Trans-Asia Shipping vs. Court of Appeals | (1996) (Keyword/s: Engine failure of ship) FACTS - Atty.

Arroyo boarded the ship of petitioner Trans-asia (Cebu-CDO) - Due to engine failure, the ship stopped in the middle of the sea just after an hour of slow voyage. - Some passengers (including Atty. Arroyo) demanded to be returned to Cebu City. The captain acceded and they were returned to the Cebu port and were allowed to disembark. Atty. Arroyo stayed another night in Cebu and boarded another ship of Trans-asia the following day. - Arroyo filed a complaint for damages arising from bad faith, breach of contract and from tort. - RTC: DISMISSED. - CA: Reversed; awarded compensatory, moral, and exemplary damages. It did not, however, allow the grant of damages for the delay in the performance of the petitioners obligation (as there was no demand made). ISSUE/S & HELD: WoN Trans-asia is liable to Atty. Arroyo. YES (except for ACTUAL DAMAGES. RATIONALE - Undoubtedly, there was, between the parties, 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. - In this case, we are in full accord with the Court of Appeals that the petitioner failed to discharge the obligation of a common carrier as the law provides. - Trans-asia 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. Plainly, the vessel was unseaworthy even before the voyage began. 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. As to Damages: - In a breach of a contract of common carriage, moral damages may be awarded if the common carrier, acted fraudulently or in bad faith. - Exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. In contracts and quasi-contracts, exemplary damages may be awarded if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. - - Actual or compensatory damages represent the adequate compensation for pecuniary loss suffered and for profits the obligee failed to obtain. 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. (Trans-asia not liable for actual damages) - 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. As to the rights and duties of the parties strictly arising out of such delay, the Civil Code is silent. Article 698 1 of the Code of Commerce specifically provides for such a situation. - This article applies suppletorily pursuant to Article 1766 of the Civil Code. Since the cause of the delay was the petitioner's failure to observe extraordinary diligence, Article 698 must then be read together with the Civil Code provisions: 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. - Any further delay then in the private respondent's arrival at the port of destination was caused by his decision to disembark. Actual or compensatory damages must be proved. There is no convincing evidence that he did not receive his salary for that day nor that his absence was not excused. Pilapil V. CA | Padilla, J. (1989) RATIO DECIDENDI While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them, it does not make the carrier an insurer of the absolute safety of its passengers. FACTS Jose Pilapil, a paying passenger, boarded Alatco Transportation Companys bus No. 409 at San Iriga City. Upon reaching Camarines Sur, on the way to Naga City, an unidentified man, a bystander along said national highway, hurled a stone at the left side of the bus, which hit Pilapil above his left eye. The bus companys personnel lost no time in bringing the petitioner to the provincial hospital in Naga City where he was confined and treated. o Considering that the sight of his left eye was impaired, Pilapil was taken to Dr. Malabanan of Iriga City where he was treated for another week. o Since there was no improvement in his left eye's vision, Pilapil went to V. Luna Hospital, Quezon City where he was treated by Dr. Capulong. o Despite the treatment accorded to him by Dr. Capulong, Pilapil

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.

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lost partially his left eye's vision and sustained a permanent scar above the left eye. Pilapil then sued the bus company for damages sustained as a result of the stone-throwing incident.

ISSUE/HELD WoN Alatco Bus Company is liable for damages sustained as a result of the stone-throwing incident - NO RATIO A common carrier does not give its consent to become an insurer of any and all risks to passengers and goods. o It merely undertakes to perform certain duties to the public as the law imposes, and holds itself liable for any breach thereof. Under Article 1733, common carriers are required to observe extraordinary diligence for the safety of the passenger transported by them, according to all the circumstances of each case. o In case of death of or injuries to passengers, the law presumes said common carriers to be at fault or to have acted negligently. While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them, it does not make the carrier an insurer of the absolute safety of its passengers. o Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of passengers by common carriers to only such as human care and foresight can provide. Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier when its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to fasten the negligence on the former, because the presumption stands in the place of evidence. o Being a mere presumption, the same is rebuttable by proof that the common carrier had exercised extraordinary diligence as required by law in the performance of its contractual obligation, or that the injury suffered by the passenger was solely due to a fortuitous event. o Neither the law nor the nature of the business of a transportation company makes it an insurer of the passenger's safety, but that its liability for personal injuries sustained by its passenger rests upon its negligence, its failure to exercise the degree of diligence

