Spouses Michael John L. Morales v. Ama Rural Bank of Mandaluyong

Summary

Spouses Morales sought to hold AMA Rural Bank liable for damages to their vehicle caused by a bus driver under the doctrine of vicarious liability. The Supreme Court denied their petition, affirming the Court of Appeals' decision that no employer-employee relationship existed between the bank and driver Ronaldo Ibañez, who was merely an independent contractor. The Court emphasized that even if employment existed, the registered owner Honoris Lines, Inc., not the mortgagee bank, would be liable for the driver's negligence. Additionally, bank representatives lacked proper authorization to bind the bank in settlement agreements. The decision reinforces the principle that registered vehicle owners bear primary liability for their drivers' negligent acts, and that independent contractor relationships do not create vicarious liability under Article 2180 of the Civil Code.