G.R. No. 162267.July 4, 2008.

PCI LEASING AND FINANCE, INC., petitioner, vs. UCPB

GENERAL INSURANCE CO., INC., respondent.
Civil Law; Quasi-delicts; Damages; Negligence; Registered
owner of a motor vehicle may be held civilly liable with the negligent
driver either subsidiarily or solidarily.For damage or injuries
arising out of negligence in the operation of a motor vehicle, the
registered owner may be held civilly liable with the negligent driver
either 1) subsidiarily, if the aggrieved party seeks relief based on a
delict or crime under Articles 100 and 103 of the Revised Penal
Code; or 2) solidarily, if the complainant seeks relief based on a
quasi-delict under Articles 2176 and 2180 of the Civil Code. It is the
option of the plaintiff whether to waive completely the filing of the
civil action, or institute it with the criminal action, or file it
separately or independently of a criminal action; his only limitation
is that he cannot recover damages twice for the same act or
omission of the defendant.
Same; Same; Same; Same; In case a separate civil action is
filed, the long-standing principle is that the registered owner of a
motor vehicle is primarily and directly responsible for the
consequences of its operation, including the negligence of the driver,
with respect to the public and all third persons; In contemplation of
law, the registered owner of a motor vehicle is the employer of its
driver, with the actual operator and employer, such as a lessee, being
considered as merely the owners agent.In case a separate civil
action is filed, the long-standing principle is that the registered
owner of a motor vehicle is primarily and directly responsible for
the consequences of its operation, including the negligence of the
driver, with respect to the public and all third persons. In
contemplation of law, the registered owner of a motor vehicle is the
employer of its driver, with the actual operator and employer, such
as a lessee, being considered as merely the owners agent. This
being the case, even if a sale has been executed before a tortious
incident, the sale, if unregistered, has no effect as to the right of the
public and third persons to recover from the registered owner. The

public has the right to con-

_______________
* THIRD DIVISION.

142

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SUPREME COURT REPORTS ANNOTATED

PCI Leasing and Finance, Inc. vs. UCPB General Insurance Co.,
Inc.
clusively presume that the registered owner is the real owner, and
may sue accordingly.
Same; Same; Same; Same; Land Transportation and Traffic
Code; RA No. 8556 does not supersede or repeal the law on
compulsory motor vehicle registration.The new law, R.A. No. 8556,
notwithstanding developments in foreign jurisdictions, does not
supersede or repeal the law on compulsory motor vehicle
registration. No part of the law expressly repeals Section 5(a) and
(e) of R.A. No. 4136, as amended, otherwise known as the Land
Transportation and Traffic Code.
Same; Same; Same; Same; Same; The failure to register a lease,
sale, transfer or encumbrance, should not benefit the parties
responsible, to the prejudice of innocent victims.The rule remains
the same: a sale, lease, or financial lease, for that matter, that is not
registered with the Land Transportation Office, still does not bind
third persons who are aggrieved in tortious incidents, for the latter
need only to rely on the public registration of a motor vehicle as
conclusive evidence of ownership. A lease such as the one involved
in the instant case is an encumbrance in contemplation of law,
which needs to be registered in order for it to bind third parties.
Under this policy, the evil sought to be avoided is the exacerbation
of the suffering of victims of tragic vehicular accidents in not being
able to identify a guilty party. A contrary ruling will not serve the
ends of justice. The failure to register a lease, sale, transfer or
encumbrance, should not benefit the parties responsible, to the
prejudice of innocent victims.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Agcaoili & Associates for petitioner.

Tumangan, Payumo & Partners for respondent.

