Baliwag Transit, Inc. vs. Court of Appeals

A common carrier is presumed at fault or negligent when a passenger is injured, and it may rebut the presumption only by proving extraordinary diligence; it remains liable for the negligence or willful acts of its employees under Article 1759 of the Civil Code. A kerosene lamp or torch placed at the edge of a disabled vehicle may substantially comply with the early warning device requirement under Section 34(g) of the Land Transportation and Traffic Code.

Leticia Garcia and her minor son Allan Garcia were passengers of Baliwag Transit, Inc., while A & J Trading owned the cargo truck driven by Julio Recontique. The dispute implicated the statutory obligations of common carriers under the Civil Code to transport passengers with extraordinary diligence and of motor vehicle owners under the Land Transportation and Traffic Code to display warning devices when vehicles are disabled on highways. A related petition, G.R. No. 117152, filed by the Garcia spouses challenging the same Court of Appeals Decision, had been denied on November 13, 1995.

On July 31, 1980, Leticia Garcia and her five-year-old son Allan Garcia boarded Baliwag Transit Bus No. 2036 bound for Cabanatuan City, driven by Jaime Santiago. They took the seat behind the driver.

At about 7:30 in the evening, in Malimba, Gapan, Nueva Ecija, the bus passengers saw a cargo truck parked at the shoulder of the national highway. Its left rear portion jutted to the outer lane because the shoulder of the road was too narrow to accommodate the whole truck. A kerosene lamp appeared at the edge of the road to serve as a warning device. The truck driver, Julio Recontique, and his helper, Arturo Escala, were then replacing a flat tire. The truck was owned by respondent A & J Trading.

Bus driver Santiago was driving at an inordinately fast speed and failed to notice the truck and the kerosene lamp at the edge of the road. Santiago's passengers urged him to slow down, but he paid them no heed. Santiago even carried animated conversations with his co-employees while driving. When the danger of collision became imminent, the bus passengers shouted "Babangga tayo!". Santiago stepped on the brake, but it was too late. His bus rammed into the stalled cargo truck. It caused the instant death of Santiago and Escala, and injury to several others. Leticia and Allan Garcia were among the injured passengers.

Leticia suffered a fracture in her pelvis and right leg. She was rushed to the provincial hospital in Cabanatuan City for treatment, and after three days she was transferred to the National Orthopedic Hospital, where she was confined for more than a month and underwent an operation for partial hip prosthesis. Allan broke a leg and was given emergency treatment at the provincial hospital. At the time of the complaint, Allan was a minor, so the suit was initiated by his parents in his favor.

The Garcia spouses sued Baliwag Transit, Inc., A & J Trading, and Julio Recontique for damages in the Regional Trial Court of Bulacan. Baliwag disclaimed responsibility, alleging that the accident was caused solely by the fault and negligence of A & J Trading and its driver Recontique, who allegedly failed to place an early warning device at the corner of the disabled cargo truck. A & J Trading and Recontique, on the other hand, alleged that the accident was the result of the negligence and reckless driving of Santiago, Baliwag's bus driver. Leticia testified that the bus was running at a very high speed despite the drizzle and darkness, that passengers pleaded for the driver to slow down but were ignored, that the driver smelled of liquor, and that another passenger, Felix Cruz, testified that immediately before the collision the bus driver was conversing with a co-employee. The Court of Appeals gave greater credence to the injured passengers' testimony that a kerosene lamp or torch was placed at the rear portion of the truck and discounted the bus conductor's contrary testimony and the investigator's testimony as of little probative value.

• Liability of A & J Trading and Recontique: Baliwag alleged that the accident was caused solely by the fault and negligence of A & J Trading and its driver, Recontique, who failed to place an early warning device at the corner of the disabled cargo truck.
• Non-Compliance with Warning Device Requirement: Baliwag argued that the kerosene lamp or torch did not substantially comply with the law requiring an early warning device.
• Moral Damages: Baliwag contended that moral damages were awarded to Antonio and Leticia Garcia in their capacity as parents of Allan.
• Damages: Baliwag questioned the correctness of the amount of damages awarded by the Court of Appeals to the Garcia spouses.

• Negligence of Baliwag's Driver: A & J Trading and Recontique alleged that the accident was the result of the negligence and reckless driving of Santiago, Baliwag's bus driver.

• Common Carrier Liability: Whether the Court of Appeals erred in absolving A & J Trading from liability and holding Baliwag solely liable for the injuries suffered by Leticia and Allan Garcia in the accident.
• Damages: Whether the amount of damages awarded by the Court of Appeals to the Garcia spouses is correct.

• Common Carrier Liability: No. The Court of Appeals correctly held Baliwag solely liable for breach of contract of carriage; Baliwag failed to rebut the presumption of negligence by proving extraordinary diligence, and A & J Trading and Recontique were not negligent because the kerosene lamp substantially complied with Section 34(g) of the Land Transportation and Traffic Code.
• Damages: Partly. The awards of lost earnings, moral damages, and attorney's fees were proper, but actual damages for hospitalization and medical fees must be reduced to P5,017.74, the amount supported by receipts.

