UCPB General Insurance Co., Inc. v. Pascual Liner, Inc.
REITERATIONFacts
The Antecedents: On December 9, 2005, a bus owned by Pascual Liner, Inc. (respondent), driven by Leopoldo L. Cadavido, bumped the rear of a vehicle insured by UCPB General Insurance Co., Inc. (petitioner) with comprehensive car insurance policy No. DLS05MD-MNP111436, owned by Rommel B. Lojo. The impact caused the insured vehicle to hit another vehicle in front of it. The insured vehicle sustained serious damage and was declared beyond economical repair. Petitioner paid Lojo P520,000.00 as insurance indemnity and was subrogated to Lojo's rights. Procedural History: Petitioner filed a complaint for sum of money against respondent and Cadavido. The case was initially dismissed for lack of jurisdiction, then refiled and dismissed again for failure to prosecute, and subsequently reinstated. Respondent filed an Answer, asserting that the Traffic Accident Report and Sketch were not categorical proof of negligence and that the cause of action had prescribed. The Metropolitan Trial Court (MeTC) initially ruled that respondent was not in default due to lack of demand but later, on reconsideration, found respondent liable for P350,000.00 plus interest and attorney's fees, applying the doctrine of res ipsa loquitur. The Regional Trial Court (RTC) affirmed the MeTC's decision. The Court of Appeals (CA) reversed the RTC, holding that the Traffic Accident Report and Sketch were inadmissible hearsay evidence for failing to meet the requisites of entries in official records, specifically the third requisite of personal knowledge by the public officer. The Petition: Petitioner seeks the reversal of the CA Decision, arguing that the CA erred in not applying the doctrine of res ipsa loquitur and in ruling that the Traffic Accident Report was inadmissible.
Issue(s)
Whether the Court of Appeals erred in ruling that Rule 130, Sec. 40 of the Revised Rules on Evidence is not applicable, specifically regarding the third requisite, and whether the Traffic Accident Report was admissible given the lack of timely objection. Whether the Court of Appeals erred in not applying the doctrine of res ipsa loquitur, and relatedly, the principles of subrogation and employer's liability.
Ruling
The petition is GRANTED. The Decision of the Court of Appeals is SET ASIDE. Pascual Liner Inc. is liable to pay UCPB General Insurance Co. Inc. the amount of P350,000.00, plus interest at the rate of six percent (6%) per annum from the date of finality of this Decision until its full payment.
Ratio Decidendi
On the issue of the admissibility of the Traffic Accident Report and the application of the hearsay rule: The Court held that while hearsay evidence is generally inadmissible, entries in official records are an exception if certain requisites are met. The CA found the third requisite lacking. However, the Supreme Court found that respondent Pascual Liner, Inc. failed to make a timely objection to the admissibility of the Traffic Accident Report. Under the rules, failure to interpose a timely objection constitutes a waiver, rendering the evidence admissible. The CA's ruling that the case fell under the Rules on Summary Procedure was incorrect. Therefore, the ordinary rules on offer and objection should have applied, and the CA should not have entertained the issue of admissibility on appeal. On the application of the doctrine of res ipsa loquitur, the principle of subrogation, and employer's liability: The Court reiterated that the doctrine of res ipsa loquitur is an exception to the hearsay rule. The doctrine applies when the accident is such that it would not ordinarily happen without negligence, the instrumentality causing the injury is under the defendant's exclusive management, and the accident is not due to the plaintiff's voluntary action. The elements of res ipsa loquitur were met in this case. The Court affirmed that petitioner, as the insurer who paid the insured's claim, is subrogated to the rights of the insured against the wrongdoer. The Court also reiterated the rule that when an employee causes damage due to negligence while performing duties, the employer is presumed negligent unless they prove they exercised the diligence of a good father of a family in the selection and supervision of employees. Respondent failed to present such proof, thus making it liable for the negligence of its employee. A prior demand is not a prerequisite for filing a collection case.
Main Doctrine
The doctrine of res ipsa loquitur can establish negligence even if the evidence presented is hearsay, provided there is no timely objection to its admissibility, as the doctrine itself provides a presumption of negligence based on the occurrence of the accident.