LEA MER INDUSTRIES, INC., vs. MALAYAN INSURANCE CO., INC.

GR. NO. 161745

September 30, 2005
Decision
Common carriers are bound to observe extraordinary diligence in their vigilance over the goods
entrusted to them, as required by the nature of their business and for reasons of public policy.
Consequently, the law presumes that common carriers are at fault or negligent for any loss or damage
to the goods that they transport. In the present case, the evidence submitted by petitioner to overcome
this presumption was sorely insufficient.
The Case
Before us is a Petition for Review [1] under Rule 45 of the Rules of Court, assailing the October
9, 2002 Decision[2] and the December 29, 2003 Resolution [3] of the Court of Appeals (CA) in CA-GR
CV No. 66028. The challenged Decision disposed as follows:
WHEREFORE, the appeal is GRANTED. The December 7, 1999 decision of
the Regional Trial Court of Manila, Branch 42 in Civil Case No. 92-63159 is hereby
REVERSED and SETASIDE. [Petitioner] is ordered to pay the [herein respondent]
the value of the lost cargo in the amount of P565,000.00. Costs against the [herein
petitioner].[4]
The assailed Resolution denied reconsideration.
The Facts
Ilian Silica Mining entered into a contract of carriage with Lea Mer Industries, Inc., for the
shipment of 900 metric tons of silica sand valued at P565,000.[5] Consigned to Vulcan Industrial and
Mining Corporation, the cargo was to be transported from Palawan to Manila. On October 25, 1991,
the silica sand was placed on board Judy VII, a barge leased by Lea Mer.[6] During the voyage, the
vessel sank, resulting in the loss of the cargo.[7]
Malayan Insurance Co., Inc., as insurer, paid Vulcan the value of the lost cargo. [8] To recover
the amount paid and in the exercise of its right of subrogation, Malayan demanded reimbursement
from Lea Mer, which refused to comply. Consequently, Malayan instituted a Complaint with the
Regional Trial Court (RTC) of Manila on September 4, 1992, for the collection of P565,000
representing the amount that respondent had paid Vulcan.[9]
On October 7, 1999, the trial court dismissed the Complaint, upon finding that the cause of the
loss was a fortuitous event.[10] The RTC noted that the vessel had sunk because of the bad weather
condition brought about by Typhoon Trining. The court ruled that petitioner had no advance
knowledge of the incoming typhoon, and that the vessel had been cleared by the Philippine Coast
Guard to travel from Palawan to Manila.[11]
Ruling of the Court of Appeals
Reversing the trial court, the CA held that the vessel was not seaworthy when it sailed for

Manila. Thus, the loss of the cargo was occasioned by petitioners fault, not by a fortuitous event.[12]
Hence, this recourse.[13]
The Issues
Petitioner states the issues in this wise:
A.
Whether or not the survey report of the cargo surveyor, Jesus Cortez, who had
not been presented as a witness of the said report during the trial of this case before the
lower court can be admitted in evidence to prove the alleged facts cited in the said
report.
B. Whether or not the respondent, Court of Appeals, had validly or legally reversed
the finding of fact of the Regional Trial Court which clearly and unequivocally held that
the loss of the cargo subject of this case was caused by fortuitous event for which herein
petitioner could not be held liable.
C.
Whether or not the respondent, Court of Appeals, had committed serious error
and grave abuse of discretion in disregarding the testimony of the witness from the
MARINA, Engr. Jacinto Lazo y Villegal, to the effect that the vessel Judy VII was
seaworthy at the time of incident and further in disregarding the testimony of the PAGASA weather specialist, Ms. Rosa Barba y Saliente, to the effect that typhoon Trining
did not hit Metro Manila or Palawan.[14]

In the main, the issues are as follows: (1) whether petitioner is liable for the loss of the cargo,
and (2) whether the survey report of Jesus Cortez is admissible in evidence.
The Courts Ruling
The Petition has no merit.
First Issue:
Liability for Loss of Cargo
Question of Fact
The resolution of the present case hinges on whether the loss of the cargo was due to a fortuitous
event. This issue involves primarily a question of fact, notwithstanding petitioners claim that it
pertains only to a question of law. As a general rule, questions of fact may not be raised in a petition
for review.[15] The present case serves as an exception to this rule, because the factual findings of the
appellate and the trial courts vary.[16] This Court meticulously reviewed the records, but found no
reason to reverse the CA.
Rule on Common Carriers
Common carriers are persons, corporations, firms or associations engaged in the business of

carrying or transporting passengers or goods, or both -- by land, water, or air -- when this service is
offered to the public for compensation.[17] Petitioner is clearly a common carrier, because it offers to
the public its business of transporting goods through its vessels.[18]
Thus, the Court corrects the trial courts finding that petitioner became a private carrier when
Vulcan chartered it.[19] Charter parties are classified as contracts of demise (or bareboat) and
affreightment, which are distinguished as follows:
Under the demise or bareboat charter of the vessel, the charterer will generally
be considered as owner for the voyage or service stipulated. The charterer mans the
vessel with his own people and becomes, in effect, the owner pro hac vice, subject to
liability to others for damages caused by negligence. To create a demise, the owner of a
vessel must completely and exclusively relinquish possession, command and navigation
thereof to the charterer; anything short of such a complete transfer is a contract of
affreightment (time or voyage charter party) or not a charter party at all.[20]
The distinction is significant, because a demise or bareboat charter indicates a business
undertaking that is private in character. [21] Consequently, the rights and obligations of the parties to a
contract of private carriage are governed principally by their stipulations, not by the law on common
carriers.[22]
The Contract in the present case was one of affreightment, as shown by the fact that it was
petitioners crew that manned the tugboat M/V Ayalit and controlled the barge Judy VII.[23] Necessarily,
petitioner was a common carrier, and the pertinent law governs the present factual circumstances.
Extraordinary Diligence Required
Common carriers are bound to observe extraordinary diligence in their vigilance over the goods
and the safety of the passengers they transport, as required by the nature of their business and for
reasons of public policy.[24] Extraordinary diligence requires rendering service with the greatest skill
and foresight to avoid damage and destruction to the goods entrusted for carriage and delivery.[25]
Common carriers are presumed to have been at fault or to have acted negligently for loss or
damage to the goods that they have transported.[26] This presumption can be rebutted only by proof that
they observed extraordinary diligence, or that the loss or damage was occasioned by any of the
following causes:[27]
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.[28]
Rule on Fortuitous Events
Article 1174 of the Civil Code provides that no person shall be responsible for a fortuitous

event which could not be foreseen, or which, though foreseen, was inevitable. Thus, if the loss or
damage was due to such an event, a common carrier is exempted from liability.
Jurisprudence defines the elements of a fortuitous event as follows: (a) the cause of the
unforeseen and unexpected occurrence, or the failure of the debtors to comply with their obligations,
must have been independent of human will; (b) the event that constituted the caso fortuito must have
been impossible to foresee or, if foreseeable, impossible to avoid; (c) the occurrence must have been
such as to render it impossible for the debtors to fulfill their obligation in a normal manner; and (d) the
obligor must have been free from any participation in the aggravation of the resulting injury to the
creditor.[29]
To excuse the common carrier fully of any liability, the fortuitous event must have been the
proximate and only cause of the loss.[30] Moreover, it should have exercised due diligence to prevent or
minimize the loss before, during and after the occurrence of the fortuitous event.[31]
Loss in the Instant Case
There is no controversy regarding the loss of the cargo in the present case. As the common
carrier, petitioner bore the burden of proving that it had exercised extraordinary diligence to avoid the
loss, or that the loss had been occasioned by a fortuitous event -- an exempting circumstance.
It was precisely this circumstance that petitioner cited to escape liability. Lea Mer claimed that
the loss of the cargo was due to the bad weather condition brought about by Typhoon Trining. [32]
Evidence was presented to show that petitioner had not been informed of the incoming typhoon, and
that the Philippine Coast Guard had given it clearance to begin the voyage. [33] On October 25, 1991,
the date on which the voyage commenced and the barge sank, Typhoon Trining was allegedly far from
Palawan, where the storm warning was only Signal No. 1.[34]
The evidence presented by petitioner in support of its defense of fortuitous event was sorely
insufficient. As required by the pertinent law, it was not enough for the common carrier to show that
there was an unforeseen or unexpected occurrence. It had to show that it was free from any fault -- a
fact it miserably failed to prove.
First, petitioner presented no evidence that it had attempted to minimize or prevent the loss
before, during or after the alleged fortuitous event.[35] Its witness, Joey A. Draper, testified that he
could no longer remember whether anything had been done to minimize loss when water started
entering the barge.[36] This fact was confirmed during his cross-examination, as shown by the
following brief exchange:
Atty. Baldovino, Jr.:
Other than be[a]ching the barge Judy VII, were there other precautionary
measure[s] exercised by you and the crew of Judy VII so as to prevent the los[s]
or sinking of barge Judy VII?
xxx

xxx

xxx

Atty. Baldovino, Jr.:

Your Honor, what I am asking [relates to the] action taken by the officers and
crew of tugboat Ayalit and barge Judy VII
x x x to prevent the sinking of
barge Judy VII?

xxx

xxx

xxx

Court:
Mr. witness, did the captain of that tugboat give any instruction on how to save
the barge Judy VII?
Joey Draper:
I can no longer remember sir, because that happened [a] long time ago.[37]
Second, the alleged fortuitous event was not the sole and proximate cause of the loss. There is
a preponderance of evidence that the barge was not seaworthy when it sailed for Manila. [38]
Respondent was able to prove that, in the hull of the barge, there were holes that might have caused or
aggravated the sinking.[39] Because the presumption of negligence or fault applied to petitioner, it was
incumbent upon it to show that there were no holes; or, if there were, that they did not aggravate the
sinking.
Petitioner offered no evidence to rebut the existence of the holes. Its witness, Domingo A.
Luna, testified that the barge was in tip-top or excellent condition, [40] but that he had not personally
inspected it when it left Palawan.[41]
The submission of the Philippine Coast Guards Certificate of Inspection of Judy VII, dated
July 31, 1991, did not conclusively prove that the barge was seaworthy.[42] The regularity of the
issuance of the Certificate is disputably presumed. [43] It could be contradicted by competent evidence,
which respondent offered. Moreover, this evidence did not necessarily take into account the actual
condition of the vessel at the time of the commencement of the voyage.[44]
Second Issue:
Admissibility of the Survey Report

Petitioner claims that the Survey Report[45] prepared by Jesus Cortez, the cargo surveyor, should
not have been admitted in evidence. The Court partly agrees. Because he did not testify during the
trial,[46] then the Report that he had prepared was hearsay and therefore inadmissible for the purpose of
proving the truth of its contents.
The Survey Report Not the Sole Evidence
The facts reveal that Cortezs Survey Report was used in the testimonies of respondents
witnesses -- Charlie M. Soriano; and Federico S. Manlapig, a cargo marine surveyor and the vicepresident of Toplis and Harding Company.[47] Soriano testified that the Survey Report had been used in
preparing the final Adjustment Report conducted by their company. [48] The final Report showed that
the barge was not seaworthy because of the existence of the holes. Manlapig testified that he had
prepared that Report after taking into account the findings of the surveyor, as well as the pictures and
the sketches of the place where the sinking occurred. [49] Evidently, the existence of the holes was
proved by the testimonies of the witnesses, not merely by Cortez Survey Report.

