GR 161909; (April, 2012) (Digest)
G.R. No. 161909 ; April 25, 2012
PHILTRANCO SERVICE ENTERPRISES, INC., Petitioner, vs. FELIX PARAS AND INLAND TRAILWAYS, INC., AND HON. COURT OF APPEALS, Respondents.
FACTS
Respondent Felix Paras, a passenger on a bus owned by respondent Inland Trailways, Inc., was severely injured in a vehicular accident on February 9, 1987. The Inland bus was violently bumped from behind by a bus owned and operated by petitioner Philtranco Service Enterprises, Inc., causing it to smash into a parked cargo truck. Paras filed a complaint for damages based on breach of contract of carriage against Inland. In its defense, Inland filed a third-party complaint against Philtranco, alleging that the negligence of the Philtranco driver was the direct and proximate cause of the accident and Paras’s injuries.
The Regional Trial Court found Philtranco solely liable and ordered it to pay Paras actual, moral, and temperate damages, plus attorney’s fees. All parties appealed. The Court of Appeals affirmed the RTC’s finding of Philtranco’s negligence but modified the awards, holding Inland solidarily liable with Philtranco for damages to Paras. The CA also awarded temperate damages to Inland for the damage to its bus. Philtranco elevated the case to the Supreme Court.
ISSUE
The core issue is whether a common carrier (Inland), sued by its passenger for breach of contract, can validly implead a third-party (Philtranco) whose alleged negligence caused the breach, and whether the liability of such third-party defendant is independent of the carrier’s contractual liability.
RULING
The Supreme Court granted the petition in part. It clarified the nature of third-party liability in such actions. The Court held that while a common carrier is liable to its passenger for breach of contract of carriage, it may file a third-party complaint against a person whose negligence caused the breach, based on a quasi-delict. The liability of this third-party defendant is separate and independent from the carrier’s contractual liability.
Applying this, the Court found Philtranco negligent per the police report and witness testimony, making it liable under quasi-delict for the injuries to Paras and the damage to Inland’s bus. However, the Court corrected the CA by ruling that Inland’s liability to Paras is contractual and remains solidary with Philtranco’s delictual liability, as both obligations arose from the same incident. The awards of damages were modified: actual damages were reduced to the amount adequately proven, moral damages were affirmed due to the physical suffering, and temperate damages were properly awarded to Inland for its bus repair costs. Attorney’s fees were also deemed proper.