G.R. No. 206468 , August 2, 2017
Judith D. Darines and Joyce D. Darines, Petitioners, vs. Eduardo Quiñones and Rolando Quitan, Respondents.

FACTS

Petitioners Judith and Joyce Darines were injured when the bus they were riding, owned by respondent Quiñones and driven by respondent Quitan, collided with a parked truck on Kennon Road. They filed a complaint for breach of contract of carriage and damages, alleging the driver’s negligence. Respondents admitted liability for the breach but argued the proximate cause was the negligence of the truck driver. They also asserted they had exercised due diligence in selecting and supervising the driver and had paid for petitioners’ medical and hospitalization expenses.
The Regional Trial Court (RTC) awarded moral and exemplary damages and attorney’s fees to petitioners. It found the award of actual damages for medical expenses moot due to respondents’ payment, but denied other claims for actual damages (like lost income and ritual expenses) for lack of proof. The Court of Appeals (CA) reversed, deleting all awards. It held that moral damages were not warranted absent proof of fraudulent or bad faith conduct by respondents, especially since they had paid the medical bills. Consequently, it also deleted the exemplary damages and attorney’s fees for lack of basis.

ISSUE

Whether petitioners are entitled to moral and exemplary damages and attorney’s fees despite respondents’ admission of liability for breach of contract of carriage and payment of medical expenses.

RULING

Yes, the Supreme Court reinstated the RTC’s award of moral and exemplary damages and attorney’s fees. The legal logic is anchored on the nature of a common carrier’s liability. In a contract of carriage, a common carrier is bound to observe extraordinary diligence. A breach resulting in death or injury gives rise to a presumption of negligence, making the carrier liable for damages. This liability is contractual and quasi-delictual in nature.
The Court clarified that in cases of breach of contract, moral damages are recoverable under Article 1764 in relation to Article 2220 of the Civil Code when the breach is attended by bad faith or results in physical injuries. Here, the breach directly caused physical injuries to the petitioners. The driver’s failure to avoid a stationary object on the road constituted negligence, and the carrier’s liability is immediate. The payment of medical bills is an acknowledgment of liability, not a waiver of other damages. The physical injuries and resultant pain, suffering, and anxiety experienced by petitioners legally entitle them to moral damages.
Since moral damages are properly awarded, exemplary damages are also justified under Article 2231 of the Civil Code, as the carrier’s negligence was gross. Exemplary damages serve as a public example to enforce the high standard of care required of common carriers. Attorney’s fees are likewise recoverable under Article 2208(2) of the Civil Code, as petitioners were compelled to litigate to protect their interests. The CA erred in requiring proof of fraudulent intent separate from the breach that caused physical injuries. The awards are affirmed as reasonable and in line with jurisprudence.