In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Government Service Insurance System (GSIS) assails the January 15, 1991 Decision^[1] of the Court of Appeals in CA-G.R. No. 19849, which affirmed in toto the judgment of the Regional Trial Court of Butuan City, Branch II, dated April 30, 1985, stating in part:

"WHEREFORE, judgment is hereby rendered, as follows:

x x x
In Civil Case No. 2256:

a)	Dismissing the complaint against defendant Victor Uy;
b)	Ordering defendants Mabuhay Insurance and Guaranty Company, Inc., Guillermo Corbeta, NFA and GSIS to pay jointly and severally the following sums of money:
	i.	to pay plaintiff Gloria Kho Vda. de Calabia, the sum of P8,935.06 for doctor's fees, medicines, hospitalizations and medical expenses; P2,319.00 for transportation expenses; and P53.30 for telegrams; P10,000.00 for the injuries she sustained; P12,000.00 loss of income for six months.
	ii.	to plaintiff Victoria Kho, the sum of P832.00 for hospitalization and medicines; P10,000.00 for the injuries she sustained;
	iii.	to the heirs of Wellie [Willie] Calabia, Roland Kho and Maxima Uhmad [Ugmad] Vda. de Kho, the sum of P7,500.00 as funeral expenses less P5,000.00 advanced by defendant Victor Uy.
	iv.	to the heirs of Wellie [Willie] Calabia, Sr., heirs of Roland Kho and heirs of Maxima Ugmad Vda. de Kho; P30,000.00 each as compensatory damages.
c)	To pay plaintiff the sum of P10,000.00 as attorney's fees and expenses of litigation;
d)	Dismissing defendants counterclaim, and cross-claim; and
e)	To pay the costs.

That this decision is without prejudice as to the right of Mabuhay Insurance & Guaranty Co., Inc., and NFA to recover from Guillermo Corbeta and GSIS the amounts they may have paid by virtue hereof."^[2]

For purposes of this review, we deem as also assailed the disposition by the trial court in its Order issued on July 12, 1985, modifying its original decision, by awarding moral damages to the heirs of the deceased victims, as follows:

"Considering that the dispositive portion of the decision in this case, an award of P10,000.00 each made to plaintiffs Gloria Kho Vda. de Calabia x x x, for injuries they sustained, this award, through [sic] not clearly stated in the decision, is the moral damages the instant motion seeks to obtain. However, the prayer for moral damages for the death of the three (3) persons above-mentioned is proper. (citation omitted)

In view of the foregoing, the prayer of plaintiffs Gloria Kho Vda. de Calabia and Victoria Kho for an award of moral damages in their favor is hereby denied. However, as for the death of Wellie [Willie] Calabia, Sr., Rolando Kho and Maxima Ugmad Vda. de Kho, an award of moral damages is hereby made, and ordering and directing defendants Mabuhay Insurance and Guaranty Company Inc., Guillermo Corbeta, National Food Authority and Government Service Insurance System to pay jointly and severally the following sums to wit:

P10,000.00 to the heirs of Wellie [Willie] Calabia, Sr.

P10,000.00 to the heirs of Rolando Kho and

P10,000.00 to the heirs of Maxima Ugmad Vda. de Kho

x x x
IT IS SO ORDERED."^[3]

The relevant facts as found by the trial court are as follows:

National Food Authority (NFA, formerly National Grains Authority) was the owner of a Chevrolet truck which was insured against liabilities for death of and injuries to third persons with the GSIS.

On May 9, 1979, at about 7:00 in the evening at Tabon-Tabon, Butuan City, the said truck driven by Guillermo Corbeta collided with a public utility vehicle, a Toyota Tamaraw. The Toyota Tamaraw was owned and operated by Victor Uy, under the name and style of "Victory Line." The Tamaraw was a total wreck.

All the collision victims were passengers of the Toyota Tamaraw. Five (5) passengers died^[4] while ten (10) others sustained bodily injuries. Among those injured were private respondents, Victoria Jaime Vda. de Kho and Gloria Kho Vda. de Calabia. Among the dead were Maxima Ugmad Vda. de Kho, Roland Kho and Willie Calabia, Sr.

