Spouses Teodoro and Nanette Pereña vs Spouses Nicolas and Teresita Zarate

January 28, 2014

Civil Law – Common Carrier – Private School Transport are Common Carriers
Torts and Damages – Heirs of a high school student may be awarded damages for loss income 

In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Pereña to transport their (Zarate’s) son, Aaron Zarate, to and from school. The Pereñas were owners of a van being used for private school transport.

At about 6:45am of August 22, 1996, the driver of the said private van, Clemente Alfaro, while the children were on board including Aaron, decided to take a short cut in order to avoid traffic.  The usual short cut was a railroad crossing of the Philippine National Railway (PNR).

Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up which means it was okay to cross. He then tried to overtake a bus. However, there was in fact an oncoming train but Alfaro no longer saw the train as his view was already blocked by the bus he was trying to overtake. The bus was able to cross unscathed but the van’s rear end was hit. During the collision, Aaron, was thrown off the van. His body hit the railroad tracks and his head was severed. He was only 15 years old.

It turns out that Alfaro was not able to hear the train honking from 50 meters away before the collision because the van’s stereo was playing loudly.

The Zarates sued PNR and the Pereñas (Alfaro became at-large). Their cause of action against PNR was based on quasi-delict. Their cause of action against the Pereñas was based on breach of contract of common carriage.

In their defense, the Pereñas invoked that as private carriers they were not negligent in selecting Alfaro as their driver as they made sure that he had a driver’s license and that he was not involved in any accident prior to his being hired. In short, they observed the diligence of a good father in selecting their employee.

PNR also disclaimed liability as they insist that the railroad crossing they placed there was not meant for railroad crossing (really, that’s their defense!).

The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the decision of the RTC and the CA, they awarded damages in favor of the Zarates for the loss of earning capacity of their dead son.

The Pereñas appealed. They argued that the award was improper as Aaron was merely a high school student, hence, the award of such damages was merely speculative. They cited the case of People vs Teehankee where the Supreme Court did not award damages for the loss of earning capacity despite the fact that the victim there was enrolled in a pilot school.

ISSUES: Whether or not the defense of due diligence of a good father by the Pereñas is untenable. Whether or not the award of damages for loss of income is proper.

HELD: Yes, in both issues.

Defense of Due Diligence of a Good Father

This defense is not tenable in this case. The Pereñas are common carriers. They are not merely private carriers. (Prior to this case, the status of private transport for school services or school buses is not well settled as to whether or not they are private or common carriers – but they were generally regarded  as private carriers). Private transport for schools are common carriers. The Pereñas, as the operators of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over established roads by the method by which the business was conducted; and (c) transporting students for a fee. Despite catering to a limited clientèle, the Pereñas operated as a common carrier because they held themselves out as a ready transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a fee.

Being a common carrier, what is required of the Pereñas is not mere diligence of a good father. What is specifically required from them by law is extraordinary diligence – a fact which they failed to prove in court. Verily, their obligation as common carriers did not cease upon their exercise of diligently choosing Alfaro as their employee.

(It is recommended that you read the full text, the Supreme Court made  an elaborate and extensive definition of common and private carriers as well as their distinctions.)

Award of Damages for Aaron’s loss of earning capacity despite he being a high school student at the time of his death

The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was of normal health and was an able-bodied person. Further, the basis of the computation of his earning capacity was not on what he would have become. It was based on the current minimum wage. The minimum wage was validly used because with his circumstances at the time of his death, it is most certain that had he lived, he would at least be a minimum wage earner by the time he starts working. This is not being speculative at all.

The Teehankee case was different because in that case, the reason why no damages were awarded for loss of earning capacity was that  the defendants there were already assuming that the victim would indeed become a pilot – hence, that made the assumption speculative. But in the case of Aaron, there was no speculation as to what he might be – but whatever he’ll become, it is certain that he will at the least be earning minimum wage.


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