Sanico and Castro vs. Colipano

In a contract of carriage, the driver who is merely an employee of the carrier is not a party to the contract and cannot be held liable for breach of contract; only the operator/owner is liable. Common carriers are presumed negligent under Article 1756 of the Civil Code when passengers are injured, and this presumption can only be overcome by proof of extraordinary diligence. Waivers of the right to claim damages signed by injured passengers are void if not clearly understood by the passenger (especially if in a language they do not understand) and if contrary to the public policy requiring extraordinary diligence from common carriers.

On December 25, 1993, Christmas Day, Werherlina P. Colipano and her daughter were paying passengers in a jeepney operated by Jose Sanico and driven by Vicente Castro. Due to overcrowding, Colipano was made to sit on an empty beer case at the edge of the rear entrance/exit with her sleeping child on her lap. While traversing an uphill incline in Natimao-an, Carmen, Cebu, the jeepney lost engine power and slid backward. Colipano pushed her feet against the step board to prevent being thrown out, but her left foot slipped on the wet surface and was crushed between the step board and a coconut tree that the jeepney bumped, resulting in the amputation of her leg.

• At approximately 4:00 P.M. on December 25, 1993, Colipano and her daughter were paying passengers in the jeepney operated by Sanico and driven by Castro.
• Due to lack of proper seating, Colipano was instructed to sit on an empty beer case placed at the edge of the rear entrance/exit of the jeepney, with her sleeping child on her lap.
• While traversing an uphill road in Natimao-an, Carmen, Cebu, the jeepney lost engine power and slid backward.
• Colipano pushed both feet against the step board to prevent herself and her child from being thrown out, but the step board was wet, causing her left foot to slip.
• Her left foot was crushed between the step board and a coconut tree that the jeepney bumped, which stopped the backward movement.
• Colipano's leg was badly injured and was eventually amputated.
• Sanico paid for hospital and medical expenses amounting to P44,900.00.
• Colipano executed an Affidavit of Desistance and Release of Claim, purportedly waiving her right to claim damages.
• Colipano testified on October 14, 1997 that she was 30 years old, meaning she was approximately 27 years old at the time of the injury on December 25, 1993.
• Colipano testified that she earned P12,000.00 annually from buying and selling bananas and vegetables.

• That the Court of Appeals erred in finding that Sanico and Castro breached the contract of carriage with Colipano.
• That the Affidavit of Desistance and Release of Claim executed by Colipano is binding upon her and should exonerate Sanico from liability.
• That the Court of Appeals erred in the amount of damages awarded because Colipano failed to present documentary evidence to support her age and annual income, rendering her testimony self-serving and without basis.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether the Court of Appeals erred in finding that petitioners breached the contract of carriage with Colipano
  • Whether the Affidavit of Desistance and Release of Claim is binding on Colipano
  • Whether the Court of Appeals erred in the amount of damages awarded

• Procedural: N/A
• Substantive:
  • Only Sanico breached the contract of carriage; Castro, being merely the driver and an employee of Sanico, is not a party to the contract of carriage and cannot be held liable for breach thereof.
  • Sanico failed to exercise the extraordinary diligence required of common carriers under Article 1733 of the Civil Code; the presumption of negligence under Article 1756 was not rebutted, and the evidence established actual negligence in seating Colipano on an improvised beer case and in failing to maintain the jeepney's engine.
  • The Affidavit of Desistance and Release of Claim is void because Colipano did not understand English and the contents were not explained to her, and because such waivers are strictly construed against common carriers and are void when contrary to public policy.
  • The award of compensatory damages is modified to P212,000.00, computed based on Colipano's age of 27 at the time of injury (not age 30 at the time of testimony), using the formula: Net Earning Capacity = Life Expectancy x [Gross Annual Income - Living Expenses (50%)], where Life Expectancy = 2/3 (80 - age).
  • Interest is awarded at 6% per annum on the total amount of damages from the date of the RTC decision (October 27, 2006) until the finality of this judgment, and thereafter at 6% per annum from finality until full payment.

