Initially he "attached" his jeepney to the franchise of Aling Lita. But then, one of the units of Aling Lita met an accident which resulted in the loss of many lives. Fearing that Aling Lita might eventually be held liable for the pending accident case and his jeep (which is registered in the name of Aling Lita on a kabit basis) might also be attached to answer for her liability, Mang Ambo decided to disconnect from Aling Lita’s franchise and reconnect it with Donato, another franchise owner of a jeepney line. So Mang Ambo asked Aling Lita to execute the Deed of Sale. He first transferred the jeepney in the name of his sister-in-law; and from his sister-in-law, to the new franchise owner, Mang Donato. Thereafter, Mang Ambo continued operating the jeepney using Mang Donato’s line. The driver pays Mang Ambo a daily "boundary" of P16.80 Unfortunately, one day, the driver met an accident. He hit the town judge and the latter’s wife while they were crossing the street which resulted in the death of the judge and injuries to his wife. So the wife and children sued the driver, Mang Donato, the franchise owner in whose name the jeep is registered, and Mang Ambo actual owner of the jeep. Mang Ambo denied liability claiming that he was not the registered owner thereof.
Was Mang Ambo correct?
No.
Mang Ambo is liable. While the jeepney is not registered in his name, he is the actual owner of the passenger vehicle. And the actual owner of a passenger jeep is solidarily liable with the registered franchise owner for damages. In fact the registered owner whose franchise is just being used has the right to be indemnified by the real or actual owner of the amount that he may be required to pay as damage for the injury caused (Jereos vs. Court of Appeals 117 SCRA 395).
The moral of the story is: you cannot hide behind your own illegal act. Kabit System will not protect you.