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JOSE SANICO v. WERHERLINA P. COLIPANO

FACTS:

Colipano filed a complaint for breach of contract of carriage and damages against Sanico and Castro. Colipano claimed that on December 25, 1993, she and her daughter were passengers in a jeepney operated by Sanico and driven by Castro. During the ride, the jeepney slid backwards on an uphill incline and Colipano's foot got crushed between the step board and a coconut tree. Her leg was badly injured and had to be amputated.

Sanico and Castro admitted that Colipano's leg was crushed and amputated but argued that it was Colipano's fault. They claimed that the jeepney lost power and slid backwards, but Colipano tried to disembark and her foot got caught in the process. Sanico also asserted that he paid for all the hospital and medical expenses of Colipano, and that she eventually executed an Affidavit of Desistance and Release of Claim.

The RTC found Sanico and Castro liable for breach of contract of carriage and awarded actual and compensatory damages in favor of Colipano. The CA affirmed the decision with modification, reducing the amount awarded for compensatory damages. Sanico and Castro appealed to the CA but did not move for reconsideration before filing a petition before the Supreme Court.

ISSUES:

  1. Whether only Sanico breached the contract of carriage.

  2. Whether Castro can be held liable for the breach of the contract of carriage.

  3. Whether the defense of engine failure exonerates the defendant from liability

  4. Whether the defendant contravened the tenor of his obligation as a common carrier

  5. Whether the defendant exercised extraordinary diligence in the selection and supervision of his employees

  6. Whether the Affidavit of Desistance and Release of Claim is binding on the plaintiff

  7. Whether the waiver of the right to claim damages is valid and enforceable.

  8. Whether the amount of compensatory damages granted is correct.

  9. Whether the testimony of the plaintiff on her age and annual income should be considered as evidence.

  10. Whether the plaintiff should be awarded damages for loss of earning capacity despite the absence of documentary evidence.

  11. Whether the court applied the correct formula for computing the loss of the plaintiff's earning capacity.

  12. Whether the defendant should be liable to pay interest.

RULING:

  1. Yes, only Sanico breached the contract of carriage. Castro cannot be held liable as he is not a party to the contract of carriage.

  2. No, Castro cannot be held liable for the breach of the contract of carriage as he is not a party to the contract.

  3. The defense of engine failure does not exonerate the defendant from liability. It aggravates his already precarious position as it hints at a lack of regular maintenance and proof of fault or negligence.

  4. The defendant contravened the tenor of his obligation as a common carrier by making the plaintiff sit on an empty beer case, which impaired the strict and faithful fulfillment of his obligation to safely transport the plaintiff.

  5. The defendant's exercise of extraordinary diligence in the selection and supervision of his driver does not exonerate him from liability. The liability of common carriers does not cease upon proof of diligence in the selection and supervision of employees.

  6. The Affidavit of Desistance and Release of Claim is not binding on the plaintiff as there was no proof that its contents were sufficiently explained to her and she was unable to understand English.

  7. The waiver of the right to claim damages is not valid and enforceable. The waiver can only be valid if it is clear and unequivocal, understood by the person waiving the right, and not contrary to public policy. In this case, the person waiving the right did not understand the document she signed as it was written in a language she did not understand. The waiver is also contrary to public policy, as it weakens the standard of extraordinary diligence required from common carriers. Therefore, the waiver is void.

  8. The amount of compensatory damages granted is incorrect. The court can only award actual damages that are duly supported by receipts. However, the court can also award compensatory damages for loss of income. The formula used to calculate the compensatory damages is based on the net earning capacity, which takes into account the life expectancy and the gross annual income minus living expenses. In this case, the court modified the award of compensatory damages from P360,000.00 to P200,000.00 based on the application of the formula.

  9. The testimony of the plaintiff on her age and annual income is admissible as evidence. It is not susceptible to an objection on the ground that it is self-serving, as it was given in court, under oath, and subject to cross-examination.

  10. The plaintiff should be awarded damages for loss of earning capacity despite the absence of documentary evidence. This is an allowed exception to the general rule. In this case, the plaintiff falls under the exception of being a self-employed individual earning less than the minimum wage, with no available documentary evidence in her line of work.

  11. The court erred in using the plaintiff's age at the time she testified as the basis for computing the loss of earning capacity. The loss of earning capacity should have been computed based on the plaintiff's age at the time the injury was sustained. Thus, the computation of the loss of earning capacity should be adjusted accordingly.

  12. The defendant should be liable to pay interest. Interest is a form of actual or compensatory damages, and the court has the discretion to allow it in the case of a breach of contract. In this case, interest should be awarded from the date of the trial court's decision. The applicable rate of interest is 6% per annum.

PRINCIPLES:

  • In a contract of carriage, the liability of the carrier is direct as the contract is between the carrier and the passenger.

  • Employed drivers are not parties to the contract of carriage and cannot be held liable for the breach of the contract of carriage.

  • Common carriers are required to observe extraordinary diligence in safely transporting passengers and are presumed to be at fault or negligent in case of injury or death of passengers.

  • The presumption of fault or negligence on the part of the carrier can only be overcome by proof of extraordinary diligence exercised to ensure the safety of the passengers.

  • Negligence on the part of the carrier can be established by showing that the carrier placed the passenger in a peril greater than that to which other passengers were exposed.

  • Factual findings of the trial court are entitled to great weight on appeal and should not be disturbed except for strong and valid reasons.

  • Common carriers may be liable for damages when they contravene the tenor of their obligations.

  • The liability of common carriers does not cease upon proof of diligence in the selection and supervision of employees.

  • For a waiver to be valid, it must be clear and unequivocal, and the person waiving the right must understand what they are waiving and the effect of such waiver.

  • Factual findings by the Court of Appeals are conclusive and not reviewable by the Supreme Court, especially when the CA affirmed the factual findings of the trial court.

  • Waivers of the right to claim damages must be clear, unequivocal, understood by the person waiving the right, and not contrary to public policy.

  • Public policy aims to promote the social and general well-being of the inhabitants. In the case of common carriers, the state imposes extraordinary diligence to ensure the safety of the public who avail themselves of their services.

  • Testimonial evidence given by a party in court is not considered self-serving evidence and cannot be objected to on that ground.

  • Testimony given in court is admissible as evidence and not susceptible to objections of being self-serving.

  • Damages for loss of earning capacity may be awarded despite the absence of documentary evidence under certain exceptions.

  • The computation of loss of earning capacity should be based on the plaintiff's age at the time the injury was sustained.

  • Interest may be awarded as actual or compensatory damages in the case of a breach of contract. The applicable rate of interest is 6% per annum.