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Republic of the Philippines

FIRST DIVISION

G.R. No. 132266 December 21, 1999

CASTILEX INDUSTRIAL CORPORATION, petitioner,

DAVIDE, JR., C.J.:

The pivotal issue in this petition is whether an employer may be held vicariously liable for the death resulting from
the negligent operation by a managerial employee of a company-issued vehicle.

The antecedents, as succinctly summarized by the Court of Appeals, are as follows:

On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was driving a Honda
motorcycle around Fuente Osmeña Rotunda. He was traveling counter-clockwise, (the normal flow of
traffic in a rotunda) but without any protective helmet or goggles. He was also only carrying a Student's
Permit to Drive at the time. Upon the other hand, Benjamin Abad [was a] manager of Appellant Castilex
Industrial Corporation, registered owner [of] a Toyota Hi-Lux Pick-up with plate no. GBW-794. On the
same date and time, Abad drove the said company car out of a parking lot but instead of going around
the Osmeña rotunda he made a short cut against [the] flow of the traffic in proceeding to his route to
General Maxilom St. or to Belvic St.

In the process, the motorcycle of Vasquez and the pick-up of Abad collided with each other causing
severe injuries to the former. Abad stopped his vehicle and brought Vasquez to the Southern Islands
Hospital and later to the Cebu Doctor's Hospital.

On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. It was there that Abad signed an
acknowledgment of Responsible Party (Exhibit K) wherein he agreed to pay whatever hospital bills,
professional fees and other incidental charges Vasquez may incur.

After the police authorities had conducted the investigation of the accident, a Criminal Case was filed
against Abad but which was subsequently dismissed for failure to prosecute. So, the present action for
damages was commenced by Vicente Vasquez, Jr. and Luisa So Vasquez, parents of the deceased
Romeo So Vasquez, against Jose Benjamin Abad and Castilex Industrial Corporation. In the same
action, Cebu Doctor's Hospital intervened to collect unpaid balance for the medical expense given to
Romeo So Vasquez.1

The trial court ruled in favor of private respondents Vicente and Luisa Vasquez and ordered Jose Benjamin Abad
(hereafter ABAD) and petitioner Castilex Industrial Corporation (hereafter CASTILEX) to pay jointly and solidarily (1)
Spouses Vasquez, the amounts of P8,000.00 for burial expenses; P50,000.00 as moral damages; P10,000.00 as
attorney's fees; and P778,752.00 for loss of earning capacity; and (2) Cebu Doctor's Hospital, the sum of
P50,927.83 for unpaid medical and hospital bills at 3% monthly interest from 27 July 1989 until fully paid, plus the
costs of litigation.2

CASTILEX and ABAD separately appealed the decision.

In its decision3 of 21 May 1997, the Court of Appeals affirmed the ruling of the trial court holding ABAD and
CASTILEX liable but held that the liability of the latter is "only vicarious and not solidary" with the former. It reduced
the award of damages representing loss of earning capacity from P778,752.00 to P214,156.80; and the interest on
the hospital and medical bills, from 3% per month to 12% per annum from 5 September 1988 until fully paid.

Upon CASTILEX's motion for reconsideration, the Court of Appeals modified its decision by (1) reducing the award
of moral damages from P50,000 to P30,000 in view of the deceased's contributory negligence; (b) deleting the
award of attorney's fees for lack of evidence; and (c) reducing the interest on hospital and medical bills to 6% per
annum from 5 September 1988 until fully paid.4

Hence, CASTILEX filed the instant petition contending that the Court of Appeals erred in (1) applying to the case the
fifth paragraph of Article 2180 of the Civil Code, instead of the fourth paragraph thereof; (2) that as a managerial
employee, ABAD was deemed to have been always acting within the scope of his assigned task even outside office
hours because he was using a vehicle issued to him by petitioner; and (3) ruling that petitioner had the burden to
prove that the employee was not acting within the scope of his assigned task.

Jose Benjamin ABAD merely adopted the statement of facts of petitioner which holds fast on the theory of
negligence on the part of the deceased.

On the other hand, respondents Spouses Vasquez argue that their son's death was caused by the negligence of
petitioner's employee who was driving a vehicle issued by petitioner and who was on his way home from overtime
work for petitioner; and that petitioner is thus liable for the resulting injury and subsequent death of their son on the
basis of the fifth paragraph of Article 2180. Even if the fourth paragraph of Article 2180 were applied, petitioner
cannot escape liability therefor. They moreover argue that the Court of Appeals erred in reducing the amount of
compensatory damages when the award made by the trial court was borne both by evidence adduced during the
trial regarding deceased's wages and by jurisprudence on life expectancy. Moreover, they point out that the petition
is procedurally not acceptable on the following grounds: (1) lack of an explanation for serving the petition upon the
Court of Appeals by registered mail, as required under Section 11, Rule 13 of the Rules of Civil Procedure; and (2)
lack of a statement of the dates of the expiration of the original reglementary period and of the filing of the motion for
extension of time to file a petition for review.

