complaint which was submission of a
government approved technical survey plan to
DIVISION
[ GR No. 215640, Nov 28, 2016 ]
NESTOR CABRERA v. ARNEL CLARIN +
DECISION
PERALTA, J.:
For resolution of this Court is a petition for review
on certiorari under Rule 45 of the Rules of Court
filed by petitioner Nestor Cabrera(Cabrera)
assailing the Decision[1] dated July 25, 2014 and
Resolution[2] dated November 21, 2014 of the
Court of Appeals (CA) in CA-G.R. CV No. 100950,
which reversed and set aside the Decision[3] of
the Regional Trial Court (RTC) of Malolos,
Bulacan, Branch 10, in Civil Case No. 752-M-2006.
The facts are as follows:
The instant petition originated from a
Complaint[4] for accion publiciana with damages
filed before the RTC by Cabrera[5] against
respondents Arnel Clarin (Clarin) and wife,
Milagros Barrios (Barrios) and husband, Aurora
Serafin (Serafin) and husband, and Bonifacio
Moreno (Moreno) and wife.[6] Cabrera alleged
that he is the lawful and registered owner of a
parcel of agricultural land located at Barangay
Maysulao, Calumpit, Bulacan, with a total area
of 60,000 square meters (sq. m.) covered by
Transfer Certificate of Title (TCT) No. T-4439. He
was in actual and physical possession of the land
until he discovered the encroachment of
respondents sometime in December 2005. By
means of fraud, strategy and stealth,
respondents usurped and occupied portions of
the said property, viz.: Clarin with 63 sq. m.
thereof, Barrios with 41 sq. m. thereof, Serafin with
30 sq. m. thereof, and Moreno with 11 sq. m.
thereof. He made numerous oral and written
demands to vacate the premises but the
respondents refused to heed. They also tailed to
settle amicably when the case was brought
before the barangay for conciliation.
In their Motion to Dismiss,[7] respondents claimed
that the complaint failed to state the assessed
value of the property which is needed in
determining the correct amount of docket fees
to be paid. Also, Cabrera did not fulfill an
essential condition prior to the filing of the
prove the alleged encroachment. Cabrera
anchors his claim of ownership in the certificate
of title registered in his and his father Ciriaco
Cabrera's name. Cabrera did not aver that it was
his portion of property that respondents have
intruded as there was no proof of partition of the
property since his father who was an American
citizen died in the United States of America.[8]
In an Order dated June 19, 2007, the RTC denied
respondents' motion, and directed them to file
their Answer.[9] The RTC cited the case of Aguilon
v. Bohol[10] in ruling that based on the allegations
in the complaint, the case is the plenary action
of accion publiciana which clearly falls within its
jurisdiction. The trial court, in an Order[11] dated
October 19, 2007, declared respondents in
default upon tailing to file their Answer, and
allowed Cabrera to present his evidence ex
parte. On February 5, 2009, respondents filed an
Omnibus Motion[12] to set aside the order of
default, to admit Answer, and to set the hearing
for the presentation of their evidence.
In a Decision dated May 30, 2012, the RTC ruled
in favor of Cabrera. The dispositive portion reads:
WHEREFORE, in view of all the foregoing,
judgment is hereby rendered in favor of the
[petitioner]:
1. ORDERING the [respondents] and all other
persons claiming rights under them to vacate the
subject portions of [the] land and surrender
possession thereof to the plaintiff;
2. ORDERING the [respondents] to pay attorney's
fees in the amount of Fifty Thousand Pesos
([P]50,000.00) and Ten Thousand Pesos
([P]10,000.00) litigation expenses.
SO ORDERED.[13]
Aggrieved, respondents elevated the case
before the CA which then reversed and set aside
the decision of the RTC in a Decision dated July
25, 2014. The fallo of the decision reads:
WHEREFORE, the appeal is hereby GRANTED. The
Decision dated May 30, 2012 of the Regional Trial
Court, Branch 10, Malolos, Bulacan is REVERSED
and SET ASIDE. In lieu thereof, the complaint
for accion publiciana with damages filed by
[petitioner] Nestor Cabrera is DISMISSED without
prejudice for lack of jurisdiction.
SO ORDERED.[14]
Finding no cogent reason to deviate from its
previous ruling, the CA denied the Motion for
Reconsideration filed by Cabrera.
Hence, the instant petition raising the following
issues:
A. The Honorable Court of Appeals
committed a reversible error when it held
that "since [petitioner] failed to allege
the assessed value of the subject
property, the court a quo has not
acquired jurisdiction over the action and
all proceedings thereat are null and
void," as such conclusion is contradictory
to the doctrine of estoppel.
B. The Honorable Court of Appeals
committed a reversible error when it
failed to take into consideration the tax
declaration annexed to the Appellee's
Brief which provided the assessed value
of the property subject matter of the
case.
The instant petition lacks merit.
In essence, the issue presented before this Court
is whether or not estoppel bars respondents from
raising the issue of lack of jurisdiction.
Batas Pambansa Bilang 129, (the Judiciary
Reorganization Act of 1980), as amended by
Republic Act (R.A.) No. 7691 provides:
xxxx
Section 19. Jurisdiction in civil cases. - Regional
Trial Courts shall exercise exclusive original
jurisdiction.
(2) In all civil actions which involve the title to, or
possession of, real property, or any interest
therein, where the assessed value of the property
involved exceeds Twenty thousand pesos
(P20,000,00) or, for civil actions in Metro Manila,
where such value exceeds Fifty thousand pesos
(P50,000.00) except actions for forcible entry into
and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon
the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts;
xxxx
Sec. 33. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts in Civil Cases. - Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise:
(3) Exclusive original jurisdiction in all civil actions
which involve title to, or possession of, real
property, or any interest therein where
the assessed value of the property or interest
therein docs not exceed Twenty thousand pesos
(P20,000.00) or, in civil actions in Metro Manila,
where such assessed value does not exceed Fifty
thousand pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney's fees,
litigation expenses and costs: Provided, That in
cases of land not declared for taxation purposes,
the value of such property shall be determined
by the assessed value of the adjacent lots.
x x x[15]
Before the amendments, the plenary action
of accion publiciana was to be brought before
the RTC regardless of the value of the property.
With the modifications introduced by R.A. No.
7691 in 1994, the jurisdiction of the first level courts
has been expanded to include jurisdiction over
other real actions where the assessed value does
not exceed P20,000.00, P50,000.00 where the
action is filed in Metro Manila. Accordingly,
the jurisdictional element is the assessed value of
the property.[16]
A perusal of the complaint readily shows that
Cabrera failed to state the assessed value of the
disputed land, thus:
xxxx
[T]he plaintiffs are the lawful and the registered
owner of a parcel of agricultural land and more
particularly described under Transfer Certificate
of Title No. T-4439, a copy of which is hereto
attached and marked as Annex "A" and made
an integral part hereof;
[T]he defendants had illegally encroached the
property of the plaintiff by means of fraud and
stealth and with force and intimidation.
Defendant Arnel Clarin had encroached an
approximate area of SIXTY THREE (63) SQUARE
METERS, while defendant Milagros Barrios had
encroached an approximate area of FORTY-ONE
(41) SQUARE METERS, defendant Aurora Serafin
had encroached an approximate area of THIRTY
(30) SQUARE METERS while defendant Bonifacio
Moreno had encroached an approximate area
of ELEVEN (11) SQUARE METERS, copy of the
relocation plan is hereto attached and marked
as Annex "B" and made an integral part of this
complaint;
The plaintiffs had already informed the
defendants of the illegal encroachment but the
defendants refused to heed the call of the
plaintiffs to vacate the land in question and
threaten plaintiff with bodily harm;
That prior to the discovery of the encroachment
on or about December 2005, plaintiff was in
actual and physical possession of the premises.
That this matter was referred to the attention of
the Office of the Barangay Chairman of
Barangay Maysulao, Calumpit, Bulacan and a
Lupong Tagapamayapa was constituted but no
conciliation was reached and the Lupon issued a
Certificate to File Action, copy of the Certificate
to File Action is hereto attached and marked as
Annex "C" and made an integral part hereof;
That notwithstanding numerous and persistent
demands, both oral and written, extended upon
the defendants to vacate the subject parcel of
land, they failed and refused and still fail and
refuse to vacate and surrender possession of the
subject parcel of land to the lawful owner who is
plaintiff in this case. Copy of the last formal
demand dated January 18, 2006 is hereto
attached and marked as Annex " " and the
registry receipt as well as the registry return card
as "D" Annexes "D-1," and "D-2," respectively;
That because of this unjustifiable refusal of the
defendants to vacate the premises in question
which they now unlawfully occupy, plaintiffs
[were] constrained to engage the services of
counsel in an agreed amount of FIFTY THOUSAND
PESOS ([P]50,000.00) Philippine Currency, as
acceptance fee and THREE THOUSAND PESOS
([P]3,000.00) Philippine Currency, per day of
Court appearance, which amount the
defendants should jointly and solidarity pay the
plaintiffs, copy of the retaining contract is hereto
attached and marked as Annex "E" and made
an integral part of this complaint;
That in order to protect the rights and interest of
the plaintiffs, litigation expenses will be incurred in
an amount no less than TEN THOUSAND PESOS
([P]10,000.00), which amount the defendants
should jointly and solidarily pay the plaintiffs;
That the amount of THREE THOUSAND PESOS
([P]3,000.00) per month should be adjudicated in
favor of the plaintiff as against the defendants by
way of beneficial use, to be counted from the
day the last formal demand until they fully
vacate and surrender possession of the premises
in question to the plaintiffs. x x x.[17]
In dismissing the case, the CA noted such fact, to
wit:
In the case at bench, the complaint for accion
publiciana filed by [Cabrera] failed to allege the
assessed value of the real property subject of the
complaint or the interest therein. Not even a tax
declaration was presented before the court a
quo that would show the valuation of the subject
property. As such, there is no way to determine
which court has jurisdiction over the action or
whether the court a quo has exclusive jurisdiction
over the same. Verily, the court a quo erred in
denying the motion to dismiss filed by
[respondents] and in taking cognizance of the
instant case.[18]
Indeed, nowhere in the complaint was the
assessed value of the subject property ever
mentioned. On its face, there is no showing that
the RTC has jurisdiction exclusive of the MTC.
Absent any allegation in the complaint of the
assessed value of the property, it cannot readily
be determined which court had original and
exclusive jurisdiction over the case at bar. The
courts cannot take judicial notice of the assessed
or market value of the land.[19]
We note that Cabrera, in his
Comment/Opposition to the Motion to
Dismiss,[20] maintained that the accion
publiciana is an action incapable of pecuniary
interest under the exclusive jurisdiction of the
RTC.[21] Thereafter, he admitted in his Brief before
the CA that the assessed value of the subject
property now determines which court has
jurisdiction over accion publiciana cases. In
asse1iing the trial court's jurisdiction, petitioner
averred that his failure to allege the assessed
value of the property in his Complaint was merely
innocuous and did not affect the jurisdiction of
the RTC to decide the case.
Cabrera alleges that the CA erred in concluding
that the RTC has not acquired jurisdiction over
the action in the instant case being contrary to
the doctrine of estoppel as elucidated in Honorio
Bernardo v. Heirs of Villegas.[22] Estoppel sets in
when respondents participated in all stages of
the case and voluntarily submitting to its
jurisdiction seeking affirmative reliefs in addition
to their motion to dismiss due to lack of
jurisdiction.
We are not persuaded. It is axiomatic that the
nature of an action and the jurisdiction of a
tribunal are determined by the material
allegations of the complaint and the law at the
time the action was commenced.[23] A court's
jurisdiction may be raised at any stage of the
proceedings, even on appeal for the same is
conferred by law, and lack of it affects the very
authority of the court to take cognizance of and
to render judgment on the action.[24] It applies
even if the issue on jurisdiction was raised for the
first time on appeal or even after final judgment.
The exception to the basic rule mentioned
operates on the principle of estoppel by laches
whereby a party may be barred by laches from
invoking the lack of jurisdiction at a late hour for
the purpose of annulling everything done in the
case with the active participation of said party
invoking the plea. In the oft-cited case of Tijam
v. Sibonghanoy,[25] the party-surety invoked the
jurisdictions of both the trial and appellate courts
in order to obtain affirmative relief, and even
submitted the case for final adjudication on the
merits. It was only after the CA had rendered an
adverse decision that the party-surety raised the
question of jurisdiction for the first time in a
motion to dismiss almost fifteen (15) years later.
Hence, the Court adjudicated a party estopped
from assailing the court's jurisdiction, to wit:
xxxx
[a] party cannot invoke the jurisdiction of a court
to secure affirmative relief against his opponent
and, after obtaining or failing to obtain such
relief, repudiate or question that same
jurisdiction. . . ., it was further said that the
question whether the court had jurisdiction either
of the subject matter of the action or of the
parties was not important in such cases because
the party is barred from such conduct not
because the judgment or order of the court is
valid and conclusive as an adjudication, but for
the reason that such practice cannot be
tolerated - obviously for reasons of public policy.
x x x[26]
However, it was explicated in Calimlim v.
Ramirez[27] that Tijam is an exceptional case
because of the presence of laches. Thus:
The lack of jurisdiction of a court may be raised
at any stage of the proceedings, even on
appeal. This doctrine has been qualified by
recent pronouncements which stemmed
principally from the ruling in the cited case
of Sibonghanoy. It is to be regretted, however,
that the holding in said case had been applied
to situations which were obviously not
contemplated therein. The exceptional
circumstance involved in Sibonghanoy which
justified the departure from the accepted
concept of non-waivability of objection to
jurisdiction has been ignored and, instead a
blanket doctrine had been repeatedly upheld
that rendered the supposed ruling
in Sibonghanoy not as the exception, but rather
the general rule, virtually overthrowing altogether
the time-honored principle that the issue of
jurisdiction is not lost by waiver or by estoppel.
In Sibonghanoy, the defense of lack of
jurisdiction of the court that rendered the
questioned ruling was held to be barred by
estoppel by laches. It was ruled that the lack of
judsdictiou having been raised for the first time in
a motion to dismiss filed almost fifteen (15) years
after the questioned ruling had been rendered,
such a plea may no longer be raised for
being barred by laches. As defined in said
case, laches is failure or neglect, for an
unreasonable and unexplained length of time, to
do that which, by exercising due diligence,
could or should have been done earlier; it is
negligence or omission to assert a right within a
reasonable time, warranting a presumption that
the party entitled to assert has abandoned it or
declined to assert it.[28]
In the case of La Naval Drug Corporation v.
Court of Appeals,[29] We illustrated the rule as to
when jurisdiction by estoppel applies and when it
does not, as follows:
xxxx
Lack of jurisdiction over the subject matter of the
suit is yet another matter. Whenever it appears
that the court has no jurisdiction over the subject
matter, the action shall be dismissed (Section 2,
Rule 9, Rules of Court). This defense may be
interposed at any time, during appeal (Roxas vs.
Rafferty, 37 Phil. 957) or even after final
judgment (Cruzcosa vs. Judge Concepcion, et
al., 101 Phil. 146). Such is understandable, as
this kind of jurisdiction is conferred by law and
not within the courts, let alone the parties, to
themselves determine or conveniently set aside.
In People vs. Casiano (111 Phil. 73, 93-94), this
Court, on the issue or estoppel, held:
The operation of the principle of estoppel on the
question of jurisdiction seemingly depends upon
whether the lower court actually had jurisdiction
or not. If it had no jurisdiction, but the case was
tried and decided upon the theory that it had
jurisdiction, the parties are not barred, on appeal,
from assailing such jurisdiction, for the same
'must exist as a matter of law, and may not be
conferred by consent of the parties or by
estoppel' (5 C.J.S., 861-863).
However, if the lower court had jurisdiction, and
the case was heard and decided upon a given
theory, such, for instance, as that the court had
no jurisdiction, the party who induced it to adopt
such theory will not be permitted, on appeal, to
assume an inconsistent position - that the lower
court had jurisdiction. Here, the principle of
estoppel applies. The rule that jurisdiction is
conferred by law, and does not depend upon
the will of the parties, has no bearing thereon. x x
x.[30]
Guided by the abovementioned jurisprudence,
this Court rules that respondents are not
estopped from assailing the jurisdiction of the RTC
over the subject civil case. Records reveal that
even before filing their Answer, respondents
assailed the jurisdiction of the RTC through a
motion to dismiss as there was no mention of the
assessed value of the property in the complaint.
We note that the RTC anchored its denial of
respondents' motion to dismiss on the doctrine
enunciated in a 1977 case - that all cases of
recovery of possession or accion publiciana lie
with the RTC regardless of the value - which no
longer holds true. Thereafter, the respondents
filed their Answer through an omnibus motion to
set aside order of default and to admit Answer.
The circumstances of the present case are
different from the Heirs of Villegas[31] case. First,
petitioner Bernardo in the Heirs of Villegascase
actively participated during the trial by adducing
evidence and filing numerous pleadings, none of
which mentioned any defect in the jurisdiction of
the RTC, while in this case, respondents already
raised the issue of lack of jurisdiction in their
Motion to Dismiss filed before their
Answer. Second, it was only on appeal before
the CA, after he obtained an adverse judgment
in the trial court, that Bernardo, for the first time,
came up with the argument that the decision is
void because there was no allegation in the
complaint about the value of the property; on
the other hand, herein respondents raised the
issue before there was judgment on the merits in
the trial court. Respondents never assumed
inconsistent position in their appeal before the
CA.
Furthermore, the unfairness and inequity that the
application of estoppel seeks to avoid espoused
in the Tijam case, which the Heirs of
Villegas adheres to, are not present. The instant
case does not involve a situation where a party
who, after obtaining affirmative relief from the
court, later on turned around to assail the
jurisdiction of the same court that granted such
relief by reason of an unfavorable judgment.
Respondents did not obtain affirmative relief from
the trial court whose jurisdiction they are
assailing, as their motion to dismiss was denied
and they eventually lost their case in the
proceedings below.
Anent the issue of the CA's failure to consider the
tax declaration annexed in the Appellee's Brief,
Cabrera insists that its attachment in his Brief
without objection from the other party sealed the
issue of the RTC's jurisdiction, and cured the
defect of failure to allege the assessed value of
the property in the complaint as provided in
Section 5,[32] Rule 10 of the Rules of Court.
Such averments lack merit. The Rules of Court
provides that the court shall consider no
evidence which has not been formally
offered.[33] A formal offer is necessary because
judges are mandated to rest their findings of
facts and their judgment only and strictly upon
the evidence offered by the parties at the trial. Its
function is to enable the trial judge to know the
purpose or purposes for which the proponent is
presenting the evidence. Conversely, this allows
opposing parties to examine the evidence and
object to its admissibility. Moreover, it facilitates
review as the appellate court will not be required
to review documents not previously scrutinized
by the trial court.[34] We relaxed the foregoing
rule and allowed evidence not formally offered
to be admitted and considered by the trial court
provided the following requirements are
present, viz.: first, the same must have been duly
identified by testimony duly recorded
and, second, the same must have been
incorporated in the records of the case.[35]
Based on the petitioner's admission, he presented
the Tax Declaration 2006-07016-00394[36] dated
November 13, 2006 purporting to prove the
assessed value of the property for the first time on
appeal before the CA in his Brief.[37] There was no
proof or allegation that he presented the same
during the trial or that the court examined such
document.[38] Since the tax declaration was
never duly identified by testimony during the trial
albeit incorporated in the Appellee's Brief, the
CA will not be required to review such document
that was not previously scrutinized by the RTC. As
the assessed value is a jurisdictional requirement,
the belated presentation of document proving
such value before the appellate court will not
cure the glaring defect in the complaint. Thus,
jurisdiction was not acquired.
We find Cabrera's application of Section 5, Rule SO ORDERED.
10 of the Rules of Court to support his claim that
failure of the respondents to object to his Velasco, Jr., (Chairperson), Perez, Reyes,
presentation of the tax declaration before the and Jardeleza, JJ., concur.
CA constitutes an implied consent which then
treated the issue of assessed value as if it had
been raised in the pleadings specious. Such rule
contemplates an amendment to conform to or
authorize presentation of evidence before the
trial court during the trial on the merits of the
case. As held in Bernardo, Sr. v. Court of
Appeals,[39] this Court expounded: December 16, 2016

