days after the D&C. This advise was clear in complainant’s Discharge Sheet. However, complainant failed to do so. This being the case, the chain of continuity as required in order that the doctrine of proximate cause can be validly invoked was interrupted. Had she returned, the respondent could have examined her thoroughly.57 x x x (Emphases supplied)
Also, in the testimony of Dr. Manalo, he stated further that assuming that there was in fact a misdiagnosis, the same would have been rectified if Editha followed the petitioner’s order to return for a check-up on August 4, 1994. Dr. Manalo stated:
Granting that the obstetrician-gynecologist has been misled (justifiably) up to thus point that there would have been ample opportunity to rectify the misdiagnosis, had the patient returned, as instructed for her follow-up evaluation. It was one and a half months later that the patient sought consultation with another doctor. The continued growth of an ectopic pregnancy, until its eventual rupture, is a dynamic process. Much change in physical findings could be expected in 1 ½ months, including the emergence of suggestive ones.58
It is undisputed that Editha did not return for a follow-up evaluation, in defiance of the petitioner’s advise. Editha omitted the diligence required by the circumstances which could have avoided the injury. The omission in not returning for a follow-up evaluation played a substantial part in bringing about Editha’s own injury. Had Editha returned, petitioner could have conducted the proper medical tests and procedure necessary to determine Editha’s health condition and applied the corresponding treatment which could have prevented the rupture of Editha’s uterus. The D&C procedure having been conducted in accordance with the standard medical practice, it is clear that Editha’s omission was the proximate cause of her own injury and not merely a contributory negligence on her part.
Contributory negligence is the act or omission amounting to want of ordinary care on the part of the person injured, which, concurring with the defendant’s negligence, is the proximate cause of the injury.59 Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered immediate causes of the accident.60 Where the immediate cause of an accident resulting in an injury is the plaintiff’s own act, which contributed to the principal occurrence as one of its determining factors, he cannot recover damages for the injury.61 Again, based on the evidence presented in the present case under review, in which no negligence can be attributed to the petitioner, the immediate cause of the accident resulting in Editha’s injury was her own omission when she did not return for a follow-up check up, in defiance of petitioner’s orders. The immediate cause of Editha’s injury was her own act; thus, she cannot recover damages from the injury.
Lastly, petitioner asserts that her right to due process was violated because she was never informed by either respondents or by the PRC that an appeal was pending before the PRC.62 Petitioner claims that a verification with the records section of the PRC revealed that on April 15, 1999, respondents filed a Memorandum on Appeal before the PRC, which did not attach the actual registry receipt but was merely indicated therein.63
Respondents, on the other hand avers that if the original registry receipt was not attached to the Memorandum on Appeal, PRC would not have entertained the appeal or accepted such pleading for lack of notice or proof of service on the other party.64 Also, the registry receipt could not be appended to the copy furnished to petitioner’s former counsel, because the registry receipt was already appended to the original copy of the Memorandum of Appeal filed with PRC.65
It is a well-settled rule that when service of notice is an issue, the rule is that the person alleging that the notice was served must prove the fact of service. The burden of proving notice rests upon the party asserting its existence.66 In the present case, respondents did not present any proof that petitioner was served a copy of the Memorandum on Appeal. Thus, respondents were not able to satisfy the burden of proving that they had in fact informed the petitioner of the appeal proceedings before the PRC.
In EDI-Staffbuilders International, Inc. v. National Labor Relations Commission,67 in which the National Labor Relations Commission failed to order the private respondent to furnish the petitioner a copy of the Appeal Memorandum, the Court held that said failure deprived the petitioner of procedural due process guaranteed by the Constitution, which could have served as basis for the
nullification of the proceedings in the appeal. The same holds true in the case at bar. The Court finds that the failure of the respondents to furnish the petitioner a copy of the Memorandum of Appeal submitted to the PRC constitutes a violation of due process. Thus, the proceedings before the PRC were null and void.
All told, doctors are protected by a special rule of law. They are not guarantors of care. They are not insurers against mishaps or unusual consequences68 specially so if the patient herself did not exercise the proper diligence required to avoid the injury.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated July 4, 2003 in CA-GR SP No. 62206 is hereby REVERSED and SET ASIDE. The Decision of the Board of Medicine dated March 4, 1999 exonerating petitioner is AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Phoenix Construction v. IACFacts:
At about 1:30 a.m. on November 15, 1975, private respondent Leonardo Dionisio was on his way home from cocktails and dinner meeting with his boss. He was proceeding down General Lacuna Street when he saw a Ford dump truck parked askew, partly blocking the way of oncoming traffic, with no lights or early warning reflector devices. The truck was driven earlier by Armando Carbonel, a regular driver of the petitioner company. Dionisio tried to swerve his car to the left, but it was too late. He suffered some physical injuries and nervous breakdown. Dionision filed an action for damages against Carbonel and Phoenix Insurance. Petitioners countered the claim by imputing the accident to respondent’s own negligence in driving at high speed without curfew pass and headlights, and while intoxicated. The trial court and the Court of Appeals ruled in favor of private respondent.
