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1|TRANSPORTATION LAW CASE DIGEST

JAPAN AIRLINES vs. SIMANGAN As a general rule, moral damages are not recoverable in actions for damages
GR No. 170141 April 22, 2008 predicated on a breach of contract for it is not enumerated under Art 2219 NCC. As an
Third Division Reyes exception, such damages are recoverable in:
1. Mishaps resulting to a death of a passenger (Art. 1764 NCC)
FACTS: 2. When carrier is guilty of fraud or bad faith (Art. 2220)
Respondent needed to go to the US to donate his kidney to his ailing cousin. Having JAL breached its contract of carriage with respondent in bad faith, when its crew
obtained an emergency US Visa, respondent purchased a round trip ticket from petitioner ordered respondent to disembark while the latter is already settled in his assigned seat under
JAL. He was scheduled to a flight bound for LA via Japan. On the date of his flight, the guise of verifying the genuineness of his travel documents. Inattention to and lack of care
respondent passed through rigid immigration and security routines before being allowed to for the interest of its passengers who are entitled ot its utmost consideration, particularly as to
board a JAL plane. their convenience, amount to bad faith which entitles the passenger to award of moral
While inside the plane, respondent was asked to show his travel documents. After damages.
which he was ordered by the crew to leave the plane, imputing that respondent is carrying
falsified travel documents. Respondent pleaded but was ignored and under constraint he gets Award of exemplary damages in breach of contract of carriage.
off the plane. The plane took off and respondent was left behind. Exemplary damages maybe recovered in contractual obligations as a way of
Respondent was refunded with the cost of his ticket minus 500 USD, when JAL example or correction for the public good.JAL is liable for exemplary damages as its acts
found out eventually that his travel documents were not falsified and in order. Respondent constitute wanton, oppressive and malevolent acts against respondent. Passengers have the
filed an action for damages against JAL. right to be treated by the carrier’s employees with kindness, respect, courtesy and due
consideration and are entitled to be protected against personal misconduct, injurious
RTC RULING: language, indignities and abuses from such employees.
JAL is liable for beach of contract of carriage, and should pay 1M as MD, 500K as
ED, 250K as AF + cost of suit. JAL appealed contending it is not guilty of breach of contract of
carriage and not liable for damages.

CA RULING:
Affirmed RTC decision with modification as to amount of damages for being
scandalously excessive. 500K MD, 250K ED and NO AT.

ISSUE:
WON JAL is guilty of breach of contract of carriage.
WON Simangan is entitled to moral and exemplary damages.

HELD:
JAL is guilty of breach of contract of carriage and is liable for damages. Petition of
JAL was denied. CA decision was affirmed with modification. 500K ED, 100K ED, 200K AF.

RATIO:
Breach of contract of carriage
In an action for breach of contract of carriage, all that is required of plaintiff is to
prove the existence of such contract and its non-performance by the carrier through the failure
to carry the passenger safely to his destination. Simangan complied with these requisites.
Damage was accrued by JAL when Simangan was bumped off despite his protestations and
valid travel documents and notwithstanding his contract of carriage with JAL.

Award of moral damages in breach of contract of carriage.


