G.R. No.

L-22985

January 24, 1968

BATANGAS TRANSPORTATION COMPANY, petitioner,

vs.
GREGORIO CAGUIMBAL, PANCRACIO CAGUIMBAL, MARIA MARANAN DE
CAGUIMBAL, BIAN TRANSPORTATION COMPANY and MARCIANO
ILAGAN, respondents.
Ozaeta, Gibbs and Ozaeta and Domingo E. de Lara for petitioner.
Victoriano H. Endaya for respondents.
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
The main facts are set forth in said decision from which we quote:
There is no dispute at all that the deceased Pedro Caguimbal,
Barrio Lieutenant of Barrio Calansayan, San Jose, Batangas, was a
paying passenger of BTCO bus, with plate TPU-507, going south on
its regular route from Calamba, Laguna, to Batangas, Batangas,
driven by Tomas Perez, its regular driver, at about 5:30 o'clock on the
early morning of April 25, 1954. The deceased's destination was his
residence at Calansayan, San Jose, Batangas. The bus of the Bian
Transportation Company, bearing plate TPU-820, driven by Marciano
Ilagan, was coming from the opposite direction (north-bound). Along
the national highway at Barrio Daraza, Tanauan, Batangas, on the
date and hour above indicated, a horse-driven rig (calesa) managed
by Benito Makahiya, which was then ahead of the Bian bus, was
also coming from the opposite direction, meaning proceeding towards
the north. As to what transpired thereafter, the lower court chose to
give more credence to defendant Batangas Transportation
Company's version which, in the words of the Court a quo, is as
follows: "As the BTCO bus was nearing a house, a passenger
requested the conductor to stop as he was going to alight, and when
he heard the signal of the conductor, the driver Tomas Perez slowed
down his bus swerving it farther to the right in order to stop; at this
juncture, a calesa, then driven by Benito Makahiya was at a distance
of several meters facing the BTCO bus coming from the opposite
direction; that at the same time the Bian bus was about 100 meters
away likewise going northward and following the direction of
the calesa; that upon seeing the Bian bus the driver of the BTCO
bus dimmed his light as established by Magno Ilaw, the very
conductor of the Bian bus at the time of the accident; that as
the calesa and the BTCO bus were passing each other from the
opposite directions, the Bian bus following the calesa swerved to its
left in an attempt to pass between the BTCO bus and thecalesa; that
without diminishing its speed of about seventy (70) kilometers an
hour, the Bian bus passed through the space between the BTCO
bus and the calesa hitting first the left side of the BTCO bus with the
left front corner of its body and then bumped and struck
the calesa which was completely wrecked; that the driver was
seriously injured and the horse was killed; that the second and all
other posts supporting the top of the left side of the BTCO bus were
completely smashed and half of the back wall to the left was ripped
open. (Exhibits 1 and 2). The BTCO bus suffered damages for the
repair of its damaged portion.
As a consequence of this occurrence, two (2) passengers of BTCO died,
namely, Pedro Caguimbal and Guillermo Tolentino, apart from others who were
injured. The widow and children of Caguimbal instituted the present action, which
was tried jointly with a similar action of the Tolentinos, to recover damages from
the Batangas Transportation Company, hereinafter referred to as BTCO. The
latter, in turn, filed a third-party complaint against the Bian Transportation
Company hereinafter referred to as Bian and its driver, Marciano Ilagan.
Subsequently, the Caguimbals amended their complaint, to include therein, as
defendants, said Bian and Ilagan.

After appropriate proceedings, the Court of First Instance of Batangas

rendered a decision dismissing the complaint insofar as the BTCO is concerned,
without prejudice to plaintiff's right to sue Bian which had stopped
participating in the proceedings herein, owing apparently, to a case in the Court
of First Instance of Laguna for the insolvency of said enterprise and Ilagan,
and without pronouncement as to costs.
On appeal taken by the Caguimbals, the Court of Appeals reversed said
decision and rendered judgment for them, sentencing the BTCO, Bian and
Ilagan to, jointly and severally, pay to the plaintiffs the aggregate sum of
P10,500.00 1 and the costs in both instances. Hence, this appeal by BTCO, upon
the ground that the Court of Appeals erred: 1) in finding said appellant liable for
damages; and 2) in awarding attorney's fees.
In connection with the first assignment of error, we note that the
recklessness of defendant was, manifestly, a major factor in the occurrence of
the accident which resulted, inter alia, in the death of Pedro Caguimbal. Indeed,
as driver of the Bian bus, he overtook Benito Makahiya's horse-driven rig
or calesa and passed between the same and the BTCO bus despite the fact that
the space available was not big enough therefor, in view of which the Bian bus
hit the left side of the BTCO bus and then the calesa. This notwithstanding, the
Court of Appeals rendered judgment against the BTCO upon the ground that its
driver, Tomas Perez, had failed to exercise the "extraordinary diligence," required
in Article 1733 of the new Civil Code, "in the vigilance for the safety" of his
passengers. 2
The record shows that, in order to permit one of them to disembark, Perez
drove his BTCO bus partly to the right shoulder of the road and partly on the
asphalted portion thereof. Yet, he could have and should have seen to it had
he exercised "extraordinary diligence" that his bus was completely outside the
asphalted portion of the road, and fully within the shoulder thereof, the width of
which being more than sufficient to accommodate the bus. He could have and
should have done this, because, when the aforementioned passenger expressed
his wish to alight from the bus, Ilagan had seen the aforementioned "calesa",
driven by Makahiya, a few meters away, coming from the opposite direction, with
the Bian bus about 100 meters behind the rig cruising at a good speed. 3 When
Perez slowed down his BTCO bus to permit said passenger to disembark, he
must have known, therefore, that the Bian bus would overtake the calesa at
about the time when the latter and BTCO bus would probably be on the same
line, on opposite sides of the asphalted portions of the road, and that the space
between the BTCO bus and the "calesa" would not be enough to allow the Bian
bus to go through. It is true that the driver of the Bian bus should have slowed
down or stopped, and, hence, was reckless in not doing so; but, he had no
especial obligations toward the passengers of the BTCO unlike Perez whose
duty was to exercise "utmost" or "extraordinary" diligence for their safety. Perez
was thus under obligation to avoid a situation which would be hazardous for his
passengers, and, make their safety dependent upon the diligence of the Bian
driver. Such obligation becomes more patent when we considered the fact of
which the Court may take judicial cognizance that our motor vehicle drivers,
particularly those of public service utilities, have not distinguished themselves for
their concern over the safety, the comfort or the convenience of others. Besides,
as correctly stated in the syllabus to Brito Sy vs. Malate Taxicab & Garage, Inc., 4
In an action based on a contract of carriage, the court need not
make an express finding of fault or negligence on the part of the
carrier in order to hold it responsible to pay the damages sought for
by the passenger. By the contract of carriage, the carrier assumes the
express obligation to transport the passenger to his destination safely
and to observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the
passenger is right away attributable to the fault or negligence of the
carrier (Article 1756, new Civil Code). This is an exception to the
general rule that negligence must be proved, and it is therefore
incumbent upon the carrier to prove that it has exercised
extraordinary diligence as prescribed in Articles 1733 and 1755 of the
new Civil Code.
In the case at bar, BTCO has not proven the exercise of extraordinary
diligence on its part. For this reason, the case of Isaac vs. A. L. Ammen Trans.
Co., Inc. 5 relied upon by BTCO, is not in point, for, in said case, the public utility
driver had done everything he could to avoid the accident, and could not have
possibly avoided it, for he "swerved the bus to the very extreme right of the road,"
which the driver, in the present case, had failed to do.

As regards the second assignment of error, appellant argues that the

award of attorney's fees is not authorized by law, because, of the eleven (11)
cases specified in Article 1208 of the new Civil Code, only the fifth and the last
are relevant to the one under consideration; but the fifth case requires bad faith,
which does not exist in the case at bar. As regards the last case, which permits
the award, "where the court deems it just and equitable that attorney's fees . . .
should be recovered," it is urged that the evidence on record does not show the
existence of such just and equitable grounds.
We, however, believe otherwise, for: (1) the accident in question took place
on April 25, 1954, and the Caguimbals have been constrained to litigate for over
thirteen (13) years to vindicate their rights; and (2) it is high time to impress

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-29721

March 27, 1929

AMANDO MIRASOL, plaintiff-appellant,

vs.
THE ROBERT DOLLAR CO., defendant-appellant.
Vicente Hilado for plaintiff-appellant.
J.A. Wolfson for defendant-appellant.
STATEMENT
After the promulgation of the decision rendered by the Second Division
of February 13, 1929,1 the defendant filed a motion to have the case
heard and decided in banc, and inasmuch as the legal questions
involved are important to the shipping interests, the court thought it
best to do so.
After the formal pleas, plaintiff alleges that he is the owner and
consignee of two cases of books, shipped in good order and condition
at New York, U.S.A., on board the defendant's steamship President
Garfield, for transport and delivery to the plaintiff in the City of Manila,
all freight charges paid. That the two cases arrived in Manila on
September 1, 1927, in bad order and damaged condition, resulting in
the total loss of one case and a partial loss of the other. That the loss
in one case is P1,630, and the other P700, for which he filed his
claims, and defendant has refused and neglected to pay, giving as its
reason that the damage in question "was caused by sea water." That
plaintiff never entered into any contract with the defendant limiting
defendant's liability as a common carrier, and when he wrote the letter
of September 3, 1927, he had not then ascertained the contents of the
damaged case, and could not determine their value. That he never
intended to ratify or confirm any agreement to limit the liability of the
defendant. That on September 9, 1927, when the other case was
found, plaintiff filed a claim for the real damage of the books therein
named in the sum of $375.
Plaintiff prays for corresponding judgment, with legal interest from the
filing of the complaint and costs.
For answer the defendant made a general and specific denial, and as
a separate and special defense alleges that the steamship President
Garfield at all the times alleged was in all respects seaworthy and
properly manned, equipped and supplied, and fit for the voyage. That
the damage to plaintiff's merchandise, if any, was not caused through
the negligence of the vessel, its master, agent, officers, crew, tackle or
appurtenances, nor by reason of the vessel being unseaworthy or
improperly manned, "but that such damage, if any, resulted from faults

effectively upon public utility operators the nature and extent of their responsibility
in respect of the safety of their passengers and their duty to exercise greater care
in the selection of drivers and conductor and in supervising the performance of
their duties, in accordance, not only with Article 1733 of the Civil Code of the
Philippines, but, also, with Articles 1755 and 1756 thereof 6 and the spirit of these
provisions, as disclosed by the letter thereof, and elucidated by the Commission
that drafted the same. 7
WHEREFORE, the decision appealed from, should be, as it is hereby,
affirmed, with the costs of this instance against appellant Batangas
Transportation Company.

or errors in navigation or in the management of said vessel." As a

second separate and special defense, defendant alleges that in the bill
of lading issued by the defendant to plaintiff, it was agreed in writing
that defendant should not be "held liable for any loss of, or damage to,
any of said merchandise resulting from any of the following causes, to
wit: Acts of God, perils of the sea or other waters," and that plaintiff's
damage, if any, was caused by "Acts of God" or "perils of the sea." As
a third special defense, defendant quoted clause 13 of the bill of
lading, in which it is stated that in no case shall it be held liable "for or
in respect to said merchandise or property beyond the sum of two
hundred and fifty dollars for any piece, package or any article not
enclosed in a package, unless a higher value is stated herein and ad
valorem freight paid or assessed thereon," and that there was no other
agreement. That no September 3, 1927 the plaintiff wrote the
defendant a letter as follows:
Therefore, I wish to file claim of damage to the meager
maximum value that your bills of lading will indemnify me,
that is $250 as per condition 13.
As a fourth special defense, defendant alleges that the damage, if any,
was caused by "sea water," and that the bill of lading exempts
defendant from liability for that cause. That damage by "sea water" is a
shipper's risk, and that defendant is not liable.
As a result of the trial upon such issues, the lower court rendered
judgment for the plaintiff for P2,080, with legal interest thereon from the
date of the final judgment, with costs, from which both parties
appealed, and the plaintiff assigns the following errors:
I. The lower court erred in holding that plaintiff's damage on
account of the loss of the damaged books in the partially
damaged case can be compensated with an indemnity of
P450 instead of P750 as claimed by plaintiff.
II. The lower court, consequently, also erred in giving
judgment for plaintiff for only P2,080 instead of P2,380.
III. The lower court erred in not sentencing defendant to pay
legal interest on the amount of the judgment, at least, from
the date of the rendition of said judgment, namely, January
30, 1928.
The defendant assigns the following errors:
I. The lower court erred in failing to recognize the validity of
the limited liability clause of the bill of lading, Exhibit 2.
II. The lower court erred in holding defendant liable in any
amount and in failing to hold, after its finding as a fact that
the damage was caused by sea water, that the defendant is
not liable for such damage by sea water.

III. The lower court erred in awarding damages in favor of

plaintiff and against defendant for P2,080 or in any other
amount, and in admitting, over objection, Exhibits G, H, I and
J.
JOHNS, J.:
Plaintiff's contention that he is entitled to P700 for his Encyclopedia
Britannica is not tenable. The evidence shows that the P400 that the
court allowed, he could buy a new set which could contain all of the
material and the subject matter of the one which he lost. Plaintiff's third
assignment of error is well taken, as under all of the authorities, he is
entitled to legal interest from the date of his judgement rendered in the
lower court and not the date when it becomes final. The lower court
found that plaintiff's damage was P2,080, and that finding is sustained
by that evidence. There was a total loss of one case and a partial loss
of the other, and in the very nature of the things, plaintiff could not
prove his loss in any other way or manner that he did prove it, and the
trial court who heard him testify must have been convinced of the truth
of his testimony.

of proof then shifted, and it devolved upon the defendant to both allege
and prove that the damage was caused by reason of some fact which
exempted it from liability. As to how the boxes were damaged, when or
where, was a matter peculiarly and exclusively within the knowledge of
the defendant and in the very nature of things could not be in the
knowledge of the plaintiff. To require the plaintiff to prove as to when
and how the damage was caused would force him to call and rely upon
the employees of the defendant's ship, which in legal effect would be to
say that he could not recover any damage for any reason. That is not
the law.
Shippers who are forced to ship goods on an ocean liner or any other
ship have some legal rights, and when goods are delivered on board
ship in good order and condition, and the shipowner delivers them to
the shipper in bad order and condition, it then devolves upon the
shipowner to both allege and prove that the goods were damaged by
the reason of some fact which legally exempts him from liability;
otherwise, the shipper would be left without any redress, no matter
what may have caused the damage.
The lower court in its opinion says:

There is no claim or pretense that the plaintiff signed the bill of lading
or that he knew of his contents at the time that it was issued. In that
situation he was not legally bound by the clause which purports to limit
defendant's liability. That question was squarely met and decided by
this court in banc in Juan Ysmael and Co., vs. Gabino Baretto and Co.,
(51 Phil., 90; see numerous authorities there cited).
Among such authorities in the case of The Kengsington decided by the
Supreme Court of the U.S. January 6, 1902 (46 Law. Ed., 190), in
which the opinion was written by the late Chief Justice White, the
syllabus of which is as follows:
1. Restrictions of the liability of a steamship company for its
own negligence or failure of duty toward the passenger,
being against the public policy enforced by the courts of the
United States, will not to be upheld, though the ticket was
issued and accepted in a foreign country and contained a
condition making it subject to the law thereof, which
sustained such stipulation.
2. The stipulation in a steamship passenger's ticket, which
compels him to value his baggage, at a certain sum, far less
than it is worth, or, in order to have a higher value put upon
it, to subject it to the provisions of the Harter Act, by which
the carrier would be exempted from all the liability therefore
from errors in navigation or management of the vessel of
other negligence is unreasonable and in conflict with public
policy.

The defendant has not even attempted to prove that the two
cases were wet with sea water by fictitious event, force
majeure or nature and defect of the things themselves.
Consequently, it must be presumed that it was by causes
entirely distinct and in no manner imputable to the plaintiff,
and of which the steamerPresident Garfield or any of its
crew could not have been entirely unaware.
And the evidence for the defendant shows that the damage was largely
caused by "sea water," from which it contends that it is exempt under
the provisions of its bill of lading and the provisions of the article 361 of
the Code of Commerce, which is as follows:
Merchandise shall be transported at the risk and venture of
the shipper, if the contrary was not expressly stipulated.
Therefore, all damages and impairment suffered by the
goods during the transportation, by reason of accident, force
majeure, or by virtue of the nature or defect of the articles,
shall be for the account and risk of the shipper.
The proof of these accidents is incumbent on the carrier.

Both the facts upon which it is based and the legal principles involved
are square in point in this case.

In the final analysis, the cases were received by the defendant in New
York in good order and condition, and when they arrived in Manila, they
were in bad condition, and one was a total loss. The fact that the cases
were damaged by "sea water," standing alone and within itself, is not
evidence that they were damaged by force majeure or for a cause
beyond the defendant's control. The words "perils of the sea," as
stated in defendant's brief apply to "all kinds of marine casualties, such
as shipwreck, foundering, stranding," and among other things, it is
said: "Tempest, rocks, shoals, icebergs and other obstacles are within
the expression," and "where the peril is the proximate cause of the
loss, the shipowner is excused." "Something fortuitous and out of the
ordinary course is involved in both words 'peril' or 'accident'."

The defendant having received the two boxes in good condition, its
legal duty was to deliver them to the plaintiff in the same condition in
which it received them. From the time of their delivery to the defendant
in New York until they are delivered to the plaintiff in Manila, the boxes
were under the control and supervision of the defendant and beyond
the control of the plaintiff. The defendant having admitted that the
boxes were damaged while in transit and in its possession, the burden

Defendant also cites and relies on the case of Government of the

Philippine Islands vs. Ynchausti & Company (40 Phil., 219), but it
appears from a reading of that case that the facts are very different
and, hence, it is not in point. In the instant case, there is no claim or
pretense that the two cases were not in good order when received on
board the ship, and it is admitted that they were in bad order on their
arrival at Manila. Hence, they must have been damaged in transit. In

3. An arbitrary limitation of 250 francs for the baggage of any

steamship passenger unaccompanied by any right to
increase the amount of adequate and reasonable
proportional payment, is void as against public policy.

the very nature of things, if they were damaged by reason of a

tempest, rocks, icebergs, foundering, stranding or the perils of the sea,
that would be a matter exclusively within the knowledge of the officers
of defendant's ship, and in the very nature of things would not be within
plaintiff's knowledge, and upon all of such questions, there is a failure
of proof.

The judgment of the lower court will be modified, so as to give the

plaintiff legal interest on the amount of his judgment from the date of its
rendition in the lower court, and in all respects affirmed, with costs. So
ordered.

Republic of the Philippines

SUPREME COURT
Manila

Respondents contended that the shipment was delivered to GPC

without presentation of the bills of lading and bank guarantee per
request of petitioner himself because the shipment consisted of
perishable goods. The telex dated 5 April 1989 conveying such request
read

SECOND DIVISION
G.R. No. 125524

August 25, 1999

BENITO MACAM doing business under the name and style BENMAC ENTERPRISES, petitioner,
vs.
COURT OF APPEALS, CHINA OCEAN SHIPPING CO., and/or
WALLEM PHILIPPINES SHIPPING, INC.,respondents.
BELLOSILLO, J.:
On 4 April 1989 petitioner Benito Macam, doing business under the
name and style Ben-Mac Enterprises, shipped on board the
vessel Nen Jiang, owned and operated by respondent China Ocean
Shipping Co., through local agent respondent Wallem Philippines
Shipping, Inc. (hereinafter WALLEM), 3,500 boxes of watermelons
valued at US$5,950.00 covered by Bill of Lading No. HKG 99012 and
exported through Letter of Credit No. HK 1031/30 issued by National
Bank of Pakistan, Hongkong (hereinafter PAKISTAN BANK) and 1,611
boxes of fresh mangoes with a value of US$14,273.46 covered by Bill
of Lading No. HKG 99013 and exported through Letter of Credit No.
HK 1032/30 also issued by PAKISTAN BANK. The Bills of Lading
contained the following pertinent provision: "One of the Bills of Lading
must be surrendered duly endorsed in exchange for the goods or
delivery order.1 The shipment was bound for Hongkong with PAKISTAN
BANK as consignee and Great Prospect Company of Kowloon,
Hongkong (hereinafter GPC) as notify party.
On 6 April 1989, per letter of credit requirement, copies of the bills of
lading and commercial invoices were submitted to petitioner's
depository bank, Consolidated Banking Corporation (hereinafter
SOLIDBANK), which paid petitioner in advance the total value of the
shipment of US$20,223.46.1wphi1.nt
Upon arrival in Hongkong, the shipment was delivered by respondent
WALLEM directly to GPC, not to PAKISTAN BANK, and without the
required bill of lading having been surrendered. Subsequently, GPC
failed to pay PAKISTAN BANK such that the latter, still in possession of
the original bills of lading, refused to pay petitioner through
SOLIDBANK. Since SOLIDBANK already pre-paid petitioner the value
of the shipment, it demanded payment from respondent WALLEM
through five (5) letters but was refused. Petitioner was thus allegedly
constrained to return the amount involved to SOLIDBANK, then
demanded payment from respondent WALLEM in writing but to no
avail.
On 25 September 1991 petitioner sought collection of the value of the
shipment of US$20,223.46 or its equivalent of P546,033.42 from
respondents before the Regional Trial Court of Manila, based on
delivery of the shipment to GPC without presentation of the bills of
lading and bank guarantee.

AS PER SHPR'S REQUEST KINDLY ARRANGE DELIVERY

OF A/M SHIPT TO RESPECTIVE CNEES WITHOUT
PRESENTATION OF OB/L2 and bank guarantee since for
prepaid shipt ofrt charges already fully paid our end . . . .3
Respondents explained that it is a standard maritime practice, when
immediate delivery is of the essence, for the shipper to request or
instruct the carrier to deliver the goods to the buyer upon arrival at the
port of destination without requiring presentation of the bill of lading as
that usually takes time. As proof thereof, respondents apprised the trial
court that for the duration of their two-year business relationship with
petitioner concerning similar shipments to GPC deliveries were
effected without presentation of the bills of lading.4 Respondents
advanced next that the refusal of PAKISTAN BANK to pay the letters of
credit to SOLIDBANK was due to the latter's failure to submit a
Certificate of Quantity and Quality. Respondents counterclaimed for
attorney's fees and costs of suit.
On 14 May 1993 the trial court ordered respondents to pay, jointly and
severally, the following amounts: (1) P546,033.42 plus legal interest
from 6 April 1989 until full payment; (2) P10,000.00 as attorney's fees;
and, (3) the costs. The counterclaims were dismissed for lack of
merit.5 The trial court opined that respondents breached the provision
in the bill of lading requiring that "one of the Bills of Lading must be
surrendered duly endorsed in exchange for the goods or delivery
order," when they released the shipment to GPC without presentation
of the bills of lading and the bank guarantee that should have been
issued by PAKISTAN BANK in lieu of the bills of lading. The trial court
added that the shipment should not have been released to GPC at all
since the instruction contained in the telex was to arrange delivery to
the respective consignees and not to any party. The trial court
observed that the only role of GPC in the transaction as notify party
was precisely to be notified of the arrival of the cargoes in Hongkong
so it could in turn duly advise the consignee.

Respondent Court of Appeals appreciated the evidence in a different

manner. According to it, as established by previous similar transactions
between the parties, shipped cargoes were sometimes actually
delivered not to the consignee but to notify party GPC without need of
the bills of lading or bank guarantee.6 Moreover, the bills of lading were
viewed by respondent court to have been properly superseded by the
telex instruction and to implement the instruction, the delivery of the
shipment must be to GPC, the real importer/buyer of the goods as
shown by the export invoices,7 and not to PAKISTAN BANK since the
latter could very well present the bills of lading in its possession;
likewise, if it were the PAKISTAN BANK to which the cargoes were to
be strictly delivered it would no longer be proper to require a bank
guarantee. Respondent court noted that besides, GPC was listed as a
consignee in the telex. It observed further that the demand letter of
petitioner to respondents never complained of misdelivery of goods.
Lastly, respondent court found that petitioner's claim of having
reimbursed the amount involved to SOLIDBANK was unsubstantiated.
Thus, on 13 March 1996 respondent court set aside the decision of the
trial court and dismissed the complaint together with the
counterclaims.8 On 5 July 1996 reconsideration was denied.9
Petitioner submits that the fact that the shipment was not delivered to
the consignee as stated in the bill of lading or to a party designated or
named by the consignee constitutes a misdelivery thereof. Moreover,
petitioner argues that from the text of the telex, assuming there was
such an instruction, the delivery of the shipment without the required
bill of lading or bank guarantee should be made only to the designated
consignee, referring to PAKISTAN BANK.
We are not persuaded. The submission of petitioner that "the fact that
the shipment was not delivered to the consignee as stated in the Bill of
Lading or to a party designated or named by the consignee constitutes
a misdelivery thereof" is a deviation from his cause of action before the
trial court. It is clear from the allegation in his complaint that it does not
deal with misdelivery of the cargoes but of delivery to GPC without the
required bills of lading and bank guarantee
6. The goods arrived in Hongkong and were released by the
defendant Wallem directly to the buyer/notify party, Great
Prospect Company and not to the consignee, the National
Bank of Pakistan, Hongkong, without the required bills of
lading and bank guarantee for the release of the shipment
issued by the consignee of the goods . . . .10
Even going back to an event that transpired prior to the filing of the
present case or when petitioner wrote respondent WALLEM
demanding payment of the value of the cargoes, misdelivery of the
cargoes did not come into the picture
We are writing you on behalf of our client, Ben-Mac
Enterprises who informed us that Bills of Lading No. 99012
and 99013 with a total value of US$20,223.46 were released
to Great Prospect, Hongkong without the necessary bank
guarantee. We were further informed that the consignee of
the goods, National Bank of Pakistan, Hongkong, did not
release or endorse the original bills of lading. As a result
thereof, neither the consignee, National Bank of Pakistan,
Hongkong, nor the importer, Great Prospect Company,
Hongkong, paid our client for the goods . . . .11
At any rate, we shall dwell on petitioner's submission only as a prelude
to our discussion on the imputed liability of respondents concerning the
shipped goods. Article 1736 of the Civil Code provides
Art. 1736. The extraordinary responsibility of the common
carriers lasts from the time the goods are unconditionally

placed in the possession of, and received by the carrier for

transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice to
the provisions of article 1738.12
We emphasize that the extraordinary responsibility of the common
carriers lasts until actual or constructive delivery of the cargoes to the
consignee or to the person who has a right to receive them. PAKISTAN
BANK was indicated in the bills of lading as consignee whereas GPC
was the notify party. However, in the export invoices GPC was clearly
named as buyer/importer. Petitioner also referred to GPC as such in
his demand letter to respondent WALLEM and in his complaint before
the trial court. This premise draws us to conclude that the delivery of
the cargoes to GPC as buyer/importer which, conformably with Art.
1736 had, other than the consignee, the right to receive them14 was
proper.
The real issue is whether respondents are liable to petitioner for
releasing the goods to GPC without the bills of lading or bank
guarantee.
Respondents submitted in evidence a telex dated 5 April 1989 as basis
for delivering the cargoes to GPC without the bills of lading and bank
guarantee. The telex instructed delivery of various shipments to the
respective consignees without need of presenting the bill of lading and
bank guarantee per the respective shipper's request since "for prepaid
shipt ofrt charges already fully paid." Petitioner was named therein as
shipper and GPC as consignee with respect to Bill of Lading Nos. HKG
99012 and HKG 99013. Petitioner disputes the existence of such
instruction and claims that this evidence is self-serving.
From the testimony of petitioner, we gather that he has been
transacting with GPC as buyer/importer for around two (2) or three (3)
years already. When mangoes and watermelons are in season, his
shipment to GPC using the facilities of respondents is twice or thrice a
week. The goods are released to GPC. It has been the practice of
petitioner to request the shipping lines to immediately release
perishable cargoes such as watermelons and fresh mangoes through
telephone calls by himself or his "people." In transactions covered by a
letter of credit, bank guarantee is normally required by the shipping
lines prior to releasing the goods. But for buyers using telegraphic
transfers, petitioner dispenses with the bank guarantee because the
goods are already fully paid. In his several years of business
relationship with GPC and respondents, there was not a single
instance when the bill of lading was first presented before the release
of the cargoes. He admitted the existence of the telex of 3 July 1989
containing his request to deliver the shipment to the consignee without
presentation of the bill of lading15 but not the telex of 5 April 1989
because he could not remember having made such request.
Consider pertinent portions of petitioner's testimony
Q: Are you aware of any document which would indicate or
show that your request to the defendant Wallem for the
immediate release of your fresh fruits, perishable goods, to
Great Prospect without the presentation of the original Bill of
Lading?
A: Yes, by telegraphic transfer, which means that it is fully
paid. And I requested immediate release of the cargo
because there was immediate payment.

Q: And you are referring, therefore, to this copy Telex

release that you mentioned where your Company's name
appears Ben-Mac?
Atty. Hernandez: Just for the record, Your Honor,
the witness is showing a Bill of Lading referring to
SKG (sic) 93023 and 93026 with Great Prospect
Company.

Q: Now, Mr. Macam, if you request the Shipping Lines for the
release of your goods immediately even without the
presentation of OBL, how do you course it?
A: Usually, I call up the Shipping Lines, sir . . . .17
Q: You also testified you made this request through phone
calls. Who of you talked whenever you made such phone
call?

Atty. Ventura:
A: Mostly I let my people to call, sir. (sic)
Q: Is that the telegraphic transfer?
A: Yes, actually, all the shippers partially request for the
immediate release of the goods when they are perishable. I
thought Wallem Shipping Lines is not neophyte in the
business. As far as LC is concerned, Bank guarantee is
needed for the immediate release of the goods . . . .15
Q: Mr. Witness, you testified that if is the practice of the
shipper of the perishable goods to ask the shipping lines to
release immediately the shipment. Is that correct?
A: Yes, sir.
Q: Now, it is also the practice of the shipper to allow the
shipping lines to release the perishable goods to the
importer of goods without a Bill of Lading or Bank
guarantee?
A: No, it cannot be without the Bank Guarantee.
Atty. Hernandez:
Q: Can you tell us an instance when you will allow the
release of the perishable goods by the shipping lines to the
importer without the Bank guarantee and without the Bill of
Lading?
A: As far as telegraphic transfer is concerned.
Q: Can you explain (to) this Honorable Court what
telegraphic transfer is?
A: Telegraphic transfer, it means advance payment that I am
already fully paid . . . .
Q: Mr. Macam, with regard to Wallem and to Great Prospect,
would you know and can you recall that any of your
shipment was released to Great Prospect by Wallem through
telegraphic transfer?
A: I could not recall but there were so many instances sir.
Q: Mr. Witness, do you confirm before this Court that in
previous shipments of your goods through Wallem, you
requested Wallem to release immediately your perishable
goods to the buyer?
A: Yes, that is the request of the shippers of the perishable
goods . . . .16

Q: So everytime you made a shipment on perishable goods

you let your people to call? (sic)
A: Not everytime, sir.
Q: You did not make this request in writing?
A: No, sir. I think I have no written request with Wallem . . . .
18

Against petitioner's claim of "not remembering" having made a request

for delivery of subject cargoes to GPC without presentation of the bills
of lading and bank guarantee as reflected in the telex of 5 April 1989
are damaging disclosures in his testimony. He declared that it was his
practice to ask the shipping lines to immediately release shipment of
perishable goods through telephone calls by himself or his "people."
He no longer required presentation of a bill of lading nor of a bank
guarantee as a condition to releasing the goods in case he was
already fully paid. Thus, taking into account that subject shipment
consisted of perishable goods and SOLIDBANK pre-paid the full
amount of the value thereof, it is not hard to believe the claim of
respondent WALLEM that petitioner indeed requested the release of
the goods to GPC without presentation of the bills of lading and bank
guarantee.
The instruction in the telex of 5 April 1989 was "to deliver the shipment
to respective consignees." And so petitioner argues that, assuming
there was such an instruction, the consignee referred to was
PAKISTAN BANK. We find the argument too simplistic. Respondent
court analyzed the telex in its entirety and correctly arrived at the
conclusion that the consignee referred to was not PAKISTAN BANK
but GPC
There is no mistake that the originals of the two (2) subject
Bills of Lading are still in the possession of the Pakistani
Bank. The appealed decision affirms this fact. Conformably,
to implement the said telex instruction, the delivery of the
shipment must be to GPC, the notify party or real
importer/buyer of the goods and not the Pakistani Bank
since the latter can very well present the original Bills of
Lading in its possession. Likewise, if it were the Pakistani
Bank to whom the cargoes were to be strictly delivered, it will
no longer be proper to require a bank guarantee as a
substitute for the Bill of Lading. To construe otherwise will
render meaningless the telex instruction. After all, the
cargoes consist of perishable fresh fruits and immediate
delivery thereof to the buyer/importer is essentially a factor
to reckon with. Besides, GPC is listed as one among the
several consignees in the telex (Exhibit 5-B) and the
instruction in the telex was to arrange delivery of A/M
shipment (not any party) to respective consignees without
presentation of OB/L and bank guarantee . . . .20

Apart from the foregoing obstacles to the success of petitioner's cause,

petitioner failed to substantiate his claim that he returned to
SOLIDBANK the full amount of the value of the cargoes. It is not farfetched to entertain the notion, as did respondent court, that he merely
accommodated SOLIDBANK in order to recover the cost of the
shipped cargoes from respondents. We note that it was SOLIDBANK
which initially demanded payment from respondents through five (5)
letters. SOLIDBANK must have realized the absence of privity of
contract between itself and respondents. That is why petitioner
conveniently took the cudgels for the bank.

In view of petitioner's utter failure to establish the liability of

respondents over the cargoes, no reversible error was committed by
respondent court in ruling against him.
WHEREFORE, the petition is DENIED. The decision of respondent
Court of Appeals of 13 March 1996 dismissing the complaint of
petitioner Benito Macam and the counterclaims of respondents China
Ocean Shipping Co. and/or Wallem Philippines Shipping, Inc., as well
as its resolution of 5 July 1996 denying reconsideration, is
AFFIRMED.1wphi1.nt
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-20761

July 27, 1966

LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET
AL., respondents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for respondents.
BARRERA, J.:
La Mallorca seeks the review of the decision of the Court of Appeals in
CA-G.R. No. 23267-R, holding it liable for quasi-delict and ordering it to
pay to respondents Mariano Beltran, et al., P6,000.00 for the death of
his minor daughter Raquel Beltran, plus P400.00 as actual damages.
The facts of the case as found by the Court of Appeals, briefly are:
On December 20, 1953, at about noontime, plaintiffs,
husband and wife, together with their minor daughters,
namely, Milagros, 13 years old, Raquel, about 4 years old,
and Fe, over 2 years old, boarded the Pambusco Bus No.
352, bearing plate TPU No. 757 (1953 Pampanga), owned
and operated by the defendant, at San Fernando,
Pampanga, bound for Anao, Mexico, Pampanga. At the time,
they were carrying with them four pieces of baggages
containing their personal belonging. The conductor of the
bus, who happened to be a half-brother of plaintiff Mariano
Beltran, issued three tickets (Exhs. A, B, & C) covering the
full fares of the plaintiff and their eldest child, Milagros. No
fare was charged on Raquel and Fe, since both were below
the height at which fare is charged in accordance with the
appellant's rules and regulations.
After about an hour's trip, the bus reached Anao whereat it
stopped to allow the passengers bound therefor, among
whom were the plaintiffs and their children to get off. With
respect to the group of the plaintiffs, Mariano Beltran, then
carrying some of their baggages, was the first to get down
the bus, followed by his wife and his children. Mariano led
his companions to a shaded spot on the left pedestrians side
of the road about four or five meters away from the vehicle.
Afterwards, he returned to the bus in controversy to get his
other bayong, which he had left behind, but in so doing, his

daughter Raquel followed him, unnoticed by her father.

While said Mariano Beltran was on the running board of the
bus waiting for the conductor to hand him his bayong which
he left under one of its seats near the door, the bus, whose
motor was not shut off while unloading, suddenly started
moving forward, evidently to resume its trip, notwithstanding
the fact that the conductor has not given the driver the
customary signal to start, since said conductor was still
attending to the baggage left behind by Mariano Beltran.
Incidentally, when the bus was again placed into a complete
stop, it had travelled about ten meters from the point where
the plaintiffs had gotten off.
Sensing that the bus was again in motion, Mariano Beltran
immediately jumped from the running board without getting
his bayong from the conductor. He landed on the side of the
road almost in front of the shaded place where he left his
wife and children. At that precise time, he saw people
beginning to gather around the body of a child lying prostrate
on the ground, her skull crushed, and without life. The child
was none other than his daughter Raquel, who was run over
by the bus in which she rode earlier together with her
parents.
For the death of their said child, the plaintiffs commenced
the present suit against the defendant seeking to recover
from the latter an aggregate amount of P16,000 to cover
moral damages and actual damages sustained as a result
thereof and attorney's fees. After trial on the merits, the court
below rendered the judgment in question.
On the basis of these facts, the trial court found defendant liable for
breach of contract of carriage and sentenced it to pay P3,000.00 for
the death of the child and P400.00 as compensatory damages
representing burial expenses and costs.
On appeal to the Court of Appeals, La Mallorca claimed that there
could not be a breach of contract in the case, for the reason that when
the child met her death, she was no longer a passenger of the bus
involved in the incident and, therefore, the contract of carriage had
already terminated. Although the Court of Appeals sustained this
theory, it nevertheless found the defendant-appellant guilty of quasidelict and held the latter liable for damages, for the negligence of its
driver, in accordance with Article 2180 of the Civil Code. And, the Court
of Appeals did not only find the petitioner liable, but increased the
damages awarded the plaintiffs-appellees to P6,000.00, instead of
P3,000.00 granted by the trial court.
In its brief before us, La Mallorca contends that the Court of Appeals
erred (1) in holding it liable for quasi-delict, considering that
respondents complaint was one for breach of contract, and (2) in

raising the award of damages from P3,000.00 to P6,000.00 although

respondents did not appeal from the decision of the lower court.
Under the facts as found by the Court of Appeals, we have to sustain
the judgement holding petitioner liable for damages for the death of the
child, Raquel Beltran. It may be pointed out that although it is true that
respondent Mariano Beltran, his wife, and their children (including the
deceased child) had alighted from the bus at a place designated for
disembarking or unloading of passengers, it was also established that
the father had to return to the vehicle (which was still at a stop) to get
one of his bags or bayong that was left under one of the seats of the
bus. There can be no controversy that as far as the father is
concerned, when he returned to the bus for hisbayong which was not
unloaded, the relation of passenger and carrier between him and the
petitioner remained subsisting. For, the relation of carrier and
passenger does not necessarily cease where the latter, after alighting
from the car, aids the carrier's servant or employee in removing his
baggage from the car.1 The issue to be determined here is whether as
to the child, who was already led by the father to a place about 5
meters away from the bus, the liability of the carrier for her safety
under the contract of carriage also persisted.
It has been recognized as a rule that the relation of carrier and
passenger does not cease at the moment the passenger alights from
the carrier's vehicle at a place selected by the carrier at the point of
destination, but continues until the passenger has had a reasonable
time or a reasonable opportunity to leave the carrier's premises. And,
what is a reasonable time or a reasonable delay within this rule is to be
determined from all the circumstances. Thus, a person who, after
alighting from a train, walks along the station platform is considered
still a passenger.2 So also, where a passenger has alighted at his
destination and is proceeding by the usual way to leave the company's
premises, but before actually doing so is halted by the report that his
brother, a fellow passenger, has been shot, and he in good faith and
without intent of engaging in the difficulty, returns to relieve his brother,
he is deemed reasonably and necessarily delayed and thus continues
to be a passenger entitled as such to the protection of the railroad and
company and its agents.3
In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the bus.
Raquel, the child that she was, must have followed the father.
However, although the father was still on the running board of the bus
awaiting for the conductor to hand him the bag or bayong, the bus
started to run, so that even he (the father) had to jump down from the
moving vehicle. It was at this instance that the child, who must be near
the bus, was run over and killed. In the circumstances, it cannot be
claimed that the carrier's agent had exercised the "utmost diligence" of
a "very cautions person" required by Article 1755 of the Civil Code to
be observed by a common carrier in the discharge of its obligation to
transport safely its passengers. In the first place, the driver, although
stopping the bus, nevertheless did not put off the engine. Secondly, he
started to run the bus even before the bus conductor gave him the
signal to go and while the latter was still unloading part of the
baggages of the passengers Mariano Beltran and family. The presence
of said passengers near the bus was not unreasonable and they are,
therefore, to be considered still as passengers of the carrier, entitled to
the protection under their contract of carriage.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 84458 November 6, 1989

But even assuming arguendo that the contract of carriage has already
terminated, herein petitioner can be held liable for the negligence of its
driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the
Civil Code. Paragraph 7 of the complaint, which reads
That aside from the aforesaid breach of contract, the death
of Raquel Beltran, plaintiffs' daughter, was caused by the
negligence and want of exercise of the utmost diligence of a
very cautious person on the part of the defendants and their
agent, necessary to transport plaintiffs and their daughter
safely as far as human care and foresight can provide in the
operation of their vehicle.
is clearly an allegation for quasi-delict. The inclusion of this averment
for quasi-delict, while incompatible with the other claim under the
contract of carriage, is permissible under Section 2 of Rule 8 of the
New Rules of Court, which allows a plaintiff to allege causes of action
in the alternative, be they compatible with each other or not, to the end
that the real matter in controversy may be resolved and determined.4
The plaintiffs sufficiently pleaded the culpa or negligence upon which
the claim was predicated when it was alleged in the complaint that "the
death of Raquel Beltran, plaintiffs' daughter, was caused by the
negligence and want of exercise of the utmost diligence of a very
cautious person on the part of the defendants and their agent." This
allegation was also proved when it was established during the trial that
the driver, even before receiving the proper signal from the conductor,
and while there were still persons on the running board of the bus and
near it, started to run off the vehicle. The presentation of proof of the
negligence of its employee gave rise to the presumption that the
defendant employer did not exercise the diligence of a good father of
the family in the selection and supervision of its employees. And this
presumption, as the Court of Appeals found, petitioner had failed to
overcome. Consequently, petitioner must be adjudged peculiarily liable
for the death of the child Raquel Beltran.
The increase of the award of damages from P3,000.00 to P6,000.00 by
the Court of Appeals, however, cannot be sustained. Generally, the
appellate court can only pass upon and consider questions or issues
raised and argued in appellant's brief. Plaintiffs did not appeal from that
portion of the judgment of the trial court awarding them on P3,000.00
damages for the death of their daughter. Neither does it appear that, as
appellees in the Court of Appeals, plaintiffs have pointed out in their
brief the inadequacy of the award, or that the inclusion of the figure
P3,000.00 was merely a clerical error, in order that the matter may be
treated as an exception to the general rule.5Herein petitioner's
contention, therefore, that the Court of Appeals committed error in
raising the amount of the award for damages is, evidently,
meritorious.1wph1.t
Wherefore, the decision of the Court of Appeals is hereby modified by
sentencing, the petitioner to pay to the respondents Mariano Beltran, et
al., the sum of P3,000.00 for the death of the child, Raquel Beltran,
and the amount of P400.00 as actual damages. No costs in this
instance. So ordered.

ABOITIZ SHIPPING CORPORATION, petitioner,

vs.
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA,
SPS. ANTONIO VIANA and GORGONIA VIANA, and PIONEER
STEVEDORING CORPORATION, respondents.
Herenio E. Martinez for petitioner.

M.R. Villaluz Law Office for private respondent.

REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a
review of the decision 1 of respondent Court of Appeals, dated July 29,
1988, the decretal portion of which reads:
WHEREFORE, the judgment appealed from as
modified by the order of October 27, 1982, is hereby
affirmed with the modification that appellant Aboitiz
Shipping is hereby ordered to pay plaintiff-appellees
the amount of P30,000.00 for the death of Anacleto
Viana; actual damages of P9,800.00; P150,000.00 for
unearned income; P7,200.00 as support for
deceased's parents; P20,000.00 as moral damages;
P10,000.00 as attorney's fees; and to pay the costs.
The undisputed facts of the case, as found by the court a quo and adopted
by respondent court, are as follows: .
The evidence disclosed that on May 11, 1975,
Anacleto Viana boarded the vessel M/V Antonia,
owned by defendant, at the port at San Jose,
Occidental Mindoro, bound for Manila, having
purchased a ticket (No. 117392) in the sum of P23.10
(Exh. 'B'). On May 12, 1975, said vessel arrived at
Pier 4, North Harbor, Manila, and the passengers
therein disembarked, a gangplank having been
provided connecting the side of the vessel to the pier.
Instead of using said gangplank Anacleto Viana
disembarked on the third deck which was on the level
with the pier. After said vessel had landed, the
Pioneer Stevedoring Corporation took over the
exclusive control of the cargoes loaded on said vessel
pursuant to the Memorandum of Agreement dated
July 26, 1975 (Exh. '2') between the third party
defendant Pioneer Stevedoring Corporation and
defendant Aboitiz Shipping Corporation.
The crane owned by the third party defendant and
operated by its crane operator Alejo Figueroa was
placed alongside the vessel and one (1) hour after the
passengers of said vessel had disembarked, it started
operation by unloading the cargoes from said vessel.
While the crane was being operated, Anacleto Viana
who had already disembarked from said vessel
obviously remembering that some of his cargoes were
still loaded in the vessel, went back to the vessel, and
it was while he was pointing to the crew of the said
vessel to the place where his cargoes were loaded
that the crane hit him, pinning him between the side of
the vessel and the crane. He was thereafter brought
to the hospital where he later expired three (3) days
thereafter, on May 15, 1975, the cause of his death
according to the Death Certificate (Exh. "C") being
"hypostatic pneumonia secondary to traumatic
fracture of the pubic bone lacerating the urinary
bladder" (See also Exh. "B"). For his hospitalization,
medical, burial and other miscellaneous expenses,
Anacleto's wife, herein plaintiff, spent a total of
P9,800.00 (Exhibits "E", "E-1", to "E-5"). Anacleto
Viana who was only forty (40) years old when he met
said fateful accident (Exh. 'E') was in good health. His
average annual income as a farmer or a farm
supervisor was 400 cavans of palay annually. His
parents, herein plaintiffs Antonio and Gorgonia Viana,

prior to his death had been recipient of twenty (20)

cavans of palay as support or P120.00 monthly.
Because of Anacleto's death, plaintiffs suffered mental
anguish and extreme worry or moral damages. For
the filing of the instant case, they had to hire a lawyer
for an agreed fee of ten thousand (P10,000.00)
pesos. 2
Private respondents Vianas filed a complaint 3 for damages against
petitioner corporation (Aboitiz, for brevity) for breach of contract of carriage.
In its answer. 4 Aboitiz denied responsibility contending that at the time of
the accident, the vessel was completely under the control of respondent
Pioneer Stevedoring Corporation (Pioneer, for short) as the exclusive
stevedoring contractor of Aboitiz, which handled the unloading of cargoes
from the vessel of Aboitiz. It is also averred that since the crane operator
was not an employee of Aboitiz, the latter cannot be held liable under the
fellow-servant rule.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party
complaint 5 against Pioneer imputing liability thereto for Anacleto Viana's
death as having been allegedly caused by the negligence of the crane
operator who was an employee of Pioneer under its exclusive control and
supervision.
Pioneer, in its answer to the third-party complaint, 6 raised the defenses that
Aboitiz had no cause of action against Pioneer considering that Aboitiz is
being sued by the Vianas for breach of contract of carriage to which
Pioneer is not a party; that Pioneer had observed the diligence of a good
father of a family both in the selection and supervision of its employees as
well as in the prevention of damage or injury to anyone including the victim
Anacleto Viana; that Anacleto Viana's gross negligence was the direct and
proximate cause of his death; and that the filing of the third-party complaint
was premature by reason of the pendency of the criminal case for homicide
through reckless imprudence filed against the crane operator, Alejo
Figueroa.
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was
ordered to pay the Vianas for damages incurred, and Pioneer was ordered
to reimburse Aboitiz for whatever amount the latter paid the Vianas. The
dispositive portion of said decision provides:
WHEREFORE, judgment is hereby rendered in favor
of the plantiffs:
(1) ordering defendant Aboitiz Shipping Corporation to
pay to plaintiffs the sum of P12,000.00 for the death
of Anacleto Viana P9,800.00 as actual damages;
P533,200.00 value of the 10,664 cavans of palay
computed at P50.00 per cavan; P10,000.00 as
attorney's fees; F 5,000.00, value of the 100 cavans
of palay as support for five (5) years for deceased
(sic) parents, herein plaintiffs Antonio and Gorgonia
Viana computed at P50.00 per cavan; P7,200.00 as
support for deceased's parents computed at P120.00
a month for five years pursuant to Art. 2206, Par. 2, of
the Civil Code; P20,000.00 as moral damages, and
costs; and
(2) ordering the third party defendant Pioneer
Stevedoring Corporation to reimburse defendant and
third party plaintiff Aboitiz Shipping Corporation the
said amounts that it is ordered to pay to herein
plaintiffs.
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein
they similarly raised the trial court's failure to declare that Anacleto Viana
acted with gross negligence despite the overwhelming evidence presented
in support thereof. In addition, Aboitiz alleged, in opposition to Pioneer's

motion, that under the memorandum of agreement the liability of Pioneer as

contractor is automatic for any damages or losses whatsoever occasioned
by and arising from the operation of its arrastre and stevedoring service.
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from
liability for failure of the Vianas and Aboitiz to preponderantly establish a
case of negligence against the crane operator which the court a quo ruled
is never presumed, aside from the fact that the memorandum of agreement
supposedly refers only to Pioneer's liability in case of loss or damage to
goods handled by it but not in the case of personal injuries, and, finally that
Aboitiz cannot properly invoke the fellow-servant rule simply because its
liability stems from a breach of contract of carriage. The dispositive portion
of said order reads:
WHEREFORE, judgment is hereby modified insofar
as third party defendant Pioneer Stevedoring
Corporation is concerned rendered in favor of the
plaintiffs-,:
(1) Ordering defendant Aboitiz Shipping Corporation
to pay the plaintiffs the sum of P12,000.00 for the
death of Anacleto Viana; P9,000.00 (sic) as actual
damages; P533,200.00 value of the 10,664 cavans of
palay computed at P50.00 per cavan; P10,000.00 as
attorney's fees; P5,000.00 value of the 100 cavans of
palay as support for five (5) years for deceased's
parents, herein plaintiffs Antonio and Gorgonia
Viana,computed at P50.00 per cavan; P7,200.00 as
support for deceased's parents computed at P120.00
a month for five years pursuant to Art. 2206, Par. 2, of
the Civil Code; P20,000.00 as moral damages, and
costs; and
(2) Absolving third-party defendant Pioneer
Stevedoring Corporation for (sic) any liability for the
death of Anacleto Viana the passenger of M/V Antonia
owned by defendant third party plaintiff Aboitiz
Shipping Corporation it appearing that the negligence
of its crane operator has not been established therein.
Not satisfied with the modified judgment of the trial court, Aboitiz appealed
the same to respondent Court of Appeals which affirmed the findings of of
the trial court except as to the amount of damages awarded to the Vianas.
Hence, this petition wherein petitioner Aboitiz postulates that respondent
court erred:
(A) In holding that the doctrine laid down by this
honorable Court in La Mallorca vs. Court of Appeals,
et al. (17 SCRA 739, July 27, 1966) is applicable to
the case in the face of the undisputable fact that the
factual situation under the La Mallorca case is
radically different from the facts obtaining in this case;
(B) In holding petitioner liable for damages in the face
of the finding of the court a quo and confirmed by the
Honorable respondent court of Appeals that the
deceased, Anacleto Viana was guilty of contributory
negligence, which, We respectfully submit
contributory negligence was the proximate cause of
his death; specifically the honorable respondent Court
of Appeals failed to apply Art. 1762 of the New Civil
Code;
(C) In the alternative assuming the holding of the
Honorable respondent Court of Appears that
petitioner may be legally condemned to pay damages
to the private respondents we respectfully submit that
it committed a reversible error when it dismissed

petitioner's third party complaint against private

respondent Pioneer Stevedoring Corporation instead
of compelling the latter to reimburse the petitioner for
whatever damages it may be compelled to pay to the
private respondents Vianas. 9
At threshold, it is to be observed that both the trial court and respondent
Court of Appeals found the victim Anacleto Viana guilty of contributory
negligence, but holding that it was the negligence of Aboitiz in prematurely
turning over the vessel to the arrastre operator for the unloading of cargoes
which was the direct, immediate and proximate cause of the victim's death.
I. Petitioner contends that since one (1) hour had already elapsed from the
time Anacleto Viana disembarked from the vessel and that he was given
more than ample opportunity to unload his cargoes prior to the operation of
the crane, his presence on the vessel was no longer reasonable e and he
consequently ceased to be a passenger. Corollarily, it insists that the
doctrine in La Mallorca vs. Court of Appeals, et al. 10 is not applicable to the
case at bar.
The rule is that the relation of carrier and passenger continues until the
passenger has been landed at the port of destination and has left the vessel
owner's dock or premises. 11 Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination,
safely alighted from the carrier's conveyance or had a reasonable
opportunity to leave the carrier's premises. All persons who remain on the
premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this
rule is to be determined from all the circumstances, and includes a
reasonable time to see after his baggage and prepare for his
departure. 12 The carrier-passenger relationship is not terminated merely by
the fact that the person transported has been carried to his destination if, for
example, such person remains in the carrier's premises to claim his
baggage. 13
It was in accordance with this rationale that the doctrine in the aforesaid
case of La Mallorca was enunciated, to wit:
It has been recognized as a rule that the relation of
carrier and passenger does not cease at the moment
the passenger alights from the carrier's vehicle at a
place selected by the carrier at the point of
destination, but continues until the passenger has had
a reasonable time or a reasonable opportunity to
leave the carrier's premises. And, what is a
reasonable time or a reasonable delay within this rule
is to be determined from all the circumstances. Thus,
a person who, after alighting from a train, walks along
the station platform is considered still a passenger. So
also, where a passenger has alighted at his
destination and is proceeding by the usual way to
leave the company's premises, but before actually
doing so is halted by the report that his brother, a
fellow passenger, has been shot, and he in good faith
and without intent of engaging in the difficulty, returns
to relieve his brother, he is deemed reasonably and
necessarily delayed and thus continues to be a
passenger entitled as such to the protection of the
railroad company and its agents.
In the present case, the father returned to the bus to
get one of his baggages which was not unloaded
when they alighted from the bus. Racquel, the child
that she was, must have followed the father. However,
although the father was still on the running board of
the bus waiting for the conductor to hand him the bag
or bayong, the bus started to run, so that even he (the
father) had to jump down from the moving vehicle. It
was at this instance that the child, who must be near
the bus, was run over and killed. In the

circumstances, it cannot be claimed that the carrier's

agent had exercised the 'utmost diligence' of a 'very
cautious person' required by Article 1755 of the Civil
Code to be observed by a common carrier in the
discharge of its obligation to transport safely its
passengers. ... The presence of said passengers near
the bus was not unreasonable and they are,
therefore, to be considered still as passengers of the
carrier, entitled to the protection under their contract
of carriage. 14
It is apparent from the foregoing that what prompted the Court to rule as it
did in said case is the fact of the passenger's reasonable presence within
the carrier's premises. That reasonableness of time should be made to
depend on the attending circumstances of the case, such as the kind of
common carrier, the nature of its business, the customs of the place, and so
forth, and therefore precludes a consideration of the time element per
se without taking into account such other factors. It is thus of no moment
whether in the cited case of La Mallorcathere was no appreciable
interregnum for the passenger therein to leave the carrier's premises
whereas in the case at bar, an interval of one (1) hour had elapsed before
the victim met the accident. The primary factor to be considered is the
existence of a reasonable cause as will justify the presence of the victim on
or near the petitioner's vessel. We believe there exists such a justifiable
cause.
It is of common knowledge that, by the very nature of petitioner's business
as a shipper, the passengers of vessels are allotted a longer period of time
to disembark from the ship than other common carriers such as a
passenger bus. With respect to the bulk of cargoes and the number of
passengers it can load, such vessels are capable of accommodating a
bigger volume of both as compared to the capacity of a regular commuter
bus. Consequently, a ship passenger will need at least an hour as is the
usual practice, to disembark from the vessel and claim his baggage
whereas a bus passenger can easily get off the bus and retrieve his
luggage in a very short period of time. Verily, petitioner cannot categorically
claim, through the bare expedient of comparing the period of time entailed
in getting the passenger's cargoes, that the ruling in La Mallorca is
inapplicable to the case at bar. On the contrary, if we are to apply the
doctrine enunciated therein to the instant petition, we cannot in reason
doubt that the victim Anacleto Viana was still a passenger at the time of the
incident. When the accident occurred, the victim was in the act of unloading
his cargoes, which he had every right to do, from petitioner's vessel. As
earlier stated, a carrier is duty bound not only to bring its passengers safely
to their destination but also to afford them a reasonable time to claim their
baggage.
It is not definitely shown that one (1) hour prior to the incident, the victim
had already disembarked from the vessel. Petitioner failed to prove this.
What is clear to us is that at the time the victim was taking his cargoes, the
vessel had already docked an hour earlier. In consonance with common
shipping procedure as to the minimum time of one (1) hour allowed for the
passengers to disembark, it may be presumed that the victim had just
gotten off the vessel when he went to retrieve his baggage. Yet, even if he
had already disembarked an hour earlier, his presence in petitioner's
premises was not without cause. The victim had to claim his baggage which
was possible only one (1) hour after the vessel arrived since it was
admittedly standard procedure in the case of petitioner's vessels that the
unloading operations shall start only after that time. Consequently, under
the foregoing circumstances, the victim Anacleto Viana is still deemed a
passenger of said carrier at the time of his tragic death.
II. Under the law, common carriers are, from the nature of their business
and for reasons of public policy, bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each
case. 15 More particularly, 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. 16 Thus, where a passenger dies or is injured, the common
carrier is presumed to have been at fault or to have acted

negligently. 17 This gives rise to an action for breach of contract of carriage

where all that is required of plaintiff is to prove the existence of the contract
of carriage and its non-performance by the carrier, that is, the failure of the
carrier to carry the passenger safely to his destination, 18which, in the
instant case, necessarily includes its failure to safeguard its passenger with
extraordinary diligence while such relation subsists.
The presumption is, therefore, established by law that in case of a
passenger's death or injury the operator of the vessel was at fault or
negligent, having failed to exercise extraordinary diligence, and it is
incumbent upon it to rebut the same. This is in consonance with the avowed
policy of the State to afford full protection to the passengers of common
carriers which can be carried out only by imposing a stringent statutory
obligation upon the latter. Concomitantly, this Court has likewise adopted a
rigid posture in the application of the law by exacting the highest degree of
care and diligence from common carriers, bearing utmost in mind the
welfare of the passengers who often become hapless victims of indifferent
and profit-oriented carriers. We cannot in reason deny that petitioner failed
to rebut the presumption against it. Under the facts obtaining in the present
case, it cannot be gainsaid that petitioner had inadequately complied with
the required degree of diligence to prevent the accident from happening.
As found by the Court of Appeals, the evidence does not show that there
was a cordon of drums around the perimeter of the crane, as claimed by
petitioner. It also adverted to the fact that the alleged presence of visible
warning signs in the vicinity was disputable and not indubitably established.
Thus, we are not inclined to accept petitioner's explanation that the victim
and other passengers were sufficiently warned that merely venturing into
the area in question was fraught with serious peril. Definitely, even
assuming the existence of the supposed cordon of drums loosely placed
around the unloading area and the guard's admonitions against entry
therein, these were at most insufficient precautions which pale into
insignificance if considered vis-a-vis the gravity of the danger to which the
deceased was exposed. There is no showing that petitioner was
extraordinarily diligent in requiring or seeing to it that said precautionary
measures were strictly and actually enforced to subserve their purpose of
preventing entry into the forbidden area. By no stretch of liberal evaluation
can such perfunctory acts approximate the "utmost diligence of very
cautious persons" to be exercised "as far as human care and foresight can
provide" which is required by law of common carriers with respect to their
passengers.
While the victim was admittedly contributorily negligent, still petitioner's
aforesaid failure to exercise extraordinary diligence was the proximate and
direct cause of, because it could definitely have prevented, the former's
death. Moreover, in paragraph 5.6 of its petition, at bar, 19 petitioner has
expressly conceded the factual finding of respondent Court of Appeals that
petitioner did not present sufficient evidence in support of its submission
that the deceased Anacleto Viana was guilty of gross negligence. Petitioner
cannot now be heard to claim otherwise.
No excepting circumstance being present, we are likewise bound by
respondent court's declaration that there was no negligence on the part of
Pioneer Stevedoring Corporation, a confirmation of the trial court's finding
to that effect, hence our conformity to Pioneer's being absolved of any
liability.
As correctly observed by both courts, Aboitiz joined Pioneer in proving the
alleged gross negligence of the victim, hence its present contention that the
death of the passenger was due to the negligence of the crane operator
cannot be sustained both on grounds, of estoppel and for lack of evidence
on its present theory. Even in its answer filed in the court below it readily
alleged that Pioneer had taken the necessary safeguards insofar as its
unloading operations were concerned, a fact which appears to have been
accepted by the plaintiff therein by not impleading Pioneer as a defendant,
and likewise inceptively by Aboitiz by filing its third-party complaint only
after ten (10) months from the institution of the suit against it.
Parenthetically, Pioneer is not within the ambit of the rule on extraordinary
diligence required of, and the corresponding presumption of negligence
foisted on, common carriers like Aboitiz. This, of course, does not detract

from what we have said that no negligence can be imputed to Pioneer but,
that on the contrary, the failure of Aboitiz to exercise extraordinary diligence
for the safety of its passenger is the rationale for our finding on its liability.