Rule on Independently
Relevant Statement
That witnesses must be examined and presented during the trial, [50] and that their testimonies
must be confined to personal knowledge is required by the rules on evidence, from which we quote:
Section 36. Testimony generally confined to personal knowledge; hearsay
excluded. A witness can testify only to those facts which he knows of his personal
knowledge; that is, which are derived from his own perception, except as otherwise
provided in these rules.[51]
On this basis, the trial court correctly refused to admit Jesus Cortezs Affidavit, which
respondent had offered as evidence.[52] Well-settled is the rule that, unless the affiant is presented as a
witness, an affidavit is considered hearsay.[53]
An exception to the foregoing rule is that on independently relevant statements. A report
made by a person is admissible if it is intended to prove the tenor, not the truth, of the statements. [54]
Independent of the truth or the falsity of the statement given in the report, the fact that it has been made
is relevant. Here, the hearsay rule does not apply.[55]
In the instant case, the challenged Survey Report prepared by Cortez was admitted only as part
of the testimonies of respondents witnesses. The referral to Cortezs Report was in relation to
Manlapigs final Adjustment Report. Evidently, it was the existence of the Survey Report that was
testified to. The admissibility of that Report as part of the testimonies of the witnesses was correctly
ruled upon by the trial court.
At any rate, even without the Survey Report, petitioner has already failed to overcome the
presumption of fault that applies to common carriers.
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution are
AFFIRMED. Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 159617
August 8, 2007
ROBERTO C. SICAM and AGENCIA de R.C. SICAM, INC., petitioners,
vs.
LULU V. JORGE and CESAR JORGE, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari filed by Roberto C. Sicam, Jr. (petitioner Sicam) and
Agencia deR.C. Sicam, Inc. (petitioner corporation) seeking to annul the Decision 1 of the Court of

Appeals dated March 31, 2003, and its Resolution2 dated August 8, 2003, in CA G.R. CV No. 56633.
It appears that on different dates from September to October 1987, Lulu V. Jorge (respondent Lulu)
pawned several pieces of jewelry with Agencia de R. C. Sicam located at No. 17 Aguirre Ave., BF
Homes Paraaque, Metro Manila, to secure a loan in the total amount of P59,500.00.
On October 19, 1987, two armed men entered the pawnshop and took away whatever cash and jewelry
were found inside the pawnshop vault. The incident was entered in the police blotter of the Southern
Police District, Paraaque Police Station as follows:
Investigation shows that at above TDPO, while victims were inside the office, two (2) male
unidentified persons entered into the said office with guns drawn. Suspects(sic) (1) went straight inside
and poked his gun toward Romeo Sicam and thereby tied him with an electric wire while suspects (sic)
(2) poked his gun toward Divina Mata and Isabelita Rodriguez and ordered them to lay (sic) face flat
on the floor. Suspects asked forcibly the case and assorted pawned jewelries items mentioned above.
Suspects after taking the money and jewelries fled on board a Marson Toyota unidentified plate
number.3
Petitioner Sicam sent respondent Lulu a letter dated October 19, 1987 informing her of the loss of her
jewelry due to the robbery incident in the pawnshop. On November 2, 1987, respondent Lulu then
wrote a letter4 to petitioner Sicam expressing disbelief stating that when the robbery happened, all
jewelry pawned were deposited with Far East Bank near the pawnshop since it had been the practice
that before they could withdraw, advance notice must be given to the pawnshop so it could withdraw
the jewelry from the bank. Respondent Lulu then requested petitioner Sicam to prepare the pawned
jewelry for withdrawal on November 6, 1987 but petitioner Sicam failed to return the jewelry.
On September 28, 1988, respondent Lulu joined by her husband, Cesar Jorge, filed a complaint against
petitioner Sicam with the Regional Trial Court of Makati seeking indemnification for the loss of
pawned jewelry and payment of actual, moral and exemplary damages as well as attorney's fees. The
case was docketed as Civil Case No. 88-2035.
Petitioner Sicam filed his Answer contending that he is not the real party-in-interest as the pawnshop
was incorporated on April 20, 1987 and known as Agencia de R.C. Sicam, Inc; that petitioner
corporation had exercised due care and diligence in the safekeeping of the articles pledged with it and
could not be made liable for an event that is fortuitous.
Respondents subsequently filed an Amended Complaint to include petitioner corporation.
Thereafter, petitioner Sicam filed a Motion to Dismiss as far as he is concerned considering that he is
not the real party-in-interest. Respondents opposed the same. The RTC denied the motion in an Order
dated November 8, 1989.5
After trial on the merits, the RTC rendered its Decision 6 dated January 12, 1993, dismissing
respondents complaint as well as petitioners counterclaim. The RTC held that petitioner Sicam could
not be made personally liable for a claim arising out of a corporate transaction; that in the Amended
Complaint of respondents, they asserted that "plaintiff pawned assorted jewelries in defendants'
pawnshop"; and that as a consequence of the separate juridical personality of a corporation, the
corporate debt or credit is not the debt or credit of a stockholder.
The RTC further ruled that petitioner corporation could not be held liable for the loss of the pawned
jewelry since it had not been rebutted by respondents that the loss of the pledged pieces of jewelry in
the possession of the corporation was occasioned by armed robbery; that robbery is a fortuitous event
which exempts the victim from liability for the loss, citing the case of Austria v. Court of Appeals;7 and
that the parties transaction was that of a pledgor and pledgee and under Art. 1174 of the Civil Code,
the pawnshop as a pledgee is not responsible for those events which could not be foreseen.
Respondents appealed the RTC Decision to the CA. In a Decision dated March 31, 2003, the CA
reversed the RTC, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the instant Appeal is GRANTED, and the Decision dated

January 12, 1993,of the Regional Trial Court of Makati, Branch 62, is hereby REVERSED and SET
ASIDE, ordering the appellees to pay appellants the actual value of the lost jewelry amounting to
P272,000.00, and attorney' fees of P27,200.00.8
In finding petitioner Sicam liable together with petitioner corporation, the CA applied the doctrine of
piercing the veil of corporate entity reasoning that respondents were misled into thinking that they
were dealing with the pawnshop owned by petitioner Sicam as all the pawnshop tickets issued to them
bear the words "Agencia de R.C. Sicam"; and that there was no indication on the pawnshop tickets that
it was the petitioner corporation that owned the pawnshop which explained why respondents had to
amend their complaint impleading petitioner corporation.
The CA further held that the corresponding diligence required of a pawnshop is that it should take
steps to secure and protect the pledged items and should take steps to insure itself against the loss of
articles which are entrusted to its custody as it derives earnings from the pawnshop trade which
petitioners failed to do; that Austriais not applicable to this case since the robbery incident happened in
1961 when the criminality had not as yet reached the levels attained in the present day; that they are at
least guilty of contributory negligence and should be held liable for the loss of jewelries; and that
robberies and hold-ups are foreseeable risks in that those engaged in the pawnshop business are
expected to foresee.
The CA concluded that both petitioners should be jointly and severally held liable to respondents for
the loss of the pawned jewelry.
Petitioners motion for reconsideration was denied in a Resolution dated August 8, 2003.
Hence, the instant petition for review with the following assignment of errors:
THE COURT OF APPEALS ERRED AND WHEN IT DID, IT OPENED ITSELF TO REVERSAL,
WHEN IT ADOPTED UNCRITICALLY (IN FACT IT REPRODUCED AS ITS OWN WITHOUT IN
THE MEANTIME ACKNOWLEDGING IT) WHAT THE RESPONDENTS ARGUED IN THEIR
BRIEF, WHICH ARGUMENT WAS PALPABLY UNSUSTAINABLE.
THE COURT OF APPEALS ERRED, AND WHEN IT DID, IT OPENED ITSELF TO REVERSAL
BY THIS HONORABLE COURT, WHEN IT AGAIN ADOPTED UNCRITICALLY (BUT
WITHOUT ACKNOWLEDGING IT) THE SUBMISSIONS OF THE RESPONDENTS IN THEIR
BRIEF WITHOUT ADDING ANYTHING MORE THERETO DESPITE THE FACT THAT THE
SAID ARGUMENT OF THE RESPONDENTS COULD NOT HAVE BEEN SUSTAINED IN VIEW
OF UNREBUTTED EVIDENCE ON RECORD.9
Anent the first assigned error, petitioners point out that the CAs finding that petitioner Sicam is
personally liable for the loss of the pawned jewelries is "a virtual and uncritical reproduction of the
arguments set out on pp. 5-6 of the Appellants brief."10
Petitioners argue that the reproduced arguments of respondents in their Appellants Brief suffer from
infirmities, as follows:
(1) Respondents conclusively asserted in paragraph 2 of their Amended Complaint that Agencia de
R.C. Sicam, Inc. is the present owner of Agencia de R.C. Sicam Pawnshop, and therefore, the CA
cannot rule against said conclusive assertion of respondents;
(2) The issue resolved against petitioner Sicam was not among those raised and litigated in the trial
court; and
(3) By reason of the above infirmities, it was error for the CA to have pierced the corporate veil since a
corporation has a personality distinct and separate from its individual stockholders or members.
Anent the second error, petitioners point out that the CA finding on their negligence is likewise an
unedited reproduction of respondents brief which had the following defects:
(1) There were unrebutted evidence on record that petitioners had observed the diligence required of
them, i.e, they wanted to open a vault with a nearby bank for purposes of safekeeping the pawned
articles but was discouraged by the Central Bank (CB) since CB rules provide that they can only store

