G.R. No.

186312
June 29, 2010
SPOUSES DANTE CRUZ and LEONORA CRUZ, Petitioners,
vs.
SUN HOLIDAYS, INC., Respondent.
Facts: Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint on January 25, 2001 against
Sun Holidays, Inc. (respondent) with the Regional Trial Court (RTC) of Pasig City for damages arising from
the death of their son Ruelito C. Cruz (Ruelito) who perished with his wife on September 11, 2000 on board
the boat M/B Coco Beach III that capsized en route to Batangas from Puerto Galera, Oriental Mindoro
where the couple had stayed at Coco Beach Island Resort (Resort) owned and operated by respondent.
On September 11, 2000, as it was still windy, Matute and 25 other Resort guests including
petitioners son and his wife trekked to the other side of the Coco Beach mountain that was sheltered from
the wind where they boarded M/B Coco Beach III, which was to ferry them to Batangas.
Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto Galera and into
the open seas, the rain and wind got stronger, causing the boat to tilt from side to side and the captain to
step forward to the front, leaving the wheel to one of the crew members.
The waves got more unwieldy. After getting hit by two big waves which came one after the other,
M/B Coco Beach III capsized putting all passengers underwater. The passengers, who had put on their life
jackets, struggled to get out of the boat. Upon seeing the captain, Matute and the other passengers who
reached the surface asked him what they could do to save the people who were still trapped under the
boat. The captain replied "Iligtas niyo na lang ang sarili niyo" (Just save yourselves).
Help came after about 45 minutes when two boats owned by Asia Divers in Sabang, Puerto Galera
passed by the capsized M/B Coco Beach III. Boarded on those two boats were 22 persons, consisting of
18 passengers and four crew members, who were brought to Pisa Island. Eight passengers, including
petitioners son and his wife, died during the incident.
Issue: Whether or not respondent is a common carrier.
Held: The Civil Code defines "common carriers" in the following terms:
Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of
carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their
services to the public.

The
above
article
makes no
distinction between one
whose principal
business activity is the carrying of persons or goods or both, and one who does such carrying only as an
ancillary activity (in local idiom, as "a sideline"). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a regular or scheduled basis and one
offering such service on
an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier
offering its services to the "general public," i.e., the general community or
population, and one who offers services or solicits business only from a narrow segment of the general
population. We think that Article 1733 deliberately refrained from making such
distinctions.
Indeed, respondent is a common carrier. Its ferry services are so intertwined with its main business
as to be properly considered ancillary thereto. The constancy of respondents ferry services in its resort
operations is underscored by its having its own Coco Beach boats. And the tour packages it offers, which
include the ferry services, may be availed of by anyone who can afford to pay the same. These services
are thus available to the public.
That respondent does not charge a separate fee or fare for its ferry services is of no moment. It
would be imprudent to suppose that it provides said services at a loss. The Court is aware of the practice
of beach resort operators offering tour packages to factor the transportation fee in arriving at the tour
package price. That guests who opt not to avail of respondents ferry services pay the same amount is
likewise inconsequential. These guests may only be deemed to have overpaid.

A.F. SANCHEZ BROKERAGE INC., v. THE HON. COURT OF APPEALS and FGU INSURANCE
CORPORATION
447 SCRA 427 (2004), THIRD DIVISION (Carpio Morales, J.)
A common carrier is liable to the resulting damage to the goods if the improper packaging is
known to the carrier or his employees or is apparent upon ordinary observation, but he
nevertheless accepts the same without protest or exception.
FACTS: Respondent FGU Insurance Corporation (FGU) brought an action for reimbursement against
petitioner A.F. Sanchez Brokerage Inc. (Sanchez Brokerage) to collect the amount paid by the former
to Wyeth-Suaco Laboratories Inc. (Wyeth-Suaco) as insurance payment for the goods delivered in
bad condition.
A.F. Brokerage refused to admit liability for the damaged goods which it delivered from Philippines
Skylanders, Inc. (PSI) to Wyeth-Suaco as it maintained that the damage was due to improper and
insufficient export packaging, discovered when the sealed containers were opened outside the PSI
warehouse.
The Regional Trial Court of Makati dismissed the said complaint; however, the decision was
subsequently reversed and set aside by the Court of Appeals, finding that Sanchez Brokerage is liable
for the carriage of cargo as a common carrier by definition of the New Civil Code.
ISSUE: Whether or not the FGU Insurance is liable for the delivery of the damaged goods
HELD: As defined under Article 1732 of the Civil Code, common carriers are persons, corporations,
firms or associations engaged in the business of carrying or transporting passengers or goods or both
by land, water or air for compensation, offering their services to the public. It does not distinguish
between one whose principal business activity is the carrying of goods and one who does such
carrying only as an ancillary activity. The contention therefore of Sanchez Brokerage that it is not a
common carrier but a customs broker whose principal function is to prepare the correct customs

