Sun Brothers & Co. v. Velasco

SUN BROTHERS & CO. [SBC] v. JOSE VELASCO & CO KANG CHIU

1958 / Angeles / Appeal from CFI judgment [Note that this is a CA, not SC, decision.]

FACTS

SBC delivered to Francisco Lopez an Admiral refrigerator. The stipulated price was P1,700, but only the downpayment of P500 was paid. Their contract stipulated the following:

• Lopez shall not remove the ref nor part possession without the express written consent of SBC.
• In the event of a violation of the agreement, SBC may rescind the contract of sale and recover possession of the ref. In addition, any amount previously paid shall be forfeited as liquidated damages, and the ref remains as SBC’s absolute property until Lopez is able to pay the full purchase price.

Without SBC’s knowledge, Lopez (who misrepresented himself as Jose Lim) sold it to JV Trading (owned by Jose Velasco) for P850, and Lopez executed a document that stated that he is the absolute owner of the ref. Without SBC’s knowledge, after displaying the ref at his store, JV Trading sold the ref to Co Kang Chiu for P985, and it was delivered to the latter’s house.

SBC filed a complaint for replevin against Lopez and Co Kang Chiu (later, JV Trading / Jose Velasco was included), and asked for a preliminary writ of replevin for the recovery of the possession of the ref, and it was issued. However, on Co Kang Chiu’s request and having filed a counter-bond, the ref was not taken out of his residence.

CFI decided in favor of SBC, declaring it as the absolute owner. Co Kang Chiu should return ref, or else, Lopez shall pay full amount of P1,700 to SBC, and JV Trading should reimburse Co Kang Chiu the amount of P985.

CFI ERRED; CO KANG CHIU IS THE ABSOLUTE OWNER; LOPEZ MUST PAY SBC P1,700

ALSO, NCC 1505 PARAGRAPH 3 (ON MERCHANT STORE) SHOULD BE APPLIED

The lower court erred in applying the first paragraph of NCC 1505. It is true that Lopez never had title since it would only be vested on him upon full payment of the purchase price. As regards JV Trading, it did not acquire any better right than what Lopez had. The Court also found that he was not a purchaser in good faith. Since he was purchasing a ref from a private person who is not engaged in such business, he should have inquired WON Lopez has paid for the ref in full.

Paragraph 3 should be applied since Co Kang Chiu purchased the ref from JV Trading, which is a merchant store. Co Kang Chiu should be declared to have acquired a valid title, although his predecessors-in-interest did not have any right of ownership thereto. Here is a case where an imperfect or void title ripens into a valid one, because of some intervening causes.

            The rights and interests of an innocent buyer for value should be protected when it comes into clash with the rights and interests of a vendor. This is embodied in NCC 1505 (3) to facilitate commercial sales of movables and to give stability to business transactions.

            SBC’s recourse should be a claim for indemnity against Lopez, and not recovery upon reimbursement, since SBC did not lose ref nor was the company unlawfully deprived of it.

People v. Doria

People v. Florencio Doria [“ Jun ”] and Violeta Gaddao [ “Neneth ” ]

22 Jan 1999 / Puno / Appeal from a Pasig RTC decision

Search and seizure > Nature, scope and definition > Types > Warrantless search and seizure > “ Plain view ” doctrine

FACTS

Members of the PNP Narcotics Command received information that one “ Jun” [Doria] was engaged in illegal drug activities, so they decided to entrap and arrest him in a buy-bust operation. He was arrested. They frisked him but did not find the marked bills on him, and upon inquiry, he revealed that he left it at the house of his associate “ Neneth ” [Gaddao], so he led the police team to her house.

            The team found the door open and a woman inside the house. “ Jun” identified her as “Neneth, ” and she was asked by SPO1 Badua about the marked money as PO3 Manlangit looked over her house [he was still outside the house]. Standing by the door, PO3 Manlangit noticed a carton box under the dining table. One of the box’ s flaps was open, and inside it was something wrapped in plastic, and it appeared similar to the marijuana earlier sold to him by “ Jun. ” His suspicion aroused, so he entered the house and took hold of the box. He peeked inside the box and saw 10 bricks of what appeared to be dried marijuana leaves. SPO1 Badua recovered the marked bills from “ Neneth ” and they arrested her. The bricks were examined and they were found to be dried marijuana leaves.

