G.R. No. 242328 , April 26, 2021
UCPB GENERAL INSURANCE CO., INC., PETITIONER, VS. PASCUAL LINER, INC., RESPONDENT.

FACTS

Petitioner UCPB General Insurance Co., Inc. issued a comprehensive car insurance policy to Rommel B. Lojo for his BMW sedan. On December 9, 2005, the insured vehicle was bumped at the rear by a bus owned by respondent Pascual Liner, Inc. and driven by Leopoldo L. Cadavido. The impact caused the insured vehicle to hit another vehicle ahead. The accident was investigated, resulting in a Traffic Accident Sketch by the PNCC Skyway Corporation and a Traffic Accident Report by the PNP. The insured vehicle was deemed a total loss. Petitioner paid Lojo P520,000.00 under the policy and was subrogated to his rights. Petitioner filed a complaint for sum of money against respondent and Cadavido to recover P350,000.00 (the indemnity paid minus salvage value). The case was eventually raffled to the MeTC. Respondent, in its Answer, denied negligence and raised affirmative defenses including prescription, defective verification/certification against forum shopping, and lack of prior demand. During proceedings, only petitioner submitted judicial affidavits; respondent was declared in default. The MeTC initially ruled that without prior demand, respondent could not be in default, but upon reconsideration, applied the doctrine of res ipsa loquitur and held respondent liable. The RTC affirmed the MeTC. The Court of Appeals reversed, dismissing the complaint, holding that the Traffic Accident Sketch and Report were inadmissible hearsay as the officers who prepared them did not testify, and that res ipsa loquitur did not apply because the cause of the accident was known (the bus hitting the car from behind). Petitioner elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

Whether the Court of Appeals erred in reversing the lower courts’ decisions which held respondent liable based on the doctrine of res ipsa loquitur and the evidence presented, including the Traffic Accident Report and Sketch.

RULING

The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the Decision and Resolution of the Court of Appeals, and REINSTATED the Order of the MeTC dated November 17, 2015, as affirmed by the RTC, with modification on the interest rate. Respondent is liable to pay petitioner P350,000.00 plus interest at 6% per annum from the date of finality of the Decision until full payment.
The Supreme Court held:
1. On the Admissibility of Evidence and Res Ipsa Loquitur: The Court of Appeals erred in excluding the Traffic Accident Report and Sketch as hearsay. The doctrine of res ipsa loquitur is an exception to the rule against hearsay evidence. It establishes a presumption of negligence that can stand independently of the hearsay character of the evidence. The doctrine applies when: (a) the accident is of a kind that ordinarily does not occur in the absence of negligence; (b) the instrumentality causing the injury is within the exclusive control of the defendant; and (c) the injury is not due to any voluntary action or contribution by the plaintiff. All these conditions are present. A rear-end collision, where a bus hits a car from behind, ordinarily does not happen without negligence on the part of the bus driver. The bus was under the exclusive control of respondent’s driver. There was no showing that the insured vehicle contributed to the accident. The driver’s claim that the car veered and stopped momentarily was a bare allegation. Therefore, res ipsa loquitur applies, creating a presumption of negligence against respondent’s driver.
2. On the Liability of the Employer: Under Article 2180 of the Civil Code, employers are liable for the damages caused by their employees acting within the scope of their assigned tasks. Respondent admitted it owned the bus. The presumption of negligence of the driver, established via res ipsa loquitur, extends to respondent as the employer. Respondent failed to rebut this presumption with clear and convincing evidence of observance of the diligence of a good father of a family in the selection and supervision of its employee.
3. On Subrogation: Having indemnified the assured Lojo, petitioner was legally subrogated to his rights against the wrongdoer (respondent) pursuant to Article 2207 of the Civil Code.
4. On Procedural Issues: The Court found no merit in respondent’s affirmative defenses. The action was filed within the four-year prescriptive period. The verification and certification against forum shopping were properly authorized. Prior demand is not a condition precedent for a sum of money claim based on a quasi-delict (negligence). The default order against respondent was justified due to its failure to submit judicial affidavits as required.