G.R. No. 120496 - Five Star Bus Co., Inc. vs. Court of Appeals

The case involves a vehicular accident resulting in the death of Joey Santos, a 22-year-old passenger who was traveling aboard a bus owned and operated by petitioner Five Star Bus Co., Inc. and driven by petitioner Carlos Salonga.
The accident occurred on April 27, 1992, when the bus, allegedly driven with “gross and wanton negligence, recklessness and imprudence,” collided with an oncoming trailer truck along the Urdaneta, Pangasinan Highway.
The incident resulted not only in the death of Joey Santos but also in the death of another bus passenger, thereby prompting claims for damages.

Private respondents, Pedro and Lydia Santos, initiated Civil Case No. C-15500 on July 15, 1992, filed before the Regional Trial Court, Branch 129, Kalookan City, alleging breach of the contract of carriage and seeking indemnification.
The respondents claimed damages consisting of:

On September 16, 1992, petitioners filed their answer, attributing the accident to the negligence of the trailer truck driver who encroached on the bus’s lane.
A pre-trial notice was issued by RTC Judge Bayani S. Rivera on September 22, 1992, setting the pre-trial conference for October 15, 1992, and instructing counsels to notify their respective clients and file their pre-trial briefs at least three days before the conference.
Copies of the pre-trial notice were sent to both parties’ counsels, specifically to Atty. Emerico Lomibao for respondents and Atty. Arnel Naidas for petitioners.

On October 15, 1992, petitioners and their counsel failed to appear at the pre-trial conference and did not file the required pre-trial brief.
Consequently, upon motion by respondents’ counsel, the trial court declared petitioners in default and scheduled the ex parte presentation of respondents’ evidence for October 30, 1992.
During the hearing on October 30, 1992, respondent Lydia Santos and co-passenger Roger Santos presented their testimonies along with supporting documentary evidence.
The trial court rendered its decision on November 4, 1992, awarding:

Compensatory damages of P50,000.00.
Actual damages for funeral expenses amounting to P12,000.00.
Attorney’s fees of P10,000.00 in favor of respondents’ counsel, Atty. Emerico Lomibao.
Costs of the suit against defendant Five Star Bus Co., Inc.

Later developments saw the entrance of a new counsel for petitioners (from the law firm of Vivar, Lopez and Associates) who filed a motion to set aside the order of default on November 10, 1992, alleging that the pre-trial notice had been improperly handled due to the resignation of their former counsel, Atty. Arnel Naidas.
Petitioners also filed a motion for reconsideration on November 18, 1992, which was both denied by the trial court on December 10, 1992.
Petitioners appealed the decision, leading the Court of Appeals on April 28, 1995, to affirm the trial court’s decision while additionally awarding P50,000.00 for moral damages.

Petitioners contended that declaring them in default, receiving ex parte evidence, and awarding various damages were all contrary to the Rules of Court, existing jurisprudence, and due process under the Constitution.
They also argued that the additional award of moral damages was improperly granted since private respondents had not appealed the trial court’s decision.

Whether the trial court erred in declaring petitioners in default for failure to appear at the pre-trial conference, particularly given the contention that petitioners were not directly notified.

The issue involves the proper notification protocols, especially the duty of counsel to inform the party of the pre-trial schedule.

Whether the trial court erred in scheduling the ex parte presentation of evidence immediately after declaring petitioners in default.

This issue examines if the court violated procedural due process when evidence was admitted ex parte without a subsequent hearing.

Whether the awards of compensatory damages, actual damages, and attorney’s fees, as rendered by the trial court, were in conformity with the Rules of Court and constitutional due process.

The argument focuses on whether the decision regarding these awards was procedurally and substantively correct.

Whether the additional award of moral damages by the Court of Appeals should stand, given that the private respondents did not appeal the trial court’s decision.

This raises the question of whether it is procedurally acceptable to modify a judgment with an award that one of the parties (respondents) did not challenge by appeal.