Peralta v. Costales
REITERATIONFacts
The Antecedents: Walter Mangusang, holder of a certificate of public convenience for a jeepney line, sold his jeepney to Teofilo Costales without the approval of the Public Service Commission. Subsequently, the jeepney, operated by Bienvenido Soriano Mendoza, crashed, causing injuries to passenger Consuelo de Peralta. Procedural History: De Peralta filed an action for damages for breach of contract of carriage against Mangusang, Mrs. Teofilo Costales, and Mendoza. The case was dismissed against Mrs. Costales and Mendoza. Mangusang was found liable and ordered to pay De Peralta. Mangusang then filed a cross-claim against Teofilo Costales, who was substituted for his wife, asserting Costales' ultimate liability as the actual owner. The court rendered an amending decision holding Costales substantially liable to Mangusang for any payments Mangusang might make to De Peralta. The Petition: Teofilo Costales appealed the amending decision, contending that in an action for breach of contract of carriage, only the registered owner is responsible.
Issue(s)
Whether the registered owner alone is responsible in an action for breach of contract of carriage. Whether the sale of a jeepney without the approval of the Public Service Commission transfers ownership. Whether the cross-claim was properly filed after judgment.
Ruling
The appealed decision is affirmed. The registered owner, Mangusang, is liable to the public for damages. However, Teofilo Costales, the actual owner, is liable to indemnify Mangusang for any payments made to the plaintiff.
Ratio Decidendi
On the issue of registered owner's liability: The Court reiterated the principle that the registered owner of a public utility vehicle remains responsible to the public and the Public Service Commission for damages arising from the operation of the vehicle, even if it has been sold without the requisite approval. This is because the franchise is personal and any transfer requires the Commission's approval to safeguard public interest. The grantee continues to be responsible under the franchise in relation to the Commission and the public. The Court cited previous rulings such as Montoya v. Ignacio and Erezo v. Jepte to support this stance. The trial court correctly dismissed the case against the actual owner and driver in the initial action by the passenger, as the liability to the public rests with the registered owner. On the issue of ownership transfer: The Court clarified that the registration of a motor vehicle is not the operative act that transfers ownership, unlike in land registration cases. Instead, registration serves to identify the owner for the purpose of fixing responsibility in case of accidents or damages. Therefore, the sale of the jeepney, even without the approval of the Public Service Commission or the Motor Vehicles Office, is valid between the parties and transfers ownership. The lack of approval by the Public Service Commission affects the binding nature of the transfer on the Commission and the public, but not the validity of the sale itself between the seller and the buyer. On the issue of the cross-claim filing: The Court found no merit in the contention that the cross-claim was improperly filed after judgment. While it would have been preferable for Mangusang to file the cross-claim during the pendency of the action or an independent civil action, the Rules of Court are to be liberally construed to secure substantial justice. The Court noted that Costales was given his day in court and his liability stemmed from his negligence as the agent of the registered owner, not directly from the breach of contract of carriage. Therefore, the procedural defect did not deprive Costales of his right to be heard or affect the substantial justice of the case.
Main Doctrine
The registered owner of a public utility vehicle remains liable to the public for damages arising from its operation, even if the vehicle has been sold without the approval of the Public Service Commission. However, the registered owner has the right to be indemnified by the actual owner for any amount paid as damages.