PCI Leasing and Finance, Inc. v. United Coconut Planters Bank General Insurance Co., Inc.
REITERATIONFacts
The Antecedents: On October 19, 1990, a Mitsubishi Lancer owned by United Coconut Planters Bank (UCPB) and insured by UCPB General Insurance Inc. (respondent) was hit by an 18-wheeler Fuso Tanker Truck owned by PCI Leasing & Finance, Inc. (petitioner), leased to and operated by Superior Gas & Equitable Co., Inc. (SUGECO), and driven by its employee, Renato Gonzaga. The collision caused heavy damage to the Mitsubishi Lancer and physical injuries to its driver and passenger. Respondent paid the assured UCPB P244,500.00 as insurance coverage. Respondent demanded payment from petitioner, but no payment was made, prompting respondent to file a collection case. Procedural History: The Regional Trial Court (RTC) ordered petitioner and Renato Gonzaga to pay respondent jointly and severally. The Court of Appeals (CA) affirmed the RTC decision with modification, deleting attorney's fees and adjusting the interest rate. The CA denied petitioner's motion for reconsideration. The Petition: Petitioner seeks reversal of the CA decision, arguing it should not be held liable as the truck driver was not its employee but that of SUGECO, and that R.A. No. 8556 absolved financing companies from such liability.
Issue(s)
Whether petitioner, as the registered owner of a motor vehicle involved in a quasi-delict, may be held liable, jointly and severally, with the driver. Whether petitioner, as a financing company, is absolved from liability for the quasi-delict by the enactment of Republic Act No. 8556, considering the compulsory motor vehicle registration under R.A. No. 4136.
Ruling
The petition is DENIED. The Decision dated December 12, 2003 and Resolution dated February 18, 2004 of the Court of Appeals are AFFIRMED.
Ratio Decidendi
On the issue of petitioner's liability as registered owner: The Court reiterated the well-established principle that the registered owner of a motor vehicle is primarily and directly responsible for the consequences of its operation, including the negligence of the driver, with respect to the public and all third persons. This principle stems from the policy behind compulsory motor vehicle registration, which aims to identify the owner and fix responsibility in case of accidents, thereby protecting the public. Even if the vehicle is leased, the registered owner remains liable unless the lease is registered. The Court cited Erezo v. Jepte to explain that registration is for the purpose of identifying the owner and fixing responsibility, and the registered owner cannot evade this responsibility by proving a transferee or lessee, as this would prejudice the injured party. The Court emphasized that this policy applies to all vehicles, not just common carriers. On the issue of R.A. No. 8556 absolving financing companies: The Court held that Republic Act No. 8556, particularly Section 12, does not supersede or repeal the law on compulsory motor vehicle registration under R.A. No. 4136. The Court found no irreconcilable inconsistency between the two laws. Therefore, a lease agreement, even if it does not involve a transfer of ownership, must be registered to be valid against third parties. The non-registration of the lease contract between petitioner and SUGECO precluded petitioner from enjoying the benefits under Section 12 of R.A. No. 8556. The Court noted that financing companies are not without recourse and may file third-party complaints against their lessees.
Main Doctrine
The registered owner of a motor vehicle remains primarily and directly responsible for the consequences of its operation, including the negligence of the driver, with respect to the public and all third persons, even if the vehicle is under a lease agreement, unless the lease is registered. Republic Act No. 8556 does not supersede the law on compulsory motor vehicle registration.