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Caravan Travel and Tours International, Inc. v.

10 February 2016 J. Leonen
Pet: Caravan Travel and Tours International, Inc.
Res: Ermilinda Abejar
Torts and Damages subtopic: Registered owner of vehicle

Doctrine: Facts:
- The plaintiff may first prove the ERs ownership of the - 13 July 2000: R was walking along the west-bound
vehicle involved in a mishap by presenting the lane of Sampaguita St., United Paranaque Subd. IV,
vehicles registration in evidence. Thereafter, a Paranaque City. An L-300 van was traveling along
disputable presumption that the requirements for an the east-bound lane opposite R. To avoid an incoming
ERs liability under Art. 2180, CC have been satisfied vehicle, the van swerved to its left and hit R. E went
will arise. The burden of evidence then shifts to the to her aid and loaded her in the back of the van and
defendant to show that no liability under Art. 2180 told the driver, B, to bring R to the hospital. Instead,
has ensued. This case harmonizes the requirement of B left the van parked inside a nearby subdivision
Art. 2180, in relation to Art. 2176, and the so-called (with R still in the van). Fortunately, an unidentified
registered-owner rule civilian helped and drove R to the hospital.
- It is imperative to apply the registered-owner rule in a - C, a corporation engaged in organizing travels and
manner that harmonizes it with Arts. 2176 and 2180, tours, was the registered owner of the van. B was C's
CC. Rules must be construed in a manner that will EE and was assigned to drive the van as its service
harmonize them with other rules so as to form a driver.
uniform and consistent system of jurisprudenceArt. - C shouldered the hospital expenses of R, but R died
2180 should defer to the registered-owner rule, but it two days after the accident.
was never stated that Art. 2180 should be completely - A, Rs paternal aunt and the person who raised her
abandoned. since R was 9 y.o., filed a Complaint for damages
Legend: against B and C in RTC Paranaque. A alleged that B
R - Reyes, the victim was an EE of C and that C is the registered owner of
E - Espinosa, the witness the van.
A - Abejar, res. and aunt of R - Summons could not be served on B, so A moved to
B - Bautista, the driver of the van drop B as a defendantRTC granted.
C - Caravan, pet. and employer of B - RTC found that B was grossly negligent in driving the
EE - Employee vehicle. RTC awarded damages in favor of A1 . Cs
ER - Employer MR was denied.
RO - Registered-owner - CA affirmed with modification RTCs decision2. Cs
ROR - Registered-owner Rule MR was denied. Hence this petition for review on
certiorari (on CA decision).

1 WHEREFORE, considering that the [respondent] was able to provide by preponderance of evidence her cause of action against the defendants,
judgment is hereby rendered ordering defendants JIMMY BAUTISTA and CARAVAN TRAVEL and TOURS[,] INC., to jointly and solidarity pay the
plaintiff, the following, to wit:
1. The amount of P35,000.00 representing actual damages;
2. The amount of P300,000.00 as moral damages;
3. The amount of P30,000.00 as exemplary damages;
4. The amount of P50,000.00 as and by way of attorneys fees; and
5. The cost of suit. SO ORDERED

