Case Summary (G.R. No. 71137)
Procedural Posture and Key Dates
Civil Case No. 2154 was filed in the Court of First Instance of Pampanga and Angeles City (filed November 11, 1974). The trial court rendered judgment on May 17, 1978. The Court of Appeals issued its decision modifying awards (dated January 2, 1985), and denied petitioners’ motion for reconsideration (denial dated May 13, 1985). The present petition to the Supreme Court raised two principal legal issues for review.
Issues Presented
- Whether the action for recovery of damages was predicated upon a crime (subsidiary liability under Articles 102–103 of the Revised Penal Code) or upon quasi-delict (primary civil liability under Articles 2176 and 2180 of the Civil Code). 2. Whether the appellate court may increase the award of damages in favor of appellees (Chuay and Lugue) who did not appeal the trial court’s judgment.
Facts Material to Liability and Damages
At approximately 7:30 p.m. on October 18, 1974, the Franco Bus, driven by Macario Yuro, swerved left to avoid a parked truck and collided with an oncoming Isuzu minibus driven by Magdaleno Lugue. The minibus was dragged some 15 meters and overturned into the highway canal; it became a total wreck. The collision caused the deaths of both drivers and two passengers (Romeo Bue and Fernando Chuay). Plaintiffs claimed actual and compensatory damages for the destroyed minibus (P50,000) and loss of average net income (P120 daily or P3,600 monthly), plus claimed amounts for deaths and loss of earning capacity (specified amounts in the complaint).
Trial Court Ruling
The trial court concluded the matter involved criminal negligence (reckless imprudence) giving rise to civil liability under Article 103 of the Revised Penal Code; it rejected the defendants’ affirmative defense that they exercised due diligence in selection and supervision of employees. The trial court awarded damages to plaintiffs (detailed sums), and ordered attorney’s fees and interest.
Court of Appeals Ruling
The Court of Appeals affirmed the trial court’s characterization of the driver’s conduct as reckless or criminal imprudence and treated the appellants’ civil obligation as arising from Article 103 of the Revised Penal Code, imposing subsidiary liability on the employer. The Court of Appeals increased the damages awarded to certain plaintiffs (notably raising awards for death and loss of earning capacity for Chuay and Lugue) while otherwise affirming the trial court’s judgment.
Petitioners’ Contentions on Review
Petitioners argued the complaint alleged ordinary civil liability (quasi-delict) under the Civil Code and thus afforded them the defense under Article 2180 — that they exercised “all the diligence of a good father of a family” in selecting and supervising their driver. They also argued the Court of Appeals lacked jurisdiction to increase awards for appellees who did not appeal the trial court’s decision.
Applicable Law
- Articles 102–103, Revised Penal Code (subsidiary civil liability of employers for felonies committed by employees in discharge of duties).
- Articles 2176, 2177, and 2180, Civil Code (quasi-delict/culpa aquiliana, separation of civil liability from penal liability, employer liability for employees acting within scope of tasks, and the due-diligence defense).
Legal Distinction Emphasized by the Court
The Supreme Court emphasized the fundamental distinction: subsidiary liability under Articles 102–103 RPC is contingent upon a prior criminal finding of the employee’s guilt (the employee’s primary liability must be established in criminal proceedings), whereas primary civil liability under Articles 2176 and 2180 of the Civil Code constitutes a tortious obligation of the employer that is independent of criminal prosecution but subject to the due-diligence defense. If no criminal action is instituted or possible (e.g., because the employee died), Article 103 cannot serve as the basis for subsidiary liability.
Court’s Analysis and Resolution on Liability
Because no criminal prosecution or conviction of the deceased driver could be instituted (the driver died), the Court held that the employer’s subsidiary liability under Article 103 could not be invoked. The action filed was properly treated as a civil action predicated on quasi-delict under the Civil Code, making the employer primarily civilly liable unless it could prove it observed all the diligence of a good father of a family. The Supreme Court found the factual findings of the trial and appellate courts — that petitioners failed to prove the due-diligence defense — to be well supported by t
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Facts of the Case
- Date and time of accident: about 7:30 in the evening of October 18, 1974.
- Vehicles involved: Franco Bus (northbound) Plate No. XY-320-PUB driven by Macario Yuro; an Isuzu Mini Bus Plate No. YL-735 driven by Magdaleno Lugue; a truck with a trailer parked facing north on the cemented pavement of MacArthur Highway at Barrio Talaga, Capas, Tarlac.
- How the accident occurred: Macario Yuro swerved the northbound Franco Bus to the left to avoid hitting the parked truck with trailer, thereby taking the lane of the incoming Isuzu Mini Bus driven by Magdaleno Lugue, making collision unavoidable.
