Laza vs. Standard Insurance Co., Inc.

A petition for review on certiorari under Rule 45 must raise only questions of law, and the Court is not a trier of facts; factual findings of the lower courts, when unanimous and supported by evidence, are binding and conclusive on the Court absent any showing of grave abuse of discretion or lack of basis for their conclusions.

Standard Insurance Co., Inc. is the insurer of Peter Paul Nang's Honda CR-V under Insurance Policy Schedule No. BG-PCV-200050997. Petitioner Mark Laza was the registered owner of the Toyota Innova driven by petitioner Danilo Agpoon, who was also Agpoon's employer. The dispute concerns a vehicular accident between the two vehicles, with Standard Insurance seeking reimbursement from petitioners as subrogee of Nang's rights after paying his property damage claim. The case is governed by Articles 2176 and 2180 of the Civil Code of the Philippines on quasi-delicts and vicarious liability, as well as Republic Act No. 4136, the Land Transportation and Traffic Code.

The controversy stemmed from a vehicular accident on November 6, 2014, at around 8:30 a.m. along the National Highway of Barangay Urayong, Bauang, La Union, involving a Honda CR-V bearing Plate No. AHJ 778 owned and driven by Peter Paul Nang, and a Toyota Innova bearing Plate No. RNU 254 driven by petitioner Danilo Agpoon, with petitioner Mark Laza as the registered owner. Respondent Standard Insurance Co., Inc. was the insurer of Nang's CR-V under Insurance Policy Schedule No. BG-PCV-200050997.

On December 6, 2016, Standard Insurance filed a complaint for recovery of sum of money based on quasi-delict against Laza and Agpoon, alleging that it paid Nang's property damage claim in the amount of PHP 270,509.42 by virtue of the insurance contract, and as lawful subrogee of Nang's rights, demanded reimbursement from Laza and Agpoon, who refused to pay. Laza and Agpoon countered that Nang was negligent for making a sudden U-turn on a national highway without due regard to the road's condition, and interposed a compulsory counterclaim for damages sustained by Laza's vehicle amounting to PHP 116,208.86, plus moral and exemplary damages.

According to Laza and Agpoon's version, Agpoon was overtaking a vehicle on the left side, far from the scene of the collision, when the CR-V, driven by Nang on the southbound lane, suddenly made a U-turn across the road without waiting for his turn to cross after the northbound vehicles had passed. To avoid an accident, Agpoon veered the steering wheel to the right, directing the Innova towards the shoulder of the road, but the left side portion of the Innova still hit the right front portion of the CR-V. SPO1 Marlon P. Panitan, a Police Investigator from the Bauang Police Station, responded to the accident and directed Nang and Agpoon to ride the patrol car to be brought to the hospital for alcohol breath checks. On the way to the police station, Nang alighted the patrol car, and only Agpoon reached the police station, where SPO1 Panitan conducted the investigation with only Agpoon present. Laza and Nang later talked over the phone and agreed that their insurers would make the necessary arrangements for the repair of their respective vehicles. A complaint for reckless imprudence resulting in damage to property was filed by Nang against Agpoon, but was dismissed by the Provincial Prosecutor of Bauang, La Union, which found that Nang was at fault for the incident.

Standard Insurance's version, on the other hand, was that Nang, along with two friends and his 4-year-old son, was travelling southbound to look for the residence of the mayor's wife. After stopping at Lomboy farm to ask about the location, Nang drove further at about 20 to 30 kph, turned on his left signal light to warn oncoming northbound vehicles of his intention to turn across the northbound lane and shoulder lane, and entered the property. Before crossing, a Nissan Sentra sedan travelling on the opposite lane slowed down and blinked its headlights, signifying that it was giving way to the CR-V. At that time, the Innova, travelling northbound at accelerated speed, overtook the Sentra on its shoulder (right side), and hit and bumped the CR-V. After the collision, Nang observed that the CR-V sustained damages on its front portion, rendering it nonoperational, while the Innova was still functioning. SPO1 Panitan arrived at the scene after 15 to 20 minutes, and while at the patrol car, Agpoon admitted to Nang that he was overtaking on the northbound right shoulder of the road, an admission he repeated at the police station. SPO1 Panitan reduced his findings in writing and prepared a Police Report dated November 6, 2014. After Nang's claim was filed, Standard Insurance brought the CR-V to Honda Cars Pangasinan, Incorporated for repairs and paid PHP 270,509.42, requiring Nang to execute a release of claim with agreement to testify in court. Standard Insurance then wrote to Laza and Agpoon requesting reimbursement of PHP 273,372.22. Laza and Agpoon's counsel replied that while they were willing to pay Nang PHP 200,000.00 directly, they were apprehensive that Standard Insurance would still proceed with a case against them. Standard Insurance replied that it had already paid PHP 270,509.72 to Nang and was not amenable to the settlement amount offered, and would still pursue its claims.

