G.R. No. L-12191 October 14, 1918JOSE CANGCO,plaintiff-appellant,vs.MANILA RAILROAD CO.,defendant-appellee.

Ramon Sotelo for appellant.Kincaid & Hartigan for appellee.

FISHER,J.:At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line of the defendant railroad company; and in coming daily by train to the company's office in the city of Manila where he worked, he used a pass, supplied by the company, which entitled him to ride upon the company's trains free of charge. Upon the occasion in question, January 20, 1915, the plaintiff arose from his seat in the second class-car where he was riding and, making, his exit through the door, took his position upon the steps of the coach, seizing the upright guardrail with his right hand for support.

On the side of the train where passengers alight at the San Mateo station there is a cement platform which begins to rise with a moderate gradient some distance away from the company's office and extends along in front of said office for a distance sufficient to cover the length of several coaches. As the train slowed down another passenger, named Emilio Zuiga, also an employee of the railroad company, got off the same car, alighting safely at the point where the platform begins to rise from the level of the ground. When the train had proceeded a little farther the plaintiff Jose Cangco stepped off also, but one or both of his feet came in contact with a sack of watermelons with the result that his feet slipped from under him and he fell violently on the platform. His body at once rolled from the platform and was drawn under the moving car, where his right arm was badly crushed and lacerated. It appears that after the plaintiff alighted from the train the car moved forward possibly six meters before it came to a full stop.

The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was lighted dimly by a single light located some distance away, objects on the platform where the accident occurred were difficult to discern especially to a person emerging from a lighted car.

The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is found in the fact that it was the customary season for harvesting these melons and a large lot had been brought to the station for the shipment to the market. They were contained in numerous sacks which has been piled on the platform in a row one upon another. The testimony shows that this row of sacks was so placed of melons and the edge of platform; and it is clear that the fall of the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment he stepped upon the platform. His statement that he failed to see these objects in the darkness is readily to be credited.

The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the injuries which he had received were very serious. He was therefore brought at once to a certain hospital in the city of Manila where an examination was made and his arm was amputated. The result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital where a second operation was performed and the member was again amputated higher up near the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of medical and surgical fees and for other expenses in connection with the process of his curation.

Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of Manila to recover damages of the defendant company, founding his action upon the negligence of the servants and employees of the defendant in placing the sacks of melons upon the platform and leaving them so placed as to be a menace to the security of passenger alighting from the company's trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found the facts substantially as above stated, and drew therefrom his conclusion to the effect that, although negligence was attributable to the defendant by reason of the fact that the sacks of melons were so placed as to obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself had failed to use due caution in alighting from the coach and was therefore precluded form recovering. Judgment was accordingly entered in favor of the defendant company, and the plaintiff appealed.

It can not be doubted that the employees of the railroad company were guilty of negligence in piling these sacks on the platform in the manner above stated; that their presence caused the plaintiff to fall as he alighted from the train; and that they therefore constituted an effective legal cause of the injuries sustained by the plaintiff. It necessarily follows that the defendant company is liable for the damage thereby occasioned unless recovery is barred by the plaintiff's own contributory negligence. In resolving this problem it is necessary that each of these conceptions of liability, to-wit, the primary responsibility of the defendant company and the contributory negligence of the plaintiff should be separately examined.

It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extra-contractual obligations or to use the technical form of expression, that article relates only toculpaaquiliana and not toculpa contractual.

Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code, clearly points out this distinction, which was also recognized by this Court in its decision in the case of Rakesvs.Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article 1093 Manresa clearly points out the difference between "culpa, substantive and independent, which of itself constitutes the source of an obligation between persons not formerly connected by any legal tie" andculpaconsidered as an accident in the performance of an obligation already existing . . . ."

In the Rakes case (supra) the decision of this court was made to rest squarely upon the proposition that article 1903 of the Civil Code is not applicable to acts of negligence which constitute the breach of a contract.

Upon this point the Court said:

The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are understood to be those not growing out of pre-existing duties of the parties to one another. But where relations already formed give rise to duties, whether springing from contract or quasi-contract, then breaches of those duties are subject to article 1101, 1103, and 1104 of the same code. (Rakesvs.Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)

This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in certain cases imposed upon employers with respect to damages occasioned by the negligence of their employees to persons to whom they are not bound by contract, is not based, as in the English Common Law, upon the principle ofrespondeat superior if it were, the master would be liable in every case and unconditionally but upon the principle announced in article 1902 of the Civil Code, which imposes upon all persons who by their fault or negligence, do injury to another, the obligation of making good the damage caused. One who places a powerful automobile in the hands of a servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of an act of negligence which makes him liable for all the consequences of his imprudence. The obligation to make good the damage arises at the very instant that the unskillful servant, while acting within the scope of his employment causes the injury. The liability of the master is personal and direct. But, if the master has not been guilty of any negligence whatever in the selection and direction of the servant, he is not liable for the acts of the latter, whatever done within the scope of his employment or not, if the damage done by the servant does not amount to a breach of the contract between the master and the person injured.

It is not accurate to say that proof of diligence and care in the selection and control of the servant relieves the master from liability for the latter's acts on the contrary, that proof shows that the responsibility has never existed. As Manresa says (vol. 8, p. 68) the liability arising from extra-contractualculpais always based upon a voluntary act or omission which, without willful intent, but by mere negligence or inattention, has caused damage to another. A master who exercises all possible care in the selection of his servant, taking into consideration the qualifications they should possess for the discharge of the duties which it is his purpose to confide to them, and directs them with equal diligence, thereby performs his duty to third persons to whom he is bound by no contractual ties, and he incurs no liability whatever if, by reason of the negligence of his servants, even within the scope of their employment, such third person suffer damage. True it is that under article 1903 of the Civil Code the law creates apresumptionthat he has been negligent in the selection or direction of his servant, but the presumption is rebuttable and yield to proof of due care and diligence in this respect.

The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico Code, has held that these articles are applicable to cases of extra-contractualculpaexclusively. (Carmonavs.Cuesta, 20 Porto Rico Reports, 215.)

This distinction was again made patent by this Court in its decision in the case of Bahiavs.Litonjua and Leynes, (30 Phil. rep., 624), which was an action brought upon the theory of the extra-contractual liability of the defendant to respond for the damage caused by the carelessness of his employee while acting within the scope of his employment. The Court, after citing the last paragraph of article 1903 of the Civil Code, said:

From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there instantly arises a presumption of law that there was negligence on the part of the master or employer either in selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that that presumption isjuris tantumand notjuris et de jure, and consequently, may be rebutted. It follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved from liability.

This theory bases the responsibility of the master ultimately on hisownnegligence and not on that of his servant. This is the notable peculiarity of the Spanish law of negligence. It is, of course, in striking contrast to the American doctrine that, in relations with strangers, the negligence of the servant in conclusively the negligence of the master.

The opinion there expressed by this Court, to the effect that in case of extra-contractualculpabased upon negligence, it is necessary that there shall have been some fault attributable to the defendant personally, and that the last paragraph of article 1903 merely establishes a rebuttable presumption, is in complete accord with the authoritative opinion of Manresa, who says (vol. 12, p. 611) that the liability created by article 1903 is imposed by reason of the breach of the duties inherent in the special relations of authority or superiority existing between the person called upon to repair the damage and the one who, by his act or omission, was the cause of it.

On the other hand, the liability of masters and employers for the negligent acts or omissions of their servants or agents, when such acts or omissions cause damages which amount to the breach of a contact, is not based upon a mere presumption of the master's negligence in their selection or control, and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract.

Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual obligation has its source in the breach or omission of those mutual duties which civilized society imposes upon it members, or which arise from these relations, other than contractual, of certain members of society to others, generally embraced in the concept ofstatus. The legal rights of each member of society constitute the measure of the corresponding legal duties, mainly negative in character, which the existence of those rights imposes upon all other members of society. The breach of these general duties whether due to willful intent or to mere inattention, if productive of injury, give rise to an obligation to indemnify the injured party. The fundamental distinction between obligations of this character and those which arise from contract, rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act or omission itself which creates thevinculum juris, whereas in contractual relations thevinculumexists independently of the breach of the voluntary duty assumed by the parties when entering into the contractual relation.

