Case Digest: Trans‐Asia Shipping v. CA, G.R. No. 118126

Trans‐Asia Shipping v. CA, G.R. No. 118126, March 4, 1996

Subject: Transportation Law

FACTS

Private respondent, Atty. Renato Arroyo, a public attorney, bought a ticket from Trans-Asia Shipping, a corporation engaged in inter-island shipping, for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991.

At around 5:30 in the evening of November 12, 1991, Aroyo boarded the M/V Asia Thailand vessel. At that instance, plaintiff noticed that some repair works were being undertaken on the engine of the vessel. The vessel departed at around 11:00 in the evening with only one (1) engine running.

After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some passengers demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to, Cagayan de Oro City. The captain acceded to their request and thus the vessel headed back to Cebu City.

At Cebu City, Aroyo together with the other passengers who requested to be brought back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. The next day, Aroyo boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of petitioner.

On account of this failure of Trans-Asia to transport him to the place of destination on November 12, 1991, Aroyo filed before the trial court a complaint for damages against petitioner.

Private respondent asserted that his complaint was "an action for damages arising from bad faith, breach of contract and from tort," with the former arising from the petitioner's "failure to carry [him] to his place of destination as contracted," while the latter from the "conduct of the [petitioner] resulting [in] the infliction of emotional distress" to the private respondent.

After trial, RTC ruled that it did not appear from the evidence that plaintiff was left in the Port of Cebu because of the fault, negligence, malice or wanton attitude of defendant's employees, the complaint is DISMISSED. Defendant's counterclaim is likewise dismissed it not appearing also that filing of the case by plaintiff was motivated by malice or bad faith.

Unsatisfied, the private respondent appealed to the Court of Appeals. CA reversed RTC’s decision by applying Article 1755 in relation to Articles 2201, 2208, 2217, and 2232 of the Civil Code and, accordingly, awarded compensatory, moral, and exemplary damages.

Hence this petition.

ISSUE

Whether or not petitioner exercised extraordinary diligence required of common carrier.

RULING

No, petitioner did not.

Under the law, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

In this case, SC fully agree with CA that in allowing its unseaworthy M/V Asia Thailand to leave the port of origin and undertake the contracted voyage, with full awareness that it was exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise extraordinary diligence and obviously acted with bad faith and in a wanton and reckless manner. Petitioner’s contention that the safety or the vessel and passengers was never at stake because the sea was "calm" in the vicinity where it stopped as faithfully recorded in the vessel's logbook and the private respondent was merely "over-reacting" to the situation obtaining then is unacceptable.

Petitioner's defense cannot exculpate it nor mitigate its liability. On the contrary, such a claim demonstrates beyond cavil the petitioner's lack of genuine concern for the safety of its passengers. It was, perhaps, only providential then the sea happened to be calm. Even so, the petitioner should not expect its passengers to act in the manner it desired. The passengers were not stoics; becoming alarmed, anxious, or frightened at the stoppage of a vessel at sea in an unfamiliar zone as nighttime is not the sole prerogative of the faint-hearted. More so in the light of the many tragedies at sea resulting in the loss of lives of hopeless passengers and damage to property simply because common carriers failed in their duty to exercise extraordinary diligence in the performance of their obligations.

Case Digest: Lorenzo Shipping v. BJ Marthel, 443 SCRA 163, G.R. No. 145483

Lorenzo Shipping v. BJ Marthel, 443 SCRA 163, G.R. No. 145483, November 19, 2004

Subject: Obligations and Contracts

FACTS

Petitioner Lorenzo Shipping Corporation is a domestic corporation engaged in coastwise shipping. It used to own the cargo vessel M/V Dadiangas Express. The respondent BJ Marthel International, Inc. is a business entity engaged in trading, marketing, and selling of various industrial commodities. It is also an importer and distributor of different brands of engines and spare parts.

In 1989, petitioner asked respondent for a quotation for various machine parts.

Petitioner issued a two separate Purchase Orders. Instead of paying the 25% down payment for the first cylinder liner, petitioner issued in favor of respondent ten postdated checks to be drawn against the former's account with Allied Banking Corporation. The checks were supposed to represent the full payment of the first cylinder liner while the liner was subject to term of payment to be "25% upon delivery, balance payable in 5 bi-monthly equal installments." Both purchase orders did not state the date of the cylinder liner's delivery.