The MeTC dismissed the Complaint, ruling that Standard Insurance failed to prove Agpoon's negligence, as the traffic accident report and testimony of SPO1 Panitan were based allegedly on information from an unnamed bystander; that no other evidence supported Nang's claim that a vehicle stopped to give way; that the photographs supported Agpoon's claim that Nang's CR-V made a U-turn; and that Agpoon's version was bolstered by the dismissal of the criminal complaint. The RTC reversed, observing that the photographs established that the Innova was inside the shoulder of the road, violating Section 52 of Republic Act No. 4136; that Agpoon was presumed negligent pursuant to Article 2185 of the Civil Code; that Agpoon's version of events was unreliable; and that Agpoon's violation of traffic laws was the proximate cause of the damage, making Laza vicariously liable as owner. The CA affirmed, ruling that Standard Insurance's version was supported by Nang's testimony and the police report, which was admissible and prima facie evidence of the facts stated therein; that Nang was not violating any traffic regulations; that even under Agpoon's version, he was negligent as he was overtaking a vehicle on the left and should not have reacted by swerving towards the shoulder; and that Laza, as Agpoon's employer, was presumed negligent and solidarily liable.

• Negligence of Nang: Petitioners maintained that the collision occurred and they sustained damages because of Nang's negligence, alleging that before the collision, the Innova was in its rightful lane, and the mishap occurred because the CR-V suddenly made a U-turn going in the opposite direction and encroached on the lane rightfully occupied by the Innova, constraining Agpoon to swerve to the right to avoid the oncoming vehicle.
• Violation of Traffic Regulations by Nang: Petitioners argued that Nang violated traffic regulations under Section 42(a) and 44(a) of Republic Act No. 4136 for failing to observe the rules on right of way and traffic signals.
• Failure to Establish Cause of Action: Petitioners argued that Standard Insurance failed to establish its cause of action for sum of money based on quasi-delict against them.

• Negligence of Agpoon: Standard Insurance argued that the appellate court correctly ruled that Agpoon was negligent in driving the Innova when it collided with Nang's CR-V.
• Reaction Proving Negligence: Standard Insurance contended that even assuming that Nang's CR-V was unnoticeable prior to the collision, Agpoon's reaction of swerving towards the shoulder proved the latter's negligence.
• Accelerated Speed: Standard Insurance argued that the impact on the CR-V and the damages it sustained made it appear that Agpoon's Innova accelerated its speed with no indication of slowing down and without regard to the surrounding traffic.

• Factual Nature of the Issues: Whether the issues raised by petitioners—on who was negligent between the parties and whether there was a violation of Republic Act No. 4136 at the time of the mishap—are factual in nature, such that the Court should not review them under Rule 45.
• Negligence and Proximate Cause: Whether the Court of Appeals erred in sustaining the RTC's finding that Agpoon was negligent and that his negligence was the proximate cause of the damage to Nang's CR-V.
• Vicarious Liability of Laza: Whether Laza, as Agpoon's employer, is vicariously liable for the damages caused.

• Factual Nature of the Issues: Yes. The issues raised by petitioners are factual in nature, and the Petition did not show any applicable exceptions to the general rule that the Court is not a trier of facts, especially not its allegation of grave abuse of discretion on the part of the CA.
• Negligence and Proximate Cause: Yes. The RTC and the CA were unanimous in finding that Standard Insurance substantially proved Agpoon's negligence, and the Court agreed, as Agpoon himself admitted that he was overtaking a vehicle on the left and returning to his lane when Nang suddenly made a U-turn, constraining him to swerve to the right to avoid the oncoming vehicle.
• Vicarious Liability of Laza: Yes. Laza is vicariously liable as Agpoon's employer pursuant to Article 2180 of the Civil Code, and petitioners are jointly and severally liable to pay PHP 270,509.42 as actual damages, PHP 30,000.00 attorney's fees, and legal interest at 6% per annum.

