GR 125817; (January, 2002) (Digest)
G.R. No. 125817 ; January 16, 2002
Abelardo Lim and Esmadito Gunnaban, petitioners, vs. Court of Appeals and Donato H. Gonzales, respondents.
FACTS
Private respondent Donato Gonzales purchased a passenger jeepney from Gomercino Vallarta, the holder of the Certificate of Public Convenience (CPC). Gonzales continued to operate the vehicle as a public utility under Vallarta’s name, employing the kabit system, without transferring the registration or securing his own CPC. In 1990, the jeepney collided with a truck owned by petitioner Abelardo Lim and driven by co-petitioner Esmadito Gunnaban, who admitted fault due to brake failure. Lim compensated other victims but negotiations with Gonzales for the jeepney’s repair failed. Gonzales filed a complaint for damages. Petitioners contested his legal standing, arguing Vallarta, as the registered owner/operator, was the real party in interest.
ISSUE
Does a purchaser and operator of a public utility vehicle under the kabit system have the legal personality to sue for damages arising from a collision, despite not being the registered owner under the CPC?
RULING
Yes. The Supreme Court affirmed the lower courts’ decisions, holding that Gonzales, as the actual owner and operator, is the real party in interest entitled to sue for damages. The Court clarified that the rule requiring the registered owner to be joined in suits involving a kabit arrangement is primarily for the protection of the riding public in cases of quasi-delicts where passengers or third parties are injured. This policy is not intended to shield a tortfeasor from liability when the actual owner of the damaged property seeks redress. The cause of action here is a simple action for damages based on a tort (culpa aquiliana), where the fundamental question is who suffered the direct injury. Gonzales, who owned the jeepney and bore the financial loss from its destruction, sustained that direct injury. The Court emphasized that allowing the suit prevents the wrongdoer from escaping liability through a technicality and does not sanction the illegal kabit system, as the registered owner Vallarta testified he had no claim over the vehicle. The award of damages was thus proper, with modifications to the imposed interest rates.