TIU vs.

ARRIESGADO This is a petition for review on certiorari under Rule 45 of the Rules of Court fro the De!ision"#$ of the Court of Appeals in CA%G.R. C& 'o. 54(54 affir in) with odifi!ation the De!ision"*$ of the Re)ional Trial Court+ ,th -udi!ial Re)ion+ Ce.u Cit/+ 0ran!h *1+ in Civil Case 'o. CE0% 523( for .rea!h of !ontra!t of !arria)e+ da a)es and attorne/4s fees+ and the Resolution dated 5e.ruar/ *3+ #222 den/in) the otion for re!onsideration thereof. The followin) fa!ts are undisputed6 At a.out #1611 p. . of 7ar!h #5+ #28,+ the !ar)o tru!9 ar9ed :Condor ;ollow 0lo!9s and General 7er!handise< .earin) plate nu .er G0=%3,5 was loaded with firewood in 0o)o+ Ce.u and left for Ce.u Cit/. Upon rea!hin) Sitio A))ies+ =o.la!ion+ Co postela+ Ce.u+ >ust as the tru!9 passed over a .rid)e+ one of its rear tires e?ploded. The driver+ Ser)io =edrano+ then par9ed alon) the ri)ht side of the national hi)hwa/ and re oved the da a)ed tire to have it vul!ani@ed at a near./ shop+ a.out ,11 eters awa/."($ =edrano left his helper+ -ose 7itante+ -r. to 9eep wat!h over the stalled vehi!le+ and instru!ted the latter to pla!e a spare tire si? fatho s awa/"4$ .ehind the stalled tru!9 to serve as a warnin) for on!o in) vehi!les. The tru!94s tail li)hts were also left on. It was a.out #*611 a. .+ 7ar!h #3+ #28,. At a.out 4645 a. .+ D4 Rou)h Riders passen)er .us with plate nu .er =0=%,*4 driven ./ &ir)ilio Te AaspiBas was !ruisin) alon) the national hi)hwa/ of Sitio A))ies+ =o.la!ion+ Co postela+ Ce.u. The passen)er .us was also .ound for Ce.u Cit/+ and had !o e fro 7a/a+ Daan.anta/an+ Ce.u. A on) its passen)ers were the Spouses =edro A. Arries)ado and 5elisa =epito Arries)ado+ who were seated at the ri)ht side of the .us+ a.out three C(D or four C4D pla!es fro the front seat. As the .us was approa!hin) the .rid)e+ AaspiBas saw the stalled tru!9+ whi!h was then a.out *5 eters awa/."5$ ;e applied the .rea9s and tried to swerve to the left to avoid hittin) the tru!9. 0ut it was too lateE the .us ra ed into the tru!94s left rear. The i pa!t da a)ed the ri)ht side of the .us and left several passen)ers in>ured. =edro Arries)ado lost

!ons!iousness and suffered a fra!ture in his ri)ht !olles."3$ ;is wife+ 5elisa+ was .rou)ht to the Danao Cit/ ;ospital. She was later transferred to the Southern Island 7edi!al Center where she died shortl/ thereafter.",$ Respondent =edro A. Arries)ado then filed a !o plaint for .rea!h of !ontra!t of !arria)e+ da a)es and attorne/4s fees .efore the Re)ional Trial Court of Ce.u Cit/+ 0ran!h *1+ a)ainst the petitioners+ D4 Rou)h Riders .us operator Fillia Tiu and his driver+ &ir)ilio Te AaspiBas on 7a/ *,+ #28,. The respondent alle)ed that the passen)er .us in Guestion was !ruisin) at a fast and hi)h speed alon) the national road+ and that petitioner AaspiBas did not ta9e pre!autionar/ easures to avoid the a!!ident."8$ Thus6 3. That the a!!ident resulted to the death of the plaintiff4s wife+ 5elisa =epito Arries)ado+ as eviden!ed ./ a Certifi!ate of Death+ a ?ero? !op/ of whi!h is hereto atta!hed as inte)ral part hereof and ar9ed as A''EH I :A<+ and ph/si!al in>uries to several of its passen)ers+ in!ludin) plaintiff hi self who suffered a :COAAES 5RACTURE RIG;T+< per 7edi!al Certifi!ate+ a ?ero? !op/ of whi!h is hereto atta!hed as inte)ral part hereof and ar9ed as A''EH I :0< hereof. ,. That due to the re!9less and i prudent drivin) ./ defendant &ir)ilio Te AaspiBas of the said Rou)h Riders passen)er .us+ plaintiff and his wife+ 5elisa =epito Arries)ado+ failed to safel/ rea!h their destination whi!h was Ce.u Cit/+ the pro?i ate !ause of whi!h was defendant%driver4s failure to o.serve ut ost dili)en!e reGuired of a ver/ !autious person under all !ir!u stan!es. 8. That defendant Fillia Tiu+ .ein) the owner and operator of the said Rou)h Riders passen)er .us whi!h fi)ured in the said a!!ident+ wherein plaintiff and his wife were ridin) at the ti e of the a!!ident+ is therefore dire!tl/ lia.le for the .rea!h of !ontra!t of !arria)e for his failure to transport plaintiff and his wife safel/ to their pla!e of destination whi!h was Ce.u Cit/+ and whi!h failure in his o.li)ation to transport safel/ his passen)ers was due to and in !onseGuen!e of his failure to e?er!ise the dili)en!e of a )ood father of the fa il/ in the sele!tion and supervision of his e plo/ees+ parti!ularl/ defendant%driver &ir)ilio Te AaspiBas."2$

The respondent pra/ed that >ud) ent .e rendered in his favor and that the petitioners .e !onde ned to pa/ the followin) da a)es6 #D. To pa/ to plaintiff+ >ointl/ and severall/+ the a ount of =(1+111.11 for the death and unti el/ de ise of plaintiff4s wife+ 5elisa =epito Arries)adoE *D. To pa/ to plaintiff+ >ointl/ and severall/+ the a ount of =(8+44#.51+ representin) a!tual e?penses in!urred ./ the plaintiff in !onne!tion with the deathJ.urial of plaintiff4s wifeE (D. To pa/ to plaintiff+ >ointl/ and severall/+ the a ount of =#+##(.81+ representin) edi!alJhospitali@ation e?penses in!urred ./ plaintiff for the in>uries sustained ./ hi E 4D. To pa/ to plaintiff+ >ointl/ and severall/+ the a ount of =51+111.11 for oral da a)esE 5D. To pa/ to plaintiff+ >ointl/ and severall/+ the a ount of =51+111.11 ./ wa/ of e?e plar/ da a)esE 3D. To pa/ to plaintiff+ >ointl/ and severall/+ the a ount of =*1+111.11 for attorne/4s feesE ,D. To pa/ to plaintiff+ >ointl/ and severall/+ the a ount of =5+111.11 for liti)ation e?penses. =AAI'TI55 5URT;ER =RAKS 5OR SUC; OT;ER REAIE5S A'D RE7EDIES I' AAF A'D ELUITK."#1$ The petitioners+ for their part+ filed a Third%=art/ Co plaint"##$ on Au)ust *#+ #28, a)ainst the followin)6 respondent =hilippine =hoeni? Suret/ and Insuran!e+ In!. C==SIID+ petitioner Tiu4s insurerE respondent 0en>a in Condor+ the re)istered owner of the !ar)o tru!9E and respondent Ser)io =edrano+ the driver of the tru!9. The/ alle)ed that petitioner

AaspiBas was ne)otiatin) the uphill !li . alon) the national hi)hwa/ of Sitio A))ies+ =o.la!ion+ Co postela+ in a oderate and nor al speed. It was further alle)ed that the tru!9 was par9ed in a slanted anner+ its rear portion al ost in the iddle of the hi)hwa/+ and that no earl/ warnin) devi!e was displa/ed. =etitioner AaspiBas pro ptl/ applied the .ra9es and swerved to the left to avoid hittin) the tru!9 head%on+ .ut despite his efforts to avoid da a)e to propert/ and ph/si!al in>uries on the passen)ers+ the ri)ht side portion of the .us hit the !ar)o tru!94s left rear. The petitioners further alle)ed+ thus6 5. That the !ar)o tru!9 entioned in the aforeGuoted para)raph is owned and re)istered in the na e of the third%part/ defendant 0en>a in Condor and was left unattended ./ its driver Ser)io =edrano+ one of the third%part/ defendants+ at the ti e of the in!identE 3. That third%part/ defendant Ser)io =edrano+ as driver of the !ar)o tru!9 with ar9ed CsicD :Condor ;ollow 0lo!9s M General 7er!handise+< with =late 'o. G0=%3,5 whi!h was re!9lessl/ and i prudentl/ par9ed alon) the national hi)hwa/ of Co postela+ Ce.u durin) the vehi!ular a!!ident in Guestion+ and third%part/ defendant 0en>a in Condor+ as the re)istered owner of the !ar)o tru!9 who failed to e?er!ise due dili)en!e in the sele!tion and supervision of third%part/ defendant Ser)io =edrano+ are >ointl/ and severall/ lia.le to the third%part/ plaintiffs for whatever lia.ilit/ that a/ .e ad>ud)ed a)ainst said third%part/ plaintiffs or are dire!tl/ lia.le of CsicD the alle)ed death of plaintiff4s wifeE ,. That in addition to all that are stated a.ove and in the answer whi!h are intended to show re!9less i pruden!e on the part of the third%part/ defendants+ the third%part/ plaintiffs here./ de!lare that durin) the vehi!ular a!!ident in Guestion+ third%part/ defendant was !learl/ violatin) Se!tion (4+ par. C)D of the Aand Transportation and Traffi! Code #1. That the aforesaid passen)er .us+ owned and operated ./ third%part/ plaintiff Fillia Tiu+ is !overed ./ a !o on !arrier lia.ilit/ insuran!e with Certifi!ate of Cover 'o. 154241 issued ./ =hilippine =hoeni? Suret/ and Insuran!e+ In!.+ Ce.u Cit/ 0ran!h+ in favor of third%part/ plaintiff

Fillia Tiu whi!h !overs the period fro -ul/ **+ #283 to -ul/ **+ #28, and that the said insuran!e !overa)e was valid+ .indin) and su.sistin) durin) the ti e of the afore entioned in!ident CAnne? :A< as part hereofDE ##. That after the aforesaid alle)ed in!ident+ third%part/ plaintiff notified third%part/ defendant =hilippine =hoeni? Suret/ and Insuran!e+ In!.+ of the alle)ed in!ident hereto entioned+ .ut to no availE #*. That )rantin)+ et ar)uendo et ar)uendi+ if herein third%part/ plaintiffs will .e adversel/ ad>ud)ed+ the/ stand to pa/ da a)es sou)ht ./ the plaintiff and therefore !ould also loo9 up to the =hilippine =hoeni? Suret/ and Insuran!e+ In!.+ for !ontri.ution+ inde nifi!ation andJor rei .urse ent of an/ lia.ilit/ or o.li)ation that the/ i)ht ".e$ ad>ud)ed per insuran!e !overa)e dul/ entered into ./ and .etween third%part/ plaintiff Fillia Tiu and third%part/ defendant =hilippine =hoeni? Suret/ and Insuran!e+ In!.EN "#*$ The respondent ==SII+ for its part+ ad itted that it had an e?istin) !ontra!t with petitioner Tiu+ .ut averred that it had alread/ attended to and settled the !lai s of those who were in>ured durin) the in!ident."#($ It !ould not a!!ede to the !lai of respondent Arries)ado+ as su!h !lai was wa/ .e/ond the s!heduled inde nit/ as !ontained in the !ontra!t of insuran!e. "#4$ After the parties presented their respe!tive eviden!e+ the trial !ourt ruled in favor of respondent Arries)ado. The dispositive portion of the de!ision reads6 F;ERE5ORE+ in view of the fore)oin)+ >ud) ent is here./ rendered in favor of plaintiff as a)ainst defendant Fillia Tiu orderin) the latter to pa/ the plaintiff the followin) a ounts6 # % The su of 5I5TK T;OUSA'D =ESOS C=51+111.11D as oral da a)esE * % The su of 5I5TK T;OUSA'D =ESOS C=51+111.11D as e?e plar/ da a)esE ( % The su of T;IRTK%EIG;T T;OUSA'D 5OUR ;U'DRED 5ORTK%O'E =ESOS C=(8+44#.11D as a!tual da a)esE 4 % The

su of TFE'TK T;OUSA'D =ESOS C=*1+111.11D as attorne/4s feesE 5 % The su of 5I&E T;OUSA'D =ESOS C=5+111.11D as !osts of suit A!!ordin) to the trial !ourt+ there was no dispute that petitioner Fillia Tiu was en)a)ed in .usiness as a !o on !arrier+ in view of his ad ission that D4 Rou)h Rider passen)er .us whi!h fi)ured in the a!!ident was owned ./ hi E that he had .een en)a)ed in the transportation .usiness for *5 /ears with a sole proprietorshipE and that he owned (4 .uses. The trial !ourt ruled that if petitioner AaspiBas had not .een drivin) at a fast pa!e+ he !ould have easil/ swerved to the left to avoid hittin) the tru!9+ thus+ avertin) the unfortunate in!ident. It then !on!luded that petitioner AaspiBas was ne)li)ent. The trial !ourt also ruled that the a.sen!e of an earl/ warnin) devi!e near the pla!e where the tru!9 was par9ed was not suffi!ient to i pute ne)li)en!e on the part of respondent =edrano+ sin!e the tail li)hts of the tru!9 were full/ on+ and the vi!init/ was well li)hted ./ street la ps."#3$ It also found that the testi on/ of petitioner Tiu+ that he .ased the sele!tion of his driver AaspiBas on effi!ien!/ and in%servi!e trainin)+ and that the latter had .een so far an effi!ient and )ood driver for the past si? /ears of his e plo/ ent+ was insuffi!ient to prove that he o.served the dili)en!e of a )ood father of a fa il/ in the sele!tion and supervision of his e plo/ees. After the petitioner4s otion for re!onsideration of the said de!ision was denied+ the petitioners elevated the !ase to the Court of Appeals on the followin) issues6 I F;ET;ER T;IRD =ARTK DE5E'DA'T SERGIO =EDRA'O FAS RECOAESS A'D I7=RUDE'T F;E' ;E =AROED T;E CARGO TRUCO I' A' O0AILUE 7A''ERE

II F;ET;ER T;E T;IRD =ARTK DE5E'DA'TS ARE -OI'TAK A'D SE&ERAAAK AIA0AE DIRECTAK TO =AAI'TI55%A==EAAEE OR TO DE5E'DA'TS% A==EAAA'TS 5OR F;ATE&ER AIA0IAITK T;AT 7AK 0E AD-UDGED TO T;E SAID DE5E'DA'TS%