WHEREFORE, the petition is DENIED and the judgment appealed from is

hereby AFFIRMED in toto.
SO ORDERED.

G.R. No. L-19495

February 2, 1924

HONORIO LASAM, ET AL., plaintiffs-appellants,

vs.
FRANK SMITH, JR., defendant-appellant.
Palma and Leuterio for plaintiffs-appellants.
Mariano Alisangco for defendant-appellant.
OSTRAND, J.:
The plaintiff are husband and wife and this action is brought to recover damages
in the sum of P20,000 for physical injuries sustained by them in an automobile
accident. The trial court rendered a judgment in their favor for the sum of
P1,254.10, with legal interest from the date of the judgment. Both the plaintiffs
and the defendant appeal, the former maintaining that the damages awarded are
insufficient while the latter denies all liability for any damages whatever.
It appears from the evidence that on February 27, 1918, the defendant was the
owner of a public garage in the town of San Fernando, La Union, and engaged in
the business of carrying passengers for hire from the one point to another in the
Province of La Union and the surrounding provinces. On the date mentioned, he
undertook to convey the plaintiffs from San Fernando to Currimao, Ilocos Norte,
in a Ford automobile. On leaving San Fernando, the automobile was operated by
a licensed chauffeur, but after having reached the town of San Juan, the
chauffeur allowed his assistant, Remigio Bueno, to drive the car. Bueno held no
driver's license, but had some experience in driving, and with the exception of
some slight engine trouble while passing through the town of Luna, the car
functioned well until after the crossing of the Abra River in Tagudin, when,
according to the testimony of the witnesses for the plaintiffs, defects developed in
the steering gear so as to make accurate steering impossible, and after
zigzagging for a distance of about half a kilometer, the car left the road and went
down a steep embankment.
The defendant, in his testimony, maintains that there was no defect in the
steering gear, neither before nor after the accident, and expresses the opinion
that the swaying or zigzagging of the car must have been due to its having been
driven at an excessive rate of speed. This may possibly be true, but it is, from our
point of view, immaterial whether the accident was caused by negligence on the
part of the defendant's employees, or whether it was due to defects in the
automobile; the result would be practically the same in either event.
In going over the bank of the road, the automobile was overturned and the
plaintiffs pinned down under it. Mr. Lasam escaped with a few contusions and a
"dislocated" rib , but his wife, Joaquina Sanchez, received serious injuries,
among which was a compound fracture of one of the bones in her left wrist. She
also appears to have suffered a nervous breakdown from which she had not fully
recovered at the time of the trial.
The complaint in the case was filed about a year and a half after the occurrence
above related. It alleges, among other things, that the accident was due to
defects in the automobile as well as to the incompetence and negligence of the
chauffeur, and the case appears to have been tried largely upon the theory that it
sounds in tort and that the liability of the defendant is governed by article 1903 of
the Civil Code. The trial court held, however, that the cause of action rests on the
defendant's breach of the contract of carriage and that, consequently, articles
1101-1107 of the Civil Code, and not article 1903, are applicable. The court
further found that the breach of the contract was not due to fortuitous events and
that, therefore, the defendant was liable in damages.
In our opinion, the conclusions of the court below are entirely correct. That upon
the facts stated the defendant's liability, if any, is contractual, is well settled by
previous decisions of the court, beginning with the case of Rakes vs. Atlantic,
Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractual
liability and contractual liability has been so ably and exhaustively discussed in
various other cases, that nothing further need here be said upon that subject.
(See Cangco vs. Manila Railroad Co., 38 Phil., 768; Manila Railroad Co. vs.

Compania Trasatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia
vs. Manila Electric Railroad & Light Co., 40 Phil., 706.) It is sufficient to reiterate
that the source of the defendant's legal liability is the contract of carriage; that by
entering into that contract he bound himself to carry the plaintiffs safely and
securely to their destination; and that having failed to do so he is liable in
damages unless he shows that the failure to fulfill his obligation was due to
causes mentioned in article 1105 of the Civil Code, which reads as follows:
No one shall be liable for events which could not be foreseen or
which, even if foreseen, were inevitable, with the exception of the
cases in which the law expressly provides otherwise and those in
which the obligation itself imposes such liability.
This brings us to the principal question in the case:
What is meant by "events which cannot be foreseen and which, having been
foreseen, are inevitable?" The Spanish authorities regard the language employed
as an effort to define the term caso fortuito and hold that the two expressions are
synonymous. (Manresa, Comentarios al Codigo Civil Espaol, vol. 8, pp. 88 et
seq.; Scvola, Codigo Civil, vol. 19, pp. 526 et seq.)
The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which
defines caso fortuito as "occasion que a case por aventura de que non se puede
ante ver. E son estos, derrivamientos de casas e fuego que se enciende a so
ora, e quebrantamiento de navio, fuerca de ladrones. . . . (An event that takes
place by accident and could not have been foreseen. Examples of this are
destruction of houses, unexpected fire, shipwreck, violence of robbers. . . .)"
Escriche defines caso fortuito as "an unexpected event or act of God which could
either be foreseen nor resisted, such as floods, torrents, shipwrecks,
conflagrations, lightning, compulsion, insurrections, destructions, destruction of
buildings by unforseen accidents and other occurrences of a similar nature."
In discussing and analyzing the term caso fortuito the Enciclopedia Juridica
Espaola says: "In a legal sense and, consequently, also in relation to contracts,
a caso fortuito presents the following essential characteristics: (1) The cause of
the unforeseen and unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the human will. (2) It must be
impossible to foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid. (3) The occurrence must be such as to
render it impossible for the debtor to fulfill his obligation in a normal manner. And
(4) the obligor (debtor) must be free from any participation in the aggravation of
the injury resulting to the creditor." (5 Enciclopedia Juridica Espaola, 309.)
As will be seen, these authorities agree that some extraordinary circumstance
independent of the will of the obligor, or of his employees, is an essential element
of a caso fortuito. Turning to the present case, it is at once apparent that this
element is lacking. It is not suggested that the accident in question was due to an
act of God or to adverse road conditions which could not have been foreseen. As
far as the records shows, the accident was caused either by defects in the
automobile or else through the negligence of its driver. That is not a caso fortuito.
We agree with counsel that neither under the American nor Spanish law is a
carrier of passengers an absolute insurer against the risks of travel from which
the passenger may protect himself by exercising ordinary care and diligence. The
case of Alba vs. Sociedad Anonima de Tranvias, Jurisprudencia Civil, vol. 102, p.
928, cited by the defendant in support of his contentions, affords a good
illustration of the application of this principle. In that case Alba, a passenger on a
street car, was standing on the platform of the car while it was in motion. The car
rounded a curve causing Alba to lose his balance and fall off the platform,
sustaining severe injuries. In an action brought by him to recover damages, the
supreme court of Spain held that inasmuch as the car at the time of the accident
was travelling at a moderate rate of speed and there was no infraction of the
regulations, and the plaintiff was exposed to no greater danger than that inherent
in that particular mode of travel, the plaintiff could not recover, especially so
since he should have been on his guard against a contingency as natural as that
of losing his balance to a greater or less extent when the car rounded the curve.

But such is not the present case; here the passengers had no means of avoiding
the danger or escaping the injury.
The plaintiffs maintain that the evidence clearly establishes that they are entitled
to damages in the sum of P7,832.80 instead of P1,254.10 as found by the trial
court, and their assignments of error relate to this point only.
There can be no doubt that the expenses incurred by the plaintiffs as a result of
the accident greatly exceeded the amount of the damages awarded. But bearing
in mind that in determining the extent of the liability for losses or damages
resulting from negligence in the fulfillment of a contractual obligation, the courts
have "a discretionary power to moderate the liability according to the
circumstances" (De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706;

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-6092

March 8, 1912

TAN CHIONG SIAN, plaintiff-appellee,

vs.
INCHAUSTI AND CO., defendant-appellant.
Haussermann, Cohn and Fisher for appellant.
O'Brien and DeWitt for appellee.
TORRES, J.:
This is an appeal through bill of exceptions, by counsel for the firm of
Inchausti & Co., from a judgment rendered by the Honorable A.S.
Crossfield, judge.
On January 11, 1909, the Chinaman, Tan Chiong Sian or Tan Chinto, filed a
written complaint, which was amended on the 28th of the same month and
again amended on October 27 of the same year, against the said firm,
wherein he alleged, among other things, as a cause of action: That, on or
about November 25, 1908, the plaintiff delivered to the defendant 205
bundles or cases of general merchandise belonging to him, which Inchausti
& Co., upon receiving, bound themselves to deliver in the pueblo of
Catarman, Province of Samar, to the Chinaman, Ong Bieng Sip, and in
consideration of the obligations contracted by the defendant party, the
plaintiff obligated himself to pay to the latter the sum of P250 Philippine
currency, which payment should be made upon the delivery of the said
merchandise in the said pueblo Catarman; but that the defendant company
neither carried nor delivered the aforementioned merchandise to the said
Ong Bieng Sip, in Catarman, but unjustly and negligently failed to do so,
with the result that the said merchandise was almost totally lost; that, had
the defendant party complied well and faithfully with its obligation, according
to the agreement made, the merchandise concerned would have a value of
P20,000 in the said pueblo of Catarman on the date when it should have
been delivered there, wherefore the defendant party owed the plaintiff the
said sum of P20,000, which it had not paid him, or any part thereof,
notwithstanding the many demands of the plaintiff; therefore the latter
prayed for judgment against the defendant for the said sum, together with
legal interest thereon from November 25, 1908, and the costs of the suit.
Counsel for the defendant company, in his answer, set forth, that he
admitted the allegations of paragraphs 1 and 2 of the complaint, amended
for the second time, and denied those paragraphs 3, 4, 5, 6 and 7 of the
same. As his first special defense, he alleged that on or about November
28, 1908, his client, the said firm, received in Manila from Ong Bieng Sip
205 bundles, bales, or cases of merchandise to be placed on board the
steamerSorsogon, belonging to the defendant, for shipment to the port of
Gubat, Province of Sorsogon, to be in the said port transshipped into
another of the defendant's vessels for transportation to the port of
Catarman, Samar, and delivered to the aforesaid Chinaman, Ong Bieng

art. 1103, Civil Code), we do not think that the evidence is such as to justify us in
interfering with the discretion of the court below in this respect. As pointed out by
that court in its well-reasoned and well-considered decision, by far the greater
part of the damages claimed by the plaintiffs resulted from the fracture of a bone
in the left wrist of Joaquina Sanchez and from her objections to having a
decaying splinter of the bone removed by a surgical operation. As a
consequence of her refusal to submit such an operation, a series of infections
ensued and which required constant and expensive medical treatment for several
years. We agree with the court below that the defendant should not be charged
with these expenses.
For the reasons stated, the judgment appealed from is affirmed, without costs in
this instance. So ordered.

Sip; that the defendant company, upon receiving the said merchandise from
the latter, Ong Bieng Sip, and on its entering into a contract of maritime
transportation with him did not know and was not notified that the plaintiff,
Tan Chiong Sian, had any interest whatever in the said merchandise and
had made with the plaintiff no contract relative to the transportation of such
goods, for, on receiving the latter from the said Ong Bieng Sip, for
transportation, there were made out and delivered to him three bills of
lading, Nos. 38, 39 and 76, which contained a list of the goods received
and, printed on the back thereof were the terms of the maritime
transportation contract entered into by and between the plaintiff and the
defendant company, copies of which bills of lading and contract, marked as
Exhibits A, B, and C, are of record, attached to and made an integral part of
the said answer; that Ong Bieng Sip accepted the said bills of lading and
the contract extended on the backs thereof; that the merchandise
mentioned was put on board the steamerSorsogon and carried to the port
of Gubat, Province of Sorsogon, where this vessel arrived on November 28,
1908, on which date the lorcha Pilar, into which the said merchandise was
to be transshipped for carriage to Catarman, was not at Gubat, and
therefore the goods had to be unloaded and stored in the defendant
company's warehouses at Gubat; that, on the 4th of December of the same
year, the lorcha Pilar arrived at Gubat and, after the termination of certain
necessary work, the goods received from Chinaman, Ong Bieng Sip, were
taken aboard the same, together with other merchandise belonging to the
defendant party, for the purpose of transportation to the port of Catarman;
that, before the said lorcha could leave for its destination, a strong wind
arose which in the course of the day increased in force until, early in the
morning of the following day, the lorcha was dragged and driven, by the
force of the storm, upon the shore, despite the means employed by the
crew to avoid the accident, and notwithstanding the five anchors that held
the craft, which was thus wrecked and completely destroyed and the
merchandise with which it was laden, including the 205 bundles or
packages taken aboard for the said Chinaman, was scattered on the shore;
that, on the occasion, the lorcha Pilar was in good condition, provided with
all the proper and necessary equipment and accessories and carried a crew
of sufficient number in command of a skillful patron or master, wherefore
the wreck of the said craft was solely due to the irresistible force of the
elements and of the storm which drove it upon the shore; that the defendant
company, with the greatest possible diligence, gathered up the said
shipwrecked goods that had been shipped by the Chinaman, Ong Bieng
Sip, but, owing to the damage they had suffered, it was impossible to
preserve them, so, after having offered to deliver them to him, the
defendant proceeded, in the presence of a notary, to sell them at public
auction and realized from the sale thereof P1,693.67, the reasonable value
of the same in the condition in which they were after they had been
gathered up and salved from the wreck of the lorcha Pilar; that the
expenses occasioned by such salvage and sale of the said goods
amounted to P151.35, which were paid by the defendant party; that the
latter offered to the Chinese shipper, the plaintiff, the amount realized from
the sale of the said merchandise, less P151.35, the amount of the
expenses, and the sum of P250, the amount of the freight stipulated, and is
still willing to pay such products of the said sale to the aforementioned Ong
Bieng Sip or to any other person who should establish his subrogation to
the rights of the Chinaman, Ong Bieng Sip, with respect to the said amount;
that, as his client's second special defense, the defendant company alleged
that one of the conditions of the shipping contract executed between it and
the Chinaman, Ong Bieng Sip, relative to the transportation of the said
merchandise, was that the said firm should not be held liable for more than
P25 for any bundle or package, unless the value of its contents should be

stated in the bill of lading, and that the shipper, Chinaman, Ong Bieng Sip,
did not state in the bill of lading the value of any of the bundles or packages
in which the goods shipped by him were packed. Counsel for the defendant
company, therefore, prayed the court to absolve his client from the
complaint, with costs against the plaintiff.
After the hearing of the case and the introduction of testimony by the
parties, judgment was rendered, on March 18, 1910, in favor of the plaintiff,
Tan Chiong Sian or Tan Chinto, against the defendant Inchausti and Co., for
the sum of P14,642.63, with interest at the rate of 6 per cent per annum
from January 11, 1909, and for the costs of the trial. The defendant party
appealed from this judgment.
This suit was brought for the purpose of collecting a certain sum which it is
alleged the defendant firm owes the plaintiff for losses and damages
suffered by the latter as a result of the former's noncompliance with the
terms of an agreement or contract to transport certain merchandise by sea
from this city to the pueblo of Catarman, Island of Samar, for the sum of
P250.
The principal question to be determined is whether the defendant is liable
for the loss of the merchandise and for failure to deliver the same at the
place of destination, or whether he is relieved from responsibility on the
ground offorce majeure.
Article 1601 of the Civil Code prescribes:
Carriers of goods by land or by water shall be subject with
regard to the keeping and preservation of the things entrusted to
them, to the same obligations as determined for innkeepers by
articles 1783 and 1784.
The provisions of this article shall be understood without
prejudice to what is prescribed by the Code of Commerce with
regard to transportation by sea and land.
Article 1602 reads:
Carriers are also liable for the loss of and damage to the things
which they receive, unless they prove that the loss or damage
arose from a fortuitous event or force majeure.
The articles aforecited are as follows:
ART. 1783. The depositum of goods made by travelers in inns or
hostelries shall also be considered a necessary one. The
keepers of inns and hostelries are liable for them as such
bailees, provided that notice thereof may have been given to
them or to their employees, and that the travelers on their part
take the precautions which said innkeepers or their substitutes
may have advised them concerning the care and vigilance of
said goods.
ART. 1784. The liability referred to in the preceding article shall
include damages to the goods of the travelers caused the
servants or employees of the keepers for inns or hostelries as
well as by strangers, but not those arising from robbery or which
may be caused by any other case of force majeure.
Article 361 of the Code of Commerce provides:
Merchandise shall be transported at the risk and venture of the
shipper, unless the contrary was expressly stipulated.
Therefore, all damages and impairment suffered by the goods in
transportation, by reason of accident,force majeure, or by virtue

of the nature or defect of the articles, shall be for the account

and risk of the shipper.
The proof of these accidents in incumbent on the carrier.
ART. 362. The carrier, however, shall be liable for the losses and
damages arising from the causes mentioned in the foregoing
article if it is proved that they occurred on account of his
negligence or because he did not take the precautions usually
adopted by careful persons, unless the shipper committed fraud
in the bill of lading, stating that the goods were of a class or
quality different from what they really were.
If, notwithstanding the precaution referred to in this article, the
goods transported run the risk of being lost on account of the
nature or by reason of an unavoidable accident, without there
being time for the owners of the same to dispose thereof, the
carrier shall proceed to their sale, placing them for this purpose
at the disposal of the judicial authority or of the officials
determined by special provisions.
ART. 363. With the exception of the cases prescribed in the
second paragraph of article 361, the carrier shall be obliged to
deliver the goods transported in the same condition in which,
according to the bill of lading, they were at the time of their
receipt, without any detriment or impairment, and should he not
do so, he shall be obliged to pay the value of the goods not
delivered at the point where they should have been and at the
time the delivery should have taken place.
If part of the goods transported should be delivered the
consignee may refuse to receive them, when he proves that he
can not make use thereof without the others.
On November 25, 1908, Inchausti & Co. received in Manila from the
Chinaman, Ong Bieng Sip, 205 bundles, bales or cases of goods to be
conveyed by the steamer Sorsogon to the port of Gubat, Province of
Sorsogon, where they were to be transshipped to another vessel belonging
to the defendant company and by the latter transported to the pueblo of
Catarman, Island of Samar, there to be delivered to the Chinese shipper
with whom the defendant party made the shipping contract. To this end
three bills of lading were executed, Nos. 38, 39, and 76, copies of which,
marked as Exhibits A, B, and C, are found on pages 13, 14, and 15 of the
record.
The steamer Sorsogon, which carried the goods, arrived at the port of
Gubat on the 28th of that month and as thelorcha Pilar, to which the
merchandise was to be transshipped for its transportation to Catarman, was
not yet there, the cargo was unloaded and stored in the defendant
company's warehouses at that port.
Several days later, the lorcha just mentioned arrived at Gubat and, after the
cargo it carried had been unloaded, the merchandise belonging to the
Chinaman, Ong Bieng Sip, together with other goods owned by the
defendant Inchausti & Co., was taken aboard to be transported to
Catarman; but on December 5, 1908, before the Pilarcould leave for its
destination, towed by the launch Texas, there arose and, as a result of the
strong wind and heavy sea, the lorcha was driven upon the shore and
wrecked, and its cargo, including the Chinese shipper's 205 packages of
goods, scattered on the beach. Laborers or workmen of the defendant
company, by its order, then proceeded to gather up the plaintiff's
merchandise and, as it was impossible to preserve it after it was salved
from the wreck of the lorcha, it was sold at public auction before a notary for
the sum of P1,693.67.
The contract entered into between the Chinese shipper, Ong Bieng Sip, and
the firm of Inchausti & Co., provided that transportation should be furnished
from Manila to Catarman, although the merchandise taken aboard the
steamer Sorsogon was to be transshipped at Gubat to another vessel

which was to convey it from that port to Catarman; it was not stipulated in
the said contract that the Sorsogon should convey the goods to their final
destination, nor that the vessel into which they were to be transshipped,
should be a steamer. The shipper, Ong Bieng Sip, therefore assented to
these arrangements and made no protest when his 205 packages of
merchandise were unloaded from the ship and, on account of the absence
of the lorcha Pilar, stored in the warehouses at Gubat nor did he offer any
objection to the lading of his merchandise on to this lorcha as soon as it
arrived and was prepared to receive cargo; moreover, he knew that to
reach the port of Catarman with promptness and dispatch, the lorcha had to
be towed by some vessel like the launch Texas, which the defendant
company had been steadily using for similar operations in those waters.
Hence the shipper, Ong Bieng Sip, made no protest or objection to the
methods adopted by the agents of the defendant for the transportation of
his gods to the port of their destination, and the record does not show that
in Gubat the defendant possessed any other means for the conveyance
and transportation of merchandise, at least for Catarman, than the lorcha
Pilar, towed by said launch and exposed during its passage to all sorts of
accidents and perils from the nature and seafaring qualities of a lorcha,
from the circumstances then present and the winds prevailing on the Pacific
Ocean during the months of November and December.
It is to be noted that a lorcha is not easily managed or steered when the
traveling, for, out at sea, it can only be moved by wind and sails; and along
the coast near the shore and in the estuaries where it customarily travels, it
can only move by poling. For this reason, in order to arrive at the pueblo of
Catarman with promptness and dispatch, the lorcha was usually towed by
the launch Texas.
The record does not show that, from the afternoon of the 4th of December,
1908, until the morning of the following day, the 5th, the patron or master of
the lorcha which was anchored in the cove of Gubat, received any notice
from the captain of the steamer Ton Yek, also anchored near by, of the near
approach of a storm. The said captain, Juan Domingo Alberdi, makes no
reference in his sworn testimony of having given any such notice to
thepatron of the lorcha, nor did the latter, Mariano Gadvilao, testify that he
received such notice from the captain of the Ton Yek or from the person in
charge of the Government observatory. Gadvilao, the patron, testified that
only between 10 and 11 o'clock of Saturday morning, the 5th of December,
was he informed by Inchausti & Co.'s agent in Gubat that a baguio was
approaching; that thereupon, on account of the condition of the sea, he
dropped the four anchors that the lorcha had on board and immediately
went ashore to get another anchor and a new cable in order more securely
to hold the boat in view of the predicted storm. This testimony was
corroborated by the said representative, Melchor Muoz. So the lorcha,
when the storm broke upon it, was held fast by five anchors and was, as
testified by the defendant without contradiction or evidence to the contrary,
well found and provided with all proper and necessary equipment and had a
sufficient crew for its management and preservation.
The patron of the lorcha testified specifically that at Gubat or in its
immediate vicinity there is no port whatever adequate for the shelter and
refuge of vessels in cases of danger, and that, even though there were, on
being advised between 10 and 11 o'clock of the morning of the 5th, of the
approach of a storm from the eastern Pacific, it would have been impossible
to spread any sails or weigh anchor on the lorcha without being dragged or
driven against the reefs by the force of the wind. As the craft was not
provided with steam or other motive power, it would not have been possible
for it to change its anchorage, nor move from the place where it lay, even
several hours before the notice was received by its patron. A lorcha can not
be compared with a steamer which does not need the help or assistance of
any other vessel in its movements.
Due importance must be given to the testimony of the weather observer,
Antonio Rocha, that the notice received from the Manila Observatory on the
afternoon of December 4, with regard to a storm travelling from the east of
the Pelew Islands toward the northwest, was not made known to the people
of Gubat and that he merely left a memorandum notice on the desk of the
station, intending to give explanations thereof to any person who should

request them of him. So the notice of the storm sent by the Manila
Observatory was only known to the said observer, and he did not apprise
the public of the approach of the storm until he received another notice from
Manila at 20 minutes past 8 o'clock on Saturday morning, December 5.
Then he made a public announcement and advised the authorities of the
storm that was coming.
The patron of the lorcha Pilar is charged with gross negligence for not
having endeavored to remove his craft to a safe place in the Sabang River,
about half a mile from where it was anchored.
In order to find out whether there was or was not such negligence on the
part of the patron, it becomes necessary to determine, first, whether
the lorcha, on the morning of December 5, could be moved by its own
power and without being towed by any steamboat, since it had no steam
engine of its own; second, whether the lorcha, on account of its draft and
the shallowness of the mouth of the said river, could have entered the latter
before the storm broke.
The patron, Mariano Gadvilao, stated under oath that the weather during
the night of December 4 was not threatening and he did not believe there
would be a storm; that he knew the Sabang River; and that the lorchaPilar,
when loaded, could not enter as there was not sufficient water in its
channel; that, according to an official chart of the port of Gubat, the bar of
the Sabang River was covered by only a foot and a half of water at ordinary
low tide and the lorcha Pilar, when loaded, drew 6 feet and a half; that aside
from the fact that the condition of the sea would not have permitted
the lorcha to take shelter in the said river, even could it have relied upon the
assistance of a towboat, at half past 8 o'clock in the morning the tide was
still low; there was but little water in the river and still less over the bar.
It was proven by the said official chart of the port of Gubat, that the depth of
water over the bar or entrance of the Sabang River is only one foot and a
half at ordinary low tide; that the rise and fall of the tide is about 4__ feet,
the highest tide being at 2 o'clock in the afternoon of every day; and at that
hour, on the 5th of December, the hurricane had already made its
appearance and the wind was blowing with all its fury and raising great
waves.
The lorcha Pilar, loaded as it had been from the afternoon of December 4,
even though it could have been moved by means of poles, without being
towed, evidently could not have entered the Sabang River on the morning
of the 5th, when the wind began to increase and the sea to become rough,
on account of the low tide, the shallowness of the channel, and the boat's
draft.
The facts stated in the foregoing paragraph were proved by the said chart
which was exhibited in evidence and not rejected or assailed by the plaintiff.
They were also supported by the sworn testimony of the patron of
thelorcha, unrebutted by any oral evidence on the part of the plaintiff such
as might disprove the certainty of the facts related, and, according to
section 275 of the Code of Civil Procedure, the natural phenomenon of the
tides, mentioned in the official hydrographic map, Exhibit 7, which is prima
facie evidence on the subject, of the hours of its occurrence and of the
conditions and circumstances of the port of Gubat, shall be judicially
recognized without the introduction of proof, unless the facts to the contrary
be proven, which was not done by the plaintiff, nor was it proven that
between the hours of 10 and 11 o'clock of the morning of December 5,
1908, there did not prevail a state of low tide in the port of Gubat.
The oral evidence adduced by the plaintiff with respect to the depth of the
Sabang River, was unable to overcome that introduced by the defendant,
especially the said chart. According to section 320 of the Code of Civil
Procedure, such a chart is prima facie evidence of particulars of general
notoriety and interest, such as the existence of shoals of varying depths in
the bar and mouth of the Sabang River and which obstruct the entrance into
the same; the distance, length, and number of the said shoals, with other
details apparently well known to thepatron of the lorcha Pilar, to judge from
his testimony.

Vessels of considerable draft, larger than the said lorcha, might have
entered the Sabang River some seven or nine years before, according to
the testimony of the Chinaman, Antonio B. Yap Cunco, though he did not
state whether they did so at high tide; but, since 1901, or previous years,
until 1908, changes may have taken place in the bed of the river, its mouth
and its bar. More shoals may have formed or those in existence may have
increased in extent by the constant action of the sea. This is the reason why
the patron, Gadvilao, who was acquainted with the conditions of the port
and cove of Gubat, positively declared that the lorcha Pilar could not, on
account of her draft, enter the Sabang River, on account of low water.
The patron of the lorcha, after stating (p.58) that at Gubat or in its vicinity
there is no port that affords shelter, affirmed that it was impossible to hoist
the sails or weigh the anchors on the morning of the 5th of December,
owing to the force of the wind and because the boat would immediately
have been dragged or driven upon the shoals; that furthermore
the lorcha was anchored in a channel some 300 brazas wide, but,
notwithstanding this width, the Pilar was, for want of motive power, unable
to move without being exposed to be dashed against the coast by the
strong wind and the heavy sea then prevailing. The testimony of this
witness was neither impugned nor offset by any evidence whatever; he was
a patron of long years of service and of much practice in seafaring,
especially in the port of Gubat and its vicinity, who had commanded or been
intrusted with the command of other crafts similar to the lorcha Pilar and his
testimony was absolutely uncontradicted.
The patron Gadvilao, being cognizant of the duties imposed upon him by
rules 14 and 15 of article 612, and others, of the Code of Commerce,
remained with sailors, during the time the hurricane was raging, on board
thelorcha from the morning of December 5 until early the following morning,
the 6th, without abandoning the boat, notwithstanding the imminent peril to
which he was exposed, and kept to his post until after the wreck and
thelorcha had been dashed against the rocks. Then he solicited help from
the captain of the steamer Ton Yek, and, thanks to the relief afforded by a
small boat sent by the latter officer, Gadvilao with his crew succeeded in
reaching land and immediately reported the occurrence to the
representative of Inchausti & Co. and to the public official from whom he
obtained the document of protest, Exhibit 1. By such procedure, he showed
that, as a patron skilled in the exercise of his vocation, he performed the
duties imposed by law in cases of shipwreck brought about byforce
majeure.
Treating of shipwrecks, article 840 of the Code of Commerce prescribes:
The losses and damages suffered by a vessel and her cargo by
reason of shipwreck or standing shall be individually for the
account of the owners, the part of the wreck which may be saved
belonging to them in the same proportion.
And Article 841 of the same code reads:
If the wreck or stranding should arise through the malice,
negligence, or lack of skill of the captain, or because the vessel
put to sea insufficiently repaired and supplied, the owner or the
freighters may demand indemnity of the captain for the damages
caused to the vessel or cargo by the accident, in accordance
with the provisions contained in articles 610, 612, 614, and 621.
The general rule established in the first of the foregoing articles is that the
loss of the vessel and of its cargo, as the result of shipwreck, shall fall upon
the respective owners thereof, save for the exceptions specified in the
second of the said articles.

These legal provisions are in harmony with those of articles 361 and 362 of
the Code of Commerce, and are applicable whenever it is proved that the
loss of, or damage to, the goods was the result of a fortuitous event or
offorce majeure; but the carrier shall be liable for the loss or the damage
arising from the causes aforementioned, if it shall have been proven that
they occurred through his own fault or negligence or by his failure to take
the same precautions usually adopted by diligent and careful persons.
In the contract made and entered into by and between the owner of the
goods and the defendant, no term was fixed within which the said
merchandise should be delivered to the former at Catarman, nor was it
proved that there was any delay in loading the goods and transporting them
to their destination. From the 28th of November, when the
steamer Sorsogon arrived at Gubat and landed the said goods belonging to
Ong Bieng Sip to await thelorcha Pilar which was to convey them to
Catarman, as agreed upon, no vessel carrying merchandise made the
voyage from Gubat to the said pueblo of the Island of Samar, and with Ong
Bieng Sip's merchandise there were also to be shipped goods belonging to
the defendant company, which goods were actually taken on board the
saidlorcha and suffered the same damage as those belonging to the
Chinaman. So that there was no negligence, abandonment, or delay in the
shipment of Ong Bieng Sip's merchandise, and all that was done by the
carrier, Inchausti & Co., was what it regularly and usually did in the
transportation by sea from Manila to Catarman of all classes of
merchandise. No attempt has been made to prove that any course other
than the foregoing was pursued by that firm on this occasion; therefore the
defendant party is not liable for the damage occasioned as a result of the
wreck or stranding of the lorcha Pilar because of the hurricane that
overtook this craft while it was anchored in the port of Gubat, on December
5, 1908, ready to be conveyed to that of Catarman.
It is a fact not disputed, and admitted by the plaintiff, that
the lorcha Pilar was stranded and wrecked on the coast of Gubat during the
night of the 5th or early in the morning of the 6th of December, 1908, as a
result of a violent storm that came from the Pacific Ocean, and,
consequently, it is a proven fact that the loss or damage of the goods
shipped on the said lorcha was due to the force majeure which caused the
wreck of the said craft.
According to the aforecited article 361 of the Code of Commerce,
merchandise shall be transported at the risk and venture of the shipper,
unless the contrary be expressly stipulated. No such stipulation appears of
record, therefore, all damages and impairment suffered by the goods in
transportation, by reason of accident, force majeure, or by virtue of the
nature or defect of the articles, are for the account and risk of the shipper.
A final clause of this same article adds that the burden of proof of these
accidents is upon the carrier; the trial record fully discloses that the loss and
damage of the goods shipped by the Chinaman, Ong Bieng Sip, was due to
the stranding and wreck of the lorcha Pilar in the heavy storm or hurricane
aforementioned; this the plaintiff did not deny, and admitted that it took
place between the afternoon of the 5th and early in the morning of the 6th
of December, 1908, so it is evident that the defendant is exempt from the
obligation imposed by the law to prove the occurrence of the said storm,
hurricane, or cyclone in the port of Gubat, and, therefore, if said goods were
lost or damaged and could not be delivered in Catarman, it was due to a
fortuitous event and a superior, irresistible natural force, or force majeure,
which completely disabled the lorcha intended for their transportation to the
said port of the Island of Samar.
The record bears no proof that the said loss or damage caused by the
stranding or wreck of the lorcha Pilar as a result of the storm mentioned,
occurred through carelessness or negligence on the part of the defendant
company, its agents or the patron of the said lorcha, or because they did
not take the precautions usually adopted by careful and diligent persons, as
required by article 362 of the Code of Commerce; the defendant company,
as well as its agents and the patron of the lorcha, had a natural interest in
preserving the craft and its own goods laden therein an interest equal to
that of the Chinese shipper in preserving his own which were on board the
ship lorcha and, in fact, the defendant, his agents and the patron did

take the measures which they deemed necessary and proper in order to
save the lorcha and its cargo from the impending danger; accordingly,
thepatron, as soon as he was informed that a storm was approaching,
proceeded to clear the boat of all gear which might offer resistance to the
wind, dropped the four anchors he had, and even procured an extra anchor
from the land, together with a new cable, and cast it into the water, thereby
adding, in so far as possible, to the stability and security of the craft, in
anticipation of what might occur, as presaged by the violence of the wind
and the heavy sea; and Inchausti & Company's agent furnished the articles
requested by the patron of the lorcha for the purpose of preventing the loss
of the boat; thus did they all display all the diligence and care such as might
have been employed by anyone in similar circumstances, especially
the patron who was responsible for the lorcha under his charge; nor is it
possible to believe that the latter failed to adopt all the measures that were
necessary to save his own life and those of the crew and to free himself
from the imminent peril of shipwreck.
In view of the fact that the lorcha Pilar had no means of changing its
anchorage, even supposing that there was a better one, and was unable to
accept help from any steamer that might have towed it to another point, as
wherever it might have anchored, it would continually have been exposed
to the lashing of the waves and to the fury of the hurricane, for the port of
Gubat is a cove or open roadstead with no shelter whatever from the winds
that sweep over it from the Pacific Ocean, and in view of the circumstances
that it was impossible for the saidlorcha, loaded as it then was, to have
entered the Sabang River, even though there had been a steamer to tow it,
not only because of an insufficient depth of water in its channel, but also on
account of the very high bar at the entrance of the said river, it is
incontrovertible that the stranding and wreck of the lorcha Pilar was due to
a fortuitous event or to force majeure and not to the fault and negligence of
the defendant company and its agents or of the patron, Mariano Gadvilao,
inasmuch as the record discloses it to have been duly proved that the latter,
in difficult situation in which unfortunately the boat under his charge was
placed, took all the precautions that any diligent man should have taken
whose duty it was to save the boat and its cargo, and, by the instinct of self-

THIRD DIVISION

preservation, his own life and those of the crew of the lorcha; therefore,
considering the conduct of the patron of the lorcha and that of the
defendant's agent in Gubat, during the time of the occurrence of the
disaster, the defendant company has not incurred any liability whatever for
the loss of the goods, the value of which is demanded by the plaintiff; it
must, besides, be taken into account that the defendant itself also lost
goods of its own and the lorcha too.
From the moment that it is held that the loss of the said lorcha was due
to force majeure, a fortuitous event, with no conclusive proof or negligence
or of the failure to take the precautions such as diligent and careful persons
usually adopt to avoid the loss of the boat and its cargo, it is neither just nor
proper to attribute the loss or damage of the goods in question to any fault,
carelessness, or negligence on the part of the defendant company and its
agents and, especially, the patron of the lorcha Pilar.
Moreover, it is to be noted that, subsequent to the wreck, the defendant
company's agent took all the requisite measures for the salvage of such of
the goods as could be recovered after the accident, which he did with the
knowledge of the shipper, Ong Bieng Sip, and, in effecting their sale, he
endeavored to secure all possible advantage to the Chinese shipper; in all
these proceedings, as shown by the record, he acted in obedience to the
law.
From all the foregoing it is concluded that the defendant is not liable for the
loss and damage of the goods shipped on the lorcha Pilar by the
Chinaman, Ong Bieng Sip, inasmuch as such loss and damage were the
result of a fortuitous event or force majeure, and there was no negligence
or lack of care and diligence on the part of the defendant company or its
agents.
Therefore, we hold it proper to reverse the judgment appealed from, and to
absolve, as we hereby do, the defendant, Inchausti & Co., without special

findings as to costs.
Court. [Respondents] claim for attorneys fees
[is] DISMISSED. [Petitioners] counterclaims areDISMISSED.[5]

[G.R. No. 146018. June 25, 2003]

EDGAR COKALIONG SHIPPING LINES, INC., petitioner, vs. UCPB
GENERAL INSURANCE COMPANY, INC., respondent.
DECISION

The assailed
Reconsideration.

Resolution

denied

petitioners

Motion

for

On the other hand, the disposition of the Regional Trial

Courts[6] Decision,[7] which was later reversed by the CA, states:
WHEREFORE, premises considered, the case is hereby DISMISSED for
lack of merit.

PANGANIBAN, J.:
The liability of a common carrier for the loss of goods may, by
stipulation in the bill of lading, be limited to the value declared by the
shipper. On the other hand, the liability of the insurer is determined by
the actual value covered by the insurance policy and the insurance
premiums paid therefor, and not necessarily by the value declared in
the bill of lading.

No cost.[8]
The Facts
The facts of the case are summarized by the appellate court in
this wise:

The Case
Before the Court is a Petition for Review[1] under Rule 45 of the
Rules of Court, seeking to set aside the August 31, 2000
Decision[2] and the November 17, 2000 Resolution [3] of the Court of
Appeals[4] (CA) in CA-GR SP No. 62751. The dispositive part of the
Decision reads:
IN THE LIGHT OF THE FOREGOING, the appeal is GRANTED. The
Decision appealed from is REVERSED. [Petitioner] is hereby condemned to
pay to [respondent] the total amount ofP148,500.00, with interest thereon, at
the rate of 6% per annum, from date of this Decision of the

Sometime on December 11, 1991, Nestor Angelia delivered to the Edgar

Cokaliong Shipping Lines, Inc. (now Cokaliong Shipping Lines), [petitioner]
for brevity, cargo consisting of one (1) carton of Christmas dcor and two (2)
sacks of plastic toys, to be transported on board the M/V Tandag on
its Voyage No. T-189 scheduled to depart from Cebu City, on December 12,
1991, for Tandag, Surigao del Sur. [Petitioner] issued Bill of Lading No. 58,
freight prepaid, covering the cargo. Nestor Angelia was both the shipper and
consignee of the cargo valued, on the face thereof, in the amount
ofP6,500.00. Zosimo Mercado likewise delivered cargo to [petitioner],
consisting of two (2) cartons of plastic toys and Christmas decor, one (1) roll
of floor mat and one (1) bundle of various or assorted goods for transportation
thereof from Cebu City to Tandag, Surigao del Sur, on board the said vessel,

and said voyage. [Petitioner] issued Bill of Lading No. 59 covering the cargo
which, on the face thereof, was valued in the amount of P14,000.00. Under
the Bill of Lading, Zosimo Mercado was both the shipper and consignee of
the cargo.
On December 12, 1991, Feliciana Legaspi insured the cargo, covered by Bill
of Lading No. 59, with the UCPB General Insurance Co., Inc., [respondent]
for brevity, for the amount of P100,000.00 against all risks under Open
Policy No. 002/91/254 for which she was issued, by [respondent], Marine
Risk Note No. 18409 on said date. She also insured the cargo covered by Bill
of Lading No. 58, with [respondent], for the amount of P50,000.00,
under Open Policy No. 002/91/254 on the basis of which [respondent]
issued Marine Risk Note No. 18410 on said date.
When the vessel left port, it had thirty-four (34) passengers and assorted
cargo on board, including the goods of Legaspi. After the vessel had passed
by the Mandaue-Mactan Bridge, fire ensued in the engine room, and, despite
earnest efforts of the officers and crew of the vessel, the fire engulfed and
destroyed the entire vessel resulting in the loss of the vessel and the cargoes
therein. The Captain filed the required Marine Protest.
Shortly thereafter, Feliciana Legaspi filed a claim, with [respondent], for the
value of the cargo insured under Marine Risk Note No. 18409 and covered
by Bill of Lading No. 59. She submitted, in support of her claim, a Receipt,
dated December 11, 1991, purportedly signed by Zosimo Mercado, and Order
Slips purportedly signed by him for the goods he received from Feliciana
Legaspi valued in the amount of P110,056.00. [Respondent] approved the
claim of Feliciana Legaspi and drew and issued UCPB Check No. 612939,
dated March 9, 1992, in the net amount of P99,000.00, in settlement of her
claim after which she executed a Subrogation Receipt/Deed, for said
amount, in favor of [respondent]. She also filed a claim for the value of the
cargo covered by Bill of Lading No. 58. She submitted to [respondent]
a Receipt, dated December 11, 1991 and Order Slips, purportedly signed by
Nestor Angelia for the goods he received from Feliciana Legaspi valued
at P60,338.00. [Respondent] approved her claim and remitted to Feliciana
Legaspi the net amount of P49,500.00, after which she signed a Subrogation
Receipt/Deed, dated March 9, 1992, in favor of [respondent].
On July 14, 1992, [respondent], as subrogee of Feliciana Legaspi, filed a
complaint anchored on torts against [petitioner], with the Regional Trial Court
of Makati City, for the collection of the total principal amount of P148,500.00,
which it paid to Feliciana Legaspi for the loss of the cargo, praying that
judgment be rendered in its favor and against the [petitioner] as follows:
WHEREFORE, it is respectfully prayed of this Honorable Court that after
due hearing, judgment be rendered ordering [petitioner] to pay [respondent]
the following.
1. Actual damages in the amount of P148,500.00 plus interest thereon at the
legal rate from the time of filing of this complaint until fully paid;
2. Attorneys fees in the amount of P10,000.00; and
3. Cost of suit.
[Respondent] further prays for such other reliefs and remedies as this
Honorable Court may deem just and equitable under the premises.

[Respondent] alleged, inter alia, in its complaint, that the cargo subject of its
complaint was delivered to, and received by, [petitioner] for transportation to
Tandag, Surigao del Sur under Bill of Ladings, Annexes A and B of the
complaint; that the loss of the cargo was due to the negligence of the
[petitioner]; and that Feliciana Legaspi had executed Subrogation
Receipts/Deeds in favor of [respondent] after paying to her the value of the
cargo on account of the Marine Risk Notes it issued in her favor covering the
cargo.
In its Answer to the complaint, [petitioner] alleged that: (a) [petitioner] was
cleared by the Board of Marine Inquiry of any negligence in the burning of the
vessel; (b) the complaint stated no cause of action against [petitioner]; and (c)
the shippers/consignee had already been paid the value of the goods as stated
in the Bill of Lading and, hence, [petitioner] cannot be held liable for the loss
of the cargo beyond the value thereof declared in the Bill of Lading.
After [respondent] rested its case, [petitioner] prayed for and was allowed, by
the Court a quo, to take the depositions of Chester Cokaliong, the VicePresident and Chief Operating Officer of [petitioner], and a resident of Cebu
City, and of Noel Tanyu, an officer of the Equitable Banking Corporation, in
Cebu City, and a resident of Cebu City, to be given before the Presiding Judge
of Branch 106 of the Regional Trial Court of Cebu City. Chester Cokaliong
and Noel Tanyu did testify, by way of deposition, before the Court and
declared inter alia, that: [petitioner] is a family corporation like the Chester
Marketing, Inc.; Nestor Angelia had been doing business with [petitioner]
and Chester Marketing, Inc., for years, and incurred an account with Chester
Marketing, Inc. for his purchases from said corporation; [petitioner] did
issue Bills of Lading Nos. 58 and 59 for the cargo described therein with
Zosimo Mercado and Nestor Angelia as shippers/consignees, respectively; the
engine room of the M/V Tandag caught fire after it passed the
Mandaue/Mactan Bridge resulting in the total loss of the vessel and its cargo;
an investigation was conducted by the Board of Marine Inquiry of the
Philippine Coast Guard which rendered a Report, dated February 13, 1992
absolving [petitioner] of any responsibility on account of the fire, which
Report of the Board was approved by the District Commander of the
Philippine Coast Guard; a few days after the sinking of the vessel, a
representative of the Legaspi Marketing filed claims for the values of the
goods under Bills of Lading Nos. 58 and 59 in behalf of the
shippers/consignees, Nestor Angelia and Zosimo Mercado; [petitioner] was
able to ascertain, from the shippers/consignees and the representative of the
Legaspi Marketing that the cargo covered by Bill of Lading No. 59 was
owned by Legaspi Marketing and consigned to Zosimo Mercado while that
covered by Bill of Lading No. 58 was purchased by Nestor Angelia from the
Legaspi Marketing; that [petitioner] approved the claim of Legaspi Marketing
for the value of the cargo under Bill of Lading No. 59 and remitted to Legaspi
Marketing the said amount under Equitable Banking Corporation Check No.
20230486 dated August 12, 1992, in the amount of P14,000.00 for which the
representative of the Legaspi Marketing signed Voucher No. 4379, dated
August 12, 1992, for the said amount ofP14,000.00 in full payment of claims
under Bill of Lading No. 59; that [petitioner] approved the claim of Nestor
Angelia in the amount of P6,500.00 but that since the latter owed Chester
Marketing, Inc., for some purchases, [petitioner] merely set off the amount
due to Nestor Angelia under Bill of Lading No. 58 against his account with
Chester Marketing, Inc.; [petitioner] lost/[misplaced] the original of the check
after it was received by Legaspi Marketing, hence, the production of the
microfilm copy by Noel Tanyu of the Equitable Banking Corporation;
[petitioner] never knew, before settling with Legaspi Marketing and Nestor
Angelia that the cargo under both Bills of Lading were insured with
[respondent], or that Feliciana Legaspi filed claims for the value of the cargo
with [respondent] and that the latter approved the claims of Feliciana Legaspi
and paid the total amount of P148,500.00 to her; [petitioner] came to know,
for the first time, of the payments by [respondent] of the claims of Feliciana
Legaspi when it was served with the summons and complaint, on October 8,
1992; after settling his claim, Nestor Angelia x x x executed the Release and
Quitclaim, dated July 2, 1993, and Affidavit, dated July 2, 1993 in favor of
[respondent]; hence, [petitioner] was absolved of any liability for the loss of
the cargo covered by Bills of Lading Nos. 58 and 59; and even if it was, its

liability should not exceed the value of the cargo as stated in the Bills of
Lading.