With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is competent for the legislature to elect and our Legislature has so elected whom such an obligation is imposed is morally culpable, or, on the contrary, for reasons of public policy, to extend that liability, without regard to the lack of moral culpability, so as to include responsibility for the negligence of those person who acts or mission are imputable, by a legal fiction, to others who are in a position to exercise an absolute or limited control over them. The legislature which adopted our Civil Code has elected to limit extra-contractual liability with certain well-defined exceptions to cases in which moral culpability can be directly imputed to the persons to be charged. This moral responsibility may consist in having failed to exercise due care in the selection and control of one's agents or servants, or in the control of persons who, by reason of their status, occupy a position of dependency with respect to the person made liable for their conduct.

The position of a natural or juridical person who has undertaken by contract to render service to another, is wholly different from that to which article 1903 relates. When the sources of the obligation upon which plaintiff's cause of action depends is a negligent act or omission, the burden of proof rests upon plaintiff to prove the negligence if he does not his action fails. But when the facts averred show a contractual undertaking by defendant for the benefit of plaintiff, and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff to specify in his pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the defendant, or of his servants or agents. Proof of the contract and of its nonperformance is sufficientprima facieto warrant a recovery.

As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor should assume the burden of proof of its existence, as the only fact upon which his action is based; while on the contrary, in a case of negligence which presupposes the existence of a contractual obligation, if the creditor shows that it exists and that it has been broken, it is not necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]).

As it is not necessary for the plaintiff in an action for the breach of a contract to show that the breach was due to the negligent conduct of defendant or of his servants, even though such be in fact the actual cause of the breach, it is obvious that proof on the part of defendant that the negligence or omission of his servants or agents caused the breach of the contract would not constitute a defense to the action. If the negligence of servants or agents could be invoked as a means of discharging the liability arising from contract, the anomalous result would be that person acting through the medium of agents or servants in the performance of their contracts, would be in a better position than those acting in person. If one delivers a valuable watch to watchmaker who contract to repair it, and the bailee, by a personal negligent act causes its destruction, he is unquestionably liable. Would it be logical to free him from his liability for the breach of his contract, which involves the duty to exercise due care in the preservation of the watch, if he shows that it was his servant whose negligence caused the injury? If such a theory could be accepted, juridical persons would enjoy practically complete immunity from damages arising from the breach of their contracts if caused by negligent acts as such juridical persons can of necessity only act through agents or servants, and it would no doubt be true in most instances that reasonable care had been taken in selection and direction of such servants. If one delivers securities to a banking corporation as collateral, and they are lost by reason of the negligence of some clerk employed by the bank, would it be just and reasonable to permit the bank to relieve itself of liability for the breach of its contract to return the collateral upon the payment of the debt by proving that due care had been exercised in the selection and direction of the clerk?

This distinction betweenculpa aquiliana, as thesourceof an obligation, andculpa contractualas a mere incident to the performance of a contract has frequently been recognized by the supreme court of Spain. (Sentenciasof June 27, 1894; November 20, 1896; and December 13, 1896.) In the decisions of November 20, 1896, it appeared that plaintiff's action aroseex contractu, but that defendant sought to avail himself of the provisions of article 1902 of the Civil Code as a defense. The Spanish Supreme Court rejected defendant's contention, saying:

These are not cases of injury caused,without any pre-existing obligation, by fault or negligence, such as thoseto which article 1902 of the Civil Code relates, but of damages caused by the defendant's failure to carry out the undertakings imposed by the contracts . . . .

A brief review of the earlier decision of this court involving the liability of employers for damage done by the negligent acts of their servants will show that in no case has the court ever decided that the negligence of the defendant's servants has been held to constitute a defense to an action for damages for breach of contract.

In the case of Johnsonvs.David (5 Phil. Rep., 663), the court held that the owner of a carriage was not liable for the damages caused by the negligence of his driver. In that case the court commented on the fact that no evidence had been adduced in the trial court that the defendant had been negligent in the employment of the driver, or that he had any knowledge of his lack of skill or carefulness.

In the case of Baer Senior & Co's Successorsvs.Compania Maritima (6 Phil. Rep., 215), the plaintiff sued the defendant for damages caused by the loss of a barge belonging to plaintiff which was allowed to get adrift by the negligence of defendant's servants in the course of the performance of a contract of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if the "obligation of the defendant grew out of a contract made between it and the plaintiff . . . we do not think that the provisions of articles 1902 and 1903 are applicable to the case."

In the case of Chapmanvs.Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to recover damages for the personal injuries caused by the negligence of defendant's chauffeur while driving defendant's automobile in which defendant was riding at the time. The court found that the damages were caused by the negligence of the driver of the automobile, but held that the master was not liable, although he was present at the time, saying:

. . . unless the negligent acts of the driver are continued for a length of time as to give the owner a reasonable opportunity to observe them and to direct the driver to desist therefrom. . . . The act complained of must be continued in the presence of the owner for such length of time that the owner by his acquiescence, makes the driver's acts his own.

In the case of Yamadavs.Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil. Rep., 8), it is true that the court rested its conclusion as to the liability of the defendant upon article 1903, although the facts disclosed that the injury complaint of by plaintiff constituted a breach of the duty to him arising out of the contract of transportation. The express ground of the decision in this case was that article 1903, in dealing with the liability of a master for the negligent acts of his servants "makes the distinction between private individuals and public enterprise;" that as to the latter the law creates a rebuttable presumption of negligence in the selection or direction of servants; and that in the particular case the presumption of negligence had not been overcome.

It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as though founded in tort rather than as based upon the breach of the contract of carriage, and an examination of the pleadings and of the briefs shows that the questions of law were in fact discussed upon this theory. Viewed from the standpoint of the defendant the practical result must have been the same in any event. The proof disclosed beyond doubt that the defendant's servant was grossly negligent and that his negligence was the proximate cause of plaintiff's injury. It also affirmatively appeared that defendant had been guilty of negligence in its failure to exercise proper discretion in the direction of the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of the duty were to be regarded as constitutingculpa aquilianaorculpa contractual. As Manresa points out (vol. 8, pp. 29 and 69) whether negligence occurs an incident in the course of the performance of a contractual undertaking or its itself the source of an extra-contractual undertaking obligation, its essential characteristics are identical. There is always an act or omission productive of damage due to carelessness or inattention on the part of the defendant. Consequently, when the court holds that a defendant is liable in damages for having failed to exercise due care, either directly, or in failing to exercise proper care in the selection and direction of his servants, the practical result is identical in either case. Therefore, it follows that it is not to be inferred, because the court held in the Yamada case that defendant was liable for the damages negligently caused by its servants to a person to whom it was bound by contract, and made reference to the fact that the defendant was negligent in the selection and control of its servants, that in such a case the court would have held that it would have been a good defense to the action, if presented squarely upon the theory of the breach of the contract, for defendant to have proved that it did in fact exercise care in the selection and control of the servant.

The true explanation of such cases is to be found by directing the attention to the relative spheres of contractual and extra-contractual obligations. The field of non- contractual obligation is much more broader than that of contractual obligations, comprising, as it does, the whole extent of juridical human relations. These two fields, figuratively speaking, concentric; that is to say, the mere fact that a person is bound to another by contract does not relieve him from extra-contractual liability to such person. When such a contractual relation exists the obligor may break the contract under such conditions that the same act which constitutes the source of an extra-contractual obligation had no contract existed between the parties.

The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and to provide safe means of entering and leaving its trains (civil code, article 1258). That duty, being contractual, was direct and immediate, and its non-performance could not be excused by proof that the fault was morally imputable to defendant's servants.

