Transpo Cases
THIRD DIVISION 2. P50,000.00 as moral damages; and
[G.R. No. 143360. September 5, 2002]
EQUITABLE LEASING CORPORATION, petitioner, vs. LUCITA SUYOM,
MARISSA ENANO, MYRNA TAMAYO and FELIX
OLEDAN, respondents.
DECISION
PANGANIBAN, J.:
In an action based on quasi delict, the registered owner of a motor vehicle is
solidarily liable for the injuries and damages caused by the negligence of the driver,
in spite of the fact that the vehicle may have already been the subject of an
unregistered Deed of Sale in favor of another person. Unless registered with the
Land Transportation Office, the sale -- while valid and binding between the parties
-- does not affect third parties, especially the victims of accidents involving the said
transport equipment. Thus, in the present case, petitioner, which is the registered
owner, is liable for the acts of the driver employed by its former lessee who has
become the owner of that vehicle by virtue of an unregistered Deed of Sale.
Statement of the Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing
the May 12, 2000 Decision[1] of the Court of Appeals[2] (CA) in CA-GR CV No.
55474. The decretal portion of the Decision reads as follows:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for
lack of merit. The assailed decision, dated May 5, 1997, of the Regional Trial Court
of Manila, Branch 14, in Civil Case No. 95-73522, is
hereby AFFIRMEDwith MODIFICATION that the award of attorneys fees
is DELETED.[3]
On the other hand, in Civil Case No. 95-73522, the Regional Trial Court (RTC)
of Manila (Branch 14) had earlier disposed in this wise:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendant Equitable Leasing Corporation ordering said defendant to pay to the
plaintiffs the following:
A. TO MYRNA TAMAYO
1. the sum of P50,000.00 for the death of Reniel Tamayo;
2. P50,000.00 as moral damages; and
3. P56,000.00 for the damage to the store and its contents, and funeral expenses.
B. TO FELIX OLEDAN
1. the sum of P50,000.00 for the death of Felmarie Oledan;
3. P30,000.00 for medical expenses, and funeral expenses.
C. TO MARISSA ENANO
1. P7,000.00 as actual damages
D. TO LUCITA SUYOM
1. The sum of P5,000.00 for the medical treatment of her two sons.
The sum of P120,000.00 as and for attorneys fees.[4]
The Facts
On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the
house cum store of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. A portion
of the house was destroyed. Pinned to death under the engine of the tractor were
Respondent Myrna Tamayos son, Reniel Tamayo, and Respondent Felix Oledans
daughter, Felmarie Oledan. Injured were Respondent Oledan himself, Respondent
Marissa Enano, and two sons of Respondent Lucita Suyom.
Tutor was charged with and later convicted of reckless imprudence resulting
in multiple homicide and multiple physical injuries in Criminal Case No. 296094-SA,
Metropolitan Trial Court of Manila, Branch 12.[5]
Upon verification with the Land Transportation Office, respondents were
furnished a copy of Official Receipt No. 62204139[6] and Certificate of Registration
No. 08262797,[7] showing that the registered owner of the tractor was Equitable
Leasing Corporation/leased to Edwin Lim. On April 15, 1995, respondents filed
against Raul Tutor, Ecatine Corporation (Ecatine) and Equitable Leasing Corporation
(Equitable) a Complaint[8] for damages docketed as Civil Case No. 95-73522 in the
RTC of Manila, Branch 14.
The trial court, upon motion of plaintiffs counsel, issued an Order dropping
Raul Tutor, Ecatine and Edwin Lim from the Complaint, because they could not be
located and served with summonses.[9] On the other hand, in its Answer with
Counterclaim,[10] petitioner alleged that the vehicle had already been sold to Ecatine
and that the former was no longer in possession and control thereof at the time of
the incident. It also claimed that Tutor was an employee, not of Equitable, but of
Ecatine.
After trial on the merits, the RTC rendered its Decision ordering petitioner to
pay actual and moral damages and attorneys fees to respondents. It held that since
the Deed of Sale between petitioner and Ecatine had not been registered with the
Land Transportation Office (LTO), the legal owner was still Equitable. [11] Thus,
petitioner was liable to respondents.[12]
Ruling of the Court of Appeals
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Sustaining the RTC, the CA held that petitioner was still to be legally deemed
the owner/operator of the tractor, even if that vehicle had been the subject of a
Deed of Sale in favor of Ecatine on December 9, 1992. The reason cited by the CA
was that the Certificate of Registration on file with the LTO still remained in
petitioners name.[13] In order that a transfer of ownership of a motor vehicle can
bind third persons, it must be duly recorded in the LTO.[14]
The CA likewise upheld respondents claim for moral damages against petitioner
because the appellate court considered Tutor, the driver of the tractor, to be an
agent of the registered owner/operator.[15]
Hence, this Petition.[16]
Issues
In its Memorandum, petitioner raises the following issues for the Courts
consideration:
I. Whether or not the Court of Appeals and the trial court gravely erred when they
decided and held that petitioner [was] liable for damages suffered by private
respondents in an action based on quasi delict for the negligent acts of a driver who
[was] not the employee of the petitioner.
II. Whether or not the Court of Appeals and the trial court gravely erred when they
awarded moral damages to private respondents despite their failure to prove that
the injuries they suffered were brought by petitioners wrongful act.[17]
This Courts Ruling
The Petition has no merit.
First Issue:
Liability for Wrongful Acts
Petitioner contends that it should not be held liable for the damages sustained
by respondents and that arose from the negligence of the driver of the Fuso Road
Tractor, which it had already sold to Ecatine at the time of the accident. Not having
employed Raul Tutor, the driver of the vehicle, it could not have controlled or
supervised him.[18]
We are not persuaded. In negligence cases, the aggrieved party may sue the
negligent party under (1) Article 100[19] of the Revised Penal Code, for civil
liability ex delicto; or (2) under Article 2176[20] of the Civil Code, for civil liability ex
quasi delicto.[21]
Furthermore, under Article 103 of the Revised Penal Code, employers may be
held subsidiarily liable for felonies committed by their employees in the discharge of
the latters duties.[22] This liability attaches when the employees who are convicted
of crimes committed in the performance of their work are found to be insolvent and
are thus unable to satisfy the civil liability adjudged.[23]
On the other hand, under Article 2176 in relation to Article 2180[24] of the Civil
Code, an action predicated on quasi delict may be instituted against the employer
for an employees act or omission. The liability for the negligent conduct of the
subordinate is direct and primary, but is subject to the defense of due diligence in
the selection and supervision of the employee.[25] The enforcement of the judgment
against the employer for an action based on Article 2176 does not require the
employee to be insolvent, since the liability of the former is solidary -- the latter
being statutorily considered a joint tortfeasor.[26] To sustain a claim based on quasi
delict, the following requisites must be proven: (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.[27]
These two causes of action (ex delicto or ex quasi delicto) may be availed
of, subject to the caveat[28] that the offended party cannot recover damages twice
for the same act or omission or under both causes.[29] Since these two civil liabilities
are distinct and independent of each other, the failure to recover in one will not
necessarily preclude recovery in the other.[30]
In the instant case, respondents -- having failed to recover anything in the
criminal case -- elected to file a separate civil action for damages, based on quasi
delict under Article 2176 of the Civil Code.[31] The evidence is clear that the deaths
and the injuries suffered by respondents and their kins were due to the fault of the
driver of the Fuso tractor.
Dated June 4, 1991, the Lease Agreement[32] between petitioner and Edwin
Lim stipulated that it is the intention of the parties to enter into a FINANCE LEASE
AGREEMENT.[33] Under such scheme, ownership of the subject tractor was to be
registered in the name of petitioner, until the value of the vehicle has been fully paid
by Edwin Lim.[34] Further, in the Lease Schedule,[35] the monthly rental for the
tractor was stipulated, and the term of the Lease was scheduled to expire on
December 4, 1992. After a few months, Lim completed the payments to cover the
full price of the tractor.[36] Thus, on December 9, 1992, a Deed of Sale[37] over the
tractor was executed by petitioner in favor of Ecatine represented by Edwin
Lim. However, the Deed was not registered with the LTO.