Jesus B. Roldan for Sugeco and Renato Gonzaga.
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143

PCI Leasing and Finance, Inc. vs. UCPB General

Insurance Co., Inc.
AUSTRIA-MARTINEZ,J.:
Before the Court is a Petition for Review on Certiorari
under Rule 45 of the Rules of Court, seeking a reversal of
the Decision1 of the Court of Appeals (CA) dated December
12, 2003 affirming with modification the Decision of the
Regional Trial Court (RTC) of Makati City which ordered
petitioner and Renato Gonzaga (Gonzaga) to pay, jointly
and severally, respondent the amount of P244,500.00 plus
interest; and the CA Resolution2 dated February 18, 2004
denying petitioners Motion for Reconsideration.
The facts, as found by the CA, are undisputed:
On October 19, 1990 at about 10:30 p.m., a Mitsubishi Lancer
car with Plate Number PHD-206 owned by United Coconut Planters
Bank was traversing the Laurel Highway, Barangay Balintawak,
Lipa City. The car was insured with plaintiff-appellee [UCPB
General Insurance Inc.], then driven by Flaviano Isaac with
Conrado Geronimo, the Asst. Manager of said bank, was hit and
bumped by an 18-wheeler Fuso Tanker Truck with Plate No. PJE737 and Trailer Plate No. NVM-133, owned by defendantsappellants PCI Leasing & Finance, Inc. allegedly leased to and
operated by defendant-appellant Superior Gas & Equitable Co., Inc.
(SUGECO) and driven by its employee, defendant appellant Renato
Gonzaga.
The impact caused heavy damage to the Mitsubishi Lancer car
resulting in an explosion of the rear part of the car. The driver and
passenger suffered physical injuries. However, the driver
defendant-appellant Gonzaga continued on its [sic] way to its [sic]
destination and did not bother to bring his victims to the hospital.
Plaintiff-appellee paid the assured UCPB the amount of
P244,500.00 representing the insurance coverage of the damaged
car.
As the 18-wheeler truck is registered under the name of PCI
Leasing, repeated demands were made by plaintiff-appellee for the
_______________

1 Penned by Associate Justice Eugenio S. Labitoria with the concurrence of

Associate Justices Mercedes Gozo-Dadole and Rosmari D. Carandang, Rollo,
pp. 41-47.
2 Id., at p. 49.
144

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SUPREME COURT REPORTS ANNOTATED

PCI Leasing and Finance, Inc. vs. UCPB General Insurance Co.,
Inc.
payment of the aforesaid amounts. However, no payment was made.
Thus, plaintiff-appellee filed the instant case on March 13, 1991.3

PCI Leasing and Finance, Inc., (petitioner) interposed

the defense that it could not be held liable for the collision,
since the driver of the truck, Gonzaga, was not its
employee, but that of its co-defendant Superior Gas &
Equitable Co., Inc. (SUGECO).4 In fact, it was SUGECO,
and not petitioner, that was the actual operator of the
truck, pursuant to a Contract of Lease signed by petitioner
and SUGECO.5 Petitioner, however, admitted that it was
the owner of the truck in question.6
After trial, the RTC rendered its Decision dated April
15, 1999,7 the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of plaintiff UCPB General Insurance
[respondent], ordering the defendants PCI Leasing and Finance,
Inc., [petitioner] and Renato Gonzaga, to pay jointly and severally
the former the following amounts: the principal amount of
P244,500.00 with 12% interest as of the filing of this complaint
until the same is paid; P50,000.00 as attorneys fees; and
P20,000.00 as costs of suit.
SO ORDERED.8

Aggrieved by the decision of the trial court, petitioner

appealed to the CA.
In its Decision dated December 12, 2003, the CA
affirmed the RTCs decision, with certain modifications, as
follows:
WHEREFORE, the appealed decision dated April 15, 1999 is
hereby AFFIRMED with modification that the award of attorneys
fees is hereby deleted and the rate of interest shall be six percent