The railroad company's defense involves the assumption that even granting that the negligent conduct of its servants in placing an obstruction upon the platform was a breach of its contractual obligation to maintain safe means of approaching and leaving its trains, the direct and proximate cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait until the train had come to a complete stop before alighting. Under the doctrine of comparative negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's own negligence, no liability is imposed upon defendant's negligence and plaintiff's negligence merely contributed to his injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of negligence.

It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular injury suffered by him could not have occurred. Defendant contends, and cites many authorities in support of the contention, that it is negligenceper sefor a passenger to alight from a moving train. We are not disposed to subscribe to this doctrine in its absolute form. We are of the opinion that this proposition is too badly stated and is at variance with the experience of every-day life. In this particular instance, that the train was barely moving when plaintiff alighted is shown conclusively by the fact that it came to stop within six meters from the place where he stepped from it. Thousands of person alight from trains under these conditions every day of the year, and sustain no injury where the company has kept its platform free from dangerous obstructions. There is no reason to believe that plaintiff would have suffered any injury whatever in alighting as he did had it not been for defendant's negligent failure to perform its duty to provide a safe alighting place.

We are of the opinion that the correct doctrine relating to this subject is that expressed in Thompson's work on Negligence (vol. 3, sec. 3010) as follows:

The test by which to determine whether the passenger has been guilty of negligence in attempting to alight from a moving railway train, is that of ordinary or reasonable care. It is to be considered whether an ordinarily prudent person, of the age, sex and condition of the passenger, would have acted as the passenger acted under the circumstances disclosed by the evidence. This care has been defined to be, not the care which may or should be used by the prudent man generally, but the care which a man of ordinary prudence would use under similar circumstances, to avoid injury." (Thompson, Commentaries on Negligence, vol. 3, sec. 3010.)

Or, it we prefer to adopt the mode of exposition used by this court in Picartvs.Smith (37 Phil. rep., 809), we may say that the test is this; Was there anything in the circumstances surrounding the plaintiff at the time he alighted from the train which would have admonished a person of average prudence that to get off the train under the conditions then existing was dangerous? If so, the plaintiff should have desisted from alighting; and his failure so to desist was contributory negligence.1awph!l.netAs the case now before us presents itself, the only fact from which a conclusion can be drawn to the effect that plaintiff was guilty of contributory negligence is that he stepped off the car without being able to discern clearly the condition of the platform and while the train was yet slowly moving. In considering the situation thus presented, it should not be overlooked that the plaintiff was, as we find, ignorant of the fact that the obstruction which was caused by the sacks of melons piled on the platform existed; and as the defendant was bound by reason of its duty as a public carrier to afford to its passengers facilities for safe egress from its trains, the plaintiff had a right to assume, in the absence of some circumstance to warn him to the contrary, that the platform was clear. The place, as we have already stated, was dark, or dimly lighted, and this also is proof of a failure upon the part of the defendant in the performance of a duty owing by it to the plaintiff; for if it were by any possibility concede that it had right to pile these sacks in the path of alighting passengers, the placing of them adequately so that their presence would be revealed.

As pertinent to the question of contributory negligence on the part of the plaintiff in this case the following circumstances are to be noted: The company's platform was constructed upon a level higher than that of the roadbed and the surrounding ground. The distance from the steps of the car to the spot where the alighting passenger would place his feet on the platform was thus reduced, thereby decreasing the risk incident to stepping off. The nature of the platform, constructed as it was of cement material, also assured to the passenger a stable and even surface on which to alight. Furthermore, the plaintiff was possessed of the vigor and agility of young manhood, and it was by no means so risky for him to get off while the train was yet moving as the same act would have been in an aged or feeble person. In determining the question of contributory negligence in performing such act that is to say, whether the passenger acted prudently or recklessly the age, sex, and physical condition of the passenger are circumstances necessarily affecting the safety of the passenger, and should be considered. Women, it has been observed, as a general rule are less capable than men of alighting with safety under such conditions, as the nature of their wearing apparel obstructs the free movement of the limbs. Again, it may be noted that the place was perfectly familiar to the plaintiff as it was his daily custom to get on and of the train at this station. There could, therefore, be no uncertainty in his mind with regard either to the length of the step which he was required to take or the character of the platform where he was alighting. Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly under way was not characterized by imprudence and that therefore he was not guilty of contributory negligence.

The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a copyist clerk, and that the injuries he has suffered have permanently disabled him from continuing that employment. Defendant has not shown that any other gainful occupation is open to plaintiff. His expectancy of life, according to the standard mortality tables, is approximately thirty-three years. We are of the opinion that a fair compensation for the damage suffered by him for his permanent disability is the sum of P2,500, and that he is also entitled to recover of defendant the additional sum of P790.25 for medical attention, hospital services, and other incidental expenditures connected with the treatment of his injuries.

The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of P3,290.25, and for the costs of both instances. So ordered.

Arellano, C.J., Torres, Street and Avancea, JJ., concur.

Separate Opinions

MALCOLM,J.,dissenting:

With one sentence in the majority decision, we are of full accord, namely, "It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular injury suffered by him could not have occurred." With the general rule relative to a passenger's contributory negligence, we are likewise in full accord, namely, "An attempt to alight from a moving train is negligenceper se." Adding these two points together, should be absolved from the complaint, and judgment affirmed.

Johnson, J., concur.EN BANC

G.R. No. 34840 September 23, 1931NARCISO GUTIERREZ,plaintiff-appellee,vs.BONIFACIO GUTIERREZ, MARIA V. DE GUTIERREZ, MANUEL GUTIERREZ, ABELARDO VELASCO, and SATURNINO CORTEZ,defendants-appellants.

L.D. Lockwood for appellants Velasco and Cortez.San Agustin and Roxas for other appellants.Ramon Diokno for appellee.MALCOLM,J.:This is an action brought by the plaintiff in the Court of First Instance of Manila against the five defendants, to recover damages in the amount of P10,000, for physical injuries suffered as a result of an automobile accident. On judgment being rendered as prayed for by the plaintiff, both sets of defendants appealed.

On February 2, 1930, a passenger truck and an automobile of private ownership collided while attempting to pass each other on the Talon bridge on the Manila South Road in the municipality of Las Pias, Province of Rizal. The truck was driven by the chauffeur Abelardo Velasco, and was owned by Saturnino Cortez. The automobile was being operated by Bonifacio Gutierrez, a lad 18 years of age, and was owned by Bonifacio's father and mother, Mr. and Mrs. Manuel Gutierrez. At the time of the collision, the father was not in the car, but the mother, together will several other members of the Gutierrez family, seven in all, were accommodated therein. A passenger in the autobus, by the name of Narciso Gutierrez, was en route from San Pablo, Laguna, to Manila. The collision between the bus and the automobile resulted in Narciso Gutierrez suffering a fracture right leg which required medical attendance for a considerable period of time, and which even at the date of the trial appears not to have healed properly.

It is conceded that the collision was caused by negligence pure and simple. The difference between the parties is that, while the plaintiff blames both sets of defendants, the owner of the passenger truck blames the automobile, and the owner of the automobile, in turn, blames the truck. We have given close attention to these highly debatable points, and having done so, a majority of the court are of the opinion that the findings of the trial judge on all controversial questions of fact find sufficient support in the record, and so should be maintained. With this general statement set down, we turn to consider the respective legal obligations of the defendants.

In amplification of so much of the above pronouncement as concerns the Gutierrez family, it may be explained that the youth Bonifacio was in incompetent chauffeur, that he was driving at an excessive rate of speed, and that, on approaching the bridge and the truck, he lost his head and so contributed by his negligence to the accident. The guaranty given by the father at the time the son was granted a license to operate motor vehicles made the father responsible for the acts of his son. Based on these facts, pursuant to the provisions of article 1903 of the Civil Code, the father alone and not the minor or the mother, would be liable for the damages caused by the minor.