A==EAAA'TSE III F;ET;ER DE5E'DA'T%A==EAAA'T &IRGIAIO TE AAS=IPAS FAS GUIATK O5 GROSS 'EGAIGE'CEE F;ET;ER DE5E'DA'T%A==EAAA'T FIAAIA7 TIU ;AD EHERCISED T;E DUE DIAIGE'CE O5 A GOOD 5AT;ER O5 A 5A7IAK I' T;E SEAECTIO' A'D SU=ER&ISIO' O5 ;IS DRI&ERSE

I&

durin) transportation. Sin!e the latter failed to do so+ he should .e held lia.le for respondent Arries)ado4s !lai . The CA also ruled that no eviden!e was presented a)ainst the respondent ==SII+ and as su!h+ it !ould not .e held lia.le for respondent Arries)ado4s !lai + nor for !ontri.ution+ inde nifi!ation andJor rei .urse ent in !ase the petitioners were ad>ud)ed lia.le. The petitioners now !o e to this Court and as!ri.e the followin) errors !o itted ./ the appellate !ourt6 I. T;E ;O'ORA0AE COURT O5 A==EAAS ERRED I' 'OT DECAARI'G RES=O'DE'TS 0E'-A7I' CO'DOR A'D SERGIO =EDRA'O GUIATK O5 'EGAIGE'CE A'D ;E'CE+ AIA0AE TO RES=O'DE'T =EDRO A. ARRIESGADO OR TO =ETITIO'ERS 5OR F;ATE&ER AIA0IAITK T;AT 7AK 0E AD-UDGED AGAI'ST T;E7. II. T;E ;O'ORA0AE COURT O5 A==EAAS ERRED I' 5I'DI'G =ETITIO'ERS GUIATK O5 'EGAIGE'CE A'D ;E'CE+ AIA0AE TO RES=O'DE'T =EDRO A. ARRIESGADO. III. T;E ;O'ORA0AE COURT O5 A==EAAS ERRED I' 5I'DI'G =ETITIO'ER FIAAIA7 TIU AIA0AE 5OR EHE7=AARK DA7AGES+ ATTOR'EK4S 5EES A'D AITIGATIO' EH=E'SES. I&.T;E ;O'ORA0AE COURT O5 A==EAAS ERRED I' 'OT 5I'DI'G RES=O'DE'T =;IAI==I'E =;OE'IH SURETK A'D I'SURA'CE+ I'C. AIA0AE TO RES=O'DE'T =EDRO A. ARRIESGADO OR TO =ETITIO'ER FIAAIA7 TIU. "#2$ A!!ordin) to the petitioners+ the appellate !ourt erred in failin) to appre!iate the a.sen!e of an earl/ warnin) devi!e andJor .uilt%in refle!tors at the front and .a!9 of the !ar)o tru!9+ in !lear violation of Se!tion (4+ par.

& GRA'TI'G 5OR T;E SAOE O5 ARGU7E'T T;AT DE5E'DA'T%A==EAAA'T FIAAIA7 TIU IS AIA0AE TO =AAI'TI55%A==EAAEE+ F;ET;ER T;ERE IS AEGAA A'D 5ACTUAA 0ASIS I' AFARDI'G EHCESSI&E 7ORAA DA7AGES+ EH"E$7=AARK DA7AGES+ ATTOR'EK4S 5EES A'D AITIGATIO' EH=E'SES TO =AAI'TI55% A==EAAEEE &I F;ET;ER T;IRD =ARTK DE5E'DA'T =;IAI==I'E =;OE'IH SURETK A'D I'SURA'CE+ I'C. IS AIA0AE TO DE5E'DA'T% A==EAAA'T FIAAIA7 TIU."#,$

The appellate !ourt rendered >ud) ent affir in) the trial !ourt4s de!ision with the odifi!ation that the awards for oral and e?e plar/ da a)es were redu!ed to =*5+111. The dispositive portion reads6 WHEREFORE+ the appealed De!ision dated 'ove .er 3+ #225 is here./ MODIFIED su!h that the awards for oral and e?e plar/ da a)es are ea!h redu!ed to =*5+111.11 or a total of =51+111.11 for .oth. The >ud) ent is AFFIRMED in all other respe!ts. A!!ordin) to the appellate !ourt+ the a!tion of respondent Arries)ado was .ased not on Guasi%deli!t .ut on .rea!h of !ontra!t of !arria)e. As a !o on !arrier+ it was in!u .ent upon petitioner Tiu to prove that e?traordinar/ dili)en!e was o.served in ensurin) the safet/ of passen)ers

C)D of the Aand Transportation and Traffi! Code. The/ aver that su!h violation is onl/ a proof of respondent =edrano4s ne)li)en!e+ as provided under Arti!le *#85 of the 'ew Civil Code. The/ also Guestion the appellate !ourt4s failure to ta9e into a!!ount that the tru!9 was par9ed in an o.liGue anner+ its rear portion al ost at the !enter of the road. As su!h+ the pro?i ate !ause of the in!ident was the )ross re!9lessness and i pruden!e of respondent =edrano+ !reatin) the presu ption of ne)li)en!e on the part of respondent Condor in supervisin) his e plo/ees+ whi!h presu ption was not re.utted. The petitioners then !ontend that respondents Condor and =edrano should .e held >ointl/ and severall/ lia.le to respondent Arries)ado for the pa/ ent of the latter4s !lai . The petitioners+ li9ewise+ aver that e?pert eviden!e should have .een presented to prove that petitioner AaspiBas was drivin) at a ver/ fast speed+ and that the CA !ould not rea!h su!h !on!lusion ./ erel/ !onsiderin) the da a)es on the !ar)o tru!9. It was also pointed out that petitioner Tiu presented eviden!e that he had e?er!ised the dili)en!e of a )ood father of a fa il/ in the sele!tion and supervision of his drivers. The petitioners further alle)e that there is no le)al and fa!tual .asis to reGuire petitioner Tiu to pa/ e?e plar/ da a)es as no eviden!e was presented to show that the latter a!ted in a fraudulent+ re!9less and oppressive anner+ or that he had an a!tive parti!ipation in the ne)li)ent a!t of petitioner AaspiBas. 5inall/+ the petitioners !ontend that respondent ==SII ad itted in its answer that while it had attended to and settled the !lai s of the other in>ured passen)ers+ respondent Arries)ado4s !lai re ained unsettled as it was .e/ond the s!heduled inde nit/ under the insuran!e !ontra!t. The petitioners ar)ue that said respondent ==SII should have settled the said !lai in a!!ordan!e with the s!heduled inde nit/ instead of >ust den/in) the sa e. On the other hand+ respondent Arries)ado ar)ues that two of the issues raised ./ the petitioners involved Guestions of fa!t+ not reviewa.le ./ the Supre e Court6 the findin) of ne)li)en!e on the part of the petitioners and their lia.ilit/ to hi E and the award of e?e plar/ da a)es+ attorne/4s fees and liti)ation e?penses in his favor. Invo9in) the prin!iple of eGuit/

and >usti!e+ respondent Arries)ado pointed out that if there was an error to .e reviewed in the CA de!ision+ it should .e )eared towards the restoration of the oral and e?e plar/ da a)es to =51+111 ea!h+ or a total of =#11+111 whi!h was redu!ed ./ the Court of Appeals to =*5+111 ea!h+ or a total of onl/ =51+111. Respondent Arries)ado also alle)ed that respondents Condor and =edrano+ and respondent =hoeni? Suret/+ are parties with who he had no !ontra!t of !arria)e+ and had no !ause of a!tion a)ainst. It was pointed out that onl/ the petitioners needed to .e sued+ as driver and operator of the ill% fated .us+ on a!!ount of their failure to .rin) the Arries)ado Spouses to their pla!e of destination as a)reed upon in the !ontra!t of !arria)e+ usin) the ut ost dili)en!e of ver/ !autious persons with due re)ard for all !ir!u stan!es. Respondents Condor and =edrano point out that+ as !orre!tl/ ruled ./ the Court of Appeals+ the pro?i ate !ause of the unfortunate in!ident was the fast speed at whi!h petitioner AaspiBas was drivin) the .us owned ./ petitioner Tiu. A!!ordin) to the respondents+ the alle)ation that the tru!9 was not eGuipped with an earl/ warnin) devi!e !ould not in an/ wa/ have prevented the in!ident fro happenin). It was also pointed out that respondent Condor had alwa/s e?er!ised the due dili)en!e reGuired in the sele!tion and supervision of his e plo/ees+ and that he was not a part/ to the !ontra!t of !arria)e .etween the petitioners and respondent Arries)ado. Respondent ==SII+ for its part+ alle)es that !ontrar/ to the alle)ation of petitioner Tiu+ it settled all the !lai s of those in>ured in a!!ordan!e with the insuran!e !ontra!t. It further avers that it did not den/ respondent Arries)ado4s !lai + and e phasi@es that its lia.ilit/ should .e within the s!heduled li its of inde nit/ under the said !ontra!t. The respondent !on!ludes that while it is true that insuran!e !ontra!ts are !ontra!ts of inde nit/+ the easure of the insurer4s lia.ilit/ is deter ined ./ the insured4s !o plian!e with the ter s thereof. The Courts Ruling At the outset+ it ust .e stressed that this Court is not a trier of fa!ts."*1$ 5a!tual findin)s of the Court of Appeals are final and a/ not .e reviewed on appeal ./ this Court+ e?!ept when the lower !ourt and the CA arrived at diverse fa!tual findin)s."*#$ The petitioners in this

!ase assail the findin) of .oth the trial and the appellate !ourts that petitioner AaspiBas was drivin) at a ver/ fast speed .efore the .us owned ./ petitioner Tiu !ollided with respondent Condor4s stalled tru!9. This is !learl/ one of fa!t+ not reviewa.le ./ the Court in a petition for review under Rule 45. On this ground alone, the petition is destined to fail. ;owever+ !onsiderin) that novel Guestions of law are li9ewise involved+ the Court resolves to e?a ine and rule on the erits of the !ase.

throu)h fear of re!urrin) punish ent. ;e is responsi.le for su!h results as an/one i)ht foresee and for a!ts whi!h no one would have perfor ed e?!ept throu)h !ulpa.le a.andon. Otherwise+ his own person+ ri)hts and propert/+ and those of his fellow .ein)s+ would ever .e e?posed to all anner of dan)er and in>ur/."*,$ Fe a)ree with the followin) findin)s of the trial !ourt+ whi!h were affir ed ./ the CA on appeal6 A !lose stud/ and evaluation of the testi onies and the do!u entar/ proofs su. itted ./ the parties whi!h have dire!t .earin) on the issue of ne)li)en!e+ this Court as shown ./ preponderan!e of eviden!e that defendant &ir)ilio Te AaspiBas failed to o.serve e?traordinar/ dili)en!e as a driver of the !o on !arrier in this !ase. It is Guite hard to a!!ept his version of the in!ident that he did not see at a reasona.le distan!e ahead the !ar)o tru!9 that was par9ed when the Rou)h Rider "0us$ >ust !a e out of the .rid)e whi!h is on an CsicD " ore$ elevated position than the pla!e where the !ar)o tru!9 was par9ed. Fith its headli)hts full/ on+ defendant driver of the Rou)h Rider was in a vanta)e position to see the !ar)o tru!9 ahead whi!h was par9ed and he !ould >ust easil/ have avoided hittin) and .u pin) the sa e ./ aneuverin) to the left without hittin) the said !ar)o tru!9. 0esides+ it is CsicD shown that there was still u!h roo or spa!e for the Rou)h Rider to pass at the left lane of the said national hi)hwa/ even if the !ar)o tru!9 had o!!upied the entire ri)ht lane thereof. It is not true that if the Rou)h Rider would pro!eed to pass throu)h the left lane it would fall into a !anal !onsiderin) that there was u!h spa!e for it to pass without hittin) and .u pin) the !ar)o tru!9 at the left lane of said national hi)hwa/. The re!ords+ further+ showed that there was no in!o in) vehi!le at the opposite lane of the national hi)hwa/ whi!h would have prevented the Rou)h Rider fro not swervin) to its left in order to avoid hittin) and .u pin) the par9ed !ar)o tru!9. 0ut the eviden!e showed that the Rou)h Rider instead of swervin) to the still spa!ious left lane of the national hi)hwa/ plowed dire!tl/ into the par9ed !ar)o tru!9 hittin) the latter at its rear portionE and thus+ the CsicD !ausin) da a)es not onl/ to herein plaintiff .ut to the !ar)o tru!9 as well."*8$

Petitioner Laspias Was negligent in driving The Ill-fated !s In his testi on/ .efore the trial !ourt+ petitioner AaspiBas !lai ed that he was traversin) the two%lane road at Co postela+ Ce.u at a speed of onl/ fort/ C41D to fift/ C51D 9ilo eters per hour .efore the in!ident o!!urred."*($ ;e also ad itted that he sa" the tru!9 whi!h was par9ed in an :o.liGue position< at a.out *5 eters .efore i pa!t+"*4$ and tried to avoid hittin) it ./ swervin) to the left. ;owever+ even in the a.sen!e of e?pert eviden!e+ the da a)e sustained ./ the tru!9"*5$ itself supports the findin) of .oth the trial !ourt and the appellate !ourt+ that the D4 Rou)h Rider .us driven ./ petitioner AaspiBas was travelin) at a fast pa!e. Sin!e he saw the stalled tru!9 at a distan!e of *5 eters+ petitioner AaspiBas had ore than enou)h ti e to swerve to his left to avoid hittin) itE that is+ if the speed of the .us was onl/ 41 to 51 9ilo eters per hour as he !lai ed. As found ./ the Court of Appeals+ it is easier to .elieve that petitioner AaspiBas was drivin) at a ver/ fast speed+ sin!e at 4645 a. .+ the hour of the a!!ident+ there were no on!o in) vehi!les at the opposite dire!tion. =etitioner AaspiBas !ould have swerved to the left lane with proper !learan!e+ and+ thus+ !ould have avoided the tru!9."*3$ Instin!t+ at the ver/ least+ would have pro pted hi to appl/ the .rea9s to avert the i pendin) disaster whi!h he ust have foreseen when he !au)ht si)ht of the stalled tru!9. As we had o!!asion to reiterate6 A an ust use !o on sense+ and e?er!ise due refle!tion in all his a!tsE it is his dut/ to .e !autious+ !areful and prudent+ if not fro instin!t+ then