We hold petitioner liable for the deaths and the injuries complained of, because
it was the registered owner of the tractor at the time of the accident on July 17,
1994.[38] The Court has consistently ruled that, regardless of sales made of a motor
vehicle, the registered owner is the lawful operator insofar as the public and third
persons are concerned; consequently, it is directly and primarily responsible for the
consequences of its operation.[39] In contemplation of law, the owner/operator of
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record is the employer of the driver, the actual operator and employer being
considered as merely its agent.[40] The same principle applies even if the registered
owner of any vehicle does not use it for public service.[41]
Since Equitable remained the registered owner of the tractor, it could not
escape primary liability for the deaths and the injuries arising from the negligence
of the driver.[42]
The finance-lease agreement between Equitable on the one hand and Lim or
Ecatine on the other has already been superseded by the sale. In any event, it does
not bind third persons. The rationale for this rule has been aptly explained in Erezo
v. Jepte,[43] which we quote hereunder:
x x x. The main aim of motor vehicle registration is to identify the owner so that if
any accident happens, or that any damage or injury is caused by the vehicle on the
public highways, responsibility therefor can be fixed on a definite individual, the
registered owner. Instances are numerous where vehicles running on public
highways caused accidents or injuries to pedestrians or other vehicles without
positive identification of the owner or drivers, or with very scant means of
identification. It is to forestall these circumstances, so inconvenient or prejudicial to
the public, that the motor vehicle registration is primarily ordained, in the interest
of the determination of persons responsible for damages or injuries caused on public
highways.[44]
Further, petitioners insistence on FGU Insurance Corp. v. Court of Appeals is
misplaced.[45] First, in FGU Insurance, the registered vehicle owner, which was
engaged in a rent-a-car business, rented out the car. In this case, the registered
owner of the truck, which is engaged in the business of financing motor vehicle
acquisitions, has actually sold the truck to Ecatine, which in turn employed
Tutor. Second, in FGU Insurance, the registered owner of the vehicle was not held
responsible for the negligent acts of the person who rented one of its cars, because
Article 2180 of the Civil Code was not applicable. We held that no vinculum juris as
employer and employee existed between the owner and the driver. [46] In this case,
the registered owner of the tractor is considered under the law to be the employer
of the driver, while the actual operator is deemed to be its agent.[47]Thus, Equitable,
the registered owner of the tractor, is -- for purposes of the law on quasi delict --
the employer of Raul Tutor, the driver of the tractor. Ecatine, Tutors actual
employer, is deemed as merely an agent of Equitable.[48]
True, the LTO Certificate of Registration, dated 5/31/91, qualifies the name of
the registered owner as EQUITABLE LEASING CORPORATION/Leased to Edwin
Lim. But the lease agreement between Equitable and Lim has been overtaken by
the Deed of Sale on December 9, 1992, between petitioner and Ecatine. While this
Deed does not affect respondents in this quasi delict suit, it definitely binds petitioner
because, unlike them, it is a party to it.
We must stress that the failure of Equitable and/or Ecatine to register the sale
with the LTO should not prejudice respondents, who have the legal right to rely on
the legal principle that the registered vehicle owner is liable for the damages caused
by the negligence of the driver. Petitioner cannot hide behind its allegation that
Tutor was the employee of Ecatine. This will effectively prevent respondents from
recovering their losses on the basis of the inaction or fault of petitioner in failing to
register the sale. The non-registration is the fault of petitioner, which should thus
face the legal consequences thereof.
Second Issue:
Moral Damages
Petitioner further claims that it is not liable for moral damages, because
respondents failed to establish or show the causal connection or relation between
the factual basis of their claim and their wrongful act or omission, if any. [49]
Moral damages are not punitive in nature, but are designed to
compensate[50] and alleviate in some way the physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury unjustly caused a person.[51] Although incapable of
pecuniary computation, moral damages must nevertheless be somehow proportional
to and in approximation of the suffering inflicted.[52] This is so because moral
damages are in the category of an award designed to compensate the claimant for
actual injury suffered, not to impose a penalty on the wrongdoer.[53]
Viewed as an action for quasi delict, the present case falls squarely within the
purview of Article 2219 (2),[54] which provides for the payment of moral damages in
cases of quasi delict.[55] Having established the liability of petitioner as the registered
owner of the vehicle,[56] respondents have satisfactorily shown the existence of the
factual basis for the award[57] and its causal connection to the acts of Raul Tutor,
who is deemed as petitioners employee.[58] Indeed, the damages and injuries
suffered by respondents were the proximate result of petitioners tortious act or
omission.[59]
Further, no proof of pecuniary loss is necessary in order that moral damages
may be awarded, the amount of indemnity being left to the discretion of the
court.[60] The evidence gives no ground for doubt that such discretion was properly
and judiciously exercised by the trial court.[61] The award is in fact consistent with
the rule that moral damages are not intended to enrich the injured party, but to
alleviate the moral suffering undergone by that party by reason of the defendants
culpable action.[62]
WHEREFORE, the Petition is DENIED and the assailed
Decision AFFIRMED. Costs against petitioner.
SO ORDERED.
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THIRD DIVISION
G.R. No. 98275 November 13, 1992
BA FINANCE CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, REGIONAL TRIAL COURT OF ANGELES CITY,
BRANCH LVI, CARLOS OCAMPO, INOCENCIO TURLA, SPOUSES MOISES
AGAPITO and SOCORRO M. AGAPITO and NICOLAS CRUZ, respondents.
MELO, J.:
The question of petitioner's responsibility for damages when on March 6, 1983, an
accident occurred involving petitioner's Isuzu ten-wheeler truck then driven by an
employee of Lino Castro is the thrust of the petition for review on certiorari now
before Us considering that neither the driver nor Lino Castro appears to be
connected with petitioner.
On October 13, 1988, the disputed decision in the suit below was rendered by the
court of origin in this manner:
1. Ordering Rock B.A. and Rogelio Villar y Amare jointly and
severally to pay the plaintiffs as follows:
a) To the plaintiff Carlos Ocampo — petitioner and Rock Component Philippines relative to the latter's duty to reimburse
P121,650.00;
b) To the plaintiff Moises Ocampo — Petitioner asseverates that it should not have been haled to court and ordered to
P298,500.00
c) To the plaintiff Nicolas Cruz — P154,740.00
d) To the plaintiff Inocencio Turla, Sr. —
48,000.00
2. Dismissing the case against Lino Castro
3. Dismissing the third-party complaint against STRONGHOLD
4. Dismissing all the counterclaim of the defendants and third-
party defendants.
