Case Digest: Franco vs. IAC, G.R. No. 71137, October 5, 1989

 

CASE TITLE: Franco vs. Intermediate Appeallate Court

GR No/ Date: G.R. No. 71137. October 5, 1989.

PONENTE: Fernan, J.

CASE WITH THE SC:   PETITION to review the decision of the Court of Appeals.

PROCEDURAL ANTECEDENTS:

FACTS:

  • On October 18, 1974, at around 7:30 PM, a Franco Bus (Plate No. XY320-PUB), driven by Macario Yuro, swerved to avoid a parked truck on the MacArthur Highway in Capas, Tarlac.

  • The bus collided with an oncoming Isuzu Mini Bus (Plate No. YL-735) driven by Magdaleno Lugue.

  • The collision dragged the mini bus 15 meters, causing it to overturn into a canal, resulting in the deaths of both drivers and two mini bus passengers, Romeo Bue and Fernando Chuay.

  • Antonio Reyes (owner of the mini bus), Susan Chuay (wife of Fernando Chuay), and Lolita Lugue (wife of Magdaleno Lugue) filed a civil case for damages against the owners of Franco Transportation Company, Sps. Federico Franco and Felicisima Franco.

  • The plaintiffs claimed the reckless driving of the Franco Bus driver caused the collision, resulting in death and significant property damage.

  • Defense:

    • The Francos claimed they exercised due diligence in the selection and supervision of their employees, including the driver Macario Yuro.

  • CFI-Pampanga: Rejected the defense, ruling the collision was due to criminal negligence, making the Francos civilly liable under Article 103 of the Revised Penal Code.

    • The court ordered the Francos to pay:

      • Antonio Reyes: P90,000.00 for the mini bus.

      • Lolita Lugue: P18,000.00 for damages.

      • Susan Chuay: P24,000.00 for damages.

      • P5,000.00 in attorney’s fees, with legal interest from the filing date.

  • IAC: Upheld the trial court's ruling, finding the Franco Bus driver guilty of reckless imprudence.

    • The appellate court increased the damages awarded:

      • Susan Chuay: P30,000.00 for death and P112,000.00 for loss of earning capacity.

      • Lolita Lugue: P30,000.00 for death and P62,000.00 for loss of earning capacity.

  • The Francos' motion for reconsideration was denied.


ISSUES:

Whether the action for recovery of damages instituted by herein private respondents was predicated upon crime or quasi-delict. QUASI-DELICT


Whether respondent appellate court in an appeal filed by the defeated parties, herein petitioners, may properly increase the award of damages in favor of the private respondents Chuay and Lugue, prevailing parties in the lower court, who did not appeal said court's decision. NO

ALLEGATIONS

DEFENSE

  • The petitioners argue that the private respondents' Amended Complaint clearly alleges that the petitioners, as employers of the Franco Bus driver, Macario Yuro, are jointly and severally liable for the damages.

  • The petitioners contend that this makes the case an action based on a quasi-delict under the Civil Code.

  • They also argue that, as a quasi-delict, the case should allow the defense that the employers exercised due diligence in selecting and supervising their employees.



PREVAILING PARTY:  

DECISION/DOCTRINE: GRANTED


We find merit in this contention. Distinction should be made between the subsidiary liability of the employer under the Revised Penal Code and the employer's primary liability under the Civil Code which is quasi-delictual or tortious in character


The first type of liability is governed by Articles 102 and 103 of the Revised Penal Code which provide as follows:


Art. 102. Subsidiary civil liability of innkeepers, tavern-keepers and proprietors of establishments. - In default of the persons criminally liable, innkeepers, tavern-keepers, and any other persons or corporations shall be civilly liable for crimes committed in their establishments, in all cases where a violation of municipal ordinances or some general or special police regulations shall have been committed by them or their employees. 


Innkeepers are also subsidiarily liable for the restitution of goods taken by robbery or theft within their houses from guests lodging therein, or for the payment of the value thereof, provided that such guests shall have notified in advance the innkeeper himself, or the person representing him, of the deposits of such goods within the inn; and shall furthermore have followed the directions which such innkeeper or his representative may have given them with respect to the care and vigilance over such goods. No liability shall attach in case of robbery with violence against or intimidation of persons unless committed by the innkeeper's employees. 


Art. 103. Subsidiary civil liability of other persons. - The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by the servants, pupils, workmen, apprentices, or employees in the discharge of their duties;


while the second kind is governed by the following provisions of the Civil Code:


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


Art. 2177. Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code. But the plaintiff cannot recover damages twice for the same act or omission of the defendant. 


Art. 2180. The obligations imposed by article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. 


xxx xxx xxx 


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


xxx xxx xxx 


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.


Under Article 103 of the Revised Penal Code, liability originates from a delict committed by the employee who is primarily liable therefor and upon whose primary liability his employer's subsidiary liability is to be based. Before the employer's subsidiary liability may be proceeded against, it is imperative that there should be a criminal action whereby the employee's criminal negligence or delict and corresponding liability therefor are proved. If no criminal action was instituted, the employer's liability would not be predicated under Article 103. 