Indeed+ petitioner AaspiBas4 ne)li)en!e in drivin) the .us is apparent in the re!ords. 0/ his own ad ission+ he had >ust passed a .rid)e and was traversin) the hi)hwa/ of Co postela+ Ce.u at a speed of 41 to 51 9ilo eters per hour .efore the !ollision o!!urred. The a?i u speed allowed ./ law on a .rid)e is onl/ (1 9ilo eters per hour."*2$ And+ as !orre!tl/ pointed out ./ the trial !ourt+ petitioner AaspiBas also violated Se!tion (5 of the Aand Transportation and Traffi! Code+ Repu.li! A!t 'o. 4#(3+ as a ended6 Se!. (5. Restriction as to speed. I CaD An/ person drivin) a otor vehi!le on a hi)hwa/ shall drive the sa e at a !areful and prudent speed+ not )reater nor less than is reasona.le and proper+ havin) due re)ard for the traffi!+ the width of the hi)hwa/+ and or an/ other !ondition then and there e?istin)E and no person shall drive an# $otor vehicle !pon a high"a# at su!h speed as to endan)er the life+ li . and propert/ of an/ person+ nor at a speed greater than "ill per$it hi$ to ring the vehicle to a stop "ithin the ass!red clear distance ahead."(1$ Under Arti!le *#85 of the Civil Code+ a person drivin) a vehi!le is presu ed ne)li)ent if at the ti e of the ishap+ he was violatin) an/ traffi! re)ulation."(#$ Petitioner Ti! failed to %verco$e the pres!$ption %f negligence against hi$ as %ne engaged in the !siness %f co$$on carriage The rules whi!h !o on !arriers should o.serve as to the safet/ of their passen)ers are set forth in the Civil Code+ Arti!les #,((+"(*$ #,55"(($ and #,53."(4$ In this !ase+ respondent Arries)ado and his de!eased wife !ontra!ted with petitioner Tiu+ as owner and operator of D4 Rou)h Riders .us servi!e+ for transportation fro 7a/a+ Daan.anta/an+ Ce.u+ to Ce.u Cit/ for the pri!e of =#8.11."(5$ It is undisputed that the respondent and his wife were not safel/ transported to the destination a)reed upon. In a!tions for .rea!h of !ontra!t+ onl/ the e?isten!e of su!h !ontra!t+ and the fa!t that the o.li)or+ in this !ase the !o on !arrier+ failed to transport his passen)er safel/ to his destination are the atters that need to .e proved."(3$ This is .e!ause under the said !ontra!t of !arria)e+ the petitioners assu ed the e?press o.li)ation to transport the respondent and his wife to their destination safel/ and to o.serve e?traordinar/ dili)en!e with due re)ard for

all !ir!u stan!es."(,$ An/ in>ur/ suffered ./ the passen)ers in the !ourse thereof is i ediatel/ attri.uta.le to the ne)li)en!e of the !arrier."(8$ Upon the happenin) of the a!!ident+ the presu ption of ne)li)en!e at on!e arises+ and it .e!o es the dut/ of a !o on !arrier to prove that he o.served e?traordinar/ dili)en!e in the !are of his passen)ers."(2$ It ust .e stressed that in reGuirin) the hi)hest possi.le de)ree of dili)en!e fro !o on !arriers and in !reatin) a presu ption of ne)li)en!e a)ainst the + the law !o pels the to !ur. the re!9lessness of their drivers."41$ Fhile eviden!e a/ .e su. itted to over!o e su!h presu ption of ne)li)en!e+ it ust .e shown that the !arrier o.served the reGuired e?traordinar/ dili)en!e+ whi!h eans that the !arrier ust show the ut ost dili)en!e of ver/ !autious persons as far as hu an !are and foresi)ht !an provide+ or that the a!!ident was !aused ./ fortuitous event."4#$ As !orre!tl/ found ./ the trial !ourt+ petitioner Tiu failed to !on!lusivel/ re.ut su!h presu ption. The ne)li)en!e of petitioner AaspiBas as driver of the passen)er .us is+ thus+ .indin) a)ainst petitioner Tiu+ as the owner of the passen)er .us en)a)ed as a !o on !arrier."4*$ The Doctrine of Last &lear &hance Is Inapplica le in the &ase at 'ar Contrar/ to the petitioner4s !ontention+ the prin!iple of last !lear !han!e is inappli!a.le in the instant !ase+ as it onl/ applies in a suit .etween the owners and drivers of two !ollidin) vehi!les. It does not arise "here a passenger de$ands responsi ilit# fro$ the carrier to enforce its contract!al o ligations+ for it would .e ineGuita.le to e?e pt the ne)li)ent driver and its owner on the )round that the other driver was li9ewise )uilt/ of ne)li)en!e."4($ The !o on law notion of last !lear !han!e per itted !ourts to )rant re!over/ to a plaintiff who has also .een ne)li)ent provided that the defendant had the last !lear !han!e to avoid the !asualt/ and failed to do so. A!!ordin)l/+ it is diffi!ult to see what role+ if an/+ the !o on law of last !lear !han!e do!trine has to pla/ in a >urisdi!tion where the !o on law !on!ept of !ontri.utor/ ne)li)en!e as an a.solute .ar to re!over/ ./ the plaintiff+ has itself .een re>e!ted+ as it has .een in Arti!le *#,2 of the Civil Code."44$

Thus+ petitioner Tiu !annot es!ape lia.ilit/ for the death of respondent Arries)ado4s wife due to the ne)li)en!e of petitioner AaspiBas+ his e plo/ee+ on this s!ore. Respondents Pedrano and &ondor "ere li(e"ise )egligent In Phoeni* &onstr!ction+ Inc, v, Inter$ediate Appellate &o!rt +"45$ where therein respondent Dionisio sustained in>uries when his vehi!le ra ed a)ainst a du p tru!9 par9ed as9ew+ the Court ruled that the i proper par9in) of a du p tru!9 without an/ warnin) li)hts or refle!tor devi!es !reated an unreasona.le ris9 for an/one drivin) within the vi!init/+ and for havin) !reated su!h ris9+ the tru!9 driver ust .e held responsi.le. In rulin) a)ainst the petitioner therein+ the Court elu!idated+ thus6 N In our view+ Dionisio4s ne)li)en!e+ althou)h later in point of ti e than the tru!9 driver4s ne)li)en!e+ and therefore !loser to the a!!ident+ was not an effi!ient intervenin) or independent !ause. Fhat the petitioners des!ri.e as an :intervenin) !ause< was no ore than a foreseea.le !onseGuen!e of the ris9 !reated ./ the ne)li)ent anner in whi!h the tru!9 driver had par9ed the du p tru!9. In other words+ the petitioner tru!9 driver owed a dut/ to private respondent Dionisio and others si ilarl/ situated not to i pose upon the the ver/ ris9 the tru!9 driver had !reated. Dionisio4s ne)li)en!e was not that of an independent and overpowerin) nature as to !ut+ as it were+ the !hain of !ausation in fa!t .etween the i proper par9in) of the du p tru!9 and the a!!ident+ nor to sever the -!ris vinc!l!$ of lia.ilit/. Fe hold that private respondent Dionisio4s ne)li)en!e was :onl/ !ontri.utor/+< that the :i ediate and pro?i ate !ause< of the in>ur/ re ained the tru!9 driver4s :la!9 of due !are.<N"43$ In this !ase+ .oth the trial and the appellate !ourts failed to !onsider that respondent =edrano was also ne)li)ent in leavin) the tru!9 par9ed as9ew without an/ warnin) li)hts or refle!tor devi!es to alert on!o in) vehi!les+ and that su!h failure !reated the presu ption of ne)li)en!e on the

part of his e plo/er+ respondent Condor+ in supervisin) his e plo/ees properl/ and adeGuatel/. As we ruled in Po lete v, Fa ros6"4,$ It is su!h a fir l/ esta.lished prin!iple+ as to have virtuall/ for ed part of the law itself+ that the ne)li)en!e of the e plo/ee )ives rise to the presu ption of ne)li)en!e on the part of the e plo/er. This is the presu ed ne)li)en!e in the sele!tion and supervision of e plo/ee. The theor/ of presu ed ne)li)en!e+ in !ontrast with the A eri!an do!trine of respondeat s!perior+ where the ne)li)en!e of the e plo/ee is concl!sivel# presu ed to .e the ne)li)en!e of the e plo/er+ is !learl/ dedu!i.le fro the last para)raph of Arti!le *#81 of the Civil Code whi!h provides that the responsi.ilit/ therein entioned shall !ease if the e plo/ers prove that the/ o.served all the dili)en!e of a )ood father of a fa il/ to prevent da a)es. N"48$ The petitioners were !orre!t in invo9in) respondent =edrano4s failure to o.serve Arti!le I&+ Se!tion (4C)D of the Rep. A!t 'o. 4#(3+ whi!h provides6 C)D Lights "hen par(ed or disa led, . Appropriate par9in) li)hts or flares visi le one h!ndred $eters a"a# shall .e displa/ed at a !orner of the vehi!le whenever su!h vehi!le is par9ed on hi)hwa/s or in pla!es that are not well%li)hted or is pla!ed in su!h anner as to endan)er passin) traffi!. The anner in whi!h the tru!9 was par9ed !learl/ endan)ered on!o in) traffi! on .oth sides+ !onsiderin) that the tire .lowout whi!h stalled the tru!9 in the first pla!e o!!urred in the wee hours of the ornin). The Court !an onl/ now sur ise that the unfortunate in!ident !ould have .een averted had respondent Condor+ the owner of the tru!9+ eGuipped the said vehi!le with li)hts+ flares+ or+ at the ver/ least+ an earl/ warnin) devi!e. "42$ ;en!e+ we !annot su.s!ri.e to respondents Condor and =edrano4s !lai that the/ should .e a.solved fro lia.ilit/ .e!ause+ as found ./ the trial and appellate !ourts+ the pro?i ate !ause of the !ollision was the fast speed at whi!h petitioner AaspiBas drove the .us. To a!!ept this proposition would .e to !o e too !lose to wipin) out the funda ental prin!iple of law that a an ust respond for the foreseea.le !onseGuen!es of his own ne)li)ent a!t or o ission. Indeed+ our law on Guasi%deli!ts see9s to redu!e

the ris9s and .urdens of livin) in so!iet/ and to allo!ate the a on) its e .ers. To a!!ept this proposition would .e to wea9en the ver/ .onds of so!iet/."51$ The Lia ilit# of Respondent PPSII as Ins!rer The trial !ourt in this !ase did not rule on the lia.ilit/ of respondent ==SII+ while the appellate !ourt ruled that+ as no eviden!e was presented a)ainst it+ the insuran!e !o pan/ is not lia.le. A perusal of the re!ords will show that when the petitioners filed the Third%=art/ Co plaint a)ainst respondent ==SII+ the/ failed to atta!h a !op/ of the ter s of the insuran!e !ontra!t itself. Onl/ Certifi!ate of Cover 'o. 154241"5#$ issued in favor of :7r. Fillia Tiu+ Aahu)+ Ce.u Cit/< si)ned ./ Cos e ;. 0oniel was appended to the third%part/ !o plaint. The date of issuan!e+ -ul/ **+ #283+ the period of insuran!e+ fro -ul/ **+ #283 to -ul/ **+ #28,+ as well as the followin) ite s+ were also indi!ated therein6 SC;EDUAED &E;ICAE 7ODEA 7AOE Isu@u 5orward =AATE 'O. =0=%,*4 SERIAAJC;ASSIS 'O. SER451% #584#*4 In its Answer5( to the Third%=art/ Co plaint+ the respondent ==SII ad itted the e?isten!e of the !ontra!t of insuran!e+ in view of its failure to spe!ifi!all/ den/ the sa e as reGuired under then Se!tion 8CaD+ Rule 8 of the Rules of Court+54 whi!h reads6 Se!. 8. /o" to contest gen!ineness of s!ch doc!$ents, Fhen an a!tion or defense is founded upon a written instru ent !opied in or atta!hed to the !orrespondin) pleadin) as provided in the pre!edin) se!tion+ the )enuineness and due e?e!ution of the instru ent shall .e dee ed ad itted unless the adverse part/+ under oath+ spe!ifi!all/ denies the + and sets forth what he !lai s to .e the fa!tsE .ut the reGuire ent of an oath does not appl/ when the adverse part/ does not appear to .e a part/ to the instru ent or when !o plian!e with an order for inspe!tion of the ori)inal instru ent is refused.

In fa!t+ respondent ==SII did not dispute the e?isten!e of su!h !ontra!t+ and ad itted that it was lia.le thereon. It !lai ed+ however+ that it had attended to and settled the !lai s of those in>ured durin) the in!ident+ and set up the followin) as spe!ial affir ative defenses6 TK=E O5 0ODK Third part/ defendant =hilippine =hoeni? Suret/ and Insuran!e+ In!. here./ reiterates and in!orporates ./ wa/ of referen!e the pre!edin) para)raphs 0us and further states T;AT6% 7OTOR 'O. 8. 3,,8(3 It has attended to the !lai s of &in!ent Canales+ Asun!ion 0atian!ila and 'eptali =al!es who sustained in>uries durin) the in!ident in Guestion. In fa!t+ it settled finan!iall/ their !lai s per vou!hers dul/ si)ned ./ the and the/ dul/ e?e!uted Affidavit"s$ of Desistan!e to that effe!t+ ?ero? !opies of QAI7ITS O5 AIA0IAITK =51+111.11 whi!h are hereto atta!hed as Anne?es #+ *+ (+ 4+ 5+ and 3 respe!tivel/E 2. Fith respe!t to the !lai of plaintiff+ herein answerin) third part/ defendant throu)h its authori@ed insuran!e ad>uster attended to said !lai . =er =erson =#*+111.11 In fa!t+ there were ne)otiations to that effe!t. Onl/ that it !annot a!!ede to