We are dealing with the civil law liability of parties for obligations which arise from fault or negligence. At the same time, we believe that, as has been done in other cases, we can take cognizance of the common law rule on the same subject. In the United States, it is uniformly held that the head of a house, the owner of an automobile, who maintains it for the general use of his family is liable for its negligent operation by one of his children, whom he designates or permits to run it, where the car is occupied and being used at the time of the injury for the pleasure of other members of the owner's family than the child driving it. The theory of the law is that the running of the machine by a child to carry other members of the family is within the scope of the owner's business, so that he is liable for the negligence of the child because of the relationship of master and servant. (Huddy On Automobiles, 6th ed., sec. 660; Missellvs. Hayes [1914], 91 Atl., 322.) The liability of Saturnino Cortez, the owner of the truck, and of his chauffeur Abelardo Velasco rests on a different basis, namely, that of contract which, we think, has been sufficiently demonstrated by the allegations of the complaint, not controverted, and the evidence. The reason for this conclusion reaches to the findings of the trial court concerning the position of the truck on the bridge, the speed in operating the machine, and the lack of care employed by the chauffeur. While these facts are not as clearly evidenced as are those which convict the other defendant, we nevertheless hesitate to disregard the points emphasized by the trial judge. In its broader aspects, the case is one of two drivers approaching a narrow bridge from opposite directions, with neither being willing to slow up and give the right of way to the other, with the inevitable result of a collision and an accident.

The defendants Velasco and Cortez further contend that there existed contributory negligence on the part of the plaintiff, consisting principally of his keeping his foot outside the truck, which occasioned his injury. In this connection, it is sufficient to state that, aside from the fact that the defense of contributory negligence was not pleaded, the evidence bearing out this theory of the case is contradictory in the extreme and leads us far afield into speculative matters.

The last subject for consideration relates to the amount of the award. The appellee suggests that the amount could justly be raised to P16,517, but naturally is not serious in asking for this sum, since no appeal was taken by him from the judgment. The other parties unite in challenging the award of P10,000, as excessive. All facts considered, including actual expenditures and damages for the injury to the leg of the plaintiff, which may cause him permanent lameness, in connection with other adjudications of this court, lead us to conclude that a total sum for the plaintiff of P5,000 would be fair and reasonable. The difficulty in approximating the damages by monetary compensation is well elucidated by the divergence of opinion among the members of the court, three of whom have inclined to the view that P3,000 would be amply sufficient, while a fourth member has argued that P7,500 would be none too much.

In consonance with the foregoing rulings, the judgment appealed from will be modified, and the plaintiff will have judgment in his favor against the defendants Manuel Gutierrez, Abelardo Velasco, and Saturnino Cortez, jointly and severally, for the sum of P5,000, and the costs of both instances.

Avancea, C.J., Johnson, Street, Villamor, Ostrand, Romualdez, and Imperial, JJ.,concur.

VILLA-REAL, J.:

I vote for an indemnity of P7,500.FIRST DIVISION

[G.R. No. 19495. February 2, 1924. ]

HONRION LASAM ET AL.,Plaintiffs-Appellants, v. FRANK SMITH, jr.,Defendant-Appellant.

Palma & Leuterion for plaintiffs-appellant.

Mariano Alisngco, forDefendant-Appellant.

SYLLABUS1. DAMAGES; CONTRACT OF CARRIAGE OF PASSENGERS; BREACH OF CONTRACT. Defendant, the owner of a public garage, under took to convey the plaintiffs by automobile from San Fernando, La union, to Currimao, Ilocos Norte. While on the way to result of which the plaintiffs were injured. Held: That the action for damages articles 1101-1107 of the Civil Code, and not article 1903, were applicable.

2. ID.; ID.; FORTUITOUS EVENT. The expression "events which cannot be foreseen and which having been foreseen, are inevitable" is synonymous with the term "fortuitous event" of which some extraordinary circumstance independent of the will of the obligor, or of his employees, is one of the essential elements.

3. ID.; ID.; CARRIER OF PASSENGERS NOT AN INSURER AGAINST ALL RISKS. Neither under American nor Spanish law is a carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by exercising due care and diligence.

4. DAMAGES; CONTRACT, NEGLIGENCE IN FULFILLMENT . In determining the extent of the liability for losses or damages resulting the courts have a discretionary power to moderate the liability according to the circumstance (Civil Code article 1103; De Guia v. Manila Electric Railroad & Light Co., 40 Phil., 766.)

D E C I S I O NOSTRAND,J.:The plaintiffs are husband and wife and this action is brought to recover damages in the sum of P20,000 for physical injuries sustained by them in an automobile accident. The trial court rendered a judgment in their favor for the sum of P1,254.10, with legal interest from the date of the judgment. Both the plaintiffs and the defendant appeal, the former maintaining that the damages awarded are insufficient while the latter denies all liability for any damages whatever.

It appears from the evidence that on February 27, 1918, the defendant was of San Fernando, La Union, and engaged in the business of carrying passengers for hire from one point to another in the Province of La Union and the surrounding provinces. On the date mentioned, he undertook to convey plaintiff from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed chauffeur, but after having reached the town of San Juan, the chauffeur allowed his assistant, Remigio Bueno, to drive the car. Bueno held to drivers license, but had some experience in driving, and with the exception of some slight engine trouble while passing through the town of Luna, the car functioned well until after the crossing of the Abra River in Tagudin, when, according to the testimony of witnesses for the plaintiffs, defects developed in the steering gear so as to make accurate steering impossible, and after zigzagging for a distance of about half a kilometer, the car left the road and went down a steep embankment.

The defendant, in his testimony, maintains that there was no defect in the steering gear, neither before nor after the accident, and expresses the opinion that the swaying or zigzagging of the car must have been due to its having been driven at an excessive rate of speed. This may possibly be true, but it is, from our point of view, immaterial whether the accident was caused by negligence on the part of the defendants employees, or whether it was due to the same in either event.

In going over the bank of the road, the automobile was overturned and the plaintiffs pinned down under it. Mr. Lasam escaped with a few contusions and a "dislocated" rib, but his wife, Joaquina Sanchez, received serious injuries, among which was a compound fracture of one of the bones in her left wrist. She also appears to have suffered a nervous breakdown from which she had not fully recovered at the time of the trial.

The complaint in the case was filed about a year and a half after the occurrence above related. It alleges, among other things, that the accident was due to defects in the automobile as well as to the incompetence and negligence of the chauffeur, and the case appears to have been tried largely upon the theory that it sounds in tort and that the liability of the defendant is governed by article 1903 of the Civil Code. The trial court held, however, that the cause of action rests on the defendants breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil Code, and not article 1903, are applicable. The court further found that the breach of the contract was not due to fortuitous events and that, therefore, the defendant was liable in damages.

In our opinion, the conclusions of the court below are entirely correct. That upon the facts stated the defendants liability, if any, is contractual, is well settled by previous decisions of the court, beginning with the case of Rakes v. Atlantic, Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractual liability and contractual liability has been so ably and exhaustively discussed in various other cases, that nothing further need here be said upon that subject. (See Cangco v. Manila Railroad Co. 38 Phil., 768; Manila Railroad Co. Compania Trasatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia v. Manila Electric Railroad & Light source of the defendants legal liability is the contract of carriage; the by entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads as follows:jgc:chanrobles.com.ph

"No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability."cralaw virtua1aw library

This brings us to the principal question in the case: What is meant by "events which cannot be foreseen and which having been foreseen, are inevitable?" The Spanish authorities regard the language employed as an effort to define the term caso fortuito and hold that the two expressions are synonymous. (Manresa, Comentarios al Co Civil Espaol, vol. 8, pp. 88 et seq.; Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.)

The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which defines caso fortuito as "ocasion que acaese por aventura deque non se puede ante ver. E son estos, derrivamientos de casas e fuego que se enciende so ora, e quebrantamiento de navio, fuerca de ladrones. . . . (An event that takes place by accident and could not have been foreseen, Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers. . . .)"

Escriche defines caso fortuito as "an unexpected event such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of buildings by unforeseen accidents and other occurrences of a similar nature."cralaw virtua1aw library

In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Espaola says:" In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor." (5 Enciclopedia Juridica Espaola, 309.)