            Florencio Doria and Violeta Gaddao were charged with violation of RA 6425 [Dangerous Drugs Act of 1972], Section 4 [Sale, Administration, Delivery, Distribution and Transportation of Prohibited Drugs] in relation to Section 21 [Attempt and Conspiracy]. RTC convicted them.

ISSUE AND HOLDING

WON RTC correctly found that the box of marijuana was in plain view, making its warrantless seizure valid. NO

RATIO

Re: warrantless arrest

Gaddao ’s warrantless arrest was illegal because she was arrested solely on the basis of the alleged identification made by Doria. Doria did not point to her as his associate in the drug business, but as the person with whom he left the marked bills. This identification does not necessarily mean that Gaddao conspired with Doria in pushing drugs. If there is no showing that the person who effected the warrantless arrest had knowledge of facts implicating the person arrested to the perpetration of the criminal offense, the arrest is legally objectionable.

            Since the warrantless arrest of Gaddao was illegal, the search of her person and home and the subsequent seizure of the marked bills and marijuana cannot be deemed legal as an incident to her arrest.

“ Plain view ” issue

Objects falling in plain view of an officer who has a right to be in the position to have that view are subject to seizure even without a search warrant and may be introduced in evidence. 

Requisites

1. The law enforcement officer in search of the evidence has a prior justification for an intrusion or is in a position from which he can view a particular area
2. The discovery of the evidence in plain view is inadvertent
3. It is immediately apparent to the officer that the item he observes may be evidence of a crime, contraband or otherwise subject to seizure

An object is in plain view if the object itself is plainly exposed to sight.  The difficulty arises when the object is inside a closed container.  Where the object seized was inside a closed package, the object itself is not in plain view and therefore cannot be seized without a warrant.  If the package is such that an experienced observer could infer from its appearance that it contains the prohibited article, then the article is deemed in plain view. It must be immediately apparent to the police that the items that they observe may be evidence of a crime, contraband or otherwise subject to seizure.

In his direct examination, PO3 Manlangit said that he was sure that the contents of the box were marijuana because he himself checked and marked the said contents. On cross-examination, however, he admitted that he merely presumed the contents to be marijuana because it had the same plastic wrapping as the "buy-bust marijuana."  Each of the ten  bricks of marijuana in the box was individually wrapped in old newspaper and placed inside plastic bags-- white, pink or blue in color. PO3 Manlangit himself admitted on cross-examination that the contents of the box could be items other than marijuana.  He did not know exactly what the box contained that he had to ask appellant Gaddao about its contents. It was not immediately apparent to PO3 Manlangit that the content of the box was marijuana; hence, it was not in plain view and its seizure without the requisite search warrant was in violation of the law and the Constitution.  It was fruit of the poisonous tree and should have been excluded and never considered by the trial court.

The fact that the box containing about 6 kilos of marijuana was found in Gaddao ’s house Gaddao does not justify a finding that she herself is guilty of the crime charged.

In a prosecution for illegal sale of dangerous drugs, what is material is the submission of proof that the sale took place between the poseur-buyer and the seller and the presentation of the drug as evidence in court.

• Prosecution established the fact that in consideration of the P1,600.00 he received, Doria sold and delivered 970 grams of marijuana to PO3 Manlangit, the poseur-buyer
• Prosecution failed to prove that Gaddao conspired with accused-appellant Doria in the sale of said drug

DORIA SENTENCED TO SUFFER RECLUSION PERPETUA + 500K FINE

GADDAO ACQUITTED

People v. Umanito

People v. Rufino Umanito

26 Oct 2007 / Tinga / Appeal from a CA decision

Search and seizure > Nature, scope and definition > Types > With a search warrant > Things that may be seized > Rules on DNA evidence [AM No. 06-11-5-SC (2007)]

FACTS

Around 9PM, private complainant AAA was accosted by a young male (whom she later knew as Umanito). He waited for her by the creek, and he pointed as knife at her abdomen. He dragged her into the Home Economics Building of Daramuangan Elementary School. He undressed her while still holding the knife. He set her down on a bench, put down the knife, and had sex with her. He dressed up and threatened to kill her if she reported the incident. Six months later, AAA ’ s mother noticed the prominence on her stomach, and it was then that she divulged to her mother the alleged rape. Her mother brought her to the police station. (Umanito’ s alibi: He was at home all day. Re: AAA, he admitted that he courted her but she spurned him. He conjectured that she had a crush on him since she frequently visited him.)

