9/9/23, 5:20 PM CentralBooks:Reader

448 SUPREME COURT REPORTS ANNOTATED

Africa, et al. vs. Caltex (Phil.), Inc., et al.

No. L-12986. March 31, 1966.

THE SPOUSES BERNABE AFRICA and SOLEDAD C. AFRICA, and the HEIRS OF
DOMINGA ONG, petitioners and appellants, vs. CALTEX (PHIL.), INC., MATEO
BOQUIREN and THE COURT OF APPEALS, respondents and appellees.

Evidence; Requisites for admissibility of entries in official records.—There are three requisites for
admissibility of evidence under Section 35, Rule 123, Rules of Court: (a) that the entry was made by a
public officer, or by another person, specially enjoined by law to do so; (b) that it was made by the public
officer in the performance of his duties, or by such other person in the performance of a duty specially
enjoined by law; and (c) that the public officer or other person had sufficient knowledge of the facts by
him slated, which must have been acquired by him personally or through official information (Moran,
Comments on the Rules of Court, Vol. 3, p. 393).
Same; Hearsay rule; Reports not considered an exception to hearsay rule.—The reports of the police
and fire departments do not constitute an exception to the hearsay rule. For, the facts stated therein
were not acquired by the reporting officers through official information, not having been given by the
informants pursuant to any duty to do so.
Same; Report submitted by a police officer in the performonce of his duties.—The report submitted by
a police officer in the performance of his duties, on the basis of his own personal observation of the facts
reported, may properly be considered as an exception to the hearsay rule.

449

VOL.16, MARCH 30, 1966 449

Africa, et al. vs. Caltex (Phil.), Inc., et al.

Same; Presumption of negligence under the doctrine of res ipsa loquitur.—Where the thing which
caused the injury complained of is shown to be under the management of the defendant or his servants
and the accident is such as in the ordinary course of things does not happen if those who have its
management or control use proper care, it affords reasonable evidence, in the absence of explanation by
the defendant, that the accident arose from want of care (45 C.J. 1193).
Same; Application of principle to the case at bar.—The gasoline-station, with all its appliances,
equipment and employees, was under the control of appellees. A fire occurred therein and spread to and
burned the neighboring houses. The person who knew or could have known how the fire started were the
appellees and their employees, but they gave no explanation thereof whatsoever. It is a fair and
reasonable inference that the incident happened because of want of care.

Torts; Quasi-delicts; Force majeure; Intervention of unforeseen and unexpected cause.—The intervention of an
unforeseen and unexpected cause is not sufficient to relieve a wrongdoer from consequences of negligence, if such
negligence directly and proximately cooperates with the independent cause in the resulting injury. (MacAfee v.
Traver’s Gas Corporation, 153 S.W. 2nd 442.)

Damages; Liability of owner of gasoline station; Case at bar.—A fire broke out at the Caltex service
station. It started while gasoline was being hosed from a tank into the underground storage. The fire
spread to and burned several neighboring houses owned by appellants. Issue: Whether Caltex should be
held liable for the damages caused to appellants. Held: This question depends on whether the operator of
the gasoline station was an independent contractor or an agent of Caltex. Under the license agreement
the operator would pay Caltex the purely nominal sum of P1.00 for the use of the premises and all
equipment therein. The operator could sell only Caltex products. Maintenance of the station and its
https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 1/10
9/9/23, 5:20 PM CentralBooks:Reader

equipment was subject to the approval, in other words control, of Caltex. The operator could not assign
or transfer his rights as licensee without the consent of Caltex. Termination of the contract was a right
granted only to Caltex but not to the operator. These provisions of the contract show that the operator
was virtually an employee of the Caltex, not an independent contractor. Hence, Caltex should be liable
for damages caused to appellants.

PETITION for review by certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Ross, Selph, Carrascoso & Janda for the respondents.
Bernabe Africa, etc. for the petitioners.
450

450 SUPREME COURT REPORTS ANNOTATED

Africa, et al. vs. Caltex (Phil.), Inc., et al.

