Vargas vs. Langcay

The registered owner/operator of a passenger vehicle is directly and primarily liable, jointly and severally with the driver, for damages incurred by third persons as a consequence of injuries sustained in the vehicle’s operation, notwithstanding an unapproved sale of the vehicle and cancellation of the certificate of public convenience; Article 103 of the Revised Penal Code does not apply to such liability.

Diwata Vargas was recorded with the Public Service Commission and the Motor Vehicles Office as the owner and operator of the passenger jeepney involved in the case. Corazon and Helen Langcay were the third persons who figured in the incident, Ramon B. Aguas was the driver, and Jose B. Aguas was his father. The regulatory backdrop involved the Public Service Commission’s authority over certificates of public convenience and the Motor Vehicles Office’s registration records, which identify the owner/operator of motor vehicles for the protection of the public. Section 20(g) of Commonwealth Act No. 146 and Section 5 of Act No. 3992 were cited in connection with the duties of a registered operator.

At about 8:00 o’clock in the morning of June 5, 1955, at Rizal Avenue, Manila, Corazon and Helen Langcay, sisters, were hit and injured by a jeepney bearing plate No. AC-4859-Quezon City-1955, then driven by Ramon B. Aguas. The records of the Public Service Commission and the Motor Vehicles Office showed that Diwata Vargas was, at the time of the accident, the owner and operator of the jeepney in question.

Ramon B. Aguas was criminally charged with physical injuries through reckless imprudence. The parents of Corazon and Helen later sued Diwata Vargas and the driver for damages. In defense, Diwata Vargas claimed that prior to the accident, precisely on August 17, 1953, she had sold the vehicle to Jose B. Aguas, father of the driver, so that at the time of the accident she was no longer the owner; she further claimed that the Public Service Commission, on October 27, 1953, cancelled the certificate of public convenience issued in her name.

The Court of Appeals found that the order of cancellation and revocation of appellant’s certificate of public convenience, dated October 27, 1953 (Exh. 4-D), was issued motu proprio by the Commission because of appellant’s failure to pay the P15.00 supervision and regulation fee and its 50% surcharge, and not for the purpose of transferring the same certificate to Jose B. Aguas. A copy of the order was furnished appellant, so she could not profess ignorance of what she termed the “anomalous operation” of the jeepney she sold to Jose B. Aguas without the required authorization or approval of the Public Service Commission. Her failure to stop the operation of the vehicle and to surrender to the Motor Vehicles Office the corresponding plates, as ordered by Exhibit 4-D, constituted a violation of the Revised Motor Vehicle Law and Commonwealth Act No. 146.

The Court of Appeals also found that Corazon and Helen Langcay were not passengers of the jeepney, the reckless operation of which resulted in their injuries. These findings—that Vargas remained the registered owner/operator, that the sale and cancellation did not transfer the certificate, and that the injured sisters were third persons—framed the Supreme Court’s analysis of her liability.

• Article 103, Revised Penal Code, Inapplicable: Petitioner alleged that she cannot be held liable under Article 103 of the Revised Penal Code for whatever violation or offense she may have committed under the Public Service Law and the Motor Vehicle Law.
• No Employer-Employee Relationship: Petitioner argued that there was no showing that she employed the driver who caused the damage, and that the evidence proved Jose B. Aguas, the driver’s father, was the actual employer.
• No Industry or Business: Petitioner argued that there was no showing that she was engaged in an industry or a business, as required for liability under Article 103 of the Revised Penal Code.

• Applicability of Article 103, Revised Penal Code: Whether Article 103 of the Revised Penal Code is the law applicable in holding petitioner liable for damages.
• Liability of Registered Owner/Operator: Whether the registered owner/operator of a passenger vehicle is directly and primarily liable, jointly and severally with the driver, for damages caused to third persons by the vehicle’s negligent operation, notwithstanding an unapproved sale and cancellation of the certificate of public convenience.
• Relevance of Actual Employer/Owner: Whether it is material that the driver was actually employed by another or that another was the actual owner of the vehicle.

• Applicability of Article 103, Revised Penal Code: No. Article 103 is not the law applicable; petitioner stands liable on the settled principle that as registered owner she is directly and primarily responsible for damages sustained by passengers or third persons from the negligent operation of the vehicle registered in her name.
• Liability of Registered Owner/Operator: Yes. The registered owner/operator is directly and primarily liable, jointly and severally with the driver, for damages to third persons; an unapproved sale and cancellation of the certificate do not relieve her.
• Relevance of Actual Employer/Owner: No. It is immaterial whether the driver was actually employed by the operator of record; proof of actual owner/employer does not relieve the registered owner/operator, and the actual operator/employer is considered the agent of the operator of record.