            RTC rendered judgment against Umanito and sentenced him to suffer reclusion perpetua. Umanito ’s appeal was transferred to the CA for intermediate review (as per Mateo ruling), and CA affirmed RTC. Umanito seeks acquittal on reasonable doubt, with the belated filing of the case and AAA ’ s questionable credibility as grounds. He also said that AAA filed the complaint only upon her mother ’s insistence; this supports his claim that AAA had sex with another (a married man). Also, he claimed that there were several inconsistencies in her assertions.

CASE IS REMANDED TO THE RTC FOR RECEPTION OF DNA EVIDENCE

RATIO

The fact that AAA bore a child because of the purported rape may provide the definitive key to Umanito ’ s absolution, since it can now be determined with reasonable certainty WON he is the father of her child. AAA and her child are directed to submit themselves to DNA testing under the aegis of the New Rule on DNA Evidence (AM No. 06-11-5-SC) which took effect on 15 Oct 2007 (a few days before promulgation of this case).

            DNA print / identification technology is now recognized as a uniquely effective means to link a suspect to a crime, or to absolve one erroneously accused, where biological evidence is available. The groundwork for acknowledging the strong weight of DNA testing was first laid out in Tijing v. CA . Herrera v. Alba discussed DNA analysis as evidence and traced the development of its admissibility in our jurisdiction. Tecson v. COMELEC said that in case proof of filiation or paternity would be unlikely to establish, DNA testing could be resorted to.

            The determination of WON Umanito is the father (through DNA testing) is material to the fair and correct adjudication of his appeal. Under Sec. 4 of AM No. 06-11-5-SC, the courts are authorized, after due hearing and notice, motu proprio to order a DNA testing. However, since SC is not a trier of facts, it would be more appropriate that the case be remanded to RTC for reception of evidence.

The hearing should be confined to ascertaining the feasibility of DNA testing with due regard to the standards set. RTC should order the DNA testing if it finds it to be feasible in this case. RTC shall determine the institution to undertake the testing, and the parties are free to manifest their comments on the choice. After the DNA analysis is obtained, it shall be incumbent upon the parties who wish to avail of the same to offer the results in accordance with the rules of evidence, which shall be assessed by RTC in keeping with Sections 7 (Assessment of probative value of DNA evidence) and 8 (Reliability of DNA testing methodology). RTC is also enjoined to observe confidentiality and preservation of DNA evidence.

            To facilitate the execution of this resolution, although the parties are primarily bound to bear the expenses for DNA testing, such costs may be advanced by SC if needed.

Ylarde v. Aquino

Federico Ylarde and Adelaida Doronio v. Edgardo Aquino, Mauro Soriano, and CA

1988 / Gancayco [Negligence > Standard of conduct > Children]

Facts

Soriano is the school principal; Aquino and Banez were teachers in this school. Novelito Ylarde is a student [deceased] & Federico is his father.

Gabaldon Primary School, an academic school, was littered with several huge concrete blocks [around one ton each] which were remnants of an old school shop which was destroyed in WWII. Banez [teacher] realized that these stones were huge hazards so he started burying them, and he was able to bury 10 blocks by himself. A fellow teacher Aquino decided to help, so he gathered 18 students and ordered them to dig a  hole where a 1-ton stone could be buried. The following day, he called 4 of these students to continue digging. When the hole was 1m 40cm deep, Aquino alone continued digging while the students remained inside the pit, throwing out loose soil. They got out of the hole when the depth was right. Aquino left the children to level the loose soil around the hole because he went to see Banez (who was 30 meters away) to get a key to the school workroom to get rope. He allegedly told the children not to touch the stone.

