G.R. No. L-10605 and L-10606; June 30, 1958.
PRECILLANO NECESITO, ETC., plaintiff-appellant, vs. NATIVIDAD PARAS, ET AL., defendants-appellees. (G.R. No. L-10605)

GERMAN NECESITO, ET AL., plaintiffs-appellants, vs. NATIVIDAD PARAS, ET AL., defendants-appellees. (G.R. No. L-10606)

FACTS

On January 28, 1954, Severina Garces and her one-year-old son, Precillano Necesito, boarded a bus of the Philippine Rabbit Bus Lines in Agno, Pangasinan. The bus, driven by Francisco Bandonell, proceeded towards Manila. After passing Mangatarem, Pangasinan, the bus entered a wooden bridge. The front wheels swerved to the right, the driver lost control, and the bus wrecked the bridge’s rails and fell into a breast-deep creek. Severina Garces drowned, and Precillano Necesito suffered injuries including a fractured left femur. Their money, wristwatch, and cargo of vegetables were lost. Two actions for damages were filed against the carrier. The carrier defended that the accident was due to “engine or mechanical trouble” beyond its control. The trial court found that the accident was caused by the fracture of the right steering knuckle, which had a defective, “bubbled and cellulous” core that was not discoverable by external inspection during regular 30-day checks. The court held the accident was exclusively due to a fortuitous event and dismissed the actions. Plaintiffs appealed directly to the Supreme Court.

ISSUE

Whether the common carrier is liable for damages resulting from a manufacturing defect in its vehicle’s equipment (the steering knuckle) that was not discoverable by the exercise of due diligence.

RULING

Yes. The Supreme Court reversed the trial court’s decision. A common carrier is bound to observe “utmost diligence” and is responsible for the safety of its passengers. The carrier is not an insurer, but liability is based on negligence. The carrier has the burden to prove it exercised the required diligence. The Court held that the carrier is liable for defects in equipment purchased from a manufacturer if such defects would have been discovered by the exercise of due care in inspection and testing. The manufacturer is considered the agent of the carrier in the work of construction. The carrier’s liability is based on its duty to the public, which it cannot evade by contracting out the manufacture of its equipment. Since the defective steering knuckle caused the accident, and the carrier failed to prove it exercised the “utmost diligence” required (e.g., by not conducting more thorough tests like magnaflux inspection that could reveal hidden flaws), the carrier is liable. The Court awarded compensatory damages, moral damages to the heirs of the deceased passenger, and attorney’s fees. A subsequent motion for reconsideration was denied, affirming that moral damages are recoverable in case of death, distinguishing it from cases where the passenger only suffers injury.