FIRST DIVISION
G.R. No. 210976, January 12, 2021
UCPB LEASING AND FINANCE CORPORATION, Petitioner, v. HEIRS OF FLORENCIO LEPORGO, SR., REPRESENTED BY FLORENCIO LEPORGO, JR., Respondents.
D E C I S I O N
CARANDANG, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court (Rules), assailing the Decision2 dated August 15, 2013 and the Resolution3 dated January 21, 2014 of the Court of Appeals (CA) in CA-G.R. CV No. 93743 filed by petitioner UCPB Leasing and Finance Corporation (ULFC).
WHEREFORE, premises considered, judgment [is] hereby rendered in favor of the plaintiffs and against the defendants, as follows:The RTC held that there was substantial compliance with the rule on service of summons when it was served on an employee of ULFC's Collection and Compliance Department. The RTC opined that the subsequent service of summons by publication rectified whatever lapses the server committed. The RTC acknowledged that ULFC received the summons, the complaint and its annexes, and actively participated in the proceedings.17
1. Ordering the defendants, Miguelito Almazan, UCPB Leasing and Financing Corporation to pay plaintiffs jointly and severally, the sum of P482,533.04 as actual damages;
2. Ordering the aforesaid defendants to pay plaintiffs jointly and severally the sum of P1,000,000.00 as moral damages;
3. Ordering the said defendants to pay plaintiffs, jointly and severally, the sum of P50,000.00 by way of indemnity as a result of the untimely death of Leopoldo Leporgo Sr.;
4. Ordering the defendants to pay plaintiffs jointly and severally the total sum of EIGHT MILLION ONE HUNDRED TWENTY SEVEN THOUSAND NINE HUNDRED SIXTY PESOS (P8,127,960.00) representing the expected loss (sic) income of the late Leopoldo Leporgo, Sr.
5. Ordering said defendants to pay plaintiffs, jointly and severally the sum of P20,000.00 as attorney's fees, plus the sum of P20,000.00 as appearance fees, at the rate of P2,000.00 for every hearing;
6. Plus the further sum of FIFTY THOUSAND PESOS (P50,000.00), as exemplary damages
SO ORDERED.16
WHEREFORE, the appeal is DISMISSED. The Decision dated February 2, 2009 of the Regional Trial Court of Calamba City, Branch 35, in Civil Case No. 3203-01-C, is AFFIRMED.21 (Emphasis in the original)The CA held that there was substantial compliance with the requirements of the Rules when summons was twice served upon ULFC, first, through Pinguel of ULFC's Collection and Compliance Department, and through Paredes, Executive Secretary of the Office of the President of ULFC. The CA agreed with the ruling of the RTC that the circumstances attending the case allow for the application of the principle of substantial compliance because it was shown that ULFC actually received the summons and participated actively during trial, as shown by the Motion to Dismiss and Answer Ad Cautelam it filed. The CA further declared that Paredes, Executive Secretary of the Office of the President of ULFC, is an officer who may be relied upon to appreciate the importance of the papers she received.22
Section 11. Service upon a domestic private juridical entity. – When the defendant is a corporation, partnership or association organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel. (Emphasis supplied; italics in the original)Admittedly, the evidence on record, specifically the Sheriffs Report dated February 26, 200246 and March 22, 2002,47 reveal that none of the responsible officers of ULFC enumerated in the Rules, which include its president, managing partner, general manager, corporate secretary, treasurer, and in-house counsel, were personally served the summons. Pinguel, an employee of ULFC's Collection and Compliance Department, and Paredes, Executive Secretary of ULFC's Office of the President, are clearly not among the officers contemplated in Section 11 of Rule 14 of the Rules. Nevertheless, ULFC can no longer assail the validity of the service of summons at this stage of the proceedings.
Section 20. Voluntary appearance. – The defendant's voluntary appearance in the action shall be equivalent to service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance.In this case, although ULFC repeatedly invoked its defense of lack of jurisdiction due to improper service of summons, ULFC raised other arguments in its pleadings, like plaintiffs lack of cause of action and even pleaded a compulsory counterclaim, that the Court equates to a voluntary appearance without qualification, as contemplated in the first sentence of Section 20, Rule 14 of the Rules. The Court cannot conclude that ULFC only filed its Answer Ad Cautelam to prevent any declaration that it had waived its right to file any responsive pleading because there was no pending petition for certiorari filed in the CA assailing the validity of the service of summons to ULFC.
