ORIX METRO LEASING AND FINANCE CORPORATION (FORMERLY CONSOLIDATED ORIX LEASING AND FINANCE CORPORATION), PETITIONER, VS. MINORS: DENNIS, MYLENE, MELANIE AND MARIKRIS, ALL SURNAM…

Orix Metro Leasing and Finance Corporation versus the minor heirs of the Mangalinao spouses

The Case

This is a case about a multiple-vehicle collision on the North Luzon Expressway that killed an entire family, leaving four minor children orphaned, and the action for damages they brought against the drivers and the registered owners of the two ten-wheeler trucks that crashed into their parents' vehicle. The surviving children sued on quasi-delict, imputing recklessness to the truck drivers and fault to the owners for failing to exercise the diligence of a good father of a family in the selection and supervision of their drivers. The case matters because it fixes two rules a Bar candidate must carry into the examination room: that the registered owner of a motor vehicle is liable to third persons for injuries caused by it, regardless of who the actual owner may be; and that the emergency rule does not excuse a driver whose own negligence brought about the emergency.

Procedural History

The children, through their legal guardian, filed a complaint for damages based on quasi-delict before the Regional Trial Court of Makati. After trial, the Regional Trial Court rendered judgment in favor of the plaintiffs, holding the two truck drivers and the registered owners jointly and severally liable, and ordering the third-party defendant, the alleged actual owner of the Fuso truck, to indemnify Orix for the amounts adjudged against it. Orix appealed, and the drivers and the owner of the Isuzu truck likewise appealed, each blaming the other and challenging the amounts awarded. The Court of Appeals affirmed the finding of reckless driving on the part of both truck drivers and held Orix liable as registered owner, but modified the awards of damages. Orix and the Isuzu parties filed separate motions for reconsideration, which were denied. Hence, they filed consolidated petitions for review on certiorari before the Supreme Court.

Facts

On the night of June 27, 1990, at about a quarter past eleven, three vehicles were traveling along the northbound lane of the North Luzon Expressway in Pulilan, Bulacan. It was raining. A Nissan Pathfinder, driven by Anacleto Edurese, Jr., carried the Mangalinao spouses, their six-month-old daughter Marriane, a housemaid, and a helper. Ahead of them on the outer lane was a Fuso ten-wheeler truck driven by Loreto Lucilo, which was already moving in an erratic and swerving motion. Behind the Pathfinder was an Isuzu cargo truck driven by Antonio delos Santos.

As the Pathfinder was cruising on the fast lane and about to overtake the Fuso, the Fuso suddenly swerved to the left and cut into the Pathfinder's lane, blocking its way. The Pathfinder hit the Fuso's left door and left body. The impact stopped both vehicles in the middle of the expressway. Almost instantly, the Isuzu's front crashed into the rear of the Pathfinder, leaving it a total wreck. The Mangalinao spouses, the driver Edurese, and the helper Jebueza were declared dead on the spot, while the infant Marriane and the housemaid were declared dead on arrival at a nearby hospital. The occupants of the trucks escaped serious injury.

Their letters demanding compensation having been ignored, the minor children Dennis, Mylene, Melanie, and Marikris filed a complaint for damages against the drivers and the registered owners of the two trucks. Orix moved to dismiss, claiming it was no longer the owner of the Fuso because it had sold the truck years earlier, and it filed a third-party complaint against the alleged actual owner. The drivers and the Isuzu owner blamed the Fuso driver's reckless driving and invoked the emergency rule. The alleged actual owner and the Fuso driver were declared in default for failing to file any responsive pleading.

Issues

• Whether or not the finding of negligence of both truck drivers, being a question of fact, may be disturbed in a petition for review on certiorari.
• Whether or not the emergency rule excuses the Isuzu driver from liability for ramming the rear of the Pathfinder.
• Whether or not Orix, as the registered owner of the Fuso truck, is liable for the deaths caused by that truck despite having sold it to another.
• Whether or not the damages awarded by the Court of Appeals, including the amount for loss of earning capacity and attorney's fees, are proper.

