G.R. No. 82318 May 18, 1989
GILBERTO M. DUAVIT, petitioner, vs. THE HON. COURT OF APPEALS and ANTONIO SARMIENTO, SR. & VIRGILIO CATUAR, respondents.

FACTS

On July 28, 1971, a jeep owned by Ruperto Catuar, driven by his son Virgilio and carrying passenger Antonio Sarmiento, Sr., was hit and bumped by another jeep on Ortigas Avenue. The collision caused significant damage to the Catuar jeep and serious physical injuries to Virgilio Catuar and Antonio Sarmiento, Sr. The other jeep was driven by Oscar Sabiniano and registered in the name of petitioner Gilberto Duavit.
At trial, Duavit admitted ownership of the jeep but denied any employer-employee relationship with Sabiniano. Sabiniano testified that he took the jeep from Duavit’s garage without the owner’s consent or authority. In fact, Duavit had initially filed theft charges against Sabiniano. The trial court found Sabiniano negligent but absolved Duavit from liability under Article 2180 of the Civil Code, ruling there was no employer-employee relationship and the vehicle was taken without consent. On appeal, the Court of Appeals reversed, holding Duavit jointly and severally liable with Sabiniano, applying a conclusive presumption that the registered owner is the employer of the driver.

ISSUE

Whether the registered owner of a motor vehicle can be held liable under Article 2180 of the Civil Code for damages arising from an accident caused by the driver’s negligence when the driver was not an employee and took the vehicle without the owner’s consent.

RULING

The Supreme Court ruled in favor of the petitioner, Duavit, and reinstated the trial court’s decision absolving him from liability. The Court clarified that the doctrine imposing liability on the registered owner as the employer “in contemplation of law” is not an absolute rule applicable to all factual circumstances. The legal logic is anchored on the principle that vicarious liability under Article 2180 is predicated on an employer-employee relationship or, in cases involving motor vehicles, on the owner’s consent to its use, which establishes a relationship akin to that of principal and agent.
The Court distinguished the present case from precedents like Vargas v. Langcay and Amar v. Soberano, which involved public utility vehicles or situations where the driver was authorized. Here, the vehicle was a private jeep, and the driver, Sabiniano, took it without consent—virtually stealing it. To hold an owner liable under such circumstances would be tantamount to making an owner answerable for the acts of a thief, which is absurd and unjust. The Court emphasized that every case must be judged on its specific facts, and where no employer-employee relationship exists and the vehicle was used without the slightest indicia of consent, the owner cannot be held vicariously liable. The appellate court thus erred in applying a conclusive presumption of employment.