FEB Leasing and Finance Corp vs. Spouses Baylon et.al.
Mitsubishi Lancer car resulting in an explosion of the rear part of the car.
GR No. 181398, June 29, 2011
FACTS:
An Isuzu oil tanker, registered in the name of petitioner FEB Leasing and
Finance Corporation and leased to BG Hauler, Inc., was running along Del
Monte Avenue in Quezon City. While executing a left turn upon reaching
an intersection, the oil tanker hit Loretta Baylon, daughter of respondent
spouses Sergio and Maritess Baylon, who was then crossing the Del Monte
Avenue. Due to the strong impact, Loretta was violently thrown away
resulting to her death.
ISSUE:
Whether or not FEB Leasing and Finance Corp. (now BPI Leasing Corp.)
should be held liable
RULING:
Yes. In accordance with the law on compulsory motor vehicle registration,
with respect to the public and third persons, the registered owner of a
motor vehicle is directly and primarily responsible for the consequence of
its operation regardless of who the actual vehicle owner might be. Well-
settled is the rule that the registered owner of the vehicle is liable for
quasi-delicts resulting from its use. Thus, even if the vehicle has already
been sold, leased or transferred to another person at the time the vehicle
figured in an accident, the registered vehicle owner would still be liable for
damages caused by the accident. The sale, transfer or lease of the
vehicle, which is not registered with the Land Transportation Office, will
not bind third persons aggrieved in an accident involving the vehicle.
PCI LEASING AND FINANCE, INC., vs. UCPB GENERAL INSURANCE
CO., INC.
G.R. No. 162267 July 4, 2008
FACTS:
A Mitsubishi Lancer car owned by UCPB, insured with UCPB General
Insurance Co., was traversing the Laurel Highway, Barangay Balintawak,
LipaCity. It was driven by Flaviano Isaac with Conrado Geronimo (Asst.
Manager of said bank), was hit and bumped by an 18-wheeler Fuso
Tanker Truck, owned by defendants-appellants PCI Leasing & Finance,
Inc. allegedly leased to and operated by defendant-appellant Superior Gas
& Equitable Co., Inc. (SUGECO) and driven by its employee, defendant
appellant Renato Gonzaga. The impact caused heavy damage to the
The driver and passenger suffered physical injuries. However, the driver
defendant-appellant Gonzaga continued on its way to its destination and
did not bother to bring his victims to the hospital.
As the 18-wheeler truck is registered under the name of PCI Leasing,
repeated demands were made by plaintiff-appellee for the payment of the
aforesaid amounts. However, no payment was made. PCI Leasing and
Finance, Inc., (petitioner) interposed the defense that it could not be held
liable for the collision, since the driver, Gonzaga, was not its employee,
but that of its co-defendant SUGECO. In fact, it was SUGECO, that was
the actual operator of the truck, pursuant to a Contract of Lease signed by
petitioner and SUGECO. Petitioner, however, admitted that it was the
owner of the truck in question. RTC rendered judgment in favour of UCPB
General Insurance and ordered PCI Leasing and Gonzaga, to pay jointly
and severally the former. CA affirmed with the lower court’s decision.
ISSUES:
1) 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.
2) 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.
RULING:
1) YES. The principle of holding the registered owner of a vehicle liable for
quasi-delicts resulting from its use is well-established in jurisprudence.
As explained in the case of Erezo v. Jepte, thus:
Registration is required not to make said registration the operative act by
which ownership in vehicles is transferred, as in land registration cases,
because the administrative proceeding of registration does not bear any
essential relation to the contract of sale between the parties (Chinchilla
vs. Rafael and Verdaguer, 39 Phil. 888), but to permit the use and
operation of the vehicle upon any public highway (section 5 [a], Act No.
3992, as amended.) The main aim of motor vehicle registration is to
identify the owner so that if any accident happens, or that any damage or
injury is caused by the vehicle on the public highways, responsibility
therefor can be fixed on a definite individual, the registered owner.
Instances are numerous where vehicles running on public highways
caused accidents or injuries to pedestrians or other vehicles without
positive identification of the owner or drivers, or with very scant means of
identification. It is to forestall these circumstances, so inconvenient or
prejudicial to the public, that the motor vehicle registration is primarily
ordained, in the interest of the determination of persons responsible for
damages or injuries caused on public highways.
2) NO. 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. Thus, the rule remains the same: a sale,
lease, or financial lease, for that matter, that is not registered with the
Land Transportation Office, still does not bind third persons who are
aggrieved in tortious incidents, for the latter need only to rely on the
public registration of a motor vehicle as conclusive evidence of ownership.