It is settled that even if the complaint he

defective, but the parties go to trial thereon, and NOTICE OF JUDGMENT
the plaintiff, without objection, introduces
sufficient evidence to constitute the particular
cause of action which it intended to allege in the Sirs / Mesdames:
original complaint, and the defendant voluntarily
produces witnesses to meet the cause of action Please take notice that on November 28, 2016 a
thus established, an issue is joined as fully and as Decision, copy attached hereto, was rendered
effectively as if it had been previously joined by by the Supreme Court in the above-entitled
the most perfect pleadings. Likewise, when issues case, the original of which was received by this
not raised by the pleadings are tried by express Office on December 16, 2016 at 11:00 a.m.
or implied consent of the parties, they shall be
treated in all respects as if they had been raised
in the pleadings.[40] (Emphases supplied)
Very truly
It bears emphasis that the ruling
yours,
in Tijam establishes an exception which is to be
(SGD)
applied only under extraordinary circumstances
WILFREDO V.
or to those cases similar to its factual
LAPITAN
situation.[41] The general rule is that the lack of a
Division
court's jurisdiction is a non-waivable defense that
Clerk of
a party can raise at any stage of the
Court
proceedings in a case, even on appeal; the
doctrine of estoppel, being the exception to
such non-waivable defense, must be applied
with great care and the equity must be strong in
its favor.[42]
Penned by Associate Justice Ramon R. Garcia,
[1]

with Associate Justices Remedios A. Salazar-

All told, We find no error on the part of the CA in
Fernando and Danton Q. Bueser,
dismissing the Complaint for lack of jurisdiction
concurring; rollo, pp. 32-41.
and for not reviewing the document belatedly
filed. Consequently, all proceedings in the RTC [2] Id. at 43-44.
are null and void. Indeed, a void judgment for
want of jurisdiction is no judgment at all, and
Penned by Judge Basilio R. Gabo, Jr.; id. at 87-
[3]
cannot be the source of any right nor the creator
88.
of any obligation. All acts performed pursuant to
it and all claims emanating from it have no legal [4] Id. at 45-48.
effect.[43]
Cabrera was joined by his wife in the
[5]
WHEREFORE, petition for review on certiorari filed
complaint filed before the RTC.
by petitioner Nestor Cabrera is hereby DENIED.
The assailed Decision dated July 25, 2014 and [6] Rollo, p. 33.
Resolution dated November 21, 2014 of the Court
of Appeals in CA-G.R. CV No. 100950 are [7] Id. at 55-57.
hereby AFFIRMED.
[8] Id. at 56. not raised by the pleadings are tried with the
express or impI ied consent of the parties they
Penned by Presiding Judge Victoria Villalon-
[9] shall be treated in all respects as if they had
Pornillos; id. at 34. been raised in the pleadings. Such amendment
of the pleadings as may be necessary to cause
[10] 169 Phil. 473, 476 (1977). them to conform to the evidence and to raise
these issues may be made upon motion of any
[11] Rollo, p. 67. party at any time, even after judgment; but
failure to amend does not effect the result of the
[12] Id. at 73-77. trial or these issues. If evidence is objected to at
the trial on the ground that it is not within the
[13] Id. at 88. (Emphasis omitted). issues made by the pleadings, the court may
allow the pleadings to be amended and shall do
[14] Id. at 40. (Emphasis omitted). so with liberality if the presentation of the merits
of the action and the ends of substantial justice
[15] Emphasis and underscoring supplied. wilt be subserved thereby. The court may grant a
continuance to enable the amendment to be
Vda. de Barrera v. Heirs of Legaspi, 586 Phil.
[16] made.
750, 756 (2008). (Emphasis supplied)
Rule 132, Section 34, Offer of evidence. - The
[33]
[17] Rollo, pp. 45-46. court shall consider no evidence which has not
been formally offered. The purpose for which the
[18] Id. at 37. evidence is offered must be specified.

Quinagoran v. Court of Appeals, 557 Phil. 650,

[19] Heirs of Saves v. Heirs of Saves, 646 Phil. 536,
[34]

660-661 (2007). 544 (2010). (Emphasis supplied).

[20] Rollo, pp. 59-60. Id., citing People v. Napat-a, 258-A Phil. 994,
[35]

998 (1989), citing People v. Mate, 191 Phil. 72, 82

[21] Id. at 59. (1981).

[22] 629 Phil 450, 459 (2010). [36] Rollo, p. 148.

[23]Malana v. Tappa, 616 Phil. 177, 190 (2009), [37] Id. at 141.
citing Laresma v. Abellana, 484 Phil. 766, 778-779
(2004). Formal Offer of Evidence of Petitioner before
[38]

the RTC; id. at 68-69.

Zacarias v. Anacay, G.R. No. 202354,
[24]

September 24, 2014, 736 SCRA 508, 522. [39] 331 Phil. 962 (1996).

[25] 131 Phil. 556, 565 (1968). Bernardo, Sr. v. Court of Appeals, supra, at
[40]

978. (Emphases supplied.)

Tijam v. Sibonghanoy, supra, at 564. (Emphasis
[26]

ours) [41] Regalado v. Go, 543 Phil. 578, 598 (2007).

[27] Calimlim v. Ramirez, 204 Phil. 25, 35 (1982). C & S Fishfarm Corp. v. CA, 442 Phil. 279, 290-
[42]

291 (2002).
[28] Id. (Emphasis supplied)
[43] Zacarias v. Anacay, supra note 24.
[29] G.R. No. 103200, August 31, 1994, 236 SCRA 78.

