Sps Perena vs Sps Nicolas

FACTS

Sps Perena were engaged in the business of transporting students from Paranaque to Don Bosco
in Makati. They employed Clemente Alfaro as the driver of the Kia Ceres van. Sps Zarate contracted
petitioners to transport their son Aaron to and from Don Bosco.

On August 22, 1996, the van picked up Aaron around 6am from Zarate’s residence. The van
carried all 14 students (max capacity) with the ac turned on and the stereo playing loudly. As they were
already running late because of heavy traffic, Alfaro took the van to an alternate route by traversing a
narrow path under Magallanes Interchange, which at that time was marked by piles of construction
materials and parked passenger jeepneys, and the railroad crossing had no warning signs or watchmen,
even the bamboo barandilla was up, leaving the railroad crossing open.

About the time the van is about to traverse the crossing, a PNR train was also travelling around
the area. As it neared the crossing, Alfaro overtook a passenger bus on its left side, hence, blocking his
view of an incoming train. The train blew its horn and applied the ordinary brakes. But when the
collision seems imminent, the emergency brakes was also applied. The train hit the rear end of the van,
throwing 9 of the 12 students out of the van, including Aaron. He landed on the path of the train which
dragged his body and severed his head.

Zarates then filed an action for damages against Alfaro (van driver), Pereneas (van operator),
PNR and Alano (train operator). They claimed that the Perenas committed breach of contract of carriage
for the safe transport of Aaron; while against PNR was based on torts.

In their defense, the Pereñas adduced evidence to show that they had exercised the diligence of
a good father of the family in the selection and supervision of Alfaro, by making sure that Alfaro had
been issued a driver’s 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 Pereña had sometimes accompanied
Alfaro in the van’s 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.

The RTC ruled that defendants are jointly and severally liable to pay the plaintiffs. It denied
Perenas’ MR reiterating that the cooperative gross negligence of defendants had caused the collision
that lead to Aaron’s death.

The CA affirmed the decision, including the award for loss of Aaron’s earning capacity, applying
LTBC vs Manila Railroad Company. (2/3 x {80- age at the time of death} = life expectancy)
ISSUE

WON Perenas should be absolved from liability because they had exercised the diligence of a good
father of the family in the selection and supervision of Alfaro

RULING

Perenas’ defense of diligence is inappropriate in an action for breach of contract of carriage.

Perenas operated as a common carrier, and that their standard of care was extraordinary diligence, not
the ordinary diligence of a good father.

A carrier is a person or corporation who undertakes to transport or convey goods or persons

from one place to another, gratuitously or for hire. The carrier is classified either as a private/special
carrier or as a common/public carrier. A private carrier is one who, without making the activity a
vocation, or without holding himself or itself out to the public as ready to act for all who may desire his
or its services, undertakes, by special agreement in a particular instance only, to transport goods or
persons from one place to another either gratuitously or for hire. The provisions on ordinary contracts
of the Civil Code govern the contract of private carriage. The diligence required of a private carrier is
only ordinary, that is, the diligence of a good father of the family. In contrast, a common carrier is a
person, corporation, firm or association engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation, offering such services to the
public. Contracts of common carriage are governed by the provisions on common carriers of the Civil
Code, the Public Service Act, and other special laws relating to transportation. A common carrier is
required to observe extraordinary diligence, and is presumed to be at fault or to have acted
negligently in case of the loss of the effects of passengers, or the death or injuries to passengers.

In De Guzman v. Court of Appeals, the Court noted that Article 1732 of the Civil Code avoided
any distinction between a person or an enterprise offering transportation on a regular or an isolated
basis; and has not distinguished a carrier offering his services to the general public, that is, the general
community or population, from one offering his services only to a narrow segment of the general
population. Nonetheless, the concept of a common carrier embodied in Article 1732 of the Civil Code
coincides neatly with the notion of public service under the Public Service Act, which supplements the
law on common carriers found in the Civil Code, includes:
x x x every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientèle, whether permanent or
occasional, and done for the general business purposes, any common carrier, railroad, street
railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or
without fixed route and whatever may be its classification, freight or carrier service of any class,
express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both, shipyard, marine repair shop, ice-refrigeration
plant, canal, irrigation system, gas, electric light, heat and power, water supply and power
petroleum, sewerage system, wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services. x x x.
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.
Applying these considerations to the case before us, there is no question that the Pereñas as the
operators of a school bus service were: (a) engaged in transporting passengers generally as a business,
not just as a casual occupation; (b) undertaking to carry passengers over established roads by the
method by which the business was conducted; and (c) transporting students for a fee . Despite catering
to a limited clientèle, the Pereñas operated as a common carrier because they held themselves out as a
ready transportation indiscriminately to the students of a particular school living within or near where
they operated the service and for a fee.
The common carrier’s standard of care and vigilance as to the safety of the passengers is
defined by law. Given the nature of the business and for reasons of public policy, the common carrier is
bound "to observe 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." 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. 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.
The Pereñas, acting as a common carrier, were already presumed to be negligent at the time of
the accident because death had occurred to their passenger. The presumption of negligence, being a
presumption of law, laid the burden of evidence on their shoulders to establish that they had not been
negligent. It was the law no less that required them to prove their observance of extraordinary diligence
in seeing to the safe and secure carriage of the passengers to their destination. Until they did so in a
credible manner, they stood to be held legally responsible 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 Pereñas 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 Pereñas as inappropriate in this action for breach of contract of carriage.
The Pereñas 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. In this
connection, the records showed their driver’s 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, 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.
He thereby violated a specific traffic regulation on right of way, by virtue of which he was immediately
presumed to be negligent.