2|TRANSPORTATION LAW CASE DIGEST

Trans-Asia Shipping Lines vs. CA (GR 118126, 4 March 1996) the said Code, bound to carry Arroyo safely as far as human care and foresight could provide,
Third Division, Davide Jr. (J): 4 concur using the utmost diligence of very cautious persons, with due regard for all the circumstances.
Herein, Trans-Asia failed to discharge this obligation.
Facts: Atty. Renato Arroyo, a public attorney, bought a ticket Trans-Asia Shipping Lines Inc., a
corporation engaged in inter-island shipping, for the voyage of M/V Asia Thailand vessel to 3.    Vessel was unseaworthy even before voyage began; Unseaworthiness defined, a clear
Cagayan de Oro City from Cebu City on 12 November 1991. At around 5:30p.m of the said breach of duty of carrier
day, Arroyo boarded the M/V Asia Thailand vessel. At that instance, Arroyo noticed that some Before commencing the contracted voyage, Trans-Asia undertook some repairs on the
repair work were being undertaken on the engine of the vessel. The vessel departed at cylinder head of one of the vessel’s engines. But even before it could finish these repairs, it
around 11:00 p.m. with only 1 engine running. After an hour of slow voyage, the vessel allowed the vessel to leave the port of origin on only one functioning engine, instead of two.
stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some Moreover, even the lone functioning engine was not in perfect condition as sometime after it
passengers demanded that they should be allowed to return to Cebu City for they were no had run its course, it conked out. This caused the vessel to stop and remain adrift at sea, thus
longer willing to continue their voyage to Cagayan de Oro City. The captain acceded [sic] to in order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was
their request and thus the vessel headed back to Cebu City. At Cebu City, Arroyo, together unseaworthy even before the voyage began. For a vessel to be seaworthy’, it must be
with the other passengers who requested to be brought back to Cebu City, were allowed to adequately equipped for the voyage and manned with a sufficient number of competent
disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Arroyo, the next day, officers and crew. The failure of a common carrier to maintain in seaworthy condition its
boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of vessel involved in a contract of carriage is a clear breach of is duty prescribed in Article 1755
Trans-Asia. of the Civil Code.
On account of the failure of Trans-Asia to transport him to the place of destination on 12 4.    Article 1764 NCC; Liability for damages
November 1991, Arroyo filed before the trial court a complaint for damages against Trans- As to its liability for damages, Article 1764 of the Civil Code expressly provides that “Damages
Asia. After due trial, the trial court rendered its decision and ruled that the action was only for in cases comprised in this Section shall be awarded in accordance with Title XVIII of this
breach of contract, with Articles 1170, 1172, and 1173 of the Civil Code as applicable law — Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused
not Article 2180 of the same Code. The Court dismissed the complaint as it did not appear by the breach of contract by common carrier. The damages comprised in Title XVIII of the
that Arroyo was left in the Port of Cebu because of the fault, negligence, malice or wanton Civil Code are actual or compensatory, moral, nominal, temperate or moderate, liquidated,
attitude of Trans-Asia’s employees; and likewise dismissed Trans-Asia’s counterclaim is and exemplary.”
likewise dismissed it not appearing also that filing of the case by Arroyo was motivated by 5.    Actual and compensatory damages
malice or bad faith. Actual or compensatory damages represent the adequate compensation for pecuniary loss
Unsatisfied, Arroyo appealed to the Court of Appeals (CA-GR CV 39901). In its decision of 23 suffered and for profits the obligee failed to obtain.
November 1994, the Court of Appeals reversed the trial court’s decision by applying Article
1755 in relation to Articles 2201, 2208, 2217, and 2232 of the Civil Code and, accordingly, 6.    Damages resulting in contracts or quasi-contracts
awarded (1) P20,000.00 as moral damages; (2) P10,000.00 as exemplary damages; (3) In contracts or quasi-contracts, the obligor is liable for all the damages which may be
P5,000.00 as attorney’s fees; and (4) Cost of suit. Trans-Asia instituted the petition for review reasonably attributed to the non- performance of the obligation if he is guilty of fraud, bad
on certiorari. faith, malice, or wanton attitude.
The Supreme Court denied the petition, and affirmed the challenged decision of the Court of 7.    Moral damages
Appeals, subject to the modification as to the award for attorney’s fees which is set aside; with Moral damages include moral suffering, mental anguish, fright, serious anxiety, besmirched
costs against Trans-Asia. reputation, wounded feelings, moral shock, social humiliation, or similar injury. They may be
1.    Laws applicable recovered in the cases enumerated in Article 2219 of the Civil Code, likewise, if they are the
Undoubtedly, there was, between Trans-Asia and Arroyo, a contract of common carriage. The proximate result of, as herein, Trans-Asia’s breach of the contract of carriage. Anent a breach
laws of primary application then are the provisions on common carriers under Section 4, of a contract of common carriage, moral damages may be awarded if the common carrier
Chapter 3, Title VIII, Book IV of the Civil Code, while for all other matters not regulated acted fraudulently or in bad faith.
thereby, the Code of Commerce and special laws. 8.    Exemplary damages; not a matter of right
2.    Article 1733 NCC, Extraordinary diligence; Article 1755, Utmost diligence of very cautious Exemplary damages are imposed by way of example or correction for the public good, in
persons addition to moral, temperate, liquidated or compensatory damages. In contracts and quasi-
Under Article 1733 of the Civil Code, Trans-Asia was bound to observe extraordinary diligence contracts, exemplary damages may be awarded if the defendant acted in a wanton fraudulent,
in ensuring the safety of Arroyo. That meant that Trans-Asia was, pursuant to Article 1755 of reckless, oppressive or malevolent manner. It cannot, however, be considered as a matter of