La Naval Drug Corporation v. Court of

[30]

Appeals, supra, at 90. (Emphases supplied)

January 11, 2016
[31] Supra note 22.
G.R. No. 197825
Section 5. Amendment to conform to or
[32]

authorize presentation of evidence. - When issues

CAMILO SIBAL, Petitioner,
vs.
PEDRO BUQUEL, SANTIAGO BUQUEL, JR.,
ROSALINDA BUQUEL, represented by FRANCISCO
BUQUEL,Respondents.
DECISION
PERALTA, J.:
Before the Court is a Petition for Review under
Rule 45 of the Rules of Court which petitioner
Camilo Sibal filed, assailing the Decision1 of the
Court of Appeals (CA), dated March 16, 2011,
and its Resolution2 dated July 7, 2011 in CA-G.R.
SP NO. 104774. The CA affirmed the Decision3 of
the Regional Trial Court (RTC) of Tuguegarao
City, Cagayan, Branch 02, dated January 5,
2007, in Civil Case No. 6429.
The facts, as gathered from the records, are as
follows:
Respondents Pedro Buquel, Santiago .Buquel, Jr.,
Rosalinda Buquel and Francisco Buquel inherited
from their parents, Santiago Buquel, Sr. and
Faustina Buquet, a parcel of land cqnsisting of
81,022 sq. m. covered by Original Certificate of
Title No. 0-725. Sometime in January 1999,
petitioner Camilo Sibal and Tobi Mangoba took
possession of a portion of the property which
belonged to Santiago, Sr. Thereafter, the Buquels
made several demands against Sibal and
Mangoba for them to vacate and turn over the
property, but the latter refused to do so. Hence,
they filed a complaint before the Tuguegarao
RTC for recovery 0f possession and damages.
On January 5, 2007, the Tuguegarao RTC ruled in
favor of the Buquels, the decretal portion of the
Decision provides:
WHEREFORE, in the light of the foregoing, the
Court hereby renders judgment in favor of the
Plaintiffs Pedro Buquel, Santiago Buquel, Jr.,
Rosalinda Buquel, and Francisco I3uquel as
against Defendants Camilo Sibal and Tobi
Mangoba ordering:
1.The restoration to Plaintiffs of their
peaceful possession of the land in
question, specifically on the share of
Santiago Buquel; Jr.;
2. The Defendants to pay the plaintiffs
the amount of Ten Thousand Pesos for
Attorney's Fees; and
3. The Defendants to pay to the Plaintiffs
the amount of Fifteen Thousand Pesos as
moral and actual damages.
SO ORDERED.4
Thereafter, said RTC Decision became final and
executory; hence, the trial court issued a writ of
execution.
On August 8, 2008, Sibal filed a Petition for
Annulment of the RTC Decision before the CA,
where he raised lack of jurisdiction and extrinsic
fraud as grounds. On March 16, 201l, the CA
dismissed Sibal' s petition, thus:
WHEREFORE, premises considered, the instant
petition is hereby DISMISSED for lack of merit.
SO ORDERED.5
Sibal filed a Motion for Reconsideration, but the
same was denied. Thus, he filed the instant
petition.
Sibal maintains that the RTC did not acquire
jurisdiction over the case and that the Buquels
were guilty of extrinsic fraud.
The petition is devoid of merit.
Sibal contends that the RTC Decision should be
annulled on the ground that the RTC never
acquired jurisdiction over the case as the
complaint filed merely alleged that the value of
the subject property is P51,190.00, without,
however, categorically- mentioning its assessed
value, and only the real property tax order of
payment was attached to the complaint and
not the tax declaration that would determine the
assessed value of the property. But, upon review
of the records, the Court notes that the Real
Property Tax Order of Payment No. 091-05713-03
dated November 24, 2002, or "Exhibit C," shows
that the amount of P5l,190.00 is truly the assessed
value of the property, which fact Sibal failed to
refute.
A petition for annulment of judgment is a remedy
in equity so exceptional in nature that it may be
availed of only if the judgment, final order, or
final resolution sought to be annulled was
rendered by a court lacking jurisdiction or
through extrinsic fraud, and only when other
remedies are wanting.6 In the present case, Sibal
was able to avail of other remedies when he filed
before the RTC a motion to quash the writ of
execution and a motion to annul judgment.
Moreover, parties aggrieved by final judgments,
orders or resolutions cannot be allowed to easily
and readily abuse a petition for annulment of
judgment.1wphi1 Thus, the Court has instituted
safeguards by limiting the grounds for annulment
to lack of jurisdiction and extrinsic fraud, and by
prescribing in Section 1 of Rule 47 of the Rules of
Court that the petitioner should show that the
ordinary remedies of new trial, appeal, petition
for relief or other appropriate remedies are no
longer available without fault on the part of the
petitioner. A petition for annulment that ignores
or disregards any of the safeguards cannot
prosper.7
Further, it must be emphasized that not every
kind of fraud justifies the action of annulment of
judgment. Only extrinsic fraud does. According
to Cosmic Lumber Corporation v. Court of
Appeals,8 fraud is extrinsic when the unsuccessful
party has been prevented from fully exhibiting his
case, by fraud or deception practiced on him by
his opponent, as by keeping him away ,from
court, a false promise of a compromise; or where
the defendant never had knowledge of the suit,
being kept in ignorance by the acts of the
plaintiff; or where an attorney fraudulently or
without authority connives at his defeat; these
and similar cases which show that there has
never been a real contest in the trial or hearing
of the case are reasons for which a new suit may
be sustained to set aside and annul the former
judgment and open the case for a new and fair
hearing.
As a ground for annulment of judgment, extrinsic
fraud must arise from an act of the adverse
party, and the fraud must be of such nature as to
have deprived the petitioner of its clay in court.
The fraud is not extrinsic if the act was committed
by the petitioner's own counsel.9
The case at bar is closely similar to, if not the
same with the case of Pinausukan Seafood
House v. FEBTC.10 In this case, the Court noticed
that the petition's own language mentioned
mistake and gross negligence on the part of
petitioner's own counsel. The petition even
suggested that the negligence of its counsel may
constitute professional misconduct. The Court
then ruled that such neglect of counsel, even if it
were true, was not tantamount to extrinsic fraud
because it did not emanate from any act of
FEBTC as the prevailing party, and did not occur
outside the trial of the case. What is certain, for
purposes of application of Rule 47, is that mistake
and gross negligence cannot be equated to the
extrinsic fraud under Rule 47. By its very nature,
extrinsic fraud relates to a cause that is collateral
in character, i.e., it relates to any fraudulent act
9f the prevailing party in litigation which is
committed outside of the trial of the case, where
the defeated party has been prevented from
presenting fully his side of the cause, by fraud or
deception practiced on him by his opponent.
And even in the presence of fraud, annulment
will not lie unless the fraud is committed by the
adverse party, not by one's own lawyer. In the
latter case, the remedy of the client is to
proceed against his own lawyer and not to re-
litigate the case where judgment had been
rendered.
Sibal asserts that the negligence of his former
counsel in handling his defense during the
proceedings in Civil Case No. 6429 resulted in
violation of his right to due process. He claims
that his counsel's inexcusable negligence denied
him of his clay in court. However, he admitted
that he attended only one stage of the
proceedings below, which was the preliminary
conference. He was not aware of the
subsequent proceedings as he was totally
dependent on his former counsel and would
merely wait for the latter to notify him if his
attendance would be required. There was
likewise no indication that his counsel was in fact
in cahoots with the Buquels to obtain the assailed
judgment. Sibal must therefore bear the
unfortunate consequences of his actions. As a
litigant, he should not have entirely left the case
in his counsel's hands, for he had the continuing
duty to keep himself abreast of the
developments, if only to protect his own interest
in the litigation. He could have discharged said
duty by keeping in regular touch with his counsel,
but he failed to do so.11
WHEREFORE, the petition is DENIED. The Decision
of the Court of Appeals dated March 16, 2011
and its Resolution dated July 7, 2011 in CA-G.R.
SP No. 104774 are hereby AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA 3Penned by Judge Vilma T. Pauig; id. at
Associate Justice 38-40.

WE CONCUR: 4 Rollo, p. 24.

PRESBITERO J. VELASCO, JR. 5 Id. at 97. (Emphasis on the original)

Associate Justice
Chairperson 6Pinausukan Seafood House Roxas
Boulevard, Inc. v. FEBTC, now BPI, G.R.
MARTIN S. No. 159926, January 20, 2014, 714 SCRA
BIENVENIDO L. REYES 226, 240.
VILLARAMA, JR.
Associate Justice
Associate Justice
7 Id.
FRANCIS H. JARDELEZA
Associate Justice 8 332 Phil. 948, 961-962 (1996).

ATTESTATION 9Pinausukan Seafood House v. FEBTC,

supra note 6, at 249.
I attest that the conclusions in the above
Decision had been reached in consultation 10 Supra note 6.
before the case was assigned to the writer of the
opinion of the Court's Division. 11 Id. at 250.

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson, Third Division

CERTIFIC ATI ON
THIRD DIVISION

Pursuant to Section 13, Article VIII of the

Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the
above Decision had been reached in
consultation before the case was assigned to the
writer of the opinion of the Court's Division.
[ G.R. No. 209011, April 20, 2016 ]
MALAYAN INSURANCE COMPANY, INC.,
PETITIONER, VS. DIANA P. ALIBUDBUD,
RESPONDENT.

MARIA LOURDES P.A. SERENO DECISION

Chief Justice
REYES, J.:
CERTIFIED TRUE COPY
Before this Court is a Petition for Review[1] under
WILFREDO V. LAPITAN
Rule 45 of the 1997 Rules of Court filed by
Division Clerk of Court
Malayan Insurance Company, Inc. (Malayan)
Third Division
seeking to reverse and set aside the
February 04, 2016
Decision[2] dated May 15, 2013 and
Resolution[3] dated September 6, 2013 of the
Footnotes Court of Appeals (CA) in CA-G.R. CV No. 92940,
which dismissed their complaint for replevin
1 Penned by Associate Justice Sesinando against Diana P. Alibudbud (Alibudbud) for lack
E. Villon, with Associate Justices Andres B. of jurisdiction.
Reyes, Jr. (now Presiding Justice) and
Elihu A. Ybaez; concurring; rollo, pp.
84.97. Factual Background

