Case Summary (G.R. No. L-25142)
Key Dates and Applicable Law
The complaint was filed prior to the decision dated March 25, 1975. Given the decision date, the applicable legal provisions are those from the Civil Code presiding at that time, specifically Article 2176 and Article 2180 of the Civil Code of the Philippines.
Facts and Nature of the Complaint
The plaintiffs-appellants sought damages for injuries suffered by Pangalangan and for material damage to the bus, which was out of use for seventy-nine days, causing lost earnings amounting to Php 8,665.51. The claim was founded on quasi-delict or culpa aquiliana, grounded on alleged negligence and fault of the truck driver, Pineda. Balingit, as the manager of Phil-American Forwarders, Inc., was also sued under the theory of vicarious liability.
Lower Court's Decision
The Court of First Instance of Tarlac dismissed the complaint against Archimedes J. Balingit on the grounds that under Article 2180 of the Civil Code, Balingit, as the manager of the corporation, did not qualify as the “manager of an establishment or enterprise” liable for damages caused by employees. The court held that Balingit was not Pineda’s employer and thus could not be held liable for his negligent acts.
Legal Provisions on Quasi-Delict and Vicarious Liability
Article 2176 of the Civil Code establishes the obligation to pay for damages caused by fault or negligence. Meanwhile, Article 2180 extends responsibility not only for one’s own acts but also for those of persons for whom one is responsible. The article specifically mentions that owners and managers of establishments or enterprises are liable for damages caused by their employees acting within the scope of their employment. Employers are liable for their employees’ damage even if the business is not actively engaged in industry or commerce. However, this liability ceases if the employer proves due diligence akin to that of a “good father of a family.”
Central Legal Issue: Liability of a Corporate Manager
The pivotal legal question was whether the terms “employers” and “owners and managers of an establishment or enterprise” in Article 2180 include the manager of a corporation owning the truck. The Court held they do not. The term “manager” in this context is synonymous with employer, implying direct control or ownership over the establishment. As a manager of a corporation, Balingit was considered an employee or subordinate of the corporation itself and not an employer or independent establishment manager liable under Article 2180.
Supporting Jurisprudence
The Court cited Spanish jurisprudence interpreting similar provisions, which concluded that a manager of an entity operated by a corporation remains subordinate to the corporation’s authority and is thus not personally liable as an employer for the corporation’s employees’ acts.
Rejection of Piercing the Corporate Veil Argument
The plaintiffs-appellants introduced a new factual issue on appeal, contend
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Facts of the Case
- On November 24, 1962, a freight truck owned by Phil-American Forwarders, Inc. and driven recklessly by Fernando Pineda collided with a bus owned by Philippine Rabbit Bus Lines, Inc., driven by Felix Pangalangan.
- The collision occurred along the national highway at Sto. Tomas, Pampanga.
- As a result of the accident, Pangalangan sustained personal injuries, and the bus sustained damages rendering it unusable for seventy-nine days.
- The bus company claimed a loss of earnings amounting to P8,665.51 during the period the bus was out of operation.
- Philippine Rabbit Bus Lines, Inc., and Felix Pangalangan filed an action for damages based on quasi-delict or culpa aquiliana against Phil-American Forwarders, Inc., Fernando Pineda, and Archimedes J. Balingit, the latter being the manager of Phil-American Forwarders, Inc.
- In the defense, Balingit contended he was not the employer of Pineda and moved to dismiss the complaint against him for lack of cause of action.
- The Court of First Instance of Tarlac dismissed the complaint against Balingit, ruling that as the manager of Phil-American Forwarders, Inc., he was not an "owner or manager" of an establishment under Article 2180 of the Civil Code for purposes of liability.
Legal Issue Presented
- Whether the terms "employers" and "owners and managers of an establishment or enterprise" under Article 2180 of the Civil Code include the manager of a corporation owning the truck, thus rendering the manager liable for damages caused by the recklessly driven vehicle.
Relevant Statutory Provisions
- Article 2176, Civil Code: Imposes obligation to pay damages caused by fault or negligence, defining such liability as quasi-delict when there is no pre-existing contractual relation.
- Article 2180, Civil Code: Extends the obligation for damages not only