As will be seen, these authorities agree that some extraordinary circumstance independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito. Turning to the present case, it is at once apparent that this elements is lacking. It is not suggested that the accident in question was due to an act of God or to adverse road conditions which could not have been foreseen. As far as the record shows, the accident was caused either by defects in the automobile or else through the negligence of its driver. That is not a caso fortuito.

We agree with counsel that neither under the American nor Spanish law is a carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by exercising ordinary care and diligence. The case of Alba v. Sociedad Anonima de Tranvias, Jurisprudencia Civil, vol. 102, p. 928, cited by the defendant in support of his contentions, affords a good illustration of the application of this principle. In that case Alba, a passenger on a street car, was standing on the platform of the car while it was in motion. The car rounded a curve causing Alba to lose his balance and fall off the platform, sustaining sever injuries. In an action brought by him to recover damages, the supreme court of Spain held that inasmuch as the car at the time of the accident was travelling at a moderate rate of speed and there was no infraction of the regulations, and the plaintiff was exposed to no greater danger than that inherent in that particular mode of travel, the plaintiff could not recover, especially so since he should have been on his guard against a contingency as natural as that of losing his balance to a greater or less extent when the car rounded the curve.

But such is not the present case; here the passengers had no means of avoiding the danger or escaping the injury.

The plaintiffs maintain that the evidence clearly establishes that they are entitled to damages in the sum of P7,832.80 instead of P1,254.10 as found by the trial court, and their assignments of error relate to this point only.

There can be no doubt that the expenses incurred by the plaintiffs as a result of the accident greatly exceeded the amount of the damages awarded. But bearing in mind that in determining the extent of the liability for losses or damages resulting from negligence in the fulfillment of a contractual obligation, the courts have" a discretionary power to moderate the liability according to the circumstances" (De Guia v. Manila Electric Railroad & light Co., 40 Phil., 706 Phil; art. 1103, Civil Code), we do not think that the evidence is such as to justify us in interfering with the discretion of the court below in this respect. As pointed out by that court in its well-reasoned and well considered decision, by far the greater part of the damages claimed by the plaintiffs resulted from the fracture of a bone in the left wrist of Joaquina Sanchez and from her objections to having a decaying splinter of the bone refusal to submit to such an operation, a series of infections ensued and which required constant and expensive medical treatment for several years. We agree with the these expenses.

For the reasons stated, the judgment appealed from is affirmed, without costs in this instance. So ordered.

Araullo,C.J., Street, Malcolm, Johns, and Romualdez,JJ., concur.

G.R. No. L-21151 June 26, 1968LOURDES MUNSAYAC,petitioner,vs.BENEDICTA DE LARA and THE COURT OF APPEALS,respondents.

Celso P. Mariano for petitioner.Ruben L. Roxas for respondents.MAKALINTAL,J.:As a result of injuries suffered by the plaintiff-appellee while riding as a passenger on a jeepney owned and operated by the defendant-appellant, this action for recovery of damages was filed in the Court of First Instance of Rizal (Pasig Branch). The trial Judge found the driver recklessly negligent: he drove at an excessive speed, unmindful of the fact that the road was under repair and heedless of the passengers' pleas that he go more slowly. Besides the award of compensatory damages for actual expenses incurred and loss of income, the defendant was ordered to pay P1,000.00 as exemplary damages and P500.00 as attorney's fees. On these last two items the defendant appealed to the Court of Appeals, which rendered a judgment of affirmance, quoting the trial Court's justification for the award as follows:

The defendant's admission that the accident happened and the plaintiff's extensive injuries as a result thereof, despite which the defendant failed, or even refused, to placate the sufferings of plaintiff, necessitating the filing of this action, entitled plaintiff to exemplary damages to set an example to others and attorney's fees.

The case is new before us on review bycertiorari.

The Civil Code provides that "exemplary or corrective damages are imposed, by way of example or correction for the public good" (Act 2229); and that in contracts "the Court may award exemplary damages if the defendant acted in wanton, fraudulent, reckless, oppressive or malevolent manner" (Art. 2232).

Appellant points out that the act referred to in Article 2232 must be one which is coetaneous with and characterizes the breach of the contract on which the suit is based, and not one which is subsequent to such breach and therefore has no causal relation thereto, such as the herein defendant's failure to placate the sufferings of the plaintiff.

Appellant relies on the case of Rotea vs. Halili, G.R. No. L-12030, September 30, 1960, where this Court held:

According to the rule adopted by many courts, a principal or master can be held liable for exemplary or punitive damages based upon the wrongful act of his agent or servant only where he participated in the doing of such wrongful act or has previously authorized or subsequently ratified it with full knowledge of the facts. Reasons given for this rule are that since damages are penal in character, the motive authorizing their infliction will not be imputed by presumption to the principal when the act is committed by an agent or servant, and that since they are awarded not by way of compensation, but as a warning to others, they can only be awarded against one who has participated in the offense, and the principal therefore cannot be held liable for them merely by reason of wanton, oppressive or malicious intent on the part of the agent (15 Art. Jur. 730).

We believe the point of the appellant is well-taken. It is difficult to conceive how the defendant in a breach of contract case could be held to have acted in a wanton, fraudulent, reckless, oppressive or violent manner within the meaning of Article 2232 for something he did or did not do after the breach, which had no causal connection therewith. The law does not contemplate a vicarious liability on his part: the breach is his as party to the contract, and so if he is to be held liable at all for exemplary damages by reason of the wrongful act of his agent, it must be shown that he had previously authorized or knowingly ratified it thereafter, in effect making him a co-participant. From the decision under review, however, there is nothing to show previous authority or subsequent ratification by appellant insofar as the recklessness of the driver was concerned. The mere statement that the defendant failed, even refused, to placate the suffering of the plaintiff, necessitating the filing of the action, is too tenuous a basis to warrant the conclusion that the defendant approved of the wrongful act of his servant with full knowledge of the facts.

It is not enough to say that an example should be made, or corrective measures employed, for the public good, especially in accident cases where public carriers are involved. For the causative negligence in such cases is personal to the employees actually in charge of the vehicles, and it is they who should be made to pay this kind of damages by way of example or correction, unless by the demonstrated tolerance or approval of the owners they themselves can be held at fault and their fault is of the character described in Article 2232 of the Civil Code. Otherwise there would be practically no difference between their liability for exemplary damages and their liability for compensatory damages, which needs no proof of their negligence since the suit is predicated on breach of contract and due diligence on their part does not constitute a defense.

IN VIEW OF THE FOREGOING, the judgment appealed from is modified by eliminating the award for exemplary damages, and affirmed with respect to the attorney's fees. No pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.G.R. No. 80447 January 31, 1989

BALIWAG TRANSIT, INC.,petitioner,vs.HON. COURT OF APPEALS and SPS. SOTERO CAILIPAN, JR. and ZENAIDA LOPEZ and GEORGE L. CAILIPAN,respondents.

Sta. Maria & Associates for petitioner.

Punzalan and Associates Law Office for respondents.

MELENCIO-HERRERA,J.:On 10 April 1985 a Complaint for damages arising from breach of contract of carriage was filed by private respondents, the Spouses Sotero Cailipan, Jr. and Zenaida Lopez, and their son George, of legal age, against petitioner Baliwag Transit (Baliwag, for brevity). The Complaint alleged that George, who was a paying passenger on a Baliwag bus on 17 December 1984, suffered multiple serious physical injuries when he was thrown off said bus driven in a careless and negligent manner by Leonardo Cruz, the authorized bus driver, along Barangay Patubig, Marilao, Bulacan. As a result, he was confined in the hospital for treatment, incurring medical expenses, which were borne by his parents, the respondent Spouses, in the sum of about P200,000.00 plus other incidental expenses of about P10,000.00.

