Every time we step out of our homes, we are aware of the risks involved in encountering accidents. News stories are filled with incidents involving buses, delivery vans, cars and motorcycles causing damage to property and people.
When a vehicle is involved in an accident causing damage and injury, it is commonly assumed that the registered owner will be held liable. However, that is not always the case.
The courts have applied two different rules in such situations: the Vicarious Liability Rule or the Registered Owner Rule.
According to Article 2180 of the Civil Code of the Philippines, the Vicarious Liability Rule holds employers liable for the damages caused by their employees acting within the scope of their assigned tasks, even if the employer is not engaged in any business or industry.
This provision is closely related to Article 2176 of the same law, which underscores the principle that those causing damage to others due to fault or negligence must assume responsibility. Moreover, it extends its application to encompass those individuals which the law deems responsible, not only for their own actions or omissions, but also for the actions or omissions of others. Thus, employers are responsible for their employees under certain circumstances.
On the other hand, the Registered-Owner Rule mandates that registered owners of vehicles are liable for death or injuries resulting from the operation of their vehicles.
These two rules sometimes appear to conflict with each other, especially in cases where the employer is also the registered owner of a vehicle driven by an employee that causes damage.
Article 2180 requires proof of an employment relationship between the driver and the owner and that the driver acted within the scope of his or her assigned tasks.
Conversely, the registered-owner rule only requires the plaintiff to prove that the defendant-employer is the registered owner of the vehicle.
For example, in the case of Castilex Industrial Corp vs. Vasquez, Jr. (G.R. No. 132266, December 21, 1999) the Vicarious Liability Rule was applied. Benjamin Abad, a manager of Castilex, was driving a company-owned pick-up truck when he collided with a motorcycle, resulting in the death of Romeo Vasquez.
Vasquez’s parents filed a case for damages against Abad and Castilex. The company denied liability claiming that Abad was acting in his private capacity at the time of the accident. The Supreme Court absolved Castilex of liability stating that the Vasquez family failed to prove that Abad was acting within the scope of his assigned tasks.
In contrast, the case of Filcar Transport Services vs. Jose Espinas, (G.R. No. 174156, June 20, 2012), applied the Registered Owner Rule. Espinas was driving his car when another vehicle, owned by Filcar, ran a red light and collided with his car.
Filcar claimed that the vehicle was assigned to Atty. Candido Flor, its corporate secretary, who stated that his personal driver, Timoteo Floresca, was driving the vehicle at the time of the accident. Filcar denied any liability, arguing that Floresca was not their employee but Atty. Flor’s. The court rejected Filcar’s defense and ordered it to pay damages to Espinas.
The court declared that the registered owner of a vehicle cannot use the defenses found in Article 2180, and as long as Filcar is the registered owner, it cannot escape primary liability.
In applying the Registered Owner Rule, the court explained that the aim of motor vehicle registration is to identify the owner such that there is a definite individual who shall be responsible for damages or injury caused by the vehicle. Whether there is an employer-employee relationship between the registered owner and the driver is irrelevant.
Importantly, this rule also prevents a situation where a registered owner of a motor vehicle can easily escape liability by passing on the blame to another, the driver or employee, who may have no means to answer for the damages caused, thereby defeating the claims of victims of road accidents.
Fortunately, through the case of Caravan Travel and Tours International, inc. vs. Ermilinda Abejar (G.R. No. 170631, February 10, 2016) the Supreme Court has harmonized the application of the Vicarious Liability Rule (Article 2810, in relation to Article 2176 of the Civil Code) with the Registered Owner Rule.
The appropriate approach in cases where both the registered-owner rule and vicarious liability rule find application is for the complainant to first establish that the employer is the registered owner of the vehicle in question.
Once the complainant is able to do this, it already gives rise to a disputable presumption that the requirements of Article 2180 have been proven — meaning that the driver is an employee of the registered owner and it was acting within the scope of assigned tasks.
It is at this point when the burden of proof shifts to the defendant, the registered owner of the vehicle, to show that no liability under Article 2180 has arisen by presenting proof that:
(1) the registered owner had no employment relationship with the driver, and
(2) the driver who caused the damage and injury was acting outside the scope of its assigned tasks, or
(3) the registered owner of the vehicle exercised the diligence of a good father of a family in the selection and supervision of its employee
In Caravan the complainant was able to present the Certificate of Registration of the van that hit the victim showing that the owner was the company, Caravan.
This would then mean that to avoid liability, Caravan will have to establish that its driver was not acting within the scope of his assigned functions or duties. It failed to do this as the court observed that the witness for the company could only state that she did not have the personal capacity to know and could not answer when asked why the driver was at the place of the accident when it occurred.
The company also failed to show it exercised due diligence in the selection of its employee. The driver it hired only possessed a non-professional driver’s license in violation of the Land Transportation and Traffic Code which requires that owners of motor vehicles shall only employ professional drivers to operate their motor vehicles.
The company was also not able to establish that it acted with due diligence in the supervision of its employees as no evidence was given to show that the various company policies on safety were actually being complied with.
The Supreme Court’s decision in the Caravan case effectively harmonized the application of the Vicarious Liability Rule and the Registered Owner Rule. This clarity will greatly assist the courts in resolving future cases with similar factual circumstances, preventing confusion and conflicting decisions.
(The author, Atty. John Philip C. Siao, is a practicing lawyer and founding Partner of Tiongco
Siao Bello & Associates Law Offices, teaches law at the MLQU School of Law, and an Arbitrator
of the Construction Industry Arbitration Commission of the Philippines. He may be contacted
at jcs@tiongcosiaobellolaw.com. The views expressed in this article belong to the author alone.)