Torts Batch 2 Cases

1) Picart vs Smith

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-12219 March 15, 1918

AMADO PICART, plaintiff-appellant,

vs.
FRANK SMITH, JR., defendant-appellee.

Alejo Mabanag for appellant.

G. E. Campbell for appellee.

STREET, J.:

In this action the plaintiff, Amado Picart, seeks to recover of the defendant, Frank Smith, jr., the sum
of P31,000, as damages alleged to have been caused by an automobile driven by the defendant.
From a judgment of the Court of First Instance of the Province of La Union absolving the defendant
from liability the plaintiff has appealed.

The occurrence which gave rise to the institution of this action took place on December 12, 1912, on
the Carlatan Bridge, at San Fernando, La Union. It appears that upon the occasion in question the
plaintiff was riding on his pony over said bridge. Before he had gotten half way across, the defendant
approached from the opposite direction in an automobile, going at the rate of about ten or twelve
miles per hour. As the defendant neared the bridge he saw a horseman on it and blew his horn to
give warning of his approach. He continued his course and after he had taken the bridge he gave
two more successive blasts, as it appeared to him that the man on horseback before him was not
observing the rule of the road.

The plaintiff, it appears, saw the automobile coming and heard the warning signals. However, being
perturbed by the novelty of the apparition or the rapidity of the approach, he pulled the pony closely
up against the railing on the right side of the bridge instead of going to the left. He says that the
reason he did this was that he thought he did not have sufficient time to get over to the other side.
The bridge is shown to have a length of about 75 meters and a width of 4.80 meters. As the
automobile approached, the defendant guided it toward his left, that being the proper side of the
road for the machine. In so doing the defendant assumed that the horseman would move to the
other side. The pony had not as yet exhibited fright, and the rider had made no sign for the
automobile to stop. Seeing that the pony was apparently quiet, the defendant, instead of veering to
the right while yet some distance away or slowing down, continued to approach directly toward the
horse without diminution of speed. When he had gotten quite near, there being then no possibility of
the horse getting across to the other side, the defendant quickly turned his car sufficiently to the right
to escape hitting the horse alongside of the railing where it as then standing; but in so doing the
automobile passed in such close proximity to the animal that it became frightened and turned its
body across the bridge with its head toward the railing. In so doing, it as struck on the hock of the left
hind leg by the flange of the car and the limb was broken. The horse fell and its rider was thrown off
with some violence. From the evidence adduced in the case we believe that when the accident
occurred the free space where the pony stood between the automobile and the railing of the bridge
was probably less than one and one half meters. As a result of its injuries the horse died. The
plaintiff received contusions which caused temporary unconsciousness and required medical
attention for several days.

The question presented for decision is whether or not the defendant in maneuvering his car in the
manner above described was guilty of negligence such as gives rise to a civil obligation to repair the
damage done; and we are of the opinion that he is so liable. As the defendant started across the
bridge, he had the right to assume that the horse and the rider would pass over to the proper side;
but as he moved toward the center of the bridge it was demonstrated to his eyes that this would not
be done; and he must in a moment have perceived that it was too late for the horse to cross with
safety in front of the moving vehicle. In the nature of things this change of situation occurred while
the automobile was yet some distance away; and from this moment it was not longer within the
power of the plaintiff to escape being run down by going to a place of greater safety. The control of
the situation had then passed entirely to the defendant; and it was his duty either to bring his car to
an immediate stop or, seeing that there were no other persons on the bridge, to take the other side
and pass sufficiently far away from the horse to avoid the danger of collision. Instead of doing this,
the defendant ran straight on until he was almost upon the horse. He was, we think, deceived into
doing this by the fact that the horse had not yet exhibited fright. But in view of the known nature of
horses, there was an appreciable risk that, if the animal in question was unacquainted with
automobiles, he might get exited and jump under the conditions which here confronted him. When
the defendant exposed the horse and rider to this danger he was, in our opinion, negligent in the eye
of the law.

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

The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in
the particular case. Abstract speculations cannot here be of much value but this much can be
profitably said: Reasonable men govern their conduct by the circumstances which are before them
or known to them. They are not, and are not supposed to be, omniscient of the future. Hence they
can be expected to take care only when there is something before them to suggest or warn of
danger. Could a prudent man, in the case under consideration, foresee harm as a result of the
course actually pursued? If so, it was the duty of the actor to take precautions to guard against that
harm. Reasonable foresight of harm, followed by ignoring of the suggestion born of this prevision, is
always necessary before negligence can be held to exist. Stated in these terms, the proper criterion
for determining the existence of negligence in a given case is this: Conduct is said to be negligent
when a prudent man in the position of the tortfeasor would have foreseen that an effect harmful to
another was sufficiently probable to warrant his foregoing conduct or guarding against its
consequences.
Applying this test to the conduct of the defendant in the present case we think that negligence is
clearly established. A prudent man, placed in the position of the defendant, would in our opinion,
have recognized that the course which he was pursuing was fraught with risk, and would therefore
have foreseen harm to the horse and the rider as reasonable consequence of that course. Under
these circumstances the law imposed on the defendant the duty to guard against the threatened
harm.

It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent
negligence in planting himself on the wrong side of the road. But as we have already stated, the
defendant was also negligent; and in such case the problem always is to discover which agent is
immediately and directly responsible. It will be noted that the negligent acts of the two parties were
not contemporaneous, since the negligence of the defendant succeeded the negligence of the
plaintiff by an appreciable interval. Under these circumstances the law is that the person who has
the last fair chance to avoid the impending harm and fails to do so is chargeable with the
consequences, without reference to the prior negligence of the other party.

The decision in the case of Rkes vs. Atlantic, Gulf and Pacific Co. (7 Phil. Rep., 359) should perhaps
be mentioned in this connection. This Court there held that while contributory negligence on the part
of the person injured did not constitute a bar to recovery, it could be received in evidence to reduce
the damages which would otherwise have been assessed wholly against the other party. The
defendant company had there employed the plaintiff, as a laborer, to assist in transporting iron rails
from a barge in Manila harbor to the company's yards located not far away. The rails were conveyed
upon cars which were hauled along a narrow track. At certain spot near the water's edge the track
gave way by reason of the combined effect of the weight of the car and the insecurity of the road
bed. The car was in consequence upset; the rails slid off; and the plaintiff's leg was caught and
broken. It appeared in evidence that the accident was due to the effects of the typhoon which had
dislodged one of the supports of the track. The court found that the defendant company was
negligent in having failed to repair the bed of the track and also that the plaintiff was, at the moment
of the accident, guilty of contributory negligence in walking at the side of the car instead of being in
front or behind. It was held that while the defendant was liable to the plaintiff by reason of its
negligence in having failed to keep the track in proper repair nevertheless the amount of the
damages should be reduced on account of the contributory negligence in the plaintiff. As will be
seen the defendant's negligence in that case consisted in an omission only. The liability of the
company arose from its responsibility for the dangerous condition of its track. In a case like the one
now before us, where the defendant was actually present and operating the automobile which
caused the damage, we do not feel constrained to attempt to weigh the negligence of the respective
parties in order to apportion the damage according to the degree of their relative fault. It is enough to
say that the negligence of the defendant was in this case the immediate and determining cause of
the accident and that the antecedent negligence of the plaintiff was a more remote factor in the case.

A point of minor importance in the case is indicated in the special defense pleaded in the defendant's
answer, to the effect that the subject matter of the action had been previously adjudicated in the
court of a justice of the peace. In this connection it appears that soon after the accident in question
occurred, the plaintiff caused criminal proceedings to be instituted before a justice of the peace
charging the defendant with the infliction of serious injuries (lesiones graves). At the preliminary
investigation the defendant was discharged by the magistrate and the proceedings were dismissed.
Conceding that the acquittal of the defendant at the trial upon the merits in a criminal prosecution for
the offense mentioned would be res adjudicata upon the question of his civil liability arising from
negligence -- a point upon which it is unnecessary to express an opinion -- the action of the justice of
the peace in dismissing the criminal proceeding upon the preliminary hearing can have no effect.
(See U. S. vs. Banzuela and Banzuela, 31 Phil. Rep., 564.)
From what has been said it results that the judgment of the lower court must be reversed, and
judgment is her rendered that the plaintiff recover of the defendant the sum of two hundred pesos
(P200), with costs of other instances. The sum here awarded is estimated to include the value of the
horse, medical expenses of the plaintiff, the loss or damage occasioned to articles of his apparel,
and lawful interest on the whole to the date of this recovery. The other damages claimed by the
plaintiff are remote or otherwise of such character as not to be recoverable. So ordered.

Arellano, C.J., Torres, Carson, Araullo, Avanceña, and Fisher, JJ., concur.
Johnson, J., reserves his vote.

Separate Opinions

MALCOLM, J., concurring:

After mature deliberation, I have finally decided to concur with the judgment in this case. I do so
because of my understanding of the "last clear chance" rule of the law of negligence as particularly
applied to automobile accidents. This rule cannot be invoked where the negligence of the plaintiff is
concurrent with that of the defendant. Again, if a traveler when he reaches the point of collision is in
a situation to extricate himself and avoid injury, his negligence at that point will prevent a recovery.
But Justice Street finds as a fact that the negligent act of the interval of time, and that at the moment
the plaintiff had no opportunity to avoid the accident. Consequently, the "last clear chance" rule is
applicable. In other words, when a traveler has reached a point where he cannot extricate himself
and vigilance on his part will not avert the injury, his negligence in reaching that position becomes
the condition and not the proximate cause of the injury and will not preclude a recovery. (Note
especially Aiken vs. Metcalf [1917], 102 Atl., 330.)

The Lawphil Project - Arellano Law Foundation

2) PBC vs CA GR No. 97626

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 97626 March 14, 1997

PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE COMMERCIAL
INTERNATIONAL BANK, ROGELIO LACSON, DIGNA DE LEON, MARIA ANGELITA PASCUAL,
et al., petitioners,
vs.
THE COURT OF APPEALS, ROMMEL'S MARKETING CORP., represented by ROMEO LIPANA,
its President & General Manager, respondents.

HERMOSISIMA, JR., J.:

Challenged in this petition for review is the Decision dated February 28, 19911 rendered by public
respondent Court of Appeals which affirmed the Decision dated November 15, 1985 of the Regional
Trial Court, National Capital Judicial Region, Branch CLX (160), Pasig City, in Civil Case No. 27288
entitled "Rommel's Marketing Corporation, etc. v. Philippine Bank of Commerce, now absorbed by
Philippine Commercial and Industrial Bank."

The case stemmed from a complaint filed by the private respondent Rommel's Marketing
Corporation (RMC for brevity), represented by its President and General Manager Romeo Lipana, to
recover from the former Philippine Bank of Commerce (PBC for brevity), now absorbed by the
Philippine Commercial International Bank, the sum of P304,979.74 representing various deposits it
had made in its current account with said bank but which were not credited to its account, and were
instead deposited to the account of one Bienvenido Cotas, allegedly due to the gross and
inexcusable negligence of the petitioner bank.

RMC maintained two (2) separate current accounts, Current Account Nos. 53-01980-3 and 53-
01748-7, with the Pasig Branch of PBC in connection with its business of selling appliances.

In the ordinary and usual course of banking operations, current account deposits are accepted by
the bank on the basis of deposit slips prepared and signed by the depositor, or the latter's agent or
representative, who indicates therein the current account number to which the deposit is to be
credited, the name of the depositor or current account holder, the date of the deposit, and the
amount of the deposit either in cash or checks. The deposit slip has an upper portion or stub, which
is detached and given to the depositor or his agent; the lower portion is retained by the bank. In
some instances, however, the deposit slips are prepared in duplicate by the depositor. The original
of the deposit slip is retained by the bank, while the duplicate copy is returned or given to the
depositor.

From May 5, 1975 to July 16, 1976, petitioner Romeo Lipana claims to have entrusted RMC funds in
the form of cash totalling P304,979.74 to his secretary, Irene Yabut, for the purpose of depositing
said funds in the current accounts of RMC with PBC. It turned out, however, that these deposits, on
all occasions, were not credited to RMC's account but were instead deposited to Account No. 53-
01734-7 of Yabut's husband, Bienvenido Cotas who likewise maintains an account with the same
bank. During this period, petitioner bank had, however, been regularly furnishing private respondent
with monthly statements showing its current accounts balances. Unfortunately, it had never been the
practice of Romeo Lipana to check these monthly statements of account reposing complete trust
and confidence on petitioner bank.

Irene Yabut's modus operandi is far from complicated. She would accomplish two (2) copies of the
deposit slip, an original and a duplicate. The original showed the name of her husband as depositor
and his current account number. On the duplicate copy was written the account number of her
husband but the name of the account holder was left blank. PBC's teller, Azucena Mabayad, would,
however, validate and stamp both the original and the duplicate of these deposit slips retaining only
the original copy despite the lack of information on the duplicate slip. The second copy was kept by
Irene Yabut allegedly for record purposes. After validation, Yabut would then fill up the name of RMC
in the space left blank in the duplicate copy and change the account number written thereon, which
is that of her husband's, and make it appear to be RMC's account number, i.e., C.A. No. 53-01980-3.
With the daily remittance records also prepared by Ms. Yabut and submitted to private respondent
RMC together with the validated duplicate slips with the latter's name and account number, she
made her company believe that all the while the amounts she deposited were being credited to its
account when, in truth and in fact, they were being deposited by her and credited by the petitioner
bank in the account of Cotas. This went on in a span of more than one (1) year without private
respondent's knowledge.

Upon discovery of the loss of its funds, RMC demanded from petitioner bank the return of its money,
but as its demand went unheeded, it filed a collection suit before the Regional Trial Court of Pasig,
Branch 160. The trial court found petitioner bank negligent and ruled as follows:

WHEREFORE, judgment is hereby rendered sentencing defendant Philippine Bank

of Commerce, now absorbed by defendant Philippine Commercial & Industrial Bank,
and defendant Azucena Mabayad to pay the plaintiff, jointly and severally, and
without prejudice to any criminal action which may be instituted if found warranted:

1. The sum of P304,979.72, representing plaintiffs lost deposit, plus interest thereon
at the legal rate from the filing of the complaint;

2. A sum equivalent to 14% thereof, as exemplary damages;

3. A sum equivalent to 25% of the total amount due, as and for attorney's fees; and

4. Costs.

Defendants' counterclaim is hereby dismissed for lack of merit.2

On appeal, the appellate court affirmed the foregoing decision with modifications, viz:

WHEREFORE, the decision appealed from herein is MODIFIED in the sense that the
awards of exemplary damages and attorney's fees specified therein are eliminated
and instead, appellants are ordered to pay plaintiff, in addition to the principal sum of
P304,979.74 representing plaintiff's lost deposit plus legal interest thereon from the
filing of the complaint, P25,000.00 attorney's fees and costs in the lower court as well
as in this Court.3

Hence, this petition anchored on the following grounds:

1) The proximate cause of the loss is the negligence of respondent Rommel

Marketing Corporation and Romeo Lipana in entrusting cash to a dishonest
employee.

2) The failure of respondent Rommel Marketing Corporation to cross-check the

bank's statements of account with its own records during the entire period of more
than one (1) year is the proximate cause of the commission of subsequent frauds
and misappropriation committed by Ms. Irene Yabut.
 3) The duplicate copies of the deposit slips presented by respondent Rommel
Marketing Corporation are falsified and are not proof that the amounts appearing
thereon were deposited to respondent Rommel Marketing Corporation's account with
the bank,

4) The duplicate copies of the deposit slips were used by Ms. Irene Yabut to cover up
her fraudulent acts against respondent Rommel Marketing Corporation, and not as
records of deposits she made with the bank.4

The petition has no merit.

Simply put, the main issue posited before us is: What is the proximate cause of the loss, to the tune
of P304,979.74, suffered by the private respondent RMC — petitioner bank's negligence or that of
private respondent's?

