EREZO V.
JEPTE DAMAGES; MOTOR VEHICLES; PUBLIC SERVICE LAW;
FACTS:
Aguedo Jepte is the registered owner of a six by six truck. In
1949, while the same was being driven by Rodolfo Espino,
it collided with a taxicab.
As the truck went off the street, it hit Ernesto Erezo and
another, and the former suffered injuries, as a result of
which he died. The driver was prosecuted for homicide
through reckless negligence. As the amount of the judgment
could not be enforced against him, Gaudioso Erezo brought
this action against the registered owner of the truck, Jepte.
Aguedo does not deny at the time of the fatal accident the
cargo truck was registered in his name. He, however, claims
that the vehicle belonged to the Port Brokerage, of which he
was the broker at the time of the accident. RTC held Jepte
liable
ISSUE:
Whether Jepte is liable as registered owner of the vehicle
even if the ownership is in another.
HELD:
YES.
In previous decisions, 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.
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.
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. The main aim of motor vehicle
registration is to identify the owner so that if any accident
happens, responsibility therefore can be fixed on a definite
individual, the registered owner.
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? We hold with the trial court that the laws do not allow
him to do so. The protection that the law aims to extend
would become illusory were the registered owner given the
opportunity to escape liability by disproving his ownership.
In synthesis, Jepte is primarily responsible for the damage
caused to the vehicle of Erezo, but 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.
REGISTERED OWNER AS ACTUAL OWNER.
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.
REGISTERED OWNER PRIMARILY RESPONSIBLE FOR
INJURIES.
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.
MOTOR VEHICLES OFFICE; REGISTRATION REQUIRED AS
PERMISSION TO USE PUBLIC HIGHWAY.
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 1. does not bear any
essential relation to the contract of sale between the parties (Chinchilla vs.
Rafael and Verdaguer 39 Phil. 886), but to permit the use and operation of
the vehicle upon any public highway (Section 5 (a) Act No. 3992, as
amended).
AIM OR PURPOSE OF MOTOR VEHICLE REGISTRATION.
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.
EVIDENCE; REGISTERED OWNER NOT ALLOWED TO PROVE
ACTUAL AND REAL OWNER OF VEHICLE; POLICY OF THE
LAW.
The law does not allow the registered owner to prove who the actual owner
is; 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 the 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.
REGISTRATION AS MEANS TO IDENTIFY PERSON CAUSING
INJURY OR DAMAGE.
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.
MOTOR VEHICLE REGISTERED OWNER AS PRIMARILY
RESPONSIBLE; RIGHT OF REIMBURSEMENT.
The registered owner of a motor vehicle is primarily responsible for the
damage caused to the vehicle of the plaintiff appellee but the registered
owner 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

EQUITABLE LEASING CORPORATION V. LUCITA
SUYON
FACTS:
On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor
rammed into the house of Myrna Tamayo.
A portion of the house was destroyed. Pinned to death under
the engine of the tractor were Respondent Myrna Tamayos
son and Respondent Felix Oledans daughter. 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.
Upon verification with the Land Transportation Office,
respondents were furnished documents showing that the
registered owner of the tractor was Equitable Leasing
Corporation/leased to Edwin Lim.
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.
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. In
contemplation of law, the owner/operator of record is the
employer of the driver, the actual operator and employer
being considered as merely its agent.
The same principle applies even if the registered owner of
any vehicle does not use it for public service. 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.
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.

Subsequentlty, respondents filed against Raul Tutor, Ecatine
Corporation (Ecatine) and Equitable Leasing Corporation
(Equitable) a Complaint for damages.
In its Answer with Counterclaim, 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.
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

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 attorney’s 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.

Thus, petitioner was liable to respondents. Upon Appeal to

the CA. The court 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 favour of
Ecatine.

It cited that the Certificate of Registration on file with the

LTO still remained in petitioners name. In order that a
transfer of ownership of a motor vehicle can bind third
persons, it must be duly recorded in the LTO. It also upheld
the claim for moral damages considering Tutor to be an
agent of the registered owner.

ISSUE:
Whether or not Petitioner is liable for the accident despite a
valid deed of sale in favour of Ecatine.

HELD:
 BA FINANCE CORPORATION V. CA

FACTS:

Amare, the driver of an Isuzu truck was involved in an

accident which caused the death of three persons. Amare
was found guilty beyond reasonable doubt of reckless
imprudence.

BA Finance was found liable for damages since the truck

was registered in its name.

BA Finance contends that it should not be held liable since it

was not Amare’s employer at the time of the accident. It also
contends that the Isuzu truck was in the possession of Rock
Component Phil, by virtue of a lease agreement.