declaration and proper shipping documents as required by law is bereft of merit. It suffices that
petitioner undertakes to deliver the goods for pecuniary consideration.
In this light, Sanchez Brokerage as a common carrier is mandated to observe, under Article 1733 of
the Civil Code, extraordinary diligence in the vigilance over the goods it transports according to all the
circumstances of each case. In the event that the goods are lost, destroyed or deteriorated, it is
presumed to have been at fault or to have acted negligently, unless it proves that it observed
extraordinary diligence.
The concept of extra-ordinary diligence was explained in Compania Maritima v. Court of Appeals.
The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common
carrier to know and to follow the required precaution for avoiding damage to or destruction of the goods
entrusted to it for sale, carriage and delivery. It requires common carriers to render service with the
greatest skill and foresight and to use all reasonable means to ascertain the nature and
characteristics of goods tendered for shipment and to exercise due care in the handling and storage
including such methods as their nature requires.
It was established that Sanchez Brokerage received the cargoes from the PSI warehouse in good
order and condition and that upon delivery by petitioner some of the cargoes were found to be in bad
order as noted in the Delivery Receipt and as indicated in the Survey and Destruction Report.
While paragraph no. 4 of Article 1734 of the Civil Code exempts a common carrier from liability if the
loss or damage is due to the character of the goods or defects in the packaging or in the containers,
the rule is that if the improper packaging is known to the carrier or his employees or is apparent upon
ordinary observation, but he nevertheless accepts the same without protest or exception
notwithstanding such condition, he is not relieved of liability for the resulting damage. If the claim of
Sanchez Brokerage that some of the cartons were already damaged upon delivery to it were true, then
it should naturally have received the cargo under protest or with reservation duly noted on the receipt
issued by PSI but it made no such protest or reservation.
Crisostomo vs. CA
G.R. No. 138334 August 25, 2003
FACTS:
In May 1991, petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel and Tours
International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed
Jewels of Europe. The package tour included the countries of England, Holland, Germany, Austria,
Liechstenstein, Switzerland and France at a total cost of P74,322.70.Petitioner was given a 5% discount on the
amount, which included airfare, and the booking fee was also waived because petitioners niece, Meriam
Menor, was respondent companys ticketing manager.
Pursuant to said contract, Menor went to her aunts residence on June 12, 1991 a Wednesday to deliver
petitioners travel documents and plane tickets.Petitioner, in turn, gave Menor the full payment for the
package tour.Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on Saturday,two
hours before her flight on board British Airways.
Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the flight
for the first leg of her journey from Manila to Hongkong. To petitioners dismay, she discovered that the flight
she was supposed to take had already departed the previous day.She learned that her plane ticket was for
the flight scheduled on June 14, 1991. She thus called up Menor to complain.
Subsequently, Menor prevailed upon petitioner to take another tour the British Pageant which included
England, Scotland and Wales in its itinerary. For this tour package, petitioner was asked anew to pay