For its part, respondent Cebu Doctor's Hospital maintains that petitioner CASTILEX is indeed vicariously liable for
the injuries and subsequent death of Romeo Vasquez caused by ABAD, who was on his way home from taking
snacks after doing overtime work for petitioner. Although the incident occurred when ABAD was not working
anymore "the inescapable fact remains that said employee would not have been situated at such time and place
had he not been required by petitioner to do overtime work." Moreover, since petitioner adopted the evidence
adduced by ABAD, it cannot, as the latter's employer, inveigle itself from the ambit of liability, and is thus estopped
by the records of the case, which it failed to refute.

We shall first address the issue raised by the private respondents regarding some alleged procedural lapses in the
petition.

Private respondent's contention of petitioner's violation of Section 11 of Rule 13 and Section 4 of Rule 45 of the
1997 Rules of Civil Procedure holds no water.

Sec. 11 of Rule 13 provides:

Sec. 11. Priorities in modes of services and filing. — Whenever practicable, the service and filing of
pleadings and other papers shall be done personally. Except with respect to papers emanating from the
court, a resort to other modes must be accompanied by a written explanation why the service or filing
was not done personally. A violation of this Rule may be cause to consider the paper as not filed.

The explanation why service of a copy of the petition upon the Court of Appeals was done by registered mail is
found on Page 28 of the petition. Thus, there has been compliance with the aforequoted provision.

As regards the allegation of violation of the material data rule under Section 4 of Rule 45, the same is unfounded.
The material dates required to be stated in the petition are the following: (1) the date of receipt of the judgment or
final order or resolution subject of the petition; (2) the date of filing of a motion for new trial or reconsideration, if any;
and (3) the date of receipt of the notice of the denial of the motion. Contrary to private respondent's claim, the
petition need not indicate the dates of the expiration of the original reglementary period and the filing of a motion for
extension of time to file the petition. At any rate, aside from the material dates required under Section 4 of Rule 45,
petitioner CASTILEX also stated in the first page of the petition the date it filed the motion for extension of time to file
the petition.

Now on the merits of the case.

The negligence of ABAD is not an issue at this instance. Petitioner CASTILEX presumes said negligence but claims
that it is not vicariously liable for the injuries and subsequent death caused by ABAD.
Petitioner contends that the fifth paragraph of Article 2180 of the Civil Code should only apply to instances where the
employer is not engaged in business or industry. Since it is engaged in the business of manufacturing and selling
furniture it is therefore not covered by said provision. Instead, the fourth paragraph should apply.

Petitioner's interpretation of the fifth paragraph is not accurate. The phrase "even though the former are not
engaged in any business or industry" found in the fifth paragraph should be interpreted to mean that it is not
necessary for the employer to be engaged in any business or industry to be liable for the negligence of his
employee who is acting within the scope of his assigned task.5

A distinction must be made between the two provisions to determine what is applicable. Both provisions apply to
employers: the fourth paragraph, to owners and managers of an establishment or enterprise; and the fifth
paragraph, to employers in general, whether or not engaged in any business or industry. The fourth paragraph
covers negligent acts of employees committed either in the service of the branches or on the occasion of their
functions, while the fifth paragraph encompasses negligent acts of employees acting within the scope of their
assigned task. The latter is an expansion of the former in both employer coverage and acts included. Negligent acts
of employees, whether or not the employer is engaged in a business or industry, are covered so long as they were
acting within the scope of their assigned task, even though committed neither in the service of the branches nor on
the occasion of their functions. For, admittedly, employees oftentimes wear different hats. They perform functions
which are beyond their office, title or designation but which, nevertheless, are still within the call of duty.

This court has applied the fifth paragraph to cases where the employer was engaged in a business or industry such
as truck operators6 and banks.7 The Court of Appeals cannot, therefore, be faulted in applying the said paragraph of
Article 2180 of the Civil Code to this 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.8

It is undisputed that ABAD was a Production Manager of petitioner CASTILEX at the time of the tort occurrence. As
to whether he was acting within the scope of his assigned task is a question of fact, which the court a quo and the
Court of Appeals resolved in the affirmative.