Issue:
Whether the collision was brought about by the way the truck was parked, or by respondent’s own negligence
Held:
We find that private respondent Dionisio was unable to prove possession of a valid curfew pass during the night of the accident and that the preponderance of evidence shows that he did not have such a pass during that night. It is the petitioners' contention that Dionisio purposely shut off his headlights even before he reached the intersection so as not to be detected by the police in the police precinct which he (being a resident in the area) knew was not far away from the intersection. We believe that the petitioners' theory is a more credible explanation than that offered by private respondent Dionisio, i.e., that he had his headlights on but that, at the crucial moment, these had in some mysterious if
convenient way malfunctioned and gone off, although he succeeded in switching his lights on again at "bright" split seconds before contact with the dump truck. We do not believe that this evidence is sufficient to show that Dionisio was so heavily under the influence of liquor as to constitute his driving a motor vehicle per se an act of reckless imprudence. The conclusion we draw from the factual circumstances outlined above is that private respondent Dionisio was negligent the night of the accident. He was hurrying home that night and driving faster than he should have been. Worse, he extinguished his headlights at or near the intersection of General Lacuna and General Santos Streets and thus did not see the dump truck that was parked askew and sticking out onto the road lane.
Nonetheless, we agree with the Court of First Instance and the Intermediate Appellate Court that the legal and proximate cause of the accident and of Dionisio's injuries was the wrongful or negligent manner in which the dump truck was parked in other words, the negligence of petitioner Carbonel. The collision of Dionisio's car with the dump truck was a natural and foreseeable consequence of the truck driver's negligence.
The distinctions between "cause" and "condition" which the 'petitioners would have us adopt have already been "almost entirely discredited. If the defendant has created only a passive static condition which made the damage possible, the defendant is said not to be liable. But so far as the fact of causation is concerned, in the sense of necessary antecedents which have played an important part in producing the result it is quite impossible to distinguish between active forces and passive situations, particularly since, as is invariably the case, the latter are the result of other active forces which have gone before. Even the lapse of a considerable time during which the "condition" remains static will not necessarily affect liability. "Cause" and "condition" still find occasional mention in the decisions; but the distinction is now almost entirely discredited. So far as it has any validity at all, it must refer to the type of case where the forces set in operation by the defendant have come to rest in a position of apparent safety, and some new force intervenes. But even in such cases, it is not the distinction between "cause" and "condition" which is important but the nature of the risk and the character of the intervening cause.
We believe, secondly, that the truck driver's negligence far from being a "passive and static condition" was rather an indispensable and efficient cause. The improper parking of the dump truck created an unreasonable risk of injury for anyone driving down General Lacuna Street and for having so created this risk, the truck driver must be held responsible. In our view, Dionisio's negligence, although later in point of time than the truck driver's negligence and therefore closer to the accident, was not an efficient intervening or independent cause.
The defendant cannot be relieved from liability by the fact that the risk or a substantial and important part of the risk, to which the defendant has subjected the plaintiff has indeed come to pass. Foreseeable intervening forces are within the scope original risk, and hence of the defendant's negligence. The courts are quite generally agreed that intervening causes which fall fairly in this category will not supersede the defendant's responsibility. Thus, a defendant who blocks the sidewalk and forces the plaintiff to walk in a street where the plaintiff will be exposed to the risks of heavy traffic becomes liable when the plaintiff is run down by a car, even though the car is negligently driven; and one who parks an automobile on the
highway without lights at night is not relieved of responsibility when another negligently drives into it. We hold that private respondent Dionisio's negligence was "only contributory," that the "immediate and proximate cause" of the injury remained the truck driver's "lack of due care" and that consequently respondent Dionisio may recover damages though such damages are subject to mitigation by the courts.
