JUANA SOBERANO AND JOSE B. SOBERANO, PLAINTIFFS-APPELLANTS, VS. THE MANILA RAILROAD COMPANY, THROUGH THE ACTING GENERAL MANAGER, COL. SALVADOR T. VILLA; THE BENGUET AUTO LINE, T…

In the morning of March 8, 1955 in Cabugao, Ilocos Sur, Juana Soberano boarded bus no. 155, with plate no, TPU-5994, of
the Benguet Auto Line (BAL), a subsidiary of the
Manila Railroad Co. (MRR),_[1] driven by Santiago Caccam, bound for Baguio City. In
that trip, Juana brought with her 3,024 chicken eggs to be sold in Baguio City, and some personal belongings which she needed
in that trip. About three kilometers away from Baguio
City, along the Naguilian road, the bus hit a stone
embankment, causing it to fall into a 65-foot deep precipice, resulting in death
to two of its passengers and serious physical injuries to Juana and loss and
destruction of all her belongings.

From the scene of the accident, Juana was brought to the Baguio General Hospital. Radiologist Dr. Hector Lopez, after
examining her injuries, certified that she sustained comminuted fracture in the
left mandible near the articulation, cracked fracture in the right temporal
bone, crushed fractures, both scapular, and fracture in the 2nd, 3rd and 4th
ribs. She was confined in that hospital until April 14, 1955, when she was
transferred to the National Orthopedic Hospital, whereat she stayed until June
6, 1955 when she was discharged. She was also treated by Dr. Luis Martinez of
the V. Luna Hospital, and Dr. J.V.de los Santos, both orthopedists, and later by Dr. J.O. Floirendo, an EENT specialist, for “visual and other
defects.”

Santiago Caccam was thereafter charged in the Court
of First Instance of Baguio City with the crime of
double homicide and serious physical injuries thru reckless imprudence. He pleaded guilty to the crime of double homicide
and serious physical injuries thru simple imprudence and was sentenced
accordingly. Juana Soberano did not intervene in the
criminal case because she filed a formal reservation to institute a separate
civil action for damages and indemnity against the MRR and the BAL.

Because of the loss of the eggs and the destruction of the personal effects
that Juana brought with her in that trip, Jose Soberano, her husband, demanded from the defendant companies
the value thereof amounting to P370.66 (exh. C-3), of
which sum the MRR paid P300 (exh. 2). The MRR also
paid the daily expenses, allowances, subsistence, hospitalization, medical fees
and medicines of Juana Soberano, as well as the
service fees of her caretaker. The MRR has paid a total sum of P4,219 (exhs.3
& 4). Later the MRR offered to settle the case extra-judicially, tendering
to the Soberanos the additional sum of P5,000. The
offer was rejected, and the Soberanos filed the
present action against the defendant companies and Caccam, to recover from them damages in the total sum of
P76,757.76.^[2] The defendant companies in due time filed their answer to the
complaint with counterclaim for damages by way of attorney’s fees, and praying
that the complaint against them be dismissed, or, in the alternative, that the
court approve their offer of settlement. The Soberanos
filed a reply to the counterclaim and prayed for its dismissal.

After due trial, the lower court rendered the decision appealed from,
dismissing at the same time the complaint against Caccam. The Soberanos moved to
have the decision reconsidered. The motion for reconsideration was denied; hence
the present recourse.

The nine errors imputed by the Soberanos to the
lower court actually pose only two basic issues, namely, whether the dismissal
of the complaint against Caccam is proper, and whether
the amount of damages awarded is adequate.

