Professional Documents
Culture Documents
I. GENERAL CONCEPTS
a. Contract of Transportation in general
b. Perfection
c. Common Carriers
1. Statutory Definition (Art. 1732, Rep. Act 386)
2. Distinction from Private Carriers
3. Distinction from towage, arrastre and stevedoring services
4. Tests in determining whether one is a common carrier
5. Parties to a Contract of Carriaged. Registered Owner Rule and the Kabit System
Assigned Cases:
a. Baliwag Transit Corporation v. Court of Appeals 169 SCRA 849
b. British Airways Inc. v. Court of Appeals 218 SCRA 699
c. Dangwa Transportation Co., Inc. v. Court of Appeals 202 SCRA 574
d. Light Rail Transit Authority v. Navidad 397 SCRA 75
e. De Guzman v. Court of Appeals 168 SCRA 612
f. Spouses Cruz v. Sun Holidays Inc. G.R. No. 186312
g. Asia Lighterage and Shipping Inc. v. Court of Appeals 409 SCRA 340
h. First Philippine Industrial Corp. v. Court of Appeals 300 SCRA 661
i. Planters Products Inc. v. Court of Appeals 226 SCRA 476
j. Fabre. v. Court of Appeals 259 SCRA 426
k. Bascos v. Court of Appeals 221 SCRA 318
l. FGU Insurance Corp. v. Sarmiento Trucking Corp. 386 SCRA 312
m. Crisostomo v. Court of Appeals G.R. No. 138334
n. Cargolift Shipping, Inc. v. L. Acuario Marketing Corp. 493 SCRA 157
o. Erezo v. Jepte G.R. No. L-9605
p. Santos v. Sibug 104 SCRA 520
q. Lita Enterprises, Inc. v. Court of Appeals G.R. No. L-64693
r. PCI Leasing and Finance Inc. v. Court of Appeals 557 SCRA 141
s. Lim v. Court of Appeals G.R. No. 125817
t. Teja Marketing
U. IAC 148 SCRA 347
MELENCIO-HERRERA, J.:
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 (Baliwag, for brevity). The Complaint alleged that George, who
was a paying passenger on a Baliwag bus on 17 December 1984, 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.
On 26 April 1985 an Answer was filed by petitioner alleging that the cause of
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. In its Answer, Fortune Insurance claimed limited liability, the
coverage being subject to a Schedule of Indemnities forming part of the
insurance policy.
On 14 November 1985 and 18 November 1985, respectively, 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 "Release of
Claims" dated 16 May 1985. These Motions were denied by the Trial Court in
an Order dated 13 January 1986 as they were filed beyond the time for
pleading and after the Answer were already filed.
On 5 February 1986 Baliwag filed a Motion to Admit Amended Answer, which
was granted by the Trial Court. The Amended Answer incorporated the
affirmative defense in the Motion to Dismiss to the effect that on 16 May 1985,
George bad been paid all his claims for damages arising from the incident
subject matter of the complaint when he executed the following "Release of
Claims":
For and in consideration of the payment to me/us of the sum of
EIGHT THOUSAND TWENTY and 50/100 PESOS ONLY
(P8,020.50), the receipt of which is hereby acknowledged, I/we,
being of lawful age, do hereby release, acquit and forever
discharge Fortune Insurance and/or Baliwag transit, Inc. his/her
heirs, executors and assigns, from any and all liability now
accrued or hereafter to accrue on account of any and all claims
or causes of action which I/we now or may here after have for
personal injuries, damage to property, loss of services, medical
expenses, losses or damages of any and every kind or nature
whatsoever, now known or what may hereafter develop by
me/us sustained or received on or about 17th day of
December, 1984 through Reckless Imprudence Resulting to
Physical Injuries, and I/we hereby declare that I/we fully
understand the terms of this settlement and voluntarily accept
said sum for the purpose of making a full and final compromise
adjustment and settlement of the injuries and damages,
expenses and inconvenience above mentioned. (Rollo, p. 11)
During the preliminary hearing on the aforementioned affirmative defense,
Baliwag waived the presentation of testimonial evidence and instead offered
as its Exhibit "1" the "Release of Claims" signed by George and witnessed by
his brother Benjamin L. Cailipan, a licensed engineer.
By way of opposition to petitioner's affirmative defense, respondent Sotero
Cailipan, Jr. testified that be is the father of George, who at the time of the
incident was a student, living with his parents and totally dependent on them
for their support; that the expenses for his hospitalization were shouldered by
his parents; and that they had not signed the "Release of Claims."
In an Order dated 29 August 1986, the Regional Trial Court of Bulacan,
Branch 20, 1 dismissed the Complaint and Third-party Complaint, ruling that since
the contract of carriage is between Baliwag and George L. Cailipan, the latter, who
is 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.
Consequently, the execution by George of the Release of Claims discharges
Baliwag and Fortune Insurance.
Hence, this Petition for Review on certiorari by Baliwag assailing the Appellate
Court judgment.
The issue brought to the fore is the legal effect of the Release of Claims
executed by George during the pendency of this case.
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 (Marimperio Compania Naviera, S.A. vs. Court of Appeals, No. L40234, 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.
The general rule of the common law is that every action must
be brought in the name of the party whose legal right has been
invaded or infringed. 15 Enc. P1. & Pr. p. 484. "For the
immediate wrong and damage the person injured is the only
one who can maintain the action." Id. p. 578. The person who
sustains an injury is the person to bring an action for the injury
against the wrongdoer." Dicey parties to Actions, 347. (Cited in
Green v. Shoemaker, 73 A 688, 23 L.R.A., N.S. 667).
There is no question regarding the genuineness and due execution of the
Release of Claims. It is a duly notarized public document. It clearly stipulates
that the consideration of P8,020.50 received by George was "to release and
forever discharge Fortune Insurance and/or Baliwag from any and all liabilities
now accrued or to accrue on account of any and all claims or causes of action
... for personal injuries, damage to property, loss of services, medical
expenses, losses or damages of any and every kind or nature whatsoever,
sustained by him on 17 December 1984 thru Reckless Imprudence Resulting
to Physical Injuries." Consequently, the ruling of respondent Appellate Court
that the "Release of Claims" was intended only as the full and final settlement
of a third-party liability for bodily injury claim and not for the purpose of
releasing Baliwag from its liability, if any, in a breach of a contract of carriage,
has to be rejected for being contrary to the very terms thereof. If the terms of a
contract are clear and leave no doubt upon the intention of the contracting
parties, the literal meaning of its stipulations shall control (Article 1370, Civil
Code). The phraseology "any and all claims or causes of action" is broad
enough to include all damages that may accrue to the injured party arising
from the unfortunate accident.
The Release of Claims had the effect of a compromise agreement since it was
entered into for the purpose of making a full and final compromise adjustment
and settlement of the cause of action involved. A compromise is a contract
whereby the parties, by making reciprocal concessions, avoid a litigation or put
an end to one already commenced (Article 2028, Civil Code). The Release of
Claims executed by the injured party himself wrote finish to this litigation.
WHEREFORE, the Decision dated 22 October 1987 of respondent Court of
Appeals is SET ASIDE, the Decision of the Regional Trial Court of Bulacan,
Branch 20, is REINSTATED, and the Complaint and Third-Party Complaint are
hereby ordered DISMISSED. No costs.
SO ORDERED.
NOCON, J.:
This is a petition for review on certiorari to annul and set aside the decision
dated November 15, 1989 of the Court of Appeals 1 affirming the decision of the
trial court 2 in ordering petitioner British Airways, Inc. to pay private respondent
First International Trading and General Services actual damages, moral damages,
corrective or exemplary damages, attorney's fees and the costs as well as the
Resolution dated February 15, 1990 3 denying petitioner's Motion for
Reconsideration in the appealed decision.
recruited who must leave immediately since the visas of said workers are valid
only for 45 days and the Bureau of Employment Services mandates that
contract workers must be sent to the job site within a period of 30 days.
Sometime in the first week of June, 1981, private respondent was again
informed by the petitioner that it had received a prepaid ticket advice from its
Jeddah branch for the transportation of 27 contract workers. Immediatety,
private respondent instructed its travel agent to book the 27 contract workers
with the petitioner but the latter was only able to book and confirm 16 seats on
its June 9, 1981 flight. However, on the date of the scheduled flight only 9
workers were able to board said flight while the remaining 7 workers were
rebooked to June 30, 1981 which bookings were again cancelled by the
petitioner without any prior notice to either private respondent or the workers.
Thereafter, the 7 workers were rebooked to the July 4,1981 flight of petitioner
with 6 more workers booked for said flight. Unfortunately, the confirmed
bookings of the 13 workers were again cancelled and rebooked to July 7,
1981.
On July 6, 1981, private respondent paid the travel tax of the said workers as
required by the petitioner but when the receipt of the tax payments was
submitted, the latter informed private respondent that it can only confirm the
seats of the 12 workers on its July 7, 1981 flight. However, the confirmed seats
of said workers were again cancelled without any prior notice either to the
private respondent or said workers. The 12 workers were finally able to leave
for Jeddah after private respondent had bought tickets from the other airlines.
As a result of these incidents, private respondent sent a letter to petitioner
demanding compensation for the damages it had incurred by the latter's
repeated failure to transport its contract workers despite confirmed bookings
and payment of the corresponding travel taxes.
On July 23, 1981, the counsel of private respondent sent another letter to the
petitioner demanding the latter to pay the amount of P350,000.00 representing
damages and unrealized profit or income which was denied by the petitioner.
On August 8, 1981, private respondent received a telex message from its
principal cancelling the hiring of the remaining recruited workers due to the
delay in transporting the workers to Jeddah. 5
On January 27, 1982, private respondent filed a complaint for damages
against petitioner with the Regional Trial Court of Manila, Branch 1 in Civil
Case No. 82-4653.
On the other hand, petitioner, alleged in its Answer with counterclaims that it
received a telex message from Jeddah on March 20, 1981 advising that the
principal of private respondent had prepaid the airfares of 100 persons to
transport private respondent's contract workers from Manila to Jeddah on or
before March 30, 1981. However, due to the unavailability of space and limited
time, petitioner had to return to its sponsor in Jeddah the prepaid ticket advice
consequently not even one of the alleged 93 contract workers were booked in
any of its flights.
On June 5, 1981, petitioner received another prepaid ticket advice to transport
16 contract workers of private respondent to Jeddah but the travel agent of the
private respondent booked only 10 contract workers for petitioner's June 9,
1981 flight. However, only 9 contract workers boarded the scheduled flight with
1 passenger not showing up as evidenced by the Philippine Airlines'
passenger manifest for Flight BA-020 (Exhibit "7", "7-A", "7-B" and "7-C"). 6
Thereafter, private respondent's travel agent booked seats for 5 contract
workers on petitioner's July 4, 1981 flight but said travel agent cancelled the
booking of 2 passengers while the other 3 passengers did not show up on said
flight.
Sometime in July 1981, the travel agent of the private respondent booked 7
more contract workers in addition to the previous 5 contract workers who were
not able to board the July 4, 1981 flight with the petitioner's July 7, 1981 flight
which was accepted by petitioner subject to reconfirmation.
However on July 6, 1981, petitioner's computer system broke down which
resulted to petitioner's failure to get a reconfirmation from Saudi Arabia Airlines
causing the automatic cancellation of the bookings of private respondent's 12
contract workers. In the morning of July 7, 1981, the computer system of the
petitioner was reinstalled and immediately petitioner tried to reinstate the
bookings of the 12 workers with either Gulf Air or Saudi Arabia Airlines but
both airlines replied that no seat was available on that date and had to place
the 12 workers on the wait list. Said information was duly relayed to the private
respondent and the 12 workers before the scheduled flight.
After due trial on or on August 27, 1985, the trial court rendered its decision,
the dispositive portion of which reads as follows:
WHEREFORE, in view of all the foregoing, this Court renders
judgment:
respondent's workers in its flight despite confirmed booking of said workers clearly
constitutes breach of contract and bad faith on its part. In resolving petitioner's
theory that private respondent has no cause of action in the instant case, the
appellate court correctly held that:
Thus, while it may be true that private respondent was compelled to borrow
money for the airfare tickets of its contract workers when petitioner failed to
transport said workers, the reimbursements made by its principal to private
respondent failed to support the latter's claim that it suffered actual damages
as a result of petitioner's failure to transport said workers. It is undisputed that
private respondent had consistently admitted that its principal had reimbursed
all its expenses.
REGALADO, J.:p
On May 13, 1985, private respondents filed a complaint 1 for damages against
petitioners for the death of Pedrito Cudiamat as a result of a vehicular accident which occurred on March 25,
1985 at Marivic, Sapid, Mankayan, Benguet. Among others, it was alleged that on said date, while petitioner
Theodore M. Lardizabal was driving a passenger bus belonging to petitioner corporation in a reckless and
imprudent manner and without due regard to traffic rules and regulations and safety to persons and property, it
ran over its passenger, Pedrito Cudiamat. However, instead of bringing Pedrito immediately to the nearest
hospital, the said driver, in utter bad faith and without regard to the welfare of the victim, first brought his other
passengers and cargo to their respective destinations before banging said victim to the Lepanto Hospital
where he expired.
On the other hand, petitioners alleged that they had observed and continued to
observe the extraordinary diligence required in the operation of the
transportation company and the supervision of the employees, even as they
add that they are not absolute insurers of the safety of the public at large.
Further, it was alleged that it was the victim's own carelessness and
negligence which gave rise to the subject incident, hence they prayed for the
dismissal of the complaint plus an award of damages in their favor by way of a
counterclaim.
On July 29, 1988, the trial court rendered a decision, effectively in favor of
petitioners, with this decretal portion:
IN VIEW OF ALL THE FOREGOING, judgment is hereby
pronounced that Pedrito Cudiamat was negligent, which
negligence was the proximate cause of his death. Nonetheless,
The foregoing testimonies show that the place of the accident and the place
where one of the passengers alighted were both between Bunkhouses 53 and
54, hence the finding of the Court of Appeals that the bus was at full stop when
the victim boarded the same is correct. They further confirm the conclusion
that the victim fell from the platform of the bus when it suddenly accelerated
forward and was run over by the rear right tires of the vehicle, as shown by the
physical evidence on where he was thereafter found in relation to the bus
when it stopped. Under such circumstances, it cannot be said that the
deceased was guilty of negligence.
The contention of petitioners that the driver and the conductor had no
knowledge that the victim would ride on the bus, since the latter had
supposedly not manifested his intention to board the same, does not merit
consideration. When the bus is not in motion there is no necessity for a person
who wants to ride the same to signal his intention to board. A public utility bus,
once it stops, is in effect making a continuous offer to bus riders. Hence, it
becomes the duty of the driver and the conductor, every time the bus stops, to
do no act that would have the effect of increasing the peril to a passenger
while he was attempting to board the same. The premature acceleration of the
bus in this case was a breach of such duty. 11
It is the duty of common carriers of passengers, including common carriers by
railroad train, streetcar, or motorbus, to stop their conveyances a reasonable
length of time in order to afford passengers an opportunity to board and enter,
and they are liable for injuries suffered by boarding passengers resulting from
the sudden starting up or jerking of their conveyances while they are doing
so. 12
Further, even assuming that the bus was moving, the act of the victim in
boarding the same cannot be considered negligent under the circumstances.
As clearly explained in the testimony of the aforestated witness for petitioners,
Virginia Abalos, th bus had "just started" and "was still in slow motion" at the
point where the victim had boarded and was on its platform. 13
It is not negligence per se, or as a matter of law, for one attempt to board a
train or streetcar which is moving slowly. 14 An ordinarily prudent person would have made
the attempt board the moving conveyance under the same or similar circumstances. The fact that passengers
board and alight from slowly moving vehicle is a matter of common experience both the driver and conductor
in this case could not have been unaware of such an ordinary practice.
