G.R. No.
L-9605             September 30, 1957 Against the judgment, the defendant has prosecuted this appeal claiming that at the time of
GAUDIOSO EREZO, ET AL., plaintiff-appellee,
vs.
AGUEDO JEPTE, defendant-appellant.
Gesolgon, Matti and Custodio for appellees.
Aguedo Y. Jepte in his own behalf.
LABRADOR, J.:
Appeal from a judgment of the Court of First Instance of Manila ordering defendant to pay
plaintiff Gaudioso Erezo P3,000 on the death of Ernesto Erezo, son of plaintiff Gaudioso
Erezo.
Defendant-appellant is the registered owner of a six by six truck bearing plate No. TC-1253.
On August, 9, 1949, while the same was being driven by Rodolfo Espino y Garcia, it collided
with a taxicab at the intersection of San Andres and Dakota Streets, Manila. As the truck went
off the street, it hit Ernesto Erezo and another, and the former suffered injuries, as a result of
which he died. The driver was prosecuted for homicide through reckless negligence in
criminal case No. 10663 of the Court of First Instance of Manila. The accused pleaded guilty
and was sentenced to suffer imprisonment and to pay the heirs of Ernesto Erezo the sum of
P3,000. As the amount of the judgment could not be enforced against him, plaintiff brought
this action against the registered owner of the truck, the defendant-appellant. The
circumstances material to the case are stated by the court in its decision.
The defendant does not deny at the time of the fatal accident the cargo truck driven
by Rodolfo Espino y Garcia was registered in his name. He, however, claims that the
vehicle belonged to the Port Brokerage, of which he was the broker at the time of the
accident. He explained, and his explanation was corroborated by Policarpio Franco,
the manager of the corporation, that the trucks of the corporation were registered in
his name as a convenient arrangement so as to enable the corporation to pay the
registration fee with his backpay as a pre-war government employee. Franco,
however, admitted that the arrangement was not known to the Motor Vehicle Office.
The trial court held that as the defendant-appellant represented himself to be the owner of the
truck and the Motor Vehicle Office, relying on his representation, registered the vehicles in his
name, the Government and all persons affected by the representation had the right to rely on
his declaration of ownership and registration. It, therefore, held that the defendant-appellant is
liable because he cannot be permitted to repudiate his own declaration. (Section 68 [a], Rule
123, and Art. 1431, New Civil Code.).
WON the registered owner of the truck is liable. YES
the accident the relation of employer and employee between the driver and defendant-
appellant was not established, it having been proved at the trial that the owner of the truck
was the Port Brokerage, of which defendant-appellant was merely a broker. We find no merit
or justice in the above contention. In previous decisions, We already have held that the
registered owner of a certificate of public convenience is liable to the public for the injuries or
damages suffered by passengers or third persons caused by the operation of said vehicle,
even though the same had been transferred to a third person. (Montoya vs. Ignacio, 94 Phil.,
182, 50 Off. Gaz., 108; Roque vs. Malibay Transit Inc.,1 G. R. No. L- 8561, November
18,1955; Vda. de Medina vs. Cresencia, 99 Phil., 506, 52 Off. Gaz., [10], 4606.)The principle
upon which this doctrine is based is that in dealing with vehicles registered under the Public
Service Law, the public has the right to assume or presume that the registered owner is the
actual owner thereof, for it would be difficult for the public to enforce the actions that they may
have for injuries caused to them by the vehicles being negligently operated if the public
should be required to prove who the actual owner is. How would the public or third persons
know against whom to enforce their rights in case of subsequent transfers of the vehicles?
We do not imply by this doctrine, however, that the registered owner may not recover
whatever amount he had paid by virtue of his liability to third persons from the person to
whom he had actually sold, assigned or conveyed the vehicle.
Under the same principle the registered owner of any vehicle, even if not used for a public
service, should primarily be responsible to the public or to third persons for injuries caused
the latter while the vehicle is being driven on the highways or streets. The members of the
Court are in agreement that the defendant-appellant should be held liable to plaintiff-appellee
for the injuries occasioned to the latter because of the negligence of the driver even if the
defendant-appellant was no longer the owner of the vehicle at the time of the damage
because he had previously sold it to another. What is the legal basis for his (defendant-
appellant's) liability?.
There is a presumption that the owner of the guilty vehicle is the defendant-appellant as he is
the registered owner in the Motor Vehicle Office. Should he not be allowed to prove the truth,
that he had sold it to another and thus shift the responsibility for the injury to the real and
actual owner? The defendant holds the affirmative of this proposition; the trial court held the
negative.
The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that no vehicle may be
used or operated upon any public highway unless the same is properly registered. It has
been stated that the system of licensing and the requirement that each machine must carry a
registration number, conspicuously displayed, is one of the precautions taken to reduce the
danger of injury to pedestrians and other travelers from the careless management of
automobiles, and to furnish a means of ascertaining the identity of persons violating the laws
and ordinances, regulating the speed and operation of machines upon the highways (2 R. C.
L. 1176). Not only are vehicles to be registered and that no motor vehicles are to be used or
operated without being properly registered for the current year, but that dealers in motor
vehicles shall furnish the Motor Vehicles Office a report showing the name and address of
each purchaser of motor vehicle during the previous month and the manufacturer's serial law is to be enforced and carried out, the registered owner should be allowed to prove the
number and motor number. (Section 5 [c], Act. No. 3992, as amended.). contrary to the prejudice of the person injured that is, to prove that a third person or another
has become the owner, so that he may thereby be relieved of the responsibility to the injured
Registration is required not to make said registration the operative act by which ownership in person.1âwphïl.nêt
vehicles is transferred, as in land registration cases, because the administrative proceeding
of registration does not bear any essential relation to the contract of sale between the parties The above policy and application of the law may appear quite harsh and would seem to
(Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the conflict with truth and justice. We do not think it is so. A registered owner who has already
vehicle upon any public highway (section 5 [a], Act No. 3992, as amended).The main aim of sold or transferred a vehicle has the recourse to a third-party complaint, in the same action
motor vehicle registration is to identify the owner so that if any accident happens, or that any brought against him to recover for the damage or injury done, against the vendee or
damage or injury is caused by the vehicles on the public highways, responsibility therefore transferee of the vehicle. The inconvenience of the suit is no justification for relieving him of
can be fixed on a definite individual, the registered owner. Instances are numerous where liability; said inconvenience is the price he pays for failure to comply with the registration that
vehicles running on public highways caused accidents or injuries to pedestrians or other the law demands and requires.
vehicles without positive identification of the owner or drivers, or with very scant means of
identification. It is to forestall those circumstances, so inconvenient or prejudicial to the public, In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily
that the motor vehicle registration is primarily ordained, in the interest of the determination of responsible for the damage caused to the vehicle of the plaintiff-appellee, but he (defendant-
persons responsible for damages or injuries caused on public highways. appellant) has a right to be indemnified by the real or actual owner of the amount that he may
be required to pay as damage for the injury caused to the plaintiff-appellant.1âwphïl.nêt
One of the principal purposes of motor vehicles legislation is identification of the
vehicle and of the operator, in case of accident; and another is that the knowledge G.R. No. L-17459             September 29, 1962
that means of detection are always available may act as a deterrent from lax
observance of the law and of the rules of conservative and safe operation. Whatever DIWATA VARGAS, petitioner,
purpose there may be in these statutes, it is subordinate at the last to the primary vs.
purpose of rendering it certain that the violator of the law or of the rules of safety shall SALVADOR LANGCAY, CORAZON LANGCAY, HELEN LANGCAY and JOSE
not escape because of lack of means to discover him." The purpose of the statute is AGUAS, respondents.
thwarted, and the displayed number becomes a "snare and delusion," if courts will
entertain such defenses as that put forward by appellee in this case. No responsible
person or corporation could be held liable for the most outrageous acts of negligence, Mary Concepcion for petitioner.
if they should be allowed to place a "middleman" between them and the public, and Jose R. Abalos and A. M. Ronquillo for respondents.
escape liability by the manner in which they recompense their servants. (King vs.
Brenham Automobile Co., 145 S. W. 278,279.)