Upon the first issue it is the contention of the Soberanos that the lower court, instead of dismissing their
complaint against Caccam, should have prlorly declared him in default for failure to file an
answer to the complaint. It is true that Caccam did
not file any answer to the complaint; but it is also true that the plaintiffs
did not move to declare him in default. And no default order may be issued
against a defendant who fails to file a timely answer to a complaint except
“upon motion of the plaintiff” (sec. 6, Rule 35, old Rules of Court, now sec. 1,
Rule 18, Revised Rules of Court), and a court cannot issue a default order motu proprio (Viacrucis, et al. vs. Estenzo,
etc., et al., L-18457, June 30, 1962). In spite of the lack of a formal motion
to secure a default order against Caccam, however, the
Soberanos contend that at the hearing held on July 11,
1959, their counsel, Atty. Marcos Vega, before closing his evidence, manifested
to the lower court that because Caccam failed to file
an answer to the complaint, he should “be declared in default and that we be
allowed to present evidence against him in accordance with our complaint.” This
manifestation would nevertheless not have precluded the dismissal of the
complaint against Caccam. In resolving this
manifestation, the lower court asked Vega upon what basis the complaint is
predicated, whether on culpa contractual or culpa aquiliana. Vega at first said, “It can be taken as both.”
But when the lower court pointedly declared that it “cannot allow you or give
you both remedies,” said counsel then replied that the complaint is predicated
upon culpa contractual. Because of this reply, the lower court ruled that the
Soberanos cannot go against Caccam, because he cannot be held liable on culpa
contractual. Vega was given another chance to make a choice, but he finally
decided to proceed on the basis of “culpa contractual because we cannot get
anything from Caccam“, adding that “although we are
ready to present evidence to sustain our allegations against Santiago Caccam, we will close because moral damages against him
cannot be recovered just the same.”

That the complaint is in fact predicated on culpa contractual can be seen
from a perusal thereof. While it names three defendants, the MRR, the BAL, and
Santiago Caccam, the prayer thereof shows that the
action is directed against the first two only, “to declare the defendant
companies Manila Railroad Company and Benguet Auto
Line solidarity liable.” And although paragraph 11 of the complaint recites that
the incident was “due to the negligence and reckless imprudence of the defendant
driver Santiago Caccam,” it is significant that there
is no prayer for declaration of liability against Caccam.

The complaint against Caccam was therefore properly
dismissed. He was not a party to the contract; he was a mere employee of the
BAL. The parties to that contract are Juana Soberano,
the passenger, and the MRR and its subsidiary, the BAL, the bus owner and
operator, respectively; and consequent to the inability of the defendant
companies to carry Juana Soberano and her baggage and
personal effects securely and safely to her destination as imposed by law (art.
1733, in relation to arts. 1736 and 1755, N.C.C.), their liability to her
becomes direct and immediate.

We now come to the question of damages.

The Soberanos initially contend that the lower
court erred in disallowing their claim of P200, representing the expenses of
Juana Soberano in attending as a witness in the
criminal case and attorney’s fees incurred in connection therewith. This claim
was correctly denied by the lower court, because these expenses were properly
taxable in the criminal case. It may be argued that the Soberanos could not have recovered this sum in the criminal
case because Juana Soberano expressly filed a formal
reservation to institute a separate civil action for damages, but such
reservation did not preserve whatever rights they had against Caccam on the basis of the latter’s imprudence. The
reservation is ineffective as to Caccam as it did not
include him among those against whom their rights had been reserved. And the
Soberanos not having intervened in the criminal case,
this claim must be considered as having been impliedly adjudicated in the
criminal case, and cannot therefore be ventilated in the present action.

The Soberanos next contend that the lower court
erred in denying their claim for moral damages in the sum of P15,000, for the
physical suffering, mental anguish, serious anxiety and fright they suffered as
a consequence of the mishap. The lower court denied this claim on the strength
of the oft-reiterated ruling of this Court that moral damages cannot be
recovered against an employer in actions based on a breach of contract of
carriage in the absence of malice, fraud, or bad faith.

The lower court rightly denied the claim for moral damages as far as Jose
Soberano is concerned. In case of physical injuries,
moral damages are recoverable only by the party injured and not by his next of
kin, unless there is express statutory provision to the contrary (Strebel v. Figueras, L-4722, Dec.
29, 1954; Araneta et al. vs. Arreglado et al., L-11394, Sept. 9, 1958) In this case it
was Juana Soberano, not her husband Jose, who
sustained the bodily injuries.