_______________
3 Rollo, p. 42.
4 Id., at p. 72.
5 Id., at pp. 72-73.
6 Id., at p. 72.
7 Id., at pp. 52-56.
8 Id., at p. 56.
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PCI Leasing and Finance, Inc. vs. UCPB General Insurance Co.,
Inc.
(6%) per annum computed from the time of the filing of the
complaint in the trial court until the finality of the judgment. If the
adjudged principal and the interest remain unpaid thereafter, the
interest rate shall be twelve percent (12%) per annum computed
from the time the judgment becomes final and executory until it is
fully satisfied.
SO ORDERED.9

Petitioner filed a Motion for Reconsideration which the

CA denied in its Resolution dated February 18, 2004.
Hence, herein Petition for Review.
The issues raised by petitioner are purely legal:
Whether petitioner, as registered owner of a motor vehicle that
figured in a quasi-delict may be held liable, jointly and severally,
with the driver thereof, for the damages caused to third parties.
Whether petitioner, as a financing company, is absolved from
liability by the enactment of Republic Act (R.A.) No. 8556, or the
Financing Company Act of 1998.

Anent the first issue, the CA found petitioner liable for

the damage caused by the collision since under the Public
Service Act, if the property covered by a franchise is
transferred or leased to another without obtaining the
requisite approval, the transfer is not binding on the Public
Service Commission and, in contemplation of law, the
grantee continues to be responsible under the franchise in
relation to the operation of the vehicle, such as damage or
injury to third parties due to collisions.10
Petitioner claims that the CAs reliance on the Public
Service Act is misplaced, since the said law applies only to
cases involving common carriers, or those which have

franchises to operate as public utilities. In contrast, the

case before this
_______________
9 Id., at p. 47.
10 Id., at pp. 44-45.
146

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SUPREME COURT REPORTS ANNOTATED

PCI Leasing and Finance, Inc. vs. UCPB General
Insurance Co., Inc.

Court involves a private commercial vehicle for business

use, which is not offered for service to the general public.11
Petitioners contention has partial merit, as indeed, the
vehicles involved in the case at bar are not common
carriers, which makes the Public Service Act inapplicable.
However, the registered owner of the vehicle driven by a
negligent driver may still be held liable under applicable
jurisprudence involving laws on compulsory motor vehicle
registration and the liabilities of employers for quasidelicts under the Civil Code.
The principle of holding the registered owner of a vehicle
liable for quasi-delicts resulting from its use is wellestablished in jurisprudence. Erezo v. Jepte,12 with Justice
Labrador as ponente, wisely explained the reason behind
this principle, thus:
Registration is required not to make said registration the
operative act by which ownership in vehicles is transferred, as in
land registration cases, because the administrative proceeding of
registration does not bear any essential relation to the contract of
sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39
Phil. 888), but to permit the use and operation of the vehicle upon
any public highway (section 5 [a], Act No. 3992, as amended.) The
main aim of motor vehicle registration is to identify the owner so
that if any accident happens, or that any damage or injury is caused
by the vehicle on the public highways, responsibility therefor can be
fixed on a definite individual, the registered owner. Instances are
numerous where vehicles running on public highways caused
accidents or injuries to pedestrians or other vehicles without
positive identification of the owner or drivers, or with very scant
means of identification. It is to forestall these circumstances, so