With the above policy in mind, the question that defendant-appellant poses is: should not be
registered owner be allowed at the trial to prove who the actual and real owner is, and in LABRADOR, J.:
accordance with such proof escape or evade responsibility and lay the same on the person
actually owning the vehicle? We hold with the trial court that the laws does not allow him to This is a petition for review of the decision of the Court of Appeals finding petitioner
do so; the law, with its aim and policy in mind, does not relieve him directly of the subsidiarily liable for damages under article 103 of the Revised Penal Code.
responsibility that the law fixes and places upon him as an incident or consequence of
registration. Were a registered owner allowed to evade responsibility by proving who the
At about 8:00 o'clock in the morning of June 5, 1955, at Rizal Avenue, Manila, Corazon and
supposed transferee or owner is, it would be easy for him, by collusion with others or
Helen Langcay, sisters, were hit and injured by a jeepney bearing plate No. AC-4859-Quezon
otherwise, to escape said responsibility and transfer the same to an indefinite person, or to
City-1955, then driven by Ramon B. Aguas. Criminally charged with physical injuries, the said
one who possesses no property with which to respond financially for the damage or injury
Ramon B. Aguas was finally sentenced by the Court of Appeals, in CA-G.R. No. 17900-R, to
done. A victim of recklessness on the public highways is usually without means to discover or
3 months and 6 days of arresto mayor for serious and slight physical injuries through reckless
identify the person actually causing the injury or damage. He has no means other than by a
imprudence, caused to Corazon and Helen Langcay, "without pronouncement with respect to
recourse to the registration in the Motor Vehicles Office to determine who is the owner. The
the indemnity due to the aggrieved parties, because the action therefor had been reserved."
protection that the law aims to extend to him would become illusory were the registered
owner given the opportunity to escape liability by disproving his ownership. If the policy of the
Since the records of the Public Service Commission and the Motor Vehicles Office showed
that Diwata Vargas was, at the time of the accident, the owner and operator of the jeepney in
question, the parents of Corazon and Helen sued Diwata Vargas and the driver for damages.
In spite of the defense of appellant Diwata Vargas that prior to the accident, precisely on
August 17, 1953, she had sold the vehicle to Jose B. Aguas (father of the driver), so that at
the time of the accident she was no longer the owner of the jeepney, and that, further, Public
Service Commission, on October 27, 1953, cancelled the certificate of public convenience
issued in her name, the defendants Diwata Vargas and Ramon B. Aguas were jointly and
severally sentenced to pay damages and attorneys fees by the Court of First Instance of
Manila. Diwata Vargas appealed to the Court of Appeals which affirmed, with modifications,
the lower court's decision.
Pertinent parts of the Appeals Court decision are hereby reproduced for a clearer
understanding of the issue involved in this appeal:
The order of cancellation and revocation of appellant certificate of public
convenience, dated October 27, 1953 (Exh. 4-D) does not relieve her of the liability
established by above quoted legal provisions as clearly and positively construed by
the highest tribunal of the land. This order was issued motu propio by the
Commission in view of appellant failure to pay the P15.00 supervision and regulation
fee and its 50% surcharge, and not for the purpose of transferring the same
certificate to Jose B. Aguas. A copy of the above mentioned order was furnished
appellant, so that she cannot profess ignorance of what she termed the "anomalous
operation" of the jeepney she sold to Jose B. Aguas without the required
authorization or approval of the Public Service Commission. Appellant's failure to
stop the operation of the vehicle in question and to surrender to the Motor Vehicles
Office the corresponding plates, as ordered by exhibit 4-D, Vargas constitutes a
violation of the Revised Motor Vehicle Law and Commonwealth No. 146, which
violation makes her liability and responsibility clearer and more inescapable.
xxx     xxx     xxx
. . . Appellant's liability stems from and is a form of punishment for her failure to
comply with section 20 (g) of Commonwealth Act 146 and with 5 of Act 3992. . . .
xxx     xxx     xxx
There is no question that appellees Corazon and Helen Langcay were not
passengers of the jeepney, the reckless operation of which resulted in their injuries.
Therefore, the direct and immediate liability of a common carrier as provided for by
the Civil Code cannot be ascribed to appellant. Accordingly, her liability should be
based on article 103 of the Revised Penal Code. . . . Therefore, appellant's
responsibility is mere subsidiary, pursuant to the above cited article of the Revised
Penal Code.
xxx     xxx     xxx
. . . the judgment appealed from is hereby modified in the sense that should
defendant Ramon B. Aguas be found insolvent, appellant should pay appellees the
sum of P953.00 as compensatory damages, P4,000.00 and P500.00 as moral
damages suffered by Corazon and Helen Langcay, respectively, and P2,000.00 for
attorney's fees. It is also ordered that this case be returned to the court of origin not
only for the execution of this decision once it becomes final, but also for further
proceedings against Jose B. Aguas, after proper summons, in the third party
complaint above mentioned. Without special pronouncement as to the payment of the
costs.
Appellant-petitioner Diwata Vargas brought the case to this Court on a question of law,
alleging that she cannot be held liable under Art. 103 of the Revised Penal Code for whatever
violation or offense she may have committed under the Public Service Law and the Motor
Vehicle Law and in the absence of a showing that she employed the person (driver) who
caused the damage, and that she was engaged in an industry or a business, and where the
evidence prove that the father (Jose B. Aguas ) of the person primarily liable (Ramon Aguas)
is his actual employer.
We hold that the Court of Appeals erred in considering appellant-petitioner Diwata Vargas
only subsidiarily liable under Article 103 of the Revised Penal Code. This Court, in previous
decisions, has always considered the registered owner/operator of a passenger vehicle,
jointly and severally liable with the driver for damages incurred by passengers or third
persons as a consequence of injuries (or death) sustained in the operation of said vehicles.
(Montoya vs. Ignacio, G.R. No. L-5868, Dec. 29, 1953; Timbol vs. Osias, G.R. No. L-7547,
April 30, 1955; Vda. de Medina vs. Cresencia, G.R. No. L-8194, July 11, 1956; Necesito vs.
Paras, G.R. No. L-10605, June 30, 1955; Erezo vs. Jepte, G.R. No.
L-9605, Sept. 30, 1957; Tamayo vs. Aquino, G.R. No. L-12634, May 29, 1959; Rayos vs.
Tamayo, G.R. No. L-12720, May 29, 1959.) In the case of Erezo vs. Jepte, supra We held:
. . . In synthesis, we hold that the registered owner, the defendant-appellant herein,
is primarily responsible for the damages caused . . . (Emphasis ours)
In the case of Tamayo vs. Aquino, supra We said:
. . . As Tamayo is the registered owner of the truck, his responsibility to the public or
to any passenger riding in the vehicle or truck must be direct . . . (Emphasis
ours)1awphîl.nèt
Petitioner argues that there was no showing that she employed the person (the driver) who
caused the injuries. On the contrary, she argues, the evidence show that J B. Aguas, the
father of the driver, is his actual employer. We believe that it is immaterial whether or not the
driver was actually employed by the operator of record. is even not necessary to prove who
the actual owner of the vehicle and the employer of the driver is. Granting that, in this case,
the father of the driver is the act owner and that he is the actual employer, following well-
settled principle that the operator of record continues to be the operator of the vehicle in
contemplation of law, as regards the public and third persons, and such is responsible for the
consequences incident to its operation, we must hold and consider such owner-operation of
record as the employer, in contemplation of law, the driver. And, to give effect to this policy of
law enunciated in the above-cited decisions of this Court, must now extend the same and
consider the actual operation and employer as the agent of the operator of record. In the case
of Tamayo vs. Aquino, supra, this Court said:
. . . In operating the truck without transfer thereof having been approved by the Public
Service Commission, the transferee acted merely as agent of the registered
owner. . . (Emphasis our)
The purpose of the principles evolved by the decision in these matters will be defeated and
thwarted if we entertain the argument of petitioner that she is not liable because the actual
owner and employer was establish by the evidence. In the case of Erezo vs. Jepte, supra, the
Court said:
. . . With the above policy in mind, the question that defendant-appellant poses is:
Should not the registered owner allowed at the trial to prove who the actual and real
owner is, and in accordance with such proof escape or evade responsibility and lay
the same on the person actually owning the vehicle? NO
We hold with the trial court that the law does not allow him to do so; the law, with its
aim and policy in mind, does not relieve him directly of the responsibility that the law
fixes and places upon him as an incident or consequence of registration. Were a
registered owner allowed to evade responsibility by proving who the supposed
transferee or owner is, it would be easy for him by collusion with others or otherwise,
to escape said responsibility and transfer the same to an indefinite person, or to one
who possesses no property with which to respond financially for the damage or injury
done. A victim of recklessness on the public highways is without means to discover
or identify the person actually causing the injury or damage. He has no means other
than by a recourse to the registration in the Motor Vehicles Office to determine who is
the owner. The protection that the law aims to extend to him would become illusory
were the registered owner given the opportunity to escape liability by disproving his
ownership. If the policy of the law is to be enforced and carried out, the registered
owner should not be allowed to prove the contrary to the prejudice of the person
injured; that is, to prove that a third person or another has become the owner, so that
he may thereby be relieved of the responsibility to the injured person.
For the foregoing considerations, we hold that Article 103 is not the law applicable in this
case; the petitioner stands liable, however, on the basis of the settled principle that as the
registered owner, she is directly and primarily responsible and liable for damages sustained
by passengers or third persons as a consequence of the negligent or careless operation of
the vehicle registered in her name. Petitioner does not question the amounts of damages
granted to respondents by the Court of Appeals and the same not appearing to be excessive
or unconscionable, they should be maintained.
WHEREFORE, the decision of the Court of Appeals is hereby modified, as above indicated.
With costs.
G.R. No. 82318 May 18, 1989
GILBERTO M. DUAVIT, petitioner,
vs.
THE HON. COURT OF APPEALS, Acting through the Third Division, as Public
Respondent, and ANTONIO SARMIENTO, SR. & VIRGILIO CATUAR respondents.
Rodolfo d. Dela Cruz for petitioner.
Bito, Lozada, Ortega & Castillo for respondents.
GUTIERREZ, JR., J.:
This petition raises the sole issue of whether or not the owner of a private vehicle which
figured in an accident can be held liable under Article 2180 of the Civil Code when the said
vehicle was neither driven by an employee of the owner nor taken with the consent of the
latter.
The facts are summarized in the contested decision, as follows:
From the evidence adduced by the plaintiffs, consisting of the testimonies of
witnesses Virgilio Catuar, Antonio Sarmiento, Jr., Ruperto Catuar, Jr. and
Norberto Bernarte it appears that on July 28, 1971 plaintiffs Antonio
Sarmiento, Sr. and Virgilio Catuar were aboard a jeep with plate number 77-
99-F-I Manila, 1971, owned by plaintiff, Ruperto Catuar was driving the said
jeep on Ortigas Avenue, San Juan, Rizal; that plaintiff's jeep, at the time, was
running moderately at 20 to 35 kilometers per hour and while approaching
Roosevelt Avenue, Virgilio Catuar slowed down; that suddenly, another jeep
with plate number 99-97-F-J Manila 1971 driven by defendant Oscar
Sabiniano hit and bumped plaintiff's jeep on the portion near the left rear
wheel, and as a result of the impact plaintiff's jeep fell on its right and skidded
by about 30 yards; that as a result plaintiffs jeep was damaged, particularly
the windshield, the differential, the part near the left rear wheel and the top
cover of the jeep; that plaintiff Virgilio Catuar was thrown to the middle of the
road; his wrist was broken and he sustained contusions on the head; that
likewise plaintiff Antonio Sarmiento, Sr. was trapped inside the fallen jeep,
and one of his legs was fractured.
Evidence also shows that the plaintiff Virgilio Catuar spent a total of
P2,464.00 for repairs of the jeep, as shown by the receipts of payment of
labor and spare parts (Exhs. H to H-7 Plaintiffs likewise tried to prove that
plaintiff Virgilio Catuar, immediately after the accident was taken to
Immaculate Concepcion Hospital, and then was transferred to the National
Orthopedic Hospital; that while plaintiff Catuar was not confined in the
hospital, his wrist was in a plaster cast for a period of one month, and the
contusions on his head were under treatment for about two (2) weeks; that
for hospitalization, medicine and allied expenses, plaintiff Catuar spent
P5,000.00.
Evidence also shows that as a result of the incident, plaintiff Antonio
Sarmiento, Sr. sustained injuries on his leg; that at first, he was taken to the
National Orthopedic Hospital (Exh. K but later he was confined at the Makati
Medical Center from July 29, to August 29, 1971 and then from September
15 to 25, 1971; that his leg was in a plaster cast for a period of eight (8)
months; and that for hospitalization and medical attendance, plaintiff Antonio
Sarmiento, Sr. spent no less than P13,785.25 as evidenced by receipts in his
possession. (Exhs. N to N-1).
Proofs were adduced also to show that plaintiff Antonio sarmiento Sr. is
employed as Assistant Accountant of the Canlubang Sugar Estate with a
salary of P1,200.00 a month; that as sideline he also works as accountant of
United Haulers Inc. with a salary of P500.00 a month; and that as a result of
this incident, plaintiff Sarmiento was unable to perform his normal work for a
period of at least 8 months. On the other hand, evidence shows that the other
plaintiff Virgilio Catuar is a Chief Clerk in Canlubang Sugar Estate with a
salary of P500.00 a month, and as a result of the incident, he was
incapacitated to work for a period of one (1) month.
The plaintiffs have filed this case both against Oscar Sabiniano as driver, and
against Gualberto Duavit as owner of the jeep.
Defendant Gualberto Duavit, while admitting ownership of the other jeep
(Plate No. 99-07-F-J Manila, 1971), denied that the other defendant (Oscar
Sabiniano) was his employee. Duavit claimed that he has not been an
employer of defendant Oscar Sabiniano at any time up to the present.
On the other hand documentary and testimonial evidence show that
defendant Oscar Sabiniano was an employee of the Board of Liquidators
from November 14, 1966 up to January 4, 1973 (Annex A of Answer).
Defendant OSCAR, in his testimony, categorically admitted that he took the
jeep from the garage of defendant Duavit without the consent or authority of
the latter (TSN, September 7, 1978, p. 8). He testified further, that Duavit
even filed charges against him for theft of the jeep, but which Duavit did not
push through as his (Sabiniano's) parents apologized to Duavit on his behalf.
Defendant Oscar Sabiniano, on the other hand in an attempt to exculpate
himself from liability, makes it appear that he was taking all necessary
precaution while driving and the accident occurred due to the negligence of
Virgilio Catuar. Sabiniano claims that it was plaintiffs vehicle which hit and
bumped their jeep. (Reno, pp. 21-23)
The trial court found Oscar Sabiniano negligent in driving the vehicle but found no employer-
employee relationship between him and the petitioner because the latter was then a
government employee and he took the vehicle without the authority and consent of the
owner. The petitioner was, thus, absolved from liability under Article 2180 of the Civil Code.
The private respondents appealed the case.
On January 7, 1988, the Court of Appeals rendered the questioned decision holding the
petitioner jointly and severally liable with Sabiniano. The appellate court in part ruled:
We cannot go along with appellee's argument. It will be seen that in Vargas
v. Langcay, supra, it was held that it is immaterial whether or not the driver
was actually employed by the operator of record or registered owner, and it is
even not necessary to prove who the actual owner of the vehicle and who the
employer of the driver is. When the Supreme Court ruled, thus: 'We must
hold and consider such owner-operator of record (registered owner) as the
employer in contemplation of law, of the driver,' it cannot be construed other
than that the registered owner is the employer of the driver in contemplation
of law. It is a conclusive presumption of fact and law, and is not subject to
rebuttal of proof to the contrary. Otherwise, as stated in the decision, we
quote:
The purpose of the principles evolved by the decisions in these matters will
be defeated and thwarted if we entertain the argument of petitioner that she
is not liable because the actual owner and employer was established by the
evidence. . . .
Along the same vein, the defendant-appellee Gualberto Duavit cannot be allowed to prove
that the driver Sabiniano was not his employee at the time of the vehicular accident.
The ruling laid down in Amar V. Soberano (1966), 63 O.G. 6850, by this
Court to the effect that the burden of proving the non-existence of an
employer-employee relationship is upon the defendant and this he must do
 by a satisfactory preponderance of evidence, has to defer to the doctrines
evolved by the Supreme Court in cases of damages arising from vehicular
mishaps involving registered motor vehicle. (See Tugade v. Court of Appeals,
85 SCRA 226, 230). (Rollo, pp. 26-27)
The appellate court also denied the petitioner's motion for reconsideration. Hence, this
petition.
The petitioner contends that the respondent appellate court committed grave abuse of
discretion in holding him jointly and severally liable with Sabiniano in spite of the absence of
an employer-employee relationship between them and despite the fact that the petitioner's
jeep was taken out of his garage and was driven by Sabiniano without his consent.
As early as in 1939, we have ruled that an owner of a vehicle cannot be held liable for an
accident involving the said vehicle if the same was driven without his consent or knowledge
and by a person not employed by him. Thus, in Duquillo v. Bayot (67 Phil. 131-133-134)
[1939] we said:
Under the facts established, the defendant cannot be held liable for anything.
At the time of the accident, James McGurk was driving the truck, and he was
not an employee of the defendant, nor did he have anything to do with the
latter's business; neither the defendant nor Father Ayson, who was in charge
of her business, consented to have any of her trucks driven on the day of the
accident, as it was a holy day, and much less by a chauffeur who was not in
charge of driving it; the use of the defendant's truck in the circumstances
indicated was done without her consent or knowledge; it may, therefore, be
said, that there was not the remotest contractual relation between the
deceased Pio Duquillo and the defendant. It necessarily follows from all this
that articles 1101 and following of the Civil Code, cited by the appellant, have
no application in this case, and, therefore, the errors attributed to the inferior
court are without basis.
The Court upholds the above ruling as still relevant and better applicable to present day
circumstances.
The respondent court's misplaced reliance on the cases of Erezo v. Jepte (102 Phil. 103
[1957] and Vargas v. Langcay (6 SCRA 174 [1962]) cannot be sustained. In the Erezo case,
Jepte, the registered owner of the truck which collided with a taxicab, and which resulted in
the killing of Erezo, claimed that at the time of the accident, the truck belonged to the Port
Brokerage in an arrangement with the corporation but the same was not known to the Motor
Vehicles Office. This Court sustained the trial court's ruling that since Jepte represented
himself to be the owner of the truck and the Motor Vehicles Office, relying on his
representation, registered the vehicle in his name, the Government and all persons affected
by the representation had the right to rely on his declaration of ownership and registration.
Thus, even if Jepte were not the owner of the truck at the time of the accident, he was still
held liable for the death of Erezo significantly, the driver of the truck was fully authorized to
drive it.
Likewise, in the Vargas case, just before the accident occurred Vargas had sold her jeepney
to a third person, so that at the time of the accident she was no longer the owner of the
jeepney. This court, nevertheless, affirmed Vargas' liability since she failed to surrender to the
Motor Vehicles Office the corresponding AC plates in violation of the Revised Motor Vehicle
Law and Commonwealth Act No. 146. We further ruled that the operator of record continues
to be the operator of the vehicle in contemplation of law, as regards the public and third
persons, and as such is responsible for the consequences incident to its operator. The
vehicle involved was a public utility jeepney for hire. In such cases, the law does not only
require the surrender of the AC plates but orders the vendor operator to stop the operation of
the jeepney as a form of public transportation until the matter is reported to the authorities.
WON Gualberto is liable (owner). NO
As can be seen, the circumstances of the above cases are entirely different from those in the
present case. Herein petitioner does not deny ownership of the vehicle involved in tire mishap
but completely denies having employed the driver Sabiniano or even having authorized the
latter to drive his jeep. The jeep was virtually stolen from the petitioner's garage. To hold,
therefore, the petitioner liable for the accident caused by the negligence of Sabiniano who
was neither his driver nor employee would be absurd as it would be like holding liable the
owner of a stolen vehicle for an accident caused by the person who stole such vehicle. In this
regard, we cannot ignore the many cases of vehicles forcibly taken from their owners at
gunpoint or stolen from garages and parking areas and the instances of service station
attendants or mechanics of auto repair shops using, without the owner's consent, vehicles
entrusted to them for servicing or repair.
We cannot blindly apply absolute rules based on precedents whose facts do not jibe four
square with pending cases. Every case must be determined on its own peculiar factual
circumstances. Where, as in this case, the records of the petition fail to indicate the slightest
indicia of an employer-employee relationship between the owner and the erring driver or any
consent given by the owner for the vehicle's use, we cannot hold the owner liable.
We, therefore, find that the respondent appellate court committed reversible error in holding
the petitioner jointly and severally liable with Sabiniano to the private respondent.
WHEREFORE, the petition is GRANTED and the decision and resolution appealed from are
hereby ANNULLED and SET ASIDE. The decision of the then Court of First Instance (now
Regional Trial Court) of Laguna, 8th Judicial District, Branch 6, dated July 30, 1981 is
REINSTATED.
SO ORDERED.
[G.R. No. 98275. November 13, 1992.]
BA FINANCE CORPORATION, Petitioner, v. HON. COURT OF APPEALS, REGIONAL
TRIAL COURT OF ANGELES CITY, BRANCH LVI, CARLOS OCAMPO, INOCENCIO
TURLA, SPOUSES MOISES AGAPITO AND SOCORRO M. AGAPITO AND NICOLAS
CRUZ, Respondents.
Agbayani, Leal, Ebarle and Venturanza for Petitioner.
Ocampo, Sicat, Ayson, Pangilinan & Associates Law Office for Private Respondent.
SYLLABUS
1. COMMERCIAL LAW; LAND TRANSPORTATION AND TRAFFIC CODE; REGISTRATION
OF MOTOR VEHICLES; PRINCIPAL PURPOSES; REGISTERED OWNER PRIMARILY
RESPONSIBLE TO THIRD PERSONS FOR INJURIES AND DAMAGES CAUSED BY
OPERATION OF MOTOR VEHICLE SOLD OR LEASED TO ANOTHER; REASON
THEREFOR; RECOURSE AVAILABLE TO REGISTERED OWNER; CASE AT BAR. —
Petitioner asseverates that it should not have been haled to court and ordered to respond for
the damage in the manner arrived at by both the trial and appellate courts since paragraph 5
of the complaint lodged by the plaintiffs below would indicate that petitioner was not the
employer of the negligent driver who was under the control and supervision of Lino Castro at
the time of the accident, apart from the fact that the Isuzu truck was in the physical
possession of Rock Component Philippines by virtue of the lease agreement. Aside from
casting clouds of doubt on the propriety of invoking the Perez and Erezo doctrines, petitioner
continues to persist with the idea that the pronouncements of this Court in Duavit v. Court of
Appeals (173 SCRA 490 [1989]) and Duquillo v. Bayot (67 Phil 131 [1939]) dovetail with the
factual and legal scenario of the case at hand. Furthermore, petitioner assumes, given the so-
called hiatus on the basis for the award of damages as decreed by the lower and appellate
courts, that Article 2180 of the new Civil Code on vicarious liability will divest petitioner of any
responsibility absent as there is any employer-employee relationship between petitioner and
the driver. Contrary to petitioner’s expectations, the recourse instituted from the rebuffs it
encountered may not constitute a sufficient foundation for reversal of the impugned judgment
of respondent court. Petitioner is of the impression that the Perez and Erezo cases are
inapplicable due to the variance of the generative facts in said cases as against those
obtaining in the controversy at bar. A contrario, the lesson imparted by Justice Labrador in
Erezo is still good law, thus: ". . . In previous decisions, We already have held that the
registered owner of a certificate of public convenience is liable to the public for the injuries or
damages suffered by passengers or third persons caused by the operation of said vehicle,
even though the same had been transferred to a third person. (Montoya v. Ignacio, 94 Phil.,
182, 50 Off. Gaz., 108; Roque v. Malibay Transit, Inc., G.R. No. L-8561, November 18, 1955;
Vda. de Medina v. Cresencia, 99 Phil., 506, 52 Off. Gaz., [10], 4606.) The principle upon
which this doctrine is based is that in dealing with vehicles registered under the Public
Service Law, the public has the right to assume or presume that the registered owner is the
actual owner thereof, for it would be difficult for the public to enforce the actions that they may
have for injuries caused to them by the vehicles being negligently operated if the public
should be required to prove who the actual owner is. How would the public or third persons
know against whom to enforce their rights in case of subsequent transfers of the vehicles?
We do not imply by this doctrine, however, that the registered owner may not recover
whatever amount he had paid by virtue of his liability to third persons from the person to
whom he had actually sold, assigned or conveyed the vehicle. "Under the same principle the
registered owner of any vehicle, even if not used for a public service, should primarily be
responsible to the public or to third persons for injuries caused the latter while the vehicle is
being driven on the highways or streets. The members of the Court are in agreement that the
defendant-appellant should be held liable to plaintiff-appellee for the injuries occasioned to
the latter because of the negligence of the driver, even if the defendant-appellant was no
longer the owner of the vehicle at the time of the damage because he had previously sold it to
another. What is the legal basis for his (defendant-appellant’s) liability? "There is a
presumption that the owner of the guilty vehicle is the defendant-appellant as he is the
registered owner in the Motor Vehicles Office. Should he not be allowed to prove the truth,
that he had sold it to another and thus shift the responsibility for the injury to the real and
actual owner? The defendant holds the affirmative of this proposition, the trial court held the
negative. "The Revised Motor Vehicles Law (Act No. 3992, as amended) provides that no
vehicle may be used or operated upon any public highway unless the same is properly
registered. It has been stated that the system of licensing and the requirement that each
machine must carry a registration number, conspicuously displayed, is one of the precautions
taken to reduce the danger of injury to pedestrians and other travellers from the careless
management of automobiles, and to furnish a means of ascertaining the identity of persons
violating the laws and ordinances, regulating the speed and operation of machines upon the
highways (2 R. C. L. 1176). Not only are vehicles to be registered and that no motor vehicles
are to be used or operated without being properly registered for the current year, but that
dealers in motor vehicles shall furnish the Motor Vehicles Office a report showing the name
and address of each purchaser of motor vehicle during the previous month and the
manufacturer’s serial number and motor number. (Section 5[c], Act No. 3992, as amended.).
"Registration is required not to make said registration the operative act by which ownership in
vehicles is transferred, as in land registration cases, because the administrative proceeding
of registration does not bear any essential relation to the contract of sale between the parties
(Chinchilla v. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the
vehicle upon any public highway (section 5 [a], Act No. 3992, as amended). The main aim of
motor vehicle registration is to identify the owner so that if any accident happens, or that any
damage or injury is caused by the vehicle on the public highways, responsibility therefor can
be fixed on a definite individual, the registered owner. Instances are numerous where
vehicles running on public highways caused accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or with very scant means of
identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public,
that the motor vehicle registration is primarily ordained, in the interest of the determination of
persons responsible for damages or injuries caused on public highways.’One of the principal
purposes of motor vehicles legislation is identification of the vehicle and of the operator, in
case of accident; and another is that the knowledge that means of detection are always
available may act as a deterrent from lax observance of the law and of the rules of
conservative and safe operation. Whatever purpose there may be in these statutes, it is Petitioner’s reliance on the rulings of this Court in Duavit v. Court of Appeals and in Duquillo
subordinate at the last to the primary purpose of rendering it certain that the violator of the v. Bayot (supra) is legally unpalatable for the purpose of the present discourse. The vehicles
law or of the rules of safety shall not escape because of lack of means to discover him.’ The adverted to in the two cases shared a common thread, so to speak, in that the jeep and the
purpose of the statute is thwarted, and the displayed number becomes a ‘snare and truck were driven in reckless fashion without the consent or knowledge of the respective
delusion,’ if courts would entertain such defenses as that put forward by appellee in this case. owners. Cognizant of the inculpatory testimony spewed by defendant Sabiniano when he
No responsible person or corporation could be held liable for the most outrageous acts of admitted that he took the jeep from the garage of defendant Duavit without the consent or
negligence, if they should be allowed to pace a "middleman" between them and the public, authority of the latter, Justice Gutierrez, Jr. in Duavit remarked: ". . . Herein petitioner does
and escape liability by the manner in which they recompense their servants.’ (King v. not deny ownership of the vehicle involved in the mishap but completely denies having
Brenham Automobile Co., Inc. 145 S. W. 278, 279.). "With the above policy in mind, the employed the driver Sabiniano or even having authorized the latter to drive his jeep. The jeep
question that defendant-appellant poses is: should not the registered owner be allowed at the was virtually stolen from the petitioner’s garage. To hold, therefore, the petitioner liable for the
trial to prove who the actual and real owner is, and in accordance with such proof escape or accident caused by the negligence of Sabiniano who was neither his driver nor employee
evade responsibility and lay the same on the person actually owning the vehicle? We hold would be absurd as it would be like holding liable the owner of a stolen vehicle for an accident
with the trial court that the law does not allow him to do so; the law, with its aim and policy in caused by the person who stole such vehicle. In this regard, we cannot ignore the many
mind, does not relieve him directly of the responsibility that the law fixes and places upon him cases of vehicles forcibly taken from their owners at gunpoint or stolen from garages and
as an incident or consequence of registration. Were a registered owner allowed to evade parking areas and the instances of service station attendants or mechanics of auto repair
responsibility by proving who the supposed transferee or owner is, it would be easy for him, shops using, without the owner’s consent, vehicles entrusted to them for servicing or repair."
by collusion with others or otherwise, to escape said responsibility and transfer the same to In the Duquillo case, the defendant therein cannot, according to Justice Diaz, be held liable
an indefinite person, or to one who possesses no property with which to respond financially for anything because of circumstances which indicated that the truck was driven without the
for the damage or injury done. A victim of recklessness on the public highways is usually consent or knowledge of the owner thereof.
without means to discover or identify the person actually causing the injury or damage. He
has no means other than by a recourse to the registration in the Motor Vehicles Office to
determine who is the owner. The protection that the law aims to extend to him would become
illusory were the registered owner given the opportunity to escape liability by disproving his DECISION
ownership. If the policy of the law is to be enforced and carried out, the registered owner
should not be allowed to prove the contrary to the prejudice of the person injured, that is, to
prove that a third person or another has become the owner, so that he may thereby be MELO, J.:
relieved of the responsibility to the injured person. "The above policy and application of the
law may appear quite harsh and would seem to conflict with truth and justice. We do not think
it is so. A registered owner who has already sold or transferred a vehicle has the recourse to The question of petitioner’s responsibility for damages when on March 6, 1983, an accident
a third-party complaint, in the same action brought against him to recover for the damage or occurred involving petitioner’s Isuzu ten-wheeler truck then driven by an employee of Lino
injury done, against the vendee or transferee of the vehicle. The inconvenience of the suit is Castro is the thrust of the petition for review on certiorari now before Us considering that
no justification for relieving him of liability; said inconvenience is the price he pays for failure neither the driver nor Lino Castro appears to be connected with petitioner.
to comply with the registration that the law demands and requires. "In synthesis, we hold that
the registered owner, the defendant-appellant herein, is primarily responsible for the damage On October 13, 1988, the disputed decision in the suit below was rendered by the court of
caused to the vehicle of the plaintiff-appellee, but he (defendant-appellant) has a right to be origin in this manner:chanrobles law library
indemnified by the real or actual owner of the amount that he may be required to pay as
damage for the injury caused to the plaintiff-appellant." If the foregoing words of wisdom were "1. Ordering Rock, B.A. and Rogelio Villar y Amare jointly and severally to pay the plaintiffs as
applied in solving the circumstance whereof the vehicle had been alienated or sold to follow:chanrob1es virtual 1aw library
another, there certainly can be no serious exception against utilizing the same rationale to the
antecedents of this case where the subject vehicle was merely leased by petitioner to Rock a) To the plaintiff Carlos Ocampo — P121,650.00;
Component Philippines, Inc., with petitioner retaining ownership over the vehicle.
b) to the plaintiff Moises Ocampo — P298,500.00
2. CIVIL LAW; QUASI-DELICTS; LIABILITY OF THE EMPLOYERS FOR DAMAGES
CAUSED BY THEIR EMPLOYEES ACTING WITHIN THE SCOPE OF ASSIGNED TASKS; c) To the plaintiff Nicolas Cruz — P154,740.00
DOCTRINE ENUNCIATED IN DUAVIT VS. COURT OF APPEALS (173 SCRA 490 [1989])
And DUQUILLO VS. BAYOT (67 PHIL. 131 [1939] NOT APPLICABLE TO CASE AT BAR. — d) To the plaintiff Inocencio Turla, Sr. — 48,000.00.
 Aside from casting clouds of doubt on the propriety of invoking the Perez and Erezo
2. Dismissing the case against Lino Castro doctrines, petitioner continues to persist with the idea that the pronouncements of this Court
in Duavit v. Court of Appeals (173 SCRA 490 [1989]) and Duquillo v. Bayot (67 Phil 131
3. Dismissing the third-party complaint against STRONGHOLD [1939]) dovetail with the factual and legal scenario of the case at hand. Furthermore,
petitioner assumes, given the so-called hiatus on the basis for the award of damages as
4. Dismissing all the counterclaims of the defendants and third party defendants. decreed by the lower and appellate courts, that Article 2180 of the new Civil Code on
vicarious liability will divest petitioner of any responsibility absent as there is any employer-
5. Ordering ROCK to reimburse B.A. the total amount of P622,890.00 which the latter is employee relationship between petitioner and the driver.
adjudged to pay to the plaintiffs." (p. 46, Rollo)chanrobles.com : virtual law library
Contrary to petitioner’s expectations, the recourse instituted from the rebuffs it encountered
Respondent Court of Appeals affirmed the appealed disposition in toto through Justice Rasul, may not constitute a sufficient foundation for reversal of the impugned judgment of
with Justices De Pano, Jr. and Imperial concurring, on practically the same grounds arrived at respondent court. Petitioner is of the impression that the Perez and Erezo cases are
by the court a quo (p. 28, Rollo). Efforts exerted towards re-evaluation of the adverse inapplicable due to the variance of the generative facts in said cases as against those
judgment were futile (p. 37, Rollo). Hence, the instant petition. obtaining in the controversy at bar. A contrario, the lesson imparted by Justice Labrador in
Erezo is still good law, thus:jgc:chanrobles.com.ph
The lower court ascertained after due trial that Rogelio Villar y Amare, the driver of the Isuzu
truck, was at fault when the mishap occurred in as much as he was found guilty beyond ". . . In previous decisions, We already have held that the registered owner of a certificate of
reasonable doubt of reckless imprudence resulting in triple homicide with multiple physical public convenience is liable to the public for the injuries or damages suffered by passengers
injuries with damage to property in a decision rendered on February 16, 1984 by the or third persons caused by the operation of said vehicle, even though the same had been
Presiding Judge of Branch 6 of the Regional Trial Court stationed at Malolos, Bulacan. transferred to a third person. (Montoya v. Ignacio, 94 Phil., 182, 50 Off. Gaz., 108; Roque v.
Petitioner was adjudged liable far damages in as much as the truck was registered in its Malibay Transit, Inc., G.R. No. L-8561, November 18, 1955; Vda. de Medina v. Cresencia, 99
name during the incident in question, following the doctrines laid down by this Court in Perez Phil., 506, 52 Off. Gaz., [10], 4606.) The principle upon which this doctrine is based is that in
v. Gutierrez (53 SCRA 149 [1973]) and Erezo, Et. Al. v. Jepte (102 Phil. 103 [1957]). In the dealing with vehicles registered under the Public Service Law, the public has the right to
same breadth, Rock Component Philippines, Inc. was ordered to reimburse petitioner for any assume or presume that the registered owner is the actual owner thereof, for it would be
amount that the latter may be adjudged liable to pay herein private respondents as expressly difficult for the public to enforce the actions that they may have for injuries caused to them by
stipulated in the contract of lease between petitioner and Rock Component Philippines, Inc. the vehicles being negligently operated if the public should be required to prove who the
Moreover, the trial court applied Article 2194 of the new Civil Code on solidary accountability actual owner is. How would the public or third persons know against whom to enforce their
of joint tortfeasors insofar as the liability of the driver, herein petitioner and Rock Component rights in case of subsequent transfers of the vehicles? We do not imply by this doctrine,
Philippines was concerned (pp. 6-7, Decision; pp. 44-45, Rollo). however, that the registered owner may recover whatever amount he had paid by virtue of his
liability to third persons from the person to whom he had actually sold, assigned or conveyed
To the question of whether trialcourt held that petitioner can be held responsible to the victims the vehicle.
albeit the truck was leased to Rock Component Philippines when the incident occurred, the
appellate court answered in the affirmative on the basis of the jurisprudential dogmas which, "Under the same principle the registered owner of any vehicle, even if not used for a public
as aforesaid, were relied upon by the trial court although respondent court was quick to add service, should primarily be responsible to the public or to third persons for injuries caused
the caveat embodied in the lease covenant between petitioner and Rock Component the latter while the vehicle is being driven on the highways or streets. The members of the
Philippines relative to the latter’s duty to reimburse any amount which may be adjudged Court are in agreement that the defendant-appellant should be held liable to plaintiff-appellee
against petitioner (pp. 32-33, Rollo). for the injuries occasioned to the latter because of the negligence of the driver, even if the
defendant-appellant was no longer the owner of the vehicle at the time of the damage
Petitioner asseverates that it should not have been haled to court and ordered to respond for because he had previously sold it to another. What is the legal basis for his (defendant-
the damage in the manner arrived at by both the trial and appellate courts since paragraph 5 appellant’s) liability?
of the complaint lodged by the plaintiffs below would indicate that petitioner was not the
employer of the negligent driver who was under the control and supervision of Lino Castro at "There is a presumption that the owner of the guilty vehicle is the defendant-appellant as he
the time of the accident, apart from the fact that the Isuzu truck was in the physical is the registered owner in the Motor Vehicles Office. Should he not be allowed to prove the
possession of Rock Component Philippines by virtue of the lease truth, that he had sold it to another and thus shift the responsibility for the injury to the real
agreement.chanrobles.com:cralaw:red and actual owner? The defendant holds the affirmative of this proposition, the trial court held
the negative.