• Factual Nature of the Issues: The Court is not a trier of facts. As clearly stated in Rule 45, Section 1 of the Rules of Court, a petition before the Court must only raise questions of law. The petitioner must substantiate the whimsical or capricious exercise of judgment by the lower courts or an ample showing that they lacked basis for their conclusions. A close reading of the Petition shows that the issues raised by petitioners—on who was negligent between the parties and whether there was a violation of Republic Act No. 4136 at the time of the mishap—are factual in nature. The Petition also did not show any applicable exceptions to the general rule, especially not its allegation of grave abuse of discretion on the part of the CA. Grave abuse of discretion is defined in jurisprudence as such capricious and arbitrary exercise of judgment as equivalent, in the eyes of the law, to lack of jurisdiction, and through time, its meaning has been expanded to include any action done contrary to the Constitution, the law, or jurisprudence.

• Negligence and Proximate Cause: Article 2176 of the Civil Code governs civil actions based on quasi-delicts, providing that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. To sustain a claim based on quasi-delict, jurisprudence mandates the concurrence of the following requisites: (a) damage suffered by the plaintiff; (b) fault or negligence of defendant, or some other person for whose acts he or she must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff, otherwise known as proximate cause. Negligence is defined as the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, by reason of which such other person suffers injury. The test to determine the existence of negligence is whether the defendant in the performance of the alleged negligent act used reasonable care and caution which an ordinary person would have used in the same situation. As correctly found by the CA and supported by both testimonial and documentary evidence, Standard Insurance was able to substantiate and prove its claim based on quasi-delict because: (1) the CR-V sustained damages as a result of the incident; (2) Agpoon was at fault and negligent, as he himself admitted that he was overtaking a vehicle on the left and returning to his lane when Nang suddenly made a U-turn from the opposite lane, constraining him to swerve to the right to avoid the oncoming vehicle; and (3) Agpoon's negligence was the proximate cause of the damage sustained by Nang's CR-V, which was insured with Standard Insurance.

• Alleged Violations by Nang: With regard to petitioners' allegations that Nang was violating Republic Act No. 4136, the Court approved the disquisition of the CA. Section 42(a) of the Land Transportation and Traffic Code provides that the vehicle on the left should yield to the vehicle on the right when approaching an intersection, but the statutory right of way rule applies only where the vehicles are approaching the intersection at approximately the same time and not where one of the vehicles enters the junction substantially in advance of the other. In the present case, Nang was not violating the rule on right of way, as it was sufficiently established that in making the turn, he had already occupied a substantial portion of the opposite lane, manifested by the fact that the Sentra on the northbound lane had blinked its headlights to give way to Nang. Neither can the Court appreciate the contention that Nang was violating Section 44(a) of Republic Act No. 4136, as aside from their self-serving allegations that Nang failed to make a signal prior to making his turn, petitioners proffered no other evidence to substantiate such claim. The Court cannot give evidentiary weight to mere allegations in the absence of any evidence to support the same, as mere allegation is not evidence and not equivalent to proof.

• Vicarious Liability and Damages: The Court sustained the award of damages in Standard Insurance's favor because of Agpoon's negligence based on Article 2176 of the Civil Code, and Laza's vicarious liability as Agpoon's employer pursuant to Article 2180 of the same Code. Petitioners are jointly and severally liable to pay PHP 270,509.42 as actual damages, which was proven by documentary evidence of the actual cost of repairs. On attorney's fees, the Court found that Standard Insurance was compelled to engage the services of counsel to recover the amounts of monetary obligation from petitioners due to the damages caused to the vehicle under its insurance policy, thus the CA correctly awarded PHP 30,000.00. Finally, consistent with jurisprudence, the CA correctly imposed legal interest at the rate of 6% per annum.

• Quasi-delict under Article 2176 of the Civil Code — 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 requisites are: (a) damage suffered by the plaintiff; (b) fault or negligence of defendant, or some other person for whose acts he or she must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff, otherwise known as proximate cause. The Court applied this doctrine in finding that Standard Insurance proved all three requisites against Agpoon.

• Definition and Test of Negligence — Negligence is the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, by reason of which such other person suffers injury. The test is whether the defendant in the performance of the alleged negligent act used reasonable care and caution which an ordinary person would have used in the same situation. The existence of negligence is determined by reference to what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence.

• Vicarious Liability under Article 2180 of the Civil Code — Employers are liable for the damages caused by their employees acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. The Court applied this doctrine in holding Laza solidarily liable with Agpoon as the latter's employer.

• Rule 45 Limited to Questions of Law — A petition for review on certiorari under Rule 45, Section 1 of the Rules of Court must only raise questions of law, and the Court is not a trier of facts. The petitioner must substantiate the whimsical or capricious exercise of judgment by the lower courts or an ample showing that they lacked basis for their conclusions. The Court applied this doctrine in denying the petition, as the issues raised were factual in nature.

