FIRST QUEZON CITY INSURANCE COMPANY, INC., PETITIONER, VS. THE HON. COURT OF APPEALS AND DE DIOS MARIKINA TRANSPORTATION CO., RESPONDENTS.

Before the Court is a petition filed by the First Quezon City
Insurance Company, Inc., seeking to limit to P12,000.00, the amount specified
in the insurance contract, its liability to indemnify the respondent, De Dios
Marikina Transportation Company (DMTC, for short), for the damages suffered by
a passenger, Jose V. del Rosario, who accidentally fell off the bus.

The undisputed facts are:

“On June 10, 1984, at about 3:00 p.m., after sending off
certain seamen at the departure area of then known as Manila International
Airport (MIA), Plaintiff Jose V. del Rosario proceeded to the loading and
unloading zone for public utility bus stop, which was located in front of the
MIA, to wait for a passenger bus bound for Quezon City. While at the bus stop, the plaintiff saw a
DMTC bus bearing body No. 236 and plate No. NVU-798 and which, per its
signboard, was plying the Pasay to Quezon City (passing España) route. As it approach the bus stop, the bus slowed
down with all its doors wide open: while moving at a crawling pace, i.e., as slow as an ‘ordinary walk,’ it
was taking several passen­gers, about five or seven of them including the
plaintiff, all of whom managed to board the bus while it was already at the bus
stop; plain­tiff was the last one to board the bus.

“While the plaintiff was still on the bus’ running board with
his hand on the bus door’s handle bar, the slowly moving bus sped forward at a
high speed, as a result of which, the plaintiff lost his bal­ance and fell from
the bus. As plaintiff clung instinctively
to the handle bar, he was dragged by the bus along the asphalted road for about
two (2) seconds. Plaintiff screamed of
pain and anguished even as the other passengers shouted and the bus’ driver,
Gil Agpalo, an employee of defendant and third-party plaintiff DMTC, abruptly
stopped the bus. Then, Gil forth-with
fled from the scene, leaving the bus and the injured plaintiff behind.

“Thereafter, the plaintiff was brought to the Manila
Sanitarium and Hospital where he was given immediate medical treatment at the
emergency ward. The doctors performed a
major surgical operation on plaintiff’s right leg. This leg was extensively lacerated: its skin and tissues were exposed and detached from the
muscles. Treatment was done under
special anesthesia and consisted of debridement or cleaning repair and suturing
of the injured tissue. While at the
hospital, plaintiff was febrile or feverish for about forty (40) days. On July 12, 1984, a second major surgical
operation, i.e., a skin grafting operation, was performed on plaintiff’s right
leg.

“Plaintiff was confined at the hospital for a total period of
forty (40) days, from June 10, 1984 to August 26, 1984. During his stay at the hospital, plaintiff
incurred medical expenses in the total amount of P69,444.41. Plaintiff’s medical expenses were advanced
by his em­ployer Maglines but he was required to reimbursed Maglines on a staggered
basis by way of salary deduc­tions. Plaintiff was released from the hospital on August 29, 1984. After his release, he returned to the
hospital from time to time for further treatment and checkup. The injuries had left plaintiff with a huge,
ugly scar running almost the entire length of his right leg. Also, the plaintiff incurred lost earning by
way of unearned salaries amounting to P7,500.00 due to said physical injuries
and the consequent hospital confinement.

“Plaintiff filed on June 26, 1985 the aforesaid complaint
against DMTC and its driver, Gil Agpalo. Agpalo was later dropped as a party defendant because he could not be
served with summons. Upon filing its
answer on August 20, 1985, defendant DMTC filed a third-party complaint against
First Quezon City Insurance Co. Inc. Sometime on September 17, 1985 this third-party defendant filed its
answer to the third-party complaint.

“After the trial, the court a quo rendered the
appealed decision, the decretal portion of which or­dains:

“‘WHEREFORE, the judgment is hereby rendered dis­missing
defendant De Dios Marikina Transportation Co. Inc.’s counterclaim for lack of
merit and ordering said defendant to pay plaintiff Jose V. del Rosario: (a) the sum of P76,944.91, as the actual and
compensatory damages; (b) the sum of P15,000.00, as moral and exemplenary
damages; and (c) the sum of P33,641.50 as attor­ney’s fees, as well as to pay
the cost of suit; and as regards the third?party complaint herein
ordering third-party defendant First Quezon City Insurance Co., Inc. to
indemnify third-party plaintiff De Dios Marikina Transportation Co., Inc. in
the sum of P12,000.00 with interest thereon at the legal rate from date of
filing of the third-party complaint on August 20, 1985, until full payment
thereof. Further, there being no
satisfacto­ry warrant therefor, the court hereby dismisses the rest of the
claims in the complaint and third-party complaint herein.” (pp. 11-13,
Rollo.)

The bus company appealed to the Court of Appeals on February 11,
1991. The Court of Appeals modified the
dispositive part of the decision of the trial court as follows:

“WHEREFORE, with the following modifications, first in
appellee’s complaint: that the award of
attor­ney’s fees be reduced to P5,000.00 and that the cost of suit be deleted;
and second, as regards the third-party complaint,
that the third-party defendant First Quezon
City Insurance Co. Inc., be ordered to
indemnify third-party plaintiff DMTC, herein
appellant, the sum of P50,000.00 with
legal interest thereon from date of filing
of the third-party complaint on August
20, 1985 until its full payment, the
decision appealed from is AFFIRMED in all other respects. No costs.” (p. 19, Rollo.)

The insurance company (now the petitioner) filed a motion for
reconsideration which was denied in a resolution dated April 22, 1991.

Hence, this petition for review, assailing the appellate courts’
interpretation of the provision of the insurance contract on the limit of the
insurer’s liabil­ity.

We find merit in the petition.

The insurance policy clearly placed the maximum limit of the
petitioner’s liability for damages arising from death or bodily injury at
P12,000.00 per passenger and its maximum liability per accident at
P50,000.00. Since only one passenger
was injured in the accident, the insurer’s liability for the damages suffered
by said passenger is pegged to the amount of P12,000.00 only. What does the limit of P50,000.00 per
accident mean? It means that the
insurer’s maximum liability for any single accident will not exceed P50,000.00
regard­less of the number of passengers killed or injured therein. For example, if ten (10) passengers had been
injured by the operation of the insured bus, the insur­er’s liability for the
accident would not be P120,000.00 (at the rate of P12,000.00 per passenger) but
would be limited to only P50,000.00 for the entire accident, as provided in the
insurance contract.

The bus company may not recover from the insurance company
(herein petitioner) more than P12,000.00 per passenger killed or injured, or
fifty thousand (P50,000.00) pesos per accident even if under the judgment of
the court, the erring bus operator will have to pay more than P12,000.00 to
each injured passenger. The trial
court’s interpretation of the insurance contract was the correct
interpretation.

WHEREFORE, the petition for review is GRANTED. The decision promulgated on February 11,
1991 by the Court of Appeals in CA-G.R. No. 24938, ordering the third-party
defendant, First Quezon City Insurance Co., Inc., to indemnify the private
respondent, De Dios Marikina Transportation Co. Inc. (DMTC), the sum of P50,000.00
for the damages of the passenger, Jose V. Del Rosario, is hereby modified by
reducing the award to P12,000.00 only. Costs against the private respondent, De Dios Marikina Transportation
Co., Inc.

SO ORDERED.

Cruz, (Chairman), Padilla, and
Bellosillo, JJ., concur.