Sps Perena vs Sps Nicolas

Sps Perena vs Sps Nicolas
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Facts:
Spouses Perena were engaged in school bus service, transporting students from Paranaque to Don Bosco Technical Institute in Makati. In June 1996, spouses Zarate contracted spouses Perena to transport their son, Aaron Zarate, from their residence in Paranaque to Don Bosco. As on the usual days of school on August 22, 1996, the van picked up Aaron in their house, he then took the left side seat near the rear door of the said vehicle. Considering that the students were due by 7:15am at Don Bosco, and because of heavy traffic at the South Superhighway, the driver, Clemente Alfaro, decided to take the narrow path underneath the Magallanes interchange which then is being used by Makati bound vehicles as short cut. The said narrow path has a railroad crossing, and while traversing the said narrow path, closely tailing a huge passenger bus, the driver of the school service decided to overtake the said bus at about 50 meters away from the railroad crossing. Considering that the stereo is playing loudly and blinded by the bus, he did not hear the blowing of horn of the oncoming train as a warning to the vehicles. The bus successfully crossed the railroad crossing but the van did not. The train hit the rear side of the van and the impact threw 9 of the 12 students including Aaron. His body landed in the path of the train, which dragged him, severed his head, instantaneously killing him. Devastated by the sudden death of their son, spouses Zarate commenced this action for damages.
The Regional Trial Court ruled in favor of the spouses Zarate. On appeal, The Court of Appeals affirmed the decision of the lower court but lowered the moral damages to Php 2,500,000.00.
 
Issue:
Whether or not there is a breach of contract of a common carrier and whether there is negligence.

Held:
The Supreme Court ruled in favor spouses Zarate, affirming the decision of the Court of Appeals. In this case, the Supreme Court, once and for all lay the matter to rest that the school service is a common carrier and not a private carrier, and as such, they are required to observe the extraordinary diligence as provided under Article 1733 of the Civil Code. According to the Supreme Court, the true test for a common carrier is not the quantity or extent of the business 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. Otherwise stated, making the activity, or holding himself or itself out to the public as a ready to act for all who may desire his or its services to transport goods or persons for a fee.

Applying the considerations mentioned above, there is no question that Perenas as the operators of a school service were: 1) engaged in transporting passengers generally as a business not just as a casual occupation; 2) undertaking to carry passengers over established roads; 3) transporting students for a fee. Despite catering limited clientele, the Perenas operated as a common carrier because they hold themselves out as a ready transportation indiscriminately to the students at a particular school living within or near where they operated the service and for a fee.