Malayan Insurance Co., Inc. vs. Alberto

The doctrine of res ipsa loquitur permits an inference of negligence without direct proof when the accident is of a kind that does not ordinarily occur absent negligence, the instrumentality causing injury was under the exclusive control of the person charged, and the injured party did not contribute to the injury; once the requisites are met, the burden shifts to the defendant to rebut the presumption. An insurer who pays the insured’s loss is subrogated by operation of law to all the insured’s remedies against the third-party wrongdoer, and proof of payment suffices to establish subrogation. Failure to make a timely objection to offered evidence renders the evidence admissible, and the defect cannot be raised for the first time on appeal.

On December 17, 1995, a vehicular accident occurred at the intersection of EDSA and Ayala Avenue, Makati City, involving four vehicles: a Nissan Bus, an Isuzu Tanker, a Fuzo Cargo Truck, and a Mitsubishi Galant. Shortly before the collision, the Isuzu Tanker, Mitsubishi Galant, and Nissan Bus were all at a halt along EDSA facing south. The Fuzo Cargo Truck, owned by respondent Rodelio Alberto and driven by respondent Enrico Alberto Reyes, simultaneously struck the rear of the Mitsubishi Galant and the rear left portion of the Nissan Bus. The impact shoved the Galant forward, causing it to ram the Isuzu Tanker. Malayan Insurance had previously issued Car Insurance Policy No. PV-025-00220 over the Mitsubishi Galant in favor of First Malayan Leasing and Finance Corporation, covering third-party liability, own damage, and theft. After the insurer paid the assured PhP 700,000 for the damage sustained, it demanded reimbursement from respondents, who refused to pay. Malayan Insurance then filed a complaint for damages grounded on gross negligence, asserting subrogation.

• The Insurance and the Accident: Malayan Insurance issued Car Insurance Policy No. PV-025-00220 on December 15, 1994, insuring a Mitsubishi Galant (plate number TLM 732) owned by First Malayan Leasing and Finance Corporation against third-party liability, own damage, and theft. On the morning of December 17, 1995, at the corner of EDSA and Ayala Avenue, Makati City, four vehicles were involved in a collision: a Nissan Bus (NYS 381), an Isuzu Tanker (PLR 684), a Fuzo Cargo Truck (PDL 297), and the insured Mitsubishi Galant. The Isuzu Tanker was in front of the Galant, with the Nissan Bus on their right side; all three were stopped facing south. The Fuzo Cargo Truck, driven by respondent Enrico Alberto Reyes and owned by respondent Rodelio Alberto, hit the rear of the Galant and the rear left portion of the bus. The Galant was propelled forward and struck the rear of the Tanker.
• Police Report: Senior Police Officer 1 Alfredo M. Dungga (SPO1 Dungga), the on-the-spot investigator, prepared a police report reflecting the sequence of events summarized above.
• Payment and Demand: Malayan Insurance paid the assured PhP 700,000 for the damage sustained by the Galant. Maintaining that it was subrogated to the rights of the assured, the insurer sent demand letters to respondents seeking reimbursement. Respondents refused to settle.
• Respondents’ Version: In their Answer, respondents denied liability. They alleged that the proximate cause of the collision was the reckless driving of the Nissan Bus driver, who had come from the service road, swerved into the middle lane without regard to Reyes’ right of way, and abruptly stopped. Reyes claimed that despite braking hard, the truck could not overcome inertia and hit the Galant, while the bus sideswiped the truck. Respondents also assailed the police report as biased, asserting it relied solely on the bus driver’s account.
• Trial Proceedings: During trial, Malayan Insurance presented its motor car claim adjuster, who testified that he processed the claim and verified the supporting documents. The insurer offered in evidence the police report, a claim check voucher (Exhibit “D”), and a Release of Claim and Subrogation Receipt (Exhibit “E”). Respondents did not object to the presentation of these documents and failed to present any evidence. The trial court found respondents liable for gross negligence and awarded damages. The Court of Appeals reversed, holding that the police report was hearsay because SPO1 Dungga did not testify, that negligence was not proven, and that Malayan Insurance failed to establish a valid subrogation.