The victim herein, by stepping and standing on the platform of the bus, is
already considered a passenger and is entitled all the rights and protection
pertaining to such a contractual relation. Hence, it has been held that the duty
which the carrier passengers owes to its patrons extends to persons boarding
cars as well as to those alighting therefrom. 15
Common carriers, from the nature of their business and reasons of public
policy, are bound to observe extraordina diligence for the safety of the
passengers transported by the according to all the circumstances of each
case. 16 A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence very cautious persons, with a due regard for all the circumstances. 17
the serious condition of the victim. The vacuous reason given by petitioners
that it was the wife of the deceased who caused the delay was tersely and
correctly confuted by respondent court:
... The pretension of the appellees that the delay was due to
the fact that they had to wait for about twenty minutes for
Inocencia Cudiamat to get dressed deserves scant
consideration. It is rather scandalous and deplorable for a wife
whose husband is at the verge of dying to have the luxury of
dressing herself up for about twenty minutes before attending
to help her distressed and helpless husband. 19
Further, it cannot be said that the main intention of petitioner Lardizabal in
going to Bunk 70 was to inform the victim's family of the mishap, since it was
not said bus driver nor the conductor but the companion of the victim who
informed his family thereof. 20 In fact, it was only after the refrigerator was unloaded that one of the
passengers thought of sending somebody to the house of the victim, as shown by the testimony of Virginia
Abalos again, to wit:
The case before the Court is an appeal from the decision and
resolution of the Court of Appeals, promulgated on 27 April 2000 and 10
October 2000, respectively, in CA-G.R. CV No. 60720, entitled Marjorie
Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et. al.,
which has modified the decision of 11 August 1998 of the Regional Trial
Court, Branch 266, Pasig City, exonerating Prudent Security Agency
(Prudent) from liability and finding Light Rail Transit Authority (LRTA) and
Rodolfo Roman liable for damages on account of the death of Nicanor
Navidad.
On 14 October 1993, about half an hour past seven oclock in the
evening, Nicanor Navidad, then drunk, entered the EDSA LRT station after
purchasing a token (representing payment of the fare). While Navidad was
standing on the platform near the LRT tracks, Junelito Escartin, the security
guard assigned to the area approached Navidad. A misunderstanding or an
altercation between the two apparently ensued that led to a fist fight.No
evidence, however, was adduced to indicate how the fight started or who,
between the two, delivered the first blow or how Navidad later fell on the
LRT tracks. At the exact moment that Navidad fell, an LRT train, operated
by petitioner Rodolfo Roman, was coming in. Navidad was struck by the
moving train, and he was killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent
Marjorie Navidad, along with her children, filed a complaint for damages
against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit
Organization, Inc. (Metro Transit), and Prudent for the death of her
husband. LRTA and Roman filed a counterclaim against Navidad and a
cross-claim against Escartin and Prudent. Prudent, in its answer, denied
liability and averred that it had exercised due diligence in the selection and
supervision of its security guards.
The LRTA and Roman presented their evidence while Prudent and
Escartin, instead of presenting evidence, filed a demurrer contending that
Navidad had failed to prove that Escartin was negligent in his assigned
task. On 11 August 1998, the trial court rendered its decision; it adjudged:
The appellate court ratiocinated that while the deceased might not
have then as yet boarded the train, a contract of carriage theretofore had
already existed when the victim entered the place where passengers were
supposed to be after paying the fare and getting the corresponding token
therefor. In exempting Prudent from liability, the court stressed that there
was nothing to link the security agency to the death of Navidad. It said that
Navidad failed to show that Escartin inflicted fist blows upon the victim and
the evidence merely established the fact of death of Navidad by reason of
his having been hit by the train owned and managed by the LRTA and
operated at the time by Roman. The appellate court faulted petitioners for
their failure to present expert evidence to establish the fact that the
application of emergency brakes could not have stopped the train.
[1]
[2]
the part of a common carrier was not overcome. Petitioners would insist
that Escartins assault upon Navidad, which caused the latter to fall on the
tracks, was an act of a stranger that could not have been foreseen or
prevented. The LRTA would add that the appellate courts conclusion on
the existence of an employer-employee relationship between Roman and
LRTA lacked basis because Roman himself had testified being an
employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court,
contended that a contract of carriage was deemed created from the
moment Navidad paid the fare at the LRT station and entered the premises
of the latter, entitling Navidad to all the rights and protection under a
contractual relation, and that the appellate court had correctly held LRTA
and Roman liable for the death of Navidad in failing to exercise
extraordinary diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from the
nature of its business and for reasons of public policy, is burdened with the
duty of exercising utmost diligence in ensuring the safety of
passengers. The Civil Code, governing the liability of a common carrier for
death of or injury to its passengers, provides:
[4]
Article 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.
Article 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that
they observed extraordinary diligence as prescribed in articles 1733 and 1755.
Article 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or willful acts of the formers employees, although such
employees may have acted beyond the scope of their authority or in violation of
the orders of the common carriers.
the common carriers employees through the exercise of the diligence of a good
father of a family could have prevented or stopped the act or omission.
The law requires common carriers to carry passengers safely using
the utmost diligence of very cautious persons with due regard for all
circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so
long as the passengers are within its premises and where they ought to be
in pursuance to the contract of carriage. The statutory provisions render a
common carrier liable for death of or injury to passengers (a) through
the negligence or wilful acts of its employees or b) on account of
wilful acts or negligence of other passengers or of strangers if the
common carriers employees through the exercise of due diligence
could have prevented or stopped the act or omission. In case of such
death or injury, a carrier is presumed to have been at fault or been
negligent, and by simple proof of injury, the passenger is relieved of the
duty to still establish the fault or negligence of the carrier or of its
employees and the burden shifts upon the carrier to prove that the injury is
due to an unforeseen event or to force majeure. In the absence of
satisfactory explanation by the carrier on how the accident occurred, which
petitioners, according to the appellate court, have failed to show, the
presumption would be that it has been at fault, an exception from the
general rule that negligence must be proved.
[5]
[6]
[7]
[8]
[9]
[10]
[11]
This liability of the common carriers does not cease upon proof that they exercised
all the diligence of a good father of a family in the selection and supervision of
their employees.
Article 1763. A common carrier is responsible for injuries suffered by a passenger
on account of the willful acts or negligence of other passengers or of strangers, if
[13]
matter that has not been shown. Absent such a showing, one might ask
further, how then must the liability of the common carrier, on the one hand,
and an independent contractor, on the other hand, be described?It would
be solidary. A contractual obligation can be breached by tort and when the
same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana, Article 2194 of the Civil Code
can well apply. In fine, a liability for tort may arise even under a contract,
where tort is that which breaches the contract. Stated differently, when an
act which constitutes a breach of contract would have itself constituted the
source of a quasi-delictual liability had no contract existed between the
parties, the contract can be said to have been breached by tort, thereby
allowing the rules on tort to apply.
Regrettably for LRT, as well as perhaps the surviving spouse and heirs
of the late Nicanor Navidad, this Court is concluded by the factual finding of
the Court of Appeals that there is nothing to link (Prudent) to the death of
Nicanor (Navidad), for the reason that the negligence of its employee,
Escartin, has not been duly proven x x x. This finding of the appellate court
is not without substantial justification in our own review of the records of the
case.
FELICIANO, J.:
[14]
[15]
[16]
[17]
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600
boxes never reached petitioner, since the truck which carried these boxes was
hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by
armed men who took with them the truck, its driver, his helper and the cargo.
[18]
[19]
SO ORDERED.
On appeal before the Court of Appeals, respondent urged that the trial court
had erred in considering him a common carrier; in finding that he had
habitually offered trucking services to the public; in not exempting him from
liability on the ground of force majeure; and in ordering him to pay damages
and attorney's fees.
The Court of Appeals reversed the judgment of the trial court and held that
respondent had been engaged in transporting return loads of freight "as a
casual
occupation a sideline to his scrap iron business" and not as a common
carrier. Petitioner came to this Court by way of a Petition for Review assigning
as errors the following conclusions of the Court of Appeals:
1. that private respondent was not a common carrier;
2. that the hijacking of respondent's truck was force majeure;
and
3. that respondent was not liable for the value of the
undelivered cargo. (Rollo, p. 111)
We consider first the issue of whether or not private respondent Ernesto
Cendana may, under the facts earlier set forth, be properly characterized as a
common carrier.
The Civil Code defines "common carriers" in the following terms:
Article 1734 establishes the general rule that common carriers are responsible
for the loss, destruction or deterioration of the goods which they carry,
"unless the same is due to any of the following causes only:
The precise issue that we address here relates to the specific requirements of
the duty of extraordinary diligence in the vigilance over the goods carried in the
specific context of hijacking or armed robbery.
As noted earlier, the duty of extraordinary diligence in the vigilance over goods
is, under Article 1733, given additional specification not only by Articles 1734
and 1735 but also by Article 1745, numbers 4, 5 and 6, Article 1745 provides
in relevant part:
Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy:
xxx xxx xxx
(5) that the common carrier shall not be
responsible for the acts or omissions of his or
its employees;
(6) that the common carrier's liability for acts
committed by thieves, or of robbers who
donot act with grave or irresistible threat,
violence or force, is dispensed with or
diminished; and
(7) that the common carrier shall not
responsible for the loss, destruction or
deterioration of goods on account of the
defective condition of the car vehicle, ship,
airplane or other equipment used in the
contract of carriage. (Emphasis supplied)
Under Article 1745 (6) above, a common carrier is held responsible and will
not be allowed to divest or to diminish such responsibility even for acts of
strangers like thieves or robbers, except where such thieves or robbers in fact
acted "with grave or irresistible threat, violence or force." We believe and so
hold that the limits of the duty of extraordinary diligence in the vigilance over
the goods carried are reached where the goods are lost as a result of a
robbery which is attended by "grave or irresistible threat, violence or force."
In the instant case, armed men held up the second truck owned by private
respondent which carried petitioner's cargo. The record shows that an
information for robbery in band was filed in the Court of First Instance of
Tarlac, Branch 2, in Criminal Case No. 198 entitled "People of the Philippines
v. Felipe Boncorno, Napoleon Presno, Armando Mesina, Oscar Oria and one
John Doe." There, the accused were charged with willfully and unlawfully
taking and carrying away with them the second truck, driven by Manuel
Estrada and loaded with the 600 cartons of Liberty filled milk destined for
delivery at petitioner's store in Urdaneta, Pangasinan. The decision of the trial
court shows that the accused acted with grave, if not irresistible, threat,
violence or force. 3 Three (3) of the five (5) hold-uppers were armed with firearms.
The robbers not only took away the truck and its cargo but also kidnapped the
driver and his helper, detaining them for several days and later releasing them in
another province (in Zambales). The hijacked truck was subsequently found by the
police in Quezon City. The Court of First Instance convicted all the accused of
robbery, though not of robbery in band. 4
Matute stayed at the Resort from September 8 to 11, 2000. He was originally scheduled to
leave the Resort in the afternoon of September 10, 2000, but was advised to stay for
another night because of strong winds and heavy rains.
On September 11, 2000, as it was still windy, Matute and 25 other Resort guests including
petitioners son and his wife trekked to the other side of the Coco Beach mountain that was
Promulgated:
June 29, 2010
sheltered from the wind where they boarded M/B Coco Beach III, which was to ferry them
to Batangas.
x-------------------------------------------------x
Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto Galera
DECISION
and into the open seas, the rain and wind got stronger, causing the boat to tilt from side to
side and the captain to step forward to the front, leaving the wheel to one of the crew
members.
after the other, M/B Coco Beach III capsized putting all passengers underwater.
The passengers, who had put on their life jackets, struggled to get out of the boat. Upon
seeing the captain, Matute and the other passengers who reached the surface asked him
what they could do to save the people who were still trapped under the boat. The captain
replied Iligtas niyo na lang ang sarili niyo (Just save yourselves).
stayed at Coco Beach Island Resort (Resort) owned and operated by respondent.
The stay of the newly wed Ruelito and his wife at the Resort from September 9 to 11,
Help came after about 45 minutes when two boats owned by Asia Divers in Sabang, Puerto
2000 was by virtue of a tour package-contract with respondent that included transportation
Galera passed by the capsized M/B Coco Beach III. Boarded on those two boats were 22
persons, consisting of 18 passengers and four crew members, who were brought
to Pisa Island. Eight passengers, including petitioners son and his wife, died during the
Miguel C. Matute (Matute),[2] a scuba diving instructor and one of the survivors, gave his
account of the incident that led to the filing of the complaint as follows:
incident.
At the time of Ruelitos death, he was 28 years old and employed as a contractual worker
characterized by strong winds and big waves, suddenly occurred, causing the boat to
for Mitsui Engineering & Shipbuilding Arabia, Ltd. in Saudi Arabia, with a basic monthly
capsize.[10]
salary of $900.[3]
By Decision of February 16, 2005,[11] Branch 267 of the Pasig RTC dismissed petitioners
Petitioners, by letter of October 26, 2000,[4] demanded indemnification from respondent for
By Decision of August 19, 2008,[13] the appellate court denied petitioners appeal,
holding, among other things, that the trial court correctly ruled that respondent is a private
As petitioners declined respondents offer, they filed the Complaint, as earlier reflected,
carrier which is only required to observe ordinary diligence; that respondent in fact
alleging that respondent, as a common carrier, was guilty of negligence in allowing M/B
observed extraordinary diligence in transporting its guests on board M/B Coco Beach III;
Coco Beach III to sail notwithstanding storm warning bulletins issued by the Philippine
and that the proximate cause of the incident was a squall, a fortuitous event.
Petitioners Motion for Reconsideration having been denied by Resolution dated January
16, 2009,[14] they filed the present Petition for Review.[15]
In its Answer,
[7]
respondent denied being a common carrier, alleging that its boats are not
available to the general public as they only ferry Resort guests and crew
members. Nonetheless, it claimed that it exercised the utmost diligence in ensuring the
safety of its passengers; contrary to petitioners allegation, there was no storm on September
11, 2000 as the Coast Guard in fact cleared the voyage; and M/B Coco Beach III was not
Petitioners maintain the position they took before the trial court, adding that
respondent is a common carrier since by its tour package, the transporting of its guests is an
integral part of its resort business.They inform that another division of the appellate court
in fact held respondent liable for damages to the other survivors of the incident.
filled to capacity and had sufficient life jackets for its passengers. By way of Counterclaim,
respondent alleged that it is entitled to an award for attorneys fees and litigation expenses
amounting to not less than P300,000.
Upon the other hand, respondent contends that petitioners failed to present evidence to
prove that it is a common carrier; that the Resorts ferry services for guests cannot be
Carlos Bonquin, captain of M/B Coco Beach III, averred that the Resort customarily
requires four conditions to be met before a boat is allowed to sail, to wit: (1) the sea is
extraordinary diligence as shown by the conditions it had imposed before allowing M/B
calm, (2) there is clearance from the Coast Guard, (3) there is clearance from the captain
Coco Beach III to sail; that the incident was caused by a fortuitous event without any
and (4) there is clearance from the Resorts assistant manager. [8] He added that M/B Coco
contributory negligence on its part; and that the other case wherein the appellate court held
Beach III met all four conditions on September 11, 2000, [9] but asubasco or squall,
it liable for damages involved different plaintiffs, issues and evidence. [16]
Indeed, respondent is a common carrier. Its ferry services are so intertwined with
its main business as to be properly considered ancillary thereto. The constancy of
respondents ferry services in its resort operations is underscored by its having its
own Coco Beach boats. And the tour packages it offers, which include the ferry services,
may be availed of by anyone who can afford to pay the same. These services are thus
available to the public.
That respondent does not charge a separate fee or fare for its ferry services is of
no moment. It would be imprudent to suppose that it provides said services at a loss. The
Court is aware of the practice of beach resort operators offering tour packages to factor the
transportation fee in arriving at the tour package price. That guests who opt not to avail of
respondents ferry services pay the same amount is likewise inconsequential. These guests
may only be deemed to have overpaid.
As De Guzman instructs, Article 1732 of the Civil Code defining common carriers has
deliberately refrained from making distinctions on whether the carrying of persons or
goods is the carriers principal business, whether it is offered on a regular basis, or whether
it is offered to the general public. The intent of the law is thus to not consider such
distinctions. Otherwise, there is no telling how many other distinctions may be concocted
common carriers demands that they take care of the goods or lives entrusted to their hands
Under the Civil Code, common carriers, from the nature of their business and for reasons
Respondents insistence that the incident was caused by a fortuitous event does not
of public policy, are bound to observe extraordinary diligence for the safety of the
impress either.
passengers transported by them, according to all the circumstances of each case.[19] They
The elements of a "fortuitous event" are: (a) the cause of the unforeseen and unexpected
are bound to carry the passengers safely as far as human care and foresight can provide,
occurrence, or the failure of the debtors to comply with their obligations, must have been
using the utmost diligence of very cautious persons, with due regard for all the
independent of human will; (b) the event that constituted the caso fortuito must have been
circumstances.