WHEREFORE, premises considered, the instant appeal is DENIED for lack of merit. The assailed Decision dated 31 July 2003 and Order dated 20
October 2003 of the Regional Trial Court, City of Para[]aque, Branch 258, in Civil Case No. 00-0447 are AFFIRMED with the following
1. Moral Damages is REDUCED to Php200,000.00;
2. Death Indemnity of Php50,000.00 is awarded;
3. The Php35,000.00 actual damages, Php200,000.00 moral damages, Php30,000.00 exemplary damages and Php50,000.00 attorneys fees
shall earn interest at the rate of 6% per annum computed from 31 July 2003, the date of the [Regional Trial Courts] decision; and upon finality of
this Decision, all the amounts due shall earn interest at the rate of 12% per annum, in lieu of 6% per annum, until full payment; and
4. The Php50,000.00 death indemnity shall earn interest at the rate of 6% per annum computed from the date of promulgation of this Decision; and
upon finality of this Decision, the amount due shall earn interest at the rate of 12% per annum, in lieu of 6% per annum, until full payment.
Costs against [Caravan]. SO ORDERED.
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- Cs Arguments: I. Yes, A is a real party-in-interest.
A has no personality to bring this suit because she - A exercised substitute parental authority and suffered
isnt a real party-in-interest actual loss
A doesnt exercise legal or substitute parental - A properly filed an action based on quasi-delict and
authority, nor is she the judicially appointed she is a real party-in-interest, which is defined in Sec.
guardian of or only living relative of R, nor the 2, Rule 3, 1997 Rules of CivPro which states that xxx
executor or administrator of the estate of R. the party who stands to be benefited or injured by the
Only the victim or the heirs can enforce an action judgement in the suit, or the party entitled to the
on culpa aquiliana (such as As action for avails of the suit. Unless otherwise authorized by law
damages). or these Rules, every action must be prosecuted or
A didnt offer documentary or testimonial evidence defended in the name of the real party-in-interest.
to prove that B acted within the scope of his - The Court also looked at Art. 216 and 233, FC to
assigned tasks when the accident occurred. identify persons who exercise substitute parental
- According to C, Bs tasks only pertained to the authority.
transport of company personnel or products - Rs parents and paternal grandparents are deceased,
C argues it exercise the diligence of a good father and the whereabouts of her maternal grandparents
of a family in the selection and supervision of its are unknown. There is no record of R having siblings.
EEs. A took custody of R when R was a child and A
A should not have been awarded damages, and assumed the role of parent and exercised parental
questions the Certificate provided by A as proof of authority over R.
expenses since its signatory (Julian Pealoza) was - Consistent with Art. 220, FC, A supported Rs
not present in court and that C was denied the education and provided for her personal needsA
right to cross-examine him. And that the Certificate treated R as her own daughter.
constitutes hearsay. - As right to proceed against against C is based on
C contends that based on Art. 2206(3), CC A isn't two grounds:
entitled to moral damages because C acted in A suffered actual personal loss.
good faith. A is capacitated to do what Rs actual parents
That C should not be held solidarity liable with B would have been to do.
since B was already dropped as a party. - Although R was already 18 y.o. when she died (thus
- As Arguments: she had already reached the age of majority and
C failed to provide proof that it exercised the was emancipated), and parental authority is
requisite diligence in the selection and supervision terminated upon emancipation, A continued to
of B. support and care for Rthe relationship remained the
CA ruling on damages should be upheld same. The anguish and damage caused to [A] was
Since C is the registered owner of the van, it is by [Rs] death was no different because of [Rs]
directly, primarily, and solidarity liable for the emancipation
tortious acts of B. - In any case, termination of As parental authority is
not an insurmountable legal bar that precludes the
Issues: filing of her Complaint.
I. WON A is a real party-in-interest who may bring an - The Court has held that Art. 1902, Old CC/Art. 2176,
action for damages against C on account of Rs New CC is broad enough to accommodate even
deathYES. plaintiffs who are not relatives of the deceased.
II. WON C should be liable as an ER, pursuant
to Art. 2180, CCYES.


Ratio is discussed below.

Important points are underscored.

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II. Yes, C is liable. - In Castilex v. Vasquez, the Court absolved Castilex of
- As Complaint is anchored on an ERs liability for liability reasoning that it was incumbent upon the
quasi-delict provided in Art. 2180 in relation to Art. plaintiff to prove that the negligent EE was acting
2176, CC. within the scope of his assigned tasks, which Vasquez
- It was not fatal to As cause that she herself did not failed to do. The Court outlined the process necessary
adduce proof that B acted within the scope of his for an ER to be held liable for the acts of its EE:
authority. It was sufficient that A proved that C was Under the 5th par. of Art. 2180, WON engaged in
the registered owner of the van that hit R. any business or industry, an ER is liable for the
- According to the Court, two rules must be considered: torts committed by the EE within the scope of his
1. Art. 2180s specification that [ERs] shall be assigned tasks. It is necessary to establish the ER-
liable for the damages caused by their [EEs] EE relationship and once this is done, the plaintiff
acting within the scope of their assigned must show that the EE was acting within the scope
tasks[.] of his assigned task when the tort was committed.
2. The operation of the registered-owner rule - Aguilar, Sr. v. Commercial Savings Bank4, recognized
(ROR) that registered owners are liable for the seeming conflict between Art. 2180 and the ROR
death or injuries caused by the operation of and applied the latter. The SC here reiterated the
their vehicles. pronouncements in Erezo v. Jepte in ruling that the
- These rules appear to be in conflict when it comes to bank, as the RO of the vehicle, was primarily liable to
cases in which the ER is also the registered owner of the plaintiff. The SC here concluded that the LC erred
the vehicle. when it concluded that the bank was not liable simply
- Art. 2180 requires proof of two things: because (a) petitioner did not prove that Borja was
1. An ER-EE relationship between the driver and acting as the banks vice president at the time of the
owner; and accident; and (b) Borja had, according to respondent
2. That the driver acted within the scope of his/her bank, already bought the car at the time of the
assigned tasks. mishap. For as long as the respondent bank remained
- On the other hand, applying the ROR only requires the registered owner of the car involved in the
the plaintiff to prove that defendant-ER is the vehicular accident, it could not escape primary
registered-owner (RO) of the vehicle. liability.
- ROR can be seen as early as in the case of Erezo, et - Preference for the ROR became more pronounced in
al. v. Jepte (1957) where this Court explained that Del Carmen, Jr. v. Bacoy which reiterated Aguilar,
the registration of motor vehicles, as required by Sec. stating that [d]espite Art. 2180, we still held the
5(a), RA 4136 (Land Transportation and Traffic bank liable for damages for the accident as said
Code), was necessary not to make said registration provision should defer to the settled doctrine
the operative act by which ownership in vehicles is concerning accidents involving registered motor
transferred,but to permit the use and operation of vehicles
the vehicle upon any public highway[.] Its main - Filcar Transport Services v. Espinas stated that the RO
aimis to identify the owner so that if any accident of a vehicle can no longer use the defenses found in
happens, or that any damage or injury is caused by Art. 2180.
the vehicle on the public highways, responsibility - In Mendoza v. Sps. Gomez the Court said: However,
therefor can be fixed on a definite individual, the Aguilar, Sr., Del Carmen, Filcar, and Mendoza
registered owner. should not be taken to mean that Art. 2180, CC
- Erezo v. Jepte (notwithstanding Castilex v. Vasquez3) should be completely discarded in cases where the
relied on Art. 2180, CC even though the ER was also regist ered-owner r ule finds application. As
the RO of the vehicle. The ROR was not mentioned. acknowledged in Filcar, there is no categorical

