G.R. No. 209969 - Sanico v. Colipano
G.R. No. 209969 - Sanico v. Colipano
Colipano
SECOND DIVISION
DECISION
CAGUIOA, J : p
Before the Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court
filed by petitioners Jose Sanico (Sanico) and Vicente Castro (Castro), assailing the Decision 2 dated
September 30, 2013 of the Court of Appeals (CA) in CA-G.R. CEB-CV No. 01889. The CA
affirmed with modification the Decision 3 dated October 27, 2006 of the Regional Trial Court,
Branch 25, Danao City (RTC) which found Sanico and Castro liable for breach of contract of
carriage and awarded actual and compensatory damages for loss of income in favor of respondent
Werherlina P. Colipano (Colipano). The CA reduced the compensatory damages that the RTC
awarded. CAIHTE
Antecedents
Colipano filed a complaint on January 7, 1997 for breach of contract of carriage and damages
against Sanico and Castro. 4 In her complaint, Colipano claimed that at 4:00 P.M. more or less of
December 25, 1993, Christmas Day, she and her daughter were paying passengers in the jeepney
operated by Sanico, which was driven by Castro. 5 Colipano claimed she was made to sit on an
empty beer case at the edge of the rear entrance/exit of the jeepney with her sleeping child on her
lap. 6 And, at an uphill incline in the road to Natimao-an, Carmen, Cebu, the jeepney slid backwards
because it did not have the power to reach the top. 7 Colipano pushed both her feet against the step
board to prevent herself and her child from being thrown out of the exit, but because the step board
was wet, her left foot slipped and got crushed between the step board and a coconut tree which the
jeepney bumped, causing the jeepney to stop its backward movement. 8 Colipano's leg was badly
injured and was eventually amputated. 9 Colipano prayed for actual damages, loss of income, moral
damages, exemplary damages, and attorney's fees. 10
In their answer, Sanico and Castro admitted that Colipano's leg was crushed and amputated
but claimed that it was Colipano's fault that her leg was crushed. 11 They admitted that the jeepney
slid backwards because the jeepney lost power. 12 The conductor then instructed everyone not to
panic but Colipano tried to disembark and her foot got caught in between the step board and the
coconut tree. 13 Sanico claimed that he paid for all the hospital and medical expenses of Colipano,
14 and that Colipano eventually freely and voluntarily executed an Affidavit of Desistance and
Release of Claim. 15
After trial, the RTC found that Sanico and Castro breached the contract of carriage between
them and Colipano but only awarded actual and compensatory damages in favor of Colipano. The
dispositive portion of the RTC Decision states:
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WHEREFORE, premises considered, this Court finds the defendants LIABLE for
breach of contract of carriage and are solidarily liable to pay plaintiff:
1. Actual damages in the amount of P2,098.80; and
2. Compensatory damages for loss of income in the amount of P360,000.00.
No costs.
SO ORDERED. 16
Only Sanico and Castro appealed to the CA, which affirmed with modification the RTC
Decision. The dispositive portion of the CA Decision states:
IN LIGHT OF ALL THE FOREGOING, the instant appeal is PARTIALLY
GRANTED. The Decision dated October 27, 2006 of the Regional Trial Court, Branch 25,
Danao City, in Civil Case No. DNA-418, is AFFIRMED with MODIFICATION in that the
award for compensatory damages for loss of income in paragraph 2 of the dispositive portion
of the RTC's decision, is reduced to P200,000.00.
SO ORDERED. 17
Without moving for the reconsideration of the CA Decision, Sanico and Castro filed this
petition before the Court assailing the CA Decision.
Issues
a. Whether the CA erred in finding that Sanico and Castro breached the contract of
carriage with Colipano;
b. Whether the Affidavit of Desistance and Release of Claim is binding on Colipano; and
c. Whether the CA erred in the amount of damages awarded.
The Court's Ruling
The Court partly grants the petition.
Only Sanico breached the contract of
carriage.
Here, it is beyond dispute that Colipano was injured while she was a passenger in the jeepney
owned and operated by Sanico that was being driven by Castro. Both the CA and RTC found Sanico
and Castro jointly and severally liable. This, however, is erroneous because only Sanico was the
party to the contract of carriage with Colipano.
Since the cause of action is based on a breach of a contract of carriage, the liability of Sanico
is direct as the contract is between him and Colipano. Castro, being merely the driver of Sanico's
jeepney, cannot be made liable as he is not a party to the contract of carriage.