MAKALINTAL., J.:

This case is before us on a petition for review of the decision of the Court of Appeals, which
affirmed that of the Court of First Instance of Manila dismissing petitioners’ second amended
complaint against respondents.
The action is for damages under Articles 1902 and 1903 of the old Civil Code. It appears
that in the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the
corner of Antipolo street and Rizal Avenue, Manila. It started while gasoline was being hosed
from a tank truck into the underground storage, right at the opening of the receiving tank
where the nozzle of the hose was inserted. The fire spread to and burned several neighboring
houses, including the personal properties and effects inside them. Their owners, among them
petitioners here, sued respondents Caltex (Phil.), Inc. and Mateo Boquiren, the first as alleged
owner of the station and the second as its agent in charge of operation. Negligence on the part
of both of them was attributed as the cause of the fire.
The trial court and the Court of Appeals found that petitioners failed to prove negligence
and that respondents had exercised due care in the premises and with respect to the
supervision of their employees.
The first question before Us refers to the admissibility of certain reports on the fire
prepared by the Manila Police and Fire Departments and by a certain Captain Tinio of the
Armed Forces of the Philippines. Portions of the first two reports are as follows:
1. Police Department report:—

“Investigation disclosed that at about 4:00 P.M. March 18, 1948, while Leandro Flores was transfenng
gasoline from a tank truck, plate No. T-5292 into the underground tank of the Caltex Gasoline Station
located at the corner of Rizal Avenue and Antipolo Street, this City, an unknown Filipino lighted a
Cigarette and threw the burning match stick near the main valve of the said underground tank. Due to
the gasoline fumes, fire suddenly blazed. Quick action of Leandro Flores in pulling off the gasoline hose
connecting the truck with the underground tank prevented a terrific explosion. However, the flames
scattered due

451

VOL. 16, MARCH 30, 1966 451

Africa, et al. vs. Caltex (Phil.), Inc., et al.

to the hose from which the gasoline was spouting. It burned the truck and the following accessorias and
residences.”
https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 2/10
9/9/23, 5:20 PM CentralBooks:Reader

2. The Fire Department report.—

“In connection with their allegation that the premises was (sic) subleased for the installation of a coca-
cola and cigarette stand, the complainants furnished this Office a copy of a photograph taken during the
fire and which is submitted herewith. It appears in this picture that there are in the premises a cocacola
cooler and a rack which according to information gathered in the neighborhood contained cigarettes and
matches, installed between the gasoline pumps and the underground tanks.”

The report of Captain Tinio reproduced information given by a certain Benito Morales
regarding the history of the gasoline station and what the chief of the fire department had told
him on the same subject.
The foregoing reports were ruled out as “double hearsay” by the Court of Appeals and hence
inadmissible. This ruling is now assigned as error. It is contended: first, that said reports were
admitted by the trial court without objection on the part of respondents; secondly, that with
respect to the police report (Exhibit V-Africa) which appears signed by a Detective Zapanta
allegedly “for Salvador Capacillo,” the latter was presented as witness but respondents waived
their right to cross-examine him although they had the opportunity to do so; and thirdly, that
in any event the said reports are admissible as an exception to the hearsay rule under section
35 of Rule 123, now Rule 130.
The first contention is not borne out by the record. The transcript of the hearing of
September 17, 1953 (pp. 167-170) shows that the reports in question, when offered as
evidence, were objected to by counsel for each of respondents on the ground that they were
hearsay and that they were “irrelevant, immaterial and impertinent.” Indeed, in the court’s
resolution only Exhibits J, K, K-5 and X-6 were admitted without objection; the admission of
the others, including the disputed ones, carried no such explanation.
On the second point, although Detective Capacillo did take the witness stand, he was not
examined and he did not testify as to the facts mentioned in his alleged report (signed by
Detective Zapanta). All he said was that he
452