"The Revised Motor vehicles Law (Act No. 3992, as amended) provides that no vehicle may
be used or operated upon any public highway unless the same is properly registered. It has
been stated that the system of licensing and the requirement that each machine must carry a
registration number, conspicuously displayed, is one of the precautions taken to reduce the
danger of injury to pedestrians and other travellers from the careless management of
automobiles, and to furnish a means of ascertaining the identity of persons violating the laws
and ordinances, regulating the speed and operation of machines upon the highways (2 R. C.
L. 1176). Not only are vehicles to be registered and that no motor vehicles are to be used or
operated without being properly registered for the current year, but that dealers in motor
vehicles shall furnish the Motor Vehicles Office a report showing the name and address of
each purchaser of motor vehicle during the previous month and the manufacturer’s serial
number and motor number. (Section 5[c], Act No. 3992, as amended.).
"Registration is required not to make said registration the operative act by which ownership in
vehicles is transferred, as in land registration cases, because the administrative proceeding
of registration does not bear any essential relation to the contract of sale between the parties
(Chinchilla v. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the
vehicle upon any public highway (section 5 [a], Act No. 3992, as amended). The main aim of
motor vehicle registration is to identify the owner so that if any accident happens, or that any
damage or injury is caused by the vehicle on the public highways, responsibility therefor can
be fixed on a definite individual, the registered owner. Instances are numerous where
vehicles running on public highways caused accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or with very scant means of
identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public,
that the motor vehicle registration is primarily ordained, in the interest of the determination of
persons responsible for damages or injuries caused on public highways.
‘One of the principal purposes of motor vehicles legislation is identification of the vehicle and
of the operator, in case of accident; and another is that the knowledge that means of
detection are always available may act as a deterrent from lax observance of the law and of
the rules of conservative and safe operation. Whatever purpose there may be in these
statutes, it is subordinate at the last to the primary purpose of rendering it certain that the
violator of the law or of the rules of safety shall not escape because of lack of means to
discover him.’ The purpose of the statute is thwarted, and the displayed number becomes a
‘snare and delusion,’ if courts would entertain such defenses as that put forward by appellee
in this case. No responsible person or corporation could be held liable for the most
outrageous acts of negligence, if they should be allowed to pace a "middleman" between
them and the public, and escape liability by the manner in which they recompense their
servants.’ (King v. Brenham Automobile Co., Inc. 145 S. W. 278, 279.).
"With the above policy in mind, the question that defendant-appellant poses is: should not the
registered owner be allowed at the trial to prove who the actual and real owner is, and in
accordance with such proof escape or evade responsibility and lay the same on the person
actually owning the vehicle?
WON defendant, registered owner, is allowed to evade responsibility by proving who the
supposed transferee or owner is, NO
We hold with the trial court that the law does not allow him to do so; the law, with its aim and
policy in mind, does not relieve him directly of the responsibility that the law fixes and places
upon him as an incident or consequence of registration. Were a registered owner allowed to
evade responsibility by proving who the supposed transferee or owner is, it would be easy for
him, by collusion with others or otherwise, to escape said responsibility and transfer the same
to an indefinite person, or to one who possesses no property with which to respond financially
for the damage or injury done. A victim of recklessness on the public highways is usually
without means to discover or identify the person actually causing the injury or damage. He
has no means other than by a recourse to the registration in the Motor Vehicles Office to
determine who is the owner. The protection that the law aims to extend to him would become
illusory were the registered owner given the opportunity to escape liability by disproving his
ownership. If the policy of the law is to be enforced and carried out, the registered owner
should not be allowed to prove the contrary to the prejudice of the person injured, that is, to
prove that a third person or another has become the owner, so that he may thereby be
relieved of the responsibility to the injured person.
"The above policy and application of the law may appear quite harsh and would seem to
conflict with truth and justice. We do not think it is so. A registered owner who has already
sold or transferred a vehicle has the recourse to a third-party complaint, in the same action
brought against him to recover for the damage or injury done, against the vendee or
transferee of the vehicle. The inconvenience of the suit is no justification for relieving him of
liability; said inconvenience is the price he pays for failure to comply with the registration that
the law demands and requires.
"In synthesis, we hold that the registered owner, the defendant-appellant herein, is primarily
responsible for the damage caused to the vehicle of the plaintiff-appellee, but he (defendant-
appellant) has a right to be indemnified by the real or actual owner of the amount that he may
be required to pay as damage for the injury caused to the plaintiff-appellant." (at pp. 106-
110.).
If the foregoing words of wisdom were applied in solving the circumstance whereof the
vehicle had been alienated or sold to another, there certainly can be no serious exception
against utilizing the same rationale to the antecedents of this case where the subject vehicle
was merely leased by petitioner to Rock Component Philippines, Inc., with petitioner retaining
ownership over the vehicle.chanrobles virtual lawlibrary
Petitioner’s reliance on the rulings of this Court in Duavit v. Court of Appeals and in Duquillo
v. Bayot (supra) is legally unpalatable for the purpose of the present discourse. The vehicles
adverted to in the two cases shared a common thread, so to speak, in that the jeep and the
truck were driven in reckless fashion without the consent or knowledge of the respective
owners. Cognizant of the inculpatory testimony spewed by defendant Sabiniano when he
admitted that he took the jeep from the garage of defendant Duavit without the consent or
authority of the latter, Justice Gutierrez, Jr. in Duavit remarked:jgc:chanrobles.com.ph

". . . Herein petitioner does not deny ownership of the vehicle involved in the mishap but
completely denies having employed the driver Sabiniano or even having authorized the latter
to drive his jeep. The jeep was virtually stolen from the petitioner’s garage. To hold, therefore,
the petitioner liable for the accident caused by the negligence of Sabiniano who was neither
his driver nor employee would be absurd as it would be like holding liable the owner of a
stolen vehicle for an accident caused by the person who stole such vehicle. In this regard, we
cannot ignore the many cases of vehicles forcibly taken from their owners at gunpoint or
stolen from garages and parking areas and the instances of service station attendants or
mechanics of auto repair shops using, without the owner’s consent, vehicles entrusted to
them for servicing or repair." (at p. 496.).
Lydia F. Soriano was being driven at the outer lane of the highway by Benjamin Jacildone,
while the other car, with Plate No. PCT 792, owned by respondent FILCAR Transport, Inc.
(FILCAR), and driven by Peter Dahl-Jensen as lessee, was at the center lane, left of the other
vehicle. Upon approaching the corner of Pioneer Street, the car owned by FILCAR swerved
to the right hitting the left side of the car of Soriano. At that time Dahl-Jensen, a Danish
tourist, did not possess a Philippine driver's license. 1
As a consequence, petitioner FGU Insurance Corporation, in view of its insurance contract
with Soriano, paid the latter P25,382.20. By way of subrogation,2 it sued Dahl-Jensen and
respondent FILCAR as well as respondent Fortune Insurance Corporation (FORTUNE) as
insurer of FILCAR for quasi-delict before the Regional Trial Court of Makati City.

In the Duquillo case, the defendant therein cannot, according to Justice Diaz, be held liable Unfortunately, summons was not served on Dahl-Jensen since he was no longer staying at
for anything because of circumstances which indicated that the truck was driven without the his given address; in fact, upon motion of petitioner, he was dropped from the complaint.
consent or knowledge of the owner thereof.

Consequently, there is no need for Us to discuss the matter of imputed negligence because On 30 July 1991 the trial court dismissed the case for failure of petitioner to substantiate its
petitioner merely presumed, erroneously, however, that judgment was rendered against it on claim of subrogation.3
the basis of such doctrine embodied under Article 2180 of the new Civil Code.
On 31 January 1995 respondent Court of Appeals affirmed the ruling of the trial court
WHEREFORE, the petition is hereby DISMISSED and decision under review AFFIRMED although based on another ground, i.e., only the fault or negligence of Dahl-Jensen was
without special pronouncement as to costs. sufficiently proved but not that of respondent FILCAR.4 In other words, petitioner failed to
establish its cause of action for sum of money based on quasi-delict.
SO ORDERED.
In this appeal, petitioner insists that respondents are liable on the strength of the ruling
in MYC-Agro-Industrial Corporation v. Vda.  de Caldo5 that the registered owner of a vehicle
is liable for damages suffered by third persons although the vehicle is leased to another.
G.R. No. 118889 March 23, 1998
WON Filcar is liable. NO
FGU INSURANCE CORPORATION, petitioner,
vs. We find no reversible error committed by respondent court in upholding the dismissal of
COURT OF APPEALS, FILCAR TRANSPORT, INC., and FORTUNE INSURANCE petitioner's complaint. The pertinent provision is Art. 2176 of the Civil Code which states:
CORPORATION, respondents. "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 . . . . "

BELLOSILLO, J.:
For damages suffered by a third party, may an action based on quasi-delict prosper against a
rent-a-car company and, consequently, its insurer for fault or negligence of the car lessee in
driving the rented vehicle?
This was a two-car collision at dawn. At around 3 o'clock of 21 April 1987, two (2) vehicles,
both Mitsubishi Colt Lancers, cruising northward along Epifanio de los Santos Avenue,
Mandaluyong City, figured in a traffic accident. The car bearing Plate No. PDG 435 owned by
To sustain a claim based thereon, the following requisites must concur: (a) damage suffered
by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and
effect between the fault or negligence of the defendant and the damage incurred by the
plaintiff.6
We agree with respondent court that petitioner failed to prove the existence of the second
requisite, i.e., fault or negligence of defendant FILCAR, because only the fault or negligence
of Dahl-Jensen was sufficiently established, not that of FILCAR. It should be noted that the
damage caused on the vehicle of Soriano was brought about by the circumstance that Dahl-
Jensen swerved to the right while the vehicle that he was driving was at the center lane. It is
plain that the negligence was solely attributable to Dahl-Jensen thus making the damage
suffered by the other vehicle his personal liability. Respondent FILCAR did not have any
participation therein.
Article 2180 of the same Code which deals also with quasi-delict provides:
The obligation 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.
The father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in their
company.
Guardians are liable for damages caused by the minors or incapacitated
persons who are under their authority and live in their company.
The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the
branches in which the latter are employed or on the occasion of their
functions.
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.
The State is responsible in like manner when it acts through a special agent;
but not when the damage has been caused by the official to whom the task
done properly pertains, in which case what is provided in article 2176 shall
be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable
for damages caused by their pupils and students or apprentices, so long as
they remain in their custody.
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.
The liability imposed by Art. 2180 arises by virtue of a presumption  juris tantum of negligence
on the part of the persons made responsible thereunder, derived from their failure to exercise
due care and vigilance over the acts of subordinates to prevent them from causing
damage.7 Yet, as correctly observed by respondent court, Art. 2180 is hardly applicable
because none of the circumstances mentioned therein obtains in the case under
consideration. Respondent FILCAR being engaged in a rent-a-car business was only the
owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them
as employer and employee. Respondent FILCAR cannot in any way be responsible for the
negligent act of Dahl-Jensen, the former not being an employer of the latter.
We now correlate par. 5 of Art. 2180 with Art. 2184 of the same Code which provides: "In
motor vehicle mishap, the owner is solidarily liable with his driver, if the former, who was in
the vehicle, could have by the use of due diligence, prevented the misfortune  . . . . If the
owner was not in the motor vehicle, the provisions of article 2180 are applicable." Obviously,
this provision of Art. 2184 is neither applicable because of the absence of master-driver
relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has no cause
of action against respondent FILCAR on the basis of quasi-delict; logically, its claim against
respondent FORTUNE can neither prosper.
Petitioner's insistence on MYC-Agro-Industrial Corporation is rooted in a misapprehension of
our ruling therein. In that case, the negligent and reckless operation of the truck owned by
petitioner corporation caused injuries to several persons and damage to property. Intending
to exculpate itself from liability, the corporation raised the defense that at the time of the
collision it had no more control over the vehicle as it was leased to another; and, that the
driver was not its employee but of the lessee. The trial court was not persuaded as it found
that the true nature of the alleged lease contract was nothing more than a disguise effected
by the corporation to relieve itself of the burdens and responsibilities of an employer. We
upheld this finding and affirmed the declaration of joint and several liability of the corporation
with its driver.
WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals dated
31 January 1995 sustaining the dismissal of petitioner's complaint by the trial court is
AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 162267             July 4, 2008
PCI LEASING AND FINANCE, INC., petitioner,
vs.
UCPB GENERAL INSURANCE CO., INC., respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking a reversal of the Decision1 of the Court of Appeals (CA) dated December 12, 2003
affirming with modification the Decision of the Regional Trial Court (RTC) of Makati City which
ordered petitioner and Renato Gonzaga (Gonzaga) to pay, jointly and severally, respondent
the amount of P244,500.00 plus interest; and the CA Resolution2 dated February 18, 2004
denying petitioner's Motion for Reconsideration.
The facts, as found by the CA, are undisputed:
On October 19, 1990 at about 10:30 p.m., a Mitsubishi Lancer car with Plate Number
PHD-206 owned by United Coconut Planters Bank was traversing the Laurel
Highway, Barangay Balintawak, Lipa City. The car was insured with plantiff-appellee
[UCPB General Insurance Inc.], then driven by Flaviano Isaac with Conrado
Geronimo, the Asst. Manager of said bank, was hit and bumped by an 18-wheeler
Fuso Tanker Truck with Plate No. PJE-737 and Trailer Plate No. NVM-133, owned by
defendants-appellants PCI Leasing & Finance, Inc. allegedly leased to and operated
by defendant-appellant Superior Gas & Equitable Co., Inc. (SUGECO) and driven by
its employee, defendant appellant Renato Gonzaga.
The impact caused heavy damage to the Mitsubishi Lancer car resulting in an
explosion of the rear part of the car. The driver and passenger suffered physical
injuries. However, the driver defendant-appellant Gonzaga continued on its [sic] way
to its [sic] destination and did not bother to bring his victims to the hospital.
Plaintiff-appellee paid the assured UCPB the amount of P244,500.00 representing
the insurance coverage of the damaged car.
As the 18-wheeler truck is registered under the name of PCI Leasing, repeated
demands were made by plaintiff-appellee for the payment of the aforesaid amounts.
However, no payment was made. Thus, plaintiff-appellee filed the instant case on
March 13, 1991.3
PCI Leasing and Finance, Inc., (petitioner) interposed the defense that it could not be held
liable for the collision, since the driver of the truck, Gonzaga, was not its employee, but that of
its co-defendant Superior Gas & Equitable Co., Inc. (SUGECO).4 In fact, it was SUGECO,
and not petitioner, that was the actual operator of the truck, pursuant to a Contract of Lease
signed by petitioner and SUGECO.5 Petitioner, however, admitted that it was the owner of the
truck in question.6
After trial, the RTC rendered its Decision dated April 15, 1999,7 the dispositive portion of
which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff
UCPB General Insurance [respondent], ordering the defendants PCI Leasing and
Finance, Inc., [petitioner] and Renato Gonzaga, to pay jointly and severally the
former the following amounts: the principal amount of P244,500.00 with 12% interest
as of the filing of this complaint until the same is paid; P50,000.00 as attorney's fees;
and P20,000.00 as costs of suit.
SO ORDERED.8
Aggrieved by the decision of the trial court, petitioner appealed to the CA.
In its Decision dated December 12, 2003, the CA affirmed the RTC's decision, with certain
modifications, as follows:
WHEREFORE, the appealed decision dated April 15, 1999 is hereby AFFIRMED with
modification that the award of attorney's fees is hereby deleted and the rate of
interest shall be six percent (6%) per annum computed from the time of the filing of
the complaint in the trial court until the finality of the judgment. If the adjudged
principal and the interest remain unpaid thereafter, the interest rate shall be twelve
percent (12%) per annum computed from the time the judgment becomes final and
executory until it is fully satisfied.
SO ORDERED.9
Petitioner filed a Motion for Reconsideration which the CA denied in its Resolution dated
February 18, 2004.
Hence, herein Petition for Review.
The issues raised by petitioner are purely legal:
Whether petitioner, as registered owner of a motor vehicle that figured in a quasi-
delict may be held liable, jointly and severally, with the driver thereof, for the
damages caused to third parties. YES
Whether petitioner, as a financing company, is absolved from liability by the
enactment of Republic Act (R.A.) No. 8556, or the Financing Company Act of 1998.
Anent the first issue, the CA found petitioner liable for the damage caused by the collision
since under the Public Service Act, if the property covered by a franchise is transferred or
leased to another without obtaining the requisite approval, the transfer is not binding on the
Public Service Commission and, in contemplation of law, the grantee continues to be
responsible under the franchise in relation to the operation of the vehicle, such as damage or
injury to third parties due to collisions.10
Petitioner claims that the CA's reliance on the Public Service Act is misplaced, since the said
law applies only to cases involving common carriers, or those which have franchises to
operate as public utilities. In contrast, the case before this Court involves a private
commercial vehicle for business use, which is not offered for service to the general public.11
Petitioner's contention has partial merit, as indeed, the vehicles involved in the case at bar
are not common carriers, which makes the Public Service Act inapplicable.
However, the registered owner of the vehicle driven by a negligent driver may still be held
liable under applicable jurisprudence involving laws on compulsory motor vehicle registration
and the liabilities of employers for quasi-delicts under the Civil Code.
The principle of holding the registered owner of a vehicle liable for quasi-delicts resulting from
its use is well-established in jurisprudence. Erezo v. Jepte,12 with Justice Labrador
as ponente, wisely explained the reason behind this principle, thus:
Registration is required not to make said registration the operative act by which
ownership in vehicles is transferred, as in land registration cases, because the
administrative proceeding of registration does not bear any essential relation to the
contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil.
888), but to permit the use and operation of the vehicle upon any public highway
(section 5 [a], Act No. 3992, as amended.) The main aim of motor vehicle registration
is to identify the owner so that if any accident happens, or that any damage or injury
is caused by the vehicle on the public highways, responsibility therefor can be fixed
on a definite individual, the registered owner. Instances are numerous where vehicles
running on public highways caused accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or with very scant
means of identification. It is to forestall these circumstances, so inconvenient or
prejudicial to the public, that the motor vehicle registration is primarily ordained, in the
interest of the determination of persons responsible for damages or injuries caused
on public highways.
"'One of the principal purposes of motor vehicles legislation is identification of
the vehicle and of the operator, in case of accident; and another is that the
knowledge that means of detection are always available may act as a
deterrent from lax observance of the law and of the rules of conservative and
safe operation. Whatever purpose there may be in these statutes, it is
subordinate at the last to the primary purpose of rendering it certain that the
violator of the law or of the rules of safety shall not escape because of lack of
means to discover him.' The purpose of the statute is thwarted, and the
displayed number becomes a 'snare and delusion,' if courts would entertain
such defenses as that put forward by appellee in this case. No responsible
person or corporation could be held liable for the most outrageous acts of
negligence, if they should be allowed to place a 'middleman' between them
and the public, and escape liability by the manner in which they recompense
their servants." (King vs. Brenham Automobile Co., 145 S.W. 278, 279.)
With the above policy in mind, the question that defendant-appellant poses is: should
not the registered owner be allowed at the trial to prove who the actual and real
owner is, and in accordance with such proof escape or evade responsibility and lay
the same on the person actually owning the vehicle? We hold with the trial court that
the law does not allow him to do so; the law, with its aim and policy in mind, does not
relieve him directly of the responsibility that the law fixes and places upon him as an
incident or consequence of registration. Were a registered owner allowed to evade
responsibility by proving who the supposed transferee or owner is, it would be easy
for him, by collusion with others or otherwise, to escape said responsibility and
transfer the same to an indefinite person, or to one who possesses no property with
which to respond financially for the damage or injury done. A victim of recklessness
on the public highways is usually without means to discover or identify the person
actually causing the injury or damage. He has no means other than by a recourse to
the registration in the Motor Vehicles Office to determine who is the owner. The
protection that the law aims to extend to him would become illusory were the
registered owner given the opportunity to escape liability by disproving his ownership.
If the policy of the law is to be enforced and carried out, the registered owner should
not be allowed to prove the contrary to the prejudice of the person injured, that is, to
prove that a third person or another has become the owner, so that he may thereby
be relieved of the responsibility to the injured person.
The above policy and application of the law may appear quite harsh and would seem
to conflict with truth and justice. We do not think it is so. A registered owner who has
already sold or transferred a vehicle has the recourse to a third-party complaint, in
the same action brought against him to recover for the damage or injury done,
against the vendee or transferee of the vehicle. The inconvenience of the suit is no
justification for relieving him of liability; said inconvenience is the price he pays for
failure to comply with the registration that the law demands and requires.
In synthesis, we hold that the registered owner, the defendant-appellant herein, is
primarily responsible for the damage caused to the vehicle of the plaintiff-appellee,
but he (defendant-appellant) has a right to be indemnified by the real or actual owner
of the amount that he may be required to pay as damage for the injury caused to the
plaintiff-appellant.13
The case is still good law and has been consistently cited in subsequent cases.14 Thus, there
is no good reason to depart from its tenets.
For damage or injuries arising out of negligence in the operation of a motor vehicle, the
registered owner may be held civilly liable with the negligent driver either 1) subsidiarily, if the
aggrieved party seeks relief based on a delict or crime under Articles 100 and 103 of the
Revised Penal Code; or 2) solidarily, if the complainant seeks relief based on a quasi-
delict under Articles 2176 and 2180 of the Civil Code. It is the option of the plaintiff whether to
waive completely the filing of the civil action, or institute it with the criminal action, or file it
separately or independently of a criminal action;15 his only limitation is that he cannot recover
damages twice for the same act or omission of the defendant.16
In case a separate civil action is filed, the long-standing principle is that the registered owner
of a motor vehicle is primarily and directly responsible for the consequences of its operation,
including the negligence of the driver, with respect to the public and all third persons.17 In
contemplation of law, the registered owner of a motor vehicle is the employer of its driver,
with the actual operator and employer, such as a lessee, being considered as merely the
owner's agent.18 This being the case, even if a sale has been executed before a tortious
incident, the sale, if unregistered, has no effect as to the right of the public and third persons
to recover from the registered owner.19 The public has the right to conclusively presume that
the registered owner is the real owner, and may sue accordingly.20
In the case now before the Court, there is not even a sale of the vehicle involved, but a mere
lease, which remained unregistered up to the time of the occurrence of the quasi-delict that
gave rise to the case. Since a lease, unlike a sale, does not even involve a transfer of title or
ownership, but the mere use or enjoyment of property, there is more reason, therefore, in this
instance to uphold the policy behind the law, which is to protect the unwitting public and
provide it with a definite person to make accountable for losses or injuries suffered in
vehicular accidents.21 This is and has always been the rationale behind compulsory motor
vehicle registration under the Land Transportation and Traffic Code and similar laws, which,
as early as Erezo, has been guiding the courts in their disposition of cases involving motor
vehicular incidents. It is also important to emphasize that such principles apply to all vehicles
in general, not just those offered for public service or utility.22
The Court recognizes that the business of financing companies has a legitimate and
commendable purpose.23 In earlier cases, it considered a financial lease or financing lease a
legal contract,24 though subject to the restrictions of the so-called Recto Law or Articles 1484
and 1485 of the Civil Code.25 In previous cases, the Court adopted the statutory definition of a
financial lease or financing lease, as:
[A] mode of extending credit through a non-cancelable lease contract under which
the lessor purchases or acquires, at the instance of the lessee, machinery,
equipment, motor vehicles, appliances, business and office machines, and other
movable or immovable property in consideration of the periodic payment by the
lessee of a fixed amount of money sufficient to amortize at least seventy (70%) of the
purchase price or acquisition cost, including any incidental expenses and a margin of
profit over an obligatory period of not less than two (2) years during which the lessee
has the right to hold and use the leased property, x x x but with no obligation or
option on his part to purchase the leased property from the owner-lessor at the end of
the lease contract. 26
Petitioner presented a lengthy discussion of the purported trend in other jurisdictions, which
apparently tends to favor absolving financing companies from liability for the consequences
of quasi-delictual acts or omissions involving financially leased property.27 The petition adds
that these developments have been legislated in our jurisdiction in Republic Act (R.A.) No.
8556,28 which provides:
Section 12. Liability of lessors. - Financing companies shall not be liable for loss,
damage or injury caused by a motor vehicle, aircraft, vessel, equipment, machinery
or other property leased to a third person or entity except when the motor vehicle,
aircraft, vessel, equipment or other property is operated by the financing company, its
employees or agents at the time of the loss, damage or injury.1avvphi1
Petitioner's argument that the enactment of R.A. No. 8556, especially its addition of the new
Sec. 12 to the old law, is deemed to have absolved petitioner from liability, fails to convince
the Court.
These developments, indeed, point to a seeming emancipation of financing companies from
the obligation to compensate claimants for losses suffered from the operation of vehicles
covered by their lease. Such, however, are not applicable to petitioner and do not exonerate it
from liability in the present case.
The new law, R.A. No. 8556, notwithstanding developments in foreign jurisdictions, do not
supersede or repeal the law on compulsory motor vehicle registration. No part of the law
expressly repeals Section 5(a) and (e) of R.A. No. 4136, as amended, otherwise known as
the Land Transportation and Traffic Code, to wit:
Sec. 5. Compulsory registration of motor vehicles. - (a) All motor vehicles and
trailer of any type used or operated on or upon any highway of the Philippines must
be registered with the Bureau of Land Transportation (now the Land Transportation
Office, per Executive Order No. 125, January 30, 1987, and Executive Order No.
125-A, April 13, 1987) for the current year in accordance with the provisions of this
Act.
xxxx
(e) Encumbrances of motor vehicles. - Mortgages, attachments, and other
encumbrances of motor vehicles, in order to be valid against third parties must be
recorded in the Bureau (now the Land Transportation Office). Voluntary transactions
or voluntary encumbrances shall likewise be properly recorded on the face of all
outstanding copies of the certificates of registration of the vehicle concerned.
Cancellation or foreclosure of such mortgages, attachments, and other
encumbrances shall likewise be recorded, and in the absence of such cancellation,
no certificate of registration shall be issued without the corresponding notation of
mortgage, attachment and/or other encumbrances.
x x x x (Emphasis supplied)
Neither is there an implied repeal of R.A. No. 4136. As a rule, repeal by implication is frowned
upon, unless there is clear showing that the later statute is so irreconcilably inconsistent and
repugnant to the existing law that they cannot be reconciled and made to stand
together.29 There is nothing in R.A. No. 4136 that is inconsistent and incapable of
reconciliation.
Thus, the rule remains the same: a sale, lease, or financial lease, for that matter, that is not
registered with the Land Transportation Office, still does not bind third persons who are
aggrieved in tortious incidents, for the latter need only to rely on the public registration of a
motor vehicle as conclusive evidence of ownership.30 A lease such as the one involved in the
instant case is an encumbrance in contemplation of law, which needs to be registered in
order for it to bind third parties.31 Under this policy, the evil sought to be avoided is the
exacerbation of the suffering of victims of tragic vehicular accidents in not being able to
identify a guilty party. A contrary ruling will not serve the ends of justice. The failure to register
a lease, sale, transfer or encumbrance, should not benefit the parties responsible, to the
prejudice of innocent victims.
The non-registration of the lease contract between petitioner and its lessee precludes the
former from enjoying the benefits under Section 12 of R.A. No. 8556.
This ruling may appear too severe and unpalatable to leasing and financing companies, but
the Court believes that petitioner and other companies so situated are not entirely left without
recourse. They may resort to third-party complaints against their lessees or whoever are the
actual operators of their vehicles. In the case at bar, there is, in fact, a provision in the lease
contract between petitioner and SUGECO to the effect that the latter shall indemnify and hold
the former free and harmless from any "liabilities, damages, suits, claims or judgments"
arising from the latter's use of the motor vehicle.32 Whether petitioner would act against
SUGECO based on this provision is its own option.
The burden of registration of the lease contract is minuscule compared to the chaos that may
result if registered owners or operators of vehicles are freed from such responsibility.
Petitioner pays the price for its failure to obey the law on compulsory registration of motor
vehicles for registration is a pre-requisite for any person to even enjoy the privilege of putting
a vehicle on public roads.
WHEREFORE, the petition is DENIED. The Decision dated December 12, 2003 and
Resolution dated February 18, 2004 of the Court of Appeals are AFFIRMED.
Costs against petitioner.
SO ORDERED.
G.R. No. 132266 December 21, 1999
CASTILEX INDUSTRIAL CORPORATION, petitioner,
vs.
VICENTE VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU DOCTORS' HOSPITAL,
INC., respondents.
 