inconvenient or prejudicial to the public, that the motor vehicle

registration is primarily ordained, in the interest of the
determination of persons responsible for damages or injuries caused
on public highways.
_______________
11 Id., at pp. 21-22.
12 102 Phil. 103 (1957).
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PCI Leasing and Finance, Inc. vs. UCPB General Insurance Co.,
Inc.
One of the principal purposes of motor vehicles
legislation is identification of the vehicle and of the operator,
in case of accident; and another is that the knowledge that
means of detection are always available may act as a
deterrent from lax observance of the law and of the rules of
conservative and safe operation. Whatever purpose there may
be in these statutes, it is subordinate at the last to the
primary purpose of rendering it certain that the violator of
the law or of the rules of safety shall not escape because of
lack of means to discover him. The purpose of the statute is
thwarted, and the displayed number becomes a snare and
delusion, if courts would entertain such defenses as that put
forward by appellee in this case. No responsible person or
corporation could be held liable for the most outrageous acts
of negligence, if they should be allowed to place a middleman
between them and the public, and escape liability by the
manner in which they recompense their servants. (King vs.
Brenham Automobile Co., 145 S.W. 278, 279.)
With the above policy in mind, the question that defendantappellant poses is: should not the registered owner be allowed at
the trial to prove who the actual and real owner is, and in
accordance with such proof escape or evade responsibility and lay
the same on the person actually owning the vehicle? We hold with
the trial court that the law does not allow him to do so; the law,
with its aim and policy in mind, does not relieve him directly of the
responsibility that the law fixes and places upon him as an incident
or consequence of registration. Were a registered owner allowed to
evade responsibility by proving who the supposed transferee or
owner is, it would be easy for him, by collusion with others or
otherwise, to escape said responsibility and transfer the same to an

indefinite person, or to one who possesses no property with which to

respond financially for the damage or injury done. A victim of
recklessness on the public highways is usually without means to
discover or identify the person actually causing the injury or
damage. He has no means other than by a recourse to the
registration in the Motor Vehicles Office to determine who is the
owner. The protection that the law aims to extend to him would
become illusory were the registered owner given the opportunity to
escape liability by disproving his ownership. If the policy of the law
is to be enforced and carried out, the registered owner should not be
allowed to prove the contrary to the prejudice of the person injured,
that is, to prove that a third person or another
148

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SUPREME COURT REPORTS ANNOTATED

PCI Leasing and Finance, Inc. vs. UCPB General Insurance Co.,
Inc.
has become the owner, so that he may thereby be relieved of the
responsibility to the injured person.
The above policy and application of the law may appear quite
harsh and would seem to conflict with truth and justice. We do not
think it is so. A registered owner who has already sold or
transferred a vehicle has the recourse to a third-party complaint, in
the same action brought against him to recover for the damage or
injury done, against the vendee or transferee of the vehicle. The
inconvenience of the suit is no justification for relieving him of
liability; said inconvenience is the price he pays for failure to
comply with the registration that the law demands and requires.
In synthesis, we hold that the registered owner, the defendantappellant herein, is primarily responsible for the damage caused to
the vehicle of the plaintiff-appellee, but he (defendant-appellant)
has a right to be indemnified by the real or actual owner of the
amount that he may be required to pay as damage for the injury
caused to the plaintiff-appellant.13

The case is still good law and has been consistently cited
in subsequent cases.14 Thus, there is no good reason to
depart from its tenets.
For damage or injuries arising out of negligence in the
operation of a motor vehicle, the registered owner may be
held civilly liable with the negligent driver either 1)
subsidiarily, if the aggrieved party seeks relief based on a
delict or crime under Articles 100 and 103 of the Revised
Penal Code; or 2) solidarily, if the complainant seeks relief

based on a quasi-delict under Articles 2176 and 2180 of the

Civil Code. It is the option of the plaintiff whether to waive
completely the filing of the civil action, or institute it with
the criminal action, or file it separately or independently of
a criminal action;15 his
_______________
13 Id., at pp. 108-110.
14 Equitable Leasing Corp. v. Suyom, 437 Phil. 244, 256; 388 SCRA
445 (2002); Aguilar v. Commercial Savings Bank, 412 Phil. 834, 841; 360
SCRA 395 (2001); Spouses Hernandez v. Spouses Dolor, 479 Phil. 593,
603; 435 SCRA 668 (2004).
15 Rules of Court, Rule 111, Sec. 1, par. (a), sub-par. 1.
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PCI Leasing and Finance, Inc. vs. UCPB General

