BIENVENIDO GELISAN, PETITIONER, VS. BENITO ALDAY, RESPONDENT.

Review on certiorari
of the judgment* rendered by the Court of Appeals, dated 11
October 1968, as amended by its resolution, dated 11 February 1969, in CA-G.R.
No. 32670-R, entitled:  “Benito Alday plaintiff-appellant, vs. Roberto Espiritu
and Bienvenido Gelisan,
defendants-appellees“, which ordered the herein
petitioner Bienvenido Gelisan
to pay, jointly and severally, with Roberto Espiritu,
the respondent Benito Alday the amount of P5,397.30,
with legal interest thereon from the filing of the complaint, and the costs of
suit; and for the said Roberto Espiritu to pay or
refund the  petitioner Bienvenido Gelisan whatever
amount the latter may have paid to the respondent Benito Alday
by virtue of the judgment.

The
uncontroverted facts of the case are, as follows:

“Defendant Bienvenido Gelisan is the owner of a freight truck bearing plate No. TH-2377.  On January 31, 1962, defendant Bienvenido Gelisan and Roberto Espiritu entered into a contract marked Exhibit 3-Gelisan
under which Espiritu hired the same freight truck of Gelisan for the purpose of hauling rice, sugar, flour and
fertilizer at an agreed price of P18.00 per trip within the limits of the City
of Manila provided the loads shall not exceed 200 sacks.  It in also agreed that Espiritu shall bear and pay all losses and damages
attending the carriage of the goods to be hauled by him.  The truck was taken by a driver of Roberto Espiritu on February
1, 1962.  Plaintiff Benito Alday, a trucking operator, and who owns about 15 freight
trucks, had known the defendant Roberto Espiritu
since 1948 as a truck operator. 
Plaintiff had a contract to haul the fertilizers of the Atlas Fertilizer
Corporation from Pier 4, North Harbor,
to its Warehouse in Mandaluyong.  Alday met Espiritu at the gate of Pier 4 and the latter offered the use of his truck with the driver and helper
at 9 centavos per bag of fertilizer.  The offer was accepted by plaintiff Alday and he instructed his checker Celso
Henson to let Roberto Espiritu haul the
fertilizer.  Espiritu
made two hauls of 200 bags of fertilizer
per trip.  The fertilizer was delivered
to the driver and helper of Espiritu with the
necessary way bill receipts, Exhibits A and B. 
Espiritu, however, did not deliver the
fertilizer to the Atlas Fertilizer bodega at Mandaluyong.  The signatures appearing in the way bill
receipt Exhibits A and B of the Alday Transportation
admittedly not the signature of any representative or employee of the Atlas
Fertilizer Corporation.  Roberto Espiritu could not be found, and plaintiff reported the
loss to the Manila Police Department. 
Roberto Espiritu was later arrested and booked
for theft.  x x
x

“Subsequently, plaintiff Alday saw
the truck in question on Sto. Cristo St. and he notified the
Manila Police Department, and it was impounded by the police.  It was claimed by Bienvenido
Gelisan from the Police Department after he had been
notified by his employees that the truck had been impounded by the police; but
as he could not produce at the time the registration papers, the police would
not release the truck to Gelisan.  As a result of the
impounding of the truck according to Gelisan, x x x and that for the release of
the truck he paid the premium of P300
to the surety company^[1]“.

Benito Alday was compelled to pay the
value of the 400 bags of fertilizer, in the amount of P5, 397.33, to Atlas
Fertilizer Corporation so that, on 12 February 1962, he (Alday)
filed a complaint against Roberto Espiritu and Bienvenido Gelisan with the Court
of First Instance of Manila, docketed therein as Civil Case No. 49603, for the
recovery of damages suffered by him thru the criminal acts committed by the
defendants.

The defendant, Roberto Espiritu failed to
file an answer and was, accordingly, declared in default.

The defendant, Bienvenido Gelisan, upon the other hand, disowned responsibility. He
claimed that he had no contractual relations with the plaintiff Benito Alday as regards the hauling and/or delivery of the 400
bags of fertilizer mentioned in the complaint; that the alleged
misappropriation or non-delivery by defendant Roberto Espiritu
of plaintiff’s 400 bags of fertilizer, was entirely beyond his (Gelisan’s) control and knowledge, and which fact became
known to him, for the first time, on 8 February 1962 when his freight truck,
with plate No. TH-2377, was impounded by the Manila Police Department, at the
instance of the plaintiff; and that in his written contract of hire with
Roberto Espiritu, it was expressly provided that the
latter will bear and pay all losses and damages attending the carriage of goods
to be hauled by said Roberto Espiritu.

After trial, the Court of First Instance of Manila ruled that
Roberto Espiritu alone was liable to Benito Alday, since Bienvenido Gelisan was not privy to the contract between Espiritu and Alday.  The dispositive portion of the decisions reads, as follows:

“WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendant Roberto Espiritu
for the sum of P6,000 with interest at the legal rate from the time of the filing
of the complaint, and the costs of the suit. 
Plaintiff’s complaint is dismissed with respect to defendant Bienvenido Gelisan, and
judgment is rendered in favor of defendant Bienvenido Gelisan and against the plaintiff for the sum of P350^[2]“.

On appeal, however, the Court of Appeals,
citing the case of Montoya
vs. Ignacio^[3], found that Bienvenido Gelisan is likewise
liable for being the registered owner
of the truck; and that the lease contract,
executed by and between Bienvenido Gelisan and Roberto Espiritu, is
not binding upon Benito Alday for not having been
previously approved by the Public Service Commission.  Accordingly, it sentenced Bienvenido Gelisan to
pay, jointly and severally with
Roberto Espiritu, Benito Alday
the amount of P5,397.30, with legal interest
thereon from the filing of the complaint;
and to pay the costs.  Roberto Espiritu, in turn, was ordered to pay or refund Bienvenido Gelisan whatever
amount the latter may have paid to Benito Alday by
virtue of the judgment^[4].

