Caravan v. Abejar

Caravan Travel and Tours International, Inc. v. Abejar

10 February 2016 J. Leonen Pet: Caravan Travel and Tours International, Inc. Res: Ermilinda Abejar Torts and Damages subtopic: Registered owner of vehicle Doctrine:

- The plaintiff may first prove the ER’s ownership

of the vehicle involved in a mishap by presenting the vehicle’s registration in evidence. Thereafter, a disputable presumption that the requirements for an ER’s liability under Art. 2180, CC have been satisfied will arise. The burden of evidence then shifts to the defendant to show that no liability under Art. 2180 has ensued. This case harmonizes the requirement of Art. 2180, in relation to Art. 2176, and the so-called “registered-owner “registered-owner rule”  - It is imperative to apply the registered-owner rule in a manner that harmonizes it with Arts. 2176 and 2180, CC. Rules must be construed in a manner that will harmonize them with other rules so as to form a uniform and consistent system of jurisprudence—Art. 2180 should defer to the registered-owner rule, but it was never stated that Art. 2180 should be completely abandoned. Legend: R - Reyes, the victim E - Espinosa, the witness A - Abejar, res. and aunt of R B - Bautista, the driver of the van C - Caravan, pet. and employer of B EE - Employee ER - Employer RO - Registered-owner Registered-owner ROR - Registered-owner Rule

Facts:

- 13 July 2000: R was walking along the west-

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bound lane of Sampaguita St., United Paranaque Subd. IV, Paranaque City. An L-300 van was traveling along the east-bound lane opposite R. To avoid an incoming vehicle, the van swerved to its left and hit R. E went to her aid and loaded her in the back of the van and told the driver, B, to bring R to the hospital. Instead, B left the van parked inside a nearby subdivision (with R still in the van). Fortunately, an unidentified civilian helped and drove R to the hospital. C, a corporation engaged in organizing travels and tours, was the registered owner of the van. B was C's EE and was assigned to drive the van as its service ser vice driver. C shouldered the hospital expenses of R, but R died two days after the accident. A, R’s paternal aunt and the person who raised her since R was 9 y.o., filed a Complaint for damages against B and C in RTC Paranaque. A alleged that B was an EE of C and that C is the registered owner of the van. Summons could not be served on B, so A moved to drop B as a defendant—RTC granted. RTC found that B was grossly negligent in driving the vehicle. RTC awarded damages in favor of A1. C’s MR MR was was denied denied..

1 WHEREFORE,

considering that the [respondent] was able to provide by preponderance of evidence her cause of action against the defendants, judgment ju dgment is hereby rendered ordering defendants JIMMY BAUTISTA and CARAVAN CARAVAN TRAVEL and TOURS[,] INC., to jointly and solidarity pay the plaintiff, the following, to wit: 1. The amount of P35,000.00 representing actual damages; 2. The amount of P300,000.00 as moral damages; 3. The amount of P30,000.00 as exemplary damages; 4. The amount of P50,000.00 as and by way of attorney’s fees; and 5. The cost of suit. SO ORDERED

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Meg Sandoval

- CA affirmed affirmed with modification modification RTC’ RTC’ss decision decision2. C’s MR was denied. Hence this petition for review on certiorari (on CA decision).

- C’s Arguments: • A has no personality to bring this suit because

she isn’t a real party-in-interest • A doesn’t exercise legal or substitute parental authority, nor is she the judicially appointed guardian of or only living relative of R, nor the executor or administrator of the estate of R. • Only the victim or the heirs can enforce an action on culpa aquiliana (such as A’s action for damages). • A didn’t offer documentary or testimonial evidence to prove that B acted within the scope of his assigned tasks when the accident occurred. - According to C, B’s tasks only pertained to the transport of company personnel or products • C argues it exercise the diligence of a good father of a family in the selection and supervision of its EEs. • A should not have been awarded damages, and questions the Certificate provided by A as proof of expenses since its signatory (Julian Peñaloza) was not present in court and that C was denied the right to cross-examine him. And that the Certificate constitutes hearsay. • C contends that based on Art. 2206(3), CC A isn't entitled to moral damages because C acted in good faith. • That C should not be held solidarity liable with B since B was already dropped as a party.