• Common Carrier Liability: Baliwag, as a common carrier, was bound to carry its passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances. In a contract of carriage, the common carrier is presumed at fault or negligent when a passenger dies or is injured; the court need not make an express finding of fault or negligence unless the presumption is rebutted. The presumption may be overcome only by evidence that the carrier exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. The records contained no proof that Baliwag exercised extraordinary diligence. Instead, the evidence showed the driver's recklessness: Leticia Garcia testified that the bus was running at a very high speed despite the drizzle and darkness; passengers pleaded for the driver to slow down but were ignored; Leticia also revealed that the driver smelled of liquor; and another passenger, Felix Cruz, testified that immediately before the collision the driver was conversing with a co-employee. These facts proved the driver's wanton disregard for the physical safety of his passengers, making Baliwag liable under Article 1759 of the Civil Code, which makes common carriers liable for the death of or injuries to passengers through the negligence or willful acts of their employees and provides that this liability does not cease upon proof that the carrier exercised all the diligence of a good father of a family in the selection or supervision of employees. Baliwag could not evade liability by insisting that the accident was caused solely by the negligence of A & J Trading and Recontique. The alleged non-use of an early warning device was not borne out by the records. Although Col. Demetrio dela Cruz and bus conductor Francisco Romano testified that they did not see an early warning device and referred to triangular reflectorized plates issued by the Land Transportation Office, the evidence showed that Recontique and Escala placed a kerosene lamp or torch at the edge of the road near the rear portion of the truck to serve as an early warning device. This substantially complied with Section 34(g) of the Land Transportation and Traffic Code, which allows appropriate parking lights or flares visible one hundred meters away, not only triangular reflectorized plates. Col. dela Cruz himself admitted that a kerosene lamp is an acceptable substitute for the reflectorized plates. Thus, no negligence could be imputed to A & J Trading and Recontique. The Court of Appeals' analysis of the evidence was concurred in: the injured passengers testified that they saw a kerosene lamp or torch on the rear portion of the truck before the accident; the bus conductor's contrary testimony was given less credence because he was interested in the outcome; the darkness and drizzle made the lamp necessary for the truck helper to replace the tire and for the passengers to notice the truck; and the investigator's testimony was of little probative value because he did not notice the lamp due to the crowd and admitted that the truck lights may have been smashed in the collision.
• Damages: The Court reviewed the awards.
• Actual Damages: The award of P25,000.00 for hospitalization and medical fees was not supported by the evidence. The Garcia spouses presented receipts marked as Exhibits "B-1" to "B-42," but their total amounted only to P5,017.74. Leticia testified as to the extra amount spent for her medical needs, but her lone testimony could not justify the award of P25,000.00. To prove actual damages, the best evidence available to the injured party must be presented; the court cannot rely on uncorroborated testimony whose truth is suspect but must depend upon competent proof that damages have been actually suffered. The actual damages for medical and hospitalization expenses were therefore reduced to P5,017.74.
• Lost Earnings: The award of P300,000.00 representing Leticia's lost earnings was reasonable. Before the accident, Leticia was engaged in embroidery, earning P5,000.00 per month. Her injuries forced her to stop working. Considering the nature and extent of her injuries and the length of time it would take her to recover, Baliwag should compensate her lost income for five years.
• Moral Damages: The award of moral damages was in accord with law. In a breach of contract of carriage, moral damages are recoverable if the carrier, through its agent, acted fraudulently or in bad faith. The evidence showed gross negligence of the driver of the Baliwag bus which amounted to bad faith. Leticia and Allan experienced physical suffering, mental anguish, and serious anxiety by reason of the accident. Leticia underwent an operation to replace her broken hip bone with a metal plate and was confined at the National Orthopedic Hospital for 45 days. The young Allan was also confined in the hospital for his foot injury. Contrary to Baliwag's contention, the decision of the trial court as affirmed by the Court of Appeals awarded moral damages to Antonio and Leticia Garcia not in their capacity as parents of Allan. Leticia was given moral damages as an injured party. Allan was also granted moral damages as an injured party, but because of his minority, the award in his favor had to be given to his father who represented him in the suit.
• Attorney's Fees: The award of attorney's fees was justified. The complaint for damages was instituted by the Garcia spouses on December 15, 1982, following the unjustified refusal of Baliwag to settle their claim. The Decision was promulgated by the trial court only on January 29, 1991, or about nine years later. Numerous pleadings were filed before the trial court, the appellate court, and the Supreme Court. Given the complexity of the case and the amount of damages involved, the award of attorney's fees of P10,000.00 was just and reasonable.