With respect to the claim of Juana Soberano for
moral damages, the rule is well-settled in this jurisdiction that in cases of
breach of contract of carriage, moral damages are recoverable only “where the
defendant has acted fraudulently or in bad faith” (art. 2220, N.C.C.), and the
terms fraud and bad faith have reference to “wanton, reckless, oppressive,
malevolent conduct”, or, in the very least, to “negligence so gross as to amount
to malice.” (Fores v. Miranda, L-12163, March 4, 1959;
Necesito, etc. vs. Paras et
al., L-10605-10606, June 30, 1958.)

To prove malice and bad faith on the part of the defendant companies, the
Soberanos aver that the said defendants intentionally
omitted the name of Juana as one of the offended parties in the information in
criminal case 1086, and that her name was included therein only upon the
intervention of the Soberanos themselves; that the
defendant companies prevailed upon Caccam to plead
guilty to the lesser crime of double homicide and serious physical injuries thru
simple imprudence, purposely to prevent the introduction of evidence of gross
negligence amounting to malice against the said companies; that the BAL
physician, Dr. Nievera, disowned having been an
attending physician of Juana Soberano, and, together
with the MRR physician Dr. Salvador, suppressed the introduction of the X-ray
plates taken of Juana as evidence to prove the extent of the injuries suffered
by the latter; and that the defendant companies exerted undue influence upon Dr.
Fernandez, who treated Juana’s dental injuries, not to testify to such matters
or identify a medical certificate issued by him describing the dental injuries
suffered by Juana. These incidents, even if true, cannot be considered as acts
committed fraudulently or in bad faith by the defendant companies in the
operation of their transportation business which directly resulted in the mishap
that caused the injuries to Juana. Moreover, the allegation in paragraph 11 of
the complaint that the incident was “due to the negligence and reckless
imprudence of the defendant driver Santiago Caccam“,
does not per se justify an inference of malice or bad faith on the part of the
defendant companies (Rex Taxicab Co. v. Bautista, et al., L-15392, Sept. 30,
1960; Cachero v. Manila Yellow Taxicab Co., Inc.,
L-S721, May 23,1957), for fraud, malice, or bad faith must be proved to support
a claim for moral damages if only physical injuries are sustained (Lira vs.
Mercado, L-13358, Sept. 29, 1961).

The absence of fraud, malice, or bad faith on the part of the defendant
companies justifies the denial of Juana Soberano’s
claim for moral damages as well as the denial of the claim for exemplary damages
(art. 2232, N.C.C.).

The third claim – for attorney’s fees – was also properly denied by the lower
court. The Soberanos aver that they were obliged to
file a separate civil action for damages against the defendant companies. This
claim is predicated upon paragraphs (2) and (5) of article 2208 of the New Civil
Code, which provide that attorney’s fees and expenses of litigation may be
recovered when the defendant’s act or omission has compelled the plaintiff to
litigate with third persons or incur expenses to protect his interest, or when
the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiff’s plainly valid, just and demandable claim. It will be observed that
the defendant companies offered to settle the case by offering to the Soberanos the additional sum of P5,000. The Soberanos, however, rejected the offer and proceeded to
court to recover damages in the total sum of P76,757.76. It was not, therefore,
the defendant companies that compelled the Soberanos
to litigate, or to incur expenses in connection with the litigation instituted
by them. The Soberanos went to court after rejecting
the defendant companies’ offer of settlement. The latter can not likewise be
considered to have acted in gross and evident bad faith in not satisfying the
claim of the Soberanos, because, as the lower court
puts it, the Soberanos “have asked for too much”, and
the “defendant was justified in resisting this action.” We are not without
precedent on this point. In Globe Assn. vs. Arcache,
L-12378, May 28,1958, this Court observed that the refusal of the defendant
therein to pay the amount claimed was due not to malice but to the fact that the
plaintiff therein demanded more than it should, and consequently ruled that the
defendant had the right to refuse it; and in the Cachero case, supra, this Court held that the plaintiff in
that case cannot recover attorney’s fees, because the litigation was caused not
by the defendant’s failure to pay but by the plaintiff’s “exorbitant
charge.”