In Soberano v. Manila Railroad Co., 18 the Court ruled that a complaint for breach of a
contract of carriage is dismissible as against the employee who was driving the bus because the
parties to the contract of carriage are only the passenger, the bus owner, and the operator, viz.:
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; and consequent to the inability of the defendant companies to carry
Juana Soberano and her baggage and personal effects securely and safely to her destination as
imposed by law (art. 1733, in relation to arts. 1736 and 1755, N.C.C.), their liability to her
becomes direct and immediate. 19 DETACa
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Since Castro was not a party to the contract of carriage, Colipano had no cause of action
against him and the complaint against him should be dismissed. Although he was driving the
jeepney, he was a mere employee of Sanico, who was the operator and owner of the jeepney. The
obligation to carry Colipano safely to her destination was with Sanico. In fact, the elements of a
contract of carriage existed between Colipano and Sanico: consent, as shown when Castro, as
employee of Sanico, accepted Colipano as a passenger when he allowed Colipano to board the
jeepney, and as to Colipano, when she boarded the jeepney; cause or consideration, when Colipano,
for her part, paid her fare; and, object, the transportation of Colipano from the place of departure to
the place of destination. 20
Having established that the contract of carriage was only between Sanico and Colipano and
that therefore Colipano had no cause of action against Castro, the Court next determines whether
Sanico breached his obligations to Colipano under the contract.
Sanico is liable as operator and
owner of a common carrier.
Specific to a contract of carriage, the Civil Code requires common carriers to observe
extraordinary diligence in safely transporting their passengers. Article 1733 of the Civil Code states:
ART. 1733. Common carriers, from the nature of their business and for reasons of
public policy, are 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.
Such extraordinary diligence in the vigilance over the goods is further expressed in
Articles 1734, 1735 and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the
safety of the passengers is further set forth in Articles 1755 and 1756.
This extraordinary diligence, following Article 1755 of the Civil Code, means that common
carriers have the obligation to carry passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.
In case of death of or injury to their passengers, Article 1756 of the Civil Code provides that
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. 21
Being an operator and owner of a common carrier, Sanico was required to observe
extraordinary diligence in safely transporting Colipano. When Colipano's leg was injured while she
was a passenger in Sanico's jeepney, the presumption of fault or negligence on Sanico's part arose
and he had the burden to prove that he exercised the extraordinary diligence required of him. He
failed to do this.
In Calalas v. Court of Appeals, 22 the Court found that allowing the respondent in that case to
be seated in an extension seat, which was a wooden stool at the rear of the jeepney, "placed [the
respondent] in a peril greater than that to which the other passengers were exposed." 23 The Court
further ruled that the petitioner in Calalas was not only "unable to overcome the presumption of
negligence imposed on him for the injury sustained by [the respondent], but also, the evidence
shows he was actually negligent in transporting passengers." 24
Calalas squarely applies here. Sanico failed to rebut the presumption of fault or negligence
under the Civil Code. More than this, the evidence indubitably established Sanico's negligence when
Castro made Colipano sit on an empty beer case at the edge of the rear entrance/exit of the jeepney
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with her sleeping child on her lap, which put her and her child in greater peril than the other
passengers. As the CA correctly held:
For the driver, Vicente Castro, to allow a seat extension made of an empty case of beer
clearly indicates lack of prudence. Permitting Werherlina to occupy an improvised seat in the
rear portion of the jeepney, with a child on her lap to boot, exposed her and her child in a peril
greater than that to which the other passengers were exposed. The use of an improvised seat
extension is undeniable, in view of the testimony of plaintiff's witness, which is consistent
with Werherlina's testimonial assertion. Werherlina and her witness's testimony were accorded
belief by the RTC. Factual findings of the trial court are entitled to great weight on appeal and
should not be disturbed except for strong and valid reasons, because the trial court is in a
better position to examine the demeanor of the witnesses while testifying. 25
The CA also correctly held that the defense of engine failure, instead of exonerating Sanico,
only aggravated his already precarious position. 26 The engine failure "hinted lack of regular check
and maintenance to ensure that the engine is at its best, considering that the jeepney regularly passes
through a mountainous area." 27 This failure to ensure that the jeepney can safely transport
passengers through its route which required navigation through a mountainous area is proof of fault
on Sanico's part. In the face of such evidence, there is no question as to Sanico's fault or negligence.
