30 September 1987, 154 SCRA 388


“Defendant Bienvenido Gelisan is the owner of a freight truck|defendant Bienvenido Gelisan and Roberto Espiritu entered into a contract under which Espiritu hired the same freight truck of Gelisan for the purpose of hauling rice, sugar, flour and fertilizer at an agreed price of P18.00 per trip within the limits of the City of Manila provided the loads shall not exceed 200 sacks. It is also agreed that Espiritu shall hear and pay all losses and damages attending the carriage of the goods to be hauled by him. The truck was taken by a driver of Roberto Espiritu. Plaintiff Benito Alday, a trucking operator, and who owns about 15 freight trucks, had known the defendant Roberto Espiritu since 1948 as a truck operator. Plaintiff had a contract to haul the fertilizers of the Atlas Fertilizer Corporation from Pier 4, North Harbor, to its Warehouse in Mandaluyong Alday met Espiritu at the gate of Pier 4 and the latter offered the use of his truck with the driver and helper at 9 centavos per bag of fertilizer. The offer was accepted by plaintiff Alday. The fertilizer was delivered to the driver and helper of Espiritu with the necessary way bill receipts, Exhibits A and B. Espiritu, however, did not deliver the fertilizer to the Atlas Fertilizer bodega at Mandaluyong. The signatures appearing in the way bill receipts. Espiritu, however, did not deliver the fertilizer to the Atlas Fertilizer bodega at Mandaluyong. The signatures appearing in the way bill receipts of the Alday Transportation admittedly not the signature of any representative or employee of the Atlas Fertilizer Corporation. Roberto Espiritu could not be found, and plaintiff reported the loss to the Manila Police Department.

Subsequently, plaintiff Alday saw the truck in question on Sto. Cristo St. and he notified the Manila Police Department, and it was impounded by the police, it was claimed by Bienvenido Gelisan from the Police Department after he had been notified by his employees that the truck had been impounded by the police; but as he could not produce at the time the registration papers, the police would not release the truck to Gelisan. As a result of the impounding of the truck according to Gelisan, . . . and that for the release of the truck he paid the premium of P300 to the surety company. Benito Alday was compelled to pay the value of the 400 bags of fertilizer.

Petitioner’s Contention:
Bienvenido Gelisan, upon the other hand, disowned responsibility. He claimed that he had no contractual relations with the plaintiff Benito Alday as regards the hauling and/or delivery of the 400 bags of fertilizer mentioned in the complaint; that the alleged misappropriation or non-delivery by defendant Roberto Espiritu of plaintiff’s 400 bags of fertilizer, was entirely beyond his (Gelisan’s) control and knowledge, and which fact became known to him, for the first time when his freight truck was impounded by the Manila Police Department, at the instance of the plaintiff; and that in his written contract of hire with Roberto Espiritu, it was expressly provided that the latter will bear and pay all losses and damages attending the carriage of goods to be hauled by said Roberto Espiritu.


Whether or not the Court of Appeals erred in ordering Bienvenido Gelisan to pay jointly and severally with Roberto Espiritu, the respondent, Benito Alday.


The Court has invariably held in several decisions that the registered owner of a public service vehicle is responsible for damages that may arise from consequences incident to its operation or that may be caused to any of the passengers therein. The claim of the petitioner that he is not liable in view of the lease contract executed by and between him and Roberto Espiritu which exempts him from liability to third persons, cannot be sustained because it appears that the lease contract, adverted to, had not been approved by the Public Service Commission. It is settled in our jurisprudence that if the property covered by a franchise is transferred or leased to another without obtaining the requisite approval, the transfer is not binding upon the public and third persons.

*Case digest by Lindsay Arra Calapiz, LLB-IV, Andres Bonifacio Law School, SY 2018-2019