GR No. 157917
GR No. 157917
GR No. 157917
~bilippine~
$)upreme .<!Court
Jmanila
FIRST DIVISION
SPOUSES
TEODOR0 1
NANETTE PERENA,
Petitioners,
and
-versus-
and
NICOLAS
SPOUSES
L.
ZARATE,
TERESITA
NATIONAL
PHILIPPINE
RAILWAYS, and the
COURT OF APPEALS
Respondents.
SERENO, C.J.,
LEONARDO-DE CASTRO,
BERSAMIN,
VILLARAMA, JR., and
REYES,JJ
Promulgated:
_19 AUG
X-------------------------------------------------------------------------- --------------X
DECISION
BERSAMIN, J.:
The Case
In the title of the case, the petitioner's name appears as Teodoro Perefia, but he signed his name as
Teodorico Perefia in the verification/certification ofthe petition for review Of1 certiorari.
\
Decision
2002, by which the Court of Appeals (CA) affirmed with modification the
decision rendered on December 3, 1999 by the Regional Trial Court (RTC),
Branch 260, in Paraaque City that had decreed them jointly and severally
liable with Philippine National Railways (PNR), their co-defendant, to
Spouses Nicolas and Teresita Zarate (Zarates) for the death of their 15-year
old son, Aaron John L. Zarate (Aaron), then a high school student of Don
Bosco Technical Institute (Don Bosco).
Antecedents
Decision
At about the time the van was to traverse the railroad crossing, PNR
Commuter No. 302 (train), operated by Jhonny Alano (Alano), was in the
vicinity of the Magallanes Interchange travelling northbound. As the train
neared the railroad crossing, Alfaro drove the van eastward across the
railroad tracks, closely tailing a large passenger bus.
oncoming train was blocked because he overtook the passenger bus on its
left side. The train blew its horn to warn motorists of its approach. When
the train was about 50 meters away from the passenger bus and the van,
Alano applied the ordinary brakes of the train. He applied the emergency
brakes only when he saw that a collision was imminent. The passenger bus
successfully crossed the railroad tracks, but the van driven by Alfaro did not.
The train hit the rear end of the van, and the impact threw nine of the 12
students in the rear, including Aaron, out of the van. Aaron landed in the
path of the train, which dragged his body and severed his head,
instantaneously killing him. Alano fled the scene on board the train, and did
not wait for the police investigator to arrive.
At the pre-trial, the parties stipulated on the facts and issues, viz:
A. FACTS:
Decision
The train driver or operator left the scene of the incident on board
the commuter train involved without waiting for the police
investigator;
The site commonly used for railroad crossing by motorists was not
in fact intended by the railroad operator for railroad crossing at the
time of the vehicular collision;
B. ISSUES
(1) Whether or not defendant-driver of the van is, in the performance
of his functions, liable for negligence constituting the proximate
cause of the vehicular collision, which resulted in the death of
plaintiff spouses' son;
Decision
(2) Whether or not the defendant spouses Perea being the employer
of defendant Alfaro are liable for any negligence which may be
attributed to defendant Alfaro;
(3) Whether or not defendant Philippine National Railways being the
operator of the railroad system is liable for negligence in failing to
provide adequate safety warning signs and railings in the area
commonly used by motorists for railroad crossings, constituting the
proximate cause of the vehicular collision which resulted in the
death of the plaintiff spouses' son;
(4) Whether or not defendant spouses Perea are liable for breach of
the contract of carriage with plaintiff-spouses in failing to provide
adequate and safe transportation for the latter's son;
(5) Whether or not defendants spouses are liable for actual, moral
damages, exemplary damages, and attorney's fees;
(6) Whether or not defendants spouses Teodorico and Nanette Perea
observed the diligence of employers and school bus operators;
(7) Whether or not defendant-spouses are civilly liable for the
accidental death of Aaron John Zarate;
(8) Whether or not defendant PNR was grossly negligent in operating
the commuter train involved in the accident, in allowing or
tolerating the motoring public to cross, and its failure to install
safety devices or equipment at the site of the accident for the
protection of the public;
(9) Whether or not defendant PNR should be made to reimburse
defendant spouses for any and whatever amount the latter may be
held answerable or which they may be ordered to pay in favor of
plaintiffs by reason of the action;
(10) Whether or not defendant PNR should pay plaintiffs directly and
fully on the amounts claimed by the latter in their Complaint by
reason of its gross negligence;
(11) Whether or not defendant PNR is liable to defendants spouses for
actual, moral and exemplary damages and attorney's fees.2
The Zarates claim against the Pereas was upon breach of the
contract of carriage for the safe transport of Aaron; but that against PNR was
based on quasi-delict under Article 2176, Civil Code.