SECTIO' #J## A. T;IRD =ARTK AIA0IAITK 0. =ASSE'GER AIA0IAITK

the de and of said !lai ant !onsiderin) that the !lai was wa/ .e/ond the s!heduled inde nit/ as per !ontra!t entered into with third part/ plaintiff Fillia Tiu and third part/ defendant C=hilippine =hoeni? Suret/ and Insuran!e+ In!.D. Third part/ =laintiff Fillia Tiu 9new all alon) the li itation as earlier stated+ he .ein) an old hand in the transportation .usinessE 55N Considerin) the ad issions ade ./ respondent ==SII+ the e?isten!e of the insuran!e !ontra!t and the salient ter s thereof !annot .e dispat!hed. It ust .e noted that after filin) its answer+ respondent ==SII no lon)er o.>e!ted to the presentation of eviden!e ./ respondent Arries)ado and the insured petitioner Tiu. Even in its 7e orandu 53 .efore the Court+ respondent ==SII ad itted the e?isten!e of the !ontra!t+ .ut averred as follows6 =etitioner Tiu is insistin) that ==SII is lia.le to hi for !ontri.ution+ inde nifi!ation andJor rei .urse ent. This has no .asis under the !ontra!t. Under the !ontra!t+ ==SII will pa/ all su s ne!essar/ to dis!har)e lia.ilit/ of the insured su.>e!t to the li its of lia.ilit/ .ut not to e?!eed the li its of lia.ilit/ as so stated in the !ontra!t. Also+ it is stated in the !ontra!t that in the event of a!!ident involvin) inde nit/ to ore than one person+ the li its of lia.ilit/ shall not e?!eed the a))re)ate a ount so spe!ified ./ law to all persons to .e inde nified.5, As !an .e )leaned fro the Certifi!ate of Cover+ su!h insuran!e !ontra!t was issued pursuant to the Co pulsor/ 7otor &ehi!le Aia.ilit/ Insuran!e Aaw. It was e?pressl/ provided therein that the li it of the insurer4s lia.ilit/ for ea!h person was =#*+111+ while the li it per a!!ident was pe))ed at =51+111. An insurer in an inde nit/ !ontra!t for third part/ lia.ilit/ is dire!tl/ lia.le to the in>ured part/ up to the e?tent spe!ified in the a)ree ent .ut it !annot .e held solidaril/ lia.le .e/ond that a ount.58 The respondent ==SII !ould not then >ust den/ petitioner Tiu4s !lai E it should have paid =#*+111 for the death of 5elisa Arries)ado+52 and respondent Arries)ado4s hospitali@ation e?penses of =#+##(.81+ whi!h the trial !ourt found to have .een dul/ supported ./ re!eipts. The total a ount of the !lai s+ even when added to that of the other in>ured passen)ers whi!h the

respondent ==SII !lai ed to have settled+31 would not e?!eed the =51+111 li it under the insuran!e a)ree ent. Indeed+ the nature of Co pulsor/ 7otor &ehi!le Aia.ilit/ Insuran!e is su!h that it is pri aril/ intended to provide !o pensation for the death or .odil/ in>uries suffered ./ inno!ent third parties or passen)ers as a result of the ne)li)ent operation and use of otor vehi!les. The vi!ti s andJor their dependents are assured of i ediate finan!ial assistan!e+ re)ardless of the finan!ial !apa!it/ of otor vehi!le owners.3# As the Court+ spea9in) throu)h Asso!iate -usti!e Aeonardo A. Luisu .in)+ e?plained in 0overn$ent Service Ins!rance S#ste$ v, &o!rt of Appeals63* ;owever+ althou)h the vi!ti a/ pro!eed dire!tl/ a)ainst the insurer for inde nit/+ the third part/ lia.ilit/ is onl/ up to the e?tent of the insuran!e poli!/ and those reGuired ./ law. Fhile it is true that where the insuran!e !ontra!t provides for inde nit/ a)ainst lia.ilit/ to third persons+ and su!h persons !an dire!tl/ sue the insurer+ the dire!t lia.ilit/ of the insurer under inde nit/ !ontra!ts a)ainst third part/ lia.ilit/ does not ean that the insurer !an .e held lia.le in solid!$ with the insured andJor the other parties found at fault. 5or the lia.ilit/ of the insurer is .ased on !ontra!tE that of the insured !arrier or vehi!le owner is .ased on tort. N O.viousl/+ the insurer !ould .e held lia.le onl/ up to the e?tent of what was provided for ./ the !ontra!t of insuran!e+ in a!!ordan!e with the C7&AI law. At the ti e of the in!ident+ the s!hedule of inde nities for death and .odil/ in>uries+ professional fees and other !har)es pa/a.le under a C7&AI !overa)e was provided for under the Insuran!e 7e orandu Cir!ular CI7CD 'o. 5%,8 whi!h was approved on 'ove .er #1+ #2,8. As therein provided+ the a?i u inde nit/ for death was twelve thousand C=#*+111.11D pesos per vi!ti . The s!hedules for edi!al e?penses were also provided ./ said I7C+ spe!ifi!all/ in para)raphs CCD to CGD.3( Da$ages to e A"arded The trial !ourt !orre!tl/ awarded oral da a)es in the a ount of =51+111 in favor of respondent Arries)ado. The award of e?e plar/ da a)es ./ wa/ of e?a ple or !orre!tion of the pu.li! )ood+34 is li9ewise in order. As the Court ratio!inated in 1apalaran '!s Line v, &oronado635

NFhile the i ediate .enefi!iaries of the standard of e?traordinar/ dili)en!e are+ of !ourse+ the passen)ers and owners of !ar)o !arried ./ a !o on !arrier+ the/ are not the onl/ persons that the law see9s to .enefit. 5or if !o on !arriers !arefull/ o.served the statutor/ standard of e?traordinar/ dili)en!e in respe!t of their own passen)ers+ the/ !annot help .ut si ultaneousl/ .enefit pedestrians and the passen)ers of other vehi!les who are eGuall/ entitled to the safe and !onvenient use of our roads and hi)hwa/s. The law see9s to stop and prevent the slau)hter and ai in) of people Cwhether passen)ers or notD on our hi)hwa/s and .uses+ the ver/ si@e and power of whi!h see to infla e the inds of their drivers. Arti!le **(# of the Civil Code e?pli!itl/ authori@es the i position of e?e plar/ da a)es in !ases of Guasi%deli!ts :if the defendant a!ted with )ross ne)li)en!e.<N33 The respondent =edro A. Arries)ado+ as the survivin) spouse and heir of 5elisa Arries)ado+ is entitled to inde nit/ in the a ount of =51+111.11.3, The petitioners+ as well as the respondents 0en>a in Condor and Ser)io =edrano are >ointl/ and severall/ lia.le for said a ount+ !onfor a.l/ with the followin) pronoun!e ent of the Court in Fa re+ 2r, vs, &o!rt of Appeals638 The sa e rule of lia.ilit/ was applied in situations where the ne)li)en!e of the driver of the .us on whi!h plaintiff was ridin) !on!urred with the ne)li)en!e of a third part/ who was the driver of another vehi!le+ thus !ausin) an a!!ident. In An!ran v, '!o+ 'atangas Lag!na Ta#a as '!s &o, v, Inter$ediate Appellate &o!rt+ and Metro Manila Transit &orporation v, &o!rt of Appeals+ the .us !o pan/+ its driver+ the operator of the other vehi!le and the driver of the vehi!le were >ointl/ and severall/ held lia.le to the in>ured passen)er or the latter4s heirs. The .asis of this allo!ation of lia.ilit/ was e?plained in 3il!an v, &o!rt of Appeals+ thus6 :'or should it a9e differen!e that the lia.ilit/ of petitioner ".us owner$ sprin)s fro !ontra!t while that of respondents "owner and driver of other vehi!le$ arises fro Guasi%deli!t. As earl/ as #2#(+ we alread/ ruled in Gutierre@ vs. Gutierre@+ 53 =hil. #,,+ that in !ase of in>ur/ to a passen)er

due to the ne)li)en!e of the driver of the .us on whi!h he was ridin) and of the driver of another vehi!le+ the drivers as well as the owners of the two vehi!les are >ointl/ and severall/ lia.le for da a)es. So e e .ers of the Court+ thou)h+ are of the view that under the !ir!u stan!es the/ are lia.le on Guasi%deli!t.<32 IN LIGHT OF ALL THE FOREGOING, the petition is =ARTIAAAK GRA'TED. The De!ision of the Court of Appeals is A55IR7ED with 7ODI5ICATIO'S6 C#D Respondent =hilippine =hoeni? Suret/ and Insuran!e+ In!. and petitioner Fillia Tiu are OR ERE to pa/+ >ointl/ and severall/+ respondent =edro A. Arries)ado the total a ount of =#(+##(.81E C*D The petitioners and the respondents 0en>a in Condor and Ser)io =edrano are OR ERE to pa/+ >ointl/ and severall/+ respondent =edro A. Arries)ado =51+111.11 as inde nit/E =*3+44#.51 as a!tual da a)esE =51+111.11 as oral da a)esE =51+111.11 as e?e plar/ da a)esE and =*1+111.11 as attorne/4s fees.

=ERAA CO7=A'GA de SEGUROS vs. A'C;ETA The instant petition for !ertiorari and prohi.ition with preli inar/ in>un!tion !on!erns the a.ilit/ of insurers under the Rno fault inde nit/R provision of the Insuran!e Code. ! On De!e .er *,+ #2,,+ in a !ollision .etween the I; S!out in whi!h private respondents were ridin) and a Superlines .us alon) the national hi)hwa/ in Sta. Elena+ Ca arines 'orte+ private respondents sustained ph/si!s in>uries in var/in) de)rees of )ravit/. Thus+ the/ filed with the Court of 5irst Instan!e of Ca arines 'orte on 5e.ruar/ *(+#2,8 a !o plaint for da a)es a)ainst Superlines+ the .us driver and petitioner+ the insurer of the .us "Rollo+ pp. *,%(2.$ The .us was insured with petitioner for the a ount of =51+111.11 as and for passen)er lia.ilit/ and =51+111.11 as and for third part/ lia.ilit/. The vehi!le in whi!h private respondents were ridin) was insured with 7ala/an Insuran!e Co. Even .efore su ons !ould .e served+ respondent >ud)e issued an order dated 7ar!h #+ #2,8 "Rollo+ pp. 41%4#$+ the pertinent portion of whi!h stated6 The se!ond in!ident is the pra/er for an order of this !ourt for the Insuran!e Co pan/+ =erla Co pania de Se)uros+ In!.+ to pa/ i ediatel/ the =5+111.11 under the Rno fault !lauseR as provided for under Se!tion (,8 of the Insuran!e Code+ and findin) that the reGuisite do!u ents to .e atta!hed in the re!ord+ the said Insuran!e Co pan/ is therefore dire!ted to pa/ the plaintiffs Cprivate respondents hereinD within five C5D da/s fro re!eipt of this order. =etitioner denied in its Answer its alle)ed lia.ilit/ under the Rno fault inde nit/R provision "Rollo+ p. 44$ and li9ewise oved for the re!onsideration of the order. =etitioner held the position that under Se!. (,8 of the Insuran!e Code+ the insurer lia.le to pa/ the =5+111.11 is the insurer of the vehi!le in whi!h private respondents were ridin)+ not petitioner+ as the provision states that R"i$n the !ase of an o!!upant of a vehi!le+ !lai shall lie a)ainst the insurer of the vehi!le in whi!h the o!!upant is ridin)+

ountin) or dis ountin) fro .R Respondent >ud)e+ however+ denied re!onsideration. A se!ond otion for re!onsideration was filed ./ petitioner. ;owever+ in an order dated -anuar/ (+ #2,2+ respondent >ud)e denied the se!ond otion for re!onsideration and ordered the issuan!e of a writ of e?e!ution "Rollo+ p. 32.$ ;en!e+ the instant petition pra/in) prin!ipall/ for the annul ent and settin) aside of respondent >ud)eSs orders dated 7ar!h #+ #2,8 and -anuar/ (+ #2,2. The Court issued a te porar/ restrainin) order on -anuar/ *4+#2,2 "Rollo pp. ,(%,4.$ The sole issue raised in this petition is whether or not petitioner is the insurer lia.le to inde nif/ private respondents under Se!. (,8 of the Insuran!e Code. The 9e/ to the resolution of the issue is of !ourts e Se!. (,8+ whi!h provides6 Se!. (,8. An/ !lai for death or in>ur/ to an/ passen)er or third part/ pursuant to the provision of this !hapter shall .e paid without the ne!essit/ of provin) fault or ne)li)en!e of an/ 9ind. =rovided+ That for purposes of this se!tion T CiD The inde nit/ in respe!t of an/ one person shall not e?!eed five thousand pesosE CiiD The followin) proofs of loss+ when su. itted under oath+ shall .e suffi!ient eviden!e to su.stantiate the !lai 6 CaD =oli!e report of a!!ident+ and C.D Death !ertifi!ate and eviden!e suffi!ient to esta.lish the proper pa/ee+ or C!D 7edi!al report and eviden!e of respe!t of whi!h refund is !lai edE edi!al or hospital dis.urse ent in

CiiiD &lai$ $a# e $ade against one $otor vehicle onl#, In the case of an occ!pant of a vehicle+ clai$ shall lie against the ins!rer of the vehicle in "hich the occ!pant is riding+ $o!nting or dis$o!nting fro$, In an# other case+ clai$ shall lie against the ins!rer of the directl# offending vehicle, In all cases+ the right of the part# pa#ing the clai$ to recover against the o"ner of the vehicle responsi le for the accident shall e $aintained . "E phasis supplied.$ 5ro a readin) of the provision+ whi!h is !ou!hed in strai)ht%forward and una .i)uous lan)ua)e+ the followin) rules on !lai s under the Rno fault inde nit/R provision+ where proof of fault or ne)li)en!e is not ne!essar/ for pa/ ent of an/ !lai for death Or in>ur/ to a passen)er or a third part/+ are esta.lished6 #. A !lai a/ .e ade a)ainst one otor vehi!le onl/.

a!!ident. This is pre!isel/ the essen!e of Rno fault inde nit/R insuran!e whi!h was introdu!ed to and ade part of our laws in order to provide vi!ti s of vehi!ular a!!idents or their heirs i ediate !o pensation+ althou)h in a li ited a ount+ pendin) final deter ination of who is responsi.le for the a!!ident and lia.le for the vi!ti sSin>uries or death. In turn+ the Rno fault inde nit/R provision is part and par!el of the Insuran!e Code provisions on !o pulsor/ otor vehi!le a.ilit/ insuran!e "Se!. (,(% (82$ and should .e read to)ether with the reGuire ent for !o pulsor/ passen)er andJor third part/ lia.ilit/ insuran!e "Se!. (,,$ whi!h was andated in order to ensure read/ !o pensation for vi!ti s of vehi!ular a!!idents. Irrespe!tive of whether or not fault or ne)li)en!e lies with the driver of the Superlines .us+ as private respondents were not o!!upants of the .us+ the/ !annot !lai the Rno fault inde nit/R provided in Se!. (,8 fro petitioner. The !lai should .e ade a)ainst the insurer of the vehi!le the/ were ridin). This is ver/ !lear fro the law. Undou.tedl/+ in orderin) petitioner to pa/ private respondents the Sno fault inde nit/+S respondent >ud)e )ravel/ a.used his dis!retion in a anner that a ounts to la!9 of >urisdi!tion. The issuan!e of the !orre!tive writ of !ertiorari is therefore warranted. F;ERE5ORE+ the petition is GRA'TED and respondent >ud)eSs order dated 7ar!h #+ #2,8+ reGuirin) petitioner to pa/ private respondents the a ount of =5+111.11 as Rno fault inde nit/S under Se!. (,8 of the Insuran!e Code+ and that of -anuar/ (+ #2,2+ den/in) the se!ond otion for re!onsideration and issuin) a writ of e?e!ution+ are A''UAAED and SET ASIDE. The te porar/ restrainin) order issued ./ the Court on -anuar/ *4+ #2,2 is ade per anent. (. &da. De 7a)lana vs. Consola!ion 31513 The nature of the lia.ilit/ of an insurer sued to)ether with the insuredJoperator%owner of a !o on !arrier whi!h fi)ured in an a!!ident !ausin) the death of a third person is sou)ht to .e defined in this petition for certiorari.

