Greenstar Express, Inc. and Fruto L. Sayson, Jr. vs. Universal Robina Corporation and Nissin Universal Robina Corporation

An employer who is also the registered owner of a vehicle may rebut the disputable presumption of negligence arising from the registered-owner rule by proving any of the following: (1) that it had no employment relationship with the driver; (2) that the driver acted outside the scope of his assigned tasks; or (3) that it exercised the diligence of a good father of a family in the selection and supervision of the driver. The registered-owner rule and Article 2180 of the Civil Code must be harmonized, such that proof of registered ownership creates a presumption that the requirements of Article 2180 have been satisfied, shifting the burden of evidence to the defendant.

Petitioner Greenstar Express, Inc. is a domestic corporation engaged in public transportation, and petitioner Fruto L. Sayson, Jr. is one of its bus drivers. Respondents Universal Robina Corporation (URC) and Nissin Universal Robina Corporation (NURC) are domestic corporations engaged in the food business, with NURC being a subsidiary of URC. URC was the registered owner of a Mitsubishi L-300 van that was designated for use by NURC and officially assigned to NURC's Logistics Manager, Florante Soro-Soro. The case involves an action for damages based on quasi-delict, governed by Articles 2176 and 2180 of the New Civil Code, and implicates the interplay between the registered-owner rule under the Land Transportation and Traffic Code and the vicarious liability of employers under the Civil Code.

Petitioner Greenstar Express, Inc. (Greenstar) is a domestic corporation engaged in public transportation, and petitioner Fruto L. Sayson, Jr. is one of its bus drivers. Respondents Universal Robina Corporation (URC) and Nissin Universal Robina Corporation (NURC) are domestic corporations engaged in the food business, with NURC as a subsidiary of URC. URC was the registered owner of a Mitsubishi L-300 van with plate number WRN 403, which was designated for use by NURC and officially assigned to NURC's Logistics Manager, Florante Soro-Soro.

At about 6:50 a.m. on February 25, 2003, a declared national holiday by virtue of Proclamation No. 331, petitioner's bus, driven by Sayson toward Manila, collided head-on with the URC van, driven Quezon province-bound by NURC's Operations Manager, Renante Bicomong. The incident occurred along Km. 76, Maharlika Highway, Brgy. San Agustin, Alaminos, Laguna. Bicomong died on the spot, and both vehicles sustained considerable damage.

On September 23, 2003, petitioners filed a Complaint against NURC to recover damages premised on negligence, later amended to implead URC. During trial, petitioners presented Sayson as eyewitness, who testified that he was driving at about 60 kilometers per hour when he saw the L-300 van on the shoulder of the opposite lane about 250 meters away; that the van was running at full speed, creating dust clouds; that when the van returned to its proper lane, it was heading directly toward his bus at a distance of about five meters; that the point of impact happened on his lane; and that he tried to swerve but found it difficult to maneuver at his speed. SPO3 Ernesto Marfori, the investigating officer, testified that based on his investigation, the possible cause of the accident was the swerving to the left lane by the driver of the L-300 van, which resulted in encroachment on the bus's lane.

Respondents presented three witnesses to prove that Bicomong was acting in his personal capacity when the mishap occurred. Alexander Caoleng, HR Manager of NURC, testified that Bicomong worked as Operations Manager until his death; that despite having been issued his own service vehicle, a Toyota Corolla, he used the L-300 van which was not officially issued to him but was in the name of Soro-Soro; and that the van was used mainly to transport items between their Pasig and Cavite offices. John Legaspi, Project Manager of NURC, testified that Bicomong shared he would go home to Quezon Province the following day to give money to his daughter, and that the trip was not work-related as the day was a holiday, there being no NURC plant in Quezon, Laguna, or Bicol. Gloria Bicomong, the deceased's widow, testified that her husband was going home to Candelaria, Quezon on that day, and that he had used the L-300 van about five times in the past to bring bulky things home.

The RTC dismissed the complaint, holding that petitioners had no cause of action because Bicomong was not in the performance of his duty on the holiday, and that respondents failed to prove that Sayson's negligence was the proximate cause of the collision, thus both parties must bear their respective losses. The CA affirmed, and the Supreme Court gave due course to the petition.

