Florida vs. Battung G.R. No.

208802, October 14, 2015

Magallanes Watercraft vs Auguis G.R. No. 211485, May 30, 2016
Mercury vs Baking G.R. No. 156037, May 25, 2007
Ramos vs. COL Realty G.R. No. 184905, August 28, 2009
Delsan Transport vs C&A Construction G.R. No. 156034, October 01, 2003
PNR vs Vizcara G.R. No. 190022, February 15, 2012

G.R. No. 208802, October 14, 2015

G.V. FLORIDA TRANSPORT, INC., PETITIONER, VS. HEIRS OF ROMEO L. BATTUNG, JR., REPRESENTED
BY ROMEO BATTUNG, SR., RESPONDENTS.

DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari[1] are the Decision[2] dated May 31, 2013 and the Resolution[3]
dated August 23, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 97757, which affirmed in toto the
Decision[4] dated August 29, 2011 of the Regional Trial Court of Cabagan, Isabela, Branch 22 (RTC) in Civil Case
No. 22-1103 finding petitioner G.V. Florida Transport, Inc. (petitioner), Federico M. Duplio, Jr. (Duplio), and
Christopher Daraoay (Daraoay) jointly and severally liable to respondents heirs of Romeo L. Battung, Jr.
(respondents) for damages arising from culpa contractual.
The Facts

Respondents alleged that in the evening of March 22, 2003, Romeo L. Battung, Jr. (Battung) boarded petitioner's
bus with body number 037 and plate number BVJ-525 in Delfin Albano, Isabela, bound for Manila.[5] Battung was
seated at the first row behind the driver and slept during the ride. When the bus reached the Philippine Carabao
Center in Muñoz, Nueva Ecija, the bus driver, Duplio, stopped the bus and alighted to check the tires. At this point,
a man who was seated at the fourth row of the bus stood up, shot Battung at his head, and then left with a
companion. The bus conductor, Daraoay, notified Duplio of the incident and thereafter, brought Romeo to the
hospital, but the latter was pronounced dead on arrival.[6] Hence, respondents filed a complaint[7] on July 15, 2008
for damages in the aggregate amount of P1,826,000.00[8] based on a breach of contract of carriage against
petitioner, Duplio, and Baraoay (petitioner, et al.) before the RTC, docketed as Civil Case No. 22-1103.
Respondents contended that as a common carrier, petitioner and its employees are bound to observe extraordinary
diligence in ensuring the safety of passengers; and in case of injuries and/or death on the part of a passenger,
they are presumed to be at fault and, thus, responsible therefor. As such, petitioner, et al. should be held civilly
liable for Battung's death.[9]

In their defense, petitioner, et al. maintained that they had exercised the extraordinary diligence required by law
from common carriers. In this relation, they claimed that a common carrier is not an absolute insurer of its
passengers and that Battung's death should be properly deemed a fortuitous event. Thus, they prayed for the
dismissal of the complaint, as well as the payment of their counterclaims for damages and attorney's fees. [10]
The RTC Ruling

In a Decision[11] dated August 29, 2011, the RTC ruled in respondents' favor and, accordingly, ordered petitioner,
et al. to pay respondent the amounts of: (a) P1,586,000.00 as compensatory damages for unearned income; (b)
P50,000.00 as actual damages; and (c) P50,000.00 as moral damages.[12]

The RTC found that petitioner, et al. were unable to rebut the presumed liability of common carriers in case of
injuries/death to its passengers due to their failure to show that they implemented the proper security measures to
prevent passengers from carrying deadly weapons inside the bus which, in this case, resulted in the killing of
Battung. As such, petitioner, et al. were held civilly liable for the latter's death based on culpa contractual.[13]

Dissatisfied, petitioner, et al. appealed to the CA.[14]

The CA Ruling

In a Decision[15] dated May 31, 2013, the CA affirmed the ruling of the RTC in toto.[16] It held that the killing of
Battung cannot be deemed as a fortuitous event, considering that such killing happened right inside petitioner's
bus and that petitioner, et al. did not take any safety measures in ensuring that no deadly weapon would be
smuggled inside the bus.[17]

Aggrieved, only petitioner moved for reconsideration[18] which was, however, denied in a Resolution[19] dated
August 23, 2013; hence, the instant petition.
Page 1 of 21
The Issue Before the Court

The core issue for the Court's resolution is whether or not the CA correctly affirmed the ruling of the RTC finding
petitioner liable for damages to respondent arising from culpa contractual.
The Court's Ruling

The petition is meritorious.

I.

The law exacts from common carriers (i.e., those persons, corporations, firms, or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering
their services to the public[20]) the highest degree of diligence (i.e., extraordinary diligence) in ensuring the
safety of its passengers. Articles 1733 and 1755 of the Civil Code state:
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.

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

In this relation, Article 1756 of the Civil Code provides that "[i]n case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in Articles 1733 and 1755." This disputable presumption may also
be overcome by a showing that the accident was caused by a fortuitous event.[21]

The foregoing provisions notwithstanding, it should be pointed out that the law does not make the common carrier
an insurer of the absolute safety of its passengers. In Mariano, Jr. v. Callejas,[22] the Court explained that:
While the law requires the highest degree of diligence from common carriers in the safe transport of their
passengers and creates a presumption of negligence against them, it does not, however, make the carrier an
insurer of the absolute safety of its passengers.

Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance[,] and precaution in the
carriage of passengers by common carriers to only such as human care and foresight can provide.
What constitutes compliance with said duty is adjudged with due regard to all the circumstances.

Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier
when its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to fasten
the negligence on the former, because the presumption stands in the place of evidence. Being a mere
presumption, however, the same is rebuttable by proof that the common carrier had exercised
extraordinary diligence as required by law in the performance of its contractual obligation, or that the
injury suffered by the passenger was solely due to a fortuitous event.

In fine, we can only infer from the law the intention of the Code Commission and Congress to curb the
recklessness of drivers and operators of common carriers in the conduct of their business.

Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an insurer
of the passenger's safety, but that its liability for personal injuries sustained by its passenger rests upon
its negligence, its failure to exercise the degree of diligence that the law requires. [23] (Emphases and
underscoring supplied)

Therefore, it is imperative for a party claiming against a common carrier under the above-said provisions to show
that the injury or death to the passenger/s arose from the negligence of the common carrier and/or its employees
in providing safe transport to its passengers.

In Pilapil v. CA,[24] the Court clarified that where the injury sustained by the passenger was in no way due (1) to
any defect in the means of transport or in the method of transporting, or (2) to the negligent or willful acts of the
common carrier's employees with respect to the foregoing - such as when the injury arises wholly from causes
created by strangers which the carrier had no control of or prior knowledge to prevent — there would be no issue
regarding the common carrier's negligence in its duty to provide safe and suitable care, as well as competent
employees in relation to its transport business; as such, the presumption of fault/negligence foisted under Article
1756 of the Civil Code should not apply:
Page 2 of 21
First, as stated earlier, the presumption of fault or negligence against the carrier is only a disputable
presumption.[The presumption] gives in where contrary facts are established proving either that the carrier had
exercised the degree of diligence required by law or the injury suffered by the passenger was due to a fortuitous
event. Where, as in the instant case, the injury sustained by the petitioner was in no way due to any
defect in the means of transport or in the method of transporting or to the negligent or wilful acts of
[the common carrier'sl employees, and therefore involving no issue of negligence in its duty to provide
safe and suitable [care] as well as competent employees, with the injury arising wholly from causes
created by strangers over which the carrier had no control or even knowledge or could not have
prevented, the presumption is rebutted and the carrier is not and ought not to be held liable. To rule
otherwise would make the common carrier the insurer of the absolute safety of its passengers which is not the
intention of the lawmakers. (Emphasis and underscoring supplied)

In this case, Battung's death was neither caused by any defect in the means of transport or in the method of
transporting, or to the negligent or willful acts of petitioner's employees, namely, that of Duplio and Daraoay, in
their capacities as driver and conductor, respectively. Instead, the case involves the death of Battung wholly
caused by the surreptitious act of a co-passenger who, after consummating such crime, hurriedly alighted from the
vehicle.[25] Thus, there is no proper issue on petitioner's duty to observe extraordinary diligence in ensuring the
safety of the passengers transported by it, and the presumption of fault/negligence against petitioner under Article
1756 in relation to Articles 1733 and 1755 of the Civil Code should not apply.
II.

On the other hand, since Battung's death was caused by a co-passenger, the applicable provision is Article 1763
of the Civil Code, which states that "a common carrier is responsible for injuries suffered by a passenger on
account of the willful acts or negligence of other passengers or of strangers, if the common carrier's
employees through the exercise of the diligence of a good father of a family could have prevented or stopped
the act or omission." Notably, for this obligation, the law provides a lesser degree of diligence, i.e., diligence of a
good father of a family, in assessing the existence of any culpability on the common carrier's part.

