Case Summary (G.R. No. 147791)
Factual Background and Injury Details
On December 29, 1978, respondents Estrella and Fletcher boarded a BLTB bus in San Pablo City bound for Pasay City. Their journey was cut short when CDCP’s tractor-truck rammed the BLTB bus from behind along the South Expressway. The collision severely injured both respondents, as evidenced by detailed medical certificates diagnosing fractures, lacerations, contusions, and partial amputation. Rescue involved extricating their legs pinned under seats. They were then hospitalized at Makati Medical Center.
Procedural History and Claims
Respondents filed a complaint for damages against CDCP, BLTB, and the respective drivers Payunan, Jr. and Datinguinoo before the Regional Trial Court (RTC) of Manila, Branch 13 (Civil Case No. R-82-2137). They alleged negligent driving, breach of duty in employee supervision by both companies, improper maintenance of the bus, and resultant actual and moral damages. Claims also sought exemplary damages, attorney’s fees, and litigation expenses. CDCP countered with an amended answer and a third-party complaint against its insurer Philippine Phoenix Surety & Insurance, Inc.
RTC Decision
The RTC ruled CDCP, BLTB, and their drivers jointly and severally liable for damages, awarding actual damages totaling ₱79,254.43, attorney’s fees of ₱10,000.00, and moral damages with specific amounts to the respondents. The Court emphasized BLTB’s extraordinary diligence obligation as a common carrier and imposed presumed negligence for failure to safely transport passengers. CDCP was found liable due to reckless driving by its employee and its failure to exercise due diligence in employee selection and supervision. Counterclaims and cross-claims were dismissed, and the third-party complaint against Phoenix was declared prescribed.
Court of Appeals Decision
The Court of Appeals affirmed the RTC decision with modifications:
- Interest on actual damages set at 6% per annum, running from the filing of the complaint (February 4, 1980) until judgment.
- Attorney’s fees increased to 30% of the total recovered, based on the parties’ retainer agreement.
- Exemplary damages awarded to respondents (₱20,000 each) and increased moral damages to Rachel Fletcher (₱80,000).
- Affirmed dismissal of Phoenix’s liability on the basis of prescription of the claim.
Issues on Review
The petition raised:
- Whether BLTB and/or its driver alone should be liable for damages.
- Whether the damages, attorney’s fees, and legal interest awarded were excessive or unfounded.
- Whether Philippine Phoenix Surety & Insurance should be held liable under its policy.
Liability of CDCP and BLTB under Quasi-Delict and Contractual Theories
The Court applied Article 2176 of the Civil Code, invoking liability arising from quasi-delict for CDCP under Article 2180, establishing that an employer is responsible for acts of employees with the exception if due diligence in hiring and supervision is proven. The reckless conduct of CDCP’s driver and the company’s failure to disprove negligence established their solidary liability together with BLTB under the doctrine that when negligence of multiple parties concurs to cause injury, they are jointly and severally liable. This is consistent with jurisprudence holding that a common carrier and a negligent third party are solidarily liable to injured passengers, regardless of the differing bases of liability (contractual for BLTB and quasi-delict for CDCP). The Court rejected petitioner’s contention that the award was ambiguous or resulted in double recovery, clarifying that actual and moral damages are separate.
Damages and Attorney’s Fees Award
The Court reviewed and adjusted damages to align with established precedents:
- Moral damages reduced to ₱50,000 each for both respondents, reaffirming the principle that moral damages compensate for physical injury and mental anguish without unjust enrichment.
- Exemplary damages upheld at ₱20,000 each, as justified by gross negligence, reaffirming that exemplary damages serve as a deterrent.
- Attorney’s fees set at 30% of the total amount awarded, supported by the parties’ agreement and the doctrine that attorney’s fees may be granted as actual damages when the defendant acted in bad faith or was grossly negligent.
Legal Interest
Pursuant to established rules on legal interest, the Court held that:
- Interest at 6% per annum applies to damages awarded for non-monetary obligations and starts to accrue only when the damages are quantifiable with reasonable certainty.
- Since damages were unliquidated at the time of filing the complaint, interest should run from the date of the RTC judgment (February 9, 1993) until finality.
- Upon finality of the decision, legal interest increases to 12% per annum until full satisfaction.
Insurance Claim of CDCP agains
Case Syllabus (G.R. No. 147791)
Facts and Background
- On December 29, 1978, Rebecca G. Estrella and her granddaughter Rachel E. Fletcher boarded a BLTB bus in San Pablo City bound for Pasay City.
- Their journey was interrupted when a tractor-truck owned by Construction Development Corporation of the Philippines (CDCP) rammed the bus from behind on the South Expressway.
- The collision caused severe injuries: Estrella suffered fractures to the left tibia, lacerated wound on the chin, contusions with abrasions, and fractured ribs; Fletcher suffered extensive lacerations, partial amputation of the left leg, and open comminuted fractures.
- Both victims were rescued under dire circumstances and hospitalized at Makati Medical Center.
- They filed a complaint for damages citing negligence on the part of the bus company (BLTB), CDCP, their drivers, and alleged improper maintenance and supervision.
Legal Claims and Parties’ Allegations
- Respondents alleged negligence by drivers Espiridion Payunan, Jr. (CDCP) and Wilfredo Datinguinoo (BLTB) in violating traffic laws.
- BLTB and CDCP accused of failure to exercise due diligence in employee selection and supervision.
- BLTB accused of operating an inadequately maintained bus, thereby endangering passengers.
- Claims included actual damages amounting to P250,000.00 (Estrella) and P300,000.00 (Fletcher), physical discomfort, anxiety, moral shock, social humiliation, and requests for exemplary damages, attorney’s fees, and litigation expenses.
- CDCP filed an amended answer with a third-party complaint against Philippine Phoenix Surety & Insurance Inc. (Phoenix).
Trial Court Findings and Decision
- The Regional Trial Court (RTC) held BLTB liable as a common carrier bound by strict extraordinary diligence to ensure passenger safety.
- BLTB’s failure to rebut the presumption of negligence made it liable for breach of contract of carriage.
- CDCP was found liable due to gross negligence of its driver, driving recklessly and at excessive speed, causing the collision.
- The court held CDCP liable either for negligence in employee selection or supervision under culpa aquiliana (quasi-delict).
- Joint and several liability was imposed on BLTB, CDCP, and their drivers for:
- Actual damages of P79,254.43
- Attorney’s fees of P10,000.00
- Moral damages: P50,000.00 to Fletcher and P25,000.00 to Estrella
- Counterclaims and third-party complaints were dismissed.
- Respondents’ motion for reconsideration was denied.
Court of Appeals’ Ruling
- The CA affirmed the RTC’s decision but modified awards:
- Interest of 6% per annum on actual damages to run from the filing of the complaint on February 4, 1980, and not from judgment date.
- Attorney’s fees increased to 30% of the total amount recovered, based on retainer agreement.
- Exemplary d