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CARAVAN TRAVEL v. ERMILINDA R. ABEJAR

FACTS:

The case involves a complaint for damages filed by Ermilinda Abejar against Caravan Travel and Tours International, Inc. (Caravan) and Jimmy Bautista. On July 13, 2000, Jesmariane Reyes was hit by a Mitsubishi L-300 van with plate number PKM 195, which was registered under Caravan. Bautista, who was Caravan's employee and assigned as the van's driver, was driving at the time of the accident. Reyes was taken to the hospital by an unidentified civilian after being left in the van by Bautista. Despite medical attention, Reyes died two days after the accident. Abejar, Reyes' aunt who raised her, filed a complaint for damages against Bautista and Caravan. The Regional Trial Court found Bautista grossly negligent and awarded damages in favor of Abejar. Caravan filed a motion for reconsideration, but it was denied by the Court of Appeals. Caravan then filed a petition for review on certiorari.

Abejar alleged that she exercised substitute parental authority over Reyes, that Reyes' death was caused by the negligence of Caravan and its driver, and that she suffered damage as a result of Reyes' death. Caravan argued that Abejar was not a real party in interest and should not be allowed to bring the action for damages. However, the court held that Abejar is a real party in interest since she exercised substitute parental authority over Reyes. The court explained that under Article 216 of the Family Code, in the absence of parents or a judicially appointed guardian, persons exercising substitute parental authority have the same rights and duties as actual parents. Therefore, Abejar, as Reyes' substitute parent, has the right to seek indemnification for her loss.

The claim arises from the death of Abejar's daughter, Celsa Reyes, who was hit by a van owned by the petitioner. At the time of her death, Reyes was already 18 years old and emancipated. However, Abejar continued to support and care for her daughter even after she turned 18. The termination of parental authority over Reyes did not preclude Abejar from filing her complaint. According to a previous Supreme Court ruling, Article 1902 of the old Civil Code (now Article 2176) is broad enough to allow plaintiffs who are not relatives of the deceased to claim damages for the death of a sibling. The court interpreted Article 1902 to mean that anyone who suffers damage from culpa aquiliana, whether a relative or not of the victim, may recover damages from the person responsible.

The respondent's complaint is based on the employer's liability for quasi-delict provided in Article 2180 of the Civil Code. Article 2180 states that employers shall be liable for damages caused by their employees acting within the scope of their assigned tasks. On the other hand, the registered-owner rule holds that registered owners are liable for death or injuries caused by the operation of their vehicles. In this case, the petitioner is both the employer of the van driver and the registered owner of the van. The conflict arises in determining the liability of the petitioner under these two rules. Article 2180 requires proof of an employment relationship between the driver and the owner, as well as proof that the driver acted within the scope of his assigned tasks. On the other hand, the registered-owner rule only requires proving that the defendant-employer is the registered owner of the vehicle.

The court first cited Section 5(a) of Republic Act No. 4136, or the Land Transportation and Traffic Code, which requires the registration of motor vehicles for the purpose of identifying the owner in case of accidents or damage caused by the vehicle. The court emphasized that registration does not transfer ownership but allows for the use of the vehicle on public highways.

The case of Castilex Industrial Corporation v. Vasquez, Jr. was cited as an example. In this case, a Toyota pick-up truck registered under Castilex Industrial Corporation collided with a motorcycle driven by Romeo Vasquez. Vasquez's parents filed a case for damages against Benjamin Abad, the driver, and Castilex. Castilex argued that Abad was acting in his private capacity at the time of the accident. The Supreme Court absolved Castilex of liability, explaining that the plaintiff failed to prove that Abad was acting within the scope of his assigned tasks. The court outlined the process for an employer to be held liable for the acts of its employees, with the need to establish an employer-employee relationship and prove that the employee was acting within the scope of their assigned task.

The case of Aguilar, Sr. v. Commercial Savings Bank was also discussed, which involved a Mitsubishi Lancer registered under Commercial Savings Bank that hit Conrado Aguilar, Jr. The court found Commercial Savings Bank solidarity liable with its assistant vice-president Ferdinand Borja who was driving the vehicle. However, there was no further elaboration on the facts and details of this case.