Case law states that the concept of diligence of a good father of a family "connotes reasonable care consistent with
that which an ordinarily prudent person would have observed when confronted with a similar situation. The test to
determine whether negligence attended the performance of an obligation is: 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."[26]

In ruling on this case, the CA cited Fortune Express, Inc. v. Court of Appeals[27] (Fortune) in ascribing negligence
on the part of petitioner, ratiocinating that it failed to implement measures to detect if its passengers were carrying
firearms or deadly weapons which would pose a danger to the other passengers.[28] However, the CA's reliance was
plainly misplaced in view of Fortune's factual variance with the case at bar.

In Fortune, the common carrier had already received intelligence reports from law enforcement agents that certain
lawless elements were planning to hijack and burn some of its buses; and yet, it failed to implement the necessary
precautions to ensure the safety of its buses and its passengers. A few days later, one of the company's buses was
indeed hijacked and burned by the lawless elements pretending as mere passengers, resulting in the death of one
of the bus passengers. Accordingly, the Court held that the common carrier's failure to take precautionary
measures to protect the safety of its passengers despite warnings from law enforcement agents showed that it
failed to exercise the diligence of a good father of a family in preventing the attack against one of its buses; thus,
the common carrier was rightfully held liable for the death of the aforementioned passenger.

In contrast, no similar danger was shown to exist in this case so as to impel petitioner or its employees to
implement heightened security measures to ensure the safety of its passengers. There was also no showing that
during the course of the trip, Battung's killer made suspicious actions which would have forewarned petitioner's
employees of the need to conduct thorough checks on him or any of the passengers. Relevantly, the Court, in
Nocum v. Laguna Tayabas Bus Company,[29] has held that common carriers should be given sufficient leeway in
assuming that the passengers they take in will not bring anything that would prove dangerous to himself, as well
as his co-passengers, unless there is something that will indicate that a more stringent inspection should be made,
viz.:
In this particular case before Us, it must be considered that while it is true the passengers of appellant's bus should
not be made to suffer for something over which they had no control, as enunciated in the decision of this Court
cited by His Honor, fairness demands that in measuring a common carrier's duty towards its passengers,
allowance must be given to the reliance that should be reposed on the sense of responsibility of all the
passengers in regard to their common safety. It is to be presumed that a passenger will not take with
him anything dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be
lightly considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to
Page 3 of 21
any unusual search, when he protests the innocuousness of his baggage and nothing appears to
indicate the contrary, as in the case at bar. In other words, inquiry may be verbally made as to the
nature of a passenger's baggage when such is not outwardly perceptible, but beyond this,
constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid, as
suggested by the service manual invoked by the trial judge, in compelling the passenger to submit to more rigid
inspection, after the passenger had already declared that the box contained mere clothes and other miscellaneous,
could not have justified invasion of a constitutionally protected domain. Police officers acting without judicial
authority secured in the manner provided by law are not beyond the pale of constitutional inhibitions designed to
protect individual human rights and liberties. Withal, what must be importantly considered here is not so much the
infringement of the fundamental sacred rights of the particular passenger herein involved, but the constant threat
any contrary ruling would pose on the right of privacy of all passengers of all common carriers, considering how
easily the duty to inspect can be made an excuse for mischief and abuse. Of course, when there are sufficient
indications that the representations of the passenger regarding the nature of his baggage may not be
true, in the interest of the common safety of all, the assistance of the police authorities may be
solicited, not necessarily to force the passenger to open his baggage, but to conduct the needed
investigation consistent with the rules of propriety and, above all, the constitutional rights of the
passenger. It is in this sense that the mentioned service manual issued by appellant to its conductors must be
understood.[30] (Emphases and underscoring supplied)

In this case, records reveal that when the bus stopped at San Jose City to let four (4) men ride petitioner's bus
(two [2] of which turned out to be Battung's murderers), the bus driver, Duplio, saw them get on the bus and even
took note of what they were wearing. Moreover, Duplio made the bus conductor, Daraoay, approach these men
and have them pay the corresponding fare, which Daraoay did.[31] During the foregoing, both Duplio and Daraoay
observed nothing which would rouse their suspicion that the men were armed or were to carry out an unlawful
activity. With no such indication, there was no need for them to conduct a more stringent search (i.e., bodily
search) on the aforesaid men. By all accounts, therefore, it cannot be concluded that petitioner or any of its
employees failed to employ the diligence of a good father of a family in relation to its responsibility under Article
1763 of the Civil Code. As such, petitioner cannot altogether be held civilly liable.

WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated May 31, 2013 and the Resolution dated
August 23, 2013 of the Court of Appeals in CA-G.R. CV No. 97757 are hereby REVERSED and SET ASIDE.
Accordingly, the complaint for damages filed by respondents heirs of Romeo L. Battung, Jr. is DISMISSED for lack
of merit.

SO ORDERED.
G.R. No. 211485, May 30, 2016
MAGALLANES WATERCRAFT ASSOCIATION, INC., AS REPRESENTED BY ITS BOARD OF TRUSTEES,
NAMELY: EDILBERTO M. BAJAO, GERARDO O. PLAZA, ISABELITA MULIG, EDNA ABEJAY, MARCELO
DONAN, NENITA O. VARQUEZ, MERLYN ALVAREZ, EDNA EXCLAMADOR, AND CESAR MONSON,
PETITIONER, VS. MARGARITO C. AUGUIS AND DIOSCORO C. BASNIG, RESPONDENTS.

DECISION
MENDOZA, J.:
This petition for review on certiorari, filed under Rule 45 of the Rules of Court, seeks to reverse and set aside the
March 14, 2013 Decision[1] and the January 17, 2014 Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV No.
01170-MIN, which affirmed with modification the January 11, 2007 Decision of the Regional Trial Court, Branch 33,
Butuan City (RTC) in SEC Case No. 11-2004 (Civil Case No. 5420).

Petitioner Magallanes Watercraft Association, Inc. (MWAI) is a local association of motorized banca owners and
operators ferrying cargoes and passengers from Magallanes, Agusan del Norte, to Butuan City and back.
Respondents Margarito C. Auguis (Auguis) and Dioscoro C. Basnig (Basnig) were members and officers of MWAI -
vice-president and secretary, respectively.[3]

On December 5, 2003, the Board of Trustees (Board) of MWAI passed Resolution No. 1, Series of 2003, and
thereafter issued Memorandum No. 001 suspending the rights and privileges of Auguis and Basnig as members of
the association for thirty (30) days for their refusal to pay their membership dues and berthing fees because of
their pending oral complaint and demand for financial audit of the association funds. Auguis had an accumulated
unpaid obligation of P4,059.00 while Basnig had P7,552.00.[4]

In spite of the suspension of their privileges as members, Auguis and Basnig still failed to settle their obligations
with MWAI. For said reason, the latter issued Memorandum No. 002, Series of 2004, dated January 8, 2004,
suspending their rights and privileges for another thirty (30) days.[5]
Page 4 of 21
On February 6, 2004y respondents filed an action for damages and attorney's fees with a prayer for the issuance of
a writ of preliminary injunction before the RTC. In its January 11, 2007 decision, the trial court ordered Auguis and
Basnig to pay their unpaid accounts. It, nonetheless, required MWAI to pay them actual damages and attorney's
fees.[6]

Aggrieved, MWAI appealed before the CA.

The CA Ruling

In its March 14, 2013 decision, the CA affirmed with modification the RTC decision. According to the appellate
court, the RTC correctly held that MWAI was guilty of an ultra vires act. The CA noted that neither MWAI's Articles
of Incorporation nor its By-Laws[7] contained any provision that expressly and/or impliedly vested power or
authority upon its Board to recommend the imposition of disciplinary sanctions on its delinquent officers and/or
members. It further noted that MWAI lacked the authority to suspend the right of the respondents to operate their
bancas, which was granted through a Certificate of Public Convenience. The appellate court pointed out that the
Maritime Industry Authority (MARINA) expressly reminded MWAI that it was the sole government agency which
had the authority to suspend, cancel and'or revoke the franchise of the two. The CA explained that the suspension
of their berthing privileges resulted in the failure of the latter to operate their bancas—contrary to the express
reminder of the MARINA. Hence, the CA concluded that MWAI acted beyond the scope of its powers when it
suspended the rights of Auguis and Basnig as members of MWAI to berth on the seaport of Magallanes and operate
their bancas.

