Baliwag Transit vs. CA

BALIWAG TRANSIT, INC.
, petitioner,
vs.
HON. COURT OF APPEALS and SPS. SOTERO CAILIPAN, JR. and ZENAIDA LOPEZ
and GEORGE L. CAILIPAN, respondents.
G.R. No. 80447 January 31, 1989
Facts:
On 10 April 1985 a Complaint for damages arising from breach of contract of

carriage was filed by private respondents, the Spouses Sotero Cailipan, Jr. and
Zenaida Lopez, and their son George, of legal age, against petitioner Baliwag Transit.
The Complaint alleged that George was passenger on a Baliwag bus, suffered
multiple serious physical injuries when he was thrown off said bus driven in a careless
and negligent manner by Leonardo Cruz, the authorized bus driver, along Barangay
Patubig, Marilao, Bulacan. As a result, he was confined in the hospital for treatment,
incurring medical expenses, which were borne by his parents, the respondent
Spouses, in the sum of about P200,000.00 plus other incidental expenses of about
P10,000.00.
An Answer by petitioner: the injuries sustained by George was solely

attributable to his own voluntary act in that, without warning and provocation, he
suddenly stood up from his seat and headed for the door of the bus as if in a daze,
opened it and jumped off while said bus was in motion, in spite of the protestations
by the driver and without the knowledge of the conductor.
Baliwag then filed a Third-Party Complaint against Fortune Insurance & Surety
Company, Inc., on its third-party liability insurance in the amount of P50,000.00.
Fortune Insurance claimed limited liability, the coverage being subject to a Schedule of
Indemnities forming part of the insurance policy.
Fortune Insurance and Baliwag each filed Motions to Dismiss on the ground
that George, in consideration of the sum of P8,020.50 had executed a notarized
"Release of Claims" was denied as they were filed beyond the time for pleading and
after the Answer were already filed so Baliwag amended its answer to include such.
RTC: dismissed the Complaint and Third-party Complaint, ruling that since the contract of
carriage is between Baliwag and George (of legal age) had the exclusive right to
execute the Release of Claims despite the fact that he is still a student and dependent on
his parents for support.
Setting aside the appealed Order and holding that the "Release of Claims" cannot
operate as a valid ground for the dismissal of the case because it does not have the
conformity of all the parties, particularly George's parents, who have a substantial
interest in the case as they stand to be prejudiced by the judgment because they spent a
sizeable amount for the medical bills of their son.
Issue: W/N the contract signed by George during case pendency is valid discharging
Fortune Insurance and Baliwag from any and all liability.
Held: We hold that since the suit is one for breach of contract of carriage, the
Release of Claims executed by him, as the injured party, discharging Fortune
Insurance and Baliwag from any and all liability is valid. He was then of legal age, a
graduating student of Agricultural Engineering, and had the capacity to do acts with
legal effect (Article 37 in relation to Article 402, Civil Code). Thus, he could sue and be
sued even without the assistance of his parents.
Significantly, the contract of carriage was actually between George, as the

paying passenger, and Baliwag, as the common carrier. As such carrier, Baliwag was
bound to carry its passengers safely as far as human care and foresight could provide, and
is liable for injuries to them through the negligence or wilful acts of its employees (Articles
1755 and 1759, Civil Code). Thus, George had the right to be safely brought to his
destination and Baliwag had the correlative obligation to do so. Since a contract may be
violated only by the parties thereto, as against each other, in an action upon that
contract, the real parties in interest, either as plaintiff or as defendant, must be parties
to said contract (MarimperioCompaniaNaviera, S.A. vs. Court of Appeals, No. L-40234,
December 14, 1987, 156 SCRA 368). A real party-in-interest -plaintiff is one who has a
legal right while a real party-in-interest-defendant is one who has a correlative legal
obligation whose act or omission violates the legal right of the former (Lee vs. Romillo, Jr.,
G.R. No. 60973, May 28, 1988). In the absence of any contract of carriage between
Baliwag and George's parents, the latter are not real parties-in-interest in an action
for breach of that contract.

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BALIWAG TRANSIT, INC.

G.R. No. 80447 January 31, 1989

On 10 April 1985 a Complaint for damages arising from breach of contract of

An Answer by petitioner: the injuries sustained by George was solely

Significantly, the contract of carriage was actually between George, as the

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