5. Ordering ROCK to reimburse B.A. the total amount of
P622,890.00 which the latter is adjudged to pay to the plaintiffs.
(p. 46, Rollo)
Respondent Court of Appeals affirmed the appealed disposition in toto through
Justice Rasul, with Justices De Pano, Jr. and Imperial concurring, on practically the
same grounds arrived at by the court a quo (p. 28, Rollo). Efforts exerted towards
re-evaluation of the adverse were futile (p. 37, Rollo). Hence, the instant petition.
The lower court ascertained after due trial that Rogelio Villar y Amare, the driver of
the Isuzu truck, was at fault when the mishap occurred in as much as he was found
guilty beyond reasonable doubt of reckless imprudence resulting in triple homicide
with multiple physical injuries with damage to property in a decision rendered on
February 16, 1984 by the Presiding Judge of Branch 6 of the Regional Trial Court
stationed at Malolos, Bulacan. Petitioner was adjudged liable for damages in as much
as the truck was registered in its name during the incident in question, following the
doctrine laid down by this Court in Perez vs. Gutierrez (53 SCRA 149 [1973])
and Erezo, et al. vs. Jepte (102 Phil. 103 [1957]). In the same breadth, Rock
Component Philippines, Inc. was ordered to reimburse petitioner for any amount
that the latter may be adjudged liable to pay herein private respondents as expressly
stipulated in the contract of lease between petitioner and Rock Component
Philippines, Inc. Moreover, the trial court applied Article 2194 of the new Civil Code
on solidary accountability of join tortfeasors insofar as the liability of the driver,
herein petitioner and Rock Component Philippines was concerned (pp. 6-7, Decision;
pp. 44-45, Rollo).
To the question of whether petitioner can be held responsible to the victim albeit
the truck was leased to Rock Component Philippines when the incident occurred,
the appellate court answered in the affirmative on the basis of the jurisprudential
dogmas which, as aforesaid, were relied upon by the trial court although respondent
court was quick to add the caveat embodied in the lease covenant between
any amount which may be adjudged against petitioner (pp. 32-33, Rollo).
respond for the damage in the manner arrived at by both the trial and appellate
courts since paragraph 5 of the complaint lodged by the plaintiffs below would
indicate that petitioner was not the employer of the negligent driver who was under
the control an supervision of Lino Castro at the time of the accident, apart from the
fact that the Isuzu truck was in the physical possession of Rock Component
Philippines by virtue of the lease agreement.
Aside from casting clouds of doubt on the propriety of invoking
the Perez and Erezo doctrines, petitioner continue to persist with the idea that the
pronouncements of this Court in Duavit vs. Court of Appeals (173 SCRA 490 [1989])
and Duquillo vs. Bayot (67 Phil 131 [1939]) dovetail with the factual and legal
scenario of the case at hand. Furthermore, petitioner assumes, given the so-
called hiatus on the basis for the award of damages as decreed by the lower and
appellate courts, that Article 2180 of the new Civil Code on vicarious liability will
divest petitioner of any responsibility absent as there is any employer-employee
relationship between petitioner and the driver.
Contrary to petitioner's expectations, the recourse instituted from the rebuffs it
encountered may not constitute a sufficient foundation for reversal of the impugned
judgment of respondent court. Petitioner is of the impression that
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the Perez and Erezo cases are inapplicable due to the variance of the generative
facts in said cases as against those obtaining in the controversy at bar. A contrario,
the lesson imparted by Justice Labrador in Erezo is still good law, thus:
. . . In previous decisions, We already have held that the
registered owner of a certificate of public convenience is liable to
the public for the injuries or damages suffered by passengers or
third persons caused by the operation of said vehicle, even though
the same had been transferred to a third person. (Montoya vs.
Ignacio, 94 Phil., 182 50 Off. Gaz., 108; Roque vs. Malibay Transit,
Inc., G.R. No. L-8561, November 18, 1955; Vda. de Medina vs.
Cresencia, 99 Phil., 506, 52 Off. Gaz., [10], 4606.) The principle
upon which this doctrine is based is that in dealing with vehicles
registered under the Public Service Law, the public has the right
to assume or presumed that the registered owner is the actual
owner thereof, for it would be difficult with the public to enforce
the actions that they may have for injuries caused to them by the
vehicles being negligently operated if the public should be
required to prove who actual the owner is. How would the public
or third persons know against whom to enforce their rights in case
of subsequent transfer of the vehicles? We do not imply by this
doctrine, however, that the registered owner may not recover
whatever amount he had paid by virtue of his liability to third
persons from the person to whom he had actually sold, assigned
or conveyed the vehicle.