- A’s Arguments: • C failed to provide proof that it exercised the

requisite diligence in the selection and supervision of B. • CA ruling on damages should be upheld • Since C is the registered owner of the van, it is directly, primarily, and solidarity liable for the tortious acts of B.

Issues:

I. WON WON A is a real real partyparty-inin-inte interes restt who who may may bring an action for damages against C on account of R’s death—YES.

II. WON C should should be be liable liable as an ER, ER, pursuant to Art. 2180, CC—YES. PETITION DENIED. Ratio is discussed below. Important points are underscored.

2 WHEREFORE,

premises considered, the instant appeal is DENIED for lack of merit. The assailed Decision dated 31 July 2003 and Order dated 20 October 2003 of the Regional Trial Court, City of Para[ñ]aque, Branch 258, in Civil Case No. 00-0447 are AFFIRMED with the following MODIFICATIONS: 1. Moral Damages is REDUCED to Php200,000.00; 2. Death Indemnity of Php50,000.00 is awarded; 3. The Php35,000.00 actual damages, Php200,000.00 moral damages, Php30,000.00 exemplary damages and Php50,000.00 attorney’s fees shall earn interest at the rate of 6% per annum computed from 31 July 2003, the date of the [Regional Trial CourtÊs] decision; and upon finality of this Decision, all the amounts due shall earn interest at the rate of 12% per annum, in lieu of 6% per annum, until full payment; and 4. The Php50,000.00 death indemnity shall earn interest at the rate of 6% per annum computed from the date of promulgation of this Decision; and upon finality of this Decision, the amount due shall earn interest at the rate of 12% per annum, in lieu of 6% per annum, until full payment. Costs against [Caravan]. SO ORDERED.

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Meg Sandoval

I. Yes, A is a real real party-i party-in-i n-inte nteres rest. t.

- A exercised substitute parental authority and -

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suffered actual loss A properly filed an action based on quasi-delict and she is a real party-in-interest, which is defined in Sec. 2, Rule 3, 1997 Rules of CivPro which states that “xxx the party who stands to be benefited or injured by the judgement in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party-ininterest.” The Court also looked at Art. 216 and 233, FC to identify persons who exercise substitute parental authority. R’s parents and paternal grandparents are deceased, and the whereabouts of her maternal grandparents are unknown. There is no record of R having siblings. A took custody of R when R was a child and A assumed assumed the role role of parent and exercised parental authority over R. Consistent with Art. 220, FC, A supported R’s education and provided for her personal needs— A treated R as her own daughter. A’s right to proceed against against C is based on two grounds: • A suffered actual personal loss. • A is capacitated to do what R’s actual parents would have been to do. Although R was already 18 y.o. when she died (thus she had already reached the age of majority and was emancipated), and parental authority is terminated upon emancipation, A continued to support and care for R—the relationship remained the same. “The anguish and damage caused to [A] was by [R’s] death was no different because of [R’s] emancipation”   In any case, termination of A’s parental authority is not an insurmountable legal bar that precludes the filing of her Complaint. The Court has held that Art. 1902, Old CC/Art. 2176, New CC is broad enough to accommodate even plaintiffs who are not relatives of the deceased.

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II. Yes, C is liable liable..

