Lasam vs. Smith, Jr.

A common carrier’s liability for injuries to passengers arising from an accident is contractual, based on breach of the contract of carriage, and the carrier is liable in damages unless it proves that the failure to carry the passengers safely was due to a fortuitous event under Article 1105 of the Civil Code; the carrier is not an absolute insurer against risks of travel that the passenger may avoid by ordinary care and diligence. The trial court’s award of damages will not be disturbed absent abuse of discretion, since Article 1103 authorizes courts to moderate liability according to the circumstances.

Frank Smith, Jr. owned a public garage in San Fernando, La Union, and engaged in the business of carrying passengers for hire from one point to another in La Union and surrounding provinces. Honorio Lasam and Joaquina Sanchez, husband and wife, engaged Smith to convey them from San Fernando to Currimao, Ilocos Norte, in a Ford automobile, creating a contract of carriage. The case required the Court to apply the Civil Code provisions governing contractual liability and fortuitous events, particularly Articles 1101-1107, 1105, and 1103, as distinguished from the extra-contractual liability provision in Article 1903.

Honorio Lasam and Joaquina Sanchez, husband and wife, brought an action against Frank Smith, Jr. to recover P20,000 for physical injuries sustained in an automobile accident. Smith owned a public garage in the town of San Fernando, La Union, and was engaged in the business of carrying passengers for hire from one point to another in La Union and surrounding provinces. On February 27, 1918, he undertook to convey them from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed chauffeur, but after reaching the town of San Juan, the chauffeur allowed his assistant, Remigio Bueno, to drive the car. Bueno held no driver’s license, though he had some experience in driving. Except for some slight engine trouble while passing through the town of Luna, the car functioned well until after crossing the Abra River in Tagudin.

According to the testimony of the witnesses for the plaintiffs, defects then developed in the steering gear so as to make accurate steering impossible, and after zigzagging for a distance of about half a kilometer, the car left the road and went down a steep embankment. The defendant, in his testimony, maintained that there was no defect in the steering gear, neither before nor after the accident, and expressed the opinion that the swaying or zigzagging of the car must have been due to its having been driven at an excessive rate of speed. It was considered immaterial whether the accident was caused by negligence on the part of the defendant’s employees or by defects in the automobile, since the result would be practically the same in either event.

In going over the bank of the road, the automobile was overturned and the plaintiffs were pinned down under it. Mr. Lasam escaped with a few contusions and a dislocated rib, but his wife, Joaquina Sanchez, received serious injuries, among which was a compound fracture of one of the bones in her left wrist. She also appears to have suffered a nervous breakdown from which she had not fully recovered at the time of the trial.

The complaint was filed about a year and a half after the occurrence. It alleged that the accident was due to defects in the automobile as well as to the incompetence and negligence of the chauffeur, and the case appears to have been tried largely upon the theory that it sounded in tort and that the liability of the defendant was governed by Article 1903 of the Civil Code.

On the damages, the plaintiffs claimed that the expenses incurred as a result of the accident greatly exceeded the amount awarded. The trial court found that by far the greater part of the damages claimed resulted from the fracture of a bone in Joaquina Sanchez’s left wrist and from her objections to having a decaying splinter of the bone removed by a surgical operation. As a consequence of her refusal to submit to such an operation, a series of infections ensued and required constant and expensive medical treatment for several years, and the trial court held that the defendant should not be charged with these expenses.

• Insufficiency of Damages: Plaintiffs-appellants maintained that the damages awarded were insufficient and that the evidence clearly established their entitlement to P7,832.80 instead of P1,254.10; their assignments of error related to this point only.
• Cause of Accident: Plaintiffs alleged that the accident was due to defects in the automobile as well as to the incompetence and negligence of the chauffeur.

• Denial of Liability: Defendant-appellant denied all liability for any damages whatever.
• Absence of Steering Defect: Defendant maintained that there was no defect in the steering gear, neither before nor after the accident, and expressed the opinion that the swaying or zigzagging of the car must have been due to its having been driven at an excessive rate of speed.
• Carrier Not Absolute Insurer: Defendant argued that a carrier of passengers is not an absolute insurer against risks of travel from which the passenger may protect himself by exercising ordinary care and diligence, citing Alba vs. Sociedad Anonima de Tranvias.

• Nature of Liability: Whether the defendant’s liability for injuries sustained by passengers in an automobile accident arises from breach of the contract of carriage under Articles 1101-1107 of the Civil Code, rather than from extra-contractual tort under Article 1903.
• Fortuitous Event: Whether the accident was due to a fortuitous event under Article 1105, thereby exempting the defendant from liability for breach of the contract of carriage.
• Absolute Insurer: Whether a carrier of passengers is an absolute insurer against risks of travel from which the passenger may protect himself by ordinary care and diligence.
• Damages: Whether the trial court erred in awarding only P1,254.10 instead of P7,832.80, or whether it properly exercised its discretionary power to moderate damages under Article 1103.

