Castilex Industrial Corporation vs. Vasquez, Jr.

An employer is not vicariously liable under Article 2180(5) of the Civil Code for the tortious act of an employee who, at the time of the accident, was using a company-issued vehicle for a personal errand after working hours and not in furtherance of the employer’s business. The mere fact that the employee drives a service vehicle, even if the use constitutes a fringe benefit of his position, does not bring his personal activities within the scope of his assigned tasks.

Romeo So Vasquez, holding only a Student’s Permit to Drive and wearing no helmet, was riding his motorcycle counter-clockwise around Fuente Osmeña Rotunda in Cebu City at about 1:30 to 2:00 a.m. on 28 August 1988. Benjamin Abad, a Production Manager of Castilex Industrial Corporation, drove the company’s Toyota Hi-Lux pick-up out of a parking lot and cut against the traffic flow around the rotunda. The two vehicles collided, causing Vasquez severe injuries; he died on 5 September 1988 at Cebu Doctors’ Hospital. Abad had signed an acknowledgment of responsible party, agreeing to pay all hospital and medical bills.

• The Collision: At approximately 1:30 to 2:00 a.m. on 28 August 1988, Romeo So Vasquez was operating a Honda motorcycle counter-clockwise around Fuente Osmeña Rotunda in Cebu City. He carried only a Student’s Permit to Drive and wore no helmet or goggles. Benjamin Abad, the Production Manager of petitioner Castilex Industrial Corporation, drove a Toyota Hi-Lux pick-up registered to Castilex out of a parking lot and cut directly against the normal rotunda traffic flow toward General Maxilom or Belvic Street. The vehicles collided, causing Vasquez severe injuries.
• Post-Accident Events: Abad stopped, transported Vasquez to Southern Islands Hospital, and later to Cebu Doctors’ Hospital. On 5 September 1988, Vasquez died. While Vasquez was hospitalized, Abad executed an “Acknowledgment of Responsible Party” undertaking to pay all hospital bills, professional fees, and incidental charges.
• Criminal Case: Police investigated and filed a criminal case against Abad, but it was dismissed for failure to prosecute.
• Civil Action and Trial: The deceased’s parents, Vicente Vasquez, Jr. and Luisa So Vasquez, sued Abad and Castilex for damages. Cebu Doctors’ Hospital intervened to collect an unpaid balance of P50,927.83 for medical services. The trial court rendered a decision ordering Abad and Castilex to pay, jointly and solidarily: (a) P8,000.00 burial expenses; (b) P50,000.00 moral damages; (c) P10,000.00 attorney’s fees; (d) P778,752.00 for loss of earning capacity; and (e) to Cebu Doctors’ Hospital, P50,927.83 with 3% monthly interest from 27 July 1989 until fully paid, plus costs.
• Court of Appeals Ruling: On appeal, the appellate court affirmed liability but modified the award. It reduced loss of earning capacity to P214,156.80, cut interest on the hospital bill to 12% per annum from 5 September 1988 until full payment, and clarified that Castilex’s liability was vicarious, not solidary. On reconsideration, it further reduced moral damages to P30,000 due to the victim’s contributory negligence, deleted the attorney’s fees for lack of evidence, and lowered interest on the hospital bill to 6% per annum from 5 September 1988.
• Employee’s Circumstances at the Time of Accident: Abad had rendered overtime work at Castilex’s office in Cabangcalan, Mandaue City. Afterwards, he drove the company-issued pick-up approximately seven kilometers to Goldie’s Restaurant in Fuente Osmeña, Cebu City. According to a sidewalk vendor presented as plaintiffs’ witness, Fuente Osmeña at that hour was a “lively place” where establishments were still open and people were drinking; prostitutes, pimps, and drug addicts frequented the area. Abad took snacks and chatted with friends at the restaurant. The same witness testified that when Abad left the restaurant and the accident occurred, a woman was in the vehicle and cried out “Daddy, Daddy!” Abad was 29 years old at the time.

• Applicable Provision of Article 2180: Petitioner contended that the Court of Appeals erroneously applied the fifth paragraph of Article 2180 of the Civil Code. Since petitioner is engaged in the business of manufacturing and selling furniture, the fourth paragraph — applicable to owners and managers of an establishment or enterprise — should govern.
• Scope of Employment: Petitioner maintained that even if the fifth paragraph were applicable, Abad was a managerial employee driving the company vehicle outside regular working hours for his own personal purposes. The mere fact that the vehicle was company-issued did not render his activity an act within the scope of assigned tasks.
• Burden of Proof: Petitioner argued that the Court of Appeals incorrectly required petitioner to prove that Abad was not acting within the scope of his assigned tasks. The burden of establishing that element of vicarious liability rested upon the plaintiffs.

