Republic of the Philippines

Supreme Court

Manila

SECOND DIVISION

FILCAR TRANSPORT SERVICES,

Petitioner,

- versus -

JOSE A. ESPINAS,

Respondent.

G.R. No. 174156

Present:

CARPIO, J., Chairperson,

BRION,

PEREZ,

SERENO, and

REYES, JJ.

Promulgated:

June 20, 2012

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DECISION

BRION, J.:

We resolve the present petition for review on certiorari[1] filed by petitioner Filcar Transport Services (Filcar), challenging the decision[2] and the resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 86603.

The facts of the case, gathered from the records, are briefly summarized below.

On November 22, 1998, at around 6:30 p.m., respondent Jose A. Espinas was driving his car along Leon Guinto Street in Manila. Upon reaching the intersection of Leon Guinto and President Quirino Streets, Espinas stopped his car. When the signal light turned green, he proceeded to cross the intersection. He was already in the middle of the intersection when another car, traversing President Quirino Street and going to Roxas Boulevard, suddenly hit and bumped his car. As a result of the impact, Espinas car turned clockwise. The other car escaped from the scene of the incident, but Espinas was able to get its plate number.

After verifying with the Land Transportation Office, Espinas learned that the owner of the other car, with plate number UCF-545, is Filcar.

Espinas sent several letters to Filcar and to its President and General Manager Carmen Flor, demanding payment for the damages sustained by his car. On May 31, 2001, Espinas filed a complaint for damages against Filcar and Carmen Flor before the Metropolitan Trial Court (MeTC) of Manila, and the case was raffled to Branch 13. In the complaint, Espinas demanded that Filcar and Carmen Flor pay the amount of P97,910.00, representing actual damages sustained by his car.

Filcar argued that while it is the registered owner of the car that hit and bumped Espinas car, the car was assigned to its Corporate Secretary Atty. Candido Flor, the husband of Carmen Flor. Filcar further stated that when the incident happened, the car was being driven by Atty. Flors personal driver, Timoteo Floresca.

Atty. Flor, for his part, alleged that when the incident occurred, he was attending a birthday celebration at a nearby hotel, and it was only later that night when he noticed a small dent on and the cracked signal light of the car. On seeing the dent and the crack, Atty. Flor allegedly asked Floresca what happened, and the driver replied that it was a result of a hit and run while the car was parked in front of Bogota on Pedro Gil Avenue, Manila.

Filcar denied any liability to Espinas and claimed that the incident was not due to its fault or negligence since Floresca was not its employee but that of Atty. Flor. Filcar and Carmen Flor both said that they always exercised the due diligence required of a good father of a family in leasing or assigning their vehicles to third parties.

The MeTC Decision

The MeTC, in its decision dated January 20, 2004,[4] ruled in favor of Espinas, and ordered Filcar and Carmen Flor, jointly and severally, to pay Espinas P97,910.00 as actual damages, representing the cost of repair, with interest at 6% per annum from the date the complaint was filed; P50,000.00 as moral damages; P20,000.00 as exemplary damages; and P20,000.00 as attorneys fees. The MeTC ruled that Filcar, as the registered owner of the vehicle, is primarily responsible for damages resulting from the vehicles operation.

The RTC Decision

The Regional Trial Court (RTC) of Manila, Branch 20, in the exercise of its appellate jurisdiction, affirmed the MeTC decision.[5] The RTC ruled that Filcar failed to prove that Floresca was not its employee as no proof was adduced that Floresca was personally hired by Atty. Flor. The RTC agreed with the MeTC that the registered owner of a vehicle is directly and primarily liable for the damages sustained by third persons as a consequence of the negligent or careless operation of a vehicle registered in its name. The RTC added that the victim of recklessness on the public highways is without means to discover or identify the person actually causing the injury or damage. Thus, the only recourse is to determine the owner, through the vehicles registration, and to hold him responsible for the damages.

The CA Decision

On appeal, the CA partly granted the petition in CA-G.R. SP No. 86603; it modified the RTC decision by ruling that Carmen Flor, President and General Manager of Filcar, is not personally liable to Espinas. The appellate court pointed out that, subject to recognized exceptions, the liability of a corporation is not the liability of its corporate officers because a corporate entity subject to well-recognized exceptions has a separate and distinct personality from its officers and shareholders. Since the circumstances in the case at bar do not fall under the exceptions recognized by law, the CA concluded that the liability for damages cannot attach to Carmen Flor.

The CA, however, affirmed the liability of Filcar to pay Espinas damages. According to the CA, even assuming that there had been no employer-employee relationship between Filcar and the driver of the vehicle, Floresca, the former can be held liable under the registered owner rule.