US$785.00 or P20,881.00 (at the then prevailing exchange rate of P26.60). She gave respondent US$300 or
P7,980.00 as partial payment and commenced the trip in July 1991.
Upon petitioners return from Europe, she demanded from respondent the reimbursement of P61,421.70,
representing the difference between the sum she paid for Jewels of Europe and the amount she owed
respondent for the British Pageant tour. Despite several demands, respondent company refused to
reimburse the amount, contending that the same was non-refundable.Petitioner was thus constrained to file
a complaint against respondent for breach of contract of carriage and damages, which was docketed as
Civil Case No. 92-133 and raffled to Branch 59 of the Regional Trial Court of Makati City.
After due proceedings, the trial court rendered a decision in favor of Estela Crisostomo.
But it was reversed by the Court of Appeals. Hence, this petition.
ISSUE:
Is the Caravan Travel and Tours liable for reimbursement and damages?
HELD: Petition DENIED.
By definition, a contract of carriage or transportation is one whereby a certain person or association of
persons obligate themselves to transport persons, things, or news from one place to another for a fixed
price.Such person or association of persons are regarded as carriers and are classified as private or special
carriers and common or public carriers.A common carrier is defined under Article 1732 of the Civil Code as
persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or
goods or both, by land, water or air, for compensation, offering their services to the public.
It is obvious from the above definition that respondent is not an entity engaged in the business of transporting
either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not
undertake to transport petitioner from one place to another since its covenant with its customers is simply to
make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets
and facilitating travel permits or visas as well as booking customers for tours.
While petitioner concededly bought her plane ticket through the efforts of respondent company, this does
not mean that the latter ipso facto is a common carrier. At most, respondent acted merely as an agent of
the airline, with whom petitioner ultimately contracted for her carriage to Europe. Respondents obligation
to petitioner in this regard was simply to see to it that petitioner was properly booked with the airline for the
appointed date and time. Her transport to the place of destination, meanwhile, pertained directly to the
airline.
The object of petitioners contractual relation with respondent is the latters service of arranging and
facilitating petitioners booking, ticketing and accommodation in the package tour. In contrast, the object
of a contract of carriage is the transportation of passengers or goods. It is in this sense that the contract
between the parties in this case was an ordinary one for services and not one of carriage. Petitioners
submission is premised on a wrong assumption.It is thus not bound under the law to observe extraordinary
diligence in the performance of its obligation, as petitioner claims.
Since the contract between the parties is an ordinary one for services, the standard of care required of
respondent is that of a good father of a family under Article 1173 of the Civil Code.This connotes reasonable
care consistent with that which an ordinarily prudent person would have observed when confronted with a
similar situation. The test to determine whether negligence attended the performance of an obligation is: did
the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily
prudent person would have used in the same situation?If not, then he is guilty of negligence.

we do not agree with the finding of the lower court that Menors negligence concurred with the negligence

of petitioner and resultantly caused damage to the latter. Contrary to petitioners claim, the evidence on
record shows that respondent exercised due diligence in performing its obligations under the contract and
followed standard procedure in rendering its services to petitioner. As correctly observed by the lower court,
the plane ticket. issued to petitioner clearly reflected the departure date and time, contrary to petitioners

contention. The travel documents, consisting of the tour itinerary, vouchers and instructions, were likewise
delivered to petitioner two days prior to the trip. Respondent also properly booked petitioner for the tour,
prepared the necessary documents and procured the plane tickets. It arranged petitioners hotel
accommodation as well as food, land transfers and sightseeing excursions, in accordance with its avowed
undertaking. Therefore, it is clear that respondent performed its prestation under the contract as well as
everything else that was essential to book petitioner for the tour.
Hence, petitioner cannot recover and must bear her own damage.
1.
2.
3.

Distinction from towage, arrester and stevedoring

Governing Laws
Registered Owner Rule and Kabit System

A. OBLIGATIONS OF PARTIES AND DEFENSES

1. Duties of Common Carrier

THIRD DIVISION

[G.R. No. 144274. September 20, 2004]

NOSTRADAMUS VILLANUEVA petitioner, vs. PRISCILLA R. DOMINGO

and LEANDRO LUIS R. DOMINGO, respondents.
DECISION
CORONA, J.:

This is a petition to review the decision of the Court of Appeals in CA-G.R.