Three (3) cases were filed with the Court of First Instance of Agusan del Norte and Butuan City. The first, Civil Case No. 2196 for quasi-delict, damages and attorney's fees, was commenced by Uy on June 5, 1979 against NFA and Corbeta. On August 27, 1979, the second, Civil Case No. 2225 for damages, was filed by an injured passenger, Librado Taer, against Uy, the operator of the public utility vehicle, and insurer, Mabuhay Insurance and Guaranty Co. (MIGC). In turn, Uy filed a cross-claim against MIGC and a third-party complaint against Corbeta and NFA. The third, Civil Case No. 2256, was instituted by herein private respondents on November 26, 1979 against the following: NFA and Corbeta for damages due to quasi-delict; GSIS as insurer of the truck; Uy for breach of contract of carriage; and MIGC as insurer of the Toyota Tamaraw. These cases were consolidated and partially tried by Judge Fortunato A. Vailoces, of the then Court of First Instance of Agusan del Norte and Butuan City.

These cases were later on transferred to Branch II of the Regional Trial Court of Butuan City. Trial ensued and on April 30, 1985, the court rendered its decision^[5] holding that Corbeta's negligence was the proximate cause of the collision. The findings of the trial court stated that the truck which crossed over to the other lane was speeding because after the collision, its left front wheel was detached and the truck traveled for about fifty (50) meters and fell into a ravine.^[6] Likewise, the court concluded that if both vehicles had traveled in their respective lanes, the incident would not have occurred.^[7] However, the Chevy cargo truck had crossed over to the other lane which, under traffic rules, was the lane of the Toyota Tamaraw.^[8]

In Civil Case No. 2196, the trial court awarded Uy the total amount of one hundred nine thousand one hundred (P109,100.00) pesos for damages. In Civil Case No. 2225, said court dismissed the case against Uy and ordered MIGC, Corbeta and NFA to pay plaintiff Taer, jointly and severally, the total amount of forty thousand five hundred fifty-nine pesos and ninety four centavos (P40,559.94) for actual, compensatory, and moral damages plus attorney's fees. Damages were likewise awarded to the herein private respondents in Civil Case No. 2256, as earlier mentioned.

Corbeta and NFA appealed the decision of the trial court in Civil Case Nos. 2196, 2225, and 2256 to the Court of Appeals. GSIS also elevated the decision in Civil Case No. 2256 to the same appellate court. The appeals were docketed as C.A.-G.R. Nos. 19847, 19848, and 19849.

The Court of Appeals agreed with the conclusions of the trial court and ruled as follows:

"WHEREFORE, in view of the foregoing considerations, and finding no reversible error, the decisions of the Court a quo in Civil Cases Nos. 2196, 2225 and 2256 are hereby AFFIRMED in toto, with costs against the appellants.

SO ORDERED."^[9]

On February 5 and 6, 1991, GSIS and NFA filed their motions for reconsideration respectively, which were denied by the respondent court in its Resolution^[10] dated August 13, 1991.

On October 4, 1991, only GSIS filed this petition for review on certiorari based on the following assigned errors:

1. The respondent court erred in holding GSIS solidarily liable with NFA.
   
   
2. The respondent court erred in holding GSIS liable beyond the terms and conditions of the contract of insurance and the limitations under Insurance Memorandum Circular (IMC) No. 5-78.
   
   
3. The respondent court erred in holding GSIS liable without proof that a notice of claim had been filed within six (6) months from the date of the accident.

We find pertinent the following issues:

1)	Whether the respondent court erred in holding GSIS solidarily liable with the negligent insured/owner-operator of the Chevrolet truck for damages awarded to private respondents which are beyond the limitations of the insurance policy and the Insurance Memorandum Circular No. 5-78.
2)	Whether the respondent court failed to consider that the private respondents have no cause of action against the petitioner, allegedly for failure of the victims to file an insurance claim within six (6) months from the date of the accident.

Petitioner denies solidary liability with the NFA or the negligent operator of the cargo truck because it claims that they are liable under different obligations. It asserts that the NFA's liability is based on quasi-delict, while petitioner's liability is based on the contract of insurance. Citing articles 1207^[11] and 1208^[12] of the Civil Code of the Philippines, petitioner states that when there are two or more debtors or two or more creditors, the obligation as a general rule is joint. It claims that the only exceptions are: (1) when there is a stipulation for solidary obligation; (2) when the nature of the obligation requires solidary liability; and (3) when the law declares the obligation to be solidary. However, since neither the provision of the contract nor the insurance law provides for solidary liability, petitioner asserts that the presumption is that its obligation arising from a contract of insurance is joint.

