UCPB General Insurance Co., Inc. vs. Pascual Liner, Inc.

The doctrine of res ipsa loquitur is an exception to the rule that hearsay evidence is devoid of probative value, whether objected to or not, because it establishes a rule on negligence that can stand on its own, independent of the hearsay character of the evidence presented; however, for the evidence to be considered, the opposing party must fail to interpose a timely objection to its admissibility.

On December 9, 2005, a 1997 BMW insured by UCPB General Insurance Co., Inc. was traveling northbound on the South Luzon Expressway when it was rear-ended by a bus owned by Pascual Liner, Inc. The impact propelled the BMW forward, causing it to collide with an aluminum van ahead. The Philippine National Police (PNP) and the PNCC Skyway Corporation prepared official reports and sketches of the incident. UCPB paid the assured P520,000.00 for the total loss of the vehicle and subsequently filed a subrogation claim against Pascual Liner for P350,000.00 (the amount paid minus salvage value).

• Nature of the Action: The case is a subrogation suit for the recovery of P350,000.00 filed by UCPB General Insurance Co., Inc. (petitioner) against Pascual Liner, Inc. (respondent) and its driver, Leopoldo L. Cadavido, arising from a vehicular accident.

• The Insurance Contract: On September 21, 2005, petitioner issued Comprehensive Car Insurance Policy No. DLS05MD-MNP111436 to Rommel B. Lojo covering his 1997 BMW sedan (plate number JMU-777).

• The Collision: On December 9, 2005, at approximately 3:30 p.m., while the insured vehicle was traveling northbound on the South Luzon Expressway in Sucat, Parañaque City, it was struck at the rear by respondent’s passenger bus (plate number PWN-447) driven by Cadavido. The force of the impact pushed the BMW forward, causing it to collide with an aluminum van (plate number TNR-217) directly ahead of it.

• Investigation and Reports: The Traffic Management and Security Department of the PNCC Skyway Corporation investigated the incident, and Solomon Tatlonghari prepared a Traffic Accident Sketch. The matter was endorsed to the Philippine National Police, where PO3 Joselito Quila prepared a Traffic Accident Report. The report indicated that the bus driver claimed the BMW suddenly veered left and stopped; however, the sketch showed the bus hitting the right rear of the BMW, which was signed by Cadavido.

• Payment and Subrogation: The BMW was deemed beyond economical repair. Petitioner paid Lojo P520,000.00, and Lojo executed a Release of Claim and waiver in petitioner’s favor. On November 12, 2009, petitioner filed the complaint for sum of money seeking recovery of P350,000.00 (the indemnity paid less salvage value).

• Procedural Posture in Lower Courts: Respondent filed an Answer raising prescription, lack of verification, and failure to make prior demand. Respondent admitted ownership of the bus but denied that Cadavido was its employee at the time. Respondent failed to submit judicial affidavits and was declared in default. The MeTC initially dismissed the case for lack of prior demand but reversed itself on reconsideration, applying res ipsa loquitur to find Cadavido negligent and holding respondent vicariously liable. The RTC affirmed. The Court of Appeals reversed, finding the Traffic Accident Report inadmissible hearsay because PO3 Quila lacked personal knowledge of the facts, having merely relied on Tatlonghari’s sketch.

• Admissibility Under Official Records Exception: Petitioner argued that the Traffic Accident Report was admissible under Section 44 of Rule 130 (1989 Rules on Evidence) as an entry in an official record. It maintained that PO3 Quila had sufficient knowledge of the facts because he conducted a separate investigation and interviewed the bus driver, and not merely relied on Tatlonghari’s sketch.

• Applicability of Res Ipsa Loquitur: Petitioner maintained that the doctrine of res ipsa loquitur applied to establish a presumption of negligence on the part of Cadavido. The rear-end collision itself, occurring while the vehicles were in the same traffic lane, warranted the inference of negligence without need for further explanation.

