Commercial Law, 2012 Bar — Question 47

MULTIPLE CHOICE

X owns a fleet of taxicabs. He operates it through what is known as boundary system. Y drives one of such taxicabs and pays X a fixed amount of Php1,000 daily under the boundary system. This means that anything above Php1,000 would be the earnings of Y. Y, driving recklessly, hit an old lady crossing the street. Which statement is most accurate? A) X as the owner is exempt from liability because he was not the one driving. B) X as the owner is exempt from liability because precisely the arrangement is one under the “boundary system". C) X will not be exempt from liability because he remains to be the registered owner and the boundary system will not allow the circumvention of the law to avoid liability. D) Y is the only one liable because he drove recklessly.

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