• Parties to a Contract of Carriage — In a contract of carriage, only the passenger and the carrier (owner/operator) are parties. The driver or employee is not a party and cannot be sued for breach of contract, even if negligent in the performance of duties.
• Extraordinary Diligence of Common Carriers — Common carriers are bound to observe extraordinary diligence for the safety of passengers according to all circumstances of each case (Art. 1733), which means carrying passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons (Art. 1755).
• Presumption of Negligence — In case of death or injury to passengers, common carriers are presumed to have been at fault or negligent, and this presumption can be overcome only by proof of the extraordinary diligence exercised to ensure the safety of the passengers (Art. 1756).
• Strict Construction of Waivers Against Common Carriers — Waivers of the right to claim damages by injured passengers are strictly construed against common carriers. For a waiver to be valid, it must be clear and unequivocal, understood by the party waiving, and not contrary to law, public policy, morals, or good customs. Waivers executed by passengers who do not understand the document or its consequences, especially when intended to protect the public policy of extraordinary diligence, are void.
• Computation of Loss of Earning Capacity — The established formula is: Net Earning Capacity = Life Expectancy x [Gross Annual Income - Living Expenses (50%)], where Life Expectancy = 2/3 (80 - the age of the deceased or injured). The age at the time of injury controls, not the age at the time of testimony.

• "The complaint against Caccam was therefore properly dismissed. He was not a party to the contract; he was a mere employee of the BAL. The parties to that contract are Juana Soberano, the passenger, and the MRR and its subsidiary, the BAL, the bus owner and operator, respectively..." — Citing Soberano v. Manila Railroad Co. on the principle that employees are not parties to the contract of carriage.
• "To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable."
• "'Self-serving evidence' is not to be taken literally to mean any evidence that serves its proponent's interest. The term, if used with any legal sense, refers only to acts or declarations made by a party in his own interest at some place and time out of court, and it does not include testimony that he gives as a witness in court."

• Soberano v. Manila Railroad Co. — Cited for the controlling precedent that a driver who is merely an employee is not a party to the contract of carriage and cannot be held liable for breach thereof.
• Calalas v. Court of Appeals — Applied to hold that seating a passenger on an improvised seat at the rear entrance places her in greater peril and constitutes negligence, and that engine failure aggravates the carrier's liability.
• Gatchalian v. Delim — Applied to establish that waivers of the right to claim damages by injured passengers are strictly construed against common carriers and are void if contrary to public policy.
• Heirs of Pedro Clemeña y Zurbano v. Heirs of Irene B. Bien — Cited to distinguish between "self-serving evidence" (out-of-court declarations) and testimony given in court under oath and subject to cross-examination.
• Serra v. Mumar — Cited for the exception to the documentary evidence requirement for loss of earning capacity when the injured is self-employed or a daily wage worker earning less than the minimum wage.
• Smith Bell Dodwell Shipping Agency Corp. v. Borja — Cited for the formula for computing loss of earning capacity.
• Eastern Shipping Lines, Inc. v. Court of Appeals — Cited for the rule on interest on damages for breach of contract not constituting a loan or forbearance of money.
• Nacar v. Gallery Frames — Cited for the current rate of legal interest at 6% per annum.

• Article 1733 of the Civil Code — Requires common carriers to observe extraordinary diligence in the vigilance over the safety of passengers.
• Article 1755 of the Civil Code — Defines extraordinary diligence for passenger safety as carrying passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons.
• Article 1756 of the Civil Code — Presumes common carriers to be at fault or negligent in case of death or injury to passengers, which presumption can only be overcome by proof of extraordinary diligence.
• Article 1759 of the Civil Code — States that common carriers are liable for the death or injuries to passengers through the negligence of employees, and this liability does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of employees.
• Article 1170 of the Civil Code — Makes parties liable for damages if they are guilty of fraud, negligence, or delay, or if they in any manner contravene the tenor of their obligations.
• Article 2210 of the Civil Code — Allows interest, in the discretion of the court, upon damages awarded for breach of contract.
• Article 1409(1) of the Civil Code — Provides that contracts whose cause, object or purpose is contrary to public policy are void and inexistent.