Petitioners submit that the proximate cause of the loss is the negligence of respondent RMC and
Romeo Lipana in entrusting cash to a dishonest employee in the person of Ms. Irene
Yabut.5 According to them, it was impossible for the bank to know that the money deposited by Ms.
Irene Yabut belong to RMC; neither was the bank forewarned by RMC that Yabut will be depositing
cash to its account. Thus, it was impossible for the bank to know the fraudulent design of Yabut
considering that her husband, Bienvenido Cotas, also maintained an account with the bank. For the
bank to inquire into the ownership of the cash deposited by Ms. Irene Yabut would be irregular.
Otherwise stated, it was RMC's negligence in entrusting cash to a dishonest employee which
provided Ms. Irene Yabut the opportunity to defraud RMC.6

Private respondent, on the other hand, maintains that the proximate cause of the loss was the
negligent act of the bank, thru its teller Ms. Azucena Mabayad, in validating the deposit slips, both
original and duplicate, presented by Ms. Yabut to Ms. Mabayad, notwithstanding the fact that one of
the deposit slips was not completely accomplished.

We sustain the private respondent.

Our law on quasi-delicts states:

Art. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.

There are three elements of a quasi-delict: (a) damages suffered by the plaintiff; (b) fault or
negligence of the defendant, or some other person for whose acts he must respond; and (c) the
connection of cause and effect between the fault or negligence of the defendant and the damages
incurred by the plaintiff.7

In the case at bench, there is no dispute as to the damage suffered by the private respondent
(plaintiff in the trial court) RMC in the amount of P304,979.74. It is in ascribing fault or negligence
which caused the damage where the parties point to each other as the culprit.

Negligence is the omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would do. The seventy-eight (78)-year-old, yet still
relevant, case of Picart v. Smith,8 provides the test by which to determine the existence of
negligence in a particular case which may be stated as follows: Did the defendant in doing the
alleged negligent act use that reasonable care and caution which an ordinarily prudent person would
have used in the same situation? If not, then he is guilty of negligence. The law here in effect adopts
the standard supposed to be supplied by the imaginary conduct of the discreet paterfamilias of the
Roman law. The existence of negligence in a given case is not determined by reference to the
personal judgment of the actor in the situation before him. The law considers what would be
reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence and determines
liability by that.

Applying the above test, it appears that the bank's teller, Ms. Azucena Mabayad, was negligent in
validating, officially stamping and signing all the deposit slips prepared and presented by Ms. Yabut,
despite the glaring fact that the duplicate copy was not completely accomplished contrary to the self-
imposed procedure of the bank with respect to the proper validation of deposit slips, original or
duplicate, as testified to by Ms. Mabayad herself, thus:

Q: Now, as teller of PCIB, Pasig Branch, will you please tell us Mrs.
Mabayad your important duties and functions?

A: I accept current and savings deposits from depositors and

encashments.

Q: Now in the handling of current account deposits of bank clients,

could you tell us the procedure you follow?

A: The client or depositor or the authorized representative prepares a

deposit slip by filling up the deposit slip with the name, the account
number, the date, the cash breakdown, if it is deposited for cash, and
the check number, the amount and then he signs the deposit slip.

Q: Now, how many deposit slips do you normally require in

accomplishing current account deposit, Mrs. Mabayad?

A: The bank requires only one copy of the deposit although some of
our clients prepare the deposit slip in duplicate.

Q: Now in accomplishing current account deposits from your clients,

what do you issue to the depositor to evidence the deposit made?

A: We issue or we give to the clients the depositor's stub as a receipt

of the deposit.

Q: And who prepares the deposit slip?

A: The depositor or the authorized representative sir?

Q: Where does the depositor's stub comes (sic) from Mrs. Mabayad,
is it with the deposit slip?

A: The depositor's stub is connected with the deposit slip or the

bank's copy. In a deposit slip, the upper portion is the depositor's stub
 and the lower portion is the bank's copy, and you can detach the
bank's copy from the depositor's stub by tearing it sir.

Q: Now what do you do upon presentment of the deposit slip by the

depositor or the depositor's authorized representative?

A: We see to it that the deposit slip9 is properly accomplished and

then we count the money and then we tally it with the deposit slip sir.

Q: Now is the depositor's stub which you issued to your clients

validated?

A: Yes, sir. 10 [Emphasis ours]

Clearly, Ms. Mabayad failed to observe this very important procedure. The fact that the
duplicate slip was not compulsorily required by the bank in accepting deposits should not
relieve the petitioner bank of responsibility. The odd circumstance alone that such duplicate
copy lacked one vital information — that of the name of the account holder — should have
already put Ms. Mabayad on guard. Rather than readily validating the incomplete duplicate
copy, she should have proceeded more cautiously by being more probing as to the true
reason why the name of the account holder in the duplicate slip was left blank while that in
the original was filled up. She should not have been so naive in accepting hook, line and
sinker the too shallow excuse of Ms. Irene Yabut to the effect that since the duplicate copy
was only for her personal record, she would simply fill up the blank space later on. 11 A
"reasonable man of ordinary prudence" 12 would not have given credence to such explanation
and would have insisted that the space left blank be filled up as a condition for validation.
Unfortunately, this was not how bank teller Mabayad proceeded thus resulting in huge losses
to the private respondent.

Negligence here lies not only on the part of Ms. Mabayad but also on the part of the bank itself in its
lackadaisical selection and supervision of Ms. Mabayad. This was exemplified in the testimony of Mr.
Romeo Bonifacio, then Manager of the Pasig Branch of the petitioner bank and now its Vice-
President, to the effect that, while he ordered the investigation of the incident, he never came to
know that blank deposit slips were validated in total disregard of the bank's validation
procedures, viz:

Q: Did he ever tell you that one of your cashiers affixed the stamp
mark of the bank on the deposit slips and they validated the same
with the machine, the fact that those deposit slips were unfilled up, is
there any report similar to that?

A: No, it was not the cashier but the teller.

Q: The teller validated the blank deposit slip?

A: No it was not reported.

Q: You did not know that any one in the bank tellers or cashiers
validated the blank deposit slip?

A: I am not aware of that.

 Q: It is only now that you are aware of that?

A: Yes, sir. 13

Prescinding from the above, public respondent Court of Appeals aptly observed:

xxx xxx xxx

It was in fact only when he testified in this case in February, 1983, or after the lapse
of more than seven (7) years counted from the period when the funds in question
were deposited in plaintiff's accounts (May, 1975 to July, 1976) that bank manager
Bonifacio admittedly became aware of the practice of his teller Mabayad of validating
blank deposit slips. Undoubtedly, this is gross, wanton, and inexcusable negligence
in the appellant bank's supervision of its employees. 14

It was this negligence of Ms. Azucena Mabayad, coupled by the negligence of the petitioner bank in
the selection and supervision of its bank teller, which was the proximate cause of the loss suffered
by the private respondent, and not the latter's act of entrusting cash to a dishonest employee, as
insisted by the petitioners.

Proximate cause is determined on the facts of each case upon mixed considerations of logic,
common sense, policy and precedent. 15 Vda. de Bataclan v. Medina, 16 reiterated in the case of Bank
of the Phil. Islands v. Court of Appeals, 17 defines proximate cause 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. . . ." In this case, absent the act of Ms. Mabayad in
negligently validating the incomplete duplicate copy of the deposit slip, Ms. Irene Yabut would not
have the facility with which to perpetrate her fraudulent scheme with impunity. Apropos, once again,
is the pronouncement made by the respondent appellate court, to wit:

. . . . Even if Yabut had the fraudulent intention to misappropriate the funds entrusted
to her by plaintiff, she would not have been able to deposit those funds in her
husband's current account, and then make plaintiff believe that it was in the latter's
accounts wherein she had deposited them, had it not been for bank teller Mabayad's
aforesaid gross and reckless negligence. The latter's negligence was thus the
proximate, immediate and efficient cause that brought about the loss claimed by
plaintiff in this case, and the failure of plaintiff to discover the same soon enough by
failing to scrutinize the monthly statements of account being sent to it by appellant
bank could not have prevented the fraud and misappropriation which Irene Yabut
had already completed when she deposited plaintiff's money to the account of her
husband instead of to the latter's accounts. 18

Furthermore, under the doctrine of "last clear chance" (also referred to, at times as "supervening
negligence" or as "discovered peril"), petitioner bank was indeed the culpable party. This doctrine, in
essence, states that where both parties are negligent, but the negligent act of one is appreciably
later in time than that of the other, or when it is impossible to determine whose fault or negligence
should be attributed to the incident, the one who had the last clear opportunity to avoid the
impending harm and failed to do so is chargeable with the consequences thereof. 19Stated differently,
the rule would also mean that an antecedent negligence of a person does not preclude the recovery
of damages for the supervening negligence of, or bar a defense against liability sought by another, if
the latter, who had the last fair chance, could have avoided the impending harm by the exercise of
due diligence. 20Here, assuming that private respondent RMC was negligent in entrusting cash to a
dishonest employee, thus providing the latter with the opportunity to defraud the company, as
advanced by the petitioner, yet it cannot be denied that the petitioner bank, thru its teller, had the last
clear opportunity to avert the injury incurred by its client, simply by faithfully observing their self-
imposed validation procedure.

At this juncture, it is worth to discuss the degree of diligence ought to be exercised by banks in
dealing with their clients.

The New Civil Code provides:

Art. 1173. The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence shows
bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be required.
(1104a)

In the case of banks, however, the degree of diligence required is more than that of a good father of
a family. Considering the fiduciary nature of their relationship with their depositors, banks are duty
bound to treat the accounts of their clients with the highest degree of care. 21

As elucidated in Simex International (Manila), Inc. v. Court of Appeals, 22 in every case, the depositor
expects the bank to treat his account with the utmost fidelity, whether such account consists only of
a few hundred pesos or of millions. The bank must record every single transaction accurately, down
to the last centavo, and as promptly as possible. This has to be done if the account is to reflect at
any given time the amount of money the depositor can dispose as he sees fit, confident that the
bank will deliver it as and to whomever he directs. A blunder on the part of the bank, such as the
failure to duly credit him his deposits as soon as they are made, can cause the depositor not a little
embarrassment if not financial loss and perhaps even civil and criminal litigation.

The point is that as a business affected with public interest and because of the nature of its
functions, the bank is under obligation to treat the accounts of its depositors with meticulous care,
always having in mind the fiduciary nature of their relationship. In the case before us, it is apparent
that the petitioner bank was remiss in that duty and violated that relationship.

Petitioners nevertheless aver that the failure of respondent RMC to cross-check the bank's
statements of account with its own records during the entire period of more than one (1) year is the
proximate cause of the commission of subsequent frauds and misappropriation committed by Ms.
Irene Yabut.

We do not agree.

While it is true that had private respondent checked the monthly statements of account sent by the
petitioner bank to RMC, the latter would have discovered the loss early on, such cannot be used by
the petitioners to escape liability. This omission on the part of the private respondent does not
change the fact that were it not for the wanton and reckless negligence of the petitioners' employee
in validating the incomplete duplicate deposit slips presented by Ms. Irene Yabut, the loss would not
have occurred. Considering, however, that the fraud was committed in a span of more than one (1)
year covering various deposits, common human experience dictates that the same would not have
been possible without any form of collusion between Ms. Yabut and bank teller Mabayad. Ms.
Mabayad was negligent in the performance of her duties as bank teller nonetheless. Thus, the
petitioners are entitled to claim reimbursement from her for whatever they shall be ordered to pay in
this case.

The foregoing notwithstanding, it cannot be denied that, indeed, private respondent was likewise
negligent in not checking its monthly statements of account. Had it done so, the company would
have been alerted to the series of frauds being committed against RMC by its secretary. The
damage would definitely not have ballooned to such an amount if only RMC, particularly Romeo
Lipana, had exercised even a little vigilance in their financial affairs. This omission by RMC amounts
to contributory negligence which shall mitigate the damages that may be awarded to the private
respondent 23 under Article 2179 of the New Civil Code, to wit:

. . . 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.

In view of this, we believe that the demands of substantial justice are satisfied by allocating
the damage on a 60-40 ratio. Thus, 40% of the damage awarded by the respondent
appellate court, except the award of P25,000.00 attorney's fees, shall be borne by private
respondent RMC; only the balance of 60% needs to be paid by the petitioners. The award of
attorney's fees shall be borne exclusively by the petitioners.

WHEREFORE, the decision of the respondent Court of Appeals is modified by reducing the amount
of actual damages private respondent is entitled to by 40%. Petitioners may recover from Ms.
Azucena Mabayad the amount they would pay the private respondent. Private respondent shall have
recourse against Ms. Irene Yabut. In all other respects, the appellate court's decision is AFFIRMED.

Proportionate costs.

SO ORDERED.

Bellosillo, Vitug and Kapunan, JJ., concur.

Separate Opinions

PADILLA, J., dissenting:

I regret that I cannot join the majority in ruling that the proximate cause of the damage suffered by
Rommel's Marketing Corporation (RMC) is mainly "the wanton and reckless negligence of the
petitioner's employee in validating the incomplete duplicate deposit slips presented by Ms. Irene
Yabut" (Decision, p. 15). Moreover, I find it difficult to agree with the ruling that "petitioners are
entitled to claim reimbursement from her (the bank teller) for whatever they shall be ordered to pay
in this case."

It seems that an innocent bank teller is being unduly burdened with what should fall on Ms. Irene
Yabut, RMC's own employee, who should have been charged with estafa or estafa through
falsification of private document. Interestingly, the records are silent on whether RMC had ever filed
any criminal case against Ms. Irene Yabut, aside from the fact that she does not appear to have
been impleaded even as a party defendant in any civil case for damages. Why is RMC insulating
Ms. Irene Yabut from liability when in fact she orchestrated the entire fraud on RMC, her employer?

To set the record straight, it is not completely accurate to state that from 5 May 1975 to 16 July
1976, Miss Irene Yabut had transacted with PCIB (then PBC) through only one teller in the person of
Azucena Mabayad. In fact, when RMC filed a complaint for estafa before the Office of the Provincial
Fiscal of Rizal, it indicted all the tellers of PCIB in the branch who were accused of conspiracy to
defraud RMC of its current account deposits. (See Annex B, Rollo p. 22 and 47).

Even private respondent RMC, in its Comment, maintains that "when the petitioner's tellers" allowed
Irene Yabut to carry out her modus operandi undetected over a period of one year, "their negligence
cannot but be gross." (Rollo, p. 55; see also Rollo pp. 58 to 59). This rules out the possibility that
there may have been some form of collusion between Yabut and bank teller Mabayad. Mabayad
was just unfortunate that private respondent's documentary evidence showed that she was the
attending teller in the bulk of Yabut's transactions with the bank.

Going back to Yabut's modus operandi, it is not disputed that each time Yabut would transact
business with PBC's tellers, she would accomplish two (2) copies of the current account deposit slip.
PBC's deposit slip, as issued in 1975, had two parts. The upper part was called the depositor's stub
and the lower part was called the bank copy. Both parts were detachable from each other. The
deposit slip was prepared and signed by the depositor or his representative, who indicated therein
the current account number to which the deposit was to be credited, the name of the depositor or
current account holder, the date of the deposit, and the amount of the deposit either in cash or in
checks. (Rollo, p. 137)

Since Yabut deposited money in cash, the usual bank procedure then was for the teller to count
whether the cash deposit tallied with the amount written down by the depositor in the deposit slip. If it
did, then the teller proceeded to verify whether the current account number matched with the current
account name as written in the deposit slip.

In the earlier days before the age of full computerization, a bank normally maintained a ledger which
served as a repository of accounts to which debits and credits resulting from transactions with the
bank were posted from books of original entry. Thus, it was only after the transaction was posted in
the ledger that the teller proceeded to machine validate the deposit slip and then affix his signature
or initial to serve as proof of the completed transaction.

It should be noted that the teller validated the depositor's stub in the upper portion and the bank copy
on the lower portion on both the original and duplicate copies of the deposit slips presented by
Yabut. The teller, however, detached the validated depositor's stub on the original deposit slip and
allowed Yabut to retain the whole validated duplicate deposit slip that bore the same account
number as the original deposit slip, but with the account name purposely left blank by Yabut, on the
assumption that it would serve no other purpose but for a personal record to complement the original
validated depositor's stub.