3 In Castilex Industrial Corp. v. Vasquez, Jr. Abad was a manager of Castilex and Castilex was also the registered owner of a Toyota Hi-Lux. While
Abad was driving the vehicle, it collided with a motorcycle driven by Vasquez. Vasquez died a few days after, and his parents filed a case for
damages against Abad and Castilex. Castilex denied liability, arguing that And was acting in his private capacity at the time of the accident. Here,
since there was no evidence that Abad was acting within the scope of the functions entrusted to his, Castilex had no duty to show it exercised the
diligence of a good father of a family in providing Abad with a service vehicle.

Here, a Mitsubishi Lancer registered under the bank and driven by the banks assistant VP Borja hit and killed Aguilar, Jr. His father, Aguilar, Sr.,
filed a case for damages against Borja and the bank. RTC found the bank solidarity liable with Borja. However, the CA disagreed and dismissed the
complaint against the bank reasoning that Art. 2180, CC requires the plaintiff to prove that at the time of the accident, the EE was acting within the
scope of his assigned taskCA found no evidence that Borja was acting as the banks EE at the time. CA ruling was reversed by the SC.
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statutory pronouncement in the Land Transportation positive evidence to show that B was acting in his
and Traffic Code (LTTC) stipulating the liability of a private capacity at the time of the incident;
registered owner. The source of a registered owners 3. C failed to prove that it exercised the requisite
liability is not a distinct statutory provision, but diligence. C contented itself with Bs submission of
remains to be Arts. 2176 and 2180,CC a nonprofessional drivers license6.
- It is imperative to apply the ROR in a manner - Employing a person holding a nonprofessional
drivers license to operate anothers motor vehicle
that harmonizes it with Arts. 2176 and 2180,
violates Sec. 24, LTTC7 C did not only fail to exercise
CC. Rules must be construed in a manner that due diligence in selecting B, it also committed an
will harmonize them with other rules so as to actual violation of law.
form a uniform and consistent system of - Cs act of providing copies of memoranda and
company rules was insufficient because they failed to
jurisprudenceArt. 2180 should defer to the
prove actual compliance8
ROR, but it was never stated that Art. 2180 - For failing to overturn the presumption that the
should be completely abandoned. requirements of Article 2180 have been satisfied,
- Appropriate Approach: Where both apply petitioner must be held liable.
1. Plaintiff must establish that the ER is the RO of the
vehicle Side matters:
2. There then arises a disputable presumption that - Cs argument that it should be excused from liability
the requirements of Art. 2180 have been proven because B was already dropped as a party is equally
and as a consequence, the burden of proof shifts unmeritorious. The liability imposed on the registered
to the defendant to show that no liability under owner is direct and primary. It does not depend on
Art. 2180 has arisen. the inclusion of the negligent driver in the action.
- This disputable presumption, insofar as the RO in Otherwise, it would render impotent the rationale
relation to the actual driver is concerned, recognizes of the motor registration law in fixing liability on a
that between the owner and the victim, it is the former definite person.
that should carry the costs of moving forward with the B was not an indispensable part under Sec. 7, Rule
evidence. 3 of the 1997 Rules of CivPro. Rather, he was a
- Registration of the vehicle is accessible to the public. necessary party under Sec. 8.
Recall that A presented a copy of the Certificate of Indispensable Party: parties-in-interest without
Registration of the car that hit Rthis attests to C's whom no final determination can be had of an
ownership of the van, which C did not dispute. actionnon-inclusion is debilitating. The presence of
- In order to satisfactorily overcome the presumption, C indispensable parties is a condition for the exercise
should have: of juridical power and when an indispensable
1. Showed that it had no ER-EE relationship with B party is not before the court, the action should be
2. That B acted outside the scope of his assigned dismissed.
tasks; or Necessary Party: presence is not imperative, and
3. That it exercised the diligence of a good father absence is not debilitating. Nevertheless, it is
of a family in the selection and supervision of B. preferred that they be included in order that relief
- They failed: may be complete.
1. C admitted that B was its EE at the time of the SC: C could have opted to file a cross-claim against
accident; B as its remedy.
2. C was unable to prove that B was acting outside Cs interest and liability is distinct from that of its
the scope of his assigned tasks.5 C presented no driver.