Petitioner's position insofar as joint liability is concerned is not tenable. It is now established that the injured or the heirs of a deceased victim of a vehicular accident may sue directly the insurer of the vehicle. Note that common carriers are required to secure Compulsory Motor Vehicle Liability Insurance [CMVLI] coverage as provided under Sec. 374^[13] of the Insurance Code, precisely for the benefit of victims of vehicular accidents and to extend them immediate relief.^[14] As this Court held in Shafer vs. Judge, RTC of Olongapo City, Br. 75:^[15]

"Compulsory Motor Vehicle Liability Insurance (third party liability, or TPL) is primarily intended to provide compensation for the death or bodily injuries suffered by innocent third parties or passengers as a result of a negligent operation and use of motor vehicles. The victims and/or their defendants [dependents] are assured of immediate financial assistance, regardless of the financial capacity of motor vehicle owners.

x x x
The injured for whom the contract of insurance is intended can sue directly the insurer. The general purpose of statutes enabling an injured person to proceed directly against the insurer is to protect injured persons against the insolvency of the insured who causes such injury, and to give such injured person a certain beneficial interest in the proceeds of the policy, and statutes are to be liberally construed so that their intended purpose may be accomplished. It has even been held that such a provision creates a contractual relation which inures to the benefit of any and every person who may be negligently injured by the named insured as if such injured person were specifically named in the policy. (S 449 7 Am. Jur., 2d, pp. 118-119)"^[16]

However, although the victim may proceed directly against the insurer for indemnity, the third party liability is only up to the extent of the insurance policy and those required by law. While it is true that where the insurance contract provides for indemnity against liability to third persons, and such third persons can directly^[17] sue the insurer, the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be held liable in solidum with the insured and/or the other parties found at fault.^[18] For the liability of the insurer is based on contract; that of the insured carrier or vehicle owner is based on tort.^[19] The liability of GSIS based on the insurance contract is direct, but not solidary with that of the NFA. The latter's liability is based separately on Article 2180^[20] of the Civil Code.^[21]

Obviously, the insurer could be held liable only up to the extent of what was provided for by the contract of insurance, in accordance with CMVLI law. At the time of the incident, the schedule of indemnities for death and/or bodily injuries, professional fees, hospital and other charges payable under a CMVLI coverage was provided under the Insurance Memorandum Circular (IMC) No. 5-78 which was approved on November 10, 1978. As therein provided, the maximum indemnity for death was twelve thousand (P12,000.00) pesos per victim.^[22] The schedules for medical expenses were also provided by said IMC, specifically in paragraphs (C) to (G).

Consequently, heirs of the victims who died in the May 9, 1979 vehicular incident, could proceed (1) against GSIS for the indemnity of P12,000 for each dead victim, and against NFA and Guillermo Corbeta for any other damages or expenses claimed; or (2) against NFA and Corbeta to pay them all their claims in full.

It follows also that injured victims, Gloria Kho Vda. de Calabia and Victoria Kho, could claim their medical expenses for eight thousand nine hundred thirty-five pesos and six centavos (P8,935.06) and eight hundred thirty-two (P832.00) pesos, from any of the following: GSIS, NFA, or Corbeta. As to the other damages, only NFA or Corbeta may be held liable therefor.

Computation of hospital charges and fees for the services rendered to the injured victims was conclusively established by the trial court. The petitioner failed to object to the evidence thereon, when presented by the private respondents during the trial. Thus, these factual bases for the award of damages may no longer be attacked. For generally, findings of the judge who tried the case and heard the witnesses could not be disturbed on appeal, unless there are substantial facts and particular circumstances which have been overlooked but which, if properly considered, might affect the result of the case.^[23] Thus, considering the evidence on record including the schedule of indemnities provided under IMC No. 5-78, we find no cogent reason to disturb the computation of medical charges and expenses that justify the award of damages by the trial court.