Further, common carriers may also be liable for damages when they contravene the tenor of
their obligations. Article 1170 of the Civil Code states:
ART. 1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for
damages.
In Magat v. Medialdea, 28 the Court ruled: "The phrase 'in any manner contravene the tenor'
of the obligation includes any illicit act or omission which impairs the strict and faithful fulfillment
of the obligation and every kind of defective performance." 29 There is no question here that making
Colipano sit on the empty beer case was a clear showing of how Sanico contravened the tenor of his
obligation to safely transport Colipano from the place of departure to the place of destination as far
as human care and foresight can provide, using the utmost diligence of very cautious persons, and
with due regard for all the circumstances.
Sanico's attempt to evade liability by arguing that he exercised extraordinary diligence when
he hired Castro, who was allegedly an experienced and time-tested driver, whom he had even
accompanied on a test-drive and in whom he was personally convinced of the driving skills, 30 are
not enough to exonerate him from liability — because the liability of common carriers does not
cease upon proof that they exercised all the diligence of a good father of a family in the selection
and supervision of their employees. This is the express mandate of Article 1759 of the Civil Code:
aDSIHc
ART. 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or willful acts of the former's employees, although such employees
may have acted beyond the scope of their authority or in violation of the orders of the
common carriers.
This liability of the common carriers does not cease upon proof that they exercised all
the diligence of a good father of a family in the selection and supervision of their employees.
The only defenses available to common carriers are (1) proof that they observed
extraordinary diligence as prescribed in Article 1756, 31 and (2) following Article 1174 of the Civil
Code, proof that the injury or death was brought about by an event which "could not be foreseen, or
which, though foreseen, were inevitable," or a fortuitous event.
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The Court finds that neither of these defenses obtain. Thus, Sanico is liable for damages to
Colipano because of the injury that Colipano suffered as a passenger of Sanico's jeepney.
The Affidavit of Desistance and
Release of Claim is void.
Sanico cannot be exonerated from liability under the Affidavit of Desistance and Release of
Claim 32 and his payment of the hospital and medical bills of Colipano amounting to P44,900.00. 33
The RTC ruled that "the Affidavit of Desistance and Release of Claim is not binding on
plaintiff [Colipano] in the absence of proof that the contents thereof were sufficiently translated and
explained to her." 34 The CA affirmed the findings of the RTC and ruled that the document was not
binding on Colipano, as follows:
Finally, We sustain the RTC's finding that the affidavit of desistance and release of
claim, offered by defendants-appellants, are not binding on Werherlina, quoting with approval
its reflection on the matter, saying:
x x x this Court finds that the Affidavit of Desistance and Release of
Claim is not binding on plaintiff in the absence of proof that the contents
thereof were sufficiently explained to her. It is clear from the plaintiff's
circumstances that she is not able to understand English, more so stipulations
stated in the said Affidavit and Release. It is understandable that in her
pressing need, the plaintiff may have been easily convinced to sign the
document with the promise that she will be compensated for her injuries. 35
The Court finds no reason to depart from these findings of the CA and the RTC.
For there to be a valid waiver, the following requisites are essential:
(1) that the person making the waiver possesses the right, (2) that he has the capacity and
power to dispose of the right, (3) that the waiver must be clear and unequivocal although it
may be made expressly or impliedly, and (4) that the waiver is not contrary to law, public
policy, public order, morals, good customs or prejudicial to a third person with a right
recognized by law. 36
While the first two requirements can be said to exist in this case, the third and fourth
requirements are, however, lacking.
For the waiver to be clear and unequivocal, the person waiving the right should understand
what she is waiving and the effect of such waiver. Both the CA and RTC made the factual
determination that Colipano was not able to understand English and that there was no proof that the
documents and their contents and effects were explained to her. These findings of the RTC, affirmed
by the CA, are entitled to great weight and respect. 37 As this Court held in Philippine National
Railways Corp. v. Vizcara: 38
It is a well-established rule that factual findings by the CA are conclusive on the parties and
are not reviewable by this Court. They are entitled to great weight and respect, even finality,
especially when, as in this case, the CA affirmed the factual findings arrived at by the trial
court. 39
Although there are exceptions to this rule, 40 the exceptions are absent here.
Colipano could not have clearly and unequivocally waived her right to claim damages when
she had no understanding of the right she was waiving and the extent of that right. Worse, she was
made to sign a document written in a language she did not understand.