452 SUPREME COURT REPORTS ANNOTATED

Africa, et al. vs. Caltex (Phil.), Inc., et al.

was one of those who investigated “the location of the fire and, if possible, gather witnesses as
to the occurrence, and that he brought the report with him. There was nothing, therefore, on
which he need be cross-examined; and the contents of the report, as to which he did not testify,
did not thereby become competent evidence. And even if he had testified, his testimony would
still have been objectionable as far as information gathered by him from third persons was
concerned.
Petitioners maintain, however, that the reports in themselves, that is, without further
testimonial evidence on their contents, fall within the scope of section 35, Rule 123, which
provides that “entries in official records made in the performance of his duty by a public officer
of the Philippines, or by a person in the performance of a duty specially enjoined by law,
are prima facie evidence of the facts’ therein stated.”
There are three requisites for admissibility under the rule just mentioned: (a) that the
entry was made by a public officer, or by another person specially enjoined by law to do so; (b)
that it was made by the public officer in the performance of his duties, or by such other person
in the performance of a duty specially enjoined by law; and (c) that the public officer or other
person had sufficient knowledge of the facts by him stated, which must have been acquired by
him personally or through official information (Moran, Comments on the Rules of Court, Vol. 3
[1957] p. 398).
Of the three requisites just stated, only the last need be considered here. Obviously the
material facts recited in the reports as to the cause and circumstances of the fire were not

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 3/10
9/9/23, 5:20 PM CentralBooks:Reader

within the personal knowledge of the officers who conducted the investigation. Was knowledge
of such facts, however, acquired by them through official information? As to some facts the
sources thereof are not even identified. Others are attributed to Leopoldo Medina, referred to
as an employee at the gas station where the fire occurred; to Leandro Flores, driver of the
tank truck from which gasoline was being transferred at the time to the underground tank of
the station; and to re-
453

VOL. 16, MARCH 30, 1966 453

Africa, et al. vs. Caltex (Phil.), Inc., et al.

spondent Mateo Boquiren, who could not, according to Exhibit V-Africa, give any reason as to
the origin of the fire. To qualify their statements as “official information” acquired by the
officers who prepared the reports, the persons who made the statements not only must have
personal1 knowledge of the facts stated but must have the duty to give such statements for
record.
The reports in question do not constitute an exception to the hearsay rule; the facts stated
therein were not acquired by the reporting officers through official information, not having
been given by the informants pursuant to any duty to do so.
The next question is whether or not, without proof as to the cause and origin of the fire, the
doctrine of res ipsa loquitur should apply so as to presume negligence on the part of appellees.
Both the trial court and the appellate court refused to apply the doctrine in the instant case on
the grounds that “as to (its) applicability x x x in the Philippines, there seems to be nothing
definite,” and that while the rules do not prohibit its adoption in appropriate cases, “in the
case at bar, however, we find no practical use for such doctrine.” The question deserves more
than such summary dismissal. The doctrine has actually been applied in this jurisdiction, in
the case of Espiritu vs. Philippine Power and Development Co. (CA-G-R. No. 3240-
R, September 20, 1949), wherein the decision of the Court of Appeals was penned by Mr.
Justice J.B.L. Reyes now a member of the Supreme Court.

________________
1 Thus, for instance, the record of a justice of the peace of marriage certificates transmitted to him by the
corresponding priest is admissible. The justice of the peace has no personal knowledge of the marriage, but it was
reported to him by a priest whose duty it was, under the law, to make the report for record purposes. Similarly, the
tax records of a provincial assessor are admissible even if the assessments were made by subordinates. So also are
entries of marriages made by a municipal treasurer in his official record, because he acquires knowledge thereof by
virtue of a statutory duty on the part of those authorized to solemnize marriages to send a copy of each marriage
contract solemnized by them to the local civil registra. (See Moran, Comments on the Rules of Court, Vol. 3 [1957] pp.
389-395.)