Insurance Co., Inc.
only limitation is that he cannot recover damages twice for
the same act or omission of the defendant.16
In case a separate civil action is filed, the long-standing
principle is that the registered owner of a motor vehicle is
primarily and directly responsible for the consequences of
its operation, including the negligence of the driver, with
respect to the public and all third persons.17 In
contemplation of law, the registered owner of a motor
vehicle is the employer of its driver, with the actual
operator and employer, such as a lessee, being considered
as merely the owners agent.18 This being the case, even if a
sale has been executed before a tortious incident, the sale,
if unregistered, has no effect as to the right of the public
and third persons to recover from the registered owner.19
The public has the right to conclusively presume that the
registered owner is the real owner, and may sue
accordingly.20
_______________
16 Civil Code, Art. 2177.
17 Equitable Leasing Corp. v. Suyom, supra note 14, at p. 255; p. 453;
First Malayan Leasing and Finance Corp. v. Court of Appeals, G.R. No.
91378, June 9, 1992, 209 SCRA 660, 663.

18 Equitable Leasing Corp. v. Suyom, supra 14, at p. 255; pp. 453-454,

citing First Malayan Leasing and Finance Corp. v. Court of Appeals,
supra note 17; MYC-Agro-Industrial Corp. v. Camerino, 217 Phil. 11, 17;
132 SCRA 10, 17 (1984); and Vargas v. Langcay, 116 Phil. 478, 481-482; 6
SCRA 174, 178 (1962).
The only known exception to the rule is that enunciated in FGU
Insurance Corp. v. Court of Appeals, 351 Phil. 219, 225; 287 SCRA 718,
722 (1998), where it was held that a rent-a-car company is not liable for
the damages caused by the negligence of its lessee, who drove the subject
vehicle. Here, it was established that between a rent-a-car company and
a client who drove a leased vehicle, there was a clear absence of
vinculum juris as employer and employee.
19 Equitable Leasing Corp. v. Suyom, supra; note 14, at p. 255; p. 454;
First Malayan Leasing and Finance Corp. v. Court of Appeals, supra note
17, at p. 664.
20 First Malayan Leasing and Finance Corp. v. Court of Appeals,
supra note 17, at p. 664.
150

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SUPREME COURT REPORTS ANNOTATED

PCI Leasing and Finance, Inc. vs. UCPB General
Insurance Co., Inc.

In the case now before the Court, there is not even a sale
of the vehicle involved, but a mere lease, which remained
unregistered up to the time of the occurrence of the quasidelict that gave rise to the case. Since a lease, unlike a sale,
does not even involve a transfer of title or ownership, but
the mere use or enjoyment of property, there is more
reason, therefore, in this instance to uphold the policy
behind the law, which is to protect the unwitting public and
provide it with a definite person to make accountable for
losses or injuries suffered in vehicular accidents.21 This is
and has always been the rationale behind compulsory
motor vehicle registration under the Land Transportation
and Traffic Code and similar laws, which, as early as Erezo,
has been guiding the courts in their disposition of cases
involving motor vehicular incidents. It is also important to
emphasize that such principles apply to all vehicles in
general, not just those offered for public service or utility.22
The Court recognizes that the business of financing
companies has a legitimate and commendable purpose.23 In
earlier cases, it considered a financial lease or financing
lease a legal contract,24 though subject to the restrictions of