[20]
impossible to foresee or, if foreseeable, impossible to avoid; (c) the occurrence must have
been such as to render it impossible for the debtors to fulfill their obligation in a normal
manner; and (d) the obligor must have been free from any participation in the aggravation
presumed that the common carrier is at fault or negligent. In fact, there is even no need for
the court to make an express finding of fault or negligence on the part of the common
To fully free a common carrier from any liability, the fortuitous event must have been
carrier. This statutory presumption may only be overcome by evidence that the carrier
the proximate and only cause of the loss. And it should have exercised due diligence to
[21]
prevent or minimize the loss before, during and after the occurrence of the fortuitous
event.[25]
Respondent nevertheless harps on its strict compliance with the earlier mentioned
conditions of voyage before it allowed M/B Coco Beach III to sail on September 11,
2000. Respondents position does not impress.
Respondent cites the squall that occurred during the voyage as the fortuitous event that
overturned M/B Coco Beach III. As reflected above, however, the occurrence of squalls
was expected under the weather condition of September 11, 2000. Moreover, evidence
The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical
cyclone warnings for shipping on September 10 and 11, 2000 advising of tropical
shows that M/B Coco Beach III suffered engine trouble before it capsized and sank.[26] The
incident was, therefore, not completely free from human intervention.
depressions in Northern Luzon which would also affect the province of Mindoro.[22] By the
The Court need not belabor how respondents evidence likewise fails to demonstrate that it
testimony of Dr. Frisco Nilo, supervising weather specialist of PAGASA, squalls are to be
exercised due diligence to prevent or minimize the loss before, during and after the
A very cautious person exercising the utmost diligence would thus not brave such stormy
weather and put other peoples lives at risk. The extraordinary diligence required of
that the living expenses constituted the smaller percentage of the gross income, the living
Article 1764[27] vis--vis Article 2206[28] of the Civil Code holds the common
carrier in breach of its contract of carriage that results in the death of a passenger liable to
pay the following: (1) indemnity for death, (2) indemnity for loss of earning capacity and
(3) moral damages.
Applying the above guidelines, the Court determines Ruelito's life expectancy as
follows:
Petitioners are entitled to indemnity for the death of Ruelito which is fixed
at P50,000.[29]
As for damages representing unearned income, the formula for its computation is:
2/3 x [52]
Net Earning Capacity = life expectancy x (gross annual income reasonable and necessary living
expenses).
Life expectancy = 35
Documentary evidence shows that Ruelito was earning a basic monthly salary of
$900[35] which, when converted to Philippine peso applying the annual average exchange
rate of $1 = P44 in 2000,[36]amounts to P39,600. Ruelitos net earning capacity is thus
computed as follows:
The first factor, i.e., life expectancy, is computed by applying the formula (2/3 x
[80 age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial
of Combined Experience Table of Mortality.[31]
The second factor is computed by multiplying the life expectancy by the net
Net Earning Capacity = life expectancy x (gross annual income reasonable and necessary living expenses).
earnings of the deceased, i.e., the total earnings less expenses necessary in the creation of
= 35 x (P475,200 - P237,600)
= 35 x (P237,600)
such earnings or income and less living and other incidental expenses. [32] The loss is not
equivalent to the entire earnings of the deceased, but only such portion as he would have
used to support his dependents or heirs. Hence, to be deducted from his gross earnings are
the necessary expenses supposed to be used by the deceased for his own needs. [33]
In computing the third factor necessary living expense, Smith Bell Dodwell
Shipping Agency Corp. v. Borja[34] teaches that when, as in this case, there is no showing
1764 vis--vis Article 2206 of the Civil Code, petitioners are entitled to moral damages.
Pursuant to Article 2208[39] of the Civil Code, attorney's fees may also be awarded
where exemplary damages are awarded. The Court finds that 10% of the total amount
adjudged against respondent is reasonable for the purpose.
Since the amounts payable by respondent have been determined with certainty only in the
present petition, the interest due shall be computed upon the finality of this decision at the
Finally, Eastern Shipping Lines, Inc. v. Court of Appeals[40] teaches that when an
obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-
rate of 12% per annum until satisfaction, in accordance with paragraph number 3 of the
immediately cited guideline in Easter Shipping Lines, Inc.
delicts is breached, the contravenor can be held liable for payment of interest in the concept
of actual and compensatory damages, subject to the following rules, to wit
WHEREFORE, the
Court
of
Appeals
Decision
of August
19,
ordering respondent to pay petitioners the following: (1)P50,000 as indemnity for the death
annum computed from the finality of this decision until full payment.
of Ruelito Cruz; (2) P8,316,000 as indemnity for Ruelitos loss of earning capacity;
(3) P100,000 as moral damages; (4) P100,000 as exemplary damages; (5) 10% of the total
amount adjudged against respondent as attorneys fees; and (6) the costs of suit.
The total amount adjudged against respondent shall earn interest at the rate of 12% per
SO ORDERED.
ASIA
complete sinking of the barge, a portion of the goods was transferred to three other
barges.
[10]
The next day, September 6, 1990, the towing bits of the barge broke. It sank
completely, resulting in the total loss of the remaining cargo. A second Marine
Protest was filed on September 7, 1990.
[11]
DECISION
[12]
PUNO, J.:
On appeal is the Court of Appeals May 11, 2000 Decision in CA-G.R. CV No.
49195 and February 21, 2001 Resolution affirming with modification the April 6,
1994 Decision of the Regional Trial Court of Manila which found petitioner liable to
pay private respondent the amount of indemnity and attorney's fees.
[1]
[2]
[3]
[5]
[14]
On the same date, September 14, 1990, consignee sent a claim letter to the
petitioner, and another letter dated September 18, 1990 to the private respondent
for the value of the lost cargo.
On January 30, 1991, the private respondent indemnified the consignee in the
amount of P4,104,654.22. Thereafter, as subrogee, it sought recovery of said
amount from the petitioner, but to no avail.
[15]
[17]
[6]
On July 25, 1990, the carrying vessel arrived in Manila and the cargo was
transferred to the custody of the petitioner Asia Lighterage and Shipping, Inc. The
petitioner was contracted by the consignee as carrier to deliver the cargo to
consignee's warehouse at Bo. Ugong, Pasig City.
On August 15, 1990, 900 metric tons of the shipment was loaded on barge
PSTSI III, evidenced by Lighterage Receipt No. 0364 for delivery to
consignee. The cargo did not reach its destination.
[7]
The Regional Trial Court ruled in favor of the private respondent. The
dispositive portion of its Decision states:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant
Asia Lighterage & Shipping, Inc. liable to pay plaintiff Prudential Guarantee & Assurance
Co., Inc. the sum of P4,104,654.22 with interest from the date complaint was filed on July
3, 1991 until fully satisfied plus 10% of the amount awarded as and for attorney's
fees. Defendant's counterclaim is hereby DISMISSED. With costs against defendant.
[18]
It appears that on August 17, 1990, the transport of said cargo was
suspended due to a warning of an incoming typhoon. On August 22, 1990, the
petitioner proceeded to pull the barge to Engineering Island off Baseco to seek
shelter from the approaching typhoon. PSTSI III was tied down to other barges
which arrived ahead of it while weathering out the storm that night. A few days
after, the barge developed a list because of a hole it sustained after hitting an
unseen protuberance underneath the water. The petitioner filed a Marine Protest
on August 28, 1990. It likewise secured the services of Gaspar Salvaging
Corporation which refloated the barge. The hole was then patched with clay and
cement.
The barge was then towed to ISLOFF terminal before it finally headed
towards the consignee's wharf on September 5, 1990. Upon reaching the Sta.
Mesa spillways, the barge again ran aground due to strong current.To avoid the
[8]
WHEREFORE, the decision appealed from is hereby AFFIRMED with modification in the
sense that the salvage value of P201,379.75 shall be deducted from the amount
of P4,104,654.22. Costs against appellant.
[9]
SO ORDERED.
(1) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD
WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE SUPREME
COURT WHEN IT HELD THAT PETITIONER IS A COMMON CARRIER.
(2) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD
WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE SUPREME
COURT WHEN IT AFFIRMED THE FINDING OF THE LOWER COURT A
QUO THAT ON THE BASIS OF THE PROVISIONS OF THE CIVIL CODE
APPLICABLE TO COMMON CARRIERS, THE LOSS OF THE CARGO IS,
THEREFORE, BORNE BY THE CARRIER IN ALL CASES EXCEPT IN THE FIVE
(5) CASES ENUMERATED.
(3) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD
WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE SUPREME
COURT WHEN IT EFFECTIVELY CONCLUDED THAT PETITIONER FAILED TO
EXERCISE DUE DILIGENCE AND/OR WAS NEGLIGENT IN ITS CARE AND
CUSTODY OF THE CONSIGNEES CARGO.
[25]
[26]
[27]
On the second issue, we uphold the findings of the lower courts that petitioner
failed to exercise extraordinary diligence in its care and custody of the consignees
goods.
Common carriers are bound to observe extraordinary diligence in the
vigilance over the goods transported by them. They are presumed to have been
at fault or to have acted negligently if the goods are lost, destroyed or
deteriorated. To overcome the presumption of negligence in the case of loss,
destruction or deterioration of the goods, the common carrier must prove that it
exercised extraordinary diligence. There are, however, exceptions to this
rule. Article 1734 of the Civil Code enumerates the instances when the
presumption of negligence does not attach:
[28]
[29]
We disagree.
In De Guzman vs. Court of Appeals, we held that the definition of common
carriers in Article 1732 of the Civil Code makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity. We also did not distinguish
between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Further, we ruled that Article 1732 does not distinguish
between a carrier offering its services to the general public, and one who offers
services or solicits business only from a narrow segment of the general population.
[21]
In the case at bar, the principal business of the petitioner is that of lighterage
and drayage and it offers its barges to the public for carrying or transporting
[22]
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the
goods, unless the same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
xxxxxxxxx
[31]
q - Now, Mr. Witness, did it not occur to you it might be safer to just allow the Barge to lie
where she was instead of towing it?
a - Since that time that the Barge was refloated, GMC (General Milling Corporation, the
consignee) as I have said was in a hurry for their goods to be delivered at their Wharf
since they needed badly the wheat that was loaded in PSTSI-3.It was needed badly
by the consignee.
q - And this is the reason why you towed the Barge as you did?
a - Yes, sir.
xxxxxxxxx
CROSS-EXAMINATION BY ATTY. IGNACIO:
[34]
xxxxxxxxx
q - And then from ISLOFF Terminal you proceeded to the premises of the
GMC? Am I correct?
a - The next day, in the morning, we hired for additional two (2) tugboats as I
have stated.
xxxxxxxxx
q - Can you tell us what else transpired after that incident?
a - After the first accident, through the initiative of the barge owners, they tried to pull out
the barge from the place of the accident, and bring it to the anchor terminal for safety,
then after deciding if the vessel is stabilized, they tried to pull it to the consignees
warehouse, now while on route another accident occurred, now this time the barge
totally hitting something in the course.
q - You said there was another accident, can you tell the court the nature of the second
accident?
xxxxxxxxx
This is not all. Petitioner still headed to the consignees wharf despite
knowledge of an incoming typhoon. During the time that the barge was heading
towards the consignee's wharf on September 5, 1990, typhoon Loleng has already
entered the Philippine area of responsibility. A part of the testimony of Robert
Boyd, Cargo Operations Supervisor of the petitioner, reveals:
a - Yes.
q - And yet as a standard operating procedure of your Company, you have to
secure a sort of Certification to determine the weather condition, am I
correct?
a - Yes, sir.
[32]
[33]
q - So, more or less, you had the knowledge of the incoming typhoon, right?
a - Yes, sir.
MARTINEZ, J.:
This petition for review on certiorari assails the Decision of the Court of Appeals dated
November 29, 1995, in CA-G.R. SP No. 36801, affirming the decision of the Regional Trial Court of
Batangas City, Branch 84, in Civil Case No. 4293, which dismissed petitioners' complaint for a
business tax refund imposed by the City of Batangas.
Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as amended, to
contract, install and operate oil pipelines. The original pipeline concession was granted in 1967 [1] and
renewed by the Energy Regulatory Board in 1992.[2]
Sometime in January 1995, petitioner applied for a mayor's permit with the Office of the Mayor
of Batangas City. However, before the mayor's permit could be issued, the respondent City Treasurer
required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to
the Local Government Code.[3] The respondent City Treasurer assessed a business tax on the
petitioner amounting to P956,076.04 payable in four installments based on the gross receipts for
products pumped at GPS-1 for the fiscal year 1993 which amounted to P181,681,151.00. In order not
to hamper its operations, petitioner paid the tax under protest in the amount of P239,019.01 for the
first quarter of 1993.
On January 20, 1994, petitioner filed a letter-protest addressed to the respondent City
Treasurer, the pertinent portion of which reads:
"Please note that our Company (FPIC) is a pipeline operator with a government concession
granted under the Petroleum Act. It is engaged in the business of transporting petroleum
products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan
Terminals. As such, our Company is exempt from paying tax on gross receipts under
Section 133 of the Local Government Code of 1991 x x x x
"Moreover, Transportation contractors are not included in the enumeration of contractors
under Section 131, Paragraph (h) of the Local Government Code. Therefore, the authority
to impose tax 'on contractors and other independent contractors' under Section 143,
Paragraph (e) of the Local Government Code does not include the power to levy on
transportation contractors.
"The imposition and assessment cannot be categorized as a mere fee authorized under
Section 147 of the Local Government Code. The said section limits the imposition of fees
and charges on business to such amounts as may be commensurate to the cost of
regulation, inspection, and licensing. Hence, assuming arguendo that FPIC is liable for the
license fee, the imposition thereof based on gross receipts is violative of the aforecited
"The above article (Art. 1732, Civil Code) makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one who does
such carrying only as an ancillary activity (in local idiom, as a 'sideline'). Article 1732 x x
x avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis.Neither does Article 1732 distinguish
between a carrier offering its services to the 'general public,' i.e., the general
community or population, and one who offers services or solicits business only from a
narrow segment of the general population. We think that Article 1877 deliberately
refrained from making such distinctions.
So understood, the concept of 'common carrier' under Article 1732 may be seen to coincide
neatly with the notion of 'public service,' under the Public Service Act (Commonwealth Act
No. 1416, as amended) which at least partially supplements the law on common carriers set
forth in the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, 'public
service' includes:
'every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any common carrier,
railroad, street railway, traction railway, subway motor vehicle, either for freight or
passenger, or both, with or without fixed route and whatever may be its classification,
freight or carrier service of any class, express service, steamboat, or steamship line,
pontines, ferries and water craft, engaged in the transportation of passengers or freight or
both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal,
irrigation system gas, electric light heat and power, water supply and power petroleum,
sewerage system, wire or wireless communications systems, wire or wireless broadcasting
stations and other similar public services.' "(Underscoring Supplied)
Also, respondent's argument that the term "common carrier" as used in Section 133 (j) of the
Local Government Code refers only to common carriers transporting goods and passengers through
moving vehicles or vessels either by land, sea or water, is erroneous.
As correctly pointed out by petitioner, the definition of "common carriers" in the Civil Code
makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not
provide that the transportation of the passengers or goods should be by motor vehicle. In fact, in the
United States, oil pipe line operators are considered common carriers.[17]
Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a
"common carrier." Thus, Article 86 thereof provides that:
"Art. 86. Pipe line concessionaire as a common carrier. - A pipe line shall have the
preferential right to utilize installations for the transportation of petroleum owned by him,
but is obligated to utilize the remaining transportation capacity pro rata for the
transportation of such other petroleum as may be offered by others for transport, and to
charge without discrimination such rates as may have been approved by the Secretary of
Agriculture and Natural Resources."
Republic Act 387 also regards petroleum operation as a public utility. Pertinent portion of
Article 7 thereof provides:
"that everything relating to the exploration for and exploitation of petroleum x x and
everything relating to the manufacture, refining, storage, or transportation by special
methods of petroleum, is hereby declared to be a public utility." (Underscoring Supplied)
The Bureau of Internal Revenue likewise considers the petitioner a "common carrier." In BIR
Ruling No. 069-83, it declared:
"Section 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities,
municipalities, and barangays shall not extend to the levy of the following :
xxxxxxxxx
(j) Taxes on the gross receipts of transportation contractors and persons engaged
in the transportation of passengers or freight by hire and common carriers
by air, land or water, except as provided in this Code."
The deliberations conducted in the House of Representatives on the Local Government Code of
1991 are illuminating:
BELLOSILLO, J.:
Does a charter-party 1 between a shipowner and a charterer transform a common
carrier into a private one as to negate the civil law presumption of negligence in
case of loss or damage to its cargo?