454

454 SUPREME COURT REPORTS ANNOTATED

Africa, et al. vs. Caltex (Phil.), Inc., et al.

The facts of that case are stated in the decision as follows:

“In the afternoon of May 5, 1946, while the plaintiff-appellee and other companions were loading grass
between the municipalities of Bay and Calauan, in the province of Laguna, with clear weather and
without any wind blowing, an electric transmission wire, installed and maintained by the defendant
Philippine Power and Development Co., Inc. alongside the road, suddenly parted, and one of the “broken
ends hit the head of the plaintiff as he was about to board the truck. As a result, plaintiff received the

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 4/10
9/9/23, 5:20 PM CentralBooks:Reader

full shock of 4,400 volts carried by the wire and was knocked unconscious to the ground. The electric
charge coursed through his body and caused extensive and serious multiple burns from skull to legs,
leaving the bone exposed in some parts and causing intense pain and wounds that were not completely
healed when the case was tried on June 18, 1947, over one year after the mishap.”

The defendant therein disclaimed liability on the ground that the plaintiff had failed to show
any specific act of negligence, but the appellate court overruled the defense under the doctrine
of res ipsa loquitur. The court said:
“The first point is directed against the sufficiency of plaintiff’s evidence to place appellant on its defense.
While it is the rule, as contended by the appellant, that in case of noncontractual negligence, or culpa
aquiliana, the burden of proof is on the plaintiff to establish that the proximate cause of his injury was
the negligence of the defendant, it is also a recognized principle that ‘where the thing which caused
injury, without fault of the injured person, is under the exclusive control of the defendant and the injury
is such as in the ordinary course of things does not occur if he having such control use proper care, it
affords reasonable evidence, in the absence of the explanation, that the injury arose from defendant’s
want of care.’
“And the burden of evidence is shifted to him to establish that he has observed due care and diligence.
(San Juan Light & Transit Co. v. Requena, 244 U.S. 89, 56 L. ed. 680.) This rule is known by the name
of res ipsa loquitur (the transaction speaks for itself), and is peculiarly applicable to the case at bar,
where it is unquestioned that the plaintiff had every right to be on the highway, and the electric wire
was under the sole control of defendant company. In the ordinary course of events, electric wires do not
part suddenly in fair weather and injure people, unless they are subjected to unusual strain and stress or
there are defects in their installation, maintenance and supervision; just as barrels do not ordinarily roll
out of the warehouse windows to injure passersby, unless some one was negligent. (Byrne v. Boadle, 2 H
& Co. 722; 159 Eng. Reprint 229, the

455

VOL. 16, MARCH 30, 1966 455

Africa, et al. vs. Caltex (Phil.), Inc., et al.

leading case that established that rule). Consequently, in the absence of contributory negligence (which
is admittedly not present), the fact that the wire snapped suffices to raise a reasonable presumption of
negligence in its installation, care and maintenance. Thereafter, as observed by Chief Baron Pollock, ‘if
there are any facts inconsistent with negligence, it is for the defendant to prove.’”

It is true of course that decisions of the Court of Appeals do not lay down doctrines binding on
the Supreme Court, but we do not consider this a reason for not applying the particular
doctrine of res ipsa loquitur in the case at bar. Gasoline is a highly combustible material, in
the storage and sale of which extreme care must be taken. On the other hand, fire is not
considered a fortuitous event, as it arises almost invariably from some act of man. A case
strikingly similar to the one before Us is Jones vs. Shell Petroleum Corporation, et al., 171 So.
447:

“Arthur O. Jones is the owner of a building in the city of Hammon which in the year 1934 was leased to
the Shell Petroleum Corporation for a gasoline filling station. On October 8, 1934, during the term of the
lease, while gasoline was being transferred from the tank wagon, also operated by the Shell Petroleum
Corporation, to the underground tank of the station, a fire started with resulting damages to the
building owned by Jones. Alleging that the damages to his building amounted to $516.95, Jones sued the
Shell Petroleum Corporation for the recovery of that amount. The judge of the district court, after
hearing the testimony, concluded that plaintiff was entitled to a recovery and rendered judgment in his
favor for $427.82. The Court of Appeals for the First Circuit reversed this judgment, on the ground the
testimony failed to show with reasonable certainty any negligence on the part of the Shell Petroleum
Corporation or any of its agents or employees. Plaintiff applied to this Court for a Writ of Review which
was granted, and the case is now before us for decision.”

