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11/9/2017 G.R. No.

157917

RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.157917August29,2012

SPOUSESTEODORO1andNANETTEPERENA,Petitioners,
vs.

SPOUSESTERESITAPHILIPPINENICOLASandL.ZARATE,NATIONALRAILWAYS,andtheCOURTOF
APPEALSRespondents.

DECISION

BERSAMIN,J.:

The operator of a. school bus service is a common carrier in the eyes of the law. He is bound to observe
extraordinarydiligenceintheconductofhisbusiness.Heispresumedtobenegligentwhendeathoccurstoa
passenger.Hisliabilitymayincludeindemnityforlossofearningcapacityevenifthedeceasedpassengermay
onlybeanunemployedhighschoolstudentatthetimeoftheaccident.

TheCase

Bypetitionforreviewoncertiorari,SpousesTeodoroandNanettePerefia(Perefias)appealtheadversedecision
promulgatedonNovember13,2002,bywhichtheCourtofAppeals(CA)affirmedwithmodificationthedecision
rendered on December 3, 1999 by the Regional Trial Court (RTC), Branch 260, in Paraaque City that had
decreedthemjointlyandseverallyliablewithPhilippineNationalRailways(PNR),theircodefendant,toSpouses
NicolasandTeresitaZarate(Zarates)forthedeathoftheir15yearoldson,AaronJohnL.Zarate(Aaron),thena
highschoolstudentofDonBoscoTechnicalInstitute(DonBosco).

Antecedents

The Pereas were engaged in the business of transporting students from their respective residences in
ParaaqueCitytoDonBoscoinPasongTamo,MakatiCity,andback.Intheirbusiness,thePereasusedaKIA
CeresVan(van)withPlateNo.PYA896,whichhadthecapacitytotransport14studentsatatime,twoofwhom
wouldbeseatedinthefrontbesidethedriver,andtheothersintherear,withsixstudentsoneitherside.They
employedClementeAlfaro(Alfaro)asdriverofthevan.

In June 1996, the Zarates contracted the Pereas to transport Aaron to and from Don Bosco. On August 22,
1996,asonpreviousschooldays,thevanpickedAaronuparound6:00a.m.fromtheZaratesresidence.Aaron
tookhisplaceontheleftsideofthevannearthereardoor.Thevan,withitsairconditioningunitturnedonand
thestereoplayingloudly,ultimatelycarriedallthe14studentridersontheirwaytoDonBosco.Consideringthat
thestudentsweredueatDonBoscoby7:15a.m.,andthattheywerealreadyrunninglatebecauseoftheheavy
vehicular traffic on the South Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by
traversing the narrow path underneath the Magallanes Interchange that was then commonly used by Makati
bound vehicles as a short cut into Makati. At the time, the narrow path was marked by piles of construction
materialsandparkedpassengerjeepneys,andtherailroadcrossinginthenarrowpathhadnorailroadwarning
signs,orwatchmen,orotherresponsiblepersonsmanningthecrossing.Infact,thebamboobarandillawasup,
leavingtherailroadcrossingopentotraversingmotorists.

At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train), operated by
JhonnyAlano(Alano),wasinthevicinityoftheMagallanesInterchangetravellingnorthbound.Asthetrainneared
therailroadcrossing,Alfarodrovethevaneastwardacrosstherailroadtracks,closelytailingalargepassenger
bus.Hisviewoftheoncomingtrainwasblockedbecauseheovertookthepassengerbusonitsleftside.Thetrain
blewitshorntowarnmotoristsofitsapproach.Whenthetrainwasabout50metersawayfromthepassenger
busandthevan,Alanoappliedtheordinarybrakesofthetrain.Heappliedtheemergencybrakesonlywhenhe
sawthatacollisionwasimminent.Thepassengerbussuccessfullycrossedtherailroadtracks,butthevandriven
byAlfarodidnot.Thetrainhittherearendofthevan,andtheimpactthrewnineofthe12studentsintherear,
includingAaron,outofthevan.Aaronlandedinthepathofthetrain,whichdraggedhisbodyandseveredhis
head, instantaneously killing him. Alano fled the scene on board the train, and did not wait for the police
investigatortoarrive.