As to the second issue, the petitioner contends that it cannot be held liable without proof nor allegation that the private respondents filed before its office a notice of claim within six (6) months from the date of the accident. This requirement, according to the petitioner, gives the insurer the opportunity to investigate the veracity of the claim, and non-compliance therewith constitutes waiver. Since the claim was not reported to the insurer, the petitioner avers that the presumption is that the victim opted to pursue his claim against the motor vehicle owner or against the tortfeasor.

However, in this case the records reveal that on September 7, 1979, the private respondents sent a notice of loss to the petitioner informing the latter of the accident. Included as "Exhibit J"^[24] in the records, this notice constitutes evidence of the loss they suffered by reason of the vehicular collision. They stressed further that the petitioner did not deny receipt of notice of claim during the trial, and it would be too late now to state otherwise.

Although merely factual, we need to emphasize that the alleged delay in reporting the loss by the insured and/or by the beneficiaries must be promptly raised by the insurer^[25] in objecting to the claims. When the insured presented proof of loss before the trial court, the insurer failed to object to said presentation. The petitioner should have promptly interposed the defense of delay, or belated compliance, concerning the notice of claim. Moreover, the petitioner merely waited for the victims or beneficiaries to file their complaint. As matters stand now, the defense of laches or prescription is deemed waived because of petitioner's failure to raise it not only before but also during the hearing.^[26]

To recapitulate, petitioner seeks a definitive ruling only on the extent of its liability, as insurer of NFA, to those injured or killed in the May 9, 1979 vehicular collision.

As found by the trial court, the driver (Guillermo Corbeta), the operator (NFA), and MIGC, are solidarily liable for damages as computed below:

SCHEDULE A

I.	For the Injured Victims
	1)	Gloria Kho Vda. de Calabia
		a)	Medical expenses	P 8,935.06
		b)	Transportation and Telegraph Expenses	2,372.30
		c)	Other Compensatory/Moral Damages	10,000.00
		d)	Loss of Income	12,000.00
	Total			P 33,307.36
	2) Victoria Kho
		a)	Medical expenses P 832.00
		b)	Other Compensatory/Moral Damages 10,000.00
	Total			P10,832.00
II.	For the Heirs of the Deceased Victims:

 

		Compensatory/
	Funeral	Death	Moral
	Expenses	Indemnity	Damages	Total
1) Heirs of Willie Calabia, Sr.	P 2,500.00	P30,000.00	P10, 000.00	42,500.00
2) Heirs of Roland Kho	2,500.00	30,000.00	10,000.00	42,500.00
3) Heirs of Maxima Ugmad Vda.
de Kho	2,500.00	30,000.00	10,000.00	42,500.00
Sub-Total	P 7,500.00	P90,000.00	P30,000.00	P127,500.00
Less: Advances by Victor Uy	(5,000.00)	NIL	_	(5,000.00)
Balance	P2,500.00	P90,000.00	P30,000.00	122,500.00
III. Total Amount of Attorney's Fees				P10,000.00

Note that, the petitioner (GSIS) was impleaded as insurer of NFA. But under the CMVLI law, the petitioner could only be held liable under its contract of insurance. And pursuant to the CMVLI law, its liability is primary, and not dependent on the recovery of judgment from the insured. Hence, GSIS is directly liable to the private respondents, in the following amounts:

SCHEDULE B

I.	Injured Victims	Medical expenses
	1) Victoria Jaime Vda. de Kho	P 832.00
	2) Gloria Kho Vda. de Calabia	P 8,935.06
II.	Heirs of Deceased Victims	Death Indemnity
	1) Heirs of Willie Calabia, Sr.	P 12,000.00
	2) Heirs of Roland Kho	12,000.00
	3) Heirs of Maxima Ugmad Vda. de Kho	12,000.00

The balance of the private respondents' claims as shown on Schedule A above, must be paid by Corbeta or NFA, or MIGC, the parties found solidarily liable.^[27]

WHEREFORE, the instant petition is hereby GRANTED, but the decision of the trial court as affirmed by the Court of Appeals is hereby MODIFIED, as follows:

1. Petitioner Government Service Insurance System is ordered to pay (a) twelve thousand pesos (P12,000.00) as death indemnity to each group of heirs of the deceased, Willie Calabia Sr., Roland Kho and Maxima Ugmad Vda. de Kho; (b) eight hundred thirty-two (P832.00) pesos for medical expenses of Victoria Jaime Vda. de Kho; and (c) eight thousand, nine hundred thirty-five pesos and six centavos (P8,935.06) for medical expenses of Gloria Kho Vda. de Calabia.
   