2 Id. at 109. Alibudbud was employed by Malayan on July 5,

2004 as Senior Vice President (SVP) for its Sales
Department. As SVP, she was issued a 2004
Honda Civic sedan bearing plate no. XPR 822
under Malayan's Car Financing
Plan[4] conditioned on the following stipulations:
(1) she must continuously stay and serve Malayan
for at least three full years from the date of the
availment of the Car Financing Plan; and (2) that
in case of resignation, retirement or termination
before the three-year period, she shall pay in full
100% share of Malayan and the outstanding
balance of his/her share of the cost of the motor
vehicle.[5]
Relatively, Alibudbud also executed a Promissory
Note[6] and a Deed of Chattel Mortgage[7] in
favor of Malayan wherein it was expressly stated
that: (1) the loan of P360,000.00 shall be payable
in 60 equal monthly installments at the rate of
P7,299.50 each, commencing on August 15, 2004
and every succeeding month thereafter until fully
paid; (2) Alibudbud shall refund Malayan an
amount equivalent to its 50% equity share in the
motor vehicle, or P360,000.00 if she leaves
Malayan within three years from the availment of
the subject vehicle; (3) should Alibudbud resign,
retire or otherwise be terminated or separated
from Malayan's employ, any remaining unpaid
balance on the principal obligation shall
immediately fall due and demandable upon her
who shall remit the same to Malayan within five
days from effectivity of such
separation/termination; (4) Malayan is authorized
to apply to the payment of outstanding
obligation of Alibudbud any such amounts of
money that may be due her from the company;
(5) interests on all amounts outstanding as of the
date when all Alibudbud's obligations are
treated immediately due and payable, shall be
compounded every 30 days until said obligations
are fully paid; (6) Alibudbud shall pay a penalty
at the rate of 16% per annum on all amounts due
and unpaid; (7) in case Alibudbud fails to pay
any installment, or any interest, or the whole
amount remaining unpaid which has
immediately become due and payable upon
her separation from the Malayan, the mortgage
on the property may be foreclosed by Malayan,
or it may take other legal action to enforce
collection of the obligation; (8) upon default,
Alibudbud shall deliver the possession of the
subject vehicle to Malayan at its principal place
of business; and (9) should Alibudbud fail or
refuse to deliver the possession of the mortgaged
property to Malayan, thereby compelling it to
institute an action for delivery, Alibudbud shall
pay Malayan attorney's fees of 25% of the
principal due and unpaid, and all expenses and
cost incurred in relation therewith including the
premium of the bond obtained for the writ of
possession.[8]
On July 18, 2005, Alibudbud was dismissed from
Malayan due to redundancy. In view thereof,
Malayan demanded that she surrender the
possession of the car to the company. Alibudbud
sternly refused to do so.
On September 21, 2005, Malayan instituted a
Complaint[9] for replevin and/or sum of money
before the Regional Trial Court (RTC) of Manila
and prayed for the seizure of the car from
Alibudbud, or that she be ordered to pay
P552,599.93 representing the principal obligation
plus late payment charges and P138,149.98 as
attorney's fees, should said car be no longer in
running and presentable condition when its
return be rendered impossible.
On October 12, 2005, Alibudbud, in turn, filed a
complaint[10] for illegal dismissal against Malayan
before the Labor Arbiter (LA) wherein she prayed
for her reinstatement.
In her Answer with Compulsory
Counterclaim,[11] Alibudbud asseverated that a
reasonable depreciation of 20% should be
deducted from the subject vehicle's book value
of P720,000.00, or P576,000.00, which makes her
liable to pay only P288,000.00 for the car's
value.[12]She asserted a counterclaim of
P17,809.00[13] as compensatory damages and
P40,000.00 as attorney's fees.[14] She prayed for
the suspension of the proceedings in view of the
pendency of the labor dispute she filed. This was,
however, questioned by Malayan in its reply[15] as
there was no prejudicial question[16] raised in the
labor dispute.
On January 30, 2006, Alibudbud filed a Motion to
Suspend Proceedings[17] to reiterate her prayer to
defer the proceedings, asseverating that the
labor case she filed presents a prejudicial
question to the instant case. She explained that
the resolution of the labor case will determine her
rights and obligations, as well as that of Malayan.
In an Order[18] dated February 17, 2006, the RTC
of Manila, Branch 27, denied Alibudbud's motion.
It was opined that: (1) reference shall be made
only on the Promissory Note which Alibudbud
executed in favor of Malayan in determining the
rights and obligations of the parties; (2) the cause
of action in the replevin case is rooted from the
Promissory Note; and (3) the issue in the labor
dispute is in no way connected with the rights
and obligations of the parties arising out of the
Promissory Note.
Trial on the merits ensued.
On July 13, 2006, Alibudbud moved for the
dismissal[19] of the action grounded on the
impropriety of the bond put up by Malayan. This
was, however, denied by the RTC in its
Order[20] dated October 5, 2006 with the
pronouncement that Malayan "can[,] by itself[,]
file a surety bond in order to guaranty the return
of the subject property to the adverse party if
such return be finally adjudged x x x."[21]
Alibudbud sought for reconsideration,[22] but it
was denied in the RTC's Order[23] dated
December 19, 2006.
Alibudbud then successively filed motions to
suspend the proceedings in the civil case
anchored on the same averment that suspension
is necessary since she is seeking reinstatement in
the labor case which, if granted, would result to
irreconcilable conflict not contemplated by law,
much less conducive to the orderly
administration of justice.[24] However, both
motions were denied in an Order[25] dated June
6, 2007. The RTC pointed out that the issue raised
in the civil action is completely separable with
the issue raised in the labor case.[26]
Malayan applied for an ex-parte issuance of a
writ of preliminary attachment,[27] which the RTC
granted in its Order dated June 8, 2007.[28] The
Honda Civic sedan was, accordingly, attached.
Meanwhile, the complaint for illegal dismissal
filed by Alibudbud was dismissed. The LA's
Decision[29] dated February 19, 2008 held that the
redundancy she suffered resulted from a valid re-
organization program undertaken by Malayan in
view of the downturn in the latter's sales.[30] It
further ruled that Alibudbud failed to establish
any violation or arbitrary action exerted upon her
by Malayan, which merely exercised its
management prerogative when it terminated
her services.[31]
On November 28, 2008, the RTC rendered a
Decision[32] which granted the complaint for
replevin. The RTC mentioned the following
observations and conclusions, to wit: (1)
Alibudbud is under obligation to pay in full the
acquisition cost of the car issued to her by
Malayan; (2) the LA's Decision dated February 19,
2008 which dismissed the illegal dismissal
complaint settled the issue being banked upon
by Alibudbud when she moved for the
suspension of the proceedings in the civil action;
(3) Alibudbud's ownership over the car is not yet
absolute for it bears the notation "encumbered",
thereby signifying her obligation to pay its value
within the period set forth in the Promissory Note
and Deed of Chattel Mortgage; and (4) the
replevin action was converted into a money
claim in view of Alibudbud's vehement refusal to
surrender the possession of the car.
Ruling of the CA
On appeal, the CA ruled, in its Decision[33] dated
May 15, 2013, to set aside the decision of the trial
court. The CA explained that the RTC has no
jurisdiction to take cognizance over the replevin
action because of the "employer-employee"
relations between the parties which Malayan
never denied. Certainly, Alibudbud could not
have availed of the benefits of the Car Financing
Plan if she was not employed by Malayan. Citing
Section 1,[34] Rule 9 of the 1997 Rules of Court, the
CA upheld to dismiss the replevin action
considering that the ground of lack of jurisdiction
may be raised at any stage of the proceedings
since jurisdiction is conferred by law.[35]
Malayan's motion for reconsideration[36] was
denied.[37] Hence, this petition.
Ruling of the Court
The petition is impressed with merit.
It is well-settled that "(t)he jurisdiction of the
Supreme Court in cases brought to it from the CA
is limited to reviewing and revising the errors of
law imputed to it, its findings of fact being
conclusive. In several decisions, however, the
Court enumerated the exceptional
circumstances when the Supreme Court may
review the findings of fact of the CA," [38] such as
in the instant case.
A careful study of the case would reveal that the
RTC correctly took cognizance of the action for
replevin contrary to the pronouncement of the
CA.
"Replevin is an action whereby the owner or
person entitled to repossession of goods or
chattels may recover those goods or chattels
from one who has wrongfully distrained or taken,
or who wrongfully detains such goods or chattels.
It is designed to permit one having right to
possession to recover property in specie from one Decision dated May 15, 2013 and Resolution
who has wrongfully taken or detained the dated September 6, 2013 of the Court of Appeals
property. The term may refer either to the action in CA-G.R. CV No. 92940 are REVERSED and SET
itself, for the recovery of personalty, or to the ASIDE. The Decision dated November 28, 2008 of
provisional remedy traditionally associated with the Regional Trial Court of Manila, Branch 27, in
it, by which possession of the property may be Civil Case No. 05-113528 is,
obtained by the plaintiff and retained during the accordingly, REINSTATED.
pendency of the action."[39]
SO ORDERED.
In reversing the trial court's ruling, the CA
declared that "[Alibudbud] could not have Velasco, Jr., (Chairperson), Peralta, Perez,
availed of the Car Financing Plan if she was not and Jardeleza, JJ., concur.
an employee of [Malayan]. The status of being
an employee and officer of [Alibudbud] in
[Malayan] was, therefore, one of the pre-
condition before she could avail of the benefits
of the Car Financing Plan. Such being the case,
there is no doubt that [Alibudbud's] availing of
the Car Financing Plan being offered by
[Malayan] was necessarily and intimately June 13, 2016
connected with or related to her employment in
the aforesaid Company."[40]

It should be noted, however, that the present

action involves the parties' relationship as debtor
and creditor, not their "employer-employee" NOTICE OF JUDGMENT
relationship. Malayan's demand for Alibudbud to
pay the 50% company equity over the car or, to
surrender its possession, is civil in nature. The trial
Sirs / Mesdames:
court's ruling also aptly noted the Promissory Note
and Deed of Chattel Mortgage voluntarily signed
Please take notice that on April 20, 2016 a
by Alibudbud to secure her financial obligation
Decision, copy attached hereto, was rendered
to avail of the car being offered under Malayan's
by the Supreme Court in the above-entitled
Car Financing Plan.[41] Clearly, the issue in the
case, the original of which was received by this
replevin action is separate and distinct from the
Office on June 13, 2016 at 1:45 p.m.
illegal dismissal case. The Court further considers
it justified for Malayan to refuse to accept her
offer to settle her car obligation for not being in
accordance with the Promissory Note and Deed
of Chattel Mortgage she executed.[42]Even the Very truly yours,
illegal dismissal case she heavily relied upon in (SGD)WILFREDO V. LAPITAN
moving for the suspension of the replevin action Division Clerk of Court
was settled in favor of Malayan which was
merely found to have validly exercised its
management prerogative in order to improve its
company sales.

As consistently held, "[t]he characterization of an

employee's services as superfluous or no longer
necessary and, therefore, properly terminable, is [1] Rollo, pp. 3-28.
an exercise of business judgment on the part of
the employer. The wisdom and soundness of such Penned by Associate Justice Danton Q.
[2]
characterization or decision is not subject to Bueser, with Associate Justices Amelita G.
discretionary review provided, of course, that a Tolentino and Ramon R. Garcia concurring; id. at
violation of law or arbitrary or malicious action is 29-44.
not shown."[43]
[3] Id. at 46-47.
WHEREFORE, in view of the foregoing, the
[4] Id. at 104-106.
[33] Id. at 29-44.
[5] Id. at 30.
Section 1. Defenses and objections not
[34]
[6] Id. at 109-111. pleaded. Defenses and objections not
pleaded either in a motion to dismiss or in the
[7] Id. at 112-117. answer are deemed waived. However, when it
appears from the pleadings or the evidence on
[8] Id. at 30-32. record that the court has no jurisdiction over the
subject matter, that there is another action
[9] Id. at 93-103. pending between the same parties for the same
cause, or that the action is barred by a prior
[10] Id. at 179-180. judgment or by statute of limitations, the court
shall dismiss the claim.
[11] Id. at 127-130.
[35] Rollo, p. 43.
[12] Id. at 128.
[36] Id. at 376-380.
[13] Id.
[37] Id. at 46-47.
[14] Id. at 129.
Republic v. Bellate, G.R. No. 175685, August 7,
[38]
[15] Id. at 132-139. 2013, 703 SCRA 210, 218, citing Remalante v.
Tibe, 241 Phil. 930, 935-936 (1988).
[16] Id. at 134.
Smart Communications, Inc. v. Astorga, 566
[39]
[17] Id. at 201-202. Phil. 422, 435 (2008).

[18] Id. at 213-214. [40] Rollo, p. 39.

[19] Id. at 264-272. [41] Id. at 57.

[20] Id. at 284-288. [42] Id. at 58.

[21] Id. at 288. Smart Communications, Inc. v. Astorga, supra

[43]

note 39, at 437.

[22] Id. at 292-299.

[23] Id. at 304.

[24] Id. at 35.

[25] Id. at 317.

[26] Id.

[27] Id. at 318-325.

[28] Id. at 330-332.