Section 12. Liability of lessors. – Financing companies shall not be liable for loss, damage or injury caused by a motor vehicle, aircraft, vessel, equipment, machinery or other property leased to a third person or entity except when the motor vehicle, aircraft, vessel, equipment or other property is operated by the financing company, its employees or agents at the time of the loss, damage or injury.However, ULFC is mistaken in its interpretation of the cited provision.
R.A. No. 4136, as amended, otherwise known as the Land Transportation and Traffic Code, to wit:In this case, it is undisputed that the Lease Agreement53 between ULFC and SBMI was not registered with the Land Transportation Office.54 Considering the non-registration of the lease agreement between the parties, ULFC cannot invoke Section 12 of R.A. 8556 to excuse itself from liability for the instantaneous death of Leporgo. Its liability remains even if the vehicle was under the control and possession of SBMI at the time of the accident.
Section 5. Compulsory registration of motor vehicles. – (a) All motor vehicles and trailer of any type used or operated on or upon any highway of the Philippines must be registered with the Bureau of Land Transportation (now the Land Transportation Office, per Executive Order No. 125, January 30, 1987, and Executive Order No. 125-A, April 13, 1987) for the current year in accordance with the provisions of this Act.
x x x
(e) Encumbrances of motor vehicles. – Mortgages, attachments, and other encumbrances of motor vehicles, in order to be valid against third parties must be recorded in the Bureau (now the Land Transportation Office). Voluntary transactions or voluntary encumbrances shall likewise be properly recorded on the face of all outstanding copies of the certificates of registration of the vehicle concerned.
Cancellation or foreclosure of such mortgages, attachments, and other encumbrances shall likewise be recorded, and in the absence of such cancellation, no certificate of registration shall be issued without the corresponding notation of mortgage, attachment and/or other encumbrances.
x x x
Neither is there an implied repeal of R.A. No. 4136. As a rule, repeal by implication is frowned upon, unless there is clear showing that the later statute is so irreconcilably inconsistent and repugnant to the existing law that they cannot be reconciled and made to stand together. There is nothing in R.A. No. 4136 that is inconsistent and incapable of reconciliation.
Thus, the rule remains the same: a sale, lease, or financial lease, for that matter, that is not registered with the Land Transportation Office, still does not bind third persons who are aggrieved in tortious incidents, for the latter need only to rely on the public registration of a motor vehicle as conclusive evidence of ownership. A lease such as the one involved in the instant case is an encumbrance in contemplation of law, which needs to be registered in order for it to bind third parties. Under this policy, the evil sought to be avoided is the exacerbation of the suffering of victims of tragic vehicular accidents in not being able to identify a guilty party. A contrary ruling will not serve the ends of justice. The failure to register a lease, sale, transfer or encumbrance, should not benefit the parties responsible, to the prejudice of innocent victims.
The non-registration of the lease contract between petitioner and its lessee precludes the former from enjoying the benefits under Section 12 of R.A. No. 8556.52 (Emphasis supplied; citations omitted)
14. INDEMNITY – The LESSEE shall indemnify and save the LESSOR harmless from any and all liability loss, damage, expense, causes of action, suits, claims or judgments arising from injury to person or property resulting from, based upon, or occasioned by, the actual or alleged use, operational, delivery, storage or transportation of the LEASED PROPERTY, or its location or condition; and shall at its own cost and expense defend any and all suits which may be brought against the LESSOR, either alone or in conjunction with others, upon such liability or claims and shall satisfy, pay and discharge any and all judgments and fines that may be recovered against the LESSOR, in any such action, provided, however, that the LESSOR shall give the LESSEE written notice of any such claim or demand. The LESSEE without the necessity of demand, shall immediately notify the LESSOR of any and each accident or of any occurrence involving the use, operation, delivery, storage or transportation of the LEASED PROPERTY which may lead to any claims or action.55However, the provision on the compulsory registration of motor vehicles found in Section 5 of R.A. 4136 still prevails. The stipulation in the lease agreement that is contrary to the minimum standards established by R.A. 4136 cannot be given effect.