• Waiver of Objection: Petitioner argued that respondent failed to make a timely objection to the admissibility of the Traffic Accident Report at the trial court level; the objection was first raised on appeal, thereby waiving the hearsay objection.

• Legal Subrogation: Petitioner asserted that under Article 2207 of the New Civil Code, it was automatically subrogated to the rights of the assured upon payment of the insurance claim, and that prior demand was not a condition sine qua non for the filing of the collection suit.

• Inadmissibility of Hearsay Evidence: Respondent countered that the Traffic Accident Report was inadmissible hearsay. It argued that the third requisite of Section 44, Rule 130—that the public officer had sufficient knowledge of the facts acquired personally—was absent because PO3 Quila merely transcribed information from Tatlonghari’s sketch and had no personal knowledge of the accident.

• Prescription: Respondent argued that the cause of action had prescribed because the complaint was served in February 2011, more than four years after the accident occurred on December 9, 2005.

• Procedural Deficiencies: Respondent alleged that the complaint suffered from fatal defects, including lack of proper verification and certification against forum shopping due to insufficient proof of authority of the signatory.

• Lack of Prior Demand: Respondent maintained that the absence of a prior written demand to pay precluded the filing of the suit for sum of money, as demand was a condition sine qua non.

• Admissibility of Official Records: Whether the Court of Appeals erred in ruling that Section 44 of Rule 130 of the Rules on Evidence was inapplicable because the third requisite (sufficient personal knowledge of the preparing officer) was not satisfied.

• Res Ipsa Loquitur: Whether the Court of Appeals erred in refusing to apply the doctrine of res ipsa loquitur to establish negligence.

• Retroactivity of Procedural Rules: The amended Rules on Evidence (effective May 1, 2020) could not be applied retroactively to determine the admissibility of the Traffic Accident Report, as such application would alter the manner of appreciating the evidence and violate respondent’s right to due process by impairing vested rights in the procedure existing at the time of filing; thus, the 1989 Rules on Evidence governed.

• Waiver of Objection and Admissibility: The Traffic Accident Report was admissible because respondent failed to interpose a timely objection to its admissibility during the proceedings before the MeTC. Under the 1989 Rules, objections to documentary evidence must be made at the time it is offered; failure to do so constitutes a waiver. The objection, first raised on appeal to the RTC and sustained by the CA, was improperly entertained.

• Res Ipsa Loquitur as Exception to Hearsay Rule: Res ipsa loquitur is an exception to the rule that hearsay evidence is devoid of probative value. The doctrine establishes a presumption of negligence based on the occurrence of the accident itself, independent of the hearsay character of the evidence proving the accident. Once the accident is established through evidence (even hearsay evidence that has been admitted without objection), the presumption of negligence arises, and the evidence carries probative weight.

• Application of Res Ipsa Loquitur: The elements of the doctrine were satisfied: (1) the accident (a rear-end collision) was of a character that ordinarily does not occur without negligence; (2) the bus was under the exclusive management and control of Cadavido; and (3) there was no evidence of contributory negligence by the insured vehicle. The driver’s signature on the Traffic Accident Sketch constituted an admission of the positions of the vehicles, confirming the rear-end impact.

• Vicarious Liability: Under Article 2180 of the New Civil Code, an employer is presumed negligent for the torts of its employee committed within the scope of employment. Respondent failed to adduce evidence rebutting this presumption by proving observance of the diligence of a good father of a family in the selection and supervision of its driver.

• Legal Subrogation: Pursuant to Article 2207 of the New Civil Code, petitioner, having paid the insurance indemnity to the assured, was subrogated to the assured’s rights against the tortfeasor. The right of subrogation accrues upon payment and does not require prior demand.

• Res Ipsa Loquitur — Literally meaning "the thing speaks for itself," this doctrine allows the inference of negligence from the mere occurrence of an accident of a type that ordinarily does not happen in the absence of negligence, where the instrumentality causing the injury was under the defendant’s exclusive control, and the plaintiff did not contribute to the accident. In this case, the Court held that this doctrine operates as an exception to the general rule that hearsay evidence lacks probative value, because the negligence is presumed from the event itself, giving independent legal weight to the evidence establishing the accident.