- A’s Complaint is anchored on an ER’s liability for -

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quasi-delict provided in Art. 2180 in relation to Art. 2176, CC. It was not fatal to A’s cause that she herself did not adduce proof that B acted within the scope of his authority. It was sufficient that A proved that C was the registered owner of the van that hit R. According to the Court, two rules must be considered: 1. Art. 21 2180’s specific specification ation that “[ERs] “[ERs] shall shall be be liable for the damages caused by their [EEs]…acting within the scope of their assigned tasks[.]” 2. The opera operation tion of the registere registered-ow d-owner ner rule (ROR) that registered owners are liable for death or injuries caused by the operation of their vehicles.   These rules appear to be in conflict when it comes to cases in which the ER is also the registered owner of the vehicle. Art. 2180 requires proof of two things: 1. An ER-EE ER-EE relatio relationship nship between between the the driver driver and owner; and 2. That That the drive driverr acted acted within within the the scope scope of his/her assigned tasks. On the other hand, applying the ROR only requires the plaintiff to prove that defendant-ER is the registered-owner (RO) of the vehicle. ROR can be seen as early as in the case of Erezo, et al. v. Jepte (1957) where this Court explained that the registration of motor vehicles, as required by Sec. 5(a), RA 4136 (Land Transportation and Traffic Code), was necessary “not to make said registration the operative act by which ownership in vehicles is transferred,… but to permit the use and operation of the vehicle upon any public highway[.]” Its “main aim…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.” owner.”

Meg Sandoval

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Erezo v. Jepte  (notwithstanding Castilex v. Vasquez3) relied on Art. 2180, CC even though

the ER was also the RO of the vehicle. The ROR was not mentioned. - In Castilex v. Vasquez, the Court absolved Castilex of liability reasoning that it was incumbent upon the plaintiff to prove that the negligent EE was acting within the scope of his assigned tasks, which Vasquez failed to do. The Court outlined the process necessary for an ER to be held liable for the acts of its EE: • Under the 5th par. of Art. 2180, WON engaged in any business or industry, an ER is liable for the torts committed by the EE within the scope of his assigned tasks. It is necessary to establish the ER-EE relationship and once this is done, the plaintiff must show that the EE was acting within the scope of his assigned task when the tort was committed. - Aguilar, Sr. v. Commercial Savings Bank 4 , recognized the seeming conflict between Art. 2180 and the ROR and applied the latter. The SC here reiterated the pronouncements in Erezo v. Jepte in ruling that the bank, as the RO of the vehicle, was primarily liable to the plaintiff. The SC here concluded that the LC erred when it concluded that the bank was not liable simply because (a) petitioner did not prove that Borja was acting as the bank’s vice president at the time of the accident; and (b) Borja had, according to respondent bank, already bought the car at the time of the mishap. For as long as the respondent bank remained the registered owner of the car involved in the vehicular accident, it could not escape primary primar y liability. - Preference for the ROR became more pronounced in Del Carmen, Jr. v. Bacoy which reiterated Aguilar , stating that “[d]espite Art. 2180, we still held the bank liable for damages

for the accident as said provision should defer to the settled doctrine concerning accidents involving registered motor vehicles…”  - Filcar Transport Services v. Espinas  stated that the RO of a vehicle can no longer use the defenses found in Art. 2180.  - In Mendoza v. Sps. Gomez  the Court said: “However, Aguilar, Sr., Del Carmen, Filcar, and Mendoza should not be taken to mean that Art. 2180, CC should be completely discarded in cases where the registered-owner rule finds application. As acknowledged in Filcar , there is no categorical statutory pronouncement in the Land Transportation and Traffic Code (LTTC) stipulating the liability of a registered owner. The source of a registered owner’s liability is not a distinct statutory provision, but remains to be Arts. 2176 and 2180,CC” - It is imperative to apply the ROR in a manner that harmonizes it with Arts. 2176 and 2180, CC. Rules must be construed in a manner that will harmonize them with other rules so as to form a uniform and consistent system of jurisprudence—Art. 2180 should defer to the ROR, but it was never never stated that t hat Art. 2180 should be completely abandoned.