LEONEN, J.:
[29] Id. at 336-348. The plaintiff may first prove the employer's
ownership of the vehicle involved in a mishap by
[30] Id. at 342. presenting the vehicle's registration in evidence.
Thereafter, a disputable presumption that the
[31] Id. at 344. requirements for an employer's liability under
Article 2180[1] of the Civil Code have been
Rendered by Judge Teresa P. Soriaso; id. at
[32]
satisfied will arise. The burden of evidence then
49-59. shifts to the defendant to show that no liability
under Article 2180 has ensued. This case, thus,
harmonizes the requirements of Article 2180, in
relation to Article 2176[2] of the Civil Code, and
the so-called registered-owner rule as established
in this court's rulings in Aguilar, Sr. v. Commercial
Savings Bank,[3] Del Carmen, Jr. v. Bacoy,[4] Filcar
Transport Services v. Espinas,[5] and Mendoza v.
Spouses Gomez.[6]
Through this Petition for Review on
Certiorari,[7] Caravel Travel and Tours
International, Inc. (Caravan) prays that the
Decision[8] dated October 3, 2005 and the
Resolution[9] dated November 29, 2005 of the
Court of Appeals Twelfth Division be reversed
and set aside.[10]
On July 13, 2000, Jesmariane R. Reyes (Reyes)
was walking along the west-bound lane of
Sampaguita Street, United Paraaque
Subdivision IV, Paraaque City.[11] A Mitsubishi L-
300 van with plate number PKM 195[12] was
travelling along the east-bound lane, opposite
Reyes.[13] To avoid an incoming vehicle, the van
swerved to its left and hit Reyes.[14] Alex Espinosa
(Espinosa), a witness to the accident, went to her
aid and loaded her in the back of the
van.[15] Espinosa told the driver of the van, Jimmy
Bautista (Bautista), to bring Reyes to the
hospital.[16] Instead of doing so, Bautista
appeared to have left the van parked inside a
nearby subdivision with Reyes still in the
van.[17] Fortunately for Reyes, an unidentified
civilian came to help and drove Reyes to the
hospital.[18]
Upon investigation, it was found that the
registered owner of the van was
Caravan.[19] Caravan is a corporation engaged
in the business of organizing travels and
tours.[20] Bautista was Caravan's employee
assigned to drive the van as its service driver.[21]
Caravan shouldered the hospitalization expenses
of Reyes.[22] Despite medical attendance, Reyes
died two (2) days after the accident.[23]
Respondent Ermilinda R. Abejar (Abejar), Reyes'
paternal aunt and the person who raised her
since she was nine (9) years old,[24] filed before
the Regional Trial Court of Paraaque a
Complaint[25] for damages against Bautista and
Caravan. In her Complaint, Abejar alleged that
Bautista was an employee of Caravan and that
Caravan is the registered owner of the van that
hit Reyes.[26]
Summons could not be served on
Bautista.[27] Thus, Abejar moved to drop Bautista
as a defendant.[28] The Regional Trial Court
granted her Motion.[29]
After trial, the Regional Trial Court found that
Bautista was grossly negligent in driving the
vehicle.[30] It awarded damages in favor of
Abejar, as follows:
WHEREFORE, considering that the [respondent]
was able to provide by preponderance of
evidence her cause of action against the
defendants, judgment is hereby rendered
ordering defendants JIMMY BAUTISTA and
CARAVAN TRAVEL and TOURS[,] INC., to jointly
and solidarity pay the plaintiff, the following, to
wit:
1. The amount of P35,000.00 representing actual
damages;
2. The amount of P300,000.00 as moral damages;
3. The amount of P30,000.00 as exemplary
damages;
4. The amount of P50,000.00 as and by way of
attorney's fees; and
5. The cost of suit.
SO ORDERED.[31]
Caravan's Motion for Reconsideration[32] was
denied through the October 20, 2003 Order[33] of
the Regional Trial Court.
The Court of Appeals affirmed with modification
the Regional Trial Court's July 31, 2003 Decision
and October 20, 2003 Order, as follows:
WHEREFORE, premises considered, the instant
appeal is DENIED for lack of merit. The assailed
Decision dated 31 July 2003 and Order dated 20
October 2003 of the Regional Trial Court, City of
Para[]aque, Branch 258, in Civil Case No. 00-
0447 are AFFIRMED with the
following MODIFICATIONS:
1. Moral Damages is REDUCED to Php
200,000.00;
2. Death Indemnity of Php 50,000.00 is
awarded;
3. The Php 35,000.00 actual damages, Php
200,000.00 moral damages, Php
30,000.00 exemplary damages and Php
50,000.00 attorney's fees shall earn
 interest at the rate of 6% per
annum computed from 31 July 2003, the
date of the [Regional Trial Court's]
decision; and upon finality of this
Decision, all the amounts due shall earn
interest at the rate of 12% per annum, in
lieu of 6% per annum, until full payment;
and
4. The Php 50,000.00 death indemnity shall
earn interest at the rate of 6% per
annum computed from the date of
promulgation of this Decision; and upon
finality of this Decision, the amount due
shall earn interest at the rate of 12% per
annum, in lieu of 6% per annum, until full
payment.
Costs against [Caravan].
SO ORDERED.[34]
Caravan filed a Motion for Reconsideration, but it
was denied in the Court of Appeals' assailed
November 29, 2005 Resolution.[35]
Hence, this Petition was filed.
Caravan argues that Abejar has no personality to
bring this suit because she is not a real party in
interest. According to Caravan, Abejar does not
exercise legal or substitute parental authority. She
is also not the judicially appointed guardian or
the only living relative of the deceased.[36] She is
also not "the executor or administrator of the
estate of the deceased."[37] According to
Caravan, only the victim herself or her heirs can
enforce an action based on culpa
aquiliana such as Abejar's action for damages.[38]
Caravan adds that Abejar offered no
documentary or testimonial evidence to prove
that Bautista, the driver, acted "within the scope
of his assigned tasks"[39] when the accident
occurred.[40] According to Caravan, Bautista's
tasks only pertained to the transport of company
personnel or products, and when the accident
occurred, he had not been transporting
personnel or delivering products of and for the
company.[41]
Caravan also argues that "it exercised the
diligence of a good father of a family in the
selection and supervision of its employees." [42]
Caravan further claims that Abejar should not
have been awarded moral damages, actual
damages, death indemnity, exemplary
damages, and attorney's fees.[43] It questions the
Certificate provided by Abejar as proof of
expenses since its signatory, a certain Julian
Pealoza (Pealoza), was not presented in court,
and Caravan was denied the right to cross-
examine him.[44] Caravan argues that the
statements in the Certification constitute
hearsay.[45] It also contends that based on Article
2206(3)[46] of the Civil Code, Abejar is not entitled
to moral damages.[47] It insists that moral and
exemplary damages should not have been
awarded to Abejar because Caravan acted in
good faith.[48] Considering that moral and
exemplary damages are unwarranted, Caravan
claims that the award of attorney's fees should
have also been removed.[49]
Lastly, Caravan argues that it should not be held
solidarily liable with Bautista since Bautista was
already dropped as a party.[50]
Abejar counters that Caravan failed to provide
proof that it exercised the requisite diligence in
the selection and supervision of Bautista.[51] She
adds that the Court of Appeals' ruling that
Caravan is solidarily liable with Bautista for moral
damages, exemplary damages, civil
indemnity ex delicto, and attorney's fees should
be upheld.[52] Abejar argues that since Caravan
is the registered owner of the van, it is directly,
primarily, and solidarity liable for the tortious acts
of its driver.[53]
For resolution are the following issues:
First, whether respondent Ermilinda R. Abejar is a
real party in interest who may bring an action for
damages against petitioner Caravan Travel and
Tours International, Inc. on account of
Jesmariane R. Reyes' death; and
Second, whether petitioner should be held liable
as an employer, pursuant to Article 2180 of the
Civil Code.
We deny the Petition.
I
Having exercised substitute parental authority,
respondent suffered actual loss and is, thus, a
real party in interest in this case.
In her Complaint, respondent made allegations
that would sustain her action for damages: that
she exercised substitute parental authority over
Reyes; that Reyes' death was caused by the
negligence of petitioner and its driver; and that
Reyes' death caused her damage.[54]Respondent
properly filed an action based on quasi-delict.
She is a real party in interest.
Rule 3, Section 2 of the 1997 Rules of Civil
Procedure defines a real party in interest:
RULE 3. Parties to Civil Actions
....
SECTION 2. Parties in Interest. A real party in
interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party
entitled to the avails of the suit. Unless otherwise
authorized by law or these Rules, every action
must be prosecuted or defended in the name of
the real party in interest.
"To qualify a person to be a real party in interest
in whose name an action must be prosecuted,
he [or she] must appear to be the present real
owner of the right sought to be
enforced."[55] Respondent's capacity to file a
complaint against petitioner stems from her
having exercised substitute parental authority
over Reyes.
Article 216 of the Family Code identifies the
persons who exercise substitute parental
authority:
Art. 216. In default of parents or a judicially
appointed guardian, the following persons shall
exercise substitute parental authority over the
child in the order indicated:
(1) The surviving grandparent, as provided in Art.
214;[56]
(2) The oldest brother or sister, over twenty-one
years of age, unless unfit or disqualified; and
(3) The child's actual custodian, over twenty-one
years of age, unless unfit or disqualified.
Whenever the appointment or a judicial
guardian over the property of the child becomes
necessary, the same order of preference shall be
observed. (Emphasis supplied)
Article 233 of the Family Code provides for the
extent of authority of persons exercising substitute
parental authority, that is, the same as those of
actual parents:
Art. 233. The person exercising substitute parental
authority shall have the same authority over the
person of the child as the parents. (Emphasis
supplied)
Both of Reyes' parents are already
deceased.[57] Reyes' paternal grandparents are
also both deceased.[58] The whereabouts of
Reyes' maternal grandparents are
unknown.[59] There is also no record that Reyes
has brothers or sisters. It was under these
circumstances that respondent took custody of
Reyes when she was a child, assumed the role of
Reyes' parents, and thus, exercised substitute
parental authority over her.[60] As Reyes'
custodian, respondent exercised the full extent of
the statutorily recognized rights and duties of a
parent. Consistent with Article 220[61] of the
Family Code, respondent supported Reyes'
education[62] and provided for her personal
needs.[63]To echo respondent's words in her
Complaint, she treated Reyes as if she were her
own daughter.[64]
Respondent's right to proceed against petitioner,
therefore, is based on two grounds.
First, respondent suffered actual personal loss.
With her affinity for Reyes, it stands to reason that
when Reyes died, respondent suffered the same
anguish that a natural parent would have felt
upon the loss of one's child. It is for this injuryas
authentic and personal as that of a natural
parentthat respondent seeks to be
indemnified.
Second, respondent is capacitated to do what
Reyes' actual parents would have been
capacitated to do.
In Metro Manila Transit Corporation v. Court of
Appeals,[65] Tapdasan, Jr. v.
People,[66] and Aguilar, Sr. v. Commercial Savings
Bank,[67] this court allowed natural parents of
victims to recover damages for the death of their
children. Inasmuch as persons exercising
substitute parental authority have the full range
of competencies of a child's actual parents,
nothing prevents persons exercising substitute
parental authority from similarly possessing the
right to be indemnified for their ward's death.
We note that Reyes was already 18 years old
when she died. Having reached the age of
majority, she was already emancipated upon her
death. While parental authority is terminated
upon emancipation,[68] respondent continued to
support and care for Reyes even after she turned
18.[69] Except for the legal technicality of Reyes'
emancipation, her relationship with respondent
remained the same. The anguish and damage
caused to respondent by Reyes' death was no
different because of Reyes' emancipation.