Petitioners also ask us to apply what they refer to as the "last clear chance" doctrine. The common law notion of last clear chance permitted courts to grant recovery to a plaintiff who had also been negligent provided that the defendant had the last clear chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, if any, the common law last clear chance doctrine has to play in a jurisdiction where the common law concept of contributory negligence as an absolute bar to recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code of the Philippines. Under Article 2179, the task of a court, in technical terms, is to determine whose negligence - the plaintiff's or the defendant's - was the legal or proximate cause of the injury. The relative location in the continuum of time of the plaintiff's and the defendant's negligent acts or omissions, is only one of the relevant factors that may be taken into account. Of more fundamental importance are the nature of the negligent act or omission of each party and the character and gravity of the risks created by such act or omission for the rest of the community. Our law on quasi-delicts seeks to reduce the risks and burdens of living in society and to allocate them among the members of society. To accept the petitioners' pro-position must tend to weaken the very bonds of society.
We believe that the demands of substantial justice are satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the damages awarded by the respondent appellate court, except the award of P10,000.00 as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by private respondent Dionisio; only the balance of 80% needs to be paid by petitioners Carbonel and Phoenix who shall be solidarity liable therefor to the former. The award of exemplary damages and attorney's fees and costs shall be borne exclusively by the petitioners. Phoenix is of course entitled to reimbursement from Carbonel. 18 We see no sufficient reason for disturbing the reduced award of damages made by the respondent appellate court.
For review on certiorari are the Decision1 dated September 16, 2002 and the Resolution2 dated December 18, 2003 of the Court of Appeals in CA-G.R. CV No. 64103, which affirmed the Decision3 of the Regional Trial Court (RTC) of Davao City, Branch 10, in Civil Case No. 23,723-95.
Eyewitness Rosalinda Palero testified that on July 19, 1994, at about 4:00 p.m., at the intersection of Buhangin and San Vicente Streets in Davao City, 15-year old high school student Bithuel Macas, herein respondent, was standing on the shoulder of the road. She was about two and a half meters away from the respondent when he was bumped and run over by a Ford Fiera, driven by Chona C. Cimafranca. Rosalinda and another unidentified person immediately came to the respondent's rescue and told Cimafranca to take the victim to the hospital. Cimafranca rushed the respondent to the Davao Medical Center.
Dr. Hilario Diaz, the orthopedic surgeon who attended to the respondent, testified that the respondent suffered severe muscular and major vessel injuries, as well as open bone fractures in both thighs and other parts of his legs. In order to save his life, the surgeon had to amputate both legs up to the groins.4
Cimafranca had since absconded and disappeared. Records showed that the Ford Fiera was registered in the name of herein petitioner, Atty. Medardo Ag. Cadiente. However, Cadiente claimed that when the accident happened, he was no longer the owner of the Ford Fiera. He alleged that he sold the vehicle to Engr. Rogelio Jalipa on March 28, 1994,5 and turned over the Certificate of Registration and Official Receipt to Jalipa, with the understanding that the latter would be the one to cause the transfer of the registration.
The victim's father, Samuel Macas, filed a complaint6 for torts and damages against Cimafranca and Cadiente before the RTC of Davao City, Branch 10. Cadiente later filed a third-party complaint7 against Jalipa.
In answer, Jalipa claimed that he was no longer the owner of the Ford Fiera at the time of the accident. He alleged that he sold the vehicle to Abraham Abubakar on June 20, 1994.8 He thus filed a fourth-party complaint9 against Abubakar.
After trial, the court ruled:
WHEREFORE, judgment is rendered in favor of the plaintiff declaring Atty. Medardo Ag. Cadiente and Engr. Rogelio Jalipa jointly and severally liable for damages to the plaintiff for their own negligence as stated above, and ordering them to indemnify the plaintiff jointly and severally as follows:
(a) P300,000.00 as compensatory damages for the permanent and almost total disability being suffered by him;
(b) P150,000.00 for moral damages;
(c) P18,982.85 as reimbursement of medical expenses;
(d) P30,000.00 for attorney's fees; and
(e) costs of suit.
SO ORDERED.10
On appeal, the Court of Appeals held that the findings of the trial court were in accordance with the established facts and was supported by the evidence on record. Thus, it decreed as follows:
WHEREFORE, premises considered, the instant appeal is DENIED and the decision of the Regional Trial Court of Davao City in Civil Case No. 23723-95 is hereby AFFIRMED.
SO ORDERED.11
From the aforequoted decision of the Court of Appeals and the subsequent denial of the motion for reconsideration, only Cadiente appealed to this Court.
The instant petition alleges that the Court of Appeals committed serious errors of law in affirming the decision of the trial court. Petitioner Cadiente raises the following as issues:
I.