DAVIDE, JR., C.J.:
The pivotal issue in this petition is whether an employer may be held vicariously liable for the
death resulting from the negligent operation by a managerial employee of a company-issued
vehicle.
The antecedents, as succinctly summarized by the Court of Appeals, are as follows:
On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So
Vasquez, was driving a Honda motorcycle around Fuente Osmeña Rotunda.
He was traveling counter-clockwise, (the normal flow of traffic in a rotunda)
but without any protective helmet or goggles. He was also only carrying a
Student's Permit to Drive at the time. Upon the other hand, Benjamin Abad
[was a] manager of Appellant Castilex Industrial Corporation, registered
owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW-794. On the same
date and time, Abad drove the said company car out of a parking lot but
instead of going around the Osmeña rotunda he made a short cut against
[the] flow of the traffic in proceeding to his route to General Maxilom St. or to
Belvic St.
In the process, the motorcycle of Vasquez and the pick-up of Abad collided
with each other causing severe injuries to the former. Abad stopped his
vehicle and brought Vasquez to the Southern Islands Hospital and later to
the Cebu Doctor's Hospital.
On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was
there that Abad signed an acknowledgment of Responsible Party (Exhibit K)
wherein he agreed to pay whatever hospital bills, professional fees and other
incidental charges Vasquez may incur.
After the police authorities had conducted the investigation of the accident, a
Criminal Case was filed against Abad but which was subsequently dismissed
for failure to prosecute. So, the present action for damages was commenced
by Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the deceased
Romeo So Vasquez, against Jose Benjamin Abad and Castilex Industrial
Corporation. In the same action, Cebu Doctor's Hospital intervened to collect
unpaid balance for the medical expense given to Romeo So Vasquez.1
The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered
Jose Benjamin Abad (hereafter ABAD) and petitioner Castilex Industrial Corporation
(hereafter CASTILEX) to pay jointly and solidarily (1) Spouses Vasquez, the amounts of
P8,000.00 for burial expenses; P50,000.00 as moral damages; P10,000.00 as attorney's
fees; and P778,752.00 for loss of earning capacity; and (2) Cebu Doctor's Hospital, the sum
of P50,927.83 for unpaid medical and hospital bills at 3% monthly interest from 27 July 1989
until fully paid, plus the costs of litigation.2
CASTILEX and ABAD separately appealed the decision.
In its decision3 of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court
holding ABAD and CASTILEX liable but held that the liability of the latter is "only vicarious
and not solidary" with the former. It reduced the award of damages representing loss of
earning capacity from P778,752.00 to P214,156.80; and the interest on the hospital and
medical bills, from 3% per month to 12%  per annum from 5 September 1988 until fully paid.
Upon CASTILEX's motion for reconsideration, the Court of Appeals modified its decision by
(1) reducing the award of moral damages from P50,000 to P30,000 in view of the deceased's
contributory negligence; (b) deleting the award of attorney's fees for lack of evidence; and (c)
reducing the interest on hospital and medical bills to 6% per annum from 5 September 1988
until fully paid.4
Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1)
applying to the case the fifth paragraph of Article 2180 of the Civil Code, instead of the fourth
paragraph thereof; (2) that as a managerial employee, ABAD was deemed to have been
always acting within the scope of his assigned task even outside office hours because he was
using a vehicle issued to him by petitioner; and (3) ruling that petitioner had the burden to
prove that the employee was not acting within the scope of his assigned task.
Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on
the theory of negligence on the part of the deceased.
On the other hand, respondents Spouses Vasquez argue that their son's death was caused
by the negligence of petitioner's employee who was driving a vehicle issued by petitioner and
who was on his way home from overtime work for petitioner; and that petitioner is thus liable
for the resulting injury and subsequent death of their son on the basis of the fifth paragraph of
Article 2180. Even if the fourth paragraph of Article 2180 were applied, petitioner cannot
escape liability therefor. They moreover argue that the Court of Appeals erred in reducing the
amount of compensatory damages when the award made by the trial court was borne both by
evidence adduced during the trial regarding deceased's wages and by jurisprudence on life
expectancy. Moreover, they point out that the petition is procedurally not acceptable on the
following grounds: (1) lack of an explanation for serving the petition upon the Court of
Appeals by registered mail, as required under Section 11, Rule 13 of the Rules of Civil
Procedure; and (2) lack of a statement of the dates of the expiration of the original
reglementary period and of the filing of the motion for extension of time to file a petition for
review.
For its part, respondent Cebu Doctor's Hospital maintains that petitioner CASTILEX is indeed
vicariously liable for the injuries and subsequent death of Romeo Vasquez caused by ABAD,
who was on his way home from taking snacks after doing overtime work for petitioner.
Although the incident occurred when ABAD was not working anymore "the inescapable fact
remains that said employee would not have been situated at such time and place had he not
been required by petitioner to do overtime work." Moreover, since petitioner adopted the
evidence adduced by ABAD, it cannot, as the latter's employer, inveigle itself from the ambit
of liability, and is thus estopped by the records of the case, which it failed to refute.
We shall first address the issue raised by the private respondents regarding some alleged
procedural lapses in the petition.
Private respondent's contention of petitioner's violation of Section 11 of Rule 13 and Section
4 of Rule 45 of the 1997 Rules of Civil Procedure holds no water.
Sec. 11 of Rule 13 provides:
Sec. 11. Priorities in modes of services and filing. — Whenever practicable,
the service and filing of pleadings and other papers shall be done personally.
Except with respect to papers emanating from the court, a resort to other
modes must be accompanied by a written explanation why the service or
filing was not done personally. A violation of this Rule may be cause to
consider the paper as not filed.
The explanation why service of a copy of the petition upon the Court of Appeals was done by
registered mail is found on Page 28 of the petition. Thus, there has been compliance with the
aforequoted provision.
As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the
same is unfounded. The material dates required to be stated in the petition are the following:
(1) the date of receipt of the judgment or final order or resolution subject of the petition; (2)
the date of filing of a motion for new trial or reconsideration, if any; and (3) the date of receipt
of the notice of the denial of the motion. Contrary to private respondent's claim, the petition
need not indicate the dates of the expiration of the original reglementary period and the filing
of a motion for extension of time to file the petition. At any rate, aside from the material dates
required under Section 4 of Rule 45, petitioner CASTILEX also stated in the first page of the
petition the date it filed the motion for extension of time to file the petition.
Now on the merits of the case.
The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said
negligence but claims that it is not vicariously liable for the injuries and subsequent death
caused by ABAD. NO
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply
to instances where the employer is not engaged in business or industry. Since it is engaged
in the business of manufacturing and selling furniture it is therefore not covered by said
provision. Instead, the fourth paragraph should apply.
Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though the
former are not engaged in any business or industry" found in the fifth paragraph should be
interpreted to mean that it is not necessary for the employer to be engaged in any business or
industry to be liable for the negligence of his employee who is acting within the scope of his
assigned task.5
A distinction must be made between the two provisions to determine what is applicable. Both
provisions apply to employers: the fourth paragraph, to owners and managers of an
establishment or enterprise; and the fifth paragraph, to employers in general, whether or not
engaged in any business or industry. The fourth paragraph covers negligent acts of
employees committed either in the service of the branches or on the occasion of their
functions, while the fifth paragraph encompasses negligent acts of employees acting within
the scope of their assigned task. The latter is an expansion of the former in both employer
coverage and acts included. Negligent acts of employees, whether or not the employer is
engaged in a business or industry, are covered so long as they were acting within the scope
of their assigned task, even though committed neither in the service of the branches nor on
the occasion of their functions. For, admittedly, employees oftentimes wear different hats.
They perform functions which are beyond their office, title or designation but which,
nevertheless, are still within the call of duty.
This court has applied the fifth paragraph to cases where the employer was engaged in a
business or industry such as truck operators6 and banks.7 The Court of Appeals cannot,
therefore, be faulted in applying the said paragraph of Article 2180 of the Civil Code to this
case.
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry,
an employer is liable for the torts committed by employees within the scope of his assigned
tasks. But it is necessary to establish the employer-employee relationship; once this is done,
the plaintiff must show, to hold the employer liable, that the employee was acting within the
scope of his assigned task when the tort complained of was committed. It is only then that the
employer may find it necessary to interpose the defense of due diligence in the selection and
supervision of the employee.8
It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of
the tort occurrence. As to whether he was acting within the scope of his assigned task is a
question of fact, which the court a quo and the Court of Appeals resolved in the affirmative.
Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of
Appeals are entitled to great respect, and even finality at times. This rule is, however, subject
to exceptions such as when the conclusion is grounded on speculations, surmises, or
conjectures.9 Such exception obtain in the present case to warrant review by this Court of the
finding of the Court of Appeals that since ABAD was driving petitioner's vehicle he was acting
within the scope of his duties as a manager.
Before we pass upon the issue of whether ABAD was performing acts within the range of his
employment, we shall first take up the other reason invoked by the Court of Appeals in
holding petitioner CASTILEX vicariously liable for ABAD's negligence, i.e., that the petitioner
did not present evidence that ABAD was not acting within the scope of his assigned tasks at
the time of the motor vehicle mishap. Contrary to the ruling of the Court of Appeals, it was not
incumbent upon the petitioner to prove the same. It was enough for petitioner CASTILEX to
deny that ABAD was acting within the scope of his duties; petitioner was not under obligation
to prove this negative averment. Ei incumbit probatio qui dicit, non qui negat (He who asserts,
not he who denies, must prove). The Court has consistently applied the ancient rule that if the
plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a
satisfactory manner facts which he bases his claim, the defendant is under no obligation to
prove his exception or defense. 10
Now on the issue of whether the private respondents have sufficiently established that ABAD
was acting within the scope of his assigned tasks. NO
ABAD, who was presented as a hostile witness, testified that at the time of the incident, he
was driving a company-issued vehicle, registered under the name of petitioner. He was then
leaving the restaurant where he had some snacks and had a chat with his friends after having
done overtime work for the petitioner.
No absolutely hard and fast rule can be stated which will furnish the complete answer to the
problem of whether at a given moment, an employee is engaged in his employer's business
in the operation of a motor vehicle, so as to fix liability upon the employer because of the
employee's action or inaction; but rather, the result varies with each state of facts. 11
In Filamer Christian Institute v.  Intermediate Appellant Court, 12 this Court had the occasion to
hold that acts done within the scope of the employee's assigned tasks includes "any act done
by an employee in furtherance of the interests of the employer or for the account of the
employer at the time of the infliction of the injury or damages."
The court a quo and the Court of Appeals were one in holding that the driving by a manager
of a company-issued vehicle is within the scope of his assigned tasks regardless of the time
and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears that he was operating the vehicle within the course
or scope of his employment.
The following are principles in American Jurisprudence on the employer's liability for the
injuries inflicted by the negligence of an employee in the use of an employer's motor vehicle:
I. Operation of Employer's Motor Vehicle in Going to
 or from Meals The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on
the doctrine of respondent superior, not on the principle of bonus pater familias as in ours.
It has been held that an employee who uses his employer's vehicle in going from his work to Whether the fault or negligence of the employee is conclusive on his employer as in
a place where he intends to eat or in returning to work from a meal is not ordinarily acting American law or jurisprudence, or merely gives rise to the presumption  juris tantum of
within the scope of his employment in the absence of evidence of some special business negligence on the part of the employer as in ours, it is indispensable that the employee was
benefit to the employer. Evidence that by using the employer's vehicle to go to and from acting in his employer's business or within the scope of his assigned task. 16
meals, an employee is enabled to reduce his time-off and so devote more time to the
performance of his duties supports the finding that an employee is acting within the scope of In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's
his employment while so driving the vehicle. 13 office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's
Restaurant in Fuente Osmeña, Cebu City, which is about seven kilometers away from
II. Operation of Employer's Vehicle in Going to petitioner's place of business. 17 A witness for the private respondents, a sidewalk vendor,
testified that Fuente Osmeña is a "lively place" even at dawn because Goldie's Restaurant
and Back Street were still open and people were drinking thereat. Moreover, prostitutes,
or from Work
pimps, and drug addicts littered the place. 18
In the same vein, traveling to and from the place of work is ordinarily a personal problem or
At the Goldie's Restaurant, ABAD took some snacks and had a chat with friends. It was when
concern of the employee, and not a part of his services to his employer. Hence, in the
ABAD was leaving the restaurant that the incident in question occurred. That same witness
absence of some special benefit to the employer other than the mere performance of the
for the private respondents testified that at the time of the vehicular accident, ABAD was with
services available at the place where he is needed, the employee is not acting within the
a woman in his car, who then shouted: "Daddy, Daddy!" 19 This woman could not have been
scope of his employment even though he uses his employer's motor vehicle. 14
ABAD's daughter, for ABAD was only 29 years old at the time.
The employer may, however, be liable where he derives some special benefit from having the
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
employee drive home in the employer's vehicle as when the employer benefits from having
personal purpose not in line with his duties at the time he figured in a vehicular accident. It
the employee at work earlier and, presumably, spending more time at his actual duties.
was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD's
Where the employee's duties require him to circulate in a general area with no fixed place or
working day had ended; his overtime work had already been completed. His being at a place
hours of work, or to go to and from his home to various outside places of work, and his
which, as petitioner put it, was known as a "haven for prostitutes, pimps, and drug pushers
employer furnishes him with a vehicle to use in his work, the courts have frequently applied
and addicts," had no connection to petitioner's business; neither had it any relation to his
what has been called the "special errand" or "roving commission" rule, under which it can be
duties as a manager. Rather, using his service vehicle even for personal purposes was a
found that the employee continues in the service of his employer until he actually reaches
form of a fringe benefit or one of the perks attached to his position.
home. However, even if the employee be deemed to be acting within the scope of his
employment in going to or from work in his employer's vehicle, the employer is not liable for
his negligence where at the time of the accident, the employee has left the direct route to his Since there is paucity of evidence that ABAD was acting within the scope of the functions
work or back home and is pursuing a personal errand of his own. entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity
require that petitioner be relieved of vicarious liability for the consequences of the negligence
III. Use of Employer's Vehicle Outside Regular Working Hours
of ABAD in driving its vehicle. 20
An employer who loans his motor vehicle to an employee for the latter's personal use outside
WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the
of regular working hours is generally not liable for the employee's negligent operation of the
Court of Appeals is AFFIRMED with the modification that petitioner Castilex Industrial
vehicle during the period of permissive use, even where the employer contemplates that a
Corporation be absolved of any liability for the damages caused by its employee, Jose
regularly assigned motor vehicle will be used by the employee for personal as well as
Benjamin Abad.
business purposes and there is some incidental benefit to the employer. Even where the
employee's personal purpose in using the vehicle has been accomplished and he has started
the return trip to his house where the vehicle is normally kept, it has been held that he has not SO ORDERED.
resumed his employment, and the employer is not liable for the employee's negligent
operation of the vehicle during the return trip. 15 G.R. No. 128705      June 29, 2001
CONRADO AGUILAR, SR., petitioner,
vs.
COMMERCIAL SAVINGS BANK and FERDINAND BORJA, respondents.
QUISUMBING, J.:
This petition1 seeks to annul and set aside the decision dated October 16, 1996, of the Court
of Appeals in CA-G.R. CV No. 48793, reversing the decision of the Regional Trial Court of
Makati, Branch 59, and dismissing the complaint insofar as respondent Commercial Savings
Bank is concerned.
The facts in this case are uncomplicated.
Petitioner Conrado Aguilar, Sr. is the father of Conrado Aguilar, Jr., the victim in a vehicular
accident involving a Lancer car registered in the name of respondent bank, but driven by co-
respondent Ferdinand G. Borja.
On September 8, 1984, at around 11:15 P.M., Aguilar, Jr. and his companions, among them
Nestor Semella, had just finished their snack at the Uncle Watt’s Bakery along Zapote-
Alabang Road. As they crossed the road, a Lancer with plate no. NNP 349 and driven by
Ferdinand Borja, overtook a passenger jeepney. In so doing, the Lancer hit Aguilar and
Semella. Aguilar was thrown upwards and smashed against the windshield of the Lancer,
which did not stop. Aguilar and Semella were then brought to the Perpetual Help Hospital at
Pamplona, Las Piñas, where Aguilar was pronounced dead on arrival.
On July 29, 1985, petitioner filed a complaint for damages against respondents in the
Regional Trial Court of Makati, Branch 59. Borja did not file his answer within the
reglementary period, hence, he was declared in default by the trial court.
At the trial, respondent bank admitted that the Lancer was registered in its name at the time
of the incident. Petitioner’s counsel also showed that Borja was negligent in driving the car.
On June 14, 1991, the trial court held defendants (herein respondents) liable for Aguilar’s
death, in its decision that reads:
Premises considered, judgment is hereby rendered ordering the defendants, jointly
and severally, to pay to the plaintiff the following:
1. The amount of P18,900.00 representing actual expenses incurred by the plaintiff;
2. The amount of P50,000.00 representing moral damages;
3. The amount of P100,000.00 representing loss of earning capacity of the deceased
victim, Conrado Aguilar, Jr.
4. The sum of P20,000.00 representing attorney’s fees; and
5. With costs against the defendants.
Defendant bank’s counterclaim is ordered DISMISSED for lack of merit.
On the cross-claim of the defendant bank, the cross-defendant Ferdinand Borja is
hereby ordered to pay the cross-claimant Comsavings Bank whatever amount the
latter may have paid or is required to pay to the plaintiff by virtue of this decision.
SO ORDERED.2
The trial court declared that Borja’s negligence, carelessness and imprudence caused the
victim’s death. It also found that Borja was an assistant vice president of respondent bank at
the time of the incident. It held that under Art. 21803 of the Civil Code, the negligence of the
employee is presumed to be that of the employer, whose liability is primary and direct; and
that respondent bank failed to exercise due diligence in the selection of its employees.
Respondent bank appealed to the Court of Appeals.
The Court of Appeals found the appeal meritorious. It said that before it can apply Art. 2180
on which private respondent anchored its claim of the bank’s negligence, petitioner must first
establish that Borja acted on the occasion or by reason of the functions entrusted to him by
his employer. The appellate court found no evidence that Borja had acted as respondent
bank’s assistant vice-president at the time of the mishap. The Court of Appeals reversed the
trial court’s decision, thus:
WHEREFORE, the appealed decision is reversed only insofar as defendant-appellant
bank is concerned. The complaint against it is DISMISSED. No award of damages on
said appellant’s counterclaim.
No costs.1âwphi1.nêt
SO ORDERED.4
Petitioner’s motion for reconsideration was denied. Hence, this petition where petitioner avers
that:
THE COURT OF APPEALS ERRED IN FINDING THAT RESPONDENT
COMSAVINGS IS NOT LIABLE FOR DAMAGES DESPITE THE ESTABLISHED
FACT THAT RESPONDENT COMSAVINGS IS THE REGISTERED OWNER OF
THE CAR THAT HIT AND KILLED PETITIONER’S SON WHICH FINDING,
COUPLED WITH THE DISMISSAL OF THE COMPLAINT AGAINST RESPONDENT
COMSAVINGS, IS CONTRARY TO LAW AND EXISTING JURISPRUDENCE.5
The sole issue is whether or not respondent bank, as the Lancer’s registered owner, is liable
for damages. YES
Petitioner states that the Court of Appeals erred when it disregarded the fact that respondent
bank was the registered owner of the car and concluded that the bank was not liable since
there was "no iota of evidence that Borja was performing his assigned task at the time of the
incident."6 He insists that the existence or absence of employer-employee relationship
between the bank and Borja is immaterial in this case for the registered owner of a motor
vehicle is legally liable for the damages incurred by third persons for injuries sustained in the
operation of said vehicle.
Respondent bank counters that the appellate court’s decision is well supported by law and
jurisprudence. According to respondent bank, under Article 2180 of the Civil Code, when the
negligent employee commits the act outside the actual performance of his assigned tasks or
duties, the employer has no vicarious liability. Further, the bank insists that it is not liable
since at the time of the accident, Borja was driving the Lancer in his private capacity and was
not performing functions in furtherance of the interest of Comsavings Bank. Additionally,
according to the bank, Borja already bought the car on installment basis. Hence, at the time
of the incident, the bank concluded it was no longer the owner of the car.7
We are, however, unimpressed by respondent bank’s disquisition. It goes against established
jurisprudence.
In BA Finance Corporation vs. Court of Appeals, 215 SCRA 715,  we had already held that
the registered owner of any vehicle, even if not for public service, is primarily responsible to
third persons for deaths, injuries and damages it caused. This is true even if the vehicle is
leased to third persons. In that case, petitioner’s Isuzu ten-wheeler truck driven by an
employee of a certain Lino Castro met an accident. Neither the driver nor Lino Castro was
connected to petitioner, for at the time of the incident, the truck was on lease to Rock
Component Philippines, Inc. The Court held petitioner liable as the truck’s registered owner,
despite the absence of employer-employee relationship between petitioner and the driver.
Though petitioner in said case had a right of reimbursement against Rock Component for the
total amount of its liability, the Court per Melo, J. made clear petitioner remained legally
responsible to the victim of vehicular mishap on the basis of jurisprudential dogmas.
As early as Erezo vs. Jepte, 102 Phil. 103, the Court through Labrador, J. had synthesized
the rationale for holding the registered owner of a vehicle directly liable. There we said:
Registration is required not to make said registration the operative act by which
ownership in vehicles is transferred, as in land registration cases, because the
administrative proceeding of registration does not bear any essential relation to the
contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil.
888), but to permit the use and operation of the vehicle upon any public highway
(section 5 [a], Act No. 3992, as amended.) The main aim of motor vehicle registration
is to identify the owner so that if any accident happens, or that any damage or injury
is caused by the vehicle on the public highways, responsibility therefor can be fixed
on a definite individual, the registered owner. Instances are numerous where vehicles
running on public highways caused accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or with very scant
means of identification. It is to forestall these circumstances, so inconvenient or
prejudicial to the public, that the motor vehicle registration is primarily ordained, in the
interest of the determination of persons responsible for damages or injuries caused
on public highways.
"‘One of the principal purposes of motor vehicles legislation is identification of
the vehicle and of the operator, in case of accident; and another is that the
knowledge that means of detection are always available may act as a
deterrent from lax observance of the law and of the rules of conservative and
safe operation. Whatever purpose there may be in these statutes, it is
subordinate at the last to the primary purpose of rendering it certain that the
violator of the law or of the rules of safety shall not escape because of lack of
means to discover him.’ The purpose of the statute is thwarted, and the
displayed number becomes a ‘snare and delusion,’ if courts would entertain
such defenses as that put forward by appellee in this case. No responsible
person or corporation could be held liable for the most outrageous acts of
negligence, if they should be allowed to place a ‘middleman’ between them
and the public, and escape liability by the manner in which they recompense
their servants." (King vs. Brenham Automobile Co., 145 S.W. 278, 279.)
With the above policy in mind, the question that defendant-appellant poses is: should
not the registered owner be allowed at the trial to prove who the actual and real
owner is, and in accordance with such proof escape or evade responsibility and lay
the same on the person actually owning the vehicle? We hold with the trial court that
the law does not allow him to do so; the law, with its aim and policy in mind, does not
relieve him directly of the responsibility that the law fixes and places upon him as an
incident or consequence of registration. Were a registered owner allowed to evade
responsibility by proving who the supposed transferee or owner is, it would be easy
for him, by collusion with others or otherwise, to escape said responsibility and
transfer the same to an indefinite person, or to one who possesses no property with
which to respond financially for the damage or injury done. A victim of recklessness
on the public highways is usually without means to discover or identify the person
actually causing the injury or damage. He has no means other than by a recourse to
the registration in the Motor Vehicles Office to determine who is the owner. The
protection that the law aims to extend to him would become illusory were the
registered owner given the opportunity to escape liability by disproving his ownership.
If the policy of the law is to be enforced and carried out, the registered owner should
not be allowed to prove the contrary to the prejudice of the person injured, that is, to
prove that a third person or another has become the owner, so that he may thereby
be relieved of the responsibility to the injured person.
 The above policy and application of the law may appear quite harsh and would seem
to conflict with truth and justice. We do not think it is so. A registered owner who has
already sold or transferred a vehicle has the recourse to a third-party complaint, in
the same action brought against him to recover for the damage or injury done,
against the vendee or transferee of the vehicle. The inconvenience of the suit is no
justification for relieving him of liability; said inconvenience is the price he pays for
failure to comply with the registration that the law demands and requires.
In synthesis, we hold that the registered owner, the defendant-appellant herein, is
primarily responsible for the damage caused to the vehicle of the plaintiff-appellee,
but he (defendant-appellant) has a right to be indemnified by the real or actual owner
of the amount that he may be required to pay as damage for the injury caused to the
plaintiff-appellant.8
The rationale well postulated in Erezo applies in the present case. Thus far no change in
jurisprudence has been brought to our attention. In our view, respondent bank, as the
registered owner of the vehicle, is primarily liable for Aguilar, Jr.’s death. The Court of
Appeals erred when it concluded that the bank was not liable simply because (a) petitioner
did not prove that Borja was acting as the bank’s vice president at the time of the accident;
and (b) Borja had, according to respondent bank, already bought the car at the time of the
mishap. For as long as the respondent bank remained the registered owner of the car
involved in the vehicular accident, it could not escape primary liability for the death of
petitioner’s son.
WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals
dated October 16, 1996 in CA-G.R. CV No. 48793 is REVERSED. The judgment of the
Regional Trial Court of Makati, Branch 59 in Civil Case No. 11231 is UPHELD. Costs against
respondent bank.
SO ORDERED.
G.R. No. 174156               June 20, 2012
FILCAR TRANSPORT SERVICES, Petitioner,
vs.
JOSE A. ESPINAS, Respondent.
DECISION
BRION, J.:
We resolve the present petition for review on certiorari1 filed by petitioner Filcar Transport
Services (Filcar), challenging the decision2 and the resolution3 of the Court of Appeals (CA) in
CA-G.R. SP No. 86603.
The facts of the case, gathered from the records, are briefly summarized below.
On November 22, 1998, at around 6:30 p.m., respondent Jose A. Espinas was driving his car
along Leon Guinto Street in Manila. Upon reaching the intersection of Leon Guinto and
President Quirino Streets, Espinas stopped his car. When the signal light turned green, he
proceeded to cross the intersection. He was already in the middle of the intersection when
another car, traversing President Quirino Street and going to Roxas Boulevard, suddenly hit
and bumped his car. As a result of the impact, Espinas’ car turned clockwise. The other car
escaped from the scene of the incident, but Espinas was able to get its plate number.
After verifying with the Land Transportation Office, Espinas learned that the owner of the
other car, with plate number UCF-545, is Filcar.
Espinas sent several letters to Filcar and to its President and General Manager Carmen Flor,
demanding payment for the damages sustained by his car. On May 31, 2001, Espinas filed a
complaint for damages against Filcar and Carmen Flor before the Metropolitan Trial Court
(MeTC) of Manila, and the case was raffled to Branch 13. In the complaint, Espinas
demanded that Filcar and Carmen Flor pay the amount of ₱97,910.00, representing actual
damages sustained by his car.
Filcar argued that while it is the registered owner of the car that hit and bumped Espinas’ car,
the car was assigned to its Corporate Secretary Atty. Candido Flor, the husband of Carmen
Flor. Filcar further stated that when the incident happened, the car was being driven by Atty.
Flor’s personal driver, Timoteo Floresca.
Atty. Flor, for his part, alleged that when the incident occurred, he was attending a birthday
celebration at a nearby hotel, and it was only later that night when he noticed a small dent on
and the cracked signal light of the car. On seeing the dent and the crack, Atty. Flor allegedly
asked Floresca what happened, and the driver replied that it was a result of a "hit and run"
while the car was parked in front of Bogota on Pedro Gil Avenue, Manila.
Filcar denied any liability to Espinas and claimed that the incident was not due to its fault or
negligence since Floresca was not its employee but that of Atty. Flor. Filcar and Carmen Flor
both said that they always exercised the due diligence required of a good father of a family in
leasing or assigning their vehicles to third parties.
The MeTC Decision
The MeTC, in its decision dated January 20, 2004, 4 ruled in favor of Espinas, and ordered
Filcar and Carmen Flor, jointly and severally, to pay Espinas ₱97,910.00 as actual damages,
representing the cost of repair, with interest at 6% per annum from the date the complaint
was filed; ₱50,000.00 as moral damages; ₱20,000.00 as exemplary damages; and
₱20,000.00 as attorney’s fees. The MeTC ruled that Filcar, as the registered owner of the
vehicle, is primarily responsible for damages resulting from the vehicle’s operation.
The RTC Decision
The Regional Trial Court (RTC) of Manila, Branch 20, in the exercise of its appellate
jurisdiction, affirmed the MeTC decision.5 The RTC ruled that Filcar failed to prove that
Floresca was not its employee as no proof was adduced that Floresca was personally hired
by Atty. Flor. The RTC agreed with the MeTC that the registered owner of a vehicle is directly
and primarily liable for the damages sustained by third persons as a consequence of the
negligent or careless operation of a vehicle registered in its name. The RTC added that the
victim of recklessness on the public highways is without means to discover or identify the
person actually causing the injury or damage. Thus, the only recourse is to determine the
owner, through the vehicle’s registration, and to hold him responsible for the damages.
The CA Decision
On appeal, the CA partly granted the petition in CA-G.R. SP No. 86603; it modified the RTC
decision by ruling that Carmen Flor, President and General Manager of Filcar, is not
personally liable to Espinas. The appellate court pointed out that, subject to recognized
exceptions, the liability of a corporation is not the liability of its corporate officers because a
corporate entity – subject to well-recognized exceptions – has a separate and distinct
personality from its officers and shareholders. Since the circumstances in the case at bar do
not fall under the exceptions recognized by law, the CA concluded that the liability for
damages cannot attach to Carmen Flor.
The CA, however, affirmed the liability of Filcar to pay Espinas damages. According to the
CA, even assuming that there had been no employer-employee relationship between Filcar
and the driver of the vehicle, Floresca, the former can be held liable under the registered
owner rule.
The CA relied on the rule that the registered owner of a vehicle is directly and primarily
responsible to the public and to third persons while the vehicle is being operated. Citing
Erezo, et al. v. Jepte,6 the CA said that the rationale behind the rule is to avoid circumstances
where vehicles running on public highways cause accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or with very scant means of
identification. In Erezo, the Court said that the main aim of motor vehicle registration is to
identify the owner, so that if a vehicle causes damage or injury to pedestrians or other
vehicles, responsibility can be traced to a definite individual and that individual is the
registered owner of the vehicle.7
The CA did not accept Filcar’s argument that it cannot be held liable for damages because
the driver of the vehicle was not its employee. In so ruling, the CA cited the case of
Villanueva v. Domingo8 where the Court said that the question of whether the driver was
authorized by the actual owner is irrelevant in determining the primary and direct
responsibility of the registered owner of a vehicle for accidents, injuries and deaths caused by
the operation of his vehicle.
Filcar filed a motion for reconsideration which the CA denied in its Resolution dated July 6,
2006.
Hence, the present petition.
The Issue
Simply stated, the issue for the consideration of this Court is: whether Filcar, as registered
owner of the motor vehicle which figured in an accident, may be held liable for the damages
caused to Espinas.
Our Ruling
The petition is without merit.
Filcar, as registered owner, is deemed the employer of the driver, Floresca, and is thus
vicariously liable under Article 2176 in relation with Article 2180 of the Civil Code
It is undisputed that Filcar is the registered owner of the motor vehicle which hit and caused
damage to Espinas’ car; and it is on the basis of this fact that we hold Filcar primarily and
directly liable to Espinas for damages.
As a general rule, one is only responsible for his own act or omission.9 Thus, a person will
generally be held liable only for the torts committed by himself and not by another. This
general rule is laid down in Article 2176 of the Civil Code, which provides to wit:
Article 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.
Based on the above-cited article, the obligation to indemnify another for damage caused by
one’s act or omission is imposed upon the tortfeasor himself, i.e., the person who committed
the negligent act or omission. The law, however, provides for exceptions when it makes
certain persons liable for the act or omission of another.
One exception is an employer who is made vicariously liable for the tort committed by his
employee. Article 2180 of the Civil Code states:
Article 2180. The obligation 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.
xxxx
Employers shall be liable for the damages caused by their employees and household helpers primarily responsible for the consequences of its operation."12 The Court further stated that
acting within the scope of their assigned tasks, even though the former are not engaged in "[i]n contemplation of law, the owner/operator of record is the employer of the driver, the
any business or industry. actual operator and employer being considered as merely its agent."13 Thus, Equitable, as the
registered owner of the tractor, was considered under the law on quasi delict to be the
xxxx employer of the driver, Raul Tutor; Ecatine, Tutor’s actual employer, was deemed merely as
an agent of Equitable.
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. Thus, it is clear that for the purpose of holding the registered owner of the motor vehicle
primarily and directly liable for damages under Article 2176, in relation with Article 2180, of
the Civil Code, the existence of an employer-employee relationship, as it is understood in
Under Article 2176, in relation with Article 2180, of the Civil Code, an action predicated on an
labor relations law, is not required. It is sufficient to establish that Filcar is the registered
employee’s act or omission may be instituted against the employer who is held liable for the
owner of the motor vehicle causing damage in order that it may be held vicariously liable
negligent act or omission committed by his employee.
under Article 2180 of the Civil Code.
Although the employer is not the actual tortfeasor, the law makes him vicariously liable on the
Rationale for holding the registered owner vicariously liable
basis of the civil law principle of pater familias for failure to exercise due care and vigilance
over the acts of one’s subordinates to prevent damage to another. 10 In the last paragraph of
Article 2180 of the Civil Code, the employer may invoke the defense that he observed all the The rationale for the rule that a registered owner is vicariously liable for damages caused by
diligence of a good father of a family to prevent damage. the operation of his motor vehicle is explained by the principle behind motor vehicle
registration, which has been discussed by this Court in Erezo, and cited by the CA in its
decision:
As its core defense, Filcar contends that Article 2176, in relation with Article 2180, of the Civil
Code is inapplicable because it presupposes the existence of an employer-employee
relationship. According to Filcar, it cannot be held liable under the subject provisions because The main aim of motor vehicle registration is to identify the owner so that if any accident
the driver of its vehicle at the time of the accident, Floresca, is not its employee but that of its happens, or that any damage or injury is caused by the vehicle on the public highways,
Corporate Secretary, Atty. Flor. responsibility therefor can be fixed on a definite individual, the registered owner. Instances
are numerous where vehicles running on public highways caused accidents or injuries to
pedestrians or other vehicles without positive identification of the owner or drivers, or with
We cannot agree. It is well settled that in case of motor vehicle mishaps, the registered owner
very scant means of identification. It is to forestall these circumstances, so inconvenient or
of the motor vehicle is considered as the employer of the tortfeasor-driver, and is made
prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest
primarily liable for the tort committed by the latter under Article 2176, in relation with Article
of the determination of persons responsible for damages or injuries caused on public
2180, of the Civil Code.
highways. [emphasis ours]
In Equitable Leasing Corporation v. Suyom,11 we ruled that in so far as third persons are
Thus, whether there is an employer-employee relationship between the registered owner and
concerned, the registered owner of the motor vehicle is the employer of the negligent driver,
the driver is irrelevant in determining the liability of the registered owner who the law holds
and the actual employer is considered merely as an agent of such owner.
primarily and directly responsible for any accident, injury or death caused by the operation of
the vehicle in the streets and highways.
In that case, a tractor registered in the name of Equitable Leasing Corporation (Equitable)
figured in an accident, killing and seriously injuring several persons. As part of its defense,
As explained by this Court in Erezo, the general public policy involved in motor vehicle
Equitable claimed that the tractor was initially leased to Mr. Edwin Lim under a Lease
registration is the protection of innocent third persons who may have no means of identifying
Agreement, which agreement has been overtaken by a Deed of Sale entered into by
public road malefactors and, therefore, would find it difficult – if not impossible – to seek
Equitable and Ecatine Corporation (Ecatine). Equitable argued that it cannot be held liable for
redress for damages they may sustain in accidents resulting in deaths, injuries and other
damages because the tractor had already been sold to Ecatine at the time of the accident
damages; by fixing the person held primarily and directly liable for the damages sustained by
and the negligent driver was not its employee but of Ecatine.
victims of road mishaps, the law ensures that relief will always be available to them.
In upholding the liability of Equitable, as registered owner of the tractor, this Court said that
To identify the person primarily and directly responsible for the damages would also prevent a
"regardless of sales made of a motor vehicle, the registered owner is the lawful operator
situation where a registered owner of a motor vehicle can easily escape liability by passing on
insofar as the public and third persons are concerned; consequently, it is directly and
the blame to another who may have no means to answer for the damages caused, thereby
defeating the claims of victims of road accidents. We take note that some motor vehicles
running on our roads are driven not by their registered owners, but by employed drivers who,
in most instances, do not have the financial means to pay for the damages caused in case of
accidents.
These same principles apply by analogy to the case at bar. Filcar should not be permitted to
evade its liability for damages by conveniently passing on the blame to another party; in this
case, its Corporate Secretary, Atty. Flor and his alleged driver, Floresca. Following our
reasoning in Equitable, the agreement between Filcar and Atty. Flor to assign the motor
vehicle to the latter does not bind Espinas who was not a party to and has no knowledge of
the agreement, and whose only recourse is to the motor vehicle registration.
Neither can Filcar use the defenses available under Article 2180 of the Civil Code - that the
employee acts beyond the scope of his assigned task or that it exercised the due diligence of
a good father of a family to prevent damage - because the motor vehicle registration law, to a
certain extent, modified Article 2180 of the Civil Code by making these defenses unavailable
to the registered owner of the motor vehicle.1awp++i1 Thus, for as long as Filcar is the
registered owner of the car involved in the vehicular accident, it could not escape primary
liability for the damages caused to Espinas.
The public interest involved in this case must not be underestimated. Road safety is one of
the most common problems that must be addressed in this country. We are not unaware of
news of road accidents involving reckless drivers victimizing our citizens. Just recently, such
pervasive recklessness among most drivers took the life of a professor of our state
university.14 What is most disturbing is that our existing laws do not seem to deter these road
malefactors from committing acts of recklessness.
We understand that the solution to the problem does not stop with legislation. An effective
administration and enforcement of the laws must be ensured to reinforce discipline among
drivers and to remind owners of motor vehicles to exercise due diligence and vigilance over
the acts of their drivers to prevent damage to others.
Thus, whether the driver of the motor vehicle, Floresca, is an employee of Filcar is irrelevant
in arriving at the conclusion that Filcar is primarily and directly liable for the damages
sustained by Espinas. While Republic Act No. 4136 or the Land Transportation and Traffic
Code does not contain any provision on the liability of registered owners in case of motor
vehicle mishaps, Article 2176, in relation with Article 2180, of the Civil Code imposes an
obligation upon Filcar, as registered owner, to answer for the damages caused to Espinas’
car. This interpretation is consistent with the strong public policy of maintaining road safety,
thereby reinforcing the aim of the State to promote the responsible operation of motor
vehicles by its citizens.
FILCAR’S REMEDY
This does not mean, however, that Filcar is left without any recourse against the actual
employer of the driver and the driver himself. Under the civil law principle of unjust
enrichment, the registered owner of the motor vehicle has a right to be indemnified by the
actual employer of the driver of the amount that he may be required to pay as damages for
the injury caused to another.
The set-up may be inconvenient for the registered owner of the motor vehicle, but the
inconvenience cannot outweigh the more important public policy being advanced by the law
in this case which is the protection of innocent persons who may be victims of reckless
drivers and irresponsible motor vehicle owners.
WHEREFORE, the petition is DENIED. The decision dated February 16, 2006 and the
resolution dated July 6, 2006 of the Court of Appeals are AFFIRMED. Costs against petitioner
Filcar Transport Services.
SO ORDERED.
G.R. No. 170631, February 10, 2016
CARAVAN TRAVEL AND TOURS INTERNATIONAL, INC., Petitioner, v. ERMILINDA R.
ABEJAR, Respondent.
DECISION
LEONEN, J.:
The plaintiff may first prove the employer's ownership of the vehicle involved in a mishap by
presenting the vehicle's registration in evidence. Thereafter, a disputable presumption that
the requirements for an employer's liability under Article 21801 of the Civil Code have been
satisfied will arise. The burden of evidence then shifts to the defendant to show that no
liability under Article 2180 has ensued. This case, thus, harmonizes the requirements of
Article 2180, in relation to Article 21762 of the Civil Code, and the so-called registered-owner
rule as established in this court's rulings in Aguilar, Sr. v. Commercial Savings Bank,3Del
Carmen, Jr. v. Bacoy,4Filcar Transport Services v. Espinas,5 and Mendoza v. Spouses
Gomez.6
Through this Petition for Review on Certiorari,7 Caravel Travel and Tours International, Inc.
(Caravan) prays that the Decision8 dated October 3, 2005 and the Resolution9 dated
November 29, 2005 of the Court of Appeals Twelfth Division be reversed and set aside.10
On July 13, 2000, Jesmariane R. Reyes (Reyes) was walking along the west-bound lane of
Sampaguita Street, United Parañaque Subdivision IV, Parañaque City.11 A Mitsubishi L-300
van with plate number PKM 19512 was travelling along the east-bound lane, opposite
Reyes.13 To avoid an incoming vehicle, the van swerved to its left and hit Reyes.14 Alex
Espinosa (Espinosa), a witness to the accident, went to her aid and loaded her in the back of
the van.15 Espinosa told the driver of the van, Jimmy Bautista (Bautista), to bring Reyes to the Decision and October 20, 2003 Order, as follows:
hospital.16 Instead of doing so, Bautista appeared to have left the van parked inside a nearby chanRoblesvirtualLawlibrary
subdivision with Reyes still in the van.17 Fortunately for Reyes, an unidentified civilian came to WHEREFORE, premises considered, the instant appeal is DENIED for lack of merit. The
help and drove Reyes to the hospital.18 assailed Decision dated 31 July 2003 and Order dated 20 October 2003 of the Regional Trial
Court, City of Para[ñ]aque, Branch 258, in Civil Case No. 00-0447 are AFFIRMED with the
Upon investigation, it was found that the registered owner of the van was Caravan.19 Caravan following MODIFICATIONS:
is a corporation engaged in the business of organizing travels and tours.20 Bautista was
Caravan's employee assigned to drive the van as its service driver.21 1. Moral Damages is REDUCED to Php 200,000.00;