[Heirs of Leporgo] are entitled to be indemnified of the loss of earning capacity of their father who was then earning as annual income of P173,520.00 (Exh. "BB"), income from conduction service (Exh. KK, inclusive) at the average of P180,000.00 annually, multiplied for the rest of his life expectancy of 23 years more, plus 57 years which is the age of Mr. Leporgo at the time of his death, would be equivalent to eighty (80) years, thus:There is a need to re-compute the Net Earning Capacity of Leporgo as it is not consistent with the formula adopted in prevailing jurisprudence.
P173,520.00--- annual income P180,000.00--- income from condition services per annum P353,520.00--- 23 years more P8,127,960.00--- total loss earnings59 (Emphasis and underscoring in the original)
ULFC posits that the factor of life expectancy should be adjusted to eight years instead of 23 years to be consistent with the retirement age of 65 years old for government officers.61 In effect, ULFC wants the Court to ignore the formula in computing life expectancy (2/3 x [80 – age at death]) that has been adopted in recent cases. The Court cannot restrict the computation of Leporgo's life expectancy to (2/3 x [65 – age at death]) simply because the deceased was a government employee whose mandatory age of retirement is 65 years old. The formula for the computation of loss of earning capacity is meant to be uniformly applied to all, regardless of the industry or sector they work in. Productivity and potential earnings of the deceased cannot be measured only during the period between his untimely death and the mandatory age of retirement in government service. The Court cannot disregard the possibility that the deceased could have chosen to continue working or making profit through other means had he not been prevented by his sudden death.
Net earning capacity= Life Expectancy x [Gross Annual Income (GAI)- Living Expenses (50% of GAI)],= [2/3 (80 - the age of the deceased)] x [GAI - (50% of GAI)]60
Therefore, the amount of loss of earning capacity awarded by the lower courts should be reduced to P2,710,319.99.
Net earning capacity= [2/3(80-57)] x [(P353,520.00) – (P353,520.00 50%)]= [2/3(23)] x (P353,520.00 – P176,760.00)= 15.33 x P176,760.00= P2,710,319.99
Article 2199. Except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is referred to as actual or compensatory damages. (Emphasis supplied)Thus, only the expenses proven by credible evidence may be awarded. In this case, the lower courts found that the claim for actual damages for the funeral and burial expenses the heirs of Leporgo incurred amounting to P463,786.24 were duly supported with documentary evidence presented during trial.64 This amount was no longer disputed by ULFC in the present petition. Thus, the award of actual damages is sustained.
Section 389. The Land Transportation Office shall not allow the registration or renewal of registration of any motor vehicle without first requiring from the land transportation operator or motor vehicle owner concerned the presentation and filing of a substantiating documentation in a form approved by the Commissioner evidencing that the policy of insurance or guaranty in cash or surety bond required by this chapter is in effect.Gliponeo added that ULFC does not have a system to find out whether its leased vehicles are covered by an insurance policy.70 To ensure that such laxity and neglect will not be repeated, the heirs of Leporgo are awarded P50,000.00 as exemplary damage.
x x xWhen an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.73 Since the award of loss of earning capacity, civil indemnity, and actual damages was given by the RTC in its Decision dated February 2, 2009, the interest on the amount awarded shall be deemed to run beginning said date. Likewise, the reckoning point for the interest, when imposed on unliquidated claims or damages such as moral damages and exemplary damages, is set on the date of the judgment of the court granting the award since it is only at such time when the amount claimed becomes "liquidated," that is, determined with reasonable certainty. Thus, the foregoing monetary award shall earn 6% interest per annum computed from the date of the Decision of the RTC, February 2, 2009, until finality of judgment.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.
