Professional Documents
Culture Documents
Considering that plaintiffs Word for the World Christian Fellowship, Inc.
and Ms. Amyline Antonio were the only ones who adduced evidence in
support of their claim for damages, the Court is therefore not in a position
to award damages to the other plaintiffs.
WHEREFORE, premises considered, the Court hereby renders judgment
against defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y
Jamil pursuant to articles 2176 and 2180 of the Civil Code of the
Philippines and said defendants are ordered to pay jointly and severally
to the plaintiffs the following amount:
1) P93,657.11 as compensatory and actual damages;
2) P500,000.00 as the reasonable amount of loss of earning capacity of
plaintiff Amyline Antonio;
3) P20,000.00 as moral damages;
4) P20,000.00 as exemplary damages; and
5) 25% of the recoverable amount as attorneys fees;
6) Costs of suit.
SO ORDERED.
The Court of Appeals affirmed the decision of the trial court with respect
to Amyline Antonio but dismissed it with respect to the other plaintiffs on
the ground that they failed to prove their respective claims. The Court of
Appeals modified the award of damages as follows:
1) P93,657.11 as actual damages;
2) P600,000.00 as compensatory damages;
3) P50,000.00 as moral damages;
4) P20,000.00 as exemplary damages;
5) P10,000.00 as attorneys fees; and
6) Costs of suit.
The Court of Appeals sustained the trial courts finding that petitioner
Cabil failed to exercise due care and precaution in the operation of his
vehicle considering the time and the place of the accident. The Court of
Appeals held that the Fabres were themselves presumptively negligent.
Hence, this petition. Petitioners raise the following issues:
I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.
II. WHETHER OR NOT PETITIONERS WERE LIABLE FOR THE
INJURIES SUFFERED BY PRIVATE RESPONDENTS.
III. WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE
POSITIVE, UP TO WHAT EXTENT.
Petitioners challenge the propriety of the award of compensatory
damages in the amount of P600,000.00. It is insisted that, on the
assumption that petitioners are liable, an award of P600,000.00 is
unconscionable and highly speculative. Amyline Antonio testified that she
was a casual employee of a company called Suaco, earning P1,650.00 a
month, and a dealer of Avon products, earning an average of P1,000.00
monthly. Petitioners contend that as casual employees do not have
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La
Union, apparently did not consider the fact that Cabil had been driving for
school children only, from their homes to the St. Scholasticas College in
Metro Manila.[if !supportFootnotes][7][endif] They had hired him only after a two-week
apprenticeship. They had tested him for certain matters, such as whether
he could remember the names of the children he would be taking to
school, which were irrelevant to his qualification to drive on a long
distance travel, especially considering that the trip to La Union was his
first. The existence of hiring procedures and supervisory policies cannot
be casually invoked to overturn the presumption of negligence on the part
of an employer.[if !supportFootnotes][8][endif]
Petitioners argue that they are not liable because (1) an earlier departure
(made impossible by the congregations delayed meeting) could have
averted the mishap and (2) under the contract, the WWCF was directly
responsible for the conduct of the trip. Neither of these contentions hold
water. The hour of departure had not been fixed. Even if it had been, the
delay did not bear directly on the cause of the accident. With respect to
the second contention, it was held in an early case that:
[A] person who hires a public automobile and gives the driver directions
as to the place to which he wishes to be conveyed, but exercises no
other control over the conduct of the driver, is not responsible for acts of
negligence of the latter or prevented from recovering for injuries suffered
from a collision between the automobile and a train, caused by the
negligence either of the locomotive engineer or the automobile driver.[if !
supportFootnotes][9][endif]
i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population.
We think that Article 1732 deliberately refrained from making such
distinctions.
As common carriers, the Fabres were bound to exercise extraordinary
diligence for the safe transportation of the passengers to their destination.
This duty of care is not excused by proof that they exercised the diligence
of a good father of the family in the selection and supervision of their
employee. As Art. 1759 of the Code provides:
Common carriers are liable for the death of or injuries to passengers
through the negligence or wilful acts of the formers employees, although
such employees may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and
supervision of their employees.
The same circumstances detailed above, supporting the finding of the
trial court and of the appellate court that petitioners are liable under Arts.
2176 and 2180 for quasi delict, fully justify finding them guilty of breach of
contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.
Secondly, we sustain the award of damages in favor of Amyline Antonio.
However, we think the Court of Appeals erred in increasing the amount of
compensatory damages because private respondents did not question
this award as inadequate.[if !supportFootnotes][11][endif] To the contrary, the award of
P500,000.00 for compensatory damages which the Regional Trial Court
made is reasonable considering the contingent nature of her income as a
casual employee of a company and as distributor of beauty products and
the fact that the possibility that she might be able to work again has not
been foreclosed. In fact she testified that one of her previous employers
had expressed willingness to employ her again.
With respect to the other awards, while the decisions of the trial court and
the Court of Appeals do not sufficiently indicate the factual and legal
basis for them, we find that they are nevertheless supported by evidence
in the records of this case. Viewed as an action for quasi delict, this case
falls squarely within the purview of Art. 2219(2) providing for the payment
of moral damages in cases of quasi delict. On the theory that petitioners
are liable for breach of contract of carriage, the award of moral damages
is authorized by Art. 1764, in relation to Art. 2220, since Cabils gross
negligence amounted to bad faith.[if !supportFootnotes][12][endif] Amyline Antonios
testimony, as well as the testimonies of her father and co-passengers,
fully establish the physical suffering and mental anguish she endured as
a result of the injuries caused by petitioners negligence.
The award of exemplary damages and attorneys fees was also properly
made. However, for the same reason that it was error for the appellate
The trial court was therefore right in finding that Manalo [the driver] and
spouses Mangune and Carreon [the jeepney owners] were negligent.
However, its ruling that spouses Mangune and Carreon are jointly and
severally liable with Manalo is erroneous. The driver cannot be held
jointly and severally liable with the carrier in case of breach of the
contract of carriage. The rationale behind this is readily discernible.
Firstly, the contract of carriage is between the carrier and the passenger,
and in the event of contractual liability, the carrier is exclusively
responsible therefore to the passenger, even if such breach be due to the
negligence of his driver (see Viluan v. The Court of Appeals, et al., G.R.
Nos. L-21477-81, April 29, 1966, 16 SCRA 742) . . .[if !supportFootnotes][22][endif]
As in the case of BLTB, private respondents in this case and her coplaintiffs did not stake out their claim against the carrier and the driver
exclusively on one theory, much less on that of breach of contract alone.
After all, it was permitted for them to allege alternative causes of action
and join as many parties as may be liable on such causes of action[if !
supportFootnotes][23][endif] so long as private respondent and her co-plaintiffs do
not recover twice for the same injury. What is clear from the cases is the
intent of the plaintiff there to recover from both the carrier and the driver,
thus justifying the holding that the carrier and the driver were jointly and
severally liable because their separate and distinct acts concurred to
produce the same injury.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED
with MODIFICATION as to the award of damages. Petitioners are
ORDERED to PAY jointly and severally the private respondent Amyline
Antonio the following amounts:
1) P93,657.11 as actual damages;
2) P500,000.00 as the reasonable amount of loss of earning capacity of
plaintiff Amyline Antonio;
3) P20,000.00 as moral damages;
4) P20,000.00 as exemplary damages;
5) 25% of the recoverable amount as attorneys fees; and
6) costs of suit.
SO ORDERED.
DECISION
CAMPOS, JR., J p:
This is a petition for review on certiorari of the decision ** of the Court of
Appeals in "RODOLFO A. CIPRIANO, doing business under the name
CIPRIANO TRADING ENTERPRISES plaintiff-appellee, vs.
ESTRELLITA M. BASCOS, doing business under the name of BASCOS
TRUCKING, defendant-appellant," C.A.-G.R. CV No. 25216, the
dispositive portion of which is quoted hereunder:
"PREMISES considered, We find no reversible error in the decision
appealed from, which is hereby affirmed in toto. Costs against appellant."
1
The facts, as gathered by this Court, are as follows:
Rodolfo A. Cipriano representing Cipriano Trading Enterprise
(CIPTRADE for short) entered into a hauling contract 2 with Jibfair
Shipping Agency Corporation whereby the former bound itself to haul the
latter's 2,000 m/tons of soya bean meal from Magallanes Drive, Del Pan,
Manila to the warehouse of Purefoods Corporation in Calamba, Laguna.
To carry out its obligation, CIPTRADE, through Rodolfo Cipriano,
subcontracted with Estrellita Bascos (petitioner) to transport and to
deliver 400 sacks of soya bean meal worth P156,404.00 from the Manila
Port Area to Calamba, Laguna at the rate of P50.00 per metric ton.