Well-entrenched in our jurisprudence is the rule that the factual findings of the Court of Appeals are entitled to great
respect, and even finality at times. This rule is, however, subject to exceptions such as when the conclusion is
grounded on speculations, surmises, or conjectures.9 Such exception obtain in the present case to warrant review
by this Court of the finding of the Court of Appeals that since ABAD was driving petitioner's vehicle he was acting
within the scope of his duties as a manager.

Before we pass upon the issue of whether ABAD was performing acts within the range of his employment, we shall
first take up the other reason invoked by the Court of Appeals in holding petitioner CASTILEX vicariously liable for
ABAD's negligence, i.e., that the petitioner did not present evidence that ABAD was not acting within the scope of
his assigned tasks at the time of the motor vehicle mishap. Contrary to the ruling of the Court of Appeals, it was not
incumbent upon the petitioner to prove the same. It was enough for petitioner CASTILEX to deny that ABAD was
acting within the scope of his duties; petitioner was not under obligation to prove this negative averment. Ei incumbit
probatio qui dicit, non qui negat (He who asserts, not he who denies, must prove). The Court has consistently
applied the ancient rule that if the plaintiff, upon whom rests the burden of proving his cause of action, fails to show
in a satisfactory manner facts which he bases his claim, the defendant is under no obligation to prove his exception
or defense. 10

Now on the issue of whether the private respondents have sufficiently established that ABAD was acting within the
scope of his assigned tasks.

ABAD, who was presented as a hostile witness, testified that at the time of the incident, he was driving a company-
issued vehicle, registered under the name of petitioner. He was then leaving the restaurant where he had some
snacks and had a chat with his friends after having done overtime work for the petitioner.

No absolutely hard and fast rule can be stated which will furnish the complete answer to the problem of whether at a
given moment, an employee is engaged in his employer's business in the operation of a motor vehicle, so as to fix
liability upon the employer because of the employee's action or inaction; but rather, the result varies with each state
of facts. 11

In Filamer Christian Institute v. Intermediate Appellant Court, 12 this Court had the occasion to hold that acts done
within the scope of the employee's assigned tasks includes "any act done by an employee in furtherance of the
interests of the employer or for the account of the employer at the time of the infliction of the injury or damages."
The court a quo and the Court of Appeals were one in holding that the driving by a manager of a company-issued
vehicle is within the scope of his assigned tasks regardless of the time and circumstances.

We do not agree. The mere fact that ABAD was using a service vehicle at the time of the injurious incident is not of
itself sufficient to charge petitioner with liability for the negligent operation of said vehicle unless it appears that he
was operating the vehicle within the course or scope of his employment.

The following are principles in American Jurisprudence on the employer's liability for the injuries inflicted by the
negligence of an employee in the use of an employer's motor vehicle:

I. Operation of Employer's Motor Vehicle in Going to

or from Meals

It has been held that an employee who uses his employer's vehicle in going from his work to a place where he
intends to eat or in returning to work from a meal is not ordinarily acting within the scope of his employment in the
absence of evidence of some special business benefit to the employer. Evidence that by using the employer's
vehicle to go to and from meals, an employee is enabled to reduce his time-off and so devote more time to the
performance of his duties supports the finding that an employee is acting within the scope of his employment while
so driving the vehicle. 13

II. Operation of Employer's Vehicle in Going to

or from Work

In the same vein, traveling to and from the place of work is ordinarily a personal problem or concern of the
employee, and not a part of his services to his employer. Hence, in the absence of some special benefit to the
employer other than the mere performance of the services available at the place where he is needed, the employee
is not acting within the scope of his employment even though he uses his employer's motor vehicle. 14

The employer may, however, be liable where he derives some special benefit from having the employee drive home
in the employer's vehicle as when the employer benefits from having the employee at work earlier and, presumably,
spending more time at his actual duties. Where the employee's duties require him to circulate in a general area with
no fixed place or hours of work, or to go to and from his home to various outside places of work, and his employer
furnishes him with a vehicle to use in his work, the courts have frequently applied what has been called the "special
errand" or "roving commission" rule, under which it can be found that the employee continues in the service of his
employer until he actually reaches home. However, even if the employee be deemed to be acting within the scope of
his employment in going to or from work in his employer's vehicle, the employer is not liable for his negligence
where at the time of the accident, the employee has left the direct route to his work or back home and is pursuing a
personal errand of his own.

