FACTS:

The case involves a complaint for damages filed by Nenita Custodio, a passenger in a public utility jeepney, against several defendants following a vehicular collision. Custodio boarded the jeepney on her way to work when it collided with a bus owned by Metro Manila Transit Corporation (MMTC). The collision caused Custodio to sustain serious physical injuries and be hospitalized for 24 days. The defendants denied the allegations and accused each other of being at fault. MMTC and its driver claimed that the jeepney was driven recklessly and that the employer of the jeepney driver failed to exercise due diligence in the selection and supervision of employees. On the other hand, the owner of the jeepney pointed to the negligence of MMTC and its driver as the proximate cause of the accident and alleged that MMTC failed to exercise due diligence in the selection and supervision of its employees. The trial court declared one of the defendants in default and proceeded with the trial, where Custodio and her parents testified as witnesses for the prosecution. The attending physician also testified on the injuries suffered by Custodio. MMTC presented witnesses who discussed the company's selection process for bus drivers. Defendant Lamayo did not present any witness.

The case involves an appeal filed by Metro Manila Transit Corporation (MMTC) regarding the decision of the Court of Appeals holding MMTC solidarily liable for damages awarded by the trial court, due to their concurrent negligence. The accident occurred when a bus driven by Godofredo Leonardo, an employee of MMTC, collided with a taxi driven by Victorino Lamayo. The trial court found both drivers negligent and held them and Lamayo solidarily liable for damages. However, MMTC was absolved from liability based on evidence presented that they exercised due diligence in the selection and supervision of their employees. The Court of Appeals modified the decision, holding MMTC solidarily liable with the other defendants. MMTC filed a petition for review questioning the sufficiency of evidence presented regarding their due diligence in the selection and supervision of their driver. The timeliness of the petition was also questioned, but it was granted an extension to file the petition within the reglementary period.

The petitioner, MMTC, argues that the oral testimonies of its employees sufficiently prove that the driver in question had complied with all hiring and clearance requirements and had undergone all necessary trainings and examinations. It claims that the lower court's consideration of these testimonies as unrebutted should not be disturbed on appeal. The petitioner further argues that there is no law requiring facts to be established by documentary evidence, and therefore, the testimonial evidence should not be discredited.

On the other hand, the private respondent argues that the factual findings of the Court of Appeals are conclusive and should not be reviewed by the Supreme Court. The private respondent contends that the Supreme Court should not burden itself with analyzing and weighing the evidence all over again.

It is noted that while the findings of fact of the Court of Appeals are usually conclusive and entitled to great respect, there are well-established exceptions. These include instances where the conclusion is based on speculation, when there is grave abuse of discretion, when the judgment is based on a misapprehension of facts, when the findings are conflicting, or when the findings are based on the supposed absence of evidence and contradicted by evidence on record.

ISSUES:

1. Whether the Court of Appeals erred in finding MMTC, the employer of one of the erring drivers, liable for the accident.

2. Whether the trial court correctly absolved MMTC from liability based on the evidence presented.

3. Whether the petitioner has sufficiently proven the observance of the diligence of a good father of a family in the selection and supervision of its employees.

4. Whether the evidence presented by the petitioner is convincing enough to prove the diligence of a good father of a family.

5. Whether or not the respondent court erred in finding petitioner liable for damages under Article 2180 of the Civil Code.

6. Whether or not the appellant exercised due diligence in the selection and supervision of his employees.

7. Whether or not the mere formulation of company policies on safety without proof of compliance is sufficient to exempt the employer from liability.

RULING:

1. The Court of Appeals did not err in finding MMTC liable for the accident. The trial court's decision to absolve MMTC from liability was not supported by the evidence presented. MMTC failed to prove that it had exercised due diligence in the selection and supervision of its employees, as required by law.

2. The petitioner has failed to sufficiently prove the observance of the diligence of a good father of a family in the selection and supervision of its employees. The petitioner's attempt to prove its diligence through oral testimonies without any corroborating evidence was deemed insufficient.

3. The evidence presented by the petitioner is not convincing enough to prove the diligence of a good father of a family. The petitioner's detailed procedure for screening job applicants and supervising employees, as testified by its own witnesses, were seen as presumptuous and lacking in supporting evidence.