DevastatedbytheearlyandunexpecteddeathofAaron,theZaratescommencedthisactionfordamagesagainst
Alfaro, the Pereas, PNR and Alano. The Pereas and PNR filed their respective answers, with crossclaims
againsteachother,butAlfarocouldnotbeservedwithsummons.
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Atthepretrial,thepartiesstipulatedonthefactsandissues,viz:

A.FACTS:

(1) ThatspousesZaratewerethelegitimateparentsofAaronJohnL.Zarate

(2) Spouses Zarate engaged the services of spouses Perea for the adequate and safe
transportation carriage of the former spouses' son from their residence in Paraaque to his
schoolattheDonBoscoTechnicalInstituteinMakatiCity

(3) Duringtheeffectivityofthecontractofcarriageandintheimplementationthereof,Aaron,
the minor son of spouses Zarate died in connection with a vehicular/train collision which
occurredwhileAaronwasridingthecontractedcarrierKiaCeresvanofspousesPerea,then
driven and operated by the latter's employee/authorized driver Clemente Alfaro, which van
collidedwiththetrainofPNR,ataround6:45A.M.ofAugust22,1996,withinthevicinityofthe
MagallanesInterchangeinMakatiCity,MetroManila,Philippines

(4) Atthetimeofthevehicular/traincollision,thesubjectsiteofthevehicular/traincollision
wasarailroadcrossingusedbymotoristsforcrossingtherailroadtracks

(5) Duringthesaidtimeofthevehicular/traincollision,therewerenoappropriateandsafety
warningsignsandrailingsatthesitecommonlyusedforrailroadcrossing

(6) Atthematerialtime,countlessnumberofMakatiboundpublicutilityandprivatevehicles
usedonadailybasisthesiteofthecollisionasanalternativerouteandshortcuttoMakati

(7) The train driver or operator left the scene of the incident on board the commuter train
involvedwithoutwaitingforthepoliceinvestigator

(8) Thesitecommonlyusedforrailroadcrossingbymotoristswasnotinfactintendedbythe
railroadoperatorforrailroadcrossingatthetimeofthevehicularcollision

(9) PNRreceivedthedemandletterofthespousesZarate

(10) PNRrefusedtoacknowledgeanyliabilityforthevehicular/traincollision

(11) The eventual closure of the railroad crossing alleged by PNR was an internal
arrangementbetweentheformeranditsprojectcontractorand

(12) The site of the vehicular/train collision was within the vicinity or less than 100 meters
fromtheMagallanesstationofPNR.

B.ISSUES

(1)Whetherornotdefendantdriverofthevanis,intheperformanceofhisfunctions,liablefor
negligence constituting the proximate cause of the vehicular collision, which resulted in the
deathofplaintiffspouses'son

(2)WhetherornotthedefendantspousesPereabeingtheemployerofdefendantAlfaroare
liableforanynegligencewhichmaybeattributedtodefendantAlfaro

(3)WhetherornotdefendantPhilippineNationalRailwaysbeingtheoperatoroftherailroad
systemisliablefornegligenceinfailingtoprovideadequatesafetywarningsignsandrailings
in the area commonly used by motorists for railroad crossings, constituting the proximate
causeofthevehicularcollisionwhichresultedinthedeathoftheplaintiffspouses'son

(4)WhetherornotdefendantspousesPereaareliableforbreachofthecontractofcarriage
withplaintiffspousesinfailingtoprovideadequateandsafetransportationforthelatter'sson

(5) Whether or not defendants spouses are liable for actual, moral damages, exemplary
damages,andattorney'sfees

(6)WhetherornotdefendantsspousesTeodoricoandNanettePereaobservedthediligence
ofemployersandschoolbusoperators

(7)WhetherornotdefendantspousesarecivillyliablefortheaccidentaldeathofAaronJohn
Zarate
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(8) Whether or not defendant PNR was grossly negligent in operating the commuter train
involvedintheaccident,inallowingortoleratingthemotoringpublictocross,anditsfailureto
installsafetydevicesorequipmentatthesiteoftheaccidentfortheprotectionofthepublic

(9)WhetherornotdefendantPNRshouldbemadetoreimbursedefendantspousesforany
andwhateveramountthelattermaybeheldanswerableorwhichtheymaybeorderedtopay
infavorofplaintiffsbyreasonoftheaction

(10) Whether or not defendant PNR should pay plaintiffs directly and fully on the amounts
claimedbythelatterintheirComplaintbyreasonofitsgrossnegligence

(11) Whether or not defendant PNR is liable to defendants spouses for actual, moral and
exemplarydamagesandattorney'sfees.2

The Zarates claim against the Pereas was upon breach of the contract of carriage for the safe transport of
AaronbutthatagainstPNRwasbasedonquasidelictunderArticle2176,CivilCode.