Petitioner failed to deliver the said cargo. As a consequence of that
failure, Cipriano paid Jibfair Shipping Agency the amount of the lost
goods in accordance with the contract which stated that:
"1. CIPTRADE shall be held liable and answerable for any loss in bags
due to theft, hijacking and non-delivery or damages to the cargo during
transport at market value, . . ." 3
Cipriano demanded reimbursement from petitioner but the latter refused
to pay. Eventually, Cipriano filed a complaint for a sum of money and
damages with writ of preliminary attachment 4 for breach of a contract of
carriage. The prayer for a Writ of Preliminary Attachment was supported
by an affidavit 5 which contained the following allegations:
"4. That this action is one of those specifically mentioned in Sec. 1, Rule
57 the Rules of Court, whereby a writ of preliminary attachment may
lawfully issue, namely:
"(e) in an action against a party who has removed or disposed of his
property, or is about to do so, with intent to defraud his creditors;"
5. That there is no sufficient security for the claim sought to be enforced
by the present action;
6. That the amount due to the plaintiff in the above-entitled case is above
all legal counterclaims;"
The trial court granted the writ of preliminary attachment on February 17,
1987.
In her answer, petitioner interposed the following defenses: that there
The petition presents the following issues for resolution: (1) was petitioner
a common carrier?; and (2) was the hijacking referred to a force
majeure?
The Court of Appeals, in holding that petitioner was a common carrier,
found that she admitted in her answer that she did business under the
name A.M. Bascos Trucking and that said admission dispensed with the
presentation by private respondent, Rodolfo Cipriano, of proofs that
petitioner was a common carrier. The respondent Court also adopted in
toto the trial court's decision that petitioner was a common carrier,
Moreover, both courts appreciated the following pieces of evidence as
indicators that petitioner was a common carrier: the fact that the truck
driver of petitioner, Maximo Sanglay, received the cargo consisting of 400
bags of soya bean meal as evidenced by a cargo receipt signed by
Maximo Sanglay; the fact that the truck helper, Juanito Morden, was also
an employee of petitioner; and the fact that control of the cargo was
placed in petitioner's care.
In disputing the conclusion of the trial and appellate courts that petitioner
was a common carrier, she alleged in this petition that the contract
between her and Rodolfo A. Cipriano, representing CIPTRADE, was
lease of the truck. She cited as evidence certain affidavits which referred
to the contract as "lease". These affidavits were made by Jesus Bascos 8
and by petitioner herself. 9 She further averred that Jesus Bascos
confirmed in his testimony his statement that the contract was a lease
contract. 10 She also stated that: she was not catering to the general
public. Thus, in her answer to the amended complaint, she said that she
does business under the same style of A.M. Bascos Trucking, offering
her trucks for lease to those who have cargo to move, not to the general
public but to a few customers only in view of the fact that it is only a small
business. 11
We agree with the respondent Court in its finding that petitioner is a
common carrier.
Article 1732 of the Civil Code defines a common carrier as "(a) person,
corporation or firm, or association 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 test to determine
a common carrier is "whether the given undertaking is a part of the
business engaged in by the carrier which he has held out to the general
public as his occupation rather than the quantity or extent of the business
transacted." 12 In this case, petitioner herself has made the admission
that she was in the trucking business, offering her trucks to those with
cargo to move. Judicial admissions are conclusive and no evidence is
required to prove the same. 13
But petitioner argues that there was only a contract of lease because they
offer their services only to a select group of people and because the
private respondents, plaintiffs in the lower court, did not object to the
presentation of affidavits by petitioner where the transaction was referred
to as a lease contract.
Regarding the first contention, the holding of the Court in De Guzman vs.
Court of Appeals 14 is instructive. In referring to Article 1732 of the Civil
Code, it held thus:
"The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity (in local idiom, as a
"sideline"). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population.
We think that Article 1732 deliberately refrained from making such
distinctions."
Regarding the affidavits presented by petitioner to the court, both the trial
and appellate courts have dismissed them as self-serving and petitioner
contests the conclusion. We are bound by the appellate court's factual
conclusions. Yet, granting that the said evidence were not self-serving,
the same were not sufficient to prove that the contract was one of lease.
It must be understood that a contract is what the law defines it to be and
not what it is called by the contracting parties. 15 Furthermore, petitioner
presented no other proof of the existence of the contract of lease. He who
alleges a fact has the burden of proving it. 16
Likewise, We affirm the holding of the respondent court that the loss of
the goods was not due to force majeure.
Common carriers are obliged to observe extraordinary diligence in the
vigilance over the goods transported by them. 17 Accordingly, they are
presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated. 18 There are very few instances when
the presumption of negligence does not attach and these instances are
enumerated in Article 1734. 19 In those cases where the presumption is
applied, the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption.
In this case, petitioner alleged that hijacking constituted force majeure
which exculpated her from liability for the loss of the cargo. In De
Guzman vs. Court of Appeals, 20 the Court held that hijacking, not being
included in the provisions of Article 1734, must be dealt with under the
provisions of Article 1735 and thus, the common carrier is presumed to
have been at fault or negligent. To exculpate the carrier from liability
arising from hijacking, he must prove that the robbers or the hijackers
"x x x x x x x x x
"Based on the foregoing disquisitions and considering the circumstances
that the appellee trucking corporation has been `its exclusive contractor,
hauler since 1970, defendant has no choice but to comply with the
directive of its principal, the inevitable conclusion is that the appellee is a
private carrier.
"x x x x x x x x x
"x x x the lower court correctly ruled that 'the application of the law on
common carriers is not warranted and the presumption of fault or
negligence on the part of a common carrier in case of loss, damage or
deterioration of good[s] during transport under [article] 1735 of the Civil
Code is not availing.' x x x.
"Finally, We advert to the long established rule that conclusions and
findings of fact of a trial court are entitled to great weight on appeal and
should not be disturbed unless for strong and valid reasons."[if !supportFootnotes]
[5][endif]
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 P97,910.00 as actual damages, representing the cost of repair,
with interest at 6% per annum from the date the complaint was filed;
P50,000.00 as moral damages; P20,000.00 as exemplary damages; and
P20,000.00 as attorneys fees. The MeTC ruled that Filcar, as the
registered owner of the vehicle, is primarily responsible for damages
resulting from the vehicles 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 vehicles 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 employeremployee 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 Filcars 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 ones 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 ones 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 acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry.
xxxx
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.
Under Article 2176, in relation with Article 2180, of the Civil Code, an
action predicated on an employees act or omission may be instituted
against the employer who is held liable for the negligent act or omission
committed by his employee.
Although the employer is not the actual tortfeasor, the law makes him
vicariously liable on the basis of the civil law principle of pater familias for
failure to exercise due care and vigilance over the acts of ones
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 diligence of a good father of a family to prevent
damage.
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 driver of
its vehicle at the time of the accident, Floresca, is not its employee but
that of its Corporate Secretary, Atty. Flor.
We cannot agree. It is well settled that in case of motor vehicle mishaps,
the registered owner of the motor vehicle is considered as the employer
of the tortfeasor-driver, and is made primarily liable for the tort committed
by the latter under Article 2176, in relation with Article 2180, of the Civil
Code.
In Equitable Leasing Corporation v. Suyom,11 we ruled that in so far as
third persons are concerned, the registered owner of the motor vehicle is
the employer of the negligent driver, and the actual employer is
considered merely as an agent of such owner.
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, Equitable claimed that the
tractor was initially leased to Mr. Edwin Lim under a Lease Agreement,
which agreement has been overtaken by a Deed of Sale entered into by
Equitable and Ecatine Corporation (Ecatine). Equitable argued that it
cannot be held liable for damages because the tractor had already been
sold to Ecatine at the time of the accident and the negligent driver was
not its employee but of Ecatine.
In upholding the liability of Equitable, as registered owner of the tractor,
this Court said that "regardless of sales made of a motor vehicle, the
registered owner is the lawful operator insofar as the public and third
persons are concerned; consequently, it is directly and primarily
responsible for the consequences of its operation."12 The Court further
stated that "[i]n contemplation of law, the owner/operator of record is the
employer of the driver, the 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 employer of the driver, Raul Tutor; Ecatine, Tutors actual employer,
was deemed merely as an agent of Equitable.
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 labor relations law,
is not required. It is sufficient to establish that Filcar is the registered
owner of the motor vehicle causing damage in order that it may be held
vicariously liable under Article 2180 of the Civil Code.
Rationale for holding the registered owner vicariously liable
The rationale for the rule that a registered owner is vicariously liable for
damages caused by 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:
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. [emphasis ours]
Thus, whether there is an employer-employee relationship between the
registered owner and the driver is irrelevant in determining the liability of
the registered owner who the law holds primarily and directly responsible
for any accident, injury or death caused by the operation of the vehicle in
The trial court rendered judgment for PCIC and ordered the complaint
dismissed, thus:
WHEREFORE, the complaint of the plaintiff, and the respective
counterclaims of the two defendants are dismissed, with costs against the
plaintiff.