Caravan shouldered the hospitalization expenses of Reyes.22 Despite medical attendance, 2. Death Indemnity of Php 50,000.00 is awarded;
Reyes died two (2) days after the accident.23
3. The Php 35,000.00 actual damages, Php 200,000.00 moral damages, Php
Respondent Ermilinda R. Abejar (Abejar), Reyes' paternal aunt and the person who raised 30,000.00 exemplary damages and Php 50,000.00 attorney's fees shall earn
her since she was nine (9) years old,24 filed before the Regional Trial Court of Parañaque a interest at the rate of 6% per annum computed from 31 July 2003, the date of
Complaint25 for damages against Bautista and Caravan. In her Complaint, Abejar alleged that the [Regional Trial Court's] decision; and upon finality of this Decision, all the
Bautista was an employee of Caravan and that Caravan is the registered owner of the van amounts due shall earn interest at the rate of 12% per annum, in lieu of
that hit Reyes.26 6% per annum, until full payment; and
Summons could not be served on Bautista.27 Thus, Abejar moved to drop Bautista as a 4. The Php 50,000.00 death indemnity shall earn interest at the rate of 6% per
defendant.28 The Regional Trial Court granted her Motion.29 annum computed from the date of promulgation of this Decision; and upon
finality of this Decision, the amount due shall earn interest at the rate of
After trial, the Regional Trial Court found that Bautista was grossly negligent in driving the 12% per annum, in lieu of 6% per annum, until full payment.
vehicle.30 It awarded damages in favor of Abejar, as follows:
chanRoblesvirtualLawlibrary
Costs against [Caravan].
WHEREFORE, considering that the [respondent] was able to provide by preponderance of SO ORDERED.34ChanRoblesVirtualawlibrary
evidence her cause of action against the defendants, judgment is hereby rendered ordering
defendants JIMMY BAUTISTA and CARAVAN TRAVEL and TOURS[,] INC., to jointly and Caravan filed a Motion for Reconsideration, but it was denied in the Court of Appeals'
solidarity pay the plaintiff, the following, to wit: assailed November 29, 2005 Resolution.35
chanRoblesvirtualLawlibrary
1. The amount of P35,000.00 representing actual damages; Hence, this Petition was filed.

