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TRANSPORTATION | B2015

CASE DIGESTS

Perez v. Gutierrez
September 28, 1973
Castro, J.
Rañeses, Roberto Miguel
(Apologies for having lifted the ratio in toto. The case is short
enough as it is, and the Court ratiocinated quite efficiently.)

SUMMARY: Fe Perez filed a case for breach of contract of
carriage against Josefina Perez for the injuries she
sustained when the jeepney she was riding on, registered
under the name of the latter, met an accident. Josefine
claimed that, if there is any liability, it should be Panfilo
Alajar who should answer to such, being the actual owner
of the jeepney. The CFI found the driver of the jeepney
liable for reckless imprudence, as well as Panfilo for being
the actual owner. Fe appealed to the SC, saying that it
should be Josefina, being the registered owner, who should
be liable. The SC agreed with Fe, stating that the failure to
obtain the requisite approval from the PSC for the transfer
of the jeepney to Panfilo meant that such transfer was not
binding to the PSC and the supposed transferor remains
responsible under the franchise in relation to the PSC and
the public.
DOCTRINE: The law (Sec. 20 [g], Public Service Act) really
requires the approval of the Public Service Commission in
order that a franchise, or any privileges pertaining thereto,
may be sold or leased without infringing the certificate
issued to the grantee. x x x If the property covered by the
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 Commission and to the public
for the consequences incident to the operation of the
vehicle.
FACTS: Fe Perez, with nine co-teachers, was a passenger of
an AC jeepney when it, due to the reckless negligence of its

driver Leopoldo Cordero, met with an accident, resulting in
injuries to herself which required her hospitalization. The
vehicle was registered under the name of Josefina Gutierrez.
Fe subsequently filed a case for breach of contract of
carriage with the CFI of Davao against Josefina.
Josefina, for her part, averred that, assuming that there
should be any liability, Panfilo Alajar, the actual owner, by
purchase, of the said passenger jeepney when the accident
occurred and against whom she has filed a third-party
complaint, should be the one who is liable. The deed of sale
attached to the third party complaint clearly states that the
vendee assumes responsibility for any liability that may
airse from the operation of the jeepney.
Panfilo Alajar, for his part, alleged that:
1. Deed of sale is null and void because it has not been
registered with the Public Service Commission (PSC)
despite demands on Josefina.
2. The passenger jeepney remained under the control
of Josefina, who had been collecting rentals from him
for the use of the vehicle.
3. By express agreement, title remained with Josefina
pending approval of the sale by the PSC.
The court a quo found (a) Cordero guilty of reckless
imprudence and that (b) Panfilo owned and operated the
vehicle. Fe appealed the decision, arguing that the
registered owner of a motor vehicle should be the one held
liable for damages resulting from breach of contract of
carriage by a common carrier. In this case, that would be Fe
and not Panfilo.
ISSUES: WON Josefina Gutierrez should be the one liable for
damages instead of Panfilo Alajar.
RULING: YES. Josefina Gutierrez should be the one liable
for damages.
RATIO: The court cited Peralta v. Mangusang. It said:

on the basis of Art. 2180 of the NCC. Aquino reiterated the doctrine in Jepte: The question that is posed. The following considerations must be borne in mind in determining this question. or any privileges pertaining thereto. 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. The case of Tamayo v. is the one directly responsible for the accident and death. who operated the vehicle when the passenger died. assigned or conveyed the vehicle." In view of the doctrine laid down in the cited cases. may be sold or leased without infringing the certificate issued to the grantee. the grantee continues to be responsible under the franchise in relation to the Commission and to the public for the consequences incident to the operation of the vehicle. The reason is obvious. the judgment below is hereby modified in the sense that Josefina Gutierrez and Leopoldo Cordero are hereby adjudged directly and jointly and solidarily liable to Fe Perez for the sums adjudicated in the judgment below in her (Fe Perez') favor. the public has the right to assume or presume that the registered owner is the actual owner thereof. . he should in turn be made responsible to the registered owner for what the latter may have been adjudged to pay. one of them being the collision under consideration. Jepte. as quoted above. 2184 and Art. Costs against both the defendant-third party plaintiff-appellee Josefina Gutierrez and the third party defendant-appellee Panfilo Alajar. In operating the truck without transfer thereof having been approved by the Public Service Commission. in the damages recoverable by the heirs of the deceased passenger. is based upon the principle — . so that the latter may take proper safeguards to protect the interest of the public. is how should the holder of the certificate of public convenience Tamayo participate with his transferee operator Rayos. his responsibility to the public or to any passenger riding in the vehicle or truck must be direct. But as the transferee. hereby held answerable to Josefina Gutierrez for such amount as the latter may pay to Fe Perez in satisfaction of the judgment appealed from. in contemplation of law. Since a franchise is personal in nature any transfer or lease thereof should be submitted for approval of the Public Service Commission.. for any damages that he may cause the latter by his negligence. supra. if their liability is not that of joint tortfeasors in accordance with Article 2194 of the Civil Code. Leopoldo Cordero. the transfer is not binding on the Public Service Commission and. even though the vehicle had already been transferred to another. DISPOSITIVE: ACCORDINGLY. Jepte. 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. The Court also cited Erezo v. the transferee acted merely as agent of the registered owner and should be responsible to him (the registered owner). the Court held Josefina Gutierrez solidarily liable with the driver. 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 this doctrine. in turn.TRANSPORTATION | B2015 CASE DIGESTS The law (Sec. that in dealing with vehicles registered under the Public Service Law. however.. It follows that if the property covered by the franchise is transferred or leased to another without obtaining the requisite approval. for the reasons given in our decision in the case of Erezo vs. where it explained that the doctrine making the registered owner of a common carrier answerable to the public for negligence injuries to its passengers or third persons. therefore. Public Service Act) really requires the approval of the Public Service Commission in order that a franchise. As Tamayo is the registered owner of the truck. 20 [g]. while Panfilo Alajar is.