In resolving the issue of negligence, the Supreme Court of Louisiana held:

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 5/10
9/9/23, 5:20 PM CentralBooks:Reader

“Plaintiff’s petition contains two distinct charges of negligence—one relating to the cause of the fire and
the other relating to the spreading of the gasoline about the filling station.
“Other than an expert to assess the damages caused plaintiff’s building by the fire, no witnesses were
placed on the stand by the defendant.
“Taking up plaintiff’s charge of negligence relating to the cause of the fire, we find it established by
the record that the filling station and the tank truck were under the control of the defendant and
operated by its agents or employees. We further

456

456 SUPREME COURT REPORTS ANNOTATED

Africa, et al. vs. Caltex (Phil.), Inc., et al.

find from the uncontradicted testimony of plaintiff’s witnesses that fire started in the underground tank
attached to the filling station while it was being filled from the tank truck and while both the tank and
the truck were in charge of and being operated by the agents or employees of the defendant, extended to
the hose and tank truck, and was communicated from the burning hose, tank truck, and escaping
gasoline to the building owned by the plaintiff.
“Predicated on these circumstances and the further circumstance of defendant’s failure to explain the
cause of the fire or to show its lack of knowledge of the cause, plaintiff has evoked the doctrine of res ipsa
loquitur. There are many cases in which the doctrine may be successfully invoked and this, we think, is
one of them.
“Where the thing which caused the injury complained of is shown to be under the management of
defendant or his servants and the accident is such as in the ordinary course of things does not happen if
those who have its management or control use proper care, it affords reasonable evidence, in absence of
explanation by defendant, that the accident arose from want of care. (45 C J. #768, p. 1193).
“This statement of the rule of res ipsa loquitur has been widely approved and adopted by the courts of
last resort. Some of the cases in this jurisdiction in which the doctrine has been applied are the following,
viz.: Maus v. Broderick, 51 La. Ann. 1153, 25 So. 977; Hebert v. Lake Charles Ice, etc., Co., 111 La. 522,
,35 So. 731, 64 L.R.A. 101, 100 Am. St. Rep. 505; Willis v. Vicksburg, etc., R. Co., 115 La. 53, 38 So.
892; Bentz v. Page, 115 La. 560, 39 So. 599.”

The principle enunciated in the aforequoted case applies with equal force here. The gasoline
station, with all its appliances, equipment and employees, was under the control of appellees.
A fire occurred therein and spread to and burned the neighboring houses. The persons who
knew or could have known how the fire started were appellees and their employees, but they
gave no explanation thereof whatsoever. It is a fair and reasonable inference that the incident
happened because of want of care.
In the report submitted by Captain Leoncio Mariano of the Manila Police Department (Exh.
X-l Africa) the following appears:

“Investigation of the basic complaint disclosed that the Caltex Gasoline Station complained of occupies a
lot approximately 10 m x 10 m at the southwest corner of Rizal Avenue and Antipolo. The location is
within a very busy business dis-

457

VOL. 16, MARCH 30, 1966 457

Africa, et al. vs. Caltex (Phil.), Inc., et al.

trict near the Obrero Market, a railroad crossing and very thickly populated neighborhood where a great
number of people mill around throughout the day until late at night. These circumstances put the
gasoline station in a situation primarily prejudicial to its operation because the passersby, those waiting
for buses or transportation, those waiting to cross the streets and others loafing around have to occupy
not only the sidewalks but also portion of the gasoline station itself. Whatever be the activities of these