2. The amount of P300,000.00 as moral damages; Caravan argues that Abejar has no personality to bring this suit because she is not a real
party in interest. According to Caravan, Abejar does not exercise legal or substitute parental
3. The amount of P30,000.00 as exemplary damages; authority. She is also not the judicially appointed guardian or the only living relative of the
deceased.36 She is also not "the executor or administrator of the estate of the
4. The amount of P50,000.00 as and by way of attorney's fees; and deceased."37 According to Caravan, only the victim herself or her heirs can enforce an action
based on culpa aquiliana such as Abejar's action for damages.38
5. The cost of suit.
Caravan adds that Abejar offered no documentary or testimonial evidence to prove that
SO ORDERED.31ChanRoblesVirtualawlibrary Bautista, the driver, acted "within the scope of his assigned tasks" 39 when the accident
Caravan's Motion for Reconsideration32 was denied through the October 20, 2003 Order33 of occurred.40 According to Caravan, Bautista's tasks only pertained to the transport of company
the Regional Trial Court. personnel or products, and when the accident occurred, he had not been transporting
personnel or delivering products of and for the company.41
The Court of Appeals affirmed with modification the Regional Trial Court's July 31, 2003
Caravan also argues that "it exercised the diligence of a good father of a family in the
selection and supervision of its employees."42 Rule 3, Section 2 of the 1997 Rules of Civil Procedure defines a real party in interest:
chanRoblesvirtualLawlibrary
Caravan further claims that Abejar should not have been awarded moral damages, actual RULE 3. Parties to Civil Actions
damages, death indemnity, exemplary damages, and attorney's fees.43 It questions the
Certificate provided by Abejar as proof of expenses since its signatory, a certain Julian . . . .
Peñaloza (Peñaloza), was not presented in court, and Caravan was denied the right to cross-
examine him.44 Caravan argues that the statements in the Certification constitute hearsay. 45 It SECTION 2. Parties in Interest. — A real party in interest is the party who stands to be
also contends that based on Article 2206(3)46 of the Civil Code, Abejar is not entitled to moral benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.
damages.47 It insists that moral and exemplary damages should not have been awarded to Unless otherwise authorized by law or these Rules, every action must be prosecuted or
Abejar because Caravan acted in good faith.48 Considering that moral and exemplary defended in the name of the real party in interest.
damages are unwarranted, Caravan claims that the award of attorney's fees should have also "To qualify a person to be a real party in interest in whose name an action must be
been removed.49 prosecuted, he [or she] must appear to be the present real owner of the right sought to be
enforced."55 Respondent's capacity to file a complaint against petitioner stems from her
Lastly, Caravan argues that it should not be held solidarily liable with Bautista since Bautista having exercised substitute parental authority over Reyes.
was already dropped as a party.50
Article 216 of the Family Code identifies the persons who exercise substitute parental
Abejar counters that Caravan failed to provide proof that it exercised the requisite diligence in authority:
the selection and supervision of Bautista.51 She adds that the Court of Appeals' ruling that chanRoblesvirtualLawlibrary
Caravan is solidarily liable with Bautista for moral damages, exemplary damages, civil Art. 216. In default of parents or a judicially appointed guardian, the following persons shall
indemnity ex delicto, and attorney's fees should be upheld.52 Abejar argues that since exercise substitute parental authority over the child in the order indicated:
Caravan is the registered owner of the van, it is directly, primarily, and solidarity liable for the
tortious acts of its driver.53 (1) The surviving grandparent, as provided in Art. 214;56
For resolution are the following issues: (2) The oldest brother or sister, over twenty-one years of age, unless unfit or disqualified; and
First, whether respondent Ermilinda R. Abejar is a real party in interest who may bring an (3) The child's actual custodian, over twenty-one years of age, unless unfit or disqualified.
action for damages against petitioner Caravan Travel and Tours International, Inc. on account
of Jesmariane R. Reyes' death; and Whenever the appointment or a judicial guardian over the property of the child becomes
necessary, the same order of preference shall be observed. (Emphasis supplied)
Second, whether petitioner should be held liable as an employer, pursuant to Article 2180 of
the Civil Code. Article 233 of the Family Code provides for the extent of authority of persons exercising
substitute parental authority, that is, the same as those of actual parents:
We deny the Petition. chanRoblesvirtualLawlibrary
Art. 233. The person exercising substitute parental authority shall have the same authority
I over the person of the child as the parents. (Emphasis supplied)
Both of Reyes' parents are already deceased.57 Reyes' paternal grandparents are also both
Having exercised substitute parental authority, respondent suffered actual loss and is, thus, a deceased.58 The whereabouts of Reyes' maternal grandparents are unknown. 59 There is also
real party in interest in this case. no record that Reyes has brothers or sisters. It was under these circumstances that
respondent took custody of Reyes when she was a child, assumed the role of Reyes' parents,
In her Complaint, respondent made allegations that would sustain her action for damages: and thus, exercised substitute parental authority over her.60 As Reyes' custodian, respondent
that she exercised substitute parental authority over Reyes; that Reyes' death was caused by exercised the full extent of the statutorily recognized rights and duties of a parent. Consistent
the negligence of petitioner and its driver; and that Reyes' death caused her with Article 22061 of the Family Code, respondent supported Reyes' education62 and provided
damage.54 Respondent properly filed an action based on quasi-delict. She is a real party in for her personal needs.63 To echo respondent's words in her Complaint, she treated Reyes as
interest. if she were her own daughter.64

Respondent's right to proceed against petitioner, therefore, is based on two grounds.

 of the victim, may recover damages from the person responsible therefor[.]75 (Emphasis
First, respondent suffered actual personal loss. With her affinity for Reyes, it stands to reason supplied, citations omitted)
that when Reyes died, respondent suffered the same anguish that a natural parent would II
have felt upon the loss of one's child. It is for this injury — as authentic and personal as that
of a natural parent — that respondent seeks to be indemnified. Respondent's Complaint is anchored on an employer's liability for quasi-delict provided in
Article 2180, in relation to Article 2176 of the Civil Code. Articles 2176 and 2180 read:
Second, respondent is capacitated to do what Reyes' actual parents would have been chanRoblesvirtualLawlibrary
capacitated to do. ARTICLE 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
In Metro Manila Transit Corporation v. Court of Appeals,65Tapdasan, Jr. v. pre-existing contractual relation between the parties, is called a quasi-delict and is governed
People,66 and Aguilar, Sr. v. Commercial Savings Bank,67 this court allowed natural parents of by the provisions of this Chapter.
victims to recover damages for the death of their children. Inasmuch as persons exercising
substitute parental authority have the full range of competencies of a child's actual parents, . . . . .
nothing prevents persons exercising substitute parental authority from similarly possessing
the right to be indemnified for their ward's death. ARTICLE 2180. The obligation 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.
We note that Reyes was already 18 years old when she died. Having reached the age of
majority, she was already emancipated upon her death. While parental authority is terminated The father and, in case of his death or incapacity, the mother, are responsible for the
upon emancipation,68 respondent continued to support and care for Reyes even after she damages caused by the minor children who live in their company.
turned 18.69 Except for the legal technicality of Reyes' emancipation, her relationship with
respondent remained the same. The anguish and damage caused to respondent by Reyes' Guardians are liable for damages caused by the minors or incapacitated persons who are
death was no different because of Reyes' emancipation. under their authority and live in their company.
In any case, the termination of respondent's parental authority is not an insurmountable legal The owners and managers of an establishment or enterprise are likewise responsible for
bar that precludes the filing of her Complaint. In interpreting Article 190270 of the old Civil damages caused by their employees in the service of the branches in which the latter are
Code, which is substantially similar to the first sentence of Article 217671 of the Civil Code, employed or on the occasion of their functions.
this court in The Receiver For North Negros Sugar Company, Inc. v. Ybañez, et al. 72 ruled
that brothers and sisters may recover damages, except moral damages, for the death of their Employers shall be liable for the damages caused by their employees and household helpers
sibling.73 This court declared that Article 1902 of the old Civil Code (now Article 2176) is acting within the scope of their assigned tasks, even though the former are not engaged in
broad enough to accommodate even plaintiffs who are not relatives of the deceased, thus:74 any business or industry.
This Court said: "Article 1902 of the Civil Code declares that any person who by an act or
omission, characterized by fault or negligence, causes damage to another shall be liable for The State is responsible in like manner when it acts through a special agent; but not when the
the damage done ... a person is liable for damage done to another by any culpable act; and damage has been caused by the official to whom the task done properly pertains, in which
by any culpable act is meant any act which is blameworthy when judged by accepted legal case what is provided in article 2176 shall be applicable.
standards. The idea thus expressed is undoubtedly broad enough to include any rational
conception of liability for the tortious acts likely to be developed in any society." The word Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
"damage" in said article, comprehending as it does all that are embraced in its meaning, caused by their pupils and students or apprentices, so long as they remain in their custody.
includes any and all damages that a human being may suffer in any and all the
manifestations of his life: physical or material, moral or psychological, mental or spiritual, The responsibility treated of in this article shall cease when the persons herein mentioned
financial, economic, social, political, and religious. prove that they observed all the diligence of a good father of a family to prevent damage.
(Emphasis supplied)
It is particularly noticeable that Article 1902 stresses the passive subject of the obligation to
pay damages caused by his fault or negligence. The article does not limit or specify the Contrary to petitioner's position, it was not fatal to respondent's cause that she herself did not
active subjects, much less the relation that must exist between the victim of the culpa adduce proof that Bautista acted within the scope of his authority. It was sufficient that Abejar
aquiliana and the person who may recover damages, thus warranting the inference that, in proved that petitioner was the registered owner of the van that hit Reyes.
principle, anybody who suffers any damage from culpa aquiliana,  whether a relative or not
The resolution of this case must consider two (2) rules. First, Article 2180's specification that
"[e]mployers shall be liable for the damages caused by their employees . . . acting within the
scope of their assigned tasks[.]" Second, the operation of the registered-owner rule that Since there is paucity of evidence that ABAD was acting within the scope of the functions
registered owners are liable for death or injuries caused by the operation of their vehicles. 76 entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity
These rules appear to be in conflict when it comes to cases in which the employer is also the require that petitioner be relieved of vicarious liability for the consequences of the negligence
registered owner of a vehicle. Article 2180 requires proof of two things: first, an employment of ABAD in driving its vehicle. (Emphasis supplied, citations
relationship between the driver and the owner; and second, that the driver acted within the omitted)87ChanRoblesVirtualawlibrary
scope of his or her assigned tasks. On the other hand, applying the registered-owner rule Aguilar, Sr. v. Commercial Savings Bank recognized the seeming conflict between Article
only requires the plaintiff to prove that the defendant-employer is the registered owner of the 2180 and the registered-owner rule and applied the latter.88
vehicle.
In Aguilar, Sr., a Mitsubishi Lancer, registered in the name of Commercial Savings Bank and
The registered-owner rule was articulated as early as 1957 in Erezo, et al. v. Jepte,77 where driven by the bank's assistant vice-president Ferdinand Borja, hit Conrado Aguilar, Jr. The
this court explained that the registration of motor vehicles, as required by Section 5(a)78 of impact killed Conrado Aguilar, Jr. His father, Conrado Aguilar, Sr. filed a case for damages
Republic Act No. 4136, the Land Transportation and Traffic Code, was necessary "not to against Ferdinand Borja and Commercial Savings Bank. The Regional Trial Court found
make said registration the operative act by which ownership in vehicles is transferred, . . . but Commercial Savings Bank solidarity liable with Ferdinand Borja.89
to permit the use and operation of the vehicle upon any public highway[.]"79 Its "main aim . . .
is to identify the owner so that if any accident happens, or that any damage or injury is However, the Court of Appeals disagreed with the trial court's Decision and dismissed the
caused by the vehicle on the public highways, responsibility therefor can be fixed on a complaint against the bank. The Court of Appeals reasoned that Article 2180 requires the
definite individual, the registered owner."80 plaintiff to prove that at the time of the accident, the employee was acting within the scope of
his or her assigned tasks. The Court of Appeals found no evidence that Ferdinand Borja was
Erezo notwithstanding, Castilex Industrial Corporation v. Vasquez, Jr. 81 relied on Article 2180 acting as the bank's assistant vice-president at the time of the accident.90
of the Civil Code even though the employer was also the registered owner of the
vehicle.82 The registered-owner rule was not mentioned. The Court of Appeals' ruling was reversed by this court.91Aguilar, Sr. reiterated the following
pronouncements made in Erezo in ruling that the bank, as the registered owner of the
In Castilex, Benjamin Abad (Abad) was a manager of Castilex Industrial Corporation vehicle, was primarily liable to the plaintiff:92
(Castilex). Castilex was also the registered owner of a Toyota Hi-Lux pick-up truck. While The main aim of motor vehicle registration is to identify the owner so that if any accident
Abad was driving the pick-up truck, it collided with a motorcycle driven by Romeo Vasquez happens, or that any damage or injury is caused by the vehicle on the public highways,
(Vasquez). Vasquez died a few days after. Vasquez's parents filed a case for damages responsibility therefor can be fixed on a definite individual, the registered owner....
against Abad and Castilex.83 Castilex denied liability, arguing that Abad was acting in his
private capacity at the time of the accident.84 ....
This court absolved Castilex of liability, reasoning that it was incumbent upon the plaintiff to A victim of recklessness on the public highways is usually without means to discover or
prove that the negligent employee was acting within the scope of his assigned identify the person actually causing the injury or damage. He has no means other than by a
tasks.85 Vasquez's parents failed to prove this.86 This court outlined the process necessary for recourse to the registration in the Motor Vehicles Office to determine who is the owner. The
an employer to be held liable for the acts of its employees and applied the process to the protection that the law aims to extend to him would become illusory were the registered
case: owner given the opportunity to escape liability by disproving his
chanRoblesvirtualLawlibrary ownership.93ChanRoblesVirtualawlibrary
Under the fifth paragraph of Article 2180, whether or not engaged in any business or industry,
an employer is liable for the torts committed by employees within the scope of his assigned Thus, Aguilar, Sr. concluded:
tasks. But it is necessary to establish the employer-employee relationship; once this is done, chanRoblesvirtualLawlibrary
the plaintiff must show, to hold the employer liable, that the employee was acting within the In our view, respondent bank, as the registered owner of the vehicle, is primarily liable for
scope of his assigned task when the tort complained of was committed. It is only then that the Aguilar, Jr.'s death. The Court of Appeals erred when it concluded that the bank was not
employer may find it necessary to interpose the defense of due diligence in the selection and liable simply because (a) petitioner did not prove that Borja was acting as the bank's vice
supervision of the employee. president at the time of the accident; and (b) Borja had, according to respondent bank,
already bought the car at the time of the mishap. For as long as the respondent bank
. . . . remained the registered owner of the car involved in the vehicular accident, it could not
escape primary liability for the death of petitioner's son.94 (Emphasis supplied)
Preference for the registered-owner rule became more pronounced in Del Carmen, Jr. v. While Republic Act No. 4136 or the Land Transportation and Traffic Code does not contain
Bacoy:95 any provision on the liability of registered owners in case of motor vehicle mishaps, Article
Without disputing the factual finding of the [Court of Appeals] that Allan was still his employee 2176, in relation with Article 2180, of the Civil Code imposes an obligation upon Filcar, as
at the time of the accident, a finding which we see no reason to disturb, Oscar Jr. contends registered owner, to answer for the damages caused to Espinas'
that Allan drove the jeep in his private capacity and thus, an employer's vicarious liability for car.102ChanRoblesVirtualawlibrary
the employee's fault under Article 2180 of the Civil Code cannot apply to him. Thus, it is imperative to apply the registered-owner rule in a manner that harmonizes it with
Articles 2176 and 2180 of the Civil Code. Rules must be construed in a manner that will
The contention is no longer novel. In Aguilar Sr. v. Commercial Savings Bank, the car of harmonize them with other rules so as to form a uniform and consistent system of
therein respondent bank caused the death of Conrado Aguilar, Jr. while being driven by its jurisprudence.103 In light of this, the words used in Del Carmen are particularly notable. There,
assistant vice president. Despite Article 2180, we still held the bank liable for damages for the this court stated that Article 2180 "should defer to"104 the registered-owner rule. It never stated
accident as  said provision should defer to the settled doctrine concerning accidents that Article 2180 should be totally abandoned.
involving registered motor vehicles, i.e., that the registered owner of any vehicle, even if
not used for public service, would primarily be responsible to the public or to third persons for Therefore, the appropriate approach is that in cases where both the registered-owner rule
injuries caused the latter while the vehicle was being driven on the highways or streets. We and Article 2180 apply, the plaintiff must first establish that the employer is the registered
have already ratiocinated that: owner of the vehicle in question. Once the plaintiff successfully proves ownership, there
chanRoblesvirtualLawlibrary arises a disputable presumption that the requirements of Article 2180 have been proven. As a
The main aim of motor vehicle registration is to identify the owner so that if any accident consequence, the burden of proof shifts to the defendant to show that no liability under Article
happens, or that any damage or injury is caused by the vehicle on the public highways, 2180 has arisen.
responsibility therefor can be fixed on a definite individual, the registered owner. Instances
are numerous where vehicles running on public highways caused accidents or injuries to This disputable presumption, insofar as the registered owner of the vehicle in relation to the
pedestrians or other vehicles without positive identification of the owner or drivers, or with actual driver is concerned, recognizes that between the owner and the victim, it is the former
very scant means of identification. It is to forestall these circumstances, so inconvenient or that should carry the costs of moving forward with the evidence. The victim is, in many cases,
prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest a hapless pedestrian or motorist with hardly any means to uncover the employment
of the determination of persons responsible for damages or injuries caused on public relationship of the owner and the driver, or any act that the owner may have done in relation
highways.96 (Emphasis supplied, citations omitted) to that employment.
Filcar Transport Services v. Espinas97 stated that the registered owner of a vehicle can no
longer use the defenses found in Article 2180:98 The registration of the vehicle, on the other hand, is accessible to the public.
Neither can Filcar use the defenses available under Article 2180 of the Civil Code - that the
employee acts beyond the scope of his assigned task or that it exercised the due diligence of Here, respondent presented a copy of the Certificate of Registration105 of the van that hit
a good father of a family to prevent damage - because the motor vehicle registration law, to a Reyes.106 The Certificate attests to petitioner's ownership of the van. Petitioner itself did not
certain extent, modified Article 2180 of the Civil Code by making these defenses unavailable dispute its ownership of the van. Consistent with the rule we have just stated, a presumption
to the registered owner of the motor vehicle. Thus, for as long as Filcar is the registered that the requirements of Article 2180 have been satisfied arises. It is now up to petitioner to
owner of the car involved in the vehicular accident, it could not escape primary liability for the establish that it incurred no liability under Article 2180. This it can do by presenting proof of
damages caused to Espinas.99ChanRoblesVirtualawlibrary any of the following: first, that it had no employment relationship with Bautista; second, that
Bautista acted outside the scope of his assigned tasks; or third, that it exercised the diligence
Mendoza v. Spouses Gomez100 reiterated this doctrine.
of a good father of a family in the selection and supervision of Bautista.107
However, Aguilar, Sr., Del Carmen, Filcar, and Mendoza should not be taken to mean that
On the first, petitioner admitted that Bautista was its employee at the time of the accident.108
Article 2180 of the Civil Code should be completely discarded in cases where the registered-
owner rule finds application.
On the second, petitioner was unable to prove that Bautista was not acting within the scope
of his assigned tasks at the time of the accident. When asked by the court why Bautista was
As acknowledged in Filcar, there is no categorical statutory pronouncement in the Land
at the place of the accident when it occurred, Sally Bellido, petitioner's accountant and
Transportation and Traffic Code stipulating the liability of a registered owner. 101 The source of
supervisor,109 testified that she did not "have the personal capacity to answer [the
a registered owner's liability is not a distinct statutory provision, but remains to be Articles
question]"110 and that she had no knowledge to answer it:
2176 and 2180 of the Civil Code:
chanRoblesvirtualLawlibrary
chanRoblesvirtualLawlibrary
COURT : Madam Witness, do you know the reason why your driver, Jimmy Bautista, SEC. 24. Use of driver's license and badge. — ...
at around 10:00 o' clock in the morning of July 13, 2000 was in the vicinity
of Barangay Marcelo Green, United Parañaque Subdivision 4? . . . .

WITNESS : I don't have the personal capacity to answer that, Sir. No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor
vehicle, unless the person sought to be employed is a duly licensed professional driver.
Q : So you don't have any knowledge why he was there?
Evidently, petitioner did not only fail to exercise due diligence when it selected Bautista as
A : Yes, Sir.111 (Emphasis supplied) service driver; it also committed an actual violation of law.
Sally Bellido's testimony does not affect the presumption that Article 2180's requirements
have been satisfied. Mere disavowals are not proof that suffice to overturn a presumption. To To prove that it exercised the required diligence in supervising Bautista, petitioner presented
this end, evidence must be adduced. However, petitioner presented no positive evidence to copies of several memoranda and company rules.114 These, however, are insufficient
show that Bautista was acting in his private capacity at the time of the incident. because petitioner failed to prove actual compliance. Metro Manila Transit Corporation v.
Court of Appeals115 emphasized that to establish diligence in the supervision of employees,
On the third, petitioner likewise failed to prove that it exercised the requisite diligence in the the issuance of company policies must be coupled with proof of compliance:
selection and supervision of Bautista. chanRoblesvirtualLawlibrary
Due diligence in the supervision of employees, on the other hand, includes the formulation of
In its selection of Bautista as a service driver, petitioner contented itself with Bautista's suitable rules and regulations for the guidance of employees and the issuance of proper
submission of a non-professional driver's license.112 Hence, in Sally Balledo's cross- instructions intended for the protection of the public and persons with whom the employer has
examination: relations through his or its employees and the imposition of necessary disciplinary measures
chanRoblesvirtualLawlibrary upon employees in case of breach or as may be warranted to ensure the performance of acts
indispensable to the business of and beneficial to their employer. To this, we add that actual
Q : . . . when he was promoted as service driver, of course, there were certain
implementation and monitoring of consistent compliance with said rules should be the
requirements and among other else, you made mention about a driver's
constant concern of the employer, acting through dependable supervisors who should
license.
regularly report on their supervisory functions.
A : Yes, Sir.
In order that the defense of due diligence in the selection and supervision of employees may
Q : Would you be able to show to this Honorable Court whether indeed this be deemed sufficient and plausible, it is not enough to emptily invoke the existence of
person did submit a driver's license to your company? said company guidelines and policies on hiring and supervision. As the negligence of
the employee gives rise to the presumption of negligence on the part of the employer, the
A : Yes, Sir.
latter has the burden of proving that it has been diligent not only in the selection of employees
.... but also in the actual supervision of their work. The mere allegation of the existence of hiring
procedures and supervisory policies, without anything more, is decidedly not sufficient to
Q : Do you recall what kind of driver's license is this? overcome presumption.
A : The Land Transportation Office.
We emphatically reiterate our holding, as a warning to all employers, that "(t)he mere
Q : Is it a professional driver's license or non-proffesional [sic] driver's license? formulation of various company policies on safety without showing that they were being
complied with is not sufficient to exempt petitioner from liability arising from negligence of its
A : Non-professional. employees. It is incumbent upon petitioner to show that in recruiting and employing the erring
Q : You are not sure? driver the recruitment procedures and company policies on efficiency and safety were
followed." Paying lip-service to these injunctions or merely going through the motions of
COURT : Non professional, professional? compliance therewith will warrant stern sanctions from the Court.116 (Emphasis supplied,
citations omitted)
A : It's a non-professional.113 (Emphasis supplied)
For failing to overturn the presumption that the requirements of Article 2180 have been
Employing a person holding a non-professional driver's license to operate another's motor satisfied, petitioner must be held liable.
vehicle violates Section 24 of the Land Transportation and Traffic Code, which provides:
chanRoblesvirtualLawlibrary
III