- Appropriate Approach: Where both apply 1. Plaintiff must establish that the ER is the RO of the vehicle 2. There then arises a disputable presumption that the t he requirements of Art. Ar t. 2180 2180 have been proven and as a consequence, the burden of proof shifts to the defendant to show that no liability under Art. 2180 has arisen. ari sen.  - This disputable presumption, insofar as the RO in relation to the actual driver is concerned,

In Castilex Industrial Corp. v. Vasquez, Jr. Abad was a manager of Castilex and Castilex was also the registered owner of a Toyota Hi-Lux. While Abad was driving the vehicle, it collided with a motorcycle driven by Vasquez. Vasquez died a few days after, and his parents filed a case for damages against Abad and Castilex. Castilex denied liability, arguing that And was acting in his private capacity at the time of the accident. Here, since there was no evidence that Abad was acting within the scope of the functions entrusted to his, Castilex had no duty to show it exercised the diligence of a good father of a family in providing Abad with a service vehicle. 3

4 Here,

a Mitsubishi Lancer registered under the bank and driven by the bank’s assistant VP Borja hit and killed Aguilar, Jr. His father, Aguilar, Sr., filed a case for damages against Borja and the bank. RTC found the bank solidarity liable with Borja. However, the CA disagreed and dismissed the complaint against the bank reasoning that Art. 2180, CC requires the plaintiff to prove that at the time of the accident, the EE was acting within the scope of his assigned task—CA found no evidence that Borja was acting as the bank’s EE at the time. CA ruling was reversed by the SC.

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Meg Sandoval

recognizes that between the owner and the victim, it is the former that should carry the costs of moving forward with the evidence. Registration of the vehicle is accessible to the public. Recall that A presented a copy of the Certificate of Registration of the can that hit R— this attests to C's ownership of the van, which C did not dispute. In order to satisfactorily overcome the presumption, C should have: 1. Showed Showed that it had no ER-EE ER-EE relatio relationship nship with B 2. That That B acted acted outsid outsidee the scop scopee of his his assigned tasks; or 3. That it exerci exercised sed the diligence diligence of a good father of a family in the selection and supervision of B. They failed: 1. C admitte admittedd that that B was was its EE EE at the the time time of the accident; 2. C was was unable unable to prove prove that that B was was acting acting outside outside the scope scope of his assigned assigned tasks. tasks.5 C presented no positive evidence to show that B was acting in his private capacity at the time of the incident; 3. C failed failed to prove prove that that it exerc exercised ised the requisite diligence. C contented itself with B’s submission of a nonprofessional driver’s lice licens nsee6. Employing a person holding a nonprofessional driver’s license to operate another’s motor vehicle vehicle violates violates Sec. 24, LTTC LTTC7—C did not only fail to exercise due diligence in selecting B, it also committed an actual violation of law. C’s act of providing copies of memoranda and company rules was insufficient because they failed to pro prove ve actual actual complian compliance ce8 For failing to overturn the presumption that the requirements of Article 2180 have been satisfied, petitioner must be held liable.

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Side matters:

- C’s argument that it should be excused from

liability because B was already dropped as a party is equally unmeritorious. The liability imposed on the registered owner is direct and primary. It does not depend on the inclusion of the negligent driver in the action. • Otherwise, it would render impotent the rationale of the motor registration law in fixing liability on a definite person. • B was not an indispensable part under Sec. 7, Rule 3 of the 1997 Rules of CivPro. Rather, he was a necessary party under Sec. 8. • Indispensable Party: parties-in-interest without whom no final determination can be had of an action—non-inclusion is debilitating. The presence of indispensable parties is a condition for the exercise of juridical power and when an indispensable party is not before the court, the action should be dismissed. • Necessary Party: presence is not imperative, and absence is not debilitating. Nevertheless, it is preferred that they be included in order that relief may be complete. • SC: C could have opted to file a cross-claim against B as its remedy. • C’s interest and liability is distinct from that of its driver. - Regardless of C’s ER-EE relationship with B, liability attaches to C on account of its being the RO of a vehicle that figures in a mishap. • A determination of C’s liability as owner can proceed independently of a consideration of how B conducted himself as a driver. While certainly it is desirable that a determination of B’s liability be made alongside that of the owner of the van he was driving, his noninclusion in these proceedings does not absolutely hamper a judicious resolution of A’s plea for relief.