It also ruled that MWAI was bound to indemnify respondents because they suffered financial losses as a result of
the illegal suspension of their berthing privileges and their right to operate their bancas. The appellate court agreed
with the RTC that MWAI was liable for damages in favor of the respondents. The CA, however, deleted the award of
actual damages for their failure to adduce evidence to prove the claimed loss of actual income. It, nonetheless,
awarded them temperate damages in recognition of the pecuniary loss they suffered. Moreover, the CA saw it fit to
grant a reduced amount of attorney's fees because Auguis and Basnig were compelled to litigate or incur expenses
to protect their interests. The dispositive portion of the CA decision reads:
WHEREFORE, for lack of merit, the present appeal is hereby DISMISSED. The assailed Decision dated 11 January
2007 of the Regional Trial Court (RTC), 10th Judicial Region, Branch 33 of Libertad, Butuan City in SEC Case No.
11-2004 (Civil Case No. 5420) is AFFIRMED with MODIFICATION as follows:
1. DELETING the award for actual damages. In lieu thereof, temperate damages in the amount of
P40,000.00 and P20,000.00 are respectively awarded to appellees Dioscoro C. Basnig and Margarito C.
Auguis;
2. IMPOSING legal interest at the rate of 12% per annum from the finality of this decision until its full
satisfaction; and
3. REDUCING the attorney's fees to P30,000.00.
SO ORDERED.[8]
MWAI moved for reconsideration, but its motion was denied by the CA in its January 17, 2014 resolution.

Undaunted, it filed this present petition with the sole

ASSIGNMENT OF ERROR

THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT AWARDED

TEMPERATE DAMAGES WITH A LEGAL RATE OF INTEREST OF 12% PER ANNUM FROM THE FINALITY OF
THE DECISION UNTIL FULLY PAID AS WELL AS REDUCED ATTORNEY'S FEES IN FAVOR OF THE
RESPONDENTS.[9]
MWAI insists that the award of temperate damages and attorney's fees was baseless. It faults the CA in finding
that it was guilty of an ultra vires act when it suspended respondents' berthing rights because its by-laws obliged
Auguis and Basnig as members to: (1) obey and comply with the bylaws, rules and regulations that may be
promulgated by the association from time to time; and (2) to pay its membership dues and other assessments.
Thus, MWAI argues that respondents cannot claim either actual or temperate damages because the suspension of
their rights and privileges was anchored on its by-laws.

Petitioner also contends that respondents are not entitled to attorney's fees either because the award of attorney's
fees is the exception rather than the rule. It points out that it was through respondents' own fault that their rights
were suspended. Hence, they cannot be considered as having been compelled to litigate.

In their Comment,[10] dated July 16, 2015, respondents countered that they were entitled to temperate damages
Page 5 of 21
as the suspension of their operations was arbitrary, baseless and contrary to law and public policy. They claimed
that attorney's fees were rightfully awarded because they were compelled to litigate as a consequence of MWAI's
ultra vires act.

In its Reply to the Comment,[11] dated January 5, 2016, MWAI reiterated the arguments it presented in its petition
for review.
The Court's Ruling

The petition is meritorious.

Corporate powers include implied and incidental powers

Central to the resolution of the propriety of the award of temperate damages and attorney's fees is the contested
authority of MWAI to suspend rights and privileges of its members for the latter's failure to pay their obligations. If
the suspension of rights and privileges of members is not among the corporate powers granted to MWAI, then the
same is an ultra vires act which exposes MWAI to possible liability.

Section 45 of the Corporation Code provides for the powers possessed by a corporation, to wit:
Sec. 45. Ultra vires acts of corporations. - No corporation under this Code shall possess or exercise any corporate
powers except those conferred by this Code or by its articles of incorporation and except such as are necessary or
incidental to the exercise of the powers so conferred.
From a reading of the said provision, it is clear that a corporation has: (1) express powers, which are bestowed
upon by law or its articles of incorporation; and (2) necessary or incidental powers to the exercise of those
expressly conferred. An act which cannot fall under a corporation's express or necessary or incidental powers is an
ultra vires act. In University of Mindanao, Inc. v. Bangko Sentral ng Pilipinas[12] (University of Mindanao), the Court
explained:
Corporations are artificial entities granted legal personalities upon their creation by their incorporators in
accordance with law. Unlike natural persons, they have no inherent powers. Third persons dealing with
corporations cannot assume that corporations have powers. It is up to those persons dealing with corporations to
determine their competence as expressly defined by the law and their articles of incorporation.

A corporation may exercise its powers only within those definitions. Corporate acts that are outside
those express definitions under the law or articles of incorporation or those "committed outside the
object for which a corporation is created" are ultra vires.

xxxx
[Emphasis Supplied]
The CA concluded that the suspension by MWAI of respondents' rights as members for their failure to settle
membership dues was an ultra vires act as MWAFs articles of incorporation and by-laws were bereft of any
provision that expressly and impliedly vested power or authority upon its Board to recommend the imposition of
disciplinary actions on its delinquent officers and/or members.

The Court disagrees.

Under Section 3(a) and Section 3(c) Article V of MWAI's By-Laws, its members are bound "[t]o obey and comply
with the by-laws, rules and regulations that may be promulgated by the association from time to time" and "[t]o
pay membership dues and other assessments of the association."[13] Thus, the respondents were obligated to pay
the membership dues of which they were delinquent. MWAI could not be faulted in suspending the rights and
privileges of its delinquent members.

The fact alone that neither the articles of incorporation nor the bylaws of MWAI granted its Board the authority to
discipline members does not make the suspension of the rights and privileges of the respondents ultra vires. In
National Power Corporation v. Vera,[14] the Court stressed that an act might be considered within corporate
powers, even if it was not among the express powers, if the same served the corporate ends, to wit:
For if that act is one which is lawful in itself and not otherwise prohibited, and is done for the purpose of serving
corporate ends, and reasonably contributes to the promotion of those ends in a substantial and not in a remote
and fanciful sense, it may be fairly considered within the corporation's charter powers.

This Court is guided by jurisprudence in the application of the above standard. In the 1963 case of Republic of the
Philippines v. Acoje Mining Company, Inc. [G.R. No. L-18062, February 28, 1963, 7 SCRA 361] the Court
affirmed the rule that a corporation is not restricted to the exercise of powers expressly conferred
Page 6 of 21
upon it by its charter, but has the power to do what is reasonably necessary or proper to promote the
interest or welfare of the corporation.
[Emphasis Supplied]
In University of Mindanao, the Court wrote that corporations were not limited to the express powers enumerated in
their charters, but might also perform powers necessary or incidental thereto, to wit:
A corporation may exercise its powers only within those definitions. Corporate acts that are outside those express
definitions under the law or articles of incorporation or those "committed outside the object for which a corporation
is created" are ultra vires.

The only exception to this rule is when acts are necessary and incidental to carry out a corporation's
purposes, and to the exercise of powers conferred by the Corporation Code and under a corporation's
articles of incorporation. xxx

xxxx

Montelibano, et al. v. Bacolod-Murcia Milling Co., Inc. stated the test to determine if a corporate act is in
accordance with its purposes:
It is a question, therefore, in each case, of the logical relation of the act to the corporate purpose expressed in the
charter. If that act is one which is lawful in itself, and not otherwise prohibited, is done for the purpose of serving
corporate ends, and is reasonably tributary to the promotion of those ends, in a substantial, and not in a remote
and fanciful, sense, it may fairly be considered within charter powers. The test to be applied is whether the act
in question is in direct and immediate furtherance of the corporation's business, fairly incident to the
express powers and reasonably necessary to their exercise. If so, the corporation has the power to do it;
otherwise, not.
[Emphases Supplied; citations omitted]
Based on the foregoing, MWAI can properly impose sanctions on Auguis and Basnig for being delinquent members
considering that the payment of membership dues enables MWAI to discharge its duties and functions enumerated
under its charter. Moreover, respondents were obligated by the by-laws of the association to pay said dues. The
suspension of their rights and privileges is not an ultra vires act as it is reasonably necessary or proper in order to
further the interest and welfare of MWAI. Also, the imposition of the temporary ban on the use of MWAI's berthing
facilities until Auguis and Basnig have paid their outstanding obligations was a reasonable measure that the former
could undertake to ensure the prompt payment of its membership dues.[15] Otherwise, MWAI will be rendered
inutile as it will have no means of ensuring that its members will promptly settle their obligations. It will be
exposed to deleterious consequences as it will be unable to continue with its operations if the members continue to
be delinquent in the payment of their obligations, without fear of possible sanctions.

Award of Temperate Damages improper

Having settled the propriety of respondents' suspension of privileges, the Court finds that the grant of temperate
damages in their favor is baseless. Temperate damages may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with
certainty.[16] As such, its award is premised on the fact that actual damages could have been recovered were it not
for the fact that the precise amount of damages could not be accurately ascertained. In other words, if a party-
claimant had not suffered any damages, no damages either actual nor temperate, are recoverable.