the pawned articles in a vault inside the pawnshop premises and no other place;
(2) Petitioners were adjudged negligent as they did not take insurance against the loss of the pledged
jelweries, but it is judicial notice that due to high incidence of crimes, insurance companies refused to
cover pawnshops and banks because of high probability of losses due to robberies;
(3) In Hernandez v. Chairman, Commission on Audit (179 SCRA 39, 45-46), the victim of robbery was
exonerated from liability for the sum of money belonging to others and lost by him to robbers.
Respondents filed their Comment and petitioners filed their Reply thereto. The parties subsequently
submitted their respective Memoranda.
We find no merit in the petition.
To begin with, although it is true that indeed the CA findings were exact reproductions of the
arguments raised in respondents (appellants) brief filed with the CA, we find the same to be not
fatally infirmed. Upon examination of the Decision, we find that it expressed clearly and distinctly the
facts and the law on which it is based as required by Section 8, Article VIII of the Constitution. The
discretion to decide a case one way or another is broad enough to justify the adoption of the arguments
put forth by one of the parties, as long as these are legally tenable and supported by law and the facts
on records.11
Our jurisdiction under Rule 45 of the Rules of Court is limited to the review of errors of law
committed by the appellate court. Generally, the findings of fact of the appellate court are deemed
conclusive and we are not duty-bound to analyze and calibrate all over again the evidence adduced by
the parties in the court a quo.12 This rule, however, is not without exceptions, such as where the factual
findings of the Court of Appeals and the trial court are conflicting or contradictory 13 as is obtaining in
the instant case.
However, after a careful examination of the records, we find no justification to absolve petitioner
Sicam from liability.
The CA correctly pierced the veil of the corporate fiction and adjudged petitioner Sicam liable together
with petitioner corporation. The rule is that the veil of corporate fiction may be pierced when made as a
shield to perpetrate fraud and/or confuse legitimate issues. 14 The theory of corporate entity was not
meant to promote unfair objectives or otherwise to shield them.15
Notably, the evidence on record shows that at the time respondent Lulu pawned her jewelry, the
pawnshop was owned by petitioner Sicam himself. As correctly observed by the CA, in all the
pawnshop receipts issued to respondent Lulu in September 1987, all bear the words "Agencia de R. C.
Sicam," notwithstanding that the pawnshop was allegedly incorporated in April 1987. The receipts
issued after such alleged incorporation were still in the name of "Agencia de R. C. Sicam," thus
inevitably misleading, or at the very least, creating the wrong impression to respondents and the public
as well, that the pawnshop was owned solely by petitioner Sicam and not by a corporation.
Even petitioners counsel, Atty. Marcial T. Balgos, in his letter16 dated October 15, 1987 addressed to
the Central Bank, expressly referred to petitioner Sicam as the proprietor of the pawnshop
notwithstanding the alleged incorporation in April 1987.
We also find no merit in petitioners' argument that since respondents had alleged in their Amended
Complaint that petitioner corporation is the present owner of the pawnshop, the CA is bound to decide
the case on that basis.
Section 4 Rule 129 of the Rules of Court provides that an admission, verbal or written, made by a party
in the course of the proceedings in the same case, does not require proof. The admission may be
contradicted only by showing that it was made through palpable mistake or that no such admission was
made.
Thus, the general rule that a judicial admission is conclusive upon the party making it and does not
require proof, admits of two exceptions, to wit: (1) when it is shown that such admission was made
through palpable mistake, and (2) when it is shown that no such admission was in fact made. The

latter exception allows one to contradict an admission by denying that he made such an
admission.17
The Committee on the Revision of the Rules of Court explained the second exception in this wise:
x x x if a party invokes an "admission" by an adverse party, but cites the admission "out of context,"
then the one making the "admission" may show that he made no "such" admission, or that his
admission was taken out of context.
x x x that the party can also show that he made no "such admission", i.e., not in the sense in
which the admission is made to appear.
That is the reason for the modifier "such" because if the rule simply states that the admission may be
contradicted by showing that "no admission was made," the rule would not really be providing for a
contradiction of the admission but just a denial.18 (Emphasis supplied).
While it is true that respondents alleged in their Amended Complaint that petitioner corporation is the
present owner of the pawnshop, they did so only because petitioner Sicam alleged in his Answer to the
original complaint filed against him that he was not the real party-in-interest as the pawnshop was
incorporated in April 1987. Moreover, a reading of the Amended Complaint in its entirety shows that
respondents referred to both petitioner Sicam and petitioner corporation where they (respondents)
pawned their assorted pieces of jewelry and ascribed to both the failure to observe due diligence
commensurate with the business which resulted in the loss of their pawned jewelry.
Markedly, respondents, in their Opposition to petitioners Motion to Dismiss Amended Complaint,
insofar as petitioner Sicam is concerned, averred as follows:
Roberto C. Sicam was named the defendant in the original complaint because the pawnshop tickets
involved in this case did not show that the R.C. Sicam Pawnshop was a corporation. In paragraph 1 of
his Answer, he admitted the allegations in paragraph 1 and 2 of the Complaint. He merely added "that
defendant is not now the real party in interest in this case."
It was defendant Sicam's omission to correct the pawnshop tickets used in the subject transactions in
this case which was the cause of the instant action. He cannot now ask for the dismissal of the
complaint against him simply on the mere allegation that his pawnshop business is now incorporated.
It is a matter of defense, the merit of which can only be reached after consideration of the evidence to
be presented in due course.19
Unmistakably, the alleged admission made in respondents' Amended Complaint was taken "out of
context" by petitioner Sicam to suit his own purpose. Ineluctably, the fact that petitioner Sicam
continued to issue pawnshop receipts under his name and not under the corporation's name militates
for the piercing of the corporate veil.
We likewise find no merit in petitioners' contention that the CA erred in piercing the veil of corporate
fiction of petitioner corporation, as it was not an issue raised and litigated before the RTC.
Petitioner Sicam had alleged in his Answer filed with the trial court that he was not the real party-ininterest because since April 20, 1987, the pawnshop business initiated by him was incorporated and
known as Agencia deR.C. Sicam. In the pre-trial brief filed by petitioner Sicam, he submitted that as
far as he was concerned, the basic issue was whether he is the real party in interest against whom the
complaint should be directed.20 In fact, he subsequently moved for the dismissal of the complaint as to
him but was not favorably acted upon by the trial court. Moreover, the issue was squarely passed upon,
although erroneously, by the trial court in its Decision in this manner:
x x x The defendant Roberto Sicam, Jr likewise denies liability as far as he is concerned for the reason
that he cannot be made personally liable for a claim arising from a corporate transaction.
This Court sustains the contention of the defendant Roberto C. Sicam, Jr. The amended complaint itself
asserts that "plaintiff pawned assorted jewelries in defendant's pawnshop." It has been held that " as a
consequence of the separate juridical personality of a corporation, the corporate debt or credit is not the
debt or credit of the stockholder, nor is the stockholder's debt or credit that of a corporation.21

Clearly, in view of the alleged incorporation of the pawnshop, the issue of whether petitioner Sicam is
personally liable is inextricably connected with the determination of the question whether the doctrine
of piercing the corporate veil should or should not apply to the case.
The next question is whether petitioners are liable for the loss of the pawned articles in their
possession.
Petitioners insist that they are not liable since robbery is a fortuitous event and they are not negligent at
all.
We are not persuaded.
Article 1174 of the Civil Code provides:
Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen or which, though foreseen, were inevitable.
Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is therefore,
not enough that the event should not have been foreseen or anticipated, as is commonly believed but it
must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening is not
impossibility to foresee the same. 22
To constitute a fortuitous event, the following elements must concur: (a) the cause of the unforeseen
and unexpected occurrence or of the failure of the debtor to comply with obligations must be
independent of human will; (b) it must be impossible to foresee the event that constitutes the caso
fortuito or, if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to
render it impossible for the debtor to fulfill obligations in a normal manner; and, (d) the obligor must
be free from any participation in the aggravation of the injury or loss. 23
The burden of proving that the loss was due to a fortuitous event rests on him who invokes it. 24 And, in
order for a fortuitous event to exempt one from liability, it is necessary that one has committed no
negligence or misconduct that may have occasioned the loss. 25
It has been held that an act of God cannot be invoked to protect a person who has failed to take steps to
forestall the possible adverse consequences of such a loss. One's negligence may have concurred with
an act of God in producing damage and injury to another; nonetheless, showing that the immediate or
proximate cause of the damage or injury was a fortuitous event would not exempt one from liability.
When the effect is found to be partly the result of a person's participation -- whether by active
intervention, neglect or failure to act -- the whole occurrence is humanized and removed from the rules
applicable to acts of God. 26
Petitioner Sicam had testified that there was a security guard in their pawnshop at the time of the
robbery. He likewise testified that when he started the pawnshop business in 1983, he thought of
opening a vault with the nearby bank for the purpose of safekeeping the valuables but was discouraged
by the Central Bank since pawned articles should only be stored in a vault inside the pawnshop. The
very measures which petitioners had allegedly adopted show that to them the possibility of robbery
was not only foreseeable, but actually foreseen and anticipated. Petitioner Sicams testimony, in effect,
contradicts petitioners defense of fortuitous event.
Moreover, petitioners failed to show that they were free from any negligence by which the loss of the
pawned jewelry may have been occasioned.
Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the possibility of
negligence on the part of herein petitioners. In Co v. Court of Appeals,27 the Court held:
It is not a defense for a repair shop of motor vehicles to escape liability simply because the damage or
loss of a thing lawfully placed in its possession was due to carnapping. Carnapping per se cannot be
considered as a fortuitous event. The fact that a thing was unlawfully and forcefully taken from
another's rightful possession, as in cases of carnapping, does not automatically give rise to a
fortuitous event. To be considered as such, carnapping entails more than the mere forceful taking

of another's property. It must be proved and established that the event was an act of God or was
done solely by third parties and that neither the claimant nor the person alleged to be negligent
has any participation. In accordance with the Rules of Evidence, the burden of proving that the
loss was due to a fortuitous event rests on him who invokes it which in this case is the private
respondent. However, other than the police report of the alleged carnapping incident, no other
evidence was presented by private respondent to the effect that the incident was not due to its fault. A
police report of an alleged crime, to which only private respondent is privy, does not suffice to
establish the carnapping. Neither does it prove that there was no fault on the part of private respondent
notwithstanding the parties' agreement at the pre-trial that the car was carnapped. Carnapping does not
foreclose the possibility of fault or negligence on the part of private respondent.28
Just like in Co, petitioners merely presented the police report of the Paraaque Police Station on the
robbery committed based on the report of petitioners' employees which is not sufficient to establish
robbery. Such report also does not prove that petitioners were not at fault.
On the contrary, by the very evidence of petitioners, the CA did not err in finding that petitioners are
guilty of concurrent or contributory negligence as provided in Article 1170 of the Civil Code, to wit:
Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor thereof, are liable for damages.29
Article 2123 of the Civil Code provides that with regard to pawnshops and other establishments which
are engaged in making loans secured by pledges, the special laws and regulations concerning them
shall be observed, and subsidiarily, the provisions on pledge, mortgage and antichresis.
The provision on pledge, particularly Article 2099 of the Civil Code, provides that the creditor shall
take care of the thing pledged with the diligence of a good father of a family. This means that
petitioners must take care of the pawns the way a prudent person would as to his own property.
In this connection, Article 1173 of the Civil Code further 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 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.
We expounded in Cruz v. Gangan30 that negligence is the omission to do something which a reasonable
man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do;
or the doing of something which a prudent and reasonable man would not do. 31 It is want of care
required by the circumstances.
A review of the records clearly shows that petitioners failed to exercise reasonable care and caution
that an ordinarily prudent person would have used in the same situation. Petitioners were guilty of
negligence in the operation of their pawnshop business. Petitioner Sicam testified, thus:
Court:
Q. Do you have security guards in your pawnshop?
A. Yes, your honor.
Q. Then how come that the robbers were able to enter the premises when according to you there was a
security guard?
A. Sir, if these robbers can rob a bank, how much more a pawnshop.
Q. I am asking you how were the robbers able to enter despite the fact that there was a security guard?
A. At the time of the incident which happened about 1:00 and 2:00 o'clock in the afternoon and it
happened on a Saturday and everything was quiet in the area BF Homes Paraaque they pretended to
pawn an article in the pawnshop, so one of my employees allowed him to come in and it was only
when it was announced that it was a hold up.

