THIRD DIVISION

THE HEIRS OF THE LATE G.R. No. 116121

RUBEN REINOSO, SR.,
represented by Ruben Reinoso Jr.,

Petitioners, Present:

CARPIO, J.

- versus - VELASCO, JR., Chairperson,

PERALTA,

ABAD, and

MENDOZA, JJ.

COURT OF APPEALS,
PONCIANO TAPALES, JOSE
GUBALLA, and FILWRITERS
GUARANTY ASSURANCE
CORPORATION, 

Respondent.
Promulgated:

July 18, 2011

x -------------------------------------------------------------------------------------x

DECISION

MENDOZA, J.:
 Before the Court is a petition for review assailing the May 20, 1994
Decision[1] and June 30, 1994 Resolution[2] of the Court of Appeals (CA), in CA-
G.R. CV No. 19395, which set aside the March 22, 1988 Decision of the Regional
Trial Court, Branch 8, Manila (RTC) for non-payment of docket fees. The
dispositive portion of the CA decision reads:
IN VIEW OF ALL THE FOREGOING, the decision appealed from is
SET ASIDE and REVERSED and the complaint in this case is ordered
DISMISSED.

No costs pronouncement.

SO ORDERED.

The complaint for damages arose from the collision of a passenger jeepney and a
truck at around 7:00 oclock in the evening of June 14, 1979 along E. Rodriguez
Avenue, Quezon City. As a result, a passenger of the jeepney, Ruben Reinoso,
Sr. (Reinoso), was killed. The passenger jeepney was owned by Ponciano
Tapales (Tapales) and driven by Alejandro Santos (Santos), while the truck was
owned by Jose Guballa (Guballa) and driven by Mariano Geronimo (Geronimo).

On November 7, 1979, the heirs of Reinoso (petitioners) filed a complaint for

damages against Tapales and Guballa. In turn, Guballa filed a third party complaint
against Filwriters Guaranty Assurance Corporation (FGAC) under Policy Number
OV-09527.

On March 22, 1988, the RTC rendered a decision in favor of the petitioners
and against Guballa. The decision in part, reads:

In favor of herein plaintiffs and against defendant Jose Guballa:

1. For the death of Ruben Reinoso, Sr. ₱30,000.00

2. Loss of earnings (monthly income at the time of death 120,000.00
(₱2,000.00 Court used ₱1,000.00 only per month (or
₱12,000.00 only per year) & victim then being 55 at death had
ten (10) years life expectancy

3. Mortuary, Medical & funeral expenses and all incidental 15,000.00

expenses in the wake in serving those who condoled..
4. Moral damages .. 50,000.00
 5. Exemplary damages 25,000.00

6. Litigation expenses . 15,000.00

7. Attorneys fees 25,000.00
Or a total of ₱250,000.00
For damages to property:

In favor of defendant Ponciano Tapales and against defendant Jose Guballa:

1. Actual damages for repair is already awarded to defendant-

cross-claimant Ponciano Tapales by Br. 9, RTC-Malolos,
Bulacan (Vide: Exh. 1-G-Tapales); hence, cannot recover
twice.
2. Compensatory damages (earnings at ₱150.00 per day) and ₱9,000.00
for two (2) months jeepney stayed at the repair shop.
3. Moral damages ... 10,000.00
4. Exemplary damages . 10,000.00
5. Attorneys fees 15,000.00

or a total of ₱44,000.00

Under the 3rd party complaint against 3rd party defendant Filwriters Guaranty
Assurance Corporation, the Court hereby renders judgment in favor of said
3rd party plaintiff by way of 3rd party liability under policy No. OV-09527 in the
amount of ₱50,000.00 undertaking plus ₱10,000.00 as and for attorneys fees.

For all the foregoing, it is the well considered view of the Court that plaintiffs,
defendant Ponciano Tapales and 3rd Party plaintiff Jose Guballa established their
claims as specified above, respectively. Totality of evidence preponderance in their
favor.

JUDGMENT

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

In favor of plaintiffs for the death of Ruben Reinoso, Sr.₱250,000.00;

In favor of defendant Ponciano Tapales due to damage of his passenger

jeepney.₱44,000.00;

In favor of defendant Jose Guballa under Policy No. OV-

09527....₱60,000.00;
 All the specified accounts with 6% legal rate of interest per annum from
date of complaint until fully paid (Reformina vs. Tomol, 139 SCRA 260; and
finally;

Costs of suit.

SO ORDERED.[3]

On appeal, the CA, in its Decision dated May 20, 1994, set aside and reversed the
RTC decision and dismissed the complaint on the ground of non-payment of docket
fees pursuant to the doctrine laid down in Manchester v. CA.[4] In addition, the CA
ruled that since prescription had set in, petitioners could no longer pay the required
docket fees.[5]

Petitioners filed a motion for reconsideration of the CA decision but it was denied
in a resolution dated June 30, 1994.[6] Hence, this appeal, anchored on the following

GROUNDS:

A. The Court of Appeals MISAPPLIED THE RULING of the

Supreme Court in the case of Manchester Corporation vs. Court of
Appeals to this case.

B. The issue on the specification of the damages appearing in the

prayer of the Complaint was NEVER PLACED IN ISSUE BY
ANY OF THE PARTIES IN THE COURT OF ORIGIN
(REGIONAL TRIAL COURT) NOR IN THE COURT OF
APPEALS.

C. The issues of the case revolve around the more substantial issue
as to the negligence of the private respondents and their culpability
to petitioners.[7]
The petitioners argue that the ruling in Manchester should not have been
applied retroactively in this case, since it was filed prior to the promulgation of
the Manchester decision in 1987. They plead that though this Court stated that
failure to state the correct amount of damages would lead to the dismissal of the
complaint, said doctrine should be applied prospectively.

Moreover, the petitioners assert that at the time of the filing of the complaint in 1979,
they were not certain of the amount of damages they were entitled to, because the
amount of the lost income would still be finally determined in the course of the trial
of the case. They claim that the jurisdiction of the trial court remains even if there
was failure to pay the correct filing fee as long as the correct amount would be paid
subsequently.

Finally, the petitioners stress that the alleged defect was never put in issue either in
the RTC or in the CA.

The Court finds merit in the petition.

The rule is that payment in full of the docket fees within the prescribed period is
mandatory.[8] In Manchester v. Court of Appeals,[9] it was held that a court acquires
jurisdiction over any case only upon the payment of the prescribed docket fee. The
strict application of this rule was, however, relaxed two (2) years after in the case
of Sun Insurance Office, Ltd. v. Asuncion,[10] wherein the Court decreed that where
the initiatory pleading is not accompanied by the payment of the docket fee, the court
may allow payment of the fee within a reasonable period of time, but in no case
beyond the applicable prescriptive or reglementary period. This ruling was made on
the premise that the plaintiff had demonstrated his willingness to abide by the rules
by paying the additional docket fees required.[11] Thus, in the more recent case
of United Overseas Bank v. Ros,[12] the Court explained that where the party does
not deliberately intend to defraud the court in payment of docket fees, and manifests
its willingness to abide by the rules by paying additional docket fees when required
by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not
the strict regulations set in Manchester, will apply. It has been on record that the
Court, in several instances, allowed the relaxation of the rule on non-payment of
docket fees in order to afford the parties the opportunity to fully ventilate their cases
on the merits. In the case of La Salette College v. Pilotin,[13] the Court stated:

Notwithstanding the mandatory nature of the requirement of payment of

appellate docket fees, we also recognize that its strict application is qualified
by the following: first, failure to pay those fees within the reglementary
period allows only discretionary, not automatic, dismissal; second, such
power should be used by the court in conjunction with its exercise of sound
discretion in accordance with the tenets of justice and fair play, as well as
with a great deal of circumspection in consideration of all attendant
circumstances.[14]
 While there is a crying need to unclog court dockets on the one hand, there is,
on the other, a greater demand for resolving genuine disputes fairly and
equitably,[15] for it is far better to dispose of a case on the merit which is a primordial
end, rather than on a technicality that may result in injustice.

In this case, it cannot be denied that the case was litigated before the RTC and
said trial court had already rendered a decision. While it was at that level, the matter
of non-payment of docket fees was never an issue. It was only the CA which motu
propio dismissed the case for said reason.
Considering the foregoing, there is a need to suspend the strict application of
the rules so that the petitioners would be able to fully and finally prosecute their
claim on the merits at the appellate level rather than fail to secure justice on a
technicality, for, indeed, the general objective of procedure is to facilitate the
application of justice to the rival claims of contending parties, bearing always in
mind that procedure is not to hinder but to promote the administration of justice.[16]

The Court also takes into account the fact that the case was filed before
the Manchester ruling came out. Even if said ruling could be applied retroactively,
liberality should be accorded to the petitioners in view of the recency then of the
ruling. Leniency because of recency was applied to the cases of Far Eastern
Shipping Company v. Court of Appeals[17] and Spouses Jimmy and Patri Chan v.
RTC of Zamboanga.[18] In the case of Mactan Cebu International Airport Authority
v. Mangubat (Mactan),[19] it was stated that the intent of the Court is clear to afford
litigants full opportunity to comply with the new rules and to temper enforcement of
sanctions in view of the recency of the changes introduced by the new
rules. In Mactan, the Office of the Solicitor General (OSG) also failed to pay the
correct docket fees on time.

We held in another case:

x x x It bears stressing that the rules of procedure are merely tools

designed to facilitate the attainment of justice. They were conceived and
promulgated to effectively aid the court in the dispensation of
justice. Courts are not slaves to or robots of technical rules, shorn of
judicial discretion. In rendering justice, courts have always been, as they
ought to be, conscientiously guided by the norm that, on the balance,
technicalities take a backseat against substantive rights, and not the
other way around. Thus, if the application of the Rules would tend to
frustrate rather than promote justice, it is always within the power of
the Court to suspend the Rules, or except a particular case from its
operation.[20]
 The petitioners, however, are liable for the difference between the actual fees
paid and the correct payable docket fees to be assessed by the clerk of court which
shall constitute a lien on the judgment pursuant to Section 2 of Rule 141 which
provides:
SEC. 2. Fees in lien. Where the court in its final judgment awards
a claim not alleged, or a relief different from, or more than that claimed
in the pleading, the party concerned shall pay the additional fees which
shall constitute a lien on the judgment in satisfaction of said lien. The
clerk of court shall assess and collect the corresponding fees.

As the Court has taken the position that it would be grossly unjust if
petitioners claim would be dismissed on a strict application of
the Manchester doctrine, the appropriate action, under ordinary circumstances,
would be for the Court to remand the case to the CA. Considering, however, that the
case at bench has been pending for more than 30 years and the records thereof are
already before this Court, a remand of the case to the CA would only unnecessarily
prolong its resolution. In the higher interest of substantial justice and to spare the
parties from further delay, the Court will resolve the case on the merits.

The facts are beyond dispute. Reinoso, the jeepney passenger, died as a result
of the collision of a jeepney and a truck on June 14, 1979 at around 7:00 oclock in
the evening along E. Rodriguez Avenue, Quezon City. It was established that the
primary cause of the injury or damage was the negligence of the truck driver who
was driving it at a very fast pace. Based on the sketch and spot report of the police
authorities and the narration of the jeepney driver and his passengers, the collision
was brought about because the truck driver suddenly swerved to, and encroached
on, the left side portion of the road in an attempt to avoid a wooden barricade, hitting
the passenger jeepney as a consequence. The analysis of the RTC appears in
its decision as follows:
Perusal and careful analysis of evidence adduced as well as proper
consideration of all the circumstances and factors bearing on the issue as to
who is responsible for the instant vehicular mishap convince and persuade
this Court that preponderance of proof is in favor of plaintiffs and defendant
Ponciano Tapales. The greater mass of evidence spread on the records and
its influence support plaintiffs plaint including that of defendant Tapales.
The Land Transportation and Traffic Rule (R.A. No. 4136), reads as
follows:
 Sec. 37. Driving on right side of highway. Unless a different
course of action is required in the interest of the safety and the
security of life, person or property, or because of unreasonable
difficulty of operation in compliance therewith, every person
operating a motor vehicle or an animal drawn vehicle on highway
shall pass to the right when meeting persons or vehicles coming
toward him, and to the left when overtaking persons or vehicles
going the same direction, and when turning to the left in going from
one highway to another, every vehicle shall be conducted to the right
of the center of the intersection of the highway.
Having in mind the foregoing provision of law, this Court is
convinced of the veracity of the version of the passenger jeepney driver
Alejandro Santos, (plaintiffs and Tapales witness) that while running on
lane No. 4 westward bound towards Ortigas Avenue at between 30-40 kms.
per hour (63-64 tsn, Jan. 6, 1984) the sand & gravel truck from the opposite
direction driven by Mariano Geronimo, the headlights of which the former
had seen while still at a distance of about 30-40 meters from the wooden
barricade astride lanes 1 and 2, upon reaching said wooden block suddenly
swerved to the left into lanes 3 and 4 at high speed napakabilis po ng dating
ng truck. (29 tsn, Sept. 26, 1985) in the process hitting them (Jeepney
passenger) at the left side up to where the reserve tire was in an oblique
manner pahilis (57 tsn, Sept. 26, 1985). The jeepney after it was bumped by
the truck due to the strong impact was thrown resting on its right side while
the left side was on top of the Bangketa (side walk). The passengers of the
jeepney and its driver were injured including two passengers who died. The
left side of the jeepney suffered considerable damage as seen in the picture
(Exhs. 4 & 5-Tapales, pages 331-332, records) taken while at the repair
shop.
The Court is convinced of the narration of Santos to the effect that
the gravel & sand truck was running in high speed on the good portion of E.
Rodriguez Avenue (lane 1 & 2) before the wooden barricade and (having in
mind that it had just delivered its load at the Corinthian Gardens) so that
when suddenly confronted with the wooden obstacle before it had to avoid
the same in a manner of a reflex reaction or knee-jerk response by forthwith
swerving to his left into the right lanes (lanes 3 & 4). At the time of the
bumping, the jeepney was running on its right lane No. 4 and even during
the moments before said bumping, moving at moderate speed thereon since
lane No. 3 was then somewhat rough because being repaired also according
to Mondalia who has no reason to prevaricate being herself one of those
seriously injured. The narration of Santos and Mondalia are convincing and
consistent in depicting the true facts of the case untainted by vacillation and
therefore, worthy to be relied upon. Their story is forfeited and confirmed
by the sketch drawn by the investigating officer Pfc. F. Amaba, Traffic
Division, NPD, Quezon City who rushed to the scene of the mishap (Vide:
Resolution of Asst fiscal Elizabeth B. Reyes marked as Exhs. 7, 7-A, 7-B-
Tapales, pp. 166-168, records; the Certified Copy found on pages 598-600,
ibid, with the attached police sketch of Pfc. Amaba, marked as Exh. 8-
 Tapales on page 169, ibid; certified copy of which is on page 594, ibid)
indicating the fact that the bumping indeed occurred at lane No. 4 and
showing how the gavel & sand truck is positioned in relation to the jeepney.
The said police sketch having been made right after the accident is a piece
of evidence worthy to be relied upon showing the true facts of the bumping-
occurrence. The rule that official duty had been performed (Sec.5(m), R-
131, and also Sec. 38, R-a30, Rev. Rules of Court) there being no evidence
adduced and made of record to the contrary is that said circumstance
involving the two vehicles had been the result of an official investigation
and must be taken as true by this Court.[21]

While ending up on the opposite lane is not conclusive proof of fault in

automobile collisions,[22] the position of the two vehicles, as depicted in the sketch
of the police officers, clearly shows that it was the truck that hit the jeepney. The
evidentiary records disclosed that the truck was speeding along E. Rodriguez,
heading towards Santolan Street, while the passenger jeepney was coming from the
opposite direction. When the truck reached a certain point near the Meralco Post No.
J9-450, the front portion of the truck hit the left middle side portion of the
passenger jeepney, causing damage to both vehicles and injuries to the driver and
passengers of the jeepney. The truck driver should have been more careful, because,
at that time, a portion of E. Rodriguez Avenue was under repair and a wooden
barricade was placed in the middle thereof.
The Court likewise sustains the finding of the RTC that the truck owner,
Guballa, failed to rebut the presumption of negligence in the hiring and supervision
of his employee. Article 2176, in relation to Article 2180 of the Civil Code,
provides:
Art. 2176. Whoever by act or omission causes damage to another,
there being fault or negligence is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of this
Chapter.

xxxx

Art. 2180. The obligation imposed by Art. 2176 is demandable not

only for ones own acts or omissions but also for those of persons for whom
one is responsible.
xxxx
Employers shall be liable for the damage caused by their employees
and household helpers acting within the scope of their assigned tasks even
though the former are not engaged in any business or industry.
 xxxx

The responsibility treated of in this article shall cease when the

persons herein mentioned prove that they observed all the diligence of a
good father of a family to prevent damage.

Whenever an employees negligence causes damage or injury to another, there

instantly arises a presumption juris tantum that the employer failed to
exercise diligentissimi patris families in the selection or supervision of his
employee.[23] Thus, in the selection of prospective employees, employers are
required to examine them as to their qualification, experience and service
record. With respect to the supervision of employees, employers must formulate
standard operating procedures, monitor their implementation, and impose
disciplinary measures for breaches thereof. These facts must be shown by concrete
proof, including documentary evidence.[24] Thus, the RTC committed no error in
finding that the evidence presented by respondent Guballa was wanting. It ruled:
x x x. As expected, defendant Jose Guballa, attempted to overthrow
this presumption of negligence by showing that he had exercised the due
diligence required of him by seeing to it that the driver must check the vital
parts of the vehicle he is assigned to before he leaves the compound like the
oil, water, brakes, gasoline, horn (9 tsn, July 17, 1986); and that Geronimo
had been driving for him sometime in 1976 until the collision in litigation
came about (5-6 tsn, ibid); that whenever his trucks gets out of the
compound to make deliveries, it is always accompanied with two (2) helpers
(16-17 tsn, ibid). This was all which he considered as selection and
supervision in compliance with the law to free himself from any
responsibility. This Court then cannot consider the foregoing as equivalent
to an exercise of all the care of a good father of a family in the selection and
supervision of his driver Mariano Geronimo.[25]

WHEREFORE, the petition is GRANTED. The May 20, 1994 Decision and
June 30, 1994 Resolution of the Court of Appeals are REVERSED and SET
ASIDE and the March 22, 1988 Decision of the Regional Trial Court, Branch
8, Manila, is REINSTATED.

SO ORDERED.
Vicarious liability - Article 2180, Civil Code -
G.R. No. 116121
G.R. No. 116121

Excerpts:

"The Court likewise sustains the finding of the RTC that the truck owner,
Guballa, failed to rebut the presumption of negligence in the hiring and supervision
of his employee. Article 2176, in relation to Article 2180 of the Civil Code,
provides:
Art. 2176. Whoever by act or omission causes damage to another,
there being fault or negligence is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of this
Chapter.
xxxx
Art. 2180. The obligation imposed by Art. 2176 is demandable not only
for one’s own acts or omissions but also for those of persons for whom one
is responsible.
xxxx
Employers shall be liable for the damage caused by their employees
and household helpers acting within the scope of their assigned tasks even
though the former are not engaged in any business or industry.
xxxx
The responsibility treated of in this article shall cease when the
persons herein mentioned prove that they observed all the diligence of a
good father of a family to prevent damage.
Whenever an employee’s negligence causes damage or injury to another, there
instantly arises a presumption juris tantum that the employer failed to
exercise diligentissimi patris families in the selection or supervision of his
employee.[23] Thus, in the selection of prospective employees, employers are
required to examine them as to their qualification, experience and service record.
With respect to the supervision of employees, employers must formulate standard
operating procedures, monitor their implementation, and impose disciplinary
measures for breaches thereof. These facts must be shown by concrete proof,
including documentary evidence.[24] Thus, the RTC committed no error in finding
that the evidence presented by respondent Guballa was wanting. It ruled:
 x x x. As expected, defendant Jose Guballa, attempted to overthrow
this presumption of negligence by showing that he had exercised the due
diligence required of him by seeing to it that the driver must check the vital
parts of the vehicle he is assigned to before he leaves the compound like the
oil, water, brakes, gasoline, horn (9 tsn, July 17, 1986); and that Geronimo
had been driving for him sometime in 1976 until the collision in litigation
came about (5-6 tsn, ibid); that whenever his trucks gets out of the
compound to make deliveries, it is always accompanied with two (2) helpers
(16-17 tsn, ibid). This was all which he considered as selection and
supervision in compliance with the law to free himself from any
responsibility. This Court then cannot consider the foregoing as equivalent
to an exercise of all the care of a good father of a family in the selection and
supervision of his driver Mariano Geronimo.”[25]"

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 180440 December 5, 2012

DR. GENEVIEVE L. HUANG, Petitioner,

vs.
PHILIPPINE HOTELIERS, INC., DUSIT THANI PUBLIC CO., LTD. And FIRST LEPANTO TAISHO
INSURANCE CORPORATION, Respondents.

DECISION

PEREZ, J.:

For this Court’s resolution is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
assailing the Decision1 of the Court of Appeals in CA-G.R. CV No. 87065 dated 9 August 2007,
affirming the Decision2 of Branch 56 of the Regional Trial Court (RTC) of Makati City in Civil Case
No. 96-1367 dated 21 February 2006, dismissing for lack of merit herein petitioner Dr. Genevieve L.
Huang’s Complaint for Damages. Assailed as well is the Court of Appeals’ Resolution 3 dated 5
November 2007 denying for lack of merit petitioner’s Motion for Reconsideration.

This case stemmed from a Complaint for Damages filed on 28 August 1996 by petitioner Dr.
Genevieve L. Huang4against herein respondents Philippine Hoteliers, Inc. (PHI)5 and Dusit Thani
Public Co., Ltd. (DTPCI),6 as owners of Dusit Thani Hotel Manila (Dusit Hotel);7 and co-respondent
First Lepanto Taisho Insurance Corporation (First Lepanto),8 as insurer of the aforesaid hotel. The
said Complaint was premised on the alleged negligence of respondents PHI and DTPCI’s staff, in
the untimely putting off all the lights within the hotel’s swimming pool area, as well as the locking of
the main entrance door of the area, prompting petitioner to grope for a way out. While doing so, a
folding wooden counter top fell on her head causing her serious brain injury. The negligence was
allegedly compounded by respondents PHI and DTPCI’s failure to render prompt and adequate
medical assistance.
Petitioner’s version of the antecedents of this case is as follows:

On 11 June 1995, Delia Goldberg (Delia), a registered guest of Dusit Hotel, invited her friend,
petitioner Dr. Genevieve L. Huang, for a swim at the hotel’s swimming pool facility. They started
bathing at around 5:00 p.m. At around 7:00 p.m., the hotel’s swimming pool attendant informed them
that the swimming pool area was about to be closed. The two subsequently proceeded to the
shower room adjacent to the swimming pool to take a shower and dress up. However, when they
came out of the bathroom, the entire swimming pool area was already pitch black and there was no
longer any person around but the two of them. They carefully walked towards the main door leading
to the hotel but, to their surprise, the door was locked.9

Petitioner and Delia waited for 10 more minutes near the door hoping someone would come to their
rescue but they waited in vain. Delia became anxious about their situation so petitioner began to
walk around to look for a house phone. Delia followed petitioner. After some time, petitioner saw a
phone behind the lifeguard’s counter. While slowly walking towards the phone, a hard and heavy
object, which later turned out to be the folding wooden counter top, fell on petitioner’s head that
knocked her down almost unconscious.10

Delia immediately got hold of the house phone and notified the hotel telephone operator of the
incident. Not long after, the hotel staff arrived at the main entrance door of the swimming pool area
but it took them at least 20 to 30 minutes to get inside. When the door was finally opened, three
hotel chambermaids assisted petitioner by placing an ice pack and applying some ointment on her
head. After petitioner had slightly recovered, she requested to be assisted to the hotel’s coffee shop
to have some rest. Petitioner demanded the services of the hotel physician.11

Dr. Violeta Dalumpines (Dr. Dalumpines) arrived. She approached petitioner and introduced herself
as the hotel physician. However, instead of immediately providing the needed medical assistance,
Dr. Dalumpines presented a "Waiver" and demanded that it be signed by petitioner, otherwise, the
hotel management will not render her any assistance. Petitioner refused to do so.12

After eating her dinner and having rested for a while, petitioner left the hotel’s coffee shop and went
home. Thereupon, petitioner started to feel extraordinary dizziness accompanied by an
uncomfortable feeling in her stomach, which lasted until the following day. Petitioner was
constrained to stay at home, thus, missing all her important appointments with her patients. She also
began experiencing "on" and "off" severe headaches that caused her three (3) sleepless nights.13

Petitioner, thus, decided to consult a certain Dr. Perry Noble (Dr. Noble), a neurologist from Makati
Medical Center, who required her to have an X-ray and a Magnetic Resonance Imaging (MRI)
tests.14 The MRI Report15 dated 23 August 1995 revealed the following findings:

CONSULTATION REPORT:

MRI examination of the brain shows scattered areas of intraparenchymal contusions and involving
mainly the left middle and posterior temporal and slightly the right anterior temporal lobe.

Other small areas of contusions with suggestive pertechiae are seen in the left fronto-parietal, left
parieto-occipital and with deep frontal periventricular subcortical and cortical regions. There is no
mass effect nor signs of localized hemorrhagic extravasation.

The ventricles are not enlarged, quite symmetrical without shifts or deformities; the peripheral sulci
are within normal limits.
The C-P angles, petromastoids, sella, extrasellar and retro orbital areas appear normal.

The brainstem is unremarkable.

IMPRESSION: Scattered small intraparenchymal contusions mainly involving the left middle-
posterior temporal lobe and also right medial anterior temporal, both deep frontal subcortical, left
parieto-occipital subcortical and cortical regions. Ischemic etiology not ruled out. No localized intra -
or extracerebral hemorrhage.16

Petitioner claimed that the aforesaid MRI result clearly showed that her head was bruised. Based
also on the same MRI result, Dr. Noble told her that she has a very serious brain injury. In view
thereof, Dr. Noble prescribed the necessary medicine for her condition.17

Petitioner likewise consulted a certain Dr. Ofelia Adapon, also a neurologist from Makati Medical
Center, who required her to undergo an Electroencephalogram examination (EEG) to measure the
electrostatic in her brain.18Based on its result,19 Dr. Ofelia Adapon informed her that she has a serious
condition—a permanent one. Dr. Ofelia Adapon similarly prescribed medicines for her brain injury.20

Petitioner’s condition did not get better. Hence, sometime in September 1995, she consulted another
neuro-surgeon by the name of Dr. Renato Sibayan (Dr. Sibayan), who required her to have an X-ray
test.21 According to petitioner, Dr. Sibayan’s finding was the same as those of the previous doctors
that she had consulted—she has a serious brain injury.22

By reason of the unfortunate 11 June 1995 incident inside the hotel’s swimming pool area, petitioner
also started to feel losing her memory, which greatly affected and disrupted the practice of her
chosen profession.23 Thus, on 25 October 1995, petitioner, through counsel, sent a demand letter24 to
respondents PHI and DTPCI seeking payment of an amount not less than P100,000,000.00
representing loss of earnings on her remaining life span. But, petitioner’s demand was unheeded.

In November 1995, petitioner went to the United States of America (USA) for further medical
treatment. She consulted a certain Dr. Gerald Steinberg and a certain Dr. Joel Dokson25 from Mount
Sinai Hospital who both found that she has "post traumatic-post concussion/contusion cephalgias-
vascular and neuralgia."26 She was then prescribed to take some medications for severe pain and to
undergo physical therapy. Her condition did not improve so she returned to the Philippines.27

Petitioner, once again, consulted Dr. Sibayan, who simply told her to just relax and to continue
taking her medicines. Petitioner also consulted other neurologists, who all advised her to just
continue her medications and to undergo physical therapy for her neck pain.28

Sometime in 1996, petitioner consulted as well a certain Dr. Victor Lopez (Dr. Lopez), an
ophthalmologist from the Makati Medical Center, because of her poor vision, which she has
experienced for several months.29 Petitioner’s Eye Report dated 5 March 199630 issued by Dr. Lopez
stated: "IMPRESSION: Posterior vitreous detachment, right eye of floaters." Dr. Lopez told petitioner
that her detached eye is permanent and very serious. Dr. Lopez then prescribed an eye drop to
petitioner.31

For petitioner’s frustration to dissipate and to regain her former strength and physical well-being, she
consulted another neuro-surgeon from Makati Medical Center by the name of Dr. Leopoldo P.
Pardo, Jr. (Dr. Pardo, Jr.).32 She disclosed to Dr. Pardo, Jr. that at the age of 18 she suffered a stroke
due to mitral valve disease and that she was given treatments, which also resulted in
thrombocytopenia. In Dr. Pardo, Jr.’s medical evaluation of petitioner dated 15 May 1996,33 he made
the following diagnosis and opinion:
DIAGNOSIS AND OPINION:

This patient sustained a severe head injury in (sic) 11 June 1995 and as a result of which she
developed the following injuries:

1. Cerebral Concussion and Contusion

2. Post-traumatic Epilepsy

3. Post-concussional Syndrome

4. Minimal Brain Dysfunction

5. Cervical Sprain, chronic recurrent

It is my opinion that the symptoms she complained of in the foregoing history are all related to and a
result of the injury sustained on 11 June 1995.

It is further my opinion that the above diagnosis and complaints do materially affect her duties and
functions as a practicing physician and dermatologist, and that she will require treatment for an
undetermined period of time.