• Admissibility of the Police Report: Petitioner maintained that the police report constitutes an entry in official records, an exception to the hearsay rule, and is admissible even without the testimony of the investigating officer. Respondents’ failure to make a timely objection to its presentation constituted a waiver, rendering the report admissible.
• Sufficiency of Evidence and Negligence: Petitioner argued that because the Fuzo Cargo Truck rear-ended the Mitsubishi Galant, negligence is presumed under the doctrine of res ipsa loquitur. Respondents failed to present any evidence to rebut this presumption.
• Validity of Subrogation: Petitioner contended that it had validly subrogated to the rights of the assured by presenting the claim check voucher and the Release of Claim and Subrogation Receipt. Respondents did not object to these documents, and the payment of PhP 700,000 to the assured was established.

• Admissibility of the Police Report: Respondents countered that the police report was never confirmed by the investigating officer who prepared it and cannot be considered as evidence; it is hearsay and lacks probative value.
• Sufficiency of Evidence and Negligence: Respondents asserted that petitioner failed to present any witness who could attest to a negligent act by Reyes before or after the incident. They maintained that the proximate cause of the collision was the reckless driving of the Nissan Bus driver, not any negligence on their part.
• Validity of Subrogation: Respondents argued that the documents presented by petitioner did not contain certain essential details that would demonstrate proper subrogation.

• Admissibility of the Police Report: Whether the police report is admissible in evidence despite the absence of the testimony of the police investigator who prepared it.
• Sufficiency of Evidence to Establish Negligence: Whether the evidence presented is sufficient to prove negligence on the part of respondents, and whether the doctrine of res ipsa loquitur applies.
• Validity of Subrogation: Whether Malayan Insurance validly acquired the rights of the assured by subrogation.

• Admissibility of the Police Report: The police report was properly considered part of the evidence. While entries in official records are admissible as an exception to the hearsay rule only if the officer had sufficient personal knowledge — a requisite that was unclear on the record — respondents failed to make a timely objection to its presentation. Under the rule in Asian Construction and Development Corporation v. COMFAC Corporation, failure to object renders the evidence admissible, and a party cannot raise the objection for the first time on appeal. The defect, if any, was waived.
• Sufficiency of Evidence to Establish Negligence: The doctrine of res ipsa loquitur applied, giving rise to a reasonable presumption of negligence that respondents did not rebut. All three requisites were present: (1) a rear-end collision of this kind does not ordinarily occur unless someone is negligent; (2) the Fuzo Cargo Truck was under the exclusive control of respondent driver Reyes; and (3) no contributory negligence was attributed to the driver of the Mitsubishi Galant. Respondents’ unsubstantiated allegation that the Nissan Bus driver was at fault did not constitute rebuttal evidence. Because respondents presented no evidence at trial, the presumption stood, and the CA erred in dismissing the complaint for failure to prove negligence.
• Validity of Subrogation: Subrogation was validly effected. As with the police report, respondents failed to object to the admission of the claim check voucher and the Release of Claim and Subrogation Receipt; these documents thus became part of the evidence. The undisputed fact of payment of PhP 700,000 by the insurer to the assured operated as an equitable assignment of all remedies against the third party. Pursuant to Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and Surety Corporation, payment alone entitles the insurer to subrogation, placing it in the shoes of the insured to recover from the wrongdoer.