Q. Did you come to know how the vault was opened?

A. When the pawnshop is official (sic) open your honor the pawnshop is partly open. The combination
is off.
Q. No one open (sic) the vault for the robbers?
A. No one your honor it was open at the time of the robbery.
Q. It is clear now that at the time of the robbery the vault was open the reason why the robbers were
able to get all the items pawned to you inside the vault.
A. Yes sir.32
revealing that there were no security measures adopted by petitioners in the operation of the pawnshop.
Evidently, no sufficient precaution and vigilance were adopted by petitioners to protect the pawnshop
from unlawful intrusion. There was no clear showing that there was any security guard at all. Or if
there was one, that he had sufficient training in securing a pawnshop. Further, there is no showing that
the alleged security guard exercised all that was necessary to prevent any untoward incident or to
ensure that no suspicious individuals were allowed to enter the premises. In fact, it is even doubtful
that there was a security guard, since it is quite impossible that he would not have noticed that the
robbers were armed with caliber .45 pistols each, which were allegedly poked at the employees. 33
Significantly, the alleged security guard was not presented at all to corroborate petitioner Sicam's
claim; not one of petitioners' employees who were present during the robbery incident testified in
court.
Furthermore, petitioner Sicam's admission that the vault was open at the time of robbery is clearly a
proof of petitioners' failure to observe the care, precaution and vigilance that the circumstances justly
demanded. Petitioner Sicam testified that once the pawnshop was open, the combination was already
off. Considering petitioner Sicam's testimony that the robbery took place on a Saturday afternoon and
the area in BF Homes Paraaque at that time was quiet, there was more reason for petitioners to have
exercised reasonable foresight and diligence in protecting the pawned jewelries. Instead of taking the
precaution to protect them, they let open the vault, providing no difficulty for the robbers to cart away
the pawned articles.
We, however, do not agree with the CA when it found petitioners negligent for not taking steps to
insure themselves against loss of the pawned jewelries.
Under Section 17 of Central Bank Circular No. 374, Rules and Regulations for Pawnshops, which took
effect on July 13, 1973, and which was issued pursuant to Presidential Decree No. 114, Pawnshop
Regulation Act, it is provided that pawns pledged must be insured, to wit:
Sec. 17. Insurance of Office Building and Pawns- The place of business of a pawnshop and the pawns
pledged to it must be insured against fire and against burglary as well as for the latter(sic), by an
insurance company accredited by the Insurance Commissioner.
However, this Section was subsequently amended by CB Circular No. 764 which took effect on
October 1, 1980, to wit:
Sec. 17 Insurance of Office Building and Pawns The office building/premises and pawns of a
pawnshop must be insured against fire. (emphasis supplied).
where the requirement that insurance against burglary was deleted. Obviously, the Central Bank
considered it not feasible to require insurance of pawned articles against burglary.
The robbery in the pawnshop happened in 1987, and considering the above-quoted amendment, there
is no statutory duty imposed on petitioners to insure the pawned jewelry in which case it was error for
the CA to consider it as a factor in concluding that petitioners were negligent.
Nevertheless, the preponderance of evidence shows that petitioners failed to exercise the diligence
required of them under the Civil Code.
The diligence with which the law requires the individual at all times to govern his conduct varies with
the nature of the situation in which he is placed and the importance of the act which he is to perform. 34

Thus, the cases ofAustria v. Court of Appeals,35 Hernandez v. Chairman, Commission on Audit36 and
Cruz v. Gangan37 cited by petitioners in their pleadings, where the victims of robbery were exonerated
from liability, find no application to the present case.
In Austria, Maria Abad received from Guillermo Austria a pendant with diamonds to be sold on
commission basis, but which Abad failed to subsequently return because of a robbery committed upon
her in 1961. The incident became the subject of a criminal case filed against several persons. Austria
filed an action against Abad and her husband (Abads) for recovery of the pendant or its value, but the
Abads set up the defense that the robbery extinguished their obligation. The RTC ruled in favor of
Austria, as the Abads failed to prove robbery; or, if committed, that Maria Abad was guilty of
negligence. The CA, however, reversed the RTC decision holding that the fact of robbery was duly
established and declared the Abads not responsible for the loss of the jewelry on account of a fortuitous
event. We held that for the Abads to be relieved from the civil liability of returning the pendant under
Art. 1174 of the Civil Code, it would only be sufficient that the unforeseen event, the robbery, took
place without any concurrent fault on the debtors part, and this can be done by preponderance of
evidence; that to be free from liability for reason of fortuitous event, the debtor must, in addition to the
casus itself, be free of any concurrent or contributory fault or negligence.38
We found in Austria that under the circumstances prevailing at the time the Decision was promulgated
in 1971, the City of Manila and its suburbs had a high incidence of crimes against persons and property
that rendered travel after nightfall a matter to be sedulously avoided without suitable precaution and
protection; that the conduct of Maria Abad in returning alone to her house in the evening carrying
jewelry of considerable value would have been negligence per se and would not exempt her from
responsibility in the case of robbery. However we did not hold Abad liable for negligence since, the
robbery happened ten years previously; i.e., 1961, when criminality had not reached the level of
incidence obtaining in 1971.
In contrast, the robbery in this case took place in 1987 when robbery was already prevalent and
petitioners in fact had already foreseen it as they wanted to deposit the pawn with a nearby bank for
safekeeping. Moreover, unlike in Austria, where no negligence was committed, we found petitioners
negligent in securing their pawnshop as earlier discussed.
In Hernandez, Teodoro Hernandez was the OIC and special disbursing officer of the Ternate Beach
Project of the Philippine Tourism in Cavite. In the morning of July 1, 1983, a Friday, he went to Manila
to encash two checks covering the wages of the employees and the operating expenses of the project.
However for some reason, the processing of the check was delayed and was completed at about 3 p.m.
Nevertheless, he decided to encash the check because the project employees would be waiting for their
pay the following day; otherwise, the workers would have to wait until July 5, the earliest time, when
the main office would open. At that time, he had two choices: (1) return to Ternate, Cavite that same
afternoon and arrive early evening; or (2) take the money with him to his house in Marilao, Bulacan,
spend the night there, and leave for Ternate the following day. He chose the second option, thinking it
was the safer one. Thus, a little past 3 p.m., he took a passenger jeep bound for Bulacan. While the jeep
was on Epifanio de los Santos Avenue, the jeep was held up and the money kept by Hernandez was
taken, and the robbers jumped out of the jeep and ran. Hernandez chased the robbers and caught up
with one robber who was subsequently charged with robbery and pleaded guilty. The other robber who
held the stolen money escaped. The Commission on Audit found Hernandez negligent because he had
not brought the cash proceeds of the checks to his office in Ternate, Cavite for safekeeping, which is
the normal procedure in the handling of funds. We held that Hernandez was not negligent in deciding
to encash the check and bringing it home to Marilao, Bulacan instead of Ternate, Cavite due to the
lateness of the hour for the following reasons: (1) he was moved by unselfish motive for his coemployees to collect their wages and salaries the following day, a Saturday, a non-working, because to
encash the check on July 5, the next working day after July 1, would have caused discomfort to

laborers who were dependent on their wages for sustenance; and (2) that choosing Marilao as a safer
destination, being nearer, and in view of the comparative hazards in the trips to the two places, said
decision seemed logical at that time. We further held that the fact that two robbers attacked him in
broad daylight in the jeep while it was on a busy highway and in the presence of other passengers
could not be said to be a result of his imprudence and negligence.
Unlike in Hernandez where the robbery happened in a public utility, the robbery in this case took place
in the pawnshop which is under the control of petitioners. Petitioners had the means to screen the
persons who were allowed entrance to the premises and to protect itself from unlawful intrusion.
Petitioners had failed to exercise precautionary measures in ensuring that the robbers were prevented
from entering the pawnshop and for keeping the vault open for the day, which paved the way for the
robbers to easily cart away the pawned articles.
In Cruz, Dr. Filonila O. Cruz, Camanava District Director of Technological Education and Skills
Development Authority (TESDA), boarded the Light Rail Transit (LRT) from Sen. Puyat Avenue to
Monumento when her handbag was slashed and the contents were stolen by an unidentified person.
Among those stolen were her wallet and the government-issued cellular phone. She then reported the
incident to the police authorities; however, the thief was not located, and the cellphone was not
recovered. She also reported the loss to the Regional Director of TESDA, and she requested that she be
freed from accountability for the cellphone. The Resident Auditor denied her request on the ground
that she lacked the diligence required in the custody of government property and was ordered to pay
the purchase value in the total amount of P4,238.00. The COA found no sufficient justification to grant
the request for relief from accountability. We reversed the ruling and found that riding the LRT cannot
per se be denounced as a negligent act more so because Cruzs mode of transit was influenced by time
and money considerations; that she boarded the LRT to be able to arrive in Caloocan in time for her 3
pm meeting; that any prudent and rational person under similar circumstance can reasonably be
expected to do the same; that possession of a cellphone should not hinder one from boarding the LRT
coach as Cruz did considering that whether she rode a jeep or bus, the risk of theft would have also
been present; that because of her relatively low position and pay, she was not expected to have her own
vehicle or to ride a taxicab; she did not have a government assigned vehicle; that placing the cellphone
in a bag away from covetous eyes and holding on to that bag as she did is ordinarily sufficient care of a
cellphone while traveling on board the LRT; that the records did not show any specific act of
negligence on her part and negligence can never be presumed.
Unlike in the Cruz case, the robbery in this case happened in petitioners' pawnshop and they were
negligent in not exercising the precautions justly demanded of a pawnshop.
WHEREFORE, except for the insurance aspect, the Decision of the Court of Appeals dated March 31,
2003 and its Resolution dated August 8, 2003, are AFFIRMED.
Costs against petitioners.
SO ORDERED.
CASE DIGEST
SICAM vs. JORGE
G.R. No. 159617 August 8, 2007
Facts:
Lulu Jorge pawned several pieces of jewelry with Agencia de R. C. Sicam to secure a loan.
On October 19, 1987, two armed men entered the pawnshop and took away whatever cash and jewelry

were found inside the pawnshop vault.