• Grave Abuse of Discretion — Grave abuse of discretion is such capricious and arbitrary exercise of judgment as equivalent, in the eyes of the law, to lack of jurisdiction, and includes any action done contrary to the Constitution, the law, or jurisprudence. The Court applied this doctrine in finding that petitioners failed to show any grave abuse of discretion on the part of the CA.

• "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." — This is the canonical statement of Article 2176 of the Civil Code, which governs civil actions based on quasi-delicts and is the controlling provision in this case.

• "Negligence is defined as the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the circumstances justly demand, by reason of which such other person suffers injury. The test to determine the existence of negligence in a particular case may be stated as follows: Did the defendant in the performance of the alleged negligent act use reasonable care and caution which an ordinary person would have used in the same situation? If not, then he is guilty of negligence." — This passage defines negligence and establishes the test for determining its existence, which the Court applied in affirming the finding of Agpoon's negligence.

• "The statutory right of way rule under Section 42 of our traffic law applies only where the vehicles are approaching the intersection at approximately the same time and not where one of the vehicles enter the junction substantially in advance of the other." — This passage clarifies the application of the right of way rule under Section 42 of Republic Act No. 4136, which the Court approved in rejecting petitioners' claim that Nang violated traffic regulations.

• "Basic is the rule that mere allegation is not evidence and not equivalent to proof." — This passage states the evidentiary principle that the Court applied in rejecting petitioners' self-serving allegations that Nang failed to make a signal prior to making his turn.

• De Belen vs. Fuchs, 948 Phil. 608 (2023) — Cited for the rule that a petition under Rule 45 must only raise questions of law and that the Court is not a trier of facts.
• Pascual vs. Burgos, 776 Phil. 167 (2016) — Cited in relation to the exceptions to the general rule that the Court is not a trier of facts.
• Vda. De Bacaling vs. Laguna, 153 Phil. 524 (1973) — Cited for the definition of grave abuse of discretion as capricious and arbitrary exercise of judgment equivalent to lack of jurisdiction.
• Cuison vs. Court of Appeals, 351 Phil. 1089 (1998) — Cited for the definition of grave abuse of discretion as arbitrary or despotic exercise of power by reason of passion, prejudice, or personal hostility.
• Republic vs. COCOFED, 423 Phil. 735 (2001) — Cited for the expanded meaning of grave abuse of discretion to include any action done contrary to the Constitution, the law, or jurisprudence.
• Davao Del Norte Electric Cooperative vs. Heirs of Lucas, 942 Phil. 392 (2023) — Cited for the requisites of a claim based on quasi-delict under Article 2176 of the Civil Code.
• Agusan Del Norte Electric Cooperative, Inc. vs. Balen, 620 Phil. 485 (2009) — Cited for the definition of negligence and the test to determine its existence.
• Lara's Gifts & Decors, Inc. vs. Midtown Industrial Sales, Inc., 929 Phil. 754 (2022) — Cited for the imposition of legal interest at the rate of 6% per annum.

• Article 2176, Civil Code of the Philippines — Governs civil actions based on quasi-delicts, providing that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. The Court applied this provision in sustaining the award of damages in Standard Insurance's favor.
• Article 2180, Civil Code of the Philippines — Provides for the vicarious liability of employers for damages caused by their employees. The Court applied this provision in holding Laza solidarily liable with Agpoon as the latter's employer.
• Article 2185, Civil Code of the Philippines — Provides for the presumption of negligence when a person violates a traffic regulation at the time of the incident. The RTC applied this provision in presuming Agpoon negligent for violating Section 52 of Republic Act No. 4136.
• Section 1, Rule 45, Rules of Court — Provides that a petition for review on certiorari must only raise questions of law. The Court applied this provision in denying the petition, as the issues raised were factual in nature.
• Section 42(a), Republic Act No. 4136 (Land Transportation and Traffic Code) — Provides that the vehicle on the left should yield to the vehicle on the right when approaching an intersection. The Court applied this provision in finding that Nang was not violating the rule on right of way.
• Section 44(a), Republic Act No. 4136 (Land Transportation and Traffic Code) — Concerns traffic signals and right of way rules. The Court rejected petitioners' claim that Nang violated this provision due to lack of evidence.
• Section 52, Republic Act No. 4136 (Land Transportation and Traffic Code) — Concerns traffic regulations violated by Agpoon when the Innova was inside the shoulder of the road. The RTC applied this provision in finding Agpoon negligent.

Gesmundo, C.J. (Chairperson), Zalameda, Rosario, and Marquez, JJ., concurred.