In any case, the termination of respondent's
parental authority is not an insurmountable legal
bar that precludes the filing of her Complaint. In
interpreting Article 1902[70] of the old Civil Code,
which is substantially similar to the first sentence
of Article 2176[71] of the Civil Code, this court
in The Receiver For North Negros Sugar
Company, Inc. v. Ybaez, et al.[72] ruled that
brothers and sisters may recover damages,
except moral damages, for the death of their
sibling.[73] This court declared that Article 1902 of
the old Civil Code (now Article 2176) is broad
enough to accommodate even plaintiffs who
are not relatives of the deceased, thus:[74]
This Court said: "Article 1902 of the Civil Code
declares that any person who by an act or
omission, characterized by fault or negligence,
causes damage to another shall be liable for the
damage done ... a person is liable for damage
done to another by any culpable act; and by
any culpable act is meant any act which is
blameworthy when judged by accepted legal
standards. The idea thus expressed is
undoubtedly broad enough to include any
rational conception of liability for the tortious acts
likely to be developed in any society." The word
"damage" in said article, comprehending as it
does all that are embraced in its meaning,
includes any and all damages that a human
being may suffer in any and all the
manifestations of his life: physical or material,
moral or psychological, mental or spiritual,
financial, economic, social, political, and
religious.
It is particularly noticeable that Article 1902
stresses the passive subject of the obligation to
pay damages caused by his fault or
negligence. The article does not limit or specify
the active subjects, much less the relation that
must exist between the victim of the culpa
aquiliana and the person who may recover
damages, thus warranting the inference that, in
principle, anybody who suffers any damage from
culpa aquiliana, whether a relative or not of the
victim, may recover damages from the person
responsible therefor[.][75] (Emphasis supplied,
citations omitted)
II
Respondent's Complaint is anchored on an
employer's liability for quasi-delict provided in
Article 2180, in relation to Article 2176 of the Civil
Code. Articles 2176 and 2180 read:
ARTICLE 2176. 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.
.....
ARTICLE 2180. 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.
The father and, in case of his death or
incapacity, the mother, are responsible for the
damages caused by the minor children who live
in their company.
Guardians are liable for damages caused by the
minors or incapacitated persons who are under
their authority and live in their company.
The owners and managers of an establishment or
enterprise are likewise responsible for damages
caused by their employees in the service of the
branches in which the latter are employed or on
the occasion of their functions.
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.
The State is responsible in like manner when it
acts through a special agent; but not when the
damage has been caused by the official to
whom the task done properly pertains, in which
case what is provided in article 2176 shall be
applicable.
Lastly, teachers or heads of establishments of arts
and trades shall be liable for damages caused
by their pupils and students or apprentices, so
long as they remain in their custody.
The responsibility treated of in this article shall
cease when the persons herein mentioned prove
that they observed all the diligence of a good
father of a family to prevent damage. (Emphasis
supplied)
Contrary to petitioner's position, it was not fatal to
respondent's cause that she herself did not
adduce proof that Bautista acted within the
scope of his authority. It was sufficient that Abejar
proved that petitioner was the registered owner
of the van that hit Reyes.
The resolution of this case must consider two (2)
rules. First, Article 2180's specification that
"[e]mployers shall be liable for the damages
caused by their employees . . . acting within the
scope of their assigned tasks[.]" Second, the
operation of the registered-owner rule that
registered owners are liable for death or injuries
caused by the operation of their vehicles.[76]
These rules appear to be in conflict when it
comes to cases in which the employer is also the
registered owner of a vehicle. Article 2180
requires proof of two things: first, an employment
relationship between the driver and the owner;
and second, that the driver acted within the
scope of his or her assigned tasks. On the other
hand, applying the registered-owner rule only
requires the plaintiff to prove that the defendant-
employer is the registered owner of the vehicle.
The registered-owner rule was articulated as early
as 1957 in Erezo, et al. v. Jepte,[77] where this
court explained that the registration of motor
vehicles, as required by Section 5(a)[78] of
Republic Act No. 4136, the Land Transportation
and Traffic Code, was necessary "not to make
said registration the operative act by which
ownership in vehicles is transferred, . . . but to
permit the use and operation of the vehicle upon
any public highway[.]"[79] Its "main aim . . . is to
identify the owner so that if any accident
happens, or that any damage or injury is caused
by the vehicle on the public highways,
responsibility therefor can be fixed on a definite
individual, the registered owner."[80]
Erezo notwithstanding, Castilex Industrial
Corporation v. Vasquez, Jr.[81] relied on Article
2180 of the Civil Code even though the employer
was also the registered owner of the
vehicle.[82] The registered-owner rule was not
mentioned.
In Castilex, Benjamin Abad (Abad) was a
manager of Castilex Industrial Corporation
(Castilex). Castilex was also the registered owner
of a Toyota Hi-Lux pick-up truck. While Abad was
driving the pick-up truck, it collided with a
motorcycle driven by Romeo Vasquez (Vasquez).
Vasquez died a few days after. Vasquez's
parents filed a case for damages against Abad
and Castilex.[83] Castilex denied liability, arguing
that Abad was acting in his private capacity at
the time of the accident.[84]
This court absolved Castilex of liability, reasoning
that it was incumbent upon the plaintiff to prove
that the negligent employee was acting within
the scope of his assigned tasks.[85] Vasquez's
parents failed to prove this.[86] This court outlined
the process necessary for an employer to be
held liable for the acts of its employees and
applied the process to the case:
Under the fifth paragraph of Article 2180,
whether or not engaged in any business or
industry, an employer is liable for the torts
committed by employees within the scope of his
assigned tasks. But it is necessary to establish the
employer-employee relationship; once this is
done, the plaintiff must show, to hold the
employer liable, that the employee was acting
within the scope of his assigned task when the
tort complained of was committed. It is only then
that the employer may find it necessary to
interpose the defense of due diligence in the
selection and supervision of the employee.
....
Since there is paucity of evidence that ABAD was
acting within the scope of the functions
entrusted to him, petitioner CASTILEX had no duty
to show that it exercised the diligence of a good
father of a family in providing ABAD with a
service vehicle. Thus, justice and equity require
that petitioner be relieved of vicarious liability for
the consequences of the negligence of ABAD in
driving its vehicle. (Emphasis supplied, citations
omitted)[87]
Aguilar, Sr. v. Commercial Savings
Bank recognized the seeming conflict between
Article 2180 and the registered-owner rule and
applied the latter.[88]
In Aguilar, Sr., a Mitsubishi Lancer, registered in
the name of Commercial Savings Bank and
driven by the bank's assistant vice-president
Ferdinand Borja, hit Conrado Aguilar, Jr. The
impact killed Conrado Aguilar, Jr. His father,
Conrado Aguilar, Sr. filed a case for damages
against Ferdinand Borja and Commercial Savings
Bank. The Regional Trial Court found Commercial
Savings Bank solidarity liable with Ferdinand
Borja.[89]
However, the Court of Appeals disagreed with
the trial court's Decision and dismissed the
complaint against the bank. The Court of
Appeals reasoned that Article 2180 requires the
plaintiff to prove that at the time of the accident,
the employee was acting within the scope of his
or her assigned tasks. The Court of Appeals found
no evidence that Ferdinand Borja was acting as
the bank's assistant vice-president at the time of
the accident.[90]
The Court of Appeals' ruling was reversed by this
court.[91] Aguilar, Sr. reiterated the following
pronouncements made in Erezo in ruling that the
bank, as the registered owner of the vehicle, was
primarily liable to the plaintiff:[92]
The main aim of motor vehicle registration is to
identify the owner so that if any accident
happens, or that any damage or injury is caused
by the vehicle on the public highways,
responsibility therefor can be fixed on a definite
individual, the registered owner....
....
A victim of recklessness on the public highways is
usually without means to discover or identify the
person actually causing the injury or damage. He
has no means other than by a recourse to the
registration in the Motor Vehicles Office to
determine who is the owner. The protection that
the law aims to extend to him would become
illusory were the registered owner given the
opportunity to escape liability by disproving his
ownership.[93]
Thus, Aguilar, Sr. concluded:
In our view, respondent bank, as the registered
owner of the vehicle, is primarily liable for Aguilar,
Jr.'s death. The Court of Appeals erred when it
concluded that the bank was not liable simply
because (a) petitioner did not prove that Borja
was acting as the bank's vice president at the
time of the accident; and (b) Borja had,
according to respondent bank, already bought
the car at the time of the mishap. For as long as
the respondent bank remained the registered
owner of the car involved in the vehicular
accident, it could not escape primary liability for
the death of petitioner's son.[94] (Emphasis
supplied)
Preference for the registered-owner rule became
more pronounced in Del Carmen, Jr. v. Bacoy:[95]
Without disputing the factual finding of the
[Court of Appeals] that Allan was still his
employee at the time of the accident, a finding
which we see no reason to disturb, Oscar Jr.
contends that Allan drove the jeep in his private
capacity and thus, an employer's vicarious
liability for the employee's fault under Article 2180
of the Civil Code cannot apply to him.
The contention is no longer novel. In Aguilar Sr. v.
Commercial Savings Bank, the car of therein
respondent bank caused the death of Conrado
Aguilar, Jr. while being driven by its assistant vice
president. Despite Article 2180, we still held the
bank liable for damages for the accident as said
provision should defer to the settled doctrine
concerning accidents involving registered motor
vehicles, i.e., that the registered owner of any
vehicle, even if not used for public service, would
primarily be responsible to the public or to third
persons for injuries caused the latter while the
vehicle was being driven on the highways or
streets. We have already ratiocinated that:
The main aim of motor vehicle registration is to
identify the owner so that if any accident
happens, or that any damage or injury is caused
by the vehicle on the public highways,
responsibility therefor can be fixed on a definite
individual, the registered owner. Instances are
numerous where vehicles running on public
highways caused accidents or injuries to
pedestrians or other vehicles without positive
identification of the owner or drivers, or with very
scant means of identification. It is to forestall
these circumstances, so inconvenient or
prejudicial to the public, that the motor vehicle
registration is primarily ordained, in the interest of
the determination of persons responsible for
damages or injuries caused on public
highways.[96] (Emphasis supplied, citations
omitted)
Filcar Transport Services v. Espinas[97] stated that
the registered owner of a vehicle can no longer
use the defenses found in Article 2180:[98]
Neither can Filcar use the defenses available
under Article 2180 of the Civil Code - that the
employee acts beyond the scope of his assigned
task or that it exercised the due diligence of a
good father of a family to prevent damage -
because the motor vehicle registration law, to a
certain extent, modified Article 2180 of the Civil
Code by making these defenses unavailable to
the registered owner of the motor vehicle. Thus,
for as long as Filcar is the registered owner of the
car involved in the vehicular accident, it could
not escape primary liability for the damages
caused to Espinas.[99]
Mendoza v. Spouses Gomez[100] reiterated this
doctrine.
However, Aguilar, Sr., Del Carmen, Filcar,
and Mendoza should not be taken to mean that
Article 2180 of the Civil Code should be
completely discarded in cases where the
registered-owner rule finds application.
As acknowledged in Filcar, there is no
categorical statutory pronouncement in the
Land Transportation and Traffic Code stipulating
the liability of a registered owner.[101] The source
of a registered owner's liability is not a distinct
statutory provision, but remains to be Articles
2176 and 2180 of the Civil Code:
While Republic Act No. 4136 or the Land
Transportation and Traffic Code does not contain
any provision on the liability of registered owners
in case of motor vehicle mishaps, Article 2176, in
relation with Article 2180, of the Civil Code
imposes an obligation upon Filcar, as registered
owner, to answer for the damages caused to
Espinas' car.[102]
Thus, it is imperative to apply the registered-
owner rule in a manner that harmonizes it with
Articles 2176 and 2180 of the Civil Code. Rules
must be construed in a manner that will
harmonize them with other rules so as to form a
uniform and consistent system of
jurisprudence.[103] In light of this, the words used
in Del Carmen are particularly notable. There, this
court stated that Article 2180 "should defer
to"[104] the registered-owner rule. It never stated
that Article 2180 should be totally abandoned.
Therefore, the appropriate approach is that in
cases where both the registered-owner rule and
Article 2180 apply, the plaintiff must first establish
that the employer is the registered owner of the
vehicle in question. Once the plaintiff successfully
proves ownership, there arises a disputable
presumption that the requirements of Article 2180
have been proven. As a consequence, the
burden of proof shifts to the defendant to show
that no liability under Article 2180 has arisen.
This disputable presumption, insofar as the
registered owner of the vehicle in relation to the
actual driver is concerned, recognizes that
between the owner and the victim, it is the
former that should carry the costs of moving
forward with the evidence. The victim is, in many
cases, a hapless pedestrian or motorist with
hardly any means to uncover the employment
relationship of the owner and the driver, or any
act that the owner may have done in relation to
that employment.
The registration of the vehicle, on the other hand,
is accessible to the public.
Here, respondent presented a copy of the
Certificate of Registration[105] of the van that hit
Reyes.[106] The Certificate attests to petitioner's
ownership of the van. Petitioner itself did not
dispute its ownership of the van. Consistent with
the rule we have just stated, a presumption that
the requirements of Article 2180 have been
satisfied arises. It is now up to petitioner to
establish that it incurred no liability under Article
2180. This it can do by presenting proof of any of
the following: first, that it had no employment
relationship with Bautista; second, that Bautista
acted outside the scope of his assigned tasks; or
third, that it exercised the diligence of a good
father of a family in the selection and supervision
of Bautista.[107]
On the first, petitioner admitted that Bautista was
its employee at the time of the accident.[108]
On the second, petitioner was unable to prove
that Bautista was not acting within the scope of
his assigned tasks at the time of the accident.
When asked by the court why Bautista was at the
place of the accident when it occurred, Sally
Bellido, petitioner's accountant and
supervisor,[109] testified that she did not "have the
personal capacity to answer [the
question]"[110] and that she had no knowledge to
answer it:
Madam Witness, do you know the
reason why your driver, Jimmy Bautista,
at around 10:00 o' clock in the morning
COURT :
of July 13, 2000 was in the vicinity of
Barangay Marcelo Green, United
Paraaque Subdivision 4?
I don't have the personal capacity to
WITNESS:
answer that, Sir.
So you don't have any knowledge why
Q :
he was there?
A :Yes, Sir.[111] (Emphasis supplied)
Sally Bellido's testimony does not affect the
presumption that Article 2180's requirements
have been satisfied. Mere disavowals are not
proof that suffice to overturn a presumption. To
this end, evidence must be adduced. However,