The CA relied on the rule that the registered owner of a vehicle is directly and primarily responsible to the public and to third persons while the vehicle is being operated. Citing Erezo, et al. v. Jepte,[6] the CA said that the rationale behind the rule is to avoid circumstances where vehicles running on public highways cause accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. In Erezo, the Court said that the main aim of motor vehicle registration is to identify the owner, so that if a vehicle causes damage or injury to pedestrians or other vehicles, responsibility can be traced to a definite individual and that individual is the registered owner of the vehicle.[7]

The CA did not accept Filcars argument that it cannot be held liable for damages because the driver of the vehicle was not its employee. In so ruling, the CA cited the case of Villanueva v. Domingo[8] where the Court said that the question of whether the driver was authorized by the actual owner is irrelevant in determining the primary and direct responsibility of the registered owner of a vehicle for accidents, injuries and deaths caused by the operation of his vehicle.

Filcar filed a motion for reconsideration which the CA denied in its Resolution dated July 6, 2006.

Hence, the present petition.

The Issue

Simply stated, the issue for the consideration of this Court is: whether Filcar, as registered owner of the motor vehicle which figured in an accident, may be held liable for the damages caused to Espinas.

Our Ruling

The petition is without merit.

Filcar, as registered owner, is deemed the employer of the driver, Floresca, and is thus vicariously liable under Article 2176 in relation with Article 2180 of the Civil Code

It is undisputed that Filcar is the registered owner of the motor vehicle which hit and caused damage to Espinas car; and it is on the basis of this fact that we hold Filcar primarily and directly liable to Espinas for damages.

As a general rule, one is only responsible for his own act or omission.[9] Thus, a person will generally be held liable only for the torts committed by himself and not by another. This general rule is laid down in Article 2176 of the Civil Code, which provides to wit:

Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

Based on the above-cited article, the obligation to indemnify another for damage caused by ones act or omission is imposed upon the tortfeasor himself, i.e., the person who committed the negligent act or omission. The law, however, provides for exceptions when it makes certain persons liable for the act or omission of another.

One exception is an employer who is made vicariously liable for the tort committed by his employee. Article 2180 of the Civil Code states:

Article 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible.

x x x x

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

x x x x

The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.

Under Article 2176, in relation with Article 2180, of the Civil Code, an action predicated on an employees act or omission may be instituted against the employer who is held liable for the negligent act or omission committed by his employee.

Although the employer is not the actual tortfeasor, the law makes him vicariously liable on the basis of the civil law principle of pater familias for failure to exercise due care and vigilance over the acts of ones subordinates to prevent damage to another.[10] In the last paragraph of Article 2180 of the Civil Code, the employer may invoke the defense that he observed all the diligence of a good father of a family to prevent damage.

As its core defense, Filcar contends that Article 2176, in relation with Article 2180, of the Civil Code is inapplicable because it presupposes the existence of an employer-employee relationship. According to Filcar, it cannot be held liable under the subject provisions because the driver of its vehicle at the time of the accident, Floresca, is not its employee but that of its Corporate Secretary, Atty. Flor.

We cannot agree. It is well settled that in case of motor vehicle mishaps, the registered owner of the motor vehicle is considered as the employer of the tortfeasor-driver, and is made primarily liable for the tort committed by the latter under Article 2176, in relation with Article 2180, of the Civil Code.

In Equitable Leasing Corporation v. Suyom,[11] we ruled that in so far as third persons are concerned, the registered owner of the motor vehicle is the employer of the negligent driver, and the actual employer is considered merely as an agent of such owner.

In that case, a tractor registered in the name of Equitable Leasing Corporation (Equitable) figured in an accident, killing and seriously injuring several persons. As part of its defense, Equitable claimed that the tractor was initially leased to Mr. Edwin Lim under a Lease Agreement, which agreement has been overtaken by a Deed of Sale entered into by Equitable and Ecatine Corporation (Ecatine). Equitable argued that it cannot be held liable for damages because the tractor had already been sold to Ecatine at the time of the accident and the negligent driver was not its employee but of Ecatine.

In upholding the liability of Equitable, as registered owner of the tractor, this Court said that regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation.[12] The Court further stated that [i]n contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent.[13] Thus, Equitable, as the registered owner of the tractor, was considered under the law on quasi delict to be the employer of the driver, Raul Tutor; Ecatine, Tutors actual employer, was deemed merely as an agent of Equitable.

Thus, it is clear that for the purpose of holding the registered owner of the motor vehicle primarily and directly liable for damages under Article 2176, in relation with Article 2180, of the Civil Code, the existence of an employer-employee relationship, as it is understood in labor relations law, is not required. It is sufficient to establish that Filcar is the registered owner of the motor vehicle causing damage in order that it may be held vicariously liable under Article 2180 of the Civil Code.

