Aguilar vs. Commercial Savings Bank

The registered owner of a motor vehicle is primarily liable for damages caused to third persons by the vehicle's operation, even absent an employer-employee relationship with the driver and even if the vehicle has allegedly been sold to another, provided the vehicle remains registered in the owner's name.

Conrado Aguilar, Sr. is the father of Conrado Aguilar, Jr., the victim of a fatal vehicular accident. The vehicle involved — a Lancer with plate no. NNP 349 — was registered in the name of respondent Commercial Savings Bank. The driver, co-respondent Ferdinand G. Borja, was an assistant vice president of the bank at the time of the incident. The dispute centers on whether the bank, as the vehicle's registered owner, is liable for the death of Aguilar, Jr. notwithstanding the absence of proof that Borja was acting in his official capacity and the bank's assertion that Borja had already purchased the car on installment.

Conrado Aguilar, Sr. is the father of Conrado Aguilar, Jr., who was killed in a vehicular accident on September 8, 1984. The vehicle that struck Aguilar, Jr. was a Lancer sedan bearing plate no. NNP 349, registered in the name of respondent Commercial Savings Bank. The car was driven by co-respondent Ferdinand G. Borja, who was an assistant vice president of the bank at the time of the incident.

At around 11:15 P.M. on September 8, 1984, Aguilar, Jr. and his companions, including Nestor Semella, had just finished a snack at Uncle Watt's Bakery along Zapote-Alabang Road. As they crossed the road, Borja, driving the Lancer, overtook a passenger jeepney and in doing so hit Aguilar and Semella. Aguilar was thrown upwards and smashed against the windshield of the Lancer, which did not stop. Both victims were brought to the Perpetual Help Hospital at Pamplona, Las Piñas, where Aguilar was pronounced dead on arrival.

On July 29, 1985, petitioner filed a complaint for damages against both respondents in the Regional Trial Court of Makati, Branch 59. Borja did not file his answer within the reglementary period and was declared in default. At the trial, respondent bank admitted that the Lancer was registered in its name at the time of the incident, and petitioner's counsel demonstrated that Borja was negligent in driving the car. The trial court found Borja's negligence caused the victim's death and held the bank liable under Art. 2180 of the Civil Code, treating the negligence of the employee as presumed to be that of the employer, whose liability is primary and direct, and finding that the bank failed to exercise due diligence in the selection of its employees.

On appeal, the Court of Appeals reversed, finding no evidence that Borja had acted as the bank's assistant vice president at the time of the mishap and concluding that petitioner had failed to establish that Borja acted on the occasion or by reason of his functions. The appellate court thus dismissed the complaint against the bank. Petitioner's motion for reconsideration was denied, prompting the present petition.

• Registered Owner Liability: Petitioner argued that the Court of Appeals erred in disregarding the established fact that respondent bank was the registered owner of the car that hit and killed petitioner's son, and that the dismissal of the complaint against the bank was contrary to law and existing jurisprudence.
• Immateriality of Employer-Employee Relationship: Petitioner insisted that the existence or absence of an employer-employee relationship between the bank and Borja is immaterial, because the registered owner of a motor vehicle is legally liable for damages incurred by third persons for injuries sustained in the operation of said vehicle.

• Article 2180 — Scope of Employment: Respondent bank countered that under Article 2180 of the Civil Code, when the negligent employee commits the act outside the actual performance of his assigned tasks or duties, the employer has no vicarious liability.
• Private Capacity: The bank insisted that at the time of the accident, Borja was driving the Lancer in his private capacity and was not performing functions in furtherance of the bank's interest.
• Transfer of Ownership: The bank asserted that Borja had already bought the car on installment basis, and therefore at the time of the incident, the bank was no longer the owner of the car.

• Registered Owner Liability: Whether respondent bank, as the registered owner of the Lancer involved in the fatal vehicular accident, is liable for damages to third persons notwithstanding the absence of proof that the driver was acting in his official capacity and the bank's claim that the car had already been sold to the driver.

• Registered Owner Liability: Yes. The registered owner of a motor vehicle is primarily liable for damages caused to third persons by the vehicle's operation, regardless of employer-employee relationship or alleged transfer of ownership, so long as the vehicle remains registered in the owner's name.

