SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, PETITIONERS, VS. HONORABLE INOCENCIO D. MALIAMAN AND NATIONAL IRRIGATION ADMI­NISTRATION, RESPONDENTS.

In G.R. No. 55963, the petition for review on certiorari seeks the affirmance
of the decision dated March 20, 1980 of the
then Court of First Instance of Nueva Ecija, Branch VIII, at San Jose City, and its modification with
respect to the denial of
petitioner’s claim for moral and exemplary damages and attorney’s fees.

In G.R. No. 61045, respondent National Irrigation Administration seeks the reversal
of the aforesaid decision of the lower court. 
The original appeal of this case before the Court of Appeals was
certified to this Court and in the resolution of July 7, 1982, it was docketed with the aforecited
number.  And in the resolution of April 3,
1989, this case was
consolidated with G.R. No. 55963.

It appears that on August
21, 1976 at about 6:30 P.M., a pick-up owned and operated by respondent
National Irrigation Administration, a government agency bearing Plate No.
IN-651, then driven officially by Hugo Garcia, an employee of said agency as
its regular driver, bumped a bicycle ridden by Francisco Fontanilla,
son of herein petitioners, and Restituto Deligo at Maasin, San Jose City
along the Maharlika Highway.  As a result of the impact, Francisco Fontanilla and Restituto Deligo were injured and brought to the San Jose City Emergency Hospital for treatment.  Fontanilla was
later transferred to the Cabanatuan Provincial Hospital where he died.

Garcia was then a regular
driver of respondent National Irrigation Administration who, at the time of the
accident, was a licensed professional driver and who qualified for employment
as such regular driver of respondent after having passed the written and oral
examinations on traffic rules and maintenance of vehicles given by National
Irrigation Administration authorities.

The within petition is
thus an offshoot of the action (Civil Case No. SJC-56) instituted by petitioners-spouses on April 17, 1978
against respondent NIA before the then Court of First Instance of Nueva Ecija, Branch VIII at San
Jose City, for damages in connection
with the death of their son resulting
from the aforestated accident.

After trial, the trial court rendered judgment on March 20, 1980 which directed
respondent National Irrigation Administration to pay damages (death benefits)
and actual expenses to
petitioners.  The dispositive
portion of the decision reads thus:

“x x x x x
Judgment is hereby rendered ordering the defendant National Irrigation
Administration to pay to the heirs of the deceased P12,000.00 for the death of
Francisco Fontanilla: 
P3,389.00 which the parents of the deceased had spent for the
hospitalization and burial of the deceased Francisco Fontanilla;
and to pay the costs.” (Brief for the petitioners spouses Fontanilla, p. 4; Rollo, p. 132)

Respondent National Irrigation Administration filed on April 21, 1980, its motion for
reconsideration of the aforesaid decision which respondent trial court denied
in its Order of June 13, 1980.  Respondent National Irrigation Administration
thus appealed said decision to the Court of Appeals (C.A.-G.R. NO. 67237-R)
where it filed its brief for appellant in support of its position.

Instead of filing the required brief in the aforecited
Court of Appeals case, petitioners filed the instant petition with this Court.

The sole issue for the resolution of the Court is:  Whether
or not the award of moral
damages, exemplary damages and attorney’s fees is legally proper in a complaint for damages
based on quasi-delict which resulted in the death of
the son of herein petitioners.

Petitioners allege:

1.  The award of moral
damages specifically allowable under paragraph 3 of Article 2206 of the New
Civil Code which provides that the spouse, legitimate and illegitimate descendants and ascendants of the deceased
may demand moral damages for mental anguish by reason of the death of the deceased. 
Should moral damages be granted, the award should be made to each of
petitioners-spouses individually and in varying amounts depending upon
proof of mental and depth of intensity of the same, which should not be less
than P50,000.00 for each of them.

2.  The decision of the
trial court had made an impression that respondent National Irrigation
Administration acted with gross negligence
because of the accident and the subsequent failure of the National Irrigation
Administration personnel including the driver to stop in order to give
assistance to the victims.  Thus, by
reason of the gross negligence of respondent, petitioners become entitled to exemplary damages under Arts. 2231 and 2229 of the New Civil
Code.

3.  Petitioners are entitled
to an award of attorney’s fees, the amount of which (20%) had been sufficiently
established in the hearing of May 23,
1979.

4.  This petition has been
filed only for the purpose of reviewing the findings of the lower court upon which the disallowance of moral damages,
exemplary damages and attorney’s fees was based and not for the purpose of
disturbing the other findings of fact and conclusions of law.

The Solicitor General, taking up the cudgels for public
respondent National Irrigation Administration, contends thus:

1.  The filing of the
instant petition is not proper in view of the appeal taken by respondent
National Irrigation Administration to the Court of Appeals against the judgment
sought to be reviewed.  The focal issue
raised in respondent’s appeal to the Court of Appeals involves the question as
to whether or not the driver of the vehicle that bumped the victims was
negligent in his operation of said vehicle. 
It thus becomes necessary that before petitioners’ claim for moral and
exemplary damages could be resolved, there should first be a finding of
negligence on the part of respondent’s employee-driver.  In this regard, the Solicitor General alleges
that the trial court decision does not categorically contain such finding.

2.  The filing of the
“Appearance and Urgent Motion For Leave to File Plaintiff-Appellee’s Brief” dated December 28, 1981 by
petitioners in the appeal (CA-G.R. NO. 67237-R; and G.R. NO. 61045) of the
respondent National Irrigation Administration before the Court of Appeals, is
an explicit admission of said petitioners that the herein petition is not
proper.  Inconsistent procedures are
manifest because while petitioners question the findings of fact in the Court
of Appeals, they present only questions of law before this Court which posture
confirms their admission of the facts.

3.  The fact that the
parties failed to agree on whether or not negligence caused the vehicular
accident involves a question of fact which petitioners should have brought to
the Court of Appeals within the reglementary
period.  Hence, the decision of the trial
court has become final as to the petitioners and for this reason alone, the
petition should be dismissed.

4.  Respondent Judge acted
within his jurisdiction, sound discretion and in conformity with the law.

5.  Respondents do not
assail petitioners’ claim to moral and exemplary damages by reason of the shock and subsequent illness
they suffered because of the death of their son.  Respondent National Irrigation
Administration, however, avers that it cannot be held liable for the damages
because it is an agency of the State performing governmental functions and
driver Hugo Garcia was a regular driver of the vehicle, not a special agent who
was performing a job or act foreign to his usual duties.  Hence, the liability for the tortious act should not be borne by respondent government
agency but by driver Garcia who should answer for the consequences of his act.

6.  Even as the trial court
touched on the failure or laxity of respondent National Irrigation
Administration in exercising due diligence in the selection and supervision of
its employee, the matter of due diligence is not an issue in this case since driver
Garcia was not its special agent but a regular driver of the vehicle.

The sole legal question on whether or not petitioners may be entitled to an award
of moral and exemplary damages and attorney’s fees can
very well be answered with the application of Arts. 2176 and
2180 of the New Civil Code.

Art. 2176 thus provides:

“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.”

Paragraphs 5 and 6 of Art. 2180 read as
follows:

“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.”

“The State is responsible in like manner when it acts through
a special agent; but not when the
damage has been caused by the official to whom the task done properly pertains,
in which case what is provided in Art. 2176 shall be applicable.”

The liability of the State has two aspects, namely:

1.  Its public or
governmental aspects where it is liable for the tortious
acts of special agents only.

2.  Its private or business aspects (as when it engages
in private enterprises) where it becomes liable as an ordinary employer. (p.
961, Civil Code of the Philippines;  Annotated. Paras; 1986
Ed.)

In this jurisdiction, the State assumes a limited liability for
the damage caused by the tortious
acts or conduct of its special agent.

Under the aforequoted
paragraph 6 of Art. 2180, the State has voluntarily assumed liability
for acts done through special agents.  The
State’s agent, if a public official, must not only be specially commissioned to
do a particular task but that such task must be foreign to said official’s
usual governmental functions.  If the
State’s agent is not a public official, and is commissioned to perform
non-governmental functions, then the State assumes the role of an ordinary
employer and will be held liable as
such for its agent’s tort.  Where the
government commissions a private individual for a special governmental task, it
is acting through a special agent within the meaning of the provision.  (Torts and Damages, Sangco, p. 347, 1984 Ed.)

Certain functions and activities, which can be performed only by
the government, are more or less generally agreed to be
“governmental” in character, and so the State is immune from tort
liability.  On the other hand, a service
which might as well be provided by a private corporation, and particularly when
it collects revenues from it, the function is considered a “proprietary”
one, as to which there may be liability for the torts of agents within the
scope of their employment.

The National Irrigation Administration is an agency of the
government exercising proprietary functions, by express provision of Rep. Act
No. 3601.  Section 1 of said Act
provides:

“Section 1.  Name and domicile.  – A body corporate is hereby
created which shall be known as the National Irrigation Administration,
hereinafter called the NIA for short, which shall be organized immediately
after the approval of this Act.  It shall
have its principal seat of business in the City of Manila
and shall have representatives in all provinces for the proper conduct of its
business.’