SO ORDERED.29
According to the trial court, the loss of the shipment contained in Crate
No. 1 was due to the internal defect and weakness of the materials used
in the fabrication of the crates. The middle wooden batten had a hole
(bukong-bukong). The trial court rejected the certification30 of the shipper,
stating that the shipment was properly packed and secured, as mere
hearsay and devoid of any evidentiary weight, the affiant not having
testified.
Not satisfied, PCIC appealed31 to the CA which rendered judgment on
January 19, 2004 affirming in toto the appealed decision, with this fallo
WHEREFORE, the decision of the Regional Trial Court of Manila, Branch
35, dated February 17, 1997, is AFFIRMED.
SO ORDERED.32
The appellate court held, inter alia, that it was bound by the finding of
facts of the RTC, especially so where the evidence in support thereof is
more than substantial. It ratiocinated that the loss of the shipment was
due to an excepted cause "[t]he character of the goods or defects in the
packing or in the containers" and the failure of the shipper to indicate
signs to notify the stevedores that extra care should be employed in
handling the shipment.33 It blamed the shipper for its failure to use
materials of stronger quality to support the heavy machines and to
indicate an arrow in the middle portion of the cargo where additional
slings should be attached.34 The CA concluded that common carriers are
not absolute insurers against all risks in the transport of the goods.35
Hence, this petition by the PCIC, where it alleges that:
I.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW
IN NOT HOLDING THAT RESPONDENT COMMON CARRIER IS
LIABLE FOR THE DAMAGE SUSTAINED BY THE SHIPMENT IN THE
POSSESSION OF THE ARRASTRE OPERATOR.
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW
IN NOT APPLYING THE STATUTORY PRESUMPTION OF FAULT AND
NEGLIGENCE IN THE CASE AT BAR.
III.
THE COURT OF APPEALS GROSSLY MISCOMPREHENDED THE
FACTS IN FINDING THAT THE DAMAGE SUSTAINED BY THE
[SHIPMENT] WAS DUE TO ITS DEFECTIVE PACKING AND NOT TO
THE FAULT AND NEGLIGENCE OF THE RESPONDENTS.36
The petitioner asserts that the mere proof of receipt of the shipment by
the common carrier (to the carrier) in good order, and their arrival at the
place of destination in bad order makes out a prima facie case against it;
in such case, it is liable for the loss or damage to the cargo absent
satisfactory explanation given by the carrier as to the exercise of
extraordinary diligence. The petitioner avers that the shipment was
sufficiently packed in wooden boxes, as shown by the fact that it was
accepted on board the vessel and arrived in Manila safely. It emphasizes
that the respondents did not contest the contents of the bill of lading, and
that the respondents knew that the manner and condition of the packing
of the cargo was normal and barren of defects. It maintains that it
behooved the respondent ICTSI to place three to four cables or wire
slings in equal settings, including the center portion of the crate to
prevent damage to the cargo:
[A] simple look at the manifesto of the cargo and the bill of lading
would have alerted respondents of the nature of the cargo consisting of
thick and heavy machinery. Extra-care should have been made and
extended in the discharge of the subject shipment. Had the respondent
only bothered to check the list of its contents, they would have been
nervous enough to place additional slings and cables to support those
massive machines, which were composed almost entirely of thick steel,
clearly intended for heavy industries. As indicated in the list, the boxes
contained one lat[h]e machine, one milling machine and one grinding
machine-all coming with complete parts and accessories. Yet, not one
among the respondents were cautious enough. Here lies the utter failure
of the respondents to observed extraordinary diligence in the handling of
the cargo in their custody and possession, which the Court of Appeals
should have readily observed in its appreciation of the pertinent facts.37
The petitioner posits that the loss/damage was caused by the
mishandling of the shipment by therein respondent ICTSI, the arrastre
operator, and not by its negligence.
The petitioner insists that the respondents did not observe extraordinary
diligence in the care of the goods. It argues that in the performance of its
obligations, the respondent ICTSI should observe the same degree of
diligence as that required of a common carrier under the New Civil Code
of the Philippines. Citing Eastern Shipping Lines, Inc. v. Court of
Appeals,38 it posits that respondents are liable in solidum to it, inasmuch
as both are charged with the obligation to deliver the goods in good
condition to its consignee, BMICI.
Respondent NSCP counters that if ever respondent ICTSI is adjudged
liable, it is not solidarily liable with it. It further avers that the "carrier
cannot discharge directly to the consignee because cargo discharging is
the monopoly of the arrastre." Liability, therefore, falls solely upon the
shoulder of respondent ICTSI, inasmuch as the discharging of cargoes
from the vessel was its exclusive responsibility. Besides, the petitioner is
raising questions of facts, improper in a petition for review on certiorari.39
Respondent ICTSI avers that the issues raised are factual, hence,
improper under Rule 45 of the Rules of Court. It claims that it is merely a
depository and not a common carrier; hence, it is not obliged to exercise
extraordinary diligence. It reiterates that the loss/damage was caused by
the failure of the shipper or his packer to place a sign on the sides and
middle portion of the crate that extra care should be employed in handling
the shipment, and that the middle wooden batten on the flooring of the
crate had a hole. The respondent asserts that the testimony of Anthony
Abarquez, who conducted his investigation at the site of the incident,
should prevail over that of Rolando Balatbat. As an alternative, it argues
that if ever adjudged liable, its liability is limited only to P3,500.00 as
expressed in the liability clause of Gate Pass CFS-BR-GP No. 319773.
The petition has no merit.
The well-entrenched rule in our jurisdiction is that only questions of law
may be entertained by this Court in a petition for review on certiorari. This
rule, however, is not ironclad and admits certain exceptions, such as
when (1) the conclusion is grounded on speculations, surmises or
conjectures; (2) the inference is manifestly mistaken, absurd or
impossible; (3) there is grave abuse of discretion; (4) the judgment is
based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) there is no citation of specific evidence on which the
factual findings are based; (7) the findings of absence of facts are
contradicted by the presence of evidence on record; (8) the findings of
the Court of Appeals are contrary to those of the trial court; (9) the Court
of Appeals manifestly overlooked certain relevant and undisputed facts
that, if properly considered, would justify a different conclusion; (10) the
findings of the Court of Appeals are beyond the issues of the case; and
(11) such findings are contrary to the admissions of both parties.40
We have reviewed the records and find no justification to warrant the
application of any exception to the general rule.
We agree with the contention of the petitioner that common carriers, from
the nature of their business and for reasons of public policy, are
mandated 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.41 The Court has defined
extraordinary diligence in the vigilance over the goods as follows:
The extraordinary diligence in the vigilance over the goods tendered for
shipment requires the common carrier to know and to follow the required
precaution for avoiding damage to, or destruction of the goods entrusted
to it for sale, carriage and delivery. It requires common carriers to render
service with the greatest skill and foresight and "to use all reasonable
means to ascertain the nature and characteristic of goods tendered for
the petitioner, the latter represented and warranted that the goods were
properly packed, and disclosed in writing the "condition, nature, quality or
characteristic that may cause damage, injury or detriment to the goods."
Absent any signs on the shipment requiring the placement of a sling
cable in the mid-portion of the crate, the respondent ICTSI was not
obliged to do so.
The statement in the Bill of Lading, that the shipment was in apparent
good condition, is sufficient to sustain a finding of absence of defects in
the merchandise. Case law has it that such statement will create a prima
facie presumption only as to the external condition and not to that not
open to inspection.53
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of
merit.
SO ORDERED.
Petitioners would contend that the appellate court ignored the evidence
and the factual findings of the trial court by holding them liable on the
basis of a sweeping conclusion that the presumption of negligence on the
part of a common carrier was not overcome. Petitioners would insist that
Escartins assault upon Navidad, which caused the latter to fall on the
tracks, was an act of a stranger that could not have been foreseen or
prevented. The LRTA would add that the appellate courts conclusion on
the existence of an employer-employee relationship between Roman and
LRTA lacked basis because Roman himself had testified being an
employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court, contended
that a contract of carriage was deemed created from the moment
Navidad paid the fare at the LRT station and entered the premises of the
latter, entitling Navidad to all the rights and protection under a contractual
relation, and that the appellate court had correctly held LRTA and Roman
liable for the death of Navidad in failing to exercise extraordinary
diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from the
nature of its business and for reasons of public policy, is burdened with
the duty of exercising utmost diligence in ensuring the safety of
passengers.[if !supportFootnotes][4][endif] The Civil Code, governing the liability of a
common carrier for death of or injury to its passengers, provides:
Article 1755. A common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the
circumstances.
Article 1756. In 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.
Article 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the formers
employees, although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.
This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and
supervision of their employees.