Rationale for holding the registered owner vicariously liable

The rationale for the rule that a registered owner is vicariously liable for damages caused by the operation of his motor vehicle is explained by the principle behind motor vehicle registration, which has been discussed by this Court in Erezo, and cited by the CA in its decision:

The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner. Instances are numerous where vehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways. [emphasis ours]

Thus, whether there is an employer-employee relationship between the registered owner and the driver is irrelevant in determining the liability of the registered owner who the law holds primarily and directly responsible for any accident, injury or death caused by the operation of the vehicle in the streets and highways.

As explained by this Court in Erezo, the general public policy involved in motor vehicle registration is the protection of innocent third persons who may have no means of identifying public road malefactors and, therefore, would find it difficult if not impossible to seek redress for damages they may sustain in accidents resulting in deaths, injuries and other damages; by fixing the person held primarily and directly liable for the damages sustained by victims of road mishaps, the law ensures that relief will always be available to them.

To identify the person primarily and directly responsible for the damages would also prevent a situation where a registered owner of a motor vehicle can easily escape liability by passing on the blame to another who may have no means to answer for the damages caused, thereby defeating the claims of victims of road accidents. We take note that some motor vehicles running on our roads are driven not by their registered owners, but by employed drivers who, in most instances, do not have the financial means to pay for the damages caused in case of accidents.

These same principles apply by analogy to the case at bar. Filcar should not be permitted to evade its liability for damages by conveniently passing on the blame to another party; in this case, its Corporate Secretary, Atty. Flor and his alleged driver, Floresca. Following our reasoning in Equitable, the agreement between Filcar and Atty. Flor to assign the motor vehicle to the latter does not bind Espinas who was not a party to and has no knowledge of the agreement, and whose only recourse is to the motor vehicle registration.

Neither can Filcar use the defenses available under Article 2180 of the Civil Code - that the employee acts beyond the scope of his assigned task or that it exercised the due diligence of a good father of a family to prevent damage - because the motor vehicle registration law, to a certain extent, modified Article 2180 of the Civil Code by making these defenses unavailable to the registered owner of the motor vehicle. Thus, for as long as Filcar is the registered owner of the car involved in the vehicular accident, it could not escape primary liability for the damages caused to Espinas.

The public interest involved in this case must not be underestimated. Road safety is one of the most common problems that must be addressed in this country. We are not unaware of news of road accidents involving reckless drivers victimizing our citizens. Just recently, such pervasive recklessness among most drivers took the life of a professor of our state university.[14] What is most disturbing is that our existing laws do not seem to deter these road malefactors from committing acts of recklessness.

We understand that the solution to the problem does not stop with legislation. An effective administration and enforcement of the laws must be ensured to reinforce discipline among drivers and to remind owners of motor vehicles to exercise due diligence and vigilance over the acts of their drivers to prevent damage to others.

Thus, whether the driver of the motor vehicle, Floresca, is an employee of Filcar is irrelevant in arriving at the conclusion that Filcar is primarily and directly liable for the damages sustained by Espinas. While Republic Act No. 4136 or the Land Transportation and Traffic Code does not contain any provision on the liability of registered owners in case of motor vehicle mishaps, Article 2176, in relation with Article 2180, of the Civil Code imposes an obligation upon Filcar, as registered owner, to answer for the damages caused to Espinas car. This interpretation is consistent with the strong public policy of maintaining road safety, thereby reinforcing the aim of the State to promote the responsible operation of motor vehicles by its citizens.

This does not mean, however, that Filcar is left without any recourse against the actual employer of the driver and the driver himself. Under the civil law principle of unjust enrichment, the registered owner of the motor vehicle has a right to be indemnified by the actual employer of the driver of the amount that he may be required to pay as damages for the injury caused to another.

The set-up may be inconvenient for the registered owner of the motor vehicle, but the inconvenience cannot outweigh the more important public policy being advanced by the law in this case which is the protection of innocent persons who may be victims of reckless drivers and irresponsible motor vehicle owners.

WHEREFORE, the petition is DENIED. The decision dated February 16, 2006 and the resolution dated July 6, 2006 of the Court of Appeals are AFFIRMED. Costs against petitioner Filcar Transport Services.

SO ORDERED.

ARTURO D. BRION

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Senior Associate Justice

Chairperson

JOSE PORTUGAL PEREZ

Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

BIENVENIDO L. REYES

Associate Justice

C E R T I F I C A T I O N

I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO

Senior Associate Justice

(Per Section 12, R.A. 296,

The Judiciary Act of 1948, as amended)

[1] Filed under Rule 45 of the Revised Rules of Court; rollo, pp. 10-19.

[2] Dated February 16, 2006; penned by Associate Justice Rosalinda Asuncion-Vicente, and concurred in by Associate Justices Edgardo P. Cruz and Sesinando E. Villon. Id. at 21-28.

[9] Hector S. de Leon and Hector M. de Leon, Jr., Comments and Cases on Torts and Damages (2004), p. 329.