Hence,
the present recourse by Bienvenido Gelisan.

The petition is without
merit.  The judgment rendered by the
Court of
Appeals, which is sought to be reviewed, is in accord
with the facts and the law on the case and we find no cogent reason to disturb
the same.  The Court has invariably held
in several decisions that the registered owner of a public service vehicle is responsible for
damages that may arise from consequences incident to its operation or that may
be caused to any of the passengers therein^[5].  The
claim of the petitioner that he is not liable in view of the lease contract
executed by and between him and Roberto Espiritu
which exempts him from liability to third persons, cannot be sustained because
it appears that the lease contract, adverted to, had not been approved by the
Public Service Commission.  It is settled
in our jurisprudence that if the property covered by a franchise is transferred
or leased to another without obtaining the requisite approval, the transfer is
not binding upon the public and third persons^[6].

We also find no merit in
the petitioner’s argument that the rule requiring the previous approval by the
Public Service Commission of the
transfer or lease of the motor
vehicle, may be applied only in cases where there is no positive identification
of the owner or driver, or where there are very scant means of identification,
but not in those instances where the person responsible for damages has been
fixed or determined beforehand, as in the case at bar.  The reason for the rule we reiterate in the
present case, was explained by the Court in Montoya vs. Ignacio^[7],
thus:

“There is merit in this contention.  The law really requires the approval of the
Public Service Commission in order that a franchise,
or any privilege pertaining thereto, may be sold or leased without infringing
the certificate issued to the
grantee.  The reason is obvious.  Since a franchise is personal in nature any transfer or lease thereof should be notified to the Public Service
Commission so that the latter may take proper safeguards to protect the
interest of the public.  In fact, the law
requires that, before the approval is granted, there should be a public
hearing, with notice to all interested parties, in order that the Commission
may determine if there are good and reasonable grounds justifying the transfer
or lease of the property covered by the franchise, or if the sale or lease is detrimental to public interest.  Such being the reason and philosophy behind
this requirement, it follows that if the property covered by the franchise is
transferred, or leased to another without obtaining the requisite approval, the
transfer is not binding against the Public Service Commission and in
contemplation of law the grantee continues to be responsible under the
franchise in relation to the Commission and to the Public.  Since the lease of the jeepney
in question was made without such approval, the only conclusion that can be
drawn is that Marcelino Ignacio still continues to be
its operator in contemplation of law, and as such is responsible, for the consequences incident to its operation,
one of them being the collision under consideration”.

Bienvenido Gelisan, the
registered owner, is not however without recourse.  He has a right to be indemnified by Roberto Espiritu
for the amount that he may be required to pay as damages for the injury caused to Benito Alday,
since the lease contract in question, although not effective against the public
for not having been approved by the Public Service Commission, is valid and
binding between the contracting parties^[8].

We also find no merit in
the petitioner’s contention that his liability is only subsidiary.  The Court has consistently considered the registered
owner/operator of a public service
vehicle to be jointly and severally liable with the driver for damages incurred
by passengers or third persons as a consequence of injuries sustained in the operation of said vehicles.  Thus, in the case of Vargas vs. Langcay^[9], the Court said:

“We hold that the Court of Appeals erred in considering
appellant-petitioner Diwata Vargas only subsidiarily
liable under Article 103 of the Revised Penal Code.  This Court, in previous decisions, has always
considered the registered
owner/operator of a passenger vehicle, jointly and severally liable with the driver,
for damages incurred by passengers
or third persons as a consequence of injuries (or death) sustained in the operation of said
vehicles.  (Montoya vs.
Ignacio, 94 Phil., 182; Timbol vs. Osias, G.R. No. L-7547, April 30,
1955; Vda. de Medina vs. Cresencia,
99 Phil., 506; Necesito vs. Paras,
104 Phil., 75; Erezo vs. Jepte,
102 Phil., 103; Tamayo vs. Aquino
and Rayos vs. Tamayo, 105
Phil., 949; 56 Off. Gaz. [36] 5617.) In the case of Erezo
vs. Jepte, Supra, We held:

“* * * In synthesis, we hold that the
registered owner, the defendant-appellant herein, is primarily responsible for the damage caused * *
*” (Italics ours)

In the case of Tamayo vs. Aquino, supra, We said:

“*
* * As Tamayo is the registered owner of the truck, his responsibility to the public or to any passenger riding in
the vehicle or truck must be direct * * *” (Italics ours)

WHEREFORE, the petition is hereby DENIED.  With costs against the
petitioner.

SO ORDERED.

Yap, (Chairman), Melencio-Herrera, Paras, and Sarmiento, JJ., concur.

* Penned by
Justice Angel H. Mojica with the concur­rence of Justices
Julio Villamor and Hermogenes
Concepcion, Jr.

^[1]
Rollo, pp. 18-19

^[2]
Record on
Appeal, p. 47

^[3]
94 Phil. 182

^[4]
Rollo, pp. 17, 38

^[5]
Vargas vs. Langcay, 116.
Phil. 478 and cases cited; Juaniza vs. Jose,
G.R. No. 50127-28, March 30, 1979, 89 SCRA 306 and cases cited; MYC
Agro-Industrial Corp. vs. Vda. Caldo, G.R. No. 57298, Sept. 7, 1984,
132 SCRA 10 and cases cited.

^[6]
Montoya vs. Ignacio, 94 Phil. 182

^[7]
supra

^[8]
Montoyaa vs. Ignacio, supra

^[9]
116 Phil. 478, 481