Article 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the willful acts or negligence of other
further, how then must the liability of the common carrier, on the one
hand, and an independent contractor, on the other hand, be described? It
would be solidary. A contractual obligation can be breached by tort and
when the same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article 2194[if !supportFootnotes][14]
[endif]
of the Civil Code can well apply.[if !supportFootnotes][15][endif] In fine, a liability
for tort may arise even under a contract, where tort is that which
breaches the contract.[if !supportFootnotes][16][endif] Stated differently, when an act
which constitutes a breach of contract would have itself constituted the
source of a quasi-delictual liability had no contract existed between the
parties, the contract can be said to have been breached by tort, thereby
allowing the rules on tort to apply.[if !supportFootnotes][17][endif]
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of
the late Nicanor Navidad, this Court is concluded by the factual finding of
the Court of Appeals that there is nothing to link (Prudent) to the death of
Nicanor (Navidad), for the reason that the negligence of its employee,
Escartin, has not been duly proven x x x. This finding of the appellate
court is not without substantial justification in our own review of the
records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman himself
is guilty of any culpable act or omission, he must also be absolved from
liability. Needless to say, the contractual tie between the LRT and
Navidad is not itself a juridical relation between the latter and Roman;
thus, Roman can be made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is
untenable. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.[if !supportFootnotes][18][endif] It is an established
rule that nominal damages cannot co-exist with compensatory damages.[if
!supportFootnotes][19][endif]
It would seem then that the thrust of the law in enjoining the kabit system
is not so much as to penalize the parties but to identify the person upon
whom responsibility may be fixed in case of an accident with the end view
of protecting the riding public. The policy therefore loses its force if the
In the present case, petitioners insist that as the passenger jeepney was
purchased in 1982 for only P30,000.00 to award damages considerably
greater than this amount would be improper and unjustified. Petitioners
are at best reminded that indemnification for damages comprehends not
only the value of the loss suffered but also that of the profits which the
obligee failed to obtain. In other words, indemnification for damages is
not limited to damnum emergens or actual loss but extends to lucrum
cessans or the amount of profit lost.[if !supportFootnotes][13][endif]
Had private respondent's jeepney not met an accident it could reasonably
be expected that it would have continued earning from the business in
which it was engaged. Private respondent avers that he derives an
average income of P300.00 per day from his passenger jeepney and this
earning was included in the award of damages made by the trial court
and upheld by the appeals court. The award therefore of P236,000.00 as
compensatory damages is not beyond reason nor speculative as it is
based on a reasonable estimate of the total damage suffered by private
respondent, i.e. damage wrought upon his jeepney and the income lost
from his transportation business. Petitioners for their part did not offer any
substantive evidence to refute the estimate made by the courts a quo.
However, we are constrained to depart from the conclusion of the lower
courts that upon the award of compensatory damages legal interest
should be imposed beginning 22 July 1990, i.e. the date of the accident.
Upon the provisions of Art. 2213 of the Civil Code, interest "cannot be
recovered upon unliquidated claims or damages, except when the
demand can be established with reasonable certainty." It is axiomatic that
if the suit were for damages, unliquidated and not known until definitely
ascertained, assessed and determined by the courts after proof, interest
at the rate of six percent (6%) per annum should be from the date the
judgment of the court is made (at which time the quantification of
damages may be deemed to be reasonably ascertained).[if !supportFootnotes][14]
is MODIFIED. Interest at the rate of six percent (6%) per annum shall be
computed from the time the judgment of the lower court is made until the
finality of this Decision. If the adjudged principal and interest remain
unpaid thereafter, the interest shall be twelve percent (12%) per annum
computed from the time judgment becomes final and executory until it is
fully satisfied.
Costs against petitioners.
SO ORDERED.
[endif]
In this case, the matter was not a liquidated obligation as the assessment
of the damage on the vehicle was heavily debated upon by the parties
with private respondent's demand for P236,000.00 being refuted by
petitioners who argue that they could have the vehicle repaired easily for
P20,000.00. In fine, the amount due private respondent was not a
liquidated account that was already demandable and payable.
One last word. We have observed that private respondent left his
passenger jeepney by the roadside at the mercy of the elements. Article
2203 of the Civil Code exhorts parties suffering from loss or injury to
exercise the diligence of a good father of a family to minimize the
damages resulting from the act or omission in question. One who is
injured then by the wrongful or negligent act of another should exercise
reasonable care and diligence to minimize the resulting damage.
Anyway, he can recover from the wrongdoer money lost in reasonable
efforts to preserve the property injured and for injuries incurred in
attempting to prevent damage to it.[if !supportFootnotes][15][endif]
However we sadly note that in the present case petitioners failed to offer
in evidence the estimated amount of the damage caused by private
respondent's unconcern towards the damaged vehicle. It is the burden of
petitioners to show satisfactorily not only that the injured party could have
mitigated his damages but also the amount thereof; failing in this regard,
the amount of damages awarded cannot be proportionately reduced.
WHEREFORE, the questioned Decision awarding private
respondent Donato Gonzales P236,000.00 with legal interest from 22
July 1990 as compensatory damages and P30,000.00 as attorney's fees
During the early part of March 1981, said principal paid to the Jeddah
branch of petitioner British Airways, Inc. airfare tickets for 93 contract
workers with specific instruction to transport said workers to Jeddah on or
before March 30, 1981.
As soon as petitioner received a prepaid ticket advice from its Jeddah
branch to transport the 93 workers, private respondent was immediately
informed by petitioner that its principal had forwarded 93 prepaid tickets.
Thereafter, private respondent instructed its travel agent, ADB Travel and
Tours. Inc., to book the 93 workers with petitioner but the latter failed to
fly said workers, thereby compelling private respondent to borrow money
in the amount of P304,416.00 in order to purchase airline tickets from the
other airlines as evidenced by the cash vouchers (Exhibits "B", "C" and
"C-1 to C-7") for the 93 workers it had recruited who must leave
immediately since the visas of said workers are valid only for 45 days and
the Bureau of Employment Services mandates that contract workers
must be sent to the job site within a period of 30 days.
Sometime in the first week of June, 1981, private respondent was again
informed by the petitioner that it had received a prepaid ticket advice from
its Jeddah branch for the transportation of 27 contract workers.
Immediatety, private respondent instructed its travel agent to book the 27
contract workers with the petitioner but the latter was only able to book
and confirm 16 seats on its June 9, 1981 flight. However, on the date of
the scheduled flight only 9 workers were able to board said flight while
the remaining 7 workers were rebooked to June 30, 1981 which bookings
were again cancelled by the petitioner without any prior notice to either
private respondent or the workers. Thereafter, the 7 workers were
rebooked to the July 4,1981 flight of petitioner with 6 more workers
booked for said flight. Unfortunately, the confirmed bookings of the 13
workers were again cancelled and rebooked to July 7, 1981.
On July 6, 1981, private respondent paid the travel tax of the said
workers as required by the petitioner but when the receipt of the tax
payments was submitted, the latter informed private respondent that it
can only confirm the seats of the 12 workers on its July 7, 1981 flight.
However, the confirmed seats of said workers were again cancelled
without any prior notice either to the private respondent or said workers.
The 12 workers were finally able to leave for Jeddah after private
respondent had bought tickets from the other airlines.
As a result of these incidents, private respondent sent a letter to
petitioner demanding compensation for the damages it had incurred by
the latter's repeated failure to transport its contract workers despite
confirmed bookings and payment of the corresponding travel taxes.
On July 23, 1981, the counsel of private respondent sent another letter to
the petitioner demanding the latter to pay the amount of P350,000.00
representing damages and unrealized profit or income which was denied
by the petitioner.
On August 8, 1981, private respondent received a telex message from its
principal cancelling the hiring of the remaining recruited workers due to
the delay in transporting the workers to Jeddah. 5
On January 27, 1982, private respondent filed a complaint for damages
against petitioner with the Regional Trial Court of Manila, Branch 1 in
Civil Case No. 82-4653.
On the other hand, petitioner, alleged in its Answer with counterclaims
that it received a telex message from Jeddah on March 20, 1981 advising
that the principal of private respondent had prepaid the airfares of 100
persons to transport private respondent's contract workers from Manila to
Jeddah on or before March 30, 1981. However, due to the unavailability
of space and limited time, petitioner had to return to its sponsor in Jeddah
the prepaid ticket advice consequently not even one of the alleged 93
contract workers were booked in any of its flights.
On June 5, 1981, petitioner received another prepaid ticket advice to
transport 16 contract workers of private respondent to Jeddah but the
travel agent of the private respondent booked only 10 contract workers
for petitioner's June 9, 1981 flight. However, only 9 contract workers
boarded the scheduled flight with 1 passenger not showing up as
evidenced by the Philippine Airlines' passenger manifest for Flight BA020 (Exhibit "7", "7-A", "7-B" and "7-C"). 6
Thereafter, private respondent's travel agent booked seats for 5 contract
workers on petitioner's July 4, 1981 flight but said travel agent cancelled
the booking of 2 passengers while the other 3 passengers did not show
up on said flight.
