The Supreme Court has clarified that in a contract of carriage, only the vehicle owner is directly liable for breaches, not the driver. Furthermore, any waiver signed by an injured passenger without full understanding of its implications is void and against public policy. This ruling reinforces the high standard of care expected from common carriers and protects the rights of passengers who may be vulnerable after an accident.

When a Jeepney Ride Turns Wrong: Who Pays When a Passenger is Injured?

This case, Jose Sanico and Vicente Castro v. Werherlina P. Colipano, arose from a tragic incident on Christmas Day in 1993. Werherlina Colipano, riding as a passenger in a jeepney operated by Jose Sanico and driven by Vicente Castro, suffered a severe leg injury that resulted in amputation. Colipano sued both Sanico and Castro for breach of contract of carriage and damages. The central legal question was whether both the owner and the driver could be held liable and whether a subsequent affidavit of desistance signed by Colipano was valid.

The Regional Trial Court (RTC) initially found both Sanico and Castro solidarily liable, awarding Colipano actual and compensatory damages. The Court of Appeals (CA) affirmed the RTC decision but reduced the compensatory damages. However, the Supreme Court partly granted the petition, clarifying the scope of liability in contracts of carriage and addressing the validity of the waiver.

The Supreme Court emphasized that a contract of carriage exists specifically between the passenger and the operator or owner of the vehicle. In this context, the Court referenced Soberano v. Manila Railroad Co., stating:

The complaint against Caccam was therefore properly dismissed. He was not a party to the contract; he was a mere employee of the BAL. The parties to that contract are Juana Soberano, the passenger, and the MRR and its subsidiary, the BAL, the bus owner and operator, respectively; and consequent to the inability of the defendant companies to carry Juana Soberano and her baggage arid personal effects securely and safely to her destination as imposed by law (art. 1733, in relation to arts. 1736 and 1755, N.C.C.), their liability to her becomes direct and immediate.

Building on this principle, the Court declared that only Sanico, as the owner and operator, had a direct contractual relationship with Colipano. Castro, as the driver, was merely an employee and not a party to the contract. The elements of a contract of carriage were present between Colipano and Sanico: consent (acceptance of Colipano as a passenger), cause or consideration (payment of fare), and object (transportation to the destination). Therefore, Colipano had no cause of action against Castro, leading to the dismissal of the complaint against him.

The Court then turned to Sanico’s liability as a common carrier. Article 1733 of the Civil Code mandates that common carriers observe extraordinary diligence for the safety of their passengers:

ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

This extraordinary diligence requires common carriers to carry passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons. Article 1756 of the Civil Code further states that in case of injury to passengers, common carriers are presumed to have been at fault or negligent. To overcome this presumption, Sanico had to prove that he exercised the required extraordinary diligence, which he failed to do.

The court drew parallels with Calalas v. Court of Appeals, where allowing a passenger to sit on an extension seat was deemed a breach of the standard of care. Similarly, in Colipano’s case, making her sit on an empty beer case at the edge of the jeepney’s rear entrance significantly increased her risk. The defense of engine failure also failed to exonerate Sanico; instead, it suggested a lack of regular maintenance, further proving negligence.

Moreover, Article 1170 of the Civil Code provides that those who contravene the tenor of their obligations are liable for damages. As the Court stated in Magat v. Medialdea:

The phrase ‘in any manner contravene the tenor’ of the obligation includes any illicit act or omission which impairs the strict and faithful fulfillment of the obligation and every kind of defective performance.

Sanico’s actions clearly contravened his obligation to safely transport Colipano. His argument that he exercised due diligence in hiring an experienced driver was insufficient, as Article 1759 of the Civil Code specifies that the liability of common carriers does not cease upon proving diligence in the selection and supervision of employees. The only defenses available are proof of extraordinary diligence or a fortuitous event, neither of which applied in this case.

Regarding the Affidavit of Desistance and Release of Claim, the Court found it void. For a waiver to be valid, it must be clear, unequivocal, and not contrary to law or public policy. As the RTC and CA both determined, Colipano did not understand English, and there was no evidence that the document was adequately explained to her. Thus, she could not have knowingly waived her rights.

Furthermore, upholding such a waiver would be offensive to public policy. The Court emphasized the doctrine in Gatchalian v. Delim:

To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. We believe such a purported waiver is offensive to public policy.

Given that common carriers must exercise extraordinary diligence to ensure passenger safety, any waiver that weakens this standard is against public policy. The Court thus concluded that the waiver was invalid and could not release Sanico from liability.

Finally, the Court addressed the amount of compensatory damages awarded. While the CA correctly applied the formula for computing loss of earning capacity, it erred in using Colipano’s age at the time of testimony rather than at the time of the injury. Recalculating based on her age at the time of the incident, the Court set the net earning capacity at P212,000.00.

The Court also clarified that interest on damages may be awarded for breach of contract. Citing Eastern Shipping Lines, Inc. v. Court of Appeals and Nacar v. Gallery Frames, the Court imposed an interest rate of 6% per annum from the date of the RTC decision until finality, and 6% per annum thereafter until full payment.

FAQs

What was the key issue in this case?	The key issue was determining the liability of a jeepney owner and driver for injuries sustained by a passenger, as well as the validity of a waiver signed by the injured passenger.
Who is directly liable in a contract of carriage?	In a contract of carriage, the owner/operator of the vehicle is directly liable to the passenger, as the driver is typically an employee and not a party to the contract.
What standard of care is expected of common carriers?	Common carriers must observe extraordinary diligence in ensuring the safety of their passengers, according to Article 1733 of the Civil Code.
Under what conditions is a waiver valid?	A waiver must be clear, unequivocal, made with full understanding of its implications, and not contrary to law, public policy, or morals.
What makes a waiver contrary to public policy in this context?	A waiver that dilutes the standard of extraordinary diligence required of common carriers is considered offensive to public policy.
How is loss of earning capacity calculated?	Loss of earning capacity is calculated using the formula: Net Earning Capacity = Life Expectancy x [Gross Annual Income – Living Expenses (50% of gross annual income)].
What interest rates apply to damages awarded?	An interest rate of 6% per annum applies from the date of the RTC decision until finality, and 6% per annum thereafter until full payment.
Can testimonial evidence be used to prove loss of earning capacity?	Yes, testimonial evidence can be used if the person is self-employed earning less than the minimum wage or is employed as a daily wage worker earning less than the minimum wage.

This case serves as a crucial reminder of the responsibilities of common carriers to ensure passenger safety and the protections afforded to passengers under the law. The ruling reinforces that vehicle owners cannot evade liability through waivers obtained without the passenger’s full understanding and emphasizes the high standard of care expected in public transportation.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Jose Sanico and Vicente Castro, vs. Werherlina P. Colipano, G.R. No. 209969, September 27, 2017