Damages resulting from a person's valid exercise of a right, is damnum absque injuria.[17] In Diaz v. Davao Light
and Power Co., Inc.,[18] the Court further expounded, to wit:
Petitioner may have suffered damages as a result of the filing of the complaints. However, there is a material
distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt or
harm which results from the injury; and damages are the recompense or compensation awarded for the damage
suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result
of a violation of a legal duty. In such cases, the consequences must be borne by the injured person alone; the law
affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. These
situations are often called damnum absque injuria. Whatever damages Diaz may have suffered would have to be
borne by him alone since it was his acts which led to the filing of the complaints against him.
Considering that the suspension of Auguis and Basnig was in the lawful exercise of MWAFs rights and powers as a
corporation, no remedy for any consequent damage, which they could have suffered, is available. They shall bear
the losses they may have suffered as a consequence of their lawful suspension. Further, the Court notes that in
suspending the rights and privileges of the said respondents, MWAI merely denied them access from its berthing
facilities and in no way suspended or revoked their certificates of public convenience.

Page 7 of 21
Anent the award of attorney's fees, the Court likewise finds it without basis. It is a settled rule that attorney's fees
shall not be recovered as cost where the party's persistence in litigation is based on his mistaken belief in the
righteousness of his cause.[19]

WHEREFORE, the petition is GRANTED. The March 14, 2013 Decision and the January 17, 2014 Resolution of the
Court of Appeals in CA-G.R. CV No. 01170-MIN are REVERSED and SET ASIDE. The complaint for damages
against petitioner Magallanes Watercraft Association, Inc. is DISMISSED for lack of merit.

SO ORDERED.
G.R. No. 156037, May 25, 2007
MERCURY DRUG CORPORATION, PETITIONER, VS. SEBASTIAN M. BAKING, RESPONDENT.

DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari [1] assailing the Decision[2] dated May 30, 2002 and
Resolution dated November 5, 2002 of the Court of Appeals in CA-G.R. CV No. 57435, entitled "Sebastian M.
Baking, plaintiff-appellee, versus Mercury Drug Co. Inc., defendant-appellant."

The facts are:

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

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

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

On November 8 or on the third day he took the medicine, respondent figured in a vehicular accident. The car he
was driving collided with the car of one Josie Peralta. Respondent fell asleep while driving. He could not
remember anything about the collision nor felt its impact.

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

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

After hearing, the trial court rendered its Decision dated March 18, 1997 in favor of respondent, thus:
WHEREFORE, premises considered, by preponderance of evidence, the Court hereby renders judgment in favor of
the plaintiff and against the defendant ordering the latter to pay mitigated damages as follows:
1. P250,000.00 as moral damages;
2. P20,000.00 as attorney's fees and litigation expenses;
3. plus ½% of the cost of the suit.
SO ORDERED.
On appeal, the Court of Appeals, in its Decision, affirmed in toto the RTC judgment. Petitioner filed a motion for
reconsideration but it was denied in a Resolution dated November 5, 2002.

Hence, this petition.

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

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

The issues for our resolution are:

Page 8 of 21
 1. Whether petitioner was negligent, and if so, whether such negligence was the proximate cause of
respondent's accident; and
2. Whether the award of moral damages, attorney's fees, litigation expenses, and cost of the suit is justified.
Article 2176 of the New Civil Code provides:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties,
is called a quasi-delict and is governed by the provisions of this Chapter.
To sustain a claim based on the above provision, the following requisites must concur: (a) damage suffered by the
plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect between the fault or
negligence of the defendant and the damage incurred by the plaintiff.[3]

There is no dispute that respondent suffered damages.

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

Obviously, petitioner's employee was grossly negligent in selling to respondent Dormicum, instead of the
prescribed Diamicron. Considering that a fatal mistake could be a matter of life and death for a buying patient,
the said employee should have been very cautious in dispensing medicines. She should have verified whether the
medicine she gave respondent was indeed the one prescribed by his physician. The care required must be
commensurate with the danger involved, and the skill employed must correspond with the superior knowledge of
the business which the law demands.[4]

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

We disagree.

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

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

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

xxx

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

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

xxx

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

Page 9 of 21
As regards the award of moral damages, we hold the same to be in order. Moral damages may be awarded
whenever the defendant's wrongful act or omission is the proximate cause of the plaintiff's physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,
and similar injury in the cases specified or analogous to those provided in Article 2219 of the Civil Code. [7]

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

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

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

On the matter of attorney's fees and expenses of litigation, it is settled that the reasons or grounds for the award
thereof must be set forth in the decision of the court.[9] Since the trial court's decision did not give the basis of
the award, the same must be deleted. In Vibram Manufacturing Corporation v. Manila Electric Company,[10] we
held:
Likewise, the award for attorney's fees and litigation expenses should be deleted. Well-enshrined is that "an award
for attorney's fees must be stated in the text of the court�s decision and not in the dispositive portion only"
(Consolidated Bank and Trust Corporation (Solidbank) v. Court of Appeals, 246 SCRA 193 [1995] and Keng Hua
Paper Products, Inc. v. Court of Appeals, 286 SCRA 257 [1998]). This is also true with the litigation expenses
where the body of the decision discussed nothing for its basis.
WHEREFORE, we DENY the petition. The challenged Decision and Resolution of the Court of Appeals in CA-G.R.
CV No. 57435 are AFFIRMED with modification in the sense that (a) the award of moral damages to respondent is
reduced from P250,000.00 to P50,000.00; (b) petitioner is likewise ordered to pay said respondent exemplary
damages in the amount of P25,000.00; and (c) the award of attorney's fees and litigation expenses is deleted.

Costs against petitioner.

SO ORDERED.
G.R. No. 184905, August 28, 2009
LAMBERT S. RAMOS, PETITIONER, VS. C.O.L. REALTY CORPORATION, RESPONDENT.

DECISION
YNARES-SANTIAGO, J.:
The issue for resolution is whether petitioner can be held solidarily liable with his driver, Rodel Ilustrisimo, to pay
respondent C.O.L. Realty the amount of P51,994.80 as actual damages suffered in a vehicular collision.

The facts, as found by the appellate court, are as follows:

On or about 10:40 o'clock in the morning of 8 March 2004, along Katipunan (Avenue), corner Rajah Matanda
(Street), Quezon City, a vehicular accident took place between a Toyota Altis Sedan bearing Plate Number XDN
210, owned by petitioner C.O.L. Realty Corporation, and driven by Aquilino Larin ("Aquilino"), and a Ford
Expedition, owned by x x x Lambert Ramos (Ramos) and driven by Rodel Ilustrisimo ("Rodel"), with Plate Number
LSR 917. A passenger of the sedan, one Estela Maliwat ("Estela") sustained injuries. She was immediately rushed
to the hospital for treatment.

(C.O.L. Realty) averred that its driver, Aquilino, was slowly driving the Toyota Altis car at a speed of five to ten
kilometers per hour along Rajah Matanda Street and has just crossed the center lane of Katipunan Avenue when
(Ramos') Ford Espedition violently rammed against the car's right rear door and fender. With the force of the
impact, the sedan turned 180 degrees towards the direction where it came from.

Upon investigation, the Office of the City Prosecutor of Quezon City found probable cause to indict Rodel, the driver
of the Ford Expedition, for Reckless Imprudence Resulting in Damage to Property. In the meantime, petitioner
Page 10 of 21
demanded from respondent reimbursement for the expenses incurred in the repair of its car and the hospitalization
of Estela in the aggregate amount of P103,989.60. The demand fell on deaf ears prompting (C.O.L. Realty) to file a
Complaint for Damages based on quasi-delict before the Metropolitan Trial Court of Metro Manila (MeTC), Quezon
City, docketed as Civil Case No. 33277, and subsequently raffled to Branch 42.

As could well be expected, (Ramos) denied liability for damages insisting that it was the negligence of Aquilino,
(C.O.L. Realty's) driver, which was the proximate cause of the accident. (Ramos) maintained that the sedan car
crossed Katipunan Avenue from Rajah Matanda Street despite the concrete barriers placed thereon prohibiting
vehicles to pass through the intersection.

(Ramos) further claimed that he was not in the vehicle when the mishap occurred. He asserted that he exercised
the diligence of a good father of a family in the selection and supervision of his driver, Rodel.

Weighing the respective evidence of the parties, the MeTC rendered the Decision dated 1 March 2006 exculpating
(Ramos) from liability, thus:
"WHEREFORE, the instant case is DISMISSED for lack of merit. The Counterclaims of the defendant are likewise
DISMISSED for lack of sufficient factual and legal basis.

SO ORDERED."