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 6/10
9/9/23, 5:20 PM CentralBooks:Reader

people smoking or lighting a cigarette cannot be excluded and this constitute a secondary hazard to its
operation which in turn endangers the entire neighborhood to conflagration.
“Furthermore, aside from precautions already taken by its operator the concrete walls south and west
adjoining the neighborhood are only 2-1/2 meters high at most and cannot avoid the flames from leaping
over it in case of fire.
“Records show that there have been two cases of fire which caused not only material damages but
desperation and also panic in the neighborhood.
“Although the soft drinks stand had been eliminated, this gasoline service station is also used by its
operator as a garage and repair shop for his fleet of taxicabs numbering ten or more, adding another risk
to the possible outbreak of fire at this already small but crowded gasoline station.”

The foregoing report, having been submitted by a police officer in the performance of his
duties on the basis of his own personal observation of the facts reported, may properly be
considered as an exception to the hearsay rule. These facts, descriptive of the location and
objective circumstances surrounding the operation of the gasoline station in question,
strengthen the presumption of negligence under the doctrine of res ipsa loquitur, since on
their face they called for more stringent measures of caution than those which would satisfy
the standard of due diligence under ordinary circumstances. There is no more eloquent
demonstration of this than the statement of Leandro Flores before the police investigator.
Flores was the driver of the gasoline tank wagon who, alone and without assistance, was
transferring the contents thereof into the underground storage when the fire broke out. He
said: “Before loading the underground tank there were no people, but while the loading was
going on, there were people who went to drink coca-cola (at the coca-cola stand) which is about
a meter from the hole leading to
458

458 SUPREME COURT REPORTS ANNOTATED

Africa, et al. vs. Caltex (Phil.), Inc., et al.

the underground tank.” He added that when the tank was almost filled he went to the tank
truck to close the valve, and while he had his back turned to the “manhole” he heard someone
shout “fire.”
Even then the fire possibly would not have spread to the neighboring houses were it not for
another negligent omission on the part of defendants, namely, their failure to provide a
concrete wall high enough to prevent the flames from leaping over it. As it was the concrete
wall was only 2-1/2 meters high, and beyond that height it consisted merely of galvanized iron
sheets, which would predictably crumple and melt when subjected to intense heat.
Defendants’ negligence, therefore, was not only with respect to the cause of the fire but also
with respect to the spread thereof to the neighboring houses.
There is an admission on the part of Boquiren in his amended answer to the second
amended complaint that “the fire was caused through the acts of a stranger who, without
authority, or permission of answering defendant, passed through the gasoline station and
negligently threw a lighted match in the premises.” No evidence on this point was adduced,
but assuming the allegation to be true—certainly any unfavorable inference from the
admission may be taken against Boquiren—it does not extenuate his negligence. A decision of
the Supreme Court of Texas, upon facts analogous to those of the present case, states the rule
which we find acceptable here. “It is the rule that those who distribute a dangerous article or
agent owe a degree of protection to the public proportionate to and commensurate with a
danger involved x x x we think it is the generally accepted rule as applied to torts that ‘if the
effects of the actor’s negligent conduct actively and continuously operate to bring about harm
to another, the fact that the active and substantially simultaneous operation of the effects of a
third person’s innocent, tor-tious or criminal act is also a substantial factor in bringing about
the harm, does not protect the actor from liability.’ (Restatement of the Law of Torts, vol. 2, p.