Intheirdefense,thePereasadducedevidencetoshowthattheyhadexercisedthediligenceofagoodfatherof
thefamilyintheselectionandsupervisionofAlfaro,bymakingsurethatAlfarohadbeenissuedadriverslicense
andhadnotbeeninvolvedinanyvehicularaccidentpriortothecollisionthattheirownsonhadtakenthevan
dailyandthatTeodoroPereahadsometimesaccompaniedAlfarointhevanstripstransportingthestudentsto
school.

Foritspart,PNRtendedtoshowthattheproximatecauseofthecollisionhadbeentherecklesscrossingofthe
vanwhosedriverhadnotfirststopped,lookedandlistenedandthatthenarrowpathtraversedbythevanhad
notbeenintendedtobearailroadcrossingformotorists.

RulingoftheRTC

OnDecember3,1999,theRTCrendereditsdecision,3disposing:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
againstthedefendantsorderingthemtojointlyandseverallypaytheplaintiffsasfollows:

(1)(for)thedeathofAaronPhp50,000.00

(2)ActualdamagesintheamountofPhp100,000.00

(3)ForthelossofearningcapacityPhp2,109,071.00

(4)MoraldamagesintheamountofPhp4,000,000.00

(5)ExemplarydamagesintheamountofPhp1,000,000.00

(6)AttorneysfeesintheamountofPhp200,000.00and

(7)Costofsuit.

SOORDERED.

OnJune29,2000,theRTCdeniedthePereasmotionforreconsideration,4reiteratingthatthecooperativegross
negligence of the Pereas and PNR had caused the collision that led to the death of Aaron and that the
damagesawardedtotheZarateswerenotexcessive,butbasedontheestablishedcircumstances.

TheCAsRuling

BoththePereasandPNRappealed(C.A.G.R.CVNo.68916).

PNRassignedthefollowingerrors,towit:5

TheCourtaquoerredin:

1. In finding the defendantappellant Philippine National Railways jointly and severally liable
together with defendantappellants spouses Teodorico and Nanette Perea and defendant
appellant Clemente Alfaro to pay plaintiffsappellees for the death of Aaron Zarate and
damages.

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2.Ingivingfullfaithandmerittotheoraltestimoniesofplaintiffsappelleeswitnessesdespite
overwhelmingdocumentaryevidenceonrecord,supportingthecaseofdefendantsappellants
PhilippineNationalRailways.

ThePereasascribedthefollowingerrorstotheRTC,namely:

Thetrialcourterredinfindingdefendantsappellantsjointlyandseverallyliableforactual,moraland
exemplarydamagesandattorneysfeeswiththeotherdefendants.

The trial court erred in dismissing the crossclaim of the appellants Pereas against the Philippine
National Railways and in not holding the latter and its train driver primarily responsible for the
incident.

Thetrialcourterredinawardingexcessivedamagesandattorneysfees.

Thetrialcourterredinawardingdamagesintheformofdeceasedslossofearningcapacityinthe
absenceofsufficientbasisforsuchanaward.

OnNovember13,2002,theCApromulgateditsdecision,affirmingthefindingsoftheRTC,butlimitedthemoral
damagesto2,500,000.00anddeletedtheattorneysfeesbecausetheRTCdidnotstatethefactualandlegal
bases,towit:6

WHEREFORE,premisesconsidered,theassailedDecisionoftheRegionalTrialCourt,Branch260
ofParaaqueCityisAFFIRMEDwiththemodificationthattheawardofActualDamagesisreduced
to59,502.76MoralDamagesisreducedto2,500,000.00andtheawardforAttorneysFeesis
Deleted.

SOORDERED.

TheCAupheldtheawardforthelossofAaronsearningcapacity,takingcognizanceoftherulinginCariagav.
Laguna Tayabas Bus Company and Manila Railroad Company,7 wherein the Court gave the heirs of Cariaga a
sumrepresentingthelossofthedeceasedsearningcapacitydespiteCariagabeingonlyamedicalstudentatthe
timeofthefatalincident.ApplyingtheformulaadoptedintheAmericanExpectancyTableofMortality:

2/3x(80ageatthetimeofdeath)=lifeexpectancy

theCAdeterminedthelifeexpectancyofAarontobe39.3yearsuponreckoninghislifeexpectancyfromageof
21(theagewhenhewouldhavegraduatedfromcollegeandstartedworkingforhisownlivelihood)insteadof15
years(hisagewhenhedied).ConsideringthatthenatureofhisworkandhissalaryatthetimeofAaronsdeath
wereunknown,itusedtheprevailingminimumwageof280.00/daytocomputeAaronsgrossannualsalaryto
be110,716.65,inclusiveofthethirteenthmonthpay.MultiplyingthisannualsalarybyAaronslifeexpectancyof
39.3years,hisgrossincomewouldaggregateto4,351,164.30,fromwhichhisestimatedexpensesinthesum
of2,189,664.30wasdeductedtofinallyarriveatP2,161,500.00asnetincome.DuetoAaronscomputednet
income turning out to be higher than the amount claimed by the Zarates, only 2,109,071.00, the amount
expresslyprayedforbythem,wasgranted.

