ADVERTISEMENT
THIRD DIVISION
[G.R. No. 212252. February 28, 2018.]
PHILIPPINE RABBIT BUS LINES, INC., petitioner, vs. AURORA A. LIM, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedFebruary 28, 2018, which reads as follows: HTcADC
"G.R. No. 212252 (Philippine Rabbit Bus Lines, Inc. v. Aurora A. Lim) — This is a petition for review on certiorari seeking to reverse and set aside the September 30, 2013 Decision 1 and March 19, 2014 Resolution 2 of the Court of Appeals, Cebu City (CA) in CA-G.R. CEB-CV No. 01331. The CA affirmed the September 19, 2005 Decision 3 of the Regional Trial Court of Iloilo City, Branch 26 (RTC) in Civil Case No. 23877, a case for damages due to quasi-delict.
The Antecedents
On January 8, 1997, Aurora A. Lim (respondent), a Chemical Engineer by profession and the Vice President for Operations of Central Philippine University (CPU), was on her way to Baguio City to inspect the condition of the cottages owned by CPU. She was accompanied by CPU Physician Dra. Sonia Gallon (Dra. Gallon) and Prof. Angelina Declarador (Prof. Declarador). Respondent, along with her companions, were paying passengers of Bus No. 917, owned and operated by Philippine Rabbit Bus Lines (petitioner) and driven by Virgilio Magno (Magno).
At about 4:30 in the afternoon of said date and while travelling along Marcos Highway at Tuba, Benguet, Magno steered the bus while negotiating a curve, thus, the bus made a sudden movement, which caused the seat occupied by respondent to topple over. As a result, respondent fell sidewards and lost consciousness. When she recovered, Prof. Declarador, who was behind her on the bus, asked her what happened. Meanwhile, Dra. Gallon held her head with her seat inclined to the side.
Respondent and her companions requested the bus conductor, Edgardo Cancino (Cancino), to bring them to the nearest hospital but the bus driver ignored the request and proceeded to the Baguio City terminal. Upon arrival at the bus terminal, Dra. Gallon went down from the bus and informed the management of petitioner about the incident. Respondent and Prof. Declarador stayed on the bus.
While waiting, Prof. Declarador took a picture of respondent's seat. The fallen seat was detached from its rusted mounting on the floor of the bus. Meanwhile, since no help came from the management, Dra. Gallon decided to take respondent to the Sacred Heart Hospital via a taxicab. She asked Cancino to accompany them as they did not know where the hospital was located. At the hospital, respondent underwent an x-ray examination, had an ice pack placed on her chest, and was prescribed a painkiller. After their hospital visit, they proceeded to the Baguio City Police Precinct to report the incident and a certification was then issued to them. Then, they proceeded to their boarding house and arrived late in the evening.
The next day, respondent was still suffering from the pain. Thus, she called a certain Civil Engineer Caingcoy to assist her in inspecting the cottages as she had difficulty in going up and down the stairs. During her entire stay in Baguio City, respondent continued to suffer aches and pains due to the injuries she sustained from the incident. Because of her condition, they had to go home to Iloilo City via airplane. Respondent also took a leave of absence from work for a week because of the pain. Even after returning to work, she experienced difficulty in moving and could not normally do her usual daily activities.
On January 27, 1997, respondent, through her lawyer, sent a letter to petitioner demanding compensation in the amount of One Million Pesos (P1,000,000.00) due to the suffering and pain she underwent because of the incident. Petitioner replied in a letter, dated March 23, 1997, and asked for details on the incident and documents, such as medical certificate, hospital receipts, doctor's prescription and other pertinent documents so they could refer the matter to their insurer. Respondent replied with a letter dated April 17, 1997, furnishing the company with their requested documents. On September 4, 1997, respondent sent another letter, stating that she would take legal action to protect her interest if there was no forthcoming proposal for settlement. aScITE
Thus, on October 17, 1997, respondent filed with the RTC of Iloilo City, raffled to Branch 26, a civil case for "damages due to quasi-delict."
The RTC Ruling
In its decision dated September 19, 2005, the RTC ruled in favor of respondent. It held that petitioner is a common carrier as defined under Article 1732 of the Civil Code. As a common carrier, it is bound to observe extraordinary diligence in the carriage of goods and passengers and any neglect or malfeasance on the part of the carrier's employees may be a ground for an action for damages. The RTC found that the cause of respondent's injury was the breaking of the metal armrest of the seat occupied by respondent, aggravated by the fact that Magno maneuvered the bus in a sudden and reckless manner while traversing a curve which caused the seat to topple down. According to the RTC, the injury was caused not only by the failure of the driver to exercise the diligence required under the circumstances but also a failure of the bus company to repair the rusted part of the legs of the seat that respondent occupied. The RTC held that the periodic visual inspection of the carrier by petitioner could have prevented the injury of respondent. Thus, the RTC held petitioner liable for breach of contract.