First Issue:
Liability for Loss

[Petitioner] did not anymore present any other witnesses on its evidence-inchief. x x x[9] (Citations omitted)
Ruling of the Court of Appeals
The CA held that petitioner had failed to prove that the fire
which consumed the vessel and its cargo was caused by something
other than its negligence in the upkeep, maintenance and operation of
the vessel.[10]
Petitioner had paid P14,000 to Legaspi Marketing for the cargo
covered by Bill of Lading No. 59. The CA, however, held that the
payment did not extinguish petitioners obligation to respondent,
because there was no evidence that Feliciana Legaspi (the insured)
was the owner/proprietor of Legaspi Marketing. The CA also pointed
out the impropriety of treating the claim under Bill of Lading No. 58 -covering cargo valued therein at P6,500 -- as a setoff against Nestor
Angelias account with Chester Enterprises, Inc.
Finally, it ruled that respondent is not bound by the valuation of
the cargo under the Bills of Lading, x x x nor is the value of the cargo
under said Bills of Lading conclusive on the [respondent]. This is so
because, in the first place, the goods were insured with the
[respondent] for the total amount of P150,000.00, which amount may
be considered as the face value of the goods.[11]
Hence this Petition.[12]
Issues
Petitioner raises for our consideration the following alleged errors
of the CA:
I
The Honorable Court of Appeals erred, granting arguendo that petitioner is
liable, in holding that petitioners liability should be based on the actual
insured value of the goods and not from actual valuation declared by the
shipper/consignee in the bill of lading.
II
The Court of Appeals erred in not affirming the findings of the Philippine
Coast Guard, as sustained by the trial court a quo, holding that the cause of
loss of the aforesaid cargoes under Bill of Lading Nos. 58 and 59 was due to
force majeure and due diligence was [exercised] by petitioner prior to, during
and immediately after the fire on [petitioners] vessel.
III
The Court of Appeals erred in not holding that respondent UCPB General
Insurance has no cause of action against the petitioner.[13]
In sum, the issues are: (1) Is petitioner liable for the loss of the
goods? (2) If it is liable, what is the extent of its liability?

Petitioner argues that the cause of the loss of the goods, subject
of this case, was force majeure. It adds that its exercise of due
diligence was adequately proven by the findings of the Philippine
Coast Guard.
We are not convinced. The uncontroverted findings of the
Philippine Coast Guard show that the M/V Tandag sank due to a fire,
which resulted from a crack in the auxiliary engine fuel oil service
tank. Fuel spurted out of the crack and dripped to the heating exhaust
manifold, causing the ship to burst into flames. The crack was located
on the side of the fuel oil tank, which had a mere two-inch gap from the
engine room walling, thus precluding constant inspection and care by
the crew.
Having originated from an unchecked crack in the fuel oil service
tank, the fire could not have been caused by force majeure. Broadly
speaking, force majeure generally applies to a natural accident, such
as that caused by a lightning, an earthquake, a tempest or a public
enemy.[14] Hence, fire is not considered a natural disaster or
calamity. In Eastern Shipping Lines, Inc. v. Intermediate Appellate
Court,[15] we explained:
x x x. This must be so as it arises almost invariably from some act of man or
by human means. It does not fall within the category of an act of God unless
caused by lighting or by other natural disaster or calamity. It may even be
caused by the actual fault or privity of the carrier.
Article 1680 of the Civil Code, which considers fire as an extraordinary
fortuitous event refers to leases or rural lands where a reduction of the rent is
allowed when more than one-half of the fruits have been lost due to such
event, considering that the law adopts a protective policy towards agriculture.
As the peril of fire is not comprehended within the exceptions in Article
1734, supra, Article 1735 of the Civil Code provides that in all cases other
than those mentioned in Article 1734, the common carrier shall be presumed
to have been at fault or to have acted negligently, unless it proves that it has
observed the extraordinary diligence required by law.
Where loss of cargo results from the failure of the officers of a
vessel to inspect their ship frequently so as to discover the existence of
cracked parts, that loss cannot be attributed to force majeure, but to
the negligence of those officials.[16]
The law provides that a common carrier is presumed to have
been negligent if it fails to prove that it exercised extraordinary
vigilance over the goods it transported. Ensuring the seaworthiness of
the vessel is the first step in exercising the required vigilance.
Petitioner did not present sufficient evidence showing what measures
or acts it had undertaken to ensure the seaworthiness of the vessel. It
failed to show when the last inspection and care of the auxiliary engine
fuel oil service tank was made, what the normal practice was for its
maintenance, or some other evidence to establish that it had exercised
extraordinary diligence. It merely stated that constant inspection and
care were not possible, and that the last time the vessel was drydocked was in November 1990. Necessarily, in accordance with
Article 1735[17] of the Civil Code, we hold petitioner responsible for the
loss of the goods covered by Bills of Lading Nos. 58 and 59.

This Courts Ruling

Second Issue:
The Petition is partly meritorious.

Extent of Liability
Respondent contends that petitioners liability should be based
on the actual insured value of the goods, subject of this case. On the
other hand, petitioner claims that its liability should be limited to the
value declared by the shipper/consignee in the Bill of Lading.
The records[18] show that the Bills of Lading covering the lost
goods contain the stipulation that in case of claim for loss or for
damage to the shipped merchandise or property, [t]he liability of the
common carrier x x x shall not exceed the value of the goods as
appearing in the bill of lading.[19] The attempt by respondent to make
light of this stipulation is unconvincing. As it had the consignees
copies of the Bills of Lading,[20] it could have easily produced those
copies,
instead
of
relying
on
mere
allegations
and
suppositions. However, it presented mere photocopies thereof to
disprove petitioners evidence showing the existence of the above
stipulation.
A stipulation that limits liability is valid [21] as long as it is not
against public policy. In Everett Steamship Corporation v. Court of
Appeals,[22] the Court stated:
A stipulation in the bill of lading limiting the common carriers liability for
loss or destruction of a cargo to a certain sum, unless the shipper or owner
declares a greater value, is sanctioned by law, particularly Articles 1749 and
1750 of the Civil Code which provides:
Art. 1749. A stipulation that the common carriers liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been freely and fairly
agreed upon.
Such limited-liability clause has also been consistently upheld by this Court
in a number of cases. Thus, in Sea-Land Service, Inc. vs. Intermediate
Appellate Court, we ruled:
It seems clear that even if said section 4 (5) of the Carriage of Goods by Sea
Act did not exist, the validity and binding effect of the liability limitation
clause in the bill of lading here are nevertheless fully sustainable on the basis
alone of the cited Civil Code Provisions. That said stipulation is just and
reasonable is arguable from the fact that it echoes Art. 1750 itself in providing
a limit to liability only if a greater value is not declared for the shipment in the
bill of lading. To hold otherwise would amount to questioning the justness
and fairness of the law itself, and this the private respondent does not pretend
to do. But over and above that consideration, the just and reasonable
character of such stipulation is implicit in it giving the shipper or owner the
option of avoiding accrual of liability limitation by the simple and surely far
from onerous expedient of declaring the nature and value of the shipment in
the bill of lading.
Pursuant to the afore-quoted provisions of law, it is required that the
stipulation limiting the common carriers liability for loss must be reasonable
and just under the circumstances, and has been freely and fairly agreed upon.
The bill of lading subject of the present controversy specifically provides,
among others:

18.
All claims for which the carrier may be liable shall be adjusted and
settled on the basis of the shippers net invoice cost plus freight and insurance
premiums, if paid, and in no event shall the carrier be liable for any loss of
possible profits or any consequential loss.
The carrier shall not be liable for any loss of or any damage to or in any
connection with, goods in an amount exceeding One Hundred Thousand Yen
in Japanese Currency (100,000.00) or its equivalent in any other currency per
package or customary freight unit (whichever is least) unless the value of the
goods higher than this amount is declared in writing by the shipper before
receipt of the goods by the carrier and inserted in the Bill of Lading and extra
freight is paid as required.
The above stipulations are, to our mind, reasonable and just. In the bill of
lading, the carrier made it clear that its liability would only be up to One
Hundred Thousand (Y100,000.00) Yen. However, the shipper, Maruman
Trading, had the option to declare a higher valuation if the value of its cargo
was higher than the limited liability of the carrier. Considering that the
shipper did not declare a higher valuation, it had itself to blame for not
complying with the stipulations. (Italics supplied)
In the present case, the stipulation limiting petitioners liability is
not contrary to public policy. In fact, its just and reasonable character
is evident. The shippers/consignees may recover the full value of the
goods by the simple expedient of declaring the true value of the
shipment in the Bill of Lading. Other than the payment of a higher
freight, there was nothing to stop them from placing the actual value of
the goods therein. In fact, they committed fraud against the common
carrier by deliberately undervaluing the goods in their Bill of Lading,
thus depriving the carrier of its proper and just transport fare.
Concededly, the purpose of the limiting stipulation in the Bill of
Lading is to protect the common carrier. Such stipulation obliges the
shipper/consignee to notify the common carrier of the amount that the
latter may be liable for in case of loss of the goods. The common
carrier can then take appropriate measures -- getting insurance, if
needed, to cover or protect itself. This precaution on the part of the
carrier is reasonable and prudent. Hence, a shipper/consignee that
undervalues the real worth of the goods it seeks to transport does not
only violate a valid contractual stipulation, but commits a fraudulent act
when it seeks to make the common carrier liable for more than the
amount it declared in the bill of lading.
Indeed, Zosimo Mercado and Nestor Angelia misled petitioner by
undervaluing the goods in their respective Bills of Lading. Hence,
petitioner was exposed to a risk that was deliberately hidden from it,
and from which it could not protect itself.
It is well to point out that, for assuming a higher risk (the alleged
actual value of the goods) the insurance company was paid the correct
higher premium by Feliciana Legaspi; while petitioner was paid a fee
lower than what it was entitled to for transporting the goods that had
been deliberately undervalued by the shippers in the Bill of
Lading. Between the two of them, the insurer should bear the loss in
excess of the value declared in the Bills of Lading. This is the just and
equitable solution.
In Aboitiz Shipping Corporation v. Court of Appeals,[23] the
description of the nature and the value of the goods shipped were
declared and reflected in the bill of lading, like in the present
case. The Court therein considered this declaration as the basis of the
carriers liability and ordered payment based on such
amount. Following this ruling, petitioner should not be held liable for
more than what was declared by the shippers/consignees as the value
of the goods in the bills of lading.

We find no cogent reason to disturb the CAs finding that

Feliciana Legaspi was the owner of the goods covered by Bills of
Lading Nos. 58 and 59. Undoubtedly, the goods were merely
consigned to Nestor Angelia and Zosimo Mercado, respectively; thus,
Feliciana Legaspi or her subrogee (respondent) was entitled to the
goods or, in case of loss, to compensation therefor. There is no
evidence showing that petitioner paid her for the loss of those
goods. It does not even claim to have paid her.
On the other hand, Legaspi Marketing filed with petitioner a
claim for the lost goods under Bill of Lading No. 59, for which the latter
subsequently paid P14,000. But nothing in the records convincingly
shows that the former was the owner of the goods. Respondent was,
however, able to prove that it was Feliciana Legaspi who owned those
goods, and who was thus entitled to payment for their loss. Hence, the
claim for the goods under Bill of Lading No. 59 cannot be deemed to
THIRD DIVISION
[G.R. No. 113003. October 17, 1997]
ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs.
COURT OF APPEALS, LENY TUMBOY, ARDEE TUMBOY
and JASMIN TUMBOY, respondents.
DECISION
ROMERO, J.:
In this petition for review on certiorari of the decision of the Court
of Appeals, the issue is whether or not the explosion of a newly
installed tire of a passenger vehicle is a fortuitous event that exempts
the carrier from liability for the death of a passenger.
On April 26, 1988, spouses Tito and Leny Tumboy and their
minor children named Ardee and Jasmin, boarded at Mangagoy,
Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop
Road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus
exploded. The bus fell into a ravine around three (3) feet from the road
and struck a tree. The incident resulted in the death of 28-year-old Tito
Tumboy and physical injuries to other passengers.

have been extinguished, because payment was made to a person who

was not entitled thereto.
With regard to the claim for the goods that were covered by Bill
of Lading No. 58 and valued at P6,500, the parties have not convinced
us to disturb the findings of the CA that compensation could not validly
take place. Thus, we uphold the appellate courts ruling on this point.
WHEREFORE,
the
Petition
is
hereby PARTIALLY
GRANTED. The assailed Decision is MODIFIED in the sense that
petitioner is ORDERED to pay respondent the sums ofP14,000
and P6,500, which represent the value of the goods stated in Bills of
Lading Nos. 59 and 58, respectively. No costs.
SO ORDERED.
passengers had cargoes on top. Since it was running fast, she
cautioned the driver to slow down but he merely stared at her through
the mirror. At around 3:30 p.m., in Trento, she heard something
explode and immediately, the bus fell into a ravine.
For their part, the defendants tried to establish that the accident
was due to a fortuitous event. Abundio Salce, who was the bus
conductor when the incident happened, testified that the 42-seater bus
was not full as there were only 32 passengers, such that he himself
managed to get a seat. He added that the bus was running at a speed
of 60 to 50 and that it was going slow because of the zigzag
road. He affirmed that the left front tire that exploded was a brand
new tire that he mounted on the bus on April 21, 1988 or only five (5)
days before the incident. The Yobido Liner secretary, Minerva
Fernando, bought the new Goodyear tire from Davao Toyo Parts on
April 20, 1988 and she was present when it was mounted on the bus
by Salce. She stated that all driver applicants in Yobido Liner
underwent actual driving tests before they were employed. Defendant
Cresencio Yobido underwent such test and submitted his professional
drivers license and clearances from the barangay, the fiscal and the
police.

Upon a finding that the third party defendant was not liable under
the insurance contract, the lower court dismissed the third party
complaint. No amicable settlement having been arrived at by the
parties, trial on the merits ensued.

On August 29, 1991, the lower court rendered a

decision[2] dismissing the action for lack of merit. On the issue of
whether or not the tire blowout was a caso fortuito, it found that the
falling of the bus to the cliff was a result of no other outside factor than
the tire blow-out. It held that the ruling in the La Mallorca and
Pampanga Bus Co. v. De Jesus [3] that a tire blowout is a mechanical
defect of the conveyance or a fault in its equipment which was easily
discoverable if the bus had been subjected to a more thorough or rigid
check-up before it took to the road that morning is inapplicable to this
case. It reasoned out that in said case, it was found that the blowout
was caused by the established fact that the inner tube of the left front
tire was pressed between the inner circle of the left wheel and the rim
which had slipped out of the wheel. In this case, however, the cause
of the explosion remains a mystery until at present. As such, the court
added, the tire blowout was a caso fortuito which is completely an
extraordinary circumstance independent of the will of the defendants
who should be relieved of whatever liability the plaintiffs may have
suffered by reason of the explosion pursuant to Article 1174 [4] of the
Civil Code.

The plaintiffs asserted that violation of the contract of carriage

between them and the defendants was brought about by the drivers
failure to exercise the diligence required of the carrier in transporting
passengers safely to their place of destination. According to Leny
Tumboy, the bus left Mangagoy at 3:00 oclock in the afternoon. The
winding road it traversed was not cemented and was wet due to the
rain; it was rough with crushed rocks. The bus which was full of

Dissatisfied, the plaintiffs appealed to the Court of

Appeals. They ascribed to the lower court the following errors: (a)
finding that the tire blowout was a caso fortuito; (b) failing to hold that
the defendants did not exercise utmost and/or extraordinary diligence
required of carriers under Article 1755 of the Civil Code, and (c)
deciding the case contrary to the ruling in Juntilla v. Fontanar,
[5]
and Necesito v. Paras.[6]

On November 21, 1988, a complaint for breach of contract of

carriage, damages and attorneys fees was filed by Leny and her
children against Alberta Yobido, the owner of the bus, and Cresencio
Yobido, its driver, before the Regional Trial Court of Davao City. When
the defendants therein filed their answer to the complaint, they raised
the affirmative defense of caso fortuito. They also filed a third-party
complaint against Philippine Phoenix Surety and Insurance, Inc. This
third-party defendant filed an answer with compulsory counterclaim. At
the pre-trial conference, the parties agreed to a stipulation of facts. [1]

On August 23, 1993, the Court of Appeals rendered the

Decision[7] reversing that of the lower court. It held that:
To Our mind, the explosion of the tire is not in itself a fortuitous event. The
cause of the blow-out, if due to a factory defect, improper mounting,
excessive tire pressure, is not an unavoidable event. On the other hand, there
may have been adverse conditions on the road that were unforeseeable and/or
inevitable, which could make the blow-out a caso fortuito. The fact that the
cause of the blow-out was not known does not relieve the carrier of
liability. Owing to the statutory presumption of negligence against the carrier
and its obligation to exercise the utmost diligence of very cautious persons to
carry the passenger safely as far as human care and foresight can provide, it is
the burden of the defendants to prove that the cause of the blow-out was a
fortuitous event. It is not incumbent upon the plaintiff to prove that the cause
of the blow-out is not caso-fortuito.
Proving that the tire that exploded is a new Goodyear tire is not sufficient to
discharge defendants burden. As enunciated in Necesito vs. Paras, the
passenger has neither choice nor control over the carrier in the selection and
use of its equipment, and the good repute of the manufacturer will not
necessarily relieve the carrier from liability.
Moreover, there is evidence that the bus was moving fast, and the road was
wet and rough. The driver could have explained that the blow-out that
precipitated the accident that caused the death of Toto Tumboy could not have
been prevented even if he had exercised due care to avoid the same, but he
was not presented as witness.
The Court of Appeals thus disposed of the appeal as follows:
WHEREFORE, the judgment of the court a quo is set aside and another one
entered ordering defendants to pay plaintiffs the sum of P50,000.00 for the
death of Tito Tumboy, P30,000.00 in moral damages, and P7,000.00 for
funeral and burial expenses.
SO ORDERED.
The defendants filed a motion for reconsideration of said
decision which was denied on November 4, 1993 by the Court of
Appeals. Hence, the instant petition asserting the position that the tire
blowout that caused the death of Tito Tumboy was a caso
fortuito. Petitioners claim further that the Court of Appeals, in ruling
contrary to that of the lower court, misapprehended facts and,
therefore, its findings of fact cannot be considered final which shall
bind this Court. Hence, they pray that this Court review the facts of the
case.
The Court did re-examine the facts and evidence in this case
because of the inapplicability of the established principle that the
factual findings of the Court of Appeals are final and may not be
reviewed on appeal by this Court. This general principle is subject to
exceptions such as the one present in this case, namely, that the lower
court and the Court of Appeals arrived at diverse factual findings.
[8]
However, upon such re-examination, we found no reason to overturn
the findings and conclusions of the Court of Appeals.
As a rule, when a passenger boards a common carrier, he takes
the risks incidental to the mode of travel he has taken. After all, a
carrier is not an insurer of the safety of its passengers and is not bound
absolutely and at all events to carry them safely and without injury.
[9]
However, when a passenger is injured or dies while travelling, the
law presumes that the common carrier is negligent. Thus, the Civil
Code provides:

Art. 1756. In case of death 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 1755 provides that (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. Accordingly, in culpa contractual, once a
passenger dies or is injured, the carrier is presumed to have been at
fault or to have acted negligently. This disputable presumption may
only be overcome by evidence that the carrier had observed
extraordinary diligence as prescribed by Articles 1733, [10] 1755 and
1756 of the Civil Code or that the death or injury of the passenger was
due to a fortuitous event.[11] Consequently, the court need not make an
express finding of fault or negligence on the part of the carrier to hold it
responsible for damages sought by the passenger.[12]
In view of the foregoing, petitioners contention that they should
be exempt from liability because the tire blowout was no more than a
fortuitous event that could not have been foreseen, must fail. A
fortuitous event is possessed of the following characteristics: (a) the
cause of the unforeseen and unexpected occurrence, or the failure of
the debtor to comply with his obligations, must be independent of
human will; (b) it must be impossible to foresee the event which
constitutes the caso fortuito, or if it can be foreseen, it must be
impossible to avoid; (c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner;
and (d) the obligor must be free from any participation in the
aggravation of the injury resulting to the creditor.[13] As Article 1174
provides, no person shall be responsible for a fortuitous event which
could not be foreseen, or which, though foreseen, was inevitable. In
other words, there must be an entire exclusion of human agency from
the cause of injury or loss.[14]
Under the circumstances of this case, the explosion of the new
tire may not be considered a fortuitous event. There are human
factors involved in the situation. The fact that the tire was new did not
imply that it was entirely free from manufacturing defects or that it was
properly mounted on the vehicle. Neither may the fact that the tire
bought and used in the vehicle is of a brand name noted for quality,
resulting in the conclusion that it could not explode within five days
use. Be that as it may, it is settled that an accident caused either by
defects in the automobile or through the negligence of its driver is not
a caso fortuito that would exempt the carrier from liability for damages.
[15]

Moreover, a common carrier may not be absolved from liability in

case of force majeure or fortuitous event alone. The common carrier
must still prove that it was not negligent in causing the death or injury
resulting from an accident.[16] This Court has had occasion to state:
While it may be true that the tire that blew-up was still good because the
grooves of the tire were still visible, this fact alone does not make the
explosion of the tire a fortuitous event. No evidence was presented to show
that the accident was due to adverse road conditions or that precautions were
taken by the jeepney driver to compensate for any conditions liable to cause
accidents. The sudden blowing-up, therefore, could have been caused by too
much air pressure injected into the tire coupled by the fact that the jeepney
was overloaded and speeding at the time of the accident.[17]
It is interesting to note that petitioners proved through the bus
conductor, Salce, that the bus was running at 60-50 kilometers per
hour only or within the prescribed lawful speed limit. However, they
failed to rebut the testimony of Leny Tumboy that the bus was running
so fast that she cautioned the driver to slow down. These

contradictory facts must, therefore, be resolved in favor of liability in

view of the presumption of negligence of the carrier in the law. Coupled
with this is the established condition of the road rough, winding and
wet due to the rain. It was incumbent upon the defense to establish
that it took precautionary measures considering partially dangerous
condition of the road. As stated above, proof that the tire was new and
of
good
quality
is
not
sufficient
proof
that
it
was not negligent. Petitioners should have shown that it undertook
extraordinary diligence in the care of its carrier, such as conducting
daily routinary check-ups of the vehicles parts. As the late Justice
J.B.L. Reyes said:
It may be impracticable, as appellee argues, to require of carriers to test the
strength of each and every part of its vehicles before each trip; but we are of
the opinion that a due regard for the carriers obligations toward the traveling
public demands adequate periodical tests to determine the condition and
strength of those vehicle portions the failure of which may endanger the safety
of the passengers.[18]
Having failed to discharge its duty to overthrow the presumption
of negligence with clear and convincing evidence, petitioners are
hereby held liable for damages. Article 1764[19]in relation to Article
2206[20] of the Civil Code prescribes the amount of at least three
thousand pesos as damages for the death of a passenger. Under
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 139875

December 4, 2000

GREGORIO PESTAO and METRO CEBU AUTOBUS

CORPORATION, petitioners,
vs.
Spouses TEOTIMO SUMAYANG and PAZ C.
SUMAYANG, respondents.
PANGANIBAN, J.:
Factual findings of the Court of Appeals, affirming those of the trial
judge, are binding on this Court. In quasi-delicts, such findings are
crucial because negligence is largely a matter of evidence. In
computing an award for lost earning capacity, the life expectancy of the
deceased, not that of the heir, is used as basis.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court, assailing the April 21, 1999 Decision and the August 6,
1999 Resolution of the Court of Appeals1 (CA) in CA-GR CV No.
30289. The questioned Decision disposed as follows:
"WHEREFORE, premises considered, the instant appeal is
hereby DENIED. The assailed Decision of the lower court is
hereby AFFIRMED with the aforesaid modification regarding
the award of death penalty."
The Resolution of August 6, 1999 denied reconsideration.2
The Facts

prevailing jurisprudence, the award of damages under Article 2206 has

been increased to fifty thousand pesos (P50,000.00).[21]
Moral damages are generally not recoverable in culpa
contractual except when bad faith had been proven. However, the
same damages may be recovered when breach of contract of carriage
results in the death of a passenger,[22] as in this case. Exemplary
damages, awarded by way of example or correction for the public good
when moral damages are awarded,[23] may likewise be recovered in
contractual obligations if the defendant acted in wanton, fraudulent,
reckless, oppressive, or malevolent manner.[24] Because petitioners
failed to exercise the extraordinary diligence required of a common
carrier, which resulted in the death of Tito Tumboy, it is deemed to
have acted recklessly.[25] As such, private respondents shall be entitled
to exemplary damages.
WHEREFORE, the Decision of the Court of Appeals is
hereby AFFIRMED subject to the modification that petitioners shall, in
addition to the monetary awards therein, be liable for the award of
exemplary damages in the amount of P20,000.00. Costs against
petitioners.
SO ORDERED.

The events leading to this Petition were summarized by the

Court of Appeals as follows:
"It appears from the records that at around 2:00 o'clock [o]n
the afternoon of August 9, 1986, Ananias Sumayang was
riding a motorcycle along the national highway in Ilihan,
Tabagon, Cebu. Riding with him was his friend Manuel
Romagos. As they came upon a junction where the highway
connected with the road leading to Tabagon, they were hit by
a passenger bus driven by [Petitioner] Gregorio Pestao and
owned by [Petitioner] Metro Cebu Autobus Corporation
(Metro Cebu, for brevity), which had tried to overtake them,
sending the motorcycle and its passengers hurtling upon the
pavement. Both Ananias Sumayang and Manuel Romagos
were rushed to the hospital in Sogod, where Sumayang was
pronounced dead on arrival. Romagos was transferred to the
Cebu Doctors' Hospital, but he succumbed to his injuries the
day after.
"Apart from the institution of criminal charges against
Gregorio Pestao, [Respondents] Teotimo and Paz
Sumayang, as heirs of Ananias Sumayang, filed this civil
action for damages against Gregorio Pestao, as driver of
the passenger bus that rammed the deceased's motorcycle,
Metro Cebu, as owner and operator of the said bus, and
Perla Compania de Seguros, as insurer of Metro Cebu. The
case was docketed as Civil Case No. CEB-6108.
"On November 9, 1987, upon motion of [Petitioner] Pestao,
Judge Pedro C. Son ordered the consolidation of the said
case with Criminal Case No. 10624, pending in Branch 16 of
the same Court, involving the criminal prosecution of
Gregorio Pestao for [d]ouble [h]omicide thru [r]eckless
[i]mprudence. Joint trial of the two cases thereafter ensued,
where the following assertions were made:
'[Respondents] rely mainly on the testimonies of
Ignacio Neis, Pat. Aquilino Dinoy and Teotimo
Sumayang, father of the deceased. Neis declared
that he saw the incident while he was sitting on a
bench beside the highway; that both vehicles

c[a]me from the North; that as the motorcycle

approached the junction to Tab[a]gon, the driver
Ananias Sumayang signalled with his left arm to
indicate that he was taking the Tab[a]gon Road;
that the motorcycle did turn left but as it did so, it
was bumped by an overspeeding bus; that the
force of the impact threw Ananias Sumayang and
his companion Manuel Romagos about 14 meters
away. The motorcycle, Neis continued, was badly
damaged as it was dragged by the bus.
'On the other hand, Pat. Dinoy testified that he
was in the nearby house of Ruben Tiu [when] he
heard the sound or noise caused by the collision;
that he immediately went to the scene where he
found Ananias Sumayang and Manuel Romagos
lying on the road bleeding and badly injured; that
he requested the driver of a PU vehicle to take
them to a hospital; that he took note of the various
distances which he included in his sketch (Exh. J)
that the probable point of impact was at the left
lane of the highway and right at the junction to
Tab[a]gon (Exh J-11); that he based his conclusion
on the 'scratches' caused by the motorcycle's
footrest on the asphalt pavement; that he
described the damage caused to the motorcycle in
his sketch (Exh J); that on the part of the bus, the
right end of its front bumper was bent and the right
portion of the radiator grill was dented. Pat. Dinoy
acknowledged that he met at the scene Ignacio
Neis who informed him that he saw the incident.
'On the contrary, Pestao blamed Sumayang for
the accident. He testified that when he first blew
the horn the motorcycle which was about 15 or 20
meters ahead went to the right side of the highway
that he again blew the horn and accelerated in
order to overtake the motorcycle; that when he
was just one meter behind, the motorcycle
suddenly turned left towards the Tab[a]gon [R]oad
and was bumped by his bus; that he was able to
apply his break only after the impact. Pestao's
testimony was corroborated by Ireneo Casilia who
declared that he was one of the passengers of the
bus; that the motorcycle suddenly turned left
towards Tab[a]gon [R]oad without giving any signal
to indicate its maneuver; that the bus was going at
40 kph when the accident occurred.
'To substantiate its defense of bonos pater
familias [petitioner] [c]orporation recalled to the
witness box Gregorio Pestao who explained how
his driving experience and ability were tested by
the company before he was hired. He further
declared that the management gave regular
lectures to drivers and conductors touching on
various topics like speeding, parking, loading and
treatment of passengers, and that before he took
to the road at 2:30 AM of that day he checked
together with the mechanic the tires, brake, signal
lights as well as the tools to be brought along. He
did the same thing before commencing his return
trip from Hagnaya, San Remegio later in the day.
'The corporation also presented its maintenance
supervisor, Agustin Pugeda, Jr., and its manager,
Alfonso Corominas, Jr. who corroborated

Pestao's testimony that his driving ability was

thoroughly tested, and that all drivers underwent
periodic lecture on various aspects of safety
driving including pertinent traffic regulations. They
also confirmed the thorough checkup of every
vehicle before it would depart and that the
performance of the drivers was being monitored
by several inspectors posted at random places
along the route.'
"In judgment, the lower court found [petitioners] liable to the
[respondents], in the amounts of P30,000.00 for death
indemnity, P829,079 for loss of earning capacity of the
deceased Ananias Sumayang, and P36,000.00 for
necessary interment expenses. The liability of defendant
Perla Compania de Seguros, Inc., however, was limited only
to the amount stipulated in the insurance policy, which [was]
P12,000 for death indemnity and P4,500.00 for burial
expenses.
"In so ruling, the lower court found [Petitioner] Pestao to
have been negligent in driving the passenger bus that hit the
deceased. It was shown that Pestao negligently attempted
to overtake the motorcycle at a dangerous speed as they
were coming upon a junction in the road, and as the
motorcycle was about to turn left towards Tabagon. The
court likewise found Metro Cebu directly and primarily liable,
along with Pestao, the latter's employer under Article 2180
of the Civil Code, as [Petitioner] Metro Cebu failed to present
evidence to prove that it had observed . . . [the] diligence of
a good father of a family to prevent damage. Nor has Metro
Cebu proven that it had exercised due diligence in the
supervision of its employees and in the maintenance of
vehicles."3
Ruling of the Court of Appeals
The CA affirmed respondent's liability for the accident and for
Sumayang's death. Pestao was negligent when he tried to overtake
the victim's motorcycle at the Tabagon junction. As a professional
driver operating a public transport vehicle, he should have taken extra
precaution to avoid accidents, knowing that it was perilous to overtake
at a junction, where adjoining roads had brought about merging and
diverging traffic.
The appellate court opined that Metro Cebu had shown laxity in the
conduct of its operations and in the supervision of its employees. By
allowing the bus to ply its route despite the defective speedometer,
said petitioner showed its indifference towards the proper maintenance
of its vehicles. Having failed to observe the extraordinary diligence
required of public transportation companies, it was held vicariously
liable to the victims of the vehicular accident.
In accordance with prevailing jurisprudence, the CA raised to P50,000
the granted indemnity for the death of the victim. It also affirmed the
award of loss of earning capacity based on his life expectancy. Such
liability was assessed, not as a pension for the claiming heirs, but as a
penalty and an indemnity for the driver's negligent act.
Hence, this Petition.4
Issues
Petitioners submit the following issues5 for our consideration:

1) The Court of Appeals misapplied facts of weight and

substance affecting the result of the case.
2) The Court of Appeals misapplied R.A. 4136 as regards
the behavior of the deceased at the time of the accident.

Factual findings of the CA affirming those of the trial court are

conclusive and binding on this Court. Petitioners failed to demonstrate
that this case falls under any of the recognized exceptions to this
rule.7 Indeed, the issue of negligence is basically factual and, in quasidelicts, crucial in the award of damages.

3) The Court of Appeals erred in ruling that the award of

damages representing income that deceased could have
earned be considered a penalty.

Petitioners aver that the CA was wrong in attributing the accident to a

faulty speedometer and in implying that the accident could have been
avoided had this instrument been properly functioning.

4) The Court of Appeals, contrary to Article 2204, Civil Code,

raised the award of P30,000.00 damages representing
indemnity for death to P50,000.00.

This contention has no factual basis. Under Articles 2180 and 2176 of
the Civil Code, owners and managers are responsible for damages
caused by their employees. When an injury is caused by the
negligence of a servant or an employee, the master or employer is
presumed to be negligent either in the selection or in the supervision of
that employee. This presumption may be overcome only by
satisfactorily showing that the employer exercised the care and the
diligence of a good father of a family in the selection and the
supervision of its employee.8

5) The Court of Appeals used as basis for the loss of earning

capacity, the life expectancy of the [d]eceased instead of that
of the respondents which was shorter."6
In short, they raise these questions: whether the CA erred (1) in
applying Section 45 of RA 4136 when it ruled that negligence in driving
was the proximate cause of the accident; (2) in increasing the civil
indemnity from P30,000 to P50,000; and (3) in using the life
expectancy of the deceased instead of the life expectancies of
respondents.
The Court's Ruling
The Petition has no merit.
First Issue: Negligence
Petitioners contend that Pestao was not under any obligation to slow
down when he overtook the motorcycle, because the deceased had
given way to him upon hearing the bus horn. Seeing that the left side
of the road was clearly visible and free of oncoming traffic, Pestao
accelerated his speed to pass the motorcycle. Having given way to the
bus, the motorcycle driver should have slowed down until he had been
overtaken.
They further contend that the motorcycle was not in the middle of the
road nearest to the junction as found by the trial and the appellate
courts, but was on the inner lane. This explains why the damage on
the bus were all on the right side - the right end of the bumper and the
right portion of the radiator grill were bent and dented. Hence, they
insist that it was the victim who was negligent.
We disagree. Petitioners are raising a question of fact based on
Pestao's testimony contradicting that of Eyewitness Ignacio Neis and
on the location of the dents on the bumper and the grill. Neis testified
that as the two vehicles approached the junction, the victim raised his
left arm to signal that he was turning left to Tabagon, but that the latter
and his companion were thrown off the motorcycle after it was bumped
by the overspeeding bus.
These contentions have already been passed upon by the trial and the
appellate courts. We find no cogent reason to reverse or modify their
factual findings. The CA agreed with the trial court that the vehicular
collision was caused by Pestao's negligence when he attempted to
overtake the motorcycle. As a professional driver operating a public
transport bus, he should have anticipated that overtaking at a junction
was a perilous maneuver and should thus have exercised extreme
caution.

The CA said that allowing Pestao to ply his route with a defective
speedometer showed laxity on the part of Metro Cebu in the operation
of its business and in the supervision of its employees. The negligence
alluded to here is in its supervision over its driver, not in that which
directly caused the accident. The fact that Pestao was able to use a
bus with a faulty speedometer shows that Metro Cebu was remiss in
the supervision of its employees and in the proper care of its vehicles.
It had thus failed to conduct its business with the diligence required by
law.
Second Issue: Life Indemnity
Petitioners aver that the CA erred in increasing the award for life
indemnity from P30,000 to P50,000, without specifying any
aggravating circumstance to justify the increment as provided in the
Civil Code.9
This contention is untenable. The indemnity for death caused by a
quasi-delict used to be pegged at P3,000, based on Article 2206 of the
Civil Code. However, the amount has been gradually increased
through the years because of the declining value of our currency. At
present, prevailing jurisprudence fixes the amount at P50,000. 10
Third Issue: Loss of Earning Capacity
Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals, 11 which held:
"The determination of the indemnity to be awarded to the heirs of a
deceased person has therefore no fixed basis. . . . The life expectancy
of the deceased or of the beneficiary, whichever is shorter, is an
important factor . . . "
They contend that the CA used the wrong basis for its computation of
earning capacity.
We disagree. The Court has consistently computed the loss of earning
capacity based on the life expectancy of the deceased,12 and not on
that of the heir.13 Even Villa Rey Transit did likewise.
The award for loss of earning capacity is based on two factors: (1) the
number of years on which the computation of damages is based and
(2) the rate at which the loss sustained by the heirs is fixed.14 The first
factor refers to the life expectancy, which takes into consideration the
nature of the victim's work, lifestyle, age and state of health prior to the

accident. The second refers to the victim's earning capacity minus the
necessary living expenses. Stated otherwise, the amount recoverable
is that portion of the earnings of the deceased which the beneficiary
would have received the net earnings of the deceased.15

WHEREFORE, the Petition is DENIED and the assailed Decision and

Resolution AFFIRMED. Cost against petitioners

1wphi1.nt

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-28014-15 May 29, 1970

SPOUSES MARCELO LANDINGIN and RACQUEL
BOCASAS, plaintiffs-appellees,
vs.
PANGASINAN TRANSPORTATION CO. and MARCELO
OLIGAN, defendants-appellants.
SPOUSES PEDRO GARCIA and EUFRACIA LANDINGIN, plaintiffsappellees,
vs.
PANGASINAN TRANSPORTATION CO. and MARCELO
OLIGAN, defendants-appellants.
Gabriel A. Zabala for plaintiffs-appellees.
Vicente M. Erfe Law Office for defendants-appellants.

VILLAMOR, J.:
Direct appeal on a question of law from the portion of the judgment of
the Court of First Instance of Manila ordering the defendants
Pangasinan Transportation Co. (PANTRANCO) and Marcelo Oligan to
pay the plaintiffs in Civil Case No. D-1468
(L-28014) the sum of P6,500.00, and the plaintiffs in Civil Case No.
1470 (L-28015) the sum of P3,500.00.
The complaints in said Civil Cases Nos. D-1468 and D-1470 were filed
by the spouses Marcelo Landingin and Racquel Bocasas, and the
spouses Pedro Garcia and Eufracia Landingin, respectively, for
damages allegedly suffered by them in connection with the death of
their respective daughter, Leonila Landingin and Estrella Garcia, due to
the alleged negligence of the defendants and/or breach of contract of
carriage. In their complaints, plaintiffs averred, among others, that in
the morning of April 20, 1963, their above-mentioned daughters were
among the passengers in the bus driven by defendant Marcelo Oligan
and owned and operated by defendant PANTRANCO on an excursion
trip from Dagupan City to Baguio City and back, that the bus was open
on one side and enclosed on the other, in gross violation of the rules of
the Public Service Commission; that defendant PANTRANCO acted
with negligence, fraud and bad faith in pretending to have previously
secured a special permit for the trip when in truth it had not done so;
that upon reaching an uphill point at Camp 8, Kennon Road, Baguio
City, on the onward trip, defendant driver, through utter lack of
foresight, experience and driving knowledge, caused the bus to stall
and stop for a few moments; that through the said defendant's fault
and mishandling, the motor ceased to function, causing the bus to slide

back unchecked; that when the said defendant suddenly swerved and
steered the bus toward the mountainside, Leonila and Estrella,
together with several other passengers, were thrown out of the bus
through its open side unto the road, suffering serious injuries as a
result of which Leonila and Estrella died at the hospital and the same
day; and that in connection with the incident, defendant driver had
been charged with and convicted of multiple homicide and multiple
slight physical injuries on account of the death of Leonila and Estrella
and of the injuries suffered by four others, although it may be said, by
way of parenthesis, that this case is now pending appeal in a higher
court. The plaintiffs prayed for awards of moral, actual and exemplary
damages in the total sum of P40,000.00 in Civil Case No. D-1468, and
in the total sum of P25,000.00 in Civil Case No. D-1470 as well as
attorney's fees in the amounts of P5,000.00 and P4,000.00,
respectively.
Defendants filed a joint answer to each of the two complaints alleging,
among others, that at the time of the accident, defendant driver was
driving the bus at, the slow speed of about 10 kilometers per hour; that
while the said defendant was steering his bus toward the mountainside
after hearing a sound coming from under the rear end of the bus,
Leonila and Estrella recklessly, and in disobedience to his shouted
warnings and advice, jumped out of the bus causing their heads to hit
the road or pavement; that the bus was then being driven with
extraordinary care, prudence and diligence; that defendant
PANTRANCO observed the care and diligence of a good father of a
family to prevent the accident as well as in the selection and
supervision of its employees, particularly of defendant driver; and that
the decision convicting the said defendant was not yet final, the same
having been appealed to the Court of Appeals where it was still
pending.
By agreement of the parties, the two cases were tried jointly. On
October 17, 1966, the court a quo rendered its decision therein in
which it made the following findings; that upon reaching the fatal spot
at Camp 8, a sudden snapping or breaking of metal below the floor of
the bus was heard, and the bus abruptly stopped, rolling back a few
moments later; that as a result, some of the passengers jumped out of
the bus, while others stepped down; that defendant driver maneuvered
the bus safely to and against the side of the mountain where its rear
end was made to rest, ensuring the safety of the many passengers still
inside the bus; that while defendant driver as steering the bus towards
the mountainside, he advised the passengers not to jump, but to
remain seated; that Leonila and Estrella were not thrown out of the
bus, but that they panicked and jumped out; that the malfunctioning of
the motor resulted from the breakage of the cross-joint; that there was
no negligence on the part of either of the defendants; that only the day
before, the said cross-joint was duly inspected and found to be in
order; and that defendant PANTRANCO had exercised the requisite
care in the selection and supervision of its employees, including the
defendant driver. The court concluded that "the accident was caused
by a fortuitous event or an act of God brought about by some extraordinary circumstances independent of the will of the Pantranco or its
employees."
One would wonder why in the face of such factual findings and
conclusion of the trial court, the defendants, instead of the plaintiffs,
should come to this Court on appeal. The answer lies in the dispositive
portion of the decision, to wit:

IN VIEW OF THE FOREGOING

CONSIDERATIONS, the Court hereby renders
judgment: (a) Absolving the defendants from any
liability on account of negligence on their part and
therefore dismissing the complaints in these two
cases; (b) However, as stated above, the Court
hereby orders the defendant Pantranco to pay to
the plaintiffs spouses Marcelo Tandingin and
Racquel Bocasas in Civil Case No. D-1468 the
amount of P6,500.00; and the amount of
P3,500.00 to the spouses Pedro Garcia and
Eufracia Landingin in Civil Case No. D-1470, not
in payment of liability because of any negligence
on the part of the defendants but as an expression
of sympathy and goodwill. (Emphasis supplied.)
As to what impelled the court below to include item (b) in the
dispositive portion of its decision, can be gathered from the
penultimate paragraph of the decision, which reads:
However, there is evidence to the effect that an
offer of P8,500.00 in the instant cases without any
admission of fault or negligence had been made
by the defendant Pantranco and that actually in
Civil Case No. D-1469 for the death of Pacita
Descalso, the other deceased passenger of the
bus in question, the heirs of the decease received
P3,000.00 in addition to hospital and medical bills
and the coffin of the deceased for the dismissal of
the said case without Pantranco accepting liability.
There was as a matter of fact during the pre-trial of
these two cases a continuing offer of settlement
on the part of the defendant Pantranco without
accepting any liability for such damages, and the
Court understood that the Pantranco would be
willing still to pay said amounts even if these
cases were to be tried on the merits. It is wellknown that the defendant Pantranco is zealous in
the preservation of its public relations. In the spirit
therefore of the offer of the defendant Pantranco
aforesaid, to assuage the feelings of the herein
plaintiffs an award of P6,500.00 for the spouses
Marcelo Landingin and Racquel Bocasas in Civil
Case No. D-1468 whose daughter Leonila was,
when she died, a third-year Commerce student at
the Far Eastern University, and P3,500.00 for the
spouses Pedro Garcia and Eufracia Landingin in
Civil Case No. D-1470 whose daughter Estrella
was in the fourth year High at the Dagupan
Colleges when she died, is hereby made in their
favor. This award is in addition to what Pantranco
might have spent to help the parents of both
deceased after the accident.
Defendants-appellants complain that having found them to be
absolutely free from fault or negligence, and having in fact dismissed
the complaints against them, the court should not have ordered them
to assume any pecuniary liability. There would be merit in his argument
but for the fact that defendant-appellant PANTRANCO was guilty of
breach of contract of carriage. It will be noted that in each of the two
complaints it is averred that two buses including the one in which the
Republic of the Philippines
SUPREME COURT
Manila

two deceased girls were riding, were hired to transport the excursionist
passengers from Dagupan City to Baguio City, and return, and that the
said two passengers did not reach destination safely.
As a common carrier, defendant-appellant PANTRANCO was duty
bound to carry its 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 1755,
Civil Code.) Did defendant-appellant PANTRANCO measure up to the
degree of care and foresight required it under the circumstances? We
think not. The court below found that the cross-joint of the bus in which
the deceased were riding broke, which caused the malfunctioning of
the motor, which in turn resulted in panic among some of the
passengers. This is a finding of fact which this Court may not disturb.
We are of the opinion, however, that the lower court's conclusion
drawn from that fact, i.e., that "the accident was caused by a fortuitous
event or an act of God brought about by some extraordinary
circumstances independent of the will of the Pantranco or its
employees," is in large measure conjectural and speculative, and was
arrived at without due regard to all the circumstances, as required by
Article 1755. In Lasam vs. Smith (45 Phil. 660), this Court held that an
accident caused by defects in the automobile is not a caso fortuito. The
rationale of the carrier's liability is the fact that "the passenger has
neither the choice nor control over the carrier in the selection and use
of the equipment and appliances in use by the carrier." (Necesito, et al.
vs. Paras, et al., 104 Phil. 75.)
When a passenger dies or is injured, the presumption is that the
common carrier is at fault or that it acted negligently (Article 1756).
This presumption is only rebutted by proof on the carrier's part that it
observed the "extraordinary diligence" required in Article 1733 and the
"utmost diligence of very cautious persons" required in Article 1755
(Article 1756). In the instant case it appears that the court below
considered the presumption rebutted on the strength of defendantsappellants' evidence that only the day before the incident, the
crossjoint in question was duly inspected and found to be in order. It
does not appear, however, that the carrier gave due regard for all the
circumstances in connection with the said inspection. The bus in which
the deceased were riding was heavily laden with passengers, and it
would be traversing mountainous, circuitous and ascending roads.
Thus the entire bus, including its mechanical parts, would naturally be
taxed more heavily than it would be under ordinary circumstances. The
mere fact that the bus was inspected only recently and found to be in
order would not exempt the carrier from liability unless it is shown that
the particular circumstances under which the bus would travel were
also considered.
In the premises, it was error for the trial court to dismiss the
complaints. The awards made by the court should be considered in the
concept of damages for breach of contracts of carriage.
IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment
appealed from is modified as indicated above, and defendant-appellant
PANTRANCO is ordered to pay to plaintiffs-appellees the amounts
stated in the judgment appealed from, as damages for breach of
contracts, with interest thereon at the legal rate from the date of the
filing of the complaints. Costs against defendant-appellant
PANTRANCO.

THIRD DIVISION

G.R. No. 118126 March 4, 1996

TRANS-ASIA SHIPPING LINES, INC., petitioner,
vs.

At Cebu City, plaintiff together with the other

passengers who requested to be brought back to
Cebu City, were allowed to disembark. Thereafter, the
vessel proceeded to Cagayan de Oro City. Plaintiff,
the next day, boarded the M/V Asia Japan for its
voyage to Cagayan de Oro City, likewise a vessel of
defendant.

COURT OF APPEALS and ATTY. RENATO T. ARROYO, respondents.

On account of this failure of defendant to transport
him to the place of destination on November 12,
1991, plaintiff filed before the trial court a complaint
for damages against defendant. 4

DAVIDE, JR., J.:p

As formulated by the petitioner, the issue in this petition for review
on certiorari under Rule 45 of the Rules of Court is as follows:
In case of interruption of a vessel's voyage and the
consequent delay in that vessel's arrival at its port of
destination, is the right of a passenger affected
thereby to be determined and governed by the vague
Civil Code provision on common carriers, or shall it
be, in the absence of a specific provision
thereon governed by Art. 698 of the Code of
Commerce? 1
The petitioner considers it a "novel question of law."
Upon a closer evaluation, however, of the challenged decision of the Court
of Appeals of 23 November 1994, 2 vis-a-vis, the decision of 29 June 1992
in Civil Case No. 91-491 of the Regional Trial Court (RTC) of Cagayan de
Oro City, Branch 24, 3 as well as the allegations and arguments adduced by
the parties, we find the petitioner's formulation of the issue imprecise. As
this Court sees it, what stands for resolution is a common carrier's liability
for damages to a passenger who disembarked from the vessel upon its
return to the port of origin, after it suffered engine trouble and had to stop at
sea, having commenced the contracted voyage on one engine.
The antecedents are summarized by the Court of Appeals as follows:
Plaintiff [herein private respondent Atty. Renato
Arroyo], a public attorney, bought a ticket [from]
defendant [herein petitioner], a corporation engaged
in . . . inter-island shipping, for the voyage of M/V Asia
Thailand vessel to Cagayan de Oro City from Cebu
City on November 12, 1991.
At around 5:30 in the evening of November 12, 1991,
plaintiff boarded the M/V Asia Thailand vessel. At that
instance, plaintiff noticed that some repair works [sic]
were being undertaken on the engine of the vessel.
The vessel departed at around 11:00 in the evening
with only one (1) engine running.

In his complaint, docketed as Civil Case No. 91-491, plaintiff (hereinafter

private respondent) alleged that the engines of the M/V Asia Thailand
conked out in the open sea, and for more than an hour it was stalled and at
the mercy of the waves, thus causing fear in the passengers. It sailed back
to Cebu City after it regained power, but for unexplained reasons, the
passengers, including the private respondent, were arrogantly told to
disembark without the necessary precautions against possible injury to
them. They were thus unceremoniously dumped, which only exacerbated
the private respondent's mental distress. He further alleged that by reason
of the petitioner's wanton, reckless, and willful acts, he was unnecessarily
exposed to danger and, having been stranded in Cebu City for a day,
incurred additional expenses and loss of income. He then prayed that he be
awarded P1,100.00, P50,000.00, and P25,000.00 as compensatory, moral;
and exemplary damages, respectively. 5
In his pre-trial brief, the private respondent asserted that his complaint was
"an action for damages arising from bad faith, breach of contract and from
tort," with the former arising from the petitioner's "failure to carry [him] to his
place of destination as contracted," while the latter from the "conduct of the
[petitioner] resulting [in] the infliction of emotional distress" to the private
respondent. 6
After due trial, the trial court rendered its decision 7 and ruled that the action
was only for breach of contract, with Articles 1170, 1172, and 1173 of the
Civil Code as applicable law not Article 2180 of the same Code. It was of
the opinion that Article 1170 made a person liable for damages if, in the
performance of his obligation, he was guilty of fraud, negligence, or delay,
or in any manner contravened the tenor thereof; moreover, pursuant to
Article 2201 of the same Code, to be entitled to damages, the nonperformance of the obligation must have been tainted not only by fraud,
negligence, or delay, but also bad faith, malice, and wanton attitude. It then
disposed of the case as follows:
WHEREFORE, it not appearing from the evidence
that plaintiff was left in the Port of Cebu because of
the fault, negligence, malice or wanton attitude of
defendant's employees, the complaint is DISMISSED.
Defendant's counterclaim is likewise dismissed it not
appearing also that filing of the case by plaintiff was
motivated by malice or bad faith. 8
The trial court made the following findings to support its disposition:

After an hour of slow voyage, the vessel stopped near

Kawit Island and dropped its anchor thereat. After half
an hour of stillness, some passengers demanded that
they should be allowed to return to Cebu City for they
were no longer willing to continue their voyage to,
Cagayan de Oro City. The captain acceeded [sic] to
their request and thus the vessel headed back to
Cebu City.

In the light of the evidence adduced by the parties

and of the above provisions of the New Civil Code,
the issue to be resolved, in the resolution of this case
is whether or not, defendant thru its employees in [sic]
the night of November 12, 1991, committed fraud,
negligence, bad faith or malice when it left plaintiff in
the Port of Cebu when it sailed back to Cagayan de
Oro City after it has [sic] returned from Kawit Island.
Evaluation of the evidence of the parties tended to
show nothing that defendant committed fraud. As
early as 3:00 p.m. of November 12, 1991, defendant
did not hide the fact that the cylinder head cracked.

Plaintiff even saw during its repair. If he had doubts as

to the vessel's capacity to sail, he had time yet to take
another boat. The ticket could be returned to
defendant and corresponding cash [would] be
returned to him.
Neither could negligence, bad faith or malice on the
part of defendant be inferred from the evidence of the
parties. When the boat arrived at [the] Port of Cebu
after it returned from Kawit Island, there was an
announcement that passengers who would like to
disembark were given ten (10) minutes only to do so.
By this announcement, it could be inferred that the
boat will [sic] proceed to Cagayan de Oro City. If
plaintiff entertained doubts, he should have asked a
member of the crew of the boat or better still, the
captain of the boat. But as admitted by him, he was of
the impression only that the boat will not proceed to
Cagayan de Oro that evening so he disembarked. He
was instead, the ones [sic] negligent. Had he been
prudent, with the announcement that those who will
disembark were given ten minutes only, he should
have lingered a little by staying in his cot and inquired
whether the boat will proceed to Cagayan de Oro City
or not. Defendant cannot be expected to be telling
[sic] the reasons to each passenger. Announcement
by microphone was enough.
The court is inclined to believe that the story of
defendant that the boat returned to the Port of Cebu
because of the request of the passengers in view of
the waves. That it did not return because of the
defective engines as shown by the fact that fifteen
(15) minutes after the boat docked [at] the Port of
Cebu and those who wanted to proceed to Cagayan
de Oro disembarked, it left for Cagayan de Oro City.
The defendant got nothing when the boat returned to
Cebu to let those who did not want to proceed to
Cagayan de Oro City including plaintiff disembarked.
On the contrary, this would mean its loss instead
because it will have to refund their tickets or they will
use it the next trip without paying anymore. It is hard
therefore, to imagine how defendant by leaving
plaintiff in Cebu could have acted in bad faith,
negligently, wantonly and with malice.
If plaintiff, therefore, was not able to [m]ake the trip
that night of November 12, 1991, it was not because
defendant maliciously did it to exclude him [from] the
trip. If he was left, it was because of his fault or
negligence. 9
Unsatisfied, the private respondent appealed to the Court of Appeals (CAG.R. CV No. 39901) and submitted for its determination the following
assignment of errors: (1) the trial court erred in not finding that the
defendant-appellee was guilty of fraud, delay, negligence, and bad faith;
and (2) the trial court. erred in not awarding moral and exemplary
damages. 10
In its decision of 23 November 1994, 11 the Court of Appeals reversed the
trial court's decision by applying Article 1755 in relation to Articles 2201,
2208, 2217, and 2232 of the Civil Code and, accordingly, awarded
compensatory, moral, and exemplary damages as follows:
WHEREFORE, premises considered, the appealed
decision is hereby REVERSED and SET ASIDE and
another one is rendered ordering defendant-appellee
to pay plaintiff-appellant:

1. P20,000.00 as moral damages;

2. P10,000.00 as exemplary damages;
3. P5,000.00 as attorney's fees;
4. Cost of suit.
SO ORDERED. 12
It did not, however, allow the grant of damages for the delay in the
performance of the petitioner's obligation as the requirement of demand set
forth in Article 1169 of the Civil Code had not been met by the private
respondent. Besides, it found that the private respondent offered no
evidence to prove that his contract of carriage with the petitioner provided
for liability in case of delay in departure, nor that a designation of the time of
departure was the controlling motive for the establishment of the contract.
On the latter, the court a quo observed that the private respondent even
admitted he was unaware of the vessel's departure time, and it was only
when he boarded the vessel that he became aware of such. Finally, the
respondent Court found no reasonable basis for the private respondent's
belief that demand was useless because the petitioner had rendered it
beyond its power to perform its obligation; on the contrary, he even
admitted that the petitioner had been assuring the passengers that the
vessel would leave on time, and that it could still perform its obligation to
transport them as scheduled.
To justify its award of damages, the Court of Appeals ratiocinated as
follows:
It is an established and admitted fact that the vessel
before the voyage had undergone some repair work
on the cylinder head of the engine. It is likewise
admitted by defendant-appellee that it left the port of
Cebu City with only one engine running. Defendantappellee averred:
. . . The dropping of the vessel's
anchor after running slowly on
only one engine when it
departed earlier must have
alarmed some nervous
passengers . . .
The entries in the logbook which defendant-appellee
itself offered as evidence categorically stated therein
that the vessel stopped at Kawit Island because of
engine trouble. It reads:
2330 HRS STBD ENGINE' EMERGENCY STOP
2350 HRS DROP ANCHOR DUE TO ENGINE
TROUBLE, 2 ENGINE STOP.
The stoppage was not to start and synchronized [sic]
the engines of the vessel as claimed by defendantappellee. It was because one of the engines of the
vessel broke down; it was because of the disability of
the vessel which from the very beginning of the
voyage was known to defendant-appellee.
Defendant-appellee from the very start of the voyage
knew for a fact that the vessel was not yet in its
sailing condition because the second engine was still
being repaired. Inspite of this knowledge, defendantappellee still proceeded to sail with only one engine
running.