OnApril4,2003,theCAdeniedthePereasmotionforreconsideration.8

Issues

Inthisappeal,thePereaslistthefollowingastheerrorscommittedbytheCA,towit:

I. The lower court erred when it upheld the trial courts decision holding the petitioners jointly and
severally liable to pay damages with Philippine National Railways and dismissing their crossclaim
againstthelatter.

II.Thelowercourterredinaffirmingthetrialcourtsdecisionawardingdamagesforlossofearning
capacityofaminorwhowasonlyahighschoolstudentatthetimeofhisdeathintheabsenceof
sufficientbasisforsuchanaward.

III. The lower court erred in not reducing further the amount of damages awarded, assuming
petitionersareliableatall.

Ruling

Thepetitionhasnomerit.

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1.

WerethePereasandPNRjointly
andseverallyliablefordamages?

The Zarates brought this action for recovery of damages against both the Pereas and the PNR, basing their
claimagainstthePereasonbreachofcontractofcarriageandagainstthePNRonquasidelict.

TheRTCfoundthePereasandthePNRnegligent.TheCAaffirmedthefindings.

WeconcurwiththeCA.

To start with, the Pereas defense was that they exercised the diligence of a good father of the family in the
selectionandsupervisionofAlfaro,thevandriver,byseeingtoitthatAlfarohadadriverslicenseandthathehad
notbeeninvolvedinanyvehicularaccidentpriortothefatalcollisionwiththetrainthattheyevenhadtheirown
sontraveltoandfromschoolonadailybasisandthatTeodoroPereahimselfsometimesaccompaniedAlfaro
in transporting the passengers to and from school. The RTC gave scant consideration to such defense by
regardingsuchdefenseasinappropriateinanactionforbreachofcontractofcarriage.

We find no adequate cause to differ from the conclusions of the lower courts that the Pereas operated as a
commoncarrierandthattheirstandardofcarewasextraordinarydiligence,nottheordinarydiligenceofagood
fatherofafamily.

Although in this jurisdiction the operator of a school bus service has been usually regarded as a private
carrier,9primarily because he only caters to some specific or privileged individuals, and his operation is neither
opentotheindefinitepublicnorforpublicuse,theexactnatureoftheoperationofaschoolbusservicehasnot
beenfinallysettled.Thisistheoccasiontolaythemattertorest.

Acarrierisapersonorcorporationwhoundertakestotransportorconveygoodsorpersonsfromoneplaceto
another,gratuitouslyorforhire.Thecarrierisclassifiedeitherasaprivate/specialcarrierorasacommon/public
carrier.10Aprivatecarrierisonewho,withoutmakingtheactivityavocation,orwithoutholdinghimselforitselfout
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.11TheprovisionsonordinarycontractsoftheCivilCodegovernthecontractofprivatecarriage.Thediligence
required of a private carrier is only ordinary, that is, the diligence of a good father of the family. In contrast, a
commoncarrierisaperson,corporation,firmorassociationengagedinthebusinessofcarryingortransporting
passengers or goods or both, by land, water, or air, for compensation, offering such services to the
public.12ContractsofcommoncarriagearegovernedbytheprovisionsoncommoncarriersoftheCivilCode,the
Public Service Act,13 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
effectsofpassengers,orthedeathorinjuriestopassengers.14

In relation to common carriers, the Court defined public use in the following terms in United States v. Tan
Piaco,15viz:

"Public use" is the same as "use by the public". The essential feature of the public use is not
confined to privileged individuals, but is open to the indefinite public. It is this indefinite or
unrestrictedqualitythatgivesititspubliccharacter.Indeterminingwhetherauseispublic,wemust
looknotonlytothecharacterofthebusinesstobedone,butalsototheproposedmodeofdoingit.
If the use is merely optional with the owners, or the public benefit is merely incidental, it is not a
publicuse,authorizingtheexerciseofthejurisdictionofthepublicutilitycommission.Theremustbe,
ingeneral,arightwhichthelawcompelstheownertogivetothegeneralpublic.Itisnotenoughthat
thegeneralprosperityofthepublicispromoted.Publicuseisnotsynonymouswithpublicinterest.
Thetruecriterionbywhichtojudgethecharacteroftheuseiswhetherthepublicmayenjoyitby
rightoronlybypermission.