• Vicarious Liability of Respondents: Petitioners insisted that respondents should be held liable for Bicomong's negligence under Articles 2176, 2180, and 2185 of the Civil Code, as Bicomong's negligence was the direct and proximate cause of the accident in that he unduly occupied the opposite lane which the bus was lawfully traversing.

• Presumption of Negligence: Petitioners argued that Bicomong's driving on the opposite lane constituted a traffic violation, giving rise to the presumption of negligence on his part, and that it became incumbent upon respondents to rebut the same by proving they exercised care and diligence in the selection and supervision of their employees.

• Waiver of Defense: Petitioners contended that respondents did not allege in their answers and motion to dismiss the defense that Bicomong was not acting within the scope of his assigned tasks because the day was a declared national holiday, and that for failure to plead this defense, it was deemed waived pursuant to Section 1, Rule 9 of the 1997 Rules of Civil Procedure.

• Failure to Rebut Presumption: Petitioners argued that respondents failed to prove that Bicomong was not in the official performance of his duties or that the URC van was not officially issued to him at the time of the accident, and for this reason, the presumption of negligence was not overturned.

• Liability of URC as Registered Owner: Petitioners argued that URC should be held liable as the registered owner of the van, and for allowing a non-employee to use for his personal use the vehicle owned by it.

• Factual Nature of Issues: Respondents argued that the issues raised in the Petition are factual in nature and should not be reviewed by the Court.

• Absence of Liability: Respondents argued that since the collision occurred on a holiday and while Bicomong was using the URC van for a purely personal purpose, respondents should be absolved of liability as Bicomong was evidently not performing his official duties on that day.

• Negligence of Petitioner-Driver: Respondents argued that the totality of the evidence indicates that it was Sayson who was negligent in the operation of Greenstar's bus when the collision occurred, and that Bicomong was not negligent in driving the URC van.

• Belated Objection: Respondents argued that petitioners' objection pertaining to the defense that the collision occurred on a holiday was belatedly raised.

• Amendment to Conform to Evidence: Respondents argued that under Section 5, Rule 10 of the 1997 Rules, their pleadings should be deemed amended to conform to the evidence presented at trial, which included proof that the accident occurred on a holiday and while Bicomong was not in the performance of his official tasks.

• Vicarious Liability of Respondents: Whether respondents are liable for damages sustained by petitioners arising from the negligence of their employee, Renante Bicomong, in the operation of the URC van.

• Admission of Unpleaded Defenses: Whether the Court of Appeals erred in admitting defenses not pleaded in the motion to dismiss or in respondents' answer.

• Vicarious Liability of Respondents: No. Respondents successfully rebutted the presumption of negligence arising from the registered-owner rule by proving that Bicomong acted outside the scope of his assigned tasks at the time of the collision, and petitioners' claim for damages was barred by the last clear chance doctrine given Sayson's own negligence.

• Admission of Unpleaded Defenses: No. The failure to allege the defense in the answers did not preclude respondents from proving it during trial, as the facts were illustrative of their defense of absence of negligence, and petitioners' failure to object to the presentation of such evidence constituted a waiver, with Section 5, Rule 10 of the 1997 Rules applying to treat the pleadings as amended to conform to the evidence.

• Vicarious Liability of Respondents: The Court applied the doctrine in Caravan Travel and Tours International, Inc. vs. Abejar, which harmonized the registered-owner rule with Articles 2176 and 2180 of the Civil Code. The Court explained that in cases where both the registered-owner rule and Article 2180 apply, the plaintiff must first establish that the employer is the registered owner of the vehicle. Once ownership is proven, a disputable presumption arises that the requirements of Article 2180 have been proven, shifting the burden of proof to the defendant to show that no liability under Article 2180 has arisen. This may be done by proof of any of the following: (1) that there was no employment relationship with the driver; (2) that the driver acted outside the scope of his assigned tasks; or (3) that the employer exercised the diligence of a good father of a family in the selection and supervision of the driver. In this case, respondents proved that Bicomong was not in the performance of his work when the collision took place; that he was in possession of a service vehicle that did not belong to his employer NURC but to URC, and which was not officially assigned to him but to another employee; that his use of the URC van was unauthorized; that the accident occurred on a holiday while Bicomong was on his way home to his family in Quezon province; and that Bicomong had no official business in Quezon or Laguna, his area of operations being limited to the Cavite area. The Court further found that the evidence suggested the collision could have been avoided if Sayson exercised care and prudence. Sayson saw the URC van traveling fast on the shoulder of the opposite lane about 250 meters away, knew it was traveling fast as it created dust clouds, saw it get back into its proper lane but directly toward him, yet instead of slowing down, he maintained his speed and tried to swerve, finding it difficult to do so at his speed. The point of impact occurred right in the middle of the road, indicating that Sayson did not take any defensive maneuver to prevent the accident. The Court applied the doctrine of last clear chance, which provides that where both parties are negligent but the negligent act of one is appreciably later in point of time than that of the other, or where it is impossible to determine whose fault brought about the occurrence, the one who had the last clear opportunity to avoid the impending harm but failed to do so is chargeable with the consequences arising therefrom. The Court also noted that as a common carrier, Greenstar was bound to observe extraordinary diligence in ensuring the safety of its passengers under Articles 1733 and 1755 of the Civil Code, and that Sayson took no defensive maneuver whatsoever despite having all the opportunity to prepare and avert a possible collision.

