FGU Insurance Corp. v. CA

Facts:

On April 21, 1987, a car owned by private respondent FILCAR Transport Inc., rented to and driven by Dahl-Jensen, a Danish tourist, swerved into the right and hit the car owned by Lydia Soriano and driven by Benjamin Jacildone. Dahl-Jensen did not possess a Philippine driver’s license. Petitioner, as the insurer of Soriano’s car, paid the latter P25,382.20 and, by way of subrogation, sued FILCAR, Dahl-Jensen, and Fortune Insurance Corporation, FILCAR’s insurer, for quasi-delict. The trial court dismissed the petition for failure to substantiate the claim for subrogation. The Court of Appeals affirmed the decision, but on the ground that only Dahl-Jensen’s negligence was proven, not that of FILCAR. Hence, this instant petition.

Issues:

(1) Whether an action based on quasi-delict will prosper against a rent-a-car company and, consequently, its insurer for fault or negligence of the car lessee in driving the rented vehicle

(2) Whether the ruling in MYC-Agro-Industrial Corporation v. Vda. de Caldo is applicable in the case at bar

Held:

(1) We find no reversible error committed by respondent court in upholding the dismissal of petitioner's complaint. The pertinent provision is Art. 2176 of the Civil Code which states: "Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict . . . . ". To sustain a claim based thereon, the following requisites must concur: (a) damage suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection of cause and effect between the fault or negligence of the defendant and the damage incurred by the plaintiff. We agree with respondent court that petitioner failed to prove the existence of the second requisite, i.e., fault or negligence of defendant FILCAR, because only the fault or negligence of Dahl-Jensen was sufficiently established, not that of FILCAR. It should be noted that the damage caused on the vehicle of Soriano was brought about by the circumstance that Dahl-Jensen swerved to the right while the vehicle that he was driving was at the center lane. It is plain that the negligence was solely attributable to Dahl-Jensen thus making the damage suffered by the other vehicle his personal liability. Respondent FILCAR did not have any participation therein. Respondent FILCAR being engaged in a rent-a-car business was only the owner of the car leased to Dahl-Jensen. As such, there was no vinculum juris between them as employer and employee. Respondent FILCAR cannot in any way be responsible for the negligent act of Dahl-Jensen, the former not being an employer of the latter.

(2) Petitioner's insistence on MYC-Agro-Industrial Corporation is rooted in a misapprehension of our ruling therein. In that case, the negligent and reckless operation of the truck owned by petitioner corporation caused injuries to several persons and damage to property. Intending to exculpate itself from liability, the corporation raised the defense that at the time of the collision it had no more control over the vehicle as it was leased to another; and, that the driver was not its employee but of the lessee. The trial court was not persuaded as it found that the true nature of the alleged lease contract was nothing more than a disguise effected by the corporation to relieve itself of the burdens and responsibilities of an employer. We upheld this finding and affirmed the declaration of joint and several liability of the corporation with its driver.