petitioner presented no positive evidence to
show that Bautista was acting in his private
capacity at the time of the incident.
On the third, petitioner likewise failed to prove
that it exercised the requisite diligence in the
selection and supervision of Bautista.
In its selection of Bautista as a service driver,
petitioner contented itself with Bautista's
submission of a non-professional driver's
license.[112] Hence, in Sally Balledo's cross-
examination:
. . . when he was promoted as service
Q :
driver, of course, there were certain
 requirements and among other else, you
made mention about a driver's license.
A :Yes, Sir.
Would you be able to show to this
Honorable Court whether indeed this
Q :
person did submit a driver's license to your
company?
A :Yes, Sir.
....
Do you recall what kind of driver's license
Q :
is this?
A :The Land Transportation Office.
Is it a professional driver's license or non-
Q :
proffesional [sic] driver's license?
A :Non-professional.
Q :You are not sure?
COURT:Non professional, professional?
It's a non-professional.[113] (Emphasis
A :
supplied)
Employing a person holding a non-professional
driver's license to operate another's motor
vehicle violates Section 24 of the Land
Transportation and Traffic Code, which provides:
SEC. 24. Use of driver's license and badge. ...
....
No owner of a motor vehicle shall engage,
employ, or hire any person to operate such
motor vehicle, unless the person sought to be
employed is a duly licensed professional driver.
Evidently, petitioner did not only fail to exercise
due diligence when it selected Bautista as
service driver; it also committed an actual
violation of law.
To prove that it exercised the required diligence
in supervising Bautista, petitioner presented
copies of several memoranda and company
rules.[114] These, however, are insufficient because
petitioner failed to prove actual
compliance. Metro Manila Transit Corporation v.
Court of Appeals[115] emphasized that to establish
diligence in the supervision of employees, the
issuance of company policies must be coupled
with proof of compliance:
Due diligence in the supervision of employees, on
the other hand, includes the formulation of
suitable rules and regulations for the guidance of
employees and the issuance of proper
instructions intended for the protection of the
public and persons with whom the employer has
relations through his or its employees and the
imposition of necessary disciplinary measures
upon employees in case of breach or as may be
warranted to ensure the performance of acts
indispensable to the business of and beneficial to
their employer. To this, we add that actual
implementation and monitoring of consistent
compliance with said rules should be the
constant concern of the employer, acting
through dependable supervisors who should
regularly report on their supervisory functions.
In order that the defense of due diligence in the
selection and supervision of employees may be
deemed sufficient and plausible, it is not enough
to emptily invoke the existence of said company
guidelines and policies on hiring and supervision.
As the negligence of the employee gives rise to
the presumption of negligence on the part of the
employer, the latter has the burden of proving
that it has been diligent not only in the selection
of employees but also in the actual supervision of
their work. The mere allegation of the existence
of hiring procedures and supervisory policies,
without anything more, is decidedly not sufficient
to overcome presumption.
We emphatically reiterate our holding, as a
warning to all employers, that "(t)he mere
formulation of various company policies on
safety without showing that they were being
complied with is not sufficient to exempt
petitioner from liability arising from negligence of
its employees. It is incumbent upon petitioner to
show that in recruiting and employing the erring
driver the recruitment procedures and company
policies on efficiency and safety were followed."
Paying lip-service to these injunctions or merely
going through the motions of compliance
therewith will warrant stern sanctions from the
Court.[116] (Emphasis supplied, citations omitted)
For failing to overturn the presumption that the
requirements of Article 2180 have been satisfied,
petitioner must be held liable.
III
Petitioner's argument that it should be excused
from liability because Bautista was already
dropped as a party is equally unmeritorious. The
liability imposed on the registered owner is direct
and primary.[117] It does not depend on the
inclusion of the negligent driver in the action.
Agreeing to petitioner's assertion would render
impotent the rationale of the motor registration
law in fixing liability on a definite person.
Bautista, the driver, was not an indispensable
party under Rule 3, Section 7[118] of the 1997 Rules
of Civil Procedure. Rather, he was a necessary
party under Rule 3, Section 8.[119] Instead of
insisting that Bautistawho was nothing more
than a necessary partyshould not have been
dropped as a defendant, or that petitioner,
along with Bautista, should have been dropped,
petitioner (as a co-defendant insisting that the
action must proceed with Bautista as party)
could have opted to file a cross-claim against
Bautista as its remedy.
The 1997 Rules of Civil Procedure spell out the
rules on joinder of indispensable and necessary
parties. These are intended to afford "a complete
determination of all possible issues, not only
between the parties themselves but also as
regards to other persons who may be affected
by the judgment."[120]
However, while an exhaustive resolution of
disputes is desired in every case, the distinction
between indispensable parties and necessary
parties delineates a court's capacity to render
effective judgment. As defined by Rule 3, Section
7, indispensable parties are "[p]arties in interest
without whom no final determination can be had
of an action[.]" Thus, their non-inclusion is
debilitating: "the presence of indispensable
parties is a condition for the exercise of juridical
power and when an indispensable party is not
before the court, the action should be
dismissed."[121]
In contrast, a necessary party's presence is not
imperative, and his or her absence is not
debilitating. Nevertheless, it is preferred that they
be included in order that relief may be
complete.
The concept of indispensable parties, as against
parties whose inclusion only allows complete
relief, was explained in Arcelona v. Court of
Appeals:[122]
An indispensable party is a party who has such
an interest in the controversy or subject matter
that a final adjudication cannot be made, in his
absence, without injuring or affecting that
interest, a party who has not only an interest in
the subject matter of the controversy, but also
has an interest of such nature that a final decree
cannot be made without affecting his interest or
leaving the controversy in such a condition that
its final determination may be wholly inconsistent
with equity and good conscience. It has also
been considered that an indispensable party is a
person in whose absence there cannot be a
determination between the parties already
before the court which is effective, complete, or
equitable. Further, an indispensable party is one
who must be included in an action before it may
properly go forward.
A person is not an indispensable party, however,
if his interest in the controversy or subject matter
is separable from the interest of the other parties,
so that it will not necessarily be directly or
injuriously affected by a decree which does
complete justice between them. Also, a person is
not an indispensable party if his presence would
merely permit complete relief between him and
those already parties to the action, or if he has
no interest in the subject matter of the action. It is
not a sufficient reason to declare a person to be
an indispensable party that his presence will
avoid multiple litigation.[123]
Petitioner's interest and liability is distinct from that
of its driver. Regardless of petitioner's employer-
employee relationship with Bautista, liability
attaches to petitioner on account of its being the
registered owner of a vehicle that figures in a
mishap. This alone suffices. A determination of its
liability as owner can proceed independently of
a consideration of how Bautista conducted
himself as a driver. While certainly it is desirable
that a determination of Bautista's liability be
made alongside that of the owner of the van he
was driving, his non-inclusion in these
proceedings does not absolutely hamper a
judicious resolution of respondent's plea for relief.
IV
The Court of Appeals committed no reversible
error when it awarded actual damages to
respondent. Respondent's claim for actual
damages was based on the Certificate[124] issued
and signed by a certain Pealoza showing that
respondent paid Pealoza P35,000.00 for funeral
expenses.
Contrary to petitioner's claim, this Certificate is
not hearsay. Evidence is hearsay when its
probative value is based on the personal
knowledge of a person other than the person
actually testifying.[125] Here, the Certificate sought
to establish that respondent herself paid
Pealoza P35,000.00 as funeral expenses for
Reyes' death:[126]
3. Na ang aking kontrata ay
nagkakahalaga ng P35,000-00 [sic] sa
lahat ng nagamit na materiales at labor
nito kasama ang lote na ibinayad sa
akin ni Gng. ERMILINDA REYES ABEJAR na
siyang aking kakontrata sa
 pagsasagawa ng naturang
paglilibingan.[127] (Emphasis supplied)
It was respondent herself who identified the
Certificate. She testified that she incurred funeral
expenses amounting to P35,000.00, that she paid
this amount to Pealoza, and that she was
present when Pealoza signed the Certificate:
[ATTY.
Did you incur any expenses?
LIM] :
A: Meron po.
How much did you spend for the death of
Q:
Jesmarian [sic] Reyes?
'Yun pong P35,000.00 na pagpapalibing at
A:
saka...
You said that you spent P35,000.00. Do you
Q : have any evidence or proof that you spent
that amount?
A: Meron po.
Showing to you this sort of certification.
Q:
What relation has this...
A: 'Yan po' yung contractor nagumawa.
Q : Contractor of what?
'Yan po' yung mismong binilhan ko ng lupa
A:
at nitso.
....
There is a signature at the top of the printed
ATTY.
name Julian Penalosa [sic]. Whose
LIM :
signature is this?
A: 'Yan po' yung mismong contractor.
....
Q : Did you see him sign this?
A: Opo.[128] (Emphasis supplied)
Respondent had personal knowledge of the
facts sought to be proved by the Certificate, i.e.
that she spent P35,000.00 for the funeral expenses
of Reyes. Thus, the Certificate that she identified
and testified to is not hearsay. It was not an error
to admit this Certificate as evidence and basis
for awarding P35,000.00 as actual damages to
respondent.
The Court of Appeals likewise did not err in
awarding civil indemnity and exemplary
damages.
Article 2206 of the Civil Code provides:
ARTICLE 2206. The amount of damages for death
caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there
may have been mitigating circumstances[.]
Further, Article 2231 of the Civil Code provides:
ARTICLE 2231. In quasi-delicts, exemplary
damages may be granted if the defendant
acted with gross negligence.
Both the Court of Appeals and the Regional Trial
Court found Bautista grossly negligent in driving
the van and concluded that Bautista's gross
negligence was the proximate cause of Reyes'
death. Negligence and causation are factual
issues.[129] Findings of fact, when established by
the trial court and affirmed by the Court of
Appeals, are binding on this court unless they are
patently unsupported by evidence or unless the
judgment is grounded on a misapprehension of
facts.[130] Considering that petitioner has not
presented any evidence disputing the findings of
the lower courts regarding Bautista's negligence,
these findings cannot be disturbed in this appeal.
The evidentiary bases for the award of civil
indemnity and exemplary damages stand. As
such, petitioner must pay the exemplary
damages arising from the negligence of its
driver.[131] For the same reasons, the award of
P50,000.00 by way of civil indemnity is justified.[132]
The award of moral damages is likewise proper.
Article 2206(3) of the Civil Code provides:
ARTICLE 2206. The amount of damages
for death caused by a crime or quasi-delict shall
be at least three thousand pesos, even though
there may have been mitigating circumstances.
In addition:
....
The spouse, legitimate and illegitimate
descendants and ascendants of the
(3)deceased may demand moral damages for
mental anguish by reason of the death of the
deceased. (Emphasis supplied)
For deaths caused by quasi-delict, the recovery
of moral damages is limited to the spouse,
legitimate and illegitimate descendants, and
ascendants of the deceased.[133]
Persons exercising substitute parental authority
are to be considered ascendants for the purpose
of awarding moral damages. Persons exercising
substitute parental authority are intended to
stand in place of a child's parents in order to
ensure the well-being and welfare of a
child.[134] Like natural parents, persons exercising
substitute parental authority are required to,
among others, keep their wards in their
company,[135] provide for their
upbringing,[136] show them love and
affection,[137] give them advice and
counsel,[138] and provide them with
companionship and understanding.[139] For their
part, wards shall always observe respect and
obedience towards the person exercising
parental authority.[140] The law forges a
relationship between the ward and the person
exercising substitute parental authority such that
the death or injury of one results in the damage
or prejudice of the other.
Moral damages are awarded to compensate
the claimant for his or her actual injury, and not
to penalize the wrongdoer.[141] Moral damages
enable the injured party to alleviate the moral
suffering resulting from the defendant's
actions.[142] It aims to restoreto the extent
possible"the spiritual status quo ante[.]"[143]
Given the policy underlying Articles 216 and 220
of the Family Code as well as the purposes for
awarding moral damages, a person exercising
substitute parental authority is rightly considered
an ascendant of the deceased, within the
meaning of Article 2206(3) of the Civil Code.
Hence, respondent is entitled to moral damages.
As exemplary damages have been awarded
and as respondent was compelled to litigate in
order to protect her interests, she is rightly entitled
to attorney's fees.[144]
However, the award of interest should be
modified. This modification must be consistent
with Nacar v. Gallery Frames,[145] in which we
ruled:
2. When an obligation, not constituting a
loan or forbearance of money, is
breached, an interest on the amount of
damages awarded may be imposed at
the discretion of the court at the rate
of 6% per annum. No interest, however,
shall be adjudged on unliquidated
claims or damages, except when or until
the demand can be established with
reasonable certainty.
Accordingly, where the demand is
established with reasonable certainty,
the interest shall begin to run from the
time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code), but
when such certainty cannot be so
reasonably established at the time the
demand is made, the interest shall begin
to run only from the date the judgment
of the court is made (at which time the
quantification of damages may be
deemed to have been reasonably
ascertained). The actual base for the
computation of legal interest shall, in any
case, be on the amount finally
adjudged.
3. When the judgment of the court
awarding a sum of money becomes final
and executory, the rate of legal interest,
whether the case falls under paragraph
1 or paragraph 2, above, shall be 6% per
annum from such finality until its
satisfaction, this interim period being
deemed to be by then an equivalent to
a forbearance of credit.[146] (Emphasis
supplied)
WHEREFORE, the Decision of the Court of Appeals
dated October 3, 2005 is AFFIRMED with the
following MODIFICATIONS: (a) actual damages in
the amount of P35,000.00 shall earn interest at
the rate of 6% per annum from the time it was
judicially or extrajudicially demanded from
petitioner Caravan Travel and Tours International,
Inc. until full satisfaction; (b) moral damages,
exemplary damages, and attorney's fees shall
earn interest at the rate of 6% per annum from
the date of the Regional Trial Court Decision until
full satisfaction; and (c) civil indemnity shall earn
interest at the rate of 6% per annum from the
date of the Court of Appeals Decision until full
satisfaction.
SO ORDERED.
Carpio, (Chairperson), Brion, Del Castillo,
and Mendoza, JJ., concur.
[1] CIVIL CODE, art. 2180 provides:
ARTICLE 2180. 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.
....
The responsibility treated of in this article shall
cease when the persons herein mentioned prove
that they observed all the diligence of a good [17] Id.
father of a family to prevent damage.
[18] Id.
[2] CIVIL CODE, art. 2176 provides:
[19] Rollo, p. 134, Court of Appeals Decision.
ARTICLE 2176. Whoever by act or omission causes
damage to another, there being fault or RTC records, pp. 2, Complaint; and 47, Answer
[20]