C’s accountant and supervisor Sally Bellido’s testimony that she didn’t know what B was doing in the area does not affect the presumption. Evidence must adduced.

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 Bellido testified that the license of B was nonprofessional and that they allowed him to be a service driver.

7 SEC.

24. Use of driver’s license and badge.·. . .No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor vehicle, unless the person sought to be employed is a duly licensed professional driver.

8 MMTC

v. CA emphasized the need to prove compliance and not just show issuance of company policies.

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Meg Sandoval

- CA committed no reversible error when it

awarded actual damages to A, which was based on the Certificate issued by Peñaloza showing that A paid P35k for funeral expenses. The Certificate was not hearsay evidence. • Evidence is hearsay when its probative value is based on the personal knowledge of a person other than the person actually testifying. • A herself identified the Certificate. She testified that she incurred funeral expenses amounting to P35k, that she paid this amount to Peñaloza, and that she was present when Peñaloza signed the Certificate. • A had personal knowledge of the facts sought to be proved by the Certificate, i.e., that she spent P35k for the funeral expenses of R. - CA likewise did not err in awarding civil indemnity and exemplary damages (based on Art. 2206 and 2231, CC). - CA and RTC found B grossly negligent in driving the van and concluded that B’s gross negligence was the proximate cause of R’s death. Negligence and causation are factual issues. Findings of fact, when established by the TC and affirmed by the CA, are binding on this court unless they are patently unsupported by evidence or unless the judgment is grounded on a misapprehension of facts. • Neither has C presented evidence disputing the finding of the LCs. As such, these finding cannot be disturbed on appeal. - For deaths caused by quasi-delict, the recovery of moral damages is limited to the spouse, legitimate and illegitimate descendants, and ascendants of the deceased. Persons exercising substitute parental authority are to be considered ascendants for the purpose of awarding moral damages.

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Dispositive: WHEREFORE, the Decision of the

CA AFFIRMED with the following MODIFICATIONS: (a) actual damages in the amount of P35,000.00 shall earn interest at the rate of 6% per annum from the time it was judicially or extrajudicially demanded from petitioner Caravan Travel and Tours International, Inc. until full satisfaction; (b) moral damages, exemplary damages, and attorney’s fees shall earn interest at the rate of 6% per annum from the date of the RTC’s Decision until full satisfaction; and (c) civil indemnity shall earn interest at the rate of 6% per annum from the date of the CA Decision until full satisfaction. SO ORDERED. Separate Concurring Opinion: J. Brion

• Brion: A is a real party-in-interest, not because

she exercised substitute parental authority over R, but because she has an interest in claiming actual and exemplary damages from C. Parental authority has no bearing on one’s status as a real party-in-interest in a quasidelict case. • Brion: Courts may also impose exemplary damages, in addition to compensatory damages, if the defendant acted with gross negligence. In the present case, B’s act of leaving R rather than bringing her to a hospital amounts to gross negligence. • Although J. Brion agrees that C is directly and primarily liable for damages as B’s ER and as the van’s RO, he discusses the ROR in relation to Arts. 2180 and 217 2176 thus: t hus: - The Court in Filcar Transport Services v. Espinas ruled that the RO of a vehicle is deemed the ER of the vehicle’s driver. Thus, the vehicle’s RO is vicariously liable for the driver’s negligent acts pursuant to Arts. 2176 and 2180, CC. The vicarious liability remains with the RO even when the vehicle had been sold to another person before the accident but the registration has not yet been transferred. The Court emphasized in R. Transport Corporation v. Yu that the ER’s liability for the negligent acts of its subordinate is direct and primary. pri mary. - Based on the foregoing, J. Brion concurs with the ponencia’s results. Meg Sandoval