Francisco Tatad vs Jesus Garcia, Jr.

Facts: In 1989, the government planned

to build a railway transit line along
EDSA. No bidding was made but certain
corporations were invited to prequalify.
The only corporation to qualify was the
EDSA LRT Consortium which was
obviously formed for this particular
undertaking. An agreement was then
made between the government, through
the Department of Transportation and
Communication (DOTC), and EDSA
LRT Consortium. The agreement was
based on the Build-Operate-Transfer
scheme provided for by law (RA 6957,
amended by RA 7718). Under the
agreement, EDSA LRT Consortium shall
build the facilities, i.e., railways, and
shall supply the train cabs. Every phase
that is completed shall be turned over to
the DOTC and the latter shall pay rent
for the same for 25 years. By the end of
25 years, it was projected that the
government shall have fully paid EDSA
LRT Consortium. Thereafter, EDSA LRT
Consortium shall sell the facilities to the
government for $1.00.
However, Senators Francisco Tatad,
John Osmea, and Rodolfo Biazon
opposed the implementation of said
agreement as they averred that EDSA
LRT Consortium is a foreign corporation
as it was organized under Hongkong
laws; that as such, it cannot own a
public utility such as the EDSA railway
transit because this falls under the
nationalized areas of activities. The
petition was filed against Jesus Garcia,
Jr. in his capacity as DOTC Secretary.

ISSUE: Whether or not the petition shall

prosper.
HELD: No. The Supreme Court made a
clarification. The SC ruled that EDSA
LRT Consortium, under the agreement,
does not and will not become the owner
of a public utility hence, the question of
its nationality is misplaced. It is true that
a foreign corporation cannot own a
public utility but in this case what EDSA
LRT Consortium will be owning are the
facilities that it will be building for the
EDSA railway project. There is no
prohibition against a foreign corporation
to own facilities used for a public utility.
Further, it cannot be said that EDSA
LRT Consortium will be the one
operating the public utility for it will be
DOTC that will operate the railway
transit. DOTC will be the one exacting
fees from the people for the use of the
railway and from the proceeds, it shall
be paying the rent due to EDSA LRT
Consortium. All that EDSA LRT
Consortium has to do is to build the
facilities and receive rent from the use
thereof by the government for 25 years
it will not operate the railway transit.
Although EDSA LRT Consortium is a
corporation formed for the purpose of
building a public utility it does not
automatically mean that it is operating a
public
utility.
The
moment
for
determining the requisite Filipino
nationality is when the entity applies for
a franchise, certificate or any other form
of authorization for that purpose.

Equitable Leasing Corporation vs

Suyom

vehicle has been fully paid by Edwin

Lim.

Facts:On July 17, 1994, a Fuso Road

Tractor driven by Raul Tutor rammed
into the house cum store of Myrna
Tamayo in Tondo, Manila. A portion of
the house was destroyed which caused
death and injury. Tutor was charged with
and later convicted of reckless
imprudence
resulting
in
multiple
homicide and multiple physical injuries.

Lim completed the payments to cover

the full price of the tractor. Thus, a Deed
of Sale over the tractor was executed by
petitioner in favor of Ecatine represented
by Edwin Lim. However, the Deed was
not registered with the LTO.

Upon verification with the Land

Transportation Office, it was known that
the registered owner of the tractor was
Equitable Leasing Corporation/leased to
Edwin Lim. On April 15, 1995,
respondents filed against Raul Tutor,
Ecatine Corporation (Ecatine) and
Equitable
Leasing
Corporation
(Equitable) a Complaint for damages.
The petitioner alleged that the vehicle
had already been sold to Ecatine and
that the former was no longer in
possession and control thereof at the
time of the incident. It also claimed that
Tutor was an employee, not of
Equitable, but of Ecatine.
Issue:Whether or not the petitioner was
liable for damages based on quasi delict
for the negligent acts.
Held:The Lease Agreement between
petitioner and Edwin Lim stipulated that
it is the intention of the parties to enter
into
a
finance
lease
agreement. Ownership of the subject
tractor was to be registered in the name
of petitioner, until the value of the

Petitioner is liable for the deaths and the

injuries complained of, because it was
the registered owner of the tractor at the
time of the accident.The Court has
consistently ruled 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.
Since Equitable remained the registered
owner of the tractor, it could not escape
primary liability for the deaths and the
injuries arising from the negligence of
the driver.
Ma.
Luisa
Benedicto
v. IAC,
Greenhills Wood Industries Co., Inc.
FACTS: Greenhills Wood Industries bound itself to sell and deliver to Blue
Star Mahogany, Inc.100,000 board feet
of sawn lumber with the understanding
that an initial delivery would bemade.
Greenhills resident manager in Maddela,
Dominador Cruz, contracted Virgilio
Licuden,
thedriver
of a cargo
truck, to transport its sawn lumber to the
consignee Blue Star inValenzuela,
Bulacan; this cargo truck was registered
in the name of Ma. Luisa Benedicto,the
proprietor of Macoven Trucking, a