The percentage of disability is not calculated at this time and will require further evaluation and
observation.34

Dr. Pardo, Jr. then advised petitioner to continue her medications.35

Petitioner likewise consulted a certain Dr. Tenchavez36 for her follow-up EEG.37 He similarly
prescribed medicine for petitioner’s deep brain injury. He also gave her pain killer for her headache
and advised her to undergo physical therapy. Her symptoms, however, persisted all the more.38

In 1999, petitioner consulted another neurologist at the Makati Medical Center by the name of Dr.
Martesio Perez (Dr. Perez) because of severe fleeting pains in her head, arms and legs; difficulty in
concentration; and warm sensation of the legs, which symptoms also occurred after the 11 June
1995 incident. Upon examination, Dr. Perez observed that petitioner has been experiencing severe
pains and she has a slight difficulty in concentration. He likewise noted that there was a slight spasm
of petitioner’s neck muscle but, otherwise, there was no objective neurologic finding. The rest of
petitioner’s neurologic examination was essentially normal.39

Dr. Perez’s neurologic evaluation40 of petitioner reflected, among others: (1) petitioner’s past medical
history, which includes, among others, mitral valve stenosis; (2) an interpretation of petitioner’s EEG
results in October 1995 and in January 1999, i.e., the first EEG showed sharp waves seen bilaterally
more on the left while the second one was normal; and (3) interpretation of petitioner’s second MRI
result, i.e., petitioner has a permanent damage in the brain, which can happen either after a head
injury or after a stroke. Dr. Perez concluded that petitioner has post-traumatic or post concussion
syndrome.41

Respondents, on the other hand, denied all the material allegations of petitioner and, in turn,
countered the latter’s statement of facts, thus:
According to respondents PHI and DTPCI, a sufficient notice had been posted on the glass door of
the hotel leading to the swimming pool area to apprise the people, especially the hotel guests, that
the swimming pool area is open only from 7:00 a.m. to 7:00 p.m.42 Though the hotel’s swimming pool
area is open only between the aforestated time, the lights thereon are kept on until 10:00 p.m. for,
(1) security reasons; (2) housekeeping personnel to do the cleaning of the swimming pool
surroundings; and (3) people doing their exercise routine at the Slimmer’s World Gym adjacent to
the swimming pool area, which was then open until 10:00 p.m., to have a good view of the hotel’s
swimming pool. Even granting that the lights in the hotel’s swimming pool area were turned off, it
would not render the area completely dark as the Slimmer’s World Gym near it was well-
illuminated.43

Further, on 11 June 1995, at round 7:00 p.m., the hotel’s swimming pool attendant advised petitioner
and Delia to take their showers as it was already closing time. Afterwards, at around 7:40 p.m.,
Pearlie Benedicto-Lipana (Ms. Pearlie), the hotel staff nurse, who was at the hotel clinic located at
the mezzanine floor, received a call from the hotel telephone operator informing her that there was a
guest requiring medical assistance at the hotel’s swimming pool area located one floor above the
clinic.44

Immediately, Ms. Pearlie got hold of her medical kit and hurriedly went to the hotel’s swimming pool
area. There she saw Delia and petitioner, who told her that she was hit on the head by a folding
wooden counter top. Although petitioner looked normal as there was no indication of any blood or
bruise on her head, Ms. Pearlie still asked her if she needed any medical attention to which
petitioner replied that she is a doctor, she was fine and she did not need any medical attention.
Petitioner, instead, requested for a hirudoid cream to which Ms. Pearlie acceded.45

At about 8:00 p.m., after attending to petitioner, Ms. Pearlie went back to the hotel clinic to inform Dr.
Dalumpines of the incident at the hotel’s swimming pool area. But before she could do that, Dr.
Dalumpines had already chanced upon Delia and petitioner at the hotel’s coffee shop and the latter
reported to Dr. Dalumpines that her head was hit by a folding wooden counter top while she was
inside the hotel’s swimming pool area. When asked by Dr. Dalumpines how she was, petitioner
responded she is a doctor, she was fine and she was already attended to by the hotel nurse, who
went at the hotel’s swimming pool area right after the accident. Dr. Dalumpines then called Ms.
Pearlie to verify the same, which the latter confirmed.46

Afterwards, Dr. Dalumpines went back to petitioner and checked the latter’s condition. Petitioner
insisted that she was fine and that the hirudoid cream was enough. Having been assured that
everything was fine, Dr. Dalumpines requested petitioner to execute a handwritten
certification47 regarding the incident that occurred that night. Dr. Dalumpines then suggested to
petitioner to have an X-ray test. Petitioner replied that it was not necessary. Petitioner also refused
further medical attention.48

On 13 June 1995, petitioner called up Dr. Dalumpines. The call, however, had nothing to do with the
11 June 1995 incident. Instead, petitioner merely engaged in small talk with Dr. Dalumpines while
having her daily massage. The two talked about petitioner’s personal matters, i.e., past medical
history, differences with siblings and family over inheritance and difficulty in practice. Petitioner even
disclosed to Dr. Dalumpines that she once fell from a horse; that she had a stroke; had hysterectomy
and is incapable of having children for her uterus had already been removed; that she had blood
disorder, particularly lack of platelets, that can cause bleeding; and she had an "on" and "off"
headaches. Petitioner oftentimes called Dr. Dalumpines at the hotel clinic to discuss topics similar to
those discussed during their 13 June 1995 conversation.49
Also, during one of their telephone conversations, petitioner requested for a certification regarding
the 11 June 1995 incident inside the hotel’s swimming pool area. Dr. Dalumpines accordingly issued
Certification dated 7 September 1995, which states that:50

CERTIFICATION

This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to an accident at
the poolside at 7:45PM on 11 June 1995.

Same records show that there, she saw petitioner who claimed the folding countertop fell on her
head when she lifted it to enter the lifeguard’s counter to use the phone. She asked for Hirudoid.

The same evening petitioner met Dr. Dalumpines at the Coffee Shop. After narrating the poolside
incident and declining Dr. Dalumpines’ offer of assistance, she reiterated that the Hirudoid cream
was enough and that petitioner being a doctor herself, knew her condition and she was all right.

This certification is given upon the request of petitioner for whatever purpose it may serve, 7
September 1995 at Makati City.51 (Emphasis supplied).

Petitioner personally picked up the afore-quoted Certification at the hotel clinic without any objection
as to its contents.52

From 11 June 1995 until 7 September 1995, the hotel clinic never received any complaint from
petitioner regarding the latter’s condition. The hotel itself neither received any written complaint from
petitioner.53

After trial, the court a quo in its Decision dated 21 February 2006 dismissed petitioner’s Complaint
for lack of merit.

The trial court found petitioner’s testimony self-serving, thus, devoid of credibility. Petitioner failed to
present any evidence to substantiate her allegation that the lights in the hotel’s swimming pool area
were shut off at the time of the incident. She did not even present her friend, Delia, to corroborate
her testimony. More so, petitioner’s testimony was contradicted by one of the witnesses presented
by the respondents who positively declared that it has been a normal practice of the hotel
management not to put off the lights until 10:00 p.m. to allow the housekeepers to do the cleaning of
the swimming pool surroundings, including the toilets and counters. Also, the lights were kept on for
security reasons and for the people in the nearby gym to have a good view of the swimming pool
while doing their exercise routine. Besides, there was a remote possibility that the hotel’s swimming
pool area was in complete darkness as the aforesaid gym was then open until 10:00 p.m., and the
lights radiate to the hotel’s swimming pool area. As such, petitioner would not have met the accident
had she only acted with care and caution.54

The trial court further struck down petitioner’s contention that the hotel management did not extend
medical assistance to her in the aftermath of the accident. Records showed that the hotel
management immediately responded after being notified of the accident. The hotel nurse and the
two chambermaids placed an ice pack on petitioner’s head. They were willing to extend further
emergency assistance but petitioner refused and merely asked for a hirudoid cream. Petitioner even
told them she is a doctor and she was fine. Even the medical services offered by the hotel physician
were turned down by petitioner. Emphatically, petitioner cannot fault the hotel for the injury she
sustained as she herself did not heed the warning that the swimming pool area is open only from
7:00 a.m. to 7:00 p.m. As such, since petitioner’s own negligence was the immediate and proximate
cause of her injury, she cannot recover damages.55
The trial court similarly observed that the records revealed no indication that the head injury
complained of by petitioner was the result of the alleged 11 June 1995 accident. Firstly, petitioner
had a past medical history which might have been the cause of her recurring brain injury. Secondly,
the findings of Dr. Perez did not prove a causal relation between the 11 June 1995 accident and the
brain damage suffered by petitioner. Even Dr. Perez himself testified that the symptoms being
experienced by petitioner might have been due to factors other than the head trauma she allegedly
suffered. It bears stressing that petitioner had been suffering from different kinds of brain problems
since she was 18 years old, which may have been the cause of the recurring symptoms of head
injury she is experiencing at present. Absent, therefore, of any proof establishing the causal relation
between the injury she allegedly suffered on 11 June 1995 and the head pains she now suffers, her
claim must fail. Thirdly, Dr. Teresita Sanchez’s (Dr. Sanchez) testimony cannot be relied upon since
she testified on the findings and conclusions of persons who were never presented in court. Ergo,
her testimony thereon was hearsay. Fourthly, the medical reports/evaluations/certifications issued by
myriads of doctors whom petitioner sought for examination or treatment were neither identified nor
testified to by those who issued them. Being deemed as hearsay, they cannot be given probative
value. Even assuming that petitioner suffered head injury as a consequence of the 11 June 1995
accident, she cannot blame anyone but herself for staying at the hotel’s swimming pool area beyond
its closing hours and for lifting the folding wooden counter top that eventually hit her head.56

For petitioner’s failure to prove that her serious and permanent injury was the result of the 11 June
1995 accident, thus, her claim for actual or compensatory damages, loss of income, moral damages,
exemplary damages and attorney’s fees, must all fail.57

With regard to respondent First Lepanto’s liability, the trial court ruled that under the contract of
insurance, suffice it to state that absent any cause for any liability against respondents PHI and
DTPCI, respondent First Lepanto cannot be made liable thereon.

Dissatisfied, petitioner elevated the matter to the Court of Appeals with the following assignment of
errors: (1) the trial court erred in finding that the testimony of petitioner is self-serving and thus void
of credibility; (2) the trial court erred in applying the doctrine of proximate cause in cases of breach of
contract and even assuming arguendo that the doctrine is applicable, petitioner was able to prove by
sufficient evidence the causal connection between her injuries and respondents PHI and DTPCI’s
negligent act; and (3) the trial court erred in holding that petitioner is not entitled to damages.58

On 9 August 2007, the Court of Appeals rendered a Decision affirming the findings and conclusions
of the trial court.

The Court of Appeals ratiocinated in this wise:

At the outset, it is necessary for our purpose to determine whether to decide this case on the theory
that herein respondents PHI and DTPCI are liable for breach of contract or on the theory of quasi-
delict.

xxxx

It cannot be gainsaid that herein petitioner’s use of the hotel’s pool was only upon the invitation of
Delia, the hotel’s registered guest. As such, she cannot claim contractual relationship between her
and the hotel. Since the circumstances of the present case do not evince a contractual relation
between petitioner and respondents, the rules on quasi-delict , thus, govern.

The pertinent provision of Art. 2176 of the Civil Code which states: "Whoever by act or omission
causes damage to another, there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called
quasi-delict."

A perusal of Article 2176 shows that obligations arising from quasi-delict or tort, also known as extra-
contractual obligations, arise only between parties not otherwise bound by contract, whether express
or implied. Thus, to sustain a claim liability under quasi-delict, the following requisites must concur:
(a) damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other person
for whose acts he must respond; and (c) the connection of cause and effect between the fault or
negligence of the defendant and the damages incurred by the plaintiff.

Viewed from the foregoing, the question now is whether respondents PHI and DTPCI and its
employees were negligent? We do not think so. Several factors militate against petitioner’s
contention.

One. Petitioner recognized the fact that the pool area’s closing time is 7:00 p.m.. She,
herself, admitted during her testimony that she was well aware of the sign when she and
Delia entered the pool area. Hence, upon knowing, at the outset, of the pool’s closing time,
she took the risk of overstaying when she decided to take shower and leave the area beyond
the closing hour. In fact, it was only upon the advise of the pool attendants that she
thereafter took her shower.

Two. She admitted, through her certification that she lifted the wooden bar countertop, which
then fell onto her head. The admission in her certificate proves the circumstances
surrounding the occurrence that transpired on the night of 11 June 1995. This is contrary to
her assertion in the complaint and testimony that, while she was passing through the counter
door, she was suddenly knocked out by a hard and heavy object. In view of the fact that she
admitted having lifted the counter top, it was her own doing, therefore, that made the counter
top fell on to her head.

Three. We cannot likewise subscribe to petitioner’s assertion that the pool area was totally
dark in that she herself admitted that she saw a telephone at the counter after searching for
one. It must be noted that petitioner and Delia had walked around the pool area with ease
since they were able to proceed to the glass entrance door from shower room, and back to
the counter area where the telephone was located without encountering any untoward
incident. Otherwise, she could have easily stumbled over, or slid, or bumped into something
while searching for the telephone. This negates her assertion that the pool area was
completely dark, thereby, totally impairing her vision.

xxxx

The aforementioned circumstances lead us to no other conclusion than that the proximate and
immediate cause of the injury of petitioner was due to her own negligence.

Moreover, petitioner failed to sufficiently substantiate that the medical symptoms she is currently
experiencing are the direct result of the head injury she sustained on 11 June 1995 as was aptly
discussed in the lower court’s findings.

xxxx

It bears stressing that in civil cases, the law requires that the party who alleges a fact and
substantially asserts the affirmative of the issue has the burden of proving it. Hence, for petitioner to
be entitled to damages, she must show that she had suffered an actionable injury. Regrettably,
petitioner failed in this regard.59 (Emphasis supplied).

Petitioner’s Motion for Reconsideration was denied for lack of merit in a Resolution dated 5
November 2007.

Hence, this Petition raising the following issues:

(1) Whether or not the findings of fact of the trial court and of the Court of Appeals are
conclusive in this case.

(2) Whether or not herein respondents PHI and DTPCI are responsible by implied contract to
exercise due care for the safety and welfare of the petitioner.

(3) Whether or not the cause of action of the petitioner can be based on both breach of
contract and tort.

(4) Whether or not it is respondents PHI and DTPCI and its employees who are liable to the
petitioner for negligence, applying the well-established doctrines of res ipsa loquitur and
respondeat superior.

(5) Whether the petitioner’s debilitating and permanent injuries were a result of the accident
she suffered at the hotel on 11 June 1995.

(6) Whether or not the petitioner is entitled to the payment of damages, attorney’s fees,
interest, and the costs of suit.

(7) Whether or not the respondent insurance company is liable, even directly, to the
petitioner.

(8) Whether or not petitioner’s motion for reconsideration of the decision of the Court of
Appeals is pro forma.60

Petitioner argues that the rule that "findings of fact of the lower courts are conclusive and must be
respected on appeal" finds no application herein because this case falls under the jurisprudentially
established exceptions. Moreover, since the rationale behind the afore-mentioned rule is that "the
trial judge is in a vantage point to appreciate the conduct and behavior of the witnesses and has the
unexcelled opportunity to evaluate their testimony," one logical exception to the rule that can be
deduced therefrom is when the judge who decided the case is not the same judge who heard and
tried the case.

Petitioner further faults the Court of Appeals in ruling that no contractual relationship existed
between her and respondents PHI and DTPCI since her use of the hotel’s swimming pool facility
was only upon the invitation of the hotel’s registered guest. On the contrary, petitioner maintains that
an implied contract existed between them in view of the fact that the hotel guest status extends to all
those who avail of its services—its patrons and invitees. It follows then that all those who patronize
the hotel and its facilities, including those who are invited to partake of those facilities, like petitioner,
are generally regarded as guests of the hotel. As such, respondents PHI and DTPCI are responsible
by implied contract for the safety and welfare of petitioner while the latter was inside their premises
by exercising due care, which they failed to do.
Petitioner even asserts that the existence of a contract between the parties does not bar any liability
for tort since the act that breaks a contract may also be a tort. Hence, the concept of change of
theory of cause of action pointed to by respondents is irrelevant.

Petitioner similarly avows that the doctrines of res ipsa loquitur and respondeat superior are
applicable in this case. She argues that a person who goes in a hotel without a "bukol" or hematoma
and comes out of it with a "bukol" or hematoma is a clear case of res ipsa loquitur. It was an accident
caused by the fact that the hotel staff was not present to lift the heavy counter top for petitioner as is
normally expected of them because they negligently locked the main entrance door of the hotel’s
swimming pool area. Following the doctrine of res ipsa loquitur, respondents PHI and DTPCI’s
negligence is presumed and it is incumbent upon them to prove otherwise but they failed to do so.
Further, respondents PHI and DTPCI failed to observe all the diligence of a good father of a family in
the selection and supervision of their employees, hence, following the doctrine of respondeat
superior, they were liable for the negligent acts of their staff in not verifying if there were still people
inside the swimming pool area before turning off the lights and locking the door. Had respondents
PHI and DTPCI’s employees done so, petitioner would not have been injured. Since respondents
PHI and DTPCI’s negligence need not be proved, the lower courts erred in shifting the burden to
petitioner and, thereafter, holding the hotel and its employees not negligent for petitioner’s failure to
prove their negligence. Moreover, petitioner alleges that there was no contributory negligence on her
part for she did not do anything that could have contributed to her injury. And, even if there was, the
same does not bar recovery.

Petitioner equally declares that the evidence on record, including the objective medical findings, had
firmly established that her permanent debilitating injuries were the direct result of the 11 June 1995
accident inside the hotel’s swimming pool area. This fact has not been totally disputed by the
respondents. Further, the medical experts who had been consulted by petitioner were in unison in
their diagnoses of her condition. Petitioner was also able to prove that the falling of the folding
wooden counter top on her head while she was at the hotel’s swimming pool area was the cause of
her head, eye and neck injuries.

Petitioner reiterates her claim for an award of damages, to wit: actual, including loss of income;
moral, exemplary; as well as attorney’s fees, interest and costs of suit. She states that respondents
PHI and DTPCI are liable for quasi-delict under Articles 19, 2176 and 2180 of the New Civil Code. At
the same time, they are liable under an implied contract for they have a public duty to give due
courtesy, to exercise reasonable care and to provide safety to hotel guests, patrons and invitees.
Respondent First Lepanto, on the other hand, is directly liable under the express contract of
insurance.

Lastly, petitioner contends that her Motion for Reconsideration before the Court of Appeals was not
pro forma for it specifically pointed out the alleged errors in the Court of Appeals Decision.

The instant Petition is devoid of merit.

Primarily, only errors of law and not of facts are reviewable by this Court in a Petition for Review on
Certiorari under Rule 45 of the Rules of Court.61 This Court is not a trier of facts and it is beyond its
function to re-examine and weigh anew the respective evidence of the parties.62 Besides, this Court
adheres to the long standing doctrine that the factual findings of the trial court, especially when
affirmed by the Court of Appeals, are conclusive on the parties and this Court.63 Nonetheless, this
Court has, at times, allowed exceptions thereto, to wit:

(a) When the findings are grounded entirely on speculation, surmises, or conjectures;
 (b) When the inference made is manifestly mistaken, absurd, or impossible;

(c) When there is grave abuse of discretion;

(d) When the judgment is based on a misapprehension of facts;

(e) When the findings of facts are conflicting;

(f) When in making its findings the Court of Appeals went beyond the issues of the case, or
its findings are contrary to the admissions of both the appellant and the appellee;

(g) When the Court of Appeals’ findings are contrary to those by the trial court;

(h) When the findings are conclusions without citation of specific evidence on which they are
based;

(i) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs
are not disputed by the respondent;

(j) When the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or

(k) When the Court of Appeals manifestly overlooked certain relevant facts not disputed by
the parties, which, if properly considered, would justify a different conclusion.64

Upon meticulous perusal of the records, however, this Court finds that none of these exceptions is
obtaining in this case. No such justifiable or compelling reasons exist for this Court to depart from
the general rule. This Court will not disturb the factual findings of the trial court as affirmed by the
Court of Appeals and adequately supported by the evidence on record.

Also, this Court will not review the factual findings of the trial court simply because the judge who
heard and tried the case was not the same judge who penned the decision. This fact alone does not
diminish the veracity and correctness of the factual findings of the trial court.65 Indeed, "the efficacy of
a decision is not necessarily impaired by the fact that its writer only took over from a colleague who
had earlier presided at the trial, unless there is showing of grave abuse of discretion in the factual
findings reached by him."66 In this case, there was none.

It bears stressing that in this jurisdiction there is a disputable presumption that the trial court’s
decision is rendered by the judge in the regular performance of his official duties. While the said
presumption is only disputable, it is satisfactory unless contradicted or overcame by other evidence.
Encompassed in this presumption of regularity is the presumption that the trial court judge, in
resolving the case and drafting the decision, reviewed, evaluated, and weighed all the evidence on
record. That the said trial court judge is not the same judge who heard the case and received the
evidence is of little consequence when the records and transcripts of stenographic notes (TSNs) are
complete and available for consideration by the former,67 just like in the present case.

Irrefragably, the fact that the judge who penned the trial court’s decision was not the same judge
who heard the case and received the evidence therein does not render the findings in the said
decision erroneous and unreliable. While the conduct and demeanor of witnesses may sway a trial
court judge in deciding a case, it is not, and should not be, his only consideration. Even more vital for
the trial court judge’s decision are the contents and substance of the witnesses’ testimonies, as
borne out by the TSNs, as well as the object and documentary evidence submitted and made part of
the records of the case.68

This Court examined the records, including the TSNs, and found no reason to disturb the factual
findings of both lower courts. This Court, thus, upholds their conclusiveness.

In resolving the second and third issues, a determination of the cause of action on which petitioner’s
Complaint for Damages was anchored upon is called for.

Initially, petitioner was suing respondents PHI and DTPCI mainly on account of their negligence but
not on any breach of contract. Surprisingly, when the case was elevated on appeal to the Court of
Appeals, petitioner had a change of heart and later claimed that an implied contract existed between
her and respondents PHI and DTPCI and that the latter were liable for breach of their obligation to
keep her safe and out of harm. This allegation was never an issue before the trial court. It was not
the cause of action relied upon by the petitioner not until the case was before the Court of Appeals.
Presently, petitioner claims that her cause of action can be based both on quasi-delict and breach of
contract.

A perusal of petitioner’s Complaint evidently shows that her cause of action was based solely on
quasi-delict. Telling are the following allegations in petitioner’s Complaint:

6. THAT, in the evening of 11 June 1995, between the hours from 7:00 to 8:00 o’clock, after
herein petitioner and her friend from New York, Delia, the latter being then a Hotel guest,
were taking their shower after having a dip in the hotel’s swimming pool, without any notice
or warning, the Hotel’s staff put off all the lights within the pool area including the lights on
the hallway and also locked the main entrance door of the pool area, x x x;

7. THAT, Hotel guest Delia started to panic while petitioner pacified her by telling her not to
worry as they would both find their way out. Petitioner knowing that within the area there is a
house phone, started to look around while Delia was following her, eventually petitioner saw
a phone behind the counter x x x, that while slowly moving on towards the phone on a
stooping manner due to the darkness CAUSED BY UNTIMELY AND NEGLIGENTLY
PUTTING OFF WITH THE LIGHTS BY THE HEREIN RESPONDENTS PHI AND DTPCI’S
EMPLOYEE while passing through the open counter door with its Folding Counter Top also
opened, x x x, a hard and heavy object fell onto the head of the petitioner that knocked her
down almost unconscious which hard and heavy object turned out to be the Folding Counter
Top;

8. THAT, Delia immediately got hold of the house phone and notified the Hotel Telephone
Operator about the incident, immediately the hotel staffs (sic) arrived but they were stranded
behind the main door of the pool entrance and it too (sic) them more than twenty (20)
minutes to locate the hotel maintenance employee who holds the key of the said main
entrance door;

9. THAT, when the door was opened, two Hotel Chamber Maids assisted the petitioner to get
out of the counter door. Petitioner being a Physician tried to control her feelings although
groggy and requested for a HURIDOID, a medicine for HEMATOMA, as a huge lump
developed on her head while the two Chamber Maids assisted petitioner by holding the bag
of ice on her head and applying the medicine on the huge lump;

10. THAT, petitioner after having recovered slightly from her nightmare, though still feeling
weak, asked to be assisted to the Hotel Coffee Shop to take a rest but requested for the
 hotel’s Physician. Despite her insistent requests, the Dusit Hotel refused to lift a finger to
assists petitioner who was then in distress until a lady approached and introduced herself as
the Hotel’s house Doctor. Instead however of assisting petitioner by asking her what kind of
assistance the Hotel could render, in a DISCOURTEOUS MANNER presented instead a
paper and demanding petitioner to affix her signature telling her that the Hotel Management
would only assists and answer for all expenses incurred if petitioner signs the paper
presented, but she refused and petitioner instead wrote a marginal note on the said paper
stating her reason therefore, said paper later on turned out to be a WAIVER OF RIGHT or
QUIT CLAIM;

xxxx

14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCI’s gross
negligence despite medical assistance, petitioner started to feel losing her memory that
greatly affected and disrupted the practice of her chosen profession x x x.

xxxx

19. THAT, due to respondents PHI and DTPCI’s gross negligence as being narrated which
caused petitioner to suffer sleepless nights, depression, mental anguish, serious anxiety,
wounded feelings, and embarrassment with her Diplomate friends in the profession and
industry, her social standing in the community was greatly affected and hence, respondents
PHI and DTPCI must be imposed the hereunder damages, prayed for x x x and Artile (sic)
2176 and 2199 of the New Civil Code of the Philippines x x x.

xxxx

22. THAT, as to Moral, Exemplary and Actual Damages, as well as petitioner’s Loss of
Income, the amounts are stated in its prayer hereunder.69

It is clear from petitioner’s allegations that her Complaint for Damages was predicated on the alleged
negligence of respondents PHI and DTPCI’s staff in the untimely putting off of all the lights within the
hotel’s swimming pool area, as well as the locking of its main door, prompting her to look for a way
out leading to the fall of the folding wooden counter top on her head causing her serious brain injury.
The said negligence was allegedly compounded by respondents PHI and DTPCI’s failure to render
prompt and adequate medical assistance. These allegations in petitioner’s Complaint constitute a
cause of action for quasi-delict, which under the New Civil Code is defined as an act, or omission
which causes damage to another, there being fault or negligence.70

It is evident from petitioner’s Complaint and from her open court testimony that the reliance was on
the alleged tortious acts committed against her by respondents PHI and DTPCI, through their
management and staff. It is now too late in the day to raise the said argument for the first time before
this Court.71

Petitioner’s belated reliance on breach of contract as her cause of action cannot be sanctioned by
this Court. Well-settled is the rule that a party is not allowed to change the theory of the case or the
cause of action on appeal. Matters, theories or arguments not submitted before the trial court cannot
be considered for the first time on appeal or certiorari.72 When a party adopts a certain theory in the
court below, he will not be permitted to change his theory on appeal for to permit him to do so would
not only be unfair to the other party but it would also be offensive to the basic rules of fair play,
justice and due process.73 Hence, a party is bound by the theory he adopts and by the cause of
action he stands on and cannot be permitted after having lost thereon to repudiate his theory and
cause of action and adopt another and seek to re-litigate the matter anew either in the same forum
or on appeal.74

In that regard, this Court finds it significant to take note of the following differences between quasi-
delict (culpa aquilina) and breach of contract (culpa contractual). In quasi-delict, negligence is direct,
substantive and independent, while in breach of contract, negligence is merely incidental to the
performance of the contractual obligation; there is a pre-existing contract or obligation.75 In quasi-
delict, the defense of "good father of a family" is a complete and proper defense insofar as parents,
guardians and employers are concerned, while in breach of contract, such is not a complete and
proper defense in the selection and supervision of employees.76 In quasi- delict , there is no
presumption of negligence and it is incumbent upon the injured party to prove the negligence of the
defendant, otherwise, the former’s complaint will be dismissed, while in breach of contract,
negligence is presumed so long as it can be proved that there was breach of the contract and the
burden is on the defendant to prove that there was no negligence in the carrying out of the terms of
the contract; the rule of respondeat superior is followed.77

Viewed from the foregoing, petitioner’s change of theory or cause of action from quasi-delict to
breach of contract only on appeal would necessarily cause injustice to respondents PHI and DTPCI.
First, the latter will have no more opportunity to present evidence to contradict petitioner’s new
argument. Second, the burden of proof will be shifted from petitioner to respondents PHI and DTPCI.
Petitioner’s change of theory from quasi-delict to breach ofcontract must be repudiated.

