G.R. No. L-12163; March 4, 1959
PAZ FORES, petitioner, vs. IRENEO MIRANDA, respondent.

FACTS

Respondent Ireneo Miranda was a passenger in a jeepney driven by Eugenio Luga. On March 22, 1953, while descending the Sta. Mesa bridge at an excessive speed, the driver lost control, causing the vehicle to swerve and hit the bridge wall. Miranda suffered a fracture of the upper right humerus, requiring multiple surgeries and resulting in the loss of use of his right arm. The driver pleaded guilty to charges of serious physical injuries through reckless imprudence. The jeepney carried plate No. TPU-1163, Series of 1952, Quezon City, registered in the name of petitioner Paz Fores, and had the name “Doña Paz” painted on it. Petitioner claimed she had sold the jeepney to Carmen Sackerman on March 21, 1953, one day before the accident, but presented no evidence to counter the vehicle’s registration details.

ISSUE

1. Whether the sale of a public service vehicle without the approval of the Public Service Commission is valid and binding as to the seller’s liability to the public.
2. Whether the awards for actual damages, attorney’s fees, and moral damages were proper.

RULING

1. On the Sale Without PSC Approval: The sale of the jeepney without the prior approval of the Public Service Commission, as required under Section 20(g) of the Public Service Act ( Commonwealth Act No. 146 ), is not effective in relieving the registered owner (petitioner) of responsibility to the public. The law protects public interest by ensuring that the vehicle remains under the service of the owner of record until Commission approval is obtained. While such a sale may be valid between the parties, it does not affect liability to third parties like injured passengers. The proviso allowing transactions to be “negotiated or completed before its approval” applies only to the parties involved, not to the public. No retroactive (nunc pro tunc) approval from the Commission was shown before the accident.
2. On the Awards of Damages:
– Actual Damages: The Court of Appeals reduced the trial court’s award from P10,000 to P2,000, finding sufficient basis for expenses and loss of income given Miranda’s profession as a painter and professor of Fine Arts. This award is not excessive under Articles 2224 and 2225 of the Civil Code.
– Attorney’s Fees: The award of P3,000 as attorney’s fees is upheld as part of actual damages under Article 2208 of the Civil Code, which allows such awards when just and equitable.
– Moral Damages: The award of P5,000 as moral damages is eliminated. Under Articles 2219 and 2220 of the Civil Code, moral damages are not recoverable for breach of contract of transportation based on mere negligence, absent proof of fraud, bad faith, or willful misconduct. Gross negligence amounting to malice must be proven, which was not established here.
DISPOSITIVE PORTION:
The decision of the Court of Appeals is modified by eliminating the award of moral damages. In all other respects, the judgment is affirmed. No costs.