Under the same principle the registered owner of any vehicle,
even if not used for a public service, should primarily responsible
to the public or to the third persons for injuries caused the latter
while the vehicle is being driven on the highways or streets. The
members of the Court are in agreement that the defendant-
appellant should be held liable to plaintiff-appellee for the injuries
occasioned to the latter because of the negligence of the driver,
even if the defendant-appellant was no longer an owner of the
vehicle at the time of the damage because he had previously sold
it to another. What is the legal basis for his (defendants-
appellant's) liability?
There is a presumption that the owner of the guilty vehicle is the
defendant-appellant as he is the registered owner in the Motor
Vehicle Office. Should he not be allowed to prove the truth, that
he had sold it to another and thus shift the responsibility for the
injury to the real and the actual owner? The defendants hold the
affirmative of this proposition; the trial court hold the negative.
The Revised Motor Vehicle Law (Act No. 3992, as amended)
provides that the vehicle may be used or operated upon any public
highway unless the same is properly registered. It has been stated
that the system of licensing and the requirement that each
machine must carry a registration number, conspicuously
displayed, is one of the precautions taken to reduce the danger of
injury of pedestrians and other travelers from the careless
management of automobiles, and to furnish a means of
ascertaining the identity of persons violating the laws and
ordinances, regulating the speed and operation of machines upon
the highways (2 R. C. L. 1176). Not only are vehicles to be
registered and that no motor vehicles are to be used or operated
without being properly registered from the current year, furnish
the Motor Vehicle Office a report showing the name and address
of each purchaser of motor vehicle during the previous month and
the manufacturer's serial number and motor number. (Section
5[c], Act No. 3992, as amended.)
Registration is required not to make said registration the operative
act by which ownership in vehicles is transferred, as in land
registration cases, because the administrative proceeding of
registration does not bear any essential relation to the contract of
sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39
Phil. 888), but to permit the use and operation of the vehicle upon
any public highway (section 5[a], Act No. 3992, as amended). the
main aim of motor vehicle registration is to identify the owner so
that if any accident happens, or that any damage or injury is
caused by the vehicle on the public highways, responsibility
therefor can be fixed on a definite individual, the registered
owner. Instances are numerous where vehicles running on public
highways caused accidents or injuries to pedestrians or other
vehicles without positive identification of the owner or drivers, or
with very scant means of identification. It is to forestall these
circumstances, so inconvenient or prejudicial to the public, that
the motor vehicle registration is primarily obtained, in the interest
of the determinations of persons responsible for damages or
injuries caused on public highways.
One of the principle purposes of motor vehicles
legislation is identification of the vehicle and of
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the operator, in case of accident; and another
is that the knowledge that means of detection
are always available my act as a deterrent from
lax observance of the law and of the rules of
conservative and safe operation. Whatever
purpose there may be in these statutes, it is
subordinate at the last to the primary purpose
of rendering it certain that the violator of the
law or of the rules of safety shall not escape
because of lack of means to discover him. The
purpose of the statute is thwarted, and the
displayed number becomes a "share and
delusion," if courts would entertain such
defenses as that put forward by appellee in this
case. No responsible person or corporation
could be held liable for the most outrageous
acts of negligence, if they should be allowed to
pace a "middleman" between them and the
public, and escape liability by the manner in
which they recompense their servants. (King vs.
Breham Automobile Co., Inc. 145 S. W. 278,
279.)
With the above policy in mind, the question that defendant-
appellant poses is: should not the registered owner be allowed at
the trial to prove who the actual and real owner is, and in
accordance with such proof escape or evade responsibility and lay
the same on the person actually owning the vehicle? We hold with
the trial court that the law does not allow him to do so; the law,
with its aim and policy in mind, does not relieve him directly of
the responsibility that the law fixes and places upon him as an
incident or consequence of registration. Were a registered owner
allowed to evade responsibility by proving who the supposed
transferee or owner is, it would be easy for him, by collusion with
others or otherwise, to escape said responsibility and transfer the
same to an indefinite person, or to one who possesses no property
with which to respond financially for the damage or injury done.
A victim of recklessness on the public highways is usually without
means to discover or Identify the person actually causing the
injury or damage. He has no means other then by a recourse to
the registration in the Motor Vehicles Office to determine who is
the owner. The protection that the law aims to extend to him
would become illusory were the registered owner given the
opportunity to escape liability by disproving his ownership. If the
policy of the law is to be enforced and carried out, the registered
owner should not be allowed to prove the contrary to the
prejudice of the person injured, that is, to prove that a third
person or another has become the owner, so that he may thereby
be relieved of the responsibility to the injured person.