• Spouses Vasquez — Vicarious Liability under Article 2180(5): Respondents asserted that their son’s death was caused by the negligence of petitioner’s employee who drove a company-issued vehicle while on his way home from overtime work. Because Abad would not have been at the scene had petitioner not required him to work beyond normal hours, petitioner should be held vicariously liable under the fifth paragraph of Article 2180.
• Spouses Vasquez — Alternative Basis under Article 2180(4): Even if the fourth paragraph applied, petitioner could not escape liability because the employee was performing an act connected with his employment.
• Spouses Vasquez — Procedural Defects in the Petition: Respondents contended that the petition did not comply with Section 11, Rule 13 of the 1997 Rules of Civil Procedure for lack of a written explanation why service upon the Court of Appeals was made by registered mail, and with Section 4, Rule 45 for failure to state the dates of expiration of the original reglementary period and the filing of the motion for extension of time.
• Cebu Doctors’ Hospital — Estoppel and Benefit to Employer: Respondent hospital argued that petitioner adopted the evidence presented by Abad and did not refute the records; it was thus estopped from denying liability. Moreover, the employee would not have been at the place and time of the accident had he not been required to render overtime work, which constituted a special benefit to petitioner.

• Procedural Compliance with Rule 13, Section 11: Whether the petition should be dismissed for failure to include a written explanation for service by registered mail upon the Court of Appeals.
• Procedural Compliance with Rule 45, Section 4: Whether the petition omitted material dates, specifically the expiration of the original reglementary period and the filing of the motion for extension.
• Interpretation of Article 2180(5): Whether the fifth paragraph of Article 2180 applies only to employers not engaged in any business or industry.
• Scope of Assigned Task: Whether Abad, a managerial employee driving a company-issued vehicle after completing overtime work and while at a restaurant for personal refreshment, was acting within the scope of his assigned task so as to impose vicarious liability upon Castilex.
• Burden of Proof: Whether the plaintiff or the employer bears the burden of proving that the employee acted within the scope of his assigned task at the time of the tort.

• Procedural Compliance with Rule 13, Section 11: The petition contained the required written explanation on page 28; thus, the mode of service was properly justified and no violation occurred.
• Procedural Compliance with Rule 45, Section 4: The material dates required under Section 4 — date of receipt of the judgment or final order, date of filing of a motion for reconsideration, and date of receipt of the denial — were stated. The rule does not require the dates of expiration of the original reglementary period or the filing of a motion for extension. The petition also indicated, on its first page, the date the motion for extension was filed.
• Interpretation of Article 2180(5): The fifth paragraph applies to all employers, whether or not engaged in business or industry. The phrase “even though the former are not engaged in any business or industry” means that it is not necessary for the employer to be engaged in business or industry to incur liability; it does not limit the provision’s coverage to non-business employers. The fifth paragraph is broader than the fourth, covering negligent acts of employees acting within the scope of their assigned task regardless of whether the employer is in business. The Court of Appeals committed no error in applying it.
• Scope of Assigned Task: Abad was not acting within the scope of his assigned tasks at the time of the accident. The mere fact that he drove a company-issued vehicle did not place his activity within the course of employment. The test, drawn from Filamer Christian Institute v. Intermediate Appellate Court, is whether the act was done in furtherance of the interests of the employer or for the account of the employer at the time of the injury. Abad had finished his overtime work, travelled seven kilometers to a restaurant in an area known for nightlife, took snacks, and socialized with friends well past normal working hours. He was engaged in a personal errand or personal purpose. The use of the service vehicle for personal purposes was a fringe benefit, not a task assigned by the employer. Applying principles from American jurisprudence: (a) driving to or from meals does not ordinarily fall within the scope of employment absent special benefit to the employer, such as reducing time-off to permit more work; (b) traveling to and from work is a personal concern; (c) permissive use of an employer’s vehicle outside regular working hours for the employee’s personal purpose, even with incidental benefit to the employer, does not render the employer vicariously liable. Thus, the Court of Appeals’ conclusion that driving a company-issued vehicle was per se within the manager’s scope of tasks was grounded on speculation and conjecture.
• Burden of Proof: The burden rests on the plaintiff to prove that the employee acted within the scope of his assigned task. The employer need not present evidence of a negative averment. The Latin maxim ei incumbit probatio qui dicit, non qui negat — he who asserts, not he who denies, must prove — applies. Since the plaintiffs failed to establish that Abad was acting within his assigned tasks, Castilex had no duty to demonstrate diligence in the selection and supervision of the employee.