Sometime in July 1981, the travel agent of the private respondent booked
7 more contract workers in addition to the previous 5 contract workers
who were not able to board the July 4, 1981 flight with the petitioner's
July 7, 1981 flight which was accepted by petitioner subject to
reconfirmation.
However on July 6, 1981, petitioner's computer system broke down which
resulted to petitioner's failure to get a reconfirmation from Saudi Arabia
Airlines causing the automatic cancellation of the bookings of private
respondent's 12 contract workers. In the morning of July 7, 1981, the
computer system of the petitioner was reinstalled and immediately
petitioner tried to reinstate the bookings of the 12 workers with either Gulf
Air or Saudi Arabia Airlines but both airlines replied that no seat was
available on that date and had to place the 12 workers on the wait list.
Said information was duly relayed to the private respondent and the 12
workers before the scheduled flight.
After due trial on or on August 27, 1985, the trial court rendered its
decision, the dispositive portion of which reads as follows:
WHEREFORE, in view of all the foregoing, this Court renders judgment:
1. Ordering the defendant to pay the plaintiff actual damages in the sum
of P308,016.00;
2. Ordering defendant to pay moral damages to the plaintiff in the amount
of P20,000.00;
3. Ordering the defendant to pay the plaintiff P10,000.00 by way of
corrective or exemplary damages;
4. Ordering the defendant to pay the plaintiff 30% of its total claim for and
as attorney's fees; and
5. To pay the costs. 7
On March 13, 1986, petitioner appealed said decision to respondent
appellate court after the trial court denied its Motion for Reconsideration
on February 28, 1986.
On November 15, 1989, respondent appellate court affirmed the decision
of the trial court, the dispositive portion of which reads:
WHEREFORE, the decision appealed from is hereby AFFIRMED with
costs against the appellant. 8
On December 9, 1989, petitioner filed a Motion for Reconsideration which
was also denied.
Hence, this petition.
It is the contention of petitioner that private respondent has no cause of
action against it there being no perfected contract of carriage existing
between them as no ticket was ever issued to private respondent's
contract workers and, therefore, the obligation of the petitioner to
transport said contract workers did not arise. Furthermore, private
On the other hand, the facts clearly show that appellant was remiss in its
obligation to transport the contract workers on their flight despite
confirmation and bookings made by appellee's travelling agent.
xxx xxx xxx
Besides, appellant knew very well that time was of the essence as the
prepaid ticket advice had specified the period of compliance therewith,
and with emphasis that it could only be used if the passengers fly on BA.
Under the circumstances, the appellant should have refused acceptance
of the PTA from appellee's principal or to at least inform appellee that it
could not accommodate the contract workers.
xxx xxx xxx
While there is no dispute that ROLACO Engineering advanced the
payment for the airfares of the appellee's contract workers who were
recruited for ROLACO Engineering and the said contract workers were
the intended passengers in the aircraft of the appellant, the said contract
"to carry" also involved the appellee for as recruiter he had to see to it
that the contract workers should be transported to ROLACO Engineering
in Jeddah thru the appellant's transportation. For that matter, the
involvement of the appellee in the said contract "to carry" was well
demonstrated when
the appellant upon receiving the PTA immediately advised the appellee
thereof. 10
Petitioner also contends that the appellate court erred in awarding actual
damages in the amount of P308,016.00 to private respondent since all
expenses had already been subsequently reimbursed by the latter's
principal.
In awarding actual damages to private respondent, the appellate court
held that the amount of P308,016.00 representing actual damages refers
to private respondent's second cause of action involving the expenses
incurred by the latter which were not reimbursed by ROLACO
Engineering. However, in the Complaint 11 filed by private respondent, it
was alleged that private respondent suffered actual damages in the
amount of P308,016.00 representing the money it borrowed from friends
and financiers which is P304,416.00 for the 93 airline tickets and
P3,600.00 for the travel tax of the 12 workers. It is clear therefore that the
actual damages private respondent seeks to recover are the airline
tickets and travel taxes it spent for its workers which were already
reimbursed by its principal and not for any other expenses it had incurred
in the process of recruiting said contract workers. Inasmuch as all
expenses including the processing fees incurred by private respondent
had already been paid for by the latter's principal on a staggered basis as
admitted in open court by its managing director, Mrs. Bienvenida
Brusellas. 12 We do not find anymore justification in the appellate court's
decision in granting actual damages to private respondent.
37 coils into the sea.[12] At 7:00 a.m., a tugboat finally arrived to pull the
already empty and damaged barge back to the pier.[13]
Earnest efforts on the part of both the consignee Little Giant and
Industrial Insurance to recover the lost cargoes proved futile.[14]
Little Giant thus filed a formal claim against Industrial Insurance which
paid it the amount of P5,246,113.11. Little Giant thereupon executed a
subrogation receipt[15] in favor of Industrial Insurance.
Industrial Insurance later filed a complaint against Schmitz Transport,
TVI, and Black Sea through its representative Inchcape (the defendants)
before the RTC of Manila, for the recovery of the amount it paid to Little
Giant plus adjustment fees, attorneys fees, and litigation expenses.[16]
Industrial Insurance faulted the defendants for undertaking the unloading
of the cargoes while typhoon signal No. 1 was raised in Metro Manila.[17]
By Decision of November 24, 1997, Branch 21 of the RTC held all the
defendants negligent for unloading the cargoes outside of the breakwater
notwithstanding the storm signal.[18] The dispositive portion of the decision
reads:
WHEREFORE, premises considered, the Court renders judgment in favor
of the plaintiff, ordering the defendants to pay plaintiff jointly and severally
the sum of P5,246,113.11 with interest from the date the complaint was
filed until fully satisfied, as well as the sum of P5,000.00 representing the
adjustment fee plus the sum of 20% of the amount recoverable from the
defendants as attorneys fees plus the costs of suit. The counterclaims
and cross claims of defendants are hereby DISMISSED for lack of [m]erit.
[19]
To the trial courts decision, the defendants Schmitz Transport and TVI
filed a joint motion for reconsideration assailing the finding that they are
common carriers and the award of excessive attorneys fees of more than
P1,000,000. And they argued that they were not motivated by gross or
evident bad faith and that the incident was caused by a fortuitous event.
[20]
By resolution of February 4, 1998, the trial court denied the motion for
reconsideration. [21]
All the defendants appealed to the Court of Appeals which, by decision of
June 27, 2001, affirmed in toto the decision of the trial court, [22] it finding
that all the defendants were common carriers Black Sea and TVI for
engaging in the transport of goods and cargoes over the seas as a
regular business and not as an isolated transaction,[23] and Schmitz
Transport for entering into a contract with Little Giant to transport the
cargoes from ship to port for a fee.[24]
In holding all the defendants solidarily liable, the appellate court ruled that
each one was essential such that without each others contributory
negligence the incident would not have happened and so much so that
the person principally liable cannot be distinguished with sufficient
accuracy.[25]
In discrediting the defense of fortuitous event, the appellate court held
that although defendants obviously had nothing to do with the force of
nature, they however had control of where to anchor the vessel, where
discharge will take place and even when the discharging will commence.
[26]
President and General Manager Noel Aro that part of the services it
offers to its clients as a brokerage firm includes the transportation of
cargoes reflects so.
Atty. Jubay: Will you please tell us what [are you] functions x x x as
Executive Vice-President and General Manager of said Company?
Mr. Aro: Well, I oversee the entire operation of the brokerage and
transport business of the company. I also handle the various division
heads of the company for operation matters, and all other related
functions that the President may assign to me from time to time, Sir.
Q: Now, in connection [with] your duties and functions as you mentioned,
will you please tell the Honorable Court if you came to know the company
by the name Little Giant Steel Pipe Corporation?
A: Yes, Sir. Actually, we are the brokerage firm of that Company.
Q: And since when have you been the brokerage firm of that company, if
you can recall?
A: Since 1990, Sir.
Q: Now, you said that you are the brokerage firm of this Company. What
work or duty did you perform in behalf of this company?
A: We handled the releases (sic) of their cargo[es] from the Bureau of
Customs. We [are] also in-charged of the delivery of the goods to their
warehouses. We also handled the clearances of their shipment at the
Bureau of Customs, Sir.
xxx
Q: Now, what precisely [was] your agreement with this Little Giant Steel
Pipe Corporation with regards to this shipment? What work did you do
with this shipment?
A: We handled the unloading of the cargo[es] from vessel to lighter and
then the delivery of [the] cargo[es] from lighter to BASECO then to the
truck and to the warehouse, Sir.
Q: Now, in connection with this work which you are doing, Mr. Witness,
you are supposed to perform, what equipment do (sic) you require or did
you use in order to effect this unloading, transfer and delivery to the
warehouse?
A: Actually, we used the barges for the ship side operations, this
unloading [from] vessel to lighter, and on this we hired or we subcontracted with [T]ransport Ventures, Inc. which [was] in-charged (sic) of
the barges. Also, in BASECO compound we are leasing cranes to have
the cargo unloaded from the barge to trucks, [and] then we used trucks to
deliver [the cargoes] to the consignees warehouse, Sir.