The above policy and application of the law may appear quite
harsh and would seem to conflict with truth and justice. We do
not think it is so. A registered owner who has already sold or
transferred a vehicle has the recourse to a third-party complaint,
in the same action brought against him to recover for the damage
or injury done, against the vendee or transferee of the vehicle.
The inconvenience of the suit is no justification for relieving him
of liability; said inconvenience is the price he pays for failure to
comply with the registration that the law demands and requires.
In synthesis, we hold that the registered owner, the defendant-
appellant herein, is primarily responsible for the damage caused
to the vehicle of the plaintiff-appellee, but he (defendant-
appellant) has a right to be indemnified by the real or actual owner
of the amount that he may be required to pay as damage for the
injury caused to the plaintiff-appellant.
If the foregoing words of wisdom were applied in solving the circumstance whereof
the vehicle had been alienated or sold to another, there certainly can be no serious
exception against utilizing the same rationale to the antecedents of this case where
the subject vehicle was merely leased by petitioner to Rock Component Philippines,
Inc., with petitioner retaining ownership over the vehicle.
Petitioner's reliance on the ruling of this Court in Duavit vs. Court of Appeals and
in Duquillo vs. Bayot (supra) is legally unpalatable for the purpose of the present
discourse. The vehicles adverted to in the two cases shared a common thread, so
to speak, in that the jeep and the truck were driven in reckless fashion without the
consent or knowledge of the respective owners. Cognizant of the inculpatory
testimony spewed by defendant Sabiniano when he admitted that he took the jeep
from the garage of defendant Dauvit without the consent or authority of the latter,
Justice Gutierrez, Jr. in Duavit remarked;
. . . Herein petitioner does not deny ownership of the vehicle
involved in the mishap but completely denies having employed
the driver Sabiniano or even having authorized the latter to drive
his jeep. The jeep was virtually stolen from the petitioner's
garage. To hold, therefore, the petitioner liable for the accident
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caused by the negligence of Sabiniano who was neither his driver

nor employee would be absurd as it would be like holding liable
the owner of a stolen vehicle for an accident caused by the person
who stole such vehicle. In this regard, we cannot ignore the many
cases of vehicles forcibly taken from their owners at gunpoint or
stolen from garages and parking areas and the instances of
service station attendants or mechanics of auto repair shops
using, without the owner's consent, vehicles entrusted to them for
servicing or repair.(at p. 496.)
In the Duquillo case, the defendant therein cannot, according to Justice Diaz, be
held liable for anything because of circumstances which indicated that the truck was
driven without the consent or knowledge of the owner thereof.
Consequently, there is no need for Us to discuss the matter of imputed negligence
because petitioner merely presumed, erroneously, however, that judgment was
rendered against it on the basis of such doctrine embodied under Article 2180 of the
new Civil Code.
WHEREFORE, the petition is hereby DISMISSED and decision under review
AFFIRMED without special pronouncement as to costs.
SO ORDERED.

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G.R. No. 82318 May 18, 1989
GILBERTO M. DUAVIT, petitioner,
vs.
THE HON. COURT OF APPEALS, Acting through the Third Division, as
Public Respondent, and ANTONIO SARMIENTO, SR. & VIRGILIO
CATUAR respondents.
GUTIERREZ, JR., J.:
This petition raises the sole issue of whether or not the owner of a private vehicle
which figured in an accident can be held liable under Article 2180 of the Civil Code
when the said vehicle was neither driven by an employee of the owner nor taken
with the consent of the latter.
The facts are summarized in the contested decision, as follows:
From the evidence adduced by the plaintiffs, consisting of the
testimonies of witnesses Virgilio Catuar, Antonio Sarmiento, Jr.,
Ruperto Catuar, Jr. and Norberto Bernarte it appears that on July
28, 1971 plaintiffs Antonio Sarmiento, Sr. and Virgilio Catuar were
aboard a jeep with plate number 77-99-F-I Manila, 1971, owned
by plaintiff, Ruperto Catuar was driving the said jeep on Ortigas
Avenue, San Juan, Rizal; that plaintiff's jeep, at the time, was
running moderately at 20 to 35 kilometers per hour and while
approaching Roosevelt Avenue, Virgilio Catuar slowed down; that
suddenly, another jeep with plate number 99-97-F-J Manila 1971
driven by defendant Oscar Sabiniano hit and bumped plaintiff's
jeep on the portion near the left rear wheel, and as a result of the
impact plaintiff's jeep fell on its right and skidded by about 30
yards; that as a result plaintiffs jeep was damaged, particularly
the windshield, the differential, the part near the left rear wheel
and the top cover of the jeep; that plaintiff Virgilio Catuar was
thrown to the middle of the road; his wrist was broken and he
sustained contusions on the head; that likewise plaintiff Antonio
Sarmiento, Sr. was trapped inside the fallen jeep, and one of his
legs was fractured.
