90 Fores v.

Miranda 105 Phil 266

March 4, 1959 | Reyes, J.B.L., J.
Common Carriers; Common Carriage of Passengers; Moral damages

Doctrine: A transfer if made without the requisite approval of the Public Service Commission, is
not effective and binding in so far as the responsibility of the grantee under the franchise in relation
to the public is concerned.

Where the injured passenger does not die, moral damages are not recoverable unless it is proved
that the carrier was guilty of malice or bad faith. Mere carelessness of the carrier's driver does not
per se constitute or justify an inference of malice or bad faith on the part of the carrier; and in the
case at bar there is no other evidence of such malice to support the award of moral damages for
breach of contract, therefore, without proof of bad faith or malice on the part of the defendant, as
required by Art. 2220, would be to violate the clear provisions of the law

Case Summary: Ireneo was a passenger of Dona Paz when the driver of said jeepney lost control
and figured in an accident. Paz Fores denied ownership of the jeepney while Ireneo filed claim for
damages including moral damages. SC held that Paz Fores was still owner sine no approval was
secured from PSC. On the other hand, moral damages moral damages are not recoverable unless
it is proved that the carrier was guilty of malice or bad faith or by reason of death.

FACTS:

Ireneo Miranda was one of the passengers on a jeepney, named Dona Paz, driven by Eugenio Luga.
It carried plate No. TPU-1163, series of 1952, and registered in the name of Paz Fores.

While the vehicle was descending the Sta. Mesa bridge at an excessive rate of speed, the driver lost
control thereof, causing it to swerve and to hit the bridge wall. Five of the passengers were injured,
including the respondent who suffered a fracture of the upper right humerus and was operated thrice.

The driver was charged with serious physical injuries through reckless imprudence, and upon
interposing a plea of guilty was sentenced accordingly.

Flores alleged before the CA that she allegedly sold the passenger jeep that was involved therein to a
certain Carmen Sackerman.

ISSUES: W/N Paz Fores is the owner of the jeepney hence liable to damages.

RULING:

On ownership

Section 20 of the Public Service Act (Commonwealth Act No. 146) provides that it shall be unlawful for
any public service or for the owner, lessee or operation thereof, without the previous approval and
authority of the Public Service Commission to sell, alienate, mortgage, encumber or lease its property,
franchises, certificates, privileges, or rights, or any part thereof
- Based on the foregoing a transfer if made without the requisite approval of the Public Service
Commission, is not effective and binding in so far as the responsibility of the grantee under
the franchise in relation to the public is concerned.
- The law was designed primarily for the protection of the public interest; and until the approval
of the Public Service Commission is obtained the vehicle is, in contemplation of law, still
under the service of the owner or operator standing in the records of the Commission which
the public has a right to rely upon.

- Note that nothing therein shall be construed "to prevent the transaction from being negotiated
or completed before its approval", means only that the sale without the required approval is
still valid and binding between the parties
On moral damages

Moral damages are not recoverable in damage actions predicated on a breach of the contract of
transportation, in view of Articles 2219 and 2220 of the new Civil Code

"ART. 2219. Moral damages may be recovered in the following and analogous cases:

(1)  A criminal offense resulting in physical injuries;

(2)  Quasi-delicts causing physical injuries;

xxx xxx xxx

ART. 2220. Willful injury to property may be a legal ground for awarding moral damages if the
court should find that, under the circumstance, such damages are justly due. The same rule
applies to breaches of contract where the defendant acted fraudulently or in bad faith."

By contrasting the provisions of these two articles it immediately becomes apparent that:

(a) In case of breach of contract (including one of transportation) proof of bad faith or fraud
(dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an award of moral
damages; and

(b) That a breach of contract cannot be considered included in the description term
"analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides for the
damages that are caused by contractual breach, but because the definition of quasi-delict in
Act. 2176 of the Code expressly excludes the cases where there is a "preexisting contractual
relation between the parties."

The exception to the basic rule of damages is a mishap resulting in the death of a passenger, in which
case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206, that entitles
the spouse, descendants and ascendants of the deceased passenger to "demand moral damages for
mental anguish by reason of the death of the deceased"

- makes it all the more evident that where the injured passenger does not die, moral damages
are not recoverable unless it is proved that the carrier was guilty of malice or bad faith.
- mere carelessness of the carrier's driver does not per se constitute or justify an inference of
malice or bad faith on the part of the carrier; and in the case at bar there is no other evidence
of such malice to support the award of moral damages for breach of contract, therefore,
without proof of bad faith or malice on the part of the defendant, as required by Art. 2220,
would be to violate the clear provisions of the law

DISPOSITION: In view of the foregoing considerations, the decision of the Court of Appeals is
modified by eliminating the award of P5.000.00 by way of moral damages (Court of Appeals
Resolution of May 5, 1957). In all other respects, the judgment is affirmed. No costs in this instance.
So ordered.

NOTES: