Case Summary (G.R. No. 5356)
Factual Background and Procedural History
The case arose from a vehicular accident on South Superhighway involving two Mitsubishi Lancers. Priscilla Domingo’s silver Lancer, driven by Leandro Domingo, was hit by a green Lancer driven by Ocfemia, who had an expired driver's license and tested positive for alcohol. Based on the Traffic Accident Report, criminal charges for reckless imprudence were recommended against Ocfemia. Nostradamus Villanueva originally owned the green Lancer but had swapped it with a Pajero for a vehicle owned by Albert Jaucian/Auto Palace Car Exchange before the incident. Petitioner argued that he was no longer the owner and thus not liable for damages. The trial court found the petitioner liable for actual, moral, and exemplary damages and attorney's fees, a decision affirmed by the Court of Appeals except for the attorney's fees, which were deleted due to insufficient explanation.
Central Issue
Whether the registered owner of a motor vehicle may be held liable for damages arising from a vehicular accident involving the vehicle operated by an employee of its new (actual) owner without the latter’s consent and knowledge.
Legal Principle: Liability of Registered Owner
The Court reaffirmed the settled doctrine that the registered owner of a motor vehicle is directly and primarily responsible for any accident or damage caused by the operation of such vehicle, regardless of its actual ownership status at the time of the accident. This principle is grounded in policies of public protection and ease of identification of responsible parties after incidents on public highways, as established in the 1957 Erezo v. Jepte decision.
Rationale for Registered Owner Liability
The registration system under Act No. 3992, as amended, is designed not to effectuate ownership transfer but to enable control, identification, and responsibility in the event of accidents. The public is entitled to rely on the Motor Vehicles Office registration to hold a definite individual accountable for damages caused by a vehicle. Allowing registered owners to avoid liability by proving non-ownership would undermine the statutory scheme, impose undue burden on accident victims, and encourage evasions of responsibility.
Application to the Present Case
The petitioner contended that the vehicle was operated without authorization by the actual owner’s employee, arguing that liability should not attach to him under the ruling of First Malayan Leasing and Finance Corporation v. CA. However, the Court clarified that the authorization of the driver by the actual owner is irrelevant to the registered owner’s liability. The First Malayan ruling supports the principle that the registered owner remains liable irrespective of the driver’s status or authorization, affirming the registered owner as responsible in contemplation of law for the vehicle's operation and acts.
Distinction from Duavit v. CA
Petitioner relied on Duavit v. CA for relief from liability based on unauthorized use. The Court distinguished this case by noting that in Duavit, the vehicle was stolen without the owner’s consent, while in the present case, the petitioner voluntarily transferred possession of the vehicle as part of a transaction. Therefore, the defense of unauthorized use does not apply, as Ocfemia was an employee legitimately operating the vehicle on behalf of its actual owner, Albert Jaucian.
Precedents Reinforcing Registered Owner Liability
The Court cited additional jurisprudence such as BA Finance Corporation v. CA and Aguilar, Sr. v. Commercial Savings Bank emphasizing that liability flows to the registered owner despite the vehicle’s lease or t
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Procedural History and Nature of Case
- This case is a petition filed by Nostradamus Villanueva to review the decision of the Court of Appeals in CA-G.R. CV No. 52203.
- The Court of Appeals had affirmed the trial court’s ruling that held Villanueva liable for damages caused by a vehicular accident, but deleted the award of attorney’s fees and appearance fees due to lack of justification.
- The case focuses on the liability of the registered owner of a motor vehicle for damages arising from an accident involving his vehicle operated by an employee of its buyer without the buyer's consent and knowledge.
- The trial court ordered Villanueva to pay actual, moral, and exemplary damages, attorney’s fees, and appearance fees.
- The Court of Appeals affirmed liability but deleted attorney’s and appearance fees awards.
- Villanueva’s petition raises a singular issue regarding the extent of liability of a registered owner under the described circumstances.
Facts of the Case
- Priscilla R. Domingo is the registered owner of a silver Mitsubishi Lancer, plate No. NDW 781, driven by co-respondent Leandro Luis R. Domingo.
- Nostradamus Villanueva was the registered owner of a green Mitsubishi Lancer, plate No. PHK 201.
- On October 22, 1991, at around 9:45 PM, Priscilla Domingo’s vehicle, driven by Leandro Domingo, was legally proceeding on South Superhighway.
- Renato Dela Cruz Ocfemia, driving Villanueva’s green Mitsubishi Lancer, entered the highway from Vito Cruz Street against the traffic flow, colliding with NDW 781's left front portion.
- The impact caused a chain reaction crash involving multiple parked vehicles.
- The Traffic Accident Report stated Ocfemia had an expired license and tested positive for alcohol.
- The Manila Assistant City Prosecutor recommended filing charges for reckless imprudence resulting in property damage and physical injuries.
- The complaint was amended to include Auto Palace Car Exchange and Albert Jaucian (doing business as Auto Palace Car Exchange).
- Villanueva claimed ownership of the green Lancer had transferred to Albert Jaucian/Auto Palace Car Exchange by a vehicle swap.
- Albert Jaucian denied ownership and subsidiary liability, asserting Ocfemia was off-duty and not performing any employment-related functions at the time.
Trial Court Decision
- The trial court held Villanueva liable to Priscilla Domingo.
- Ordered payment included P99,580 as actual damages, P25,000 as moral damages, P25,000 as exemplary damages.
- Awarded attorney’s fees of P10,000 and appearance fees of P500 per hearing, plus legal interest.
- Albert Jaucian was ordered to indemnify Villanueva for any amount he had to pay.
Court of Appeals Ruling
- Affirmed the trial court’s conclusion on liability.
- However, deleted the award of attorney’s fees and appearance fees because the decision lacked justifying grounds for such grants.
- The CA recognized the policy of holding the r