In their defense, the Pereas adduced evidence to show that they had
exercised the diligence of a good father of the family in the selection and
2
Decision
supervision of Alfaro, by making sure that Alfaro had been issued a drivers
license and had not been involved in any vehicular accident prior to the
collision; that their own son had taken the van daily; and that Teodoro
Perea had sometimes accompanied Alfaro in the vans trips transporting
the students to school.
For its part, PNR tended to show that the proximate cause of the
collision had been the reckless crossing of the van whose driver had not first
stopped, looked and listened; and that the narrow path traversed by the van
had not been intended to be a railroad crossing for motorists.
On June 29, 2000, the RTC denied the Pereas motion for
reconsideration,4 reiterating that the cooperative gross negligence of the
Pereas and PNR had caused the collision that led to the death of Aaron; and
3
4
Id. at 47-55.
Id. at 142.
Decision
that the damages awarded to the Zarates were not excessive, but based on
the established circumstances.
Id. at 25-46.
Decision
and deleted the attorneys fees because the RTC did not state the factual and
legal bases, to wit:6
WHEREFORE, premises considered, the assailed Decision of the
Regional Trial Court, Branch 260 of Paraaque City is AFFIRMED with
the modification that the award of Actual Damages is reduced to
P59,502.76; Moral Damages is reduced to P2,500,000.00; and the award
for Attorneys Fees is Deleted.
SO ORDERED.
The CA upheld the award for the loss of Aarons earning capacity,
taking cognizance of the ruling in Cariaga v. Laguna Tayabas Bus Company
and Manila Railroad Company,7 wherein the Court gave the heirs of Cariaga
a sum representing the loss of the deceaseds earning capacity despite
Cariaga being only a medical student at the time of the fatal incident.
Applying the formula adopted in the American Expectancy Table of
Mortality:
2/3 x (80 - age at the time of death) = life expectancy
the CA determined the life expectancy of Aaron to be 39.3 years upon
reckoning his life expectancy from age of 21 (the age when he would have
graduated from college and started working for his own livelihood) instead
of 15 years (his age when he died). Considering that the nature of his work
and his salary at the time of Aarons death were unknown, it used the
prevailing minimum wage of P280.00/day to compute Aarons gross annual
salary to be P110,716.65, inclusive of the thirteenth month pay. Multiplying
this annual salary by Aarons life expectancy of 39.3 years, his gross income
would aggregate to P4,351,164.30, from which his estimated expenses in the
sum of P2,189,664.30 was deducted to finally arrive at P 2,161,500.00 as net
income. Due to Aarons computed net income turning out to be higher than
6
7
Decision
Issues
In this appeal, the Pereas list the following as the errors committed
by the CA, to wit:
I.
The lower court erred when it upheld the trial courts decision
holding the petitioners jointly and severally liable to pay damages
with Philippine National Railways and dismissing their cross-claim
against the latter.
II.
The lower court erred in affirming the trial courts decision awarding
damages for loss of earning capacity of a minor who was only a high
school student at the time of his death in the absence of sufficient
basis for such an award.
III. The lower court erred in not reducing further the amount of damages
awarded, assuming petitioners are liable at all.
Ruling
1.
Were the Pereas and PNR jointly
and severally liable for damages?
The Zarates brought this action for recovery of damages against both
the Pereas and the PNR, basing their claim against the Pereas on breach
of contract of carriage and against the PNR on quasi-delict.
8
Id. at 82.
Decision
10
The RTC found the Pereas and the PNR negligent. The CA affirmed
the findings.
To start with, the Pereas defense was that they exercised the
diligence of a good father of the family in the selection and supervision of
Alfaro, the van driver, by seeing to it that Alfaro had a drivers license and
that he had not been involved in any vehicular accident prior to the fatal
collision with the train; that they even had their own son travel to and from
school on a daily basis; and that Teodoro Perea himself sometimes
accompanied Alfaro in transporting the passengers to and from school. The
RTC gave scant consideration to such defense by regarding such defense as
inappropriate in an action for breach of contract of carriage.
Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines, 1993
Edition, at p. 7.
Decision
11
Id. at 4.
Perez, Transportation Laws and Public Service Act, 2001 Edition, p. 6.
12
Article 1732 of the Civil Code states:
Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business
of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering
their services to the public.