that the law requires. The presumption of fault or negligence against the carrier is only a disputable presumption. o Where, as in the instant case, the injury sustained by Pilapil was in no way due to any defect in the means of transport or in the method of transporting or to the negligent or willful acts of Alatcos employees, and therefore involving no issue of negligence in its duty to provide safe and suitable cars as well as competent employees, with the injury arising wholly from causes created by strangers over which the carrier had no control or even knowledge or could not have prevented, the presumption is rebutted and the carrier is not and ought not to be held liable. As a general rule, common carriers are bound to exercise extraordinary diligence in the safe transport of their passengers, it would seem that this is not the standard by which its liability is to be determined when intervening acts of strangers is to be determined to directly cause the injury. A tort committed by a stranger which causes injury to a passenger does not accord the latter a cause of action against the carrier. The negligence for which a common carrier is held responsible is the negligent omission by the carrier's employees to prevent the tort from being committed when the same could have been foreseen and prevented by them. When the violation of the contract is due to the willful acts of strangers, as in the instant case, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only that of a good father of a family. o The carrier is not charged with the duty of providing or maintaining vehicles as to absolutely prevent any and all injuries to passengers. o Where the carrier uses cars of the most approved type, in general use by others engaged in the same occupation, and exercises a high degree of care in maintaining them in suitable condition, the carrier cannot be charged with negligence in this respect.

Yobido vs. Court of Appeals | Romero (1997) FACTS Respondents, spouses Tito and Leny Tumboy together with their children Ardee and Jasmin (Tumboys), boarded a Yobido bus bound for Davao City at Surigao del Sur. While traveling, the left front tire of the bus exploded, causing it to fall into a ravine and hit a tree. Tito died from the accident while the rest of the family suffered injuries. The Tumboys filed a complaint for breach of contract of carriage Page 2 of 6

against petitioners Alberta Yobido (Alberta), the owner of the bus, and Cresencio Yobido (Cresencio), its driver. The Tumboys asserted that the Cresencio failed to exercise the diligence required of the carrier because he was driving fast even with the poor condition the road and the rainy weather. Alberta and Cresencio claim that the explosion of the tire was a fortuitous event which could not have been foreseen or avoided, considering the following: it was a new tire, the bus going at a slow speed because it was traversing a zigzag road, and the bus was traveling below full capacity. The trial court ruled in favor of Alberta and Cresencio. The Court of Appeals reversed and awarded damages for the Tumboys. Hence, this petition.

human factors involved in the situation. Moreover, a common carrier may not be absolved from liability by the mere fact that fortuitous event had occurred; the common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident. It was incumbent upon the defense to establish that it took precautionary measures considering partially dangerous condition of the road. Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby held liable for damages.

Japan Airlines v Asuncion | Ynares-Santiago | 2005 FACTS: Michael and Jeannette Asuncion (respondents) left Manila on board JAL bound for Los Angeles Their itinerary included a stopover in Narita and an overnight stay at Hotel Nikko Narita thus the need for a shore pass, which is required of a foreigner who desires to stay in the neighborhood of the port of call Upon arrival, an employee of JAL endorsed the Respondents applications for shore pass to the Japanese Immigration Official. However, Respondents application was denied because Michael appeared to be shorter than his height as indicated in his passport. And so they were brought instead to the Narita Airport Rest House and were charged $400 each for their accommodation Respondents filed a complaint for damages claiming that o JAL did not fully apprise them of their travel requirements o JAL did not exhaust all means to prevent the denial of their shore pass entry applications o They were rudely and forcibly detained at Narita JAL contends that the refusal of the immigration official is an act of state which JAL cannot interfere with or prevail upon TC and CA ruled in favor of the Respondents ISSUE: WoN JAL is guilty of breach of contract DECISION: NO A contract of carriage includes the duty of JAL to inspect whether its passengers have the necessary travel documents. HOWEVER, this duty does not extend to checking the veracity of every entry This is because the power to admit or not an alien into the country is a sovereign act, which cannot be interfered with even by JAL. AS SUCH, JAL cannot vouch for the authenticity of a passport and correctness of the entries therein RE: JALs failure to apprise the Respondents, it must be noted that Respondents, prior to their departure were aware of the need to secure shore pass entries for their overnight stay at Hotel Nikko Page 3 of 6

ISSUES/HELD Was the bursting of the tire a fortuitous event which would exempt Alberta and Cresencio from liability? NO. Judgment affirmed. RATIONALE When a passenger boards a common carrier, he takes the risks incidental to the mode of travel he has taken because, 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. However, as expressed in Art. 1756, when a passenger is injured or dies while travelling, the law presumes that the common carrier is negligent. 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. This disputable presumption may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed by Articles 1733, 1755 and 1756 of the Civil Code or that the death or injury of the passenger was due to a fortuitous event. 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 obliger must be free from any participation in the aggravation of the injury resulting to the creditor. Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous event because there are

