Case Summary (G.R. No. 128705)
Factual Background
On September 8, 1984, at about 11:15 P.M., Conrado Aguilar, Jr., the victim and son of petitioner, and companions had finished a snack along Zapote-Alabang Road and were crossing the road when a Lancer bearing plate no. NNP 349 overtook a passenger jeepney and struck the pedestrians. The Lancer, driven by Ferdinand G. Borja, did not stop. Aguilar, Jr. was thrown against the windshield and was pronounced dead on arrival at Perpetual Help Hospital at Pamplona, Las Piñas. The Lancer was registered in the name of Commercial Savings Bank at the time of the accident.
Trial Court Proceedings
Petitioner filed a civil complaint for damages on July 29, 1985. Borja failed to file a timely answer and was declared in default. At trial, the bank admitted registration of the Lancer in its name. The trial court found Borja negligent and held both defendants jointly and severally liable for Aguilar, Jr.'s death. By decision dated June 14, 1991, the court awarded P18,900 for actual expenses, P50,000 for moral damages, P100,000 for loss of earning capacity, and P20,000 for attorney’s fees, with costs. The trial court also ordered that Borja indemnify the bank for any sums the bank might pay, and it relied on Art. 2180, Civil Code, finding that Borja was an assistant vice-president and that the bank failed to exercise due diligence in employee selection.
Court of Appeals Ruling
The Court of Appeals reversed the trial court insofar as Commercial Savings Bank was concerned and dismissed the complaint against the bank. The appellate court reasoned that the vicarious liability under Art. 2180 required proof that the employee acted on the occasion or by reason of the functions entrusted to him by the employer. The Court of Appeals found no evidence that Borja was acting in his capacity as assistant vice-president at the time of the mishap and therefore excused the bank from liability.
Petition to the Supreme Court and Parties’ Contentions
Petitioner sought review of the Court of Appeals decision, arguing that the bank’s status as the registered owner of the vehicle made it legally liable to third persons for injuries caused by the vehicle and that the existence or absence of an employer-employee relationship was immaterial. Commercial Savings Bank maintained that vicarious liability under Art. 2180 did not attach because Borja acted outside the scope of his employment and in his private capacity; the bank also contended that Borja had already purchased the car on installment and thus the bank was not the true owner at the time.
The Supreme Court’s Analysis
The Supreme Court examined controlling jurisprudence and concluded that the Court of Appeals erred. The Court relied on precedent, including BA Finance Corporation v. Court of Appeals, 215 SCRA 715, and the earlier decision Erezo v. Jepte, 102 Phil. 103, which establish that the registered owner of a motor vehicle is primarily responsible to third persons for deaths, injuries, and damages caused by that vehicle. The Court reiterated the policy that motor vehicle registration exists to identify an owner so that responsibility for accidents on public highways may be fixed, and that allowing a registered owner to escape liability by proving a contrary ownership theory would frustrate that policy. The Court emphasized that a registered owner who has a right of reimbursement from a transferee may pursue indemnity, but that such rights do not absolve the registered owner of primary liability to victims.
Application to the Present Case
Applying the registered-owner doctrine to the facts, the Court found that because Commercial Savings Bank remained the registered owner of the Lancer at the time of the accident, it could not escape primary liability for the death of Conrado Aguilar, Jr. The Court held that the Court of Appeals erred in requiring proof that Borja was performing duties as assistant vice-president at the time and in accepting the bank’s contention that Borja had already bought the car so as to defeat liability.
Disposition
The Supreme Court granted the petition, reversed the Court of Appeals decision
...continue readingCase Syllabus (G.R. No. 128705)
Parties and Procedural Posture
- Petitioner Conrado Aguilar, Sr. filed a complaint for damages in the Regional Trial Court of Makati, Branch 59, on July 29, 1985.
- Respondents Commercial Savings Bank and Ferdinand G. Borja were sued for the death of petitioner’s son sustained in a vehicular accident.
- Ferdinand G. Borja was declared in default by the trial court for failure to answer within the reglementary period.
- The trial court rendered judgment on June 14, 1991, against both defendants and ordered indemnity by Borja to the bank on its cross-claim.
- The Court of Appeals reversed only as to Commercial Savings Bank by decision dated October 16, 1996.
- Petitioner sought review in the Supreme Court by a petition assailing the Court of Appeals’ dismissal of the complaint against the bank.
Key Factual Allegations
- On September 8, 1984 at about 11:15 P.M., a Lancer with plate no. NNP 349 overtook a passenger jeepney on Zapote-Alabang Road and struck Conrado Aguilar, Jr. and companion Nestor Semella.
- The Lancer was driven by Ferdinand G. Borja and was registered in the name of Commercial Savings Bank at the time of the accident.
- The Lancer did not stop after the collision and Conrado Aguilar, Jr. was pronounced dead on arrival at the Perpetual Help Hospital in Pamplona, Las Piñas.
- At trial, Commercial Savings Bank admitted that the Lancer was registered in its name at the time of the incident.
- Petitioner’s counsel introduced evidence to show negligence by Borja in the operation of the vehicle.
Trial Court Proceedings
- The trial court found Borja’s negligence, carelessness, and imprudence to have caused the victim’s death.
- The trial court found Borja to be an assistant vice-president of Commercial Savings Bank at the time of the incident.
- The trial court held Commercial Savings Bank liable under Article 2180 of the Civil Code and for failure to exercise due diligence in selecting employees.
- The trial court awarded P18,900 for actual expenses, P50,000 for moral damages, P100,000 for loss of earning capacity, P20,000 for attorney’s fees, and costs against the defendants.
- The trial court dismissed the bank’s counterclaim for lack of merit and ordered Borja to indemnify the bank for whatever the bank paid pursuant to the judgment.
Court of Appeals Decision
- The Court of Appeals reversed the trial court only insofar as Commercial Savings Bank was concerned and dismissed the complaint against the bank.
- The appellate court held that, before applying Article 2180, petitioner must prove that Borja acted on the occasion or by reason of the functions entrusted to him by the bank.
- The Court of Appeals found no evidence that Borja was acting in his capacity as assistant vice-president at the time of the accident.
- The Court of Appeals therefore concluded that the bank could not be held vicariously liable under Article 2180.
Issues Presented
- The sole issue presented was whether Commercial Savings Bank, as the registered owner of the vehicle, was liable for the death of Conrado Aguilar, Jr..
- The subsidiary factual issue was whether Borja was acting within the scope of his employment at the time of the acc