G.R. No. 170071 - Heirs of Ochoa vs. G and S Transport Corp.

Deceased: Jose Marcial K. Ochoa, a passenger who died on March 10, 1995 while on board an Avis coupon taxi owned and operated by G & S Transport Corporation (a common carrier), driven by its employee, Bibiano Padilla, Jr.
Heirs/claimants: Wife Ruby Bueno Ochoa and minor children Micaela B. Ochoa and Jomar B. Ochoa.
Carrier: G & S Transport Corporation (G & S), operator of Avis Coupon Taxi; Padilla was its authorized driver.

Evening of March 10, 1995, after boarding at Manila Domestic Airport bound for Teacher’s Village, Quezon City; around 11:00 p.m. the taxi was cruising along EDSA, fronting Camp Aguinaldo, ascending the Santolan (Boni Serrano) flyover at high speed.
The taxi overtook another cab (driven by Pablo Clave) and attempted to pass a ten-wheeler truck; due to narrow space and high speed, the driver swerved left to avoid the truck, rammed the left flyover railing, fell to the middle of EDSA below, and split into two upon impact.
Both driver and passenger were injured; Ochoa was declared dead on arrival at East Avenue Medical Center; death certificate cites vehicular accident as cause.
G & S’s version: A fast oncoming delivery van allegedly bumped the taxi’s right side, causing it to veer left and fall; proximate cause was a fortuitous event and/or third-party negligence.

May 13, 1999 demand letter by heirs seeking P15,000,000 for death, loss of earning capacity, and funeral expenses; G & S did not comply.
Heirs filed damages suit (RTC Pasig, Br. 164) for breach of contract of carriage (culpa contractual) and, in the alternative, quasi-delict under Civil Code Arts. 2176 and 2180; prayed for actual, moral, exemplary damages, and attorney’s fees.
G & S Answer: Raised defenses of fortuitous event/third-party negligence, and diligence of a good father in selection and supervision; counterclaimed P300,000 attorney’s fees and costs.

RTC Decision (Dec. 27, 2001): Found accident caused by Padilla’s negligence; rejected fortuitous event; found G & S failed to prove diligence in selection/supervision; held G & S civilly liable for breach of contract; denied actual damages (no receipts) and initially denied moral/exemplary damages.
Awards (initial): P50,000 civil indemnity; P6,537,244.96 loss of earning capacity; P100,000 attorney’s fees; costs.
Heirs’ motion for partial reconsideration: Sought moral damages under Arts. 1764 and 2206(3) and exemplary damages under Art. 2232 due to gross negligence.
RTC Order (Mar. 5, 2002): Granted moral damages P300,000 and exemplary damages P50,000; affirmed other awards.

G & S appealed: Insisted on fortuitous event/third-party negligence; asserted programs on driver training, evaluations, rules, vehicle checkups; touted Padilla’s 11-year prior driving experience, clean record with G & S, clearances, commendations; cited Padilla’s attendance in a 1999 seminar; also questioned reliance on witness Clave and invoked Padilla’s subsequent acquittal in the criminal case on appeal.
Heirs opposed: Emphasized Padilla’s overspeeding, reckless overtaking at the flyover; argued fortuitous event inapplicable where negligence exists; noted MTC conviction (later reversed by RTC) and invoked Art. 1759 that diligence in selection/supervision does not absolve common carrier.
CA Decision (June 29, 2005): Affirmed negligence and carrier liability; rejected fortuitous event; found G & S’s proof of diligence insufficient; nonetheless deleted loss of earning capacity for lack of “unbiased” documentary proof (treated USAID HR certification as self-serving); reduced moral damages from P300,000 to P200,000 to “proportionate” with P50,000 exemplary; affirmed P50,000 civil indemnity, P50,000 exemplary, P100,000 attorney’s fees, and costs.
MRs denied (Oct. 12, 2005).

G.R. No. 170125 (G & S): Claimed proximate cause was fortuitous/third-party fault; asserted Padilla’s acquittal; challenged credibility of Clave; insisted on diligence in selection/supervision.
G.R. No. 170071 (Heirs): Assailed deletion of loss of earning capacity and reduction of moral damages; argued USAID certification is competent and not self-serving; invoked Pleyto v. Lomboy on testimonial sufficiency; opposed proportional pegging of moral to exemplary damages.
Context of criminal case: MTC convicted Padilla of reckless imprudence resulting in homicide; RTC later acquitted on appeal; heirs argued criminal acquittal immaterial to civil liability for breach of contract.

Whether the proximate cause of Ochoa’s death was a fortuitous event and/or the fault or negligence of a third party, thereby exempting G & S from liability.
Whether Padilla’s acquittal in the criminal case for reckless imprudence resulting in homicide should exonerate or affect G & S’s civil liability for breach of contract of carriage.
Whether the CA erred in upholding the credibility of witness Pablo Clave and discounting contrary accounts.
Whether G & S proved diligence of a good father in selection and supervision of employees, particularly Padilla.

Whether the CA erred in deleting the RTC’s award for loss of earning capacity on the ground that the USAID HR certification is self-serving/unreliable.
Whether the CA erred in reducing moral damages from P300,000 to P200,000, including pegging moral damages proportionate to exemplary damages.