What is the relationship between jeepney and taxi drivers and their operators under the
boundary system?
What is a boundary system?
Jurisprudence says:
The boundary system is a scheme by an owner/operator engaged in transporting passengers as a
common carrier to primarily govern the compensation of the driver, that is, the latter’s daily earnings
are remitted to the owner/operator less the excess of the boundary which represents the driver’s
compensation. Under this system, the owner/operator exercises control and supervision over the driver.
It is unlike in lease of chattels where the lessor loses complete control over the chattel leased but the
lessee is still ultimately responsible for the consequences of its use. The management of the business
is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience,
must see to it that the driver follows the route prescribed by the franchising and regulatory authority,
and the rules promulgated with regard to the business operations. The fact that the driver does not
receive fixed wages but only the excess of the “boundary” given to the owner/operator is not sufficient
to change the relationship between them. Indubitably, the driver performs activities which are usually
necessary or desirable in the usual business or trade of the owner/operator. (Oscar Villamaria, Jr. vs.
Court of Appeals, G.R. No. 165881, April 19, 2006)
What is the relationship between jeepney and taxi drivers and their operators under the boundary
system?
The relationship between jeepney owners/operators on one hand and jeepney drivers on the other
hand under the boundary system is that of employer-employee and not of lessor-lessee.
Jurisprudence says:
In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and
control over the latter. The management of the business is in the owner’s hands. The owner as holder
of the certificate of public convenience must see to it that the driver follows the route prescribed by the
franchising authority and the rules promulgated as regards its operation. (Angel Jardin vs. National
Labor Relations Commission, G.R. No. 119268, February 23, 2000)
The fact that the drivers do not receive fixed wages but get only that in excess of the so-called
“boundary” they pay to the owner/operator is not sufficient to withdraw the relationship between them
from that of employer and employee. (Angel Jardin vs. National Labor Relations Commission, G.R. No.
119268, February 23, 2000)
The existence of a vendor-vendee relationship between the operator and the driver under a boundaryhulog system which is essentially a contract to sell does not negate the existence of an employeremployee relationship. (Oscar Villamaria, Jr vs. Court of Appeals, G.R. No. 165881, April 19, 2006)
What is the so-called “boundary system”?
Under this system the driver is engaged to drive the owner/operator’s unit and pays the latter a fee
commonly called boundary for the use of the unit. Whatever he earned in excess of that amount is his
income. (Paguio Transport Corp. v. NLRC, G.R. No. 119500, Aug. 28, 1998)
What kind of relationship exists between the owner of the vehicle and the
driver under a "boundary system" arrangement?
The relationship between jeepney owners/operators on one hand and jeepney drivers on the other
under the boundary system is that of employer-employee and not of lessor-lessee. (Martinez v.
NLRC, G.R. No. 117495, May 29, 1997).
The features which characterize, the "boundary system" – namely, the fact that the driver does not
receive a fixed wage but gets only the excess of the amount of fares collected by him over the
amount he pays to the jeep- owner, and that the gasoline consumed by the jeep is for the account of
the driver – are not sufficient to withdraw, the relationship between them from that of the employer
and employee. (National Labor Union v. Dinglasan, G.R. No. L-14183, Nov. 4, 1993)
TORTS AND DAMAGES
What is the so-called registered-owner-of-the-vehicle rule in vehicular mishaps?
The registered owner of the vehicle rule means that registered owner of any vehicle, even if not used
for public service, would primarily be responsible to the public or to third persons for injuries caused by
the latter while the vehicle was being driven on the highways or streets. In Erezo v. Jepte, 102 Phil 103,
108 (1957), cited in Del Carmen, Jr. vs. Bacoy, et al., the Court advised that “the main aim of motor
vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury
is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite
individual, the registered owner. Instances are numerous where vehicles running on public highways
caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner
or drivers, or with very scant means of identification. It is to forestall these circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the
interest of the determination of persons responsible for damages or injuries caused on public
highways.”
In Filcar Transport Services v. Espinas [G.R. No. 174156, June 20, 2012], the registered owner of a
motor vehicle tried to escape liability by positing the absence of employer-employee relationship with
the offending driver. The Court was not persuaded and ruled otherwise. It held that “x x x in case of
motor vehicle mishaps, the registered owner of the motor vehicle is considered as the employer of the
tortfeasor-driver, and is made primarily liable for the tort committed by the latter under Article 2176, in
relation with Article 2180, of the Civil Code.”
Indeed, this Court has consistently been of the view that it is for the better protection of the public for
both the owner of record and the actual operator to be adjudged jointly and severally liable with the
driver. As aptly stated by the appellate court, “the principle of holding the registered owner liable for
damages notwithstanding that ownership of the offending vehicle has already been transferred to
another is designed to protect the public and not as a shield on the part of unscrupulous transferees of
the vehicle to take refuge in, in order to free itself from liability arising from its own negligent act. R
Transport Corporation v. Yu [G.R. No. 174161, February 18, 2015]