13
Commonwealth Act No. 146, as amended, particularly by PD No. 1, Integrated Reorganization Plan
and E.O. 546.
14
Article 1756 of the Civil Code reads:
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been
at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755.
15
40 Phil 853, 856 (1920).
11
Decision
12
G.R. No. L-47822, December 22, 1988, 168 SCRA 612, 617-618.
Public Service Act.
18
First Philippine Industrial Corporation v. Court of Appeals, G.R. No. 125948, December 29, 1998,
300 SCRA 661, 670.
17
Decision
13
custom brokers and warehousemen,19 and barge operators20 even if they had
limited clientle.
As all the foregoing indicate, the true test for a common carrier is not
the quantity or extent of the business actually transacted, or the number and
character of the conveyances used in the activity, but whether the
undertaking is a part of the activity engaged in by the carrier that he has held
out to the general public as his business or occupation. If the undertaking is
a single transaction, not a part of the general business or occupation engaged
in, as advertised and held out to the general public, the individual or the
entity rendering such service is a private, not a common, carrier. The
question must be determined by the character of the business actually
carried on by the carrier, not by any secret intention or mental reservation it
may entertain or assert when charged with the duties and obligations that the
law imposes.21
Calvo v. UCPB General Insurance Co., G.R. No. 148496, March 19, 2002, 379 SCRA 510, 516.
Asia Lighterage and Shipping, Inc. v. Court of Appeals, G.R. No. 147246, August 9, 2003, 409 SCRA
340.
21
Decision
14
extraordinary diligence in the vigilance over the goods and for the safety of
the passengers transported by them, according to all the circumstances of
each case.22 Article 1755 of the Civil Code specifies that the common
carrier should carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances. To successfully fend off
liability in an action upon the death or injury to a passenger, the common
carrier must prove his or its observance of that extraordinary diligence;
otherwise, the legal presumption that he or it was at fault or acted
negligently would stand.23 No device, whether by stipulation, posting of
notices, statements on tickets, or otherwise, may dispense with or lessen the
responsibility of the common carrier as defined under Article 1755 of the
Civil Code. 24
22
Decision
15
for the death of Aaron and thus to be held liable for all the natural
consequences of such death.
There is no question that the Pereas did not overturn the presumption
of their negligence by credible evidence. Their defense of having observed
the diligence of a good father of a family in the selection and supervision of
their driver was not legally sufficient. According to Article 1759 of the Civil
Code, their liability as a common carrier did not cease upon proof that they
exercised all the diligence of a good father of a family in the selection and
supervision of their employee. This was the reason why the RTC treated this
defense of the Pereas as inappropriate in this action for breach of contract
of carriage.
The Pereas were liable for the death of Aaron despite the fact that
their driver might have acted beyond the scope of his authority or even in
violation of the orders of the common carrier.27 In this connection, the
records showed their drivers actual negligence. There was a showing, to
begin with, that their driver traversed the railroad tracks at a point at which
the PNR did not permit motorists going into the Makati area to cross the
railroad tracks. Although that point had been used by motorists as a shortcut
into the Makati area, that fact alone did not excuse their driver into taking
that route. On the other hand, with his familiarity with that shortcut, their
driver was fully aware of the risks to his passengers but he still disregarded
the risks. Compounding his lack of care was that loud music was playing
inside the air-conditioned van at the time of the accident. The loudness most
probably reduced his ability to hear the warning horns of the oncoming train
to allow him to correctly appreciate the lurking dangers on the railroad
tracks. Also, he sought to overtake a passenger bus on the left side as both
vehicles traversed the railroad tracks. In so doing, he lost his view of the
train that was then coming from the opposite side of the passenger bus,
27
Decision
16
leading him to miscalculate his chances of beating the bus in their race, and
of getting clear of the train. As a result, the bus avoided a collision with the
train but the van got slammed at its rear, causing the fatality. Lastly, he did
not slow down or go to a full stop before traversing the railroad tracks
despite knowing that his slackening of speed and going to a full stop were in
observance of the right of way at railroad tracks as defined by the traffic
laws and regulations.28 He thereby violated a specific traffic regulation on
right of way, by virtue of which he was immediately presumed to be
negligent.29
28
E.g., Section 42(d) of Republic Act No. 4136 (Land Transportation and Traffic Code), which
pertinently provides:
Section 42. Right of way. xxx
xxx
(d) The driver of a vehicle upon a highway shall bring to a full stop such vehicle before
traversing any through highway or railroad crossing: provided, that when it is apparent that no
hazard exists, the vehicle may be slowed down to five miles per hour instead of bringing it to a full
stop.