Q: And whose trucks do you use from BASECO compound to the
consignees warehouse?
A: We utilized of (sic) our own trucks and we have some other contracted
trucks, Sir.
xxx
ATTY. JUBAY: Will you please explain to us, to the Honorable Court why
is it you have to contract for the barges of Transport Ventures
Incorporated in this particular operation?
A: Firstly, we dont own any barges. That is why we hired the services of
another firm whom we know [al]ready for quite sometime, which is
Transport Ventures, Inc. (Emphasis supplied)[43]
It is settled that under a given set of facts, a customs broker may be
regarded as a common carrier. Thus, this Court, in A.F. Sanchez
Brokerage, Inc. v. The Honorable Court of Appeals,[44] held:
The appellate court did not err in finding petitioner, a customs broker, to
be also a common carrier, as defined under Article 1732 of the Civil
Code, to wit,
Art. 1732. Common carriers are 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.
xxx
Article 1732 does not distinguish between one whose principal business
activity is the carrying of goods and one who does such carrying only as
an ancillary activity. The contention, therefore, of petitioner that it is not a
common carrier but a customs broker whose principal function is to
prepare the correct customs declaration and proper shipping documents
as required by law is bereft of merit. It suffices that petitioner undertakes
to deliver the goods for pecuniary consideration.[45]
And in Calvo v. UCPB General Insurance Co. Inc.,[46] this Court held that
as the transportation of goods is an integral part of a customs broker, the
customs broker is also a common carrier. For to declare otherwise would
be to deprive those with whom [it] contracts the protection which the law
affords them notwithstanding the fact that the obligation to carry goods for
[its] customers, is part and parcel of petitioners business.[47]
As for petitioners argument that being the agent of Little Giant, any
negligence it committed was deemed the negligence of its principal, it
does not persuade.
True, petitioner was the broker-agent of Little Giant in securing the
release of the cargoes. In effecting the transportation of the cargoes from
the shipside and into Little Giants warehouse, however, petitioner was
discharging its own personal obligation under a contact of carriage.
Petitioner, which did not have any barge or tugboat, engaged the
services of TVI as handler[48] to provide the barge and the tugboat. In their
Service Contract,[49] while Little Giant was named as the consignee,
petitioner did not disclose that it was acting on commission and was
chartering the vessel for Little Giant.[50] Little Giant did not thus
automatically become a party to the Service Contract and was not,
therefore, bound by the terms and conditions therein.
Not being a party to the service contract, Little Giant cannot directly sue
TVI based thereon but it can maintain a cause of action for negligence.[51]
In the case of TVI, while it acted as a private carrier for which it was
under no duty to observe extraordinary diligence, it was still required to
observe ordinary diligence to ensure the proper and careful handling,
care and discharge of the carried goods.
Thus, Articles 1170 and 1173 of the Civil Code provide:
ART. 1170. Those who in the performance of their obligations are guilty
of fraud, negligence, or delay, and those who in any manner contravene
the tenor thereof, are liable for damages.
ART. 1173. The fault or negligence of the obligor consists in the omission
of that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the
place. When negligence shows bad faith, the provisions of articles 1171
and 2202, paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed
in the performance, that which is expected of a good father of a family
shall be required.
Was the reasonable care and caution which an ordinarily prudent person
would have used in the same situation exercised by TVI?[52]
This Court holds not.
TVIs failure to promptly provide a tugboat did not only increase the
risk that might have been reasonably anticipated during the shipside
operation, but was the proximate cause of the loss. A man of ordinary
prudence would not leave a heavily loaded barge floating for a
considerable number of hours, at such a precarious time, and in the open
sea, knowing that the barge does not have any power of its own and is
totally defenseless from the ravages of the sea. That it was nighttime
and, therefore, the members of the crew of a tugboat would be charging
overtime pay did not excuse TVI from calling for one such tugboat.
As for petitioner, for it to be relieved of liability, it should, following
Article 1739[53] of the Civil Code, prove that it exercised due diligence to
prevent or minimize the loss, before, during and after the occurrence of
the storm in order that it may be exempted from liability for the loss of the
goods.
While petitioner sent checkers[54] and a supervisor[55] on board the
vessel to counter-check the operations of TVI, it failed to take all available
and reasonable precautions to avoid the loss. After noting that TVI failed
to arrange for the prompt towage of the barge despite the deteriorating
sea conditions, it should have summoned the same or another tugboat to
extend help, but it did not.
This Court holds then that petitioner and TVI are solidarily liable [56]
for the loss of the cargoes. The following pronouncement of the Supreme
Court is instructive:
reading was constant from October 18, 1995 to October 25, 1995 at 0
Celsius. However, at midnight of October 25, 1995 when the cargo had
already been unloaded from the ship the temperature fluctuated with a
reading of 33 Celsius. Rocha believed the fluctuation was caused by the
burnt condenser fan motor of the refrigerated container.
On November 9, 1995, Temic received the shipment. It found the cargo
completely damaged. Temic filed a claim for cargo loss against
Netherlands Insurance, with supporting claims documents. The
Netherlands Insurance paid Temic the sum of P1,036,497.00 under the
terms of the Marine Open Policy. Temic then executed a loss and
subrogation receipt in favor of Netherlands Insurance.
Seven months from delivery of the cargo or on June 4, 1996, Netherlands
Insurance filed a complaint for subrogation of insurance settlement with
the Regional Trial Court, Branch 5, Manila, against "the unknown owner
of M/V Piya Bhum" and TMS Ship Agencies (TMS), the latter thought to
be the local agent of M/V Piya Bhums unknown owner.4 The complaint
was docketed as Civil Case No. 96-78612.
Netherlands Insurance amended the complaint on January 17, 1997 to
implead EDSA Shipping, RCL, Eagle Liner Shipping Agencies, U-Freight
Singapore, and U-Ocean (Phils.), Inc. (U-Ocean), as additional
defendants. A third amended complaint was later made, impleading
Pacific Eagle in substitution of Eagle Liner Shipping Agencies.
TMS filed its answer to the original complaint. RCL and EDSA Shipping
filed their answers with cross-claim and compulsory counterclaim to the
second amended complaint. U-Ocean likewise filed an answer with
compulsory counterclaim and cross-claim. During the pendency of the
case, U-Ocean, jointly with U-Freight Singapore, filed another answer
with compulsory counterclaim. Only Pacific Eagle and TMS filed their
answers to the third amended complaint.
The defendants all disclaimed liability for the damage caused to the
cargo, citing several reasons why Netherland Insurances claims must be
rejected. Specifically, RCL and EDSA Shipping denied negligence in the
transport of the cargo; they attributed any negligence that may have
caused the loss of the shipment to their co-defendants. They likewise
asserted that no valid subrogation exists, as the payment made by
Netherlands Insurance to the consignee was invalid. By way of
affirmative defenses, RCL and EDSA Shipping averred that the
Netherlands Insurance has no cause of action, and is not the real partyin-interest, and that the claim is barred by laches/prescription.
After Netherlands Insurance had made its formal offer of evidence, the
defendants including RCL and EDSA Shipping sought leave of court to
file their respective motions to dismiss based on demurrer to evidence.
RCL and EDSA Shipping, in their motion, insisted that Netherlands
Insurance had (1) failed to prove any valid subrogation, and (2) failed to
establish that any negligence on their part or that the loss was sustained
while the cargo was in their custody.
On May 22, 2002, the trial court handed down an Order dismissing Civil
Case No. 96-78612 on demurrer to evidence. The trial court ruled that
while there was valid subrogation, the defendants could not be held liable
for the loss or damage, as their respective liabilities ended at the time of
the discharge of the cargo from the ship at the Port of Manila.
Netherlands Insurance seasonably appealed the order of dismissal to the
CA.
On May 26, 2004, the CA disposed of the appeal as follows:
WHEREFORE, in view of the foregoing, the dismissal of the complaint
against defendants Regional Container Lines and Its local agent, EDSA
Shipping Agency, is REVERSED and SET ASIDE. The dismissal of the
complaint against the other defendants is AFFIRMED. Pursuant to
Section 1, Rule 33 of the 1997 Rules of Civil Procedure, defendants
Regional Container Lines and EDSA Shipping Agency are deemed to
have waived the right to present evidence.
As such, defendants Regional Container Lines and EDSA Shipping
Agency are ordered to reimburse plaintiff in the sum of P1,036,497.00
with interest from date hereof until fully paid.
No costs.
SO ORDERED. [Emphasis supplied.]
The CA dismissed Netherland Insurances complaint against the other
defendants after finding that the claim had already been barred by
prescription.5
Having been found liable for the damage to the cargo, RCL and EDSA
Shipping filed a motion for reconsideration, but the CA maintained its
original conclusions.
