FIRST DIVISION

[G.R. No. 132266. December 21, 1999.]

CASTILEX INDUSTRIAL CORPORATION, petitioner, vs. VICENTE

VASQUEZ, JR. and LUISA SO VASQUEZ, and CEBU DOCTORS'
HOSPITAL, INC., respondents.

Angara Abello Concepcion Regala & Cruz for petitioner.

Fernan Mercado Cordero Dela Torre & Bael for respondent CDH.
Expedito Bugarin for J.B. Abad.
Rolindo A. Navarro for respondents Vasquez, Jr. & So Vasquez.

DECISION

DAVIDE, JR., C.J : p

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. cdll

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. cdrep

After the police authorities had conducted the investigation of

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 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 decision 3 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. LLphil

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
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 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. Cdpr

Section 11 of Rule 13 provides:

SECTION 11. Priorities in modes of service 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
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 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. cdasia

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 operators 6 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
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 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. llcd

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
I n Filamer Christian Institute v. Intermediate Appellate 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.
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 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 cda

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
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 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 respondeat 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.cdtai

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
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 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.

Footnotes
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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