Petitioner's argument that it should be excused from liability because Bautista was already
dropped as a party NO
is equally unmeritorious. The liability imposed on the registered owner is direct and
primary.117 It does not depend on the inclusion of the negligent driver in the action. Agreeing
to petitioner's assertion would render impotent the rationale of the motor registration law in
fixing liability on a definite person.
Bautista, the driver, was not an indispensable party under Rule 3, Section 7118 of the 1997
Rules of Civil Procedure. Rather, he was a necessary party under Rule 3, Section
8.119 Instead of insisting that Bautista — who was nothing more than a necessary party —
should not have been dropped as a defendant, or that petitioner, along with Bautista, should
have been dropped, petitioner (as a co-defendant insisting that the action must proceed with
Bautista as party) could have opted to file a cross-claim against Bautista as its remedy.
The 1997 Rules of Civil Procedure spell out the rules on joinder of indispensable and
necessary parties. These are intended to afford "a complete determination of all possible
issues, not only between the parties themselves but also as regards to other persons who
may be affected by the judgment."120
However, while an exhaustive resolution of disputes is desired in every case, the distinction
between indispensable parties and necessary parties delineates a court's capacity to render
effective judgment. As defined by Rule 3, Section 7, indispensable parties are "[p]arties in
interest without whom no final determination can be had of an action[.]" Thus, their non-
inclusion is debilitating: "the presence of indispensable parties is a condition for the exercise
of juridical power and when an indispensable party is not before the court, the action should
be dismissed."121
In contrast, a necessary party's presence is not imperative, and his or her absence is not
debilitating. Nevertheless, it is preferred that they be included in order that relief may be
complete.
The concept of indispensable parties, as against parties whose inclusion only allows
complete relief, was explained in Arcelona v. Court of Appeals:122
An indispensable party is a party who has such an interest in the controversy or subject
matter that a final adjudication cannot be made, in his absence, without injuring or affecting
that interest, a party who has not only an interest in the subject matter of the controversy, but
also has an interest of such nature that a final decree cannot be made without affecting his
interest or leaving the controversy in such a condition that its final determination may be
wholly inconsistent with equity and good conscience. It has also been considered that an
indispensable party is a person in whose absence there cannot be a determination between
the parties already before the court which is effective, complete, or equitable. Further, an
indispensable party is one who must be included in an action before it may properly go
forward.
A person is not an indispensable party, however, if his interest in the controversy or subject
matter is separable from the interest of the other parties, so that it will not necessarily be
directly or injuriously affected by a decree which does complete justice between them. Also, a
person is not an indispensable party if his presence would merely permit complete relief
between him and those already parties to the action, or if he has no interest in the subject
matter of the action. It is not a sufficient reason to declare a person to be an indispensable
party that his presence will avoid multiple litigation.123ChanRoblesVirtualawlibrary
Petitioner's interest and liability is distinct from that of its driver. Regardless of petitioner's
employer-employee relationship with Bautista, liability attaches to petitioner on account of its
being the registered owner of a vehicle that figures in a mishap. This alone suffices. A
determination of its liability as owner can proceed independently of a consideration of how
Bautista conducted himself as a driver. While certainly it is desirable that a determination of
Bautista's liability be made alongside that of the owner of the van he was driving, his non-
inclusion in these proceedings does not absolutely hamper a judicious resolution of
respondent's plea for relief.
IV
The Court of Appeals committed no reversible error when it awarded actual damages to
respondent. Respondent's claim for actual damages was based on the Certificate 124 issued
and signed by a certain Peñaloza showing that respondent paid Peñaloza P35,000.00 for
funeral expenses.
Contrary to petitioner's claim, this Certificate is not hearsay. Evidence is hearsay when its
probative value is based on the personal knowledge of a person other than the person
actually testifying.125 Here, the Certificate sought to establish that respondent herself paid
Peñaloza P35,000.00 as funeral expenses for Reyes' death:126
3. Na ang aking kontrata ay nagkakahalaga ng P35,000-00 [sic] sa lahat ng
nagamit na materiales at labor nito kasama ang lote na ibinayad sa akin ni
Gng. ERMILINDA REYES ABEJAR na siyang aking kakontrata sa
pagsasagawa ng naturang paglilibingan.127 (Emphasis supplied)
It was respondent herself who identified the Certificate. She testified that she incurred funeral
expenses amounting to P35,000.00, that she paid this amount to Peñaloza, and that she was
present when Peñaloza signed the Certificate:
chanRoblesvirtualLawlibrary
[ATTY. Did you incur any expenses?
LIM] :
A: Meron po.
Q: How much did you spend for the death of Jesmarian [sic] Reyes?
A: 'Yun pong P35,000.00 na pagpapalibing at saka...
Q: You said that you spent P35,000.00. Do you have any evidence or proof that the negligence of its driver.131 For the same reasons, the award of P50,000.00 by way of civil
you spent that amount? indemnity is justified.132

A: Meron po. The award of moral damages is likewise proper.

Q: Showing to you this sort of certification. What relation has this... Article 2206(3) of the Civil Code provides:
A: 'Yan po' yung contractor nagumawa. chanRoblesvirtualLawlibrary
ARTICLE 2206. The amount of damages for death caused by a crime or quasi-delict shall be
Q: Contractor of what? at least three thousand pesos, even though there may have been mitigating circumstances.
In addition:
A: 'Yan po' yung mismong binilhan ko ng lupa at nitso.
.... . . . .
 
ATTY. LIM : There is a signature at the top of the printed name Julian Penalosa [sic].
Whose signature is this? (3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death of
A: 'Yan po' yung mismong contractor. the deceased. (Emphasis supplied)
.... For deaths caused by quasi-delict, the recovery of moral damages is limited to the spouse,
legitimate and illegitimate descendants, and ascendants of the deceased.133
Q: Did you see him sign this?
A: Opo.128 (Emphasis supplied) Persons exercising substitute parental authority are to be considered ascendants for the
purpose of awarding moral damages. Persons exercising substitute parental authority are
Respondent had personal knowledge of the facts sought to be proved by the Certificate, i.e. intended to stand in place of a child's parents in order to ensure the well-being and welfare of
that she spent P35,000.00 for the funeral expenses of Reyes. Thus, the Certificate that she a child.134 Like natural parents, persons exercising substitute parental authority are required
identified and testified to is not hearsay. It was not an error to admit this Certificate as to, among others, keep their wards in their company, 135 provide for their upbringing,136 show
evidence and basis for awarding P35,000.00 as actual damages to respondent. them love and affection,137 give them advice and counsel,138 and provide them with
companionship and understanding.139 For their part, wards shall always observe respect and
The Court of Appeals likewise did not err in awarding civil indemnity and exemplary damages. obedience towards the person exercising parental authority.140 The law forges a relationship
between the ward and the person exercising substitute parental authority such that the death
Article 2206 of the Civil Code provides: or injury of one results in the damage or prejudice of the other.
chanRoblesvirtualLawlibrary
ARTICLE 2206. The amount of damages for death caused by a crime or quasi-delict shall be Moral damages are awarded to compensate the claimant for his or her actual injury, and not
at least three thousand pesos, even though there may have been mitigating circumstances[.] to penalize the wrongdoer.141 Moral damages enable the injured party to alleviate the moral
Further, Article 2231 of the Civil Code provides: suffering resulting from the defendant's actions.142 It aims to restore — to the extent possible
chanRoblesvirtualLawlibrary — "the spiritual status quo ante[.]" 143
ARTICLE 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted
with gross negligence. Given the policy underlying Articles 216 and 220 of the Family Code as well as the purposes
for awarding moral damages, a person exercising substitute parental authority is rightly
Both the Court of Appeals and the Regional Trial Court found Bautista grossly negligent in considered an ascendant of the deceased, within the meaning of Article 2206(3) of the Civil
driving the van and concluded that Bautista's gross negligence was the proximate cause of Code. Hence, respondent is entitled to moral damages.
Reyes' death. Negligence and causation are factual issues.129 Findings of fact, when
established by the trial court and affirmed by the Court of Appeals, are binding on this court As exemplary damages have been awarded and as respondent was compelled to litigate in
unless they are patently unsupported by evidence or unless the judgment is grounded on a order to protect her interests, she is rightly entitled to attorney's fees. 144
misapprehension of facts.130 Considering that petitioner has not presented any evidence
disputing the findings of the lower courts regarding Bautista's negligence, these findings However, the award of interest should be modified. This modification must be consistent
cannot be disturbed in this appeal. The evidentiary bases for the award of civil indemnity and
exemplary damages stand. As such, petitioner must pay the exemplary damages arising from
with Nacar v. Gallery Frames,145 in which we ruled: This Petition for Review on Certiorari1 seeks to set aside; a) the September 26, 2012
chanRoblesvirtualLawlibrary Decision2 of the Court of Appeals (CA) in CA-G.R. CV No, 96961 affirming the April 4, 2011
Decision3 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31 in Civil Case
2. When an obligation, not constituting a loan or forbearance of money, is No. SPL-0969; and b) the CA's December 28, 2012 Resolution4 denying herein petitioners'
breached, an interest on the amount of damages awarded may be imposed Motion for Reconsideration.5chanrobleslaw
at the discretion of the court at the rate of 6% per annum. No interest,
however, shall be adjudged on unliquidated claims or damages, except when Factual Antecedents
or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the Petitioner Greenstar Express, Inc. (Grepistar) is a domestic corporation engaged in the
interest shall begin to run from the time the claim is made judicially or business of public transportation, while petitioner Fruto L. Sayson, Jr. (Sayson) is one of its
extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so bus drivers,
reasonably established at the time the demand is made, the interest shall
begin to run only from the date the judgment of the court is made (at which Respondents Universal Robina Corporation (URC) and Nissin Universal Robina Corporation
time the quantification of damages may be deemed to have been reasonably (NURC) are domestic corporations engaged in the food business. NURC is a subsidiary of
ascertained). The actual base for the computation of legal interest shall, in URC.
any case, be on the amount finally adjudged.
URC is the registered owner of a Mitsubishi L-300 van with plate number WRN 403 (URC
3. When the judgment of the court awarding a sum of money becomes final and van).6chanrobleslaw
executory, the rate of legal interest, whether the case falls under paragraph 1
or paragraph 2, above, shall be 6% per annum from such finality until its At about 6:50 a.m. on February 25, 2003, which was then a declared national
satisfaction, this interim period being deemed to be by then an equivalent to holiday,7 petitioner's bus, which was then being driven toward the direction of Manila by
a forbearance of credit.146 (Emphasis supplied) Sayson, collided head-on with the URC van, which was then being driven Quezon province-
bound by NURC's Operations Manager, Renante Bicomong (Bicomong). The incident
occurred along Km. 76, Maharlika Highway, Brgy. San Agustin, Alaminos, Laguna. Bicomong
WHEREFORE, the Decision of the Court of Appeals dated October 3, 2005 is AFFIRMED
died on the spot, while the colliding vehicles sustained considerable damage.
with the following MODIFICATIONS: (a) actual damages in the amount of P35,000.00 shall
earn interest at the rate of 6% per annum from the time it was judicially or extrajudicially
On September 23, 2003, petitioners filed a Complaint8 against NURC to recover damages
demanded from petitioner Caravan Travel and Tours International, Inc. until full satisfaction;
sustained during the collision, premised on negligence. The case was docketed as Civil Case
(b) moral damages, exemplary damages, and attorney's fees shall earn interest at the rate of
No. SPL-0969 and assigned to Branch 31 of the RTC of San Pedro, Laguna, An Amended
6% per annum from the date of the Regional Trial Court Decision until full satisfaction; and (c)
Complaint9 was later filed, wherein URC was impleaded as additional defendant.
civil indemnity shall earn interest at the rate of 6% per annum from the date of the Court of
Appeals Decision until full satisfaction.
URC and NURC filed their respective Answers,10 where they particularly alleged and claimed
lack of negligence on their part and on the part of Bicomong.
SO ORDERED.cralawlawlibrary
After the issues were joined, trial proceeded. During trial, only Sayson was presented by
G.R. No. 205090, October 17, 2016 petitioners as eyewitness to the collision.

GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR., Petitioners, v. UNIVERSAL Riding of the Regional Trial Court
ROBINA CORPORATION AND NISSIN UNIVERSAL ROBINA
CORPORATION, Respondent. On April 4, 2011, the RTC issued its Decision, which decreed thus:

DECISION chanRoblesvirtualLawlibrary

DEL CASTILLO, J.: During the trial on the merits, plaintiffs11 presented five witnesses namely Josephine Gadiaza,
Miguel Galvan, SPO3 Ernesto Marfori, Fruto Sayson and Lilia Morales.
x x x x
Plaintiff Fruto Sayson testified that on that fateful day, he was driving the plaintiff passenger
bus from Lucena City going to Manila at a speed of more or less 60 kilometers per hour when
he met a vehicular accident at Barangay San Agustin, Alaminos, Laguna. He saw from afar
an L-300 UV coming from the shoulder going on the opposite direction to Lucena City. Said
vehicle was already near his bus when it (UV) managed to return to ifs proper lane, then hit
and swerved his vehicle.- "He tried to prevent the collision by swerving to the right but it was
too late. As a result, the left front portion of the bus was damaged while the front portion of
the L-300 UV was totally wrecked- He and his conductor, one.Mendoza, managed to get but
of the bug by forcibly opening the automatic door which was also damaged due to the impact
After getting out of the bus, he looked for the driver of the L300 UV but he was informed by a
bystander that he was thrown in a canal arid already dead. For fear of possible reprisals from
bystanders as experienced by most drivers involved in an accident, he boarded smother bug
owned by bis employer. Before he left, he indorsed the matter to hip conductor and line
inspector. Thereafter, he reported to their office at San Pedro, Laguna. He executed a
statement on the same day x x x and submitted the same to their operations department. He
likewise testified that before the incident, he was earning P700.00 to P900,00 a day on
commission basis and he drives 25 days in a month. However, after the incident, he was not
able to drive for almost two months.
On cross-examination, it was established that the incident happened along the Maharlika
Highway along Kilometer 72. There were no structures near the site of the incident, The
highway ha§ two lanes which can accommodate the size of the bus about 3 meters wide and
a. light vehicle. He was bound for Manila and had about ten passengers. He saw the L-300
UV on the shoulder of the opposite lane about 250 meters away from, his bus while he was
driving [at] a speed of 60 kilometers per hour. He did not sense any danger when he saw the
vehicle from afar. He cannot drive fast as there were five vehicles ahead of his bus. When the
L-300 UV managed to return to it? proper lane coming from the shoulder, it was heading
directly towards his direction, at a distance of more or less five, meters away from his bus, He
noticed that the L-300 UV was running at full speed as he saw dust clouds. "The point of
impact happened on his lane. He tried to swerve his bus to prevent the impact but lie
admitted that at his speed, it was difficult for him to maneuver his vehicle
Investigator SPO3 Ernesto Marfori of the Alaminos Police Station testified that at about 7:00
in the morning, he received a report from the Barangay Chairman of a vehicular accident that
occurred at Brgy. §an Agustin, Alaminos, Laguna. He proceeded to the site with SPO2
Rolando Alias. Upon arrival at the scene of the accident, he attended to the victim, but found
him dead inside the L- 300 UV. He came to know later that he was Renante Bicomong. He
immediately called up his office and requested that funeral services for the dead man. be
arranged. Thereafter, he photographed the damaged vehicles (Exhibits "F" and sub-
markings) and interviewed some witnesses. He made a sketch depicting the damages
suffered by both vehicles (Exhibit "D-2"), the L-300 IV at the front portion (Exhibit "D-4") while
the bus at the left side of its front portion (Exhibit "D-3"). Based on the sketch he prepared,
the impact happened almost at the right lane which was the bus lane (Exhibit "D-6"). He
likewise noticed some debris also found at the bus lane. He was able to interview the bus
conductor and a fruit store owner in [sic] the names of Apolinar Devilla and Virgilio Adao, He
did not see the driver of the bus at the scene of the accident and he was told that he had left
the place. Based on, his investigation, the possible cause of the accident was the swerving to
the left lane [by] the driver of the L-300 UV which resulted in me encroaching of the bus' lane.
He reduced bis findings into writing in a Report dated February 28, 2003 (Exhibits "D" and
sub-markings).
On cross-examination, the witness admitted that he was not present when the vehicles
collided. The entries he made in the blotter report were mainly based on the accounts of the
witnesses he was able to interview who however did not give their written statements. When
he arrived at the scene of the accident, the L-300 UV was already on the shoulder of the road
and it was totally wrecked. According to reports, the van spun around when it was bit causing
the metal scar found on the road.
On the other hand, the defendants12 presented three witnesses: its employees Alexander
Caoleng and John Legaspi and deceased Renante Bicomong's widow, Gloria Bicomgng,
These witnesses were presented to prove that deceased Bicomong was acting in his
personal capacity when the mishap happened on February 25, 2003 as that day had been
declared an official holiday and the L-300 UV he was driving had not been issued to him,
among others.
Alexander Caoleng, HR. Manager of defendant NURC, testified that deceased Bicomong
worked as the Operations Manager of defendant NURC until his death as evidenced by a
Certificate of Employment dated December 9, 2008 (Exhibit "I"), His last assignment was in
First Cavite Industrial Estate (FCEB). He died in a vehicular accident in Alaminos, Laguna on
February 25, 2003 which was declared a holiday by virtue of Proclamation No. 331 (Exhibit
"2"). Despite having been issued his own service vehicle (Exhibits "3", "4" and "5"), he used
the L-300 UV which was not officially issued to him but in the name of Florante Soro-Soro,
defendant NURC's Logistics Manager at that time (Exhibits "7" and "B"). The said vehicle was
used mainly to transport items coming from their office at Pasig to Cavite and vice versa
(Exhibit "9").
John Legaspi, Project Manager of defendant NURC, testified that he was first assigned in its
Cavite Plant in 1999 with deceased Bicomaog as his immediate supervisor being the
Production Manager then. He last saw him in the afternoon of February 24, 2003 at about
6:00 pm when they had a short chat He (Bicomong) was then transferring his things from his
executive vehicle which was a Toyota Corolla to the L-300 UY which was a company vehicle.
He (Bicomong) shared that he would go home to Quezon Province the following day
(February 25) to give money to his daughter. He knew that his trip to Quezon was not work-
related as February 25, 2003 was declared a holiday. Besides, there exists no plant owned
by defendant NURC in the provinces of Quezon, Laguna or Bicol as attested to by the
General Manager of defendant NURC in a Certification to that effect (Exhibit "11").
On cross-examination, he distinguished the use of an executive vehicle assigned to an
executive officer for his personal use and the company vehicle which was supposed to be for
official use only.
 merely borrowed by Bicomong in going to Candelaria, Quezon on that day.
Finally, Gloria Bicomong, widow of deceased Reynante Bicomong testified that she knew that
her husband was going home to Calendaria (sic), Quezon on February 25, 2003 because he The accident having occurred outside Remnte Bicomong's assigned tasks, defendant
informed their daughter. He was on his way home when he met a vehicular-accident in employers cannot be held liable to the plaintiffs, even assuming that it is the fault of
Alaminos. Laguna which claimed his life. She was informed about the accident involving her defendants' employee that was the direct and proximate cause of their damages.
husband by a high school friend who was also traveling to Quezon at that time, She filed a
criminal complaint at Alaminos, Laguna but it was dismissed for reasons unknown to her. She However, the question of whose fault or negligence was the direct and proximate cause of
likewise filed a civil complaint for damages before the Regional Trial Court of Lucena City the mishap is material to the resolution of defendants' counterclaim.
docketed as Civil Case No. 2.103-135.
The rule is that the burden of proof lies on him who claims a fact (Federico Ledesina vs.
On cross-examination, she narrated that aside from the Toyota Corolla service of her NLRC, G.R. No. 175585, October 19,2007). Therefore, to be able to recover in their
husband, he would use the L-300 UV whenever he had to bring bulky things home. As far as counterclaim, the defendants must prove by preponderance of evidence that the direct and
she can recall, he used the L-300 UV about 5 times. proximate cause of their losses was the fault of the plaintiff-driver.

After an evaluation of the foregoing testimonies and documentary evidence of the parties, the Defendants were not able to present any witness as to how the mishap occurred Their
court had [sic] arrived at the following findings and conclusions: witnesses were limited to proving that Renante Bicomong was not in the performance of his
assigned task when the incident happened.
chanRoblesvirtualLawlibraryPlaintiff has no cause of action and cannot recover from the
defendants even assuming that the direct and proximate cause of the accident was the A reading of their answer would reveal, that their attribution of fault to the plaintiff-driver is
negligence of the defendant's employee Renato Bicomong. based only on the point of impact of the two vehicles. Thus:

