Why is it important to register the sale of a motor vehicle at the Land Transportation Office (LTO)?
A friend asked for help after receiving a demand letter from a car insurance company, demanding reimbursement for repairs (good thing no personal injury was involved, as this would have been a bigger headache). She was puzzled why she received the insurer’s demand letter because, according to her, she sold her car a year ago. As it turned out, the buyer didn’t register the sale at the LTO.
Under the law, the registered owner is primarily responsible for the damage caused by the vehicle. The seller, in turn, could go after the buyer, but this could not substitute with the hassle of being dragged to court. Although the registered owner is entitled to be indemnified by the real or actual owner of the amount that he may be required to pay, she is not allowed to evade liability, when sued by the injured person, simply by pointing to the buyer.
Is this unfair? Not really. If fingerpointing is allowed, it’s easy to escape responsibility by transferring the car to an unknown person or one who has no means to answer financially for the damage or injury done. In the words of the Supreme Court:
“A registered owner who has already sold or transferred a vehicle has the recourse to a third-party complaint, in the same action brought against him to recover for the damage or injury done, against the vendee or transferee of the vehicle. The inconvenience of the suit is no justification for relieving him of liability; said inconvenience is the price he pays for failure to comply with the registration that the law demands and requires.”
As between the stranger who suffered injury and the registered owner who transacts with the buyer, the registered owner is in a better position to ensure that the identity of the buyer is properly recorded. That’s why the deed of sale must be registered.