*. If the vi!ti is an o!!upant of a vehi!le+ the !lai shall lie a)ainst the insurer of the vehi!le. in whi!h he is ridin)+ ountin) or dis ountin) fro . (. In an/ other !ase Ci.e. if the vi!ti is not an o!!upant of a vehi!leD+ the !lai shall lie a)ainst the insurer of the dire!tl/ offendin) vehi!le. 4. In all !ases+ the ri)ht of the part/ pa/in) the !lai to re!over a)ainst the owner of the vehi!le responsi.le for the a!!ident shall .e aintained. The law is ver/ !lear T the !lai shall lie a)ainst the insurer of the vehi!le in whi!h the Ro!!upantR !! is ridin)+ and no other. The !lai ant is not free to !hoose fro whi!h insurer he will !lai the Rno fault inde nit/+R as the law+ ./ usin) the word Rshall+ a9es it andator/ that the !lai .e ade a)ainst the insurer of the vehi!le in whi!h the o!!upant is ridin)+ ountin) or dis ountin) fro . That said vehi!le i)ht not .e the one that !aused the a!!ident is of no o ent sin!e the law itself provides that the part/ pa/in) the !lai under Se!. (,8 a/ re!over a)ainst the owner of the vehi!le responsi.le for the

The fa!ts as found ./ the trial !ourt are as follows6 . . . Aope 7a)lana was an e plo/ee of the 0ureau of Custo s whose wor9 station was at Aasa+ here in Davao Cit/. On De!e .er *1+ #2,8+ earl/ ornin)+ Aope 7a)lana was on his wa/ to his wor9 station+ drivin) a otor!/!le owned ./ the 0ureau of Custo s. At O . ,+ Aanan)+ he et an a!!ident that resulted in his death. ;e died on the spot. The =U- >eep that .u ped the de!eased was driven ./ =epito Into+ operated and owned ./ defendant Destra>o. 5ro the investi)ation !ondu!ted ./ the traffi! investi)ator+ the =U- >eep was overta9in) another passen)er >eep that was )oin) towards the !it/ po.la!ion. Fhile overta9in)+ the =U- >eep of defendant Destra>o runnin) a.reast with the overta9en >eep+ .u ped the otor!/!le driven ./ the de!eased who was )oin) towards the dire!tion of Aasa+ Davao Cit/. The point of i pa!t was on the lane of the otor!/!le and the de!eased was thrown fro the road and et his unti el/ death. " ConseGuentl/+ the heirs of Aope 7a)lana+ Sr.+ here petitioners+ filed an a!tion for da a)es and attorne/Ss fees a)ainst operator =atri!io Destra>o and the Afis!o Insuran!e Corporation CA5ISCO for .revit/D .efore the then Court of 5irst Instan!e of Davao+ 0ran!h II. An infor ation for ho i!ide thru re!9less i pruden!e was also filed a)ainst =epito Into. Durin) the penden!/ of the !ivil !ase+ Into was senten!ed to suffer an indeter inate penalt/ of one C#D /ear+ ei)ht C8D onths and one C#D da/ of prision correccional+ as ini u + to four C4D /ears+ nine C2D onths and eleven C##D da/s of prision correccional+ as a?i u + with all the a!!essor/ penalties provided ./ law+ and to inde nif/ the heirs of Aope 7a)lana+ Sr. in the a ount of twelve thousand pesos C=#*+111.11D with su.sidiar/ i prison ent in !ase of insolven!/+ plus five thousand pesos C=5+111.11D in the !on!ept of oral and e?e plar/ da a)es with !osts. 'o appeal was interposed ./ a!!used who later applied for pro.ation. # On De!e .er #4+ #28#+ the lower !ourt rendered a de!ision findin) that Destra>o had not e?er!ised suffi!ient dili)en!e as the operator of the >eepne/. The dispositive portion of the de!ision reads6

F;ERE5ORE+ the Court finds >ud) ent in favor of the plaintiffs a)ainst defendant Destra>o+ orderin) hi to pa/ plaintiffs the su of =*8+111.11 for loss of in!o eE to pa/ plaintiffs the su of =#*+111.11 whi!h a ount shall .e dedu!ted in the event >ud) ent in Cri inal Case 'o. (5*,%D a)ainst the driver+ a!!used Into+ shall have .een enfor!edE to pa/ plaintiffs the su of =5+21#.,1 representin) funeral and .urial e?penses of the de!easedE to pa/ plaintiffs the su of =5+111.11 as oral da a)es whi!h shall .e dedu!ted in the event >ud) ent CsicD in Cri inal Case 'o. (5*,%D a)ainst the driver+ a!!used IntoE to pa/ plaintiffs the su of =(+111.11 as attorne/Ss fees and to pa/ the !osts of suit. The defendant insuran!e !o pan/ is ordered to rei .urse defendant Destra>o whatever a ounts the latter shall have paid onl/ up to the e?tent of its insuran!e !overa)e. SO ORDERED. $ =etitioners filed a otion for the re!onsideration of the se!ond para)raph of the dispositive portion of the de!ision !ontendin) that A5ISCO should not erel/ .e held se!ondaril/ lia.le .e!ause the Insuran!e Code provides that the insurerSs lia.ilit/ is Rdire!t and pri ar/ andJor >ointl/ and severall/ with the operator of the vehi!le+ althou)h onl/ up to the e?tent of the insuran!e !overa)e.R % ;en!e+ the/ ar)ued that the =*1+111.11 !overa)e of the insuran!e poli!/ issued ./ A5ISCO+ should have .een awarded in their favor. In its !o ent on the otion for re!onsideration+ A5ISCO ar)ued that sin!e the Insuran!e Code does not e?pressl/ provide for a solidar/ o.li)ation+ the presu ption is that the o.li)ation is >oint. In its Order of 5e.ruar/ 2+ #28*+ the lower !ourt denied the otion for re!onsideration rulin) that sin!e the insuran!e !ontra!t Ris in the nature of suret/ship+ then the lia.ilit/ of the insurer is se!ondar/ onl/ up to the e?tent of the insuran!e !overa)e.R & =etitioners filed a se!ond otion for re!onsideration reiteratin) that the

lia.ilit/ of the insurer is dire!t+ pri ar/ and solidar/ with the >eepne/ operator .e!ause the petitioners .e!a e dire!t .enefi!iaries under the provision of the poli!/ whi!h+ in effe!t+ is a stipulation po!r a!tr!i. ' This otion was li9ewise denied for la!9 of erit. ;en!e+ petitioners filed the instant petition for certiorari whi!h+ althou)h it does not see9 the reversal of the lower !ourtSs de!ision in its entiret/+ pra/s for the settin) aside or odifi!ation of the se!ond para)raph of the dispositive portion of said de!ision. =etitioners reassert their position that the insuran!e !o pan/ is dire!tl/ and solidaril/ lia.le with the ne)li)ent operator up to the e?tent of its insuran!e !overa)e. Fe )rant the petition. The parti!ular provision of the insuran!e poli!/ on whi!h petitioners .ase their !lai is as follows6 Se!. # T AIA0IAITK TO T;E =U0AIC #. The Co pan/ will+ su.>e!t to the Ai its of Aia.ilit/+ pa/ all su s ne!essar/ to dis!har)e lia.ilit/ of the insured in respe!t of CaD death of or .odil/ in>ur/ to an/ T;IRD =ARTK (. In the event of the death of an/ person entitled to inde nit/ under this =oli!/+ the Co pan/ will+ in respe!t of the lia.ilit/ in!urred to su!h person inde nif/ his personal representatives in ter s of+ and su.>e!t to the ter s and !onditions hereof. ( The a.ove%Guoted provision leads to no other !on!lusion .ut that A5ISCO !an .e held dire!tl/ lia.le ./ petitioners. As this Court ruled in Shafer vs, 2!dge+ RT& of %longapo &it#+ 'r, 45 + R"w$here an insuran!e poli!/ insures dire!tl/ a)ainst lia.ilit/+ the insurerSs lia.ilit/ a!!rues i ediatel/ upon the o!!urren!e of the in>ur/ or even upon whi!h the lia.ilit/ depends+ and does not depend on the re!over/ of >ud) ent ./ the in>ured part/ a)ainst the

insured.R ) The underl/in) reason .ehind the third part/ lia.ilit/ CT=AD of the Co pulsor/ 7otor &ehi!le Aia.ilit/ Insuran!e is Rto prote!t in>ured persons a)ainst the insolven!/ of the insured who !auses su!h in>ur/+ and to )ive su!h in>ured person a !ertain .enefi!ial interest in the pro!eeds of the poli!/ . . .R * Sin!e petitioners had re!eived fro A5ISCO the su of =5+111.11 under the no%fault !lause+ A5ISCOSs lia.ilit/ is now li ited to =#5+111.11. ;owever+ we !annot a)ree that A5ISCO is li9ewise solidaril/ lia.le with Destra>o. In Mala#an Ins!rance &o,+ Inc, v, &o!rt of Appeals+ "+ this Court had the opportunit/ to resolve the issue as to the nature of the lia.ilit/ of the insurer and the insured vis-a-vis the third part/ in>ured in an a!!ident. Fe !ate)ori!all/ ruled thus6 Fhile it is true that where the insuran!e !ontra!t provides for inde nit/ a)ainst lia.ilit/ to third persons+ su!h third persons !an dire!tl/ sue the insurer+ however+ the direct lia ilit# of the ins!rer !nder inde$nit# contracts against third part# lia ilit# does not $ean that the ins!rer can e held solidaril# lia le "ith the ins!red and6or the other parties fo!nd at fa!lt. The lia ilit# of the ins!rer is ased on contract7 that of the ins!red is ased on tort. In the !ase at .ar+ petitioner as insurer of Sio Cho/+ is lia.le to respondent &alle>os Cthe in>ured third part/D+ .ut it !annot+ as in!orre!tl/ held ./ the trial !ourt+ .e ade Rsolidaril/R lia.le with the two prin!ipal tortfeasors+ na el/ respondents Sio Cho/ and San Aeon Ri!e 7ill+ In!. For if petitioner-ins!rer "ere solidaril# lia le "ith said+ t"o 89: respondents # reason of the inde$nit# contract against third part# lia ilit# T under whi!h an insurer !an .e dire!tl/ sued ./ a third part/ T this "ill res!lt in a violation of the principles !nderl#ing solidar# o ligation and ins!rance contracts. Ce phasis suppliedD The Court then pro!eeded to distin)uish the e?tent of the lia.ilit/ and anner of enfor!in) the sa e in ordinar/ !ontra!ts fro that of insuran!e !ontra!ts. Fhile in solidar/ o.li)ations+ the !reditor a/ enfor!e the entire o.li)ation a)ainst one of the solidar/ de.tors+ in an insuran!e !ontra!t+ the

insurer underta9es for a !onsideration to inde nif/ the insured a)ainst loss+ da a)e or lia.ilit/ arisin) fro an un9nown or !ontin)ent event. "" Thus+ petitioner therein+ whi!h+ under the insuran!e !ontra!t is lia.le onl/ up to =*1+111.11+ !an not .e ade solidaril/ lia.le with the insured for the entire o.li)ation of =*2+1#(.11 otherwise there would result Ran evident .rea!h of the !on!ept of solidar/ o.li)ation.R Si ilarl/+ petitioners herein !annot validl/ !lai that A5ISCO+ whose lia.ilit/ under the insuran!e poli!/ is also =*1+111.11+ !an .e held solidaril/ lia.le with Destra>o for the total a ount of =5(+21#.,1 in a!!ordan!e with the de!ision of the lower !ourt. Sin!e under .oth the law and the insuran!e poli!/+ A5ISCOSs lia.ilit/ is onl/ up to =*1+111.11+ the se!ond para)raph of the dispositive portion of the de!ision in Guestion a/ have unwittin)l/ sown !onfusion a on) the petitioners and their !ounsel. Fhat should have .een !learl/ stressed as to leave no roo for dou.t was the lia.ilit/ of A5ISCO under the e?pli!it ter s of the insuran!e !ontra!t. In fine+ we !on!lude that the lia.ilit/ of A5ISCO .ased on the insuran!e !ontra!t is dire!t+ .ut not solidar/ with that of Destra>o whi!h is .ased on Arti!le *#81 of the Civil Code. "# As su!h+ petitioners have the option either to !lai the =#5+111 fro A5ISCO and the .alan!e fro Destra>o or enfor!e the entire >ud) ent fro Destra>o su.>e!t to rei .urse ent fro A5ISCO to the e?tent of the insuran!e !overa)e. Fhile the petition see9s a definitive rulin) onl/ on the nature of A5ISCOSs lia.ilit/+ we noti!ed that the lower !ourt erred in the !o putation of the pro.a.le loss of in!o e. Usin) the for ula6 *J( of C81%53D ? =#*+111.11+ it awarded =*8+811.11. "$ Upon re!o putation+ the !orre!t a ount is =#2*+111.11. 0ein) a Rplain error+R we opt to !orre!t the sa e. "% 5urther ore+ in a!!ordan!e with prevailin) >urispruden!e+ the death inde nit/ is here./ in!reased to =51+111.11. "& F;ERE5ORE+ pre ises !onsidered+ the present petition is here./ GRA'TED. The award of =*8+811.11 representin) loss of in!o e is I'CREASED to =#2*+111.11 and the death inde nit/ of =#*+111.11 to =51+111.11. 4. &illa!orta vs. Insuran!e Co issions A%54#,#