Before loading the fertilizer aboard the vessel, four (4) of her holds 4 were all
Petitioner is already paying three (3%) percent common carrier's tax on its gross sales/earnings
under the National Internal Revenue Code.[19] To tax petitioner again on its gross receipts in its
transportation of petroleum business would defeat the purpose of the Local Government Code.
presumably inspected by the charterer's representative and found fit to take a load
of urea in bulk pursuant to par. 16 of the charter-party which reads:
WHEREFORE, the petition is hereby GRANTED. The decision of the respondent Court of
Appeals dated November 29, 1995 in CA-G.R. SP No. 36801 is REVERSED and SET ASIDE. SO
ORDERED.
After the Urea fertilizer was loaded in bulk by stevedores hired by and under
the supervision of the shipper, the steel hatches were closed with heavy iron
lids, covered with three (3) layers of tarpaulin, then tied with steel bonds. The
hatches remained closed and tightly sealed throughout the entire voyage. 5
Respondent SSA explained that they were not able to respond to the
consignee's claim for payment because, according to them, what they received
was just a request for shortlanded certificate and not a formal claim, and that
this "request" was denied by them because they "had nothing to do with the
discharge of the shipment." 14Hence, on 18 July 1975, PPI filed an action for
Upon arrival of the vessel at her port of call on 3 July 1974, the steel pontoon
hatches were opened with the use of the vessel's boom. Petitioner unloaded
the cargo from the holds into its steelbodied dump trucks which were parked
alongside the berth, using metal scoops attached to the ship, pursuant to the
terms and conditions of the charter-partly (which provided for an F.I.O.S.
clause). 6 The hatches remained open throughout the duration of the discharge. 7
damages with the Court of First Instance of Manila. The defendant carrier argued
that the strict public policy governing common carriers does not apply to them
because they have become private carriers by reason of the provisions of the
charter-party. The court a quo however sustained the claim of the plaintiff against
the defendant carrier for the value of the goods lost or damaged when it ruled
thus: 15
Each time a dump truck was filled up, its load of Urea was covered with
tarpaulin before it was transported to the consignee's warehouse located some
fifty (50) meters from the wharf. Midway to the warehouse, the trucks were
made to pass through a weighing scale where they were individually weighed
for the purpose of ascertaining the net weight of the cargo. The port area was
windy, certain portions of the route to the warehouse were sandy and the
weather was variable, raining occasionally while the discharge was in
progress. 8 The petitioner's warehouse was made of corrugated galvanized iron
(GI) sheets, with an opening at the front where the dump trucks entered and
unloaded the fertilizer on the warehouse floor. Tarpaulins and GI sheets were
placed in-between and alongside the trucks to contain spillages of the ferilizer. 9
It took eleven (11) days for PPI to unload the cargo, from 5 July to 18 July
1974 (except July 12th, 14th and 18th).10 A private marine and cargo surveyor,
Cargo Superintendents Company Inc. (CSCI), was hired by PPI to determine the
"outturn" of the cargo shipped, by taking draft readings of the vessel prior to and
after discharge. 11 The survey report submitted by CSCI to the consignee (PPI)
dated 19 July 1974 revealed a shortage in the cargo of 106.726 M/T and that a
portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt. The
same results were contained in a Certificate of Shortage/Damaged Cargo dated 18
July 1974 prepared by PPI which showed that the cargo delivered was indeed
short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having
been polluted with sand, rust and
dirt. 12
Upon the other hand, the term "common or public carrier" is defined in Art.
1732 of the Civil Code. 23 The definition extends to carriers either by land, air or
water which hold themselves out as ready to engage in carrying goods or
transporting passengers or both for compensation as a public employment and not
as a casual occupation. The distinction between a "common or public carrier" and
a "private or special carrier" lies in the character of the business, such that if the
undertaking is a single transaction, not a part of the general business or
occupation, although involving the carriage of goods for a fee, the person or
corporation offering such service is a private carrier. 24
Article 1733 of the New Civil Code mandates that common carriers, by reason
of the nature of their business, should observe extraordinary diligence in the
vigilance over the goods they carry. 25 In the case of private carriers, however,
the exercise of ordinary diligence in the carriage of goods will suffice. Moreover, in
the case of loss, destruction or deterioration of the goods, common carriers are
presumed to have been at fault or to have acted negligently, and the burden of
proving otherwise rests on them. 26 On the contrary, no such presumption applies
to private carriers, for whosoever alleges damage to or deterioration of the goods
carried has the onus of proving that the cause was the negligence of the carrier.
Verily, the presumption of negligence on the part of the respondent carrier has
been efficaciously overcome by the showing of extraordinary zeal and
assiduity exercised by the carrier in the care of the cargo. This was confirmed
by respondent appellate court thus
. . . Be that as it may, contrary to the trial court's finding, the
record of the instant case discloses ample evidence showing
that defendant carrier was not negligent in performing its
obligations. Particularly, the following testimonies of plaintiffappellee's own witnesses clearly show absence of negligence
by the defendant carrier; that the hull of the vessel at the time
of the discharge of the cargo was sealed and nobody could
open the same except in the presence of the owner of the
cargo and the representatives of the vessel (TSN, 20 July
1977, p. 14); that the cover of the hatches was made of steel
and it was overlaid with tarpaulins, three layers of tarpaulins
and therefore their contents were protected from the weather
(TSN, 5 April 1978, p. 24); and, that to open these hatches, the
seals would have to be broken, all the seals were found to be
intact (TSN, 20 July 1977, pp. 15-16) (emphasis supplied).
The period during which private respondent was to observe the degree of
diligence required of it as a public carrier began from the time the cargo was
unconditionally placed in its charge after the vessel's holds were duly
inspected and passed scrutiny by the shipper, up to and until the vessel
reached its destination and its hull was reexamined by the consignee, but prior
to unloading. This is clear from the limitation clause agreed upon by the parties
in the Addendum to the standard "GENCON" time charter-party which
provided for an F.I.O.S., meaning, that the loading, stowing, trimming and
discharge of the cargo was to be done by the charterer, free from all risk and
expense to the carrier. 35 Moreover, a shipowner is liable for damage to the cargo
resulting from improper stowage only when the stowing is done by stevedores
employed by him, and therefore under his control and supervision, not when the
same is done by the consignee or stevedores under the employ of the latter. 36
Article 1734 of the New Civil Code provides that common carriers are not
responsible for the loss, destruction or deterioration of the goods if caused by
the charterer of the goods or defects in the packaging or in the containers. The
Code of Commerce also provides that all losses and deterioration which the
goods may suffer during the transportation by reason of fortuitous event, force
majeure, or the inherent defect of the goods, shall be for the account and risk
of the shipper, and that proof of these accidents is incumbent upon the
carrier. 37 The carrier, nonetheless, shall be liable for the loss and damage
resulting from the preceding causes if it is proved, as against him, that they arose
through his negligence or by reason of his having failed to take the precautions
which usage has established among careful persons. 38
estimate made by them after the fertilizer was discharged from the vessel and
segregated from the rest of the cargo.
The Court notes that it was in the month of July when the vessel arrived port
and unloaded her cargo. It rained from time to time at the harbor area while the
cargo was being discharged according to the supply officer of PPI, who also
testified that it was windy at the waterfront and along the shoreline where the
dump trucks passed enroute to the consignee's warehouse.
Indeed, we agree with respondent carrier that bulk shipment of highly soluble
goods like fertilizer carries with it the risk of loss or damage. More so, with a
variable weather condition prevalent during its unloading, as was the case at
bar. This is a risk the shipper or the owner of the goods has to face. Clearly,
respondent carrier has sufficiently proved the inherent character of the goods
which makes it highly vulnerable to deterioration; as well as the inadequacy of
its packaging which further contributed to the loss. On the other hand, no proof
was adduced by the petitioner showing that the carrier was remise in the
exercise of due diligence in order to minimize the loss or damage to the goods
it carried.
WHEREFORE, the petition is DISMISSED. The assailed decision of the Court
of Appeals, which reversed the trial court, is AFFIRMED. Consequently, Civil
Case No. 98623 of the then Court of the First Instance, now Regional Trial
Court, of Manila should be, as it is hereby DISMISSED.
Costs against petitioner.
SO ORDERED.
MR.
&
MRS.
ENGRACIO
FABRE,
JR.* and
PORFIRIO
CABIL, petitioners, vs. COURT OF APPEALS, THE WORD FOR
THE WORLD CHRISTIAN FELLOWSHIP, INC., AMYLINE
ANTONIO, JOHN RICHARDS, GONZALO GONZALES, VICENTE
V. QUE, JR., ICLI CORDOVA, ARLENE GOJOCCO, ALBERTO
ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA,
YOLANDA CORDOVA, NOEL ROQUE, EDWARD TAN,
ERNESTO NARCISO, ENRIQUETA LOCSIN, FRANCIS NORMAN
O. LOPEZ, JULIUS CAESAR GARCIA, ROSARIO MA. V. ORTIZ,
MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO MARA-MARA,
TERESITA REGALA, MELINDA TORRES, MARELLA MIJARES,
JOSEFA CABATINGAN, MARA NADOC, DIANE MAYO, TESS
PLATA, MAYETTE JOCSON, ARLENE Y. MORTIZ, LIZA MAYO,
CARLOS
RANARIO,
ROSAMARIA
T.
RADOC
and
BERNADETTE FERRER, respondents.
DECISION
MENDOZA, J.:
and EDSA until 8:00 oclock in the evening. Petitioner Porfirio Cabil drove
the minibus.
The usual route to Caba, La Union was through Carmen,
Pangasinan. However, the bridge at Carmen was under repair, so that
petitioner Cabil, who was unfamiliar with the area (it being his first trip to La
Union), was forced to take a detour through the town of Ba-ay in Lingayen,
Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve
on the highway, running on a south to east direction, which he described as
siete. The road was slippery because it was raining, causing the bus, which
was running at the speed of 50 kilometers per hour, to skid to the left road
shoulder. The bus hit the left traffic steel brace and sign along the road and
rammed the fence of one Jesus Escano, then turned over and landed on its
left side, coming to a full stop only after a series of impacts. The bus came
to rest off the road. A coconut tree which it had hit fell on it and smashed its
front portion.
Several passengers were injured. Private respondent Amyline Antonio
was thrown on the floor of the bus and pinned down by a wooden seat
which came off after being unscrewed. It took three persons to safely
remove her from this position. She was in great pain and could not move.
The driver, petitioner Cabil, claimed he did not see the curve until it
was too late. He said he was not familiar with the area and he could not
have seen the curve despite the care he took in driving the bus, because it
was dark and there was no sign on the road. He said that he saw the curve
when he was already within 15 to 30 meters of it. He allegedly slowed
down to 30 kilometers per hour, but it was too late.
The Lingayen police investigated the incident the next day, November
3, 1984. On the basis of their finding they filed a criminal complaint against
the driver, Porfirio Cabil. The case was later filed with the Lingayen
Regional Trial Court. Petitioners Fabre paid Jesus Escano P1,500.00 for
the damage to the latters fence. On the basis of Escanos affidavit of
desistance the case against petitioners Fabre was dismissed.
Amyline Antonio, who was seriously injured, brought this case in the
RTC of Makati, Metro Manila. As a result of the accident, she is now
suffering from paraplegia and is permanently paralyzed from the waist
down.During the trial she described the operations she underwent and
adduced evidence regarding the cost of her treatment and
therapy. Immediately after the accident, she was taken to the Nazareth
Hospital in Ba-ay, Lingayen. As this hospital was not adequately equipped,
she was transferred to the Sto. Nio Hospital, also in the town of Ba-ay,
where she was given sedatives. An x-ray was taken and the damage to her
spine was determined to be too severe to be treated there. She was
therefore brought to Manila, first to the Philippine General Hospital and
later to the Makati Medical Center where she underwent an operation to
correct the dislocation of her spine.
In its decision dated April 17, 1989, the trial court found that:
No convincing evidence was shown that the minibus was properly checked for
travel to a long distance trip and that the driver was properly screened and tested
before being admitted for employment. Indeed, all the evidence presented have
shown the negligent act of the defendants which ultimately resulted to the accident
subject of this case.
Accordingly, it gave judgment for private respondents holding:
Considering that plaintiffs Word for the World Christian Fellowship, Inc. and Ms.
Amyline Antonio were the only ones who adduced evidence in support of their
claim for damages, the Court is therefore not in a position to award damages to the
other plaintiffs.
WHEREFORE, premises considered, the Court hereby renders judgment against
defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y Jamil pursuant to
articles 2176 and 2180 of the Civil Code of the Philippines and said defendants are
ordered to pay jointly and severally to the plaintiffs the following amount:
1) P93,657.11 as compensatory and actual damages;
2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff
Amyline Antonio;
3) P20,000.00 as moral damages;
4) P20,000.00 as exemplary damages; and
5) 25% of the recoverable amount as attorneys fees;
6) Costs of suit.
SO ORDERED.
The Court of Appeals affirmed the decision of the trial court with
respect to Amyline Antonio but dismissed it with respect to the other
plaintiffs on the ground that they failed to prove their respective claims. The
Court of Appeals modified the award of damages as follows:
1) P93,657.11 as actual damages;
2) P600,000.00 as compensatory damages;
3) P50,000.00 as moral damages;
4) P20,000.00 as exemplary damages;
5) P10,000.00 as attorneys fees; and
6) Costs of suit.
The Court of Appeals sustained the trial courts finding that petitioner
Cabil failed to exercise due care and precaution in the operation of his
vehicle considering the time and the place of the accident. The Court of
Appeals held that the Fabres were themselves presumptively
negligent. Hence, this petition. Petitioners raise the following issues:
I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.
II. WHETHER OR NOT PETITIONERS WERE LIABLE FOR THE INJURIES
SUFFERED BY PRIVATE RESPONDENTS.
III. WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE
POSITIVE, UP TO WHAT EXTENT.
origin and nature, nevertheless the act that breaks the contract may be
also a tort.[2] In either case, the question is whether the bus driver,
petitioner Porfirio Cabil, was negligent.
The finding that Cabil drove his bus negligently, while his employer,
the Fabres, who owned the bus, failed to exercise the diligence of a good
father of the family in the selection and supervision of their employee is
fully supported by the evidence on record. These factual findings of the two
courts we regard as final and conclusive, supported as they are by the
evidence. Indeed, it was admitted by Cabil that on the night in question, it
was raining, and, as a consequence, the road was slippery, and it was
dark. He averred these facts to justify his failure to see that there lay a
sharp curve ahead. However, it is undisputed that Cabil drove his bus at
the speed of 50 kilometers per hour and only slowed down when he
noticed the curve some 15 to 30 meters ahead.[3] By then it was too late for
him to avoid falling off the road. Given the conditions of the road and
considering that the trip was Cabils first one outside of Manila, Cabil should
have driven his vehicle at a moderate speed. There is testimony[4] that the
vehicles passing on that portion of the road should only be running 20
kilometers per hour, so that at 50 kilometers per hour, Cabil was running at
a very high speed.
Considering the foregoing the fact that it was raining and the road was
slippery, that it was dark, that he drove his bus at 50 kilometers an hour
when even on a good day the normal speed was only 20 kilometers an
hour, and that he was unfamiliar with the terrain, Cabil was grossly
negligent and should be held liable for the injuries suffered by private
respondent Amyline Antonio.
Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave
rise to the presumption that his employers, the Fabres, were themselves
negligent in the selection and supervision of their employee.
Due diligence in selection of employees is not satisfied by finding that
the applicant possessed a professional drivers license. The employer
should also examine the applicant for his qualifications, experience and
record of service.[5] Due diligence in supervision, on the other hand,
requires the formulation of rules and regulations for the guidance of
employees and the issuance of proper instructions as well as actual
implementation and monitoring of consistent compliance with the rules.[6]
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La
Union, apparently did not consider the fact that Cabil had been driving for
school children only, from their homes to the St. Scholasticas College in
Metro Manila.[7] They had hired him only after a two-week
apprenticeship. They had tested him for certain matters, such as whether
he could remember the names of the children he would be taking to school,
which were irrelevant to his qualification to drive on a long distance travel,
especially considering that the trip to La Union was his first. The existence
of hiring procedures and supervisory policies cannot be casually invoked to
overturn the presumption of negligence on the part of an employer.[8]
Petitioners argue that they are not liable because (1) an earlier
departure (made impossible by the congregations delayed meeting) could
have averted the mishap and (2) under the contract, the WWCF was
directly responsible for the conduct of the trip. Neither of these contentions
hold water. The hour of departure had not been fixed. Even if it had been,
the delay did not bear directly on the cause of the accident. With respect to
the second contention, it was held in an early case that:
[A] person who hires a public automobile and gives the driver directions as to the
place to which he wishes to be conveyed, but exercises no other control over the
conduct of the driver, is not responsible for acts of negligence of the latter or
prevented from recovering for injuries suffered from a collision between the
automobile and a train, caused by the negligence either of the locomotive engineer
or the automobile driver.[9]
As already stated, this case actually involves a contract of
carriage. Petitioners, the Fabres, did not have to be engaged in the
business of public transportation for the provisions of the Civil Code on
common carriers to apply to them. As this Court has held:[10]
Art. 1732. Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by
land, water, or air for compensation, offering their services to the public.
