G.R. No. L-52732 August 29, 1988
F.F. CRUZ and CO., INC., petitioner, vs. THE COURT OF APPEALS, GREGORIO MABLE as substituted by his wife LUZ ALMONTE MABLE and children DOMING, LEONIDAS, LIGAYA, ELENA, GREGORIO, JR., SALOME, ANTONIO, and BERNARDO all surnamed MABLE, respondents.

FACTS

Petitioner F.F. Cruz and Co., Inc. operated a furniture manufacturing shop adjacent to the residence of private respondents, the Mable family. In August 1971, Gregorio Mable requested the petitioner’s plant manager to construct a firewall between the properties, a plea repeated several times but ignored. In the early morning of September 6, 1974, a fire of unknown origin broke out in the petitioner’s shop. Despite efforts by the shop’s employees, the fire spread and completely destroyed both the shop and the Mable residence. The National Bureau of Investigation found no evidence of inflammable substances in the debris.
Private respondents filed an action for damages against the petitioner. The trial court ruled in their favor, awarding compensation for the loss of their house and belongings, along with moral and exemplary damages and attorney’s fees. The Court of Appeals affirmed the finding of liability but reduced the monetary awards. The petitioner sought review, contesting the application of the doctrine of res ipsa loquitur, the alleged excessiveness of damages, and the non-deduction of the P35,000 insurance indemnity the respondents had received.

ISSUE

The pivotal issue is whether the doctrine of res ipsa loquitur is applicable to hold the petitioner liable for negligence, with the subsidiary issues concerning the proper computation of damages.

RULING

The Supreme Court affirmed the petitioner’s liability but modified the damages awarded. On the primary issue, the Court upheld the application of the doctrine of res ipsa loquitur. The doctrine applies where the instrumentality causing harm is under the defendant’s management, and the accident is of a kind that ordinarily does not occur in the absence of negligence. The furniture shop, containing combustible materials like wood chips, sawdust, paints, and fuels, was under the petitioner’s exclusive control. The fire’s occurrence under these circumstances provided reasonable evidence of negligence, especially absent any explanation from the petitioner.
Furthermore, the Court found independent, direct evidence of negligence. The petitioner failed to construct a required firewall as mandated by city ordinance and as repeatedly requested by the respondents. This omission directly contributed to the fire’s spread. The appellate court also noted specific negligent practices within the shop, such as storing gasoline and alcohol and allowing workers to smoke. Thus, even without the doctrine, the petitioner’s statutory and factual negligence was established.
Regarding damages, the Court applied Article 2207 of the Civil Code on subrogation. Since the private respondents had received P35,000 from their insurer for the loss, they could only recover the deficiency from the wrongdoer. Consequently, the award for the house was reduced by this amount. The Court recognized the insurer’s right to be subrogated to the respondents’ claim for that P35,000, enabling the insurer to seek reimbursement directly from the petitioner. The awards for furniture and other contents were upheld as sufficiently proven. The decision of the Court of Appeals was therefore affirmed with the modification on the deductible insurance indemnity.