     After Aquino left, 3/4 kids jumped inside the pit, Ylarde included. The remaining kid jumped on top of the block, causing it to slide downwards. 2 were able to get out but Ylarde wasn't able to do so, and so the block pinned him to the wall in a standing position. He sustained injuries and three days later, Ylarde died. His parents filed a suit for damages against Aquino and Soriano [principal], but the RTC dismissed the complaint for the following reasons:

• Digging done is in line with Work Education subject
• Aquino exercised the utmost diligence of a very cautious person
• Ylarde's death was due to his own reckless imprudence

CA affirmed RTC. Petitioners base their action against Aquino [teacher] on NCC 2176 for his alleged negligence that caused Ylarde's death, while the action against the principal was based on NCC 2180.

Issue and Holding

WON both can be held liable for damages. NO, ONLY AQUINO [TEACHER] IS LIABLE.

Ratio

The principal cannot be held liable because he is a head of an academic school, not a school of arts and trade. SC cited Amadora v. CA wherein it was held NCC 2180 says that in an academic school, it is only the teacher who should be answerable for torts committed by their students, and in a school of arts and trades, it is only the school head who can be held liable. [LegMeth lesson: reddendo singula singulis -- "refers only to the last"]. Also, as admitted by Aquino himself, the principal did not give any instruction regarding the digging.

     Now, here's the twist: Aquino can be held liable under NCC 2180 as the teacher-in-charge. HOWEVER, petitioners base Aquino's alleged liability on NCC 2176. Therefore, the question is WON there were acts and omissions on Aquino's part amounting to fault or negligence which have direct causal relation to Ylarde's death, and the answer is YES. Ylarde would not have died were it not for the unsafe situation created by Aquino. He acted with fault and gross negligence when he:

• Failed to avail himself of services of adult manual laborers and instead utilized his pupils to make an excavation near a 1 ton concrete stone which he knew to be a hazardous task
• Required the children to remain inside the pit even after they finished digging, knowing that the block was nearby
• Ordered them to level the soil when it was apparent that the stone was on the brink of falling
• Went to a place where he would not be able to check on the students' safety
• Left the children close to the excavation, an attractive nuisance

It's totally ridiculous how the lower court found Aquino to have exercised utmost diligence of a very cautious person. The simple warning "not to touch the stone" is of no use, considering the age of these children. He should have made sure that the children are protected from all harm while they are in his company, since he stands in loco parentis to his students.

     Also ridiculous is the claim that the digging work is part of Work Education. For one, Aquino himself said that the principal made no instructions requiring what students were to do. Also, it's not in the lesson plan, since Aquino decided all by himself to help Banez. Also, this activity should not be placed alongside relatively lighter (!) activities such as school gardening, tree planting [which could be legitimately part of the Work Education subject] because these do not expose the children to such risk!

     SC does not agree with lower court that the injuries which led to Ylarde's death were caused by his own reckless imprudence. The degree of care required to be exercised must vary with the capacity of the person endangered to care for himself. A minor should not be held to the same degree of care as an adult, but his conduct should be judged according to the average conduct of persons his age and experience. (Left by themselves and tired from the strenuous digging, it was natural that they would play around. Also note that it was not only Ylarde who jumped into the hole.) Hence, Ylarde cannot be charged with reckless imprudence. 

Jarco Marketing v. CA

Jarco Marketing, Leonardo Kong, Jose Tiope, Elisa Panelo v. CA, Sps. Conrado and Criselda Aguilar

1999 / Davide, Jr. [Negligence > Standard of conduct > Children]

Facts

Jarco Marketing owns Syvel's Department Store; Kong, Tiope, and Panelo are store managers; Sps. Aguilar are the parents of daughter Zhieneth.

Criselda and Zhieneth Aguilar (6 years old) were at the 2nd floor of Syvel's Department Store. Criselda was signing her credit card slip when she felt a sudden gust of wind and heard a loud thud. When she looked behind her, she saw her daughter pinned by the bulk of the store's gift wrapping counter. She asked the assistance of the people around her, and she was immediately rushed to Makati Medical Center where she was operated. The next day, she lost her speech. She died 14 days after the accident. The cause of her death was attributed to the injuries sustained. 