WAS THERE … CONTRIBUTORY NEGLIGENCE ON THE PART OF THE INJURED PARTY?
II.
ARE BOTH DEFENDANT CADIENTE AND THIRD-PARTY DEFENDANT JOINTLY AND SEVERALLY LIABLE TO THE INJURED PARTY?
THE HONORABLE COURT OF APPEAL[S] COMMIT[T]ED GRAVE LEGAL ERROR IN ORDERING DEFENDANT CADIENTE AND THIRD-PARTY DEFENDANT JALIPA JOINTLY AND SEVERALLY LIABLE.12
Essentially, the issues to be resolved are: (1) Whether there was contributory negligence on the part of the victim; and (2) whether the petitioner and third-party defendant Jalipa are jointly and severally liable to the victim.
The petitioner contends that the victim's negligence contributed to his own mishap. The petitioner theorizes that if witness Rosalinda Palero, who was only two and a half meters away from the victim, was not hit by the Ford Fiera, then the victim must have been so negligent as to be bumped and run over by the said vehicle.13
The petitioner further argues that having filed a third-party complaint against Jalipa, to whom he had sold the Ford Fiera, the Court of Appeals should have ordered the latter to reimburse him for any amount he would be made to pay the victim, instead of ordering him solidarily liable for damages.14
The respondent, for his part, counters that the immediate and proximate cause of the injuries he suffered was the recklessly driven Ford Fiera, which was registered in the petitioner's name. He insists that when he was hit by the vehicle, he was standing on the uncemented portion of the highway, which was exactly where pedestrians were supposed to be.15
The respondent stresses that as the registered owner of the Ford Fiera which figured in the accident, the petitioner is primarily liable for the injury caused by the said vehicle. He maintains that the alleged sale of the vehicle to Jalipa was tainted with irregularity, which indicated collusion between the petitioner and Jalipa.16
After a careful consideration of the parties' submissions, we find the petition without merit.
Article 2179 of the Civil Code provides:
When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own injury should not be entitled to recover damages in full, but must proportionately bear the consequences of his own negligence. The defendant is thus held liable only for the damages actually caused by his negligence.17
In this case, records show that when the accident happened, the victim was standing on the shoulder, which was the uncemented portion of the highway. As noted by the trial court, the shoulder was intended for pedestrian use alone. Only stationary vehicles, such as those loading or unloading passengers may use the shoulder. Running vehicles are not supposed to pass through the said uncemented portion of the highway. However, the Ford Fiera in this case, without so much as slowing down, took off from the cemented part of the highway, inexplicably swerved to the shoulder, and recklessly bumped and ran over an innocent victim. The victim was just where he should be when the unfortunate event transpired.
Cimafranca, on the other hand, had no rightful business driving as recklessly as she did. The respondent cannot be expected to have foreseen that the Ford Fiera, erstwhile speeding along the cemented part of the highway would suddenly swerve to the shoulder, then bump and run him over. Thus, we are unable to accept the petitioner's contention that the respondent was negligent.
Coming now to the second and third issues, this Court has recently reiterated in PCI Leasing and Finance, Inc. v. UCPB General Insurance Co., Inc.,18 that the registered owner of any vehicle, even if he had already sold it to someone else, is primarily responsible to the public for whatever damage or injury the vehicle may cause. We explained,
…Were a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him, by collusion with others or otherwise, to escape said responsibility and transfer the same to an indefinite person, or to one who possesses no property with which to respond financially for the damage or injury done. A victim of recklessness on the public highways is usually without means to discover or identify the person actually causing the injury or damage. He has no means other than by a recourse to the registration in the Motor Vehicles Office to determine who is the owner. The protection that the law aims to extend to him would become illusory were the registered owner given the opportunity to escape liability by disproving his ownership.19
In the case of Villanueva v. Domingo,20 we said that the policy behind vehicle registration is the easy identification of the owner who can be held responsible in case of accident, damage or injury caused by the vehicle. This is so as not to inconvenience or prejudice a third party injured by one whose identity cannot be secured.21
Therefore, since the Ford Fiera was still registered in the petitioner's name at the time when the misfortune took place, the petitioner cannot escape liability for the permanent injury it caused the respondent, who had since stopped schooling and is now forced to face life with nary but two remaining limbs.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated September 16, 2002 and Resolution dated December 18, 2003 of the Court of Appeals in CA-G.R. CV No. 64103 are hereby AFFIRMED. Costs against the petitioner.
