G.R. No. L-23882 February 17, 1968
M. D. TRANSIT & TAXI CO., INC., petitioner, vs. COURT OF APPEALS and DAVID EPSTEIN, respondents.

FACTS

On August 18, 1958, David Epstein (plaintiff) was hit by a bus owned by M.D. Transit & Taxi Co., Inc. (appellant) and driven by its employee, Dominador Sembrano, while crossing a pedestrian lane in Manila. Epstein suffered fractures and lacerations. Sembrano was prosecuted and convicted for serious physical injuries through reckless imprudence by the Court of First Instance of Manila. The criminal court refrained from ruling on civil liability as Epstein reserved the right to file a separate civil action. Sembrano’s appeal was later withdrawn, making the conviction final. Meanwhile, on January 23, 1959, Epstein filed a civil action for damages against Sembrano and the appellant company. The trial court held Sembrano primarily liable and the appellant subsidiarily liable for damages. The Court of Appeals affirmed this decision.

ISSUE

The main issue is whether the civil action for damages is based on a crime (making the employer subsidiarily liable under the Revised Penal Code) or on a quasi-delict (where the employer’s diligence in selection and supervision is a defense).

RULING

The Supreme Court affirmed the decision of the Court of Appeals, holding that the action is based on civil liability arising from a crime, not a quasi-delict. The Court ruled that: (1) The allegations in the complaint, which prayed that the appellant be held liable subsidiarily “upon [Sembrano’s] inability” to pay, are characteristic of an action to enforce subsidiary liability under Articles 102 and 103 of the Revised Penal Code; (2) The plaintiff’s reservation in the criminal case to file a separate civil action and his presentation of the criminal conviction as evidence at trial corroborate that the action springs from the crime; (3) The employer’s defense of having exercised due diligence in the selection and supervision of its employee is immaterial in an action to enforce subsidiary civil liability arising from a crime; (4) The judgment of conviction in the criminal case against the employee is conclusive upon the employer’s subsidiary liability, provided the employer had the opportunity to protect its interests in the criminal case; (5) Allegations of the employee’s conviction and insolvency in the civil complaint are not indispensable, as the subsidiary liability is enforceable once the primary liability of the employee is established. The distinction between “actual damages” and “compensatory damages” in the lower court’s decision was deemed inconsequential, as both are comprehended within indemnification for damages under the Civil Code.