Thus, when Yabut wrote the name of RMC on the blank account name on the validated duplicate
copy of the deposit slip, tampered with its account number, and superimposed RMC's account
number, said act only served to cover-up the loss already caused by her to RMC, or after the deposit
slip was validated by the teller in favor of Yabut's husband. Stated otherwise, when there is a clear
evidence of tampering with any of the material entries in a deposit slip, the genuineness and due
execution of the document become an issue in resolving whether or not the transaction had been fair
and regular and whether the ordinary course of business had been followed by the bank.

It is logical, therefore, to conclude that the legal or proximate cause of RMC's loss was when Yabut,
its employee, deposited the money of RMC in her husband's name and account number instead of
that of RMC, the rightful owner of such deposited funds. Precisely, it was the criminal act of Yabut
that directly caused damage to RMC, her employer, not the validation of the deposit slip by the teller
as the deposit slip was made out by Yabut in her husband's name and to his account.

Even if the bank teller had required Yabut to completely fill up the duplicate deposit slip, the original
deposit slip would nonetheless still be validated under the account of Yabut's husband. In fine, the
damage had already been done to RMC when Yabut deposited its funds in the name and account
number of her husband with petitioner bank. It is then entirely left to speculation what Yabut would
have done afterwards — like tampering both the account number and the account name on the stub
of the original deposit slip and on the duplicate copy — in order to cover up her crime.

Under the circumstances in this case, there was no way for PBC's bank tellers to reasonably foresee
that Yabut might or would use the duplicate deposit slip to cover up her crime. In the first place, the
bank tellers were absolutely unaware that a crime had already been consummated by Yabut when
her transaction by her sole doing was posted in the ledger and validated by the teller in favor of her
husband's account even if the funds deposited belonged to RMC.

The teller(s) in this case were not in any way proven to be parties to the crime either as accessories
or accomplices. Nor could it be said that the act of posting and validation was in itself a negligent act
because the teller(s) simply had no choice but to accept and validate the deposit as written in the
original deposit slip under the account number and name of Yabut's husband. Hence, the act of
validating the duplicate copy was not the proximate cause of RMC's injury but merely a remote
cause which an independent cause or agency merely took advantage of to accomplish something
which was not the probable or natural effect thereof. That explains why Yabut still had to tamper with
the account number of the duplicate deposit slip after filling in the name of RMC in the blank space.

Coming now to the doctrine of "last clear chance," it is my considered view that the doctrine
assumes that the negligence of the defendant was subsequent to the negligence of the plaintiff and
the same must be the proximate cause of the injury. In short, there must be a last and
a clear chance, not a last possible chance, to avoid the accident or injury. It must have been a
chance as would have enabled a reasonably prudent man in like position to have acted effectively to
avoid the injury and the resulting damage to himself.

In the case at bar, the bank was not remiss in its duty of sending monthly bank statements to private
respondent RMC so that any error or discrepancy in the entries therein could be brought to the
bank's attention at the earliest opportunity. Private respondent failed to examine these bank
statements not because it was prevented by some cause in not doing so, but because it was
purposely negligent as it admitted that it does not normally check bank statements given by banks.

It was private respondent who had the last and clear chance to prevent any further misappropriation
by Yabut had it only reviewed the status of its current accounts on the bank statements sent to it
monthly or regularly. Since a sizable amount of cash was entrusted to Yabut, private respondent
should, at least, have taken ordinary care of its concerns, as what the law presumes. Its negligence,
therefore, is not contributory but the immediate and proximate cause of its injury.

I vote to grant the petition.

Separate Opinions

PADILLA, J., dissenting:

I regret that I cannot join the majority in ruling that the proximate cause of the damage suffered by
Rommel's Marketing Corporation (RMC) is mainly "the wanton and reckless negligence of the
petitioner's employee in validating the incomplete duplicate deposit slips presented by Ms. Irene
Yabut" (Decision, p. 15). Moreover, I find it difficult to agree with the ruling that "petitioners are
entitled to claim reimbursement from her (the bank teller) for whatever they shall be ordered to pay
in this case."

It seems that an innocent bank teller is being unduly burdened with what should fall on Ms. Irene
Yabut, RMC's own employee, who should have been charged with estafa or estafa through
falsification of private document. Interestingly, the records are silent on whether RMC had ever filed
any criminal case against Ms. Irene Yabut, aside from the fact that she does not appear to have
been impleaded even as a party defendant in any civil case for damages. Why is RMC insulating
Ms. Irene Yabut from liability when in fact she orchestrated the entire fraud on RMC, her employer?

To set the record straight, it is not completely accurate to state that from 5 May 1975 to 16 July
1976, Miss Irene Yabut had transacted with PCIB (then PBC) through only one teller in the person of
Azucena Mabayad. In fact, when RMC filed a complaint for estafa before the Office of the Provincial
Fiscal of Rizal, it indicted all the tellers of PCIB in the branch who were accused of conspiracy to
defraud RMC of its current account deposits. (See Annex B, Rollo p. 22 and 47).

Even private respondent RMC, in its Comment, maintains that "when the petitioner's tellers" allowed
Irene Yabut to carry out her modus operandi undetected over a period of one year, "their negligence
cannot but be gross." (Rollo, p. 55; see also Rollo pp. 58 to 59). This rules out the possibility that
there may have been some form of collusion between Yabut and bank teller Mabayad. Mabayad
was just unfortunate that private respondent's documentary evidence showed that she was the
attending teller in the bulk of Yabut's transactions with the bank.

Going back to Yabut's modus operandi, it is not disputed that each time Yabut would transact
business with PBC's tellers, she would accomplish two (2) copies of the current account deposit slip.
PBC's deposit slip, as issued in 1975, had two parts. The upper part was called the depositor's stub
and the lower part was called the bank copy. Both parts were detachable from each other. The
deposit slip was prepared and signed by the depositor or his representative, who indicated therein
the current account number to which the deposit was to be credited, the name of the depositor or
current account holder, the date of the deposit, and the amount of the deposit either in cash or in
checks. (Rollo, p. 137)

Since Yabut deposited money in cash, the usual bank procedure then was for the teller to count
whether the cash deposit tallied with the amount written down by the depositor in the deposit slip. If it
did, then the teller proceeded to verify whether the current account number matched with the current
account name as written in the deposit slip.

In the earlier days before the age of full computerization, a bank normally maintained a ledger which
served as a repository of accounts to which debits and credits resulting from transactions with the
bank were posted from books of original entry. Thus, it was only after the transaction was posted in
the ledger that the teller proceeded to machine validate the deposit slip and then affix his signature
or initial to serve as proof of the completed transaction.
It should be noted that the teller validated the depositor's stub in the upper portion and the bank copy
on the lower portion on both the original and duplicate copies of the deposit slips presented by
Yabut. The teller, however, detached the validated depositor's stub on the original deposit slip and
allowed Yabut to retain the whole validated duplicate deposit slip that bore the same account
number as the original deposit slip, but with the account name purposely left blank by Yabut, on the
assumption that it would serve no other purpose but for a personal record to complement the original
validated depositor's stub.

Thus, when Yabut wrote the name of RMC on the blank account name on the validated duplicate
copy of the deposit slip, tampered with its account number, and superimposed RMC's account
number, said act only served to cover-up the loss already caused by her to RMC, or after the deposit
slip was validated by the teller in favor of Yabut's husband. Stated otherwise, when there is a clear
evidence of tampering with any of the material entries in a deposit slip, the genuineness and due
execution of the document become an issue in resolving whether or not the transaction had been fair
and regular and whether the ordinary course of business had been followed by the bank.

It is logical, therefore, to conclude that the legal or proximate cause of RMC's loss was when Yabut,
its employee, deposited the money of RMC in her husband's name and account number instead of
that of RMC, the rightful owner of such deposited funds. Precisely, it was the criminal act of Yabut
that directly caused damage to RMC, her employer, not the validation of the deposit slip by the teller
as the deposit slip was made out by Yabut in her husband's name and to his account.

Even if the bank teller had required Yabut to completely fill up the duplicate deposit slip, the original
deposit slip would nonetheless still be validated under the account of Yabut's husband. In fine, the
damage had already been done to RMC when Yabut deposited its funds in the name and account
number of her husband with petitioner bank. It is then entirely left to speculation what Yabut would
have done afterwards — like tampering both the account number and the account name on the stub
of the original deposit slip and on the duplicate copy — in order to cover up her crime.

Under the circumstances in this case, there was no way for PBC's bank tellers to reasonably foresee
that Yabut might or would use the duplicate deposit slip to cover up her crime. In the first place, the
bank tellers were absolutely unaware that a crime had already been consummated by Yabut when
her transaction by her sole doing was posted in the ledger and validated by the teller in favor of her
husband's account even if the funds deposited belonged to RMC.

The teller(s) in this case were not in any way proven to be parties to the crime either as accessories
or accomplices. Nor could it be said that the act of posting and validation was in itself a negligent act
because the teller(s) simply had no choice but to accept and validate the deposit as written in the
original deposit slip under the account number and name of Yabut's husband. Hence, the act of
validating the duplicate copy was not the proximate cause of RMC's injury but merely a remote
cause which an independent cause or agency merely took advantage of to accomplish something
which was not the probable or natural effect thereof. That explains why Yabut still had to tamper with
the account number of the duplicate deposit slip after filling in the name of RMC in the blank space.

Coming now to the doctrine of "last clear chance," it is my considered view that the doctrine
assumes that the negligence of the defendant was subsequent to the negligence of the plaintiff and
the same must be the proximate cause of the injury. In short, there must be a last and
a clear chance, not a last possible chance, to avoid the accident or injury. It must have been a
chance as would have enabled a reasonably prudent man in like position to have acted effectively to
avoid the injury and the resulting damage to himself.
In the case at bar, the bank was not remiss in its duty of sending monthly bank statements to private
respondent RMC so that any error or discrepancy in the entries therein could be brought to the
bank's attention at the earliest opportunity. Private respondent failed to examine these bank
statements not because it was prevented by some cause in not doing so, but because it was
purposely negligent as it admitted that it does not normally check bank statements given by banks.

It was private respondent who had the last and clear chance to prevent any further misappropriation
by Yabut had it only reviewed the status of its current accounts on the bank statements sent to it
monthly or regularly. Since a sizable amount of cash was entrusted to Yabut, private respondent
should, at least, have taken ordinary care of its concerns, as what the law presumes. Its negligence,
therefore, is not contributory but the immediate and proximate cause of its injury.

I vote to grant the petition.

Footnotes

1 Rollo, pp. 37-46.

2 Rollo, pp. 40-41.

3 Decision. pp. 9-10; Rollo, pp. 45-46.

4 Petition, pp. 13-14; Rollo, pp. 20-21.

5 Petition, p. 14; Rollo, p. 21.

6 Reply, p. 13; Rollo, p. 82.

7 Andamo v. Intermediate Appellate Court, 191 SCRA 195, 201 [1990], citing Taylor
v. Manila Electric Company, 16 Phil. 8 [1910]; Vergara v. Court of Appeals, 154
SCRA 564 [1987].

8 37 Phil. 809, 813 [1918], reiterated in Bank of the Phil. Islands v. Court of Appeals,
216 SCRA 51, 72-73 [1992]; Layugan v. Intermediate Appellate Court, 167 SCRA
363, 373 [1988]; Gan v. Court of Appeals, 165 SCRA 378, 382 [1988]; see
also Leano v. Domingo, 198 SCRA 800, 804 [1991].

9 Original or duplicate.

10 Rollo, pp. 104-105. citing TSN, 14 August 1981, pp. 6-12.

11 Rollo, p. 56, citing TSN, 14 August 1981, pp. 42-47.

12 Sangco, Torts and Damages, Vol. I, 1993 ed., p. 8, citing Prosser, Law on Torts,
3rd Edition, 1964, pp. 153-154.

13 Rollo, p. 43, citing TSN, 9 February 1983, pp. 10-12.

14 Decision, p. 8; Rollo, p. 44.

 15 Supra., note 12 at 90.

16 102 Phil. 181, 186 [1957].

17 216 SCRA 51, 75 [1992].

18 Decision, pp. 6-7; Rollo, pp. 42-43.

19 LBC Air Cargo, Inc. v. Court of Appeals, 241 SCRA 619, 624 [1995], citing Picart
v. Smith, supra.

20 Ibid., citing Pantranco North Express, Inc. v. Baesa, 179 SCRA 384; Glan
People's Lumber and Hardware v. Intermediate Appellate Court, 173 SCRA 464.

21 Metropolitan Bank and Trust Company v. Court of Appeals, 237 SCRA 761, 767
[1994]; Bank of the Phil. Islands v. Court of Appeals, supra., note 16 at 71.

22 183 SCRA 360, 367 [1990], cited in Bank of the Phil. Islands v. Intermediate
Appellate Court, 206 SCRA 408, 412-413 [1992];

G.R. No. 97626, March 14, 1997

o The negligence must be the proximate cause of the loss

FACTS:

Rommel’s Marketing Corporation (RMC) maintained two separate current accounts with
PBC in connection with its business of selling appliances. The RMC General Manager
Lipana entrusted to his secretary, Irene Yabut, RMC funds amounting to P300,000+ for
the purpose of depositing the same to RMC’s account with PBC. However, it turned out
that Yabut deposited the amounts in her husband’s account instead of RMC. Lipana
never checked his monthly statement of accounts regularly furnished by PBC so that
Yabut’s modus operandi went on for the span of more than one year.
ISSUE:

o What is the proximate cause of the loss – Lipana’s negligence in not checking his monthly
statements or the bank’s negligence through its teller in validating the deposit slips?
HELD:

The bank teller was negligent in validating, officially stamping and signing all the deposit
slips prepared and presented by Yabut, despite the glaring fact that the duplicate copy
was not completely accomplished contrary to the self-imposed procedure of the bank
with respect to the proper validation of deposit slips, original or duplicate.

The bank teller’s negligence, as well as the negligence of the bank in the selection and
supervision of its bank teller, is the proximate cause of the loss suffered by the private
respondent, not the latter’s entrusting cash to a dishonest employee. Xxx Even if Yabut
had the fraudulent intention to misappropriate the funds, she would not have been able
to deposit those funds in her husband’s current account, and then make plaintiff believe
that it was in the latter’s accounts wherein she had deposited them, had it not been for
the bank teller’s aforesaid gross and reckless negligence.

Doctrine of Last Clear Chance – where both parties are negligent, but the negligent act of
one is appreciably later in time than that of the other, or when it is impossible to
determine whose fault or negligence should be attributed to the incident, the one who
had the last clear opportunity to avoid the impending harm and failed to do so is
chargeable with the consequences thereof. It means that the antecedent negligence of
a person does not preclude the recovery of damages for the supervening negligence of,
or bar a defense against liability sought by another, if the latter, who had the last fair
chance, could have avoided the impending harm by exercise of due diligence. (Phil.
Bank of Commerce v. CA, supra)

City Trust Banking Corp. v. Intermediate Appellate Court, 232 SCRA 559, 564
[1994]; Metropolitan Bank and Trust Company v. CA, supra.

23 Phoenix Construction, Inc. v. Intermediate Appellate Court, 148 SCRA 353, 368
[1987]; Del Prado v. Manila Electric Co., 52 Phil. 900, 906 [1929]; Rakes v. Atlantic,
Gulf and Pacific Co., 7 Phil. 359, 375 [1907].

3) Ong vs Metropolitan 104 Phil 398

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-7664 August 29, 1958

MR. AND MRS. AMADOR C. ONG, plaintiffs-appellants,

vs.
METROPOLITAN WATER DISTRICT, defendant-appellee.

Tomas Tria Tirona for appellants.

Government Corporate Counsel Ambrosio Padilla and Juan C. Jimenez for appellee.
BAUTISTA ANGELO, J.:

Plaintiffs spouses seek to recover from defendant, a government-owned corporation, the sum of
P50,000 as damages, P5,000 as funeral expenses, and P11,000 as attorneys' fees, for the death of
their son Dominador Ong in one of the swimming pools operated by defendant.

Defendant admits the fact that plaintiffs' son was drowned in one of its swimming pools but avers
that his death was caused by his own negligence or by unavoidable accident. Defendant also avers
that it had exercised due diligence in the selection of, and supervision over, its employees and that it
had observed the diligence required by law under the circumstances.

After trial, the lower court found that the action of plaintiffs is untenable and dismissed the complaint
without pronouncement as to costs. Plaintiffs took the case on appeal directly to this Court because
the amount involved exceeds the sum of P50,000.