Hence, BA Finance wants to prove who the actual/real

owner is at the time of the accident, and in accordance with
such proof, evade liability and lay the same on the person
actually owning the vehicle.

ISSUE:
WON BA Finance should be held liable.
WON BA Finance can escape liability by proving the
actual/real owner of the truck.

HELD:

1 Yes, BA Finance is liable.

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.

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 the third persons
for injuries caused the latter while the vehicle is being
driven on the highways or streets.

2 No, the law does not allow him.

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.

This may appear harsh but nevertheless, 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.

While the registered owner is primarily responsible for the

damage caused, he 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.
 DUAVIT V. CA

FACTS:

Sarmiento and Catuar, the private respondents of this case,

were on board a jeep when they met an accident with
another jeep driven by Sabiniano.

Consequently, because of the said incident, injuries were

sustained by the private respondents, thus they filed a case
for damages against driver Salbiniano and owner of the jeep
Duavit.

Duavit admits ownership of the jeep but contends that he

should not be held liable since Salbiniano is not his
employee and that the jeep was taken by Salbiniano without
his (Duavit) consent.

ISSUE:

Whether or not the owner of a private vehicle which figured

in an accident can be held liable as an employer when the
said vehicle was neither driven by an employee of the owner
nor taken with his consent.

HELD:

No, 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.  

The Registered owner rule was not applied in this case.

Duavit does not deny ownership of the vehicle involved in
the incident 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 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.
 was seeking compensation for the damage done to him.
Certainly, it would be the height of inequity to deny him his
right.

Thus, it is evident that private respondent has the right to

proceed against petitioners for the damage caused on his
passenger jeepney as well as on his business.

-----------------
LIM V. CA N.B.
The kabit system is an arrangement whereby a person who
FACTS: has been granted a certificate of public convenience allows
other persons who own motor vehicles to operate them
Gonzales purchased an Isuzu passenger jeepney from under his license, sometimes for a fee or percentage of the
Vallarta. earnings. Although the parties to such an agreement are not
outrightly penalized by law, thekabit system is invariably
Vallarta remained as the holder of a certificate of public recognized as being contrary to public policy and therefore
convenience and the registered owner of the jeepney. void and inexistent under Art. 1409 of the Civil Code.

Subsequently, the jeepney collided with a ten-wheeler truck
owned by Lim, driven by Gunnaban which resulted in the
death of 1 passenger and injuries to all others.
Failure to arrive to a settlement with Lim for the repair of
the jeepney, Gonzales brought an action for damages against
Lim & Gunnaban.
It would seem then that the thrust of the law in enjoining
the kabit system is not so much as to penalize the parties but
to identify the person upon whom responsibility may be
fixed in case of an accident with the end view of protecting
the riding public. The policy therefore loses its force if the
public at large is not deceived, much less involved.

Lim denied liability asserting that Vallarte, and not

Gonzales, is the real party in interest being the registered
owner of the jeepney.

He further asserts that an operator of the vehicle continues to

be its operator as he remains the operator of record; and that
to recognize an operator under the kabit system as the real
party in interest and to countenance his claim for damages is
utterly subversive of public policy.

ISSUE:

WON Gonzales, an operator under the kabit system

(considering that he is not the registered owner of the
jeepney), may sue for damages against Lim. Or, WON
Gonzales is a real party in interest.

HELD:

Yes, Gonzales may sue.

The evil sought to be prevented in enjoining

the kabit system* does not exist.

1 Neither of the parties to the pernicious kabit system is

being held liable for damages. 

2 The case arose from the negligence of another vehicle in

using the public road to whom no representation, or
misrepresentation, as regards the ownership and operation of
the passenger jeepney was made and to whom no such
representation, or misrepresentation, was necessary. Thus it
cannot be said that Gonzales and the registered owner of the
jeepney were in stoppels for leading the public to believe
that the jeepney belonged to the registered owner.

3 The riding public was not bothered nor inconvenienced at

the very least by the illegal arrangement. On the contrary, it
was private respondent himself who had been wronged and
 BALIWAG V. CA

FACTS:

Martinez, claiming to be an employee of two bus lines

operating under different grants of franchise but were issued
only one ID Number: “Baliwag Transit” owned and
operated by the late Tuazon and “Baliwag Transit Inc”
(BTI) owned by de Tengco, (Martinez) filed a petition with
the Social Security Commission to compel BTI to remit his
premium contributions to SSS.

BTI denied ever employing Martinez, and alleges that he

was in fact employed by Tuason who operated a separate
and distinct bus line from BTI.

The Social Security Commission granted Martinez’s

petition. On appeal, the CA reversed the decision of the
commission, finding that Tuason was operating under
the kabit system; that while Tuason was the owner and
operator, his buses were not registered with the Public
Service Commission in his own name; and thus ordered BTI
to remit Martinez’ premiums to SSS..