• Admission of Unpleaded Defenses: The Court held that the failure to allege the facts in the answers did not preclude respondents from proving them during trial, as these facts were precisely illustrative of their defense of absence of negligence. Petitioners' failure to object to the presentation of such evidence below was tantamount to a waiver, and Section 5, Rule 10 of the 1997 Rules on amendments to conform to or authorize presentation of evidence applied. The Court cited Philippine National Bank vs. Manalo for the proposition that the failure of a party to amend a pleading to conform to the evidence adduced during trial does not preclude an adjudication by the court on the basis of such evidence, and the court may treat the pleading as if it had been amended to conform to the evidence.

• Registered-Owner Rule — The rule that the registered owner of a motor vehicle is liable for death or injuries caused by the operation of the vehicle, as the main aim of vehicle registration is to identify the owner so that responsibility can be fixed on a definite individual. The Court applied this rule in harmony with Article 2180 of the Civil Code, holding that proof of registered ownership creates a disputable presumption that the requirements of Article 2180 have been satisfied, shifting the burden of proof to the defendant to show that no liability has arisen.

• Vicarious Liability of Employers (Article 2180) — Employers are liable for damages caused by their employees acting within the scope of their assigned tasks. To hold the employer liable, it must be shown that an employer-employee relationship exists and that the employee was acting within the scope of his assigned task when the act complained of was committed. The Court applied this doctrine by requiring respondents to rebut the presumption of negligence through proof of any of three alternatives: no employment relationship, acting outside the scope of assigned tasks, or exercise of due diligence in selection and supervision.

• Last Clear Chance Doctrine — Where both parties are negligent but the negligent act of one is appreciably later in point of time than that of the other, or where it is impossible to determine whose fault or negligence brought about the occurrence of the incident, the one who had the last clear opportunity to avoid the impending harm but failed to do so is chargeable with the consequences arising therefrom. The Court applied this doctrine to hold Sayson negligent for failing to take defensive measures despite observing the van's precarious driving from 250 meters away.

• Extraordinary Diligence of Common Carriers — Common carriers are bound to observe extraordinary diligence in the vigilance over goods and for the safety of passengers transported by them, according to all the circumstances of each case, and are presumed to have been at fault or to have acted negligently in case of death of or injuries to passengers unless they prove they observed extraordinary diligence. The Court applied this doctrine to assess Sayson's conduct as a common carrier driver.

• "Therefore, the appropriate approach is that in cases where both the registered-owner rule and Article 2180 apply, the plaintiff must first establish that the employer is the registered owner of the vehicle in question. Once the plaintiff successfully proves ownership, there arises a disputable presumption that the requirements of Article 2180 have been proven. As a consequence, the burden of proof shifts to the defendant to show that no liability under Article 2180 has arisen." — This passage articulates the controlling doctrine harmonizing the registered-owner rule with Article 2180, establishing the burden-shifting framework applied in the case.

• "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." — This quotation from Castilex Industrial Corp. vs. Vasquez, Jr. states the principle that an employee's use of a company vehicle does not automatically render the employer liable, which the Court applied to Bicomong's unauthorized use of the URC van.