     After her burial, Sps. Aguilar demanded the reimbursement of hospitalization, medical bills, and wake and funeral expenses from the petitioners, but they refused to pay. Sps. Aguilar filed a complaint for damages, seeking the payment of actual [157k~] and moral [300k] damages, attorney's fees [20k], and for loss of income and exemplary damages.

The petitioners denied any liability for Zhieneth's injuries and death. They also said the complaint was malicious, so they sought the dismissal of the complaint and an award of moral and exemplary damages, as well as attorney's fees.

• Criselda was negligent in exercising care and diligence over her daughter by allowing her to freely roam around in a store with glassware and appliances
• Zhieneth was guilty of contributory negligence for climbing the counter, thereby triggering its collapse
• Counter was made of sturdy wood with strong support, and it has never fell nor collapsed for the past 15 years since its construction
• Jarco Marketing maintained that it observed due diligence of a good father of the family
• Other petitioners raised due care and diligence in the performance of its duties

RTC found that the preponderance of evidence favored the store, et al, saying that the proximate cause was Zhieneth's act of clinging to the counter, and that Criselda's negligence contributed to the accident. The RTC found that the counter was not an attractive nuisance [something that would attract children to approach, get on or use it], since the counter was situated at the end or corner of the 2nd floor.

Here are the assertions of Sps. Aguilar:

• Zhieneth should be entitled to the conclusive presumption that a child below 9 is incapable of contributory negligence.
• Even if she is capable of contributory negligence, it was physically impossible for her to have propped herself on the counter considering her small frame, and height and weight of the counter.
• The fact that a former employee of the store, Gonzales, accompanied Zhieneth to the hospital belied the theory that Zhieneth climbed the counter.
• This employee Gonzales said that when Zhieneth was asked by the doctor what she did, she said "Nothing, I did not come near the counter and the counter just fell on me." This should be accorded credit according to the spouses.
• Negligence could not be imputed to Criselda since it was reasonable for her to let go of Zhieneth at that moment that she was signing the credit card slip.
• The proximate cause was petitioner's negligence in failing to institute measures to have the counter permanently nailed.

In response, here is what the petitioners have to say:

• Zhieneth's death was an ACCIDENT.
• Nailing the counter to the ground was not necessary because it has been there for the longest time without any prior accident and it's just in a corner.
• The criminal case for homicide through simple negligence filed against them was dismissed, and they were acquitted.

The CA reversed RTC, ruling in favor of Sps. Aguilar. 

• Petitioners were negligent in maintaining a structurally dangerous counter [it's shaped like an inverted L; the top is wider than the base; weight of the upper portion not evenly distributed nor supported by the narrow base]. Two former employees brought this to the attention of the management but the latter ignored their concern. CA said the incident could have been avoided had petitioners repaired this defective counter. The contention that it has been there for a long time without a prior incident is immaterial. 
• Zhieneth was incapable of negligence or other tort.
• Criselda was absolved of any negligence.
• Testimony of Gonzales (former employee) given credit
• Awarded actual damages, compensatory damages [denied award of funeral expenses for lack of proof to substantiate it]

CA denied petitioners' MfR, so they are now seeking the reversal of said decision, saying that since the action is based on tort, any finding of negligence on the part of Sps. Aguilar would negate their claim for damages, where said negligence was the proximate cause of the injury sustained. They also assailed the testimony of Gonzales who was already separated from the store (tarnished by ill-feelings and all).

Issues and Holding

1. WON Zhieneth's death was accidental or attributable to negligence. ATTRIBUTABLE TO NEGLIGENCE
2. WON negligence was attributable to petitioners [for maintaining a defective counter] or to Sps. Aguilar [for failing to exercise due and reasonable care while inside the store]. FAULT OF PETITIONERS

Ratio

Accident v. Negligence - they are intrinsically contradictory

• ACCIDENT pertains to an unforeseen event in which no fault or negligence attaches to defendant (or if it happens wholly or partly through human agency, it is an event which under the circumstances is unusual or unexpected by the person to whom it happens); there is exercise of ordinary care here
• NEGLIGENCE is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would not do
• • Alternatively, it is the failure to observe, for the protection of another person's interest, that degree of care, precaution and vigilance which the circumstances justly demand, whereby such other person suffers injury

Picart v. Smith lays down the test to determine WON negligence exists: Did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinary prudent person would have used in the same situation? If not, he is guilty of negligence.

