## FACTS:

The petitioner, Elias S. Cipriano, owns a rustproofing vehicle enterprise called E.S. Cipriano Enterprises. The private respondent, Maclin Electronics, Inc., brought their car to the petitioner's shop for rustproofing. The car was under a job order and was expected to be ready for release on the same day. Unfortunately, a fire broke out in the petitioner's shop and resulted in the destruction of the private respondent's car which was kept inside the building. The private respondent demanded reimbursement for the value of the car, but the petitioner argued that the fire was a fortuitous event and denied liability. In response, the private respondent filed a lawsuit against the petitioner, claiming negligence and failure to comply with registration and insurance requirements.

The trial court ruled in favor of the private respondent, ordering the petitioner to pay for the loss of the car and attorney's fees. The petitioner then appealed the decision, but the Court of Appeals affirmed the lower court's ruling. The appellate court held that the provisions of P.D. No. 1572 and its implementing rules should apply to the case. Furthermore, the court stated that owners of service and repair enterprises assume the risk of loss of their customer's property.

## ISSUES:

1. Whether the petitioner was required to insure his business and the vehicles received by him in the course of his business under P.D. No. 1572.

2. If required to insure, whether his failure to do so constituted negligence, rendering him liable for loss due to the risk required to be insured against.

3. Whether petitioner can be held liable for the lost vehicle despite claiming the fire was a fortuitous event.

4. Whether the award of attorney's fees by the lower court was properly sustained by the Court of Appeals.

## RULING:

1. The Supreme Court held that the petitioner was indeed required to ensure his business and the vehicles in his custody as per P.D. No. 1572 and its implementing rules. It was found that he operated his business without the necessary accreditation and license, failing to secure insurance that would cover the vehicles for risks such as fire.

2. The petitioner’s failure to comply with statutory duties as per P.D. No. 1572 and its regulations constituted negligence. This negligence established his liability for the loss of the private respondent’s vehicle, effectively rendering him responsible to cover the damages even if the incident resulted from a fortuitous event.

3. The contention that the fire was a fortuitous event does not absolve the petitioner of liability. The law specifically required the assumption of risk for such eventualities, which the petitioner failed to insure against, establishing his negligence as the proximate cause of the loss.

4. The award of attorney's fees by the lower court was deemed erroneous by the Supreme Court as the reasons for such an award were not explicitly justified in the decisions of the lower courts. The Supreme Court modified the decision by deleting the award of attorney's fees.

## PRINCIPLES:

• Violation of a statutory duty constitutes negligence per se.

• Non-compliance with legal requirements on insurance coverage in business operations, specifically under P.D. No. 1572, leads to the assumption of risk for losses, including those due to fortuitous events.

• The nature of the obligation can render an obligor liable even for fortuitous events if the law or the circumstances require the assumption of such risk.

• Justification for the award of attorney’s fees must be set forth clearly in the decision of the court and cannot be inferred or merely implied.