G.R. No. L-11154; March 21, 1916
E. MERRITT, plaintiff-appellant, vs. GOVERNMENT OF THE PHILIPPINE ISLANDS, defendant-appellant.

FACTS:
On March 25, 1913, plaintiff E. Merritt was severely injured in a collision between his motorcycle and an ambulance owned and operated by the General Hospital (an agency of the Government of the Philippine Islands) at the intersection of Calle Padre Faura and Taft Avenue in Manila. The trial court found that the collision was caused solely by the negligence of the government chauffeur, who made an improper turn without giving a warning signal. Merritt suffered a fractured skull, a serious leg fracture, and permanent physical and mental impairments, reducing his earning capacity as a building contractor by 50%. Prior to the suit, the Philippine Legislature passed Act No. 2457 (effective February 3, 1915), which authorized Merritt to bring this suit against the Government “to fix the responsibility for the collision… and to determine the amount of the damages, if any.” The Court of First Instance of Manila rendered judgment in favor of Merritt for P14,741. Both parties appealed: Merritt sought an increase in the damages awarded, while the Government contested its liability entirely.

ISSUE:
1. Whether the Government of the Philippine Islands is legally liable (liable under the law of torts) for damages caused by the negligence of its employee (the ambulance driver).
2. Whether the damages awarded by the trial court should be modified.

RULING:
The Supreme Court REVERSED the judgment of the trial court.

1. On Government Liability: The Government is NOT legally liable for the damages. While Act No. 2457 constituted a waiver of the Government’s immunity from suit, it did not create a new cause of action or concede liability. The Court, applying the Spanish Civil Code provisions (Articles 1902 and 1903) in force at the time, held that the State is only liable for the acts of its agents when they act as “special agents” within the meaning of Article 1903(5). A “special agent” is one who receives a definite and fixed order or commission, foreign to the regular duties of his office. The ambulance driver was an employee performing his regular, inherent duties (transportation for the hospital) and was therefore not a “special agent.” Consequently, the Government cannot be held vicariously liable under the Civil Code for his negligent act.

2. On the Award of Damages: Although the Court reversed the judgment on liability, it made a provisional finding on damages for completeness. It agreed with the trial court’s award of P5,000 for permanent injuries. However, it found that the trial court erred in limiting the award for lost wages to the period of hospitalization (2 months and 21 days). The evidence established Merritt was wholly incapacitated for work for six months. At a monthly rate of P1,000, the correct amount for lost wages was P6,000. Thus, the total provable damages were P18,075. The Court clarified that the Government’s moral or equitable obligation to pay this sum is a matter for the Legislature, not the judiciary.

Dispositive Portion: Judgment reversed. The Government is absolved from liability. No costs.