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 ERs ownership of the
vehicle involved in a mishap by presenting the
vehicles registration in evidence. Thereafter, a
disputable presumption that the requirements for an
ERs 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 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 jurisprudenceArt.
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
ROR - Registered-owner Rule
Facts:
- 13 July 2000: R was walking along the west-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
driver.
- C shouldered the hospital expenses of R, but R died
two days after the accident.
- A, Rs 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 defendantRTC granted.
- RTC found that B was grossly negligent in driving the
vehicle. RTC awarded damages in favor of A1 . Cs
MR was denied.
- CA affirmed with modification RTCs decision2. Cs
MR was denied. Hence this petition for review on
certiorari (on CA decision).

1 WHEREFORE, considering that the [respondent] was able to provide by preponderance of evidence her cause of action against the defendants,
judgment is hereby rendered ordering defendants JIMMY BAUTISTA and CARAVAN TRAVEL and TOURS[,] INC., to jointly and 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 attorneys fees; and
5. The cost of suit. SO ORDERED

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[]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 attorneys fees
shall earn interest at the rate of 6% per annum computed from 31 July 2003, the date of the [Regional Trial Courts] 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.
Page 1 of 5 Meg Sandoval
- Cs Arguments:
A has no personality to bring this suit because she
isnt a real party-in-interest
A doesnt 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 As action for
damages).
A didnt offer documentary or testimonial evidence
to prove that B acted within the scope of his
assigned tasks when the accident occurred.
- According to C, Bs 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 Pealoza) 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.
- As 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 A is a real party-in-interest who may bring an
action for damages against C on account of Rs
deathYES.
II. WON C should be liable as an ER, pursuant
to Art. 2180, CCYES.
PETITION DENIED.
Ratio is discussed below.
Important points are underscored.
Page 2 of 5
I. Yes, A is a real party-in-interest.
- A exercised substitute parental authority and 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-in-interest.
- The Court also looked at Art. 216 and 233, FC to
identify persons who exercise substitute parental
authority.
- Rs 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 the role of parent and exercised parental
authority over R.
- Consistent with Art. 220, FC, A supported Rs
education and provided for her personal needsA
treated R as her own daughter.
- As right to proceed against against C is based on
two grounds:
A suffered actual personal loss.
A is capacitated to do what Rs 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 Rthe relationship remained the
same. The anguish and damage caused to [A] was
by [Rs] death was no different because of [Rs]
emancipation
- In any case, termination of As 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.
Meg Sandoval
II. Yes, C is liable.
- As Complaint is anchored on an ERs liability for
quasi-delict provided in Art. 2180 in relation to Art.
2176, CC.
- It was not fatal to As 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. 2180s specification that [ERs] shall be
liable for the damages caused by their [EEs]
acting within the scope of their assigned
tasks[.]
2. The operation of the registered-owner 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 relationship between the driver and
owner; and
2. That the driver acted within the 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
aimis 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.
- 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 Bank4, 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 banks vice president at the time of the
accident; and (b) Borja had, according to respondent
bank, already bought the car at the time of the
mishap. For as long as the respondent bank remained
the registered owner of the car involved in the
vehicular accident, it could not escape primary
liability.
- 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
regist ered-owner r ule finds application. As
acknowledged in Filcar, there is no categorical

3 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.

4
Here, a Mitsubishi Lancer registered under the bank and driven by the banks 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 taskCA found no evidence that Borja was acting as the banks EE at the time. CA ruling was reversed by the SC.
Page 3 of 5 Meg Sandoval
 statutory pronouncement in the Land Transportation
and Traffic Code (LTTC) stipulating the liability of a
registered owner. The source of a registered owners
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
jurisprudenceArt. 2180 should defer to the
ROR, but it was never stated that 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 requirements of Art. 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.
- This disputable presumption, insofar as the RO in
relation to the actual driver is concerned, 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 car that hit Rthis 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 that it had no ER-EE relationship with B
2. That B acted outside the scope of his assigned
tasks; or
3. That it exercised the diligence of a good father
of a family in the selection and supervision of B.
- They failed:
1. C admitted that B was its EE at the time of the
accident;
2. C was unable to prove that B was acting outside
the scope of his assigned tasks.5 C presented no
5
Cs accountant and supervisor Sally Bellidos testimony that she didnt know what B was doing in the area does not affect the presumption.
Evidence must adduced.
6
Bellido testified that the license of B was nonprofessional and that they allowed him to be a service driver.
7SEC. 24. Use of drivers 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.
Page 4 of 5
positive evidence to show that B was acting in his
private capacity at the time of the incident;
3. C failed to prove that it exercised the requisite
diligence. C contented itself with Bs submission of
a nonprofessional drivers license6.
- Employing a person holding a nonprofessional
drivers license to operate anothers motor vehicle
violates Sec. 24, LTTC7 C did not only fail to exercise
due diligence in selecting B, it also committed an
actual violation of law.
- Cs act of providing copies of memoranda and
company rules was insufficient because they failed to
prove actual compliance8
- For failing to overturn the presumption that the
requirements of Article 2180 have been satisfied,
petitioner must be held liable.
Side matters:
- Cs 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
actionnon-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.
Cs interest and liability is distinct from that of its
driver.
Meg Sandoval
- Regardless of Cs 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 Cs 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 Bs liability be
made alongside that of the owner of the van he
was driving, his non-inclusion in these proceedings
does not absolutely hamper a judicious resolution
of As plea for relief.
- CA committed no reversible error when it awarded
actual damages to A, which was based on the
Certificate issued by Pealoza 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 Pealoza, and that she
was present when Pealoza 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 Bs gross negligence was the
proximate cause of Rs 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.
Page 5 of 5
- 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
f r o m p e t i t i o n e r C a r a va n Tr a ve l a n d To u r s
International, Inc. until full satisfaction; (b) moral
damages, exemplary damages, and attorneys fees
shall earn interest at the rate of 6% per annum from
the date of the RTCs 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 ones status as a real party-in-
interest in a quasi-delict case.
Brion: Courts may also impose exemplar y
damages, in addition to compensatory damages, if
the defendant acted with gross negligence. In the
present case, Bs 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 Bs ER and as the
vans RO, he discusses the ROR in relation to Arts.
2180 and 2176 thus:
- The Court in Filcar Transport Services v. Espinas
ruled that the RO of a vehicle is deemed the ER
of the vehicles driver. Thus, the vehicles RO is
vicariously liable for the drivers 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 ERs liability for the negligent acts of its
subordinate is direct and primary.
- Based on the foregoing, J. Brion concurs with
the ponencias results.
Meg Sandoval