The dispositive portion of the RTC decision reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered ordering defendant Philippine Rabbit Bus Lines, Inc. to pay to the plaintiff the amount of Five Hundred Thousand Pesos (P500,000.00) as moral damages, One Hundred Thousand Pesos (P100,000.00) for exemplary damages and Fifty Thousand Pesos (P50,000.00) as attorney's fees and cost of suit. 4
Aggrieved, petitioner and Magno appealed to the CA. 5
The CA Ruling
In its decision dated September 30, 2013, the CA denied the appeal and affirmed in toto the decision of the RTC. It held that a common carrier has the duty to exercise the utmost diligence in the carriage of passengers. In case of death or injury, a carrier is presumed to have been at fault or negligent. The burden is then on the carrier to prove that the injury or death was due to an unforeseen event or to force majeure. The CA found that, in this case, respondent was able to prove that her injury was due to her seat toppling over. Accordingly, the burden of proof shifted to petitioner to prove that it was not negligent or that the injury was due to an unforeseen event or to force majeure. However, petitioner only testified that it exercised due diligence in the selection of the driver and the conductor. It offered no explanation as to the breaking off of the rusted leg from its mounting. The CA found that petitioner failed to rebut the statutory presumption that the proximate cause of respondent's injuries was its negligence.
Petitioner moved for reconsideration but it was denied by the CA in its March 19, 2014 resolution.
Hence, this petition.
Issue
WHETHER OR NOT THE CA COMMITTED REVERSIBLE ERROR IN AFFIRMING THE AWARD OF MORAL DAMAGES, EXEMPLARY DAMAGES, ATTORNEY'S FEES AND COSTS OF SUIT BY THE RTC.
Petitioner contends that the CA erred when it upheld the award of moral damages "in the astronomical sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00) despite the fact that there were no direct findings of bad faith or fraud." It argues that the RTC equated negligence with fraud and bad faith without any evidentiary basis in order to justify the award of moral and exemplary damages. Petitioner adds that the amounts awarded, moral damages of Five Hundred Thousand Pesos (P500,000.00) and exemplary damages of One Hundred Thousand Pesos (P100,000.00) "allegedly for physical suffering consisting of a superficial soft tissue hematoma (with a normal chest x-ray) contravenes the doctrine that 'moral damages should not be punitive in nature' x x x and should be 'proportional to and in approximation of the suffering inflicted' x x x."
Petitioner also contends that the CA erred in affirming the award of moral damages and exemplary damages on the basis that the breach was committed through tort. It argues that respondent never alleged tortious conduct or quasi-delict and the RTC never ruled on this matter. It asserts that the instant case is simply a case for breach of contract of carriage and, as such, there must be a finding of bad faith or fraud to award moral damages. Hence, it concludes that since the issue of breach of contract by means of tort was not raised, the CA has no jurisdiction to use the same as basis for the award of damages that was premised on an entirely different proposition. HEITAD
Lastly, petitioner argues that even assuming that respondent is entitled to damages, the amounts awarded are not proportionate to the suffering of respondent as her injury was merely superficial.
In her Comment 6 dated October 23, 2014, respondent asserts that the petition merely reiterates the issues raised by petitioner before the CA. First, respondent avers that petitioner's failure to ensure that respondent's seat was not defective constitutes fraud or actual bad faith, or at the very least, gross negligence amounting to bad faith which warrants the award of moral damages. Second, respondent cites the ruling in Fabre v. Court of Appeals, 7 which states that it is unnecessary to determine whether the case is one for culpa contractual or culpa aquiliana because, while the relation of passenger and carrier is contractual both in origin and nature, the act that breaks the contract may nevertheless be also a tort. Lastly, respondent alleges that since the CA affirmed in toto the decision of the RTC, the substantive issue of whether respondent is entitled to moral and exemplary damages, and attorney's fees is a factual issue, which is beyond the province of a petition for review on certiorari.
In its Reply 8 dated June 29, 2015, petitioner argues that the RTC awarded moral damages and exemplary damages without any finding of fraud or bad faith on its part. It added that the CA affirmed the award on the basis that the breach was committed through tort. However, petitioner maintains that there was no allegation of bad faith or tortious conduct in the complaint and, as such, it would be a violation of due process if it is held liable for damages. Further, petitioner asserts than it did not commit any tortious conduct; and even the RTC did not make any such finding. As to the amount of damages, petitioner emphasizes that respondent merely suffered a soft tissue injury which would heal in seven (7) days and for which she was given only an oral pain reliever (mefenamic acid). Petitioner highlights that the injury was so superficial that it does not warrant the amount of damages awarded.
The Court's Ruling
The petition is bereft of merit.