CV No. 52203 affirming in turn the decision of the trial court finding petitioner
liable to respondent for damages. The dispositive portion read:
[1]

WHEREFORE, the appealed decision is hereby AFFIRMED except the award of

attorneys fees including appearance fees which is DELETED.
SO ORDERED.

[2]

The facts of the case, as summarized by the Court of Appeals, are as

follows:

[Respondent] Priscilla R. Domingo is the registered owner of a silver Mitsubishi

Lancer Car model 1980 bearing plate No. NDW 781 91 with [co-respondent] Leandro
Luis R. Domingo as authorized driver. [Petitioner] Nostradamus Villanueva was then
the registered owner of a green Mitsubishi Lancer bearing Plate No. PHK 201 91.
On 22 October 1991 at about 9:45 in the evening, following a green traffic light,
[respondent] Priscilla Domingos silver Lancer car with Plate No. NDW 781 91 then
driven by [co-respondent] Leandro Luis R. Domingo was cruising along the middle
lane of South Superhighway at moderate speed from north to south. Suddenly, a green
Mitsubishi Lancer with plate No. PHK 201 91 driven by Renato Dela Cruz Ocfemia
darted from Vito Cruz Street towards the South Superhighway directly into the path of
NDW 781 91 thereby hitting and bumping its left front portion. As a result of the
impact, NDW 781 91 hit two (2) parked vehicles at the roadside, the second hitting
another parked car in front of it.
Per Traffic Accident Report prepared by Traffic Investigator Pfc. Patrocinio N. Acido,
Renato dela Cruz Ocfemia was driving with expired license and positive for alcoholic
breath. Hence, Manila Assistant City Prosecutor Oscar A. Pascua recommended the
filing of information for reckless imprudence resulting to (sic) damage to property and
physical injuries.
The original complaint was amended twice: first, impleading Auto Palace Car
Exchange as commercial agent and/or buyer-seller and second, impleading Albert
Jaucian as principal defendant doing business under the name and style of Auto
Palace Car Exchange.
Except for Ocfemia, all the defendants filed separate answers to the complaint.
[Petitioner] Nostradamus Villanueva claimed that he was no longer the owner of the
car at the time of the mishap because it was swapped with a Pajero owned by Albert
Jaucian/Auto Palace Car Exchange. For her part, Linda Gonzales declared that her
presence at the scene of the accident was upon the request of the actual owner of the
Mitsubishi Lancer (PHK 201 91) [Albert Jaucian] for whom she had been working as
agent/seller. On the other hand, Auto Palace Car Exchange represented by Albert
Jaucian claimed that he was not the registered owner of the car. Moreover, it could not
be held subsidiary liable as employer of Ocfemia because the latter was off-duty as
utility employee at the time of the incident. Neither was Ocfemia performing a duty
related to his employment.
[3]

After trial, the trial court found petitioner liable and ordered him to pay
respondent actual, moral and exemplary damages plus appearance and
attorneys fees:

WHEREFORE, judgment is hereby rendered for the plaintiffs, ordering Nostradamus

Villanueva to pay the amount of P99,580 as actual damages, P25,000.00 as moral
damages, P25,000.00 as exemplary damages and attorneys fees in the amount
of P10,000.00 plus appearance fees of P500.00 per hearing with legal interest counted
from the date of judgment. In conformity with the law on equity and in accordance
with the ruling in First Malayan Lending and Finance Corporation vs. Court of
Appeals (supra), Albert Jaucian is hereby ordered to indemnify Nostradamus
Villanueva for whatever amount the latter is hereby ordered to pay under the
judgment.
SO ORDERED.