Evidence also shows that the plaintiff Virgilio Catuar spent a total
of P2,464.00 for repairs of the jeep, as shown by the receipts of
payment of labor and spare parts (Exhs. H to H-7 Plaintiffs
likewise tried to prove that plaintiff Virgilio Catuar, immediately
after the accident was taken to Immaculate Concepcion Hospital,
and then was transferred to the National Orthopedic Hospital; that
while plaintiff Catuar was not confined in the hospital, his wrist
was in a plaster cast for a period of one month, and the contusions
on his head were under treatment for about two (2) weeks; that
for hospitalization, medicine and allied expenses, plaintiff Catuar
spent P5,000.00.
Evidence also shows that as a result of the incident, plaintiff
Antonio Sarmiento, Sr. sustained injuries on his leg; that at first,
he was taken to the National Orthopedic Hospital (Exh. K but later
he was confined at the Makati Medical Center from July 29, to
August 29, 1971 and then from September 15 to 25, 1971; that
his leg was in a plaster cast for a period of eight (8) months; and
that for hospitalization and medical attendance, plaintiff Antonio
Sarmiento, Sr. spent no less than P13,785.25 as evidenced by
receipts in his possession. (Exhs. N to N-1).
Proofs were adduced also to show that plaintiff Antonio sarmiento
Sr. is employed as Assistant Accountant of the Canlubang Sugar
Estate with a salary of P1,200.00 a month; that as sideline he also
works as accountant of United Haulers Inc. with a salary of
P500.00 a month; and that as a result of this incident, plaintiff
Sarmiento was unable to perform his normal work for a period of
at least 8 months. On the other hand, evidence shows that the
other plaintiff Virgilio Catuar is a Chief Clerk in Canlubang Sugar
Estate with a salary of P500.00 a month, and as a result of the
incident, he was incapacitated to work for a period of one (1)
month.
The plaintiffs have filed this case both against Oscar Sabiniano as
driver, and against Gualberto Duavit as owner of the jeep.
Defendant Gualberto Duavit, while admitting ownership of the
other jeep (Plate No. 99-07-F-J Manila, 1971), denied that the
other defendant (Oscar Sabiniano) was his employee. Duavit
claimed that he has not been an employer of defendant Oscar
Sabiniano at any time up to the present.
On the other hand documentary and testimonial evidence show
that defendant Oscar Sabiniano was an employee of the Board of
Liquidators from November 14, 1966 up to January 4, 1973
(Annex A of Answer).
Defendant Sabiniano, in his testimony, categorically admitted that
he took the jeep from the garage of defendant Duavit without the
consent or authority of the latter (TSN, September 7, 1978, p. 8).
He testified further, that Duavit even filed charges against him for
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theft of the jeep, but which Duavit did not push through as his
(Sabiniano's) parents apologized to Duavit on his behalf.
Defendant Oscar Sabiniano, on the other hand in an attempt to
exculpate himself from liability, makes it appear that he was
taking all necessary precaution while driving and the accident
occurred due to the negligence of Virgilio Catuar. Sabiniano claims
that it was plaintiffs vehicle which hit and bumped their jeep.
(Reno, pp. 21-23)
The trial court found Oscar Sabiniano negligent in driving the vehicle but found no
employer-employee relationship between him and the petitioner because the latter
was then a government employee and he took the vehicle without the authority and
consent of the owner. The petitioner was, thus, absolved from liability under Article
2180 of the Civil Code.
The private respondents appealed the case.
On January 7, 1988, the Court of Appeals rendered the questioned decision holding
the petitioner jointly and severally liable with Sabiniano. The appellate court in part
ruled:
We cannot go along with appellee's argument. It will be seen that
in Vargas v. Langcay, supra, it was held that it is immaterial
whether or not the driver was actually employed by the operator
of record or registered owner, and it is even not necessary to
prove who the actual owner of the vehicle and who the employer
of the driver is. When the Supreme Court ruled, thus: 'We must
hold and consider such owner-operator of record (registered
owner) as the employer in contemplation of law, of the driver,' it
cannot be construed other than that the registered owner is the
employer of the driver in contemplation of law. It is a conclusive
presumption of fact and law, and is not subject to rebuttal of proof
to the contrary. Otherwise, as stated in the decision, we quote:
The purpose of the principles evolved by the decisions in these
matters will be defeated and thwarted if we entertain the
argument of petitioner that she is not liable because the actual
owner and employer was established by the evidence. . . .
Along the same vein, the defendant-appellee Gualberto Duavit cannot be allowed to
prove that the driver Sabiniano was not his employee at the time of the vehicular
accident.
The ruling laid down in Amar V. Soberano (1966), 63 O.G. 6850,
by this Court to the effect that the burden of proving the non-
existence of an employer-employee relationship is upon the
defendant and this he must do by a satisfactory preponderance
of evidence, has to defer to the doctrines evolved by the Supreme
Court in cases of damages arising from vehicular mishaps
involving registered motor vehicle. (See Tugade v. Court of
Appeals, 85 SCRA 226, 230). (Rollo, pp. 26-27)
The appellate court also denied the petitioner's motion for reconsideration. Hence,
this petition.