Cs accountant and supervisor Sally Bellidos testimony that she didnt know what B was doing in the area does not affect the presumption.
Evidence must adduced.

Bellido testified that the license of B was nonprofessional and that they allowed him to be a service driver.

7SEC. 24. Use of drivers license and badge.. . .No owner of a motor vehicle shall engage, employ, or hire any person to operate such motor
vehicle, unless the person sought to be employed is a duly licensed professional driver.

MMTC v. CA emphasized the need to prove compliance and not just show issuance of company policies.
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- Regardless of Cs ER-EE relationship with B, liability - Dispositive: WHEREFORE, the Decision of the CA
attaches to C on account of its being the RO of a AFFIRMED with the following MODIFICATIONS: (a)
vehicle that figures in a mishap. actual damages in the amount of P35,000.00 shall
A determination of Cs liability as owner can earn interest at the rate of 6% per annum from the
proceed independently of a consideration of how B time it was judicially or extrajudicially demanded
conducted himself as a driver. While certainly it is f r o m p e t i t i o n e r C a r a va n Tr a ve l a n d To u r s
desirable that a determination of Bs liability be International, Inc. until full satisfaction; (b) moral
made alongside that of the owner of the van he damages, exemplary damages, and attorneys fees
was driving, his non-inclusion in these proceedings shall earn interest at the rate of 6% per annum from
does not absolutely hamper a judicious resolution the date of the RTCs Decision until full satisfaction;
of As plea for relief. and (c) civil indemnity shall earn interest at the rate of
- CA committed no reversible error when it awarded 6% per annum from the date of the CA Decision until
actual damages to A, which was based on the full satisfaction. SO ORDERED.
Certificate issued by Pealoza showing that A paid
P35k for funeral expenses. The Certificate was not
Separate Concurring Opinion: J. Brion
hearsay evidence.
Brion: A is a real party-in-interest, not because she
Evidence is hearsay when its probative value is exercised substitute parental authority over R, but
based on the personal knowledge of a person
because she has an interest in claiming actual and
other than the person actually testifying.
exemplary damages from C. Parental authority has
A herself identified the Certificate. She testified that no bearing on ones status as a real party-in-
she incurred funeral expenses amounting to P35k,
interest in a quasi-delict case.
that she paid this amount to Pealoza, and that she
Brion: Courts may also impose exemplar y
was present when Pealoza signed the Certificate.
damages, in addition to compensatory damages, if
A had personal knowledge of the facts sought to the defendant acted with gross negligence. In the
be proved by the Certificate, i.e., that she spent
present case, Bs act of leaving R rather than
P35k for the funeral expenses of R.
bringing her to a hospital amounts to gross
- CA likewise did not err in awarding civil indemnity
and exemplary damages (based on Art. 2206 and
Although J. Brion agrees that C is directly and
2231, CC).
primarily liable for damages as Bs ER and as the
- CA and RTC found B grossly negligent in driving the
vans RO, he discusses the ROR in relation to Arts.
van and concluded that Bs gross negligence was the
2180 and 2176 thus:
proximate cause of Rs death. Negligence and - The Court in Filcar Transport Services v. Espinas
causation are factual issues. Findings of fact, when
ruled that the RO of a vehicle is deemed the ER
established by the TC and affirmed by the CA, are
of the vehicles driver. Thus, the vehicles RO is
binding on this court unless they are patently
vicariously liable for the drivers negligent acts
unsupported by evidence or unless the judgment is
pursuant to Arts. 2176 and 2180, CC. The
grounded on a misapprehension of facts.
vicarious liability remains with the RO even
Neither has C presented evidence disputing the when the vehicle had been sold to another
finding of the LCs. As such, these finding cannot be
person before the accident but the registration
disturbed on appeal.
has not yet been transferred. The Court
- For deaths caused by quasi-delict, the recovery of
emphasized in R. Transport Corporation v. Yu
moral damages is limited to the spouse, legitimate
that the ERs liability for the negligent acts of its
and illegitimate descendants, and ascendants of the
subordinate is direct and primary.
deceased. Persons exercising substitute parental - Based on the foregoing, J. Brion concurs with
authority are to be considered ascendants for the
the ponencias results.
purpose of awarding moral damages.

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