• Entries in Official Records (Section 44, Rule 130, 1989 Rules on Evidence) — For entries in official records to be admissible as an exception to the hearsay rule, the following requisites must concur: (a) the entry was made by a public officer or by another person specially enjoined by law to do so; (b) it was made in the performance of the officer’s duty; and (c) the officer had sufficient knowledge of the facts stated, acquired personally or through official information. However, the failure to timely object to the admissibility of such evidence at the time it is offered waives the objection, rendering the evidence admissible despite technical defects.

• Retroactivity of Procedural Laws — Procedural laws are generally applicable to pending actions and are retroactive in that sense. However, this rule admits exceptions where application to pending proceedings would impair vested rights, involve intricate problems of due process, or work injustice. Courts may deny retroactive application if it would not be feasible or would violate due process.

• Legal Subrogation (Article 2207, New Civil Code) — An insurer who pays indemnity to the assured is subrogated to the rights of the latter against the wrongdoer. This right accrues simply upon payment and is not dependent upon privity of contract or written assignment.

• "The doctrine of res ipsa loquitor is an exception to the rule that hearsay evidence is devoid of probative value, whether objected to or not. This is because the doctrine of res ipsa loquitor establishes a rule on negligence that can stand on its own, independent of the hearsay character of the evidence presented."

• "Timely objection made by a party against the evidence presented by the other party is significant since the Rules mandates that objections to evidence must be made as soon as the grounds therefor become reasonably apparent... When a party failed to interpose a timely objection to evidence at the time they were offered in evidence, such objection shall be considered as waived."

• "In the case of hearsay evidence seeking to prove negligence, which is not objected to, as in the instant case, the same becomes admissible in evidence because of the waiver by the other party as to its admissibility... hearsay evidence that seek to prove negligence can stand on their own despite their character as hearsay. This is because the doctrine of res ipsa loquitor establishes a rule on negligence... Once negligence is established, there is no need for the court to make further examination simply because the presumption of negligence is already provided by the rule of res ipsa loquitor, as the event... already speaks for itself."

• Standard Insurance Co., Inc. v. Cuaresma, 742 Phil. 733 (2014) — Distinguished; held that a Traffic Accident Report is inadmissible if the preparing officer lacked personal knowledge and was not presented to testify, but noted as applicable where timely objection was made.

• Malayan Insurance Co., Inc. v. Alberto, 680 Phil. 813 (2012) — Followed; held that a police report is admissible despite the lack of testimony by the preparing officer where the opposing party failed to make a timely objection to its admissibility.

• DST Movers Corporation v. People's General Insurance Corporation, 778 Phil. 235 (2016) — Distinguished; reiterated the requirements for admissibility of official entries but emphasized the necessity of personal knowledge or testimony.

• Solidum v. People, 728 Phil. 579 (2014) — Cited for the definition and application of the doctrine of res ipsa loquitur.

• Tan Jr. v. Court of Appeals, 424 Phil. 556 (2002) — Cited for the principle that procedural laws are generally retroactive but admit exceptions where vested rights would be impaired or injustice would result.

• Article 2207, New Civil Code — Provides for the legal subrogation of an insurer to the rights of the insured against the wrongdoer upon payment of indemnity.

• Article 2180, New Civil Code — Establishes the vicarious liability of employers for the negligent acts of their employees, subject to the defense of diligence in selection and supervision.

• Section 44 (formerly Section 40), Rule 130, 1989 Rules on Evidence — Governs entries in official records as an exception to the hearsay rule.

• Section 36, Rule 130, 1989 Rules on Evidence — Provides that testimony must be confined to facts within the witness’s personal knowledge, excluding hearsay.

• Rule 45, Revised Rules of Court — Mode of appeal to the Supreme Court via petition for review on certiorari.

Leonen (Chairperson), Hernando, Inting, and Delos Santos, JJ.