negligence, is obliged to pay for the damage with Counterclaim.

done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, [21] Rollo, p. 134, Court of Appeals Decision.
is called a quasi-delict and is governed by the
provisions of this Chapter. [22] Id. at 139.

412 Phil. 834, 839-841 (2001) [Per J. Quisumbing,

[3] [23] Id. at 134.
Second Division].
[24] Id. at 138.
686 Phil. 799, 817 (2012) [Per J. Del Castillo, First
[4]

Division]. [25] RTC records, pp. 1-5.

688 Phil. 430, 436-442 (2012) [Per J. Brion,

[5] [26] Id. at 2.
Second Division].
[27] CA rollo, p. 48, Caravan's Reply Brief.
G.R. No. 160110, June 18, 2014, 726 SCRA 505,
[6]

518-521 [Per J. Perez, Second Division]. [28] Rollo, p. 138, Court of Appeals Decision.

Rollo, pp. 91-131. The Petition was filed

[7] [29] Rollo, p. 138, Court of Appeals Decision.
pursuant to Rule 45 of the 1997 Rules of Civil
Procedure. RTC records, p. 447, Regional Trial Court
[30]

Decision. The trial court included Bautista in the

Id. at 133-165. The Decision was penned by
[8]
Associate Justice Celia C. Librea-Leagogo and
concurred in by Associate Justices Renato C.
Dacudao (Chair) and Lucas P. Bersamin (now
Decision even though it already granted Abejar's
motion to drop him as a defendant.
Id. at 449. The case was docketed as Civil
[31]

Associate Justice of this court) of the Twelfth Case No. 00-0447. The Decision, promulgated on
Division. July 31, 2003, was penned by Judge Raul E. De
Leon of Branch 258.
Id. at 166-167. The Resolution was penned by
[9]

Associate Justice Celia C. Librea-Leagogo and [32] Id. at 450-462.

concurred in by Associate Justices Renato C.
Dacudao (Chair) and Lucas P. Bersamin (now [33] Id. at 513.
Associate Justice of this court) of the Twelfth
Division. Rollo, p. 162, Court of Appeals Decision. The
[34]

case was docketed as CA-G.R. CV No. 81694.

[10] Id. at 129, Petition for Review on Certiorari.
[35] Id. at 166-167, Court of Appeals Resolution.
[11] Id. at 134, Court of Appeals Decision.
[36] Id. at 231, Caravan's Memorandum.
[12] Id.
[37] Id.
[13] TSN, May 31, 2002, p. 948.
[38] Id. at 232.
RTC records, p. 445, Regional Trial Court
[14]

Decision. [39] Id. at 42, Petition for Review on Certiorari.

[15] Id. [40] Id. at 42-43.

[16] CA rollo, p. 31, Regional Trial Court Decision. [41] Id. at 42.
[42] Id. at 31.
[43] Id. at 43.
[44] Id. at 44.
[45] Id. at 233, Caravan's Memorandum.
[46] CIVIL CODE, art. 2206(3) provides:
ARTICLE 2206. The amount of damages for death
caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there
may have been mitigating circumstances. In
addition:
....
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the deceased
may demand moral damages for mental
anguish by reason of the death of the deceased.
Rollo, pp. 45-46, Petition for Review on
[47]
Certiorari.
[48] Id. at 50.
[49] Id. at 50-51.
[50] Id. at 43.
[51] Id. at 203, Abejar's Memorandum.
[52] Id. at 206.
[53] Id. at 207.
[54] RTC records, pp. 1-3, Complaint.
National Housing Authority v. Magat, 611 Phil.
[55]
742, 747 (2009) [Per J. Carpio, First Division], citing
Shipside Inc. v. Court of Appeals, 404 Phil. 981,
998 (2001) [Per J. Melo, Third Division].
[56] FAMILY CODE, art. 214 provides:
Art. 214. In case of death, absence or
unsuitability of the parents, substitute parental
authority shall be exercised by the surviving
grandparent. In case several survive, the one
designated by the court, taking into account the
same consideration mentioned in the preceding
article, shall exercise the authority.
RTC records, pp. 179, Abejar's Formal Offer of
[57]
Documentary Exhibits; 187, Death Certificate of
Edwin Cortez issued by the Municipal Civil
Registrar of Calamba, Laguna; 188, Death
Certificate of Leonora R. Landicho issued by the
Municipal Civil Registrar of Candelaria, Quezon;
and 189, Certificate of Death of Leonora R.
Landicho issued by the Parish of San Pedro
Bautista, Candelaria, Quezon.
Id. at 179, Abejar's Formal Offer of
[58]
Documentary Exhibits; 190, Death Certificate of
Leticia Cortez Reyes issued by the Municipal Civil
Registrar of Tiong, Quezon; and 191, Certificate
of Death of Domingo Estiva Reyes issued by the
City Civil Registrar of Manila.
[59] TSN, April 10, 2002, p. 760.
[60] TSN, June 22, 2001, p. 605.
[61] FAMILY CODE, art. 220 provides:
Art. 220. The parents and those exercising
parental authority shall have with the respect to
their unemancipated children on wards the
following rights and duties:
To keep them in their company, to support,
educate and instruct them by right precept
(1)
and good example, and to provide for their
upbringing in keeping with their means;
To give them love and affection, advice and
(2)
counsel, companionship and understanding;
To provide them with moral and spiritual
guidance, inculcate in them honesty, integrity,
self- discipline, self-reliance, industry and thrift,
(3)
stimulate their interest in civic affairs, and
inspire in them compliance with the duties of
citizenship;
To furnish them with good and wholesome
educational materials, supervise their
activities, recreation and association with
(4)
others, protect them from bad company, and
prevent them from acquiring habits
detrimental to their health, studies and morals;
To represent them in all matters affecting their
(5)
interests;
To demand from them respect and
(6)
obedience;
To impose discipline on them as may be
(7)
required under the circumstances; and
To perform such other duties as are imposed
(8)
by law upon parents and guardians.
[62] TSN, June 22, 2001, p. 607.
[63] Id.
 Bureau of Land Transportation for the current
[64] RTC records, p. 2, Complaint. year in accordance with the provisions of this
Act.
359 Phil. 18, 26-27 (1998) [Per J. Mendoza,
[65]

Second Division]. Erezo, et al. v. Jepte, 102 Phil. 103, 108 (1957)
[79]

[Per J. Labrador, En Banc].

440 Phil. 864, 880 (2002) [Per J. Callejo, Sr.,
[66]

Second Division]. [80] Id.

412 Phil. 834, 835 (2001) [Per J. Quisumbing,

[67] 378 Phil. 1009 (1999) [Per C. J. Davide, Jr., First
[81]

Second Division]. Division].

[68] FAMILY CODE, art. 236. [82] Id. at 1016-1018.

[69] Rollo, p. 138, Court of Appeals Decision. [83] Id. at 1012-1013.

[70] CIVIL CODE (1889), art. 1902 provides: [84] Id. at 1018.

ARTICLE 1902. Any person who by an act or [85] Id. at 1022-1023.

omission causes damage to another by his fault
or negligence shall be liable for the damage so [86] Id. at 1018.
done.
[87] Id. at 1017-1022.
[71] CIVIL CODE, art. 2176, first sentence, provides:
Aguilar, Sr. v. Commercial Savings Bank, 412
[88]

ARTICLE 2176: Whoever by act or omission causes Phil. 834, 839-841 (2001) [Per J. Quisumbing,
damage to another, there being fault or Second Division].
negligence, is obliged to pay for the damage
done. [89] Id. at 835-837.

[72] 133 Phil. 825 (1968) [Per J. Zaldivar, En Banc]. [90] Id. at 837.

[73] Id. at 832-833. [91] Id. at 841.

[74]Id. at 831. This court ruled that while Article Aguilar, Sr. v. Commercial Savings Bank, 412
[92]

1902 of the old Civil Code (now Article 2176) Phil. 834, 839-841 (2001) [Per J. Quisumbing,
does not require any relation between the Second Division].
plaintiff and the victim of the quasi-delict, Article
2206(3) of the Civil Code does. Hence, the [93] Id. at 839-840.
recovery of moral damages requires that the
plaintiff is the victim's spouse, legitimate or [94] Id. at 841.
illegitimate descendant or ascendant (Id. at
833). 686 Phil. 799 (2012) [Per J. Del Castillo, First
[95]

Division].
[75] Id. at 831.
[96] Id. at 817.
See Filcar Transport Services v. Espinas, 688
[76]

Phil. 430, 435 (2012) [Per J. Brion, Second 688 Phil. 430 (2012) [Per J. Brion, Second
[97]

Division]. Division].

[77] 102 Phil. 103 (1957) [Per J. Labrador, En Banc]. [98] Id. at 441.

[78] TRANSP. & TRAFFIC CODE, sec. 5 provides: [99] Id.

SECTION 5. Compulsory Registration of Motor G.R. No. 160110, June 18, 2014, 726 SCRA 505,
[100]

Vehicles. - (a) All motor vehicles and trailer of any 518-521 [Per J. Perez, Second Division].
type used or operated on or upon any highway
of the Philippines must be registered with the [101] Filcar Transport Services v. Espinas, 688 Phil.
430, 441 (2012) [Per J. Brion, Second Division].
[102] Id. at 441-442.
Spouses Algura v. The Local Government Unit
[103]
of the City of Naga, 536 Phil. 819, 835 (2006) [Per
J. Velasco, Jr., Third Division].
Del Carmen, Jr. v. Bacoy, 686 Phil. 799, 817
[104]
(2012) [Per J. Del Castillo, First Division].
[105] RTC records, p. 182.
Id. at 177, Abejar's Formal Offer of
[106]
Documentary Evidence.
A reading of Article 2180 reveals that in order
[107]
for an employer to be liable for the acts of its
employee, it is required that the employment
relationship is established, that the employee
acted within the scope of his or her assigned
tasks, and that the employer failed to exercise
the diligence of a good father of a family in the
selection and supervision of the employee. See
Castilex Industrial Corp. v. Vasquez, Jr., 378 Phil.
1009, 1017 (1999) [Per C.J. Davide, Jr., First
Division] and Metro Manila Transit Corporation v.
Court of Appeals, G.R. No. 104408, June 21, 1993,
223 SCRA 521, 539 [Per J. Regalado, Second
Division].
RTC records, pp 2, Complaint; and 47,
[108]
Answer with Counterclaim.
[109] TSN, September 25, 2002, pp. 1247-1248.
[110] Id. at 1284.
[111] Id. at 1284-1285.
[112] Id. at 1274-1275.
[113] Id. at 1273-1275.
RTC records, pp. 227-229, Caravan's Formal
[114]
Offer of Evidence.
G.R. No. 104408, June 21, 1993, 223 SCRA 521
[115]
[Per J. Regalado, Second Division].
[116] Id. at 540-541.
Filcar Transport Services v. Espinas, 688 Phil.
[117]
430, 439 (2012) [Per J. Brion, Second
Division]; Aguilar, Sr. v. Commercial Savings Bank,
412 Phil. 834, 839-841 (2001) [Per J. Quisumbing,
Second Division].
1997 RULES OF CIV. PROC., Rule 3, sec. 7
[118]
provides:
RULE 3. Parties to Civil Actions
....
SECTION 7. Compulsory Joinder of Indispensable
Parties. Parties in interest without whom no final
determination can be had of an action shall be
joined either as plaintiffs or defendants.
1997 RULES OF CIV. PROC., Rule 3, sec. 8
[119]
provides:
RULE 3. Parties to Civil Actions
SECTION 8. Necessary Party. A necessary party
is one who is not indispensable but who ought to
be joined as a party if complete relief is to be
accorded as to those already parties, or for a
complete determination or settlement of the
claim subject of the action.
[120]Director of Lands v. Court of Appeals, 181
Phil. 432, 440-441 (1979) [Per J. Guerrero, First
Division].
Lucman v. Malawi, 540 Phil. 289, 302 (2006)
[121]
[Per J. Tinga, Third Division].
345 Phil. 250 (1997) [Per J. Panganiban, Third
[122]
Division].
[123] Id. at 269-270.
[124] RTC records, p. 186.
Valencia v. Atty. Cabanting, 273 Phil. 534, 545
[125]
(1991) [Per Curiam, En Banc].
RTC records, pp. 178-179, Abejar's Formal
[126]
Offer of Documentary Exhibits.
Id. at 186, Certificate issued by Julian
[127]
Pealoza.
[128] TSN, June 22, 2001, pp. 615-616.
Kierulf v. Court of Appeals, 336 Phil. 414, 423
[129]
(1997) [Per J. Panganiban, Third Division].
[130]Pangonorom v. People, 495 Phil. 195, 204
(2005) [Per J. Carpio, First Division], citing China
Airlines, Ltd. v. Court of Appeals, 453 Phil. 959, 978
(2003) [Per J. Carpio, First Division]; Romago
Electric Co., Inc. v. Court of Appeals, 388 Phil.
964, 974-975 (2000) [Per J. Gonzaga-Reyes, Third
Division]; Austria v. Court of Appeals, 384 Phil. 408,
415 (2000) [Per J. Quisumbing, Second Division];
and Halili v. Court of Appeals, 350 Phil. 906, 912
(1998) [Per J. Panganiban, First Division].

See Del Carmen, Jr. v. Bacoy, 686 Phil. 799

[131]

(2012) [Per J. Del Castillo, First Division].

Mendoza v. Casumpang, et al., 684 Phil. 459,

[132]

462 (2012) [Per J. Abad, Third Division].

The Receiver For North Negros Sugar

[133]

Company, Inc. v. Ybaez, et al., 133 Phil. 825, 833

(1968) [Per J. Zaldivar, En Banc].

See Murdock, Sr. and Murdock v. Chuidian,

[134]

99 Phil. 821, 824 (1956) [Per J. Padilla, En Banc].

[135] FAMILY CODE, art. 220(1).

[136] FAMILYCODE, art. 220(1).

[137] FAMILY CODE, art. 220(2).

[138] FAMILY CODE, art. 220(2).

[139] FAMILY CODE, art. 220(2).

[140] FAMILY CODE, art. 220(7).

Kierulf v. Court of Appeals, 336 Phil. 414, 432

[141]

(1997) [Per J. Panganiban, Third Division].

[142] Id.

[143] Id.

[144] CIVIL CODE, art. 2208 (1) and (2).

G.R. No. 189871, August 13, 2013, 703 SCRA

[145]

439 [Per J. Peralta, En Banc].

[146]