On 26 April 1985 an Answer was filed by petitioner alleging that the cause of the injuries sustained by George was solely attributable to his own voluntary act in that, without warning and provocation, he suddenly stood up from his seat and headed for the door of the bus as if in a daze, opened it and jumped off while said bus was in motion, in spite of the protestations by the driver and without the knowledge of the conductor.

Baliwag then filed a Third-Party Complaint against Fortune Insurance & Surety Company, Inc., on its third-party liability insurance in the amount of P50,000.00. In its Answer, Fortune Insurance claimed limited liability, the coverage being subject to a Schedule of Indemnities forming part of the insurance policy.

On 14 November 1985 and 18 November 1985, respectively, Fortune Insurance and Baliwag each filed Motions to Dismiss on the ground that George, in consideration of the sum of P8,020.50 had executed a "Release of Claims" dated 16 May 1985. These Motions were denied by the Trial Court in an Order dated 13 January 1986 as they were filed beyond the time for pleading and after the Answer were already filed.

On 5 February 1986 Baliwag filed a Motion to Admit Amended Answer, which was granted by the Trial Court. The Amended Answer incorporated the affirmative defense in the Motion to Dismiss to the effect that on 16 May 1985, George bad been paid all his claims for damages arising from the incident subject matter of the complaint when he executed the following "Release of Claims":

For and in consideration of the payment to me/us of the sum of EIGHT THOUSAND TWENTY and 50/100 PESOS ONLY (P8,020.50), the receipt of which is hereby acknowledged, I/we, being of lawful age, do hereby release, acquit and forever discharge Fortune Insurance and/or Baliwag transit, Inc. his/her heirs, executors and assigns, from any and all liability now accrued or hereafter to accrue on account of any and all claims or causes of action which I/we now or may here after have for personal injuries, damage to property, loss of services, medical expenses, losses or damages of any and every kind or nature whatsoever, now known or what may hereafter develop by me/us sustained or received on or about 17th day of December, 1984 through Reckless Imprudence Resulting to Physical Injuries, and I/we hereby declare that I/we fully understand the terms of this settlement and voluntarily accept said sum for the purpose of making a full and final compromise adjustment and settlement of the injuries and damages, expenses and inconvenience above mentioned. (Rollo, p. 11)

During the preliminary hearing on the aforementioned affirmative defense, Baliwag waived the presentation of testimonial evidence and instead offered as its Exhibit "1" the "Release of Claims" signed by George and witnessed by his brother Benjamin L. Cailipan, a licensed engineer.

By way of opposition to petitioner's affirmative defense, respondent Sotero Cailipan, Jr. testified that be is the father of George, who at the time of the incident was a student, living with his parents and totally dependent on them for their support; that the expenses for his hospitalization were shouldered by his parents; and that they had not signed the "Release of Claims."

In an Order dated 29 August 1986, the Regional Trial Court of Bulacan, Branch 20,1dismissed the Complaint and Third-party Complaint, ruling that since the contract of carriage is between Baliwag and George L. Cailipan, the latter, who is of legal age, had the exclusive right to execute the Release of Claims despite the fact that he is still a student and dependent on his parents for support. Consequently, the execution by George of the Release of Claims discharges Baliwag and Fortune Insurance.Aggrieved, the Spouses appealed to respondent Court of Appeals.

On 22 October 1987, the Appellate Court rendered a Decision2setting aside the appealed Order and holding that the "Release of Claims" cannot operate as a valid ground for the dismissal of the case because it does not have the conformity of all the parties, particularly George's parents, who have a substantial interest in the case as they stand to be prejudiced by the judgment because they spent a sizeable amount for the medical bills of their son; that the Release of Claims was secured by Fortune Insurance for the consideration of P8,020.50 as the full and final settlement of its liability under the insurance policy and not for the purpose of releasing Baliwag from its liability as a carrier in this suit for breach of contract. The Appellate Court also ordered the remand of the case to the lower Court for trial on the merits and for George to return the amount of P8,020.50 to Fortune Insurance.Hence, this Petition for Review oncertiorariby Baliwag assailing the Appellate Court judgment.

The issue brought to the fore is the legal effect of the Release of Claims executed by George during the pendency of this case.

We hold that since the suit is one for breach of contract of carriage, the Release of Claims executed by him, as the injured party, discharging Fortune Insurance and Baliwag from any and all liability is valid. He was then of legal age, a graduating student of Agricultural Engineering, and had the capacity to do acts with legal effect (Article 37 in relation to Article 402, Civil Code). Thus, he could sue and be sued even without the assistance of his parents.

Significantly, the contract of carriage was actually between George, as the paying passenger, and Baliwag, as the common carrier. As such carrier, Baliwag was bound to carry its passengers safely as far as human care and foresight could provide, and is liable for injuries to them through the negligence or wilful acts of its employees (Articles 1755 and 1759, Civil Code). Thus, George had the right to be safely brought to his destination and Baliwag had the correlative obligation to do so. Since a contract may be violated only by the parties thereto, as against each other, in an action upon that contract, the real parties in interest, either as plaintiff or as defendant, must be parties to said contract (Marimperio Compania Naviera, S.A. vs. Court of Appeals, No. L-40234, December 14, 1987, 156 SCRA 368). A real party-in-interest -plaintiff is one who has a legal right while a real party-in-interest-defendant is one who has a correlative legal obligation whose act or omission violates the legal right of the former (Lee vs. Romillo, Jr., G.R. No. 60973, May 28, 1988). In the absence of any contract of carriage between Baliwag and George's parents, the latter are not real parties-in-interest in an action for breach of that contract.

The general rule of the common law is that every action must be brought in the name of the party whose legal right has been invaded or infringed. 15 Enc. P1. & Pr. p. 484. "For the immediate wrong and damage the person injured is the only one who can maintain the action."Id.p. 578. The person who sustains an injury is the person to bring an action for the injury against the wrongdoer." Dicey parties to Actions, 347. (Cited in Green v. Shoemaker, 73 A 688, 23 L.R.A., N.S. 667).

There is no question regarding the genuineness and due execution of the Release of Claims. It is a duly notarized public document. It clearly stipulates that the consideration of P8,020.50 received by George was "to release and forever discharge Fortune Insurance and/or Baliwag from any and all liabilities now accrued or to accrue on account of any and all claims or causes of action ... for personal injuries, damage to property, loss of services, medical expenses, losses or damages of any and every kind or nature whatsoever, sustained by him on 17 December 1984 thru Reckless Imprudence Resulting to Physical Injuries." Consequently, the ruling of respondent Appellate Court that the "Release of Claims" was intended only as the full and final settlement of a third-party liability for bodily injury claim and not for the purpose of releasing Baliwag from its liability, if any, in a breach of a contract of carriage, has to be rejected for being contrary to the very terms thereof. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control (Article 1370, Civil Code). The phraseology "any and all claims or causes of action" is broad enough to include all damages that may accrue to the injured party arising from the unfortunate accident.

The Release of Claims had the effect of a compromise agreement since it was entered into for the purpose of making a full and final compromise adjustment and settlement of the cause of action involved. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced (Article 2028, Civil Code). The Release of Claims executed by the injured party himself wrote finish to this litigation.

WHEREFORE, the Decision dated 22 October 1987 of respondent Court of Appeals is SET ASIDE, the Decision of the Regional Trial Court of Bulacan, Branch 20, is REINSTATED, and the Complaint and Third-Party Complaint are hereby ordered DISMISSED. No costs.

SO ORDERED.

Paras, Padilla, Sarmiento and Regalado, JJ., concur.G.R. Nos. L-34189-91 January 25, 1993

VICTORY LINER, INC.,petitioner,vs.HON. JOSE E. EVANGELISTA, HON. GREGORIO C. PANGANIBAN, HON. JOSUE CADIAO, THE PUBLIC SERVICE COMMISSION, LA MALLORCA, and PAMPANGA BUS CO., INC.,respondents.