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 7/10
9/9/23, 5:20 PM CentralBooks:Reader

1184, #439). Stated in another way, ‘The intervention of an unforeseen and unexpected cause,
is not sufficient to
459

VOL. 16, MARCH 30, 1966 459

Africa, et al. vs. Caltex (Phil.), Inc., et al.

relieve a wrongdoer from consequences of negligence, if such negligence directly and

proximately cooperates with the independent cause in the resulting injury.” (MacAfee, et al.
vs. Traver’s Gas Corporation, 153 S.W. 2nd 442.)
The next issue is whether Caltex should be held liable for the damages caused to
appellants. This issue depends on whether Boquiren was an independent contractor, as held
by the Court of Appeals, or an agent of Caltex. This question, in the light of the facts not
controverted, is one of law and hence may be passed upon by this Court. These facts are: (1)
Boquiren made an admission that he was an agent of Caltex; (2) at the time of the fire Caltex
owned the gasoline station and all the equipment therein; (3) Caltex exercised control over
Boquiren in the management of the station; (4) the delivery truck used in delivering gasoline
to the station had the name of CALTEX painted on it; and (5) the license to store gasoline at
the station was in the name of Caltex, which paid the license fees. (Exhibit T-Africa; Exhibit
U-Africa; Exhibit X-5 Africa; Exhibit X-6 Africa; Exhibit Y-Africa).
In Boquiren’s amended answer to the second amended complaint, he denied that he
directed one of his drivers to remove gasoline from the truck into the tank and alleged that the
“alleged driver, if one there was, was not in his employ, the driver being an employee of the
Caltex (Phil.) Inc. and/or the owners of the gasoline station.” It is true that Boquiren later on
amended his answer, and that among the changes was one to the effect that he was not acting
as agent of Caltex. But then again, in his motion to dismiss appellants’ second amended
complaint the ground alleged was that it stated no cause of action since under the allegations
thereof he was merely acting as agent of Caltex, such that he could not have incurred personal
liability. A motion to dismiss on this ground is deemed to be an admission of the facts alleged
in the complaint.
Caltex admits that it owned the gasoline station as well as the equipment therein, but
claims that the business conducted at the service station in question was owned and operated
by Boquiren. But Caltex did not present
460

460 SUPREME COURT REPORTS ANNOTATED

Africa, et al. vs. Caltex (Phil), Inc., et al.

any contract with Boquiren that would reveal the nature of their relationship at the time of
the fire. There must have been one in existence at that time. Instead, what was presented was
a license agreement manifestly tailored for purposes of this case, since it was entered into
shortly before the expiration of the one-year period it was intended to operate. This so-called
license agreement (Exhibit 5-Caltex) was executed on November 29, 1948, but made effective
as of January 1, 1948 so as to cover the date of the fire, namely, March 18, 1948. This
retroactivity provision is quite significant, and gives rise to the conclusion that it was designed
precisely to free Caltex from any responsibility with respect to the fire, as shown by the clause
that Caltex “shall not be liable for any injury to person or property while in the property
herein licensed, it being understood and agreed that LICENSEE (Boquiren) is not an
employee, representative or agent of LICENSOR (Caltex).”

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 8/10
9/9/23, 5:20 PM CentralBooks:Reader

But even if the license agreement were to govern, Boquiren can hardly be considered an
independent contractor. Under that agreement Boquiren would pay Caltex the purely nominal
sum of P1.00 for the use of the premises and all the equipment therein. He could sell only
Caltex products. Maintenance of the station and its equipment was subject to the approval, in
other words control, of Caltex. Boquiren could not assign or transfer his rights as licensee
without the consent of Caltex. The license agreement was supposed to be from January 1,
1948 to Decem-ember 31, 1948, and thereafter until terminated by Caltex upon two days prior
written notice. Caltex could at any time cancel and terminate the agreement in case Boquiren
ceased to sell Caltex products, or did not conduct the business with due diligence, in the
judgment of Caltex. Termination of the contract was therefore a right granted only to Caltex
but not to Boquiren. These provisions of the contract show the extent of the control of Caltex
over Boquiren. The control was such that the latter was virtually an employee of the former.
“Taking into consideration the fact that the operator owed his position to the company and the latter
could remove him or terminate his services at will; that the service station be-

461

VOL. 16, MARCH 30, 1966 461

Africa, et al. vs. Caltex (Phil.), Inc., et al.