And in addition to the above, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.72 (Emphasis and italics in the original; citations omitted)
A reversal of a judgment on appeal is binding on the parties to the suit, but shall not benefit the parties against whom the judgment was rendered in the court a quo. but who did not join in the appeal, unless their rights and liabilities and those of the parties appealing are so interwoven and dependent as to be inseparable, in which case a reversal as to one operates as a reversal as to all.75As a rule, a reversal of a judgment is binding only on the parties in the suit but does not control the interest of the parties who did not join nor were made parties to the appeal. A recognized exception is where the rights and liabilities of those who did not appeal and those of the parties appealing are so interwoven and dependent on each other as to be inseparable, a reversal of the judgment as to one would operate as a reversal to all.76
Endnotes:
1Rollo, pp. 36-61.
2 Penned by Associate Justice Stephen C. Cruz, with the concurrence of Associate Justices Magdangal M. De Leon and Myra V. Garcia-Fernandez; id. at 7-20.
3 Id. at 32-33.
4 Id. at 97-102.
5 Id. at 103-106.
6 Id. at 138-141.
7 Id. at 9.
8 Id.
9 Id.
10 Id. at 114.
11 Id.
12 Id. at 139.
13 Id. at 10.
14 Id.
15 Penned by Judge Romeo C. De Leon; id. at 138-146.
16 Id. at 146.
17 Id. at 142.
18 Id. at 142-143.
19 Id. at 144-146.
20 Supra note 2.
21Rollo, p. 20.
22 Id. at 12-15.
23 Id. at 15-16.
24 579 Phil. 418 (2008).
25Rollo, pp. 17-19
26 Id. at 19.
27 Supra note 3.
28Rollo, pp. 21-28.
29 Id. at 55-58.
30 Id. at 43-45.
31 Id. at 45-46.
32 Id. at 46-47.
33 Id. at 48-54.
34 Id. at 194-217.
35 Id. at 197-202.
36 Id. at 202-206.
37 Id. at 207-211.
38 Id. at 211-212.
39 Id. at 212.
40 Id. at 215-217.
41 Id. at 229-234.
42 Id. at 232-234.
43People's General Insurance Corp. v. Guansing, G.R. No. 204759, November 14, 2018.
44Toyota Cubao, Inc. v. Court of Appeals, 346 Phil. 181, 187 (1997), citing Keister v. Judge Navarro, 167 Phil. 567, 572 (1977).
45 RULES OF COURT, Rule 14, Section 6.
Section 6. Service in person on defendant. – Whenever practicable, the summons shall be served by handling a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.
46Rollo, p. 113.
47 Id. at 114.
48 Id. at 9.
49 Id.
50 Id.
51 Supra note 24.
52 Supra note 24 at 430-431.
53Rollo, pp. 97-102.
54 TSN dated June 2, 2003, p. 9.
55Rollo, pp. 99-100.
56 Supra note 24.
57 Supra note 24 at 431.
58Rollo, p. 145.
59 Id. at 145-146.
60People v. Moreno, G.R. No. 191759, March 2, 2020.
61Rollo, p. 45.
62People v. Oandasan, 787 Phil. 139, 157 (2016).
63Torreon v. Aparra, Jr., 822 Phi 1. 561, 58 1 (2017).
64Rollo, p. 145.
65 (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased.
66 SECTION 5. All Motor Vehicles and Other Vehicles must be Registered. - x x x x.
(e) Encumbrances of motor vehicles - Mortgages, attachments, and other encumbrances of motor vehicles, in order to be valid, must be recorded in the Land Transportation Commission and must be properly recorded on the face of all outstanding copies of the certificates of registration of the vehicle concerned.
x x x x.
67 TSN dated August 25, 2003, p. 19.
68 Amending Presidential Decree No. 612, Presidential Decree No. 1455, June 11, 1978.
69 Amendments to P.D. No. 612, as Amended, Republic Act No. 10607, August 15, 2013.
70 TSN dated August 25, 2003, pp. 19-20.
71 716 Phil. 267 (2013).
72 Id. at 282-283.
73 Id. at 282.
74Land Bank of the Philippines v. West Bay Colleges, Inc., 808 Phil. 712, 723 (2017), citing Nacar v. Gallery Frames, supra note 71.
75Atienza v. Saluta, G.R. No. 233413, June 17, 2019.
76Director of Lands v. Reyes, 161 Phil. 542, 547 (1976).cralawredlibrary