[4]

The CA upheld the trial courts decision but deleted the award for
appearance and attorneys fees because the justification for the grant was not
stated in the body of the decision. Thus, this petition for review which raises a
singular issue:
MAY THE REGISTERED OWNER OF A MOTOR VEHICLE BE HELD LIABLE
FOR DAMAGES ARISING FROM A VEHICULAR ACCIDENT INVOLVING HIS
MOTOR VEHICLE WHILE BEING OPERATED BY THE EMPLOYEE OF ITS
BUYER WITHOUT THE LATTERS CONSENT AND KNOWLEDGE?
[5]

Yes.
We have consistently ruled that the registered owner of any vehicle is
directly and primarily responsible to the public and third persons while it is being
operated. The rationale behind such doctrine was explained way back in 1957
in Erezo vs. Jepte :
[6]

[7]

The principle upon which this doctrine is based is that in dealing with vehicles
registered under the Public Service Law, the public has the right to assume or presume
that the registered owner is the actual owner thereof, for it would be difficult for the
public to enforce the actions that they may have for injuries caused to them by the
vehicles being negligently operated if the public should be required to prove who the
actual owner is. How would the public or third persons know against whom to enforce
their rights in case of subsequent transfers of the vehicles? We do not imply by his
doctrine, however, that the registered owner may not recover whatever amount he had
paid by virtue of his liability to third persons from the person to whom he had actually
sold, assigned or conveyed the vehicle.
Under the same principle the registered owner of any vehicle, even if not used for a
public service, should primarily be responsible to the public or to third persons for

injuries caused the latter while the vehicle is being driven on the highways or streets.
The members of the Court are in agreement that the defendant-appellant should be
held liable to plaintiff-appellee for the injuries occasioned to the latter because of the
negligence of the driver, even if the defendant-appellant was no longer the owner of
the vehicle at the time of the damage because he had previously sold it to another.
What is the legal basis for his (defendant-appellants) liability?
There is a presumption that the owner of the guilty vehicle is the defendant-appellant
as he is the registered owner in the Motor Vehicles Office. Should he not be allowed
to prove the truth, that he had sold it to another and thus shift the responsibility for the
injury to the real and actual owner? The defendant holds the affirmative of this
proposition; the trial court held the negative.
The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that no vehicle
may be used or operated upon any public highway unless the same is property
registered. It has been stated that the system of licensing and the requirement that each
machine must carry a registration number, conspicuously displayed, is one of the
precautions taken to reduce the danger of injury to pedestrians and other travelers
from the careless management of automobiles. And to furnish a means of ascertaining
the identity of persons violating the laws and ordinances, regulating the speed and
operation of machines upon the highways (2 R.C.L. 1176). Not only are vehicles to be
registered and that no motor vehicles are to be used or operated without being
properly registered for the current year, but that dealers in motor vehicles shall furnish
thee Motor Vehicles Office a report showing the name and address of each purchaser
of motor vehicle during the previous month and the manufacturers serial number and
motor number. (Section 5(c), Act No. 3992, as amended.)
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 therefore 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:

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 share 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 pace a middleman between them and the public, and escape
liability by the manner in which they recompense servants. (King vs. Brenham
Automobile Co., Inc. 145 S.W. 278, 279.)
With the above policy in mind, the question that defendant-appellant 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 by 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 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 defendant-appellant 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.
[8]

Petitioner insists that he is not liable for damages since the driver of the
vehicle at the time of the accident was not an authorized driver of the new
(actual) owner of the vehicle. He claims that the ruling in First Malayan Leasing
and Finance Corporation vs. CA implies that to hold the registered owner liable
for damages, the driver of the vehicle must have been authorized, allowed and
permitted by its actual owner to operate and drive it. Thus, if the vehicle is driven
without the knowledge and consent of the actual owner, then the registered
owner cannot be held liable for damages.
[9]

He further argues that this was the underlying theory behind Duavit vs.
CA wherein the court absolved the registered owner from liability after finding
that the vehicle was virtually stolen from the owners garage by a person who
was neither authorized nor employed by the owner. Petitioner concludes that
the ruling in Duavit and not the one inFirst Malayan should be applicable to him.
[10]