InDeGuzmanv.CourtofAppeals,16 theCourtnotedthatArticle1732oftheCivilCodeavoidedanydistinction
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,
fromoneofferinghisservicesonlytoanarrowsegmentofthegeneralpopulation.

Nonetheless,theconceptofacommoncarrierembodiedinArticle1732oftheCivilCodecoincidesneatlywith
thenotionofpublicserviceunderthePublicServiceAct,whichsupplementsthelawoncommoncarriersfoundin
theCivilCode.Publicservice,accordingtoSection13,paragraph(b)ofthePublicServiceAct,includes:

xxxeverypersonthatnoworhereaftermayown,operate,manage,orcontrolinthePhilippines,for
hireorcompensation,withgeneralorlimitedclientle,whetherpermanentoroccasional,anddone
for the general business purposes, any common carrier, railroad, street railway, traction railway,
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subway motor vehicle, either for freight or passenger, or both, with or without fixed route and
whatevermaybeitsclassification,freightorcarrierserviceofanyclass,expressservice,steamboat,
orsteamshipline,pontines,ferriesandwatercraft,engagedinthetransportationofpassengersor
freight or both, shipyard, marine repair shop, icerefrigeration plant, canal, irrigation system, gas,
electriclight,heatandpower,watersupplyandpowerpetroleum,seweragesystem,wireorwireless
communicationssystems,wireorwirelessbroadcastingstationsandothersimilarpublicservices.x
xx.17

Giventhebreadthoftheaforequotedcharacterizationofacommoncarrier,theCourthasconsideredascommon
carrierspipelineoperators,18custombrokersandwarehousemen,19andbargeoperators20eveniftheyhadlimited
clientle.

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
businessoroccupation.Iftheundertakingisasingletransaction,notapartofthegeneralbusinessoroccupation
engagedin,asadvertisedandheldouttothegeneralpublic,theindividualortheentityrenderingsuchserviceis
a private, not a common, carrier. The question must be determined by the character of the business actually
carriedonbythecarrier,notbyanysecretintentionormentalreservationitmayentertainorassertwhencharged
withthedutiesandobligationsthatthelawimposes.21

Applyingtheseconsiderationstothecasebeforeus,thereisnoquestionthatthePereasastheoperatorsofa
school bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual
occupation(b)undertakingtocarrypassengersoverestablishedroadsbythemethodbywhichthebusinesswas
conductedand(c)transportingstudentsforafee.Despitecateringtoalimitedclientle,thePereasoperatedas
acommoncarrierbecausetheyheldthemselvesoutasareadytransportationindiscriminatelytothestudentsof
aparticularschoollivingwithinornearwheretheyoperatedtheserviceandforafee.

Thecommoncarriersstandardofcareandvigilanceastothesafetyofthepassengersisdefinedbylaw.Given
thenatureofthebusinessandforreasonsofpublicpolicy,thecommoncarrierisbound"toobserveextraordinary
diligenceinthevigilanceoverthegoodsandforthesafetyofthepassengerstransportedbythem,accordingto
all the circumstances of each case."22 Article 1755 of the Civil Code specifies that the common carrier should
"carrythepassengerssafelyasfarashumancareandforesightcanprovide,usingtheutmostdiligenceofvery
cautiouspersons,withadueregardforallthecircumstances."Tosuccessfullyfendoffliabilityinanactionupon
the death or injury to a passenger, the common carrier must prove his or its observance of that extraordinary
diligenceotherwise,thelegalpresumptionthatheoritwasatfaultoractednegligentlywouldstand.23Nodevice,
whetherbystipulation,postingofnotices,statementsontickets,orotherwise,maydispensewithorlessenthe
responsibilityofthecommoncarrierasdefinedunderArticle1755oftheCivilCode.24

And,secondly,thePereashavenotpresentedanycompellingdefenseorreasonbywhichtheCourtmightnow
reversetheCAsfindingsontheirliability.Onthecontrary,anexaminationoftherecordsshowsthattheevidence
fullysupportedthefindingsoftheCA.

Asearlierstated,thePereas,actingasacommoncarrier,werealreadypresumedtobenegligentatthetimeof
the accident because death had occurred to their passenger.25 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.26 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
naturalconsequencesofsuchdeath.

