Pereña v. Zarate
NEW DOCTRINEFacts
The Antecedents: Spouses Teodoro and Nanette Pereña operated a school bus service, transporting students for a fee. On August 22, 1996, their driver, Clemente Alfaro, was driving a van carrying 14 students, including 15-year-old Aaron John L. Zarate, to Don Bosco Technical Institute. Due to traffic, Alfaro took an alternate route under the Magallanes Interchange, a narrow path with construction materials and parked jeepneys. This path included a railroad crossing that lacked warning signs and was not manned. As the van attempted to cross the railroad tracks, Alfaro overtook a passenger bus, obstructing his view of an oncoming Philippine National Railways (PNR) train. The train collided with the rear of the van, ejecting several students, including Aaron, who was fatally run over by the train. The train driver fled the scene. Procedural History: The parents of Aaron, Spouses Nicolas and Teresita Zarate, filed a complaint for damages against Alfaro, the Pereñas, and PNR. The Pereñas and PNR filed their respective answers and cross-claims. The Regional Trial Court (RTC) found the Pereñas and PNR jointly and severally liable for damages, awarding substantial sums for death, actual damages, loss of earning capacity, moral damages, exemplary damages, and attorney's fees. The RTC denied the Pereñas' motion for reconsideration. Both the Pereñas and PNR appealed to the Court of Appeals (CA). The CA affirmed the RTC's decision regarding liability but modified the awarded damages, reducing moral damages and deleting attorney's fees. The Pereñas' motion for reconsideration was denied by the CA. The Petition: Spouses Teodoro and Nanette Pereña filed a petition for review on certiorari with the Supreme Court, seeking to overturn the CA's decision. They argued that the CA erred in upholding the trial court's decision holding them jointly and severally liable with PNR and dismissing their cross-claim against PNR. Furthermore, they contended that the CA erred in affirming the award for loss of earning capacity of a minor who was only a high school student, asserting it was speculative and lacked sufficient basis. They also argued for a further reduction in the awarded damages, assuming any liability at all. The Supreme Court denied the petition, affirming the CA's decision.
Issue(s)
Whether the Pereñas, as operators of a school bus service, are common carriers bound to observe extraordinary diligence. Whether the Pereñas and PNR were jointly and severally liable for damages arising from the death of Aaron. Whether the indemnity for the loss of Aaron's earning capacity was proper despite his being a minor and unemployed. Whether the amounts of damages awarded were excessive.
Ruling
The Supreme Court DENIED the petition for review on certiorari, AFFIRMED the decision of the Court of Appeals promulgated on November 13, 2002, and ORDERED the petitioners to pay the costs of suit.
Ratio Decidendi
On the Pereñas' liability as common carriers and the standard of diligence: The Court affirmed the CA's finding that the Pereñas, as operators of a school bus service, were common carriers. It clarified that the operator of a school bus service, even with a limited clientele, is considered a common carrier because they hold themselves out to the public as ready to transport students for a fee. As common carriers, they are bound to observe extraordinary diligence in the vigilance over the safety of their passengers, as mandated by Article 1733 of the Civil Code. The Court emphasized that the presumption of negligence against a common carrier arises when a passenger dies or is injured, and the carrier must prove observance of extraordinary diligence to escape liability. The defense of exercising the diligence of a good father of a family in the selection and supervision of the driver is insufficient to absolve a common carrier from liability. On the joint and several liability of the Pereñas and PNR: The Court concurred with the lower courts that both the Pereñas and PNR were jointly and severally liable. The Pereñas were liable for breach of contract of carriage due to their negligence as a common carrier, while PNR was liable for quasi-delict under Article 2176 of the Civil Code due to its negligence in failing to ensure the safety of the railroad crossing. The Court found that the Pereñas' driver was negligent in traversing the railroad tracks at an unauthorized point, overtaking a bus, and failing to stop, while PNR was negligent for not installing adequate safety measures like crossbars, signal lights, and warning signs at a point known to be used by motorists. Thus, they were considered joint tortfeasors whose combined negligence caused the death of Aaron. On the indemnity for loss of earning capacity: The Court upheld the award for the loss of Aaron's earning capacity, reiterating that such compensation is awarded not for loss of time or earnings, but for the loss of the deceased's power or ability to earn money. The Court found the lower courts' considerations reasonable, as they based the computation on the minimum wage and the potential for future earnings, despite Aaron being a minor and unemployed. The Court distinguished this case from People v. Teehankee, Jr., noting that Aaron's enrollment in a prestigious school suggested a likelihood of future success. The Court cited Cariaga v. Laguna Tayabas Bus Company and People v. Sanchez to support the principle that earning capacity can be awarded even for minors or students, based on their scholastic records and potential. On the alleged excessiveness of damages: The Court found the awarded moral damages of ₱ 2,500,000.00 to be just and reasonable, intended to assuage the parents' deep mental anguish and moral shock. It also found the exemplary damages of ₱ 1,000,000.00 to be warranted to serve as an example for the public good, reminding common carriers of their duty to exercise extraordinary diligence. The Court noted that reducing these amounts might prove unjust given the passage of time since the infliction of suffering.
Main Doctrine
The operator of a school bus service is considered a common carrier bound to observe extraordinary diligence. In case of death or injury to a passenger, the common carrier is presumed negligent, and must prove observance of extraordinary diligence to escape liability. The liability of a common carrier extends to indemnity for loss of earning capacity even if the deceased was a minor or unemployed at the time of death, provided the computation is based on the minimum wage and potential for future earnings.