• Registered Owner Liability: The Court relied on established jurisprudence, particularly BA Finance Corporation vs. Court of Appeals, 215 SCRA 715, where the registered owner of a ten-wheeler truck was held liable for damages caused by the vehicle even though it was on lease to a third party and the driver was not connected to the registered owner. The rationale, drawn from Erezo vs. Jepte, 102 Phil. 103, is that motor vehicle registration is primarily ordained to identify the owner so that responsibility for accidents on public highways can be fixed on a definite individual. Allowing a registered owner to escape liability by proving transfer to another would defeat this purpose, as it would enable evasion through collusion or transfer to persons without means to respond financially. The registered owner retains a right of recourse against the actual owner through a third-party complaint, but cannot evade primary responsibility to the injured party. The Court found the bank's arguments unimpressive and contrary to established jurisprudence: for as long as the bank remained the registered owner of the Lancer, it could not escape primary liability for the death of petitioner's son, regardless of whether Borja was acting in his official capacity or had purportedly purchased the vehicle on installment.

• Registered Owner Doctrine — The registered owner of a motor vehicle is primarily responsible to third persons for damages caused by the vehicle on public highways, even if the vehicle is leased to or operated by third persons, and even absent an employer-employee relationship between the registered owner and the driver. The rationale is that motor vehicle registration exists to identify the owner so that responsibility for accidents can be fixed on a definite individual. The registered owner cannot escape liability by proving that another person is the actual owner; the registered owner's recourse is a third-party claim against the real owner for reimbursement. Applied here, the bank was held primarily liable because the Lancer remained registered in its name at the time of the accident, notwithstanding the bank's claims that Borja was driving in his private capacity and had already bought the car on installment.

• "the registered owner of any vehicle, even if not for public service, is primarily responsible to third persons for deaths, injuries and damages it caused. This is true even if the vehicle is leased to third persons." — This passage, drawn from BA Finance Corporation vs. Court of Appeals, states the controlling rule that the registered owner's liability to third persons is primary and cannot be defeated by lack of employer-employee relationship or transfer of possession.

• "The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner." — This passage from Erezo vs. Jepte articulates the doctrinal rationale for the registered owner doctrine, explaining why registration exists and why the registered owner cannot evade liability by proving another is the actual owner.

• "For as long as the respondent bank remained the registered owner of the car involved in the vehicular accident, it could not escape primary liability for the death of petitioner's son." — This is the Court's direct application of the registered owner doctrine to the facts of the case, conclusively rejecting the bank's defenses.

• BA Finance Corporation vs. Court of Appeals, 215 SCRA 715 — Controlling precedent directly relied upon. The Court held that the registered owner of a vehicle is primarily liable to third persons for damages caused by the vehicle, even where the vehicle was on lease to a third party and the driver was not connected to the registered owner. This case established that the absence of an employer-employee relationship does not relieve the registered owner of liability.
• Erezo vs. Jepte, 102 Phil. 103 (1957) — Foundational precedent synthesizing the rationale for the registered owner doctrine. The Court explained that motor vehicle registration exists to identify the owner so that responsibility for accidents on public highways can be fixed on a definite individual, and that the registered owner cannot escape liability by proving transfer to another.
• Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888 — Cited within Erezo for the proposition that the administrative proceeding of vehicle registration does not bear any essential relation to the contract of sale between the parties, distinguishing registration from land registration.
• King vs. Brenham Automobile Co., 145 S.W. 278 — A foreign authority quoted in Erezo supporting the policy that motor vehicle legislation aims to ensure identification of the vehicle and operator so that violators cannot escape liability through intermediaries.

• Article 2180, Civil Code — Provides that employers are liable for damages caused by their employees acting within the scope of their assigned tasks, and that such responsibility ceases when the employer proves diligence of a good father of a family to prevent damage. The trial court applied this provision to hold the bank vicariously liable for Borja's negligence, but the Court of Appeals reversed on the ground that Borja was not acting within the scope of his assigned tasks. The Supreme Court ultimately did not rely on Art. 2180 but instead on the registered owner doctrine, rendering the employer-employee analysis immaterial.
• Section 5(a), Act No. 3992, as amended — The motor vehicle registration law cited in Erezo for the proposition that registration is required to permit the use and operation of a vehicle upon any public highway, and that the main aim is to identify the owner for purposes of fixing responsibility for accidents.

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concurred.