The Court sets aside respondent Insuran!e Co issionSs dis issal of petitionerSs !o plaint and holds that where the insuredSs !ar is wron)full/ ta9en without the insuredSs !onsent fro the !ar servi!e and repair shop to who it had .een entrusted for !he!9%up and repairs Cassu in) that su!h ta9in) was for a >o/ ride+ in the !ourse of whi!h it was totall/ s ashed in an a!!identD+ respondent insurer is lia.le and ust pa/ insured for the total loss of the insured vehi!le under the theft !lause of the poli!/. The undisputed fa!ts of the !ase as found in the appealed de!ision of April #4+ #281 of respondent insuran!e !o ission are as follows6 Co plainant "petitioner$ was the owner of a Colt Aan!er+ 7odel #2,3+ insured with respondent !o pan/ under =rivate Car =oli!/ 'o. 70IJ=C% 1,14 for =(5+111.11 T Own Da a)eE =(1+111.11 T TheftE and =(1+111.11 T Third =art/ Aia.ilit/+ effe!tive 7a/ #3+ #2,, to 7a/ #3+ #2,8. On 7a/ 2+ #2,8+ the vehi!le was .rou)ht to the Sunda/ 7a!hine

For9s+ In!.+ for )eneral !he!9%up and repairs. On 7a/ ##+ #2,8+ while it was in the !ustod/ of the Sunda/ 7a!hine For9s+ the !ar was alle)edl/ ta9en ./ si? C3D persons and driven out to 7ontal.an+ Ri@al. Fhile travellin) alon) 7a.ini St.+ Sitio =al/asan+ 0arrio 0ur)os+ )oin) 'orth at 7ontal.an+ Ri@al+ the !ar fi)ured in an a!!ident+ hittin) and .u pin) a )ravel and sand tru!9 par9ed at the ri)ht side of the road )oin) south. As a !onseGuen!e+ the )ravel and sand tru!9 veered to the ri)ht side of the pave ent )oin) south and the !ar veered to the ri)ht side of the pave ent )oin) north. The driver+ 0enito 7a.asa+ and one of the passen)ers died and the other four sustained ph/si!al in>uries. The !ar+ as well+ suffered e?tensive da a)e. Co plainant+ thereafter+ filed a !lai for total loss with the respondent !o pan/ .ut !lai was denied. ;en!e+ !o plainant+ was !o pelled to institute the present a!tion. The !o prehensive otor !ar insuran!e poli!/ for =(5+111.11 issued ./ respondent E pire Insuran!e Co pan/ ad ittedl/ undertoo9 to inde nif/ the petitioner%insured a)ainst loss or da a)e to the !ar CaD ./ a!!idental !ollision or overturnin)+ or !ollision or overturnin) !onseGuent upon e!hani!al .rea9down or !onseGuent upon wear and tearE C.D ./ fire+ e?ternal e?plosion+ self%i)nition or li)htnin) or .ur)lar/+ house.rea9in) or theftE and C!D ./ ali!ious a!t. Respondent insuran!e !o ission+ however+ dis issed petitionerSs !o plaint for re!over/ of the total loss of the vehi!le a)ainst private respondent+ sustainin) respondent insurerSs !ontention that the a!!ident did not fall within the provisions of the poli!/ either for the Own Da a)e or Theft !overa)e+ invo9in) the poli!/ provision on RAuthori@ed DriverR !lause. " Respondent !o ission upheld private respondentSs !ontention on the RAuthori@ed DriverR !lause in this wise6 RIt ust .e o.served that under the a.ove%Guoted provisions+ the poli!/ li its the use of the insured vehi!le to two C*D persons onl/+ na el/6 the insured hi self or an/ person on his CinsuredSsD per ission. Under the se!ond !ate)or/+ it is to .e noted that the words Ran/ personS is Gualified ./ the phrase

... on the insuredSs order or with his per ission.S It is therefore !lear that if the person drivin) is other than the insured+ he ust have .een dul/ authori@ed ./ the insured+ to drive the vehi!le to a9e the insuran!e !o pan/ lia.le for the driverSs ne)li)en!e. Co plainant ad itted that she did not 9now the person who drove her vehi!le at the ti e of the a!!ident+ u!h less !onsented to the use of the sa e Cpar. 5 of the !o plaintD. ;er hus.and li9ewise ad itted that he neither 9new this driver 0enito 7a.asa CE?hi.it S4SD. Fith these de!larations of !o plainant and her hus.and+ we hold that the person who drove the vehi!le+ in the person of 0enito 7a.asa+ is not an authori@ed driver of the !o plainant. Apparentl/+ this is a violation of the SAuthori@ed DriverS !lause of the poli!/. Respondent !o ission li9ewise upheld private respondentSs assertion that the !ar was not stolen and therefore not !overed ./ the Theft !lause+ rulin) that RThe ele ent of Sta9in)S in Arti!le (18 of the Revised =enal Code eans that the a!t of deprivin) another of the possession and do inion of a ova.le thin) is !oupled ... with the intention. at the ti e of the Sta9in)S+ of withholdin) it with the !hara!ter of per anen!/ C=eople vs. Galan)+ , Appt. Ct. Rep. #(D. In other words+ there ust have .een shown a felonious intent upon the part of the ta9er of the !ar+ and the intent ust .e an intent per anentl/ to deprive the insured of his !ar+R and that RSu!h was not the !ase in this instan!e. The fa!t that the !ar was ta9en ./ one of the residents of the Sunda/ 7a!hine For9s+ and the withholdin) of the sa e+ for a >o/ ride should not .e !onstrued to ean Sta9in)S under Art. (18 of the Revised =enal Code. If at all there was a Sta9in)S+ the sa e was erel/ te porar/ in nature. A te porar/ ta9in) is held not a ta9in) insured a)ainst C48 A AR *d.+ pa)e #5D.R The Court finds respondent !o issionSs dis issal of the !o plaint to .e !ontrar/ to the eviden!e and the law. 5irst+ respondent !o issionSs rulin) that the person who drove the vehi!le in the person of 0enito 7a.asa+ who+ a!!ordin) to its findin)+ was one of the residents of the Sunda/ 7a!hine For9s+ In!. to who the !ar had .een entrusted for )eneral !he!9%up and repairs was not an Rauthori@ed driverR of petitioner%!o plainant is too restri!tive and !ontrar/ to the esta.lished

prin!iple that insuran!e !ontra!ts+ .ein) !ontra!ts of adhesion where the onl/ parti!ipation of the other part/ is the si)nin) of his si)nature or his RadhesionR thereto+ Ro.viousl/ !all for )reater stri!tness and vi)ilan!e on the part of !ourts of >usti!e with a view of prote!tin) the wea9er part/ fro a.use and i position+ and prevent their .e!o in) traps for the unwar/. # The ain purpose of the Rauthori@ed driverR !lause+ as a/ .e seen fro its te?t+ s!pra+ is that a person other than the insured owner+ who drives the !ar on the insuredSs order+ su!h as his re)ular driver+ or with his per ission+ su!h as a friend or e .er of the fa il/ or the e plo/ees of a !ar servi!e or repair shop ust .e dul/ li!ensed drivers and have no disGualifi!ation to drive a otor vehi!le. A !ar owner who entrusts his !ar to an esta.lished !ar servi!e and repair shop ne!essaril/ entrusts his !ar 9e/ to the shop owner and e plo/ees who are presu ed to have the insuredSs per ission to drive the !ar for le)iti ate purposes of !he!9in) or road%testin) the !ar. The ere happenstan!e that the e plo/eeCsD of the shop owner diverts the use of the !ar to his own illi!it or unauthori@ed purpose in violation of the trust reposed in the shop ./ the insured !ar owner does not ean that the Rauthori@ed driverR !lause has .een violated su!h as to .ar re!over/+ provided that su!h e plo/ee is dul/ Gualified to drive under a valid driverSs li!ense. The situation is no different fro the re)ular or fa il/ driver+ who instead of !arr/in) out the ownerSs order to fet!h the !hildren fro s!hool ta9es out his )irl friend instead for a >o/ ride and instead wre!9s the !ar. There is no Guestion of his .ein) an Rauthori@ed driverR whi!h allows re!over/ of the loss althou)h his trip was for a personal or illi!it purpose without the ownerSs authori@ation. Se!ondl/+ and independentl/ of the fore)oin) Csin!e when a !ar is unlawfull/ ta9en+ it is the theft !lause+ not the Rauthori@ed driverR !lause+ that appliesD+ where a !ar is ad ittedl/ as in this !ase unlawfull/ and wron)full/ ta9en ./ so e people+ .e the/ e plo/ees of the !ar shop or not to who it had .een entrusted+ and ta9en on a lon) trip to 7ontal.an without the ownerSs !onsent or 9nowled)e+ su!h ta9in) !onstitutes or

parta9es of the nature of theft as defined in Arti!le (18 of the Revised =enal Code+ vi@. RFho are lia.le for theft. T Theft is !o itted ./ an/ person who+ with intent to )ain .ut without violen!e a)ainst or inti idation of persons nor for!e upon thin)s+ shall ta9e personal propert/ of another without the latterSs !onsent+R for purposes of re!overin) the loss under the poli!/ in Guestion. The Court re>e!ts respondent !o issionSs pre ise that there ust .e an intent on the part of the ta9er of the !ar Rper anentl/ to deprive the insured of his !arR and that sin!e the ta9in) here was for a R>o/ rideR and R erel/ te porar/ in nature+R a Rte porar/ ta9in) is held not a ta9in) insured a)ainst.R The eviden!e does not warrant respondent !o issionSs findin)s that it was a ere R>o/ rideR. 5ro the ver/ investi)atorSs report !ited in its !o ent+ $ the poli!e found fro the waist of the !ar driver 0enito 7a.asa 0artolo e who s ashed the !ar and was found dead ri)ht after the in!ident Rone !al. 45 Colt. and one apple t/pe )renade+R hardl/ the aterials one would .rin) alon) on a R>o/ rideR. Then+ a)ain+ it is eGuall/ evident that the ta9in) proved to .e Guite per anent rather than te porar/+ for the !ar was totall/ s ashed in the fatal a!!ident and was never returned in servi!ea.le and useful !ondition to petitioner%owner. Assu in)+ despite the totall/ inadeGuate eviden!e+ that the ta9in) was Rte porar/R and for a R>o/ rideR+ the Court sustains as the .etter view that whi!h holds that when a person+ either with the o.>e!t of )oin) to a !ertain pla!e+ or learnin) how to drive+ or en>o/in) a free ride+ ta9es possession of a vehi!le .elon)in) to another+ without the !onsent of its owner+ he is )uilt/ of theft .e!ause ./ ta9in) possession of the personal propert/ .elon)in) to another and usin) it+ his intent to )ain is evident sin!e he derives therefro utilit/+ satisfa!tion+ en>o/ ent and pleasure. -usti!e Ra on C. AGuino !ites in his wor9 Groi@ard who holds that the use of a thin) !onstitutes )ain and Cuello Calon who !alls it Rhurt de uso. R % The insurer ust therefore inde nif/ the petitioner%owner for the total loss of the insured !ar in the su of =(5+111.11 under the theft !lause of the

poli!/+ su.>e!t to the filin) of su!h !lai for rei .urse ent or pa/ ent as it a/ have as su.ro)ee a)ainst the Sunda/ 7a!hine For9s+ In!. ACCORDI'GAK+ the appealed de!ision is set aside and >ud) ent is here./ rendered senten!in) private respondent to pa/ petitioner the su of =(5+111.11 with le)al interest fro the filin) of the !o plaint until full pa/ ent is ade and to pa/ the !osts of suit. SO ORDERED. 5. =aler o vs. =/ra id insuran!e Co. (3481 The Court of Appeals !ertified this !ase to Us for proper disposition as the onl/ Guestion involved is the interpretation of the provision of the insuran!e !ontra!t re)ardin) the Rauthori@ed driverR of the insured otor vehi!le. On 7ar!h ,+ #232+ the insured+ appellee Andrew =aler o+ filed a !o plaint in the Court of 5irst Instan!e of 'e)ros O!!idental a)ainst =/ra id Insuran!e Co.+ In!.+ for pa/ ent of his !lai under a =rivate Car Co prehensive =oli!/ 7&%#*5# issued ./ the defendant CE?h. AD. In its answer+ the appellant =/ra id Insuran!e Co.+ In!.+ alle)ed that it disallowed the !lai .e!ause at the ti e of the a!!ident+ the insured was drivin) his !ar with an e?pired driverSs li!ense. After the trial+ the !ourt a ;!o rendered >ud) ent on O!to.er *2+ #232 orderin) the defendant Rto pa/ the plaintiff the su of =*1+111.11+ value of the insuran!e of the otor vehi!le in Guestion and to pa/ the !osts.R On 'ove .er *3+ #232+ the plaintiff filed a R7otion for I ediate E?e!ution =endin) Appeal.R It was opposed ./ the defendant+ .ut was )ranted ./ the trial !ourt on De!e .er #5+ #232. The trial !ourt found the followin) fa!ts to .e undisputed6

On O!to.er #*+#238+ after havin) pur!hased a .rand new 'issan Cedri! de Au?e Sedan !ar .earin) 7otor 'o. 18,,2, fro the ') Sa 0o9 7otors Co. in 0a!olod Cit/+ plaintiff insured the sa e with the defendant insuran!e !o pan/ a)ainst an/ loss or da a)e for = *1+111.11 and a)ainst third part/ lia.ilit/ for = #1+111.11. =laintiff paid the defendant = (3#.(4 pre iu for one /ear+ 7ar!h #*+ #238 to 7ar!h #*+ #232+ for whi!h defendant issued =rivate Car Co prehensive =oli!/ 'o. 7&%#*5#+ ar9ed E?hi.it RA.R The auto o.ile was+ however+ ort)a)ed ./ the plaintiff with the vendor+ ') Sa 0o9 7otors Co.+ to se!ure the pa/ ent of the .alan!e of the pur!hase pri!e+ whi!h e?plains wh/ the re)istration !ertifi!ate in the na e of the plaintiff re ains in the hands of the ort)a)ee+ ') Sa 0o9 7otors Co. On April #,+ #238+ while drivin) the auto o.ile in Guestion+ the plaintiff et a violent a!!ident. The Aa Carlota Cit/ fire en)ine !rashed head on+ and as a !onseGuen!e+ the plaintiff sustained ph/si!al in>uries+ his father+ Cesar =aler o+ who was with a in the !ar at the ti e was li9ewise seriousl/ in>ured and died shortl/ thereafter+ and the !ar in Guestion was totall/ wre!9ed. The defendant was i ediatel/ notified of the o!!urren!e+ and upon its orders+ the da a)ed !ar was towed fro the s!ene of the a!!ident to the !o pound of ') Sa 0o9 7otors in 0a!olod Cit/ where it re ains deposited up to the present ti e. The insuran!e poli!/+ E?hi.it RA+R )rants an option unto the defendant+ in !ase of a!!ident either to inde nif/ the plaintiff for loss or da a)e to the !ar in !ash or to repla!e the da a)ed !ar. The defendant+ however+ refused to ta9e either of the a.ove% entioned alternatives for the reason as alle)ed+ that the insured hi self had violated the ter s of the poli!/ when he drove the !ar in Guestion with an e?pired driverSs li!ense. CDe!ision+ O!t. *2+ #232+ p. 38+ Re!ord on Appeal.D Appellant alle)es that the trial !ourt erred in interpretin) the followin) provision of the =rivate Car Co prehensive =oli!/ 7&%#*5#6

