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G.R. No. 157917 August 29, 2012

SPOUSES TEODORO1 and NANETTE PERENA, Petitioners,

vs.
SPOUSES TERESITA PHILIPPINE NICOLAS and L. ZARATE, NATIONAL RAILWAYS, and
the COURT OF APPEALS Respondents.

In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Perea to transport
their (Zarates) son, Aaron Zarate, to and from school. The Pereas were owners of a van being
used for private school transport.

At about 6:45am of August 22, 1996, the driver of the said private van, Clemente Alfaro, while
the children were on board including Aaron, decided to take a short cut in order to avoid traffic.
The usual short cut was a railroad crossing of the Philippine National Railway (PNR).

Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up
which means it was okay to cross. He then tried to overtake a bus. However, there was in fact
an oncoming train but Alfaro no longer saw the train as his view was already blocked by the bus
he was trying to overtake. The bus was able to cross unscathed but the vans rear end was hit.
During the collision, Aaron, was thrown off the van. His body hit the railroad tracks and his head
was severed. He was only 15 years old.

It turns out that Alfaro was not able to hear the train honking from 50 meters away before the
collision because the vans stereo was playing loudly.

The Zarates sued PNR and the Pereas, Pereas invoked that as private carriers they were not
negligent in selecting Alfaro as their driver as they made sure that he had a drivers license and
that he was not involved in any accident prior to his being hired. In short, they observed the
diligence of a good father in selecting their employee.

PNR also disclaimed liability as they insist that the railroad crossing they placed there was not
meant for railroad crossing.

The Pereas argued that the award was improper as Aaron was merely a high school student,
hence, the award of such damages was merely speculative. They cited the case of People vs
Teehankee where the Supreme Court did not award damages for the loss of earning capacity
despite the fact that the victim there was enrolled in a pilot school.

ISSUES: Whether or not the defense of due diligence of a good father by the Pereas is
untenable. Whether or not the award of damages for loss of income is proper.

HELD: Yes, in both issues.

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Defense of Due Diligence of a Good Father

This defense is not tenable in this case. The Pereas are common carriers. They are not merely
private carriers. (Prior to this case, the status of private transport for school services or school
buses is not well settled as to whether or not they are private or common carriers but they
were generally regarded as private carriers). Private transport for schools are common carriers.
The Pereas, 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 clientle, the Pereas 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.

Being a common carrier, what is required of the Pereas is not mere diligence of a good father.
What is specifically required from them by law is extraordinary diligence a fact which they
failed to prove in court. Verily, their obligation as common carriers did not cease upon their
exercise of diligently choosing Alfaro as their employee.

(It is recommended that you read the full text, the Supreme Court made an elaborate and
extensive definition of common and private carriers as well as their distinctions.)

Award of Damages for Aarons loss of earning capacity despite he being a high school student
at the time of his death

The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was of normal
health and was an able-bodied person. Further, the basis of the computation of his earning
capacity was not on what he would have become. It was based on the current minimum wage.
The minimum wage was validly used because with his circumstances at the time of his death, it
is most certain that had he lived, he would at least be a minimum wage earner by the time he
starts working. This is not being speculative at all.

The Teehankee case was different because in that case, the reason why no damages were
awarded for loss of earning capacity was that the defendants there were already assuming that
the victim would indeed become a pilot hence, that made the assumption speculative. But in
the case of Aaron, there was no speculation as to what he might be but whatever hell
become, it is certain that he will at the least be earning minimum wage.