GR 159636; (November, 2004) (Digest)
G.R. No. 159636 ; November 25, 2004
VICTORY LINER, INC., petitioner, vs. ROSALITO GAMMAD, APRIL ROSSAN P. GAMMAD, ROI ROZANO P. GAMMAD and DIANA FRANCES P. GAMMAD, respondents.
FACTS
On March 14, 1996, Marie Grace Pagulayan-Gammad was a passenger on a Victory Liner bus bound for Tuguegarao. The bus, running at high speed, fell into a ravine in Nueva Vizcaya, resulting in her death. Her heirs filed a complaint for damages based on breach of contract of carriage. During trial, petitioner’s counsel, Atty. Antonio Paguirigan, failed to appear at several scheduled hearings. Consequently, the trial court deemed petitioner to have waived its right to cross-examine the respondents’ witness and to present its evidence, and subsequently rendered a judgment by default against petitioner.
The trial court awarded substantial damages to the respondents. On appeal, the Court of Appeals affirmed the trial court’s finding of liability but modified the amounts awarded. Petitioner, now represented by new counsel, filed a motion for reconsideration, arguing that the gross negligence of its former counsel deprived it of due process and a fair opportunity to present its defense. The Court of Appeals denied the motion.
ISSUE
The primary issue is whether the gross negligence of petitioner’s former counsel constitutes a valid ground to set aside the proceedings and remand the case for a new trial.
RULING
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The general rule is that the negligence of counsel binds the client. While exceptions exist—such as when gross negligence deprives the client of due process—the Court found no such exception here. The record showed that Atty. Paguirigan actively participated in the case by filing an Answer, attending pre-trial, and proposing a settlement. Although he failed to appear at certain hearings and to file motions for reconsideration of adverse orders, he timely filed an appeal to the Court of Appeals. This demonstrated that petitioner was not entirely deprived of its day in court. The negligence was not so gross or palpable as to sever the attorney-client relationship and justify nullifying the proceedings.
On the substantive issue of liability, the Court upheld the finding of breach of contract of carriage. A common carrier is bound to observe extraordinary diligence for the safety of its passengers. The fact of the accident, which caused the death of a passenger, gave rise to a presumption of negligence on the part of the carrier. Petitioner failed to rebut this presumption due to its waiver of the right to present evidence. The awards for actual damages, loss of earning capacity, moral and exemplary damages, and attorney’s fees, as modified by the Court of Appeals, were sustained as being in accordance with law and evidence.