longed to the company and bore its tradename and the operator sold only the products of the company;
that the equipment used by the operator belonged to the company and were just loaned to the operator
and the company took charge of their repair and maintenance; that an employee of the company
supervised the operator and conducted periodic inspection of the company’s gasoline and service station;
that the price of the products sold by the operator was fixed by the company and not by the operator; and
that the receipts signed by the operator indicated that he was a mere agent, the finding of the Court of
Appeals that the operator was an agent of the company and not an independent contractor should not be
disturbed.
“To determine the nature of a contract courts do not have or are not bound to rely upon the name or
title given it by the contracting parties, should thereby a controversy as to what they really had intended
to enter into, but the way the contracting parties do or perform their respective obligations stipulated or
agreed upon may be shown and inquired into, and should such performance conflict with the name or
title given the contract by the parties, the former must prevail over the latter!” (Shell Company of the
Philippines, Ltd. vs. Firemens’ Insurance Company of Newark, New Jersey, 100 Phil. 757).
“The written contract was apparently drawn for the purpose of creating the apparent relationship of
employer and independent contractor, and of avoiding liability for the negligence of the employees about
the station; but the company was not satisfied to allow such relationship to exist. The evidence shows
that it immediately assumed control, and proceeded to direct the method by which the work contracted
for should be performed. By reserving the right to terminate the contract at will, it retained the means of
compelling submission to its orders. Having elected to assume control and to direct the means and
methods by which the work has to be performed, it must be held liable for the negligence of those
performing service under its direction. We think the evidence was sufficient to sustain the verdict of the
jury.” (Gulf Refining Company v. Rogers, 57 S.W. 2d, 183).

Caltex further argues that the gasoline stored in the station belonged to Boquiren. But no
cash invoices were presented to show that Boquiren had bought said gasoline from Caltex.
Neither was there a sales contract to prove the same.
As found by the trial court the Africas sustained a loss of P9,005.80, after deducting the
amount of P2,000.00 collected by them on the insurance of the house. The deduction is now
challenged as erroneous on the ground that Article 2207 of the New Civil Code, which provides
462

462 SUPREME COURT REPORTS ANNOTATED

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 9/10
9/9/23, 5:20 PM CentralBooks:Reader

Jabonete, et al. vs. Monteverde, et al.

for the subrogation of the insurer to the rights of the insured, was not yet in effect when the
loss took place. However, regardless of the silence of the law on this point at that time, the
amount that should be recovered be measured by the damages actually suffered, otherwise the
principle prohibiting unjust enrichment would be violated. With respect to the claim of the
heirs of Ong P7,500.00 was adjudged by the lower court on the basis of the assessed value of
the property destroyed, namely, P1,500.00, disregarding the testimony of one of the Ong
children that said property was worth P4,000.00. We agree that the court erred, since it is of
common knowledge that the assessment for taxation purposes is not an accurate gauge of fair
market value, and in this case should not prevail over positive evidence of such value. The
heirs of Ong are therefore entitled to P10,000.00.
Wherefore, the decision appealed from is reversed and respondents-appellees are held liable
solidarily to appellants, and ordered to pay them the aforesaid sum of P9,005.80 and
P10,000.00, respectively, with interest from the filing of the complaint, and costs.

Chief Justice Bengzon and Justices Bautista Angela, Concepcion,

J.B.L. Reyes, Barrera, Regala, J.P. Bengzon, Zaldivar and Sanchez, concur. Mr. Justice
Dizon took no part.

Decision reversed.

Note.—As to the liability of a gas company for the damages caused by its burning tank
truck trailer, operated by its employees, see Standard Vacuum Oil Company vs. Tan, L-13048,
Feb. 27, 1960 and Tan vs. Standard Vacuum Oil Co. 91 Phil. 672.

__________________

https://www.central.com.ph/sfsreader/session/0000018a7940fea898cba9c1000d00d40059004a/t/?o=False 10/10