Equitable Leasing v.

Suyom
G.R. No. 143360, September 5, 2002
Panganiban, J.

Facts:
On July 17, 1994, Raul Tutor crashed the tractor he was driving into the house
of Myrna Tamayo in Tondo, Manila. As a result of the collision, a portion of
the house was destroyed, two kids were pinned to death under the engine of the
tractor, and two adults and two more kids were injured. Tutor was charged
with and later convicted of reckless imprudence resulting in multiple homicide
and multiple physical injuries. Upon verification with the LTO, the vehicle is
registered to Equitable Leasing (herein petitioner) and leased to Ecatine
represented by Edwin Lim. The aggrieved parties filed a complaint for damages
against Raul Tutor, Ecatine and the petitioner. On failing to locate and
summon the rest of the accused, only the petitioner was impleaded. The
petitioner alleged that the vehicle had already been sold to Ecatine, hence, is it
no longer in possession and control at the time of the incident; and Tutor was
an employee of Ecatine. Discounting the excuse of the petitioner, the RTC, as
affirmed by the Court of Appeals, ordered the petitioner to pay actual and
moral damages.

Issue:
Is the petitioner solidarily liable for actual and moral damages for the injuries
and damages caused by the negligence of the driver despite that the vehicle
may have been subject to an unregistered Deed of Sale in favor of another
person under quasi-delict?

Held:
Yes. The Court ruled that Equitable Leasing is solidarily liable for damages both
actual and moral damages under quasi-delict on the following grounds:
1. Equitable Leasing remained to be the registered owner at the time of the
accident insofar as the public and third parties are concerned because it
failed to register the motor vehicle with the LTO, in which case the
registered owner, regardless a subsequent deed of sale, is responsible for
damages or injuries caused on public highways;
2. Consequent to the failed registration, Equitable Leasing is liable for the
negligence of Raul Tutor, who is actually employed by the subsequent
buyer, as an employer for the purposes of the law on quasi-delict;
3. Having established the liability of the petitioner as the registered owner
of the vehicle and deemed employer of the negligent driver, there is
factual basis for the award of moral damages to alleviate the moral
suffering of the aggrieved parties.