RE: failure of JAL to exhaust all means, as mentioned, JAL has no authority to interfere with or influence the immigration officials. The most that it could do is to endorse the Respondents applications, which JAL immediately did upon arrival of Respondents. IN FACT, JAL did all it could to assist them (making reservations at the Rest House) RE: allegations of improper behavior, it must be noted that Michaels testimony did not categorically state those allegations RE: claim for damages, since there is no breach of contract nor proof that JAL acted fraudulently, there is no basis for the award of any damages RE: claim for reimbursement (accommodation fee), it was proven that the amount did not accrue to the benefit of JAL

Maranan vs. Perez FACTS Rogelio Carachea rode a taxi owned and operated by Pascual Perez when he was stabbed and killed by the driver, Simeon Valenzuela Valenzuela was found guilty for homicide in the CFI While appeal was pending in CA, Maranan (Rogelios mom) filed an action in CFI to recover damages from Perez (taxi owner) and Valenzuela for her sons death Perez and Valenzuela assert that Rogelio was killed in self-defense since he first assaulted driver from behind. Perez also claimed that the death was a caso fortuito for which the carrier was not liable. CFI ruled in favour of plaintiff Maranan CA affirmed ISSUE: WoN Perez, taxi owner and operator, should be held liable for the death of the taxi passenger? YES. Perez relies on the ruling in Gillaco v. Manila Railroad Co . where it held that the carrier is under no absolute liability for assaults of its employees upon the passengers. HELD

In the Gillaco2 case, the passenger was killed outside the scope and the course of duty of the guilty employee. In this case, the killing was done by the driver of the taxi transporting the passenger, in whose hands the carrier had entrusted the duty of executing the contract of carriage. Unlike in the Gillaco case, the passengers killing here happened in the course of duty of the guilty employee and within the scope of his duties. Moreover, the Gillaco case was decided under the Civil Code of 1889

provisions, which (unlike the new Civil Code) did not impose upon common carriers absolute liability for the safety of the passengers against wilful assaults or negligent acts committed by their employees. Unlike the old Civil Code, the new Civil Code expressly makes the common carrier liable for intentional assaults committed by its employees upon its passengers under Art. 1759 CC. The Civil Code provisions on common carriers were taken from Anglo American Law which based the common carriers liability for assaults on passengers committed by its drivers on either: o (a) the doctrine of respondeat superior OR o (b) the principle that it is the carriers implied duty to transport the passenger safely. Under (a) the doctrine of respondeat superior, the carrier is liable only when the employees act is within the scope of his authority and duty. BUT under the (b), its not enough that the assault happens within the course of the employees duty. The carriers liability is absolute such that it practically secures the passengers from assaults committed by its own employees. Under Art. 1759 CC, Philippines follows (b) the principle that it is the carriers implied duty to transport the passenger safely. The rule is based on 3 reasons: o the carriers special undertaking requires that it furnish its passengers full measure of protection afforded by the exercise of the high degree of care prescribed by law from violence and insults from strangers, passengers and most especially from its owns employees charged with passengers safety o It is the result of the carriers confiding in the employees hands the performance of his contract to safely transport the passenger, delegating the duty of protecting the passenger with the utmost care prescribed by law o The carrier must bear the risk of wrongful acts or negligence of the carriers employees against passengers since it has the power to select and remove them It is the carriers strict obligation to select its drivers and similar employees with due regard not just to their technical competence and physical ability but also to their total personality, behaviour, moral fiber and social attitude.

Isaac vs. A. L. Ammen Fortune Express vs. Court of Appeals | (1999) (Keywords: Maranaos hijack and burn bus) FACTS - There was a previous accident between a jeepney and a bus of petitioner where 2 Maranaos died. An agent of the Constabulary conducted an investigation and he found that certain Maranaos were planning to take Page 4 of 6

When the crime happened, the guard had no duty to discharge in connection with the transportation of the deceased.

revenge on petitioner by burning some of its buses. - This information was reported to Operations manager of Fortune Express who assured the agent that the necessary precautions would be taken. - 4 days after the incident, a bus of petitioner was hijacked by 3 armed Maranaos who pretended to be passengers. Atty. Caraong was on this bus. They planned to burn the bus and the driver of the bus. The passengers were allowed to run away from the bus, but Atty. Caraong went back to the bus to retrieve something. He then pleaded for the life of the driver, so he was shot by the armed men. - RTC: Dismissed the complaint. There was no duty on the part of the common carrier to provide security guards. It is an obligation that properly belongs to the State. The death was due to the wilfull acts of the lawless for which the common carrier could neither prevent nor stop. - CA: Reversed. Carrier was negligent. No concrete action was taken by the carrier in light of the information they received. There was no system of verification adopted such as frisking of passengers. ISSUE/S & HELD: WON Fortune Express is liable to the respondents? YES. RATIONALE - Art. 1763: a common carrier is responsible for injuries suffered by a passenger on account of willful acts of other passengers, if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. In the case at bar, because of the negligence of petitioners employees, the seizure of the bus by the Maranaos was made possible. Petitioner did nothing to protect the safety of its passengers despite the warning given to them. - Petitioners employees failed to prevent the attack because they did not exercise the diligence of a good father of a family, by being vigilant or frisking the passengers. - The case may not be deemed a fortuitous event since the event was foreseeable. Neither may the deceased be held guilty of contributory negligence as he was playing the role of the Good Samaritan. - Fortune is liable for Indemnity for death, actual damages, moral, exemplary, attorneys fees and Compensation for loss of earning capacity. Net earning capacity = (Life expectancy) (Gross Annual Income Necessary Living Expenses) Life expectancy = (2/3) (80 age of deceased) Victory Liner v. Gammad | Ynares-Santiago (2004) Facts: On March 14, 1996, Rosalito Gammads wife, Marie Grace PagulayanGammad, was on board an air-conditioned Victory Liner bus bound for Tuguegarao, Cagayan from Manila.