• Common Carrier's Extraordinary Diligence and Presumption of Negligence — A common carrier is bound to carry passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances. When a passenger dies or is injured in a contract of carriage, the carrier is presumed at fault or negligent; the presumption may be overcome only by evidence that the carrier exercised extraordinary diligence under Articles 1733 and 1755 of the Civil Code. The Court applied this doctrine to hold Baliwag liable because it failed to prove extraordinary diligence and its driver was reckless.
• Liability for Employees under Article 1759 — Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of their employees, even if the employees acted beyond the scope of their authority or in violation of the carrier's orders. This liability does not cease upon proof that the carrier exercised all the diligence of a good father of a family in the selection or supervision of its employees. The Court applied this to Baliwag for its driver's wanton disregard for passenger safety.
• Substantial Compliance with Early Warning Device Requirement — Section 34(g) of the Land Transportation and Traffic Code allows appropriate parking lights or flares visible one hundred meters away, not only triangular reflectorized plates, for vehicles parked or disabled on highways or in unlighted places. A kerosene lamp or torch placed at the edge of the road near the rear of a disabled truck substantially complies with this requirement. The Court applied this to absolve A & J Trading and Recontique of negligence.
• Actual Damages Require Competent Proof — Actual damages must be proved by the best evidence available to the injured party; the court cannot rely on uncorroborated testimony whose truth is suspect but must depend upon competent proof that damages were actually suffered. The Court applied this to reduce the award for hospitalization and medical fees to the total shown by receipts, P5,017.74.
• Moral Damages in Breach of Contract of Carriage — In a breach of contract of carriage, moral damages are recoverable if the carrier, through its agent, acted fraudulently or in bad faith. Gross negligence amounting to bad faith satisfies this requirement. The Court applied this to sustain moral damages for Leticia and Allan Garcia.
• Attorney's Fees — Attorney's fees may be awarded where the claimant was compelled to litigate due to the defendant's unjustified refusal to settle and the case involved complexity and numerous pleadings over a lengthy period. The Court applied this to sustain the P10,000.00 award.

• "As a common carrier, Baliwag breached its contract of carriage when it failed to deliver its passengers, Leticia and Allan Garcia to their destination safe and sound. A common carrier is bound to carry its passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances." — This states the common carrier's duty and the basis for Baliwag's liability.
• "In a contract of carriage, it is presumed that the common carrier was at fault or was negligent when a passenger dies or is injured. Unless the presumption is rebutted, the court need not even make an express finding of fault or negligence on the part of the common carrier. This statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code." — This defines the presumption of negligence and the extraordinary diligence standard.
• "Baliwag's argument that the kerosene lamp or torch does not substantially comply with the law is untenable. The aforequoted law clearly allows the use not only of an early warning device of the triangular reflectorized plates variety but also parking lights or flares visible one hundred meters away." — This establishes substantial compliance with the early warning device requirement.
• "To prove actual damages, the best evidence available to the injured party must be presented. The court cannot rely on uncorroborated testimony whose truth is suspect, but must depend upon competent proof that damages have been actually suffered." — This states the evidentiary standard for actual damages.

• Philippine Rabbit Bus Lines, Inc. vs. Intermediate Appellate Court, 189 SCRA 158 (1990) — Cited for the statutory presumption that a common carrier is at fault or negligent when a passenger dies or is injured, and for the requirement that the carrier prove extraordinary diligence.
• Development Bank of the Philippines vs. Court of Appeals, G.R. No. 110053, October 15, 1995 — Cited for the rule that actual damages must be proved by competent evidence and cannot rest on uncorroborated testimony.
• Alejandro Fuentes, Jr. vs. Court of Appeals and People, G.R. No. 111692, February 9, 1996 — Cited with Development Bank for the standard of proof for actual damages.
• Manuel vs. Court of Appeals, 227 SCRA 29 (1993) — Cited in support of the award of lost earnings for five years.
• Philippine National Railways vs. Intermediate Appellate Court, 217 SCRA 401 (1994) — Cited for the recoverability of moral damages in a breach of contract of carriage where the carrier acted fraudulently or in bad faith.
• Metro Manila Transit Corp. vs. Court of Appeals, 223 SCRA 521 (1994) — Cited with Philippine National Railways for the same moral damages rule.

• Article 1755, Civil Code — Requires a common carrier to carry passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the circumstances. The Court used this to define Baliwag's duty.
• Article 1756, Civil Code — Creates the presumption that a common carrier is at fault or negligent when a passenger dies or is injured, unless it proves extraordinary diligence. The Court applied this to hold Baliwag liable.
• Article 1759, Civil Code — Makes common carriers liable for the death of or injuries to passengers through the negligence or willful acts of their employees, and provides that this liability does not cease upon proof of diligence in selection or supervision. The Court applied this to Baliwag for its driver's recklessness.
• Article 1733, Civil Code — Requires common carriers to observe extraordinary diligence according to all the circumstances of each case. The Court cited this as the standard Baliwag failed to meet.
• Section 34(g), Land Transportation and Traffic Code — Requires appropriate parking lights or flares visible one hundred meters away at the corner of a vehicle parked or disabled on highways or in unlighted places, and allows warning devices other than triangular reflectorized plates. The Court applied this to find that the kerosene lamp substantially complied with the law.

Regalado, Romero, Mendoza, and Torres, Jr., JJ.