ISSUE:

WON the issuance by SSS of one ID Number to the two bus

lines necessarily indicates that one of them is operating
under the kabit system.

HELD:

No.

The “Kabit System” has been defined by the Supreme Court

as an arrangement “whereby a person who has been granted
a certificate of convenience allows another person who owns
motor vehicles to operate under such franchise for a fee.”

The determining factor, therefore, is the possession of a

franchise to operate which negates the existence of the
“Kabit System” and not the issuance of one SSS ID Number
for both bus lines from which the existence of said system
was inferred.

Thus, it is evident that both bus lines operated under their

own franchises but opted to retain the firm name “Baliwag
Transit” with slight modification, by the inclusion of the
word “Inc.” in the case of herein petitioner, obviously to
take advantage of the goodwill such firm name enjoys with
the riding public. Conversely, the conclusion of the Court of
Appeals that the late Pascual Tuazon, during the time
material to this case operated his buses under the “Kabit
System” on the ground that while he was actually the owner
and operator, his buses were not registered with the Public
Service Commission (now the Bureau of Land
Transportation) in his own name, is not supported by the
records.
 PHILTRANCO V. CA

FACTS:

Acuesta was riding his easy rider bicycle. One of the buses
of Philtranco driven by Manilhig, on the other hand, was
being pushed by some persons in order to start its engine.
Subsequently, the engine started which occurred at the time
when Acuesta was directly in front of the bus. Acuesta was
run over by the bus. Trial court rendered a decision ordering
Philtranco & Manilhig to be jointly and severally liable to
the Heirs of Acuesta. CA affirmed, holding that Philtranco
has a solidary liability with Manilhig under Art 2194 of the
Civil Code.

ISSUE:

WON Philtranco’s liability is solidary (jointly & severally)

with Manilhig. Or, WON Art 2194 is applicable.

HELD:

Yes.

It had been consistently held that the liability of the

registered owner of a public service vehicle, like petitioner
Philtranco, for damages arising from the tortious acts of the
driver is primary, direct, and joint and several orsolidary
with the driver. As to solidarity, Article 2194 expressly
provides:

Art. 2194. The responsibility of two or more persons who

are liable for a quasi-delict is solidary.

Since the employer’s liability is primary, direct and solidary,

its only recourse if the judgment for damages is satisfied by
it is to recover what it has paid from its employee who
committed the fault or negligence which gave rise to the
action based on quasi-delict. Article 2181 of the Civil Code
provides:

Art. 2181. Whoever pays for the damage caused by his

dependents or employees may recover from the latter what
he has paid or delivered in satisfaction of the claim.
 the registered owner for what the latter may have been
adjudged to pay. In operating the truck without transfer
thereof having been approved by the Public Service
Commission, the transferee acted merely as agent of the
registered owner and should be responsible to him (the
registered owner), for any damages that he may cause the
latter by his negligence.

TAMAYO VS. AQUINO

FACTS:

Epifania Gonzales (wife of Aquino) boarded a truck owned

by Tamayo, holder of a certificate of public convenience to
operate. Allegedly, while Epifania was making a trip aboard
the truck, it bumped against a culvert on the side of the road,
causing her death. Aquino et al filed an action for damages
against Tamayo.

Tamayo answered alleging that the truck is owned by Rayos,

so he filed a 3rd party complaint against him (Rayos). The
CFI ruled that Tamayo is the registered owner, under a
public convenience certificate but such truck was sold to
Rayos one month after the accident, but he (Tamayo) did not
inform the Public Service Commission of the sale.

CFI held Tamayo and Rayos jointly and severally liable to

Aquino. CA affirmed, holding that, both the registered
owner (Tamayo) and the actual owner and operator (Rayos)
should be considered as joint tortfeasors and should be made
liable in accordance with Article 2194 of the Civil Code
(solidary).

ISSUE:

WON Art 2194 (solidary liability) is applicable; and, if

NOT, how should Tamayo (holder of the cert. of public
convenience) participate with Rayos (transferee/operator) in
the damages recoverable.

HELD:

No, Art 2194 is not applicable.

The action instituted in this case is one for breach of

contract, for failure of the defendant to carry safety the
deceased for her destination. The liability for which he is
made responsible, i.e., for the death of the passenger, may
not be considered as arising from a quasi-delict. As the
registered owner Tamayo and his transferee Rayos may not
be held guilty of tort or a quasi-delict; their responsibility is
NOT SOLIDARY.

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. If the policy of the law is to
be enforced and carried out, the registered owner should not
be allowed 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.

But as the transferee, who operated the vehicle when the

passenger died, is the one directly responsible for the
accident and death he should in turn be made responsible to