• "The doctrine of last clear chance provides that where both parties are negligent but the negligent act of one is appreciably later in point of time than that of the other, or where it is impossible to determine whose fault or negligence brought about the occurrence of the incident, the one who had the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences arising therefrom." — This passage defines the last clear chance doctrine, which the Court applied to bar petitioners' recovery given Sayson's failure to take defensive measures.

• Caravan Travel and Tours International, Inc. vs. Abejar, G.R. No. 170631, February 10, 2016 — Controlling precedent that harmonized the registered-owner rule with Articles 2176 and 2180 of the Civil Code, establishing the burden-shifting framework applied in this case.

• Castilex Industrial Corp. vs. Vasquez, Jr., 378 Phil. 1009 (1999) — Followed for the principle that the mere fact that an employee was using a service vehicle at the time of the injurious incident is not of itself sufficient to charge the employer with liability unless the employee was operating the vehicle within the course or scope of his employment.

• Erezo, et al. vs. Jepte, 102 Phil. 103 (1957) — Cited for the articulation of the registered-owner rule, explaining that vehicle registration is necessary to identify the owner so that responsibility can be fixed on a definite individual.

• Aguilar, Sr. vs. Commercial Savings Bank, 412 Phil. 834 (2001) — Cited as recognizing the seeming conflict between Article 2180 and the registered-owner rule and applying the latter.

• Del Carmen, Jr. vs. Bacoy, 686 Phil. 799 (2012) — Cited for the statement that Article 2180 "should defer to" the registered-owner rule, though not totally abandoned.

• Filcar Transport Services vs. Espinas, 688 Phil. 430 (2012) — Cited for the proposition that the registered owner of a vehicle can no longer use the defenses found in Article 2180, and that the source of a registered owner's liability remains Articles 2176 and 2180 of the Civil Code.

• Mendoza vs. Spouses Gomez, 736 Phil. 460 (2014) — Cited as reiterating the registered-owner rule doctrine.

• Yambao vs. Zuñiga, G.R. No. 146173, December 11, 2003 — Cited for the principle that for an employer to be liable for damages caused by an employee, the latter must have caused the damage in the course of doing his assigned tasks or in the performance of his duties.

• Philippine National Bank vs. Manalo, G.R. No. 174433, February 24, 2014 — Cited for the proposition that failure to amend a pleading to conform to evidence does not preclude adjudication on the basis of such evidence.

• Philippine National Railways Corporation vs. Vizcara, 682 Phil. 343 (2012) — Cited for the definition of the last clear chance doctrine.

• G.V. Florida Transport, Inc. vs. Heirs of Battling, Jr., G.R. No. 208802, October 14, 2015 — Cited in relation to the presumption of negligence of common carriers in case of death of or injuries to passengers.

• Article 2176, Civil Code — Provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done, and such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict. The Court applied this as the basis of petitioners' cause of action for damages.

• Article 2180, Civil Code — Provides that employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks. The Court applied this provision in determining respondents' vicarious liability, requiring proof of an employment relationship and that the employee acted within the scope of his assigned tasks.

• Article 2185, Civil Code — Provides that unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating any traffic regulation. Petitioners invoked this provision to argue for the presumption of negligence against Bicomong.

• Articles 1733 and 1755, Civil Code — Provide that common carriers are bound to observe extraordinary diligence in the vigilance over goods and for the safety of passengers, and are bound to carry passengers safely as far as human care and foresight can provide. The Court applied these provisions in assessing Sayson's conduct as a common carrier driver.

• Article 1756, Civil Code — Provides that in case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence. The Court cited this provision in relation to the standard of care required of common carriers.

• Section 1, Rule 9, 1997 Rules of Civil Procedure — Provides that defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. Petitioners invoked this provision to argue that respondents' defense was waived, but the Court held that the defense was illustrative of respondents' plea of absence of negligence.

• Section 5, Rule 10, 1997 Rules of Civil Procedure — Provides that when issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings, and failure to amend does not affect the result of the trial of these issues. The Court applied this provision to treat respondents' pleadings as amended to conform to the evidence presented.

• Section 5(a), Republic Act No. 4136 (Land Transportation and Traffic Code) — Cited in Erezo for the requirement of motor vehicle registration, which the Court discussed in relation to the registered-owner rule.

Carpio (Chairperson), Brion, and Mendoza, JJ., concurred. Leonen, J., was on official leave.