We now come to the claim for additional unpaid allowances of Juana Soberano while she was undergoing medical and dental
treatment in Manila and Quezon City, in the total sum
of P600. In our view, this claim has merit. The allowance of ten pesos for each
day of stay in Quezon City of Juana Soberano was recommended for approval by the superintendent
of the BAL, Mr. C. Rivera (exh. C-4) and by the MRR
physician, Dr. Saigado, and appears to have been “OK”
by the MRR administrative officer, Mr. F.C. Unson
(exh. C-5). These exhibits C-4 and C-5 were admitted
in evidence without objection from the Government Corporate Counsel who
represented the defendant companies. The defendant companies have already paid
to Jose Soberano the total sum of P600, covering Juana
Soberano’8 stay for 60 days in a private house, from June 7 to July 5, 1955, and
from July 7 to August 5, 1955 (exhs. 3-1 and 3-J). As
to the balance of P600, it was error for the lower court to include this sum in
the assessment of loss of earning capacity, because this amount represents
expenses for board and lodging, short orders such as milk and fruit, laundry and
transportation of Juana Soberano incurred during her
stay in a private house in Quezon City, after her
discharge from the National Orthopedic Hospital, which continued stay was upon
the advice of her attending physician that she go to that hospital every other
day for physical therapy (exh. C-3). It will be seen
under exhibits C-4 and C-5 that the defendant companies agreed to pay the ‘
Soberanos the sum of P10.00 a day for her said stay
beginning “June 7, 1955 not to exceed 60 days, depending upon the advice of the
attending physician or other bone specialist.” The deposition of, and a medical
certificate issued by, Dr. Juan O. Floirendo, an EENT
specialist who treated Juana Soberano for “visual and
other defects”, show that he treated her for more than sixty days, from
September 10, 1955 to February 2, 1956 (exh. L). The
balance of P600 should, therefore, be paid to Juana Soberano. We come finally to the claim for loss of earning
capacity in the total sum of P50,000, based upon the expectancy that Juana Soberano, who was 37 years old at the time of the accident,
would live for 20 more years and be able to earn an average annual income of
P2,500. On this point, the lower court found that “Juana Soberano suffered greatly and that her injuries left her
permanently disfigured and partially disabled as she walks with a stiff neck and
her arms have partly lost their full freedom.” After finding, however, that she
is not altogether a helpless woman and can still engage in business, the lower
court awarded to her P5,000 to compensate loss of earnings as a result of her
partial disability.

The appellants contend that the award is inadequate. We agree.

This Court, in three cases, allowed in one, and increased in the two others,
the amount of compensatory damages. In Borromeo vs.
Manila Electric Railroad and Light Co., 44 Phil, 165 (1922), this Court awarded
P2,000 in future damages to the plain-tiff therein, after finding that due to
the accident, wherein Borromeo’s left foot was passed
over by the rear wheels of the electric car of the defendant company and had to
be amputated, he had to use an artificial foot in order to be able to walk; that
he could no longer be employed as a marine engineer which he had been for
sixteen years; that at the time of the accident he was a chief engineer with a
monthly salary of P375; and that because he knew of no other profession, his
incapacity had put an end to his activities and had destroyed his principal
source of professional earnings in the future. In Cariaga et al. vs. Laguna Tayabas
Bus Co., et al,, L-11037, Dec. 29, 1960, this Court increased the award of
compensatory damages from P10,490 to P25,000, after finding that Edgardo Cariaga’s right forehead
was fractured, necessitating the removal of practically all of the right frontal
lobe of his brain; that he had become a misfit for any kind of work; that he
could hardly walk around without someone helping him and he had to use a brace
on his left leg and foot; that he was a virtual invalid, physically and
mentally; that at the time of the accident he was already a fourth-year student
in medicine in a reputable university; that his scholastic record is sufficient
to justify the assumption that had he continued his studies, he would have
finished the course and would have passed the board examinations; and that he
could possibly have earned as a medical practitioner the minimum monthly income
of P300. And in Araneta et al. vs. Arreglado et al., L-11394, September 9, 1958, this Court
increased the award of compensatory damages from P1,000 to P18,000, after
finding that Benjamin Araneta sustained “permanent
deformity and — something like an inferiority complex” as well as a
“pathological condition on the left side of the jaw” caused by the defendant
Dario Arreglado who inflicted the injury upon him
voluntarily; that to arrest the degenerative process taking place in the
mandible and to restore the injured boy to a nearly normal condition, surgical
intervention was needed; that a repair, however skillfully conducted, is never
equivalent to the original state; and that because of the injury, the boy had
suffered greatly.

