“My cousin intends to buy a motorcycle. He wants the motorcycle under my name. My query is, can he use the motorcycle anytime he wants without me accompanying him?”
Yes, your cousin can use the motorcycle without you accompanying him. Under your cousin’s proposed scheme, you will be the registered owner with all the responsibilities and liabilities of a legal owner.
There is no requirement under the law that only the registered owner can use the motorcycle or that the registered owner must accompany the rider. It must be stressed that, under the Land Transportation and Traffic Code, the owner can allow only a duly licensed rider to use the motorcycle.
The restriction to allow only a duly licensed driver to use a motor vehicle is to ensure that, in case of loss or damage, the insurance company will indemnify the insured owner.
A motor vehicle insurance policy usually includes an authorized driver clause. It indemnifies the insured owner against loss or damage to the vehicle, but limits the use of the insured vehicle to:
- the insured himself; or,
- any person who drives on his order or with his permission.
The main purpose of such a clause in the insurance policy is to require the driver to be duly licensed and have no disqualification to drive a motor vehicle. This assumes that the driver has the permission of the owner of the motor vehicle, whether he is a friend or a member of the family, or the employees of a car service or repair shop.
When your cousin buys the motorcycle and registers the motorcycle under your name, it creates a relationship of an implied trust. It means that your cousin retains the beneficial interest over the motorcycle being the actual owner even though, according to the motorcycle registration, you are the registered owner.
In your cousin’s proposed scheme, your cousin’s creditors cannot run after the motorcycle; it shields the motorcycle from creditors of the true owner. On the other hand, the creditors of the registered owner can run after the motorcycle registered in your name for payment of your obligations or debts.
Registered owner rule
The Land Transportation and Traffic Code defines the owner as the actual legal owner of a motor vehicle, in whose name such vehicle is duly registered with the Land Transportation Office (LTO).
The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or any damage or injury is caused by the vehicle on the public highways, the responsibility can be fixed on a definite individual, namely, the registered owner.
This rule prevents incidents where vehicles running on public highways cause accidents or injuries to pedestrians or other vehicles, and then it is difficult to identify the persons responsible for the damage or injuries. It also protects the victims of road mishaps to ensure that they can seek compensation for damages they may sustain in accidents resulting in deaths, injuries, and other damages.
Identifying the person primarily and directly responsible for the damages would also avoid a situation where a registered owner of a motor vehicle can easily escape liability by passing on the blame to another who may have no means to answer for the damages caused, in so doing defeating the claims of victims of road accidents.
The registered owner’s liability provides that “whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done,” and, it is “not only for one’s own acts or omissions, but also for those of persons for whom one is responsible” (Articles 2176 and 2180 Civil Code).
The setup may be inconvenient for the registered owner of the motor vehicle, but the inconvenience cannot outweigh the more important public policy of providing protection to innocent persons who may be victims of reckless drivers and irresponsible motor vehicle owners.
As the registered owner, you will be liable to the public for any damage or injury caused by your cousin while riding/using the motorcycle. This liability extends even to ticket violations especially with the implementation of the No Contact Apprehension Policy.
But you still have recourse or claim for reimbursement against the true owner of the motorcycle. Ultimately, as the actual owner or beneficiary of the motorcycle, your cousin should indemnify you for any amount that you may be required to pay as damages for the injury caused to another.