MELO,J.:Impugned in the petition forcertioraribefore us is the Order dated October 4, 1971 issued by the then Public Service Commission (Annex "L", Petition; p. 76,Rollo) which granted a provisional permit for the La Mallorca and the Pampanga Bus Co., Inc. (then jointly operating as La Mallorca-Pambusco) to field additional units along the Manila-San Fernando-Olongapo and Balanga-Dinalupihan-Olongapo routes. In contesting the Order, petitioner is of the impression that the temporary authority has no legal nor factual foundation considering that petitioner's service is more than enough to meet the needs of the riding public in the different towns of Zambales, part of Bataan and the Olongapo residents bound for Manila.

Private respondents are likewise holders of certificates of public convenience to operate public utility buses in Bulacan, Pampanga, Bataan, Nueva Ecija, Tarlac, Pangasinan, La Union, and Manila. During the pendency of private respondents' applications for authority to extend their existing lines, they requested the issuance of a provisional permit to immediately operate fourteen buses for the Manila-San Fernando-Olongapo route and to field four buses to serve the passengers along Balanga-Dinalupihan-Olongapo. Petitioner opposed the temporary authority prayed for by private respondents on account of theso-called prejudicial question which petitioner previously posed for resolutionviatwo pending complaints for cancellation of private respondents' certificates of public convenience (Annex "F", p. 47,Rollo). Action on these complaints, premised on private respondents' partial abandonment of services in some areas, was held in abeyance until further orders by respondent Commission.

In resolving the opposition aired by petitioner, respondent Commission was of the view that there can be no prejudicial question to speak of since the certificates which petitioner sought to revoke in the other cases it filed are different from those involved in the application for extension filed by private respondents. Acontrario, public respondent expressed the opinion that there was evidence to justify private respondents' operation in the projected expansion of business.

On the feasibility of issuing the provisional authority, respondent Commission enumerated the conditions for entitlement thereto, namely, 1) final resolution of the basic case has been unduly delayed; 2) the applicant is legally and financially capable of maintaining the proposed service; and 3) urgent public need therefor all of which were ascertained to be present in the case at bar, thus:

Anent the aspect of delay, public respondent noted that the application had been unduly hampered since the applicants consumed a year and nine months before they finally submitted their evidence for consideration while counsel for herein petitioner requested that the hearings be held in abeyance on account of the alleged prejudicial question.

Concerning the second element, private respondents were determined to be financially capable of maintaining the proposed extension which will not require additional investments because private respondents will simply utilize the same units which are already authorized.

On the urgent need to immediately authorize the projected services, respondent Commission observed:

Applicants have already introduced oral and documentary evidence to justify the grant of the basic applications. As earlier mentioned four witnesses were presented to establish public need for the proposed service in Manila-San Fernando to Olongapo City, requested in Cases Nos. 68-307 & 68-309. The gist of applicant's evidence on this score shows that applicants start their operations from Divisoria, Manila to San Fernando, Pampanga and this they proposed to extend to Olongapo City; that there is at present no PUB operator actually operating a direct bus service from Manila (Divisoria) to Olongapo City; that although the oppositor Victory Liner is authorized to operate a PUB service from Manila to Olongapo, actually it starts its operations only from its terminal at Grace Park, Caloocan, a good four or five kilometers away from Divisoria and ends its trips at its terminal station on the outskirts of Olongapo City about two or three kilometers away from the City proper or "poblacion"; that the oppositor, Saulog Transit operates from Cavite City to Olongapo City merely passing Manila on the way; that the oppositor, Rabbit, does not operate a Manila-Olongapo City line; that passengers coming from Manila proper going to Olongapo have to take a taxi, AC, PUJ or PUB ride first to the terminal of the Victory Liner at Grace Park, Caloocan City before they can take a bus ride to Olongapo City; that there are many passengers commuting from Manila to Olongapo and vice-versa, that at both terminals of the Victory Liner at Caloocan and Olongapo most of these prospective passengers have to pay an extra fee for the privilege of getting a seat on the buses; that Manila passengers going to Olongapo cannot take a ride on the Saulog buses which pass Manila because more often than not they are fully loaded and no more seats are available; that Manila passengers going to Olongapo, especially those with cargoes, find much inconvenience taking the Victory Liner Bus at its terminal in Caloocan City, but they have to endure all inconvenience because there are no other buses directly going to Olongapo City.

On the other hand, although two witnesses have already been presented by oppositor Victory Liner to testify in support of the opposition, these witnesses did not introduce any testimony to impugn the facts sought to be established by applicants evidence on the existence of a public need for more buses on the Manila-Olongapo City and vice versa line. Rather,these two witnesses testified mainly on the conditions obtaining on the Balanga-Dinalupihan to Olongapo City line. So far, therefore, there is nothing on record to dispute theprima faciefacts established by applicant's evidence that there is urgent public need for the proposed extension of line from Manila-San Fernando to Olongapo City.

Verily, the putting up of a direct bus service on the Manila-Olongapo City line will greatly ease the inconvenience presently encountered by commuters on these points. Moreover, the competition that will be engendered by the operation of a new operator on the Manila-Olongapo line will result in improved services on the line and break the present monopolistic hold the Victory Liner has on this line, all to the ultimate benefit of the riding public. In the light of the foregoing, we find the existence of urgent public need for the proposed service, Manila-San Fernando to Olongapo City, sufficientprima facieestablished.

On the extension of line from Balanga-Dinalupihan to Olongapo City, subject matter of Case No. 68-5614, applicants introduced three witnesses. The gist of applicants evidence shows that the oppositor Victory Liner is the only PUB operator operating a direct terminal to terminal service on said line; that the Rabbit operates on the Manila to Bataan line and none to Olongapo City; that the Saulog Transit operates on the Cavite City to Olongapo Line but none going towards Bataan; that there are many people, mostly traders who travel from Olongapo City to Balanga because goods in the latter place are much cheaper; that although there are "colorum" jeeps travelling from Balanga to Olongapo and vice-versa there are no authorized PUJ operators plying said route; that because there are many passengers taking the Victory Liner at its terminal in Olongapo, most of these passengers have to pay extra for the privilege of acquiring a seat on the bus; that the same condition obtains at the Balanga terminal of the Victory Liner for those who want to go to Olongapo; that the Victory Liner does not operate enough buses on the line to adequately meet the volume of passengers commuting therein.

On the other hand, the gist of the testimony of oppositors two witnesses so far introduced, who testified on the conditions of travelling from Olongapo City to Balanga and vice-versa, shows that there are few passengers commuting on the said line; that aside from the Victory Liner there are plenty of colorum jeeps operating on the Olongapo to Balanga line and vice-versa; that it is easy to take a ride and a comfortable one at that at either terminal of the Victory Liner in Balanga or Olongapo; that aside from the Victory Liner and colorum jeeps there are many other PUJ jeeps operating on intermediate points on the line Balanga to Olongapo andvice-versa; that the present number of buses being operated by the Victory Liner on the Olongapo to Balanga line and vice-versa is more than sufficient to meet adequately the volume of passengers travelling on this line.

Between these two conflicting sets of testimony, the Commission believes, that at this stage, there is not enough evidence to destroy theprima faciefacts established by applicant's evidence. The assertion by applicants that there are colorum jeeps operating on this line and admitted by oppositors witnesses, to our mind, is a persuasive proof that there are many passengers commuting therein which cannot be adequately accommodated by the Victory Liner. The operation of four more PUB units serving directly the Balanga to Olongapo line will ease the monopolistic hold of the Victory Liner on the line, encourage fair competition and give passengers an alternative to choose the bus most convenient for their purpose. Consequently we find urgent need for the proposed extension of line Balanga-Dinalupihan to Olongapo City sufficientlyprima facieestablished. In the light of the foregoing discussion we find the 3 requisites for the proper issuance of a provisional authority present in the case at bar.(pp. 81-85,Rollo.)

In essence, petitioner alleges denial of due process since theponenteassigned to hear and decide the cases below abstained for no apparent reason, apart from the absence of the conditionssine qua non, for granting the provisional permit in favor of private respondents. On October 13, 1971, this Court enjoined public respondent from implementing the assailed order until further notice (p. 95Rollo).

