G.R. No. L-25292 - Zamboanga Transportation Company, Incorporated vs. Court of Appeals

On the evening of August 13, 1955, spouses Ramon Dagamanuel and Josefina Punzalan boarded a bus at Manicahan, Zamboanga City to attend a benefit dance at Bunguiao Elementary School.
After the dance, they reboarded the same bus to return to Manicahan.
At approximately 1 o’clock in the early morning of August 14, 1955, the bus (plate number 1955 TPU-11327), driven by Valeriano Marcos, veered off the road, resulting in a fatal accident that claimed the lives of the two spouses and several other passengers.

Zamboanga Transportation Company, Inc. (Zamtranco) – the actual operator of the bus.
Zamboanga Rapids Company, Inc. (Zambraco) – the registered owner at the time of the accident.

A third party in the case is the private respondent, the minor Jose Mario Dagamanuel, represented by his guardian ad litem through his maternal grandmother. He is the sole child of the deceased and seeks damages for the wrongful deaths of his parents.
The existence of a contract of carriage is established by the testimony of a principal teacher, Filoteo de los Reyes, who confirmed that he contracted with Zamtranco for the bus trip and paid the fare.

The trial court, in its decision rendered in its Civil Case No. 574 for breach of contract of carriage, held that both the operating company (Zamtranco) and the registered owner (Zambraco) were liable along with the driver, Valeriano Marcos, though Marcos’s appeal was later dismissed.
The trial court’s decision condemned the defendants jointly and severally to pay damages for:

Death of the spouses – awarding a total of P16,000 (P8,000 for each spouse) as a combined death award that was later construed as all-embracing of compensatory losses, loss of earning capacity, and actual damages.
Exemplary damages of P4,000.
Attorney’s fees of P2,000, plus costs.

In separate third-party complaints, both companies admitted that the driver, Marcos, was in their employment.
The petitioners-appellants later raised issues on appeal, questioning both the assignment of liability (contending that Zamtranco, allegedly the wrong party, should not be held liable jointly with Zambraco) and the computation/excessiveness of the awarded damages.

Zamtranco admitted to being an operator engaged in the land transportation business and that the driver, Marcos, operated the bus on behalf of its management.
Zambraco, although the registered owner, also admitted that the bus was operated by Zamtranco during the incident.

Both companies submitted third-party complaints against Marcos, contending that he acted without authority and, in an additional allegation, that he attempted to shield his assets by selling property to his brother.
Evidence, including Marcos’ affidavit and the investigation report (which indicated that the bus was driven at a high speed on a slippery road and that the driver was under the influence of liquor), played a crucial role in establishing negligence.

Whether the actual operator (Zamtranco) and the registered owner (Zambraco) should be held jointly and severally liable for injuries and death resulting from the bus accident.
Whether the fact that the bus registration was still under Zambraco despite its operational control by Zamtranco affects the assignment of responsibility under the contract of carriage.

Whether the testimony establishing the contract between the passenger (through his representative) and Zamtranco suffices to invoke the presumption of negligence inherent in carriage agreements.
Whether the denial by the petitioners on the driver’s authority undermines the existence of the contractual relationship with the passenger.

Whether the awards for death, compensatory, moral, and exemplary damages rendered by the trial court—and later modified by the Court of Appeals—exceed or are in line with legal standards and established precedents.
Whether the appellate court erred in increasing or altering the amounts awarded by the trial court, particularly in light of the respondent’s lack of appeal on those portions of the ruling.

How the provisions of Articles 1756, 1764, and 2206 of the Civil Code apply to the case, particularly regarding the presumed fault of the carrier in cases of breach of contract of carriage resulting in death.
Whether the defense of extraordinary diligence or fortuitous event raised by petitioners can validly rebut the presumption of negligence given the available evidence.