GR 167797; (June, 2015) (Digest)
G.R. No. 167797; June 15, 2015
METRO MANILA TRANSIT CORPORATION, Petitioner, vs. REYNALDO CUEVAS and JUNNEL CUEVAS, represented by REYNALDO CUEVAS, Respondents.
FACTS
Petitioner Metro Manila Transit Corporation (MMTC) and Mina’s Transit Corporation (Mina’s Transit) entered into an agreement to sell dated August 31, 1990, whereby Mina’s Transit bought several bus units from MMTC. MMTC retained ownership until certain conditions were met, but Mina’s Transit could operate the buses. On October 14, 1994, one of these buses (plate number NXM-449-TB-pil 94) hit and damaged a Honda motorcycle owned by Reynaldo Cuevas and driven by Junnel Cuevas. Respondents sued MMTC and Mina’s Transit for damages. MMTC, in its answer, denied liability, averring that Mina’s Transit was the actual operator and employer of the driver, and filed a cross-claim against Mina’s Transit based on a provision in the agreement to sell holding MMTC free from liability. Mina’s Transit filed a third-party complaint against its insurer, Perla Compania de Seguros, Inc. The Regional Trial Court (RTC) held MMTC and Mina’s Transit solidarily liable to respondents but did not rule on MMTC’s cross-claim. The Court of Appeals (CA) affirmed the RTC decision. MMTC appealed, arguing it should not be liable due to the agreement shielding it from liability.
ISSUE
Whether MMTC is liable for the injuries sustained by respondents despite the provision in the agreement to sell that shielded it from liability.
RULING
The Supreme Court partly granted the appeal. It affirmed MMTC’s liability to respondents based on the registered-owner rule. MMTC admitted it remained the registered owner of the bus at the time of the incident. Under this rule, the registered owner is held liable to third parties for damages arising from the vehicle’s operation, regardless of agreements transferring operational control, to ensure a definite person is responsible for accidents on public highways. Thus, MMTC, as registered owner, is primarily liable to respondents.
However, the Court modified the decision by granting MMTC’s cross-claim against Mina’s Transit. The RTC and CA erred in not ruling on the cross-claim, which was based on the agreement to sell requiring Mina’s Transit to hold MMTC free from liability. Since Mina’s Transit did not present controverting evidence, the cross-claim should be granted to prevent multiplicity of suits. Mina’s Transit was ordered to reimburse MMTC for any amounts paid to respondents pursuant to the RTC judgment.