In the case at bar, the nature and extent of the physical injuries suffered
by Juana Soberano and their after-effects upon her
life and activities, are attested by three reputable physicians: Dr. Hector
Lopez, a radiologist of the Baguio General Hospital;
Dr. Angel Poblete, an orthopedist of the National
Orthopedic Hospital; and Dr. Juan O. Floirendo, an
EENT specialist. Dr. Lopez declared that

Juana Soberano suffered comminuted fracture in the
left mandible near the articulation, cracked fracture in the right temporal
bone, crushed fractures both scapular, and fracture in the 2nd, 3rd and 4th
ribs. As a result of these injuries, Dr. Poblete said
that she suffered and would continue to suffer limitation of mouth opening, bad
approximation of the jaw alignment which is drawn inside, limitation of neck and
shoulder movements with numbness on the right side of the face and right and
left side of the body, disturbance in vision, and poor mastication resulting in
indigestion. Dr. Poblete further testified that she
will be “abnormal and naturally she could not be expected to live a normal
life.” Dr. Floirendo declared that she suffers from
pain along the cheeks on both sides of her face, double vision, and paralysis of
the ocular muscles due to partial disequilibrium of the eye muscles. Juana Soberano herself categorically declared, and this was not
contradicted, that prior to the accident, she had a complete and healthy set of
teeth; that as a result of the accident she lost three of her teeth, and the
remaining ones in the upper jaw had to be extracted because they were already
loose and a denture had perforce to be made for her; and that her face is
permanently disfigured (exhs. K & K-1.).

There is absolutely no doubt that the resultant physical handicaps would
entail for Juana Soberano a loss of positive economic
values. In fact, they will greatly adversely affect her occupation as a peddling
merchant which she has been since 1950 (exh. A),
earning from 1950 to March 8, 1955, when the accident happened, an average
annual net income of about P1,500 (exhs. B, B-1 to
B-5, inclusive). It is to be assumed that had the interruption to her occupation
through defendants’ wrongful act not occurred, she would continue earning this
average income.

Considering all the facts detailed above, this Court is of the opinion that
the sum of P5,000 in compensatory damages awarded to her for loss of earning
capacity is inadequate; the amount should be increased to P15,000.

She should also be awarded the sum of P45.35, representing unrealized profits
from the 3,024 chicken eggs which she brought with her in the trip and which
were destroyed. She brought those eggs to be sold in Baguio City. She bought them at nine centavos each, was to
sell them in Baguio City to definite customers at an
agreed price of ten and a half centavos each, or with a profit of one and a half
centavos per egg.

Finally, all the awards to Juana Soberano should
earn interest at the legal rate from the date the judgment a quo was rendered,
on November 25, 1960, and not from the date of the filing of the complaint.

ACCORDINGLY, the judgment appealed from is modified to read as follows:
“Judgment is therefore rendered ordering the Manila Railroad Company to pay to
the plaintiffs (1) P600 representing the balance of the unpaid allowances due to
Juana Soberano in connection with her stay in a
private house in Quezon City during the period of her
medical treatment; (2) P15,000 for loss of earning capacity; and (3) P45.36 for
unrealized profits, all of these sums to earn interest at the legal rate from
November 25, 1960″. Costs against the defendants-appellees.

Concepcion, C.J., Reyes, J. B.,
Barrera, Dizon, Regala,
Makalintal, Bengzon, J. P.,
Zaldivar and Sanchez, JJ.,
concur.

^[1] Now Philippine National
Railways (PNR).

^[2] Itemized in Annex “A” of the
complaint.