G.R. No. 162267 - PCI Leasing and Fice, Inc. vs. UCPB General Insurance Co., Inc.

On October 19, 1990, at approximately 10:30 p.m., a Mitsubishi Lancer traveling along Laurel Highway, Barangay Balintawak, Lipa City, was involved in a collision.
The Mitsubishi Lancer, owned by United Coconut Planters Bank (UCPB), was insured by UCPB General Insurance, and driven by Flaviano Isaac with Conrado Geronimo, the Assistant Manager of UCPB.
The collision occurred when the Lancer was hit and bumped by an 18-wheeler Fuso Tanker Truck bearing Plate No. PJE-737 and Trailer Plate No. NVM-133.
The 18-wheeler truck was registered under the name of PCI Leasing and Finance, Inc. (petitioner) but was allegedly operated by its lessee, Superior Gas Equitable Co., Inc. (SUGECO), through its employee, Renato Gonzaga.

The impact inflicted heavy damage on the Mitsubishi Lancer, including an explosion at its rear part, and caused physical injuries to the driver and passenger.
Despite the injuries, Renato Gonzaga continued to his destination without rendering immediate assistance or transporting the injured to a hospital.
UCPB General Insurance, having paid the insured amount of ₱244,500.00 (the insurance coverage for the damaged vehicle), subsequently demanded payment from PCI Leasing, given that the 18-wheeler truck involved was registered to them.
Repeated demands for reimbursement were made by UCPB General Insurance, but PCI Leasing failed to make payment, prompting the filing of the lawsuit on March 13, 1991.

The Regional Trial Court (RTC) of Makati City rendered a decision on April 15, 1999, ordering PCI Leasing and Finance, Inc. and Renato Gonzaga to jointly and severally pay UCPB General Insurance the principal of ₱244,500.00 plus interest (initially at 12%), along with attorney’s fees and costs.
On appeal, the Court of Appeals (CA) affirmed the RTC’s decision with modifications on December 12, 2003:

The award for attorney’s fees was deleted.
The rate of interest was modified to 6% per annum from the filing of the complaint until finality of judgment; should the principal and interest remain unpaid thereafter, a rate of 12% per annum would apply.

PCI Leasing filed a Motion for Reconsideration against the CA decision, which was denied through a Resolution dated February 18, 2004.
Subsequently, a Petition for Review on Certiorari under Rule 45 was elevated to the Supreme Court, challenging the CA’s reliance on statutory provisions.

It could not be held liable for the accident since the driver, Renato Gonzaga, was an employee of its co-defendant, SUGECO, rather than its own employee.
The actual operation of the truck was under SUGECO’s control pursuant to a Contract of Lease between PCI Leasing and SUGECO, though PCI Leasing admitted ownership of the truck.

The Public Service Act, which the CA cited as the basis for holding the registered owner liable, is not applicable because the incident involved a private commercial vehicle used for business purposes, not a common carrier or vehicle operating as a public utility.
The enactment of Republic Act (R.A.) No. 8556 (the Financing Company Act of 1998) should absolve financing companies from liability in cases involving leased vehicles, thus exempting them from quasi-delictual liability.

Whether a registered owner, by virtue of motor vehicle registration, may be held liable jointly and severally with the driver for damages caused by a quasi-delict, regardless of whether the vehicle is used as a private commercial asset or as a common carrier.
Whether allowing a registered owner to prove a transfer of ownership or to designate another as the actual owner would defeat the purpose of compulsory registration aimed at protecting third parties and victims.

Whether the new provisions of R.A. No. 8556, which appear to limit the liability of financing companies, should be applied to exonerate PCI Leasing from liability for the damages incurred due to the vehicular accident.
Whether the failure to register the lease contract—in this instance—precludes PCI Leasing from enjoying liability protections under the said law.