As petitioner’s cause of action is based on quasi-delict, it is incumbent upon her to prove the
presence of the following requisites before respondents PHI and DTPCI can be held liable, to wit: (a)
damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other person for
whose acts he must respond; and (c) the connection of cause and effect between the fault or
negligence of the defendant and the damages incurred by the plaintiff.78 Further, since petitioner’s
case is for quasi-delict , the negligence or fault should be clearly established as it is the basis of her
action.79 The burden of proof is upon petitioner. Section 1, Rule 131 of the Rules of Court provides
that "burden of proof is the duty of a party to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence required by law." It is then up for the
plaintiff to establish his cause of action or the defendant to establish his defense. Therefore, if the
plaintiff alleged in his complaint that he was damaged because of the negligent acts of the
defendant, he has the burden of proving such negligence. It is even presumed that a person takes
ordinary care of his concerns. The quantum of proof required is preponderance of evidence.80

In this case, as found by the trial court and affirmed by the Court of Appeals, petitioner utterly failed
to prove the alleged negligence of respondents PHI and DTPCI. Other than petitioner’s self-serving
testimony that all the lights in the hotel’s swimming pool area were shut off and the door was locked,
which allegedly prompted her to find a way out and in doing so a folding wooden counter top fell on
her head causing her injury, no other evidence was presented to substantiate the same. Even her
own companion during the night of the accident inside the hotel’s swimming pool area was never
presented to corroborate her allegations. Moreover, petitioner’s aforesaid allegations were
successfully rebutted by respondents PHI and DTPCI. Here, we quote with conformity the
observation of the trial court, thus:

x x x Besides not being backed up by other supporting evidence, said statement is being
contradicted by the testimony of Engineer Dante L. Costas,81 who positively declared that it has been
a normal practice of the Hotel management not to put off the lights until 10:00P.M. in order to allow
the housekeepers to do the cleaning of the pool’s surrounding, the toilets and the counters. It was
also confirmed that the lights were kept on for security reasons and so that the people exercising in
the nearby gym may be able to have a good view of the swimming pool. This Court also takes note
that the nearby gymnasium was normally open until 10:00 P.M. so that there was a remote
possibility the pool area was in complete darkness as was alleged by herein petitioner, considering
that the illumination which reflected from the gym. Ergo, considering that the area were sufficient
(sic) illuminated when the alleged incident occurred, there could have been no reason for the
petitioner to have met said accident, much less to have been injured as a consequence thereof, if
she only acted with care and caution, which every ordinary person is expected to do.82

More telling is the ratiocination of the Court of Appeals, to wit:

Viewed from the foregoing, the question now is whether respondents PHI and DTPCI and its
employees were negligent? We do not think so. Several factors militate against petitioner’s
contention.

One. Petitioner recognized the fact that the pool area’s closing time is 7:00 p.m.. She, herself,
admitted during her testimony that she was well aware of the sign when she and Delia entered the
pool area. Hence, upon knowing, at the outset, of the pool’s closing time, she took the risk of
overstaying when she decided to take shower and leave the area beyond the closing hour. In fact, it
was only upon the advise of the pool attendants that she thereafter took her shower.

Two. She admitted, through her certification, that she lifted the wooden bar countertop, which then
fell on to her head. The admission in her certificate proves the circumstances surrounding the
occurrence that transpired on the night of 11 June 1995. This is contrary to her assertion in the
complaint and testimony that, while she was passing through the counter door, she was suddenly
knocked out by a hard and heavy object. In view of the fact that she admitted having lifted the
countertop, it was her own doing, therefore, that made the counter top fell on to her head.

Three. We cannot likewise subscribe to petitioner’s assertion that the pool area was totally dark in
that she herself admitted that she saw a telephone at the counter after searching for one. It must be
noted that petitioner and Delia had walked around the pool area with ease since they were able to
proceed to the glass entrance door from the shower room, and back to the counter area where the
telephone was located without encountering any untoward incident. Otherwise, she could have
easily stumbled over, or slid, or bumped into something while searching for the telephone. This
negates her assertion that the pool area was completely dark, thereby, totally impairing her vision.

xxxx

The aforementioned circumstances lead us to no other conclusion than that the proximate and
immediate cause of the injury of petitioner was due to her own negligence.83 (Emphasis supplied).

Even petitioner’s assertion of negligence on the part of respondents PHI and DTPCI in not rendering
medical assistance to her is preposterous. Her own Complaint affirmed that respondents PHI and
DTPCI afforded medical assistance to her after she met the unfortunate accident inside the hotel’s
swimming pool facility. Below is the portion of petitioner’s Complaint that would contradict her very
own statement, thus:

14. THAT, due to the unfortunate incident caused by respondents PHI and DTPCI’s gross
negligence despite medical assistance, petitioner started to feel losing her memory that greatly
affected and disrupted the practice of her chosen profession. x x x.84 (Emphasis supplied).

Also, as observed by the trial court, respondents PHI and DTPCI, indeed, extended medical
assistance to petitioner but it was petitioner who refused the same. The trial court stated, thus:
Further, herein petitioner’s asseverations that the Hotel Management did not extend medical
assistance to her in the aftermath of the alleged accident is not true. Again, this statement was not
supported by any evidence other that the sole and self-serving testimony of petitioner. Thus, this
Court cannot take petitioner’s statement as a gospel truth. It bears stressing that the Hotel
Management immediately responded after it received notice of the incident. As a matter of fact, Ms.
Pearlie, the Hotel nurse, with two chambermaids holding an ice bag placed on petitioner’s head
came to the petitioner to extend emergency assistance when she was notified of the incident, but
petitioner merely asked for Hirudoid, saying she was fine, and that she was a doctor and know how
to take care of herself. Also, the Hotel, through its in-house physician, Dr. Dalumpines offered its
medical services to petitioner when they met at the Hotel’s coffee shop, but again petitioner declined
the offer. Moreover, the Hotel as a show of concern for the petitioner’s welfare, shouldered the
expenses for the MRI services performed on petitioner at the Makati Medical Center. Emphatically,
petitioner herself cannot fault the Hotel for the injury she allegedly suffered because she herself did
not heed the warning at the pool to the effect that it was only open from 7:00 to 7:00 P.M. Thus,
when the petitioner’s own negligence was the immediate and proximate cause of his injury,
shecannot recover damages x x x.85

With the foregoing, the following were clearly established, to wit: (1) petitioner stayed in the hotel’s
swimming pool facility beyond its closing hours; (2) she lifted the folding wooden counter top that
eventually hit her head; and (3) respondents PHI and DTPCI extended medical assistance to her. As
such, no negligence can be attributed either to respondents PHI and DTPCI or to their staff and/or
management. Since the question of negligence is one of fact, this Court is bound by the said factual
findings made by the lower courts. It has been repeatedly held that the trial court's factual findings,
when affirmed by the Court of Appeals, are conclusive and binding upon this Court, if they are not
tainted with arbitrariness or oversight of some fact or circumstance of significance and influence.
Petitioner has not presented sufficient ground to warrant a deviation from this rule.86

With regard to petitioner’s contention that the principles of res ipsa loquitur and respondeat superior
are applicable in this case, this Court holds otherwise.

Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction speaks for
itself." It relates to the fact of an injury that sets out an inference to the cause thereof or establishes
the plaintiff’s prima facie case. The doctrine rests on inference and not on presumption. The facts of
the occurrence warrant the supposition of negligence and they furnish circumstantial evidence of
negligence when direct evidence is lacking.87 Simply stated, this doctrine finds no application if there
is direct proof of absence or presence of negligence. If there is sufficient proof showing the
conditions and circumstances under which the injury occurred, then the creative reason for the said
doctrine disappears.88

Further, the doctrine of res ipsa loquitur applies where, (1) the accident was of such character as to
warrant an inference that it would not have happened except for the defendant’s negligence; (2) the
accident must have been caused by an agency or instrumentality within the exclusive management
or control of the person charged with the negligence complained of; and (3) the accident must not
have been due to any voluntary action or contribution on the part of the person injured.89

In the case at bench, even granting that respondents PHI and DTPCI’s staff negligently turned off
the lights and locked the door, the folding wooden counter top would still not fall on petitioner’s head
had she not lifted the same. Although the folding wooden counter top is within the exclusive
management or control of respondents PHI and DTPCI, the falling of the same and hitting the head
of petitioner was not due to the negligence of the former. As found by both lower courts, the folding
wooden counter top did not fall on petitioner’s head without any human intervention. Records
showed that petitioner lifted the said folding wooden counter top that eventually fell and hit her head.
The same was evidenced by the, (1) 11 June 1995 handwritten certification of petitioner herself; (2)
her Letter dated 30 August 1995 addressed to Mr. Yoshikazu Masuda (Mr. Masuda), General
Manager of Dusit Hotel; and, (3) Certification dated 7 September 1995 issued to her by Dr.
Dalumpines upon her request, which contents she never questioned.

Here, we, respectively, quote the 11 June 1995 handwritten certification of petitioner; her letter to Mr.
Masuda dated 30 August 1995; and Dr. Dalumpines’ Certification dated 7 September 1995, to wit:

Petitioner’s 11 June 1995 Handwritten Certification:

I was requested by Dr. Dalumpines to write that I was assured of assistance should it be necessary
with regard an accident at the pool. x x x The phone was in an enclosed area on a chair – I lifted the
wooden bar counter top which then fell on my head producing a large hematoma x x x.90

Petitioner’s Letter addressed to Mr. Masuda dated 30 August 1995:

Dear Mr. Masuda,

xxxx

x x x We searched and saw a phone on a chair behind a towel counter. However, in order to get
behind the counter I had to lift a hinged massive wooden section of the counter which subsequently
fell and knocked me on my head x x x.91

Dr. Dalumpines’ Certification dated 7 September 1995:

CERTIFICATION

This is to certify that as per Clinic records, duty nurse Pearlie was called to attend to an accident at
the poolside at 7:45PM on 11 June 1995.

Same records show that there, she saw petitioner who claimed the folding countertop fell on her
head when she lifted it to enter the lifeguard’s counter to use the phone. She asked for Hirudoid.

The same evening petitioner met Dr. Dalumpnes at the Coffee Shop. After narrating the poolside
incident and declining Dr. Dalumpines’ offer of assistance, she reiterated that the Hirudoid cream
was enough and that petitioner]being a doctor herself, knew her condition and she was all right.

This certification is given upon the request of petitioner for whatever purpose it may serve, 7
September 1995 at Makati City.92 (Emphasis supplied).

This Court is not unaware that in petitioner’s Complaint and in her open court testimony, her
assertion was, "while she was passing through the counter door, she was suddenly knocked out by a
hard and heavy object, which turned out to be the folding wooden counter top." However, in her
open court testimony, particularly during cross-examination, petitioner confirmed that she made such
statement that "she lifted the hinge massive wooden section of the counter near the swimming
pool."93 In view thereof, this Court cannot acquiesce petitioner’s theory that her case is one of res
ipsa loquitur as it was sufficiently established how petitioner obtained that "bukol" or "hematoma."

The doctrine of respondeat superior finds no application in the absence of any showing that the
employees of respondents PHI and DTPCI were negligent. Since in this case, the trial court and the
appellate court found no negligence on the part of the employees of respondents PHI and DTPCI,
thus, the latter cannot also be held liable for negligence and be made to pay the millions of pesos
damages prayed for by petitioner.

The issue on whether petitioner’s debilitating and permanent injuries were the result of the accident
she suffered at the hotel’s swimming pool area on 11 June 1995 is another question of fact, which is
beyond the function of this Court to resolve. More so, this issue has already been properly passed
upon by the trial court and the Court of Appeals. To repeat, this Court is bound by the factual
findings of the lower courts and there is no cogent reason to depart from the said rule.

The following observations of the trial court are controlling on this matter:

Firstly, petitioner had a past medical history which might have been the cause of her recurring brain
injury.

Secondly, the findings of Dr. Perez did not prove a causal relation between the 11 June 1995
accident and the brain damage suffered by petitioner. Dr. Perez himself testified that the symptoms
being experienced by petitioner might have been due to factors other than the head trauma she
allegedly suffered. Emphasis must be given to the fact that petitioner had been suffering from
different kinds of brain problems since she was 18 years old, which may have been the cause of the
recurring symptoms of head injury she is experiencing at present.

Thirdly, Dr. Sanchez’s testimony cannot be relied upon since she testified on the findings and
conclusions of persons who were never presented in court. Ergo, her testimony thereon was
hearsay. A witness can testify only with regard to facts of which they have personal knowledge.
Testimonial or documentary evidence is hearsay if it is based, not on the personal knowledge of the
witness, but on the knowledge of some other person not on the witness stand. Consequently,
hearsay evidence -- whether objected to or not -- has no probative value.94

Fourthly, the medical reports/evaluations/certifications issued by myriads of doctors whom petitioner

sought for examination or treatment were neither identified nor testified to by those who issued them.
Being deemed as hearsay, they cannot be given probative value. 1âwphi1

The aforesaid medical reports/evaluations/certifications of different doctors in favor of petitioner

cannot be given probative value and their contents cannot be deemed to constitute proof of the facts
stated therein. It must be stressed that a document or writing which is admitted not as independent
evidence but merely as part of the testimony of a witness does not constitute proof of the facts
related therein.95 In the same vein, the medical certificate which was identified and interpreted in court
by another doctor was not accorded probative value because the doctor who prepared it was not
presented for its identification. Similarly, in this case, since the doctors who examined petitioner
were not presented to testify on their findings, the medical certificates issued on their behalf and
identified by another doctor cannot be admitted as evidence. Since a medical certificate involves an
opinion of one who must first be established as an expert witness, it cannot be given weight or credit
unless the doctor who issued it is presented in court to show his qualifications.96 Thus, an unverified
and unidentified private document cannot be accorded probative value. It is precluded because the
party against whom it is presented is deprived of the right and opportunity to cross-examine the
person to whom the statements or writings are attributed. Its executor or author should be presented
as a witness to provide the other party to the litigation the opportunity to question its contents. Being
mere hearsay evidence, failure to present the author of the letter renders its contents suspect and of
no probative value.97
All told, in the absence of negligence on the part of respondents PHI and DTPCI, as well as their
management and staff, they cannot be made Iiable to pay for the millions of damages prayed for by
the petitioner. Since respondents PHI and DTPCI arc not liable, it necessarily follows that
respondent First Lepanto cannot also be made liable under the contract or Insurance.

WHEREFORE, premises considered, the Decision and Resolution or the Court of Appeals in CA-
G.R. CV No. 87065 dated 9 August 2007 and 5 November 2007, respectively, are hereby
AFFIRMED. Costs against petitioner.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 175256 August 23, 2012

LILY LIM, Petitioner,

vs.
KOU CO PING a.k.a. CHARLIE CO, Respondent.

x-----------------------x

G.R. No. 179160

KOU CO PING a.k.a. CHARLIE CO, Petitioner,

vs.
LILY LIM, Respondent.

LEONARDO-DE CASTRO,*

PERLAS-BERNABE,**

DECISION

DEL CASTILLO, J.:

Is it forum shopping for a private complainant to pursue a civil complaint for specific performance
and damages, while appealing the judgment on the civil aspect of a criminal case for estafa?

Before the Court are consolidated Petitions for Review assailing the separate Decisions of the
Second and Seventeenth Divisions of the Court of Appeals (CA) on the above issue.

Lily Lim’s (Lim) Petition for Review1 assails the October 20, 2005 Resolution2 of the Second Division
in CA-G.R. CV No. 85138, which ruled on the above issue in the affirmative:
Due to the filing of the said civil complaint (Civil Case No. 5112396), Charlie Co filed the instant
motion to dismiss [Lily Lim’s] appeal, alleging that in filing said civil case, Lily Lim violated the rule
against forum shopping as the elements of litis pendentia are present.

This Court agrees.3

xxxx

IN VIEW OF THE FOREGOING, the appeal is DISMISSED.

SO ORDERED.4

On the other hand, Charlie Co’s (Co) Petition for Review5 assails the April 10, 2007 Decision6 of the
Seventeenth Division in CA-G.R. SP No. 93395 for ruling on the same issue in the negative:

We find no grave abuse of discretion committed by respondent judge. The elements of litis
pendentiaand forum-shopping were not met in this case.7

xxxx

WHEREFORE, in view of the foregoing, the instant petition is DENIED. This case is REMANDED to
the court of origin for further proceedings.

SO ORDERED.8

Factual Antecedents

In February 1999, FR Cement Corporation (FRCC), owner/operator of a cement manufacturing

plant, issued several withdrawal authorities9 for the account of cement dealers and traders, Fil-
Cement Center and Tigerbilt. These withdrawal authorities state the number of bags that the
dealer/trader paid for and can withdraw from the plant. Each withdrawal authority contained a
provision that it is valid for six months from its date of issuance, unless revoked by FRCC Marketing
Department.

Fil-Cement Center and Tigerbilt, through their administrative manager, Gail Borja (Borja), sold the
withdrawal authorities covering 50,000 bags of cement to Co for the amount of ₱ 3.15 million or ₱
63.00 per bag.10 On February 15, 1999, Co sold these withdrawal authorities to Lim allegedly at the
price of ₱ 64.00 per bag or a total of ₱ 3.2 million.11

Using the withdrawal authorities, Lim withdrew the cement bags from FRCC on a staggered basis.
She successfully withdrew 2,800 bags of cement, and sold back some of the withdrawal authorities,
covering 10,000 bags, to Co.

Sometime in April 1999, FRCC did not allow Lim to withdraw the remaining 37,200 bags covered by
the withdrawal authorities. Lim clarified the matter with Co and Borja, who explained that the plant
implemented a price increase and would only release the goods once Lim pays for the price
difference or agrees to receive a lesser quantity of cement. Lim objected and maintained that the
withdrawal authorities she bought were not subject to price fluctuations. Lim sought legal recourse
after her demands for Co to resolve the problem with the plant or for the return of her money had
failed.
The criminal case

An Information for Estafa through Misappropriation or Conversion was filed against Co before
Branch 154 of the Regional Trial Court (RTC) of Pasig City. The accusatory portion thereof reads:

On or about between the months of February and April 1999, in San Juan, Metro Manila and within
the jurisdiction of this Honorable Court, the accused, with intent to defraud Lily Lim, with grave abuse
of confidence, with unfaithfulness, received in trust from Lily Lim cash money in the amount of ₱
2,380,800.00 as payment for the 37,200 bags of cement, under obligation to deliver the 37,200 bags
of cement to said Lily Lim, but far from complying with his obligation, misappropriated, misapplied
and converted to his own personal use and benefit the said amount of ₱ 2,300,800.00 [sic] and
despite demands, the accused failed and refused to return said amount, to the damage and
prejudice of Lily Lim in the amount of ₱ 2,380,800.00.

Contrary to Law.12

The private complainant, Lily Lim, participated in the criminal proceedings to prove her damages.
She prayed for Co to return her money amounting to ₱ 2,380,800.00, foregone profits, and legal
interest, and for an award of moral and exemplary damages, as well as attorney’s fees.13

On November 19, 2003, the RTC of Pasig City, Branch 154, rendered its Order14 acquitting Co of the
estafa charge for insufficiency of evidence. The criminal court’s Order reads:

The first and second elements of the crime of estafa [with abuse of confidence under Article 315,
paragraph 1(b)] for which the accused is being charged and prosecuted were not established by the
prosecution’s evidence.

xxxx

In view of the absence of the essential requisites of the crime of estafa for which the accused is
being charged and prosecuted, as above discussed, the Court has no alternative but to dismiss the
case against the accused for insufficiency of evidence.15

WHEREFORE, in view of the foregoing, the Demurrer to Evidence is GRANTED, and the accused
is hereby ACQUITTED of the crime of estafa charged against him under the present information for
insufficiency of evidence.

Insofar as the civil liability of the accused is concerned, however, set this case for the reception of
his evidence on the matter on December 11, 2003 at 8:30 o’clock [sic] in the morning.

SO ORDERED.16

After the trial on the civil aspect of the criminal case, the Pasig City RTC also relieved Co of civil
liability to Lim in its December 1, 2004 Order.17 The dispositive portion of the Order reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered holding the accused CHARLIE
COnot civilly liable to the private complainant Lily Lim.

SO ORDERED.18
Lim sought a reconsideration of the above Order, arguing that she has presented preponderant
evidence that Co committed estafa against her.19

The trial court denied the motion in its Order20 dated February 21, 2005.

On March 14, 2005, Lim filed her notice of appeal21 on the civil aspect of the criminal case. Her
appeal was docketed as CA-G.R. CV No. 85138 and raffled to the Second Division of the CA.

The civil action for specific performance

On April 19, 2005, Lim filed a complaint for specific performance and damages before Branch 21 of
the RTC of Manila. The defendants in the civil case were Co and all other parties to the withdrawal
authorities, Tigerbilt, Fil-Cement Center, FRCC, Southeast Asia Cement, and La Farge Corporation.
The complaint, docketed as Civil Case No. 05-112396, asserted two causes of action: breach of
contract and abuse of rights. Her allegations read:

ALLEGATIONS COMMON
TO ALL CAUSES OF ACTION

xxxx

23. Charlie Co obligated himself to deliver to Lily Lim 50,000 bags of cement of ₱ 64.00 per bag on
an x-plant basis within 3 months from the date of their transaction, i.e. February 15, 1999. Pursuant
to said agreement, Lily Lim paid Charlie Co ₱ 3.2 Million while Charlie Co delivered to Lily Lim FR
Cement Withdrawal Authorities representing 50,000 bags of cement.

24. The withdrawal authorities issued by FR Cement Corp. allowed the assignee or holder thereof to
withdraw within a six-month period from date a certain amount of cement indicated therein. The
Withdrawal Authorities given to Lily Lim were dated either 3 February 1999 or 23 February 1999.
The Withdrawal Authorities were first issued to Tigerbilt and Fil-Cement Center which in turn
assigned them to Charlie Co. Charlie Co then assigned the Withdrawal Authorities to Lily Lim on
February 15, 1999. Through these series of assignments, Lily Lim acquired all the rights (rights to
withdraw cement) granted in said Withdrawal Authorities.

25. That these Withdrawal Authorities are valid is established by the fact that FR Cement earlier
allowed Lily Lim to withdraw 2,800 bags of cement on the basis thereof.

26. However, sometime 19 April 1999 (within the three (3)-month period agreed upon by Charlie Co
and Lily Lim and certainly within the six (6)-month period indicated in the Withdrawal Authorities
issued by FR Cement Corp.), Lily Lim attempted but failed to withdraw the remaining bags of cement
on account of FR Cement’s unjustified refusal to honor the Withdrawal Authorities. x x x

xxxx

FIRST CAUSE OF ACTION:

BREACH OF CONTRACT

30. Charlie Co committed and is therefore liable to deliver to Lily Lim 37,200 bags of cement. If he
cannot, then he must pay her the current fair market value thereof.
31. FR Cement Corporation is also liable to deliver to Lily Lim the amount of cement as indicated in
the Withdrawal Authorities it issued. xxx FR Cement Corporation has no right to impose price
adjustments as a qualification for honoring the Withdrawal Authorities.

32. Fil-Cement Center, Tigerbilt and Gail Borja as the original holders/ assignees of the Withdrawal
Authorities repeatedly assured Lily Lim that the same were valid and would be honored. They are
liable to make good on their assurances.

SECOND CAUSE OF ACTION:

ABUSE OF RIGHTS AND UNJUST ENRICHMENT

33. Charlie Co’s acts of falsely representing to Lily Lim that she may be able to withdraw the cement
from FR Cement Corp. caused Lily Lim to incur expenses and losses. Such act was made without
justice, without giving Lily Lim what is due her and without observing honesty and good faith, all
violative of the law, more specifically Articles 19 and 20 of the Civil Code. Such willful act was also
made by Charlie Co in a manner contrary to morals, good customs or public policy, in violation of
Article 21 of the Civil Code.

34. FR Cement Corporation’s unjust refusal to honor the Withdrawal Authorities they issued also
caused damage to Lily Lim. Further, FR Cement Corporation’s act of withholding the 37,200 bags of
cement despite earning income therefor constitutes as an unjust enrichment because FR Cement
Corporation acquired income through an act or performance by another or any other means at the
expense of another without just or legal ground in violation of Article 22 of the Civil Code.

35. Fil-Cement Center, Tigerbilt and Gail Borja’s false assurances that Lily Lim would be able to
withdraw the remaining 37,200 bags of cement caused Lily Lim to incur expenses and losses. x x x
Moreover, Fil-Cement Center admitted receiving payment for said amount of cement, thus they are
deemed to have come into possession of money at the expense of Lily Lim without just or legal
ground, in violation of Article 22 of the Civil Code.

THIRD CAUSE OF ACTION:

MORAL AND EXEMPLARY DAMAGES and
ATTORNEY’S FEES AND COSTS OF SUIT22

Lim prayed for Co to honor his contractual commitments either by delivering the 37,200 bags of
cement, making arrangements with FRCC to allow Lim to withdraw the cement, or to pay for their
value. She likewise asked that the defendants be held solidarily liable to her for the damages she
incurred in her failed attempts to withdraw the cement and for the damages they inflicted on her as a
result of their abuse of their rights.23

Motions to dismiss both actions

In reaction to the filing of the civil complaint for specific performance and damages, Co filed motions
to dismiss the said civil case24 and Lim’s appeal in the civil aspect of the estafa case or CA-G.R. CV
No. 85138.25 He maintained that the two actions raise the same issue, which is Co’s liability to Lim for
her inability to withdraw the bags of cement,26 and should be dismissed on the ground of lis
pendens and forum shopping.

Ruling of the Court of Appeals Second Division in CA-G.R CV No. 85138

The appellate court (Second Division) favorably resolved Co’s motion and dismissed Lim’s appeal
from the civil aspect of the estafa case. In its Resolution dated October 20, 2005, the CA Second
Division held that the parties, causes of action, and reliefs prayed for in Lim’s appeal and in her civil
complaint are identical. Both actions seek the same relief, which is the payment of the value of the
37,200 bags of cement.27 Thus, the CA Second Division dismissed Lim’s appeal for forum
shopping.28 The CA denied29 Lim’s motion for reconsideration.30

Lim filed the instant petition for review, which was docketed as G.R. No. 175256.

Ruling of the Manila Regional Trial Court in Civil Case No. 05-112396

Meanwhile, the Manila RTC denied Co’s Motion to Dismiss in an Order31 dated December 6, 2005.
The Manila RTC held that there was no forum shopping because the causes of action invoked in the
two cases are different. It observed that the civil complaint before it is based on an obligation arising
from contract and quasi-delict, whereas the civil liability involved in the appeal of the criminal case
arose from a felony.

Co filed a petition for certiorari,32 docketed as CA-G.R. SP No. 93395, before the appellate court. He
prayed for the nullification of the Manila RTC’s Order in Civil Case No. 05-112396 for having been
issued with grave abuse of discretion.33

Ruling of the Court of Appeals Seventeenth Division in CA-G.R. SP No. 93395

The CA Seventeenth Division denied Co’s petition and remanded the civil complaint to the trial court
for further proceedings. The CA Seventeenth Division agreed with the Manila RTC that the elements
of litis pendentia and forum shopping are not met in the two proceedings because they do not share
the same cause of action.34

The CA denied35 Co’s motion for reconsideration.36

Co filed the instant Petition for Review, which was docketed as G.R. No. 179160.

Upon Co’s motion,37 the Court resolved to consolidate the two petitions.38

Kou Co Ping’s arguments

Co maintains that Lim is guilty of forum shopping because she is asserting only one cause of action
in CA-G.R. CV No. 85138 (the appeal from the civil aspect of Criminal Case No. 116377) and in Civil
Case No. 05-112396, which is for Co’s violation of her right to receive 37,200 bags of cement.
Likewise, the reliefs sought in both cases are the same, that is, for Co to deliver the 37,200 bags of
cement or its value to Lim. That Lim utilized different methods of presenting her case – a criminal
action for estafa and a civil complaint for specific performance and damages – should not detract
from the fact that she is attempting to litigate the same cause of action twice.39

Co makes light of the distinction between civil liability ex contractu and ex delicto. According to him,
granting that the two civil liabilities are independent of each other, nevertheless, the two cases
arising from them would have to be decided using the same evidence and going over the same set
of facts. Thus, any judgment rendered in one of these cases will constitute res judicata on the other.40
In G.R. No. 179160, Co prays for the annulment of the CA Decision and Resolution in CA-G.R. SP
No. 93395, for a declaration that Lim is guilty of forum shopping, and for the dismissal of Civil Case
No. 05-112396.41

In G.R. No. 175256, Co prays for the affirmation of the CA Decision in CA-G.R. CV No. 85138
(which dismissed Lim’s appeal from the trial court’s decision in Criminal Case No. 116377).42

Lily Lim’s arguments

Lim admits that the two proceedings involve substantially the same set of facts because they arose
from only one transaction.43 She is quick to add, however, that a single act or omission does not
always make a single cause of action.44 It can possibly give rise to two separate civil liabilities on the
part of the offender – (1) ex delicto or civil liability arising from crimes, and (2) independent civil
liabilities or those arising from contracts or intentional torts. The only caveat provided in Article 2177
of the Civil Code is that the offended party cannot recover damages twice for the same act or
omission.45 Because the law allows her two independent causes of action, Lim contends that it is not
forum shopping to pursue them.46

She then explains the separate and distinct causes of action involved in the two cases. Her cause of
action in CA-G.R CV No. 85138 is based on the crime of estafa. Co violated Lim’s right to be
protected against swindling. He represented to Lim that she can withdraw 37,200 bags of cement
using the authorities she bought from him. This is a fraudulent representation because Co knew, at
the time that they entered into the contract, that he could not deliver what he promised.47 On the other
hand, Lim’s cause of action in Civil Case No. 05-112396 is based on contract. Co violated Lim’s
rights as a buyer in a contract of sale. Co received payment for the 37,200 bags of cement but did
not deliver the goods that were the subject of the sale.48

In G.R. No. 179160, Lim prays for the denial of Co’s petition.49 In G.R. No. 175256, she prays for the
reversal of the CA Decision in CA-G.R. CV No. 85138, for a declaration that she is not guilty of
forum shopping, and for the reinstatement of her appeal in Criminal Case No. 116377 to the CA.50

Issue

Did Lim commit forum shopping in filing the civil case for specific performance and damages during
the pendency of her appeal on the civil aspect of the criminal case for estafa?