• Distinction between Fourth and Fifth Paragraphs of Article 2180 — The fourth paragraph applies to owners and managers of an establishment or enterprise and covers negligent acts committed “in the service of the branches” or “on the occasion of their functions.” The fifth paragraph applies to all employers, whether or not engaged in business or industry, and encompasses negligent acts “within the scope of the assigned task.” The fifth paragraph expands employer coverage and the range of covered acts; an employer may be liable for an employee’s negligence even if not committed in the service of the branches or on the occasion of the employee’s functions, so long as the employee acted within the scope of his assigned task.
• “Acting Within the Scope of Assigned Task” Defined — An act is within the scope of an employee’s assigned task if it is done in furtherance of the employer’s interests or for the account of the employer at the time of the infliction of the injury (Filamer Christian Institute v. IAC). The mere fact that an employee uses a company-issued vehicle does not automatically bring his activity within this scope.
• Employer’s Vicarious Liability for Employee’s Use of Motor Vehicle — Operating Rules — (1) An employee using the employer’s vehicle to go to or from meals is not ordinarily acting within the scope of employment absent evidence of a special business benefit, such as enabling the employee to reduce time-off and devote more time to duties. (2) Traveling to and from the place of work is generally a personal concern; the employer is not liable unless a “special errand” or “roving commission” applies — and even then, liability ceases when the employee deviates from the direct route for a personal errand. (3) Permissive use of an employer’s vehicle outside regular working hours for personal purposes, even with incidental benefit to the employer, does not impose vicarious liability on the employer for the employee’s negligent operation.
• Burden of Proof in Vicarious Liability under Article 2180(5) — To hold an employer liable, the plaintiff must first establish the employer-employee relationship and that the employee was acting within the scope of his assigned task when the tort was committed. The employer does not bear the burden of proving the negative; the employer’s defense of due diligence in selection and supervision becomes relevant only after the plaintiff discharges his initial burden.

• “The phrase ‘even though the former are not engaged in any business or industry’ found in the fifth paragraph should be interpreted to mean that it is not necessary for the employer to be engaged in any business or industry to be liable for the negligence of his employee who is acting within the scope of his assigned task.”
• “Acts done within the scope of the employee’s assigned tasks includes ‘any act done by an employee in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damages.’”
• “The mere fact that ABAD was using a service vehicle at the time of the injurious incident is not of itself sufficient to charge petitioner with liability for the negligent operation of said vehicle unless it appears that he was operating the vehicle within the course or scope of his employment.”
• “Ei incumbit probatio qui dicit, non qui negat (He who asserts, not he who denies, must prove). The Court has consistently applied the ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner facts which he bases his claim, the defendant is under no obligation to prove his exception or defense.”

• Filamer Christian Institute v. Intermediate Appellate Court, 212 SCRA 637 (1992) — Followed as controlling Philippine authority defining “acts within the scope of assigned tasks” as those done in furtherance of the employer’s interests.
• Martin v. Court of Appeals, 205 SCRA 591 (1992); Metro Manila Transit Corp. v. Court of Appeals, 223 SCRA 521 (1993) — Cited for the elements of vicarious liability under Article 2180(5): employer-employee relationship, and employee acting within scope of assigned task; employer’s defense of due diligence arises only after these are proved.
• Belen v. Belen, 13 Phil. 202 (1909) — Relied upon for the principle that the party asserting a claim bears the burden of proof; the defendant need not prove a negative defense.
• Lanuzo v. Ping, 100 SCRA 205 (1980); Layugan v. Intermediate Appellate Court, 167 SCRA 363 (1988); Pacific Banking Corporation v. Court of Appeals, 173 SCRA 102 (1989) — Cited as examples where the Supreme Court applied Article 2180(5) to employers engaged in business or industry (truck operators, banks), rejecting the argument that the fifth paragraph applies only to non-business employers.

• Article 2180, paragraphs 4 and 5, Civil Code of the Philippines — Paragraph 4 imposes liability upon “[t]he owners and managers of an establishment or enterprise” for damages caused by their employees “in the service of the branches in which they are employed or on the occasion of their functions.” Paragraph 5 imposes liability upon “[e]mployers” for 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.” The Court interpreted the fifth paragraph as broad enough to cover all employers and as the applicable provision in this case, but found that the employee was not acting within the scope of his assigned tasks.
• Section 11, Rule 13, 1997 Rules of Civil Procedure — Requires personal service where practicable and a written explanation when resorting to other modes. The petition contained the required explanation, so no procedural infirmity existed.
• Section 4, Rule 45, 1997 Rules of Civil Procedure — Specifies the material dates to be stated in a petition for review. The petition contained the required dates; it need not include the dates of expiration of the original period or the filing of a motion for extension.

Puno, Kapunan, Pardo, and Ynares-Santiago, JJ., concurred.