Duavit vs. Court of Appeals

An owner of a private vehicle cannot be held liable under Article 2180 of the Civil Code for an accident caused by a driver who was neither an employee of the owner nor authorized to drive the vehicle. The registered-owner doctrine, which treats the registered owner as the employer in contemplation of law, applies only where the vehicle was driven with the owner's consent or by an employee; it does not extend to cases where the vehicle was taken without the owner's knowledge or consent.

The petitioner, Gilberto M. Duavit, owned a private jeep registered in his name. The private respondents, Antonio Sarmiento, Sr. and Virgilio Catuar, were passengers in another jeep that was hit by the petitioner's jeep, driven by Oscar Sabiniano. The case required the Court to determine whether the registered-owner doctrine, developed in cases involving public utility vehicles, should be extended to private vehicles driven without the owner's consent by a non-employee.

On July 28, 1971, private respondents Antonio Sarmiento, Sr. and Virgilio Catuar were aboard a jeep with plate number 77-99-F-I Manila, 1971, owned by Sarmiento and driven by Ruperto Catuar. The jeep was running moderately at 20 to 35 kilometers per hour on Ortigas Avenue, San Juan, Rizal, and slowed down while approaching Roosevelt Avenue. Suddenly, another jeep with plate number 99-97-F-J Manila, 1971, driven by defendant Oscar Sabiniano, hit and bumped the plaintiffs' jeep near the left rear wheel. The impact caused the plaintiffs' jeep to fall on its right side and skid about 30 yards, damaging the windshield, differential, left rear wheel area, and top cover. Virgilio Catuar was thrown to the middle of the road, suffering a broken wrist and head contusions; Antonio Sarmiento, Sr. was trapped inside the fallen jeep and sustained a fractured leg.

Virgilio Catuar spent P2,464.00 for jeep repairs and P5,000.00 for hospitalization, medicine, and allied expenses. Antonio Sarmiento, Sr. was confined at the National Orthopedic Hospital and later at the Makati Medical Center from July 29 to August 29, 1971, and again from September 15 to 25, 1971; his leg remained in a plaster cast for eight months, and he spent no less than P13,785.25 for hospitalization and medical attendance. Sarmiento was employed as Assistant Accountant of the Canlubang Sugar Estate with a salary of P1,200.00 a month and also worked as accountant of United Haulers Inc. with a salary of P500.00 a month; he was unable to work for at least eight months. Catuar, a Chief Clerk at Canlubang Sugar Estate earning P500.00 a month, was incapacitated for one month.

The plaintiffs filed suit against both Oscar Sabiniano as driver and Gualberto Duavit as owner of the jeep. Duavit admitted ownership of the jeep but denied that Sabiniano was his employee, claiming he had never employed Sabiniano. Documentary and testimonial evidence showed that Sabiniano was an employee of the Board of Liquidators from November 14, 1966, to January 4, 1973. Sabiniano categorically admitted that he took the jeep from Duavit's garage without the latter's consent or authority, and testified that Duavit had even filed charges against him for theft of the jeep, which Duavit did not pursue after Sabiniano's parents apologized on his behalf. Sabiniano attempted to exculpate himself by claiming that the plaintiffs' vehicle hit his jeep and that he was taking all necessary precautions while driving.

The trial court found Sabiniano negligent in driving the vehicle but found no employer-employee relationship between him and Duavit, since Duavit was a government employee and Sabiniano took the vehicle without authority and consent. Duavit was thus absolved from liability under Article 2180 of the Civil Code. The private respondents appealed, and the Court of Appeals reversed, holding Duavit jointly and severally liable with Sabiniano based on the registered-owner doctrine from Vargas vs. Langcay, ruling that the registered owner is the employer in contemplation of law and that this is a conclusive presumption not subject to rebuttal.

• Absence of Employer-Employee Relationship: Petitioner contended that the respondent appellate court committed grave abuse of discretion in holding him jointly and severally liable with Sabiniano in spite of the absence of an employer-employee relationship between them.
• Lack of Consent: Petitioner argued that his jeep was taken out of his garage and driven by Sabiniano without his consent, and that he could not be held liable for an accident involving a vehicle driven without his knowledge or consent by a person not employed by him.

• Registered-Owner Doctrine: Private respondents argued, and the Court of Appeals held, that under Vargas vs. Langcay, it is immaterial whether or not the driver was actually employed by the operator of record or registered owner, and that the registered owner is the employer in contemplation of law, a conclusive presumption of fact and law not subject to rebuttal.
• Burden of Proof: Private respondents invoked the ruling in Amar vs. Soberano that the burden of proving the non-existence of an employer-employee relationship is upon the defendant, which must be done by satisfactory preponderance of evidence.

• Vicarious Liability of Vehicle Owner: Whether the owner of a private vehicle which figured in an accident can be held liable under Article 2180 of the Civil Code when the said vehicle was neither driven by an employee of the owner nor taken with the consent of the latter.

• Vicarious Liability of Vehicle Owner: No. The petitioner cannot be held liable under Article 2180 of the Civil Code because the vehicle was driven without his consent by a person who was not his employee. The registered-owner doctrine relied upon by the Court of Appeals applies only where the vehicle was driven with the owner's consent or by an employee, and does not extend to cases where the vehicle was taken without the owner's knowledge or consent.

