SPOUSES FEDERICO FRANCO AND FELICISIMA R. FRANCO, PETITIONERS, VS. INTERMEDIATE APPELLATE COURT, ANTONIO REYES, MRS. SUSAN CHUAY AND LOLITA LUGUE, RESPONDENTS.

The instant petition for review of a decision of the Court of
Appeals deals mainly with the nature of an employer’s liability for his employee’s negligent act.

At about 7:30 in the evening of October 18, 1974, Macario Yuro
swerved the northbound Franco Bus with Plate No. XY-320-PUB he was driving to
the left to avoid hitting a truck with a trailer parked facing north along the
cemented pavement of the MacArthur Highway at Barrio Talaga, Capas, Tarlac,
thereby taking the lane of an incoming Isuzu Mini Bus bearing Plate No. YL-735 being driven by one Magdaleno Lugue
and making a collision between the two
(2) vehicles an unavoidable and disastrous eventuality.

Dragged fifteen (15) meters from the point of impact (midway the
length of the parked truck with trailer), the mini bus landed right side down
facing south in the canal of the highway, a total wreck. The Franco Bus was also damaged but not as
severely. The collision resulted in the
deaths of the two (2) drivers, Macario Yuro and Magdaleno Lugue, and two (2)
passengers of the mini bus, Romeo Bue and Fernando Chuay.

Consequently, Antonio Reyes, the registered owner of the Isuzu Mini Bus, Mrs. Susan Chuay, the
wife of victim Fernando Chuay, and Mrs. Lolita Lugue, the wife of driver-victim
Magdaleno Lugue, filed an action for damages through reckless imprudence before
the Court of First Instance of Pampanga and Angeles City, Branch IV, docketed
as Civil Case No. 2154 against Mr. & Mrs. Federico Franco, the owners and
operators of the Franco Transportation Company. The complaint alleged that: (a) the recklessness and imprudence of the Franco Bus driver caused the
collision which resulted in his own death and that of the mini bus driver and
two (2) other passengers thereof; (b) that as a consequence of the vehicular
mishap, the Isuzu Mini Bus became a total wreck resulting in actual damages
amounting to P50,000.00 and the loss of an average net income of P120.00 daily
or P3,600.00 monthly multiplied by a minimum of one more year of serviceability
of said mini bus or P40,200.00; and, (c) that in view of the death of the three
(3) passengers aforementioned, the heirs of each should be awarded a minimum of P12,000.00
and the expected average income of P6,000.00 each of the driver and one
of the passengers and P12,000.00 of the Chinese businessman passenger.

In answer to the complaint, defendants set up, among others, the
affirmative defense that as owners and operators of the Franco Transportation
Company, they exercised due diligence in the selection and supervision of all
their employees, including the deceased driver Macario Yuro.

Said defense was, however, rejected by the trial court in its
decision^[1]
dated May 17, 1978, for the reason that the act of the Franco Bus driver was a
negligent act 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. It said: “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”^[2]. On this premise, the trial court ruled as
follows:

WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiffs, Antonio Reyes, Lolita Lugue, and Susan Chuay, and
against the defendants Mr. and Mrs.
Federico Franco, ordering the latter:

(1) To pay Antonio Reyes, actual and compensatory damages in the
amount of P90,000.00 for the Isuzu Mini Bus;

(2) To pay Lolita Lugue, the widow of Magdaleno Lugue, actual and
compensatory damages in the total sum of P18,000.00;

(3) To pay Susan Chuay, the widow of Fernando Chuay, actual and
compensatory damages in the total sum of P24,000.00; and

(4) To pay attorney’s fee in the amount of P5,000.00;

All with legal interests from the filing of this suit on November
11, 1974 until paid; and the costs of this suit.

SO ORDERED.^[3]

On appeal by herein petitioners as defendants-appellants,
respondent appellate court, agreeing with the lower court, held that
defendants-appellants’ driver who died instantly in the vehicular collision,
was guilty of reckless or criminal imprudence punishable by law in driving
appellants’ bus; that the civil obligation of the appellants arises from
Article 103 of the Revised Penal Code resulting in the subsidiary liability of
the appellants under the said provision^[4];
that the case subject of appeal is one involving culpable negligence out of
which civil liability arises and is not one of civil negligence^[5];
and that there is nothing in Articles 102 and 103 of the Revised Penal Code
which requires a prior judgment of conviction of the erring vehicle driver and
his obligation to pay his civil liability before the said provisions can be applied.^[6]
Respondent appellate court increased the award of damages granted by the lower
court as follows:

WHEREFORE, the
decision appealed from is hereby modified as follows:

1. To pay Susan
Chuay, widow of Fernando Chuay, the sum of P30,000.00 for the latter’s death
and P112,000.00 for loss of earning capacity;

2. To pay Lolita
Lugue, widow of Magdaleno Lugue, the sum of P30,000.00 for the latter’s death
and P62,000.00 for loss of earning capacity. The rest of the judgment appealed from is affirmed. Costs against defendants-appellants.

SO ORDERED.^[7]

On April 1, 1985, petitioners filed a motion for reconsideration
of the aforesaid respondent appellate court’s decision dated January 2, 1985
but the same was denied on May 13, 1985.

Hence, the instant petition raising two (2) legal questions: first, whether the action for recovery of
damages instituted by herein private respondents was predicated upon crime or
quasi-delict; and second, 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.

Petitioners contend that the allegations in paragraph 9 of the
Amended Complaint^[8]
of herein private respondents as plaintiffs in Civil Case No. 2154
unequivocally claim that the former as the employers of Macario Yuro, the
driver of the Franco Bus who caused the vehicular mishap, are jointly and
severally liable to the latter for the damages suffered by them which thus
makes Civil Case No. 2154 an action predicated upon a quasi?delict under
the Civil Code subject to the defense that the employer exercised all the
diligence of a good father of a family in the selection and supervision of
their employees.

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.

x         x
          x           x           x

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.

x         x           x
          x           x

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.^[9]

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 therefore. 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^[10]
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.^[11]

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.^[12]
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.^[13]
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.^[14]

Furthermore, the records^[15]
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.^[16]

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.^[17]

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.

Feliciano, Bidin, and
Cortes, JJ., concur.

Gutierrez, Jr., J., on leave.

^[1]
Record on Appeal, p. 35, Rollo,
p. 23.

^[2]
Record on Appeal, p. 60, Rollo, p.
23.

^[3]
Ibid, at pp. 61-62

^[4]
Arambulo vs. Manila Electric
Company, 55 Phil. 75, 77

^[5]
City of Manila vs. Manila
Electric Company, 52 Phil. 586, 594-595

^[6]
Court of Appeals Decision, Rollo,
pp. 26-27.

^[7]
Ibid, at p. 29.

^[8]
Record on Appeal, p. 6, Rollo,
p. 23

^[9]
Rakes v. Atlantic Gulf &
Pacific Co., 7 Phil. 359, 364.

^[10]
M.D. Transit and Taxi Co., Inc. vs.
Court of Appeals, 22 SCRA 559.

^[11]
CA decision, Rollo, pp. 27-28.

^[12]
Agalo-os vs. Intermediate
Appellate Court, 149 SCRA 546.

^[13]
La Campana Food Products, Inc. vs. PCI Bank, 142 SCRA 394.

^[14]
Aguilar vs. Chan, 144 SCRA 673.

^[15]
Complaint, pp. 5-6, Record on Appeal, Rollo, p. 23.

^[16]
Makabali vs. CA, et al., G.R. No. L-46877, January 22, 1988.

^[17]
People vs. Cruz, 142 SCRA 576.