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PCI LEASING v. UCPB GENERAL INSURANCE CO.

FACTS:

On October 19, 1990, a Mitsubishi Lancer car owned by United Coconut Planters Bank, driven by Flaviano Isaac with Conrado Geronimo as passenger, was hit by an 18-wheeler Fuso Tanker Truck owned by PCI Leasing Finance, Inc. and allegedly operated by Superior Gas Equitable Co., Inc. (SUGECO). The truck was driven by Renato Gonzaga. The collision caused heavy damage to the car and injured the driver and passenger. Gonzaga continued on his way without bringing the victims to the hospital. The insurer of the car, UCPB General Insurance Inc., paid the insurance coverage amount to UCPB. After repeated demands for payment from PCI Leasing and Finance, Inc., UCPB filed a case for damages. The RTC ruled in favor of UCPB and ordered PCI Leasing and Finance, Inc. and Gonzaga to pay UCPB. The CA affirmed the decision with modifications, deleting the award of attorney's fees and reducing the interest rate. PCI Leasing and Finance, Inc. filed a petition for review, questioning its liability and the applicability of the Public Service Act.

ISSUES:

  1. Whether petitioner, as registered owner of a motor vehicle that figured in a quasi-delict, may be held liable, jointly and severally, with the driver thereof, for the damages caused to third parties.

  2. Whether petitioner, as a financing company, is absolved from liability by the enactment of Republic Act (R.A.) No. 8556, or the Financing Company Act of 1998.

RULING:

  1. First Issue Yes, the registered owner of a vehicle driven by a negligent driver may be held liable under applicable jurisprudence involving laws on compulsory motor vehicle registration and the liabilities of employers for quasi-delicts under the Civil Code. The principle of holding the registered owner of a vehicle liable for quasi-delicts resulting from its use is well-established in jurisprudence. Even if the vehicle is leased, the registered owner remains liable if the lease is not registered with the Land Transportation Office.

  2. Second Issue No, the petitioner is not absolved from liability by the enactment of R.A. No. 8556. The non-registration of the lease contract precludes the petitioner from enjoying the benefits under Section 12 of R.A. No. 8556. The law on compulsory motor vehicle registration (R.A. No. 4136) prevails, meaning the registered owner remains responsible for damages caused by the vehicle.

PRINCIPLES:

  • Quasi-Delict The registered owner of the vehicle driven by a negligent driver can be held liable for damages caused to third parties.

  • Compulsory Motor Vehicle Registration Failure to register a lease, sale, transfer, or encumbrance of a vehicle with the Land Transportation Office means the registered owner remains liable to third parties.

  • Solidary Liability The registered owner of a vehicle can be held solidarily liable with the negligent driver for damages arising from a quasi-delict.

  • Financial Lease The non-registration of a financial lease does not absolve the registered owner from liability for the consequences of quasi-delictual acts involving the leased property.

  • Principle of Public Policy The registration requirement ensures that the public has a definite entity to hold accountable for damages in vehicular accidents.