AUT;ORIUED DRI&ER6 An/ of the followin)6 CaD The Insured. C.D An/ person drivin) on the InsuredSs order or with his per ission. =rovided that the person drivin) is per itted in a!!ordan!e with the li!ensin) or other laws or re)ulations to drive the 7otor &ehi!le and is not disGualified fro drivin) su!h otor vehi!le ./ order of a Court of law or ./ reason of an/ ena!t ent or re)ulation in that .ehalf. CE?h. RA.RD There is no erit in the appellantSs alle)ation that the plaintiff was not authori@ed to drive the insured otor vehi!le .e!ause his driverSs li!ense had e?pired. The driver of the insured otor vehi!le at the ti e of the a!!ident was+ the insured hi self+ hen!e an Rauthori@ed driverR under the poli!/. Fhile the 7otor &ehi!le Aaw prohi.its a person fro operatin) a otor vehi!le on the hi)hwa/ without a li!ense or with an e?pired li!ense+ an infra!tion of the 7otor &ehi!le Aaw on the part of the insured+ is not a .ar to re!over/ under the insuran!e !ontra!t. It however renders hi su.>e!t to the penal san!tions of the 7otor &ehi!le Aaw. The reGuire ent that the driver .e Rper itted in a!!ordan!e with the li!ensin) or other laws or re)ulations to drive the 7otor &ehi!le and is not disGualified fro drivin) su!h otor vehi!le ./ order of a Court of Aaw or ./ reason of an/ ena!t ent or re)ulation in that .ehalf+R applies onl/ when the driverR is drivin) on the insuredSs order or with his per ission.R It does not appl/ when the person drivin) is the insured hi self. This view a/ .e inferred fro the de!ision of this Court in 3illacorta vs. Ins!rance &o$$ission+ #11 SCRA 43,+ where it was held that6 The ain purpose of the Rauthori@ed driverR !lause+ as a/ .e seen fro its

te?t+ is that a person other than the insured owner+ who drives the !ar on the insuredSs order+ su!h as his re)ular driver+ or with his per ission+ su!h as a friend or e .er of the fa il/ or the e plo/ees of a !ar servi!e or repair shop+ ust .e dul/ li!ensed drivers and have no disGualifi!ation to drive a otor vehi!le. In an A eri!an !ase+ where the insured herself was personall/ operatin) her auto o.ile .ut without a li!ense to operate it+ her li!ense havin) e?pired prior to the issuan!e of the poli!/+ the Supre e Court of 7assa!husetts was ore e?pli!it6 ... Operatin) an auto o.ile on a pu.li! hi)hwa/ without a li!ense+ whi!h a!t is a statutor/ !ri e is not pre!luded ./ pu.li! poli!/ fro enfor!in) a poli!/ inde nif/in) her a)ainst lia.ilit/ for .odil/ in>uries The infli!ted ./ use of the auto o.ile.R CDrew C. Drewfield 7!7ahon vs. ;annah =earl an+ et al.+ *4* 7ass. (3,+ #(3 '.E. #54+ *( A.A.R. #43,.D F;ERE5ORE+ the appealed de!ision is affir ed with !osts a)ainst the defendant%appellant.

3. Tan!o vs. The =hilippine Guarant/ Co. #,(#* =laintiffSs auto o.ile+ while .ein) driven at the southern approa!h of the -ones .rid)e ./ his .rother 7anuel Tan!o on Septe .er #+ #252+ fi)ured in a !ollision with a pi!9%up deliver/ van+ as a result of whi!h .oth vehi!les were da a)ed. =laintiff paid for repairs the total su of =*+5(3.22 and then filed his !lai with defendant !o pan/ under a !ar insuran!e poli!/ issued ./ the latter. The !lai was re>e!ted+ whereupon suit was !o en!ed in the 7uni!ipal Court of 7anila+ when!e it was elevated on appeal to the Court of 5irst Instan!e of 7anila+ whi!h )ave >ud) ent for plaintiff in the a ount stated+ plus interest at 8V and =511.11 as attorne/Ss fees. Appeal was ta9en ./ defendant dire!tl/ to this Court+ there .ein) no dispute as to the fa!ts. The poli!/ sued upon !overs+ up to a !ertain li it+ loss or da a)e to the insured vehi!le as well as da a)e to propert/ of third persons as a !onseGuen!e of or in!ident to the operation of said vehi!le. There is an e?!eption !lause+ however+ whi!h provides that Rthe !o pan/ shall not .e lia.le in respe!t of an/ a!!ident+ loss+ da a)e or lia.ilit/ !aused+ sustained or in!urred ... whilst Cthe insured vehi!leD is ... .ein) driven ./ or is for the purpose of .ein) driven ./ hi in the !har)e of an/ person other than an Authori@ed Driver.R The poli!/ defined the ter RAuthori@ed DriverR to .e the insured hi self and RC.D an/ person drivin) on the InsuredSs order or with his per ission+ provided that the person drivin) is per itted in a!!ordan!e with the li!ensin) or other laws or re)ulations to drive the 7otor &ehi!le or has .een per itted and is not disGualified ./ order of a !ourt of law or ./ reason of an/ ena!t ent or re)ulation in that .ehalf fro drivin) su!h 7otor &ehi!le.R At the ti e of the !ollision plaintiffSs .rother who was at the wheel+ did not have a valid li!ense+ the one he had o.tained for the /ear #258 not havin) .een renewed on or .efore the last wor9in) da/ of 5e.ruar/ #252+ as reGuired ./ se!tion (# of the 7otor &ehi!le Aaw+ A!t 'o. (22*. That

se!tion states that an/ li!ense not so renewed Rshall .e!o e delinGuent and invalid+R and se!tion *# states that Re?!ept as otherwise spe!ifi!all/ provided in this A!t no person shall operate an/ otor vehi!le on the pu.li! hi)hwa/s without havin) pro!ured a li!ense for the !urrent /ear+ nor while su!h li!ense is delinGuent+ invalid+ suspended or revo9ed.R In renderin) >ud) ent for plaintiff the trial !ourt adverted to the a.sen!e of eviden!e that 7anuel Tan!o had .een RdisGualified ./ order of a !ourt of law or ./ reason of an/ ena!t ent or re)ulation in that .ehalf fro drivin) su!h otor vehi!le+R and ruled that if there is an/ a .i)uit/ in the definition of the ter Rauthori@ed driverR in the poli!/ the a .i)uit/ should .e !onstrued in favor of plaintiff+ sin!e the poli!/ had .een prepared in its entiret/ ./ defendant. The trial !ourtSs adverten!e is true as a atter of fa!tE and its rulin) is !orre!t as a atter of law. 0ut neither one nor the other is relevant in this !ase. Appellant does not rel/ on the portion of the proviso in the poli!/ Guoted ./ the !ourt .ut on that whi!h states that Rthe person drivin) is per itted in a!!ordan!e with the li!ensin) or other laws.R And as to this there is no a .i)uit/ whatsoever+ .e!ause the 7otor &ehi!le Aaw e?pressl/ prohi.its an/ person fro operatin) a otor vehi!le on the hi)hwa/s without a li!ense for the !urrent /ear or while su!h li!ense is delinGuent or invalid. That 7anuel Tan!o renewed his li!ense on Septe .er 8+#252+ one wee9 after the a!!ident did not !ure the delinGuen!/ or revalidate the li!ense whi!h had alread/ e?pired. Fe are not aware that the Guestion presented here has .een de!ided ./ this Court in an/ previous !ase. Indeed all the authorities !ited ./ the parties !onsist of de!isions Courts United States. Fe note+ however+ that those relied upon ./ appellee are not in point ./ reason of aterial differen!es in the fa!ts or issues presented. In Messers$ith vs, A$erican Fidelit# &o.+ #8, App. Div. (5+ #,5 '.K. Supp. #32E and Fire$an<s F!nd Ins!rance &o, vs, /ale#+ #*2 7iss. 5*5+ 21 So. 3(5+ the Guestion was whether the insured !ould re!over on an auto o.ile poli!/ for da a)e sustained in a !ollision whi!h o!!urred while the vehi!le was .ein) driven in violation of law T in the first !ase ./ an infant at the instan!e of the insured+ and in the se!ond ./ the insured hi self .e/ond the statutor/ speed li it. In neither !ase was there a provision in the poli!/ e?pressl/ e?!ludin) lia.ilit/ ./ reason of the

parti!ular violation involved. Fe have no reason to disa)ree with the pronoun!e ent of the !ourt in the se!ond !ase+ after !itin) the first+ that Rif su!h a defense Cthat the vehi!le was .ein) driven in violation of lawD were per issi.le auto o.ile insuran!e would .e pra!ti!all/ valueless.R In MacMahon vs, Pearl$an+ #( '.E. #54%#53+ a 7assa!husetts !ase+ the defense of the insurer was also the violation of law ./ the insured+ na el/+ that she was drivin) without a li!enseE .ut as stated in the de!ision+ Rthe !asualt/ !o pan/ does not ur)e that the unlawful !ondu!t is for.idden in e?press ter s+ C.utD that .e!ause of pu.li! poli!/ it ou)ht not to .e !o pelled to pa/ da a)es.R The !ourt+ !itin) Messers$ith v, A$erican Fidelit# &o,+ s!pra+ si ilarl/ allowed re!over/+ sa/in) that to restri!t su!h insuran!e to !ases where there has .een no violation of !ri inal law or ordinan!e would redu!e inde nit/ to a shadow. In the !ase .efore Us now appellantSs defense does not rest on the )eneral proposition that if a law is violated at the ti e of the a!!ident whi!h !auses the da a)e or in>ur/ there !an .e no re!over/+ .ut rather on a spe!ifi! provision in the poli!/ that appellant shall not .e lia.le if the a!!ident o!!urs while the vehi!le is .ein) driven ./ an/ person other than an authori@ed driver and that an authori@ed driver+ if not the insured hi self+ is one who is a!tin) on his order or with his per ission+ provided he is per itted to drive under the li!ensin) laws. The !ases !ited ./ appellant are apropos. In &rahan v, A!to$o ile =nder"riters+ Inc,+ et al.+ #,3 A. C=a.D 8#,+ a !lause in the poli!/ e?!ludin) loss while the otor vehi!le Ris .ein) operated ./ an/ person prohi.ited ./ law fro drivin) an auto o.ileR was held to .e free fro dou.t or a .i)uit/+ reasona.le in its ter s and in furtheran!e of the poli!/ of the law prohi.itin) unli!ensed drivers to operate otor vehi!les. In >a onic( v, Ralston+ et al.+ *3# '.F. C7i!h.D (#3+ the insured was drivin) with an e?pired li!ense+ in violation of law CA!t 'o. 2# of the =u.li! A!ts of #2(#D+ when the a!!ident o!!urred. Under a provision in the poli!/ that the insurer Rshall not .e lia.le while the auto o.ile is operated ... ./ an/ person prohi.ited ./ law fro drivin)+R the insuran!e !o pan/ was a.solved+ the Supre e Court of 7i!hi)an sa/in)6 RTo reGuire a person to se!ure an

operatorSs li!ense and eet !ertain reGuire ents .efore drivin) an auto o.ile is a re)ulation for the prote!tion of life and propert/+ the wisdo of whi!h !an s!ar!el/ .e Guestioned. The Ae)islature has also provided that ever/ three /ears su!h li!enses e?pire and a/ .e renewed under !ertain !onditions. If one fails to !o pl/ with the re)ulation+ the statute sa/s+ he or she shall not drive a otor vehi!le upon the hi)hwa/. Under the ter s of the !ontra!t+ while under su!h statutor/ prohi.ition+ plaintiff !ould not re!over under his poli!/. To per it su!h re!over/+ notwithstandin) the la!9 of a driverSs li!ense+ would tend to under ine the prote!tion afforded the pu.li! ./ virtue of A!t 'o. 2#.R The e?!lusion !lause in the !ontra!t invo9ed ./ appellant is !lear. It does not refer to violations of law in )eneral+ whi!h indeed would tend to render auto o.ile insuran!e pra!ti!all/ a sha + .ut to a spe!ifi! situation where a person other than the insured hi self+ even upon his order or with his per ission+ drives the otor vehi!le without a li!ense or with one that has alread/ e?pired. 'o prin!iple of law or of pu.li! poli!/ ilitates a)ainst the validit/ of su!h a provision. The >ud) ent appealed fro is reversed+ with !osts.