ISSUES:

  1. Whether the employer can be held liable for the acts of its employee.

  2. Whether the employer can be absolved of liability if the employee was acting outside the scope of his assigned tasks.

  3. Whether the registered owner of a vehicle can be held primarily liable for damages caused by the vehicle.

  4. Whether the registered owner of a vehicle can use the defenses found in Article 2180 of the Civil Code.

  5. Whether Article 2180 should be completely discarded in cases where the registered-owner rule applies.

  6. Whether the petitioner failed to exercise due diligence in selecting and supervising its employees.

  7. Whether the petitioner can be held liable for the negligence of its employee, even though the employee was dropped as a party in the case.

  8. Whether Bautista is an indispensable party in the case.

  9. Whether the Certificate presented as evidence for actual damages is hearsay.

  10. Whether the Court of Appeals erred in awarding civil indemnity, exemplary damages, and moral damages.

  11. Whether a person exercising substitute parental authority is considered an ascendant of the deceased for the purpose of awarding moral damages under Article 2206(3) of the Civil Code.

RULING:

  1. Yes, the employer can be held liable for the acts of its employee under Article 2180 of the Civil Code.

  2. The employer can be absolved of liability if the employee was acting outside the scope of his assigned tasks, and it is the plaintiff's burden to prove that the employee was acting within the scope of his assigned task.

  3. The registered owner of a vehicle can be held primarily liable for damages caused by the vehicle, even if not used for public service.

  4. The registered owner of a vehicle cannot use the defenses found in Article 2180 of the Civil Code. The motor vehicle registration law modified Article 2180 by making these defenses unavailable to the registered owner. The registered owner is held primarily liable for the damages caused.

  5. Article 2180 should not be completely discarded in cases where the registered-owner rule applies. The appropriate approach is to harmonize the registered-owner rule with Articles 2176 and 2180 of the Civil Code. In cases where both rules apply, the plaintiff must first establish that the employer is the registered owner of the vehicle. Once ownership is proven, there is a presumption that the requirements of Article 2180 have been satisfied. The burden of proof then shifts to the defendant to show that no liability under Article 2180 has arisen.

  6. Yes, the petitioner failed to exercise due diligence in selecting and supervising its employees. The Court emphasized that to establish diligence in the supervision of employees, the issuance of company policies must be coupled with proof of compliance. The mere formulation of various company policies on safety without showing that they were being complied with is not sufficient to exempt the petitioner from liability. The petitioner failed to prove actual compliance with its policies and procedures.

  7. Yes, the petitioner can still be held liable for the negligence of its employee, even though the employee was dropped as a party in the case. The liability imposed on the registered owner of a motor vehicle is direct and primary. It does not depend on the inclusion of the negligent driver in the action. If the registered owner can prove that it exercised due diligence in selecting and supervising its employees, it may be able to escape liability. However, in this case, the petitioner failed to overturn the presumption of negligence and the requirements of Article 2180.

  8. Bautista is not an indispensable party in the case as his interest and liability is distinct from that of the petitioner. Liability attaches to the petitioner as the registered owner of the vehicle involved in the mishap. A determination of the petitioner's liability as the owner can proceed independently of Bautista's conduct as the driver. (Arcelona v. Court of Appeals)

  9. The Certificate presented as evidence for actual damages is not hearsay. The Certificate sought to establish that the respondent herself paid funeral expenses amounting to P35,000.00. The respondent personally identified the Certificate and testified that she paid the amount to the person indicated in the Certificate. Since the respondent had personal knowledge of the facts sought to be proved by the Certificate, it is not hearsay. Therefore, it was not an error for the Court of Appeals to admit the Certificate as evidence.