The aforesaid judgment did not sit well with (C.O.L. Realty) so that he (sic) appealed the same before the RTC of
Quezon City, raffled to Branch 215, which rendered the assailed Decision dated 5 September 2006, affirming the
MeTC's Decision. (C.O.L. Realty's) Motion for Reconsideration met the same fate as it was denied by the RTC in its
Order dated 5 June 2007.[1]

C.O.L. Realty appealed to the Court of Appeals which affirmed the view that Aquilino was negligent in crossing
Katipunan Avenue from Rajah Matanda Street since, as per Certification of the Metropolitan Manila Development
Authority (MMDA) dated November 30, 2004, such act is specifically prohibited. Thus:
This is to certify that as per records found and available in this office the crossing of vehicles at Katipunan
Avenue from Rajah Matanda Street to Blue Ridge Subdivision, Quezon City has (sic) not allowed since
January 2004 up to the present in view of the ongoing road construction at the area.[2] (Emphasis
supplied)

Barricades were precisely placed along the intersection of Katipunan Avenue and Rajah Matanda Street in order to
prevent motorists from crossing Katipunan Avenue. Nonetheless, Aquilino crossed Katipunan Avenue through
certain portions of the barricade which were broken, thus violating the MMDA rule.[3]

However, the Court of Appeals likewise noted that at the time of the collision, Ramos' vehicle was moving at high
speed in a busy area that was then the subject of an ongoing construction (the Katipunan Avenue-Boni Serrano
Avenue underpass), then smashed into the rear door and fender of the passenger's side of Aquilino's car, sending
it spinning in a 180-degree turn.[4] It therefore found the driver Rodel guilty of contributory negligence for driving
the Ford Expedition at high speed along a busy intersection.

Thus, on May 28, 2008, the appellate court rendered the assailed Decision,[5] the dispositive portion of which
reads, as follows:
WHEREFORE, the Decision dated 5 September 2006 of the Regional Trial Court of Quezon City, Branch 215 is
hereby MODIFIED in that respondent Lambert Ramos is held solidarily liable with Rodel Ilustrisimo to pay petitioner
C.O.L. Realty Corporation the amount of P51,994.80 as actual damages. Petitioner C.O.L. Realty Corporation's
claim for exemplary damages, attorney's fees and cost of suit are DISMISSED for lack of merit.

SO ORDERED.

Petitioner filed a Motion for Reconsideration but it was denied. Hence, the instant petition, which raises the
following sole issue:
THE COURT OF APPEALS' DECISION IS CONTRARY TO LAW AND JURISPRUDENCE, AND THE EVIDENCE TO
SUPPORT AND JUSTIFY THE SAME IS INSUFFICIENT.

We resolve to GRANT the petition.

There is no doubt in the appellate court's mind that Aquilino's violation of the MMDA prohibition against crossing
Katipunan Avenue from Rajah Matanda Street was the proximate cause of the accident. Respondent does not
Page 11 of 21
dispute this; in its Comment to the instant petition, it even conceded that petitioner was guilty of mere
contributory negligence.[6]

Thus, the Court of Appeals acknowledged that:

The Certification dated 30 November 2004 of the Metropolitan Manila Development Authority (MMDA) evidently
disproved (C.O.L. Realty's) barefaced assertion that its driver, Aquilino, was not to be blamed for the accident -
"TO WHOM IT MAY CONCERN:

This is to certify that as per records found and available in this office the crossing of vehicles at Katipunan Avenue
from Rajah Matanda Street to Blue Ridge Subdivision, Quezon City has (sic) not allowed since January 2004 up to
the present in view of the ongoing road construction at the area.

This certification is issued upon request of the interested parties for whatever legal purpose it may serve."

(C.O.L. Realty) admitted that there were barricades along the intersection of Katipunan Avenue and Rajah Matanda
Street. The barricades were placed thereon to caution drivers not to pass through the intersecting roads. This
prohibition stands even if, as (C.O.L. Realty) claimed, the "barriers were broken" at that point creating a small gap
through which any vehicle could pass. What is clear to Us is that Aquilino recklessly ignored these barricades and
drove through it. Without doubt, his negligence is established by the fact that he violated a traffic regulation. This
finds support in Article 2185 of the Civil Code -
"Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at
the time of the mishap, he was violating any traffic regulation."

Accordingly, there ought to be no question on (C.O.L. Realty's) negligence which resulted in the vehicular
mishap.[7]

However, it also declared Ramos liable vicariously for Rodel's contributory negligence in driving the Ford
Expedition at high speed along a busy intersection. On this score, the appellate court made the following
pronouncement:
As a professional driver, Rodel should have known that driving his vehicle at a high speed in a major thoroughfare
which was then subject of an on-going construction was a perilous act. He had no regard to (sic) the safety of
other vehicles on the road. Because of the impact of the collision, (Aquilino's) sedan made a 180-degree turn as
(Ramos') Ford Expedition careened and smashed into its rear door and fender. We cannot exculpate Rodel from
liability.

Having thus settled the contributory negligence of Rodel, this created a presumption of negligence on the part of
his employer, (Ramos). For the employer to avoid the solidary liability for a tort committed by his employee, an
employer must rebut the presumption by presenting adequate and convincing proof that in the selection and
supervision of his employee, he or she exercises the care and diligence of a good father of a family. Employers
must submit concrete proof, including documentary evidence, that they complied with everything that was
incumbent on them.

(Ramos) feebly attempts to escape vicarious liability by averring that Rodel was highly recommended when he
applied for the position of family driver by the Social Service Committee of his parish. A certain Ramon Gomez, a
member of the church's livelihood program, testified that a background investigation would have to be made
before an applicant is recommended to the parishioners for employment. (Ramos) supposedly tested Rodel's
driving skills before accepting him for the job. Rodel has been his driver since 2001, and except for the mishap in
2004, he has not been involved in any road accident.

Regrettably, (Ramos') evidence which consisted mainly of testimonial evidence remained unsubstantiated and are
thus, barren of significant weight. There is nothing on the records which would support (Ramos') bare allegation of
Rodel's 10-year unblemished driving record. He failed to present convincing proof that he went to the extent of
verifying Rodel's qualifications, safety record, and driving history.

So too, (Ramos) did not bother to refute (C.O.L. Realty's) stance that his driver was texting with his cellphone
while running at a high speed and that the latter did not slow down albeit he knew that Katipunan Avenue was
then undergoing repairs and that the road was barricaded with barriers. The presumption juris tantum that there
was negligence in the selection of driver remains unrebutted. As the employer of Rodel, (Ramos) is solidarily liable
for the quasi-delict committed by the former.

Certainly, in the selection of prospective employees, employers are required to examine them as to their

Page 12 of 21
qualifications, experience and service records. In the supervision of employees, the employer must formulate
standard operating procedures, monitor their implementation and impose disciplinary measures for the breach
thereof. These, (Ramos) failed to do.[8]

Petitioner disagrees, arguing that since Aquilino's willful disregard of the MMDA prohibition was the sole proximate
cause of the accident, then respondent alone should suffer the consequences of the accident and the damages it
incurred. He argues:
20. It becomes apparent therefore that the only time a plaintiff, the respondent herein, can recover damages is if
its negligence was only contributory, and such contributory negligence was the proximate cause of the accident. It
has been clearly established in this case, however, that respondent's negligence was not merely contributory, but
the sole proximate cause of the accident.

xxxx

22. As culled from the foregoing, respondent was the sole proximate cause of the accident. Respondent's vehicle
should not have been in that position since crossing the said intersection was prohibited. Were it not for the
obvious negligence of respondent's driver in crossing the intersection that was prohibited, the accident would not
have happened. The crossing of respondent's vehicle in a prohibited intersection unquestionably produced the
injury, and without which the accident would not have occurred. On the other hand, petitioner's driver had the
right to be where he was at the time of the mishap. As correctly concluded by the RTC, the petitioner's driver could
not be expected to slacken his speed while travelling along said intersection since nobody, in his right mind, would
do the same. Assuming, however, that petitioner's driver was indeed guilty of any contributory negligence, such
was not the proximate cause of the accident considering that again, if respondent's driver did not cross the
prohibited intersection, no accident would have happened. No imputation of any lack of care on Ilustrisimo's could
thus be concluded. It is obvious then that petitioner's driver was not guilty of any negligence that would make
petitioner vicariously liable for damages.

23. As the sole proximate cause of the accident was respondent's own driver, respondent cannot claim damages
from petitioner.[9]

On the other hand, respondent in its Comment merely reiterated the appellate court's findings and
pronouncements, conceding that petitioner is guilty of mere contributory negligence, and insisted on his vicarious
liability as Rodel's employer under Article 2184 of the Civil Code.

Articles 2179 and 2185 of the Civil Code on quasi-delicts apply in this case, viz:

Article 2179. When the plaintiff's own negligence was the immediate and proximate cause of his injury, he cannot
recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury
being the defendant's lack of due care, the plaintiff may recover damages, but the courts shall mitigate the
damages to be awarded.

Article 2185. 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.

