Perez v. Gutierrez
REITERATIONFacts
The Antecedents: Plaintiff-appellant Fe Perez, a passenger in an AC jeepney registered under the name of defendant-third-party plaintiff-appellee Josefina Gutierrez, sustained injuries when the vehicle, driven by Leopoldo Cordero, met with an accident due to the driver's alleged reckless negligence. Perez filed a complaint for breach of contract of carriage against Gutierrez. Procedural History: Gutierrez, in her answer, averred that the responsibility should devolve upon Panfilo Alajar, the alleged actual owner by purchase of the jeepney at the time of the accident, and filed a third-party complaint against him. A deed of sale between Gutierrez and Alajar was presented, stipulating that title remained with Gutierrez pending Public Service Commission approval, and that Alajar assumed responsibility for actions arising from the vehicle's operation. Alajar disclaimed responsibility, arguing the deed was void for non-registration, that Gutierrez retained control and collected rentals, and that title remained with Gutierrez. The Petition: The trial court found Leopoldo Cordero guilty of reckless imprudence and adjudged Panfilo Alajar liable to both Fe Perez and Josefina Gutierrez for damages and attorney's fees. Fe Perez appealed, arguing that the registered owner, Josefina Gutierrez, should be held liable, not Alajar.
Issue(s)
Whether the registered owner (Gutierrez) or the actual transferee (Alajar) is directly liable to the passenger for damages arising from a breach of contract of carriage.
Ruling
The Supreme Court modified the decision of the trial court. It held Josefina Gutierrez, the registered owner, and Leopoldo Cordero, the driver, jointly and solidarily liable to Fe Perez. Panfilo Alajar, the transferee, was held answerable to Josefina Gutierrez for any amount she may pay to Fe Perez.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that Josefina Gutierrez, as the registered owner, is the party directly liable to Fe Perez. Citing the 'Registered Owner Rule' established in Erezo v. Jepte, the Court explained that the public has the right to presume the registered owner is the actual owner to avoid the difficulty of proving ownership in subsequent transfers. Under Section 20 (g) of the Public Service Act, any transfer of a franchise or the property used therein requires the approval of the Public Service Commission (PSC) to be binding against the public. Applying Peralta v. Mangusang, the Court noted that if the property is transferred without such approval, the grantee continues to be responsible under the franchise for the consequences incident to the operation of the vehicle. Following the doctrine in Tamayo v. Aquino, the transferee (Alajar) who operated the vehicle without PSC approval acted merely as an agent of the registered owner. Consequently, Gutierrez is directly and solidarily liable with the driver, Cordero, under Articles 2184 and 2180 of the Civil Code, while Alajar is held liable to Gutierrez for any amount she pays to Perez.
Main Doctrine
The registered owner of a public utility vehicle remains liable to the public for damages arising from its operation, notwithstanding any transfer or sale of the vehicle, unless the transfer has been approved by the Public Service Commission. The actual transferee, however, is liable to indemnify the registered owner.