Section 2 of said law spells out some of the NIA’s proprietary
functions.  Thus –

“Sec. 2.  Powers and objectives.  – The NIA shall have the following powers and
objectives:

“(a)         x x x x x x x x x x x x x x x x x x

“(b)         x x x x x x x x x x x x x x x x x x

“(c)         To collect from the users of
each irrigation system constructed by it such fees as may be necessary to
finance the continuous operation of the system and reimburse within a certain period not less than twenty-five
years cost of construction thereof; and

“(d)         To do all
such other things and to transact all such business as are directly or
indirectly necessary, incidental or conducive to the attainment of the above
objectives.”

Indubitably, the NIA is a government corporation with juridical
personality and not a mere agency of the government.  Since it is a corporate body performing non-governmental functions, it now becomes
liable for the damage caused by the accident resulting from the tortious act of its driver-employee.  In this particular case, the NIA assumes the
responsibility of an ordinary employer and as such, it becomes answerable for damages.

This assumption of liability, however, is predicated upon the
existence of negligence on the part of respondent NIA.  The negligence referred to here is the
negligence of supervision.

At this juncture, the matter of due diligence on the part of
respondent NIA becomes a crucial issue in determining its liability since it
has been established that respondent is
a government agency performing proprietary functions and as such, it
assumes the posture of an ordinary employer which, under Par. 5 of Art. 2180,
is responsible for the damages caused by its employees provided that it has
failed to observe or exercise due diligence in the selection and supervision of
the driver.

It will be noted from the assailed decision of the trial court
that “as a result of the impact, Francisco Fontanilla
was thrown to a distance 50 meters
away from the point of impact while Restituto Deligo was thrown a
little bit further away.  The impact took place almost at the
edge of the cemented portion of the road.” (Underlining supplied) [page 26, Rollo]

The lower court further declared that “a speeding vehicle
coming in contact with a person causes force and impact upon the vehicle that
anyone in the vehicle cannot fail to notice. 
As a matter of fact, the impact was so strong
as shown by the fact that the vehicle suffered dents on
the right side of the radiator guard,
the hood, the fender and a crack
on the radiator as shown by the
investigation report (Exhibit “E”).  (Underscoring supplied) [page
29, Rollo]

It should be emphasized that the accident happened along the Marikina National Road within
the city limits of San Jose City,
an urban area.  Considering the fact that
the victim was thrown 50 meters away from the point of impact, there is a
strong indication that driver Garcia was driving at a high speed.  This is confirmed by the fact that the
pick-up suffered substantial and heavy damage as above-described and the fact
that the NIA group was then “in a hurry to reach the campsite as early as
possible”, as shown by their not stopping to find out what they bumped as
would have been their normal and initial reaction.

Evidently, there was negligence in the supervision of the driver
for the reason that they were travelling at a high
speed within the city limits and yet the supervisor of the
group, Ely Salonga, failed to caution and make
the driver observe the proper and allowed speed limit within the city.  Under the situation, such negligence is
further aggravated by their desire to reach their destination without even
checking whether or not the vehicle suffered damage from the object it bumped,
thus showing imprudence and recklessness on the part of both the driver and the
supervisor in the group.

Significantly, this Court has ruled that even if the employer can prove the diligence in the selection
and supervision (the latter aspect has not been established herein) of the
employee, still if he ratifies the wrongful acts, or take no step to avert
further damage, the employer would still be liable.  (Maxion vs. Manila
Railroad Co., 44 Phil. 597).

Thus, too, in the case of Vda.
de Bonifacio vs. B.L.T. Bus Co. (L-26810, August 31, 1970, 34
SCRA 618), this Court held that a driver should be especially watchful in
anticipation of others who may be using the highway, and his failure to keep a
proper look out for reasons and objects in the line to be traversed constitutes
negligence.

Considering the foregoing, respondent NIA is hereby
directed to pay herein petitioners-spouses the amounts of P12,000.00 for the
death of Francisco Fontanilla; P3,389.00 for
hospitalization and burial expenses of the aforenamed
deceased; P30,000.00 as moral damages; P8,000.00 as exemplary damages and
attorney’s fees of 20% of the total award.

SO ORDERED.

Padilla, (Acting Chairman), Sarmiento,
and Regalado, JJ., concur.

Melencio-Herrera, J., (Chairman), on leave.