If the master is injured by the negligence of a third person and by the concurring contributory negligence of his
own servant or agent, the latter's negligence is imputed to his superior and will defeat the superior's action against
the third person, assuming of course that the contributory negligence was the proximate cause of the injury of
which complaint is made.[10]

Applying the foregoing principles of law to the instant case, Aquilino's act of crossing Katipunan Avenue via Rajah
Matanda constitutes negligence because it was prohibited by law. Moreover, it was the proximate cause of the
accident, and thus precludes any recovery for any damages suffered by respondent from the accident.

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. [11]

Page 13 of 21
If Aquilino heeded the MMDA prohibition against crossing Katipunan Avenue from Rajah Matanda, the accident
would not have happened. This specific untoward event is exactly what the MMDA prohibition was intended for.
Thus, a prudent and intelligent person who resides within the vicinity where the accident occurred, Aquilino had
reasonable ground to expect that the accident would be a natural and probable result if he crossed Katipunan
Avenue since such crossing is considered dangerous on account of the busy nature of the thoroughfare and the
ongoing construction of the Katipunan-Boni Avenue underpass. It was manifest error for the Court of Appeals to
have overlooked the principle embodied in Article 2179 of the Civil Code, that when the plaintiff's own negligence
was the immediate and proximate cause of his injury, he cannot recover damages.

Hence, we find it unnecessary to delve into the issue of Rodel's contributory negligence, since it cannot overcome
or defeat Aquilino's recklessness which is the immediate and proximate cause of the accident. Rodel's contributory
negligence has relevance only in the event that Ramos seeks to recover from respondent whatever damages or
injuries he may have suffered as a result; it will have the effect of mitigating the award of damages in his favor. In
other words, an assertion of contributory negligence in this case would benefit only the petitioner; it could not
eliminate respondent's liability for Aquilino's negligence which is the proximate result of the accident.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated May 28, 2008 in CA-G.R. SP
No. 99614 and its Resolution of October 13, 2008 are hereby REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Quezon City, Branch 215 dated September 5, 2006 dismissing for lack of merit respondent's
complaint for damages is hereby REINSTATED.

SO ORDERED.
G.R. No. 156034, October 01, 2003
DELSAN TRANSPORT LINES, INC., PETITIONER, VS. C & A CONSTRUCTION, INC., RESPONDENT.

DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review under Rule 45 of the Revised Rules of Court are the June 14, 2002 decision [1] of
the Court of Appeals in CA-G.R. CV No. 59034, which reversed the decision[2] of the Regional Trial Court of Manila,
Branch 46, in Civil Case No. 95-75565, and its November 7, 2002 resolution[3] denying petitioner's motion for
reconsideration.

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

On October 9, 1994, M/V Delsan Express, a ship owned and operated by petitioner Delsan Transport Lines, Inc.,
anchored at the Navotas Fish Port for the purpose of installing a cargo pump and clearing the cargo oil tank. At
around 12:00 midnight of October 20, 1994, Captain Demetrio T. Jusep of M/V Delsan Express received a report
from his radio head operator in Japan[5] that a typhoon was going to hit Manila[6] in about eight (8) hours.[7] At
approximately 8:35 in the morning of October 21, 1994, Capt. Jusep tried to seek shelter at the North Harbor but
could not enter the area because it was already congested.[8] At 10:00 a.m., Capt. Jusep decided to drop anchor at
the vicinity of Vitas mouth, 4 miles away from a Napocor power barge. At that time, the waves were already
reaching 8 to 10 feet high. Capt. Jusep ordered his crew to go full ahead to counter the wind which was dragging
the ship towards the Napocor power barge. To avoid collision, Capt. Jusep ordered a full stop of the vessel. [9] He
succeeded in avoiding the power barge, but when the engine was re-started and the ship was maneuvered full
astern, it hit the deflector wall constructed by respondent.[10] The damage caused by the incident amounted to
P456,198.24.[11]

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

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

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

Hence, petitioner filed the instant petition contending that Capt. Jusep was not negligent in waiting until 8:35 in
the morning of October 21, 1994 before transferring the vessel to the North Harbor inasmuch as it was not shown
that had the transfer been made earlier, the vessel could have sought shelter.[15] It further claimed that it cannot
be held vicariously liable under Article 2180 of the Civil Code because respondent failed to allege in the complaint
that petitioner was negligent in the selection and supervision of its employees.[16] Granting that Capt. Jusep was
indeed guilty of negligence, petitioner is not liable because it exercised due diligence in the selection of Capt. Jusep
who is a duly licensed and competent Master Mariner.[17]

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

Article 2176 of the Civil Code provides that whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict. The test for determining the existence of
negligence in a particular case may be stated as follows: Did the defendant in doing the alleged negligent act use
the reasonable care and caution which an ordinary prudent person would have used in the same situation? If not,
then he is guilty of negligence.[18]

In the case at bar, the Court of Appeals was correct in holding that Capt. Jusep was negligent in deciding to
transfer the vessel only at 8:35 in the morning of October 21, 1994. As early as 12:00 midnight of October 20,
1994, he received a report from his radio head operator in Japan[19] that a typhoon was going to hit Manila[20] after
8 hours.[21] This, notwithstanding, he did nothing, until 8:35 in the morning of October 21, 1994, when he decided
to seek shelter at the North Harbor, which unfortunately was already congested. The finding of negligence cannot
be rebutted upon proof that the ship could not have sought refuge at the North Harbor even if the transfer was
done earlier. It is not the speculative success or failure of a decision that determines the existence of negligence in
the present case, but the failure to take immediate and appropriate action under the circumstances. Capt. Jusep,
despite knowledge that the typhoon was to hit Manila in 8 hours, complacently waited for the lapse of more than 8
hours thinking that the typhoon might change direction.[22] He cannot claim that he waited for the sun to rise
instead of moving the vessel at midnight immediately after receiving the report because of the difficulty of
traveling at night. The hour of 8:35 a.m. is way past sunrise. Furthermore, he did not transfer as soon as the sun
rose because, according to him, it was not very cloudy[23] and there was no weather disturbance yet.[24]

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

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

Anent the second issue, we find petitioner vicariously liable for the negligent act of Capt. Jusep. Under Article 2180
of the Civil Code an employer may be held solidarily liable for the negligent act of his employee. Thus -
Art. 2180. The obligation imposed in Article 2176 is demandable not only for one's own acts or omissions, but also
for those of persons for whom one is responsible.
xxxxxxxxx

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

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed
all the diligence of a good father of a family to prevent damage.
Whenever an employee's negligence causes damage or injury to another, there instantly arises a presumption juris
tantum that the employer failed to exercise diligentissimi patris families in the selection (culpa in eligiendo) or
Page 15 of 21
supervision (culpa in vigilando) of its employees. To avoid liability for a quasi-delict committed by his employee, an
employer must overcome the presumption by presenting convincing proof that he exercised the care and diligence
of a good father of a family in the selection and supervision of his employee. [28]

There is no question that petitioner, who is the owner/operator of M/V Delsan Express, is also the employer of
Capt. Jusep who at the time of the incident acted within the scope of his duty. The defense raised by petitioner was
that it exercised due diligence in the selection of Capt. Jusep because the latter is a licensed and competent Master
Mariner. It should be stressed, however, that the required diligence of a good father of a family pertains not only
to the selection, but also to the supervision of employees. It is not enough that the employees chosen be
competent and qualified, inasmuch as the employer is still required to exercise due diligence in supervising its
employees.

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

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

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

Considering that petitioner did not assail the damages awarded by the trial court, we find no reason to alter the
same. The interest imposed should, however, be modified. In Eastern Shipping Lines, Inc. v. Court of Appeals,[33] it
was held that the rate of interest on obligations not constituting a loan or forbearance of money is six percent
(6%) per annum. If the purchase price can be established with certainty at the time of the filing of the complaint,
the six percent (6%) interest should be computed from the date the complaint was filed until finality of the
decision. After the judgment becomes final and executory until the obligation is satisfied, the amount due shall
earn interest at 12% per year, the interim period being deemed equivalent to a forbearance of credit. [34]

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

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

SO ORDERED.
G.R. No. 190022, February 15, 2012
PHILIPPINE NATIONAL RAILWAYS CORPORATION, JAPHET ESTRANAS AND BEN SAGA, PETITIONERS,
VS. PURIFICACION VIZCARA, MARIVIC VIZCARA, CRESENCIA A. NATIVIDAD, HECTOR VIZCARA, JOEL
VIZCARA AND DOMINADOR ANTONIO, RESPONDENTS.