4. The Supreme Court ruled that the respondent court did not err in finding petitioner liable for damages under Article 2180 of the Civil Code. The case is within the coverage of Articles 2176 and 2177, in relation to Article 2180, of the Civil Code provisions on quasi-delicts. The employer-employee relationship has been established, and the plaintiff has shown that the employee was acting within the scope of his assigned task when the tort was committed. Therefore, the defendant, as the employer, may only interpose the defense of due diligence in the selection and supervision of employees. In this case, the petitioner failed to rebut the presumption of negligence, thus making the employer liable for damages.

5. The appellant failed to exercise due diligence in the selection and supervision of his employees. The defense of due diligence in the selection and supervision of employees cannot be deemed sufficient and plausible simply by invoking the existence of company guidelines and policies. The burden is on the employer to prove that it has been diligent not only in the selection of employees but also in the actual supervision of their work.

6. The mere formulation of various company policies on safety without showing that they were being complied with is not sufficient to exempt the employer from liability. It is incumbent upon the employer to show that recruitment procedures and company policies on efficiency and safety were followed.

PRINCIPLES:

• Factual findings of the trial court may be reversed by the Court of Appeals if it appears that the trial court may have been mistaken in the appreciation of evidence.

• The findings of fact of the Court of Appeals are normally conclusive and beyond the review of the Supreme Court. However, there are exceptions to this rule, such as when the findings are grounded on speculation, when the inference is manifestly mistaken, when there is grave abuse of discretion, or when the findings are contrary to those of the trial court.

• In civil cases, each party must prove his own affirmative assertion by the degree of evidence required by law, which is preponderance of evidence. It is incumbent on the plaintiff to prove his case, and the defendant must also prove his own defenses.

• The burden of proof rests on the party making the claim, whether it is the plaintiff or the defendant.

• It is within each party's discretion to present all available evidence in the manner deemed necessary to prove their position.

• The best and most complete evidence should be formally entered to support a party's case.

• Testimonial evidence does not necessarily need corroboration, but it should be persuasive and not based on generalities.

• The failure to present available documentary proof or records relevant to a party's defense weakens their argument.

• The observance of the diligence of a good father of a family requires the employer to exercise due diligence in the selection and supervision of employees.

• General statements and assumptions without supporting evidence are not sufficient to prove the diligence of a good father of a family.

• The employer's vicarious liability under Article 2180 of the Civil Code arises from the failure to exercise due care and vigilance over the acts of subordinates to prevent them from causing damage. Negligence is imputed to the employer, unless they prove the contrary.

• The employer-employee relationship must be established in order for the employer to be held liable for the torts committed by employees within the scope of their assigned tasks.

• The diligence of a good father of a family required to be observed by employers to prevent damages under Article 2180 refers to due diligence in the selection and supervision of employees.

• When the employee causes damage due to his own negligence while performing his duties, there arises a presumption of negligence on the part of the employer, rebuttable only by proof of observance of the diligence of a good father of a family.

• In cases where there is concurrent negligence of the drivers of colliding vehicles, the drivers and owners of the vehicles shall be primarily, directly, and solidarily liable for damages.

• The obligation of employers to observe due diligence in the selection and supervision of employees is not a mere formalism, but the non-observance thereof actually becomes the basis of their vicarious liability under Article 2180.

• Due diligence in the selection and supervision of employees includes observing steps such as verifying their qualifications, experience, and record of service.

• Employers should formulate suitable rules and regulations for the guidance of employees and issue proper instructions intended for the protection of the public and persons with whom the employer has relations through his or its employees.

• Actual implementation and monitoring of consistent compliance with company rules is the constant concern of the employer.

• The negligence of an employee gives rise to a presumption of negligence on the part of the employer. The employer has the burden of proving due diligence in the selection and supervision of employees.

• Mere formulation of company policies on safety without proof of compliance is not sufficient to exempt the employer from liability.

• The law requires the highest possible degree of diligence from common carriers in order to curb the recklessness of their drivers and benefit passengers, pedestrians, and owners and passengers of other vehicles.