Sicam sent respondent Lulu a letter informing her of the loss of her jewelry due to the robbery incident
in the pawnshop. Respondent Lulu expressed disbelief stating that when the robbery happened, all
jewelry pawned were deposited with Far East Bank near the pawnshop since it had been the practice
that before they could withdraw, advance notice must be given to the pawnshop so it could withdraw
the jewelry from the bank. Respondent Lulu then requested petitioner Sicam to prepare the pawned
jewelry for withdrawal on but petitioner Sicam failed to return the jewelry.
Respondent Lulu is seeking indemnification for the loss of pawned jewelry and payment of damages.
Petitioner is interposing the defense of caso fortuito on the robber committed against the pawnshop.
Issue:
WON Sicam is liable for the loss of the pawned articles in their possession? YES
Held:
Fortuitous events by definition are extraordinary events not foreseeable or avoidable. It is therefore,
not enough that the event should not have been foreseen or anticipated, as is commonly believed but it
must be one impossible to foresee or to avoid. The mere difficulty to foresee the happening is not
impossibility to foresee the same.
Robbery per se, just like carnapping, is not a fortuitous event. It does not foreclose the possibility of
negligence on the part of herein petitioners.
A review of the records clearly shows that petitioners failed to exercise reasonable care and caution
that an ordinarily prudent person would have used in the same situation. Petitioners were guilty of
negligence in the operation of their pawnshop business. No sufficient precaution and vigilance were
adopted by petitioners to protect the pawnshop from unlawful intrusion. There was no clear showing
that there was any security guard at all.
Sicams admission that the vault was open at the time of robbery is clearly a proof of petitioners
failure to observe the care, precaution and vigilance that the circumstances justly demanded. Petitioner
Sicam testified that once the pawnshop was open, the combination was already off. Instead of taking
the precaution to protect them, they let open the vault, providing no difficulty for the robbers to cart
away the pawned articles.

In contrast, the robbery in this case took place in 1987 when robbery was already prevalent and
petitioners in fact had already foreseen it as they wanted to deposit the pawn with a nearby bank for
safekeeping. Moreover, unlike in Austria, where no negligence was committed, we found petitioners
negligent in securing their pawnshop as earlier discussed.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 146224

January 26, 2007

Virginia Real, petitioner

vs.
SISENANDO H. BELO, respondents.

DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court assailing the Resolution[1] dated June 16, 2000 of the Court of Appeals (CA) which dismissed
outright the petition for review of Virginia Real (petitioner) in CA-G.R. SP No. 58799, and the CA
Resolution[2] dated November 27, 2000 which denied her Motion for Reconsideration.
The facts of the case:
Petitioner owned and operated the Wasabe Fastfood stall located at the Food Center of the
Philippine Womens University (PWU) along Taft Avenue, Malate, Manila. Sisenando H. Belo
(respondent) owned and operated the BS Masters fastfood stall, also located at the Food Center of
PWU.

Around 7:00 oclock in the morning of January 25, 1996, a fire broke out at petitioners Wasabe
Fastfood stall. The fire spread and gutted other fastfood stalls in the area, including respondents stall.
An investigation on the cause of the fire by Fire Investigator SFO1 Arnel C. Pinca (Pinca) revealed that
the fire broke out due to the leaking fumes coming from the Liquefied Petroleum Gas (LPG) stove and
tank installed at petitioners stall. For the loss of his fastfood stall due to the fire, respondent demanded
compensation from petitioner. However, petitioner refused to accede to respondents demand.
Hence, respondent filed a complaint for damages against petitioner before the Metropolitan
Trial Court, Branch 24, Manila (MeTC), docketed as Civil Case No. 152822. [3] Respondent alleged
that petitioner failed to exercise due diligence in the upkeep and maintenance of her cooking
equipments, as well as the selection and supervision of her employees; that petitioners negligence was
the proximate cause of the fire that gutted the fastfood stalls.[4]
In her Answer dated September 23, 1996, petitioner denied liability on the grounds that the fire
was a fortuitous event and that she exercised due diligence in the selection and supervision of her
employees.[5]
After trial, the MeTC rendered its Decision[6] dated April 5, 1999 in favor of the respondent, the
dispositive portion of which reads:
WHEREFORE, in light of the foregoing, judgment is hereby rendered in favor
of the plaintiff and against the defendant ordering the latter:
1) To pay the plaintiff the sum of P50,000.00 representing temperate or
moderate damages; and
2) To pay the plaintiff the sum of P25,000.00 as and for attorneys fees
and litigation expenses.
The counterclaim filed by the defendant is hereby DENIED FOR LACK OF
MERIT.
SO ORDERED.[7]
The MeTC held that the investigation conducted by the appropriate authority revealed that the
fire broke out due to the leaking fumes coming from the LPG stove and tank installed at
petitionersfastfood stall; that factual circumstances did not show any sign of interference by any force
of nature to infer that the fire occurred due to fortuitous event; that the petitioner failed to exercise due
diligence, precaution, and vigilance in the conduct of her business, particularly, in maintaining the

safety of her cooking equipment as well as in the selection and supervision of her employees; that even
if petitioner passes the fault to her employees, Article 2180 of the Civil Code finds application; that in
the absence of supporting evidence, the amount of actual damages and unrealized profits prayed for by
respondent cannot be granted; that, nonetheless, respondent is entitled to temperate damages since
respondent sustained pecuniary loss, though its true value cannot, from the very nature of the case, be
proved with certainty.
Dissatisfied, petitioner filed an appeal with the Regional Trial Court, Branch 43, Manila (RTC),
docketed as Civil Case No. 99-94606, insisting that the fire was a fortuitous event. On November 26,
1999, the RTC affirmed the Decision of the MeTC but increased the amount of temperate damages
awarded to the respondent from P50,000.00 to P80,000.00.[8]
Petitioner filed a Motion for Reconsideration contending that the increase in the award of
temperate damages is unreasonable since she also incurred losses from the fire.
In its Order dated April 12, 2000, the RTC denied petitioners Motion for Reconsideration
holding that it cannot disregard evidence showing that the fire originated from petitioners fastfood
stall; that the increased amount of temperate damages awarded to respondent is not a full compensation
but only a fair approximate of what he lost due to the negligence of petitioners workers.[9]
Petitioner then filed a Petition for Review with the CA, docketed as CA-G.R. SP No. 58799. [10]
On June 16, 2000, the CA issued a Resolution dismissing the petition for being procedurally
flawed/deficient.[11] The CA held that the attached RTC Decision was not certified as a true copy by
the Clerk of Court; that a certified true copy of the MeTC Decision was not attached; that material
portions of the record, such as the position papers of the parties and affidavits of witnesses, as would
support the material allegations of the petition were also not attached.[12]
On July 14, 2000, petitioner filed her Motion for Reconsideration, [13] attaching photocopies of
the Decisions of the RTC and MeTC as certified correct by the Clerk of Court.[14]
On November 27, 2000, the CA issued its Resolution denying petitioners Motion for
Reconsideration.[15]
Hence, the present petition raising the following issues:
1. Whether the submitted certified true copy of the appealed decision of the
Regional Trial Court as authenticated by a court employee other than the Clerk of Court

who was not around at that time said copy was secured constitutes compliance with the
Rules?
2. Whether the submission of a certified true copy of the Metropolitan Trial
Courts judgment is still an indispensable requirement in filing a petition for review
before the Court of Appeals despite the fact that said judgment was already modified by
the above decision of the Regional Trial Court and it is the latter decision that is the
proper subject of the petition for review?
3. Whether the submission of copies of the respective position papers of the
contending parties is still an indispensable requirement in filing a petition for review
before the Court of Appeals despite the fact that the contents thereof are already quoted
in the body of the verified petition and in the subject judgment of the Metropolitan Trial
Court?
4. Whether the herein petitioner could be held liable for damages as a result of
the fire that razed not only her own food kiosk but also the adjacent foodstalls at the
Food Center premises of the Philippine Womens University, including that of the
respondent?
5. Whether the Regional Trial Court could increase the amount of damages
awarded by the Metropolitan Trial Court in favor of the respondent who has not even
filed an appeal therefrom?[16]

Petitioner submits that rules of procedure should not be applied in a very harsh, inflexible and
technically unreasonable sense.
While admitting that the RTC Decision and Order were not certified by the Clerk of Court
himself, petitioner insists that they were certified as authentic copies by Administrative Officer IV
Gregorio B.Paraon of the RTC.
As to the MeTC Decision, petitioner contends that the submission of a certified true copy
thereof is not an indispensable requirement because that judgment is not the subject of the petition for
review.
In any case, petitioner submits that she had substantially complied with the requirements of the
rule when she attached with her Motion for Reconsideration the copies of the Decisions of the RTC
and MeTC as certified correct by the Clerk of Court.
Anent the non-submission of the position papers of the parties, petitioner maintains that the
contents of said position papers were lengthily quoted verbatim in the petition and in the attached copy
of the MeTC Decision.

On the submission of affidavits of witnesses, petitioner contends that it was not necessary
because the case before the MeTC was not covered by summary proceedings.
On the merits of her petition before the CA, petitioner avers that she should not be held liable
for a fire which was a fortuitous event since the fire could not be foreseen and the spread of the fire to
the adjacent fastfood stalls was inevitable.
Lastly, she argues that the RTC cannot increase the amount of temperate damages since the
respondent did not appeal from the judgment of the MeTC.
Respondent opted not to file a Comment, manifesting that the petition contains no new
arguments which would require a comment since the arguments are but a rehash of those raised and
decided by the lower courts.[17]
The Court gave due course to the petition and required both parties to submit their respective
memoranda.[18] In compliance therewith, petitioner submitted her Memorandum.[19] On the other hand,
respondent filed a Manifestation stating that since no new issues have been raised by the petitioner in
her petition and in order not to be redundant, he adopts as his memorandum the memoranda he filed in
the MeTC and the RTC.[20]
In his Memoranda before the MeTC and RTC, respondent emphasized the evidence he
presented to establish his cause of action against petitioner, principally the testimony of Fire
Investigator SFO1Arnel G. Pinca stating that the fire originated from the LPG stove and tank in
petitioners fastfood stall.
The requirements as to form and content of a petition for review of a decision of the RTC are
laid down in Section 2 of Rule 42 of the Revised Rules of Court, thus:
Sec. 2. Form and contents. - The petition shall be filed in seven (7) legible
copies, with the original copy intended for the court being indicated as such by the
petitioner, and shall (a) state the full names of the parties to the case, without
impleading the lower courts or judges thereof either as petitioners or respondents; (b)
indicate the specific material dates showing that it was filed on time; (c) set forth
concisely a statement of the matters involved, the issues raised, the specification of
errors of fact or law, or both, allegedly committed by the Regional Trial Court, and the
reasons or arguments relied upon for the allowance of the appeal; (d) be accompanied
by clearly legible duplicate originals or true copies of the judgments or final orders of
both lower courts, certified correct by the clerk of court of the Regional Trial Court,

the requisite number of plain copies thereof and of the pleadings andother material
portions of the record as would support the allegations of the petition. (Emphasis
supplied)
xxxx