DECISION
REYES, J.:
Nature of the Petition

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, seeking to
annul and set aside the Decision[1] dated July 21, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 90021,
which affirmed with modification the Decision[2] dated March 20, 2007 of the Regional Trial Court (RTC), Branch
Page 16 of 21
40, Palayan City, and Resolution[3] dated October 26, 2009, which denied the petitioners’ motion for
reconsideration.
The Antecedent Facts

On May 14, 2004, at about three o’clock in the morning, Reynaldo Vizcara (Reynaldo) was driving a passenger
jeepney headed towards Bicol to deliver onion crops, with his companions, namely, Cresencio Vizcara (Cresencio),
Crispin Natividad (Crispin), Samuel Natividad (Samuel), Dominador Antonio (Dominador) and Joel Vizcara (Joel).
While crossing the railroad track in Tiaong, Quezon, a Philippine National Railways (PNR) train, then being operated
by respondent Japhet Estranas (Estranas), suddenly turned up and rammed the passenger jeepney. The collision
resulted to the instantaneous death of Reynaldo, Cresencio, Crispin, and Samuel. On the other hand, Dominador
and Joel, sustained serious physical injuries.[4]

At the time of the accident, there was no level crossing installed at the railroad crossing. Additionally, the “Stop,
Look and Listen” signage was poorly maintained. The “Stop” signage was already faded while the “Listen” signage
was partly blocked by another signboard.[5]

On September 15, 2004, the survivors of the mishap, Joel and Dominador, together with the heirs of the deceased
victims, namely, Purificacion Vizcara, Marivic Vizcara, Cresencia Natividad and Hector Vizcara, filed an action for
damages against PNR, Estranas and Ben Saga, the alternate driver of the train, before the RTC of Palayan City.
The case was raffled to Branch 40 and was docketed as Civil Case No. 0365-P. In their complaint, the respondents
alleged that the proximate cause of the fatalities and serious physical injuries sustained by the victims of the
accident was the petitioners’ gross negligence in not providing adequate safety measures to prevent injury to
persons and properties. They pointed out that in the railroad track of Tiaong, Quezon where the accident
happened, there was no level crossing bar, lighting equipment or bell installed to warn motorists of the existence
of the track and of the approaching train. They concluded their complaint with a prayer for actual, moral and
compensatory damages, as well as attorney’s fees.[6]

For their part, the petitioners claimed that they exercised due diligence in operating the train and monitoring its
roadworthiness. They asseverate that right before the collision, Estranas was driving the train at a moderate
speed. Four hundred (400) meters away from the railroad crossing, he started blowing his horn to warn motorists
of the approaching train. When the train was only fifty (50) meters away from the intersection, respondent
Estranas noticed that all vehicles on both sides of the track were already at a full stop. Thus, he carefully
proceeded at a speed of twenty-five (25) kilometers per hour, still blowing the train’s horn. However, when the
train was already ten (10) meters away from the intersection, the passenger jeepney being driven by Reynaldo
suddenly crossed the tracks. Estranas immediately stepped on the brakes to avoid hitting the jeepney but due to
the sheer weight of the train, it did not instantly come to a complete stop until the jeepney was dragged 20 to 30
meters away from the point of collision.[7]
The Ruling of the Trial Court

After trial on the merits, the RTC rendered its Decision[8] dated March 20, 2007, ruling in favor of the respondents,
the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendants Philippine National Railways
Corporation (PNR), Japhet Estranas and Ben Saga to, jointly and severally pay the following amounts to:

1. a) PURIFICACION VIZCARA: 3) P100,000.00 as exemplary damages; and

1) P50,000.00, as indemnity for the death of
Reynaldo Vizcara;
2) P35,000.00, for funeral expenses;
3) P5,000.00 for re-embalming expenses;
4) P40,000.00 for wake/interment expenses;
5) P300,000.00 as reimbursement for the value of
the jeepney with license plate no. DTW-387;
6) P200,000.00 as moral damages;
7) P100,000.00 as exemplary damages; and
8) P20,000.00 for Attorney’s fees.
b) MARIVIC VIZCARA:
1) P50,000.00, as indemnity for the death of
Cresencio Vizcara;
2) P200,000.00 as moral damages;
4) P20,000.00 for Attorney’s fees.
c) HECTOR VIZCARA:
1) P50,000.00 as indemnity for the death of Samuel
Vizcara;
2) P200,000.00 as moral damages;
3) P100,000.00 as exemplary damages; and
4) P20,000.00 for Attorney’s fees.
d) CRESENCIA NATIVIDAD:
1) P50,000.00 as indemnity for the death of Crispin
Natividad;
2) P200,000.00 as moral damages;
Page 17 of 21
3) P100,000.00 as exemplary damages; and 1) P63,427.00 as reimbursement for his actual
4) P20,000.00 for Attorney’s fees. expenses;
2) P50,000.00 as moral damages;
e) JOEL VIZCARA 3) P25,000.00 as exemplary damages; and
4) P10,000.00 for Attorney’s fees.
1) P9,870.00 as reimbursement for his actual
expenses;
2) P50,000.00 as moral damages; and
3) P25,000.00 as exemplary damages; and
4) P10,000.00 for Attorney’s fees. 2. Costs of suit.

f) DOMINADOR ANTONIO

SO ORDERED.[9]

The Ruling of the CA

Unyielding, the petitioners appealed the RTC decision to the CA. Subsequently, on July 21, 2009, the CA rendered
the assailed decision, affirming the RTC decision with modification with respect to the amount of damages awarded
to the respondents. The CA disposed, thus:
WHEREFORE, instant appeal is PARTIALLY GRANTED. The assailed Decision is AFFIRMED WITH
MODIFICATION, as follows:

(1) The award of P5,000.00 for re-embalming expenses and P40,000.00 for wake/interment expenses to
PURIFICACION VIZCARA is deleted. In lieu thereof, P25,000.00 as temperate damages is awarded;

(2) The award of moral damages to PURIFICACION VIZCARA, MARIVIC VIZCARA, HECTOR VIZCARA and
CRESENCIA NATIVIDAD is hereby reduced from P200,000.00 to P100,000.00 each while moral damages
awarded to JOEL VIZCARA and DOMINADOR ANTONIO are likewise reduced from P50,000.00 to P25,000.00;

(3) The award of exemplary damages to PURIFICACION VIZCARA, MARIVIC VIZCARA, HECTOR VIZCARA and
CRESENCIA NATIVIDAD is hereby reduced from P100,000.00 to P50,000.00 each while exemplary damages
awarded to JOEL VIZCARA and DOMINADOR ANTONIO are likewise reduced from P25,000.00 to P12,500.00; and

(4) The award for attorney’s fees in favor of the Appellees as well as the award of P300,000.00 to Appellee
PURIFICACION as reimbursement for the value of the jeepney is DELETED.

SO ORDERED.[10]

In the assailed decision, the CA affirmed the RTC’s finding of negligence on the part of the petitioners. It concurred
with the trial court's conclusion that petitioner PNR's failure to install sufficient safety devices in the area, such as
flagbars or safety railroad bars and signage, was the proximate cause of the accident. Nonetheless, in order to
conform with established jurisprudence, it modified the monetary awards to the victims and the heirs of those who
perished due to the collision.

The petitioners filed a Motion for Reconsideration[11] of the decision of the CA. However, in a Resolution[12] dated
October 26, 2009, the CA denied the same.

Aggrieved, the petitioners filed the present petition for review on certiorari, raising the following grounds:
I

THE CA ERRED IN FINDING THAT THE PROXIMATE CAUSE OF THE ACCIDENT WAS THE NEGLIGENCE OF
THE PETITIONERS;
II

THE CA ERRED IN HOLDING THAT THE DOCTRINE OF LAST CLEAR CHANCE FINDS NO APPLICATION IN
THE INSTANT CASE;
III

Page 18 of 21
THE CA ERRED IN FINDING NEGLIGENCE ON THE PART OF THE PETITIONERS OR ERRED IN NOT
FINDING AT THE LEAST, CONTRIBUTORY NEGLIGENCE ON THE PART OF THE RESPONDENTS.[13]

The petitioners maintain that the proximate cause of the collision was the negligence and recklessness of the driver
of the jeepney. They argue that as a professional driver, Reynaldo is presumed to be familiar with traffic rules and
regulations, including the right of way accorded to trains at railroad crossing and the precautionary measures to
observe in traversing the same. However, in utter disregard of the right of way enjoyed by PNR trains, he failed to
bring his jeepney to a full stop before crossing the railroad track and thoughtlessly followed the ten-wheeler truck
ahead of them. His failure to maintain a safe distance between the jeepney he was driving and the truck ahead of
the same prevented him from seeing the PNR signage displayed along the crossing.[14]

In their Comment,[15] the respondents reiterate the findings of the RTC and the CA that the petitioners' negligence
in maintaining adequate and necessary public safety devices in the area of the accident was the proximate cause of
the mishap. They asseverate that if there was only a level crossing bar, warning light or sound, or flagman in the
intersection, the accident would not have happened. Thus, there is no other party to blame but the petitioners for
their failure to ensure that adequate warning devices are installed along the railroad crossing. [16]
This Court’s Ruling

The petition lacks merit.