Defendant owns and operates three recreational swimming pools at its Balara filters, Diliman,
Quezon City, to which people are invited and for which a nominal fee of P0.50 for adults and P0.20
for children is charged. The main pool it between two small pools of oval shape known as the
"Wading pool" and the "Beginners Pool." There are diving boards in the big pools and the depths of
the water at different parts are indicated by appropriate marks on the wall. The care and supervision
of the pools and the users thereof is entrusted to a recreational section composed of Simeon
Chongco as chief, Armando Rule, a male nurse, and six lifeguards who had taken the life-saving
course given by the Philippine Red Cross at the YMCA in Manila. For the safety of its patrons,
defendant has provided the pools with a ring buoy, toy roof, towing line, saving kit and a resuscitator.
There is also a sanitary inspector who is in charge of a clinic established for the benefit of the
patrons. Defendant has also on display in a conspicuous place certain rules and regulations
governing the use of the pools, one of which prohibits the swimming in the pool alone or without any
attendant. Although defendant does not maintain a full-time physician in the swimming pool
compound, it has however a nurse and a sanitary inspector ready to administer injections or operate
the oxygen resuscitator if the need should arise.

In the afternoon of July 5, 1952, at about 1:00 o'clock, Dominador Ong, a 14-year old high school
student and boy scout, and his brothers Ruben and Eusebio, went to defendant's swimming pools.
This was not the first time that the three brothers had gone to said natatorium for they had already
been there four or five times before. They arrived at the natatorium at about 1:45 p.m. After paying
the requisite admission fee, they immediately went to one of the small pools where the water was
shallow. At about 4:35 p.m., Dominador Ong told his brothers that he was going to the locker room in
an adjoining building to drink a bottle of coke. Upon hearing this, Ruben and Eusebio went to the
bigger pool leaving Dominador in the small pool and so they did not see the latter when he left the
pool to get a bottle of coke. In that afternoon, there were two lifeguards on duty in the pool
compound, namely, Manuel Abaño and Mario Villanueva. The tour of duty of Abaño was from 8:00
to 12:00 in the morning and from 2:00 to 6:00 in the afternoon, and of Villanueva from 7:30 to 11:30
a.m. and from 12:30 to 4:30 p.m. Between 4:00 to 5:00 that afternoon, there were about twenty
bathers inside the pool area and Manuel Abaño was going around the pools to observe the bathers
in compliance with the instructions of his chief.

Between 4:40 to 4:45 p.m., some boys who were in the pool area informed a bather by the name of
Andres Hagad, Jr., that somebody was swimming under water for quite a long time. Another boy
informed lifeguard Manuel Abaño of the same happening and Abaño immediately jumped into the
big swimming pool and retrieved the apparently lifeless body of Dominador Ong from the bottom.
The body was placed at the edge of the pool and Abaño immediately applied manual artificial
respiration. Soon after, male nurse Armando Rule came to render assistance, followed by sanitary
inspector Iluminado Vicente who, after being called by phone from the clinic by one of the security
guards, boarded a jeep carrying with him the resuscitator and a medicine kit, and upon arriving he
injected the boy with camphorated oil. After the injection, Vicente left on a jeep in order to fetch Dr.
Ayuyao from the University of the Philippines. Meanwhile, Abaño continued the artificial manual
respiration, and when this failed to revive him, they applied the resuscitator until the two oxygen
tanks were exhausted. Not long thereafter, Dr. Ayuyao arrived with another resuscitator, but the
same became of no use because he found the boy already dead. The doctor ordered that the body
be taken to the clinic.

In the evening of the same day, July 5, 1952, the incident was investigated by the Police Department
of Quezon City and in the investigation boys Ruben Ong and Andres Hagad, Jr. gave written
statements. On the following day, July 6, 1952, an autopsy was performed by Dr. Enrique V. de los
Santos, Chief, Medico Legal Division, National Bureau of Investigation, who found in the body of the
deceased the following: an abrasion on the right elbow lateral aspect; contusion on the right
forehead; hematoma on the scalp, frontal region, right side; a congestion in the brain with petechial
subcortical hemorrhage, frontal lobe; cyanosis on the face and on the nails; the lung was soggy with
fine froth in the bronchioles; dark fluid blood in the heart; congestion in the visceral organs, and
brownish fluid in the stomach. The death was due to asphyxia by submersion in water.

The issue posed in this appeal is whether the death of minor Dominador Ong can be attributed to the
negligence of defendant and/or its employees so as to entitle plaintiffs to recover damages.

The present action is governed by Article 2176 in relation to Article 2080 of the new Civil Code. The
first article provides that "whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damages done." Such fault or negligence is called quasi-delict.
Under the second article, this obligation is demandable not only for one's own acts or omissions but
also for those of persons for whom one is responsible. In addition, we may quote the following
authorities cited in the decision of the trial court:

"The rule is well settled that the owners of resorts to which people generally are expressly or
by implication invited are legally bound to exercise ordinary care and prudence in the
management and maintenance of such resorts, to the end of making them reasonably safe
for visitors" (Larkin vs. Saltair Beach Co., 30 Utah 86, 83 Pac. 686).

"Although the proprietor of a natatorium is liable for injuries to a patron, resulting from lack of
ordinary care in providing for his safety, without the fault of the patron, he is not, however, in
any sense deemed to be the insurer of the safety of patrons. And the death of a patron within
his premises does not cast upon him the burden of excusing himself from any presumption of
negligence" (Bertalot vs. Kinnare. 72 Ill. App. 52, 22 A. L. R. 635; Flora vs. Bimini Water Co.,
161 Cal. 495, 119 Pac. 661). Thus in Bertalot vs. Kinnare, supra, it was held that there could
be no recovery for the death by drowning of a fifteen-year boy in defendant's natatorium,
where it appeared merely that he was lastly seen alive in water at the shallow end of the
pool, and some ten or fifteen minutes later was discovered unconscious, and perhaps
lifeless, at the bottom of the pool, all efforts to resuscitate him being without avail.

Since the present action is one for damages founded on culpable negligence, the principle to be
observed is that the person claiming damages has the burden of proving that the damage is caused
by the fault or negligence of the person from whom the damage is claimed, or of one of his
employees (Walter A. Smith & Co. vs. Cadwallader Gibson Lumber Co., 55 Phil., 517). The question
then that arises is: Have appellants established by sufficient evidence the existence of fault or
negligence on the part of appellee so as to render it liable for damages for the death of Dominador
Ong?
There is no question that appellants had striven to prove that appellee failed to take the necessary
precaution to protect the lives of its patrons by not placing at the swimming pools efficient and
competent employees who may render help at a moment's notice, and they ascribed such
negligence to appellee because the lifeguard it had on the occasion minor Ong was drowning was
not available or was attending to something else with the result that his help came late. Thus,
appellants tried to prove through the testimony of Andres Hagad, Jr. and Ruben Ong that when
Eusebio Ong and Hagad, Jr. detected that there was a drowning person in the bottom of the big
swimming pool and shouted to the lifeguard for help, lifeguard Manuel Abaño did not immediately
respond to the alarm and it was only upon the third call that he threw away the magazine he was
reading and allowed three or four minutes to elapse before retrieving the body from the water. This
negligence of Abaño, they contend, is attributable to appellee.

But the claim of these two witnesses not only was vehemently denied by lifeguard Abaño, but is
belied by the written statements given by them in the investigation conducted by the Police
Department of Quezon City approximately three hours after the happening of the accident. Thus,
these two boys admitted in the investigation that they narrated in their statements everything they
knew of the accident, but, as found by the trial, nowhere in said statements do they state that the
lifeguard was chatting with the security guard at the gate of the swimming pool or was reading a
comic magazine when the alarm was given for which reason he failed to immediately respond to the
alarm. On the contrary, what Ruben Ong particularly emphasized therein was that after the lifeguard
heard the shouts for help, the latter immediately dived into the pool to retrieve the person under
water who turned out to be his brother. For this reason, the trial court made this conclusion: "The
testimony of Ruben Ong and Andres Hagad, Jr. as to the alleged failure of the lifeguard Abaño to
immediately respond to their call may therefore be disregarded because they are belied by their
written statements. (Emphasis supplied.)

On the other hand, there is sufficient evidence to show that appellee has taken all necessary
precautions to avoid danger to the lives of its patrons or prevent accident which may cause their
death. Thus, it has been shown that the swimming pools of appellee are provided with a ring buoy,
toy roof, towing line, oxygen resuscitator and a first aid medicine kit. The bottom of the pools is
painted with black colors so as to insure clear visibility. There is on display in a conspicuous place
within the area certain rules and regulations governing the use of the pools. Appellee employs six
lifeguards who are all trained as they had taken a course for that purpose and were issued
certificates of proficiency. These lifeguards work on schedule prepared by their chief and arranged in
such a way as to have two guards at a time on duty to look after the safety of the bathers. There is a
male nurse and a sanitary inspector with a clinic provided with oxygen resuscitator. And there are
security guards who are available always in case of emergency.

The record also shows that when the body of minor Ong was retrieved from the bottom of the pool,
the employees of appellee did everything possible to bring him back to life. Thus, after he was
placed at the edge of the pool, lifeguard Abaño immediately gave him manual artificial respiration.
Soon thereafter, nurse Armando Rule arrived, followed by sanitary inspector Iluminado Vicente who
brought with him an oxygen resuscitator. When they found that the pulse of the boy was abnormal,
the inspector immediately injected him with camphorated oil. When the manual artificial respiration
proved ineffective they applied the oxygen resuscitator until its contents were exhausted. And while
all these efforts were being made, they sent for Dr. Ayuyao from the University of the Philippines
who however came late because upon examining the body he found him to be already dead. All of
the foregoing shows that appellee has done what is humanly possible under the circumstances to
restore life to minor Ong and for that reason it is unfair to hold it liable for his death.

Sensing that their former theory as regards the liability of appellee may not be of much help,
appellants now switch to the theory that even if it be assumed that the deceased is partly to be
blamed for the unfortunate incident, still appellee may be held liable under the doctrine of "last clear
chance" for the reason that, having the last opportunity to save the victim, it failed to do so.

We do not see how this doctrine may apply considering that the record does not show how minor
Ong came into the big swimming pool. The only thing the record discloses is that minor Ong
informed his elder brothers that he was going to the locker room to drink a bottle of coke but that
from that time on nobody knew what happened to him until his lifeless body was retrieved. The
doctrine of last clear chance simply means that the negligence of a claimant does not preclude a
recovery for the negligence of defendant where it appears that the latter, by exercising reasonable
care and prudence, might have avoided injurious consequences to claimant notwithstanding his
negligence. Or, "As the doctrine usually is stated, a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or the
negligence of a third person which is imputed to his opponent, is considered in law solely
responsible for the consequences of the accident." (38 Am. Jur. pp. 900-902)

It goes without saying that the plaintiff himself was not free from fault, for he was guilty of
antecedent negligence in planting himself in the wrong side of the road. But as we have
already stated, the defendant was also negligent; and in such case the problem always is to
discover which agent is immediately and directly responsible. It will be noted that the
negligent acts of the two parties were not contemporaneous, since the negligence of the
defendant succeeded the negligence of the plaintiff by an appreciable interval. Under these
circumstances, the law is that a person who has the last clear chance to avoid the impending
harm and fails to do so is chargeable with the consequences, without reference to the prior
negligence of the other party. (Picart vs. Smith, 37 Phil., 809)

Since it is not known how minor Ong came into the big swimming pool and it being apparent that he
went there without any companion in violation of one of the regulations of appellee as regards the
use of the pools, and it appearing that lifeguard Aba_¤_o responded to the call for help as soon as
his attention was called to it and immediately after retrieving the body all efforts at the disposal of
appellee had been put into play in order to bring him back to life, it is clear that there is no room for
the application of the doctrine now invoked by appellants to impute liability to appellee..

The last clear chance doctrine can never apply where the party charged is required to act
instantaneously, and if the injury cannot be avoided by the application of all means at hand
after the peril is or should have been discovered; at least in cases in which any previous
negligence of the party charged cannot be said to have contributed to the injury. O'Mally vs.
Eagan, 77 ALR 582, 43 Wyo. 233, 350, 2, P2d 1063. (A.L.R. Digest, Vol. 8, pp. 955-956)

Before closing, we wish to quote the following observation of the trial court, which we find supported
by the evidence: "There is (also) a strong suggestion coming from the expert evidence presented by
both parties that Dominador Ong might have dived where the water was only 5.5 feet deep, and in
so doing he might have hit or bumped his forehead against the bottom of the pool, as a
consequence of which he was stunned, and which to his drowning. As a boy scout he must have
received instructions in swimming. He knew, or have known that it was dangerous for him to dive in
that part of the pool."

Wherefore, the decision appealed from being in accordance with law and the evidence, we hereby
affirm the same, without pronouncement as to costs.

Paras, C. J., Bengzon, Padilla, Montemayor, Reyes, A., Concepcion, Reyes, J. B. L., Endencia and
Felix, JJ.,concur.
The Lawphil Project - Arellano Law Foundation

Case Digest:

MR. & MRS. ONG vs. METROPOLITAN WATER DISTRICT (gov’t-owned corp.)
No. L-7664. 29 August 1958.
Appeal from a judgment of the CFI, Rizal QC
BAUTISTA ANGELO, J.:

Facts: Plaintiff spouses seek to recover from defendant, damages, funeral expenses and attorney’s fees for
the death of their son, Dominador Ong, in one of the swimming pools of the latter. After trial, the CFI
dismissed the complaint for it found the action of the plaintiffs-appellants untenable.

Issues: (1) WON plaintiffs have clearly established the fault/negligence of the defendants so as to make it
liable for the damages sought; (2) WON the Doctrine of Last Clear Chance applies in the case at bench.

Ruling: Judgment affirmed.

(1) The person/s claiming damages has/have the burden of proving that the damages is caused by the
fault/negligence of the person from whom the damages is claimed. Plaintiffs failed to overcome the
burden. Defendant employed 6 well-trained lifeguards, male nurse, sanitary inspector and security guards
to avoid danger to the lives of their patrons. The swimming pools are provided with ring buoy, tag roof
and towing line. Also, conspicuously displayed in the pool area the rules and regulations for pool use. In
that, it appears that defendant has taken all the necessary precautions to avoid/prevent danger/accidents
which may cause injury to or even death of its patrons.
(2) The Doctrine of last Clear Chance means that, “a person who has the last clear chance to avoid the
accident, notwithstanding the negligent acts of his opponent, is considered in law solely responsible for
the consequences of the accident.” Since minor Ong has went to the big swimming pool w/o any
companion in violation of the rules and regulations of the defendant as regards the use of pools, and it
appearing that the lifeguard responded to the call for help as soon as his attention was called to it,
applying all efforts into play in order to bring minor Ong back to life, it is clear that there is no room for
the application of the Doctrine to impute liability to appellee. Minor Ong’s fault/negligence is the
proximate and only cause of his death.

4) Pantranco North Express vs Baesa

THIRD DIVISION

[G.R. Nos. 79050-51. November 14, 1989.]

PANTRANCO NORTH EXPRESS, INC., Petitioner, v. MARICAR BASCOS BAESA, thru her personal
guardian FRANCISCA O. BASCOS, FE O. ICO, in her behalf and in behalf of her minor children,
 namely ERWIN, OLIVE, EDMUNDO and SHARON ICO, Respondents.

Efren N. Ambrosio & Associates for petitioner PNEI.

Emiliano S. Micu for Respondents.

SYLLABUS

1. CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE; WHEN APPLICABLE. — The doctrine of last clear
chance applies only in a situation where the defendant, having the last fair chance to avoid the impending
harm and failed to do so, becomes liable for all the consequences of the accident notwithstanding the prior
negligence of the plaintiff.

2. ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE. — In order that the doctrine of last clear
chance may be applied, it must be shown that the person who allegedly had the last opportunity to avert the
accident was aware of the existence of the peril or with exercise of due care should have been aware of it.

3. ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING INSTANTANEOUSLY OR BY AVAILABLE MEANS. —
This doctrine of last chance has no application to a case where a person is to act instantaneously, and if the
injury cannot be avoided by using all means available after the peril is or should have been discovered.

4. ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE ENTERING A THROUGH HIGHWAY OR A STOP
INTERSECTION. — Section 43 (c), Article III, Chapter IV of Republic Act No. 1436 cannot apply to case a bar
where at the time of the accident, the jeepney had already crossed the intersection.

5. ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON THE EMPLOYER. — A finding of negligence on the
part of the driver establishes a presumption that the employer has been negligent and the latter has the
burden of proof that it has exercised due negligence not only in the selection of its employees but also in
adequately supervising their work.

6. ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT CLAIM FOR DAMAGES. — Plaintiff’s failure to
present documentary evidence to support their claim for damages for loss of earning capacity of the
deceased victim does not bar recovery of the damages, if such loss may be based sufficiently on their
testimonies.

7. ID.; ID.; INDEMNITY FIXED AT P30,000. — The indemnity for the death of a person was fixed by this
Court at (P30,000.00).

DECISION

CORTES, J.:

In this Petition, Pantranco North Express Inc. (PANTRANCO), asks the Court to review the decision of the
Court of Appeals in CA-G.R. No. 05494-95 which affirmed the decisions of the Court of First Instance of
Rosales, Pangasinan in Civil Case No. 561-R and Civil Case No. 589-R wherein PANTRANCO was ordered to
pay damages and attorney’s fees to herein private respondents. chanrob les vi rtual lawlib rary

The pertinent fact are as follows:

chanrob1es vi rt ual 1aw li bra ry

At about 7:00 o’clock in the morning of June 12, 1981, the spouses Ceasar and Marilyn Baesa and their
children Harold Jim, Marcelino and Maricar, together with spouses David Ico and Fe O. Ico with their son
Erwin Ico and seven other persons, were aboard a passenger jeepney on their way to a picnic at Malalam
River, Ilagan, Isabela, to celebrate the fifth wedding anniversary of Ceasar and Marilyn Baesa.

The group, numbering fifteen (15) persons, rode in the passenger jeepney driven by David Ico, who was
also the registered owner thereof. From Ilagan, Isabela, they proceeded to Barrio Capayacan to deliver
some viands to one Mrs. Bascos and thenceforth to San Felipe, taking the highway going to Malalam River.
Upon reaching the highway, the jeepney turned right and proceeded to Malalam River at a speed of about
20 kph. While they were proceeding towards Malalam River, a speeding PANTRANCO bus from Aparri, on its
regular route to Manila, encroached on the jeepney’s lane while negotiating a curve, and collided with it.

As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa and their children, Harold Jim
and Marcelino Baesa, died while the rest of the passengers suffered injuries. The jeepney was extensively
damaged. After the accident the driver of the PANTRANCO Bus, Ambrosio Ramirez, boarded a car and
proceeded to Santiago, Isabela. From that time on up to the present, Ramirez has never been seen and has
apparently remained in hiding.

All the victims and/or their surviving heirs except herein private respondents settled the case amicably
under the "No Fault" insurance coverage of PANTRANCO.

Maricar Baesa through her guardian Francisca O. Bascos and Fe O. Ico for herself and for her minor children,
filed separate actions for damages arising from quasi-delict against PANTRANCO, respectively docketed as
Civil Case No. 561-R and 589-R of the Court of First Instance of Pangasinan.

In its answer, PANTRANCO, aside from pointing to the late David Ico’s alleged negligence as the proximate
cause of the accident, invoked the defense of due diligence in the selection and supervision of its driver,
Ambrosio Ramirez. chan roble svi rtualaw lib rary

On July 3, 1984, the CFI of Pangasinan rendered a decision against PANTRANCO awarding the total amount
of Two Million Three Hundred Four Thousand Six Hundred Forty-Seven (P2,304,647.00) as damages, plus
10% thereof as attorney’s fees and costs to Maricar Baesa in Civil Case No. 561-R, and the total amount of
Six Hundred Fifty Two Thousand Six Hundred Seventy-Two Pesos (P652,672.00) as damages, plus 10%
thereof as attorney’s fees and costs to Fe Ico and her children in Civil Case No. 589-R. On appeal, the cases
were consolidated and the Court of Appeals modified the decision of the trial court by ordering PANTRANCO
to pay the total amount of One Million One Hundred Eighty-Nine Thousand Nine Hundred Twenty Seven
Pesos (P1,189,927.00) as damages, plus Twenty Thousand Pesos (P20,000.00) as attorney’s fees to Maricar
Baesa, and the total amount of Three Hundred Forty-Four Thousand Pesos (P344,000.00) plus Ten
Thousand Pesos (P10,000.00) as attorney’s fees to Fe Ico and her children, and to pay the costs in both
cases. The dispositive portion of the assailed decision reads as follows: chanrob 1es vi rtua l 1aw lib rary

WHEREFORE, the decision appealed from is hereby modified by ordering the defendant PANTRANCO North
Express, Inc. to pay: chanrob 1es vi rtual 1aw lib rary

I. The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the following damages: chan rob1es v irt ual 1aw l ibra ry

A) As compensatory damages for the death of Ceasar Baesa — P30,000.00;

B) As compensatory damages for the death of Marilyn Baesa — P30,000.00;

C) As compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa — P30,000.00;

D) For the loss of earnings of Ceasar Baesa — P630,000.00;

E) For the loss of earnings of Marilyn Bascos Baesa — P375,000.00;

F) For the burial expenses of the deceased Ceasar and Marilyn Baesa — P41,200.00;

G) For hospitalization expenses of Maricar Baesa — P3,727.00;

H) As moral damages — P50,000.00;

I) As attorney’s fees — P20,000.00;

II. The plaintiffs in Civil Case No. 589-R, the following damages: chanrob1e s virtual 1aw lib rary

A) As compensatory damages for the death of David Ico — P30,000.00;

B) For loss of earning capacity of David Ico — P252,000.00;

C) As moral damages for the death of David Ico and the injury of Fe Ico — P30,000.00

D) As payment for the jeepney — P20,000.00;

E) For the hospitalization of Fe Ico — P12,000.000;

F) And for attorney’s fees — P10,000.00;

and to pay the costs in both cases.

The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in Civil Case No. 561-R, and the medical
expenses in the sum of P3,273.55, should be deducted from the award in her favor. chanrob les virtual lawl ib rary

All the foregoing amounts herein awarded except the costs shall earn interest at the legal rate from date of
this decision until fully paid. [CA Decision, pp. 14-15; Rollo, pp. 57-58.]

PANTRANCO filed a motion for reconsideration of the Court of Appeal’s decision, but on June 26, 1987, it
denied the same for lack of merit. PANTRANCO then filed the instant petition for review.

Petitioner faults the Court of Appeals for not applying the doctrine of the "last clear chance" against the
jeepney driver. Petitioner claims that under the circumstances of the case, it was the driver of the passenger
jeepney who had the last clear chance to avoid the collision and was therefore negligent in failing to utilize
with reasonable care and competence his then existing opportunity to avoid the harm.

The doctrine of the last clear chance was defined by this Court in the case of Ong v. Metropolitan Water
District, 104 Phil. 397 (1958), in this wise: cha nrob 1es vi rtua l 1aw lib rary

The doctrine of the last clear chance simply, means that the negligence of a claimant does not preclude a
recovery for the negligence of defendant where it appears that the latter, by exercising reasonable care and
prudence, might have avoided injurious consequences to claimant notwithstanding his negligence.

The doctrine applies only in a situation where the plaintiff was guilty of prior or antecedent negligence but
the defendant, who had the last fair chance to avoid the impending harm and failed to do so, is made liable
for all the consequences of the accident notwithstanding the prior negligence of the plaintiff [Picart v. Smith,
37 Phil. 809 (1918); Glan People’s Lumber and Hardware, Et. Al. v. Intermediate Appellate Court, Cecilia
Alferez Vda. de Calibo, Et Al., G.R. No. 70493, May 18, 1989]. The subsequent negligence of the defendant
in failing to exercise ordinary care to avoid injury to plaintiff becomes the immediate or proximate cause of
the accident which intervenes between the accident and the more remote negligence of the plaintiff, thus
making the defendant liable to the plaintiff [Picart v. Smith, supra].

Generally, the last clear chance doctrine is invoked for the purpose of making a defendant liable to a plaintiff
who was guilty of prior or antecedent negligence, although it may also be raised as a defense to defeat
claim for damages. chanroble s lawlib ra ry : rednad

To avoid liability for the negligence of its driver, petitioner claims that the original negligence of its driver
was not the proximate cause of the accident and that the sole proximate cause was the supervening
negligence of the jeepney driver David Ico in failing to avoid the accident. It is petitioner’s position that even
assuming arguendo, that the bus encroached into the lane of the jeepney, the driver of the latter could have
swerved the jeepney towards the spacious dirt shoulder on his right without danger to himself or his
passengers.

The above contention of petitioner is manifestly devoid of merit.

Contrary to the petitioner’s contention, the doctrine of "last clear chance" finds no application in this case.
For the doctrine to be applicable, it is necessary to show that the person who allegedly had the last
opportunity to avert the accident was aware of the existence of the peril or should, with exercise of due
care, have been aware of it. One cannot be expected to avoid an accident or injury if he does not know or
could not have known the existence of the peril. In this case, there is nothing to show that the jeepney
driver David Ico knew of the impending danger. When he saw at a distance that the approaching bus was
encroaching on his lane, he did not immediately swerve the jeepney to the dirt shoulder on his right since he
must have assumed that the bus driver will return the bus to its own lane upon seeing the jeepney
approaching from the opposite direction. As held by this Court in the case of Vda. De Bonifacio v. BLTB, G.R.
No. L-26810, August 31, 1970, 34 SCRA 618, a motorist who is properly proceeding on his own side of the
highway is generally entitled to assume that an approaching vehicle coming towards him on the wrong side,
will return to his proper lane of traffic. There was nothing to indicate to David Ico that the bus could not
return to its own lane or was prevented from returning to the proper lane by anything beyond the control of
its driver. Leo Marantan, an alternate driver of the Pantranco bus who was seated beside the driver Ramirez
at the time of the accident, testified that Ramirez had no choice but to swerve the steering wheel to the left
and encroach on the jeepney’s lane because there was a steep precipice on the right [CA Decision, p. 2;
Rollo, p. 45]. However, this is belied by the evidence on record which clearly shows that there was enough
space to swerve the bus back to its own lane without any danger [CA Decision, p. 7; Rollo, p. 50].

Moreover, both the trial court and the Court of Appeals found that at the time of the accident the Pantranco
bus was speeding towards Manila [CA Decision, p. 2; Rollo, p. 45]. By the time David Ico must have realized
that the bus was not returning to its own lane, it was already too late to swerve the jeepney to his right to
prevent an accident. The speed at which the approaching bus was running prevented David Ico from
swerving the jeepney to the right shoulder of the road in time to avoid the collision. Thus, even assuming
that the jeepney driver perceived the danger a few seconds before the actual collision, he had no
opportunity to avoid it. This Court has held that the last clear chance doctrine "can never apply where the
party charged is required to act instantaneously, and if the injury cannot be avoided by the application of all
means at hand after the peril is or should have been discovered" [Ong v. Metropolitan Water District,
supra].chanrob les.com : vi rtua l law lib ra ry

Petitioner likewise insists that David Ico was negligent in failing to observe Section 43 (c), Article III Chapter
IV of Republic Act No. 4136 * which provides that the driver of a vehicle entering a through highway or a
stop intersection shall yield the right of way to all vehicles approaching in either direction on such through
highway.

Petitioner’s misplaced reliance on the aforesaid law is readily apparent in this case. The cited law itself
provides that it applies only to vehicles entering a through highway or a stop intersection. At the time of the
accident, the jeepney had already crossed the intersection and was on its way to Malalam River. Petitioner
itself cited Fe Ico’s testimony that the accident occurred after the jeepney had travelled a distance of about
two (2) meters from the point of intersection [Petition p. 10; Rollo, p. 27]. In fact, even the witness for the
petitioner, Leo Marantan, testified that both vehicles were coming from opposite directions [CA Decision, p.
7; Rollo, p. 50], clearly indicating that the jeepney had already crossed the intersection.

Considering the foregoing, the Court finds that the negligence of petitioner’s driver in encroaching into the
lane of the incoming jeepney and in failing to return the bus to its own lane immediately upon seeing the
jeepney coming from the opposite direction was the sole and proximate cause of the accident without which
the collision would not have occurred. There was no supervening or intervening negligence on the part of
the jeepney driver which would have made the prior negligence of petitioner’s driver a mere remote cause of
the accident.

II

On the issue of its liability as an employer, petitioner claims that it had observed the diligence of a good
father of a family to prevent damage, conformably to the last paragraph of Article 2180 of the Civil Code.
Petitioner adduced evidence to show that in hiring its drivers, the latter are required to have professional
driver’s license and police clearance. The drivers must also pass written examinations, interviews and
practical driving tests, and are required to undergo a six-month training period. Rodrigo San Pedro,
petitioner’s Training Coordinator, testified on petitioner’s policy of conducting regular and continuing training
programs and safety seminars for its drivers, conductors, inspectors and supervisors at a frequency rate of
at least two (2) seminars a month.

On this point, the Court quotes with approval the following findings of the trial court which was adopted by
the Court of Appeals in its challenged decision: cha nrob 1es vi rtua l 1aw lib rary

When an injury is caused by the negligence of an employee, there instantly arises a presumption that the
employer has been negligent either in the selection of his employees or in the supervision over their acts.
Although this presumption is only a disputable presumption which could be overcome by proof of diligence of
a good father of a family, this Court believes that the evidence submitted by the defendant to show that it
exercised the diligence of a good father of a family in the case of Ramirez, as a company driver is far from
sufficient. No support evidence has been adduced. The professional driver’s license of Ramirez has not been
produced. There is no proof that he is between 25 to 38 years old. There is also no proof as to his
educational attainment, his age, his weight and the fact that he is married or not. Neither are the result of
the written test, psychological and physical test, among other tests, have been submitted in evidence [sic].
His NBI or police clearances and clearances from previous employment were not marked in evidence. No
evidence was presented that Ramirez actually and really attended the seminars. Vital evidence should have
been the certificate of attendance or certificate of participation or evidence of such participation like a
logbook signed by the trainees when they attended the seminars. If such records are not available, the
testimony of the classmates that Ramirez was their classmate in said seminar (should have been presented)
[CA Decision, pp. 8-9; Rollo, pp. 51-52].chan robles law lib rary

Petitioner contends that the fact that Ambrosio Ramirez was employed and remained as its driver only
means that he underwent the same rigid selection process and was subjected to the same strict supervision
imposed by petitioner on all applicants and employees. It is argued by the petitioner that unless proven
otherwise, it is presumed that petitioner observed its usual recruitment procedure and company polices on
safety and efficiency [Petition, p. 20; Rollo, p. 37].

The Court finds the above contention unmeritorious.

The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to the presumption of
negligence on the part of petitioner and the burden of proving that it exercised due diligence not only in the
selection of its employees but also in adequately supervising their work rests with the petitioner [Lilius v.
Manila Railroad Company, 59 Phil. 758 (1934); Umali v. Bacani, G.R. No. L-40570, June 30, 1976, 69 SCRA
623]. Contrary to petitioner’s claim, there is no presumption that the usual recruitment procedures and
safety standards were observed. The mere issuance of rules and regulations and the formulation of various
company policies on safety, without showing that they are being complied with, are not sufficient to exempt
petitioner from liability arising from the negligence of its employee. It is incumbent upon petitioner to show
that in recruiting and employing the erring driver, the recruitment procedures and company policies on
efficiency and safety were followed. Petitioner failed to do this. Hence, the Court finds no cogent reason to
disturb the finding of both the trial court and the Court of Appeals that the evidence presented by the
petitioner, which consists mainly of the uncorroborated testimony of its Training Coordinator, is insufficient
to overcome the presumption of negligence against petitioner. cra lawnad

III

On the question of damages, petitioner claims that the Court of Appeals erred in fixing the damages for the
loss of earning capacity of the deceased victims. Petitioner assails respondent court’s findings because no
documentary evidence in support thereof, such as income tax returns, pay-rolls, pay slips or invoices
obtained in the usual course of business, were presented [Petition, p. 22; Rollo, p. 39]. Petitioner argues
that the "bare and self-serving testimonies of the wife of the deceased David Ico and the mother of the
deceased Marilyn Baesa . . . have no probative value to sustain in law the Court of Appeals’ conclusion on
the respective earnings of the deceased victims." [Petition, pp. 21-22; Rollo, pp. 38-39.] It is petitioner’s
contention that the evidence presented by the private respondent does not meet the requirements of clear
and satisfactory evidence to prove actual and compensatory damages.