Under Section 3 of the same Rule, failure to comply with the above requirements shall be
sufficient ground for the dismissal thereof.
However, Section 6, Rule 1 of the Revised Rules of Court also provides that rules shall be
liberally construed in order to promote their objective of securing a just, speedy and inexpensive
disposition of every action and proceeding. Indeed, rules of procedure should be used to promote, not
frustrate justice.[21]
In the present case, petitioners submission of copies of the RTC Decision and Order certified
as correct by the Administrative Officer IV of the RTC is insufficient compliance with the requirements
of the rule. Petitioner failed to show that the Clerk of Court was officially on leave and the
Administrative Officer was officially designated as officer-in-charge. The rule is explicit in its mandate
that the legible duplicate originals or true copies of the judgments or final orders of both lower courts
must be certified correct by the Clerk of Court.
Nonetheless, a strict application of the rule in this case is not called for. This Court has ruled
against the dismissal of appeals based solely on technicalities in several cases, especially when the
appellant had substantially complied with the formal requirements. [22] There is ample jurisprudence
holding that the subsequent and substantial compliance of a party may call for the relaxation of the
rules of procedure.[23] When the CA dismisses a petition outright and the petitioner files a motion for
the reconsideration of such dismissal, appending thereto the requisite pleadings, documents or
order/resolution, this would constitute substantial compliance with the Revised Rules of Court.[24]
Thus, in the present case, there was substantial compliance when petitioner attached in her
Motion for Reconsideration a photocopy of the Decision of the RTC as certified correct by the Clerk of
Court of the RTC. In like manner, there was substantial compliance when petitioner attached, in her
Motion for Reconsideration, a photocopy of the Decision of the MeTC as certified correct by the Clerk
of Court of the RTC.
On the necessity of attaching position papers and affidavits of witnesses, Section 2 of Rule 42
of the Revised Rules of Court requires attachments if these would support the allegations of the

petition.[25]In the present case, there was no compelling need to attach the position papers of the parties
since the Decisions of the MeTC and RTC already stated their respective arguments. As to the
affidavits, the Court notes that they were presented by the respondent as part of the testimony of his
witness Fire Investigator Pinca and therefore would not support the allegations of the petitioner.
Truly, in dismissing the petition for review, the CA had committed grave abuse of discretion
amounting to lack of jurisdiction in putting a premium on technicalities at the expense of a just
resolution of the case.
The Courts pronouncement in Republic of the Philippines v. Court of Appeals [26] is worth
echoing: cases should be determined on the merits, after full opportunity to all parties for
ventilation of their causes and defenses, rather than on technicality or some procedural
imperfections. In that way, the ends of justice would be better served.[27] Thus, what should guide
judicial action is that a party litigant is given the fullest opportunity to establish the merits of his action
or defense rather than for him to lose life, honor or property on mere technicalities.[28]
The next most logical step would then be for the Court to simply set aside the challenged
resolutions, remand the case to the CA and direct the latter to resolve on the merits of the petition in
CA-G.R. SP No. 58799. But, that would further delay the case. Considering the issues raised which
can be resolved on the basis of the pleadings and documents filed, and the fact that petitioner herself
has asked the Court to decide her petition on the merits, the Court deems it more practical and in the
greater interest of justice not to remand the case to the CA but, instead, to resolve the controversy once
and for all.[29]
The Court shall now address the issue of whether the fire was a fortuitous event.
Jurisprudence defines the elements of a fortuitous event as follows: (a) the cause of the
unforeseen and unexpected occurrence must be independent of human will; (b) it must be impossible
to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to
avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation
in a normal manner; and (d) the obligor must be free from any participation in the aggravation of the
injury resulting to the creditor. [30]
Article 1174 of the Civil Code provides that no person shall be responsible for a fortuitous
event which could not be foreseen, or which, though foreseen, was inevitable. In other words, there
must be an entire exclusion of human agency from the cause of injury or loss.[31]

It is established by evidence that the fire originated from leaking fumes from the LPG stove and
tank installed at petitioners fastfood stall and her employees failed to prevent the fire from spreading
and destroying the other fastfood stalls, including respondents fastfood stall. Such circumstances do
not support petitioners theory of fortuitous event.
Petitioners bare allegation is far from sufficient proof for the Court to rule in her favor. It is
basic in the rule of evidence that bare allegations, unsubstantiated by evidence, are not equivalent to
proof.[32] In short, mere allegations are not evidence.[33]
The Civil Code provides:
Art. 2176. Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done.
xxx
Art. 2180. The obligation imposed by Article 2176 is demandable not only for
one's own acts or omissions, but also for those of persons for whom one is responsible.
xxxx
The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the branches in
which the latter are employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the
former are not engaged in any business or industry.
xxxx
The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage.
Whenever an employees negligence causes damage or injury to another, there instantly arises a
presumption juris tantum that the employer failed to exercise diligentissimi patris families in the
selection (culpa in eligiendo) or supervision (culpa in vigilando) of its employees.[34] To avoid liability
for a quasi-delict committed by his employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence of a good father of a family in the
selection and supervision of his employee.[35]

In this case, petitioner not only failed to show that she submitted proof that the LPG stove and
tank in her fastfood stall were maintained in good condition and periodically checked for defects but
she also failed to submit proof that she exercised the diligence of a good father of a family in the
selection and supervision of her employees. For failing to prove care and diligence in the maintenance
of her cooking equipment and in the selection and supervision of her employees, the necessary
inference was that petitioner had been negligent.[36]
As to the award of temperate damages, the increase in the amount thereof by the RTC is
improper. The RTC could no longer examine the amounts awarded by the MeTC since respondent did
not appeal from the Decision of the MeTC. [37] It is well-settled that a party who does not appeal from
the decision may not obtain any affirmative relief from the appellate court other than what he has
obtained from the lower court, if any, whose decision is brought up on appeal. [38] While there are
exceptions to this rule, such as if they involve (1) errors affecting the lower courts jurisdiction over the
subject matter, (2) plain errors not specified, and (3) clerical errors,[39] none apply here.
WHEREFORE, the petition is GRANTED. The assailed Resolutions dated June 16, 2000 and
November 27, 2000 of the Court of Appeals are REVERSED and SET ASIDE. The Decision dated
November 26, 1999 of the Regional Trial Court, Branch 43, Manila is AFFIRMED with
MODIFICATION that the temperate damages awarded is reduced from P80,000.00 to P50,000.00 as
awarded by the Metropolitan Trial Court, Branch 24, Manila in its Decision dated April 5, 1999.
No costs.
SO ORDERED.

G.R. No. 161151, March 24, 2014

BJDC CONSTRUCTION, REPRESENTED BY ITS MANAGER/PROPRIETOR JANET S.
DELA CRUZ,Petitioner, v. NENA E. LANUZO, CLAUDETTE E. LANUZO, JANET E.

LANUZO, JOAN BERNABE E. LANUZO, AND RYAN JOSE E. LANUZO, Respondents.

DECISION
BERSAMIN, J.:
The party alleging the negligence of the other as the cause of injury has the burden to establish the
allegation with competent evidence. If the action based on negligence is civil in nature, the proof
required is preponderance of evidence.
This case involves a claim for damages arising from the death of a motorcycle rider in a nighttime
accident due to the supposed negligence of a construction company then undertaking reblocking work
on a national highway. The plaintiffs insisted that the accident happened because the construction
company did not provide adequate lighting on the site, but the latter countered that the fatal accident
was caused by the negligence of the motorcycle rider himself. The trial court decided in favor of the
construction company, but the Court of Appeals (CA) reversed the decision and ruled for the plaintiffs.
Hence, this appeal.
Antecedents
On January 5, 1998, Nena E. Lanuzo (Nena) filed a complaint for damages 1 against BJDC
Construction (company), a single proprietorship engaged in the construction business under its
Manager/Proprietor Janet S. de la Cruz. The company was the contractor of the reblocking project to
repair the damaged portion of one lane of the national highway at San Agustin, Pili, Camarines Sur
from September 1997to November 1997.
Nena alleged that she was the surviving spouse of the late Balbino Los Baos Lanuzo (Balbino) who
figured in the accident that transpired at the site of the reblocking work at about 6:30 p.m. on October
30, 1997; that Balbinos Honda motorcycle sideswiped the road barricade placed by the company in
the right lane portion of the road, causing him to lose control of his motorcycle and to crash on the
newly cemented road, resulting in his instant death; and that the companys failure to place illuminated
warning signs on the site of the project, especially during night time, was the proximate cause of the
death of Balbino. She prayed that the company be held liable for damages, to wit: (a) P5,000.00 as the
actual damage to Balbinos motorcycle; (b) P100,000.00 as funeral and burial expenses; (c)
P559,786.00 representing the unearned income in expectancy of Balbino; (d) P100,000.00 as moral
damages; (e) P75,000.00 as attorneys fees, plus P1,500.00 per court appearance; and (f) P20,000.00 as
litigation costs and other incidental expenses.
In its answer,2 the company denied Nenas allegations of negligence, insisting that it had installed
warning signs and lights along the highway and on the barricades of the project; that at the time of the
incident, the lights were working and switched on; that its project was duly inspected by the
Department of Public Works and Highways (DPWH), the Office of the Mayor of Pili, and the Pili
Municipal Police Station; and that it was found to have satisfactorily taken measures to ensure the
safety of motorists.
The company further alleged that since the start of the project in September 1997, it installed several
warning signs, namely: (a) big overhead streamers containing the words SLOW DOWN ROAD
UNDER REPAIR AHEAD hung approximately 100 meters before the reblocking site, one facing the
Pilibound motorists and another facing the Nagabound motorists; (b) road signs containing the

words SLOW DOWN ROAD UNDER REPAIR 100 METERS AHEAD placed on the road shoulders
below the streamers; (c) road signs with the words SLOW DOWN ROAD UNDER REPAIR 50
METERS AHEAD placed 50 meters before the project site; (d) barricades surrounded the affected
portion of the highway, and a series of 50watt light bulbs were installed and switched on daily from
6:00 p.m. until the following morning; (e) big warning signs containing the words SLOW DOWN
ROAD UNDER REPAIR and SLOW DOWN MEN WORKING were displayed at both ends of the
affected portion of the highway with illumination from two 50watt bulbs from 6:00 p.m. until the
following morning; and (f) the unaffected portion of the highway was temporarily widened in the
adjacent road shoulder to allow twoway vehicular traffic.
The company insisted that the death of Balbino was an accident brought about by his own negligence,
as confirmed by the police investigation report that stated, among others, that Balbino was not wearing
any helmet at that time, and the accident occurred while Balbino was overtaking another motorcycle;
and that the police report also stated that the road sign/barricade installed on the road had a light. Thus,
it sought the dismissal of the complaint and prayed, by way of counterclaim, that the Nena be ordered
to pay P100,000.00 as attorneys fees, as well as moral damages to be proven in the course of trial.
The RTC subsequently directed the amendment of the complaint to include the children of Nena and
Balbino as coplaintiffs, namely: Janet, Claudette, Joan Bernabe and Ryan Jose, all surnamed Lanuzo.
Hence, the plaintiffs are hereinafter be referred to as the Lanuzo heirs.
Decision of the RTC
On October 8, 2001, the RTC
follows:chanRoblesvirtualLawlibrary

rendered

judgment

in

favor

of

the

company,

as

Plaintiffs are the survivors of Balbino Los Baos Lanuzo who met a traumatic death on 30 October,
1997 at about 6:30 p.m., when he bumped his motorcycle on a barricade that was lighted with an
electric bulb, protecting from traffic the newlyreblocked cement road between San Agustin and San
Jose, Pili, Camarines Sur; they claim defendants OMISSION in lighting up the barricaded portion of
the reblocking project being undertaken by defendant was the proximate cause of the accident, leaving
them bereaved and causing them actual and moral damages.
Defendant DENIED the claim of plaintiffs; both parties offered testimonial and documentary evidence,
from which this Court,
FINDS
that: plaintiff DID NOT present an eyewitness account of the death of their decedent; on the contrary,
the flagman of defendant was present when the accident occurred, which was caused by the decedent
having overtaken a motorcycle ahead of [him] and on swerving, to avoid the barricade, hit it, instead,
breaking the lighted electric bulb on top of the barricade, resulting in the fall of the decedent about 18
paces from where his motorcycle fell on the reblocked pavement; the police investigator, policeman
Corporal, by Exh. 1, confirmed the tale of the flagman, aside from confirming the presence of the
warning devices placed not only on the premises but at places calculated to warn motorists of the
ongoing reblocking project.

OPINION
From the foregoing findings, it is the opinion of this Court that the plaintiffs were unable to make out a
case for damages, with a preponderance of evidence.
WHEREFORE, Judgment is hereby rendered, DISMISSING the complaint. 3
Decision of the CA
The Lanuzo heirs appealed to the CA.
On August 11, 2003, the CA promulgated its decision declaring that the issue was whether the
company had installed adequate lighting in the project so that motorists could clearly see the barricade
placed on the newly cemented lane that was then still closed to vehicular traffic, 4 thereby reversing the
judgment of the RTC, and holding thusly:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the present appeal is hereby GRANTED and the decision
appealed from in Civil Case No. P2117 is hereby REVERSED and SET ASIDE. A new judgment is
hereby entered ordering the defendantappellee to pay the plaintiffappellants, heirs of the victim
Balbino L. B. Lanuzo, the sums of P50,000.00 as death indemnity, P20,000.00 by way of temperate
damages and P939,736.50 as loss of earning capacity of the deceased Balbino L. B. Lanuzo.
SO ORDERED.5
The CA ruled that the following elements for the application of the doctrine of res ipsa loquitur were
present, namely: (1) the accident was of such character as to warrant an inference that it would not
have happened except for the defendants negligence; (2) the accident must have been caused by an
agency or instrumentality within the exclusive management or control of the person charged with the
negligence complained of; and (3) the accident must not have been due to any voluntary action or
contribution on the part of the person injured.
The CA regarded as selfserving the testimony of Eduardo Zamora, an employee of the company who
testified that there was an electric bulb placed on top of the barricade on the area of the accident. It
held that Zamoras statement was negated by the statements of Ernesto Alto and Asuncion Sandia to
the effect that they had passed by the area immediately before the accident and had seen the road to be
dark and lit only by a gas lamp. It noted that SPO1 Corporal, the police investigator, had noticed the
presence of lighted electric bulbs in the area, but the same had been installed on the other side of the
street opposite the barricade.
The CA ruled that the placing of road signs and streamers alone did not prove that the electric bulbs
were in fact switched on at the time of the accident as to sufficiently light up the newly reblocked
portion of the highway. It opined that [t]he trial court gave undue weight to the selfserving statement
of appellees employee, Eduardo Zamora, which was supposedly corroborated by SPO1 Pedro
Corporal. SPO1 Corporal arrived at the scene only after the accident occurred, and thus the electric

bulbs could have already been switched on by Zamora who was at the area of the project. It concluded
that the negligence of the company was the proximate cause of Balbinos death; hence, the company
was liable for damages.
The company filed a motion for reconsideration,6 but the CA denied the motion in the resolution
promulgated on November 13, 2003.
Issues
In this appeal, the company submits the following issues, namely:chanRoblesvirtualLawlibrary
I. The application by the Honorable Court of Appeals of the doctrine of res ipsa loquiturto the case at
bar, despite and contrary to the finding, among others, by the trial court that the proximate cause of the
accident is the victims own negligence, is not in accord with the law or with the applicable decisions
of the Supreme Court [Sec. 6 (a), Rule 45, Rules of Court].
II. The Honorable Court of Appeals, by substituting its own findings of fact and conclusion with those
of the trial court despite the lack of strong or cogent reasons therefor, has so far departed from the
accepted and usual course of judicial proceedings ... as to call for an exercise of the power of
supervision by this Honorable Supreme Court [Sec. 6 (b), Ibid.].
III. The findings by the Honorable Court of Appeals that respondents (appellants therein) had
satisfactorily presented a prima facie case of negligence which the appellee (petitioner herein) had not
overcome with an adequate explanation and which alleged negligence is the proximate cause of
death of Lanuzo are manifestations of grave abuse of discretion in the appreciation of facts, and
constitute a judgment based on a misinterpretation of facts, which justify a review by this Honorable
Supreme Court.7
The company reiterates the categorical finding of the RTC that the proximate cause of the accident was
Balbinos own negligence, and that such finding was based on the conclusion stated by SPO1 Corporal
in his investigation report to the effect that the incident was purely self accident, and on the
unrebutted testimony of Zamora to the effect that Balbino was driving his motorcycle at a fast speed
trying to overtake another motorcycle rider before hitting the barricade. On the other hand, it insists
that its documentary and testimonial evidence proved its exercise of due care and observance of the
legally prescribed safety requirements for contractors.
The company maintains that Balbino was familiar with the reblocking project that had been going on
for months because he had been passing the area at least four times a day during weekdays in going to
and from his place of work in the morning and in the afternoon; and that he could have avoided the
accident had he exercised reasonable care and prudence.
The company assails the application of the doctrine of res ipsa loquitur, positing that the Lanuzo heirs
did not establish all the requisites for the doctrine to apply.
Anent the first requisite, the company states that the Lanuzo heirs did not successfully counter its
documentary and testimonial evidence showing that Balbinos own negligence had caused the accident.
It cites the fact that Balbino was familiar with the road conditions and the reblocking project because

he had been passing there daily; and that Balbino had been driving too fast and not wearing the
required helmet for motorcycle drivers, which were immediately evident because he had been thrown
from his motorcycle and had landed 18 paces away from the barricade that he had hit.
On the second requisite, the company argues that Balbinos driving and operation of his motorcycle on
the day of the accident indicated that the accident was not within its exclusive management and
control; and that as to the matters that were within its control, it sufficiently showed its observance of
due and reasonable care and its compliance with the legally prescribed safety requirements.
Regarding the third requisite, the company reminds that Zamora and SPO1 Corporal revealed that
Balbino was overtaking another motorcycle rider before hitting the barricade. The credibility of said
witnesses was not challenged, and their testimonies not rebutted; hence, the CA erred in relying on the
recollections of Asuncion Sandia and Ernesto Alto who were not present when the incident took place.
Sandia and Altos testimonies could not be accorded more weight than Zamoras eyewitness account,
considering that the latter was believed by the trial judge who had the firsthand opportunity to
observe the demeanor of the witnesses.
Whose negligence was the proximate cause of the death of Balbino?
Ruling of the Court
Inasmuch as the RTC and the CA arrived at conflicting findings of fact on who was the negligent party,
the Court holds that an examination of the evidence of the parties needs to be undertaken to properly
determine the issue.8 The Court must ascertain whose evidence was preponderant, for Section 1, Rule
133 of the Rules of Court mandates that in civil cases, like this one, the party having the burden of
proof must establish his case by a preponderance of evidence.9
Burden of proof is the duty of a party to present evidence on the facts in issue necessary to establish his
claim or defense by the amount of evidence required by law.10 It is basic that whoever alleges a fact has
the burden of proving it because a mere allegation is not evidence. 11 Generally, the party who denies
has no burden to prove.12 In civil cases, the burden of proof is on the party who would be defeated if no
evidence is given on either side.13 The burden of proof is on the plaintiff if the defendant denies the
factual allegations of the complaint in the manner required by the Rules of Court, but it may rest on the
defendant if he admits expressly or impliedly the essential allegations but raises affirmative defense or
defenses, which if proved, will exculpate him from liability.14
By preponderance of evidence, according to Raymundo v. Lunaria:15
x x x is meant that the evidence as a whole adduced by one side is superior to that of the other. It refers
to the weight, credit and value of the aggregate evidence on either side and is usually considered to be
synonymous with the term greater weight of evidence or greater weight of the credible evidence. It
is evidence which is more convincing to the court as worthy of belief than that which is offered in
opposition thereto.
In addition, according to United Airlines, Inc. v. Court of Appeals, 16 the plaintiff must rely on the
strength of his own evidence and not upon the weakness of the defendants.
Upon a review of the records, the Court affirms the findings of the RTC, and rules that the Lanuzo

heirs, the parties carrying the burden of proof, did not establish by preponderance of evidence that the
negligence on the part of the company was the proximate cause of the fatal accident of Balbino.
Negligence, the Court said in Layugan v. Intermediate Appellate Court,17 is the omission to do
something which a reasonable man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something which a prudent and reasonable man
would not do,18 or as Judge Cooley defines it, (t)he failure to observe for the protection of the interests
of another person, that degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury. 19 In order that a party may be held liable for
damages for any injury brought about by the negligence of another, the claimant must prove that the
negligence was the immediate and proximate cause of the injury. Proximate cause is defined as that
cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury and without which the result would not have occurred.20
The test by which the existence of negligence in a particular case is determined is aptly stated in the
leading case of Picart v. Smith,21 as follows:chanRoblesvirtualLawlibrary
The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution
which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreetpaterfamilias of the Roman law. The existence of negligence in a given case is
not determined by reference to the personal judgment of the actor in the situation before him. The law
considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that.
The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in the
particular case. Abstract speculation cannot here be of much value but this much can be profitably said:
Reasonable men govern their conduct by the circumstances which are before them or known to them.
They are not, and are not supposed to be, omniscient of the future. Hence they can be expected to take
care only when there is something before them to suggest or warn of danger. Could a prudent man, in
the case under consideration, foresee harm as a result of the course actually pursued? If so, it was the
duty of the actor to take precautions to guard against that harm. Reasonable foresight of harm,
followed by the ignoring of the suggestion born of this prevision, is always necessary before
negligence can be held to exist. Stated in these terms, the proper criterion for determining the existence
of negligence in a given case is this: Conduct is said to be negligent when a prudent man in the
position of the tortfeasor would have foreseen that an effect harmful to another was sufficiently
probable to warrant his foregoing the conduct or guarding against its consequences.
First of all, we note that the Lanuzo heirs argued in the trial and appellate courts that there was a total
omission on the part of the company to place illuminated warning signs on the site of the project,
especially during night time, in order to warn motorists of the project. They claim that the omission
was the proximate cause of the death of Balbino. 22 In this appeal, however, they contend that the
negligence of the company consisted in its omission to put up adequate lighting and the required signs
to warn motorists of the project, abandoning their previous argument of a total omission to illuminate
the project site.