ThereisnoquestionthatthePereasdidnotoverturnthepresumptionoftheirnegligencebycredibleevidence.
Their defense of having observed the diligence of a good father of a family in the selection and supervision of
theirdriverwasnotlegallysufficient.AccordingtoArticle1759oftheCivilCode,theirliabilityasacommoncarrier
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 Pereas as
inappropriateinthisactionforbreachofcontractofcarriage.

The Pereas were liable for the death of Aaron despite the fact that their driver might have acted beyond the
scopeofhisauthorityoreveninviolationoftheordersofthecommoncarrier.27 In this connection, the records
showed their drivers actual negligence. There was a showing, to begin with, that their driver traversed the
railroadtracksatapointatwhichthePNRdidnotpermitmotoristsgoingintotheMakatiareatocrosstherailroad
tracks.AlthoughthatpointhadbeenusedbymotoristsasashortcutintotheMakatiarea,thatfactalonedidnot
excusetheirdriverintotakingthatroute.Ontheotherhand,withhisfamiliaritywiththatshortcut,theirdriverwas
fullyawareoftheriskstohispassengersbuthestilldisregardedtherisks.Compoundinghislackofcarewasthat
loud music was playing inside the airconditioned van at the time of the accident. The loudness most probably
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reducedhisabilitytohearthewarninghornsoftheoncomingtraintoallowhimtocorrectlyappreciatethelurking
dangers on the railroad tracks. Also, he sought to overtake a passenger bus on the left side as both vehicles
traversedtherailroadtracks.Insodoing,helosthisviewofthetrainthatwasthencomingfromtheoppositeside
ofthepassengerbus,leadinghimtomiscalculatehischancesofbeatingthebusintheirrace,andofgettingclear
ofthetrain.Asaresult,thebusavoidedacollisionwiththetrainbutthevangotslammedatitsrear,causingthe
fatality.Lastly,hedidnotslowdownorgotoafullstopbeforetraversingtherailroadtracksdespiteknowingthat
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.28He thereby violated a specific traffic regulation on right of way, by
virtueofwhichhewasimmediatelypresumedtobenegligent.29

The omissions of care on the part of the van driver constituted negligence,30 which, according to Layugan v.
Intermediate Appellate Court,31 is "the omission to do something which a reasonable man, guided by those
considerationswhichordinarilyregulatetheconductofhumanaffairs,woulddo,orthedoingofsomethingwhich
a prudent and reasonable man would not do,32 or as Judge Cooley defines it, (t)he failure to observe for the
protection of the interests of another person, that degree of care, precaution, and vigilance which the
circumstancesjustlydemand,wherebysuchotherpersonsuffersinjury."33

Thetestbywhichtodeterminetheexistenceofnegligenceinaparticularcasehasbeenaptlystated
intheleadingcaseofPicartv.Smith,34thuswise:

The test by which to determine the existence of negligence in a particular case may be stated as
follows:Didthedefendantindoingtheallegednegligentactusethatreasonablecareandcaution
whichanordinarilyprudentpersonwouldhaveusedinthesamesituation?Ifnot,thenheisguiltyof
negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conductofthediscreetpaterfamiliasoftheRomanlaw.Theexistenceofnegligenceinagivencase
isnotdeterminedbyreferencetothepersonaljudgmentoftheactorinthesituationbeforehim.The
lawconsiderswhatwouldbereckless,blameworthy,ornegligentinthemanofordinaryintelligence
andprudenceanddeterminesliabilitybythat.

Thequestionastowhatwouldconstitutetheconductofaprudentmaninagivensituationmustof
coursebealwaysdeterminedinthelightofhumanexperienceandinviewofthefactsinvolvedin
the particular case. Abstract speculation cannot here be of much value but this much can be
profitablysaid:Reasonablemengoverntheirconductbythecircumstanceswhicharebeforethem
orknowntothem.Theyarenot,andarenotsupposedtobe,omniscientofthefuture.Hencethey
can be expected to take care only when there is something before them to suggest or warn of
danger. Could a prudent man, in the case under consideration, foresee harm as a result of the
courseactuallypursued?Ifso,itwasthedutyoftheactortotakeprecautionstoguardagainstthat
harm. Reasonable foresight of harm, followed by the ignoring of the suggestion born of this
prevision, is always necessary before negligence can be held to exist. Stated in these terms, the
propercriterionfordeterminingtheexistenceofnegligenceinagivencaseisthis:Conductissaidto
benegligentwhenaprudentmaninthepositionofthetortfeasorwouldhaveforeseenthataneffect
harmfultoanotherwassufficientlyprobabletowarranthisforegoingtheconductorguardingagainst
itsconsequences.(Emphasissupplied)

PursuanttothePicartv.Smithtestofnegligence,thePereasdriverwasentirelynegligentwhenhetraversed
therailroadtracksatapointnotallowedforamotoristscrossingdespitebeingfullyawareofthegraveharmto
be thereby caused to his passengers and when he disregarded the foresight of harm to his passengers by
overtakingthebusontheleftsideastoleavehimselfblindtotheapproachoftheoncomingtrainthatheknew
wasontheoppositesideofthebus.