Defendant-appellee at that instant failed to exercise

the diligence which all common carriers should
exercise in transporting or carrying passengers. The
law does not merely require extraordinary diligence in
the performance of the obligation. The law mandates
that common carrier[s] should exercise utmost
diligence the transport of passengers.
Article 1755 of the New Civil Code provides:
Art. 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.
Utmost diligence of a VERY CAUTIOUS person
dictates that defendant-appellee should have pursued
the voyage only when its vessel was already fit to sail.
Defendant-appellee should have made certain that
the vessel [could] complete the voyage before starting
[to] sail. Anything less than this, the vessel [could not]
sail . . . with so many passengers on board it.
However, defendant-appellant [sic] in complete
disregard of the safety of the passengers, chose to
proceed with its voyage even if only one engine was
running as the second engine was still being repaired
during the voyage. Defendant-appellee disregarded
the not very remote possibility that because of the
disability of the vessel, other problems might occur
which would endanger the lives of the passengers
sailing with a disabled vessel.
As expected, . . . engine trouble occurred.
Fortunate[ly] for defendant-appellee, such trouble only
necessitated the stoppage of the vessel and did not
cause the vessel to capsize. No wonder why some
passengers requested to be brought back to Cebu
City. Common carriers which are mandated to
exercise utmost diligence should not be taking these
risks.
On this premise, plaintiff-appellant should not be
faulted why he chose to disembark from the vessel
with the other passengers when it returned back to
Cebu City. Defendant-appellee may call him a very
"panicky passenger" or a "nervous person", but this
will not relieve defendant-appellee from the liability it
incurred for its failure to exercise utmost diligence. 13
xxx xxx xxx
As to the second assigned error, we find that plaintiffappellant is entitled to the award of moral and
exemplary damages for the breach committed by
defendant-appellee.
As discussed, defendant-appellee in sailing to
Cagayan de Oro City with only one engine and with
full knowledge of the true condition of the vessel,
acted. in bad faith with malice, in complete disregard
for the safety of the passengers and only for its own
personal advancement/interest.
The Civil Code provides:

Art. 2201.
xxx xxx xxx
In case of fraud, bad faith,
malice or wanton attitude, the
obligor shall be responsible for
all damages which may be
reasonably attributed to the
non-performance of the
obligation.
Plaintiff-appellant is entitled to moral damages for the
mental anguish, fright and serious anxiety he suffered
during the voyage when the vessel's engine broke
down and when he disembarked from the vessel
during the wee hours of the morning at Cebu City
when it returned. 14
Moral damages are recoverable in a damage suit
predicated upon a breach of contract of carriage
where it is proved that the carrier was guilty of fraud
or bad faith even if death does not result. 15
Fraud and bad faith by defendant-appellee having
been established, the award of moral damages is in
order. 16
To serve as a deterrent to the commission of similar
acts in the future, exemplary damages should be
imposed upon defendant-appellee. 17 Exemplary
damages are designed by our civil law to permit the
courts to reshape behavior that is socially deleterious
in its consequence by creating . . . negative incentives
or deterrents against such behavior. 18
Moral damages having been awarded, exemplary
damages maybe properly awarded. When entitlement
to moral damages has been established, the award of
exemplary damages is proper. 19
The petitioner then instituted this petition and submitted the question of law
earlier adverted to.
Undoubtedly, there was, between the petitioner and the private respondent,
a contract of common carriage. The laws of primary application then are the
provisions on common carriers under Section 4, Chapter 3, Title VIII, Book
IV of the Civil Code, while for all other matters not regulated thereby, the
Code of Commerce and special laws. 20
Under Article 1733 of the Civil Code, the petitioner was bound to observe
extraordinary diligence in ensuring the safety of the private respondent.
That meant that the petitioner was, pursuant to Article 1755 of the said
Code, bound to carry the private respondent safely as far as human care
and foresight could provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances. In this case, we are in
full accord with the Court of Appeals that the petitioner failed to discharge
this obligation.
Before commencing the contracted voyage, the petitioner undertook some
repairs on the cylinder head of one of the vessel's engines. But even before
it could finish these repairs, it allowed the vessel to leave the port of origin
on only one functioning engine, instead of two. Moreover, even the lone
functioning engine was not in perfect condition as sometime after it had run
its course, it conked out. This caused the vessel to stop and remain a drift
at sea, thus in order to prevent the ship from capsizing, it had to drop
anchor. Plainly, the vessel was unseaworthy even before the voyage began.
For a vessel to be seaworthy, it must be adequately equipped for the

voyage and manned with a sufficient number of competent officers and

crew. 21 The failure of a common carrier to maintain in seaworthy condition
its vessel involved in a contract of carriage is a clear breach of its duty
prescribed in Article 1755 of the Civil Code.
As to its liability for damages to the private respondent, Article 1764 of the
Civil Code expressly provides:
Art. 1764. Damages in cases comprised in this
Section shall be awarded in accordance with Title
XVIII of this Book, concerning Damages. Article 2206
shall also apply to the death of a passenger caused
by the breach of contract by common carrier.
The damages comprised in Title XVIII of the Civil Code are
actual or compensatory, moral, nominal, temperate or moderate,
liquidated, and exemplary.
In his complaint, the private respondent claims actual or compensatory,
moral, and exemplary damages.
Actual or compensatory damages represent the adequate compensation for
pecuniary loss suffered and for profits the obligee failed to obtain. 22
In contracts or quasi-contracts, the obligor is liable for all the damages
which may be reasonably attributed to the non-performance of the
obligation if he is guilty of fraud, bad faith, malice, or wanton attitude. 23
Moral damages include moral suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, or similar injury. They may be recovered in the cases
enumerated in Article 2219 of the Civil Code, likewise, if they are the
proximate result of, as in this case, the petitioner's breach of the contract of
carriage. 24 Anent a breach of a contract of common carriage, moral
damages may be awarded if the common carrier, like the petitioner, acted
fraudulently or in bad faith. 25
Exemplary damages are imposed by way of example or correction for the
public good, in addition to moral, temperate, liquidated or compensatory
damages. 26 In contracts and quasi-contracts, exemplary damages may be
awarded if the defendant acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner. 27 It cannot, however, be considered as a
matter of right; the court having to decide whether or not they should be
adjudicated.28 Before the court may consider an award for exemplary
damages, the plaintiff must first show that he is entitled to moral, temperate
or compensatory damages; but it is not necessary that he prove the
monetary value thereof.29
The Court of Appeals did not grant the private respondent actual or
compensatory damages, reasoning that no delay was incurred since there
was no demand, as required by Article 1169 of the Civil Code. This article,
however, finds no application in this case because, as found by the
respondent Court, there was in fact no delay in the commencement of the
contracted voyage. If any delay was incurred, it was after the
commencement of such voyage, more specifically, when the voyage was
subsequently interrupted when the vessel had to stop near Kawit Island
after the only functioning engine conked out.
As to the rights and duties of the parties strictly arising out of such delay,
the Civil Code is silent. However, as correctly pointed out by the petitioner,
Article 698 of the Code of Commerce specifically provides for such a
situation. It reads:
In case a voyage already begun should be
interrupted, the passengers shall be obliged to pay
the fare in proportion to the distance covered, without
right to recover for losses and damages if the
interruption is due to fortuitous event or force

majeure, but with a right to indemnity if the

interruption should have been caused by the captain
exclusively. If the interruption should be caused by the
disability of the vessel and a passenger should agree
to await the repairs, he may not be required to pay
any increased price of passage, but his living
expenses during the stay shall be for his own
account.
This article applies suppletorily pursuant to Article 1766 of the
Civil Code.
Of course, this does not suffice for a resolution of the case at bench for, as
earlier stated, the cause of the delay or interruption was the petitioner's
failure to observe extraordinary diligence. Article 698 must then be read
together with Articles 2199, 2200, 2201, and 2208 in relation to Article 21 of
the Civil Code. So read, it means that the petitioner is liable for any
pecuniary loss or loss of profits which the private respondent may have
suffered by reason thereof. For the private respondent, such would be the
loss of income if unable to report to his office on the day he was supposed
to arrive were it not for the delay. This, however, assumes that he stayed on
the vessel and was with it when it thereafter resumed its voyage; but he did
not. As he and some passengers resolved not to complete the voyage, the
vessel had to return to its port of origin and allow them to disembark. The
private respondent then took the petitioner's other vessel the following day,
using the ticket he had purchased for the previous day's voyage.
Any further delay then in the private respondent's arrival at the port of
destination was caused by his decision to disembark. Had he remained on
the first vessel, he would have reached his destination at noon of 13
November 1991, thus been able to report to his office in the afternoon. He,
therefore, would have lost only the salary for half of a day. But actual or
compensatory damages must be proved, 30 which the private respondent
failed to do. There is no convincing evidence that he did not receive his
salary for 13 November 1991 nor that his absence was not excused.
We likewise fully agree with the Court of Appeals that the petitioner is liable
for moral and exemplary damages. In allowing its unseaworthy M/V Asia
Thailand to leave the port of origin and undertake the contracted voyage,
with full awareness that it was exposed to perils of the sea, it deliberately
disregarded its solemn duty to exercise extraordinary diligence and
obviously acted with bad faith and in a wanton and reckless manner. On
this score, however, the petitioner asserts that the safety or the vessel and
passengers was never at stake because the sea was "calm" in the vicinity
where it stopped as faithfully recorded in the vessel's log book (Exhibit "4").
Hence, the petitioner concludes, the private respondent was merely "overreacting" to the situation obtaining then. 31
We hold that the petitioner's defense cannot exculpate it nor mitigate its
liability. On the contrary, such a claim demonstrates beyond cavil the
petitioner's lack of genuine concern for the safety of its passengers. It was,
perhaps, only providential then the sea happened to be calm. Even so, the
petitioner should not expect its passengers to act in the manner it desired.
The passengers were not stoics; becoming alarmed, anxious, or frightened
at the stoppage of a vessel at sea in an unfamiliar zone as nighttime is not
the sole prerogative of the faint-hearted. More so in the light of the many
tragedies at sea resulting in the loss of lives of hopeless passengers and
damage to property simply because common carriers failed in their duty to
exercise extraordinary diligence in the performance of their obligations.
We cannot, however, give our affirmance to the award of attorney's fees.
Under Article 2208 of the Civil Code, these are recoverable only in the
concept of actual damages, 32 not as moral damages 33 nor judicial
costs. 34Hence, to merit such an award, it is settled that the amount thereof
must be proven. 35 Moreover, such must be specifically prayed for as
was not done in this caseand may not be deemed incorporated within a
general prayer for "such other relief and remedy as this court may deem
just and equitable." 36 Finally, it must be noted that aside from the following,
the body of the respondent Court's decision was devoid of any statement
regarding attorney's fees:

Plaintiff-appellant was forced to litigate in order that

he can claim moral and exemplary damages for the
suffering he encurred [sic]. He is entitled to attorney's
fees pursuant to Article 2208 of the Civil Code. It
states:
Art. 2208. In the absence of stipulation, attorney's
fees and expenses of litigation, other than judicial
costs cannot be recovered except:
1. When exemplary damages
are awarded;
2. When the defendant's act or
omission has compelled the
plaintiff to litigate with third

FIRST DIVISION

persons or to incur expenses to

protect his interest.
This Court holds that the above does not satisfy the benchmark
of "factual, legal and equitable justification" needed as basis for
an award of attorney's fees. 37 In sum, for lack of factual and
legal basis, the award of attorney's fees must be deleted.
WHEREFORE, the instant petition is DENIED and the challenged decision
of the Court of Appeals in CA-G.R. CV No. 39901 is AFFIRMED subject to
the modification as to the award for attorney's fees which is hereby SET
ASIDE.
Costs against the petitioner.
SO ORDERED.

physician, Dr. Marivic Aguirre,[7] pronounced Reynaldo Raynera dead

on arrival.

[G.R. No. 120027. April 21, 1999]

EDNA A. RAYNERA, for herself and on behalf of the
minors RIANNA and REIANNE RAYNERA, petitioners,
vs. FREDDIE HICETA and JIMMY ORPILLA, respondents.
DECISION
PARDO, J.:
The case is a petition for review on certiorari of the decision of
the Court of Appeals,[1] reversing that of the Regional Trial Court,
Branch 45, Manila.[2]
The rule is well-settled that factual findings of the Court of
Appeals are generally considered final and may not be reviewed on
appeal. However, this principle admits of certain exceptions, among
which is when the findings of the appellate court are contrary to those
of the trial court, a re-examination of the facts and evidence may be
undertaken.[3] This case falls under the cited exception.
The antecedent facts are as follows:
Petitioner Edna A. Raynera was the widow of Reynaldo Raynera
and the mother and legal guardian of the minors Rianna and Reianne,
both surnamed Raynera. Respondents Freddie Hiceta and Jimmy
Orpilla were the owner and driver, respectively, of an Isuzu truck-trailer,
with plate No. NXC 848, involved in the accident.
On March 23, 1989, at about 2:00 in the morning, Reynaldo
Raynera was on his way home. He was riding a motorcycle traveling
on the southbound lane of East Service Road, Cupang,
Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to
30 kilometers per hour.[4] The truck was loaded with two (2) metal
sheets extended on both sides, two (2) feet on the left and three (3)
feet on the right. There were two (2) pairs of red lights, about 35 watts
each, on both sides of the metal plates.[5] The asphalt road was not
well lighted.
At some point on the road, Reynaldo Raynera crashed his
motorcycle into the left rear portion of the truck trailer, which was
without tail lights. Due to the collision, Reynaldo sustained head
injuries and truck helper Geraldino D. Lucelo [6] rushed him to the
Paraaque Medical Center. Upon arrival at the hospital, the attending

At the time of his death, Reynaldo was manager of the

Engineering Department, Kawasaki Motors (Phils.) Corporation. He
was 32 years old, had a life expectancy of sixty five (65) years, and an
annual net earnings of not less than seventy three thousand five
hundred (P73,500.00) pesos,[8] with a potential increase in annual net
earnings of not less than ten percent (10%) of his salary.[9]
On May 12, 1989, the heirs of the deceased demanded [10] from
respondents payment of damages arising from
the
death
of
Reynaldo Raynera as a result of the vehicular accident. The
respondents refused to pay the claims.
On September 13, 1989, petitioners filed with the Regional Trial
Court, Manila[11] a complaint[12] for damages against respondents owner
and driver of the Isuzu truck.
In their complaint against respondents, petitioners sought
recovery of damages for the death of Reynaldo Raynera caused by the
negligent operation of the truck-trailer at nighttime on the highway,
without tail lights.
In their answer filed on April 4, 1990, respondents alleged that
the truck was travelling slowly on the service road, not parked
improperly at a dark portion of the road, with no tail lights, license plate
and early warning device.
At the trial, petitioners presented Virgilio Santos. He testified
that at about 1:00 and 2:00 in the morning of March 23, 1989, he and
his wife went to Alabang market, on board a tricycle. They passed by
the service road going south, and saw a parked truck trailer, with its
hood open and without tail lights. They would have bumped the truck
but the tricycle driver was quick in avoiding a collision. The place was
dark, and the truck had no early warning device to alert passing
motorists.[13]
On the other hand, respondents presented truck helper
Geraldino Lucelo.[14] He testified that at the time the incident happened,
the truck was slowly traveling at approximately 20 to 30 kilometers per
hour. Another employee of respondents, auto-mechanic Rogoberto
Reyes,[15] testified that at about 3:00 in the afternoon of March 22,
1989, with the help of Lucelo, he installed two (2) pairs of red lights,
about 30 to 40 watts each, on both sides of the steel plates. [16] On his
part, traffic investigation officer Cpl. Virgilio del Monte [17]admitted that
these lights were visible at a distance of 100 meters.

On December 19, 1991, the trial court rendered decision in favor

of petitioners. It found respondents Freddie Hiceta and Jimmy
Orpilla negligent in view of these circumstances: (1) the truck trailer
had no license plate and tail lights; (2) there were only two pairs of red
lights, 50 watts[18] each, on both sides of the steel plates; and (3) the
truck trailer was improperly parked in a dark area.

Petitioners maintain that the proximate cause of Reynaldo

Rayneras death was respondents negligence in operating the truck
trailer on the highway without tail lights and license plate.

The trial court held that respondents negligence was the

immediate and proximate cause of Reynaldo Rayneras death, for
which they are jointly and severally liable to pay damages to
petitioners. The trial court also held that the victim was himself
negligent, although this was insufficient to overcome respondents
negligence. The trial court applied the doctrine of contributory
negligence[19] and reduced the responsibility of respondents by 20% on
account of the victims own negligence.

Negligence is the omission to do something which a reasonable

man, guided by those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of something, which a
prudent and reasonable man would not do.[23]

The dispositive portion of the lower courts decision reads as

follows:
All things considered, the Court is of the opinion that it is fair and
reasonable to fix the living and other expenses of the deceased the
sum of P54,000.00 a year or about P4,500.00 a month (P150.00 p/d)
and that, consequently, the loss or damage sustained by the plaintiffs
may be estimated at P1,674,000.00 for the 31 years of Reynaldo
Rayneras life expectancy.
Taking into account the cooperative negligence of the deceased
Reynaldo Raynera, the Court believes that the demand of substantial
justice are satisfied by allocating the damages on 80-20
ratio. Thus, P1,337,200.00 shall be paid by the defendants with
interest thereon, at the legal rate, from date of decision, as damages
for the loss of earnings. To this sum, the following shall be added:
(a) P33,412.00, actually spent for funeral services, interment and
memorial lot;
(b) P20,000.00 as attorneys fees;
(c) cost of suit.
SO ORDERED.[20]
On January 10, 1992, respondents Hiceta and Orpilla appealed
to the Court of Appeals.[21]
After due proceedings, on April 28, 1995, the Court of Appeals
rendered decision setting aside the appealed decision. The appellate
court held that Reynaldo Rayneras bumping into the left rear portion of
the truck was the proximate cause of his death, [22] and consequently,
absolved respondents from liability.
Hence, this petition for review on certiorari.
In this petition, the heirs of Reynaldo Raynera contend that
the appellate court erred in: (1) overturning the trial courts finding that
respondents negligent operation of the Isuzu truck was the proximate
cause of the victims death; (2) applying the doctrine of last clear
chance; (3) setting aside the trial courts award of actual and
compensatory damages.
The issues presented are (a) whether respondents were
negligent, and if so, (b) whether such negligence was the proximate
cause of the death of Reynaldo Raynera.

The Court finds no reason to disturb the factual findings of the

Court of Appeals.

Proximate cause is that cause, which, in natural and continuous

sequence, unbroken by any efficient intervening cause, produces the
injury, and without which the result would not have occurred.[24]
During the trial, it was established that the truck had no tail
lights. The photographs taken of the scene of the accident showed
that there were no tail lights or license plates installed on the Isuzu
truck. Instead, what were installed were two (2) pairs of lights on top of
the steel plates, and one (1) pair of lights in front of the truck. With
regard to the rear of the truck, the photos taken and the sketch in the
spot report proved that there were no tail lights.
Despite the absence of tail lights and license plate, respondents
truck was visible in the highway. It was traveling at a moderate speed,
approximately 20 to 30 kilometers per hour. It used the service road,
instead of the highway, because the cargo they were hauling posed a
danger to passing motorists. In compliance with the Land
Transportation Traffic Code (Republic Act No. 4136) [25] respondents
installed 2 pairs of lights on top of the steel plates, as the vehicles
cargo load extended beyond the bed or body thereof.
We find that the direct cause of the accident was the negligence
of the victim. Traveling behind the truck, he had the responsibility of
avoiding bumping the vehicle in front of him. He was in control of the
situation. His motorcycle was equipped with headlights to enable him
to see what was in front of him. He was traversing the service road
where the prescribed speed limit was less than that in the highway.
Traffic investigator Cpl. Virgilio del Monte testified that two pairs
of 50-watts bulbs were on top of the steel plates, [26] which were visible
from a distance of 100 meters. [27] Virgilio Santos admitted that from the
tricycle where he was on board, he saw the truck and its cargo of iron
plates from a distance of ten (10) meters. [28] In light of these
circumstances, an accident could have been easily avoided, unless the
victim had been driving too fast and did not exercise due care and
prudence demanded of him under the circumstances.
Virgilio Santos testimony strengthened respondents defense
that it was the victim who was reckless and negligent in driving his
motorcycle at high speed. The tricycle where Santos was on board
was not much different from the victims motorcycle that figured in the
accident. Although Santos claimed the tricycle almost bumped into the
improperly parked truck, the tricycle driver was able to avoid hitting the
truck.
It has been said that drivers of vehicles who bump the rear of
another vehicle are presumed to be the cause of the accident, unless
contradicted by other evidence.[29] The rationale behind the
presumption is that the driver of the rear vehicle has full control of the
situation as he is in a position to observe the vehicle in front of him.

We agree with the Court of Appeals that the responsibility to

avoid the collision with the front vehicle lies with the driver of the rear
vehicle.

WHEREFORE, we DENY the petition for review on certiorari and

AFFIRM the decision of the Court of Appeals in CA-G. R. CV No.
35895, dismissing the amended complaint in Civil Case No. 89-50355,
Regional Trial Court, Branch 45, Manila.

Consequently, no other person was to blame but the victim

himself since he was the one who bumped his motorcycle into the rear
of the Isuzu truck. He had the last clear chance of avoiding the
accident.

No costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

The Southern Lines, Inc. appealed to the Court of Appeals which

affirmed the judgment of the trial court. Hence, this petition for review.
The only question to be determined in this petition is whether or not the
defendant-carrier, the herein petitioner, is liable for the loss or shortage
of the rice shipped.

EN BANC
G.R. No. L-16629

January 31, 1962

Article 361 of the Code of Commerce provides: .

SOUTHERN LINES, INC., petitioner,

vs.
COURT OF APPEALS and CITY OF ILOILO, respondents.

ART. 361. The merchandise shall be

transported at the risk and venture of the shipper,
if the contrary has not been expressly stipulated.

Jose Ma. Lopez Vito, Jr. for petitioner.

The City Fiscal for respondents.

As a consequence, all the losses and

deteriorations which the goods may suffer during
the transportation by reason of fortuitous event,
force majeure, or the inherent nature and defect of
the goods, shall be for the account and risk of the
shipper.1wph1.t

DE LEON, J.:
This is a petition to review on certiorari the decision of the Court of
Appeals in CA-G.R. No. 15579-R affirming that of the Court of First
Instance of Iloilo which sentenced petitioner Southern Lines, Inc. to
pay respondent City of Iloilo the amount of P4,931.41.

Proof of these accidents is incumbent upon the

carrier.

Sometime in 1948, the City of Iloilo requisitioned for rice from the
National Rice and Corn Corporation (hereafter referred to as NARIC) in
Manila. On August 24 of the same year, NARIC, pursuant to the order,
shipped 1,726 sacks of rice consigned to the City of Iloilo on board the
SS "General Wright" belonging to the Southern Lines, Inc. Each sack
of rice weighed 75 kilos and the entire shipment as indicated in the bill
of lading had a total weight of 129,450 kilos. According to the bill of
lading, the cost of the shipment was P63,115.50 itemized and
computed as follows: .

Article 362 of the same Code provides: .

Unit Price per bag P36.25

P62,567.50

Handling at P0.13 per bag

224.38

Trucking at P2.50 per bag

323.62

T o t a l . . . . . .. . . . .

63,115.50

On September 3, 1948, the City of Iloilo received the shipment and

paid the amount of P63,115.50. However, it was noted that the foot of
the bill of lading that the City of Iloilo 'Received the above mentioned
merchandise apparently in same condition as when shipped, save as
noted below: actually received 1685 sacks with a gross weight of
116,131 kilos upon actual weighing. Total shortage ascertained 13,319
kilos." The shortage was equivalent to 41 sacks of rice with a net
weight of 13,319 kilos, the proportionate value of which was
P6,486.35.
On February 14, 1951 the City of Iloilo filed a complaint in the Court of
First Instance of Iloilo against NARIC and the Southern Lines, Inc. for
the recovery of the amount of P6,486.35 representing the value of the
shortage of the shipment of rice. After trial, the lower court absolved
NARIC from the complaint, but sentenced the Southern Lines, Inc. to
pay the amount of P4,931.41 which is the difference between the sum
of P6,486.35 and P1,554.94 representing the latter's counterclaim for
handling and freight.

ART. 362. Nevertheless, the carrier shall be

liable for the losses and damages resulting from
the causes mentioned in the preceding article 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 his establisbed
among careful persons, unless the shipper has
committed fraud in the bill of lading, representing
the goods to be of a kind or quality different from
what they really were.
If, notwithstanding the precautions referred to in
this article, the goods transported run the risk of
being lost, on account of their nature or by reason
of unavoidable accident, there being no time for
their owners to dispose of them, the carrier may
proceed to sell them, placing them for this purpose
at the disposal of the judicial authority or of the
officials designated by special provisions.
Under the provisions of Article 361, the defendant-carrier in order to
free itself from liability, was only obliged to prove that the damages
suffered by the goods were "by virtue of the nature or defect of the
articles." Under the provisions of Article 362, the plaintiff, in order to
hold the defendant liable, was obliged to prove that the damages to the
goods by virtue of their nature, occurred on account of its negligence
or because the defendant did not take the precaution adopted by
careful persons. (Government v. Ynchausti & Co., 40 Phil. 219, 223).
Petitioner claims exemption from liability by contending that the
shortage in the shipment of rice was due to such factors as the
shrinkage, leakage or spillage of the rice on account of the bad
condition of the sacks at the time it received the same and the
negligence of the agents of respondent City of Iloilo in receiving the
shipment. The contention is untenable, for, if the fact of improper
packing is known to the carrier or his servants, or apparent upon

ordinary observation, but it accepts the goods notwithstanding such

condition, it is not relieved of liability for loss or injury resulting
thereform. (9 Am Jur. 869.) Furthermore, according to the Court of
Appeals, "appellant (petitioner) itself frankly admitted that the strings
that tied the bags of rice were broken; some bags were with holes and
plenty of rice were spilled inside the hull of the boat, and that the
personnel of the boat collected no less than 26 sacks of rice which
they had distributed among themselves." This finding, which is binding
upon this Court, shows that the shortage resulted from the negligence
of petitioner.
Invoking the provisions of Article 366 of the Code of Commerce and
those of the bill of lading, petitioner further contends that respondent is
precluded from filing an action for damages on account of its failure to
present a claim within 24 hours from receipt of the shipment. It also
cites the cases of Government v. Ynchausti & Co., 24 Phil. 315
and Triton Insurance Co. v. Jose, 33 Phil. 194, ruling to the effect that
the requirement that the claim for damages must be made within 24
hours from delivery is a condition precedent to the accrual of the right
of action to recover damages. These two cases above-cited are not
applicable to the case at bar. In the first cited case, the plaintiff never
presented any claim at all before filing the action. In the second case,
there was payment of the transportation charges which precludes the
presentation of any claim against the carrier. (See Article 366, Code of
Commerce.) It is significant to note that in the American case of Hoye
v. Pennsylvania Railroad Co., 13 Ann. Case. 414, it has been said: .
... "It has been held that a stipulation in the
contract of shipment requiring the owner of the
goods to present a notice of his claim to the carrier
within a specified time after the goods have
arrived at their destination is in the nature of a
condition precedent to the owner's right to enforce
a recovery, that he must show in the first instance
that be has complied with the condition, or that the
circumstances were such that to have complied
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 148496

March 19, 2002

VIRGINES CALVO doing business under the name and style

TRANSORIENT CONTAINER TERMINAL SERVICES,
INC., petitioner,
vs.
UCPB GENERAL INSURANCE CO., INC. (formerly Allied
Guarantee Ins. Co., Inc.) respondent.
MENDOZA, J.:
This is a petition for review of the decision,1 dated May 31, 2001, of the
Court of Appeals, affirming the decision2of the Regional Trial Court,
Makati City, Branch 148, which ordered petitioner to pay respondent,
as subrogee, the amount of P93,112.00 with legal interest,
representing the value of damaged cargo handled by petitioner, 25%
thereof as attorney's fees, and the cost of the suit.1wphi1.nt
The facts are as follows:
Petitioner Virgines Calvo is the owner of Transorient Container
Terminal Services, Inc. (TCTSI), a sole proprietorship customs broker.
At the time material to this case, petitioner entered into a contract with
San Miguel Corporation (SMC) for the transfer of 114 reels of semichemical fluting paper and 124 reels of kraft liner board from the Port
Area in Manila to SMC's warehouse at the Tabacalera Compound,

with it would have required him to do an

unreasonable thing. The weight of authority,
however, sustains the view that such a stipulation
is more in the nature of a limitation upon the
owner's right to recovery, and that the burden of
proof is accordingly on the carrier to show that the
limitation was reasonable and in proper form or
within the time stated." (Hutchinson on Carrier, 3d
ed., par. 44) Emphasis supplied.
In the case at bar, the record shows that petitioner failed to plead this
defense in its answer to respondent's complaint and, therefore, the
same is deemed waived (Section 10, Rule 9, Rules of Court), and
cannot be raised for the first time at the trial or on appeal. (Maxilom v.
Tabotabo, 9 Phil. 390.) Moreover, as the Court of Appeals has said: .
... the records reveal that the appellee
(respondent) filed the present action, within a
reasonable time after the short delivery in the
shipment of the rice was made. It should be
recalled that the present action is one for the
refund of the amount paid in excess, and not for
damages or the recovery of the shortage; for
admittedly the appellee (respondent) had paid the
entire value of the 1726 sacks of rice, subject to
subsequent adjustment, as to shortages or losses.
The bill of lading does not at all limit the time for
filing an action for the refund of money paid in
excess.
WHEREFORE, the decision of the Court of Appeals is hereby affirmed
in all respects and the petition for certioraridenied.
With costs against the petitioner.

Romualdez St., Ermita, Manila. The cargo was insured by respondent

UCPB General Insurance Co., Inc.
On July 14, 1990, the shipment in question, contained in 30 metal
vans, arrived in Manila on board "M/V Hayakawa Maru" and, after 24
hours, were unloaded from the vessel to the custody of the arrastre
operator, Manila Port Services, Inc. From July 23 to July 25, 1990,
petitioner, pursuant to her contract with SMC, withdrew the cargo from
the arrastre operator and delivered it to SMC's warehouse in Ermita,
Manila. On July 25, 1990, the goods were inspected by Marine Cargo
Surveyors, who found that 15 reels of the semi-chemical fluting paper
were "wet/stained/torn" and 3 reels of kraft liner board were likewise
torn. The damage was placed at P93,112.00.
SMC collected payment from respondent UCPB under its insurance
contract for the aforementioned amount. In turn, respondent, as
subrogee of SMC, brought suit against petitioner in the Regional Trial
Court, Branch 148, Makati City, which, on December 20, 1995,
rendered judgment finding petitioner liable to respondent for the
damage to the shipment.
The trial court held:
It cannot be denied . . . that the subject cargoes sustained
damage while in the custody of defendants. Evidence such
as the Warehouse Entry Slip (Exh. "E"); the Damage Report
(Exh. "F") with entries appearing therein, classified as "TED"
and "TSN", which the claims processor, Ms. Agrifina De
Luna, claimed to be tearrage at the end and tearrage at the
middle of the subject damaged cargoes respectively,
coupled with the Marine Cargo Survey Report (Exh. "H" - "H4-A") confirms the fact of the damaged condition of the

subject cargoes. The surveyor[s'] report (Exh. "H-4-A") in

particular, which provides among others that:
" . . . we opine that damages sustained by
shipment is attributable to improper handling in
transit presumably whilst in the custody of the
broker . . . ."
is a finding which cannot be traversed and overturned.
The evidence adduced by the defendants is not enough to
sustain [her] defense that [she is] are not liable. Defendant
by reason of the nature of [her] business should have
devised ways and means in order to prevent the damage to
the cargoes which it is under obligation to take custody of
and to forthwith deliver to the consignee. Defendant did not
present any evidence on what precaution [she] performed to
prevent [the] said incident, hence the presumption is that the
moment the defendant accepts the cargo [she] shall perform
such extraordinary diligence because of the nature of the
cargo.
....
Generally speaking under Article 1735 of the Civil Code, if
the goods are proved to have been lost, destroyed or
deteriorated, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they
have observed the extraordinary diligence required by law.
The burden of the plaintiff, therefore, is to prove merely that
the goods he transported have been lost, destroyed or
deteriorated. Thereafter, the burden is shifted to the carrier
to prove that he has exercised the extraordinary diligence
required by law. Thus, it has been held that the mere proof of
delivery of goods in good order to a carrier, and of their
arrival at the place of destination in bad order, makes out a
prima facie case against the carrier, so that if no explanation
is given as to how the injury occurred, the carrier must be
held responsible. It is incumbent upon the carrier to prove
that the loss was due to accident or some other
circumstances inconsistent with its liability." (cited in
Commercial Laws of the Philippines by Agbayani, p. 31, Vol.
IV, 1989 Ed.)
Defendant, being a customs brother, warehouseman and at
the same time a common carrier is supposed [to] exercise
[the] extraordinary diligence required by law, hence the
extraordinary responsibility lasts from the time the goods are
unconditionally placed in the possession of and received by
the carrier for transportation until the same are delivered
actually or constructively by the carrier to the consignee or to
the person who has the right to receive the same.3
Accordingly, the trial court ordered petitioner to pay the following
amounts -1. The sum of P93,112.00 plus interest;
2. 25% thereof as lawyer's fee;
3. Costs of suit.4
The decision was affirmed by the Court of Appeals on appeal. Hence
this petition for review on certiorari.

Petitioner contends that:

I. THE COURT OF APPEALS COMMITTED SERIOUS AND
REVERSIBLE ERROR [IN] DECIDING THE CASE NOT ON
THE EVIDENCE PRESENTED BUT ON PURE SURMISES,
SPECULATIONS AND MANIFESTLY MISTAKEN
INFERENCE.
II. THE COURT OF APPEALS COMMITTED SERIOUS AND
REVERSIBLE ERROR IN CLASSIFYING THE PETITIONER
AS A COMMON CARRIER AND NOT AS PRIVATE OR
SPECIAL CARRIER WHO DID NOT HOLD ITS SERVICES
TO THE PUBLIC.5
It will be convenient to deal with these contentions in the inverse order,
for if petitioner is not a common carrier, although both the trial court
and the Court of Appeals held otherwise, then she is indeed not liable
beyond what ordinary diligence in the vigilance over the goods
transported by her, would require.6 Consequently, any damage to the
cargo she agrees to transport cannot be presumed to have been due
to her fault or negligence.
Petitioner contends that contrary to the findings of the trial court and
the Court of Appeals, she is not a common carrier but a private carrier
because, as a customs broker and warehouseman, she does not
indiscriminately hold her services out to the public but only offers the
same to select parties with whom she may contract in the conduct of
her business.
The contention has no merit. In De Guzman v. Court of Appeals,7 the
Court dismissed a similar contention and held the party to be a
common carrier, thus The Civil Code defines "common carriers" in the following terms:
"Article 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 . . . Article 1732 also carefully avoids
making any distinction between a person or enterprise
offering transportation service on aregular 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
narrowsegment of the general population. We think that
Article 1732 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:
" x x x 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. x x x" 8
There is greater reason for holding petitioner to be a common carrier
because the transportation of goods is an integral part of her business.
To uphold petitioner's contention would be to deprive those with whom
she contracts the protection which the law affords them
notwithstanding the fact that the obligation to carry goods for her
customers, as already noted, is part and parcel of petitioner's business.
Now, as to petitioner's liability, Art. 1733 of the Civil Code provides:
Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of
the passengers transported by them, according to all the
circumstances of each case. . . .
In Compania Maritima v. Court of Appeals,9 the meaning of
"extraordinary diligence in the vigilance over goods" was explained
thus:
The extraordinary diligence in the vigilance over the goods
tendered for shipment requires the common carrier to know
and to follow the required precaution for avoiding damage to,
or destruction of the goods entrusted to it for sale, carriage
and delivery. It requires common carriers to render service
with the greatest skill and foresight and "to use all
reasonable means to ascertain the nature and characteristic
of goods tendered for shipment, and to exercise due care in
the handling and stowage, including such methods as their
nature requires."
In the case at bar, petitioner denies liability for the damage to the
cargo. She claims that the "spoilage or wettage" took place while the
goods were in the custody of either the carrying vessel "M/V Hayakawa
Maru," which transported the cargo to Manila, or the arrastre operator,
to whom the goods were unloaded and who allegedly kept them in
open air for nine days from July 14 to July 23, 1998 notwithstanding
the fact that some of the containers were deformed, cracked, or
otherwise damaged, as noted in the Marine Survey Report (Exh. H), to
wit:
MAXU-2062880

ICSU-363461-3
distorted/partly loose

rain gutter deformed/cracked

left side rubber gasket on door

PERU-204209-4
portion

with pinholes on roof panel right

TOLU-213674-3 signs of water soaked

wood flooring we[t] and/or with

MAXU-201406-0

with dent/crack on roof panel

ICSU-412105-0
rubber gasket on left side/door
panel partly detached loosened.10
In addition, petitioner claims that Marine Cargo Surveyor Ernesto
Tolentino testified that he has no personal knowledge on whether the
container vans were first stored in petitioner's warehouse prior to their
delivery to the consignee. She likewise claims that after withdrawing
the container vans from the arrastre operator, her driver, Ricardo
Nazarro, immediately delivered the cargo to SMC's warehouse in
Ermita, Manila, which is a mere thirty-minute drive from the Port Area
where the cargo came from. Thus, the damage to the cargo could not
have taken place while these were in her custody.11
Contrary to petitioner's assertion, the Survey Report (Exh. H) of the
Marine Cargo Surveyors indicates that when the shipper transferred
the cargo in question to the arrastre operator, these were covered by
clean Equipment Interchange Report (EIR) and, when petitioner's
employees withdrew the cargo from the arrastre operator, they did so
without exception or protest either with regard to the condition of
container vans or their contents. The Survey Report pertinently reads
-Details of Discharge:
Shipment, provided with our protective supervision was
noted discharged ex vessel to dock of Pier #13 South
Harbor, Manila on 14 July 1990, containerized onto 30' x 20'
secure metal vans, covered by clean EIRs. Except for slight
dents and paint scratches on side and roof panels, these
containers were deemed to have [been] received in good
condition.
....
Transfer/Delivery:
On July 23, 1990, shipment housed onto 30' x 20' cargo
containers was [withdrawn] by Transorient Container
Services, Inc. . . . without exception.
[The cargo] was finally delivered to the consignee's storage
warehouse located at Tabacalera Compound, Romualdez
Street, Ermita, Manila from July 23/25, 1990.12
As found by the Court of Appeals:
From the [Survey Report], it [is] clear that the shipment was
discharged from the vessel to the arrastre, Marina Port
Services Inc., in good order and condition as evidenced by
clean Equipment Interchange Reports (EIRs). Had there
been any damage to the shipment, there would have been a
report to that effect made by the arrastre operator. The
cargoes were withdrawn by the defendant-appellant from the
arrastre still in good order and condition as the same were
received by the former without exception, that is, without any
report of damage or loss. Surely, if the container vans were

deformed, cracked, distorted or dented, the defendantappellant would report it immediately to the consignee or
make an exception on the delivery receipt or note the same
in the Warehouse Entry Slip (WES). None of these took
place. To put it simply, the defendant-appellant received the
shipment in good order and condition and delivered the
same to the consignee damaged. We can only conclude that
the damages to the cargo occurred while it was in the
possession of the defendant-appellant. Whenever the thing
is lost (or damaged) in the possession of the debtor (or
obligor), it shall be presumed that the loss (or damage) was
due to his fault, unless there is proof to the contrary. No
proof was proffered to rebut this legal presumption and the
presumption of negligence attached to a common carrier in
case of loss or damage to the goods.13
Anent petitioner's insistence that the cargo could not have been
damaged while in her custody as she immediately delivered the
containers to SMC's compound, suffice it to say that to prove the
exercise of extraordinary diligence, petitioner must do more than
merely show the possibility that some other party could be responsible
for the damage. It must prove that it used "all reasonable means to
ascertain the nature and characteristic of goods tendered for
[transport] and that [it] exercise[d] due care in the handling [thereof]."
Petitioner failed to do this.
Nor is there basis to exempt petitioner from liability under Art. 1734(4),
which provides --

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:
....
(4) The character of the goods or defects in the packing or in
the containers.
....
For this provision to apply, the rule is that if the improper packing or, in
this case, the defect/s in the container, is/are known to the carrier or
his employees or apparent upon ordinary observation, but he
nevertheless accepts the same without protest or exception
notwithstanding such condition, he is not relieved of liability for damage
resulting therefrom.14 In this case, petitioner accepted the cargo
without exception despite the apparent defects in some of the
container vans. Hence, for failure of petitioner to prove that she
exercised extraordinary diligence in the carriage of goods in this case
or that she is exempt from liability, the presumption of negligence as
provided under Art. 173515 holds.
WHEREFORE, the decision of the Court of Appeals, dated May 31,
2001, is AFFIRMED.1wphi1.nt
SO ORDERED.
Bellosillo, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 143133

June 5, 2002

BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and

JARDINE DAVIES TRANSPORT SERVICES, INC.,petitioners,
vs.
PHILIPPINE FIRST INSURANCE CO., INC., respondents.

'1) FOUR Hundred Fifty One Thousand TwentySeven Pesos and 32/100 (P451,027.32) as actual
damages, representing the value of the damaged
cargo, plus interest at the legal rate from the time
of filing of the complaint on July 25, 1991, until
fully paid;
'2) Attorney's fees amounting to 20% of the claim;
and
'3) Costs of suit.'"4
The assailed Resolution denied petitioner's Motion for
Reconsideration.

PANGANIBAN, J.:
Proof of the delivery of goods in good order to a common carrier and of
their arrival in bad order at their destination constitutes prima facie fault
or negligence on the part of the carrier. If no adequate explanation is
given as to how the loss, the destruction or the deterioration of the
goods happened, the carrier shall be held liable therefor.

The CA reversed the Decision of the Regional Trial Court (RTC) of

Makati City (Branch 134), which had disposed as follows:
"WHEREFORE, in view of the foregoing, judgment is hereby
rendered, dismissing the complaint, as well as defendant's
counterclaim."5

Statement of the Case

The Facts
Before us is a Petition for Review under Rule 45 of the Rules of Court,
assailing the July 15, 1998 Decision1 and the May 2, 2000
Resolution2 of the Court of Appeals3 (CA) in CA-GR CV No. 53571.
The decretal portion of the Decision reads as follows:
"WHEREFORE, in the light of the foregoing disquisition, the
decision appealed from is hereby REVERSED and SET
ASIDE. Defendants-appellees are ORDERED to jointly and
severally pay plaintiffs-appellants the following:

The factual antecedents of the case are summarized by the Court of

Appeals in this wise:
"On June 13, 1990, CMC Trading A.G. shipped on board the
M/V 'Anangel Sky' at Hamburg, Germany 242 coils of
various Prime Cold Rolled Steel sheets for transportation to
Manila consigned to the Philippine Steel Trading
Corporation. On July 28, 1990, M/V Anangel Sky arrived at
the port of Manila and, within the subsequent days,

discharged the subject cargo. Four (4) coils were found to be

in bad order B.O. Tally sheet No. 154974. Finding the four
(4) coils in their damaged state to be unfit for the intended
purpose, the consignee Philippine Steel Trading Corporation
declared the same as total loss.1wphi1.nt

"Whether or not plaintiff by presenting only one witness who

has never seen the subject shipment and
whose testimony is purely hearsay is sufficient to pave the
way for the applicability of Article 1735 of the Civil Code;
II

"Despite receipt of a formal demand, defendants-appellees

refused to submit to the consignee's claim. Consequently,
plaintiff-appellant paid the consignee five hundred six
thousand eighty six & 50/100 pesos (P506,086.50), and was
subrogated to the latter's rights and causes of action against
defendants-appellees. Subsequently, plaintiff-appellant
instituted this complaint for recovery of the amount paid by
them, to the consignee as insured.
"Impugning the propriety of the suit against them,
defendants-appellees imputed that the damage and/or loss
was due to pre-shipment damage, to the inherent nature,
vice or defect of the goods, or to perils, danger and
accidents of the sea, or to insufficiency of packing thereof, or
to the act or omission of the shipper of the goods or their
representatives. In addition thereto, defendants-appellees
argued that their liability, if there be any, should not exceed
the limitations of liability provided for in the bill of lading and
other pertinent laws. Finally, defendants-appellees averred
that, in any event, they exercised due diligence and foresight
required by law to prevent any damage/loss to said
shipment."6
Ruling of the Trial Court
The RTC dismissed the Complaint because respondent had failed to
prove its claims with the quantum of proof required by law.7

"Whether or not the consignee/plaintiff filed the required

notice of loss within the time required by law;
III
"Whether or not a notation in the bill of lading at the time of
loading is sufficient to show pre-shipment damage and to
exempt herein defendants from liability;
IV
"Whether or not the "PACKAGE LIMITATION" of liability
under Section 4 (5) of COGSA is applicable to the case at
bar."12
In sum, the issues boil down to three:
1. Whether petitioners have overcome the presumption of
negligence of a common carrier
2. Whether the notice of loss was timely filed
3. Whether the package limitation of liability is applicable
This Court's Ruling

It likewise debunked petitioners' counterclaim, because respondent's

suit was not manifestly frivolous or primarily intended to harass them. 8
Ruling of the Court of Appeals
In reversing the trial court, the CA ruled that petitioners were liable for
the loss or the damage of the goods shipped, because they had failed
to overcome the presumption of negligence imposed on common
carriers.
The CA further held as inadequately proven petitioners' claim that the
loss or the deterioration of the goods was due to pre-shipment
damage.9 It likewise opined that the notation "metal envelopes rust
stained and slightly dented" placed on the Bill of Lading had not been
the proximate cause of the damage to the four (4) coils.10
As to the extent of petitioners' liability, the CA held that the package
limitation under COGSA was not applicable, because the words "L/C
No. 90/02447" indicated that a higher valuation of the cargo had been
declared by the shipper. The CA, however, affirmed the award of
attorney's fees.
Hence, this Petition.11

The Petition is partly meritorious.

First Issue:
Proof of Negligence
Petitioners contend that the presumption of fault imposed on common
carriers should not be applied on the basis of the lone testimony
offered by private respondent. The contention is untenable.
Well-settled is the rule that common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence and vigilance with respect to the safety
of the goods and the passengers they transport.13 Thus, common
carriers are required to render service with the greatest skill and
foresight and "to use all reason[a]ble means to ascertain the nature
and characteristics of the goods tendered for shipment, and to exercise
due care in the handling and stowage, including such methods as their
nature requires."14 The extraordinary responsibility lasts from the time
the goods are unconditionally placed in the possession of and received
for transportation by the carrier until they are delivered, actually or
constructively, to the consignee or to the person who has a right to
receive them.15

Issues
In their Memorandum, petitioners raise the following issues for the
Court's consideration:
I

This strict requirement is justified by the fact that, without a hand or a

voice in the preparation of such contract, the riding public enters into a
contract of transportation with common carriers.16 Even if it wants to, it
cannot submit its own stipulations for their approval.17 Hence, it merely
adheres to the agreement prepared by them.

Owing to this high degree of diligence required of them, common

carriers, as a general rule, are presumed to have been at fault or
negligent if the goods they transported deteriorated or got lost or
destroyed.18 That is, unless they prove that they exercised
extraordinary diligence in transporting the goods.19 In order to avoid
responsibility for any loss or damage, therefore, they have the burden
of proving that they observed such diligence.20
However, the presumption of fault or negligence will not arise21 if the
loss is due to any of the following causes: (1) flood, storm, earthquake,
lightning, or other natural disaster or calamity; (2) an act of the public
enemy in war, whether international or civil; (3) an act or omission of
the shipper or owner of the goods; (4) the character of the goods or
defects in the packing or the container; or (5) an order or act of
competent public authority.22 This is a closed list. If the cause of
destruction, loss or deterioration is other than the enumerated
circumstances, then the carrier is liable therefor.23
Corollary to the foregoing, mere proof of delivery of the goods in good
order to a common carrier and of their arrival in bad order at their
destination constitutes a prima facie case of fault or negligence against
the carrier. If no adequate explanation is given as to how the
deterioration, the loss or the destruction of the goods happened, the
transporter shall be held responsible.24
That petitioners failed to rebut the prima facie presumption of
negligence is revealed in the case at bar by a review of the records
and more so by the evidence adduced by respondent.25
First, as stated in the Bill of Lading, petitioners received the subject
shipment in good order and condition in Hamburg, Germany.26

A.

It is the company who contracts the checkers, sir.

Q.
You mentioned that you are a Head Checker, will you
inform this Honorable Court your duties and responsibilities?
A.
I am the representative of BM Santos on board the
vessel, sir, to supervise the discharge of cargoes.
xxx

Fourth, the Certificate of Analysis30 stated that, based on the sample

submitted and tested, the steel sheets found in bad order were wet
with fresh water.
Fifth, petitioners -- in a letter31 addressed to the Philippine Steel
Coating Corporation and dated October 12, 1990 -- admitted that they
were aware of the condition of the four coils found in bad order and
condition.
These facts were confirmed by Ruperto Esmerio, head checker of BM
Santos Checkers Agency. Pertinent portions of his testimony are
reproduce hereunder:
"Q.
Mr. Esmerio, you mentioned that you are a Head
Checker. Will you inform the Honorable Court with what
company you are connected?
A.

BM Santos Checkers Agency, sir.

Q.
How is BM Santos checkers Agency related or
connected with defendant Jardine Davies Transport
Services?

xxx

Q.
On or about August 1, 1990, were you still connected
or employed with BM Santos as a Head Checker?
A.

Yes, sir.

Q.
And, on or about that date, do you recall having
attended the discharging and inspection of cold steel sheets
in coil on board the MV/AN ANGEL SKY?
A.

Yes, sir, I was there.

xxx

xxx

xxx

Q.
Based on your inspection since you were also present
at that time, will you inform this Honorable Court the
condition or the appearance of the bad order cargoes that
were unloaded from the MV/ANANGEL SKY?
ATTY. MACAMAY:
Objection, Your Honor, I think the document itself
reflects the condition of the cold steel sheets and
the best evidence is the document itself, Your
Honor that shows the condition of the steel sheets.

Second, prior to the unloading of the cargo, an Inspection

Report27 prepared and signed by representatives of both parties
showed the steel bands broken, the metal envelopes rust-stained and
heavily buckled, and the contents thereof exposed and rusty.
Third, Bad Order Tally Sheet No. 15497928 issued by Jardine Davies
Transport Services, Inc., stated that the four coils were in bad order
and condition. Normally, a request for a bad order survey is made in
case there is an apparent or a presumed loss or damage.29

xxx

COURT:
Let the witness answer.
A.
The scrap of the cargoes is broken already and the
rope is loosen and the cargoes are dent on the sides."32
All these conclusively prove the fact of shipment in good order and
condition and the consequent damage to the four coils while in the
possession of petitioner,33 who notably failed to explain why.34
Further, petitioners failed to prove that they observed the extraordinary
diligence and precaution which the law requires a common carrier to
know and to follow to avoid damage to or destruction of the goods
entrusted to it for safe carriage and delivery.35
True, the words "metal envelopes rust stained and slightly dented"
were noted on the Bill of Lading; however, there is no showing that
petitioners exercised due diligence to forestall or lessen the
loss.36 Having been in the service for several years, the master of the
vessel should have known at the outset that metal envelopes in the
said state would eventually deteriorate when not properly stored while
in transit.37 Equipped with the proper knowledge of the nature of steel
sheets in coils and of the proper way of transporting them, the master
of the vessel and his crew should have undertaken precautionary
measures to avoid possible deterioration of the cargo. But none of
these measures was taken.38 Having failed to discharge the burden of

proving that they have exercised the extraordinary diligence required

by law, petitioners cannot escape liability for the damage to the four
coils.39
In their attempt to escape liability, petitioners further contend that they
are exempted from liability under Article 1734(4) of the Civil Code.
They cite the notation "metal envelopes rust stained and slightly
dented" printed on the Bill of Lading as evidence that the character of
the goods or defect in the packing or the containers was the proximate
cause of the damage. We are not convinced.
From the evidence on record, it cannot be reasonably concluded that
the damage to the four coils was due to the condition noted on the Bill
of Lading.40 The aforecited exception refers to cases when goods are
lost or damaged while in transit as a result of the natural decay of
perishable goods or the fermentation or evaporation of substances
liable therefor, the necessary and natural wear of goods in transport,
defects in packages in which they are shipped, or the natural
propensities of animals.41 None of these is present in the instant case.
Further, even if the fact of improper packing was known to the carrier
or its crew or was apparent upon ordinary observation, it is not relieved
of liability for loss or injury resulting therefrom, once it accepts the
goods notwithstanding such condition.42 Thus, petitioners have not
successfully proven the application of any of the aforecited exceptions
in the present case.43
Second Issue:
Notice of Loss
Petitioners claim that pursuant to Section 3, paragraph 6 of the
Carriage of Goods by Sea Act44 (COGSA), respondent should have
filed its Notice of Loss within three days from delivery. They assert that
the cargo was discharged on July 31, 1990, but that respondent filed
its Notice of Claim only on September 18, 1990.45
We are not persuaded. First, the above-cited provision of COGSA
provides that the notice of claim need not be given if the state of the
goods, at the time of their receipt, has been the subject of a joint
inspection or survey. As stated earlier, prior to unloading the cargo, an
Inspection Report46 as to the condition of the goods was prepared and
signed by representatives of both parties.47
Second, as stated in the same provision, a failure to file a notice of
claim within three days will not bar recovery if it is nonetheless filed
within one year.48 This one-year prescriptive period also applies to the
shipper, the consignee, the insurer of the goods or any legal holder of
the bill of lading.49
In Loadstar Shipping Co., Inc, v. Court of Appeals,50 we ruled that a
claim is not barred by prescription as long as the one-year period has
not lapsed. Thus, in the words of the ponente, Chief Justice Hilario G.
Davide Jr.:
"Inasmuch as the neither the Civil Code nor the Code of
Commerce states a specific prescriptive period on the
matter, the Carriage of Goods by Sea Act (COGSA)--which
provides for a one-year period of limitation on claims for loss
of, or damage to, cargoes sustained during transit--may be
applied suppletorily to the case at bar."