SC found that Zhieneth performed no act that facilitated her death. Basis is her statement to the doctor as related by former employee Gonzales. It was made part of the res gestae since she made the statement immediately subsequent to the startling occurrence. It is axiomatic that matters relating to declarations of pain or suffering and statements made to a physician are generally considered declarations and admissions. Also, the court considered the fact that Zhieneth was of a tender age (and in so much pain!), so it would be unthinkable that she would lie.

Other findings:

• Petitioners were informed of the danger posed by the unstable counter, yet they did not act on the matter, so they failed to discharge the due diligence required of a good father of a family.
• They failed to establish that the testimonies of former employees were biased.
• Conclusive presumption that children below 9 are incapable of contributory negligence is applied.
• • Judge Sangco [book author] says that children below 9 is conclusively presumed to have acted without discernment, and are exempt from criminal liability. Since negligence may be a felony and a QD, it required discernment as a condition of liability, so therefore, said children are presumed to be incapable of negligence.
  • Even if contributory negligence would be attributed to Zhieneth, no injury should have occurred if petitioners' theory that the counter is stable and sturdy is to be believed.
• Criselda is absolved from any contributory negligence, since it was reasonable for her to let go of her child to sign a slip.
• Zhieneth was just a foot away from her mother, and the counter was just four meters away from Criselda (contrary to statements that Zhieneth was loitering at that time).

Heirs of Completo v. Albayda, Jr.

Heirs of Redentor Completo, and Elpidio Abiad v. Sgt. Amando Albayda, Jr.

2010 / Nachura [Negilgence > Standard of conduct > Special circumstance]

Facts

Albayda is a Master Sergeant of the PH Air Force, and Completo was the taxi driver of a Toyota Corolla which was owned by Abiad. Albayda was riding a bike on his way to the office, when Completo's taxi bumped and sideswept him, causing serious physical injuries. He [Albayda] was brought to the PH Air Force General Hospital, but he was transferred to the AFP Medical Center because he sustained a fracture and there was no orthopedic doctor available in the first hospital. He was confined from 27 Aug 1997 to 11 Feb 1998, and again in 23 Feb to 22 Mar 1998 [approx. 7 months].

     Conciliation before the barangay failed, so Albayda filed a complaint for physical injuries through reckless imprudence against Completo before the Office of the City Prosecutor of Pasay. Completo filed a counter-charge of damage to property through reckless imprudence against Albayda. The Office of the City Prosecutor recommended the filing of an information for Albayda's complaint, and Completo's complaint [against Albayda] was dismissed. Albayda manifested his reservation to file a separate civil action for damages against Completo and Abiad.

     Albayda alleged that Completo's negligence is the proximate cause of the incident. He demanded the following damages and their respective amounts: Actual damages - 276,550; Moral damages - 600,000; Exemplary damages - 200,000; Attorney's fees - 25,000 + 1,000 per court appearance. 

     On the other hand, Completo alleged that he was carefully driving the taxicab when he heard a strange sound from the taxicab's rear right side. He found Albayda lying on the road, holding his left leg, so he brought Albayda to PH Air Force General Hospital. Completo asserted that he was an experienced driver, and that he already reduced his speed to 20km even before reaching the intersection. In contrast, Albayda rode his bicycle at high speed, causing him to lose control of the bicycle. Completo said that Albayda had no cause of action.

     Several people testified for each side, but here are some notes on the testimony of the owner of the taxi driver, Abiad. Abiad said that aside from being a soldier, he also held franchises of taxicabs and passenger jeepneys, and being a taxicab operator, he would wake up early to personally check the taxicabs. When Completo applied as a taxicab driver, Abiad required him to show his bio-data, NBI clearance, and driver's license. Completo never figured in a vehicular accident since he was employed, and according to Abiad, he [Completo] was a good driver and good man.