Petitioners argument lacks merit. Whether the driver is authorized or not by

the actual owner is irrelevant to determining the liability of the registered owner
who the law holds primarily and directly responsible for any accident, injury or
death caused by the operation of the vehicle in the streets and highways. To
require the driver of the vehicle to be authorized by the actual owner before
the registered owner can be held accountable is to defeat the very purpose why
motor vehicle legislations are enacted in the first place.
Furthermore, there is nothing in First Malayan which even remotely
suggests that the driver must be authorized before the registered owner can be
held accountable. InFirst Malayan, the registered owner, First Malayan
Corporation, was held liable for damages arising from the accident even if the
vehicle involved was already owned by another party:
This Court has consistently ruled that regardless of who the actual owner is of a motor
vehicle might be, the registered owner is the operator of the same with respect to the
public and third persons, and as such, 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 merely as his agent (MYC-Agro-Industrial Corporation vs. Vda. de Caldo,

132 SCRA 10, citing Vargas vs. Langcay, 6 SCRA 174; Tamayo vs. Aquino, 105
Phil. 949).
We believe that it is immaterial whether or not the driver was actually employed by
the operator of record. It is even not necessary to prove who the actual owner of the
vehicle and the employer of the driver is. Granting that, in this case, the father of the
driver is the actual owner and that he is the actual employer, following the well-settled
principle that the operator of record continues to be the operator of the vehicle in
contemplation of law, as regards the public and third person, and as such is
responsible for the consequences incident to its operation, we must hold and consider
such owner-operator of record as the employer, in contemplation of law, of the driver.
And, to give effect to this policy of law as enunciated in the above cited decisions of
this Court, we must now extend the same and consider the actual operator and
employer as the agent of the operator of record.
[11]

Contrary to petitioners position, the First Malayan ruling is applicable to him

since the case involves the same set of facts the registered owner had
previously sold the vehicle to someone else and was being driven by an
employee of the new (actual) owner. Duavit is inapplicable since the vehicle
there was not transferred to another; the registered and the actual owner was
one and the same person. Besides, in Duavit, the defense of the registered
owner, Gilberto Duavit, was that the vehicle was practically stolen from his
garage by Oscar Sabiano, as affirmed by the latter:
Defendant Sabiano, in his testimony, categorically admitted that he took the jeep from
the garage of defendant Duavit without the consent and authority of the latter. He
testified further that Duavit even filed charges against him for the theft of the jeep but
which Duavit did not push through as his (Sabianos) parents apologized to Duavit on
his behalf.
[12]

As correctly pointed out by the CA, the Duavit ruling is not applicable to
petitioners case since the circumstance of unauthorized use was not present.
He in fact voluntarily delivered his car to Albert Jaucian as part of the
downpayment for a vehicle he purchased from Jaucian. Thus, he could not
claim that the vehicle was stolen from him since he voluntarily ceded
possession thereof to Jaucian. It was the latter, as the new (actual) owner, who
could have raised the defense of theft to prove that he was not liable for the
acts of his employee Ocfemia. Thus, there is no reason to apply
the Duavit ruling to this case.

The ruling in First Malayan has been reiterated in BA Finance Corporation

vs. CA and more recently in Aguilar, Sr. vs. Commercial Savings
Bank. In BA Finance, we held the registered owner liable even if, at the time
of the accident, the vehicle was leased by another party and was driven by the
lessees employee. In Aguilar, the registered owner-bank answered for
damages for the accident even if the vehicle was being driven by the VicePresident of the Bank in his private capacity and not as an officer of the Bank,
as claimed by the Bank. We find no reason to deviate from these decisions.
[13]

[14]

The main purpose of vehicle registration is the easy identification of the

owner who can be held responsible for any accident, damage or injury caused
by the vehicle. Easy identification prevents inconvenience and prejudice to a
third party injured by one who is unknown or unidentified. To allow a registered
owner to escape liability by claiming that the driver was not authorized by the
new (actual) owner results in the public detriment the law seeks to avoid.
Finally, the issue of whether or not the driver of the vehicle during the
accident was authorized is not at all relevant to determining the liability of the
registered owner. This must be so if we are to comply with the rationale and
principle behind the registration requirement under the motor vehicle law.
WHEREFORE, the petition is hereby DENIED. The January 26, 2000
decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Panganiban (Chairman) and Sandoval-Gutierrez, JJ., concur.
Carpio-Morales, J., on leave.