Our Ruling

A single act or omission that causes damage to an offended party may give rise to two separate civil
liabilities on the part of the offender51 - (1) civil liability ex delicto, that is, civil liability arising from the
criminal offense under Article 100 of the Revised Penal Code,52 and (2) independent civil liability, that
is, civil liability that may be pursued independently of the criminal proceedings. The independent civil
liability may be based on "an obligation not arising from the act or omission complained of as a
felony," as provided in Article 31 of the Civil Code (such as for breach of contract or for tort53 ). It may
also be based on an act or omission that may constitute felony but, nevertheless, treated
independently from the criminal action by specific provision of Article 33 of the Civil Code ("in cases
of defamation, fraud and physical injuries").

The civil liability arising from the offense or ex delicto is based on the acts or omissions that
constitute the criminal offense; hence, its trial is inherently intertwined with the criminal action. For
this reason, the civil liability ex delicto is impliedly instituted with the criminal offense.54 If the action for
the civil liability ex delicto is instituted prior to or subsequent to the filing of the criminal action, its
proceedings are suspended until the final outcome of the criminal action.55 The civil liability based on
delict is extinguished when the court hearing the criminal action declares that "the act or omission
from which the civil liability may arise did not exist."56

On the other hand, the independent civil liabilities are separate from the criminal action and may be
pursued independently, as provided in Articles 31 and 33 of the Civil Code, which state that:

ART. 31. When the civil action is based on an obligation not arising from the act or omission
complained of as a felony, such civil action may proceed independently of the criminal proceedings
and regardless of the result of the latter. (Emphasis supplied.)

ART. 33. In cases of defamation, fraud, and physical injuries a civil action for damages, entirely
separate and distinct from the criminal action, may be brought by the injured party. Such civil action
shall proceed independently of the criminal prosecution, and shall require only a preponderance of
evidence. (Emphasis supplied.)

Because of the distinct and independent nature of the two kinds of civil liabilities, jurisprudence holds
that the offended party may pursue the two types of civil liabilities simultaneously or cumulatively,
without offending the rules on forum shopping, litis pendentia, or res judicata.57 As explained
in Cancio, Jr. v. Isip:58

One of the elements of res judicata is identity of causes of action. In the instant case, it must be
stressed that the action filed by petitioner is an independent civil action, which remains separate and
distinct from any criminal prosecution based on the same act. Not being deemed instituted in the
criminal action based on culpa criminal, a ruling on the culpability of the offender will have no
bearing on said independent civil action based on an entirely different cause of action, i.e., culpa
contractual.

In the same vein, the filing of the collection case after the dismissal of the estafa cases against the
offender did not amount to forum-shopping. The essence of forum shopping is the filing of multiple
suits involving the same parties for the same cause of action, either simultaneously or successively,
to secure a favorable judgment. Although the cases filed by [the offended party] arose from the
same act or omission of [the offender], they are, however, based on different causes of action. The
criminal cases for estafa are based on culpa criminal while the civil action for collection is anchored
on culpa contractual. Moreover, there can be no forum-shopping in the instant case because the law
expressly allows the filing of a separate civil action which can proceed independently of the criminal
action.59

Since civil liabilities arising from felonies and those arising from other sources of obligations are
authorized by law to proceed independently of each other, the resolution of the present issue hinges
on whether the two cases herein involve different kinds of civil obligations such that they can
proceed independently of each other. The answer is in the affirmative.

The first action is clearly a civil action ex delicto, it having been instituted together with the criminal
action.60

On the other hand, the second action, judging by the allegations contained in the complaint,61 is a civil
action arising from a contractual obligation and for tortious conduct (abuse of rights). In her civil
complaint, Lim basically alleges that she entered into a sale contract with Co under the following
terms: that she bought 37,200 bags of cement at the rate of ₱ 64.00 per bag from Co; that, after full
payment, Co delivered to her the withdrawal authorities issued by FRCC corresponding to these
bags of cement; that these withdrawal authorities will be honored by FRCC for six months from the
dates written thereon. Lim then maintains that the defendants breached their contractual obligations
to her under the sale contract and under the withdrawal authorities; that Co and his co-defendants
wanted her to pay more for each bag of cement, contrary to their agreement to fix the price at ₱
64.00 per bag and to the wording of the withdrawal authorities; that FRCC did not honor the terms of
the withdrawal authorities it issued; and that Co did not comply with his obligation under the sale
contract to deliver the 37,200 bags of cement to Lim. From the foregoing allegations, it is evident
that Lim seeks to enforce the defendants’ contractual obligations, given that she has already
performed her obligations. She prays that the defendants either honor their part of the contract or
pay for the damages that their breach has caused her.

Lim also includes allegations that the actions of the defendants were committed in such manner as
to cause damage to Lim without regard for morals, good customs and public policy. These
allegations, if proven, would constitute tortious conduct (abuse of rights under the Human Relations
provisions of the Civil Code).

Thus, Civil Case No. 05-112396 involves only the obligations arising from contract and from tort,
whereas the appeal in the estafa case involves only the civil obligations of Co arising from the
offense charged. They present different causes of action, which under the law, are considered
"separate, distinct, and independent"62 from each other. Both cases can proceed to their final
adjudication, subject to the prohibition on double recovery under Article 2177 of the Civil Code.63

WHEREFORE, premises considered, Lily Lim’s Petition in G.R. No. 175256 is GRANTED. The
assailed October 20, 2005 Resolution of the Second Division of the Court of Appeals in CA-G.R. CV
No. 85138 is REVERSED and SET ASIDE. Lily Lim’s appeal in CA-G.R. CV No. 85138 is
ordered REINSTATED and the Court of Appeals is DIRECTED to RESOLVE the same
with DELIBERATE DISPATCH.

Charlie Co’s Petition G.R. No. 179160 is DENIED. The assailed April 10, 2007 Decision of the
Seventeenth Division of the Court of Appeals in CA-G.R. SP No. 93395 is AFFIRMED in toto.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 157917 August 29, 2012

SPOUSES TEODORO1 and NANETTE PERENA, Petitioners,

vs.
SPOUSES TERESITA PHILIPPINE NICOLAS and L. ZARATE, NATIONAL RAILWAYS, and the
COURT OF APPEALS Respondents.

DECISION

BERSAMIN, J.:
The operator of a. school bus service is a common carrier in the eyes of the law. He is bound to
observe extraordinary diligence in the conduct of his business. He is presumed to be negligent when
death occurs to a passenger. His liability may include indemnity for loss of earning capacity even if
the deceased passenger may only be an unemployed high school student at the time of the
accident.

The Case

By petition for review on certiorari, Spouses Teodoro and Nanette Perefia (Perefias) appeal the
adverse decision promulgated on November 13, 2002, by which the Court of Appeals (CA) affirmed
with modification the decision rendered on December 3, 1999 by the Regional Trial Court (RTC),
Branch 260, in Parañaque City that had decreed them jointly and severally liable with Philippine
National Railways (PNR), their co-defendant, to Spouses Nicolas and Teresita Zarate (Zarates) for
the death of their 15-year old son, Aaron John L. Zarate (Aaron), then a high school student of Don
Bosco Technical Institute (Don Bosco).

Antecedents

The Pereñas were engaged in the business of transporting students from their respective residences
in Parañaque City to Don Bosco in Pasong Tamo, Makati City, and back. In their business, the
Pereñas used a KIA Ceres Van (van) with Plate No. PYA 896, which had the capacity to transport 14
students at a time, two of whom would be seated in the front beside the driver, and the others in the
rear, with six students on either side. They employed Clemente Alfaro (Alfaro) as driver of the van.

In June 1996, the Zarates contracted the Pereñas to transport Aaron to and from Don Bosco. On
August 22, 1996, as on previous school days, the van picked Aaron up around 6:00 a.m. from the
Zarates’ residence. Aaron took his place on the left side of the van near the rear door. The van, with
its air-conditioning unit turned on and the stereo playing loudly, ultimately carried all the 14 student
riders on their way to Don Bosco. Considering that the students were due at Don Bosco by 7:15
a.m., and that they were already running late because of the heavy vehicular traffic on the South
Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by traversing the narrow
path underneath the Magallanes Interchange that was then commonly used by Makati-bound
vehicles as a short cut into Makati. At the time, the narrow path was marked by piles of construction
materials and parked passenger jeepneys, and the railroad crossing in the narrow path had no
railroad warning signs, or watchmen, or other responsible persons manning the crossing. In fact, the
bamboo barandilla was up, leaving the railroad crossing open to traversing motorists.

At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train),
operated by Jhonny Alano (Alano), was in the vicinity of the Magallanes Interchange travelling
northbound. As the train neared the railroad crossing, Alfaro drove the van eastward across the
railroad tracks, closely tailing a large passenger bus. His view of the oncoming train was blocked
because he overtook the passenger bus on its left side. The train blew its horn to warn motorists of
its approach. When the train was about 50 meters away from the passenger bus and the van, Alano
applied the ordinary brakes of the train. He applied the emergency brakes only when he saw that a
collision was imminent. The passenger bus successfully crossed the railroad tracks, but the van
driven by Alfaro did not. The train hit the rear end of the van, and the impact threw nine of the 12
students in the rear, including Aaron, out of the van. Aaron landed in the path of the train, which
dragged his body and severed his head, instantaneously killing him. Alano fled the scene on board
the train, and did not wait for the police investigator to arrive.
Devastated by the early and unexpected death of Aaron, the Zarates commenced this action for
damages against Alfaro, the Pereñas, PNR and Alano. The Pereñas and PNR filed their respective
answers, with cross-claims against each other, but Alfaro could not be served with summons.

At the pre-trial, the parties stipulated on the facts and issues, viz:

A. FACTS:

(1) That spouses Zarate were the legitimate parents of Aaron John L. Zarate;

(2) Spouses Zarate engaged the services of spouses Pereña for the adequate and safe
transportation carriage of the former spouses' son from their residence in Parañaque to his
school at the Don Bosco Technical Institute in Makati City;

(3) During the effectivity of the contract of carriage and in the implementation thereof, Aaron,
the minor son of spouses Zarate died in connection with a vehicular/train collision which
occurred while Aaron was riding the contracted carrier Kia Ceres van of spouses Pereña,
then driven and operated by the latter's employee/authorized driver Clemente Alfaro, which
van collided with the train of PNR, at around 6:45 A.M. of August 22, 1996, within the vicinity
of the Magallanes Interchange in Makati City, Metro Manila, Philippines;

(4) At the time of the vehicular/train collision, the subject site of the vehicular/train collision
was a railroad crossing used by motorists for crossing the railroad tracks;

(5) During the said time of the vehicular/train collision, there were no appropriate and safety
warning signs and railings at the site commonly used for railroad crossing;

(6) At the material time, countless number of Makati bound public utility and private vehicles
used on a daily basis the site of the collision as an alternative route and short-cut to Makati;

(7) The train driver or operator left the scene of the incident on board the commuter train
involved without waiting for the police investigator;

(8) The site commonly used for railroad crossing by motorists was not in fact intended by
the railroad operator for railroad crossing at the time of the vehicular collision;

(9) PNR received the demand letter of the spouses Zarate;

(10) PNR refused to acknowledge any liability for the vehicular/train collision;

(11) The eventual closure of the railroad crossing alleged by PNR was an internal
arrangement between the former and its project contractor; and

(12) The site of the vehicular/train collision was within the vicinity or less than 100 meters
from the Magallanes station of PNR.

B. ISSUES
 (1) Whether or not defendant-driver of the van is, in the performance of his functions, liable
for negligence constituting the proximate cause of the vehicular collision, which resulted in
the death of plaintiff spouses' son;

(2) Whether or not the defendant spouses Pereña being the employer of defendant Alfaro
are liable for any negligence which may be attributed to defendant Alfaro;

(3) Whether or not defendant Philippine National Railways being the operator of the railroad
system is liable for negligence in failing to provide adequate safety warning signs and railings
in the area commonly used by motorists for railroad crossings, constituting the proximate
cause of the vehicular collision which resulted in the death of the plaintiff spouses' son;

(4) Whether or not defendant spouses Pereña are liable for breach of the contract of carriage
with plaintiff-spouses in failing to provide adequate and safe transportation for the latter's
son;

(5) Whether or not defendants spouses are liable for actual, moral damages, exemplary
damages, and attorney's fees;

(6) Whether or not defendants spouses Teodorico and Nanette Pereña observed the
diligence of employers and school bus operators;

(7) Whether or not defendant-spouses are civilly liable for the accidental death of Aaron John
Zarate;

(8) Whether or not defendant PNR was grossly negligent in operating the commuter train
involved in the accident, in allowing or tolerating the motoring public to cross, and its failure
to install safety devices or equipment at the site of the accident for the protection of the
public;

(9) Whether or not defendant PNR should be made to reimburse defendant spouses for any
and whatever amount the latter may be held answerable or which they may be ordered to
pay in favor of plaintiffs by reason of the action;

(10) Whether or not defendant PNR should pay plaintiffs directly and fully on the amounts
claimed by the latter in their Complaint by reason of its gross negligence;

(11) Whether or not defendant PNR is liable to defendants spouses for actual, moral and
exemplary damages and attorney's fees.2

The Zarates’ claim against the Pereñas was upon breach of the contract of carriage for the safe
transport of Aaron; but that against PNR was based on quasi-delict under Article 2176, Civil Code.

In their defense, the Pereñas adduced evidence to show that they had exercised the diligence of a
good father of the family in the selection and supervision of Alfaro, by making sure that Alfaro had
been issued a driver’s license and had not been involved in any vehicular accident prior to the
collision; that their own son had taken the van daily; and that Teodoro Pereña had sometimes
accompanied Alfaro in the van’s trips transporting the students to school.
For its part, PNR tended to show that the proximate cause of the collision had been the reckless
crossing of the van whose driver had not first stopped, looked and listened; and that the narrow path
traversed by the van had not been intended to be a railroad crossing for motorists.

Ruling of the RTC

On December 3, 1999, the RTC rendered its decision,3 disposing:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
against the defendants ordering them to jointly and severally pay the plaintiffs as follows:

(1) (for) the death of Aaron- Php50,000.00;

(2) Actual damages in the amount of Php100,000.00;

(3) For the loss of earning capacity- Php2,109,071.00;

(4) Moral damages in the amount of Php4,000,000.00;

(5) Exemplary damages in the amount of Php1,000,000.00;

(6) Attorney’s fees in the amount of Php200,000.00; and

(7) Cost of suit.

SO ORDERED.

On June 29, 2000, the RTC denied the Pereñas’ motion for reconsideration,4 reiterating that the
cooperative gross negligence of the Pereñas and PNR had caused the collision that led to the death
of Aaron; and that the damages awarded to the Zarates were not excessive, but based on the
established circumstances.

The CA’s Ruling

Both the Pereñas and PNR appealed (C.A.-G.R. CV No. 68916).

PNR assigned the following errors, to wit:5

The Court a quo erred in:

1. In finding the defendant-appellant Philippine National Railways jointly and severally liable
together with defendant-appellants spouses Teodorico and Nanette Pereña and defendant-
appellant Clemente Alfaro to pay plaintiffs-appellees for the death of Aaron Zarate and
damages.

2. In giving full faith and merit to the oral testimonies of plaintiffs-appellees witnesses despite
overwhelming documentary evidence on record, supporting the case of defendants-
appellants Philippine National Railways.

The Pereñas ascribed the following errors to the RTC, namely:

The trial court erred in finding defendants-appellants jointly and severally liable for actual, moral and
exemplary damages and attorney’s fees with the other defendants.

The trial court erred in dismissing the cross-claim of the appellants Pereñas against the Philippine
National Railways and in not holding the latter and its train driver primarily responsible for the
incident.

The trial court erred in awarding excessive damages and attorney’s fees.

The trial court erred in awarding damages in the form of deceased’s loss of earning capacity in the
absence of sufficient basis for such an award.

On November 13, 2002, the CA promulgated its decision, affirming the findings of the RTC, but
limited the moral damages to ₱ 2,500,000.00; and deleted the attorney’s fees because the RTC did
not state the factual and legal bases, to wit:6

WHEREFORE, premises considered, the assailed Decision of the Regional Trial Court, Branch 260
of Parañaque City is AFFIRMED with the modification that the award of Actual Damages is reduced
to ₱ 59,502.76; Moral Damages is reduced to ₱ 2,500,000.00; and the award for Attorney’s Fees is
Deleted.

SO ORDERED.

The CA upheld the award for the loss of Aaron’s earning capacity, taking cognizance of the ruling in
Cariaga v. Laguna Tayabas Bus Company and Manila Railroad Company,7 wherein the Court gave
the heirs of Cariaga a sum representing the loss of the deceased’s earning capacity despite Cariaga
being only a medical student at the time of the fatal incident. Applying the formula adopted in the
American Expectancy Table of Mortality:–

2/3 x (80 - age at the time of death) = life expectancy

the CA determined the life expectancy of Aaron to be 39.3 years upon reckoning his life expectancy
from age of 21 (the age when he would have graduated from college and started working for his own
livelihood) instead of 15 years (his age when he died). Considering that the nature of his work and
his salary at the time of Aaron’s death were unknown, it used the prevailing minimum wage of ₱
280.00/day to compute Aaron’s gross annual salary to be ₱ 110,716.65, inclusive of the thirteenth
month pay. Multiplying this annual salary by Aaron’s life expectancy of 39.3 years, his gross income
would aggregate to ₱ 4,351,164.30, from which his estimated expenses in the sum of ₱
2,189,664.30 was deducted to finally arrive at P 2,161,500.00 as net income. Due to Aaron’s
computed net income turning out to be higher than the amount claimed by the Zarates, only ₱
2,109,071.00, the amount expressly prayed for by them, was granted.

On April 4, 2003, the CA denied the Pereñas’ motion for reconsideration.8

Issues

In this appeal, the Pereñas list the following as the errors committed by the CA, to wit:

I. The lower court erred when it upheld the trial court’s decision holding the petitioners jointly and
severally liable to pay damages with Philippine National Railways and dismissing their cross-claim
against the latter.
II. The lower court erred in affirming the trial court’s decision awarding damages for loss of earning
capacity of a minor who was only a high school student at the time of his death in the absence of
sufficient basis for such an award.

III. The lower court erred in not reducing further the amount of damages awarded, assuming
petitioners are liable at all.

Ruling

The petition has no merit.

1.
Were the Pereñas and PNR jointly
and severally liable for damages?

The Zarates brought this action for recovery of damages against both the Pereñas and the PNR,
basing their claim against the Pereñas on breach of contract of carriage and against the PNR on
quasi-delict.

The RTC found the Pereñas and the PNR negligent. The CA affirmed the findings.

We concur with the CA.

To start with, the Pereñas’ defense was that they exercised the diligence of a good father of the
family in the selection and supervision of Alfaro, the van driver, by seeing to it that Alfaro had a
driver’s license and that he had not been involved in any vehicular accident prior to the fatal collision
with the train; that they even had their own son travel to and from school on a daily basis; and that
Teodoro Pereña himself sometimes accompanied Alfaro in transporting the passengers to and from
school. The RTC gave scant consideration to such defense by regarding such defense as
inappropriate in an action for breach of contract of carriage.

We find no adequate cause to differ from the conclusions of the lower courts that the Pereñas
operated as a common carrier; and that their standard of care was extraordinary diligence, not the
ordinary diligence of a good father of a family.

Although in this jurisdiction the operator of a school bus service has been usually regarded as a
private carrier,9primarily because he only caters to some specific or privileged individuals, and his
operation is neither open to the indefinite public nor for public use, the exact nature of the operation
of a school bus service has not been finally settled. This is the occasion to lay the matter to rest.

A carrier is a person or corporation who undertakes to transport or convey goods or persons from
one place to another, gratuitously or for hire. The carrier is classified either as a private/special
carrier or as a common/public carrier.10 A private carrier is one who, without making the activity a
vocation, or without holding himself or itself out to the public as ready to act for all who may desire
his or its services, undertakes, by special agreement in a particular instance only, to transport goods
or persons from one place to another either gratuitously or for hire.11 The provisions on ordinary
contracts of the Civil Code govern the contract of private carriage.The diligence required of a private
carrier is only ordinary, that is, the diligence of a good father of the family. In contrast, a common
carrier is a person, corporation, firm or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for compensation, offering such
services to the public.12 Contracts of common carriage are governed by the provisions on common
carriers of the Civil Code, the Public Service Act,13 and other special laws relating to transportation. A
common carrier is required to observe extraordinary diligence, and is presumed to be at fault or to
have acted negligently in case of the loss of the effects of passengers, or the death or injuries to
passengers.14

In relation to common carriers, the Court defined public use in the following terms in United States v.
Tan Piaco,15viz:

"Public use" is the same as "use by the public". The essential feature of the public use is not
confined to privileged individuals, but is open to the indefinite public. It is this indefinite or
unrestricted quality that gives it its public character. In determining whether a use is public, we must
look not only to the character of the business to be done, but also to the proposed mode of doing it.
If the use is merely optional with the owners, or the public benefit is merely incidental, it is not a
public use, authorizing the exercise of the jurisdiction of the public utility commission. There must be,
in general, a right which the law compels the owner to give to the general public. It is not enough that
the general prosperity of the public is promoted. Public use is not synonymous with public interest.
The true criterion by which to judge the character of the use is whether the public may enjoy it by
right or only by permission.

In De Guzman v. Court of Appeals,16 the Court noted that Article 1732 of the Civil Code avoided any
distinction between a person or an enterprise offering transportation on a regular or an isolated
basis; and has not distinguished a carrier offering his services to the general public, that is, the
general community or population, from one offering his services only to a narrow segment of the
general population.

Nonetheless, the concept of a common carrier embodied in Article 1732 of the Civil Code coincides
neatly with the notion of public service under the Public Service Act, which supplements the law on
common carriers found in the Civil Code. Public service, according to Section 13, paragraph (b) of
the Public Service Act, includes:

x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for
hire or compensation, with general or limited clientèle, whether permanent or occasional, and done
for the general business purposes, any common carrier, railroad, street railway, traction railway,
subway motor vehicle, either for freight or passenger, or both, with or without fixed route and
whatever may be its classification, freight or carrier service of any class, express service, steamboat,
or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or
freight or both, shipyard, marine repair shop, ice-refrigeration plant, canal, irrigation system, gas,
electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless
communications systems, wire or wireless broadcasting stations and other similar public services. x
x x.17

Given the breadth of the aforequoted characterization of a common carrier, the Court has
considered as common carriers pipeline operators,18 custom brokers and warehousemen,19 and barge
operators20 even if they had limited clientèle.

As all the foregoing indicate, the true test for a common carrier is not the quantity or extent of the
business actually transacted, or the number and character of the conveyances used in the activity,
but whether the undertaking is a part of the activity engaged in by the carrier that he has held out to
the general public as his business or occupation. If the undertaking is a single transaction, not a part
of the general business or occupation engaged in, as advertised and held out to the general public,
the individual or the entity rendering such service is a private, not a common, carrier. The question
must be determined by the character of the business actually carried on by the carrier, not by any
secret intention or mental reservation it may entertain or assert when charged with the duties and
obligations that the law imposes.21

Applying these considerations to the case before us, there is no question that the Pereñas as the
operators of a school bus service were: (a) engaged in transporting passengers generally as a
business, not just as a casual occupation; (b) undertaking to carry passengers over established
roads by the method by which the business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientèle, the Pereñas operated as a common carrier because they held
themselves out as a ready transportation indiscriminately to the students of a particular school living
within or near where they operated the service and for a fee.

The common carrier’s standard of care and vigilance as to the safety of the passengers is defined by
law. Given the nature of the business and for reasons of public policy, the common carrier is bound
"to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case."22 Article 1755 of
the Civil Code specifies that the common carrier should "carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious persons, with a
due regard for all the circumstances." To successfully fend off liability in an action upon the death or
injury to a passenger, the common carrier must prove his or its observance of that extraordinary
diligence; otherwise, the legal presumption that he or it was at fault or acted negligently would
stand.23 No device, whether by stipulation, posting of notices, statements on tickets, or otherwise,
may dispense with or lessen the responsibility of the common carrier as defined under Article 1755
of the Civil Code. 24

And, secondly, the Pereñas have not presented any compelling defense or reason by which the
Court might now reverse the CA’s findings on their liability. On the contrary, an examination of the
records shows that the evidence fully supported the findings of the CA.

As earlier stated, the Pereñas, acting as a common carrier, were already presumed to be negligent
at the time of the accident because death had occurred to their passenger.25 The presumption of
negligence, being a presumption of law, laid the burden of evidence on their shoulders to establish
that they had not been negligent.26 It was the law no less that required them to prove their
observance of extraordinary diligence in seeing to the safe and secure carriage of the passengers to
their destination. Until they did so in a credible manner, they stood to be held legally responsible for
the death of Aaron and thus to be held liable for all the natural consequences of such death.

There is no question that the Pereñas did not overturn the presumption of their negligence by
credible evidence. Their defense of having observed the diligence of a good father of a family in the
selection and supervision of their driver was not legally sufficient. According to Article 1759 of the
Civil Code, their liability as a common carrier did not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employee. This was the
reason why the RTC treated this defense of the Pereñas as inappropriate in this action for breach of
contract of carriage.

The Pereñas were liable for the death of Aaron despite the fact that their driver might have acted
beyond the scope of his authority or even in violation of the orders of the common carrier.27 In this
connection, the records showed their driver’s actual negligence. There was a showing, to begin with,
that their driver traversed the railroad tracks at a point at which the PNR did not permit motorists
going into the Makati area to cross the railroad tracks. Although that point had been used by
motorists as a shortcut into the Makati area, that fact alone did not excuse their driver into taking that
route. On the other hand, with his familiarity with that shortcut, their driver was fully aware of the
risks to his passengers but he still disregarded the risks. Compounding his lack of care was that loud
music was playing inside the air-conditioned van at the time of the accident. The loudness most
probably reduced his ability to hear the warning horns of the oncoming train to allow him to correctly
appreciate the lurking dangers on the railroad tracks. Also, he sought to overtake a passenger bus
on the left side as both vehicles traversed the railroad tracks. In so doing, he lost his view of the train
that was then coming from the opposite side of the passenger bus, leading him to miscalculate his
chances of beating the bus in their race, and of getting clear of the train. As a result, the bus avoided
a collision with the train but the van got slammed at its rear, causing the fatality. Lastly, he did not
slow down or go to a full stop before traversing the railroad tracks despite knowing that his
slackening of speed and going to a full stop were in observance of the right of way at railroad tracks
as defined by the traffic laws and regulations.28He thereby violated a specific traffic regulation on right
of way, by virtue of which he was immediately presumed to be negligent.29

The omissions of care on the part of the van driver constituted negligence,30 which, according to
Layugan v. Intermediate Appellate Court,31 is "the omission to do something which a reasonable man,
guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or
the doing of something which a prudent and reasonable man would not do,32 or as Judge Cooley
defines it, ‘(t)he failure to observe for the protection of the interests of another person, that degree of
care, precaution, and vigilance which the circumstances justly demand, whereby such other person
suffers injury.’"33

The test by which to determine the existence of negligence in a particular case has been aptly stated
in the leading case of Picart v. Smith,34 thuswise:

The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution
which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case
is not determined by reference to the personal judgment of the actor in the situation before him. The
law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence
and prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in
the particular case. Abstract speculation cannot here be of much value but this much can be
profitably said: Reasonable men govern their conduct by the circumstances which are before them
or known to them. They are not, and are not supposed to be, omniscient of the future. Hence they
can be expected to take care only when there is something before them to suggest or warn of
danger. Could a prudent man, in the case under consideration, foresee harm as a result of the
course actually pursued? If so, it was the duty of the actor to take precautions to guard against that
harm. Reasonable foresight of harm, followed by the ignoring of the suggestion born of this
prevision, is always necessary before negligence can be held to exist. Stated in these terms, the
proper criterion for determining the existence of negligence in a given case is this: Conduct is said to
be negligent when a prudent man in the position of the tortfeasor would have foreseen that an effect
harmful to another was sufficiently probable to warrant his foregoing the conduct or guarding against
its consequences. (Emphasis supplied)

Pursuant to the Picart v. Smith test of negligence, the Pereñas’ driver was entirely negligent when he
traversed the railroad tracks at a point not allowed for a motorist’s crossing despite being fully aware
of the grave harm to be thereby caused to his passengers; and when he disregarded the foresight of
harm to his passengers by overtaking the bus on the left side as to leave himself blind to the
approach of the oncoming train that he knew was on the opposite side of the bus.
Unrelenting, the Pereñas cite Phil. National Railways v. Intermediate Appellate Court,35 where the
Court held the PNR solely liable for the damages caused to a passenger bus and its passengers
when its train hit the rear end of the bus that was then traversing the railroad crossing. But the
circumstances of that case and this one share no similarities. In Philippine National Railways v.
Intermediate Appellate Court, no evidence of contributory negligence was adduced against the
owner of the bus. Instead, it was the owner of the bus who proved the exercise of extraordinary
diligence by preponderant evidence. Also, the records are replete with the showing of negligence on
the part of both the Pereñas and the PNR. Another distinction is that the passenger bus in Philippine
National Railways v. Intermediate Appellate Court was traversing the dedicated railroad crossing
when it was hit by the train, but the Pereñas’ school van traversed the railroad tracks at a point not
intended for that purpose.

