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METRO MANILA TRANSIT CORPORATION v. REYNALDO CUEVAS

FACTS:

Metro Manila Transit Corporation (MMTC) and Mina's Transit Corporation entered into an agreement to sell wherein MMTC retained the ownership of several bus units until certain conditions were met, but in the meantime, Mina's Transit could operate the buses. One of the buses subject to the agreement hit and damaged a Honda Motorcycle, resulting in injuries to the motorcycle owner and driver. The motorcycle owner and driver sued MMTC and Mina's Transit for damages, alleging that they were the registered joint-owners or operators of the bus involved in the accident. MMTC denied liability and claimed that the actual operator and employer of the bus driver was Mina's Transit, and that Mina's Transit should be held liable in accordance with the agreement. Mina's Transit, on the other hand, argued that it was not liable because it exercised due diligence in the selection and supervision of its employees, and that the accident was caused by the negligence of the motorcycle driver. Mina's Transit also filed a third-party complaint against its insurer seeking reimbursement if it was found liable. The trial court held MMTC and Mina's Transit solidarity liable for damages. On appeal, the Court of Appeals affirmed the trial court's decision. MMTC appealed to the Supreme Court, arguing that it should not be held liable due to the provision in the agreement that shielded it from liability.

ISSUES:

  1. Whether MMTC, as the registered owner of the bus, is liable for the injuries sustained by the respondents.

  2. Whether MMTC is entitled to reimbursement from Mina's Transit through its cross-claim.

RULING:

  1. MMTC, as the registered owner of the bus, is liable for the injuries sustained by the respondents. Although MMTC transferred the actual operation of the bus to Mina's Transit, it remains legally responsible for any damages caused by the bus. The Court affirms the application of the registered-owner rule.

  2. MMTC is entitled to reimbursement from Mina's Transit through its cross-claim. The agreement to sell between MMTC and Mina's Transit contained a provision that exempted MMTC from liability arising from the use and operation of the bus units. Thus, MMTC has the right to seek reimbursement from Mina's Transit as the actual and present owner of the bus.

PRINCIPLES:

  • The registered owner of a motor vehicle whose operation causes injury to another is legally liable to the injured party.

  • The registered-owner rule holds the registered owner of a vehicle liable for the acts of its driver, regardless of whether the driver is an employee or not.

  • The liability of the registered owner is secondary and may be enforced against it only after the employer or actual operator has been found liable.

  • A registered owner is entitled to recover reimbursement from the actual and present owner of the vehicle through a cross-claim, if there is an agreement that exempts the registered owner from liability.