In the case at bar, no criminal action was instituted because the person who should stand as the accused and the party supposed to be primarily liable for the damages suffered by private respondents as a consequence of the vehicular mishap died. Thus, petitioners' subsidiary liability has no leg to stand on considering that their liability is merely secondary to their employee's primary liability. Logically therefore, recourse under this remedy is not possible.


On the other hand, under Articles 2176 and 2180 of the Civil Code, liability is based on culpa aquiliana which holds the employer primarily liable for tortious acts of its employees subject, however, to the defense that the former exercised all the diligence of a good father of a family in the selection and supervision of his employees.


Respondent appellate court relies on the case of Arambulo, supra, where it was held that the defense of observance of due diligence of a good father of a family in the selection and supervision of employees is not applicable to the subsidiary liability provided in Article 20 of the Penal Code (now Article 103 of the Revised Penal Code). 


By such reliance, it would seem that respondent appellate court seeks to enforce the subsidiary civil liability of the employer without a criminal conviction of the party primarily liable therefor. This is not only erroneous and absurd but is also fraught with dangerous consequences. It is erroneous because the conviction of the employee primarily liable is a condition sine qua non for the employer's subsidiary liability and, at the same time, absurd because we will be faced with a situation where the employer is held subsidiarily liable even without a primary liability being previously established. It is likewise dangerous because, in effect, the employer's subsidiary liability would partake of a solidary obligation resulting in the law's amendment without legislative sanction. 


The Court in the aforecited M.D. Transit case went further to say that there can be no automatic subsidiary liability of defendant employer under Article 103 of the Revised Penal Code where his employee has not been previously criminally convicted.


Having thus established that Civil Case No. 2154 is a civil action to impose the primary liability of the employer as a result of the tortious act of its alleged reckless driver, we confront ourselves with the plausibility of defendants-petitioners' defense that they observed due diligence of a good father of a family in the selection and supervision of their employees.


On this point, the appellate court has unequivocally spoken in affirmation of the lower court's findings, to wit:


Anyway, a perusal of the record shows that the appellants were not able to establish the defense of a good father of a family in the supervision of their bus driver. The evidence presented by the appellants in this regard is purely self-serving. No independent evidence was presented as to the alleged supervision of appellants' bus drivers, especially with regard to driving habits and reaction to actual traffic conditions. The appellants in fact admitted that the only kind of supervision given the drivers referred to the running time between the terminal points of the line (t.s.n., September 16, 1976, p. 21). Moreover, the appellants who ran a fleet of 12 buses plying the Manila-Laoag line, have only two inspectors whose duties were only ticket inspection. There is no evidence that they are really safety inspectors. 


Basically, the Court finds that these determinations are factual in nature. As a painstaking review of the evidence presented in the case at bar fails to disclose any evidence or circumstance of note sufficient to overrule said factual findings and conclusions, the Court is inclined to likewise reject petitioners' affirmative defense of due diligence. The wisdom of this stance is made more apparent by the fact that the appellate court's conclusions are based on the findings of the lower court which is in a better position to evaluate the testimonies of the witnesses during trial. As a rule, this Court respects the factual findings of the appellate and trial courts and accord them a certain measure of finality. Consequently, therefore, we find petitioners liable for the damages claimed pursuant to their primary liability under the Civil Code


On the second legal issue raised in the instant petition, we agree with petitioners' contention that the Intermediate Appellate Court (later Court of Appeals) is without jurisdiction to increase the amount of damages awarded to private respondents Chuay and Lugue, neither of whom appealed the decision of the lower court. While an appellee who is not also an appellant may assign error in his brief if his purpose is to maintain the judgment on other grounds, he cannot ask for modification or reversal of the judgment or affirmative relief unless he has also appealed. For failure of plaintiffs-appellees, herein private respondents, to appeal the lower court's judgment, the amount of actual damages cannot exceed that awarded by it. 



Furthermore, the records show that plaintiffs-private respondents limited their claim for actual and compensatory damages to the supposed average income for a period of one (1) year of P6,000.00 for the driver Magdaleno Lugue and P12,000.00 for the Chinese businessman Fernando Chuay. We feel that our award should not exceed the said amounts.  


However, the increase in awards for indemnity arising from death to P30,000.00 each remains, the same having been made in accordance with prevailing jurisprudence decreeing such increase in view of the depreciated Philippine currency. 


WHEREFORE, the decision of the Court of Appeals is hereby modified decreasing the award to private respondents of actual and compensatory damages for loss of average income for the period of one year to P6,000.00 for the deceased Magdaleno Lugue and P12,000.00 for the deceased Fernando Chuay. The rest of the judgment appealed from is hereby affirmed. Costs against the private respondents. This decision is immediately executory. 


SO ORDERED.



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