The sole issue for our resolution is whether the CA correctly held RCL
and EDSA Shipping liable as common carriers under the theory of
presumption of negligence.
THE COURTS RULING
The present case is governed by the following provisions of the Civil
Code:
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.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set forth
in articles1755 and 1756.
ART. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following
causes only:
1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
2) Act of the public enemy in war, whether international or civil;
3) Act of omission of the shipper or owner of the goods;
4) The character of the goods or defects in the packing or in the
containers;
5) Order or act of competent public authority.
ART. 1735. In all cases other that those mentioned in Nos. 1, 2, 3, 4 and
5 of the preceding article, if the goods are lost, destroyed, or deteriorated,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence
as required by article 1733.
ART. 1736. The extraordinary responsibility of the common carrier lasts
from the time the goods are unconditionally placed in the possession of,
and received by the carrier for transportation until the sane are delivered,
actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them, without prejudice to the provisions of
articles 1738.
ART. 1738. The extraordinary liability of the common carrier continues to
be operative even during the time the goods are stored in a warehouse of
the carrier at the place of destination, until the consignee has been
advised of the arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them.
ART. 1742. Even if the loss, destruction, or deterioration of the goods
should be caused by the character of the goods, or the faulty nature of
the packing or of the containers, the common carrier must exercise due
diligence to forestall or lessen the loss.
In Central Shipping Company, Inc. v. Insurance Company of North
America,6 we reiterated the rules for the liability of a common carrier for
lost or damaged cargo as follows:
(1) Common carriers are bound to observe extraordinary diligence over
the goods they transport, according to all the circumstances of each
case;
(2) In the event of loss, destruction, or deterioration of the insured goods,
common carriers are responsible, unless they can prove that such loss,
destruction, or deterioration was brought about by, among others, "flood,
storm, earthquake, lightning, or other natural disaster or calamity"; and
(3) In all other cases not specified under Article 1734 of the Civil Code,
common carriers are presumed to have been at fault or to have acted
negligently, unless they observed extraordinary diligence.7
In the present case, RCL and EDSA Shipping disclaim any responsibility
for the loss or damage to the goods in question. They contend that the
cause of the damage to the cargo was the "fluctuation of the temperature
in the reefer van," which fluctuation occurred after the cargo had already
been discharged from the vessel; no fluctuation, they point out, arose
when the cargo was still on board M/V Piya Bhum. As the cause of the
damage to the cargo occurred after the same was already discharged
from the vessel and was under the custody of the arrastre operator
(International Container Terminal Services, Inc. or ICTSI), RCL and
EDSA Shipping posit that the presumption of negligence provided in
Article 1735 of the Civil Code should not apply. What applies in this case
is Article 1734, particularly paragraphs 3 and 4 thereof, which exempts
the carrier from liability for loss or damage to the cargo when it is caused
either by an act or omission of the shipper or by the character of the
goods or defects in the packing or in the containers. Thus, RCL and
EDSA Shipping seek to lay the blame at the feet of other parties.
We do not find the arguments of RCL and EDSA Shipping meritorious.
A common carrier is presumed to have been negligent if it fails to prove
that it exercised extraordinary vigilance over the goods it transported.8
When the goods shipped are either lost or arrived in damaged condition,
a presumption arises against the carrier of its failure to observe that
diligence, and there need not be an express finding of negligence to hold
it liable.91avvphi1
To overcome the presumption of negligence, the common carrier must
establish by adequate proof that it exercised extraordinary diligence over
the goods. It must do more than merely show that some other party could
be responsible for the damage.10
In the present case, RCL and EDSA Shipping failed to prove that they did
exercise that degree of diligence required by law over the goods they
transported. Indeed, there is sufficient evidence showing that the
fluctuation of the temperature in the refrigerated container van, as
recorded in the temperature chart, occurred after the cargo had been
discharged from the vessel and was already under the custody of the
arrastre operator, ICTSI. This evidence, however, does not disprove that
the condenser fan which caused the fluctuation of the temperature in
the refrigerated container was not damaged while the cargo was being
unloaded from the ship. It is settled in maritime law jurisprudence that
cargoes while being unloaded generally remain under the custody of the
carrier;11 RCL and EDSA Shipping failed to dispute this.1avvphi1
RCL and EDSA Shipping could have offered evidence before the trial
court to show that the damage to the condenser fan did not occur: (1)
while the cargo was in transit; (2) while they were in the act of
discharging it from the vessel; or (3) while they were delivering it actually
or constructively to the consignee. They could have presented proof to
show that they exercised extraordinary care and diligence in the handling
of the goods, but they opted to file a demurrer to evidence. As the order
granting their demurrer was reversed on appeal, the CA correctly ruled
that they are deemed to have waived their right to present evidence,12
and the presumption of negligence must stand.
It is for this reason as well that we find RCL and EDSA Shippings claim
that the loss or damage to the cargo was caused by a defect in the
packing or in the containers. To exculpate itself from liability for the
loss/damage to the cargo under any of the causes, the common carrier is
burdened to prove any of the causes in Article 1734 of the Civil Code
claimed by it by a preponderance of evidence. If the carrier succeeds, the
burden of evidence is shifted to the shipper to prove that the carrier is
negligent.13 RCL and EDSA Shipping, however, failed to satisfy this
standard of evidence and in fact offered no evidence at all on this point; a
reversal of a dismissal based on a demurrer to evidence bars the
defendant from presenting evidence supporting its allegations.
WHEREFORE, we DENY the petition for review on certiorari filed by the
Regional Container Lines of Singapore and EDSA Shipping Agency. The
decision of the Court of Appeals dated May 26, 2004 in CA-G.R. CV No.
76690 is AFFIRMED IN TOTO. Costs against the petitioners.
SO ORDERED.
and fell on the middle surface of EDSA below. The forceful drop of the
vehicle on the floor of the road broke and split it into two parts. Both
driver Padilla and passenger Jose Marcial K. Ochoa were injured and
rushed to the hospital. At the East Avenue Medical Center, Ochoa was
not as lucky as Padilla who was alive. He was declared dead on arrival
from the accident. The death certificate issued by the Office of the Civil
Registrar of Quezon City cited the cause of his death as vehicular
accident.3
On May 13, 1999, Jose Marcials wife, Ruby Bueno Ochoa, and his two
minor children, Micaela B. Ochoa and Jomar B. Ochoa (the heirs),
through counsel, sent G & S a letter4 demanding that the latter indemnify
them for Jose Marcials death, his loss of earning capacity, and funeral
expenses in the total amount of P15,000,000.00. As G & S failed to heed
the same, the heirs filed a Complaint5 for Damages before the Regional
Trial Court (RTC) of Pasig City which was raffled to Branch 164 of said
court.
The heirs alleged that G & S, as a common carrier, is under legal
obligation to observe and exercise extraordinary diligence in transporting
its passengers to their destination safely and securely. However, G & S
failed to observe and exercise this extraordinary diligence because its
employee failed to transport Jose Marcial to his destination safely. They
averred that G & S is liable to them for having breached the contract of
common carriage. As an alternative cause of action, they asserted that G
& S is likewise liable for damages based on quasi-delict pursuant to
Article 21806 in relation to Article 21767 of the Civil Code. The heirs thus
prayed for G & S to pay them actual damages, moral damages,
exemplary damages, and attorneys fees and expenses of litigation.
In its Answer With Compulsory Counterclaims,8 G & S claimed that Jose
Marcial boarded an Avis taxicab driven by its employee, Bibiano Padilla
(Padilla), at the Domestic Airport to bring him to Teachers Village in
Quezon City. While passing the Santolan fly-over, however, the Avis
taxicab was bumped by an on-rushing delivery van at the right portion
causing the taxicab to veer to the left, ram through the left side of the
railings of the fly-over and fall to the center of the island below. The
taxicab was split into two and Jose Marcial was thrown 10 meters away.
G & S posited that the proximate cause of Jose Marcials death is a
fortuitous event and/or the fault or negligence of the driver of the delivery
van that hit the taxicab. It likewise claimed that it exercised the diligence
required of a good father of a family in the selection and supervision of its
employees including Padilla. By way of compulsory counterclaim, G & S
sought to recover from the heirs the amount of P300,000.00 as attorneys
fees and costs of suit.
Ruling of the Regional Trial Court
On December 27, 2001, the trial court rendered a Decision9 finding the
unreliable, and biased. While said certification states that Jose Marcial
was earning an annual salary of P450,844.49 at the time of his untimely
demise, the CA noted that same is unsupported by competent evidence
such as income tax returns or receipts. This is in view of the ruling in
People v. Ereo23 where it was held that "there must be unbiased proof of
the deceaseds average income." Anent moral damages, the CA found
the award of P300,000.00 excessive and thus reduced the same to
P200,000.00 as to make it proportionate to the award of exemplary
damages which is P50,000.00. The dispositive portion of said Decision
reads:
WHEREFORE, the assailed Decision dated December 27, 2001 and
Order dated March 5, 2002 are AFFIRMED with the following
MODIFICATION: appellant is ordered to pay appellees the sum of
P50,000.00 as civil indemnity for the death of the deceased Jose Marcial
K. Ochoa, P200,000.00 as moral damages, P50,000.00 as exemplary
damages, P100,000.00 for attorneys fees and the costs of litigation. The
trial courts award of P6,537,244.96 for the loss of earning capacity of the
deceased is DELETED for lack of basis.