The fourth requirement for a valid waiver is also lacking as the waiver, based on the attendant
facts, can only be construed as contrary to public policy. The doctrine in Gatchalian v. Delim, 41
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Similar to Gatchalian, Colipano testified that she did not understand the document she
signed. 45 She also did not understand the nature and extent of her waiver as the content of the
document was not explained to her. 46 The waiver is therefore void because it is contrary to public
policy. 47
The Court reiterates that waivers executed under similar circumstances are indeed contrary to
public policy and are void. 48 To uphold waivers taken from injured passengers who have no
knowledge of their entitlement under the law and the extent of liability of common carriers would
indeed dilute the extraordinary diligence required from common carriers, and contravene a public
policy reflected in the Civil Code.
Amount of compensatory damages
granted is incorrect.
On the amount of damages, the RTC awarded P2,098.80 as actual damages and P360,000.00
as compensatory damages for loss of income, as follows:
[T]his Court can only award actual damages in the amount that is duly supported by receipts,
that is, P2,098.80 and not P7,277.80 as prayed for by plaintiff as there is no basis for the
amount prayed for. However, considering that plaintiff has suffered the loss of one leg which
has caused her to be limited in her movement thus resulting in loss of livelihood, she is
entitled to compensatory damages for lost income at the rate of P12,000.00/year for thirty
years in the amount of P360,000.00. 49
The CA, on the other hand, modified the award of the RTC by reducing the compensatory
damages from P360,000.00 to P200,000.00, thus:
By virtue of their negligence, defendants-appellants are liable to pay Werherlina
compensatory damages for loss of earning capacity. In arriving at the proper amount, the
Supreme Court has consistently used the following formula:
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Based on the stated formula, the damages due to Werherlina for loss of earning capacity is:
= 33.33 x P6,000.00
= P200,000.00
The award of the sum of P200,000.00 as compensatory damages for loss of earning
capacity is in order, notwithstanding the objections of defendants-appellants with respect to
lack of evidence on Werherlina's age and annual income. 50
Sanico argues that Colipano failed to present documentary evidence to support her age and
her income, so that her testimony is self-serving and that there was no basis for the award of
compensatory damages in her favor. 51 Sanico is gravely mistaken.
The Court has held in Heirs of Pedro Clemeña y Zurbano v. Heirs of Irene B. Bien 52 that
testimonial evidence cannot be objected to on the ground of being self-serving, thus:
"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. Evidence of this sort is excluded on the
same ground as any hearsay evidence, that is, lack of opportunity for cross-examination by
the adverse party and on the consideration that its admission would open the door to fraud and
fabrication. In contrast, a party's testimony in court is sworn and subject to cross-
examination by the other party, and therefore, not susceptible to an objection on the
ground that it is self-serving. 53
Colipano was subjected to cross-examination and both the RTC and CA believed her
testimony on her age and annual income. In fact, as these are questions of facts, these findings of the
RTC and CA are likewise binding on the Court. 54
Further, although as a general rule, documentary evidence is required to prove loss of earning
capacity, Colipano's testimony on her annual earnings of P12,000.00 is an allowed exception. There
are two exceptions to the general rule and Colipano's testimonial evidence falls under the second
exception, viz.:
By way of exception, damages for loss of earning capacity may be awarded despite
the absence of documentary evidence when (1) the deceased is self-employed earning less
than the minimum wage under current labor laws, and judicial notice may be taken of the fact
that in the deceased's line of work no documentary evidence is available; or (2) the deceased
is employed as a daily wage worker earning less than the minimum wage under current labor
laws. 55
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The CA applied the correct formula for computing the loss of Colipano's earning capacity:
Net earning capacity = Life expectancy x [Gross Annual Income - Living Expenses (50% of
gross annual income)], where life expectancy = 2/3 (80 - the age of the deceased). 56
However, the CA erred when it used Colipano's age at the time she testified as basis for
computing the loss of earning capacity. 57 The loss of earning capacity commenced when Colipano's
leg was crushed on December 25, 1993. Given that Colipano was 30 years old when she testified on
October 14, 1997, she was roughly 27 years old on December 25, 1993 when the injury was
sustained. Following the foregoing formula, the net earning capacity of Colipano is P212,000.00. 58
Sanico is liable to pay interest.