The petitioner contends that the respondent appellate court committed grave abuse
of discretion in holding him jointly and severally liable with Sabiniano in spite of the
absence of an employer-employee relationship between them and despite the fact
that the petitioner's jeep was taken out of his garage and was driven by Sabiniano
without his consent.
As early as in 1939, we have ruled that an owner of a vehicle cannot be held liable
for an accident involving the said vehicle if the same was driven without his consent
or knowledge and by a person not employed by him. Thus, in Duquillo v. Bayot (67
Phil. 131-133-134) [1939] we said:
Under the facts established, the defendant cannot be held liable
for anything. At the time of the accident, James McGurk was
driving the truck, and he was not an employee of the defendant,
nor did he have anything to do with the latter's business; neither
the defendant nor Father Ayson, who was in charge of her
business, consented to have any of her trucks driven on the day
of the accident, as it was a holy day, and much less by a chauffeur
who was not in charge of driving it; the use of the defendant's
truck in the circumstances indicated was done without her consent
or knowledge; it may, therefore, be said, that there was not the
remotest contractual relation between the deceased Pio Duquillo
and the defendant. It necessarily follows from all this that articles
1101 and following of the Civil Code, cited by the appellant, have
no application in this case, and, therefore, the errors attributed to
the inferior court are without basis.
The Court upholds the above ruling as still relevant and better applicable to present
day circumstances.
The respondent court's misplaced reliance on the cases of Erezo v. Jepte (102 Phil.
103 [1957] and Vargas v. Langcay (6 SCRA 174 [1962]) cannot be sustained. In the
Erezo case, Jepte, the registered owner of the truck which collided with a taxicab,
and which resulted in the killing of Erezo, claimed that at the time of the accident,
the truck belonged to the Port Brokerage in an arrangement with the corporation
but the same was not known to the Motor Vehicles Office. This Court sustained the
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trial court's ruling that since Jepte represented himself to be the owner of the truck WHEREFORE, the petition is GRANTED and the decision and resolution appealed
and the Motor Vehicles Office, relying on his representation, registered the vehicle from are hereby ANNULLED and SET ASIDE. The decision of the then Court of First
in his name, the Government and all persons affected by the representation had the Instance (now Regional Trial Court) of Laguna, 8th Judicial District, Branch 6, dated
right to rely on his declaration of ownership and registration. Thus, even if Jepte July 30, 1981 is REINSTATED.
were not the owner of the truck at the time of the accident, he was still held liable SO ORDERED.
for the death of Erezo significantly, the driver of the truck was fully authorized to
drive it.
Likewise, in the Vargas case, just before the accident occurred Vargas had sold her
jeepney to a third person, so that at the time of the accident she was no longer the
owner of the jeepney. This court, nevertheless, affirmed Vargas' liability since she
failed to surrender to the Motor Vehicles Office the corresponding AC plates in
violation of the Revised Motor Vehicle Law and Commonwealth Act No. 146. We
further ruled that the operator of record continues to be the operator of the vehicle
in contemplation of law, as regards the public and third persons, and as such is
responsible for the consequences incident to its operator. The vehicle involved was
a public utility jeepney for hire. In such cases, the law does not only require the
surrender of the AC plates but orders the vendor operator to stop the operation of
the jeepney as a form of public transportation until the matter is reported to the
authorities.
As can be seen, the circumstances of the above cases are entirely different from
those in the present case. Herein petitioner does not deny ownership of the vehicle
involved in tire mishap but completely denies having employed the driver Sabiniano
or even having authorized the latter to drive his jeep. The jeep was virtually stolen
from the petitioner's garage. To hold, therefore, the petitioner liable for the accident
caused by the negligence of Sabiniano who was neither his driver nor employee
would be absurd as it would be like holding liable the owner of a stolen vehicle for
an accident caused by the person who stole such vehicle. In this regard, we cannot
ignore the many cases of vehicles forcibly taken from their owners at gunpoint or
stolen from garages and parking areas and the instances of service station
attendants or mechanics of auto repair shops using, without the owner's consent,
vehicles entrusted to them for servicing or repair.
We cannot blindly apply absolute rules based on precedents whose facts do not jibe
four square with pending cases. Every case must be determined on its own peculiar
factual circumstances. Where, as in this case, the records of the petition fail to
indicate the slightest indicia of an employer-employee relationship between the
owner and the erring driver or any consent given by the owner for the vehicle's use,
we cannot hold the owner liable.
We, therefore, find that the respondent appellate court committed reversible error
in holding the petitioner jointly and severally liable with Sabiniano to the private
respondent.

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