Case Summary (G.R. No. 124922)
Key Dates
- July 18, 1990: Vehicle entrusted for repair.
- July 21, 1990: Scheduled completion; full payment of ₱1,397.00; initial release delayed due to weak battery.
- July 24, 1990: Vehicle reported carnapped during road test.
- August 31, 1995: Court of Appeals decision dismissing petitioner’s suit.
- June 22, 1998: Supreme Court decision applying the 1987 Constitution.
Applicable Law
- 1987 Philippine Constitution (decision in 1998).
- New Civil Code Articles 1165, 1174, 1262, 1265 (liability for delay, fortuitous events, presumption of fault).
- P.D. 1572 and DTI Ministry Order No. 32 (accreditation and insurance requirements for repair shops).
- 1989 Rules on Evidence, Rule 131, Section 1 (burden of proof).
Factual Background
Petitioner delivered his Nissan pick-up to Broadway Motor Sales on July 18, 1990 for specified repair services and parts replacement, with a guaranteed return date of July 21. Petitioner paid ₱1,397.00 in advance and received a gate pass. On July 21, the shop failed to install a newly purchased battery, rescheduling delivery to July 24. On that morning, the vehicle was reported carnapped during a road test by a shop employee.
Procedural History
At pre-trial, the parties agreed on the vehicle’s acquisition cost (₱332,500.00), accessories value (₱20,000.00), and present new-vehicle value (₱425,000.00). The sole issue was which party should bear the loss and whether the respondent was negligent. The trial court found delay and negligence, awarding petitioner the vehicle’s value, accessories, interest, and attorney’s fees. The Court of Appeals limited its review to negligence (excluding delay) and held the loss a fortuitous event, dismissing the claim.
Issue
Whether a motor-vehicle repair shop is liable for loss of a customer’s vehicle in its custody due to carnapping, and whether carnapping qualifies as a fortuitous event exempting the shop from liability.
Supreme Court Ruling
The Supreme Court reversed the Court of Appeals and reinstated the trial court decision, holding that:
- Delay in performance is intrinsically linked to negligence and may be considered despite pre-trial narrowing of issues.
- Carnapping is not per se a fortuitous event; fault or negligence of the custodian must be excluded through evidence.
- The respondent failed to overcome the presumption of fault under Article 1265, having not presented evidence beyond a police report.
- Under Article 1165, a delinquent obligor remains liable for fortuitous events until delivery. The respondent was already in delay before the loss.
- Article 1174 and Article 1262 impose liability for fortuitous events when the nature of the obligation entails risk assumption. Carnapping is a normal business risk for r
Case Syllabus (G.R. No. 124922)
Facts
- On July 18, 1990, petitioner entrusted his 1988 Nissan pick-up (Plate No. PJK-666) to Broadway Motor Sales Corporation (“private respondent”) for repair and parts supply under an agreed job order.
- Services contracted included: bleed injection pump and nozzles, valve tappet adjustment, oil and filter change, four-wheel brake servicing, accelerator linkage lubrication, air-con belt replacement, and battery replacement.
- Private respondent undertook to return the vehicle fully serviced on July 21, 1990.
- Petitioner paid the P1,397.00 repair bill in full and received a gate pass for July 21 release.
- On July 21, the car’s battery remained weak; petitioner purchased and delivered a new battery himself, but installation was deferred until July 24.
- On the afternoon of July 24, petitioner learned that the vehicle had been carnapped during a private respondent’s road-test along Pedro Gil and Perez Streets, Paco, Manila.
- Private respondent reported the incident to the police; the vehicle and its accessories were never recovered.
Pre-Trial Agreement
- Original cost of Nissan pick-up at purchase: P332,500.00 (excluding accessories).
- Petitioner-installed accessories at purchase: four new tires, mag wheels, stereo speaker, amplifier—valued at P20,000.00.
- Loss occurred approximately two years and five months after purchase.
- Repair service payment of P1,397.00 was made and duly receipted on July 21, 1990.
- Present value of a brand-new, identical vehicle at trial: P425,000.00 (without accessories).
- Sole issue agreed for trial: which party shall bear the loss and whether private respondent was negligent.
Issue Presented
- Can a motor-vehicle repair shop be held liable for loss of a customer’s vehicle in its custody, and if so, under what circumstances?
Trial Court Decision
- Found private respondent guilty of delay in performance of its contractual obligation.
- Held the shop liable for the full value of the lost vehicl