G.R. No. L-12634 and L-12720; May 29, 1959
JOSE G. TAMAYO, petitioner, vs. INOCENCIO AQUINO, ET AL., and SILVESTRE RAYOS, respondents. SILVESTRE RAYOS, petitioner, vs. JOSE G. TAMAYO and INOCENCIO AQUINO ET AL., respondents.

FACTS

Inocencio Aquino and his children filed an action for damages against Jose G. Tamayo, the holder of a certificate of public convenience to operate two trucks, due to the death of Inocencio’s wife, Epifania Gonzales. She died from injuries sustained when the truck (Plate No. TPU-735) she was riding in bumped a culvert in Bugallon, Pangasinan. Tamayo, upon being summoned, filed a third-party complaint against Silvestre Rayos, alleging he had sold the truck to Rayos before the accident. Rayos denied any such transaction. The Court of First Instance found that Tamayo was the registered owner under the certificate of public convenience and had sold the truck to Rayos in March 1953 but did not inform the Public Service Commission until June 30, 1953, one month after the accident. The court held Tamayo and Rayos jointly and severally liable, awarding plaintiffs P6,000 as compensatory damages and P5,000 as moral damages, and dismissed the third-party complaint. The Court of Appeals affirmed this decision.

ISSUE

1. Whether the registered owner of a public service vehicle (Tamayo) is liable for damages arising from an accident, even after selling the vehicle.
2. Whether the liability between the registered owner (Tamayo) and the transferee/actual operator (Rayos) is solidary as joint tortfeasors.
3. Whether moral damages were properly awarded.

RULING

1. Yes. The Supreme Court affirmed the doctrine from previous cases (Medina vs. Cresencia, Timbol vs. Osias, Montoya vs. Ignacio, Roque vs. Malibay, and Erezo vs. Jepte) that the registered owner of a public service vehicle is directly responsible to the public or any passenger for damages arising from its operation, even if the vehicle has been sold, leased, or transferred, unless the transfer has been approved by the Public Service Commission. This policy protects victims who rely on registration records to identify the responsible party.
2. No, their liability is not solidary under Article 2194 of the Civil Code. The action is for breach of contract of carriage (culpa contractual), not quasi-delict. Therefore, Tamayo and Rayos are not joint tortfeasors. However, as the registered owner, Tamayo has a direct responsibility to the plaintiffs. The transferee/operator, Rayos, who operated the vehicle without the Commission’s approval, is considered an agent of the registered owner and is directly responsible for the accident. Consequently, Rayos must indemnify Tamayo for any amount Tamayo is required to pay. The lower courts erred in dismissing the third-party complaint; it is the proper procedural remedy for Tamayo to seek reimbursement from Rayos.
3. No, the award of moral damages is deleted. Under Article 2220 of the Civil Code, moral damages in breach of contract cases are awarded only if the defendant acted fraudulently or in bad faith. The Court found no fraud or bad faith on the part of either Tamayo or Rayos. The violation of Public Service Commission rules by transferring without prior approval does not constitute the bad faith required by law. The immediate cause of the accident was the driver’s negligence, not deceit or fraudulent conduct by the defendants.
MODIFIED JUDGMENT:
Defendant-appellant Jose G. Tamayo is ordered to pay plaintiffs-appellees the sum of P6,000 as compensatory damages. Tamayo has the right to be indemnified by third-party defendant-appellant Silvestre Rayos for the entire amount he is ordered to pay. The award of P5,000 as moral damages is deleted. Costs are imposed against the appellants.