At any rate, the lower courts correctly held both the Pereñas and the PNR "jointly and severally"
liable for damages arising from the death of Aaron. They had been impleaded in the same complaint
as defendants against whom the Zarates had the right to relief, whether jointly, severally, or in the
alternative, in respect to or arising out of the accident, and questions of fact and of law were
common as to the Zarates.36 Although the basis of the right to relief of the Zarates (i.e., breach of
contract of carriage) against the Pereñas was distinct from the basis of the Zarates’ right to relief
against the PNR (i.e., quasi-delict under Article 2176, Civil Code), they nonetheless could be held
jointly and severally liable by virtue of their respective negligence combining to cause the death of
Aaron. As to the PNR, the RTC rightly found the PNR also guilty of negligence despite the school
van of the Pereñas traversing the railroad tracks at a point not dedicated by the PNR as a railroad
crossing for pedestrians and motorists, because the PNR did not ensure the safety of others through
the placing of crossbars, signal lights, warning signs, and other permanent safety barriers to prevent
vehicles or pedestrians from crossing there. The RTC observed that the fact that a crossing guard
had been assigned to man that point from 7 a.m. to 5 p.m. was a good indicium that the PNR was
aware of the risks to others as well as the need to control the vehicular and other traffic there. Verily,
the Pereñas and the PNR were joint tortfeasors.

2.
Was the indemnity for loss of
Aaron’s earning capacity proper?

The RTC awarded indemnity for loss of Aaron’s earning capacity. Although agreeing with the RTC
on the liability, the CA modified the amount. Both lower courts took into consideration that Aaron,
while only a high school student, had been enrolled in one of the reputable schools in the Philippines
and that he had been a normal and able-bodied child prior to his death. The basis for the
computation of Aaron’s earning capacity was not what he would have become or what he would
have wanted to be if not for his untimely death, but the minimum wage in effect at the time of his
death. Moreover, the RTC’s computation of Aaron’s life expectancy rate was not reckoned from his
age of 15 years at the time of his death, but on 21 years, his age when he would have graduated
from college.

We find the considerations taken into account by the lower courts to be reasonable and fully
warranted.

Yet, the Pereñas submit that the indemnity for loss of earning capacity was speculative and
unfounded. They cited People v. Teehankee, Jr.,37 where the Court deleted the indemnity for victim
1âwphi1

Jussi Leino’s loss of earning capacity as a pilot for being speculative due to his having graduated
from high school at the International School in Manila only two years before the shooting, and was at
the time of the shooting only enrolled in the first semester at the Manila Aero Club to pursue his
ambition to become a professional pilot. That meant, according to the Court, that he was for all
intents and purposes only a high school graduate.

We reject the Pereñas’ submission.

First of all, a careful perusal of the Teehankee, Jr. case shows that the situation there of Jussi Leino
was not akin to that of Aaron here. The CA and the RTC were not speculating that Aaron would be
some highly-paid professional, like a pilot (or, for that matter, an engineer, a physician, or a lawyer).
Instead, the computation of Aaron’s earning capacity was premised on him being a lowly minimum
wage earner despite his being then enrolled at a prestigious high school like Don Bosco in Makati, a
fact that would have likely ensured his success in his later years in life and at work.

And, secondly, the fact that Aaron was then without a history of earnings should not be taken against
his parents and in favor of the defendants whose negligence not only cost Aaron his life and his right
to work and earn money, but also deprived his parents of their right to his presence and his services
as well. Our law itself states that the loss of the earning capacity of the deceased shall be the liability
of the guilty party in favor of the heirs of the deceased, and shall in every case be assessed and
awarded by the court "unless the deceased on account of permanent physical disability not caused
by the defendant, had no earning capacity at the time of his death."38 Accordingly, we emphatically
hold in favor of the indemnification for Aaron’s loss of earning capacity despite him having been
unemployed, because compensation of this nature is awarded not for loss of time or earnings but for
loss of the deceased’s power or ability to earn money.39

This favorable treatment of the Zarates’ claim is not unprecedented. In Cariaga v. Laguna Tayabas
Bus Company and Manila Railroad Company,40 fourth-year medical student Edgardo Carriaga’s
earning capacity, although he survived the accident but his injuries rendered him permanently
incapacitated, was computed to be that of the physician that he dreamed to become. The Court
considered his scholastic record sufficient to justify the assumption that he could have finished the
medical course and would have passed the medical board examinations in due time, and that he
could have possibly earned a modest income as a medical practitioner. Also, in People v.
Sanchez,41 the Court opined that murder and rape victim Eileen Sarmienta and murder victim Allan
Gomez could have easily landed good-paying jobs had they graduated in due time, and that their
jobs would probably pay them high monthly salaries from ₱ 10,000.00 to ₱ 15,000.00 upon their
graduation. Their earning capacities were computed at rates higher than the minimum wage at the
time of their deaths due to their being already senior agriculture students of the University of the
Philippines in Los Baños, the country’s leading educational institution in agriculture.

3.
Were the amounts of damages excessive?

The Pereñas plead for the reduction of the moral and exemplary damages awarded to the Zarates in
the respective amounts of ₱ 2,500,000.00 and ₱ 1,000,000.00 on the ground that such amounts
were excessive.

The plea is unwarranted.

The moral damages of ₱ 2,500,000.00 were really just and reasonable under the established
circumstances of this case because they were intended by the law to assuage the Zarates’ deep
mental anguish over their son’s unexpected and violent death, and their moral shock over the
senseless accident. That amount would not be too much, considering that it would help the Zarates
obtain the means, diversions or amusements that would alleviate their suffering for the loss of their
child. At any rate, reducing the amount as excessive might prove to be an injustice, given the
passage of a long time from when their mental anguish was inflicted on them on August 22, 1996.

Anent the ₱ 1,000,000.00 allowed as exemplary damages, we should not reduce the amount if only
to render effective the desired example for the public good. As a common carrier, the Pereñas
needed to be vigorously reminded to observe their duty to exercise extraordinary diligence to
prevent a similarly senseless accident from happening again. Only by an award of exemplary
damages in that amount would suffice to instill in them and others similarly situated like them the
ever-present need for greater and constant vigilance in the conduct of a business imbued with public
interest.

WHEREFORE, we DENY the petition for review on certiorari; AFFIRM the decision promulgated on
November 13, 2002; and ORDER the petitioners to pay the costs of suit.

SO ORDERED.

Case Digest: Makati Shangri-La vs. Harper

G.R. No. 189998 : August 29, 2012

MAKATI SHANGRI-LA HOTEL AND RESORT, INC., Petitioner, v. ELLEN JOHANNE HARPER,
JONATHAN CHRISTOPHER HARPER, and RIGOBERTO GILLERA, Respondents.

BERSAMIN, J.:

FACTS:

In the first week of November 1999, Christian Harper (Harper) came to Manila on a business trip. He
checked in at the Makati Shangri-La Hotel and was billeted at Room 1428. He was due to check out on
November 6, 1999. In the early morning of that date, however, he was murdered inside his hotel room by
still unidentified malefactors.

Thus, the heirs of Christian Harper sued the hotel for damages. Col. Rodrigo de Guzman, the hotels
Security Manager, testified that the management practice prior to the murder of Harper had been to
deploy only one security or roving guard for every three or four floors of the building; that such ratio had
not been enough considering the L-shape configuration of the hotel that rendered the hallways not visible
from one or the other end; and that he had recommended to management to post a guard for each floor,
but his recommendation had been disapproved because the hotel "was not doing well" at that particular
time.

And to prove heirship of the plaintiffs-appellees, they presented several documents which were all kept in
Norway. The documents had been authenticated by the Royal Norwegian Ministry of Foreign Affairs and
also bore the official seal of the Ministry and signature of one, Tanja Sorlie. The documents were also
accompanied by an Authentication by the Consul, Embassy of the Republic of the Philippines in
Stockholm, Sweden to the effect that, Tanja Sorlie was duly authorized to legalize official documents for
the Ministry.

The RTC ruled in favor of Christian Harpers heirs and found the hotel negligent. On appeal, the CA
affirmed the RTC.
ISSUES:
I. Whether or not the heirs substantially complied with the rules on the authentication and proof of
documents set by Section 24 and Section 25 of Rule 132 of the Rules of Court?
II. Whether or not Makati Shangri-La Hotel is liable to pay damages?
HELD:

FIRST ISSUE: The requirements for authentication of documents establishing respondents legal
relationship with the victim as his heirs were complied with.

REMEDIAL LAW:

Although Exhibit Q, Exhibit Q-1, Exhibit R and Exhibit R-1 were not attested by the officer having the legal
custody of the record or by his deputy in the manner required in Section 25 of Rule 132, and said
documents did not comply with the requirement under Section 24 of Rule 132 to the effect that if the
record was not kept in the Philippines a certificate of the person having custody must accompany the
copy of the document that was duly attested stating that such person had custody of the documents, the
deviation was not enough reason to reject the utility of the documents for the purposes they were
intended to serve. The official participation in the authentication process of Tanja Sorlie of the Royal
Ministry of Foreign Affairs of Norway and the attachment of the official seal of that office on each
authentication indicated that Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 were documents of a public
nature in Norway, not merely private documents.

That rules of procedure may be mandatory in form and application does not forbid a showing of
substantial compliance under justifiable circumstances, because substantial compliance does not equate
to a disregard of basic rules. For sure, substantial compliance and strict adherence are not always
incompatible and do not always clash in discord.

SECOND ISSUE: Petitioner was liable due to its own negligence.

CIVIL LAW:

The CA resolved petitioners arguments thuswise: "negligence is defined as the omission to do something
which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human
affairs, would do, or the doing of something which a prudent and reasonable man would not do. It is a
relative or comparative, not an absolute, term and its application depends upon the situation of the parties
and the degree of care and vigilance which the circumstances reasonably require. In determining whether
or not there is negligence on the part of the parties in a given situation, jurisprudence has laid down the
following test:Did defendant, in doing the alleged negligent act, use that reasonable care and caution
which an ordinarily prudent person would have used in the same situation? If not, the person is guilty of
negligence. The law, in effect, adopts the standard supposed to be supplied by the imaginary conduct of
the discreet pater familias of the Roman law. Liability on the part of the defendant is based upon the fact
that he was in a better situation than the injured person to foresee and prevent the happening of the
injurious occurrence. Moreover, in applying the premises liability rule in the instant case as it is applied in
some jurisdiction in the United States, it is enough that guests are injured while inside the hotel premises
to make the hotelkeeper liable."

Proximate cause is defined as 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.
More comprehensively, proximate cause is that cause acting first and producing the injury, either
immediately or by setting other events in motion, all constituting a natural and continuous chain of events,
each having a close causal connection with its immediate predecessor, the final event in the chain
immediately effecting the injury as natural and probable result of the cause which first acted, under such
circumstances that the person responsible for the first event should, as an ordinarily prudent and
intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to
some person might probably result therefrom. To reiterate, defendant-appellant is engaged in a business
imbued with public interest, ergo, it is bound to provide adequate security to its guests.

CA AFFIRMED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 189998 August 29, 2012

MAKATI SHANGRI-LA HOTEL AND RESORT, INC., Petitioner,

vs.
ELLEN JOHANNE HARPER, JONATHAN CHRISTOPHER HARPER, and RIGOBERTO
GILLERA, Respondents.

DECISION

BERSAMIN, J.:

The hotel owner is liable for civil damages to the surviving heirs of its hotel guest whom strangers
murder inside his hotel room.

The Case

Petitioner, the owner and operator of the 5-star Shangri-La Hotel in Makati City (Shangri-La Hotel),
appeals the decision promulgated on October 21, 2009,1 whereby the Court of Appeals (CA) affirmed
with modification the judgment rendered on October 25, 2005 by the Regional Trial Court (RTC) in
Quezon City holding petitioner liable for damages for the murder of Christian Fredrik Harper, a
Norwegian national.2 Respondents Ellen Johanne Harper and Jonathan Christopher Harper are the
widow and son of Christian Harper, while respondent Rigoberto Gillera is their authorized
representative in the Philippines.

Antecedents

In the first week of November 1999, Christian Harper came to Manila on a business trip as the
Business Development Manager for Asia of ALSTOM Power Norway AS, an engineering firm with
worldwide operations. He checked in at the Shangri-La Hotel and was billeted at Room 1428. He
was due to check out on November 6, 1999. In the early morning of that date, however, he was
murdered inside his hotel room by still unidentified malefactors. He was then 30 years old.

How the crime was discovered was a story in itself. A routine verification call from the American
Express Card Company to cardholder Harper’s residence in Oslo, Norway (i.e., Bygdoy Terasse 16,
0287 Oslo, Norway) led to the discovery. It appears that at around 11:00 am of November 6, 1999, a
Caucasian male of about 30–32 years in age, 5’4" in height, clad in maroon long sleeves, black
denims and black shoes, entered the Alexis Jewelry Store in Glorietta, Ayala Center, Makati City and
expressed interest in purchasing a Cartier lady’s watch valued at ₱ 320,000.00 with the use of two
Mastercard credit cards and an American Express credit card issued in the name of Harper. But the
customer’s difficulty in answering the queries phoned in by a credit card representative sufficiently
aroused the suspicion of saleslady Anna Liza Lumba (Lumba), who asked for the customer’s
passport upon suggestion of the credit card representative to put the credit cards on hold. Probably
sensing trouble for himself, the customer hurriedly left the store, and left the three credit cards and
the passport behind.
In the meanwhile, Harper’s family in Norway must have called him at his hotel room to inform him
about the attempt to use his American Express card. Not getting any response from the room, his
family requested Raymond Alarcon, the Duty Manager of the Shangri-La Hotel, to check on Harper’s
room. Alarcon and a security personnel went to Room 1428 at 11:27 a.m., and were shocked to
discover Harper’s lifeless body on the bed.

Col. Rodrigo de Guzman (de Guzman), the hotel’s Security Manager, initially investigated the
murder. In his incident report, he concluded from the several empty bottles of wine in the trash can
and the number of cigarette butts in the toilet bowl that Harper and his visitors had drunk that much
and smoked that many cigarettes the night before.3

The police investigation actually commenced only upon the arrival in the hotel of the team of PO3
Carmelito Mendoza4 and SPO4 Roberto Hizon. Mendoza entered Harper’s room in the company of
De Guzman, Alarcon, Gami Holazo (the hotel’s Executive Assistant Manager), Norge Rosales (the
hotel’s Executive Housekeeper), and Melvin Imperial (a security personnel of the hotel). They found
Harper’s body on the bed covered with a blanket, and only the back of the head could be seen.
Lifting the blanket, Mendoza saw that the victim’s eyes and mouth had been bound with electrical
and packaging tapes, and his hands and feet tied with a white rope. The body was identified to be
that of hotel guest Christian Fredrik Harper.

Mendoza subsequently viewed the closed circuit television (CCTV) tapes, from which he found that
Harper had entered his room at 12:14 a.m. of November 6, 1999, and had been followed into the
room at 12:17 a.m. by a woman; that another person, a Caucasian male, had entered Harper’s room
at 2:48 a.m.; that the woman had left the room at around 5:33 a.m.; and that the Caucasian male
had come out at 5:46 a.m.

On November 10, 1999, SPO1 Ramoncito Ocampo, Jr. interviewed Lumba about the incident in the
Alexis Jewelry Shop. During the interview, Lumba confirmed that the person who had attempted to
purchase the Cartier lady’s watch on November 6, 1999 had been the person whose picture was on
the passport issued under the name of Christian Fredrik Harper and the Caucasian male seen on
the CCTV tapes entering Harper’s hotel room.

Sr. Insp. Danilo Javier of the Criminal Investigation Division of the Makati City Police reflected in his
Progress Report No. 25 that the police investigation showed that Harper’s passport, credit cards,
laptop and an undetermined amount of cash had been missing from the crime scene; and that he
had learned during the follow-up investigation about an unidentified Caucasian male’s attempt to
purchase a Cartier lady’s watch from the Alexis Jewelry Store in Glorietta, Ayala Center, Makati City
with the use of one of Harper’s credit cards.

On August 30, 2002, respondents commenced this suit in the RTC to recover various damages from
petitioner,6pertinently alleging:

xxx

7. The deceased was to check out and leave the hotel on November 6, 1999, but in the early
morning of said date, while he was in his hotel room, he was stabbed to death by an (sic) still
unidentified male who had succeeded to intrude into his room.

8. The murderer succeeded to trespass into the area of the hotel’s private rooms area and into the
room of the said deceased on account of the hotel’s gross negligence in providing the most basic
security system of its guests, the lack of which owing to the acts or omissions of its employees was
the immediate cause of the tragic death of said deceased.
 xxx

10. Defendant has prided itself to be among the top hotel chains in the East claiming to provide
excellent service, comfort and security for its guests for which reason ABB Alstom executives and
their guests have invariably chosen this hotel to stay.7

xxx

Ruling of the RTC

On October 25, 2005, the RTC rendered judgment after trial,8 viz:

WHEREFORE, finding the defendant hotel to be remiss in its duties and thus liable for the death of
Christian Harper, this Court orders the defendant to pay plaintiffs the amount of:

PhP 43,901,055.00 as and by way of actual and compensatory damages;

PhP 739,075.00 representing the expenses of transporting the remains of Harper to Oslo,
Norway;

PhP 250,000.00 attorney’s fees;

and to pay the cost of suit.

SO ORDERED.

Ruling of the CA

Petitioner appealed, assigning to the RTC the following errors, to wit:

THE TRIAL COURT ERRED IN RULING THAT THE PLAINTIFFS-APPELLEES ARE THE HEIRS
OF THE LATE CHRISTIAN HARPER, AS THERE IS NO COMPETENT EVIDENCE ON RECORD
SUPPORTING SUCH RULING.

II

THE TRIAL COURT ERRED IN RULING THAT THE DEFENDANT-APPELLANT’SNEGLIGENCE

WAS THE PROXIMATE CAUSE OF THE DEATH OF MR. HARPER, OR IN NOT RULING THAT IT
WAS MR. CHRISTIAN HARPER’S OWN NEGLIGENCE WHICH WAS THE SOLE, PROXIMATE
CAUSE OF HIS DEATH.

III

THE TRIAL COURT ERRED IN AWARDING TO THE PLAINTIFFS-APPELLEES THE AMOUNTOF

PH₱ 43,901,055.00, REPRESENTING THE ALLEGED LOST EARNING OF THE LATE CHRISTIAN
HARPER, THERE BEING NO COMPETENT PROOF OF THE EARNING OF MR. HARPER
DURING HIS LIFETIME AND OF THE ALLEGATION THAT THE PLAINTIFFS-APPELLEES ARE
MR. HARPER’S HEIRS.
 IV

THE TRIAL COURT ERRED IN AWARDING TO THE PLAINTIFFS-APPELLEES THE AMOUNT OF

PH₱ 739,075.00, REPRESENTING THE ALLEGED COST OF TRANSPORTING THE REMAINS
OF MR. CHRISTIAN HARPER TO OSLO, NORWAY, THERE BEING NO PROOF ON RECORD
THAT IT WAS PLAINTIFFS-APPELLEES WHO PAID FOR SAID COST.

THE TRIAL COURT ERRED IN AWARDING ATTORNEY’S FEES AND COST OF SUIT TO THE
PLAINTIFFS-APPELLEES, THERE BEING NO PROOF ON RECORD SUPPORTING SUCH
AWARD.

On October 21, 2009, the CA affirmed the judgment of the RTC with modification,9 as follows:

WHEREFORE, the assailed Decision of the Regional Trial Court dated October 25, 2005 is
hereby AFFIRMED with MODIFICATION. Accordingly, defendant-appellant is ordered to pay
plaintiffs-appellees the amounts of ₱ 52,078,702.50, as actual and compensatory damages; ₱
25,000.00, as temperate damages; ₱ 250,000.00, as attorney’s fees; and to pay the costs of the suit.

SO ORDERED.10

Issues

Petitioner still seeks the review of the judgment of the CA, submitting the following issues for
consideration and determination, namely:

I.

WHETHER OR NOT THE PLAINTIFFS-APPELLEES WERE ABLE TO PROVE WITH COMPETENT

EVIDENCE THE AFFIRMATIVE ALLEGATIONS IN THE COMPLAINT THAT THEY ARE THE
WIDOW AND SON OF MR. CHRISTIAN HARPER.

II.

WHETHER OR NOT THE APPELLEES WERE ABLE TO PROVE WITH COMPETENT EVIDENCE
THE AFFIRMATIVE ALLEGATIONS IN THE COMPLAINT THAT THERE WAS NEGLIGENCE ON
THE PART OF THE APPELLANT AND ITS SAID NEGLIGENCE WAS THE PROXIMATE CAUSE
OF THE DEATH OF MR. CHRISTIAN HARPER.

III.

WHETHER OR NOT THE PROXIMATE CAUSE OF THE DEATH OF MR. CHRISTIAN HARPER
WAS HIS OWN NEGLIGENCE.

Ruling

The appeal lacks merit.

 I.
Requirements for authentication of documents
establishing respondents’ legal relationship
with the victim as his heirs were complied with

As to the first issue, the CA pertinently held as follows:

The documentary evidence that plaintiffs-appellees offered relative to their heirship consisted of the
following –

1. Exhibit "Q" - Birth Certificate of Jonathan Christopher Harper, son of Christian Fredrik
Harper and Ellen Johanne Harper;

2. Exhibit "Q-1" - Marriage Certificate of Ellen Johanne Clausen and Christian Fredrik
Harper;

3. Exhibit "R" - Birth Certificate of Christian Fredrick Harper, son of Christopher Shaun
Harper and Eva Harper; and

4. Exhibit "R-1" - Certificate from the Oslo Probate Court stating that Ellen Harper was
married to the deceased, Christian Fredrick Harper and listed Ellen Harper and Jonathan
Christopher Harper as the heirs of Christian Fredrik Harper.

Defendant-appellant points out that plaintiffs-appellees committed several mistakes as regards the
above documentary exhibits, resultantly making them incompetent evidence, to wit, (a) none of the
plaintiffs-appellees or any of the witnesses who testified for the plaintiffs gave evidence that Ellen
Johanne Harper and Jonathan Christopher Harper are the widow and son of the deceased Christian
Fredrik Harper; (b) Exhibit "Q" was labeled as Certificate of Marriage in plaintiffs-appellees’ Formal
Offer of Evidence, when it appears to be the Birth Certificate of the late Christian Harper; (c) Exhibit
"Q-1" is a translation of the Marriage Certificate of Ellen Johanne Harper and Christian Fredrik
Harper, the original of which was not produced in court, much less, offered in evidence. Being a
mere translation, it cannot be a competent evidence of the alleged fact that Ellen Johanne Harper is
the widow of Christian Fredrik Harper, pursuant to the Best Evidence Rule. Even assuming that it is
an original Marriage Certificate, it is not a public document that is admissible without the need of
being identified or authenticated on the witness stand by a witness, as it appears to be a document
issued by the Vicar of the Parish of Ullern and, hence, a private document; (d) Exhibit "R" was
labeled as Probate Court Certificate in plaintiffs-appellees’ Formal Offer of Evidence, when it
appears to be the Birth Certificate of the deceased, Christian Fredrik Harper; and (e) Exhibit "R-1" is
a translation of the supposed Probate Court Certificate, the original of which was not produced in
court, much less, offered in evidence. Being a mere translation, it is an incompetent evidence of the
alleged fact that plaintiffs-appellees are the heirs of Christian Fredrik Harper, pursuant to the Best
Evidence Rule.

Defendant-appellant further adds that Exhibits "Q-1" and "R-1" were not duly attested by the legal
custodians (by the Vicar of the Parish of Ullern for Exhibit "Q-1" and by the Judge or Clerk of the
Probate Court for Exhibit "R-1") as required under Sections 24 and 25, Rule 132 of the Revised
Rules of Court. Likewise, the said documents are not accompanied by a certificate that such officer
has the custody as also required under Section 24 of Rule 132. Consequently, defendant-appellant
asseverates that Exhibits "Q-1" and "R-1" as private documents, which were not duly authenticated
on the witness stand by a competent witness, are essentially hearsay in nature that have no
probative value. Therefore, it is obvious that plaintiffs-appellees failed to prove that they are the
widow and son of the late Christian Harper.
Plaintiffs-appellees make the following counter arguments, viz, (a) Exhibit "Q-1", the Marriage
Certificate of Ellen Johanne Harper and Christian Fredrik Harper, was issued by the Office of the
Vicar of Ullern with a statement that "this certificate is a transcript from the Register of Marriage of
Ullern Church." The contents of Exhibit "Q-1" were translated by the Government of the Kingdom of
Norway, through its authorized translator, into English and authenticated by the Royal Ministry of
Foreign Affairs of Norway, which in turn, was also authenticated by the Consul, Embassy of the
Republic of the Philippines in Stockholm, Sweden; (b) Exhibit "Q", the Birth Certificate of Jonathan
Christopher Harper, was issued and signed by the Registrar of the Kingdom of Norway, as
authenticated by the Royal Ministry of Foreign Affairs of Norway, whose signature was also
authenticated by the Consul, Embassy of the Republic of the Philippines in Stockholm, Sweden; and
(c) Exhibit "R-1", the Probate Court Certificate was also authenticated by the Royal Ministry of
Foreign Affairs of Norway, whose signature was also authenticated by the Consul, Embassy of the
Republic of the Philippines in Stockholm, Sweden.

They further argue that since Exhibit "Q-1", Marriage Certificate, was issued by the vicar or parish
priest, the legal custodian of parish records, it is considered as an exception to the hearsay rule. As
for Exhibit "R-1", the Probate Court Certificate, while the document is indeed a translation of the
certificate, it is an official certification, duly confirmed by the Government of the Kingdom of Norway;
its contents were lifted by the Government Authorized Translator from the official record and thus, a
written official act of a foreign sovereign country.

WE rule for plaintiffs-appellees.

The Revised Rules of Court provides that public documents may be evidenced by a copy attested by
the officer having the legal custody of the record. The attestation must state, in substance, that the
copy is a correct copy of the original, or a specific part thereof, as the case may be. The attestation
must be under the official seal of the attesting officer, if there be any, or if he be the clerk of a court
having a seal, under the seal of such court.

If the record is not kept in the Philippines, the attested copy must be accompanied with a certificate
that such officer has the custody. If the office in which the record is kept is in a foreign country, the
certificate may be made by a secretary of the embassy or legation, consul general, consul, vice
consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the
foreign country in which the record is kept, and authenticated by the seal of his office.

The documents involved in this case are all kept in Norway. These documents have been
authenticated by the Royal Norwegian Ministry of Foreign Affairs; they bear the official seal of the
Ministry and signature of one, Tanja Sorlie. The documents are accompanied by an Authentication
by the Consul, Embassy of the Republic of the Philippines in Stockholm, Sweden to the effect that,
Tanja Sorlie is duly authorized to legalize official documents for the Ministry.

Exhibits "Q" and "R" are extracts of the register of births of both Jonathan Christopher Harper and
the late Christian Fredrik Harper, respectively, wherein the former explicitly declares that Jonathan
Christopher is the son of Christian Fredrik and Ellen Johanne Harper. Said documents bear the
signature of the keeper, Y. Ayse B. Nordal with the official seal of the Office of the Registrar of Oslo,
and the authentication of Tanja Sorlie of the Royal Ministry of Foreign Affairs, Oslo, which were
further authenticated by Philippine Consul Marian Jocelyn R. Tirol. In addition, the latter states that
said documents are the birth certificates of Jonathan Christopher Harper and Christian Fredrik
Harper issued by the Registrar Office of Oslo, Norway on March 23, 2004.

Exhibits "Q-1", on the other hand, is the Marriage Certificate of Christian Fredrik Harper and Ellen
Johanne Harper issued by the vicar of the Parish of Ullern while Exhibit "R-1" is the Probate Court
Certificate from the Oslo Probate Court, naming Ellen Johanne Harper and Jonathan Christopher
Harper as the heirs of the deceased Christian Fredrik Harper. The documents are certified true
translations into English of the transcript of the said marriage certificate and the probate court
certificate. They were likewise signed by the authorized government translator of Oslo with the seal
of his office; attested by Tanja Sorlie and further certified by our own Consul.

In view of the foregoing, WE conclude that plaintiffs-appellees had substantially complied with the
requirements set forth under the rules. WE would also like to stress that plaintiffs-appellees herein
are residing overseas and are litigating locally through their representative. While they are not
excused from complying with our rules, WE must take into account the attendant reality that these
overseas litigants communicate with their representative and counsel via long distance
communication. Add to this is the fact that compliance with the requirements on attestation and
authentication or certification is no easy process and completion thereof may vary depending on
different factors such as the location of the requesting party from the consulate and the office of the
record custodian, the volume of transactions in said offices and even the mode of sending these
documents to the Philippines. With these circumstances under consideration, to OUR minds, there is
every reason for an equitable and relaxed application of the rules on the issuance of the required
attestation from the custodian of the documents to plaintiffs-appellees’ situation. Besides, these
questioned documents were duly signed by the officers having custody of the same.11

Petitioner assails the CA’s ruling that respondents substantially complied with the rules on the
authentication of the proofs of marriage and filiation set by Section 24 and Section 25 of Rule 132 of
the Rules of Court when they presented Exhibit Q, Exhibit Q-1, Exhibit R and Exhibit R-1, because
the legal custodian did not duly attest that Exhibit Q-1 and Exhibit R-1 were the correct copies of the
originals on file, and because no certification accompanied the documents stating that "such officer
has custody of the originals." It contends that respondents did not competently prove their being
Harper’s surviving heirs by reason of such documents being hearsay and incompetent.

Petitioner’s challenge against respondents’ documentary evidence on marriage and heirship is not
well-taken.

Section 24 and Section 25 of Rule 132 provide:

Section 24. Proof of official record. — The record of public documents referred to in paragraph (a) of
Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or
by a copy attested by the officer having the legal custody of the record, or by his deputy, and
accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the
custody. If the office in which the record is kept is in a foreign country, the certificate may be made
by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or
by any officer in the foreign service of the Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his office.