The Court finds that the Court of Appeals committed no reversible error in fixing the amount of damages for
the loss of earning capacity of the deceased victims. While it is true that private respondents should have
presented documentary evidence to support their claim for damages for loss of earning capacity of the
deceased victims, the absence thereof does not necessarily bar the recovery of the damages in question.
The testimony of Fe Ico and Francisca Bascos as to the earning capacity of David Ico, and the spouses
Baesa, respectively, are sufficient to establish a basis from which the court can make a fair and reasonable
estimate of the damages for the loss of earning capacity of the three deceased victims. Moreover, in fixing
the damages for loss of earning capacity of a deceased victim, the court can consider the nature of his
occupation, his educational attainment and the state of his health at the time of death.

In the instant case, David Ico was thirty eight (38) years old at the time of his death in 1981 and was
driving his own passenger jeepney. The spouses Ceasar and Marilyn Baesa were both thirty (30) years old at
the time of their death. Ceasar Baesa was a commerce degree holder and the proprietor of the Cauayan
Press, printer of the Cauayan Valley Newspaper and the Valley Times at Cauayan, Isabela. Marilyn Baesa
graduated as a nurse in 1976 and at the time of her death, was the company nurse, personnel manager,
treasurer and cashier of the Ilagan Press at Ilagan, Isabela. Respondent court duly considered these factors,
together with the uncontradicted testimonies of Fe Ico and Francisca Bascos, in fixing the amount of
damages for the loss of earning capacity of David Ico and the spouses Baesa. chanrobles .com:c ralaw:red

However, it should be pointed out that the Court of Appeals committed error in fixing the compensatory
damages for the death of Harold Jim Baesa and Marcelino Baesa. Respondent court awarded to plaintiff
(private respondent) Maricar Baesa Thirty Thousand Pesos (P30,000.00) as "compensatory damages for the
death of Harold Jim Baesa and Marcelino Baesa." [CA Decision, p. 14; Rollo, 57]. In other words, the Court
of Appeals awarded only Fifteen Thousand Pesos (P15,000.00) as indemnity for the death of Harold Jim
Baesa and another Fifteen Thousand Pesos (P15,000.00) for the death of Marcelino Baesa. This is clearly
erroneous. In the case of People v. de la Fuente, G.R. Nos. 63251-52, December 29, 1983, 126 SCRA 518,
the indemnity for the death of a person was fixed by this Court at Thirty Thousand Pesos (P30,000.00).
Plaintiff Maricar Baesa should therefore be awarded Sixty Thousand Pesos (P60,000.00) as indemnity for the
death of her brothers, Harold Jim Baesa and Marcelino Baesa or Thirty Thousand Pesos (P30,000.00) for the
death of each brother.

The other items of damages awarded by respondent court which were not challenged by the petitioner are
hereby affirmed.

WHEREFORE, premises considered, the petition is DENIED, and the decision of respondent Court of Appeals
is hereby AFFIRMED with the modification that the amount of compensatory damages for the death of
Harold Jim Baesa and Marcelino Baesa are increased to Thirty Thousand Pesos (P30,000.00) each. chanroble s law lib rary

SO ORDERED.

Fernan (C.J.), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

Torts And Damages Case Digest: Pantranco

North Express, Inc. V. Maricar Baesa (1989)
G.R. 79050-51 November 14, 1989
Lessons Applicable: Last Clear Chance (Torts and Damages)

FACTS:
 Spouses Baesa, their 4 children, the Ico spouses and their son and 7
other people boarded a passenger jeep driven by David Ico to go to a
picnic in Isabela, to celebrate the 5th wedding anniversary of the Baesa
spouses
 While they were proceeding towards Malalam River at a speed of about
20 kph, a speeding PANTRANCO bus from Aparri, on a route to Manila,
encroached on the jeepney’s lane while negotiating a curve, and collided
with it.
 As a result, the entire Baesa family, except for their daughter Maricar
Baesa, as well as David Ico, died, and the rest suffered from injuries.
 Maricar Baesa, through her guardian filed separate actions for damages
arising from quasi-delict against PANTRANCO.
 PANTRANCO: alleged David Ico's negligence as a proximate cause of the
accident and invoked the defense of due diligence in the selection and
supervision of its driver.
 CA upheld RTC: favor of Baesa
ISSUE: W/N the last clear chance applies thereby making David Ico who
had the chance to avoid the collision negligent in failing to utilize with
reasonable care and competence

HELD: NO.
 Generally, the last clear change doctrine is invoked for the purpose of
making a defendant liable to a plaintiff who was guilty of prior or
antecedent negligence, although it may also be raised as a defense to
defeat claim for damages
 For the last clear chance doctrine to apply, it is necessary to show that
the person who allegedly has the last opportunity to avert the accident
was aware of the existence of the peril, or should, with exercise of due
care, have been aware of it
 there is nothing to show that the jeepney driver David Ico knew of the
impending danger
 When he saw at a distance that the approaching bus was encroaching on
his lane, he did not immediately swerve the jeepney to the dirt shoulder
on his right since he must have assumed that the bus driver will return
the bus to its own lane upon seeing the jeepney approaching form the
opposite direction
 Even assuming that the jeepney driver perceived the danger a few
seconds before the actual collision, he had no opportunity to avoid it
 last clear chance doctrine can never apply where the party charged is required to
act instantaneously, and if the injury cannot be avoided by the application of all
means at hand after the peril is or should have been discovered
5) Allied Bank vs PBI GR 188363

FIRST DIVISION

[G.R. No. 188363, February 27, 2013]

ALLIED BANKING CORPORATION, Petitioner, v. BANK OF THE PHILIPPINE ISLANDS,Respondents.

DECISION

VILLARAMA, JR., J.:

A collecting bank is guilty of contributory negligence when it accepted for deposit a post-dated check
notwithstanding that said check had been cleared by the drawee bank which failed to return the check within
the 24-hour reglementary period.

Petitioner Allied Banking Corporation appeals the Decision1 dated March 19, 2009 of the Court of Appeals
(CA) in CA-G.R. SP No. 97604 which set aside the Decision2 dated December 13, 2005 of the Regional Trial
Court (RTC) of Makati City, Branch 57 in Civil Case No. 05-418.

The factual antecedents:

On October 10, 2002, a check in the amount of P1,000,000.00 payable to “Mateo Mgt. Group International”
(MMGI) was presented for deposit and accepted at petitioner’s Kawit Branch. The check, post-dated “Oct. 9,
2003”, was drawn against the account of Marciano Silva, Jr. (Silva) with respondent Bank of the Philippine
Islands (BPI) Bel-Air Branch. Upon receipt, petitioner sent the check for clearing to respondent through the
Philippine Clearing House Corporation (PCHC).3

The check was cleared by respondent and petitioner credited the account of MMGI with P1,000,000.00. On
October 22, 2002, MMGI’s account was closed and all the funds therein were withdrawn. A month later,
Silva discovered the debit of P1,000,000.00 from his account. In response to Silva’s complaint, respondent
credited his account with the aforesaid sum.4

On March 21, 2003, respondent returned a photocopy of the check to petitioner for the reason: “Postdated.”
Petitioner, however, refused to accept and sent back to respondent a photocopy of the check. Thereafter,
the check, or more accurately, the Charge Slip, was tossed several times from petitioner to respondent, and
back to petitioner, until on May 6, 2003, respondent requested the PCHC to take custody of the check.
Acting on the request, PCHC directed the respondent to deliver the original check and informed it of PCHC’s
authority under Clearing House Operating Memo (CHOM) No. 279 dated 06 September 1996 to split 50/50
the amount of the check subject of a “Ping-Pong” controversy which shall be implemented thru the issuance
of Debit Adjustment Tickets against the outward demands of the banks involved. PCHC likewise encouraged
respondent to submit the controversy for resolution thru the PCHC Arbitration Mechanism.5

However, it was petitioner who filed a complaint6 before the Arbitration Committee, asserting that
respondent should solely bear the entire face value of the check due to its negligence in failing to return the
check to petitioner within the 24-hour reglementary period as provided in Section 20.17 of the Clearing
House Rules and Regulations8 (CHRR) 2000. Petitioner prayed that respondent be ordered to reimburse the
sum of P500,000.00 with 12% interest per annum, and to pay attorney’s fees and other arbitration
expenses.

In its Answer with Counterclaims,9 respondent charged petitioner with gross negligence for accepting the
post-dated check in the first place. It contended that petitioner’s admitted negligence was the sole and
proximate cause of the loss.

On December 8, 2004, the Arbitration Committee rendered its Decision10 in favor of petitioner and against
the respondent. First, it ruled that the situation of the parties does not involve a “Ping-Pong” controversy
since the subject check was neither returned within the reglementary time or through the PCHC return
window, nor coursed through the clearing facilities of the PCHC.

As to respondent’s direct presentation of a photocopy of the subject check, it was declared to be without
legal basis because Section 21.111 of the CHRR 2000 does not apply to post-dated checks. The Arbitration
Committee further noted that respondent not only failed to return the check within the 24-hour
reglementary period, it also failed to institute any formal complaint within the contemplation of Section
20.312 and it appears that respondent was already contented with the 50-50 split initially implemented by
the PCHC. Finding both parties negligent in the performance of their duties, the Committee applied the
doctrine of “Last Clear Chance” and ruled that the loss should be shouldered by respondent alone, thus:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff Allied Banking
Corporation and against defendant Bank of the Philippine Islands, ordering the latter to pay the former the
following:

(a) The sum of P500,000.00, plus interest thereon at the rate of 12% per annum counted from the date of
filing of the complaint;

(b) Attorney’s fees in the amount of P25,000.00;

(c) The sum of P2,090.00 as and by way of reimbursement of filing fees, plus the cost of suit.

SO ORDERED.13

Respondent filed a motion for reconsideration14 but it was denied by the PCHC Board of Directors under
Board Resolution No. 10-200515 dated April 22, 2005. The Board pointed out that what actually transpired
was a “ping-pong” “not of a check but of a Charge Slip (CS) enclosed in a carrier envelope that went back
and forth through the clearing system in apparent reaction by [petitioner] to the wrongful return via the
PCHC clearing system.” Respondent’s conduct was held as a “gross and unmistakably deliberate violation” of
Section 20.2,16 in relation to Section 20.1(e) of the CHRR 2000.17

On May 13, 2005, respondent filed a petition for review18 in the RTC claiming that PCHC erred in constricting
the return of a post-dated check to Section 20.1, overlooking the fact that Section 20.3 is also applicable
which provision necessarily contemplates defects that are referred to in Section 20.1 as both sections are
subsumed under the general provision (Section 20) on the return of regular items. Respondent also argued
that assuming it to be liable, the PCHC erred in holding it solely responsible and should bear entirely the
consequent loss considering that while respondent may have the “last” opportunity in proximity, it was
petitioner which had the longest, fairest and clearest chance to discover the mistake and avoid the
happening of the loss. Lastly, respondent assailed the award of attorney’s fees, arguing that PCHC’s
perception of “malice” against it and misuse of the clearing machinery is clearly baseless and unfounded.

In its Decision dated December 13, 2005, the RTC affirmed with modification the Arbitration Committee’s
decision by deleting the award of attorney’s fees. The RTC found no merit in respondent’s stance that
through inadvertence it failed to discover that the check was post-dated and that confirmation within 24
hours is often “elusive if not outright impossible” because a drawee bank receives hundreds if not thousands
of checks in an ordinary clearing day. Thus:

Petitioner admitted par. 4 in its Answer with Counterclaim and in its Memorandum, further adding that upon
receipt of the subject check “through inadvertence”, it did not notice that the check was postdated, hence,
petitioner did not return the same to respondent.”

These contradict petitioner’s belated contention that it discovered the defect only after the lapse of the
reglementary period. What the evidence on record discloses is that petitioner received the check on October
10, 2002, that it was promptly sent for clearing, that through inadvertence, it did not notice that the check
was postdated. Petitioner did not even state when it discovered the defect in the subject check.

Likewise, petitioner’s contention that its discovery of the defect was a non-issue in view of the admissions
made in its Answer is unavailing. The Court has noted the fact that the PCHC Arbitration Committee
conducted a clarificatory hearing during which petitioner admitted that its standard operating procedure as
regards confirmation of checks was not followed. No less than petitioner’s witness admitted that BPI tried to
call up the drawer of the check, as their procedure dictates when it comes to checks in large amounts.
However, having initially failed to contact the drawer, no follow up calls were made nor other actions taken.
Despite these, petitioner cleared the check. Having admitted making said calls, it is simply impossible
for petitioner to have missed the fact that the check was postdated.19 (Emphasis supplied)

With the denial of its motion for partial reconsideration, respondent elevated the case to the CA by filing a
petition for review under Rule 42 of the 1997 Rules of Civil Procedure, as amended.

By Decision dated March 19, 2009, the CA set aside the RTC judgment and ruled for a 60-40 sharing of the
loss as it found petitioner guilty of contributory negligence in accepting what is clearly a post-dated check.
The CA found that petitioner’s failure to notice the irregularity on the face of the check was a breach of its
duty to the public and a telling sign of its lack of due diligence in handling checks coursed through it. While
the CA conceded that the drawee bank has a bigger responsibility in the clearing of checks, it declared that
the presenting bank cannot take lightly its obligation to make sure that only valid checks are introduced into
the clearing system. According to the CA, considerations of public policy and substantial justice will be
served by allocating the damage on a 60-40 ratio, as it thus decreed:

WHEREFORE, the decision of the Regional Trial Court of Makati City (Branch 57) dated December 13, 2005 is
ANNULLED and SET ASIDE and judgment is rendered ordering petitioner to pay respondent Allied Banking
Corporation the sum of P100,000.00 plus interest thereon at the rate of 6% from July 10, 2003, which shall
become 12% per annum from finality hereof, until fully paid, aside from costs.

SO ORDERED.20

Its motion for reconsideration having been denied by the CA, petitioner is now before the Court seeking a
partial reversal of the CA’s decision and affirmance of the December 13, 2005 Decision of the RTC.

Essentially, the two issues for resolution are: (1) whether the doctrine of last clear chance applies in this
case; and (2) whether the 60-40 apportionment of loss ordered by the CA was justified.

As well established by the records, both petitioner and respondent were admittedly negligent in the
encashment of a check post-dated one year from its presentment.

Petitioner argues that the CA should have sustained PCHC’s finding that despite the antecedent negligence
of petitioner in accepting the post-dated check for deposit, respondent, by exercising reasonable care and
prudence, might have avoided injurious consequences had it not negligently cleared the check in question. It
pointed out that in applying the doctrine of last clear chance, the PCHC cited the case of Philippine Bank of
Commerce v. Court of Appeals21 which ruled that assuming the bank’s depositor, private respondent, was
negligent in entrusting cash to a dishonest employee, thus providing the latter with the opportunity to
defraud the company, it cannot be denied that petitioner bank had the last clear opportunity to avert the
injury incurred by its client, simply by faithfully observing their self-imposed validation procedure.

Petitioner underscores respondent’s failure to observe clearing house rules and its own standard operating
procedure which, the PCHC said constitute further negligence so much so that respondent should be solely
liable for the loss. Specifically, respondent failed to return the subject check within the 24-hour
reglementary period under Section 20.1 and to institute any formal complaint within the contemplation of
Section 20.3 of the CHRR 2000. The PCHC likewise faulted respondent for not making follow-up calls or
taking any other action after it initially attempted, without success, to contact by telephone the drawer of
the check, and clearing the check despite such lack of confirmation from its depositor in violation of its own
standard procedure for checks involving large amounts.