A lease such as the one involved in the instant case is an encumbrance in
contemplation of law, which needs to be registered in order for it to bind
third parties. Under this policy, the evil sought to be avoided is the
exacerbation of the suffering of victims of tragic vehicular accidents in not
being able to identify a guilty party. A contrary ruling will not serve the
ends of justice. The failure to register a lease, sale, transfer or
encumbrance, should not benefit the parties responsible, to the prejudice
of innocent victims.
Sps. Pereña vs. Sps. Zarate
G.R. No. 157917, August 29, 2012
FACTS:
Sps. Zarate, parents of Aaron Zarate, engaged the services of Sps. Pereña
for the adequate and safe transportation carriage of the former spouses’
son from their residence to his school. During the effectivity of the
contract of carriage, Aaron Zarate died in connection with a
vehicular/train collision which occurred while Aaron was riding the
contracted carrier. At the time of the said collision, there were no safety
warning signs and railings at the site commonly used for railroad crossing.
The site of the collision was not intended by the railroad operator for
railroad crossing at the time of the collision. PNR refused to acknowledge
any liability for the collision. In Sps. Pereña’s defense, they adduces
evidence to show that they had exercised the diligence of a good father of
a family in the selection and supervision of Alfaro, the driver, by making
sure that Alfaro had been issued a driver’s license and had not been
involved in any vehicular accident prior to the collision. The RTC ruled in
favor of Sps. Zarate and held the Pereñas and PNR jointly and severally
liable for the death of Aaron plus damages. The CA upheld the award for
the loss of Aaron’s earning capacity, plus damages, and the award for
Attorney’s fees was deleted. Hence, this petition.
ISSUE:
WON the Pereñas and PNR are jointly and severally liable for damages.
HELD:
YES. The defense of the Pereñas that they exercised the diligence of a
good father of a family has no merit because they operated as common
carriers and that their standard of care was extraordinary diligence, not
the ordinary diligence of a good father of a family. The Pereñas, acting as
a common carrier, were already presumed to be negligent at the time of
the accident because death had occurred to their passenger. The
presumption for negligence, being a presumption of law, laid the burden
of evidence on their shoulders to establish that they had not been
negligent. There is no question that the Pereñas did not overturn the
presumption of their negligence by credible evidence. Their defense of
having observed the diligence of a good father of a family in the selection
and supervision of their driver was not legally sufficient. PNR was also
found guilty of negligence because it did not ensure the safety of others
through the placing of crossbars, signal lights, warning signs, and other
permanent safety barriers to prevent vehicles or pedestrians from
crossing there. Hence, the Pereñas and PNR should jointly and severally
be liable for the death of Aaron Zarate.
LRT vs. NAVIDAD
G.R. No. 145804. February 6, 2003
FACTS:
Navidad was drunk when he entered the boarding platform of the LRT. He
got into an altercation with the SG Escartin. They had a fistfight and
Navidad fell onto the tracks and was killed when a train came and ran
over him.
The Heirs of Navidad filed a complaint for damages against Escartin, the
train driver, (Roman) the LRTA, the Metro Transit Organization and
Prudent Security Agency (Prudent). The trial court found Prudent and
Escartin jointly and severally liable for damages to the heirs. The CA
exonerated Prudent and instead held the LRTA and the train driver
Romero jointly and severally liable as well as removing the award for
compensatory damages and replacing it with nominal damages.
The reasoning of the CA was that a contract of carriage already existed
between Navidad and LRTA (by virtue of his havA ing purchased train
tickets and the liability was caused by the mere fact of Navidad's death
after being hit by the train being managed by the LRTA and operated by
Roman. The CA also blamed LRTA for not having presented expert
evidence showing that the emergency brakes could not have stopped the
train on time.
ISSUES:
(1) Whether or not LRTA and/or Roman is liable for the death.
(2) Whether or not Escartin and/or Prudent are liable.
(3) Whether or not nominal damages may coexist with compensatory
damages.
HELD:
(1) Yes. The foundation of LRTA's liability is the contract of carriage and
its obligation to indemnify the victim arising from the breach of that
contract by reason of its failure to exercise the high diligence required of a
common carrier.
(2) Fault was not established. Liability will be based on Tort under Art.
2176 of the New Civil Code.
(3) No. It is an established rule that nominal damages cannot co-exist
with compensatory damages.
RATIO:
Liability of LRTA – Read Arts. 1755,1756, 1759 and 1763 of the New Civil
Code
A common carrier is required by these above statutory provisions to use
utmost diligence in carrying passengers with due regard for all
circumstances. This obligation exists not only during the course of the trip
but for so long as the passengers are within its premises where they
ought to be in pursuance to then contract of carriage.