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right; the court having to decide whether or not they should be adjudicated. Before the court 12.    Trans-Asia is liable for moral and exemplary damages
may consider an award for exemplary damages, the plaintiff must first show that he is entitled Trans-Asia is liable for moral and exemplary damages. In allowing its unseaworthy M/V Asia
to moral, temperate or compensatory damages; but it is not necessary that he prove the Thailand to leave the port of origin and undertake the contracted voyage, with full awareness
monetary value thereof. that it was exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise
9.    Article 1169 not applicable extraordinary diligence and obviously acted with bad faith and in a wanton and reckless
The Court of Appeals did not grant Arroyo actual or compensatory damages, reasoning that manner.
no delay was incurred since there was no demand, as required by Article 1169 of the Civil 13.    Trans-Asia’s assertion shows lack of genuine concern for safety of passengers; Trans-
Code. This article, however, finds no application in the case because, as there was in fact no Asia cannot expect passengers to act in manner it desired
delay in the commencement of the contracted voyage. If any delay was incurred, it was after Trans-Asia’s assertions that the safety of the vessel and passengers was never at stake
the commencement of such voyage, more specifically, when the voyage was subsequently because the sea was “calm” in the vicinity where it stopped as faithfully recorded in the
interrupted when the vessel had to stop near Kawit Island after the only functioning engine vessel’s log book demonstrates beyond cavil Trans-Asia’s lack of genuine concern for the
conked out. safety of its passengers. It was, perhaps, only providential than the sea happened to be calm.
Even so, Trans-Asia should not expect its passengers to act in the manner it desired. The
10.    Article 698 of the Code of Commerce applies suppletorily to Article 1766 NCC; Rights passengers were not stoics; becoming alarmed, anxious, or frightened at the stoppage of a
and duties of parties arising out of delay vessel at sea in an unfamiliar zone a nighttime is not the sole prerogative of the faint-hearted.
As to the rights and duties of the parties strictly arising out of such delay, the Civil Code is More so in the light of the many tragedies at sea resulting in the loss of lives of hopeless
silent. However, as correctly pointed out by the petitioner, Article 698 of the Code of passengers and damage to property simply because common carriers failed in their duty to
Commerce specifically provides for such a situation. It reads “In case a voyage already begun exercise extraordinary diligence in the performance of their obligations.
should be interrupted, the passengers shall be obliged to pay the fare in proportion to the 14.    Article 2208 NCC
distance covered, without right to recover for losses and damages if the interruption is due to Article 2208 of the Civil Code provides that “ In the absence of stipulation, attorney’ s fees and
fortuitous event or force majeure, but with a right to indemnity if the interruption should have expenses of litigation, other than judicial costs cannot be recovered except: (1) When
been caused by the captain exclusively. If the interruption should be caused by the disability exemplary damages are awarded; (2) When the defendant’s act or omission has compelled
of the vessel and a passenger should agree to await the repairs, he may not be required to the plaintiff to litigate with third persons or to incur expenses to protect his interest.”
pay any increased price of passage, but his living expenses during the stay shall be for his 15.    Award of attorney’s fees not justified
own account.” This article applies suppletorily pursuant to Article 1766 of the Civil Code. Under Article 2208 of the Civil Code, Attorney’s fees are recoverable only in the concept of
11.    Article 698 of the Code of Commerce must be read with Articles 2199, 2200, 2201, and actual damages, not as moral damages nor judicial costs. Hence, to merit such an award, it is
2208 in relation to Article 21 NCC; Arroyo not entitled to actual or compensatory damages settled that the amount thereof must be proven. Moreover, such must be specifically prayed
The cause of the delay or interruption was Trans-Asia’s failure to observe extraordinary for and may not be deemed incorporated within a general prayer for “such other relief and
diligence. Article 698 must then be read together with Articles 2199, 2200, 2201, and 2208 in remedy as the court may deem just and equitable. The statement that the “plaintiff was forced
relation to Article 21 of the Civil Code. In so reading, it means that Trans-Asia is liable for any to litigate in order that he can claim moral and exemplary damages for the suffering he
pecuniary loss or loss of profits which Arroyo may have suffered by reason thereof. For incurred” does not  satisfy the benchmark of “factual, legal and equitable justification” needed
Arroyo, such would be the loss of income if unable to report to his office on the day he was as basis for an award of attorney’s fees. In sum, for lack of factual and legal basis, the award
supposed to arrive were it not for the delay. This, however, assumes that he stayed on the of attorney’s fees must be deleted.
vessel and was with it when it thereafter resumed its voyage; but he did not. As he and some
passengers resolved not to complete the voyage, the vessel had to return to its port of origin
and allow them to disembark. Arroyo then took Trans-Asia’s other vessel the following day,
using the ticket he had purchased for the previous day’s voyage. Any further delay then in
Arroyo’s arrival at the port of destination was caused by his decision to disembark. Had he
remained on the first vessel, he would have reached his destination at noon of 13 November
1991, thus been able to report to his office in the afternoon. He, therefore, would have lost
only the salary for half of a day. But actual or compensatory damages must be proved, which
Arroyo failed to do. There is no convincing evidence that he did not receive his salary for 13
November 1991 nor that his absence was not excused.
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Air France v. Carrascoso Lara vs. Valencia (GR L-9907, 30 June 1958)
G.R. No. L-21438, Sept. 28, 1966 En Banc, Bautista Angelo (J): 7 concur