The doctrine of last clear chance, stated broadly, is that the negligence of the plaintiff does not preclude a
recovery for the negligence of the defendant where it appears that the defendant, by exercising reasonable
care and prudence, might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff’s
negligence.22 The doctrine necessarily assumes negligence on the part of the defendant and contributory
negligence on the part of the plaintiff, and does not apply except upon that assumption.23 Stated differently,
the antecedent negligence of the plaintiff does not preclude him from recovering damages caused by the
supervening negligence of the defendant, who had the last fair chance to prevent the impending harm by
the exercise of due diligence.24 Moreover, in situations where the doctrine has been applied, it was
defendant’s failure to exercise such ordinary care, having the last clear chance to avoid loss or injury, which
was the proximate cause of the occurrence of such loss or injury.25

In this case, the evidence clearly shows that the proximate cause of the unwarranted encashment of the
subject check was the negligence of respondent who cleared a post-dated check sent to it thru the PCHC
clearing facility without observing its own verification procedure. As correctly found by the PCHC and upheld
by the RTC, if only respondent exercised ordinary care in the clearing process, it could have easily noticed
the glaring defect upon seeing the date written on the face of the check “Oct. 9, 2003”. Respondent could
have then promptly returned the check and with the check thus dishonored, petitioner would have not
credited the amount thereof to the payee’s account. Thus, notwithstanding the antecedent negligence of the
petitioner in accepting the post-dated check for deposit, it can seek reimbursement from respondent the
amount credited to the payee’s account covering the check.

What petitioner omitted to mention is that in the cited case of Philippine Bank of Commerce v. Court of
Appeals,26 while the Court found petitioner bank as the culpable party under the doctrine of last clear chance
since it had, thru its teller, the last opportunity to avert the injury incurred by its client simply by faithfully
observing its own validation procedure, it nevertheless ruled that the plaintiff depositor (private respondent)
must share in the loss on account of its contributory negligence. Thus:

The foregoing notwithstanding, it cannot be denied that, indeed, private respondent was likewise negligent
in not checking its monthly statements of account. Had it done so, the company would have been alerted to
the series of frauds being committed against RMC by its secretary. The damage would definitely not have
ballooned to such an amount if only RMC, particularly Romeo Lipana, had exercised even a little vigilance in
their financial affairs. This omission by RMC amounts to contributory negligence which shall
mitigate the damages that may be awarded to the private respondent under Article 2179 of the
New Civil Code, to wit:
“x x x. 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.”
In view of this, we believe that the demands of substantial justice are satisfied by allocating the damage
on a 60-40 ratio. Thus, 40% of the damage awarded by the respondent appellate court, except the award
of P25,000.00 attorney’s fees, shall be borne by private respondent RMC; only the balance of 60% needs to
be paid by the petitioners. The award of attorney’s fees shall be borne exclusively by the
petitioners.27 (Italics in the original; emphasis supplied)

In another earlier case,28 the Court refused to hold petitioner bank solely liable for the loss notwithstanding
the finding that the proximate cause of the loss was due to its negligence. Since the employees of private
respondent bank were likewise found negligent, its claim for damages is subject to mitigation by the courts.
Thus:

Both banks were negligent in the selection and supervision of their employees resulting in the encashment
of the forged checks by an impostor. Both banks were not able to overcome the presumption of negligence
in the selection and supervision of their employees. It was the gross negligence of the employees of both
banks which resulted in the fraud and the subsequent loss. While it is true that petitioner BPI’s
negligence may have been the proximate cause of the loss, respondent CBC’s negligence
contributed equally to the success of the impostor in encashing the proceeds of the forged
checks. Under these circumstances, we apply Article 2179 of the Civil Code to the effect that while
respondent CBC may recover its losses, such losses are subject to mitigation by the courts. x x x

Considering the comparative negligence of the two (2) banks, we rule that the demands of substantial
justice are satisfied by allocating the loss of P2,413,215.16 and the costs of the arbitration proceedings in
the amount of P7,250.00 and the costs of litigation on a 60-40 ratio. Conformably with this ruling, no
interests and attorney’s fees can be awarded to either of the parties.29 (Emphasis supplied)

Apportionment of damages between parties who are both negligent was followed in subsequent cases
involving banking transactions notwithstanding the court’s finding that one of them had the last clear
opportunity to avoid the occurrence of the loss.

In Bank of America NT & SA v. Philippine Racing Club,30 the Court ruled:

In the case at bar, petitioner cannot evade responsibility for the loss by attributing negligence on the part of
respondent because, even if we concur that the latter was indeed negligent in pre-signing blank checks, the
former had the last clear chance to avoid the loss. To reiterate, petitioner’s own operations manager
admitted that they could have called up the client for verification or confirmation before honoring the
dubious checks. Verily, petitioner had the final opportunity to avert the injury that befell the respondent. x x
x Petitioner’s negligence has been undoubtedly established and, thus, pursuant to Art. 1170 of the NCC, it
must suffer the consequence of said negligence.

In the interest of fairness, however, we believe it is proper to consider respondent’s own

negligence to mitigate petitioner’s liability. Article 2179 of the Civil Code provides:

xxxx

Explaining this provision in Lambert v. Heirs of Ray Castillon, the Court held:

“The underlying precept on contributory negligence is that a plaintiff who is partly responsible for his own
injury should not be entitled to recover damages in full but must bear the consequences of his own
negligence. The defendant must thus be held liable only for the damages actually caused by his negligence.
xxx xxx xxx”

xxxx

Following established jurisprudential precedents, we believe the allocation of sixty percent (60%) of the
actual damages involved in this case (represented by the amount of the checks with legal interest) to
petitioner is proper under the premises. Respondent should, in light of its contributory negligence,
bear forty percent (40%) of its own loss.31 (Emphasis supplied)

In Philippine National Bank v. F.F. Cruz and Co., Inc.,32 the Court made a similar disposition, thus:

Given the foregoing, we find no reversible error in the findings of the appellate court that PNB was negligent
in the handling of FFCCI’s combo account, specifically, with respect to PNB’s failure to detect the forgeries in
the subject applications for manager’s check which could have prevented the loss. x x x PNB failed to meet
the high standard of diligence required by the circumstances to prevent the fraud. In Philippine Bank of
Commerce v. Court of Appeals and The Consolidated Bank & Trust Corporation v. Court of Appeals, where
the bank’s negligence is the proximate cause of the loss and the depositor is guilty of contributory
negligence, we allocated the damages between the bank and the depositor on a 60-40 ratio. We apply the
same ruling in this case considering that, as shown above, PNB’s negligence is the proximate cause of the
loss while the issue as to FFCCI’s contributory negligence has been settled with finality in G.R. No. 173278.
Thus, the appellate court properly adjudged PNB to bear the greater part of the loss consistent with these
rulings.33

“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 to which he is required to conform for his own
protection.”34 Admittedly, petitioner’s acceptance of the subject check for deposit despite the one year
postdate written on its face was a clear violation of established banking regulations and practices. In such
instances, payment should be refused by the drawee bank and returned through the PCHC within the 24-
hour reglementary period. As aptly observed by the CA, petitioner’s failure to comply with this basic policy
regarding post-dated checks was “a telling sign of its lack of due diligence in handling checks coursed
through it.”35

It bears stressing that “the diligence required of banks is more than that of a Roman pater familias or a
good father of a family. The highest degree of diligence is expected,”36 considering the nature of the banking
business that is imbued with public interest. While it is true that respondent’s liability for its negligent
clearing of the check is greater, petitioner cannot take lightly its own violation of the long-standing rule
against encashment of post-dated checks and the injurious consequences of allowing such checks into the
clearing system.

Petitioner repeatedly harps on respondent’s transgression of clearing house rules when the latter resorted to
direct presentment way beyond the reglementary period but glosses over its own negligent act that clearly
fell short of the conduct expected of it as a collecting bank. Petitioner must bear the consequences of its
omission to exercise extraordinary diligence in scrutinizing checks presented by its depositors.

Assessing the facts and in the light of the cited precedents, the Court thus finds no error committed by the
CA in allocating the resulting loss from the wrongful encashment of the subject check on a 60-40 ratio.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated March 19, 2009 of the
Court of Appeals in CA-G.R. SP No. 97604 is hereby AFFIRMED.
No pronouncement as to costs.

SO ORDERED.

Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Reyes, JJ., concur.

Endnotes:

Negotiable Instruments, Torts And Damages

Case Digest: BPI V. CA, China Banking Corp
And Phil. Clearing Housee Corp. (1992)
G.R. No. 102383 November 26, 1992
Lessons Applicable:

 Forgery (Negotiable Instruments Law)

 Special Rules on Experts and Professionals (Torts and Damages)
FACTS:
 October 9, 1981 afternoon: Eligia G. Fernando who had a money market placement
as evidenced by a promissory note with a maturity date of November 11, 1981
amounting to P2,462,243.19 called Reginaldo Eustaquio, Dealer Trainee in BPI's
Money Market Department to preterminate the placement
 but she was told "trading time" was over for that Friday, and suggested that she call
again the following week
 The promissory note the caller wanted to preterminate was a roll-over of an earlier
50-day money market placement that had matured on September 24, 1981
 Later that afternoon, Eustaquio conveyed the request for pretermination to Penelope
Bulan, but Eustaquio was left to attend to the pretermination process
 October 12, 1981 morning: Eligia followed up with Eustaquio.
 Eustaquio knew the real Eligia G. Fernando to be the Treasurer of Philippine
American Life Insurance Company (Philamlife) since he was handling Philamlife's
corporate money market account.
 But neither Eustaquio nor Bulan who originally handled Fernando's account, nor
anybody else at BPI, bothered to call up Fernando at her Philamlife office to verify
the request for pretermination
 Despite being informed that the placement would yield less than the maturity
value, Eligia still insisted
 Eustaquio proceeded to prepare the "purchase order slip" for the requested
pretermination as required by office procedure.
 The 2 cashier's checks, together with the papers consisting of the money market
placement was to be preterminated and the promissory note to be preterminated,
were sent to Gerlanda E. de Castro (Manager) and Celestino Sampiton,
Jr., (Administrative Assistant) in both signatories from BPI's Treasury Operations
Department.
 Having been singed, the checks now went to the dispatcher for delivery
 Later in the same morning, the same caller changed the delivery instructions that
she will personally pick them up the checks or send her niece.
 Eustaquio told her that if were her niece, a written authorization is required.
 The signature has been established to be forged although it has a "close similarity"
to the real signature of Eligia G. Fernando
 October 13, 1981 afternoon: a woman who represented herself to be Eligia G.
Fernando applied for a current account
 She was accompanied and introduced to Emily Sylianco Cuaso, Cash Supervisor, by
Antonio Concepcion whom Cuaso knew to have opened, earlier that year, an
account upon the introduction of Valentin Co, a long-standing "valued client" of
China Banking Corp. (CBC)
 However, Cuaso indicated that she was introduced by Valentin Co
 The final approval of the new current account is indicated on the application form by
the initials of Regina G. Dy, Cashier, who did not interview the new client but affixed
her initials on the application form after reviewing it.
 October 14, 1981: the woman deposited the 2 checks in controversy.
 Her endorsement was found to conform with the depositor's specimen signature.
 CBC's guaranty of prior endorsements and/or lack of endorsement was then
stamped
 withdrawals on Current Account was made through Checks payable to "cash"
 October 16, 1981 - P1M
 October 15, 1981- P48.5K through clearing from PNB
 October 19, 1981 - P370K
 November 4, 1981 - P4,100.00 through clearing from Far East Bank
 All these withdrawals were allowed on the basis of the verification of the drawer's
signature with the specimen signature on file and the sufficiency of the funds in the
account.
 However, the balance shown in the computerized teller terminal when a withdrawal
is serviced at the counter, unlike the ledger or usual statement prepared at month-
end, does not show the account's opening date, the amounts and dates of deposits
and withdrawals.
 The last withdrawal on November 4, 1981 with remaining balance of only P571.61
 November 11, 1981 (maturity date of Eligia G. Fernado's money market placement
with BPI): the real Eligia G. Fernando went to BPI for the roll-over of her placement
 She disclaimed having preterminated her placement on October 12, 1981.
 She executed an affidavit stating that while she was the payee of the two checks in
controversy, she never received nor endorsed them and that her purported
signature on the back of the checks was not hers but forged.
 With her surrender of the original of the promissory note evidencing the placement
which matured that day, BPI issued her a new promissory note to evidence a roll-
over of the placement
 November 12, 1981: Eligia supported w/ affidavit
 BPI returned the 2 checks in controversy to CBC for the reason "Payee's
endorsement forged"
 CBC returned the checks for reason "Beyond Clearing Time"
 CA afformed RTC: favored BPI
 BPI: present clearing guarantee requirement imposed on the representing or
collecting bank under the PCHC rules and regulations is independent of the
Negotiable Instruments Law
ISSUE: W/N BPI should be liable for the forged check because of the doctrine of last
clear chance

HELD: NO. Modified. BPI 60% CBC 40% of the loss

 Section 23 of the Negotiable Instruments Law thereof is not applicable in the light of
the absolute liability of the representing or collecting bank as regards forged
endorsements in consonance with the clearing guarantee requirement imposed upon
the presenting or collecting banks "as it is worded today."
 Administrative regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law, and should be for
the sole purpose of carrying into effect its general provisions. By such regulations,
of course, the law itself cannot be extended. (U.S. v. Tupasi Molina, supra)
 In case of discrepancy between the basic law and a rule or regulation issued to
implement said law the basic law prevails because said rule or regulation cannot go
beyond the terms and provisions of the basic law (People v. Lim)
 Section 23 of the Negotiable Instruments Law
When signature is forged or made without the authority of the person whose signature
it purports to be, it is wholly inoperative and no right to retain the instrument, or to
give discharge therefore, or to enforce payment thereof, against any party thereto, can
be acquired through or under such forged signature, unless the party against whom it is
sought to enforce such right is precluded from setting up the forgery or want of
authority.
 2 parts of the provision

1. GR: forged signature = "wholly inoperative" and payment made "through or under
such signature" = ineffectual or does not discharge the instrument
2. EX: when the party relying in the forgery is "precluded from setting up the forgery
or want of authority - negligence of the party invoking forgery
 BPI as drawee bank and CBC as representing/collecting bank were both negligent
resulting in the encashment of the forged checks
 BPI
 Not verifying the phone call
 officer who used to handle Eligia G. Fernando's account did not do anything
about the account's pre-termination
 No verification on Eligia'ssignature on the letter requesting the pre-termination
and the letter authorizing her niece to pick-up the checks, yet, her signature
was in BPI's file
 Failure to ask for the surrender of the promissory note evidencing the money
market placement that was supposedly pre-terminated
 CBC
 the opening of the impostor's current account in the name of Eligia G.
Fernando
 the deposit of account of the 2 checks in controversy
 the withdrawal of their proceeds
 Doctrine of Last Clear Chance: negligent acts of the 2 parties were not
contemporaneous, since the negligence of the one succeeded the negligence of the
another by an appreciable interval. Under these circumstances the law is that the
person who has the last fair chance to avoid the impending harm and fails to do so
is chargeable with the consequences, without reference to the prior negligence of
the other party
 It is not unnatural or unexpected that after taking the risk of impersonating Eligia G.
Fernando with the connivance of BPI's employees, the impostor would complete her
deception by encashing the forged checks. There is therefore, greater reason to rule
that the proximate cause of the payment of the forged checks by an impostor was
due to the negligence of petitioner BPI.
 Due care on the part of CBC could have prevented any loss. The Court cannot
ignore the fact that the CBC employees closed their eyes to the suspicious
circumstances of huge over-the-counter withdrawals made immediately after the
 account was opened. The opening of the account itself was accompanied by
inexplicable acts clearly showing negligence.
 while we do not apply the last clear chance doctrine as controlling in this case, still
the CBC employees had ample opportunity to avoid the harm which befell both CBC
and BPI. They let the opportunity slip by when the ordinary prudence expected of
bank employees would have sufficed to seize it
 While it is true that petitioner BPI's negligence may have been the proximate cause
of the loss, CBC's negligence contributed equally to the success of the impostor in
encashing the proceeds of the forged checks
 Article 2179 of the Civil Code to the effect that while CBC may recover its losses,
such losses are subject to mitigation by the court
 Both banks were negligent in the selection and supervision of their
employees resulting in the encashment of the forged checks by an
impostor.