The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity (in local idiom, as a
sideline). Article 1732 also carefully avoids making any distinction between
a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic
or unscheduled basis. Neither does Article 1732 distinguish between a
carrier offering its services to the general public, i.e., the general
the drivers as well as the owners of the two vehicles are jointly and severally liable
for damages. Some members of the Court, though, are of the view that under the
circumstances they are liable on quasi-delict.[20]
It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of
Appeals[21] this Court exonerated the jeepney driver from liability to the
injured passengers and their families while holding the owners of the
jeepney jointly and severally liable, but that is because that case was
expressly tried and decided exclusively on the theory of culpa
contractual. As this Court there explained:
The trial court was therefore right in finding that Manalo [the driver] and spouses
Mangune and Carreon [the jeepney owners] were negligent. However, its ruling
that spouses Mangune and Carreon are jointly and severally liable with Manalo is
erroneous. The driver cannot be held jointly and severally liable with the carrier in
case of breach of the contract of carriage. The rationale behind this is readily
discernible. Firstly, the contract of carriage is between the carrier and the
passenger, and in the event of contractual liability, the carrier is exclusively
responsible therefore to the passenger, even if such breach be due to the negligence
of his driver (see Viluan v. The Court of Appeals, et al., G.R. Nos. L-21477-81,
April 29, 1966, 16 SCRA 742) . . .[22]
As in the case of BLTB, private respondents in this case and her coplaintiffs did not stake out their claim against the carrier and the driver
exclusively on one theory, much less on that of breach of contract
alone. After all, it was permitted for them to allege alternative causes of
action and join as many parties as may be liable on such causes of
action[23] so long as private respondent and her co-plaintiffs do not recover
twice for the same injury. What is clear from the cases is the intent of the
plaintiff there to recover from both the carrier and the driver, thus justifying
the holding that the carrier and the driver were jointly and severally liable
because their separate and distinct acts concurred to produce the same
injury.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with
MODIFICATION as to the award of damages. Petitioners are ORDERED to
PAY jointly and severally the private respondent Amyline Antonio the
following amounts:
1) P93,657.11 as actual damages;
SO ORDERED.
1734. In those cases where the presumption is applied, the common carrier
must prove that it exercised extraordinary diligence in order to overcome the
presumption . . . The presumption of negligence was raised against petitioner.
It was petitioner's burden to overcome it. Thus, contrary to her assertion,
private respondent need not introduce any evidence to prove her negligence.
Her own failure to adduce sufficient proof of extraordinary diligence made the
presumption conclusive against her.
3. ID.; ID.; HIJACKING OF GOODS; CARRIER PRESUMED NEGLIGENT;
HOW CARRIER ABSOLVED FROM LIABILITY. In De Guzman vs. Court of
Appeals, the Court held that hijacking, not being included in the provisions of
Article 1734, must be dealt with under the provisions of Article 1735 and thus,
the common carrier is presumed to have been at fault or negligent. To
exculpate the carrier from liability arising from hijacking, he must prove that the
robbers or the hijackers acted with grave or irresistible threat, violence, or
force. This is in accordance with Article 1745 of the Civil Code which provides:
"Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy . . . (6) That the common
carrier's liability for acts committed by thieves, or of robbers who do not act
with grave or irresistible threat, violences or force, is dispensed with or
diminished"; In the same case, the Supreme Court also held that: "Under
Article 1745 (6) above, a common carrier is held responsible and will not be
allowed to divest or to diminish such responsibility even for acts of strangers
like thieves or robbers, except where such thieves or robbers in fact acted
"with grave of irresistible threat, violence of force," We believe and so hold that
the limits of the duty of extraordinary diligence in the vigilance over the goods
carried are reached where the goods are lost as a result of a robbery which is
attended by "grave or irresistible threat, violence or force."
4. REMEDIAL LAW; EVIDENCE; JUDICIAL ADMISSIONS CONCLUSIVE.
In this case, petitioner herself has made the admission that she was in the
trucking business, offering her trucks to those with cargo to move. Judicial
admissions are conclusive and no evidence is required to prove the same.
5. ID.; ID.; BURDEN OF PROOF RESTS WITH PARTY WHO ALLEGES A
FACT. Petitioner presented no other proof of the existence of the contract of
lease. He who alleges a fact has the burden of proving it.
6. ID.; ID.; AFFIDAVITS NOT CONSIDERED BEST EVIDENCE IF AFFIANTS
AVAILABLE AS WITNESSES. While the affidavit of Juanito Morden, the
truck helper in the hijacked truck, was presented as evidence in court, he
himself was a witness as could be gleaned from the contents of the petition.
Affidavits are not considered the best evidence if the affiants are available as
witnesses.
7. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT IS WHAT
LAW DEFINES IT TO BE. Granting that the said evidence were not selfserving, the same were not sufficient to prove that the contract was one of
lease. It must be understood that a contract is what the law defines it to be and
not what it is called by the contracting parties.
DECISION
CAMPOS, JR., J p:
This is a petition for review on certiorari of the decision ** of the Court of
Appeals in "RODOLFO A. CIPRIANO, doing business under the name
CIPRIANO TRADING ENTERPRISES plaintiff-appellee, vs. ESTRELLITA M.
BASCOS, doing business under the name of BASCOS TRUCKING,
defendant-appellant," C.A.-G.R. CV No. 25216, the dispositive portion of which
is quoted hereunder:
"PREMISES considered, We find no reversible error in the decision appealed
from, which is hereby affirmed in toto. Costs against appellant." 1
The facts, as gathered by this Court, are as follows:
Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for
short) entered into a hauling contract 2 with Jibfair Shipping Agency
Corporation whereby the former bound itself to haul the latter's 2,000 m/tons of
soya bean meal from Magallanes Drive, Del Pan, Manila to the warehouse of
Purefoods Corporation in Calamba, Laguna. To carry out its obligation,
CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita Bascos
(petitioner) to transport and to deliver 400 sacks of soya bean meal worth
P156,404.00 from the Manila Port Area to Calamba, Laguna at the rate of
P50.00 per metric ton. Petitioner failed to deliver the said cargo. As a
consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount
of the lost goods in accordance with the contract which stated that:
"1. CIPTRADE shall be held liable and answerable for any loss in bags due to
theft, hijacking and non-delivery or damages to the cargo during transport at
market value, . . ." 3
of 12% per cent per annum to be counted from December 4, 1986 until fully
paid;
"4. That this action is one of those specifically mentioned in Sec. 1, Rule 57 the
Rules of Court, whereby a writ of preliminary attachment may lawfully issue,
namely:
"(e) in an action against a party who has removed or disposed of his property,
or is about to do so, with intent to defraud his creditors;"
SO ORDERED." 6
5. That there is no sufficient security for the claim sought to be enforced by the
present action;
Petitioner appealed to the Court of Appeals but respondent Court affirmed the
trial court's judgment.
6. That the amount due to the plaintiff in the above-entitled case is above all
legal counterclaims;"
Consequently, petitioner filed this petition where she makes the following
assignment of errors; to wit:
The trial court granted the writ of preliminary attachment on February 17, 1987.
In her answer, petitioner interposed the following defenses: that there was no
contract of carriage since CIPTRADE leased her cargo truck to load the cargo
from Manila Port Area to Laguna; that CIPTRADE was liable to petitioner in the
amount of P11,000.00 for loading the cargo; that the truck carrying the cargo
was hijacked along Canonigo St., Paco, Manila on the night of October 21,
1988; that the hijacking was immediately reported to CIPTRADE and that
petitioner and the police exerted all efforts to locate the hijacked properties;
that after preliminary investigation, an information for robbery and carnapping
were filed against Jose Opriano, et al.; and that hijacking, being a force
majeure, exculpated petitioner from any liability to CIPTRADE.
After trial, the trial court rendered a decision *** the dispositive portion of which
reads as follows:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendant ordering the latter to pay the former:
1. The amount of ONE HUNDRED FIFTY-SIX THOUSAND FOUR HUNDRED
FOUR PESOS (P156,404.00) as an (sic) for actual damages with legal interest
Bascos Trucking and that said admission dispensed with the presentation by
private respondent, Rodolfo Cipriano, of proofs that petitioner was a common
carrier. The respondent Court also adopted in toto the trial court's decision that
petitioner was a common carrier, Moreover, both courts appreciated the
following pieces of evidence as indicators that petitioner was a common
carrier: the fact that the truck driver of petitioner, Maximo Sanglay, received
the cargo consisting of 400 bags of soya bean meal as evidenced by a cargo
receipt signed by Maximo Sanglay; the fact that the truck helper, Juanito
Morden, was also an employee of petitioner; and the fact that control of the
cargo was placed in petitioner's care.
In disputing the conclusion of the trial and appellate courts that petitioner was
a common carrier, she alleged in this petition that the contract between her
and Rodolfo A. Cipriano, representing CIPTRADE, was lease of the truck. She
cited as evidence certain affidavits which referred to the contract as "lease".
These affidavits were made by Jesus Bascos 8 and by petitioner herself. 9
She further averred that Jesus Bascos confirmed in his testimony his
statement that the contract was a lease contract. 10 She also stated that: she
was not catering to the general public. Thus, in her answer to the amended
complaint, she said that she does business under the same style of A.M.
Bascos Trucking, offering her trucks for lease to those who have cargo to
move, not to the general public but to a few customers only in view of the fact
that it is only a small business. 11
We agree with the respondent Court in its finding that petitioner is a common
carrier.
Article 1732 of the Civil Code defines a common carrier as "(a) person,
corporation or firm, or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water or air, for
compensation, offering their services to the public." The test to determine a
common carrier is "whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general public as his
occupation rather than the quantity or extent of the business transacted." 12 In
this case, petitioner herself has made the admission that she was in the
trucking business, offering her trucks to those with cargo to move. Judicial
admissions are conclusive and no evidence is required to prove the same. 13
But petitioner argues that there was only a contract of lease because they offer
their services only to a select group of people and because the private
respondents, plaintiffs in the lower court, did not object to the presentation of
In this case, petitioner alleged that hijacking constituted force majeure which
exculpated her from liability for the loss of the cargo. In De Guzman vs. Court
of Appeals, 20 the Court held that hijacking, not being included in the
provisions of Article 1734, must be dealt with under the provisions of Article
1735 and thus, the common carrier is presumed to have been at fault or
negligent. To exculpate the carrier from liability arising from hijacking, he must
prove that the robbers or the hijackers acted with grave or irresistible threat,
violence, or force. This is in accordance with Article 1745 of the Civil Code
which provides:
"Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy;
xxx xxx xxx
(6) That the common carrier's liability for acts committed by thieves, or of
robbers who do not act with grave or irresistible threat, violences or force, is
dispensed with or diminished;"
In the same case, 21 the Supreme Court also held that:
"Under Article 1745 (6) above, a common carrier is held responsible and will
not be allowed to divest or to diminish such responsibility even for acts of
strangers like thieves or robbers except where such thieves or robbers in fact
acted with grave or irresistible threat, violence or force. We believe and so hold
that the limits of the duty of extraordinary diligence in the vigilance over the
goods carried are reached where the goods are lost as a result of a robbery
which is attended by "grave or irresistible threat, violence or force."
To establish grave and irresistible force, petitioner presented her accusatory
affidavit, 22 Jesus Bascos' affidavit, 23 and Juanito Morden's 24 "Salaysay".
However, both the trial court and the Court of Appeals have concluded that
these affidavits were not enough to overcome the presumption. Petitioner's
affidavit about the hijacking was based on what had been told her by Juanito
Morden. It was not a first-hand account. While it had been admitted in court for
lack of objection on the part of private respondent, the respondent Court had
discretion in assigning weight to such evidence. We are bound by the
conclusion of the appellate court. In a petition for review on certiorari, We are
not to determine the probative value of evidence but to resolve questions of
law. Secondly, the affidavit of Jesus Bascos did not dwell on how the hijacking
took place. Thirdly, while the affidavit of Juanito Morden, the truck helper in the
hijacked truck, was presented as evidence in court, he himself was a witness
as could be gleaned from the contents of the petition. Affidavits are not
considered the best evidence if the affiants are available as witnesses. 25 The
subsequent filing of the information for carnapping and robbery against the
accused named in said affidavits did not necessarily mean that the contents of
the affidavits were true because they were yet to be determined in the trial of
the criminal cases.
The presumption of negligence was raised against petitioner. It was petitioner's
burden to overcome it. Thus, contrary to her assertion, private respondent
need not introduce any evidence to prove her negligence. Her own failure to
adduce sufficient proof of extraordinary diligence made the presumption
conclusive against her.
Having affirmed the findings of the respondent Court on the substantial issues
involved, We find no reason to disturb the conclusion that the motion to
lift/dissolve the writ of preliminary attachment has been rendered moot and
academic by the decision on the merits.
In the light of the foregoing analysis, it is Our opinion that the petitioner's claim
cannot be sustained. The petition is DISMISSED and the decision of the Court
of Appeals is hereby AFFIRMED.
SO ORDERED.
In the instant case, plaintiff did not present any single evidence that would prove
that defendant is a common carrier.
xxxxxxxxx
Accordingly, the application of the law on common carriers is not warranted and
the presumption of fault or negligence on the part of a common carrier in case of
loss, damage or deterioration of goods during transport under 1735 of the Civil
Code is not availing.
VITUG, J.:
Thus, the laws governing the contract between the owner of the cargo to whom the
plaintiff was subrogated and the owner of the vehicle which transports the cargo
are the laws on obligation and contract of the Civil Code as well as the law on
quasi delicts.
Under the law on obligation and contract, negligence or fault is not presumed. The
law on quasi delict provides for some presumption of negligence but only upon the
attendance of some circumstances. Thus, Article 2185 provides:
Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving
a motor vehicle has been negligent if at the time of the mishap, he was violating
any traffic regulation.
Evidence for the plaintiff shows no proof that defendant was violating any traffic
regulation. Hence, the presumption of negligence is not obtaining.
Considering that plaintiff failed to adduce evidence that defendant is a common
carrier and defendants driver was the one negligent, defendant cannot be made
liable for the damages of the subject cargoes.
[2]
The Court of Appeals rejected the appeal of petitioner and ruled in favor of
GPS. The appellate court, in its decision of 10 June 1999, discoursed, among
other things, that [4]
Under Section 1 of Rule 131 of the Rules of Court, it is provided that Each party
must prove his own affirmative allegation, xxx.
"x x x in order for the presumption of negligence provided for under the law
governing common carrier (Article 1735, Civil Code) to arise, the appellant must
first prove that the appellee is a common carrier. Should the appellant fail to prove
that the appellee is a common carrier, the presumption would not arise;
consequently, the appellant would have to prove that the carrier was negligent.
"x x x x x x x x x
"Because it is the appellant who insists that the appellees can still be considered as
a common carrier, despite its `limited clientele, (assuming it was really a common
carrier), it follows that it (appellant) has the burden of proving the same. It
(plaintiff-appellant) `must establish his case by a preponderance of evidence,
which means that the evidence as a whole adduced by one side is superior to that
of the other. (Summa Insurance Corporation vs. Court of Appeals, 243 SCRA
175).This, unfortunately, the appellant failed to do -- hence, the dismissal of the
plaintiffs complaint by the trial court is justified.
"x x x x x x x x x
"Based on the foregoing disquisitions and considering the circumstances that the
appellee trucking corporation has been `its exclusive contractor, hauler since 1970,
defendant has no choice but to comply with the directive of its principal, the
inevitable conclusion is that the appellee is a private carrier.
II
III
[9]
"x x x x x x x x x
[10]
"x x x the lower court correctly ruled that 'the application of the law on common
carriers is not warranted and the presumption of fault or negligence on the part of a
common carrier in case of loss, damage or deterioration of good[s] during transport
under [article] 1735 of the Civil Code is not availing.' x x x.
"Finally, We advert to the long established rule that conclusions and findings of
fact of a trial court are entitled to great weight on appeal and should not be
disturbed unless for strong and valid reasons."