In the present case, the cargo was discharged on July 31, 1990, while
the Complaint51 was filed by respondent on July 25, 1991, within the
one-year prescriptive period.
Third Issue:
Package Limitation
Assuming arguendo they are liable for respondent's claims, petitioners
contend that their liability should be limited to US$500 per package as
provided in the Bill of Lading and by Section 4(5)52 of COGSA.53
On the other hand, respondent argues that Section 4(5) of COGSA is
inapplicable, because the value of the subject shipment was declared
by petitioners beforehand, as evidenced by the reference to and the
insertion of the Letter of Credit or "L/C No. 90/02447" in the said Bill of
Lading.54
A bill of lading serves two functions. First, it is a receipt for the goods
shipped.53 Second, it is a contract by which three parties -- namely, the
shipper, the carrier, and the consignee -- undertake specific
responsibilities and assume stipulated obligations.56 In a nutshell, the
acceptance of the bill of lading by the shipper and the consignee, with
full knowledge of its contents, gives rise to the presumption that it
constituted a perfected and binding contract.57
Further, a stipulation in the bill of lading limiting to a certain sum the
common carrier's liability for loss or destruction of a cargo -- unless the
shipper or owner declares a greater value58 -- is sanctioned by
law.59 There are, however, two conditions to be satisfied: (1) the
contract is reasonable and just under the circumstances, and (2) it has
been fairly and freely agreed upon by the parties.60 The rationale for
this rule is to bind the shippers by their agreement to the value
(maximum valuation) of their goods.61
It is to be noted, however, that the Civil Code does not limit the liability
of the common carrier to a fixed amount per package.62 In all matters
not regulated by the Civil Code, the right and the obligations of
common carriers shall be governed by the Code of Commerce and
special laws.63 Thus, the COGSA, which is suppletory to the provisions
of the Civil Code, supplements the latter by establishing a statutory
provision limiting the carrier's liability in the absence of a shipper's
declaration of a higher value in the bill of lading.64 The provisions on
limited liability are as much a part of the bill of lading as though
physically in it and as though placed there by agreement of the
parties.65
In the case before us, there was no stipulation in the Bill of
Lading66 limiting the carrier's liability. Neither did the shipper declare a
higher valuation of the goods to be shipped. This fact notwithstanding,
the insertion of the words "L/C No. 90/02447 cannot be the basis for
petitioners' liability.
First, a notation in the Bill of Lading which indicated the amount of the
Letter of Credit obtained by the shipper for the importation of steel
sheets did not effect a declaration of the value of the goods as required
by the bill.67 That notation was made only for the convenience of the
shipper and the bank processing the Letter of Credit.68
Second, in Keng Hua Paper Products v. Court of Appeals,69 we held
that a bill of lading was separate from the Other Letter of Credit
arrangements. We ruled thus:

"(T)he contract of carriage, as stipulated in the bill of lading

in the present case, must be treated independently of the
contract of sale between the seller and the buyer, and the
contract of issuance of a letter of credit between the amount
of goods described in the commercial invoice in the contract
of sale and the amount allowed in the letter of credit will not
affect the validity and enforceability of the contract of
carriage as embodied in the bill of lading. As the bank cannot
be expected to look beyond the documents presented to it
by the seller pursuant to the letter of credit, neither can the
carrier be expected to go beyond the representations of the
shipper in the bill of lading and to verify their accuracy vis-vis the commercial invoice and the letter of credit. Thus, the
discrepancy between the amount of goods indicated in the
invoice and the amount in the bill of lading cannot negate
petitioner's obligation to private respondent arising from the
contract of transportation."70
In the light of the foregoing, petitioners' liability should be computed
based on US$500 per package and not on the per metric ton price
declared in the Letter of Credit.71 In Eastern Shipping Lines, Inc. v.
Intermediate Appellate Court,72 we explained the meaning of packages:

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-48757 May 30, 1988
MAURO GANZON, petitioner,
vs.
COURT OF APPEALS and GELACIO E.
TUMAMBING, respondents.
Antonio B. Abinoja for petitioner.

"When what would ordinarily be considered packages are

shipped in a container supplied by the carrier and the
number of such units is disclosed in the shipping documents,
each of those units and not the container constitutes the
'package' referred to in the liability limitation provision of
Carriage of Goods by Sea Act."
Considering, therefore, the ruling in Eastern Shipping Lines and the
fact that the Bill of Lading clearly disclosed the contents of the
containers, the number of units, as well as the nature of the steel
sheets, the four damaged coils should be considered as the shipping
unit subject to the US$500 limitation.1wphi1.nt
WHEREFORE, the Petition is partly granted and the assailed
Decision MODIFIED. Petitioners' liability is reduced to US$2,000 plus
interest at the legal rate of six percent from the time of the filing of the
Complaint on July 25, 1991 until the finality of this Decision, and 12
percent thereafter until fully paid. No pronouncement as to costs.
SO ORDERED.

Ganzon sent his lighter "Batman" to Mariveles where

it docked in three feet of water (t.s.n., September 28,
1972, p. 31). On December 1, 1956, Gelacio
Tumambing delivered the scrap iron to defendant
Filomeno Niza, captain of the lighter, for loading which
was actually begun on the same date by the crew of
the lighter under the captain's supervision. When
about half of the scrap iron was already loaded (t.s.n.,
December 14, 1972, p. 20), Mayor Jose Advincula of
Mariveles, Bataan, arrived and demanded P5,000.00
from Gelacio Tumambing. The latter resisted the
shakedown and after a heated argument between
them, Mayor Jose Advincula drew his gun and fired at
Gelacio Tumambing (t.s.n., March 19, 1971, p. 9;
September 28, 1972, pp. 6-7). The gunshot was not
fatal but Tumambing had to be taken to a hospital in
Balanga, Bataan, for treatment (t.s.n., March 19,
1971, p. 13; September 28, 1972, p. 15).
<re||an1w>

Quijano, Arroyo & Padilla Law Office for respondents.

SARMIENTO, J.:
The private respondent instituted in the Court of First
Instance of Manila 1 an action against the petitioner
for damages based on culpa contractual. The
antecedent facts, as found by the respondent
Court, 2 are undisputed:
On November 28, 1956, Gelacio Tumambing
contracted the services of Mauro B. Ganzon to haul
305 tons of scrap iron from Mariveles, Bataan, to the
port of Manila on board the lighter LCT "Batman"
(Exhibit 1, Stipulation of Facts, Amended Record on
Appeal, p. 38). Pursuant to that agreement, Mauro B.

After sometime, the loading of the scrap iron was

resumed. But on December 4, 1956, Acting Mayor
Basilio Rub, accompanied by three policemen,
ordered captain Filomeno Niza and his crew to dump
the scrap iron (t.s.n., June 16, 1972, pp. 8-9) where
the lighter was docked (t.s.n., September 28, 1972, p.
31). The rest was brought to the compound of
NASSCO (Record on Appeal, pp. 20-22). Later on
Acting Mayor Rub issued a receipt stating that the
Municipality of Mariveles had taken custody of the
scrap iron (Stipulation of Facts, Record on Appeal, p.
40; t.s.n., September 28, 1972, p. 10.)

On the basis of the above findings, the respondent

Court rendered a decision, the dispositive portion of
which states:
WHEREFORE, the decision appealed
from is hereby reversed and set aside
and a new one entered ordering
defendant-appellee Mauro Ganzon to
pay plaintiff-appellant Gelacio E.
Tumambimg the sum of P5,895.00 as
actual damages, the sum of P5,000.00
as exemplary damages, and the amount
of P2,000.00 as attorney's fees. Costs
against defendant-appellee Ganzon. 3

In this petition for review on certiorari, the alleged

errors in the decision of the Court of Appeals are:
I
THE COURT OF APPEALS FINDING THE HEREIN
PETITIONER GUILTY OF BREACH OF THE
CONTRACT OF TRANSPORTATION AND IN
IMPOSING A LIABILITY AGAINST HIM
COMMENCING FROM THE TIME THE SCRAP WAS
PLACED IN HIS CUSTODY AND CONTROL HAVE
NO BASIS IN FACT AND IN LAW.
II
THE APPELLATE COURT ERRED IN CONDEMNING
THE PETITIONER FOR THE ACTS OF HIS
EMPLOYEES IN DUMPING THE SCRAP INTO THE
SEA DESPITE THAT IT WAS ORDERED BY THE
LOCAL GOVERNMENT OFFICIAL WITHOUT HIS
PARTICIPATION.
III
THE APPELLATE COURT FAILED TO CONSIDER
THAT THE LOSS OF THE SCRAP WAS DUE TO A
FORTUITOUS EVENT AND THE PETITIONER IS
THEREFORE NOT LIABLE FOR LOSSES AS A
CONSEQUENCE THEREOF. 4
The petitioner, in his first assignment of error, insists
that the scrap iron had not been unconditionally
placed under his custody and control to make him
liable. However, he completely agrees with the
respondent Court's finding that on December 1, 1956,
the private respondent delivered the scraps to
Captain Filomeno Niza for loading in the lighter

"Batman," That the petitioner, thru his employees,

actually received the scraps is freely admitted.
Significantly, there is not the slightest allegation or
showing of any condition, qualification, or restriction
accompanying the delivery by the private respondentshipper of the scraps, or the receipt of the same by
the petitioner. On the contrary, soon after the scraps
were delivered to, and received by the petitionercommon carrier, loading was commenced.
By the said act of delivery, the scraps were
unconditionally placed in the possession and control
of the common carrier, and upon their receipt by the
carrier for transportation, the contract of carriage was
deemed perfected. Consequently, the petitionercarrier's extraordinary responsibility for the loss,
destruction or deterioration of the goods commenced.
Pursuant to Art. 1736, such extraordinary
responsibility would cease only upon the delivery,
actual or constructive, by the carrier to the consignee,
or to the person who has a right to receive
them. 5 The fact that part of the shipment had not
been loaded on board the lighter did not impair the
said contract of transportation as the goods remained
in the custody and control of the carrier, albeit still
unloaded.
The petitioner has failed to show that the loss of the
scraps was due to any of the following causes
enumerated in Article 1734 of the Civil Code, namely:
(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;
(5) Order or act of competent public authority.
Hence, the petitioner is presumed to have been at
fault or to have acted negligently. 6 By reason of this
presumption, the court is not even required to make
an express finding of fault or negligence before it
could hold the petitioner answerable for the breach of
the contract of carriage. Still, the petitioner could have

been exempted from any liability had he been able to

prove that he observed extraordinary diligence in the
vigilance over the goods in his custody, according to
all the circumstances of the case, or that the loss was
due to an unforeseen event or to force majeure. As it
was, there was hardly any attempt on the part of the
petitioner to prove that he exercised such
extraordinary diligence.
It is in the second and third assignments of error
where the petitioner maintains that he is exempt from
any liability because the loss of the scraps was due
mainly to the intervention of the municipal officials of
Mariveles which constitutes a caso fortuito as defined
in Article 1174 of the Civil Code. 7
We cannot sustain the theory of caso fortuito. In the
courts below, the petitioner's defense was that the
loss of the scraps was due to an "order or act of
competent public authority," and this contention was
correctly passed upon by the Court of Appeals which
ruled that:
... In the second place, before the
appellee Ganzon could be absolved
from responsibility on the ground that
he was ordered by competent public
authority to unload the scrap iron, it
must be shown that Acting Mayor
Basilio Rub had the power to issue the
disputed order, or that it was lawful, or
that it was issued under legal process
of authority. The appellee failed to
establish this. Indeed, no authority or
power of the acting mayor to issue
such an order was given in evidence.
Neither has it been shown that the
cargo of scrap iron belonged to the
Municipality of Mariveles. What we
have in the record is the stipulation of
the parties that the cargo of scrap iron
was accilmillated by the appellant
through separate purchases here and
there from private individuals (Record
on Appeal, pp. 38-39). The fact
remains that the order given by the
acting mayor to dump the scrap iron
into the sea was part of the pressure
applied by Mayor Jose Advincula to
shakedown the appellant for
P5,000.00. The order of the acting

mayor did not constitute valid authority

for appellee Mauro Ganzon and his
representatives to carry out.
Now the petitioner is changing his theory to caso
fortuito. Such a change of theory on appeal we
cannot, however, allow. In any case, the intervention
of the municipal officials was not In any case, of a
character that would render impossible the fulfillment
by the carrier of its obligation. The petitioner was not
duty bound to obey the illegal order to dump into the
sea the scrap iron. Moreover, there is absence of
sufficient proof that the issuance of the same order
was attended with such force or intimidation as to
completely overpower the will of the petitioner's
employees. The mere difficulty in the fullfilment of the
obligation is not considered force majeure. We agree
with the private respondent that the scraps could have
been properly unloaded at the shore or at the
NASSCO compound, so that after the dispute with the
local officials concerned was settled, the scraps could
then be delivered in accordance with the contract of
carriage.
There is no incompatibility between the Civil Code
provisions on common carriers and Articles 361 8 and
362 9 of the Code of Commerce which were the basis
for this Court's ruling in Government of the Philippine
Islands vs. Ynchausti & Co.10 and which the
petitioner invokes in tills petition. For Art. 1735 of the
Civil Code, conversely stated, means that the shipper
will suffer the losses and deterioration arising from the
causes enumerated in Art. 1734; and in these
instances, the burden of proving that damages were
caused by the fault or negligence of the carrier rests
upon him. However, the carrier must first establish
that the loss or deterioration was occasioned by one
of the excepted causes or was due to an unforeseen
event or to force majeure. Be that as it may, insofar as
Art. 362 appears to require of the carrier only ordinary
diligence, the same is .deemed to have been modified
by Art. 1733 of the Civil Code.
Finding the award of actual and exemplary damages
to be proper, the same will not be disturbed by us.
Besides, these were not sufficiently controverted by
the petitioner.
WHEREFORE, the petition is DENIED; the assailed
decision of the Court of Appeals is hereby
AFFIRMED. Costs against the petitioner.

This decision is IMMEDIATELY EXECUTORY.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-10195 December 29, 1916
YU CON, plaintiff-appellee,
vs.
GLICERIO IPIL, NARCISO LAURON, and JUSTO
SOLAMO, defendants-appellants.
Felix Sevilla y Macam for appellants.
Juan Singson and Dionisio Jakosalem for appellee.

ARAULLO, J.:
The purpose of the action brought in these proceedings is to enable
the plaintiff to recover from the defendants jointly and severally the
sum of P450, which had been delivered by the plaintiff to the first and
third of the above-named defendants, master and supercargo,
respectively, of a banca named Maria belonging to the second
defendant, to be carried, together with various merchandise belonging
to the plaintiff, from the port of Cebu to the town of Catmon of the
Province of Cebu. By virtue of the contract executed between the said
second defendant and the plaintiff, the money and merchandise were
to be transported by the said craft between the points above-named in
consideration of the payment of a certain sum for each voyage. The
money disappeared from said craft during the night of October 18,
1911, while it was anchored in the port of Cebu and ready to sail for its
destination, Catmon, and was not afterwards found. The plaintiff based
his action on the charge that the disappearance of said sum was due
to the abandonment, negligence, or voluntary breach, on the part of
the defendants, of the duty they had in respect to the safe-keeping of
the aforementioned sum.
The defendants, besides denying the allegations of the complaint,
pleaded in special defense that the plaintiff, at his own expense and
under his exclusive responsibility, chartered the said banca, the
property of the defendant Lauron, for the fixed period of three days, at
the price of P10 per diem, and that, through the misfortune,
negligence, or abandonment of the plaintiff himself, the loss
complained of occurred, while said banca was at anchor in the port of
Cebu, and was caused by theft committed by unknown thieves. They
further alleged that said defendant Lauron, the owner of
the banca merely placed this craft at the disposal of the plaintiff for the
price and period agreed upon, and did not go with the banca on its
voyage from Catmon to Cebu. As a counterclaim, the defendants also
asked that the plaintiff be ordered to pay the freight agreed upon,
which had not yet been paid, amounting to P80, plus the sum of P70,
as an indemnity for the losses and damages caused them by the
attachment of the banca, issued at the instance of the plaintiff upon
filing his complaint. They also prayed for the additional sum of P100,
for the deterioration of the said banca, and also that of P200 for other
deterioration suffered by the same since November, 1911, and which
had not bee paid for. Finally, the defendants asked to be absolved from
the complaint.

Before commencing the hearing of this case, the defendants made a

verbal motion asking that the plaintiff be declared in default, with
respect to the counterclaim filed by them in their answer. On the same
date, the plaintiff presented his answer to said counter claim, denying
each and all of the allegations thereof and of the defendants' special
defense. The aforementioned motion was overruled by the court, and
the defendants excepted.
At the termination of the trial, the court, in view of the evidence
adduced, held that there was no room to doubt that the sole cause of
the disappearance of the money from the said banca was the
negligence of the master and the supercargo, the defendants Ipil and
Solamo, respectively, and that the defendant Narciso Lauron was
responsible for that negligence, as owner of the banca, pursuant to
articles 589, 587, and 618 of the Code of Commerce, the plaintiff
therefore being entitled to recover the amount lost. Judgment was
rendered on April 20, 1914, in favor of the plaintiff and against the
defendants jointly and severally for the sum of P450, with interest
thereon at the rage of 6 per cent per annum from the date of filing of
the complaint, October 24, 1911, with costs. The plaintiff was absolved
from the defendant's counterclaim. From this judgment the defendants
excepted and at the same time moved for a new trial. Their motion was
denied, to which ruling they also excepted, and, through the proper bill
of exceptions, entered and appeal to this Supreme Court. In their brief
they allege that the trial court erred:
1. In applying articles 586, 587, and 618 of the Code of
Commerce in favor of the plaintiff;
2. In overruling the motion for default presented by the
defendants and in sentencing the defendants jointly and
severally to pay the plaintiff the amount mentioned in the
judgment; and
3. In absolving the plaintiff from the defendant's
counterclaim.
The evidence shows that the plaintiff Yu Con, a merchant and a
resident of the town of San Nicolas, of the city of Cebu, engaged in the
sale of cloth and domestic articles and having a share in a shop, or
small store, situated in the town of Catmon, of said province, had
several times chartered from the defendant Narciso Lauron,
a bancanamed Maria belonging to the latter, of which Glicerio Ipil was
master and Justo Solamo, supercargo, for the transportation of certain
merchandise and some money to and from the said town and the port
of Cebu, that, on or about the 17th of October, 1911, the plaintiff
chartered the said banca from the defendant Lauron for the
transportation of various merchandise from the port of Cebu to
Catmon, at the price of P45 for the round trip, which merchandise was
loaded on board the said craft which was then at anchor in front of one
of the graded fills of the wharf of said port; that in the afternoon of the
following day, he delivered to the other two defendants, Ipil, and
Solamo, master and supercargo, respectively, of the aforenamed banca, the sum of P450, which was in a trunk belonging to the
plaintiff and was taken charge of by said two defendants, who received
this money from the plaintiff, for the purpose of its delivery to the
latter's shop in Catmon for the purchase of corn in this town; that while
the money was still in said truck abroad the vessel, on the night of the
said 18th of October, the time scheduled for the departure of
the Maria from the port of Cebu, said master and said supercargo
transferred the P450 from the plaintiff's trunk, where it was, to theirs,
which was in a stateroom of the banca, from which stateroom both the
trunk and the money disappeared during that same night, and that the

investigations, made to ascertain their whereabouts, produced no

result.
The facts are also admitted by the aforementioned master and
supercargo, two of the defendants, that they received from the plaintiff
said P450, which sum was in the latter's own trunk which was placed
outside the stateroom of the banca, for the reason, as they said, that
there was no room for it inside the stateroom; that these defendants
therefore transferred said money to their trunk, which was inside the
stateroom, and that this trunk and the P450 therein contained
disappeared from the boat during the night of that same day; that said
sum had not been found or returned to the plaintiff; that the plaintiff,
being on the banca in the afternoon of that day, when his trunk
containing the P450 was carried aboard, and seeing that said two
defendants, who had the key of the trunk, has removed said sum to
their trunk inside the stateroom, charged them to take special care of
the money; that the master Ipil assured the plaintiff that there was no
danger of the money being lost; and that, final, during the night in
question, both the master and the supercargo and four cabin-boys
were aboard the banca.
It was likewise proven by the affidavits made by the master Ipil, the
supercargo Solamo, and the cabin-boys of said vessel, Juan Quiamco
and Gabriel Basang, before the provincial fiscal of Cebu on the day
following the commission of the theft, which affidavits were presented
at the trial as Exhibits A, 3, 4, and 5, and by the testimony given at the
trial by the defendants Ipil and Solamo, that both said cabin-boys and
the other two, Simeon Solamo, and said cabin-boys ad the other two,
Simeon Solamo, and Eulalio Quiamco, knew of the existence of the
money in the trunk inside the stateroom and witnessed its removal to
said trunk from the plaintiff's; that the last two cabin- boys abovenamed, in company with the master and the supercargo, conveyed the
plaintiff's trunk, in which the money was previously contained, from the
plaintiff's shop to the banca; and that no person not belonging to the
vessel knew that the money was in the trunk inside said stateroom.
According to the testimony of the master Ipil himself he slept outside
the stateroom that night, but a cabin-boy named Gabriel slept inside.
The latter, however, was not presented by the defendants to be
examined in regard to this point, nor does it appear that he testified in
respect thereto in his affidavit, Exhibit 5, before referred to, presented
by the defendant's own counsel. The master Ipil and the supercargo
Solamo also testified that they left the cabin-boy Simeon Solamo on
guard that night; but this affirmation was not corroborated by Solamo at
the trial, for he was not introduced as a witness, and only his affidavit,
Exhibit 2, taken before the fiscal of Cebu on the day following the
commission of the crime, was presented by the defendants. This
affidavit, which should have been admitted and not rejected, as was
done by the court and excepted to by the defendants, shows that
Simeon Solamo stated that he was not designated to do guard duty
that night, but that on the morning of the said 19th of October, that is,
the next day, all agreed that affiant should say that he was on guard,
though it was not true that he was.
Finally, said two defendants, the master and the supercargo, gave no
satisfactory explanation in regard to the disappearance of the trunk
and the money therein contained, from the stateroom in which the
trunk was, nor as to who stole or might have stolen it. The master of
the banca merely testified that they, he and the supercargo, did to
know who the robbers were, for, when the robbery was committed,
they were sound asleep, as they were tired, and that he believed that
the guard Simeon also fell asleep because he, too, was tired. The
second defendant gave the same testimony. Both of them testified that
the small window of the stateroom had been broken, and the first of
them, i.e., the master, stated that all the window-blinds had been
removed from the windows, as well as part of the partition in which
they were, and that the trunk in which the money was contained could

have been passed through said small window, because, as this

witness himself had verified, the Chinaman's trunk, which differed but a
little from the one stolen, could be passed through the same opening.
The chief pilot of the harbor of Cebu, Placido Sepeda, who officially
visited the said banca, also stated that the small wooden window of the
stateroom was broken, and that he believed that in breaking it much
noise must have been produced. However, no evidence whatever was
offered by counsel for the defendants to prove that it might have been
possible to remove the trunk from the stateroom through the opening
made by the breaking of the small window, neither was the size of the
trunk proven, in relation to the Chinaman's to which the defendant
master referred in his testimony, so that it might be verified whether the
statement made by the latter was true, viz., that it might have been
possible to remove from the stateroom through said opening the trunk
in which the P450 were contained, which sum, the same as the trunk,
its container, had not been found, in spite of the investigation made for
the purpose. Furthermore, it was not proven, nor is there any
circumstantial evidence to show, that the robbery in question was
committed by persons not belonging to the craft.
It is therefore beyond all doubt that the loss or disappearance, on the
night aforementioned, of the P450, the property of the plaintiff, which,
were in the possession of the defendants, the master and the
supercargo of thebanca Maria, occurred through the manifest fault and
negligence of said defendants, for, not only did they fail to take the
necessary precautions in order that the stateroom containing the trunk
in which they kept the money should be properly guarded by members
of the crew and put in such condition that it would be impossible to
steal the trunk from it or that persons not belonging to the vessel might
force an entrance into the stateroom from the outside, but also they did
not expressly station some person inside the stateroom for the
guarding and safe-keeping of the trunk, for it was not proven that the
cabin-boy Gabriel slept there, as the master of the vessel, Ipil, stated,
nor that the other Cabin-boy, Simeon Solamo, was on guard that night,
for the latter contradicted the statements made by the two defendants
on this point. On the contrary, it was proven by the master's own
statement that all the people of the vessel, including himself and the
supercargo Solamo, slept soundly that night; which fact cannot, in any
manner, serve them as an excuse, nor can it be accepted as an
explanation of the statement that they were not aware of what was
then occuring on board, if the trunk was actually stolen by outsiders
and removed through the small window of the stateroom, a detail
which also was not proven, but, on the contrary, increases their liability,
because it is very strange that none of them, who were six and were
around or near the stateroom, should have heard the noise which the
robbers must have made in breaking its window. All of these
circumstances, together with that of its having been impossible to know
who took the trunk and the money and the failure to recover the one or
the other make the conduct of the two defendants and of the other
members of the crew of banca, eminently supicious and prevent our
holding that the disappearance or loss of the money was due to a
fortuitous event, to force majeure, or that it was an occurrence which
could not have been foreseen, or which, if foreseen, was inevitable.
It is unquestionable that the defendants Glicerio Ipil and Justo Solamo
were the carriers of the said P450 belonging to the plaintiff, and that
they received this sum from the latter for the purpose of delivering it to
the store of the town of Catmon, to which it had been consigned.
Under such circumstances, said defendants were the depositaries of
the money.lawphi1.net
Manresa, in his Commentaries on the Civil Code (Vol. 10, p. 773), in
treating of the provisions of the said code concerning transportation by
sea and by land of both persons and things, says:
Liability of carriers. In order that a thing may be
transported, it must be delivered to the carrier, as the Code

says. From the time it is delivered to the carrier or shipper

until it is received by the consignee, the carrier has it in his
possession, as a necessary condition for its transportation,
and is obliged to preserve and guard it; wherefore it is but
natural and logical that he should be responsible for it.
The Code discovers in the relation of all these elements the
factors which go to make up the conception of a trust, and,
taking into account that the delivery of the thing on the part
of the shipper is unavoidable, if the transportation is to take
place, esteem that, at least in certain respects, such trusts
are necessary.
The said two defendants being the depositaries of the sum in question,
and they having failed to exercise for its safe-keeping the diligence
required by the nature of the obligation assumed by them and by the
circumstances of the time and the place, it is evident that, in pursuance
of the provisions of articles 1601 and 1602, in their relation to articles
1783 and 1784, and as prescribed in articles 1770, of the Civil Code,
they are liable for its loss or misplacement and must restore it to the
plaintiff, together with the corresponding interest thereon as an
indemnity for the losses and damages caused him through the loss of
the said sum.
With respect to the other defendant, Narciso Lauron, as he was the
owner of the vessel in which the loss or misplacement of the P450
occurred, of which vessel, as aforestated, Glicerio Ipil was master and
Justo Solamo, supercargo, both of whom were appointed to, or chosen
for, the positions they held, by the defendant himself, and, as the
aforementioned sum was delivered to the said master, Ipil, and the
merchandise to be transported by means of said vessel from the port
of Cebu to the town of Catmon was laden by virtue of a contract
executed by and between the plaintiff and the owner of the vessel,
Narciso Lauron, it behooves us to examine whether the latter, also,
should be held to be liable, as requested by the plaintiff in his
complaint.
Said vessel was engaged in the transportation of merchandise by sea
and made voyages to and from the port of Cebu to Catmon, and had
been equipped and victualed for this purpose by its owner, Narciso
Lauron, with whom, as aforesaid, the plaintiff contracted for the
transportation of the merchandise which was to be carried, on the date
hereinabove mentioned, from the port of Cebu to the town of Catmon.
For legal purposes, that is, for the determination of the nature and
effect of the relations created between the plaintiff, as owner of the
merchandise laden on said craft and of the money that was delivered
to the master, Ipil, and the defendant Lauron, as owner of the craft, the
latter was a vessel, according to the meaning and construction given to
the word vessel in the Mercantile Code, in treating of maritime
commerce, under Title 1,
Book 3.
The word vessel serves to designate every kind of craft by
whatever particular or technical name it may now be known
or which nautical advancements may give it in the future.
(Commentaries on the Code of Commerce, in the General
Review of Legislation and Jurisprudence, founded by D.
Jose Reus y Garcia, Vol., 2 p. 136.)
According to the Dictionary of Legislation and Jurisprudence by
Escriche, a vessel is any kind of craft, considering solely the hull.
Blanco, the commentator on mercantile law, in referring to the
grammatical meaning of the word "ship" and "vessels," says, in his

work aforecited, that these terms designate every kind of craft, large or
small, whether belonging to the merchant marine or to the navy. And
referring to their juridical meaning, he adds: "This does not differ
essentially from the grammatical meaning; the words "ship" and
"vessel" also designate every craft, large or small, so long as it be not
an accessory of another, such as the small boat of a vessel, of greater
or less tonnage. This definition comprises both the craft intended for
ocean or for coastwise navigation, as well as the floating docks, mud
lighters, dredges, dumpscows or any other floating apparatus used in
the service of an industry or in that of maritime commerce. . . ." (Vol. 1,
p. 389.)
According to the foregoing definitions, then, we should that
the banca called Maria, chartered by the plaintiff Yu Con from the
defendant Narciso Lauron, was a "vessel", pursuant to the meaning
this word has in mercantile law, that is, in accordance with the
provisions of the Code of Commerce in force.
Glicerio Ipil, the master of the said banca Maria, must also be
considered as its captain, in the legal acceptation of this word.
The same Code of Commerce in force in these Islands compares, in its
article 609, masters with captains. It is to be noted that in the Code of
Commerce of Spain the denomination of arraeces is not included in
said article as equivalent to that of masters, as it is in the Code of
these Islands.
Commenting on said article, the aforementioned General Review of
Legislation and Jurisprudence says:
The name of captain or master is given, according to the
kind of vessel, to the person in charge of it.
The first denomination is applied to those who govern
vessels that navigate the high seas or ships of large
dimensions and importance, although they be engaged in
the coastwise trade.
Masters are those who command smaller ships engaged
exclusively in the coastwise trade.
For the purposes of maritime commerce, the words "captain"
and "master" have the same meaning; both being the chiefs
or commanders of ships. (Vol. 2, p. 168.)
Article 587 of the Code of Commerce in force provides:
The agent shall be civilly liable for the indemnities in favor of
third persons which arise from the conduct of the captain in
the care of the goods which the vessel carried; but he may
exempt himself therefrom by abandoning the vessel with all
her equipments and the freight he may have earned during
the trip.
Article 618 of the same Code also prescribes:
The captain shall be civilly liable to the agent and the latter
to the third persons who may have made contracts with the
former
1. For all the damages suffered by the vessel and its cargo
by reason of want of skill or negligence on his part, If a
misdemeanor or crime has been committed he shall be liable
in accordance with the Penal Code.

2. For all the thefts committed by the crew, reserving his right
of action against the guilty parties.
The Code of Commerce previous to the one now in force, to wit, that of
1829, in its article 624, provided that the agent or shipowner should not
be liable for any excesses which, during the navigation, might be
committed by the captain and crew, and that, for the reason of such
excesses, it was only proper to bring action against the persons and
property of those found guilty.
Estasen, in his work on the Institutes of Mercantile Law (Vol. 4, p. 280),
makes the following remarks, in referring to the exposition of reasons
presented by the Code Commission which prepared and presented for
approval the Code of Commerce now in force, in which exposition of
reasons were set forth the fundamental differences between the
provisions contained in both codes, with respect to the subject-matter
now under discussion. He says:
Another very important innovation introduced by the Code is
that relative to the liability for misdemeanors and crimes
committed by the captain or by members of the crew. This is
a matter of the greatest importance on which a variety of
opinions has been expressed by different juris-consults.
The old code declares the captain civilly liable for all damage
sustained by the vessel or its cargo through lack of skill or
care on his part, through violations of the law, or through
unlawful acts committed by the crew. As regards the agent or
shipowners, it declares in unmistakeable terms that he shall
in no wise be liable for any excesses which, during the
navigation, may be committed by the captain and the crew.
Upon an examination, in the light of the principles of modern
law, of the standing legal doctrine on the non-liability of the
shipowner for the unlawful acts, that is, the crimes or quasi
crimes, committed by the captain and the crew, it is
observed that it cannot be maintained in the absolute and
categorical terms in which it is formulated.
It is well and good that the shipowner be not held criminally
liable for such crimes or quasi crimes; but the cannot be
excused from liability for the damage and harm which, in
consequence of those acts, may be suffered by the third
parties who contracted with the captain, in his double
capacity of agent and subordinate of the shipowner himself.
In maritime commerce, the shippers and passengers in
making contracts with the captain do so through the
confidence they have in the shipowner who appointed him;
they presume that the owner made a most careful
investigation before appointing him, and, above all, they
themselves are unable to make such an investigation, and
even though they should do so, they could not obtain
complete security, inasmuch as the shipowner can,
whenever he sees fir, appoint another captain instead.
The shipowner is in the same case with respect to the
members of the crew, for, though he does not appoint
directly, yet, expressly or tacitly, he contributes to their
appointment.
On the other hand, if the shipowner derives profits from the
results of the choice of the captain and the crew, when the

choice turns out successful, it is also just that he should

suffer the consequences of an unsuccessful appointment, by
application of the rule of natural law contained in the
Partidas, viz., that he who enjoys the benefits derived from a
thing must likewise suffer the losses that ensue therefrom.
Moreover, the Penal Code contains a general principle that
resolves the question under consideration, for it declares
that such persons as undertake and carry on any iondustry
shall be civilly liable, in default of those who may be
criminally liable, for the misdemeanors and crimes
committed by their subordinates in the discharge of their
duties.
The Code of Commerce in force omits the declaration of
non-liability contained in the old code, and clearly makes the
shipowner liable civilly for the loss suffered by those who
contracted with the captain, in consequence of the
misdemeanors and crimes committed by the latter or by the
members of the crew.
It is therefore evident that, in accordance with the provisions of the
Code of Commerce in force, which are applicable to the instance case,
the defendant Narciso Lauron, as the proprietor and owner of the craft
of which Glicerio Ipil was the master and in which, through the fault
and negligence of the latter and of the supercago Justo Solamo, there
occurred the loss, theft, or robbery of the P450 that belonged to the
plaintiff and were delivered to said master and supercargo, a theft
which, on the other hand, as shown by the evidence, does not appear
to have been committed by a person not belonging to the craft, should,
for said loss or theft, be held civilly liable to the plaintiff, who executed
with said defendant Lauron the contract for the transportation of the
merchandise and money aforementioned between the port of Cebu
and the town of Catmon, by means of the said craft.
Therefore, the trial court did not err in so holding in the judgement
appealed from.
The plaintiff having filed his answer to the cross-complaint as soon as
the defendant presented their motion for] a declaration of the plaintiff's
default in connection with said cross-complaint, and it being optional
with the court to make in such cases the declaration of default, as
provided in section 129 of the Code of Civil Procedure, the said court
did not incur the second error assigned by the appellants in their brief.
Lastly, as the banca Maria did not make the trip she should have made
from the port of Cebu to the town of Catmon, on the occasion in
question, through cases chargeable, as has been seen, to the captain
and the supercargo of said banca, to wit, because of the loss, theft of
robbery of the P450 belonging to the plaintiff, and as a contract was
made for the transportation of the said sum and the merchandise from
one of said points to the other, for the round trip, and not through
payment by the plaintiff of the wages due the crew for each day, as
alleged by the defendants, for the proofs presented by the latter in
regard to this point were insufficient, as the trial court so held, neither
did the latter incur error in overruling the cross-complaint formulated by
the defendants in their answer against the plaintiff.
Therefore, and for all the reasons above set forth, we affirm the
judgment appealed from, with the costs of this instance against the
appellants. So ordered.

Republic of the Philippines

SUPREME COURT
Manila

defendants were not parties to the incident complained of as it was an

act of a third party who is not in any way connected with the
defendants and of which the latter have no control and supervision; ..."
(Rollo, pp. 112-113).itc-asl

THIRD DIVISION
After due trial, the trial court issued an order dated August 8, 1985
dismissing the complaint.
G.R. No. 85691 July 31, 1990
BACHELOR EXPRESS, INCORPORATED, and CRESENCIO
RIVERA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (Sixth Division),
RICARDO BETER, SERGIA BETER, TEOFILO RAUTRAUT and
ZOETERA RAUTRAUT, respondents.
Aquino W. Gambe for petitioners.
Tranquilino O. Calo, Jr. for private respondents.

GUTIERREZ, JR., J.:

This is a petition for review of the decision of the Court of Appeals
which reversed and set aside the order of the Regional Trial Court,
Branch I, Butuan City dismissing the private respondents' complaint for
collection of "a sum of money" and finding the petitioners solidarily
liable for damages in the total amount of One Hundred Twenty
Thousand Pesos (P120,000.00). The petitioners also question the
appellate court's resolution denying a motion for reconsideration.
On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and
driven by Cresencio Rivera was the situs of a stampede which resulted
in the death of passengers Ornominio Beter and Narcisa Rautraut.
The evidence shows that the bus came from Davao City on its way to
Cagayan de Oro City passing Butuan City; that while at Tabon-Tabon,
Butuan City, the bus picked up a passenger; that about fifteen (15)
minutes later, a passenger at the rear portion suddenly stabbed a PC
soldier which caused commotion and panic among the passengers;
that when the bus stopped, passengers Ornominio Beter and Narcisa
Rautraut were found lying down the road, the former already dead as a
result of head injuries and the latter also suffering from severe injuries
which caused her death later. The passenger assailant alighted from
the bus and ran toward the bushes but was killed by the police.
Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private
respondents herein (Ricardo Beter and Sergia Beter are the parents of
Ornominio while Teofilo Rautraut and Zoetera [should be Zotera]
Rautraut are the parents of Narcisa) filed a complaint for "sum of
money" against Bachelor Express, Inc. its alleged owner Samson
Yasay and the driver Rivera.
In their answer, the petitioners denied liability for the death of
Ornominio Beter and Narcisa Rautraut. They alleged that ... the driver
was able to transport his passengers safely to their respective places
of destination except Ornominio Beter and Narcisa Rautraut who
jumped off the bus without the knowledge and consent, much less, the
fault of the driver and conductor and the defendants in this case; the
defendant corporation had exercised due diligence in the choice of its
employees to avoid as much as possible accidents; the incident on
August 1, 1980 was not a traffic accident or vehicular accident; it was
an incident or event very much beyond the control of the defendants;

Upon appeal however, the trial court's decision was reversed and set
aside. The dispositive portion of the decision of the Court of Appeals
states:
WHEREFORE, the Decision appealed from is
REVERSED and SET ASIDE and a new one
entered finding the appellees jointly and solidarily
liable to pay the plaintiffs-appellants the following
amounts:
1) To the heirs of Ornominio Beter, the amount of
Seventy Five Thousand Pesos (P75,000.00) in
loss of earnings and support, moral damages,
straight death indemnity and attorney's fees; and,
2) To the heirs of Narcisa Rautraut, the amount of
Forty Five Thousand Pesos (P45,000.00) for
straight death indemnity, moral damages and
attorney's fees. Costs against appellees. (Rollo,
pp. 71-72)
The petitioners now pose the following questions
What was the proximate cause of the whole
incident? Why were the passengers on board the
bus panicked (sic) and why were they shoving one
another? Why did Narcisa Rautraut and Ornominio
Beter jump off from the running bus?
The petitioners opine that answers to these questions are material to
arrive at "a fair, just and equitable judgment." (Rollo, p. 5) They claim
that the assailed decision is based on a misapprehension of facts and
its conclusion is grounded on speculation, surmises or conjectures.
As regards the proximate cause of the death of Ornominio Beter and
Narcisa Rautraut, the petitioners maintain that it was the act of the
passenger who ran amuck and stabbed another passenger of the bus.
They contend that the stabbing incident triggered off the commotion
and panic among the passengers who pushed one another and
that presumably out of fear and moved by that human instinct of selfpreservation Beter and Rautraut jumped off the bus while the bus was
still running resulting in their untimely death." (Rollo, p. 6) Under these
circumstances, the petitioners asseverate that they were not negligent
in the performance of their duties and that the incident was completely
and absolutely attributable to a third person, the passenger who ran
amuck, for without his criminal act, Beter and Rautraut could not have
been subjected to fear and shock which compelled them to jump off
the running bus. They argue that they should not be made liable for
damages arising from acts of third persons over whom they have no
control or supervision.
Furthermore, the petitioners maintain that the driver of the bus, before,
during and after the incident was driving cautiously giving due regard
to traffic rules, laws and regulations. The petitioners also argue that
they are not insurers of their passengers as ruled by the trial court.

The liability, if any, of the petitioners is anchored on culpa

contractual or breach of contract of carriage. The applicable provisions
of law under the New Civil Code are as follows:
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.
ART. 1733. Common carriers, from the nature of
their business and for reasons of public policy, are
bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the
passengers transported by them, according to all
the circumstances of each case.
xxx xxx xxx
ART. 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.
ART. 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.
There is no question that Bachelor Express, Inc. is a common carrier.
Hence, from the nature of its business and for reasons of public policy
Bachelor Express, Inc. is bound to carry its 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.
In the case at bar, Ornominio Beter and Narcisa Rautraut were
passengers of a bus belonging to petitioner Bachelor Express, Inc.
and, while passengers of the bus, suffered injuries which caused their
death. Consequently, pursuant to Article 1756 of the Civil Code,
petitioner Bachelor Express, Inc. is presumed to have acted negligently
unless it can prove that it had observed extraordinary diligence in
accordance with Articles 1733 and 1755 of the New Civil Code.
Bachelor Express, Inc. denies liability for the death of Beter and
Rautraut on its posture that the death of the said passengers was
caused by a third person who was beyond its control and supervision.
In effect, the petitioner, in order to overcome the presumption of fault or
negligence under the law, states that the vehicular incident resulting in
the death of passengers Beter and Rautraut was caused by force
majeure or caso fortuito over which the common carrier did not have
any control.
Article 1174 of the present Civil Code states:
Except in cases expressly specified by law, or
when it is otherwise declared by stipulations, or
when the nature of the obligation requires the
assumption of risk, no person shall be responsible
for those events which could not be foreseen, or
which though foreseen, were inevitable.

The above-mentioned provision was substantially copied from Article

1105 of the old Civil Code which states"
No one shall be liable for events which could not
be foreseen or which, even if foreseen, were
inevitable, with the exception of the cases in which
the law expressly provides otherwise and those in
which the obligation itself imposes liability.
In the case of Lasam v. Smith (45 Phil. 657 [1924]), we defined
"events" which cannot be foreseen and which, having been foreseen,
are inevitable in the following manner:
... The Spanish authorities regard the language
employed as an effort to define the term 'caso
fortuito' and hold that the two expressions are
synonymous. (Manresa Comentarios al Codigo
Civil Espaol, vol. 8, pp. 88 et seq.; Scaevola,
Codigo Civil, vol. 19, pp. 526 et seq.)
The antecedent to Article 1105 is found in Law II,
Title 33, Partida 7, which defines caso fortuito as
'occasion que acaese por aventura de que non se
puede ante ver. E son estos, derrivamientos de
casas e fuego que enciende a so ora, e
quebrantamiento de navio, fuerca de ladrones' (An
event that takes place by incident and could not
have been foreseen. Examples of this are
destruction of houses, unexpected fire, shipwreck,
violence of robbers ...)
Escriche defines caso fortuito as an unexpected
event or act of God which could neither be
foreseen nor resisted, such as floods, torrents,
shipwrecks, conflagrations, lightning, compulsion,
insurrections, destruction of buildings by
unforeseen accidents and other occurrences of a
similar nature.
In discussing and analyzing the term caso fortuito
the Enciclopedia Juridica Espaola says: 'In a
legal sense and, consequently, also in relation to
contracts, a caso fortuito presents the following
essential characteristics: (1) The cause of the
unforeseen and unexpected occurrence, or of the
failure of the debtor to comply with his obligation,
must be independent of the human will. (2) It must
be impossible to foresee the event which
constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid. (3) The
occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a
normal manner. And (4) the obligor (debtor) must
be free from any participation in the aggravation of
the injury resulting to the creditor. (5) Enciclopedia
Juridica Espaola, 309)
As will be seen, these authorities agree that some
extraordinary circumstance independent of the will
of the obligor or of his employees, is an essential
element of a caso fortuito. ...
The running amuck of the passenger was the proximate cause of the
incident as it triggered off a commotion and panic among the
passengers such that the passengers started running to the sole exit

shoving each other resulting in the falling off the bus by passengers
Beter and Rautraut causing them fatal injuries. The sudden act of the
passenger who stabbed another passenger in the bus is within the
context of force majeure.
However, in order that a common carrier may be absolved from liability
in case of force majeure, it is not enough that the accident was caused
by force majeure. The common carrier must still prove that it was not
negligent in causing the injuries resulting from such accident. Thus, as
early as 1912, we ruled:
From all the foregoing, it is concluded that the
defendant is not liable for the loss and damage of
the goods shipped on the lorcha Pilar by the
Chinaman, Ong Bien Sip, inasmuch as such loss
and damage were the result of a fortuitous event
or force majeure, and there was no negligence or
lack of care and diligence on the part of the
defendant company or its agents. (Tan Chiong
Sian v. Inchausti & Co., 22 Phil. 152 [1912];
Emphasis supplied).
This principle was reiterated in a more recent case, Batangas Laguna
Tayabas Co. v. Intermediate Appellate Court (167 SCRA 379 [1988]),
wherein we ruled:
... [F]or their defense of force majeure or act of
God to prosper the accident must be due to
natural causes and exclusively without human
intervention. (Emphasis supplied)
Therefore, the next question to be determined is whether or not the
petitioner's common carrier observed extraordinary diligence to
safeguard the lives of its passengers.
In this regard the trial court and the appellate court arrived at
conflicting factual findings.

their passengers. The evidence on record does

not show that defendants' personnel were
negligent in their duties. The defendants'
personnel have every right to accept passengers
absent any manifestation of violence or
drunkenness. If and when such passengers harm
other passengers without the knowledge of the
transportation company's personnel, the latter
should not be faulted. (Rollo, pp. 46-47)
A thorough examination of the records, however, show that there are
material facts ignored by the trial court which were discussed by the
appellate court to arrive at a different conclusion. These circumstances
show that the petitioner common carrier was negligent in the provision
of safety precautions so that its passengers may be transported safely
to their destinations. The appellate court states:
A critical eye must be accorded the lower court's
conclusions of fact in its tersely written ratio
decidendi. The lower court concluded that the door
of the bus was closed; secondly, the passengers,
specifically the two deceased, jumped out of the
window. The lower court therefore concluded that
the defendant common carrier is not liable for the
death of the said passengers which it implicitly
attributed to the unforeseen acts of the
unidentified passenger who went amuck.
There is nothing in the record to support the
conclusion that the solitary door of the bus was
locked as to prevent the passengers from passing
through. Leonila Cullano, testifying for the
defense, clearly stated that the conductor opened
the door when the passengers were shouting that
the bus stop while they were in a state of panic.
Sergia Beter categorically stated that she actually
saw her son fall from the bus as the door was
forced open by the force of the onrushing
passengers.

The trial court found the following facts:

The parties presented conflicting evidence as to
how the two deceased Narcisa Rautruat and
Ornominio Beter met their deaths.
However, from the evidence adduced by the
plaintiffs, the Court could not see why the two
deceased could have fallen off the bus when their
own witnesses testified that when the commotion
ensued inside the bus, the passengers pushed
and shoved each other towards the door
apparently in order to get off from the bus through
the door. But the passengers also could not pass
through the door because according to the
evidence the door was locked.
On the other hand, the Court is inclined to give
credence to the evidence adduced by the
defendants that when the commotion ensued
inside the bus, the two deceased panicked and, in
state of shock and fear, they jumped off from the
bus by passing through the window.
It is the prevailing rule and settled jurisprudence
that transportation companies are not insurers of

Pedro Collango, on the other hand, testified that

he shut the door after the last passenger had
boarded the bus. But he had quite conveniently
neglected to say that when the passengers had
panicked, he himself panicked and had gone to
open the door. Portions of the testimony of Leonila
Cullano, quoted below, are illuminating:
xxx xxx xxx
Q When you said the conductor opened the door,
the door at the front or rear portion of the bus?
A Front door.
Q And these two persons whom you said alighted,
where did they pass, the fron(t) door or rear door?
A Front door.
xxx xxx xxx
(Tsn., p. 4, Aug. 8, 1984)

xxx xxx xxx

COURT:

Q What happened after there was a commotion at

the rear portion of the bus?

Kilometers or miles?
A Miles.

A When the commotion occurred, I stood up and I

noticed that there was a passenger who was
sounded (sic). The conductor panicked because
the passengers were shouting 'stop, stop'. The
conductor opened the bus.'

Atty. Gambe:
Q That is only your estimate by your experience?

(Tsn. p. 3, August 8, 1984).

A Yes, sir, estimate.

Accordingly, there is no reason to believe that the

deceased passengers jumped from the window
when it was entirely possible for them to have
alighted through the door. The lower court's
reliance on the testimony of Pedro Collango, as
the conductor and employee of the common
carrier, is unjustified, in the light of the clear
testimony of Leonila Cullano as the sole
uninterested eyewitness of the entire episode.
Instead we find Pedro Collango's testimony to be
infused by bias and fraught with inconsistencies, if
not notably unreliable for lack of veracity. On direct
examination, he testified:

(Tsn., pp. 4-5, Oct. 17, 1983).

xxx xxx xxx

Q So what happened to the passengers inside
your bus?
A Some of the passengers jumped out of the
window.
COURT:
Q While the bus was in motion?
A Yes, your Honor, but the speed was slow
because we have just picked up a passenger.
Atty. Gambe:
Q You said that at the time of the incident the bus
was running slow because you have just picked up
a passenger. Can you estimate what was your
speed at that time?

At such speed of not less than 30 to 40 miles ..., or

about 48 to 65 kilometers per hour, the speed of
the bus could scarcely be considered slow
considering that according to Collango himself, the
bus had just come from a full stop after picking a
passenger (Tsn, p. 4, Id.) and that the bus was still
on its second or third gear (Tsn., p. 12, Id.).
In the light of the foregoing, the negligence of the
common carrier, through its employees, consisted
of the lack of extraordinary diligence required of
common carriers, in exercising vigilance and
utmost care of the safety of its passengers,
exemplified by the driver's belated stop and the
reckless opening of the doors of the bus while the
same was travelling at an appreciably fast speed.
At the same time, the common carrier itself
acknowledged, through its administrative officer,
Benjamin Granada, that the bus was
commissioned to travel and take on passengers
and the public at large, while equipped with only a
solitary door for a bus its size and loading
capacity, in contravention of rules and regulations
provided for under the Land Transportation and
Traffic Code (RA 4136 as amended.) (Rollo, pp.
23-26)
Considering the factual findings of the Court of Appeals-the bus driver
did not immediately stop the bus at the height of the commotion; the
bus was speeding from a full stop; the victims fell from the bus door
when it was opened or gave way while the bus was still running; the
conductor panicked and blew his whistle after people had already
fallen off the bus; and the bus was not properly equipped with doors in
accordance with law-it is clear that the petitioners have failed to
overcome the presumption of fault and negligence found in the law
governing common carriers.

Atty. Calo:
No basis, your Honor, he is neither a driver nor a
conductor.
COURT:
Let the witness answer. Estimate only, the
conductor experienced.
Witness:
Not less than 30 to 40 miles.

The petitioners' argument that the petitioners "are not insurers of their
passengers" deserves no merit in view of the failure of the petitioners
to prove that the deaths of the two passengers were exclusively due
to force majeureand not to the failure of the petitioners to observe
extraordinary diligence in transporting safely the passengers to their
destinations as warranted by law. (See Batangas Laguna Tayabas Co.
v. Intermediate Appellate Court,supra).
The petitioners also contend that the private respondents failed to
show to the court that they are the parents of Ornominio Beter and
Narcisa Rautraut respectively and therefore have no legal personality
to sue the petitioners. This argument deserves scant consideration. We
find this argument a belated attempt on the part of the petitioners to

avoid liability for the deaths of Beter and Rautraut. The private
respondents were Identified as the parents of the victims by witnesses
during the trial and the trial court recognized them as such. The trial
court dismissed the complaint solely on the ground that the petitioners
were not negligent.

gross earnings less necessary living expenses of

the deceased, in other words, only net earnings
are to be considered (People v. Daniel, supra; Villa
Rey Transit, Inc. v. Court of Appeals,supra).
Applying the foregoing rules with respect to
Ornominio Beter, it is both just and reasonable,
considering his social standing and position, to fix
the deductible, living and incidental expenses at
the sum of Four Hundred Pesos (P400.00) a
month, or Four Thousand Eight Hundred Pesos
(P4,800.00) annually. As to his income,
considering the irregular nature of the work of a
daily wage carpenter which is seasonal, it is safe
to assume that he shall have work for twenty (20)
days a month at Twenty Five Pesos (P150,000.00)
for twenty five years. Deducting therefrom his
necessary expenses, his heirs would be entitled to
Thirty Thousand Pesos (P30,000.00) representing
loss of support and service (P150,000.00 less
P120,000.00). In addition, his heirs are entitled to
Thirty Thousand Pesos (P30,000.00) as straight
death indemnity pursuant to Article 2206 (People
v. Daniel, supra). For damages for their moral and
mental anguish, his heirs are entitled to the
reasonable sum of P10,000.00 as an exception to
the general rule against moral damages in case of
breach of contract rule Art. 2200 (Necesito v.
Paras, 104 Phil. 75). As attorney's fees, Beter's
heirs are entitled to P5,000.00. All in all, the
plaintiff-appellants Ricardo and Sergia Beter as
heirs of their son Ornominio are entitled to an
indemnity of Seventy Five Thousand Pesos
(P75,000.00).