Pursuant to Article 2184 of the New Civil Code, the owner of a motor vehicle is solidarily
liable with his driver if at the time of the mishap, the owner was in the vehicle and by the use
of due diligence could have presented (sic) the misfortune; if the owner is not in the motor
vehicle, the provision of Article 2180 is applicable. The defendants being juridical persons,
the first paragraph of Article 2184 is obviously not applicable.
Under Article 2180, "employers shall be liable tor 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. "In other words, for the employer to be
liable for the damages caused by his employee, the latter must have caused the damage in
the course of doing his assigned tasks or in the-performance of his duties" (Yambao vs.
Zuñiga, G.R. No: 146173, December 11, 2003)
In this case, it is beyond cavil that the deceased Renante Bicong [sic] was not in the
performance of his duty on that fateful day of February 25, 2003. In the first place that day
was a holiday; there was no work and it was not shown that he was working as indeed his
work assignment is operations manager of the company's plant m, Cavite while the accident
happened while he was in Alaminos, Laguna on his way home to Candelaria, Quezon.
Secondly, as an operations manager, he was issued an executive car for. Ms own use, a
Toyota Corolla vehicle and he merely preferred to use the L-300 UV when going home to his
family in Quezon. Even assuming that the company allowed or tolerated this, by itself, the
tolerance did not make, the employer liable in the absence of showing that he was using the
vehicle in the performance of a duty or within the scope of his assigned tasks. But as clearly
relayed by defendant's witnesses, defendants have no business or plant in Quezen. The L-
300 vehicle was for the hauling of items between their Pasig and Cavite offices and was
chanRoblesvirtualLawlibrary
'4.3 Based on the damage sustained by the passenger bus, plaintiffs' claim that Renante
Bicomong swerved on the left lane and encroached on the path of the said bus moments
before the accident could not have been true. Such claim would have resulted to a head-on
collision between the vehicle driven by Mr. Bicomong and the bus; the latter would have
sustained damage on its front side. However, based on Annexes "B" and "C" of the
Complaint, the. said bus sustained damage on its left side. Clearly, it was the passenger bus
that swerved on the left lane, which was being traversed by Renante Bicomong, and while
returning to the right lane, said bus hit the vehicle being driven by Mr. Bicomong. Thus,
explaining the damage sustained by the said bus on its left side just below the driver's seat.'
The foregoing however is a mere interpretation or speculation and not supported by any
account, either by an eyewitness [or by] a explanation tracing the relative positions of the two
vehicles in relation to the road at the time of impact and the movements of the two vehicles
after the impact. For this reason, it will be unfair to make an interpretation of the events based
alone on the point of impact [on] the vehicles. The points of impact by themselves cannot
explain the positions of the vehicles on the road.
Defendants Memorandum attributed the cause of the mishap to the excessive speed of the
bus. In their Memorandum, the defendants content [sic] that if the driver had seen the L-3G0
UV meters away in front of him running along the shoulder and negotiating back to its lane,
the bus driver would have watched out and slackened his speed. Considering the damage to
both the vehicles and the fact that the L-300,UV span [sic] and w,as thrown 40 feet away from
the point of impact and its driver was thrown 14 feet away from his vehicle, defendant argued
that the bus could not be running at 60 kilometers only. But assuming the bus indeed was
running at high speed that alone does not mean that the negligence of the driver was the
direct and proximate cause, If it is true that the L-300 UV ran from the right shoulder, climbed
up to the right lane but overshoot [sic] it and occupied the bus' lane, the speed of the bus
cannot be considered the proximate and direct cause of the collision; But as stated earlier,
this were [sic] merely conjectures and surmises of the defendants and not proven by
competent evidence.
All told, defendants were not able to prove by their own evidence that the direct and
proximate cause of the collision was the fault of plaintiffs driver. Hence, they cannot hold
plaintiffs liable for the logs of their L-300 UV. As both parties failed to prove by their
respective evidence where the fault that occasioned their losses lie, they must bear their
respective losses.
Anent defendants' counterclaim for attorney's fees and exemplary damages, there is no
evidence to show that the filing, of this suit was motivated [by] malice. It cannot be denied
that plaintiffs suffered damages. The court mainly, dismissed the complaint for lack of cause
of action as Renante Bicomong was not performing his assigned tasks at the time of the
incident. Besides, to hold them liable to defendants for attorney's fees and exemplary
damages simply because they failed to come up with sufficient evidence will be tantamount to
putting a price on one's right to sue.
WHEREFORE, judgment is hereby rendered dismissing the complaint as well as the
counterclaim.
No costs.
SO ORDERED.13
Ruling of the Court of Appeals
Petitioners filed an appeal before the CA, docketed as CA-G.R. CV No. 96961. They argued
that Bicomong's negligence was the proximate cause of the collision, as the van he was
4rjvmg swerved to the opposite lane and hit the bus which was then traveling along its proper
lane; that Bicomong's act of occupying the bus's lane was illegal and thus constituted a traffic
violation; that respondents are liable for damages as the registered owner of the van and
failing to exercise due diligence in the selection and supervision of its employee, Bicomong,
Respondents, countered that the bus driven by Sayson was running at high speed when the,
collision occurred, thus indicating that Sayson was in violation of traffic rules; and that Say-
son had the last clear chance to avert collision but he failed to take the necessary precaution
under the circumstances, by reducing his speed and applying the brakes on time to avoid
collision.
On September 26, 2012, the CA rendered the assailed Decision containing the following
pronouncement:
chanRoblesvirtualLawlibrary
The present case involving an action for damages based on quasi-delict is governed by
Articles 2176 and 2180 of the New Civil Code, pertinent provisions of which read:
chanRoblesvirtualLawlibrary
'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. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts
or omission also for those of persons for whom one is responsible.
xxx xxx xxx
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.'
Under Article 2180 of the New Civil Code, employers shall be held primarily and solidarily
liable for damages caused by their employees acting within the scope of their assigned tasks.
To hold the employer liable under this provision, it must be shown that an employer-employee
relationship exists, and that the employee was acting within the scope of his assigned task
when the act complained of was committed.
Records bear that the vehicular collision occurred on February 25, 2003 which was declared
by former Executive Secretary Alberto G. Romulo, by order of former President Gloria
Macapagal-Arroyo, as a special national holiday, per Proclamation No. 331 dated February
19, 2003. Renante Bicomong had no work on that day and at the time the accident occurred,
he was on his way home to Candelaria, Quezon. There was no showing that on that day,
Renante Bicomong was given by defendants-appellees14 an assigned task, much less
instructed to go to Quezon. As testified to by Renante Bicomong's widow Gloria Bicomong,
Renante Bicomong was on the road that day because he was going home to Candelaria,
Quezon. Thus, he was then carrying out a personal purpose and not performing work for
defendants-appellees.
Apropos is Castilex Industrial Corp. vs. Vicente Vasquez, Jr.,15 wherein the Supreme Court
held that the mere fact that an employee was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge his employer with liability for the operation
of said vehicle unless it appeared that he was operating the vehicle within the course or
scope of bis employment. Thus:ChanRoblesVirtualawlibrary
xxxx
'The court a quo and the Court of Appeals were one in holding that the driving by a
messenger of a company-issued vehicle is within the scope of his assigned tasks regardless
of the time and circumstances.
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
operation of said vehicle unless it appears mat he was operating the vehicle within the course
or scope of his employment.
The following are principles in American Jurisprudence on the employer's liability for the
injuries inflicted by the negligence of an employee in the use of an employer's motor vehicle.
xxxx
III. Use of Employer's Vehicle Outside Regular Working Hours
An employer who loans his motor vehicle to an employee for the latter's personal use outside
of regular working hours is generally not liable for the employees negligent operation of the
vehicle during the period of permissive use, even where the employer contemplates that a
regularly assigned motor vehicle will be used by the employee for personal as well as
business purposes and there is some incidental benefit to the employer. Even where the
employee's personal purpose in using the vehicle has been accomplished and he has started
the return trip to his house where the vehicle is normally kept, it has been held that he has not
resumed his employment, and the employer is not liable for the employees negligent
operation of the vehicle during the return trip.
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on
the doctrine of respondent superior, not on the principle of bonus pater familias as in ours.
Whether the fault or negligence of the employee is conclusive on his employer as in
American law or jurisprudence, or merely gives rise to the presumption juris tantum of
negligence on the part of the employer as in ours, it is indispensable that the employee was
acting in his employer's business or within the scope of his assigned task.
In the case at bar, it is undisputed that ABAD did some overtime work at Hie petitioner's
office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's
Restaurant in Fuente Osmefia, Cebu City, which is about seven kilometers away from
petitioner's place of business. A witness for the private respondents, a sidewalk vendor,
testified that Fuente Osmeña is a lively place even at dawn because Goldie's Restaurant and
Back Street were still open and people were drinking thereat Moreover, prostitutes, pimps,
and drug addicts littered the place.
xxx  xxx  xxx
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular accident. It
was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD's
working day had ended; his overtime work had already been completed. His being at a place
which, as petitioner put it, was known as a haven for prostitutes, pimps, and drug pushers
and addicts, had no connection to petitioner's business; neither had it any relation to his
duties as a manager. Rather, using his service vehicle even for personal purposes was a
form of a fringe benefit or one of the perks attached to his position.
Since there is paucity of evidence that ABAD was acting within the scope of the functions
entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity
require that petitioner be relieved of vicarious liability for the consequences of the negligence
of ABAD in driving its vehicle.
Accordingly, in the absence of showing that Renante Bicomong was acting within the scope
of his assigned task at the time of the vehicular collision, defendants-appellees had no duty to
show that they exercised the diligence of a good father of a family in providing Renante
Bicomong with a service vehicle. Thus, the trial court did not err in holding that:
chanRoblesvirtualLawlibrary
'Under Article 2180, '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. 'In other words, for the employer to be
liable for the damages caused by his employee, the latter must have caused the damage in
the course of doing his assigned tasks or. in the performance of his duties.' (Yambao vs.
Zuñiga, G.R. No. 146173, December 11, 2003.)
In this case, it is.beyond cavil that the deceased Renante Bicong [sic] was not in the
performance of his duty on that fateful day of February 25, 2003. In the first place that day
was a holiday; there was no work and it was not shown that he was working as indeed his
work assignment [was as] operations manager of the company's plant in Cavite while the
accident happened while he was in Alaminos, Laguna on his way home to Candelaria,
Quezon. Secondly, as an operations manager, he was issued an executive car for his own
use, a Toyota Corolla vehicle and. he merely preferred to use the L-300 UV when going
home to his family in Quezon. Even assuming that the company allowed or tolerated this, by
itself, the tolerance did not make the employer liable in the absence of showing that he was
using the vehicle in the performance of a duty or within the scope of his assigned tasks. But
as clearly relayed by defendant's witnesses, defendants have no business or plant in
Quezon. The L-300 vehicle was for the hauling of items between their Pasig and Cavite
offices and was merely borrowed by Bicomong in going to Candelaria, Quezon on that day.
The accident having occurred outside Renante Bicomong's assigned tasks, defendant
employers cannot be held liable to the plaintiffs, even assuming that it is the fault of
defendants' employee that was the direct and proximate cause of their damages.'
In sum, squarely applicable in this case is the well-entrenched doctrine that the assessment
of the trial judge as to the issue of credibility binds the appellate court because he is in a
better position to decide the issue, having heard the witnesses and observed their
deportment and manner of testifying during the trial, except when the trial court has plainly
overlooked certain facts of substance and value, that, if considered, might affect the result of
the case, or where the assessment is clearly shown to be arbitrary. Plaintiffs-appellants have
not shown this case to fall under the exception.
WHEREFORE, the trial court's Decision dated April 4, 2011 is affirmed.
 in nature, this Court must review the case as the CA gravely erred in its appreciation of the
SO ORDERED.16chanroblesvirtuallawlibrary evidence and in concluding that respondents are not liable. Finally, they argue that URC
should be held liable for allowing "a non-employee to use for his personal use the vehicle
owned" by it.
Petitioners filed a Motion for Reconsideration, which the CA denied in its subsequent
December 28, 2012 Resolution. Hence, the present Petition.
Respondents' Arguments
Issues
Pleading affirmance, respondents argue in their Comment22 that the issues raised in the
Petition are factual in nature; that the collision occurred on a holiday and while Bicomong
In a July 14, 2014 Resolution,17 this Court resolved to give due course to the Petition, which
was. using the URC van for a purely personal purpose, it should be. sufficient to absolve
contains the following assignment of errors:
respondents of liability as evidently, Bicomong was not performing his official duties on that
day; that the totality of the evidence indicates that it was Sayson who was negligent in the
chanRoblesvirtualLawlibrary
operation of Greenstar's bus when the collision occurred; that Bicomong was not negligent in
I.
driving the URC van; that petitioners' objection - pertaining to their defense that the collision
occurred on a holiday, when Bicomong was not considered to be at work - was belatedly
THE HONORABLE COURT OF APPEALS ERRED IN ISSUING THE ASSAILED DECISION
raised; and that in any case, under Section 5, Rule 10 of the 1997 Rules, 23 their pleadings
AND RESOLUTION THAT RESPONDENTS ARE NOT LIABLE TO PETITIONERS FOR THE
should be deemed amended to conform to the evidence presented at the trial, which includes
DAMAGES THEY SUSTAINED CONSIDERING THAT THE ACCIDENT WAS ATTRIBUTED
proof that the accident occurred on a holiday and while Bicomong was not in the performance
TO THE NEGLIGENCE OF RENANTE BICOMONG.
of his official tasks and instead going home to his family in Quezon province.
II.
Our Ruling
THE HONORABLE COURT OF APPEALS ERRED IN ADMITTING DEFENSES NOT
The Court denies the Petition.
PLEADED IN THE MOTION TO DISMISS OR IN RESPONDENTS'
ANSWER.18chanroblesvirtuallawlibrary
In Caravan Travel and Tours International, Inc. v. Abejar,24 the Court made the following
relevant pronouncement:
Petitioners' Arguments
chanRoblesvirtualLawlibrary
Petitioners insist that respondents should be held liable for Bicomong's negligence under The resolution of this case must consider two (2) rules. First, Article 2180's
Articles 2176, 2180, and 2185 of the Civil Code; 19 that Bicomong's negligence was the direct specification that '[e]mployers shall be liable for the damages caused by their
and proximate eause of the accident, in that he unduly occupied the opposite lane which the employees ... acting within the scope of their assigned tasks [.]' Second, the operation
bus was lawfully traversing, thus resulting in the collision with Greenstar's bus; that of the registered-owner rule that registered owners are liable for death or injuries
Bicomong's driving on the opposite lane constituted a traffic violation, therefore giving rise to caused by the operation of their Vehicles.
the presumption of negligence on his part; that in view of this presumption, it became
incumbent upon respondents to rebut the same by proving that they exercised care and These rules appear to be in conflict when it comes to cases in which the employer is also the
diligence in the selection and supervision of their employees; that in their respective answers registered owner of a vehicle. Article 2180 requires proof of two things: first, an employment
and motion to dismiss, respondents did not allege the defense, which they tackled only during relationship between the driver and the owner; and second, that the driver acted within the
trial, that since February 25, 2003 was a declared national holiday, then Bicomong was not scope of his or her assigned tasks. On the other hand, applying the registered-owner rule
acting within the scope of his assigned tasks at the time of the collision; that for failure to only requires the plaintiff to prove that the defendant-employer is the registered owner of the
plead this defense or allegation in their respective answers and pleadings, it is deemed vehicle.
waived pursuant to Section 1, Rule 9 of the 1997 Rules of Civil Procedure 20 (1997 Rules);
that just the same, respondents failed to prove that Bicomong was not in the official .WON URC is liable for the damages. NO
performance of his duties or that the URC van was not officially issued to him at the time of
the accident - and for this reason, the presumption of negligence was not overturned; and The registered-owner rule was articulated as early as 1957 in Erezo, et al. v.
that URC should be held liable as the registered owner of the van. Jepte,25cralawred where this court explained that the registration of motor vehicles, as
required by Section 5(a) of Republic Act No. 41365 the  and Transportation and Traffic Code,
In their Reply,21 petitioners add that while some of the issues raised in the Petition are factual
was necessary 'not to make said registration the operative act by which ownership in vehicles Therefore, the appropriate approach is that in cases where both the registered-owner
is transferred, ... but to permit the use and operation of the vehicle upon any public highway[.]' rule and Article 2180 apply, the plaintiff must first establish that the employer is the
Its 'main aim ... is to identify the owner so that if any accident happens, or that any damage or registered owner of the vehicle in question. Once the plaintiff successfully proves
injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on ownership, there arises a disputable presumption that the requirements of Article 2180
a definite individual, the registered owner.' have been proven. As a consequence, the burden of proof shifts to the defendant to
show that no liability under Article 2180 has arisen.
x x x x
This disputable presumption, insofar as the registered owner of the vehicle in relation to the
Aguilar, Sr. v. Commercial Savings Bank 26 recognized the seeming conflict between Article actual driver is concerned, recognizes that between the owner and the victim, it is the former
2180 and the registered-owner rule and applied the latter. that should carry the costs of moving forward with the evidence. The victim is, in many cases,
a hapless pedestrian or motorist with hardly any means to uncover the employment
x x x x relationship of the owner and the driver, or any act that the owner may have done in relation
to that employment.
Preference for the registered-owner rule became more pronounced in Del Carmen, Jr. v.
Bacoy:27chanrobleslaw The registration of the vehicle, on the other hand, is accessible to the public.

x x x x Here, respondent presented a copy of the Certificate of Registration of the van that hit Reyes.
The Certificate attests to petitioner's ownership of the van. Petitioner itself did not dispute its
Filcar Transport Services v. Espinas28 stated that the registered owner of a vehicle can no ownership of the van. Consistent with the rule we have just stated, a presumption that the
longer use the defenses found in Article 2180: requirements of Article 2180 have been satisfied arises. It is now up to petitioner to establish
that it incurred no liability under Article 2180. This it can do by presenting proof of any of
chanRoblesvirtualLawlibraryx x x x the following: first, that it had no employment relationship with Bautista; second, that
Bautista acted outside the scope of his assigned tasks; or third, that it exercised the
Mendoza v. Spouses Gomez29 reiterated this doctrine. diligence of a good father of a family in the selection and supervision of
Bautista. (Emphasis supplied)
However, Aguilar, Sr., Del Carmen, Filcar, and Mendoza should not be taken to mean that
Article 2180 of the Civil Code should be completely discarded in cases where the registered- In the present case, it has been established that on the day of the collision -or on February
owner rule finds application. 25, 2003 - URC was the registered owner of the URC van, although it appears that it was
designated for use by NURC, as it was officially assigned to the latter's Logistics Manager,
As acknowledged in Filcar, there is no categorical statutory pronouncement in the Land Florante Soro-Soro (Soro-Soro); that Bicomong was the Operations Manager of NURC and
Transportation and Traffic Code stipulating the liability of a registered owner. The source of a assigned to the First Cavite Industrial Estate; that there was no work as the day was declared
registered owner's liability is not a distinct statutory provision, but remains to be Articles 2176 a national holiday; that Bicomong was on his way home to his family in Quezon province; that
and 2180 of the Civil Code: the URC van was not assigned to Bicompng as well, but solely for Soro-Soro's official use;
that the company service vehicle officially assigned to Bicomong was a Toyota Corolla, which
chanRoblesvirtualLawlibrary he left at the Cavite plant and instead, he used the URC van; and that other than the Cavite
While Republic Act No. 4136 or the Land Transportation and Traffic Code does not contain plant, there is no other NURC plant in the provinces of Quezon, Laguna or Bicol.
any provision on the liability of registered owners in case of motor vehicle mishaps, Article
2176, in relation with Article 2180, of the Civil Code imposes an obligation upon Filcar, as Applying the above pronouncement in the Caravan Travel and Tours case, it must be said
registered owner, to answer for the damages caused to Espinas' car. that when by evidence the ownership of the van and Bicomong's employment were proved,
Thus, it is imperative to apply the registered-owner rule in a manner that harmonizes it with the presumption of negligence on respondents' part attached, as the registered owner of the
Articles 2176 and 2180 of the Civil Code. Rules must be construed in a manner that will van. and as Bicomong's employer. Hie burden of proof then shifted to respondents to show
harmonize them with other rules so as to form a uniform and consistent system of that no liability under Article 2180 arose. This may be done by proof of any of the following:
jurisprudence. In light of this, the words used in Del Carmen are particularly notable. There,
this court stated that Article 2180 'should defer to' the registered-owner rule. It never stated chanRoblesvirtualLawlibrary
that Article 2180 should be totally abandoned. 1. That they had no employment relationship with Bicomong; or
2. That Bicomong acted outside the scope of his assigned tasks; or
3. That they exercised the diligence of a good father of a family in the selection and
supervision of Bicomong.
In denying liability, respondents claimed in their respective answers the defense of absence
of negligence on their part. During trial, they presented evidence to the effect that on the day
of the collision, which was a declared national non-working holiday, Bicomong was not
perforating Ms work, but was on his way home to Quezon on a personal undertaking, that is,
to give money to his daughter and spend the holiday with his family; and that the vehicle he
was driving was not an NURC vehicle, nor was it assigned to him, but was registered to URC
and assigned to its Logistics Manager, Soro-Soro, Petitioners object to this, claiming that this
defense was not alleged in the respondents' respective answers. The Court disagrees, The
failure to allege these facts in the answers does not preclude, respondents from proving them
during trial; these facts are precisely illustrative of their defense of absence of negligence.
Just the same, petitioners' failure to object to the respondents' presentation of such evidence
below is tantamount to a waiver; Section 5, Rule 10 of the 1997 Rules - on amendments to
conform to or authorize presentation of evidence - will have to apply, but the failure to amend
the pleadings does not affect the result of the trial of these issues.
The failure of a party to amend a pleading to conform to the evidence adduced during trial
does not preclude an adjudication by the court on the basis of such evidence which may
embody new issues not raised in the pleadings, or serve as a basis for a higher award of
damages. Although the pleading may not have been amended to conform to the evidence
submitted during trial, judgment may nonetheless be rendered, not simply on the basis of the
issues alleged but also on the basis of issues discussed and the assertions of fact proved in
the course of trial. The court may treat the pleading as if it had been amended to conform to
the evidence, although it had not been actually so amended, x x x30
Respondents succeeded in overcoming the presumption of negligence, having shown that
when the collision took place, Bicomong was not in the performance of his work; that he was
in possession of a service vehicle that did not belong to his employer NURC, but to URC, and
which vehicle was not officially assigned to him, but to another employee; that his use of the
URC van was unauthorized - even if he had used the same vehicle in furtherance of a
personal undertaking in the past,31 this does not amount to implied permission; that the
accident occurred on a holiday and while Bicomong was on his way home to his family in
Quezon province; and that Bicomong had no official business whatsoever in his hometown in
Quezon, or in Laguna where the collision occurred, his area of operations being limited to the
Cavite area.
On the other hand, the evidence suggests that the collision could have been avoided if
Sayson exercised care and prudence, given the circumstances and information that he had
immediately prior to the accident. From the trial court's findings and evidence on record, it
would appear that immediately prior to the collision, which took place very early in the
morning - or at around 6:50 a.m., Sayson saw that the URC van was traveling fast Quezon-
bound on the shoulder of the opposite lane about 250 meters away from him; that at this
point, Sayson was driving the Greenstar bus Manila-bound at 60 kilometers per hour; that
Sayson knew that the URC van was traveling fast as it was creating dust clouds from
traversing the shoulder of the opposite lane; that Sayson saw the URC van get back into its
proper lane but directly toward him; that despite being apprised of the foregoing information,
Sayson, instead of slowing down, maintained his speed and tried to swerve the Greenstar
bus, but found it difficult to do so at his speed; that the collision or point of impact occurred
right in the middle of the road;32 and that Sayson absconded from the scene immediately after
the collision.
From the foregoing facts, one might think that from the way he was driving immediately
before the collision took place, Bicomong could have fallen asleep or ill at the wheel, which
led him to gradually steer the URC van toward the shoulder of the highway; and to get back
to the road after realizing his mistake, Bicomong must have overreacted, thus
overcompensating or oversteering to the left, or toward the opposite lane and right into
Sayson's bus. Given the premise of dozing off or falling ill, this explanation is not far-fetched.
The collision occurred very early in the morning in Alaminos, Laguna. Sayson himself testified
that he found Bicomong driving on the service road or shoulder of the highway 250 meters
away, which must have been unpaved, as it caused dust clouds to rise on the heels of the
URC van. And these dust clouds stole Sayson's attention, leading him to conclude that the
van was running at high speed. At any rate, the evidence places the point of impact very near
the middle of the road or just within Sayson's lane. In other words, the collision took place
with Bicomong barely encroaching on Sayson's lane. This means that prior to and at the time
of collision, Sayson did not take any defensive maneuver to prevent the accident and
minimize the impending damage to life and property, which resulted in the collision in the
middle of the highway, where a vehicle would normally be traversing. If Sayson took
defensive measures, the point of impact should have occurred further inside his lane or not at
the front of the bus - but at its side, which should have shown that Sayson either slowed
down or swerved to the right to avoid a collision.
Despite having seen Bicomong drive the URC van in a precarious manner while the same
was still a good 250 meters away from his bus, Sayson did not take the necessary
precautions, as by reducing speed and adopting a defensive stance to avert any untoward
incident that may occur from Bicomong's manner of driving. This is precisely his testimony
during trial. When the van began to swerve toward his bus, he did not reduce speed nor
swerve his bus to avoid collision. Instead, he maintained his current speed and course, and
for this reason., the inevitable took place: An experienced driver who is. presented with the
same facts would have adopted an attitude consistent with a desire to preserve life and
property; for common carriers, the diligence demanded is of the highest degree.
The law exacts from common carriers (i.e., those persons, corporations, firms, or
associations engaged in the business of carrying or transporting passengers or goods or
both, by land, water, or air, for compensation, offering their services to the public) the highest
degree of diligence (i.e., extraordinary diligence) in ensuring the safety of its passengers.
Articles 1733 and 1755 of the Civil Code state:ChanRoblesVirtualawlibrary
Art. 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary, diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to all the circumstances of each
case.

Art. 1755. A common carrier is bound to carry the passengers safely as far as human care
arid foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
In this relation, Article 1756 of the Civil Code provides that '[i]n case of death of or injuries to
passengers, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as prescribed in
Articles 1733 and 1755. xxx'33chanroblesvirtuallawlibrary

However, Sayson took no defensive maneuver whatsoever in spite of the fact that he saw
Bicomong drive his van in a precarious manner, as far as 250 meters away - or at a point in
time and space where Sayson had all the opportunity to prepare and avert a possible
collision. The collision was certainly foreseen and avoidable but Sayson took no measures to
avoid it. Rather than exhibit concern for the welfare of his passengers and the driver of the
oncoming vehicle, who might have fallen asleep or suddenly fallen ill at the wheel, Sayson
coldly and uncaringly stood his ground^ closed his eyes, and left everything to fate, without
due regard for the consequences. Such a suicidal mindset cannot be tolerated, for the grave
danger it poses to the public and passengers availing of petitioners' services. To add insult to
injury, Sayson hastily fled the scene of the collision instead of rendering assistance to the
victims - thus exhibiting a selfish, cold-blooded attitude and utter lack of concern motivated by
the self-centered desire to escape liability, inconvenience, and possible detention by the
authorities, rather than secure the well-being of the victims of his own negligent act.

x x x The doctrine of last clear chance provides that where both parties are negligent but the
negligent act of one is appreciably later in point of time than that of the other, or where it is
impossible to determine whose fault or negligence brought about the occurrence of the
incident, the one who had the last clear opportunity to avoid the impending harm but failed to
do so, is chargeable with the consequences arising therefrom. Stated differently, the rule is
that the antecedent negligence of a person does not preclude recovery of damages caused
by the supervening negligence of the latter, who had the last fair chance to prevent the
impending harm by the exercise of due diligence, x x x34

Petitioners might object to the treatment of their case in the foregoing manner, what with the
additional finding that Sayson was negligent under the circumstances. But their Petition, 
"once accepted by this Court, throws the entire case open to review, and xxx this Court has
the authority to review matters not specifically raised or assigned as error by the parties, if
their consideration is necessary in arriving at a just resolution of the case." 35chanrobleslaw

WHEREFORE, the Petition is DENIED. The September 26, 2012 Decision and December 28,
2012 Resolution of the Court of Appeals in CA-G.R. CV No. 96961 are AFFIRMED in toto.

SO ORDERED.chanRoblesvirtualLawlibrary