[5]
[12]
[13]
[7]
position as he would have been in had the contract not been made; or his
restitution interest, which is his interest in having restored to him any benefit that
he has conferred on the other party. Indeed, agreements can accomplish little,
either for their makers or for society, unless they are made the basis for
action. The effect of every infraction is to create a new duty, that is, to make
recompense to the one who has been injured by the failure of another to observe
his contractual obligation unless he can show extenuating circumstances, like
proof of his exercise of due diligence (normally that of the diligence of a good
father of a family or, exceptionally by stipulation or by law such as in the case of
common carriers, that of extraordinary diligence) or of the attendance of fortuitous
event, to excuse him from his ensuing liability.
[14]
by the evidence; and (c) the indicated negligence is within the scope of the
defendant's duty to the plaintiff. Thus, it is not applicable when an unexplained
accident may be attributable to one of several causes, for some of which the
defendant could not be responsible.
[21]
[22]
[15]
[16]
[18]
[20]
WHEREFORE, the order, dated 30 April 1996, of the Regional Trial Court,
Branch 66, of Makati City, and the decision, dated 10 June 1999, of the Court of
Appeals, are AFFIRMED only insofar as respondent Lambert M. Eroles is
concerned, but said assailed order of the trial court and decision of the appellate
court are REVERSED as regards G.P. Sarmiento Trucking Corporation which,
instead, is hereby ordered to pay FGU Insurance Corporation the value of the
damaged and lost cargoes in the amount of P204,450.00. No costs.
SO ORDERED.
of carriage and damages, which was docketed as Civil Case No. 92-133 and
raffled to Branch 59 of the Regional Trial Court of Makati City.
In her complaint, petitioner alleged that her failure to join Jewels of Europe
was due to respondents fault since it did not clearly indicate the departure date on
the plane ticket. Respondent was also negligent in informing her of the wrong flight
schedule through its employee Menor. She insisted that the British Pageant was
merely a substitute for the Jewels of Europe tour, such that the cost of the former
should be properly set-off against the sum paid for the latter.
[2]
ESTELA
L.
CRISOSTOMO, petitioner, vs. THE
COURT
OF
APPEALS and CARAVAN TRAVEL & TOURS INTERNATIONAL,
INC., respondents.
DECISION
YNARES-SANTIAGO, J.:
Lastly, respondent maintained that the British Pageant was not a substitute
for the package tour that petitioner missed. This tour was independently procured
by petitioner after realizing that she made a mistake in missing her flight for Jewels
of Europe. Petitioner was allowed to make a partial payment of only US$300.00 for
the second tour because her niece was then an employee of the travel
agency. Consequently, respondent prayed that petitioner be ordered to pay the
balance of P12,901.00 for the British Pageant package tour.
After due proceedings, the trial court rendered a decision, the dispositive part
of which reads:
[4]
Subsequently, Menor prevailed upon petitioner to take another tour the British
Pageant which included England, Scotland and Wales in its itinerary. For this tour
package, petitioner was asked anew to pay US$785.00 or P20,881.00 (at the then
prevailing exchange rate of P26.60). She gave respondent US$300 or P7,980.00
as partial payment and commenced the trip in July 1991.
Upon petitioners return from Europe, she demanded from respondent the
reimbursement of P61,421.70, representing the difference between the sum she
paid for Jewels of Europe and the amount she owed respondent for the British
Pageant tour. Despite several demands, respondent company refused to
reimburse the amount, contending that the same was non-refundable. Petitioner
was thus constrained to file a complaint against respondent for breach of contract
[1]
2. Ordering the defendant to pay the plaintiff the amount of Five Thousand
(P5,000.00) Pesos as and for reasonable attorneys fees;
3. Dismissing the defendants counterclaim, for lack of merit; and
4. With costs against the defendant.
SO ORDERED.
[5]
The trial court held that respondent was negligent in erroneously advising
petitioner of her departure date through its employee, Menor, who was not
presented as witness to rebut petitioners testimony. However, petitioner should
have verified the exact date and time of departure by looking at her ticket and
should have simply not relied on Menors verbal representation. The trial court thus
declared that petitioner was guilty of contributory negligence and accordingly,
deducted 10% from the amount being claimed as refund.
Respondent appealed to the Court of Appeals, which likewise found both
parties to be at fault. However, the appellate court held that petitioner is more
negligent than respondent because as a lawyer and well-traveled person, she
should have known better than to simply rely on what was told to her. This being
so, she is not entitled to any form of damages. Petitioner also forfeited her right to
the Jewels of Europe tour and must therefore pay respondent the balance of the
price for the British Pageant tour. The dispositive portion of the judgment appealed
from reads as follows:
WHEREFORE, premises considered, the decision of the Regional Trial Court dated
October 26, 1995 is hereby REVERSED and SET ASIDE. A new judgment is hereby
ENTERED requiring the plaintiff-appellee to pay to the defendant-appellant the amount of
P12,901.00, representing the balance of the price of the British Pageant Package Tour, the
same to earn legal interest at the rate of SIX PERCENT (6%) per annum, to be computed
from the time the counterclaim was filed until the finality of this decision. After this
decision becomes final and executory, the rate of TWELVE PERCENT (12%) interest per
annum shall be additionally imposed on the total obligation until payment thereof is
satisfied. The award of attorneys fees is DELETED. Costs against the plaintiff-appellee.
SO ORDERED.
[6]
Upon denial of her motion for reconsideration, petitioner filed the instant
petition under Rule 45 on the following grounds:
[7]
The Honorable Court of Appeals also erred in not ruling that the Jewels of Europe tour was
not indivisible and the amount paid therefor refundable;
III
The Honorable Court erred in not granting to the petitioner the consequential damages due
her as a result of breach of contract of carriage.
[8]
Petitioner contends that respondent did not observe the standard of care
required of a common carrier when it informed her wrongly of the flight schedule.
She could not be deemed more negligent than respondent since the latter is
required by law to exercise extraordinary diligence in the fulfillment of its obligation.
If she were negligent at all, the same is merely contributory and not the proximate
cause of the damage she suffered. Her loss could only be attributed to respondent
as it was the direct consequence of its employees gross negligence.
Petitioners contention has no merit.
By definition, a contract of carriage or transportation is one whereby a certain
person or association of persons obligate themselves to transport persons, things,
or news from one place to another for a fixed price. Such person or association of
persons are regarded as carriers and are classified as private or special carriers
and common or public carriers. A common carrier is defined under Article 1732 of
the Civil Code as persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water or
air, for compensation, offering their services to the public.
[9]
[10]
travel agency include procuring tickets and facilitating travel permits or visas as
well as booking customers for tours.
While petitioner concededly bought her plane ticket through the efforts of
respondent company, this does not mean that the latter ipso facto is a common
carrier. At most, respondent acted merely as an agent of the airline, with whom
petitioner ultimately contracted for her carriage to Europe. Respondents obligation
to petitioner in this regard was simply to see to it that petitioner was properly
booked with the airline for the appointed date and time. Her transport to the place
of destination, meanwhile, pertained directly to the airline.
The object of petitioners contractual relation with respondent is the latters
service of arranging and facilitating petitioners booking, ticketing and
accommodation in the package tour. In contrast, the object of a contract of
carriage is the transportation of passengers or goods. It is in this sense that the
contract between the parties in this case was an ordinary one for services and not
one of carriage. Petitioners submission is premised on a wrong assumption.
The nature of the contractual relation between petitioner and respondent is
determinative of the degree of care required in the performance of the latters
obligation under the contract. For reasons of public policy, a common carrier in a
contract of carriage is bound by law to carry passengers as far as human care and
foresight can provide using the utmost diligence of very cautious persons and with
due regard for all the circumstances. As earlier stated, however, respondent is
not a common carrier but a travel agency. It is thus not bound under the law to
observe extraordinary diligence in the performance of its obligation, as petitioner
claims.
[11]
Since the contract between the parties is an ordinary one for services, the
standard of care required of respondent is that of a good father of a family under
Article 1173 of the Civil Code. This connotes reasonable care consistent with that
which an ordinarily prudent person would have observed when confronted with a
similar situation. The test to determine whether negligence attended the
performance of an obligation is: did the defendant in doing the alleged negligent
act use that reasonable care and caution which an ordinarily prudent person would
have used in the same situation? If not, then he is guilty of negligence.
record. The date and time of departure was legibly written on the plane ticket and
the travel papers were delivered two days in advance precisely so that petitioner
could prepare for the trip. It performed all its obligations to enable petitioner to join
the tour and exercised due diligence in its dealings with the latter.
We agree with respondent.
Respondents failure to present Menor as witness to rebut petitioners
testimony could not give rise to an inference unfavorable to the former. Menor was
already working in France at the time of the filing of the complaint, thereby
making it physically impossible for respondent to present her as a witness. Then
too, even if it were possible for respondent to secure Menors testimony, the
presumption under Rule 131, Section 3(e) would still not apply. The opportunity
and possibility for obtaining Menors testimony belonged to both parties,
considering that Menor was not just respondents employee, but also petitioners
niece. It was thus error for the lower court to invoke the presumption that
respondent willfully suppressed evidence under Rule 131, Section 3(e). Said
presumption would logically be inoperative if the evidence is not intentionally
omitted but is simply unavailable, or when the same could have been obtained by
both parties.
[15]
[16]
In sum, we do not agree with the finding of the lower court that Menors
negligence concurred with the negligence of petitioner and resultantly caused
damage to the latter. Menors negligence was not sufficiently proved, considering
that the only evidence presented on this score was petitioners uncorroborated
narration of the events. It is well-settled that the party alleging a fact has the
burden of proving it and a mere allegation cannot take the place of evidence. If
the plaintiff, upon whom rests the burden of proving his cause of action, fails to
show in a satisfactory manner facts upon which he bases his claim, the defendant
is under no obligation to prove his exception or defense.
[17]
[18]
[12]
[13]
In the case at bar, the lower court found Menor negligent when she allegedly
informed petitioner of the wrong day of departure. Petitioners testimony was
accepted as indubitable evidence of Menors alleged negligent act since
respondent did not call Menor to the witness stand to refute the allegation. The
lower court applied the presumption under Rule 131, Section 3 (e) of the Rules of
Court that evidence willfully suppressed would be adverse if produced and thus
considered petitioners uncontradicted testimony to be sufficient proof of her claim.
[14]
On the other hand, respondent has consistently denied that Menor was
negligent and maintains that petitioners assertion is belied by the evidence on
ordinary care of her concerns. This undoubtedly would require that she at least
read the documents in order to assure herself of the important details regarding
the trip.
The negligence of the obligor in the performance of the obligation renders him
liable for damages for the resulting loss suffered by the obligee. Fault or
negligence of the obligor consists in his failure to exercise due care and prudence
in the performance of the obligation as the nature of the obligation so
demands. There is no fixed standard of diligence applicable to each and every
contractual obligation and each case must be determined upon its particular facts.
The degree of diligence required depends on the circumstances of the specific
obligation and whether one has been negligent is a question of fact that is to be
determined after taking into account the particulars of each case.
[20]
[21]
The lower court declared that respondents employee was negligent. This
factual finding, however, is not supported by the evidence on record. While factual
findings below are generally conclusive upon this court, the rule is subject to
certain exceptions, as when the trial court overlooked, misunderstood, or
misapplied some facts or circumstances of weight and substance which will affect
the result of the case.
[22]
In the case at bar, the evidence on record shows that respondent company
performed its duty diligently and did not commit any contractual breach. Hence,
petitioner cannot recover and must bear her own damage.
WHEREFORE, the instant petition is DENIED for lack of merit. The decision
of the Court of Appeals in CA-G.R. CV No. 51932 is AFFIRMED. Accordingly,
petitioner is ordered to pay respondent the amount of P12,901.00 representing the
balance of the price of the British Pageant Package Tour, with legal interest
thereon at the rate of 6% per annum, to be computed from the time the
counterclaim was filed until the finality of this Decision. After this Decision
becomes final and executory, the rate of 12% per annum shall be imposed until the
obligation is fully settled, this interim period being deemed to be by then an
equivalent to a forbearance of credit.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari of the July 6, 2000 Decision [1] of the Court of
Appeals in CA-G.R. CV No. 55664, which affirmed the judgment[2] of the Regional Trial
Court of Caloocan City, Branch 121, in Civil Case No. C-16120 in so far as it found
petitioner Cargolift Shipping, Inc. (Cargolift) liable, as third-party defendant, for actual
damages in the
[3]
Resolution
[23]
SO ORDERED.
agreement
Skyland
Brokerage,
Inc.,
(Skyland)
entered
into
time
charter
whereby Acuario leased to Skyland its L. Acuario II barge for use by the latter
in transporting electrical posts from Manila to Limay, Bataan. At the same time, Skyland
also entered into a separate contract[5] with petitioner Cargolift, for the latters tugboats to
tow the aforesaid barge.
Regional Trial Court of Caloocan City, where the case was docketed as Civil Case No. CIn accordance with the foregoing contracts, petitioners tugboat M/T Beejay left
the Manila South Harbor on April 1, 1993 with Acuarios barge in tow. It reached
the port of Limay, Bataan on April 3, 1993, whereupon M/T Beejay disengaged and once
Skyland, in turn, filed a third-party complaint[8] against petitioner alleging that it was
again set sail for Manila. Petitioners other tugboat, the M/T Count, remained in Bataan to
at dawn of April 7, 1993 while the barge was docked at the Limay port eight meters away
interrupted for the next two days to give way to the observance of the lenten season. The
from the stone wall. Due to strong winds and large waves, the barge repeatedly hit its hull
unloading of the cargo was concluded on April 12, 1993, by which time M/T Beejay had
on the wall, thus prompting the barge patron to alert the tugboat captain of the M/T Count
gone back to Bataan for the return trip. The M/T Beejay and the barge returned to
to tow the barge farther out to sea. However, the tugboat failed to pull the barge to a safer
distance due to engine malfunction, thereby causing the barge to sustain a hole in its
hull. Fortunately, no part of the cargo was lost even if only half of it had been unloaded at
On the same day, the barge was brought to Acuarios shipyard where it was
that time.[9]
allegedly discovered by Acuarios dry-docking officer, Guillermo Nacu, Jr., that the barge
was listing due to a leak in its hull.According to Nacu, he was informed by the skipper of
On the other hand, petitioner and Skyland denied that the barge had been damaged. One of
the tugboat that the damage was sustained in Bataan. To confirm the same, Nacu ordered
its witnesses, Salvador D. Ocampo, claimed that he was involved in all aspects of the
an underwater survey of the barge and prepared a damage report dated April 14, 1993. No
operation and that no accident of any sort was brought to his knowledge. He alleged that
representative of Skyland was present during the inspection although it was furnished with
the barge patron and tug master made no mention of any maritime casualty during the
clearing of the vessels at the Philippine Ports Authority in Limay, Bataan. The barge was in
good condition and was not damaged when it was turned over to Acuario on April 13,
The barge was consequently dry-docked for repairs at the Western Shipyard from
1993.[10]
April 16 to April 26, 1993. Acuario spent the total sum of P97,021.20 for the repairs. [6]
In due course, the trial court promulgated its decision dated June 10, 1996, the dispositive
Pursuant to its contract with Skyland which provided that (a)ny damage or loss on
the barge due to the fault or negligence of charterers shall be the responsibility of the
(c)harterer or his representative,[7]Acuario wrote Skyland seeking reimbursement of its
repair costs, failing which, it filed a complaint for damages against Skyland before the
award of attorneys fees. Upon denial of its motion for reconsideration,[13] petitioner brought
the instant petition raising the following issues:
I
WHETHER THE COURT OF APPEALS ERRED IN AFFIRMING
THE FINDING OF THE TRIAL COURT THAT L. ACUARIO II
SUSTAINED DAMAGE AND THAT IT WAS SUSTAINED DURING
ITS CHARTER TO RESPONDENT SKYLAND.
II
ASSUMING THAT L. ACUARIO II SUFFERED DAMAGE,
WHETHER THE COURT OF APPEALS ERRED IN UPHOLDING
THE TRIAL COURT DECISION HOLDING PETITIONER LIABLE
THEREFOR.[14]
The trial court gave credence to the testimonies of Acuarios witnesses that the
barge sustained damage while it was being chartered by Skyland. It held that the positive
testimonies of Acuarios witnesses, coupled with documentary evidence detailing the nature
and extent of the damage as well as the repairs done on the barge, should prevail over the
bare denials of Skyland and petitioner. It also noted that two of the latters three witnesses
were not in Limay, Bataan when the incident happened.