Finally, the amount of damages awarded to the heirs of Beter and

Rautraut by the appellate court is supported by the evidence. The
appellate court stated:
Ornominio Beter was 32 years of age at the time
of his death, single, in good health and rendering
support and service to his mother. As far as
Narcisa Rautraut is concerned, the only evidence
adduced is to the effect that at her death, she was
23 years of age, in good health and without visible
means of support.
In accordance with Art. 1764 in conjunction with
Art. 2206 of the Civil Code, and established
jurisprudence, several factors may be considered
in determining the award of damages, namely: 1)
life expectancy (considering the state of health of
the deceased and the mortality tables are deemed
conclusive) and loss of earning capacity; (2)
pecuniary loss, loss of support and service; and
(3) moral and mental suffering (Alcantara, et al. v.
Surro, et al., 93 Phil. 470).
In the case of People v. Daniel (No. L-66551, April
25, 1985, 136 SCRA 92, at page 104), the High
Tribunal, reiterating the rule in Villa Rey Transit,
Inc. v. Court of Appeals (31 SCRA 511), stated that
the amount of loss of earring capacity is based
mainly on two factors, namely, (1) the number of
years on the basis of which the damages shall be
computed; and (2) the rate at which the losses
sustained by the heirs should be fixed.
As the formula adopted in the case of Davila v.
Philippine Air Lines, 49 SCRA 497, at the age of
30 one's normal life expectancy is 33-1/3 years
based on the American Expectancy Table of
Mortality (2/3 x 80-32).itc-asl By taking into
account the pace and nature of the life of a
carpenter, it is reasonable to make allowances for
these circumstances and reduce the life
expectancy of the deceased Ornominio Beter to
25 years (People v. Daniel, supra). To fix the rate
of losses it must be noted that Art. 2206 refers to

In the case of Narcisa Rautraut, her heirs are

entitled to a straight death indemnity of Thirty
Thousand Pesos (P30,000.00), to moral damages
in the amount of Ten Thousand Pesos
(P10,000.00) and Five Thousand Pesos
(P5,000.00) as attorney's fees, or a total of Forty
Five Thousand Pesos (P45,000.00) as total
indemnity for her death in the absence of any
evidence that she had visible means of support.
(Rollo, pp. 30-31)
WHEREFORE, the instant petition is DISMISSED. The questioned
decision dated May 19, 1988 and the resolution dated August 1, 1988
of the Court of Appeals are AFFIRMED.
SO ORDERED.

THIRD DIVISION
[G.R. No. 136048. January 23, 2001]
JOSE BARITUA and JB LINE, petitioners, vs. NIMFA DIVINA
MERCADER in her capacity and as guardian of DARWIN,
GIOVANNI, RODEL and DENNIS, all surnamed
MERCADER; LEONIDA Vda. de MERCADER on her behalf
and on behalf of her minor child MARY JOY MERCADER;
SHIRLEY MERCADER DELA CRUZ; MARIA THERESA
MERCADER-GARCIA; DANILO MERCADER; JOSE
DANTE
MERCADER;
and
JOSEFINA
MERCADER, respondents.

DECISION
PANGANIBAN, J.:
The Manchester ruling requiring the payment of docket and other fees
as a condition for the acquisition of jurisdiction has no retroactive effect and
applies only to cases filed after its finality.
The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court,

assailing the April 17, 1998 Decision [1] and the October 28, 1998
Resolution[2] of the Court of Appeals (CA) in CA-GR CV No. 40772. The
decretal portion of said Decision reads as follows:

(10) The late Dominador Mercader is a [b]usinessman mainly engaged in the

buy and sell of dry goods in Laoang, N. Samar. He buys his goods from
Manila and bring[s] them to Laoang, Northern Samar for sale at his store
located in the said locality;

WHEREFORE, upon all the foregoing premises considered, the DECISION

appealed from is AFFIRMED with the MODIFICATION that the loss of
earnings of the late Dominador Mercader is reduced to P798,000.00.[3]

(11) Sometime on March 16, 1983, the late Dominador Mercader boarded
[petitioners] bus No. 142 with Plate No. 484 EU at [petitioners] Manila
Station/terminal, bound for Brgy. Rawis, Laoang Northern Samar as a paying
passenger;

The assailed
Reconsideration.

Resolution

denied

petitioners

Motion

for

The Court of Appeals sustained the Decision of the Regional Trial

Court (RTC) of Laoang, Northern Samar (Branch 21). Except for the
modification of the loss of earnings, it affirmed all the monetary damages
granted by the trial court to respondents. The decretal portion of the assailed
RTC Decision reads as follows:[4]
WHEREFORE, on preponderance of evidence, judgment is for [herein
respondents] and against [herein petitioners], ordering the latter to pay the
former:
(a) As compensatory damages for the death of Dominador Mercader -P50,000.00;
(b) For the loss of earnings of the late Dominador Mercader -- P1,660,000.00,
more or less, based on the average life span of 75 years from the time of his
death who earned a net income of P5,000.00 monthly out of his business;
(c) Actual damages of P30,000.00 receipted purchases of goods in Manila;
P5,750.00 for the first class coffin and a 15-day wake services evidenced by a
receipt marked Exh. D; [P]850.00 for the 50 x 60 headstone, receipt marked
Exh. E and P1,590.00 -- Deed of Absolute Sale of a burial lot, marked Exh.
F;
(d) 25% of whatever amount is collected by [respondents] from [petitioners]
but no less than P50,000.00 plus P1,000.00 per hearing by way of attorneys
fees;
(e) As moral damages -- P50,000.00;

(12) At that time, Dominador Mercader had with him as his baggage, assorted
goods (i.e. long pants, short pants, dusters, etc.) which he likewise loaded in
[petitioners] bus;
(13) The late Dominador Mercader was not able to reach his destination
considering that on March 17, 1983 at Beily (Bugco) Bridge, Barangay Roxas,
Mondragon, Northern Samar, while he was on board [petitioners] bus no. 142
with Plate No. 484 EU, the said bus fell into the river as a result of which the
late Dominador Mercader died. x x x.
(14) The accident happened because [petitioners] driver negligently and
recklessly operated the bus at a fast speed in wanton disregard of traffic rules
and regulations and the prevailing conditions then existing that caused [the]
bus to fall into the river.
[Respondents] then filed a motion to declare [petitioners] in default which
motion was opposed by [petitioners]. [Respondents] withdrew the said motion
prompting the trial court to cancel the scheduled hearing of the said motion to
declare [petitioners] in default in an Order dated January 23, 1985.
In its answer, [petitioners] denied specifically all the material allegations in
the complaint and alleged the following:
2. The alleged person of Dominador Mercader did not board bus 142 at
[petitioners] Manila station/terminal x x x as a (supposed paying passenger).
There is even no statement in the complaint that Dominador Mercader (if it
were true that he was a passenger of bus 142 at the [petitioners] Manila
station/terminal) was issued any passenger-freight ticket conformably with
law and practice. It is a fact of public knowledge that, in compliance with
existing rules and laws, [Petitioner] Baritua, as a public utility operator, issues,
thru his conductors, in appropriate situations, to a true passenger, the familiar
and known passenger and freight ticket which reads in part:

(f) As exemplary damages -- P30,000.00; and

NOTICE
(g) To pay the costs.
The Facts

The antecedents of the case are succinctly summarized by the Court of

Appeals in this wise:

Baggage carried at owners risk x x x liability on prepaid freight otherwise

declared.
xxx

xxx

xxx

Whole Fare Paid P ______________

The original complaint was filed against JB Lines, Inc. [Petitioner JB Lines,
Inc.] filed a motion to dismiss complaint, to strike out false-impertinent
matters therefrom, and/or for bill of particulars on the primary grounds that
[respondents] failed to implead Jose Baritua as an indispensable party and that
the cause of action is a suit against a wrong and non-existent party.
[Respondents] filed an opposition to the said motion and an amended
complaint.
In an Order dated December 11, 1984 the trial court denied the aforesaid
motion and admitted the amended complaint of [respondents] impleading Jose
Baritua and alleged the following:

Declared value ____________ x x x.

Description of Freight _____________________________
Signature of Owner.
3. It is also a fact of public knowledge that [Petitioner] Baritua does not have
any Manila station/terminal, because what he has is a Pasay city station.
4. [Petitioner] Baritua had no prior knowledge that, on or about March 17,
1983, and/or previous thereto, the Bugko Bailey Bridge (across Catarman-

Laoang road) in Barangay Roxas, Mondragon, Northern Samar, was in virtual

dilapida[ted] and dangerous condition, in a state of decay and disrepair, thus
calling for the concerned government and public officials performance of
their coordinative and joint duties and responsibilities, to repair, improve and
maintain that bridge, in good and reasonably safe condition, but, far from
performing or complying with said subject duties and responsibilities, the
adverted officials concerned, without just cause, not only failed and neglected
to cause such needed repair, improvement and maintenance of the Bugko
Bailey Bridge, on or prior to March 17, 1983, but also failed, and neglected to
either close the Bugko Bridge to public use and travel, and/or to put
appropriate warning and cautionary signs, for repair, improvement,
maintenance, and safety purposes. So that, as a proximate and direct
consequence of the aggregate officials nonfeasance, bad faith, negligence,
serious inefficiency, and callous indifference to public safety, that Bugko
Bridge collapsed inward and caved in ruin, on that March 17, 1983, while
Barituas bus 142 was cautiously and prudently passing and travelling across
the said bridge, as a result of which the bus fell into the river and sea waters,
despite the exercise and compliance by Baritua and his driver of their duties in
the matter of their requisite degree of diligence, caution and prudence, Baritua
also exercised and complied with the requisite duty of diligence, care, and
prudence in the selection and supervision over his driver, contrary to the
baseless imputation in paragraphs 14 and 20 of the original and amended
complaints. Moreover, Baritua and his driver did not violate any traffic rule
and regulation, contrary to plaintiffs insinuation.
5. Furthermore, [Petitioner] Baritua and his driver have no causative
connection with the alleged death of Dominador Mercader who, according to
a reliable source, was already seriously suffering from a lingering illness even
prior to his alleged demise. Baritua also learned lately, and so it is herein
alleged that Dominador Mercader contributed considerably, to, and/or
provided the proximate and direct cause of his own death, hence, he himself is
to be blamed for whatever may have happened to him or for whatever may
have been sustained by his supposed heirs, vis--vis the suit against the wrong
party.
6. Baritua and his driver, as earlier stated, did not commit any actionable
breach of contract with the alleged Dominador Mercader or the latters
supposed heirs.
7. There is no factual nor any legal basis for plaintiffs proffered claims for
damages.

8.2.b. The allegation on supposed minimum life of 75 years and on he

expects to earn no less than P1,680,000.00 x x x is false, a pure hyperbole, and
bereft of factual and legal basis. Besides, what jurisprudential rule refers to is
only net earning. The law abhors a claim, akin to plaintiffs allegation, which
is manifestly speculative, as it may not exist at all. Furthermore, the
questioned allegation in the plaintiffs original and amended complaints is not
preceded by the requisite statement of definitive facts, nor of any specific fact,
which could possibly afford a rational basis for a reasonable expectation of
supposed earning that could be lost, or impaired.
8.2.c. Likewise, the allegations that allegedly x x x the late Dominador
Mercader boarded x x x Bus No. 142 x x x and that supposedly the latter had a
baggage x x x containing drygoods x x x in which case [petitioners have] to
pay the value thereof in such amount as may be proven by [respondents] in
court during the trial x x x, apart from being false, are offensive to the rule on
concise statement of ultimate facts. The assailed allegations also contravene
Interim Rule 11, (i)f any demand is for damages in a civil action the amount
thereof must be specifically alleged. In consequence of this averment,
[respondents] have not yet paid the correct docket fee, for which reason,
[respondents] case may be dismissed on that ground alone.
8.3. In violation also of the same Interim Rule 11, regarding the requisite
definitive amount of claim, the allegation on the supposed funeral expense x x
x does not also indicate any specific amount. So with the averment on
supposed moral damage which may not be warranted because of absence of
allegation of fraud or bad faith, if any, there was, apart from want of causative
connection with the defendant.
8.4. The allegation in paragraph 15 of the original and amended complaint is
also a pure conclusionary averment, without a factual premise.
9. [Petitioner] JB LINE, impleaded in the amended complaint, is merely a
business name and sole proprietorship of defendant Baritua. As such, JB Line
is not a juridical person, nor an entity authorized by law to sue and be sued,
hence, it cannot legally be a party to any action. With this averment,
correlated with that in paragraphs 4-5 hereof, [respondents] amended
complaint is essentially a suit against a wrong party.[5]
The RTC, after due trial, rendered the aforesaid assailed Decision.
Ruling of the Court of Appeals

II. AFFIRMATIVE DEFENSES

8. Based on the preceding averments, plaintiffs have neither a cause nor a
right of action against [Petitioner] Baritua and his driver.
8.1. The allegation that supposedly the x x x [p]laintiffs are the compulsory
heirs of the late DOMINADOR MERCADER x x x (par. 8, complaint) is too
vague and too broad, as the subject allegation is a bare and pure conclusionary
averment unaccompanied by the requisite statement of ultimate facts
constitutive of a cause or right of action.

As earlier stated, the Court of Appeals affirmed the trial courts award
of monetary damages in favor of respondents, except the amount of
Dominador Mercaders lost earnings, which it reduced toP798,000. It held
that petitioners failed to rebut the presumption that in the event a passenger
died or was injured, the carrier had acted negligently. Petitioners, it added,
presented no sufficient proof that they had exercised extraordinary diligence.
Hence, this Petition.[6]
The Issues

8.2. Even assuming arguendo, without however conceding, plaintiffs

statement of a cause of action, the complaint is nonetheless replete with false
and impertinent matters which fit the rule on striking out pleadings or parts
thereof. To mention only a glaring few:

In their Memorandum, petitioners submit the following issues for our

consideration:
I

8.2.a. The allegation on exemplary damages x x x is impertinent and

immaterial in the complaint against a supposed employer. For, even
theoretically assuming, without however admitting a negligent act-omission
on the part of a driver, nevertheless, in such a hypothetical situation, the
causative negligence, if any there was, is personal to the wrongdoer, i.e., the
employee-driver, to the exclusion of the employer.

Did the honorable Court of Appeals (CA) gravely abuse its discretion when it
allowed to pass sub silencio the trial courts failure to rule frontally on
petitioners plea for a bill of particulars, and ignored the nature of
respondents prayer in the complaint pleading for an award of -a) P12,000.00 -- representing the death compensation;

b) An amount to be proven in court, representing actual

damages;
c) P1,660,000.00 or more as may be proven during the trial, by
way of loss of earnings;
d) An amount to be proven in court as and by way of funeral
expenses;
e) An amount to be proven during the trial, representing moral
damages;
f) An amount to be determined by this Honorable Court,
representing exemplary damages;
g) An amount equivalent to 25% of whatever amount the
plaintiffs would be able to collect from the defendant but in no
case less than P50,000.00 plus an additional amount
of P1,000.00 per hearing as and by way of Attorneys fees;
II
Did the CA also ignore the fact that the trial court was not paid the correct
amount of the docket and other lawful fees; hence, without jurisdiction over
the original and amended complaints or over the subject matter of the case;
III
Did the CA likewise arbitrarily disregard petitioners constitutional right to
procedural due process and fairness when it ignored and thrust aside their
right to present evidence and to expect that their evidence will be duly
considered and appreciated; and
IV
In awarding excessive and extravagant damages, did the CA and the trial court
adhere to the rule that their assailed decision must state clearly and distinctly
the facts and the laws on which they are based?[7]
Distilling the alleged errors cited above, petitioners raise two main
issues for our consideration: (1) whether the CA erred in holding that the RTC
had jurisdiction over the subject matter of the case, and (2) whether the CA
disregarded petitioners procedural rights.
The Courts Ruling

The Petition is devoid of merit.

First Issue: Jurisdiction

Petitioners contend that since the correct amounts of docket and other
lawful fees were not paid by respondents, then the trial court did not acquire
jurisdiction over the subject matter of the case.
The Court, in Manchester Development Corporation v. CA,[8] held that
[t]he court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. An amendment of the complaint or similar pleading
will not thereby vest jurisdiction in the court, much less the payment of the
docket fee based on the amounts sought in the amended pleading. x x x.
Generally, the jurisdiction of a court is determined by the statute in
force at the commencement of the action, [9] unless such statute provides for its

retroactive application.[10] Once the jurisdiction of a court attaches, it

continues until the case is finally terminated.[11] The trial court cannot be
ousted therefrom by subsequent happenings or events, although of a character
that would have prevented jurisdiction from attaching in the first instance.[12]
The Manchester ruling, which became final in 1987, has no retroactive
application and cannot be invoked in the subject Complaint filed in 1984. The
Court explicitly declared:
To put a stop to this irregularity, henceforth all complaints, petitions,
answers and other similar pleadings should specify the amount of damages
being prayed for not only in the body of the pleading but also in the prayer,
and said damages shall be considered in the assessment of the filing fees in
any case. Any pleading that fails to comply with this requirement shall not be
accepted nor admitted, or shall otherwise be expunged from the
record.[13] (emphasis supplied)
Second Issue: Petitioners Procedural Rights

Motion for a Bill of Particulars

Petitioners argue that the Court of Appeals erred when it passed sub
silencio on the trial courts failure to rule frontally on their plea for a bill of
particulars.
We are not impressed. It must be noted that petitioners counsel
manifested in open court his desire to file a motion for a bill of
particulars. The RTC gave him ten days from March 12, 1985 within which to
do so.[14] He, however, filed the aforesaid motion only on April 2, 1985 or
eleven days past the deadline set by the trial court. [15] Moreover, such motion
was already moot and academic because, prior to its filing, petitioners had
already filed their answer and several other pleadings to the amended
Complaint. Section 1, Rule 12 of the Rules of Court, provides:
Section 1. When applied for; purpose. -- Before responding to a pleading, a
party may move for a more definite statement or for a bill of particulars of any
matter which is not averred with sufficient definiteness or particularity to
enable him properly to prepare his responsive pleading. If the pleading is a
reply, the motion must be filed within ten (10) days from service
thereof. Such motion shall point out the defects complained of, the
paragraphs wherein they are contained, and the details desired. [16] (emphasis
supplied)
Petitioners Right to Adduce Evidence

Petitioners also argue that their right to present evidence was violated
by the CA, because it did not consider their contention that the trial judges
who heard the case were biased and impartial. Petitioners contend, as they did
before the CA, that Judge Tomas B. Noynay based his Decision on certain
chosen partial testimonies of [respondents] witnesses x x x. They further
maintain that Judge Fortunato Operario, who initially handled the case,
questioned some witnesses in an overzealous manner and assum[ed] the dual
role of magistrate and advocate.[17]
These arguments are not meritorious. First, judges cannot be expected
to rely on the testimonies of every witness. In ascertaining the facts, they
determine who are credible and who are not. In doing so, they consider all the
evidence before them. In other words, the mere fact that Judge Noynay based
his decision on the testimonies of respondents witnesses does not necessarily
mean that he did not consider those of petitioners. Second, we find no
sufficient showing that Judge Operario was overzealous in questioning the
witnesses. His questions merely sought to clarify their testimonies. In all, we
reject petitioners contention that their right to adduce evidence was violated.

Alleged Failure to State Clearly the Facts and the Law

Second, the bus was overloaded at the time. In fact, several individuals
were standing when the incident occurred.[21]

We are not convinced by petitioners contention, either, that both the

trial and the appellate courts failed to state clearly and distinctly the facts and
the law involved in the case. As can be gleaned from their Decisions, both
courts clearly laid down their bases for awarding monetary damages to
respondents.
Both the RTC and the CA found that a contract of carriage existed
between petitioners and Dominador Mercader when he boarded Bus No. 142
in Pasay City on March 16, 1983. Petitioners failed to transport him to his
destination, because the bus fell into a river while traversing the Bugko Bailey
Bridge. Although he survived the fall, he later died of asphyxia secondary to
drowning.
We agree with the findings of both courts that petitioners failed to
observe extraordinary diligence[18] that fateful morning. It must be noted that
a common carrier, by the nature of its business and for reasons of public
policy, is bound to carry passengers safely as far as human care and foresight
can provide. It is supposed to do so by using the utmost diligence of very
cautious persons, with due regard for all the circumstances.[19] In case of death
or injuries to passengers, it is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence as
prescribed in Articles 1733 and 1755[20] of the Civil Code.

Third, the bus was overspeeding. Its conductor testified that it had
overtaken several buses before it reached the Bugko Bailey Bridge.
[22]
Moreover, prior to crossing the bridge, it had accelerated and maintained
its speed towards the bridge.[23]
We therefore believe that there is no reason to overturn the assailed CA
Decision, which affirmed that of the RTC. It is a well-settled rule that the trial
courts factual findings, when affirmed by the appellate court, are conclusive
and binding, if they are not tainted with arbitrariness or oversight of some fact
or circumstance of significance and influence.[24] As clearly discussed above,
petitioners have not presented sufficient ground to warrant a deviation from
this rule.
Finally, we cannot fault the appellate court in its computation of the
damages and lost earnings, since it effectively computed only net earnings in
accordance with existing jurisprudence.[25]
WHEREFORE, the Petition is hereby DENIED, and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.

We sustain the ruling of the CA that petitioners failed to prove that they
had observed extraordinary diligence.
First, petitioners did not present evidence on the skill or expertise of
the driver of Bus No. 142 or the condition of that vehicle at the time of the
incident.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23733

October 31, 1969

HERMINIO L. NOCUM, plaintiff-appellee,

vs.
LAGUNA TAYABAS BUS COMPANY, defendant-appellant.
Fernando M. Mangubat and Felimon H. Mendoza for plaintiff-appellee.
Domingo E. de Lara and Associates for defendant-appellant.
BARREDO, J.:
Appeal of the Laguna Tayabas Bus Co., defendant in the Court below, from
a judgment of the said court (Court of First Instance of Batangas) in its Civil
Case No. 834, wherein appellee Herminio L. Nocum was plaintiff,
sentencing appellant to pay appellee the sum of P1,351.00 for actual
damages and P500.00 as attorney's fees with legal interest from the filing of
the complaint plus costs. Appellee, who was a passenger in appellant's Bus
No. 120 then making a trip within the barrio of Dita, Municipality of Bay,
Laguna, was injured as a consequence of the explosion of firecrackers,
contained in a box, loaded in said bus and declared to its conductor as
containing clothes and miscellaneous items by a co-passenger. The
findings of fact of the trial court are not assailed. The appeal is purely on
legal questions.
Appellee has not filed any brief. All that We have before Us is appellant's
brief with the following assignment of errors:

I
BASED ON THE FACTS THE LOWER COURT FOUND AS
ESTABLISHED, IT ERRED AS A MATTER OF LAW IN NOT
ABSOLVING APPELLANT FROM LIABILITY RESULTING
FROM THE EXPLOSION OF FIRECRACKERS CONTAINED IN
A PACKAGE, THE CONTENTS OF WHICH WERE
MISREPRESENTED BY A PASSENGER.
II
THE LOWER COURT ERRED, AS A MATTER OF LAW, IN
AWARDING DAMAGES WITH LEGAL INTEREST IN FAVOR OF
THE APPELLEE.
III
THE LOWER COURT ERRED IN NOT DISMISSING THE
COMPLAINT, WITH COSTS AGAINST THE APPELLEE.
Upon consideration of the points raised and discussed by appellant, We
find the appeal to be well taken.
The main basis of the trial court's decision is that appellant did not observe
the extraordinary or utmost diligence of a very cautious person required by
the following articles of the Civil Code:
ART. 1733. Common carriers, from the nature of their business
and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to
all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is

further expressed in articles 1734, 1735, and 1745, Nos. 5, 6,
and 7, while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
ART. 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.
ART 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.

destructions of buildings by unforeseen accidents and other

occurrences of a similar nature." In other words, the cause of the
unexpected event must be independent of the will of man or
something which cannot be avoided. This cannot be said of the
instant case. If proper and rigid inspection were observed by the
defendant, the contents of the box could have been discovered
and the accident avoided. Refusal by the passenger to have the
package opened was no excuse because, as stated by
Dispatcher Cornista, employees should call the police if there
were packages containing articles against company regulations.
Neither was failure by employees of defendant company to
detect the contents of the packages of passengers because like
the rationale in the Necesito vs. Paras case (supra), a passenger
has neither choice nor control in the exercise of their discretion
in determining what are inside the package of co-passengers
which may eventually prove fatal.

Analyzing the evidence presented by the parties, His Honor found:

According to Severino Andaya, a witness for the plaintiff, a man
with a box went up the baggage compartment of the bus where
he already was and said box was placed under the seat. They
left Azcarraga at about 11:30 in the morning and when the
explosion occurred, he was thrown out. PC investigation report
states that thirty seven (37) passengers were injured (Exhibits
"O" and "2").
The bus conductor, Sancho Mendoza, testified that the box
belonged to a passenger whose name he does not know and
who told him that it contained miscellaneous items and clothes.
He helped the owner in loading the baggage which weighed
about twelve (12) kilos and because of company regulation, he
charged him for it twenty-five centavos (P0.25). From its
appearance there was no indication at all that the contents were
explosives or firecrackers. Neither did he open the box because
he just relied on the word of the owner.
Dispatcher Nicolas Cornista of defendant company
corroborrated the testimony of Mendoza and he said, among
other things, that he was present when the box was loaded in
the truck and the owner agreed to pay its fare. He added that
they were not authorized to open the baggages of passengers
because instruction from the management was to call the police
if there were packages containing articles which were against
regulations.
xxx

xxx

xxx

There is no question that Bus No. 120 was road worthy when it
left its Manila Terminal for Lucena that morning of December 5,
1960. The injuries suffered by the plaintiff were not due to
mechanical defects but to the explosion of firecrackers inside the
bus which was loaded by a co-passenger.
... Turning to the present case, it is quite clear that extraordinary
or utmost diligence of a very cautious person was not observed
by the defendant company. The service manual, exhibits "3" and
"3-A," prohibits the employees to allow explosives, such as
dynamite and firecrackers to be transported on its buses. To
implement this particular rule for 'the safety of passengers, it was
therefore incumbent upon the employees of the company to
make the proper inspection of all the baggages which are carried
by the passengers.
But then, can it not be said that the breach of the contract was
due to fortuitous event? The Supreme Court in the case of
Lasam vs. Smith, 45 Phil. 657, quoted Escriche's definition
of caso fortuito as "an unexpected event or act of God which
could neither be foreseen nor resisted, such as floods, torrents,
shipwrecks, conflagrations, lightning, compulsions, insurrections,

We cannot agree. No doubt, the views of His Honor do seem to be in line

with the reasons that the Code Commission had for incorporating the
above-quoted provisions in its draft of the Civil Code. Indeed, in approving
the said draft, Congress must have concurred with the Commission that by
requiring the highest degree of diligence from common carriers in the safe
transport of their passengers and by creating a presumption of negligence
against them, the recklessness of their drivers which is a common sight
even in crowded areas and, particularly, on the highways throughout the
country may, somehow, if not in a large measure, be curbed. We are not
convinced, however, that the exacting criterion of said provisions has not
been met by appellant in the circumstances of this particular case.
It is undisputed that before the box containing the firecrackers were allowed
to be loaded in the bus by the conductor, inquiry was made with the
passenger carrying the same as to what was in it, since its "opening ... was
folded and tied with abaca." (Decision p. 16, Record on Appeal.) According
to His Honor, "if proper and rigid inspection were observed by the
defendant, the contents of the box could have been discovered and the
accident avoided. Refusal by the passenger to have the package opened
was no excuse because, as stated by Dispatcher Cornista, employees
should call the police if there were packages containing articles against
company regulations." That may be true, but it is Our considered opinion
that the law does not require as much. Article 1733 is not as unbending as
His Honor has held, for it reasonably qualifies the extraordinary diligence
required of common carriers for the safety of the passengers transported by
them to be "according to all the circumstances of each case." In fact, Article
1755 repeats this same qualification: "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 due regard for all
the circumstances."
In this particular case before Us, it must be considered that while it is true
the passengers of appellant's bus should not be made to suffer for
something over which they had no control, as enunciated in the decision of
this Court cited by His Honor,1 fairness demands that in measuring a
common carrier's duty towards its passengers, allowance must be given to
the reliance that should be reposed on the sense of responsibility of all the
passengers in regard to their common safety. It is to be presumed that a
passenger will not take with him anything dangerous to the lives and limbs
of his co-passengers, not to speak of his own. Not to be lightly considered
must be the right to privacy to which each passenger is entitled. He cannot
be subjected to any unusual search, when he protests the innocuousness
of his baggage and nothing appears to indicate the contrary, as in the case
at bar. In other words, inquiry may be verbally made as to the nature of a
passenger's baggage when such is not outwardly perceptible, but beyond
this, constitutional boundaries are already in danger of being transgressed.
Calling a policeman to his aid, as suggested by the service manual invoked
by the trial judge, in compelling the passenger to submit to more rigid
inspection, after the passenger had already declared that the box contained
mere clothes and other miscellaneous, could not have justified invasion of a
constitutionally protected domain. Police officers acting without judicial
authority secured in the manner provided by law are not beyond the pale of
constitutional inhibitions designed to protect individual human rights and
liberties. Withal, what must be importantly considered here is not so much

the infringement of the fundamental sacred rights of the particular

passenger herein involved, but the constant threat any contrary ruling would
pose on the right of privacy of all passengers of all common carriers,
considering how easily the duty to inspect can be made an excuse for
mischief and abuse. Of course, when there are sufficient indications that the
representations of the passenger regarding the nature of his baggage may
not be true, in the interest of the common safety of all, the assistance of the
police authorities may be solicited, not necessarily to force the passenger to
open his baggage, but to conduct the needed investigation consistent with
the rules of propriety and, above all, the constitutional rights of the
passenger. It is in this sense that the mentioned service manual issued by
appellant to its conductors must be understood.
Decisions in other jurisdictions cited by appellant in its brief, evidently
because of the paucity of local precedents squarely in point, emphasize that
there is need, as We hold here, for evidence of circumstances indicating
cause or causes for apprehension that the passenger's baggage is
dangerous and that it is failure of the common carrier's employee to act in
the face of such evidence that constitutes the cornerstone of the common
carrier's liability in cases similar to the present one.
The principle that must control the servants of the carrier in a
case like the one before us is correctly stated in the opinion in
the case of Clarke v. Louisville & N.R. Co. 20 Ky L. Rep. 839, 49
S.W. 1120. In that case Clarke was a passenger on the
defendant's train. Another passenger took a quantity of
gasoline into the same coach in which Clarke was riding. It
ignited and exploded, by reason of which he was severely
injured. The trial court peremptorily instructed the jury to find for
the defendant. In the opinion, affirming the judgment, it is said: "It
may be stated briefly, in assuming the liability of a railroad to its
passengers for injury done by another passenger, only where the
conduct of this passenger had been such before the injury as to
induce a reasonably prudent and vigilant conductor to believe
that there was reasonable ground to apprehend violence and
danger to the other passengers, and in that case asserting it to
be the duty of the conductor of the railroad train to use all
reasonable means to prevent such injury, and if he neglects this
reasonable duty, and injury is done, that then the company is
responsible; that otherwise the railroad is not responsible."
The opinion quotes with approval from the case of Gulf, C. & S.
F. R. Co. vs. Shields, 9 Tex. Civ. App. 652, 29 S. W. 652, in
which case the plaintiff was injured by alcohol which had been
carried upon the train by another passenger. In the opinion in
Republic of the Philippines
SUPREME COURT
Manila

that case it is said: "It was but a short period of time after the
alcohol was spilt when it was set on fire and the accident
occurred, and it was not shown that appellant's employees knew
that the jug contained alcohol. In fact, it is not shown that the
conductor or any other employee knew that Harris had a jug with
him until it fell out of the sack, though the conductor had
collected ... (his) fare, and doubtless knew that he had the sack
on the seat with him. ... It cannot be successfully denied that
Harris had the right as a passenger to carry baggage on the
train, and that he had a right to carry it in a sack if he chose to do
so. We think it is equally clear that, in the absence of some
intimation or circumstance indicating that the sack contained
something dangerous to other passengers, it was not the duty of
appellant's conductor or any other employee to open the sack
and examine its contents." Quinn v. Louisville & N. R. Co. 98 Ky.
231, 32 S. W. 742; Wood v. Louisville & N. R. Co. 101 Ky. 703,
42 S. W. 349; Louisville & N. R. Co. v. Vincent, 29 Ky. L. Rep.
1049, 96 S. W. 898; Louisville & N. R. Co. v. Renfro, 142 Ky.
590, 33 L. R. A. (N. S.) 133, 135 S. W. 266. 2 (Emphasis supplied)
Explosive or Dangerous Contents. A carrier is ordinarily not
liable for injuries to passengers from fires or explosions caused
by articles brought into its conveyances by other passengers, in
the absence of any evidence that the carrier, through its
employees, was aware of the nature of the article or had any
reason to anticipate danger therefrom. (Bogard v. Illinois C. R
Co. 144 Ky. 649, 139 S. W. 855, 36 L. R. A.[N. S.] 337; Clarke v.
Louisville & N. R. Co. 101 Ky. 34, 39 S. W. 840, 36 L. R. A. 123
[explosion of can of gasoline]; East Indian R. Co. v. Mukerjee
[1901] A. C. [Eng.] 396, 3 B. R. C. 420 P. C. [explosion of
fireworks]; Annotation: 37 L. R. A. [N. S.] 725.) 3
Appellant further invokes Article 1174 of the Civil Code which relieves all
obligors, including, of course, common carriers like appellant, from the
consequence of fortuitous events. The court a quo held that "the breach of
contract (in this case) was not due to fortuitous event and that, therefore,
the defendant is liable in damages." Since We hold that appellant has
succeeded in rebutting the presumption of negligence by showing that it
has exercised extraordinary diligence for the safety of its passengers,
"according to the circumstances of the (each) case", We deem it
unnecessary to rule whether or not there was any fortuitous event in this
case.
ACCORDINGLY, the appealed judgment of the trial court is reversed and
the case is dismissed, without costs.
JOCSON, ARLENE Y. MORTIZ, LIZA MAYO, CARLOS RANARIO,
ROSAMARIA T. RADOC and BERNADETTE FERRER, respondents.

SECOND DIVISION
MENDOZA, J.:p

G.R. No. 111127 July 26, 1996

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. LOPES, 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

This is a petition for review on certiorari of the decision of the Court of

Appeals 1 in CA-GR No. 28245, dated September 30, 1992, which affirmed
with modification the decision of the Regional Trial Court of Makati, Branch
58, ordering petitioners jointly and severally to pay damages to private
respondent Amyline Antonio, and its resolution which denied petitioners'
motion for reconsideration for lack of merit.
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model
Mazda minibus. They used the bus principally in connection with a bus
service for school children which they operated in Manila. The couple had a
driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for two
weeks, His job was to take school children to and from the St. Scholastica's
College in Malate, Manila.
On November 2, 1984 private respondent Word for the World Christian
Fellowship Inc. (WWCF) arranged with petitioners for the transportation of

33 members of its Young Adults Ministry from Manila to La Union and back
in consideration of which private respondent paid petitioners the amount of
P3,000.00.
The group was scheduled to leave on November 2, 1984, at 5:00 o'clock in
the afternoon. However, as several members of the party were late, the bus
did not leave the Tropical Hut at the corner of Ortigas Avenue and EDSA
until 8:00 o'clock 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, sot hat 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 Baay 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 down by a wooden seat which came off after being unscrewed. It took
three persons to safely remove her from this portion. 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 latter's fence. On the basis of Escano's 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 Baay, 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 xray 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.

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 attorney's 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 attorney's fees; and
6) Costs of suit.
The Court of Appeals sustained the trial court's 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.

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:

II. WHETHER OF 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.

Petitioners challenge the propriety of the award of compensatory damages

in the amount of P600,000.00. It is insisted that, on the assumption that
petitioners are liable an award of P600,000.00 is unconscionable and highly
speculative. Amyline Antonio testified that she was a casual employee of a
company called "Suaco," earning P1,650.00 a month, and a dealer of Avon
products, earning an average of P1,000.00 monthly. Petitioners contend
that as casual employees do not have security of tenure, the award of
P600,000.00, considering Amyline Antonio's earnings, is without factual
basis as there is no assurance that she would be regularly earning these
amounts.
With the exception of the award of damages, the petition is devoid of merit.
First, it is unnecessary for our purpose to determine whether to decide this
case on the theory that petitioners are liable for breach of contract of
carriage or culpa contractual or on the theory of quasi delict or culpa
aquiliana as both the Regional Trial Court and the Court of Appeals held, for
although the relation of passenger and carrier is "contractual both in 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 Cabil's first one outside of Manila, Cabil should have driven his
vehicle at a moderate speed. There is testimony 4that 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 supervisions of their employee.
Due diligence in selection of employees is not satisfied by finding that the
applicant possessed a professional driver's 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
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. Scholastica's College in Metro
Manila. 7 They had hired him only after a two-week apprenticeship. 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 congregation's delayed meeting) could have a
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 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 community or population, and one who offers
services or solicits business only from a narrow
segment of the general population. We think that
Article 1732 deliberately refrained from making such
distinctions.
As common carriers, the Fabres were found to
exercise "extraordinary diligence" for the safe
transportation of the passengers to their destination.
This duty of care is not excused by proof that they
exercise the diligence of a good father of the family in
the selection and supervision of their employee. As
Art. 1759 of the Code provides:
Common carriers are liable for the death of or injuries
to passengers through the negligence or willful acts of
the former's employees although such employees
may have acted beyond the scope of their authority or
in violation of the orders of the common carriers.
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.
The same circumstances detailed above, supporting the finding of the trial
court and of the appellate court that petitioners are liable under Arts. 2176
and 2180 for quasi delict, fully justify findings them guilty of breach of
contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.
Secondly, we sustain the award of damages in favor of Amyline Antonio.
However, we think the Court of Appeals erred in increasing the amount of

compensatory damages because private respondents did not question this

award as inadequate. 11 To the contrary, the award of P500,000.00 for
compensatory damages which the Regional Trial Court made is reasonable
considering the contingent nature of her income as a casual employee of a
company and as distributor of beauty products and the fact that the
possibility that she might be able to work again has not been foreclosed. In
fact she testified that one of her previous employers had expressed
willingness to employ her again.
With respect to the other awards, while the decisions of the trial court and
the Court of Appeals do not sufficiently indicate the factual and legal basis
for them, we find that they are nevertheless supported by evidence in the
records of this case. Viewed as an action for quasi delict, this case falls
squarely within the purview of Art. 2219(2) providing for the payment of
moral damages in cases of quasi delict. On the theory that petitioners are
liable for breach of contract of carriage, the award of moral damages is
authorized by Art. 1764, in relation to Art. 2220, since Cabil's gross
negligence amounted to bad faith. 12 Amyline Antonio's testimony, as well as
the testimonies of her father and copassengers, fully establish the physical
suffering and mental anguish she endured as a result of the injuries caused
by petitioners' negligence.
The award of exemplary damages and attorney's fees was also properly
made. However, for the same reason that it was error for the appellate court
to increase the award of compensatory damages, we hold that it was also
error for it to increase the award of moral damages and reduce the award of
attorney's fees, inasmuch as private respondents, in whose favor the
awards were made, have not appealed. 13
As above stated, the decision of the Court of Appeals can be sustained
either on the theory of quasi delict or on that of breach of contract. The
question is whether, as the two courts below held, petitioners, who are the
owners and driver of the bus, may be made to respond jointly and severally
to private respondent. We hold that they may be. In Dangwa
Trans. Co. Inc. v. Court of Appeals, 14 on facts similar to those in this case,
this Court held the bus company and the driver jointly and severally liable
for damages for injuries suffered by a passenger. Again, inBachelor
Express, Inc. v. Court of
Appeals 15 a driver found negligent in failing to stop the bus in order to let off
passengers when a fellow passenger ran amuck, as a result of which the
passengers jumped out of the speeding bus and suffered injuries, was held
also jointly and severally liable with the bus company to the injured
passengers.
The same rule of liability was applied in situations where the negligence of
the driver of the bus on which plaintiff was riding concurred with the
negligence of a third party who was the driver of another vehicle, thus
causing an accident. In Anuran v. Buo, 16 Batangas Laguna Tayabas Bus
Co. v. Intermediate Appellate Court, 17 and Metro Manila Transit
Corporation v. Court of Appeals, 18 the bus company, its driver, the operator
of the other vehicle and the driver of the vehicle were jointly and severally
held liable to the injured passenger or the latters' heirs. The basis of this
allocation of liability was explained in Viluan v. Court of Appeals, 19 thus:

case of injury to a passenger due to the negligence of

the driver of the bus on which he was riding and of the
driver of another vehicle, 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 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 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 coplaintiffs 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 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;
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;
5) 25% of the recoverable amount as attorney's fees; and

Nor should it make any difference that the liability of

petitioner [bus owner] springs from contract while that
of respondents [owner and driver of other vehicle]
arises from quasi-delict. As early as 1913, we already
ruled inGutierrez vs. Gutierrez, 56 Phil. 177, that in

Republic of the Philippines

SUPREME COURT
Manila

6) costs of suit.
SO ORDERED.

ANTONIA MARANAN, plaintiff-appellant,

vs.
PASCUAL PEREZ, ET AL., defendants.
PASCUAL PEREZ, defendant appellant.

EN BANC
G.R. No. L-22272

June 26, 1967

Pedro Panganiban for plaintiff-appellant.

Magno T. Bueser for defendant-appellant.
BENGZON, J.P., J.:

Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab

owned and operated by Pascual Perez when he was stabbed and
killed by the driver, Simeon Valenzuela.
Valenzuela was prosecuted for homicide in the Court of First Instance
of Batangas. Found guilty, he was sentenced to suffer imprisonment
and to indemnify the heirs of the deceased in the sum of P6,000.
Appeal from said conviction was taken to the Court of
Appeals.1wph1.t
On December 6 1961, while appeal was pending in the Court of
Appeals, Antonia Maranan, Rogelio's mother, filed an action in the
Court of First Instance of Batangas to recover damages from Perez
and Valenzuela for the death of her son. Defendants asserted that the
deceased was killed in self-defense, since he first assaulted the driver
by stabbing him from behind. Defendant Perez further claimed that the
death was a caso fortuito for which the carrier was not liable.
The court a quo, after trial, found for the plaintiff and awarded her
P3,000 as damages against defendant Perez. The claim against
defendant Valenzuela was dismissed. From this ruling, both plaintiff
and defendant Perez appealed to this Court, the former asking for
more damages and the latter insisting on non-liability. Subsequently,
the Court of Appeals affirmed the judgment of conviction earlier
mentioned, during the pendency of the herein appeal, and on May 19,
1964, final judgment was entered therein. (Rollo, p. 33).
Defendant-appellant relies solely on the ruling enunciated in Gillaco v.
Manila Railroad Co., 97 Phil. 884, that the carrier is under no absolute
liability for assaults of its employees upon the passengers. The
attendant facts and controlling law of that case and the one at bar are
very different however. In the Gillaco case, the passenger was killed
outside the scope and the course of duty of the guilty employee. As
this Court there found:
x x x when the crime took place, the guard Devesa had no
duties to discharge in connection with the transportation of
the deceased from Calamba to Manila. The stipulation of
facts is clear that when Devesa shot and killed Gillaco,
Devesa was assigned to guard the Manila-San Fernando (La
Union) trains, and he was at Paco Station awaiting
transportation to Tutuban, the starting point of the train that
he was engaged to guard. In fact, his tour of duty was to
start at 9:00 two hours after the commission of the
crime. Devesa was therefore under no obligation to
safeguard the passengers of the Calamba-Manila train,
where the deceased was riding; and the killing of Gillaco
was not done in line of duty. The position of Devesa at the
time was that of another would be passenger, a stranger
also awaiting transportation, and not that of an employee
assigned to discharge any of the duties that the Railroad had
assumed by its contract with the deceased. As a result,
Devesa's assault can not be deemed in law a breach of
Gillaco's contract of transportation by a servant or employee
of the carrier. . . . (Emphasis supplied)
Now here, the killing was perpetrated by the driver of the very cab
transporting the passenger, in whose hands the carrier had entrusted
the duty of executing the contract of carriage. In other words, unlike
the Gillaco case, the killing of the passenger here took place in the
course of duty of the guilty employee and when the employee was
acting within the scope of his duties.
Moreover, the Gillaco case was decided under the provisions of the
Civil Code of 1889 which, unlike the present Civil Code, did not impose
upon common carriers absolute liability for the safety of passengers

against wilful assaults or negligent acts committed by their employees.

The death of the passenger in the Gillaco case was truly a fortuitous
event which exempted the carrier from liability. It is true that Art. 1105
of the old Civil Code on fortuitous events has been substantially
reproduced in Art. 1174 of the Civil Code of the Philippines but both
articles clearly remove from their exempting effect the case where the
law expressly provides for liability in spite of the occurrence of force
majeure. And herein significantly lies the statutory difference between
the old and present Civil Codes, in the backdrop of the factual situation
before Us, which further accounts for a different result in
theGillaco case. Unlike the old Civil Code, the new Civil Code of the
Philippines expressly makes the common carrier liable for intentional
assaults committed by its employees upon its passengers, by the
wording of Art. 1759 which categorically states that
Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the
former's employees, although such employees may have
acted beyond the scope of their authority or in violation of
the orders of the common carriers.
The Civil Code provisions on the subject of Common Carriers1 are new
and were taken from Anglo-American Law.2 There, the basis of the
carrier's liability for assaults on passengers committed by its drivers
rests either on (1) the doctrine of respondeat superior or (2) the
principle that it is the carrier's implied duty to transport the passenger
safely.3
Under the first, which is the minority view, the carrier is liable only
when the act of the employee is within the scope of his authority and
duty. It is not sufficient that the act be within the course of employment
only.4
Under the second view, upheld by the majority and also by the later
cases, it is enough that the assault happens within the course of the
employee's duty. It is no defense for the carrier that the act was done
in excess of authority or in disobedience of the carrier's orders.5 The
carrier's liability here is absolute in the sense that it practically secures
the passengers from assaults committed by its own employees.6
As can be gleaned from Art. 1759, the Civil Code of the Philippines
evidently follows the rule based on the second view. At least three very
cogent reasons underlie this rule. As explained in Texas Midland R.R.
v. Monroe, 110 Tex. 97, 216 S.W. 388, 389-390, and Haver v. Central
Railroad Co., 43 LRA 84, 85: (1) the special undertaking of the carrier
requires that it furnish its passenger that full measure of protection
afforded by the exercise of the high degree of care prescribed by the
law, inter alia from violence and insults at the hands of strangers and
other passengers, but above all, from the acts of the carrier's own
servants charged with the passenger's safety; (2) said liability of the
carrier for the servant's violation of duty to passengers, is the result of
the formers confiding in the servant's hands the performance of his
contract to safely transport the passenger, delegating therewith the
duty of protecting the passenger with the utmost care prescribed by
law; and (3) as between the carrier and the passenger, the former must
bear the risk of wrongful acts or negligence of the carrier's employees
against passengers, since it, and not the passengers, has power to
select and remove them.
Accordingly, it is the carrier's strict obligation to select its drivers and
similar employees with due regard not only to their technical
competence and physical ability, but also, no less important, to their
total personality, including their patterns of behavior, moral fibers, and
social attitude.

Applying this stringent norm to the facts in this case, therefore, the
lower court rightly adjudged the defendant carrier liable pursuant to Art.
1759 of the Civil Code. The dismissal of the claim against the
defendant driver was also correct. Plaintiff's action was predicated on
breach of contract of carriage7 and the cab driver was not a party
thereto. His civil liability is covered in the criminal case wherein he was
convicted by final judgment.

to the parents of the passenger killed to compensate for the mental

anguish they suffered. A claim therefor, having been properly made, it
becomes the court's duty to award moral damages.9 Plaintiff demands
P5,000 as moral damages; however, in the circumstances, We
consider P3,000 moral damages, in addition to the P6,000 damages
afore-stated, as sufficient. Interest upon such damages are also due to
plaintiff-appellant. 10

In connection with the award of damages, the court a quo granted only
P3,000 to plaintiff-appellant. This is the minimum compensatory
damages amount recoverable under Art. 1764 in connection with Art.
2206 of the Civil Code when a breach of contract results in the
passenger's death. As has been the policy followed by this Court, this
minimal award should be increased to P6,000. As to other alleged
actual damages, the lower court's finding that plaintiff's evidence
thereon was not convincing,8 should not be disturbed. Still, Arts. 2206
and 1764 awardmoral damages in addition to compensatory damages,

Wherefore, with the modification increasing the award of actual

damages in plaintiff's favor to P6,000, plus P3,000.00 moral damages,
with legal interest on both from the filing of the complaint on December
6, 1961 until the whole amount is paid, the judgment appealed from is
affirmed in all other respects. No costs. So ordered.

EN BANC

instance in which the appeal is evidently without merit, taken manifestly for
delay.

G.R. No. L-19161

April 29, 1966

MANILA RAILROAD COMPANY, Petitioner, vs. MACARIA

BALLESTEROS, TIMOTEO CAMAYO, JOSE REYES and JULIAN
MAIMBAN, JR., Respondents.
MAKALINTAL, J.: chanrobles virtual law library
In civil case No. 45968 of the Court of First Instance of Manila (Macaria
Ballesteros, Timoteo Camayo, Jose Reyes and Julian Maimban, Jr. vs.
Manila Railroad Company) the defendant was adjudged to pay damages in
the following amounts: P2,400 to Macaria Ballesteros; P4,000 to Timoteo
Camayo; P3,000 to Jose Reyes: and P2,000, plus P1,000 as attorney's
fees, to Julian Maimban, Jr.chanroblesvirtualawlibrary chanrobles virtual
law library
The defendant appealed from the judgment, but upon motion by the
plaintiffs, the trial court, by order dated October 14, 1961, dismissed the
appeal on the ground that it was "manifestly and palpably frivolous and
interposed ostensibly to delay the settlement of the just and reasonable
claims of the herein plaintiffs, which have been pending since 1958." The
defendant moved to reconsider, and upon denial of its motion instituted in
this Court the instant petition for mandamus to set aside the order of
dismissal and to order respondent court to give due course to the
appeal.chanroblesvirtualawlibrary chanrobles virtual law library
In filing the petition directly with this Court, petitioner evidently intended to
raise only questions of law in the appeal contemplated, since under Rule
41, section 15, "when erroneously a motion to dismiss an appeal is granted
or a record on appeal is disallowed by the trial court, a proper petition
for mandamus may be filed in the appellate court;" and under section 17(6)
of the Judiciary Act this Court may review on appeal only questions of law in
civil cases decided by inferior courts unless the value in controversy
exceeds P200,000.chanroblesvirtualawlibrary chanrobles virtual law library
The fact that an appeal is frivolous and interposed only for purposes of
delay has been recognized as a valid ground to deny issuance of the writ of
mandamus to compel the trial court to approve and certify the appeal. In De
la Cruz vs. Blanco and Quevedo, 73 Phil. 596, We held:
And where as in the instant case, the dismissal has been ordered by the
trial court, it would not be disturbed in the Appellate Court if the latter finds
the appeal to have been interposed ostensibly for delay. It has been held
that a frivolous appeal is one presenting no justiciable question or one so
readily cognizable as devoid of merit on the face of the record that there is
little, if any, prospect that it can over succeed. The instant case is one such

And in Paner vs. Yatco, 87 Phil. 271, We denied the writ prayed for and
held that "while strictly and legally speaking the petition may be granted, we
may, before acting thereon, inquire into the facts involved in order to
determine whether once the writ is granted and the case is brought up here
on appeal the appellant has any chance, even possibility, of having the
basic decision of the trial court set aside or modified; for if the appellant has
not that prospect or likelihood then the granting of the writ and the
consequent appeal would be futile and would mean only a waste of time to
the parties and to this Court." chanrobles virtual law library
The material facts, as found by respondent court in its decision, are as
follows: Private respondents here, plaintiffs below, were passengers on
petitioner's bus, the driver of which was Jose Anastacio. In Bayombong,
Nueva Vizcaya, Anastacio stopped the bus and got off to replace a
defective spark plug. While he was thus engaged, one Dionisio Abello, an
auditor assigned to defendant company by the General Auditing Office, took
the wheel and told the driver to sit somewhere else. With Abello driving, the
bus proceeded on its way, from time to time stopping to pick up
passengers. Anastacio tried twice to take the wheel back but Abello would
not relinquish it. Then, in the language of the trial court, "while the bus was
negotiating between Km. posts 328 and 329 (in Isabela) a freight truck ...
driven by Marcial Nocum ... bound for Manila, was also negotiating the
same place; when these two vehicles were about to meet at the bend of the
road Marcial Nocum, in trying to evade several holes on the right lane,
where his truck was running, swerved his truck towards the middle part of
the road and in so doing, the left front fender and left side of the freight
truck smashed the left side of the bus resulting in extensive damages to the
body of the bus and injuries to seventeen of its passengers, ... including the
plaintiffs herein." chanrobles virtual law library
In rejecting petitioner's contention that the negligence of Marcial Nocum
could not be imputed to it and relieved it from liability, the trial court found
that Dionisio Abello "was likewise reckless when he was driving the bus at
the rate of from 40 to 50 kilometers per hour on a bumpy road at the
moment of the collision." chanrobles virtual law library
Another defense put up by petitioner is that since Abello was not its
employee it should not be held responsible for his acts. This defense was
correctly overruled by the trial court, considering the provisions of Article
1763 of the Civil Code and section 48 (b) of the Motor Vehicle Law, which
respectively provide as follows:
Art. 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the wilfull acts or negligence of other passengers
or of strangers, if the common carrier's employees through the exercise of
the diligence of a good father of a family could have prevented or stopped
the act or omission.chanroblesvirtualawlibrary chanrobles virtual law library

Sec. 48(b). No professional chauffeur shall permit any unlicensed person to

drive the motor vehicle under his control, or permit a person, sitting beside
him or in any other part of the car, to interfere with him in the operation of
the motor vehicle, by allowing said person to take hold of the steering
wheel, or in any other manner take part in the manipulation or control of the
car.
It appears further, and so the trial court found, that there were negotiations
between the parties to compromise the case, as a result of which
respondents herein, plaintiffs below, considerably reduced their claims to
the amounts subsequently awarded in the judgment; that petitioner had in
fact settled the claims of the other passengers who were also injured in the
same accident and even the claim for damages filed in another action by
the owner of the freight truck; and that the Government Corporate Counsel
himself, who represents herein petitioner, rendered two separate opinions
(Op. No. 86, May 19, 1960; and Op. No. 99, series of 1961) wherein, after
analyzing the facts and the law applicable, he reached the conclusion that
the acts of the bus personnel, particularly "in allowing Mr. Abello to drive
despite two occasions when the bus stopped and the regular driver could
have taken over, constitute reckless imprudence and wanton injurious
conduct on the part of the MRR employees." On the basis of those opinions
the Government Corporate Counsel advised petitioner that the offer of the

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 108897 October 2, 1997

SARKIES TOURS PHILIPPINES, INC., petitioner,
vs.
HONORABLE COURT OF APPEALS (TENTH
DIVISION), DR. ELINO G. FORTADES, MARISOL A.
FORTADES and FATIMA MINERVA A.
FORTADES, respondents.