Art. 1763 renders a common carrier liable for death of or injury to
passengers (a) through the negligence or wilful acts of its employees or
(b) on account of willful acts or negligence of other passengers or of
strangers if the common carrier’s employees through theexercise of due
diligence could have prevented or stopped the act or omission. In case of
such death or injury, a carrier is presumed to have been at fault or been
negligent, and by simple proof of injury, the passenger is relieved of the
duty to still establish the fault or negligence of the carrier or of its
employees and the burden shifts upon the carrier to prove that the injury
is due to an unforeseen event or to force majeure.
Liability of Security Agency – If Prudent is to be held liable, it would be
for a tort under Art. 2176 in conjunction with Art. 2180. Once the fault of
the employee Escartin is established, the employer, Prudent, would be
held liable on the presumption that it did not exercise the diligence of a
good father of the family in the selection and supervision of its
employees.
Relationship between contractual and non-contractual breach –
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 of the Civil Code can well
apply. In fine, a liability for tort may arise even under a contract, where
tort is that which breaches the contract. Stated differently, when an act
which constitutes a breach of ontract 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.
Nominal Damages - 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. It is an established rule that
nominal damages cannot co-exist with compensatory damages. The
award was deleted
DIAZ vs. CA
G.R. No. 149749 July 25, 2006
NATURE:
This is a petition for certiorari under Rule 65 of the Rules of Court which
imputes grave abuse of discretion to the Court of Appeals in its decision.
FACTS:
Petitioner Agapita Diaz operated a common carrier, a Tamaraw FX taxi
plying the route of Cagayan de Oro City to any point in Region 10. One
day, petitioner’s taxi, driven by one Arman Retes, was moving at an
excessive speed when it rammed into the rear portion of a Hino cargo
truck owned by private respondent Teodoro Lantoria and driven by private
respondent Rogelio Francisco. As a result, nine passengers of the taxi died
including Sherly Moneño.
The heirs of Sherly Moneño filed with the RTC of Malaybalay City, an
action for breach of contract of carriage and damages against petitioner
and her driver, Arman Retes. On motion, petitioner filed a third-party
complaint against private respondents Teodorio Lantoria and Rogelio
Francisco.
The pre-trial conference was initially set but was reset for petitioner and
her counsel’s failure to appear despite due notice. Registry receipt number
showed that notice had been sent to petitioner’s counsel, Atty. Cipriano
Lupeba. On scheduled date, petitioner and her counsel again failed to
appear, prompting the court to allow private respondents to present
evidence ex parte. More than 7 months after the conclusion of private
respondents’ ex parte presentation of evidence, petitioner filed a motion
for leave to present evidence on her defense and third-party complaint.
The trial court denied this.
Later, the trial court rendered a decision holding petitioner and Arman
Retes jointly and severally liable to pay private respondent heirs of Sherly
Moneño P50,000 for her death, P50,000 as moral damages,P20,000 as
exemplary damages and P20,000 as attorney’s fees. On appeal, the trial
court’s decision was affirmed by the Court of Appeals. The motion for
reconsideration was also denied. Hence, this recourse.

ISSUE:
Whether or not there was an error for the trial court to allow private
respondents to present their evidence ex parte when petitioner and her
counsel failed to appear for the scheduled pre-trial conference.

HELD:
It was no error for the trial court to allow private respondents to present
their evidence ex partewhen petitioner and her counsel failed to appear
for the scheduled pre-trial conference.
Section 3, Rule 18 of the Rules of Court states that:
The notice of pre-trial shall be served on counsel, or on the party who has
no counsel. The counsel served with such notice is charged with the duty
of notifying the party represented by him.
Petitioner was represented by Atty. Cipriano Lupeba to whom the notice
was sent.18 It was incumbent on the latter to advise petitioner
accordingly. His failure to do so constituted negligence which bound
petitioner.
Further, Sections 4 and 5 of Rule 18 read:
Sec. 4. Appearance of Parties. – It shall be the duty of the parties and
their counsel to appear at the pre-trial. The non-appearance of the party
may be excused only if a valid cause is shown therefore or if a
representative shall appear in his behalf fully authorized in writing to
enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts
and of documents.
Sec. 5. Effect of failure to appear. – The failure of the plaintiff to appear
when so required pursuant to the next preceding section shall be cause
for the dismissal of the action. The dismissal shall be with prejudice,
unless otherwise ordered by the court. A similar failure on the defendant
shall be cause to allow the plaintiff to present his evidence ex parte and
the court to render judgment on the basis thereof.
Therefore, in the case, petitioner, as common carrier, failed to establish
sufficient evidence to rebut the presumption of negligence.