FACTS: Facts: Demetrio Lara went to the lumber concession of Brigido R. Valencia in Parang,
Cotabato upon instructions of his chief in order to classify the logs of defendant which were
Carrascoso, a civil engineer, was a first class passenger of Air France on his way to Rome for then ready to be exported and to be loaded on a ship anchored in the port of Parang. It took
a pilgrimage. From Manila to Bangkok, he traveled in ‘first class,’ but at Bangkok, the Manager Lara 6 days to do his work during which he contracted malaria fever and for that reason he
of Air France forced him to vacate his seat in favor of a ‘white man’ who had a ‘better right to evinced a desire to return immediately to Davao. At that time, there was no available bus that
the seat.’ Carrascoso filed for moral damages, averring in his complaint the contract of could take him back to Davao and so he requested Valencia if he could take him in his own
carriage betweenAir France and himself. Air France claims that to authorize an award for pick-up. Valencia agreed and, together with Lara, other passengers tagged along, most of
moral damages there must be an averment of fraud or bad faith, upon which Carrascoso’s them were employees of the Government. Valencia merely accommodated them and did not
complaint is silent. charge them any fee for the service. It was also their understanding that upon reaching barrio
Samoay, the passengers would alight and transfer to a bus that regularly makes the trip to
ISSUE: Davao but unfortunately there was none available at the time and so the same passengers,
 Whether or not Carrascoso is entitled to an award for moral damages including Lara, again requested Valencia to drive them to Davao. Valencia again
accommodated them and upon reaching Km. 96, Lara accidentally fell suffering fatal injuries.
HELD:
An action for damages was brought by Lourdes J. Lara, et. al. against Valencia in the CFI of
The foregoing substantially aver: First, That there was a contract to furnish plaintiff a first class Davao for the death of one Demetrio Lara, Sr. allegedly caused by the negligent act of
passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was Valencia. Valencia denied the charge of negligence and set up certain affirmative defenses
breached when petitioner failed to furnish first class transportation at Bangkok; and Third, and a counterclaim. The court after hearing rendered judgment ordering Valencia to pay Lara,
That there was bad faith when petitioner’s employee compelled Carrascoso to leave his first et. al. the following amount: (a) P10,000 as moral damages; (b) P3,000 as exemplary
class accommodation berth “after he was already seated” and to take a seat in the tourist damages; and (c) P1,000 as attorney’s fees, in addition to the costs of action. Both parties
class, by reason of which he suffered inconvenience, embarrassment and humiliation, thereby appealed to the Supreme Court because the damages claimed in the complaint exceed the
causing him mental anguish, serious anxiety, wounded feelings and social humiliation, sum of P50,000.
resulting in moral damages. It is true that there is no specific mention of the term bad faith in
the complaint. But, the inference of bad faith is there; it may be drawn from the facts and
circumstances set forth therein. The contract was averred to establish the relation between The Supreme Court reversed the decision appealed from, without pronouncement as to costs.
the parties. But the stress of the action is put on wrongful expulsion.