6) Engada vs CA

SECOND DIVISION

[G.R. No. 140698. June 20, 2003]

ROGELIO ENGADA, petitioner, vs. HON. COURT OF APPEALS,

Former Fourteenth Division, Manila, and PEOPLE OF THE
PHILIPPINES, respondents.

DECISION
QUISUMBING, J.:

This petition for review seeks the reversal of the decision dated May 31,
[1]

1999 of the Court of Appeals in CA-G.R. CR No. 18358, which affirmed with
modification the judgment dated August 25, 1994, of the Regional Trial Court
[2]

of Iloilo City, Branch 29, in Criminal Case No. 36223. The RTC found
petitioner guilty beyond reasonable doubt of simple imprudence resulting in
physical injuries and damage to property, and sentenced him to (a) suffer
imprisonment for one month and one day of arresto mayor, (b) pay private
complainant, Mrs. Sheila Seyan, the amount of fifty one thousand pesos
(P51,000) for the total destruction of the Toyota Tamaraw jeepney, and one
hundred ten thousand pesos (P110,000) for her hospital and medical
expenses, and (c) pay the costs of suit. The CA increased the prison term
imposed on petitioner to four months of arresto mayor.
The facts culled from the records are as follows:
On November 29, 1989, at about 1:30 in the afternoon, Edwin Iran was
driving a blue Toyota Tamaraw jeepney bound for Iloilo City. On board was
Sheila Seyan, the registered owner of the Tamaraw. While traversing the road
along Barangay Acquit, Barotac Nuevo, the Tamaraw passengers allegedly
saw from the opposite direction a speeding Isuzu pick-up, driven by petitioner
Rogelio Engada. The pick-up had just negotiated a hilly gradient on the
highway. When it was just a few meters away from the Tamaraw, the Isuzu
pick-ups right signal light flashed, at the same time, it swerved to its left,
encroaching upon the lane of the Tamaraw and headed towards a head-on
collision course with it. Seyan shouted at Iran to avoid the pick-up. Iran
swerved to his left but the pick-up also swerved to its right. Thus, the pick-up
collided with the Tamaraw, hitting the latter at its right front passenger
side. The impact caused the head and chassis of the Tamaraw to separate
from its body. Seyan was thrown out of the Tamaraw and landed on a
ricefield. The pick-up stopped diagonally astride the center of the road.
Seyan and Iran were brought to Barotac Nuevo Medicare Hospital. Seyan [3]

was profusely bleeding from her nose and was in a state of shock with her
eyes closed. In the afternoon of the same day, November 29, 1989, she was
transferred to St. Pauls Hospital in Iloilo City where she was confined. Her
medical certificate revealed that she suffered a fracture on the right femur,
lacerated wound on the right foot, multiple contusions, abrasions, blunt
abdominal injury, and lacerations of the upper-lower pole of the right
kidney. She was discharged from the hospital only on January 15, 1990.
[4]

Seyan incurred P130,000 in medical expenses. The Toyota Tamaraw

jeepney ended up in the junk heap. Its total loss was computed at P80,000.
A criminal complaint for damage to property through reckless imprudence
with serious physical injuries was filed with the Municipal Trial Court of
Barotac Nuevo against petitioner Rogelio Engada and Edwin Iran. Probable
[5]

cause was found against petitioner, while the complaint against Iran was
dismissed. [6]
 Consequently, an Information was filed against petitioner charging him
with serious physical injuries and damage to property through reckless
imprudence, thus:

That on or about November 29, 1989, in the Municipality of Barotac Nuevo, Province
of Iloilo, Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused Rogelio Engada driving an Isuzu Pick-up with Plate No. SAR 117
owned by the Land Bank of the Philippines, did then and there wilfully, unlawfully
and with reckless imprudence drive said pick-up in a careless, reckless and imprudent
manner with disregard of traffic laws and regulations, and as a result of such negligent
and reckless driving the Isuzu Pick-up driven by the accused bumped a Toyota
Tamaraw jeep with Plate No. FBF 601 owned by Joelito and Sheila Seyan and driven
by Edwin Iran thereby causing damage to the Toyota Tamaraw in the amount of
P80,000.00 and serious physical injuries to Mrs. Sheila Seyan who was riding said
vehicle, the injuries barring complications will heal in more than 30 days.

CONTRARY TO LAW. [7]

After trial, the court rendered on August 25, 1994 a decision, disposing as
follows:

WHEREFORE, the Court, finding the accused guilty beyond reasonable doubt of
Simple Imprudence resulting [in] physical injuries and damage to property defined
and penalized in Article 263, paragraph 4 and in relation with Article 365, paragraph 2
of the Revised Penal Code, hereby sentences the accused Rogelio Engada to suffer
imprisonment of ONE (1) MONTH and ONE (1) DAY of arresto mayor.

Accused is further ordered to pay complainant Mrs. Sheila Seyan the amount
of P51,000.00 for the total destruction of the Toyota Tamaraw Jeepney
and P110,000.00 for indemnification of hospital and medical expenses, and to pay the
cost of the suit.

SO ORDERED. [8]

Petitioner appealed to the Court of Appeals. On May 31, 1999, the CA

dismissed the appeal and affirmed with modification the trial courts decision,
thus:

WHEREFORE, the instant appeal is hereby DISMISSED. Accordingly, the appealed

decision is hereby AFFIRMED with modification as to the penalty imposed upon the
accused who is hereby sentenced to suffer imprisonment of FOUR (4) MONTHS
of arresto mayor.
SO ORDERED. [9]

Petitioner filed a motion for reconsideration, but it was denied. Hence, the
instant petition, wherein petitioner raises the issue of:

WHETHER OR NOT THE FINDINGS OF RESPONDENT COURT OF APPEALS

ARE SUPPORTED BY THE EVIDENCE OR BASED ON A MISAPPREHENSION
OF FACTS RESULTING IN A MANIFESTLY MISTAKEN INFERENCE
SPECIFICALLY ON WHAT WAS THE PROXIMATE CAUSE OF THE
ACCIDENT AND WHOSE ACT WAS IT. [10]

Petitioner claims innocence and seeks acquittal. He contends that in this

case we should relax the rule that only legal questions can be raised in a
petition for review under Rule 45 of the Rules of Court. According to him, the
Court of Appeals misapprehended the facts, and erred in its conclusion as to
the proximate cause of the collision. He insists that the Court of Appeals erred
when it found him negligent for occupying the lane of the Tamaraw jeepney,
and then failing to return to his original lane at the safest and earliest
opportunity.
Petitioner further contends that the CA failed to consider that he already
relayed his intention to go back to his lane by flashing the pick-ups right signal
light. He submits that at that moment Iran, the driver of the Tamaraw, had no
more reason to swerve to his left. Had Iran not swerved to the left, according
to petitioner, the collision would have been avoided. It was Iran who was
clearly negligent, says petitioner. Citing our ruling in McKee v. Intermediate
Appellate Court, petitioner avers that although his act of occupying the
[11]

Tamaraws lane was the initial act in the chain of events, Irans swerving to the
left after petitioner flashed his right turn signal, constituted a sufficient
intervening event, which proximately caused the eventual injuries and
damages to private complainant.
Petitioner also claims that the Court of Appeals erred when it found that
the pick-up approached the Tamaraw at a fast speed. He maintains that this
was not borne by the evidence on record.
The Office of the Solicitor General, as counsel for the state, counters that
the Court of Appeals did not err in convicting the accused, now petitioner
herein. Petitioners negligence was the proximate cause of the accident,
according to the OSG, for the following reasons: First, petitioner for no
justifiable reason occupied the opposite lane. Second, while on the wrong
lane, petitioner was driving the Isuzu pick-up fast, and he returned to his own
lane only at the last minute. This left Iran, the driver of the Tamaraw, with no
opportunity to reflect on the safest way to avoid the accident. Irans swerving
to the left was his reaction to petitioners wrongful act, which appropriately
calls for the application of the emergency rule. The rationale of this rule is that
a person who is confronted with a sudden emergency might have no time for
thought, and he must make a prompt decision based largely upon impulse or
instinct. Thus, he cannot be held to the same standard of conduct as one who
had an opportunity to reflect, even though it later appears that he made the
wrong decision. Clearly, under the emergency rule petitioner cannot shift the
blame to Iran, concludes the OSG.
As to petitioners claim that there was no evidence showing that the pick-
up was running very fast, the OSG avers that this is rebutted by the testimony
of Seyan and Iran who both testified that petitioner drove the pick-up at a fast
speed when it encroached on their lane immediately before the collision.
Did the Court of Appeals err in finding that the action of petitioner, Rogelio
Engada, was the proximate cause of the collision? This is the crux of the
present petition.
In our view, petitioners attempt to pin the blame on Edwin Iran, the driver
of the Tamaraw, for the vehicular collision is unfounded. Iran swerved to the
left only to avoid petitioners pick-up, which was already on a head to head
position going against Irans Tamaraw jeepney immediately before the
vehicles collided. This fact has been established by the evidence on record.
No convincing proof was adduced by petitioner that the driver of the Tamaraw,
Iran, could have avoided a head-on collision.
We note that petitioner admitted his Isuzu pick-up intruded into the lane of
the Tamaraw jeepney. Prosecution witness Nelson Alobin, one of those who
went to the scene of the incident immediately, testified that when he arrived at
the place where the collision took place, he saw the pick-up positioned
diagonally at the center of the road. Its head was towards the direction of
[12]

Barotac Nuevo and the rear tires were just a few inches beyond the center of
the lane. Moving backwards facing Barotac Nuevo, at two arms length away
[13]

from the pick-up, Alobin also saw a tire mark, 12 inches long and located at
the left side of the center line going to the right side.
[14]

The above circumstance corroborates the testimony of both Seyan and

Iran that, immediately before the collision, the pick-up was not on its proper
lane but on the other lane (the left lane rather than the right) directly on
collision course with the Tamaraw jeepney. The tire mark reveals the short
distance between the two vehicles when the Isuzu pick-up attempted to return
to its proper lane.
 It is a settled rule that a driver abandoning his proper lane for the purpose
of overtaking another vehicle in an ordinary situation has the duty to see to it
that the road is clear and he should not proceed if he cannot do so in
safety. This rule is consistent with Section 41, paragraph (a) of R.A. 4136 as
[15]

amended, otherwise known as The Land Transportation and Traffic

Code, which provides:

Sec. 41. Restrictions on overtaking and passing. (a) The driver of a vehicle shall not
drive to the left side of the center line of a highway in overtaking or passing another
vehicle proceeding in the same direction, unless such left side is clearly visible and is
free of oncoming traffic for a sufficient distance ahead to permit such overtaking or
passing to be made in safety.

In the present case, there was only a distance of 30 meters from the
Tamaraw jeepney when the Isuzu pick-up abandoned its lane and swerved to
the left of the center line. In addition, petitioner was running at a fast clip
[16]

while traversing this lane. This was testified to by Seyan and Iran, unrebutted
by petitioner. The resulting damage to the Tamaraw jeepney, at the point
where the head and chassis were separated from the body, bolsters this
conclusion that petitioner was speeding. In our view, petitioner was negligent
in several ways, and his negligence was the proximate cause of the
collision. In abandoning his lane, he did not see to it first that the opposite lane
was free of oncoming traffic and was available for a safe passage. Further,
after seeing the Tamaraw jeepney ahead, petitioner did not slow down,
contrary to the rule set in Batangas Laguna Tayabas Bus Co. v. IAC, thus: [17]

[O]r if, after attempting to pass, the driver of the overtaking vehicle finds that he
cannot make the passage in safety, the latter must slacken his speed so as to avoid the
danger of a collision, even bringing his car to a stop if necessary.

For failing to observe the duty of diligence and care imposed on drivers of
vehicles abandoning their lane, petitioner must be held liable.
Iran could not be faulted when in his attempt to avoid the pick-up, he
swerved to his left. Petitioners acts had put Iran in an emergency situation
which forced him to act quickly. An individual who suddenly finds himself in a
situation of danger and is required to act without much time to consider the
best means that may be adopted to avoid the impending danger, is not guilty
of negligence if he fails to undertake what subsequently and upon reflection
may appear to be a better solution, unless the emergency was brought by his
own negligence. [18]
 Petitioner tries to extricate himself from liability by invoking the doctrine of
last clear chance. He avers that between him and Iran, the latter had the last
clear chance to avoid the collision, hence Iran must be held liable.
The doctrine of last clear chance states that a person who has the last
clear chance or opportunity of avoiding an accident, notwithstanding the
negligent acts of his opponent, is considered in law solely responsible for the
consequences of the accident. But as already stated on this point, no
[19]

convincing evidence was adduced by petitioner to support his invocation of

the abovecited doctrine. Instead, what has been shown is the presence of an
emergency and the proper application of the emergency rule. Petitioners act
of swerving to the Tamaraws lane at a distance of 30 meters from it and
driving the Isuzu pick-up at a fast speed as it approached the Tamaraw,
denied Iran time and opportunity to ponder the situation at all. There was no
clear chance to speak of. Accordingly, the Court of Appeals did not err in
holding petitioner responsible for the vehicular collision and the resulting
damages, including the injuries suffered by Mrs. Sheila Seyan and the total
loss of the Tamaraw jeepney. It also did not err in imposing on petitioner the
sentence of four (4) months of arresto mayor. [20]

WHEREFORE, the instant petition is DENIED for lack of merit. The

assailed decision of the Court of Appeals in CA-G.R. CR No. 18358 is
AFFIRMED. Costs against petitioner.
SO ORDERED.
Bellosillo, (Chairman), and Callejo, Sr., JJ., concur.
Austria-Martinez, J., on official leave.

Case Digest:

G.R. No. 140698 June 20, 2003

Lessons Applicable: Last Clear Chance, emergency rule (Torts and Damages)

Laws Applicable: Section 41, paragraph (a) of R.A. 4136

FACTS:
 November 29, 1989 1:30 pm: Edwin Iran was driving a blue Toyota Tamaraw jeepney with the
owner Sheila Seyan as passnger.
 The speeding Isuzu pick-up truck driven by Rogelio Engada came from the
opposing direction and swerved to its left encroaching upon the lane of the
Tamaraw. In attempt to avoid the pick-up, Seyan shouted at Iran to swerve to
the left but the Engada also swerved to its right hitting the Tamaraw at its right
front passenger side causing its head and chassis to separate from its body.
 Seyan was thrown out of the Tamaraw and landed on a ricefield. Seyan and Iran were
brought to Barotac Nuevo Medicare Hospital. Seyan suffered a fracture on the
right femur, lacerated wound on the right foot, multiple contusions, abrasions,
blunt abdominal injury, and lacerations of the upper-lower pole of the right
kidney. Upon discharge, she Seyan incurred P130,000 in medical expenses. The
Toyota Tamaraw jeepney ended up in the junk heap totalling a loss of P80,000
 MTC: Engada guilty of damage to property through reckless imprudence with
serious physical injuries
 CA: Affirmed MTC
 Engada appealed alleging that CA failed to consider that he already relayed his intention to
go back to his lane by flashing the pick-up’s right signal light. He submits that at that moment Iran,
the driver of the Tamaraw, had no more reason to swerve to his left
ISSUE: W/N under the doctrine of last clear chance Iran should be liable.

HELD: NO. CA affirmed.

 Engada's negligence was the proximate cause of the collision

 in abandoning his lane, he did not see to it first that the opposite lane was free of oncoming traffic
and was available for a safe passage
 after seeing the Tamaraw jeepney ahead, he did not slow down
 emergency rule
 An individual who suddenly finds himself in a situation of danger and is required
to act without much time to consider the best means that may be adopted to
avoid the impending danger, is not guilty of negligence if he fails to undertake
what subsequently and upon reflection may appear to be a better solution,
unless the emergency was brought by his own negligence - Iran cannot be
faulted
 at a distance of 30 meters from it and driving the Isuzu pick-up at a fast speed as it approached the
Tamaraw, denied Iran time and opportunity to ponder the situation at all. There was no clear chance
to speak of.
Labels: 2003, Case Digest, emergency rule, Engada v CA, G.R. No. 140698, june 20, Juris
Doctor, last clear chance, torts and damages, torts and damages case digest
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