Interest is a form of actual or compensatory damages as it belongs to Chapter 2 59 of Title
XVIII on Damages of the Civil Code. Under Article 2210 of the Civil Code, "[i]nterest may, in the
discretion of the court, be allowed upon damages awarded for breach of contract." Here, given the
gravity of the breach of the contract of carriage causing the serious injury to the leg of Colipano that
resulted in its amputation, the Court deems it just and equitable to award interest from the date of the
RTC decision. Since the award of damages was given by the RTC in its Decision dated October 27,
2006, the interest on the amount awarded shall be deemed to run beginning October 27, 2006. cSEDTC
As to the rate of interest, in Eastern Shipping Lines, Inc. v. Court of Appeals, 60 the Court
ruled that "[w]hen an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the discretion of the court at the rate
of 6% per annum." 61 Further, upon finality of the judgment awarding a sum of money, the rate of
interest shall be 12% per annum from such finality until satisfaction because the interim period is
considered a forbearance of credit. 62 Subsequently, in Nacar v. Gallery Frames, 63 the rate of legal
interest for loans or forbearance of any money, goods or credits and the rate allowed in judgments
was lowered from 12% to 6%. Thus, the applicable rate of interest to the award of damages to
Colipano is 6%.
WHEREFORE, premises considered, the petition for review is hereby PARTLY
GRANTED. As to petitioner Vicente Castro, the Decision of the Court of Appeals dated September
30, 2013 is REVERSED and SET ASIDE and the complaint against him is dismissed for lack of
cause of action. As to petitioner Jose Sanico, the Decision of the Court of Appeals is hereby
AFFIRMED with MODIFICATIONS. Petitioner Jose Sanico is liable and ordered to pay
respondent Werherlina Colipano the following amounts:
1. Actual damages in the amount of P2,098.80;
2. Compensatory damages for loss of income in the amount of P212,000.00;
3. Interest on the total amount of the damages awarded in 1 and 2 at the rate of 6% per
annum reckoned from October 27, 2006 until finality of this Decision.
The total amount of the foregoing shall, in turn, earn interest at the rate of 6% per annum
from finality of this Decision until full payment thereof.
SO ORDERED.
Peralta, ** Perlas-Bernabe and Reyes, Jr., JJ., concur.
Carpio, * J., is on official leave.
Footnotes
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2.Id. at 37-49. Penned by Associate Justice Pamela Ann Abella Maxino, with Associate Justices Edgardo L.
Delos Santos and Maria Elisa Sempio Diy concurring.
5.Id. at 57.
7.Id. at 58.
8.Id.
9.Id.
10.Id. at 59.
12.Id. at 66.
13.Id.
14.Id. at 66-67.
15.Id. at 67.
16.Id. at 56.
17.Id. at 48-49.
19.Id. at 1336.
20.See Peralta de Guerrero v. Madrigal Shipping Co., Inc., 106 Phil. 485, 487 (1959).
24.Id. at 153.
25.Rollo, p. 45.
26.See id.
27.Id.
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29.Id. at 349, citing Arrieta v. National Rice and Corn Corp., 119 Phil. 339, 347 (1964).
33.Id. at 67.
34.Id. at 55.
35.Id. at 47-48.
36.Eduardo P. Caguioa, COMMENTS AND CASES ON CIVIL LAW CIVIL CODE OF THE PHILIPPINES,
Vol. 1 (1967 3rd Ed.), p. 13.
37.See British Airways v. Court of Appeals, 349 Phil. 379, 390 (1998), citing Meneses v. Court of Appeals; 316
Phil. 210, 222 (1995).
39.Id. at 353, citing Cebu Shipyard & Eng'g Works, Inc. v. William Lines, Inc., 366 Phil. 439, 451 (1999),
further citing Meneses v. Court of Appeals, supra note 37; Tay Chun Suy v. Court of Appeals, 299 Phil.
162, 168 (1994); First Philippine International Bank v. CA, 322 Phil. 280, 319 and 335-337 (1996);
Fortune Motors (Phils.) Corp. v. CA, 335 Phil. 315, 330 (1997).
42.Rollo, p. 48.
46.Id.
48.Id.
50.Id. at 45-46.
51.Id. at 20-23.
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56.Smith Bell Dodwell Shipping Agency Corp. v. Borja, 432 Phil. 913, 924 (2002).
58.Computed as follows:
= 35.33 x P6,000.00
= P212,000.00
62.Id. at 254.
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