NOTA BENE: Here there is a contract of carriage between the parties and such contract was
breached by Air France when it wrongfully forced Carrascoso to vacate the first class seat
which he paid for. The wrongful expulsion is independent of the breach since even without the
contract, such wrongful expulsion may still make Air France liable for damages. In other
words, the wrongful expulsion is in itself a tort.
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1.    Lara, et. al. merely accommodation passaengers who paid nothing for service; Degree of (Article 1761, new Civil Code), which means that if the injury to the passenger has been
diligence required of owner of vehicle proximately caused by his own negligence, the carrier cannot be held liable.
The deceased, as well as his companions who rode in the pick-up of Valencia, were merely
accommodation passengers who paid nothing for the service and so they can be considered 5.    Unfortunate happening due to unforeseen accident
as invited guests within the meaning of the law. As accommodation passengers or invited There is every reason to believe that the unfortunate happening was only due to an
guests, Valencia as owner and driver of the pick-up owes to them merely the duty to exercise unforeseen accident caused by the fact at the time the deceased was half asleep and must
reasonable care so that they may be transported safely to their destination. Thus, “The rule is have fallen from the pick-up when it ran into some stones causing it to jerk considering that
established by the weight of authority that the owner or operator of an automobile owes the the road was then bumpy, rough and full of stones. All things considered, the accident
duty to an invited guest to exercise reasonable care in its operation, and not unreasonably to occurred not due to the negligence of Valencia but to circumstances beyond his control and
expose him to danger and injury by increasing the hazard of travel. This rule, as frequently so he should be exempt from liability.
stated by the courts, is that an owner of an automobile owes a guest the duty to exercise
ordinary or reasonable care to avoid injuring him. Since one riding in an automobile is no less
a guest because he asked for the privilege of doing so, the same obligation of care is imposed
upon the driver as in the case of one expressly invited to ride” Valencia, therefore, is only
required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence
as required of a common carrier by Philippine law.

2.    Valencia had done what a reasonable prudent man would have done
Valencia was not in duty bound to take the deceased in his own pick-up to Davao because
from Parang to Cotabato there was a line of transportation that regularly makes trips for the
public, and if Valencia agreed to take the deceased in his own car, it was only to
accommodate him considering his feverish condition and his request that he be so
accommodated. The passengers who rode in the pick-up of Valencia took their respective
seats therein at their own choice and not upon indication of Valencia with the particularity that
Valencia invited the deceased to sit with him in the front seat but which invitation the
deceased declined. The reason for this can only be attributed to his desire to be at the back
so that he could sit on a bag and travel in a reclining position because such was more
convenient for him due to his feverish condition. All the circumstances thereof clearly indicate
that Valencia had done what a reasonable prudent man would have done under the
circumstances.

3.    Finding as to speed not supported by evidence; else, speed not unreasonable
The finding of the trial court that the pick-up was running at more than 40 kilometers per hour
is not supported by evidence. This is a mere surmise made by the trial court considering the
time the pick- up left barrio Samoay and the time the accident occurred in relation to the
distance covered by the pick-up. And even if this is correct, still we say that such speed is not
unreasonable considering that they were travelling on a national road and the traffic then was
not heavy.

4.    Injury to passenger has been proximately caused by own negligence


The incident may be attributed to lack of care on the part of the deceased considering that the
pick-up was open and he was then in crouching position. Indeed the law provides that “A
passenger must observe the diligence of a good father of a family to avoid injury to himself”

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