What seems to be the source of petitioner's aspersion of unfair play that supposedly characterized the proceedings below is the demeanor of Associate Commissioner Josue L. Cadiao when he refrained from participating in the resolution of the assailed order despite the fact that the cases were assigned to him for deliberation (pp. 41-43,Rollo). While it may be observed that said respondent's conduct in shirking his responsibility is not worth emulating, it is nonetheless not sufficient to render the order ineffective inasmuch as thecompetenciato rule on the matter is conferred upon any of the remaining commissioners comprising the Division acting either individually or jointly:

All the powers herein vested upon the Commission shall be considered vested upon any of the Commissioners, acting either individually or jointly as hereinafter provided. The Commissioners shall equitably divide among themselves all pending cases and those that may hereafter be submitted to the Commission, is such manner and form as they may determine, and shall proceed to hear and determine case assigned to each or to their respective divisions, or to the Commissionen bancas follows: uncontested cases, except those pertaining to the fixing of rates, shall be decided by one Commissioner; contested cases and all cases involving the fixing of rates shall be decided by the Commission in division and the concurrence of at least two Commissioners in the division shall be necessary for the promulgation of a decision or non-interlocutory order in these cases: Provided, however, That any motion for reconsideration of a decision or non-interlocutory order of any Commissioner or division shall be heard directly by the Commissionen bancand the concurrence of at least four Commissioners shall be necessary for the promulgation of a final decision or order resolving such motion for reconsideration. (Section 3, C.A. No. 146, as amended by R.A. No. 178, 723, and 2677).

Withal, it has been stressed that any Commissioner may decide a case pending before the Commission whether or not he heard the evidence therein (San Miguel Brewery vs. Espiritu, 60 Phil. 745 [1934]; Manila Yellow Taxicab Co. vs. Barredo, 58 Phil. 385 [1933]; Orlanes and Banaag Trans. Co. vs. Public Service Commission, 57 Phil. 634 [1932]; 4 Agbayani, Commentaries and Jurisprudence on Commercial Laws, 1983 Ed., p. 329). It is needless to emphasize that what does not square with due process is absolute want of opportunity to be heard unlike in the proceedings below wherein Hearing Officer Vitaliano Santos was delegated to conduct the hearings during which the parties were given the chance to ventilate their views and evidence preparatory to submission of the diverse disputations to the Commission for decision (Section 32, C.A. 146 as amended by Rep. Act No. 723, approved on June 6, 1952; Jaculina vs. National Police Commission, 200 SCRA 489 [1991]).

We now tackle the aspect of whether the Commission properly issued the provisional permit in favor of private respondents as tested by the elements necessary to justify such temporary relief.

There is no doubt that the proceedings below were conducted at a snail's pace but what escaped the attention of public respondents was the fact that the hearings were impeded not only on account of petitioner's deferment but were significantly retarded by private respondents' indifference. It is to be noted that private respondents, as applicants, filed their causes of action as early as January 1968 and, as observed by the Commission itself, it took private respondents a year plus nine months before they finally submitted their evidence. In other words, the Commission could not have utilized the postponements caused mainly by private respondents to appreciate the so-called "undue delay" as to warrant immediate issuance of the provisional authority. Otherwise, every applicant can capitalize on its own sluggishness so as to secure prompt relief triggered by its own sinister, nay, hidden agenda.

Relative to the financial status of private respondents, the Commission assumed the solvency of the proponents from the mere fact that they have been in the transportation business for quite some time and that the services will not entail additional investments on their part. But the needle of the compass points to the opposite direction, so to speak, given the cold assertions put forward by private respondents. Acontrario, private respondents' pretense of sufficient liquidity and ability to provide additional services is belied by an event which supervened the assailed order whereby private respondents sought the temporary suspension of operations for the purpose of effecting much needed improvement of their units, shop facilities, equipment, and terminals. Private respondents further requested that the Cagayan Valley Transportation Co., fill the hiatus along the same routes until they can resume normal operations (p. 3, Supplemental Memorandum; p. 190,Rollo). A request of this nature is pregnant with the admission that indeed their solvency is questionable, especially so when they simply alleged in their petition for provisional authority to operate "that financial capacities of the applicants herein as established bus service operators, have been recognized" by the Public Service Commission (p. 2, Petition for Provisional Authority to Operate; p. 46,Rollo). Furthermore, another crucial point levelled against private respondents which remained unanswered adequately, is that out of the 782 units comprising the combined number of buses belonging to private respondents, 435 thereof had been placed in storage, thereby implying that private respondents are not that serious in their intent to undertake the operation of additional lines (Annexes "I" and "J", Petition; pp. 66-67,Rollo).

In view of the foregoing premises, it is virtually unnecessary for us to proceed with the discussion of the third requisite agent public demand for the projected services. Verily, not long after it filed its petition to suspend operations temporarily, or more than 20 years ago, La Mallorca-Pambusco stopped operating and has not since then resumed business activities.

WHEREFORE, the petition is hereby GRANTED. The Order dated October 4, 1971 is hereby REVERSED and SET ASIDE.

SO ORDERED.

Gutierrez, Jr., Bidin; Davide, Jr. and Romero, JJ., concur.

G.R. No. L-12191 October 14, 1918JOSE CANGCO,plaintiff-appellant,vs.MANILA RAILROAD CO.,defendant-appellee.

Ramon Sotelo for appellant.Kincaid & Hartigan for appellee.

FISHER,J.:At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line of the defendant railroad company; and in coming daily by train to the company's office in the city of Manila where he worked, he used a pass, supplied by the company, which entitled him to ride upon the company's trains free of charge. Upon the occasion in question, January 20, 1915, the plaintiff arose from his seat in the second class-car where he was riding and, making, his exit through the door, took his position upon the steps of the coach, seizing the upright guardrail with his right hand for support.

On the side of the train where passengers alight at the San Mateo station there is a cement platform which begins to rise with a moderate gradient some distance away from the company's office and extends along in front of said office for a distance sufficient to cover the length of several coaches. As the train slowed down another passenger, named Emilio Zuiga, also an employee of the railroad company, got off the same car, alighting safely at the point where the platform begins to rise from the level of the ground. When the train had proceeded a little farther the plaintiff Jose Cangco stepped off also, but one or both of his feet came in contact with a sack of watermelons with the result that his feet slipped from under him and he fell violently on the platform. His body at once rolled from the platform and was drawn under the moving car, where his right arm was badly crushed and lacerated. It appears that after the plaintiff alighted from the train the car moved forward possibly six meters before it came to a full stop.

The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was lighted dimly by a single light located some distance away, objects on the platform where the accident occurred were difficult to discern especially to a person emerging from a lighted car.

The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is found in the fact that it was the customary season for harvesting these melons and a large lot had been brought to the station for the shipment to the market. They were contained in numerous sacks which has been piled on the platform in a row one upon another. The testimony shows that this row of sacks was so placed of melons and the edge of platform; and it is clear that the fall of the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment he stepped upon the platform. His statement that he failed to see these objects in the darkness is readily to be credited.

The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the injuries which he had received were very serious. He was therefore brought at once to a certain hospital in the city of Manila where an examination was made and his arm was amputated. The result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital where a second operation was performed and the member was again amputated higher up near the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of medical and surgical fees and for other expenses in connection with the process of his curation.

Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of Manila to recover damages of the defendant company, founding his action upon the negligence of the servants and employees of the defendant in placing the sacks of melons upon the platform and leaving them so placed as to be a menace to the security of passenger alighting from the company's trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found the facts substantially as above stated, and drew therefrom his conclusion to the effect that, although negligence was attributable to the defendant by reason of the fact that the sacks of melons were so placed as to obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself had failed to use due caution in alighting from the coach and was therefore precluded form recovering. Judgment was accordingly entered in favor of the defendant company, and the plaintiff appealed.

It can not be doubted that the employees of the railroad company were guilty of negligence in piling these sacks on the platform in the manner above stated; that their presence caused the plaintiff to