In January 1990, respondent deposited petitioner's check that was postdated 18 January 1990, however, the same was dishonored by the drawee bank due to insufficiency of funds. Petitioner claimed that it replaced said check with a good one, the proceeds of which were applied to its other obligation to respondent. For its part, respondent insisted that it returned said postdated check to petitioner.

Respondent thereafter placed the order for the two (02) cylinder liners with its principal in Japan, Daiei Sangyo Co. Ltd., and delivered the two (02) cylinder liners at petitioner's warehouse in North Harbor, Manila. The sales invoices evidencing the delivery of the cylinder liners both contain the notation "subject to verification" under which the signature of Eric Go, petitioner's warehouseman, appeared.

Respondent thereafter sent a Statement of Account to petitioner. While the other items listed in said statement of account were fully paid by petitioner, the two-cylinder liners delivered to petitioner on 20 April 1990 remained unsettled. Consequently, respondent sent a demand letter to petitioner requiring the latter to pay the value of the cylinder liners subjects of this case. Instead of heeding the demand of respondent for the full payment of the value of the cylinder liners, petitioner sent the former a letter dated 12 March 1991 offering to pay only P150,000 for the cylinder liners. In said letter, petitioner claimed that as the cylinder liners were delivered late and due to the scrapping of the M/V Dadiangas Express, it (petitioner) would have to sell the cylinder liners in Singapore and pay the balance from the proceeds of said sale.

Due to the failure of the parties to settle the matter, respondent filed an action for sum of money and damages before RTC of Makati City.

Petitioner alleged that time was of the essence in the delivery of the cylinder liners and that the delivery on 20 April 1990 of said items was late as respondent committed to deliver said items "within two (2) months after receipt of firm order" from petitioner.

RTC dismissed the action upon findings that respondent bound to the quotation it submitted to petitioner particularly with respect to the terms of payment and delivery of the cylinder liners. It also declared that respondent had agreed to the cancellation of the contract of sale when it returned the postdated checks issued by petitioner.

Aggrieved, respondent filed an appeal with the CA which reversed and set aside RTC’s decision. The appellate court brushed aside petitioner's claim that time was of the essence in the contract of sale between the parties herein considering the fact that a significant period of time had lapsed between respondent's offer and the issuance by petitioner of its purchase orders. There was no evidence of the alleged cancellation of orders by petitioner and that the delivery of the cylinder liners on 20 April 1990 was reasonable under the circumstances.

Petitioner insists that although its purchase orders did not specify the dates when the cylinder liners were supposed to be delivered, nevertheless, respondent should abide by the term of delivery appearing on the quotation it submitted to petitioner. Petitioner theorizes that the quotation embodied the offer from respondent while the purchase order represented its (petitioner's) acceptance of the proposed terms of the contract of sale. Thus, petitioner is of the view that these two documents "cannot be taken separately as if there were two distinct contracts."

Hence this petition.

ISSUE

Whether or not there was late delivery of the subjects of the contract of sale to justify petitioner to disregard the terms of the contract considering that time was of the essence thereof.

RULING

No, there was late delivery.

Under the law, the power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

In this case, there is no showing that petitioner notified respondent of its intention to rescind the contract of sale between them. Quite the contrary, respondent's act of proceeding with the opening of an irrevocable letter of credit on 23 February 1990 belies petitioner's claim that it notified respondent of the cancellation of the contract of sale. Truly, no prudent businessman would pursue such action knowing that the contract of sale, for which the letter of credit was opened, was already rescinded by the other party.

Case Digest: PCIC vs. UNKNOWN OWNER OF THE VESSEL M/V "NATIONAL HONOR," NSCP and ICSI, G.R. No. 161833

PHILIPPINE CHARTER INSURANCE CORPORATION vs. UNKNOWN OWNER OF THE VESSEL M/V "NATIONAL HONOR," NATIONAL SHIPPING CORPORATION OF THE PHILIPPINES and INTERNATIONAL CONTAINER SERVICES, INC., G.R. No. 161833, July 08, 2005.