Section 25. What attestation of copy must state. — Whenever a copy of a document or record is
attested for the purpose of evidence, the attestation must state, in substance, that the copy is a
correct copy of the original, or a specific part thereof, as the case may be. The attestation must be
under the official seal of the attesting officer, if there be any, or if he be the clerk of a court having a
seal, under the seal of such court.

Although Exhibit Q,12 Exhibit Q-1,13 Exhibit R14 and Exhibit R-115 were not attested by the officer having
the legal custody of the record or by his deputy in the manner required in Section 25 of Rule 132,
and said documents did not comply with the requirement under Section 24 of Rule 132 to the effect
that if the record was not kept in the Philippines a certificate of the person having custody must
accompany the copy of the document that was duly attested stating that such person had custody of
the documents, the deviation was not enough reason to reject the utility of the documents for the
purposes they were intended to serve.

Exhibit Q and Exhibit R were extracts from the registry of births of Oslo, Norway issued on March 23,
2004 and signed by Y. Ayse B. Nordal, Registrar, and corresponded to respondent Jonathan
Christopher Harper and victim Christian Fredrik Harper, respectively.16 Exhibit Q explicitly stated that
Jonathan was the son of Christian Fredrik Harper and Ellen Johanne Harper, while Exhibit R
attested to the birth of Christian Fredrik Harper on December 4, 1968. Exhibit Q and Exhibit R were
authenticated on March 29, 2004 by the signatures of Tanja Sorlie of the Royal Ministry of Foreign
Affairs of Norway as well as by the official seal of that office. In turn, Consul Marian Jocelyn R. Tirol
of the Philippine Consulate in Stockholm, Sweden authenticated the signatures of Tanja Sorlie and
the official seal of the Royal Ministry of Foreign Affairs of Norway on Exhibit Q and Exhibit R,
explicitly certifying to the authority of Tanja Sorlie "to legalize official documents for the Royal
Ministry of Foreign Affairs of Norway."17

Exhibit Q-1,18 the Marriage Certificate of Ellen Johanne Clausen Harper and Christian Fredrik Harper,
contained the following data, namely: (a) the parties were married on June 29, 1996 in Ullern
Church; and (b) the certificate was issued by the Office of the Vicar of Ullern on June 29, 1996.

Exhibit Q-1 was similarly authenticated by the signature of Tanja Sorlie of the Royal Ministry of
Foreign Affairs of Norway, with the official seal of that office. Philippine Consul Tirol again expressly
certified to the capacity of Sorlie "to legalize official documents for the Royal Ministry of Foreign
Affairs of Norway,"19 and further certified that the document was a true translation into English of a
transcript of a Marriage Certificate issued to Christian Frederik Harper and Ellen Johanne Clausen
by the Vicar of the Parish of Ullern on June 29, 1996.

Exhibit R-1,20 a Probate Court certificate issued by the Oslo Probate Court on February 18, 2000
through Morten Bolstad, its Senior Executive Officer, was also authenticated by the signature of
Tanja Sorlie and with the official seal of the Royal Ministry of Foreign Affairs of Norway. As with the
other documents, Philippine Consul Tirol explicitly certified to the capacity of Sorlie "to legalize
official documents for the Royal Ministry of Foreign Affairs of Norway," and further certified that the
document was a true translation into English of the Oslo Probate Court certificate issued on
February 18, 2000 to the effect that Christian Fredrik Harper, born on December 4, 1968, had
reportedly died on November 6, 1999.21

The Oslo Probate Court certificate recited that both Ellen Johanne Harper and Christopher S. Harper
were Harper’s heirs, to wit:

The above names surviving spouse has accepted responsibility for the commitments of the
deceased in accordance with the provisions of Section 78 of the Probate Court Act (Norway), and
the above substitute guardian has agreed to the private division of the estate.

The following heir and substitute guardian will undertake the private division of the estate:

Ellen Johanne Harper

Christopher S. Harper

This probate court certificate relates to the entire estate.

Oslo Probate Court, 18 February 2000.22

The official participation in the authentication process of Tanja Sorlie of the Royal Ministry of Foreign
Affairs of Norway and the attachment of the official seal of that office on each authentication
indicated that Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 were documents of a public nature in
Norway, not merely private documents. It cannot be denied that based on Philippine Consul Tirol’s
official authentication, Tanja Sorlie was "on the date of signing, duly authorized to legalize official
documents for the Royal Ministry of Foreign Affairs of Norway." Without a showing to the contrary by
petitioner, Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 should be presumed to be themselves
official documents under Norwegian law, and admissible as prima facie evidence of the truth of their
contents under Philippine law.

At the minimum, Exhibit Q, Exhibit R, Exhibit Q-1 and Exhibit R-1 substantially met the requirements
of Section 24 and Section 25 of Rule 132 as a condition for their admission as evidence in default of
a showing by petitioner that the authentication process was tainted with bad faith. Consequently, the
objective of ensuring the authenticity of the documents prior to their admission as evidence was
substantially achieved. In Constantino-David v. Pangandaman-Gania,23 the Court has said that
substantial compliance, by its very nature, is actually inadequate observance of the requirements of
a rule or regulation that are waived under equitable circumstances in order to facilitate the
administration of justice, there being no damage or injury caused by such flawed compliance.

The Court has further said in Constantino-David v. Pangandaman-Gania that the focus in every
inquiry on whether or not to accept substantial compliance is always on the presence of equitable
conditions to administer justice effectively and efficiently without damage or injury to the spirit of the
legal obligation.24 There are, indeed, such equitable conditions attendant here, the foremost of which
is that respondents had gone to great lengths to submit the documents. As the CA observed,
respondents’ compliance with the requirements on attestation and authentication of the documents
had not been easy; they had to contend with many difficulties (such as the distance of Oslo, their
place of residence, from Stockholm, Sweden, where the Philippine Consulate had its office; the
volume of transactions in the offices concerned; and the safe transmission of the documents to the
Philippines).25 Their submission of the documents should be presumed to be in good faith because
they did so in due course. It would be inequitable if the sincerity of respondents in obtaining and
submitting the documents despite the difficulties was ignored.

The principle of substantial compliance recognizes that exigencies and situations do occasionally
demand some flexibility in the rigid application of the rules of procedure and the laws.26 That rules of
procedure may be mandatory in form and application does not forbid a showing of substantial
compliance under justifiable circumstances,27because substantial compliance does not equate to a
disregard of basic rules. For sure, substantial compliance and strict adherence are not always
incompatible and do not always clash in discord. The power of the Court to suspend its own rules or
to except any particular case from the operation of the rules whenever the purposes of justice
require the suspension cannot be challenged.28 In the interest of substantial justice, even procedural
rules of the most mandatory character in terms of compliance are frequently relaxed. Similarly, the
procedural rules should definitely be liberally construed if strict adherence to their letter will result in
absurdity and in manifest injustice, or where the merits of a party’s cause are apparent and outweigh
considerations of non-compliance with certain formal requirements.29 It is more in accord with justice
that a party-litigant is given the fullest opportunity to establish the merits of his claim or defense than
for him to lose his life, liberty, honor or property on mere technicalities. Truly, the rules of procedure
are intended to promote substantial justice, not to defeat it, and should not be applied in a very rigid
and technical sense.30

Petitioner urges the Court to resolve the apparent conflict between the rulings in Heirs of Pedro
Cabais v. Court of Appeals31 (Cabais) and in Heirs of Ignacio Conti v. Court of
Appeals32 (Conti) establishing filiation through a baptismal certificate.33
Petitioner’s urging is not warranted, both because there is no conflict between the rulings
in Cabais and Conti, and because neither Cabais nor Conti is relevant herein.

In Cabais, the main issue was whether or not the CA correctly affirmed the decision of the RTC that
had relied mainly on the baptismal certificate of Felipa C. Buesa to establish the parentage and
filiation of Pedro Cabais. The Court held that the petition was meritorious, stating:

A birth certificate, being a public document, offers prima facie evidence of filiation and a high degree
of proof is needed to overthrow the presumption of truth contained in such public document. This is
pursuant to the rule that entries in official records made in the performance of his duty by a public
officer are prima facie evidence of the facts therein stated. The evidentiary nature of such document
must, therefore, be sustained in the absence of strong, complete and conclusive proof of its falsity or
nullity.

On the contrary, a baptismal certificate is a private document, which, being hearsay, is not a
conclusive proof of filiation. It does not have the same probative value as a record of birth, an official
or public document. In US v. Evangelista, this Court held that church registers of births, marriages,
and deaths made subsequent to the promulgation of General Orders No. 68 and the passage of Act
No. 190 are no longer public writings, nor are they kept by duly authorized public officials. Thus, in
this jurisdiction, a certificate of baptism such as the one herein controversy is no longer regarded
with the same evidentiary value as official records of birth. Moreover, on this score, jurisprudence is
consistent and uniform in ruling that the canonical certificate of baptism is not sufficient to prove
recognition.34

The Court sustained the Cabais petitioners’ stance that the RTC had apparently erred in relying on
the baptismal certificate to establish filiation, stressing the baptismal certificate’s limited evidentiary
value as proof of filiation inferior to that of a birth certificate; and declaring that the baptismal
certificate did not attest to the veracity of the statements regarding the kinsfolk of the one baptized.
Nevertheless, the Court ultimately ruled that it was respondents’ failure to present the birth
certificate, more than anything else, that lost them their case, stating that: "The unjustified failure to
present the birth certificate instead of the baptismal certificate now under consideration or to
otherwise prove filiation by any other means recognized by law weigh heavily against respondents."35

In Conti, the Court affirmed the rulings of the trial court and the CA to the effect that the Conti
respondents were able to prove by preponderance of evidence their being the collateral heirs of
deceased Lourdes Sampayo. The Conti petitioners disagreed, arguing that baptismal certificates did
not prove the filiation of collateral relatives of the deceased. Agreeing with the CA, the Court said:

We are not persuaded. Altogether, the documentary and testimonial evidence submitted xxx are
competent and adequate proofs that private respondents are collateral heirs of Lourdes Sampayo.

xxx

Under Art. 172 of the Family Code, the filiation of legitimate children shall be proved by any other
means allowed by the Rules of Court and special laws, in the absence of a record of birth or a
parent’s admission of such legitimate filiation in a public or private document duly signed by the
parent. Such other proof of one’s filiation may be a baptismal certificate, a judicial admission, a
family Bible in which his name has been entered, common reputation respecting his pedigree,
admission by silence, the testimonies of witnesses and other kinds of proof admissible under Rule
130 of the Rules of Court. By analogy, this method of proving filiation may also be utilized in the
instant case.
Public documents are the written official acts, or records of the official act of the sovereign authority,
official bodies and tribunals, and public officers, whether of the Philippines, or a foreign country. The
baptismal certificates presented in evidence by private respondents are public documents. Parish
priests continue to be the legal custodians of the parish records and are authorized to issue true
copies, in the form of certificates, of the entries contained therein.

The admissibility of baptismal certificates offered by Lydia S. Reyes, absent the testimony of the
officiating priest or the official recorder, was settled in People v. Ritter, citing U.S. v. de Vera (28 Phil.
105 1914, thus:

.... The entries made in the Registry Book may be considered as entries made in the course of
business under Section 43 of Rule 130, which is an exception to the hearsay rule. The baptisms
administered by the church are one of its transactions in the exercise of ecclesiastical duties and
recorded in the book of the church during this course of its business.

It may be argued that baptismal certificates are evidence only of the administration of the sacrament,
but in this case, there were four (4) baptismal certificates which, when taken together, uniformly
show that Lourdes, Josefina, Remedios and Luis had the same set of parents, as indicated therein.
Corroborated by the undisputed testimony of Adelaida Sampayo that with the demise of Lourdes and
her brothers Manuel, Luis and sister Remedios, the only sibling left was Josefina Sampayo Reyes,
such baptismal certificates have acquired evidentiary weight to prove filiation.36

Obviously, Conti did not treat a baptismal certificate, standing alone, as sufficient to prove filiation;
on the contrary, Conti expressly held that a baptismal certificate had evidentiary value to prove
filiation if considered alongside other evidence of filiation. As such, a baptismal certificate alone is
not sufficient to resolve a disputed filiation.

Unlike Cabais and Conti, this case has respondents presenting several documents, like the birth
certificates of Harper and respondent Jonathan Harper, the marriage certificate of Harper and Ellen
Johanne Harper, and the probate court certificate, all of which were presumably regarded as public
documents under the laws of Norway. Such documentary evidence sufficed to competently establish
the relationship and filiation under the standards of our Rules of Court.

II
Petitioner was liable due to its own negligence

Petitioner argues that respondents failed to prove its negligence; that Harper’s own negligence in
allowing the killers into his hotel room was the proximate cause of his own death; and that hotels
were not insurers of the safety of their guests.

The CA resolved petitioner’s arguments thuswise:

Defendant-appellant contends that the pivotal issue is whether or not it had committed negligence
and corollarily, whether its negligence was the immediate cause of the death of Christian Harper. In
its defense, defendant-appellant mainly avers that it is equipped with adequate security system as
follows: (1) keycards or vingcards for opening the guest rooms, (2) two CCTV monitoring cameras
on each floor of the hotel and (3) roving guards with handheld radios, the number of which depends
on the occupancy rate of the hotel. Likewise, it reiterates that the proximate cause of Christian
Harper’s death was his own negligence in inviting to his room the two (2) still unidentified suspects.

Plaintiffs-appellees in their Brief refute, in that, the liability of defendant-appellant is based upon the
fact that it was in a better situation than the injured person, Christian Harper, to foresee and prevent
the happening of the injurious occurrence. They maintain that there is no dispute that even prior to
the untimely demise of Christian Harper, defendant-appellant was duly forewarned of its security
lapses as pointed out by its Chief Security Officer, Col. Rodrigo De Guzman, who recommended that
one roving guard be assigned on each floor of the hotel considering the length and shape of the
corridors. They posit that defendant-appellant’s inaction constitutes negligence.

This Court finds for plaintiffs-appellees.

As the action is predicated on negligence, the relevant law is Article 2176 of the Civil Code, which
states that –

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

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

The test of negligence is objective. WE measure the act or omission of the tortfeasor with a
perspective as that of an ordinary reasonable person who is similarly situated. The test, as applied to
the extant case, is whether or not defendant-appellant, under the attendant circumstances, used that
reasonable care and caution which an ordinary reasonable person would have used in the same
situation.

WE rule in the negative.

In finding defendant-appellant remiss in its duty of exercising the required reasonable care under the
circumstances, the court a quo reasoned-out, to wit:

"Of the witnesses presented by plaintiffs to prove its (sic) case, the only one with competence to
testify on the issue of adequacy or inadequacy of security is Col. Rodrigo De Guzman who was then
the Chief Security Officer of defendant hotel for the year 1999. He is a retired police officer and had
vast experience in security jobs. He was likewise a member of the elite Presidential Security Group.

He testified that upon taking over the job as the chief of the security force of the hotel, he made an
assessment of the security situation. Col. De Guzman was not satisfied with the security set-up and
told the hotel management of his desire to improve it. In his testimony, De Guzman testified that at
the time he took over, he noticed that there were few guards in the elevated portion of the hotel
where the rooms were located. The existing security scheme then was one guard for 3 or 4 floors.
He likewise testified that he recommended to the hotel management that at least one guard must be
assigned per floor especially considering that the hotel has a long "L-shaped" hallway, such that one
cannot see both ends of the hallway. He further opined that "even one guard in that hallway is not
enough because of the blind portion of the hallway."
On cross-examination, Col. De Guzman testified that the security of the hotel was adequate at the
time the crime occurred because the hotel was not fully booked. He qualified his testimony on direct
in that his recommendation of one guard per floor is the "ideal" set-up when the hotel is fully-booked.

Be that as it may, it must be noted that Col. De Guzman also testified that the reason why the hotel
management disapproved his recommendation was that the hotel was not doing well. It is for this
reason that the hotel management did not heed the recommendation of Col. De Guzman, no matter
how sound the recommendation was, and whether the hotel is fully-booked or not. It was a business
judgment call on the part of the defendant.

Plaintiffs anchor its (sic) case on our law on quasi-delicts.

Article 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called quasi-delict.

Liability on the part of the defendant is based upon the fact that he was in a better situation than the
injured person to foresee and prevent the happening of the injurious occurrence.

There is no dispute that even prior to the untimely demise of Mr. Harper, defendant was duly
forewarned of the security lapses in the hotel. Col. De Guzman was particularly concerned with the
security of the private areas where the guest rooms are. He wanted not just one roving guard in
every three or four floors. He insisted there must be at least one in each floor considering the length
and the shape of the corridors. The trained eyes of a security officer was (sic) looking at that deadly
scenario resulting from that wide security breach as that which befell Christian Harper.

The theory of the defense that the malefactor/s was/were known to Harper or was/were visitors of
Harper and that there was a shindig among [the] three deserves scant consideration.

The NBI Biology Report (Exh. "C" & "D") and the Toxicology Report (Exh. "E") belie the defense
theory of a joyous party between and among Harper and the unidentified malefactor/s. Based on the
Biology Report, Harper was found negative of prohibited and regulated drugs. The Toxicology
Report likewise revealed that the deceased was negative of the presence of alcohol in his blood.

The defense even suggests that the malefactor/s gained entry into the private room of Harper either
because Harper allowed them entry by giving them access to the vingcard or because Harper
allowed them entry by opening the door for them, the usual gesture of a room occupant to his
visitors.

While defendant’s theory may be true, it is more likely, under the circumstances obtaining that the
malefactor/s gained entry into his room by simply knocking at Harper’s door and the latter opening it
probably thinking it was hotel personnel, without an inkling that criminal/s could be in the premises.

The latter theory is more attuned to the dictates of reason. If indeed the female "visitor" is known to
or a visitor of Harper, she should have entered the the room together with Harper. It is quite unlikely
that a supposed "visitor" would wait three minutes to be with a guest when he/she could go with the
guest directly to the room. The interval of three minutes in Harper’s entry and that of the alleged
female visitor belies the "theory of acquaintanceship". It is most likely that the female "visitor" was
the one who opened the door to the male "visitor", undoubtedly, a co-conspirator.
In any case, the ghastly incident could have been prevented had there been adequate security in
each of the hotel floors. This, coupled with the earlier recommendation of Col. De Guzman to the
hotel management to act on the security lapses of the hotel, raises the presumption that the crime
was foreseeable.

Clearly, defendant’s inaction constitutes negligence or want of the reasonable care demanded of it in
that particular situation.

In a case, the Supreme Court defined negligence as:

The failure to observe for the protection of the interests of another person that degree of care,
precaution and vigilance, which the circumstances justly demand, whereby such person suffers
injury.

Negligence is want of care required by the circumstances. It is a relative or comparative, not an

absolute term, and its application depends upon the situation of the parties, and the degree of care
and vigilance which the circumstances reasonably impose. Where the danger is great, a high degree
of care is necessary.

Moreover, in applying the premises liability rule in the instant case as it is applied in some jurisdiction
(sic) in the United States, it is enough that guests are injured while inside the hotel premises to make
the hotelkeeper liable. With great caution should the liability of the hotelkeeper be enforced when a
guest died inside the hotel premises.

It also bears stressing that there were prior incidents that occurred in the hotel which should have
forewarned the hotel management of the security lapses of the hotel. As testified to by Col. De
Guzman, "there were ‘minor’ incidents" (loss of items) before the happening of the instant case.

These "minor" incidents may be of little significance to the hotel, yet relative to the instant case, it
speaks volume. This should have served as a caveat that the hotel security has lapses.

Makati Shangri-La Hotel, to stress, is a five-star hotel. The "reasonable care" that it must exercise for
the safety and comfort of its guests should be commensurate with the grade and quality of the
accommodation it offers. If there is such a thing as "five-star hotel security", the guests at Makati
Shangri-La surely deserves just that!

When one registers (as) a guest of a hotel, he makes the establishment the guardian of his life and
his personal belongings during his stay. It is a standard procedure of the management of the hotel to
screen visitors who call on their guests at their rooms. The murder of Harper could have been
avoided had the security guards of the Shangri-La Hotel in Makati dutifully observed this standard
procedure."

WE concur.

Well settled is the doctrine that "the findings of fact by the trial court are accorded great respect by
appellate courts and should not be disturbed on appeal unless the trial court has overlooked,
ignored, or disregarded some fact or circumstances of sufficient weight or significance which, if
considered, would alter the situation." After a conscientious sifting of the records, defendant-
appellant fails to convince US to deviate from this doctrine.
It could be gleaned from findings of the trial court that its conclusion of negligence on the part of
defendant-appellant is grounded mainly on the latter’s inadequate hotel security, more particularly on
the failure to deploy sufficient security personnel or roving guards at the time the ghastly incident
happened.

A review of the testimony of Col. De Guzman reveals that on direct examination he testified that at
the time he assumed his position as Chief Security Officer of defendant-appellant, during the early
part of 1999 to the early part of 2000, he noticed that some of the floors of the hotel were being
guarded by a few guards, for instance, 3 or 4 floors by one guard only on a roving manner. He then
made a recommendation that the ideal-set up for an effective security should be one guard for every
floor, considering that the hotel is L-shaped and the ends of the hallways cannot be seen. At the time
he made the recommendation, the same was denied, but it was later on considered and approved
on December 1999 because of the Centennial Celebration.

On cross-examination, Col. De Guzman confirmed that after he took over as Chief Security Officer,
the number of security guards was increased during the first part of December or about the last
week of November, and before the incident happened, the security was adequate. He also qualified
that as to his direct testimony on "ideal-set up", he was referring to one guard for every floor if the
hotel is fully booked. At the time he made his recommendation in the early part of 1999, it was
disapproved as the hotel was not doing well and it was not fully booked so the existing security was
adequate enough. He further explained that his advice was observed only in the late November
1999 or the early part of December 1999.

It could be inferred from the foregoing declarations of the former Chief Security Officer of defendant-
appellant that the latter was negligent in providing adequate security due its guests. With confidence,
it was repeatedly claimed by defendant-appellant that it is a five-star hotel. Unfortunately, the record
failed to show that at the time of the death of Christian Harper, it was exercising reasonable care to
protect its guests from harm and danger by providing sufficient security commensurate to it being
one of the finest hotels in the country. In so concluding, WE are reminded of the Supreme Court’s
enunciation that the hotel business like the common carrier’s business is imbued with public interest.
Catering to the public, hotelkeepers are bound to provide not only lodging for hotel guests but also
security to their persons and belongings. The twin duty constitutes the essence of the business.

It is clear from the testimony of Col. De Guzman that his recommendation was initially denied due to
the fact that the business was then not doing well. The "one guard, one floor" recommended policy,
although ideal when the hotel is fully-booked, was observed only later in November 1999 or in the
early part of December 1999, or needless to state, after the murder of Christian Harper. The
apparent security lapses of defendant-appellant were further shown when the male culprit who
entered Christian Harper’s room was never checked by any of the guards when he came inside the
hotel. As per interview conducted by the initial investigator, PO3 Cornelio Valiente to the guards,
they admitted that nobody know that said man entered the hotel and it was only through the monitor
that they became aware of his entry. It was even evidenced by the CCTV that before he walked to
the room of the late Christian Harper, said male suspect even looked at the monitoring camera.
Such act of the man showing wariness, added to the fact that his entry to the hotel was unnoticed, at
an unholy hour, should have aroused suspicion on the part of the roving guard in the said floor, had
there been any. Unluckily for Christian Harper, there was none at that time.

Proximate cause is defined as 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. More comprehensively, proximate cause is that cause acting first and producing the injury,
either immediately or by setting other events in motion, all constituting a natural and continuous
chain of events, each having a close causal connection with its immediate predecessor, the final
event in the chain immediately effecting the injury as natural and probable result of the cause which
first acted, under such circumstances that the person responsible for the first event should, as an
ordinarily prudent and intelligent person, have reasonable ground to expect at the moment of his act
or default that an injury to some person might probably result therefrom.

Defendant-appellant’s contention that it was Christian Harper’s own negligence in allowing the
malefactors to his room that was the proximate cause of his death, is untenable. To reiterate,
defendant-appellant is engaged in a business imbued with public interest, ergo, it is bound to provide
adequate security to its guests. As previously discussed, defendant-appellant failed to exercise such
reasonable care expected of it under the circumstances. Such negligence is the proximate cause
which set the chain of events that led to the eventual demise of its guest. Had there been reasonable
security precautions, the same could have saved Christian Harper from a brutal death.

The Court concurs entirely with the findings and conclusions of the CA, which the Court regards to
be thorough and supported by the records of the trial. Moreover, the Court cannot now review and
pass upon the uniform findings of negligence by the CA and the RTC because doing so would
require the Court to delve into and revisit the factual bases for the finding of negligence, something
fully contrary to its character as not a trier of facts. In that regard, the factual findings of the trial court
that are supported by the evidence on record, especially when affirmed by the CA, are conclusive on
the Court.37 Consequently, the Court will not review unless there are exceptional circumstances for
doing so, such as the following:

(a) When the findings are grounded entirely on speculation, surmises or conjectures;

(b) When the inference made is manifestly mistaken, absurd or impossible;

(c) When there is grave abuse of discretion;

(d) When the judgment is based on a misapprehension of facts;

(e) When the findings of facts are conflicting;

(f) When in making its findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;

(g) When the findings are contrary to the trial court;

(h) When the findings are conclusions without citation of specific evidence on which they are based;

(i) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not
disputed by the respondent;

(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by
the evidence on record; and

(k) When the Court of Appeals manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different conclusion.38

None of the exceptional circumstances obtains herein. Accordingly, the Court cannot depart from or
disturb the factual findings on negligence of petitioner made by both the RTC and the CA.39
Even so, the Court agrees with the CA that petitioner failed to provide the basic and adequate
security measures expected of a five-star hotel; and that its omission was the proximate cause of
Harper’s death.

The testimony of Col. De Guzman revealed that the management practice prior to the murder of
Harper had been to deploy only one security or roving guard for every three or four floors of the
building; that such ratio had not been enough considering the L-shape configuration of the hotel that
rendered the hallways not visible from one or the other end; and that he had recommended to
management to post a guard for each floor, but his recommendation had been disapproved because
the hotel "was not doing well" at that particular time.40

Probably realizing that his testimony had weakened petitioner’s position in the case, Col. De
Guzman soon clarified on cross-examination that petitioner had seen no need at the time of the
incident to augment the number of guards due to the hotel being then only half-booked. Here is how
his testimony went:

ATTY MOLINA:

I just forgot one more point, Your Honor please. Was there ever a time, Mr. Witness, that your
recommendation to post a guard in every floor ever considered and approved by the hotel?

A: Yes, Sir.

Q: When was this?

A: That was on December 1999 because of the Centennial Celebration when the hotel accepted so
many guests wherein most of the rooms were fully booked and I recommended that all the hallways
should be guarded by one guard.41

xxx

ATTY COSICO:

Q: So at that time that you made your recommendation, the hotel was half-filled.

A: Maybe.

Q: And even if the hotel is half-filled, your recommendation is that each floor shall be maintained by
one security guard per floors?

A: Yes sir.

Q: Would you agree with me that even if the hotel is half-filled, there is no need to increase the
guards because there were only few customers?

A: I think so.

Q: So you will agree with me that each floor should be maintained by one security guard if the rooms
are filled up or occupied?
A: Yes sir.

Q: Now, you even testified that from January 1999 to November 1999 thereof, only minor incidents
were involved?

A: Yes sir.

Q: So it would be correct to say that the security at that time in February was adequate?

A: I believe so.

Q: Even up to November when the incident happened for that same reason, security was adequate?

A: Yes, before the incident.

Q: Now, you testified on direct that the hotel posted one guard each floor?

A: Yes sir.

Q: And it was your own recommendation?

A: Yes, because we are expecting that the hotel will be filled up.

Q: In fact, the hotel was fully booked?

A: Yes sir.42

Petitioner would thereby have the Court believe that Col. De Guzman’s initial recommendation had
been rebuffed due to the hotel being only half-booked; that there had been no urgency to adopt a
one-guard-per-floor policy because security had been adequate at that time; and that he actually
meant by his statement that "the hotel was not doing well" that the hotel was only half-booked.

We are not convinced.

The hotel business is imbued with public interest. Catering to the public, hotelkeepers are bound to
provide not only lodging for their guests but also security to the persons and belongings of their
guests. The twin duty constitutes the essence of the business.43 Applying by analogy Article
2000,44 Article 200145 and Article 200246 of the Civil Code (all of which concerned the hotelkeepers’
degree of care and responsibility as to the personal effects of their guests), we hold that there is
much greater reason to apply the same if not greater degree of care and responsibility when the
lives and personal safety of their guests are involved. Otherwise, the hotelkeepers would simply
stand idly by as strangers have unrestricted access to all the hotel rooms on the pretense of being
visitors of the guests, without being held liable should anything untoward befall the unwary guests.
That would be absurd, something that no good law would ever envision.

In fine, the Court sees no reversible-error on the part of the CA.

WHEREFORE, the Court AFFIRMS the judgment of the Court of Appeals; and ORDERS petitioner
to pay the costs of suit.
SO ORDERED.

ase Digest: Magsaysay Maritime Corp. v. Oscar

D. Chin, Jr.
G.R. No. 199022 : April 7, 2014

MAGSAYSAY MARITIME CORPORATION, Petitioner, v. OSCAR D. CHIN, JR., Respondent.

ABAD, J.:

FACTS:

Thome Ship Management Pte. Ltd., acting through its agent petitioner Magsaysay Maritime Corporation
(Magsaysay) hired respondent Oscar D. Chin, Jr. to work for nine months as able seaman on board MV
Star Siranger. Chin was to receive a basic pay of US$515 per month. Magsaysay deployed him on July
20, 1996.