On the first assigned error, petitioner is asking this Court to resolve factual issues that have
already been settled by the courts below. The question of whether the barge had been
damaged during its charter to Skyland is a factual matter, the determination of which may
not be generally disturbed on appeal. Questions of fact are not reviewable by this Court
The trial court further held that Skyland was liable under its time charter
agreement with Acuario pursuant to Article 1159 of the Civil Code which states that
contracts have the force of law between the contracting parties. Skyland must bear the
consequences of the tugboats incapacity to respond to the barges request for assistance
because Acuario had no control in the selection of the tugboats used by Skyland. But since
the ultimate fault lies with petitioner, justice demands that the latter reimburse Skyland for
whatever it may be adjudged to pay Acuario.[12]
On the contrary, the factual conclusions reached by the courts below are consistent with the
evidence on record. Acuarios witnesses testified that strong winds and waves caused the
barge to bump into the walls of the pier where it was berthed for unloading. Petitioners
tugboat failed to tow it farther away due to engine breakdown, thus causing the barge to
sustain a hole in its hull. These testimonies were duly supported and corroborated by
Both Skyland and petitioner elevated the matter to the Court of Appeals which,
on July 6, 2000, rendered the assailed Decision affirming the trial court, but deleting the
documentary evidence detailing the damage and repairs done on the barge. [16]
On the other hand, petitioner and Skylands denial that there was inclement weather in the
Consequently, we find no cogent reason to disturb the lower courts finding that
early hours of April 7, 1993 and that the barge sustained no damage on this occasion were
the barge sustained a hole in its hull when petitioners tugboat failed to tow it to a safer
not supported by evidence to overcome the positive allegations of Acuarios witnesses who
distance as the weather changed in the port of Limay. This Court is bound by the factual
were present at the place and time of the incident. The categorical declaration of Acuarios
determinations of the appellate court especially when these are supported by substantial
witnesses regarding the events which led to the damage on the barge shifted the burden of
evidence and merely affirm those of the trial court, [19] as in this case. There is no showing
evidence on petitioner and Skyland. They could have easily disproved Acuarios claims by
here that the inferences made by the Court of Appeals were manifestly mistaken, or that the
presenting competent proof that there was no weather disturbance on that day or, by
appealed judgment was based on a misapprehension of facts, or that the appellate court
presenting the testimony of individuals who have personal knowledge of the events which
overlooked certain relevant, undisputed facts which, if properly considered, would justify a
transpired.
different conclusion.[20] Thus, a reversal of the factual findings in this case is unwarranted.
Moreover, the inability of petitioners and Skylands witnesses to unequivocally declare that
As for the second assigned error, petitioner asserts that it could not be held liable for the
it was still the M/T Count that secured the barge during the resumption of off-loading
damage sustained by Acuarios barge because the latter sought to recover upon its contract
operations casts suspicion on their credibility. As aptly observed by the trial court, such
with Skyland, to which petitioner was not a party. Since it had no contractual relation with
Acuario, only Skyland should be held liable under the contract. Besides, Skyland
[17]
contractually assumed the risk that the tugboat might encounter engine trouble when it
the trial court rightly concluded that petitioners M/T Count indeed encountered mechanical
acknowledged in its contract with petitioner that the latters vessels were in good order and
trouble, as asserted by Acuario. The fact that petitioner did not categorically deny the
in seaworthy condition. At any rate, it was neither negligent in the performance of its
allegation of mechanical trouble only serves to strengthen the trial courts conclusion.
Petitioners assertion that it is contrary to human experience for the barge to have made the
We do not agree.
return trip to Manila if it sustained the alleged damage deserves short shrift. The trial court
found that the damage on the barge was not too extensive as to render it incapable of
It was not Acuario that seeks to hold petitioner liable for the damage to the barge, as the
staying afloat and being used in operation. Neither was it impossible for the barges cargo to
former in fact sued only Skyland pursuant to their charter agreement. It was Skyland that
remain intact and undamaged during the weather disturbance. Apart from the fact that the
impleaded petitioner as third-party defendant considering that Skyland was being held
cargo which consisted of wooden electric poles are, by nature, not easily damaged by
accountable for the damage attributable to petitioner. In other words, petitioner was not
adverse weather,[18] part of it had already been unloaded when the unfortunate incident
sued under Skylands charter agreement with Acuario, but pursuant to its separate
occurred.
undertaking with Skyland. Strictly speaking, therefore, petitioner is not being held liable
under any charter agreement with Acuario.
Consequently, it is not correct for petitioner to assert that Acuario could not recover
that Skyland contractually assumed the risk of any engine trouble that the tugboat may
damages from it due to lack of privity of contract between them. It is not Acuario that is
encounter. Skyland merely procured petitioners towing service but in no way assumed any
seeking damages from petitioner but Skyland, with whom it undoubtedly had a juridical
such risk.
tie. While Acuario could hold Skyland liable under its charter agreement, Skyland in turn
could enforce liability on petitioner based on the latters obligation to Skyland. In other
That petitioners negligence was the proximate cause of the damage to the barge cannot be
doubted. Had its tugboat been serviceable, the barge could have been moved away from the
stone wall with facility. It is too late in the day for petitioner to insist that the proximate
Thus, in the performance of its contractual obligation to Skyland, petitioner was required to
cause of the damage was the barge patrons negligence in not objecting to the position of
observe the due diligence of a good father of the family. This much was held in the old but
the barge by the stone wall. Aside from the fact that the position of the barge is quite
still relevant case of Baer Senior & Co.s Successors v. La Compania Maritima[21] where
understandable since off-loading operations were then still underway,[24] the alleged
the Court explained that a tug and its owners must observe ordinary diligence in the
negligence of the barge patron is a matter that is also being raised for the first time before
this Court.
the performance of the obligation renders him liable for damages for the resulting loss
suffered by the obligee. Fault or negligence of the obligor consists in his failure to exercise
Thus, the damage to the barge could have been avoided had it not been for the tugboats
due care and prudence in the performance of the obligation as the nature of the obligation
inability to tow it away from the stone wall. Considering that a barge has no power of its
so demands.[22]
own and is totally defenseless against the ravages of the sea, it was incumbent upon
petitioner to see to it that it could secure the barge by providing a seaworthy
In the case at bar, the exercise of ordinary prudence by petitioner means ensuring that its
tugboat. Petitioners failure to do so did not only increase the risk that might have been
tugboat is free of mechanical problems. While adverse weather has always been a real
reasonably anticipated during the shipside operation but was the proximate cause of the
threat to maritime commerce, the least that petitioner could have done was to ensure that
damage.[25] Hence, as correctly found by the courts below, it should ultimately be held
the M/T Count or any of its other tugboats would be able to secure the barge at all times
liable therefor.
during the engagement. This is especially true when considered with the fact that Acuarios
barge was wholly dependent upon petitioners tugboat for propulsion. The barge was not
WHEREFORE, the petition is DENIED for lack of merit. The Decision of the Court of
equipped with any engine and needed a tugboat for maneuvering. [23]
Appeals in CA-G.R. CV No. 55664 dated July 6, 2000 and the Resolution dated November
28, 2000, finding petitioner Cargolift Shipping, Inc. liable, as third-party defendant, for
Needless to say, if petitioner only subjected the M/T Count to a more rigid check-up or
inspection, the engine malfunction could have been discovered or avoided. The M/T Count
was exclusively controlled by petitioner and the latter had the duty to see to it that the
tugboat was in good running condition. There is simply no basis for petitioners assertion
SO ORDERED.
persons affected by the representation had the right to rely on his declaration
of ownership and registration. It, therefore, held that the defendant-appellant is
liable because he cannot be permitted to repudiate his own declaration.
(Section 68 [a], Rule 123, and Art. 1431, New Civil Code.).
Against the judgment, the defendant has prosecuted this appeal claiming that
at the time of the accident the relation of employer and employee between the
driver and defendant-appellant was not established, it having been proved at
the trial that the owner of the truck was the Port Brokerage, of which
defendant-appellant was merely a broker. We find no merit or justice in the
above contention. In previous decisions, We already have held that the
registered owner of a certificate of public convenience is liable to the public for
the injuries or damages suffered by passengers or third persons caused by the
operation of said vehicle, even though the same had been transferred to a
third person. (Montoya vs. Ignacio, 94 Phil., 182, 50 Off. Gaz., 108; Roque vs.
Malibay Transit Inc.,1 G. R. No. L- 8561, November 18,1955; Vda. de Medina
vs. Cresencia, 99 Phil., 506, 52 Off. Gaz., [10], 4606.)The principle upon which
this doctrine is based is that in dealing with vehicles registered under the
Public Service Law, the public has the right to assume or presume that the
registered owner is the actual owner thereof, for it would be difficult for the
public to enforce the actions that they may have for injuries caused to them by
the vehicles being negligently operated if the public should be required to
prove who the actual owner is. How would the public or third persons know
against whom to enforce their rights in case of subsequent transfers of the
vehicles? We do not imply by this doctrine, however, that the registered owner
may not recover whatever amount he had paid by virtue of his liability to third
persons from the person to whom he had actually sold, assigned or conveyed
the vehicle.
Under the same principle the registered owner of any vehicle, even if not used
for a public service, should primarily be responsible to the public or to third
persons for injuries caused the latter while the vehicle is being driven on the
highways or streets. The members of the Court are in agreement that the
defendant-appellant should be held liable to plaintiff-appellee for the injuries
occasioned to the latter because of the negligence of the driver even if the
defendant-appellant was no longer the owner of the vehicle at the time of the
damage because he had previously sold it to another. What is the legal basis
for his (defendant-appellant's) liability?.
There is a presumption that the owner of the guilty vehicle is the defendantappellant as he is the registered owner in the Motor Vehicle Office. Should he
not be allowed to prove the truth, that he had sold it to another and thus shift
the responsibility for the injury to the real and actual owner? The defendant
holds the affirmative of this proposition; the trial court held the negative.
The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that no
vehicle may be used or operated upon any public highway unless the same is
properly registered. It has been stated that the system of licensing and the
requirement that each machine must carry a registration number,
conspicuously displayed, is one of the precautions taken to reduce the danger
of injury to pedestrians and other travelers from the careless management of
automobiles, and to furnish a means of ascertaining the identity of persons
violating the laws and ordinances, regulating the speed and operation of
machines upon the highways (2 R. C. L. 1176). Not only are vehicles to be
registered and that no motor vehicles are to be used or operated without being
properly registered for the current year, but that dealers in motor vehicles shall
furnish the Motor Vehicles Office a report showing the name and address of
each purchaser of motor vehicle during the previous month and the
manufacturer's serial number and motor number. (Section 5 [c], Act. No. 3992,
as amended.).
Registration is required not to make said registration the operative act by
which ownership in vehicles is transferred, as in land registration cases,
because the administrative proceeding of registration does not bear any
essential relation to the contract of sale between the parties (Chinchilla vs.
Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of the
vehicle upon any public highway (section 5 [a], Act No. 3992, as
amended).The main aim of motor vehicle registration is to identify the owner
so that if any accident happens, or that any damage or injury is caused by the
vehicles on the public highways, responsibility therefore can be fixed on a
definite individual, the registered owner. Instances are numerous where
vehicles running on public highways caused accidents or injuries to
pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall those
circumstances, so inconvenient or prejudicial to the public, that the motor
vehicle registration is primarily ordained, in the interest of the determination of
persons responsible for damages or injuries caused on public highways.
One of the principal purposes of motor vehicles legislation is
identification of the vehicle and of the operator, in case of accident;
and another is that the knowledge that means of detection are always
available may act as a deterrent from lax observance of the law and of
the rules of conservative and safe operation. Whatever purpose there
may be in these statutes, it is subordinate at the last to the primary
purpose of rendering it certain that the violator of the law or of the rules
of safety shall not escape because of lack of means to discover him."
The purpose of the statute is thwarted, and the displayed number
becomes a "snare and delusion," if courts will entertain such defenses
as that put forward by appellee in this case. No responsible person or
corporation could be held liable for the most outrageous acts of
negligence, if they should be allowed to place a "middleman" between
them and the public, and escape liability by the manner in which they
recompense their servants. (King vs. Brenham Automobile Co., 145 S.
W. 278,279.)
With the above policy in mind, the question that defendant-appellant poses is:
should not be registered owner be allowed at the trial to prove who the actual
and real owner is, and in accordance with such proof escape or evade
responsibility and lay the same on the person actually owning the vehicle? We
hold with the trial court that the laws does not allow him to do so; the law, with
its aim and policy in mind, does not relieve him directly of the responsibility that
the law fixes and places upon him as an incident or consequence of
registration. Were a registered owner allowed to evade responsibility by
proving who the supposed transferee or owner is, it would be easy for him, by
collusion with others or otherwise, to escape said responsibility and transfer
the same to an indefinite person, or to one who possesses no property with
which to respond financially for the damage or injury done. A victim of
recklessness on the public highways is usually without means to discover or
identify the person actually causing the injury or damage. He has no means
other than by a recourse to the registration in the Motor Vehicles Office to
determine who is the owner. The protection that the law aims to extend to him
would become illusory were the registered owner given the opportunity to
escape liability by disproving his ownership. If the policy of the law is to be
enforced and carried out, the registered owner should be allowed to prove the
contrary to the prejudice of the person injured that is, to prove that a third
person or another has become the owner, so that he may thereby be relieved
of the responsibility to the injured person.
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The above policy and application of the law may appear quite harsh and would
seem to conflict with truth and justice. We do not think it is so. A registered
owner who has already sold or transferred a vehicle has the recourse to a
third-party complaint, in the same action brought against him to recover for the
damage or injury done, against the vendee or transferee of the vehicle. The
inconvenience of the suit is no justification for relieving him of liability; said
inconvenience is the price he pays for failure to comply with the registration
that the law demands and requires.
Bengzon, Paras, C.J., Bautista Angelo, Concepcion, Reyes, J. B. L., and Felix,
JJ., concur.
Montemayor, J., concurs in the result.
MELENCIO-HERRERA, J.:
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The controversy in this case will be resolved on the basis of the following facts
and expositions. Prior to April 26, 1963 (the ACCIDENT DATE), Vicente U.
Vidad (VIDAD, for short) was a duly authorized passenger jeepney operator.
Also prior to the ACCIDENT DATE, petitioner Adolfo L. Santos (SANTOS, for
short) was the owner of a passenger jeep, but he had no certificate of public
convenience for the operation of the vehicle as a public passenger jeep.
SANTOS then transferred his jeep to the name of VIDAD so that it could be
operated under the latter's certificate of public convenience. ln other words,
SANTOS became what is known in ordinary parlance as akabit operator. For
the protection of SANTOS, VIDAD executed a re-transfer document to the
former, which was to be a private document presumably to be registered if and
where it was decided that the passenger jeep of SANTOS was to be withdrawn
from the kabit arrangement.
On the ACCIDENT DATE, private respondent Abraham Sibug (SIBUG for
short) was bumped by a passenger jeepney operated by VIDAD and driven by
Severe Gragas. As a result thereof, SIBUG filed a complaint for damages
against VIDAD and Gragas with the Court of First Instance of Manila, Branch
XVII, then presided by Hon. Arsenic Solidum. That Civil Case will hereinafter
be referred to as the BRANCH XVII CASE.
On December 5, 1963, a judgment was rendered by Branch XVII, sentencing
VIDAD and Gragas, jointly and severally, to pay SIBUG the sums of P506.20
as actual damages; P3,000.00 as moral damages; P500.00 as attorney's fees,
and costs. 1
On April 10, 1964, the Sheriff of Manila levied on a motor vehicle, with Plate
No. PUJ-343-64, registered in the name of VIDAD, and scheduled the public
auction sale thereof on May 8,1964.
On April 11, 1964, SANTOS presented a third-party claim with the Sheriff
alleging actual ownership of the motor vehicle levied upon, and stating that
Osmea 9 Phil. 299, 307, "the powers of the Sheriff involve both discretional
power and personal liability." The mentioned discretional power and personal
liability have been further elucidated in Planes and Verdon vs. Madrigal & Co., et
al., 94 Phil. 754, where it was held.
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... provided that the liability of the Philippine Surety & insurance
Co., Inc. shall in no case exceed P6,500.00. Abraham Sibug is
furthermore condemned to pay the Philippine Surety &
Insurance Co., Inc. the same sums it is ordered to pay under
this decision.
The jugdment in the BRANCH X CASE appears to be quite legally unpalatable
For instance, since the undertaking furnished to the Sheriff by the BONDING
COMPANY did not become effective for the reason that the jeep was not sold,
the public sale thereof having been restrained, there was no reason for
promulgating judgment against the BONDING COMPANY. lt has also been
noted that the Complaint against VIDAD was dismissed.