• Vicarious Liability of Vehicle Owner: The Court traced the doctrine back to Duquillo vs. Bayot (67 Phil. 131 [1939]), where it was ruled that an owner of a vehicle cannot be held liable for an accident involving the vehicle if it was driven without his consent or knowledge and by a person not employed by him. The Court upheld this ruling as still relevant and better applicable to present-day circumstances. The Court distinguished the cases of Erezo vs. Jepte (102 Phil. 103 [1957]) and Vargas vs. Langcay (6 SCRA 174 [1962]), upon which the Court of Appeals relied. In Erezo, the registered owner was held liable because the driver was fully authorized to drive the truck, and the owner had represented himself as owner to the Motor Vehicles Office. In Vargas, the vehicle involved was a public utility jeepney for hire, and the operator of record had failed to surrender the AC plates in violation of the Revised Motor Vehicle Law and Commonwealth Act No. 146. The Court noted that in the present case, the petitioner did not deny ownership of the vehicle but completely denied having employed the driver or having authorized him to drive the jeep. The jeep was virtually stolen from the petitioner's garage. The Court reasoned that holding the petitioner liable would be absurd, as it would be like holding liable the owner of a stolen vehicle for an accident caused by the person who stole such vehicle. The Court emphasized that it cannot blindly apply absolute rules based on precedents whose facts do not jibe four square with pending cases, and that every case must be determined on its own peculiar factual circumstances. Where the records fail to indicate the slightest indicia of an employer-employee relationship between the owner and the erring driver or any consent given by the owner for the vehicle's use, the owner cannot be held liable.

• Registered-Owner Doctrine — The doctrine that the registered owner of a vehicle is the employer in contemplation of law and is responsible for the consequences incident to its operation. The Court clarified that this doctrine applies to public utility vehicles and cases where the driver was authorized to drive the vehicle; it does not extend to private vehicles driven without the owner's consent by a non-employee.
• Vicarious Liability under Article 2180 — The liability of an owner for damages caused by a driver requires either an employer-employee relationship or consent to the vehicle's use. Where neither exists, the owner cannot be held liable under Article 2180 of the Civil Code.
• Case-by-Case Determination — Every case must be determined on its own peculiar factual circumstances; absolute rules based on precedents cannot be blindly applied where the facts do not align with the pending case.

• "As early as in 1939, we have ruled that an owner of a vehicle cannot be held liable for an accident involving the said vehicle if the same was driven without his consent or knowledge and by a person not employed by him." — This passage establishes the controlling rule from Duquillo vs. Bayot that the Court upheld as still relevant and better applicable to present-day circumstances.
• "To hold, therefore, the petitioner liable for the accident caused by the negligence of Sabiniano who was neither his driver nor employee would be absurd as it would be like holding liable the owner of a stolen vehicle for an accident caused by the person who stole such vehicle." — This passage articulates the Court's core reasoning for absolving the petitioner from liability, emphasizing the absurdity of holding an owner liable for a vehicle taken without consent.
• "We cannot blindly apply absolute rules based on precedents whose facts do not jibe four square with pending cases. Every case must be determined on its own peculiar factual circumstances." — This passage states the Court's methodological principle that precedents must be applied with attention to the specific facts of each case.

• Duquillo vs. Bayot, 67 Phil. 131 (1939) — Controlling precedent; the Court upheld this ruling as still relevant and better applicable to present-day circumstances, establishing that an owner cannot be held liable for an accident involving a vehicle driven without consent by a non-employee.
• Erezo vs. Jepte, 102 Phil. 103 (1957) — Distinguished; the registered owner was held liable because the driver was fully authorized to drive the truck, unlike in the present case where the driver took the vehicle without consent.
• Vargas vs. Langcay, 6 SCRA 174 (1962) — Distinguished; the case involved a public utility jeepney for hire and the operator of record's failure to surrender AC plates in violation of the Revised Motor Vehicle Law and Commonwealth Act No. 146, circumstances entirely different from the present case.
• Amar vs. Soberano, 63 O.G. 6850 (1966) — Cited by the Court of Appeals but held to have to defer to the doctrines evolved by the Supreme Court in cases of damages arising from vehicular mishaps involving registered motor vehicles.
• Tugade vs. Court of Appeals, 85 SCRA 226 — Cited by the Court of Appeals in support of the registered-owner doctrine.

• Article 2180, Civil Code — The provision on vicarious liability of employers for damages caused by their employees. The Court held that this provision does not apply where the driver was neither an employee of the owner nor authorized to drive the vehicle.
• Revised Motor Vehicle Law — Cited in Vargas vs. Langcay as the basis for the registered-owner doctrine in cases involving public utility vehicles, requiring the surrender of AC plates upon sale of the vehicle.
• Commonwealth Act No. 146 — Cited in Vargas vs. Langcay as the basis for the operator-of-record doctrine in public utility vehicle cases.

Fernan, C.J. (Chairman), Feliciano, Bidin, and Cortes, JJ., concurred.