On October 22, 1996 Chin sustained injuries while working on his job aboard the vessel. Dr. Solan of
Wilmington, North Carolina, USA, examined him on November 29, 1996 and found him to have suffered
from lumbosacral strain due to heavy lifting of pressurized machine. The doctor gave him medications
and advised him to see an orthopedist and a cardiologist. Chin was repatriated on November 30, 1996.

On return to the Philippines, Chin underwent a surgical procedure called laminectomy and discectomy L-
4-L-5. A year after the operation, Dr. Robert D. Lim of the Metropolitan Hospital diagnosed Chin to have a
moderate rigidity of his tract.

On August 6, 1998 Chin filed a claim for disability with Pandiman Phils., Inc. which is the local agent of P
& I Club of which Magsaysay Maritime is a member. Pandiman offered US$30,000.00 as disability
compensation which Chin accepted on August 6, 1998. He then executed a Release and Quitclaim in
favor of Magsaysay Maritime.

On September 29, 1998 Chin filed a complaint with the National Labor Relations Commission (NLRC),
claiming underpayment of disability benefits and attorneys fees. He later amended his complaint to
include claims for damages.

The Labor Arbiter dismissed Chins complaint for lack of merit. The NLRC affirmed the dismissal on May
17, 2001. On appeal, however, the Court of Appeals (CA) reversed the dismissal and ruled that Chin was
entitled to permanent total disability benefit of US$60,000.00. The CA remanded the case to the Labor
Arbiter for determination of the other monetary claims of Chin. This prompted petitioner Magsaysay to
come before this court on a petition for review on certiorari. The Court denied the petition, however, in a
Resolution dated September 8, 2003. This Resolution became final and executory on February 23, 2004.

Petitioner Magsaysay paid the deficiency award of US$30,000.00 in full and final settlement of Chins
disability compensation claim. On February 26, 2007, however, the Labor Arbiter rendered a Decision
ordering it to pay Chin: a) P19,279.75 as reimbursement for medical expenses; b) US$147,026.43 as loss
of future wages; c) P200,000.00 as moral damages; d) P75,000.00 as exemplary damages; and e) 10%
of the total award as attorneys fees.

The NLRC modified the Labor Arbiters Decision by deleting the awards of loss of future wages and moral
and exemplary damages for lack of factual and legal bases. On appeal, the CA reversed the NLRCs
Decision and ordered the reinstatement of the Labor Arbiters Decision, hence, this petition.

ISSUE: Whether or not the CA erred in affirming the Labor Arbiters award of loss of future earnings on
top of his disability benefits as well as awards of moral and exemplary damages and attorneys fees.

HELD:

Definitely, the Labor Arbiter's award of loss of earning is unwarranted since Chin had already
been given disability compensation for loss of earning capacity. An additional award for loss of
earnings will result in double recovery.

LABOR LAW: permanent total disability; loss of earning capacity

In a catena of cases, the Court has consistently ruled that disability should not be understood more on its
medical significance but on the loss of earning capacity. Permanent total disability means disablement of
an employee to earn wages in the same kind of work, or work of similar nature that he was trained for or
accustomed to perform, or any kind of work which a person of his mentality and attainment could do.
Disability, therefore, is not synonymous with sickness or illness. What is compensated is ones incapacity
to work resulting in the impairment of his earning capacity.

Moreover, the award for loss of earning lacks basis since the Philippine Overseas Employment Agency
(POEA) Standard Contract of Employment (POEA SCE), the governing law between the parties, does not
provide for such a grant. What Section 20, paragraph (G) of the POEA SCE provides is that payment for
injury, illness, incapacity, disability, or death of the seafarer covers all claims arising from or in relation
with or in the course of the seafarers employment, including but not limited to damages arising from the
contract, tort, fault or negligence under the laws of the Philippines or any other country. The permanent
disability compensation of US$60,000 clearly amounts to reasonable compensation for the injuries and
loss of earning capacity of the seafarer.

In awarding damages for loss of earning capacity, the Labor Arbiter relies on the rulings in Villa Rey
Transit v. Court of Appeals and Baliwag Transit, Inc. v. Court of Appeals. But these cases involve
essentially claims for damages arising from quasi-delict. The present case, on the other hand, involves a
claim for disability benefits under Chins contract of employment and the governing POEA set standards of
recovery. The long-standing rule is that loss of earning is recoverable if the action is based on the quasi-
delict provision of Article 2206 of the Civil Code.

CIVIL LAW: moral damages

While the Labor Arbiter can grant moral and exemplary damages, the amounts he fixed in this case are
quite excessive in the absence of evidence to prove the degree of moral suffering or injury that Chin
suffered. It has been held that in order to arrive at a judicious approximation of emotional or moral injury,
competent and substantial proof of the suffering experienced must be laid before the court. It is worthy to
stress that moral damages are awarded as compensation for actual injury suffered and not as a penalty.
The Court believes that an award of P30,000.00 as moral damages is commensurate to the anxiety and
inconvenience that Chin suffered.

CIVIL LAW: exemplary damages

As for exemplary damages, the award of P25,000.00 is already sufficient to discourage petitioner
Magsaysay from entering into iniquitous agreements with its employees that violate their right to collect
the amounts to which they are entitled under the law. Exemplary damages are imposed not to enrich one
party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially
deleterious actions.

WHEREFORE, the Court PARTIALLY GRANTS the petition and AFFIRMS the February 28, 2011
Decision of the Court of Appeals and it's October 11, 2011 Resolution with MODIFICATION
 THIRD DIVISION

G.R. No. 199022, April 07, 2014

MAGSAYSAY MARITIME CORPORATION, Petitioner, v. OSCAR D. CHIN, JR., Respondent.

DECISION

ABAD, J.:

The Facts and the Case

Thome Ship Management Pte. Ltd., acting through its agent petitioner Magsaysay Maritime Corporation
(Magsaysay) hired respondent Oscar D. Chin, Jr. to work for nine months as able seaman on board MV Star
Siranger.1 Chin was to receive a basic pay of US$515 per month.2 Magsaysay deployed him on July 20,
1996.

On October 22, 1996 Chin sustained injuries while working on his job aboard the vessel. Dr. Solan of
Wilmington, North Carolina, USA, examined him on November 29, 1996 and found him to have suffered
from lumbosacral strain due to heavy lifting of pressurized machine. The doctor gave him medications and
advised him to see an orthopedist and a cardiologist. Chin was repatriated on November 30, 1996.

On return to the Philippines, Chin underwent a surgical procedure called laminectomy and discectomy L–4–
L–5. A year after the operation, Dr. Robert D. Lim of the Metropolitan Hospital diagnosed Chin to have a
moderate rigidity of his tract.

On August 6, 1998 Chin filed a claim for disability with Pandiman Phils., Inc. which is the local agent of P & I
Club of which Magsaysay Maritime is a member. Pandiman offered US$30,000.00 as disability compensation
which Chin accepted on August 6, 1998. He then executed a Release and Quitclaim in favor of Magsaysay
Maritime.

On September 29, 1998 Chin filed a complaint with the National Labor Relations Commission (NLRC),
claiming underpayment of disability benefits and attorney’s fees. He later amended his complaint to include
claims for damages.

The Labor Arbiter dismissed Chin’s complaint for lack of merit. The NLRC affirmed the dismissal on May 17,
2001. On appeal, however, the Court of Appeals (CA) reversed the dismissal and ruled that Chin was
entitled to permanent total disability benefit of US$60,000.00. The CA remanded the case to the Labor
Arbiter for determination of the other monetary claims of Chin. This prompted petitioner Magsaysay to
come before this court on a petition for review on certiorari. The Court denied the petition, however, in a
Resolution dated September 8, 2003. This Resolution became final and executory on February 23, 2004.

On September 28, 2004 petitioner Magsaysay paid the deficiency award of US$30,000.00 in full and final
settlement of Chin’s disability compensation claim. On February 26, 2007, however, the Labor Arbiter
rendered a Decision ordering it to pay Chin: a) P19,279.75 as reimbursement for medical expenses; b)
US$147,026.43 as loss of future wages; c) P200,000.00 as moral damages; d) P75,000.00 as exemplary
damages; and e) 10% of the total award as attorney’s fees.

On November 25, 2008 the NLRC modified the Labor Arbiter’s Decision by deleting the awards of loss of
future wages and moral and exemplary damages for lack of factual and legal bases. On appeal, the CA
reversed the NLRC’s Decision and ordered the reinstatement of the Labor Arbiter’s Decision, hence, this
petition.

The Issue Presented

The key issue in this case is whether or not the CA erred in affirming the Labor Arbiter’s award of loss of
future earnings on top of his disability benefits as well as awards of moral and exemplary damages and
attorney’s fees.

Ruling of the Court

Respondent Chin contends that the petition should be dismissed on the ground of res judicata in that the
CA’s Decision in CA–G.R. SP 67803 authorized the determination of Chin’s other monetary claims. The
additional award to him of actual, compensatory, moral and exemplary damages as well as attorney’s fees
was a determination of those other claims. These awards, he claims, can no longer be disturbed.

But res judicata applies to second actions involving substantially the same parties, the same subject matter,
and cause or causes of action.3 Here, there is no second action to speak of since the subsequent awards
were merely the result of a remand from the CA for the Labor Arbiter to determine the amounts to which
Chin is entitled to receive aside from the full US$60,000.00 permanent total disability compensation.

Definitely, the Labor Arbiter’s award of loss of earning is unwarranted since Chin had already been given
disability compensation for loss of earning capacity. An additional award for loss of earnings will result in
double recovery. In a catena of cases,4 the Court has consistently ruled that disability should not be
understood more on its medical significance but on the loss of earning capacity. Permanent total disability
means disablement of an employee to earn wages in the same kind of work, or work of similar nature that
he was trained for or accustomed to perform, or any kind of work which a person of his mentality and
attainment could do. Disability, therefore, is not synonymous with “sickness” or “illness.” What is
compensated is one’s incapacity to work resulting in the impairment of his earning capacity.5

Moreover, the award for loss of earning lacks basis since the Philippine Overseas Employment Agency
(POEA) Standard Contract of Employment (POEA SCE), the governing law between the parties, does not
provide for such a grant. What Section 20, paragraph (G) of the POEA SCE provides is that payment for
injury, illness, incapacity, disability, or death of the seafarer covers “all claims arising from or in relation
with or in the course of the seafarer’s employment, including but not limited to damages arising from the
contract, tort, fault or negligence under the laws of the Philippines or any other country.” The permanent
disability compensation of US$60,000 clearly amounts to reasonable compensation for the injuries and loss
of earning capacity of the seafarer.

In awarding damages for loss of earning capacity, the Labor Arbiter relies on the rulings in Villa Rey Transit
v. Court of Appeals6 and Baliwag Transit, Inc. v. Court of Appeals.7 But these cases involve essentially
claims for damages arising from quasi–delict. The present case, on the other hand, involves a claim for
disability benefits under Chin’s contract of employment and the governing POEA set standards of
recovery. The long–standing rule is that loss of earning is recoverable if the action is based on the quasi–
delict provision of Article 2206 of the Civil Code.8

While the Labor Arbiter can grant moral and exemplary damages, the amounts he fixed in this case are quite
excessive in the absence of evidence to prove the degree of moral suffering or injury that Chin suffered. It
has been held that in order to arrive at a judicious approximation of emotional or moral injury, competent
and substantial proof of the suffering experienced must be laid before the court.9 It is worthy to stress that
moral damages are awarded as compensation for actual injury suffered and not as a penalty. The Court
believes that an award of P30,000.00 as moral damages is commensurate to the anxiety and inconvenience
that Chin suffered.

As for exemplary damages, the award of P25,000.00 is already sufficient to discourage petitioner Magsaysay
from entering into iniquitous agreements with its employees that violate their right to collect the amounts to
which they are entitled under the law. Exemplary damages are imposed not to enrich one party or
impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious
actions.10

WHEREFORE, the Court PARTIALLY GRANTS the petition and AFFIRMS the February 28, 2011 Decision
of the Court of Appeals and its October 11, 2011 Resolution with MODIFICATION. The award of loss of
earning is DELETED and petitioner Magsaysay Maritime Corporation is ORDERED to pay respondent Oscar
D. Chin, Jr. P19,279.95 as reimbursement for medical expenses, P30,000.00 as moral damages, P25,000.00
as exemplary damages, and attorney’s fees equivalent to 10% of the total of these amounts.

SO ORDERED.
SERENO, C.J.:
For resolution by this Court is a consolidated case involving Jessie M.
Doroteo, now deceased and represented by his sister, and his employer
Philimare, Incorporated, a dispute springing from Doroteo's claims for
disability and other monetary claims against Philimare.[1] G.R. No. 184917
is a petition filed by Doroteo contesting the Decision and Resolution of the
Court of Appeals (CA) dated 4 April 2008 and 9 October 2008 respectively,
that partially granted damages to Doroteo in the amount of P300,000 but
denied all other claims against Philimare.[2] G.R. No. 184932 is a petition
filed by Philimare against the same Decision and Resolution, contesting the
award of damages to Doroteo. The CA Decision and Resolution had partly
granted Doroteo's petition against the Resolutions of the National Labor
Relations Commission (NLRC) dated 28 February 2007[3] and 31 May
2007,[4] by awarding Doroteo damages in the amount of P300,000.00,[5]but
affirming the rulings of the NLRC and Labor Arbiter.[6]
The facts of this case present a consensus of facts by both parties in respect
of the most essential incidents.
Philimare is a local manning agency that hired Doroteo as an engineer on
behalf of Fil-Cargo Shipping Corporation.[7] The contract of employment
was executed on 13 February 2004 for a period of 3 months. Doroteo was
assigned to the vessel M/V Tungenes on 24 February 2004.[8]
As the vessel passed through the coast of Spain between 25 March 2004 to
30 March 2004, petitioner claimed that he felt the engine room's
temperature rising, and he drank cold water to cool himself.[9] On 30 March
2004 in Haiti, Doroteo felt pain in his throat and took antibiotics for five
days on his own initiative to ease the pain.[10] Upon arrival at the Caribbean,
he allegedly requested for a medical check-up at the hospital but was
refused by the ship master.[11]
On 4 April 2004, he forced the ship master to allow him a medical check-up
due to worsening pain and experiencing difficulty swallowing and
breathing.[12] On 26 April 2004 he claimed to have been brought to a
government hospital in Las Palmas in Europe, where he was only given
antibiotics and a pain reliever since there were no specialists to attend to
his needs.[13]
The vessel arrived in Denmark on 2 May 2004 and he again requested for a
medical check-up.[14] A biopsy was conducted due to the presence of lymph
nodes in his voice box.[15] On 3 May 2004, his condition deteriorated and a
request for medicine with the ship master was denied due to a lack of
antibiotics.[16] On 5 May 2004, Doroteo was subject to medical repatriation
on order of Philimare and he arrived in the Philippines on 16 June 2004.[17]
Doroteo was examined by Philimare's physician, Dr. Emmanuel Cruz of
Supercare Medical Services, Inc., on 23 June 2004, and was advised to
undergo direct laryngoscopy and biopsy with possible tracheotomy due to
possible laryngeal cancer, but did not come back to the company
physician.[18]
Subsequently, Doroteo filed a Complaint on 3 November 2004 before the
NLRC for non-payment of sick leave pay and disability/medical benefits.[19]
In his Position Paper dated 23 May 2005, Doroteo claimed that the
company-designated physician refused to accord him the proper
medication if he would not pay the amount of P200,000.[20] Thus, he
shouldered the cost of his major surgery which consisted of a total
laryngectomy and pectoralis major myocutaneous flap on 4 October
2004.[21] On 7 October 2004, he underwent tomography at St. Luke's
Medical Center which showed that he had "laryngeal mass probably
malignant."[22] St. Luke's issued a medical certificate finding him physically
unfit for work.[23]
Philimare contested the claim, asserting that Dorotea's illness is not a
compensable occupational disease because cancer of the larynx or voice box
was primarily cause by excessive and repeated exposure to tobacco, either
smoked or chewed, as well as alcohol consumption.[24] Hence, Philimare
contended that the illness was not work-related and that the disease was
present even before Dorotea's employment.[25] Moreover, Philimare decried
Dorotea's failure to disclose his condition as a violation of his contract and
equivalent to fraudulent misrepresentation.[26]
Before the resolution of the dispute, Doroteo died of cancer on 29 May
2005, and was substituted by his sister, Lucida Heramis.[27]
The Labor Arbiter decided on 7 September 2005 that Dorotea's cancer was
not work-related and was a pre-existing illness.[28] It cited the fact that he
was in the employ of Philimare for less than three months before he fell
ill.[29] Based on the evidence presented by Philimare, the Labor Arbiter
concluded that the cancer was acquired prior to Dorotea's
employment.[30] Agreeing completely with Philimare, the Labor Arbiter
likewise ruled that Doroteo violated his contract when he knowingly
concealed his past medical condition, disability, and history of cancer.[31] In
addition, the Labor Arbiter did not believe Dorotea's claim that the vessel
he worked in was unseaworthy and that the engine room had no air
exhaust, relying completely on the arguments and evidence presented by
Philimare.[32] Finally, the Labor Arbiter rejected Dorotea's claims that he
was not given immediate medical attention and cited the medical report of
the doctor in Denmark and the medical certificate of Dr. Cruz who was the
company-designated physician.[33] As a result, the Labor Arbiter dismissed
the claim.[34]
The NLRC upheld the Labor Arbiter upon appeal and motion for
reconsideration, essentially reiterating the decision of the Labor Arbiter on
the same grounds.[35]
Dorotea's sister appealed to the CA, which ruled that the NLRC did not
commit grave abuse of discretion when it decided that Dorotea's disease
was not work-related and therefore non-compensable.[36] The appellate
court noted that Dorotea's history as a heavy smoker and drinker was
established by the record, and that the medical reports presented alongside
the very short time of employment demonstrably proved that the cause of
the disease was Dorotea's smoking habit and alcohol intake.[37] The CA
however noted that the claims made by Philimare as to bad faith, fraud, and
concealment of a disease on the part of Doroteo was inconsistent with the
situation, since Doroteo was not a medical practitioner and could not be
expected to know what ailed him.[38]
However, the CA found grave abuse of discretion on the part of the NLRC
when it dismissed Dorotea's claim for damages based on the allegation that
he was not given proper medical attention.[39]
For the court, it was clear that there were several instances when Doroteo
was refused medical attention by the ship master, and when finally allowed
to be examined, was not given a thorough examination but merely provided
pain-relief medication.[40] In fact, Philimare was unable to provide evidence
that it immediately addressed Doroteo's health concerns, or any
explanation for the delay.[41] To this the court ascribed bad faith on the part
of Philimare because of the continued refusal by the ship master to provide
all the necessary assistance to a sick person in its employ, in violation of
article 161 of the Labor Code.[42]
Hence, for not providing immediate medical attention to Doroteo, the CA
partly granted the petition and found Philimare liable for damages in the
amount of P300,000.00.[43] It is this Decision and its subsequent
affirmation that is being contested by both Dorotea's sister and Philimare
before this Court.
In the petition of Doroteo's sister, she argues that the CA erred when it
ruled that the cancer of Doroteo was not work-related. Specifically, she
argues that the fact that Doroteo was declared fit to work by the company-
designated physician contradicted the ruling that the disease was pre-
existing.[44] Citing this Court's jurisprudence, she argues that every
workman brings with him certain infirmities in health, and that the
employer – while not the insurer of the employee's health – assumes the
risk of having an employee with a weakened condition aggravate his injury
during employment that would not have bothered a perfectly normal,
healthy person.[45]
Moreover given the uncertainty as to the cause of cancer even by the
standards of medical science, it would be unfair for the courts to require
that an employee prove that the disease was caused by or aggravated by the
conditions of employment.[46] She also cites United States jurisprudence to
the effect that throat cancer is compensable for a fire-fighter who is exposed
to heavy smoke, gases, and fumes,[47]and further argues that occupational
or industrial diseases could be procured even within a short time.[48]
Finally, Doroteo's sister argues that assuming the cancer was pre-existing,
the requirement of the law for compensability is that the disease was
aggravated by working conditions such that its presence was work
related.[49] In support of this, she cited the American doctrine of "last
injurious exposure," which allegedly assigns liability to the last employer
whose conditions last contributed to the totality of the disease.[50] She also
disputed the statements of the CA and NLRC that alluded to Dorotea's
smoking habit as the cause of his cancer, stating that there are several risk
factors involved and that creating that presumption violated the
constitutional mandate to protect labor.[51]
In response, Philimare reiterates its arguments before the CA that throat
cancer is not listed in the occupational diseases clause in the Philippine
Overseas Employment Administration standard contract,[52] that the
additional conditions for diseases not listed to be compensable were not
satisfied,[53] and that there was no reasonable proof that the work of
Doroteo increased his risk of contracting throat cancer.[54]
In sum, the case will live or die upon one question: did the work of Doroteo
for Philimare result in or aggravate the throat cancer of which he died?
It appears that both parties are well aware of this crucial issue, and have
presented their own evidence in support of their conclusions:
Doroteo's evidence explicitly states that working in an engine room exposes
the worker to harmful conditions, including but not limited to chemical
exposure and heat. Apart from this is the allegation that the engine room
had poor exhaust which increased the heat therein, and most importantly
the constant refusal of Philimare's ship master to allow Doroteo medical
attention.
Philimare's evidence is broader and lists the risk factors for throat cancer:
genetics, age, tobacco use, and alcohol consumption. It also relies on the
diagnosis of the physician in Denmark that the cancer most likely existed
for more than 3 months prior to the time of the check-up, such that it was a
pre-existing illness. Contending with Doroteo's claims about the engine
room, it presented a ship assessment that listed the engine room as
compliant with safety standards.
To be sure, this Court has held that a worker brings with him possible
infirmities in the course of his employment, and while the employer does
not insure the health of the employees, he takes the employee as found and
assumes the risk of liability.[55] However, claimants in compensation
proceedings must show credible information that there is probably a
relation between the illness and the work.[56] They cannot rely on the fact
that the employer's designated physician had declared the employee fit
pursuant to the pre-employment medical examination (PEME), since the
PEME cannot be a conclusive proof that the seafarer was free from any
ailment and specifically for cancer - prior to his deployment.[57]
The PEME is not exploratory in nature. It is not intended to be a totally in-
depth and thorough examination of an applicant's medical condition. It
merely determines whether one is "fit to work" at sea or "fit for sea service";
it does not state the real state of health of an applicant. Thus, we held
in NYK-FIL Ship Management, Inc. v. NLRC as follows:
While a PEME may reveal enough for the petitioner (vessel) to decide
whether a seafarer is fit for overseas employment, it may not be relied upon
to inform petitioners of a seafarer's true state of health. The PEME could
not have divulged respondent's illness considering that the examinations
were not exploratory.[58]
Cancer is an especially difficult illness to predict. Despite increased
knowledge on risk factors, its causality is not determinable with any degree
of certainty:
In Raro v. Employees' Compensation Commission, we stated that medical
science cannot, as yet, positively identify the causes of various types of
cancer. It is a disease that strikes people in general. The nature of a person's
employment appears to have no relevance. Cancer can strike a lowly paid
laborer, or a highly paid executive, or one who works on land, in water, or
in the bowels of the earth. It makes no difference whether the victim is
employed or unemployed, a white collar employee or a blue collar worker, a
housekeeper, an urban dweller or the resident of a rural area.
By way of exception, certain cancers have reasonably been traced to or
considered as strongly induced by specific causes. For example, heavy
doses of radiation (as in Chernobyl, USSR), cigarette smoke over
a long period for lung cancer, certain chemicals for specific
cancers, and asbestos dust, among others, are generally accepted
as increasing the risks of contracting specific cancers. In the
absence of such clear and established empirical evidence, the law requires
proof of causation or aggravation.[59] (Emphasis supplied)
As the aforementioned case states, there is strong evidence linking specific
circumstances with specific cancers. In this case, however, there seems to
be a no clarity. To recall, the cancer Doroteo succumbed to was throat or
laryngeal cancer and not lung cancer, which is the cancer more commonly
associated with heavy cigarette use. In the same vein, there was no
definitive proof presented that the engine room of the M/V Tungenes had
unreasonable amounts of carcinogenic chemicals, nor the presence of
asbestos dust without proper safety equipment apart from the allegations
made by Doroteo in the pleadings. In other words, the evidence of both
sides lack the substance required to establish their respective claims.
In Sealanes Marine Services, Inc. v. National Labor Relations
Commission, we noted that under the 1996 POEA standard contract, proof
that the working conditions increased the risk of a disease is not required
for a seaman to claim the benefits under his employment contract for the
illness acquired by seamen during the course of their
employment.[60] Subsequently, the 2000 POEA standard contract was
created which specifically required work-relation as a condition for
compensation:
Under Sec. 20(b), paragraph 6, of the 2000 POEA Amended Standard
Terms and Conditions Governing the Employment of Filipino Seafarers on
Board Ocean-Going Vessels, viz.:
SEC. 20. Compensation and Benefits.—
xxxx
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related
injury or illness during the term of his contractare as follows:
xxxx
6. In case of permanent total or partial disability of the seafarer caused by
either injury or illness the seafarer shall be compensated in accordance with
the schedule of benefits enumerated in Section 32 of this Contract.
Computation of his benefits arising from an illness or disease shall be
governed by the rates and the rules of compensation applicable at the time
the illness or disease was contracted.
Evident from the afore-quoted provision is that the permanent total or
partial disability suffered by a seafarer during the term of his contract must
be caused by work-related illness or injury. In other words, to be entitled to
compensation and benefits under said provision, it is not sufficient to
establish that the seafarer's illness or injury has rendered him permanently
or partially disabled, but it must also be shown that there is a causal
connection between the seafarer's illness or injury and the work
for which he had been contracted for.[61] (Emphases supplied)
This is consistent with the logic behind the court's interpretation of the
1996 POEA standard contract, hence several decisions denying
compensability due to the illness proving to be pre-existing.[62] The
prevailing rule under the 1996 POEA-SEC was that the illness leading to the
eventual death of seafarer need not be shown to be work-related in order to
be compensable, but must be proven to have been contracted during the
term of the contract and not pre-existing.[63] The evolution of this rule for
the 2000 POEA-SEC is that the illness is further required to be work-
related, work- caused, or work-aggravated.[64]
Therefore the evidence presents more questions than answers as to what
caused Dorotea's throat cancer. Doroteo claims that the engine room was
akin to a "gas chamber"[65] but did not give proof other than a generalized
opinion about the risks present in engine rooms.[66]Philimare claims that
the ship was given safety and health clearances, but submitted a certificate
well past the date of Doroteo's employment.[67] Doroteo claims that he was
exposed to noxious chemicals, but fails to substantiate this
claim.[68] Philimare claims that Doroteo was a heavy tobacco and alcohol
user, but fails to link its evidence to the specific cancer involved.[69] Doroteo
presents opinions that allege the possibility of short-term acquisition of
cancer.[70] Philimare presents a physician's diagnosis that the cancer
seemed to have already existed more than 3 months prior to the
examination.[71]
What these arguments show is that there is no clear nexus between the
disease Doroteo acquired and the working conditions he encountered.
Therefore, the disputable presumption of work-relation cannot be applied,
since based on the evidence presented the Court cannot reasonably
conclude that his work as an engineer in the engine room led to Dorotea's
throat cancer.
We are not experts in the field of medicine and disease and have stated as
much previously in Jebsen Maritime, Inc. v. Ravena, as follows:
As a final word and a cautionary clarification, we do not here rule with
absolute precision on the non-causing, non-aggravating, or non-
contributing effect that any or all substances/chemicals and a processed-
and-red-meat-rich diet may have on ampullary cancer. We are not experts
on the matter and we recognize the considerable degree of uncertainty
inherent in the field of medicine and its study. Our ruling on this petition
should, therefore, be understood strictly in the light of and limited to the
surrounding circumstances of this case.
Stated differently, we declare that Ravena's ampullary cancer is not work-
related, and therefore not compensable, because he failed to prove, by
substantial evidence, its work-relatedness and his compliance with the
parameters that the law had precisely set out in disability benefits claim.
For, while we adhere to the principle of liberality in favour of the seafarer in
construing the POEA-SEC, we cannot allow claims for disability
compensation based on surmises. Liberal construction is never a license to
disregard the evidence on record and to misapply the law.[72]
In as much as we condole with the family of Doroteo, the CA correctly
denied his claims that his throat cancer was work-related or work
aggravated, and thus compensable.
However, the CA is equally correct in finding gross negligence on the part of
Philimare.
Philimare failed to rebut the allegation made by Doroteo that on several
instances, he was refused medical attention by the ship master.[73] In
contention thereto, Philimare makes a simple assertion that it had allowed
him a medical check-up in Denmark, and repatriated him to the Philippines
to be checked by its physician, but did not specifically deny the accusation
that the ship master had refused him treatment.[74] In fact, Philimare also
failed to rebut Dorotea's claim that the physician asked him for
P200,000.00 prior to rendering treatment.[75] The disregard shown by
Philimare to Doroteo was uncontroverted. Understandably upset, he
instead went to a different physician in St. Luke's Medical Center and
underwent treatment there, which ultimately failed to save him from the
ravages of cancer.[76]In sum, Philimare did not extend any help to its dying
seaman both in the immediate time of need while he was still under its
employ, and in the throes of his final moments. This is a clear case of gross
negligence, tantamount to bad faith.
On this basis, the CA awarded moral damages to Doroteo. From the
appellate court's appreciation of the established facts, Philimare clearly
violated the provisions of the Labor Code, as well as the civil code
provisions on the exercise of rights in good faith with proper legal
reasoning.[77]
To this we strongly agree. Neglecting employee's immediate medical
requirements has a legal consequence.[78] Hence the award of moral
damages, as in the following case:
We affirm the appellate court's finding that petitioners are guilty of
negligence in failing to provide immediate medical attention to private
respondent. It has been sufficiently established that, while the M/V T.A.
VOYAGER was docked at the port of New Zealand, private respondent was
taken ill, causing him to lose his memory and rendering him incapable of
performing his work as radio officer of the vessel. The crew immediately
notified the master of the vessel of private respondent's worsening
condition. However, instead of disembarking private respondent so that he
may receive immediate medical attention at a hospital in New Zealand or at
a nearby port, the master of the vessel proceeded with the voyage, in total
disregard of the urgency of private respondent's condition. Private
respondent was kept on board without any medical attention whatsoever
for the entire duration of the trip from New Zealand to the Philippines, a
voyage of ten days. To make matters worse, when the vessel finally arrived
in Manila, petitioners failed to directly disembark private respondent for
immediate hospitalization. Private respondent was made to suffer a wait of
several more hours until a vacant slot was available at the pier for the vessel
to dock. It was only upon the insistence of private respondent's relatives
that petitioners were compelled to disembark private respondent and
finally commit him to a hospital. There is no doubt that the failure of
petitioners to provide private respondent with the necessary medical care
caused the rapid deterioration and inevitable worsening of the latter's
condition, which eventually resulted in his sustaining a permanent
disability.[79]
Moreover, exemplary damages are also proper.[80] In the same case, we
awarded exemplary damages to the employee whose treatment was delayed
by the ship captain without a valid ground:
Meanwhile, exemplary damages are imposed by way of example or
correction for the public good, pursuant to Article 2229 of the Civil Code.
They are imposed not to enrich one party or impoverish another but to
serve as a deterrent against or as a negative incentive to curb socially
deleterious actions. While exemplary damages cannot be recovered as a
matter of right, they need not be proved, although plaintiff must show that
he is entitled to moral, temperate, or compensatory damages before the
court may consider the question of whether or not exemplary damages
should be awarded. In quasi-delicts, exemplary damages may be granted if
the defendant acted with gross negligence.[81]
Thus, apart from the CA's grant of moral damages in the amount of
P300,000.00, we deem it apt to award exemplary damages in the amount
of P100,000.00. In furtherance thereof, we also grant attorney's fees valued
at 10% of the total monetary award in favor of Doroteo's heirs.[82]
WHEREFORE, the petition in G.R. No. 184932 is DENIED. The petition
in G.R. No. 184917 is PARTLY GRANTED. Respondents Philimare, Inc.,
Bonifacio F. Gomez, and Fil Cargo Shipping Corp. are
declared LIABLE for MORAL DAMAGES in the amount of THREE
HUNDRED THOUSAND PESOS (P300,000.00), EXEMPLARY
DAMAGES in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00), and 10% of the total monetary award in ATTORNEY'S
FEES, and DIRECTED to pay the heirs of petitioner Jessie M. Doroteo
the total amount immediately.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 160110 June 18, 2014

MARIANO C. MENDOZA and ELVIRA LIM, Petitioners,

vs.
SPOUSES LEONORA J. GOMEZ and GABRIEL V. GOMEZ, Respondents.