Subject: Transportation Law

FACTS

On November 5, 1995, J. Trading Co. Ltd. of Seoul, Korea, loaded a shipment of four units of parts and accessories in the port of Pusan, Korea, on board the vessel M/V "National Honor," represented in the Philippines by its agent, National Shipping Corporation of the Philippines (NSCP). The shipment was for delivery to Manila, Philippines. Freight forwarder, Samhwa Inter-Trans Co., Ltd., issued Bill of Lading No. SH9410306 in the name of the shipper consigned to the order of Metropolitan Bank and Trust Company with arrival notice in Manila to ultimate consignee Blue Mono International Company, Incorporated (BMICI), Binondo, Manila.

The shipment was contained in two wooden crates, complete and in good order condition. here were no markings on the outer portion of the crates except the name of the consignee.

The M/V "National Honor" arrived at the Manila International Container Terminal (MICT) on November 14, 1995. The International Container Terminal Services, Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading, and it knew the contents of the crate. The following day, the vessel started discharging its cargoes using its winch crane. The crane was operated by Olegario Balsa, a winchman from the ICTSI, the exclusive arrastre operator of MICT.

As the crate was being hoisted from the vessel’s hatch, the mid-portion of the wooden flooring suddenly snapped in the air, about five feet high from the vessel’s twin deck, sending all its contents crashing down hard, resulting in extensive damage to the shipment.

BMICI’s customs broker, JRM Incorporated, took delivery of the cargo in such damaged condition. Upon receipt of the damaged shipment, BMICI found that the same could no longer be used for the intended purpose.

BMICI subsequently filed separate claims against the NSCP, the ICTSI, and its insurer, the PCIC. When the other companies denied liability, PCIC paid the claim and was issued a Subrogation Receipt. As subrogee, PCIC then filed with the RTC of Manila, a Complaint for Damages against the "Unknown owner of the vessel M/V National Honor," NSCP and ICTSI, as defendants. PCIC alleged that the loss was due to the fault and negligence of the defendants

RTC rendered judgment for PCIC and ordered the complaint dismissed. CA affirmed in toto the decision of RTC.

Petitioner asserts that the mere proof of receipt of the shipment by the common carrier (to the carrier) in good order, and their arrival at the place of destination in bad order makes out a prima facie case against it; in such case, it is liable for the loss or damage to the cargo absent satisfactory explanation given by the carrier as to the exercise of extraordinary diligence.

ISSUE

Whether or not the damage sustained by the shipment was due to its defective packing and not to the fault and negligence of the common carrier.

RULING

Yes, the damage sustained was due to defective packaging and not the fault of the respondents.

Under the law, common carriers are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of passengers transported by them, according to all the circumstance of each case. In the event of loss, destruction or deterioration of the insured goods, common carriers shall be responsible unless the same is brought about, among others, by flood, storm, earthquake, lightning or other natural disaster or calamity. In all other cases, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence.

In this case, SC held that appellant’s allegation that since the cargo arrived safely from the port of Pusan, Korea without defect, the fault should be attributed to the arrastre operator who mishandled the cargo, is without merit. The cargo fell while it was being carried only at about five (5) feet high above the ground. It would not have so easily collapsed had the cargo been properly packed. Not only did the shipper fail to properly pack the cargo, it also failed to indicate an arrow in the middle portion of the cargo where additional slings should be attached. At any rate, the issue of negligence is factual in nature and in this regard, it is settled that factual finding of the lower courts are entitled to great weight and respect on appeal, and, in fact, accorded finality when supported by substantial evidence.

Petitioner failed to adduce any evidence to counter that of respondent ICTSI. In addition, under Bill of Lading issued by the respondent NSCP and accepted by the petitioner, the latter represented and warranted that the goods were properly packed, and disclosed in writing the "condition, nature, quality or characteristic that may cause damage, injury or detriment to the goods." Absent any signs on the shipment requiring the placement of a sling cable in the mid-portion of the crate, the respondent ICTSI was not obliged to do so.

Case Digest: Delsan Transport v. Court of Appeals, 369 SCRA 24, G.R. No. 127897

Delsan Transport v. Court of Appeals, 369 SCRA 24, G.R. No. 127897, November 15, 2001

Subject: Transportation Law

FACTS

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines, Inc., for a period of one year whereby the said common carrier agreed to transport Caltex’s industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the Caltex Oil Terminal in Zamboanga City. The shipment was insured with the private respondent, American Home Assurance Corporation.