the so-called Recto Law or Articles 1484 and 1485 of the

Civil Code.25 In previous cases, the Court adopted the
statutory definition of a financial lease or financing lease,
as:
_______________
21 Erezo v. Jepte, supra note 12, at p. 108.
22 Erezo v. Jepte, supra note 12, at p. 107; Equitable Leasing Corp. v.
Suyom, supra note 14, at p. 256; p. 455; BA Finance Corp. v. Court of
Appeals, G.R. No. 98275, November 13, 1992, 215 SCRA 715, 720.
23 PCI Leasing and Finance Inc. v. Giraffe-X Creative Imaging Inc.,
G.R. No. 142618, July 12, 2007, 527 SCRA 405, 420-421.
24 Cebu Contractors Consortium Co. v. Court of Appeals, 454 Phil.
650, 656; 407 SCRA 154, 159 (2003).
25 Elisco Tool Manufacturing Corp. v. Court of Appeals, 367 Phil. 242,
255; 307 SCRA 731, 743 (1999); PCI Leasing and Finance Inc. v. GiraffeX Creative Imaging Inc., supra note 23, at pp. 424-426.
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Insurance Co., Inc.
[A] mode of extending credit through a non-cancelable lease
contract under which the lessor purchases or acquires, at the
instance of the lessee, machinery, equipment, motor vehicles,
appliances, business and office machines, and other movable or
immovable property in consideration of the periodic payment by the
lessee of a fixed amount of money sufficient to amortize at least
seventy (70%) of the purchase price or acquisition cost, including
any incidental expenses and a margin of profit over an obligatory
period of not less than two (2) years during which the lessee has the
right to hold and use the leased property, x x x but with no
obligation or option on his part to purchase the leased property
from the owner-lessor at the end of the lease contract.26

Petitioner presented a lengthy discussion of the

purported trend in other jurisdictions, which apparently
tends to favor absolving financing companies from liability
for the consequences of quasi-delictual acts or omissions
involving financially leased property.27 The petition adds
that these developments have been legislated in our
jurisdiction in Republic Act (R.A.) No. 8556,28 which

provides:
Section12.Liability of lessors.Financing companies shall
not be liable for loss, damage or injury caused by a motor vehicle,
aircraft, vessel, equipment, machinery or other property leased to a
third person or entity except when the motor vehicle, aircraft,
vessel, equipment or other property is operated by the financing
company, its employees or agents at the time of the loss, damage or
injury.

Petitioners argument that the enactment of R.A. No.

8556, especially its addition of the new Sec. 12 to the old
law, is deemed to have absolved petitioner from liability,
fails to convince the Court.
_______________
26 Republic Act No. 5980 (1969), as amended by Republic Act No.
8556 (1998), Sec. 3 (d), quoted in Cebu Contractors Consortium Co. v.
Court of Appeals, supra note 24, at p. 657; p. 160; PCI Leasing and
Finance, Inc. v. Giraffe-X Creative Imaging Inc., supra note 23, at p. 416.
27 Rollo, pp. 29-30.
28 Amending R.A. No. 5980, or the old Financing Company Act.
152

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SUPREME COURT REPORTS ANNOTATED

PCI Leasing and Finance, Inc. vs. UCPB General
Insurance Co., Inc.

These developments, indeed, point to a seeming

emancipation of financing companies from the obligation to
compensate claimants for losses suffered from the
operation of vehicles covered by their lease. Such, however,
are not applicable to petitioner and do not exonerate it
from liability in the present case.
The new law, R.A. No. 8556, notwithstanding
developments in foreign jurisdictions, do not supersede or
repeal the law on compulsory motor vehicle registration.
No part of the law expressly repeals Section 5(a) and (e) of
R.A. No. 4136, as amended, otherwise known as the Land
Transportation and Traffic Code, to wit:
Sec.5.Compulsory registration of motor vehicles.(a) All
motor vehicles and trailer of any type used or operated on or upon
any highway of the Philippines must be registered with the Bureau

of Land Transportation (now the Land Transportation Office, per

Executive Order No. 125, January 30, 1987, and Executive Order
No. 125-A, April 13, 1987) for the current year in accordance with
the provisions of this Act.
xxxx
(e)Encumbrances of motor vehicles.Mortgages, attachments,
and other encumbrances of motor vehicles, in order to be valid
against third parties must be recorded in the Bureau (now the
Land Transportation Office). Voluntary transactions or voluntary
encumbrances shall likewise be properly recorded on the face of all
outstanding copies of the certificates of registration of the vehicle
concerned.
Cancellation or foreclosure of such mortgages, attachments, and
other encumbrances shall likewise be recorded, and in the absence
of such cancellation, no certificate of registration shall be issued
without the corresponding notation of mortgage, attachment and/or
other encumbrances.
x x x x (Emphasis supplied)

