Case Digest: Equitable v. Suyom, 388 SCRA 445, G.R. No. 143360

Equitable v. Suyom, 388 SCRA 445, G.R. No. 143360, July 5, 2002

Subject: Transportation Law

FACTS

A Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. A portion of the house was destroyed. Pinned to death under the engine of the tractor were Respondent Myrna Tamayo’s son, Reniel Tamayo, and Respondent Felix Oledan’s daughter, Felmarie Oledan. Injured were Respondent Oledan himself, Respondent Marissa Enano, and two sons of Respondent Lucita Suyom. Tutor was charged with and later convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries.

The registered owner of the tractor was "Equitable Leasing Corporation/leased to Edwin Lim." respondents filed against Raul Tutor, Ecatine Corporation ("Ecatine") and Equitable Leasing Corporation ("Equitable") a Complaint for damages.

After trial on the merits, the RTC held that since the Deed of Sale between petitioner and Ecatine had not been registered with the Land Transportation Office, (LTO), the legal owner was still Equitable. Thus, petitioner was liable to respondents. Sustaining the RTC, the CA held that petitioner was still to be legally deemed the owner/operator of the tractor, even if that vehicle had been the subject of a Deed of Sale in favor of Ecatine on December 9, 1992. The reason cited by the CA was that the Certificate of Registration on file with the LTO still remained in petitioner’s name. In order that a transfer of ownership of a motor vehicle can bind third persons, it must be duly recorded in the LTO. Petitioner contends that it should not be held liable for the damages sustained by respondents and that arose from the negligence of the driver of the Fuso Road Tractor, which it had already sold to Ecatine at the time of the accident. Not having employed Raul Tutor, the driver of the vehicle, it could not have controlled or supervised him.

ISSUE

Whether or not Equitable Leasing Corporation is liable for damages

RULING

Yes, Equitable Leasing Corporation is liable for damages, deaths and the injuries complained of, because it was the registered owner of the tractor at the time of the accident on July 17, 1994.

In this case, SC ruled that regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent. The same principle applies even if the registered owner of any vehicle does not use it for public service. Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the deaths and the injuries arising from the negligence of the driver. The finance-lease agreement between Equitable on the one hand and Lim or Ecatine on the other has already been superseded by the sale. In any event, it does not bind third persons. True, the LTO Certificate of Registration, dated "5/31/91," qualifies the name of the registered owner as "EQUITABLE LEASING CORPORATION/Leased to Edwin Lim." But the lease agreement between Equitable and Lim has been overtaken by the Deed of Sale on December 9, 1992, between petitioner and Ecatine. While this Deed does not affect respondents in this quasi-delict suit, it definitely binds petitioner because, unlike them, it is a party to it.