FORES v MIRANDA
Breach of contract cannot be
G.R. No. L-12163 | March 4, 1959 | Reyes, JBL, J. | Medina
DOCTRINE: In the absence of fraud or bad faith on the part of
the carrier, moral damages are not recoverable in actions
predicated on breach of contract of carriage.
FACTS
 Respondent Ireneo Miranda was one of the
passengers on a jeep driven by Eugenio Luga. While
the jeep was descending Sta. Mesa bridge at an
excessive speed, Luga lost control of it, causing it to
swerve and hit the bridge wall
 5 passengers were injured, including Miranda, who
suffered a fracture in his arm
o He was taken to the National Orthopedic
Hospital, where he underwent 3 surgeries
o At the time of the trial, Miranda had not yet
recovered the use of his right arm
 The jeep was registered in the name of petitioner
Paz Fores, who allegedly sold it the day before the
accident to a certain Carmen Sackerman
 Luga was charged with serious physical injuries thru
reckless imprudence. He pled guilty
 CA awarded to Miranda actual damages, attorney’s
fees, and moral damages.
ISSUES:
1. WON the approval of the Public Service Commission
is necessary for the sale of a public service vehicle
even without conveying the authority to operate the
same – YES
a. Sec. 20, Public Service Act clearly prohibits
the sale, alienation, lease, or encumbrance
of the property, franchise, certificate,
privileges or rights, or any part thereof of
the owner or operator of the public service
without approval or authorization of the
Public Service Commission
b. The Court has also held in previous cases
that such transfer, if done without the
approval of the Commission, is not effective
and binding insofar as the responsibility of
the grantee under the franchise in relation
to the public is concerned
2. MAIN: WON moral damages should be awarded –
NO
a. In the absence of fraud or bad faith on the
part of the carrier, moral damages are not
recoverable in actions predicated on breach
of contract of carriage.
b. By contrasting Arts. 2219 and 2220 of the
Civil Code re: when moral damages may be
recovered, it becomes apparent that:
i. In case of breach of contract,
proof of bad faith or fraud is
essential to justify an award of
moral damages
ii.
considered as an “analogous case”
in Art. 2219
1. This is because the
definition of quasi-delict
(CC Art. 2176) excludes
the cases where there is a
pre-existing contractual
relation between the
parties
c. The mere carelessness of the carrier’s driver
does not per se constitute malice or bad
faith; in the case at bar, there is no evidence
of such malice to support an award of moral
damages
Explanation for the limitation imposed by Art. 2220 on
amount of recovery (i.e. moral damages only upon proof of
bad faith)
 Before such limitation was imposed, parties suing a
carrier for breach of contract were in an
advantageous position since mere proof of injury to
the passenger creates a presumption that the carrier
is liable. Unlike in quasi-delict suits, the carrier may
not also escape liability by proving due diligence
 Difference in conditions, defenses, and proofs, as
well as the codal concept of quasi-delict as extra-
contractual negligence makes it necessary to
differentiate between action ex contractu and
actions quasi ex delicto. Thus, an action for breach
of contract cannot simultaneously be an action on
tort.
RULING: Decision of the CA is modified by eliminating the
award of P5,000 by way of moral damages. Affirmed in all
other respects.
PERTINENT PROVISIONS
CC 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
CC ART. 2220. Willful injury to property may be a legal ground
for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The
same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.
CC ART. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this
Chapter.