Unrelenting,thePereascitePhil.NationalRailwaysv.IntermediateAppellateCourt,35wheretheCourtheldthe
PNRsolelyliableforthedamagescausedtoapassengerbusanditspassengerswhenitstrainhittherearend
ofthebusthatwasthentraversingtherailroadcrossing.Butthecircumstancesofthatcaseandthisoneshare
no similarities. In Philippine National Railways v. Intermediate Appellate Court, no evidence of contributory
negligence was adduced against the owner of the bus. Instead, it was the owner of the bus who proved the
exerciseofextraordinarydiligencebypreponderantevidence.Also,therecordsarerepletewiththeshowingof
negligence on the part of both the Pereas and the PNR. Another distinction is that the passenger bus in
PhilippineNationalRailwaysv.IntermediateAppellateCourtwastraversingthededicatedrailroadcrossingwhen
itwashitbythetrain,butthePereasschoolvantraversedtherailroadtracksatapointnotintendedforthat
purpose.

At any rate, the lower courts correctly held both the Pereas and the PNR "jointly and severally" liable for
damages arising from the death of Aaron. They had been impleaded in the same complaint as defendants
againstwhomtheZarateshadtherighttorelief,whetherjointly,severally,orinthealternative,inrespecttoor
arisingoutoftheaccident,andquestionsoffactandoflawwerecommonastotheZarates.36Althoughthebasis
oftherighttoreliefoftheZarates(i.e.,breachofcontractofcarriage)againstthePereaswasdistinctfromthe
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basis of the Zarates right to relief against the PNR (i.e., quasidelict under Article 2176, Civil Code), they
nonethelesscouldbeheldjointlyandseverallyliablebyvirtueoftheirrespectivenegligencecombiningtocause
thedeathofAaron.AstothePNR,theRTCrightlyfoundthePNRalsoguiltyofnegligencedespitetheschool
vanofthePereastraversingtherailroadtracksatapointnotdedicatedbythePNRasarailroadcrossingfor
pedestriansandmotorists,becausethePNRdidnotensurethesafetyofothersthroughtheplacingofcrossbars,
signallights,warningsigns,andotherpermanentsafetybarrierstopreventvehiclesorpedestriansfromcrossing
there.TheRTCobservedthatthefactthatacrossingguardhadbeenassignedtomanthatpointfrom7a.m.to5
p.m. was a good indicium that the PNR was aware of the risks to others as well as the need to control the
vehicularandothertrafficthere.Verily,thePereasandthePNRwerejointtortfeasors.

2.

Wastheindemnityforlossof

Aaronsearningcapacityproper?

TheRTCawardedindemnityforlossofAaronsearningcapacity.AlthoughagreeingwiththeRTContheliability,
the CA modified the amount. Both lower courts took into consideration that Aaron, while only a high school
student,hadbeenenrolledinoneofthereputableschoolsinthePhilippinesandthathehadbeenanormaland
ablebodiedchildpriortohisdeath.ThebasisforthecomputationofAaronsearningcapacitywasnotwhathe
wouldhavebecomeorwhathewouldhavewantedtobeifnotforhisuntimelydeath,buttheminimumwagein
effectatthetimeofhisdeath.Moreover,theRTCscomputationofAaronslifeexpectancyratewasnotreckoned
fromhisageof15yearsatthetimeofhisdeath,buton21years,hisagewhenhewouldhavegraduatedfrom
college.

Wefindtheconsiderationstakenintoaccountbythelowercourtstobereasonableandfullywarranted.

Yet, the Pereas submit that the indemnity for loss of earning capacity was speculative and unfounded. They 1wphi1

cited People v. Teehankee, Jr.,37 where the Court deleted the indemnity for victim Jussi Leinos loss of earning
capacityasapilotforbeingspeculativeduetohishavinggraduatedfromhighschoolattheInternationalSchool
in Manila only two years before the shooting, and was at the time of the shooting only enrolled in the first
semesterattheManilaAeroClubtopursuehisambitiontobecomeaprofessionalpilot.Thatmeant,accordingto
theCourt,thathewasforallintentsandpurposesonlyahighschoolgraduate.

WerejectthePereassubmission.

Firstofall,acarefulperusaloftheTeehankee,Jr.caseshowsthatthesituationthereofJussiLeinowasnotakin
to that of Aaron here. The CA and the RTC were not speculating that Aaron would be some highlypaid
professional, like a pilot (or, for that matter, an engineer, a physician, or a lawyer). Instead, the computation of
Aarons earning capacity was premised on him being a lowly minimum wage earner despite his being then
enrolledataprestigioushighschoollikeDonBoscoinMakati,afactthatwouldhavelikelyensuredhissuccess
inhislateryearsinlifeandatwork.

And,secondly,thefactthatAaronwasthenwithoutahistoryofearningsshouldnotbetakenagainsthisparents
and in favor of the defendants whose negligence not only cost Aaron his life and his right to work and earn
money,butalsodeprivedhisparentsoftheirrighttohispresenceandhisservicesaswell.Ourlawitselfstates
thatthelossoftheearningcapacityofthedeceasedshallbetheliabilityoftheguiltypartyinfavoroftheheirsof
thedeceased,andshallineverycasebeassessedandawardedbythecourt"unlessthedeceasedonaccountof
permanent physical disability not caused by the defendant, had no earning capacity at the time of his
death."38 Accordingly, we emphatically hold in favor of the indemnification for Aarons loss of earning capacity
despite him having been unemployed, because compensation of this nature is awarded not for loss of time or
earningsbutforlossofthedeceasedspowerorabilitytoearnmoney.39

ThisfavorabletreatmentoftheZaratesclaimisnotunprecedented.InCariagav.LagunaTayabasBusCompany
and Manila Railroad Company,40 fourthyear medical student Edgardo Carriagas earning capacity, although he
survived the accident but his injuries rendered him permanently incapacitated, was computed to be that of the
physician that he dreamed to become. The Court considered his scholastic record sufficient to justify the
assumption that he could have finished the medical course and would have passed the medical board
examinations in due time, and that he could have possibly earned a modest income as a medical practitioner.
Also,inPeoplev.Sanchez,41 theCourtopinedthatmurderandrapevictimEileenSarmientaandmurdervictim
Allan Gomez could have easily landed goodpaying jobs had they graduated in due time, and that their jobs
would probably pay them high monthly salaries from 10,000.00 to 15,000.00 upon their graduation. Their
earningcapacitieswerecomputedatrateshigherthantheminimumwageatthetimeoftheirdeathsduetotheir
beingalreadysenioragriculturestudentsoftheUniversityofthePhilippinesinLosBaos,thecountrysleading
educationalinstitutioninagriculture.

3.

Weretheamountsofdamagesexcessive?
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The Pereas plead for the reduction of the moral and exemplary damages awarded to the Zarates in the
respectiveamountsof2,500,000.00and1,000,000.00onthegroundthatsuchamountswereexcessive.

Thepleaisunwarranted.

Themoraldamagesof2,500,000.00werereallyjustandreasonableundertheestablishedcircumstancesof
thiscasebecausetheywereintendedbythelawtoassuagetheZaratesdeepmentalanguishovertheirsons
unexpectedandviolentdeath,andtheirmoralshockoverthesenselessaccident.Thatamountwouldnotbetoo
much,consideringthatitwouldhelptheZaratesobtainthemeans,diversionsoramusementsthatwouldalleviate
their suffering for the loss of their child. At any rate, reducing the amount as excessive might prove to be an
injustice,giventhepassageofalongtimefromwhentheirmentalanguishwasinflictedonthemonAugust22,
1996.

Anent the 1,000,000.00 allowed as exemplary damages, we should not reduce the amount if only to render
effective the desired example for the public good. As a common carrier, the Pereas needed to be vigorously
remindedtoobservetheirdutytoexerciseextraordinarydiligencetopreventasimilarlysenselessaccidentfrom
happening again. Only by an award of exemplary damages in that amount would suffice to instill in them and
others similarly situated like them the everpresent need for greater and constant vigilance in the conduct of a
businessimbuedwithpublicinterest.

WHEREFORE,weDENYthe petition for review oncertiorariAFFIRMthe decision promulgated on November


13,2002andORDERthepetitionerstopaythecostsofsuit.

SOORDERED.

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