ROMERO, J.:
This petition for review is seeking the reversal of the
decision of the Court of Appeals in CA-G.R. CV No.
18979 promulgated on January 13, 1993, as well as
its resolution of February 19, 1993, denying
petitioner's motion for reconsideration for being a
mere rehash of the arguments raised in the
appellant's brief.
The case arose from a damage suit filed by private
respondents Elino, Marisol, and Fatima Minerva, all
surnamed Fortades, against petitioner for breach of
contract of carriage allegedly attended by bad faith.

claimants was reasonable and should be accepted. His advice, however,

was not favorably acted upon, petitioner obviously preferring to
litigate.chanroblesvirtualawlibrary chanrobles virtual law library
The issues proposed to be taken up on appeal, as set forth in the petition,
are whether or not Dionisio Abello acted with reckless negligence while
driving petitioner's bus at the time of the accident, and whether or not
petitioner may be held liable on account of such negligence, considering
that he was not its employee. These are no longer justiciable questions
which would justify our issuing the peremptory writ prayed for. The first is a
question of fact on which the affirmative finding of respondent court is not
reviewable by Us; and the second is one as to which there can be no
possible doubt in view of the provisions of the Civil Code and of the Motor
Vehicle Law hereinbefore cited. There would be no point in giving the
appeal due course.chanroblesvirtualawlibrary chanrobles virtual law library
The writ prayed for is denied, with costs against petitioner.

On August 31, 1984, Fatima boarded petitioner's De

Luxe Bus No. 5 in Manila on her way to Legazpi City.
Her brother Raul helped her load three pieces of
luggage containing all of her optometry review books,
materials and equipment, trial lenses, trial contact
lenses, passport and visa, as well as her mother
Marisol's U.S. immigration (green) card, among other
important documents and personal belongings. Her
belongings were kept in the baggage compartment of
the bus, but during a stopover at Daet, it was
discovered that only one bag remained in the open
compartment. The others, including Fatima's things,
were missing and might have dropped along the way.
Some of the passengers suggested retracing the
route of the bus to try to recover the lost items, but the
driver ignored them and proceeded to Legazpi City.
Fatima immediately reported the loss to her mother
who, in turn, went to petitioner's office in Legazpi City
and later at its head office in Manila. Petitioner,
however, merely offered her P1,000.00 for each piece
of luggage lost, which she turned down. After
returning to Bicol, disappointed but not defeated,
mother and daughter asked assistance from the radio
stations and even from Philtranco bus drivers who
plied the same route on August 31st. The effort paid
off when one of Fatima's bags was recovered. Marisol
further reported the incident to the National Bureau of
Investigation's field office in Legazpi City and to the
local police.
On September 20, 1984, respondents, through
counsel, formally demanded satisfaction of their
complaint from petitioner. In a letter dated October 1,

1984, the latter apologized for the delay and said that
"(a) team has been sent out to Bicol for the purpose of
recovering or at least getting the full detail" 1 of the
incident.
After more than nine months of fruitless waiting,
respondents decided to file the case below to recover
the value of the remaining lost items, as well as moral
and exemplary damages, attorney's fees and
expenses of litigation. They claimed that the loss was
due to petitioner's failure to observe extraordinary
diligence in the care of Fatima's luggage and that
petitioner dealt with them in bad faith from the start.
Petitioner, on the other hand, disowned any liability for
the loss on the ground that Fatima allegedly did not
declare any excess baggage upon boarding its bus.
On June 15, 1988, after trial on the merits, the court a
quo adjudged the case in favor of respondents, viz.:
PREMISES CONSIDERED, judgment is
hereby rendered in favor of the plaintiffs
(herein respondents) and against the herein
defendant Sarkies Tours Philippines, Inc.,
ordering the latter to pay to the former the
following sums of money, to wit:
1. The sum of P30,000.00 equivalent to the
value of the personal belongings of plaintiff
Fatima Minerva Fortades, etc. less the value
of one luggage recovered;
2. The sum of P90,000.00 for the
transportation expenses, as well as moral
damages;
3. The sum of P10,000.00 by way of
exemplary damages;
4. The sum of P5,000.00 as attorney's fees;
and
5. The sum of P5,000.00 as litigation
expenses or a total of One Hundred Forty
Thousand (P140,000.00) Pesos.
to be paid by herein defendant Sarkies Tours
Philippines, Inc. to the herein plaintiffs within
30 days from receipt of this Decision.
SO ORDERED.

On appeal, the appellate court affirmed the trial

court's judgment, but deleted the award of moral and
exemplary damages. Thus,
WHEREFORE, premises considered, except
as above modified, fixing the award for
transportation expenses at P30,000.00 and
the deletion of the award for moral and
exemplary damages, the decision appealed
from is AFFIRMED, with costs against
defendant-appellant.
SO ORDERED.
Its motion for reconsideration was likewise rejected by
the Court of Appeals, so petitioner elevated its case to
this Court for a review.
After a careful scrutiny of the records of this case, we
are convinced that the trial and appellate courts
resolved the issues judiciously based on the evidence
at hand.
Petitioner claims that Fatima did not bring any piece
of luggage with her, and even if she did, none was
declared at the start of the trip. The documentary and
testimonial evidence presented at the trial, however,
established that Fatima indeed boarded petitioner's
De Luxe Bus No. 5 in the evening of August 31, 1984,
and she brought three pieces of luggage with her, as
testified by her brother Raul, 2 who helped her pack
her things and load them on said bus. One of the
bags was even recovered by a Philtranco bus driver.
In its letter dated October 1, 1984, petitioner tacitly
admitted its liability by apologizing to respondents and
assuring them that efforts were being made to recover
the lost items.
The records also reveal that respondents went to
great lengths just to salvage their loss. The incident
was reported to the police, the NBI, and the regional
and head offices of petitioner. Marisol even sought the
assistance of Philtranco bus drivers and the radio
stations. To expedite the replacement of her mother's
lost U.S. immigration documents, Fatima also had to
execute an affidavit of loss. 3 Clearly, they would not
have gone through all that trouble in pursuit of a
fancied loss.
Fatima was not the only one who lost her luggage.
Apparently, other passengers had suffered a similar

fate: Dr. Lita Samarista testified that petitioner offered

her P1,000.00 for her lost baggage and she accepted
it; 4 Carleen Carullo-Magno lost her chemical
engineering review materials, while her brother lost
abaca products he was transporting to Bicol. 5
Petitioner's receipt of Fatima's personal luggage
having been thus established, it must now be
determined if, as a common carrier, it is responsible
for their loss. Under the Civil Code, "(c)ommon
carriers, from the nature of their business and for
reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods
. . . transported by them," 6 and this liability "lasts from
the time the goods are unconditionally placed in the
possession of, and received by the carrier for
transportation until the same are delivered, actually or
constructively, by the carrier to . . . the person who
has a right to receive them," 7 unless the loss is due to
any of the excepted causes under Article 1734
thereof. 8
The cause of the loss in the case at bar was
petitioner's negligence in not ensuring that the doors
of the baggage compartment of its bus were securely
fastened. As a result of this lack of care, almost all of
the luggage was lost, to the prejudice of the paying
passengers. As the Court of Appeals correctly
observed:
. . . . Where the common carrier accepted its
passenger's baggage for transportation and
even had it placed in the vehicle by its own
employee, its failure to collect the freight
charge is the common carrier's own lookout. It
is responsible for the consequent loss of the
baggage. In the instant case, defendant
appellant's employee even helped Fatima
Minerva Fortades and her brother load the
luggages/baggages in the bus' baggage
FIRST DIVISION
[G.R. No. 104685. March 14, 1996]
SABENA

BELGIAN WORLD AIRLINES, petitioner, vs. HON.

COURT OF APPEALS and MA. PAULA SAN
AGUSTIN, respondents.
DECISION

VITUG, J.:

compartment, without asking that they be

weighed, declared, receipted or paid for (TSN,
August 4, 1986, pp. 29, 34, 54, 57, 70;
December 23, 1987, p. 35). Neither was this
required of the other passengers (TSN,
August 4, 1986, p. 104; February 5, 1988; p.
13).
Finally, petitioner questions the award of actual
damages to respondents. On this point, we likewise
agree with the trial and appellate courts' conclusions.
There is no dispute that of the three pieces of luggage
of Fatima, only one was recovered. The other two
contained optometry books, materials, equipment, as
well as vital documents and personal belongings.
Respondents had to shuttle between Bicol and Manila
in their efforts to be compensated for the loss. During
the trial, Fatima and Marisol had to travel from the
United States just to be able to testify. Expenses were
also incurred in reconstituting their lost documents.
Under these circumstances, the Court agrees with the
Court of Appeals in awarding P30,000.00 for the lost
items and P30,000.00 for the transportation
expenses, but disagrees with the deletion of the
award of moral and exemplary damages which, in
view of the foregoing proven facts, with negligence
and bad faith on the fault of petitioner having been
duly established, should be granted to respondents in
the amount of P20,000.00 and P5,000.00,
respectively.
WHEREFORE, the assailed decision of the Court of
Appeals dated January 13, 1993, and its resolution
dated February 19, 1993, are hereby AFFIRMED with
the MODIFICATION that petitioner is ordered to pay
respondents an additional P20,000.00 as moral
damages and P5,000.00 as exemplary damages.
Costs against petitioner.
SO ORDERED.
The appeal before the Court involves the issue of an airlines
liability for lost luggage. The petition for review assails the decision of
the Court Appeals,[1] dated 27 February 1992, affirming an award of
damages made by the trial court in a complaint filed by private
respondent against petitioner.
The factual background of the case, narrated by the trial court
and reproduced at length by the appellate court, is hereunder quoted:
On August 21, 1987, plaintiff was a passenger on board Flight SN 284 of
defendant airline originating from Casablanca to Brussels, Belgium on her
way back to Manila. Plaintiff checked in her luggage which contained her
valuables, namely: jewelries valued at $2,350.00; clothes $1,500.00;

shoes/bag $150; accessories $75; luggage itself $10.00; or a total of

$4,265.00, for which she was issued Tag No. 71423. She stayed overnight in
Brussels and her luggage was left on board Flight SN 284.

(b) x x x P30,000.00 as moral damages;

Plaintiff arrived at Manila International Airport on September 2, 1987 and

immediately submitted her Tag No. 71423 to facilitate the release of her
luggage hut the luggage was missing. She was advised to accomplish and
submit a property Irregularity Report which she submitted and filed on the
same day.

(d) x x x P10,000.00 attorneys fees; and

She followed up her claim on September 14, 1987 but the luggage remained
to be missing.
On September 15, 1987, she filed her formal complaint with the office of
Ferge Massed, defendants Local Manager, demanding immediate attention
(Exh. A).
On September 30, 1987, on the occasion of plaintiffs following up of her
luggage claim, she was furnished copies of defendants telexes with an
information that the Brussels Office of defendant found the luggage and that
they have broken the locks for identification (Exhibit B). Plaintiff was
assured by the defendant that it has notified its Manila Office that the luggage
will be shipped to Manila on October 27, 1987. But unfortunately plaintiff
was informed that the luggage was lost for the second time (Exhibits C and
C-1).
At the time of the filling of the complaint, the luggage with its content has
not been found.
Plaintiff demanded from the defendant the money value of the luggage and
its contents amounting to $4,265.00 or its exchange value, but defendant
refused to settle the claim.
Defendant asserts in its Answer and its evidence tend to show that while it
admits that the plaintiff was a passenger on board Flight No. SN 284 with a
piece of checked in luggage bearing Tag No. 71423, the loss of the luggage
was due to plaintiffs sole if not contributory negligence; that she did not
declare the valuable items in her checked-in luggage at the flight counter
when she checked in for her flight from Casablanca to Brussels so that either
the representative of the defendant at the counter would have advised her to
secure an insurance on the alleged valuable items and required her to pay
additional charges, or would have refused acceptance of her baggage as
required by the generally accepted practices of international carriers; that
Section 9(a), Article IX of General Conditions of carriage requiring
passengers to collect their checked baggage at the place of stopover, plaintiff
neglected to claim her baggage at the Brussels Airport; that plaintiff should
have retrieved her undeclared valuables from her baggage at the Brussels
Airport since her flight from Brussels to Manila will still have to visit for
confirmation inasmuch as only her flight from Casablanca to Brussels was
confirmed; that defendant incorporated in all Sabena Plane Tickets, including
Sabena Ticket No. 082422-72502241 issued to plaintiff in Manila on August
21, 1987, a warning that Items of value should be carried on your person and
that some carriers assume no liability for fragile, valuable or perishable
articles and that further information may he obtained from the carrier for
guidance; that granting without conceding that defendant is liable, its liability
is limited only to US $20.00 per kilo due to plaintiffs failure to declare a
higher value on the contents of her checked in luggage and pay additional
charges thereon.[2]
The trial court rendered judgment ordering petitioner Sabena
Belgian World Airlines to pay private respondent Ma. Paula San
Agustin
(a) x x x US$4,265.00 or its legal exchange in Philippine pesos;

(c) x x x P10,000.00 as exemplary damages;

(e) (t)he costs of the suit.[3]

Sabena appealed the decision of the Regional Trial Court to the
Court of Appeals. The appellate court, in its decision of 27 February
1992, affirmed in toto the trial courts judgment.
Petitioner airline company, in contending that the alleged
negligence of private respondent should be considered the primary
cause for the loss of her luggage, avers that, despite her awareness
that the flight ticket had been confirmed only for Casablanca and
Brussels, and that her flight from Brussels to Manila had yet to be
confirmed, she did not retrieve the luggage upon arrival in
Brussels. Petitioner insists that private respondent, being a seasoned
international traveler, must have likewise been familiar with the
standard provisions contained in her flight ticket that items of value are
required to be hand-carried by the passenger and that the liability of
the airline or loss, delay or damage to baggage would be limited, in
any event, to only US$20.00 per kilo unless a higher value is declared
in advance and corresponding additional charges are paid thereon. At
the Casablanca International Airport, private respondent, in checking in
her luggage, evidently did not declare its contents or value. Petitioner
cites Section 5(c), Article IX, of the General Conditions of Carriage,
signed at Warsaw, Poland, on 02 October 1929, as amended by the
Hague Protocol of 1955, generally observed by International carriers,
stating, among other things, that:
Passengers shall not include in his checked baggage, and the carrier may
refuse to carry as checked baggage, fragile or perishable articles, money,
jewelry, precious metals, negotiable papers, securities or other valuables. [4]
Fault or negligence consists in the omission of that diligence
which is demanded by the nature of an obligation and corresponds
with the circumstances of the person, of the time, and of the
place. When the source of an obligation is derived from a contract, the
mere breach or non-fulfillment of the prestation gives rise to the
presumption of fault on the part of the obligor. This rule is not different
in the case of common carriers in the carriage of goods which, indeed,
are bound to observe not just the due diligence of a good father of a
family but that of extraordinary care in the vigilance over the
goods. The appellate court has aptly observed:
x x x Art. 1733 of the [Civil] Code provides that from the very nature of their
business and by reasons of public policy, common carriers are bound to
observe extraordinary diligence in the vigilance over the goods transported by
them. This extraordinary responsibility, according to Art. 1736, lasts from the
time the goods are unconditionally placed in the possession of and received by
the carrier until they are delivered actually or constructively to the consignee
or person who has the right to receive them. Art. 1737 states that the common
carriers duty to observe extraordinary diligence in the vigilance over the
goods transported by them remains in full force and effect even when they
are temporarily unloaded or stored in transit. And Art. 1735 establishes the
presumption that if the goods are lost, destroyed or deteriorated, common
carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they had observed extraordinary diligence as required in
Article 1733.
The only exceptions to the foregoing extraordinary responsibility of the
common carrier is when the loss, destruction, or deterioration of the goods is
due to any of the following causes:

(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;
(5) Order or act of competent public authority.
Not one of the above excepted causes obtains in this case.[5]
The above rules remain basically unchanged even when the
contract is breached by tort[6] although noncontradictory principles on
quasi-delict may then be assimilated as also forming part of the
governing law. Petitioner is not thus entirely off track when it has
likewise raised in its defense the tort doctrine of proximate
cause. Unfortunately for petitioner, however, the doctrine cannot, in
this particular instance, support its case. Proximate cause is that
which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces injury and without which the result would
not have occurred. The exemplification by the Court in one case [7] is
simple and explicit; viz:
(T)he proximate legal cause is that acting first and producing the injury,
either immediately or by setting other events in motion, all constituting a
natural and Continuous chain of events, each having a close causal
Connection with its immediate predecessor, the final event in the chain
immediately affecting the injury as a natural and probable result of the cause
which first acted, under such circumstances that the person responsible for the
first event should, as an ordinarily prudent, and intelligent person, have
reasonable ground to expect at the moment of his act or default that an injury
to some person might probably result therefrom.
It remained undisputed that private respondents luggage was
lost while it was in the custody of petitioner. It was supposed to arrive
on the same flight that private respondent took in returning to Manila
on 02 September 1987. When she discovered that the luggage was
missing, she promptly accomplished and filed a Property Irregularity
Report. She followed up her claim on 14 September 1987, and filed,
on the following day, a formal letter-complaint with petitioner. She felt
relieved when, on 23 October 1987, she was advised that her luggage
had finally been found, with its contents intact when examined, and
that she could expect it to arrive on 27 October 1987. She then waited
anxiously only to be told later that her luggage had been lost for the
second time. Thus, the appellate court, given all the facts before it,
sustained the trial court in finding petitioner ultimately guilty of gross
negligence in the handling of private respondents luggage. The loss
of said baggage not only once by twice, said the appellate court,
underscores the wanton negligence and lack of care on the part of
the carrier.
The above findings, which certainly cannot be said to be without basis,
foreclose whatever rights petitioner might have had to the possible limitation
of liabilities enjoyed by international air carriers under the Warsaw
Convention (Convention for the Unification of Certain Rules Relating to
International Carriage by Air, as amended by the Hague Protocol of 1955, the

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

Montreal Agreement of 1966, the Guatemala Protocol of 1971 and the

Montreal Protocols of 1975). In Alitalia vs. Intermediate Appellate Court,
[8]
now Chief Justice Andres R. Narvasa, speaking for the Court, has explained
it well; he said:
The Warsaw Convention however denies to the carrier availment of the
provisions which exclude or limit his liability, if the damage is caused by his
wilful misconduct or by such default on his part as, in accordance with the law
of the court seized of the case, is considered to be equivalent to wilful
misconduct, or if the damage is (similarly) caused x x x by any agent of the
carrier acting within the scope of his employment. The Hague Protocol
amended the Warsaw Convention by removing the provision that if the airline
took all necessary steps to avoid the damage, it could exculpate itself
completely, and declaring the stated limits of liability not applicable if it is
proved that the damage resulted from an act or omission of the carrier, its
servants or agents, done with intent to cause damage or recklessly and with
knowledge that damage would probably result. The same deletion was
effected by the Montreal Agreement of 1966, with the result that a passenger
could recover unlimited damages upon proof of wilful misconduct.
The Convention does not thus operate as an exclusive enumeration of the
instances of an airlines liability, or as an absolute limit of the extent of that
liability. Such a proposition is not borne out by the language of the
Convention, as this Court has now, and at an earlier time, pointed
out. Moreover, slight reflection readily leads to the conclusion that it should
be deemed a limit of liability only in those cases where the cause of the death
or injury to person, or destruction, loss or damage to property or delay in its
transport is not attributable to or attended by any wilful misconduct, bad faith,
recklessness or otherwise improper conduct on the part of any official or
employee for which the carrier is responsible, and there is otherwise no
special or extraordinary form of resulting injury. The Contentions provisions,
in short, do not regulate or exclude liability for other breaches of contract by
the carrier or misconduct of its officers and employees, or for some particular
or exceptional type of damage. Otherwise, an air carrier would be exempt
from any liability for damages in the event of its absolute refusal, in bad faith,
to comply with a contract of carriage, which is absurd. Nor may it for a
moment be supposed that if a member of the aircraft complement should
inflict some physical injury on a passenger, or maliciously destroy or damage
the latters property, the Convention might successfully be pleaded as the sole
gauge to determine the carriers liability to the passenger. Neither may the
Convention be invoked to justify the disregard of some extraordinary sort of
damage resulting to a passenger and preclude recovery therefor beyond the
limits set by said Convention. It is in this sense that the Convention has been
applied, or ignored, depending on the peculiar facts presented by each case.
The Court thus sees no error in the preponderant application to
the instant case by the appellate court, as well as by the trial court, of
the usual rules on the extent of recoverable damages beyond the
Warsaw limitations. Under domestic law and jurisprudence (the
Philippines being the country of destination), the attendance of gross
negligence (given the equivalent of fraud or bad faith) holds the
common carrier liable for all damages which can be reasonably
attributed, although unforeseen, to the non-performance of the
obligation,[9]including moral and exemplary damages.[10]
WHEREFORE, the decision appealed from is AFFIRMED. Costs
against petitioner.
SO ORDERED.
G.R. No. L-9671

August 23, 1957

CESAR L. ISAAC, plaintiff-appellant,

vs.
A. L. AMMEN TRANSPORTATION CO., INC., defendant-appellee.

Angel S. Gamboa for appellant.

Manuel O. Chan for appellee.
BAUTISTA ANGELO, J.:
A. L. Ammen Transportation Co., Inc., hereinafter referred to as
defendant, is a corporation engaged in the business of transporting
passengers by land for compensation in the Bicol provinces and one of
the lines it operates is the one connecting Legaspi City, Albay with
Naga City, Camarines Sur. One of the buses which defendant was
operating is Bus No. 31. On May 31, 1951, plaintiff boarded said bus
as a passenger paying the required fare from Ligao, Albay bound for
Pili, Camarines Sur, but before reaching his destination, the bus
collided with a motor vehicle of the pick-up type coming from the
opposite direction, as a result of which plaintiff's left arm was
completely severed and the severed portion fell inside the bus. Plaintiff
was rushed to a hospital in Iriga, Camarines Sur where he was given
blood transfusion to save his life. After four days, he was transferred to
another hospital in Tabaco, Albay, where he under went treatment for
three months. He was moved later to the Orthopedic Hospital where he
was operated on and stayed there for another two months. For these
services, he incurred expenses amounting to P623.40, excluding
medical fees which were paid by defendant.
As an aftermath, plaintiff brought this action against defendants for
damages alleging that the collision which resulted in the loss of his left
arm was mainly due to the gross incompetence and recklessness of
the driver of the bus operated by defendant and that defendant
incurred in culpa contractual arising from its non-compliance with its
obligation to transport plaintiff safely to his, destination. Plaintiff prays
for judgment against defendant as follows: (1) P5,000 as expenses for
his medical treatment, and P3,000 as the cost of an artificial arm, or a
total of P8,000; (2) P6,000 representing loss of earning; (3) P75,000
for diminution of his earning capacity; (4) P50,000 as moral damages;
and (5) P10,000 as attorneys' fees and costs of suit.
Defendant set up as special defense that the injury suffered by plaintiff
was due entirely to the fault or negligence of the driver of the pick-up
car which collided with the bus driven by its driver and to the
contributory negligence of plaintiff himself. Defendant further claims
that the accident which resulted in the injury of plaintiff is one which
defendant could not foresee or, though foreseen, was inevitable.
The after trial found that the collision occurred due to the negligence of
the driver of the pick-up car and not to that of the driver of the bus it
appearing that the latter did everything he could to avoid the same but
that notwithstanding his efforts, he was not able to avoid it. As a
consequence, the court dismissed complaint, with costs against
plaintiff. This is an appeal from said decision.
It appears that plaintiff boarded a bus of defendant as paying
passenger from Ligao, Albay, bound for Pili, Camarines Sur, but before
reaching his destination, the bus collided with a pick-up car which was
coming from the opposite direction and, as a, result, his left arm was
completely severed and fell inside the back part of the bus. Having this
background in view, and considering that plaintiff chose to hold
defendant liable on its contractual obligation to carry him safely to his
place of destination, it becomes important to determine the nature and
extent of the liability of a common carrier to a passenger in the light of
the law applicable in this jurisdiction.
In this connection, appellant invokes the rule that, "when an action is
based on a contract of carriage, as in this case, all that is necessary to
sustain recovery is proof of the existence of the contract of the breach
thereof by act or omission", and in support thereof, he cites several
Philippine cases.1 With the ruling in mind, appellant seems to imply

that once the contract of carriage is established and there is proof that
the same was broken by failure of the carrier to transport the
passenger safely to his destination, the liability of the former attaches.
On the other hand, appellee claims that is a wrong presentation of the
rule. It claims that the decisions of this Court in the cases cited do not
warrant the construction sought to be placed upon, them by appellant
for a mere perusal thereof would show that the liability of the carrier
was predicated not upon mere breach of its contract of carriage but
upon the finding that its negligence was found to be the direct or
proximate cause of the injury complained of. Thus, appellee contends
that "if there is no negligence on the part of the common carrier but
that the accident resulting in injuries is due to causes which are
inevitable and which could not have been avoided or anticipated
notwithstanding the exercise of that high degree of care and skill which
the carrier is bound to exercise for the safety of his passengers",
neither the common carrier nor the driver is liable therefor.
We believe that the law concerning the liability of a common carrier
has now suffered a substantial modification in view of the innovations
introduced by the new Civil Code. These innovations are the ones
embodied in Articles 1733, 1755 and 1756 in so far as the relation
between a common carrier and its passengers is concerned, which, for
ready reference, we quote hereunder:
ART. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extra ordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by
them according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods
is further expressed in articles 1734, 1735, and 1745, Nos.
5, 6, and 7, while the extraordinary diligence for the safety of
the passengers is further set forth in articles 1755 and 1756.
ART. 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.
ART. 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.
The Code Commission, in justifying this extraordinary diligence
required of a common carrier, says the following:
A common carrier is bound to carry the passengers safely as
far as human care and foresight can provide, using the
utmost deligence of very cautions persons, with due regard
for all circumstances. This extraordinary diligence required of
common carriers is calculated to protect the passengers
from the tragic mishaps that frequently occur in connection
with rapid modern transportation. This high standard of care
is imperatively demanded by the precariousness of human
life and by the consideration that every person must in every
way be safeguarded against all injury. (Report of the Code
Commission, pp. 35-36)" (Padilla, Civil Code of the
Philippines, Vol. IV, 1956 ed., p. 197).
From the above legal provisions, we can make the following
restatement of the principles governing the liability of a common
carrier: (1) the liability of a carrier is contractual and arises upon

breach of its obligation. There is breach if it fails to exert extraordinary

diligence according to all circumstances of each case; (2) a carrier is
obliged to carry its passenger with the utmost diligence of a very
cautious person, having due regard for all the circumstances; (3) a
carrier is presumed to be at fault or to have acted negligently in case of
death of, or injury to, passengers, it being its duty to prove that it
exercised extraordinary diligence; and (4) the carrier is not an insurer
against all risks of travel.
The question that now arises is: Has defendant observed extraordinary
diligence or the utmost diligence of every cautious person, having due
regard for all circumstances, in avoiding the collision which resulted in
the injury caused to the plaintiff?
After examining the evidence in connection with how the collision
occurred, the lower court made the following finding:
Hemos examinado muy detenidamente las pruebas
presentadas en la vista, principalmente, las declaraciones
que hemos acotado arriba, y hernos Ilegado a la conclusion
de que el demandado ha hecho, todo cuanto estuviere de su
parte para evitar el accidente, pero sin embargo, no ha
podido evitarlo.
EI hecho de que el demandado, antes del choque, tuvo que
hacer pasar su truck encima de los montones de grava que
estaban depositados en la orilla del camino, sin que haya
ido mas alla, por el grave riesgo que corrian las vidas de sus
pasajeros, es prueba concluyente de lo que tenemos dicho,
a saber: que el cuanto esuba de su parte, para evitar el
accidente, sin que haya podidoevitardo, por estar fuera de
su control.
The evidence would appear to support the above finding. Thus, it
appears that Bus No. 31, immediately prior to the collision, was
running at a moderate speed because it had just stopped at the school
zone of Matacong, Polangui, Albay. The pick-up car was at full speed
and was running outside of its proper lane. The driver of the bus, upon
seeing the manner in which the pick-up was then running, swerved the
bus to the very extreme right of the road until its front and rear wheels
have gone over the pile of stones or gravel situated on the rampart of
the road. Said driver could not move the bus farther right and run over
a greater portion of the pile, the peak of which was about 3 feet high,
without endangering the safety of his passengers. And notwithstanding
all these efforts, the rear left side of the bus was hit by the pick-up car.
Of course, this finding is disputed by appellant who cannot see eye to
eye with the evidence for the appellee and insists that the collision took
place because the driver of the bus was going at a fast speed. He
contends that, having seen that a car was coming from the opposite
direction at a distance which allows the use of moderate care and
prudence to avoid an accident, and knowing that on the side of the
road along which he was going there was a pile of gravel, the driver of
the bus should have stopped and waited for the vehicle from the
opposite direction to pass, and should have proceeded only after the
other vehicle had passed. In other words, according to appellant, the
act of the driver of the bus in squeezing his way through of the bus in
squeezing his way through between the oncoming pick-up and the pile
of gravel under the circumstances was considered negligent.
But this matter is one of credibility and evaluation of the evidence. This
is evidence. This is the function of the trial court. The trial court has
already spoken on this matter as we have pointed out above. This is
also a matter of appreciation of the situation on the part of the driver.

While the position taken by appellant appeals more to the sense of

caution that one should observe in a given situation to avoid an
accident or mishap, such however can not always be expected from
one who is placed suddenly in a predicament where he is not given
enough time to take the course of action as he should under ordinary
circumstances. One who is placed in such a predicament cannot
exercise such coolness or accuracy of judgment as is required of him
under ordinary circumstances and he cannot therefore be expected to
observe the same judgment, care and precaution as in the latter. For
this reason, authorities abound where failure to observe the same
degree of care that as ordinary prudent man would exercise under
ordinary circumstances when confronted with a sadden emergency
was held to be warranted and a justification to exempt the carrier from
liability. Thus, it was held that "where a carrier's employee is
confronted with a sudden emergency, the fact that he is obliged to act
quickly and without a chance for deliberation must be taken into
account, and he is held to the some degree of care that he would
otherwise be required to exercise in the absence of such emergency
but must exercise only such care as any ordinary prudent person
would exercise under like circumstances and conditions, and the
failure on his part to exercise the best judgement the case renders
possible does not establish lack of care and skill on his part which
renders the company, liable. . . . (13 C. J. S., 1412; 10 C. J.,970).
Considering all the circumstances, we are persuaded to conclude that
the driver of the bus has done what a prudent man could have done to
avoid the collision and in our opinion this relieves appellee from
legibility under our law.
A circumstances which miliates against the stand of appellant is the
fact borne out by the evidence that when he boarded the bus in
question, he seated himself on the left side thereof resting his left arm
on the window sill but with his left elbow outside the window, this being
his position in the bus when the collision took place. It is for this reason
that the collision resulted in the severance of said left arm from the
body of appellant thus doing him a great damage. It is therefore
apparent that appellant is guilty of contributory negligence. Had he not
placed his left arm on the window sill with a portion thereof protruding
outside, perhaps the injury would have been avoided as is the case
with the other passenger. It is to be noted that appellant was the only
victim of the collision.
It is true that such contributory negligence cannot relieve appellee of its
liability but will only entitle it to a reduction of the amount of damage
caused (Article 1762, new Civil Code), but this is a circumstance which
further militates against the position taken by appellant in this case.
It is the prevailing rule that it is negligence per se for a
passenger on a railroad voluntarily or inadvertently to
protrude his arm, hand, elbow, or any other part of his body
through the window of a moving car beyond the outer edge
of the window or outer surface of the car, so as to come in
contact with objects or obstacles near the track, and that no
recovery can be had for an injury which but for such
negligence would not have been sustained. (10 C. J. 1139)
Plaintiff, (passenger) while riding on an interurban car, to flick
the ashes, from his cigar, thrust his hand over the guard rail
a sufficient distance beyond the side line of the car to bring it
in contact with the trunk of a tree standing beside the track;
the force of the blow breaking his wrist. Held, that he was
guilty of contributory negligence as a matter of law. (Malakia
vs. Rhode Island Co., 89 A., 337.)
Wherefore, the decision appealed from is affirmed, with cost against
appellant.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 125138 March 2, 1999

NICHOLAS Y. CERVANTES, petitioner,
vs.
COURT OF APPEALS AND THE PHILIPPINE AIR LINES,
INC., respondent.

of petitioner's ticket; (2) Whether or not the defense of lack of authority

was correctly ruled upon; and (3) Whether or not the denial of the
award for damages was proper.
To rule on the first issue, there is a need to quote the findings below.
As a rule, conclusions and findings of fact arrived at by the trial court
are entitled to great weight on appeal and should not be disturbed
unless for strong and cogent reasons. 4
The facts of the case as found by the lower court 5 are, as follows:
The plane ticket itself (Exhibit A for plaintiff; Exhibit
1 for defendant) provides that it is not valid after
March 27, 1990. (Exhibit 1-F). It is also stipulated
in paragraph 8 of the Conditions of Contract
(Exhibit 1, page 2) as follows:
8. This ticket is good for
carriage for one year from
date of issue, except as
otherwise provided in this
ticket, in carrier's tariffs,
conditions of carriage, or
related regulations. The fare
for carriage hereunder is
subject to change prior to
commencement of carriage.
Carrier may refuse
transportation if the applicable
fare has not been paid. 6

PURISMA, J.:
This Petition for Review on certiorari assails the 25 July 1995 decision
of the Court of Appeals 1 in CA GR CV No. 41407, entitled "Nicholas Y.
Cervantes vs. Philippine Air Lines Inc.", affirming in toto the judgment
of the trial court dismissing petitioner's complaint for damages.
On March 27, 1989, the private respondent, Philippines Air Lines, Inc.
(PAL), issued to the herein petitioner, Nicholas Cervantes (Cervantes),
a round trip plane ticket for Manila-Honolulu-Los Angeles-HonoluluManila, which ticket expressly provided an expiry of date of one year
from issuance, i.e., until March 27, 1990. The issuance of the said
plane ticket was in compliance with a Compromise Agreement entered
into between the contending parties in two previous suits, docketed as
Civil Case Nos. 3392 and 3451 before the Regional Trial Court in
Surigao City. 2
On March 23, 1990, four days before the expiry date of subject ticket,
the petitioner used it. Upon his arrival in Los Angeles on the same day,
he immediately booked his Los Angeles-Manila return ticket with the
PAL office, and it was confirmed for the April 2, 1990 flight.
Upon learning that the same PAL plane would make a stop-over in San
Francisco, and considering that he would be there on April 2, 1990,
petitioner made arrangements with PAL for him to board the flight In
San Francisco instead of boarding in Las Angeles.
On April 2, 1990, when the petitioner checked in at the PAL counter in
San Francisco, he was not allowed to board. The PAL personnel
concerned marked the following notation on his ticket: "TICKET NOT
ACCEPTED DUE EXPIRATION OF VALIDITY."
Aggrieved, petitioner Cervantes filed a Complaint for Damages, for
breach of contract of carriage docketed as Civil Case No. 3807 before
Branch 32 of the Regional Trial Court of Surigao del Norte in Surigao
City. But the said complaint was dismissed for lack of merit. 3
On September 20, 1993, petitioner interposed an appeal to the Court
of Appeals, which came out with a Decision, on July 25, 1995,
upholding the dismissal of the case.
On May 22, 1996, petitioner came to this Court via the Petition for
Review under consideration.
The issues raised for resolution are: (1) Whether or not the act of the
PAL agents in confirming subject ticket extended the period of validity

The question on the validity of subject ticket can be resolved in light of

the ruling in the case of Lufthansa vs. Court of Appeals. 7 In the said
case, the Tolentinos were issued first class tickets on April 3, 1982,
which will be valid until April 10, 1983. On June 10, 1982, they
changed their accommodations to economy class but the replacement
tickets still contained the same restriction. On May 7, 1983, Tolentino
requested that subject tickets be extended, which request was refused
by the petitioner on the ground that the said tickets had already
expired. The non-extension of their tickets prompted the Tolentinos to
bring a complaint for breach of contract of carriage against the
petitioner. In ruling against the award of damages, the Court held that
the "ticket constitute the contract between the parties. It is axiomatic
that when the terms are clear and leave no doubt as to the intention of
the contracting parties, contracts are to be interpreted according to
their literal meaning."
In his effort to evade this inevitable conclusion, petitioner theorized that
the confirmation by the PAL's agents in Los Angeles and San
Francisco changed the compromise agreement between the parties.
As aptly by the appellate court:
. . . on March 23, 1990, he
was aware of the risk that his
ticket could expire, as it did,
before he returned to the
Philippines.' (pp. 320-321,
Original Records) 8
The question is: "Did these
two (2) employees, in effect,
extend the validity or lifetime
of the ticket in question? The
answer is in the negative.

Both had no authority to do

so. Appellant knew this from
the very start when he called
up the Legal Department of
appellee in the Philippines
before he left for the United
States of America. He had
first hand knowledge that the
ticket in question would expire
on March 27, 1990 and that to
secure an extension, he
would have to file a written
request for extension at the
PAL's office in the Philippines
(TSN, Testimony of Nicholas
Cervantes, August 2, 1991,
pp. 20-23). Despite this
knowledge, appellant
persisted to use the ticket in
question." 9
From the aforestated facts, it can be gleaned that the petitioner was
fully aware that there was a need to send a letter to the legal counsel
of PAL for the extension of the period of validity of his ticket.
Since the PAL agents are not privy to the said Agreement and
petitioner knew that a written request to the legal counsel of PAL was
necessary, he cannot use what the PAL agents did to his advantage.
The said agents, according to the Court of Appeals, 10 acted without
authority when they confirmed the flights of the petitioner.
Under Article 1989 11 of the New Civil Code, the acts an agent beyond
the scope of his authority do not bind the principal, unless the latter
ratifies the same expressly or impliedly. Furthermore, when the third
person (herein petitioner) knows that the agent was acting beyond his
power or authority, the principal cannot be held liable for the acts of the
agent. If the said third person is aware of such limits of authority, he is
to blame, and is not entitled to recover damages from the agent,
unless the latter undertook to secure the principal's ratification. 12
Anent the second issue, petitioner's stance that the defense of lack of
authority on the part of the PAL employees was deemed waived under
Rule 9, Section 2 of the Revised Rules of Court, is unsustainable.
Thereunder, failure of a party to put up defenses in their answer or in a
motion to dismiss is a waiver thereof.
Petitioner stresses that the alleged lack of authority of the PAL
employees was neither raised in the answer nor in the motion to
dismiss. But records show that the question of whether there was
authority on the part of the PAL employees was acted upon by the trial
court when Nicholas Cervantes was presented as a witness and the
depositions of the PAL employees, Georgina M. Reyes and Ruth
Villanueva, were presented.
The admission by Cervantes that he was told by PAL's legal counsel
that he had to submit a letter requesting for an extension of the validity
of subject tickets was tantamount to knowledge on his part that the
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

PAL employees had no authority to extend the validity of subject tickets

and only PAL's legal counsel was authorized to do so.
However, notwithstanding PAL's failure to raise the defense of lack of
authority of the said PAL agents in its answer or in a motion to dismiss,
the omission was cured since the said issue was litigated upon, as
shown by the testimony of the petitioner in the course of trial. Rule 10,
Section 5 of the 1997 Rules of Civil Procedure provides:
Sec. 5. Amendment to conform, or authorize
presentation of evidence. When issues not
raised by the pleadings are tried with express or
implied consent of the parties, as if they had been
raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to
conform to the evidence and to raise these issues
may be made upon motion of any party at any
time, even after judgment; but failure to amend
does not affect the result of the trial of these
issues. . . .
Thus, "when evidence is presented by one party, with the express or
implied consent of the adverse party, as to issues not alleged in the
pleadings, judgment may be rendered validly as regards the said
issue, which shall be treated as if they have been raised in the
pleadings. There is implied consent to the evidence thus presented
when the adverse party fails to object thereto." 13
Re: the third issue, an award of damages is improper because
petitioner failed to show that PAL acted in bad faith in refusing to allow
him to board its plane in San Francisco.
In awarding moral damages for breach of contract of carriage, the
breach must be wanton and deliberately injurious or the one
responsible acted fraudulently or with malice or bad faith. 14 Petitioner
knew there was a strong possibility that he could not use the subject
ticket, so much so that he bought a back-up ticket to ensure his
departure. Should there be a finding of bad faith, we are of the opinion
that it should be on the petitioner. What the employees of PAL did was
one of simple negligence. No injury resulted on the part of petitioner
because he had a back-up ticket should PAL refuse to accommodate
him with the use of subject ticket.
Neither can the claim for exemplary damages be upheld. Such kind of
damages is imposed by way of example or correction for the public
good, and the existence of bad faith is established. The wrongful act
must be accompanied by bad faith, and an award of damages would
be allowed only if the guilty party acted in a wanton, fraudulent,
reckless or malevolent manner. 15 Here, there is no showing that PAL
acted in such a manner. An award for attorney's fees is also improper.
WHEREFORE, the Petition is DENIED and the decision of the Court of
Appeals dated July 25, 1995 AFFIRMED in toto. No pronouncement as
to costs.
SO ORDERED.
G.R. No. 118664 August 7, 1998
JAPAN AIRLINES, petitioner,
vs.
THE COURT OF APPEALS, ENRIQUE AGANA., MARIA ANGELA
NINA AGANA, ADALIA B. FRANCISCO and JOSE
MIRANDA, respondents.

damages and pay attorney's fees in the amount of

Two Hundred Thousand Pesos (P200,000.00),
and to pay the costs of suit.

ROMERO, J.:
Before us is an appeal by certiorari filed by petitioner Japan Airlines,
Inc. (JAL) seeking the reversal of the decision of the Court of
Appeals, 1 which affirmed with modification the award of damages
made by the trial court in favor of herein private respondents Enrique
Agana, Maria Angela Nina Agana, Adelia Francisco and Jose Miranda.
On June 13, 1991, private respondent Jose Miranda boarded JAL flight
No. JL 001 in San Francisco, California bound for Manila. Likewise, on
the same day private respondents Enrique Agana, Maria Angela Nina
Agana and Adelia Francisco left Los Angeles, California for Manila via
JAL flight No. JL 061. As an incentive for travelling on the said airline,
both flights were to make an overnight stopover at Narita, Japan, at the
airlines' expense, thereafter proceeding to Manila the following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents
were billeted at Hotel Nikko Narita for the night. The next day, private
respondents, on the final leg of their journey, went to the airport to take
their flight to Manila. However, due to the Mt. Pinatubo eruption,
unrelenting ashfall blanketed Ninoy Aquino International Airport (NAIA),
rendering it inaccessible to airline traffic. Hence, private respondents'
trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked
all the Manila-bound passengers on flight No. 741 due to depart on
June 16, 1991 and also paid for the hotel expenses for their
unexpected overnight stay. On June 16, 1991, much to the dismay of
the private respondents, their long anticipated flight to Manila was
again cancelled due to NAIA's indefinite closure. At this point, JAL
informed the private respondents that it would no longer defray their
hotel and accommodation expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991,
private respondents were forced to pay for their accommodations and
meal expenses from their personal funds from June 16 to June 21,
1991. Their unexpected stay in Narita ended on June 22, 1991 when
they arrived in Manila on board JL flight No. 741.
Obviously, still reeling from the experience, private respondents, on
July 25, 1991, commenced an action for damages against JAL before
the Regional Trial Court of Quezon City, Branch 104. 2 To support their
claim, private respondents asserted that JAL failed to live up to its duty
to provide care and comfort to its stranded passengers when it refused
to pay for their hotel and accommodation expenses from June 16 to
21, 1991 at Narita, Japan. In other words, they insisted that JAL was
obligated to shoulder their expenses as long as they were still stranded
in Narita. On the other hand, JAL denied this allegation and averred
that airline passengers have no vested right to these amenities in case
a flight is cancelled due to "force majeure."
On June 18, 1992, the trial court rendered its judgment in favor of
private respondents holding JAL liable for damages, viz.:
WHEREFORE, judgment is rendered in favor of
plaintiffs ordering the defendant Japan Airlines to
pay the plaintiffs Enrique Agana, Adalia B.
Francisco and Maria Angela Nina Agana the sum
of One million Two Hundred forty-six Thousand
Nine Hundred Thirty-Six Pesos (P1,246,936.00)
and Jose Miranda the sum of Three Hundred
Twenty Thousand Six Hundred sixteen and 31/100
(P320,616.31) as actual, moral and exemplary

Undaunted, JAL appealed the decision before the Court of Appeals,

which, however, with the exception of lowering the damages awarded
affirmed the trial court's finding, 3 thus:
Thus, the award of moral damages should be as it
is hereby reduced to P200,000.00 for each of the
plaintiffs, the exemplary damages to P300,000.00
and the attorney's fees to P100,000.00 plus the
costs.
WHEREFORE, with the foregoing Modification,
the judgment appealed from is hereby AFFIRMED
in all other respects.
JAL filed a motion for reconsideration which proved futile and
unavailing. 4
Failing in its bid to reconsider the decision, JAL has now filed this
instant petition.
The issue to be resolved is whether JAL, as a common carrier has the
obligation to shoulder the hotel and meal expenses of its stranded
passengers until they have reached their final destination, even if the
delay were caused by "force majeure."
To begin with, there is no dispute that the Mt. Pinatubo eruption
prevented JAL from proceeding to Manila on schedule. Likewise,
private respondents concede that such event can be considered as
"force majeure" since their delayed arrival in Manila was not imputable
to JAL. 5
However, private respondents contend that while JAL cannot be held
responsible for the delayed arrival in Manila, it was nevertheless liable
for their living expenses during their unexpected stay in Narita since
airlines have the obligation to ensure the comfort and convenience of
its passengers. While we sympathize with the private respondents'
plight, we are unable to accept this contention.
We are not unmindful of the fact that in a plethora of cases we have
consistently ruled that a contract to transport passengers is quite
different in kind, and degree from any other contractual relation. It is
safe to conclude that it is a relationship imbued with public interest.
Failure on the part of the common carrier to live up to the exacting
standards of care and diligence renders it liable for any damages that
may be sustained by its passengers. However, this is not to say that
common carriers are absolutely responsible for all injuries or damages
even if the same were caused by a fortuitous event. To rule otherwise
would render the defense of "force majeure," as an exception from any
liability, illusory and ineffective.
Accordingly, there is no question that when a party is unable to fulfill
his obligation because of "force majeure," the general rule is that he
cannot be held liable for damages for non-performance. 6 Corollarily,
when JAL was prevented from resuming its flight to Manila due to the
effects of Mt. Pinatubo eruption, whatever losses or damages in the
form of hotel and meal expenses the stranded passengers incurred,
cannot be charged to JAL. Yet it is undeniable that JAL assumed the
hotel expenses of respondents for their unexpected overnight stay on
June 15, 1991.

Admittedly, to be stranded for almost a week in a foreign land was an

exasperating experience for the private respondents. To be sure, they
underwent distress and anxiety during their unanticipated stay in
Narita, but their predicament was not due to the fault or negligence of
JAL but the closure of NAIA to international flights. Indeed, to hold JAL,
in the absence of bad faith or negligence, liable for the amenities of its
stranded passengers by reason of a fortuitous event is too much of a
burden to assume.
Furthermore, it has been held that airline passengers must take such
risks incident to the mode of travel. 7 In this regard, adverse weather
conditions or extreme climatic changes are some of the perils involved
in air travel, the consequences of which the passenger must assume
or expect. After all, common carriers are not the insurer of all risks. 8
Paradoxically, the Court of Appeals, despite the presence of "force
majeure," still ruled against JAL relying in our decision inPAL v. Court
of Appeals, 9 thus:
The position taken by PAL in this case clearly
illustrates its failure to grasp the exacting standard
required by law. Undisputably, PAL's diversion of
its flight due to inclement weather was a fortuitous
event. Nonetheless, such occurrence did not
terminate PAL's contract with its passengers.
Being in the business of air carriage and the sole
one to operate in the country, PAL is deemed
equipped to deal with situations as in the case at
bar. What we said in one case once again must be
stressed, i.e., the relation of carrier and passenger
continues until the latter has been landed at the
port of destination and has left the carrier's
premises. Hence, PAL necessarily would still have
to exercise extraordinary diligence in safeguarding
the comfort, convenience and safety of its
stranded passengers until they have reached their
final destination. On this score, PAL grossly failed
considering the then ongoing battle between
government forces and Muslim rebels in Cotabato
City and the fact that the private respondent was a
stranger to the place.
The reliance is misplaced. The factual background of the PAL case is
different from the instant petition. In that case there was indeed a
fortuitous event resulting in the diversion of the PAL flight. However,
the unforeseen diversion was worsened when "private respondents
(passenger) was left at the airport and could not even hitch a ride in a
Ford Fiera loaded with PAL personnel," 10 not to mention the apparent
apathy of the PAL station manager as to the predicament of the
stranded passengers. 11 In light of these circumstances, we held that if
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 122039 May 31, 2000

VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO
SALVA, respondents.

the fortuitous event was accompanied by neglect and malfeasance by

the carrier's employees, an action for damages against the carrier is
permissible. Unfortunately, for private respondents, none of these
conditions are present in the instant petition.
We are not prepared, however, to completely absolve petitioner JAL
from any liability. It must be noted that private respondents bought
tickets from the United States with Manila as their final destination.
While JAL was no longer required to defray private respondents' living
expenses during their stay in Narita on account of the fortuitous event,
JAL had the duty to make the necessary arrangements to transport
private respondents on the first available connecting flight to Manila.
Petitioner JAL reneged on its obligation to look after the comfort and
convenience of its passengers when it declassified private respondents
from "transit passengers" to "new passengers" as a result of which
private respondents were obliged to make the necessary
arrangements themselves for the next flight to Manila. Private
respondents were placed on the waiting list from June 20 to June 24.
To assure themselves of a seat on an available flight, they were
compelled to stay in the airport the whole day of June 22, 1991 and it
was only at 8:00 p.m. of the aforesaid date that they were advised that
they could be accommodated in said flight which flew at about 9:00
a.m. the next day.
We are not oblivious to the fact that the cancellation of JAL flights to
Manila from June 15 to June 21, 1991 caused considerable disruption
in passenger booking and reservation. In fact, it would be
unreasonable to expect, considering NAIA's closure, that JAL flight
operations would be normal on the days affected. Nevertheless, this
does not excuse JAL from its obligation to make the necessary
arrangements to transport private respondents on its first available
flight to Manila. After all, it had a contract to transport private
respondents from the United States to Manila as their final destination.
Consequently, the award of nominal damages is in order. Nominal
damages are adjudicated in order that a right of a plaintiff, which has
been violated or invaded by the defendant, may be vindicated or
recognized and not for the purpose of indemnifying any loss suffered
by him. 12 The court may award nominal damages in every obligation
arising from any source enumerated in article 1157, or in every case
where any property right has been invaded. 13
WHEREFORE, in view of the foregoing, the decision of the Court of
Appeals dated December 22, 1993 is hereby MODIFIED. The award of
actual, moral and exemplary damages is hereby DELETED. Petitioner
JAL is ordered to pay each of the private respondents nominal
damages in the sum of P100,000.00 each including attorney' s fees of
P50,000.00 plus costs.
SO ORDERED.

MENDOZA, J.:
This is a petition for review on certiorari of the decision1 of the Court of
Appeals, dated March 31, 1991, reversing the contrary decision of the
Regional Trial Court, Branch 36, Dumaguete City, and awarding damages
instead to private respondent Eliza Jujeurche Sunga as plaintiff in an action
for breach of contract of carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza
Jujeurche G. Sunga, then a college freshman majoring in Physical
Education at the Siliman University, took a passenger jeepney owned and
operated by petitioner Vicente Calalas. As the jeepney was filled to capacity

of about 24 passengers, Sunga was given by the conductor an "extension

seat," a wooden stool at the back of the door at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped
to let a passenger off. As she was seated at the rear of the vehicle, Sunga
gave way to the outgoing passenger. Just as she was doing so, an Isuzu
truck driven by Iglecerio Verena and owned by Francisco Salva bumped the
left rear portion of the jeepney. As a result, Sunga was injured. She
sustained a fracture of the "distal third of the left tibia-fibula with severe
necrosis of the underlying skin." Closed reduction of the fracture, long leg
circular casting, and case wedging were done under sedation. Her
confinement in the hospital lasted from August 23 to September 7, 1989.
Her attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon,
certified she would remain on a cast for a period of three months and would
have to ambulate in crutches during said period.
On October 9, 1989, Sunga filed a complaint for damages against Calalas,
alleging violation of the contract of carriage by the former in failing to
exercise the diligence required of him as a common carrier. Calalas, on the
other hand, filed a third-party complaint against Francisco Salva, the owner
of the Isuzu truck.
The lower court rendered judgment against Salva as third-party defendant
and absolved Calalas of liability, holding that it was the driver of the Isuzu
truck who was responsible for the accident. It took cognizance of another
case (Civil Case No. 3490), filed by Calalas against Salva and Verena, for
quasi-delict, in which Branch 37 of the same court held Salva and his driver
Verena jointly liable to Calalas for the damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court was
reversed on the ground that Sunga's cause of action was based on a
contract of carriage, not quasi-delict, and that the common carrier failed to
exercise the diligence required under the Civil Code. The appellate court
dismissed the third-party complaint against Salva and adjudged Calalas
liable for damages to Sunga. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from
is hereby REVERSED and SET ASIDE,
and another one is entered ordering
defendant-appellee Vicente Calalas to pay
plaintiff-appellant:
(1) P50,000.00 as actual and
compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation;
and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case No.
3490 that the negligence of Verena was the proximate cause of the
accident negates his liability and that to rule otherwise would be to make
the common carrier an insurer of the safety of its passengers. He contends
that the bumping of the jeepney by the truck owned by Salva was a caso
fortuito. Petitioner further assails the award of moral damages to Sunga on
the ground that it is not supported by evidence.
The petition has no merit.