     RTC rendered judgment in favor of Albayda, and the defendants are ordered to pay actual [46k] and moral [400k] damages, and attorney's fees [25k]. Upon appeal at the CA, the court affirmed RTC's decision with modifications [no more actual damages; awarded temperate damages [40k]; moral damages only 200k; Completo and Abiad are solidarily liable to pay Albayda; added legal interest].

Issues and Holding

1. WON CA erred in finding that Completo was the one who caused the collision. NO
2. WON Abiad failed to prove that he observed the diligence of a good father of the family. YES
3. WON the award of moral and temperate damages and attorney's fees for Albayda had no basis. NO / NO / YES

Ratio

On Negligence

It is a rule in negligence suits that the plaintiff has the burden of proving by a preponderance of evidence the motorist's breach in his duty of care owed to the plaintiff, that the motorist was negligent in failing to exercise the diligence required to avoid injury to the plaintiff, and that such negligence was the proximate cause of the injury suffered. NCC 2176 quoted, and said that the question of the motorist's negligence is a question of fact. Usually, more will be required of a motorist [25mi/hr = 37ft/sec] than a bicyclist [10mi/hr = 15ft/sec] in discharging the duty of care because of the physical advantages the former has over the latter.

It was proven by a preponderance of evidence that Completo failed to exercise reasonable diligence.

• He was overspeeding at the time he hit Albayda's bicycle; he did not slow down even when he approached the intersection
• Such negligence was the sole and proximate cause of the injuries sustained by Albayda
• It was proven that Albayda had the right of way since he reached the intersection ahead of Completo

NCC 2180 cited - obligation imposed by NCC 2176 is demandable also for those persons for whom one is responsible. Employers are liable for damage caused by employees, but the responsibility ceases upon proof that employers observed the diligence of the good father of the family in the selection and supervision of employees. The burden of proof is on the employer. The responsibility of two or more persons who are liable for QD is solidary. The employer's civil liability for his employee's negligent acts is also primary and direct, owing to his own negligence in selecting and supervising them, and this liability attaches even if the employer is not in the vehicle at the time of collision.

     In the selection of employees, employers are required to examine them as to their qualifications, experience, and service records. With respect to supervision, employers should formulate SOPs and monitor their implementation, and impose disciplinary measures for breaches. To establish these factors in a trial involving the issue of vicarious [secondary] liability, employers must submit concrete proof, including documentary evidence. 

ABIAD'S EVIDENCE CONSISTED ENTIRELY OF TESTIMONIAL EVIDENCE, AND THIS IS INSUFFICIENT TO OVERCOME THE LEGAL PRESUMPTION THAT HE WAS NEGLIGENT IN THE SELECTION AND SUPERVISION OF COMPLETO.

On Damages

CA rightfully deleted the award of actual damages because Albayda failed to present documentary evidence to establish the amount incurred. Temperate damages may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot be proved with certainty. Moral damages are awarded in QDs causing physical injuries, so the award is proper. The award of attorney's fees is deleted for failure to prove that petitioners acted in bad faith in refusing to satisfy respondent's just and valid claim.

Consolidated Bank v. CA

Consolidated Bank and Trust Corp. v. CA + L.C. Diaz and Company (2003) / Carpio

Facts

LC Diaz [professional partnership engaged in accounting] opened a savings account with Solidbank. LC Diaz's cashier, Macaraya, filled up two savings deposit slips, and she gave them + passbook to messenger Calapre and instructed him to deposit the money with Solidbank. Calapre presented the deposit slips and passbook to the teller. He left the passbook with Solidbank first as he had to make another deposit at Allied Bank, but when he returned, he was informed that somebody got the passbook. Calapre reported this to Macaraya. Macaraya + Calapre went back to Solidbank with a deposit slip [P200k check]. When Macaraya asked about the passbook, the teller said that someone shorter than Calapre got it. Macaraya reported this matter. 

     The following day, CEO Diaz called Solidbank to stop any transaction using the passbook until the company could open a new account. It was found out that learned that P300k was withdrawn from the account the previous day. The withdrawal slip bore the signatures of two authorized signatories of LC Diaz but they denied signing it. Noel Tamayo received this sum of money.