SO ORDERED.
Both parties moved for reconsideration24 but the CA denied their
respective motions for reconsideration in a Resolution25 dated October
12, 2005.
Hence, G & S and the heirs filed their respective Petitions for Review on
Certiorari before this Court. The heirs petition was docketed as G.R. No.
170071 and that of G & S as G.R. No. 170125. These petitions were later
consolidated pursuant to this Courts Resolution of November 21, 2005.26
G.R. No. 170125
G & S anchors its petition on the following grounds:
I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT
RULING THAT THE PROXIMATE CAUSE OF DEATH OF MR. JOSE
MARCIAL K. OCHOA WAS A FORTUITOUS EVENT AND/OR WAS
DUE TO THE FAULT OR NEGLIGENCE OF ANOTHER AND SHOULD
THUS EXEMPT THE PETITIONER FROM LIABILITY.
II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT
TAKING NOTE OF THE FACT THAT THE PETITIONERS EMPLOYEE
HAD BEEN ACQUITTED OF THE CRIME OF RECKLESS
IMPRUDENCE RESULTING (IN) HOMICIDE.
III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
UPHOLDING THE TESTIMONY OF A WITNESS WHO SURFACED
MONTHS AFTER THE INCIDENT WHILE DISREGARDING THAT OF
AN EYEWITNESS WHO WAS PRESENT AT THE TIME AND PLACE
OF THE ACCIDENT.
IV. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
NOT RULING THAT THE PETITIONER EXERCISED THE DILIGENCE
deleted the award for loss of earning capacity and reduced the award for
moral damages.
For its part, G & S avers that the Certification issued by USAID is selfserving because the USAID officer who issued it has not been put on the
witness stand to validate the contents thereof. Moreover, said
Certification was not supported by competent evidence such as income
tax returns and receipts. G & S likewise finds the reduction of the award
of moral damages appropriate in view of the settled rule that moral
damages are not meant to enrich the complainant at the expense of the
defendant. Hence, it prays that the petition be dismissed for lack of merit.
Our Ruling
We shall first tackle the issues raised by G & S in its petition.
The first, third and fourth issues raised by G & S involve questions of fact
We have reviewed said issues and we find that the determination of the
first, third and fourth issues raised entails re-examination of the evidence
presented because they all involve questions of fact. In Microsoft
Corporation v. Maxicorp, Inc.,32 we held that:
Once it is clear that the issue invites a review of the evidence presented,
the question posed is one of fact. If the query requires a re-evaluation of
the credibility of witnesses, or the existence or relevance of surrounding
circumstances and their relation to each other, the issue in that query is
factual. Our ruling in Paterno v. Paterno is illustrative on this point:
Such questions as whether certain items of evidence should be accorded
probative value or weight, or rejected as feeble or spurious, or whether or
not the proof on one side or the other are clear and convincing and
adequate to establish a proposition in issue, are without doubt questions
of fact. Whether or not the body of proofs presented by a party, weighed
and analyzed in relation to contrary evidence submitted by adverse party,
may be said to be strong, clear and convincing; whether or not certain
documents presented by one side should be accorded full faith and credit
in the face of protests as to their spurious character by the other side;
whether or not inconsistencies in the body of proofs of a party are of such
a gravity as to justify refusing to give said proofs weight all these are
issues of fact. (Citations omitted)
In this case, the said three issues boil down to the determination of the
following questions: What is the proximate cause of the death of Jose
Marcial? Is the testimony of prosecution witness Clave credible? Did G &
S exercise the diligence of a good father of a family in the selection and
supervision of its employees? Suffice it to say that these are all questions
of fact which require this Court to inquire into the probative value of the
evidence presented before the trial court. As we have consistently held,
"[t]his Court is not a trier of facts. It is not a function of this court to
analyze or weigh evidence. When we give due course to such situations,
it is solely by way of exception. Such exceptions apply only in the
the latter.
Thus, in Cancio, Jr. v. Isip,39 we declared:
In the instant case, it must be stressed that the action filed by petitioner is
an independent civil action, which remains separate and distinct from any
criminal prosecution based on the same act. Not being deemed instituted
in the criminal action based on culpa criminal, a ruling on the culpability
of the offender will have no bearing on said independent civil action
based on an entirely different cause of action, i.e., culpa
contractual." (Emphasis supplied; Citations omitted.)
In this case, the action filed by the heirs is primarily for the recovery of
damages arising from breach of contract of carriage allegedly committed
by G & S. Clearly, it is an independent civil action arising from contract
which is separate and distinct from the criminal action for reckless
imprudence resulting in homicide filed by the heirs against Padilla by
reason of the same incident. Hence, regardless of Padillas acquittal or
conviction in said criminal case, same has no bearing in the resolution of
the present case. There was therefore no error on the part of the CA
when it resolved this case without regard to the fact that Padilla has
already been acquitted by the RTC in the criminal case. Moreover, while
the CA quoted some portions of the MTC Decision in said criminal case,
we however find that those quoted portions were only meant to belie G &
S claim that the proximate cause of the accident was the negligence of
the driver of the delivery van which allegedly hit the Avis taxicab. Even
without those quoted portions, the appellate courts ultimate finding that it
was Padillas negligence which was the proximate cause of the mishap
would still be the same. This is because the CA has, in fact, already
made this declaration in the earlier part of its assailed Decision. The fact
that the MTC Decision from which the subject quoted portions were lifted
has already been reversed by the RTC is therefore immaterial.
In view of the foregoing, we deny G & S petition for lack of merit.
The denial by the CA of the heirs claim for lost earnings is unwarranted
Going now to the petition filed by the heirs, we note at the outset that the
issues of whether the CA erred in deleting the award for loss of earning
capacity and in reducing the award for moral damages made by the trial
court likewise raise questions of fact as they "involve an examination of
the probative value of the evidence presented by the parties".40 However,
we find that the heirs case falls under one of the exceptions because the
findings of the CA conflict with the findings of the RTC.41 Since the heirs
properly raised the conflicting findings of the lower courts, it is proper for
this Court to resolve such contradiction.42
In Ereo, we denied the claim for loss of income because the handwritten
estimate of the deceaseds daily income as a self-employed vendor was
not supported by competent evidence like income tax returns or receipts.
This was in view of the rule that compensation for lost income is in the
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 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
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 vehicles on the public highways, responsibility
therefore 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 those 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 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, 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 be 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 laws 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 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.1wphl.nt
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 plaintiffappellant.1wphl.nt
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 Sabiniano, 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.
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.
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.
reimburse petitioner for any amount that the latter may be adjudged liable
to pay herein private respondents as expressly stipulated in the contract
of lease between petitioner and Rock Component Philippines, Inc.
Moreover, the trial court applied Article 2194 of the new Civil Code on
solidary accountability of join tortfeasors insofar as the liability of the
driver, herein petitioner and Rock Component Philippines was concerned
(pp. 6-7, Decision; pp. 44-45, Rollo).
To the question of whether petitioner can be held responsible to the
victim 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, as aforesaid, were relied
upon by the trial court although respondent court was quick to add the
caveat embodied in the lease covenant between petitioner and Rock
Component Philippines relative to the latter's duty to reimburse any
amount which may be adjudged against petitioner (pp. 32-33, Rollo).
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 an 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 continue to persist with the idea that the
pronouncements of this Court in Duavit vs. Court of Appeals (173 SCRA
490 [1989]) and Duquillo vs. 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 vs. Ignacio, 94 Phil., 182 50 Off. Gaz., 108;
Roque vs. Malibay Transit, Inc., 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 presumed that the registered owner is the actual owner
thereof, for it would be difficult with 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 actual
the owner is. How would the public or third persons know against whom
to enforce their rights in case of subsequent transfer 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 responsible to the public or to
the 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 plaintiffappellee for the injuries occasioned to the latter because of the
negligence of the driver, even if the defendant-appellant was no longer
an 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 (defendantsappellant'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 the
actual owner? The defendants hold the affirmative of this proposition; the
trial court hold the negative.
The Revised Motor Vehicle Law (Act No. 3992, as amended) provides
that the 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 of 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
from the current year, furnish the Motor Vehicle 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
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
obtained, in the interest of the determinations of persons responsible for
damages or injuries caused on public highways.
One of the principle 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 my 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 "share 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 vs. Breham
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? 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
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.
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
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 plaintiffappellant.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