29
Article 2185 of the Civil Code provides:
Article 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle
has been negligent if at the time of the mishap, he was violating any traffic regulation. (n)
See also BLT Bus Company v. Intermediate Appellate Court, No. L-74387-90, November 14, 1988,
167 SCRA 379.
30
Yamada v. Manila Railroad Co., No. 10073, 33 Phil. 8, 11 (1915).
31
G.R. No. L-73998, November 14, 1988, 167 SCRA 363.
32
Citing Black Law Dictionary, Fifth Edition, p. 930.
33
Citing Cooley on Torts, Fourth Edition, Volume 3, p. 265.
Decision
17
34
Decision
18
At any rate, the lower courts correctly held both the Pereas and the
PNR jointly and severally liable for damages arising from the death of
Aaron. They had been impleaded in the same complaint as defendants
against whom the Zarates had the right to relief, whether jointly, severally,
or in the alternative, in respect to or arising out of the accident, and
questions of fact and of law were common as to the Zarates.36 Although the
basis of the right to relief of the Zarates (i.e., breach of contract of carriage)
against the Pereas was distinct from the basis of the Zarates right to relief
against the PNR (i.e., quasi-delict under Article 2176, Civil Code), they
nonetheless could be held jointly and severally liable by virtue of their
35
36
Decision
19
2.
Was the indemnity for loss of
Aarons earning capacity proper?
The RTC awarded indemnity for loss of Aarons earning capacity.
Although agreeing with the RTC on the liability, the CA modified the
amount. Both lower courts took into consideration that Aaron, while only a
high school student, had been enrolled in one of the reputable schools in the
Philippines and that he had been a normal and able-bodied child prior to his
death. The basis for the computation of Aarons earning capacity was not
what he would have become or what he would have wanted to be if not for
his untimely death, but the minimum wage in effect at the time of his death.
Moreover, the RTCs computation of Aarons life expectancy rate was not
reckoned from his age of 15 years at the time of his death, but on 21 years,
his age when he would have graduated from college.
Decision
20
Yet, the Pereas submit that the indemnity for loss of earning capacity
was speculative and unfounded. They cited People v. Teehankee, Jr.,37
where the Court deleted the indemnity for victim Jussi Leinos loss of
earning capacity as a pilot for being speculative due to his having graduated
from high school at the International School in Manila only two years before
the shooting, and was at the time of the shooting only enrolled in the first
semester at the Manila Aero Club to pursue his ambition to become a
professional pilot. That meant, according to the Court, that he was for all
intents and purposes only a high school graduate.
First of all, a careful perusal of the Teehankee, Jr. case shows that the
situation there of Jussi Leino was not akin to that of Aaron here. The CA and
the RTC were not speculating that Aaron would be some highly-paid
professional, like a pilot (or, for that matter, an engineer, a physician, or a
lawyer). Instead, the computation of Aarons earning capacity was premised
on him being a lowly minimum wage earner despite his being then enrolled
at a prestigious high school like Don Bosco in Makati, a fact that would have
likely ensured his success in his later years in life and at work.
And, secondly, the fact that Aaron was then without a history of
earnings should not be taken against his parents and in favor of the
defendants whose negligence not only cost Aaron his life and his right to
work and earn money, but also deprived his parents of their right to his
presence and his services as well. Our law itself states that the loss of the
earning capacity of the deceased shall be the liability of the guilty party in
favor of the heirs of the deceased, and shall in every case be assessed and
awarded by the court unless the deceased on account of permanent physical
37
Decision
21
disability not caused by the defendant, had no earning capacity at the time of
his death.38 Accordingly, we emphatically hold in favor of the
indemnification for Aarons loss of earning capacity despite him having
been unemployed, because compensation of this nature is awarded not for
loss of time or earnings but for loss of the deceaseds power or ability to
earn money.39
38
39
40
41
Decision
22
3.
Were the amounts of damages excessive?
The Pereas plead for the reduction of the moral and exemplary
damages awarded to the Zarates in the respective amounts of P2,500,000.00
and P1,000,000.00 on the ground that such amounts were excessive.
Decision
23
SO ORDERED.
WE CONCUR:
(,
~~~~
~6
c=e-r
TERESITA J. LEONARDO-DE CASTRO~TIN S. VILLA
Associate Justice
Associate J
Associate Justice
CERTIFICA TI 0 N
Pursuant to Section 13, Artitle VIII of the Co~stitution, I certify that
the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's
Division.