Applicable Provisions

Article 2180 of the Civil Code, as it governs the liability of employers and owners of vehicles, provides:

The obligation imposed by Article 2176 is demandable not only for one's own acts or omissions, but also for those of persons for whom one is responsible. Employers shall be liable for the 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.

This provision is the basis for holding Orix vicariously liable as the registered owner of the Fuso truck that caused the deaths.

Article 2224 of the Civil Code, on temperate damages, provides:

Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be proved with certainty.

This provision supports the award in lieu of actual damages for loss of earning capacity where the earning capacity is plainly established but the actual income is not sufficiently proved.

Ruling

On the first issue, the Court held that negligence and proximate cause are factual issues, and that the concurrence of the findings of fact of the courts below is conclusive. A petition for review on certiorari should include only questions of law, and the exceptions invoked were not shown to exist. There was no compelling reason to disturb the factual conclusions.

On the second issue, the Court held that the emergency rule does not apply to the Isuzu driver. The rule states:

One who suddenly finds himself in a place of danger, and is required to act without time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if he fails to adopt what subsequently and upon reflection may appear to have been a better method, unless the emergency in which he finds himself is brought about by his own negligence.

The Court found that the smashed front of the Isuzu showed a strong impact, and that the driver admitted that despite stepping on the brakes, his truck still smashed into the rear of the Pathfinder. The Isuzu was not within a safe stopping distance, and considering the wet and slippery road, the driver should have reduced his speed and increased his distance. His own negligence brought about the emergency.

On the third issue, the Court held that Orix, as the registered owner of the Fuso, is primarily liable for the damages caused by the truck, regardless of any claim that it had sold the truck to another. The Court explained that if a registered owner were allowed to evade responsibility by proving who the supposed transferee is, it would be easy to escape liability and transfer it to an indefinite person, or to one who possesses no property. The registered owner, however, has a right to be indemnified by the real or actual owner, which Orix acknowledged by filing a third-party complaint.

On the fourth issue, the Court held that the heirs deserve the damages awarded, with modifications. On funeral expenses, the receipts proved payment of one hundred seven thousand pesos. On loss of earning capacity, the Court recognized that the net income had not been sufficiently established, but that the heirs suffered a loss deserving of compensation. What the Court of Appeals awarded was in actuality temperate damages, given in the absence of competent proof of actual damages. The Court also sustained the award of attorney's fees.

Doctrine

The registered owner of a motor vehicle is liable to third persons for injuries caused by its operation, regardless of who the actual owner may be. The registered owner may seek indemnity from the actual owner, but as against the victim, the registered owner is primarily liable. This rule is tied to Article 2180 of the Civil Code and rests on the need to protect victims who have no means of discovering the actual owner except through the registration records.

The emergency rule does not excuse a driver who suddenly finds himself in a place of danger if the emergency was brought about by his own negligence. A driver who fails to keep a safe stopping distance and to reduce speed on a wet and slippery road is negligent, and the emergency rule will not apply.

Temperate damages may be awarded in lieu of actual damages for loss of earning capacity where the earning capacity is plainly established but no evidence was presented to support the allegation of the injured party's actual income. This is grounded on Article 2224 of the Civil Code.

Disposition

The petitions were denied, and the decision of the Court of Appeals was affirmed with modifications as to the amounts of damages, with Orix held liable as registered owner and entitled to indemnity from the actual owner.

Remember This

The single line worth memorizing is that the registered owner of a motor vehicle is primarily liable to third persons for injuries caused by its operation, regardless of who the actual owner may be, and that the emergency rule does not excuse a driver whose own negligence brought about the emergency. Examiners like to use this case to test the registered owner rule under Article 2180 of the Civil Code and the limits of the emergency rule in quasi-delict cases.