• Doctrine of Res Ipsa Loquitur — The doctrine allows an inference or presumption of negligence to arise without direct proof, serving as a substitute for specific evidence of negligence based on the circumstances of the injury. The requisites are: (a) the accident was of a kind that does not ordinarily occur unless someone is negligent; (b) the instrumentality or agency that caused the injury was under the exclusive control of the person charged with negligence; and (c) the injury was not due to any voluntary action or contribution on the part of the injured party. Once the plaintiff establishes these requisites, the burden shifts to the defendant to rebut the presumption by offering evidence of due care. The doctrine is grounded on the theory that the person in control of the instrumentality either knows the cause or has the best opportunity to ascertain it, while the plaintiff lacks such access. Here, the rear-end collision of a stationary vehicle by a truck under the driver’s exclusive control triggered the presumption.
• Subrogation in Insurance — Subrogation is the substitution of one person for another with respect to a lawful claim or right, such that the subrogee succeeds to all the rights and remedies of the creditor. In insurance, payment by the insurer to the insured operates as an equitable assignment to the insurer of all remedies the insured may have against the third party whose negligence caused the loss. The right of subrogation is not dependent on privity of contract; it accrues simply upon payment of the insurance claim. The Court applied this principle to hold that Malayan Insurance, having proved payment, stood in the shoes of the assured and could recover from respondents.
• Waiver of Objection to Evidence — Failure to object to offered evidence renders it admissible, and the court cannot on its own disregard such evidence. A party who desires to exclude evidence must state a timely objection; the objection cannot be raised for the first time on appeal. Because of the failure to object, the evidence becomes part of the record and all parties are bound by any outcome arising from it. This rule was applied to both the police report and the subrogation documents.
• Official Records Exception to the Hearsay Rule — Under Section 44, Rule 130 of the Rules of Court, entries in official records made by a public officer in the performance of duty are prima facie evidence of the facts stated. The requisites for admissibility are: (a) the entry was made by a public officer or person specially enjoined by law; (b) it was made in the performance of official duty; and (c) the officer had sufficient personal knowledge of the facts stated, acquired either personally or through official information. While the third requisite was not clearly established, the defect was waived by the lack of objection.

• “The effect of the doctrine is to warrant a presumption or inference that the mere fall of the elevator was a result of the person having charge of the instrumentality was negligent. As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of negligence which recognizes that prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence.” (Quoting D.M. Consunji, Inc. v. CA)
• “The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the instrumentality which causes the injury either knows the cause of the accident or has the best opportunity of ascertaining it and that the plaintiff has no such knowledge, and therefore is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to establish negligence.” (Quoting D.M. Consunji, Inc. v. CA)
• “The rule is that failure to object to the offered evidence renders it admissible, and the court cannot, on its own, disregard such evidence.” (Quoting Asian Construction and Development Corporation v. COMFAC Corporation)
• “Subrogation is the substitution of one person by another with reference to a lawful claim or right, so that he who is substituted succeeds to the rights of the other in relation to a debt or claim, including its remedies or securities. … Payment by the insurer to the insured operates as an equitable assignment to the insurer of all the remedies that the insured may have against the third party whose negligence or wrongful act caused the loss.” (Quoting Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and Surety Corporation)

• D.M. Consunji, Inc. v. CA, G.R. No. 137873, April 20, 2001, 357 SCRA 249 — Extensively relied upon and quoted for the doctrine of res ipsa loquitur, its requisites, procedural effect, and theoretical basis, as well as for the definition of the hearsay rule.
• Alvarez v. PICOP Resources, G.R. Nos. 162243, 164516 & 171875, December 3, 2009, 606 SCRA 444 — Cited for the three requisites of the official records exception to the hearsay rule.
• Asian Construction and Development Corporation v. COMFAC Corporation, G.R. No. 163915, October 16, 2006, 504 SCRA 519 — Applied as controlling precedent for the rule that failure to object to evidence renders it admissible and precludes a party from raising the objection on appeal.
• Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and Surety Corporation, G.R. Nos. 180880-81 & 180896-97, September 25, 2009, 601 SCRA 96 — Applied for the definition and requisites of subrogation in insurance, and the principle that payment by the insurer effects an equitable assignment of the insured’s remedies.

• Section 44, Rule 130, Rules of Court — Entries in official records. The provision was examined for the requisites of admissibility as an exception to the hearsay rule; the Court found that while the third requisite (officer’s personal knowledge) was uncertain, respondents’ failure to object waived any objection.
• Section 36, Rule 130, Rules of Court — Testimony generally confined to personal knowledge. This provision underlies the hearsay rule and was discussed in conjunction with the official records exception.

Diosdado M. Peralta, Jose Catral Mendoza, Bienvenido L. Reyes, Estela M. Perlas-Bernabe.