The CA did not commit any reversible error in affirming the ruling of the RTC awarding respondent moral and exemplary damages, attorney's fees and costs of suit. The Court, however, finds the amounts awarded to be excessive, hence, should be modified.
Award of Moral Damages; Proper
The CA did not err in awarding moral damages to respondent. Petitioner argues that the CA affirmed the award of moral damages on the basis of quasi-delict, a cause of action which respondent allegedly failed to raise and which was allegedly not ruled upon by the RTC. However, the CA's disposition on the matter reveals otherwise.
For purposes of clarity, the Court reproduces the CA's disposition on the matter of moral damages:
As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract. However, moral damages may be recovered when the defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton disregard of contractual obligations and when the act of breach of contract itself constitutes the tort that results in physical injuries. In this case, it is breaking of the rusted leg of [respondent's] seat due to the sudden swerving of the bus that caused [respondent's] injury and which breached the contract of carriage between [petitioner] and [respondent]. 9
Meanwhile, the RTC expressly stated in its September 19, 2005 decision that "[t]he cause of the injury was the breaking of the metal armrest of the seat that [respondent] occupied, aggravated by the fact that the driver [Magno] maneuvered the bus in a sudden and reckless manner while manipulating a curve which caused the seat to topple down." It held that "a mere visual inspection could have determined whether the seats of the bus were defective or not x x x." Thus, it is "x x x not only that the said driver failed to exercise the diligence required in the circumstances, but also the failure of the bus company to repair the rusted part of the legs of the seat that [respondent] occupied" which caused the latter's injury. ATICcS
Verily, it is apparent to the Court that the CA affirmed the award of moral damages because it concurred with the RTC's finding that petitioner wantonly disregarded its contractual obligations when it failed to repair the rusted part of the legs of the seat occupied by respondent. For the CA, this wanton disregard by petitioner of its contractual obligations is tantamount to a breach of contract. Thus, there is no truth to petitioner's allegation that the CA affirmed the award of moral damages to respondent on the basis of quasi-delict. Rather, it upheld the award on the ground that petitioner was in wanton disregard of its contractual obligations.
At this point, the Court emphasizes that petitioner was pronounced by the RTC to be liable for breach of contract of carriage (culpa contractual), which was affirmed by the CA.
This is important to note because in an action for breach of contract of carriage, moral damages may be awarded only in case (1) an accident results in the death of a passenger; or (2) the carrier is guilty of fraud or bad faith. 10
In Fores v. Miranda, 11 this Court ruled that "negligence may be occasionally so gross as to amount to malice." 12 This principle was more categorically stated in Victory Liner, Inc. v. Gammad, 13 where the Court ruled that:
In culpa contractual or breach of contract, moral damages may be recovered when the defendant acted in bad faith or was guilty of gross negligence (amounting to bad faith) or in wanton disregard of contractual obligations and, as in this case, when the act of breach of contract itself constitutes the tort that results in physical injuries. 14 (emphasis supplied)
The Court has previously awarded moral damages to injured passengers in cases of culpa contractual. In Darines, et al. v. Quiñones, 15 the Court noted that in two previous cases, common carriers liable for breach of contract of carriage were held liable for moral damages in favor of the injured passengers on the ground that they committed gross negligence, which amounted to bad faith. 16 Thus, moral damages may be awarded in cases of breach of contract of carriage when the negligence is so gross that that it amounts to bad faith or when it is in wanton disregard of contractual obligations.
In the instant case, the Court finds that the negligence of petitioner is so gross that it constitutes bad faith. Both the RTC and the CA found that the cause of the injury of respondent was the breaking of the rusted leg of the seat respondent occupied, aggravated by the fact that the driver Magno maneuvered the bus in a sudden and reckless manner while negotiating a curve, which caused the seat to topple down. Petitioner could have easily seen and remedied the rusted leg of the seat had it conducted a routine visual inspection of the bus prior to the trip.
The record is bereft of any explanation from petitioner as to why the bus with a rusted seat was allowed to proceed with its journey to Baguio. This means that either petitioner did not conduct any inspection of the bus prior to its trip to Baguio or, if it did, deliberately chose to ignore the rusted seat and allowed the bus to proceed with its journey.
To the Court's mind, either scenario constitutes gross negligence amounting to malice or bad faith on the part of petitioner. It wantonly disregarded its contractual obligations when it failed to perform a routine check-up and effect the necessary repair on the rusted leg of the bus. Again, a mere visual inspection of the interior of the bus would have revealed the presence of the rusted seat and petitioner could have easily repaired the same or replaced it. Thus, if petitioner exercised the extraordinary diligence required of it as a common carrier, the injury caused to respondent could have been simply prevented.
