Costly omission

This case once more determines the liability of the registered owner of a motor vehicle for injuries and damages caused by the negligence of the driver. The issue here is whether the registered owner will still be liable if he has already sold the vehicle but the sale has not yet been recorded in the Land Transportation Office(LTO).

The vehicle involved in this case is a Fuso Road Tractor. It was the subject of a Finance Lease Agreement executed way back on June 4, 1991 wherein Edward Lao purchased it from Equitable Leasing. Under the scheme, the vehicle shall remain registered in the name of Equitable, until the value of the vehicle has been fully paid by Edward at a monthly rental payment up to December 4, 1992. When Edward completed payment to cover the full price of the tractor, a deed of sale was executed by Equitable in favor of Edward on December 9,1992 . However the Deed was not registered with the LTO.

Meantime, Edward was already operating the tractor. It was being driven by Romy whom he hired. On July 17, 1994, the tractor driven by Romy rammed into the house cum store of Matilde. A portion of the house was destroyed. Pinned to death under the engine of the tractor were Matilde’s son Randy and their neighbor Felipe’s daughter, Maria. Injured were Felipe himself and another neighbor Minda and the two sons of Laura also another neighbor.

Romy was charged with and later convicted by the Metropolitan Trial Court of reckless imprudence resulting in multiple homicide and multiple physical injuries. Matilde, Felipe, Minda and Laura, the aggrieved parties to the reckless imprudence of Romy failed to recover anything in the criminal case against Romy. So they elected to file a separate civil action for damages. Upon first verifying in the LTO the ownership papers of the tractor, they discovered that its registered owner was not Edward, the employer of Romy, but Equitable Leasing.

So on April 15, 1995, Matilde, Felipe, Minda and Laura sued not only Edward and Romy but also Equitable Leasing for recovery of damages. Subsequently, upon their motion, the court dropped Edward and Romy because they could not be located and served with summonses. In its answer with counterclaim, Equitable alleged that the vehicle had already been sold to Edward and that it was no longer in possession and control thereof at the time of the incident having sold the same almost two years prior thereto.

After trial on the merits, the court rendered a decision ordering Equitable to pay: Matilde P50,000 for the death of her son Randy, P50,000 as moral damages and P56,000 actual damages to the store and its contents and funeral expenses; Felipe P50,000 for the death of his daughter, P50,000 moral damages, and P30,000 medical and funeral expenses; Minda P7,000 as actual damages; and Laura P5,000 for medical expenses of her two sons.

Equitable was also ordered to pay P120,000 as attorney’s fees.

Equitable questioned this decision. It contended that it should not be held liable for damages sustained by Matilde et.al. which arose from the negligence of the driver of the tractor already sold to Edward at the time of the accident. Not having employed Romy the driver of the tractor, it could not have controlled or supervised him.

Was Equitable correct?

No.

Equitable is liable for the death and injuries complained of, because it is the registered owner of the tractor at the time of the accident on July 17, 1994. 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 injuries arising from the negligence of the driver.

Failure of Equitable and/or Edward to register the sale with the LTO should not prejudice Matilde et.al who have the right to rely on the legal principle that the registered owner of the vehicle is liable for damages caused by the negligence of the driver. Equitable cannot hide behind its allegation that Romy was the employee of Edward. This will effectively prevent Matilde, et al. from recovering losses on the basis of the inaction or fault of Equitable in failing to register the sale. The non-registration is the fault of Equitable, which should thus face the legal consequences thereof.

In negligence cases, the aggrieved party may sue the negligent party for civil liability arising from the crime (ex delito Art 100 Revised Penal Code) or from quasi delict (ex quasi delito, Art 2176 Civil Code). In the liability based on crime, the employers are subsidiarily liable or only when the employee convicted of the crime in the performance of his job is found to be insolvent and is thus unable to satisfy the civil liability adjudged. In the liability based on quasi delict, the employers are directly and primarily liable and does not require the employee to be insolvent but is subject to the defense of due diligence in the selection and supervision of the employee. Here the employer is considered a joint tortfeasor and therefore solidarily liable. Moreover, the two causes of action, ex-delito or ex-quasi delito may be availed of by the aggrieved party so that failure to recover in one will not necessarily preclude recovery in the other subject to the caveat that they can not recover twice. Thus Matilde et.al. are correct in electing to file a separate civil action after they failed to recover anything in the criminal case (Equitable Leasing Corporation vs. Suyom et al. G.R.143360, September 5, 2002).

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