The petitioners’ negligence was the

proximate cause of the accident.

Article 2176 of the New Civil Code prescribes a civil liability for damages caused by a person's act or omission
constituting fault or negligence. It states:
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 was no pre-existing contractual relation between the
parties, is called quasi-delict and is governed by the provisions of this chapter.

In Layugan v. Intermediate Appellate Court,[17] negligence was defined as the omission to do something which a
reasonable man, guided by 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 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.[18] To determine the existence of
negligence, the time-honored test was: 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.[19]

In the instant petition, this Court is called upon to determine whose negligence occasioned the ill-fated incident.
The records however reveal that this issue had been rigorously discussed by both the RTC and the CA. To
emphasize, the RTC ruled that it was the petitioners’ failure to install adequate safety devices at the railroad
crossing which proximately caused the collision. This finding was affirmed by the CA in its July 21, 2009 Decision.
It is a well-established rule that factual findings by the CA are conclusive on the parties and are not reviewable by
this Court. They are entitled to great weight and respect, even finality, especially when, as in this case, the CA
affirmed the factual findings arrived at by the trial court.[20]

Furthermore, in petitions for review on certiorari, only questions of law may be put into issue. Questions of fact
cannot be entertained.[21] To distinguish one from the other, a question of law exists when the doubt or difference
centers on what the law is on a certain state of facts. A question of fact, on the other hand, exists if the doubt
centers on the truth or falsity of the alleged facts.[22] Certainly, the finding of negligence by the RTC, which was
affirmed by the CA, is a question of fact which this Court cannot pass upon as this would entail going into the
factual matters on which the negligence was based.[23] Moreover, it was not shown that the present case falls
under any of the recognized exceptions[24] to the oft repeated principle according great weight and respect to the
factual findings of the trial court and the CA.

At any rate, the records bear out that the factual circumstances of the case were meticulously scrutinized by both
the RTC and the CA before arriving at the same finding of negligence on the part of the petitioners, and we found
no compelling reason to disturb the same. Both courts ruled that the petitioners fell short of the diligence expected
Page 19 of 21
of it, taking into consideration the nature of its business, to forestall any untoward incident. In particular, the
petitioners failed to install safety railroad bars to prevent motorists from crossing the tracks in order to give way to
an approaching train. Aside from the absence of a crossing bar, the “Stop, Look and Listen” signage installed in the
area was poorly maintained, hence, inadequate to alert the public of the impending danger. A reliable signaling
device in good condition, not just a dilapidated “Stop, Look and Listen” signage, is needed to give notice to the
public. It is the responsibility of the railroad company to use reasonable care to keep the signal devices in working
order. Failure to do so would be an indication of negligence.[25] Having established the fact of negligence on the
part of the petitioners, they were rightfully held liable for damages.

There was no contributory negligence

on the part of the respondents.

As to whether there was contributory negligence on the part of the respondents, this court rule in the negative.
Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he
has suffered, which falls below the standard which he is required to conform for his own protection. It is an act or
omission amounting to want of ordinary care on the part of the person injured which, concurring with the
defendant’s negligence, is the proximate cause of the injury.[26] Here, we cannot see how the respondents could
have contributed to their injury when they were not even aware of the forthcoming danger. It was established
during the trial that the jeepney carrying the respondents was following a ten-wheeler truck which was only about
three to five meters ahead. When the truck proceeded to traverse the railroad track, Reynaldo, the driver of the
jeepney, simply followed through. He did so under the impression that it was safe to proceed. It bears noting that
the prevailing circumstances immediately before the collision did not manifest even the slightest indication of an
imminent harm. To begin with, the truck they were trailing was able to safely cross the track. Likewise, there was
no crossing bar to prevent them from proceeding or, at least, a stoplight or signage to forewarn them of the
approaching peril. Thus, relying on his faculties of sight and hearing, Reynaldo had no reason to anticipate the
impending danger.[27] He proceeded to cross the track and, all of a sudden, his jeepney was rammed by the train
being operated by the petitioners. Even then, the circumstances before the collision negate the imputation of
contributory negligence on the part of the respondents. What clearly appears is that the accident would not have
happened had the petitioners installed reliable and adequate safety devices along the crossing to ensure the safety
of all those who may utilize the same.

At this age of modern transportation, it behooves the PNR to exert serious efforts to catch up with the trend,
including the contemporary standards in railroad safety. As an institution established to alleviate public
transportation, it is the duty of the PNR to promote the safety and security of the general riding public and provide
for their convenience, which to a considerable degree may be accomplished by the installation of precautionary
warning devices. Every railroad crossing must be installed with barriers on each side of the track to block the full
width of the road until after the train runs past the crossing. To even draw closer attention, the railroad crossing
may be equipped with a device which rings a bell or turns on a signal light to signify the danger or risk of crossing.
It is similarly beneficial to mount advance warning signs at the railroad crossing, such as a reflectorized crossbuck
sign to inform motorists of the existence of the track, and a stop, look and listen signage to prompt the public to
take caution. These warning signs must be erected in a place where they will have ample lighting and unobstructed
visibility both day and night. If only these safety devices were installed at the Tiaong railroad crossing and the
accident nevertheless occurred, we could have reached a different disposition in the extent of the petitioner’s
liability.

The exacting nature of the responsibility of railroad companies to secure public safety by the installation of warning
devices was emphasized in Philippine National Railways v. Court of Appeals,[28] thus:
[I]t may broadly be stated that railroad companies owe to the public a duty of exercising a reasonable degree of
care to avoid injury to persons and property at railroad crossings, which duties pertain both to the operation of
trains and to the maintenance of the crossings. Moreover, every corporation constructing or operating a railway
shall make and construct at all points where such railway crosses any public road, good, sufficient, and safe
crossings, and erect at such points, at sufficient elevation from such road as to admit a free passage of vehicles of
every kind, a sign with large and distinct letters placed thereon, to give notice of the proximity of the railway, and
warn persons of the necessity of looking out for trains. The failure of the PNR to put a cross bar, or signal light,
flagman or switchman, or semaphore is evidence of negligence and disregard of the safety of the public, even if
there is no law or ordinance requiring it, because public safety demands that said device or equipment be
installed.[29]

The responsibility of the PNR to secure public safety does not end with the installation of safety equipment and
signages but, with equal measure of accountability, with the upkeep and repair of the same. Thus, in Cusi v.
Philippine National Railways,[30] we held:
Jurisprudence recognizes that if warning devices are installed in railroad crossings, the travelling public has the
right to rely on such warning devices to put them on their guard and take the necessary precautions before
crossing the tracks. A need, therefore, exists for the railroad company to use reasonable care to keep such devices
Page 20 of 21
in good condition and in working order, or to give notice that they are not operating, since if such a signal is
misunderstood it is a menace. Thus, it has been held that if a railroad company maintains a signalling device at a
crossing to give warning of the approach of a train, the failure of the device to operate is generally held to be
evidence of negligence, which maybe considered with all the circumstances of the case in determining whether the
railroad company was negligent as a matter of fact. [31]

The maintenance of safety equipment and warning signals at railroad crossings is equally important as their
installation since poorly maintained safety warning devices court as much danger as when none was installed at all.
The presence of safety warning signals at railroad crossing carries with it the presumption that they are in good
working condition and that the public may depend on them for assistance. If they happen to be neglected and
inoperative, the public may be misled into relying on the impression of safety they normally convey and eventually
bring injury to themselves in doing so.

The doctrine of last clear

chance is not applicable.

Finally, the CA correctly ruled that the doctrine of last clear chance is not applicable in the instant case. The
doctrine of last clear chance provides that where both parties are negligent but the negligent act of one is
appreciably later in point of time than that of the other, or where it is impossible to determine whose fault or
negligence brought about the occurrence of the incident, the one who had the last clear opportunity to avoid the
impending harm but failed to do so, is chargeable with the consequences arising therefrom. Stated differently, the
rule is that the antecedent negligence of a person does not preclude recovery of damages caused by the
supervening negligence of the latter, who had the last fair chance to prevent the impending harm by the exercise
of due diligence.[32] To reiterate, the proximate cause of the collision was the petitioners’ negligence in ensuring
that motorists and pedestrians alike may safely cross the railroad track. The unsuspecting driver and passengers of
the jeepney did not have any participation in the occurrence of the unfortunate incident which befell them.
Likewise, they did not exhibit any overt act manifesting disregard for their own safety. Thus, absent preceding
negligence on the part of the respondents, the doctrine of last clear chance cannot be applied.

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals dated July 21,
2009 in CA-G.R. CV No. 90021 is hereby AFFIRMED.

SO ORDERED.

Page 21 of 21