At about 3:00 a.m., the bus while running at a high speed fell on a ravine somewhere in Barangay Baliling, Sta. Fe, Nueva Vizcaya, which resulted in the death of Marie Grace and physical injuries to other passengers. Respondent heirs of the deceased filed a complaint for damages arising from culpa contractual against petitioner. In its answer, the petitioner claimed that the incident was purely accidental and that it has always exercised extraordinary diligence in its 50 years of operation. Trial court rendered its decision in favor of respondents, ordering Victory Liner to pay the following: o Actual Damages: P 122,000.00; Death Indemnity: 50,000.00; Exemplary and Moral Damages: 400,000.00; Compensatory Damages: 1,500,000.00; Attorneys Fees: 10% of the total amount granted; Cost of the Suit. Court of Appeals affirmed the decision of the trial court with modification as follows: o Actual Damages: P88,270.00; Compensatory Damages: P1,135,536,10; Moral and Exemplary Damages: P400,000.00 Petitioner filed MR praying that the case be remanded to the trial court for cross-examination of respondents witness and for the presentation of its evidence, invoking APEX Mining, Inc. v. Court of Appeals, which set aside the decision of the trial court because of the negligence of its former counsel. MR was denied.

Issues: 1. WON petitioners counsel was guilty of gross negligence. NO 2. WON petitioner should be held liable for breach of contract of carriage. YES 3. WON the award of damages was proper. NO Held: 1. Petitioner is guilty, at the least, of contributory negligence and fault cannot be imputed solely on previous counsel. 2. Petitioner was correctly found liable for breach of contract of carriage. A common carrier 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 due regard to all the circumstances. In a contract of carriage, it is presumed that the common carrier was at fault or was negligent when a passenger dies or is injured. Unless the presumption is rebutted, the court need not even make an express finding of fault or negligence on the part of the common carrier. This statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence. In the instant case, there is no evidence to rebut the statutory presumption that the proximate cause of Marie Graces death was the negligence of petitioner. Hence, the courts below correctly ruled that petitioner was guilty of breach of contract of carriage. 3. Article 1764 in relation to Article 2206 of the Civil Code, holds the common carrier in breach of its contract of carriage that results in the death of a Page 5 of 6

passenger liable to pay the following: (1) indemnity for death, (2) indemnity for loss of earning capacity, and (3) moral damages. Death indemnity: entitled to indemnity for the death of Marie Grace which under current jurisprudence is fixed at P50,000.00. Compensatory: The award of compensatory damages for the loss of the deceaseds earning capacity should be deleted for lack of basis. As a rule, documentary evidence should be presented to substantiate the claim for damages for loss of earning capacity. (Exception: when (1) the deceased is self-employed earning less than the minimum wage under current labor laws, and judicial notice may be taken of the fact that in the deceaseds line of work no documentary evidence is available; or (2) the deceased is employed as a daily wage worker earning less than the minimum wage under current labor laws.) The award is erroneous because the deceaseds earnings does not fall within the exceptions. Temperate: the amount of P500,000.00 should be awarded to respondents under Article 2224 of the Civil Code. Moral: P100, 000; Exemplary: P100,000. Moral damages cannot be lumped with exemplary damages because they are based on different jural foundations. These damages are different in nature and require separate determination. By special rule in Article 1764 in relation to Article 2206 of the Civil Code, moral damages may also be awarded in case the death of a passenger results from a breach of carriage. On the other hand, exemplary damages may be recovered in contractual obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner. Respondents in the instant case should be awarded moral damages to compensate for the grief caused by the death of the deceased resulting from the petitioners breach of contract of carriage. Furthermore, the petitioner failed to prove that it exercised the extraordinary diligence required for common carriers, it is presumed to have acted recklessly. Actual: should be further reduced to P78,160.00, which was the amount supported by official receipts. Interest: 12% per annum until satisfaction, per paragraph 3 of the rule in Eastern Shipping Lines, Inc. v. Court of Appeals.

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