   
2. Guillermo Corbeta, National Foods Authority, and Mabuhay Insurance & Guaranty Co., Inc., jointly and severally, are ordered to pay private respondents' claims^[28] as adjudged by the Regional Trial Court of Butuan City, minus the amounts that GSIS must pay to the injured victims and the heirs of the deceased victims as abovestated.

This decision is immediately executory. No pronouncement as to costs.

SO ORDERED.

Bellosillo (Chairman), Mendoza, and Buena, JJ., concur.
Puno, J., no part, on official leave.

---

^[1] Penned by Associate Justice Jainal D. Rasul, concurred by Associate Justices Fidel P. Purisima and Jorge S. Imperial; Rollo, pp. 23-30.

^[2] Court of Appeals Rollo, pp. 75-76. Emphasis supplied.

^[3] Id. at 85-86. Emphasis supplied.

^[4] "Annex A," RTC records, Civil Case No. 2256, p. 13. The police report states that only three (3) passengers died on the spot and another one (1) died a few hours later at Santos Hospital.

^[5] Penned by Judge Rosarito F. Abalos.

^[6] Court of Appeals Rollo, p. 70.

^[7] Id. at 70-71.

^[8] Ibid.

^[9] Rollo, p. 30.

^[10] Court of Appeals, Rollo, p. 152 B-C.

^[11] Civil Code of the Philippines, art. 1207 states -- The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestations. There is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity.

^[12] Civil Code of the Philippines, art. 1208 states -- If from the law, or the nature or the wording of the obligations to which the preceding article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many equal shares as there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court governing the multiplicity of suits.

^[13] Insurance Code, sec. 374 states -- It shall be unlawful for any land transportation operator or owner of a motor vehicle to operate the same in the public highways unless there is in force in relation thereto a policy of insurance or guaranty in cash or surety bond issued in accordance with the provisions of this chapter to indemnify the death or bodily injury of a third party or passenger, as the case may be, arising from the use thereof.

^[14] Insurance Memorandum Circular No. 5-78, paragraph I.

^[15] 167 SCRA 386 (1988).

^[16] Id.at 390-391.

^[17] Malayan Insurance Co., Inc. v. Court of Appeals, 165 SCRA 536, 544 (1988); citing Coquia v. Fieldman's Insurance Co., Inc., 26 SCRA 178 (1969).

^[18] Ibid.

^[19] Ibid.

^[20] Employers shall be liable for the damages caused by their employees.

^[21] See Vda. de Maglana vs. Consolacion, 212 SCRA 268 (1992).

^[22] Insurance Memorandum Circular No. 5-78. Subject: Schedule of Indemnities for Death and/or Bodily Injuries, Professional Fees, Hospital and other Charges Payable under a Compulsory Motor Vehicle Liability Insurance Coverage.

x x x x x x x x x

II. SCHEDULE OF INDEMNITIES-- x x x

A. DEATH INDEMNITY -- Maximum of .........P 12,000.00

^[23] People v. Pareja, 30 SCRA 693, 703 (1969).

^[24] Regional Trial Court, folder of exhibits, p. 58.

^[25] See Pacific Timber Export Corp. v. CA, 112 SCRA 199, 206 (1982).

^[26] MD Transit & Taxi Co., Inc. v. Estrella, 113 SCRA 378, 387 (1982); citing Blanco v. WCC, 29 SCRA 7 (1969).

^[27] The decision of the trial court as affirmed by the Court of Appeals not having been appealed by the insurer (MIGC) of the Toyota Tamaraw, the same is now final as far as that entity is concerned, and may not be modified by this Court. Failure of any parties to appeal the judgment as against him makes such judgment final and executory. (Firestone Tire and Rubber Company of the Philippines vs. Tempongko, 27 SCRA 418. 424 (1969); Singapore Airlines Limited vs. Court of Appeals, 243 SCRA 143, 148 (1995). By the same token, an appeal by one party from such judgment does not inure to the benefit of the other party who had not appealed nor can it be deemed to be an appeal of such other party from the judgment against him.

^[28] See Schedule A.