During the trial, the Lanuzo heirs attempted to prove inadequacy of illumination instead of the total
omission of illumination. Their first witness was Cesar Palmero, who recalled that lights had been
actually installed in the site of the project. The next witness was Ernesto Alto, who stated that he had
seen three light bulbs installed in the site, placed at intervals along the stretch of the road covered by
the project. Alto further stated that he had passed the site on board his tricycle on October 30, 1997
prior to the accident, and had seen only a gas lamp, not light bulbs, on his approach. Another witness
of the plaintiffs, Asuncion Sandia, claimed that she had also passed the site on board a bus on the night
just prior to the accident, and had seen the site to be dark, with only one lane open to traffic, with no
light at all. Obviously, the witnesses of the plaintiffs were not consistent on their recollections of the
significant detail of the illumination of the site.
In contrast, the company credibly refuted the allegation of inadequate illumination. Zamora, its
flagman in the project, rendered an eyewitness account of the accident by stating that the site had been
illuminated by light bulbs and gas lamps, and that Balbino had been in the process of overtaking
another motorcycle rider at a fast speed when he hit the barricade placed on the newly cemented road.
On his part, SPO1 Corporal, the police investigator who arrived at the scene of the accident on October
30, 1997, recalled that there were light bulbs on the other side of the barricade on the lane coming from
Naga City; and that the light bulb on the lane where the accident had occurred was broken because it
had been hit by the victims motorcycle. Witnesses Gerry Alejo and Engr. Victorino del Socorro
remembered that light bulbs and gas lamps had been installed in the area of the project.
Secondly, the company presented as its documentary evidence the investigation report dated December
3, 1997 of SPO1 Corporal (Annex 1), the relevant portions of which indicated the finding of the police
investigator on the presence of illumination at the project site, viz:chanRoblesvirtualLawlibrary
SUBJECT: Investigation Report Re: Homicide Thru Reckless Imprudence (Self Accident)
xxxx
II. MATTERS INVESTIGATED:chanRoblesvirtualLawlibrary
1. To determine how the incident happened.
2. To determine the vehicle involved.
III. FACTS OF THE CASE:
1 At 6:45 P.M. October 30, 1997, Elements of Pili Municipal Police Station led by SPO2
Melchor Estallo, SPO2 Cesar Pillarda, both members of the patrol section and SPO1 Pedro D.
Corporal, investigator reported having conducted an on the spot investigation re: vehicular incident
(Self Accident) that happened on or about 6:30 oclock in the evening of October 30, 1997 along
national highway, San Agustin, Pili, Camarines Sur, wherein one Balbino Lanuzo y Doe, of legal
age, married, a public school teacher, a resident of San Jose, Pili, Camarines Sur while driving his
Honda motorcycle 110 CC enroute to San Jose, Pili, Camarines Sur from Poblacion, this
municipality and upon reaching at road re: blocking portion of the national highway at barangay
San Agustin, Pili, Camarines Sur and while overtaking another motorcycle ahead incidentally side
swiped a road sign/barricade installed at the lane road re: blocking of the national highway, causing
said motorcycle rider to swerved his ridden motorcycle to the right and stumble down and fell to
the concrete cemented road. Victim was rushed to Bicol Medical Center, Naga City for treatment
but was pronounced dead on arrival.

2 That upon arrival at the scene of the incident it was noted that road sign/barricade
installed on the road has a light.
3 That said road was under repair for almost a month which one lane portion of the national
highway is possible of all passing vehicles from south and north bound.
4 That said motorcycle stumble down on the newly repair portion of the national highway and the
driver lying down beside the motorcycle.
xxxx
5 That one of the passerby revealed that the victim possibly be miscalculated the road block that
made him to tumble down when he applied sudden brake.
IV. FINDINGS/DISCUSSION:chanRoblesvirtualLawlibrary
6 The time of the incident was at about 6:30 oclock in the evening a time wherein dark of the
night is approaching the vision of the driver is affected with the changing condition and it is all the
time when driver should lights his driven vehicle, as to this case, the driver Balbino Lanuzo y Doe
(victim has exercise all precautionary measures to avoid accident but due to self accident he
incidentally sideswiped the road sign/barricade of the re: Blocking portion of the national highway
resulting him to stumble down his motorcycle and fell down to the concrete cement road.
7 The driver/victim met unexpectedly (sic) along that one lane potion of the re: blocking and
considering it was night time, confusion overthrew him and because of sudden impulse, he lost
control on the motorcycle he was driving.
8 That the driver/victim has no crush (sic) helmet at the time of the incident considering that it
should be a basic requirement as to prevent from any accident.
V. RECOMMENDATION:chanRoblesvirtualLawlibrary
9 Basing on the above discussion and facts surroundings the case was purely self accident
resulting to Homicide Thru Reckless Imprudence and the case must be closed. (Emphasis ours.) 23
Additionally, the company submitted the application for lighting permit covering the project site
(Annex 7) to prove the fact of installation of the electric light bulbs in the project site.
In our view, the RTC properly gave more weight to the testimonies of Zamora and SPO1 Corporal than
to those of the witnesses for the Lanuzo heirs. There was justification for doing so, because the greater
probability pertained to the former. Moreover, the trial courts assessment of the credibility of the
witnesses and of their testimonies is preferred to that of the appellate courts because of the trial courts
unique firsthand opportunity to observe the witnesses and their demeanor as such. The Court said in
Cang v. Cullen:24
The findings of the trial court on the credibility of witnesses are accorded great weight and respect
even considered as conclusive and binding on this Court since the trial judge had the unique

opportunity to observe the witness firsthand and note his demeanor, conduct and attitude under
grueling examination. Only the trial judge can observe the furtive glance, blush of conscious shame,
hesitation, flippant or sneering tone, calmness, sigh of a witness, or his scant or full realization of an
oath all of which are useful aids for an accurate determination of a witness' honesty and sincerity. He
can thus be expected to determine with reasonable discretion which testimony is acceptable and which
witness is worthy of belief.
Absent any showing that the trial courts calibration of the credibility of the witnesses was flawed, we
are bound by its assessment. This Court will sustain such findings unless it can be shown that the trial
court ignored, overlooked, misunderstood, misappreciated, or misapplied substantial facts and
circumstances, which, if considered, would materially affect the result of the case.25
The Court observes, too, that SPO1 Corporal, a veteran police officer detailed for more than 17 years
at the Pili Police Station, enjoyed the presumption of regularity in the performance of his official
duties.26 The presumption, although rebuttable, stands because the Lanuzo heirs did not adduce
evidence to show any deficiency or irregularity in the performance of his official duty as the police
investigator of the accident. They also did not show that he was impelled by any ill motive or bias to
testify falsely.
Thirdly, the CA unreasonably branded the testimonies of Zamora and SPO1 Corporal as self
serving. They were not. Selfserving evidence refers to outofcourt statements that favor the
declarants interest;27 it is disfavored mainly because the adverse party is given no opportunity to
dispute the statement and their admission would encourage fabrication of testimony.28 But court
declarations are not selfserving considering that the adverse party is accorded the opportunity to test
the veracity of the declarations by crossexamination and other methods.
There is no question that Zamora and SPO1 Corporal were thoroughly crossexamined by the counsel
for the Lanuzo heirs. Their recollections remained unchallenged by superior contrary evidence from
the Lanuzo heirs.
Fourthly, the doctrine of res ipsa loquitur had no application here. In Tan v. JAM Transit, Inc.,29 the
Court has discussed the doctrine thusly:chanRoblesvirtualLawlibrary
Res ipsa loquitur is a Latin phrase that literally means the thing or the transaction speaks for itself. It
is a maxim for the rule that the fact of the occurrence of an injury, taken with the surrounding
circumstances, may permit an inference or raise a presumption of negligence, or make out a plaintiffs
prima facie case, and present a question of fact for defendant to meet with an explanation. Where the
thing that caused the injury complained of is shown to be under the management of the defendant or
his servants; and the accident, in the ordinary course of things, would not happen if those who had
management or control used proper care, it affords reasonable evidence in the absence of a
sufficient, reasonable and logical explanation by defendant that the accident arose from or was
caused by the defendants want of care. This rule is grounded on the superior logic of ordinary human
experience, and it is on the basis of such experience or common knowledge that negligence may be
deduced from the mere occurrence of the accident itself. Hence, the rule is applied in conjunction with
the doctrine of common knowledge.
For the doctrine to apply, the following requirements must be shown to exist, namely: (a) the accident
is of a kind that ordinarily does not occur in the absence of someones negligence; (b) it is caused by an

instrumentality within the exclusive control of the defendant or defendants; and (c) the possibility of
contributing conduct that would make the plaintiff responsible is eliminated.30
The Court has warned in Reyes v. Sisters of Mercy Hospital,31 however, that res ipsa loquitur is not a
rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon
the circumstances of each case.
Based on the evidence adduced by the Lanuzo heirs, negligence cannot be fairly ascribed to the
company considering that it has shown its installation of the necessary warning signs and lights in the
project site. In that context, the fatal accident was not caused by any instrumentality within the
exclusive control of the company. In contrast, Balbino had the exclusive control of how he operated
and managed his motorcycle. The records disclose that he himself did not take the necessary
precautions. As Zamora declared, Balbino overtook another motorcycle rider at a fast speed, and in the
process could not avoid hitting a barricade at the site, causing him to be thrown off his motorcycle onto
the newly cemented road. SPO1 Corporals investigation report corroborated Zamoras declaration.
This causation of the fatal injury went uncontroverted by the Lanuzo heirs.
Moreover, by the time of the accident, the project, which had commenced in September 1997, had been
going on for more than a month and was already in the completion stage. Balbino, who had passed
there on a daily basis in going to and from his residence and the school where he then worked as the
principal, was thus very familiar with the risks at the project site. Nor could the Lanuzo heirs justly
posit that the illumination was not adequate, for it cannot be denied that Balbinos motorcycle was
equipped with headlights that would have enabled him at dusk or night time to see the condition of the
road ahead. That the accident still occurred surely indicated that he himself did not exercise the degree
of care expected of him as a prudent motorist.
According to Dr. Abilay, the cause of death of Balbino was the fatal depressed fracture at the back of
his head, an injury that Dr. Abilay opined to be attributable to his head landing on the cemented road
after being thrown off his motorcycle. Considering that it was shown that Balbino was not wearing any
protective head gear or helmet at the time of the accident, he was guilty of negligence in that respect.
Had he worn the protective head gear or helmet, his untimely death would not have occurred.
The RTC was correct on its conclusions and findings that the company was not negligent in ensuring
safety at the project site. All the established circumstances showed that the proximate and immediate
cause of the death of Balbino was his own negligence. Hence, the Lanuzo heirs could not recover
damages.32
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS
ASIDEthe decision promulgated on August 11, 2003 by the Court of Appeals; REINSTATES the
decision rendered on October 8, 2001 by the Regional Trial Court, Branch 32, in Pili, Camarines Sur
dismissing the complaint; and MAKES no pronouncements on costs of suit.
SO ORDERED.