,. Gutierre@ vs. Capital Insuran!e and Suret/ Co. *38*, The issue in this !ase is whether an insuran!e !overs a >eepne/ whose driverSs traffi! violation report or te porar/ operatorSs per it had alread/

e?pired. Capital Insuran!e M Suret/ Co.+ In!. insured on De!e .er ,+ #23# for one /ear the >eepne/ of A)apito Gutierre@ a)ainst passen)er and third%part/ lia.ilit/. The passen)er lia.ilit/ would not e?!eed =5+111 for an/ one person CE?h. # or C%*D. The poli!/ provides in ite #( that the authori@ed driver ust .e the holder of a valid and su.sistin) professional driverSs li!ense. RA driver with an e?pired Traffi! &iolation Re!eipt or e*pired Te$porar# %perator<s Per$it is not !onsidered an authori@ed driverR Cpp. *3%*,+ #1,+ Re!ord on Appeal+ =ar. #(+ =oli!/+ E?h. CD. Ite #( is part of the Rde!larationsR whi!h for ed part of the poli!/ and had a pro issor/ nature and effe!t and !onstituted Rthe .asis of the poli!/R CE?h. C+ p. ,+ Re!ord on AppealD. On Ma# 9?+ @?A9+ the insured >eepne/ fi)ured in an a!!ident at 0uendia Avenue+ 7a9ati+ Ri@al. As a result+ a passen)er na ed A)atoni!o 0alle)a fell off the vehi!le and died C=ars. ( and 4+ E?h. AD. Teofilo &entura+ the >eepne/ driver+ was dul/ li!ensed for the /ears #23* and #23( CE?h. DD. ;owever+ at the ti e of the a!!ident he did not have the li!ense. Instead+ he had a !ar.on !op/ of a traffi! violation report Csu onsD issued ./ a poli!e an on Fe r!ar# 99+ @?A9+ with the notation that he had !o itted the violation6 RInattentive to drivin) T CInv. in a!!identD at 26(1 a. .+ *%**%3*R CE?h. E%#D. The sa e T&R+ whi!h served as a re!eipt for his li!ense+ reGuired hi to report to 0ran!h 8 of the traffi! !ourt at the !orner of Arro!eros and Con!ep!ion Streets+ 7anila at nine oS!lo!9 in the ornin) of 7ar!h *+ #23*. The T&R would Rserve as a te$porar# operator<s per$it for @5 da#s fro$ receipt hereofR Cp. #11+ Re!ord on AppealD. It is indisputa.le that at the ti e of the a!!ident C7a/ *2+ #23*D+ &entura was holdin) an Re?pired Te porar/ OperatorSs =er it.R

Gutierre@ paid =4+111 to the passen)erSs widow+ Rosalina A.anes &da. de 0alle)a+ ./ reason of her hus.andSs death C5 tsn -anuar/ *1+ #233E E?h. 0 and 0%#D. As Capital Insuran!e refused to a9e an/ rei .urse ent+ he filed on O!to.er #4+ #23( in the !it/ !ourt of 7anila an a!tion for spe!ifi! perfor an!e and da a)es. The !it/ !ourt in a de!ision dated April *1+ #235 held that &entura was an authori@ed driver .e!ause his T&R was !oter inous with his li!ense. ;owever+ it dis issed the !o plaint .e!ause Gutierre@ alle)edl/ failed to prove that he paid an/ a ount to the heirs of 0alle)a. Gutierre@ appealed. The Court of 5irst Instan!e in a de!ision dated April #8+ #233 held that Gutierre@Ss E?hi.its 0 and 0%# prove that he paid the widow of 0alle)a =4+122.25 and that his driver+ &entura+ was an authori@ed driver .e!ause his T&R was R!oe?tensive with theR two%/ear ter of his !onfis!ated li!ense. It ordered the insuran!e !o pan/ to pa/ the Id a ount. The insuran!e !o pan/ appealed to this Court. Fe hold that para)raph #( of the poli!/+ alread/ !ited+ is de!isive and !ontrollin) in this !ase. It plainl/ provides+ and we repeat+ that Ra driver with an e?pired Traffi! &iolation Re!eipt or e?pired Te porar/ OperatorSs per it is not !onsidered an authori@ed driver within the eanin)R of the poli!/. O.viousl/+ &entura was not an authori@ed driver. ;is te porar/ operatorSs per it had e?pired. The e?piration .ars re!over/ under the poli!/. In lia.ilit/ insuran!e+ Rthe parties are .ound ./ the ter s of the poli!/ and the ri)ht of insured to re!over is )overned there./R C44 C.-.S. 2(4D. It a/ .e that for purposes of the 7otor &ehi!le Aaw the T&R is !oter inous with the !onfis!ated li!ense. That is wh/ the A!tin) Ad inistrator of the 7otor &ehi!les Offi!e and the 7anila deput/ !hief of poli!e ventured the opinion that a T&R does not suspend the errin) driverSs li!ense+ that it serves as a te porar/ li!ense and that it a/ .e renewed .ut

should in no !ase e?tend .e/ond the e?piration date of the ori)inal li!ense CE?h. 5 and -+ 3,+ 21%2 #+ Re!ord on AppealD. 0ut the instant !ase deals with an insuran!e poli!/ whi!h definitivel/ fi?ed the eanin) of Rauthori@ed driverR. That stipulation !annot .e disre)arded or rendered eanin)less. It is .indin) on the insured. It eans that to .e entitled to re!over/ the insured should see to it that his driver is authori@ed as envisa)ed in para)raph #( of the poli!/ whi!h is the law .etween the parties CT/ vs. 5irst 'ational Suret/ M Insuran!e Co.+ In!.+ ### =hil. ##**D.l"phlBitC The ri)hts of the parties flow fro the insuran!e !ontra!t CAn) vs. 5ulton 5ire Ins. Co.+ ##* =hil. 844D. The followin) rulin) has persuasive authorit/6 Ins!rance7 A!to$o ile7 When ins!rer e*e$pt fro$ lia ilit#7 &ase at ar . T The auto o.ile insuran!e poli!/ sued upon in the instant !ase e?e pts the insurer !o pan/ fro lia.ilit/ for an/ a!!ident loss+ da a)e or lia.ilit/ !aused+ sustained or in!urred while the vehi!le is .ein) driven ./ an/ person other than an authori@ed driver. The poli!/ defines the ter Sauthori@ed driverS to .e the insured hi self or an/ person drivin) on the insuredSs order or with his per ission provided he is per itted to drive under the li!ensin) laws. In the !ase at .ar+ plaintiffSs .rother+ who was at the wheel at the ti e of the !ollision+ did not have a valid li!ense .e!ause the one he had o.tained had alread/ e?pired and had not .een renewed as reGuired ./ Se!tion (# of the 7otor &ehi!le Aaw. That he had renewed his li!ense one wee9 after the a!!ident did not !ure the delinGuen!/ or revalidate the li!ense whi!h had alread/ e?pired CS/lla.us+ Tan!o+ -r. vs. =hil. Guarant/ Co.+ #** =hil. ,12D. F;ERE5ORE. The >ud) ent of the trial is reverse and set aside. The

!o plaint is dis issed. 'o !osts.

8. Asso!iation of 0aptists for Forld Evan)elis Co. In!. *8,,*

vs. 5ield an4s Insuran!e

#. 7ERCA'TIAE AAFE I'SURA'CEE CO7=RE;E'SI&E =OAICKE U'AAF5UA A'D FRO'G5UA TAOI'G O5 &E;ICAE 5OR A -OK RIDE CO'STITUTES T;E5T FIT;I' T;E 7EA'I'G O5 I'SURA'CE =OAICKE RECO&ERK 5OR DA7AGE 'OT 0ARRED 0K T;E IAAEGAA USE O5 T;E &E;ICAE. T The Co prehensive =oli!/

issued ./ the insuran!e !o pan/ in!ludes loss of or da a)e to the otor vehi!le ./ R.ur)lar/ . . . or theft.R It is settled that the a!t of Cati.en in ta9in) the vehi!le for a >o/ ride to Toril+ Davao Cit/+ !onstitutes theft within the eanin) of the insuran!e poli!/ and that re!over/ for da a)e to the !ar is not .arred ./ the ille)al use of the !ar ./ one of the station .o/s. *. ID.E ID.E ID.E ID.E ID.E AIA0IAITK O5 I'SURER U'DER T;E T;E5T CAAUSE O5 A' I'SURA'CE =OAICKE =RIOR CO'&ICTIO' 'OT RELUIRED I' A' ACTIO' 5OR RECO&ERK O' A' AUTO7O0IAE I'SURA'CEE CASE AT 0AR. T There need .e no prior !onvi!tion for the !ri e of theft to a9e an insurer lia.le under the theft !lause of the poli!/. Upon the fa!ts stipulated ./ the parties it is ad itted that Cati.en had ta9en the vehi!le for a >o/ ride and while the sa e was in his possession he .u ped it a)ainst an ele!tri! post resultin) in da a)es. That a!t is theft within a poli!/ of insuran!e. In a !ivil a!tion for re!over/ on an auto o.ile insuran!e+ the Guestion whether a person usin) a !ertain auto o.ile at the ti e of the a!!ident stole it or not is to .e deter ined ./ a fair preponderan!e of eviden!e and not ./ the rule of !ri inal law reGuirin) proof of )uilt .e/ond reasona.le dou.t C&illa!orta v. Insuran!e Co ission+ #11 SCRA 43, "#281$D. 0esides+ there is no provision in the poli!/ reGuirin) prior !ri inal !onvi!tion for theft. RE,OL-TION This !ase for RInde nit/ for Da a)es and Attorne/4s 5eesR was elevated to this Tri.unal ./ the then Court of Appeals on a Guestion of law. The Stipulation of 5a!ts su. itted ./ the parties .efore the Court of 5irst Instan!e of Davao+ 0ran!h I+ in Case 'o. (,82+ reads as follows6>)!6!hanro.les.!o .ph RCO7ES the parties in the a.ove entitled !ase+ throu)h their respe!tive !ounsels and to this ;onora.le Court respe!tfull/ su. it the followin) stipulations of fa!ts6!hanro.#es virtual #aw li.rar/ W#. That plaintiff is a reli)ious !orporation dul/ or)ani@ed and re)istered

under the laws of the =hilippines+ while defendant is also a do esti! !orporation dul/ or)ani@ed and e?istin) under the laws of the =hilippinesE W*. That plaintiff+ havin) an insura.le interest in a Chevrolet Carr/%all+ #255 7odel+ with 7otor 'o. 1(*4((*,*555 and =late 'o. E%,((#, !overed ./ Re)istration Certifi!ate 'o. *88#4# Ri@al+ issued ./ the Davao 7otor &ehi!les Offi!e A)en!/ 'o. *1 and owned ./ Reverend Clinton 0onnel+ insured said vehi!le with the defendant under 5ield en4s Insuran!e Co.+ In!. =rivate Car Co prehensive =oli!/ 'o. ** -l ##1,+ atta!hed hereto as Anne? WA4 to WA%*4 a)ainst loss or da a)e up to the a ount of =5+111.11E W(. That in the latter part of #23#+ throu)h plaintiff4s representative+ Dr. Antonio Ai + the afore entioned Chevrolet Carr/%all was pla!ed at the -ones 7onu ent 7o.il)as Servi!e Station at Davao Cit/+ under the !are of said station4s operator+ Rene Te so that said !arr/%all !ould .e displa/ed as .ein) for sale+ with the understandin) that the latter or an/ of his station .o/s would re!eive a *V !o ission should the/ sell said vehi!le. W4. That on the ni)ht of -anuar/ #8+ #23*+ Ro eo Cati.en one of the .o/s at the afore entioned -ones 7onu ent Servi!e Station and a nephew of the wife of Rene Te who is residin) with the + too9 the afore entioned !hevrolet !arr/%all for a >o/ ride to Toril+ Davao Cit/+ without the prior per ission+ authorit/ or !onsent of either the plaintiff or its representative Dr. Antonio Ai + or of Rene Te+ and on its wa/ .a!9 to Davao Cit/+ said vehi!le+ due to so e e!hani!al defe!t a!!identall/ .u ped an ele!tri! post !ausin) a!tual da a)es valued at =5+5#8.3#. W5. That the issue .efore the ;onora.le Court is whether or not for the da a)e to the a.ove entioned Chevrolet Carr/%all to .e !o pensa.le under the afore entioned 5ield en4s =rivate Car Co prehensive =oli!/ 'o. ** -A ###1,+ there ust .e a prior !ri inal !onvi!tion of Ro eo Cati.en for theft. F;ERE5ORE+ it is respe!tfull/ pra/ed that this ;onora.le Court render >ud) ent on the fa!ts and issues a.ove stipulated after the parties shall have su. itted their respe!tive e oranda.R!ralaw virtua#aw li.rar/

The Trial Court rendered >ud) ent .ased on the fa!ts stipulated and ordered defendant insuran!e !o pan/ to pa/ plaintiff asso!iation the a ount of =5+111.11 as inde nit/ for the da a)e sustained ./ the vehi!le+ =*+111.11 for attorne/4s fees+ and !osts. Dissatisfied+ the insuran!e !o pan/ interposed an appeal to the Appellate Court+ do!9eted as CA%G.R. 'o. ((54(%R+ whi!h as a.ove stated+ elevated it to this instan!e.!hanro.les.!o 6!ralaw6red Fe affir . The Co prehensive =oli!/ issued ./ the insuran!e !o pan/ in!ludes loss of or da a)e to the otor vehi!le ./ R.ur)lar/ . . . or theft.R It is settled that the a!t of Cati.en in ta9in) the vehi!le for a >o/ ride to Toril+ Davao Cit/+ !onstitutes theft within the eanin) of the insuran!e poli!/ and that re!over/ for da a)e to the !ar is not .arred ./ the ille)al use of the !ar ./ one of the station .o/s. R. . . where a !ar is ad ittedl/ as in this !ase unlawfull/ and wron)full/ ta9en ./ so e people+ .e the/ e plo/ees of the !ar shop or not to who it had .een entrusted+ and ta9en on a lon) trip to 7ontal.an without the owner4s !onsent or 9nowled)e+ su!h ta9in) !onstitutes or parta9es of the nature of theft as defined in Arti!le (18 of the Revised =enal Code+ vi@.4CFDho are lia.le for theft. T Theft is !o itted ./ an/ person who+ with intent to )ain .ut without violen!e a)ainst or inti idation of persons nor for!e upon thin)s+ shall ta9e personal propert/ of another without the latter4s !onsent+4 for purposes of re!overin) the loss under the poli!/ in Guestion.R!ralaw virtua#aw li.rar/ R. . . the Court sustains as the .etter view that whi!h holds that when a person+ either with the o.>e!t of )oin) to a !ertain pla!e+ or learnin) how to drive+ or en>o/in) a free ride+ ta9es possession of a vehi!le .elon)in) to another+ without the !onsent of its owner+ he is )uilt/ of theft .e!ause ./ ta9in) possession of the personal propert/ .elon)in) to another and usin) it+ his intent to )ain is evident sin!e he derives therefro utilit/+ satisfa!tion+ en>o/ ent and pleasure. -usti!e Ra on C. AGuino !ites in his wor9 Groi@ard who holds that the use of a thin) !onstitutes )ain and Cuello Calon who !alls it Whurto de uso.4 # There need .e no prior !onvi!tion for the !ri e of theft to a9e an insurer

lia.le under the theft !lause of the poli!/. Upon the fa!ts stipulated ./ the parties it is ad itted that Cati.en had ta9en the vehi!le for a >o/ ride and while the sa e was in his possession he .u ped it a)ainst an ele!tri! post resultin) in da a)es. That a!t is theft within a poli!/ of insuran!e. In a !ivil a!tion for re!over/ on an auto o.ile insuran!e+ the Guestion whether a person usin) a !ertain auto o.ile at the ti e of the a!!ident stole it or not is to .e deter ined ./ a fair preponderan!e of eviden!e and not ./ the rule of !ri inal law reGuirin) proof of )uilt .e/ond reasona.le dou.t. * 0esides+ there is no provision in the poli!/ reGuirin) prior !ri inal !onvi!tion for theft.!hanro.lesvirtualawli.rar/ ACCORDI'GAK+ findin) no error in the >ud) ent appealed fro + the sa e is here./ affir ed. Costs a)ainst defendant 5ield en4s Insuran!e Co.+ In!.