• Applicability of Article 103, Revised Penal Code: The Court of Appeals erred in treating petitioner as only subsidiarily liable under Article 103. Prior decisions have consistently considered the registered owner/operator of a passenger vehicle jointly and severally liable with the driver for damages incurred by passengers or third persons as a consequence of injuries sustained in the operation of the vehicle. Erezo vs. Jepte held the registered owner primarily responsible; Tamayo vs. Aquino held that the registered owner’s responsibility to the public or any passenger must be direct. Article 103 therefore was not the law applicable.
• Liability of Registered Owner/Operator: The records of the Public Service Commission and Motor Vehicles Office showed Vargas as owner/operator at the time of the accident. Her sale to Jose B. Aguas and the cancellation of her certificate did not relieve her. The cancellation was motu proprio for nonpayment of the P15.00 supervision and regulation fee and 50% surcharge, not to transfer the certificate; she was furnished a copy and failed to stop operation and surrender the plates as ordered, violating the Revised Motor Vehicle Law and Commonwealth Act No. 146. The operator of record continues as operator in contemplation of law as regards the public and third persons, and is responsible for consequences incident to operation. Public policy supports this: an injured victim has no means other than registration to identify the owner, and allowing the registered owner to escape by proving another owner would make the law’s protection illusory. Thus petitioner is directly and primarily liable.
• Relevance of Actual Employer/Owner: It is immaterial whether the driver was actually employed by the operator of record; it is not even necessary to prove who the actual owner and employer is. Even granting that Jose B. Aguas was the actual owner and employer, the operator of record is considered the employer in contemplation of law, and the actual operator/employer is considered the agent of the operator of record. Tamayo vs. Aquino stated that a transferee operating without Public Service Commission approval acted merely as agent of the registered owner. Accepting petitioner’s argument would defeat the purpose of the principles evolved in these cases.

• Registered owner/operator rule — The registered owner/operator of a passenger vehicle is directly and primarily liable, jointly and severally with the driver, for damages incurred by passengers or third persons as a consequence of injuries sustained in the operation of the vehicle. The Court applied this rule to hold Diwata Vargas liable despite her claim of prior sale and cancellation of her certificate.
• Operator of record in contemplation of law — The operator of record continues to be the operator of the vehicle as regards the public and third persons and is responsible for the consequences incident to its operation. The actual operator and employer is considered the agent of the operator of record. Thus, proof that another was the actual owner or employer does not relieve the registered owner/operator.
• Public policy of vehicle registration — The law fixes responsibility on the registered owner as an incident of registration so that injured third persons may rely on Motor Vehicles Office records to identify the owner. Allowing the registered owner to prove that another owns the vehicle would permit escape from liability and render the law’s protection illusory.
• Article 103, Revised Penal Code, not applicable — Article 103 subsidiary liability does not govern the liability of a registered owner/operator of a passenger vehicle for damages to third persons injured by the vehicle’s negligent operation; such liability is direct and primary, not subsidiary.

• "We hold that the Court of Appeals erred in considering appellant-petitioner Diwata Vargas only subsidiarily liable under Article 103 of the Revised Penal Code. This Court, in previous decisions, has always considered the registered owner/operator of a passenger vehicle, jointly and severally liable with the driver for damages incurred by passengers or third persons as a consequence of injuries (or death) sustained in the operation of said vehicles." — States the core holding and the line of precedent establishing the registered owner/operator’s joint and several liability.
• "For the foregoing considerations, we hold that Article 103 is not the law applicable in this case; the petitioner stands liable, however, on the basis of the settled principle that as the registered owner, she is directly and primarily responsible and liable for damages sustained by passengers or third persons as a consequence of the negligent or careless operation of the vehicle registered in her name." — The ratio decidendi: Article 103 is inapplicable, and the registered owner’s liability is direct and primary.
• "Granting that, in this case, the father of the driver is the act owner and that he is the actual employer, following well-settled principle that the operator of record continues to be the operator of the vehicle in contemplation of law, as regards the public and third persons, and such is responsible for the consequences incident to its operation, we must hold and consider such owner-operation of record as the employer, in contemplation of law, the driver." — Addresses the immateriality of actual ownership or employment and applies the operator-of-record principle.

• Erezo vs. Jepte, G.R. No. L-9605, Sept. 30, 1957 — Cited as controlling precedent for the rule that the registered owner is primarily responsible for damages and cannot escape liability by proving who the actual owner is.
• Tamayo vs. Aquino, G.R. No. L-12634, May 29, 1959 — Cited for the rule that the registered owner’s responsibility to the public or any passenger is direct, and for the principle that a transferee operating without Public Service Commission approval acted merely as agent of the registered owner.
• Montoya vs. Ignacio, G.R. No. L-5868, Dec. 29, 1953; Timbol vs. Osias, G.R. No. L-7547, April 30, 1955; Vda. de Medina vs. Cresencia, G.R. No. L-8194, July 11, 1956; Necesito vs. Paras, G.R. No. L-10605, June 30, 1955; Rayos vs. Tamayo, G.R. No. L-12720, May 29, 1959 — Cited as prior decisions establishing the line that the registered owner/operator of a passenger vehicle is jointly and severally liable with the driver for damages to passengers or third persons.

• Article 103, Revised Penal Code — The Court of Appeals used it to hold petitioner subsidiarily liable; the Supreme Court held it inapplicable because the registered owner/operator’s liability is direct and primary.
• Section 20(g), Commonwealth Act No. 146 — Cited by the Court of Appeals as a provision petitioner failed to comply with; her liability stemmed from and was a form of punishment for her failure to comply with this section and Section 5 of Act No. 3992.
• Section 5, Act No. 3992 — Cited with Section 20(g) of Commonwealth Act No. 146 as a basis for petitioner’s liability arising from her failure to comply with regulatory requirements.
• Civil Code (common carrier liability) — The Court of Appeals noted that because Corazon and Helen Langcay were not passengers, the direct and immediate liability of a common carrier under the Civil Code could not be ascribed to petitioner.

Bengzon, C.J., Padilla, Bautista Angelo, Reyes, J.B.L., and Paredes, JJ.