• Nature of Liability: Contractual. The source of the defendant’s legal liability is the contract of carriage; having failed to carry the plaintiffs safely and securely, he is liable in damages unless he proves a cause under Article 1105. Articles 1101-1107, not Article 1903, govern.
• Fortuitous Event: No. The accident was caused either by defects in the automobile or by negligence of its driver; no extraordinary circumstance independent of human will, act of God, or unforeseeable adverse road condition was shown. That is not caso fortuito under Article 1105.
• Absolute Insurer: No. A carrier of passengers is not an absolute insurer against risks of travel from which the passenger may protect himself by ordinary care and diligence, as illustrated in Alba vs. Sociedad Anonima de Tranvias; but here the passengers had no means of avoiding the danger or escaping injury.
• Damages: No increase. Courts have discretionary power under Article 1103 to moderate liability according to the circumstances; the trial court did not abuse that discretion, especially because much of the claimed damages resulted from Joaquina Sanchez’s refusal to undergo surgery and the ensuing infections.

• Nature of Liability: The conclusions of the trial court were correct. The defendant’s liability, if any, is contractual, a rule well settled by previous decisions beginning with Rakes vs. Atlantic, Gulf & Pacific Co. (7 Phil., 359), with the distinction between extra-contractual and contractual liability discussed in Cangco vs. Manila Railroad Co. (38 Phil., 768), Manila Railroad Co. vs. Compania Trasatlantica and Atlantic, Gulf & Pacific Co. (38 Phil., 875), and De Guia vs. Manila Electric Railroad & Light Co. (40 Phil., 706). The source of the defendant’s legal liability is the contract of carriage; by entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination. Having failed to do so, he is liable in damages unless he shows that the failure was due to causes mentioned in Article 1105. Thus Articles 1101-1107, not Article 1903, govern.

• Fortuitous Event: Article 1105 provides that no one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability. Spanish authorities regard this language as defining caso fortuito and hold the two expressions synonymous. Law 11, Title 33, Partida 7 defines caso fortuito as an event that takes place by accident and could not have been foreseen, such as destruction of houses, unexpected fire, shipwreck, and violence of robbers. Escriche defines it as an unexpected event or act of God which could neither be foreseen nor resisted, such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of buildings by unforeseen accidents, and other similar occurrences. The Enciclopedia Juridica Española lists the essential characteristics of caso fortuito: (1) the cause of the unforeseen and unexpected occurrence, or of the debtor’s failure to comply, must be independent of the human will; (2) it must be impossible to foresee the event, or if it can be foreseen, impossible to avoid; (3) the occurrence must render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury to the creditor. These authorities agree that some extraordinary circumstance independent of the will of the obligor, or of his employees, is an essential element of caso fortuito. That element is lacking here. It was not suggested that the accident was due to an act of God or to adverse road conditions which could not have been foreseen. The accident was caused either by defects in the automobile or through the negligence of its driver. That is not caso fortuito.

• Absolute Insurer: Neither under American nor Spanish law is a carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by exercising ordinary care and diligence. Alba vs. Sociedad Anonima de Tranvias, cited by the defendant, illustrates the principle: a passenger standing on the platform of a moving street car fell when the car rounded a curve; the Supreme Court of Spain held that he could not recover because the car was travelling at a moderate rate of speed, there was no infraction of the regulations, and he should have been on guard against a contingency as natural as losing his balance when the car rounded the curve. That principle does not exonerate the defendant here, because the passengers had no means of avoiding the danger or escaping the injury.

• Damages: There was no doubt that the expenses incurred by the plaintiffs as a result of the accident greatly exceeded the amount of damages awarded. But in determining the extent of liability for losses or damages resulting from negligence in the fulfillment of a contractual obligation, courts have a discretionary power to moderate the liability according to the circumstances, as provided in Article 1103 and cited in De Guia vs. Manila Electric Railroad & Light Co. (40 Phil., 706). The evidence did not justify interfering with the discretion of the trial court. By far the greater part of the damages claimed resulted from the fracture of a bone in Joaquina Sanchez’s left wrist and from her objections to having a decaying splinter of the bone removed by a surgical operation. As a consequence of her refusal to submit to such an operation, a series of infections ensued and required constant and expensive medical treatment for several years. The defendant should not be charged with these expenses. The award of P1,254.10 was therefore affirmed.