     An information for Estafa through Falsification of Commercial Document was filed against one of their messengers (Ilagan) and one Roscoe Verdazola (first time they appeared in the case discussion), but the RTC dismissed the criminal case. LC Diaz demanded the return of their money from Solidbank, but the latter refused and a complaint for recovery of a sum of money was filed against them. However, Solidbank was absolved.

    RTC applied rules on savings account written on the passbook ["Possession of this book shall raise the presumption of ownership and any payment or payments made by the bank upon the production of the said book and entry therein of the withdrawal shall have the same effect as if made to the depositor personally."] RTC said that the burden of proof shifted to LC Diaz to prove that the signatures are not forged. Also, they applied the rule that the holder of the passport is presumed to be the owner. It was also held that Solidbank did not have any participation in the custody and care of the passbook and as such, their act of allowing the withdrawal was not the proximate cause of the loss. The proximate cause was LC Diaz’ negligence. As regards the contention that LC Diaz and Solidbank had precautionary procedures (like a secret handshake of sorts) whenever the former withdrew a large sum, RTC pointed out that LC Diaz disregarded this in the past withdrawal.

     CA, on the other hand, said that the proximate cause of the unauthorized withdrawal is Solidbank's negligence, applying NCC 2176. CA said the 3 elements of QD are present [damages; fault or negligence; connection of cause and effect]. The teller could have called up LC Diaz since the amount being drawn was significant. Proximate cause is teller's failure to call LC Diaz. CA ruled that while LC Diaz was negligent in entrusting its deposits to its messenger and its messenger in leaving the passbook with the teller, Solidbank could not escape liability because of the doctrine of “last clear chance.” Solidbank could have averted the injury had it called up LC Diaz to verify the withdrawal.

RATIO

On Solidbank's fiduciary duty under the law

SC says that Solidbank is liable for breach of K due to negligence [culpa contractual]. K [savings deposit agreement] between bank and depositor governed by provisions on simple loan; bank is the debtor and depositor is the creditor. Banks are under obligation to treat accounts of depositors with meticulous care [higher than diligence of a good father of a family standard], bearing in mind the fiduciary nature of their relationship. The bank's obligation to observe high standards of integrity and performance is deemed written in every deposit agreement. However, this nature does not convert K from a simple loan to a trust agreement (failure by bank to pay depositor is failure to pay a simple loan only).

Solidbank's breach of K-tual obligation

For breach of the savings deposit agreement due to negligence, or culpa contractual, the bank is liable to its depositor. When the passbook is in the possession of Solidbank’s tellers during withdrawals, the law imposes an even higher degree of diligence. Likewise, tellers must exercise a high degree of diligence in insuring that they return the passbook only to the depositor or authorized representative.

     In culpa contractual, once the plaintiff proves a breach of contract, there is a presumption that the defendant was at fault or negligent. The burden is on the defendant to prove that he was not at fault or negligent. In culpa aquiliana, the plaintiff has the burden of proof. Solidbank failed to discharge this burden, after LC Diaz establishing the breach of K-tual obligation. Hence, Solidbank is bound by the negligence of its employees. The defense of exercising required diligence in selecting, supervising employees is NOT a complete defense in culpa contractual, unlike in culpa aquiliana.

Proximate cause of unauthorized withdrawal

Solidbank’s negligence in not returning the passbook to Calapre was the proximate cause. [Definition: 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.]

     RTC said that LC Diaz’ negligence was the proximate cause. However, SC says LC Diaz was not at fault that the passbook landed in the hands of the impostor. In fact, it was in the possession of the bank while the deposit was being processed. CA said that teller's failure to call LC Diaz was the proximate cause. SC says the bank did not have the duty to call LC Diaz to confirm withdrawal.

Doctrine of last clear chance

"Where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the loss."

     SC DOES NOT APPLY IT HERE. Solidbank is liable for breach of contract due to negligence in the performance of its contractual obligation to LC Diaz. This is a case of culpa contractual, where neither the contributory negligence of the plaintiff nor his last clear chance to avoid the loss, would exonerate the defendant from liability. Since LC Diaz was guilty of contributory negligence, Solidbank's liability should be reduced.