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 SOCOR…

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 – P121,
650.00;

b)   to the plaintiff Moises Ocampo ? 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 counterclaims 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
judgment 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 doctrines 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 joint 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 victims 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 petitioner and Rock Component Philippines relative to the latter’s duty
to reimburse any amount which may be adjudged against petitioner (pp. 32-33,
Rollo).

Petitioner asseverates that it should not have been haled to
court and ordered to 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 and 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 continues 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 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 presume that the registered owner is the actual owner
thereof, for it would be difficult for 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 the actual owner
is. How would the public or third
persons know against whom to enforce their rights in case of subsequent transfers
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 be
responsible to the public or to 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 the 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 (defendant-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 Vehicles 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 actual owner? The defendant holds the affirmative of this proposition; the trial court
held the negative.

“The Revised Motor
Vehicles Law (Act No. 3992, as amended) provides that no 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 to 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 for the current year, but that dealers in motor
vehicles shall furnish the Motor Vehicles 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 ordained, in the interest of the determination of persons
responsible for damages or injuries
caused on public highways:

‘One of the principal purposes of motor vehicles legislation is
identification of the vehicle and of the operator, in case of accident; and
another is that the knowledge that means of detection are always available may
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 ‘snare 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. Brenham 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 than 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.” (at pp. 106-110.)

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 rulings 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 Duavit
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 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 sevice 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.

Gutierrez, Jr., Acting
C.J., (Chairman), Bidin, Davide, Jr., and
Romero, JJ., concur.