• Contractual liability of a carrier for breach of contract of carriage — When a carrier undertakes to transport passengers, it binds itself to carry them safely and securely to their destination. Its liability for injuries caused by an accident is contractual, not extra-contractual under Article 1903; it is liable in damages unless it proves that the failure was due to a cause under Article 1105. The Court applied this to hold Smith liable despite the accident being caused either by steering defects or driver negligence.
• Caso fortuito under Article 1105 — No liability attaches for events that could not be foreseen or, if foreseen, were inevitable, except when the law provides otherwise or the obligation itself imposes liability. The essential characteristics are: (1) the cause must be independent of human will; (2) it must be impossible to foresee or avoid; (3) the occurrence must render impossible the fulfillment of the obligation in a normal manner; and (4) the obligor must be free from participation in the aggravation of the injury. An accident caused by defects in the vehicle or negligence of the driver is not caso fortuito.
• Carrier not an absolute insurer — A carrier of passengers is not an absolute insurer against risks of travel from which the passenger may protect himself by ordinary care and diligence. The Court recognized this principle but distinguished Alba vs. Sociedad Anonima de Tranvias because the passengers in the present case had no means of avoiding the danger or escaping injury.
• Discretionary moderation of damages — Under Article 1103, courts have discretionary power to moderate liability according to the circumstances when determining damages for negligence in the fulfillment of a contractual obligation. The Court declined to increase the award, especially because much of the claimed expense resulted from the injured passenger’s refusal to undergo surgery.

• "It is sufficient to reiterate that the source of the defendant's legal liability is the contract of carriage; that by entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads as follows:" — This passage states the ratio decidendi that the carrier’s liability is contractual and that the only excuse is a cause under Article 1105.
• "As will be seen, these authorities agree that some extraordinary circumstance independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito. Turning to the present case, it is at once apparent that this element is lacking." — This passage defines the essential element of caso fortuito and applies it to reject the fortuitous-event defense.
• "We agree with counsel that neither under the American nor Spanish law is a carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by exercising ordinary care and diligence." — This passage states the carrier-not-absolute-insurer doctrine, which the Court qualified by noting that the passengers here could not avoid the danger.
• "But bearing in mind that in determining the extent of the liability for losses or damages resulting from negligence in the fulfillment of a contractual obligation, the courts have "a discretionary power to moderate the liability according to the circumstances" (De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706; art. 1103, Civil Code), we do not think that the evidence is such as to justify us in interfering with the discretion of the court below in this respect." — This passage states the rule on discretionary moderation of damages and explains why the award was not increased.

• Rakes vs. Atlantic, Gulf & Pacific Co., 7 Phil., 359 — Cited as the beginning of the settled rule that a carrier’s liability for passenger injuries is contractual.
• Cangco vs. Manila Railroad Co., 38 Phil., 768 — Cited as one of the cases exhaustively discussing the distinction between extra-contractual and contractual liability.
• Manila Railroad Co. vs. Compania Trasatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875 — Cited for the same distinction between extra-contractual and contractual liability.
• De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706 — Cited for the rule that courts have discretionary power to moderate liability according to the circumstances, and for the contractual-liability discussion.
• Alba vs. Sociedad Anonima de Tranvias, Jurisprudencia Civil, vol. 102, p. 928 — Cited by the defendant for the principle that a carrier is not an absolute insurer; distinguished because the passenger there could guard against a natural contingency, while the plaintiffs here could not avoid the danger.

• Article 1105, Civil Code — Provides that no one shall be liable for events that could not be foreseen or, even if foreseen, were inevitable, except when the law expressly provides otherwise or the obligation itself imposes liability. The Court applied this to hold that the accident was not a fortuitous event and did not exempt the defendant.
• Articles 1101-1107, Civil Code — Govern liability arising from breach of contract. The trial court correctly applied these provisions instead of Article 1903 because the defendant’s liability arose from the contract of carriage.
• Article 1903, Civil Code — Governs extra-contractual liability for negligence. The plaintiffs invoked it, but the Court held it inapplicable because the action rested on breach of contract.
• Article 1103, Civil Code — Authorizes courts to moderate liability according to the circumstances. The Court relied on it to uphold the trial court’s award of P1,254.10 rather than increase it to P7,832.80.
• Law 11, Title 33, Partida 7 — Cited as the antecedent of Article 1105 and as defining caso fortuito as an event that takes place by accident and could not have been foreseen, with examples such as destruction of houses, unexpected fire, shipwreck, and violence of robbers. The Court used this definition to analyze whether the accident was fortuitous.

Araullo, C.J.; Street, J.; Malcolm, J.; Johns, J.; and Romualdez, J., concurred.