On August 14, 1986, MT Maysum set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.

Subsequently, private respondent paid Caltex representing the insured value of the lost cargo. Exercising its right of subrogation.

Due to its failure to collect from the petitioner despite prior demand, private respondent filed a complaint with the Regional Trial Court of Makati City. RTC dismissed the case on the ground that the vessel, MT Maysum, was seaworthy to undertake the voyage as determined by the Philippine Coast Guard per Survey Certificate Report upon inspection during its annual dry-docking and that the incident was caused by unexpected inclement weather condition or force majeure, thus exempting the common carrier (herein petitioner) from liability for the loss of its cargo.

However, CA set aside decision of RTC. CA gave credence to the weather report issued by the Philippine Atmospheric, Geophysical and Astronomical Services Administration. In the absence of any explanation as to what may have caused the sinking of the vessel coupled with the finding that the same was improperly manned, hence CA ruled that the petitioner is liable on its obligation as common carrier.

ISSUE

(1) Whether or not the payment made by the private respondent to Caltex for the insured value of the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any action for recovery against the petitioner.

(2) Whether or not the non-presentation of the marine insurance policy bars the complaint for recovery of sum of money for lack of cause of action.

RULING

No to both issues.

Under the law, common carriers are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of passengers transported by them, according to all the circumstance of each case. In the event of loss, destruction or deterioration of the insured goods, common carriers shall be responsible unless the same is brought about, among others, by flood, storm, earthquake, lightning or other natural disaster or calamity. In all other cases, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence.

On the first issue, the payment made by the private respondent for the insured value of the lost cargo operates as waiver of its (private respondent) right to enforce the term of the implied warranty against Caltex under the marine insurance policy. However, the same cannot be validly interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as to foreclose recourse against the petitioner for any liability under its contractual obligation as a common carrier. The fact of payment grants the private respondent subrogatory right which enables it to exercise legal remedies that would otherwise be available to Caltex as owner of the lost cargo against the petitioner common carrier.

SC agrees with CA that in order to escape liability for the loss of its cargo of industrial fuel oil belonging to Caltex, petitioner attributes the sinking of MT Maysun to fortuitous even or force majeure. Based from the weather report of PAGASA, the independent government agency charged with monitoring weather and sea conditions, there was no squall or bad weather or extremely poor sea condition in the vicinity when the said vessel sank. Thus, CA correctly ruled, petitioner’s vessel, MT Maysun, sank with its entire cargo for the reason that it was not seaworthy. Neither may petitioner escape liability by presenting in evidence certificates that tend to show that at the time of dry-docking and inspection by the Philippine Coast Guard, the vessel MT Maysun, was fit for voyage. SC held that these pieces of evidence do not necessarily take into account the actual condition of the vessel at the time of the commencement of the voyage.

On the second issue, the presentation in evidence of the marine insurance policy is not indispensable in this case before the insurer may recover from the common carrier the insured value of the lost cargo in the exercise of its subrogatory right. The subrogation receipt, by itself, is sufficient to establish not only the relationship of herein private respondent as insurer and Caltex, as the assured shipper of the lost cargo of industrial fuel oil, but also the amount paid to settle the insurance claim. The right of subrogation accrues simply upon payment by the insurance company of the insurance claim.

Case Digest: Eastern Shipping v. Court of Appeals, 196 SCRA 570, G.R. No. 94151

Eastern Shipping v. Court of Appeals, 196 SCRA 570, G.R. No. 94151, April 30, 1991

Subject: Transportation Law

FACTS

On September 4, 1978, thirteen coils of uncoated 7-wire stress relieved wire strand for prestressed concrete were shipped on board the vessel "Japri Venture," owned and operated by the defendant Eastern Shipping Lines, Inc., at Kobe, Japan, for delivery to Stresstek Post-Tensioning Phils., Inc. in Manila.

On September 16, 1978, the carrying vessel arrived in Manila and discharged the cargo to the custody of the defendant E. Razon, Inc., from whom the consignee's customs broker received it for delivery to the consignee's warehouse.