Verena were liable for quasi-delict for the damage caused to petitioner's
jeepney. On the other hand, the issue in this case is whether petitioner is
liable on his contract of carriage. The first, quasi-delict, also known as culpa
aquiliana or culpa extra contractual, has as its source the negligence of the
tortfeasor. The second, breach of contract or culpa contractual, is premised
upon the negligence in the performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly
established because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the existence of
the contract and the fact that the obligor, in this case the common carrier,
failed to transport his passenger safely to his destination. 2 In case of death
or injuries to passengers, Art. 1756 of the Civil Code provides that common
carriers are presumed to have been at fault or to have acted negligently
unless they prove that they observed extraordinary diligence as defined in
Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the
common carrier the burden of proof.
There is, thus, no basis for the contention that the ruling in Civil Case No.
3490, finding Salva and his driver Verena liable for the damage to
petitioner's jeepney, should be binding on Sunga. It is immaterial that the
proximate cause of the collision between the jeepney and the truck was the
negligence of the truck driver. The doctrine of proximate cause is applicable
only in actions for quasi-delict, not in actions involving breach of contract.
The doctrine is a device for imputing liability to a person where there is no
relation between him and another party. In such a case, the obligation is
created by law itself. But, where there is a pre-existing contractual relation
between the parties, it is the parties themselves who create the obligation,
and the function of the law is merely to regulate the relation thus created.
Insofar as contracts of carriage are concerned, some aspects regulated by
the Civil Code are those respecting the diligence required of common
carriers with regard to the safety of passengers as well as the presumption
of negligence in cases of death or injury to passengers. It provides:
Art. 1733. Common carriers, from the
nature of their business and for reasons of
public policy, are bound to observe
extraordinary diligence in the vigilance over
the goods and for the safety of the
passengers transported by them,
according to all the circumstances of each
case.
Such extraordinary diligence in the
vigilance over the goods is further
expressed in articles 1734, 1735, and
1746, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the
passengers is further set forth in articles
1755 and 1756.
Art. 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 due regard for all the
circumstances.
Art. 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 by articles 1733 and 1755.
In the case at bar, upon the happening of the accident, the presumption of
negligence at once arose, and it became the duty of petitioner to prove that
he had to observe extraordinary diligence in the care of his passengers.

The argument that Sunga is bound by the ruling in Civil Case No. 3490
finding the driver and the owner of the truck liable for quasi-delict ignores
the fact that she was never a party to that case and, therefore, the principle
ofres judicata does not apply.

Now, did the driver of jeepney carry Sunga "safely as far as human care
and foresight could provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances" as required by Art.
1755? We do not think so. Several factors militate against petitioner's
contention.

Nor are the issues in Civil Case No. 3490 and in the present case the
same. The issue in Civil Case No. 3490 was whether Salva and his driver

First, as found by the Court of Appeals, the jeepney was not properly
parked, its rear portion being exposed about two meters from the broad

shoulders of the highway, and facing the middle of the highway in a

diagonal angle. This is a violation of the R.A. No. 4136, as amended, or the
Land Transportation and Traffic Code, which provides:

that school year 1989-1990 at the Silliman

University, majoring in Physical Education.
Because of the injury, she was not able to
enroll in the second semester of that
school year. She testified that she had no
more intention of continuing with her
schooling, because she could not walk and
decided not to pursue her degree, major in
Physical Education "because of my leg
which has a defect already."

Sec. 54. Obstruction of Traffic. No

person shall drive his motor vehicle in such
a manner as to obstruct or impede the
passage of any vehicle, nor, while
discharging or taking on passengers or
loading or unloading freight, obstruct the
free passage of other vehicles on the
highway.

Plaintiff-appellant likewise testified that

even while she was under confinement,
she cried in pain because of her injured left
foot. As a result of her injury, the
Orthopedic Surgeon also certified that she
has "residual bowing of the fracture side."
She likewise decided not to further pursue
Physical Education as her major subject,
because "my left leg . . . has a defect
already."

Second, it is undisputed that petitioner's driver took in more passengers

than the allowed seating capacity of the jeepney, a violation of 32(a) of the
same law. It provides:
Exceeding registered capacity. No
person operating any motor vehicle shall
allow more passengers or more freight or
cargo in his vehicle than its registered
capacity.

Those are her physical pains and moral

sufferings, the inevitable bedfellows of the
injuries that she suffered. Under Article
2219 of the Civil Code, she is entitled to
recover moral damages in the sum of
P50,000.00, which is fair, just and
reasonable.

The fact that Sunga was seated in an "extension seat" placed her in a peril
greater than that to which the other passengers were exposed. Therefore,
not only was petitioner unable to overcome the presumption of negligence
imposed on him for the injury sustained by Sunga, but also, the evidence
shows he was actually negligent in transporting passengers.
We find it hard to give serious thought to petitioner's contention that
Sunga's taking an "extension seat" amounted to an implied assumption of
risk. It is akin to arguing that the injuries to the many victims of the tragedies
in our seas should not be compensated merely because those passengers
assumed a greater risk of drowning by boarding an overloaded ferry. This is
also true of petitioner's contention that the jeepney being bumped while it
was improperly parked constitutes caso fortuito. A caso fortuito is an event
which could not be foreseen, or which, though foreseen, was
inevitable.3 This requires that the following requirements be present: (a) the
cause of the breach is independent of the debtor's will; (b) the event is
unforeseeable or unavoidable; (c) the event is such as to render it
impossible for the debtor to fulfill his obligation in a normal manner, and (d)
the debtor did not take part in causing the injury to the
creditor.4 Petitioner should have foreseen the danger of parking his jeepney
with its body protruding two meters into the highway.
Finally, petitioner challenges the award of moral damages alleging that it is
excessive and without basis in law. We find this contention well taken.
In awarding moral damages, the Court of Appeals stated:
Plaintiff-appellant at the time of the
accident was a first-year college student in
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-31379 August 29, 1988
COMPAIA MARITIMA, petitioner,
vs.
COURT OF APPEALS and VICENTE CONCEPCION, respondents.
Rafael Dinglasan for petitioner.
Benjamin J. Molina for private respondent.

As a general rule, moral damages are not recoverable in actions for

damages predicated on a breach of contract for it is not one of the items
enumerated under Art. 2219 of the Civil Code. 5 As an exception, such
damages are recoverable: (1) in cases in which the mishap results in the
death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of
the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or
bad faith, as provided in Art. 2220.6
In this case, there is no legal basis for awarding moral damages since there
was no factual finding by the appellate court that petitioner acted in bad
faith in the performance of the contract of carriage. Sunga's contention that
petitioner's admission in open court that the driver of the jeepney failed to
assist her in going to a nearby hospital cannot be construed as an
admission of bad faith. The fact that it was the driver of the Isuzu truck who
took her to the hospital does not imply that petitioner was utterly indifferent
to the plight of his injured passenger. If at all, it is merely implied recognition
by Verena that he was the one at fault for the accident.
WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995,
and its resolution, dated September 11, 1995, are AFFIRMED, with the
MODIFICATION that the award of moral damages is DELETED.
SO ORDERED.
FERNAN, C.J.:
Petitioner Compaia Maritima seeks to set aside through this petition for
review on certiorari the decision 1 of the Court of Appeals dated December
5, 1965, adjudging petitioner liable to private respondent Vicente E.
Concepcion for damages in the amount of P24,652.97 with legal interest
from the date said decision shall have become final, for petitioner's failure
to deliver safely private respondent's payloader, and for costs of suit. The
payloader was declared abandoned in favor of petitioner.
The facts of the case are as follows:
Private respondent Vicente E. Concepcion, a civil engineer doing business
under the name and style of Consolidated Construction with office address
at Room 412, Don Santiago Bldg., Taft Avenue, Manila, had a contract with
the Civil Aeronautics Administration (CAA) sometime in 1964 for the
construction of the airport in Cagayan de Oro City Misamis Oriental.
Being a Manila based contractor, Vicente E. Concepcion had to ship his
construction equipment to Cagayan de Oro City. Having shipped some of

his equipment through petitioner and having settled the balance of

P2,628.77 with respect to said shipment, Concepcion negotiated anew with
petitioner, thru its collector, Pacifico Fernandez, on August 28, 1964 for the
shipment to Cagayan de Oro City of one (1) unit payloader, four (4) units
6x6 Reo trucks and two (2) pieces of water tanks. He was issued Bill of
Lading 113 on the same date upon delivery of the equipment at the Manila
North Harbor. 2
These equipment were loaded aboard the MV Cebu in its Voyage No. 316,
which left Manila on August 30, 1964 and arrived at Cagayan de Oro City in
the afternoon of September 1, 1964. The Reo trucks and water tanks were
safely unloaded within a few hours after arrival, but while the payloader was
about two (2) meters above the pier in the course of unloading, the swivel
pin of the heel block of the port block of Hatch No. 2 gave way, causing the
payloader to fall. 3 The payloader was damaged and was thereafter taken to
petitioner's compound in Cagayan de Oro City.
On September 7, 1964, Consolidated Construction, thru Vicente E.
Concepcion, wrote Compaia Maritima to demand a replacement of the
payloader which it was considering as a complete loss because of the
extent of damage. 4 Consolidated Construction likewise notified petitioner of
its claim for damages. Unable to elicit response, the demand was repeated
in a letter dated October 2, 1964. 5
Meanwhile, petitioner shipped the payloader to Manila where it was
weighed at the San Miguel Corporation. Finding that the payloader weighed
7.5 tons and not 2.5 tons as declared in the B-111 of Lading, petitioner
denied the claim for damages of Consolidated Construction in its letter
dated October 7, 1964, contending that had Vicente E. Concepcion
declared the actual weight of the payloader, damage to their ship as well as
to his payloader could have been prevented. 6
To replace the damaged payloader, Consolidated Construction in the
meantime bought a new one at P45,000.00 from Bormaheco Inc. on
December 3, 1964, and on July 6, 1965., Vicente E. Concepcion filed an
action for damages against petitioner with the then Court of First Instance of
Manila, Branch VII, docketed as Civil Case No. 61551, seeking to recover
damages in the amount of P41,225.00 allegedly suffered for the period of
97 days that he was not able to employ a payloader in the construction job
at the rate of P450.00 a day; P34,000.00 representing the cost of the
damaged payloader; Pl 1, 000. 00 representing the difference between the
cost of the damaged payloader and that of the new payloader; P20,000.00
representing the losses suffered by him due to the diversion of funds to
enable him to buy a new payloader; P10,000.00 as attorney's fees;
P5,000.00 as exemplary damages; and cost of the suit. 7
After trial, the then Court of First Instance of Manila, Branch VII, dismissed
on April 24, 1968 the complaint with costs against therein plaintiff, herein
private respondent Vicente E. Concepcion, stating that the proximate cause
of the fall of the payloader was Vicente E. Concepcion's act or omission in
having misrepresented the weight of the payloader as 2.5 tons instead of its
true weight of 7.5 tons, which underdeclaration was intended to defraud
Compaia Maritima of the payment of the freight charges and which
likewise led the Chief Officer of the vessel to use the heel block of hatch
No. 2 in unloading the payloader. 8
From the adverse decision against him, Vicente E. Concepcion appealed to
the Court of Appeals which, on December 5, 1965 rendered a decision, the
dispositive portion of which reads:
IN VIEW WHEREOF, judgment must have to be as it
is hereby reversed; defendant is condemned to pay
unto plaintiff the sum in damages of P24,652.07 with
legal interest from the date the present decision shall
have become final; the payloader is declared
abandoned to defendant; costs against the latter. 9
Hence, the instant petition.

The principal issue in the instant case is whether or not the act of private
respondent Vicente E. Concepcion in furnishing petitioner Compaia
Maritima with an inaccurate weight of 2.5 tons instead of the payloader's
actual weight of 7.5 tons was the proximate and only cause of the damage
on the Oliver Payloader OC-12 when it fell while being unloaded by
petitioner's crew, as would absolutely exempt petitioner from liability for
damages under paragraph 3 of Article 1734 of the Civil Code, which
provides:
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:
xxx xxx xxx
(3) Act or omission of the shipper or owner of the
goods.
Petitioner claims absolute exemption under this provision upon the
reasoning that private respondent's act of furnishing it with an inaccurate
weight of the payloader constitutes misrepresentation within the meaning of
"act or omission of the shipper or owner of the goods" under the abovequoted article. It likewise faults the respondent Court of Appeals for
reversing the decision of the trial court notwithstanding that said appellate
court also found that by representing the weight of the payloader to be only
2.5 tons, private respondent had led petitioner's officer to believe that the
same was within the 5 tons capacity of the heel block of Hatch No. 2.
Petitioner would thus insist that the proximate and only cause of the
damage to the payloader was private respondent's alleged
misrepresentation of the weight of the machinery in question; hence, any
resultant damage to it must be borne by private respondent Vicente E.
Concepcion.
The general rule under Articles 1735 and 1752 of the Civil Code is that
common carriers are presumed to have been at fault or to have acted
negligently in case the goods transported by them are lost, destroyed or
had deteriorated. To overcome the presumption of liability for the loss,
destruction or deterioration of the goods under Article 1735, the common
carriers must prove that they observed extraordinary diligence as required
in Article 1733 of the Civil Code. The responsibility of observing
extraordinary diligence in the vigilance over the goods is further expressed
in Article 1734 of the same Code, the article invoked by petitioner to avoid
liability for damages.
Corollary is the rule that mere proof of delivery of the goods in good order to
a common carrier, and of their arrival at the place of destination in bad
order, makes out prima facie case against the common carrier, so that if no
explanation is given as to how the loss, deterioration or destruction of the
goods occurred, the common carrier must be held responsible. 10 Otherwise
stated, it is incumbent upon the common carrier to prove that the loss,
deterioration or destruction was due to accident or some other
circumstances inconsistent with its liability.
In the instant case, We are not persuaded by the proferred explanation of
petitioner alleged to be the proximate cause of the fall of the payloader
while it was being unloaded at the Cagayan de Oro City pier. Petitioner
seems to have overlooked the extraordinary diligence required of common
carriers in the vigilance over the goods transported by them by virtue of the
nature of their business, which is impressed with a special public duty.
Thus, Article 1733 of the Civil Code provides:
Art. 1733. Common carriers, from the nature of their
business and for reason of public policy, are bound to
observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers
transported by them according to all the
circumstances of each case.

Such extraordinary diligence in the vigilance over the

goods is further expressed in Articles 1734, 1735 and
1745, Nos. 5, 6 and 7, ...
The extraordinary diligence in the vigilance over the goods tendered for
shipment requires the common carrier to know and to follow the required
precaution for avoiding damage to, or destruction of the goods entrusted to
it for safe carriage and delivery. It requires common carriers to render
service with the greatest skill and foresight and "to use all reasonable
means to ascertain the nature and characteristic of goods tendered for
shipment, and to exercise due care in the handling and stowage including
such methods as their nature requires." 11 Under Article 1736 of the Civil
Code, the responsibility to observe extraordinary diligence commences and
lasts from the time the goods are unconditionally placed in the possession
of, and received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the consignee, or to
the person who has the right to receive them without prejudice to the
provisions of Article 1738.
Where, as in the instant case, petitioner, upon the testimonies of its own
crew, failed to take the necessary and adequate precautions for avoiding
damage to, or destruction of, the payloader entrusted to it for safe carriage
and delivery to Cagayan de Oro City, it cannot be reasonably concluded
that the damage caused to the payloader was due to the alleged
misrepresentation of private respondent Concepcion as to the correct and
accurate weight of the payloader. As found by the respondent Court of
Appeals, the fact is that petitioner used a 5-ton capacity lifting apparatus to
lift and unload a visibly heavy cargo like a payloader. Private respondent
has, likewise, sufficiently established the laxity and carelessness of
petitioner's crew in their methods of ascertaining the weight of heavy
cargoes offered for shipment before loading and unloading them, as is
customary among careful persons.
It must be noted that the weight submitted by private respondent
Concepcion appearing at the left-hand portion of Exhibit 8 12 as an
addendum to the original enumeration of equipment to be shipped was
entered into the bill of lading by petitioner, thru Pacifico Fernandez, a
company collector, without seeing the equipment to be shipped. 13Mr.
Mariano Gupana, assistant traffic manager of petitioner, confirmed in his
testimony that the company never checked the information entered in the
bill of lading. 14 Worse, the weight of the payloader as entered in the bill of
lading was assumed to be correct by Mr. Felix Pisang, Chief Officer of MV
Cebu. 15
The weights stated in a bill of lading are prima facie evidence of the amount
received and the fact that the weighing was done by another will not relieve
the common carrier where it accepted such weight and entered it on the bill
of lading. 16 Besides, common carriers can protect themselves against
mistakes in the bill of lading as to weight by exercising diligence before
issuing the same. 17

While petitioner has proven that private respondent Concepcion did furnish
it with an inaccurate weight of the payloader, petitioner is nonetheless
liable, for the damage caused to the machinery could have been avoided by
the exercise of reasonable skill and attention on its part in overseeing the
unloading of such a heavy equipment. And circumstances clearly show that
the fall of the payloader could have been avoided by petitioner's crew.
Evidence on record sufficiently show that the crew of petitioner had been
negligent in the performance of its obligation by reason of their having failed
to take the necessary precaution under the circumstances which usage has
established among careful persons, more particularly its Chief Officer, Mr.
Felix Pisang, who is tasked with the over-all supervision of loading and
unloading heavy cargoes and upon whom rests the burden of deciding as
to what particular winch the unloading of the payloader should be
undertaken. 18 While it was his duty to determine the weight of heavy
cargoes before accepting them. Mr. Felix Pisang took the bill of lading on its
face value and presumed the same to be correct by merely "seeing"
it. 19 Acknowledging that there was a "jumbo" in the MV Cebu which has the
capacity of lifting 20 to 25 ton cargoes, Mr. Felix Pisang chose not to use it,
because according to him, since the ordinary boom has a capacity of 5 tons
while the payloader was only 2.5 tons, he did not bother to use the "jumbo"
anymore. 20
In that sense, therefore, private respondent's act of furnishing petitioner
with an inaccurate weight of the payloader upon being asked by petitioner's
collector, cannot be used by said petitioner as an excuse to avoid liability for
the damage caused, as the same could have been avoided had petitioner
utilized the "jumbo" lifting apparatus which has a capacity of lifting 20 to 25
tons of heavy cargoes. It is a fact known to the Chief Officer of MV Cebu
that the payloader was loaded aboard the MV Cebu at the Manila North
Harbor on August 28, 1964 by means of a terminal crane. 21 Even if
petitioner chose not to take the necessary precaution to avoid damage by
checking the correct weight of the payloader, extraordinary care and
diligence compel the use of the "jumbo" lifting apparatus as the most
prudent course for petitioner.
While the act of private respondent in furnishing petitioner with an
inaccurate weight of the payloader cannot successfully be used as an
excuse by petitioner to avoid liability to the damage thus caused, said act
constitutes a contributory circumstance to the damage caused on the
payloader, which mitigates the liability for damages of petitioner in
accordance with Article 1741 of the Civil Code, to wit:
Art. 1741. If the shipper or owner merely contributed
to the loss, destruction or deterioration of the goods,
the proximate cause thereof being the negligence of
the common carrier, the latter shall be liable in
damages, which however, shall be equitably reduced.
We find equitable the conclusion of the Court of Appeals reducing the
recoverable amount of damages by 20% or 1/5 of the value of the payloader,
which at the time the instant case arose, was valued at P34,000. 00, thereby
reducing the recoverable amount at 80% or 4/5 of P34,000.00 or the sum of
P27,200.00. Considering that the freight charges for the entire cargoes shipped
by private respondent amounting to P2,318.40 remained unpaid.. the same
would be deducted from the P27,000.00 plus an additional deduction of P228.63
representing the freight charges for the undeclared weight of 5 tons (difference
between 7.5 and 2.5 tons) leaving, therefore, a final recoverable amount of
damages of P24,652.97 due to private respondent Concepcion.
Notwithstanding the favorable judgment in his favor, private respondent assailed
the Court of Appeals' decision insofar as it limited the damages due him to only
P24,652.97 and the cost of the suit. Invoking the provisions on damages under
the Civil Code, more particularly Articles 2200 and 2208, private respondent
further seeks additional damages allegedly because the construction project was
delayed and that in spite of his demands, petitioner failed to take any steps to
settle his valid, just and demandable claim for damages.
We find private respondent's submission erroneous. It is well- settled that an
appellee, who is not an appellant, may assign errors in his brief where his
purpose is to maintain the judgment on other grounds, but he may not do so if his
purpose is to have the judgment modified or reversed, for, in such case, he must

appeal. 22 Since private respondent did not appeal from the judgment insofar as it
limited the award of damages due him, the reduction of 20% or 1/5 of the value
of the payloader stands.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of
the Court of Appeals is hereby AFFIRMED in all respects with costs against
petitioner. In view of the length of time this case has been pending, this decision
is immediately executory.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-12191

October 14, 1918

JOSE CANGCO, plaintiff-appellant,

vs.
MANILA RAILROAD CO., defendant-appellee.
Ramon Sotelo for appellant.
Kincaid & Hartigan for appellee.

FISHER, J.:
At the time of the occurrence which gave rise to this litigation the
plaintiff, Jose Cangco, was in the employment of Manila Railroad
Company in the capacity of clerk, with a monthly wage of P25. He lived
in the pueblo of San Mateo, in the province of Rizal, which is located
upon the line of the defendant railroad company; and in coming daily
by train to the company's office in the city of Manila where he worked,
he used a pass, supplied by the company, which entitled him to ride
upon the company's trains free of charge. Upon the occasion in
question, January 20, 1915, the plaintiff arose from his seat in the
second class-car where he was riding and, making, his exit through the
door, took his position upon the steps of the coach, seizing the upright
guardrail with his right hand for support.
On the side of the train where passengers alight at the San
Mateo station there is a cement platform which begins to rise with a
moderate gradient some distance away from the company's office and
extends along in front of said office for a distance sufficient to cover the
length of several coaches. As the train slowed down another
passenger, named Emilio Zuiga, also an employee of the railroad
company, got off the same car, alighting safely at the point where the
platform begins to rise from the level of the ground. When the train had
proceeded a little farther the plaintiff Jose Cangco stepped off also, but
one or both of his feet came in contact with a sack of watermelons with
the result that his feet slipped from under him and he fell violently on
the platform. His body at once rolled from the platform and was drawn
under the moving car, where his right arm was badly crushed and
lacerated. It appears that after the plaintiff alighted from the train the
car moved forward possibly six meters before it came to a full stop.
The accident occurred between 7 and 8 o'clock on a dark night,
and as the railroad station was lighted dimly by a single light located
some distance away, objects on the platform where the accident

occurred were difficult to discern especially to a person emerging from

a lighted car.
The explanation of the presence of a sack of melons on the
platform where the plaintiff alighted is found in the fact that it was the
customary season for harvesting these melons and a large lot had
been brought to the station for the shipment to the market. They were
contained in numerous sacks which has been piled on the platform in a
row one upon another. The testimony shows that this row of sacks was
so placed of melons and the edge of platform; and it is clear that the
fall of the plaintiff was due to the fact that his foot alighted upon one of
these melons at the moment he stepped upon the platform. His
statement that he failed to see these objects in the darkness is readily
to be credited.
The plaintiff was drawn from under the car in an unconscious
condition, and it appeared that the injuries which he had received were
very serious. He was therefore brought at once to a certain hospital in
the city of Manila where an examination was made and his arm was
amputated. The result of this operation was unsatisfactory, and the
plaintiff was then carried to another hospital where a second operation
was performed and the member was again amputated higher up near
the shoulder. It appears in evidence that the plaintiff expended the sum
of P790.25 in the form of medical and surgical fees and for other
expenses in connection with the process of his curation.
Upon August 31, 1915, he instituted this proceeding in the Court
of First Instance of the city of Manila to recover damages of the
defendant company, founding his action upon the negligence of the
servants and employees of the defendant in placing the sacks of
melons upon the platform and leaving them so placed as to be a
menace to the security of passenger alighting from the company's
trains. At the hearing in the Court of First Instance, his Honor, the trial
judge, found the facts substantially as above stated, and drew
therefrom his conclusion to the effect that, although negligence was
attributable to the defendant by reason of the fact that the sacks of
melons were so placed as to obstruct passengers passing to and from
the cars, nevertheless, the plaintiff himself had failed to use due
caution in alighting from the coach and was therefore precluded form
recovering. Judgment was accordingly entered in favor of the
defendant company, and the plaintiff appealed.
It can not be doubted that the employees of the railroad
company were guilty of negligence in piling these sacks on the
platform in the manner above stated; that their presence caused the
plaintiff to fall as he alighted from the train; and that they therefore
constituted an effective legal cause of the injuries sustained by the
plaintiff. It necessarily follows that the defendant company is liable for
the damage thereby occasioned unless recovery is barred by the
plaintiff's own contributory negligence. In resolving this problem it is
necessary that each of these conceptions of liability, to-wit, the primary
responsibility of the defendant company and the contributory
negligence of the plaintiff should be separately examined.
It is important to note that the foundation of the legal liability of
the defendant is the contract of carriage, and that the obligation to
respond for the damage which plaintiff has suffered arises, if at all,
from the breach of that contract by reason of the failure of defendant to
exercise due care in its performance. That is to say, its liability is direct
and immediate, differing essentially, in legal viewpoint from that
presumptive responsibility for the negligence of its servants, imposed
by article 1903 of the Civil Code, which can be rebutted by proof of the
exercise of due care in their selection and supervision. Article 1903 of
the Civil Code is not applicable to obligations arising ex contractu, but
only to extra-contractual obligations or to use the technical form of

expression, that article relates only to culpa aquiliana and not to culpa
contractual.
Manresa (vol. 8, p. 67) in his commentaries upon articles 1103
and 1104 of the Civil Code, clearly points out this distinction, which
was also recognized by this Court in its decision in the case of
Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In
commenting upon article 1093 Manresa clearly points out the
difference between "culpa, substantive and independent, which of itself
constitutes the source of an obligation between persons not formerly
connected by any legal tie" and culpa considered as an accident in the
performance of an obligation already existing . . . ."
In the Rakes case (supra) the decision of this court was made to
rest squarely upon the proposition that article 1903 of the Civil Code is
not applicable to acts of negligence which constitute the breach of a
contract.
Upon this point the Court said:
The acts to which these articles [1902 and 1903 of the
Civil Code] are applicable are understood to be those not
growing out of pre-existing duties of the parties to one
another. But where relations already formed give rise to
duties, whether springing from contract or quasi-contract,
then breaches of those duties are subject to article 1101,
1103, and 1104 of the same code. (Rakes vs. Atlantic, Gulf
and Pacific Co., 7 Phil. Rep., 359 at 365.)
This distinction is of the utmost importance. The liability, which,
under the Spanish law, is, in certain cases imposed upon employers
with respect to damages occasioned by the negligence of their
employees to persons to whom they are not bound by contract, is not
based, as in the English Common Law, upon the principle
ofrespondeat superior if it were, the master would be liable in every
case and unconditionally but upon the principle announced in article
1902 of the Civil Code, which imposes upon all persons who by their
fault or negligence, do injury to another, the obligation of making good
the damage caused. One who places a powerful automobile in the
hands of a servant whom he knows to be ignorant of the method of
managing such a vehicle, is himself guilty of an act of negligence
which makes him liable for all the consequences of his imprudence.
The obligation to make good the damage arises at the very instant that
the unskillful servant, while acting within the scope of his employment
causes the injury. The liability of the master is personal and direct. But,
if the master has not been guilty of any negligence whatever in the
selection and direction of the servant, he is not liable for the acts of the
latter, whatever done within the scope of his employment or not, if the
damage done by the servant does not amount to a breach of the
contract between the master and the person injured.
It is not accurate to say that proof of diligence and care in the
selection and control of the servant relieves the master from liability for
the latter's acts on the contrary, that proof shows that the
responsibility has never existed. As Manresa says (vol. 8, p. 68) the
liability arising from extra-contractual culpa is always based upon a
voluntary act or omission which, without willful intent, but by mere
negligence or inattention, has caused damage to another. A master
who exercises all possible care in the selection of his servant, taking
into consideration the qualifications they should possess for the
discharge of the duties which it is his purpose to confide to them, and
directs them with equal diligence, thereby performs his duty to third
persons to whom he is bound by no contractual ties, and he incurs no
liability whatever if, by reason of the negligence of his servants, even
within the scope of their employment, such third person suffer damage.
True it is that under article 1903 of the Civil Code the law creates

a presumption that he has been negligent in the selection or direction

of his servant, but the presumption is rebuttable and yield to proof of
due care and diligence in this respect.
The supreme court of Porto Rico, in interpreting identical
provisions, as found in the Porto Rico Code, has held that these
articles are applicable to cases of extra-contractual culpa exclusively.
(Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)
This distinction was again made patent by this Court in its
decision in the case of Bahia vs. Litonjua and Leynes, (30 Phil. rep.,
624), which was an action brought upon the theory of the extracontractual liability of the defendant to respond for the damage caused
by the carelessness of his employee while acting within the scope of
his employment. The Court, after citing the last paragraph of article
1903 of the Civil Code, said:
From this article two things are apparent: (1) That
when an injury is caused by the negligence of a servant or
employee there instantly arises a presumption of law that
there was negligence on the part of the master or employer
either in selection of the servant or employee, or in
supervision over him after the selection, or both; and (2) that
that presumption is juris tantum and not juris et de jure, and
consequently, may be rebutted. It follows necessarily that if
the employer shows to the satisfaction of the court that in
selection and supervision he has exercised the care and
diligence of a good father of a family, the presumption is
overcome and he is relieved from liability.
This theory bases the responsibility of the master
ultimately on his own negligence and not on that of his
servant. This is the notable peculiarity of the Spanish law of
negligence. It is, of course, in striking contrast to the
American doctrine that, in relations with strangers, the
negligence of the servant in conclusively the negligence of
the master.
The opinion there expressed by this Court, to the effect that in
case of extra-contractual culpa based upon negligence, it is necessary
that there shall have been some fault attributable to the defendant
personally, and that the last paragraph of article 1903 merely
establishes a rebuttable presumption, is in complete accord with the
authoritative opinion of Manresa, who says (vol. 12, p. 611) that the
liability created by article 1903 is imposed by reason of the breach of
the duties inherent in the special relations of authority or superiority
existing between the person called upon to repair the damage and the
one who, by his act or omission, was the cause of it.
On the other hand, the liability of masters and employers for the
negligent acts or omissions of their servants or agents, when such acts
or omissions cause damages which amount to the breach of a contact,
is not based upon a mere presumption of the master's negligence in
their selection or control, and proof of exercise of the utmost diligence
and care in this regard does not relieve the master of his liability for the
breach of his contract.
Every legal obligation must of necessity be extra-contractual or
contractual. Extra-contractual obligation has its source in the breach or
omission of those mutual duties which civilized society imposes upon it
members, or which arise from these relations, other than contractual,
of certain members of society to others, generally embraced in the
concept of status. The legal rights of each member of society
constitute the measure of the corresponding legal duties, mainly
negative in character, which the existence of those rights imposes
upon all other members of society. The breach of these general duties

whether due to willful intent or to mere inattention, if productive of

injury, give rise to an obligation to indemnify the injured party. The
fundamental distinction between obligations of this character and those
which arise from contract, rests upon the fact that in cases of noncontractual obligation it is the wrongful or negligent act or omission
itself which creates the vinculum juris, whereas in contractual relations
the vinculum exists independently of the breach of the voluntary duty
assumed by the parties when entering into the contractual relation.
With respect to extra-contractual obligation arising from
negligence, whether of act or omission, it is competent for the
legislature to elect and our Legislature has so elected whom
such an obligation is imposed is morally culpable, or, on the contrary,
for reasons of public policy, to extend that liability, without regard to the
lack of moral culpability, so as to include responsibility for the
negligence of those person who acts or mission are imputable, by a
legal fiction, to others who are in a position to exercise an absolute or
limited control over them. The legislature which adopted our Civil Code
has elected to limit extra-contractual liability with certain welldefined exceptions to cases in which moral culpability can be
directly imputed to the persons to be charged. This moral responsibility
may consist in having failed to exercise due care in the selection and
control of one's agents or servants, or in the control of persons who, by
reason of their status, occupy a position of dependency with respect to
the person made liable for their conduct.
The position of a natural or juridical person who has undertaken
by contract to render service to another, is wholly different from that to
which article 1903 relates. When the sources of the obligation upon
which plaintiff's cause of action depends is a negligent act or omission,
the burden of proof rests upon plaintiff to prove the negligence if he
does not his action fails. But when the facts averred show a contractual
undertaking by defendant for the benefit of plaintiff, and it is alleged
that plaintiff has failed or refused to perform the contract, it is not
necessary for plaintiff to specify in his pleadings whether the breach of
the contract is due to willful fault or to negligence on the part of the
defendant, or of his servants or agents. Proof of the contract and of its
nonperformance is sufficient prima facie to warrant a recovery.
As a general rule . . . it is logical that in case of extracontractual culpa, a suing creditor should assume the
burden of proof of its existence, as the only fact upon which
his action is based; while on the contrary, in a case of
negligence which presupposes the existence of a contractual
obligation, if the creditor shows that it exists and that it has
been broken, it is not necessary for him to prove negligence.
(Manresa, vol. 8, p. 71 [1907 ed., p. 76]).
As it is not necessary for the plaintiff in an action for the breach
of a contract to show that the breach was due to the negligent conduct
of defendant or of his servants, even though such be in fact the actual
cause of the breach, it is obvious that proof on the part of defendant
that the negligence or omission of his servants or agents caused the
breach of the contract would not constitute a defense to the action. If
the negligence of servants or agents could be invoked as a means of
discharging the liability arising from contract, the anomalous result
would be that person acting through the medium of agents or servants
in the performance of their contracts, would be in a better position than
those acting in person. If one delivers a valuable watch to watchmaker
who contract to repair it, and the bailee, by a personal negligent act
causes its destruction, he is unquestionably liable. Would it be logical
to free him from his liability for the breach of his contract, which
involves the duty to exercise due care in the preservation of the watch,
if he shows that it was his servant whose negligence caused the
injury? If such a theory could be accepted, juridical persons would
enjoy practically complete immunity from damages arising from the
breach of their contracts if caused by negligent acts as such juridical

persons can of necessity only act through agents or servants, and it

would no doubt be true in most instances that reasonable care had
been taken in selection and direction of such servants. If one delivers
securities to a banking corporation as collateral, and they are lost by
reason of the negligence of some clerk employed by the bank, would it
be just and reasonable to permit the bank to relieve itself of liability for
the breach of its contract to return the collateral upon the payment of
the debt by proving that due care had been exercised in the selection
and direction of the clerk?
This distinction between culpa aquiliana, as the source of an
obligation, and culpa contractual as a mere incident to the performance
of a contract has frequently been recognized by the supreme court of
Spain. (Sentencias of June 27, 1894; November 20, 1896; and
December 13, 1896.) In the decisions of November 20, 1896, it
appeared that plaintiff's action arose ex contractu, but that defendant
sought to avail himself of the provisions of article 1902 of the Civil
Code as a defense. The Spanish Supreme Court rejected defendant's
contention, saying:
These are not cases of injury caused, without any preexisting obligation, by fault or negligence, such as those to
which article 1902 of the Civil Code relates, but of damages
caused by the defendant's failure to carry out the
undertakings imposed by the contracts . . . .
A brief review of the earlier decision of this court involving the
liability of employers for damage done by the negligent acts of their
servants will show that in no case has the court ever decided that the
negligence of the defendant's servants has been held to constitute a
defense to an action for damages for breach of contract.
In the case of Johnson vs. David (5 Phil. Rep., 663), the court
held that the owner of a carriage was not liable for the damages
caused by the negligence of his driver. In that case the court
commented on the fact that no evidence had been adduced in the trial
court that the defendant had been negligent in the employment of the
driver, or that he had any knowledge of his lack of skill or carefulness.
In the case of Baer Senior & Co's Successors vs. Compania
Maritima (6 Phil. Rep., 215), the plaintiff sued the defendant for
damages caused by the loss of a barge belonging to plaintiff which
was allowed to get adrift by the negligence of defendant's servants in
the course of the performance of a contract of towage. The court held,
citing Manresa (vol. 8, pp. 29, 69) that if the "obligation of the
defendant grew out of a contract made between it and the plaintiff . . .
we do not think that the provisions of articles 1902 and 1903 are
applicable to the case."
In the case of Chapman vs. Underwood (27 Phil. Rep., 374),
plaintiff sued the defendant to recover damages for the personal
injuries caused by the negligence of defendant's chauffeur while
driving defendant's automobile in which defendant was riding at the
time. The court found that the damages were caused by the
negligence of the driver of the automobile, but held that the master was
not liable, although he was present at the time, saying:
. . . unless the negligent acts of the driver are
continued for a length of time as to give the owner a
reasonable opportunity to observe them and to direct the
driver to desist therefrom. . . . The act complained of must be
continued in the presence of the owner for such length of
time that the owner by his acquiescence, makes the driver's
acts his own.

In the case of Yamada vs. Manila Railroad Co. and Bachrach

Garage & Taxicab Co. (33 Phil. Rep., 8), it is true that the court rested
its conclusion as to the liability of the defendant upon article 1903,
although the facts disclosed that the injury complaint of by plaintiff
constituted a breach of the duty to him arising out of the contract of
transportation. The express ground of the decision in this case was
that article 1903, in dealing with the liability of a master for the
negligent acts of his servants "makes the distinction between private
individuals and public enterprise;" that as to the latter the law creates a
rebuttable presumption of negligence in the selection or direction of
servants; and that in the particular case the presumption of negligence
had not been overcome.
It is evident, therefore that in its decision Yamada case, the court
treated plaintiff's action as though founded in tort rather than as based
upon the breach of the contract of carriage, and an examination of the
pleadings and of the briefs shows that the questions of law were in fact
discussed upon this theory. Viewed from the standpoint of the
defendant the practical result must have been the same in any event.
The proof disclosed beyond doubt that the defendant's servant was
grossly negligent and that his negligence was the proximate cause of
plaintiff's injury. It also affirmatively appeared that defendant had been
guilty of negligence in its failure to exercise proper discretion in the
direction of the servant. Defendant was, therefore, liable for the injury
suffered by plaintiff, whether the breach of the duty were to be
regarded as constituting culpa aquiliana or culpa contractual. As
Manresa points out (vol. 8, pp. 29 and 69) whether negligence occurs
an incident in the course of the performance of a contractual
undertaking or its itself the source of an extra-contractual undertaking
obligation, its essential characteristics are identical. There is always an
act or omission productive of damage due to carelessness or
inattention on the part of the defendant. Consequently, when the court
holds that a defendant is liable in damages for having failed to exercise
due care, either directly, or in failing to exercise proper care in the
selection and direction of his servants, the practical result is identical in
either case. Therefore, it follows that it is not to be inferred, because
the court held in the Yamada case that defendant was liable for the
damages negligently caused by its servants to a person to whom it
was bound by contract, and made reference to the fact that the
defendant was negligent in the selection and control of its servants,
that in such a case the court would have held that it would have been a
good defense to the action, if presented squarely upon the theory of
the breach of the contract, for defendant to have proved that it did in
fact exercise care in the selection and control of the servant.
The true explanation of such cases is to be found by directing
the attention to the relative spheres of contractual and extracontractual obligations. The field of non- contractual obligation is much
more broader than that of contractual obligations, comprising, as it
does, the whole extent of juridical human relations. These two fields,
figuratively speaking, concentric; that is to say, the mere fact that a
person is bound to another by contract does not relieve him from extracontractual liability to such person. When such a contractual relation
exists the obligor may break the contract under such conditions that
the same act which constitutes the source of an extra-contractual
obligation had no contract existed between the parties.
The contract of defendant to transport plaintiff carried with it, by
implication, the duty to carry him in safety and to provide safe means
of entering and leaving its trains (civil code, article 1258). That duty,
being contractual, was direct and immediate, and its non-performance
could not be excused by proof that the fault was morally imputable to
defendant's servants.
The railroad company's defense involves the assumption that
even granting that the negligent conduct of its servants in placing an
obstruction upon the platform was a breach of its contractual obligation

to maintain safe means of approaching and leaving its trains, the direct
and proximate cause of the injury suffered by plaintiff was his own
contributory negligence in failing to wait until the train had come to a
complete stop before alighting. Under the doctrine of comparative
negligence announced in the Rakes case (supra), if the accident was
caused by plaintiff's own negligence, no liability is imposed upon
defendant's negligence and plaintiff's negligence merely contributed to
his injury, the damages should be apportioned. It is, therefore,
important to ascertain if defendant was in fact guilty of negligence.
It may be admitted that had plaintiff waited until the train had
come to a full stop before alighting, the particular injury suffered by him
could not have occurred. Defendant contends, and cites many
authorities in support of the contention, that it is negligence per se for a
passenger to alight from a moving train. We are not disposed to
subscribe to this doctrine in its absolute form. We are of the opinion
that this proposition is too badly stated and is at variance with the
experience of every-day life. In this particular instance, that the train
was barely moving when plaintiff alighted is shown conclusively by the
fact that it came to stop within six meters from the place where he
stepped from it. Thousands of person alight from trains under these
conditions every day of the year, and sustain no injury where the
company has kept its platform free from dangerous obstructions. There
is no reason to believe that plaintiff would have suffered any injury
whatever in alighting as he did had it not been for defendant's
negligent failure to perform its duty to provide a safe alighting place.
We are of the opinion that the correct doctrine relating to this
subject is that expressed in Thompson's work on Negligence (vol. 3,
sec. 3010) as follows:
The test by which to determine whether the passenger
has been guilty of negligence in attempting to alight from a
moving railway train, is that of ordinary or reasonable care. It
is to be considered whether an ordinarily prudent person, of
the age, sex and condition of the passenger, would have
acted as the passenger acted under the circumstances
disclosed by the evidence. This care has been defined to be,
not the care which may or should be used by the prudent
man generally, but the care which a man of ordinary
prudence would use under similar circumstances, to avoid
injury." (Thompson, Commentaries on Negligence, vol. 3,
sec. 3010.)
Or, it we prefer to adopt the mode of exposition used by this
court in Picart vs. Smith (37 Phil. rep., 809), we may say that the test is
this; Was there anything in the circumstances surrounding the plaintiff
at the time he alighted from the train which would have admonished a
person of average prudence that to get off the train under the
conditions then existing was dangerous? If so, the plaintiff should have
desisted from alighting; and his failure so to desist was contributory
negligence.1awph!l.net
As the case now before us presents itself, the only fact from
which a conclusion can be drawn to the effect that plaintiff was guilty of
contributory negligence is that he stepped off the car without being
able to discern clearly the condition of the platform and while the train
was yet slowly moving. In considering the situation thus presented, it
should not be overlooked that the plaintiff was, as we find, ignorant of
the fact that the obstruction which was caused by the sacks of melons
piled on the platform existed; and as the defendant was bound by
reason of its duty as a public carrier to afford to its passengers facilities
for safe egress from its trains, the plaintiff had a right to assume, in the
absence of some circumstance to warn him to the contrary, that the
platform was clear. The place, as we have already stated, was dark, or
dimly lighted, and this also is proof of a failure upon the part of the

defendant in the performance of a duty owing by it to the plaintiff; for if

it were by any possibility concede that it had right to pile these sacks in
the path of alighting passengers, the placing of them adequately so
that their presence would be revealed.
As pertinent to the question of contributory negligence on the
part of the plaintiff in this case the following circumstances are to be
noted: The company's platform was constructed upon a level higher
than that of the roadbed and the surrounding ground. The distance
from the steps of the car to the spot where the alighting passenger
would place his feet on the platform was thus reduced, thereby
decreasing the risk incident to stepping off. The nature of the platform,
constructed as it was of cement material, also assured to the
passenger a stable and even surface on which to alight. Furthermore,
the plaintiff was possessed of the vigor and agility of young manhood,
and it was by no means so risky for him to get off while the train was
yet moving as the same act would have been in an aged or feeble
person. In determining the question of contributory negligence in
performing such act that is to say, whether the passenger acted
prudently or recklessly the age, sex, and physical condition of the
passenger are circumstances necessarily affecting the safety of the
passenger, and should be considered. Women, it has been observed,
as a general rule are less capable than men of alighting with safety
under such conditions, as the nature of their wearing apparel obstructs
the free movement of the limbs. Again, it may be noted that the place
was perfectly familiar to the plaintiff as it was his daily custom to get on
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-29462

March 7, 1929

IGNACIO DEL PRADO, plaintiff-appellee,

vs.
MANILA ELECTRIC CO., defendant-appellant.
Ross, Lawrence and Selph and Antonio T. Carrascoso, jr., for appellant.
Vicente Sotto for appellee.
STREET, J.:
This action was instituted in the Court of First Instance of Manila by Ignacio del
Prado to recover damages in the amount of P50,000 for personal injuries alleged
to have been caused by the negligence of te defendant, the Manila Electric
Company, in the operation of one of its street cars in the City of Manila. Upon
hearing the cause the trial court awarded to the plaintiff the sum of P10,000, as
damages, with costs of suit, and the defendant appealed.
The appellant, the Manila Electric Company, is engaged in operating street cars
in the City for the conveyance of passengers; and on the morning of November
18, 1925, one Teodorico Florenciano, as appellant's motorman, was in charge of
car No. 74 running from east to west on R. Hidalgo Street, the scene of the
accident being at a point near the intersection of said street and Mendoza Street.
After the car had stopped at its appointed place for taking on and letting off
passengers, just east of the intersection, it resumed its course at a moderate
speed under the guidance of the motorman. The car had proceeded only a short
distance, however, when the plaintiff, Ignacio del Prado, ran across the street to
catch the car, his approach being made from the left. The car was of the kind
having entrance and exist at either end, and the movement of the plaintiff was so
timed that he arrived at the front entrance of the car at the moment when the car
was passing.
The testimony of the plaintiff and of Ciriaco Guevara, one of his witnesses, tends
to shows that the plaintiff, upon approaching the car, raised his hand as an
indication to the motorman of his desire to board the car, in response to which
the motorman eased up a little, without stopping. Upon this the plaintiff seized,

and of the train at this station. There could, therefore, be no uncertainty

in his mind with regard either to the length of the step which he was
required to take or the character of the platform where he was
alighting. Our conclusion is that the conduct of the plaintiff in
undertaking to alight while the train was yet slightly under way was not
characterized by imprudence and that therefore he was not guilty of
contributory negligence.
The evidence shows that the plaintiff, at the time of the accident,
was earning P25 a month as a copyist clerk, and that the injuries he
has suffered have permanently disabled him from continuing that
employment. Defendant has not shown that any other gainful
occupation is open to plaintiff. His expectancy of life, according to the
standard mortality tables, is approximately thirty-three years. We are of
the opinion that a fair compensation for the damage suffered by him for
his permanent disability is the sum of P2,500, and that he is also
entitled to recover of defendant the additional sum of P790.25 for
medical attention, hospital services, and other incidental expenditures
connected with the treatment of his injuries.
The decision of lower court is reversed, and judgment is hereby
rendered plaintiff for the sum of P3,290.25, and for the costs of both
instances. So ordered.

with his hand, the front perpendicular handspot, at the same time placing his left
foot upon the platform. However, before the plaintiff's position had become
secure, and even before his raised right foot had reached the flatform, the
motorman applied the power, with the result that the car gave a slight lurch
forward. This sudden impulse to the car caused the plaintiff's foot to slip, and his
hand was jerked loose from the handpost, He therefore fell to the ground, and his
right foot was caught and crushed by the moving car. The next day the member
had to be amputated in the hospital. The witness, Ciriaco Guevara, also stated
that, as the plaintiff started to board the car, he grasped the handpost on either
side with both right and left hand. The latter statement may possibly be incorrect
as regards the use of his right hand by the plaintiff, but we are of the opinion that
the finding of the trial court to the effect that the motorman slowed up slightly as
the plaintiff was boarding the car that the plaintiff's fall was due in part at lease to
a sudden forward movement at the moment when the plaintiff put his foot on the
platform is supported by the evidence and ought not to be disturbed by us.
The motorman stated at the trial that he did not see the plaintiff attempting to
board the car; that he did not accelerate the speed of the car as claimed by the
plaintiff's witnesses; and that he in fact knew nothing of the incident until after the
plaintiff had been hurt and some one called to him to stop. We are not convinced
of the complete candor of this statement, for we are unable to see how a
motorman operating this car could have failed to see a person boarding the car
under the circumstances revealed in this case. It must be remembered that the
front handpost which, as all witness agree, was grasped by the plaintiff in
attempting to board the car, was immediately on the left side of the motorman.
With respect to the legal aspects of the case we may observe at the outset that
there is no obligation on the part of a street railway company to stop its cars to let
on intending passengers at other points than those appointed for stoppage. In
fact it would be impossible to operate a system of street cars if a company
engage in this business were required to stop any and everywhere to take on
people who were too indolent, or who imagine themselves to be in too great a
hurry, to go to the proper places for boarding the cars. Nevertheless, although the
motorman of this car was not bound to stop to let the plaintiff on, it was his duty
to do act that would have the effect of increasing the plaintiff's peril while he was
attempting to board the car. The premature acceleration of the car was, in our
opinion, a breach of this duty.
The relation between a carrier of passengers for hire and its patrons is of a
contractual nature; and in failure on the part of the carrier to use due care in
carrying its passengers safely is a breach of duty (culpa contructual) under
articles 1101, 1103 and 1104 of the Civil Code. Furthermore, the duty that the
carrier of passengers owes to its patrons extends to persons boarding the cars
as well as to those alighting therefrom. The case of Cangco vs. Manila Railroad

Co. (38 Phil., 768), supplies an instance of the violation of this duty with respect
to a passenger who was getting off of a train. In that case the plaintiff stepped off
of a moving train, while it was slowing down in a station, and at the time when it
was too dark for him to see clearly where he was putting his feet. The employees
of the company had carelessly left watermelons on the platform at the place
where the plaintiff alighted, with the result that his feet slipped and he fell under
the car, where his right arm badly injured. This court held that the railroad
company was liable for breach positive duty (culpa contractual), and the plaintiff
was awarded damages in the amount of P2,500 for the loss of his arm. In the
opinion in that case the distinction is clearly drawn between a liability for
negligence arising from breach of contructual duty and that arising articles 1902
and 1903 of the Civil Code (culpa aquiliana).
The distiction between these two sorts of negligence is important in this
jurisdiction, for the reason that where liability arises from a mere tort (culpa
aquiliana), not involving a breach of positive obligation, an employer, or master,
may exculpate himself, under the last paragraph of article 1903 of the Civil Code,
by providing that he had exercised due degligence to prevent the damage;
whereas this defense is not available if the liability of the master arises from a
breach of contrauctual duty (culpa contractual). In the case bfore us the company
pleaded as a special defense that it had used all the deligence of a good father of
a family to prevent the damage suffered by the plaintiff; and to establish this
contention the company introduced testimony showing that due care had been
used in training and instructing the motorman in charge of this car in his art. But
this proof is irrelevant in view of the fact that the liability involved was derived
from a breach of obligation under article 1101 of the Civil Code and related
provisions. (Manila Railroad Co. vs. Compana Transatlantica and Atlantic, Gulf &
Pacific Co., 38 Phil., 875, 887; De Guia vs. Manila Electric Railroad & Light Co.,
40 Phil., 706, 710.)
Another practical difference between liability for negligence arising under 1902 of
the Civil Code and liability arising from negligence in the performance of a
positive duty, under article 1101 and related provisions of the Civil Code, is that,
in dealing with the latter form of negligence, the court is given a discretion to
mitigate liability according to the circumstances of the case (art 1103). No such
general discretion is given by the Code in dealing with liability arising under
article 1902; although possibly the same end is reached by courts in dealing with
the latter form of liability because of the latitude of the considerations pertinent to
cases arising under this article.

As to the contributory negligence of the plaintiff, we are of the opinion that it

should be treated, as in Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359), as
a mitigating circumstance under article 1103 of the Civil Code. It is obvious that
the plaintiff's negligence in attempting to board the moving car was not the
proximate cause of the injury. The direct and proximate cause of the injury was
the act of appellant's motorman in putting on the power prematurely. A person
boarding a moving car must be taken to assume the risk of injury from boarding
the car under the conditions open to his view, but he cannot fairly be held to
assume the risk that the motorman, having the situation in view, will increase his
peril by accelerating the speed of the car before he is planted safely on the
platform. Again, the situation before us is one where the negligent act of the
company's servant succeeded the negligent act of the plaintiff, and the
negligence of the company must be considered the proximate cause of the injury.
The rule here applicable seems to be analogous to, if not identical with that which
is sometimes referred to as the doctrine of "the last clear chance." In accordance
with this doctrine, the contributory negligence of the party injured will not defeat
the action if it be shown that the defendant might, by the exercise of reasonable
care and prudence, have avoided the consequences of the negligence of the
injured party (20 R. C. L., p. 139; Carr vs. Interurban Ry. Co., 185 Iowa, 872; 171
N. W., 167). The negligence of the plaintiff was, however, contributory to the
accident and must be considered as a mitigating circumstance.
With respect to the effect of this injury upon the plaintiff's earning power, we note
that, although he lost his foot, he is able to use an artificial member without great
inconvenience and his earning capacity has probably not been reduced by more
than 30 per centum. In view of the precedents found in our decisions with respect
to the damages that ought to be awarded for the loss of limb, and more
particularly Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359); Cangco vs.
Manila Railroad Co. (38 Phil., 768); and Borromeo vs. Manila Electric Railroad
and Light Co. (44 Phil., 165), and in view of all the circumstances connected with
the case, we are of the opinion that the plaintiff will be adequately compensated
by an award of P2,500.
It being understood, therefore, that the appealed judgment is modified by
reducing the recovery to the sum of P2,500, the judgment, as thus modified, is
affirmed. So ordered, with costs against the appellant.