business enterprise engaged in hauling

freight
the Manager of Blue Star called up
Greenhills president informing him that
the sawnlumber on board the subject
cargo
truck
had not
yet arrived
in Valenzuela, Bulacan;because of the
delay in delivery Blue Star was
constrained to look for other suppliers
Greenhills filed criminal case against dri
ver Licuden for estafa; and a civil case f
orrecovery of the value of the lost sawn
lumber plus damages against Benedicto
Benedicto denied liability as she was a
complete stranger to the contract of
carriage, thesubject truck having been
earlier sold by her to Benjamin Tee; but
the truck had remainedregistered in her
name because Tee have not yet fully
paid the amount of the truck; bethat as it
may, Tee had been operating the said
truck in Central Luzon from that
andLicuden was Tees employee and
not hers
ISSUE: WON Benedicto, being the
registered owner of the carrier, should
be held liable forthe value of the
undelivered or lost sawn lumber
HELD: Yes. The registered owner liable
for consequences flowing from the
operations of thecarrier, even though the
specific vehicle involved may already
have
been
transferred
toanother person. This doctrine rests up
on the principle that in dealing with vehic
lesregistered under the
Public Service Law, the
public has the

right to assume that theregistered owner

is the actual or lawful owner thereof It
would
be
very
difficult
and
oftenimpossible as a practical matter, for
members of the general public to
enforce the rights of action that they
may have for injuries inflicted by the
vehicles being negligently operated
if they should be required to prove who
the actual owner is. Greenhills is not
required to gobeyond the vehicles
certificate of registration to ascertain the
owner of the carrier.
BA FINANCE
CORPORATION
CAGR 94566, July 1992

v.

FACTS:On December 17, 1980, Renato

Gaytano, doing
business
under the
name Gebbs International, applied for
and was granted a loan with respondent
Traders Royal Banking the amount of
P60,000.00. As security for the payment
of said loan, the Gaytano spouses exec
uted a deed of surety ship whereby they
agreed
to
pay
jointly
and
severallyto respondent bank the amount
of the loan includinginterests,
penalty
and other bank charges. In a letter dated
December 5, 1980 addressed to
respondent bank, Philip Wong as credit
administrator of BAFinance Corporation
for and in behalf of the latter undertook
to guarantee the loan of the Gaytano
spouses. Partial payments were made
on the loan leaving an unpaid balance in
the amount of P85, 807.25. Since the
Gaytano
pouses refused
to pay
their obligation, respondent bank filed
with the trial court complaint for sum of
money

againstthe Gaytano spouses and petitio

ner corporation asalternative
defendant. The Gaytano spouses did
not
present
evidence
fortheir defense. Petitioner Corporation,
on the other hand,
raised the defense of lack of authority of
its creditadministrator to bind the
corporation. On December 12, 1988, the
trial court rendered decision in favor of
plaintiff and against defendants/Gaytano
spouses, ordering the latter to jointly and
severally
pay
theplaintiff.Not satisfied with the decision
, respondent bankappealed with the
Court of Appeals. On March 13, 1990,
respondent appellate court rendered
judgment modifying the decision of the
trial court. Hence, this petition.
ISSUE:Whether the letter of guaranty is
ultra vires and thusinvalid and/or
unenforceable.
ACCORDINGLY, the
petition
is GRANTED and the assaileddecision
of the respondent appellate court dated
March 13,1990 is hereby REVERSED
and SET ASIDE and another one
isrendered dismissing the complaint for
sum of money againstBA Finance
Corporation. SO ORDERED
Angeles Jardin, et al. vs. NLRC and
PHILJAMA INTERNATIONAL, INC.
FACTS: Petitioners were the drivers of a
taxi owned by Philjama International Inc.
under the boundary system. Petitioners
decided to form a labor union to protect

their rights and interests against illegal

deduction of private respondent for the
washing of taxi units. Upon the
knowledge of the private respondent
about the plan of the petitioners, He
refused to let them drive the taxi when
they
reported
to
work.
The petitioners bring
the
complaint
before the court against private
respondent.
ISSUE: Whether or not employeremployee
relationship
exists.
HELD:No relationship exists, Under the
boundary system the driver takes out his
unit and pays the owner/operator a fee
commonly called "boundary" for the use
of unit. The four fold test must apply in
determining the employer-employee
relationship,
these
are:
1) the selection and engagement of the
employee;
2)
the
payment
of
wages;
3) the power of dismissal; and
4) the employer's power to control the
employee with respect to the means and
methods
by
which
the
work
is
to
be
accomplished.
The Supreme Court stresses that the
fourth requisites are the most important
that
the
others
may
be
even disregarded Under the control
test, an employer-employee relationship
exists if the "employer" has reserved the
right to control the "employee" not only
as to the result of the work done but also
as to the means and methods by which
the same is to be accomplished.
Otherwise, no such relation exists.
In the case at bar, it is clear that they

are free to choose whatever manner

they conduct their trade and beyond the
physical control of the owner/operator;
they themselves determine the amount
of revenue they would want to earn in
driving a taxi. But the SC decided that it
is not sufficient to withdraw the
relationship between them from that of

employer-employee. Hence, petitioners

are undoubtedly employees of private
respondent because as taxi drivers they
perform activities which are usually
necessary or desirable in the usual
business of trade of their employer, thus
the
petitioners
are
entitled
to
reinstatement and other benefits loss.