The plaintiff indemnified the consignee for damage and loss to the insured cargo, whereupon the former was subrogated for the latter. The plaintiff now seeks to recover from the defendants what it has indemnified the consignee.

RTC dismissed the complaint. Plaintiff appealed their cause to the CA. CA set aside the decision of RTC and ordered the appellees to pay the petitioner. Eastern Shipping Lines, Inc. to assume 8/13 thereof, and E. Razon, Inc. to assume 5/13 thereof. Only Eastern Shipping files a review for certiorari to SC.

ISSUE

Whether or not Eastern Shipping Lines exercised extraordinary diligence and is not liable for the damage to the cargo.

RULING

No, Eastern Shipping Lines was not able to prove that they had exercised extraordinary diligence with the cargo.

Under the law, common carriers are bound to observe "extra-ordinary vigilance over goods…according to all circumstances of each case". If the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in article 1733.

In this case, while it is true the cargo was delivered to the arrastre operator in apparent good order condition, it is also undisputed that while en route from Kobe to Manila, the vessel encountered "very rough seas and stormy weather”. SC held that the heavy seas and rains referred to in the master's report were not caso fortuito but normal occurrences that an ocean-going vessel, particularly in the month of September which, in our area, is a month of rains and heavy seas would encounter as a matter of routine. They are not unforeseen nor unforeseeable. Rainwater (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care, and foresight did not attend the closing of the ship's hatches so that rainwater would not find its way into the cargo holds of the ship. The carrier has failed to establish any caso fortuito, the presumption by law of fault or negligence on the part of the carrier applies; and the carrier must present evidence that it has observed the extraordinary diligence required by Article 1733 of the Civil Code in order to escape liability for damage or destruction to the goods that it had admittedly carried in this case. No such evidence exists of record. Thus, the carrier cannot escape liability.

Case Digest: Aboitiz Shipping Corp. v. CA, GR No. 84458

Aboitiz Shipping Corp. v. CA, GR No. 84458 Nov. 6, 1989

Subject: Transportation Law

FACTS

Aboitiz Shipping Corporation, the petitioner, appealed a decision by the Court of Appeals dated July 29, 1988. The decision affirmed a modified judgment by the trial court, which ordered Aboitiz Shipping to pay the plaintiffs various amounts for damages. The case stemmed from an incident where Anacleto Viana, a passenger of Aboitiz's vessel M/V Antonia, disembarked from the vessel and was later struck by a crane operated by Pioneer Stevedoring Corporation, causing his death.

The undisputed facts established that Anacleto Viana had boarded M/V Antonia in San Jose, Occidental Mindoro, bound for Manila. Upon arrival at Pier 4, North Harbor, Manila, passengers disembarked, and a gangplank was provided for this purpose. However, Anacleto Viana disembarked on the third deck of the vessel, which was level with the pier, instead of using the gangplank. While the crane operated by Alejo Figueroa, an employee of Pioneer Stevedoring Corporation, was unloading cargoes from the vessel, Anacleto Viana returned to the vessel to point out where his cargoes were loaded. During this time, the crane struck him, pinning him between the vessel and the crane. He was taken to the hospital and later died from injuries.

The plaintiffs, including Anacleto Viana's wife and parents, filed a complaint against Aboitiz Shipping for damages, alleging a breach of the contract of carriage. Aboitiz Shipping, in its defense, denied responsibility, claiming that Pioneer Stevedoring Corporation had exclusive control of the vessel at the time of the accident and that the crane operator was not its employee. Aboitiz Shipping also filed a third-party complaint against Pioneer Stevedoring Corporation, seeking to hold it liable for Anacleto Viana's death.

ISSUE

Whether or not Aboitiz Shipping was negligent and liable for damages.

RULING

Yes.

Under the law, common carriers are, from the nature of their business and for reasons of public policy, bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. More particularly, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Thus, where a passenger dies or is injured, the common carrier is presumed to have been at fault or to have acted negligently.

In this case, Aboitiz Shipping failed to exercise the extraordinary diligence required of common carriers in ensuring passenger safety. While the victim was contributorily negligent, Aboitiz Shipping's inadequate precautions and failure to enforce safety measures were the proximate cause of the accident. The victim's contributory negligence did not absolve Aboitiz Shipping of liability.

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.