DECISION

PEREZ, J.:

Assailed in the present appeal by certiorari is the Decision1 dated 29 September 2003 of the Special
Fourth Division of the Court of Appeals (CA) in CA-G.R. CV No. 71877, which affirmed with
modification the Decision2 dated 31 January 2001 of the Regional Trial Court (RTC), Branch 172,
Valenzuela City in Civil Case No. 5352-V-97, and which effectively allowed the award of actual,
moral, and exemplary damages, as well as attorney's fees and costs of the suit in favor of
respondent Spouses Leonora and Gabriel Gomez (respondents).

Antecedent Facts

On 7 March 1997, an Isuzu Elf truck (Isuzu truck) with plate number UAW 582,3 owned by
respondent Leonora J. Gomez (Leonora)4 and driven by Antenojenes Perez (Perez),5 was hit by a
Mayamy Transportation bus (Mayamy bus) with temporary plate number 1376-1280,6 registered
under the name of petitioner Elvira Lim (Lim)7 and driven by petitioner Mariano C. Mendoza
(Mendoza).8

Owing to the incident, an Information for reckless imprudence resulting in damage to property and
multiple physical injuries was filed against Mendoza.9 Mendoza, however, eluded arrest, thus,
respondents filed a separate complaint for damages against Mendoza and Lim, seeking actual
damages, compensation for lost income, moral damages, exemplary damages, attorney’s fees and
costs of the suit.10 This was docketed as Civil Case No. 5352-V-97.

According to PO1 Melchor F. Rosales (PO1 Rosales), investigating officer of the case, at around
5:30 a.m., the Isuzu truck, coming from Katipunan Road and heading towards E. Rodriguez, Sr.
Avenue, was travelling along the downward portion of Boni Serrano Avenue when, upon reaching
the corner of Riviera Street, fronting St. Ignatius Village, its left front portion was hit by the Mayamy
bus.11 According to PO1 Rosales, the Mayamy bus, while traversing the opposite lane, intruded on
the lane occupied by the Isuzu truck.12

PO1 Rosales also reported that Mendoza tried to escape by speeding away, but he was
apprehended in Katipunan Road corner C. P. Garcia Avenue by one Traffic Enforcer Galante and a
security guard of St. Ignatius Village.13

As a result of the incident, Perez,as well as the helpers on board the Isuzu truck, namely Melchor V.
Anla (Anla), Romeo J. Banca (Banca), and Jimmy Repisada (Repisada), sustained injuries
necessitating medical treatment amounting to ₱11,267.35,which amount was shouldered by
respondents. Moreover, the Isuzu truck sustained extensive damages on its cowl, chassis, lights and
steering wheel, amounting to ₱142,757.40.14

Additionally, respondents averred that the mishap deprived them of a daily income of ₱1,000.00.
Engaged in the business of buying plastic scraps and delivering them to recycling plants,
respondents claimed that the Isuzu truck was vital in the furtherance of their business.

For their part, petitioners capitalized on the issue of ownership of the bus in question. Respondents
argued that although the registered owner was Lim, the actual owner of the bus was SPO1 Cirilo
Enriquez (Enriquez), who had the bus attached with Mayamy Transportation Company (Mayamy
Transport) under the so-called "kabit system." Respondents then impleaded both Lim and Enriquez.

Petitioners, on the other hand, presented Teresita Gutierrez (Gutierrez), whose testimony was
offered to prove that Mayamy Bus or Mayamy Transport is a business name registered under her
name, and that such business is a sole proprietorship. Such was presented by petitioners to rebut
the allegation of respondents that Mayamy Transport is a corporation;15 and to show, moreover, that
although Gutierrez is the sole proprietor of Mayamy Transport, she was not impleaded by
respondents in the case at bar.16

After weighing the evidence, the RTC found Mendoza liable for direct personal negligence under
Article 2176 of the Civil Code, and it also found Lim vicariously liable under Article 2180 of the same
Code.

As regards Lim, the RTC relied on the Certificate of Registration issued by the Land Transportation
Office on 9 December 199617 in concluding that she is the registered owner of the bus in question.
Although actually owned by Enriquez, following the established principle in transportation law, Lim,
as the registered owner, is the one who can be held liable.

Thus, the RTC disposed of the case as follows:

WHEREFORE, judgment is hereby rendered in favor of the [respondents] and against the
[petitioners]:

1. Ordering the [petitioners] except Enriquez to pay [respondents], jointly and severally, the
costs of repair of the damaged vehicle in the amount of ₱142,757.40;

2. Ordering the defendants except Enriquez to pay [respondents], jointly and severally, the
amount of ₱1,000.00 per day from March 7, 1997 up to November 1997 representing the
unrealized income of the [respondents] when the incident transpired up to the time the
damaged Isuzu truck was repaired;

3. Ordering the [petitioners] except Enriquez to pay [respondents], jointly and severally, the
amount of ₱100,000.00 as moral damages, plus a separate amount of ₱50,000.00 as
exemplary damages;

4. Ordering the [petitioners] except Enriquez to pay [respondents], jointly and severally, the
amount of ₱50,000.00 as attorney’s fees; 5. Ordering the [petitioners] except Enriquez to pay
[respondents] the costs of suit.18
Displeased, petitioners appealed to the CA, which appeal was docketed as CA-G.R. CV No. 71877.
After evaluating the damages awarded by the RTC, such were affirmed by the CA with the exception
of the award of unrealized income which the CA ordered deleted, viz:

WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The judgment of the
Regional Trial Court of Valenzuela City, Branch 172 dated January 31, 2001, is MODIFIED, in that
the award of ₱1,000.00 per day from March 1997 up to November 1997 representing unrealized
income is DELETED. The award of ₱142,757.40 for the cost of repair of the damaged vehicle, the
award of ₱100,000.00 as moral damages, the award of ₱50,000.00 as exemplary damages, the
award of ₱50,000.00 as attorney’s fees and the costs of the suit are hereby MAINTAINED.19

The Present Petition

Unsatisfied with the CA ruling, petitioners filed an appeal by certiorari before the Court, raising the
following issues:20

1. The court a quo has decided questions of substance in a way not in accord with law or
with the applicable decisions of the Supreme Court when it awarded:

a. Moral damages in spite of the fact that the [respondents’] cause of action is clearly
based on quasi-delict and [respondents] did not sustain physical injuries to be
entitled thereto pursuant to Article 2219 (2) of the New Civil Code and pertinent
decisions of the Supreme Court to that effect. The court a quo erroneously concluded
that the driver acted in bad faith and erroneously applied the provision of Article 21 of
the same code to justify the award for bad faith is not consistent with quasi-delict
which is founded on fault or negligence.

b. Exemplary damages in spite of the fact that there is no finding that the vehicular
accident was due to petitioner-driver’s gross negligence to be entitled thereto
pursuant to Article 2231 of the New Civil Code and pertinent decisions of the
Supreme Court to that effect. The factual basis of the court a quo that "the act of the
driver of the bus in attempting to escape after causing the accident in wanton
disregard of the consequences of his negligent act is such gross negligence that
justifies an award of exemplary damages" is an act after the fact which is not within
the contemplation of Article 2231 of the New Civil Code.

c. Attorney’s fees in spite of the fact that the assailed decisions of the trial court and
the court a quo are bereft with jurisdictions for the award of attorney’s fees pursuant
to the pertinent decisions of the Supreme Court on the matter and provision Article
2208 of the New Civil Code. The court a quo erroneously applied the decision of the
Supreme Court in Bañas, Jr. vs. Court of Appeals, 325 SCRA 259.

The Court’s Ruling

The petition is partially meritorious.

Respondents anchor their claim for damages on Mendoza’s negligence, banking on Article 2176 of
the Civil Code, to wit:
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

In impleading Lim, on the other hand, respondents invoke the latter’s vicarious liability as espoused
in Article 2180 of the same Code:

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

xxxx

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

The first question to address, then, is whether or not Mendoza’s negligence was duly proven.
Negligence is defined as the failure to observe for the protection of the interests of another person,
that degree of care, precaution and vigilance which the circumstances justly demand, whereby such
other person suffers injury.21

As found by the RTC, and affirmed by the CA, Mendoza was negligent in driving the subject
Mayamy bus, as demonstrated by the fact that, at the time of the collision, the bus intruded on the
lane intended for the Isuzu truck. Having encroached on the opposite lane, Mendoza was clearly in
violation of traffic laws. Article2185 of the Civil Code provides that 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. In the case at bar, Mendoza’s violation of traffic laws
was the proximate cause of the harm.

Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces the injury, and without which the result would not have
occurred. And more comprehensively, the proximate legal cause is that acting first and producing
the injury, either immediately or by setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection with its immediate predecessor,
the final event in the chain immediately effecting the injury as a natural and probable result of the
cause which first acted, under such circumstances that the person responsible for the first event
should, as an ordinary prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result therefrom.22

The evidence on record shows that before the collision, the Isuzu truck was in its rightful lane, and
was even at a stop, having been flagged down by a security guard of St. Ignatius Village.23 The
mishap occurred when the Mayamy bus, travelling at a fast speed as shown by the impact of the
collision, and going in the opposite direction as that of the Isuzu truck, encroached on the lane
rightfully occupied by said Isuzu truck, and caused the latter to spin, injuring Perez, Anla, Banca, and
Repisada, and considerably damaging the Isuzu truck.

Having settled the fact of Mendoza’s negligence, then, the next question that confronts us is who
may beheld liable. According to Manresa, liability for personal acts and omissions is founded on that
indisputable principle of justice recognized by all legislations that when a person by his act or
omission causes damage or prejudice to another, a juridical relation is created by virtue of which the
injured person acquires a right to be indemnified and the person causing the damage is charged with
the corresponding duty of repairing the damage. The reason for this is found in the obvious truth that
man should subordinate his acts to the precepts of prudence and if he fails to observe them and
causes damage to another, he must repair the damage.24 His negligence having caused the damage,
Mendoza is certainly liable to repair said damage.

Additionally, Mendoza’s employer may also be held liable under the doctrine of vicarious liability or
imputed negligence. Under such doctrine, a person who has not committed the act or omission
which caused damage or injury to another may nevertheless be held civilly liable to the latter either
directly or subsidiarily under certain circumstances.25 In our jurisdiction, vicarious liability or imputed
negligence is embodied in Article 2180 of the Civil Code and the basis for damages in the action
under said article is the direct and primary negligence of the employer in the selection or
supervision, or both, of his employee.26

In the case at bar, who is deemed as Mendoza’s employer? Is it Enriquez, the actual owner of the
bus or Lim, the registered owner of the bus?

In Filcar Transport Services v. Espinas,27 we held that the registered owner is deemed the employer
of the negligent driver, and is thus vicariously liable under Article 2176, in relation to Article 2180, of
the Civil Code. Citing Equitable Leasing Corporation v. Suyom,28 the Court ruled that in so far as third
persons are concerned, the registered owner of the motor vehicle is the employer of the negligent
driver, and the actual employer is considered merely as an agent of such owner. Thus, whether
there is an employer-employee relationship between the registered owner and the driver is irrelevant
in determining the liability of the registered owner who the law holds primarily and directly
responsible for any accident, injury or death caused by the operation of the vehicle in the streets and
highways.29

As early as Erezo v. Jepte,30 the Court, speaking through Justice Alejo Labrador summarized the
justification for holding the registered owner directly liable, to wit:

x x x The main aim of motor vehicle registration is to identify the owner so that if any accident
happens, or that any damage or injury is caused by the vehicles on the public highways,
responsibility therefore can be fixed on a definite individual, the registered owner. Instances are
numerous where vehicle running on public highways caused accidents or injuries to pedestrians or
other vehicles without positive identification of the owner or drivers, or with very scant means of
identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that
the motor vehicle registration is primarily ordained, in the interest of the determination of persons
responsible for damages or injuries caused on public highways.

"‘One of the principal purposes of motor vehicles legislation is identification of the vehicle and of the
operator, in case of accident; and another is that the knowledge that means of detection are always
available may act as a deterrent from lax observance of the law and of the rules of conservative and
safe operation. Whatever purpose there may be in these statutes, it is subordinate at the last to the
primary purpose of rendering it certain that the violator of the law or of the rules of safety shall not
escape because of lack of means to discover him." The purpose of the statute is thwarted, and the
displayed number becomes a "snare and delusion," if courts will entertain such defenses as that put
forward by appellee in this case. No responsible person or corporation could be held liable for the
most outrageous acts of negligence, if they should be allowed to place a "middleman" between them
and the public, and escape liability by the manner in which they recompense their servants.31

Generally, when an injury is caused by the negligence of a servant or employee, there instantly
arises a presumption of law that there was negligence on the part of the master or employer either in
the selection of the servant or employee (culpa in eligiendo) or in the supervision over him after the
selection (culpa vigilando), or both. The presumption is juris tantum and not juris et de jure;
consequently, it may be rebutted. Accordingly, the general rule is that if the employer shows to the
satisfaction of the court that in the selection and supervision of his employee he has exercised the
care and diligence of a good father of a family, the presumption is overcome and he is relieved of
liability.32 However, with the enactment of the motor vehicle registration law, the defenses available
under Article 2180 of the Civil Code - that the employee acts beyond the scope of his assigned task
or that it exercised the due diligence of a good father of a family to prevent damage – are no longer
available to the registered owner of the motor vehicle, because the motor vehicle registration law, to
a certain extent, modified Article 2180.33

As such, there can be no other conclusion but to hold Lim vicariously liable with Mendoza.

This does not mean, however, that Lim is left without any recourse against Enriquez and Mendoza.
Under the civil law principle of unjust enrichment, the registered owner of the motor vehicle has a
right to be indemnified by the actual employer of the driver; and under Article 2181 of the Civil Code,
whoever pays for the damage caused by his dependents or employees may recover from the latter
what he has paid or delivered in satisfaction of the claim.

Having identified the persons liable, our next question is what may be awarded.

Actual or Compensatory Damages. Actual or compensatory damages are those awarded in

satisfaction of, or in recompense for, loss or injury sustained. They simply make good or replace the
loss caused by the wrong.34

Article 2202 of the Civil Code provides that in crimes and quasi delicts, the defendant shall be liable
for all damages which are the natural and probable consequences of the act or omission complained
of. It is not necessary that such damages have been foreseen or could have reasonably been
foreseen by the defendant. Article 2199 of the same Code, however, sets the limitation that, except
as provided by law or by stipulation, one is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved. As such, to warrant an award of actual or
compensatory damages, the claimant must prove that the damage sustained is the natural and
probable consequences of the negligent act and, moreover, the claimant must adequately prove the
amount of such damage.

In the case at bar, the RTC, basing on the receipts submitted by respondents and which receipts
petitioners had the opportunity to examine, found that the total repairs on the Isuzu truck amounted
to ₱142,757.40, and that the full hospitalization and medical expenses of Perez, Anla, Banca, and
Repisada amounted to ₱11,267.35. As such, these are the amounts that respondents are entitled to
as actual and compensatory damages.

Although respondents alleged in their complaint that the damage to their Isuzu truck caused them
the loss of a daily income of ₱1,000.00, such claim was not duly substantiated by any evidence on
record, and thus cannot be awarded in their favor.

Moral Damages. Moral damages are awarded to enable the injured party to obtain means,
diversions or amusements that will serve to alleviate the moral suffering he has undergone, by
reason of the defendant's culpable action.35

In prayers for moral damages, however, recovery is more an exception rather than the rule. Moral
damages are not meant to be punitive but are designed to compensate and alleviate the physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar harm unjustly caused to a person. To be entitled to such an
award, the claimant must satisfactorily prove that he has suffered damages and that the injury
causing it has sprung from any of the cases listed in Articles 2219 and 2220 of the Civil Code.
Moreover, the damages must be shown to be the proximate result of a wrongful act or omission. The
claimant must thus establish the factual basis of the damages and its causal tie with the acts of the
defendant.36

In fine, an award of moral damages calls for the presentation of 1) evidence of besmirched
reputation or physical, mental or psychological suffering sustained by the claimant; 2)a culpable act
or omission factually established; 3) proof that the wrongful act or omission of the defendant is the
proximate cause of the damages sustained by the claimant; and 4) the proof that the act is
predicated on any of the instances expressed or envisioned by Article 2219 and Article 2220 of the
Civil Code.37

A review of the complaint and the transcript of stenographic notes yields the pronouncement that
respondents neither alleged nor offered any evidence of besmirched reputation or physical, mental
or psychological suffering incurred by them. All that Leonora and her counsel had to say on the
matter of damages other than actual or compensatory damages is this:38

Q: Did you ever spend covering attorney’s fees?

A: Yes, sir. ₱50,000.00.

Q: Aside from the actual damage that you have mentioned x x x, how much more would you like this
Court to award you by way of moral damages?

A: ₱100,000.00, sir.

Q: How about exemplary damages?

A: ₱50,000.00, sir.

Q: What happened to you, what did you feel when the defendants failed to immediately repair your
vehicle that was damaged Madam Witness?

A: I have incurred expenses and I was forced to apply for a loan, sir.

In Kierulf v. CA,39 we observed that this Court cannot remind the bench and the bar often enough that
in order that moral damages may be awarded, there must be pleading and proof of moral suffering,
mental anguish, fright and the like. Citing Francisco v. GSIS,40 the Court held that there must be clear
testimony on the anguish and other forms of mental suffering. Thus, if the plaintiff fails to take the
witness stand and testify as to his social humiliation, wounded feelings and anxiety, moral damages
cannot be awarded.

Moreover, respondents were not able to show that their claim properly falls under Articles 2219 and
2220 of the Civil Code. Respondents cannot rely on Article 2219 (2) of the Civil Code which allows
moral damages in quasi-delicts causing physical injuries because in physical injuries, moral
damages are recoverable only by the injured party,41and in the case at bar, herein respondents were
not the ones who were actually injured.

In B.F. Metal (Corp.) v. Sps. Lomotan, et al.,42 the Court, in a claim for damages based on quasi-
delict causing physical injuries, similarly disallowed an award of moral damages to the owners of the
damaged vehicle, when neither of them figured in the accident and sustained injuries.
Neither can respondents rely on Article 21 of the Civil Code as the RTC erroneously did. Article 21
deals with acts contra bonus mores, and has the following elements: (1) There is an act which is
legal; (2) but which is contrary to morals, good custom, public order, or public policy; (3) and it is
done with intent to injure.43 In the present case, it can hardly be said that Mendoza’s negligent driving
and violation of traffic laws are legal acts. Moreover, it was not proven that Mendoza intended to
injure Perez, et al. Thus, Article 21 finds no application to the case at bar. All in all, we find that the
RTC and the CA erred in granting moral damages to respondents. Exemplary Damages. Article
2229 of the Civil Code provides that exemplary or corrective damages are imposed, by way of
example or correction for the public good, in addition to moral, temperate, liquidated or
compensatory damages. Article 2231 of the same Code further states that in quasi-delicts,
exemplary damages may be granted if the defendant acted with gross negligence.

Our jurisprudence sets certain conditions when exemplary damages may be awarded: First, they
may be imposed by way of example or correction only in addition, among others, to compensatory
damages, and cannot be recovered as a matter of right, their determination depending upon the
amount of compensatory damages that may be awarded to the claimant. Second, the claimant must
first establish his right to moral, temperate, liquidated or compensatory damages. Third, the wrongful
act must be accompanied by bad faith, and the award would be allowed only if the guilty party acted
in a wanton, fraudulent, reckless, oppressive or malevolent manner.44

In motor vehicle accident cases, exemplary damages may be awarded where the defendant’s
misconduct is so flagrant as to transcend simple negligence and be tantamount to positive or
affirmative misconduct rather than passive or negative misconduct. In characterizing the requisite
positive misconduct which will support a claim for punitive damages, the courts have used such
descriptive terms as willful, wanton, grossly negligent, reckless, or malicious, either alone or in
combination.45

Gross negligence is the absence of care or diligence as to amount to a reckless disregard of the
safety of persons or property. It evinces a thoughtless disregard of consequences without exerting
any effort to avoid them.46

In the case at bar, having established respondents’ right to compensatory damages, exemplary
damages are also in order, given the fact that Mendoza was grossly negligent in driving the Mayamy
bus. His act of intruding or encroaching on the lane rightfully occupied by the Isuzu truck shows his
reckless disregard for safety.

In Baño v. Bachelor Express, Inc., et al.,47 where an erring bus, in the process of overtaking a
jeepney, also encroached on the opposite lane, and consequently collided with a dump truck, the
Court held the driver of the bus grossly negligent and affirmed the award of exemplary damages.
Attorney’s Fees. Article 2208 of the Civil Code enumerates the instances when attorney’s fees may
be recovered:

Art. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial
costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

 (4) In case of a clearly unfounded civil action or proceeding against the plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff’s valid and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;

(8) In actions for indemnity under workmen’s compensation and employer’s liability laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that attorney’s fees and
expenses of litigation should be recovered;

In all cases, the attorney’s fees and expenses of litigation must be reasonable.

From the very opening sentence of Article 2208 of the Civil Code, it is clearly intended to retain the
award of attorney’s fees as the exception in our law, as the general rule remains that attorney’s fees
are not recoverable in the absence of a stipulation thereto, the reason being that it is not sound
policy to set a premium on the right to litigate.48

As such, in Spouses Agustin v. CA,49 we held that, the award of attorney’s fees being an exception
rather than the general rule, it is necessary for the court to make findings of facts and law that would
bring the case within the exception and justify the grant of such award. Thus, the reason for the
award of attorney’s fees must be stated in the text of the court’s decision; otherwise, if it is stated
only in the dispositive portion of the decision, the same must be disallowed on appeal.

In the case at bar, the RTC Decision had nil discussion on the propriety of attorney’s fees, and it
merely awarded such in the dispositive. The CA Decision, on the other hand, merely stated that the
award of attorney’s fees is merited as such is allowed when exemplary damages are
awarded.50 Following established jurisprudence,51however, the CA should have disallowed on appeal
said award of attorney’s fees as the RTC failed to substantiate said award. Costs of suit. The Rules
of Court provide that, generally, costs shall be allowed to the prevailing party as a matter of course,
thus:52

Section 1. Costs ordinarily follow results of suit.- Unless otherwise provided in these rules, costs
shall be allowed to the prevailing party as a matter of course, but the court shall have power, for
special reasons, to adjudge that either party shall pay the costs of an action, or that the same be
divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines,
unless otherwise provided by law.

In the present case, the award of costs of suit to respondents, as the prevailing party, is in order.
Interests. Interest by way of damages has been defined as interest allowed in actions for breach of
1âw phi 1

contractor tort for the unlawful detention of money already due. This type of interest is frequently
called "moratory interest." Interest as a part of damage, is allowed, not by application of arbitrary
rules, but as a result of the justice of the individual case and as compensation to the injured party.53
The legal provision on interests in quasi-delicts is Article 2211 of the Civil Code which provides that
in crimes and quasi-delicts, interest as part of the damage, may, in a proper case, be adjudicated in
the discretion of the court.

Generally, interest is allowed as a matter of right for failure to pay liquidated claims when due.54 For
unliquidated claims, however, Article 2213 of the Civil Code provides that interest cannot be
recovered upon unliquidated claims or damages, except when the demand can be established with
reasonable certainty.

In the case at bar, although the award of exemplary damages is unliquidated in the sense that
petitioners cannot know for sure, before judgment, the exact amount that they are required to pay to
respondents, the award of actual or compensatory damages, however, such as the truck repairs and
medical expenses, is arguably liquidated in that they can be measured against a reasonably certain
standard.55 Moreover, justice would seem to require that the delay in paying for past losses which
can be made reasonably certain should be compensated through an award of interest.56

WHEREFORE, premises considered, the Court Resolves to PARTIALLY GRANT the appeal by
certiorari, as follows:

1) DECLARE Mariano Mendoza and Elvira Lim solidarily liable to respondent Spouses
Leonora and Gabriel Gomez;

2) MAINTAIN the award of actual or compensatory damages in the amount of ₱142,757.40

for the repair of the Isuzu Elf truck, with legal interest beginning 31 January 2001 until fully
paid;

3) GRANT additional actual or compensatory damages in the amount of ₱11,267.35 for the
medical expenses shouldered by respondent Spouses Leonora and Gabriel Gomez, with
legal interest beginning 31 January 2001 until fully paid;

4) DELETE the award of moral damages;

5) MAINTAIN the award of exemplary damages at ₱50,000.00;

6) DELETE the award of attorney's fees; and

7) MAINTAIN the award of costs of suit.

SO ORDERED.

Negligence; proximate cause

MARIANO C. MENDOZA and ELVIRA LIM vs. SPOUSES LEONORA J. GOMEZ and GABRIEL V.
GOMEZ, G.R. No. 160110, June 18, 2014

“x x x.

The first question to address, then, is whether or not Mendoza’s negligence was duly proven. Negligence
is defined as the failure to observe for the protection of the interests of another person, that degree
of care, precaution and vigilance which the circumstances justly demand, whereby such other
person suffers injury.21

As found by the RTC, and affirmed by the CA, Mendoza was negligent in driving the subject Mayamy bus,
as demonstrated by the fact that, at the time of the collision, the bus intruded on the lane intended for the
Isuzu truck. Having encroached on the opposite lane, Mendoza was clearly in violation of traffic laws.
Article2185 of the Civil Code provides that 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.
In the case at bar, Mendoza’s violation of traffic laws was the proximate cause of the harm.

Proximate cause is defined as that cause, which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces the injury, and without which the result would not have
occurred. And more comprehensively, the proximate legal cause is that acting first and producing
the injury, either immediately or by setting other events in motion, all constituting a natural and
continuous chain of events, each having a close causal connection with its immediate predecessor,
the final event in the chain immediately effecting the injury as a natural and probable result of the
cause which first acted, under such circumstances that the person responsible for the first event
should, as an ordinary prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result therefrom.22

The evidence on record shows that before the collision, the Isuzu truck was in its rightful lane, and was
even at a stop, having been flagged down by a security guard of St. Ignatius Village.23 The mishap occurred
when the Mayamy bus, travelling at a fast speed as shown by the impact of the collision, and going in the
opposite direction as that of the Isuzu truck, encroached on the lane rightfully occupied by said Isuzu truck,
and caused the latter to spin, injuring Perez, Anla, Banca, and Repisada, and considerably damaging the
Isuzu truck