Neither is there an implied repeal of R.A. No. 4136. As a

rule, repeal by implication is frowned upon, unless there is
clear showing that the later statute is so irreconcilably
inconsistent
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PCI Leasing and Finance, Inc. vs. UCPB General

Insurance Co., Inc.
and repugnant to the existing law that they cannot be
reconciled and made to stand together.29 There is nothing
in R.A. No. 4136 that is inconsistent and incapable of
reconciliation.
Thus, the rule remains the same: a sale, lease, or
financial lease, for that matter, that is not registered with
the Land Transportation Office, still does not bind third
persons who are aggrieved in tortious incidents, for the
latter need only to rely on the public registration of a motor
vehicle as conclusive evidence of ownership.30 A lease such
as the one involved in the instant case is an encumbrance
in contemplation of law, which needs to be registered in
order for it to bind third parties.31 Under this policy, the
evil sought to be avoided is the exacerbation of the
suffering of victims of tragic vehicular accidents in not

being able to identify a guilty party. A contrary ruling will

not serve the ends of justice. The failure to register a lease,
sale, transfer or encumbrance, should not benefit the
parties responsible, to the prejudice of innocent victims.
The non-registration of the lease contract between
petitioner and its lessee precludes the former from enjoying
the benefits under Section 12 of R.A. No. 8556.
This ruling may appear too severe and unpalatable to
leasing and financing companies, but the Court believes
that petitioner and other companies so situated are not
entirely
_______________
29 Agujetas v. Court of Appeals, 329 Phil. 721, 745; 261 SCRA 17
(1996).
30 First Malayan Leasing and Finance Corp. v. Court of Appeals,
supra note 17, at p. 664.
31 Roxas v. Court of Appeals, G.R. No. 92245, June 26, 1991, 198
SCRA 541, 546; also Blacks Law Dictionary (abridged 5th edition)
defines an encumbrance as any right to, or interest in, land which may
subsist in another to diminution of its value, but consistent with the
passing of the fee. A claim, lien, charge, or liability attached to and
binding real property; e.g., a mortgage; judgment lien; mechanics lien;
lease; security interest; easement of right of way; accrued and unpaid
taxes. (Emphasis supplied.)
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PCI Leasing and Finance, Inc. vs. UCPB General
Insurance Co., Inc.

left without recourse. They may resort to third-party

complaints against their lessees or whoever are the actual
operators of their vehicles. In the case at bar, there is, in
fact, a provision in the lease contract between petitioner
and SUGECO to the effect that the latter shall indemnify
and hold the former free and harmless from any liabilities,
damages, suits, claims or judgments arising from the
latters use of the motor vehicle.32 Whether petitioner
would act against SUGECO based on this provision is its
own option.
The burden of registration of the lease contract is
minuscule compared to the chaos that may result if

registered owners or operators of vehicles are freed from

such responsibility. Petitioner pays the price for its failure
to obey the law on compulsory registration of motor
vehicles for registration is a pre-requisite for any person to
even enjoy the privilege of putting a vehicle on public
roads.
WHEREFORE, the petition is DENIED. The Decision
dated December 12, 2003 and Resolution dated February
18, 2004 of the Court of Appeals are AFFIRMED.
Costs against petitioner.
SO ORDERED.
Ynares-Santiago
(Chairperson),
Nachura and Reyes, JJ., concur.

Chico-Nazario,

Petition denied, judgment and resolution affirmed.

Note.In case of injury to a passenger due to the
negligence of the driver of the bus on which he was riding
and of the driver of another vehicle, the drivers as well as
the owners of the two vehicles are jointly and severally
liable for damages. (Tiu vs. Arriesgado, 437 SCRA 426
[2004])
o0o
_______________
32 Exhibit 1-A, Records, p. 359.

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