Even if car already sold, registered owner liable

SUMMARY: If you are planning to sell or donate your car or any motor vehicle, make sure that you transfer its registration with the Land Transportation Authority (LTO) from your name to the buyer's or transferee's name. A deed of sale or donation is not enough.
Under Philippine laws, the registered owner of a motor vehicle whose operation causes injury to another is legally liable to the latter. In other words, even if you do not own the motor vehicle anymore, the victim of an accident involving that vehicle registered under your name can still sue you in court and make you liable under the "registered owner rule."

In simpler terms, the victim is given by law the choice to sue either the driver/new owner or the registered owner. Since you are the registered owner and you are easily identifiable as far as the victim is concerned, you are open to attack (legal attack, of course, in court) if the car (or any motor vehicle) involved is still registered under your name.

In the vernacular, hindi sapat na naibenta mo lang ang iyong sasakyan at hindi sapat na may kasulatan lang kayo. Kailangan mong ipalipat ang rehistro ng iyong sasakyan at alisin ito sa ilalim ng iyong pangalan para, kung may mangyari mang aksidente, hindi ikaw ang idedemanda.

According to the Supreme Court, the registered owner of a motor vehicle whose operation causes injury to another is legally liable to the latter. But it is error not to allow the registered owner to recover reimbursement from the actual and present owner by way of its cross-claim. (G.R. No. 167797)

It is well settled that in case of motor vehicle mishaps, the registered owner of the motor vehicle is considered as the employer of the tortfeasor-driver , and is made primarily liable for the tort committed by the latter under Article 2176, in relation with Article 2180, of the Civil Code.

In Equitable Leasing Corporation v. Suyom, we ruled that in so far as third persons are concerned, the registered owner of the motor vehicle is the employer of the negligent driver, and the actual employer is considered merely as an agent of such owner.

In that case involving Suyom, a tractor registered in the name of Equitable Leasing Corporation (Equitable) figured in an accident, killing and seriously injuring several persons. As part of its defense, Equitable claimed that the tractor was initially leased to Mr. Edwin Lim under a Lease Agreement, which agreement has been overtaken by a Deed of Sale entered into by Equitable and Ecatine Corporation (Ecatine). Equitable argued that it cannot be held liable for damages because the tractor had already been sold to Ecatine at the time of the accident and the negligent driver was not its employee but of Ecatine.

In upholding the liability of Equitable, as registered owner of the tractor, this Court said that "regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation."The Court further stated that "[i]n contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent." Thus, Equitable, as the registered owner of the tractor, was considered under the law on quasi delict to be the employer of the driver, Raul Tutor; Ecatine, Tutor’s actual employer, was deemed merely as an agent of Equitable.

The lesson here is clear. The seller of a motor vehicle, if he is prudent enough, should require (and, better, accompany) the buyer to transfer registration of said vehicle.