Most important of all, the judgment against SIBUG was inequitable. ln
asserting his rights of ownership to the vehicle in question, SANTOS candidly
admitted his participation in the illegal and pernicious practice in the
transportation business known as the kabit system. Sec.. 20 (g) of the Public
Service Act, then the applicable law, specifically provided:
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... it shall be unlawful for any public service or for the owner,
lessee or operator thereof, without the approval and
authorization of the Commission previously had ... (g) to sell,
alienate, mortgage, encumber or lease its property, franchise,
certificates, privileges, or rights, or any part thereof.
In this case, SANTOS had fictitiously sold the jeepney to VIDAD, who had
become the registered owner and operator of record at the time of the
accident. lt is true that VIDAD had executed a re-sale to SANTOS, but the
document was not registered. Although SANTOS, as the kabit was the true
owner as against VIDAD, the latter, as the registered owner/operator and
grantee of the franchise, is directly and primarily responsible and liable for the
damages caused to SIBUG, the injured party, as a consequence of the
negligent or careless operation of the vehicle. 6 This ruling is based on the
principle that the operator of record is considered the operator of the vehicle in
contemplation of law as regards the public and third persons 7 even if the vehicle
involved in the accident had been sold to another where such sale had not been
approved by the then Public Service Commission. 8 For the same basic reason, as
the vehicle here in question was registered in VIDAD'S name, the levy on
execution against said vehicle should be enforced so that the judgment in the
BRANCH XVII CASE may be satisfied, notwithstanding the fact that the secret
ownership of the vehicle belonged to another. SANTOS, as the kabit should not be
allowed to defeat the levy on his vehicle and to avoid his responsibilities as
a kabit owner for he had led the public to believe that the vehicle belonged to
VIDAD. This is one way of curbing the pernicious kabit system that facilitates the
commission of fraud against the travelling public.
As indicated in the Erezo case, supra, SANTOS' remedy. as the real owner of
the vehicle, is to go against VIDAD, the actual operator who was responsible
for the accident, for the recovery of whatever damages SANTOS may suffer by
reason of the execution. In fact, if SANTOS, as the kabit had been impleaded
as a party defendant in the BRANCH XVII CASE, he should be held jointly and
severally liable with VIDAD and the driver for damages suffered by SIBUG, 9 as
well as for exemplary damages. 10
with the powers and authority of the other court having coequal and coordinate jurisdiction. To rule otherwise, would
indubitably lead to confusion which might hamper or hinder the
proper administration of justice. ... 14
Respondent Court further held that SANTOS may not be permitted to prove his
ownership over a particular vehicle being levied upon but registered in
another's name in a separated action, observing that:
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We gave due course to the Petition for Review on certiorari on December 14,
1966 and considered the case submitted for decision on July 20, 1967.
One of the issues ventilated for resolution is the general question of jurisdiction
of a Court of First Instance to issue, at the instance of a third-party claimant,
an Injunction restraining the execution sale of a passenger jeepney levied
upon by a judgment creditor in another Court of First Instance. The corollary
issue is whether or not the third-party claimant has a right to vindicate his claim
to the vehicle levied upon through a separate action.
Since this case was submitted for decision in July, 1967, this Court, in Arabay,
lnc. vs. Hon. Serafin Salvador, 15speaking through Mr. Justice Ramon Aquino,
succinctly held:
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ESCOLIN, J.:
+. wph!1
"Ex pacto illicito non oritur actio" [No action arises out of an illicit bargain] is the
tune-honored maxim that must be applied to the parties in the case at bar.
Having entered into an illegal contract, neither can seek relief from the courts,
and each must bear the consequences of his acts.
The factual background of this case is undisputed.
Sometime in 1966, the spouses Nicasio M. Ocampo and Francisca Garcia,
herein private respondents, purchased in installment from the Delta Motor
Sales Corporation five (5) Toyota Corona Standard cars to be used as
taxicabs. Since they had no franchise to operate taxicabs, they contracted with
petitioner Lita Enterprises, Inc., through its representative, Manuel Concordia,
for the use of the latter's certificate of public convenience in consideration of an
initial payment of P1,000.00 and a monthly rental of P200.00 per taxicab unit.
To effectuate Id agreement, the aforesaid cars were registered in the name of
petitioner Lita Enterprises, Inc, Possession, however, remained with tile
spouses Ocampo who operated and maintained the same under the name
Acme Taxi, petitioner's trade name.
About a year later, on March 18, 1967, one of said taxicabs driven by their
employee, Emeterio Martin, collided with a motorcycle whose driver, one
Florante Galvez, died from the head injuries sustained therefrom. A criminal
case was eventually filed against the driver Emeterio Martin, while a civil case
for damages was instituted by Rosita Sebastian Vda. de Galvez, heir of the
victim, against Lita Enterprises, Inc., as registered owner of the taxicab in the
latter case, Civil Case No. 72067 of the Court of First Instance of Manila,
petitioner Lita Enterprises, Inc. was adjudged liable for damages in the amount
of P25,000.00 and P7,000.00 for attorney's fees.
This decision having become final, a writ of execution was issued. One of the
vehicles of respondent spouses with Engine No. 2R-914472 was levied upon
and sold at public auction for 12,150.00 to one Sonnie Cortez, the highest
bidder. Another car with Engine No. 2R-915036 was likewise levied upon and
sold at public auction for P8,000.00 to a certain Mr. Lopez.
Thereafter, in March 1973, respondent Nicasio Ocampo decided to register his
taxicabs in his name. He requested the manager of petitioner Lita Enterprises,
Inc. to turn over the registration papers to him, but the latter allegedly refused.
Hence, he and his wife filed a complaint against Lita Enterprises, Inc., Rosita
Sebastian Vda. de Galvez, Visayan Surety & Insurance Co. and the Sheriff of
Manila for reconveyance of motor vehicles with damages, docketed as Civil
Case No. 90988 of the Court of First Instance of Manila. Trial on the merits
ensued and on July 22, 1975, the said court rendered a decision, the
dispositive portion of which reads:
t.hqw
leave them both where it finds them. Upon this premise, it was flagrant error on
the part of both the trial and appellate courts to have accorded the parties relief
from their predicament. Article 1412 of the Civil Code denies them such aid. It
provides:
t.hqw
Its first and second motions for reconsideration having been denied, petitioner
came to Us, praying that:
t.hqw
1. ...
2. ... after legal proceedings, decision be rendered or resolution
be issued, reversing, annulling or amending the decision of
public respondent so that:
(a) the additional paragraph added by the public respondent to
the DECISION of the lower court (CFI) be deleted;
(b) that private respondents be declared liable to petitioner for
whatever amount the latter has paid or was declared liable (in
Civil Case No. 72067) of the Court of First Instance of Manila to
Rosita Sebastian Vda. de Galvez, as heir of the victim Florante
Galvez, who died as a result ot the gross negligence of private
respondents' driver while driving one private respondents'
taxicabs. (p. 39, Rollo.)
Unquestionably, the parties herein operated under an arrangement, comonly
known as the "kabit system", whereby a person who has been granted a
certificate of convenience allows another person who owns motors vehicles to
operate under such franchise for a fee. A certificate of public convenience is a
special privilege conferred by the government . Abuse of this privilege by the
grantees thereof cannot be countenanced. The "kabit system" has been
Identified as one of the root causes of the prevalence of graft and corruption in
the government transportation offices. In the words of Chief Justice
Makalintal, 1 "this is a pernicious system that cannot be too severely condemned. It constitutes an
imposition upon the goo faith of the government.
The principle of in pari delicto is well known not only in this jurisdiction but also
in the United States where common law prevails. Under American jurisdiction,
the doctrine is stated thus: "The proposition is universal that no action arises,
in equity or at law, from an illegal contract; no suit can be maintained for its
specific performance, or to recover the property agreed to be sold or delivered,
or damages for its property agreed to be sold or delivered, or damages for its
violation. The rule has sometimes been laid down as though it was equally
universal, that where the parties are in pari delicto, no affirmative relief of any
kind will be given to one against the other." 3 Although certain exceptions to the
rule are provided by law, We see no cogent reason why the full force of the rule
should not be applied in the instant case.
WHEREFORE, all proceedings had in Civil Case No. 90988 entitled "Nicasio
Ocampo and Francisca P. Garcia, Plaintiffs, versus Lita Enterprises, Inc., et
al., Defendants" of the Court of First Instance of Manila and CA-G.R. No.
59157-R entitled "Nicasio Ocampo and Francisca P. Garica, PlaintiffsAppellees, versus Lita Enterprises, Inc., Defendant-Appellant," of the
Intermediate Appellate Court, as well as the decisions rendered therein are
hereby annuleled and set aside. No costs. SO ORDERED.
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On 22 July 1990, while the jeepney was running northbound along the North
Diversion Road somewhere in Meycauayan, Bulacan, it collided with a tenwheeler-truck owned by petitioner Abelardo Lim and driven by his co-petitioner
Esmadito Gunnaban. Gunnaban owned responsibility for the accident,
explaining that while he was traveling towards Manila the truck suddenly lost
its brakes. To avoid colliding with another vehicle, he swerved to the left until
he reached the center island. However, as the center island eventually came
to an end, he veered farther to the left until he smashed into a Ferroza
automobile, and later, into private respondent's passenger jeepney driven by
one Virgilio Gonzales. The impact caused severe damage to both the Ferroza
and the passenger jeepney and left one (1) passenger dead and many others
wounded.
Petitioner Lim shouldered the costs for hospitalization of the wounded,
compensated the heirs of the deceased passenger, and had the Ferroza
restored to good condition. He also negotiated with private respondent and
On the other hand, petitioner Lim's liability for Gunnaban's negligence was
premised on his want of diligence in supervising his employees. It was
admitted during trial that Gunnaban doubled as mechanic of the ill-fated truck
despite the fact that he was neither tutored nor trained to handle such task.6
Forthwith, petitioners appealed to the Court of Appeals which, on 17 July 1996,
affirmed the decision of the trial court. In upholding the decision of the court a
quo the appeals court concluded that while an operator under thekabit system
could not sue without joining the registered owner of the vehicle as his
principal, equity demanded that the present case be made an
exception.7 Hence this petition.
It is petitioners' contention that the Court of Appeals erred in sustaining the
decision of the trial court despite their opposition to the well-established
doctrine that an operator of a vehicle continues to be its operator as long as he
remains the operator of record. According to petitioners, to recognize an
operator under the kabit system as the real party in interest and to
countenance his claim for damages is utterly subversive of public policy.
Petitioners further contend that inasmuch as the passenger jeepney was
purchased by private respondent for onlyP30,000.00, an award
of P236,000.00 is inconceivably large and would amount to unjust enrichment.8
Petitioners' attempt to illustrate that an affirmance of the appealed decision
could be supportive of the perniciouskabit system does not persuade. Their
labored efforts to demonstrate how the questioned rulings of the courts a
quo are diametrically opposed to the policy of the law requiring operators of
public utility vehicles to secure a certificate of public convenience for their
operation is quite unavailing.
The kabit system is an arrangement whereby a person who has been granted
a certificate of public convenience allows other persons who own motor
vehicles to operate them under his license, sometimes for a fee or percentage
of the earnings.9 Although the parties to such an agreement are not outrightly
penalized by law, thekabit system is invariably recognized as being contrary to
public policy and therefore void and inexistent under Art. 1409 of the Civil
Code.
In the early case of Dizon v. Octavio10 the Court explained that one of the
primary factors considered in the granting of a certificate of public convenience
for the business of public transportation is the financial capacity of the holder
of the license, so that liabilities arising from accidents may be duly
compensated. The kabit system renders illusory such purpose and, worse,
more than the actual loss which he has inflicted and that a plaintiff is entitled to
no more than the just and adequate compensation for the injury suffered. His
recovery is, in the absence of circumstances giving rise to an allowance of
punitive damages, limited to a fair compensation for the harm done. The law
will not put him in a position better than where he should be in had not the
wrong happened.12
In the present case, petitioners insist that as the passenger jeepney was
purchased in 1982 for only P30,000.00 to award damages considerably
greater than this amount would be improper and unjustified. Petitioners are at
best reminded that indemnification for damages comprehends not only the
value of the loss suffered but also that of the profits which the obligee failed to
obtain. In other words, indemnification for damages is not limited todamnum
emergens or actual loss but extends to lucrum cessans or the amount of profit
lost.13
Had private respondent's jeepney not met an accident it could reasonably be
expected that it would have continued earning from the business in which it
was engaged. Private respondent avers that he derives an average income
of P300.00 per day from his passenger jeepney and this earning was included
in the award of damages made by the trial court and upheld by the appeals
court. The award therefore of P236,000.00 as compensatory damages is not
beyond reason nor speculative as it is based on a reasonable estimate of the
total damage suffered by private respondent, i.e. damage wrought upon his
jeepney and the income lost from his transportation business. Petitioners for
their part did not offer any substantive evidence to refute the estimate made by
the courts a quo.
However, we are constrained to depart from the conclusion of the lower courts
that upon the award of compensatory damages legal interest should be
imposed beginning 22 July 1990, i.e. the date of the accident. Upon the
provisions of Art. 2213 of the Civil Code, interest "cannot be recovered upon
unliquidated claims or damages, except when the demand can be established
with reasonable certainty." It is axiomatic that if the suit were for damages,
unliquidated and not known until definitely ascertained, assessed and
determined by the courts after proof, interest at the rate of six percent (6%) per
annum should be from the date the judgment of the court is made (at which
time the quantification of damages may be deemed to be reasonably
ascertained).14
In this case, the matter was not a liquidated obligation as the assessment of
the damage on the vehicle was heavily debated upon by the parties with
PARAS, J.:
"'Ex pacto illicito' non oritur actio" (No action arises out of illicit bargain) is the
time-honored maxim that must be applied to the parties in the case at bar.
Having entered into an illegal contract, neither can seek relief from the courts,
and each must bear the consequences of his acts." (Lita Enterprises vs. IAC,
129 SCRA 81.)
The factual background of this case is undisputed. The same is narrated by
the respondent court in its now assailed decision, as follows:
On May 9, 1975, the defendant bought from the plaintiff a
motorcycle with complete accessories and a sidecar in the total
consideration of P8,000.00 as shown by Invoice No. 144 (Exh.
"A"). Out of the total purchase price the defendant gave a
downpayment of P1,700.00 with a promise that he would pay
plaintiff the balance within sixty days. The defendant, however,
failed to comply with his promise and so upon his own request,
the period of paying the balance was extended to one year in
monthly installments until January 1976 when he stopped
paying anymore. The plaintiff made demands but just the same
the defendant failed to comply with the same thus forcing the
plaintiff to consult a lawyer and file this action for his damage in
the amount of P546.21 for attorney's fees and P100.00 for
expenses of litigation. The plaintiff also claims that as of
February 20, 1978, the total account of the defendant was
already P2,731.06 as shown in a statement of account (Exhibit.
"B"). This amount includes not only the balance of P1,700.00
but an additional 12% interest per annum on the said balance
Eventually, petitioner Teja Marketing and/or Angel Jaucian filed an action for
"Sum of Money with Damages" against private respondent Pedro N. Nale in
the City Court of Naga City. The City Court rendered judgment in favor of
petitioner, the dispositive portion of which reads:
WHEREFORE, decision is hereby rendered dismissing the
counterclaim and ordering the defendant to pay plaintiff the
sum of P1,700.00 representing the unpaid balance of the
purchase price with legal rate of interest from the date of the
filing of the complaint until the same is fully paid; to pay plaintiff
the sum of P546.21 as attorney's fees; to pay plaintiff the sum
of P200.00 as expenses of litigation; and to pay the costs.
SO ORDERED.
On appeal to the Court of First Instance of Camarines Sur, the decision was
affirmed in toto. Private respondent filed a petition for review with the
Intermediate Appellate Court and on July 18, 1983 the said Court promulgated
its decision, the pertinent portion of which reads
However, as the purchase of the motorcycle for operation as a
trimobile under the franchise of the private respondent Jaucian,
pursuant to what is commonly known as the "kabit system",
without the prior approval of the Board of Transportation
(formerly the Public Service Commission) was an illegal
transaction involving the fictitious registration of the motor
vehicle in the name of the private respondent so that he may
traffic with the privileges of his franchise, or certificate of public
convenience, to operate a tricycle service, the parties being in
pari delicto, neither of them may bring an action against the
other to enforce their illegal contract [Art. 1412 (a), Civil Code].
xxx xxx xxx
WHEREFORE, the decision under review is hereby set aside.
The complaint of respondent Teja Marketing and/or Angel
Jaucian, as well as the counterclaim of petitioner Pedro Nale in
Civil Case No. 1153 of the Court of First Instance of Camarines
Sur (formerly Civil Case No. 5856 of the City Court of Naga
City) are dismissed. No pronouncement as to costs.
SO ORDERED.