III. Use of Employer's Vehicle Outside Regular Working Hours

An employer who loans his motor vehicle to an employee for the latter's personal use outside of regular working
hours is generally not liable for the employee's negligent operation of the vehicle during the period of permissive
use, even where the employer contemplates that a regularly assigned motor vehicle will be used by the employee
for personal as well as business purposes and there is some incidental benefit to the employer. Even where the
employee's personal purpose in using the vehicle has been accomplished and he has started the return trip to his
house where the vehicle is normally kept, it has been held that he has not resumed his employment, and the
employer is not liable for the employee's negligent operation of the vehicle during the return trip. 15

The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on the doctrine of
respondent superior, not on the principle of bonus pater familias as in ours. Whether the fault or negligence of the
employee is conclusive on his employer as in American law or jurisprudence, or merely gives rise to the
presumption juris tantum of negligence on the part of the employer as in ours, it is indispensable that the employee
was acting in his employer's business or within the scope of his assigned task. 16

In the case at bar, it is undisputed that ABAD did some overtime work at the petitioner's office, which was located in
Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in Fuente Osmeña, Cebu City, which is
about seven kilometers away from petitioner's place of business. 17 A witness for the private respondents, a sidewalk
vendor, testified that Fuente Osmeña is a "lively place" even at dawn because Goldie's Restaurant and Back Street
were still open and people were drinking thereat. Moreover, prostitutes, pimps, and drug addicts littered the place. 18

At the Goldie's Restaurant, ABAD took some snacks and had a chat with friends. It was when ABAD was leaving the
restaurant that the incident in question occurred. That same witness for the private respondents testified that at the
time of the vehicular accident, ABAD was with a woman in his car, who then shouted: "Daddy, Daddy!" 19 This
woman could not have been ABAD's daughter, for ABAD was only 29 years old at the time.
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a personal purpose not in line
with his duties at the time he figured in a vehicular accident. It was then about 2:00 a.m. of 28 August 1988, way
beyond the normal working hours. ABAD's working day had ended; his overtime work had already been completed.
His being at a place which, as petitioner put it, was known as a "haven for prostitutes, pimps, and drug pushers and
addicts," had no connection to petitioner's business; neither had it any relation to his duties as a manager. Rather,
using his service vehicle even for personal purposes was a form of a fringe benefit or one of the perks attached to
his position.

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. 20

WHEREFORE, the petition is GRANTED, and the appealed decision and resolution of the Court of Appeals is
AFFIRMED with the modification that petitioner Castilex Industrial Corporation be absolved of any liability for the
damages caused by its employee, Jose Benjamin Abad.

SO ORDERED.

Puno, Kapunan, Pardo and Ynares-Santiago, JJ., concur.

1 Rollo, 44-45.

2 Per Judge Pedro T. Garcia. Rollo, 58-75.

3 Per Vasquez, C. Jr., J., with De Pano, N., and Salas, B. Jr., JJ., concurring. Rollo, 44-51.

4 Rollo, 56.

5 V ARTURO M. TOLENTINO, CIVIL CODE OF THE PHILIPPINES 615 (1992).

6 Lanuzo v. Ping, 100 SCRA 205, 209-210 [1980]; Layugan v. Intermediate Appellate Court, 167 SCRA 363,
377 [1988].

7 Pacific Banking Corporation v. Court of Appeals, 173 SCRA 102, 117 [1989]; Go v. Intermediate Appellate
Court, 197 SCRA 22, 31 [1991].

8 Martin v. Court of Appeals, 205 SCRA 591 [1992]; Metro Manila Transit Corp. v. Court of Appeals, 223
SCRA 521, 539 [1993].

9 Layugan v. IAC, supra note 6, at 370-371; Vda. de Alcantara v. Court of Appeals, 252 SCRA 457, 468
[1996].

10 Belen v. Belen, 13 Phil. 202, 206 [1909], cited in Martin v. Court of Appeals, supra note 8.

11 7A AM. JUR. 2D AUTOMOBILES AND HIGHWAY TRAFFIC §687 (1980).

12 212 SCRA 637, 643 [1992].

13 7A AM. JUR 2D, AUTOMOBILE AND HIGHWAY TRAFFIC §699.

14 Id., §700.

15 7A AM JUR 2D, AUTOMOBILE AND HIGHWAY TRAFFIC §698.

16 2 CEZAR S. SANGCO, PHILIPPINE LAW ON TORTS AND DAMAGES 573 (1993) [HEREAFTER 2
SANGCO].

17 TSN, 9 July 1991, 2-3, 13.

18 TSN, 10 October 1989, 3; 7 August 1989, 8, 10.

19 TSN, 7 August 1989, 7-8.

20 2 SANGCO 573.

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