- Consequences of collision: The mini bus was dragged fifteen (15) meters from point of impact, landed right side down facing south in the canal, and became a total wreck; the Franco Bus was damaged less severely.
- Fatalities: drivers Macario Yuro and Magdaleno Lugue; two passengers of the mini bus, Romeo Bue and Fernando Chuay, died.
- Parties who sued: Antonio Reyes (registered owner of the Isuzu Mini Bus), Mrs. Susan Chuay (wife of Fernando Chuay), and Mrs. Lolita Lugue (wife of driver-victim Magdaleno Lugue) filed Civil Case No. 2154 for damages through reckless imprudence against Mr. & Mrs. Federico Franco, owners and operators of Franco Transportation Company.
Allegations in the Complaint
- Plaintiffs alleged recklessness and imprudence of the Franco Bus driver caused the collision, resulting in his death and deaths of the mini bus driver and two passengers.
- Alleged actual damages for the Isuzu Mini Bus: P50,000.00 (total wreck).
- Alleged loss of average net income: P120.00 daily or P3,600.00 monthly, multiplied by a minimum of one more year of serviceability (claimed P40,200.00).
- Alleged damages for deaths: heirs of each deceased passenger should be awarded a minimum of P12,000.00; expected average income claimed P6,000.00 each for the driver and one passenger and P12,000.00 for the Chinese businessman passenger.
Defenses Raised by Petitioners (Owners/Operators)
- Petitioners pleaded, among other defenses, that as owners and operators of Franco Transportation Company they exercised due diligence in the selection and supervision of all their employees, including the deceased driver Macario Yuro — i.e., they invoked the defense of having "acted like a good father of a family."
Trial Court Decision (Court of First Instance of Pampanga and Angeles City, Branch IV; May 17, 1978)
- Trial court rejected petitioners’ defense of due diligence.
- Trial court characterized the driver’s act as criminal negligence punishable by law, resulting in a civil obligation arising from Article 103 of the Revised Penal Code and not from Article 2180 of the Civil Code.
- Trial court’s statement quoted: "This is a case of criminal negligence out of which civil liability arises, and not a case of civil negligence and the defense of having acted like a good father of a family or having trained or selected the drivers of his truck is no defense to avoid civil liability."
- Trial court judgment ordered petitioners to pay:
- To Antonio Reyes: actual and compensatory damages P90,000.00 for the Isuzu Mini Bus;
- To Lolita Lugue (widow of Magdaleno Lugue): actual and compensatory damages total P18,000.00;
- To Susan Chuay (widow of Fernando Chuay): actual and compensatory damages total P24,000.00;
- Attorney’s fee: P5,000.00;
- All with legal interest from filing on November 11, 1974 until paid, and costs of suit.
Court of Appeals Decision (Respondent Appellate Court; January 2, 1985) and Rationale
- Court of Appeals agreed with trial court that the deceased Franco Bus driver was guilty of reckless or criminal imprudence punishable by law in driving appellants’ bus.
- Held that civil obligation of appellants arises from Article 103 of the Revised Penal Code, resulting in subsidiary liability of appellants under that provision.
- Characterized the case as involving culpable negligence out of which civil liability arises and not one of civil negligence.
- Held there is nothing in Articles 102 and 103 of the Revised Penal Code requiring a prior judgment of conviction of the erring vehicle driver and his obligation to pay his civil liability before applying those provisions.
- Modified and increased certain awards as follows:
- To Susan Chuay: P30,000.00 for death and P112,000.00 for loss of earning capacity;
- To Lolita Lugue: P30,000.00 for death and P62,000.00 for loss of earning capacity;
- Rest of trial court judgment affirmed; costs against defendants-appellants.
Petitioners’ Motion for Reconsideration and Appeal to the Supreme Court
- Petitioners filed motion for reconsideration of the Court of Appeals decision on April 1, 1985; it was denied on May 13, 1985.
- Petitioners then filed the instant petition raising two legal questions:
- Whether the action for recovery of damages was predicated upon crime (penal provisions) or quasi-delict (Civil Code).
- Whether the Court of Appeals, on appeal by the defeated parties (petitioners), could properly increase the award of damages in favor of private respondents Chuay and Lugue, who did not appeal the lower court’s decision.
Supreme Court’s Preliminary Distinction of Two Types of Employer Liability
- Court emphasized distinction between:
- Subsidiary liability of employer under Articles 102 and 103 of the Revised Penal Code (liability based on felonies/delicts committed by employees in discharge of duties; employer subsidiary to employee’s primary criminal liability).
- Primary civil liability of employer under Civil Code Articles 2176 and 2180 (culpa a