SPOUSES TEODORO1 and NANETTE PERENA, Petitioners,

vs.
SPOUSES TERESITA NICOLAS and L. ZARATE, PHILIPPINE NATIONAL
RAILWAYS, and the COURT OF APPEALS
G.R. No. 157917

August 29, 2012

FACTS:
In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette
Perea to transport their (Zarates) son, Aaron Zarate, to and from school.
The Pereas were owners of a van being used for private school transport.
At about 6:45am of August 22, 1996, the driver of the said private van,
Clemente Alfaro, while the children were on board including Aaron, decided
to take a short cut in order to avoid traffic. The usual short cut was a
railroad crossing of the Philippine National Railway (PNR).
Alfaro saw that the barandilla (the pole used to block vehicles crossing the
railway) was up which means it was okay to cross. He then tried to
overtake a bus. However, there was in fact an oncoming train but Alfaro no
longer saw the train as his view was already blocked by the bus he was
trying to overtake. The bus was able to cross unscathed but the vans rear
end was hit. During the collision, Aaron, was thrown off the van. His body
hit the railroad tracks and his head was severed. He was only 15 years old.
It turns out that Alfaro was not able to hear the train honking from 50
meters away before the collision because the vans stereo was playing
loudly.
The Zarates sued PNR and the Pereas (Alfaro became at-large). Their
cause of action against PNR was based on quasi-delict. Their cause of
action against the Pereas was based on breach of contract of common
carriage.
In their defense, the Pereas invoked that as private carriers they were not
negligent in selecting Alfaro as their driver as they made sure that he had
a drivers license and that he was not involved in any accident prior to his
being hired. In short, they observed the diligence of a good father in
selecting their employee.

For its part, PNR tended to show that the proximate cause of the collision
had been the reckless crossing of the van whose driver had not first
stopped, looked and listened; and that the narrow path traversed by the
van had not been intended to be a railroad crossing for motorists.
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the
RTC. In the decision of the RTC and the CA, they awarded damages in favor
of the Zarates for the loss of earning capacity of their dead son.
The Pereas appealed. They argued that the award was improper as Aaron
was merely a high school student, hence, the award of such damages was
merely speculative. They cited the case of People vs Teehankee where the
Supreme Court did not award damages for the loss of earning capacity
despite the fact that the victim there was enrolled in a pilot school.
ISSUES: Whether or not the defense of due diligence of a good father by
the Pereas is untenable.
HELD: YES
Defense of Due Diligence of a Good Father
This defense is not tenable in this case. The Pereas are common carriers.
They are not merely private carriers. (Prior to this case, the status of
private transport for school services or school buses is not well settled as
to whether or not they are private or common carriers but they were
generally regarded as private carriers).
A private carrier is one who, without making the activity a vocation, or
without holding himself or itself out to the public as ready to act for all who
may desire his or its services, undertakes, by special agreement in a
particular instance only, to transport goods or persons from one place to
another either gratuitously or for hire. The provisions on ordinary contracts
of the Civil Code govern the contract of private carriage.The diligence
required of a private carrier is only ordinary, that is, the diligence of a good
father of the family. In contrast, a common carrier is a person, corporation,
firm or association engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation,
offering such services to the public. Contracts of common carriage are
governed by the provisions on common carriers of the Civil Code, the
Public Service Act, and other special laws relating to transportation. A
common carrier is required to observe extraordinary diligence, and is

presumed to be at fault or to have acted negligently in case of the loss of

the effects of passengers, or the death or injuries to passengers.
The true test for a common carrier is not the quantity or extent of the
business actually transacted, or the number and character of the
conveyances used in the activity, but whether the undertaking is a part of
the activity engaged in by the carrier that he has held out to the general
public as his business or occupation. If the undertaking is a single
transaction, not a part of the general business or occupation engaged in,
as advertised and held out to the general public, the individual or the
entity rendering such service is a private, not a common, carrier. The
question must be determined by the character of the business actually
carried on by the carrier, not by any secret intention or mental reservation
it may entertain or assert when charged with the duties and obligations
that the law imposes.

Private transport for schools are common carriers. The Pereas, as the
operators of a school bus service were: (a) engaged in transporting
passengers generally as a business, not just as a casual occupation; (b)
undertaking to carry passengers over established roads by the method by
which the business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientle, the Pereas operated as a common
carrier because they held themselves out as a ready transportation
indiscriminately to the students of a particular school living within or near
where they operated the service and for a fee.
Being a common carrier, what is required of the Pereas is not mere
diligence of a good father. What is specifically required from them by law is
extraordinary diligence a fact which they failed to prove in court. Verily,
their obligation as common carriers did not cease upon their exercise of
diligently choosing Alfaro as their employee.