FGU Corp. v. CA

FGU CORP.
vs. CA
G.R. No. 118889 March 23, 1998
FACTS: 1. Petitioner: FGU Insurance Corporation
2. Respondents: Court of Appeals, Fortune Insurance Corporation, and FILCAR

Transport, Inc. (FILCAR).
3. Action: Petitioner by way of subrogation, sued Dahl-Jensen and respondent FILCAR

as well as respondent Fortune Insurance Corporation (FURTUNE) as insurer
of FILCAR for quasi-delict before the RTC of Makati.
4. – Two car collided at around 3pm of April 21, 1987.
- The first vehicle is a Mitsubushi Colt owned by Lydia F. Soriano and was being
driven at the outer lane of the highway by Benjamin Jacildone.
- The second vehicle is owned by respondent FILCAR Transport, Inc.and was driven
by Peter Dahl-Jensen as Lesse.
-The second car was at the center lane, left of the first vehicle. Upon approaching
the corner of pioneer street, the car owned by FILCAR swerved to the right hitting
the left side of the car of Soriano. At that time Dahl-Jensen, a Danish tourist, did
not possess a Philippine driver’s license.
- As a consequence, petitioner FGU Insurance Corporation, in view of its insurance

contract with Soriano, paid the latter P25,382.20.
- Unfortunately, summons was not served on Dahl-Jensen since he was no longer

staying at his given address; in fact, upon motion of petitioner, he was dropped
from the complaint.
5. RTC: dismissed the case for failure of petitioner to substantiate its claim of
subrogation.
6. CA: affirmed the ruling of the trial court although based on another ground, i.e., only
the fault or negligence of Dahl-Jensen was sufficiently proved but not that of
respondent FILCAR. In other words, petitioner failed to establish its cause of
action for sum of money based on quasi-delict.
7. Contention of petitioner: (On appeal) petitioner insists that respondents are liable on
the strength of the ruling in MYC-Agro-Industrial
Corporation v. Vda. de Caldo that the registered owner of a
vehicle is liable for damages suffered by third persons
although the vehicle is leased to another.
ISSUE: 1. Whether an action based on quasi-delict will prosper against a rent-a-car company
and, consequently, its insurer for fault or negligence of the car lessee in driving the
rented vehicle.
2. Whether the ruling in MYC-Agro-Industrial Corporation v. Vda. de Caldo is applicable in the

case at bar.
HELD: 1. We find no reversible error committed by respondent court in upholding the dismissal
of petitioner's complaint. The pertinent provision is Art. 2176 of the Civil Code which
states: "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 . . . . ".
To sustain a claim based thereon, the following requisites must concur: (a) damage
suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of
cause and effect between the fault or negligence of the defendant and the damage
incurred by the plaintiff. We agree with respondent court that petitioner failed to prove
the existence of the second requisite, i.e., fault or negligence of defendant FILCAR,
because only the fault or negligence of Dahl-Jensen was sufficiently established, not
that of FILCAR. It should be noted that the damage caused on the vehicle of Soriano
was brought about by the circumstance that Dahl-Jensen swerved to the right while
the vehicle that he was driving was at the center lane. It is plain that the negligence
was solely attributable to Dahl-Jensen thus making the damage suffered by the other
vehicle his personal liability. Respondent FILCAR did not have any participation
therein. Respondent FILCAR being engaged in a rent-a-car business was only the
owner of the car leased to Dahl-Jensen. As such, there was no vinculum
juris between them as employer and employee. Respondent FILCAR cannot in any
way be responsible for the negligent act of Dahl-Jensen, the former not being an
employer of the latter.
2.Petitioner's insistence on MYC-Agro-Industrial Corporation is rooted in a

misapprehension of our ruling therein. In that case, the negligent and reckless
operation of the truck owned by petitioner corporation caused injuries to several
persons and damage to property. Intending to exculpate itself from liability, the
corporation raised the defense that at the time of the collision it had no more control
over the vehicle as it was leased to another; and, that the driver was not its employee
but of the lessee. The trial court was not persuaded as it found that the true nature of
the alleged lease contract was nothing more than a disguise effected by the
corporation to relieve itself of the burdens and responsibilities of an employer. We
upheld this finding and affirmed the declaration of joint and several liability of the
corporation with its driver.

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FGU CORP.

G.R. No. 118889 March 23, 1998

FACTS: 1. Petitioner: FGU Insurance Corporation

2. Respondents: Court of Appeals, Fortune Insurance Corporation, and FILCAR

3. Action: Petitioner by way of subrogation, sued Dahl-Jensen and respondent FILCAR

4. – Two car collided at around 3pm of April 21, 1987.

- As a consequence, petitioner FGU Insurance Corporation, in view of its insurance

- Unfortunately, summons was not served on Dahl-Jensen since he was no longer

2. Whether the ruling in MYC-Agro-Industrial Corporation v. Vda. de Caldo is applicable in the

2.Petitioner's insistence on MYC-Agro-Industrial Corporation is rooted in a

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