G.R. No. 210976 , January 12, 2021
UCPB Leasing and Finance Corporation, Petitioner, vs. Heirs of Florencio Leporgo, Sr., represented by Florencio Leporgo, Jr., Respondents.

FACTS

Petitioner UCPB Leasing and Finance Corporation (ULFC) is the registered owner of an International Harvester Trailer Truck. On August 21, 1998, ULFC entered into a Lease Agreement with Subic Bay Movers, Inc. (SBMI) over the truck. On November 13, 2000, the truck, driven by Miguelito Almazan, recklessly moved on a national road in Calamba, Laguna, hitting several vehicles, including the car of Florencio Leporgo, Sr., causing an explosion that led to his death. The heirs of Leporgo filed a complaint for damages. ULFC filed a Motion to Dismiss, arguing improper service of summons, as the initial summons was served on Rosario A. Pinguel of ULFC’s Collection and Compliance Department, not on an officer listed in the Rules. The RTC ordered an alias summons, which was personally served on ULFC through its Office of the President and received by its Executive Secretary, Tetchie Paredes. ULFC filed an Answer Ad Cautelam. The RTC later impleaded SBMI, which was declared in default. The RTC rendered a decision holding ULFC and Almazan jointly and severally liable for damages. The Court of Appeals affirmed the RTC decision. ULFC filed a Petition for Review, arguing improper service of summons, exemption from liability under Republic Act No. 8556 , and erroneous computation of damages.

ISSUE

1. Whether the RTC acquired jurisdiction over ULFC.
2. Whether ULFC, as the registered owner of the trailer truck, may be held jointly and severally liable for damages.
3. Whether the lower courts properly computed the monetary award in favor of the heirs of Leporgo.

RULING

1. Yes, the RTC acquired jurisdiction over ULFC. The Court found that while the initial service on Pinguel was defective, the subsequent service on Paredes, the Executive Secretary of the Office of the President of ULFC, constituted substantial compliance. Paredes was an officer who could be relied upon to appreciate the importance of the summons. Moreover, ULFC actively participated in the proceedings by filing a Motion to Dismiss and an Answer Ad Cautelam, thereby submitting to the court’s jurisdiction.
2. Yes, ULFC may be held jointly and severally liable. The Court applied the “registered owner rule,” which holds the registered owner of a vehicle liable for damages caused by its operation, regardless of any lease agreement. The lease agreement between ULFC and SBMI did not qualify as a financial lease under Sections 3(d) and 12 of R.A. 8556, as it was not registered with the Land Transportation Office. Therefore, ULFC could not invoke the exemption from liability provided under Section 12 of R.A. 8556 for financing companies when the vehicle is leased to and in the possession of a third party.
3. The Court modified the computation of damages. The Court upheld the awards for actual damages (P482,533.04), civil indemnity (P50,000.00), moral damages (P1,000,000.00), exemplary damages (P50,000.00), and attorney’s fees (P20,000.00 plus appearance fees). However, it recalculated the loss of earning capacity. The Court held that the life expectancy should be based on the working life of the deceased, not the statistical life span of 80 years. Since Leporgo was a government employee with a compulsory retirement age of 65, and he was 57 at the time of death, his remaining working years were 8. Using the formula (2/3 x [80 – age at death] x gross annual income) was incorrect in this context. The Court remanded the case to the RTC for recalculation of loss of earning capacity based on the correct remaining working years and applicable jurisprudence. The Court also found the inclusion of income from “conduction services” unsupported by evidence and ordered its exclusion from the computation.