As a result of petitioner's failure to exercise the extraordinary diligence required of a common carrier, respondent sustained injuries which were directly caused by the breaking of the rusted leg of the seat she occupied. The Court agrees with the CA that this act of breach of contract of carriage is in wanton disregard of petitioner's contractual obligations. On this basis, the Court affirms the award of moral damages.
However, the Court finds the award of moral damages in the amount of Five Hundred Thousand Pesos (P500,000.00) to be excessive.
The purpose of awarding moral damages is to enable the injured party to obtain means, diversion or amusement that will serve to alleviate the moral suffering he has undergone by reason of defendant's culpable action. Article 2216 of the Civil Code provides that assessment of damages is left to the discretion of the court according to the circumstances of each case. This discretion is limited by the principle that the amount awarded should not be palpably excessive as to indicate that it was the result of prejudice or corruption on the part of the trial court. Simply put, the amount of damages must be fair, reasonable and proportionate to the injury suffered. 17
In this case, respondent proved that she sustained persistent aches and pains due to the injury. According to Dr. Manuel B. de Asis, the expert witness presented by respondent, the traumatic injury she suffered caused damage over the right portion of her chest, especially the cartilage portion of her right chest. According to Dr. de Asis, the pain would take a long time to disappear and it may recur and cause discomfort. TIADCc
In light of this, the Court deems it proper to reduce the moral damages in the amount of Two Hundred Thousand Pesos (P200,000.00). Said amount is sufficient and justified in view of the fact that the only traumatic injury respondent suffered was damage over the right portion of her chest.
Award of Exemplary Damages Proper
The award of exemplary damages is likewise affirmed. Exemplary damages, which are awarded by way of example or correction for the public good, may be recovered in contractual obligations, as in this case, if petitioners acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. 18 The aim of awarding exemplary damages is to deter serious wrongdoings. 19
The cause of respondent's injury, as pointed out earlier, amounted to wanton, fraudulent, reckless, oppressive, or malevolent action and inaction of petitioner. However, the amount is modified to Fifty Thousand Pesos (P50,000.00).
Award of Attorney's Fees and Costs of Suit
The Court also affirms the award of attorney's fees and costs of suit. Attorney's fees may be awarded in cases where exemplary damages are awarded. 20 However, the amount of attorney's fees awarded must also be reduced, hence, it is modified to Thirty Thousand Pesos (P30,000.00).
All amounts awarded shall earn legal interest at the rate of six percent (6%) per annum computed from the date of finality of this judgment until their full satisfaction.
WHEREFORE, the September 30, 2013 Decision and March 19, 2014 Resolution of the Court of Appeals in CA-G.R. CEB-CV No. 01331 are AFFIRMED with MODIFICATION. Petitioner Philippine Rabbit Bus Lines, Inc. is HEREBY ORDERED to pay respondent Aurora A. Lim the amount of moral damages at Two Hundred Thousand Pesos (P200,000.00), the amount of exemplary damages at Fifty Thousand Pesos (P50,000.000), and the amount of attorney's fees at Thirty Thousand Pesos (P30,000.00) plus costs of suit. The legal interest shall be imposed on the monetary awards granted at the rate of six percent (6%) per annum from the finality of this judgment until fully paid.
SO ORDERED."
Very truly yours,
WILFREDO V. LAPITANDivision Clerk of CourtBy:(SGD.) MISAEL DOMINGO C. BATTUNG IIIDeputy Division Clerk of Court
Footnotes
1.Rollo, pp. 20-34; penned by Associate Justice Marilyn B. Lagura-Yap with Associate Justices Pampio A. Abarintos and Gabriel T. Ingles, concurring.
2.Id. at 35-36.
3.Id. at 55-74; penned by Presiding Judge Antonio M. Natino.
4.Id. at 74.
5. Although the RTC did not find Magno liable in its dispositive portion, Magno, together with petitioner, appealed the judgment per the Notice on Appeal (rollo, p. 75) and Appellant's Brief (id. at 76-94). The succeeding discussion will pertain to petitioner only.
6.Supra note 1 at 143-156.
7. 328 Phil. 774 (1996).
8.Supra note 1 at 176-184.
9.Id. at 33.
10.Darines, et al. v. Quiñones, et al., G.R. No. 206468, August 2, 2017; citing CIVIL CODE, Art. 1764, in relation to Art. 2206 (3) and Art. 2220.
11. 105 Phil. 266 (1959).
12.Id. at 276.
13. 486 Phil. 593 (2004).
14.Id. at 593.
15.Supra note 10.
16.Id., citing Gatchalian v. Delim, G.R. No. 206468, August 2, 2017 and Spouses Fabre v. Court of Appeals, 328 Phil. 774 (1996).
17.Air France v. Gillego, 653 Phil. 153 (2010).
18.Japan Airlines v. Simangan, 575 Phil. 377 (2008).
19.Supra note 17.
20. CIVIL CODE, Art. 2208.