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EQUITABLE LEASING CORPORATION v. LUCITA SUYOM

FACTS:

On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. Respondents Myrna Tamayo's son, Reniel Tamayo, and Felix Oledan's daughter, Felmarie Oledan, were pinned to death under the engine of the tractor. Respondents Oledan himself, Marissa Enano, and two sons of Lucita Suyom were injured. Tutor was charged and convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries.

Upon verification with the Land Transportation Office (LTO), respondents were furnished with documents indicating that the registered owner of the tractor was "Equitable Leasing Corporation/leased to Edwin Lim." Respondents filed a complaint for damages against Raul Tutor, Ecatine Corporation ("Ecatine") and Equitable Leasing Corporation ("Equitable"). The trial court dropped Tutor, Ecatine, and Edwin Lim from the complaint as they could not be located. Petitioner, Equitable, alleged in its answer that the vehicle had already been sold to Ecatine and that Tutor was an employee of Ecatine, not Equitable.

After trial, the Regional Trial Court (RTC) held that since the deed of sale between petitioner and Ecatine had not been registered with the LTO, Equitable was still the legal owner of the vehicle. The RTC ordered petitioner to pay damages and attorney's fees to respondents. The Court of Appeals (CA) affirmed the RTC's decision, stating that the transfer of ownership must be recorded with the LTO in order to bind third parties. The CA also held that the driver, Tutor, was an agent of the registered owner/operator. Petitioner filed this petition.

ISSUES:

  1. Whether or not the registered owner of a motor vehicle is solidarily liable for the injuries and damages caused by the negligence of the driver, even if the vehicle has been the subject of an unregistered Deed of Sale.

  2. Whether or not the registered owner of a motor vehicle can be held liable for the acts of a driver who is not its employee.

RULING:

  1. The registered owner of a motor vehicle is solidarily liable for the injuries and damages caused by the negligence of the driver, even if the vehicle has been the subject of an unregistered Deed of Sale. The sale, while valid and binding between the parties, does not affect third parties, especially the victims of accidents involving the said transport equipment.

  2. The registered owner of a motor vehicle can be held liable for the acts of a driver who is not its employee. Liability for the negligent conduct of the subordinate attaches to the registered owner of the vehicle.

PRINCIPLES: