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Case Reporter
Spouses Teodoro and Nanette Perena, vs. Spouses Nicolas and Teresita Zarate
GR no. 157917
August 29, 2012
The facts of the case are as follows:
Spouses Perena were engaged in school bus service, transporting students from
Paranaque to Don Bosco Technical Institute in Makati. In June 1996, spouses Zarate
contracted spouses Perena to transport their son, Aaron Zarate, from their residence in
Paranaque to Don Bosco. As on the usual days of school in August 22, 1996, the van pickedup Aaron in their house, he then took the left side seat near the rear door of the said vehicle.
Considering that the students were due by 7:15am at Don Bosco, and because of heavy traffic
at the South Superhighway, the driver, Clemente Alfaro, decided to take the narrow path
underneath the Magallanes interchange which then is being used by Makati bound vehicles as
short cut. The said narrow path has a railroad crossing, and while traversing the said narrow
path, closely tailing a huge passenger bus, the driver of the school service decided to overtake
the said bus at about 50 meters away from the railroad crossing. Considering that the stereo is
playing loudly and blinded by the bus, he did not hear the blowing of horn of the oncoming
train as a warning to the vehicles. The bus successfully crossed the railroad crossing but the
van did not. The train hit the rear side of the van and the impact threw 9 of the 12 students
including Aaron. His body landed in the path of the train, which dragged him, severed his
head, instantaneously killing him. Devastated by the sudden death of their son, spouses
Zarate commenced this action for damages. The Regional Trial Court ruled in favor of the
spouses Zarate. On appeal, The Court of Appeals affirmed the decision of the lower court but
lowered the moral damages to php 2,500,000.00.
Whether or not there is a breach of contract of a common carrier and whether there is
The Supreme Court ruled in favor spouses Zarate, affirming the decision of the Court
of Appeals.
In this case, the Supreme Court, once and for all lay the matter to rest that the school
service is a common carrier and not a private carrier, and as such, they are required to observe
the extraordinary diligence as provided under Article 1733 of the Civil Code.
According to the Supreme Court, the true test for a common carrier is not the quantity
or extent of the business actually transacted, or the number and character of the conveyances
used in the activity, but whether the undertaking is a part of the activity engaged in by the
carrier that he has held out to the general public as his business or occupation. Otherwise
stated, making the activity or holding himself or itself out to the public as a ready to act for
all who may desire his or its services to transport goods or persons for a fee.

Applying the considerations mentioned above, there is no question that Perenas as the
operators of a school 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; c) transporting students for a fee. Despite catering limited clientele, the Perenas
operated as a common carrier because they hold 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.
On the second issue, Article 1756 of the Civil code provides that, In case of death of
or injuries to passengers, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as prescribed in
articles 1733 and 1755. In this case, Aaron Zarate died, and thus as provided under the abovementioned law, they are negligent.