  10. The Court of Appeals did not err in awarding civil indemnity, exemplary damages, and moral damages. Bautista was found to have been grossly negligent in driving the van, which was determined to be the proximate cause of the victim's death. Both the Court of Appeals and the Regional Trial Court made factual findings on negligence and causation, which are binding unless unsupported by evidence or grounded on a misapprehension of facts. Since the petitioner did not present any evidence to dispute the findings of the lower courts, the evidentiary bases for the award of civil indemnity and exemplary damages stand. The award of moral damages is also justified under Article 2206(3) of the Civil Code.

  11. Yes, a person exercising substitute parental authority is considered an ascendant of the deceased for the purpose of awarding moral damages under Article 2206(3) of the Civil Code. Hence, the person exercising substitute parental authority is entitled to moral damages.

PRINCIPLES:

  • Under Article 2180 of the Civil Code, an employer is liable for the torts committed by employees within the scope of their assigned tasks.

  • The plaintiff must prove that the employee was acting within the scope of his assigned task to hold the employer liable.

  • The registered owner of a vehicle can be held primarily liable for damages caused by the vehicle on public highways, even if not used for public service. The main aim of motor vehicle registration is to identify the owner so that responsibility can be fixed on a definite individual.

  • The motor vehicle registration law modified Article 2180 of the Civil Code, making the defenses inapplicable to the registered owner.

  • Rules must be construed in a manner that will harmonize them with other rules to form a uniform and consistent system of jurisprudence.

  • In cases where both the registered-owner rule and Article 2180 apply, the plaintiff must first establish the ownership of the registered owner. There is a presumption that the requirements of Article 2180 have been satisfied. The burden of proof then shifts to the defendant to show no liability under Article 2180 has arisen.

  • Mere disavowals are not sufficient to overturn a presumption. Positive evidence must be adduced.

  • Employing a person holding a non-professional driver's license to operate another's motor vehicle violates Section 24 of the Land Transportation and Traffic Code, which requires the person to be a duly licensed professional driver.

  • To prove diligence in the supervision of employees, the formulation of suitable rules and regulations must be coupled with proof of compliance.

  • The mere formulation of various company policies on safety without showing that they were being complied with is not sufficient to exempt the employer from liability arising from the negligence of its employees.

  • The liability imposed on the registered owner of a motor vehicle is direct and primary and does not depend on the inclusion of the negligent driver in the action.

  • The distinction between indispensable parties and necessary parties determines a court's capacity to render effective judgment. Indispensable parties are parties in interest without whom no final determination can be had of an action, while the presence of necessary parties is not imperative, but preferred for complete relief.

  • An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made without injuring or affecting that interest. However, a person is not an indispensable party if their interest is separable from the other parties and will not be directly or injuriously affected by a decree that does complete justice between them. (Arcelona v. Court of Appeals)

  • Evidence is hearsay when its probative value is based on the personal knowledge of a person other than the person testifying. However, if the person testifying has personal knowledge of the facts sought to be proved by the evidence, it is not hearsay. (Certificado et al. v. Lagaria)

  • Findings of fact, when established by the trial court and affirmed by the Court of Appeals, are binding on the higher court unless patently unsupported by evidence or grounded on a misapprehension of facts.

  • Moral damages are awarded to compensate the claimant for his or her actual injury, and not to penalize the wrongdoer. It aims to restore—to the extent possible—"the spiritual status quo ante[.]"

  • Persons exercising substitute parental authority are to be considered ascendants for the purpose of awarding moral damages as they are intended to stand in place of a child's parents and ensure the well-being and welfare of a child.

  • The death or injury of a person exercising substitute parental authority leads to the damage or prejudice of the ward.

  • The recovery of moral damages for deaths caused by quasi-delict is limited to the spouse, legitimate and illegitimate descendants, and ascendants of the deceased.

  • Exemplary damages and attorney's fees may be awarded when necessary.

  • Interest on damages may be imposed at the discretion of the court. When the demand for damages is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially. When the demand cannot be reasonably established at that time, the interest shall begin to run from the date the judgment of the court is made. The actual base for the computation of legal interest shall be on the amount finally adjudged.

  • Final and executory judgments earn interest of 6% per annum until full satisfaction, as this interim period is deemed equivalent to a forbearance of credit.